TIDMNOA
Noble AIM VCT plc
Half-yearly Report
for the six months ended 31 August 2009
Overview
Corporate Objective
The objective of Noble AIM VCT plc (the "Company") is to provide an attractive return to shareholders. The Company seeks
to generate tax free capital gains and income by building and maintaining a well-balanced portfolio of qualifying
investments for the purposes of the tax legislation under which the Company operates. The qualifying investments are
predominantly in AIM-traded companies or companies expected to be traded on AIM in the future. The Company is managed as
a venture capital trust in order that shareholders may benefit from the tax reliefs available.
Investment Policy
The investment objectives of the Company are to generate tax free capital gains and income on investors' funds through
investment primarily in AIM-traded companies whilst mitigating risk appropriately within the framework of the structural
requirements imposed on all VCTs.
Key data for the six months to 31 August 2009
31/08/0931/08/0828/02/09
(unaudited) (unaudited)(audited)
Total Net Asset Value ("NAV") GBP23.3m GBP25.8m GBP18.3m
Shares in issue 35,743,209 30,771,811 35,257,187
NAV per share 65.2p 83.8p 51.9p
Share price 63.0p 83.0p 56.0p
Market capitalisation GBP22.5m GBP25.5m GBP19.7m
Ordinary share price (discount)/premium
to NAV (3.4)% (1.0)% 7.9%
NAV per share plus cumulative dividends
paid to date 82.5p 97.6p 67.2p
Total return (aggregate of NAV plus
dividends paid) for the period 30.3% (10.7)% (44.3)%
Total return of FTSE AIM All-share index
for the period 53.4% (20.8)% (61.3)%
Total return (aggregate of NAV plus
dividends paid) since inception (17.7)% (0.2)% (36.7)%
Total return of FTSE AIM All-share index
since inception (44.6)% (27.0)% (63.9)%
Highlights
·Investments totalling GBP7.2m made in 33 companies (includes 10 follow on investments) in the six months ended 31 August
2009.
·2009 Top Up offer launched in March 2009 has raised GBP2m in the six months ended 31 August 2009. The offer closed on 30
June 2009.
·A new fundraising was launched in August 2009.
Chairman's Statement
The last six months have seen markets revert to normality faster than most commentators expected, despite continuing
nervousness about unprecedented levels of government debt. The Company's NAV has seen a welcome rise and the fortunes
of most of the portfolio companies have improved. Having fallen more slowly than the benchmark index on the way down,
the rate of bounce back in the Company's NAV has been slower, but picked up speed towards the end of the period, as
detailed in the Fund Manager's Review. The improvement has continued since the period end and the NAV per share as at
22 October 2009 was 71.6p per shares compared to 65.2p per sahre at 31 August 2009.
The net result for the six months to 31 August 2009 has been a total return of 30.3%, compared with a rise of 53.4% for
the AIM All- Share total return index. A final dividend for the year ended 28 February 2009 of 2p per share was paid to
shareholders during August. An interim dividend of 1.5p per share will be paid on 11 December 2009 to shareholders on
the register at 13 November 2009.
Throughout the financial crisis of the last eighteen months the board and the manager have focused on maintaining the
size of the Company so that shareholders can remain confident in its long term viability. The Company's intention was
to have cash to invest at a time when market sentiment was at its lowest so that the seeds of future returns could be
planted. The success of historical fund raisings and the introduction of the enhanced share buyback offer have
replenished the Company's long term funding. Having started as one of the smallest AIM VCTs to float in 2005 it is now
one of the largest from that generation.
The manager has been able to make some substantial new VCT qualifying investments during late 2008 and early 2009 mainly
in the form of convertible loans. Notwithstanding the likelihood of further economic difficulties to come, this should
leave the portfolio well placed to create value for shareholders over the coming years. Introducing a component of debt
investment alongside that of equity should serve to lower the overall risk profile of the portfolio. As I write the
first of these convertible loan note investments in Cantono, which dates from December 2008, has already been realised
with profit following the trade sale of their data centre.
After the closure of the Top Up Offer earlier in June, a full Prospectus Offer was sent to shareholders during August.
This enables shareholders who wish to make additional investments in new shares to do so directly with 3% of the intial
costs rebated in the form of additional shares. It also enables those who bought shares prior to 6 April 2006, and who
have not already done so, to take part in an enhanced buyback offer on the same terms as before. For legal reasons,
details were sent to all shareholders even if they have already taken part in an enhanced buyback offer. A shareholder
statement was enclosed with the Offer documents to help shareholders identify whether they hold any shares suitable for
the enhanced buyback. The first allotment of new shares under this offer took place on 2 October raising GBP652,000.
The manager always welcomes enquiries or comments from shareholders and can be contacted via Rachel le Derf on 0131 225
9667 or by email at VCTenquiries@noblegp.com.
Simon Miller
Chairman
30 October 2009
Fund Manager's Review
Market Review
The six month period began just a few weeks before the point of maximum market despair resulting from the global credit
crunch. At that point there was talk of further bank bailouts. The spread between inter-bank lending rates and base
rates (known in the US as the "TED spread", widely regarded as one of the key indicators of the credit crunch) had
fallen but remained stubbornly high. Government debt forecasts were escalating out of sight and towards the end of 2008
companies were reporting trading conditions in free fall with little change in early 2009. As a result cash deposits
around the world spiked to record levels despite cash interest rates being at lifetime lows. A few commentators,
notably Anthony Bolton, cited these cash levels and the extreme bearish consensus as reasons to buy the market. But
these were solitary voices amidst the fear that things might get worse.
Towards the end of March the market stopped falling and by April the TED spread began to fall back towards the range of
normality. Strategists, although alarmed by the uncontrollable rise of government debt, could see that the massive
unwinding of inventory levels, which took place across so many industries in late 2008, would begin to reverse to normal
levels later in 2009, creating an economic bounce across a broad front. The extent of the falls in equity prices, often
to extreme levels, laid the foundations for the sharp rally which is still in progress at the time of writing. The
change of broad sentiment from abject fear to exuberance is never immediate, and is normally drawn out over a number of
years. The last six month period has been mainly characterised by the extraordinary speed with which sentiment has
become more positive. Rarely has the market climbed such a steep wall of worry. All participants know that the risks
of a further economic setback are significant and that governments will need to start spending cuts during 2010.
Nonetheless it is remarkable how far the market has come back in such a short space of time. The change of leadership
in the US during early 2009 has clearly played a big part in this restoration of confidence.
Performance
The growth in the Company's NAV during the period was 30.3%. This compares to a 53.4% rise in the AIM All-Share total
return index (the "Index"). The portfolio, which fell substantially less than the Index on the way down, has lagged
behind the recovery of the Index on the way up. However since launch the total return of the Company has outperformed
the AIM All-Share index by 26.7%. There were three factors to note which contributed to the slower rise in the NAV
relative to the benchmark Index in the first half of the year.
Firstly, having reached the third anniversary of funds raised during 2006, additional investment in a number of further
VCT qualifying deals was required, in order to meet the HMRC VCT tests. Some investment was made before the period end
and some shortly afterwards. This meant raising and carrying a significant level of cash in the portfolio to be ready
to make these investments as they arose. This had to be done in advance because the level of liquidity in the market
had become so low.
Secondly, some new qualifying investments were made via convertible bonds. This was made possible by the extreme dip in
market sentiment. These convertible bonds carry a lower risk profile than equity investments, but give up the initial
part of a rally in the equity prices, as the conversion price tends to be priced at a premium to market price. Having
convertible bonds within the portfolio has improved the income generated for the Company, and has also improved the
overall balance of risks within the qualifying portfolio, whilst reducing its volatility.
Thirdly, the rally in the AIM All-Share index began initially amongst the larger companies in the Index. The Company's
portfolio however is skewed towards qualifying investments in companies at the smaller end of the spectrum. Towards
the end of the period, however, this factor began to recede and smaller companies on AIM started to rally. This resulted
in a stronger performance of the portfolio later in the six month period.
The two biggest contributors to performance in the first half were both convertible bonds. This was in part due to the
fact that they are two of the largest holdings in the portfolio. The first was the recent loan made to Hardide, where
the conversion terms were struck at a 50% premium to the price at which investors bought ordinary shares. The Company's
loan attracts an 8% interest rate and is currently the only debt in the business. Subsequent to the re-financing, the
shares have rallied well above our conversion price. In these circumstances the loan is valued as if it were converted
to equity, although it remains a much more protected instrument with a yield attached. The second was the secured loan
made to Cantono. Cantono initially ran into difficulties after the acquirer of their managed services businesses (a
company called Xploite) walked away from their obligation to pay deferred consideration in January, leaving the company
underfunded for its short term plans. With a degree of extra funding the company did eventually sell its large data
centre in Fareham to Scottish & Southern Energy. Cantono was then put into administration and the proceeds from the
sale were paid out to loan note holders with a significant redemption premium. Some of the proceeds have been retained
within the business in order to fund litigation in relation to claims arising out of the unpaid deferred consideration
from Xploite. The return on the investment prior to any return from this litigation has been a gain of around 42% over
a 10 month period. It is hoped to add to this through proceeds from the litigation.
Other notable successes in the portfolio were PureCircle, which was sold after a very strong rise, MDM Engineering
Group, which recovered rapidly after an excessive fall in the share price, IS Pharma, which delivered strong results,
and Emerald Energy, which was taken over by Sinochem of China for a good premium. On the day the bid was formalised the
holding was switched into Gulfsands Petroleum, which owns the other half of the same asset in Syria.
On the negative side several of the unquoted holdings were written down in value during the early part of the period.
The most notable were SpinVox and TMO Renewables, both of which raised money near the peak of the market turmoil.
SpinVox, the voice to text service provider, has proven very disappointing, having been apparently profligate with funds
raised and consistently behind its sales forecasts. The holding is substantially written down and it is understood that
the company hopes to conclude a trade sale over the next few months. TMO Renewables attempted to raise money over the
summer of 2008, but was delayed by the funding problems of a large shareholder. With so much uncertainty the
fundraising was put on hold. By the time it was re-initiated markets had fallen. In order to get the funding concluded
during such difficult times the terms had to be aggressive. Around one third of the Company's holding was sold last
year for an amount greater than the Company's original investment. Most of this money was reinvested in the
fundraising, but terms were negotiated to do this via a convertible loan which converts into shares and warrants. TMO
Renewables set out to raise GBP8m, and just as it was closing received offers of a further GBP3m, so raised a total of GBP11m.
GBP2m of this came from a new strategic Chinese investor and a further GBP4m came from an agri-business with a strategic
investment arm.
Amongst the listed holdings the biggest detractors from performance were London Capital Group Holdings Holdings, Optare
and Bglobal. London Capital Group had disappointing profits in the first half of the year. There is however confidence
that an improvement is not far away as it increased its rate of customer acquisition and the level of customer deposits.
Optare and Bglobal, both qualifying holdings, came very close to running out of funds, unfortunately so much so that
the holdings were sold shortly before the financial and credit markets eased enough for both companies to find
solutions. This is a frustrating outcome, but one from which it is hard to be immune during the extreme volatility of
the last 18 months.
Transactions
Qualifying Portfolio
GBP1.3m of new qualifying investments were made during the period, the bulk of which went into convertible loans to
Hardide and TMO Renewables. Smaller equity investments were made in Lipoxen, a drug discovery business, and Enfis
Group, an advanced LED lighting business, some of which has already been realised at a significant profit.
Non Qualifying Portfolio
As the rally got underway there was more active investment in the non qualifying portfolio, whilst trying to retain
reasonable cash balances for qualifying investments. Notable new investments include Chemring Group, ImmunoDiagnostic
Systems Holdings, Kentz Corporation and Niger Uranium. Funds were raised by selling a number of holdings including
Severfield-Rowan, AMEC, Hampson Industries and The Stanley Gibbons Group. The aim has been to invest in companies which
do not depend on a strong economic recovery to do well, but where the selling pressure in equity markets had caused
share prices to fall excessively due to lack of liquidity, often just because they were small
Outlook
It is difficult to escape the conclusion that the UK economy is in for a difficult ride over the next few years and that
the currency is likely to come under pressure as issuance of government debt increases. Rises in interest rates when
they do finally come may be offset by a sharp rise in inflation. This inflation, if it comes, is likely to be induced
by rising commodity prices globally. The Chinese economy is now playing an increasingly large role in the direction of
stock markets generally and the Shanghai Stock Exchange index has become something of a leading indicator for other
markets. If China continues its long run rate of near 10% GDP growth then world economic growth is probably
underpinned, but supplies of several strategic commodities could come under severe pressure, leading to painful price
rises. If Chinese growth falls over then the prospects of another global recession increase greatly, making the current
upswing rather short lived.
As managers we are targeting investments in companies with robust overseas earnings, those which produce strategic
commodities, and companies which are not dependent on a cyclical upswing to do well. Internationally we favour
companies which can benefit from the growth of Asian economies. Domestically we favour companies exposed to the energy
sector, and those which can play an effective role in helping to reduce government expenditure.
Dr Paul Jourdan
Noble Fund Managers Limited
30 October 2009
Ten Largest Holdings
as at 31 August 2009
ValuationFund
Company Sector GBP %
Hardide plc Basic materials1,614,5366.9
Deltex Medical Group plc Health care1,309,0265.6
Cantono plc Technology 1,185,5475.1
Brulines Group plc Industrials 805,6973.5
IS Pharma plc Health care 660,3172.8
Managed Support Services plc Industrials 626,5302.7
Melorio plc Industrials 611,2502.6
Craneware plc Technology 587,3942.5
Rurelec plc Utilities 585,1382.5
Vectura Group plc Health care 572,2202.5
Representing approximately 36.7% of
shareholders' funds 8,557,65536.7
Sector Allocation
as at 31 August 2009
Fund
FTSE Sector %
Industrials 21.0
Health care 19.0
Basic materials 15.2
Technology 14.5
Financials 9.0
Oil & Gas 8.0
Consumer services5.4
Utilities 3.8
Telecommunications1.4
Consumer goods 0.7
Food producers 0.7
Net current assets1.3
100.0
Investment Portfolio
as at 31 August 2009
Number Book% of
of cost ValuationFund shares in
FTSE Sector Shares GBP GBP % Issue
Oil & Gas 1,510,252 1,864,539 8.0
Aurelian Oil and Gas plc 1,250,000 150,000 240,625 1.0 0.54
Gulfsands Petroleum plc 170,000 352,513 390,575 1.7 0.14
Hallin Marine Subsea
International plc 170,275 193,513 180,917 0.8 0.41
Iofina plc 415,385 244,012 340,616 1.5 0.40
Kentz Corporation Ltd 220,000 244,859 399,850 1.7 0.19
Velosi Ltd 351,500 325,355 311,956 1.3 0.75
Basic materials 3,528,469 3,543,449 15.2
Centamin Egypt Ltd 325,989 199,395 277,906 1.2 0.03
Great Eastern Energy
Corporation Ltd 127,447 294,999 417,070 1.8 0.02
Hardide plc* 6,200,000 775,000 51,088 0.2 0.74
Hardide plc 8% Convertible
Loan Stock 2013*# 225,000 225,000 409,995 1.8 n/a
Hardide plc 8% Convertible
Loan Stock 2014*# 633,000 633,000 1,153,453 4.9 n/a
Niger Uranium Ltd 970,000 210,220 310,400 1.3 0.83
Plastics Capital plc* 295,000 295,000 80,387 0.4 1.10
TMO Renewables Limited*#972,600 295,855 243,150 1.0 0.87
TMO Renewables Limited
Loan Stock*# 300,000 300,000 300,000 1.3 n/a
Vitec Group Limited*# 300,000 300,000 300,000 1.3 4.39
Industrials 5,184,483 4,883,86221.0
Brulines Group plc* 740,871 921,497 805,697 3.5 2.65
Chemring Group plc 24,000 491,008 501,120 2.2 0.07
Croma Group plc* 4,000,000 84,960 84,960 0.4 2.25
Croma Group plc 8% Loan Notes
20/06/2011*# 50,000 50,000 50,000 0.2 n/a
Enfis Group plc* 347,550 125,118 216,350 0.9 2.32
Globus Maritime Ltd 76,135 333,896 51,201 0.2 0.26
Hargreaves Services plc 80,269 442,998 471,580 2.0 0.30
Hellenic Carriers Ltd 150,500 368,904 88,419 0.4 0.33
ID Data plc* 2,250,000 - - - 0.17
Legion Group plc* 8,250,000 288,750 144,293 0.6 1.39
Managed Support Services plc* 6,602,000 528,160 626,530 2.7 4.00
MDM Engineering Group Ltd 308,280 456,095 498,643 2.2 0.83
Melorio plc| 500,000 529,905 611,250 2.6 1.28
Mount Engineering plc* 100,000 67,250 54,250 0.2 0.43
Pressure Technologies plc|122,206 207,549 207,444 0.9 1.08
XP Power Ltd 150,000 288,393 472,125 2.0 0.78
Consumer goods 136,000 172,000 0.7
Sprue Aegis plc* 800,000 136,000 172,000 0.7 2.37
Health care 4,676,291 4,417,52219.0
Abcam plc 23,656 114,375 168,667 0.7 0.07
Chromogenex plc* 2,300,000 253,000 7,452 - 3.77
ClearStream Technologies
Group plc 1,575,000 315,000 381,937 1.6 3.42
CustomVis Deferred# 2,000,000 - - - n/a
Deltex Medical Group plc* 3,386,958 703,913 309,026 1.3 3.31
Deltex Medical Group plc
Guaranteed Unsecured
Convertible Loan Note*# 1,000,000 1,000,000 1,000,000 4.3 n/a
Eco Animal Health Group plc 50,000 49,875 82,375 0.4 0.11
Immunodiagnostic Systems
Holdings plc 84,250 273,246 296,771 1.3 0.32
ImmuPharma plc 313,073 271,398 276,287 1.2 0.40
IS Pharma plc* 756,810 537,190 660,317 2.8 2.46
Kiotech International plc* 3,600,000 252,000 197,964 0.9 1.43
Lipoxen plc* 2,551,000 216,835 395,405 1.7 1.66
Neuropharm Group plc* 75,691 96,128 24,032 0.1 0.24
Taihua plc 601,000 132,850 45,069 0.2 0.74
Vectura Group plc 680,000 460,481 572,220 2.5 0.21
Consumer services 2,228,977 1,260,455 5.4
Air Touring Group plc* 600,000 300,000 46,500 0.2 4.91
Apace Media plc `B' Deferred*#2,333,333 - - - n/a
DM plc| 4,253,216 538,896 372,113 1.6 2.56
Essentially Group Ltd* 3,911,000 432,814 234,621 1.0 1.73
Expansys plc* 790,667 429,346 19,759 0.1 0.44
Hotel Corporation (The) plc314,477 252,086 321,553 1.4 0.63
Skywest Airlines Ltd 2,875,000 275,835 265,909 1.1 1.48
Telecommunications 186,365 324,750 1.4
Avanti Communications
Group plc* 100,000 186,365 324,750 1.4 0.24
Utilities 868,530 894,513 3.8
Novera Energy plc 687,500 262,494 309,375 1.3 0.47
Rurelec plc 3,392,105 606,036 585,138 2.5 1.65
Financials 2,961,416 2,090,016 9.0
ADVFN plc* 10,560,330 276,296 277,103 1.2 1.70
Ambrian Capital plc 826,573 221,823 252,105 1.1 0.77
Brookwell Limited `A' Preference391,562 342,036 194,802 0.8 3.09
Brookwell Limited `B' Preference188,456 188,456 197,408 0.9 1.76
Green CO2 plc* 500,000 14,995 6,245 - 0.31
H&T Group plc 141,976 247,341 379,076 1.6 0.40
Invocas Group plc* 368,000 332,285 109,480 0.5 1.29
KSK Emerging India Energy
Fund Limited 465,000 228,780 139,500 0.6 0.49
London Asia Capital plc 1,580,000 255,202 45,409 0.2 0.49
London Capital Group
Holdings plc 197,356 504,202 418,888 1.8 0.51
TSI Limited# 700,000 350,000 70,000 0.3 1.20
Technology 4,304,342 3,390,89214.5
Alterian plc* 31,763 67,356 46,771 0.2 0.06
Amino Technologies plc 727,500 387,703 329,194 1.4 1.26
Belgravium Technologies plc* 1,128,570 158,000 36,667 0.2 1.12
Brady plc* 246,914 94,445 151,235 0.6 0.88
Cantono plc* 1,021,667 34,224 - - 3.40
Cantono plc Deferred*# 55,000 - - - n/a
Cantono plc Convertible
Loan Stock|# 799,695 799,695 1,185,547 5.1 -
Corero plc* 980 809 365 - 0.06
Corero plc 8% Convertible Loan
Stock 31/07/2011* 42,367 42,261 21,183 0.1 1.41
Craneware plc| 254,008 352,548 587,394 2.5 1.00
Endace Ltd 40,302 155,350 103,677 0.4 0.27
FFastFill plc* 3,550,000 248,500 257,340 1.1 0.89
IDOX plc* 4,290,331 339,232 429,033 1.8 1.25
Publishing Technology plc `B'
Deferred*# 7,500,000 - - - n/a
Pure Wafer plc 1,472,360 351,981 62,561 0.3 5.54
Pure Wafer plc (SubShs claims)5,536,073 - - - -
Software Radio Technology plc*1,150,051 492,731 70,429 0.3 1.18
SpinVox Limited|# 28,272 319,992 48,345 0.2 0.60
Vicorp Group plc 15,966,954 407,663 - - 8.31
Zoo Digital Group plc* 65,256 6,852 16,151 0.1 0.31
Zoo Digital Group 8% Loan
Stock 01/09/2011*# 45,000 45,000 45,000 0.2 n/a
Food producers 150,310 159,269 0.7
New Britain Palm Oil Ltd 42,500 150,310 159,269 0.7 0.03
Total investments 25,735,435 23,001,26798.7
Net current assets 296,024 1.3
Net assets 25,735,435 23,297,291 100.0
*Qualifying holdings.
|Part qualifying holdings.
#Unquoted holdings.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed interest investments, cash and liquid resources. Its principal risks
include market risk, credit risk and liquidity risk. Other risks faced by the Company include economic, investment and
strategic, regulatory, reputational, operational and financial risks as well as the potential for loss of approval as a
VCT. These risks, and the way in which they are managed, are described in more detail under the heading Principal Risks
and Uncertainties within the Directors' Report and Business Review in the Company's Annual Report and Accounts for the
year ended 28 February 2009. The Company's principal risks and uncertainties have not changed materially since the date
of that report.
Responsibility Statement of the Directors
in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
·the condensed set of financial statements has been prepared in accordance with the Statement "Half-yearly financial
reports" issued by the UK Accounting Standards Board;
·the Chairman's Statement and Fund manager's Review (constituting the interim management report) includes a fair review
of the information required by DTR4.2.7R of the Disclosure and Transparency Rules, being an indication of important
events that have occurred during the first six months of the financial year and their impact on the condensed set of
financial statements;
·the Statement of Principal Risks and Uncertainties is a fair review of the information required by DTR4.2.7R, being a
description of the principal risks and uncertainties for the remaining six months of the year; and
·the financial statements include a fair review of the information required by DTR4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or performance of the entity during that period;
and any changes in the related party transactions described in the last annual report that could do so.
For and on behalf of the Board
Simon Miller
Chairman
30 October 2009
Income Statement
for the six months ended 31 August 2009
6 months ended 6 months ended Year ended
31 August 2009 31 August 2008 28 February 2009
(unaudited)(unaudited)(audited)
RevenueCapitalTotalRevenueCapital TotalRevenue Capital Total
Note GBP'000 GBP'000GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on investments - 5,4215,421 - (3,516)(3,516) - (13,697)(13,697)
Income 6237 - 237 233 - 233 575 - 575
Investment management fee(49) (146) (195) (73) (217) (290) (116) (346) (462)
VAT recovered 42 127 169 - - - - - -
Other (expenses)/income (125) (10) (135) (141) (10) (151) (271) 16 (255)
Profit/(loss) on ordinary
activities before taxation 105 5,3925,497 19 (3,743)(3,724) 188 (14,027)(13,839)
Taxation on ordinary activities - - - (2) - (2) (2) - (2)
Profit/(loss) on ordinary
activities after taxation 105 5,3925,497 17 (3,743)(3,726) 186 (14,027)(13,841)
Return per Ordinary share 4 0.30p 15.19p15.49p 0.05p(11.99)p(11.94)p 0.57p (42.94)p(42.37)p
The total column is the profit and loss account of the Company.
The accompanying notes are an integral part of the statement.
All revenue and capital items derive from continuing operations.
No operations were acquired or discontinued during the period.
There were no other recognised gains or losses in the period.
Dividends Paid and Proposed
Six months Six months Year
ended ended ended
31 August 31 August28 February
2009 2008 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Interim dividend for the year
ended 28 February 2009 of 1.5p
per Ordinary share - paid on 5 December 2008 - - 520
Final dividend for year ended 28 February
2009 of 2.0p per Ordinary share - paid
on 14 August 2009 711 - -
Interim dividend for the six months ended
31 August2009 of 1.5p per Ordinary share
- payable on 11 December 2009 536 - -
1,247 - 520
Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 August 2009
Six monthsSix months Year
ended ended ended
31 August 31 August 28 February
2009 2008 2009
(unaudited)(unaudited)(audited)
GBP'000 GBP'000 GBP'000
Opening shareholders' funds 18,292 25,410 25,410
Gain/(loss) for the period 5,497 (3,726) (13,841)
Increase in share capital in issue 1,985 5,421 9,220
Shares issued in connection with asset acquisition- - 1,996
Share buy backs (1,766) (1,329) (3,973)
Dividends paid (711) - (520)
Closing shareholders' funds 23,297 25,776 18,292
The accompanying notes are an integral part of the statement.
Balance Sheet
as at 31 August 2009
31 August 31 August28 February
2009 2008 2009
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair value 23,001 24,253 16,096
Current assets
Debtors 123 235 54
Cash at bank 108 186 478
Investments - liquidity funds 320 2,233 1,864
551 2,654 2,396
Current liabilities
Creditors: amounts falling due within one year 255) (1,131) (200)
Net current assets 296 1,523 2,196
Total assets less current liabilities 3,297 25,776 18,292
Capital and reserves
Called up share capital9 3,573 3,077 3,525
Share premium account 9 13,289 6,738 11,677
Special reserve 9 17,022 22,143 19,499
Capital redemption reserve9 910 177 585
Capital reserve 9 (11,242) (5,830) (16,634)
Revenue reserve 9 (255) (529) (360)
Equity shareholders' funds 23,297 25,776 18,292
Net asset value per share5 65.18p 83.76p 51.88p
The accompanying notes are an integral part of the balance sheet.
Cash Flow Statement
for the six months ended 31 August 2009
Six months endedSix months ended Year ended
31 August 31 August 28 February
2009 2008 2009
(unaudited) (audited) (audited)
Note GBP'000 GBP'000 GBP'000
Operating activities
Investment income received 198 160 525
Deposit interest received 1 41 48
Other interest received 13 - -
Underwriting commission received - 3 3
Investment management fees (173) (288) (513)
VAT recovered 169 - -
Other operating costs (160) (176) (271)
Interest paid (3) (7) (7)
Net cash inflow/(outflow) from operating activities10 45 (267) (215)
Taxation
Overseas tax paid - (2) (2)
Financial investment
Purchase of investments (7,202) (11,632) (20,172)
Disposal/(purchase) of liquidity funds 1,592 (2,233) (1,921)
Disposals of investments 5,610 8,691 17,171
Net cash outflow from financial investment - (5,174) (4,922)
Acquisitions and disposals
Funds received as part of asset acquisition - - 252
Legal costs relating to asset acquisition - - (214)
Net cash inflow from acquisitions - - 38
Dividends
(Payment)/refund of dividends (527) 4 (379)
Net cash outflow before financing (482) (5,439) (5,480)
Financing
Issue of shares 1,971 6,887 10,840
Expenses of the issue of shares (101) (261) (389)
Share buy backs (1,748) (455) (3,973)
Expenses relating to special reserve transfer - (41) (41)
Net cash inflow from financing 122 6,130 6,437
(Decrease)/increase in cash (360) 691 957
Reconciliation of net cash flow to movement in net cash
Net cash at start of period 478 (495) (495)
Currency (losses)/gains (10) (10) 16
Net cash at end of period 108 186 478
(Decrease)/increase in cash during the period (360) 691 957
The accompanying notes are an integral part of the statement.
Notes to the Financial Statements
for the six months ended 31 August 2009
1.The unaudited half-yearly financial results cover the six months ended 31 August 2009 and have been prepared in
accordance with applicable accounting standards and adopting the accounting policies set out in the statutory accounts
for the year ended 28 February 2009 and in accordance with the Statement of Recommended Practice for financial
statements of investment trust companies and venture capital trusts issued January 2009.
2.The financial information set out in this report has not been audited and does not comprise full financial statements
within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 28 February 2009,
which were unqualified, have been lodged with the Registrar of Companies. No statutory accounts in respect of any period
after 28 February 2009 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
3.Copies of the half-yearly report are being sent to all shareholders. Further copies are available free of charge from
the Company's registered office.
4.The return per share is based on the return attributable to shareholders for the six months ended 31 August 2009 and
the weighted average number of shares in issue during the period of 35,498,875 (31 August 2008: 31,229,597, 28 February
2009: 32,663,155).
5.The net asset value per share at 31 August 2009 is based on net assets of GBP23,297,000 (31 August 2008: GBP25,776,000,
28 February 2009: GBP18,292,000) and the number of shares in issue of 35,743,209 (31 August 2008: 30,771,811; 28 February
2009: 35,257,187).
6. Income
Six months Six months Year
ended ended ended
31 August 31 August28 February
2009 2008 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Income:
Dividends from UK companies 146 152 422
Dividends from overseas companies 10 7 7
UK loan stock interest 62 20 52
Interest from bank deposits - 40 47
Interest from liquidity funds 6 11 44
Other interest 13 - -
Underwriting commission - 3 3
237 233 575
7.Dividends for the year ending 28 February 2009 of 2.0 pence per share, totalling GBP711,000 (31 August 2008: nil and 28
February 2009: GBP520,000) have been paid.
8.The effective rate of tax for the six months ended 31 August 2009 is nil due to the utilisation of losses brought
forward from previous years. The charge for the period relates to withholding tax on dividends received.
9.Unaudited reserves:
Capital Total
Share Share Special redemption Capital Revenue Capital &
capital premium reserve reserve reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 March 2009 3,525 11,677 19,499 585 (16,634) (360) 18,292
Shares issued 373 1,782 - -- - 2,155
Share issue expenses - (170) - -- - (170)
Repurchase of shares (325) - (1,766) 325- - (1,766)
Dividends paid - - (711) -- - (711)
Revenue profits - - - --105105
Loss on disposal of investments - - - - (1,492) - (1,492)
Gain on revaluation of investment- - - - 6,913 - 6,913
Other capital gains/(losses) - - - - (29) -(29)
At 31 August 2009 3,573 13,289 17,022 910 (11,242) (255) 23,297
At 31 August 2009, the capital reserve constitutes realised losses of GBP8,519,000 (28 February 2009: GBP6,998,000 loss),
gains that are considered readily convertible to cash and therefore deemed realised of GBP746,000 (28 February 2009:
GBP5,000 loss) and unrealised losses of GBP3,469,000 (28 February 2009: GBP9,631,000).
Investment holding losses included in the capital reserve at 31 August 2009 amount to GBP2,723,000 (28 February 2009:
GBP9,636,000).
Distributable reserves comprise the special reserve, the revenue reserve and realised gains and losses included in the
capital reserve. In addition, net unrealised losses of GBP3,469,000 (28 February 2009: GBP9,631,000 loss) on investments
held at the period end are deducted from distributable reserves. At 31 August 2009, the amount of reserves deemed
distributable is GBP5,525,000 (28 February 2009: GBP2,505,000), a net movement in the period of GBP3,020,000. The net
movement is comprised of profit on ordinary activities included in the income statement of GBP5,497,000, less the
repurchase of shares of GBP1,766,000 and dividends paid of GBP711,000.
10.Reconciliation of profit/(loss) on ordinary activities before taxation to net cash inflow/(outflow) from operating
activities
Six months Six months Year
ended ended ended
31 August 31 August28 February
2009 2008 2009
(unaudited)(unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit/(loss) on ordinary activities before taxation 5,497 (3,724) (13,839)
Net (gain)/loss on investments (5,421) 3,516 13,697
(Increase)/decrease in debtors (41) (30) 1
Decrease in creditors - (39) (58)
Currency losses/(gains) 10 10 (16)
Net cash inflow/(outflow) from operating activities 45 (267) (215)
11.Related Parties
Noble Fund Managers ("Noble") manages the investments of the Company. The Manager also provides or procures the
provision of secretarial, administration and custodian services to the Company. Annual running costs, being the
directors' and manager's fees, professional fees and the costs incurred by the Company in the ordinary course of its
business (but excluding any performance fee payable to Noble, irrecoverable VAT and exceptional costs, including wind-up
costs), are capped at 3.5 per cent. of the Company's average net assets during each financial year, any excess being met
by Noble by way of a reduction in future management fees.
During the period, the Company was charged sums by Noble Group companies. The relationships and amounts charged during
the year included:
Noble Fund Managers Limited charged the Company management fees of GBP195,000 (31 August 2008: GBP290,000 including VAT, 28
February 2009: GBP462,000). Noble Corporate Management Limited charged the Company administration and secretarial fees of
GBP32,000 (31 August 2008: GBP33,000, 28 February 2009: GBP56,000) including irrecoverable VAT.
12.VAT on management fees
As a result of an announcement by HM Revenue & Customs that it accepts that the fund management of VCTs should have
fallen within the VAT exemption for fund management services introduced on 1 January 1990, HM Revenue & Customs now
invites claims for VAT charged retrospectively for certain periods.
During July 2009 the Company received GBP182,951 of VAT and interest in respect of VAT paid on fees to First State
Investment Management (UK) Limited, the former manager. Noble are in the process of agreeing with HM Revenue and
Customs the amount due in respect of fees paid to Noble and as such an amount for this portion has not been included as
an asset in the accounts.
Shareholder Information
Dividends
Shareholders who wish to have future dividends reinvested in the Company's shares or who wish to have dividends paid
directly into their bank account rather than sent by cheque to their registered address can complete a mandate form for
either purpose. Mandates can be obtained by telephoning the Company's registrar on 0870 703 6382 or by writing to them
at Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol, BS99 3FA.
Share price
The Company's shares are listed on the London Stock Exchange. The mid-price of the Company's shares is given daily in
the Financial Times in the Investment Companies section of the London Share Service.
Share certificates
Share certificates under the name of First State Investments AIM VCT plc remain valid and do not need to be changed.
Net asset value per share
The Company's net asset value per share as at 31 August 2009 was 65.2p. The Company normally announces its net asset
value per share on a weekly basis. Net asset value per share information can be found on Noble Group's website:
http://www.noblegp.com/x/services_invest_equity_aim_vct.html
Financial calendar
November 2009 Half-yearly report for the six months ended 31 August 2009 will be circulated to shareholders
December 2009 Payment of interim dividend of 1.5p per Ordinary share
January 2010 Interim Management Statement
28 February 2010 Year-end
May 2010 Announcement of final results for the year ending 28 February 2010
July 2010Annual General Meeting
Enquiries
Shareholders should contact Computershare with any queries including change of address, queries regarding share and tax
certificates and dividend mandate forms:
Computershare (Company Registrar)
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
www.computershare.com/investor
0870 703 0137
Shareholder helpline
The shareholder helpline is available on UK business days between Monday and Friday, 8.30am to 5pm. The helpline
contains automated self-service functionality which is available 24 hours a day, 7 days a week. Using your Shareholder
Reference Number which is available on your share certificate or dividend tax voucher, Computershare's self-service
functionality will let you do the following things:
Automated Functions
·confirm the latest share price
·confirm your current shareholding balance
·confirm payment history
·order a Change of Address, Dividend Mandate or Stock Transfer Form
email: web.queries@computershare.co.uk
Tel: 0870 703 0137 (calls charged at national rate)
Investors who hold shares in their own name can check their holdings on Computershare's website www.computershare.com.
Please note that to access this facility investors will need to quote the reference number shown on their certificate.
Alternatively, by registering for the Investors' Centre facility on Computershare's website, investors can view details
of their holdings for which Computershare is Registrar, as well as access additional facilities and documentation.
Please see www.computershare.com/investor for further information.
Corporate Information
Directors
Simon Miller (Chairman)
Peter Lawrence
Charles Pinney
All are non-executive Directors
Registered office
76 George Street
Edinburgh
EH2 3BU
Broker VCT tax adviser
Noble & Company Limited PricewaterhouseCoopers
76 George Street 1 Embankment Place
Edinburgh London
EH2 3BU WC2N 6RH
Secretary Registrar
Noble Corporate Management Computershare Investor Services PLC
Limited The Pavilions
76 George Street Bridgwater Road
Edinburgh Bristol
EH2 3BU BS99 6ZZ
0131 225 9677 0870 703 0137
Fund Manager Bankers
Noble Fund Managers Limited Citigroup Corporate & Investment Banking
76 George Street Citigroup Centre
Edinburgh Canada Square
EH2 3BU Canary Wharf
London
E14 5LB
Auditors
KPMG Audit Plc
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EG
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