TIDMNTV 
 
 
   1 DECEMBER 2020 
 
   NORTHERN 2 VCT PLC 
 
   UNAUDITED HALF-YEARLY FINANCIAL REPORT 
 
   FOR THE SIX MONTHSED 30 SEPTEMBER 2020 
 
   Northern 2 VCT PLC is a Venture Capital Trust (VCT) managed by Mercia 
Fund Management.  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 highlights (comparative figures as at 30 September 2019 and 31 
March 2020) 
 
 
 
 
 
                                                    Six months ended  Six months ended    Year ended 
                                                      30 September      30 September       31 March 
                                                          2020              2019             2020 
                                                    ----------------  ----------------  ------------ 
Net assets                                             GBP104.8m          GBP88.0m        GBP74.4m 
Net asset value per share                                64.3p             63.0p           53.5p 
Return per share: 
 Revenue                                                  0.3p              0.1p            0.2p 
 Capital                                                  12.5p             0.3p           (7.2)p 
 Total                                                    12.8p             0.4p           (7.0)p 
Dividend per share declared 
 in respect of the period                                 2.0p              2.0p            3.5p 
Cumulative returns to shareholders 
 since launch: 
 Net asset value per share                                64.3p             63.0p           53.5p 
 Dividends paid per share*                               122.9p            119.4p          121.4p 
 Net asset value plus dividends paid per share           187.2p            182.4p          174.9p 
Mid-market share price at end of period                  51.05p            59.00p          47.50p 
Share price discount to net asset value                        20.6%              6.3%         11.2% 
Tax-free dividend yield (based on net asset value 
 per share)**                                                   5.6%              6.2%          5.4% 
 
   *Excluding interim dividend not yet paid 
 
   **The annualised dividend yield is calculated by dividing the dividends 
in respect of the 12 month period ended on each reference date by the 
net asset value per share at the start of the period. 
 
   For further information, please contact: 
 
   NVM Private Equity LLP 
 
   Simon John/James Bryce                    0191 244 6000 
 
   Website:  www.nvm.co.uk 
 
   Martin Glanfield, Chief Financial Officer, Mercia Asset Management PLC 
-- 0330 223 1430 
 
   HALF-YEARLY MANAGEMENT REPORT TO SHAREHOLDERS 
 
   The last six months have been dominated by the necessary responses to 
the coronavirus (COVID-19) pandemic.  Whilst many of our portfolio 
companies have been facing unprecedented operational challenges, I am 
pleased to report that the management teams of our investee companies 
have demonstrated resilience in their response to the evolving 
situation. Our investment manager, Mercia, also continues to provide 
close support to the portfolio whilst observing Government guidelines. 
As a result of the successful share offer which concluded in April 2020, 
your company is well positioned to continue to support and promote its 
growing portfolio of entrepreneurial businesses. 
 
   Results and dividend 
 
   The unaudited net asset value (NAV) per share at 30 September 2020 was 
64.3 pence (53.5 pence (audited) at 31 March 2020) and is stated after 
deducting the final dividend of 1.5 pence per share in respect of the 
2019/20 financial year which was paid in September 2020.  The return per 
share as shown in the income statement for the six months ended 30 
September 2020 was 12.8 pence, compared with 0.4 pence in the 
corresponding period last year. The total return for the period was 
primarily driven by an increase in the directors' valuations of unquoted 
investments, which are as a result of our usual detailed and thorough 
valuation process. 4.1 pence of the return for the period was 
represented by the increase in the valuation of the holding in Agilitas 
IT Holdings, which was sold after the end of the period for GBP11.9 
million in cash and an overall return of more than eight times the 
original cost of the investment over its lifetime. Investment income 
increased to GBP949,000 from GBP609,000 during the same period last year 
reflecting the recognition of interest arrears from portfolio companies 
where we had agreed to defer payments earlier in the year, pending a 
better understanding of the pandemic and its effects on trading. 
 
   After careful consideration, the board has declared an unchanged interim 
dividend for the year ending 31 March 2021 of 2.0 pence per share, which 
will be paid on 29 January 2021 to shareholders who are on the register 
on 8 January 2021. 
 
   Venture capital investment activity 
 
   Notwithstanding the difficult context during the COVID-19 pandemic, 
further progress was made on the development of the portfolio during the 
period with one new investment added to the venture capital portfolio. 
GBP0.7m was invested in Enate, a human and digital workforce management 
software solution.  Following a high volume of fund-raising activity 
across the sector in recent years, there is currently a significant 
level of funding available for venture capital and private equity 
investing. This inevitably increases competition for attractive 
investment opportunities; however your board continues to apply its 
usual high standards in its appraisal of potential new investments. 
 
   Importantly, we continue to experience an encouraging level of follow-on 
investment activity across the earlier stage portfolio. GBP1.9 million 
of capital was provided to six existing investee companies to support 
further growth ambitions, representing around 72% by value of investment 
activity during the period. 
 
   It was a relatively quiet period for investment realisations, however 
the holding of AIM listed Cello Health plc was sold in full following an 
agreed takeover bid, for proceeds of GBP0.4m representing a gain of 60% 
above its original cost.  Positive underlying trading trends were 
observed in a number of portfolio companies including Agilitas IT 
Holdings which was sold subsequent to the balance sheet date as reported 
above. 
 
   Venture capital portfolio update 
 
   Following the first reports of COVID-19 in the prior financial year, the 
initial effects in the UK principally impacted businesses with complex 
supply chains or overseas customers.  As the spread of the virus led to 
a global pandemic, the effect on the economy has become much more 
pronounced and Government measures taken to address the COVID-19 crisis 
have inevitably had a material impact on almost every business in the 
UK. 
 
   Your company benefits from holding a diversified portfolio of 
investments and the areas of the economy which continue to be the most 
affected, particularly travel, leisure and hospitality, represent just 
10% by cost of the venture capital portfolio. Technology and software 
sub-sectors have been more resilient during 2020 and investments in 
these areas represent over 40% by cost of the venture capital portfolio. 
We are also invested in a number of businesses which employ a purely 
e-commerce business model.  Trading in several of these holdings has 
been extremely strong both during the initial lockdown and subsequently, 
leading to the relevant valuations being increased as at 30 September 
2020. 
 
   Shareholder issues 
 
   As a result of the share offer launched in January 2020, 24,444,699 
shares were issued during the period for gross proceeds of GBP12.5 
million. In addition a total of GBP0.4 million was received during the 
period through the issue of new shares under our dividend investment 
scheme. 
 
   Having carefully considered the current level of liquid resources 
available to the company, in the light of the sale of Agilitas IT 
Holdings and the potential to realise other investments over the next 12 
months, the board is not proposing a share offer for the 2020-21 tax 
year.  The company's dividend investment scheme remains open, enabling 
shareholders to re-invest some or all of their dividends in new shares 
attracting income tax relief. 
 
   The company has maintained its policy of buying back its own shares in 
the market from time to time, at a discount of 5% to NAV.  During the 
period, 1,006,114 shares were purchased for cancellation, for a total 
consideration of GBP511,000. 
 
   VCT qualifying status and legislation 
 
   The company has continued to meet the stringent qualifying conditions 
laid down by HM Revenue & Customs for maintaining its approval as a VCT. 
Our investment manager 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. 
 
   As previously reported, the VCT rules have continued to evolve to meet 
the UK Government's aim of driving investment towards the smaller 
companies most in need of capital to grow.  One of the most significant 
changes being 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 new threshold first applied to your 
company from 1 April 2020 and I am pleased to report that the target was 
met in advance of the deadline. 
 
   Independent auditor 
 
   The audit committee regularly reviews the requirements and deadlines for 
mandatory audit tendering and rotation; under current regulations the 
last period for which KPMG LLP would be permitted to act as auditor of 
the company would be the year ending 31 March 2023. In the interest of 
good governance, the audit committee conducted a tender process in 
November 2020. Having considered the results of the tender, the board 
approved the audit committee's recommendation that Mazars LLP, an 
international firm of chartered accountants, be appointed as independent 
auditor of the company for the year ending 31 March 2021. 
 
   Prospects 
 
   Financial markets have been subject to significant volatility during 
2020 as market participants have struggled to assess the medium term 
impact of the pandemic on various sectors and the economy as a whole. 
Whilst we are encouraged by the resilience exhibited by the portfolio 
overall thus far it is not possible to make definitive statements about 
the future trajectory of the economy at times of such heightened 
uncertainty. 
 
   COVID-19 has accelerated certain trends which were already established 
and is benefitting portfolio companies that employ business strategies 
such as innovative delivery and distribution and the digitisation of 
traditional off-line business processes.  In addition to supporting 
portfolio companies with their specific challenges, Mercia is also 
working with several companies with a view to achieving a profitable 
exit in the next 12 months.  Access to capital is one of the most 
important factors contributing to the success of early stage businesses 
and your board believes that the company continues to be well placed to 
provide that vital support with a view to increasing long term 
shareholder value. 
 
   On behalf of the Board 
 
   David Gravells 
 
   Chairman 
 
   The unaudited half-yearly financial statements for the six months ended 
30 September 2020 are set out 
 
   below. 
 
   INCOME STATEMENT 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                       Six months ended                    Six months ended 
                       30 September 2020                   30 September 2019 
               Revenue     Capital      Total      Revenue     Capital      Total 
                GBP000      GBP000      GBP000      GBP000      GBP000      GBP000 
Gain on 
 disposal of 
 investments           -         332         332           -          46          46 
Movements in 
 fair value 
 of 
 investments           -      20,546      20,546           -         954         954 
              ----------  ----------  ----------  ----------  ----------  ---------- 
                       -      20,878      20,878           -       1,000       1,000 
Income               949           -         949         609           -         609 
Investment 
 management 
 fee               (204)       (611)       (815)       (206)       (617)       (823) 
Other 
 expenses          (191)           -       (191)       (191)           -       (191) 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return on 
 ordinary 
 activities 
 before tax          554      20,267      20,821         212         383         595 
Tax on 
 return on 
 ordinary 
 activities            -           -           -        (15)          15           - 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return on 
 ordinary 
 activities 
 after tax           554      20,267      20,821         197         398         595 
              ----------  ----------  ----------  ----------  ----------  ---------- 
Return per          0.3p       12.5p       12.8p        0.1p        0.3p        0.4p 
 share 
 
 
 
 
 
 
                                             Year ended 31 March 2020 
                                         Revenue     Capital       Total 
                                          GBP000      GBP000       GBP000 
Gain on disposal of investments                  -       (728)        (728) 
Movements in fair value of investments           -     (8,050)      (8,050) 
                                        ----------  ----------   ---------- 
                                                 -     (8,778)      (8,778) 
Income                                       1,052           -        1,052 
Investment management fee                    (431)     (1,293)      (1,724) 
Other expenses                               (369)           -        (369) 
                                        ----------  ----------   ---------- 
Return on ordinary activities before 
 tax                                           252    (10,071)      (9,819) 
Tax on return on ordinary 
activities                                       -           -            - 
                                        ----------  ----------   ---------- 
Return on ordinary activities after 
 tax                                           252    (10,071)      (9,819) 
                                        ----------  ----------   ---------- 
Return per share                              0.2p      (7.2)p       (7.0)p 
 
   BALANCE SHEET 
 
   (unaudited) as at 30 September 2020 
 
 
 
 
                           30 September 2020  30 September 2019  31 March 2020 
                                 GBP000             GBP000           GBP000 
 
Fixed assets: 
 Investments                     81,920             65,040           59,191 
                              ----------         ----------       ---------- 
Current assets: 
 Debtors                                 620              1,088             79 
 Cash and cash 
  equivalents                         22,369             21,890         15,203 
                                  ----------         ----------     ---------- 
                                      22,989             22,978         15,282 
Creditors (amounts 
falling due 
  within one year)                      (77)               (64)          (117) 
                                  ----------         ----------     ---------- 
Net current assets                    22,912             22,914         15,165 
                                  ----------         ----------     ---------- 
 
Net assets                           104,832             87,954         74,356 
                                  ----------         ----------     ---------- 
Capital and reserves: 
 Called-up equity share 
  capital                              8,154              6,980          6,945 
 Share premium                        19,753              7,958          8,401 
 Capital redemption 
  reserve                                418                291            367 
 Capital reserve                      57,787             66,054         61,247 
 Revaluation reserve                  17,780              6,061        (2,993) 
 Revenue reserve                         940                610            389 
                                  ----------         ----------     ---------- 
Total equity 
 shareholders' funds                 104,832             87,954         74,356 
                                  ----------         ----------     ---------- 
Net asset value per share              64.3p              63.0p          53.5p 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                           -----------------Non-distributable 
                                reserves-----------------                  Distributable reserves     Total 
                                              Capital 
               Called up share     Share     redemption     Revaluation      Capital      Revenue 
                   capital        premium     reserve         reserve*       reserve      reserve 
                   GBP000         GBP000      GBP000          GBP000         GBP000      GBP000       GBP000 
At 1 April 
 2020                    6,945       8,401          367           (2,993)      61,247          389      74,356 
Return on 
ordinary 
activities 
after tax                    -           -            -            20,773       (503)          551      20,821 
Dividends 
 paid                        -           -            -                 -     (2,446)            -     (2,446) 
Net proceeds 
 of share 
 issues                  1,260      11,352            -                 -           -            -      12,612 
Shares 
purchased for 
cancellation              (51)           -           51                 -       (511)            -       (511) 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
At 30 
 September 
 2020                    8,154      19,753          418            17,780      57,787          940     104,832 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   (unaudited) for the six months ended 30 September 2019 
 
 
 
 
                           -----------------Non-distributable 
                                reserves-----------------                  Distributable reserves     Total 
                                              Capital 
               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 
ordinary 
activities 
after tax                    -           -            -             (618)       1,016          197         595 
Dividends 
 paid                        -           -            -                 -     (1,404)      (1,404)     (2,808) 
Net proceeds 
 of share 
 issues                    554       6,403            -                 -           -            -       6,957 
Shares 
purchased for 
cancellation              (76)           -           76                 -       (899)            -       (899) 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
At 30 
 September 
 2019                    6,980       7,958          291             6,061      66,054          610      87,954 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   for the year ended 31 March 2020 
 
 
 
 
                           -----------------Non-distributable 
                                reserves-----------------                  Distributable reserves     Total 
                                              Capital 
               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 
ordinary 
activities 
after tax                    -           -            -           (9,672)       (399)          252     (9,819) 
Dividends 
 paid                        -           -            -                 -     (3,904)      (1,680)     (5,584) 
Net proceeds 
 of share 
 issues                    595       6,846            -                 -           -            -       7,441 
Shares 
purchased 
for 
 cancellation            (152)           -          152                 -     (1,791)            -      (1,791 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
At 31 March 
 2020                    6,945       8,401          367           (2,993)      61,247          389      74,356 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
 
 
   *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. 
 
   STATEMENT OF CASH FLOWS 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                           Six months ended   Six months ended    Year ended 
                           30 September 2020  30 September 2019  31 March 2020 
                                GBP000             GBP000           GBP000 
Cash flows from operating 
activities: 
Return on ordinary 
 activities before tax                20,821                595        (9,819) 
Adjustments for: 
Gain on disposal of 
 investments                           (332)               (46)            728 
Movement in fair value of 
 investments                        (20,546)              (954)          8,050 
(Increase)/decrease in 
 debtors                               (541)              (867)            142 
Decrease in creditors                   (42)              (136)           (83) 
                                  ----------         ----------     ---------- 
Net cash outflow from 
 operating activities                  (640)            (1,408)          (982) 
                                  ----------         ----------     ---------- 
Cash flows from investing 
activities: 
Purchase of investments              (3,432)            (5,985)       (11,850) 
Sale/repayment of 
 investments                           1,583              6,072          8,006 
                                  ----------         ----------     ---------- 
Net cash (outflow)/inflow 
 from investing 
 activities                          (1,849)                 87        (3,844) 
                                  ----------         ----------     ---------- 
Cash flows from financing 
activities: 
Issue of ordinary shares              12,914              7,072          7,568 
Share issue expenses                   (302)              (115)          (127) 
Share subscriptions held 
 pending allotment                         -            (6,468)        (6,468) 
Purchase of ordinary 
 shares for cancellation               (511)              (905)        (1,791) 
Equity dividends paid                (2,446)            (2,804)        (5,584) 
                                  ----------         ----------     ---------- 
Net cash inflow/(outflow) 
 from financing 
 activities                            9,655            (3,220)        (6,402) 
                                  ----------         ----------     ---------- 
Net increase/(decrease) 
 in cash and cash 
 equivalents                           7,166            (4,541)       (11,228) 
 
Cash and cash equivalents 
 at beginning of period               15,203             26,431         26,431 
 
                                  ----------         ----------     ---------- 
Cash and cash equivalents 
 at end of period                     22,369             21,890         15,203 
                                  ----------         ----------     ---------- 
 
   INVESTMENT PORTFOLIO SUMMARY 
 
   as at 30 September 2020 
 
 
 
 
                                          Cost     Valuation   % of net assets 
                                         GBP000      GBP000      by valuation 
 
Agilitas IT Holdings                          930      11,885             11.3 
Entertainment Magpie Group                  1,503       9,721              9.3 
Lineup Systems                                975       5,097              4.9 
Currentbody.com                             1,867       4,304              4.1 
Sorted Holdings                             2,715       2,945              2.8 
SHE Software Group                          2,195       2,865              2.7 
It's All Good                               1,145       2,388              2.3 
Clarilis                                    1,828       2,377              2.3 
Intelling Group                             1,142       2,064              2.0 
Biological Preparations Group               2,166       2,021              1.9 
Volumatic Holdings                            733       2,005              1.9 
Knowledgemotion                             1,778       1,548              1.5 
GRIP-UK t.a. The Climbing Hangar            1,928       1,524              1.4 
Medovate                                    1,450       1,450              1.4 
Oddbox Delivery                               648       1,226              1.1 
                                       ----------  ----------          ------- 
Fifteen largest venture capital 
 investments                               23,003      53,420             50.9 
Other venture capital investments          33,702      20,365             19.4 
                                       ----------  ----------          ------- 
Total venture capital investments          56,705      73,785             70.3 
Listed equity investments                   6,301       6,922              6.6 
Listed interest-bearing investments         1,133       1,213              1.2 
                                       ----------  ----------          ------- 
Total fixed asset investments              64,139      81,920             78.1 
                                       ---------- 
Net current assets                                     22,912             21.9 
                                                   ----------          ------- 
Net assets                                            104,832            100.0 
                                                   ----------          ------- 
 
 
   BUSINESS RISKS 
 
   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 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 investment 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 
transactions. 
 
   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 has caused a global recession 
during 2020.  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 investment 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 investment 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. 
 
   OTHER MATTERS 
 
   The unaudited half-yearly financial statements for the six months ended 
30 September 2020 do not constitute statutory financial statements 
within the meaning of Section 434 of the Companies Act 2006, have not 
been reviewed or audited by the company's independent auditor and have 
not been delivered to the Registrar of Companies.  The comparative 
figures for the year ended 31 March 2020 have been extracted from the 
audited financial statements for that year, which have been delivered to 
the Registrar of Companies.  The auditor's report on those financial 
statements (i) was unqualified, (ii) did not include any reference to 
matters to which the auditor drew attention by way of emphasis without 
qualifying the report and (iii) did not contain a statement under 
Section 498 (2) or (3) of the Companies Act 2006.  The half-yearly 
financial statements have been prepared on the basis of the accounting 
policies set out in the annual financial statements for the year ended 
31 March 2020. 
 
   Each of the directors confirms that to the best of his or her knowledge 
the half-yearly financial statements have been prepared in accordance 
with the Statement "Half-yearly financial reports" issued by the UK 
Accounting Standards Board and the half-yearly financial report includes 
a fair review of the information required by (a) DTR 4.2.7R of the 
Disclosure Rules and Transparency Rules, being an indication of 
important events that have occurred during the first six months of the 
financial year and their impact on the condensed set of financial 
statements, and a description of the principal risks and uncertainties 
for the remaining six months of the year, and (b) DTR 4.2.8R of the 
Disclosure Rules and Transparency Rules, being related party 
transactions that have taken place in the first six months of the 
current financial year and that have materially affected the financial 
position or performance of the entity during that period, and any 
changes in the related party transactions described in the last annual 
report that could do so. 
 
   The directors of the company at the date of this statement 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 calculation of the revenue and capital return per share is based on 
the return on ordinary activities after tax for the period and on 
162,912,035 (2019: 140,139,010) ordinary shares, being the weighted 
average number of shares in issue during the period. 
 
   The calculation of the net asset value per share is based on the net 
assets at 30 September 2020 divided by the 163,071,097 (2019: 
139,594,502) ordinary shares in issue at that date. 
 
   The interim dividend of 2.0 pence per share for the year ending 31 March 
2021 will be paid on 29 January 2021 to shareholders on the register at 
the close of business on 8 January 2021. 
 
   A copy of the half-yearly financial report for the six months ended 30 
September 2020 is expected to be posted to shareholders by 22 December 
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

December 01, 2020 11:15 ET (16:15 GMT)

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