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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| New Century Aim Vct 2 Plc | LSE:NCA2 | London | Ordinary Share | GB00B1SN3863 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 33.50 | 26.00 | 41.00 | 33.50 | 33.50 | 33.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -1.46M | -1.6M | -0.3147 | -1.06 | 1.7M |
TIDMNCA2
Details of Directors
New Century AIM 31st December VCT2 plc 2017 Audited Report and Accounts for the year to 31st December 2017 Financial Summary 1 Chairman's Statement 2 Details of Directors 3 Management and Administration 4 Directors 5 Strategic Report 6 Investment Portfolio 7 Top Ten Investments 11 Directors' Report 12 Directors' Remuneration Report 14 Corporate Governance 16 Independent Auditors' Report 19 Statement of Comprehensive Income 23 Balance Sheet 24 Statement of Changes in Equity 25 Cash Flow Statement 26 Notes to the Financial Statements 27-36 Shareholder Information 37
Financial Summary
Hot Features
Premium
Year ended Year ended
31 December 31 December
2017 2016
Revenue return per share (pence) for the year (0.50) (0.02)
Total return per share (pence) for the year 10.38 (0.58)
Proposed dividends per share (pence) 3.30 3.00
Net asset value per share (pence) 68.29 60.90
Cumulative value of shareholder 78.55 68.16
investment (net asset
value plus cumulative dividends
per share) (pence)
Shareholders' funds (GBP'000) 3,146 2,805
Details of Directors
Chairman's Statement
I am pleased to report another positive increase in the value of your fund. The net asset value per share rose from 60.90p to 68.29p per share, a gain of 12.14%, and the net asset value plus cumulative dividends rose from 68.16p to 78.55p per share being a rise of 15.24%. This is compared to an increase in the FTSE All Share AIM index of 24.3%.
This index encompasses all sectors and includes many mining, oil and gas companies that have performed well in the year. Your fund is constrained from investing in these types of businesses as part of the VCT rules.
We realise the importance of income for our shareholders, and have therefore agreed subject to shareholder approval, to increase the dividend by 10% to 3.3p per share, at the current offer price of 62p the yield is 5.3%.
The level of qualifying investments at 85.72% is still comfortably above the 70% required level. The current year has seen increased volatility across most indices and has led to the FTSE All Share AIM index declining by 3.36% from the start of the year to 29th March 2018. Your funds net asset value is published on a monthly basis and as at 29th March 2018 it was 69.52p.
The portfolio is well diversified and comprises a number of established companies that we feel are well placed to prosper despite the current political uncertainties and we are therefore cautiously optimistic for the future.
Geoffrey Gamble 27 April 2018
Michael Barnard (Aged 67)
Michael has been employed in stockbroking since 1971. In 1974 he became a Member of the Stock Exchange. During his career his duties have spanned investment advising, investment research, dealing and company management. In 1988 he started his own stockbroking company, MD Barnard & Company Limited. Based in Laindon, Essex, it has offices in London, Wells, Exeter and Colchester. Since 1995, he has been either managing or advising unit trust, private client and pension company portfolios. Michael has now sold MD Barnard & Company Limited, however is still a director of New Century AIM VCT 2 plc.
Geoffrey Gamble (Aged 59)
Geoffrey started his career with National Westminster Bank plc. He joined Publishing Holdings plc in 1984 and became a director in 1986. He took part in an MBO in 1988, backed by Schroder Ventures (now Permira) to form Charterhouse Communications Group Ltd and was instrumental in the satisfactory venture capital exit from that company and its flotation on AIM in 1996. He became managing director of Charterhouse Communications plc in 1999.
Peter William Riley (Aged 73)
Peter qualified as a solicitor in 1969 and in that year became partner of Mitchells, Solicitors. In 1977, he became a partner in his present solicitor practice, Daybells, where he specialises in property law with an emphasis on large commercial properties.
Ian Cameron-Mowat (Aged 67)
Ian has a BSc 1st degree in electronics and was involved in the early development of computers at Burroughs Machines. He is currently a consultant radiologist to a NHS Trust.
Management and Administration
Registered Office 4thFloor,
50 Mark Lane
London EC3R 7QR
Company Secretary Tricor Secretaries Limited
4th Floor,
50 Mark Lane
London EC3R 7QR
Registrar Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands B63 3DA
Solicitors Dundas & Wilson
5th Floor, Northwest Wing
Bush House
Aldwych
London WC2B 4EZ
Investment Manager and Broker MD Barnard & Company Ltd
17-21 New Century Road
Laindon, Essex SS15 6AG
Auditor UHY Hacker Young LLP
Quadrant House
4 Thomas More Square
London E1W 1YW
Directors
Geoffrey Gamble (Chairman)
Michael David Barnard
Peter William Riley
Ian Cameron-Mowat
All directors are non-executive.
Audit Committee:
Geoffrey Gamble (Chairman)
Peter William Riley
Ian Cameron-Mowat
Strategic Report
Activities and status
The principal activity of the company during the year was the making of long-term equity and loan investments in UK Listed, AIM traded and unquoted companies in the United Kingdom. The company has been listed on the London Stock Exchange since 4 April 2007 and has been granted approval by Her Majesty's Customs & Revenue as a Venture Capital Trust. The Chairman's Statement on page 2 and the Investment Manager's Review below give a review of developments during the year and of future prospects.
The directors have managed the affairs of the company with the intention that it will qualify for approval by Her Majesty's Customs & Revenue as a Venture Capital Trust for the purposes of Section 842AA of the Income and Corporation Taxes Act 1988 ('the Act'). The directors consider that the company was not at any time up to the date of this report a close company within the meaning of Section 414 of the Act.
Investment Manager's Review
2017 was a strong year for the AIM index which saw it rise by 24.3% Although your fund did not match this, it did still increase the net asset value by 12.14%. The AIM index benefitted from some strong gains in the oil, mining and gas sector, but due to VCT rules, these types of companies are not deemed qualifying investments.
We made nine qualifying investments, purchasing shares in Anglo African Oil and Gas, Audioboom, Escape Hunt, Fusion Antibodies, Infrastrata, Modern Water, Pelatro, TEK Capital and Velocity Composites.
We top sliced or exited 9 shares.
We remain cautiously optimistic for another good showing in the current year although we will no doubt have more volatility in the months ahead. Political events continue to create headlines whether this be the US and China trade embargo's or the on-going negotiations on the UK's BREXIT terms. These may cause uncertainty in the Markets and could possibly result in companies seeing short term decisions on contracts and capital spend being delayed. We do however have a well-diversified portfolio of shares from many different types of industry, that we feel can still grow.
Investment Objective
New Century AIM VCT 2 PLC is a Venture Capital Trust ("VCT") established under the legislation introduced in the Finance Act 1995. The company's principal objectives as set out in its prospectus are to achieve long term capital growth through investment in a diversified portfolio of Qualifying Companies primarily quoted on AIM.
Principal risks and uncertainties
The company invests its funds primarily in unlisted companies and companies traded on AIM, which entail a higher degree of risk than investments in large listed companies. The main risk, therefore, arising from the company's activities is market price risk, representing the uncertain realisable values of the company's investments. Please refer to note 22 to these accounts which gives a detailed review of the company's risk management.
Environmental matters
Discussion in respect of environmental matters is not considered relevant or material to an understanding of the performance of the company. The company does not consider that Greenhouse Gas Emissions disclosure is relevant to the company on the grounds of immateriality due to it not having its own premises or employees.
Key performance indicators
The financial key performance indicators are set out in the financial summary on page 1.
Michael Barnard 27 April 2018
Investment Portfolio
Security Cost Valuation % %
31/12/2017 Cost Valuation
Qualifying Investments 2,495,915 2,786,781 85.72 88.07
Non-qualifying Investments 378,924 340,456 13.01 10.76
Uninvested funds 36,958 36,958 1.27 1.17
2,911,797 3,164,195 100.00 100.00
Qualifying Investments
AIM Quoted
Marechale Capital plc 75,752 18,750 2.61 0.59
HML Holdings plc 108,540 112,000 3.73 3.54
TP Group plc 160,062 43,007 5.50 1.36
Tristel plc 20,843 123,725 0.72 3.91
Cyanconnode Holdngs plc 204,219 17,241 7.02 0.55
M.Winkworth plc 56,280 70,000 1.94 2.22
Inspired Energy plc 47,258 280,249 1.62 8.87
Microsaic Systems plc 92,002 25,700 3.16 0.82
Venn Life Sciences Holdings plc 155,184 67,780 5.33 2.14
DP Poland plc 25,631 69,700 0.88 2.20
Modern Water plc 75,385 24,545 2.59 0.78
Quixant plc 8,091 69,125 0.28 2.18
Blur Group plc 6,785 259 0.23 0.01
Keywords Studios plc 18,979 245,600 0.65 7.76
Sanderson Group plc 15,203 22,550 0.52 0.71
Cloudbuy plc 41,896 2,363 1.44 0.07
PHSC plc 50,256 24,000 1.73 0.76
EU Supply plc 19,422 8,550 0.67 0.27
Plastics Capital plc 33,168 38,280 1.14 1.21
Sysgroup plc 45,232 25,500 1.55 0.81
Brighton Pier Group plc 35,379 22,440 1.22 0.71
Property Franchise Group plc 50,253 67,000 1.73 2.12
Solid State plc 35,248 63,036 1.21 1.99
Audioboom Group plc 72,868 96,250 2.50 3.04
Scholium Group plc 40,203 20,000 1.38 0.63
Rosslyn Data Technologies plc 23,219 3,500 0.80 0.11
Coral Products plc 25,104 22,200 0.86 0.70
SRT Marine Systems plc 18,093 35,000 0.62 1.11
ULS Technology plc 18,091 66,150 0.62 2.09
Premier Technical Services 52,420 185,555 1.80 5.86
Group plc
Angle plc 75,128 62,100 2.58 1.96
Bilby plc 52,465 96,300 1.80 3.04
Hunters Property plc 50,253 43,000 1.73 1.36
Satellite Solutions Worldwide 55,027 91,250 1.89 2.88
Group plc
Tekcapital plc 82,292 72,500 2.83 2.29
Falanx Group Ltd 23,923 8,500 0.82 0.27
Premaitha Health plc 40,204 10,000 1.38 0.32
Security Cost Valuation % %
31/12/2017 Cost Valuation
Qualifying Investments
AIM Quoted
Photonstar LED Group plc 15,079 4,500 0.52 0.14
Yu Group plc 20,504 88,208 0.70 2.79
Scancell Holdings plc 20,506 15,000 0.70 0.47
Medaphor Group plc 25,129 8,333 0.86 0.26
Imaginatik plc 20,104 8,000 0.69 0.25
Loopup Group plc 20,104 70,000 0.69 2.21
Faron Pharmaceuticals Ltd 20,103 62,400 0.69 1.97
Cloudcall Group plc 20,230 50,050 0.69 1.58
Creo Medical Group plc 37,691 33,553 1.29 1.06
Anglo African Oil & Gas plc 65,329 39,000 2.24 1.23
Escape Hunt plc 31,006 29,934 1.06 0.95
Velocity Composites plc 9,425 11,360 0.32 0.36
Proxama plc 27,410 24,543 0.94 0.78
Fusion Antibodies plc 22,113 55,804 0.76 1.76
Pelatro plc 25,128 26,000 0.86 0.82
2,390,219 2,780,392 82.09 87.87
Unlisted Investments
Litebulb Group Ltd 51,008 - 1.75 0.00
Outsourcery plc 28,143 - 0.97 0.00
Syqic plc 26,546 6,390 0.91 0.20
105,697 6,390 3.63 0.20
Total qualifying investments 2,495,915 2,786,781 85.72 88.07
10,398 20,500 0.36 0.65
Non-qualifying Investments
AIM Quoted
Sanderson Group plc
Rotala plc 27,683 36,400 0.95 1.15
Tristel plc 60 245 0.00 0.01
TLA Worldwide plc 26,975 15,000 0.93 0.48
Audioboom Group plc 1,163 275 0.04 0.01
Be Heard Group plc 10,040 7,420 0.34 0.23
EVR Holdings plc 27,995 124,800 0.96 3.95
Yolo Leisure & Technology plc 12,799 3,750 0.44 0.12
117,113 208,390 4.02 6.60
Investment Portfolio
Security Cost Valuation % %
31/12/2017 Cost Valuation
UK listed
Investec plc 169,416 94,963 5.82 3.00
British American Tobacco plc 8,841 20,072 0.30 0.63
Twentyfour Income Fund Ltd 9,852 9,950 0.34 0.31
188,109 124,985 6.46 3,94
Unlisted Investments
China Food Co plc 31547 1100 1.08 0.03
Litebulb Group Ltd 21,897 - 0.75 0.00
Sorbic International plc 10,205 1,450 0.35 0.05
Mar City plc 10,053 4,531 0.35 0.14
73,702 7,081 2,53 0.22
Total non-qualifying investments 378,924 340,456 13.01 10.76
Top Ten Investments
Security Cost Valuation % Inspired Energy plc 47,258 280,249 8.87 Keywords Studios plc 18,979 245,600 7.76 Premier Technical Services Group plc 52,420 185,555 5.86 EVR Holdings plc 27,995 124,800 3.95 Tristel plc 20,843 123,725 3.91 HML Holdings plc 108,540 112,000 3.54 Bilby plc 52,465 96,300 3.04 Audioboom Group plc 72,868 96,250 3.04 Investec plc 169,416 94,963 3.00 Satellite Solutions Worldwide Group plc 55,027 91,250 2.88
The investments tabulated above are expressed as a percentage by valuation of the company's investment portfolio including uninvested cash.
Directors' ReportThe directors present their report and the audited accounts for the year to 31 December 2017.
Results and dividend
Year to Year to
31 December 2017 31 December 2016
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
Return on ordinary activities (23) 502 (1) (26)
after taxation
Appropriated as follows:
Final dividend paid in
respect of prior year
Revenue - 0.00p (0.00p) per share - - - -
Capital - 3.00p (1.50p) per share - (138) - (81)
Transfers to reserves (23) 364 (1) (107)
Directors
The directors of the company who served throughout the year and their interests in the issued ordinary shares of 10p of the company are as follows:
Year ended Year ended
31 December 2017 31 December 2016
Michael David Barnard 396,611 362,795
Geoffrey Gamble 106,550 95,723
Peter William Riley 3,000 3,000
Ian Cameron-Mowat 67,065 32,172
All of the directors' share interests shown above are held beneficially. There have been no changes in the directors' share interests between 31 December 2017 and the date of this report.
Brief biographical notes on the directors are given on page 3. The director, retiring in accordance with the Company's Articles of Association, Ian Cameron-Mowat, who being eligible will offer himself for re-election at the forthcoming annual general meeting. The directors believe his experience in small companies is a great benefit to the Board and recommend his re-election.
None of the directors has a contract of service with the company and, except as mentioned below under the heading "Management", there were no contracts that subsisted during the year in which a director was materially interested and which was significant in relation to the company's business.
Management
MD Barnard & Company Ltd has acted as investment manager to the company since inception. The principal terms of the Investment Management Agreement are set out in Note 6 to the Accounts.
Substantial shareholdings
The company has been notified, in accordance with Chapter 5 of FCA's Disclosure and Transparency Rules, of the under noted interests as at 31 December 2017 of 3 per cent shareholders and above:
MD Barnard 396,611
N Shanks 405,057
Rathbone Nominees Ltd 217,476
IA Houston 200,000
DM Trotman 180,000
Smith & Williamson Nominees Ltd 176,311
Platform Securities Nominees 172,065
JR Atkinson 152,365
RS Like 145,800
Acquisition of own shares
During the year the company did not make any acquisition of its own shares.
Structure of the company's capital
The company has only one class of ordinary share and each share has attached to it full voting rights, dividends and capital distribution rights (including on a winding up) and do not confer any rights of redemption.
Appointment of Directors
The Directors are subject to re-election with one third of the Directors being re-elected annually at the AGM.
Creditor payment policy
The company's payment policy is to agree terms of payment before business is transacted and to settle accounts in accordance with those terms. The company's principal expenses such as investment management fees and administration fees are paid quarterly in arrears in accordance with the respective agreements. Accordingly the company had no material trade creditors at the year-end.
Post balance sheet events
Details of the post balance sheet events are set out in note 27.
Auditors
In accordance with Section 485 of the Companies Act 2006, a resolution proposing that UHY Hacker Young LLP be reappointed as auditors of the Company and that the Directors be authorised to determine their remuneration will be put to the next Annual General Meeting.
Statement of disclosure to auditors
So far as the directors are aware:
1. there is no relevant audit information of which the Company's auditors are unaware; and
2. the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
By Order of the Board
Michael Barnard 27 April 2018
Directors' Remuneration Report
The Board has prepared this report in accordance with the requirements of the Companies Act 2006. A resolution to approve this report will be put to the members at the Annual General Meeting to be held on Friday 22 June 2018.
Directors' remuneration policy
The company does not have any executive directors and, as permitted under the Listing Rules, has not, therefore, established a remuneration committee. Directors, with the exception of the chairman, do not receive any remuneration or fees.
The directors shall be paid by the company all travel, hotel and other expenses they may incur in attending meetings of the directors or general meetings or otherwise in connection with the discharge of their duties. Any director who, by request of the directors, performs special services may be paid such extra remuneration as the directors may determine.
Directors' remuneration (audited)
None of the Directors received any remuneration from the company during the year under review, with the exception of the chairman, who received a fee of GBP5,000 (2016: GBP1,250). No other emoluments or pension contributions were paid by the company to, or on behalf of, any director. None of the directors has a service contract with the company. It is expected that, with the exception of the chairman, the directors will continue not to receive any remuneration for their services in the forthcoming years.
Performance
The directors consider that the most appropriate measure of the company's performance is its Cumulative Value of Shareholder Investment (net asset value plus cumulative dividends). The company's Cumulative Value of Shareholder Investment at 31 December 2016 and 31 December 2017 is set out in the Financial Summary on page 1.
Total shareholder return
[Graph omitted ]
The above graph shows the company's total shareholder return compared to that of the FTSE AIM All Share Index total return for the period since listing on the London Stock Exchange.
By Order of the Board
Michael Barnard 27 April 2018
Corporate Governance
The directors support the relevant principles of the UK Corporate Governance Code issued in April 2016 by the Financial Reporting Council, being the principles of good governance and the code of best practice as set out in the Main Principles of the Code annexed to the Listing Rules of the Financial Conduct Authority.
The UK Corporate Governance Code is available at the following location:
www.frc.org.uk/corporate/ukcgcode.cfm
Going Concern
Bearing in mind that the assets of the company consist mainly of marketable securities, the directors are of the opinion that at the time of approving the accounts, the company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
The Board
The company is led and controlled by a Board of directors who are all non-executives and who have had relevant experience with quoted companies prior to their appointment. The Chairman is Geoffrey Gamble. Biographical details of all Board members are shown on page 3.
One third of the Directors are subject to re-election at each AGM by rotation.
During the year the following were held:
2 full board meeting 2 Audit Committee meeting All members attended the meetings, All members attended the meetings with the exception with the exception of Messrs Riley and Cameron-Mowat of Mr.Cameron-Mowat on one occasion on one occasion.
All directors had relevant experience with quoted companies prior to their appointment and it was therefore not thought necessary to provide further training in respect of their obligations and duties.
The Board has also established procedures whereby directors wishing to do so in the furtherance of their duties may take independent professional advice at the company's expense.
All directors have access to the advice and services of the Company Secretary. The Company Secretary provides the Board with full information on the company's assets and liabilities and other relevant information requested by the Chairman, in advance of each Board meeting.
The Board believes that it presents a balanced and understandable assessment of the company's position and prospects. The Audit Committee meets at least once a year. Under the chairmanship of a non-executive director, its membership comprises all the non-executive directors. During the year the Audit Committee was chaired by Mr Gamble. The Audit Committee reviews the accounts and is reported to by the external auditors. The audit committee did not identify or consider any significant issues relating to the financial statements as substantially all the investments are valued by reference to publicly quoted prices. Further, the Audit Committee keeps under review the cost effectiveness, independence and objectivity of the auditors. There has also been a formal tender for the external auditors in 2017. A formal statement of independence is received from the external auditors each year.The terms of reference of the audit committee are available for inspection at the company's registered office.
The investment manager is authorised and regulated by the Financial Conduct Authority and the directors have an opportunity to review their own auditors' review of their financial controls.
Relations with shareholders
The Chairman is the company's principal spokesman with investors, fund managers, the press and other interested parties.
Shareholders will have the opportunity to meet the Board at the AGM. The Board is also happy to respond to any written queries made by shareholders during the course of the year, or to meet with major shareholders if so requested.
In addition to the formal business of the AGM, representatives of the management team and the Board are available to answer any shareholder queries.
Separate resolutions are proposed at the AGM on each substantially separate issue. The Registrars collate proxy votes and the results (together with the proxy forms) are forwarded to the Company Secretary immediately prior to the AGM. In order to comply with the Governance Code, proxy votes will be announced at the AGM, following each vote on a show of hands, except in the event of a poll being called. The notice of the next AGM and proxy form can be found at the end of these accounts.
Financial Reporting
The directors' statement of responsibilities for preparing the financial statements is set out on page 18, and a statement by the auditors about their reporting responsibilities is set out in the Auditors' Report on page 21.
Internal control
The directors are responsible for the company's system of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the company's systems are designed to provide the directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately.
The directors have conducted a review of the effectiveness of the system of internal control for the year covered by the financial statements. This accords with the FRC's guidance on Risk Management, Internal Control and Related Financial and Business Reporting.
Although the Board is ultimately responsible for safeguarding the assets of the company, the Board has delegated, through written agreements, the day-to-day operation of the company to M D Barnard & Co. Limited.
Compliance statement
The Listing Rules require the Board to report on compliance with the Governance Code provisions throughout the accounting year. The Comply or Explain directions of the Governance Code does however acknowledge that some provisions may have less relevance for investment companies. With the exception of the limited items outlined below, the Company has complied throughout the accounting year to 31 December 2017 with the provisions set out in Sections A to E of the Governance Code.
1. The Board has not appointed a nominations committee as they consider the Board to be small and it comprises wholly non-executive directors. Appointments of new directors are dealt with by the full Board.
2. New directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise.
3. Due to the size of the Board and the nature of the company's business, a formal performance evaluation of the Board, its committees, the individual directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise.
4. The company has three independent directors, as defined by the Governance Code issued in April 2016. The board consider that Messrs. Gamble, Riley and Cameron-Mowat are independent in character and judgement and there are no relationships or circumstances which are likely to affect, or could appear to affect the directors' judgement. The Board considers that all directors have sufficient experience to be able to exercise proper judgement within the meaning of the Governance Code.
5. The company does not have a chief executive officer or senior independent director. The Board does not consider this to be necessary for the size of the company.
6. The company does not conduct a formal review as to whether there is a need for an internal audit function. The directors do not consider that an internal audit would be an appropriate control for a venture capital trust.
7. The Audit Committee is chaired by Geoffrey Gamble, Chairman of the Board of directors, whom the board regard as independent despite recommendations to the contrary in the Governance Code due to his being Chairman of the Board of directors.
8. The non-executive directors do not have service contracts, whereas the recommendation is for fixed term renewable contracts.
9. The company has no major shareholders so shareholders are not given the opportunity to meet any new non-executive directors at a specific meeting other than the annual general meeting.
Statement of directors' responsibilities
United Kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the revenue of the company for that period. In preparing those financial statements, the directors are required to:
-select suitable accounting policies and apply them consistently;
-make judgements and estimates that are reasonable and prudent;
-state whether applicable accounting standards have been followed; and
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for ensuring that proper accounting records are kept, which disclose with reasonable accuracy at any time the financial position of the company, enabling them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for the company's system of internal control, for safeguarding the assets of the company and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Responsibility statement
The directors confirm that to the best of their knowledge:
1. the financial statements, prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial position and profit or loss of the company;
2. the Directors' report includes a fair review of the development and performance and position of the company, together with a description of the principal risks and uncertainties that it faces;
3. the Directors consider that the annual report and financial statements are fair, balanced and understandable, providing appropriate information to shareholders to assess the performance, business model and strategy of the company.
By Order of the Board
Geoffrey Gamble 27 April 2018
Independent Auditors' Report to the members ofNew Century AIM VCT 2 plc
Opinion
We have audited the financial statements of New Century AIM VCT 2 plc for the year ended 31 December 2017 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-- give a true and fair view of the state of the company's affairs as at
31 December 2017 and of the company's return for the year then ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK) require us to report to you whether we have anything material to add or draw attention to:
-- the disclosures in the annual report that describe the principal risks
and explain how they are being managed or mitigated;
-- the directors' confirmation in the annual report that they have
carried out a robust assessment of the principal risks facing the
company, including those that would threaten its business model,
future performance, solvency or liquidity;
-- the directors' statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis
of accounting in preparing the financial statements and the directors'
identification of any material uncertainties to the company's ability
to continue to do so over a period of at least twelve months from the
date of approval of the financial statements;
-- whether the directors' statement relating to going concern required
under the Listing Rules in accordance with Listing Rule 9.8.6R(3) is
materially inconsistent with our knowledge obtained in the audit;
-- the directors' explanation in the annual report as to how they have
assessed the prospects of the company, over what period they have done
so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the
company will be able to continue in operation and meet its liabilities
as they fall due over the period of their assessment, including any
related disclosures drawing attention to any necessary qualifications
or assumptions.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Our assessment of risks of material misstatements
We identified the following risks that we believe have had the greatest impact on our audit strategy and scope:
-- The carrying value of the investments and the recognition of realised
and unrealised gains and losses. The investment portfolio and
associated realised and unrealised gains and losses is the key driver
to the financial performance of the company and has the greatest
impact on both the income statement and balance sheet.
-- Compliance with the VCT rules is necessary to maintain the VCT status
and associated tax benefits.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the financial statements. We define financial statement materiality as the magnitude by which misstatements, including omissions, could influence the economic decisions taken on the basis of the financial statements by reasonable users.
We also determine a level of performance materiality which we use to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
We determined materiality for the financial statements as a whole to be GBP47,500. In determining this we based our assessment on an average of three key indicators, being the return before tax, the net assets and gross assets of the company. On the basis of our risk assessment, together with our assessment of the company's control environment, our judgement is that performance materiality for the financial statements should be 75% of materiality, being GBP35,625.
An overview of the scope of our audit
The approach we took to the assessed risks described above was as follows:
-- We tested the value of the year-end investments by reference to market
price information at the year-end. The purchase and sale of
investments were agreed to contract notes and cash movements on a
sample basis. The realised gains and losses on the sale of investments
were re-calculated for both the individual transactions on a sample
basis and for the total portfolio.
The movement in unrealised gains was checked for arithmetical accuracy and validated by reviewing the opening costs to prior year balances and purchases on a sample basis.
The portfolio is maintained by the investment advisor in accordance with the investment management agreement. We agreed the investment portfolio to a signed confirmation provided by the investment advisor detailing each investment, the cost and market price.
-- Our work in respect of the compliance with the VCT rules involved
testing the eight conditions for maintaining approval as a VCT as set
out by HMRC. Each of the conditions was tested in turn in order to
assess whether it had been met as at the year-end.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the following conditions:
-- Fair, balanced and understandable - the statement by the
directors that they consider the annual report and financial
statements taken as a whole is fair, balanced and understandable and
provides the information necessary for shareholders to assess the
company's performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
-- Audit committee reporting - the section describing the work of
the audit committee does not appropriately address matters
communicated by us to the audit committee; or
-- Directors' statement of compliance with the UK Corporate Governance
Code -the parts of the directors' statement required under the
Listing Rules relating to the company's compliance with the UK
Corporate Governance Code containing provisions specified for review
by the auditor in accordance with Listing Rule 9.8.10R(2) do not
properly disclose a departure from a relevant provision of the UK
Corporate Governance Code.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
-- the part of the Directors' Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006;
-- the information given in the Strategic Report and the Directors'
Report for the financial year for which the accounts are prepared is
consistent with the financial statements.
-- the Strategic Report in the Directors' Report has been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
-- We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
-- certain disclosures of directors' remuneration specified by law are
not made; or
-- we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities on page 18, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi. This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by New Century Aim VCT2 Plc in 2008 and subsequently re-appointed following a tender process on 27 March 2018. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 11 years.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Daniel Hutson (Senior statutory auditor)
for and on behalf of
UHY Hacker Young
Chartered Accountants
Statutory Auditors
Quadrant House
4 Thomas More Square
London, E1W 1YW
27 April 2018
Statement of Comprehensive Income
(incorporating the revenue account)
for the year to 31 December 2017
Year ended Year ended
31 December 2017 31 December 2016
Notes Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses)
on
investments
- - 122 122 - 29 29
realised
- - 403 403 - (34) (34)
unrealised
Income 5 37 - 37 50 - 50
Investment 6 (8) (23) (31) (7) (21) (28)
management
fee
Other 7 (52) - (52) (44) - (44)
expenses
________ ________ ________ ________ ________ ________
Return/(loss) (23) 502 479 (1) (26) (27)
on
ordinary
activities
before
taxation
Tax - - - - - -
charge 9
on
ordinary
activities
________ ________ ________ ________ ________ ________
Return/(loss) (23) 502 479 (1) (26) (27)
on
ordinary
activities
after
taxation
======= ======= ======= ======= ======= =======
Return 11 (0.50) 10.88 10.38 (0.02) (0.56) (0.58)
per
ordinary
share
(pence)
======= ======= ======= ======= ======= =======
The notes on pages 27 to 36 form an integral part of these financial statements.
All revenue and capital items in the above statement are from continuing operations in the current year. No operations were acquired or discontinued in the current year. Other than that shown above, the company had no recognised gains or losses. Accordingly, the above represents the total comprehensive income for the year.
Balance Sheet
at 31 December 2017
As at As at
Note 31 December 2017 31 December 2016
GBP'000 GBP'000
Fixed assets
Investments 12 3,127 2,725
Current assets
Debtors 15 37 97
Current liabilities
Creditors: amounts falling 16 (18) (17)
due within one year
3,146 2,805
Capital and reserves
Called up share capital 17 461 461
Share premium 57 57
Capital Redemption Reserve 171 171
Capital reserve-distributable 3,440 3,440
Capital reserve - realised (1,537) (1,725)
Capital reserve - unrealised 187 (127)
Revenue reserve 367 528
Total equity shareholders' funds 3,146 2,805
Net asset value per ordinary share 18 68p 61p
The financial statements on pages 23 to 36 were approved by the Board of directors on 27 April 2018 and were signed on its behalf by:
Michael Barnard
Director
The notes on pages 27 to 36 form an integral part of these financial statements.
Company's registered number: 06054576
Statement of Changes in Equity
at 31 December 2017
Called-up Share Capital Capital Capital Capital Revenue Total
share premium redemption distributable realised unrealised reserve
capital account reserve
GBP GBP GBP GBP GBP GBP GBP
As 461 57 171 3,440 (1,725) (127) 528 2,805
at 1 January
2017
Realised - - - - 122 - - 122
gains
on
disposals
Unrealised - - - - - 403 - 403
gains
Transfer of - - - 89 (89) - -
unrealised
gain
to realised
on disposal
of
investment
Net revenue - - - - - - (23) (23)
before tax
Capital - - - - (23) - - (23)
element
of
investment
management
fee
Dividends - - - - - - (138) (138)
paid
_______ _______ _______ _______ ________ ________ ________ _______
At 461 57 171 3,440 (1,537) 187 367 3,146
31 December
2017
As 461 57 171 - (1,054) 2,668 610 2,913
at 1 January
2016
Realised - - - - 29 - - 29
gains
on
disposals
Unrealised - - - - - (34) - (34)
gains
Inter - - - 3,440 (587) (2,853) - -
reserve
transfer
Transfer of - - - - (92) 92 - -
unrealised
loss
to realised
on disposal
of
investment
Net revenue - - - - - - (1) (1)
before tax
Capital - - - - (21) - - (21)
element
of
investment
management
fee
Dividends - - - - - - (81) (81)
paid
_______ _______ _______ _______ ________ ________ ________ _______
At 461 57 171 3,440 (1,725) (127) 528 2,805
31 December
2016
The notes on pages 27 to 36 form an integral part of these financial statements.
Cash Flow Statement
for the year to 31 December 2017
As at As at
Note 31 December 2017 31 December 2016
GBP'000 GBP'000
Cash flow from operating
activities
Cash outflow from operations 21 (82) (72)
Net cash outflow from (82) (72)
operating activities
Cash flows from investing
activities
Investment income 37 50
Net cash from investing 37 50
activities
Cash flows from financing
activities
Sale of investments 426 413
Purchase of investments (303) (265)
Dividend paid (138) (81)
Net cash (used in)/from (15) 67
financing activities
Net (decrease)/increase in (60) 46
cash and cash equivalents
97 51
Cash and cash equivalents
at the beginning of year
Cash and cash equivalents 37 97
at the end of
year (held by Investment
Manager)
The notes on pages 27 to 36 form an integral part of these financial statements.
All cash is held on behalf of the VCT by MD Barnard as our Investment Manager, see note 21.
Notes to the Financial Statements
for the year to 31 December 2017
1.Company information
New Century AIM VCT 2 PLC is a UK incorporated company whose registered office is:
4th Floor
50 Mark Lane
London EC3R 7QR
New Century AIM VCT 2 PLC is a Venture Capital Trust established under the legislation introduced in the Finance Act 1995. The company's principal objective is to achieve long term capital growth through investment in a diversified portfolio of qualifying companies primarily quoted on AIM.
2.Basis of preparation
The financial statements have been prepared in accordance with applicable United Kingdom law and accounting standards and with the Financial Reporting Council's Financial Reporting Standard FRS 102 and with the Statement of Recommended Practice for Investment Companies re-issued by the Association of Investment Companies in November 2014 and updated in January 2017.
Going Concern basis - on the basis that the assets of the company consist mainly of marketable securities, the directors are of the opinion that at the time of approving the accounts, the company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
The financial statements are presented in Sterling.
3.Significant estimates and judgements
As the company's investment holdings, which comprise approximately 99% of its total assets, are stated at market value based on the closing prices of the London Stock Exchange, the directors do not believe that there is any inherent uncertainty in their presentation of these amounts, and that in their judgement, market value and fair value may be regarded as identical for the purpose of these accounts.
4.Accounting policies
Investments
Listed or AIM traded investments are stated at market value, which is based upon market bid prices at the balance sheet date. In the event that the shares held by the company are subject to certain restrictions, or the holding is significant in relation to the traded issued share capital of the investee company then the directors may apply a discount to the relevant market price.
Investments in unquoted companies are valued by the directors in accordance with British Venture Capital Association ("BVCA") guidelines.
4.Accounting policies (continued)
Investments (continued)
Realised surpluses or deficits on the disposal of investments and permanent impairments in the value of investments are taken to realised capital reserves. Unrealised surpluses and deficits on the revaluation of investments are taken to unrealised capital reserves. Costs incurred relating to acquisitions and disposals are charged to capital reserves as a deduction from proceeds or an addition to costs.
It is not the company's policy to exercise controlling or significant influence over investee companies, although it may hold a significant interest in some companies. Accordingly, the results of these companies are not incorporated into the revenue account except to the extent of any income earned or received.
Income
Dividend income receivable from quoted securities is recognised on the ex-dividend date. Income from unquoted equity and non-equity securities is recognised on an accruals basis.
Interest from cash and deposits and fixed returns on debt securities are recognised on an accruals basis.
Expenses
All expenses are accounted for on an accruals basis. One quarter of the investment management fee is charged to the revenue account and the remaining three quarters is charged to capital reserves, and inclusive of any irrecoverable value added tax. The allocation of the management fee reflects the directors' estimate of the source of the long-term returns in the portfolio from revenue and capital.
Taxation
Any tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
5.Income
Year ended Year ended
31 December 2017 31 December 2016GBP'000
GBP'000
Other income
Dividends receivable 37 50
6.Investment management fees
Year ended Year ended
31 December 2017 31 December 2016
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
Investment management fees 8 23 7 21
MD Barnard & Company Limited ("MDB") provides investment management services to the company in respect of the company's portfolio of venture capital investments under an investment management agreement dated 12 March 2007.
Under the terms of the investment management agreement, MDB is entitled to a fee (exclusive of VAT) equal to 1% per annum of the net assets of the company. The fee is calculated quarterly in arrears based on the net assets at 31 March, 30 June, 30 September and 31 December. During the year ended 31 December 2017, the fee payable to MD Barnard & Company equated to 1% per annum of net assets. No performance fee is payable.
The investment management agreement is for a minimum period of three years from 12 March 2007 terminable by either party at any time thereafter by one year's prior written notice.
7.Other expenses
Year ended Year ended
31 December 2017 31 December 2016GBP'000
GBP'000
Administrative and secretarial 23 18
services
Auditors' 11 10
remuneration
-for tax services 4 4
Regulatory fees 14 12
52 44
8.Directors' remuneration
The chairman received GBP5,000 remuneration in the year (2016: GBP1,250). No other remuneration has been paid or is payable for the year to 31 December 2017 or in respect of the prior year.
9.Tax charge on ordinary activities
Year ended Year ended
31 December 2017 31 December 2016
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom tax based on the
taxable profit for the year
- Current year - - - -
- Prior year - - - -
- - - -
Factors affecting tax
charge for the year
Return on ordinary activities (23) 501 (1) (26)
before taxation
Tax on above at the (4) (96) - (5)
standard company
rate of 19.25% (2016: 20%)
UK dividends not subject (7) - (10) -
to corporation tax
Non-deductible losses - 101 - 3
on investment
Non allowable expenses - - - -
Unutilised/(utilised) losses 11 (5) 10 2
Current tax charge for the year - - - -
The company has unrelieved losses amounting to approximately GBP728,000 (2016: GBP641,000) which are available to carry forward for tax purposes which it can set off against future profits. No deferred tax asset has been recognised in respect of these losses in view of the company's history of losses.
10.Dividends
Year ended Year ended
31 December 2017 31 December 2016GBP'000
GBP'000
Capital dividend paid 138 81
138 81
On 23 April 2018 the directors proposed a dividend in respect of the year ended 31 December 2017 of GBP152,029 representing 3.30p per ordinary share.
11.Loss per ordinary share
The revenue loss, per ordinary share, is based on the net loss on ordinary activities after taxation of GBP23,016 (2016: GBP1,077) and on 4,606,953 (2016: 4,606,953) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
The total return per ordinary share is based on a net profit after taxation of GBP478,357 (2016: loss of GBP27,027) and on 4,606,953 (2016: 4,606,953) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
12.Fixed asset investments
As at As at
31 December 2017 31 December 2016GBP'000
GBP'000
UK listed 125 115
AIM 2,989 2,606
Unlisted 13 4
3,127 2,725
Movements in investments, including realised and unrealised gains and losses, during the year are summarised as follows:
Year ended 31 December 2017
UK Listed AIM Un-listed Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 115 2,606 4 2,725
Purchases 10 303 - 303
Transfers - (12) 12 -
115 2,897 16 3,028
less: Sales - (426) - (426)
115 2,471 16 2,602
Realised period gains and losses - 125 (3) 122
Unrealised holding losses 10 393 - 403
125 2,989 13 3,127
Cost at 31 December 2017 188 2,507 180 2,875
12.Fixed asset investments (continued)
Year ended 31 December 2016
UK Listed AIM Un-listed Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2016 139 2,735 4 2,878
Purchases 10 255 - 265
Transfers - (17) 17 -
149 2,973 21 3,143
less: Sales (38) (375) - (413)
111 2,598 21 2,730
Realised period gains 5 24 - 29
Unrealised holding gains (1) (16) (17) (34)
115 2,606 4 2,725
Cost at 31 December 2016 188 2,467 131 2,786
The overall gain on investments for the years shown in the Income Statement is as follows:
Year ended Year ended
31 December 2017 31 December 2016GBP'000
GBP'000
Net realised gain on disposal 122 29
Increase/(decrease) in unrealised 403 (34)
appreciation
525 (5)
13.Venture capital investments
A full list of investments held is disclosed under Investment Portfolio.
14.Significant interests
The Company did not hold more than 10% of the allotted equity share capital of any class of any investee company.
15.Debtors
As at As at
31 December 2017 31 December 2016GBP'000
GBP'000
Uninvested funds with broker:
MD Barnard & Co Ltd 37 97
16.Creditors
As at As at
31 December 2017 31 December 2016GBP'000
GBP'000
Trade creditors and accruals 18 17
18 17
17.Share capital
As at As at
31 December 2017GBP'000 31 December 2016GBP'000
Authorised
25,000,000 ordinary 2,500 2,500
shares of 10p each
Allotted, called up
and fully paid
4,606,953 (2016: 461 461
4,606,953)
ordinary
shares of 10p each
18.Net asset value per share
Net asset value per share is based on net assets at 31 December 2017 of GBP3,145,881 (31 December 2016 of GBP2,805,735) and on 4,606,953 ordinary shares in issue at both those dates.
19.Performance incentive arrangements
The Investment Manager is not entitled to any performance incentive arrangements.
20.Reserves
Called up share capital represents the nominal value of shares that have been issued.
Share premium account includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
Capital redemption reserve relates to capital repurchased.
Capital reserve-distributable represents items of a capital nature legally available for distribution.
Capital reserve-realised represents surpluses or deficits on the disposal of investments and permanent impairment in the value of investments.
Capital reserve-unrealised represents surpluses and deficits on the revaluation of investments.
Revenue reserve includes all current and prior period retained profits and losses.
21.Notes to the cash flow statement
Net cash outflow from operating activities
Year ended Year ended
31 December 2017 31 December 2016
GBP'000 GBP'000
Operating
activity
Return/(loss) on ordinary 479 (27)
activities
Gains on sale of (122) (29)
investments
Investment (37) (50)
income
Unrealised (gains)/losses (403) 34
on investments
Decrease in 1 -
creditors
________ ________
(82) (72)
Cash and cash equivalents
Cash and cash equivalents comprise GBP36,958 (2016: GBP96,809) of uninvested funds, held in a bank account with the investment manager.
22.Risk management and financial instruments
A statement of the company's principal objectives is given within the Strategic Report on page 6. In order to achieve these objectives the company invests its funds primarily in qualifying holdings in unlisted companies and companies traded on AIM, which by their nature may entail a higher degree of risk than investments in large listed companies. The company has not entered into any derivative transactions, and does not expect to do so in the foreseeable future. As a venture capital trust, the company invests in securities for the long term, and it is the company's policy that no trading in investments or other financial instruments shall be undertaken.
Market price risk
The main risks arising from the company's investing activities are market price risk, representing the uncertain realisable values of the company's investments. The directors aim to limit the risk attaching to the portfolio as a whole by careful selection of investments and by maintaining a wide spread of investments in terms of financing stage, industry sector and geographical location.
The assets of the company are held for the most part as listed investments which carry market risk in the form of a single risk variable - market price movement. The directors do not consider that a risk analysis of that single risk variable will produce any useful information beyond the obvious that downward movement in share prices will result in a downward movement in the share values and vice versa. For this reason, the directors do not consider it appropriate to prepare a sensitivity analysis to market price movement.
Interest rate risk
The company finances its activities through retained profits including realisable capital profits, and through the issue of equity shares. It has not entered into any borrowings.
Liquidity risk
There is liquidity risk associated with unquoted investments, which are not readily realisable.
22.Risk management and financial instruments (continued)
Credit risk
Credit risk is the risk of a borrower defaulting on either an interest payment or the capital sum of a loan. The company has not made any loans to investee companies.
Currency risk
The company's assets and liabilities are denominated in sterling.
Capital
The company's capital is provided in its entirety by its shareholders in the form of ordinary shares.
The company's purpose and objective is the investment of its capital funds in listed investments, primarily those quoted on the Alternative Investment Market with a view to securing capital appreciation over the long term.
There were no externally imposed capital requirements with which the company had to comply during the year to 31 December 2017.
Financial assets
The interest rate profile of the company's financial assets is set out below:
Year ended Year ended
31 December 2017GBP'000 31 December 2016GBP'000
Fixed rate - 3
Non-interest bearing 3,127 2,722
3,127 2,725
Fixed rate assets Year ended Year ended
31 December 2017GBP'000 31 December 2016GBP'000
Weighted average n/a n/a
interest rate
Weighted average years n/a n/a
to maturity
Non-interest bearing financial assets comprise equity share and non-equity share investments in investee companies, cash held on non-interest bearing deposit and debtors.
Fair values
The investments of the company are valued by the directors in accordance with the guidelines issued by the British Venture Capital Association, and the carrying values are considered to approximate the fair value of the investments. The fair values have also been determined in line with the fair value hierarchy as set out in FRS 102 11.27.
23.Financial assets and liabilities
Year ended Year ended
31 December 2017 31 December 2016
GBP'000 GBP'000
Financial assets measured 3,127 2,725
at fair value
Financial assets measured 37 97
at amortised cost
Financial liabilities measured (18) (17)
at amortised cost
24.Related party transactions
New Century AIM VCT 2 plc is managed by M D Barnard & Co. Limited.
One amount was payable to key management personnel during the year for GBP5,000 (2016: GBP1,250).
25.Capital commitments
There were no investments which were approved at the year-end but which had not completed.
26.Control
New Century AIM VCT 2 plc is not under the control of any one party or individual.
27.Post balance sheet events
On 23 April 2018 the directors proposed a dividend in respect of the year ended 31 December 2017 of GBP152,029 representing 3.30p per ordinary share.
Shareholder information
For the year to 31 December 2017
The Company
New Century AIM VCT 2 PLC was incorporated on 16 January 2007. On 4 April 2007, the company obtained a listing on the London Stock Exchange. A total of GBP5.745 million was raised (before expenses) through an offer for subscription of new ordinary shares at 100p. The company has been approved as a Venture Capital Trust by the Inland Revenue.
The Investment Manager
New Century AIM VCT 2 PLC is managed by M D Barnard & Company Limited, an independent fund management company based in Laindon, Essex. M D Barnard & Company currently manages or advises private client funds and venture capital funds totalling approximately GBP25 million including New Century AIM VCT 2 PLC.
Venture Capital Trusts
Venture Capital Trusts (VCTs) were introduced in the Finance Act 1995 and are intended to provide a means whereby individual investors can invest in small unquoted trading companies in the UK, with incentives in the form of a number of tax benefits. From 6 April 2005, investors subscribing for new shares in a VCT have been entitled to claim income tax relief of 30% on their investment, irrespective of their marginal tax rate (up to a maximum investment of GBP200,000 per tax year). The tax relief cannot exceed the amount which reduces an investor's income tax liability to nil. In addition all dividends paid by VCTs are tax free and disposals of VCT shares are not subject to capital gains tax.
New Century AIM VCT 2 has been approved as a VCT by HM Revenue and Customs. In order to maintain its approval the company must comply with certain requirements on a continuing basis; in particular, within three years from the date of provisional approval at least 70% by value of the company's investments must comprise "qualifying holdings", of which at least 30% by value must be in eligible ordinary shares. A "qualifying holding" consists of up to GBP1 million invested in any one year in new shares or securities in an unquoted company which is carrying on a qualifying trade and whose gross assets do not exceed GBP15 million at the time of investment. For the purposes of these criteria, unquoted companies include companies whose shares are traded on the Alternative Investment Market ("AIM").
As with investment trusts, capital gains accruing to VCTs are not chargeable gains for UK Corporation Tax purposes.
Financial calendar
Annual General Meeting 22 June 2018
Interim report for six months to 30 June 2018 August 2018
Preliminary announcement of results for the year to 31 December 2018 April 2019
Annual General Meeting 2019 June 2019
The shares will go ex-dividend on 14 June 2018; the proposed dividend will be paid to shareholders on the share registrar as at 15 June 2018. The dividend will be paid on 13 July 2018.
Share price
The mid-market price of shares in New Century AIM VCT 2 PLC is available daily on the London Stock Exchange website (www.londonstockexchange.com).
View source version on businesswire.com: https://www.businesswire.com/news/home/20180430005500/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
April 30, 2018 04:31 ET (08:31 GMT)
1 Year New Century Aim Vct 2 Chart |
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