24 November 2009, 16:48
Private Equity Inv: Half-yearly Report - Part 1
<pre>
PRIVATE EQUITY INVESTOR PLC
HALF-YEARLY REPORT 30 SEPTEMBER 2009
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company was launched in February 2000 and provides both private and
institutional investors with a means to participate in specialised venture
capital funds in the USA, a category of funds that is not otherwise accessible
to many investors. The Company's objective is to achieve substantial capital
appreciation for shareholders over its intended life.
Investment Policy
Risk Diversification
The Company has invested in high quality venture capital funds, managed by
several different management groups, focused on various stages of growth from
early stage to pre-IPO, so as to obtain exposure to a diversified underlying
portfolio of investments in unlisted companies in the IT and other technology
sectors. Such funds have been selected with regard to the experience and track
record of the managers, their investment strategy and the strength and quality
of their deal flow.
As an Investment Trust, it is the Company's policy that no single investment
will represent more than 15% by value of the Company's investments at the time
of investment.
The Company's policy is that it will invest no more than 15% of its gross
assets in other closed-end listed investment companies (including investment
trusts). The Company currently has made no such investments and the Directors
do not envisage circumstances in which it is likely to do so.
Asset Allocation
The Company's investments are in funds based in the USA ("the Funds"). The
Managers of the Funds invest principally in the USA and in unlisted companies.
As a result of the flotation or sale of their investments, the Funds may hold
listed securities and these may be distributed to the Company so that the
Company may from time to time hold listed securities which, however, are
unlikely to represent a significant part of the Company's investments.
The Company continues to invest in the Funds to meet existing commitments but
is not making commitments to new investments. The Company proposes to make
periodic returns of capital to shareholders from the return cash flows from the
Funds.
Gearing
In normal circumstances the Company does not expect to borrow. The Company's
Articles of Association limit borrowing to an amount broadly equal to its
capital and reserves. Some investments made by the Funds may be geared but the
Company does not review the level of gearing of these underlying investments.
Liquidity
Because of distributions from the Funds, the Company may hold substantial
balances of liquid funds. These are held principally in open-ended investment
funds pending investment in the Funds or distribution to shareholders.
Derivatives
The Company does not make use of financial derivatives and does not hedge
against currency fluctuations.
Distributions
The Funds provide little income. Income may be generated from liquid funds and
the Company may be required to pay dividends to continue to qualify as an
Investment Trust. Such dividends are, however, likely to be small and
irregular. In 2007, the Company made a Tender Offer to shareholders with a
value of up to £12.5 million, which was fully taken up. After receiving
shareholder and court approval to cancel the Company's Share Premium Account in
November 2008 a special reserve, which is distributable, was created and the
Company made a further tender offer, of up to £17.5 million, in December 2008,
which was also fully taken up.
Benchmark
NASDAQ Composite Index.
Continuation Vote
Shareholders will have the opportunity to vote at the Annual General Meeting in
2014 whether to continue the Company and at five yearly intervals thereafter.
Management
The Company is self-managed. The Company has appointed Campton Group, Inc.
("Campton"), which is based in San Francisco, as its investment advisor. The
Company has previously provided Campton with finance with a view to developing
Campton's private equity fund-of-funds management and advisory business.
Campton
As reported previously, Campton advises the Company on its existing portfolio
and has been developing a fund-of-funds management and advisory business.
Campton's efforts to develop its business have been hindered as a result of the
global financial crisis. While Campton continues its efforts, the Company and
Campton are also exploring strategic alternatives for Campton's business.
SUMMARY OF RESULTS AND FINANCIAL HIGHLIGHTS
30 September 2009 31 March % change
2009
Group Group
Net assets and shareholders' funds $110,387,000 $107,101,000 3.07
in US$
Net assets per ordinary share in 315.81c 306.41c 3.07
US$ "NAV"
Net assets and shareholders' funds £69,020,000 £74,721,000 (7.63)
Net assets per ordinary share 197.46p 213.77p (7.63)
"NAV"
Benchmark - NASDAQ Composite Index 2,122.42 1,528.59 38.85
Mid-market price per ordinary 129.50p 110.50p 17.19
share
Discount to NAV 34.42% 48.31%
Net revenue (loss)/return after £(555,000) £(466,000)
taxation
Net total return £(5,723,000) £15,803,000
Total return per ordinary share (16.37)p 39.04p
Total expense ratio 1.65% 1.43%
Exchange rate - US$/£ $1.5994 $1.4334
Number of ordinary shares in issue 34,953,675 34,953,675
Chairman's Statement
I am pleased to present the unaudited interim results for Private Equity
Investor PLC ("PEI" or "the Company") for the six months ended 30 September
2009.
Results and Dividend
At the period end, the Company's Net Asset Value ("NAV") was 197.46 pence per
share compared with 213.77 pence per share at 31 March 2009. PEI's principal
assets are denominated in dollars and this 7.63% decrease in NAV largely
resulted from a weakening of the dollar, which fell by 11.89% against sterling
from $1.43 at 1 April 2009 to $1.60 at 30 September 2009.
In dollar terms the Company's NAV increased by 3.07% from 306.41 cents per
share to 315.81 cents per share. The discount narrowed from 48.31% to 34.42%
and the Company's share price increased by 17.19% during the period, from
110.50 pence to 129.50 pence.
No dividend is proposed for the period.
Portfolio Review
At 30 September 2009 the Company was invested in 23 US venture funds with a
value of $86.71 million. PEI's cash and readily realisable assets totalled
$23.22 million, compared with outstanding commitments of $15.11 million. In the
six month period, drawdowns relating to the Company's capital commitments to
its Limited Partnership investments were $960,000.
Distributions received in the period from PEI's Limited Partnerships were $3.80
million compared with $1.61 million in the six months to March 2009 and $3.64
million for the equivalent period to 30 September 2008. Cash distributions
accounted for $1.46 million and stock for $2.34 million. The largest amount of
cash came from Focus Ventures II. PEI received approximately $750k from the
sale by Focus of part of its holding in Cisco - acquired when Cisco bought Pure
Digital in May 2009. A final distribution of $1.1 million, received from the
sale of Data Domain shares held by NEA 10, was the largest stock distribution
received during the period. Both distributions provided a significant return to
PEI.
During the period under review none of the underlying portfolio companies
undertook IPO's.
Campton Group, Inc.
As reported previously, Campton advises the Company on its existing portfolio
and has been developing a fund-of-funds management and advisory business.
Campton's efforts to develop its business have been hindered as a result of the
global financial crisis but it continues with these efforts.
Outlook
Whilst concerns continue about the longer term impact of the recession, there
are some early signs of recovery that are encouraging for the US venture
capital industry. In particular, the IPO market has recently reopened and
September's $380 million IPO of A123 Systems (a cleantech battery systems
company) was the largest venture-backed IPO since March 2007. There were eight
venture-backed IPOs during the first nine months of this year, already beating
the full-year total of six IPOs in 2008 and at the end of September 2009, all
but one of these was trading above its offer price. The number of
venture-backed companies in IPO registration remains low at 18 (compared with
38 at the same time last year) but it has been reported that many companies are
preparing to file registration statements in the near future.
The M&A market statistics for the second and third quarters of 2009 are not
quite as encouraging, with a total of 126 transactions reported for the second
and third quarters of 2009, compared with 172 for the same period in 2008.
We expect that IPO and M&A activity will remain at current levels in the
short-term and that, in this environment, there will not be a major change in
the pace of the Company's receipt of distributions. However, we are encouraged
by the quality of many of PEI's underlying portfolio companies and believe that
further, significant value will be released as markets improve.
The Company expects to continue to buy back shares or make distributions when
cash balances reach appropriate levels as a result of distributions from the
portfolio. The Board also continues to seek to maximise the value for its
investment portfolio and reviews proposals as they arise from time to time. The
Company has received indicative non binding offers for its investment portfolio
but at levels which in aggregate would not realise cash equivalent to the
current market price of its listed shares. An announcement will be made at the
appropriate time if the Board determines to take any such proposals forward.
PETER F.DICKS
Chairman
24 November 2009
INTERIM MANAGEMENT REPORT
The important events that have occurred during the period under review are set
out in the Chairman's Statement. The key factors influencing the financial
statements are also set out in the Chairman's Statement.
The principal risks and uncertainties for the remaining six months of the
financial year are reviewed in the Outlook section of the Chairman's Statement.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
# the condensed set of financial statements contained within the Half-Yearly
Report has been prepared in accordance with applicable accounting standards in
the United Kingdom, and give a true and fair view of the assets, liabilities,
financial position and profit of the Company as required by the Disclosure and
Transparency Rules ("DTR") 4.2.4R;
# the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
the important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
This Half-Yearly Report was approved by the Board of Directors on 24 November
2009 and the above responsibility statement was signed on its behalf by Peter
F. Dicks, Chairman.
CONSOLIDATED INCOME STATEMENT(UNAUDITED)
for the six months to 30 September 2009
2009 2008
Revenue Capital Revenue Capital
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on - (4,525) (4,525) - 5,783 5,783
investments at fair value
through profit and loss
Exchange (losses)/gains on - (643) (643) - 159 159
other items
- (5,168) (5,168) - 5,942 5,942
Operating income
Investment income 14 - 14 417 - 417
Other operating income 2 - 2 (10) - (10)
Total operating income 16 - 16 407 - 407
Operating expenses
Administrative expenses (571) - (571) (455) - (455)
Total expenses (571) - (571) (455) - (455)
Operating (loss)/profit (555) (5,168) (5,723) (48) 5,942 5,894
(Loss)/profit before tax (555) (5,168) (5,723) (48) 5,942 5,894
Tax - - - - - -
(Loss)/profit for the (555) (5,168) (5,723) (48) 5,942 5,894
period
Attributable to:
Equity holders of the (555) (5,168) (5,723) (48) 5,942 5,894
parent
Minority interest - - - - - -
Earning per share
From continuing activities
Basic (1.59)p (14.78)p (16.37)p (0.11)p 13.91p 13.80p
The total column of this statement represents the Group's income statement,
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance published by the Association of
Investment Companies. All items in the above statement derive from continuing
operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
for the six months to 30 September 2009
Share Capital Currency
Share premium Special redemption Capital translation Retained
capital account reserve reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months to 30
September 2009
As at 1 April 3 - 79,072 2 (3,848) (13) (495) 74,721
2009
Group (loss)/ - - - - (5,168) 22 (555) (5,701)
profit for the
period
Dividends paid - - - - - - - -
As at 30 3 - 79,072 2 (9,016) 9 (1,050) 69,020
September 2009
Six months to 30
September 2008
As at 1 April 4 96,862 1 (20,117) 9 441 77,200
2008
Group profit/ - - - 5,942 (16) (48) 5,878
(loss) for the
period
Dividends paid - - - - - (470) (470)
As at 30 4 96,862 1 (14,175) (7) (77) 82,608
September 2008
Year ended 31 March 2009
As at 1 April 4 96,862 - 1 (20,117) 9 441 77,200
2008
Group profit/ - - - - 16,269 (22) (466) 15,781
(loss) for the
year
Dividends paid - - - - - - (470) (470)
Transfer Between - (96,862) 96,862 - - - - -
Reserves*
Tender offer* (1) - (17,790) 1 - - - (17,790)
As at 31 March 3 - 79,072 2 (3,848) (13) (495) 74,721
2009
* After receiving shareholder and court approval to cancel the Company's Share
Premium Account in November 2008 a Special Reserve, which is distributable, was
created and the Company made a tender offer, of up to £17.5 million, in
December 2008, which was fully taken up.
COMPANY STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
for the six months to 30 September 2009
Share Capital
Share premium Special redemption Capital Retained
capital account Reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months to 30 September
2009
As at 1 April 2009 3 - 79,072 2 (3,848) (251) 74,978
Loss for the - - - - (5,168) (651) (5,819)
period
Dividends paid - - - - - - -
As at 30 September 3 - 79,072 2 (9,016) (902) 69,159
2009
Six months to 30 September
2008
As at 1 April 2008 4 96,862 - 1 (20,117) 586 77,336
Profit/(loss) for - - - - 5,942 (173) 5,769
the period
Dividends paid - - - - - (470) (470)
As at 30 September 4 96,862 1 (14,175) (57) 82,635
2008
Year ended 31 March 2009
As at 1 April 2008 4 96,862 - 1 (20,117) 586 77,336
Profit/(loss) for - - - - 16,269 (367) 15,902
the year
Dividends paid - - - - - (470) (470)
Transfer between - (96,862) 96,862 - - - -
reserves*
Tender offer* (1) - (17,790) 1 - - (17,790)
As at 31 March 3 - 79,072 2 (3,848) (251) 74,978
2009
* After receiving shareholder and court approval to cancel the Company's Share
Premium Account in November 2008 a Special Reserve, which is distributable, was
created and the Company made a tender offer, of up to £17.5 million, in
December 2008, which was fully taken up.
SUMMARISED CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at As at As at
30 September 31 March 2009 30 September
2009 2008
£'000 £'000 £'000
Non-current assets
Investments at fair value 63,492 67,762 81,465
through profit or loss
Property, plant and 5 6 5
equipment
Net current assets 5,523 6,953 1,138
Net assets 69,020 74,721 82,608
Capital and reserves
Share capital 3 3 4
Share premium account * - - 96,862
Special Reserve 79,072 79,072 -
Capital redemption reserve 2 2 1
Capital reserve (9,016) (3,848) (14,175)
Currency translation 9 (13) (7)
reserve
Retained earnings (1,050) (495) (77)
Shareholders' funds 69,020 74,721 82,608
Minority Interest - - -
Total equity 69,020 74,721 82,608
Net asset value per 197.46p 213.77p 193.36p
ordinary share
("Shareholders' funds")
* The Share Premium Account was converted to a Special Reserve on 29 October
2008 following court approval.
SUMMARISED COMPANY BALANCE SHEET (UNAUDITED)
As at As at As at
30 September 31 March 2009 30 September
2009 2008
£'000 £'000 £'000
Non-current assets
Investments at fair value 63,492 67,762 81,465
through profit or loss
Investment in subsidiary 444 495 253
undertaking
Net current assets 5,223 6,721 917
Net assets 69,159 74,978 82,635
Capital and reserves
Share capital 3 3 4
Share premium account * - - 96,862
Share Reserve 79,072 79,072 -
Capital redemption reserve 2 2 1
Capital reserve (9,016) (3,848) (14,175)
Retained earnings (902) (251) (57)
Total equity 69,159 74,978 82,635
Net asset value per 197.86p 214.51p 193.42p
ordinary share
* The Share Premium Account was converted to a Special Reserve on 29 October
2008 following court approval.
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
for the six months to 30 September 2009
As at As at
30 September 30 September
2009 2008
Notes £'000 £'000
Cash flows from operating activities
Consolidated net (loss)/return before tax (5,723) 5,894
Adjustments to reconcile net return before
tax to net cash flows from operating
activities:
Losses/(gains) on investments 5,168 (5,942)
Exchange (losses)/gains (40) 68
Increase/(decrease) in trade and other 31 (65)
payables
Decrease in trade and other receivables 4 55
Purchases of investments (2,657) (9,499)
Sales of investments 2,402 6,351
Net cash flows used in operating (815) (3,138)
activities
Net cash used in financing activities (19) (470)
Net decrease in cash and cash equivalents (834) (3,608)
Cash and cash equivalents at beginning of 7,035 4,611
period
Effect of foreign exchange rates on cash (580) 72
and cash equivalents
Cash and cash equivalents at end of period 3 5,621 1,075
SUMMARISED COMPANY CASH FLOW STATEMENT (UNAUDITED)
for the six months to 30 September 2009
As at As at
30 September 30 September
2009 2008
Notes £'000 £'000
Cash flows from operating activities
Company net (loss)/return before tax (5,819) 5,768
Adjustments to reconcile net return before
tax to net cash flows from operating
activities:
Losses/(gains) on investments 5,168 (5,942)
Exchange (losses)/gains (40) 59
Increase/(decrease) in trade and other 31 (22)
payables
(Increase)/decrease in trade and other (3) 37
receivables
Purchases of investments (2,657) (9,499)
Sales of investments 2,402 6,351
Net cash flows used in operating (918) (3,248)
activities
Net cash used in financing activities (19) (470)
Net decrease in cash and cash equivalents (937) (3,718)
Cash and cash equivalents at beginning of 6,774 4,527
period
Effect of foreign exchange rates on cash (551) 72
and cash equivalents
Cash and cash equivalents at end of period 3 5,286 881
INVESTMENT PORTFOLIO
as at 30 September 2009
Total Fair Fair Net
Commitment Value Value Assets
US$'000 US$'000 £'000 2009
Unquoted Venture Capital Funds
APV Technology Partners III 5,000 405 253 0.4
Bay III 5,000 133 83 0.1
Crescendo IV 10,000 4,071 2,545 3.7
Dawntreader Fund II 30,000 12,775 7,988 11.6
Draper Fisher Jurvetson ePlanet 30,000 12,008 7,508 10.9
Ventures
Draper Fisher Jurvetson Fund VI 2,000 1,378 861 1.2
Draper Fisher Jurvetson Fund VII 5,000 3,494 2,185 3.2
Draper Fisher Jurvetson Gotham 3,000 2,006 1,255 1.8
Venture Fund
Focus Ventures II 30,000 9,660 6,040 8.8
Francisco Partners II 5,000 2,977 1,861 2.7
Institutional Venture Partners XII 5,000 2,094 1,309 1.9
New Enterprise Associates 9 5,000 1,339 837 1.2
New Enterprise Associates 10 10,000 3,926 2,455 3.6
New Enterprise Associates 12 3,000 1,799 1,125 1.6
Oak Investment Partners X 10,000 6,130 3,833 5.6
Sprout Capital IX 3,750 1,582 989 1.4
Technology Crossover Ventures IV 25,000 8,879 5,552 8.0
Vanguard VII 3,000 896 560 0.8
VantagePoint Venture Partners IV 10,000 7.541 4,715 6.8
VantagePoint Venture Partners 2006 5,000 1,440 901 1.3
Fund
Vector Capital IV 4,000 639 400 0.6
Zone Ventures II 10,000 1,427 892 1.3
Zone Ventures II Annex 400 114 71 0.1
Total Unquoted Venture Capital 219,150 86,713 54,218 78.6
Funds
Open-ended Investment Funds
Global Treasury Funds Plc - GBP - 3,231 2,020 2.9
Fund
JP Morgan USD Liquidity - 5,500 3,439 5.0
Distribution Fund
Merrill Lynch Institutional USD - 5,500 3,439 5.0
Fund
Total Open-ended Investment Funds - 14,231 8,898 12.9
Other Investments held directly by the Company
Common Stock*
Artemis International Solutions - - - 0.0
Broadcom Corporation Class A - 18 11 0.0
Divx Inc - 583 365 0.5
Total other investments - 601 376 0.5
Total investments 219,150 101,545 63,492 92.0
Other non-current assets 8 5 0.0
Net current assets 8,834 5,523 8.0
Net assets 110,387 69,020 100.0
* These were acquired as distributions from the portfolio of Venture Capital
Funds
NOTES TO THE FINANCIAL STATEMENTS
at 30 September 2009
1. FINANCIAL INFORMATION
The financial information contained in this report does not constitute full
statutory accounts as defined in section 434 of the Companies Act 2006.The
comparative financial information for the year ended 31 March 2009 does not
constitute full statutory accounts as defined in section 240 of the Companies
Act 1985. The financial information for the six months ended 30 September 2009
and 30 September 2008 has not been audited nor reviewed by the Company's
Auditor pursuant to the Auditing Practices Board guidance on such reviews.
The information for the year ended 31 March 2009 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies. The report of the Auditor on those financial statements
contained no qualification or statement under sections 237 (2) or (3) of the
Companies Act 1985.
Basis of Accounting
The consolidated annual financial statements of the Group have been prepared
under International Financial Reporting Standards ("IFRS"), which comprise
standards and interpretations approved by the International Accounting
Standards Board ("IASB"). The annual financial statements of the Company have
been prepared in accordance with IFRS as adopted by the European Union, and as
applied in accordance with provisions of the Companies Act 2006. The financial
statements have also been prepared in accordance with the Statement of
Recommended Practice ("SORP") 2009 for investment trust companies except to any
extent where it conflicts with IFRS.
The accounting policies which follow, set out those policies which apply in
preparing the financial statements for the year ended 31 March 2009. There are
no differences between the accounting policies applied to the Group and the
Company.
The Group and Company financial statements are presented in Sterling and all
values are rounded to the nearest thousand pounds (£'000) except when indicated
otherwise.
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its principal subsidiary Campton Group, Inc.
Campton Group, Inc. is consolidated from the date of its acquisition, being the
date on which the Company obtained control, and will continue to be
consolidated until the date that such control ceases. Control comprises the
power to govern the financial and operating policies of the investee so as to
obtain benefit from its activities and is achieved through direct or indirect
ownership of voting rights. The Company currently has an investment of £444,000
in Campton Group, Inc. by way of a secured promissory note agreement and a
secured convertible promissory note agreement. If the Company were to exercise
its conversion rights then it would hold a majority stake in Campton Group,
Inc. As the convertible loan notes are convertible at any time, PEI has the
power to exercise control over Campton. Therefore in preparing the financial
statements, the Company has treated its investment in Campton Group, Inc. as a
subsidiary and produced consolidated financial statements.
Private Equity International Limited is incorporated with share capital of £1
issued and fully paid. It was incorporated to register the business name of
Private Equity International. It has not traded during the year and has not
been consolidated as it is, in the Directors' opinion, immaterial to the
accounts.
The interest of minority holdings is stated at the minority's proportion of the
fair values of the assets and liabilities recognised. Minority interests
represent the portion of profit or loss and net assets in subsidiaries that is
not held by the Group and are presented separately in the income statement and
within equity in the consolidated balance sheet, separately from parent
shareholders' equity. However, any losses applicable to the minority interest
in excess of the minority interest are allocated against the interests of the
parent.
The financial statements of the subsidiary are prepared for the same reporting
year as the Parent Company, using consistent accounting policies. All
intercompany balances and transactions, including unrealised profits arising
from them, are eliminated.
As permitted by Section 408 of the Companies Act 2006, the Company has not
presented its own income statement. The amount of the Company's return for the
period to 30 September 2009 dealt within in the accounts of the Group is a loss
of £5,819,000 (2009: Gain £5,769,000).
New standards and interpretations
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009.
IFRS 7 (amendment), `Financial instruments: Disclosures'. The amendments
introduce a three-level fair value disclosure hierarchy that distinguishes fair
value measurements by the significance of the inputs used. These disclosures
are expected to provide more information about the relative reliability of fair
value measurements and increase convergence of IFRSs and US Generally Accepted
Accounting Principles (GAAP).
The amendments also reinforce the principles of IFRS 7 to ensure that
information disclosed enables users to evaluate the nature and extent of
liquidity risk arising from financial instruments and how the entity manages
this risk. This amendment is mandatory for the first time for the financial
year beginning 1 January 2009, but is not currently relevant for the Group.
The Directors do not anticipate that the initial adoption of the above standard
will have a material impact on the Group's financial statement in the period of
initial application.
2. TAXATION ON ORDINARY ACTIVITIES
The tax charge for the half-year is nil (30 September 2008: nil; 31 March 2009:
nil) based on an estimated effective tax rate of 0% for the year ending 31
March 2009. The estimated effective tax rate is 0% as investment gains are
exempt from Capital Gains Tax owing to the Company's status as an Investment
Trust. There is expected to be an excess of management expenses over taxable
income and therefore there is no liability to Corporation Tax during the
half-year to 30 September 2009 (30 September 2008: nil; 31 March 2009: nil).
3. RECONCILIATION OF NET CASH FLOW TO NET FUNDS
2009 2008
Group Company Group Company
£'000 £'000 £'000 £'000
Decrease in cash in the period (834) (937) (3,608) (3,718)
Effect of foreign exchange rate (580) (551) 72 72
movements
Movement in cash and cash (1,414) (1,488) (3,536) (3,646)
equivalents
Cash and cash equivalents at 7,035 6,774 4,611 4,527
beginning of the period
Cash and cash equivalents at 5,621 5,286 1,075 881
the end of the period
4. RECONCILIATION OF NET CASH FLOW TO NET FUNDS- CONTINUED
Cash and cash equivalents are comprised as follows:
2009 2008
Group Company Group Company
£'000 £'000 £'000 £'000
Cash at bank 5,621 5,286 1,075 881
5. COMMITMENTS AND CONTINGENT LIABILITIES
At 30 September 2009 there were financial commitments outstanding of $15.1
million (£9.5 million) (2008: $19.9 million (£11.2 million)) in respect of
outstanding call commitments to limited partnerships.
6. RELATED PARTIES
There have been no related party transactions in the period to 30 September
2009, other than the transactions between the Company and its subsidiary,
Campton Group, Inc. which acts as an investment advisor for the Company. Fees
amounting to £348,000 have been charged to the Company by its subsidiary during
the period to 30 September 2009 (2008: £360,000).
7. ACCOUNTING POLICIES
The financial statements are prepared on the basis of the accounting policies
set out in note 1 of the annual
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