Preliminary Results

    Preliminary Results
             



Eclipse VCT 3 plc
Year ended 31 August 2007

About Eclipse VCT 3 plc

Eclipse VCT 3 plc ("Eclipse 3" or "Company") is a Venture Capital
Trust ("VCT") which aims to provide shareholders with attractive
tax-free dividends and long-term capital growth.

Eclipse 3 invests primarily in unquoted and AIM-quoted companies  and
aims to deliver absolute returns on  its investments.  Eclipse 3  was
launched in August 2005 and raised approximately £29.1 million (£28.7
million net  of expenses)  through an  offer for  subscription  which
closed on 5 April 2006.

The Investment Manager is  Octopus Investments Limited ("Octopus"  or
"Manager").   Eclipse 3  co-invests with  three other  Eclipse  funds
which are all managed  by the same investment  team at Octopus.  This
allows Eclipse 3 to invest in  a wider range of opportunities and  in
larger and more developed companies than are typically available to a
single VCT.

Financial Highlights


                                       Year to 31 August Period to 31
                                                    2007  August 2006

Net assets (£'000s)                               29,825       28,247
Net profit after tax (£'000s)                      1,809          183
Net asset value per share                         101.1p        95.7p
Proposed dividend per share                         1.5p         0.7p
Cumulative dividends  since  launch  -
paid and proposed                                   2.2p         0.7p


Chairman's Statement

I am delighted to report an uplift in the Net Asset Value ("NAV")  of
the portfolio in the year to 31 August 2007.

Results Review
In the year to 31 August 2007, the NAV per share increased over  5.6%
from 95.7p  to  101.1p net  of  dividends.   The  Investment  Manager
realised a  gain of  nearly £1.1  million during  the year  from  the
disposal, either  wholly or  partially, of  a number  of  investments
which are discussed below.   Further details are included within  the
Investment Manager's Review including a review of the performance  of
the investments, the  key performance  indicator by  which the  Board
measures the performance of the Company.  Consequently, the Board has
proposed a dividend of 1.5p per share to be paid on 19 February  2008
to shareholders on the register on  25 January 2008.  This will  take
cumulative dividends to 2.2p per share since the Fund's launch.   The
total return to  shareholders, before  payment of  this dividend,  is
7.2%. This is before taking into  account the 40% upfront tax  relief
received by initial subscribers.

The table below  shows the movement  in NAV per  share and lists  the
dividends that have been paid since the launch of Eclipse 3:


Period Ended        NAV Dividends paid NAV + cumulative dividends
28 February 2006  94.9p              -                      94.9p
31 August 2006    95.7p              -                      95.7p
28 February 2007 103.0p           0.7p                     103.7p
31 August 2007   101.1p              -                     101.8p


Investment Portfolio
During  the  year,  sixteen  new  investments  were  made  and   four
investments fully disposed  of.  New  investments totalled over  £9.5
million in seven unquoted companies  and nine AIM-quoted companies.
As well as the full disposals,  profits were also taken in a  further
four  AIM  investments.     Of  particular   significance  were   our
investments  in   Worthington   Nicholls  plc   and   James   Harvard
International Limited  which  generated  returns  of  134%  and  120%
respectively.  Within the portfolio we have a further £1.7 million of
unrealised profit on our investments.

On a  less  positive note  a  provision  has been  made  against  the
investment in NPI  Media Group  Limited and a  further provision  has
been made against our investment  in Red-M.  Octopus considers  these
provisions,  totalling   £1,035,000,   to  be   prudent,   based   on
underperformance against the  respective investment  plans.   Further
information is provided within the Investment Manager's Review.

Further information on all the holdings in the portfolio can be found
in the Investment Manager's review.

Share Price
Eclipse 3's mid market share  price currently stands at 85p  compared
to the NAV of 101.1p.   The discount to NAV  is primarily due to  the
low level of secondary market activity in Eclipse 3 shares. In  order
to address this, Octopus is working towards developing strategies  to
stimulate trade in VCT shares and increase liquidity in the market.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment  Manager
with advice on the ongoing compliance with HM Revenue & Customs rules
and regulations concerning  VCTs.   The Board has  been advised  that
Eclipse VCT 3 plc is in  compliance with the conditions laid down  by
HM Revenue & Customs for maintaining approval as a VCT.

A key  requirement is  for 70%  of the  portfolio to  be invested  in
qualifying investments  by the  end of  the third  accounting  period
following that in which new share  capital was subscribed.  As at  31
August 2007,  over 49%  of the  share capital  raised at  launch  was
invested in VCT qualifying investments, in line with our expectations
at this stage of the Fund's life.  In light of the current deal flow,
the Board is confident  of achieving the  investment target with  the
required time frame.

Outlook
The Board's focus is  to continue to generate  capital growth and  to
pay  attractive  tax-free  dividends.  The  underlying  portfolio  of
unquoted and AIM-quoted companies is comprised of solid, high quality
investments, and the Manager believes it  is well placed to meet  the
above objectives.


R Gregory Melgaard
Chairman
20 December 2007

Investment Manager's Review

Personal Service
At Octopus, we pride  ourselves not only on  our team's track  record
but also on our  personalised customer service.   We believe in  open
communication and  our  regular  updates are  designed  to  keep  you
involved and informed.

If you have any questions about this  review, or if it would help  to
speak to one of the fund managers, please do not hesitate to  contact
us on 020 7710 2800.

Portfolio Review
We are delighted to report encouraging progress across the  portfolio
over the last  year generating  an uplift in  the net  assets of  the
Company.  During the  year to 31 August  2007, over £9.5 million  was
invested in sixteen new and one follow-on investment.  This takes the
total currently  invested by  Eclipse 3  in unquoted  and AIM  listed
investments to over £11.7 million.  The remaining funds are  invested
in money market securities awaiting investment in suitable qualifying
opportunities.

Investment Portfolio

                                                                                           %
                                                                                      equity
                                                                Carrying             held by
                                                                value at         %     other
                                                                      31    equity     funds
Unquoted                           Investment      Unrealised     August   held by   managed
Qualifying                            at cost   profit/(loss)       2007   Eclipse        by
Investments    Sector                 (£'000)         (£'000)    (£'000)         3   Octopus
Gyro
International
Limited        Media & Marketing          704             354      1,058      2.4%     15.2%
Sweet Cred
Holdings
Limited        Confectioners            1,000               -      1,000      7.7%     16.8%
T4 Holdings
Limited        Advertising              1,000               -      1,000     11.4%     31.1%
CSL Dualcom
Holdings
Limited        Business Services          918               -        918     10.0%     30.0%
Adrenalin
Design Limited Fashion & Retail           905               -        905     11.0%     31.9%
NPI Media
Group Limited  Publishing               1,761           (915)        846     12.6%     37.4%
Audio Visual
Machines
Limited        Business Services          711               -        711     11.3%     33.7%
Promotion
Space Limited  Support Services           517               -        517      9.7%     20.3%
Perfect Pizza
Limited        Pizza Delivery             372               -        372      4.9%     29.4%
The Capital
Pubs Company 2
plc            Leisure & Hotels           200               -        200      1.2%      7.0%
Red-M Group    Information
Limited        Technology                 241           (178)         63      1.7%      7.7%
Blanc
Brasseries
Holdings plc   Leisure & Hotels            55               -         55      0.7%      2.6%
Total unquoted qualifying
investments                             8,384           (739)      7,645

AIM-listed
Qualifying
Investments
Tanfield Group
plc            Engineering                130             892      1,022      0.2%      2.5%
Hexagon Human
Capital plc    Recruitment                677             170        847      2.7%      8.8%
               Insurance/Financial
CBG Group plc  Services                   381             111        492      2.0%     12.3%
Hasgrove plc   Public Relations           400              87        487      1.8%      7.1%
Cantono plc    IT Services                420            (38)        382      1.5%      8.4%
Northern Bear
plc            Construction               299               4        303      1.5%      8.9%
Vertu Motors
plc            Motor Retailer             250              17        267      0.5%      2.3%
Pressure
Technologies   High Pressure
plc            Cylinders                  165              50        215      1.0%      4.3%
Healthcare     Healthcare
Locums plc     Recruitment                100              95        195      0.2%      0.7%
Brulines       Alcohol Dispense
(Holdings) plc Monitoring                 148              26        174      0.5%      2.1%
Concateno plc  Drug Testing                85              55        140      0.2%      0.6%
Autoclenz
Holdings plc   Valeting                   125            (25)        100      1.0%     11.9%
BBI Holdings
plc            Healthcare                  64              36        100      0.2%      2.1%
Cohort plc     Healthcare                  68              21         89      0.2%      1.7%
Invocas plc    Financial Services          40               -         40      0.1%      1.1%
Total AIM-listed qualifying
investments                             3,352           1,501      4,853
Non-qualifying
AIM
investments                                13              25         38
Non-qualifying unquoted
investments                                 -               -          -
Total
non-qualifying
investments                                13              25         38
Fixed income
securities                             16,985              95     17,080
Total
investments                            28,734             978     29,616
Net current
assets                                                               209
Total net
assets                                                            29,825


Review of Investments
At 31 August 2007, the  Eclipse 3 portfolio comprised investments  in
12 unquoted and  15 AIM-quoted companies.   The unquoted  investments
are in ordinary shares with full voting rights as well as loan  notes
and other securities.   The  AIM-quoted investments  are in  ordinary
shares, also with full voting rights.

During the year, four investments were disposed of in their entirety;
James  Harvard  International  Limited,  Ovum  plc,  Abcam  plc   and
Worthington  Nicholls  plc  crystallising  a  profit  of  over   £1.0
million.  The  Fund's investment  in AIM  quoted company  Worthington
Nicholls plc  was particularly  successful,  generating a  return  of
134%.   Unquoted company,  James Harvard  International Limited,  was
also a great success generating  a 120% return.  Additional  proceeds
may be received through an earn-out over the next three years.

In addition,  some  top-slicing  of profits  in  Tanfield  Group  plc
crystalised a further £50,000 profit.  However, Eclipse 3 still  owns
shares in  Tanfield Group  plc with  a book  cost of  £143,000 and  a
valuation as at 31 August 2007 of £1.06 million.  We will continue to
maximise the return from this successful investment by taking profits
where necessary.

A summary of these realisations is shown below:

                                      Cost of
                           Initial investment Proceeds of       Total
                        investment   realised  investment gain/(loss)
Realisations                  date    (£'000)     (£'000)     (£'000)
Worthington Nicholls
plc                   12 June 2006        502       1,172         670
James Harvard          30 November
International Limited         2005        245         539         294
Tanfield Group plc     26 May 2005         20          72          52
                          10 March
Ovum plc                      2006         75         118          43
                        31 October
Abcam plc                     2006         45          64          19
                                          887       1,965       1,078


New Investments
During the year, Eclipse 3 made sixteen new investments.  Details  of
these investments are set-out below:

Unquoted investments

Audio Visual Machines Limited
Investment date:            September 2006
Cost:                             £711,441 (ordinary shares and  loan
notes)
Valuation:                      £711,441
Audio Visual Machines  is a leading  audio visual systems  integrator
and service provider  with a  blue chip  client base.   It  generates
revenue from  the  installation  of AV  systems  and  from  providing
ongoing maintenance and support to its customers.  The strategy is to
grow by acquisition over the next 2 to 3 years.

NPI Media Group Limited
Investment date:            January 2007
Cost:                            £1,760,539 (ordinary shares and loan
notes)
Valuation:                      £846,142
NPI  is  the  UK  market  leading  publisher  of  distinctive  'local
interest' history  books.    The  company is  based  in  Stroud  with
subsidiary operations  in  France,  Germany, Ireland  and  the  US.
Funding was provided to facilitate  the acquisitions of three of  its
key  competitors:   Sutton   Publishing,   Jarrold   Publishing   and
Phillimore.  The  titles range  from specialist  local history  books
such as "The  Iron History  of the Forest  of Dean"  to more  general
history books  such  as  "Ivan  the Great".  More  recently  NPI  has
expanded into sports history.   The amalgamation of these  businesses
gives NPI a significant market share in its niche area.

Sweet Cred Holdings Limited
Investment date:            March 2007
Cost:                            £1,000,000 (ordinary shares and loan
notes)
Valuation:                      £1,000,000
Sweet Cred sells a wide range  of products which combine sweets  with
toys that are themed around the five cartoon characters in the  Sweet
Cred gang. The range is sold through distribution partners in Europe,
the US and the Middle East.   In the UK, distribution is through  the
main wholesalers and retail  distribution through the major  multiple
retailers, motorway service stations and leading toyshop chains.   In
March 2007  Octopus  committed £5  million  to fund  working  capital
relating to  the  orders  pipeline.  £3 million  was  drawn  down  at
completion, with the  balance to be  provided against achievement  of
milestones.

Promotion Space Limited
Investment date:            April 2007
Cost:                             £517,234 (ordinary shares and  loan
notes)
Valuation:                      £517,234
Promotion Space works directly with  major brands who wish to  access
consumers in shopping centres. It also works with shopping centres to
generate  revenue  by  organising  promotional  activities.   Octopus
provided  £1.5  million  of  funds  to  develop  an  organic   Retail
Merchandising Unit (RMU) business  within major shopping centres  and
also to follow a buy and build strategy.

Adrenalin Design Limited
Investment date:            September 2006
Cost:                             £905,000 (ordinary shares and  loan
notes)
Valuation:                      £905,000
Adrenalin owns  the Golddigga  girls clothing  brand targeting  15-25
year olds. The  company designs two  major seasons per  year and  two
minor  ones  from  its  headquarters   in  Derby.  The  clothes   and
accessories retail through approximately 650 outlets in the UK and  a
similar number abroad through distributors.  The strategy is to  grow
sales in the  UK and  overseas with  a view to  a trade  sale in  the
medium term.

Gyro International Limited
Investment date:            October 2006
Cost:                             £704,302 (ordinary shares and  loan
notes)
Valuation:                      £1,058,000
Gyro is the UK's leading  integrated B2B brand communications  agency
and has offices across Europe and in the US.   The company provides a
range of services including brand strategy, direct marketing, on  and
off-line  advertising,  media  planning,  web  marketing  and   event
management.   Octopus  led  a  £3 million  equity  fund  raising,  in
February 2005, to  finance the  buy-out of  one of  the two  original
founders and  provide  additional  working capital.    The  syndicate
subsequently invested a further £6 million in October 2006 to support
the acquisition  plans of  the  company.   The company  has  expanded
significantly since our initial investment was made, from 4  offices,
to 10 offices.   Recent acquisitions have  been completed in  France,
Manchester and Sweden.

T4 Holdings Limited
Investment date:            August 2007
Cost:                            £1,000,000 (ordinary shares and loan
notes)
Valuation:                      £1,000,000
T4 is based in  London and, through subsidiaries  Ad Barriers and  Ad
Gates, is the  leading provider of  advertising solutions on  railway
station gates  and car  park ticket  equipment. T4  has a  blue  chip
advertising customer base  including Visa, Fox  (The Simpsons),  M&S,
Bank of Scotland and Costa Coffee.

Aim-quoted investments

Concateno plc
Investment date:            October 2006
Cost:                            £85,000
Valuation:                      £140,000
Concateno plc is an  acquiror and consolidator  of businesses in  the
drug  and  alcohol  testing  sector.    In  November  2006  Concateno
completed its first acquisition with the purchase of Medscreen Ltd.
This was followed with  the acquisition of  Altrix Healthcare Ltd  in
January 2007,  TrichoTech Ltd  in February  2007 and  Euromed Ltd  in
April  2007.    More  recently  Concateno  has  completed  its  first
international  acquisition   with  the   purchase  of   Swedish-based
Marconova in May 2007 and in July 2007 it acquired CPL International.

Brulines (Holdings) plc
Investment date:            October 2006
Cost:                            £147,600
Valuation:                      £174,000
Brulines (Holdings) plc is the leading provider of volume and revenue
protection systems for draught alcoholic  drinks to the pub sector.
The principal  activity  of  the  company  is  to  measure,  remotely
harvest, and audit important  operational data, primarily for  owners
of licensed premises but also for licensees.

Hasgrove plc
Investment date:            November 2006
Cost:                            £400,000
Valuation:                      £486,666
Hasgrove plc is a pan European marketing and communications  services
group. The company  offers its clients  high quality consultancy  and
implementation solutions  at  affordable  prices across  a  range  of
disciplines including  brand  designs, creative  advertising,  public
relations and public affairs.

Vertu Motors plc
Investment date:            December 2006
Cost:                            £250,000
Valuation:                      £266,667
Vertu Motors plc is  a consolidator of the  UK motor retail sector.
The company has completed  a number of  transactions since its  float
and is now the tenth largest motor retailer in the UK.

Hexagon Human Capital plc
Investment date:            February 2007
Cost:                            £677,000
Valuation:                      £846,864
Hexagon Human Capital  plc is  the UK's leading  provider of  interim
executive management and  one of  the UK's  leading executive  search
businesses.   We  originally  invested in  Hexagon,  as  an  unquoted
company, in December 2006 to finance the acquisition of BIE, the UK's
largest interim management firm, alongside £10 million from  Barclays
Bank.   The  company  subsequently floated  successfully  on  AIM  in
February 2007.

Pressure Technologies plc
Investment date:            June 2007
Cost:                            £165,000
Valuation:                      £214,500
Pressure Technologies is the holding company of Chesterfield Special
Cylinders ("CSC").  CSC designs, manufactures and offers testing and
refurbishment services for a range of speciality high pressure,
seamless steel gas cylinders for global energy and defence markets.

CBG Group plc
Investment date:            June 2007
Cost:                            £380,700
Valuation:                      £491,400
Based in Manchester, CBG Group plc is a corporate general  insurance,
risk management  and financial  services intermediary.   The  company
offers a  range of  services principally  in the  area of  Commercial
Insurance,  Business   Risk  Management,   Healthcare  and   Employee
Benefits.   We expect  the  company to  continue to  acquire  further
businesses in the North-West of England.

Northern Bear plc
Investment date:            August 2007
Cost:                            £299,425
Valuation:                      £303,555
Northern Bear is a building services group based in North East
England.  It provides central strategic and financial functions for a
group of otherwise autonomous companies, each of which provides
products and/or services to the construction industry and house
builders.  We expect the company to complete further acquisitions
over the next twelve months.

Cantono plc
Investment date:            August 2007
Cost:                            £420,000
Valuation:                      £382,200
Cantono is a provider  of Managed IT  Services and hosting  solutions
for small to medium sized organisations. Its typical client has  from
100 -1,000  users.    Cantono  provides  a  range  of  services  from
individual applications to fully  managed IT environments.  Cantono's
services are  backed  by  robust  service  level  agreements,  expert
technicians, and a high level of customer service.

Ten Largest Holdings
Listed below are the ten largest investments by value as at 31 August
2007:

NPI Media Group Limited
NPI  is  the  UK  market  leading  publisher  of  distinctive  'local
interest' history  books.    The  company is  based  in  Stroud  with
subsidiary operations  in  France,  Germany, Ireland  and  the  US.
Funding was provided to facilitate  the acquisitions of three of  its
key  competitors:   Sutton   Publishing,   Jarrold   Publishing   and
Phillimore.  The acquisition  of NPI followed  by the integration  of
three other businesses  was an  ambitious plan.  Post investment  the
business experienced some  of the predicted  difficulties. In  August
2007 we took the decision to invest a further £1.5 million (Eclipse 3
fund invested £270,000 prior to the  year end and £137,000 after  the
year end)  to  provide  the  company  with  further  working  capital
facilities.

The  integration  of   the  different  companies   has  proved   more
challenging  than  expected  and  trading  results  are  behind   the
investment plan.  This  has resulted in  some management changes  and
Octopus  has  invested  considerable  time  in  working  through  the
required structural  changes to  ensure that  performance recovers.
Whilst the  project  is  ambitious  we continue  to  believe  in  the
underlying  investment  proposition.     However,  as  a  result   of
performance a full provision has been  made against the equity and  a
partial  provision  against  the  loan   notes  held  by  the   Fund,
representing approximately 50% of the overall investment.

Initial investment date:    January 2007
Cost:                                        £1,760,539
Valuation:                      £846,142
Valuation basis:             Provision
Equity held:                  12.6%
Last audited accounts:     N/A

Tanfield Group plc
Tanfield has a range  of subsidiaries that  are focused on  providing
zero  emission  vehicles  and  industrial  products.  Smith  Electric
Vehicles is one of the largest manufacturers of electric vehicles  in
the world with more than 500 customers operating both in the  private
and public sectors. Norquip is  one of the world's leading  providers
of ground support equipment in  the form of airport service  vehicles
and passenger  transfer units.  Aerial Access  is a  manufacturer  of
electrically powered aerial lifts and access platforms. Complementary
to Aerial  Access is  its Upright  subsidiary, which  specialises  in
scissor lifts and is globally renowned.

Initial investment date:          May 2005
Cost:                                   £130,000
Valuation:                            £1,022,125
Valuation basis:                    Bid price (AiM investment)
Equity held:                         0.2%
Last audited accounts:         December 2006
Profit before interest & tax:   £3.6 million
Net assets:                         £43.4 million

Gyro International Limited
Gyro is the UK's leading  integrated B2B brand communications  agency
and has offices across Europe and in the US.   The company provides a
range of services including brand strategy, direct marketing, on  and
off-line  advertising,  media  planning,  web  marketing  and   event
management.   Octopus  led  a  £3 million  equity  fund  raising,  in
February 2005, to  finance the  buy-out of  one of  the two  original
founders and  provide  additional  working capital.    The  syndicate
subsequently invested a further £6 million in October 2006 to support
the acquisition  plans of  the  company.   The company  has  expanded
significantly since Octopus  first invested,  from 4  offices, to  10
offices.    Recent  acquisitions  have  been  completed  in   France,
Manchester and Sweden.

Although the investment has been  made within the last twelve  months
the value has been  uplifted modestly.  This  reflects the fact  that
Octopus has been an  investor in Gyro since  2005 and the  valuations
are in line  with those presented  by Eclipse VCT,  and are based  on
financial performance.

Initial investment date:               Octopus 2006
Cost:                                        £704,302
Valuation:                                  £1,058,000
Valuation basis:                         Earnings multiple
Equity held:                              2.4%
Last audited accounts:               October 2006
Profit before interest & tax:          £1.8 million
Net assets:                               £6.6 million

Sweet Cred Holdings Limited
Sweet Cred sells a wide range  of products which combine sweets  with
toys that are themed around the five cartoon characters in the Sweet
Cred gang. The range is sold through distribution partners in Europe,
the US and the Middle East.   In the UK, distribution is through  the
main wholesalers and retail  distribution through the major  multiple
retailers, motorway service stations and leading toyshop chains.   In
March 2007  Octopus  committed £5  million  to fund  working  capital
relating to  the  orders  pipeline.  £3 million  was  drawn  down  at
completion, with the  balance to be  provided against achievement  of
milestones.

Initial investment date:            March 2007
Cost:                                     £1,000,000
Valuation:                               £1,000,000
Valuation basis:                      Cost
Equity held:                           7.7%
Last audited accounts:         December 2006
Profit before interest & tax:    £0.4 million
Net assets:                          £1.1 million

T4 Holdings Limited
T4 is based in  London and, through subsidiaries  Ad Barriers and  Ad
Gates, is the  leading provider of  advertising solutions on  railway
station gates  and car  park ticket  equipment. T4  has a  blue  chip
advertising customer base  including Visa, Fox  (The Simpsons),  M&S,
Bank of Scotland and Costa Coffee.

Initial investment date:         August
2007
Cost:                                  £1,000,000
Valuation:                          £1,000,000
Valuation basis:                   Cost
Equity held:                        11.4%
Last audited accounts:        December 2006
Profit before interest & tax:  £0.7 million
Net assets:                        £530,465 million

CSL DualCom Limited
CSL DualCom is the UK's leading supplier of dual path signalling
devices, which link burglar alarms to the police or a private
security firm.  The devices communicate using a telephone line and a
Vodafone wireless link.  Vodafone has been a partner of CSL DualCom
for the last six years.  The company is poised to grow rapidly on the
back of a recent new product launch using the GRPS network and by
extending its products to the fire sector, where recent legislation
has created a large market opportunity.

Initial investment date:           June 2005
Cost:                                  £918,202
Valuation:                             £918,202
Valuation basis:                    Cost
Equity held:                         10.0%
Last audited accounts:         March 2007
Profit before interest & tax:   £0.8 million
Net assets:                         £6.6 million

Adrenalin Design Limited
Adrenalin owns  the Golddigga  girls clothing  brand targeting  15-25
year olds. The  company designs two  major seasons per  year and  two
minor  ones  from  its  headquarters   in  Derby.  The  clothes   and
accessories retail through approximately 650 outlets in the UK and  a
similar number abroad through distributors.  The strategy is to  grow
sales in the UK and overseas with a view to a trade sale.

Initial investment date:        September 2006
Cost:                                             £905,000
Valuation:                                       £905,000
Valuation basis:                              Cost
Equity held:                        11.0%
Last audited accounts:         August 2006
Profit before interest & tax:  £2.1 million
Net assets:                         £3.3 million

Hexagon Human Capital plc
Hexagon Human Capital  plc is  the UK's leading  provider of  interim
executive management and  one of  the UK's  leading executive  search
businesses.   We  originally  invested in  Hexagon,  as  an  unquoted
company, in December 2006 to finance the acquisition of BIE, the UK's
largest interim management firm, alongside £10 million from  Barclays
Bank.   The  company  subsequently floated  successfully  on  AIM  in
February 2007.

Initial investment date:               February 2007
Cost:                                        £677,000
Valuation:                                  £846,864
Valuation basis:                         Bid price (AiM investment)
Equity held:                              2.7%
Last audited accounts:               March 2007
Profit before interest & tax:          £0.8 million
Net assets:                               £14.2 million

Audio Visual Machines Limited
Audio Visual Machines  is a leading  audio visual systems  integrator
and service provider  with a  blue chip  client base.   It  generates
revenue from  the  installation  of AV  systems  and  from  providing
ongoing maintenance and support to its customers.  The strategy is to
grow by acquisition over the next 2 to 3 years.  A small acquisition,
AVE, has been made since the  year end, funded through the  Company's
own resources.

Initial investment date:                September 2006
Cost:                                                    £711,441
Valuation:                                              £711,441
Valuation basis:                          Cost
Equity held:                              11.3%
Last audited accounts:               N/A

Promotion Space Limited
Promotion Space works directly with  major brands who wish to  access
consumers in shopping centres. It also works with shopping centres to
generate  revenue  by  organising  promotional  activities.   Octopus
provided  £1.5  million  of  funds  to  develop  an  organic   Retail
Merchandising Unit (RMU) business  within major shopping centres  and
also to follow  a buy and  build strategy.   Since the  year end  the
Company has  acquired  Fitting  Exposure and  drawn  down  a  further
£600,000 investment  from  the  Eclipse  funds  (Eclipse  3  invested
£209,000).

Initial investment date:       April 2007
Cost:                                £517,234
Valuation:                          £517,234
Valuation basis:                Cost
Equity held:                     10.3%
Last audited accounts:      N/A

Recent Transactions
Since the end of the year  under review, we have completed three  new
qualifying investments, as  well as  further investments  in NPI  and
Promotion Space as noted above:

The Grill Group
Eclipse 3  invested  £1,983,500  (total  from  all  Eclipse  funds  -
£6,000,000) in The Grill Group early in September 2007. The Group has
three restaurant  brands: Smollensky's,  with nine  Bar &  Grill  and
Burgershack sites in  London, and  the Le Frog  Bistros and  Pastiche
with eight restaurants in the Midlands and North West. The investment
strategy includes the operational  turnaround of Smollensky's  during
the first twelve months, followed by the roll-out of the Smollensky's
and Pastiche restaurant brands.

Optimisa plc
Eclipse 3  invested  £195,000  in  Optimisa plc  in  October  2007.
Optimisa provides market research and consultancy services.  Recently
Optimisa completed the earnings enhancing acquisition of EQ Group,  a
business operating in a very similar sector. Historically Optmisa and
EQ have competed  for contracts  and we  expect the  larger and  more
diversified group to exploit a number of synergies and cross  selling
opportunities. Optimisa  which  is  currently  capitalised  at  £18.2
million is expected to make a profit of £3.1 million on a turnover of
£23.8 million for the year to December 2008.

Myhome International plc
Eclipse 3 invested £350,000 in  Myhome International plc in  November
2007.     Myhome  is   an  acquisitive   national  franchise   group,
headquartered in London.  The group has become a market leader in the
rapidly growing sector  of residential  cleaning under  the brand  of
Myhome, and has extended its offering by rolling out other franchises
including electrical, plumbing and  cleaning services. These  include
Nicenstripy, which provides residential gardening services throughout
the year,  Ferrum  UK  which  operates a  dry  cleaning  and  laundry
business and PlumbXpress a plumbing  and drainage business.  In  June
2006 the company acquired Ovenclean,  the UK's leading domestic  oven
cleaning franchise  with  a ten  year  growth history  and  over  165
franchisees.  More  recently  Myhome  completed  the  acquisition  of
ChipsAway,  a  mobile  service  delivered  to  customers'  homes  and
offices, repairing scratches,  chips and  other minor  damage to  car
paintwork using proprietary  technology.  Myhome  which is  currently
capitalised at £29 million is expected to make a profit before tax of
£5.9 million  on a  turnover of  £16.2  million for  the year  to  30
September 2008.

If you have any  questions on any aspect  of your investment,  please
call one of the team on 020 7710 2800.

Simon Rogerson
Chief Executive


Profit & Loss Account
                                       Year to 31 Period to 31 August
                                      August 2007     2006 (Restated)
                                      Total £'000         Total £'000

Gain on disposal of investments
held at fair value                            926                   -

Unrealised gain on fair value of
investments                                   823                 196

Other income                                  950                 600

Investment management fees                  (665)               (375)
Other expenses                              (192)               (238)

Profit on ordinary activities
before tax                                  1,842                 183

Taxation on profit on ordinary
activities                                   (33)                   -

Profit on ordinary activities after
tax                                         1,809                 183
Earnings per share - basic and
diluted                                      6.1p                1.0p



Note of Historical Cost Profits and Losses
                                        Year ended 31 Period ended 31
                                          August 2007     August 2006
                                                £'000           £'000
Profit on ordinary activities before            1,842
taxation                                                          183
Unrealised gain on fair value of                (823)
investments                                                     (196)
Realisation of prior years' net                   138
unrealised gains on investment                                      -
Historical cost profit on ordinary              1,157
activities before taxation                                       (13)
Historical cost profit on ordinary              1,124
activities after taxation                                        (13)



Balance Sheet
                            As at 31 August 2007 As at 31 August 2006
                                 £'000     £'000      £'000     £'000

Fixed asset investments                   12,535                3,280
Current assets:
Investments                     17,080               25,045
Debtors                            241                   15
Cash at bank                        46                   11
                                17,367               25,071
Creditors: amounts
falling due within one
year                              (77)                (104)
Net current assets                        17,290               24,967

Net assets                                29,825               28,247

Called up equity share
capital                                    2,950                2,953
Share premium                                  -               25,114
Special distributable
reserve                                   25,089                    -
Capital redemption
reserve                                        3                    -
Revaluation reserve                          882                  196
Revenue reserve                              901                 (16)
Total equity
shareholders' funds                       29,825               28,247
Net asset value per share                 101.1p                95.7p



Cash Flow Statement
                                              Year to 31 Period to 31
                                             August 2007  August 2006
                                                   £'000        £'000

Net cash (outflow)/inflow from operating
activities                                         (111)           76

Financial investment :
Purchase of investments                          (9,551)      (3,084)
Sale of investments                                1,965            -

Management of liquid resources :
Decrease/(increase) in cash equivalent
investments                                        7,965     (25,045)

Dividends paid                                     (206)            -

Financing :
Issue of own shares                                    -       29,131
Share issue expenses                                   -      (1,064)
Repurchase of own shares                            (25)          (3)
Increase in cash resources                            36           11



Reconciliation of Net Cash Flow to Movement in Cash Resources
                                Year to 31 August Period to 31 August
                                             2007                2006
                                            £'000               £'000
Increase in cash resources                     36                  11
Movement in liquid
resources                                 (7,965)              25,045
Opening net cash resources                 25,056                   -
Net cash at 31 August                      17,127              25,056



Reconciliation of Operating Profit before Taxation to Cash Flow from
Operating Activities
                                            Year to 31   Period to 31
                                           August 2007    August 2006
                                                 £'000          £'000
Profit on ordinary activities before
tax                                              1,842            183
Unrealised gains on fixed asset
investments                                      (728)          (196)
Realised gains on fixed asset
investments                                      (940)              -
Increase in debtors                              (225)           (15)
(Decrease)/Increase in creditors                  (61)            104
(Outflow)/Inflow from operating
activities                                       (112)             76


Note.    Fixed asset investments

                                                 Unquoted  Aim-quoted       Total
                                              investments investments investments
                                                31 August   31 August   31 August
                                                     2007        2007        2007
                                                    £'000       £'000       £'000
Valuation and net book amount:
Book cost as at 1 September 2006                    1,918       1,166       3,084
Revaluation in the period                            (58)         254         196
Valuation at 1 September 2006                       1,860       1,420       3,280
Movement in the year:
Purchases at cost                                   6,711       2,840       9,551
Disposal proceeds                                   (539)     (1,426)     (1,965)
Profit on realisation of investments -
current year                                          294         646         940
Unrealised gain in year                             (681)       1,410         729
Valuation at 31 August 2007                         7,645       4,890      12,535
Book cost at 31 August 2007 - Ordinary shares       1,475       3,364       4,839
                                           -
Loan notes/other securities                         6,908           -       6,908
Revaluation to 31 August 2007 - Ordinary
shares                                                 79       1,526       1,605

- - Loan notes/other securities                       (817)           -       (817)
Valuation at 31 August 2007                         7,745       4,890      12,535


Further details of the  fixed asset investments  held by the  Company
are shown within the Investment Manager's Review.

The above summary of results for  the year ended 31 August 2007  does
not constitute statutory financial  statements within the meaning  of
section 240 of the Companies Act  1985 and has not been delivered  to
the Registrar of Companies.

Statutory financial statements  will be filed  with the Registrar  of
Companies in  due course;  the auditor's  report on  those  financial
statements under S235 of  the Companies Act  1985 is unqualified  and
does not contain a statement under  S237 (2) or (3) of the  Companies
Act 1985.

A copy of  the full annual  report and financial  statements for  the
year ended 31 August  2007 is expected to  be posted to  shareholders
shortly and will be available to the public at the registered  office
of the company at 8 Angel Court, London, EC2R 7HP.

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