NORTHERN VENTURE TRUST PLC — Interim / Quarterly Report 2012

Mar 31, 2012

NorthernVentureTrust PLC

Half-yearly financial report 31 March 2012

Northern Venture Trust PLCis a Venture Capital Trust (VCT)managed by NVM Private Equity Limited.

The trust was one of the firstVCTs launched on the London Stock Exchange in 1995. Itinvestsmainlyin unquoted venture capital holdings and aims to provide highlong-term tax-free returns toshareholdersthroughacombination of dividend yield and capital growth.

Contents

• 1 Financial summary
• 2 Half-yearly management report
• 4 Five year performance
• 5 Investment portfolio
• 6 Income statement
• 6 Reconciliation of movements in shareholders' funds
• 8 Balance sheet
• 9 Cash flow statement
• 10 Notes to the financial statements
• 11 Risk management
• 12 Company information

Financial summary

Six months ended 31 March:	2012	2011
Net assets	£63.8m	£61.8m
Net asset value per share	89.4p	88.6p
Return per share
Revenue	0.5p	0.5p
Capital	4.1p	7.9p
Total	4.6p	8.4p
Interim dividend per share declared
in respect of the period	3.0p	3.0p
Cumulative return to shareholders since launch
Net asset value per share	89.4p	88.6p
Dividends paid per share*	99.5p	93.5p
Net asset value plus dividends paid per share	188.9p	182.1p
Share price at end of period	73.6p	74.0p
Share price discount to net asset value	17.7%	16.5%

*Excluding interim dividend not yet paid

Key dates

Half-yearly results announced 18 May 2012

Shares quoted ex dividend 6 June 2012

'On record' date for interim dividend 8 June 2012 Interim dividend paid 29 June 2012

Half-yearlymanagement report

for the six months ended 31 March 2012

Although the state of the UK economy continues to present stiff challenges, themajority of our companies havemade satisfactory progress.

Your directors are pleased to report on a half year of continuing steady progress for Northern Venture Trust.

Results and dividend

The net asset value (NAV) per ordinary share at 31March 2012, after deducting the 2010/11 final dividend of 3.0p per share paid in December 2011, was 89.4p, compared with 87.8p at 30 September 2011. The return per share before dividends for the six month period as shown in the income statement was 4.6p (six months ended 31 March 2011 8.4p), equivalent to 5.2% of the NAV at the start of the period.

Income from the company's investments was higher than in the corresponding period last year, reflecting the benefit of the income on the additional funds raised in the public share offer in late 2010 and early 2011. The revenue element of the return for the period was unchanged at 0.5p per share. There were no significant realised gains on investment disposals during the half year, but good performance from the investment portfolio resulted in a net valuation gain of £3.0 million.

An interim dividend of 3.0p per share, unchanged from last year, has been declared and this will be paid on 29 June 2012 to shareholders on the register on 8 June 2012. It remains our objective to maintain the annual dividend at not less than 6.0p per share.

Investments

During the period a further £1,000,000 was invested in Evolve Investmentsto help fund the acquisition of Volumatic, which manufactures intelligent cash handling equipment, and £244,000 was invested in a new share placing by Brady, the AIM-quoted developer of commodity trading and risk management software. A new investment of £974,000 was completed in Lineup Systems, which develops software solutions for multichannel media businesses. Since 31 March we have also committed to invest a further £661,000 inWear Inns as part of a £10 million funding package for the acquisition of a number of additional pubs.

The unquoted venture capital portfolio at 31 March 2012 consisted of 34 companies with an aggregate value of £37.8 million. Although the state of the UK economy continues to present stiff challenges, the majority of our companies have made satisfactory progress with our three largest holdings by value, Kerridge Commercial Systems,Alaric Systems and Closerstill Holdings, reporting excellent results. Our managers are currently working on several potential exits, at least one of which we hope will come to fruition in the second half of the financial year.

In the AIM quoted portfolio there has been strong share price performance fromAdvanced Computer Software Group, IDOX and Tikit Group.

As previously reported, your board has decided to invest part of the company's funds in income-yielding FTSE 350 listed equities and funds as well as maintaining an exposure to the fixed-income sector and this has produced a useful enhancement to the overall portfolio yield.

John HustlerChairman

Shareholder issues

There continues to be a steady demand for the company's shares in the secondary market. In addition the company facilitates shareholder liquidity by maintaining a policy of buying back its shares in the market at a 15% discount to NAV, and 230,000 shares were re-purchased in March 2012 as the end of the tax year approached. We continue to believe that our shares offer good value to those seeking high tax free income returns and we hope that the impending introduction of the Retail Distribution Review will educate a wider market to the benefits of buying second hand VCT shares as well as subscribing for new issues.

Since 1995 the company has paid dividends totalling over £40 million (following payment of the interim dividend our original subscribers will have received over 100p per share) and has returned a further £11 million to shareholders through tender offers and share buy-backs, whilst exceeding our long-term objective of maintaining an NAV per share of at least 80p.

VCT qualifying status

The company has maintained its approved venture capital trust status with HM Revenue & Customs. Continuing compliance is carefully monitored by the board with assistance from our managers and from our independent VCT taxation advisers at PricewaterhouseCoopers LLP.

VCT legislation

The Government announced at the time of the 2011 Budget over a year ago that the VCT rules would be changed with effect from April 2012, so as to relax the limits on the size of qualifying companies and increase the amount of funding which companies can raise from VCTs. In July 2011 HM Treasury published a consultation paper confirming its intention to implement these reforms, with a new annual limit of £10 million on the amount any qualifying company could raise from VCTs, and also to refocus VCT investment on "genuine risk capital investments".

However some uncertainty has been created by the draft legislation contained in the 2012 Finance Bill, published on 29 March, which included some significant changes to what had previously been proposed. The VCT industry is awaiting clarification from HM Treasury and the European Commission in relation to several specific issues, which in the short term has led to a number of investments by VCTs having to be postponed despite in some cases having been previously approved by HM Revenue & Customs. Research published recently by the Association of Investment Companies (AIC) supports the view that VCTs such as Northern Venture Trust have been a highly effective catalyst to economic growth, corporate development, technological innovation, job creation and the generation of tax and other revenues for the Treasury and it is to be hoped that the future legislative framework will reflect this.

Outlook

In the light of the progress made over the past six months we remain cautiously optimistic about future prospects for the company. With net assets of over £60 million our company is among the largest VCTs; the company has a strong reserve of liquidity for future investment, and we should be able to maintain a welldiversified portfolio which will be capable of generating income and capital gains for distribution by way of dividend whilst allowing a measure of capital growth.

On behalf of the Board

John Hustler Chairman 18 May 2012

Five year performance

Comparative return to shareholders (assuming dividends re-invested)

Net asset value and cumulative dividends per share

Investment portfolio

as at 31 March 2012

	Cost	Valuation	% of net assets
	£000	£000	by value
Fifteen largest venture capital investments
Kerridge Commercial Systems	1,741	4,464	7.0
Alaric Systems	2,175	2,831	4.5
CloserStill Holdings	1,001	2,747	4.3
Weldex (International) Offshore Holdings	3,262	2,408	3.8
Paladin Group	1,709	2,173	3.4
CGI Group Holdings	3,449	2,063	3.2
Volumatic	1,995	1,995	3.1
Kitwave One	1,582	1,607	2.5
Arleigh International	775	1,228	1.9
Wear Inns	979	1,206	1.9
Advanced Computer Software Group*	381	1,164	1.8
Axial Systems Holdings	1,004	1,140	1.8
Promatic Group	1,230	1,126	1.8
Cawood Scientific	1,073	1,094	1.7
IDOX*	269	1,055	1.7
	22,625	28,301	44.4
Other venture capital investments
Control Risks Group Holdings	746	1,037	1.6
Tinglobal Holdings	988	988	1.5
Lineup Systems	974	974	1.5
RCC Lifesciences	995	965	1.5
KPJ Software Services	995	898	1.4
Closer2 Investments	888	888	1.4
Lanner Group	832	783	1.2
Mantis Deposition Holdings	747	747	1.2
IG Doors	244	601	0.9
Direct Valeting	403	597	0.9
Interlube Systems	88	560	0.9
Tikit Group*	377	556	0.9
e-know.net	360	540	0.9
Optilan Group	1,000	500	0.8
Brady*	386	491	0.8
Altacor	477	477	0.7
Envirotec	314	444	0.7
S&P Coil Products	180	410	0.6
Sinclair IS Pharma*	425	383	0.6
Gentronix	535	239	0.4
Vectura Group**	211	235	0.4
Brulines Group*	184	158	0.2
Other investments each valued at less than £100,000	2,483	114	0.2
Total venture capital investments	37,457	41,886	65.6
Listed equity investments	5,970	5,783	9.1
Listed fixed-interest investments	2,786	2,507	3.9
Total fixed asset investments	46,213	50,176	78.6
Net current assets		13,628	21.4
Net assets		63,804	100.0

*Quoted on AIM **Listed on London Stock Exchange

Income statement

(unaudited) for the six months ended 31 March 2012

	Six months ended 31 March 2012
	Revenue	Capital	Total
	£000	£000	£000
Gain on disposal of investments	–	294	294
Movements in fair value of investments	–	3,045	3,045
	–	3,339	3,339
Income	774	–	774
Investment management fee	(161)	(483)	(644)
Recoverable VAT	–	–	–
Other expenses	(187)	–	(187)
Return on ordinary activities before tax	426	2,856	3,282
Tax on return on ordinary activities	(53)	53	–
Return on ordinary activities after tax	373	2,909	3,282
Return per share	0.5p	4.1p	4.6p

• The Total column of this statement is the profit and loss account of the company. The supplementary Revenue and Capital columns have been prepared in accordance with guidance published by the Association of Investment Companies.

• There are no recognised gains or losses other than those disclosed in the income statement.
• All items in the above statement derive from continuing operations.

Reconciliation ofmovements in shareholders' funds

(unaudited) for the six months ended 31 March 2012

	Six months ended 31 March 2012 £000
Equity shareholders' funds at 1 October 2011	62,570
Return on ordinary activities after tax	3,282
Dividends recognised in the period	(2,138)
Net proceeds of share issues	258
Shares purchased for cancellation	(168)
Equity shareholders' funds at 31 March 2012	63,804

	Six months ended 31 March 2011			Year ended 30 September 2011
Revenue	Capital	Total	Revenue	Capital	Total
£000	£000	£000	£000	£000	£000
–	367	367	–	1,277	1,277
–	4,757	4,757	–	5,125	5,125
–	5,124	5,124	–	6,402	6,402
624	–	624	1,845	–	1,845
(130)	(389)	(519)	(289)	(867)	(1,156)
33	99	132	33	99	132
(179)	–	(179)	(350)	(14)	(364)
348	4,834	5,182	1,239	5,620	6,859
(70)	70	–	(264)	264	–
278	4,904	5,182	975	5,884	6,859
0.5p	7.9p	8.4p	1.5p	8.8p	10.3p

Six months ended 31 March 2011	Year ended 30 September 2011
£000	£000
50,414	50,414
5,182	6,859
(2,661)	(4,789)
13,523	14,782
(4,679)	(4,696)
61,779	62,570

Balance sheet

(unaudited) as at 31 March 2012

	31 March 2012 £000	31 March 2011 £000	30 September 2011 £000
Fixed asset investments	50,176	44,220	44,148
Current assets
Debtors	548	1,093	218
Cash and deposits	13,175	17,198	18,294
	13,723	18,291	18,512
Creditors (amounts falling
due within one year)	(95)	(732)	(90)
Net current assets	13,628	17,559	18,422
Net assets	63,804	61,779	62,570
Capital and reserves
Called-up equity share capital	17,840	17,440	17,820
Share premium	10,672	21,611	10,491
Capital redemption reserve	14,411	14,353	14,353
Capital reserve	15,152	6,433	17,053
Revaluation reserve	3,963	392	961
Revenue reserve	1,766	1,550	1,892
Total equity shareholders' funds	63,804	61,779	62,570
Net asset value per share	89.4p	88.6p	87.8p

Cash flow statement

(unaudited) for the six months ended 31 March 2012

	Six months ended 31 March 2012 £000	Six months ended 31 March 2011 £000	Year ended 30 September 2011 £000
Net cash inflow/(outflow) from operating activities	(382)	625	1,324
Taxation Corporation tax paid	–	–	–
Financial investment Purchase of investments Sale/repayment of investments	(4,330) 1,641	(7,593) 3,660	(10,925) 8,275
Net cash outflow from financial investment	(2,689)	(3,933)	(2,650)
Equity dividends paid	(2,138)	(2,661)	(4,789)
Net cash outflow before financing	(5,209)	(5,969)	(6,115)
Financing Issue of shares Share issue expenses	263 (5)	14,302 (779)	15,618 (836)
Re-purchase of ordinary shares for cancellation	(168)	(4,679)	(4,696)
Net cash inflow from financing	90	8,844	10,086
Increase/(decrease) in cash and deposits	(5,119)	2,875	3,971
Reconciliation of return before tax to net cash flow from operating activities Return on ordinary activities before tax Gain on disposal of investments Movements in fair value of investments Decrease/(increase) in debtors Increase in creditors	3,282 (294) (3,045) (330) 5	5,182 (367) (4,757) (98) 665	6,859 (1,277) (5,125) 845 22
Net cash inflow/(outflow) from operating activities	(382)	625	1,324
Reconciliation of movement in net funds	1 October 2011 £000	Cash flows £000	31 March 2012
Cash and deposits	18,294	(5,119)	13,175

Notes to the financial statements

(unaudited) for the six months ended 31 March 2012

• 1 The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Where presentational guidance set out in the Statement of Recommended Practice (SORP) "Financial Statements of Investment Trust Companies", revised in January 2009, is consistent with the requirements of UK GAAP, the directors have sought to prepare the financial statements on a consistent basis compliant with the recommendations of the SORP.
• 2 Each of the directors confirms that to the best of his 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.
• 3 The calculation of the revenue and capital return per share is based on the return on ordinary activities after tax for the six months ended 31 March 2012 and on 71,457,128 (2011 61,845,403) ordinary shares, being the weighted average number of shares in issue during the period.
• 4 The calculation of net asset value per share is based on the net assets at 31 March 2012 divided by the 71,358,388 (2011 69,759,719) ordinary shares in issue at that date.
• 5 The unaudited half-yearly financial statements for the six months ended 31 March 2012 do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006, have not been audited or reviewed by the company's independent auditors and have not been delivered to the Registrar of Companies. The figures for the year ended 30 September 2011 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies; the independent auditors' report on those financial statements was unqualified and 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 30 September 2011.
• 6 The interim dividend of 3.0p per share for the year ending 30 September 2012 will be paid on 29 June 2012 to shareholders on the register on 8 June 2012.
• 7 Copies of this half-yearly report have been mailed to shareholders and are available to the public at the company's registered office, and on the NVM Private Equity Limited website,www.nvm.co.uk.

Riskmanagement

The board carries out a regular review of the risk environment in which the company operates. The principal risks and uncertainties identified by the board are as follows:

Investment risk:the majority of the company's investments are in small and medium-sized unquoted 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 and industry sector. The board reviews the investment portfolio with the investment manager on a regular basis.

Financial risk: as most of the company's investments involve a medium- to long-term commitment and 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 direct 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.

Stock market risk:some of the company's investments are quoted on the London Stock Exchange or the AIM market and will be subject to market fluctuations upwards and downwards. External factors such as terrorist activity can negatively impact stock markets worldwide and the AIM market is no exception to this. In times of adverse sentiment there can be very little, if any, market demand for shares in smaller quoted companies.

Credit risk: the company holds a number of financial instruments and cash deposits and is dependent on the counterparties discharging their commitment. The directors review the creditworthiness of the counterparties to these instruments and cash deposits in addition to ensuring no significant concentration of credit risk is with any one counterparty.

Liquidity risk:the company's investments may be difficult to realise. The fact that a stock is quoted on a recognised market 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.

Political risk: in order to maintain its approval as a VCT, the company is required to comply with current VCT legislation in the UK as well as the European Commission's State Aid rules. Politically motivated 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. The board and the manager monitor political developments and where appropriate seek to make representations either directly or through the relevant trade bodies.

Internal control risk:the board regularly reviews the system of internal controls, both financial and nonfinancial, 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.

Company information

Directors

John Hustler (Chairman) Nigel Beer Michael Denny Ross Peters Hugh Younger

Secretary

Christopher Mellor FCA MCSI

Registered Office

Northumberland House Princess Square Newcastle upon Tyne NE1 8ER

T 0191 244 6000 E nvt@nvm.co.uk www.nvm.co.uk

Investment Manager

NVM Private Equity Limited Northumberland House Princess Square Newcastle upon Tyne NE1 8ER

Registrars

Equiniti Limited Aspect House Spencer Road Lancing BN99 6DA

Equiniti shareholder helpline: 0800 028 2349

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