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Quester VCT PLC (KAY)

  Print      Mail a friend       Annual reports

Wednesday 23 May, 2007

Quester VCT PLC

Final Results

                                QUESTER VCT PLC                                


Summary of results for the year ended 28 February 2007

Per ordinary share (pence)                     2007          2006          2005
Capital values                                                      
Net asset value                                41.6          44.5          44.1
Share price                                    35.3          37.0          44.0
Return and dividends                                                
Dividend paid                                   3.9           1.25          -
Cumulative dividend                            46.7          42.8          41.5
Total return*                                  88.3          87.3          85.6
*Net asset value plus cumulative dividend                           

The Directors have declared a second interim dividend of 2.8 pence per share
amounting to £3,299,000 in respect of the year ended 28 February 2007 that was
paid on 21 March 2007. This dividend, which is not reflected in the table
above, will increase cumulative dividends paid to 49.5 pence per share.


Acquisition of Quester management company by NewMedia SPARK

Querist, the company that manages Quester VCT, was acquired by NewMedia SPARK
plc on 11 May 2007. SPARK is an AIM traded technology investment company
focused on early stage investment in the ICT and media sectors and is one of
the few specialist and successful companies with expertise similar to Quester.

SPARK's current market capitalisation is £61 million, and it has a portfolio of
23 investments. The value of the portfolio at 30 September 2006 was £36.6
million. It specialises in digital media, software applications, technology and
communications which complements Quester's own activities in these areas. SPARK
does not have a healthcare capability, but has decided to add this sector to
its skill base, using Quester's dedicated healthcare business as a platform.

SPARK's team, specialising in early stage investment, has been broadly the same
for eight years. It changed its strategy in 2003 after the dramatic growth of
SPARK in the previous four years during the dotcom boom, to focus solely on
early stage investing. It has achieved somewhat better returns than Quester
since that date. SPARK has a strong balance sheet and can provide substantial
amounts of new capital out of its cash resources. SPARK has not managed third
party funds before, and the acquisition of Querist provides it with that
capability for the first time, covering both the institutional and specialist
VCT market. The merged team will be fully capable of maintaining VCT status.

The SPARK and Quester teams have worked together on investments before, in
particular Footfall which was sold successfully in 2006. SPARK will provide
greater access to some of the UK's best early stage entrepreneurs. In addition
to compatible skill sets, the two teams appear to share common values.

The acquisition concluded a process carried out by Andrew Holmes and John
Spooner, the controlling shareholders of Querist, to identify the best
long-term future for the business. Your Board met with three possible acquirers
of Querist and held further meetings with SPARK to discuss its plans for the
future management of your company, which will be carried forward on the
existing basis. The trend of reducing exposure to high risk/reward capital
intensive investments seems likely to continue.

Results for the year ended 28 February 2007

Performance over the year was broadly flat, with high levels of liquidity,
leading to the ability to pay good dividends.

                                                               £'000  Pence per
Net asset value at 28 February 2006                           53,335       44.5
Income                                                           909        0.8
Operating expenses                                           (1,638)      (1.5)
Net realised gain on investments                               1,155        1.0
Recoveries made in respect of investment previously               10          -
written off                                                                    
Net unrealised gain on investments                               547        0.5
Net assets before dividends and share buy-backs               54,318       45.3
Dividend paid net of amounts reinvested                      (4,519)      (3.9)
Share buy-backs                                              (1,471)        0.2
Net asset value at 28 February 2007                           48,328       41.6

The net asset value at 28 February 2007 is stated before paying the second
interim dividend of 2.8p per share, costing £3.3 million, paid on 21 March

The results for the second half-year showed a slight decline in total return,
due to a careful review at the year-end of carrying values on three


Realisations of £5.4 million reduced, compared to last year, but were still
broadly in line with the amounts expected to be realised since the merger.
There were no spectacular gains.

Venture capital reinvestment was at a high rate of £8.8 million, split broadly
50/50 between new and follow on investments. There were four significant
disappointments in the performance of the portfolio over the year, offset by
two significant uplifts in value, as the hard work put into longer standing
investments such as Nomad, were reflected in write backs.

Overall, the Manager has constructed a well balanced portfolio with a pipeline
of lower risk investments and potential exits in the near term and higher
reward, capital consuming high risk investments for the longer term. It is
worth noting that 23% of the venture capital portfolio is quoted, partly
because of opportunities for new investment in the AIM market, and partly as a
result of the sale of investments to larger quoted companies, in exchange for
paper. It is still too early to be able to identify any startling performers in
the portfolio, and inevitably there will continue to be occasional

The quoted investments outside the venture capital portfolio have had a
satisfactory performance.

There is no reason to believe that SPARK will make any substantial changes to
the risk/reward profile of the portfolio, and we look forward to developing a
productive relationship with the merged team.


At least, during a transitional period, it is expected that Andrew Holmes will
continue on the Board, as he will continue to provide significant input into
the merged team's work. It is the intention to invite Andrew Carruthers, the
CEO of SPARK, to join the Board in due course.


Although the rate of reinvestment has been in excess of realisations and
reserves will continue to build to ensure that follow on investments can be
made, there is substantial liquidity in the portfolio. This enables us to
continue with a healthy dividend policy.

An interim dividend of 1.4p per share, was followed by a second interim of
2.8p, declared and paid before HMRC rules on maintaining 70% of the portfolio
invested came into effect on 6 April 2007. This represented an increase of 12%.
There will be no final dividend.

Total dividends amounting to 7.95 pence per share have been returned to
shareholders since the merger and for the moment, the intention is to continue
to pay healthy dividends.

Jock Birney


23 May 2007



During the year, twenty three investments aggregating £8.8 million were made; £
4.1 million in eight new companies and £4.7 million in companies already in the
portfolio. Four realisations were completed delivering sales proceeds of £4.9
million with a further £0.5 million received from the repayment of loan stock.
We expect the pace of realisation to reduce in 2007/08 given the stage of
companies in the portfolio, but to improve thereafter.

Venture capital portfolio: investment

New investments

Eight new investments were made totalling £4.1 million.

Company                  Industry sector              £'000
Keronite Limited         Chemicals & materials          947
Landround plc            Other services                 178
Ovum plc                 Other services                 375
Phoqus Group plc         Biotechnology services         355
Secerno Limited          Software                       266
Uniservity Limited       Software                     1,000
We7 Limited              Software                       249
Workshare Limited        Software                       694

The investments in Keronite, Ovum and Secerno were reported in the 2006 Interim

New investments made since the 2006 Interim Report was issued are:


Landround is an AIM traded company focussed on travel, leisure and lifestyle
promotion. Quester VCT invested as part of a £1.6 million funding round in
December. Landround runs innovative voucher based promotions for customer
campaigns, trade incentives, staff motivation and reward programmes. In the UK,
Landround operates Discover Promotions, the Buy and Fly loyalty reward
programme and Travel Offers. The company has offices across Europe and works in
partnership with 19 of the world's leading airlines and other major travel and
leisure operators.


Phoqus is a drug delivery company providing a range of innovative drug delivery
systems based on electrostatic dry powder deposition technology. The Company
invested as part of a £3 million AIM placing. The technology allows very
precise deposition of coating powder on to the surface of tablets, with
benefits including improved performance and the controlled release of a drug
into the body. The technology can also be used to create novel images on
tablets as a means of brand enhancement and protection against counterfeiting.


The Company's investment was part of a £1.5 million first funding round. We7's
technology inserts targeted adverts on to audio and video content which can
then be legally downloaded for free by the consumer with the content being paid
for by the advertiser. The company is at an early and exciting stage in
developing advertising supported internet content in the fast growing downloads


Quester VCT invested £1 million of a £2.4 million first funding round of which
the remaining £1.4 million was provided by other Quester managed funds, Quester
VCT 4 and Quester VCT 5. Uniservity is a leading provider of web-based learning
platforms to the education sector, enhancing communication and collaboration
between schools, teachers, pupils and the community. The company's learning
platforms provide schools with a customised online suite of tools to support
innovative new ways of teaching and learning, extending the classroom to the


Workshare is an established company that develops and markets products that
provide secure production and exchange of business documents, enabling users to
assemble and verify document content and record who has viewed documents. The
company has a strong position in a growing market and continues to focus on
reinforcing and broadening its position as the leading provider of outbound
content security software applications for professionals. Quester VCT
participated in a December 2006, $23 million syndicated funding led by a US
venture capital firm. Quester managed funds, Quester VCT 5 and Quester Venture
Partnership, had already invested in the company and also participated in this

Follow-on investments

Fifteen follow-on investments totalling £4.7 million were made. These
investments, a number of them relatively small, generally were made as part of
previously agreed funding plans linked to the achievement of milestones.

Name                               Industry sector                     £'000
Advanced Valve Technologies        Industrial products &                  22
Limited                            services                                 
Allergy Therapeutics plc           Biotechnology                         200
Antenova Limited                   Communications                        130
Anthropics Technology Limited      Communications                         20
Arithmatica Limited                Semiconductors                         78
Cluster Seven Limited              Software                              454
Haemostatix Limited                Biotechnology                          64
Imagesound plc                     Industrial products &               1,000
Lectus Therapeutics Limited        Biotechnology                         606
Level Four Software Limited        Software                              208
MediGene AG                        Biotechnology                          56
Nomad Software Limited             Software                              858
Sift Group Limited                 Internet                              136
Teraview Limited                   Diagnostics and devices               198
Vivacta Limited                    Diagnostics and devices               675

Quoted venture capital investments: valuation changes

The quoted venture capital portfolio saw an overall 4.1% fall in valuation of £
269,000 to £6.3 million. These movements in valuation are symptomatic of the
volatility of AIM traded stocks that have limited liquidity. Two companies in
the healthcare sector, Genosis and Vernalis, fell by £920,000 and £287,000
respectively. Genosis was punished hard for falling short on early sales
perceptions; however a recent announcement of a channel for entry to the US
market for the sale of its male and female fertility testing kits suggests that
there is the potential for recovery.

On the positive side, Imagesound rose by £728,000, Allergy Therapeutics by £
206,000 and MediGene by £116,000. We supported Imagesound, a leading supplier
of in-store music, radio and TV services to the branded retail and leisure
sectors, with a further £1 million investment and advanced £200,000 to the
specialist pharmaceutical company, Allergy Therapeutics.

Unquoted venture capital investments: valuation changes

The unquoted portfolio fell in value by £132,000 during the year.

Nomad Software was written up to its original cost by £1.9 million to reflect
the progress made by its card payments processing business. The valuation of
Elateral Holdings, which provides an internet based solution to companies whose
distribution channels require customised marketing material, was increased by £
763,000 reflecting stronger trading results.

The £600,000 investment in Global Silicon was written off following its failure
to achieve significant sales traction despite having a proven product. Two
investments have been written down by an aggregate of £1.5 million reflecting
slower than anticipated progress. The investment in Antenova, a leading
developer of high performance antenna solutions for mobile handsets, portable
devices and laptop computers, is valued at the firm pricing of a recent funding
round which has resulted in a downwards revaluation of £115,000. We remain
positive about the company's prospects. The residual holding in Opsys has been
written down to nil following the weak stock price performance of its NASDAQ
listed parent. There is the possibility of it being written back up if the
price improves.

Sector spread

Industry sector                  Percentage of          
                               venture capital                             
                                  portfolio at                             
                                     valuation  Valuation          Number of                  
                                             %       £'000         Investments   
Software                                  37.4      10,125                 11
Biotechnology                             15.3       4,154                  8
Internet                                  10.6       2,883                  2
Industrial products &                     10.4       2,829                  3
Diagnostics & devices                     10.1       2,743                  4
Communications                             3.9       1,064                  2
Chemicals & materials                      3.8       1,034                  2
Hardware                                   2.6         708                  1
Consumer goods & services                  1.8         480                  1
Electronics                                1.6         435                  2
Semiconductors                             1.5         416                  1
Other services                             1.0         204                  1
                                         100.0      27,075                 38

The sector balance is sensible; although not overly prescriptive because we
believe that most companies are impacted by company specific micro issues, such
as management, markets and product development and not the wider macro issues
of the industry sector. Nonetheless, the weight of investment tends towards a
balance between Healthcare, ICT and Software, which reflects the structure of
the Quester fund management team, deal flow and capacity to make and manage

Listed equity and bond portfolios

The value of the listed equity portfolio at 28 February 2007 stood at £12.8
million. Emphasis has been on UK mid and small cap companies, which have
performed well over the year, with the portfolio increasing in value by £1.5
million (13.1%).

The Company also holds a bond portfolio valued at £2.8 million, generating an
effective yield of 4.9%.


We are continuing to build a portfolio with a balance of later as well as early
stage investments, to realise mature investments and to support companies
within the portfolio. Since the merger with Quester VCT 2 and Quester VCT 3 in
June 2005, in line with the merger objectives, we have continued to increase
the range and diversity of the venture capital portfolio. Exits this year
realised £5.4 million and running costs are lower (comparative figures exclude
pre merger costs of Quester VCT 2 and Quester VCT 3) with a full year's
management fee at the reduced rate of 2.0% and economies achieved from
combining general overheads.

On 11 May 2007, Quester was acquired by NewMedia SPARK plc, the AIM traded,
early stage venture capital specialist. SPARK has a focus on digital media,
software applications, technology and communications and the combined group
will manage funds of over £275 million. The new management group will have
access to a broader range of early stage investors and investment opportunities
and the benefits derived from the synergy between Quester and SPARK will be
passed on to shareholders as the combined management team pool resources to
deliver shareholder value.



23 May 2007


                         Industry sector   Original Valuation Equity   % of    
                                           Cost *   £'000     % held   fund by 
                                           £'000                       value   
Quoted venture capital investments                                             
Allergy Therapeutics   Biotechnology       772      1,009     1.1%     2.1%    
Cyclacel               Biotechnology       800      329       1.1%     0.7%    
Pharmaceuticals, Inc.                                                          
Genosis plc            Diagnostics &       1,140    192       6.5%     0.4%    
Imagesound plc         Industrial products 2,848    2,269     11.8%    4.7%    
                       & services                                              
Landround plc          Other services      178      204       6.3%     0.4%    
MediGene AG **         Biotechnology       659      449       0.5%     0.9%    
Phoqus Group plc       Biotechnology       355      292       1.0%     0.6%    
Revenue Assurance      Software            611      658       1.4%     1.4%    
Services plc (formerly                                                         
Sopheon plc            Software            178      50        0.2%     0.1%    
Vernalis plc           Biotechnology       886      879       0.5%     1.8%    
Total quoted venture capital investments   8,427    6,331              13.1%   
Unquoted venture capital investments                                           
Advanced Valve         Industrial products 2,773    450       12.8%    0.9%    
Technologies Limited   & services                                              
Antenova Limited       Communications      1,134    1,019     4.7%     2.1%    
Anthropics Technology  Communications      115      45        7.0%     0.1%    
Arithmatica Limited    Semiconductors      416      416       12.5%    0.8%    
Artisan Software Tools Software            2,100    673       23.4%    1.4%    
Casella Group Limited  Industrial products 902      110       15.8%    0.2%    
                       & services                                              
Celldex Therapeutics   Biotechnology       625      225       1.7%     0.5%    
Inc (formerly                                                                  
Cluster Seven Limited  Software            1,196    1,196     11.1%    2.4%    
Community Internet     Internet            1,015    634       17.4%    1.3%    
Europe Limited                                                                 
Elateral Holdings      Software            2,126    1,009     24.4%    2.1%    
Haemostatix Limited    Biotechnology       117      117       5.9%     0.2%    
HTC Healthcare Group   Consumer goods &    2,208    480       36.7%    1.0%    
plc                    services                                                
International          Diagnostics &       1,176    690       23.9%    1.4%    
Diagnostics Group plc  devices                                                 
Keronite Limited       Chemicals &         947      947       7.1%     2.0%    
Lectus Therapeutics    Biotechnology       854      854       7.0%     1.8%    
Level Four Software    Software            725      725       5.1%     1.5%    
Nanotecture Limited    Chemicals &         87       87        0.8%     0.2%    
Nomad Software Limited Software            2,675    3,605     18.7%    7.5%    
Opsys Management       Electronics         1,562    -         13.6%    -       
Pelikon Limited        Hardware            708      708       5.5%     1.5%    
Perpetuum Limited      Electronics         435      435       8.0%     0.9%    
Secerno Limited        Software            266      266       4.2%     0.5%    
Sift Group Limited     Internet            2,395    2,249     19.8%    4.7%    
Teraview Limited       Diagnostics &       1,056    947       5.4%     2.0%    
Uniservity Limited     Software            1,000    1,000     16.5%    2.1%    
Vivacta Limited        Diagnostics &       914      914       12.9%    1.9%    
We7 Limited            Software            249      249       9.6%     0.5%    
Workshare Limited      Software            694      694       1.9%     1.4%    
Total unquoted venture capital investments 30,470   20,744             42.9%   
Total venture capital                      38,897   27,075             56.0%   
Listed fixed interest                      2,832    2,821              5.8%    
Listedequityinvestments                    10,015   12,763             26.4%   
Total investments                          51,744   42,659             88.2%   
Cash and other net                         5,669    5,669              11.8%   
current assets                                                                 
Net assets                                 57,413   48,328             100.0%  

*The cost of investment shown above represents the post merger cost to Quester
VCT plc, which is the original cost to the Company immediately prior to the
merger with Quester VCT 2 plc and Quester VCT 3 plc together with the merger
value of those investments assumed from Quester VCT 2 and Quester VCT 3.

**Shares in MediGene AG were received on MediGene's purchase of Avidex Limited
on 29 September 2006.



                                               Note 2007          2006         
                                                    £'000         £'000        
Gain on investments at fair value             1     1,712         3,056        
through profit or loss                                                         
Income                                        2     909           1,070        
Investment management fee                     3     (1,183)       (882)        
Other expenses                                4     (455)         (382)        
Profit on ordinary activities before                983           2,862        
Tax on profit on ordinary activities          6     -             -            
Profit on ordinary activities after                 983           2,862        
Basic earnings per share                      8     0.8p          3.2p         

All items in the above statement derive from continuing operations.

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

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


                                                 2007             2006                                                   
                                                £'000            £'000                             
Reported profit on ordinary activities            983             2,862        
before taxation                                                                
Realisation of prior years' net unrealised        (228)           429          
(losses)/gains on investments                                                  
Historical cost profit on ordinary                755             3,291        
activities before taxation                                                     
Historical cost profit for the period             755             3,291        



                                                    2007                   2006
                                           Note     £'000                 £'000
Fixed assets                                                                   
Investments at fair value through                   42,659               37,105
profit or loss                                                                 
Current assets                                                                 
Debtors                                             989                     852
Cash at bank                                        5,014                15,693
                                                    6,003                16,545
Creditors: amounts falling due within               (334)                 (315)
one year                                                                       
Net current assets                                  5,669                16,230
Net assets                                          48,328               53,335
Capital and reserves                                                           
Called-up equity share capital                      5,805                 5,992
Share premium account                               51                   37,359
Capital redemption reserve                          465                     260
Special reserve                                     38,820                4,348
Fair value reserve                                  (1,102)             (2,477)
Profit and loss account                             4,289                 7,853
Total equity shareholders' funds                    48,328               53,335
Net asset value per share                    9      41.6p                 44.5p



                                               2007           2006        
                                               £'000          £'000       
Cash (outflow)/inflow from operating           (828)          96          
Financial investment                                                      
Purchase of venture capital investments        (8,769)        (6,001)     
Purchase of listed equities and fixed interest (4,083)        (1,508)     
Sale of venture capital investments            5,409          9,868       
Sale/redemption of listed equity and fixed     3,572          8,190       
interest investments                                                      
Amounts recovered from investments previously  10             166         
written off                                                               
Total net financial investment                 (3,861)        10,715      
Mergers and acquisitions                                                  
Funds received as part of the merger           -              6,141       
Merger costs                                   -              (220)       
Total mergers and acquisitions                 -              5,921       
Equity dividends paid                          (4,669)        (1,529)     
Buy-back of ordinary shares                    (1,471)        (1,077)     
Issue of shares under the terms of the         150            49          
dividend reinvestment scheme                                              
Total financing                                (1,321)        (1,028)     
(Decrease)/increase in cash for the period     (10,679)       14,175      
Reconciliation of net cash flow to movement                               
in net funds                                                              
(Decrease)/increase in cash for the period     (10,679)       14,175      
Net funds at the start of the period           15,693         1,518       
Net funds at the end of the period             5,014          15,693      

In June 2005 the Company merged, by means of a Scheme of Arrangement
("Scheme"), with Quester VCT 2 plc and Quester VCT 3 plc. Under the Scheme, all
the shares of Quester VCT 2 and Quester VCT 3 (excluding one share in each
company) were cancelled and new shares in the Company were issued to
shareholders of Quester VCT 2 and Quester VCT 3. The assets and liabilities of
Quester VCT 2 and Quester VCT 3 were transferred to the Company, following the
merger, for cash on completion.



                      Share    Share    Capital Special    Fair  Profit Total 
                    capital  premium redemption reserve   value     and £'000
                      £'000  account    reserve   £'000 reserve    loss        
                               £'000      £'000           £'000  account        
At 1 March 2006       5,992   37,359        260   4,348 (2,477)   7,853  53,335
Shares issued under      18      132          -       -       -       -     150
the Dividend                                                                   
Reinvestment Scheme                                                            
Cancellation of           - (37,440)          -  37,440       -       -       -
Share Premium                                                                  
Shares purchased      (205)        -        205 (1,471)       -       - (1,471)
for cancellation                                                               
Realisation of            -        -          -       -     228   (228)       -
prior years' net                                                               
unrealised losses                                                              
on investments                                                                 
Transfer from             -        -          - (1,497)       -   1,497       -
Special Reserve to                                                             
profit and loss                                                                
Unrealised gain on        -        -          -       -   1,147 (1,147)       -
revaluation of                                                                 
Profit on ordinary        -        -          -       -       -     983     983
activities after                                                               
Dividends                 -        -          -       -       - (4,669) (4,669)
At 28 February 2007   5,805       51        465  38,820 (1,102)   4,289  48,328


1. Profit on investments at fair value through profit or loss

                                                      2007          2006       
                                                      £'000         £'000      
Realised net gain on disposal                         1,155         4,193      
Write-off of investments                              (600)         (729)      
Recoveries made in respect of investments previously  10            166        
written off                                                                    
Net unrealised gain/(loss) on revaluation of          1,147         (574)      
                                                      1,712         3,056      

2. Income

                                                    2007            2006       
                                                    £'000           £'000      
Dividend income                                                                
Unlisted companies                                  67              228        
Listed companies                                    368             405        
Interest receivable                                                            
Listed fixed interest securities                    106             162        
Loans to venture capital companies                  60              124        
Bank deposits                                       90              82         
Other income                                        218             69         
                                                    909             1,070      

3. Investment management fee

Quester Capital Management Limited ("QCML") provides investment management
services to the Company under an amended and restated agreement dated 20 May

QCML is a wholly owned subsidiary of Querist Limited, a company in which APG
Holmes is a beneficial shareholder. APG Holmes is an executive director of

QCML is entitled to receive a management fee, determined quarterly in arrears,
at the annual rate of 2.0% on the value of the Company's net assets at the end
of each quarter. The annual rate in 2006 was 2.5% until the date of the merger
of Quester VCT plc, Quester VCT 2 plc and Quester VCT 3 plc on 29 June 2005 and
2.0% thereafter. The fee is capped to ensure that the Company's running costs
do not exceed 3.25% of closing net asset value. The comparative management fee
of £778,000 excludes £319,000 relating to Quester VCT 2 and Quester VCT 3 prior
to the merger.

Upon the Company having paid or declared cash dividends (excluding 1.0p of the
special interim dividend paid post the merger) of an aggregate amount equal to
20% or more of the Company's Formula Asset Value (FAV) by 28 February 2009, the
Manager will become entitled to an additional performance incentive fee of 2%
of the FAV. The performance fee will be increased by a further 1% should cash
dividends paid or declared by the same date equal to 40% or more of the FAV. At
28 February 2007, £5 million (9% of the FAV) had been paid to shareholders as
dividend counting against the target.

QCML also provides administrative and secretarial services to the Company for
which it was entitled to a fee of £61,000 for the year (2006: £55,000) adjusted
annually in line with changes in the RPI.

 4. Other expenses
                                                   2007            2006                        
                                                   £'000           £'000       
Administration and secretarial services            61              55          
Directors' remuneration (note 5)                   57              52          
Auditor's remuneration                                                         
Fees payable to the Company's auditor for the      14              14          
audit of the financial statements                                              
Fees payable to the Company's auditor and its      16              9           
associates for other services relating to taxation                             
Legal and professional expenses                    48              47          
Insurance                                          35              32          
UKLA, LSE and registrar's fees                     26              38          
Management fees payable to OLIM Limited            64              44          
Transaction costs                                  7               20          
Irrecoverable VAT                                  52              42          
Other                                              75              29          
                                                   455             382         

 5. Directors' remuneration

                                                   2007           2006                        
                                                   £'000           £'000       
Fees paid to directors                             -               4           
Amounts paid to third parties, excluding VAT, in   57              48          
consideration for the services of directors                                    
                                                   57              52          

 6. Tax on ordinary activities
                                                 2007             2006                        
                                                 £'000            £'000                       
Corporation tax                                    -               -           
Reconciliation of profit on ordinary activities to                             
Profit on ordinary activities before tax           983             2,862       
Tax on profit on ordinary activities at standard   295             859         
UK corporation tax rate of 30% (2006: 30%)                                     
Effects of:                                                                    
Non taxable items - UK dividends and net gains on  (644)           (1,107)     
Unutilised management expenses                     349             248         
Corporation tax payable                            -               -           

 7. Dividends paid
                                                    2007           2006                        
                                                   £'000          £'000                       
Interim dividend: 1.25p per share paid 11 November -               1,529       
Final dividend: 2.5p per share paid 3 July 2006    3,006           -           
Interim dividend: 1.4p per share paid 22 December  1,663           -           
                                                   4,669           1,529       

The directors declared a second interim dividend of 2.8 pence per share,
equivalent to £3,299,000, in respect of the year ending 28 February 2007 that
was paid on 21 March 2007 and consequently has not been recognised in these

 8. Earnings per share
The profit per share of 0.8p (2006: 3.3p) is based on the profit on ordinary
activities after tax of £983,000 (2006: £2,862,000) and on the weighted average
number of ordinary shares in issue during the year of 118,098,926 (2006:
85,789,025). There is no dilution effect in respect of the period ended 28
February 2007 (28 February 2006: nil).

 9. Net asset value
The net asset value per share as at 28 February 2007 of 41.6p (2006: 44.5p) is
based on net assets of £48,328,000 (2006: £53,335,000) divided by the
116,108,239 ordinary shares in issue at that date (2006: 119,848,625). There is
no dilution effect in respect of the year ended 28 February 2007 (2006: nil).

10. Financial information
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 23 May 2007. It is not the Company's statutory
accounts. The statutory accounts for the financial year ended 28 February 2006
have been delivered to the Registrar of Companies and received an audit report
which was unqualified, did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying the report, and
did not contain statements under section 237(2) and (3) of the Companies Act
1985. The statutory accounts for the financial year ended 28 February 2007 have
not yet been approved, audited or filed.

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

Financial Services Authority

25 The North Colonnade

Canary Wharf


E14 5HS

Copies of the full financial statements for the period ended 28 February 2007
are expected to be posted to shareholders on 24 May 2007 and will be available
to the public at the registered office of the Company at 29 Queen Anne's Gate,
London, SW1H 9BU.


a d v e r t i s e m e n t