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
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)
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