Downing ONE VCT plc : Annual Financial Report

DOWNING ONE VCT PLC
Report & Accounts for the year ended 31 March 2016

FINANCIAL SUMMARY

	31 Mar		31 Mar
	2016		2015
	pence		pence
Net asset value per share ("NAV")	94.1		96.9
Cumulative dividends paid since 12 November 2013	12.0		6.0
Total return (net asset value plus cumulative dividends paid per share)	106.1		102.9
Dividends in respect of financial year
Interim dividend per share	3.0		2.0
Proposed final dividend per share	3.0		3.0
	6.0		5.0

CHAIRMAN'S STATEMENT
I am pleased to present the Company's Annual Report for the year ended 31 March 2016. The year has again seen a significant level of investment activity and the Company has achieved further growth in total return.

Net asset value and results
As at 31 March 2016, the net asset value per share ("NAV") stood at 94.1p, an increase of 3.2p (3.1%) after adding back dividends of 6.0p per share which were paid during the year.

The Income Statement shows a return attributable to equity shareholders for the year of £2.6 million comprising a revenue return of £0.9 million and a capital return of £1.7 million.

Dividends
The Company has a policy of seeking to pay annual dividends of at least 4% of net assets per annum.

In view of the fact that the Company has achieved a number of significant realisations, the Board is proposing a final dividend of 3.0p per share to be paid on 12 August 2016, subject to Shareholder approval at the forthcoming AGM, to Shareholders on the register at 22 July 2016. This will bring total dividends in respect of the year ended 31 March 2016 to 6.0p per share, which represents a yield based on current NAV of 6.3%.

Shareholders are reminded that the Company operates a Dividend Reinvestment Scheme for those investors that wish to reinvest their dividends and obtain further income tax relief on the reinvested dividend. A Dividend Reinvestment Form is available on Downing's website.

Investment activity and performance
At the year end, the Company held a portfolio of 85 investments.  Of these, 30 are either quoted on AIM or the ISDX Growth Market and have a value of £23.7 million (36.4% of the portfolio). The 55 unquoted investments have a value of £41.7 million and represent 63.6% of the portfolio.

There was a significant level of portfolio activity during the year, with approximately one third of the portfolio realised and £21 million being invested. In the quoted portfolio, full or partial disposals of eight investments were achieved, giving rise to total proceeds of £9.3 million and realised gains of £664,000. The most significant realisation was that of Accumuli plc which was acquired in a cash and shares transaction by NCC Group plc. The shares in NCC were then subsequently sold. The combined transactions netted total proceeds of £7.5 million which represented a realised gain in the year of £584,000.
Five new quoted investments and eight follow-on investments were also made at a total cost of £6.5 million.

In the unquoted portfolio, there were 36 realisations, producing proceeds of £18.2 million and realised gains of £2.7 million. Seven follow-on investments were made at a total cost of £8.0 million and nine new investments at £6.9 million.  

In respect of the existing portfolio, the quoted portfolio showed net gains of £333,000 over the year. At the year end, the Board reviewed the valuations of the unquoted investments and made a number of adjustments. Overall the unquoted portfolio showed total unrealised losses of £1.4 million for the year.  Net unrealised losses for the full portfolio were therefore £1.1 million.

Further details on the investment activity are included in the Investment Adviser's Report.

Fundraising
In December 2015, the Company launched an offer for subscription seeking to raise new funds. The offer has raised £16.5 million to date and is now scheduled to close on 31 August 2016. The new funds provide the Company with additional liquid resources to pursue new investment opportunities.

Share buybacks
The Company operates a policy of buying in its own shares that become available in the market at a 5% discount to NAV (subject to liquidity and any regulatory restrictions).

During the year, the Company purchased 2.5 million shares at an average price of 91.1p per share.

The Company retains Panmure Gordon as its corporate broker to assist in operating the share buyback process and ensuring that the quoted spread on the Company's shares remains at a reasonable level.

New VCT Rules
As Shareholders are probably aware there have been some significant changes to the VCT rules over the last year. The new rules introduce greater restrictions on investments that VCTs can make, in particular in respect of the age of businesses into which the Company can invest, and have been brought in to bring the VCT scheme into line with the European Union's Risk Capital Guidelines.

The changes will clearly reduce the scope of investments that the Company can make in the future and potentially over time may increase the risk profile of the portfolio.  New investments may have to be of a slightly higher risk profile than previously, whilst new AIM-quoted investments may be very limited and there will be some restrictions on follow on investments in existing portfolio companies. However, due to the current fully invested nature of the Company the Board considers that the effect on the Company as a whole is not likely to be substantial in the medium term.

Revision to Investment Policy
As a result of the changes to the VCT rules, the Board has reviewed the Company's Investment Policy and is proposing some minor changes to ensure that the Policy is consistent with the new rules.

The main proposed changes are that new qualifying investments will mainly be in businesses that are less than seven years old, funds will not be used by investee companies to make acquisitions and new non-qualifying investments will generally be limited to investments in entities such as investment trusts, OEICs or companies listed on the London Stock Exchange.

The Board believes these changes are necessary to ensure that the Company's funds continue to be invested in a manner that maintains the Company's VCT status.

Annual General Meeting
The Company's next Annual General Meeting ("AGM") will be held at Downing LLP, Fifth Floor, Ergon House, Horseferry Road, London, SW1P 2AL at 10:30 a.m. on 9 August 2016.

Four items of special business are proposed at the AGM:
      *two in respect of the allotment of shares;
      *one in respect of the authority to buy back shares as noted above; and
      *one in respect of the revision to the Investment Policy as described above.

The resolutions in respect of the allotment of shares would allow the Board to consider launching a new offer for subscription for up to approximately £30 million without the Company having to incur the costs of an additional shareholder circular. The Board will, of course, assess any such plan in detail before deciding to proceed and will consider a number of factors including the deal flow which the Manager can provide.

Outlook
The result of the EU referendum has clearly triggered a period of uncertainty and volatility in financial markets. The Company's AIM-quoted investments have experienced some falls in the immediate aftermath of the decision.  The unaudited NAV at 30 June 2016 stood at 92.0p per share.

The exit from the EU will certainly bring about changes to the UK economy and in the short term we could see some falls in investment valuations and reduced realisation opportunities, however in these circumstances we may also see a stronger flow of attractively priced new investment opportunities.

The new VCT rules will require the Company to refine its investment focus going forward.  Future new investment activity is likely to include younger businesses with a higher risk profile than typical investments in the past. The overall impact of the new VCT rules on the risk profile of the portfolio is however expected to be limited until such time as a significant proportion of the portfolio has been recycled into investments made under the new rules.

The Company continues to hold a large and relatively diverse portfolio which is reasonably stable and has prospects for further growth. The majority of our portfolio companies do not have any significant levels of trading with other EU countries and a number of the businesses in the leisure sector may benefit from a weaker pound.  Overall, we believe that the existing portfolio is reasonably well-positioned.

The Company is expecting to be an active investor over the next 12 months as it seeks to employ the funds raised under the current fundraising. We expect the Investment Adviser will continue to source investments in unquoted businesses where there is asset backing or a predictable revenue stream but we also expect to see a number of smaller investments in younger companies with growth prospects.

I look forward to meeting Shareholders at the AGM and in reporting developments in my statement with the Half Year Report to 30 September 2016.

Chris Kay
Chairman

INVESTMENT ADVISER'S REPORT

Introduction
The following is a review of the performance of the combined investment portfolio.

At 31 March 2016, the Company held a portfolio of investments in 85 quoted and unquoted companies, valued in total at £65.4 million.

Net asset value and results
The NAV per Share at 31 March 2016 stood at 94.1p, compared to the NAV at 31 March 2015 of 96.9p. Total Return (NAV plus cumulative dividends paid since the merger) is 106.1p.

The return on ordinary activities after taxation for the year was £2.6 million, comprising a revenue return of £0.9 million and a capital profit of £1.7 million.

Unquoted Venture Capital investments
Investment activity
At 31 March 2016, the unquoted portfolio was valued at £41.7 million, comprising 55 investments, spread across a number of sectors.

There were seven new investments totalling £6.9 million and seven follow-on investments totalling £8.0 million during the period.  The new investments were as follows:

Non-qualifying loans were made to Harrogate Street Limited, a hotel developer (£1.4m) and Nomansland Biogas Limited, an anaerobic digestion plant in Devon (£1.3m). A non-qualifying secured loan investment of £820,000 was also made to UK Solar Lower Newton LLP to fund the final stage of development of an 11.8MWp ground mounted solar plant in Staffordshire. The loan was fully repaid in the period. These loans generate interest income for the fund producing better returns than holding cash. Following the recent changes in VCT rules, these type of loans are no longer permissible.

£1.0 million was invested in each of Pilgrim Trading Limited and Cedarville Trading Limited. These two companies will begin trading shortly and we will provide an update in due course.

An investment of £912,000 was made in Hobblers Heath Limited. The company is seeking planning consent to build a high ropes adventure playground in West London. Disappointingly, planning consent for a proposed venue in Hounslow was rejected and management are considering further options.

Two smaller investments were made - £228,000 in FCT No.1 Limited and £88,000 in Pearce and Saunders DevCo Limited.

Follow on investments were as follows:

During the period, £1.5 million was invested in Quadrate Catering Limited which has successfully developed the top floor of a canal-side mixed-use building in Birmingham which operates as a Marco Pierre White steakhouse Bar and Grill. This was part of a refinancing in which the Company also received proceeds of £852,000.

£1.5 million was invested in Quadrate Spa Limited which owns and operates a health club business in the Cube development in Birmingham. The investment will enable the business to continue its next stage of development. This was part of a refinancing in which the Company also received proceeds of £1.1 million.

An investment of £2.4 million in loan stock in Vulcan Renewables Limited was invested in the period. The company owns a 2MW maize fed biogas plant near Doncaster.

An investment was made in Pearce and Saunders Limited, a small pub group with a portfolio of three pubs in the London area. £1.1 million was invested, increasing the Company's investment to £1.3m.

A further £1.4 million was invested in Kidspace Adventure Holdings Limited, the owner and operator of three well established and profitable children's play centres. 

Three smaller follow on investments were also made in to Redmed Limited (£203,000); Curo Compensation Limited (£163,000); and London City Shopping Limited (£30,000).

Following the year end, the Company has also established several businesses with management teams to develop activities in renewable energy, leisure, hospitality and infrastructure. Working with these management teams, with funds specifically allocated, to originate growth opportunities is viewed as the best way of attracting good quality deal flow.

The Company also invested £5 million in Doneloans Limited as a non-qualifying activity.  This company has to date invested in two loans in Asgard Renewables Limited and Egmere Energy Limited, both are operating anaerobic digestion plants.

Unquoted Venture Capital investments
Realisations of investments in the year generated proceeds of £18.2 million and total profits over holding value of £2.7 million from 19 full exits and 13 partial exits. A summary of the most significant realisations is shown below:

A portfolio of solar investments was sold during the period to a large solar developer. This sale generated total proceeds to the VCT of £3.3m: Residential PV Limited (£1.5m); Domestic Solar Limited (£1.2m); and Angel Solar Limited (£615,000), in aggregate realising £730,000 over book cost.

First Care Limited, an absence management service for businesses was partially exited and generated proceeds of £1.4 million and a significant profit of £811,000 over its holding value (£536,000 over cost). The VCT now owns £228,000 of shares as a non-qualifying holding in the company that bought First Care Limited, FCT No.1 Limited.

The £2 million non-qualifying loan to UK Solar (Hartwell)  LLP was repaid in full in the period as was the £820,000 loan to UK Solar (Lower Newton) LLP.

Antelope Pub Company Limited owns and operates a pub of the same name in Tooting, South London. The company was sold in the year and generated proceeds of £1.0 milllion, a profit over its holding value of £125,000 and £170,000 over its cost.

Alpha Schools Holdings Limited, the independent primary school operator was sold in the period and generated proceeds of £747,000, a profit over its holding value of £110,000 and £162,000 over its cost.

The 3D Pub Co Limited, the owner and operator of two Surrey pubs was sold in the period for £867,000.

Following the sale of the Craft nightclub in Lincoln, proceeds of £761,000 were generated for Redmed Limited. A small amount of additional proceeds are expected in the coming year to fully exit this investment.

In June 2015 Liverpool Nurseries (Holdings) Limited was sold to Kids Planet, a regional nursery operator, generating proceeds of £507,000 and a profit of £29,000.

Future Biogas (Reepham Road) Limited and Future Biogas (SF) Limited, both anaerobic digestion plants in Norfolk, had the majority of their loans repaid at cost in the period for combined proceeds of £1.0m.

Portfolio valuation
There have been a number of valuation movements in the year with an overall value reduction of £1.4m. Whilst disappointing in isolation, this is more than offset by the realised profits on unquoted disposals of £2.7m. The most significant value movements are shown below.

Cadbury House Holdings Limited owns and operates a health club, restaurant and conference centre near Bristol. The company is performing well and set to achieve its budget for 2016. As such the valuation has been increased by £549,000.

Fenkle Street LLP, is a property development company that purchased a building in Newcastle and converted it in to a hotel. The hotel is trading well and the valuation has been uplifted by £277,000 to reflect this.

The valuation of Downing Care Homes Holdings Limited has been increased by £220,000 to reflect the improved performance of one of the care homes owned by the business.

Leytonstone Pub Limited owns and operates The Red Lion pub in North East London. The pub continues to trade well and the valuation has been increased by £210,000.

The most significant of these losses was on loan notes held in Ludorum plc, the company that owns the intellectual property rights to various children's entertainment brands. The value has been reduced by £991,000 due to concerns over the future performance of the business.  Downing is actively engaged in working with management, including a new Chairman, to improve performance.

Mosaic Spa and Health Club Limited was reduced by £384,000 in the period, reflecting continued performance issues at the Shrewsbury site.

Oak Grove Renewables Limited, an anaerobic digestion plant in Norfolk has been reduced in value by £300,000 due to ongoing performance issues at the facility.

As a result of the refinancing on Quadrate Spa Limited a value reduction of £286,000 was made on the company valuation. This was more than offset by the realised profit over its holding value of £334,000.

Unquoted Venture Capital investments
Tramps Night Club Limited, the owner of a night club in the West Midlands, has been written down by £146,000 due to an ongoing downward trajectory of trading at the venue.

Kimbolton Lodge Limited, the elderly care home in Bedford, was valued down by £140,000 due to disappointing performance in the year.

Other valuation reductions totalling £600,000 were also made in the period.

Quoted investments
Investment activity
As at 31 March 2016, the quoted portfolio was valued at £23.7 million comprising of 30 holdings. As per the investment strategy to concentrate on a more focused portfolio of investments, three investments were fully disposed of in the period. Over 37% of the quoted portfolio is accounted for in the top 10 holdings and represents 36% of the overall fund.

Over the period since 31 March 2015, the valuation of the quoted portfolio (taking into account realised and unrealised movements) has risen by over 4%, ahead of the main AIM indices over the same period which were largely flat.

Three full realisations were made, one being subject to a takeover and the balance being in companies where we believed the valuations were not reflective of the prospects of the company. These included InterQuest plc and Northbridge Industrial Services plc. Separately, profits were taken in five portfolio holdings (PHSC plc, Inland Homes plc, Wheelsure Holdings plc, Concha plc and Tracsis plc). Overall the realised gains (versus cost) on quoted investments since 31 March 2015 equated to £2.6 million.

New non-qualifying positions were taken in four new investments; Pittards plc, Amino Technologies plc, Hornby plc and Redhall Group plc.  Significant follow on investments were made in Flowgroup plc and Norman Broadbent plc.

The largest of the new holdings is Pittards plc, where the Company invested £1.35m. Pittards plc is an international producer of high grade leather and leather products. The Company took a position in Pittards plc on the back of a fundraising by existing shareholders for the purpose of buying back its Yeovil tannery - this enhanced the balance sheet and provides greater security for the investment. Downing client funds now own over 20% of the share capital of Pittards plc.

 As well as the buy-back of the tannery, the Adviser was also attracted by the expansion into finished goods which provides a tangible uplift in margins versus those on general leather sales.  The share purchase was made at a significant discount to the net asset value of the company. 

In the period the valuation of Pittards plc was down £574,000 reflecting the impact of trading in China and Russia. Whilst the Group's most recent results were disappointing on the back of these macro headwinds, we believe that they are well positioned going forward with a restructured board which now has ownership and control of the Yeovil facility which should deliver significant ongoing operational advantages. 

Portfolio Movements
The most significant portfolio movement was Tracsis plc which demonstrated an unrealised gain of £1.0 million in the year to 31 March 2016.  In addition realised gains of £0.2 million were made in this company.  At the year end, this holding is valued at £3.9 million and is the third largest holding within the Company.  Tracsis plc is a developer and supplier of resource optimisation technologies to the transport industry, supplying a range of products and services to transport operators and infrastructure owners. The company is well known to us having been a holding since 2011. Continued positive news flow allowed us to revisit the target valuation for the company and we believe that the current valuation underestimates the value of future cash flows that the company can generate.

During the year Accumuli plc was sold to NCC Group plc, a larger competitor.  As a result the Company received shares in NCC plc.  During the year the holding in NCC plc has been sold down.  The transactions realised a total of just under £2 million of gains for the Company.

Universe Group plc, the provider of payment and loyalty management solutions, saw its value within the portfolio increase by £496,000 reflecting strong earnings progression and a significant new contract win. 

Science in Sport plc, the manufacturer of sports nutritional products, saw its value fall by £411,000 in the Company, reflecting a lack of news flow and small sellers in the market.  Post year end, the company has announced encouraging top line growth, ahead of our expectations. 

 Outlook
We remain positive on the key drivers within the quoted portfolio on the basis of the fundamentals and the valuations on which they trade. The coming 12 months will be a period for the Adviser to focus on the portfolio after a period when a number of new strategic holdings were added to the portfolio.   

New unquoted investment activity has adjusted to reflect the recent changes in eligible investments made by HMRC to the VCT scheme.  In particular, we are seeking to find opportunities to make investments to fund growth in companies that have been trading for less than 7 years.  A core focus will continue to be on activities within the leisure, healthcare and education sectors, where Downing has significant sector experience, and where there are a number of exciting opportunities to back the development of businesses such as leisure clubs, licenced trade operators and children's nurseries.  In addition the Adviser will consider other sectors that offer good growth prospects and where there are strong management teams.

Your Company is currently well spread across a large number of investments, in a relatively stable portfolio, and is therefore well placed to make smaller, potentially higher risk earlier stage investments, where the potential return may be higher. 

REVIEW OF INVESTMENTS

Portfolio of investments
The following investments, all of which are incorporated in England and Wales, were held at 31 March 2016:

	Cost	Valuation	Valuation movement in year	% of portfolio by value	Total invested by Funds also managed by Downing LLP (1)
	£'000	£'000	£'000			£'000
Top ten venture capital investments
Vulcan Renewables Limited	5,030	5,548	-	6.0%		5,839
Downing Care Homes Holdings Limited	3,881	4,250	220	4.6%		-
Tracsis plc *	1,443	3,853	1,001	4.2%		2,645
Cadbury House Holdings Limited	3,081	2,875	549	3.1%		1,613
Kidspace Adventure Holdings Limited	2,577	2,773	51	3.0%		7,850
Baron House Developments LLP	2,695	2,695	-	2.9%		2,055
Universe Group plc *	1,586	2,561	496	2.8%		2,582
Inland Homes plc*	1,526	2,465	481	2.7%		2,491
Leytonstone Pub Limited	1,061	1,900	210	2.1%		-
Mosaic Spa and Health Club Limited	2,747	1,830	(384)	2.0%		2,748
	25,627	30,750	2,624	33.4%		27,823
Other venture capital investments
Anpario  plc*	1,448	1,546	(340)	1.7%		1,862
Quadrate Catering Limited	1,534	1,534	-	1.7%		2,301
Quadrate Spa Limited	1,872	1,500	(286)	1.6%		2,300
Harrogate Street LLP	1,400	1,400	-	1.5%		-
Science in Sport plc*	1,685	1,370	(411)	1.5%		2,219
Craneware plc*	850	1,334	365	1.4%		1,484
Nomansland Biogas Limited	1,300	1,300	-	1.4%		1,300
Finsbury Food Group plc*	655	1,265	388	1.4%		2,911
Plastics Capital plc*	849	1,218	(37)	1.3%		2,227
Oak Grove Renewables Limited	1,365	1,065	(300)	1.2%		8,160
Cedarville Trading Limited	1,000	1,000	-	1.1%		1,000
Pilgrim Trading Limited	1,000	1,000	-	1.1%		1,000
Vianet Group plc*	952	977	122	1.1%		-
Sprue Aegis plc*	545	929	(379)	1.0%		1,921
Hobblers Heath Limited	912	912	-	1.0%		2,439
Aminghurst Limited	869	869	-	0.9%		5,122
Pearce & Saunders Limited	1,320	845	(106)	0.9%		1,076
Pabulum Pubs Limited	807	836	29	0.9%		915
Pittards plc*	1,350	776	(574)	0.8%		1,223
Ludorum plc	3,573	750	(991)	0.8%		-
Cohort plc*	394	736	239	0.8%		-
Data Centre Response Limited	557	702	27	0.8%		-
Angle plc*	678	694	(48)	0.8%		-
Curo Compensation Limited	688	688	-	0.7%		-
Redhall Group plc*	500	675	175	0.7%		1,215
Fenkle Street LLP	346	623	277	0.7%		1,236
Amino Technologies plc*	700	592	(108)	0.6%		2,157
Tramps Night Club Limited	1,192	558	(146)	0.6%		-
Wickham Solar Limited	472	550	-	0.6%		1,100
Kimbolton Lodge Limited	664	463	(140)	0.5%		-
Norman Broadbent plc*	1,052	447	(301)	0.5%		126
Sanderson Group plc*	336	406	83	0.4%		1,642
Fresh Green Power Limited	400	400	-	0.4%		600
Augusta Pub Company Limited	290	324	34	0.4%		1,451
Avacta Group plc*	247	314	76	0.3%		-
Brooks Macdonald Group plc*	257	309	52	0.3%		1,137
Dillistone Group plc*	411	301	(53)	0.3%		-
Flowgroup plc*	385	289	(196)	0.3%		-
Kidspace Adventures Limited	261	261	-	0.3%		539
Hoole Hall Country Club Holdings Limited	2,316	250	(179)	0.3%		-
City Falkirk Limited	326	236	(39)	0.3%		1,062
FCT No.1 Limited	228	228	-	0.2%		-
Fubar Stirling Limited	357	225	(116)	0.2%		1,013
Brady Public Limited Company	272	213	(181)	0.2%		-
Green Energy Production UK Limited	200	200	-	0.2%		300
Hornby plc*	500	168	(332)	0.2%		766
Gatewales Limited	112	151	39	0.2%		849
Pennant International Group plc*	335	138	(184)	0.1%		-
Future Biogas (SF) Limited	451	131	-	0.1%		291
Future Biogas (Reepham Rd) Limited	601	130	(43)	0.1%		389
London City Shopping Centre Limited	110	110	-	0.1%		429
Pressure Technologies plc*	249	106	(40)	0.1%		4
Pro-Global Insurance Solutions plc (Tawa)	61	100	38	0.1%		-
Pearce & Saunders DevCo Limited	88	88	-	0.1%		112
Giving Limited	83	83	-	0.1%		-
Leytonstone Pub no1 Limited	81	81	-	0.1%		-
Mi-Pay Group plc (Aimshell)*	136	67	-	0.1%		-
Redmed Limited	144	64	8	0.1%		144
Frontier IP Group plc	30	56	9	0.1%		-
PHSC plc*	52	42	(10)	0.1%		-
Wheelsure Holdings plc*	48	30	-	0.1%		-
Cheers Dumbarton Limited	64	22	-	0.1%		101
VCA Capital Limited	-	11	11	0.0%		-
Camandale Limited	75	7	(12)	0.0%		-
Commercial Street Hotel Limited	-	-	-	0.0%		-
Antelope Pub No 1 Limited	-	-	-	0.0%		-
China Food Company plc	149	-	-	0.0%		-
Hoole Hall Spa and Leisure Club Limited	297	-	-	0.0%		-
Resource Reserve Recovery Ltd (VSA Capital plc)	6	-	(6)	0.0%		-
Rostima Limited	1,043	-	-	0.0%		-
Southampton Hotel Developments Limited	395	-	-	0.0%		-
Southampton Spa Limited	-	-	-	0.0%		-
The 3D Pub Co Limited	-	-	(135)	0.0%		-
The Thames Club Limited	175	-	-	0.0%		-
Top Ten Holdings plc	399	-	-	0.0%		-
	44,499	34,695	(3,721)	37.6%		56,123
Total investments	70,126	65,445	(1,097)	71.0%		83,946
Cash at bank and in hand		26,713		29.0%
		92,158		100.0%

The Company also invested into Heyford Homes VCT Limited, Imagelinx plc, Invocas Group plc, Lochrise Limited, The New Swan Holding Company Limited, Southampton Spa Limited and Antelope Pub no 1 Limited. These investments were acquired at negligible value and continued to be valued at the same level.

All venture capital investments are unquoted unless otherwise stated.

*       Quoted on AIM          
**     Quoted on the ISDX Growth Market
               
(1)     Other funds also managed by Downing LLP as Investment Manager or Adviser as at 31 March 2016:

*Downing TWO VCT plc
*Downing THREE VCT plc
*Downing FOUR VCT plc
*PFS Downing UK Micro-Cap Growth Fund
*Downing AIM Estate Planning Service and Downing AIM NISA

Investment movements for the year ended 31 March 2016

Additions

	£'000
Quoted
NCC Group plc	3,148
Pittards plc	1,350
Amino Technologies plc	700
Hornby plc	500
Redhall Group plc	500
Flowgroup plc	178
Norman Broadbent plc	146
Tracsis plc	2
Anpario plc	1
Cohort plc	1
Craneware plc	1
	6,527
Unquoted
Vulcan Renewables Limited	2,350
Quadrate Catering Limited	1,500
Quadrate Spa Limited	1,500
Harrogate Street LLP	1,400
Kidspace Adventures Holding Limited	1,361
Nomansland Biogas Limited	1,300
Pearce & Saunders Limited	1,074
Cedarville Trading Limited	1,000
Pilgrim Trading Limited	1,000
Hobblers Heath Limited	912
UK (Lower Newton) Solar LLP	820
FCT No.1 Limited	228
Redmed Limited	203
Curo Compensation Limited	163
Pearce and Saunders DevCo Limited	88
London City Shopping Centre Limited	30
	14,929
	21,456

Disposals

				Profit/	Realised
		Value at		(loss) vs	gain/
	Cost	01/04/15*	Proceeds	cost	(loss)
	£'000	£'000	£'000	£'000	£'000
Quoted
Accumuli plc	2,395	3,796	4,296	1,901	500
NCC Group plc	3,148	3,148	3,232	84	84
Tracsis plc	331	655	857	526	202
Inland Homes plc	212	334	361	149	27
Interquest plc	229	254	230	1	(24)
Northbridge Industrial Services plc	254	228	106	(148)	(122)
PHSC plc	104	104	113	9	9
Concha plc	3	65	49	46	(16)
Wheelsure Holdings plc	23	14	18	(5)	4
	6,699	8,598	9,262	2,563	664
Unquoted (including loan note redemptions)
UK Solar (Hartwell) LLP	2,000	2,000	2,000	-	-
Residential PV Limited	1,060	1,270	1,487	427	217
Domestic Solar Limited	1,008	1,008	1,196	188	188
Quadrate Catering Limited	932	932	852	(80)	(80)
Antelope Pub Company Limited	840	885	1,010	170	125
UK Solar (Lower Newton) LLP	820	820	820	-	-
The 3D Pub Co Limited	710	710	867	157	157
Quadrate Spa Limited	702	702	1,036	334	334
Redmed Limited	638	699	761	123	62
Alpha Schools (Holdings) Limited	585	637	747	162	110
First Care Limited	843	568	1,379	536	811
Future Biogas (Reepham Road) Limited	522	522	522	-	-
Angel Solar Limited	500	500	615	115	115
Pearce and Saunders Limited	493	493	493	-	-
Future Biogas (SF) Limited	491	491	491	-	-
Slopingtactic Limited	379	481	481	102	-
Liverpool Nurseries (Holdings) Limited	478	461	507	29	46
Progressive Energies Limited	320	358	382	62	24
SPC International Limited	180	355	405	225	50
Hoole Hall Spa and Leisure Club Limited	1,170	321	321	(849)	-
Chapel Street Food and Beverage Limited	97	193	336	239	143
Chapel Street Services Limited	97	193	316	219	123
Camandale Limited	222	169	169	(53)	-
Universe Group plc	120	120	120	-	-
Aminghurst Limited	119	119	119	-	-
Commercial Street Hotel Limited	115	115	115	-	-
Tramps Night Club Limited	140	104	200	60	96
Keycom plc	817	90	106	(711)	16
Dominions House Limited	78	78	78	-	-
Kilmarnock Monkey Bar Limited	113	68	68	(45)	-
Gatewales Limited	41	41	151	110	110
Chapel Street Hotel Limited	4	8	-	(4)	(8)
Imagelinx plc	-	-	14	14	14
VSA Limited	-	-	1	1	1
Tawa Associates Limited	-	-	21	21	21
	16,634	15,511	18,186	1,552	2,675
Total disposals	23,333	24,109	27,448	4,115	3,339

*       Adjusted for purchases in the year where applicable

Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report, the Report of the Directors, the Directors' Remuneration Report, the separate Corporate Governance Statement 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 (FRS102). 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 and 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.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements and the Directors Remuneration Report 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 undertakes and provides the information necessary to assess the Company's performance, business model and strategy.

The Directors are responsible for the oversight of 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 annual reports may differ from legislation in other jurisdictions.

INCOME STATEMENT
for the year ended 31 March 2016

				2016				2015
	Revenue		Capital	Total		Revenue	Capital	Total
	£'000		£'000	£'000		£'000	£'000	£'000
Income		2,790	-	2,790		2,659	-	2,659
Gains on investments		-	2,242	2,242		-	1,410	1,410
		2,790	2,242	5,032		2,659	1,410	4,069
Investment management fees		(756)	(756)	(1,512)		(676)	(676)	(1,352)
Other expenses		(928)	-	(928)		(715)	-	(715)
Return on ordinary activities before tax		1,106	1,486	2,592		1,268	734	2,002
Tax on total comprehensive income and ordinary activities		(227)	227	-		(213)	213	-
Return attributable to equity shareholders		879	1,713	2,592		1,055	947	2,002
Basic and diluted return per share		1.0p	2.0p	3.0p		1.4p	1.2p	2.6p

The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS102"). There are no other items of comprehensive income. The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 by the Association of Investment Companies ("AIC SORP").

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016

	Called up Share  Capital	Capital redemption reserve	Share premium account	Funds held in respect of shares not yet allotted	Special reserve	Capital reserve -realised	Revaluation reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
For the year ended 31 March 2016
At 1 April 2015	798	1,500	69,714	2,593	7,523	-	(2,805)	594	79,917
Total comprehensive income	-	-	-	-	-	2,809	(1,096)	879	2,592
Cancellation of Share Premium account	-	-	(82,321)	-	82,321	-	-	-	-
Realisation of revaluations from previous years	-	-	-	-	-	779	(779)	-	-
Transfer between reserves*	-	-	-	-	(803)	803	-	-	-
Transactions with owners
Dividends paid	-	-	-	-	-	(4,391)	-	(840)	(5,231)
Utilised in share issue	-	-	-	(2,593)	-	-	-	-	(2,593)
Unallotted shares	-	-	-	4,423	-	-	-	-	4,423
Issue of new shares	159	-	15,399	-	-	-	-	-	15,558
Share issue costs	-	-	-	-	(296)	-	-	-	(296)
Purchase of own shares	(25)	25	-	-	(2,262)	-	-	-	(2,262)
At 31 March 2016	932	1,525	2,792	4,423	86,483	-	(4,680)	633	92,108
For the year ended 31 March 2015
At 1 April 2014	750	1,470	62,114	921	11,458	-	(2,438)	302	74,577
Total comprehensive income	-	-	-	-	-	158	789	1,055	2,002
Realisation of revaluations from previous years	-	-	-	-	-	1,156	(1,156)	-	-
Transfer between reserves*	-	-	-	-	(977)	977	-	-	-
Transactions with owners
Dividends paid	-	-	-	-	-	(2,291)	-	(763)	(3,054)
Utilised in share issue	-	-	-	(921)	-	-	-	-	(921)
Unallotted shares	-	-	-	2,593	-	-	-	-	2,593
Issue of new shares	78	-	7,600	-	-	-	-	-	7,678
Share issue costs	-	-	-	-	(156)	-	-	-	(156)
Purchase of own shares	(30)	30	-	-	(2,802)	-	-	-	(2,802)
At 31 March 2015	798	1,500	69,714	2,593	7,523	-	(2,805)	594	79,917

*   A transfer of £779,000 representing previously recognised unrealised gains on disposal of investments during the year ended 31 March 2016 (2015: £1.2 million) has been made from the Capital Reserve realised to the Special reserve.  A transfer of £1.6 million representing realised gains on disposal of investments, less capital expenses and capital dividends in the year (2015: £2.1 million) has been made from Capital Reserves - realised to Special reserve.

BALANCE SHEET
as at 31 March 2016

		2016		2015
		£'000		£'000
Fixed assets
Investments		65,445		69,195
Current assets
Debtors		292		592
Cash at bank and in hand		26,713		10,857
		27,005		11,449
Creditors: amounts falling due within one year		(342)		(727)
Net current assets		26,663		10,722
Net assets		92,108		79,917
Capital and reserves
Called up share capital		932		798
Capital redemption reserve		1,525		1,500
Share premium account		2,792		69,714
Funds held in respect of shares not yet allotted		4,423		2,593
Special reserve		86,483		7,523
Capital reserve - realised		-		-
Revaluation reserve		(4,680)		(2,805)
Revenue reserve		633		594
Total equity shareholders' funds		92,108		79,917
Basic and diluted net asset value per share		94.1p		96.9p

CASH FLOW STATEMENT
for the year ended 31 March 2016

	2016		2015
	£'000		£'000
Cash flow from operating activities
Profit on ordinary activities before taxation	2,592		2,002
Gains on investments	(2,242)		(1,410)
Decrease/(Increase) in debtors	300		(185)
Decrease in creditors	(385)		(29)
Cash from operations
Corporation tax paid	-		(199)
Net cash generated from operating activities	265		179
Cash flow from investing activities
Purchase of investments	(21,456)		(5,620)
Proceeds from disposal of investments	27,448		5,660
Acquisition costs	-		(244)
Net cash inflow/(outflow) from investing activities	5,992		(204)
Cash flows from financing activities
Proceeds from share issue	15,352		6,757
Funds held in respect of shares not yet allotted	1,831		2,593
Share issue costs	(296)		(156)
Purchase of own shares	(2,262)		(3,241)
Equity dividends paid	(5,026)		(3,054)
Net cash inflow from financing activities	9,599		2,899
Increase in cash	15,856		2,874
Net increase in cash
Beginning of year	10,857		7,983
Net cash inflow	15,856		2,874
End of year	26,713		10,857

NOTES TO THE ACCOUNTS
for the year ended 31 March 2016

1. Accounting policies

Basis of accounting
The Company has prepared its financial statements in accordance with the Financial Reporting Standard 102 ("FRS102") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised November 2014 ("SORP").

This is the first period in which the financial statements have been prepared under FRS102, however, it has not been necessary to restate comparatives as the treatment previously applied is consistent with the requirements of FRS102. As a result, there are no reconciling differences between the previous financial reporting framework and the current financial reporting framework and the comparative figures represent the position under both current and previous financial reporting frameworks.

The Company implements new Financial Reporting Standards issued by the Financial Reporting Council when required.

Presentation of income statement
In order to better reflect the activities of a Venture Capital Trust and in accordance with guidance issued by the Association of Investment Companies ("AIC"), supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. The net revenue 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.

Investments
Venture capital investments are designated as "fair value through profit or loss" assets due to investments being managed and performance evaluated on a fair value basis. 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.

Judgements in applying accounting policies and key sources of estimation uncertainty
Of the Company's assets measured at fair value, it is possible to determine their 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").

Investments quoted on recognised stock markets are measured using bid prices.

The valuation methodologies for unlisted instruments (comprising equity and loan notes) 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 the 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.

Where an investee company has gone into receivership, liquidation, or administration where there is little likelihood of a recovery, the loss on the investment, although not physically disposed of, is treated as being realised.

Gains and losses arising from changes in fair value are included in the income statement as a capital item.

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 the SORP and FRS102 sections 14 and 15 that do not require portfolio investments to be accounted for using the equity method of accounting.

Judgements in applying accounting policies and key sources of estimation uncertainty (continued)
In respect of disclosures required by the SORP for the 10 largest investments held by the Company, the most recent publicly available accounts information, either as filed at Companies House, or announced to the London Stock Exchange, is disclosed. In the case of unlisted investments, this may be abbreviated information only.

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

Loan stock interest is accrued on a time apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable and only where there is reasonable certainty of collection.

Expenses
All expenses are accounted for on an accruals basis. 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 acquisition of an investment are deducted from the Capital Account.
-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. Investment management fees are allocated 50% to revenue and 50% to capital, in order to reflect the Directors' expected long-term view of the nature of the investment returns of the Company.

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.

Deferred taxation is not discounted and 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 the obligations or rights crystallise based on tax rates and law enacted or substantively enacted at the balance sheet date. 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. Deferred tax assets are only recognised if it is expected that future taxable profits will be available to utilise such assets and are recognised on a non-discounted basis.

Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks with an original maturity of three months or less.

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

Share issue costs
Share issue costs have been deducted from the special reserve account.

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.

Segmental reporting
The Company only has one class of business and one market.

2. Basic and diluted return per share

	2016		2015
Return per share based on:	£'000		£'000
Net revenue return for the financial year	879		1,055
Net capital gain for the financial year	1,713		947
Total return for the financial year	2,592		2,002
Weighted average number of shares in issue	85,175,415		76,191,863

As the Company has not issued any convertible securities or share options, there is no dilutive effect on return per share. The return per share disclosed therefore represents both basic and diluted return per share.

3.  Basic and diluted net asset value per share

		Shares  in issue	Net assets	NAV per share
			£'000	pence
As at  31 March 2016
Ordinary Shares		93,220,222	87,685	94.1
Funds held in respect of shares not yet allotted			4,423
			92,108
As at  31 March 2015
Ordinary Shares		79,798,496	77,324	96.9
Funds held in respect of shares not yet allotted			2,593
			79,917

As the Company has not issued any convertible securities or share options, there is no dilutive effect on net asset value per class of share in issue. The net asset value per share disclosed therefore represents both basic and diluted net asset value per class of share in issue.

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:

          * Investment 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 investment risks is a fundamental part of the investment activities undertaken by the Investment Adviser and overseen by the Board. The Investment Adviser 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 Investment Adviser 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 investment risks to which the Company is exposed are:

   * Investment price risk; and
   * Interest rate risk.

The Company has undertaken sensitivity analysis on its financial instruments, split into the relevant component parts, taking into consideration the economic climate at the time of review in order to ascertain the appropriate risk allocation.

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 investment price movements in respect of quoted investments and also changes in the fair value of unquoted investments that it holds.

Interest 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 and fixed interest securities attract interest predominately at fixed rates. A summary of the interest rate profile of the Company's investments is shown below.

Interest rate profile of financial assets and financial liabilities
There are three levels of interest which are attributable to the financial instruments as follows:

*"Fixed rate" assets represent investments with predetermined yield targets and comprise fixed interest and loan note investments.
*Floating rate" assets predominantly bear interest at rates linked to Bank of England base rate and comprise cash at bank.
*"No interest rate" assets do not attract interest and comprise equity investments, non-interest bearing convertible loan notes, loans and receivables (excluding cash at bank) and other financial liabilities.

The Company monitors the level of income received from fixed, floating and non interest rate assets and, if appropriate, may make adjustments to the allocation between the categories, in particular, should this be required to ensure compliance with the VCT regulations.

The Bank of England base rate stood at 0.5% per annum throughout the year. Any potential change in the base rate, at the current level, would have an immaterial impact on the net assets and total return of the Company.

Credit risk
Credit risk is the risk that 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, investments in fixed interest securities, cash deposits and debtors.

The Investment Adviser manages credit risk in respect of loan notes with a similar approach as described under investment risks above. In addition the credit risk is partially mitigated by registering floating charges over the assets of certain investee companies. The strength of this security in each case is dependent on the nature of the investee company's business and its identifiable assets. The level of security is a key means of managing credit risk. Similarly, the management of credit risk associated with interest, dividends and other receivables is covered within the investment management procedures.

Cash is mainly held at Royal Bank of Scotland plc, with a balance also maintained at Bank of Scotland plc, both of which are A-rated financial institutions and ultimately part-owned by the UK Government. Consequently, the Directors consider that the credit risk associated with cash deposits is low.

There have been no changes in fair value during the year that can be directly attributable to changes in credit risk.

As at 31 March 2016 of the loan stock classified as "past due" below, £7,585,000 relates to the principal of loan notes where, although the principal remains within term, the investee company is not fully servicing the interest obligations under the loan note and is in arrears.  Notwithstanding the arrears of interest, the Directors do not consider that the loan note itself has been impaired or the maturity of the principal has altered.

As at 31 March 2016 of the loan stock classified as "past due" below, £2,605,000 relates to the principal of loan notes where the principal has passed its maturity date. As at the balance sheet date, the extent to which the principal is past its maturity date, £2.1 million falls within the banding of nil to 2 years past due and £0.5 million is 3 to 4 years past due. Notwithstanding this information, the Directors do not consider the loan notes to be impaired at the current time or that maturity dates of the principals have altered.

As at 31 March 2015 of the loan stock classified as "past due" below, £10,629,000 relates to the principal of loan notes where, although the principal remains within term, the investee company is not fully servicing the interest obligations under the loan note and is in arrears.  Notwithstanding the arrears of interest, the Directors do not consider that the loan note itself has been impaired or the maturity of the principal has altered.

As at 31 March 2015 of the loan stock classified as "past due" below, £2,398,000 relates to the principal of loan notes where the principal has passed its maturity date. As at the balance sheet date, the extent to which the principal is past its maturity date, falls within the banding of nil to 3 years past due. Notwithstanding this information, the Directors do not consider the loan notes to be impaired at the current time or that maturity dates of the principals have altered.

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. The Company only normally ever has a relatively low level of creditors (2016: £342,000, 2015: £727,000) and has no borrowings. Also most quoted investments held by the Company are considered to be readily realisable. The Company always holds sufficient levels of funds as cash and readily realisable investments in order to meet expenses and other cash outflows as they arise. For these reasons the Board believes that the Company's exposure to liquidity risk is minimal.

The Company's liquidity risk is managed by the Investment Adviser in line with guidance agreed with the Board and is reviewed by the Board at regular intervals.
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 2016, but has been extracted from the statutory financial statements for the year ended 31 March 2016 which were approved by the Board of Directors on 11 July 2016 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 2015 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.

A copy of the full annual report and financial statements for the year ended 31 March 2016 will be printed and posted to shareholders shortly. Copies will also be available to the public at the registered office of the Company at Ergon House, Horseferry Road, London SW1P 2AL and will be available for download from and www.downing.co.uk

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX 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 ONE VCT plc via Globenewswire

HUG#2027810