7th Nov 2006 11:25
Avanti Capital PLC07 November 2006 Avanti Capital plc announces its results for the year ended 30 June 2006. HIGHLIGHTS • Since June 2005, net assets (excluding the accounting effects of the consolidation of Barclub Limited) up from 185 pence per ordinary share to 189 pence per ordinary share. • Net asset values (excluding the accounting effects of the consolidation of Barclub Limited) per Avanti share by category: Investment Carrying value as at 30 June 2006 (pence per share) mBlox 65 Barclub 89 Espresso 4 Medcenter 3 Others 2 Cash (net of liabilities) 19 Property (and other assets) 7 Total 189 • mBlox closes US$25 million fund-raising in February 2006. mBlox carrying value rises from £1.83 million to £5.6 million, including the further investment. • The structure under which the company is managed has been modified. • Buy back of shares continued with purchases of 1,362,000 ordinary shares at 150 pence per ordinary share. ENQUIRIES: Avanti Capital Plc Tel: 020 7070 7070 Julian FellermanRichard Kleiner Company statement Review As announced by the company on 9 October 2006, at the beginning of June 2006,the board began a review of the options open to the company in relation to itsfuture structure. The catalyst for this exercise was the making of a furtherloan of £2.5m to Barvest prior to the restructuring exercise successfullyimplemented at the end of June 2006. The board had hoped that the Po Na Nabusiness (as restructured) would be sold in the relative short term, however,although the business continues to trade ahead of forecast, to date, an offer atan acceptable level has not been forthcoming. The board considered amongst other options whether shareholders best interestswould be served by re-investing the proceeds from future realisations or whetherfurther funds for new investments should be raised by the company by the issueof new shares. The board concluded that the company should be regarded in thesame way as a fund that has fully invested its capital. Accordingly, the boarddecided that the company would not presently be making any new investments, butwould instead concentrate on maximising the value of the investments currentlyheld. The company will however provide financial support to the existingportfolio. When realisations are made, the board currently intends to use the proceeds toreturn monies to shareholders in the most efficient manner available, initiallythrough purchases in the market by the company of its own shares. Theimplementation of this policy will be subject to the company having sufficientdistributable reserves to make such market purchases, the board having therequisite authority to make such purchases and the prevailing price of ordinaryshares available in the market at the relevant time. Once this route has beenexhausted, alternative methods will be considered and if in the best interestsof shareholders, pursued. The structure under which the company is managed has been modified. Full detailsof these modifications were set out in the announcement made by the company on 9October 2006. Results of the Group In order to reflect the underlying commercial value of the group's net assets,we have provided by way of additional information to our shareholders,supplementary information comprising unaudited pro forma accounts, which reflectthe separate activities of the group. As at 30 June 2006, the group had net assets (excluding the accounting effectsof the consolidation of Barclub Limited) of £16.1 million (2005: £18.3 million)or 189 pence per ordinary share (2005: 185 pence per share). As at 30 June 2006, the group had net assets on a consolidated basis of £14.8million (2005: £17.6 million) or 173 pence per share (2005: 178 pence pershare). In the period to 30 June 2006, the profit before exceptional items, excludingthe consolidation of Barclub Limited, was £582,000 (2005: £882,000). The loss ona consolidated basis was £2.8m (2005: loss of £(346,000). Portfolio Investments Po Na Na In February 2006 Barvest entered into arrangements to strengthen its managementteam through the appointment of Reuben Harley as managing and operationsdirector, John Smith as finance director and Roger Dyer as commercial director.Following the management changes, the new team undertook a full review andsubsequent restructuring of the business by way of a receivership. Following thereceivership, on 28 June 2006, a new company, Barclub Limited, formed by themanagement team and the company, acquired 18 bars and clubs from Barvest for aconsideration of £8.2m in part satisfaction of Barvest's secured debt to thecompany. The site EBITDA for the 18 bars and clubs acquired for the year ended 30 June2006 was £2.23m and the business is currently trading ahead of its internalforecast for the year ending 30 June 2007. As at 30 June 2006, the carrying value of the company's investment in Barclubwas £7.5m or 89 pence per ordinary share. Espresso In February 2006, Espresso completed a fund-raising of £2.4 million to financethe acquisition of Netmedia Entertainment. Netmedia offers web-based educationalplatform services. The acquisition enables the enlarged group to offer customersan end-to-end educational solution: curriculum content, managed content deliveryand a virtual learning environment. The company participated in the fund-raising for its pro rata share. Thevaluation of Espresso for the purposes of the fund-raising resulted in an upliftin the carrying value of the Company's investment in Espresso to £365,000. As at 30 June 2006, the carrying value of the company's investment in Espressowas 4 pence per ordinary share. mBlox Inc During February 2006, mBlox successfully closed a $25 million fund-raising,which was led by a new investor Trident Capital, the $1.5 billion Silicon Valleyventure capital fund, which focuses on businesses providing informationconnectivity. The fund-raising was also strongly supported by existing mBloxinvestors, including Bank of America Venture Partners, Norwest Venture Partnersand Novus Ventures. The funds were raised by mBlox to support further productroll out and geographical expansion. In the fund-raising, Avanti invested a further £1.73 million to bring its totalinvestment to £3.56 million and its holding in mBlox to 7.9%. As a consequenceof this investment, the carrying value of the company's shareholding in mBloxhas risen from £1.83 million to £5.6 million. As at 30 June 2006, the carrying value of its investment was 65 pence perordinary share. Medcenter As at 30 June 2006, the carrying value of the company's investment in Medcenterwas 3 pence per ordinary share. Medcenter has bolstered its management team with the appointment of Dr PaulKelly, CEO and Raymond Land, CFO and has opened an office in New York to exploitthe potential of the US market. In July 2006, the company participated in a further fund-raising round of US$6mfor its pro rata share at a price of US$3.80 an uplift of about 15% on thecompany's original investment in June 2005. New investors accounted for about50% of the round. The uplift has not been reflected in these accounts as itoccurred after the year end. Wordmap During the second quarter of 2006 Wordmap experienced a substantial fall inrevenues as local governments failed to commit to contracts that Wordmap hadexpected to win during the period. Further funds were offered to Wordmap by itsshareholders to allow it to continue to trade, however terms could not beagreed. Accordingly, on 4 September 2006 Wordmap was placed in administration.The administrator is currently in contact with parties who have expressed aninterest in acquiring the company's business, however there is currently nocertainty that a sale will be concluded and if it is concluded whether therewill be a material return to shareholders of Wordmap. As at 31 December 2005, the carrying value of the company's investment inWordmap was 3 pence per ordinary share and a full provision for this investmenthas been made in these accounts. Others In relation to the remainder of the legacy investments in the group's portfolio,as previously indicated, the board are continuing to seek ways of maximising thevalue to the group. As at 30 June 2006, the aggregate carrying value of theinvestment in these companies is £164,000. Net asset values (excluding the accounting effects of the consolidation ofBarclub Limited) per Avanti share by category: Carrying value as at 30 June 2006 (pence perInvestment share)mBlox 65Po Na Na (Barclub) 89Espresso 4Medcenter 3Others 2Cash (net of liabilities) 19Property (and other net 7assets) ----Total 189 ---- Purchase of own shares During the period, the company made purchases of 1,362,000 of its own shares atan average price per share of 150 pence. The average mid market price of ordinary shares in the company for the 5 daysprior to 3 November 2006 was 123.5 pence. As stated, the net asset value perordinary share (excluding the accounting effects of the consolidation of BarclubLimited) as at 30 June 2006 was 189 pence. As stated in the company's announcement on 9 October 2006, as and when anyportfolio realisations are made, the board currently intends to use the proceedsto return monies to shareholders in the most efficient manner available,initially through purchases in the market by the company of its own shares. In order to put the board in a position to implement this process, Resolution 7will seek to authorise the company to purchase its own shares up to a maximumnumber of shares, which at certain minimum and maximum prices, would fullyutilise its reserves from time to time. The authority shall expire at theAnnual General Meeting next year, or, if earlier, twelve months after the dateof passing this Resolution. Board Changes On 13 April 2006, following the £310m fund-raising by Raven Russia Limited,Anton Bilton stepped down from the board. As Executive Chairman of Raven Mountplc, the property manager of Raven Russia Limited, Anton had found itincreasingly difficult to devote as much time as he would want to the affairs ofthe company. Anton was a founder of the company and, in a more informal manner,will continue his close relationship with Richard Kleiner and Julian Fellerman.Having acted as a director of the company since 1997, the board would like toextend its thanks to Anton for all of the support and assistance he has givenover the last nine years. J M Fellerman R H Kleiner 6 November 2006 Corporate governance Compliance with the 2003 FRC Combined Code The company is not required to comply with the 2003 FRC Combined Code. Set outbelow are the corporate procedures that have been adopted. The Board The Board of Avanti Capital plc is the body responsible for the group'sobjectives, its policies and the stewardship of its resources. At the balancesheet date, the board comprised two executive directors (Julian Fellerman andRichard Kleiner) and two non-executive directors (Philip Crawford and WilliamCrewdson). The Board has eight board meetings during the year. There were twonon-executives that sat on both the audit and the remuneration committees,namely Philip Crawford and William Crewdson. Philip Crawford is both thechairman of the audit committee and the remuneration committee. The terms ofreference of both these committees have been approved by the Board. Remuneration committee The committee's responsibilities include the determination of the remunerationand options of other directors and senior executives of the group and theadministration of the company's option schemes and arrangements. The committeetakes appropriate advice, where necessary, to fulfil this remit. Audit committee The committee meets twice a year including a meeting with the auditors shortlybefore the signing of the accounts. The terms of reference of the auditcommittee include: any matters relating to the appointment, resignation ordismissal of the external auditors and their fees; discussion with the auditorson the nature, scope and findings of the audit; consideration of issues ofaccounting policy and presentation; monitoring the work of the review functioncarried out to ensure the adequacy of accounting controls and procedures. Nomination committee The company does not maintain a nomination committee. Any board appointments aredealt with by the Board itself. Internal control The Board of directors is responsible for the group's system of internal controland for reviewing the effectiveness of the system of internal control. Internalcontrol systems are designed to meet the particular needs of a business andmanage the risks but not to eliminate the risk of failure to achieve thebusiness objectives. By its nature, any system of internal control can onlyprovide reasonable, and not absolute, assurance against material misstatement orloss. The 2003 FRC Combined Code introduced a requirement for the board to review theeffectiveness of the group's system of internal control, including financial,operational, compliance and risk management. Guidance for directors on theCombined Code: Internal Control: Guidance for Directors on the Combined Code ("The Turnbull Report") was published in September 1999. In view of the relativesize of the organisation and the "hands-on" approach of the executive directorstoward systems and risk, the Board does not have the resources to meet therequirements outlined in The Turnbull Report. Internal audit Given the size of the group, the Board does not believe it is appropriate tohave a separate internal audit function. The group's systems are designed toprovide the directors with reasonable assurance that problems are identified ona timely basis and are dealt with appropriately. Relations with shareholders Aside from announcements that the company makes periodically to the market, theBoard uses the annual general meeting to communicate with private andinstitutional investors and welcomes their participation. Going concern On the basis of the current financial projections, the directors have areasonable expectation that the company and the group have adequate financialresources to continue in operational existence for the foreseeable future. Thedirectors accordingly have adopted the going concern basis in the preparation ofthe group's accounts. Directors' report For the year ended 30 June 2006 The directors present their report and accounts for the year ended 30 June 2006. Results and dividends The loss for the year before taxation of the group amounted to £2.8 million(2005 - loss £480,000) and the loss for the year after taxation and minorityinterests of the group amounted to £2.7 million (2005 - loss £149,000) which wasequivalent to a loss of 29.01p per share (2005 - 1.46p per share) and the netassets of the group were £14.9 million (2005 - £17.6 million). The directors do not recommend the payment of a dividend for the year ended 30June 2006 (2005 - £nil). Principal activity and review of the business The company's principal activity during the year continued to be that of aprivate equity and ancillary services company and further details are set out inthe company statement below. Analysis of risk factors The main risks arising from the group's financial instruments are investmentrisk, interest rate risk and liquidity risk. The group does not have a materialexposure to foreign currency risk. The board reviews policies for managing eachof these risks, and they are summarised as follows: Investment risk Investment risk includes investing in companies that may not perform asexpected. The group's investment criteria focus on the quality of the businessand the management team of the target company, market potential and the abilityof the investment to attain the returns required within the time horizon set forthe investment. Due diligence is undertaken on each investment. The groupregularly reviews the investments in order to monitor the level of risk andmitigate exposure where appropriate. Interest rate risk The group borrows to match the denomination at fixed and floating rates ofinterest to obtain the desired interest profile and to match, where possible,the group's exposure to interest (and debt repayment) fluctuations with therevenues generated by the relevant underlying investment. Liquidity risk The group's policy is to finance its operations and expansion through workingcapital, loans and, in the case of investing in target companies, to raise anappropriate level of acquisition finance. The balance of the group's investmentin target companies is normally through the provision of equity finance. Suchequity finance is structured so as to maximise, wherever possible, its liquidityposition. During the year the acquisition finance raised in connection with thegroup's investment in Barvest Limited was repaid. Directors and their interests The directors during the year were as follows: P J Crawford J M Fellerman R H Kleiner A J G Bilton (resigned 30.04.2006) W A H Crewdson The interests of the directors and their immediate families and the interests ofpersons connected with the directors for the purposes of section 346 of theCompanies Act 1985 in the issued ordinary share capital of the company as at 30June 2006 (all of which are beneficial unless otherwise noted) are as follows: Number of ordinary issued shares As at 1 July 2005 or at date of appointment, if later (re-stated) As at 30 June 2006P J Crawford 315,000 315,000J M Fellerman 405,720 405,720R H Kleiner 405,720 405,720W A H Crewdson - - The rights of the directors to subscribe for shares in Avanti Capital plc, theirimmediate families and persons connected with the directors for the purposes ofsection 246 of the Companies Act 1985 are as follows: At 1 July 2005 or date of appointment At 30 JuneRights to subscribe for shares if later Granted Cancelled Exercised 2006J M Fellerman 416,667 - - - 416,667R H Kleiner 416,667 - - - 416,667 As at 30 June 2006 there were 2,500,000 options to subscribe for ordinary sharesin the capital of the company at 150 pence per share under the company's LongTerm Incentive Share Scheme ("LTISS"). Subsequent to the year end, the optionsof the directors have been cancelled. There remain 1,666,667 options granted under the LTISS to previous directors. Report on directors' remuneration The remuneration of the directors for the year ended 30 June 2006 is as follows: Basic salary 2006 2005 and fees Benefits Total TotalExecutive directors £ £ £ £J M Fellerman 148,084 1,647 149,731 165,658R H Kleiner 148,084 1,650 149,734 165,037 Non-executive directorsP J Crawford 25,000 987 25,987 25,741W A H Crewdson 15,000 - 15,000 15,000 Former executive directorsA J G Bilton - - - 91,973 Former non-executive directorsA J G Bilton 12,500 - 12,500 2,500A J R Collins - - - 20,000 348,668 4,284 352,952 485,819 (1)-The above figures represent the due proportion of each director's annualsalary reflecting the period during the year for which each director was adirector of the company. (2)-The respective dates of appointment and resignation for those directors whowere not directors for the whole year are set out above. (3)-There were no pension payments in respect of either year. The remuneration committee comprises Philip Crawford (chairman) and WilliamCrewdson. Its terms of reference are concerned principally with the remunerationpackages offered to executive directors in that they should be competitive andare designed to attract, retain and motivate executives of the right calibre. Remuneration for executive directors consists of basic salary and benefitsincluding management incentive arrangements and are on a 12 months rollingnotice basis. Significant shareholding As at 4 October 2006, the company's significant shareholders were MoorfieldGroup Limited with 11.81% of issued share capital, Marlborough Fund ManagersLimited 7.2%, Electra Value Active Fund 4.77%, Aviation Adventures Limited 4.25%and Jupiter Asset Management Limited 3.98%. Policy and practice on payment of creditors It is the group's policy to settle all agreed liabilities within the termsestablished with suppliers. During the year the average credit period taken was60 days (2005 - 60 days). Auditors In accordance with section 385 of the Companies act 1985, a resolution thatErnst & Young LLP be re-appointed will be put to the members at the AnnualGeneral Meeting. Directors' Statement as to disclosure of information to auditors The directors who were members of the board at the time of approving thedirectors' report are listed above. Having made enquiries of fellow directorsand of the company's auditors, each of these directors confirms that: • To the best of each director's knowledge and belief, there is no informationrelevant to the preparation of their report of which the company's auditors areunaware; and • Each director has taken all the steps a director might reasonably be expectedto have taken to be aware of relevant audit information and to establish thatthe company's auditors are aware of that information. By order of the board J M Fellerman Secretary 6 November 2006 Statement of Directors' responsibilities in respect of the accounts Statement of Directors' responsibilities in respect of the accounts The directors are responsible for preparing the annual report and the financialstatements in accordance with applicable law and United Kingdom GenerallyAccepted Accounting Practice. Company law requires the directors to prepare accounts for each financial yearwhich give a true and fair view of the state of affairs of the company and ofthe group and of the profit or loss of the group for that period. In preparingthose accounts, the directors are required to: •select suitable accounting policies and then apply them consistently; •make judgements and estimates that are reasonable and prudent; •state whether applicable accounting standards have been followed, subject toany material departures disclosed and explained in the accounts; and •prepare the accounts on the going concern basis unless it is inappropriate topresume that the group will continue in business. The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thegroup and which enable them to ensure that the accounts comply with theCompanies Act 1985. They are also responsible for safeguarding the assets of thegroup and hence for taking reasonable steps for the prevention and detection offraud and other irregularities. Report of the independent auditors We have audited the group's accounts for the year ended 30 June 2006, whichcomprise the group profit and loss account, the group statement of totalrecognised gains and losses, the group balance sheet, the company balance sheet,the group statement of cash flows and the related notes 1 to 27. These accountshave been prepared on the basis of the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the company's members those matters we are required tostate to them in an auditors' report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company and the company's members as a body, for our audit work,for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As described in the statement of directors' responsibilities, the company'sdirectors are responsible for the preparation of the annual report and accountsin accordance with applicable United Kingdom law and accounting standards (UKgenerally accepted accounting practice). Our responsibility is to audit the accounts in accordance with relevant legaland regulatory requirements and International Standards on Auditing (UK andIreland). We report to you our opinion as to whether the accounts give a true and fairview, are properly prepared in accordance with the Companies Act 1985 andwhether the information given in the directors' report is consistent with theaccounts. The information given in the directors' report includes that specificinformation presented in the company statement that is cross-referred from theBusiness Review section of the Directors' Report. We read other information contained in the Annual Report, and consider whetherit is consistent with the audited financial statements. This other informationcomprises the company statement and Statement of Corporate Governance. Weconsider the implication for our report if we become aware of any apparentmisstatements or material inconsistencies with the financial statements. Ourresponsibilities do not extend to any other information. We also report to you if, in our opinion, the group has not kept properaccounting records, if we have not received all the information and explanationswe require for our audit, or if information specified by law regardingdirectors' remuneration and transactions with the group is not disclosed. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the accounts. It also includes an assessment of the significantestimates and judgements made by the directors in the preparation of theaccounts, and of whether the accounting policies are appropriate to the group'scircumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the accounts are free frommaterial misstatement, whether caused by fraud or other irregularity or error.In forming our opinion we also evaluated the overall adequacy of thepresentation of information in the accounts. Opinion In our opinion •-the accounts give a true and fair view, in accordance with United KingdomGenerally Accepted Accounting Practice, of the state of affairs of the companyand of the group as at 30 June 2006 and of the loss of the group for the yearthen ended; •-the accounts have been properly prepared in accordance with the Companies Act1985; and •-the information given in the directors' report is consistent with theaccounts. Ernst & Young LLP Registered Auditor London 6 November 2006 Group profit and loss account for the year ended 30 June 2006 2006 2005 Notes £000 £000Total turnover 2 17,107 20,485Cost of sales (3,153) (3,782) Gross profit 13,954 16,703Operating expenses:Administrative expenses - exceptional - warrant cancellation payment 3(a) - (87)Administrative expenses - other exceptional items 3(b) (687) (410)Administrative expenses - others 4 (16,062) (17,061) (16,749) (17,558) Operating loss (2,795) (855)Profit on disposal of investments 7 96 197Loss on disposal of tangible fixed assets (273) - (Loss) on ordinary activities before interest and taxation (2,972) (658)Interest receivable 8 352 607Interest payables and similar charges - bank and other loans (185) (429) Loss on ordinary activities before taxation (2,805) (480)Taxation 9 - 134 Loss after taxation (2,805) (346)Minority interest 113 197 Loss for the financial year attributable to the members of the parent (2,692) (149)company Loss per equity share 11Basic (loss) per share (29.01)p (1.46)pDiluted (loss) per share (29.01)p (1.46)p Note: all of the above relate to continuing operations Group statement of total recognised gains and lossesfor the year ended 30 June 2006 Notes 2006 2005 £000 £000(Loss) for the financial year attributable to members of the parent 20 (2,692) (149)companyRevaluation of fixed asset investments 20 1,984 -Total recognised gains and losses (708) (149) Group balance sheetat 30 June 2006 2006 2005 Notes £000 £000Fixed assetsIntangible assets - positive goodwill 12 4,214 4,915Intangible assets - negative goodwill 12 - (218) 4,214 4,697 Tangible assets 13 1,513 1,974Investments 14 6,362 2,547 12,089 9,218 Current assetsStocks 15 201 321Debtors 16 846 1,572Cash at bank and in hand and short term deposits 1,803 11,447 2,850 13,340Creditors: amounts falling due within one year 17 (129) (2,804)Net current assets 2,721 10,536 Total assets less current liabilities 14,810 19,754Creditors: amounts falling due after more than one year 18 - (2,154) 14,810 17,600Capital and reservesCalled up share capital 19 5,131 5,948Revaluation reserve 20 1,984 -Capital redemption reserve 20 1,093 276Other reserves 20 2,045 2,045Profit and loss account 20 4,556 9,298Avanti capital plc shareholders' equity 21 14,809 17,567Minority interest - equity 1 33Total equity 14,810 17,600 J M Fellerman - Director R H Kleiner - Director 6 November 2006 Balance sheetat 30 June 2006 2006 2005 Notes £000 £000Fixed assetsTangible assets 13 337 351Investments 14 10,637 4,098 10,974 4,449 Current assetsDebtors 16 1,063 3,659Cash at bank and in hand and short term deposits 1,580 10,950 2,643 14,609Creditors: amounts falling due within one year 17 (259) (1,132)Net current assets 2,384 13,477 13,358 17,926 Capital and reservesCalled up share capital 19 5,131 5,948Capital redemption reserve 20 1,093 276Other reserves 20 2,045 2,045Profit and loss account 20 5,089 9,657Equity 13,358 17,926 J M Fellerman - Director R H Kleiner - Director 6 November 2006 Group statement of cash flowsfor the year ended 30 June 2006 2006 2005 Notes £000 £000Net cash (outflow) from operating activities 22(a) (2,416) (1,488)Returns on investments and servicing of financeInterest received 352 607Interest paid (185) (429)Bank loan issue cost - - 167 178Capital expenditure and financial investmentPurchase of tangible fixed assets 13 (459) (559)Purchase of intangible assets - (233)Purchase of investments (2,081) (275)Proceeds from sale of tangible assets 4 8Proceeds from sale of fixed asset investments 27 252Net cash (outflow) from capital expenditure and financial investment (2,509) (807) Acquisitions and disposalsPurchase of minority interest in subsidiary undertaking - (339)Net cash transferred with subsidiary undertakings (164) -Net cash (outflow) from acquisitions and disposals (164) (339) Net cash (outflow) before management of liquid resources and (4,922) (2,456)financing Management of liquid resourcesMovement on liquid resources 9,314 3,214 FinancingIssue of share capital - 1Payments for share buy back (2,050) (874)Repayment of other loans (2,752) (830)Issue of shares by group companies to minority shareholders 80 - Decrease in cash in the year 22(b) (330) (945) Analysis of changes in net funds Cash at bank Short term and in hand deposits Loans Total £000 £000 £000 £000At 1 July 2005 761 10,686 (2,971) 8,476Net cash flow (330) (9,314) 2,752 (6,892)Items not involving movement of cash - - 219 219At 30 June 2006 431 1,372 - 1,803 Short term deposits are included within cash at bank and in hand in the balancesheet. Notes to the accountsat 30 June 2006 1. Accounting policies Accounting convention The accounts are prepared under the historical cost convention, as modified bythe revaluation of fixed asset investments, and in accordance with applicableUnited Kingdom accounting standards. Basis of consolidation The group accounts consolidate the accounts of the company and all itssubsidiary undertakings drawn up to 30 June each year. No profit and lossaccount is presented for the company as permitted by section 230 of theCompanies Act 1985. Barvest Limited has been included in the group accounts using the acquisitionmethod of accounting. Accordingly, the group profit and loss account andstatement of cash flows include the results and cash flows of Barvest Limitedfor the 53 weeks ended 27 June 2006. The purchase consideration has beenallocated to the assets and liabilities on the basis of fair value at the dateof acquisition. The loss attributable to the parent company is £2,518,000 (2005 - profit£52,000). Turnover Turnover, which is stated net of value added tax, represents amounts due fromthird parties on its ongoing activities, and amounts received and receivablefrom the management and operation of late night bars and nightclubs. Theanalysis of turnover is set out in note 2 below. Depreciation Depreciation is provided on all tangible fixed assets at rates calculated towrite off the cost, less estimated residual value based on prices prevailing atthe date of acquisition, of each asset evenly over its expected useful life asfollows:Leasehold property - Life of leaseLeasehold improvements - 4 yearsFurniture and fittings - 4 yearsIT equipment - 3 yearsMotor vehicles - 3 to 5 years The carrying values of tangible fixed assets are reviewed for impairment whenevents or changes in circumstances indicate the carrying value may not berecoverable. Stocks Stocks are stated at the lower of cost and net realisable value. Foreign currency translation Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. Monetary assets and liabilities denominated in foreign currencies areretranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account. Intangible fixed assets Intangible fixed assets relate to goodwill. Goodwill is the difference betweenthe cost of an acquired entity and the aggregate of the fair value of theentity's identifiable assets and liabilities. Positive goodwill is capitalised,classified as an asset on the balance sheet and amortised on a straight linebasis over its useful economic life. It is reviewed for impairment at the end ofthe first full financial year following the acquisition and in other periods ifevents or changes in circumstances indicate that the carrying value may not berecoverable. If a subsidiary or business is subsequently sold or closed, any goodwill arisingon acquisition that was written off directly to reserves is taken into accountin determining the profit or loss on sales or closure. The amount of goodwillwritten off directly to reserves is not readily ascertainable. Where the fair value of the net assets acquired exceeds the fair value of theconsideration for an acquired undertaking, the difference is treated as negativegoodwill and is capitalised and amortised through the profit and loss account inthe period in which the non-monetary assets are recovered. In the case of fixedassets this is the period over which they are depreciated, and in the case offixed asset investments, the period over which they are sold or otherwiserealised. Fixed asset investments Fixed asset investments, comprising equity shares and share options, are statedat the lower of cost and valuation and in accordance with the "Guidelines forthe valuation and disclosure of venture capital portfolios" published by theBritish Venture Capital Association on the following basis: (a)-Early stage investments: these are investments in immature companies,including seed, start-up and early stage investments. Such investments arevalued at cost less any provision considered necessary, until no longer viewedas early stage or unless a significant transaction involving an independentthird party at arm's length, values the investment at a materially differentvalue; (b)-Development stage investments: such investments are in mature companieshaving a maintainable trend of results and from which an exit, by way offlotation or trade sale, can be reasonably foreseen. An investment of this stageis periodically revalued by reference to open market value. Valuation willusually be by one of four methods as indicated below: i)At cost for at least one period unless such a basis is unsustainable; ii)-On a third party basis based on the price at which a subsequent issue ofcapital is made involving a significant investment by a new investor; iii)-On an earnings basis, but not until at least a period since the investmentwas made, by applying a discounted price/earnings ratio to profit aftertaxation, either before or after interest; or iv) On a net asset basis, again applying a discount to reflect the illiquidityof the investment. (c)-Quoted investments: such investments are valued using the quoted marketprice, discounted if the shares are subject to any particular restrictions orare significant in relation to the issued share capital of a small quotedcompany; A review for impairment in value is undertaken by reference to funding,investment or offers in progress after the balance sheet date. No adjustment ismade for any uplift in value after the balance sheet date. Financial instruments The group uses financial instruments comprising cash and short term deposits andborrowings. It does not enter into derivative transactions such as interest rateswaps, forward rate agreements or forward currency contracts. Deferred taxation Deferred taxation is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents have occurred at that date that will result in an obligation to pay more,or a right to pay less or to receive more tax, with the following exceptions: Provision is made for tax on gains arising from the revaluation (and similarfair value adjustments) of fixed assets, or gains on disposal of fixed assetsthat have been rolled over into replacement assets, only to the extent that, atthe balance sheet date, there is a binding agreement to dispose of the assetsconcerned. However, no provision is made where, on the basis of all availableevidence at the balance sheet date, it is more likely than not that the taxablegain will be rolled over into replacement assets and charged to tax only wherethe replacement assets are sold. Deferred tax assets are recognised only to the extent that the directorsconsider that it is more likely than not that there will be suitable taxableprofits from which the future reversal of the underlying timing differences canbe deducted. Deferred tax is measured on an undiscounted basis at the tax rates that areexpected to apply in the periods in which timing differences reverse, based ontax rates and laws enacted or substantively enacted at the balance sheet date. Leasing commitments Rentals paid under operating leases are charged to income on a straight linebasis over the lease term. Exceptional items Exceptional items are treated as such if the matters are material and fallwithin one of the categories below: a)Write down (including provisions) to recoverable amounts in respect ofproperty, investments and stock; b)Restructuring costs of an activity of the group; c)Disposals of property and investments; d)Abortive deal costs; e)Litigation settlements; and f)Reversal of provisions 2. Turnover (a)Analysis of turnover and loss before taxation (Loss)/Profit on ordinary (Loss)/Profit on ordinary Turnover* activities before tax 2006 2005 2006 2005 £000 £000 £000 £000Business sectors:Investment and ancillary services* 78 53 (2,015) 754**Bar & night clubs 17,029 20,432 (790) (1,234) 17,107 20,485 (2,805) (480) Geographical markets:United Kingdom 17,107 20,485 (2,805) (480) \* Turnover by geographical segmentation to third parties is by origin of turnoverand destinations. **Included in this figure is £87,000 relating to the warrant cancellationpayment. (b)Analysis of net assets 2006 2005 £000 £000Business sectors:Investment and ancillary services 14,767 17,524Bar and night clubs 43 76 14,810 17,600 Geographical location:United Kingdom 8,957 15,493Rest of World 5,853 2,107 14,810 17,600 3. Exceptional items (a)Warrant cancellation payment 2006 2005 £000 £000Payment for cancellation of 178,315 warrants at 50p - 87each (b)Other 2006 2005 £000 £000Provision for impairment of fixed asset investments 223 41Deal and merger costs: - Redundancy costs 354 342 - Cost on abortive projects 54 -Restructuring charges 56 27 687 410 4. Analysis of administrative expenses - other 2006 2005 £000 £000Auditors' remuneration: - audit 55 70 - non audit - -Depreciation 434 382Amortisation of goodwill 396 136Operating lease rentals - land and buildings 2,088 2,087Others 13,089 14,386 16,062 17,061 5. Staff costs 2006 2005 £000 £000Wages and salaries 4,129 4,137Social security costs 339 394 4,468 4,531 There were no pension contributions during the year. The average monthly number of employees during the year was as follows: 2006 2005 No. No.Investment holdings 4 5Bar and night clubs - Bar staff 380 428 - Head office 25 29 409 462 There were no pension contributions paid during the year. 6. Directors' remuneration 2006 2005 £000 £000Emoluments 353 436Compensation for loss of office - 50 353 486 An analysis of directors' remuneration is set out in the directors' report.There were no pension payments in respect of either year. 7. Profit on disposal of investments 2006 2005 £000 £000Book profit arising from the reorganisation of Barvest Limited (note 96 -14)Other investments - 197 96 197 There were no taxation effects arising from the profit on disposal ofinvestments. 8. Interest receivable and similar income 2006 2005 £000 £000On bank deposits 352 607 9. Taxation (a) Analysis of credit in year: 2006 2005 £000 £000Current taxUK corporation tax on the loss for the year - (84)Deferred taxOrigination and reversal of timing differences - (50)Total tax credit for year - (134) (b)Factors affecting current tax credit for the year: The tax assessed for the year differs from the standard rate of corporation taxin the UK (30%). The differences are explained below: 2006 2005 £000 £000(Loss) on ordinary activities before tax (2,805) 480(Loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% (2002 - 30%) (842) (144)Effects of:Disallowable expenses and non-taxable income 47 61Depreciation in excess of capital allowances 127 8Losses arising in the current year not relievable against current 886 112taxLosses brought forward utilised (218) (121)Current tax for the year (note 9a) - (84) (c)Deferred tax 2006 2005 £000 £000Excess capital allowances over depreciation - (50) The group has tax losses arising in the UK of approximately £20.4 million (2005- £21.1 million) that are available indefinitely for offset against futuretaxable profits of those companies in which the losses arose. Deferred taxassets of £6.1 million (2005 - £6.2 million) have not been recognised in respectof these losses as they may not be used to offset taxable profits elsewhere inthe group and the directors do not consider, at this stage, that sufficienttaxable profits will arise in the foreseeable future. 10. Dividends No dividend will be declared for the year ended 30 June 2006 (2005 - £nil). 11. Loss per share The basic (loss) per share calculation is based on the group's retained loss forthe year of £2.7million (2005 - £149,000) and the weighted average number ofshares in issue for the year of 9,278,092 (2005 - 10,220,758). The loss attributed to ordinary shareholders and the weighted average number ofshares for the purposes of calculating the diluted earnings per share areidentical to those used for basic earnings per share. This is because theexercise of options would have the effect of reducing the loss per share and istherefore not dilutive under the terms of FRS14. 12. Intangible assets Positive Negative Goodwill Goodwill 2006 2006 £000 £000Cost:At 1 July 2005 5,969 (1,749)Disposal (124) -At 30 June 2006 5,845 (1,749) Amortisation:At 1 July 2005 1,054 (1,531)Provided during the year 614 (218)Disposal (37) -At 30 June 2006 1,631 (1,749)Net book value as at 30 June 2006 4,214 -Net book value as at 30 June 2005 4,195 (218) Negative goodwill is written off over a period of 4 years and positive goodwillis written off over a period of 10 years. 13. Tangible fixed assets Short Short Leasehold Leasehold IT Furniture Motor property improvements equipment and fittings vehicles TotalGroup £000 £000 £000 £000 £000 £000Cost:At 1 July 2005 420 392 314 1,571 139 2,863Additions - 173 11 261 14 459Disposals - (239) (92) (1,011) (90) (1,432)At 30 June 2006 420 326 260 821 63 1,890 Depreciation:At 1 July 2005 75 63 274 448 29 889Provided during the year 14 19 44 335 22 434Disposals - (57) (93) (745) (51) (946)At 30 June 2006 89 25 225 38 - 377Net book value:At 30 June 2006 331 302 34 784 62 1,513 At 30 June 2005 345 329 67 1,123 110 1,974 Short Short Leasehold Leasehold IT Furniture property improvements equipment and fittings TotalCompany £000 £000 £000 £000 £000Cost:At 1 July 2005 420 25 191 39 675Additions - - 3 - 3At 30 June 2006 420 25 194 39 678Depreciation:At 1 July 2005 75 25 187 37 324Provided during the year 14 - 3 - 17At 30 June 2006 89 25 190 37 341Net book value:At 30 June 2006 331 - 4 2 337 At 30 June 2005 345 - 4 2 351 14. Fixed asset investments Group Company Group Company 2006 2006 2005 2005 £000 £000 £000 £000Other 6,362 3,137 2,547 275Unlisted investments - Investment in subsidiaries - 7,500 - 3,823 6,362 10,637 2,547 4,098 Cost Provision Revaluation Book valueGroup £000 £000 £000 £000At 1 July 2005 11,767 (9,220) - 2,547Additions 2,081 - - 2,081Disposals (27) - - (27)Provision - (223) - (223)Revaluation - - 1,984 1,984At 30 June 2006 13,821 (9,443) 1,984 6,362 Details of the investments in which the group and the company holds 20% or moreof the nominal value of any class of share capital are as follows: - Name of Company Holding Proportion of voting Nature of business rights and shares heldSubsidiary undertakings:Avanti Holdings plc Ordinary shares 100% Private equityAvanti Partners (UK) Limited Ordinary shares 100% Management servicesAvanti Partners Limited Ordinary shares 100% Corporate finance advisersAvanti Partners NV * Ordinary shares 100% Private equityBarvest Limited *** Ordinary shares 60% Operation of late night bars and night clubsBarclub Limited ** Ordinary shares 60% Operation of late night bars and night clubs Avanti Partners (UK) Limited and Avanti Partners NV are directly owned by AvantiHoldings plc and the rest of the subsidiaries are directly owned by AvantiCapital plc.* Incorporated in Belgium** The company was incorporated on 7 June 2006 and had not traded from incorporation to the year end.*** Following Barvest Limited going into receivership on 28 June 2006, a large part of the Po Na Na business was acquired from the administrative receiver by Barclub Limited. The consideration paid by Barclub Limited for the acquired assets was £8.2 million. This consideration was financed by cash of £195,000 and the balance by way of a loan note issued by Barclub Limited to Avanti Capital plc. The assets acquired by Barclub Limited comprised 18 leases together with the attaching equipment, goodwill and other items. The units reacquired from the receiver are treated as having been retained by the group and the cost of investment impaired to its estimated realisable value to reflect the substance of the transaction. 15. Stocks 2006 2005 £000 £000Goods for re-sale 201 321 16. Debtors Group Company Group Company 2006 2006 2005 2005 £000 £000 £000 £000Trade debtors 43 - 19 15Corporation tax - - 17 -Other taxes - 11 5 -Amounts due from subsidiary company - 756 - 2,407Other debtors 803 296 1,531 1,237 846 1,063 1,572 3,659 17. Creditors: amounts falling due within one year Group Company Group Company 2006 2006 2005 2005 £000 £000 £000 £000Bank Loans - - 817 -Trade creditors 35 34 1,078 20Corporation tax - - - -Other taxes and social security 17 17 320 18costsAmounts due to subsidiary companies - - - 880Accruals 77 208 589 214 129 259 2,804 1,132 18. Creditors: amounts falling due after more than one year Group Group 2006 2005 £000 £000Bank loans - 2,047Other loans - 107 - 2,154 2006 2005 £000 £000Amounts falling due: in one year or less - 875 in more than one year but no more than two years - 875 in more than two years but no more than five years - 1,440 - 3,190Less: issue cost - 219 - 2,971Less: included in creditors: amounts due within one year - 817 - 2,154 The bank loan consisted of two tranches: Tranche A - A facility of £3,500,000 at 2.5% above LIBOR repayable over 4 years. Tranche B - A facility of £1,000,000 at 3.0% above LIBOR repayable on 30 April2008. The bank loan was secured by a fixed and floating charge over the assets ofBarvest Limited. The whole of the bank loan was repaid on 28 June 2006 prior toBarvest Limited going into administrative receivership. The other loan comprised an amount due by Barvest Limited to one of its minorityshareholders. This loan was assigned to Avanti Capital plc during the year. 19. Share capital Allotted, called up Authorised and fully paid 2006 2005 2006 2005 2006 2005 No. No. No. No. £000 £000Ordinary shares of £0.60 20,833,333 20,833,333 8,552,092 9,914,092 5,131 5,948each As at 30 June 2005 there were 9,914,092 ordinary shares of 60 pence each in thecapital of the company. During the year 1,362,000 ordinary shares of 60 penceeach in the capital of the company were bought back by the company forcancellation at an average price of 150 pence per share. As at 30 June 2006 there were 2,500,000 options to subscribe for ordinary sharesin the capital of the company at 150 pence per share under the company's LongTerm Incentive Share Scheme ("LTISS"). As set out in the company's announcementissued on 10 October 2006, the options previously held by the executivedirectors have now been cancelled. 20. Reserves Capital Profit and Revaluation redemption Other loss reserve reserve reserves account TotalGroup £000 £000 £000 £000 £000At 1 July 2005 - 276 2,045 9,298 11,619Loss for the financial year - - - (2,692) (2,692)Revaluation of fixed asset 1,984 - - - 1,984investmentsShare buy back in the year - 817 - (2,050) (1,233)At 30 June 2006 1,984 1,093 2,045 4,556 9,678 Capital Profit and redemption Other loss reserve reserves account TotalCompany £000 £000 £000 £000At 1 July 2005 276 2,045 9,657 11,978Loss for the financial year - - (2,518) (2,518)Share buy back in the year 817 - (2,050) (1,233)At 30 June 2006 1,093 2,045 5,089 8,227 21. Reconciliation of movements in shareholders' funds 2006 2005 £000 £000Loss for the financial year attributable tothe members of the parent company (2,692) (149)Revaluation of fixed asset investments 1,984 -Share buyback (2,050) (874)Shareholders' equity at 1 July 2005 17,567 18,590At 30 June 2006 14,089 17,567 22. Notes to the consolidated cash flow statement (a)Reconciliation of operating loss to net cash (outflow) from operatingactivities 2006 2005 £000 £000Operating loss (2,795) (855)Loss on disposal of fixed assets - 1Depreciation 434 382Goodwill amortisation 396 136Provision against fixed asset investment 223 41Decrease in stock 84 22Decrease in debtors 2 184Decrease in creditors (541) (1,399)Bank loan issue costs (219) -Net cash (outflow) from operating activities (2,416) (1,488) (b)Reconciliation of net cash flow to movement in net funds 2006 2005 £000 £000(Decrease) in cash (330) (945)(Decrease) in short term deposits (9,314) (3,214)Decrease in loans 2,971 830At 30 June 2006 (6,673) (3,329)Net funds at 1 July 2005 8,476 11,805At 30 June 2006 1,803 8,476 (c)Exceptional Items Cash flows relating to operating exceptional items. The provision for impairment of fixed asset investments of £223,000 (2005 -£41,000) did not have an effect on cash flows. In the current year there were operating cash outflows from exceptional itemsrelating to redundancy and restructuring charges of £410,000 and costs onabortive projects of £54,000. 23. Financial Instruments The group's financial instruments comprise fixed asset investments, cash andliquid resources, and various items, such as trade debtors and trade creditorsthat arise directly from its operations. The vast majority of the group'sfinancial investments are denominated in sterling. The group does not enter into derivatives or hedging transactions. It is, and has been throughout the period under review, the group's policy thatno trading in financial instruments shall be undertaken. The main risks arising from the group's financial instruments are investmentrisk, interest rate risk and liquidity risk. The group does not have a materialexposure to foreign currency risk. The board reviews policies for managing eachof these risks, and they are summarised as follows: Investment risk Investment risk includes investing in companies that may not perform asexpected. The group's investment criteria focus on the quality of the businessand the management team of the target company, market potential and the abilityof the investment to attain the returns required within the time horizon set forthe investment. Due diligence is undertaken on each investment. The groupregularly reviews the investments in order to monitor the level of risk andmitigate exposure where appropriate. Interest rate risk The group borrows in currencies to match the denomination at fixed and floatingrates of interest to obtain the desired interest profile and to match thegroup's exposure to interest (and debt repayment) fluctuations with the revenuesgenerated by the relevant underlying investment. Liquidity risk The group's policy is to finance its operations and expansion through workingcapital and, in the case of investing in target companies, to raise anappropriate level of acquisition finance. The balance of the group's investmentin target companies is normally through the provision of equity finance. Suchequity finance is structured so as to maximise, wherever possible, its liquidityposition. During the year the acquisition finance raised in connection with thegroup's investment in Barvest Limited was repaid. Short term debtors and creditors Amounts dealt with in the numerical disclosures in this note exclude short termdebtors and creditors. There is no material difference between the fair values and book values of thegroup's financial instruments. Financial assets The group has financial assets as shown below: Floating Non-interest Floating Non-interest rate bearing rate bearing financial financial financial financial assets assets assets assets 2006 2006 2005 2005Currency £000 £000 £000 £000Sterling - cash and short term deposits 1,803 - 11,372 -Sterling - unquoted investments - 6,362 - 2,547Others - cash and short term deposits - - 75 - 1,803 6,362 11,447 2,547 The floating rate assets earn interest at rates based upon LIBOR. Non-interestbearing financial assets are available on demand. Financial liabilities Floating rate Floating rate financial financial liabilities liabilities 2006 2005Currency £000 £000Sterling - loans - 2,971 These loans related to Barvest Limited and were used to help finance capitalexpenditure. The weighted average interest rate for the variable rate financial liabilitiesis LIBOR plus 2.6% and the weighted average period for which the rate is fixedis 2.9 years. 24. Other financial commitments At 30 June 2006, the group had annual commitments under non-cancellableoperating leases as set out below: 2006 2006 2005 2005 Group Company Group Company £000 £000 £000 £000Land and BuildingsOperating leases which expire: - in less than one year - - 26 - - within two to five years 128 - 95 - - in over five years 1,245 - 1,954 - 1,373 - 2,103 - 25. Commitments The company has a cash commitment in respect of one its investments, namely XDLIntervest (USA) Limited Partnership. The company was originally committed to paya total of CAN$1m (£485,000) to XDL Intervest (USA) Limited Partnership but thecommitment has now been capped at CAN$800,000 (£388,000). As at 30 June 2006,CAN$668,038 (£324,000) had been paid leaving an outstanding commitment ofCAN$131,962 (£64,000). 26. Contingent Liabilities The company has entered into a guarantee of the obligations of the bar and nightclub business previously owned by Barvest Limited and now owned by BarclubLimited in respect of its lease at its Edinburgh site. The annual rent of thissite is £57,000. 27. Post balance sheet event Further to the company's announcement on 9 October 2006, the shares in AvantiPartners Limited were transferred to Julian Fellerman and Richard Kleiner on 11October 2006 for a consideration of £50,000. In addition, following themanagement structure changes set out in the company's announcement of 9 October2006, Avanti Partners Limited has, from 11 October 2006, supplied investmentadvisory services to the group under a management agreement dated 9 October2006. Supplementary information (unaudited) Pro Forma Profit & Loss and Balance Sheets Notes to the Pro Forma Profit & Loss Account and Balance Sheets The pro forma financial information has not been audited and does not form partof the financial statements. The pro forma financial information has been prepared to illustrate the effectof not consolidating the results and net assets of Po Na Na business andtherefore sets out the investment activity of Avanti Capital plc as distinctfrom the bars and clubs activity operated by Barvest Limited and, from 28 June2006, Barclub Limited. The adjustments shown within the pro forma financial information enables areconciliation to be made to the audited figures included within the annualreport. The consolidation items include fees and interest charged by the groupto Barvest Limited and the inclusion, within the pro forma Profit & Loss, ofEBITDA for Barvest Limited in respect of the 53-weeks period from 27 June 2005to 27 June 2006. Avanti Po Na Na Adjustment Group TotalProfit & Loss £000 £000 £000 £000Turnover 179 17,029 (101) 17,107Less: cost of sales - (3,153) - (3,153)Gross profit 179 13,876 (101) 13,954Operating expenses (1,007) (14,627) 101 (15,533)EBITDA (828) (751) - (1,579)Depreciation & goodwill amortisation 201 (1,003) - (802)Interest payable - (1,042) 857 (185)Interest receivable 1,209 - (857) 352 Profit on ordinary activities before 582 (2,796) - (2,214)taxation and exceptional itemsExceptional items - Barvest (1,661) 2,599 (842) 96Exceptional items - other (1,036) (352) 701 (687) (Loss)/profit on ordinary activities before (2,115) (549) (141) (2,805)taxationTaxation - - - - (Loss)/profit on ordinary activities after (2,115) (549) (141) (2,805)taxationMinority interest - - 113 113 (Loss) for the financial year (2,115) (549) (28) (2,692) Avanti Po Na Na Adjustment Group TotalBalance Sheet £000 £000 £000 £000Fixed assetsGoodwill - 6,236 (2,022) 4,214Tangible assets 337 1,176 - 1,513Investments 13,861 - (7,499) 6,362 14,198 7,412 (9,521) 12,089Current assetsStock - 201 - 201Debtors 323 523 - 846Cash at bank & in-hand 1,739 64 - 1,803 2,062 788 - 2,850Creditors: amounts falling due within one (130) - - (130)yearNet current assets 1,932 788 - 2,720 16,130 8,200 - 14,809Creditors: amounts falling due after one - (8,200) 8,200 -yearNet assets 16,130 - (1,321) 14,809 Represented by:Share capital 5,131 - - 5,131Revaluation reserve 1,984 - - 1,984Capital redemption reserve 1,093 - - 1,093Other reserves 2,045 - - 2,045Profit & loss accounts 5,877 - (1,321) 4,556Avanti Capital plc shareholders equity 16,130 - (1,321) 14,809 Notice of annual general meeting Notice is hereby given that the 2006 Annual General Meeting of Avanti Capitalplc ("the Company") will be held at the offices of Berwin Leighton Paisner,Adelaide House, London Bridge, London EC4 on the 1 day of December 2006 at 10.00a.m. to transact the following business. Ordinary Business 1 To receive and adopt the directors report, the financial statements andthe auditors report for the year ended 30 June 2006. 2 To approve the Directors' Remuneration Report as set out on pages 7 to 9of the report and accounts (as referred to in 1 above). 3 To re-elect William Crewdson as a director. 4 To confirm the re-appointment of Ernst & Young LLP as auditors of theCompany and to authorise the directors to fix their remuneration. Special Business As special business, to consider and, if thought fit, pass the followingresolutions of which Resolution 5 will be proposed as an ordinary resolution andResolutions 6 and 7 will be proposed as special resolutions: Ordinary Resolution 5 That the Directors be and they are hereby generally and unconditionallyauthorised (in substitution for all previous authorities in that regard) toexercise all ofthe powers of the Company to allot relevant securities (within the meaning ofSection 80 of the Companies Act 1985 ("the Act")) up to an aggregate nominalamount of £5,081,359 provided that this authority shall expire on the conclusionof the annual general meeting of the Company held in 2007 or 31 December 2007(whichever is earlier) unless and to the extent that such authority is renewedor extended prior to such date so that the Company may before such expiry makean offer or agreement which would or might require relevant securities to beallotted in pursuance of such offer or agreement as if the authorityconferred hereby had not expired. Special Resolutions 6 That the Directors be and they are hereby empowered pursuant to Section 95of the Companies Act 1985 ("the Act") in substitution for all previous powersgranted thereunder, to allot equity securities (as defined in Section 94 of theAct) pursuant to the authority granted by Resolution 5 above of this resolutionasif Section 89(1) of the Act did not apply to any such allotment provided thatthis power should be limited to: (a) the allotment of equity securities on a pro rata basis in favour ofshareholders where the equity securities respectively attributable to theinterests of all shareholders are proportionate (as nearly as may be) to therespective number of ordinary shares held by them, but subject to suchexclusions and other arrangements as the directors may deem necessary orexpedient to deal with legal or practical problems in respect of overseasholders, fractionalentitlement or otherwise; (b) the allotment of equity securities (in addition to the allotment ofequity securities pursuant to the foregoing paragraph) with an aggregate valueof up to £1,693,686 being 33.3 per cent of the issued share capital of theCompany on 31 October 2006 and the power hereby conferred shall expire on the conclusion of the annualgeneral meeting of the Company held in 2007 or 31 December 2007 (whicheveris earlier) unless renewed or extended prior to such time except that theCompany may, before the expiry of any power contained in this resolution, makeanoffer or agreement which would, or might, require equity securities to beallotted, after such expiry and the directors may allot equity securities inpursuanceof such offer or agreement as if the power hereby conferred has not expired. 7 That the Company be generally and unconditionally authorised for thepurposes of section 166 of the Act to make market purchases (within the meaningof Section 163 of the Act) of ordinary shares of 60p each in the capital of theCompany ("Ordinary Shares") provided that: (a)the maximum aggregate number of Ordinary Shares hereby authorised to bepurchased is such number of shares which would fully utilise the whole of thedistributable reserves of the Company from time to time; (b) the minimum price which may be paid for an Ordinary Share is 60p pershare; (c) the maximum price which may be paid for an Ordinary Share is an amountequal to 105% of the average of the middle market quotations for an OrdinaryShare as derived from the London Stock Exchange Daily Official List for the fivebusiness days immediately preceding the day on which the OrdinaryShare is purchased; (d) the authority hereby conferred expires at the conclusion of the nextannual general meeting of the Company to be held in 2007 or, if earlier, twelvemonths after the date of the passing of this resolution unless such authority isrenewed, varied or revoked prior to such time; and the Company may make a contract or contracts to purchase Ordinary Shares underthis authority before the expiry of the authority which will or may beexecuted wholly or partly after the expiry of the authority; and may make apurchase of Ordinary Shares in pursuance of any such contract or contracts. BY ORDER OF THE BOARD Julian Fellerman Secretary 6 November 2006 Registered Office: 2 Motcomb Street, London SW1X 8JU Notes: (1) A member entitled to attend and vote at the above-mentioned AnnualGeneral Meeting may appoint one or more proxies to attend and, on a poll, tovote instead of him. A proxy need not be a member of the Company. (2) A pre-paid form of proxy is enclosed. To be valid, the form of proxy(together with the power of attorney or other authority (if any) under which itis signed or a notarially certified copy of such authority) must be deposited atthe offices of the Company's Registrars, Capita IRG, PO Box 25, Beckenham, KentBR3 4BR no later than 10.00 a.m. on 27 November 2006. Completion of the form ofproxy will not preclude a member from attending and voting in person. (3) The Company, pursuant to regulation 41 of The Uncertificated SecuritiesRegulations 2001, specifies that only those shareholders registered in theregister of members of the Company as at 6.00 p.m. on 27 November 2006 shall beentitled to attend or vote at the Annual General Meeting in respect of thenumber of shares registered in their name at that time. Changes to entries onthe relevant register of securities after that time will be disregarded indetermining the rights of any person to attend or vote at the Annual GeneralMeeting. (4) There will be available for inspection at the registered office of theCompany, during usual business hours on any weekday from the date of this noticeuntil the date of the meeting, and at the place of the meeting for 15 minutesprior to and during the meeting, copies of any directors' service agreementswith the Company and particulars for the period up to 5 November 2006 of thetransactions of each director and, so far as he can reasonably ascertain, of hisfamily in the share capital of the Company. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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