Annual Financial Report

Annual Financial Report

NEW CENTURY AIM VCT PLC

New Century AIM VCT plc

29th February 2016

Report and Accounts for the year to 29th February 2016

Financial Summary   1
Chairman's Statement 2
Details of Directors 3
Management and Administration 4
Directors 5
Strategic Report 6
Investment Portfolio 8
Top Ten Investments 12
Directors' Report 13
Directors’ Remuneration Report 16
Corporate Governance 18
Independent Auditors' Report 21
Statement of Comprehensive Income 24
Balance Sheet 25
Statement of Changes in Equity 26
 
 
Cash Flow Statement 27
Notes to the Financial Statements 28
Shareholder Information 39
Notice of Annual General Meeting 39
 

 

  Year ended

29 February

2016

  Year ended

28 February

2015

Revenue return per share (pence) for the year

0.54 0.18

Total return per share (pence) for the year

4.89 2.60

Proposed dividends per share (pence)

3.20 3.10

Net asset value per share (pence)

73.98 72.68

Cumulative value of shareholder investment (net asset value plus cumulative dividends per share) (pence)

87.90 83.50

Shareholders’ funds (£’000)

6,387 6,902

Details of Directors

Chairman’s Statement

I am pleased to report another positive performance in the year for your fund. The net asset value per share rose from 72.68p to 73.98p per share, a gain of 1.79%, and the net asset value plus cumulative dividends rose from 83.5p to 87.9p per share being a rise of 5.27%. This is compared to a fall in the FTSE AIM All Share Index of 3.03% in the year.

It is also pleasing to see the share price continue to appreciate from a mid price of 61.5p at the start of the year to a mid price of 69.5p at the end of the year, a gain of 13%. We continue to work hard to create value for our shareholders and it is encouraging to see that we are making some progress.

During the period we offered our shareholders the opportunity to sell some of their shares via another buy back at close to the net asset value.

We realise the importance of income for our shareholders, and have therefore agreed, subject to shareholder approval, to increase the dividend from 3.1p to 3.2p per share which is the 5th consecutive year of increased dividend payments.

The level of qualifying investments at 84.67% is still comfortably above the 70% required level.

Your funds net asset value is published on a monthly basis. We would like to point out to our shareholders that the net asset value reported within our Accounts is based on the bid price of the shares, whereas the monthly net asset values we report are based on mid market prices. To illustrate, the net asset value of your fund based on mid market prices was 76.59p at 29th February year end, and this had increased to 82.7p on 10th June.

Now we know the UK is going to exit the EU, we are conscious of the probable volatility which will be in evidence in the Markets for some time to come.

Geoffrey Gamble

Chairman

29 June 2016

Michael Barnard (Aged 65)

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, M D Barnard & Co. 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 with a total value of approximately £115 million.

Geoffrey Gamble (Aged 57)

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 71)

Peter is a retired solicitor. He specialised in property law with an emphasis on large commercial properties.

Ian Cameron-Mowat (Aged 65)

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 the NHS Trust.

Management and Administration

Registered Office & Registered Number   4th Floor,

50 Mark Lane

London EC3R 7QR

Company Number: 05352611

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

Investment Manager and Broker

M D Barnard & Co. Limited

17-21 New Century Road

Laindon,

Essex SS15 6AG

Auditor & VCT Status Adviser

UHY Hacker Young LLP

Quadrant House

4 Thomas More Square

London E1W 1YW

Bankers Bank of Scotland

New Uberior House

11 Earl Grey Street

Edinburgh EH3 9BN

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 unquoted and AIM traded companies in the United Kingdom. The company has been listed on the London Stock Exchange since 25 March 2005. 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 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

It was a volatile year for the AIM index. The early part of the year the index made good gains, but by the start of June the index started to experience a general decline through to the end of December.

2016 then started with a sharp sell off across most indices and AIM was no exception, however by mid February 2016 this abated and the Market bounced quite strongly.

We made thirteen qualifying investments, purchasing shares in Bilby, Venn Life Sciences, Hunters Property, Satellite Solutions Worldwide, TEK Capital, Falanx, Imginatik, Premaitha Health, Gear4Music, Coral Products, Belvoir Lettings, Gfinity and Cyan Holdings.

As well as these shares, we purchased shares in seventeen non qualifying companies that we thought were undervalued. We top sliced or exited twenty eight shares.

During the year the fund processed a 10% buy back of the share capital at a 5% discount to its net asset value at the time. This helped provide liquidity to shareholders that were looking to sell some of their shares.

We remain cautiously optimistic for another year of progress, although we will no doubt see more volatility in the months ahead now the Country has voted to leave the EU. This may cause uncertainty in the Markets and could possibly result in companies seeing short term decisions on contracts and capital spend being delayed. On the positive side, we have started to see a more steady flow of companies seeking funding which gives your fund the opportunity to invest in new qualifying companies or to add to existing investments.

Investment Objective

New Century AIM VCT 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 the 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 financial statements 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

Director

29 June 2016

Investment Portfolio

Security   Cost   Valuation   %   %
  £ 29/02/2016 - £ Cost Valuation
Qualifying Investments 7,688,349 5,267,009 84.67 82.12
Non-qualifying Investments 949,583 704,401 10.46 10.98
8,637,932 5,971,410 95.13 93.10
Uninvested funds 442,527 442,527 4.87 6.90
9,080,459 6,413,937 100.00 100.00
Qualifying Investments
AIM quoted
Tristel plc 163,901 466,089 1.81 7.27
PHSC plc 182,910 80,500 2.01 1.26
DCD Media plc 562,800 2,125 6.20 0.03
Legion Group plc 175,875 0 1.94 0
K3 Business Technology Group 90,360 348,651 1.00 5.44
Belgravium Technologies 281,400 70,000 3.10 1.09
Progility plc 753,750 8,750 8.31 0.14
Lighthouse Group plc 203,513 142,500 2.24 2.22
Invocas Group plc 100,400 8,100 1.11 0.13
Relax Group 135,675 0 1.49 0
Vianet Group 40,175 30,875 0.44 0.48
HML Holdings plc 351,549 384,400 3.87 5.99
Welby Holdings plc 502,500 0 5.53 0
Kurawood plc 150,750 0 1.66 0
Optare plc 50,753 0 0.56 0
Cyan Holdings plc 307,201 115,823 3.38 1.81
Marechale Capital plc 133,828 16,563 1.47 0.26
Lombard Risk Management 24,120 66,000 0.27 1.03
M. Winkworth plc 72,360 104,400 0.80 1.63
Bango plc 7,563 7000 0.08 0.11
Castle Street Investments plc 82,912 53,625 0.91 0.84
Kennedy Ventures plc 70,350 625 0.77 0.01
Eco City Vehicles plc 187,763 2,082 2.06 0.03
TP Group plc 109,278 21,020 1.20 0.33
Brady plc 41,805 40,185 0.46 0.63
Music Festivals plc 68,090 0 0.75 0
Inspired Energy plc 51,370 217,286 0.57 3.39
Microsaic Systems plc 78,978 35,698 0.87 0.56
Venn Life Sciences plc 115,581 93,566 1.27 1.46
DP Poland plc 20,113 34,684 0.22 0.54
Modern Water plc 50,253 7,600 0.55 0.12
Quixant plc 11,559 43,750 0.13 0.68
Litebulb Group 102,266 4,095 1.12 0.05
Blur Group 4,991 414 0.05 0.01
Keywords Studios plc 30,907 53,500 0.34 0.83
Cloudbuy plc 58,483 8,401 0.65 0.13
EU Supply plc 15,333 2,363 0.17 0.04
Plastics Capital plc 30,153 28,800 0.33 0.45
Daily Internet plc 50,256 60,000 0.55 0.94
Eclectic Bar Group 50,253 16,250 0.55 0.25
 
         
Security Cost Valuation % %
  £ 29/02/2016 - £ Cost Valuation
 
Kalibrate Technologies plc 31,761 40,400 0.35 0.63
Syqic plc 19,943 5,760 0.22 0.09
Outsourcery plc 45,027 3,600 0.50 0.06
Martinco plc 100,503 140,000 1.11 2.18
Solid State plc 40,134 57,585 0.44 0.90
Audioboom Group 22,615 40,500 0.25 0.63
Scholium Group 50,253 18,500 0.55 0.29
Rosslyn Data Technologies plc 27,037 7,744 0.30 0.12
Coral Products plc 118,095 183,333 1.30 2.86
Software Radio Technology plc 27,139 30,000 0.30 0.47
ULS Technology plc 135,679 185,625 1.49 2.89
Nostra Terra Oil & Gas Co plc 12,667 4,200 0.14 0.07
Mountfield Group plc 18,482 8,000 0.20 0.12
Collagen Solutions plc 20,757 17,700 0.23 0.28
Gfinity plc 96,021 71,045 1.06 1.11
Ideagen plc 28,430 39,101 0.31 0.61
Premier Technical Services Group 130,964 202,981 1.44 3.16
Angle plc 125,880 109,834 1.39 1.71
Bilby plc 156,673 330,586 1.73 5.15
Hunters Property plc 251,256 370,000 2.77 5.77
Satellite Solutions Group 276,387 287,222 3.04 4.48
Tekcapital plc 135,683 324,000 1.49 5.05
Falanx Group Ltd 51,460 21,943 0.57 0.34
Gear4Music Holdings 150,754 138,130 1.66 2.15
Premaitha Health plc 69,349 34,500 0.76 0.54
Belvoir Lettings plc 23,320 19,000 0.26 0.30
       
Total qualifying investments 7,688,349 5,267,009 84.67 82.12
Security   Cost   Valuation   %   %
  £ 29/02/2016 - £ Cost Valuation
Non-qualifying Investments
AIM quoted
Sanderson Group 37,008 70,000 0.41 1.09
Eco City Vehicles 62,257 279 0.68 0
Rotala plc 60,796 118,800 0.67 1.85
Tristel plc 60 111 0.00 0.00
K3 Business Technology Group 131 349 0.00 0.01
Bango plc 291 80 0.00 0.00
China Food Co plc 65,969 2,300 0.73 0.04
Numis Corp 16,570 41,600 0.19 0.64
Gable Holdings plc 12,112 5,500 0.13 0.08
Lombard Risk Management plc 131 110 0.00 0.00
Castle Street Investments plc 218 39 0.00 0.00
Brady plc 106 57 0.00 0.00
Cyan Holdings plc 131 30 0.00 0.00
Sorbic International plc 18,717 2,660 0.21 0.04
DDD Group 16,647 2,288 0.18 0.04
Driver Group 8,992 7,000 0.10 0.11
TLA Worldwide plc 29,118 40,803 0.33 0.63
Sweett Group 7,578 4,400 0.08 0.07
Mobile Tornado Group 10,124 1,750 0.11 0.03
Mar City plc 10,053 4,375 0.11 0.07
Minds & Machines Group 12,063 8,900 0.13 0.14
Tyratech Inc 10,204 4,350 0.11 0.07
Audioboom plc 1,163 270 0.01 0.00
Be Heard Group plc 18,186 17,500 0.20 0.27
EKF Diagnostics plc 10,255 5,500 0.11 0.09
Gateley Holdings plc 14,627 14,700 0.16 0.23
Yolo Leisure and Technology plc 22,367 15,625 0.25 0.24
Armstrong Venturesl plc 52,570 33,250 0.58 0.53
498,447 402,626 5.49 6.28
 

 

Security Cost Valuation % %
  £ 29/02/2016 - £ Cost Valuation
UK Listed
Investec plc 202,821 102,638 2.23 1.60
Premier Farnell plc 44,542 48,000 0.49 0.75
Aviva plc 22,268 24,150 0.25 0.38
HSBC Holdings plc 21,955 16,065 0.24 0.25
Imperial Tobacco Group 23,763 37,220 0.26 0.58
Greene King 9,964 11,325 0.11 0.18
Waterman Group 9,926 16,625 0.11 0.26
Centrica plc 10,074 6,240 0.11 0.10
Twentyfour Inc 9,852 8,200 0.11 0.13
Vodafone plc 20,590 20,312 0.23 0.32
375,755 290,775 4.14 4.53
 
Unlisted Investments
Merchant House Loan 25,128 4,500 0.28 0.07
Litebulb Loan 50,253 6,500 0.55 0.10
75,381 11,000 0.83 0.17
       
Total non-qualifying investments 949,583 704,401 10.46 10.98

Top Ten Investments

Security   Cost   Valuation   %   %
  £ 29/02/2016 - £ Cost Valuation
 
Tristel plc 163,901 466,089 1.81 7.27
 
HML Holdings plc 351,549 384,400 3.87 5.99
 
Hunters Property plc 251,256 370,000 2.77 5.77
 
K3 Business Technology Group 90,360 348,651 1.00 5.44
 
Bilby plc 156,673 330,586 1.73 5.15
 
Tekcapital plc 135,683 324,000 1.49 5.05
 
Satellite Solutions Group 276,387 287,222 3.04 4.48
 
Inspired Energy plc 51,370 217,286 0.57 3.39
 
Premier Technical Services Group 130,964 202,981 1.44 3.16
 
ULS Technology plc 135,679 185,625 1.49 2.89

The investments tabulated above are expressed as a percentage of the company’s investment portfolio including uninvested cash.

Directors’ Report

The directors present their report and the audited financial statements for the year to 29 February 2016.

Results and dividend

  Year to

29 February 2016

  Year to
28 February 2015
Revenue   Capital Revenue   Capital
£’000 £’000 £’000 £’000

Return on ordinary activities after taxation

51 407 18 248
       
Appropriated as follows:
 
Interim dividend paid
 
Revenue – nil p - - - -
 
Capital – nil p - - - -
 
Final dividend paid in respect of prior period
Revenue – 0.18p (0.15p) per share (17) - (16) -
Capital – 2.92p (2.85p) per share - (280) - (301)
 
       
Transfers to/(from) reserves 34 127 2 (53)

The directors propose a final revenue dividend of 0.525p per share and a final capital dividend of 2.675p per share for the year ended 29 February 2016 to be paid on 9 September 2016 to shareholders on the register at 12 August 2016.

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

29 February 2016

  Year ended

28 February 2015

 
Michael Barnard 2,176,380 2,578,789
Geoffrey Gamble 74,196 87,728
Peter William Riley 31,136 34,595
Ian Cameron-Mowat 105,057 121,355

All of the directors’ share interests shown above are held beneficially.

Brief biographical notes on the directors are given on page 3. The director, retiring in accordance with the company’s Articles of Association, is Mr 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

M D Barnard & Co. Limited 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 Financial Statements.

VCT status monitoring

The company has engaged UHY Hacker Young LLP to advise it on compliance with the VCT legislation. UHY Hacker Young LLP reviews the company’s investment portfolio to monitor ongoing VCT compliance. UHY Hacker Young LLP works closely with the investment manager, but reports directly to the Board of the company.

Substantial shareholdings

As at 29 February 2016 the company had been notified of the following shareholdings representing 3 per cent or more of the company’s issued share capital during the year under review or at the date of this report:

  Number   Percentage

of share capital

Michael Barnard 2,176,380 25.21%
Geoffrey Williams 379,070 4.39%
Nigel Shanks 372,476 4.31%
David Trotman 324,000 3.75%
John Brice 290,988 3.37%

Acquisition of own shares

During the year the company re-purchased 959,374 ordinary shares in accordance with the special resolution passed at the Annual General Meeting on allowing the Directors to acquire up to 14.99% of the ordinary shares of the company.

Structure of the company’s capital

The company only has one class of ordinary share and each share has attached to them 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.

Annual general meeting

Notice of the annual general meeting is set out on page 39.

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

Director

29 June 2016

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 24 August 2016.

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 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.

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.

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 28 February 2015 and 29 February 2016 are 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 Index total return for the period since listing on the London Stock Exchange.

By Order of the Board

Michael Barnard

Director

29 June 2016

Corporate Governance

The directors support the relevant principles of the UK Corporate Governance Code issued in September 2014 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 (‘the UK 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 financial statements, 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 financial statements.

The Board

The company is led and controlled by a Board of directors who are all non-executives. 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:

3 full board meetings   2 Audit Committee meetings
All directors attended all meetings with the exception of Mr Cameron-Mowat on 2 occasions and Mr Riley on 1 occasion. All members attended with the exception of Mr Cameron-Mowat on one occasion.

Whilst only Mr Gamble had been a director of a quoted company, 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 with the exception of the representative of the investment manager. During the year the Audit Committee was chaired by Mr Gamble. The Audit Committee reviews the financial statements 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. 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.

During the year Messrs UHY Hacker Young LLP continued to act as auditors, and as part of their audit process reviewed the internal financial controls including those of the investment manager necessary for the expression of their audit opinion.

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 UK 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 financial statements.

Financial Reporting

The directors’ statement of responsibilities for preparing the financial statements is set out on page 20, 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 FRS’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 fifty-four UK Code provisions throughout the accounting year. The Comply or Explain Section of the UK 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 29 February 2016 with the provisions set out in Sections A to E of the UK 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 UK Code issued in September 2014. 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 UK 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 AGM.

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 year. 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; and

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.

Independent Auditors’ Report to the members of New Century AIM VCT plc

Opinion on financial statements

In our opinion the financial statements:

  • give a true and fair view of the state of the company's affairs as at 29 February 2016 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.

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.

We have audited the financial statements of New Century AIM VCT plc for the year ended 29 February 2016 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and the related notes. 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).

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 statement of comprehensive income and balance sheet.
  • Compliance with the VCT rules is necessary to maintain the VCT status and associated tax benefits.
  • Accounting for the buyback of shares completed during the year.

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 £105,000. In determining this we based our assessment on an average of three key indicators, being the result 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 £78,750.

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.
  • We agreed the number of shares bought back to supporting documentation and cash receipt, agreeing both the number and price at which the shares were bought back. Additionally we agreed the accounting treatment associated with the share buyback.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC's web-site at www.frc.org.uk/apb/scope/private.cfm.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors’ Responsibilities set out on page 20, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

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; and
  • the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the financial statements is:

  • materially inconsistent with the information in the audited financial statements; or
  • apparently materially incorrect based on, or materially inconsistent with, our knowledge of the company acquired in the course of performing our audit; or
  • is otherwise misleading.

Matters on which we are required to report by exception (continued)

In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors’ statement that they consider the annual report fair, balanced and understandable and whether the annual report appropriately discloses those matters that we communicated to the Audit Committee which we consider should have been disclosed.

Under the Companies Act 2006 we are required to report to you if, in our opinion:

  • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
  • the financial statements are not in agreement with the accounting records and returns; or
  • 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.

Under the Listing Rules we are required to review:

  • the directors' statement, set out on page 18, in relation to going concern; and
  • the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the UK Corporate Governance Code specified for our review; and
  • certain elements of the report to the shareholders by the Board on directors' remuneration.

Colin Jones (Senior statutory auditor)

for and on behalf of UHY Hacker Young

Chartered Accountants

Statutory Auditors

Quadrant House

4 Thomas More Square

London, E1W 1YW

30 June 2016

Statement of Comprehensive Income (incorporating the revenue account) for the year to 29 February 2016

    Year ended
29 February 2016 		  Year ended
28 February 2015
Notes Revenue
£’000 		  Capital
£’000 		  Total
£’000 		Revenue
£’000 		  Capital
£’000 		  Total
£’000
 
Gains on investments
- realised - 282 282 - 118 118
- unrealised - 182 182 - 187 187
Income 5 118 - 118 84 - 84
Investment management fee 6 (19) (57) (76) (19) (57) (76)
Other expenses 7 (48) - (48) (47) - (47)
________ ________ ________ ________ ________ ________
Return on ordinary activities before taxation 51 407 458 18 248 266

 

Tax credit/ (charge) on ordinary activities

 

9

- - - - - -
________ ________ ________ ________ ________ ________
Return on ordinary activities after taxation

 

51 407 458 18 248 266
======= ======= ======= ======= ======= =======
 
Return per ordinary share (pence)

11

0.54 4.35 4.89 0.18 2.42 2.60
======= ======= ======= ======= ======= =======

The notes on pages 28 to 38 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 as shown above, the company had no recognised gains or losses. Accordingly, the above represents the total comprehensive income for the year.

Balance Sheet

at 29 February 2016

    Year ended   Year ended
29 February 2016 28 February 2015
Note £’000 £’000
   
Fixed assets
Investments 12 5,971 6,269
 
Current assets
Debtors 15 443 661
 
Current liabilities
Creditors: amounts falling due within one year 16

(27)

(28)

 
   
6,387 6,902
   
Capital and reserves
Called up share capital 17 863 950
Share premium 20 612 549
Capital reserve – realised 20 1,140 193
Capital reserve – unrealised 20 1,483 2,023
Capital Redemption Reserve Fund 20 313 217
Revenue reserve 20 1,976 2,970
 
 
   
Total equity shareholders’ funds 6,387 6,902
   

Net asset value per ordinary share

18

74p

73p

   

The financial statements on pages 24 to 38 were approved by the Board of directors on 29 June 2016 and were signed on its behalf by:

Michael Barnard

Director

The notes on pages 28 to 38 form an integral part of these financial statements.

Company’s registered number: 05352611

Statement of Changes in Equity

at 29 February 2016

  Share capital   Share premium account   Capital redemption reserve   Capital realised   Capital unrealised   Revenue reserve   Total
£ £ £ £ £ £ £
 
As at 1 March 2014 1,002 198 111 1,335 633 3,998 7,277
Cancellation of shares (106) - 106 - - (729) (729)
Realised gains on disposals

-

-

-

118

-

-

118

Share issue 54 351 - - - - 405
Transfer of unrealised loss to realised on disposal of investment

-

-

-

(1,203)

1,203

-

-

Net revenue before tax - - - - - 18 18
Capital element of investment management fee

-

-

-

(57)

-

-

(57)

Dividends paid - - - - - (317) (317)
Unrealised gains - - - - 187 - 187
             
At 28 February 2015 950 549 217 193 2,023 2,970 6,902
             
 
As at 1 March 2015 950 549 217 193 2,023 2,970 6,902
Cancellation of shares (96) - 96 - - (748) (748)
Realised gains on disposals

-

-

-

282

-

-

282

 
Share issue 9 63 - - - - 72
Transfer of unrealised gain to realised on disposal of investment

-

-

-

722

(722)

-

-

Net revenue before tax - - - - - 51 51
Capital element of investment management fee

-

-

-

(57)

-

-

(57)

Dividends paid - - - - - (297) (297)
 
Unrealised gains - - - - 182 - 182
             
At 29 February 2016 863 612 313 1,140 1,483 1,976 6,387
             

Cash Flow Statement

at 29 February 2016

  Note   Year ended   Year ended
29 February 2016 28 February 2015
£’000 £’000
   
 
 
Cash flow from operating activities
Cash generated from operations 21 (125) (123)
   
Net cash generated from operating activities (125) (123)
 
Cash flows from investing activities
Interest received 7 3
Investment income 111 81
   
Net cash from investing activities 118 84
 
Cash flows from financing activities
Sale of investments 2,496 1,518
Purchase of investments (1,734) (1,059)
Share issue 72 405
Dividends paid (297) (317)
Share cancellation (748) (729)
   
Net cash used in financing activities (211) (182)
 
Net decrease in cash and cash equivalents (218) (221)
 
Cash and cash equivalents at the beginning of the year 661 882
   
Cash and cash equivalents at the end of year 443 661
   

1. Company information

New Century AIM VCT PLC is a UK incorporated company whose registered office is:

4th Floor

50 Mark Lane

London EC3R 7QR

New Century AIM VCT 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.

Investments

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.

Notes to the Financial Statements

for the year to 29 February 2016

This is the first year in which the financial statements have been prepared under FRS 102. No adjustment or re-statement of prior years has been required as a result of this transition.

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.

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.

3. Significant estimates and judgements

As the company’s investment holdings, which comprise almost 94% 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 except that a full provision is made until the receipt of the income is certain.

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, net of corporation tax relief, 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

Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

5. Income

  Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
 
Interest receivable
- bank deposits and liquid funds 7 3
 
 
Dividends receivable 111 81
   
Investment income 118 84

6. Investment management fees

  Year ended   Year ended
29 February 29 February
2016 2015
Revenue   Capital Revenue   Capital
£’000 £’000 £’000 £’000
 
Investment management fees 19 57 19 57

M D Barnard & Co. 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 10 March 2005. Michael Barnard who is a non-executive director of the company is managing director and proprietor of MDB.

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 29 February, 31 May, 31 August and 30 November. No performance fee is payable.

The investment management agreement is for a minimum period of three years from 24 March 2005 terminable by either party at any time thereafter by one year’s prior written notice.

7. Other expenses

  Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
 
Administrative and secretarial services 11 19
Auditors’ remuneration

- for audit services

10 10
- for tax services 2 1
Regulatory fees 19 11
Miscellaneous 6 6
   
48 47

8. Directors’ remuneration

No remuneration has been paid or is payable for year to 29 February 2016, this is also true for the prior year.

9. Tax charge/(credit) on ordinary activities

  Year ended   Year ended
29 February 28 February
2016 2015
Revenue   Capital Revenue   Capital
£’000 £’000 £’000 £’000
 
United Kingdom tax based on the taxable return for the year - - - -
       
Factors affecting tax charge/(credit) for the year
 
Return on ordinary activities before taxation 51 407 18 248
       
Tax on above at the small company rate of 20% (2015: 20%) 10 81 4 50
 
UK dividends not subject to corporation tax (22) - (16) -
Capital loss on investment - (101) - (70)
Non allowable expenses 1 - 1 -
Unutilised losses 11 20 11 20
 
       
Current tax charge/(credit) for the year - - - -
       

At the balance sheet date, the company has unused tax losses available for offset against suitable future gains. A deferred tax asset of £260,000 (2015: £250,000) has not been recognised in respect of such losses due to the unpredictability of suitable future taxable profits.

10. Dividends

  Year ended

29 February 2016

£’000

  Year ended

28 February 2015
£’000

 
Interim dividend paid     -     -
Final dividend paid in respect of previous year 297 317
   
297 317
   

The directors propose a final revenue dividend of 0.525p per share and a final capital dividend of 2.675p per share for the year ended 29 February 2016 to be paid on 9 September 2016 to shareholders on the register at 12 August 2016.

11. Return per ordinary share

The revenue return, per ordinary share, is based on the net revenue on ordinary activities after taxation of £50,806 (2015: £18,346) and on 9,376,947 (2015: 10,240,327) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

The capital return per ordinary share is based on a net realised and unrealised capital return of £407,621 (2015: £247,684) and on 9,376,947 (2015: 10,240,327) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

12. Fixed asset investments

  Year ended   Year ended
29 February 2016 28 February 2015
£’000 £’000
       
UK Listed 290 346
AIM 5,670 5,869
Unlisted 11 54
   
5,971 6,269
   

Movements in investments, including realised and unrealised gains and losses, during the year are summarised as follows:

    Year ended 29 February 2016
Unlisted UK listed   AIM   ISDX Mkts   Total
£'000 £'000 £'000 £'000 £'000
Valuation at 1 March 2015 54 346 5,869 - 6,269
Purchases at cost - 89 1,645 - 1,734
Sales proceeds - (149) (2,347) - (2,496)
Realised gains/(losses) - 8 274 - 282
Unrealised gains/(losses) (43) (4) 229 - 182
Valuation at 29 February 2016 11 290 5,670 - 5,971
 
Cost at 1 March 2015 76 410 7,910 - 8,396
Purchases - 89 1,645 - 1,734
Sales proceeds - (149) (2,348) - (2,497)
Realised gains/(losses) - 25 980 - 1,005
Cost at 29 February 2016 76 375 8,187 - 8,638

12. Fixed asset investments (continued)

    Year ended 28 February 2015
Unlisted UK listed   AIM   ISDX Mkts   Total
£'000 £'000 £'000 £'000 £'000
Valuation at 1 March 2014 5 406 6,012 - 6,423
Purchases at cost 50 40 969 - 1,059
Sales proceeds - (118) (1,400) - (1,518)
Realised gains/(losses) - 5 113 - 118
Unrealised gains/(losses) (2) 13 176 - 187
Valuation at 28 February 2015 53 346 5,870 - 6,269
 
Cost at 1 March 2014 367 448 8,924 201 9,940
Purchases 50 40 969 - 1,059
Sales proceeds - (118) (1,400) - (1,518)
Realised gains/(losses) (341) 40 (583) (201) (1,085)
Cost at 28 February 2015 76 410 7,910 - 8,396

The overall gain on investments for the years shown are in the Income Statement is analysed as follows:

  Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
Net realised gain on disposal     282     118
Increase in unrealised appreciation 182 187
   
464 305
   

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

Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
Uninvested funds with broker:        
M D Barnard & Co. Limited 443 661
   

16. Creditors: amounts falling due within one year

  Year ended

29 February

2016

£’000

  Year ended

28 February

2015
£’000

       
Trade creditors and accruals 27 28
   
27 28
   

17. Share capital

  Year ended

29 February 2016
£’000

  Year ended

28 February 2015
£’000

       
Authorised
15,000,000 ordinary shares of 10p each 1,500 1,500
   
Allotted, called up and fully paid
8,634,374 (2015: 9,497,479) ordinary shares of 10p 863 950
   

On 27 March 2015 the company issued 96,269 ordinary shares at a price of 74.84 pence per share.

On 11 December 2015 the company completed a share buy-back of 959,374 ordinary shares at a price of 78.02 pence per share. Those ordinary shares that were bought back were cancelled and in accordance with Section 733 of the Companies Act 2006 a capital redemption reserve was established in respect of the nominal value of the ordinary share capital being cancelled.

18. Net asset value per share

Net asset value per share is based on net assets at 29 February 2016 of £6,387,636 (28 February 2015 of £6,903,068) and on 8,634,374 ordinary shares (2015: 9,497,479 ordinary shares) in issue at 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 – 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

  Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
Operating activity
Operating return 458 266
Gain on sale of investments (282) (118)
Investment income (note 5) (118) (84)
Unrealised profits on investments (182) (187)
Decrease in creditors (note 16) (1) -

 

 

(125) (123)
   

Cash and cash equivalents

Cash and cash equivalents comprise £442,528 (2015: £661,134) 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.

22. Risk management and financial instruments (continued)

Market price risk (continued)

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. The company’s investment portfolio includes investments in interest bearing securities in investee companies and in other fixed interest securities. Details of interest bearing assets are given below under Financial assets.

Liquidity risk

There is liquidity risk associated with unquoted investments, which are not readily realisable.

Credit risk

Credit risk is the risk of a borrower defaulting on either an interest payment or the capital sum of a loan. The exposure is limited to uninvested funds held with the investment manager and the fixed interest loan notes.

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 29 February 2016.

22. Risk management and financial instruments (continued)

Financial assets

The interest rate profile of the company’s financial assets is set out below:

  Year ended   Year ended
29 February 28 February
2016 2015
£’000 £’000
Floating rate   443   661
Fixed rate 6 49
Non-interest bearing 5 5
   
454 715
   
 
Year ended Year ended
29 February 28 February
2016 2015

Fixed rate assets

Weighted average interest rate 10% 10%
Weighted average years to maturity 1.75 2.75
 

Floating rate financial assets comprise cash held on deposit and investments in liquidity funds. The benchmark rate for these investments is the UK bank base rate.

Non-interest bearing financial assets comprises 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

29 February 2016

£’000

  Year ended

28 February 2015

£’000

 
Financial assets measured at fair value 5,971 6,269
Financial liabilities measured at amortised cost (27) (28)

24. Related party transactions

New Century AIM VCT plc is managed by M D Barnard & Co. Limited. Details of the relationship and transactions with the related party are included in note 6.

No amounts were payable to key management personnel during the year (2015: £nil).

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 plc is not under the control of any one party or individual.

27. Post balance sheet events

On 29 June 2016 the directors proposed a dividend in respect of the year ended 29 February 2016 of £276,300 representing 3.20p per ordinary share.

Shareholder Information

for the year to 29 February 2016

The Company

New Century AIM VCT PLC was incorporated on 4 February 2005 in England & Wales. In March 2005, the company obtained a listing on the London Stock Exchange. A total of £8.465 million was raised (before expenses) through an offer for subscription of new ordinary shares at 100p.

The Investment Manager

New Century AIM VCT PLC is managed by M D Barnard & Co. Limited, an independent fund management company based in Laindon, Essex. M D Barnard & Co. Limited currently manages or advises investment trust, unit trust and venture capital funds totalling approximately £40 million including New Century AIM VCT 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. Investors subscribing for new shares in a VCT are currently entitled to claim Income Tax relief of 30% on their investment, irrespective of their marginal rate (up to a maximum of £200,000 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. Conversely, losses on VCT shares are not allowable to offset against taxable gains.

The company has reached the end of its provisionally approved period and now complies with the full requirements for approval. 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.

As with investment trusts, capital gains accruing to VCTs are not chargeable gains for UK Corporation Tax purposes.

Financial calendar

Annual General Meeting 2016

  24 August 2016
Interim report for six months to 31 August 2016 published October 2016
Preliminary announcement of results for the year to 28 February 2017 June 2017
Annual General Meeting 2017 August 2017
 

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The mid-market price of shares in New Century AIM VCT PLC is available daily on the London Stock Exchange website (www.londonstockexchange.com).

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