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PRIVATE EQUITY INVESTOR PLC – Annual Financial Report.

PRIVATE EQUITY INVESTOR PLC

Final Results for the year ended 31 March 2012

 The full Annual Report and Accounts can be accessed via the
Company's website at www.peiplc.com or by contacting the Company
Secretary on telephone 01392 412122. The auditors have reported on the
2011 accounts; their report was unqualified and did not contain a
statement under section 495 (3) or (4) of the Companies Act 2006. A copy
of this report is included in the full Annual Report and Accounts in the
Company's website. 

INVESTMENT OBJECTIVE AND POLICY

Investment Objective

 The Company was launched in February 2000 and provides both private and
institutional investors with a means to participate in specialised
venture capital funds in the USA, a category of funds that is not
otherwise accessible to many investors. The Company's objective is
to achieve substantial capital appreciation for shareholders over its
intended life. 

Investment Policy

Risk
Diversification

 

The Company has invested in high quality venture capital funds,
managed by different management groups, focused on various stages of
growth from early stage to pre-IPO, so as to obtain exposure to a
diversified underlying portfolio of investments in unlisted companies in
the IT and other technology sectors. Such funds have been selected with
regard to the experience and track record of the managers, their
investment strategy and the strength and quality of their deal flow.
 As an Investment Trust, it is the Company's policy that no single
investment will represent more than 15% by value of the Company's
investments at the time of investment. 

The Company’s policy is that it will invest no more than 15% of
its gross assets in other
closed-end

adj.
Issuing a fixed number of shares that can be traded publicly but are not redeemable by the issuer:  
 listed investment companies
(including investment trusts). The Company has made no such investments
and the Directors do not
envisage
  
tr.v. en·vis·aged, en·vis·ag·ing, en·vis·ag·es
1. To conceive an image or a picture of, especially as a future possibility:

2.
 
circumstances

 in which it is likely to
do so.

Asset Allocation

 

The Company's investments are in funds based in the USA
("the Funds"). The managers of the Funds invest principally in
the USA and in unlisted companies. As a result of the flotation or sale
of their investments, the Funds may hold listed securities and these may
be distributed to the Company so that the Company may from time to time
hold listed securities which, however, are unlikely to represent a
significant part of the Company's investments. 

The Company continues to invest in the Funds to meet existing
commitments but is not making any new investments. The Company proposes
to make periodic returns of capital to shareholders from the return of
cash flows from the Funds.

Gearing

 In normal circumstances the Company does not expect to borrow. The
Company's Articles of Association limit borrowing to an amount
broadly equal to its capital and reserves. Some investments made by the
Funds may be geared but the Company does not review the level of gearing
of these underlying investments. 

Liquidity

Because of distributions from the Funds, the Company may hold
substantial balances of liquid funds. These are held principally in

open-ended

adj.
1. Not restrained by definite limits, restrictions, or structure.

2. Allowing for or adaptable to change.

3.
 
investment funds

 pending investment in the Funds in which the
Company has an existing commitment or for distribution to
shareholders.

Derivatives

 

The Company does not make use of financial derivatives and does not
hedge against currency fluctuations.

Distributions

The Funds provide little income. Income may be generated from liquid
funds and the Company may be required to pay dividends to continue to
qualify as an Investment Trust. Such dividends are, however, likely to
be small and
irregular

.

In 2007, the Company made a Tender Offer to shareholders with a
value of up to [pounds sterling]12.5 million, which was fully taken up.
After receiving shareholder and court approval to cancel the
Company's Share Premium Account in November 2008 a Special Reserve
which is distributable was created and the Company has made further
tender offers, of up to [pounds sterling]17.5 million, in December 2008,
[pounds sterling]12 million in February 2011 and [pounds sterling]11
million in May 2012, which were also fully taken up.

Continuation

 Vote

Shareholders will have the opportunity to vote at the Annual General
Meeting in 2014 whether to continue the Company and at five yearly
intervals thereafter.

Management

The Company is self-managed. The Company has appointed Campton
Group, Inc. ("Campton"), which is based in San Francisco, as
its investment adviser. The Company has provided Campton with finance
with a view to developing Campton's private equity fund-of-funds
advisory business. 

Campton

 

 As reported previously, Campton advises the Company on its existing
portfolio and has been developing a fund-of-funds advisory business.
Campton's efforts to develop its business have been hindered as a
result of adverse market conditions. 

SUMMARY OF RESULTS AND FINANCIAL HIGHLIGHTS

                                      31 March 2012  31 March 2011     %
change
                                             Group          Group
Net assets and shareholders' funds    [pounds sterling]65,006,000
[pounds sterling]63,902,000         1.73
Net assets per Ordinary Share              240.72p         236.63p
1.73 ("NAV")
Net assets and shareholders' funds   $103,863,000    $102,432,000
1.40 in US$
                                                                               

Net assets

See owners’ equity.
 per Ordinary Share in US$ 384.61c 379.31c 1.40

 Mid-market price per Ordinary Share        169.50p         175.00p
(3.14)
Discount to NAV                             29.59%          26.05%
Net revenue loss after taxation         [pounds sterling](993,000)
[pounds sterling](1,210,000)
Net total return                       [pounds sterling]1,107,000
[pounds sterling]3,583,000
Total return per Ordinary Share              4.10p          11.22p
Ongoing charges (Company only)*              1.53%           1.56%

Exchange rate at year end(US$/[pounds sterling]) 1.59775 1.6030
0.33

Number of Ordinary Shares in issue     27,004,742      27,004,742
 * The principal ongoing charges calculation excludes subsidiary
expenses of

[pounds sterling]218,000 (2011: [pounds sterling]131,000).

CHAIRMAN’S STATEMENT

I am pleased to present the results for Private Equity Investor PLC
(“PEI” or “the Company”) for the year ended 31 March
2012.

Results

The Company’s Net Asset Value (”
NAV

“) per share at 31
March 2012 was 240.7p, compared with 236.6p a year earlier, an increase
of 1.7%.

 The NAV per share in dollars, the currency in which the Company's
investments are denominated, increased from 379.3c per share, to 384.6c
per share, an increase of 1.4%. The dollar exchange rate remained
substantially unchanged at $1.60. 

The Company’s share price fell by 3.1% during the year, from
175.0p to 169.5p. The discount at 31 March 2012 was 29.6%, up from 26.1%
a year earlier.

As at 31 March 2012 the Company held 24 investments (the
"Investments") in a portfolio of 23 venture capital funds (the
"Funds"), valued at $74.6 million (2011: $82.2 million) being
equivalent to [pounds sterling]46.7 million (2011: [pounds sterling]51.3
million). PEI's year-end cash and readily realisable assets
totalled $29.1 million ([pounds sterling]18.2 million) compared with
$19.9 million ([pounds sterling]12.4 million) a year earlier.
Outstanding commitments at the year end were $7.7 million ([pounds
sterling]4.8 million) compared with $10.7 million ([pounds sterling]6.7
million) at 31 March 2011. 

No dividend is proposed for the period (2011: nil).

Tender Offer

 On 24 April 2012, after the year end, shareholders were sent a circular
informing them that PEI proposed making a further Tender Offer to
purchase shares in the Company having an aggregate value at the Tender
Price of up to [pounds sterling]11 million. The offer was completed on
22 May 2012 with 4,551,822 shares being purchased for cancellation at a
price of 241.6557 pence per share. 

The Company has now made four Tender Offers since
December
 see month.
 2007
returning a total of [pounds sterling]53 million to shareholders. As a
result of all share buybacks and tender offers there are now 22,452,920
shares in issue. The Company will continue its policy of selectively
buying back shares and also consider distributions as and when cash
resources reach an appropriate level.

Distributions from Fund Investments

 In the twelve months ended 31 March 2012, the Company received cash and
stock distributions from the Funds totalling $14.2 million, compared
with $22.6 million in the twelve months ended 31 March 2011 and $9.9
million in the twelve months ended 31 March 2010. Of the $14.2 million
received during the period cash distributions amounted to $8.3 million
and stock distributions amounted to $5.9 million. The largest
distribution received by the Company was a stock distribution from
Technology Crossover Ventures IV, L.P. of shares of Netflix, Inc. valued
at $3.1 million.
Board Membership 

On 11
November
 see month.
 2011,
Rory

a. 1. Dewy.
And shook his wings with  May-dew wet.
– Fairfax.
 Macnamara informed the Board that due to
other commitments he was reluctantly obliged to tender his resignation
from the Board with immediate effect. The Board thanked him for his
enthusiasm and contribution to the Company.

Julian Cazalet was appointed to the Board as a Non-Executive
Director on 7 March 2012. Mr Cazalet has extensive knowledge of UK
equity markets having joined Cazenove & Co in 1973. His specific
expertise is corporate finance and in particular advising investment
trusts in addition to working with industrial and commercial companies.
He retired from JP Morgan Cazenove in December 2007.
 Subsequent to the year end, Colin Kingsnorth resigned from the Board
which he joined in 2004. The Board wishes to thank him for all his
support over this period and is grateful for his valuable contribution
to the Company. On 22 June 2012 Norman Crighton was appointed to the
Board as a Non-Executive Director. Mr Crighton has more than 21
years' experience in closed-ended funds having worked at Olliff
& Partners, LCF Edmond de Rothschild, Merrill Lynch, Jefferies
International Limited and latterly at Metage Capital Limited where he
was responsible for the management of a portfolio of closed-ended funds.
His. His experience covers analysis and research as well as sales and
corporate finance. 

Portfolio Review

The majority of the original commitments have been drawn down but as
noted above, an aggregate of $7.7 million remains outstanding. This is
held in ring-fenced accounts in
accordance

 with an obligation given to
the Court during the conversion of the Company’s Share Premium
Account.

As at 31 March 2012 the Company held investments, through the
Funds, in 455 private (2011:477) and 47 public (2011: 52) companies. Of
the Funds that make up the portfolio, 12 reported a gain in value over
the twelve months under review (2011: 8). During this period, the Funds
made 17 new investments (2011: 31) and 154 follow-on investments (2011:
169) in their portfolio companies. A total of 63 investments in the
underlying portfolio were written up (2011: 155), 163 were written down
(2011: 219) and 25 were written off (2011: 102). During the period,
Funds called capital from the Company in the amount of $3.0 million
(2011: $2.8 million). 

The twelve months under review saw the Initial Public Offerings
(“IPOs”) of seven underlying portfolio companies (2011: nine).
These were:

Boingo Wireless (NEA 10): a California-based provider of commercial
mobile Wi-Fi
Internet

 solutions.

Solazyme (VantagePoint 2006): a California-based developer of
biofuels through the use of microalgae.

Fusion-io (NEA 12): a Utah-based manufacturer of flash-based memory
for server vendors.

HomeAway (
IVP

abbr.
intravenous pyelogram


The use of a dye, injected into the veins, used to locate kidney stones. Also used to determine the anatomy of the urinary system.
 XII): a Texas-based operator of the world’s
largest online marketplace for the
vacation rental

 industry.

Groupon (NEA 12): a Chicago-based deal-a-day group buying
website.

Zynga (IVP XII): a California-based
social gaming

 company.

Vocera (
Vanguard

 VII): a California-based
wireless communications

 platform for hospitals and healthcare facilities.

Campton Group Inc.

Campton, the Company’s advisor, provides the Company with
non-discretionary advice on the Company’s investment portfolio.
Campton continues with its efforts to develop its fund-of-funds advisory
business, although Campton’s efforts to develop its business have
been hindered as a result of the global financial crisis.

Proposed Updated Investment Policy

 A Resolution will be proposed at the Annual General Meeting to be held
on 25 September 2012 to update the Company's stated Investment
Policy. This is principally to reflect the fact that the Company is not
making investments in new private equity funds but is managing its
existing investments with a view to making periodic returns of capital
to shareholders. The updated policy will not make any significant
changes to the Company's current investment focus.

Outlook

 The US economy continues slowly to improve although its financial
markets have also been impacted by the European economic and banking
crisis. The IPO market started 2012 well, but the disappointing Facebook
IPO may chill the IPO market for other technology companies. On a
positive note, the enactment of the JOBS (Jumpstart Our Business
Startups) Act, should help emerging growth companies with some
regulatory relief during the IPO process. We believe that these
regulatory changes will help improve the IPO market over the medium
term.
The Board continues to feel optimistic about the quality of PEI's
underlying portfolio companies and believes that significant value
remains to be realised, although this will be dependant on market and
economic conditions.
Peter Dicks
Chairman
26 July 2012
ADVISOR'S REPORT
Market Overview 

It is helpful to view the Company’s performance and situation
against the background of the US venture capital market-place in
calendar 2011 and the first quarter of 2012.

Fund-Raising

In calendar 2011, there were 181 venture capital funds that raised
a total of $18.8 billion, compared with 170 venture capital funds that
raised $13.8 billion in 2010. The $18.8 billion dollars raised in 2011
marks the first increase in venture fundraising since the recession.
Though venture funds raised 36% more capital in 2011 than 2010, the
amount raised is still down 41% from its prerecession high of $31.9
million in 2006. In the first quarter of 2012, 42 funds (Q1 2011: 46
funds) raised $4.9 billion (Q1 2011: $7.6 billion), a 35% decrease by
dollar commitments and a 9% decline by number of funds compared with the
first quarter of 2011. 

Investment

Venture capital investing in 2011 exceeded 2010 levels and
represented the third highest annual investment total for venture
capital investing in the past decade. In 2011, $29.1 billion was
invested in 3,752 deals, an increase of 24% in dollars and a 5% increase
in deals over the previous year.
                   Amount      Amount         %
%
                invested    invested  increase/    No. of    No. of
increase/
             ($ billions)($ billions)(decrease)     deals     deals
(decrease)
                    2011        2010                 2011      2010
Internet             7.1         4.2        69      1,010       823
23 Specific
Software             6.9         4.9        41      1,046       963
9
Biotechnology        4.9         3.9        26        451       497
(9)
Clean                4.6         4.0        15        342       307
11 Technology
Medical              2.8         2.4        17        345       346
- Devices and Equipment
Other                2.8         4.0       (30)       558       628
(11)
Total               29.1        23.4                3,752     3,564
5 

Source:
MoneyTree

 Report by PricewaterhouseCoopers and the
NVCA

,
based on data from Thomson
Reuters

, as of 1Q2012.

 Internet and Software received the most amount of capital in 2011,
increasing 69% and 41% year-over-year, respectively. The year 2011
marked the highest level of Internet investment over the past decade
with $7.1 billion going into 1,010 deals, compared to $4.2 billion in
823 deals in 2010. Life Science companies, including Biotechnology and
Medical Devices and Equipment, received more dollars but in fewer deals.
The first quarter of 2012 saw $5.8 billion invested in 758 deals, a fall
of 12% in terms of dollars and 14% in the number of deals when compared
with the first quarter of 2011, during which $6.7 billion was invested
in 861 deals. 

Liquidity

 During 2011, 467 venture-backed M&A deals were reported, up 5% from
2010 (445), with an aggregate value of $24 billion - a 31% increase from
2010 and the highest level since 2007. For the first quarter of 2012
there were 86 venture-backed M&A deals reported, a decline of 55%
from the 133 reported deals in the first quarter of 2011. Of the M&A
deals that disclosed deal size in the first quarter of 2012, the average
disclosed deal size was $114 million, drawn down 5% from the first
quarter of 2011.
A total of 53 venture-backed companies held their Initial Public
Offering ("IPO") during 2011 with a total offer amount of $9.9
billion, a 28% decline in number but a 33% increase in dollar value when
compared with 2010. The first quarter of 2012, however, marked the
strongest opening quarter for IPOs since the first quarter of 2007, with
19 IPOs raising $1.5 billion.
Facebook priced its highly anticipated IPO on 17 May 2012, raising over
$16 billion at a valuation in excess of $100 billion. Facebook closed
its first day of trading with the stock price slightly higher than the
IPO price, but its stock price fell below the IPO price on the next day
of trading, and the stock price drifted lower in the subsequent trading
days. Facebook's poor stock performance post-IPO raised concerns
about the ability of other technology companies to go public over the
next few months. 

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups (JOBS) Act
was signed into law, with a view to, among other things, reducing the
regulatory burden for "emerging growth companies" during the
IPO process. Emerging growth companies are generally companies with
under $1 billion in revenue in their prior fiscal year, which likely
includes most private, venture capital-backed technology companies. Note
however, that Facebook was not an emerging growth company at the time of
its IPO as it had greater than $1 billion in revenue in its prior fiscal
year. The JOBS Act provides emerging growth companies with relief from
some regulatory and reporting requirements for the IPO process and
afterward until they are no longer deemed emerging growth companies. 

PORTFOLIO OF FUNDS

Summary of Individual
Venture Capital Funds

 Investments:

                                                                       31 March
                                                                          2012
                                                                         Total
                                                 Fund    PEI total
called
                                                 size   Commitment
capital
                                   Vintage     US$(m)          US$
US$ Name
APV Technology Partners III           1999        109    5,000,000
5,000,000
Bay III                               2000        179    5,000,000
4,900,000
Crescendo IV                          2000        582   10,000,000
10,000,000
Dawntreader Fund II                   2000        202   30,000,000
30,000,000
Draper Fisher Jurvetson ePlanet       1999        646   30,000,000
29,550,000 Ventures
                                                                              

Draper Fisher Jurvetson

 Fund VI 1999 379 2,000,000 2,000,000

Draper Fisher Jurvetson Fund VII 2000 643 5,000,000 5,000,000

 Draper Fisher Jurvetson Gotham        1999         85    3,000,000
3,000,000 Venture Fund
Draper Fisher Jurvetson Gotham        2010          9      300,000
112,200 Venture Fund Expansion Unit
Focus Ventures II                     2000        443   30,000,000
28,350,000
Francisco Partners II                 2006      2,300    5,000,000
4,655,000
Institutional Venture Partners        2007        606    5,000,000
4,750,000 XII
                                                                              

New Enterprise Associates 9* 1999 880 5,000,000 4,900,000

New Enterprise Associates 10 2000 2,323 10,000,000 9,850,000

 New Enterprise Associates 12          2006      2,525    3,000,000
2,640,000
Oak Investment Partners X             2000      1,600   10,000,000
10,000,000
Sprout Capital IX                     2000      1,083    3,750,000
3,750,000
TCV IV                                2000      1,642   25,000,000
24,400,000
Vanguard VII                          2000        211    3,000,000
3,000,000
VantagePoint Venture Partners         2006      1,000    5,000,000
3,500,000 2006
VantagePoint Venture Partners IV      2000      1,400   10,000,000
10,000,000
Vector Capital IV                     2007      1,224    4,000,000
1,989,132
Zone Venture Fund II                  1999         99   10,000,000
10,000,000
Zone Venture Fund II Annex            2004          4      400,000
400,000
Total Unquoted Venture Capital                         219,450,000
211,746,332 Funds
* In liquidation 

Description of Portfolio Funds

APV

 Technology Partners III, L.P.

 Total committed capital                                               

$109.1m

 Private Equity Investor commitment

$5.0m

APV Technology Partners is an early-stage venture capital firm
focusing on information technology investments. The firm has raised
three funds with over $200 million of committed capital.

 Website: not available
 Bay III, L.P.
Total committed capital
$178.5m
Private Equity Investor commitment                                      

$5.0m

 Bay Partners has been active in early stage technology investment since
1976 and has funded over 250 successful businesses (IPOs and $250+
million exits) Bay partners is located in Palo Alto, California.
Website: www.baypartners.com
Crescendo IV, L.P.
Total committed capital
$581.7m
Private Equity Investor commitment                                     

$10.0m

 Crescendo Ventures is a Palo Alto, CA-based venture capital firm that
has raised five international venture capital funds and managed over one
billion dollars. The firm invests in software, system, component and
services companies and the team has over 60 years of venture investing
experience and over 80 years of combined operational experience. 

Website: www.crescendoventures.com

 Dawntreader Fund II, L.P.
 Total committed capital
$202.2m
Private Equity Investor commitment                                     

$30.0m

 Dawntreader Ventures is an early-stage venture capital firm focused on
investing in software, Internet and digital media companies. Formed in
1998, the firm is based in New York and has total committed capital of
$270 million across its funds.
Website: www.dtventures.com 

Draper Fisher Jurvetson ePlanet Ventures, L.P.

 Total committed capital                                               

$646.2m

 Private Equity Investor commitment                                     

$30.0m

 Draper Fisher Jurvetson ePlanet Ventures, L.P. is advised by ePlanet
Capital (formerly ePlanet Ventures). Formed in 1999, ePlanet Capital is
a global venture capital firm with offices in Asia, Europe and the
United States. Examples of sectors in which ePlanet Capital has invested
include Internet and e-commerce, semi-conductors and electronics,
wireless and telecommunications, healthcare and medtech, green energy
and energy efficiency. The firm's preferred investment stages are
growth capital and expansion stage venture capital, with investments in
early stage venture capital when there are attractive opportunities. 

Website: www.dfjeplanet.com

Draper Fisher Jurvetson Fund VI, L.P.

 Total committed capital (Fund VI)                                     

$378.8m

 Private Equity Investor commitment (Fund

$2.0m

VI)                                                                        

Draper Fisher Jurvetson Fund VII, L.P.

 Total committed capital (Fund VII)                                    

$643.1m

 Private Equity Investor commitment (Fund

$5.0m

VII)
 Founded in 1985, Draper Fisher Jurvetson ("DFJ") has created
a global network of affiliated venture funds and has offices located in
the United States, China and India. DFJ and its network of funds have
over $7 billion in capital commitments and have made more than 600
investments on four continents. DFJ invests primarily in early stage
deals, but also invests in expansion-stage deals and occasionally in
later-stage deals where the risk/return analysis is favourable. DFJ
focuses on technology sectors including information technology,
nanotechnology, life sciences and clean energy. 

Website: www.dfj.com

Draper Fisher Jurvetson
Gotham
 , name for New York City first used by Washington Irving and others in the Salmagundi Papers, with satirical reference to Gotham, England, where the wise men acted as fools in order to avoid paying for the king’s upkeep.
 Venture Fund, L.P.

 Total committed capital
$93.8m
                                              (including $8.5 million
from the
                                                             Expansion
Units)
Private Equity Investor commitment
$3.3m
                                       (including $0.3 million Expansion
Unit
                                                                  commitment)
DFJ Gotham Ventures is an early-stage venture capital firm based in New
York City focused primarily on investments in information technology
start-ups based in the Northeast US and Israel. DFJ Gotham invests in
all sub-sectors of information technology,including digital media,
e-commerce, financial technology, mobile and network infrastructure. DFJ
Gotham prefers to be the first institutional investor in a company,
making its investment in the seed or Series A round. DFJ Gotham is part
of the DFJ global network.
Website: www.dfjgotham.com
Focus Ventures II, L.P.
Total committed capital
$442.7m
Private Equity Investor commitment                                     

$30.0m

Focus Ventures, located in
Palo Alto, California
, from Spanish: palo: “stick” and alto: “high”, i.e.
, was founded in
1997 and currently has over $830 million under management. The firm
focuses on investments in privately-held, expansion stage technology
companies that have previously received backing from a leading early
stage venture capital

firm. Focus Ventures concentrates on making investments in
communications and software companies that have completed initial
product development and have

begun the marketing of their products and/ or services. Investments
are typically in the $3-8 million range, with Focus Ventures serving as
lead investor in
approximately
  
adj.
1. Almost exact or correct:

2.
 
three-quarters
 npl
 of the rounds in which the
firm participates.

Website: www.focusventures.com

 Francisco Partners II, L.P.
 Total committed capital
$2,300.3m
Private Equity Investor commitment                                      

$5.0m

 Francisco Partners ("FP") provides transformational capital
to technology companies facing strategic or operational inflection
points. FP invests across a broad range of technology sectors, including
software, Internet, security, healthcare IT,communications, IT services,
semiconductors and capital equipment. With approximately $7 billion of
capital raised to date and a team of 30 investment professionals
worldwide, FP has the flexibility and capacity to pursue investments
with transaction values ranging from $25 million to over $2 billion. FP
pursues a variety of investment types, including acquisitions of private
companies, divisional buyouts, growth equity investments, public company
take privates and sponsored mergers and acquisitions. FP has offices in
San Francisco, California and London, United Kingdom. 

Website: www.franciscopartners.com

Institutional Venture Partners XII, L.P.

 Total committed capital                                               

$606.1m

 Private Equity Investor commitment

$5.0m

Institutional Venture Partners ("IVP"), located in Menlo
Park, California, was founded in 1980 and currently has $4 billion under
management. The firm focuses on later-stage investments in
rapidly-growing technology and media companies with over $20 million in
revenue. IVP typically invests $10 to $100 million per company in a
variety of transaction types, including venture growth investments,
industry rollups, recapitalisations, secondaries, spinouts and select
public market transactions. IVP concentrates on US-based companies in
the Internet/Digital Media, Enterprise IT and Mobile/Communications
sectors. Since inception, IVP has invested in over 300 companies, 90 of
which have gone public. 

Website: www.ivp.com

New Enterprise Associates 9, L.P.

 Total committed capital                                               

$879.5m

 Private Equity Investor commitment

$5.0m

New Enterprise Associates 10, L.P.

 Total committed capital                                             

$2,322.9m

 Private Equity Investor commitment                                     

$10.0m

New Enterprise Associates 12, L.P.

 Total committed capital                                             

$2,525.3m

 Private Equity Investor commitment

$3.0m

 Founded in 1977, New Enterprise Associates ("NEA") is the
world's largest venture capital firm, with more than $11 billion in
committed capital across 13 funds. NEA's team of over 70 investment
professionals invests across four continents from offices in the US,
India and China. NEA invests across three key domains - information
technology, healthcare and energy technology - in both early stage and
venture growth equity opportunities. Since its founding, NEA has funded
more than 650 companies, 165 of which have gone public and 255 of which
have been successfully merged or acquired. 

Website: www.nea.com

Oak Investment Partners X, L.P.

 Total committed capital                                             

$1,600.0m

 Private Equity Investor commitment                                     

$10.0m

Oak Investment Partners ("Oak") is a multi-stage venture
capital firm with offices in Greenwich, Connecticut, Minneapolis,
Minnesota and Palo Alto, California. Oak focuses on high growth
opportunities in the Clean Energy, Financial Services Technology,
Healthcare, Information Technology, Internet and Consumer sectors, and
generally invests between $25 and $150 million per company. Over its
34-year history, Oak has achieved a strong track record as a
stage-independent investor funding more than 498 companies at key points
in their lifecycle. Oak has been involved in the formation of companies,
funded spinouts of operating divisions and technology assets, and
provided growth equity to mid- and late-stage private businesses and to
public companies through PIPE investments.
 Website: www.oakvc.com
Sprout Capital IX, L.P.
Total committed capital
$1,082.7m
Private Equity Investor commitment                                      

$3.8m

 Based in New York City, New York, Sprout Group is one of the oldest and
largest institutional venture capital firms focused on emerging
companies. Since its founding in 1969, Sprout Group has financed more
than 350 companies and has

raised nearly $3.0 billion in committed capital from leading
institutional investors and individuals. Sprout Group’s investment
focus has been in companies within the communications, software and
healthcare technology industries across all stages of development, from
start-up to
buyout

.

 Website: www.sproutgroup.com
 TCV IV, L.P.
Total committed capital
$1,642.3m
Private Equity Investor commitment                                     

$25.0m

 Founded in 1995, Technology Crossover Ventures ("TCV") is one
of the largest growth equity firms focused solely on information
technology companies. TCV has offices in Palo Alto, California and New
York City and currently manages $7.7 billion in capital commitments. TCV
takes both minority and majority positions and provides capital for
growth, shareholder liquidity, acquisitions, buyouts and recapitali
sations. TCV has the ability to invest $20 million to over $200 million
per company in a broad range of sectors, including software,
communications, infrastructure, services and semiconductors. To date,
TCV has financed over 150 companies, 50 of which have gone public and 40
of which have merged or been acquired.
Website: www.tcv.com
Vanguard VII, L.P.
Total committed capital
$210.8m
Private Equity Investor commitment                                      

$3.0m

 Founded in 1981, Vanguard Ventures is a venture capital firm
specialising in seed and early stage high technology investments.
Vanguard Ventures currently manages $350 million in capital commitments
and has offices in Palo Alto, California and Houston, Texas. Since
inception, Vanguard Ventures has funded 120 start-ups, 30 of which have
become major corporate successes and have created over $70 billion in
market value. 

Website: www.vanguardventures.com

VantagePoint Venture Partners IV, L.P.

 Total committed capital                                             

$1,400.0m

 Private Equity Investor commitment
$10.0m
VantagePoint 2006 Fund, L.P.
Total committed capital
$1,000.3m
Private Equity Investor commitment                                      

$5.0m

 VantagePoint Capital Partners ("VPCP") has been funding
transformative companies since 1996. VPCP currently has over $4 billion
of committed capital and has made substantial investments in energy
innovation, energy efficiency, information technology, internet and
digital media, healthcare and Asia. VPCP was among the first large
investment firms to recognise the opportunity in energy innovation and
efficiency and has since committed substantial resources for this
burgeoning opportunity. VPCP has offices in San Bruno, California and
Beijing, China.
Website: www.vpcp.com
Vector Capital IV, L.P,
Total committed capital
$1,224.5m
Private Equity Investor commitment                                      

$4.0m

Founded in 1997, Vector Capital is located in San Francisco,
California and manages over $2 billion in capital commitments. Vector
Capital is a value investor in established technology businesses, both
public and private. As a private investor, Vector Capital spins out
non-core businesses from corporations, buys founder-owned companies and
fixes balance sheets through recapitalisations. As a public investor,
Vector Capital takes strategic stakes in undervalued companies. Vector
Capitalis highly selective, choosing to invest in only a handful of
opportunities each year. Vector Capital invests in technology companies
that have at least $30 million in revenue, strong customer bases and
high gross profit margins. 

Website: www.vectorcapital.com

 Zone Venture Fund II, L.P.
 Total committed capital
$98.7m
Private Equity Investor commitment                                     

$10.0m

Zone Venture Fund II
Annex
  
tr.v. an·nexed, an·nex·ing, an·nex·es
1. To append or attach, especially to a larger or more significant thing.

2.
, L.P.

 Portfolio Summary                                                       

$4.4m

 Total commitment (31 March 2011)

$0.4m

Located in Los Angeles, California, Zone Ventures is a venture
capital firm that makes investments in young, high-growth companies,
primarily in the Southern California region. Zone Ventures focuses on
the fast growing emerging industries within information technology,
including software, communications, information content, information
services and high value-added electronic components. Zone Ventures has
built strong relationships with universities, R&D labs,
entrepreneurs and financial institutions in the Southern California
region.
 Website: www.zonevc.com
INVESTMENT PORTFOLIO
As at 31 March 2012
                                                                % of
% of
                                    Total    Fair     Fair       net
net
                               commitment   Value**  value**  assets
assets
                                  US$'000 US$'000    [pounds
sterling]'000      2012    2011
Unquoted Venture Capital Funds
APV Technology Partners III         5,000     343      215       0.3
0.3
Bay III                             5,000      22       14       0.0
0.1
Crescendo IV                       10,000   2,320    1,452       2.2
2.4
Dawntreader Fund II                30,000   8,603    5,384       8.3
10.3
Draper Fisher Jurveston            30,000  11,229    7,028      10.8
12.0 ePlanet Ventures
Draper Fisher Jurveston Fund        2,000     956      598       0.9
1.1 VI
Draper Fisher Jurveston Fund        5,000   3,658    2,289       3.5
3.4 VII
Draper Fisher Jurveston             3,000     906      567       0.9
1.3 Gotham Venture Fund
Draper Fisher Jurveston               300     224      140       0.2
0.2 Gotham Venture Fund Expansion Unit
Focus Ventures II                  30,000   6,342    3,969       6.1
5.2
Francisco Partners II               5,000   4,025    2,519       3.9
4.5
Institutional Venture               5,000   8,676    5,430       8.4
7.4 Partners XII
New Enterprise Associates 9*        5,000   1,193      746       1.1
1.3
New Enterprise Associates 10       10,000   3,288    2,058       3.2
3.8
New Enterprise Associates 12        3,000   3,543    2,218       3.4
2.7
Oak Investment Partners X          10,000   4,980    3,117       4.8
5.2
Sprout Capital IX                   3,750     491      308       0.5
1.1
TCV IV                             25,000   1,624    1,016       1.6
6.2
Vanguard VII                        3,000   1,030      645       1.0
0.7
VantagePoint Venture Partners       5,000   3,053    1,911       2.9
2.6 2006
VantagePoint Venture Partners      10,000   4,742    2,968       4.6
5.9 IV
Vector Capital IV                   4,000   1,890    1,183       1.8
0.8
Zone Venture Fund II               10,000   1,334      835       1.3
1.6
Zone Venture Fund II Annex            400      86       54       0.1
0.2
Total Unquoted Venture            219,450  74,558   46,664      71.8
80.3 Capital Funds
Open-ended Investment Funds
BlackRock ICS Institutional             -   4,000    2,503       3.8
5.4 USD Liquidity Fund
JP Morgan USD Liquidity                 -   3,500    2,191       3.4
4.4 Premier Distribution Fund
RBS Global Treasury Funds Plc           -   3,000    1,878       2.9
- USD Money Fund Distributing
GBP
RBS Global Treasury Funds Plc           -   6,391    4,000       6.1
0.5 GBP Money Fund Distributing
Scottish Widows GBP Liquidity           -   7,989    5,000       7.7
- Fund Plc
Total Open-ended Investment             -  24,880   15,572      23.9
10.3 Funds
Other Investments held directly
by the Company Common Stock
Vonage Holdings                         -      67       42       0.1
-
Motricity Inc                           -       -        -         -
0.2
Total Other Investments                 -      67       42       0.1
0.2
Total Investments                 219,450  99,505   62,278      95.8
90.8
Other non-current assets                        3        2         -
-
Net current assets                          4,355    2,726       4.2
9.2
Net assets                                103,863   65,006     100.0
100.0
* In Liquidation
** Of remaining investment 

BOARD OF DIRECTORS (ALL NON-EXECUTIVE)

At the date of this report the following are the Directors of the
Company:

 Peter Dicks (Chairman)
 Julian Cazalet
Norman Crighton
David Quysner CBE 

DIRECTORS’ REPORT AND BUSINESS REVIEW

The Directors of Private Equity Investor PLC (“PEI” or
“the Company”) present their Report and Business Review for
the year ended 31 March 2012.

Business Review

Introduction

 The Directors' Report includes a Business Review intended to
present a balanced and comprehensive analysis of the development and
performance of the business of the Company during the financial year and
the position of the Company at the year end, together with a description
of the principal risks and uncertainties facing the Company and an
indication of the likely future developments in its business. The
Directors also include an analysis using key performance indicators to
aid understanding of the above. The Business Review has been prepared in
accordance with the Companies Act 2006 and should be read in conjunction
with the Chairman's statement and Advisor's Report above. 

Business of the Company

 The principal activity of the Company is to carry on business as an
investment trust in accordance with its investment objective and policy.
The Directors do not envisage any change to this activity in the future.
The Company has a portfolio of Venture Capital Funds to which it has
made capital commitments, some of which remain to be drawn down. The
Company will honour these commitments and will continue to receive
distributions in cash and in specie from the Funds. It does not,
however, currently intend to enter into any new commitments and it is
the Company's intention to make periodic returns of capital to
shareholders when monies are received from the Funds. As noted below,
Campton, in which the Company has conversion rights that would allow it
to hold a majority stake, is developing a fund-of-funds advisory
business that, if successful, would continue beyond the liquidation of
the portfolio. 

A review of the Company’s activities is given in the
Chairman’s statement and in the Portfolio of Funds above.

Results and dividends

The results for the year are set out in the
consolidated
  
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates

v.tr.
1. To unite into one system or whole; combine:
 statement
of comprehensive income. The Directors are not recommending the payment
of a dividend for the year ended 31 March 2012.

Status

The Group comprises Private Equity Investor PLC and its subsidiary,
Campton Group, Inc., a
California
 , most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W).
 corporation. Campton acts as

investment advisor

 to the Company.

 The Company is an investment company as defined under Section 833 of
the Companies Act 2006 ("the Companies Act"), and was
incorporated and registered in England and Wales on 19 January 2000 with
Company Number 3912487. Its shares are listed on the London Stock
Exchange.
The Company has received written approval from HM Revenue and Customs as
an authorised investment trust under Section 1158 of the Corporation Tax
Act 2010 ("CTA") for the accounting year ended 31 March 2011.
This approval is subject to there being no subsequent enquiry under
corporation tax self-assessment. In the opinion of the Directors, the
Company has subsequently directed its affairs so as to enable it to
continue to qualify for and seek such approval. The Articles of
Association provide for shareholders to consider the continuation of the
Company as an investment trust at the Annual General Meeting to be held
in 2014 and at every fifth subsequent Annual General Meeting thereafter.

The Company’s shares qualify as investments in Individual
Savings Accounts (“ISAs”).

Investment objective

 The Company was launched in February 2000 and provides both private and
institutional investors with a means to participate in specialised
venture capital funds in the USA, a category of funds that is not
otherwise accessible to many investors. The Company's objective is
to achieve substantial capital appreciation for shareholders over its
intended life. 

Investment policy

 The Company's policy has been to invest in high quality venture
capital funds, managed by several different management groups, focused
on various stages of growth from early stage to pre-IPO, so as to obtain
exposure to a diversified underlying portfolio of investments in
unlisted companies in the IT and other technology sectors. Such funds
have been selected with regard to the experience and track record of the
managers, their investment strategy and the strength and quality of
their deal flow. 

Further details of the Investment Policy are provided above.

Net asset valuation

The net asset value (“NAV”) per Ordinary Share at 31 March
2012 was 240.72p (2011: 236.63p).

Venture Capital Funds are stated at Directors' valuation
which is normally based on the valuations provided by the managers of
those funds which are received by the Company at least quarterly. The
valuation methodology normally used by these funds is that the
underlying investments are valued at fair value. In the case of
marketable securities, the valuations are typically based on a mark to
market basis. In the case of non-listed securities Venture Capital Funds
in the US value their portfolios in accordance with Financial Accounting
Standards Board's FAS 157 which is broadly comparable to the
International Private Equity and Venture Capital ("IPEVC")
guidelines. 

Key performance indicators

 

The Board reviews the performance of the Investments at its meetings
and receives monthly update reports from the investment advisor. The NAV
performance, discount to NAV and ongoing charges ratio have been
selected as the most relevant KPIs to measure the performance of the
Company. These are
disclosed
  
tr.v. dis·closed, dis·clos·ing, dis·clos·es
1. To expose to view, as by removing a cover; uncover.

2. To make known (something heretofore kept secret).
 above.

Ongoing charges ratio

 The Directors maintain an objective to run the Company efficiently and
monitor its operational expenses on an ongoing basis. The ongoing
charges ratio for the Company for the year ended 31 March 2012 was 1.53%
(2011: 1.56%) excluding subsidiary expenses of [pounds sterling]218,000
(2011: [pounds sterling]131,000). As the Company returns cash to
shareholders the percentage of expenses to net assets may increase. 

Discount

The Directors monitor regularly the level of discount at which the
Group’s shares are trading. On 31 March 2012 the Group’s share
price stood at a discount of 29.59% to NAV, compared to 26.05% 12 months
earlier.

 The Directors have considered the introduction of a discount protection
mechanism, whereby the Company might purchase shares in the market at a
stated minimum discount to NAV. However,unlike many other investment
trusts, the Company does not hold readily marketable investments from
which such purchases might be funded; moreover, it has already indicated
that it will periodically distribute to shareholders the proceeds of
distributions from its portfolio. In these circumstances, the Directors
do not consider that a formal discount protection mechanism is
appropriate but they reserve the ability to buy in shares from time to
time. 

Principal risks and uncertainties and their
mitigation

 

 Risk assessment and the review of internal controls are undertaken by
the Board in the context of the Company's overall investment
objective. The review covers the key business, operational, compliance
and financial risks facing the Company. Full details of how the Board
fulfils this role are shown in the Annual Report.
The principal risks and uncertainties identified by the Board are
discussed below, together with an outline of how the Board recognises
and seeks to control these risks. Mitigation of the principal risks is
sought and achieved as far as possible. Further information regarding
financial risks is set out in Note 18 to the accounts below. 

Stock market performance risk

 The Funds in which the Company is invested seek to realise their own
investment objectives by selling or floating their investee companies.
Consequently a proportion of the Company's underlying investments
is in publicly quoted stocks (listed primarily on the NASDAQ and NYSE) -
typically as a result of IPOs or open market purchases or as a result of
trade sales in which the consideration has been by way of equity in the
acquirer.
When such shareholdings are distributed it is the Company's normal
policy to sell them, ideally close to the distribution price, as soon as
possible. There may be instances where the Company continues to hold
distributed shares, in an effort to obtain a more advantageous selling
price or otherwise, for example where there are restrictions on sale.
However, this practice will also expose the Company to market risk. The
details of the Company's investment portfolio above show that the
Company held one publicly quoted investment, Vonage Holdings Inc. which
amounted to 0.1% of the net assets as at 31 March 2012.

Company and fund performance risk

 By their nature, investments in new and unlisted companies often
present greater risk than those in more established enterprises. In
addition, the Funds may make poor investments. The Company has sought to
mitigate this risk through the diversification of its investment across
a range of LP venture funds (currently 23) which are themselves invested
in over 450 underlying companies. 

Regulatory
  
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates
1. To control or direct according to rule, principle, or law.

2.
 breach risk

Relevant legislation and regulations which apply to the Company
include the Companies Act 2006, the CTA ("the Corporation Tax
Act") and the Listing Rules of the Financial Services Authority
("FSA"). The Company has noted the recommendations of the UK
Corporate Governance Code and the AIC Code of Corporate Governance and
the relevant AIC Guide for Investment Companies. Its statement of
compliance appears below. A breach of CTA could result in the Company
losing its status as an investment trust company and becoming subject to
capital gains tax, whilst a breach of the Listing Rules might result in
censure by the FSA. At each Board meeting the status of the Company is
considered and discussed, so as to ensure that all regulations are being
adhered to by the Company and its service providers. 

There have been no breaches of laws or regulations during the period
under review and up to the date of this report.

Fund term risk

 Typically, when a venture capital fund reaches the end of its term
(including extensions), the fund's manager engages in an orderly
liquidation of the fund's investments. During this liquidation
process, the manager of the liquidating fund attempts to exit the
remaining investments in an orderly manner while maximising value for
the fund's investors. However, there is a risk that a liquidating
fund may realise proceeds on the sale of investments at less than
holding value. If this happens, it could adversely impact the value of
interests in the fund held by investors. In addition, a liquidating fund
will incur expenses during the liquidation period, which could also
adversely impact the value of investors' interests in the fund.
New Enterprise Associates 9, L.P. is now in liquidation. In addition,
several other Funds are nearing the end of their terms, including
extensions. As Funds liquidate, there is a risk that the Company may
receive proceeds from the Fund that are less than the reported Fair
Value. 

Valuation risk

The Directors are, to a significant extent, reliant on the accuracy
and timeliness of the financial information provided to them by the
General Partners of the Funds in which the Company invests. The Company
receives valuations on a quarterly basis and there can be a time delay
in the valuations being reported to the Company and reflected in its net
asset value.

Market operation risk

The Company is reliant on the efficient operation of markets to
provide an exit route from its investments held within the Funds. Exits
are achieved through trade sales and the sale of stocks following an IPO
of an underlying company. In periods of uncertain markets, exits can be
delayed and the Company may see a decrease in distributions received. 

Exchange rate risk

The majority of the Company’s assets are held in US dollar
denominated securities and, therefore, shareholders investing in the
Company’s shares quoted in sterling are exposed to currency
fluctuations between these currencies. It is not the Company’s
policy to hedge against currency fluctuations.

Future outlook

 Despite difficult economic circumstances, the Company's portfolio
has continued to deliver a steady flow of distributions and this is
expected to continue, albeit at levels that will fluctuate reflecting
the M&A and IPO markets. It is the Company's stated policy that
it continues to meet existing commitments to the Funds in which it has
invested but that it is not making commitments to new Funds. Instead,
the Company proposes to make periodic returns of capital to shareholders
and this will be financed out of distributions from the Funds or by the
sale of holdings in individual Funds. 

In addition to the value of its portfolio, the Company has valuable
expertise in Venture Capital fund-of-funds management. It is seeking to
build on this through the development of Campton, in which it has the
right to acquire a majority holding.

Capital structure and buyback of shares

In May 2008, shareholders approved the cancellation of the
Company's Share Premium Account which, subject to the necessary
court approval obtained on 29 October 2008, permitted the creation of a
special distribution reserve. This enabled the Company to make further
returns of capital to shareholders. During the year no shares were
repurchased. No shares were held in, or issued from Treasury during the
year.
 At the year-end, the Company had issued share capital of 27,004,742
Ordinary Shares of 0.01p each. Pursuant to an undertaking provided by
Laxey Partners Limited "Laxey" on 11 August 2010, Laxey has
agreed that in respect of any resolution proposed by the Company, the
voting rights attaching to all shares in the Company in which Laxey (and
all funds of which it is the discretionary manager of) shall only be
exercised to the extent that the voting rights so expressed do not
exceed 29.99% of the total voting rights of the Company. Presently Laxey
(and all funds of which it is the discretionary manager of) holds 13.21%
and, as a result, is not restricted by such undertaking. Other holders
of Ordinary Shares have unrestricted voting rights at all general
meetings of the Company, each share carrying one vote in the event of a
poll. 

Campton Group, Inc.

 The Company has appointed Campton Group, Inc. ("Campton"), a
California corporation as its investment advisor. The Company has
provided Campton with finance with a view to developing Campton's
private equity fund-of-funds advisory business. The Company has
conversion rights on exercise of which it would hold a majority stake in
Campton with the balance being held by Campton's management team.
Campton advises the Company on its existing portfolio and has been
developing a fund-of-funds advisory business. Campton's efforts to
develop its business have been hindered as a result of the adverse
market conditions. 

Environment, employment and socially responsible investment

 The Company is fully aware of each General Partner's investment
policy at the time it commits to a new Fund. Limited Partners such as
the Company, however, are not consulted on individual investments made
by the General Partner in their particular funds. Subject to this, the
Company and Campton attempt to conform to best practice on environmental
and other social responsibility issues. The Company has one employee,
its office manager of its London office, and Campton has three employees
based in San Francisco. 

Stewardship

 

The Company has noted the principles of the UK Stewardship Code.
Following its investment objectives it does not often hold stocks
directly and therefore does not have opportunities to vote at general
meetings. Through its investment advisor, Campton, the Company maintains
an open dialogue with the Funds and participates in any meetings and
investor actions when it has the right to do so.
 Financial instruments 

The policy and practice of the Company with regard to financial
instruments is set out in note 18 of the Notes to the accounts.

Management arrangements

 The Board consists of Non-Executive Directors who are collectively
responsible, inter alia, for implementing the investment policy of the
Company and for monitoring its investments. With effect from 1 April
2007 the Company has entered into a non-discretionary investment
advisory agreement with Campton. A fee of up to 0.7% per annum of the
Net Asset Value is payable, plus expenses, to Campton which is invoiced
monthly. The advisory agreement may be terminated by either party on six
months' notice. The Board has agreed that it is the best interest
of shareholders that it will remain self-managed and the Board will
collectively make all investment and management decisions. The Board
receives monthly and other periodic reports from Campton on the status
of PEI's Investments and the US venture capital environment, and
discusses the performance of the investments at each Board meeting. The
cash resources of the Company have been invested in open-ended
investment funds. 

Under an agreement dated 31
January
 see month.
 2000 (revised 8 March 2012)
company secretarial and administrative services are provided by Capita
Sinclair
Henderson

1 City (1990 pop. 25,945), seat of Henderson co., NW Ky., on the Ohio River, in an oil, coal, tobacco, corn, and livestock area; founded 1797, inc. as a city 1867.
 Limited. It provides similar services for a number of
other investment trusts. The administration agreement may be
terminated
  
v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates

v.tr.
1. To bring to an end or halt:
 by either party giving not less than 12 months’ notice. Details of
fees paid are disclosed in Note 3 to the accounts below.

Contractual arrangements essential to the business of the
Company

Other than the Investment Advisor Agreement and the Company
Secretarial and Administrative Agreement described above, there are no
contractual arrangements that are considered essential to the business
of the Company.

Directors

Biographies of the Directors in office as at the date of this report
are shown in the Annual Report.

 Going concern
In light of the Company's Investment Objective and Policy the
Directors have reviewed the principal risks and uncertainties facing the
Company (as stated in the Directors' Report and Business Review
above) together with the Company's commitments and contingent
liabilities (note 17), analysis of financial assets and liabilities
(note 18,) and the Company's cash and readily realisable
investments required to meet its investment obligations and expenditure.
After due consideration, the Directors are of the opinion that the
Company has adequate resources to meet all outstanding commitments and
to continue in operational existence for the foreseeable future. For
this reason, they consider it appropriate to continue to adopt the going
concern basis in preparing the Annual Report. 

The full Annual Report contains the following statements regarding
responsibility for the financial statements and management
report/business review included therein (references in the following
statements are to pages in the Annual Report).

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE
ACCOUNTS

The Directors are responsible for preparing the Annual Report and
the Group financial statements in accordance with applicable United
Kingdom law and those International Financial Reporting Standards
("IFRS") adopted by the European Union.
 Under Company law the Directors must not approve the Group financial
statements unless they are satisfied that they present fairly the
financial position, financial performance and cash flows of the Group
for that period. In preparing the Group financial statements, the
Directors are required to: 

— select suitable accounting policies in accordance with
IAS

 8:
Accounting Policies, Changes in Accounting Estimates and Errors and then
apply them consistently;

— present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information;

 -- provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the
Group's financial position and financial performance; 

— state that the Group has complied with
International Financial
Reporting Standards

 subject to any material departures disclosed and
explained in the financial statements; and

— make judgements and estimates that are reasonable and
prudent.

 The Directors are responsible for keeping proper accounting records
that are sufficient to show and explain the Group's transactions
and disclose with reasonable accuracy, at any time, the financial
position of the Group and enable them to ensure that the Group financial
statements comply with the Companies Act 2006 and Article 4 of the IAS
Regulations. The Directors are also responsible for ensuring that the
Directors' Report is prepared in accordance with the Company Law in
the United Kingdom and that the Annual Report includes information
required by the Listing Rules of the Financial Services Authority. They
are also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's
website. The work carried out by the Auditor does not include
consideration of the maintenance and integrity of the website and
accordingly the Auditor accepts no responsibility for any changes that
have occurred to the financial statements when they are presented on the
website. Visitors to the website need to be aware that legislation in
the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.

The Directors, to the best of their knowledge, state that:

 -- the financial statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit/(loss) of the Company and the
Group; and
-- the Chairman's Statement and Report of the Directors include a
fair review of the development and performance of the business and the
position of the Company and the Group together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
PETER DICKS
Chairman
26 July 2012
Non-Statutory Accounts
The financial information set out below does not constitute the
Company's statutory accounts for the period ended 31 March 2012 but
is derived from those accounts. Statutory accounts for 2012 will be
delivered to the Registrar of Companies in due course. The Auditor has
reported on those accounts; their report was (i) unqualified, (ii) did
not include a reference to any matters to which the Auditor drew
attention by way of emphasis without qualifying their report and (iii)
did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006. The text of the Auditor's report can be found
in the Company's full Annual Report and Accounts at:
www.peiplc.co.uk. 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2012

                           Year ended 31 March 2012    Year ended 31
March 2011
                          Revenue  Capital           Revenue   Capital
                           return   return   Total    return    return
Total
                     Notes  [pounds sterling]'000    [pounds
sterling]'000   [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000   [pounds
sterling]'000
Gains on              9         -    2,030   2,030         -     5,122
5,122 investments at fair value through profit and loss
Exchange gains/       9         -       47      47         -      (153)
(153) (losses) on other items
                                -    2,077   2,077         -     4,969
4,969
Operating income
Investment income              36        -      36        27         -
27
Other operating                20        -      20        10         -
10 income
Total operating       2        56        -      56        37         -
37 income
Operating expenses
Administrative        3    (1,049)      23  (1,026)    1,247)     (176)
(1,423) expenses
Operating (loss)/            (993)   2,100   1,107    (1,210)    4,793
3,583 profit
(Loss)/profit                (993)   2,100   1,107    (1,210)    4,793
3,583 before tax
Tax                   5         -        -       -         -         -
-
(Loss)/profit after          (993)   2,100   1,107    (1,210)    4,793
3,583 taxation
Other comprehensive income
- exchange                      -       (3)     (3)        -        14
14 differences on translation of foreign operations
Total comprehensive          (993)   2,097   1,104    (1,210)    4,807
3,597 income for the year
Attributable to:
Equity holders of            (993)   2,097   1,104    (1,210)    4,807
3,597 the parent
Earnings per share
                                                                               

Basic and
diluted
  
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.

2. To lessen the force, strength, purity, or brilliance of, especially by admixture.
 8 (3.68)p 7.78p 4.10p (3.79)p 15.01p 11.22p

 The total column of this statement represents the Group's
Statement of Comprehensive Income, prepared in accordance with IFRS. The
supplementary revenue return and capital return columns are both
prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing
operations. The Parent Company has elected to take the exemption in
Section 408 of the Companies Act 2006, not to present the Parent
Company's Statement of Comprehensive Income. 

The notes form part of these accounts.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2012

                                      Capital              Currency
                   Share  Special redemption  Capital  translation
Retained
                 Capital  reserve    reserve  reserve      reserve
earnings    Total
                   [pounds sterling]'000    [pounds
sterling]'000      [pounds sterling]'000    [pounds
sterling]'000        [pounds sterling]'000      [pounds
sterling]'000    [pounds sterling]'000
Year ended 31 March 2012
As at 1 April          3   63,849          2    2,865           18
(2,835)  63,902 2011
Total                  -        -          -    2,100           (3)
(993)   1,104 comprehensive income for the year
As at 31 March         3   63,849          2    4,965           15
(3,828)  65,006 2012
Year ended 31 March 2011
As at 1 April          3   79,072          2   (1,928)           4
(1,625)  75,528 2010
Total                  -        -          -    4,793           14
(1,210)   3,597 comprehensive income for the year
Share buybacks/        -  (15,223)         -        -            -
-  (15,223) tender offer
As at 31 March         3   63,849          2    2,865           18
(2,835)  63,902 2011

The notes form part of these accounts.

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2012

                                      Capital
                   Share  Special redemption  Capital   Retained
                 Capital  reserve    reserve  Reserve   earnings
Total
                   [pounds sterling]'000    [pounds
sterling]'000      [pounds sterling]'000   [pounds
sterling]'000       [pounds sterling]'000    [pounds
sterling]'000
Year ended 31 March 2012
As at 1 April          3   63,849          2   2,862      (2,527)
64,189 2011
Total                  -        -          -   2,098        (755)
1,343 comprehensive income for the year
As at 31 March         3   63,849          2   4,960      (3,282)
65,532 2012
Year ended 31 March 2011
As at 1 April          3   79,072          2  (1,928)     (1,457)
75,692 2010
Total                  -        -          -   4,790      (1,070)
3,720 comprehensive income for the year
Share buybacks/        -  (15,223)         -       -           -
(15,223) tender offer
As at 31 March         3   63,849          2   2,862      (2,527)
64,189 2011

The notes form part of these accounts.

 CONSOLIDATED BALANCE SHEET
as at 31 March 2012
                                                     31 March       31
March
                                                         2012
2011
                                          Notes         [pounds
sterling]'000          [pounds sterling]'000
Non-current assets
Investments at fair value through profit    9          62,278
57,977 or loss
Property, plant and equipment                               2
4
Current assets
Trade and other receivables                11             205
73
Cash and cash equivalents                  15           2,650
6,140
                                                        2,855
6,213
Total assets                                           65,135
64,194
Current liabilities
Trade and other payables                   12             129
292
Net assets                                             65,006
63,902
Capital and reserves
Share capital                              13               3
3
Special reserve                            14          63,849
63,849
Capital redemption reserve                 14               2
2
Capital reserve                            14           4,965
2,865
Currency translation reserve               14              15
18
Retained earnings                          14          (3,828)
(2,835)
Shareholders funds                                     65,006
63,902
Total equity                                           65,006
63,902
                                                                             

Net asset value per Ordinary share 16 240.72p 236.63p

The Group’s financial statements were approved by the Board of
Directors and were authorised for issue on 26
July
 see month.
 2012 and were signed
on its behalf by:

Peter Dicks

Chairman

Company Registered Number: 3912487

The notes form part of these accounts.

 COMPANY BALANCE SHEET
as at 31 March 2012
                                                     31 March       31
March
                                                         2012
2011
                                          Notes         [pounds
sterling]'000          [pounds sterling]'000
Non-current assets
Investments at fair value through profit    9          62,278
57,977 or loss
Investment in subsidiary                   10             595
518
Current assets
Trade and other receivables                11             199
62
Amount due from subsidiary                 11             323
158
Cash and cash equivalents                  15           2,208
5,710
                                                        2,730
5,930
Total assets                                           65,603
64,425
Current liabilities
Trade and other payables                   12              71
236
Net assets                                             65,532
64,189
Capital and reserves
Share capital                              13               3
3
Special reserve                            14          63,849
63,849
Capital redemption reserve                 14               2
2
Capital reserve                            14           4,960
2,862
Retained earnings                          14          (3,282)
(2,527)
Shareholders' funds                                    65,532
64,189
Total equity                                           65,532
64,189
                                                                             

Net asset value per ordinary share 16 242.67p 237.70p

The Company’s financial statements were approved by the Board
of Directors and were authorised for issue on 26 July 2012 and were
signed on its behalf by:

Peter Dicks

Chairman

The notes form part of these accounts.

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2012

                                                   Year ended      Year
ended
                                               31 March 2012   31 March
2011
                                       Notes           [pounds
sterling]'000           [pounds sterling]'000
Cash flows from operating activities
Consolidated net return before tax                     1,107           

3,583

Adjustments to reconcile net return before tax to net cash flows
from
 operating activities:
Gains on investments                                  (2,030)
(5,122)
Exchange losses                                            1
240
Costs related to share buybacks                          135

18

 (Decrease)/increase in trade and                        (163)
100 other payables
Increase in trade and other                              (39)
(4) receivables
Purchases of investments                             (17,471)
(5,141)
Sales of investments                                   9,898
15,829
Cash distributions                                     5,209
7,491
Net cash flows (used in)/generated                    (3,353)
16,994 from operating activities
Investing activities
Purchase of property, plant and                            -
(2) equipment
Net cash used in investing activities                      -
(2)
Financing
Ordinary Shares purchased                                  -
(15,223)
Costs related to share buybacks                         (135)

(18)

 Net cash used in financing activities                   (135)        

(15,241)

 Net (decrease)/increase in cash and                   (3,488)
1,751 cash equivalents
Cash and cash equivalents at                           6,140
4,612 beginning of year
Effect of foreign exchange rates on                       (2)
(223) cash and cash equivalents
Cash and cash equivalents at end of     15             2,650
6,140 year

The notes form part of these accounts.

COMPANY CASH FLOW STATEMENT

for the year ended 31 March 2012

                                                   Year ended      Year
ended
                                               31 March 2012   31 March
2011
                                       Notes           [pounds
sterling]'000           [pounds sterling]'000
Cash flows from operating activities
Company net return before tax                          1,343
3,720
Adjustments to reconcile net return before tax to net cash flows from
operating activities:
Gains on investments                                  (2,030)
(5,122)
Exchange losses                                            1
240
Costs related to share buybacks                          135

18

 (Decrease)/increase in trade and                        (165)
76 other payables
Increase in trade and other                             (209)
(126) receivables
Purchase of investments                              (17,471)
(5,141)
Sales of investments                                   9,898
15,829
Cash distributions                                     5,209
7,491
Net cash flows (used in)/generated                    (3,289)
16,985 from operating activities
Investing activities
Investment in subsidiary                                 (76)
(32)
Net cash used in investing activities                    (76)
(32)
Financing
Ordinary Shares purchased                                  -
(15,223)
Costs related to share buybacks                         (135)

(18)

 Net cash used in financing activities                   (135)        

(15,241)

 Net (decrease)/increase in cash and                   (3,500)
1,712 cash equivalents
Cash and cash equivalents at                           5,710
4,211 beginning of year
Effect of foreign exchange rates on                       (2)
(213) cash and cash equivalents
Cash and cash equivalents at end of     15             2,208
5,710 year

The notes below form part of these accounts.

NOTES TO THE FINANCIAL STATEMENTS

 

 at 31 March 2012
 1 ACCOUNTING POLICIES
Accounting convention
Private Equity Investor PLC is a company incorporated in Great Britain
and registered in England and Wales under the Companies Act 2006. The
consolidated Annual Report for the Group for the year ended 31 March
2012 comprises the results of the Company and its Subsidiary, Campton
Group, Inc, a Californian corporation (together referred to as the
"Group"). For further details see Basis of Consolidation
below. The Company is registered as a public limited company and is an
investment company as defined by section 833 of the Companies Act 2006.
Campton Group, Inc. is a private equity fund-of-funds advisory business
based in California. 

Basis of Accounting

 The consolidated annual financial statements of the Group have been
prepared under International Financial Reporting Standards
("IFRS"), which comprise standards and interpretations
approved by the International Accounting Standards Board
("IASB"). The annual financial statements of the Company have
been prepared in accordance with IFRS as adopted by the European Union,
and as applied in accordance with provisions of the Companies Act 2006.
The financial statements have also been prepared in accordance with the
Statement of Recommended Practice ("SORP") (issued January
2009) for investment trust companies and venture capital trusts except
to any extent where it conflicts with IFRS. 

The accounting policies that follow set out those policies which
apply in preparing the financial statements for the year ended 31 March
2012. There are no differences between the accounting policies applied
to the Group and the Company.

 The Group and Company financial statements are presented in Sterling
and all values are rounded to the nearest thousand pounds ([pounds
sterling]'000) except when indicated otherwise.
Basis of Consolidation 

The
consolidated financial statements

 incorporate the financial
statements of the Company and its principal subsidiary Campton Group,
Inc, a California corporation (“Campton”).

 Campton Group, Inc. was consolidated from the date on which the Company
obtained control, and will continue to be consolidated until the date
that such control ceases. Control comprises the power to govern the
financial and operating policies of the investee so as to obtain benefit
from its activities and is achieved through direct or indirect ownership
of voting rights. The Company currently has an investment of [pounds
sterling]595,000 in Campton by way of secured promissory note agreement
and a secured convertible promissory note agreement. If the Company were
to exercise its conversion rights then it would hold a majority stake in
Campton. As the convertible loan notes are convertible at any time, PEI
has the power to exercise control over Campton. Therefore in preparing
the financial statements, the Company has treated Campton as a
subsidiary and therefore produced consolidated financial statements. 

All profit and losses of Campton are
attributable

 to the Company
until such time as Campton had met its obligations to the Company and
therefore no non-controlling interests have been recognised.

 The financial statements of Campton are prepared for the same reporting
year as the Parent Company, using consistent accounting policies. All
intercompany balances and transactions, including unrealised profits
arising from them, are eliminated.
Segmental reporting
The Directors are of the opinion that the Group is engaged in a single
segment of business, being investment business; accordingly a segmental
reporting note is not presented. The results of Campton are immaterial
for segmental reporting purposes.
Income recognition
Dividends receivable on quoted equity shares and debt securities are
included in the accounts when the investments concerned are quoted
'ex-dividend'. Dividends receivable on equity shares where no
ex-dividend date is quoted are brought into account when the
Group's right to receive payment is established. The fixed return
on a debt security is recognised on a time apportionment basis so as to
reflect the effective yield on the debt security. Interest receivable is
included on an accruals basis. 

Expenses

All expenses are accounted for on an accruals basis and are
charged through the revenue column of the Statement of Comprehensive
Income, except for expenses which are incidental to the sale or purchase
of an investment or related to tender offers, which are charged through
the capital column of the Statement of Comprehensive Income. 

Investments at fair value through profit or loss

Investments where a purchase or sale is under a contract whose terms
require delivery within the timeframe established by the market
concerned are recognised and derecognised on the trade date.

All investments held by the Company are designated upon initial
recognition as held at fair value through profit or loss. Investments
are measured at fair value, with unrealised gains and losses on
investments and impairment of investments recognised in the Statement of
Comprehensive Income and allocated to capital. Realised gains and losses
on investments sold are calculated as the difference between sales
proceeds and cost.
 The Venture Capital Funds ("the Funds") are stated at
Directors' valuation which is normally based on valuations provided
by the managers of those funds which are received by the Company at
least quarterly. The valuation methodology used by these Funds is that
the underlying investments are valued at fair value in accordance with
Financial Accounting Standard 157 (FAS 157) which is broadly comparable
to International Private Equity and Venture Capital (IPEVC) guidelines.
Promissory notes with Campton are valued at amortised cost.
For investments actively traded in organised financial markets, fair
value is generally determined by reference to Stock Exchange quoted
market bid prices at the close of business on the balance sheet date,
without any deduction for transaction costs necessary to realise the
asset.
Capital distributions received from investments are accounted for on a
reducing cost basis. Cash and stock distributions received are first
applied to reducing the base cost of an investment. A realised gain will
be recognised only when the cost has been reduced to nil. 

Judgements and Estimates

 The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the amounts reported
in the financial statements. However, the nature of estimation means
that actual outcomes could differ from those estimates.
The net asset values (NAV) of the Funds are used as their estimated fair
value. These NAVs are determined by their general partners. In arriving
at these NAVs the General Partners consider a number of factors such as
the cost, other comparable transactions, earning multiples, discounts,
market conditions, operating results and other qualitative and
quantative factors. A number of these factors also include forecast
information and therefore are subject to judgements made by various
parties. Because of the inherent uncertainty of valuations as well as
the discounts applied, the estimated fair values of investments in
privately held companies may differ significantly from the values that
would have been used had a ready market for the securities existed. The
valuations of publicly traded securities held by these Funds are also
affected by discounts, estimated for any legal or contractual
restrictions on sale.
Foreign currency translation
The functional and presentational currency of the Company is pounds
sterling. Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are re-translated
at the rates prevailing on the balance sheet date. Gains and losses
arising on re-translation are included in the Statement of Comprehensive
Income and are allocated either to revenue or capital, as appropriate.
The assets and liabilities of foreign operations are translated into
sterling at the rate of exchange ruling at the balance sheet date.
Income and expenses derived from foreign operations have been translated
at the rates of exchange prevailing on the date of transaction. The
resulting exchange differences are recognised in Other Comprehensive
Income and shown in the Currency Translation Reserve. On disposal of a
foreign investment, the deferred cumulative amount recognised in equity
relating to that particular foreign operation is recognised in the
Statement of Comprehensive Income. 

Investments in Subsidiary

The investment in Campton is stated at cost in the Company’s
balance sheet. No provision for
impairment

 has been made.

Taxation

 Deferred tax is recognised in respect of all temporary differences at
the balance sheet date where transactions or events have occurred that
result in an obligation to pay more, or the right to pay less tax in the
future. This is subject to deferred tax assets being recognised only if
it is considered more likely than not that there will be suitable
profits from which the future reversal of the temporary differences can
be deducted.
Current tax is expected tax payable on the taxable income for the
period, using tax rules at the balance sheet date and any adjustment to
tax payable in respect of previous years. The tax effect of different
items of income/gain and expenditure/loss is allocated between revenue
and capital on the same basis as the particular item to which it
relates, using the marginal method. 

Dividends payable

 to shareholders

Dividends to shareholders are recognised as a liability in the
period in which they have been
declared
  
v. de·clared, de·clar·ing, de·clares

v.tr.
1. To make known formally or officially. See Synonyms at announce.

2. To state emphatically or authoritatively; affirm.

3.
 and paid.

Any final dividend proposed by the Board is not declared until
approved by the shareholders at the Annual General Meeting following the
year end.

Cash and cash equivalents

 Cash and cash equivalents are held for the purpose of meeting
short-term cash commitments rather than for investment purposes. Assets
are classified as cash equivalents if they are readily convertible to
cash and are not subject to significant changes in value. The Company
has classified short-term bank deposits as cash equivalents. 

Leases

Leases where the
lessor
 n. the owner of real property who rents it to a lessee pursuant to a written lease.
 retains substantially all the risks and
benefits of ownership of the assets are classified as operating
leases.

Operating lease

 payments are recognised as an expense in the
Statement of Comprehensive Income on a
straight-line

adj.
1. Lying in a straight line.

2. Relating to a device whose linkage produces or copies motion in straight lines.

3.
 basis over the
lease term.

New standards and interpretations not applied

 The IASB have issued the following relevant standards and
interpretations which are not effective for the year ended 31 March 2012
and have not been applied in preparing these financial statements.
International Accounting Standards (IAS/IFRSs)                Effective
date
IFRS 9            Financial Instruments: Classification &     1
January 2013
                  Measurement
IFRS 10           Consolidated Financial Statements           1 January
2013
IFRS 11           Joint Arrangements                          1 January
2013
IFRS 12           Disclosure of Interests in Other            1 January
2013
                  Entities
IFRS 13           Fair Value Measurement                      1 January
2013
IAS 1             Amendments to revise the way other             1 July
2012
                  comprehensive income is presented
IAS 27            Reissued as IAS 27 Consolidated and         1 January
2013
                  Separate Financial Statements (as
                  amended in 2011) 

The Directors do not anticipate that the initial adoption of the
above standards will have a material impact on the Group’s
financial statements in the period of initial application.

 2 OPERATING INCOME
                                                     2012        2011
                                                   Group       Group
                                                   [pounds
sterling]'000       [pounds sterling]'000
Income from investments:
Interest from open-ended investment funds             36          27
                                                      36          27
Other income:
Deposit interest                                       8          10
Interest received on VAT refund                       12           -
Total operating income                                56          37
Total income comprises:
Interest                                              56          37
3 OPERATING EXPENSES
                                                    2012        2011
                                                   Group       Group
                                                   [pounds
sterling]'000       [pounds sterling]'000
Secretarial services                                 105         100
Auditor's remuneration for:
- audit                                               28          25
- other services                                      12           -
Directors' remuneration                               80
120
Other expenses:
- operating lease of land and buildings               27          31
- public relations and advertising                     9          11
- fundraising expenses                               141         127
- legal and professional fees                         50         113
- office expenditure                                  65          57
- rent and rates                                      27          31
- staff costs (see note 4)                           438         416
- banking and custody charges                          5           5
- other expenses                                      62         211
                                                   1,049       1,247

In the year ending 31 March 2012 total fees and expenses of [pounds
sterling]683,000 (2011: [pounds sterling]707,000) have been paid to
Campton.

During the year [pounds sterling]23,000 of expenses were credited to
capital in respect of an over
accrual

n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest.
 of legal and professional fees

relating to
 relate prep

 relate prep → ,  
 the Tender Offer in 2011 (2011: [pounds sterling]176,000
charged).

 4 STAFF COSTS
                                                    2012        2011
                                                   Group       Group
                                                   [pounds
sterling]'000       [pounds sterling]'000
Salaries and other payments                          420         398
Social security costs                                 18          18
                                                     438         416

With the exception of the Directors, whose
remuneration

 is shown in
the Directors’ remuneration report, the Group employed four members
of staff during the year (2011: four members of staff).

5. TAXATION ON ORDINARY ACTIVITIES

                               2012                          2011
                    Revenue   Capital             Revenue   Capital
                     Return    Return     Totsl    Return    Return
Total
                      [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000    [pounds
sterling]'000
UK corporation            -         -         -         -         -
- tax at 26% (2011: 28%)
The Group is subject to corporation tax at 26% (2011: 28%). As at 31
March 2012 the total taxation charge in the Group's revenue account
is lower than the standard rate of corporation tax in the UK (26%). The
differences are explained below:
                              2012                         2011
                   Revenue   Capital             Revenue  Capital
                    Return    Return     Total    Return   Return
Total
                     [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000     [pounds
sterling]'000    [pounds sterling]'000    [pounds
sterling]'000
                                                                           

Net return before (993) 2,100 1,107 (1,210) 4,793 3,583 finance
costs and

taxation                                                                   

Theoretical tax (258) 546 288 (339) 1,342 1,003 at UK
corporation

tax rate of 26%
 (2011: 28%)
Effects of:
- expenses               1         6         7        33      (49)
(16)
disallowed for taxation purpose
- losses in             62         -        62        39        -
39 Campton not carried forward
as excess management expenses
- gains on               -      (552)     (552)        -   (1,293)
(1,293)
investments and exchange losses on capital items
- excess               195         -       195       306        -
306 management expenses
                         -         -         -         -        -
-
At 31 March 2012, the Group had no unprovided deferred tax liabilities
(2011: [pounds sterling]nil). At that date, based on current estimates
and including the accumulation of net allowable management expenses
deriving from its partnership interests in its Venture Capital Funds,
the Group had surplus management expenses of approximately [pounds
sterling]16,831,000 (2011: [pounds sterling]14,980,000) which have not
been recognised as a deferred tax asset. This is because the Group is
not expected to generate sufficient taxable income in future periods in
excess of the available deductible expenses and accordingly, the Group
is unlikely to be able to reduce future tax liabilities through the use
of existing surplus expenses.
Due to the Group's status as an investment trust, and the intention
to continue meeting the conditions required to obtain approval in the
foreseeable future, the Group has not provided deferred tax on any
capital gains and losses arising on the revaluation or disposal of
investments. 

6 DIVIDENDS

No distribution is proposed for the year ended 31 March 2012.

The requirements of Section 1158 of the Corporation Tax Act 2010
("S1158") are considered on the basis of dividends declared in
respect of the financial year as shown below.
                                                          2012
2011
                                                        [pounds
sterling]'000          [pounds sterling]'000
Net return after taxation per Company                    (993)
(1,210) accounts
Final dividend proposed of nil (2011: nil) - per share
Revenue retained for S1158 purpose                       (993)
(1,210)
7 PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the Statement of
Comprehensive Income of the Company is not presented as part of these
financial statements. The consolidated net return after taxation for the
financial year includes [pounds sterling]1,343,000 (2011: [pounds
sterling]3,720,000) which is dealt with in the financial statements of
the Company. 

8 RETURN PER ORDINARY SHARE

                               2012                           2011
                  Revenue    Capital              Revenue    Capital
                   return     return     Total     return     return
Total
                    pence      pence     pence      pence      pence
pence
Return per          (3.68)      7.78p     4.10p     (3.79)     15.01
11.22 Ordinary Share

Revenue return per Ordinary Share is based on the net loss on
ordinary activities after taxation of [pounds sterling]993,000 (2011:
net loss of [pounds sterling]1,210,000), and on 27,004,742 (2011:
31,930,924) Ordinary shares, being the weighted average number of
Ordinary Shares in issue during the year.

Capital return per Ordinary Share is based on the net capital gain
for the year of [pounds sterling]2,100,000 (2011: net gain of [pounds
sterling]4,793,000), and on 27,004,742 (2011: 31,930,924) Ordinary
Shares, being the weighted average number of Ordinary Shares in issue
during the year.

Total return per Ordinary Share is based on net return for the year
of [pounds sterling]1,107,000 (2011: net return of [pounds
sterling]3,583,000), and on 27,004,742 (2011: 31,930,924) Ordinary
Shares, being the weighted average number of Ordinary Shares in issue
during the year.

 9 INVESTMENTS
                                                         2012
2011
                                                        [pounds
sterling]'000          [pounds sterling]'000
Group and Company
a) Investment portfolio summary
USA
Listed investments
- common stock                                             42
126
Unlisted Venture Capital funds                         46,664
51,298
Other investments
- open-ended investment funds                          15,572
6,553
                                                       62,278
57,977

A full listing of the investment portfolio is provided above.

                                            Listed    Unlisted
                                       Open-ended     Venture
                              Listed   investment     Capital
                            equities        funds       funds      Total
                               [pounds sterling]'000        [pounds
sterling]'000       [pounds sterling]'000      [pounds
sterling]'000
b) Analysis of investment portfolio movements
Opening book cost                216        5,726      53,569     59,511
Opening unrealised               (90)         827      (2,271)
(1,534) (depreciation)/ appreciation
Opening valuation                126        6,553      51,298     57,977
Movement in the year:
Purchases at cost                   -      15,600           -     15,600
Calls at cost                       -            -      1,871      1,871
Sales
- proceeds                    (3,432)      (6,559)          -
(9,991)
- realised gains on sales      1,837          200           -      2,037
Book cost adjustments from capital distributions
- cash distributions               -            -      (3,146)
(3,146)
- stock distributions          1,470            -      (1,470)         -
Unrealised appreciation/          41         (222)     (1,889)
(2,070) (depreciation)
Closing valuation                 42       15,572      46,664     62,278
Closing book cost                 91       14,967      50,824     65,882
Closing unrealised               (49)         605      (4,160)
(3,604) (depreciation)/ appreciation
                                  42       15,572      46,664     62,278
The Company adopted the amendment to IFRS 7, effective 1 January 2009,
in the year to 31 March 2010. This requires the Company to classify fair
value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair
value hierarchy has the following levels: 

— Quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1).

 -- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2). 

— Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level 3).

 The level in the fair value hierarchy, within which the fair value
measurement is categorised, is determined on the basis of the lowest
level input that is significant to the fair value of the investment.
The Company considers observable data for investments actively traded in
organised financial markets, with fair value determined by reference to
Stock Exchange quoted market bid prices at the close of business on the
balance sheet date, without adjustment for transaction costs necessary
to realise the asset. 

The following table analyses within the fair value
hierarchy
 see ministry and orders, holy.


A structure that has a predetermined ordering from high to low. For example, all files and folders on the hard disk are organized in a hierarchy (see Win Folder organization).
 the
Fund’s
financial assets

 and liabilities (by class) measured at fair
value at 31 March 2012.

Financial instruments at fair value through profit and loss

                                         Level 1   Level 2   Level 3
Total
                                          [pounds sterling]'000
[pounds sterling]'000     [pounds sterling]'000     [pounds
sterling]'000
Open-ended investment funds              15,572         -         -
15,572
Unlisted Venture Capital funds                -         -    46,664
46,664
Listed investments                           42         -         -
42
                                         15,614         -    46,664
62,278
Financial instruments that trade in markets that are not considered to
be active but are valued based on quoted market prices, dealer
quotations or alternative pricing sources supported by observable inputs
are classified within level 2. As level 2 investments include positions
that are not traded in active markets and/or are subject to transfer
restrictions, valuations may be adjusted to reflect illiquidity and/or
non-transferability, which are based on available market information.
Investments classified within level 3 have significant unobservable
inputs. Level 3 instruments include private equity and corporate debt
securities. As observable prices are not available for these securities,
the Company has used valuation techniques to derive the fair value. In
respect of unquoted instruments, or where the market for a financial
instrument is not active, Venture Capital Funds based in the United
States value portfolios in accordance with Financial Accounting
Standards Board's FAS 157 which defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair
value measurements. FAS 157 is broadly comparable to IPEVC guidelines.

The following table presents the movement in level 3 instruments for
the period ended 31 March 2012 by class of financial instrument.

 Group                                                               Unlisted
                                                                      Venture
                                                               Capital
funds
                                                                       [pounds sterling]'000
Opening balance                                                       51,298
Calls                                                                  1,871
Distributions                                                         (3,146)
Transfers from level 3 to level 1                                     

(1,470)

 Total gains for the year included in the statement of
(1,889) comprehensive income
Closing balance                                                       46,664 

Following
flotation

 of an investee company, shares in this company
may be directly distributed to PEI. The Book cost associated to these
shares is transferred out of level 3 investments and transferred to
level 1. It is the Company’s normal policy to sell these shares as
soon as possible.

                                                         2012
2011
                                                       [pounds
sterling]'000           [pounds sterling]'000
c) Analysis of capital gains and losses
Gains/(losses) on sales                                2,037
3,716
(Decrease)/Increase in investment holding             (2,070)
1,406 gains
Gains on unlisted venture capital funds                2,053 -
realisations
Gains on books cost write offs                            10 -
Gains on investments                                   2,030
5,122
Realised exchange gains on sales                          48

87

 Exchange losses on investment holding gains               (1)

(240)

 Exchange losses on capital items                          47

(153)

d) Significant holdings

The Company owns 15.0% and 10.1% of the total value of the called
capital of the Venture Capital Funds in Dawntreader Fund II and Zone
Ventures Fund II respectively.

e) Transaction costs

During the year the Company incurred no transaction costs (2011:
[pounds sterling]nil) in relation to purchases of investments and
[pounds sterling]6,000 (2011: [pounds sterling]4,000) in relation to
sales of investments. These amounts are included within gains and losses
on investments at fair value within the statement of comprehensive
income.

10 INVESTMENT IN SUBSIDIARY

The Company has an investment of [pounds sterling]595,000 (2011:
[pounds sterling]518,000) in Campton under the Secured Credit Facility
and Secured
Promissory Note
 unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt.
 Agreements (see Note 20).

Private Equity International Limited was incorporated with share
capital of [pounds sterling]1 issued and fully paid. It was incorporated
to register the business name of Private Equity International, however,
it has applied to be struck off the Register of Companies at Companies
House and was dissolved on 04 October 2011. It had not traded during the
period. 

11 TRADE AND OTHER
RECEIVABLES

 

                                    2012                   2011
                               Group    Company      Group     Company
                               [pounds sterling]'000      [pounds
sterling]'000      [pounds sterling]'000       [pounds
sterling]'000
Amounts due from                   -        323*         -         158*
subsidiary
Sales for future                 129        129         36          36
settlement
Prepayments and other             70         64         37          26
debtors
Accrued income                     6          6          -           -
                                 205        522         73         220
* During the year the Company paid [pounds sterling]144,000 (2011:
[pounds sterling]114,000) under the Fundraising Expenses Advance
Agreement (see Note 20) to Campton and accrued interest of [pounds
sterling]12,000 (2011: [pounds sterling]3,000). As at 31 March 2012
interest arising under the Secured Convertible Promissory Note of
[pounds sterling]50,000 (2011: [pounds sterling]41,000) has been
accrued.
12 TRADE AND OTHER PAYABLES
                                   2012                   2011
                               Group     Company     Group     Company
                               [pounds sterling]'000       [pounds
sterling]'000     [pounds sterling]'000       [pounds
sterling]'000
Other payables                   129          71       134          78
Tender offer costs                 -           -       158         158
                                 129          71       292         236
13 SHARE CAPITAL
                                                      2012       2011
                                                     [pounds
sterling]'000      [pounds sterling]'000
Allotted, called up and fully paid:
27,004,742 (2011: 27,004,742) Ordinary shares of         3          3
0.01p each
14 RESERVES
                                                 Capital
                                                 reserve
                            Capital   Capital investment    Currency
                 Special redemption   reserve    holding translation
Retained
                 reserve    reserve  realised     losses     reserve
earnings
                   [pounds sterling]'000      [pounds
sterling]'000     [pounds sterling]'000      [pounds
sterling]'000       [pounds sterling]'000     [pounds
sterling]'000
Group
At 1 April        63,849          2     4,886     (2,021)         18
(2,835) 2011
Net gains on           -          -     4,100          -           -
- sale of investments
Holding losses         -          -         -     (2,070)          -
- on investments
Exchange gains         -          -        48         (1)          -
- /(losses)
Exchange               -          -         -          -          (3)
- differences on retranslation of net assets of subsidiary
Shares                 -          -        23          -           -
- purchased for cancellation - over accrual of 2011 costs
Net return for         -          -         -          -           -
(993) the year
At 31 March       63,849          2     9,057     (4,092)         15
(3,828) 2012
                                                     Capital
                                                     reserve
                               Capital   Capital  investment
                   Special  redemption   reserve     holding  Retained
                   reserve     reserve  realised      losses  earnings
                     [pounds sterling]'000       [pounds
sterling]'000     [pounds sterling]'000       [pounds
sterling]'000     [pounds sterling]'000
Company
At 1 April 2011     63,849           2     4,886      (2,024)   (2,527)
Net gains on sale        -           -     4,100           -         -
of investments
Holding losses on        -           -         -      (2,070)        -
investments
Exchange gains/          -           -        48          (3)        -
(losses)
Shares purchased         -           -        23           -         -
for cancellation - over accrual of 2011 costs
Net return for           -           -         -           -      (755)
the year
At 31 March 2012    63,849           2     9,057      (4,097)   (3,282)
15 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN CASH AND CASH
EQUIVALENTS
                                    2012                  2011
                               Group     Company      Group    Company
                               [pounds sterling]'000       [pounds
sterling]'000      [pounds sterling]'000      [pounds
sterling]'000
(Decrease)/increase in cash   (3,488)     (3,500)     1,751      1,712
in the year
Effect of foreign exchange        (2)         (2)      (223)      (213)
rate movements
Movement in cash and cash     (3,490)     (3,502)     1,528      1,499
equivalents
Cash and cash equivalents      6,140       5,710      4,612      4,211
at beginning of the year
Cash and cash equivalents      2,650       2,208      6,140      5,710
at end of the year

Cash and cash equivalents are comprised as follows:

                                    2012                   2011
                               Group     Company      Group     Company
                               [pounds sterling]'000       [pounds
sterling]'000      [pounds sterling]'000       [pounds
sterling]'000
Cash in hand at bank           2,650       2,208      6,140       5,710

16 NET ASSET VALUE PER ORDINARY SHARE

The Group net asset value per Ordinary Share is based on net assets
of [pounds sterling]65,006,000 (2011: [pounds sterling]63,902,000) and
on 27,004,742 (2011: 27,004,742) Ordinary Shares, being the number of
shares in issue at the year end.

The Company net asset value per Ordinary Share is based on net
assets of [pounds sterling]65,532,000 (2011: [pounds
sterling]64,189,000) and on 27,004,742 (2010: 27,004,742) Ordinary
Shares, being the number of shares in issue at the year end.

17 COMMITMENTS AND
CONTINGENT

 LIABILITIES

At 31 March 2012 there were financial commitments outstanding of
[pounds sterling]4.8 million (2011: [pounds sterling]6.7 million) in
respect of outstanding call commitments to funds.

Campton has entered into Employee Retention Agreements guaranteed by
the Company. The
contingent liability

 under these agreements is $402,000
([pounds sterling]252,000) (2011: $370,000 ([pounds
sterling]231,000)).

18 ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES

 As detailed above, the investment objective of the Company is to seek
to achieve substantial long-term capital appreciation for shareholders.
This is principally achieved by investing in unquoted, specialist US
venture capital funds.
The Company and Group's financial instruments comprise securities
and other investments and bank deposits which are held to achieve its
investment objective as well as debtors and creditors that arise from
its operations, for example sales and purchases of securities awaiting
settlement and debtors for accrued income. 

The principal risks the Company and Group face through the holding
of financial instruments are:

 -- liquidity/marketability risk, i.e. the risk that the Company or
Group has difficulty in realising assets or otherwise raising funds to
meet commitments associated with financial instruments; 

— interest rate risk;

— credit risk:

— market price risk, i.e. movements in the value of investment
holdings caused by factors other than interest rate or currency
movement; and

— foreign currency risk.

The Directors do not consider that the Company or Group has
significant exposure to credit risk. The Board monitors the financial
risks affecting the Company and Group on a regular basis. The Directors
receive financial information on a regular basis which is used to
identify and monitor risk.

As required by IFRS 7: Financial Instruments: Disclosure and
Presentation, an analysis of financial assets and liabilities, which
identifies the risk to the Company of holding such items, is given
below. 

Financial assets

 Full analysis of the Company's investment portfolio is given
above. The method of valuing the fixed asset investments is discussed in
the accounting policies of the Company in Note 1. Cash and debtors
arising from the operations of the Company as at 31 March 2012 amounted
to [pounds sterling]2,208,000 (2011: [pounds sterling]5,710,000) and
[pounds sterling]522,000 (2011: [pounds sterling]220,000) respectively.
Cash and debtors arising from operations of the Group as at 31 March
2012 amounted to [pounds sterling]2,650,000 (2011: [pounds
sterling]6,140,000) and [pounds sterling]205,000 (2011: [pounds
sterling]73,000) respectively. There were no material differences
between the fair values of the investments and cash and debtors as at 31
March 2012 and 31 March 2011 and the values attributable to those
investments within the accounts.
Maturity analysis 

The Company does not have any assets or liabilities maturing in more
than one year.

 Liquidity risk 

The nature of the Company’s investment policy of investing in
specialist US venture capital funds means that a large proportion of the
securities which it owns are less readily marketable than, for example,
‘blue-chip’ UK equities.

 The Company currently has outstanding commitments of $7,704,000
([pounds sterling]4,821,000) (2011: $10,704,000 ([pounds
sterling]6,677,000)) to the funds, which will be financed through cash
and easily liquidated assets.
The Board manages liquidity risk by regularly reviewing its easily
liquidated assets, which mainly comprise open-ended investment funds.
Commitments to such fund investments are reviewed and approved by the
Board. In order to reduce risk, research and due diligence work is
performed before any commitment is made to such a fund manager. 

Interest rate risk

 The Company's revenue will be affected by changes in prevailing
interest rates since a large portion of its income ordinarily derives
from money market funds and bank interest.
The Company's objective is to achieve capital returns from its
investments and, as such, the main exposure to interest rate risk is
indirect, through its impact on the valuation of the private equity
funds, although it is not possible to quantify such effects. Interest
rates are one of the key determinants of economic growth. At a more
specific level, interest rates and credit spreads also have an important
role in the ability of private equity funds to secure profitable deals,
as some transactions are partly financed by debt. The effect of interest
rate changes on the valuation of investments and debt forms part of
valuation risk, which is considered separately.
At 31 March 2012, the Company held investments in AAA-rated money market
funds valued at [pounds sterling]15,572,000 (2011: [pounds
sterling]6.553,000), earning cash dividends at market rates. The money
market funds are redeemable on less than 24 hours notice. Other floating
rate financial assets comprised cash at bank. 

As at 31 March 2012, the average interest rate profile of the
Company’s financial assets was as follows:

                                         Non
Non
                  Fixed  Floating  interest       Fixed  Floating
interest
                   rate      rate   bearing        rate      rate
bearing
                  Group     Group     Group     Company   Company
Company
                  [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000       [pounds
sterling]'000     [pounds sterling]'000     [pounds
sterling]'000
Open-ended            -    15,572         -           -    15,572
- investment funds
Quoted                -         -        42           -         -
42 equities
Unlisted              -         -    46,664           -         -
46,664 funds
Cash                  -     2,650*        -           -     2,208*
-
Other current         -         -       184**       323         -
178** assets
                      -    18,222    46,890         323    17,780
46,884

As at 31 March 2011, the average interest rate profile of the
Company’s financial assets was as follows:

                                         Non
Non
                 Fixed   Floating  interest       Fixed   Floating
interest
                  rate       rate   bearing        rate       rate
bearing
                 Group      Group     Group     Company    Company
Company
                 [pounds sterling]'000      [pounds
sterling]'000     [pounds sterling]'000       [pounds
sterling]'000      [pounds sterling]'000     [pounds
sterling]'000
Open-ended           -      6,553         -           -      6,553
- investment funds
Quoted               -          -       126           -          -
126 equities
Unlisted             -          -    51,298           -          -
51,298 funds
Cash                 -      6,140*        -           -      5,710*
-
Other net            -          -        36**       114          -
80** current assets
                     -     12,693    51,460         114     12,263
51,504

* Exposure to floating interest rate risk is based on an adjusted

LIBOR

See London interbank offered rate (LIBOR).
 rate.

**
Other current assets

 exclude
prepayments

 which under
IFRS

IFRS Inter Frame Relay Service
IFRS Indiana Facilities Registry System
7 are not
classified as financial assets.

The Board manages interest rate risk by placing cash deposits
(open-ended investment funds and cash at bank) with
counterparties

 with
a minimum credit rating of AA or equivalent.

If interest rates had reduced by 1% from those available at 31
March 2012, it would have had the effect, with all other variables held
constant, of reducing the net revenue return before taxation and
shareholders' funds by [pounds sterling]182,000 (2011: [pounds
sterling]127,000). If there had been an increase in interest rates of 1%
there would have been an equal and opposite effect in the net revenue
before taxation and equity. The calculations are based on cash at bank
and open-ended investment funds as at 31 March 2012 and these may not be
representative of the year as a whole.
 Credit risk 

The Company is exposed to credit risk in the following areas:

— Loans to Campton Group, Inc.

 The Company has entered into three separate loan agreements with
Campton. In the event that Campton ceased to operate the Company's
investment would be at risk. The Board continues to support
Campton's efforts to develop its private equity fund-of-funds
advisory business. 

— Failure by counterparties to return cash deposits

Cash deposits (money market funds and cash at bank) are placed with
counterparties with a minimum credit rating of AA or equivalent. In
addition a range of counterparties is used to further
diversify

To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries.
 the
risk.

— Failure by counterparties to deliver cash or securities through
trading activities.

Transactions in listed securities are settled against delivery using
approved brokers. The risk of default is considered minimal.

The maximum exposure to credit risk at 31 March 2012 is [pounds
sterling]19,204,000 (2011:

[pounds sterling]12,931,000).

Market price risk

 Private equity investments are not immediately sensitive to market
movements. However, over the medium/long term, the valuation multiples
applied to private equity will be affected by significant changes in the
listed equity markets.
The Company's portfolio consists of US dollar investments, which
are affected by movements in the sterling/dollar exchange rate (refer to
foreign currency risk below). 

At 31 March 2012, a 10% movement in the valuation of the
Group’s aggregate investments designated as fair value through
profit or loss, would result in a 9.6% ([pounds sterling]6,228,000)
change in shareholders’ funds.

The review of investments above provides information in respect of
the investments. The method of valuing the investments is discussed in
the accounting policies note.

Foreign currency risk

The Company is exposed to currency risk directly since the majority
of its assets and liabilities are denominated in US dollars and their
sterling value can be significantly affected by movements in foreign
exchange rates. The Company does not, nor does it intend to, hedge
against foreign currency movements affecting the value of its
investments.

 The Company settles its transactions from its bank accounts at an
agreed rate of exchange on the date on which any bargain was made. For
the year ended 31 March 2012, realised exchange gains of [pounds
sterling]319,000 (2011: losses of [pounds sterling]619,000) and
unrealised losses relating to currency of [pounds sterling]1,000 (2011:
losses of [pounds sterling]213,000), have been taken to the capital
reserve. 

Details of the foreign currency exposure are detailed in the table
below.

 At 31 March 2012                   Other
Other
           Investment             current Investment             current
           portfolio      Cash    assets  portfolio      Cash    assets
               Group     Group     Group    Company   Company   Company
               [pounds sterling]'000     [pounds sterling]'000
[pounds sterling]'000      [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000
USA           53,278     2,374       136     53,278     1,932       453
UK             9,000       276        48      9,000       276        48
              62,278     2,650       184     62,278     2,208       501
At 31 March 2011                   Other                          Other
          Investment             current Investment             current
           portfolio      Cash    assets  portfolio      Cash    assets
               Group     Group     Group    Company   Company   Company
               [pounds sterling]'000     [pounds sterling]'000
[pounds sterling]'000      [pounds sterling]'000     [pounds
sterling]'000     [pounds sterling]'000
USA           57,662     4,193        36     57,662     3,763       193
UK               315     1,947         -        315     1,947         -
              57,977     6,140        36     57,977     5,710       193

If the sterling/dollar exchange rate had reduced by 10% from the
rate at 31 March 2012, it would have the effect, with all other
variables held constant, of increasing the equity shareholders’
funds by [pounds sterling]6,198,000 (2011: [pounds
sterling]6,877,000).

If there had been an increase in the sterling/dollar exchange rate
of 10% it would have had the effect of decreasing the equity
shareholders’ funds by [pounds sterling]5,071,000 (2011: [pounds
sterling]5,626,000).

 The calculations are based on the investments held at fair value
through profit or loss and the exchange rate of 1.59775 US$: [pounds
sterling] as at 31 March 2012 and these may not be representative of the
year as a whole. 

Financial liabilities

 The Company finances its operations primarily through equity and
retained revenue although trade creditors and accruals arise from its
operations. At 31 March 2012 and 31 March 2011, all financial
liabilities were due within one year. Other financial liabilities
amounted to [pounds sterling]71,000 (2011: [pounds sterling]78,000)
resulting from operating activities, and [pounds sterling]nil (2011:
[pounds sterling]158,000) from financing. 

There were no borrowing facilities either drawn or
undrawn
  
tr.v. un·drew , un·drawn , un·draw·ing, un·draws
To draw to one side, as a curtain.

Adj. 1. undrawn – not represented in a drawing
undelineated – not represented accurately or precisely
 at any
time during the year.

 Managing Capital
The Group's equity is analysed into its various components in notes
13 and 14. The Company manages its investments so as to maximise the
return to shareholders while maintaining a capital base to allow the
Company to operate effectively. Strong realisations from the investment
portfolio in recent years have facilitated the return of capital to
shareholders. This has been achieved through the buyback of shares and
Tender Offers. 

The Group’s capital requirement is reviewed regularly by the
Board of the Company.

 19 RELATED PARTY TRANSACTIONS 

During the year the Company rented office space from Peter Dicks,
Chairman of the Company, for a consideration of [pounds sterling]11,250
(2011: [pounds sterling]11,250).

 In the year ending 31 March 2012 total fees and expenses of [pounds
sterling]683,000 (2011: [pounds sterling]707,000) were paid to Campton
by the Company. In addition, [pounds sterling]76,000 (2011: [pounds
sterling]32,000) (values as at transaction date) has been drawn down
during the year under Secured Credit Facility Agreement. As at the year
end [pounds sterling]323,000 (2011: [pounds sterling]158,000) were due
to the Company from Campton (for further disclosures see also Notes 3,
10, 11, 20).
20 BUSINESS COMBINATION
Private Equity Investor PLC and Campton have entered into the following
agreements: Two Secured Convertible Promissory Note Agreements dated 3
November 2006 and 11 December 2006; a Secured Credit Facility Agreement
dated 13 February 2007; and a Fundraising Expenses Advance Agreement
dated 1 October 2007. At 31 March 2012 the Company has a total
investment of [pounds sterling]594,586 in Campton. If the Company were
to exercise its conversion rights then it would hold a majority stake in
Campton. 

ANNUAL GENERAL MEETING

The Company’s Annual General Meeting will be held at the
offices of the Association of Investment Companies, 24 Chiswell Street,

London
 city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826.
 EC1Y 4YY at

3:00pm on 25
September
 see month.
 2012.

The notice of this meeting can be found in the Annual Report and
Accounts at www.peiplc.com.

 National Storage Mechanism
A copy of the Annual Report and Financial Statements will be submitted
shortly to the National Storage Mechanism ("NSM") and will be
available for inspection at the NSM, which is situated at:
www.hemscott.com/nsm.do. 

26 July 2012

END

Neither the contents of the Company’s website nor the contents
of any website accessible from hyperlinks on this announcement (or any
other website) is incorporated into, or forms part of, this
announcement.