TIDMNCA
New Century AIM VCT plc: Report and Accounts for the year to 28th February 2009
Financial Summary
Year ended28 February Year ended29 February2008
2009
Revenue return per share 1.44 0.93
(pence) for the year
Total return per share (61.55) (18.92)
(pence) for the year
Proposed dividends 0.19 1.90
per share (pence)
Net asset value per 53.03 115.46
share (pence)
Cumulative value
of shareholder
investment (net asset
value plus cumulative 57.09 117.20
dividends
per share) (pence)
Shareholders' funds 4,799 9,773
(GBP'000)
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.
Chairman's Statement
In the year to 28th February, 2009, the FTSE AIM Index fell by a massive 61.7%. Although your fund was not immune to this weakness, it managed to outperform with a decline in net asset value per share of 54.1%. While much of this weakness was due to difficult trading conditions brought about by the credit crunch, the falls in share prices were often exaggerated when sellers found it very difficult to dispose of shares in any meaningful quantity. This situation was compounded by a virtual absence of buyers in the smaller company share market.
During the year we disposed of investments for a net profit of GBP178,000. At the company year end, qualifying investments represented 72.33% of the total portfolio. Funding of GBP771,000 was raised through the issue of new shares in the year.
Investment management income showed a small decline from GBP166,000 to GBP154,000 reflecting the fact that some of the fund's deposits and fixed interest stocks were switched into lower yielding equities. However, due to the low level of distributable reserves, we have had to reduce the net dividend per share from 1.9p to 0.19p.
Dramatic falls such as we have experienced over the past year occur very seldom in a lifetime. However, such falls did occur during the oil crisis between 1972 and 1974; during the great crash of 1987; and more recently in the dot com crash of 2000. After each of these sharp falls, the market has recovered as I feel sure it will do again. Since the company's year end, confidence is showing some signs of recovery and the net asset value per share of the fund has moved up from 53p at the company's year end to 64.5p as at 22 June, 2009.
On the 22nd May, 2009, Robin Kirby resigned from the board due to the fact that he is now spending much of his time overseas. The directors would like to thank him for his valuable assistance since the inception of the fund, all of which has been carried out without payment. Robin has been replaced as a non executive director by Ian Cameron-Mowat.
Annual General Meeting
The annual general meeting will be held at 11.30 am. on the 30th July, 2009 at 17-21 New Century Road, Laindon, Essex SS15 6AG. I look forward to meeting those shareholders who are able to attend.
Geoffrey Charles Gamble
Chairman
29 June 2009
Details of Directors
Michael Barnard (Aged 59)}
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, which now has a staff (including self employed registered representatives) of 21. 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 GBP115 million.
Geoffrey Gamble (Aged 50)
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 64)
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.
Robin Kirby (Aged 67)
Robin joined the Bank of England where he remained until he retired in 1998 in a senior management position. During his time in the Bank, Robin specialised in foreign exchange and was seconded to the International Monetary Fund for three years, working in the Central Bank of Botswana. He also undertook many missions throughout the world for the World Bank and other international agencies, particularly in the Far East and Africa. He currently runs his own consultancy business, Robin Kirby & Associates Limited, which specialises in advising developing countries on foreign exchange and foreign direct investment issues.
Ian Cameron-Mowat (Aged 59)
Ian, aged 59, 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 & 4th Floor,150-152 Fenchurch
Registered Number StreetLondon
EC3M 6BB5352611
Company Secretary Graham Urquhart4th Floor,150-152
Fenchurch StreetLondon EC3M 6BB
Registrar Neville Registrars LimitedNeville
House18 Laurel
LaneHalesowenWest Midlands B63 3DA
Solicitors Dundas & Wilson5th Floor,
Northwest WingBush
HouseAldwychLondon WC2B 4EZ
Investment Manager and Broker M D Barnard & Company
Limited17-21 New
Century RoadLaindon,
Essex SS15 6AG
Auditor & VCT Status Adviser UHY Hacker Young LLPQuadrant House4
Thomas More SquareLondon E1W 1YW
Bankers Bank of ScotlandNew Uberior House11
Earl Grey StreetEdinburgh 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
Investment Manager's Review
Although 2008/9 was undoubtedly a very disappointing year, we did manage to achieve two highly profitable sales. Our remaining holding in Tanfield was disposed of at a profit of GBP107,000 while the shares were still enjoying demand as a result of optimism for any company involved in the manufacture of electronic vehicles. We also reduced part of our holding in Educational Developments at a profit of GBP100,000 following outstanding trading figures. Our total realised losses came to less than GBP100,000. Sadly, it was the end of the road for CKS, EBTM, Fishworks and Microemissive. These companies all succumbed to the shortage of finance available for smaller companies trying to develop new businesses.
The fund still holds some investments in companies that are struggling, but the exposure to these is low and any damage to the fund through their complete demise would have very limited effect on the value of the fund. At current levels, the retention of such stocks does help to support the level of qualifying investments.
We have continued to maintain a diversified fund and the number of holdings showed a small increase from 67 to 69.
We are now starting to see more interest in the shares of smaller companies. We are finding that just tiny purchases can move up some of these shares very sharply due to the fact that there are few willing sellers at such low levels. The net asset value of your fund has been steadily rising over the past few weeks and now that some optimism has returned, we are hopeful that this trend will continue. Such optimism may rekindle interest in the IPO market. New issues over the past few months have been virtually non existent and it is important that this market revives as it is an important source of new investments to build up our qualifying holdings.
Michael Barnard
29 June 2009
Investment Portfolio
Security Cost Valuation %
28/02/2009
Qualifying Investments 9,595,806 3,481,590 72.33
Non-qualifying Investments 2,159,909 1,065,494 22.14
Uninvested funds 266,328 266,328 5.53
12,022,043 4,813,412 100.00
Qualifying Investments
AIM Quoted
Tristel plc 167,333 157,500 3.27
PHSC plc 182,910 63,000 1.31
DCD Media plc 555,263 89,250 1.85
SectorGuard plc 175,875 75,000 1.56
K3 Business Technology Group 180,900 116,000 2.41
Belgravium Technologies 281,400 35,000 0.73
TMN Group 213,311 18,318 0.38
Healthcare Locums plc 82,913 171,000 3.55
ILX Group 753,750 175,000 3.64
Lighthouse Group plc 203,513 161,250 3.35
AT Communications Group 422,100 135,000 2.80
Invocas Group plc 100,400 41,400 0.86
Jelf Group plc 157,132 71,537 1.49
Relax Group 289,440 115,200 2.39
Brulines (Hldgs) plc 40,175 35,100 0.73
HML Holdings plc 351,549 62,000 1.29
CBG Group plc 99,947 112,125 2.33
Bglobal plc 100,500 26,000 0.54
Coolabi plc 164,711 86,600 1.80
IS Pharma 241,200 198,857 4.13
Western & Oriental plc 502,500 175,000 3.64
EBTM plc 640,888 28,000 0.58
Essentially Group plc 155,776 20,000 0.42
Cantono plc 402,000 2,000 0.04
Sport Media Group 125,625 6,250 0.13
Southern Bear plc 633,150 215,000 4.47
Kurawood plc 150,750 2,250 0.05
Clerkenwell Ventures 100,500 81,333 1.69
Boomerang Plus plc 238,185 142,500 2.96
Fishworks plc 180,900 - 0.00
Optare plc 64,320 20,267 0.42
Advanced Computer Software 402,000 482,353 10.02
Cyan Holdings plc 100,500 40,000 0.83
8,461,412 3,160,090 65.65
Security Cost Valuation %
28/02/2009
Plus Markets Quoted
CKS Group plc 526,369 - 0.00
Air Touring 201,000 120,000 2.49
General Medical Clinics plc 205,020 166,500 3.46
St Helens Capital plc 202,005 35,000 0.73
1,134,394 321,500 6.68
Total qualifying investments 9,595,806 3,481,590 72.33
Security Cost Valuation %
28/02/2009
Non-qualifying Investments
AIM Quoted
Hallin Marine Subsea Int 19,296 32,850 0.68
Eservglobal Ltd 46,230 37,875 0.79
Arbuthnot Banking Group 45,207 19,000 0.39
Commodity Growth plc 150,750 37,500 0.78
DCD Media plc 40,200 5,250 0.11
Education Development Int 3,665 24,400 0.51
Bond Intl. Software 14,070 4,991 0.10
Velosi Ltd 22,613 9,000 0.19
Impact Holdings (UK) plc 26,160 1,200 0.02
Hightex Group plc 53,318 13,231 0.27
STM Group plc 50,250 41,000 0.85
NetDimensions Ltd 31,155 4,750 0.10
Ashley House plc 79,286 35,000 0.73
Microemissive Displays 56,067 - 0.00
Premier Farnell 44,542 36,000 0.75
Private & Commercial 17,688 8,800 0.18
Neutrahealth plc 30,459 10,000 0.21
DCD Media plc 101,023 97,200 2.02
Sanderson Group 92,521 28,750 0.60
Eco City Vehicles 62,116 37,800 0.79
Pactolus Hungarian Prop. 49,749 27,000 0.56
Purecircle Ltd 29,045 27,285 0.57
Shed Media plc 19,755 20,100 0.42
Vyke Communications plc 27,877 9,600 0.20
Cantono plc 40,400 38,000 0.79
1,153,442 606,582 12.60
UK listed
EAGA plc 22,801 20,250 0.42
HBOS plc 143,735 49,750 1.03
Norcros plc 45,225 4,437 0.09
Superglass Hldgs plc 31,356 2,400 0.05
Investec 477,227 92,250 1.92
Record plc 30,150 11,625 0.24
750,494 180,712 3.75
Plus Markets Quoted
China Eastsea Bus. Software 40,200 28,000 0.58
UK Govt loans
Treasury 2 1/2% 2009 215,773 250,200 5.20
Total non-qualifying investments 2,159,909 1,065,494 22.14
Uninvested Cash 266,328 266,328 5.53
12,022,043 4,813,412 100.00
Top Ten Investments
Security Cost Valuation %
28/02/2009
Non-qualifying Investments
AIM Quoted
Hallin Marine Subsea Int 19,296 32,850 0.68
Eservglobal Ltd 46,230 37,875 0.79
Arbuthnot Banking Group 45,207 19,000 0.39
Commodity Growth plc 150,750 37,500 0.78
DCD Media plc 40,200 5,250 0.11
Education Development Int 3,665 24,400 0.51
Bond Intl. Software 14,070 4,991 0.10
Velosi Ltd 22,613 9,000 0.19
Impact Holdings (UK) plc 26,160 1,200 0.02
Hightex Group plc 53,318 13,231 0.27
STM Group plc 50,250 41,000 0.85
NetDimensions Ltd 31,155 4,750 0.10
Ashley House plc 79,286 35,000 0.73
Microemissive Displays 56,067 - 0.00
Premier Farnell 44,542 36,000 0.75
Private & Commercial 17,688 8,800 0.18
Neutrahealth plc 30,459 10,000 0.21
DCD Media plc 101,023 97,200 2.02
Sanderson Group 92,521 28,750 0.60
Eco City Vehicles 62,116 37,800 0.79
Pactolus Hungarian Prop. 49,749 27,000 0.56
Purecircle Ltd 29,045 27,285 0.57
Shed Media plc 19,755 20,100 0.42
Vyke Communications plc 27,877 9,600 0.20
Cantono plc 40,400 38,000 0.79
1,153,442 606,582 12.60
UK listed
EAGA plc 22,801 20,250 0.42
HBOS plc 143,735 49,750 1.03
Norcros plc 45,225 4,437 0.09
Superglass Hldgs plc 31,356 2,400 0.05
Investec 477,227 92,250 1.92
Record plc 30,150 11,625 0.24
750,494 180,712 3.75
Plus Markets Quoted
China Eastsea Bus. Software 40,200 28,000 0.58
UK Govt loans
Treasury 2 1/2% 2009 215,773 250,200 5.20
Total non-qualifying investments 2,159,909 1,065,494 22.14
Uninvested Cash 266,328 266,328 5.53
12,022,043 4,813,412 100.00
Security Cost Valuation %
28/02/2009
Advanced Computer Software 402,000 482,353 10.02
Treasury 2 1/2% 2009 215,773 250,200 5.20
Southern Bear plc 633,150 215,000 4.47
IS Pharma 241,200 198,857 4.13
ILX Group 753,750 175,000 3.64
Western & Oriental plc 502,500 175,000 3.64
Healthcare Locums plc 82,913 171,000 3.55
Lighthouse Group plc 203,513 161,250 3.35
General Medical Clinics plc 205,020 166,500 3.46
Tristel plc 167,333 157,500 3.27
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 28 February 2009.
Activities and status
The principal activity of the company during the period 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 on page 6 give a review of developments during the year and of future prospects.
The directors have managed the affairs of the company so that during the year it attained the requirements for full approval 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.
Results and dividend
Year to Year to
28 February 2009 29 February 2008
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
Return on ordinary activities 130 (5,726) 79 (1,680)
after taxation
Appropriated as follows:
Interim dividend paid
Revenue - nil p - - - -
Capital - nil p - - - -
Final dividend paid in respect
of prior period
Revenue - 1.90p (0.70p) per share (174) - (60) -
Capital - nil p per share - - - -
Transfers to reserves (44) (5,726) 19 (1,680)
The directors propose a final dividend of 0.19p per share for the year ended 28 February 2009 to be paid on 17 September 2009 to shareholders on the register at 5 September 2009.
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 ended28 February Year ended29 February
2009 2008or date
of appointment,if
earlier
John Roger Simpson Brice - 400,000
(resigned 28 August 2008)
Michael David Barnard 1,518,910 450,000
Geoffrey Gamble 240,000 279,000
Robin Kirby (resigned - 35,000
22 May 2009)
Peter William Riley 43,000 43,000
All of the directors' share interests shown above are held beneficially. There have been no changes in the directors' share interests between 28 February 2009 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, is Mr Barnard, 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 3 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 26 June 2009 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 1,518,910 16.6%
John Brice 400,000 4.4%
Peter Steyne 400,000 4.4%
David Trotman 400,000 4.4%
Roger Carey 285,616 3.1%
Pauline Wicking 280,720 3.1%
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.
Annual general meeting
Notice of the annual general meeting is set out on pages 34 and 35.
Auditors
In accordance with Section 385 of the Companies Act 1985, 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.
By Order of the Board
Michael Barnard 29 June 2009
Directors' Remuneration Report
The Board has prepared this report in accordance with the requirements of Schedule 7A to the Companies Act 1985. A resolution to approve this report will be put to the members at the Annual General Meeting to be held on 30 July 2009.
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. It is expected that 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 29 February 2008 and 28 February 2009 are set out in the Financial Summary.
By Order of the Board
Michael Barnard
Corporate Governance
The directors support the relevant principles of the Combined Code issued in June 2006 by the Financial Reporting Council, being the principles of good governance and the code of best practice as set out in Section 1 of the Combined Code annexed to the Listing Rules of the Financial Services Authority.
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:
4 full board meetings 2 Audit Committee meetings
All directors attended all All members attended with the
meetings with theexception exception of MrGamble
of Mr Brice and Mr Riley on oneoccasion
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. 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 Services 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 Combined 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 accounts 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 19.
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 Turnbull guidance.
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 forty-eight Combined Code provisions throughout the accounting year. The preamble to the Combined 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 28 February 2009 with the provisions set out in Section 1 of the Combined Code.
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 1985. 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.
Statement of disclosure to auditors
So far as the directors are aware:
Independent Auditors' Report to the members ofNew Century AIM VCT plc
We have audited the financial statements of New Century AIM VCT plc for the year ended 28 February 2009 which comprise the income statement, the balance sheet, the cash flow statement and the related notes 1 to 23. These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the part of the Directors' Remuneration report that is described as having been audited.
This report is made solely to the company's members, as a body, in accordance with section 235 of the Companies Act 1985. 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.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements and the part of the Directors' Remuneration Report to be audited in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Directors' Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you whether, in our opinion, the information in the Directors' Report is consistent with the Financial Statements.
In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and transactions is not disclosed.
We review whether the Corporate Governance Report reflects the company's compliance with the nine provisions of the 2006 Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Company's corporate governance procedures or its risk and control procedures.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Directors' Report, the unaudited part of the Directors' Remuneration Report, the Investment Manager's Report, the Corporate Governance Report, the Investment Portfolio, the Top Ten Investments and the Chairman's Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances of the company, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Directors' Remuneration Report to be audited.
Opinion
In our opinion:
-- the financial statements give a true and fair view in accordance with
United Kingdom Generally Accepted Accounting Practice, of the state of
the company's affairs as at 28 February 2009 and of the total return
for the year then ended;
-- the financial statements and the part of the Directors' Remuneration
Report to be audited, have been properly prepared in accordance with
the Companies Act 1985; and
-- the information given in the Directors' Report is consistent with the
financial statements.
UHY Hacker Young LLP 29 June 2009
Chartered Accountants and Registered Auditors
Quadrant House
4 Thomas More Square
London E1W 1YW
Income Statement (incorporating the revenue account) for the year to 28 February 2009
Year ended28 February 2009 Year ended29 February 2008
Notes Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses)
oninvestments
- realised - 178 178 - 1,677 1,677
- unrealised - (5,853) (5,853) - (3,273) (3,273)
Income 2 206 - 206 166 - 166
Investment 3 (17) (52) (69) (34) (104) (138)
management
fee
Other 4 (33) - (33) (33) - (33)
expenses
________ ________ ________ ________ ________ ________
Return on
ordinary
activities 156 (5,727) (5,571) 99 (1,700) (1,601)
before
taxation
Tax
(charge)/credit
on
ordinary 6 (26) 26 - (20) 20 -
activities
________ ________ ________ ________ ________ ________
Return 130 (5,701) (5,571) 79 (1,680) (1,601)
on
ordinaryactivities
after
taxation
======= ======= ======= ======= ======= =======
Return per 8 1.44 (62.99) (61.55) 0.93 (19.85) (18.92)
ordinary
share(pence)
======= ======= ======= ======= ======= =======
The notes on pages 24 to 32 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 no statement of total recognised gains and losses has been prepared.
Balance Sheet at 28 February 2009
Year ended Year ended
28 February 2009 29 February 2008
Note GBP'000 GBP'000
Fixed assets
Investments 9 4,547 9,206
Current assets
Debtors 12 266 591
Current liabilities
Creditors: amounts falling 13 (14) (24)
due within one year
4,799 9,773
Capital and reserves
Called up share capital 14 915 846
Share premium 15 8,236 7,534
Capital reserve - realised 15 2,831 2,705
Capital reserve - unrealised 15 (7,201) (1,374)
Revenue reserve 15 18 62
Total equity shareholders' 16 4,799 9,773
funds
Net asset value per 17 53p 115p
ordinary share
Cash Flow Statement for the year to 28 February 2009
Note Year ended Year ended
28 February 2009 29 February 2008
GBP'000 GBP'000
Net cash outflow from 19 (60) (174)
operating activities
Returns on investments
Interest received 18 86
Investment income 136 80
154 166
UK Corporation Tax paid - -
Dividend paid (174) (60)
Capital expenditure &
financial investment
Sale of investments 1,249 3,545
Purchase of investments (2,265) (5,414)
Net cash inflow/(outflow) (1,016) (1,869)
for capitalexpenditure
& financial investment
Net cash outflow (1,096) (1,937)
Share issue
Ordinary shares 771 -
Decrease in uninvested (325) (1,937)
funds with broker
Notes to the Financial Statements for the year to 28 February 2009
1.Accounting policies
General
The financial statements have been prepared in accordance with applicable United Kingdom law and accounting policies and the Statement of Recommended Practice "Financial Statements of Investment Trust Companies". The accounts have been prepared under the historical cost convention, as modified to include the revaluation of fixed asset investments.
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.
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 financial statements. 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.
2. Income
Year ended Year ended
28 February 29 February
2009 2008
GBP'000 GBP'000
Interest receivable
- listed fixed interest securities 3 16
- bank deposits and liquid funds 15 70
18 86
Dividends receivable 136 80
Investment income 154 166
Other income 52 -
206 166
3.Investment management fees
Year ended28 February2009 Year ended 29 February 2008
RevenueGBP'000 CapitalGBP'000 RevenueGBP'000 CapitalGBP'000
Investment 17 52 34 104
management
fees
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 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 31 March, 30 June, 30 September and 31 December. 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.
Notes to the Financial Statements for the year to 28 February 2009
4.Other expenses
Year Year
ended28 ended29 February2008GBP'000
February2009GBP'000
Auditors' remuneration
- for audit services 7 6
- for tax services 5 6
12 12
5. Directors' remuneration
No remuneration has been paid or is payable for year to 28 February 2009, this is also true for the prior year.
6.Tax charge/(credit) on ordinary activities
Year ended28 February2009 Year ended 29 February2008
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 26 (26) 19 (19)
tax
based on the
taxable profitfor
the year
Factors affecting
tax
charge for
the year
Return on 156 (5,727) 99 (1,700)
ordinary
activities
before taxation
Tax on above 33 (1,203) 19 (323)
at the
small company
rate of 21%(2008:
20%)
UK dividends (28) - (15) -
not subject
to corporation
tax
Capital loss on - 1,177 - 303
investment
Non allowable - - - -
expenses
Unutilised losses 21 - 16 -
Current 26 (26) 20 (20)
tax
charge/(credit)
for the year
7.Dividends
Year Year
ended28 ended29 February2008GBP'000
February2009GBP'000
Interim dividend paid - -
Final dividend paid 174 60
in respect
of previous year
174 60
The directors propose a final dividend of 0.19p per share for the year ended 28 February 2009 to be paid on 17 September 2009 to shareholders on the register at 5 September 2009.
8.Return per ordinary share
The revenue return, per ordinary share, is based on the net revenue on ordinary activities after taxation of GBP130,243 (2008: GBP78,928) and on 9,050,248 (2008: 8,464,500) 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 loss of GBP5,700,908 (2008: GBP1,680,384) and on 9,050,248 (2008: 8,464,500) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
9.Fixed asset investments
Year ended 28 February Year ended 29 February 2008GBP'000
2009GBP'000
UK Govt loans 250 -
UK Listed 181 534
AIM 3,767 7,306
PLUS Markets 349 1,366
4,547 9,206
Movements in investments, including realised and unrealised gains and losses, during the year are summarised as follows:
Year ended 28 February 2009
UK Govt loans UK listed AIM Plus Mkts Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Valuation - 534 7,306 1,366 9,206
at
1 March
2008
Purchases 944 38 1,283 - 2,265
at cost
Sales (743) (36) (470) - (1,249)
proceeds
Realised 15 3 160 - 178
gains/(losses)
Unrealised 34 (358) (4,512) (1,017) (5,853)
gains/(losses)
Valuation 250 181 3,767 349 4,547
at 28
February
2009
Cost at 1 - 746 8,642 1,174 10,562
March
2008
Purchases 944 38 1,283 - 2,265
Sales (743) (36) (470) - (1,249)
proceeds
Realised 15 3 160 - 178
gains/(losses)
Cost at 216 751 9,615 1,174 11,756
28
February
2009
Valuation - - 7,803 1,131 8,934
at
1 March
2007
Purchases - 746 4,466 202 5,414
at cost
Sales - - (3,546) - (3,546)
proceeds
Realised - - 1,677 - 1,677
gains/(losses)
Unrealised - (212) (3,094) 33 (3,273)
gains/(losses)
Valuation - 534 7,306 1,366 9,206
at 29
February
2008
Cost at 1 - - 6045 972 7,017
March
2007
Purchases - 746 4,466 202 5,414
Sales - - (3,546) - (3,546)
proceeds
Realised - - 1,677 - 1,677
gains/(losses)
Cost at - 746 8,642 1,174 10,562
29
February
2008
The overall gain on investments for the years shown are in the Income Statement is analysed as follows:
Year Year
ended28 February2009GBP'000 ended
29 February2008GBP'000
Net realised gain 178 1,677
on disposal
Increase/(decrease) (5,853) (3,273)
in unrealised
appreciation
(5,675) (1,596)
10.Venture capital investments
A full list of investments held is disclosed under Investment Portfolio.
11.Significant interests
The Company did not hold more than 10% of the allotted equity share capital of any class of any investee company.
12.Debtors
Year Year
ended ended 29 February2008GBP'000
28 February2009GBP'000
Uninvested funds
with broker:
MD Barnard & Co Ltd
266 591
13.Creditors: amounts falling due within one year
Year Year
ended ended 29 February2008GBP'000
28 February2009GBP'000
Trade creditors 14 24
and accruals
UK Corporation Tax - -
14 24
14.Share capital
Year ended 28 February Year ended 29 February
2009GBP'000 2008GBP'000
Authorised
15,000,000 ordinary 1,500 1,500
shares of 10p each
Allotted, called up
and fully paid
9,147,199 (8,464,500) 915 846
ordinary
shares of 10p
15.Reserves
SharePremiumaccount Capitalrealised Capitalunrealised Revenuereserve
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March 7,534 2,705 (1,374) 62
2008
Share issue 702 - - -
Realised gains - 178 - -
on disposals
Unrealised - - (5,853) -
losses
Net revenue - - - 156
Investment - (52) - -
management
fee
Corporate - - 26 (26)
taxation
Dividends paid - - - (174)
At 28 February 8,236 2,831 (7,201) 18
2009
16.Reconciliation of movements in shareholders' funds
GBP'000
At 1 March 2008 9,773
Share Issue 771
Return on ordinary activities after tax (5,571)
Dividend paid (174)
At 28 February 2009 4,799
17.Net asset value per share
Net asset value per share is based on net assets at 28 February 2009 of GBP4,799,036 (29 February 2008 of GBP9,772,801) and on a weighted average of 9,050,248 and 8,464,500 ordinary shares in issue at those dates respectively.
18.Net cash outflow from operating activities
Year ended28 February2009 Year
GBP'000 ended28 February2008GBP'000
Operating activity
Operating profit (5,571) (1,601)
Profit on sale (178) (1,677)
of investments
Investment income (154) (166)
Unrealised 5,853 3,274
losses/(gains)
on investments
(Decrease)/increase (10) (4)
in creditors
(60) (174)
19.Risk management and financial instruments
A statement of the company's principal objectives is given on page 1. 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.
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 company has not made any loans to investee companies.
Currency risk
The company's assets and liabilities are denominated in sterling.
Financial assets
The interest rate profile of the company's financial assets is set out below:
Year Year
ended ended 29 February2008GBP'000
28 February2009GBP'000
Floating rate 266 591
Fixed rate 250 -
Non-interest bearing 4,297 9,206
4,813 9,797
Fixed rate assets Year ended Year ended
28 February 29 February
2009GBP'000 2008GBP'000
Weighted average 2.5% 10%
interest rate
Weighted average years 1 9
to maturity
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.
20.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 3.
21.Capital commitments
There were no investments which were approved at the year end but which had not completed.
22.Control
New Century AIM VCT plc is not under the control of any one party or individual.
23.Post balance sheet events
Subsequent to the year end the following companies in the company's investment portfolio have gone into administration:
Investment Valuation at 28 February 2008GBP
Cantono plc 40,000
EBTM plc 28,000
AT Communications Group 135,000
As the companies went into administration following the year end the permanent diminution in values has been treated as a non-adjusting event.
Shareholder Information for the year to 28 February 2009
The Company
New Century AIM VCT PLC was incorporated on 4 February 2005. In March 2005, the company obtained a listing on the London Stock Exchange. A total of GBP8.465 million was raised (before expenses) through an offer for subscription of new ordinary shares at 100p. The company has now reached the end of its provisionally approved period and now complies with the full requirements for approval.
The Investment Manager
New Century AIM VCT 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 investment trust, unit trust and venture capital funds totalling approximately GBP30 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 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. Conversely, losses on VCT shares are not allowable to offset against taxable gains.
The company has now 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 August 2008
Interim report for six months to 31 August 2008 published October 2008
Preliminary announcement of results June 2009
for the year to 28 February 2009
Annual General Meeting 2009 30 July 2009
Share price
The mid-market price of shares in New Century AIM VCT PLC is available daily on the London Stock Exchange website (www.londonstockexchange.com).