New Cent.2 Regulatory News (NCA2)

28 Apr 2011 16:59

New Century AIM VCT2 plc		31st December 2010
Audited Report and Accounts forthe year to 31st December 2010

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

Financial Summary

		Year ended 31 December 2010		Year ended 31 December 2009
Revenue return per share (pence) for the year		-0.17		0.14
Total return per share (pence) for the year		-2.65		6.05
Proposed dividends per share (pence)		0.00		0.22
Net asset value per share (pence)		47.28		50.04
Cumulative value of shareholder investment(net asset value plus cumulative dividends per share) (pence)		49.04		51.58
Shareholders' funds (£'000)		2,716		2,881

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

Chairman's Statement

In the year to 31st December, 2010, I regret to say there was a decline of 5.5% in the net asset value of your fund. Spending cuts in the Public sector and increasing fuel prices have taken their toll on both business and the consumer and several of the constituents in the fund have suffered accordingly.

Qualifying investments increased slightly to 76.08% of the fund by cost, thus remaining above the 70% minimum requirement.

Regretfully, the cost of running the fund exceeded income and there are no reserves available to pay a dividend. We are endeavouring to increase the revenue received as we appreciate that many of our shareholders wish to receive an income.

I would like to thank the management for their efforts during the past difficult year.

Annual General Meeting

The AGM will be held at 11.30 am on Wednesday 1 June 2011 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

28 April, 2011

Details of Directors

Michael Barnard (Aged 60)

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.

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.

Ian Cameron-Mowat (Aged 60)

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 BarnardPeter William RileyIan Cameron-Mowat

All directors are non-executive.

Audit Committee:

Geoffrey Gamble (Chairman)Peter William RileyIan Cameron-Mowat

Investment Manager's Review

2010 continued to be a difficult year for smaller companies.

Environ was the most disappointing investment with the equity and loan stock falling in value by £202,000. Management of the company has been substantially changed and we believe that the steps taken by the new Board will lead to a much improved performance.

Two of our early successes, Cyan Holdings and Green Compliance gave back their gains and lost £219,000 over the period following cash raisings at lower share prices.

Disappointing results brought about a combined fall in value of £173,000 on the holdings of Boomerang, Savile Group and Ashley House.

On an encouraging note, we saw an advance in value of £84,000 on the Bango holding following rapid growth by the company.

During the year, Shed Media and China Eastsea were taken over, realising a small gain over the period.

Since the year end, the net asset value per share has shown a marginal increase.

In the coming year, we shall work hard to improve the fortunes of the fund, in what is likely to be a difficult period.

Michael Barnard

28 April, 2011

Investment Portfolio

Security		Cost		Valuation		%		%
				31/12/2010		Cost		Valuation
Qualifying Investments		3,894,469		2,010,630		76.08		73.83
Non-qualifying Investments		1,143,456		631,718		22.34		23.20
Uninvested funds		80,856		80,856		1.58		2.97
		5,118,781		2,723,204		100.00		100.00
Qualifying Investments
AIM Quoted
Marechale Capital plc		151,504		30,000		2.96		1.10
Coolabi plc		394,694		217,500		7.71		7.98
IS Pharma plc		301,500		345,000		5.89		12.67
EBTM plc		471,420		0		9.21		0.00
HML Holdings plc		271,350		120,000		5.30		4.41
Sport Media Group plc		125,625		1,333		2.45		0.05
Environ Group plc		334,125		65,000		6.53		2.38
Kurawood plc		150,750		0		2.95		0.00
Boomerang Plus plc		238,185		64,500		4.65		2.37
Corac Group plc		160,062		102,842		3.13		3.78
Tristel plc		204,303		301,950		3.99		11.09
Advanced Computer Sofware		102,510		210,000		2.00		7.71
Cyan Holdngs plc		204,219		147,780		3.99		5.43
Savile Group		126,254		50,625		2.47		1.86
M.Winkworth plc		72,360		72,000		1.41		2.64
Green Compliance plc		33,668		53,600		0.66		1.97
Bango plc		32,411		116,250		0.63		4.27
Hydrodec Group plc		30,150		42,500		0.59		1.56
		3,405,090		1,940,880		66.52		71.27
UK listed
Chime Communications plc		85,685		43,750		1.67		1.61
		85,685		43,750		1.67		1.61
Plus Markets Quoted
General Medical Clinics plc		37,371		26,000		0.73		0.95
CKS Group plc		366,323		0		7.16		0.00
		403,694		26,000		7.89		0.95
Total qualifying investments		3,894,469		2,010,630		76.08		73.83
Security		Cost		Valuation		%		%
				31/12/2010		Cost		Valuation
Non-qualifying Investments
AIM Quoted
NetDimensions Ltd		31,155		9,000		0.61		0.33
Ashley House plc		96,176		26,000		1.88		0.95
DCD Media		60,300		9,000		1.18		0.33
Eco City Vehicles		15,530		16,500		0.30		0.61
ILX Group		30,098		12,000		0.59		0.44
Sanderson Group		58,231		35,700		1.14		1.31
Pactolus Hungarian Prop		10,616		5,000		0.22		0.18
Fishworks plc		30,150		0		0.59		0.00
AT Communications Group		41,815		0		0.82		0.00
Norcon plc		8,206		5,625		0.16		0.21
STM Group		35,855		20,000		0.70		0.73
Alliance Pharma plc		25,251		62,000		0.49		2.28
Colliers Int plc		20,200		19,250		0.39		0.70
Rotala plc		35,351		21,000		0.69		0.77
Tristel plc		60		60		0.00		0.00
Advanced Computer Sofware		41		36		0.00		0.00
Green Compliance plc		2		2		0.00		0.00
Bango plc		100		155		0.00		0.01
Bango plc		199		155		0.00		0.01
Motivcom		23,787		32,550		0.46		1.20
		523,123		274,033		10.22		10.06
UK listed
Superglass Hldgs plc		45,225		7,125		0.89		0.26
Investec		443,821		204,600		8.67		7.51
4Imprint Group		20,024		34,840		0.39		1.28
British American Tobacco		22,104		24,920		0.43		0.92
		531,174		271,485		10.38		9.97
Unlisted Investments
DCD Media loan notes 2012		30,868		29,700		0.60		1.09
Southern Bear plc		40,200		28,000		0.79		1.03
		71,068		57,700		1.39		2.12
Plus Markets quoted
AH Medical Properties plc		18,091		28,500		0.35		1.05
		18,091		28,500		0.35		1.05
Total non-qualifying investments		1,143,456		631,718		22.34		23.20

Top Ten Investments

Security		Cost		Valuation		%
IS Pharma plc		301,500		345,000		12.67
Tristel plc		301,500		301,950		11.09
Coolabi plc		394,694		217,500		7.99
Advanced Computer Software		102,510		210,000		7.71
Investec plc		443,821		204,600		7.51
Cyan Holdings plc		204,219		147,780		5.43
HML Holdings plc		271,350		120,000		4.41
Bango plc		32,411		116,250		4.27
Corac Group		160,602		102,842		3.78
M Winkworth plc		72,360		72,000		2.64

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 2010.

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 2010				Year to31 December 2009
		Revenue		Capital		Revenue		Capital
		£'000		£'000		£'000		£'000
Return on ordinary activities after taxation		(10)		(142)		8		339
Appropriated as follows:
Interim dividend paid
Revenue - nil p		-		-		-		-
Capital - nil p		-		-		-		-
Final dividend paid in respect of prior year
Revenue - 0.00p (0.74p) per share		-		-		(48)		-
Capital - nil p per share		-		-		-		-
Transfers to reserves		(10)		(142)		(40)		339

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 2010		Year ended 31 December 2009
Michael David Barnard Geoffrey Gamble Peter William Riley Ian Cameron-Mowat		200,000 176,000 3,000 100,000		200,000 176,000 3,000 100,000

All of the directors' share interests shown above are held beneficially. There have been no changes in the directors' share interests between 31 December 2010 and the date of this report.

Brief biographical notes on the directors - see above. The director, retiring in accordance with the Company's Articles of Association, is Mr Riley, 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 2010 of 3 per cent shareholders and above:

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 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 28 April 2011

Directors' Remuneration Report

The Board has prepared this report in accordance with the requirements of the Companies Act 2006. A resolution to approve this report will be put to the members at the Annual General Meeting to be held on 1 June 2011.

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 2009 and 31 December 2010 is set out in the Financial Summary.

Total shareholder return

[graph omitted]

The above graph shows the company's total shareholder return compared to that of the FTSE AIM All Index total return for the period since listing on the London Stock Exchange.

By Order of the Board

Michael Barnard

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:

4 full board meetings		2 Audit Committee meetings
All directors attended all meetings with the exception of Mr Riley on one occasion		All members attended with the exception of Mr Riley

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. These 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 2010 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 2010 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 on page 17, 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 2010 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 AccountantsStatutory Auditors

UHY Hacker Young28 April 2011Quadrant House4 Thomas More SquareLondon, E1W 1YW

Income Statement (incorporating the revenue account)

for the year to 31 December 2010

				Year ended31 December 2010						Year ended31 December 2009
		Notes		Revenue£'000		Capital£'000		Total£'000		Revenue£'000		Capital£'000		Total£'000
Gains/(losses) on investments
- realised				-		(299)		(299)		-		108		108
- unrealised				-		177		177		-		244		244
Income		2		36		-		36		50		-		50
Investment management fee		3		(7)		(21)		(28)		(7)		(22)		(29)
Other expenses		4		(38)		-		(38)		(33)		-		(33)
				________		________		________		________		________		________
Return on ordinary activities before taxation				(9)		(143)		(152)		10		330		340
Tax (charge)/credit on ordinary activities		6		-		-		-		(2)		9		7
				________		________		________		________		________		________
Return on ordinary activities after taxation				(9)		(143)		(152)		8		339		347
				=======		=======		=======		=======		=======		=======
Return per ordinary share (pence)		8		(0.17)		(2.48)		(2.65)		0.14		5.91		6.05
				=======		=======		=======		=======		=======		=======

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 Sheetat 31 December 2010

		Note		As at31 December 2010 £'000				As at 31 December 2009 £'000
Fixed assets
Investments		9				2,648				2,937
Current assets
Debtors		12				81				6
Current liabilities
Creditors: amounts falling due within one year		13				(13)				(62)
						2,716				2,881
Capital and reserves
Called up share capital		14				574				574
Share premium		15				5,100				5,100
Capital reserve - realised		15				(485)				(173)
Capital reserve - unrealised		15				(2,454)				(2,623)
Revenue reserve		15				(19)				3
Total equity shareholders' funds		16				2,716				2,881
Net asset value per ordinary share		17				47p				50p

The financial statements were approved by the Board of directors on 28th April 2011 and were signed on its behalf by:

Michael BarnardDirector

The notes form an integral part of these financial statements.

Cash Flow Statementfor the year to 31 December 2010

		Note		Year ended31 December 2010 £'000								Year ended 31 December 2009 £'000
Net cash outflow from operating activities		19						(61)								(54)
Returns on investments
Interest received				1								6
Investment income				35								45
								36								51
UK Corporation Tax paid								-										(6)
Dividend paid								(13)										(48)
Capital expenditure & financial investment
Sale of investments				593								1.071
Purchase of investments				(425)								(1,102)
Net cash (outflow)/inflow for capital expenditure								168										(31)
& financial investment
Net cash (outflow)/inflow								130										(88)
(Decrease)/Increase in uninvested funds with broker								130										(88)

The notes form an integral part of these financial statements.

Notes to the Financial Statementsfor the year to 31 December 2010

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.

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 2010 £'000				Year ended 31 December 2009£'000
Interest receivable
- listed fixed interest securities				1				5
- unquoted investment portfolio				-				-
- bank deposits and liquid funds				-				1
				1				6
Other income
Dividends receivable				35				44
				36				50

3. Investment management fees

		Year ended 31 December 2010				Year ended 31 December 2009
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
Investment management fees		7		21		7		22

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 2009, 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 2010 £'000								Year ended 31 December 2009£'000
Administrative and secretarial services										12		10
Auditors' remuneration										8		7
-for tax services										7		7
Regulatory fees										9		8
Other expenses										2		1
								38						33

5. Directors' remuneration

No remuneration has been paid or is payable for year to 31 December 2010 or in respect of the prior year.

6. Tax charge/(credit) on ordinary activities

		Year ended 31 December 2010				Year ended 31 December 2009
		Revenue £'000		Capital£'000		Revenue £'000		Capital£'000
United Kingdom tax based onthe taxable profit for the year
- Current year		-		-		-		-
- Prior year		-		-		2		(9)
		-		-		2		(9)
Factors affecting tax charge for the year
Return on ordinary activities before taxation		(9)		(143)		10		669
Tax on above at the small company rate of 21% (2009: 21%)		(2)		(30)		2		140
UK dividends not subject to corporation tax		(8)		-		(10)		-
Non deductible losses / (Non taxable gains) on investment		-		25		-		(140)
Non allowable expenses		-		-		-		-
Unutilised losses		10		5		8		-
Prior year adjustments						2		(9)
Current tax charge/(credit) for the year		-		-		2		(9)

7. Dividends

		Year ended 31 December 2010 £'000				Year ended 31 December 2009£'000
Interim dividend paid				-				-
Final dividend paid in respect of previous year				13				48
				13				48

The directors do not propose propose a dividend in respect of the year ended 31 December 2010 t

8. Return per ordinary share

The revenue return, per ordinary share, is based on the net revenue on ordinary activities after taxation of -£9,515 (2009: £8,006) and on 5,745,550 (2009: 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 £152,101 (2009: £348,188) and on 5,745,550 (2009: 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 2010 £'000				As at 31 December 2009£'000
Gilts				-				-
UK listed				321				345
AIM				2,215				2,534
PLUS Markets				54				28
Unlisted				58				30
				2,648				2,937

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

												Year ended 31 December 2009
						Gilts				UK					AIM		Plus Mkts			Un-listed			Total
						£'000				£'000					£'000		£'000			£'000			£'000
at 1 January 2009						378				853					4,068		404			-			5,703
Purchases						-				51					1,010		-			41			1,102
Transfers						-				146					(186)		-			40			-
						378				1,050					4,892		404			81			6,805
less: Sales						389				166					446		-			70			1,071
						(11)				884					4,446		404			11			5,734
Realised gains/losses						11				(153)					(108)		-			20			(230)
Unrealised gains/losses						-				(386)					(1,804)		(376)			(1)			(2,567)
						-				345					2,534		28			30			2,937
Cost at 31 December 2009						-				731					4,338		404			31			5,504

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

		Year ended 31 December 2010 £'000				Year ended 31 December 2009£'000
Net realised (loss) / gain on disposal				(299)				108
Increase/(Decrease) in unrealised appreciation				177				244
				(122)				352

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 2010 £'000				As at 31 December 2009£'000
UK Corporation Tax				-				6
Uninvested funds with broker:
MD Barnard & Co Ltd				81				-

13. Creditors

		As at 31 December 2010 £'000				As at 31 December 2009£'000
Trade creditors and accruals				13				13
UK Corporation Tax				-				-
MD Barnard & Co Ltd				-				49
				13				62

14. Share capital

		As at 31 December 2010£'000				As at 31 December 2009£'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

		Share Premium account£'000		Capital realised £'000		Capital unrealised £'000		Revenue reserve£'000
As at 1 January 2010		5,100		(173)		(2,623)		3
Realised gains/(losses) on disposals		-		(299)		-		-
Unrealised gains/(losses)		-		-		177		-
Transfer of unrealised loss to realised on disposal of investment		-		-		-		-
Net revenue before tax		-		-		-		(9)
Investment management fee		-		(13)		(8)		-
Corporate taxation		-		-		-		-
Dividends paid		-		-		-		(13)
		________		________		________		________
At 31 December 2010		5,100		(485)		(2,454)		(19)
		=======		=======		=======		=======

16. Reconciliation of movements in shareholders' funds

					£'000
At 1 January 2010					2,881
Return on ordinary activities after tax					(152)
Dividend paid					(13)
At 31 December 2010					2,716

17. Net asset value per share

Net asset value per share is based on net assets at 31 December 2010 of £2,716,500 (31 December 2009 of £2,881,243) and on 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 2010 £'000		Year ended 31 December 2009 £'000
Operating activity
Operating profit		(152)		340
Loss /(Profit) on sale of investments		299		(108)
Investment income		(37)		(50)
Unrealised (gains)/losses on investments		(177)		(244)
Increase in creditors		6		8
		________		________
		(61)		(54)
		=======		=======

20. Risk management and financial instruments

A statement of the company's principal objectives is given on page 1. In order to achieve these objectives the company invests its funds primarily in qualifying holdings in unlisted companies and companies traded on AIM, which by their nature may entail a higher degree of risk than investments in large listed companies. The company has not entered into any derivative transactions, and does not expect to do so in the foreseeable future. As a venture capital trust, the company invests in securities for the long term, and it is the company's policy that no trading in investments or other financial instruments shall be undertaken.

Market price risk

The main risks arising from the company's investing activities are market price risk, representing the uncertain realisable values of the company's investments. The directors aim to limit the risk attaching to the portfolio as a whole by careful selection of investments and by maintaining a wide spread of investments in terms of financing stage, industry sector and geographical location.

Interest rate risk

The company finances its activities through retained profits including realisable capital profits, and through the issue of equity shares. It has not entered into any borrowings. The company's investment portfolio includes investments in interest bearing securities in investee companies and in other fixed interest securities. Details of interest bearing assets are given below under Financial assets.

Liquidity risk

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

Credit risk

Credit risk is the risk of a borrower defaulting on either an interest payment or the capital sum of a loan. The company has not made any loans to investee companies.

Currency risk

The company's assets and liabilities are denominated in sterling.

Financial assets

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

		Year ended 31 December 2010£'000				Year ended 31 December 2009£'000
Fixed rate				57				-
Non-interest bearing				2,591				2,937
				2,648				2,937

Fixed rate assets		Year ended 31 December 2010£'000				Year ended 31 December 2009£'000
Weighted average interest rate				8%				-
Weighted average years to maturity				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.

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.

Shareholder Information for the year to 31 December 2010

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 2011
Interim report for six months to 30 June 2011 published			August 2011
Preliminary announcement of results for the year to 31 December 2011			April 2012
Annual General Meeting 2012			May 2012

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 2011