New Cent.2 Regulatory News (NCA2)

30 Apr 2012 12:43

New Century AIM VCT2 plc		31st December 2011
Audited Report and Accounts for the year to 31st December 2011

Details of Directors

Financial Summary

Investment Objective

Chairman's Statement

Details of Directors

Management and Administration

Directors

Investment Manager's Review

Investment Portfolio

Top Ten Investments

Directors' Report

Directors' Remuneration Report

Corporate Governance

Independent Auditors' Report

Income Statement

Balance Sheet

Cash Flow Statement

Notes to the Financial Statements

Shareholder Information

Notice of Annual General Meeting

Form of Proxy

Financial Summary

		Year ended 31 December 2011		Year ended 31 December 2010
Revenue return per share (pence) for the year		-0.12		-0.17
Total return per share (pence) for the year		-8.42		-2.65
Proposed dividends per share (pence)		0.00		0.00
Net asset value per share (pence)		39.80		47.28
Cumulative value of shareholder investment (net asset value plus cumulative dividends per share) (pence)		40.76		49.04
Shareholders' funds (£'000)		2,401		2,716

The 2010 comparative information has not been amended in respect of subsequent share issues.

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 31 December 2011, the FTSE AIM Index declined by 25.8%. Your fund was not immune to this weakness, though the decline in asset value was rather less at 15.8%.

Qualifying investments fell from 76.1% to 70.3% primarily due to the takeover of Coolabi which was a qualifying investment.

We regret to say that we are unable to pay a dividend this year due to a lack of distributable reserves.

With the arrival of the 5 year anniversary of the fund, we are aware that certain shareholders may soon wish to dispose of their shares without losing their tax relief. Under normal circumstances, we would arrange a share buy back to facilitate this. However, due to the lack of distributable reserves, this is not possible. To rectify the situation, we are currently working with our lawyers to write off past losses against the share premium account. This will involve court approval. However, once granted, we shall be in a position to pay out future profits as dividends and to facilitate buy backs. While the delay in buy backs is regretted, the Board will take every step possible to enable investors to sell their shares through a buy back.

I would like to thank the management for their efforts over the year.

Annual General Meeting

The AGM will be held at 11.30am on 1st June 2012 at 17-21 New Century Road Laindon, Essex SS15 6AG

Geoffrey Charles Gamble

Chairman

26 April, 2012

Details of Directors

Michael Barnard (Aged 61)

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. 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 51)

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 65)

Peter qualified as a solicitor in 1969 and in that year became partner of Mitchells, Solicitors. In 1977, he became a partner in his present solicitor practice, Daybells, where he specialises in property law with an emphasis on large commercial properties.

Ian Cameron-Mowat (Aged 61)

Ian has a Bsc 1st degree in electronics and was involved in the early development of computers at Burroughs Machines. He is currently a consultant radiologist to a NHS Trust.

Management and Administration

Registered Office		4th Floor, 150-152 Fenchurch Street London EC3M 6BB
Company Secretary		Graham Kenneth Urquhart FCIS 4th Floor, 150-152 Fenchurch Street London EC3M 6BB
Registrar		Neville Registrars Limited Neville House 18 Laurel Lane Halesowen West Midlands B63 3DA
Solicitors		Dundas & Wilson 5th Floor, Northwest Wing Bush House Aldwych London WC2B 4EZ
Investment Manager and Broker		M D Barnard & Company Limited 17-21 New Century Road Laindon, Essex SS15 6AG
Auditor & VCT Status Adviser		UHY Hacker Young LLP Quadrant House 4 Thomas More Square London E1W 1YW
Bankers		Bank of Scotland New Uberior House 11 Earl Grey Street Edinburgh EH3 9BN

Directors

Geoffrey Gamble (Chairman)

Michael David Barnard

Peter William Riley

Ian Cameron-Mowat

All directors are non-executive.

Audit Committee:

Geoffrey Gamble (Chairman)

Peter William Riley

Ian Cameron-Mowat

Investment Manager's Review

2011 will be remembered for fears over the Eurozone, and in particular Greece. These worries impacted both the main market and AIM.

Despite this, your fund had some notable successes. A H Medical and Coolabi were both taken over resulting in an increase in value of £74,625 over the previous year end valuation. Advanced Computer continued to make good progress with a further gain of £72,000. We also benefited from a short term gain of £24,636 on Angle.

On the negative front, we lost around £83,000 on Cyan which reflected a cash raising exercise at a low price. Results from Bango did not live up to expectations and our holding fell in value by £65,000 though since then their share price has recovered sharply on some important orders from Amazon and Facebook.

Outlook

While still precarious, the financial situation in Europe does appear to be stabilising and share prices have recently been showing some improvement as a result. Reflecting the improved conditions, the net asset value of the fund has recovered to 42.7p per share as at 13 April 2012. Many companies in which we have invested are producing better results and making encouraging statements about the future. We therefore feel cautiously optimistic.

Michael Barnard

26 April 2012

Investment Portfolio

Security		Cost		Valuation		%		%
				31/12/2011		Cost		Valuation
Qualifying Investments		3,653,834		1,485,706		70.31		61.68
Non-qualifying Investments		1,384,498		765,029		26.64		31.76
Uninvested funds		158,063		158,063		3.04		6.56
		5,196,395		2,408,798		100.00		100.00
Qualifying Investments
AIM Quoted
Marechale Capital plc		151,504		15,000		2.92		0.62
Sinclair Pharma plc		288,020		242,000		5.54		10.05
EBTM plc		471,420		0		9.07		0.00
HML Holdings plc		271,350		100,000		5.22		4.15
Sport Media Group plc		125,625		0		2.42		0.00
Environ Group plc		334,125		10,000		6.43		0.42
Kurawood plc		150,750		0		2.90		0.00
Boomerang Plus plc		238,185		72,000		4.58		2.99
Corac Group plc		160,062		82,274		3.08		3.42
Tristel plc		204,303		188,100		3.93		7.81
Advanced Computer Sofware		102,510		282,000		1.97		11.71
Cyan Holdngs plc		204,219		67,322		3.93		2.79
Savile Group		126,254		13,125		2.43		0.54
M.Winkworth plc		72,360		75,600		1.39		3.14
Green Compliance plc		33,668		20,770		0.65		0.86
Bango plc		32,411		51,000		0.62		2.12
Angel Biotech Holdings		125,506		103,500		2.42		4.30
In-Deed Online		66,906		61,815		1.29		2.57
Music Fesivals plc		45,731		39,200		0.88		1.63
Inspired Energy plc		45,231		45,000		0.87		1.87
		3,250,140		1,468,706		62.54		60.99
Plus Markets Quoted
General Medical Clinics plc		37,371		17,000		0.72		0.71
CKS Group plc		366,323		0		7.05		0.00
		403,694		17,000		7.77		0.71
Total qualifying investments		3,653,834		1,485,706		70.31		61.68

Security		Cost		Valuation		%		%
				31/12/2011		Cost		Valuation
Non-qualifying Investments
AIM Quoted
NetDimensions Ltd		31,155		10,500		0.60		0.44
Ashley House plc		86,558		13,500		1.67		0.56
DCD Media		60,300		750		1.16		0.03
Eco City Vehicles		15,530		6,000		0.30		0.25
ILX Group		30,099		11,500		0.58		0.48
Sanderson Group		58,231		36,400		1.12		1.51
Pactolus Hungarian Prop		10,616		5,000		0.20		0.21
Fishworks plc		30,150		0		0.58		0.00
AT Communications Group		41,815		0		0.80		0.00
STM Group		35,855		16,000		0.69		0.66
Rotala plc		39,902		39,000		0.77		1.62
Tristel plc		60		38		0.00		0.00
Advanced Computer Sofware		97		94		0.00		0.00
Green Compliance plc		2		1		0.00		0.00
Bango plc		299		136		0.01		0.01
2Ergo Group		17,932		18,500		0.35		0.77
Stadium Group		7,036		6,930		0.14		0.29
May Gurney		6,687		6,925		0.13		0.29
Merchant House		19,448		14,000		0.37		0.58
Sportingbet		9,614		9,300		0.19		0.39
		501,386		194,574		9.66		8.09
UK listed
Investec		443,821		158,100		8.54		6.56
4Imprint Group		20,024		29,640		0.39		1.23
British American Tobacco		22,104		30,550		0.43		1.27
China Food		12,629		5,750		0.24		0.24
Hansard Global		16,486		15,100		0.32		0.63
Astrazeneca		21,440		20,825		0.41		0.86
Greggs plc		10,228		10,120		0.20		0.42
Chemring Group		26,254		15,960		0.51		0.66
Cineworld Group		31,432		30,600		0.60		1.27
HSBC Holdings		18,881		14,700		0.36		0.61
Networkers Int		12,443		12,250		0.24		0.51
Microsaic Systems		24,951		26,600		0.48		1.10
Renew Holdings		11,379		13,600		0.22		0.56
Tullett Prebon		14,407		10,760		0.28		0.45
William Hill		11,350		10,100		0.22		0.42
Imperial Tobacco		23,759		24,350		0.46		1.01
		721,588		429,005		13.9		17.80
Unlisted Investments
DCD Media loan notes 2012		30,868		16,500		0.59		0.68
Environ Group plc		40,200		30,000		0.77		1.25
Merchant House Loan notes		45,228		59,850		0.87		2.48
Merchant House CULS		45,228		35,100		0.87		1.46
		161,524		141,450		3.10		5.87
Total non-qualifying investments		1,384,498		765,029		26.64		31.76

Top Ten Investments

Security		Cost		Valuation		%
Advanced Computer Software		102,510		282,000		11.71
Sinclair Pharma		288,020		242,000		10.05
Tristel plc		204,303		188,100		7.81
Investec plc		443,821		158,100		6.56
Angel Biotech		125,506		103,500		4.30
HML Holdings plc		271,350		100,000		4.15
Corac Group		160,062		82,274		3.42
M Winkworth plc		72,360		75,600		3.14
Boomerang Plus plc		238,185		72,000		2.99
Cyan Holdings plc		204,219		67,322		2.79

The investments tabulated above are expressed as a percentage by valuation 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 2011.

Activities and status

The principal activity of the company during the year was the making of long-term equity and loan investments in unquoted and AIM traded companies in the United Kingdom. The company has been listed on the London Stock Exchange since 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 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.

Principal risks and uncertainties

The company invests its funds primarily in unlisted companies and companies traded on AIM, which entail a higher degree of risk than investments in large listed companies. The main risk, therefore, arising from the company's activities is market price risk, representing the uncertain realisable values of the company's investments. Please refer to note 20 to these accounts which gives a detailed review of the company's risk management.

Results and dividend

		Year to 31 December 2011				Year to31 December 2010
		Revenue		Capital		Revenue		Capital
		£'000		£'000		£'000		£'000
Return on ordinary activities after taxation		(8)		(499)		(10)		(142)
Appropriated as follows:
Interim dividend paid
Revenue - nil p		-		-		-		-
Capital - nil p		-		-		-		-
Final dividend paid in respect of prior year
Revenue - 0.00p (0.00p) per share		-		-		-		-
Capital - nil p per share		-		-		-		-
Transfers to reserves		(8)		(499)		(10)		(142)

Directors

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

		Year ended 31 December 2011		Year ended 31 December 2010
Michael David Barnard		606,854		200,000
Geoffrey Gamble		176,000		176,000
Peter William Riley		3,000		3,000
Ian Cameron-Mowat		100,000		100,000

All of the directors' share interests shown above are held beneficially. There have been no changes in the directors' share interests between 31 December 2011 and the date of this report.

Brief biographical notes on the directors are given - see above. The director, retiring in accordance with the Company's Articles of Association, Ian Cameron-Mowat, who being eligible will offer himself for re-election at the forthcoming annual general meeting. The directors believe his experience in small companies is a great benefit to the Board and recommend his re-election.

None of the directors 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

The company has been notified, in accordance with Chapter 5 of FSA's Disclosure and Transparency Rules, of the under noted interests as at 31 December 2011 of 3 per cent shareholders and above:

MD Barnard				606,854
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
P Sterne				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.

Post balance sheet events

Details of the post balance sheet events are set out in note 24.

Annual general meeting

Notice of the annual general meeting are set out below.

Auditors

In accordance with Section 485 of the Companies Act 2006, a resolution proposing that UHY Hacker Young LLP be reappointed as auditors of the Company and that the Directors be authorised to determine their remuneration will be put to the next Annual General Meeting.

Statement of disclosure to auditors

So far as the directors are aware:

1. there is no relevant audit information of which the Company's auditors are unaware; and

2. the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

By Order of the Board

Michael Barnard 26 April 2012

The Board has prepared this report in accordance with the requirements of the Companies Act 2006. A resolution to approve this report will be put to the members at the Annual General Meeting to be held on 1 June 2012.

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 31 December 2010 and 31 December 2011 is set out in the Financial Summary.

Total shareholder return

By Order of the Board

Michael Barnard

Corporate Governance

The directors support the relevant principles of the Combined Code issued in June 2008 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.

Going Concern

Bearing in mind that the assets of the company consist mainly of marketable securities, the directors are of the opinion that at the time of approving the financial statements, the company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

The Board

The company is led and controlled by a Board of directors who are all non-executives and who have had relevant experience with quoted companies prior to their appointment. The Chairman is Geoffrey Gamble.

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

During the year the following were held:

5 full board meetings		2 Audit Committee meetings
All directors attended all meetings with the exception of Mr Riley on two occasions and Mr Cameran-Mowat on five occasions.		All members attended with the exception of Mr Cameron-Mowat on two occasions.

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.

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.

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 31 December 2011 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 2008. The board consider that Messrs. Gamble, Riley and Cameron-Mowat are independent in character and judgement and there are no relationships or circumstances which are likely to affect, or could appear to affect the directors' judgement. The Board considers that all directors have sufficient experience to be able to exercise proper judgement within the meaning of the 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 2006. They are also responsible for the company's system of internal control, for safeguarding the assets of the company and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Responsibility statement

The directors confirm that to the best of their knowledge:

1. the financial statements, prepared in accordance United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial position and profit or loss of the company; and

2. the Directors' report includes a fair review of the development and performance and position of the company, together with a description of the principal risks and uncertainties that it faces.

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

We have audited the financial statements of New Century AIM VCT 2 plc for the year ended 31 December 2011 which comprise the Income Statement, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

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

Scope of the audit of the financial statements

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

Opinion on financial statements

In our opinion:

the financial statements give a true and fair view of the state of the company's affairs as at 31 December 2011 and of the company's loss for the year then ended; the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the company financial statements, Article 4 of the IAS Regulation.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

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

adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or the company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

the directors' statement, in relation to going concern; and the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review; and certain elements of the report to the shareholders by the Board on directors' remuneration.

Michael Egan (Senior statutory auditor)

for and on behalf of UHY Hacker Young

Chartered Accountants

Statutory Auditors

UHY Hacker Young

Quadrant House

4 Thomas More Square

London, E1W 1YW

Income Statement (incorporating the revenue account)

for the year to 31 December 2011

				Year ended31 December 2011						Year ended31 December 2010
		Notes		Revenue£'000		Capital£'000		Total£'000		Revenue£'000		Capital£'000		Total£'000
Gains/(losses) on investments
- realised				-		110		110		-		(299)		(299)
- unrealised				-		(589)		(589)		-		177		177
Income		2		34		-		34		36		-		36
Investment management fee		3		(7)		(20)		(27)		(7)		(21)		(28)
Other expenses		4		(35)		-		(35)		(38)		-		(38)
				________		________		________		________		________		________
Return on ordinary activities before taxation				(8)		(499)		(507)		(9)		(143)		(152)
Tax (charge)/credit on ordinary activities		6		-		-		-		-		-		-
				________		________		________		________		________		________
Return on ordinary activities after taxation				(8)		(499)		(507)		(9)		(143)		(152)
				=======		=======		=======		=======		=======		=======
Return per ordinary share (pence)		8		(0.12)		(8.30)		(8.42)		(0.17)		(2.48)		(2.65)
				=======		=======		=======		=======		=======		=======

The notes form an integral part of these financial statements.

All revenue and capital items in the above statement are from continuing operations in the current year. No operations were acquired or discontinued in the current year. Other than that shown above, the company had no recognised gains or losses. Accordingly no statement of total recognised gains and losses has been prepared.

Balance Sheet

at 31 December 2011

		Note		As at31 December 2011 £'000				As at 31 December 2010 £'000
Fixed assets
Investments		9				2,251				2,648
Current assets
Debtors		12				158				81
Current liabilities
Creditors: amounts falling due within one year		13				(8)				(13)
						2,401				2,716
Capital and reserves
Called up share capital		14				615				574
Share premium		15				5,251				5,100
Capital reserve - realised		15				(586)				(485)
Capital reserve - unrealised		15				(2,852)				(2,454)
Revenue reserve		15				(27)				(19)
Total equity shareholders' funds		16				2,401				2,716
Net asset value per ordinary share		17				40p				47p

The financial statements were approved by the Board of directors on 26 April 2012 and were signed on its behalf by:

Michael Barnard

Director

The notes form an integral part of these financial statements.

		Note		Year ended31 December 2011 £'000								Year ended 31 December 2010 £'000
Net cash outflow from operating activities		19						(67)								(61)
Returns on investments
Interest received				4								1
Investment income				30								35
								34								36
UK Corporation Tax paid								-										-
Dividend paid								-										(13)
Capital expenditure & financial investment
Sale of investments				748								593
Purchase of investments				(830)								(425)
Net cash (outflow)/inflow for capital expenditure & financial investment								(82)										168
Additional Share Capital net of expenses								192										-
Net cash (outflow)/inflow								(115)										130
Increase in uninvested funds with broker								77										130

The notes form an integral part of these financial statements.

Notes to the Financial

Statements

for the year to 31 December 2011

1. Accounting policies

General

The financial statements have been prepared in accordance with applicable United Kingdom law and accounting standards 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.

Notes to the Financial

Statements

for the year to 31 December 2011

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 2011 £'000				Year ended 31 December 2010£'000
Interest receivable
- listed fixed interest securities				-				1
- unquoted investment portfolio				4				-
- bank deposits and liquid funds				-				-
				4				1
Other income
Dividends receivable				30				35
				34				36

3. Investment management fees

		Year ended 31 December 2011				Year ended 31 December 2010
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
Investment management fees		7		20		7		21

MD Barnard & Company Limited ( "MDB") provides investment management services to the company in respect of the company's portfolio of venture capital investments under an investment management agreement dated 12 March 2007. Michael Barnard who is a non-executive director of the company is the owner and managing director 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 year ended 31 December 2011, 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 2011 £'000								Year ended 31 December 2010£'000
Administrative and secretarial services												11		12
Auditors' remuneration												10		8
-for tax services												4		7
Regulatory fees												10		9
Other expenses												-		2
										35						38

5. Directors' remuneration

No remuneration has been paid or is payable for year to 31 December 2011 or in respect of the prior year.

6. Tax charge/(credit) on ordinary activities

		Year ended 31 December 2011				Year ended 31 December 2010
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
United Kingdom tax based on the taxable profit for the year
- Current year		-		-		-		-
- Prior year		-		-		-		-
		-		-		-		-
Factors affecting tax charge for the year
Return on ordinary activities before taxation		(8)		(499)		(9)		(143)
Tax on above at the small company rate of 20% (2010: 21%)		(1)		(100)		(2)		(30)
UK dividends not subject to corporation tax		(6)		-		(8)		-
Non deductible losses / (Non taxable gains) on investment		-		95		-		25
Non allowable expenses		-		-		-		-
Unutilised losses		7		5		10		5
Current tax charge/(credit) for the year		-		-		-		-

7. Dividends

		Year ended 31 December 2011 £'000				Year ended 31 December 2010£'000
Interim dividend paid				-				-
Final dividend paid in respect of previous year				-				13
				-				13

The directors do not propose a dividend in respect of the year ended 31 December 2011

8. Return per ordinary share

The revenue return, per ordinary share, is based on the net revenue on ordinary activities after taxation of -£7,473 (2010: -£9,515) and on 6,032,006 (2010: 5,745,550) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

The total return per ordinary share is based on a net loss after taxation of £507,654 (2010: £152,101) and on 6,032,006 (2010: 5,745,550) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

9. Fixed asset investments

		As at 31 December 2011 £'000				As at 31 December 2010£'000
Gilts				-				-
UK listed				429				321
AIM				1,663				2,215
PLUS Markets				17				54
Unlisted				142				58
				2,251				2,648

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

								Year ended 31 December 2010
						Gilts		UK Listed		AIM		Plus Mkts		Un-listed		Total
						£'000		£'000		£'000		£'000		£'000		£'000
at 1 January 2010						-		731		4,338		404		31		5,504
Purchases						-		42		324		18		40		424
Transfers						-		-		-		-		-		-
						-		773		4,662		422		71		5,928
less: Sales						-		122		463		-		8		593
						-		651		4,199		422		63		5,335
Realised gains/losses						-		(34)		(273)		-		8		(299)
Unrealised gains/losses						-		(295)		(1,713)		(367)		(13)		(2,388)
						-		322		2,213		55		58		2,648
Cost at 31 December 2010						-		617		3,928		422		71		5,038

9. Fixed asset investments (continued)

														Year ended 31 December 2011
								Gilts				UK					AIM		Plus Mkts			Un-listed			Total
								£'000				£'000					£'000		£'000			£'000			£'000
at 1 January 2011								-				322					2,213		55			58			2,648
Purchases								-				304					437		-			90			831
Transfers								-				-					-		-			-			-
								-				626					2,650		55			148			3,479
less: Sales								-				142					576		30			1			749
								-				484					2,074		25			147			2,730
Realised gains/losses								-				16					93		-			1			110
Unrealised gains/losses								-				(71)					(504)		(8)			(6)			(589)
								-				429					1,663		17			142			2,251
Cost at 31 December 2011								-				722					3,751		404			161			5,038

The overall gain/ (loss) on investments for the years shown in the Income Statement is as follows:

		Year ended 31 December 2011 £'000				Year ended 31 December 2010£'000
Net realised gain / (loss) on disposal				110				(299)
(Decrease)/increase in unrealised appreciation				(589)				177
				(479)				(122)

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

		As at 31 December 2011 £'000				As at 31 December 2010£'000
UK Corporation Tax				-				-
Uninvested funds with broker:
MD Barnard & Co Ltd				158				81

13. Creditors

		As at 31 December 2011 £'000				As at 31 December 2010£'000
Trade creditors and accruals				8				13
UK Corporation Tax				-				-
MD Barnard & Co Ltd				-				-
				8				13

14. Share capital

		As at 31 December 2011£'000				As at 31 December 2010£'000
Authorised
25,000,000 ordinary shares of 10p each				2,500				2,500
Allotted, called up and fully paid
6,152,384 ordinary shares of 10p each				615				574

15. Reserves

			Share Premium account£'000				Capital realised £'000			Capital unrealised £'000				Revenue reserve£'000
As at 1 January 2011			5,100				(485)			(2,454)				(19)
Share Issue			151
Realised gains/(losses) on disposals			-				110			-				-
Unrealised gains/(losses)			-				-			(589)				-
Transfer of unrealised loss to realised on disposal of investment			-				(191)			191				-
Net revenue before tax			-				-			-				(8)
Investment management fee			-				(20)			-				-
Corporate taxation			-				-			-				-
Dividends paid			-				-			-				-
At 31 December 2011			5,251				(586)			(2,852)				(27)

16. Reconciliation of movements in shareholders' funds

				£'000
At 1 January 2011				2,716
Return on ordinary activities after tax Issue of ordinary shares				(507) 192
At 31 December 2011				2,401

17. Net asset value per share

Net asset value per share is based on net assets at 31 December 2011 of £2,400,798 (31 December 2010 of £2,716,500) and on 6,152,384 ordinary shares (5,745,550 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 2011 £'000		Year ended 31 December 2010 £'000
Operating activity
Operating loss		(507)		(152)
(Profit)/ Loss on sale of investments		(110)		299
Investment income		(34)		(37)
Unrealised losses/ (gains) on investments		589		(177)
Increase in creditors		(5)		6
		________		________
		(67)		(61)
		=======		=======

20. Risk management and financial instruments

A statement of the company's principal objectives is given. 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.

20. Risk management and financial instruments (continued)

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 ended 31 December 2011£'000				Year ended 31 December 2010£'000
Fixed rate				141				57
Non-interest bearing				2,110				2,591
				2,251				2,648

20. Risk management and financial instruments (continued)

Fixed rate assets		Year ended 31 December 2011£'000				Year ended 31 December 2010£'000
Weighted average interest rate				10.9%				8%
Weighted average years to maturity				2.6				5.8

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. On 12 April 2011 the Company allotted 406,834 ordinary shares to Michael Barnard for consideration of £200,000.

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

On 19 March 2012 167,166 ordinary shares were issued for a consideration of 44.19 pence per share raising £73,870 before share issue costs.

Shareholder Information

for the year to 31 December 2011

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 private client funds and venture capital funds totalling approximately £25 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					1 June 2012
Interim report for six months to 30 June 2012 published					August 2012
Preliminary announcement of results for the year to 31 December 2012					April 2013
Annual General Meeting 2012					May 2013

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).

Copyright Business Wire 2012