Downing FOUR VCT plc : Final Results

Downing FOUR VCT plc
Report & Accounts for the year ended 31 March 2017

FINANCIAL HIGHLIGHTS

	31 March 2017		31 March 2016
	pence		pence
DSO B Share pool
Net asset value per DSO B Share	20.7		17.6
Net asset value per DSO C Share	0.1		0.1
Cumulative distributions	91.5		91.5
Adjusted for performance estimate	(5.5)		(4.8)
Total return per DSO B Share and DSO C Share	106.8	1	104.4
DSO D Share pool
Net asset value per DSO D Share	76.1		75.6
Cumulative distributions	25.0		20.0
Total return per DSO D Share	101.1	2	95.6
DP67 Share pool
Net asset value per DP67 Share	66.1		60.4
Cumulative distributions (since original launch)	27.8		23.8
Total return per DP67 Share	93.9		84.2
DP2011 General Share pool
Net asset value per DP2011 General Ordinary Share	15.0		75.1
Net asset value per DP2011 General A Share	31.2		5.9
Cumulative distributions (since original launch)	55.0		22.5
Total return per DP2011 General Ordinary Share and DP2011 General A Share	101.2	3	103.5
DP2011 Structured Share pool
Net asset value per DP2011 Structured Ordinary Share	4.8		77.1
Net asset value per DP2011 Structured A Share	31.9		6.1
Cumulative distributions (since original launch)	65.0		22.5
Total return per DP2011 Structured Ordinary Share and DP2011 Structured A Share	101.7	4	105.7
DP2011 Low Carbon Share pool
Net asset value per DP2011 Low Carbon Share	43.0		41.6
Cumulative distributions (since original launch)	73.9		73.9
Adjusted for performance estimate	(2.5)		-
Total return per DP2011 Low Carbon Share	114.4	5	115.5
Generalist Share pool
Net asset value per Generalist Share	99.9		N/A
Cumulative distributions per Generalist Share	-		N/A
Total return per Generalist Share	99.9		N/A
Healthcare Share pool
Net asset value per Healthcare Share	99.7		N/A
Cumulative distributions per Healthcare Share	-		N/A
Total return per Healthcare Share	99.7		N/A

¹ Based on Total Return levels at 31 March 2017, performance fees are expected to become due to management.  These are estimated to be 5.5p per DSO B/DSO C Share.
² At this stage in the share pools life there is no estimate for performance fees.
³ The total return to shareholders at 31 March 2017 is shown net of performance fees which are expected to become due to management. These are estimated to be 4.7p per DP2011 General Ordinary share.
⁴ The total return to shareholders at 31 March 2017 is shown net of performance fees which are expected to become due to management. These are estimated to be 4.8p per DP2011 Structured Ordinary share.
⁵ Based on Total Return levels at 31 March 2017, performance fees are expected to become due to management.  These are estimated to be 2.5p per DP2011 Low Carbon Share.

CHAIRMAN'S STATEMENT

Introduction
I am pleased to present the Company's Annual Report for the year ended 31 March 2017.

It has been a busy year for your Company as a number of the planned exit share pools continue to make progress in returning funds to investors as they move toward the end of their life. At the same time, the Company also launched fundraisings for two new "evergreen" share classes, which have raised a significant level of new funds for investment.

Share pool review
As at 31 March 2017 the Company has eight active share pools. A brief review of each is given below.

DSO B Share pool
The DSO B Shares and C Shares were originally issued in 2010. The process of realising the portfolio is now approaching completion.

At the year end, the Net Asset Value ("NAV") of a combined holding of one DSO B Share and one DSO C Share stood at 20.8p, an increase of 3.1p (17.5%) over the year. Based on these values, it is estimated that there will be a performance incentive payable to members of the management team equivalent to 5.5p per B Share.

After providing for this incentive, the Total Return to Shareholders (NAV plus dividends paid to date less performance incentive) is estimated to be 106.8p for a holding of one DSO B Share and one DSO C Share (split 96.0p per DSO B Share and 10.8p per DSO C Share), compared to the cost for Shareholders who invested in the DSO B Share offer of 100.0p or 70.0p net of income tax relief.

The share pool now has four remaining investments with attributable value, each of which is in an active sales process. The Manager is optimistic that these sales will complete in the coming months and that the share pool will then be able to make a final distribution to B Shareholders.

A detailed review of the DSO B Share pool is presented in the Investment Manager's report.

DSO D Share pool
The DSO D Shares were originally issued in 2012. The fifth anniversary of the close of the offer falls later this year, at which time the process of starting to unwind the investment portfolio will commence.

The DSO D Share NAV stood at 76.1p at the year end, an increase of 5.5p per share or 7.3% over the year after adjusting for the dividends of 5.0p per share paid in the year. Total Return now stands at 101.1p per share, compared to the cost for Shareholders who invested in the DSO D Share offer of 100.0p or 70.0p net of income tax relief.

The performance of the DSO D Share pool was held back in the initial years by disappointing performance from a small number of investments. Over the year, the share pool has been able to make some progress and the Manager believes that there are prospects for some further growth before the portfolio is realised and funds returned to investors.

A more detailed review of the DSO D Share pool is presented in the Investment Manager's Report.
                               
DP67 Share pool
The DP67 shares were originally issued in 2007, although many shareholders took advantage of the opportunity to participate in a Share Realisation and Reinvestment Scheme in 2013, which started a new 5-year holding period for those investors. The task of seeking to realise the DP67 share pool investments will therefore commence in 2018.

The DP67 Share NAV stood at 66.1p at the year end, an increase of 9.7p per share or 16.1% over the year after adjusting for the dividends paid of 4.0p per share. Total Return now stands at 93.9p per share, compared to the original cost for Shareholders who invested in 2007 of 100.0p or 70.0p net of income tax relief.

A more detailed review of the DP67 Share pool is presented in the Investment Manager's report.

DP2011 General Share pool
The DP2011 General Shares were originally issued in 2011 and so the process of seeking to realise the investments has now commenced.

The NAV of a combined holding of one DP2011 General Ordinary Share and one DP2011 General A Share stood at 46.2p at the year end, a decrease of 2.3p per share or 2.8% for the year, after adjusting for the dividends paid of 32.5p per share. Total Return now stands at 101.2p per share, compared to the cost for Shareholders of 100.0p or 70.0p net of income tax relief.
The share pool has a significant number of remaining investments, however most now have a path to exit.  We expect to see a number of disposals in the coming months and anticipate that the task of realising the whole portfolio might be completed by the end of the year.

A more detailed review of the DP2011 General Share pool is presented in the Investment Manager's report.

DP2011 Structured Share pool
The DP2011 Structured Shares were originally issued in 2011 and so the process of seeking to realise the investments has also now commenced.

The NAV of a combined holding of one DP2011 Structured Ordinary Share and one DP2011 Structured A Share stood at 36.7p at the year end, a decrease of 4.0p per share or 4.8% for the year, after adjusting for the dividends of 42.5p per share. Total Return now stands at 101.7p per share, compared to the cost for Shareholders 100.0p or 70.0p net of income tax relief.

As with the DP2011 General Share pool, there are still a significant number of remaining investments, but most are progressing plans for a sale. We anticipate that there will be several disposals in the coming months and believe that it is a realistic target for the Share pool to realise all the investments by the end of the year.

A more detailed review of the DP2011 Structured Share pool is presented in the Investment Manager's Report.

DP2011 Low Carbon Share pool
The DP2011 Low Carbon Shares were originally issued in 2011. The process of realising the investments is now nearing completion.

The DP2011 Low Carbon Share pool NAV stood at 43.0p at the year end, an increase of 1.4p per share or 3.4% for the year. Based on the above values, total Shareholder proceeds are projected to trigger the hurdle levels at which a performance fee is paid to management. The performance fee is estimated to be 2.5p per DP2011 Low Carbon Share.  After providing for such a fee, it is estimated that the final Total Return to Shareholders will be 114.4p, compared to the cost for Shareholders who invested in the DP2011 Low Carbon Share offer 100.0p or 70.0p net of income tax relief.

The Share pool has four remaining investments, all of which are part of sales processes. The Manager is hopeful that these transactions can be completed in the next two to three months, after which the share pool will make a final distribution.

A more detailed review of the DP2011 Low Carbon Share pool is presented in the Investment Manager's report.

Generalist and Healthcare Share pools
In December 2016, the Company launched offers for subscription seeking to raise new funds for two new "evergreen" share classes. The Generalist Share pool will invest in general growth opportunities, which is a good fit with the new VCT regulations introduced over the last two years. The Healthcare Share pool will invest in the life sciences sector. The Manager, Downing LLP, is being supported by Bioscience Managers Limited, an experienced investment manager in this sector, in investing these funds.

The Generalist and Healthcare offers have raised £30.0m and £7.7m respectively to date. As at 31 March 2017, £225,000 and £25,000 had been invested by the Generalist and Healthcare Share pools respectively. The task of investing the remaining funds is now underway and further investments will be covered in the next Half Yearly Report.

Dividends
In the initial 5-year period of each planned exit share pool, the Company's usual policy is to pay annual dividends totalling at least 5p per share (on a twice-yearly basis).  The target is at least 4p per annum for the DP67 Share pool.

In line with this policy, subject to approval at the forthcoming AGM, a dividend of 2.5p per DSO D Share and 2.0p per DP67 Share will be paid on 29 September 2017 to DSO D Shareholders and DP67 Shareholders respectively on the register at 1 September 2017.

Dividends from the other planned exit share pools will be declared as and when sufficient disposals have completed for a further payment to be made to Shareholders.

Board
As I reported in the last Half Yearly Report, there were some Board changes during the year. In view of the fact that some of the original planned exit share pools have wound up and others are in the process, Mark Mathias and Robin Chamberlayne decided to retire as directors in December 2016.
I would like to personally thank both Mark and Robin for their insightful and valuable contributions since the Company's launch as Downing Protected Opportunities VCT1 plc in 2009 and wish them every success in their other ventures.

Their departure leaves the Company with a Board comprising three non-executive directors, which the Directors have agreed is satisfactory for a Company of this size at the current time.

Share buybacks
In the initial 5-year period of each share class, the Company operates a policy of buying in its own shares that become available in the market subject to regulatory restrictions and other factors such as availability of liquid funds. Any such purchases are undertaken at a price approximately equal to NAV i.e. at a nil discount.  80,473 DP67 Shares were purchased in the year to 31 March 2017.

Now that the DSO B Share pool and all of the DP2011 Share pools have commenced realisations to return funds to Shareholders, the Company no longer undertakes any further share buybacks in respect of the DSO B Shares, DSO C Shares, DP2011 General Ordinary Shares, DP2011 General A Shares, DP2011 Structured Ordinary Shares, DP2011 Structured A Shares and DP2011 Low Carbon Shares. The Board believes it is fairer to all Shareholders to distribute proceeds from the investment realisations to all the above Shareholders by way of dividends, rather than setting aside sums to fund share buybacks.

The policy for buying in shares is still in operation for the DP67, Generalist and Healthcare Shares.

Annual General Meeting ("AGM")
The Company's seventh AGM will be held at Fifth Floor, Ergon House, Horseferry Road, London, SW1P 2AL at 11.15 a.m. on 5 September 2017.

Three items of special business are proposed.  The Board may, in due course, give consideration to a further offer for subscription for both the Generalist and Healthcare Shares. To give the Board flexibility and eliminate the costs of issuing a separate Shareholder circular, the Board is seeking Shareholder approval to give the Directors power to allot up to approximately £40M worth of Generalist Shares and £30M of Healthcare Shares and is also seeking to waive pre-emption right on those shares.  The Directors will only proceed with such an offer if they consider that market conditions are supportive and it to be in the best interest of Shareholders. Resolutions 7 and 8 to be proposed at the AGM deal with these approvals. 

Resolution 9 is a special resolution seeking to renew the authority to allow the Company to make market purchases of its shares.

Outlook
I expect the coming year to be as busy as the last. A number of the planned exit share pools are expected to complete the return of funds to investors in the next 12 months.

The focus of the Manager will also be on investing the new funds in the new Generalist and Healthcare Share pools, which launched during the year. We expect to see a significant level of new investments made as these portfolios are created.

As these two processes progress the Company will gradually transform from being a collection of planned exit offerings, to a more mainstream generalist VCT. I look forward to reporting developments in the Half Yearly Report to 30 September 2017.

Lord Flight
Chairman

INVESTMENT MANAGER'S REPORT- DSO B SHARE POOL

Introduction
The DSO B Share pool has made good progress during the year in realising investments with six full exits completed. We are in the process of fulfilling realisation plans for the remainder four live investments in the portfolio, which had a value of £1.8m as at 31 March 2017.

Net asset value and results
The NAV per DSO B Share at 31 March 2017 stood at 20.7p and per DSO C Share at 0.1p, a rise of 3.1p for a combined holding of one DSO B Share and one DSO C Share over the year after adjusting for dividends. Total Return (combined NAV plus cumulative dividends) stood at 106.8p for a combined holding, after taking account of the estimated performance incentive fee of 5.5p.

The return on ordinary activities after taxation for the year was £619,000 (2016: £1.3 million), comprising a revenue return of £59,000 (2016: £736,000) and a capital return of £560,000 (2016: £559,000).

Venture Capital investments
Portfolio activity
Six investments were fully exited during the year generating proceeds of £1.8m and a realised gain on opening valuations of £474,000.

The remaining investments have been revalued to reflect the expected proceeds from their respective exit processes, resulting in an overall gain of £20,000 in the year.

Realisation Plans
There are exit plans in place for the remaining investments and the holdings in Westcountry Solar Solutions Limited, Avon Solar Energy Limited and Mosaic Spa and Health Clubs Limited are all in exit processes and we expect them to complete in the summer.

Outlook
The timing of the remaining exits is difficult to estimate due to our reliance on third parties, however we envisage that the final DSO B Share pool dividend will be paid later in the year.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000
Venture Capital investments
Avon Solar Energy Limited	420	515	80	12.2%
Mosaic Spa & Health Clubs Limited*	692	441	(79)	10.5%
Westcountry Solar Solutions Limited	500	434	(66)	10.3%
Fenkle Street LLP**	154	362	85	8.6%
Future Biogas (Reepham Road) Limited	632	-	-	0.0%
Quadrate Spa Limited*	276	-	-	0.0%
	2,674	1,752	20	41.6%
Cash at bank and in hand		2,475		58.4%
Total investments		4,227		100.0%

* partially qualifying investment
** non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2017

DISPOSALS

	Cost	Valuation at 31/3/16	Proceeds	Profit vs. cost	Realised gain
	£'000	£'000	£'000	£'000	£'000
Sales
Quadrate Catering Limited	56	-	313	257	313
Camandale Limited	592	-	5	(587)	5
Redmed Limited**	66	57	57	(9)	-
Future Biogas (SF) Limited	122	122	147	25	25
Kidspace Adventures Holdings Limited	750	930	939	189	9
Future Biogas (Reepham Road) Limited	258	193	257	(1)	64
Deferred consideration
Kilmarnock Monkey Bar Limited	-	-	12	12	12
Liverpool Nurseries (Holdings) Limited	-	-	46	46	46
	1,844	1,302	1,776	(68)	474

** non-qualifying investment

INVESTMENT MANAGER'S REPORT- DSO D SHARE POOL

Introduction
At 31^st March 2017, the DSO D Share pool was fully invested and held investments in 14 Venture Capital investments with a value of £4.8 million and 1 Structured Product investment with a value of £598,000.

Net asset value and results
The net asset value ("NAV") per DSO D Share at 31 March 2017 stood at 76.1p, an increase of 5.5p or 7.3% over the year after adjusting for dividends paid. Total Return stands at 101.1p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per share.

The profit on ordinary activities after taxation for the year was £437,000 (2016: £48,000), comprising a revenue profit of £49,000 (2016: £129,000) and a capital gain of £388,000 (2016: loss of £81,000).

Venture Capital investments
Portfolio activity
No new investments were made in the period and one follow on investment of £145,000 was made into Goonhilly Earth Station Limited, the satellite station in Cornwall, which takes the total investment cost to £715,000.

Grasshopper 2007 Limited, the owner of the Grasshopper Inn in Kent, was the only full exit in the period and generated proceeds equal to the original cost of £294,000.

Portfolio valuation
Four value uplifts were recognised in the period totalling £376,000.

Nightjar Sustainable Power Limited, an operational run-of-river hydroelectric scheme in Argyll, Scotland, was uplifted by £115,000 due to the project performing ahead of budget.

Pearce & Saunders Limited, the owner of three pubs in south east London, which was previously written down, was uplifted by £108,000 to a value equivalent to cost following a significant increase in property prices in the area.

Lambridge Solar Limited, the owner of a solar farm in Lincolnshire, has increased in value by £78,000 following good performance of the solar arrays.

Merlin Renewables Limited is a 2MW gas injection anaerobic digestion plant in Norfolk. The plant continues to perform to expectations and an uplift of £75,000 has been recognised in the year.

Structured Product Portfolio
Two Structured Product investments matured in the period and returned £606,000 to the Share pool. The one remaining Structured Product increased in value by £26,000 during the year and matured in April 2017.

Outlook
The focus for the DSO D Share portfolio is now on close monitoring and support of the portfolio companies in order to maximise growth opportunities until the realisation process commences later in the year.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000
Structured Product investments
HSBC 5.4% Dual Index Synthetic Zero	501	598	26	10.3%
Venture Capital investments
Vulcan Renewables Limited	653	779	-	13.4%
Goonhilly Earth Station Limited	715	715	-	12.3%
Nightjar Sustainable Power Limited	485	600	115	10.3%
Lambridge Solar Limited	500	595	78	10.3%
Merlin Renewables Limited	500	575	75	9.9%
Apex Energy Limited	400	400	-	6.9%
Pearce and Saunders Limited*	300	300	108	5.2%
City Falkirk Limited	562	236	-	4.1%
Fubar Stirling Limited	357	225	-	3.9%
Fresh Green Power Limited	200	200	-	3.4%
Green Energy Production UK Limited	100	100	-	1.7%
Cheers Dumbarton Limited	64	22	-	0.4%
Pearce and Saunders DevCo Limited**	20	20	-	0.3%
Lochrise Limited	17	-	-	0.0%
	4,873	4,767	376	82.1%
	5,374	5,365	402	92.4%
Cash at bank and in hand		435		7.6%
Total investments		5,800		100.0%

*              partially qualifying investment, previously written down
**           non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2017

ADDITIONS

	£'000
Venture Capital investments
Goonhilly Earth Station Limited	145
	145

DISPOSALS

	Cost	Valuation at 31/3/16	Proceeds	Profit vs. cost	Realised gain
	£'000	£'000	£'000	£'000	£'000
Structured Product investments
Credit Suisse 7% Defensive Worst Of Auto-Call	251	291	303	52	12
HSBC 7.1% Defensive Worst-Of-Auto-Call	251	286	303	52	17
Venture Capital investments
Grasshopper 2007 Limited	294	294	294	-	-
	796	871	900	104	29

INVESTMENT MANAGER'S REPORT - DP67 SHARE POOL
Introduction
The DP67 Share pool was formed as part of the merger in July 2015 and includes the portfolios of Downing Planned Exit VCT 6 plc and Downing Planned Exit VCT 7 plc. These companies were sister companies which held identical investment portfolios.

Net asset value and results
The net asset value ("NAV") per DP67 Share at 31 March 2017 stood at 66.1p an increase of 9.7p or 16.1% over the year after adjusting for dividends paid. Total Return stands at 93.9p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per share.

The profit on ordinary activities after taxation for the year (2016: period) was £1,090,000 (2016: £259,000), comprising a revenue profit of £79,000 (2016: £93,000) and a capital gain of £1,011,000 (2016: £166,000).

Venture Capital investments
Portfolio activity
The DP67 pool holds eight investments, of which Cadbury House and Snow Hill represent a significant proportion of the pool's net assets.

There were two qualifying additions to the portfolio during the period: £300,000 in Brownfields Limited, which was subsequently disposed of at cost during June 2017; and £400,000 in Yamuna Renewables Limited, which is working on an opportunity in the wood refinery sector.

Divestment proceeds totalling £2.4 million were received in the period and generated a realised gain over opening value of £715,000. This included £849,000 of proceeds on Gatewales Limited, £550,000 on Snow Hill Developments Limited, and the redemption (at par) of £965,000 of loan notes in Kidspace Adventures Holdings Limited and Hobblers Heath Limited.

Portfolio valuation
The DP67 portfolio continues to perform well, and produced unrealised gains of £168,000 for the year. The most significant of these was on Snow Hill Developments LLP, the developer of a Holiday Inn Express in Birmingham, where performance continues to be on target and cash flows from the business back to the fund continue to be strong. As such the value was increased by £213,000.

Fenkle Street LLP and Gatewales Limited generated an uplift of £159,000 and a write down of £40,000 respectively.

Unfortunately, a value write down has also been taken on Oak Grove Renewables Limited, the owner of an anaerobic digestion plant in Norfolk, which is performing below our expectations.

Outlook
We are pleased with the overall performance of the DP67 Share pool portfolio, as is reflected in the recent uplifts in value. The portfolio is now fully invested and our attention is focussed on monitoring performance to ensure that opportunities for growth are maximised.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Pre-merger cost	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000	£'000
Venture Capital investments
Cadbury House Holdings Limited	1,206	1,409	1,613	-	21.7%
Snow Hill Developments LLP**	750	809	1,060	213	14.2%
Fenkle Street LLP**	77	405	678	159	9.1%
Oak Grove Renewables Limited	820	820	451	(164)	6.1%
Gatewales Limited*	876	408	446	(40)	6.0%
Yamuna Energy Limited	-	400	400	-	5.4%
Brownfields Limited	-	300	300	-	4.0%
London City Shopping Centre Limited**	-	99	99	-	1.3%
		4,650	5,047	168	67.8%
Cash at bank and in hand			2,396		32.2%
Total investments			7,443		100.0%

*              partially qualifying investment
**           non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.

The figures shown in the "Pre-merger Cost" column are the original costs of the investments to Downing Planned Exit VCT 6 and 7 before the merger in July 2015.

Investment movements for the year ended 31 March 2017

ADDITIONS

	£'000
Yamuna Energy Limited	400
Brownfields Limited	300
	700

DISPOSALS

	Cost	Valuation at 01/04/16	Proceeds	Profit/ vs. cost	Realised gain
	£'000	£'000	£'000	£'000	£'000
Gatewales Limited*	156	363	849	693	486
Snow Hill Developments LLP**	275	321	550	275	229
Kidspace Adventures Holdings Limited	578	578	578	-	-
Hobblers Heath Limited	387	387	387	-	-
	1,396	1,649	2,364	968	715

* partially qualifying investment
** non-qualifying investment

INVESTMENT MANAGER'S REPORT - DP2011 GENERAL SHARE POOL

Introduction
At 31 March 2017 the DP2011 General Share pool was fully invested with a portfolio value of £7.4 million, comprising 10 fully or partly qualifying investments and a further 5 non-qualifying investments.

Now that the five year anniversary has passed, we will look to seek appropriate exit strategies to maximise returns to Shareholders.

Net asset value and results
The combined net asset value ("NAV") of one DP2011 General Ordinary Share and one DP2011 General A Share at 31 March 2017 stood at 46.2p an decrease of 2.3p or 2.8% over the year after adjusting for dividends paid. Total Return stands at 101.2p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per share.

The profit on ordinary activities after taxation for the year (2016: period) was £347,000 (2016: £32,000) comprising a revenue profit of £280,000 (2016: £383,000) and a capital gain of £67,000 (2016: loss of 351,000).

Venture Capital investments
Investment activity
The DP2011 General Share began the period with £10.4 million of investments and ended with £7.4 million spread across a portfolio of 15 Venture Capital investments. No new or follow on investments were made in the year.

The process of exiting investments in the portfolio has begun in order to return funds to Shareholders. As such, three exits occurred in the year generating proceeds of £3.2 million and a gain over opening value of £80,000.

Portfoliovaluation
Valuation movements in the year resulted in an overall unrealised gain of £84,000.  The most significant of these was on Snow Hill Developments LLP, the developer of a Holiday Inn Express in Birmingham, where performance continues to be on target and cash flows from the business back to the fund continue to be strong. As such the value was increased by £233,000.

Two small uplifts were made on Avon Solar Energy Limited and Wickham Solar Limited of £95,000 and £50,000 respectively.

Unfortunately, these gains were partially offset by unrealised losses totalling £294,000. Mosaic Spa and Health Clubs Limited is in an exit process and the £130,000 value reduction is reflective of anticipated proceeds.

Smaller write downs on Oak Grove Renewables Limited and Westcountry Solar Limited of £85,000 and £79,000 respectively have also been made in the year.

Outlook
The focus for the Share pool is on realisations and monitoring performance in order to maximise growth opportunities. Several companies are currently in exit processes and we hope to see further progress in this regard over the next few months.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Pre-merger cost	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000	£'000
Venture Capital investments
Vulcan Renewables Limited	1,845	2,199	2,199	-	28.7%
Snow Hill Developments LLP**	750	750	983	233	12.8%
Mosaic Spa and Health Clubs Limited*	1,500	1,147	825	(130)	10.8%
Avon Solar Energy Limited	505	505	618	95	8.1%
Wickham Solar Limited	473	550	600	50	7.8%
Odysian (Holdings) Limited	857	873	591	-	7.7%
Westcountry Solar Solutions Limited	600	600	521	(79)	6.8%
City Falkirk Limited	674	330	283	-	3.7%
Fubar Stirling Limited	429	410	270	-	3.5%
Oak Grove Renewable Limited	400	400	233	(85)	3.0%
London City Shopping Centre Limited**	50	88	88	-	1.2%
Clean Electricity Limited**	70	70	70	-	0.9%
UK Renewable Power Limited**	55	55	55	-	0.7%
Cheers Dumbarton Limited	76	27	27	-	0.3%
21st Century Energy Limited**	22	22	22	-	0.3%
		8,026	7,385	84	96.3%
Cash at bank and in hand			266		3.7%
Total investments			7,651		100.0%

*              partially qualifying investment
**           non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2017

DISPOSALS

	Cost	Valuation at 01/4/16	Proceeds	Profit vs. cost	Realised gain
	£'000	£'000	£'000	£'000	£'000
Kidspace Adventures Holdings Limited	1,351	1,384	1,398	47	14
Tooting Tram and Social Limited*	1,187	1,223	1,289	102	66
Kidspace Adventures Limited**	539	539	539	-	-
	3,077	3,146	3,226	149	80

* partially qualifying investment
** non-qualifying investment

INVESTMENT MANAGER'S REPORT- DP2011 STRUCTURED SHARE POOL

Introduction
At 31 March 2017 the DP2011 Structured Share pool was fully invested with a portfolio value of £4.2 million, comprising 10 fully or partially qualifying venture capital investments.

Now that the five-year anniversary has passed, we are looking to seek appropriate exit strategies to maximise returns to Shareholders.

Net asset value and results
The net asset value ("NAV") of a combined holding of one DP2011 Structured Ordinary Share and one DP2011 Structured A Share at 31 March 2017 stood at 36.7p a decrease of 4.0p or 4.8% over the year after adjusting for dividends paid. Total Return stands at 101.7p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per share.

The profit on ordinary activities after taxation for the year (2016: period) was £72,000 (2016: £10,000), comprising a revenue profit of £192,000 (2016: £247,000) and a capital loss of £120,000 (2016: £257,000).

Venture Capital investments
Investment activity
The DP2011 Structured Share pool began the period with £7.3 million of investments and ended the period with £4.2 million spread across a portfolio of 10 Venture Capital investments. There were no new or follow on investments made in the year

Two full disposals were made during the period generating total proceeds of £1.6 million and gains of £53,000.

Portfolio valuation
Two small uplifts were made on Avon Solar Energy Limited and Wickham Solar Limited of £64,000 and £50,000 respectively.

Unfortunately these gains were offset by unrealised losses totalling £255,000. Oak Grove Renewables continues to experience operating issues and was written down by £115,000 as a result. Mosaic Spa and Health Clubs Limited is in an exit process and the £87,000 value reduction is reflective of the anticipated proceeds. A smaller write down on Westcountry Solar Limited of £53,000 was also made in the year.

Structured Products
The Structured portfolio was sold in the year, resulting in realised gains totalling £31,000.

Outlook
The focus for the Share pool is on realisations and monitoring performance in order to maximise growth opportunities. Several companies are currently in exit processes and we hope to see further progress in this regard over the next few months.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Pre-merger cost	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000	£'000
Venture Capital investments
Vulcan Renewables Limited	1,091	1,305	1,305	-	30.6%
Wickham Solar Limited	473	550	600	50	14.1%
Mosaic Spa and Health Clubs Limited*	920	685	470	(87)	11.0%
Avon Solar Energy Limited	336	336	412	64	9.7%
Odysian (Holdings) Limited	571	582	394	-	9.2%
Westcountry Solar Solutions Limited	400	400	347	(53)	8.1%
Oak Grove Renewables Limited	545	545	318	(115)	7.5%
City Falkirk Limited	450	220	189	-	4.4%
Fubar Stirling Limited	286	273	180	-	4.2%
Cheers Dumbarton Limited	51	18	18	-	0.4%
		4,914	4,233	(141)	99.2%
Cash at bank and in hand			28		0.8%
Total investments			4,261		100.0%

*              partially qualifying investment

All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2017

DISPOSALS

	Cost	Valuation at 01/4/16	Proceeds	Profit vs. cost	Realised gain
	£'000	£'000	£'000	£'000	£'000
Structured Product investments
HSBC 7.1% Defensive Worst-Of-Auto-Call	447	458	469	22	11
RBS 6 Yr Dual Index Synthetic Zero 10.16%	373	380	385	12	5
Credit Suisse 10% Defensive Worst Of Auto Call	290	293	302	12	9
Credit Suisse 7% Defensive Worst Of Auto Call	279	291	297	18	6
Venture Capital investments
Kidspace Adventures Holdings Limited	901	923	932	31	9
Tooting Tram and Social Limited*	613	637	681	68	44
	2,903	2,982	3,066	163	84

* partially qualifying investment

INVESTMENT MANAGER'S REPORT- DP2011 LOW CARBON SHARE POOL

Introduction
The task of building the DP2011 Low Carbon portfolio was completed at an early stage.  The process of realising the portfolio and returning funds to Shareholders is now underway.

Net asset value and results
The net asset value ("NAV") per DP2011 Low Carbon Share at 31 March 2017 stood at 43.0p, an increase of 1.4p or 3.4% over the year after adjusting for dividends paid. Total Return stands at 114.4p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per share, after rebasing to 100p during the merger.

The profit on ordinary activities after taxation for the year (2016: period) was £107,000 (2016: £424,000), comprising a revenue profit of £83,000 (2016: £211,000) and a capital gain of £24,000 (2016: £213,000).

Venture Capital investments
Investment activity
The DP2011 Low Carbon Share pool began the period with £3.0 million of investments and ended with £3.1 million spread across a portfolio of 4 Venture Capital investments.  All of the investments own solar PV panels sited on a mix of commercial and residential rooftops, all of which received Feed in Tariffs ("FiTs").

The Share pool is in the exit stage and therefore no new or further investments have been made in the period. All four investments are currently in an exit process and the valuations reflect the anticipated proceeds.

Outlook
The exit processes are progressing with the four companies in this Share pool, and it is our expectation that these will be completed during the summer.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

	Pre-merger cost	Cost	Valuation	Valuation Movement in year	% of portfolio
	£'000	£'000	£'000	£'000
Venture Capital investments
Progressive Power Generation Limited	800	800	800	-	25.2%
UK Renewable Power Limited	780	780	780	-	24.5%
21st Century Energy Limited	600	708	775	67	24.4%
Clean Electricity Limited	780	710	710	-	22.3%
		2,998	3,065	67	96.4%
Cash at bank and in hand			116		3.6%
Total investments			3,181		100.0%

All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2017

There were no additions or disposals during the year.

INVESTMENT MANAGER'S REPORT - GENERALIST SHARE POOL

Introduction
The Generalist Share pool raised a total of £21.7m to 31 March 2017.  The process of investing the funds is under way with £225,000 invested during the year.

Net asset value and results
At 31 March 2017, the NAV of a Generalist share stood at 99.9p, a decrease of 0.1p on the initial price, resulting from the initial "cash drag" of holding uninvested funds.

The return on ordinary activities for the Generalist Share pool for the year was a loss of £11,000, being a revenue loss of £6,000 and a capital loss of £5,000.

Venture Capital investments
Investment activity
Two investments totalling £225,000 were made during the year, as we start to build the portfolio of the Generalist Share pool.

£200,000 was invested in Xupes Limited, an online retailer of pre-owned luxury goods including designer watches, handbags, jewellery and antiques. The management team has built a profitable business with a strong brand selling high-quality products, centred on exceptional customer service.

£25,000 was also invested in The MI Downing UK Micro-Cap Growth Fund, which invests in a concentrated portfolio of 25-30 UK listed companies at the smallest end of the UK equity market.

No valuation adjustments have been made in the period, with all investments remaining at cost.

Outlook
The task of building the Generalist Share portfolio has very recently begun. We will continue to seek investment opportunities as we develop the investment portfolio.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

		Cost	Valuation	Valuation Movement in year	% of portfolio
		£'000	£'000	£'000
Venture Capital investments
Xupes Limited		200	200	-	0.9%
MI Downing UK Micro-Cap Growth Fund**		25	25	-	0.1%
		225	225	-	1.0%
Cash at bank and in hand			21,225		99.0%
Total investments			21,450		100.0%

** non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.

INVESTMENT MANAGER'S REPORT- HEALTHCARE SHARE POOL

Introduction
The Healthcare Share pool raised a total of £4.5m to 31 March 2017.  The process of investing the funds is under way with £25,000 invested during the year.

Net asset value and results
At 31 March 2017, the NAV of a Healthcare share stood at 99.7p, a decrease of 0.3p on the initial price, resulting from the initial "cash drag" of holding uninvested funds.
The return on ordinary activities for the Healthcare Share pool for the year was a loss of £6,000, being a revenue loss of £3,000 and a capital loss of £3,000.

Venture Capital investments
Investment activity
One investment of £25,000 was made in The MI Downing UK Micro-Cap Growth Fund, which invests in a concentrated portfolio of 25-30 UK listed companies at the smallest end of the UK equity market.

No valuation adjustments have been made in the period, with the investment remaining at cost.

Outlook
The task of building the Healthcare Share portfolio has very recently begun. We will continue to seek investment opportunities as we develop the investment portfolio.

Downing LLP

Portfolio of investments

The following investments were held at 31 March 2017:

		Cost	Valuation	Valuation Movement in year	% of portfolio
		£'000	£'000	£'000
Venture Capital investments
MI Downing UK Micro-Cap Growth Fund**		25	25	-	0.6%
		25	25	-	0.6%
Cash at bank and in hand			4,500		99.4%
Total investments			4,525		100.0%

** non-qualifying investment

All Venture Capital investments are incorporated in England and Wales.

Directors' responsibilities
The Directors are responsible for preparing the Report of the Directors, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the Annual Report includes information required by the Listing Rules of the Financial Conduct Authority.

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom accounting standards and applicable law) including Financial Reporting Standard 102, the financial reporting standard applicable in the UK and Republic of Ireland (FRS 102). 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 the profit or loss of the Company for that period.

In preparing these financial statements the Directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
- carry out a robust assessment of the principal risks facing the Company as set out in the Strategic report.
             
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions, to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In addition, each of the Directors considers that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position, performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in the annual reports may differ from legislation in other jurisdictions.

Directors' statement pursuant to the Disclosure Rules and Transparency Rules
Each of the Directors confirms that, to the best of each person's knowledge:

- 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

- the management report included within the Report of the Directors, Strategic report, Chairman's Statement, Investment Manager's Report, and Review of Investments includes a fair review of the development and performance of the business and the position of the company, together with a robust assessment of the principal risks and uncertainties that it faces.
             
By order of the Board

Grant Whitehouse
Secretary of Downing FOUR VCT plc

INCOME STATEMENT
for the year ended 31 March 2017

			Year ended 31 March 2017				Year ended 31 March 2016
			Revenue	Capital	Total		Revenue	Capital	Total
			£'000	£'000	£'000		£'000	£'000	£'000
Income
- continuing			1,731	268	1,999		1,790	-	1,790
- acquisition			-	-	-		1,645	-	1,645
			1,731	268	1,999		3,435	-	3,435
Net gain/(loss) on investments
- continuing			-	1,980	1,980		-	899	899
- acquisition			-	-	-		-	(18)	(18)
			1,731	2,248	3,979		3,435	881	4,316
Investment management fees			(328)	(328)	(656)		(389)	(389)	(778)
Other expenses			(515)	-	(515)		(568)	-	(568)
Return on ordinary activities before tax			888	1,920	2,808		2,478	492	2,970
Tax on total comprehensive income and ordinary activities			(151)	-	(151)		(351)	-	(351)
Return attributable to equity shareholders, being total comprehensive income for the year			737	1,920	2,657		2,127	492	2,619
Basic and diluted return per share:
DSO Ordinary Share			-	-	-		3.2p	2.4p	5.6p
DSO A Share			-	-	-		-	-	-
DSO B Share			0.3p	2.8p	3.1p		3.7p	2.8p	6.5p
DSO C Share			-	-	-		-	-	-
DSO D Share			0.6p	4.9p	5.6p		1.6p	(1.0p)	0.6p
DP67 Share			0.7p	9.0p	9.7p		0.8p	1.5p	2.3p
DP2011 General Share			1.8p	0.4p	2.2p		2.4p	(2.2p)	0.2p
DP2011 Structured Share			1.8p	(1.1p)	0.7p		2.3p	(2.4p)	(0.1p)
DP2011 Low Carbon			1.1p	0.3p	1.4p		2.8p	2.8p	5.6p
Generalist			(1.0p)	(1.0p)	(2.0p)		-	-	-
Healthcare			(1.3p)	(1.2p)	(2.5p)		-	-	-

The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standard 102 ("FRS 102").  The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommenced Practice issued in November 2014 by the Association of Investment Companies ("AIC SORP").

INCOME STATEMENT (analysed by share pool)
for the year ended 31 March 2017

Split as:

DSO B Share pool

	Year ended 31 March 2017				Year ended 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	177	93	270		1,047	-	1,047
Net gain on investments	-	494	494		-	656	656
	177	587	764		1,047	656	1,703
Investment management fees	(27)	(27)	(54)		(97)	(97)	(194)
Other expenses	(55)	-	(55)		(98)	-	(98)
Return on ordinary activities before tax	95	560	655		852	559	1,411
Tax on total comprehensive income and ordinary activities	(36)	-	(36)		(116)	-	(116)
Return attributable to equity shareholders, being total comprehensive income for the year	59	560	619		736	559	1,295

DSO D Share pool

	Year ended 31 March 2017				Year ended 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	174	-	174		255	-	255
Net (loss)/gain on investments	-	431	431		-	(39)	(39)
	174	431	605		255	(39)	216
Investment management fees	(43)	(43)	(86)		(42)	(42)	(84)
Other expenses	(80)	-	(80)		(81)	-	(81)
Return/(loss) on ordinary activities before tax	51	388	439		132	(81)	51
Tax on total comprehensive income and ordinary activities	(2)	-	(2)		(3)	-	(3)
Return/(loss) attributable to equity shareholders, being total comprehensive income for the year	49	388	437		129	(81)	48

INCOME STATEMENT (analysed by share pool)
for the year ended 31 March 2017

DP67 Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	325	175	500		204	-	204
Net gain on investments	-	883	883		-	201	201
	325	1,058	1,383		204	201	405
Investment management fees	(47)	(47)	(94)		(35)	(35)	(70)
Other expenses	(70)	-	(70)		(61)	-	(61)
Return on ordinary activities before tax	208	1,011	1,219		108	166	274
Tax on total comprehensive income and ordinary activities	(129)	-	(129)		(15)	-	(15)
Return attributable to equity shareholders, being total comprehensive income for the year	79	1,011	1,090		93	166	259

DP2011 General Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	521	-	521		659	-	659
Net gain/ (loss) on investments	-	164	164		-	(271)	(271)
	521	164	685		659	(271)	388
Investment management fees	(97)	(97)	(194)		(80)	(80)	(160)
Other expenses	(145)	-	(145)		(119)	-	(119)
Return/(loss) on ordinary activities before tax	279	67	346		460	(351)	109
Tax on total comprehensive income and ordinary activities	1	-	1		(77)	-	(77)
Return/(loss) attributable to equity shareholders, being total comprehensive income for the year	280	67	347		383	(351)	32

DP2011 Structured Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	354	-	354		429	-	429
Net loss on investments	-	(57)	(57)		-	(201)	(201)
	354	(57)	297		429	(201)	228
Investment management fees	(63)	(63)	(126)		(56)	(56)	(112)
Other expenses	(100)	-	(100)		(78)	-	(78)
Return/(loss) on ordinary activities before tax	191	(120)	71		295	(257)	38
Tax on total comprehensive income and ordinary activities	1	-	1		(48)	-	(48)
Return/(loss) attributable to equity shareholders, being total comprehensive income for the year	192	(120)	72		247	(257)	(10)

DP2011 Low Carbon Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	179	-	179		353	-	353
Net gain on investments	-	67	67		-	253	253
	179	67	246		353	253	606
Investment management fees	(43)	(43)	(86)		(40)	(40)	(80)
Other expenses	(65)	-	(65)		(59)	-	(59)
Return on ordinary activities before tax	71	24	95		254	213	467
Tax on total comprehensive income and ordinary activities	12	-	12		(43)	-	(43)
Return attributable to equity shareholders, being total comprehensive income for the year	83	24	107		211	213	424

Generalist Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	-	-	-		-	-	-
Net gain on investments	-	-	-		-	-	-
	-	-	-		-	-	-
Investment management fees	(5)	(5)	(10)		-	-	-
Other expenses	(1)	-	(1)		-	-	-
Return on ordinary activities before tax	(6)	(5)	(11)		-	-	-
Tax on total comprehensive income and ordinary activities	-	-	-		-	-	-
Return attributable to equity shareholders, being total comprehensive income for the year	(6)	(5)	(11)		-	-	-

Healthcare Share pool

	Year ended 31 March 2017				Period from 21 July 2015 to 31 March 2016
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income	-	-	-		-	-	-
Net gain on investments	-	-	-		-	-	-
	-	-	-		-	-	-
Investment management fees	(3)	(3)	(6)		-	-	-
Other expenses	-	-	-		-	-	-
Return on ordinary activities before tax	(3)	(3)	(6)		-	-	-
Tax on total comprehensive income and ordinary activities	-	-	-		-	-	-
Return attributable to equity shareholders, being total comprehensive income for the year	(3)	(3)	(6)		-	-	-

BALANCE SHEET
as at 31 March 2017

		2017		2016
		£'000		£'000
Fixed assets
Investments		27,095		35,351
Current assets
Debtors		1,709		1,077
Cash at bank and in hand		31,441		9,533
		33,150		10,610
Creditors: amounts falling due within one year		(833)		(879)
Net current assets		32,317		9,731
Net assets		59,412		45,082
8BCapital and reserves
Called up Share capital		144		161
Capital redemption reserve		31		5
Special reserve		30,620		44,441
Share premium account		10,074		-
Funds held in respect of shares not yet allotted		16,137		-
Revaluation reserve		(1,980)		(2,645)
Capital reserve - realised		3,331		1,949
Revenue reserve		1,055		1,171
Total equity shareholders' funds		59,412		45,082
Basic and diluted net asset value per Share:
DSO B Share		20.7p		17.6p
DSO C Share		0.1p		0.1p
DSO D Share		76.1p		75.6p
DP67 Share		66.1p		60.4p
DP2011 General Ordinary Share		15.0p		75.1p
DP2011 General A Share		31.2p		5.9p
DP2011 Structured Ordinary Share		4.8p		77.1p
DP2011 Structured A Share		31.9p		6.1p
DP2011 Low Carbon		43.0p		91.6p
Generalist		99.9p		N/A
Healthcare		99.7p		N/A

BALANCE SHEET(ANALYSED BY SHARE POOL)
as at 31 March 2017

DSO B Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		1,752		3,034
Current assets
Debtors		74		20
Cash at bank and in hand		2,475		634
		2,549		654
Creditors: amounts falling due within one year		(151)		(160)
Net current assets		2,398		494
Net assets		4,150		3,528
Capital and reserves
Called up share capital - B Shares		20		20
Called up share capital - C Shares		30		30
Capital redemption reserve		31		-
Special reserve		3,186		3,662
Share premium reserve		-		-
Revaluation reserve		(1,108)		(1,485)
Capital reserve - realised		1,705		1,231
Revenue reserve		286		70
Total equity shareholders' funds		4,150		3,528

DSO D Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		5,365		5,689
Current assets
Debtors		254		162
Cash at bank and in hand		435		159
		689		321
Creditors: amounts falling due within one year		(62)		(65)
Net current assets		627		256
Net assets		5,992		5,945
Capital and reserves
Called up share capital		8		8
Capital redemption reserve		-		-
Special reserve		6,598		6,802
Share premium reserve		-		-
Revaluation reserve		(9)		(338)
Capital reserve - realised		(510)		(538)
Revenue reserve		(95)		11
Total equity shareholders' funds		5,992		5,945

DP67 Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		5,047		5,828
Current assets
Debtors		392		198
Cash at bank and in hand		2,396		911
		2,788		1,109
Creditors: amounts falling due within one year		(404)		(100)
Net current assets		2,384		1,009
Net assets		7,431		6,837
Capital and reserves
Called up share capital		11		11
Capital redemption reserve		-		-
Special reserve		5,836		5,897
Share premium reserve		-		-
Revaluation reserve		396		482
Capital reserve - realised		1,070		354
Revenue reserve		118		93
Total equity shareholders' funds		7,431		6,837

DP2011 General Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		7,385		10,446
Current assets
Debtors		585		390
Cash at bank and in hand		266		2,186
		851		2,576
Creditors: amounts falling due within one year		(143)		(196)
Net current assets		708		2,380
Net assets		8,093		12,826
Capital and reserves
Called up share capital - Ordinary Shares		16		16
Called up share capital - A Shares		18		18
Capital redemption reserve		-		-
Special reserve		7,805		12,681
Share premium reserve		-		-
Revaluation reserve		(641)		(657)
Capital reserve - realised		466		385
Revenue reserve		429		383
Total equity shareholders' funds		8,093		12,826

DP2011 Structured Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		4,233		7,356
Current assets
Debtors		365		230
Cash at bank and in hand		28		1,556
		393		1,786
Creditors: amounts falling due within one year		(94)		(141)
Net current assets		299		1,645
Net assets		4,532		9,001
Capital and reserves
Called up share capital - Ordinary Shares		11		11
Called up share capital - A Shares		13		13
Capital redemption reserve		-		-
Special reserve		4,565		8,929
Share premium reserve		-		-
Revaluation reserve		(682)		(463)
Capital reserve - realised		346		264
Revenue reserve		279		247
Total equity shareholders' funds		4,532		9,001

DP2011 Low Carbon Shares

		2017		2016
		£'000		£'000
Fixed assets
Investments		3,065		2,998
Current assets
Debtors		140		46
Cash at bank and in hand		116		4,011
		256		4,057
Creditors: amounts falling due within one year		(59)		(113)
Net current assets		197		3,944
Net assets		3,262		6,942
Capital and reserves
Called up share capital		8		8
Capital redemption reserve		-		-
Special reserve		2,639		6,470
Share premium reserve		-		-
Revaluation reserve		67		-
Capital reserve - realised		253		253
Revenue reserve		295		211
Total equity shareholders' funds		3,262		6,942

Generalist

		2017		2016
		£'000		£'000
Fixed assets
Investments		225		-
Current assets				-
Debtors		-		-
Cash at bank and in hand		21,225		-
		21,225		-
Creditors: amounts falling due within one year		(10)		-
Net current assets		21,215		-
Net assets		21,440		-
Capital and reserves
Called up share capital		7		-
Special reserve		(5)		-
Share premium reserve		7,633		-
Funds held in respect of shares not yet allotted		14,012		-
Revenue reserve		(207)		-
Total equity shareholders' funds		21,440		-

Healthcare

		2017		2016
		£'000		£'000
Fixed assets
Investments		25		-
Current assets				-
Debtors		-		-
Cash at bank and in hand		4,500		-
		4,500		-
Creditors: amounts falling due within one year		(7)		-
Net current assets		4,493		-
Net assets		4,518		-
Capital and reserves
Called up share capital		2		-
Special reserve		(3)		-
Share premium reserve		2,441		-
Funds held in respect of shares not yet allotted		2,125		-
Revenue reserve		(47)		-
Total equity shareholders' funds		4,518		-

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2017

	Share capital	Capital Redemption reserve	Special reserve	Share premium account	Funds held in respect of  shares not yet allotted	Revaluation Reserve	Capital reserve -realised	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 March 2015	84	5	20,895	2,794	-	(1,544)	2,500	1,181	25,915
Total comprehensive income	-	-	-	-	-	(1,194)	1,686	2,127	2,619
Issue of share capital on acquisition	77	-	-	35,999	-	-	-	-	36,076
Share premium cancellation	-	-	38,692	(38,692)	-	-	-	-	-
Transfer between reserves*	-	-	(15,056)	-	-	93	15,531	(568)	-
Transactions with owners
Dividend paid	-	-	-	-	-	-	(17,768)	(1,569)	(19,337)
Purchase of own shares	-	-	(8)	(30)	-	-	-	-	(38)
Share issue costs	-	-	(82)	(71)	-	-	-	-	(153)
At 31 March 2016	161	5	44,441	-	-	(2,645)	1,949	1,171	45,082
Total comprehensive income	-	-	-	-	-	599	1,321	737	2,657
Transfer between reserves*	-	-	(13,772)	-	-	66	13,706	-	-
Unallotted shares	-	-	-	-	16,137	-	-	-	16,137
Transactions with owners
Dividend paid	-	-	-	-	-	-	(13,645)	(608)	(14,253)
Cancellation of shares	(26)	26	-	-	-	-	-	-	-
Purchase of own shares	-	-	(49)	-	-	-	-	-	(49)
Issue of shares	9	-	-	10,074	-	-	-	-	10,083
Share issue costs	-	-	-	-	-	-	-	(245)	(245)
At 31 March 2017	144	31	30,620	10,074	16,137	(1,980)	3,331	1,055	59,412

* A transfer of £66,000 (2016: £93,000) representing previously recognised realised gains on disposal of investments during the year ended 31 March 2017 has been made from the Revaluation Reserve to the Capital Reserve realised.  A transfer of £13.7 million (2016: £15.5 million)  representing realised gains on disposal of investments, less capital expenses and capital dividends in the year was made from Capital Reserve - realised to Special reserve.  In 2016 a transfer of £568,000 was made from Capital Reserve - realised to Revenue reserve to reconcile the Ordinary Share pool reserves.

STATEMENT OF CASH FLOWS
for the year ended 31 March 2017

			Year ended 31 March 2017
			DSO B Share pool	DSO D Share pool	DP67 Share pool	DP2011 Gen Share pool	DP2011 Struc Share pool	DP2011 LC Share pool	Generalist	Healthcare	Total
			£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cash flows from operating activities
Return on ordinary activities before taxation			655	439	1,219	346	71	95	(11)	(6)	2,808
Losses/(gains) on investments			(494)	(431)	(883)	(164)	57	(67)	-	-	(1,980)
Decrease/(increase) in debtors			13	(91)	174	(193)	(136)	(92)	-	-	(325)
(Decrease)/increase in creditors			(75)	13	21	(18)	(21)	(29)	11	6	(92)
Net cash inflow from operating activities			99	(70)	531	(29)	(29)	(93)	-	-	406
Corporation tax paid			(110)	(15)	(211)	(32)	(26)	(14)	-	-	(408)
Net cash generated from operating activities			(11)	(85)	320	(61)	(55)	(107)	-	-	(2)
Cash flow from investing activities
Purchase of  investments			-	(145)	(700)	-	-	-	(225)	(25)	(1,095)
Proceeds from disposal of investments			1,776	755	1,664	3,226	3,066	-	(225)	(25)	10,237
Net cash inflow/(outflow) from investing activities			1,776	755	1,664	3,226	3,066	-	(225)	(25)	10,237
Net cash flows before financing			1,765	670	1,984	3,165	3,011	(107)	(225)	(25)	10,235
Cash flows from financing activities
Repurchase of shares			-	-	(49)	-	-	-	-	-	(49)
Issue of share capital			-	-	-	-	-	-	7,438	2,400	9,838
Unallotted shares			-	-	-	-	-	-	14,012	2,125	16,137
Equity dividends paid			-	(394)	(450)	(5,085)	(4,539)	(3,788)	-	-	(14,253)
Net cash (outflow)/ inflow from financing			-	(394)	(499)	(5,085)	(4,539)	(3,788)	21,450	4,525	11,673
Net movement in cash
Cash and cash equivalents at start of year			710	159	911	2,186	1,556	4,011	-	-	9,533
Cash and cash equivalents at end of year			2,475	435	2,396	266	28	116	21,225	4,500	31,441
Cash and cash equivalents comprise
Cash at bank and in hand			2,475	435	2,396	266	28	116	21,225	4,500	31,441
Total cash and cash equivalents			2,475	435	2,396	266	28	116	21,225	4,500	31,441

STATEMENT OF CASH FLOWS
for the year ended 31 March 2016

			Year ended 31 March 2016
DSO Ord Share pool				DSO B Share pool	DSO D Share pool	DP67 Share pool	DP2011 Gen Share pool	DP2011 Struc Share pool	DP2011 LC Share pool	Total
			£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cash flows from operating activities
Return on ordinary activities before taxation			620	1,411	51	274	109	38	467	2,970
(Gains)/losses on investments			(282)	(656)	39	(201)	271	201	(253)	(881)
Decrease/(increase) in debtors			35	260	(77)	(94)	(2)	(16)	(30)	136
Increase/(decrease) in creditors			-	(57)	(53)	10	31	29	55	(95)
Net cash inflow/(outflow) from operating activities			373	958	(40)	(11)	409	252	189	2,130
Corporation tax paid			(88)	(225)	(27)	(153)	(249)	(126)	(139)	(1,007)
Net cash generated /(utlilised) from operating activities			285	733	(67)	(164)	160	126	50	1,123
Cash flows from investing activities
Purchases of investments			(383)	(806)	(552)	(2,625)	(38)	-	-	(4,404)
Proceeds from disposal of investments			6,233	12,091	1,231	1,587	2,401	1,628	4,133	29,304
Cash acquired in merger			-	-	-	2,362	101	81	37	2,581
Net cash inflow from investing activities			5,850	11,285	679	1,324	2,464	1,709	4,170	27,481
Net cash inflow before financing			6,135	12,018	612	1,160	2,624	1,835	4,220	28,604
Cash flows from financing
Equity dividends paid			(6,124)	(11,746)	(393)	(226)	(392)	(267)	(189)	(19,337)
Share issue costs			-	(30)	(52)	(23)	(16)	(12)	(20)	(153)
Purchase of own shares			-	-	(8)	-	(30)	-	-	(38)
Net cash outflow from financing			(6,124)	(11,776)	(453)	(249)	(438)	(279)	(209)	(19,528)
Net increase in cash			11	242	159	911	2,186	1,556	4,011	9,076
Cash and cash equivalents at start of year			65	392	-	-	-	-	-	457
Cash and cash equivalents at end of year			76	634	159	911	2,186	1,556	4,011	9,533
Cash and cash equivalents comprise
Cash at bank and in hand			76	634	159	911	2,186	1,556	4,011	9,533
Total cash and cash equivalents			76	634	159	911	2,186	1,556	4,011	9,533

NOTES TO THE ACCOUNTS
for the year ended 31 March 2017

 1. Accounting policies
Basis of accounting
The Company has prepared its financial statements in accordance with the Financial Reporting Standard 102 ("FRS 102") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" revised November 2014 ("SORP").

The Company implements new Financial Reporting Standards ("FRS") issued by the Financial Reporting Council when required.

The financial statements are presented in pounds sterling and rounded to thousands.  The Company's functional and presentational currency is pounds sterling.

Presentation of Income Statement
In order to better reflect the activities of a Venture Capital Trust, and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue return is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Part 6 of the Income Tax Act 2007.

Judgements in applying accounting policies and key sources of estimation uncertainty
Investments
All investments are designated as "fair value through profit or loss" assets due to investments being managed and performance evaluated on a fair value basis, in accordance with Section 9.9B(a) of FRS 102. A financial asset is designated within this category if it is both acquired and managed on a fair value basis, with a view to selling after a period of time, in accordance with the Company's documented investment policy.
It is possible to determine the fair values within a reasonable range of estimates.  The fair value of an investment upon acquisition is deemed to be cost. Thereafter investments are measured at fair value in accordance with FRS 102 sections 11 and 12, together with the International Private Equity and Venture Capital Valuation Guidelines ("IPEV").

Structured Product investments are measured using bid prices.

For unquoted investments, fair value is established by using the IPEV guidelines. The valuation methodologies for unquoted entities used by the IPEV to ascertain the fair value of an investment are as follows:

- Price of recent investment;
- Multiples;
- Net assets;
- Discounted cash flows or earnings (of underlying business);
- Discounted cash flows (from the investment); and
- Industry valuation benchmarks.

The methodology applied takes account of the nature, facts and circumstances of the individual investment and uses reasonable data, market inputs, assumptions and estimates in order to ascertain fair value. The valuation of investments is detailed in Note 9 of the full financial statements.

Gains and losses arising from changes in fair value are included in the Income Statement for the year as a capital item and transaction costs on acquisition or disposal of the investment are expensed. Where an investee company has gone into receivership or liquidation, or administration (where there is little likelihood of recovery), the loss on the investment, although not physically disposed of, is treated as being realised.

It is not the Company's policy to exercise significant influence or joint control over investee companies. Therefore, the results of these companies are not incorporated into the Income Statement except to the extent of any income accrued. This is in accordance with FRS 102 sections 14 and 15 and the SORP, that do not require portfolio investments to be accounted for using the equity method of accounting.

Income
Dividend income from investments is recognised when the Shareholders' rights to receive payment has been established, normally the ex-dividend date.

Interest income is accrued on a time apportionment basis, by reference to the principal sum outstanding and at the effective rate applicable, and only where there is reasonable certainty of collection in the foreseeable future.

Distributions from investments in limited liability partnerships ("LLPs") are recognised as they are paid to the Company. Where such items are considered capital in nature they are recognised as capital profits.

Expenses
All expenses are accounted for on an accruals basis, and are stated inclusive of any VAT charged. In respect of the analysis between revenue and capital items presented within the Income Statement, all expenses have been presented as revenue items except as follows:

- Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment;
- Expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated. The Company has adopted a policy of charging 50% of the investment management fees to the revenue account and 50% to the capital account to reflect the Board's estimated split of investment returns which will be achieved by the company over the long term.

Expenses and liabilities not specific to a share class are generally allocated pro rata to the net asset values of each share class.

Taxation
The tax effects on different items in the Income Statement are allocated between capital and revenue on the same basis as the particular item to which they relate, using the Company's effective rate of tax for the accounting period.

Due to the Company's status as a Venture Capital Trust, and the continued intention to meet the conditions required to comply with Part 6 of the Income Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments which arises.

Deferred taxation, which is not discounted, is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts.

Other debtors and other creditors
Other debtors (including accrued income) and other creditors are included within the accounts at amortised cost.

Issue costs
Issue costs in relation to the shares issued for each share class have been deducted from the share premium account, special reserve or revenue reserve, as applicable, for the relevant share class.

Funds held in respect of shares not yet allotted
Cash received in respect of applications for new shares that have not yet been allotted is shown as "Funds held in respect of shares not yet allotted" and recorded on the Balance Sheet.

Acquisitions
Acquisitions made during the year are accounted for using the acquisition method.  The purchase consideration is measured at the fair value of equity issued compared to the fair value of the assets and liabilities acquired.

Operating segments
The Company has one operating segment.

2. Basic and diluted return per share

					Weighted average number of shares in issue	Revenue Return	Capital gain/(loss)	Total comprehensive income
Return per share is calculated on the following:						£'000	£'000	£'000
Year ended 31 March 2017				DSO B Shares	19,911,070	59	560	619
				DSO C Shares	29,926,070	-	-	-
				DSO D Shares	7,867,247	49	388	437
				DP67 Shares	11,239,785	79	1,011	1,090
	DP2011 General Shares				15,644,066	280	67	347
	DP2011 General A Shares				18,418,614	-	-	-
	DP2011 Structured  Shares				10,678,725	192	(120)	72
	DP2011 Structured A Shares				12,572,817	-	-	-
	DP2011 Low Carbon Shares				7,575,419	83	24	107
	Generalist Shares				537,081	(6)	(5)	(11)
	Healthcare Shares				234,044	(3)	(3)	(6)
Year ended 31 March 2016				DSO Ordinary Shares	10,228,157	328	243	571
				DSO A Shares	15,506,488	-	-	-
				DSO B Shares	19,911,070	736	559	1,295
				DSO C Shares	29,926,070	-	-	-
				DSO D Shares	7,814,325	129	(81)	48
				DP67 Shares	11,320,258	93	166	259
			DP2011 General Shares		15,663,577	383	(351)	32
		DP2011 General A Shares			18,438,125	-	-	-
		DP2011 Structured  Shares			10,678,725	247	(257)	(10)
		DP2011 Structured A Shares			12,572,817	-	-	-
		DP2011 Low Carbon Shares			7,575,419	211	213	424

As the Company has not issued any convertible securities or share options, there is no dilutive effect on return per DSO B Share, DSO C Share, DSO D Share, DP67 Share, DP2011 General Share, DP2011 General A Share, DP2011 Structured Ordinary Share, DP2011 Structured A Share, DP2011 Low Carbon Share, Generalist Shares or Healthcare Shares.  The return per share disclosed therefore represents both the basic and diluted return per Share for all classes of Share.

3. Basic and diluted net asset value per share

			2017				2016
			Net asset value				Net asset value
	Shares in issue		Pence per share		£'000		Pence per share		£'000
	2017	2016
DSO Ordinary Shares	-	10,288,157	-		-		-		3
DSO A Shares	-	15,506,488	-		-		-		-
DSO B Shares	19,911,070	19,911,070	20.7		4,119		17.6		3,508
DSO C Shares	29,926,070	29,926,070	0.1		31		0.1		20
DSO D Shares	7,867,247	7,867,247	76.1		5,992		75.6		5,945
DP67 Shares	11,239,785	11,320,258	66.1		7,431		60.4		6,837
DP2011 General Ordinary Shares	15,644,066	15,644,066	15.0		2,347		76.1		11,900
DP2011 General A Shares	18,418,614	18,418,614	31.2		5,746		5.9		926
DP2011 Structured Ordinary Shares	10,678,725	10,678,725	4.8		515		78.2		8,349
DP2011 Structured A Shares	12,572,817	12,572,817	31.9		4,017		6.1		652
DP2011 Low Carbon Shares	7,575,419	7,575,419	43.0		3,262		91.6		6,942
Generalist Shares	7,438,093	-	99.9		7,427				-
Healthcare Shares	2,400,195	-	99.7		2,394				-
Funds held in respect of shares not yet allotted					16,137				-
Net assets per Balance Sheet					59,412				45,082

The Directors allocate the assets and liabilities of the Company between the DSO B Shares, DSO C Shares, DSO D Shares, DP67 Shares, DP2011 General Ordinary Shares, DP2011 General A Shares, DP2011 Structured Shares, DP2011 Structured A Shares, DP2011 Low Carbon Shares, Generalist Shares and Healthcare Shares such that each share class has sufficient net assets to represent its dividend and return of capital rights as described in note 12 of the full financial statements..
As the Company has not issued any convertible shares or share options, there is no dilutive net asset value per DSO B Share, per DSO C Share, per DSO D Share, per DP67 Share, per DP2011 General Ordinary Share, per DP2011 General A Share, per DP2011 Structured Ordinary Share, per DP2011 Structured A Share, per DP2011 Low Carbon Share, per Generalist Share or per Healthcare Share. The net asset value per share disclosed therefore represents both the basic and diluted net asset value per DSO B Share, per DSO C Share, per DSO D Share, per DP67 Share, per DP2011 General Ordinary Share, per DP2011 General A Share, per DP2011 Structured Ordinary Share, per DP2011 Structured A Share per DP2011 Low Carbon Share, per Generalist Share, and per Healthcare Share.

4. Principal risks
The Company's investment activities expose the Company to a number of risks associated with financial instruments and the sectors in which the Company invests. The principal financial risks arising from the Company's operations are:

- Market risks;
- Credit risk; and
- Liquidity risk.

The Board regularly reviews these risks and the policies in place for managing them. There have been no significant changes to the nature of the risks that the Company is exposed to over the year and there have also been no significant changes to the policies for managing those risks during the year.

The risk management policies used by the Company in respect of the principal financial risks and a review of the financial instruments held at the year end are provided below:

Market Risks
As a VCT, the Company is exposed to investment risks in the form of potential losses and gains that may arise on the investments it holds in accordance with its investment policy. The management of these market risks is a fundamental part of investment activities undertaken by the Investment Manager and overseen by the Board. The Manager monitors investments through regular contact with management of investee companies, regular review of management accounts and other financial information and attendance at investee company board meetings. This enables the Manager to manage the investment risk in respect of individual investments. Investment risk is also mitigated by holding a diversified portfolio spread across various business sectors and asset classes.

The key market risks to which the Company is exposed are:
- Investment price risk; and
- Interest rate risk.

Investment price risk
Investment price risk arises from uncertainty about the future prices and valuations of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through market price movements in respect of Structured Products, and also changes in the fair value of unquoted investments that it holds.

Interest rate risk
The Company accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The Company receives interest on its cash deposits at a rate agreed with its bankers. Investments in loan stock attract interest predominately at fixed rates.

Credit risk
Credit risk is the risk that a counterparty to a financial instrument is unable to discharge a commitment to the Company made under that instrument. The Company is exposed to credit risk through its holdings of loan stock in investee companies, cash deposits, debtors and Structured Products. Credit risk relating to loan stock investee companies is considered to be part of market risk.

Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties in meeting obligations associated with its financial liabilities. Liquidity risk may also arise from either the inability to sell financial instruments when required at their fair values or from the inability to generate cash inflows as required.

ANNOUNCEMENT BASED ON AUDITED ACCOUNTS
The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 31 March 2017, but has been extracted from the statutory financial statements for the year ended 31 March 2017 which were approved by the Board of Directors on 31 July 2017 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

The statutory accounts for the year ended 31 March 2016 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Downing FOUR VCT plc via Globenewswire