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Sgr & Frdlndr AIM 3 (VICT)

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Friday 13 May, 2005

Sgr & Frdlndr AIM 3

Final Results

Singer & Friedlander AIM 3 VCT PLC
13 May 2005

Singer & Friedlander AIM 3 VCT plc

Preliminary Announcement for the year ended 31st January 2005

Performance Summary

Total net assets of £32,597,204 (2004: £31,372,256)

Net asset value per share 103.41p (2004: 95.38p)

Net dividends of £157,154 for the year (2004: £82,227)

Dividend per ordinary share 0.50 pence (2004: 0.25 pence)

Qualifying investments 82% of the current investment portfolio (2004: 77%)

Total dividends paid and recommended to date: 3.25p

Board Review of the Year

The Board is pleased to present its annual report for the year to 31 January


Following a somewhat dull first half the Alternative Investment Market (AIM)
regained momentum during the second half of the year. The AIM index increased by
some 21% over the year. It should, however, be noted that the oil exploration
and extractive industries sectors, in which VCTs are not allowed to invest, were
the main contributors to this strong performance. These sectors account for
approximately a third of the AIM's market capitalisation and without their
influence the AIM Index would have delivered a far lower return. Our Net Asset
Value (NAV) increased by 12% during the second half and by 8% over the year to
103.41p per share. We believe this was a creditable performance. Since our
launch in early 2001 the AIM index has declined by 21% and the FTSE All Share
index is 15% lower whilst our asset value has increased by 6%.

Dividends and returns to date

Dividends of 2.75 pence have been paid to date. The Directors are recommending a
final dividend of 0.50p for the year ended 31st January 2005.

Portfolio commentary and developments

We have maintained our VCT qualifying status throughout the year and under the
Inland Revenue's definition the qualifying percentage at the year end was 82%.
The portfolio now consists of 52 qualifying investments, 3 of which are
unquoted, 1 is traded on OFEX and the remainder are quoted on the AIM. During
the year two companies (Aquilo and Music Copyright Solutions) moved from OFEX to
AIM. XN Checkout, which was unquoted gained a listing on AIM resulting in an
uplift over book cost of over 220% at the year end. ITS Ecco, another unquoted
investment, received an offer from a trade buyer and was sold at a premium of
approximately 10% to our book cost with the potential for further proceeds to
follow. We have actively taken profits on our listed portfolio during the year
and to date have realised profits of some £1.75 million or 5.6 pence per share.
These profits can be distributed tax free to shareholders, and, as set out in
our original prospectus, the Directors are committed to doing so. We are
currently considering revoking our investment trust company status (a simple,
legal procedure) to enable capital distributions.

Most of our individual investments are now valued above book cost and we expect
many to commence dividend payments in the next year or so as their businesses
continue to develop. Recent newsflow has, in most cases, been positive and the
economic background continues to remain benign.

Investment Strategy

The objective of the Company is to provide investors with an attractive return
from a portfolio of investments primarily in companies whose shares are traded
on AIM. Returns will be enhanced as a consequence of dividends and capital gains
being free of tax in the hands of private investors.

Running Costs

The running costs of the Company stood at 2.80% during the year, a figure which
compares favourably to many of our competitors.

Share Repurchases

During the year we repurchased 1,370,000 shares for cancellation at a discount
of approximately 15% to NAV. It is our intention to continue to buy back shares
within the powers granted at the AGM each year, in order to aid liquidity for
shareholders who wish to sell.

The Board

During the year David Lloyd resigned from the Board due to an increase in his
other business commitments. We would  like to place on record our thanks to
David for his important contribution during the first 3 years of the Trust's
We welcome to the Board two new Non-Executive Directors. David Page and Dominic
Wheatley who joined on 1st August 2004.

Offer for Subscription to 'C' Shares

As previously notified to shareholders, we published a prospectus last September
seeking to raise an additional £30 million. The offer is now closed. The
response from potential investors has been disappointing primarily due to the
amount of competition from other VCT's also seeking to raise funds.


In spite of the significant recovery in AIM over the last 2 years the AIM Index
remains over 60% below the peak levels achieved in early 2000. Valuations do not
appear excessive and are underpinned by positive newsflow and the improving
prospects for many companies. Your Fund Manager believes that significant
potential exists for further share price appreciation although, as in the past,
progress may not be smooth. Your Board faces the future with confidence.

Christopher Moorsom (Chairman)

Andrew Banks

Michael Edelson

Mark Ellisdon

David Page

Dominic Wheatley

Investment Portfolio Summary

AIM Quoted Companies   Sector                 Nature of business              Cost at  Valuation      %age   Percentage
                                                                          acquisition         at        of   of company
                                                                                             31st  portfolio   managed  
                                                                                          January                by
                                                                                             2005            Investment
                                                                                    £          £         %          %
     1st Dental        Health                 Dental laboratories group        450,000    641,333      1.97       4.13
     Aero Inventory    Aerospace & defence    Distribution of aircraft         481,041    751,088      2.30       8.44
     Aquilo            Speciality & other     Accident management services     589,375    314,953      0.97      17.31
     Asfare Group      Engineering &          Manufacturer of ladders for      321,393    318,179      0.98      14.88
                       machinery              rescue services
     Award             Media & entertainment  Provider of promotional goods    209,990    110,245      0.34      16.92
     International                            and services to enhance brand
     Holdings                                 awareness
     BBI Holdings      Pharmaceuticals &      Developer and manufacturer of    239,708    323,861      0.99       3.91
                       biotechnology          rapid result diagnostic tests
     Blooms of         General retailers      Garden centres                   470,000    359,473      1.10       7.21
     Bright Things     Household goods &      Developer of intellectual        375,000    739,584      2.27       2.78
                       textiles               property for a new educational
                                              games platform
     Camaxys Group     Software & computer    Developer of computerised        254,825    246,862      0.76      18.33
                       services               management systems for health &
                                              safety applications
     Capcon Holdings   Speciality & other     Audit, stocktaking and           700,000    426,563      1.31      11.50
                       finance                commercial investigation
     Cardpoint         Speciality & other     Independent ATM deployer         380,843  1,058,640      3.24       2.17
     Centurion         Automobiles & parts    Conception, design, marketing &  187,950    617,103      1.89       2.66
     Electronics                              distribution of in-car
                                              audio-visual products
     CMS Webview       Media & entertainment  Real-time market data            401,674     70,293      0.21       6.36
                                              collection, processing and
     Corpora           Software & computer    Research, development & sale of  527,206    439,601      1.35      11.41
                       services               knowledge discovery
     Fulcrum Pharma    Pharmaceuticals &      Customised global drug           279,532    103,305      0.32       2.52
                       biotechnology          development solutions
     Glisten           Food producers &       Manufacturer of confectionery    307,143  1,080,760      3.32       5.47
                       processors             products
     Huveaux           Media & entertainment  Aims to build a broadly based    813,049  1,487,281      4.56       5.23
                                              media and related services
                                              group by means of acquisition
     ILX Group         Support services       Leading provider of Project      324,960    536,184      1.64       6.03  
                                              Management, IT, and Business
                                              Finance Training
     Imprint Search &  Support services       Recruitment services             400,000    882,500      2.71       3.41
     Knowledge         Media & entertainment  Live UK financial news and data  127,362    318,405      0.98       6.15
     Technology                               products

     Kuju              Software & computer    Developer of interactive games   549,999    293,750      0.90      11.37
                       services               software
     Lloyds British    Support services       Provision of lifting equipment   362,400    207,717      0.64       6.12
     Testing                                  testing services
     Lo-Q              Leisure & hotels       Theme park guest services        760,000     28,500      0.09       5.79
     Matrix            Software & computer    Delivering customer focused IT   310,000    730,221      2.24       0.99
     Communications    services               solutions

     Medal             Media & entertainment  Creation & exploitation of       602,509  1,233,617      3.78       9.12
     Entertainment                            intellectual property rights
     & Media                                  through acquisition
     Mediwatch         Health                 Design, manufacturing and        693,515    548,558      1.68      11.08
                                              marketing of medical diagnostic
     Monstermob Group  Media & entertainment  UK mobile phone entertainment    141,750    257,250      0.79       0.42
                                              content provider
     Music Copyright   Media & entertainment  Exploitation of music            375,000    270,221      0.83       7.79
     Solutions                                catalogues and royalty
     NWD Group         Media & entertainment  Marketing services business      466,750    161,567      0.50       9.49
     Oasis Healthcare  Health                 Dental healthcare provider       631,180    224,858      0.69       6.49
     Pixology          Software & computer    Developer of digital photo       399,000    460,275      1.41       1.43
                       services               printing software solutions
     PM Group          Transport              Design, manufacture & service    604,232  1,495,474      4.59       5.63
                                              of on board vehicle weighting
     Prezzo            Leisure & hotels       Restaurant operator              352,547  1,361,975      4.18       3.11
     Quadnetics Group  Electronic &           Design, integration & control    225,632    270,332      0.83       1.93
                       electrical equipment   of advanced CCTV  & networked
                                              video systems
     Real Good Food    Food producers &       Prepared foods manufacturer      596,113  1,018,534      3.12       4.89
     Company           processors
     Ringprop          Engineering &          Production & marketing of new    366,999    790,460      2.42       4.82
                       machinery              marine propeller
     Symphony Plastic  Chemicals              Manufacturer of fully            409,339    425,579      1.31       5.20
                                              degradable plastic carrier bags
     Synergy           Health                 Medical support services         448,000  1,299,692      3.99       2.16
     Tanfield Group    Support services       Manufacturer of electric         737,403     56,981      0.17       2.02
                                              vehicles and specialist
     The Clapham House Leisure & hotels       Acquiring & developing           453,872    668,496      2.05       3.07
     Group                                    restaurants
     Tikit Group       Software & computer    IT consultancy services and IT   400,000    523,478      1.61       2.79
                       services               solutions
     Tissue Science    Health                 Medical device company for       656,267    874,000      2.68       1.98
     Laboratories                             surgical implants
     UBC Media Group   Media & entertainment  Content supplier to radio,       409,908    410,480      1.26       1.45
                                              internet & digital tv
     Vianet Group      Information technology Remote monitoring of vending     450,000    406,250      1.25      10.04
                       hardware               machines
     XN Checkout       Software & computer    Provider of EPOS systems         356,018  1,141,649      3.50       3.71
     Holdings          services
     Xpertise Group    Support services       Provision of IT training         485,179    176,935      0.54      19.25
                                                                            20,084,663 23,163,062     80.26

All investments are in ordinary shares unless otherwise stated

OFEX Quoted Companies Sector                  Nature of business            Cost at  Valuation      %age    Percentage
                                                                         acquisition         at       of    of company
                                                                                           31st  portfolio   managed by
                                                                                         January             Investment
                                                                                            2005               Manager
                                                                                    £          £         %          %

     Laminate         Construction & building Specialist retailer of           450,000    517,500      1.59      11.14
Flooring Direct       materials               laminate, real wood and solid
                                              wood flooring
                                                                               450,000    517,500      1.59

All investments are in ordinary shares unless otherwise stated

Private Companies     Sector                  Nature of business              Cost at  Valuation   %age of   Percentage
                                                                          acquisition         at portfolio   of company
                                                                                             31st               managed 
                                                                                          January                 by
                                                                                             2005            Investment
                                                                                     £          £         %          %
     Flexbenefits     Software & computer     Employee benefits & financial    517,500    129,375      0.40       8.27
                      services                services
     Lilestone        General retailers       Lingerie design and retail       405,000    405,000      1.24      17.65
     U4EA             Information technology  Data transfer management         374,989     36,201      0.11       1.50
     U4EA (preference Information technology  Data transfer management         477,350    480,350      1.47      11.23
shares)               hardware
                                                                             1,774,839  1,050,926      3.22

All investments are in ordinary shares unless otherwise stated

Other qualifying      Sector                  Nature of business             Cost at  Valuation   %age of   Percentage
investments                                                              acquisition         at portfolio   of company
                                                                                            31st            managed by
                                                                                         January            Investment
                                                                                            2005              Manager
                                                                                    £          £         %          %
    Tanfield Group    Support services        Manufacturer of electric         250,000    250,000      0.77      16.46
8.5% Loan                                     vehicles and specialist
    Xpertise Group    Support services        Provision of IT training         200,000    200,000      0.61     100.00
Loan Stock                                    courses
                                                                               450,000    450,000      1.38

All investments are in ordinary shares unless otherwise stated

Other fixed interest   Sector                 Nature of business             Cost at  Valuation   %age of  Percentage
securities                                                               acquisition         at portfolio  of company
                                                                                            31st           managed by
and  non-qualifying                                                                      January            Investment
investments                                                                                 2005              Manager
                                                                                    £          £         %          %
Debentures and loan
     BK NED Gemeenten**                                                        255,026    250,688      0.77       0.12
     6.375%  MTN 30/3/2005
     Euro Inv Bank**                                                         1,118,922  1,112,870      3.41       0.05
     6.125% BDS 7/12/2005
     Treasury 4.5% 7/3/2007                                                    740,219    749,988      2.30       0.11
                                                                             2,114,167  2,113,546      6.48
Other non-qualifying
     Aquilo            Speciality & other     Accident management services     487,500    260,512      0.80      17.31
     Blooms of         General retailers      Garden centres                   534,993    409,182      1.26       7.21

     Blooms of         General retailers      Garden centres                    20,007      6,480      0.02      23.95

     Cardpoint         Speciality & other     Independent ATM deployer         156,597    435,296      1.34       2.17
     First Artist      Media & entertainment  Sports management company        400,000     33,000      0.10       4.13
     Formation Group   Media & entertainment  Football management &            519,750    271,078      0.83       2.90
                                              marketing services
     ID Data           Information technology Provider of corporate smart      348,250    218,750      0.67       3.21
                       hardware               cards
     ID Data Conv Loan Information technology Provider of corporate smart      225,000    225,000      0.69       8.32
Stock                  hardware               cards
     Medal             Media & entertainment  Creation & exploitation of        51,170    104,769      0.32       9.12
Entertainment &                               intellectual property rights
                                              through acquisition
     Synergy           Health                 Medical support services         189,000    548,308      1.68       2.16
                                                                             2,932,267  2,512,375      7.71

Investments held at   Sector                  Nature of business              Cost at  Valuation   %age of  Percentage
nil valuation*                                                            acquisition         at portfolio  of company
                                                                                                            managed by
                                                                                             31st            Investment
                                                                                          January              Manager

                                                                                     £          £         %          %
     Coinmaster       Leisure & hotels        Production of electronic         350,000          -         -          -
Gaming                                        gaming machines
     Exertris         Software & computer     Developer of  exercise bikes     503,445          -         -          -
     Exertris Conv    Software & computer     Developer of  exercise bikes     100,000          -         -          -
Debt                  services
     Firmgrowth       Software & computer     Student careers directory &      250,000          -         -          -
                      services                internet portal
     Flying Scotsman  Leisure & hotels        Owner of a steam locomotive      400,800          -         -          -
     Global Money     Speciality & other      Money transfer service           300,000          -         -          -
Transfer              finance

     (loan notes)
     Monotub          Household goods &       Washing machine manufacturer     260,000          -         -          -
Industries            textiles
     Recycled Waste   Support services        Environmental control            374,994          -         -          -
     Stanhope Telecom Telecommunication       Telecom products                 500,000          -         -          -
                                                                             3,039,239          -         -          -

*These stocks are in liquidation and, with the exception of Exertris and Global
Money Transfer, they are shown within the Investment Portfolio Summary since
they count towards the VCT investment test which states that 70% of the
Company's assets will be invested in VCT qualifying investments by January 2004.

**All investments listed  are incorporated and quoted within the UK with the
exception of these holdings. BK NED Gemeenten 6.375% MTN 30/3/2005 is
incorporated in the Netherlands and quoted in Luxembourg. Euro Inv Bank 6.125%
BDS 7/12/2005 is incorporated in the UK and quoted in Luxembourg.

Summary                                                Cost at acquisition        Valuation at        Percentage of
                                                                                 31st  January             portfolio
                                                                         £                   £                    %
Total qualifying portfolio*                                     22,759,502          28,181,488                86.45
Fixed interest/non-qualifying portfolio                          5,046,434           4,625,921                14.19
Investments held at nil valuation                                3,039,239                   -                    -
Sub total                                                       30,845,175          32,807,409               100.64
Net current liabilities                                                  -           (210,205)               (0.64)
Total                                                           30,845,175          32,597,204               100.00

*The figure of 86.45% simply shows the share of total market values represented
by qualifying holdings. The figure calculated in accordance with the
requirements of the VCT legislation is 82%.

Table of largest ten investments by value

Name of undertaking              Percentage of     Percentage Profit/(loss)       Retained  Net asset    Accounting
                                     portfolio       held by    before tax        profit/      value       Reference
                                                    company                 (accumulated                    Date

                                             %             %        £000's         £000's     £000's        £000's
Synergy Healthcare                        5.67          1.15         3,888          4,057     25,700      28/03/04
PM Group                                  4.59          4.61         1,584          1,823      6,959      30/06/04
Cardpoint                                 4.58          1.86       (3,056)        (5,826)     36,392      30/09/04
Huveaux                                   4.56          2.56         1,205            473     21,585      31/12/03
Prezzo                                    4.18          1.48           470            142     15,656      28/12/03
Medal Entertainment & Media               4.10          6.85           928          1,312     10,287      31/03/04
XN Checkout Holdings                      3.50          2.15         1,700        (9,400)      6,400      31/12/04
Euro Inv Bank 6.125% BDS 7/12/2005*       3.41          0.05             -              -          -             -
Glisten                                   3.32          2.94         1,331          1,420      9,577      30/06/04
Real Good Food Company                    3.12          3.90       (1,401)        (1,944)     10,985      30/06/04

The aggregate value of these top ten holdings is £13,378,865.

 All figures are taken from the most recently available audited accounts of the
underlying entity with the exception of Real Good Food Company.

*The above fixed interest investment is AAA rated.

Sector analysis                                      Cost at acquisition               Valuation at   Percentage
                                                                                      31st  January  of portfolio

                                                                       £                          £            %
Aerospace & defence                                              481,041                    751,088         2.30
Automobiles & parts                                              187,950                    617,103         1.89
Chemicals                                                        409,339                    425,579         1.31
Construction & building materials                                450,000                    517,500         1.59
Electronic & electrical equipment                                225,632                    270,332         0.83
Engineering & machinery                                          688,392                  1,108,639         3.40
Food producers & processors                                      903,256                  2,099,294         6.44
General retailers                                              1,430,000                  1,180,135         3.62
Health                                                         3,067,962                  4,136,749        12.69
Household goods & textiles                                       375,000                    739,584         2.27
Information technology hardware                                1,875,589                  1,366,551         4.19
Leisure & hotels                                               1,566,419                  2,058,971         6.32
Media & entertainment                                          4,518,912                  4,728,206        14.50
Pharmaceuticals & biotechnology                                  519,240                    427,166         1.31
Software & computer services                                   3,314,548                  3,965,211        12.17
Speciality & other finance                                     2,314,315                  2,495,964         7.66
Support services                                               2,759,942                  2,310,317         7.08
Transport                                                        604,232                  1,495,474         4.59
Fixed interest investments                                     2,114,167                  2,113,546         6.48
Suspended/delisted/liquidated stocks                           3,039,239                          -            -
Sub total                                                     30,845,175                 32,807,409       100.64
Net current liabilities                                                -                  (210,205)       (0.64)
Total                                                         30,845,175                 32,597,204       100.00

Review of Investments

1st Dental Laboratories                    1st Dental is the leading quoted provider of services and products to the
                                           dental industry. Following the recent acquisition of Benchmark the company   
                                           has 15 laboratories and is the largest dental laboratories group. Further
                                           acquisitions are anticipated.

Aero Inventory                             The company is engaged in procurement and inventory management for the
                                           aerospace industry.  The company has consistently won new business since its
                                           listing on AIM and has recently signed contracts with SR Technic and FLS
                                           Aerospace. Results to June 2004 bore the effects of SARS in the Far East but
                                           substantial growth is expected this year as these markets recover and new
                                           contracts contribute.

Aquilo (formerly Accidentcare)             Aquilo moved from OFEX to AIM in June 2004 raising additional funds in so
                                           doing. The company provides a wide range of motor accident management related
                                           services to individuals via brokers, affinity groups and insurers. It also
                                           provides outsource claims management services to insurers and corporates.

Asfare Group                               Asfare is the UK's leading manufacturer of ladders for the rescue services.  
                                           It is also involved in the manufacture of gantries and ancillary equipment to
                                           both UK and overseas customers. The company has identified several potential
                                           additional products which it could supply to its customers and it intends to
                                           pursue these opportunities.

Award International Holdings               Award is a full service promotional incentives company that provides
                                           merchandise, live events and travel. AIH provides its clients with           
                                           promotional goods and services designed to increase brand awareness amongst  

BBI Holdings                               BBI is a Cardiff-based rapid-test diagnostics company based on gold conjugate
                                           technology. The company generates revenues from the manufacture of gold
                                           colloids and conjugates, from bespoke contract product development and from  
                                           its own tests.

Blooms of Bressingham Holdings             Blooms operates eight retail garden centres. Two new sites have been         
                                           developed and opened this spring and early trading has been good. These two 
                                           developments should materially improve the company's profitability in due    

Bright Things                              Bright Things is a developer of an educational games console and software for
                                           the pre-school market. It has signed content agreements with the rights      
                                           holders to characters including Noddy, Teletubbies and Postman Pat.

Camaxys Group                              Camaxys is a developer of enterprise risk management information systems for
                                           environment, health & safety and quality. The company sells its products to
                                           global organisations in a range of markets including oil and gas,
                                           petrochemical, manufacturing and utilities.

Capcon Holdings                            Capcon provide audit, stocktaking and investigation services.  The company   
                                           came to AIM three years ago with an experienced management team keen to grow 
                                           both organically and via acquisition.

Cardpoint                                  Cardpoint is an independent owner and operator of over 2500 ATMs in the UK.  
                                           The company makes a modest charge for cash withdrawals with the customer's
                                           permission. The group is a member of LINK and its machines are located in    
                                           areas not typically served by the banks. The company also deploys mobile     
                                           phone ' top-up' machines.

Centurion Electronics                      Centurion is a UK market leader in the field of in-car audio-visual
                                           entertainment. It focuses on the design, marketing and distribution of       
                                           product comprising DVD, video and the latest LCD monitors. The systems can be
                                           fully integrated and sold through car dealers or manufacturers or may also be
                                           portable 'plug and play' products.

CMS Webview                                CMS has developed extensive expertise in the area of real-time financial     
                                           market data collection, processing and distribution. Customers include the   
                                           London Metal Exchange and the Chicago Board of Trade. CMS also has the       
                                           European rights to distribute ProphetX, a PC based price reporting service.

Corpora                                    Corpora's principal activity is the research, development and sale of the
                                           document navigation software, jump! The core of jump! is an in-document
                                           navigation tool enabling users to search within and between multiple         
                                           documents to find information pertinent to them. The company has added       
                                           additional functionality to its product suite with the acquisition of several
                                           complementary businesses.

First Artist Corporation                   First Artist is a leading European management and representation company
                                           looking after the commercial interests of footballers and other high profile
                                           personalities in the football and television market.

Flexbenefits (unquoted)                    Flexbenefits has developed a system for the management, delivery and
                                           communication of employee benefits and financial services information. These
(formerly Eurobenefits)                    services enable employers to reduce costs and improve employee communication
                                           and understanding. The shares are valued on the basis of a discount to
                                           guaranteed future revenues.

Formation Group                            Formation is a leading sports management and marketing agency with a         
(formerly Proactive Sports)                particular emphasis on football. The company has an international network of 
                                           offices and football agents and represents nearly 300 players.

Fulcrum Pharma                             Fulcrum Pharma offers global virtual drug development and strategic          
                                           outsourcing services to the pharmaceutical and biotechnology industries. The 
                                           company has offices in the UK, USA and Japan offering global solutions across
                                           the full length of the drug development value chain.

Glisten                                    The company was admitted to AIM in June 2002 with the objective of building a
                                           food group focusing on niche sectors. The acquisition of Glisten             
                                           Confectionery based in Blackburn was made at this time. It is a manufacturer 
                                           of chocolate and sugar based confectionery, snack bars, edible decorations   
                                           and ingredients. It serves a wide range of customers including many high     
                                           street retailers and the foodservice and export sectors. The company has made
                                           various successful acquisitions since admission and more are anticipated.

Huveaux                                    Huveaux listed on AIM in December 2001 with the intention of making
                                           acquisitions in the media sector. The experienced management team acquired
                                           Vacher Dodd, the leading publisher of parliamentary directories in July 2002
                                           and has since purchased Lonsdale and Fenman, both of whom are involved in
                                           educational publishing. It has also added to its political publishing        
                                           business with the purchase of Parliamentary Communications Ltd.

ID Data                                    ID Data is a supplier of secure transaction systems and services to the
                                           international telephone, banking and retail industries. Exporting to more    
                                           than 30 countries, ID Data is a leading UK based manufacturer of smart cards.

ILX Group (formerly Intellexis)            ILX is a financial training company involved in financial awareness training
                                           for non-financial managers. The company has a blue chip client base from the
                                           UK, USA and Europe and has an extensive library of e-learning courseware.
                                           Several add-on acquisitions have been made to enhance last year's purchase of
                                           Key Skills Ltd.

Imprint Search & Selection                 Imprint is establishing a business in the medium and high value permanent
                                           recruitment market.  The founders of the business have impressive track      
                                           records in this market, having previously built up and sold a similar        
                                           business.  The company has recently completed the acquisition of financial   
                                           recruitment specialist ECHM which is expected to be earnings enhancing.

Knowledge Technology Solutions             KTS is a software company using proprietary technology to develop and provide
                                           real-time interactive market data in a reliable, cost effective manner
                                           primarily over the internet. In contrast to other providers, the system does
                                           not require any dedicated hardware, software or infrastructure but will work 
                                           on a standard PC. The service is aimed mainly at the professional user but is
                                           also affordable for private investors wanting a more sophisticated service.

Kuju                                       Kuju is a leading interactive entertainment developer, producing games on a
                                           range of platforms including PC, console (Playstation2, Xbox and GameCube),
                                           mobile phones and interactive TV.

Laminate Flooring Direct                   LFD is a specialist retailer of laminate, real wood and solid wood flooring  
                                           and associated products. Following the failure to raise additional equity    
                                           funding due to adverse trading conditions, administrative receivers were     
                                           appointed during March 2005.

Lilestone (unquoted)                       Lilestone has established the Myla brand of lingerie.  The company is        
                                           designing its own brand products as well as sourcing product from other      
                                           designers throughout the world.  The products are being sold via mail order, 
                                           the internet and through conventional retail channels such as Selfridges and 
                                           the company's own stores. The company has recently opened its first US store 
                                           in New York which has been well received. The shares are valued on the basis 
                                           of the last funding round in November 2004.

Lloyds British Testing                     Lloyds British is one of the leading companies within the field of lifting
                                           equipment engineering. It is active in inspection and testing, short-term
                                           supply repair and renovation, crane and lift maintenance, and training. It   
                                           has 19 locations in the UK.

Lo-Q                                       Lo-Q has developed a queue management system that places visitors to theme
                                           parks in 'virtual queues', reducing the time that customers spend physically
                                           waiting in line for key rides to a few minutes, enabling them to enjoy, and
                                           spend money on the other attractions in the park. The lower cost version of  
                                           the product was introduced last year.

Matrix Communications Group                Matrix is a network integrator focusing on non-Cisco hardware. Its main
                                           hardware providers are Foundry Networks, F5 and Extreme Networks. Matrix     
                                           offers distribution, integration, security management, voice over internet   
                                           protocol (VOIP) and other related telecoms and managed services.

Medal Entertainment & Media                Medal was established by an experienced management team to build a group
                                           actively participating in the creation, exploitation and ownership of
                                           audio-visual copyrights. The company currently has two subsidiaries,
                                           Leisureview, a specialist video/DVD publisher and Fountain Television, the
                                           largest fully-equipped independent TV studio in the UK.

Mediwatch                                  Mediwatch is a medical diagnostic equipment company that is developing high
                                           speed urological screening equipment.  The company's products are designed to
                                           enable early detection of prostate and bladder cancers for the fast growing
                                           primary care market.  The company has chosen Bard as its marketing partner   
                                           for the Portascan product.

Monstermob Group                           Monstermob provides mobile phone content such as ringtones, competitions,
                                           wallpapers, voicemails, logos, alerts and games. Income is derived from the
                                           sale of this content which is ordered by customers sending a text message or
                                           ringing a premium rate number. The company has a huge database of customers
                                           aged mainly between 14 and 30 in the UK, Asia and the Americas.

Music Copyright Solutions                  MCS is a music publisher principally focusing on the management of music
                                           library assets, music copyright licensing and royalty administration,
                                           collection and payment. The company has been building its portfolio via the
                                           acquisition of libraries of rights and sees numerous further opportunities in
                                           this area. The shares which were traded on OFEX moved to AIM last October.

NWD Group                                  NWD was a shell company established for the purpose of building a marketing
                                           services business. The company has now made several acquisitions in this     
                                           area. These companies are involved in corporate communications, brand        
                                           consultancy and brand promotion. Further acquisitions are anticipated.

Oasis Healthcare                           Oasis has built up an estate of dental practices in the UK primarily by
                                           acquisition and now has 127 sites and over 500 clinicians serving over       
                                           800,000 patients. The company is now experiencing the benefits of scale and  
                                           has annualised turnover of about £75m.

Pixology                                   Pixology is a provider of innovative imaging software in the rapidly         
                                           expanding market of digital photography. The company has developed technology
                                           to enable consumers to easily print (at home, on-line or in-store), organise 
                                           and share their digital pictures. The company has also developed a solution  
                                           to 'red eye' which is being sold to camera manufacturers.

PM Group                                   The group is a leader in the design, manufacture and service of onboard
                                           weighing systems and associated software for the bulk haulage and waste
                                           management industries. The company has a significant market position in the
                                           bulk haulage market but due to the introduction of new legislation in the    
                                           waste management area strong growth is now being seen.

Prezzo                                     Prezzo owns and operates a chain of restaurants based in and around London   
                                           and trading in two main formats, Jonathans and Prezzo. The food offering     
                                           consists of pizza and pasta with Prezzo also selling rotisserie chicken. At  
                                           the end of April 2005 the company had over 50 restaurants and is operating   

Quadnetics Group                           Quadnetics is a leader in the design, integration and control of advanced    
                                           CCTV and networked video systems. Last year's acquisition of Look Closed     
                                           Circuit TV (supplying systems for bus manufacturers and operators) has been  
                                           successfully integrated and the group continues to win new business.

Real Good Food Company                     RGF manufactures and supplies chilled and ambient products in niche areas to
                                           food retailers. The business has been built by acquisition and organic       
                                           The recent  purchase of Five Star Fish expands the product range beyond      
                                           cakes, pastries and other bakery products into another high-growth area.

Ringprop                                   Ringprop owns the rights to a marine propeller technology. As the name       
                                           suggests the propeller is enclosed by a ring which delivers certain          
                                           performance and safety advantages over conventional products. Due to the     
                                           inherent strength the design provides the propeller can be made of lighter,  
                                           composite materials giving cost advantages as well as being safer for marine 
                                           and human life when in use. The company's manufacturing partner, JL French,  
                                           is now in large-scale production and the product was launched this spring in 
                                           the US.

Symphony Plastic Technologies              Symphony is a specialist technology company concerned with degradable plastic
                                           packaging products. Symphony's 'd2wTM' technology has been licensed to       
                                           several overseas partners and production for UK customers is sub-contracted  
                                           to manufacturing partners.

Synergy Healthcare                         Synergy is a specialist provider of out-sourced medical support services to  
                                           the NHS.  It is the largest private sector provider of sterile               
                                           instrumentation services and linen products.  The company has several long   
                                           term contracts with different NHS Trusts and hospitals around the UK. It has 
                                           recently acquired the leading Dutch sterile instrumentation service company  
                                           which further increases the growth potential.

Tanfield Group (formerly Comeleon)         Following the merger of Comeleon and Tanfield the company is involved with
                                           product personalisation via digital imaging (Comeleon) and specialist
                                           manufacturing, providing technical and assembly solutions to a wide range of
                                           sectors (Tanfield). Tanfield has also recently acquired Smiths Electric
                                           Vehicles which has a dominant position in the electric vehicle manufacturing
                                           and servicing markets.

The Clapham House Group                    Clapham House was admitted to AIM to exploit acquisition opportunities within
                                           the UK restaurant sector. The experienced management team made its first
                                           acquisition in December with the purchase of a profitable Greek restaurant   
                                           and bar chain and has subsequently bought the Bombay Bicycle Indian          
                                           restaurant business and the Gourmet Burger Kitchen. All formats appear to    
                                           have significant rollout potential.

Tikit Group                                The company is a provider of consultancy services and software solutions
                                           primarily to the legal profession.  The company concentrates on the top 200  
                                           law firms in the UK and has a very good reputation for quality of service and
                                           'best of breed' solutions.  Applications cover time recording, document      
                                           management, customer relationship management and knowledge management. The   
                                           company has recently entered the Spanish and French markets via acquisition.

Tissue Science Laboratories                Tissue Science is a medical devices company specialising in human tissue
                                           replacement and repair products derived from porcine dermis.  The company has
                                           proprietary core technology, which has many applications in a rapidly growing
                                           market.  It has marketing agreements with several partners to sell products  
                                           in different territories.

U4EA (unquoted)                            U4EA is a specialist provider of solutions for data transfer management by
                                           large corporates.  This has particular implications in improving the
                                           performance of transfers of large amounts of data across networks.  The      
                                           shares are currently unquoted and are valued on the basis of a funding round 
                                           carried out in July 2004.

UBC Media Group                            UBC is a content and programme producer for the radio, internet and digital
                                           television industries. It is the largest independent supplier of programming 
                                           to the BBC. It supplies entertainment and traffic news services to commercial
                                           radio and owns the Classic Gold radio channel as well as other digital radio

Vianet Group                               Vianet is a provider of telemetry-based solutions for maintaining and        
                                           supplying automatic vending machines. The company offers the machine         
                                           operators and brand owners a data management service to improve machine usage
                                           and profitability. The product has been trialled by several customers and    
                                           rollouts are ongoing, the company has recently signed a large contract with  

XN Checkout Holdings                       The company offers electronic point of sale terminals for the licensed trade
                                           and for restaurant operators.  The company has a 'blue chip' client base and 
                                           is benefiting from a recovery in spending in these sectors following a       
                                           difficult few years. The company also has product offerings in the hotel and 
                                           gaming markets. The shares listed on AIM in June since when the shares have  
                                           performed strongly giving us a useful profit over our original private       

Xpertise Group                             Xpertise is a leader in providing accredited technical IT training to        
                                           business customers from centres in the North West, the North East, the       
                                           Midlands and London. The company has suffered along with its competitors from
                                           poor market conditions until this year but now appears to be experiencing a  
                                           modest improvement.

Financial Statements

Statement of Total Return
(incorporating the revenue account*) for the year ended 31st January 2005

                                                                  Year ended                                  Year ended
                                                           31st January 2005                           31st January 2004
                                         Revenue       Capital         Total    Revenue         Capital            Total

                                               £             £             £          £               £                £
Gains on investments                           -     3,072,149     3,072,149          -       6,908,453        6,908,453
Income                                   344,617             -       344,617    645,846               -          645,846
Administrative expenses
Investment management fees             (150,834)     (452,503)     (603,337)  (135,209)       (405,628)        (540,837)
Other expenses                         (309,220)             -     (309,220)  (294,584)               -        (294,584)
Return on ordinary activities          (115,437)     2,619,646     2,504,209    216,053       6,502,825        6,718,878
before taxation
Tax on ordinary activities                     -             -             -   (49,029)          49,029                -
Return on ordinary activities          (115,437)     2,619,646     2,504,209    167,024       6,551,854        6,718,878
after taxation for the financial
Dividends in respect of equity         (157,154)             -     (157,154)   (82,227)               -         (82,227)
Transfer (from)/to reserves            (272,591)     2,619,646     2,347,055     84,797       6,551,854        6,636,651
Basic and diluted Return per             (0.36)p         8.09p         7.73p      0.51p          19.89p           20.40p
ordinary share

* The revenue column of this statement is the profit and loss account of the

All revenue and capital items in the above statement derive from continuing

No operations were acquired or discontinued in the period.

Balance Sheet
                                                                                   As at                      As at
                                                                            31st January               31st January
                                                                                    2005                       2004
                                                                                       £                          £
Fixed assets
       Qualifying investments                                                 28,181,488                 25,509,652
       Fixed interest securities and other non-qualifying                      4,625,921                  5,649,133

                                                                              32,807,409                 31,158,785
Current assets
Debtors                                                                          118,340                    189,574
Cash at bank                                                                     428,217                    982,144
                                                                                 546,557                  1,171,718
Creditors: amounts falling due within one year                                 (756,762)                  (958,247)
Net current (liabilities)/assets                                               (210,205)                    213,471
Net assets                                                                    32,597,204                 31,372,256
Capital and reserves
Called-up share capital                                                        1,576,043                  1,644,543
Share premium account                                                          2,721,969                  2,721,969
Special reserve                                                               25,774,626                 26,896,733
Capital redemption reserve                                                        73,500                      5,000
Capital reserve - realised                                                       425,432                  (463,440)
Capital reserve - unrealised                                                   1,962,234                    231,460
Revenue reserve                                                                   63,400                    335,991
Equity shareholders' funds                                                    32,597,204                 31,372,256
Net asset value per ordinary share                                               103.41p                     95.38p

Cash Flow Statement
                                                                               Year ended                Year ended
                                                                             31st January              31st January
                                                                                     2005                      2004
                                                                                        £                         £
Operating activities
Investment income received                                                        451,338                   730,354
Deposit interest received                                                          17,620                    22,864
Underwriting commission received                                                      450                         -
Investment management fees paid                                                 (451,024)                 (530,361)
Other expenses paid                                                             (298,353)                 (283,598)
Net cash outflow from operating activities                                      (279,969)                  (60,741)

Corporation tax paid                                                                    -                  (48,204)
Net cash outflow from taxation                                                          -                  (48,204)
Capital expenditure and financial investment
Purchases of investments                                                      (5,716,930)               (7,392,552)
Disposals of investments                                                        6,424,275                 8,020,677
Net cash inflow from capital expenditure and financial investment                 707,345                   628,125
Equity dividends paid                                                            (81,777)                 (263,527)
Net cash inflow before financing                                                  345,599                   255,653
Cost of ordinary shares purchased for cancellation                              (899,526)                  (39,459)
Net cash outflow from financing                                                 (899,526)                  (39,459)
(Decrease)/increase in cash for the period                                      (553,927)                   216,194

Notes to the Financial Statements

1       Accounting policies

A summary of the principal accounting policies, all of which have been applied
consistently throughout the year, is set out below.

a.      Basis of accounting

The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of fixed asset investments. The
financial statements have been prepared in accordance with applicable accounting
standards and are in compliance with the 2003 Statement of Recommended Practice
'Financial Statements of Investment Trust Companies' ('SORP').

b.      Investments

Listed investments and investments traded on AIM and OFEX are stated at mid
market prices at the year end. Where trading in the securities of an investee
company is suspended, the investment is valued at the Board's estimate of its
net realisable value.

Unquoted investments are stated at the Directors' valuation with reference to
the British Venture Capital Association ('BVCA') guidelines where appropriate.
The Directors' policy in valuing unquoted investments is to carry them at cost
except in the following circumstances:

•      Where a company's underperformance against plan indicates a diminution in
the value of the investment;

•      Where a company is well established and profitable, the shares may be
valued by applying a suitable price-earnings ratio to the company's historic
post-tax earnings. The ratio used is based on a comparable listed company or
sector but discounted to reflect lack of marketability;

•      Where a value is indicated by a material arms-length transaction by a
third party in the shares of a company.

Capital gains and losses on investments, whether realised or unrealised, are
dealt with in the capital reserve.

c.      Income

Dividends receivable on listed and quoted equity shares are brought into account
on the ex-dividend date. Dividends receivable on unquoted equity shares are
brought into account when the Company's right to receive payment is established
and there is no reasonable doubt that payment will be received. Fixed returns on
non-equity shares and debt securities are recognised on a time apportionment
basis so as to reflect the effective yield, provided there is no reasonable
doubt that payment will be received in due course. Underwriting commission and
interest receivable are included in the accounts on an accruals basis.

d.      Expenses

All expenses are accounted 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 on an investment.

•        expenses are charged to capital reserve - realised where a connection
with the maintenance or enhancement of the value of the investments can be
demonstrated.  In this respect the investment management fee has been allocated
75% to capital reserve and 25% to revenue account, in line with the Board's
expected long-term split of returns, in the form of capital gains and income
respectively, from the investment portfolio of the Company.

e.      Taxation

Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future have occurred
at the balance sheet date.  This is subject to deferred tax assets only being
recognised if it is considered more likely than not that there will be suitable
profits from which the future reversals of the underlying timing differences can
be deducted.   Timing differences are differences between the Company's taxable
profits and its results as stated in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse, based on
tax rates and laws that have been enacted or substantially enacted by the
balance sheet date. Deferred tax is measured on a non-discounted basis.

Any tax relief obtained in respect of management fees allocated to capital is
reflected in the capital reserve - realised and a corresponding amount is
charged against revenue. The tax relief is the amount by which corporation tax
payable is reduced as a result of these capital expenses.

f.       Capital Reserve


The following are accounted for as realised returns:

•        Gains and losses on realisation of investments;

•        Realised exchange differences of a capital nature;

•        Expenses and finance costs, together with the related tax effect to
         this reserve in accordance with the policies; and

•        Realised gains and losses on transactions undertaken to hedge an
         exposure of a capital nature.


The following are accounted for as unrealised returns:

•      Increases and decreases in the valuation of investments held at the year

•      Unrealised exchange differences of a capital nature; and

•      Unrealised gains and losses on transactions undertaken to hedge an
       exposure of a capital nature.

2    Dividend

     The Directors are proposing a final dividend of 0.50p per ordinary share for the year ended 31st January 2005
     (2004: 0.25p). The dividend will be paid on 16th June 2005 to shareholders whose names appear on the register of
     members at the close of business on 20th May 2005.

3    Return per ordinary share

     Basic and diluted revenue return per ordinary share is based on the net loss on ordinary activities after taxation
     of £115,437 (2004: profit £167,024) and on 32,383,305 (2004: 32,931,545) ordinary shares, being the weighted
     average number of ordinary shares in issue during the year.

     Basic and diluted capital return per ordinary share is based on net capital gains for the financial year of
     £2,619,646 (2004: £6,551,854) and on 32,383,305 (2004: 32,931,545) ordinary shares, being the weighted average
     number of ordinary shares in issue during the year.

4    Annual General Meeting

     The Annual General Meeting of the Company will be held at 21 New Street, Bishopsgate, London EC2M 4HR on Thursday
     9th June 2005 at 11.30 a.m.

5    Statutory Report and Accounts

     The financial information set out above does not constitute the Company's statutory accounts for the year ended
     31st January 2005.  Statutory accounts for 2005 will be finalised on the basis of the financial information
     presented by the Directors in this announcement and will be delivered to the Registrar of Companies following the
     Company's Annual General Meeting.

     The Company will be circulating full Report and Accounts to shareholders shortly and copies will be available from
     the Registered Officer of the Company, 21 New Street, London, Bishopsgate, London EC2M 4HR.

                      This information is provided by RNS
            The company news service from the London Stock Exchange