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Sgr & Frdlndr AIM 3 (VICT)

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Friday 18 May, 2007

Sgr & Frdlndr AIM 3

Preliminary Announcement

Singer & Friedlander AIM 3 VCT PLC
18 May 2007

Singer & Friedlander AIM 3 VCT plc

Preliminary Announcement for the year ended 31 January 2007

Performance Summary
                                                                             31 January 2007       31 January 2006

Total net assets                                                                 £44,349,018           £27,515,787

Net asset value per share                                                             93.44p                88.42p

Net dividends for the year (proposed)                                               £949,240                 £0.00

Dividend per ordinary share (proposed for the year)                                    2.00p                 0.00p

Qualifying investments of the current investment portfolio                            80.07%                80.60%

Total dividends paid and recommended to date                                           5.25p                 3.25p

Board Review of the Year


Your Company has enjoyed a successful year. The merger of the three Singer &
Friedlander AIM VCTs was completed in February 2006, enabling us to benefit from
economies of scale. It is pleasing to note our expense ratio is below that
forecast in the merger documents and compares favourably with other VCTs. Our
investment performance improved as the year progressed with this improvement
continuing into our new financial year. Your Directors view the future with
guarded optimism.


During the second half of our financial year the AIM Index increased by 3.6%.
Over the same period your Net Asset Value ('NAV') at 93.44p increased by 11.6%.
For the year as a whole your NAV increased by 5.7% whilst the AIM Index fell by
4.6%. As was reported at the Interim stage the Company had to bear the costs of
the merger during the early part of the year and the subsequent portfolio
restructuring, therefore the Directors consider this outcome to be more than

Since launch in February 2001 shareholders in the Singer & Friedlander AIM 3 VCT
have seen an increase in NAV of 1.8% (after allowing for dividend payments to
date of 3.25 pence) compared to a fall of 16.8% in the AIM Index.

Shareholders who invested in the 'C' Share issue of Singer & Friedlander AIM 3
VCT in April 2005, adjusted for the ratio used upon conversion in December 2005,
have seen an increase in their effective NAV of 11.8%. During the same period
the AIM Index has risen by 0.8%.

Shareholders who originally invested in the Singer & Friedlander AIM 2 VCT in
April 2000 (after allowing for dividend payments of 5.25 pence and the relevant
merger conversion ratio) have seen an effective decline in NAV of 21.9%. Over
the same period the AIM Index has fallen by 44.1%.

Shareholders in the Singer & Friedlander AIM VCT, launched in late 1998, after
accounting for dividends totalling 32.4 pence and following conversion, have
seen a decline of 24.6%.

The results for the year include a gain of £1,017,855 attributable to the
merger.  This gain derives from accounting standards and arises from the fact
that the shares of the Company, Singer & Friedlander AIM plc and Singer and
Friedlander AIM 2 plc were trading at discounts to attributable net asset value
at the time of the merger.  As the portfolios of AIM and AIM 2 have now been
subsumed within the AIM 3 portfolio this discount has been released in the
Company's financial statements.  In order to understand the underlying portfolio
investment performance, this gain should be deducted from the results of the
year of the Company.

This gain has no impact on the performance of the Company as recorded and
described above in terms of the increase in net asset value per share.

The above returns do not take into account any tax relief which may have been
received by shareholders.

Portfolio commentary and developments

The merged portfolio continues to comply with the HM Revenue & Customs' criteria
for VCT qualification and now consists of 73 investments, 68 of these are quoted
on AIM, 1 fully listed and 4 are unquoted. Unquoted investments represent 7.17%
of the portfolio whilst fixed interest investments and cash account for 14.83%.
Following the merger the combined portfolio contained nearly 120 investments.
The Manager has subsequently reduced that number to a more manageable level.
Since our year end a number of our investee companies have received take-over
approaches. We expect some of these take-overs to be completed resulting in an
increase in our liquidity. Our Manager will then proactively seek new investment

Newsflow from most of our investee companies continues to improve supporting a
gradual recovery in share prices.

During the year we have seen particularly good share price performance from the
AIM quoted Tanfield Group, Oasis Healthcare, Blooms of Bressingham Holdings,
Synergy Healthcare, Music Copyright Solutions and The Clapham House Group. We
have also been able to increase the valuations of the unquoted investments
Flexbenefits and Lilestone Holdings following further fundraisings above the
level of our previous carrying valuations.

Merger Completion and Running Costs

The merger of the three Singer & Friedlander AIM VCTs was completed in February
2006. Whilst this exercise incurred considerable costs which are reflected in
these results, the benefits have lately begun to flow through. We have made
progress in reducing the ongoing costs of the Company, with the annualised
running costs being 2.4% of the value of the fund (excluding option costs) and
the total annualised running costs (including option costs) of 2.8%.  The
expense ratio is below that forecast in the merger documents.


During the second half of the year the company revoked its investment company
status and is therefore in a position to distribute its capital profits as part
of the year end dividend. The Board is recommending a final dividend of 2.0
pence per share payable on 3 July 2007 to shareholders on the register as at 8
June 2007.

Share Repurchases

During the year we repurchased 4,936,584 ordinary shares representing 9.4% of
our post-merger issued share capital. As mentioned in the Interim Report, the
Company had been in an extended 'closed period' due to the merger and this led
to an increase in demand for share buy-backs. These shares were bought at a 10%
discount to the NAV prevailing at the time thereby enhancing the NAV for
remaining shareholders. The Company will continue to repurchase its own shares
from time to time as appropriate and within the powers granted at the Annual
General Meeting. These transactions are handled by our stockbroker, Teather &


Your Board believes that the benefits of the merger have begun to accrue as
indicated by the improvement in the NAV and the reduction in the expense ratio.
Since the year end the NAV, excluding current period revenue, has further
improved to 99.27 pence as at 10 May 2007. As ever, making economic forecasts is
difficult and considerable risks to financial markets remain which could result
in further stock market volatility. However, your Manager is confident in the
underlying quality of the portfolio and believes there is potential for further
gains to be made in the foreseeable future.

Christopher Moorsom (Chairman)
James Hambro
Mike Killingley
David Page
Dominic Wheatley

Singer & Friedlander AIM 3 VCT plc

18 May 2007

AIM Quoted      Sector              Nature of business             Purchase  Valuation   Percentage   Percentage
Companies                                                       cost             at 31       of net   of company
                                                                               January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

1st Dental      Healthcare          Manufacture of dental           450,000    273,000         0.62         4.13
Laboratories    equipment &         appliances
Aero Inventory  Aerospace & defence Procurement and inventory     1,289,924  1,667,325         3.76         1.81
                                    management for the
                                    aerospace industry
Aquilo          Support services    Specialist insurance claims     397,282     84,138         0.19         8.78
                                    management and advisory
Asfare Group    Industrial          Supplying specialist            370,835    549,399         1.24        16.67
                engineering         equipment in support of the
                                    Homeland Security market
ATA Group       Support services    Services encompassing           220,375    286,219         0.65         7.72
                                    assessment services in the
                                    contingency database and
                                    advertising selection
                                    recruitment businesses
Autoclenz       Support services    Car valeting and vehicle        131,440    106,934         0.24         3.40
Holdings                            preparation services
Avingtrans      Industrial          Provider of precision           443,333    787,499         1.78         4.93
                engineering         engineering components and
BBI Holdings    Pharmaceuticals &   Development and manufacture     239,708    684,698         1.54         3.24
                biotechnology       of non invasive lateral
                                    flow tests
Blooms of       General retailers   Operation of retail garden      102,033    145,839         0.33         5.08
Bressingham                         centre
Bright Things   Leisure goods       Development and commercial      452,500     97,543         0.22        12.06
                                    exploitation of an
                                    educational childrens games
                                    platform associated
Camaxys         Software & computer Provision of health and         254,825     23,874         0.05        15.83
(suspended)     services            safety software supply,
                                    consultancy and maintenance
Cello Group     Media               Core activities of market       257,625    287,438         0.65         1.45
                                    research, brand advertising
                                    and direct marketing and
                                    database management
Charteris       Software & computer Provide consultancy              84,500     40,950         0.09         0.60
                services            services which help clients
                                    improve business
                                    performance and create new
                                    business opportunities
                                    through information
Chromogenex     Healthcare          Design, manufacture and          27,750     24,747         0.06         1.25
                equipment &         distribute aesthetic and
                services            therapeutic laser and
                                    aesthetic light based
                                    technology devices
Clerkenwell     General financial   Investing company formed to     190,489    169,296         0.38         6.18
Ventures                            acquire businesses in the
                                    leisure sector
CMS Webview     Media               Provision of data               401,674     60,211         0.14         5.02
                                    dissemination facilities
                                    and software

Investment Portfolio Summary

AIM Quoted      Sector              Nature of business           Purchase   Valuation Percentage of Percentage of
Companies                                                     cost              at 31    net assets       company
                                                                              January                  managed by
                                                                                 2007                  Investment
                                                                        £           £             %             %

Conder          Industrial          Provision of data             385,241     166,912          0.38          6.24
Environmental   engineering         dissemination facilities
                                    and software
Corpora         Software & computer Create, sell and support      945,280     428,732          0.97          5.16
                services            knowledge discovery
Eagle Eye       Industrial          A vehicle communication         3,830       3,828          0.01          0.12
Telematics      transportation      gateway which offers
                                    fleet/asset management
                                    and driver/vehicle
                                    security capabilities
First Artist    Media               Management and                704,265     540,375          1.22          4.53
Corporation                         representation business
                                    for personalities in the
                                    football and television
Fountains       Support services    An environmental services     155,852     143,136          0.32          4.22
                                    business undertaking
                                    vegetation management and
                                    forest management
Fujin           Software & computer Consultancy, design,          217,758     121,417          0.27          1.07
Technology      services            supply, implementation
                                    and ongoing support of IT
Fulcrum Pharma  Pharmaceuticals &   Offering global virtual       279,532     115,435          0.26          2.12
                biotechnology       drug development and
                                    strategic outsourcing
                                    services to the
                                    pharmaceutical industry
Glisten         Food producers      The manufacture and sale      220,000   1,097,938          2.48          3.82
                                    of confectionery,
                                    ingredients and snacking
                                    products to retailers,
                                    manufacturers, organic
                                    market and food service
Huveaux         Media               The creation, development     595,868   1,035,000          2.33          3.13
                                    and distribution of
                                    information to business
                                    and professional markets
ID Data         Electronic &        Provision of secure           939,736     487,776          1.10          5.47
                electrical          card-based transaction
                equipment           systems and services
                                    using a range of smart
                                    and magnetic card
ILX Group       Support services    Providers of financial        374,960     542,793          1.22          5.21
                                    training through
                                    traditional courses,
                                    paper-based training and
                                    innovative electronic
                                    based training
Imagesound      Media               Suppliers of in-store          92,188     243,750          0.55          2.38
                                    music, radio and TV
                                    services to the branded
                                    retail and leisure
Imprint         Support services    Provision of executive        360,062   1,055,000          2.38          1.53
                                    search and selection
Individual      Travel & leisure    Operation of large            143,145     258,685          0.58          0.49
Restaurant                          stylish brassserie type
Company                             restaurants
Intelligent     Software & computer Provision of online           116,123     358,428          0.81         10.18
Environments    services            software products for the
Group                               credit card and
                                    investment markets
Inter Link      Food producers      Manufacture and sale of       629,000     337,663          0.76          1.06
Foods                               cakes and pastry products
Just Car        General retailers   Owns car repair centres        95,865     148,731          0.34          2.12
Clinics Group

AIM Quoted      Sector              Nature of business           Purchase   Valuation Percentage of Percentage of
Companies                                                     cost              at 31    net assets       company
                                                                              January                  managed by
                                                                                 2007                  Investment
                                                                        £           £             %             %

Knowledge       Media               Development and sale of       191,362     159,575          0.36          6.33
Technology                          proprietary software and
Solutions                           publishing financial
                                    information service
                                    across the Internet
Lo-Q            Travel & leisure    Development and               760,000     188,100          0.42          5.62
                                    application of virtual
                                    queuing technologies
Medal           Media               Acquiring and exploiting       51,170      41,388          0.09          8.24
Entertainment &                     intellectual property
Media                               rights in the areas of
                                    TV, video and DVD
Mediwatch       Healthcare          Development and supply of   1,146,144   1,167,939          2.63          8.87
                equipment &         primary care products
                services            used in the diagnosis of
                                    urological disorders and
                                    prostate cancer detection
Music Copyright Media               Music copyright               311,250     755,239          1.70          3.73
Solutions                           administration and the
                                    exploitation of musical
Neutrahealth    Food producers      Sale and distribution of      279,470     273,741          0.62          6.01
                                    nutraceutical products
Oasis           Healthcare          Operation of dental           914,525   1,331,431          3.00          5.92
Healthcare      equipment &         practices
Petards Group   Support services    Development and provision      82,860     104,846          0.24          1.74
                                    of security systems and
                                    monitoring equipment,
                                    CCTV, visual alarm
                                    systems, mobile data
Pixology        Software & computer Development and sale of       399,000      71,963          0.16          1.41
                services            software and services to
                                    facilitate the printing
                                    of digital photographs
Playgolf        Travel & leisure    Golf course and driving       255,000     123,735          0.28          2.65
Holdings                            range management
PM Group        Support services    Design, manufacture and       524,232     614,662          1.39          4.15
                                    service of vehicle
                                    mounted weighing systems
Prezzo          Travel & leisure    Restaurant operators          249,814   1,613,125          3.64          2.06
Pubs 'n' Bars   Travel & leisure    Operation of 95 pubs in       281,813     300,265          0.68          5.71
                                    London and the West of
Quadnetics      Support services    Development, design,          341,381     522,108          1.18          1.62
Group                               integration and
                                    management of advanced
                                    surveillance technology
                                    and security networks
Red Squared     Software & computer Provider of complete           57,292      69,887          0.16          3.23
                services            hosting and managed
                                    service solutions for
                                    companies wishing to
                                    outsource their IT
Revenue         General financial   Supply of revenue             297,500     288,125          0.65          0.59
Assurance                           assurance services and
Services                            business enterprise
                                    software and solutions
Smallbone       Household goods     Design, manufacture, sale     293,220     307,627          0.69          2.84
                                    and installation of
                                    fitted kitchens, bedrooms
                                    and bathrooms
Symphony        General industrials Supply of environmental       460,339     331,289          0.75          4.31
Plastic                             polythene products

AIM Quoted      Sector              Nature of business           Purchase   Valuation Percentage of Percentage of
Companies                                                     cost              at 31    net assets       company
                                                                              January                  managed by
                                                                                 2007                  Investment
                                                                        £           £             %             %

Synergy         Healthcare          Provision of healthcare       297,267   1,425,900          3.21          0.67
Healthcare      equipment &         products and services
Tanfield Group  Support services    Engaged in the                585,438   1,620,000          3.65          0.91
                                    engineering and electric
                                    vehicle industries
Tasty           Travel & leisure    Restaurant operator            72,377     130,140          0.29          1.08
The Clapham     Travel & leisure    Operation of restaurants      395,992   1,150,244          2.59          1.56
House Group                         and food delivery outlets
The Food &      Travel & leisure    Restaurant and bar             59,851      97,407          0.22          1.05
Drink Group                         proprietor
The Real Good   Food producers      Manufacturer and supplier     596,112     393,961          0.89          1.01
Food Company                        of prepared foods
Thomson         Media               Provide marketing             729,005     474,199          1.07          1.10
Intermedia                          services via innovative
                                    systems and consultancy
Tikit Group     Software & computer Provision and maintenance     400,000   1,013,043          2.28          2.79
                services            of information technology
                                    products and solutions
Tissue Science  Healthcare          Development of medical        706,267     464,141          1.05          1.71
Laboratories    equipment        &  device products for
                services            surgical implant and
                                    wound management
Torex Retail    Software & computer Independent provider of       694,691     292,220          0.66          0.32
(suspended)     services            point of sale software,
                                    systems and services and
                                    productivity tools
TripleArc       Support services    Provision of print             84,814      94,574          0.21          3.81
                                    management services and
                                    e-procurement solutions
                                    for the print industry
UBC Media Group Media               Provision of audio and        663,754     403,225          0.91          1.29
                                    data services to the
                                    radio industry
Vianet Group    Technology hardware Developed a system which      969,989     752,351          1.70          9.57
                        & equipment facilitates the
                                    collection, management,
                                    processing and control of
                                    data from remote sources
Xpertise Group  Support services    Operates IT training          573,508     213,450          0.48         17.70
                                    centres which can lead to
                                    industry recognised
Zytronic        Electronic &        Manufacture of optical        610,958     558,790          1.26          5.28
                electrical          filters to enhance
                equipment           electronic display
                                                               25,909,393  29,723,399         67.03

All investments are in ordinary shares unless otherwise stated

Fully Listed    Sector              Nature of business             Purchase  Valuation   Percentage   Percentage
Companies                                                       cost             at 31       of net   of company
                                                                               January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

Connaught       Support services    Provision of integrated         421,685    626,326         1.41         0.44
                                    asset management and
                                    compliance services
                                                                    421,685    626,326         1.41

Private         Sector              Nature of business             Purchase  Valuation   Percentage   Percentage
Companies                                                       cost             at 31       of net   of company
                                                                               January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

Flexbenefits    Software & computer Employee benefits and           681,828    757,125         1.71         7.70
                services            financial services
Lilestone       General retailers   Lingerie design and retail      648,175    292,187         0.66         6.63
Holdings   Support services    Healthcare recruitment          352,128    352,128         0.79        11.36
U4EA            Technology hardware Data transfer management        399,126     60,337         0.14         1.49
U4EA            Technology hardware Data transfer management      1,403,995  1,406,995         3.17        11.66
(Preference            & equipment
U4EA Loan Stock Technology hardware Data transfer management        250,000    250,000         0.56         4.72
                       & equipment
                                                                  3,735,252  3,118,772         7.03

All investments are in ordinary shares unless otherwise stated

Other           Sector              Nature of business             Purchase  Valuation   Percentage   Percentage
qualifying                                                      cost             at 31       of net   of company
investments                                                                    January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

Aquilo Loan     Support services    Specialist insurance claims     112,500    112,500         0.25        33.33
Stock                               management and advisory
Xpertise Group  Support services    Operates IT training            200,000    200,000         0.45       100.00
Loan Stock                          centres which can lead to
                                    industry recognised
                                                                    312,500    312,500         0.70

Other fixed interest securities                                  Purchase   Valuation   Percentage   Percentage
                                                              cost              at 31       of net   of company
                                                                              January       assets   managed by
                                                                                 2007                Investment
                                                                        £           £            %            %
Debentures and loan stocks
Financial Objects VAR RTE Unsecured Loan Notes 2007                 9,304      10,150         0.02         2.73
                                                                    9,304      10,150         0.02

UK Government loans
Treasury 4.75% Stock 7/6/2010                                     498,891     490,204         1.11         0.02
Treasury 4.5% Stock 7/3/2007                                    3,547,095   3,546,567         8.00         0.11
Treasury 4% Stock 7/3/2009                                      1,832,300   1,797,009         4.05         0.09
                                                                5,878,286   5,833,780        13.16

Other            Sector              Nature of business            Purchase  Valuation   Percentage   Percentage
non-qualifying                                                   cost            at 31       of net   of company
investments                                                                    January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

Aquilo           Support services    Specialist insurance claims  1,340,441    283,886         0.64         8.78
                                     management and advisory
Blooms of        General retailers   Operation of retail garden     941,180  1,345,255         3.03         5.08
Bressingham                          centre
Cardpoint        Support services    Owns and/or operates           645,994  1,100,770         2.48         1.09
                                     independent automated
                                     teller machines (ATMs) and
                                     mobile phone e-topup
Formation Group  Media               Provision of management and    519,751    642,246         1.45         2.70
                                     marketing services in the
                                     football sector, and the
                                     provision of worldwide
                                     hospitality and event
Medal            Media               Acquiring and exploiting       602,509    487,326         1.10         8.24
Entertainment &                      intellectual property
Media                                rights in the areas of TV,
                                     video and DVD
The Food & Drink Travel & leisure    Restaurant and bar              18,662     30,372         0.07         1.05
Group                                proprietor
                                                                  4,068,537  3,889,855         8.77

Investments     Sector               Nature of business            Purchase  Valuation   Percentage   Percentage
held at nil                                                      cost            at 31       of net   of company
valuation*                                                                     January       assets   managed by
                                                                                  2007                Investment
                                                                          £          £            %            %

Adval Group     Support services     On-line training company       287,265          -            -            -
Award           Media                Suppliers of promotional       209,990          -            -            -
International                        goods and services,
Holdings                             corporate hospitality,
                                     event management and
                                     corporate travel
Coinmaster      Travel & leisure     Production of electronic       350,000          -            -            -
Gaming                               gaming machines
Disperse Group  Personal goods       The research, design           315,104          -            -            -
                                     development formulation and
                                     manufacture of high quality
                                     health and beauty products
Flying Scotsman Travel & leisure     Owner of a steam locomotive    400,800          -            -            -
Global Money    Speciality & other   Money transfer service         300,000          -            -            -
Transfer (Loan  finance
Laminate        General retailers    Specialise in supplying        450,000          -            -            -
Flooring                             real wood and laminate
Monotub         Household goods      Washing machine                260,000          -            -            -
Industries                           manufacturer
NWD Group       Media                Marketing services group       518,312
Recycled Waste  Support services     Environmental control          374,994          -            -            -
Ringprop        Industrial           Exploitation of the            366,999          -            -            -
                engineering          potential of marine
                                     propeller technology
Stanhope        Telecommunications   Telecom products               500,000          -            -            -
                                                                  4,333,464          -            -

*These companies are in liquidation and, with the exception of 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 on pages 6 to 12 are incorporated and quoted within the


                                                                     Purchase Valuation at   Percentage
                                                                 cost           31 January       of net
                                                                                      2007       assets

                                                                            £            £            %
Total qualifying portfolio*                                        30,378,830   33,780,997        76.17
Fixed interest/non-qualifying                                       9,956,127    9,733,785        21.95
Investments held at nil valuation                                   4,333,464            -            -
Subtotal                                                           44,668,421   43,514,782        98.12
Net current assets                                                          -      834,236         1.88
Total                                                              44,668,421   44,349,018       100.00

*The figure of 76.17% 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 80.07% (2006: 80.60%).

Table of largest ten investments by value

Name of company                     Percentage of    Percentage Profit/(loss) Retained profit   Net asset    Accounting
                                       net assets       held by    before tax  / (accumulated       value     reference
                                                        Company                         loss)                      date
                                                %             %        £000's          £000's      £000's

Treasury 4.5% Stock 7/3/2007                 8.00             -             -               -           -             -
Treasury 4% Stock 7/3/2009                   4.05             -             -               -           -             -
Aero Inventory                               3.76          1.81        10,501          10,996     135,077    30/06/2006
Tanfield Group                               3.65          0.91         2,000           8,339      23,926    31/12/2005
Prezzo                                       3.64          2.06         6,436           7,204      32,015    01/01/2006
Blooms of Bressingham Holdings               3.36          5.08         3,556          14,524      23,191    29/01/2006
Synergy Healthcare                           3.21          0.67        10,299          13,962      73,795    02/04/2006
U4EA (Preference Shares)                     3.17         11.66       (4,324)        (24,585)         499    31/03/2006
Oasis Healthcare                             3.00          5.92         (366)         (5,479)       8,906    31/03/2006
Mediwatch                                    2.63          8.87       (1,056)        (10,601)       2,840    30/04/2005

The figures relating to profit/(loss) before tax; retained profit/(accumulated
loss) and net asset value are taken from the most recently available audited
accounts of the underlying companies.

The aggregate value of these top ten holdings is £17,067,385

Sector analysis

                                                                  Purchase cost  Valuation at 31   Percentage
                                                                                    January 2007       of net
                                                                              £                £            %

Aerospace & defence                                                   1,289,924        1,667,325         3.76
Electronic & electrical equipment                                     1,550,694        1,046,566         2.36
Fixed interest                                                        5,887,590        5,843,930        13.18
Food producers                                                        1,724,582        2,103,303         4.75
General financial                                                       487,989          457,421         1.03
General industrials                                                     460,339          331,289         0.75
General retailers                                                     1,787,253        1,932,012         4.36
Healthcare equipment & services                                       2,835,686        4,223,017         9.52
Household goods                                                         293,220          307,627         0.69
Industrial engineering                                                1,199,409        1,503,810         3.40
Industrial transportation                                                 3,830            3,828         0.01
Leisure goods                                                           452,500           97,543         0.22
Media                                                                 5,120,421        5,129,972        11.57
Pharmaceuticals & biotechnology                                         519,240          800,133         1.80
Software & computer services                                          3,851,297        3,177,639         7.16
Support services                                                      6,904,952        8,063,470        18.17
Technology hardware & equipment                                               -                -            -
Travel & leisure                                                      2,236,654        3,892,073         8.77
Investments held at nil valuation                                     4,333,464                -            -

Subtotal                                                             40,939,044       40,580,958        91.50
Net current assets                                                            -          834,236         1.88

Total                                                                40,939,044       41,415,194        93.38

1st Dental Laboratories                 1st Dental is the UK's largest provider
                                        of services and products to the dental
                                        industry. The company has 15 
                                        laboratories and further acquisitions 
                                        are expected.

Aero Inventory                          The company is a provider of e-based 
                                        procurement and inventory management 
                                        solutions to the aerospace industry. The 
                                        company raised significant further funds 
                                        last year to exploit new customer 
                                        prospects and has subsequently signed a 
                                        major new contract with Qantas.

Aquilo                                  Aquilo provides support services to the 
                                        insurance industry. Services include 
                                        claims management and consultancy.

Asfare Group                            Asfare is a specialist supplier of
                                        products and services for the emergency 
                                        services and homeland security markets.
                                        It 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. With the 
                                        acquisition of Todd, the company has 
                                        added X-ray scanners to the product 

ATA Group                               ATA Group's principal activities are in 
                                        recruitment and training services. The 
                                        recruitment division is focussed on the 
                                        technical engineering sector throughout 
                                        the UK. The training company specialises 
                                        in the provision of services and audits 
                                        of training standards to the railway 

Autoclenz Holdings                      Autoclenz is the UK's leading outsourced 
                                        car valeting and vehicle preparation 
                                        services providers, and one of the 
                                        leading specialist providers of rapid 
                                        response deep cleaning and emergency
                                        decontamination services.

Avingtrans                              Avingtrans is involved in the production 
                                        of precision engineered components used 
                                        in medical and scientific devices (e.g. 
                                        MRI scanners) and industrial machinery 
                                        (e.g. ballscrews, speed camera stands).

BBI Holdings                            BBI is a Cardiff-based rapid-test 
                                        diagnostics company using 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                   Blooms operates 8 retail garden centres.
                                        The company has been redeveloping and 
Holdings                                extending existing centres as well as 
                                        opening new sites where opportunities 

Bright Things                           Bright Things has developed an
                                        educational games console called 
                                        'Bubble' and associated software aimed 
                                        at the pre-school market. It has also 
                                        developed interactive DVD games based on 
                                        popular licences and has also sold 
                                        rights to use it's proprietary 

Camaxys (suspended)                     Following the disposal of it's trading
                                        subsidiary Camaxys is an AIM listed cash 
                                        shell company looking to acquire a
                                        suitable new business.

Cardpoint                               Cardpoint is the UK's leading 
                                        independent owner and operator of ATMs. 
                                        The company levies 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.

Cello Group                             Cello has rapidly established itself as 
                                        a leading marketing services business. 
                                        The company is involved in market 
                                        research, direct marketing and brand 
                                        advertising. Further acquisitions by
                                        the experienced management team are 

Charteris                               Charteris is an IT management 
                                        consultancy specialising in e-business 
                                        integration and related services to 
                                        'blue chip' clients.

Chromogenex                             Chromogenex designs, manufactures and
                                        distributes aesthetic and therapeutic 
                                        laser and light based technology devices.

Clerkenwell Ventures                    Clerkenwell quoted on AIM with the
                                        specific objective of acquiring 
                                        established, high growth businesses in 
                                        the leisure sector. The company was 
                                        established by the former Pizza Express
                                        management team.

CMS Webview                             CMS has developed extensive expertise
                                        in the area of real-time data 
                                        dissemination facilities and software to 
                                        financial market customers.

Conder Environmental                    Following the disposal of it's Vikoma
                                        division, Conder is now involved solely 
                                        in manufacturing of pollution control
                                        tanks and sewage treatment systems.

Connaught                               Connaught is a facilities management 
                                        group providing a range of services to 
                                        the owners and occupiers of property 
                                        across mainland UK. The services include 
                                        maintenance,  refurbishment, cleaning 
                                        and industrial and commercial gas 
                                        appliance testing and servicing. The
                                        company's order book continues to grow 
                                        strongly as local authorities outsource
                                        their requirements.

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 

Eagle Eye Telematics                    Eagle Eye has developed a vehicle
                                        tracking system offering both fleet/
                                        asset management and driver/vehicle 
                                        security services.  The system, designed 
                                        on scaleable open platforms and 
                                        architecture, incorporates a mobile 
                                        vehicle unit containing a GPS chip and 
                                        GSM modem linked to base station 
                                        software for monitoring and remote 
                                        control of the vehicle.

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. The group also offers 
                                        wealth management and marketing services.

Flexbenefits (unquoted)                 Flexbenefits has developed a system for
                                        the management, delivery and 
                                        communication of employee benefits and 
                                        financial services information. These 
                                        services enable employers and financial 
                                        institutions to reduce costs and improve 
                                        communication and understanding. The 
                                        shares are valued on the basis of a 
                                        fundraising carried out last summer.

Formation Group                         Formation is a leading sports and wealth 
                                        management business looking after many 
                                        high profile sporting personalities with 
                                        a particular emphasis on football.

Fountains                               The company provides a range of
                                        environmental services in the UK, 
                                        Ireland and the US. It has a strong 
                                        position in the provision of vegetation 
                                        management and allied maintenance 
                                        services to rail and utility companies 
                                        as well as local authorities and 

Fujin Technology                        Fujin is engaged in the design, provision 
                                        and support of bespoke technology 
                                        solutions for mobile phone service

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 quoted 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 Limited.

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. 
                                        It also has manufacturing capability in

ILX Group                               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 acquisitions have been made
                                        including that of Corporate Training Group.

Imagesound                              Imagesound is the UK's leading supplier of 
                                        in-store music, radio and TV services. It 
                                        supplies over 40 leading retail and leisure 
                                        chains, with an aggregate 10,000 stores, with 
                                        bespoke music and TV programming.

Imprint                                 Imprint is a multi-disciplinary recruitment 
                                        business. Services provided include search,
                                        selection and value added personnel services to 
                                        companies of varying sizes in many different industries.

Individual Restaurant Company           An operator of branded restaurants including
                                        Piccolinos, Bank and Zinc.

Intelligent Environments Group          Intelligent Environments is a leading provider of 
                                        integrated e-finance products for the payment card 
                                        and retail investment markets and has an excellent 
                                        list of 'blue chip' clients.  Market conditions 
                                        have recently improved and the company has a good 
                                        pipeline of prospects which it hopes to convert to 
                                        firm orders in due course.

InterLink Foods                         Interlink Foods is a Lancashire based supplier of 
                                        cakes to the major supermarket chains.  Interlink has
                                        consistently grown via both organic and acquisitive means.

Just Car Clinics Group                  The company owns a network of car repair centres and works 
                                        with several major insurance and car dealership
                                        companies to fulfil their repair requirements. The company 
                                        has been consistently profitable and cash generative over 
                                        the last few years.

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.

Lilestone Holdings (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 both in the UK and overseas. The shares
                                        are valued on the basis of the last funding round in 2006.

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.

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 2 main subsidiaries, a specialist 
                                        video/DVD publisher and a TV production

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.

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.

Neutrahealth                            Neutrahealth was established and quoted on AIM to 
                                        acquire businesses in the growing vitamin and mineral
                                        supplements market. The company has made 3 significant 
                                        acquisitions in this area to date.

Oasis Healthcare                        Oasis has built up an estate of dental practices in the 
                                        UK primarily by acquisition and now has over 120 sites
                                        and 500 clinicians serving some 800,000 patients. The 
                                        company is now experiencing the benefits of scale and has 
                                        annualised turnover of about £80m.

Petards Group                           Petards is a leading provider of advanced security and 
                                        communication systems focused on homeland security. It is
                                        focused on the growing surveillance, emergency services and 
                                        defence markets and has a high quality customer base.

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.

Playgolf Holdings                       Playgolf is an owner and operator of golfing facilities in 
                                        London, Glasgow and Manchester. The facilities are located
                                        in high-density urban areas and include driving ranges and high 
                                        quality 'urban' golf courses based on the theme 'golf in an hour'.

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 sector 
                                        expects to see good growth here also.

Prezzo                                  Prezzo owns and operates a chain of restaurants based in and 
                                        around London and trading in 2 main formats, Jonathans and Prezzo. 
                                        The food offering consists of pizza and pasta with Prezzo also 
                                        selling rotisserie chicken. The company has approximately 100 sites 
                                        and is operating profitably.

Pubs 'n' Bars                           Pubs 'n' Bars is a chain of community style pubs primarily in the 
                                        London area but also with several units in the West Country.  The 
                                        company manages over 90 pubs following the deal to manage the 
                                        Community Taverns chain on behalf of Bank of Scotland.

Quadnetics Group                        Quadnetics is a leader in the design, integration and control 
                                        of advanced CCTV and networked video systems. The
                                        company has a strong position in the casino market where it has 
                                        a technological advantage and a significant market share.

Red Squared                             Red Squared is an IBM hosting and managed services company with 
                                        a capability to provide secure and scaleable
                                        internet hosting solutions. Utilising IBM servers and storage 
                                        systems, Red Squared provides its customers with services such 
                                        as web hosting, co-location and managed services, all of which 
                                        are delivered to specific customer service levels.

Revenue Assurance Services              Revenue Assurance specialises in revenue assurance and debt 
                                        management for non-residential utility customers.

Smallbone                               Smallbone's main business is the manufacture and installation 
                                        of luxury kitchens, bathrooms and bedroom furniture
                                        in the UK. It also sells specialised stone floors and tiles, 
                                        mainly in the US. (unquoted)                Sportsweb is a specialist recruitment agency to the fitness 
                                        and leisure industries.  The company has an established traditional 
                                        recruitment business and has extended this to the internet.
                                        Sportsweb has several major clients who are actively using the 
                                        website to successfully recruit staff achieving significant 
                                        benefits over traditional methods. The company is trading 
                                        profitably and is likely to seek a trade sale in
                                        due course.

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. The company has just 
                                        acquired Isotron which adds depth to the product and customer range.

Tanfield Group                          Tanfield is involved in specialist manufacturing and provision 
                                        of technical and assembly solutions to a wide range
                                        of sectors. Activities include specialist electric vehicles, 
                                        aerial access equipment and other purpose built vehicles and 
                                        added value products.

Tasty                                   Tasty is engaged in the operation of restaurants and was 
                                        established by the Kaye family who are successful serial 
                                        entrepreneurs in this sector. The offering is in Oriental food
                                        with a focus on 'dim sum'.

The Clapham House Group                 Clapham House was admitted to AIM to exploit acquisition opportunities 
                                        within the UK restaurant sector. The experienced management team 
                                        initially acquired Greek restaurant and bar chain The Real Greek
                                        and has subsequently bought the Bombay Bicycle Indian restaurant 
                                        business, the Gourmet Burger Kitchen and Tootsies. All formats 
                                        appear to have significant rollout and growth potential.

The Food & Drink Group                  Food & Drink operates a portfolio of restaurants and bars within 
                                        London and the Home Counties. The acquisition of Henry J Bean's 
                                        has enhanced the growth potential of the group.

The 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 growth. The purchases of Five Star Fish 
                                        and Napier Brown Foods have significantly increased the scale 
                                        of the business in the last year or so.

Thomson Intermedia                      Thomson provides media monitoring services, accessed by or 
                                        delivered to subscribers via the internet.  By
                                        superseding paper based information systems with its proprietary 
                                        software and delivery over the web, Thomson enables subscribers to 
                                        enjoy more up-to-date and timely information than traditional methods 
                                        allow. The customer can also analyse, search and manipulate the data 
                                        provided and as such it is far more useful.

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 also 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.

Torex Retail (suspended)                Torex is a leading supplier of IT and software products to retailers 
                                        worldwide. This holding resulted from the takeover of unquoted company XN 

TripleArc                               TripleArc is a provider of technology led procurement solutions 
                                        to the fast growing print management sector. The merger with 
                                        Access Plus has created critical mass and given the
                                        company a 'blue chip' customer base with several important new 
                                        contracts having been signed in the last year.

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 November 2006.

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 licences.

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 is
                                        now being rolled out by several customers including Glaxo Smith Kline.

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.

Zytronic                                Zytronic's business has traditionally been as a manufacturer and 
                                        distributor of optical filters, shielded filters and specialist 
                                        light diffusers.  The company's customers have included Alcatel, 
                                        NCR, Corning and many other international OEM based
                                        manufacturers.  More recently Zytronic has entered the touchscreen 
                                        technology market which significantly increases its growth 
                                        potential through its existing distribution partners.

Financial Statements

Income Statement
for the year ended 31 January 2007

                                                           Year ended                        Year ended
                                                        31 January 2007                   31 January 2006

                                        Notes     Revenue    Capital       Total    Revenue     Capital       Total
                                                        £          £           £          £           £           £

Net gains/(losses) on investments at      10            -  2,731,638   2,731,638          - (3,318,759) (3,318,759)
fair value
Gain on acquisition and liquidation of    11            -  1,017,855   1,017,855          -           -           -
subsidiaries (net of costs)
Income                                    2       556,956          -     556,956    263,590           -     263,590
Administrative expenses
  Investment management fees              3     (184,861)  (554,582)   (739,443)  (141,312)   (423,937)   (565,249)
  Cost of share options                   4      (39,794)  (119,383)   (159,177)          -           -           -
  Other expenses                          5     (338,198)          -   (338,198)  (304,617)           -   (304,617)
  Total administrative expenses                 (562,853)  (673,965) (1,236,818)  (445,929)   (423,937)   (869,866)
Return on ordinary activities before              (5,897)  3,075,528   3,069,631  (182,339) (3,742,696) (3,925,035)
Tax on ordinary activities                7             -          -           -          -           -           -
Return on ordinary activities after               (5,897)  3,075,528   3,069,631 (182,339-) (3,742,696) (3,925,035)
taxation for the financial year

Basic and diluted return per ordinary     9       (0.01)p      6.29p       6.28p    (0.59)p    (12.06)p    (12.65)p
Adjusted return per ordinary share        9       (0.01)p      4.21p       4.20p    (0.59)p    (12.06)p    (12.65)p

The total column of this statement is the profit and loss account of the

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

There are no gains or losses other than shown in the income statement.

Balance Sheet
as at 31 January 2007
                                                                   Notes                      As at                As at
                                                                                         31 January           31 January
                                                                                               2007                 2006
                                                                                                  £                    £
Fixed assets
Investments at fair value
   Qualifying investments                                                                33,780,997           22,926,971
   Fixed interest securities and other non-qualifying investments                         9,733,785            4,273,246
                                                                     10                  43,514,782           27,200,217
Current assets
Debtors                                                              12                     557,004              264,325
Cash at bank                                                                                716,918              412,435
                                                                                          1,273,922              676,760

Creditors: amounts falling due within one year
Other creditors and accruals                                         13                   (439,686)            (361,190)

Net current assets                                                                          834,236              315,570

Net assets                                                                               44,349,018           27,515,787

Capital and reserves
Called-up share capital                                              15                   2,373,099            1,555,894
Share premium account                                                16                   2,954,794            3,121,068
Merger reserve                                                       16                  16,492,539                    -
Special reserve                                                      16                  21,296,977           25,082,853
Capital redemption reserve                                           16                     363,329              116,500
Share options reserve                                                16                     159,177                    -
Capital reserve - realised                                           16                   1,985,278            1,568,267
Capital reserve - unrealised                                         16                 (1,153,639)          (3,812,156)
Revenue reserve                                                      16                   (122,536)            (116,639)
Equity shareholders' funds                                                               44,349,018           27,515,787

Net asset value per ordinary share                                   17                      93.44p               88.42p

Cash Flow Statement
for the year ended 31 January 2007
                                                                      Notes              Year ended          Year ended
                                                                                         31 January          31 January
                                                                                               2007                2006
                                                                                                  £                   £
Operating activities
Investment income received                                                                  543,145             265,600
Deposit interest received                                                                    43,951              18,064
Investment management fees paid                                                         (1,048,725)           (587,355)
Other expenses paid                                                                       (435,567)           (306,893)
Net cash outflow from operating activities                             18                 (897,196)           (610,584)


Corporation tax paid                                                                              -                   -
Net cash outflow from taxation                                                                    -                   -

Capital expenditure and financial investment
Purchases of investments                                                                (1,983,485)         (2,959,275)
Disposals of investments                                                                  6,309,897           4,235,693

Cash received from subsidiary undertakings                                                1,008,376                   -

Share issue costs paid                                                                    (166,274)                   -

Merger costs paid                                                                         (343.930)                   -
Net cash inflow from capital expenditure and financial investment                         4,824,584           1,276,418

Equity dividends paid                                                                             -           (155,304)

Net cash inflow before financing                                                          3,927,388             510,530

Proceeds of C share issue                                                                         -             397,000
Cost of C share issue                                                                       (5,869)             (8,958)
Cost of ordinary shares purchased for cancellation                                      (3,617,036)           (914,354)
Net cash outflow from financing                                                         (3,622,905)           (526,312)
Increase/(decrease) in cash for the year                               19                   304,483            (15,782)

Notes to the Financial Statements

1.         Accounting policies

A summary of the principal accounting policies 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 the Companies Act
1985 and with applicable accounting standards in the United Kingdom, and are in
compliance with the revised December 2005 Statement of Recommended Practice
'Financial Statements of Investment Trust Companies' ('SORP').

b)    Investments

All investments held by the Company are classified 'at fair value through profit
or loss'. Investments are initially recognised at cost, being the fair value of
consideration given. Interest accrued on fixed interest rate securities at the
date of purchase or sale is accounted for separately as accrued income, so that
the value or purchase price or sale proceeds is shown net of such items.

After initial recognition, investments are measured at fair value, with
unrealised gains and losses on investments and impairment of investments
recognised in the income statement and allocated to capital. Realised gains and
losses on investments sold are calculated as the difference between sales
proceeds and cost.

For investments actively traded in organised financial markets, fair value is
generally determined by reference to Stock Exchange quoted market bid prices at
the close of business on the balance sheet date, without adjustment for
transaction costs necessary to realise the asset.

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 fair value with reference to the
International Private Equity and Venture Capital Valuation ('IPEVCV') guidelines
where appropriate.

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

c)     Investment in subsidiaries

Investments in subsidiaries are recorded at cost less amounts written off.

On 22 February 2006 the Company issued 21,280,696 ordinary 5p shares to acquire
the entire share capital of Singer & Friedlander AIM VCT plc ('AIM') and Singer
& Friedlander AIM 2 VCT plc ('AIM 2'). These shares were issued at a fair value
of £17,556,573 with the excess of this amount (£16,492,539) over the nominal
value of the shares issued (£1,064,034) being treated as a merger reserve in
accordance with s131 of the Companies Act 1985.  The investments in AIM and AIM
2 were initially recorded at cost of £17,556,573 which represented a discount to
their underlying attributable net asset value.

Following the acquisitions, the underlying assets and liabilities of AIM and AIM
2 were transferred to the Company at their fair value.  AIM and AIM 2 were
liquidated returning to the Company its investments in AIM and AIM 2 and giving
rise to a gain in the Company's profit and loss account being the amount of the
discount to the net asset value attributable to the Company's shares issued on
22 February 2006 less the merger costs.  This gain of £1,017,855, which is
non-recurring, has been recorded in the capital column of the income statement.

d)    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.  Interest receivable is
included in the accounts on an accruals basis.

e)    Expenses

All expenses are accounted on an accruals basis. Expenses are charged through
the revenue account in the income statement 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 

f)      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.

g)    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.

h)   Share based payments

In accordance with FRS 20: Share Based Payments, an expense is now recognised in
the financial statements relating to the value of the share options awarded to
the Managers under the arrangements agreed on the merger of the Company with AIM
and AIM 2.

The accounting charge is based on the fair value of each grant.  The fair value
of the Managers' option is determined at the date of grant and is expensed on a
straight-line basis over the vesting period based on the Company's estimate of
shares that will eventually vest.  In the case of the options granted, fair
value is measured by a Black-Scholes pricing model,  further details of which
are set out in note 4.  The deemed expense is transferred to the share options

i)        Dividends payable to shareholders

Interim dividends are not accounted for until paid and final dividends are
accounted for when approved by the members in the general meeting.

2    Dividends

The Board is recommending a final dividend of 2.0 pence per share payable on 3
July 2007 to shareholders on the register as at 8 June 2007 (2006: nil)

3    Earnings per share

Basic and diluted revenue return per ordinary share is based on the net loss on
ordinary activities after taxation of £5,897 (2006: loss £182,339) and on
48,906,148 (2006: 31,025,626) 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 gain
for the year of £3,075,528 (2006: loss £3,742,696) and 48,906,148 (2006:
31,025,626) 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 One Hanover Street,
London W1S 1AX on Tuesday 26 June 2007 at 11.30 am.

5    Statutory Report and Accounts

The financial information set out above does not constitute the Company's
statutory records for the year ended 31 January 2007.  Statutory accounts for
2007 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 information for the year ended 31 January 2007 does not comprise the full
financial statements within the meaning of Section 240 of the Companies Act

The Company will be circulating the full Report and Accounts to shareholders
shortly and copies will be available from the Registered Office of the Company
at One Hanover Street, London, W1S 1AX.

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

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