8 July 2020 
   Northern 2 VCT PLC is a Venture Capital Trust (VCT) managed by Mercia 
Fund Management Limited.  It invests mainly in unquoted venture capital 
holdings and aims to provide high long-term tax-free returns to 
shareholders through a combination of dividend yield and capital growth. 
   Financial Summary (comparative figures as at 31 March 2019): 
                                                        2020      2019 
                                                    --------  -------- 
Net assets                                          GBP74.4m  GBP84.1m 
Net asset value per share                              53.5p     64.7p 
Return per share: 
Revenue                                                 0.2p      1.2p 
Capital                                               (7.2)p      2.0p 
Total                                                 (7.0)p      3.2p 
Dividend per share for the year: 
Interim dividend                                        2.0p      2.0p 
Proposed final dividend                                 1.5p      2.0p 
Total                                                   3.5p      4.0p 
Cumulative return to shareholders since launch: 
Net asset value per share                              53.5p     64.7p 
Dividends paid per share*                             121.4p    117.4p 
Net asset value plus dividends paid per share         174.9p    182.1p 
Mid-market share price at end of year                 47.50p    59.00p 
Share price discount to net asset value                11.2%      8.8% 
Tax-free dividend yield (based on net asset value 
 per share at the start of year)                        5.4%      6.0% 
   *Excluding proposed final dividend payable on 4 September 2020 
   Simon John/James Bryce, NVM Private Equity LLP - 0191 244 6000 
   Website:  www.nvm.co.uk 
   Martin Glanfield, Chief Financial Officer, Mercia Asset Management PLC 
-- 0330 223 1430 
   -- Seven new and 16 follow-on investments completed in innovative earlier 
      stage companies 
   -- Successful public share offer launched raising GBP12.5 million of gross 
   -- Return per share for the year of minus 7.0 pence resulting primarily from 
      an unrealised reduction in investment valuations 
   It has been another extremely busy year for the company, the latter part 
of which has been dominated by the urgent responses necessary as a 
consequence of the coronavirus (COVID-19) pandemic. This has caused 
significant disruption to businesses and the working life of people in 
the UK. I wish to emphasise to shareholders that since the emergence of 
COVID-19 our investment manager has been working very closely with 
portfolio companies to support them through the unprecedented challenges 
which many have been facing whilst observing government guidelines. 
However, as a result of its healthy cash reserves and a successful share 
offer which concluded shortly after the year end, your company is well 
positioned to continue to support and promote its growing portfolio of 
entrepreneurial businesses. 
   Results and dividend 
   In the year ended 31 March 2020 the company recorded a return on 
ordinary activities of minus 7.0 pence per share (2019: positive return 
of 3.2 pence), equivalent to 10.8% of the opening net asset value (NAV) 
per share. Your company's NAV per share as at 31 March 2020, after 
deducting dividends paid during the year of 4.0 pence, was 53.5 pence 
compared with 64.7 pence as at 31 March 2019. This negative total return 
was primarily driven by a decrease in the directors' valuations of 
unquoted investments following a realistic assessment of the valuations 
of some investee companies resulting from their varying exposure to the 
effects of COVID-19.  Whilst the cumulative return to shareholders 
decreased to 174.9 pence per share (2019: 182.1 pence), the 17.7% 
increase in the company's NAV total return over the past five years is 
ahead of the 2.9% increase in the broad UK equity market index which we 
use as a comparator. 
   We announced in September 2018 that our aim in the medium term is to 
generate a return on ordinary activities sufficient to support an annual 
dividend yield of 5% of opening NAV.  Whilst the unrealised reduction in 
the value of the investments held has contributed to a negative return 
for the current year, the board continues to carefully assess the 
potential of the investment portfolio to increase shareholder value in 
the future.  Your directors are aware of the importance to shareholders 
of receiving regular dividend payments and after very careful 
deliberations are proposing a final dividend of 1.5 pence per share in 
respect of the year ended 31 March 2020.  If approved at the annual 
general meeting, the final dividend will be paid on 4 September 2020 to 
shareholders on the register on 14 August 2020.  Taken with the interim 
dividend of 2.0 pence per share paid in January 2020, this makes a total 
annual dividend of 3.5 pence per share, equivalent to a tax-free yield 
of 5.4% per share by reference to the opening NAV. 
   The target dividend yield will remain subject to regular review and the 
level of future dividend distributions will have regard to the level of 
returns generated by the company in the medium term, the timing of 
investment realisations, the availability of distributable reserves and 
continuing compliance with the VCT scheme rules. 
   Investment manager update 
   In December 2019, your directors consented to the novation of the 
company's investment management agreement with NVM Private Equity LLP 
(NVM) to Mercia Fund Management Limited (Mercia) which became effective 
on 23 December 2019.  After lengthy consideration and commissioning 
professional due diligence, your directors concluded that the change in 
manager is a positive development for your company and that it comes at 
the right time in the continuing evolution of the VCT sector.  In 
reaching this conclusion your directors identified a number of potential 
benefits to the company including increased deal flow from Mercia's 
extensive network of early stage funds, an enhanced regional presence 
and access to further value-adding resources provided by the wider 
Mercia group.  In order to ensure continuity of service, the NVM VCT 
team, led by partners Tim Levett and Charlie Winward, transferred to 
Mercia and now constitutes the new autonomous VCT division within the 
Mercia group. We believe that the combination of the former NVM 
investment team with Mercia's venture credentials will create one of the 
UK's leading regionally based venture fund management groups.  No 
material changes were made to the terms of the investment management 
   Investment portfolio 
   Following the first reports of COVID-19 at the end of 2019, the virus 
spread rapidly during the first quarter of 2020 and was characterised as 
a global pandemic by the World Health Organisation on 11 March 2020. 
The evolving situation has presented our portfolio companies with 
significant challenges that are likely to persist for some time.  Our 
venture capital portfolio is diversified, with no particular 
concentration on any one end-market sector and as such the impact on 
individual investments varies considerably. 
   Measures intended to reduce the spread of the virus in the UK including 
the temporary closure of certain businesses and restrictions on the 
movement of people were announced at the end of March 2020. Whilst a 
number of portfolio businesses faced the prospect of an immediate and 
significant drop in revenues as a result of the 'lockdown', a number of 
our companies observed an increase in activity, particularly those such 
as Oddbox, CurrentBody and Entertainment Magpie which deploy an 
ecommerce business model.  A full review of the portfolio was undertaken 
to identify key risks and to prioritise various mitigating actions.  Our 
manager typically provides support in the form of an investment 
executive to the board of each unquoted portfolio company. In all cases 
the executives have been working closely with investee management teams 
to make plans either to preserve cash until the immediate disruption 
subsides or to find ways of increasing working capital to support 
current levels of trading. 
   We continue to follow the International Private Equity and Venture 
Capital Valuation (IPEV) guidelines, being the industry accepted best 
practice, when determining the fair value of our investments.  Although 
the vast majority of our portfolio is represented by unquoted 
investments, the IPEV guidelines require that all investment valuations 
reflect the market conditions prevailing as at the valuation date. 
Taking relevant quoted markets as a benchmark, the valuation data for 
many of the sectors in which we invest indicated a reduction during the 
first quarter of 2020.  Having most recently undertaken a full valuation 
of the portfolio as at 24 March 2020 to support the NAV which the 
company announced as at that date, we have considered all relevant 
information that could have been known as at 31 March 2020 in order to 
assess the valuations as at the financial year end.  We have also taken 
account of supplementary IPEV guidance relating to the COVID-19 pandemic, 
issued on 31 March 2020.  The passage of time since the last NAV 
announcement has enabled the directors to receive more up to date 
trading information for investee companies as at 31 March 2020 and to 
refine our estimates.  The net result of this detailed process is an 
unrealised reduction in the value of the unquoted portfolio contributing 
to a reduced NAV per share of 53.5 pence.  The reduction, whilst 
substantial, is slightly less severe than the movement deduced for the 
purpose of calculating the NAV as at 24 March 2020 of 50.0 pence. 
   Venture capital investment activity 
   During the year, further progress has been made in the development of 
the venture capital portfolio. We are still actively seeking to make new 
investments particularly as periods of recovery from recession have in 
the past often proven to be a good time to invest. Following our 
rigorous investment process, seven new VCT-qualifying investments were 
completed in the year prior to the 'lockdown' at a total cost of GBP4.3 
million. A number of our investee businesses are pursuing strategies 
that may be accelerated in the current environment, such as innovative 
delivery and distribution, the digitisation of traditional off-line 
business processes and the development of advanced medical technologies. 
Many are examples of businesses which are not only meeting the changing 
demands of consumers and clients but are also responding to evolving 
social and environmental challenges. As previously highlighted, the 
businesses in the earlier stage portfolio are likely to require multiple 
rounds of funding as they scale up.  Follow-on investments totalling 
GBP5.8 million were made in 16 existing portfolio companies during the 
year to support their continued development. The total investment rate 
of GBP10.1 million is encouraging and maintains the momentum established 
over the past two years (2019: GBP10.3 million and 2018: GBP10.1 
million). Inevitably in a portfolio of this type there will be some 
early losses of which we incurred one in the year with the sale of 
Primal Food for a nominal sum. 
   Share offer and liquidity 
   Having reviewed the medium-term investment pipeline with NVM in 
September 2019, your board proposed a prospectus share offer which was 
launched in January 2020.  We were very pleased that strong demand was 
experienced for this offer, with gross proceeds of GBP12.5 million being 
raised and new shares allotted shortly after the year end.  Your 
directors would like to express their appreciation of the support from 
the existing shareholders who participated in the offer and the nearly 
600 new shareholders whom we welcome to the share register. 
   Gross proceeds of GBP1.0 million were received during the year through 
the issue of new shares under our dividend investment scheme.  This 
scheme enables shareholders to re-invest some or all of their dividends 
in new shares attracting income tax relief and remains open to new 
   We have maintained our policy of being willing to buy back the company's 
shares in the market, when necessary in order to maintain liquidity, at 
a 5% discount to NAV.  During the year, a total of 3,048,000 shares were 
repurchased for cancellation, equivalent to approximately 2.3% of the 
opening share capital. 
   Annual general meeting 
   The company's annual general meeting (AGM) will take place in August 
2020.  The AGM usually provides an excellent opportunity for 
shareholders, directors and the manager to meet in person and exchange 
views and comment. However, the health and wellbeing of both 
shareholders and colleagues is of upmost importance to the board and 
therefore in the light of the changeable situation regarding guidance on 
non-essential travel and social distancing, we have concluded that the 
AGM should not be open to physical attendance by shareholders. Detailed 
arrangements are however being made to enable virtual attendance and 
shareholders will be invited to submit proxy votes and questions in 
advance of the meeting.  Full details and formal notice of the AGM will 
be provided shortly. 
   Board of directors 
   All the directors will be seeking re-election at the AGM in accordance 
with the AIC Code of Corporate Governance. 
   VCT legislation and regulation 
   Following the significant amendments to the relevant legislation 
announced in both 2015 and 2017, the past two years have seen a welcome 
period of regulatory stability.  The final change which has been phased 
into practice is the increase in the minimum proportion of investments 
required to be held by a VCT in VCT-qualifying holdings, from 70% to 
80%.  This first applied to the company with effect from 1 April 2020 
and I am pleased to report that the target was met in advance of the 
   VCT qualifying status 
   The company has continued to meet the stringent and evolving qualifying 
conditions laid down by HM Revenue & Customs for maintaining its 
approval as a VCT.  Mercia monitors the position closely and reports 
regularly to the board.  Philip Hare & Associates LLP has continued to 
act as independent adviser to the company on VCT taxation matters. 
   Whilst the COVID-19 pandemic, and the measures necessary to respond to 
it, present unprecedented economic challenges for businesses operating 
in the UK and globally, the board has been reassured by the manager's 
swift and proactive response and the level of support which has been 
provided to investee companies.  Making definitive statements about the 
future trajectory of the economy is not possible in times of such 
heightened uncertainty. Nonetheless we remain committed to supporting 
the development and prosperity of entrepreneurial early stage 
businesses.  Access to capital is one of the most important factors 
contributing to the success of such businesses and your board believes 
that the company is well placed to provide that vital support with a 
view to enhancing shareholder value in the long term. 
   David Gravells 
   Chairman                                                                                                                    8 July 2020 
   Extracts from the audited financial statements for the year ended 31 
March 2020 are set out below. 
   for the year ended 31 March 2020 
                   Year ended 31 March 2020            Year ended 31 March 2019 
               Revenue     Capital      Total      Revenue     Capital      Total 
                GBP000      GBP000      GBP000      GBP000      GBP000      GBP000 
 on disposal 
 investments           -       (728)       (728)           -       2,827       2,827 
Movements in 
 fair value 
 investments           -     (8,050)     (8,050)           -         762         762 
              ----------  ----------  ----------  ----------  ----------  ---------- 
                       -     (8,778)     (8,778)           -       3,589       3,589 
Income             1,052           -       1,052       2,638           -       2,638 
 fee               (431)     (1,293)     (1,724)       (399)     (1,198)     (1,597) 
 expenses          (369)           -       (369)       (393)           -       (393) 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return on 
 before tax          252    (10,071)     (9,819)       1,846       2,391       4,237 
Tax on 
 return on 
 activities            -           -           -       (275)         275           - 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return on 
 after tax           252    (10,071)     (9,819)       1,571       2,666       4,237 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return per 
 share              0.2p      (7.2)p      (7.0)p        1.2p        2.0p        3.2p 
   as at 31 March 2020 
                                                  31 March 2020  31 March 2019 
                                                      GBP000         GBP000 
Fixed assets: 
 Investments                                             59,191         64,125 
                                                     ----------     ---------- 
Current assets: 
 Debtors                                                     79            221 
 Cash and cash equivalents                               15,203         26,431 
                                                     ----------     ---------- 
                                                         15,282         26,652 
Creditors (amounts falling due within one year)           (117)        (6,668) 
                                                     ----------     ---------- 
Net current assets                                       15,165         19,984 
                                                     ----------     ---------- 
Net assets                                               74,356         84,109 
                                                     ----------     ---------- 
Capital and reserves: 
Called-up equity share capital                            6,945          6,502 
Share premium                                             8,401          1,555 
Capital redemption reserve                                  367            215 
Capital reserve                                          61,247         67,341 
Revaluation reserve                                     (2,993)          6,679 
Revenue reserve                                             389          1,817 
                                                     ----------     ---------- 
Total equity shareholders' funds                         74,356         84,109 
                                                     ----------     ---------- 
Net asset value per share                                 53.5p          64.7p 
   for the year ended 31 March 2020 
               ---------------Non-distributable reserves---------------  Distributable reserves         Total 
               Called up share     Share     redemption    Revaluation     Capital      Revenue 
                   capital        premium     reserve        reserve*      reserve      reserve 
                   GBP000         GBP000      GBP000         GBP000        GBP000        GBP000        GBP000 
At 1 April 
 2019                    6,502       1,555          215           6,679      67,341       1,817        84,109 
Return on 
after tax                    -           -            -         (9,672)       (399)         252       (9,819) 
 paid                        -           -            -               -     (3,904)     (1,680)       (5,584) 
Net proceeds 
 of share 
 issues                    595       6,846            -               -           -           -         7,441 
 cancellation            (152)           -          152               -     (1,791)           -   (1,791) 
                    ----------  ----------   ----------      ----------  ----------  ----------    ---------- 
At 31 March 
 2020                    6,945       8,401          367         (2,993)      61,247         389    74,356 
                    ----------  ----------   ----------      ----------  ----------  ----------    ---------- 
   for the year ended 31 March 2019 
               ---------------Non-distributable reserves---------------  Distributable reserves     Total 
               Called up share     Share     redemption    Revaluation     Capital      Revenue 
                   capital        premium     reserve        reserve*      reserve      reserve 
                   GBP000         GBP000      GBP000         GBP000        GBP000      GBP000       GBP000 
At 1 April 
 2018                    6,505         392          110           7,836      71,629          571      87,043 
Return on 
after tax                    -           -            -         (1,157)       3,823        1,571       4,237 
 paid                        -           -            -               -     (6,831)        (325)     (7,156) 
Net proceeds 
 of share 
 issues                    102       1,163            -               -           -            -       1,265 
 cancellation            (105)           -          105               -     (1,280)            -     (1,280) 
                    ----------  ----------   ----------      ----------  ----------   ----------  ---------- 
At 31 March 
 2019                    6,502       1,555          215           6,679      67,341        1,817      84,109 
                    ----------  ----------   ----------      ----------  ----------   ----------  ---------- 
   *the revaluation reserve is generally non-distributable other than that 
part of the reserve relating to gains/losses on readily realisable 
quoted investments, which is distributable. 
   for the year ended 31 March 2020 
                                             Year ended     Year ended 
                                            31 March 2020  31 March 2019 
                                               GBP000         GBP000 
Cash flows from operating activities: 
Return on ordinary activities before tax          (9,819)          4,237 
Adjustments for: 
Loss/(gain) on disposal of investments                728        (2,827) 
Movements in fair value of investments              8,050             (762) 
Decrease/(increase) in debtors                        142           (16) 
(Decrease)/increase in creditors                     (83)             66 
                                               ----------     ---------- 
Net cash (outflow)/inflow from operating 
 activities                                         (982)            698 
                                               ----------     ---------- 
Cash flows from investing activities: 
Purchase of investments                          (11,850)       (17,730) 
Sale/repayment of investments                       8,006         18,626 
                                               ----------     ---------- 
Net cash (outflow)/inflow from investing 
 activities                                       (3,844)            896 
                                               ----------     ---------- 
Cash flows from financing activities: 
Issue of ordinary shares                            7,568          1,304 
Share issue expenses                                (127)           (39) 
Share subscriptions held pending allotment        (6,468)          6,468 
Purchase of ordinary shares for 
 cancellation                                     (1,791)        (1,280) 
Equity dividends paid                             (5,584)        (7,156) 
                                               ----------     ---------- 
Net cash outflow from financing activities        (6,402)          (703) 
                                               ----------     ---------- 
(Decrease)/increase in cash and cash 
 equivalents                                     (11,228)            891 
Cash and cash equivalents at beginning of 
 year                                              26,431         25,540 
                                               ----------     ---------- 
Cash and cash equivalents at end of year           15,203         26,431 
                                               ----------     ---------- 
   as at 31 March 2020 
                                                                    % of 
                                            Cost      Valuation   net assets 
                                           GBP000      GBP000      by value 
 Fifteen largest venture capital 
 Agilitas IT Holdings                          930        5,215          7.0 
 Lineup Systems                                975        4,137          5.6 
 Currentbody.com                             1,771        3,073          4.1 
 Sorted Holdings                             2,715        2,958          4.0 
 Entertainment Magpie Group                  1,503        2,853          3.8 
 SHE Software Group                          2,195        2,720          3.7 
Volumatic Holdings                             906        1,898          2.6 
 It's All Good                               1,145        1,698          2.3 
 Biological Preparations Group               2,166        1,605          2.2 
 Knowledgemotion                             1,778        1,559          2.1 
 GRIP-UK t.a. Climbing Hangar                1,928        1,522          2.0 
 Medovate                                    1,450        1,450          2.0 
 Soda Software t.a. Hello Soda               1,499        1,391          1.9 
 Clarilis                                    1,012        1,206          1.6 
 Intelling Group                             1,142        1,056          1.4 
                                        ----------   ----------     -------- 
                                            23,115       34,341         46.3 
 Other venture capital investments          31,440       17,883         23.9 
                                        ----------   ----------     -------- 
 Total venture capital investments          54,555       52,224         70.2 
 Listed equity investments                   6,381        5,691          7.7 
 Listed interest-bearing investments         1,248        1,276          1.7 
                                        ----------   ----------     -------- 
 Total fixed asset investments              62,184       59,191         79.6 
 Net current assets                                      15,165         20.4 
                                                     ----------     -------- 
 Net assets                                              74,356        100.0 
                                                     ----------     -------- 
   The board carries out a regular and robust assessment of the risk 
environment in which the company operates and seeks to identify new 
risks as they emerge.  The principal and emerging risks and 
uncertainties identified by the board which might affect the company's 
business model and future performance, and the steps taken with a view 
to their mitigation, are as follows: 
   Investment and liquidity risk: investment in smaller and unquoted 
companies, such as those in which the company invests, involves a higher 
degree of risk than investment in larger listed companies because they 
generally have limited product lines, markets and financial resources 
and may be more dependent on key individuals. The securities of smaller 
companies in which the company invests are typically unlisted, making 
them illiquid, and this may cause difficulties in valuing and disposing 
of the securities. The company may invest in businesses whose shares are 
quoted on AIM -- the fact that a share is quoted on AIM does not mean 
that it can be readily traded and the spread between the buying and 
selling prices of such shares may be wide. Mitigation: the directors aim 
to limit the risk attaching to the portfolio as a whole by careful 
selection, close monitoring and timely realisation of investments, by 
carrying out rigorous due diligence procedures and maintaining a wide 
spread of holdings in terms of financing stage and industry sector, 
within the rules of the VCT scheme. The board reviews the investment 
portfolio with the manager on a regular basis. 
   Financial risk: most of the company's investments involve a medium to 
long-term commitment and many are relatively illiquid. Mitigation: the 
directors consider that it is inappropriate to finance the company's 
activities through borrowing except on an occasional short-term basis. 
Accordingly they seek to maintain a proportion of the company's assets 
in cash or cash equivalents in order to be in a position to pursue new 
unquoted investment opportunities and to make follow-on investments in 
existing portfolio companies. The company has very little direct 
exposure to foreign currency risk and does not enter into derivative 
   Economic risk: events such as economic recession or general fluctuation 
in stock markets, exchange rates and interest rates may affect the 
valuation of investee companies and their ability to access adequate 
financial resources, as well as affecting the company's own share price 
and discount to net asset value. The level of economic risk has been 
elevated by the COVID-19 pandemic which is widely predicted to cause a 
global recession after the balance sheet date.  Mitigation: the company 
invests in a diversified portfolio of investments spanning various 
industry sectors, and maintains sufficient cash reserves to be able to 
provide additional funding to investee companies where it is appropriate 
and in the interests of the company to do so.  The manager typically 
provides an investment executive to actively support the board of each 
unquoted investee company.  At all times, and particularly during 
periods of heightened economic uncertainty, the investment executives 
share best practice from across the portfolio with investee management 
teams in order to mitigate economic risk. 
   Brexit risk: the implementation of the decision for the UK to withdraw 
from the European Union (EU) is a process which involves significant 
uncertainty.  The impact on the future business environment in the UK is 
therefore difficult to predict.  Mitigation: whilst we do not expect 
that Brexit will have a significant impact on the operations of Northern 
2 VCT itself, the board and the manager follow Brexit developments 
closely with a view to identifying changes which might affect the 
company's investment portfolio.  The manager works closely with investee 
companies in order to plan for a range of possible outcomes. 
   Stock market risk: some of the company's investments are quoted on the 
London Stock Exchange or AIM and will be subject to market fluctuations 
upwards and downwards. External factors such as terrorist activity or 
global health crises, such as the COVID-19 pandemic, can negatively 
impact stock markets worldwide. In times of adverse sentiment there may 
be very little, if any, market demand for shares in smaller companies 
quoted on AIM. Mitigation: the company's quoted investments are actively 
managed by specialist managers, including Mercia in the case of the 
AIM-quoted investments, and the board keeps the portfolio and the 
actions taken under ongoing review. 
   Credit risk: the company holds a number of financial instruments and 
cash deposits and is dependent on the counterparties discharging their 
commitment. Mitigation: the directors review the creditworthiness of the 
counterparties to these instruments and cash deposits and seek to ensure 
there is no undue concentration of credit risk with any one party. 
   Legislative and regulatory risk: in order to maintain its approval as a 
VCT, the company is required to comply with current VCT legislation in 
the UK, which reflects the European Commission's State-aid rules. 
Changes to the UK legislation or the State-aid rules in the future could 
have an adverse effect on the company's ability to achieve satisfactory 
investment returns whilst retaining its VCT approval. Mitigation: the 
board and the manager monitor political developments and where 
appropriate seek to make representations either directly or through 
relevant trade bodies. 
   Internal control risk: the company's assets could be at risk in the 
absence of an appropriate internal control regime which is able to 
operate effectively even during times of disruption, such as that caused 
by COVID-19. Mitigation: the board regularly reviews the system of 
internal controls, both financial and non-financial, operated by the 
company and the manager. These include controls designed to ensure that 
the company's assets are safeguarded and that proper accounting records 
are maintained. 
   VCT qualifying status risk: while it is the intention of the directors 
that the company will be managed so as to continue to qualify as a VCT, 
there can be no guarantee that this status will be maintained. A failure 
to continue meeting the qualifying requirements could result in the loss 
of VCT tax relief, the company losing its exemption from corporation tax 
on capital gains, to shareholders being liable to pay income tax on 
dividends received from the company and, in certain circumstances, to 
shareholders being required to repay the initial income tax relief on 
their investment. Mitigation: the investment manager keeps the company's 
VCT qualifying status under continual review and its reports are 
reviewed by the board on a quarterly basis. The board has also retained 
Philip Hare & Associates LLP to undertake an independent VCT status 
monitoring role. 
   The directors are responsible for preparing the annual report and the 
financial statements in accordance with applicable law and regulations. 
   Company law requires the directors to prepare financial statements for 
each financial year. Under that law they have elected to prepare the 
financial statements in accordance with UK Accounting Standards, 
including FRS 102 "The Financial Reporting Standard applicable in the UK 
and Republic of Ireland". 
   Under company law the directors must not approve the financial 
statements unless they 
   are satisfied that they give a true and fair view of the state of 
affairs of the company and of 
   its profit or loss for the year. 
   In preparing the financial statements, the directors are required to (i) 
select suitable accounting policies and then apply them consistently; 
(ii) make judgements and estimates that are reasonable and prudent; 
(iii) state whether applicable UK Accounting Standards have been 
followed, subject to any material departures disclosed and explained in 
the financial statements;  (iv) assess the company's ability to continue 
as a going concern, disclosing, as applicable, matters related to going 
concern; and (v) prepare the financial statements on the going concern 
basis unless they either intend to liquidate the company or to cease 
operations, or have no realistic alternative but to do so. 
   The directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the company's transactions and 
disclose with reasonable accuracy at any time the financial position of 
the company and enable them to ensure that the financial statements 
comply with the Companies Act 2006. They are responsible for such 
internal control as they determine is necessary to enable the 
preparation of financial statements that are free from material 
misstatement, whether due to fraud or error, and have general 
responsibility for taking such steps as are reasonably open to them to 
safeguard the assets of the company and to prevent and detect fraud and 
other irregularities. 
   Under applicable law and regulations, the directors are also responsible 
for preparing a strategic report, directors' report, directors' 
remuneration report and corporate governance statement that comply with 
that law and those regulations. 
   The directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company's website. 
Legislation in the UK governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions. 
   The directors have confirmed that to the best of their knowledge (i) the 
financial statements, prepared in accordance with the applicable set of 
accounting standards, give a true and fair view of the assets, 
liabilities, financial position and profit or loss of the company;  and 
(ii) the directors' report and strategic report include a fair review of 
the development and performance of the business and the position of the 
company, together with a description of the principal risks and 
uncertainties that they face. 
   The directors consider that the annual report and accounts, taken as a 
whole, is fair, balanced and understandable and provides the information 
necessary for shareholders to assess the company's position and 
performance, business model and strategy. 
   The directors of the company at the date of this announcement were Mr D 
P A Gravells (Chairman), Mr A M Conn, Mr S P Devonshire, Miss C A 
McAnulty and Mr F L G Neale. 
   The financial information set out above does not constitute the 
company's statutory accounts for the years ended 31 March 2020 or 2019 
but is derived from those accounts. Statutory accounts for 2019 have 
been delivered to the registrar of companies, and those for 2020 will be 
delivered in due course. The auditor has reported on those accounts; 
their reports were (i) unqualified; (ii) did not include a reference to 
any matters to which the auditor drew attention by way of emphasis 
without qualifying their report; and (iii)    did not contain a 
statement under section 498 (2) or (3) of the Companies Act 2006. 
   The calculation of the return per share is based on the loss on ordinary 
activities after tax for the year of GBP9,819,000 (2019: GBP4,237,000) 
and on 139,793,223 (2019: 130,606,159) shares, being the weighted 
average number of shares in issue during the year. 
   The calculation of the net asset value per share as at 31 March 2020 is 
based on the net assets of GBP74,356,000 (2019: GBP84,109,000) divided 
by the 138,886,797 (2019: 130,044,260) ordinary shares in issue at that 
   If approved by shareholders, the proposed final dividend of 1.5p per 
share for the year ended 31 March 2020 will be paid on 4 September 2020 
to shareholders on the register at the close of business on 14 August 
   The full annual report including financial statements for the year ended 
31 March 2020 is expected to be posted to shareholders on or around 27 
July 2020 and will be available to the public at the registered office 
of the company at Time Central, 32 Gallowgate, Newcastle upon Tyne NE1 
4SN and on the company's website. 
   Neither the contents of the NVM Private Equity LLP or the Mercia Asset 
Management PLC website,  nor the contents of any website accessible from 
hyperlinks on the NVM Private Equity LLP or Mercia Asset Management PLC 
website (or any other website), are incorporated into, or forms part of, 
this announcement. 

(END) Dow Jones Newswires

July 08, 2020 11:25 ET (15:25 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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