SPARK VCT 2 plc
HALF YEARLY FINANCIAL REPORT 2008
Financial highlights
Per ordinary share (pence) 30.06.08 31.12.07 30.04.07
Net asset value 44.3 46.5 54.8
Dividends
Dividend (1) 1.0 1.0 1.0
Cumulative dividend(2) 6.9 5.9 5.9
Total return (3) 51.2 52.4 60.7
Return including tax benefits (4) 71.2 72.4 80.7
(1) Dividend paid in the financial period ended on the date stated
(2) Cumulative dividends paid by SPARK VCT 2 plc
(3) Net asset value plus cumulative dividend per share to ordinary shareholders
since the launch of the Company
(4) Return after 20% income tax relief but excluding capital gains deferral
The Interim management report comprises the Chairman*s Statement, the Investment
manager*s report, fund summary and note 8 to the condensed financial statements.
Chairman's statement
Net assets
The movement in net assets and net assets per share is summarised in the table
below:
�'000 Pence
per
Share
Net asset value at 31 December 2007 21,745 46.5
Income 129 0.3
Operating expenses (473) (1.0)
Movement on venture capital investments
Unquoted investments (99) (0.2)
Quoted venture capital investments 81 0.2
Listed equity investments (287) (0.7)
Net loss on disposal and revaluation
Net assets before dividends and share 21,096 45.1
buy-backs
Dividend paid (464) (1.0)
Share buy-backs (182) 0.2
Net asset value at 30 June 2008 20,450 44.3
The half-year to 30 June 2008 has seen a broadly stable performance in the
venture capital portfolio.
The successful realisation of the investment in Nomad Payments Limited and the
trade sale of Identum Limited, both of which closed in January 2008, were
detailed in the last Annual Report. More recently, the good progress made by a
number of the portfolio companies has been somewhat offset by the general
change in market sentiment which in certain respects has held back the
performance of the Fund.
Following the review of the portfolio and the investment strategy referred to
in the last Annual Report, members of the new management team within SPARK
Venture Management Limited ("SPARK") have continued to make an energetic
contribution in working with the portfolio companies and dealing with the
issues affecting the Fund as a whole.
A number of companies within the portfolio are now cash positive, growing
satisfactorily and, given the right market conditions, would be nearing
readiness for an exit. The earlier stage companies are in most cases also
showing satisfactory progress. In the healthcare portfolio there have been some
significant achievements, notably in the winning of FDA approval by Oxford
Immunotec Limited, but there have also been disappointments with the failure of
the key drug trial of Oxford BioMedica plc and the decision to discontinue
support to Lectus Therapeutics Limited, both of which have led to significant
losses in value.
The change in market sentiment does not generally have a direct effect on those
companies in the portfolio that are addressing new markets growing on the back
of new technologies or services. As long as they are not seeking to approach
the capital markets for further funding or a sale, the value in the companies
themselves will continue to develop. The change in financing conditions has,
however, had an adverse effect on the valuations attributed to Antenova Limited
and Cluster Seven Limited, because in both cases they needed to raise further
capital. In the case of Antenova, despite that company's satisfactory business
progress, the refinancing of the business could only be completed at a much
reduced valuation to the previous carrying value. In order to mitigate the
effects of this, the Fund has participated in the refinancing so as to take
advantage of the favourable terms for new investors. In the case of Cluster
Seven the company has dramatically cut its cost base so as to ensure that it
can continue to trade without new capital. Nevertheless, its valuation has
been reduced to reflect the reduced prospects for the business.
During the half year one significant exit opportunity was lost as a result of
the change in market sentiment. The environment for disposals and funding shows
no sign of improving in the short term.
In these circumstances the rate of investment in recent months has been
constrained, with one new investment being made alongside a moderate level of
commitment of resources to follow-on investments. The opportunity of the new
investment in Isango! Limited, a growth stage company operating an online
travel website offering users a source of travel experiences worldwide, briefly
referred to in the last Annual Report, was won largely on the basis of SPARK's
reputation in the digital media and internet commerce sector. Isango! has made
encouraging progress since the investment was made.
In view of the potential requirements for cash over the next two years, in
market conditions in which exits may be more difficult to achieve, the
precaution was taken in early July of selling the entire portfolio of listed
equities. Over the six months to 30 June 2008 a fall of �287,000 was suffered
in the value of this portfolio; the sale in July involved a further loss of
�163,000.
The Board has not declared an interim dividend.
The Board has today announced that it has entered into talks with the board of
SPARK VCT 3 plc for a merger of the two companies, with the intention that the
merger should be structured as a share-for-share exchange through a Scheme of
Arrangement under Part 26 of the Companies Act 2006, with the share exchange
ratio being determined by reference to formula asset values (NAV per share,
less the expenses of the transaction). SPARK VCT 3 plc is under the same
management as the Company and had net assets at 30 June 2008 of �14.1 million.
In the Board's view, a merger has become desirable because the decline in
net asset values suffered by both companies over recent years has brought them
to a point where they could become more efficient as investment vehicles by
merging. With this reduction in the scale of the funds, fixed costs get out of
proportion with the assets managed. In addition, the financial resources
required to ensure that good investments are supported, and exits are achieved
at the optimal point in the economic cycle, may be curtailed, thereby
increasing the risk of continued underperformance. Finally, there is a risk
that the funds available for new investments will be insufficient to allow the
investment strategy of the new SPARK management team to effect any meaningful
turnaround in performance. The Board believes that, by enabling cost savings
and allowing the Manager additional flexibility in the allocation of financial
resources, the merger would address all these issues. Provided the talks
progress to a successful conclusion, full details of the proposals will be
communicated to shareholders as soon as possible and the appropriate General
Meeting of the Company will be convened to seek shareholders' approval to the merger.
Robert Wright Chairman
29 August 2008
Directors' responsibility statement
The Directors confirm to the best of their knowledge that:
* the condensed set of financial statements contained within the Half-Yearly
Financial Report has been prepared in accordance with the Accounting
Standards Board's Statement `Half-Yearly Financial Reports'; and
* the interim management report includes a fair review of the information
required by Disclosure and Transparency Rule 4.2.7R of important events
that have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remainder of
the financial year; and
* the condensed set of financial statements (note 8) includes a fair review
of the information concerning related parties transactions as required by
Disclosure and Transparency Rule 4.2.8R.
The Half-Yearly Financial Report was approved by the Board on 29 August 2008
and the above responsibility statement was signed on its behalf by the
Chairman.
Investment manager's report
The period covered by this interim management report has seen a change in
market sentiment brought about by the `sub-prime' crisis. A number of key
transactions were completed prior to the change in market sentiment, notably
the sales of Nomad Payments Limited and Identum Limited as described in the
last Annual Report. More recently, however, the tendency towards risk aversion
in the private equity and venture capital markets has made financing conditions
for a number of portfolio companies more difficult, delayed opportunities for
exits and depressed the terms on which exits may be achievable. Against this,
however, for companies in the portfolio that are addressing new markets which
are growing on the back of new technologies or services, the general decline in
market sentiment will not stop that growth. As long as they are not approaching
the capital markets for further funding or a sale, then the value in these
companies will continue to develop, and there are examples of companies in
this category within the portfolio.
Realisation of investments
Details of the successful exit from Nomad Payments Limited by trade sale to
Metavante Technologies, Inc. (NYSE: MV), which closed on 10 January 2008, were
set out in the last Annual Report. This transaction realised �3,020,000 (of
which �2,449,000 has been received in cash and �571,000 is held in escrow), for
a multiple of 1.9 times original cost.
The trade sale of Identum Limited to Trend Micro, Inc., a global leader in
antivirus and content security, which also closed in January 2008, brought in
proceeds of a further �763,000.
New investments
In the first six months of the year, the Company has closed one new investment,
with �450,000 being committed to Isango! Limited, a growth stage company
operating an online travel website offering users an authoritative source of
travel experiences such as holiday tours, sightseeing, attractions and
activities in more than 50 countries across the world. Isango! has seen monthly
revenues grow by 25% on average month-on-month since the investment was made.
Progress of investments
During the six months to 30 June 2008 both the early stage companies and the
more developed companies within the venture capital portfolio have shown
generally satisfactory business progress.
Oxford Immunotec Limited, the Oxford University spinout company commercialising
a new test for the diagnosis of tuberculosis, has gained pre-market approval
from the US Food and Drug Administration (FDA) for its T-SPOT�.TB test. This
represents a significant milestone for the company: it has already been
achieving sales success for T-SPOT�.TB in Europe and is now able to access the
much larger potential of the United States market.
A total of �529,000 was committed to follow-on investments during the half
year, with an additional �223,000 being advanced as bridge finance to Xention
Limited, the drug discovery company with an emerging pipeline of drug
candidates in atrial fibrillation, over-active bladder and pain, and smaller
individual amounts being invested in a range of other portfolio companies.
Among the Company's investments in the TMT sector, Antenova Limited has
demonstrated satisfactory progress in winning more profitable business but in
consequence will require additional working capital: in present conditions, the
terms of the new funding round will inevitably be less attractive than would
have been expected earlier. However, by participating in this round at a level
more than pro-rata to its previous holding, the Fund will be taking advantage
of these terms to enhance its position in the investment.
UniServity Limited, which markets a web-based collaborative learning
environment for schools, is achieving considerable success in winning contracts
with Local Education Authorities in the UK and is beginning to make progress
also in international markets.
Among the more developed companies in the portfolio, marketing communications
software company Elateral Holdings Limited has shown encouraging trading
results allowing for an increase in the valuation of the Fund's investment.
However, Elateral was a victim of the sentiment change in markets when an offer
for the acquisition of the company at substantially above this level was
withdrawn by a private equity buyer on account of market turmoil.
In the healthcare sector, the merger of Celldex Therapeutics, Inc. with the
NASDAQ-listed AVANT Immunotherapeutics, Inc., which closed in March 2008, has
been well received in the market and the share price has performed well. The
share price of MediGene AG also improved over the half year and the opportunity
was taken to sell one-third of this holding. It was disappointing, however,
that Oxford BioMedica plc announced in early July that its most important drug
candidate TroVax� had failed in a key kidney cancer test, prompting a collapse
in the share price. In the absence of any likelihood of early recovery, the
decision was taken for an immediate sale of this entire holding.
Valuation changes
Venture capital portfolio
In the venture capital portfolio, the sale of shares in MediGene AG generated
proceeds of �268,000 and a �54,000 gain on disposal. Revaluation of unquoted
investments produced a gain of �569,000 in respect of Elateral Holdings
Limited, offset by a write-down of �457,000 in respect of Antenova Limited and
other items, for an overall downward adjustment of �86,000.
Valuation changes in the quoted venture capital portfolio produced a surplus of
�299,000 over the figures at 31 December 2007, including increases in the
values of the holdings in AVANT Immunotherapeutics, Inc., MediGene AG and
Celoxica Holdings plc, partially offset by disappointing performances of other
holdings.
However, a total of �367,000 has been written off as an impairment of value,
mainly in respect of Oxford BioMedica plc, ahead of the sale of this holding in
July.
Listed equity and bond portfolio
The valuation of the listed equity portfolio (including losses in the half year)
fell by �287,000 over the half year. In mid July this entire portfolio was
sold (at a loss of �163,000 compared with the valuation at 30 June 2008) in order
to protect against the possibility of further declines in stock markets and
ensure the availability of liquidity to fund necessary follow-on investments
and the operations of the Company.
Outlook
Following the change in market sentiment, the pace of new investment is being
constrained, pending better visibility on the timing of planned exits and the
consequent availability of resources. The management team continues to adopt a
stringent approach designed to ensure that the Company's follow on investment
resources are most effectively applied.
It remains an objective to refresh the portfolio as soon as possible to take
advantage of new investment opportunities available to SPARK, for example in
the digital media and software applications sectors and in medical devices and
diagnostics. Continued attention will be given to the possibility of early
exits from underperforming investments in order to make this possible, although
present market conditions make the achievement of this objective more
difficult.
SPARK Venture Management Limited Manager
29 August 2008
Fund summary as at 30 June 2008
Industry Cost Valuation Equity % of
sector (1) % held fund by
�'000 value
�'000
Fifteen largest venture capital
investments
Workshare Limited TMT 1,910 2,591 7.3% 12.7%
Xention Limited Healthcare 1,273 1,348 5.1% 6.6%
Celona Technologies Limited TMT 2,059 1,307 8.6% 6.4%
Xtera Communications, Inc. TMT 2,687 1,275 1.0% 6.2%
Oxford Immunotec Limited Healthcare 1,801 1,215 6.3% 5.9%
Elateral Holdings Limited (2) TMT 479 1,049 13.8% 5.1%
Teraview Limited Healthcare 1,064 827 5.4% 4.0%
UniServity Limited TMT 700 700 11 .6% 3.5%
Sift Group Limited TMT 917 698 8.0% 3.4%
MediGene AG FRANKFURT Healthcare 781 597 0.4% 2.9%
AVANT Immunotherapeutics, Inc. Healthcare 1,400 472 0.4% 2.3%
NASDAQ
Isango! Limited TMT 450 450 9.3% 2.2%
Arithmatica Limited TMT 676 370 13.7% 1.8%
Antenova Limited TMT 1,384 322 4.7% 1.6%
Portrait Software plc AIM TMT 1,130 288 2.7% 1.4%
18,711 13,509 66.0%
Other venture capital
investments
Celoxica Holdings plc (2) AIM TMT 192 287 2.6% 1.4%
Vivacta Limited Healthcare 228 286 1.8% 1.4%
Cluster Seven Limited TMT 334 255 1 .9% 1.3%
Allergy Therapeutics plc AIM Healthcare 700 239 1.1% 1.2%
Perpetuum Limited TMT 146 166 1.5% 0.8%
Level Four Software Limited TMT 112 112 0.7% 0.5%
Oxford BioMedica plc AIM Healthcare 103 103 0.3% 0.5%
Other investments:
valuations less than �100,000 491 193 0.9%
(2)
2,306 1,641 8.0%
Total venture capital 21,017 15,150 74.0%
investments
Total quoted venture capital 4,698 2,077 10.2%
investments
Total unquoted venture capital 16,319 13,073 63.8%
investments
21,017 15,150 74.0%
Listed equity investments 2,140 2,894 14.2%
Total investments 23,157 18,044 88.2%
Cash and other net assets 2,406 2,406 11.8%
Net assets 25,563 20,450 100.0%
1. Amounts shown as cost represent acquisition cost as reduced in certain
cases (2) by amounts written off as an impairment in value
2. Cost reduced by amounts written off as representing an impairment in value
Condensed financial statements
Profit and loss account
Notes Six months Six months Fourteen
to to months to
30.06.08 30.04.07 31.12.07
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Loss on investments at fair value 3 (305) (4,340) (7,862)
through profit or loss
Income 129 125 307
Investment management fee (283) (395) (924)
Other expenses (187) (223) (332)
Loss on operating activities (646) (4,833) (8,811)
Interest payable on loan notes (3) (3) (6)
Loss on ordinary activities before (649) (4,836) (8,817)
taxation
Tax on loss on ordinary activities - - -
Loss on ordinary activities after (649) (4,836) (8,817)
taxation
Basic and fully diluted loss per share 4 (1.4)p (10.0)p (18.5)p
All items in the above statement derive from continuing operations.
The Company has only one class of business and derives its income from
investments made in shares and securities and from bank deposits.
There are no gains and losses for the period other than those passing through
the profit and loss account of the Company.
The accompanying notes are an integral part of this statement.
Balance sheet
Notes 30 June 31 30 April
2008 December 2007
(unaudited) 2007 (unaudited)
�'000 (audited) �'000
�'000
Fixed assets
Investments at fair value through 5 18,044 21,534 24,939
profit or loss
Current assets
Debtors 737 14 34
Cash at bank 2,099 599 1,601
2,836 613 1,635
Creditors: amounts falling due (331) (302) (314)
within one year
Net current assets 2,505 311 1,321
Creditors: amounts falling due in (99) (100) (100)
over one year
Net assets 20,450 21,745 26,160
Capital and reserves
Called-up equity share capital 462 467 476
Share premium account 339 339 338
Capital redemption reserve 72 67 56
Special reserve 21,528 23,157 32,416
Revaluation reserve (5,113) (4,701) (9,444)
Profit and loss account 3,162 2,416 2,318
Total equity shareholders' funds 20,450 21,745 26,160
Net asset value per share 6 44.3p 46.5p 54.8p
The accompanying notes are an integral part of this statement.
Condensed financial statements (continued)
Summarised cash flow statement
Note Six months Fourteen Six months
to months to to
30.06.08 31.12.07 30.04.07
(unaudited) (audited) (unaudited)
�'000 �'000 �'000
Cash outflow from operating activities 7 (332) (982) (531)
Financial investment
Purchase of venture capital investments (979) (4,396) (3,341)
Purchase of listed equity (159) (645) (252)
Sale of venture capital investments 3,345 982 1,122
Sale/redemption of listed equity and fixed 190 5,287 3,816
interest investments
Amounts recovered from investments 82 - -
previously written off
Total net financial investment 2,479 1,228 1,345
Equity dividends paid (464) (487) (458)
Financing
Buy-back of ordinary shares (907) (499)
Issue of shares under the terms of the - 32 29
dividend reinvestment scheme
Repayment of redeemable loan notes (1) - -
Total financing (875) (470)
Increase/(decrease) in cash for the period 1,500 (1,116) (114)
Reconciliation of net cash flow to
movement in net funds
Increase/(decrease) in cash for the period 1,500 (1,116) (114)
Net funds at the start of the period 599 1,715 1,715
Net funds at the end of the period 2,099 599 1,601
The accompanying notes are an integral part of this statement. Net funds
comprise cash at bank and on short-term deposit.
Reconciliation of movements in shareholders' funds
Share Share Capital Special Revaluation Profit Total
capital premium redemption reserve reserve and loss
�'000 account reserve account �'000
�'000 �'000 �'000 �'000 �'000
At 1 January 2008 467 339 67 23,157 (4,701) 2,416 21,745
Shares purchased for (5) - 5 (182) - - (182)
cancellation
Realisation of prior - - - - (400) 400 -
years' net gains on
investments
Transfer from special - - - (1,447) - 1,447 -
reserve to profit and
loss account
Net loss on - - - - (12) 12 -
revaluation of
investments
Loss on ordinary - - - - - (649) (649)
activities after
taxation
Dividends paid - - - - - (464) (464)
At 30 June 2008 462 339 72 21,528 (5,113) 3,162 20,450
The accompanying notes are an integral part of this statement.
Condensed financial statements (continued)
Notes
1. The financial information contained in this Half-Yearly Financial Report
has been prepared on the basis of the accounting policies set out in the
Annual Report for the 14 months ended 31 December 2007.
The annual financial statements of the Company are prepared under the historical
cost convention, except for the measurement at fair value of fixed asset
investments, and in accordance with the applicable UK accounting standards.
2. A final dividend in respect of the period ended 31 December 2007 of 1 p per
share totalling �463,755 was paid on 27 June 2008.
3. The overall loss on investments at fair value through profit or loss
disclosed in the profit and loss account is analysed as follows:
Six months to Six months to Fourteen
30.06.08 30.04.07 months to
(unaudited) (unaudited) 31.12.07
�'000 �'000 (audited)
�'000
Net (loss)/gain on disposal (8) 184 436
Write-off of investments (367) - (5,061)
Recoveries made in respect of 82 - -
investments previously written off
Net loss on revaluation of (12) (4,524) (3,237)
investments
(305) (4,340) (7,862)
Unquoted venture capital investments (99) (179) (7,326)
Quoted venture capital investments 81 (4,590) (1,378)
Bonds and equity investments (287) 429 842
(305) (4,340) (7,862)
`Net (loss)/gain on disposal' represents the difference between proceeds received and
the carrying values of those investments sold during the period.
The amounts reported under `write-off of investments' represent the proportions
of the carrying value that have, in the opinion of the Directors, suffered an
impairment in value.
4. The loss per share of 1 .4p (six months ended 30 April 2007: loss 10.0p) is
based on the loss on ordinary activities after tax of �649,000 (six months
ended 30 April 2007: loss �4,836,000) and on the weighted average number of
ordinary shares in issue during the period of 46,380,000 (six months ended
30 April 2007: 48,259,627).
The loss per share of 18.5p for the fourteen month period to 31 December 2007 is based
on the loss on ordinary activities after tax of �8,81 7,000 and on the weighted
average number of ordinary shares in issue during the period of 47,714,817.
5. Movements in investments during the six months ended 30 June 2008 are as
follows:
Venture Listed Total
capital equity
investments investments �'000
�'000 �'000
Cost at 1 January 2008 23,999 2,236 26,235
Net (loss)/gain at 1 January 2008 (5,677) 976 (4,701)
Valuation at 1 January 2008 18,322 3,212 21,534
Movements in the period:
Purchases at cost 979 159 1,138
Disposals
- proceeds (4,051) (190) (4,241)
- net gains/(losses) on disposal 54 (62) (8)
Impairment in value (367) - (367)
Net gain/(loss) on revaluation of 213 (225) (12)
investments
Valuation at 30 June 2008 15,150 2,894 18,044
Book cost at 30 June 2008 21,017 2,139 23,156
Net (loss)/gain at 30 June 2008 (5,867) 755 (5,112)
Valuation at 30 June 2008 15,150 2,894 18,044
Amounts shown as cost represent acquisition cost, less any reduction made on
account of perceived impairment in value which is regarded as permanent.
6. The net asset value per share as at 30 June 2008 of 44.3p (31 December
2007: 46.5p) is based on net assets of �20,450,000 (31 December 2007: �
21,745,000) and on the 46,168,525 ordinary shares in issue as at that date
(31 December 2007: 46,715,525).There is no dilution effect as at 30 June
2008 (31 December 2007: nil).
7. Reconciliation of operating loss to cash flow from operating activities for
the period is as follows:
Fourteen Six months
Six months to months to to
30.06.08 31.12.07 30.04.07
(unaudited) (audited) (unaudited)
�'000 �'000 �'000
Loss on ordinary activities (646) (8,811) (4,833)
Loss on investments at fair value 305 7,862 4,340
through profit or loss
(Increase)/decrease in debtors (17) 134 114
Increase/(decrease) in creditors 29 (161) (149)
Interest payable on loan notes (3) (6) (3)
Cash outflow from operating (332) (982) (531)
activities
8. Spark Investors Limited (a fellow subsidiary of the Manager), of which JR
Patel is a director, may from time to time be eligible to receive
transaction fees and/or directors' fees from investee companies. During the
period to 30 June 2008, fees of �11,000 attributable to the investments of
the Company were received pursuant to these arrangements (14 months ended
31 December 2007: �43,000 paid to Quester Services Limited of which APG
Holmes and JA Spooner were directors until 11 May 2007 and JR Patel was a
director from that date).
9. The financial information contained in this Half-Yearly Financial Report is
not the Company's statutory accounts. The financial information for the six
months ended 30 June 2008 and 30 April 2007 is not for a financial year and
has not been audited. The statutory accounts for the financial period ended
31 December 2007 have been delivered to the Registrar of Companies and
received an audit report which was unqualified, did not include a reference
to any other matters to which the auditors drew attention by way of
emphasis without qualifying the report and did not contain statements under
section 237(2) and (3) of the Companies Act 1985.
10. Interim management statements relating to the first and third quarters of
the financial year will be released via the Regulatory News Service on or
shortly before 19 May and 19 November each year.
11 .Copies of the Half-Yearly Financial Report are expected to be sent to
shareholders on or about 3 September 2008. Further copies can be obtained from
the Company's registered office.
Independent review report to SPARK VCT 2 plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the Half-Yearly Financial Report for the six months ended 30 June
2008 which comprises the profit and loss account, balance sheet, summarised
cash flow statement, the reconciliation of movements in shareholders' funds and
notes 1 to 11. We have read the other information contained in the Half-Yearly
Financial Report which comprises only the financial highlights, Chairman's
statement, Directors' responsibility statement, fund summary and investment
manager's report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with guidance contained
in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information
performed by the Independent Auditor of the Entity". Our review work has been
undertaken so that we might state to the Company those matters we are required
to state to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company, for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The Half-Yearly Financial Report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
Half-Yearly Financial Report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.
As disclosed in Note 1, the annual financial statements of the Company are
prepared under the historical cost convention, except for the measurement at
fair value of fixed asset investments, and in accordance with applicable UK
accounting standards. The condensed set of financial statements included
in this Half-Yearly Fianancial Report has been prepared in accordance with
the Accounting Standards Board's Statement "Half-Yearly Financial Reports.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the Half-Yearly Financial Report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the Half-Yearly
Financial Report for the six months ended 30 June 2008 is not prepared, in all
material respects, in accordance with the Accounting Standards Board Statement
"Half-Yearly Financial Reports" and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Grant Thornton UK LLP Auditor
Chartered Accountants London
29 August 2008
A copy of the above document is to be submitted to the UK Listing Authority, and will
shortly be available for inspection at the UK Listing Authority's Document Viewing Facility,
which is situated at:
Financial Services Authority
25 North Colonnade
Canary Wharf
London E14 5HS
END
Spark Vct 2 (LSE:SVC2)
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Spark Vct 2 (LSE:SVC2)
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