New Cent.2 Regulatory News (NCA2)

28 Apr 2009 13:19

New Century AIM VCT2 plc		31st December 2008
Audited Report and Accounts forthe year to 31st December 2008

Financial Summary

		Year ended31 December 2008			Period ended31 December 2007
Revenue return per share (pence) for the year		0.98			0.89
Total return per share (pence) for the year		(47.09	)		(7.67	)
Proposed dividends per share (pence)		0.83			0.80
Net asset value per share (pence)		45			93
Cumulative value of shareholder investment (net assetvalue plus cumulative dividends per share) (pence)		45.8			93
Shareholders' funds (£'000)		2,581			5,332

Investment Objective

New Century AIM VCT2 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 31st, December, 2008, the FTSE AIM Index tumbled by 62.4%. Thus, while it is disappointing that the net asset value of your fund declined by 51.6% over the period, the fall should be judged in the context of the general weakness of the AIM market. Qualifying investments, now represent just over 56% of the total, well on the way to the 70% minimum requirement required by April, 2010. We propose to pay out all our revenue reserves as a dividend, which equates to 0.83p per share compared to 0.8p in the previous year.

There are signs that the AIM market is beginning to recover. By the 6th April, 2009, the FTSE AIM Index had moved up by 12.6% from its low point. Even after this rise, a recovery to the July 2007 heights would represent an increase of 3.3 times, which demonstrates the potential for recovery.

I am pleased to report that we have managed to reduce the annual expenses from £37,000 to £31,000. I would like to thank all the shareholders that helped in reducing our expenses by agreeing to have their reports sent by e-mail. Should you have not already done so, and would be prepared to receive your results on line, could you please contact Alison or Jackie on 01268 493333.

Finally, I would like to thank the management team for their hard work during this difficult period.

Annual General Meeting

The AGM will be held at 11.30 am on Friday 22 May 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

24th April, 2009

Details of Directors

Michael Barnard (Aged 58)

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 £115 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.

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.

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.

Management and Administration

Registered Office		4th Floor,150-152 Fenchurch StreetLondonEC3M 6BB
Company Secretary		Graham Kenneth Urquhart FCIS4th Floor,150-152 Fenchurch StreetLondonEC3M 6BB
Registrar		Neville Registrars LimitedNeville House18 Laurel LaneHalesowenWest MidlandsB63 3DA
Solicitors		Dundas & Wilson5th Floor, Northwest WingBush HouseAldwychLondonWC2B 4EZ
Investment Manager and Broker		M D Barnard & Company Limited17-21 New Century RoadLaindon, EssexSS15 6AG
Auditor & VCT Status Adviser		UHY Hacker Young LLPQuadrant House17 Thomas More StreetThomas More SquareLondonE1W 1YW
Bankers		Bank of ScotlandNew Uberior House11 Earl Grey StreetEdinburghEH3 9BN

Directors

Geoffrey Gamble (Chairman)

Michael David Barnard

Robin Kirby

Peter William Riley

All directors are non-executive.

Audit Committee:

Geoffrey Gamble (Chairman)

Robin Kirby

Peter William Riley

Investment Manager's Review

The FTSE AIM Index started 2008 at 1049.1. By the end of the year it had slumped to 394.32, a massive decline of 62.4%. While the fall of 51.7% in the value of your fund over the year is, without doubt, disappointing, the performance should be viewed in the context of the AIM Market as a whole.

It is true to say that many companies quoted on AIM have been finding trading conditions difficult due, primarily, to a downturn in consumer demand and to the credit crunch. Nevertheless, the results of many companies within AIM have shown improvements or just minor setbacks, yet still their share prices have fallen sharply. This has been largely due to an almost complete lack of buyers which has meant that just a small amount of selling can lead to a disproportionate fall in share price. The result of this is that many of the holdings represented within your fund are now standing on p/e ratios of under 5.

The current apathy towards the shares of smaller companies will not last forever. The situation with banks is still uncertain but on the consumer front, the outlook is much improved. The sharp fall in oil prices should feed through to production and distribution costs. Manufacturing costs will be aided by sharp falls in raw material prices. Already, consumers will have noticed a big reduction in petrol costs. British Gas has just announced a cut in gas prices and the recent fall in interest rates will all help to increase the levels of disposable income.

In recent months, the FTSE AIM Index has stabilised. Even if it takes 20 years for this index to reach its high of July 2007, this would represent a return of over 12.5 % each year (excluding compounding) for the next twenty years. Not a bad return when you consider the current rates of return from the banks. I firmly believe the recovery will come much more quickly and that the VCT net asset value will benefit as a result.

Despite the difficult market conditions during the year under review, I am pleased to report that we did manage to achieve an overall net profit from realisations. We sold half our holding in Corac at a useful profit and Sirvis IT benefited from a takeover. Countering these gains was a loss on Mediasurface which did not live up to management expectations.

Fortunately, our concentration on investment in established, profitable companies has put your fund in good stead. Nevertheless, since the inception of the fund, we have introduced a few investments in loss making companies, where we perceived an exciting future, particularly if such companies were involved in fast growing businesses with potential for dynamic growth. Such companies rely on capital to take them through the development and marketing stages prior to profitabilty. The credit crunch and shortage of equity funding meant that the finance to bring such companies through the early stages of their life was generally not available. Sadly, CKS, EBTM, Fishworks and Microemissive all fell victim to a lack of finance and went into administration. We have been proactive in trying to help the companies that have suffered from financing problems, often in conjunction with other VCT investor companies. However, we have had to make some painful decisions and in the case of the companies that have failed, we decided that the risks were too high to justify adding fresh funds. On a more positive note, we have participated with other VCT's in a refinancing of Cantono and a reorganisation of DCD.

Our intention is to continue to diversify the fund in order to reduce risk. We hold investments in some very well run companies and I do feel sure that these will prosper when the eventual recovery in the AIM market materialises.

Michael Barnard

24th April 2009

Investment Portfolio

Security		Cost		Valuation		%
				31/12/2008
Qualifying Investments		3,723,465		1,466,963		56.55
Non-qualifying Investments		1,980,067		1,088,248		41.95
Uninvested funds		38,707		38,707		1.50
		5,742,239		2,593,918		100.00
Qualifying Investments
AIM Listed
St Helens Capital plc		151,504		37,500		1.45
Bglobal plc		170,850		40,800		1.57
Coolabi plc		193,694		100,000		3.86
IS Pharma plc		301,500		278,571		10.74
Western & Oriental plc		30,150		17,250		0.67
EBTM plc		471,420		150,000		5.77
Essentially Group plc		145,726		46,774		1.80
Cantono plc		301,500		7,500		0.29
HML Holdings plc		271,350		85,000		3.28
Clerkenwell Ventures		100,500		74,666		2.88
Sport Media Group plc		125,625		11,667		0.45
Southern Bear		301,500		93,750		3.61
Kurawood plc		150,750		2,250		0.09
Boomerang Plus plc		238,185		214,500		8.27
Corac Group plc		73,868		28,000		1.08
Advanced Computer Software		201,000		188,235		7.26
Cyan Holdngs plc		50,250		25,000		0.96
Cantono plc		40,400		38,000		1.46
		3,319,772		1,439,463		55.49
Plus Markets Quoted
CKS Group plc		366,323		0.00		0.00
General Medical Clinics plc		37,371		27,500		1.06
		403,694		27,500		1.06
Total qualifying investments		3,723,466		1,466,963		56.55
Security		Cost		Valuation		%
				31/12/2008
Non-qualifying Investments
AIM Listed
K3 Business Technology		34,972		15,000		0.58
NetDimensions Ltd		31,155		3,625		0.14
Ashley House plc		39,644		16,500		0.64
Microemissive Displays		49,046		800		0.03
Private & Commercial		17,688		10,000		0.39
DCD Media		60,300		12,375		0.48
Neutrahealth plc		30,459		6,250		0.24
Eco City Vehicles		15,530		11,250		0.43
ILX Group		30,099		10,000		0.39
Sanderson Group		58,231		25,200		0.97
Pactolus Hungarian Prop		10,616		7,500		0.29
Education Dev Int		17,383		18,000		0.69
Lincat Group plc		30,806		15,875		0.61
Fishworks plc		30,150		7,500		0.29
Purecircle Ltd		29,045		32,980		1.27
AT Communications Group		41,815		11,500		0.44
Tristel plc		164,820		152,000		5.86
Shed Media plc		19,755		18,000		0.69
China Eastsea Business Software		12,564		3,250		0.13
Vyke Communications plc		24,746		7,500		0.29
		748,824		385,105		14.85
UK listed
EAGA plc		22,801		21,600		0.83
HBOS plc		216,165		126,750		4.89
Norcros plc		31,356		2,000		0.08
Superglass Hldgs plc		45,225		5,750		0.22
Investec		477,227		115,250		4.44
Record plc		30,150		13,313		0.51
Celsis International		30,705		29,000		1.12
		853,629		313,663		12.09
UK Govt loans
Treasury 21/2% 2011		377,616		389,480		15.01
Total non-qualifying investments		1,980,069		1,088,248		41.95

Top Ten Investments

Security		Cost		Valuation		%
				31/12/2008
Treasury 21/2% 2011		377,616		389,480		15.02
IS Pharma plc		301,500		278,571		10.74
Boomerang Plus plc		238,185		214,500		8.27
Advanced ComputerSofware		201,000		188,235		7.26
Tristel plc		164,820		152,000		5.86
EBTM plc		471,420		150,000		5.78
HBOS plc		216,165		126,750		4.89
Investec		477,227		115,250		4.44
Coolabi plc		193,694		100,000		3.86
Southern Bear		301,500		93,750		3.61

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 31 December 2008.

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 4 April 2007 and has been granted provisional approval by the Inland Revenue as a Venture Capital Trust. The Chairman's Statement and the Investment Manager's Review at the beginning of this release give a review of developments during the year and of future prospects.

The directors have managed the affairs of the company with the intention that it will qualify for approval by the Inland Revenue as a Venture Capital Trust for the purposes of Section 842AA of the Income and Corporation Taxes Act 1988 ('the Act'). The directors consider that the company was not at any time up to the date of this report a close company within the meaning of Section 414 of the Act.

Results and dividend

		Year to31 December 2008				Period to31 December 2007
		Revenue		Capital		Revenue		Capital
		£000		£000		£000		£000
Return on ordinary activities after taxation		56		(2,761)		40		(382)
Appropriated as follows:
Interim dividend paid
Revenue - nil p		-		-		-		-
Capital - nil p		-		-		-		-
Final dividend paid in respect of prior period
0.80p per share		(46)		-		-		-
Transfers to reserves		10		(2,761)		40		(382)

The directors propose a final dividend of .83p per share for the year ended 31 December 2008 to be paid on 17 July 2009 to shareholders on the register at 10 July 2009.

Directors

The directors of the company who served all throughout the period and their interests in the issued ordinary shares of 10p of the company are as follows:

		Year ended31 December 2008		Period ended28 December 2007
John Roger Simpson Brice
(resigned 28 August 2008)		50,000		50,000
Michael David Barnard		200,000		200,000
Geoffrey Gamble		176,000		176,000
Robin Kirby		-		-
Peter William Riley		3,000		3,000

All of the directors' share interests shown above are held beneficially. There have been no changes in the directors' share interests between 31 December 2008 and the date of this report.

Brief biographical notes on the directors are given at the beginning of this release. 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 have 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 31 December 2008, the following individual shareholdings represented, during the year under review and at the date of this report, 3 per cent or more of the company's issued share capital:

MD Barnard				200,000
DM Trotman				200,000
RS Like				200,000
JR Atkinson				200,000
J Beddoe				200,000
T Phanos				200,000
IA Houston				200,000
A Lanza				200,000
G Gamble				176,000

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 at the end of this release.

Auditors

In accordance with Section 489 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.

By Order of the Board

Michael Barnard

24th April 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 22 May 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 period 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 31 December 2008 and 31 December 2007 are set out in the Financial Summary at the beginning of this release.

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 and who have had relevant experience with quoted companies prior to their appointment. The Chairman is Geoffrey Gamble. Biographical details of all Board members at the beginning of this release.

One third of the Directors are subject to re-election at each AGM by rotation.

During the period the following were held:

4 full board meetings		2 Audit Committee meetings
All directors attended all meetings withthe exception of Messrs Brice, Gamble, Kirby andRiley on one occasion.		All members attended with the exception of MrKirby on one occasion.

All directors had relevant experience with quoted companies prior to their appointment and it was therefore not thought necessary to provide further training in respect of their obligations and duties.

The Board has also established procedures whereby directors wishing to do so in the furtherance of their duties may take independent professional advice at the company's expense.

All directors have access to the advice and services of the Company Secretary. The Company Secretary provides the Board with full information on the company's assets and liabilities and other relevant information requested by the Chairman, in advance of each Board meeting.

The Board believes that it presents a balanced and understandable assessment of the company's position and prospects. The Audit Committee meets at least once a year. Under the chairmanship of a non-executive director, its membership comprises all the non-executive directors with the exception of the representative of the investment manager. During the year the Audit Committee was chaired by Mr Brice, following Mr Brice's resignation 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 period Messrs UHY Hacker Young LLP continued to act as auditors, and reviewed the internal financial controls including those of the investment manager in the course of which a risk assessment was considered. 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 below, and a statement by the auditors about their reporting responsibilities is set out in the Auditors' Report following.

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 period to 31 December 2008 with the provisions set out in Section 1 of the Combined 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 Combined Code issued in June 2006. The board consider that Messrs. Gamble, Kirby and Riley 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 Combined 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 John Geoffrey Gamble, Chairman of the Board of directors, whom the board regard as independent despite recommendations to the contrary in the Combined Code due to his being Chairman of the Board of directors.

8. The non-executive directors do not have service contracts, whereas the recommendation is for fixed term renewable contracts.

9. The company has no major shareholders so shareholders are not given the opportunity to meet any new non-executive directors at a specific meeting other than the annual general meeting.

Statement of directors' responsibilities

United Kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the revenue of the company for that period. In preparing those financial statements, the directors are required to:

select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for ensuring that proper accounting records are kept, which disclose with reasonable accuracy at any time the financial position of the company, enabling them to ensure that the financial statements comply with the Companies Act 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:

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.

Independent Auditors' Report to the members of New Century AIM VCT2 plc

We have audited the financial statements of New Century AIM VCT2 plc for the year ended 31 December 2008 which comprise the income statement, the balance sheet, the cash flow statement and the related notes 1 to 24. 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 31 December 2008 and of the total return for the period 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		24th April 2009
Chartered Accountants and Registered Auditors
Quadrant House
17 Thomas More Street
Thomas More Square
London E1W 1YW

Income Statement (incorporating the revenue account)

for the year to 31 December 2008

				Year ended31 December 2008						Period ended31 December 2007
		Notes		Revenue£'000		Capital£'000		Total£'000		Revenue£'000		Capital£'000		Total£'000
Gains/(losses) on investments
- realised				-		77		77		-		8		8
- unrealised				-		(2,800)		(2,800)		-		(347)		(347)
Income		2		95		-		95		96		-		96
Investment management fee		3		(10)		(29)		(39)		(13)		(39)		(52)
Other expenses		4		(31)		-		(31)		(37)		-		(37)
				________		________		________		________		________		________
Return on ordinary activities before taxation				54		(2,752)		(2,698)		46		(378)		(332)
Tax (charge)/credit onordinary activities		6		2		(9)		(7)		(6)		(4)		(10)
				________		________		________		________		________		________
Return on ordinary activities after taxation				56		(2,761)		(2,705)		40		(382)		(342)
				=======		=======		=======		=======		=======		=======
Return per ordinary share(pence)		8		0.98		(48.07)		(47.09)		0.89		(8.56)		(7.67)
				=======		=======		=======		=======		=======		=======

The notes at the end of this release 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 period. Other than that 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 31 December 2008

		Note		Year ended31 December 2008 £'000				Period ended 31 December 2007 £'000
Fixed assets
Investments		9				2,555				5,323
Current assets
Debtors		12				39				24
Current liabilities
Creditors: amounts falling due within oneyear		13				(13)				(15)
						2,581				5,332
Capital and reserves
Called up share capital		14				574				574
Share premium		15				5,100				5,100
Capital reserve - realised		15				48				-
Capital reserve - unrealised		15				(3,191)				(382)
Revenue reserve		15				50				40
Total equity shareholders' funds		16				2,581				5,332
Net asset value per ordinary share		17				45p				93p

These financial statements were approved by the Board of directors on 24th April 2009 and were signed on its behalf by:

Michael Barnard

Director

The notes at the end of this release form an integral part of these financial statements.

Cash Flow Statement

for the year to 31 December 2008

		Note		Year ended31 December 2008 £'000				Period ended 31 December 2007 £'000
Net cash outflow from operating activities		19				(62)				(83)
Returns on investments
Interest received				22				64
Investment income				66				32
						88				96
UK Corporation Tax paid						(10)				-
Dividend paid						(46)				-
Capital expenditure & financial investment
Sale of investments				1,159				1,033
Purchase of investments				(1,114)				(6,696)
Net cash inflow/(outflow) for capital expenditure & financial investment						45				(5,663)
Net cash inflow/(outflow)						15				(5,650)
Sources of finance
Share issue						-		574
Share premium account						-		5,100
Increase in uninvested funds with broker						15				24

The notes at the end of this release form an integral part of these financial statements.

Notes to the Financial Statements

for the year to 31 December 2008

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 is 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.

1. Accounting policies (continued)

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 31 December 2008 £'000			Period ended 31 December 2007£'000
Interest receivable
- listed fixed interest securities			5			20
- unquoted investment portfolio			-			-
- bank deposits and liquid funds			17			44
			22			64
Other income			7			-
Dividends receivable			66			32
			95			96

3. Investment management fees

		Year ended 31 December 2008				Period ended31 December 2007
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
Investment management fees		10		29		13		39

MD Barnard & Company Limited ( "MDB") provides investment management services to the company in respect of the company's portfolio of venture capital investments under an investment management agreement dated 12 March 2007. Michael Barnard who is a non-executive director of the company is the managing director and owner 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. During the period ended 31 December 2008, the fee payable to MD Barnard & Company equated to 1% per annum of net assets. No performance fee is payable.

The investment management agreement is for a minimum period of three years from 12 March 2007 terminable by either party at any time thereafter by one year's prior written notice.

4. Other expenses

		Year ended 31 December 2008 £'000		Period ended 31 December 2007£'000
Auditors' remuneration
-for audit services		6		6
-for tax services		3		3

5. Directors' remuneration

No remuneration has been paid or is payable for year to 31 December 2008 or in respect of the prior period.

6. Tax charge/(credit) on ordinary activities

		Year ended 31 December 2008				Period ended 31 December 2007
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
United Kingdom tax based on the taxable profit for the year		(2)		9		6		4
Factors affecting tax charge for the year
Return on ordinary activities before taxation		54		(2,752)		46		(378)
Tax on above at the small company rate of 20.75% (2007: 20%)		11		(571)		9		(76)
UK dividends not subject to corporation tax		(13)		-		(6)		-
Non taxable gains on investment		-		580		-		80
Non allowable expenses		-		-		3		-
Unutilised losses		-		-		-		-
Current tax charge/(credit) for the year		(2)		9		6		4

7. Dividends

		Year ended 31 December 2008 £'000		Period ended 31 December 2007£'000
Interim dividend paid		-		-
Final dividend paid in respect of previous year		46		-
		46		-

The directors propose a final dividend of 0.83 pence per share for the year ended 31 December 2008 to be paid on 17 July 2009 to shareholders on the register at 10 July 2009.

8. Return per ordinary share

The revenue return, per ordinary share, is based on the net revenue on ordinary activities after taxation of £56,754 (2007: £39,602) and on 5,745,553 (2007: 4,459,279) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

The capital return per ordinary share is based on a net realised and unrealised capital loss of (£2,762,353) (2007: £381,817) and on 5,745,553 (2007: 4,459,279) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

9. Fixed asset investments

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

		Year ended 31 December 2008
		Gilts		UK		AIM		Plus Mkts		Total
		£'000		£'000		£'000		£'000		£'000
At 1 January 2008 at cost		814		818		3,468		571		5,671
Purchases		405		35		674		-		1,114
Transfers		-		-		167		(167)		-
		1,219		853		4,309		404		6,785
Less: Sales		903		-		256		-		1,159
		316		853		4,053		404		5,626
Realised gains/losses		62		-		15		-		77
Cost at 31 December 2008		378		853		4,068		404		5,703
Unrealised gains/losses		12		(540)		(2,244)		(376)		(3,148)
		390		313		1,824		28		2,555
9. Fixed asset investments (continued)
		Period ended 31 December 2007
		Gilts		UK		AIM		Plus Mkts		Total
		£'000		£'000		£'000		£'000		£'000
At 1 April 2007		-		-		-		-		-
Purchases		1,587		1,023		3,515		571		6,696
Transfers		-		-		-		-		-
		1,587		1,023		3,515		571		6,696
Less: Sales		792		200		41		-		1,033
		795		823		3,474		571		5,663
Realised gains/losses		19		(5)		(6)		-		8
Cost at 31 December 2007		814		818		3,468		571		5,671
Unrealised gains/losses		37		(136)		(359)		110		(348)
		851		682		3,109		681		5,323

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

		Year ended 31 December 2008 £'000		Period ended 31 December 2007£'000
Net realised gain on disposal		77		8
Increase/(decrease) in unrealised appreciation		(2,800)		(348)
		(2,723)		(340)

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 ended 31 December 2008 £'000		Period ended 31 December 2007£'000
Uninvested funds with broker:
MD Barnard & Co Ltd		39		24

13. Creditors

		Year ended 31 December 2008 £'000		Period ended 31 December 2007£'000
Trade creditors and accruals		6		5
UK Corporation Tax		7		10
		13		15

14. Share capital

		Year ended 31 December 2008£'000		Period ended 31 December 2007£'000
Authorised
25,000,000 ordinary shares of 10p each		2,500		2,500
Allotted, called up and fully paid
5,745,550 ordinary shares of 10p each		574		574

15. Reserves

		SharePremiumaccount£'000		Capitalrealised £'000		Capitalunrealised £'000		Revenuereserve£'000
As at 1 January 2008		5,100		-		(382)		40
Realised gains on disposals		-		77		-		-
Unrealised gains/(losses)		-		-		(2,800)		-
Net revenue		-		-		-		54
Investment management fee		-		(29)		-		-
Corporate taxation		-		-		(9)		2
Dividends paid		-___________		-________		-________		(46)________
At 31 December 2008		5,100===========		48========		(3,191)========		50========

16. Reconciliation of movements in shareholders' funds

			£'000
At 1 January 2008			5,332
Return on ordinary activities after tax			(2,705)
Dividend paid			(46)
At 31 December 2008			2,581

17. Net asset value per share

Net asset value per share is based on net assets at 31 December 2008 of £2,581,240 (31 December 2007 of £5,332,885) and on 5,745,530 ordinary shares in issue at those dates.

18. Performance incentive arrangements

The Investment Manager is not entitled to any performance incentive arrangements.

19. Net cash outflow from operating activities

		Year ended 31 December 2008 £'000		Period ended 31 December 2007 £'000
Operating activity
Operating profit		(2,698)		(332)
Profit on sale of investments		(77)		(8)
Investment income		(88)		(96)
Unrealised losses on investments		2,800		347
Increase in creditors		1		6
		(62)		(83)

20. Risk management and financial instruments

A statement of the company's principal objectives is given at the beginning of this release. 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.

20. Risk management and financial instruments (continued)

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 ended 31 December 2008£'000		Period ended 31 December 2007£'000
Floating rate		39		24
Fixed rate		389		851
Non-interest bearing		2,166		4,472
		2,594		5,347
Fixed rate assets		Year ended 31 December 2008£'000		Period ended 31 December 2007£'000
Weighted average interest rate		2.5%		2.5%
Weighted average years to maturity		1		5

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 comprise equity share and non-equity share investments in investee companies, cash held on non-interest bearing deposit and debtors.

Fair values

The investments of the company are valued by the directors in accordance with the guidelines issued by the British Venture Capital Association, and the carrying values are considered to approximate the fair value of the investments.

21. Related party transactions

New Century AIM VCT2 plc is managed by M D Barnard & Co. Limited. Details of the relationship and transactions with the related party are included in note 3.

22. Capital commitments

There were no investments which were approved at the year end but which had not completed.

23. Control

New Century AIM VCT2 plc is not under the control of any one party or individual.

24. Post Balance Sheet Events

Subsequent to the year end the following investment companies have gone into administration:

Investment			Valuation at 31 December 2008 £
CKS Group plc			-
EBTM plc			150,000
Fishworks plc			7,500
Microemissive Displays			800

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 31 December 2008

The Company

New Century AIM VCT2 PLC was incorporated on 16 January 2007. On 4 April 2007, the company obtained a listing on the London Stock Exchange. A total of £5.745 million was raised (before expenses) through an offer for subscription of new ordinary shares at 100p. The company has been provisionally approved as a Venture Capital Trust by the Inland Revenue.

The Investment Manager

New Century AIM VCT2 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 £40 million including New Century AIM VCT2 PLC.

Venture Capital Trusts

Venture Capital Trusts (VCTs) were introduced in the Finance Act 1995 and are intended to provide a means whereby individual investors can invest in small unquoted trading companies in the UK, with incentives in the form of a number of tax benefits. From 6 April 2005, investors subscribing for new shares in a VCT have been entitled to claim income tax relief of 30% on their investment, irrespective of their marginal tax rate (up to a maximum investment of £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.

New Century AIM VCT2 has been provisionally approved as a VCT by the Inland Revenue. In order to maintain its approval the company must comply with certain requirements on a continuing basis; in particular, within three years from the date of provisional approval at least 70% by value of the company's investments must comprise "qualifying holdings", of which at least 30% by value must be in eligible ordinary shares. A "qualifying holding" consists of up to £1 million invested in any one year in new shares or securities in an unquoted company which is carrying on a qualifying trade and whose gross assets do not exceed £15 million at the time of investment. For the purposes of these criteria, unquoted companies include companies whose shares are traded on the Alternative Investment Market ("AIM").

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

Financial calendar

Annual General Meeting				May 2009
Interim report for six months to 30 June 2009 published				August 2009
Preliminary announcement of results for the year to 31 December 2009				April 2010
Annual General Meeting 2009				May 2010

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).

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