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  Print      Mail a friend       Annual reports

Thursday 22 February, 2007


Final Results

                               QUESTER VCT 5 PLC                               


Summary of results for the year ended 31 December 2006

Per ordinary share (pence)                     2006    2005     2004
Capital values                                                      
Net asset value                                84.9    88.6     91.6
Share price                                    77.0    78.0     85.5
Return and dividends                                                
Dividend paid                                   1.0       -        -
Cumulative dividend                             2.5     1.5      1.5
Total return*                                  87.4    90.1     93.1
*Net asset value plus cumulative dividend                           

The directors have resolved to pay an interim dividend of 1p per share in
respect of the year ending 31 December 2007, payable on 28 March 2007. This 
dividend, which is not included in the table above, will increase cumulative
dividends to 3.5p per share.



This has been an active year for the Fund, with 20 new and follow-on
investments. The venture capital portfolio has enjoyed a greater level of
stability as the underlying companies have been able to develop their business
plans in a favourable general economic environment.

Progress of the portfolio

The portfolio has increased to 35 portfolio companies in an active investment
period. Nine companies were added to the portfolio at a cost of £2.0million.
One of these, Ovum plc, was also sold within the year generating a 58% gain
over cost.

A further £1.9million was also provided to 11 investments.

We are holding reserves for further investment in existing portfolio companies
and we continue to have the capacity to make a limited number of further
venture capital investments. Shareholders can expect to see two or three new
investments being made over the year.

Net assets

The movement in net assets is set out in the table below:

                                                               £'000  Pence per
Net asset value at 31 December 2005                           21,760       88.6
Income                                                           292        1.2
Operating expenses                                             (837)      (3.4)
Net realised gain on investments                                 126        0.5
Net unrealised loss on investments                             (332)      (1.4)
Net assets before dividends and share buy-backs               21,009       85.5
Dividend paid, net of amounts reinvested                       (230)      (1.0)
Share buy-backs                                                (626)        0.4
Net asset value at 31 December 2006                           20,153       84.9

During the year, the Company's net assets fell by £1.6million, reflecting the
impact of operating expenses, dividends and share buy-backs with net realised
gains being lower than net unrealised losses. Net asset value per share
decreased by 3.1p (3.5%) before taking account of share buy-backs and
dividends. The interim dividend for 2007 is excluded from the above table.


The Board has resolved to pay an interim dividend of 1p per share, costing
approximately £237,000, in respect of the year ending 31 December 2007. This is
in place of a final dividend for 2006 and is being paid early to ensure that
the Company meets the requirements of the tougher rules for VCTs that take
effect on 6 April 2007. This dividend reflects the realised profits arising
from the sale of Ovum and on sales of other listed equities in the year.

Change in composition of the Board

Bill Passmore and Jack Lovell stepped down from the Board in December. I would
like to express my thanks to them both for the invaluable service that they
have provided during their respective five years service on the Board since the
Company's incorporation in 2001. I have replaced Bill as Chairman.

I am pleased to announce the appointment to the Board of Patrick Seely and Sir
Colin Southgate. They bring with them a wealth of experience of early stage
technology companies and I am certain that they will both provide a significant
contribution to the Company.


There will be an increasing focus over the next three years on planning for and
achieving exits from the existing venture capital portfolio. A relatively low
volume of exits is currently anticipated for 2007, with the rate expected to
increase in 2008 and 2009. Going forward, the objective will be to generate
significant cash proceeds and an uplift in total return. A balance will be
struck between paying dividends and reinvesting these proceeds in order to
maintain the VCT status of the Company.

During 2007 and before exits are achieved, we expect total return to reduce as
a result of running costs and possible provisioning against the weaker
investments. We continue to believe that total return will increase over the
medium term.

Michael Inwards


22 February 2007



This has been another active year for the portfolio in which nine new
investments have been made, one investment has been successfully sold and
further funding has been provided to 11 companies in the portfolio.

In addition, it has been a period in which a number of companies have
completed, or largely completed, negotiations to secure further funding from
both new and existing shareholders. We believe that their ability to do so is
testament to the quality and potential of their product offerings and the
underlying businesses themselves.

Venture capital portfolio: valuation changes

The company has invested a further £3.9million in venture capital investments
during the year, with £2.0million being committed to new investments and £
1.9million to follow-on funding of existing investments.

New Investments:

The Company has made nine new investments during the year, as set out in the
table below:

Company                  Industry sector              £'000
Haemostatix Limited      Biotechnology                   61
Imagesound plc           Industrial products &          500
Keronite Limited         Chemicals & materials          387
Landround plc            Other services                  73
Ovum plc                 Other services                 125
Perpetuum Limited        Electronics                    185
Phoqus Group plc         Biotechnology                  145
Secerno Limited          Software                       108
Vivacta Limited          Diagnostics & devices          390

The investments in Haemostatix Limited, Ovum plc, Perpetuum Limited and Vivacta
Limited were reported on at the half year.

Imagesound, an AIM traded company, is a leading supplier of in-store music,
radio and TV services to the branded retail and leisure sectors. The company
utilises the latest technology to source, manage and distribute profiled music,
targeted messaging and high impact audio-visual content to create and control
the retail environment, enhance the customer experience and support the brand
offering. The investment will enable Imagesound to pursue its strategy to build
profits by leveraging its operating infrastructure across a growing network of
retail and leisure outlets, obtained through new client wins and the
acquisition of rival operators.

The investment in Keronite was made as part of a £10.2million pre-IPO funding
round. Keronite has developed a metal-coating process that hardens the surface
of aluminium and magnesium producing outstanding resistance to corrosion and
wear. This offers a cost-effective alternative to conventional coating methods
meeting a growing demand from manufacturers. The company has partners operating
its process across Western Europe, the US and Asia and it has formed global
alliances with companies throughout the light metal supply chain.

The investment in Landround, the AIM traded market leader in travel, leisure
and lifestyle promotions, was part of a £1.6million funding round in December.
Landround runs innovative voucher based promotions for customer campaigns,
trade incentives, staff motivation and reward programmes. In the UK, Landround
operates Discover Promotions, the buy and fly loyalty reward programme and
Travel Offers. The company has offices across Europe and works in partnership
with 19 of the world's leading airlines and other major travel and leisure

Phoqus is an AIM traded company providing a range of innovative and patented
drug delivery systems based on electrostatic dry powder deposition technology.
This technology allows very precise deposition of coating powder onto the
surface of tablets, with benefits including improved drugs' performance and the
controlled release of a drug into the body. The technology can also be used to
create novel images on tablets as a means of brand enhancement and protection
against counterfeiting.

The investment in Secerno was made as part of a £2million funding round.
Secerno has developed a unique database and assurance platform, Secerno.SQL,
which enables organisations to detect and prevent fraud, provide regulatory
compliance and assure the integrity and privacy of online data. The platform
addresses the increased threat to security faced by organisations by protecting
database systems without complicated user intervention.

Of the five investments made in the second half, three are AIM traded whilst
Keronite and Secerno are unquoted. All, other than Secerno, are revenue
generating and are considered later stage investments, which adds greater
spread and risk diversification to Quester VCT 5's portfolio.

Of the four investments made in the first half, only Ovum, a leading provider
of ICT research and consulting services, was a revenue generating later stage
investment. The investments in Haemostatix, Perpetuum and Vivacta potentially
offer good upside returns, but, being pre-revenue and earlier stage companies,
are riskier investments.

During the year, Ovum was subject to a successful cash bid of 300p per share
from Datamonitor plc. This transaction completed in December 2006 resulting in
exit proceeds of £197,000 for Quester VCT 5 and a profit of £72,000. This
represents a gain of some 58% in the year.

Follow-on investments

Follow-on funding totalling £1.9million was provided to 11 companies, as
detailed below:

Name                               Industry sector                     £'000      
Advanced Valve Technologies        Industrial products &                  72
Limited                            services                                 
Allergy Therapeutics plc           Biotechnology                         200
Avidex Limited (prior to purchase  Biotechnology                          53
by MediGene AG)                                                             
Azea Networks, Inc.                Communications                        205
Celona Technologies Limited        Software                              322
Identum Limited                    Software                              143
Lectus Therapeutics Limited        Biotechnology                         258
Oxford Immunotec Limited           Diagnostics & devices                  20
Oxxon Therapeutics Holdings, Inc.  Biotechnology                          55
Workshare Limited                  Software                              309
Xention Discovery Limited          Biotechnology                         245

Venture capital portfolio: valuation changes

The venture capital portfolio was valued at £11.5million as at 31 December
2006. During the year there was a net downwards revaluation across the
portfolio of £807,000. Of this, £461,000 was attributable to the Company's
unquoted portfolio with the balance of £346,000 coming from its listed

Unquoted venture capital investments

The largest valuation changes were seen in the investments in Global Silicon
Limited and Workshare Limited. The £333,000 investment in Global Silicon was
written off following its failure to get significant sales traction despite
having a proven product. This loss has largely been offset by a valuation
uplift of £232,000 applied to the investment in Workshare to reflect the
pricing of its latest funding round that completed in December 2006 when it
successfully raised $23million from a syndicate of new and existing investors.

The investment in Antenova, a leading developer of high performance antenna
solutions for mobile handsets, portable devices and laptop computers, is valued
at the firm pricing of a funding round scheduled to complete imminently. The
pricing is lower than previously and has resulted in a small downwards
revaluation of £40,000. Despite this, we remain positive about the prospects
for Antenova.

A £229,000 reduction in the carrying value of Azea, which develops and markets
undersea optical networking solutions, has been effected to reflect the pricing
of an upcoming round in which a significant new third party investor is
expected to participate. Azea has successfully completed its first three
commercial deployments and has further sales opportunities in the pipeline.

The provision against Mesophotonics Limited, developers of devices which
utilise the properties of light to enhance dramatically the performance of
silicon chips, has been increased from 25% to 50% of cost to reflect delays in
the implementation of its plans. This has resulted in an £89,000 reduction in
carrying value.

Quoted venture capital investments

The quoted venture capital portfolio has seen an overall fall in value of £
346,000 during the year. This was predominately driven by the performance of
two AIM traded investments, Genosis plc and Portrait Software plc, which fell
by a combined £660,000. Both are examples of volatile price movements in AIM
traded stocks affected by limited liquidity. Of the other investments, five
increased in value whilst four decreased.

The investment in Allergy Therapeutics plc, the specialist pharmaceutical
company focused on the development of innovative therapies for the treatment
and prevention of allergy-related conditions, continued to perform well and
over the year it rose in value by £136,000. It has made progress
internationally with the Pollinex Quattro vaccine platform and has growing
commercial product sales and an advanced product pipeline, with two pivotal
clinical studies commencing in the current financial year. A further £200,000
was invested as part of a £19million fundraising in May 2006.

Avidex, a previously unquoted company was purchased by MediGene AG, a publicly
quoted German-American biotechnology company, in September 2006. This was a
paper transaction resulting in an investment in MediGene. The acquisition
combined Avidex's world class research capabilities with MediGene's strong
development and commercial expertise. MediGene's enhanced drug pipeline
includes several drug candidates to treat cancer and autoimmune diseases,
including Avidex's lead product RhuDex®. By 31 December 2006, MediGene's share
price had risen by approximately 17% since the date of the acquisition
resulting in an uplift of £179,000 in the carrying value of VCT 5's investment.
It is currently anticipated that the MediGene investment will be held for the
medium term.

The investment in Genosis, developers of Fertell the combined male and female
home fertility test, has performed poorly over the year. At the half year, the
investment had fallen in value by £487,000. It subsequently fell by a further £
32,000 over the second half following the announcement in September 2006 that
sales were lower than expected. Recent news has been more positive, with
Genosis announcing in December that sales volumes had increased and that a
second product, a female ovarian reserve test, was to go on sale at Boots from
February 2007. The share price has recovered by approximately 24% since 31
December 2006.

The value of the investment in Portrait Software plc fell by £144,000 on the
announcement that full year sales were likely to be below market expectations.
Subsequent announcements have been more positive and the interim statement for
half year ended 30 September 2006 reporting an increase in turnover, a new
strategic partnership with Getronics and a significant contract win with a
European Bank. Portrait Software's share price has risen marginally since the
year end.

Venture capital portfolio: sector spread

Industry sector                  Percentage of       Valuation          Number of
                               venture capital       £'000            Investments         
                                  portfolio at                             
Biotechnology                             29.9       3,425                      9
Software                                  28.4       3,255                      7
Diagnostics & devices                      9.7       1,114                      3
Industrial products &                      9.5       1,084                      4
Communications                             7.5       864                        2
Chemicals & materials                      4.1       475                        2
Electronics                                3.7       425                        3
Hardware                                   3.3       373                        1
Semiconductors                             1.6       183                        2
Consumer goods & services                  1.5       170                        1
Other services                             0.8       83                         1
                                         100.0       11,451                    35

There continues to be a sensible spread of investments by sector. In addition,
the level of relative risk across of the portfolio has been reduced on account
of an increasing proportion of later stage investments.

Listed equity and bond portfolios

The listed equity and bond portfolios have again performed well, achieving
respective total returns of 19.5% and 4.4% over the 12 months.

As anticipated, the year saw a continued reduction of the bond portfolio to
fund the Company's investment activities. A residual balance of £1.9million was
retained as at the year end. It is anticipated that this balance will be sold
during 2007.

The listed equity portfolio was valued at an uplift of £1.1million over cost
(41% gain) as at the year end. It is possible that a proportion of this
portfolio, which is held as a reserve for venture capital investment, may to be
utilised in this capacity during 2007. This will depend on the timing and
quantum of exit proceeds received on the sale of venture capital investments,
net of any dividends paid to shareholders.


The Company retains the capacity to make a further two to three new venture
capital investments, which are likely to be made in 2007. Significant resources
are now being directed towards achieving successful exits from the portfolio
and it is envisaged that a significant amount of exit activity will be seen in
the next three years and particularly in 2008 and 2009. In the meantime,
individual investment valuations may vary according to the pricing of interim
funding rounds, with the ultimate realisable value of individual companies
crystallising on exit.

Quester Capital Management Limited


22 February 2007


                         Industry sector   Original Valuation Equity   % of    
                                           Cost     £'000     % held   fund by 
Quoted venture capital investments                                             
Allergy Therapeutics   Biotechnology       700      850       1.1%     4.2%    
Cyclacel               Biotechnology       500      144       0.1%     0.7%    
Pharmaceuticals, Inc.                                                          
Genosis plc            Diagnostics &       599      80        3.5%     0.4%    
Imagesound plc         Industrial products 500      498       0.5%     2.5%    
                       & services                                              
Landround plc          Other services      73       83        2.3%     0.4%    
MediGene AG *          Biotechnology       624      494       0.2%     2.5%    
Phoqus Group plc       Biotechnology       145      140       0.4%     0.7%    
Polaron plc            Industrial products 250      117       1.1%     0.6%    
                       & services                                              
Portrait Software plc  Software            565      183       1.4%     0.9%    
Public Recruitment     Industrial products 250      64        0.6%     0.3%    
Group plc              & services                                              
Quadnetics Group Plc   Electronics         57       61        0.1%     0.3%    
Total quoted venture capital investments   4,263    2,714              13.5%   
Unquoted venture capital investments                                           
Advanced Valve         Industrial products 676      404       11.9%    2.0%    
Technologies Limited   & services                                              
Antenova Limited       Communications      402      362       2.2%     1.8%    
Arithmatica Limited    Semiconductors      287      184       2.5%     0.9%    
Azea Networks, Inc.    Communications      731      502       2.4%     2.5%    
Celona Technologies    Software            659      659       5.5%     3.3%    
Cluster Seven Limited  Software            317      317       4.0%     1.6%    
Global Silicon Limited Semiconductors      333      -         4.2%     0.0%    
Haemostatix Limited    Biotechnology       61       61        3.6%     0.3%    
HTC Healthcare Group   Consumer goods &    286      170       3.5%     0.8%    
plc                    services                                                
Identum Limited        Software            537      537       2.7%     2.7%    
Keronite Limited       Chemicals &         387      387       2.7%     1.9%    
Lectus Therapeutics    Biotechnology       364      364       2.1%     1.8%    
Level Four Software    Software            414      414       7.4%     2.1%    
Lorantis Holdings      Biotechnology       400      400       1.0%     2.0%    
Mesophotonics Limited  Electronics         357      179       3.0%     0.9%    
Nanotecture Group      Chemicals &         88       88        0.8%     0.4%    
Limited                materials                                               
Oxford Immunotec       Diagnostics &       556      644       3.7%     3.2%    
Limited                devices                                                 
Oxxon Therapeutics     Biotechnology       422      236       1.3%     1.2%    
Holdings, Inc                                                                  
Pelikon Limited        Hardware            373      372       2.9%     1.8%    
Perpetuum Limited      Electronics         185      185       3.4%     0.9%    
Secerno Limited        Software            108      108       1.7%     0.5%    
Vivacta Limited        Diagnostics &       390      390       5.6%     1.9%    
Workshare Limited      Software            764      1,037     2.9%     5.1%    
Xention Discovery      Biotechnology       700      737       3.4%     3.7%    
Total unquoted venture capital investments 9,797    8,737              43.3%   
Total venture capital                      14,060   11,451             56.9%   
Listed equity                              2,748    3,893              19.3%   
Listed fixed interest                      1,872    1,868              9.3%    
Total investments                          18,680   17,212             85.4%   
Cash and other net                         2,941    2,941              14.6%   
current assets                                                                 
Net assets                                 21,621   20,153             100.0%  

* Shares in MediGene AG were received by Quester VCT 5 plc on MediGene's
purchase of Avidex Limited on 29 September 2006.



                                               Note 2006          2005         
                                                    £'000         £'000        
Loss on investments at fair value             2     (206)         (303)        
through profit or loss                                                         
Income                                        3     292           408          
Investment management fee                     4     (540)         (534)        
Other expenses                                5     (297)         (363)        
Loss on ordinary activities                         (751)         (792)        
Tax on ordinary activities                    7     -             -            
Loss on ordinary activities after                   (751)         (792)        
Basic earnings per share                      9     (3.1)p        (3.2)p       

There are no gains and losses for the year other than those passing through the
profit and loss account of the Company.



                                             Note         2006             2005
                                                         £'000            £'000
Reported loss on ordinary activities before               (751)           (792)        
Realisation of prior years' net unrealised                 208             2            
gains on investments                                                           
Adjustment for unrealised loss on               2          332             849          
revaluation of investments                                                     
Historical cost (loss)/profit on ordinary                 (211)            59           
activities for the period                                                      

All items in the above statements derive from continuing operations.

The Company has only one class of business and derives its income from
investments made in shares and securities and from bank deposits.


                                                    2006                   2005
                                           Note     £'000                 £'000
Fixed assets                                                                   
Investments at fair value through                   17,212               15,026
profit or loss                                                                 
Current assets                                                                 
Debtors                                             278                     179
Cash at bank                                        2,847                 6,776
                                                    3,125                 6,955
Creditors: amounts falling due within               (138)                 (175)
one year                                                                       
Net current assets                                  2,987                 6,780
Creditors: amounts falling due after                (46)                   (46)
more than one year                                                             
Net assets                                          20,153               21,760
Capital and reserves                                                           
Called-up equity share capital                      237                     246
Capital redemption reserve                          15                        6
Share premium account                               5,982                 5,966
Special reserve                                     14,986               15,643
Fair value reserve                                  (1,468)               (928)
Profit and loss account                             401                     827
Total equity shareholders' funds                    20,153               21,760
Net asset value per share                   10      84.9p                 88.6p



                                               2006           2005        
                                               £'000          £'000       
Cash outflow from operating activities         (623)          (450)       
Financial investment                                                      
Purchase of venture capital investments        (3,856)        (3,904)     
Purchase of listed equities and fixed interest (2,433)        (6,781)     
Sale/redemption of venture capital investments 200            1,219       
Sale/redemption of listed equity and fixed     3,639          6,671       
interest investments                                                      
Total net financial investment                 (2,450)        (2,795)     
Equity dividends paid                          (246)          -           
Management of liquid resources                                            
Purchase of treasury deposits                  280            (280)       
Issue of ordinary shares net of costs pursuant 2              985         
to the offers for subscription made during                                
Issue of shares under the terms of the         14             -           
dividend reinvestment scheme                                              
Buy-bank of ordinary shares                    (626)          (337)       
Total financing                                (610)          648         
Decrease in cash for the period                (3,649)        (2,877)     
Reconciliation of net cash flow to movement                               
in net funds                                                              
Decrease in cash for the period                (3,649)        (2,877)     
Cash used to increase liquid resources         (280)          280         
Net funds at the start of the period           6,776          9,373       
Net funds at the end of the period             2,847          6,776       



                  Share    Capital   Share Special  Capital    Fair  Profit  Total
                capital redemption premium reserve  reserve   value     and  £'000
                  £'000  reserve £ account   £'000 realised reserve    loss       
                              '000   £'000            £'000   £'000 account       
At 1 January        246          6   5,966  15,643      973   (928)   (146) 21,760
Effect of             -          -       -       -    (973)       -     973      -
company status                                                                    
At 1 January        246          6   5,966  15,643        -   (928)     827 21,760
2006 (Restated)                                                                   
Shares issued         -          -      14       -        -       -       -     14
under the                                                                         
Adjustment to         -          -       2       -        -       -       -      2
costs in                                                                          
relation to                                                                       
shares issued                                                                     
in prior years                                                                    
Shares              (9)          9       -   (626)        -       -       -  (626)
purchased for                                                                     
Realisation of        -          -       -       -        -   (208)     208      -
prior years'                                                                      
net unrealised                                                                    
gains on                                                                          
Transfer from         -          -       -    (31)        -       -      31      -
Special Reserve                                                                   
to Profit and                                                                     
Loss account                                                                      
Transfer of net       -          -       -       -        -   (332)     332      -
unrealised loss                                                                   
on revaluation                                                                    
of investment                                                                     
to Fair Value                                                                     
Loss for the          -          -       -       -        -       -   (751)  (751)
Interim               -          -       -       -        -       -   (246)  (246)
dividend paid                                                                     
At 31 December      237         15   5,982  14,986        - (1,468)     401 20,153


 1. Revocation of investment company status
As a result of the Directors' decision to enable dividends from capital profits
to be paid to shareholders, the Company revoked its investment company status,
as defined under Section 266(3) of the Companies Act 1985, on 14 March 2006.

Consequently, the financial statements have been prepared to include a
statutory profit and loss account in accordance with Schedule 4 of the
Companies Act 1985 and Financial Reporting Standard 3 (Reporting Financial

In the balance sheet, the opening revenue reserve, which was showing a loss of
£146,000, and the opening credit balance of the realised capital reserve of £
973,000 have been transferred to the profit and loss account to create an
opening balance of £827,000. The revaluation reserve records revaluation
amounts previously included in the unrealised capital reserve.

2. Loss on investments at fair value through profit or loss

                                                      2006          2005       
                                                      £'000         £'000      
Realised net gains on disposal                        126           953        
Write-off of investments                              -             (407)      
Net unrealised loss on revaluation of investments     (332)         (849)      
                                                      (206)         (303)      

3. Income

                                                    2006            2005       
                                                    £'000           £'000      
Dividend income                                                                
Listed companies                                    130             112        
Interest receivable                                                            
Listed fixed interest securities                    113             217        
Loans to unquoted companies                         -               8          
Bank deposits                                       49              71         
                                                    292             408        

 4. Investment management fee
Quester Capital Management Limited ("QCML") provides investment management
services to the Company under an agreement dated 3 December 2001, as amended by
a supplemental agreement dated 23 December 2004.

QCML is a wholly owned subsidiary of Querist Limited, a company in which APG
Holmes and JA Spooner are beneficial shareholders. APG Holmes and JA Spooner
are executive directors of QCML.

A charge of £540,000 (2005: £534,000) in respect of the management fee payable
to QCML was made during the year together with VAT of £77,000 (2005: £74,000).
The fee, which is calculated quarterly and is payable in advance, was levied at
a rate of 2.5% (2005: 2.5%) on the Company's net assets during the financial
year ended 31 December 2006. Following the changes resulting from the
supplemental agreement referred to above, this charge is subject to a cap to
ensure that the Company's running costs do not exceed 3.5% of the closing net
asset value. No such cap was required for the year ended 31 December 2006
(2005: management fee reduced by £14,000).

The Manager's appointment is for a fixed term which shall expire on the seventh
anniversary of the commencement of the Fund and shall continue until terminated
by either party subject to a notice period. If such notice is given on or after
the seventh anniversary of the commencement of the Fund, the notice period
shall be the longer of (i) twelve months and (ii) the period from the date on
which notice is given to the tenth anniversary of the commencement of the Fund.
Thereafter the notice period shall be twelve months.

QCML provides administrative and secretarial services to the Company for which
it was entitled to a fee of £56,000 for the year ended 31 December 2006 (2005:
£55,000). This fee is linked to the movement in the RPI and is included in
other expenses (note 5).

The management fee payable to Newton Investment Management Limited, to the
extent that it is not covered by transaction fees payable by the Company, will
be met by QCML out of the above fee.

 5. Other expenses
                                                   2006            2005        
                                                   £'000           £'000       
Administration and secretarial services            56              55          
Directors' remuneration (note 6)                   39              39          
Auditor's remuneration                                                         
Fees payable to the Company's auditor for the      14              14          
audit of the annual financial statements                                       
Fees payable to the Company's auditor and its      6               10          
associates for other services relating to taxation                             
Legal and professional expenses                    12              13          
Insurance                                          15              25          
UKLA, LSE and registrar's fees                     16              19          
Interest expense                                   2               2           
Transaction costs                                  9               20          
Other expenses                                     14              53          
Irrecoverable VAT                                  114             113         
                                                   297             363         

 6. Directors' remuneration
                                                   2006            2005        
                                                   £'000           £'000       
Fees paid to directors                             12              12          
Amounts paid to third parties, excluding VAT, in   27              27          
consideration for the services of directors                                    
                                                   39              39          

 7. Tax on ordinary activities
                                                   2006            2005        
                                                   £'000           £'000       
Corporation tax                                    -               -           
Reconciliation of loss on ordinary activities to                               
Loss on ordinary activities before tax             (751)           (792)       
Tax on Loss on ordinary activities at standard UK  225             238         
corporation tax rate of 30% (2005: 30%)                                        
Effects of:                                                                    
Loss on investments                                (61)            (91)        
Loss on operating activities                       (164)           (147)       
Corporation tax payable                            -               -           

 8. Dividends paid
                                                   2006            2005        
                                                   £'000           £'000       
Interim dividend: 1p per share paid 15 May 2006    246             -           

The directors have resolved to pay an interim dividend of 1p per share in
respect of the year ending 31 December 2007, associated record date on 2 March
2007 and payable on 28 March 2007.

 9. Earnings per share
The loss per share of 3.1p (2005: loss 3.2p) is based on the loss on ordinary
activities after tax of £751,000 (2005: loss £792,000) and on ordinary shares
of 24,218,576 (2005: 24,571,235), being the weighted average number of ordinary
shares in issue during the year.

10. Net asset value
The net asset value per share as at 31 December 2006 of 84.9p (2005: 88.6p) is
based on net assets of £20,153,000 (2005: £21,760,000) divided by the
23,727,722 (2005: 24,556,227) ordinary shares in issue at that date.

11. Financial information
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 22 February 2007. It is not the Company's statutory
accounts. The statutory accounts for the financial year ended 31 December 2005
have been delivered to the Registrar of Companies and received an audit report
which was unqualified, did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying the report, and
did not contain statements under section 237(2) and (3) of the Companies Act
1985. The statutory accounts for the financial year ended 31 December 2006 have
not yet been approved, audited or filed.

A copy of the Company's statutory accounts will be submitted to the UK Listing
Authority, and will shortly be available for inspection at the UK Listing
Authority's Document Viewing Facility, which is situated at:

Financial Services Authority

25 The North Colonnade

Canary Wharf


E14 5HS

Copies of the full financial statements for the period ended 31 December 2006
are expected to be posted to shareholders on 26 February 2007 and will be
available to the public at the registered office of the Company at 29 Queen
Anne's Gate, London, SW1H 9BU.