Final Results

Elderstreet Downing VCT PLC
30 April 2001

ELDERSTREET DOWNING VCT PLC

PRELIMINARY ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2000

FINANCIAL HIGHLIGHTS
                                                                           2000
                                                                          pence 
Net asset value per share                                                 101.5
Total dividends per ordinary share                                         12.0
Net assets                                                        £15.3 million



The statement to shareholders by the Chairman, David Brock, includes the
following comments:

Introduction

I am pleased to present the Company's Report and Accounts for the year ended
31 December 2000.

As a result of the Company revoking its investment company status in order to
pay a capital distribution, the financial statements now include a Profit and
Loss Account, replacing the Statement of Total Return. To aid your
understanding of this year's results, an unaudited Statement of Total Return
is presented.

I am naturally disappointed that net assets per share have fallen from 125.1p
at the beginning of the year to 101.5p. It should however be noted that 12p
per share of this fall is accounted for by dividends paid and proposed as
discussed below. It is also worth noting that an 11p per share fall is
attributable to one investment, Systems Union Group plc (formerly Freecom.net
plc). Systems Union Group plc overall was a good investment for your VCT
producing proceeds of £1.6m from an original investment of £250,000 but in
last year's accounts it was valued at £3.2m (after taking account of £12,000
of the original investment that was disposed during 1999), utilising its then
mid-market price and therefore in this year it has produced a decline in value
of £1.6m. Incidentally if the whole stake had been retained rather than sold
it would today be worth just £714,000.

Venture capital investments

At the end of the financial year the Company had a portfolio consisting of
investments in thirty-seven companies with a cost of £12.5 million.

The portfolio has been affected by the change in sentiment towards the
internet and technology sector, which has meant that several investee
companies failed to raise additional funding and have subsequently gone into
liquidation. However, I am pleased to note the substantial progress made by
many of the other investee companies and I would like to highlight three such
companies. Software for Sport plc (formerly Computer Software Limited)
successfully floated on AIM at a price well in excess of the cost price.
Topnotch Health Clubs plc, likewise, floated on AIM raising £10 million and is
now running 16 clubs compared to four when the Company invested in January
1999. European Telecommunications & Technology Plc closed a second round of
finance at nearly six times the original capitalisation.

A summary of the disposals during the year are as follows:

                                                  Cost  Proceeds  Profit/(Loss)
                                                  £'000    £'000          £'000
Baron Corporation Plc                                25       50             25
BsoftB Plc                                          250      295             45
Honeysuckle Plc                                     150      624            474
Honeycombe Leisure Limited                          254      466            212
Maclellan Group Plc                                 228      315             87
Netstore Plc                                         50       31           (19)
Systems Union Group Plc (formerly Freecom.net       238    1,606          1,368
plc)
Visua Limited                                       500      785            285
                                                  1,695    4,172          2,477

As at 31 December 1999 the above investments had been revalued upwards by a
total of £3,515,000. Consequently a realised loss for the year on venture
capital investments of £1,038,000 is included within the Profit and Loss
account

Qualifying investments now represent 78% of total investments (including cash)
thereby exceeding the Venture Capital Trust qualifying criteria of a minimum
of 70%.

Listed fixed income investments

The listed fixed income investments have been, and continue to be, managed by
Cazenove Fund Management Limited. After taking into account of disposals
during the year, the fixed interest portfolio increased in value by £19,000
during the year arising as a result of the stabilisation in interest rates and
bond prices.

Results and dividend

Gross income for the year was £711,000 (1999 - £837,000). Loss on ordinary
activities after taxation was £3,790,000 (1999 profit (as restated) - 
£492,000) and net assets per share were 101.5p (1999 - 125.1p). Had the company
not changed its status, the net revenue after taxation would have been 
£317,000 (1999 -£406,000).

An interim dividend of 10p per share net was paid during the year. Your Board
is proposing to pay a final dividend of 2p per share on 19 June 2001 to
shareholders on the register at 18 May 2001.

Cancellation of share premium account

On 1 November 2000, following shareholder approval given at the EGM held on 4
October 2000, the Company cancelled the Share Premium account and created a
distributable Special Reserve.

Share repurchase

The Board is conscious that the Company's share price is affected by the
illiquidity of its shares in the market, resulting from the requirement that
shareholders must retain their shares at least five years in order to retain
their tax benefits. In line with accepted practice with VCTs, the Company has
a policy of purchasing its own shares. Details of such purchases during the
year are given in the Report of the Directors. A Special Resolution to
continue with this policy is proposed for the forthcoming AGM.

Annual General Meeting

The fourth Annual General Meeting of the Company will be held at 32 Bedford
Row, London WC1R 4HE at 11:30 am on 14 June 2001. Notice of the meeting is at
the end of this document. Two items of Special Business are proposed as
Special Resolutions in the Notice of Meeting:


        (1) to authorise the Directors to allot shares other than pro-rata to
        existing shareholders; and

        (2) to renew the Company's authority to purchase up to 1,511,600
        ordinary shares in the market, representing approximately 10% of the
        current issued ordinary share capital.

Publication of share price

The Company's share price continues to be quoted in the Financial Times on a
daily basis in the 'Investment Companies' sector.

Outlook

The Company has continued to perform well against a background of difficult
market conditions. Now that the Company has revoked its investment company
status, returns to shareholders will mainly arise as a result of gains on the
disposal of investments. The VCT remains virtually fully invested but as an
'evergreen' investment trust will re-invest as and when realisations occur,
albeit it will continue to distribute capital profits as appropriate.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2000

                                                     Year ended     Year ended

                                                    31 December    31 December
                                                           2000           1999

                                                                 (as restated)
                                                          £'000          £'000
Investment income                                           711            837
Investment management fees                                (288)          (236)
Other expenses                                            (248)          (217)
Operating profit                                            175            384
Provision for permanent diminution of                   (2,896)              -
investments
(Loss)/ profit on realisation of investments            (1,038)            209
(Loss)/ profit on ordinary activities before            (3,759)            593
taxation
Tax on ordinary activities                                 (31)          (101)
(Loss)/ profit on ordinary activities after             (3,790)            492
taxation
Dividends                                               (1,816)          (379)
Retained (loss)/ profit for the year                    (5,606)            113
Earnings per share                                      (25.0)p           3.2p



Earnings per share is based on the loss on ordinary activities after taxation,
but before deduction of dividends, of £3,790,000 (1999 profit (as restated) -
£492,000) in respect of 15.13 million ordinary shares (1999 - 15.15 million),
being the weighted average number of ordinary shares in issue during the year.



STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

FOR THE YEAR ENDED 31 DECEMBER 2000
                                                      Year ended     Year ended

                                                     31 December    31 December
                                                            2000           1999
                                                           £'000          £'000
(Loss)/ profit on ordinary activities after              (3,790)            492
taxation
Provision for permanent diminution of investments          2,896              -
Unrealised (losses)/ gains on revaluation of               (861)          4,488
investments
Total recognised gains and losses for the year           (1,755)          4,980
Recognised gains brought forward                           5,300            320
Recognised gains carried forward                           3,545          5,300

NOTE OF HISTORICAL COST PROFITS AND LOSSES

FOR THE YEAR ENDED 31 DECEMBER 2000
                                                       Year ended    Year ended

                                                      31 December   31 December
                                                             2000          1999
                                                            £'000         £'000
(Loss)/ profit on ordinary activities after               (3,790)           492
taxation
Provision for permanent diminution of investments           2,896             -
Realisation of revaluation gains/ (losses) from             3,503          (24)
previous years
Historical cost profit on ordinary activities after         2,609           468
taxation
Dividends                                                 (1,816)         (379)
Retained historical cost profit for the year                  793            89
Historical cost profits brought forward                        30          (59)
Historical cost profits carried forward                       823            30





BALANCE SHEET AT 31 DECEMBER 2000
                                               31 December         31 December
                                                      2000                1999

                                                                 (as restated)
                                        £'000        £'000   £'000       £'000
Fixed Assets
Venture capital investments            12,688               15,185
Listed fixed income investments         1,450                2,355
                                                    14,138              17,540
Current Assets
Debtors                                   759                  331
Cash at bank and in hand                  814                1,249
                                        1,573                1,580
Creditors: amounts falling due within
one year
                                        (367)                (185)
Net current assets                                   1,206               1,395
Net assets                                          15,344              18,935
Capital and reserves
Called up share capital                                755                 756
Share premium account                                    -              13,636
Capital redemption reserve                               2                   1
Revaluation reserve                                  3,057               4,527
Special reserve                                     11,530                   -
Profit and loss account                                  -                  15
Equity shareholders' funds                          15,344              18,935
Net asset value per share                           101.5p              125.1p

Net asset value per ordinary share is based on net assets at the year-end, and
on 15.12 million ordinary shares (1999 - 15.14 million), being the number of
ordinary shares in issue at the year-end.

CASHFLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2000

                                                 Year ended         Year ended

                                                31 December        31 December
                                                       2000               1999
                                          £'000       £'000   £'000      £'000
Net cash (outflow)/inflow from operating               (11)                335
activities
Taxation - advance corporation tax paid                   -               (63)
Investing activities
Purchase of listed fixed income           (598)             (1,354)
securities
Purchase of venture capital investments (5,904)             (8,685)
                                        (6,502)            (10,039)
Sale of fixed income securities           1,538               6,499
Sale of venture capital investments       6,225                 472
Net cash inflow/(outflow) from investing              1,261            (3,068)
activities
Equity dividends paid                               (1,665)              (470)
Net cash outflow before financing                     (415)            (3,266)
Financing
Purchase of own shares                     (20)                (14)
Net cash (outflow) from financing                      (20)               (14)
Decrease in cash                                      (435)            (3,280)

Reconciliation of net cash flow to                     2000               1999
movement in net funds
                                                      £'000              £'000
Decrease in cash during the year                      (435)            (3,280)
Net funds at 1 January 2000                           1,249              4,529
Net funds at 31 December 2000                           814              1,249

PRO-FORMA STATEMENT OF TOTAL RETURN FOR YEAR ENDED 31 DECEMBER 2000

A pro forma statement of total return in the form set out in the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies' is
shown below for the information of the shareholders.

                                Year ended                    Year ended
                               31 December                   31 December
                                      2000                          1999
                     Revenue     Capital    Total  Revenue    Capital     Total
                       £'000       £'000    £'000    £'000      £'000     £'000
(Losses)/ gains on         -     (1,899)   (1,899)       -      4,697     4,697
investments
Income                   711          -        711     837          -       837
Investment              (72)       (216)     (288)    (59)      (177)     (236)
management fees
Other expenses         (248)           -     (248)   (217)          -     (217)
Return on ordinary       391     (2,115)   (1,724)     561      4,520     5,081
activities before
tax
Tax on ordinary         (74)          43      (31)   (155)         54     (101)
activities
Return attributable      317     (2,072)   (1,755)     406      4,574     4,980
to equity
shareholders
Dividends in respect   (302)     (1,514)   (1,816)   (379)          -     (379)
of equity
shareholders
Transfer to/ (from)       15     (3,586)   (3,571)      27      4,574     4,601
reserves
Return per ordinary     2.1p     (13.7)p   (11.6)p    2.7p      30.2p     32.9p
share                                           

The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 December 2000. The
statutory accounts for the year ended 31 December 2000 will be finalised on
the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.



The financial information for the year ended 31 December 1999 is derived from
the statutory accounts for that year which have been delivered to the Register
of Companies.  The auditors reported on those accounts; this report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.

A copy of the full annual report and financial statements for the year ended
31 December 2000 will be printed and posted to shareholders. Copies will also
be available to the public at the registered office of the company at 69
Eccleston Square, London SW1V 1PJ.