capital holdings, with its remaining assets predominantly invested

in a portfolio of money market funds and bank deposits.

1. Accounting policies

A summary of the principal accounting policies, all of which have been consistently applied throughout the year and the preceding period, is set out below.

(a) Basis of accounting

The financial statements have been prepared under FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and in accordance with the Statement of Recommended Practice

‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ issued in July 2022 by the Association of Investment Companies (‘AIC SORP’).

The financial statements are prepared in sterling which is the functional and presentational currency of the Company and rounded to the nearest £000.

The financial statements have been prepared on a going concern basis under the historical cost convention except investments which are stated at their fair value.

The Directors performed an assessment of the Company’s ability to meet its liabilities as they fall due. In performing this assessment, the Directors took into consideration the uncertain economic

outlook including:

•

the investments and liquid resources held by the Company;

•

the fact that the Company has no debt or capital commitments;

•

the ability of the Company to meet all of its liabilities and ongoing expenses from its assets, including its year-end cash balance;

•

revenue and operating cost forecasts for the forthcoming year;

•

the ability of third-party service providers to continue to provide services; and

•

potential downside scenarios including a fall in the valuation of the investment portfolio or levels of investment income.

Based on this assessment, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the

financial statements, and therefore determine the going concern basis to be appropriate.

(b) Significant estimates and judgements

Disclosure is required of judgements and estimates made by management in applying the accounting policies that have a significant effect on the financial statements. While estimates are based on best

judgement using information and financial data available, the actual outcome may differ from these estimates. A price sensitivity analysis is provided in the other price risk sensitivity section of Note 17 on

page 71.

The key estimate in the financial statements is the determination of the fair value of the unlisted investments by the Directors as it significantly impacts the valuation of the unlisted investments at the

balance sheet date. The fair valuation process involves estimates using inputs that are unobservable. The fair value of the unlisted investments at the balance sheet date was £79,912,000.

The key judgement in the valuation of the unquoted investments process is the Directors’ determination of the appropriate application of the International Private Equity and Venture Capital (‘IPEV’)

guidelines to each unlisted investment. The judgement applied in the selection of the methodology used for determining the fair value of each unlisted investment can have a significant impact upon

the valuation.

(c) Valuation of investments

Purchases and sales of investments are recognised in the financial statements at the date of transaction (trade date).

As permitted by FRS 102 chapters 11 and 12, the Company’s investments are recorded at fair value at the point of acquisition and are measured at subsequent reporting dates at fair value, with any changes

being recognised in profit or loss. The fair value of the investments held at 31 March 2024 is £82,574,000 (31 March 2023: £88,609,000). In the case of investments quoted on a recognised stock exchange,

fair value is established by reference to the closing bid price on the relevant date or the last traded price, depending on the convention of the exchange on which the investment is quoted. In the case of

unquoted investments, fair value is established in accordance with IPEV guidelines by using measurements of value such as calibrating to the price of recent investment and earnings or revenue multiples;

where no reliable fair value can be estimated using such techniques, unquoted investments are carried at cost subject to provision for impairment where necessary. This process is used for both the

valuation of unquoted equity and debt investments. In the case of debt investments, debt, including both principal and any accrued interest is valued with reference to their recoverability upon eventual

sale of the Company’s investment. The key assumption when using the price of a recent investment as an input to the valuation is that the price obtained remains a reasonable proxy for fair value for a

period of time such that an enterprise value can be inferred and subsequently recalibrated where necessary to take account of changes to either the prevailing market conditions or performance of the

investee. The price of a recent investment is not a default position for establishing fair value as at the measurement date and when this technique is employed, the resultant valuations are cross-checked

for reasonableness by employing an alternative valuation technique. The key assumptions for the multiples approach are the selection of the most appropriate earnings or revenue measure (historic or

forecast) and the selection of the multiple itself which may be influenced by the multiples achieved by a range of comparable companies in either private or public transactions.

Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the income statement and allocated to the revaluation reserve. Transaction costs

attributable to the acquisition or disposal of investments are charged to capital return within the income statement.

The disclosure requirements relating to capital management under Section 34 paragraph 31 of FRS 102 are met in the Strategic Report on pages 16 to 23 and in Note 8 to the financial statements.

(d) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits, including short-term highly liquid investments and money market funds readily convertible to known amounts of cash.

(e) Income

Dividends receivable on quoted equity shares are recognised on the ex-dividend date. Dividends receivable on unquoted equity shares are recognised when the Company’s right to receive payment is

established and there is no reasonable doubt that payment will be received. Fixed income returns on non-equity shares and debt securities are recognised on an effective interest rate basis, provided there is

no reasonable doubt that payment will be received in due course.

(f) Expenses

All expenses are accounted for on an accruals basis. Expenses are charged to revenue return within the income statement except that:

•

expenses which are incidental to the acquisition or disposal of an investment are allocated to capital return as incurred; and

•

expenses are split and allocated partly to capital return where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated, and accordingly the

basic element of the investment management fee has been allocated 25% to revenue return and 75% to capital return, in order to reflect the Directors’ expected long-term view of the nature of the

investment returns of the Company. The performance-related element of the investment management fee is charged 100% to capital return.

(g) Revenue and capital

The revenue column of the income statement includes all income and revenue expenses of the Company. The capital column includes realised and unrealised gains and losses on investments and that part

of the investment management fee which is allocated to capital return.

(h) Taxation

UK corporation tax payable is provided on taxable profits at the current rate. The tax charge for the year is allocated between revenue return and capital return on the ‘marginal basis’ as recommended in the

SORP. Provision is made for deferred taxation on all timing differences calculated at the current rate of tax relevant to the benefit or liability.

(i) Dividends payable

Dividends payable are recognised as distributions in the financial statements when the Company’s liability to make payment has been established.

( j) Provisions

A provision is recognised in the balance sheet when the Company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to

settle the obligation. No provision is established where a reliable estimate of the obligation cannot be made. Provisions are allocated to revenue or capital depending on the nature of the circumstances.

(k) Share capital account

The share capital account represents the nominal value of all shares issued by the Company.

(l) Share premium account

The share premium account represents the value paid by shareholders for shares above the nominal value.

(m) Capital redemption reserve

The capital redemption reserve is a non-distributable reserve into which amounts are transferred following the redemption or purchase of a company’s own shares.

(n) Revaluation reserve

Changes in the fair value of investments are dealt with in this reserve.

(o) Capital reserve

The following are accounted for in the capital reserve: gains or losses on the realisation of investments; the cost of repurchasing ordinary shares, including stamp duty and transaction costs; and other

capital charges and credits charged to this account in accordance with the above policies.

(p) Revenue reserve

The revenue reserve comprises the retained earnings of a business from profits made in the current and prior periods.

(q) Segmental reporting

The Company has a single operating segment carrying out the investment activity of the Company. All venture investments are based in the UK.

2. Income

	Year ended 31 March 2024 £000	18-month period ended 31 March 2023 £000
Dividends from unquoted companies	377	105
Dividends from quoted companies and investment funds	39	191
Money market funds*	965	66
Bank deposits*	423	35
Loans to unquoted companies	416	551
	2,220	948

*

Denotes income arising from investments not designated as fair value through profit or loss.

3. Investment management fee

	Year ended			18-month period ended
	31 March 2024 Revenue £000	Capital £000	Total £000	31 March 2023 Revenue £000	Capital £000	Total £000
Investment management fee
Basic	516	1,549	2,065	811	2,432	3,243
Performance-related fee	–	–	–	–	–	–
	516	1,549	2,065	811	2,432	3,243

Mercia Fund Management (Mercia) provides investment advisory, secretarial and administrative services to the Company under an agreement dated 20 December 1999, which may be terminated at any time

by not less than twelve months’ notice being given by either party. The agreement was novated from the previous Investment Adviser, NVM Private Equity LLP to Mercia on 23 December 2019.

The Investment Adviser receives a basic management fee, payable quarterly in advance, at the rate of 2.06% per annum of net assets calculated half-yearly as at 31 March and 30 September. The fee due on

the value of liquid assets above the threshold of £20 million attracts a reduced rate of 1% per annum. The Investment Adviser also arranges the administrative and secretarial services for the Company for a

fee of £93,000 per annum (linked to the movement in the CPI). This fee is included in other expenses (see Note 4).

The Investment Adviser is entitled to receive an annual performance-related management fee. The fee is calculated on annual performance above the higher of the annual hurdle of 5% of opening NAV

per share and the deficit to the high water mark total return brought forward (together, the ‘Excess Return’). The performance-related management fee is calculated at 14% of the Excess Return and the

payment of the performance-related management fee in any one year is capped to 2.25% of the net asset value at the start of the year with the balance being deferred. There were no performance-related

management fees due in respect of the year ended 31 March 2024 (2023: nil).

The total running costs of the Company for each financial period, excluding performance-related management fees, are capped at 2.9% of its net assets and the Investment Adviser has agreed that any

excess will be refunded by way of a reduction in its management fees.

4. Other expenses

	Year ended 31 March 2024 £000	18-month period ended 31 March 2023 £000
Administrative and secretarial services	93	119
Directors’ remuneration	144	228
National Insurance contributions	20	31
Auditor’s remuneration – audit services	63	60
Auditor’s remuneration – non-audit services	–	–
Legal and professional expenses	60	31
Share issue promoter’s commission	36	63
Other expenses	225	264
	641	796

Information on Directors’ remuneration is given in the Directors’ Remuneration Report on pages 42 and 43.

5. Tax on return

	Year ended 31 March 2024			18-month period ended 31 March 2023
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
(a) Analysis of charge / (credit) for the year
UK corporation tax payable / (recoverable) on the return for the year	(79)	79	–	(181)	181	–
(b) Tax reconciliation
Return before tax	1,063	2,153	3,216	(659)	(9,264)	(9,923)
Return multiplied by the standard rate of UK corporation tax of 25.0% (2023: 19.0%)	266	538	804	(125)	(1,760)	(1,885)
Effect of:
Dividends not subject to tax	(345)	–	(345)	(56)	–	(56)
Capital returns not subject to tax	–	(301)	(301)	–	(559)	(559)
Movements in fair value of investments not subject to tax	–	(625)	(625)	–	1,858	1,858
Increase in surplus management expenses	–	467	467	–	642	642
Tax charge / (credit) for the year	(79)	79	–	(181)	181	–

(c) Factors which may affect future tax charges

The Company has not recognised a deferred tax asset in respect of surplus management expenses carried forward of £11,460,000 (31 March 2023: £9,527,000), as the Company may not generate sufficient

taxable income in the foreseeable future to utilise these expenses. There is no other unprovided deferred taxation.

Approved venture capital trusts are exempt from tax on capital gains within the Company. Since the Directors intend that the Company will continue to conduct its affairs so as to maintain its approval as a

venture capital trust, no deferred tax has been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments.

6. Dividends

	Year ended			18-month period ended
	31 March 2024 Revenue £000	Capital £000	Total £000	31 March 2023 Revenue £000	Capital £000	Total £000
(a) Recognised as distributions in the financial statements
Previous year’s final dividend	–	3,475	3,475	281	2,932	3,213
Current year’s interim dividend	383	2,681	3,064	–	6,677	6,677
	383	6,156	6,539	281	9,609	9,890
(b) Paid and proposed
Interim – 1.6p (2023: 4.0p) per share	383	2,681	3,064	–	6,677	6,677
Final proposed – 1.6p (2023: 2.0p) per share	667	2,381	3,048	–	3,298	3,298
	1,050	5,062	6,112	–	9,975	9,975

The revenue dividends paid and proposed in respect of the year form the basis for determining whether the Company has complied with the requirements of Section 274 of the Income Tax Act 2007 as to the

distribution of investment income.

7. Return per share

The calculation of the return per share is based on the return aſter tax for the year of £3,216,000 (2023: minus £9,923,000) and on 179,260,563 (2023: 165,209,895) shares, being the weighted average number

of shares in issue during the period.

8. Investments

All investments are accounted for as fair value through profit or loss on initial recognition, therefore all gains and losses arising on these investments are reflected through the profit or loss.

FRS 102, including subsequent amendments, requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The fair value hierarchy shall have the following classifications:

•

Level 1 – unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.

•

Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

•

Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

	31 March 2024 £000	31 March 2023 £000
Level 1
Quoted venture capital investments	2,662	3,253
Listed equity investment funds	–	8,912
Level 3
Unquoted venture capital investments	79,912	76,444
	82,574	88,609

Movements in investments during the year are summarised as follows:

	Venture capital – unquoted Level 3 £000	Venture capital – quoted Level 1 £000	Listed equity Level 1 £000	Total £000
Book cost at 31 March 2023	77,906	1,146	7,859	86,911
Fair value adjustment at 31 March 2023	(1,462)	2,107	1,053	1,698
Fair value at 31 March 2023	76,444	3,253	8,912	88,609
Movements in the year:
Purchases at cost	14,993	–	358	15,351
Disposals - proceeds	(15,849)	(8)	(9,231)	(25,088)
- net realised gains on disposal	1,240	–	(37)	1,203
Movements in fair value	3,084	(583)	(2)	2,499
Fair value at 31 March 2024	79,912	2,662	–	82,574
Comprising:
Book cost at 31 March 2024	80,559	1,133	–	81,692
Fair value adjustment at 31 March 2024	(647)	1,529	–	882
	79,912	2,662	–	82,574
Equity shares	61,078	2,662	–	63,740
Preference shares	8,181	–	–	8,181
Interest-bearing securities	10,653	–	–	10,653
	79,912	2,662	–	82,574

The gains and losses included in the above table have all been recognised in the income statement on page 56. The listed equity category in the table above comprises quoted investment funds which hold

listed equity securities.

FRS 102 requires disclosure, by class of financial instrument, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value

measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of each investee company. See

Note 17 for details of the impact of sensitivity analysis on the financial statements.

Details of movements in the venture investment portfolio during the year is provided in the Investment Portfolio section on page 24.

At 31 March 2024 there were no commitments (31 March 2023: nil) in respect of investments approved by the Investment Adviser but not yet completed.

9. Investment disposals

Disposals of venture capital investments during the year were as follows:

	Original cost £000	Carrying ’ valuation at 31 March 2023 £000	Disposal proceeds £000	Realised gain / (loss) against carrying value £000
Evotix – disposal of entire holding	2,766	12,658	13,434	776
AVID Technology Group – deferred proceeds	–	–	196	196
Knowledgemotion (t / a Boclips) – deferred proceeds	–	–	156	156
Intechnica Holdings – deferred proceeds	–	–	36	36
S&P Coil – deferred proceeds	–	–	14	14
Fresh Approach (UK) Holdings – partial disposal	41	41	41	–
Velocity Composites plc – partial disposal	13	5	8	3
Haystack Dryers – disposal of entire holding	1,661	242	276	34
Weldex (International) Offshore Holdings – disposal of entire holding	3,262	1,137	1,606	469
Medovate – disposal of entire holding	1,770	534	90	(444)
Sorted Holdings – partial disposal	2,839	–	–	–
	12,352	14,617	15,857	1,240

10. Unquoted investments

The cost and carrying value of material investments in unquoted companies held at 31 March 2024 are shown in the table on page 24.

11. Significant interests

At 31 March 2024 the Company held significant investments, amounting to 20% or more of the equity capital of an undertaking, in the following companies:

Company	Registered office address	Investment type	Equity £000	Debt £000	Total investment cost £000
GRIP-UK (t / a The Climbing Hangar)	12 Jordan Street, Liverpool L1 0BP	Unquoted	3,530	354	3,885
Gentronix	Block 23 Mereside, Alderley Park, Alderley Edge, Cheshire SK10 4TG	Unquoted	1,240	122	1,362
Biological Preparations Group	Unit 12 A-C Pantglas Industrial Estate, Bedwas, Caerphilly CF83 8DR	Unquoted	607	1,759	2,366
Volumatic Holdings	Taurus House, Endemere Road, Coventry CV6 5PY	Unquoted	216	–	216
Pure Pet Food	Unit 4 Chain Bar Road, Cleckheaton BD19 3QF	Unquoted	1,419	355	1,774

During the year Northern Venture Trust PLC received loan note interest totalling £12,000 from Gentronix and dividend income totalling £185,000 from Volumatic Holdings. No amounts were received from the

other significant investments.

12. Debtors

	31 March 2024 £000	31 March 2023 £000
Accrued income	140	39
Due from investment sales	778	–
Prepayments	33	31
	951	70

13. Creditors (amounts falling due within one year)

	31 March 2024 £000	31 March 2023 £000
Accruals and deferred income	191	183
	191	183

14. Called-up equity share capital

	31 March 2024 £000	31 March 2023 £000
Allotted and fully paid:
190,460,878 (2023: 164,920,166) ordinary shares of 25p	47,615	41,230

The capital of the Company is managed in accordance with its investment policy with a view to the achievement of its investment objective, as set out on page 16.

The Company is not subject to externally imposed capital requirements.

During the year the Company issued 30,803,917 (18-month period ended 31 March 2023: 11,185,395) ordinary shares of 25 pence for cash at an average premium of 37.8 (2023: 43.6) pence per share.

5,263,205 (2023: 7,335,532) ordinary shares were repurchased for cancellation during the year at a cost of £3,068,000 (18-month period ended 31 March 2023: £4,570,000).

15. Reserves

	Share premium £000	Capital redemption reserve £000	Capital reserve £000	Revaluation reserve £000	Revenue reserve £000
At 31 March 2023	19,394	5,342	34,433	1,698	400
Premium on issue of ordinary shares	11,652	–	–	–	–
Share issue expenses	(628)	–	–	–	–
Shares purchased for cancellation	–	1,316	(3,068)	–	–
Realised on disposal of investments	–	–	1,203	–	–
Transfer on disposal of investments	–	–	3,315	(3,315)	–
Movements in fair value of investments	–	–	–	2,499	–
Management fee charged to capital net of associated tax	–	–	(1,628)	–	–
Revenue return aſter tax	–	–	–	–	1,142
Dividends recognised in the year	–	–	(6,156)	–	(383)
At 31 March 2024	30,418	6,658	28,099	882	1,159

At 31 March 2024, distributable reserves amounted to £29,258,000 (31 March 2023: £35,886,000), comprising the capital reserve, the revenue reserve and that part of the revaluation reserve relating to gains

or losses on readily realisable quoted investments.

16. Net asset value per share

The calculation of net asset value per share as at 31 March 2024 is based on net assets of £114,831,000 (31 March 2023: £102,497,000) divided by the 190,460,878 (31 March 2023: 164,920,166) shares in issue

at that date.

17. Financial instruments

The Company’s financial instruments comprise equity and interest-bearing investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in

accordance with its investment policy of investing mainly in a portfolio of VCT-qualifying unquoted and AIM-quoted securities whilst holding a proportion of its assets in cash or near-cash investments in

order to provide a reserve of liquidity.

Fixed asset investments (see Note 8) are valued at fair value. For quoted investments this is either bid price or the latest traded price, depending on the convention of the exchange on which the investment is

quoted. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities

is represented by their carrying value in the balance sheet, due to the short term nature of these instruments.

In carrying on its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The most significant types of financial risk

facing the Company are market risk, credit risk and liquidity risk. The Company’s approach to managing these risks is set out below together with a description of the nature and amount of the financial

instruments held at the balance sheet date.

Market risk

The Company’s strategy for managing investment risk is determined with regard to the Company’s investment objective, as outlined in the Strategic Report on page 16. The management of market risk is

part of the investment management process and is a central feature of venture capital investment. The Company’s portfolio is managed in accordance with the policies and procedures described in the

Corporate Governance statement on pages 44 to 49, having regard to the possible effects of adverse price movements, with the objective of maximising overall returns to shareholders. Investments in

unquoted companies, by their nature, usually involve a higher degree of risk than investments in companies quoted on a recognised stock exchange, though the risk can be mitigated to a certain extent by

diversifying the portfolio across business sectors and asset classes. The overall disposition of the Company’s assets is monitored by the Board on a quarterly basis.

Details of the Company’s investment portfolio at the balance sheet date are set out on page 24. An analysis of investments between debt and equity instruments is given in Note 8.

2.3% (31 March 2023: 3.2%) by value of the Company’s net assets comprises equity securities listed on the London Stock Exchange or quoted on AIM. A 5% increase in the bid prices of securities as at

31 March 2024 would have increased net assets and the total return for the year by £133,000 (31 March 2023: £608,000); a corresponding fall would have reduced net assets and the total return for the year by

the same amount.

Other price risk sensitivity

69.6% (2023: 74.6%) by value of the Company’s net assets comprises investments in unquoted companies held at fair value. A sensitivity analysis is provided below which recognises that the valuation

methodologies employed involve subjectivity in the selection of the key inputs, as described in the valuation policy on page 61. Although the Directors believe that the estimates of fair value are appropriate,

the use of different methodologies or assumptions regarding the inputs could lead to different measurements of fair value. Each portfolio company has been categorised as being subject to potentially

higher or lower estimation uncertainty by considering a range of factors and the availability and extent of cash resources. A greater sensitivity factor has been applied to those investments assessed as

being susceptible to higher estimation uncertainty. Whilst the sensitivities applied illustrate the impact of varying the key inputs by the levels specified, it is possible that applying reasonable alternative

assumptions to individual investments could lead to measurements of fair value which vary to a greater extent than that illustrated.

As at 31 March 2024 Valuation basis	Fair value of unquoted investments £000	Variable input sensitivity	Impact: increase* £000*	% of net assets	Impact: decrease* £000*	% of net assets
Earnings / revenue multiple
Higher sensitivity	23,163	+ / – 20%	4,150	3.6%	3,793	3.3%
Lower sensitivity	26,381	+ / – 10%	1,958	1.7%	2,065	1.8%
Price of a recent investment subsequently calibrated as appropriate
Higher sensitivity	14,077	+ / – 20%	1,569	1.4%	666	0.6%
Lower sensitivity	16,291	+ / – 10%	689	0.6%	662	0.6%
Total unquoted investments	79,912		8,366	7.3%	7,186	6.3%
As at 31 March 2023
Valuation basis
Earnings / revenue multiple
Higher sensitivity	1,741	+ / – 20%	276	0.3%	168	0.2%
Lower sensitivity	20,916	+ / – 10%	1,521	1.5%	1,856	1.8%
Price of a recent investment subsequently calibrated as appropriate
Higher sensitivity	16,550	+ / – 20%	679	0.7%	495	0.5%
Lower sensitivity	37,237	+ / – 10%	3,155	3.1%	2,958	2.9%
Total unquoted investments	76,444		5,631	5.6%	5,477	5.4%

*

Impact on net assets and net return aſter taxation.