Announcements

Northern Venture Trust PLC.

9 NOVEMBER 2011

NORTHERN VENTURE TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2011 (CORRECTION)

The announcement released by the Company at 11.36 on 9 November 2011 as HUG1562430 incorrectly stated that the proposed final dividend of 3.0p per share for the year ended 30 September 2011 will, if approved by shareholders, be paid on 17 December 2011 to shareholders on the register at the close of business on 26 November 2011.  The final dividend will, if approved by shareholders, be paid on 16 December 2011 to shareholders on the register at the close of business on 25 November 2011.

The full corrected text of the announcement is as follows:

Northern Venture Trust PLC is a Venture Capital Trust (VCT) managed by NVM Private Equity.  The trust was one of the first VCTs launched on the London Stock Exchange in 1995.  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 2010):

            2011           2010
Net assets£62.6m£50.4m
Net asset value per share87.8p85.2p
Return per share after tax:
  Revenue
  Capital
  Total
1.5p
8.8p
10.3p
1.2p
6.8p
8.0p
Dividend per share declared in respect of the year6.0p7.5p
Cumulative return to shareholders since launch:
  Net asset value per share
  Dividends paid per share*
  Net asset value plus dividends paid per share
87.8p
96.5p
184.3p
85.2p
89.0p
174.2p
Mid-market share price at end of year77.0p72.5p
Share price discount to net asset value12.3%14.9%

*Excluding proposed final dividend

For further information, please contact:

NVM Private Equity Limited
Alastair Conn/Christopher Mellor             0191 244 6000

Website:  www.nvm.co.uk

CHAIRMAN'S STATEMENT

The past year has been challenging but successful for our company, once more against a backdrop of turbulent financial markets and a struggling UK economy.  The investment portfolio has continued to make good progress, and after a well-received tender offer and share issue the company's net assets have exceeded £60 million for the first time.

Results and dividend
The NAV per ordinary share at 30 September 2011 was 87.8p, compared with 85.2p a year earlier.  The return per share before dividends as shown in the income statement was 10.3p, equivalent to 12.1% of the opening net asset value.  We are pleased that the increase in the size of the company has led to economies of scale as envisaged in our November 2010 share offer prospectus, with the total expense ratio falling to 2.54% of average net assets this year compared with 2.65% in the corresponding period.  Given the challenging market conditions prevailing over the past year, your directors believe that the outcome for the year is satisfactory and maintains your company's position among the leading long-term performers in the VCT market.

The board's stated objective is to pay an annual dividend to shareholders of at least 6.0p per share, although in recent years it has been possible on a number of occasions to exceed this target.  An interim dividend of 3.0p per share for the year ended 30 September 2011 was paid in June 2011 and after careful consideration we have decided to recommend a final dividend also of 3.0p, making a total of 6.0p for the year, in line with our objective.  Our aim is to achieve a balance between providing an attractive and consistent dividend yield to shareholders and maintaining the company's capital base as a solid platform for the future.  In the current economic climate we believe that a 6.0p dividend is the right level and one which we can realistically hope to maintain in the short to medium term on the 71.3 million shares now in issue.

Investment portfolio
The business review in the annual report gives details of movements in the investment portfolio during the year.  Seven new venture capital holdings were acquired at a total cost of £6.4 million.  As expected, adverse market conditions meant that exit opportunities were limited, and the only significant sale was that of Promanex Group Holdings which brought cash proceeds of £2.1 million as well as a £0.5 million inflow of accumulated loan stock interest.  The sale price was in line with our latest carrying value and represented a gain of 26% over cost, a good result in the current economic climate.  In addition a further £0.9 million of deferred proceeds from the September 2009 sale of DxS was recognised in the year, bringing the cumulative receipts to £9.6 million from an original investment of £1.1 million.

Share issue and tender offer
In November 2010 the company made a tender offer to purchase 10% of the issued share capital at a 3% discount to NAV, along similar lines to a previous tender offer in 2005.  The tender offer was fully taken up with approximately 5.9 million shares being re-purchased at a cost of £4.7 million.  Shareholder feedback has been positive and your board will keep under review the possibility of a further tender offer in the future.

In November 2010 a new public offer of ordinary shares was launched with a target of raising £15 million before expenses.  The offer proved popular with investors, closing fully subscribed in mid-February, and was we believe the only 2010/11 generalist VCT offer to sell out before the end of the tax year.  Many of our existing shareholders took the opportunity to make a further investment, and I would like to thank all of our shareholders for their continuing and valued support.

Share buy-back policy
It was announced in August 2010 that in order to assist in the provision of liquidity to shareholders, the company would follow a policy of buying back its shares in the market at a 15% discount to the latest published NAV, subject to market conditions and the availability of cash resources and distributable reserves.  In the event it has not been necessary for the company to use its buyback powers since the completion of the tender offer in December 2010, as secondary market demand for the shares has remained strong.  This is not surprising given the attractive tax-free yield which our current distribution policy offers.

The mid-market share price ranged between a low of 70.25p and a high of 79p during the year, and the discount to NAV at the end of the year was 12.3%.

VAT on management fees
During the year a further £132,000 was recovered in relation to VAT previously paid on investment management fees, taking the cumulative total to £634,000.  Our managers continue to pursue a claim against HM Revenue & Customs for the payment of compound rather than simple interest on VAT repayments, but we have been advised that this will take a considerable time to resolve and in the meantime no credit has been taken in our accounts for possible future recoveries.

VCT qualifying status
The company has maintained its approved venture capital trust status with HM Revenue & Customs.  The company's compliance with the VCT qualifying conditions is closely monitored by the board, who receive regular reports from our managers and from our VCT taxation advisers, PricewaterhouseCoopers LLP.

Corporate governance
The board's detailed statement on corporate governance matters is set out in the annual report.  The company continues to comply with the provisions of the Association of Investment Companies Code of Corporate Governance and the directors review the role and effectiveness of the board, its committees and individual directors annually.  During the past year we have adopted the Code's recommendation that directors who have served for more than nine years should seek re-election at each annual general meeting.  The board's remit includes approving all investment and divestment decisions and during the year we met seven times in person and 17 times by conference call.

Board of directors
Primrose Scott retired from the board at the close of the annual general meeting in December 2010, at which time I expressed the board's gratitude to Primrose for her contribution over the first 15 years of the company's life.

Annual general meeting and shareholder presentation
The 2011 annual general meeting will take place in central London on Wednesday 14 December 2011.  Details of the formal business of the meeting are set out in a separate circular which is being sent to shareholders with the annual report.  We look forward to meeting shareholders on that occasion and also at NVM Private Equity's VCT seminar on Tuesday 24 January 2012.

Outlook
Despite the unhelpful business environment it is encouraging to note that many of our portfolio companies have continued to make good progress.  It is clear that a return to consistent growth in the UK economy is some way off, and this will inevitably constrain the performance of individual investments to a certain extent.  By virtue however of our fund-raising and successful realisations we are now holding a significant amount of cash, which we plan to use selectively over the short to medium term to take advantage of reasonably-priced private equity opportunities - some of which we expect to result from the difficulty which many small and medium sized companies are experiencing in obtaining funding from UK clearing banks.  We will seek to maintain the company's excellent long-term performance record by continuing to apply the principles developed over many years and we believe that this should continue to produce good returns for our shareholders.

John Hustler
Chairman

The audited financial statements for the year ended 30 September 2011 are set out below.

INCOME STATEMENT
for the year ended 30 September 2011

Year ended 30 September 2011Year ended 30 September 2010
Revenue 
£000 
Capital 
£000 
Total 
£000 
Revenue 
£000 
Capital 
£000 
Total 
£000 
Gain on disposal of investments 1,277  1,277  3,119  3,119 
Movements in fair value of investments 5,125  5,125  1,493  1,493 
----------  ----------  ----------  ----------  ----------  ---------- 
6,402  6,402  4,612  4,612 
Income 1,845  1,845  1,350  1,350 
Investment management fee (289) (867) (1,156) (244) (733) (977)
Recoverable VAT 33  99  132 
Other expenses (350) (14) (364) (326) (326)
----------  ----------  ----------  ----------  ----------  ---------- 
Return on ordinary activities before tax 1,239  5,620  6,859  780  3,879  4,659 
Tax on return on ordinary activities (264) 264  (95) 95 
----------  ----------  ----------  ----------  ----------  ---------- 
Return on ordinary activities after tax 975  5,884  6,859  685  3,974  4,659 
----------  ----------  ----------  ----------  ----------  ---------- 
Return per share 1.5p 8.8p 10.3p 1.2p 6.8p 8.0p

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 30 September 2011

Year ended 
30 September 2011 
£000 
Year ended 
30 September 2010 
£000 
Equity shareholders' funds at 1 October 2010 50,414  47,875 
Return on ordinary activities after tax 6,859  4,659 
Dividends recognised in the year (4,789) (1,781)
Net proceeds of share issues 14,782  (35)
Shares re-purchased for cancellation (4,696) (304)
----------  ---------- 
Equity shareholders' funds at 30 September 2011 62,570  50,414 
----------  ---------- 

BALANCE SHEET
as at 30 September 2011

30 September 2011 
£000 
30 September 2010 
£000 
Fixed asset investments 44,148  35,096 
----------  ---------- 
Current assets:
  Debtors 218  1,063 
  Cash and deposits 18,294  14,323 
----------  ---------- 
18,512  15,386 
Creditors (amounts falling due within one year) (90) (68)
----------  ---------- 
Net current assets 18,422  15,318 
----------  ---------- 
Net assets 62,570  50,414 
----------  ---------- 
Capital and reserves
Called-up equity share capital 17,820  14,785 
Share premium 10,491  12,222 
Capital redemption reserve 14,353  12,875 
Capital reserve 17,053  14,280 
Revaluation reserve 961  (5,020)
Revenue reserve 1,892  1,272 
----------  ---------- 
Total equity shareholders' funds 62,570  50,414 
----------  ---------- 
Net asset value per share 87.8p 85.2p

CASH FLOW STATEMENT
for the year ended 30 September 2011

Year ended 
30 September 2011 
Year ended 
30 September 2010 
£000 £000 £000 £000 
Cash flow statement
Net cash inflow from operating activities 1,324  1,595 
Taxation:
Corporation tax paid (261)
Financial investment:
Purchase of investments (10,925) (8,688)
Sale/repayment of investments 8,275  10,124 
----------  ---------- 
Net cash inflow/(outflow) from financial investment (2,650) 1,436 
Equity dividends paid (4,789) (1,781)
----------  ---------- 
Net cash inflow/(outflow) before financing (6,115) 989 
Financing:
Issue of shares 15,618 
Share issue expenses (836) (35)
Re-purchase of shares for cancellation (4,696) (304)
----------  ---------- 
Net cash inflow/(outflow) from financing 10,086  (339)
----------  ---------- 
Increase in cash and deposits 3,971  650 
----------  ---------- 
Reconciliation of return before tax
to net cash flow from operating activities
Return on ordinary activities before tax 6,859  4,659 
Gain on disposal of investments (1,277) (3,119)
Movements in fair value of investments (5,125) (1,493)
Decrease in debtors 845  1,622 
Increase/(decrease) in creditors 22  (74)
----------  ---------- 
Net cash inflow from operating activities 1,324  1,595 
----------  ---------- 
Analysis of movement in net funds
1 October 2010 
£000 
Cash flows 
£000 
30 September 2011 
£000 
Cash and deposits 14,323  3,971  18,294 
----------  ----------  ---------- 

INVESTMENT PORTFOLIO SUMMARY
as at 30 September 2011

CompanyCost
£000
Valuation
£000
% of net assets
by valuation
Fifteen largest venture capital investments:
Kerridge Commercial Systems 1,740 3,672 5.9
Weldex (International) Offshore Holdings 3,262 3,262 5.2
Alaric Systems 2,175 2,602 4.2
CGI Group Holdings 3,449 1,965 3.1
Closerstill Holdings 1,000 1,731 2.8
Paladin Group 1,709 1,601 2.6
Kitwave One 1,582 1,582 2.5
Envirotec 813 1,263 2.0
Arleigh International 775 1,210 1.9
Axial Systems Holdings 1,004 1,117 1.8
Cawood Scientific 1,073 1,073 1.7
Evolve Investments 995 995 1.6
RCC Lifesciences 995 995 1.6
Tinglobal Holdings 988 988 1.6
Wear Inns 979 979 1.5
---------- ---------- -------
22,539 25,035 40.0
Other venture capital investments 13,844 13,098 21.0
---------- ---------- -------
Total venture capital investments 36,383 38,133 61.0
Listed equity investments 3,993 3,458 5.5
Listed fixed-interest investments 2,811 2,557 4.1
---------- ---------- -------
Total fixed asset investments 43,187 44,148 70.6
----------
Net current assets 18,422 29.4
---------- -------
Net assets 62,570 100.0
---------- -------

BUSINESS RISKS

The board carries out a regular review of the risk environment in which the company operates.  The main areas of risk identified by the board are as follows:

Investment risk:  The majority of the company's investments are in small and medium-sized unquoted and AIM-quoted companies which are VCT qualifying holdings, and which by their nature entail a higher level of risk and lower liquidity than investments in large quoted companies. The directors aim to limit the risk attaching to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a wide spread of holdings in terms of financing stage, industry sector and geographical location.  The board reviews the investment portfolio with the investment managers on a regular basis.

Financial risk:  As most of the company's investments involve a medium- to long-term commitment and many are relatively illiquid, 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 take advantage of new unquoted investment opportunities.  The company has very little exposure to foreign currency risk and does not enter into derivative transactions.

Economic risk:  events such as economic recession or general fluctuations in stock markets 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.

Liquidity risk:  The company's investments may be difficult to realise.  The fact that a stock is quoted on a recognised stock exchange does not guarantee its liquidity and there may be a large spread between bid and offer prices.  Unquoted investments are not traded on a recognised stock exchange and are inherently illiquid.

Internal control risk:  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:  the company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status.  The loss of such approval could lead to the company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment.  The manager keeps the company's VCT qualifying status under continual review and reports to the board on a quarterly basis.  The board has also retained PricewaterhouseCoopers LLP to undertake an independent VCT status monitoring role.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the annual financial report in accordance with applicable law and regulations.  Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors have elected to prepare the financial statements in accordance with UK Accounting Standards.  The financial statements are required by law to give a true and fair view of the state of affairs of the company at the end of the financial period and of the return of the company for that period.  In preparing these 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;  and (iv) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

In relation to the financial statements for the year ended 30 September 2011 each of the directors has confirmed that to the best of his knowledge (i) the financial statements, which have been 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 includes 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 which it faces.

The directors are also responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that its financial statements comply with the Companies Act 2006.  They 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 directors' report, directors' remuneration report and corporate governance statement that comply with that law and those regulations.

The company's financial statements are published on the NVM Private Equity Limited website, www.nvm.co.uk.  The maintenance and integrity of this website is the responsibility of NVM and not of the company.  Visitors to the website should be aware that legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors of the company at the date of this announcement were Mr J R Hustler (Chairman), Mr N J Beer, Mr E M P Denny, Mr R S Peters and Mr H P Younger.

OTHER MATTERS

The above summary of results for the year ended 30 September 2011 does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006 and has not been delivered to the Registrar of Companies.  Statutory financial statements will be filed with the Registrar of Companies in due course;  the independent auditors' report on those financial statements under Section 495 of the Companies Act 2006 is unqualified and does not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

The proposed final dividend of 3.0p per share for the year ended 30 September 2011 will, if approved by shareholders, be paid on 16 December 2011 to shareholders on the register at the close of business on 25 November 2011.

The full annual report including financial statements for the year ended 30 September 2011 is expected to be posted to shareholders on 16 November 2011 and will be available to the public at the registered office of the company at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER and on the NVM Private Equity Limited website, www.nvm.co.uk.

Neither the contents of the NVM Private Equity Limited website nor the contents of any website accessible from hyperlinks on the NVM Private Equity Limited website (or any other website) is incorporated into, or forms part of, this announcement.




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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Northern Venture Trust PLC via Thomson Reuters ONE

HUG#1562555