RNS Number : 8147W
Close Second AIM VCT PLC
16 June 2008
CLOSE SECOND AIM VCT PLC
ANNUAL RESULTS
16 June 2008
Preliminary announcement of the annual financial results for the twelve months to 29 February 2008. Copies of the full Report and
Financial Statements can be found on www.closeventures.co.uk
Close Second AIM VCT PLC (the "Company"), which invests in companies listed on the Alternative Investment Market and PLUS, across a
variety of sectors, today announces annual results for the year ended 29 February 2008. This announcement was approved by the Board of
Directors on 13 June 2008.
Ordinary Shares C & D Shares
Year ended Year ended Year ended Year ended
29 29 29 29
February February February February
2008 2007 2008 2007
Dividends paid per share 11.00 7.00 2.21 0.75
(pence)
(Loss)/return per share for the (11.87) 7.20 (4.90) 3.05
year (pence)
Net asset value per share 40.18 62.97 89.25 96.36
(pence)
Movement in FTSE AIM Index (%) (7.48) (6.34) (7.48) (6.34)
Movement in FTSE Small Cap (25.33) 12.70 (25.33) 12.70
(excl. Investment Trusts) (%)
Shareholder value per share since launch:
Ordinary Shares C & D Shares
pence per share pence per share
Total dividends paid during the year to 28 1.60 -
February 2003
Total dividends paid during the year to 28 - -
February 2004
Total dividends paid during the year to 28 - -
February 2005
Total dividends paid during the year to 28 1.00 -
February 2006
Total dividends paid during the year to 28 7.00 0.75
February 2007
Total dividends paid during the year to 29 11.00 2.21
February 2008
Total dividends (capital and revenue) 20.60 2.96
Net asset value 29 February 2008 40.18 89.25
Total cumulative shareholder return at 29 60.78 92.21
February 2008
In addition to the dividends above, the Directors have declared an Ordinary share dividend to be paid out of realised gains of 1.00
pence per share. This dividend is subject to approval of HM Revenue & Customs. The record date and payment date of this dividend will be
announced on the London Stock Exchange RNS service.
The Board has declared a dividend of 1.00 pence per C and D share to be paid on 25 July 2008 to shareholders on the register as at 27
June 2008.
Chairman's statement
In my Half-yearly statement last October, I highlighted the detrimental effect that news of sub-prime losses and the credit crunch had
already had on the market, and particularly on smaller company shares.
Unfortunately, the second half of the year has continued in the same vein as that of the first, namely volatile stockmarkets that have
particularly impacted the share prices of smaller companies as appetite for risk has diminished. As a result I have to report a net asset
value decline of 18.7 per cent and 5.1 per cent (after adding back dividends paid of 11.00 pence and 2.21 pence per each class of share) for
the Ordinary and C and D shares respectively for the year to 29 February 2008.
The above performance needs to be placed into context. Although there is not a perfect comparable index, the two most relevant indices
are the FTSE AIM Index and the FTSE Small Cap (excl. Investment Trusts). The former declined by 7.5 per cent, reflecting its significant
bias (30 per cent) towards the Oil and Gas, and Basic Materials sectors which performed very well, but in which we cannot invest. The latter
index, which does not have the same bias, declined by 25.3 per cent during this period.
During the second half of the year, the C and D share portfolio made 8 new qualifying investments and ended the year 45 per cent
invested in qualifying holdings. Investments made since the year end have increased this to 55 per cent. With eight months to go, the
Investment Manager is confident of being able to meet the HM Revenue & Customs target of 70 per cent for the Company.
Performance
The Investment Manager's report in the Report and Financial Statements gives further details of the market background and the reasons
underlying the performance of the portfolios.
Dividends
Ordinary shares
Dividends paid during the financial year to 29 February 2008 totalled 11.00 pence per Ordinary share. The Board has declared a first
dividend of 1.00 pence per share to be paid out of realised capital gains. This dividend is subject to HM Revenue & Customs approval and the
record date and payment date of this dividend will be announced on the London Stock Exchange RNS service.
C&D shares
Dividends paid during the financial year to 29 February 2008 totalled 2.21 pence per C and D share. In addition, the Board has declared
a first dividend of 1.00 pence per share. This revenue dividend will be payable on 25 July 2008 to shareholders on the register as at 27
June 2008.
Share buybacks and management of the discount
Your Board continues to believe that it is in the best interests of all shareholders for it to manage the discount to net asset value at
which the shares trade with a view to maintaining it at 10 per cent or below. During the year under review 94,848 Ordinary shares were
repurchased for cancellation. In addition 113,656 Ordinary shares were bought into Treasury, at an average price of 40 pence, which may give
your Board greater flexibility in regard to future re-issuance. There were no C or D shares purchased. Shareholders intending to sell their
shares might wish to contact the Investment Manager at Close Investments Limited.
Risks and Uncertainties
One of the key issues facing the Company is the need to meet HM Revenue & Customs regulations requiring 70 per cent of your Company to
be invested in qualifying holdings within three years and to maintain that level of cover thereafter. Although the UK economy may still be
growing, it could be affected by the current unease in the financial and property markets. While this could give rise to additional
investment opportunities at lower prices, a downturn could affect existing investee companies' trading prospects and share prices.
Proposed change to the Company's Articles of Association
At the Annual General meeting, a special resolution will be proposed to adopt new Articles (the "New Articles") in order to update the
Company's existing Articles of Association (the "Current Articles") and to take account of the changes that have been brought into force by
Companies Act 2006. Whilst the Company will be incorporating the new provisions of the Companies Act 2006 in relation to electronic and/or
website communications, it does not yet intend to communicate with its shareholders via such means. A further resolution will be proposed to
enable the Directors to manage the conflicts of interest as permitted by Companies Act 2006 and which will come into force on 1 October 2008
or such later date as section 175 of Companies Act 2006 provides. The Directors are proposing a resolution to allow Directors to approve
actual or potential conflicts situations, should it be in the Company's best interests to do so, and to allow conflicts of interest to be
dealt with in a similar way to the current position.
Outlook
The year under review has been an exceptionally difficult time for financial markets and smaller companies in particular. There has been
a collapse in confidence amongst investors and until this is restored, markets will remain fragile. In addition, there is now evidence of a
slowing economy coupled with increased inflation, which will make it harder for companies to grow. Thus, despite the generally good recent
trading results from many of the companies in your portfolio, their share prices have been substantially de-rated compared with larger
companies. We expect many companies in your portfolio to continue to make underlying trading progress; however, this progress is unlikely to
be reflected in valuations until underlying sentiment towards smaller companies turns.
Alastair Ritchie
Director
13 June 2008
Income Statement
for the year ended 29 February 2008
C &D Shares
29 February 2008 Total
29 February
2008
Ordinary Shares
29 February 2008
Revenue Capital Total Revenue Capital Total Revenue Capital
Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
�'000
Losses on investments - (889) (889) - (1,154) (1,154) - (2,043)
(2,043)
55 - 55 774 - 774 829 -
829
Investment income
Investment management fees (22) (67) (89) (113) (340) (453) (135) (407)
(542)
(30) - (30) (117) - (117) (147) -
(147)
Other expenses
Return/(loss) on ordinary 3 (956) (953) 544 (1,494) (950) 547 (2,450)
(1,903)
activities before taxation
Tax on credit/(charge) on 3 40 43 (130) 87 (43) (127) 127
-
ordinary activities
Return/(loss) attributable to 6 (916) (910) 414 (1,407) (993) 420 (2,323)
(1,903)
shareholders
0.08 (11.95) (11.87) 2.05 (6.95) (4.90)
Basic and diluted
return/(loss) per share
(pence) *
* excluding Treasury shares.
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the year as set out above, accordingly a Statement of Total
Recognised
Gains or Losses is not required.
The total column of the Income Statement represents the profit and loss account of the Company. The supplementary revenue return and
capital return
columns have been prepared in accordance with the Association of Investment Companies' Statement of Recommended Practice.
Income Statement
for the year ended 28 February 2007
C &D Shares
28 February 2007
Total
28
February 2007
Ordinary Shares
28 February 2007
Revenue Capital Total Revenue Capital Total Revenue
Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000
�'000 �'000
Gains on investments - 623 623 - 423 423 -
1,046 1,046
62 - 62 760 - 760 822
- 822
Investment income
Investment management fees (29) (87) (116) (113) (338) (451) (142)
(425) (567)
(55) - (55) (117) - (117) (172)
- (172)
Other expenses
(Loss)/return on ordinary (22) 536 514 530 85 615 508
621 1,129
activities before taxation
Tax on credit/(charge) on 10 37 47 (130) 83 (47) (120)
120 -
ordinary activities
(Loss)/return attributable to (12) 573 561 400 168 568 388
741 1,129
shareholders
(0.15) 7.35 7.20 2.15 0.90 3.05
Basic and diluted
(loss)/return per share
(pence)
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the year as set out above, accordingly a statement of total
recognised gains or losses is
not required.
The total column of the Income Statement represents the profit and loss account of the Company. The supplementary revenue return and
capital return columns have
been prepared in accordance with the Association of Investment Companies' Statement of Recommended Practice.
Balance Sheet
As at 29 February 2008
Ordinary Shares C & D Shares Total
As at As at As at
29 February 29 February 29 February
2008 2008 2008
�'000 �'000 �'000
Fixed assets investments
Investments at fair value 2,426 15,831 18,257
through profit or loss
Current assets
Debtors 48 85 133
Cash at bank 577 2,263 2,840
625 2,348 2,973
Creditors: amounts falling due (15) (114) (129)
within one year
610 2,234 2,844
Net current assets
3,036 18,065 21,101
Net assets
Capital and reserves
Called up share capital 383 1,012 1,395
Special reserve 7,333 18,077 25,410
Capital redemption reserve 61 - 61
Own shares held in Treasury (44) - (44)
Realised capital reserve (4,124) (302) (4,426)
Unrealised capital reserve (162) (937) (1,099)
Revenue reserve (411) 215 (196)
3,036 18,065 21,101
Shareholders' funds
40.18 89.25
Net asset value per share
(pence) *
* excluding Treasury shares.
Balance Sheet
As at 28 February 2007
Ordinary Shares C & D Shares Total
As at As at As at
28 February 28 February 28 February
2007 2007 2007
�'000 �'000 �'000
Fixed assets investments
Investments at fair value 4,263 19,174 23,437
through profit or loss
Current assets
Debtors 55 133 188
Cash at bank 581 286 867
636 419 1,055
Creditors: amounts falling due (10) (88) (98)
within one year
626 331 957
Net current assets
4,889 19,505 24,394
Net assets
Capital and reserves
Called up share capital 388 1,012 1,400
Special reserve 7,388 18,077 25,465
Capital redemption reserve 56 - 56
Realised capital reserve (3,511) (237) (3,748)
Unrealised capital reserve 985 405 1,390
Revenue reserve (417) 248 (169)
4,889 19,505 24,394
Shareholders' funds
62.97 96.36
Net asset value per share
(pence)
Reconciliation of movements in shareholders' funds
For the year ended 29 February 2008
Ordinary Shares
Called up share Special reserve Capital redemption Own shares Realised capital
Unrealised capital Revenue reserve Total
capital reserve held in reserve
reserve
Treasury
�'000 �'000 �'000 �'000 �'000
�'000 �'000 �'000
As at 28 February 2007 388 7,388 56 - (3,511)
985 (417) 4,889
Net return after taxation for - - - - 231
(1,147) 6 (910)
the year
Dividends paid to shareholders - - - - (844)
- - (844)
Ordinary shares purchased and - - - (44) -
- - (44)
held in Treasury
Shares purchased for (5) (55) 5 - -
- - (55)
cancellation
As at 29 February 2008 383 7,333 61 (44) (4,124)
(162) (411) 3,036
As at 28 February 2006 404 7,564 40 - (3,849)
1,296 (405) 5,050
Net return after taxation - - - - 884
(311) (12) 561
Dividends paid to shareholders - - - - (546)
- - (546)
Shares purchased for (16) (176) 16 - -
- - (176)
cancellation
As at 28 February 2007 388 7,388 56 - (3,511)
985 (417) 4,889
Reconciliation of movements in shareholders' funds
For the year ended 29 February 2008
C &D Shares
Called up share Share premium Special reserve Realised capital Unrealised capital Revenue
reserve Total
capital reserve reserve
�'000 �'000 �'000 �'000 �'000
�'000 �'000
As at 28 February 2007 1,012 - 18,077 (237) 405
248 19,505
Net return after taxation for - - - (65) (1,342)
414 (993)
the year
Dividends paid to shareholders - - - - -
(447) (447)
As at 29 February 2008 1,012 - 18,077 (302) (937)
215 18,065
As at 28 February 2006 - - - - -
- -
Net return after taxation for - - - (237) 405
400 568
the year
Dividends paid to shareholders - - - - -
(152) (152)
Issue of shares (net of 1,012 18,115 - - -
- 19,127
expenses)
Transfer of reserves* - (18,115) 18,115 - -
- -
Costs of cancelling share - - (38) - -
- (38)
premium
As at 28 February 2007 1,012 - 18,077 (237) 405
248 19,505
*The transfer arises from the Court approval to cancel share premium account on 19 September 2006.
Cash Flow Statement
for the year ended 29 February 2008
Ordinary Shares C & D Shares Total
29 February 29 February 29
2008 2008 February
�'000 �'000 2008
�'000
Operating activities
Investment income 38 738 776
Deposit interest received 22 75 97
Investment management fees paid (85) (427) (512)
Other cash receipts/(payments) 16 (155) (139)
Net cash (outflow)/inflow from (9) 231 222
operating activities
Capital expenditure and financial
investment
Purchase of qualifying investments (221) (5,362) (5,583)
Purchase of non-qualifying - (313) (313)
investments
Disposal of qualifying investments 868 375 1,243
Disposal of non-qualifying 301 7,489 7,790
investments
948 2,189 3,137
Net cash inflow from capital
expenditure and financial investment
Equity dividends paid
Revenue dividends paid - (447) (447)
Capital dividends paid (844) - (844)
(844) (447) (1,291)
Net cash inflow before financing 95 1,973 2,068
Financing
Issue of equity net of expenses - 4 4
Purchase of shares to be held in (44) - (44)
Treasury
Cancellation of shares (55) - (55)
Net cash (outflow)/inflow from (99) 4 (95)
financing
(4) 1,977 1,973
(Decrease)/increase in cash in the
year
.
Cash Flow Statement
for the year ended 28 February 2007
Ordinary Shares C & D Shares Total
28 February 28 February 28
2007 2007 February
�'000 �'000 2007
�'000
Operating activities
Investment income received 31 529 560
Deposit interest received 28 110 138
Investment management fees paid (129) (443) (572)
Other cash payments (105) (93) (198)
Net cash (outflow)/inflow from (175) 103 (72)
operating activities
Capital expenditure and financial
investment
Purchase of qualifying investments (321) (2,926) (3,247)
Purchase of non-qualifying (1) (16,008) (16,009)
investments
Disposal of qualifying investments 1 184 185
Disposal of non-qualifying 1,629 - 1,629
investments
Net cash inflow/(outflow) from 1,308 (18,750) (17,442)
capital expenditure and financial
investment
Equity dividends paid
Revenue dividends paid - (152) (152)
Capital dividends paid (546) - (546)
(546) (152) (698)
Net cash inflow/(outflow) before 587 (18,799) (18,212)
financing
Financing
Issue of equity net of expenses - 19,085 19,085
Cancellation of shares (183) - (183)
Net cash (outflow)/inflow from (183) 19,085 18,902
financing
404 286 690
Increase in cash in the year
Notes to the financial statements
for the year ended 29 February 2008
The principal activity of the Company is that of a Venture Capital Trust. It has been approved by HM Revenue & Customs as a Venture
Capital Trust under Part 6 of the Income Taxes Act 2007.
1. About the Investment Manager
Close Second AIM VCT PLC is managed by Close Investments Limited. Close Investments Limited is authorised and regulated by the Financial
Services Authority and is a subsidiary of Close Brothers Group plc.
2. Accounting convention
The financial statements have been prepared under the historical cost convention, modified by the revaluation of certain investments, in
accordance with applicable law and United Kingdom Accounting Standards, and with the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies" ("SORP") issued by the Association of Investment Trust Companies ("AITC") in January 2003 and
revised in December 2005. Accounting policies have been applied consistently in the current and prior years.
3. Accounting policies
The particular accounting policies are described below:
Investments
In accordance with Financial Reporting Standard ("FRS") 26 "Financial Instruments: Measurement", equity investments, units in an
authorised UK smaller companies unit trust and debt securities are designated at fair value through profit or loss ("FVTPL").
Qualifying investments, non-qualifying AIM investments and non-qualifying listed investments are valued at closing bid prices or last
traded price at the end of the accounting period. The total column of the Income Statement represents the Company's profit and loss account.
Fair value movements on equity investments and gains and losses arising on the disposal of investments are reflected in the capital column
of the Income Statement in accordance with the AITC's SORP.
Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion
of the sale of an investment.
The Directors are conscious of the fact that because shares are traded on AIM, this does not guarantee their liquidity. The nature of
AIM investments and units in an authorised UK smaller company unit trust are such that the prices can be volatile and realisation may not
achieve current book value, especially when such a sale represents a significant proportion of that Company's market capital. Nevertheless,
on the grounds that the investments are not intended for immediate realisation, the Directors regard bid or last traded prices as the most
objective and appropriate method of valuation.
Investment income
Dividends receivable on quoted equity shares and units in an authorised UK smaller company unit trust are taken to revenue on an
ex-dividend basis. Returns on listed debt securities and cash on deposit are recognised on an accruals basis using the interest rate
applicable to the instrument or deposit at the time.
Investment management fees and other expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account except as follows;
* expenses which are incidental to the acquisition of an investment are included within the cost of the investment;
* expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment;
and
* expenses are allocated between capital and revenue where a connection with maintenance or enhancement of the value of the
investments held can be demonstrated. In respect of the Investment Manager*s fee, 75 per cent has been allocated to the realised capital
reserve and 25 per cent to revenue in the Income Statement.
Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current Tax", and is based on the return before taxation for the year.
Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred Tax", deferred
taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay
less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise
from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in
the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be
recovered.
The specific nature of taxation of venture capital trusts means that it is unlikely that any deferred tax will arise. The Directors have
considered the requirements of FRS 19 and do not believe that any provision should be made.
Reserves
The realised capital reserve contains gains and losses on the realisation of investments, capital dividends paid to shareholders and
investment management fees allocated to the capital reserve and taxation thereon. The unrealised capital reserve contains increases and
decreases in the valuation of investments held at the period end. The special reserve is distributable and is primarily used for the
cancellation of the Company's share capital. The capital redemption reserve accounts for amounts by which the issued share capital is
diminished through the repurchase of the Company's own shares.
Dividends
In accordance with FRS 21 "Events after the balance sheet date" dividends declared by the Company are accounted for in the period in
which the dividend is paid or approved by shareholders at an Annual General Meeting.
C & D shares
Until such time as the C shares are converted into Ordinary shares and the D shares are distributed in specie in 2009, all investments
and returns attributable to these classes of share will be separately identifiable from the existing Ordinary shares. All residual expenses
will be allocated on the basis of total funds raised for each class of share.
4. (Losses)/gains on investments
Year to 29 February 2008 Year to 28 February 2007
Ordinary C & D Total Ordinary C & D Total
shares Shares shares Shares
�'000 �'000 �'000 �'000 �'000 �'000
Realised gains on disposal net 258 188 446 934 18 952
of expenses
(Decrease)/increase in (1,147) (1,342) (2,489) (311) 405 94
unrealised appreciation
Total (losses)/gains for the (889) (1,154) (2,043) 623 423 1,046
year
5. Investment income
Year to 29 February 2008 Year to 28 February 2007
Ordinary C & D Total Ordinary C & D Total
shares Shares shares Shares
�'000 �'000 �'000 �'000 �'000 �'000
Dividend income 17 23 40 19 1 20
Floating rate note interest 15 653 668 15 641 656
Bank deposit interest 23 82 105 28 112 140
Management fee rebates - 16 16 - 6 6
Total income 55 774 829 62 760 822
Total income comprises
Dividends 17 39 56 19 7 26
Interest 38 735 773 43 753 796
55 774 829 62 760 822
All of the Company's income is derived from operations based in the United Kingdom.
6. Tax charge/(credit) on ordinary activities
Ordinary shares C & D shares
Year to 29 February 2008 Year to 29 February 2008
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
UK corporation tax (3) - (3) 130 - 130
Tax attributable to capital - (40) (40) - (87) (87)
expenses
(3) (40) (43) 130 (87) 43
Ordinary shares C & D shares
Year to 28 February 2007 Year to 28 February 2007
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
UK corporation tax (10) - (10) 130 - 130
Tax attributable to capital - (37) (37) - (83) (83)
expenses
(10) (37) (47) 130 (83) 47
The standard rate of tax for the year, based on the UK standard rate of corporation tax is 30 per cent (2007: 30 per cent). The actual
tax charge for the current and previous year differs from the amount resulting from applying the standard rate, for the reasons set out in
the following reconciliation.
Ordinary shares C & D shares
Year to 29 February 2008 Year to 29 February 2008
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Return/(loss) on ordinary 3 (956) (953) 544 (1,494) (950)
activities before taxation
Tax on profit/(loss) at the 1 (287) (286) 163 (448) (285)
standard rate of 30%
Factors affecting the charge
Non-taxable losses on - 267 267 - 346 346
investments
Non-taxable income (5) - (5) (12) - (12)
Marginal relief adjustment 1 (3) (2) (21) 15 (6)
Excess management expenses - (17) (17) - - -
(3) (40) (43) 130 (87) 43
Ordinary shares C & D shares
Year to 28 February 2007 Year to 28 February 2007
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
(Loss)/return on ordinary (22) 536 514 530 85 615
activities before taxation
Tax on (loss)/profit at the (7) 161 154 159 25 184
standard rate of 30%
Factors affecting the charge
Non-taxable gains on - (187) (187) - (126) (126)
investments
Non-taxable income (5) - (5) - - -
Marginal relief adjustment 2 - 2 (29) 18 (11)
Excess management expenses - (11) (11) - - -
(10) (37) (47) 130 (83) 47
* Venture Capital Trusts are not subject to corporation tax on capital gains.
* Tax relief on expenses charged to capital has been determined by allocating tax relief to all expenses proportionately by
reference to the applicable corporation tax rate of 30% (2007: 30%) and allocating the relief in accordance with the SORP.
* No deferred tax asset or liability has arisen in the year.
* The Company has not recognised a deferred tax asset on timing differenced relating to the management expenses going forward due to
the uncertainty surrounding its recovery. The amount of this unrecognised asset is �231,000 (2007: �248,000). The asset would be recovered
if the Company made sufficient taxable gains in the future to utilise these losses.
7. Dividends
Year to 29 February 2008 Year to 28 February 2007
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
- Dividends of 11.00 pence per - 844 844 - 546 546
Ordinary share
(2007: 7.00 pence) paid
August 2007 and
January 2008
- Dividends of 2.21 pence per 447 - 447 152 - 152
C & D share
(2007: 0.75 pence) paid
August 2007 and
January 2008
447 844 1,291 152 546 698
In addition to the above dividends the Board has declared the following first dividend for the year ending 28 February 2009:
- 1.00 pence per Ordinary share to be paid out of realised capital profits.
- 1.00 pence per C & D share to be paid out of revenue.
In accordance with FRS21 these dividends have not been accrued as a liability in these financial statements.
The dividends paid out of realised capital profits are subject to HM Revenue & Customs approval and the payment and record dates of the
Ordinary shares dividend will be announced on the London Stock Exchange RNS Services. The C & D shares dividend will be paid on 25 July 2008
to shareholders on the register on 27 June 2008.
8. Return per share
Year to 29 February 2008 Year to 28 February 2007
Revenue Capital Total Revenue Capital Total
Basic (pence per share)
- Ordinary shares 0.08 (11.95) (11.87) (0.15) 7.35 7.20
- C & D shares 2.05 (6.95) (4.90) 2.15 0.90 3.05
Ordinary shares
The revenue return per Ordinary share is based on the net profit on ordinary activities after taxation of �6,000 (2007: net loss of
�12,000), whilst the capital return is based on the capital loss on ordinary activities after taxation of �916,000 (2007: capital gain
�573,000). This is in respect of 7,668,121 Ordinary shares (2007: 7,804,710 shares) being the weighted average number of Ordinary shares,
excluding shares held in treasury, in issue during the year.
There are no dilutive elements and hence the basic return per share is the same as the diluted return per share.
C &D shares
The revenue return per C & D share is based on the revenue return on ordinary activities after taxation of �414,000 (2007: �400,000),
whilst the capital return is based on the capital loss on ordinary activities after taxation of �1,407,000 (2007: capital gain �168,000).
This is in respect of 20,240,793 C & D shares (2007: 18,603,604 shares) being the weighted average number of shares in issue during the
year.
There are no dilutive elements and hence the basic return per share is the same as the diluted return per share.
9. Called-up share capital
29 February 2008 28 February 2007
�'000 �'000
Authorised
36,000,000 (2007: 36,000,000) 1,800 1,800
Ordinary shares of 5p each
25,000,000 (2007: 25,000,000) 'C' 1,250 1,250
shares of 5p each
20,000,000 (2007: 20,000,000) 'D' 1,000 1,000
shares of 5p each
4,050 4,050
Allotted, called-up and fully paid
(including Treasury shares)
7,669,349 (2007: 7,764,197) 383 388
Ordinary shares of 5p each
8,214,295 (2007: 8,214,295) 'C' 411 411
shares of 5p each
12,026,498 (2007: 12,026,498) 'D' 601 601
shares of 5p each
1,395 1,400
The Company purchased for cancellation 94,848 Ordinary shares (2007: 316,555) during the year at a cost of �55,000 (2007: �176,000).
This represented approximately 1.22 per cent of the issued Ordinary share capital as at 28 February 2007.
During the year the Company also purchased 113,656 Ordinary shares (2007: nil) at a cost of �44,000 to be held in Treasury. This
represented approximately 1.46 per cent of the issued Ordinary share capital at 28 February 2007.
The assets of C shares and D shares are managed as a separate pool from the Ordinary shares.
* On or around 30 May 2009, the D share assets and liabilities will be separated from those of the other share classes. At this
point, D shareholders can elect to convert to C shares. Following approval of the Distribution in specie at a general meeting, the assets
will be substantially invested in AIM stocks and will then be distributed in specie to the remaining D shareholders.
* On or around 12 June 2009, the C shares will convert to Ordinary shares on the basis of the respective net assets of each of these
two share classes; and
The right of members to receive dividends is derived from the net income attributable to the net assets of each class of share.
On a winding up, prior to the conversion, the holders of the C and D shares will be entitled to the capital and assets attributable to
the C shares and D shares and shall rank pari passu in their entitlements and the holders of the Ordinary shares shall be entitled to the
capital and assets attributable to the Ordinary shares.
10. Net asset value per share
Ordinary shares
Net asset value per share is based on net assets attributable to Ordinary shareholders of �3,036,000 (2007: �4,889,000) and on 7,555,693
(2007: 7,764,197) Ordinary shares in issue, excluding shares held in Treasury, at the year end.
C & D shares
Net asset value per share is based on net assets attributable to C & D shareholders of �18,065,000 (2007: �19,505,000) and 20,240,793
(2007: 20,240,793) C & D shares in issue at the year end.
11. Reconciliation of cash (outflow)/inflow from operating activities
29 February 2008 28 February 2007
Ordinary C & D Ordinary C & D
shares Share shares Shares
s
�'000 �'000 �'000 �'000
Net revenue gain/(loss)before finance 3 544 (22) 530
costs and taxation
Investment management fee charged to (67) (340) (87) (338)
capital
Decrease/ (increase) in operating 50 44 (2) (130)
debtors
Increase/ (decrease) in operating 5 (17) (64) 41
creditors
Net cash (outflow)/inflow from (9) 231 (175) 103
operating activities
12. Transactions with related parties and the investment manager
Elizabeth Kennedy is a director of Brewin Dolphin Limited, the Company's brokers. Subject to this exception, no Director was a party to,
or had an interest in, any contract or arrangement with the Company at any time during the year under review or as at the date of this
report. During the year, Directors' fees of �4,000 were paid to Brewin Dolphin Limited. At the financial year end, the amount due to Brewin
Dolphin Limited disclosed as creditors was nil.
Close Investments Limited, as Investment Manager of the Company is considered to be a related party by virtue of its management contract
with the Company. During the year services with a total value of �542,000 were purchased by the Company from Close Investments Limited. At
the financial year end, the amount due to Close Investments Limited disclosed under creditors was �40,000.
As at 29 February 2008, the Company held an investment in the C & D share portfolio in Close Special Situations Fund, a unit trust which
is also managed by Close Investments Limited a subsidiary of close Brothers Group plc, the ultimate parent company of the Investment
Manager. This investment was valued at �1,057,000 as at 29 February 2008 (cost �1,000,000).
Buybacks of shares for cancellation during the year were transacted through Winterflood Securities Limited, a subsidiary of Close
Brothers Group plc, the ultimate parent company of the Investment Manager, Close Investments Limited. A total of 94,848 Ordinary Shares were
purchased at a cost of �54,768. The average price paid was 58 pence per Ordinary share.
Buybacks of shares to be held in Treasury were also transacted through Winterflood Securities Limited. A total of 46,656 Ordinary shares
were purchased at a cost of �19,597. The average price paid was 42 pence per Ordinary share.
13. Post balance sheet events
Since 29 February 2008 the Company has completed the following investments:
* Invested �2,000 in Pressure Technologies (C & D share portfolio)
* Invested �902,000 in Maelor (C & D share portfolio)
* Invested �571,000 in essentially Group (C & D share portfolio)
Since 29 February 2008 the Company has completed the following disposals:
* Freedom4 Communications for proceeds of �67,000 (Ordinary share portfolio)
* Close Situations Fund for proceeds of �109,000 (C & D share portfolio)
On 13 May 2008, Hatpin PLC announced that the company had gone into administration. The cost of this investment (held by the C & D
shares) is �246,000 and the Directors consider that the investment is unlikely to have any value.
14. Financial Information
The financial information set out above does not constitute the Company's statutory accounts for the years ended 29 February 2008 or 28
February 2007, but is derived from those accounts. Statutory accounts for 2007 have been delivered to the Registrar of Companies and those
for 2008 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were
unqualified, did not draw attention to any matters by way of emphasis without qualifying their reports and did not contain statements under
s237(2) or (3) of the Companies Act 1985.
15. Publication
The full Report and Financial Statements is being sent to shareholders and copies will be made available electronically at
www.closeventures.co.uk. The full Report and Financial Statements will also be made available to the public at the registered office of the
Company, Companies House and via the FSA viewing facility.
For further information, please contact:
Andrew Buchanan / Kate Tidbury Karen Wagg
Close Investments Limited Polhill Communications
Tel: 020 7426 4000 020 7655 0540
This information is provided by RNS
The company news service from the London Stock Exchange
END
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