TIDMNTV
8 July 2020
NORTHERN 2 VCT PLC
ANNUAL FINANCIAL REPORT FOR THE YEARED 31 MARCH 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
Enquiries:
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
KEY POINTS
-- Seven new and 16 follow-on investments completed in innovative earlier
stage companies
-- Successful public share offer launched raising GBP12.5 million of gross
proceeds
-- Return per share for the year of minus 7.0 pence resulting primarily from
an unrealised reduction in investment valuations
CHAIRMAN'S STATEMENT
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
agreement.
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
participants.
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
deadline.
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.
Outlook
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.
INCOME STATEMENT
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
(Loss)/gain
on disposal
of
investments - (728) (728) - 2,827 2,827
Movements in
fair value
of
investments - (8,050) (8,050) - 762 762
---------- ---------- ---------- ---------- ---------- ----------
- (8,778) (8,778) - 3,589 3,589
Income 1,052 - 1,052 2,638 - 2,638
Investment
management
fee (431) (1,293) (1,724) (399) (1,198) (1,597)
Other
expenses (369) - (369) (393) - (393)
---------- ---------- ---------- ---------- ---------- ----------
Return on
ordinary
activities
before tax 252 (10,071) (9,819) 1,846 2,391 4,237
Tax on
return on
ordinary
activities - - - (275) 275 -
---------- ---------- ---------- ---------- ---------- ----------
Return on
ordinary
activities
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
BALANCE SHEET
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
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
---------- ---------- ---------- ---------- ---------- ---------- ----------
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 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
2018 6,505 392 110 7,836 71,629 571 87,043
Return on
ordinary
activities
after tax - - - (1,157) 3,823 1,571 4,237
Dividends
paid - - - - (6,831) (325) (7,156)
Net proceeds
of share
issues 102 1,163 - - - - 1,265
Shares
purchased
for
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.
STATEMENT OF CASH FLOWS
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
---------- ----------
INVESTMENT PORTFOLIO SUMMARY
as at 31 March 2020
% of
Cost Valuation net assets
GBP000 GBP000 by value
Fifteen largest venture capital
investments:
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
---------- --------
RISK MANAGEMENT
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
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 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.
DIRECTORS' RESPONSIBILITIES
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.
OTHER MATTERS
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
date.
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
2020.
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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