Final Results

    RNS Number : 1461Z
  Gateway VCT PLC
  15 July 2008
   

    Gateway VCT plc 
    The Directors announce the final results for the year ended 31 March 2008. 

    Performance
    The results for the year show a loss of £1,620,000 of realised and unrealised amounts (2007: £1,205,000). Of this amount £1,357,000 was
represented by the net decrease in value of investments, the majority of which was attributable to an unrealised reduction in value within
the holdings of AIM quoted companies. The net assets at the year end were £4,824,000 representing 35.5p per share (2007: £6,444,000
representing 47.4p). The decline in value within the AIM portfolio alone amounted to approximately 9p per share, and was greater in the
second half of the year than in the first, and was particularly marked in the first quarter of 2008. The reduction in the AIM quoted share
prices was across the portfolio, but was particularly significant in the holdings in Sarantel Group, Vectura Group and Pilat Media Global.
This is frustrating in that, in these three cases, the companies' share prices appear to have been reduced disproportionately relative to
the progress and results of the businesses.

    Future strategy
    During the year, the Board conducted a strategic review of the alternatives open to the Company as a venture capital trust. The nature
of the venture capital market and the limited resources available for the independent management of a VCT of the Company's size, together
with the restrictive policy relating to qualifying technology investment, led the Board to conclude that it was not in the best interest of
Shareholders for the Company to continue as a self-managed VCT, particularly with a commitment to new investment in small scale technology
businesses.

    As a result, a series of discussions took place with directors of other venture capital trust companies and VCT
    investment management groups, who expressed a potential interest in the merger of the Company with another VCT or being appointed as
investment manager. The Board concluded that the potential merger transactions were not attractive since they would incur costs for the
Company and not facilitate either significant liquidity in the Company's shares in the future or an exit for any Shareholder who wished to
realise all, or a substantial part, of their holding in such a transaction. The Board also determined that it would offer Shareholders an
opportunity to obtain such liquidity and value as could be realised through the liquidation of the Company's investments within the VCT in
liquidation rules.

    After a protracted period of discussions with a number of parties, the Board entered into detailed negotiations with Aberdeen Asset
Managers Limited (Aberdeen) with a view to a new investment management mandate incorporating a new investment strategy. Based on Aberdeen's
established position and track record in the VCT market, the Board felt that, subject to Shareholder approval, it could put forward Aberdeen
with confidence as a potential new investment manager with a new, generalist investment strategy. The Board decided that Shareholders would
be offered a choice; the appointment of Aberdeen as investment manager to take the Company forward as an ongoing venture capital trust based
on a new investment strategy, or a realisation through the liquidation of the Company and its investments. To be implemented, both
alternatives required Shareholder approval and, additionally, Aberdeen's agreement to put themselves forward for Shareholder approval.

    A Circular, containing all the required and relevant information to enable Shareholders to consider the alternatives and express a
preference, was produced and sent to all Shareholders. As this was a matter of Shareholder choice and subsequent approval in General
Meeting, rather than the ratification of one course of action, the process of producing the document and obtaining the necessary approval to
issue it was somewhat complex. However, the Board was pleased that holders of more than 30% of the shares responded expressing their
preference. The outcome was that a clear majority were in favour of the appointment of Aberdeen. The Resolution to appoint Aberdeen was put
to a General Meeting held on 26 March 2008 and passed unanimously. Aberdeen was duly appointed as Manager on 31 March 2008.

    In accordance with agreements set out in the Circular, Graham Woolfman resigned as a Director on 31 March
    2008. The Directors are grateful to Graham for his contribution to the Board over the years and for his efforts together with his
colleague, Andrew Sherski, in dealing with the Circular and Shareholder approvals and in working with Aberdeen to integrate the Company's
management within its operations. Bill Nixon, who is head of the Growth Capital team at Aberdeen, joined the Board on 31 March 2008 as the
representative of the new Manager. The Directors welcome Bill to the Board and believe that the Company will benefit considerably from the
involvement of Bill and his team going forward.

    Portfolio developments
    Since the year end, Aberdeen has made five new investments on the Company's behalf, totalling £780,000 out of the total amount deployed
by Aberdeen clients of £7.5 million. These were unlisted investments in Nessco, a provider of communications services to the energy sector;
Training For Travel Group Limited, a leading provider of training services in the travel sector; T C Communications Holdings Limited a
marketing and communications services agency; plus in the AIM quoted companies: Essentially Group plc a specialist sports marketing, media
and services company; and OPG Power Ventures, an operator and developer of power plants in India. Also since the period end, the holdings in
Jacobs Rimell were realised for a cash consideration of £724,000 when the "drag along" provisions of the investment agreement were invoked
following the decision by all other shareholders to accept the offer for the company. 

    Articles of Association
    At the Annual General Meeting of the Company, a Special Resolution numbered 12 in the Notice of Meeting will be put to Shareholders to
approve a number of amendments to the Company's Articles of Association. These amendments are primarily to reflect the provisions of the
Companies Act 2006 and an explanation of the main changes between the proposed and the existing Articles of Association will set out in the
Appendix to the Notice of Meeting included in the Annual Report. Other changes to the Articles of Association, which are of a minor,
technical or clarifying nature, and some more minor changes which also reflect changes made by the Companies Act 2006 have not been noted in
the Appendix. As the Resolution is proposed as Special Resolution, to be passed, at least three quarters of the votes cast must be in favour
of the Resolution.

    A copy of the proposed new Articles of Association of the Company, and a copy of the existing Articles of
    Association marked to show the changes being proposed in the Resolution will be available for inspection at the
    Registered Office of the Company, the office of Aberdeen Asset Management PLC at Sutherland House, 149 St Vincent Street, Glasgow G2 5NW
and at the office of Biggart Baillie LLP, Solicitors, Dalmore House, 310 St Vincent Street, Glasgow, G2 5QR from 11 July 2008 until the time
of the Annual General Meeting and at the Registered Office of the Company from 15 minutes before the Annual General Meeting until it
closes.

    The Directors consider that the Resolution to be put to the meeting is in the best interests of the Company and
    its Shareholders as a whole. Your Directors will be voting their aggregate Shareholding of 65,000 Ordinary Shares of 5p each in favour
of the Resolution and unanimously recommend that Shareholders do so as well.

    Annual General Meeting
    The Annual General Meeting of the Company is to be held at the Manager's offices in London at 10.30 am on Friday 12 September 2008 and
the Notice convening the meeting will be included in the Annual Report.

 Gateway VCT plc 
 Income Statement 
 For the year ended 31 March 2008

                                        Year ended                Year ended 
                                      31 March 2008              31 March 2007
                                 Revenue  Capital   Total  Revenue  Capital    Total
                                   £'000    £'000   £'000    £'000    £'000    £'000
 (Loss)/gain on realisation of         -     (91)    (91)        -       20       20
 investments
 Impairment of investments             -        -       -        -  (1,669)  (1,669)
 Income                              110        -     110      105        -      105
 Investment advisor fees            (40)     (27)    (67)     (94)     (62)    (156)
 GAM investment advisor             (45)     (30)    (75)        -        -        -
 termination fee
 Other expenses                    (140)        -   (140)     (78)        -     (78)
 Loss on ordinary activities       (115)    (148)   (263)     (67)  (1,711)  (1,778)
 before taxation
 Tax on ordinary activities            -        -       -        -        -        -
 Loss on ordinary activities       (115)    (148)   (263)     (67)  (1,711)  (1,778)
 after taxation

 Basic and diluted earnings per   (0.85)   (1.08)  (1.93)   (0.49)  (12.58)  (13.07)
 share (pence)

    All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its
income from investments made in shares, securities and bank deposits.

    The total column of this statement is the Profit and Loss Account of the Company.


 Gateway VCT plc 
 Statement of Total Recognised Gains and Losses 
 For the year ended 31 March 2008

                                        Year ended                 Year ended 
                                       31 March 2008              31 March 2007
                                 Revenue  Capital    Total  Revenue  Capital    Total
                                   £'000    £'000    £'000    £'000    £'000    £'000
 Loss on ordinary activities       (115)    (148)    (263)     (67)  (1,711)  (1,778)
 after taxation
 Unrealised (loss)/gain on             -  (1,357)  (1,357)        -      573      573
 revaluation of investments
 Total losses recognised during    (115)  (1,505)  (1,620)     (67)  (1,138)  (1,205)
 the year


 Gateway VCT plc
 Reconciliation of Movements in Shareholders' Funds
 For the year ended 31 March 2008
                              Year ended   Year ended 
                               31 March     31 March
                                 2008         2007
                                    £'000        £'000
 Opening Shareholders' funds        6,444        7,649
 Total loss for year              (1,620)      (1,205)
 Closing Shareholders' funds        4,824        6,444


 Gateway VCT plc 
 Balance Sheet
 As at 31 March 2008
                                               31 March 2008    31 March 2007
                                               £'000    £'000   £'000    £'000
  Investments                                            4,538           6,369

  Current assets 
  Debtors                                          45              41
  Cash and overnight deposits                     316             119
                                                  361             160

  Creditors 
  Amounts falling due within one year              75              85
 Net current assets                                        286              75
  
  Net assets                                             4,824           6,444

  Capital and reserves 
  Called up share capital                                  679             679
  Special distributable reserves                        12,110          12,110
  Capital redemption reserve                                 1               1
  Capital reserve - realised                           (5,834)         (5,811)
  Capital reserve - unrealised                         (1,517)            (35)
  Revenue reserve                                        (615)           (500)
  Net assets attributable to Ordinary                    4,824           6,444
 Shareholders 

  Net Asset Value per Ordinary Share (pence)              35.5            47.4



 Gateway VCT plc
 Cash Flow Statement 
 For the Year ended 31 March 2008

                                              Year ended    Year ended 
                                                31 March      31 March
                                                  2008          2007
                                              £'000  £'000  £'000  £'000
 Operating activities 
 Investment income received                     102           102
 Deposit interest received                        5             3
 Investment advisor fees paid                 (121)         (156)
 GAM investment advisor termination fee        (75)             -
 Other cash payments                           (96)         (112)
 Net cash outflow from operating activities          (185)         (163)

 Taxation
 Corporation tax                                         -             -

 Financial investment 
 Purchase of investments                          -           (7)
 Sale of investments                            382            95
 Net cash inflow from financial investment             382            88

 Equity dividends paid                                   -             -
 Net cash inflow/(outflow) before financing            197          (75)

 Increase/(decrease) in cash                           197          (75)


    Principal accounting policies and basis of preparation 

    (a) Basis of accounting
    The Financial Statements have been prepared under the historical cost convention, modified to include the revaluation of investments,
and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (the SORP) issued in January 2003 and
revised in December 2005.

    (b) Change in presentation
    Although the Company is no longer an investment company, as defined by S266 of the Companies Act 1985, as investment company status was
revoked on 14 November 2005 in order to permit the distribution of capital profits, the Income Statement has been restated to show the
returns attributable to revenue and capital. In this respect, the investment advisor fee has been allocated 60% to revenue and 40% to
capital which reflected the Company's investment policy and prospective income and capital growth prior to the withdrawal of investment
trust status. Comparative figures have also been restated and disclosed on this basis.

    In the Balance Sheet, the profit and loss reserve has been split to show the realised capital reserve and revenue reserve of the
Company. The revaluation reserve has now been disclosed as capital reserves unrealised. Comparative figures have also been restated and
disclosed on this basis.

    The investments are classified as available for sale despite the SORP recommending treatment as fair value through profit or loss as
this designation was made on initial recognition of the investments. Re-classification is not permitted in accordance with FRS26: 'Financial
Instruments: Recognition and Measurement'.

    (c) Consistency of application
    The principal accounting policies have been applied consistently and remain unchanged from those set out in the
    Company's 2007 Annual Report, with the exception of adopting the presentational aspects of the SORP as detailed above.

    (d) Investments
    On initial recognition investments are valued at fair value on inception using trade date accounting. Subsequently investments are
stated at fair value and are measured as follows:
    *     The Company's investments have been designated by the Directors as available for sale for the purpose of FRS 26: 'Financial
Instruments: Recognition and Measurement' and are carried at fair value as determined by the Directors. This is in accordance with the
Company's stated investment policy and information has been provided on that basis to the Board. In the case of investments quoted on a
recognised exchange, fair value is established by reference to the closing bid price on the relevant date. In the case of unquoted
investments, fair value is established by using measurements of value such as price of recent investment, earnings multiple and net assets;
where no reliable fair value can be estimated using such techniques, unquoted investments are carried at cost subject to provision for
impairment where necessary. This policy is in accordance with the valuation principles detailed in the International Private Equity and
Venture Capital Valuations (IPEVC) Guidelines.

    *     Realised surpluses and deficits on disposal of investments are recycled through the total column of the Income Statement which
represents the Company's profit and loss account. Unrealised surpluses and deficits on the revaluation of investments are taken through the
Statement of Total Recognised Gains and Losses to the unrealised capital reserve. When an investment is sold any balance already in the
capital unrealised reserve is transferred to the Income Statement. If the carrying value of an investment is deemed to be impaired the
cumulative loss (i.e. loss below historical cost) already held in the unrealised capital reserve is transferred to the Income Statement.

    *     Where there is objective evidence of an impairment of an investment, the cumulative loss recognised to date through the Statement
of Total Recognised Gains and Losses is removed from the unrealised capital reserve and recognised within the Income Statement. Such
impairment losses represent the difference between acquisition cost and the current fair value of the investment, less any impairment loss
previously recognised within the Income Statement.

    *     All unlisted investments were valued individually by the Gateway Advisory Management Team. The resultant valuations are subject to
scrutiny and approval by the Directors of the Company.

    (e) Income
    Investment income includes interest estimated on bank balances and also income tax withheld at source. Dividend income is shown net of
any related tax credits. Dividends receivable on equity securities are brought into account on the ex-dividend date. Fixed returns on
non-equity shares and on debt securities are accounted for under the effective interest method. Interest receivable from cash and short term
deposits are accrued to the end of the year.

    (f) Expenses
    All expenses are accounted for on an accruals basis and charged to the Income Statement. Expenses are charged through the revenue
account except as follows:

    *     expenses which are incidental to the acquisition and disposal of an investment are charged to capital; and

    *     expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of
investments can be demonstrated. In this respect, the investment advisor fee has been allocated 60% to revenue 40% to realised capital
reserves to reflect the Company's investment policy and prospective income and capital growth.

    The compensation payment to Gateway Advisory and Management LLP for termination of their investment advisor contract has been allocated
on the same basis as the investment advisor fee.

    (g) Revenue and capital
    The revenue column of the Income Statement includes all income and revenue expenses of the Company. The capital column includes realised
and unrealised gains and losses on investments and that part of the investment management fee which is allocated to capital return. Gains
and losses arising from changes in fair value are considered to be realised only to the extent that they are readily convertible to cash in
full at the balance sheet date.

    (h) Taxation
    UK Corporation Tax payable is provided for on taxable profits at the current rate. The tax charge for the year is allocated between
revenue and capital return on the "Marginal Basis" as recommended in the SORP. Deferred tax is recognised on all timing differences where
the transaction or events that give the Company an obligation to pay more tax in the future, or a right to pay less tax in the future, have
occurred by the balance sheet date. Deferred tax assets are recognised when it is more likely than not that they will be recovered. Deferred
tax is measured using rates of tax that have been enacted or substantively enacted by the balance sheet date. Deferred tax balances are not
discounted.


    (i) Financial instruments
    The Company's principal financial assets are its investments and the policies in relation to those assets are set out above. Financial
liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as
an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

    (j) Cash and liquid resources
    Cash, for the purposes of the cash flow statement, comprises cash in hand.


    Movements in reserves
                                    Special       Capital redemption    Capital reserve -     Capital reserve -    Revenue reserve 
Revaluation reserve
                                 Distributable         reserve               realised             unrealised
                                    reserve
                                     £'000              £'000                 £'000                 £'000               £'000             
£'000
 At 31 March 2007                         8,102                     1                     -                     -          (2,303)          
      (35)
 Restatement in line with SORP            4,008                                     (5,811)                  (35)            1,803          
        35
                                                                    -
                                         12,110                     1               (5,811)                  (35)            (500)          
         -
 Losses on realisation of                     -                     -                  (91)                     -                -          
         -
 investments
 Previous year losses now                     -                     -                 (169)                     -                -          
         -
 realised
 Movement on impairment                       -                     -                   294                     -                -          
         -
 Net decrease in value of                     -                     -                     -               (1,482)                -          
         -
 investments
 Investment advisor fees                      -                     -                  (27)                     -                -          
         -
 GAM investment advisor                       -                     -                  (30)                     -                -          
         -
 termination fee
 Loss on ordinary activities                  -                     -                     -                     -            (115)          
         -
 after taxation
 At 31 March 2008                        12,110                     1               (5,834)               (1,517)            (615)          
         -


    Returns per Ordinary Share
    The returns per Ordinary Share are based on the following figures:
                                                   Year ended     Year ended
                                                  31 March 2008  31 March 2007
 Weighted average number of Ordinary Shares in       13,591,734     13,591,734
 issue
 Revenue return                                      (£115,000)      (£67,000)
 Capital return                                      (£148,000)   (£1,711,000)
 Total return                                        (£263,000)   (£1,778,000)

    Net Asset Value per Ordinary Share
    Net Asset Value per Ordinary Share as at 31 March 2008 has been calculated using the number of Ordinary Shares in issue at that date of
13,591,734 (2007: 13,591,734). 

    Principal risks and uncertainties
    The principal risks facing the Company relate to its investment activities and include market price, interest rate, credit and liquidity
risk. 

    Additional risks faced by the Company, and the mitigation approach adopted by the Board, are as follows:

    *     investment objective: the Board's aim is to maximise absolute returns to Shareholders while managing risk by ensuring an
appropriate diversification of investments;

    *     investment policy: inappropriate stock selection leading to underperformance in absolute and relative terms is a risk which the
Manager mitigates by operating within investment guidelines and regularly monitoring performance against the peer group. The regulations
affecting Venture Capital Trusts are central to the Company's investment policy;

    *     discount volatility: due to lack of liquidity in the secondary market, venture capital trust shares tend to trade at discounts to
their net asset values which the Board could seek to manage, through the Manager, by making purchases of shares in the market from time to
time and within established guidelines.

    *     regulatory risk: the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section
274 of the Income Tax Act 2007 could result in the Company being subject to capital gains tax on the sale of its investments. A breach of
the VCT Regulations could result in the loss of VCT status and a consequent loss of tax reliefs currently available to Shareholders.

    A serious breach of other regulations, such as the UKLA Listing Rules or the Companies Act, could lead to suspension from the Stock
Exchange and reputational damage. The Board receives quarterly reports from the Manager in order to monitor compliance with regulations. At
least twice each year the Board will consider all of the above risks and the measures in place to manage them. 

    Other information
    The Annual General Meeting of the Company will be held on 12 September 2008, commencing at 10.30 a.m. The Annual Report and Financial
Statements for the year ended 31 March 2008 will be printed and issued to Shareholders in due course.

    The financial information contained within this Announcement does not constitute the Company's statutory Financial Statements as defined
in Section 240 of the Companies Act 1985. The statutory Financial Statements for the year ended 31 March 2007 have been delivered to the
Registrar of Companies and contained an audit report which was unqualified and did not constitute statements under Sections 237(2) or (3) of
the Companies Act 1985.

    Copies of this announcement will be available to the public at the office of Aberdeen Asset Managers Limited, 149 St Vincent Street,
Glasgow; at the registered office of the Company, One Bow Churchyard, Cheapside, London; and on the Company's website at
www.aberdeen-asset.com/gatewayvct

    Directors' responsibility statement
    The Directors confirm that, to the best of their knowledge:

    *     the Financial Statements have been prepared in accordance with the applicable accounting standards and give a true and fair view
of the assets, liabilities and financial position of the Company as at 31 March 2008 and for the year to that date; and
    *     the Directors' Report includes a fair review of the development and performance of the Company, together with a description of the
principal risks and uncertainties that it faces.

    By Order of the Board
    Aberdeen Asset Management PLC
    Secretary

    15 July 2008


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