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Invesco Inc Grth Tst (IVI)

  Print      Mail a friend       Annual reports

Tuesday 21 June, 2011

Invesco Inc Grth Tst

Final Results

                        Invesco Income Growth Trust plc                        

                     Annual Financial Report Announcement                      

                       for the Year Ended 31 March 2011                        


Performance Statistics                         At         At           
                                         31 March   31 March          %
                                             2011       2010     change
Net asset value per ordinary share:                                    
- per Balance Sheet                        208.0p     196.1p       +6.1
- after deducting proposed dividends       204.7p     196.1p       +4.4
Mid-market price per ordinary share        191.3p     174.0p       +9.9
Discount per ordinary share                  8.0%      11.3%           
Gross gearing                               10.3%      12.5%           
Net gearing                                  7.9%       9.9%           

                                              Year       Year          
                                             Ended      Ended          
                                          31 March   31 March          
                                              2011       2010          
Total Return                                                           
(includes net dividends reinvested)                                    
Net asset value per ordinary share           +8.0%     +54.5%          
FTSE All-Share Index                         +8.7%     +52.3%          
Source: Thomson Reuters                                                
Revenue (including VAT recovery) and                                   
Net revenue after tax (£'000)                4,538      4,703      -3.5
Revenue return per ordinary share             7.8p       8.0p      -2.5
- first interim                              1.90p      1.85p          
- second interim                             1.90p      1.85p          
- third interim                              1.90p      1.85p          
- final (2010: fourth interim)               3.30p      3.30p          
                                             9.00p      8.85p      +1.7
Total Expense Ratio                           1.0%       1.1%          



During the 12 months to 31 March 2011, the total return (comprising the
movement in the net asset value `NAV' plus net dividends) from the Company was
8.0%, compared to an 8.7% return from the FTSE All-Share Index. After the
strong equity market rally of the previous year, last year encompassed
considerable volatility and the Company performed creditably in closely
following the overall rise of the FTSE All-Share Index.

Returns to shareholders over the year were further enhanced by a narrowing of
the discount; during the period, the mid-market price per share rose by 9.9% to
191.3p as the discount to NAV narrowed from 11.3% to 8.0%. The Investment
Manager's Report that follows gives a more detailed account of the period under
review, together with a commentary on the investment and portfolio strategy.


The Board continues to monitor the Company's level of gearing which, when
prudently used, should enhance the returns to shareholders. As at 31 March
2011, the Company had gross gearing of 10.3% (2010: 12.5%), provided by a bank
overdraft of £12.6m (2010: £14.3m). The level of gearing fell over the year,
reflecting the rise in the value of the assets and lower utilisation of the
borrowing facility as explained in the Investment Manager's Report.

Board of Directors

I am pleased to report that Davina Curling was appointed as a Non-Executive
Director of the Company with effect from 1 March 2011. Davina has over 20 years
experience of investment management, which is set out in her biography on page
10 of the annual report. In accordance with the Company's Articles of
Association, Davina will stand for election at this year's Annual General

Revenue and Dividends

Earnings per share have fallen slightly to 7.8p per share from 8.0p, but last
year's figure benefited from the one-off recovery of VAT and from unusually
high underwriting income. Dividends were reduced by some companies in the
portfolio, most notably BP, but these have been offset by good growth in some
of the more defensive shares. The Company has built up significant revenue
reserves in preparation for tougher times such as those experienced in the last
two years. By carefully using these reserves, the Company should be able to
fulfil its dividend growth objectives over the long term despite temporary
pressure on the portfolio's dividend income. It is likely this coming year that
a proportion of the reserves will again be used to contribute to the dividend
payment to shareholders.

We are pleased to recommend a final dividend of 3.3p per share which, together
with aggregate interim dividends paid of 5.7p, gives a total dividend per share
for the year of 9.0p (2010: 8.85p). If approved by shareholders, the final
dividend will be paid on 5 August 2011 to shareholders on the register on 8
July 2011. Over the last ten years the Company has grown its dividends at a
compound rate of 7.9% per annum, compared with annualised inflation (as
measured by the RPI index) of 3.0%.

Corporate Governance

The new UK Code of Corporate Governance, which succeeds the Combined Code, was
published in June 2010 and applies to accounting periods beginning on or after
29 June 2010. In September 2010, The Financial Reporting Council endorsed the
new AIC Code of Corporate Governance, which had been updated to reflect the
changes made to the UK Code of Corporate Governance. Your Board intends to
comply with the provisions of the new AIC Code of Corporate Governance with
effect from 1 April 2011, save in respect of matters which will be explained
within the 2012 annual financial report.

Annual General Meeting (`AGM')

At the AGM there are four items of Special Business to be proposed:-

Share Issuance

1. Your Directors are asking for the usual authority to issue up to an
aggregate nominal amount of £4,879,294 (a third of the Company's issued share
capital as at 20 June 2011) in new ordinary shares. This will allow Directors
to issue shares within the prescribed limits should any favourable
opportunities arise to the advantage of shareholders. This authority will
expire at the AGM in 2012.

2. Your Directors are also asking for the usual authority to issue new ordinary
shares for cash pursuant to a rights issue, or otherwise than in accordance
with a rights issue of up to an aggregate nominal amount of £1,463,788 (10% of
the Company's issued share capital as at 20 June 2011), of new ordinary shares
disapplying pre-emption rights. This will allow shares to be issued to new
shareholders without having to be offered to existing shareholders first, thus
broadening the shareholder base of the Company. This authority will not be
exercised at a price below NAV so that the interests of existing shareholders
are not diluted and will expire at the AGM in 2012.

Share Buy Backs

3. Your Directors are seeking to renew the authority to buy back up to
8,776,874 shares (14.99% of the Company's issued share capital as at 20 June
2011), subject to the restrictions referred to in the notice of the AGM. This
authority will expire at the AGM in 2012. Your Directors are proposing that
shares bought back by the Company either be cancelled or, alternatively, be
held as treasury shares with a view to their resale, if appropriate, or later
cancellation. Any resale of treasury shares will only take place on terms that
are in the best interests of shareholders.

Notice Period for General Meetings

4. In accordance with the EU Shareholder Rights Directive the notice period for
general meetings of companies must be not less than 21 days unless certain
conditions are met in which case it may be 14 days' notice. A shareholders'
resolution is required to ensure that the Company's general meetings (other
than AGMs) may be held on 14 clear days' notice. Accordingly, your Directors
are proposing that the period of notice for general meetings of the Company
(other than AGMs) shall be not less than 14 clear days' notice. It is intended
that this flexibility will be used only for non-routine business and where it
is in the interests of shareholders as a whole.

Your Directors have carefully considered all the resolutions proposed in the
Notice of the AGM and, in their opinion, consider them all to be in the best
interests of shareholders as a whole. Your Directors therefore recommend that
shareholders vote in favour of each resolution. The AGM of the Company will be
held at the offices of Invesco Asset Management Limited on 4 August 2011 at
11.30 am. I do hope that as many shareholders as possible will attend. This
will be an opportunity not only to meet the Directors but also to hear the
views of Ciaran Mallon, who is the Investment Manager at Invesco Perpetual with
the day-to-day responsibility for managing the Company's portfolio.

John McLachlan


20 June 2011


Market Review and Portfolio Strategy

After a strong performance in the previous year in both relative and absolute
terms, the Company consolidated its performance for the 12 months ending 31
March 2011, a period which encompassed considerable market volatility. The net
asset value (`NAV') rose by 8.0%, compared to an 8.7% gain in the benchmark
FTSE All-Share Index (both figures include reinvested income).

Following its very strong rise in 2009, the UK stock market marked time for
much of the year under review. The first half of the year saw the positive
signals of mostly upbeat corporate earnings largely ignored by investors, who
focused instead on signs of slowing economic growth domestically and fretted
over sovereign debt worries in the peripheral Eurozone. This was further
compounded as the full implications of the BP oil spillage in the Gulf of
Mexico began to unfold.

However, as 2010 drew to a close the market made almost uninterrupted progress,
spurred on by improving economic data and further monetary and fiscal stimulus
in the US. 2011 started more quietly for UK equities, with occasional bouts of
optimism negated by events on the international stage and concerns over turmoil
in the Middle East, a spiralling oil price and the impact of the earthquake in

My increasingly cautious outlook for equity markets this time last year,
following the stock market's rally, meant that portfolio net gearing had been
reduced to 10%. This was reduced further to 6% at the half year stage. Towards
the end of the financial year I took advantage of stock market volatility and
share price weakness to make some investments for the Company, taking the
gearing up to 8%.

The Company's modest underperformance of the benchmark index came despite good
performances by some individual investments; most notably Royal Dutch Shell, BT
Group, Vodafone, Croda and British American Tobacco, but also AMEC, GKN,
Filtrona, Euromoney, Nichols, Wolseley and Legal & General.

A negative impact on performance came from the portfolio's overweight stance in
three defensive sectors; food retail, pharmaceuticals and tobacco. The focus by
the stock market on those companies likely to benefit from the benign monetary
and fiscal environment meant that the shares of these less cyclical companies
were largely ignored.

The performance was further hindered by having little exposure to the mining
sector, which rose by over 50% in value during the final quarter of 2010, and
some disappointing individual performances from companies including Yell, HMV,
Xchanging, BP and Barclays. The negative impact of BP was, however, mitigated
in relative performance terms by the portfolio's underweight position in the
company relative to the FTSE All-Share Index.

As far as portfolio activity is concerned, I have sought to further improve the
quality of the holdings in the portfolio. I reassessed the holdings in the
retail sector, seeking companies with strong balance sheets, profitability and
market positions, and able to see the internet as an opportunity rather than a
threat to the business. Accordingly, I purchased a holding in the UK's second
largest clothing retailer, Next, and added to the investment in niche mail
order business, N Brown. I sold the holdings in both Dixons Retail and HMV,
retailers for whom I felt the challenges facing the companies were likely to
prove hard to overcome in an increasingly difficult consumer environment.

Within the leisure sector, I sold William Hill and purchased fellow gaming
company Ladbrokes. The betting business remains strongly cash generative, with
high barriers to entry. Both companies have strong market positions but, of the
two, Ladbrokes looks to have the greater potential to grow its margins, which
currently stand well below those of William Hill.

I made a new investment in industrial conglomerate Smiths. This company has a
high quality and diverse portfolio of businesses, including medical equipment,
along with a strong balance sheet, and the shares look undervalued compared to
the sum of the company's parts.

I took part in the share flotation of fund management group Jupiter. I view the
company as well managed with a clean and straightforward business model with a
strong long term track record. The shares were modestly priced at the time of
the float and have since performed very well.

The position in BP was reduced as the shares rallied from their lows. I
switched the proceeds into Royal Dutch Shell, whose shares were standing on a
similar valuation but which has none of the concerns facing BP. I also took
advantage of the associated weakness in the share price of oil services company
Wood Group, which provides some services to BP, to invest in this quality

I disposed of the holding in services company Xchanging. The company
disappointed investors with its full year results and the absence of a dividend
and did not fit with my aim to improve the quality of the portfolio's holdings.
The same logic applied to the disposal of Rentokil.

I also sold the holding of ITV; the shares had rallied from a low base on the
back of better advertising revenues, but these revenues are likely to remain
cyclical. Other disposals resulted from takeovers of Arriva and Rensburg


The performance of the UK stock market is likely to remain volatile over the
next few months as the second round of Quantitative Easing, by the US monetary
authorities, is wound up. This stimulus has undoubtedly been a contributing
factor behind the strong rise in the stock market since last summer given the
importance of the US economy and the largely international nature of most major
UK companies. A primary beneficiary of this economic stimulus has been the
mining sector. I still believe it is correct for the portfolio to have a zero
weighting in this sector, while the current prices of metals are so divorced
from long term value. Most mining shares produce a very low dividend yield,
thereby making them less attractive to include in a portfolio with an objective
to have an above average yield. It also, I suspect, highlights the lack of
confidence that management of these companies have in current levels of
profitability being sustained.

The UK economy has moved back into growth following the 2009 recession, but the
recovery has not been strong. In contrast, inflation, partly due to higher
taxes and commodity prices, has been persistently above the Bank of England's
target of 2%. This is a very challenging combination. There is a risk that
raising rates to combat inflation will push the economy back into recession.
Alternatively, not raising rates may undermine the credibility of the Bank of
England's ability to control inflation, perhaps weakening the currency or
pushing up Government bond yields. While the majority of large UK company
revenues come from outside the UK, such a backdrop may also contribute to stock
market volatility.

While there are near term challenges for the UK stock market, it has to be
remembered that over the past decade the UK equity market has gone nowhere
while at the same time corporate earnings and dividends have risen strongly. As
a result, valuations have fallen sharply; over the medium term I expect this
value to be reflected in higher share prices, and that patient investors like
us will be rewarded.

Ciaran Mallon

Investment Manager

20 June 2011


at 31 March 2011

UK listed ordinary shares unless otherwise stated

                                                             Value      % of
Holdings  Company                  Activity by sector        £'000 portfolio
298,141   Royal Dutch Shell `B'    Oil & Gas                 6,738       5.1
248,341   British American Tobacco Tobacco                   6,212       4.7
956,462   HSBC                     Banks                     6,131       4.6
308,808   Imperial Tobacco         Tobacco                   5,951       4.5
486,851   GlaxoSmithKline          Pharmaceuticals &         5,789       4.3
195,942   AstraZeneca              Pharmaceuticals &         5,610       4.2
3,125,028 Vodafone                 Mobile                    5,516       4.1
297,350   Scottish & Southern      Electricity               3,747       2.8
863,439   Tesco                    Food & Drug Retailers     3,290       2.5
626,800   Young & Co.'s Brewery    Travel & Leisure          2,915       2.2
Top ten holdings                                            51,899      39.0
1,569,688 BT                       Fixed Line                2,910       2.2
928,864   Resolution               Life Insurance            2,749       2.1
795,507   Centrica                 Gas, Water &              2,588       1.9
2,123,186 Legal & General          Life Insurance            2,444       1.8
534,917   BP                       Oil & Gas                 2,429       1.8
873,802   Barclays (1)             Banks                     2,425       1.8
328,692   Land Securities          Real Estate Investment    2,411       1.8
403,356   National Grid            Gas, Water &              2,396       1.8
404,296   Compass                  Support Services          2,266       1.7
726,108   Filtrona                 Support Services          2,204       1.7

Top twenty holdings                                          76,721    57.6
1,095,666 GKN                      Automobiles & Parts        2,201     1.7
130,529   Croda International      Chemicals                  2,189     1.6
182,420   AMEC                     Oil & Gas                  2,174     1.6
168,336   Intercontinental Hotels  Travel & Leisure           2,151     1.6
126,493   Whitbread                Travel & Leisure           2,087     1.6
384,858   Reed Elsevier            Media                      2,078     1.6
476,859   Aviva(1)                 Life Insurance             2,063     1.5
287,693   Euromoney                Media                      2,005     1.5
457,221   Informa                  Media                      1,904     1.5
255,470   Smith & Nephew           Healthcare Equipment &     1,795     1.3
Top thirty holdings                                          97,368    73.1
278,947   Wood                     Oil & Gas                  1,777     1.3
280,228   Pennon                   Gas, Water &               1,749     1.3
290,873   United Utilities         Gas, Water &               1,720     1.3
85,026    Next                     General Retailers          1,682     1.3
635,257   G4S                      Support Services           1,622     1.2
811,331   MITIE                    Support Services           1,593     1.2
105,711   Severn Trent             Gas, Water &               1,544     1.2
548,021   Morrison (W) Supermarket Food & Drug Retailers      1,512     1.1
595,139   Brown (N)                General Retailers          1,510     1.1
96,873    Admiral                  Non-life Insurance         1,503     1.1
Top forty holdings                                          113,580    85.2
69,606    Wolseley                 Support Services           1,460     1.1
425,301   Northumbrian Water       Gas, Water &               1,413     1.1
487,023   Jupiter Fund Management  Finacial Services          1,398     1.0
107,257   Smiths                   General Industrials        1,390     1.0
182,223   Capita                   Support Services           1,354     1.0
181,000   Bunzl                    Support Services           1,347     1.0
275,675   Nichols                  Beverages                  1,289     1.0
367,057   Balfour Beatty           Construction & Materials   1,261     0.9
367,448   BAE Systems              Aerospace & Defence        1,193     0.9
365,890   International Power      Electricity                1,125     0.8
Top fifty holdings                                          126,810    95.0
271,176   Drax                     Electricity                1,075     0.8
779,422   Ladbrokes                Travel & Leisure           1,030     0.8
379,345   Cobham                   Aerospace & Defence          872     0.7
268,130   Mouchel                  Support Services             250     0.2
3,123,114 Yell                     Media                        208     0.2
Total Equity Holdings (55)                                  130,245    97.7
1,027,000 Friends Provident Fltg   Life Insurance             1,306     1.0
800,000   Barclays Bank(1) Fltg    Banks                      1,037     0.8
800,000   Aviva(1) Fltg 5.902%     Life Insurance               650     0.5
Total Fixed Income Securities (3)                             2,993     2.3
­Total Value of Investments (58)                             133,238   100.0

(1) More than one security type is held in this company.

Related party transactions

Invesco Asset Management Limited (`IAML'), a wholly owned subsidiary of Invesco
Limited, acts as Manager, Company Secretary and Administrator to the Company.
There are no other related party transactions.

Principal Risks and Uncertainties

The principal risk factors relating to the Company can be divided into various

Investment Policy and Process

There is no guarantee that the Investment Policy adopted by the Company will
provide the returns sought by the Company. The Board has established guidelines
to ensure that the Investment Policy of the Company is pursued by the Manager.

Risk management is an integral part of the investment management process. The
Manager effectively controls risk by ensuring that the Company's portfolio is
always appropriately diversified. In-depth and continual analysis of the
fundamentals of all holdings should give the Manager a full understanding of
the financial risks associated with any particular stock.

Market Movements and Portfolio Performance

As at 31 March 2011, all of the Company's investments were traded on the London
Stock Exchange. The principal risk for investors in the Company is of a
significant fall in the markets and/or a prolonged period of decline in the
markets relative to other forms of investment as well as bad performance of
individual portfolio investments.

The prices of these investments are influenced by many factors including
general world (and particularly the UK) economic conditions including interest
rates, inflation, government policies, industry conditions, political and
diplomatic events, tax laws, environmental laws and by the demand from
investors for income.

The Manager strives to maximise the total return from the stocks in which it
invests, but these securities are influenced by market conditions and the Board
acknowledges the external influences on portfolio performance. While the Board
obviously cannot influence market movements, it is vigilant in monitoring and
taking steps to mitigate the effects of falls in markets should they occur. The
performance of the Manager is carefully monitored by the Board, and the
continuation of the Manager's mandate is reviewed each year.

The Board and the Manager maintain an active dialogue with the aim of ensuring
that the market rating of the Company's shares reflects the underlying NAV and
that share repurchase and issuance facilities help the management of this

Past performance of the Company, and all of the investments managed by the
Manager, are not necessarily indicative of future performance.

For a fuller discussion of the economic and market conditions facing the
Company and the current and future performance of the portfolio of the Company,
please see both the Chairman's Statement and Investment Manager's Report.


The market value of a share, as well as being affected by its NAV, also takes
into account its dividend yield and prevailing interest rates. As such, the
market value of a share can fluctuate and may not always reflect its underlying
NAV. The market price of a share may therefore trade at a discount to its NAV.
As at 31 March 2011, a share of the Company traded at a discount of 8.0% (2010:

There can be no guarantee that any appreciation in the value of the Company's
investments will occur and investors may not get back the full value of their
investment. Due to the potential difference between the mid-market price of the
shares and the prices at which they are sold, there is no guarantee that their
realisable value will reflect their market price.

While it is the intention of the Directors to pay dividends to shareholders
quarterly, the ability to do so will depend upon the level of income received
from securities and the timing of receipt of such income by the Company.
Accordingly, the amount of quarterly dividends paid to shareholders may

Any change in the tax or accounting treatment of dividends or other investment
income received by the Company may also affect the level of dividend paid on
the shares in future years.


Whilst the use of borrowings by the Company should enhance the total return on
the shares where the return on the Company's underlying securities is rising
and exceeds the cost of borrowing, it will have the opposite effect where the
underlying return is falling, further reducing the total return on the shares.


The Company is subject to various laws and regulations by virtue of its status
as a public limited company registered under section 833 of the Act, its status
as an investment trust, and its listing on the London Stock Exchange.

A breach of sections 1158-1165 of CTA could lead to the Company being subject
to capital gains tax on the sale of its investments. A serious breach of other
regulatory rules may lead to suspension from the London Stock Exchange, a fine
or a qualified audit report. Other control failures, either by the Manager or
any other of the Company's service providers, may result in operational or
reputational problems, erroneous disclosures or loss of assets through fraud,
as well as breaches of regulations.

The Manager reviews compliance with sections 1158-1165 of CTA and other
financial regulatory requirements on a daily basis. All transactions, income
and expenditure are reported to the Board. The Board regularly considers all
perceived risks and the measures in place to control them. The Board ensures
that satisfactory assurances are received from service providers. The Manager's
Compliance and Internal Audit Officers produce reports regularly for review by
the Company's Audit Committee.

Reliance on Third Party Service Providers

The Company has no employees and the Directors have all been appointed on a
non-executive basis. The Company is therefore reliant upon the performance of
third party service providers for its executive function. In particular, the
Manager performs services which are integral to the operation of the Company.
Failure by any service provider to carry out its obligations to the Company in
accordance with the terms of its appointment could have a materially
detrimental impact on the operation of the Company and could affect the ability
of the Company to successfully pursue its Investment Policy.

The Manager may be exposed to reputational risks. In particular, the Manager
may be exposed to the risk that litigation, misconduct, operational failures,
negative publicity and press speculation, whether or not it is valid, will harm
its reputation. Any damage to the reputation of the Manager could result in
potential counterparties and third parties being unwilling to deal with the
Manager and by extension the Company. This could have an adverse impact on the
ability of the Company to successfully pursue its Investment Policy.

Further details of the risk management policies and procedures as they relate
to the financial assets and liabilities of the Company are detailed in note 18
to the financial statements.


in respect of the preparation of the Annual Financial Report

The Directors are responsible for preparing the annual financial report in
accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each
financial year. Under the law the Directors have elected to prepare financial
statements in accordance with United Kingdom Generally Accepted Accounting
Practice. Under company law, the Directors must not approve the accounts unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and which
enable them to ensure that the financial statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.

Under applicable law and requlations, the Directors are also responsible for
preparing a Directors' Report, a Directors' Remuneration Report and a Corporate
Governance Statement that comply with that law and those regulations.

In so far as each of the Directors is aware:

• there is no relevant audit information of which the Company's Auditor is
unaware; and

• the Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
Auditor is aware of that information.

The Directors of the Company each confirm to the best of their knowledge that:

• the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and

• this annual financial report includes a fair review of the development and
performance of the business and the position of the Company together with a
description of the principal risks and uncertainties that it faces.

Signed on behalf of the Board of Directors

John McLachlan


20 June 2011


for the year ended 31 March

                                     2011                     2010           
                      Notes  Revenue Capital   Total  Revenue Capital   Total
                               £'000   £'000   £'000    £'000   £'000   £'000
Profits on investments             -   5,968   5,968        -  36,247  36,247
at fair value through                                                        
profit or loss                                                               
Income                    2    5,346     291   5,637    5,422       -   5,422
Investment management     3    (429)   (429)   (858)    (401)   (401)   (802)
VAT recoverable on        3        -       -       -       57      58     115
management fees                                                              
Interest on VAT           3        -       -       -       11       -      11
Other expenses                 (298)     (1)   (299)    (279)     (1)   (280)
Net return before              4,619   5,829  10,448    4,810  35,903  40,713
finance costs and                                                            
Finance costs                   (81)    (81)   (162)    (107)   (107)   (214)
Return on ordinary             4,538   5,748  10,286    4,703  35,796  40,499
activities before and                                                        
after tax                                                                    
Return per ordinary       4     7.8p    9.8p   17.6p     8.0p   61.2p   69.2p
share Basic                                                                  

The total column of this statement represents the Company's profit and loss
account. The supplementary revenue and capital columns are presented for
information purposes in accordance with the Statement of Recommended Practice
issued by the Association of Investment Companies. All items in the above
statement derive from continuing operations and the Company has no other gains
or losses and therefore no statement of total recognised gains or losses is
presented. No operations were acquired or discontinued in the year.


for the year ended 31 March

                           Share    Share Redemption  Capital  Revenue        
                         Capital  Premium    Reserve  Reserve  Reserve   Total
                   Notes   £'000    £'000      £'000    £'000    £'000   £'000
At 31 March 2009          14,638   40,021      2,310   18,852    5,494  81,315
Net return on                  -        -          -   35,796    4,703  40,499
Dividends paid       5         -        -          -        -  (6,997) (6,997)
At 31 March 2010          14,638   40,021      2,310   54,648    3,200 114,817
Net return on                  -        -          -    5,748    4,538  10,286
Dividends paid       5         -        -          -        -  (3,336) (3,336)
At 31 March 2011          14,638   40,021      2,310   60,396    4,402 121,767

The accompanying notes are an integral part of these statements.



as at 31 March

                                Notes      2011      2010
                                          £'000     £'000
Fixed assets                                             
Investments at fair value               133,238   128,405
Current assets                                           
Debtors                                   1,252     1,034
Creditors: amounts falling due         (12,723)  (14,622)
within one year                                          
Net current liabilities                (11,471)  (13,588)
Total assets less current               121,767   114,817
Capital and reserves                                     
Called up share capital             6    14,638    14,638
Share premium                            40,021    40,021
Capital redemption reserve                2,310     2,310
Capital reserve                          60,396    54,648
Revenue reserve                           4,402     3,200
Shareholders' funds                     121,767   114,817
Net asset value per ordinary                             
Basic                               7    208.0p    196.1p

These financial statements were approved and authorised for issue by the Board
of Directors on 20 June 2011.

Signed on behalf of the Board of Directors

John McLachlan


The accompanying notes are an integral part of this statement.



for the year ended 31 March

                                           2011      2010
                                          £'000     £'000
Cash flow from operating                  4,494     5,314
Servicing of finance                      (162)     (214)
Net financial investment                    726     2,260
Equity dividends paid                   (3,336)   (6,997)
Cash inflow before management             1,722       363
of liquid resources and                                  
Financing                                     -         -
Increase in cash                          1,722       363


for the year ended 31 March

Increase in cash                          1,722       363
Change in net debt in the year            1,722       363
Net debt at beginning of year          (14,300)  (14,663)
Net debt at end of year                (12,578)  (14,300)

The accompanying notes are an integral part of this statement.

Notes to the financial statements

1. Basis of Preparation

The financial statements have been prepared in accordance with applicable
United Kingdom Accounting Standards and with the Statement of Recommended
Practice (`SORP`) `Financial Statements of Investment Trust Companies and
Venture Capital Trusts', issued by the Association of Investment Companies in
January 2009.

2. Income

                                  2011      2010
                                 £'000     £'000
Income from listed                              
UK dividends                     4,851     4,760
UK unfranked investment            420       422
Overseas income                      5        14
Other income                                    
Deposit interest                     2         -
Underwriting commission             68       226
Total income                     5,346     5,422

A special dividend of £291,000 (2010: nil) has been recognised in capital.

3. Investment management fee

                             2011                      2010          
                   Revenue  Capital   Total  Revenue  Capital   Total
                     £'000    £'000   £'000    £'000    £'000   £'000
Investment             429      429     858      401      401     802
management fee                                                       

The Manager, Invesco Asset Management Limited ('IAML') provides investment
management, company secretarial and administrative services to the Company
under an agreement dated 21 July 1999 and subsequently amended on 21 September
2009. At 31 March 2011, £76,000 (2010: £73,000) was owed in respect of
management fees.

An amount of £115,000 was recognised in the year ended 31 March 2010 in respect
of VAT recovered together with £11,000 of interest therein.

4. Return per ordinary share

The basic revenue, capital and total returns per ordinary share are based on
each return on ordinary shares after tax and on 58,551,530 (2010: 58,551,530)
ordinary shares, being the weighted average number of shares in issue during
the year.

5. Dividends on ordinary shares

Dividends paid and recognised in year:

                                  2011              2010         
                                 Pence    £'000    Pence    £'000
Final paid in respect of             -        -     3.10    1,815
previous year                                                    
First interim paid                1.90    1,112     1.85    1,083
Second interim paid               1.90    1,112     1.85    1,083
Third interim paid                1.90    1,112     1.85    1,083
Fourth interim paid                  -        -     3.30    1,933
                                  5.70    3,336    11.95    6,997

Dividends payable in respect of the year:

                                  2011              2010         
                                 Pence    £'000    Pence    £'000
First interim paid                1.90    1,112     1.85    1,083
Second interim paid               1.90    1,112     1.85    1,083
Third interim paid                1.90    1,112     1.85    1,083
Proposed final (2010: fourth      3.30    1,933     3.30    1,933
interim paid)                                                    
                                  9.00    5,269     8.85    5,182

As reported in the Chairman's Statement, three interim dividends were paid
during the year and the proposed final dividend is subject to approval by
shareholders at the AGM (2010: four interims paid).

6. Share capital

                                 2011                 2010         
                               Number    £'000      Number    £'000
Ordinary shares of 25p    120,000,000   30,000 120,000,000   30,000
Allotted, called-up and                                            
fully paid:                                                        
Ordinary shares of 25p     58,551,530   14,638  58,551,530   14,638

No shares were bought back and cancelled in the year and no shares were held in
treasury at the year end.

7. Net asset value per ordinary share

The net asset value per ordinary share and the net asset values attributable at
the year end were as follows:

                   Net asset   Net assets    Net asset   Net assets
                       value                     value             
                   per share attributable    per share attributable
                        2011         2011         2010         2010
                           p        £'000            p        £'000
Ordinary shares                                                    
- Basic                208.0      121,767        196.1      114,817

Net asset value per ordinary share is based on net assets at the year end and
on 58,551,530 (2010: 58,551,530) ordinary shares, being the number of ordinary
shares in issue at the year end.

This annual financial report announcement is not the Company's statutory
accounts. The statutory accounts for the year ended 31 March 2010 have been
delivered to the Registrar of Companies. The statutory accounts both for the
year ended 31 March 2010 and for the year ended 31 March 2011 received an audit
report which was unqualified and did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying the
report. The statutory accounts for the financial year ended 31 March 2011 have
been approved and audited but have not yet been delivered to the Registrar of

The audited Annual Financial Report will be available to shareholders shortly.
Copies may be obtained during normal business hours from the Company's
Registered Office, 30 Finsbury Square, London, EC2A 1AG or the Company's
website at .

The Annual General Meeting will be held on 4 August 2011 at 11.30 a.m. at 30
Finsbury Square, London, EC2A 1AG.

By order of the Board

Invesco Asset Management Limited

20 June 2011


Andrew Watkins

Tel - 020 7065 4023

Tim Mitchell

Tel - 020 7065 3182

Paul Griggs

Tel - 020 7065 4517