Information  X 
Enter a valid email address

Downing Three VCT (DP3F)

  Print      Mail a friend

Thursday 30 April, 2020

Downing Three VCT

Downing THREE VCT plc - Annual Financial Report

Downing THREE VCT plc - Annual Financial Report

DOWNING THREE VCT PLC
FINAL RESULTS FOR THE YEAR 31 DECEMBER 2019

LEI: 2138008V2JDU2K6ZHF80

FINANCIAL HIGHLIGHTS

  Unaudited
31 Mar 2020
  Audited
31 Dec 2019
  Audited
 31 Dec
2018
  Pence   Pence   Pence
‘F’ Share pool          
Net asset value per ‘F’ Share 21.3   24.5   28.4
Cumulative distributions per ‘F’ Share 72.0   72.0   67.0
Total Return per ‘F’ Share 93.3   96.5   95.4
           
‘H’ Share pool          
Net asset value per ‘H’ Share 22.3   33.2   51.3
Cumulative distribution per ‘H’ Share 35.0   35.0   25.0
Total Return per ‘H’ Share 57.3   68.2   76.3
           
‘J’ Share pool          
Net asset value per ‘J’ Share 43.8   50.3   88.9
Cumulative distribution per ‘J’ Share 5.0   5.0   -
Total Return per ‘J’ Share 48.8   55.3   88.9

CHAIRMAN’S STATEMENT

Introduction
I write this statement during a time when the world is experiencing unprecedented conditions as a result of the coronavirus pandemic. At this time, it is not clear exactly what the full extent of the impact on the UK and global economies will be, although it is inevitable that it will be substantial.

In line with its strategy, your Company has built investment portfolios focused around a number of sectors including leisure and hospitality. It is clear that many of the businesses in these sectors will be badly affected by the Coronavirus pandemic lockdown in the UK. Unfortunately, this will result in reduced investment valuations and increased challenges in exiting from these investments.

This report includes the audited results for the year ended 31 December 2019, a period prior to the coronavirus pandemic. In order to provide Shareholders with a more up to date picture, the Company has also prepared unaudited investment valuations to 31 March 2020, based of the best information the Board and Manager have at the current time.

A brief summary of each share pool is provided below. More detailed reviews are provided in the Investment Manager’s Report and Review of Investments.

‘F’ Share pool
The ‘F’ Share pool was launched in 2012 and now holds a portfolio of nine investments with a total value of £2.4 million.

At 31 December 2019, the ‘F’ Share NAV stood at 24.5p, which represents an increase of 3.9% over the year after adjusting for the dividends of 5.0p per share paid in the year. Dividends paid to date total 72.0p per share such that Total Return (NAV plus cumulative dividends to date) is now 96.5p, compared to the initial cost to original subscribers net of income tax relief of 70.0p.

At 31 March 2020, the unaudited net asset value has fallen to 21.3p per share, resulting in a Total Return of 93.3p per share. The ‘F’ Share pool has commenced the process of realising its investments and returning funds to investors. Plans for further realisation have however been severely disrupted by the pandemic. The Company will update ‘F’ Shareholders when there is firm news to report.

‘H’ Share pool
The ‘H’ Share pool was launched in 2014 and the task of building the initial VCT qualifying portfolio is now complete. At 31 December 2019, the pool held 11 investments with a total value of £3.8 million.

At 31 December 2019, the ‘H’ Share NAV stood at 33.2p, which represents a decrease over the year of 15.8% after adjusting for the dividends of 10.0p per share paid in the year. Total Return (NAV plus cumulative dividends to date) is now 68.2p, compared to the initial NAV, before income tax relief, of 100.0p (or original cost, net of income tax relief, which was typically between 70.0p and 75.0p, depending on costs). Major provisions have been required against several of the Share pool’s investments, accounting for most of the fall in value.

With the share class still heavily exposed to the pub and hospitality sector, further falls in value have been experienced as the impact of the Coronavirus pandemic has started to become clearer. At 31 March 2020, the unaudited net asset value was 22.3p per share, resulting in a Total Return of 57.3p per share. The ‘H’ Share pool has also commenced the process of realising its investments and returning funds to investors after passing its five year anniversary at the end of 2019. However, plans for further realisations have been severely disrupted by the pandemic. The Company will update ‘H’ Shareholders when there is firm news to report.

J ’ Share pool
The ‘J’ Share Pool was launched in December 2014 and the majority of these funds have now been invested as at the year end. At 31 December 2019, the pool held 13 investments with a total value of £3.5 million. The ‘J’ Share pool suffered from some major problems in a number of portfolio companies towards the end of 2019, resulting in the NAV and Total Return falling.

At 31 December 2019, the ‘J’ Share NAV stood at 50.3p, which represents a decrease over the year of 37.8% after adjusting for the dividends of 5.0p per share paid in the year. Total Return (NAV plus cumulative dividends to date) is now 55.3p, compared to the initial NAV, before income tax relief, of 100.0p (or original cost, net of income tax relief, of 70.0p and 75.0p, depending on costs). Major provisions have been required against several of the share pool’s investments, accounting for most of the fall in value.

Much of the share pool’s value is now held in a children’s nursery and a wedding venue. The pandemic has created significant uncertainty for these businesses. At 31 March 2020, the unaudited NAV was 43.8p per share, giving a Total Return of 48.8p per share. Despite the bad news, the J Share is able to continue with its dividend policy. The Company will pay a dividend of 2.5p per ‘J’ Share on 19 May 2020 to shareholders on the register at 24 April 2020. This will be paid as an interim dividend in respect of the year ended 31 December 2019.

Share buybacks
As announced in June 2019, the Company is now unlikely to make any further purchases of any of its shares as the process of returning funds to all groups of Shareholders is progressing.

No share buybacks in respect of any share class were undertaken during the period.

A resolution to renew the buyback authority will however be proposed at the next Annual General Meeting to ensure the Company has flexibility.

Annual General Meeting (“AGM”)
As Shareholders will be aware, there are currently major challenges to holding physical Annual General Meetings under the effective lockdown conditions.  The Board is aware that this topic is being discussed by the various relevant authorities and believes that practical solutions will become clear in due course. The Board will monitor developments and will make arrangements to hold this year’s AGM once it is practical to do so.  The Company will send a notice of the AGM to all Shareholders at that time.

Future of the Company
As a planned exit VCT, the Board notes that the existing share classes are working towards returning funds to Shareholders and there are no plans for the Company to raise new funds or create any new share classes. The Board is therefore reviewing the future plans of the Company and may consider taking advantage of the VCT Winding Up Regulations, which involve the Company going into voluntary liquidation. This would allow the Company to reduce running costs while it works on exiting from investments. Any developments to this end will be communicated with Shareholders in due course and would require Shareholder approval.

Outlook
As with so many businesses, the coronavirus pandemic has created major challenges and uncertainty for many of our portfolio companies, especially as the Company typically invests in sectors which are particularly heavily exposed to the effects of the lockdown. The Investment Manager is working to support and assist all the businesses to ensure that they all take advantage of Government support that has been made available and make sensible business decisions in this stressful time. We aim to have the businesses as well placed as they can be to survive these extreme conditions and recover when the effects of the pandemic start to subside.

There is however downside risk in many of the investment valuations and the timing of exits from any investments cannot be reliably estimated at this time.

I will update Shareholders on progress in my statement with the Half Yearly Report to 30 June 2020.

Michael Robinson
Chairman
30 April 2020

INVESTMENT MANAGER’S REPORT- ‘F’ SHARE POOL

Introduction
The ‘F’ Share pool holds nine investments and is fully invested in a portfolio focussed on asset backed businesses and those with predictable revenue streams. The focus for the year continues to be on realisations and maximising Shareholder returns.

Net asset value and results
At 31 December 2019, the ‘F’ Share NAV stood at 24.5p. This represents a net increase of 1.1p per share over the year (after adjusting for dividends paid during the year of 5.0p per Share), equivalent to an increase of 3.9%. Total Return (NAV plus cumulative dividends to date) for Shareholders who invested in the original share offer is now 96.5p.

The gain on ordinary activities for the ‘F’ Share pool for the year was £114,000 (2018: loss of £451,000), being a revenue gain of £14,000 (2018: loss £21,000) and a capital gain of £100,000 (2018: loss £430,000).

‘F’ Share pool - Investment activity
During the year, total proceeds of £716,000 were received from one full exit in Lambridge Solar Limited, the owner of commercial solar arrays in Lincolnshire. The exit generated a total gain over opening value of £111,000. As the pool is in its realisation phase, there were no new investments made during the period.

Plans were in place for the exit of the remaining portfolio companies. However, Shareholders should note that due to current market conditions and the global pandemic, this may now take longer than originally anticipated.

‘F’ Share pool – Portfolio valuation
The majority of investments remain valued at or above cost and there were several valuation movements in the period. This generated a small decrease in valuation over opening value of £11,000.

The most notable increase in the period related to Baron House Developments LLP, a company created to fund the purchase of a property outside Newcastle station, which qualifies under the BPRA scheme. At the period end, the investment value was uplifted by £192,000 following improved trading and an uplift in the value of the hotel site.

There were a number of small write downs at the period end that contributed to the valuation decrease during the period.

The largest decreases in valuation related to the Antic portfolio of investments, including, Pearce and Saunders Limited, Pearce and Saunders DevCo Limited and Atlantic Dogstar Limited.

Pearce and Saunders Limited, the owner of freehold pubs in south east London, and Pearce and Saunders DevCo Limited, the owner of development land at the rear of one of the freehold pub sites owned by Pearce and Saunders Limited, were decreased by £121,000 and £44,000 respectively, in line with expected exit proceeds.

Apex Energy Limited, the developer of a standby electricity generation plant in the East Midlands, was further reduced in value by £83,000 in line with preliminary exit proceeds.

Outlook
Focus for the ‘F’ Share pool remains on the realisation of its investments, with plans for the exit of the final investments now being delayed due to the coronavirus pandemic. Shareholders should note, as a result of the current global economy and effective lockdown in the UK, valuations post year end have been impacted and a number of provisions have been made. At 31 March 2020, the unaudited net asset value has fallen to 21.3p, resulting in a total return of 93.3p. We shall look to provide as much support as possible during this time to all investee companies and suggest, where possible, the extensive government schemes that are available.

Downing LLP
30 April 2020

REVIEW OF INVESTMENTS – ‘F’ SHARE POOL

Portfolio of investments
The following investments, all of which are incorporated in England and Wales, were held at 31 December 2019:

‘F’ Share pool  

Cost


Valuation
Valuation
 movement
in year
 
% of
portfolio
   £’000  £’000 £’000  
         
VCT qualifying and partially qualifying investments        
Downing Pub EIS One Limited 490 656 36 25.0%
Pearce and Saunders Limited 497 550 (121) 21.0%
Atlantic Dogstar Limited 200 258 (12) 9.9%
Fresh Green Power Limited 189 231 21 8.8%
Green Energy Production UK Limited 100 54 - 2.1%
Apex Energy Limited 1,000 17 (83) 0.6%
  2,476 1,766 (159) 67.4%
Non-qualifying investments        
Baron House Developments LLP 481 673 192 25.6%
Pearce and Saunders DevCo Limited 46 2 (44) 0.1%
London City Shopping Centre Limited 66 - - 0.0%
  593 675 148 25.7%
         
  3,069 2,441 (11) 93.1%
         
Cash at bank and in hand   181   6.9%
         
Total investments   2,622   100.0%

Summary of investment movements

Disposals

   
Cost

MV at  01/01/19
 
Disposal
proceeds
  Gain
against
cost
  Total realised
gain during  the year
  £’000 £’000   £’000   £’000   £’000
VCT qualifying investments  
Lambridge Solar Limited 500   605   716   216   111
                   
Total ‘F’ Share pool 500   605   716   216   111

INVESTMENT MANAGER’S REPORT- ‘ H ’ SHARE POOL

The ‘H’ Share pool raised funds in 2014 and the task of building the initial VCT qualifying portfolio is now complete. The share pool reached its five year anniversary at the end of 2019 and focus now shifts to the realisation of the share pool in order to return funds to shareholders. It is disappointing to report that the ‘H’ Share pool has suffered heavily from difficulties in several of its investments. The further required write downs have had a significant negative impact on Total Return over the year.

Net asset value and results
At 31 December 2019, the net asset value per ‘H’ Share was 33.2p. This represents a net decrease of 8.1p per Share over the year (after adjusting for dividends paid during the year of 10.0p per share), equivalent to a decrease of 15.8%. Total Return (NAV plus cumulative dividends to date) for Shareholders who invested in the original share offer is now 68.2p.

The loss on ordinary activities for the ‘H’ Share pool for the year was £1.1 million (2018: £3.5 million) being a revenue profit of £132,000 (2018: £194,000) and a capital loss of £1.2 million (2018: £3.7 million).

Investment activity

With the task of building the initial VCT qualifying portfolio complete, no new investments were made in the period. Two full exits completed during the period generating total proceeds of £1.5 million.

Proceeds of £515,000 were generated from the sale of Antelope Pub Limited, which owns a pub of the same name in Tooting, London. This represented a gain over cost of £15,000.

In addition, Hedderwick Limited, the owner of two freehold pubs located in Royston, Hertfordshire and Olney, Milton Keynes, was successfully exited during the year and generated proceeds of £1.0 million. This represented a gain over cost of £143,000.

‘H’ Share pool – Portfolio valuation
The period to 31 December 2019 has seen a number of disappointing developments, resulting in an unrealised loss of £1.3 million.

The most notable decreases come from the Indian Solar portfolio of investments which include Ironhide Generation Limited, Indigo Generation Limited, SF Renewables Limited and Rockhopper Renewables Limited, which contributed over £1.1 million of the total unrealised loss.

Indigo Generation Limited and Ironhide Generation Limited are both developing solar farms on adjacent land in India. Due to a combination of factors, each investment has been reduced in value at the period end. One of the main factors affecting the sites is the private Power Purchase Agreement (“PPA”) market in the region of India that has been particularly affected by reductions in long term PPA terms, as a result of high inflation levels. Construction of the first phase of each site has now been completed at the year end and grid connections have been secured. However, the second phase of the build programme is currently behind schedule. As a result, a provision of £399,000 has been required against each investment.

Rockhopper Renewables Limited, which operates a single ground-mounted solar farm in Telagana has also suffered as a result of the above issues to the Indian solar portfolio. In addition, there is further uncertainty over whether a permit will be granted to enter into private PPAs due to the state authorities delaying these permits unlawfully. As a result, the valuation of the investment has been reduced by £246,000.

Apex Energy Limited, the developer of a standby electricity generation plant in the East Midlands, was further reduced in value by £108,000 in line with preliminary expected exit proceeds.

Outlook
The falls in value experienced by the ‘H’ Share pool are extremely disappointing. We have dedicated substantial resources to the portfolio companies in question in seeking to address the issues and are developing plans to recover as much value as possible for investors.

Regrettably, the Coronavirus pandemic has further hit valuations after the year end. Following a review, it is clear that adjustments have been required to the valuations of the pub and hospitality related investments. As at 31 March 2020, the unaudited net asset value has fallen to 22.3p, resulting in a total return of 57.3p. In addition, the plans for exiting the investments have been impacted and it is unclear currently when further exits will be achieved. We are providing as much support as possible to all investee companies during this difficult time, seeking to position them as well as we can to facilitate an exit when conditions improve.

Downing LLP
30 April 2020

REVIEW OF INVESTMENTS – ‘H’ SHARE POOL

Portfolio of investments
The following investments, all of which are incorporated in England and Wales, were held at 31 December 2019:


‘H’ Share pool  

Cost
 

Valuation
Valuation
 movement
in year

% of
portfolio
   £’000  £’000 £’000  
         
VCT qualifying investments and partially qualifying investments        
Atlantic Dogstar Limited 1,000 1,292 (58) 31.7%
Quadrate Catering Limited 850 701 - 17.2%
SF Renewables (Solar) Limited 281 253 (70) 6.2%
Rockhopper Renewables Limited 492 246 (246) 6.0%
Hermes Wood Pellets Limited 1,500 228 - 5.6%
Ironhide Generation Limited 613 215 (399) 5.3%
Indigo Generation Limited 613 215 (399) 5.3%
Pearce and Saunders Limited 193 193 - 4.7%
Zora Energy Renewables Limited 1,000 90 (13) 2.2%
Apex Energy Limited 1,300 22 (108) 0.5%
  7,842 3,455 (1,293) 84.7%
         
Non-qualifying investments        
Quadrate Spa Limited 850 392 - 9.6%
  850 392 - 9.6%
         
  8,692 3,847 (1,293) 94.3%
         
Cash at bank and in hand   233   5.7%
         
Total investments   4,080   100.0%

Summary of investment movements

Disposals

   
Cost
 
MV at  01/01/19
  Disposal
proceeds
  Gain
against
cost
  Total realised
gain during  the year
  £’000   £’000   £’000   £’000   £’000
VCT qualifying and partially qualifying
investments
                 
Antelope Pub Limited 500   500   515   15   15
                   
Non-qualifying investments                  
Hedderwick Limited 875   945   1,018   143   73
                   
  1,375   1,445   1,533   158   88

INVESTMENT MANAGER’S REPORT- ‘J’ SHARE POOL

Introduction
The fundraising for the ‘J’ Share pool was launched in December 2014 and raised £11 million prior to closing in 2015. The majority of these funds have now been invested as at the year end. It is disappointing to report that during the period, the share pool suffered some significant provisions in respect of a number of investments.

Net asset value and results
At 31 December 2019, the net asset value and total return per ‘J’ Share was 50.3p. This represents a net decrease of 33.6p per Share over the year (after adjusting for dividends paid during the year of 5.0p per Share), equivalent to a decrease of 37.8%. Total Return (NAV plus cumulative dividends to date) for Shareholders who invested in the original offer is now 55.3p.

The loss on ordinary activities for the ‘J’ Share, after taxation, for the period was £3.6 million (2018: £617,000), being a revenue loss of £25,000 (2018: £86,000) and a capital loss of £3.6 million (2018: loss of £531,000).

‘J’ Share pool - Investment activity

During the period, no new investments were made, with there being three full exits generating an overall gain over cost in the period of £7,000.

Proceeds of £61,000 were received from the exit of Snow Hill Developments LLP, representing a gain over cost of £18,000. In addition, the residual holding in Mosaic Spa and Health Clubs Limited, the provider of gym and spa management services, was exited at the end of the summer, generating minor loss over cost of £11,000.

There was also a loan note redemption in Hedderwick Limited, the owner of freehold pubs located in Royston, Hertfordshire and Olney, Milton Keynes, which was redeemed at par.

‘J’ Share pool – portfolio valuation
The period to 31 December 2019 has seen a number of disappointing developments, resulting in an unrealised loss of £3.6 million.

A significant portion of the unrealised loss for the year related to five investments. Further details on each is noted below.

The most notable decreases related to Jito trading Limited and Yamuna Renewables Limited, which were written down by £1.0 million and £800,000 respectively. As noted in the half year accounts, Yamuna Renewables Limited, a wood pelleting plant in Gars am Kamp, Austria was reduced to nil due to a number of factors.

Consumer demand at the site substantially reduced following warmer than expected weather, in addition to two serious fires at the facility which resulted in a halt to production. As the company has some borrowings, it is difficult to recover any value and as a result the investment has been fully provided against.

The problems encountered at Yamuna have resulted in consequential problems with Jito Trading Limited, the operator of another wood pelleting plant in Weitra, Austria, who share the same management team. As a result, an advisor has been appointed to sell the business. However, as the company has borrowings, it is not expected that a sale based on the current offers would recover any value for the equity shareholders, including the ‘J’ Share pool.

Ormsborough Limited, the owner of several pubs and restaurants in Yorkshire, has been reduced to nil at the period end following the sale of the company that resulted in nil value for equity shareholders. The company has since gone into liquidation and as a result a full provision has been recognised.

Indigo Generation Limited and Ironhide Generation Limited are both developing solar farms on adjacent land in India. Due to a combination of factors, each investment has been reduced in value at the period end. One of the main factors affecting the sites is the private Power Purchase Agreements (“PPA”) market in this region of India that has been particularly affected by reductions in long term PPA terms, as a result of high inflation levels. Construction of the first phase of each site has now been completed at the year end and grid connections have been secured. However, the second phase of the build programme is currently behind schedule. As a result, a write down of £398,000 has been required against each investment.

Outlook
The falls in value experienced by the ‘J’ Share pool during the year are extremely disappointing. We have dedicated substantial resources to address the issues of the affected companies. Since the year end, the coronavirus pandemic has further impacted the portfolio. Children’s nurseries and wedding venues are clearly businesses that are suffering heavily from the lockdown and provisions have been made accordingly. The unaudited net asset value as at 31 March 2020 was 43.8p per share, and Total Return of 48.8p per share. Plans to exit the investments will be reformulated when conditions allow. In the meantime, we will be working to support all portfolio companies, ensuring that they benefit from Government aid that is available and take sensible decisions as they deal with these unprecedented conditions.

Downing LLP
30 April 2020

REVIEW OF INVESTMENTS – ‘J’ SHARE POOL

Portfolio of investments
The following investments, all of which are incorporated in England and Wales, were held at 31 December 2019:



‘J’ Share pool
Cost

Valuation
Valuation
 movement
in year

% of
portfolio
   £’000  £’000 £’000  
         
VCT qualifying investments and partially qualifying investments        
Pilgrim Trading Limited 1,297 1,297 - 24.7%
Exclusive Events Venues Limited 500 500 - 9.5%
Garthcliff Shipping Limited 400 400 - 7.6%
SF Renewables (Solar) Limited 281 253 (71) 4.8%
Rockhopper Renewables Limited 492 246 (246) 4.7%
Indigo Generation Limited 613 215 (398) 4.1%
Ironhide Generation Limited 613 215 (398) 4.1%
Zora Energy Renewables Limited 300 27 (5) 0.5%
Jito Trading Limited 1,000 - (1,000) 0.0%
Yamuna Renewables Limited 800 - (800) 0.0%
Ormsborough Limited 1,000 - (688) 0.0%
  7,296 3,153 (3,606) 60.0%
         
Non-qualifying investments        
Fenkle Street LLP 287 317 22 6.1%
London City Shopping Centre Limited 15 - - 0.0%
  302 317 22 6.1%
         
  7,598 3,470 (3,584) 66.1%
         
Cash at bank and in hand   1,779   33.9%
         
Total investments   5,249   100.0%

Summary of investment movements

   

Cost
 

MV at  01/01/19
   
Disposal
proceeds
  Gain/
(loss)
against
cost
  Total realised
gain during  the year
  £’000 £’000   £’000   £’000   £’000
                   
VCT qualifying and partially qualifying investments                
Mosaic Spa and Healthclubs Limited 24   26   13   (11)   (13)
                   
Non-qualifying investments                  
Snow Hill Developments LLP 43   43   61   18   18
Hedderwick Limited 375   375   375   -   -
                   
Total ‘J’ Share pool 442   444   449   7   5

Directors’ responsibilities statement
The Directors are responsible for preparing the Strategic Report, 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 judgements 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, 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 and 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 annual reports may differ from legislation in other jurisdictions.

Statement as to disclosure of information to Auditor
The Directors in office at the date of the report have confirmed, as far as they are aware, that there is no relevant audit information of which the Auditor is unaware. Each of the Directors has confirmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the Auditor.

INCOME STATEMENT
for the year ended 31 December 2019


 
  Year ended 31 December 2019   Year ended 31 December 2018
     

Revenue
 

Capital
 

Total
   

Revenue
 

Capital
 

Total
  £’000 £’000 £’000   £’000 £’000 £’000
                 
Income   654 16 670   885 32 917
                 
Loss on investments   - (4,684) (4,684)   - (4,677) (4,677)
    654 (4,668) (4,014)   885 (4,645) (3,760)
                 
Investment management fees   (307) - (307)   (430) - (430)
                 
Other expenses   (250) - (250)   (256) - (256)
                 
(Loss)/return on ordinary activities before tax
97

(4,668)

(4,571)
 
199

(4,645)

(4,446)
                 
Tax on total comprehensive income and ordinary activities    

24
 

-
24  

 
 

(112)
 

-
 

(112)
                 
(Loss)/return for the year attributable to equity shareholders
121

(4,668)

(4,547)
 
87

(4,645)

(4,558)
                 
Basic and diluted (loss)/return per:              
‘F’ Share   0.1p 0.9p 1.0p   (0.2p) (4.0p) (4.2p)
‘H’ Share   1.0p (9.0p) (8.0p)   1.5p (27.6p) (26.1p)
‘J’ Share   (0.2p) (33.4p) (33.6p)   (0.8p) (5.0p) (5.8p)

All Revenue and Capital items in the above statement are derived from continuing operations. No operations were acquired or discontinued during the year. The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards (“FRS 102”). The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 and updated February 2018 by the Association of Investment Companies (“AIC SORP”).

Other than revaluation movements arising on investments held at fair value through profit and loss, there were no differences between the return/loss as stated above and historical cost.

INCOME STATEMENT (ANALYSED BY SHARE POOL)
for the year ended 31 December 2019

‘F’ Share pool


 
  Year ended 31 December 2019   Year ended 31 December 2018
         
    Revenue Capital Total   Revenue Capital Total
  £’000 £’000 £’000   £’000 £’000 £’000
                 
Income   105 - 105   172 - 172
Gain/(loss) on investments   - 100 100   - (430) (430)
    105 100 205   172 (430) (258)
Investment management fees   (49) - (49)   (98) - (98)
Other expenses   (52) - (52)   (68) - (68)
Return/(loss) on ordinary activities before tax
4
100 104  
6

(430)

(424)
Tax on total comprehensive income and ordinary activities   10  

-
10    

(27)
 

-
 

(27)
Return/(loss) attributable to equity shareholders     14 100 114  
(21)

(430)

(451)

‘H’ Share pool


 
  Year ended 31 December 2019   Year ended 31 December 2018
         
    Revenue Capital Total   Revenue Capital Total
  £’000 £’000 £’000   £’000 £’000 £’000
                 
Income   382 - 382   515 - 515
(Loss)/gain on investments   - (1,205) (1,205)   - (3,684) (3,684)
    382 (1,205) (823)   515 (3,684) (3,169)
Investment management fees   (131) - (131)   (169) - (169)
Other expenses   (91) - (91)   (105) - (105)
(Loss)/return on ordinary activities before tax 160 (1,205) (1,045)  
241

(3,684)

(3,443)
Tax on total comprehensive income and ordinary activities   (28) - (28)    

(47)
 

-
 

(47)
Loss/(return) attributable to equity shareholders     132 (1,205) (1,073)  
194

(3,684)

(3,490)

‘J’ Share pool


 
  Year ended 31 December 2019   Year ended 31 December 2018
         
    Revenue Capital Total   Revenue Capital Total
  £’000 £’000 £’000   £’000 £’000 £’000
                 
Income   167 16 183   198 32 230
(Loss)/gain on investments   - (3,579) (3,579)   - (563) (563)
    167 (3,563) (3,396)   198 (531) (333)
Investment management fees   (127) - (127)   (163) - (163)
Other expenses   (107) - (107)   (83) - (83)
(Loss)/return on ordinary activities before tax (67) (3,563) (3,630)  
(48)

(531)

(579)
Tax on total comprehensive income and ordinary activities   42 - 42    

(38)
 

-
 

(38)
(Loss)/return attributable to equity shareholders     (25) (3,563) (3,588)  
(86)

(531)

(617)

BALANCE SHEET

as at 31 December 2019


 
  2019   2018
  £000   £000
Fixed assets        
Investments   9,758   17,140
         
Current assets        
Debtors   678   779
Cash at bank and in hand   2,193   1,762
    2,871   2,541
 

Creditors: amounts falling due within one year
  (164)   (255)
         
Net current assets   2,707   2,286
         
Net assets   12,465   19,426
         
Capital and reserves        
Called up share capital   35   35
Capital redemption reserve   149   149
Special reserve   23,726   25,206
Revaluation reserve   (6,932)   (4,748)
Capital reserve – realised   (4,447)   (1,029)
Revenue reserve   (66)   (187)
         
Total equity shareholders’ funds   12,465   19,426
         
Basic and diluted net asset value per Share:        
‘F’ Share   24.5p   28.4p
‘H’ Share   33.2p   51.3p
‘J’ Share   50.3p   88.9p

The financial statements were approved and authorised for issue by the Board of Directors on 30 April 2020 and were signed on its behalf by:

Michael Robinson
Chairman
Company number: 5334413

BALANCE SHEET (ANALYSED BY SHARE POOL)

as at 31 December 20 19

‘F’ Shares


 
  2019   2018
  £000   £000
Fixed assets        
Investments   2,441   3,057
Current assets        
Debtors   69   55
Cash at bank and in hand   181   31
    250   86
Creditors: amounts falling due within one year   (45)   (70)
Net current assets   205   16
Net assets   2,646   3,073
         
Capital and reserves        
Called up share capital   11   11
Capital redemption reserve   149   149
Special reserve   3,903   4,229
Revaluation reserve   (771)   (721)
Capital reserve – realised   (1,099)   (1,033)
Revenue reserve   453   438
Total equity shareholders’ funds   2,646   3,073

‘H’ Shares


 
  2019   2018
  £000   £000
Fixed assets        
Investments   3,847   6,586
Current assets        
Debtors   451   284
Cash at bank and in hand   233   103
    684   387
Creditors: amounts falling due within one year   (83)   (111)
Net current assets   601   276
Net assets   4,448   6,862
         
Capital and reserves        
Called up share capital   13   13
Special reserve   8,905   10,086
Revaluation reserve   (4,847)   (3,483)
Revenue reserve   377   246
Total equity shareholders’ funds   4,448   6,862

‘J’ Shares


 
  2019   2018
  £000   £000
Fixed assets        
Investments   3,470   7,497
Current assets        
Debtors   158   440
Cash at bank and in hand   1,779   1,628
    1,937   2,068
Creditors: amounts falling due within one year   (36)   (74)
Net current assets   1,901   1,994
Net assets   5,371   9,491
         
Capital and reserves        
Called up share capital   11   11
Special reserve   10,918   10,891
Revaluation reserve   (1,314)   (544)
Capital reserve – realised   (3,348)   4
Revenue reserve   (896)   (871)
Total equity shareholders’ funds   5,371   9,491

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2019

  Called up share
capital
Capital
redemption
reserve
Special
reserve
Share
premium
reserve
Revaluation
reserve
Capital
reserve
- realised
Revenue
reserve
Total
  £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
                 
At 1 January 2018 60 124 5,146 24,639 1 (1,039) (239) 28,692
Total comprehensive income - - - - (5,079) 434 87 (4,558)
Share premium cancellation - - 24,639 (24,639) - - - -
Transactions with owners                
Purchase of own shares - - - - - - (35) (35)
Transfer between
  Reserves*
- - (4,579) - 330 4,249 - -
Cancellation of shares (25) 25 - - - - - -
Dividends paid - - - - - (4,673) - (4,673)
At 31 December 2018 35 149 25,206 - (4,748) (1,029) (187) 19,426
Total comprehensive income - - - - (4,888) 220 121 (4,547)
Realisation of impaired valuations - - - - 2,881 (2,881) - -
Transactions with owners                
Transfer between
  Reserves*
- - (1,480) - (177) 1,657 - -
Dividends paid - - - - - (2,414) - (2,414)
At 31 December 2019 35 149 23,726 - (6,932) (4,447) (66) 12,465
                   

* A transfer of £177,000 (2018: £330,000) representing previously recognised unrealised gains/losses on disposal of investments during the year ended 31 December 2019 has been made from the Revaluation Reserve to the Capital Reserve-realised. A transfer of £1.7 million (2018: £4.2 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.

CASH FLOW STATEMENT
for the year ended 31 December 2019

    Year ended 31 December 2019
 

 
  ‘F’
Share
pool
‘H’
Share pool
‘J’
 Share pool
 
Total
  £’000 £’000 £’000 £’000
Net cash (outflow)/inflow from operating activities   (25) (64) 236 147
             
Cash flow from investing activities            
Proceeds from sale of investments     716 1,533 449 2,698
Net cash inflow from investing activities 716 1,533 449 2,698
             
Net cash inflow before financing activities   691 1,469 685 2,845
             
Cash flows from financing activities            
Equity dividends paid   (541) (1,339) (534) (2,414)
Net cash outflow from financing activities   (541) (1,339) (534) (2,414)
             
(Decrease)/increase in cash     150 130 151 431
Cash and cash equivalents at start of year     31 103 1,628 1,762
Cash and cash equivalents at end of year     181 233 1,779 2,193
             
Cash and cash equivalents comprise            
Cash at bank and in hand     181 233 1,779 2,193
Total cash and cash equivalents     181 233 1,779 2,193
             


    Year ended 31 December 2018
 

 
    ‘F’
Share
pool
‘H’
Share pool
‘J’
 Share pool
Total
      £’000 £’000 £’000 £’000
Net cash (outflow)/inflow from operating activities     9 28 (382) (345)
               
Cash flow from investing activities              
Purchase of investments       - - (375) (375)
Proceeds from sale of investments       1,964 632 661 3,257
  Net cash inflow from investing activities     1,964 632 286 2,882
               
Net cash inflow/(outflow) before financing activities     1,973 660 (96) 2,537
               
Cash flows from financing activities              
Equity dividends paid     8 (4,004) (669) - (4,673)
Purchase of own shares       - (16) (19) (35)
Net cash outflow from financing activities     (4,004) (685) (19) (4,708)
               
(Decrease)/increase in cash       (2,031) (25) (115) (2,171)
Cash and cash equivalents at start of year       2,062 128 1,743 3,933
Cash and cash equivalents at end of year       31 103 1,628 1,762
               
Cash and cash equivalents comprise              
Cash at bank and in hand       31 103 1,628 1,762
Total cash and cash equivalents       31 103 1,628 1,762
               

NOTES TO THE ACCOUNTS
for the year ended 31 December 2019

1. General information

Downing THREE VCT plc (“the Company”) is a venture capital trust established under the legislation introduced in the Finance Act 1995 and is domiciled in the United Kingdom and incorporated in England and Wales, and its registered office is St. Magnus House, 3 Lower Thames Street, London, EC3R 6HD.

2. Accounting policies

Basis of accounting
The Company has prepared its financial statements under FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and in accordance with the Statement of Recommended Practice (“SORP”) for investment trust companies and venture capital trusts issued by the Association of Investment Companies (“AIC”) in November 2014 and updated February 2018 as well as the Companies Act 2006.

The financial statements are presented in Sterling (£) and rounded to thousands.

Going concern
After reviewing the Company’s forecasts and projections, the Directors have a reasonable expectation that the major cash outflows of the Company (most notably investments, share buybacks and dividends) are within the Company’s control and therefore the Company has sufficient cash to meet its expenses and liabilities when they fall due. As such, the Board confirms that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

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 return on ordinary activities 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. The fair value of an investment upon acquisition is deemed to be cost. Thereafter investments are measured at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines (“IPEV”) together with FRS 102 sections 11 and 12.

For unquoted investments, fair value is established 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.

All investments are held at the price of recent investment for an appropriate period where there is considered to have been no change in fair value. Where this basis is no longer considered appropriate, the following factors will be considered:
- Where a value is demonstrated by a material arms-length transaction by an independent third party in the shares of a company, this value may be used;
- In the absence of the above, depending on each of the subsequent trading performance and investment structure of an investee company, the valuation basis will likely move to either:
i) an earnings multiple basis; or
ii) where a company’s underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate.
- Premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable;
- Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow, a net asset valuation, or industry specific valuation benchmarks may be applied.

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, 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 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 FRS 102 sections 14 and 15 that does not require portfolio investments, where the interest held is greater than 20%, 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. 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 the policy of allocating Investment Manager’s fees 100% as revenue.
- Expenses and liabilities not specific to a share class are generally allocated pro rata to the net assets.
- Performance incentive fees arising from the disposal of investments are deducted as a capital item.

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

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 year.

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 arise.

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 financial statements. Deferred taxation is not discounted.

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 revenue reserve account for the relevant share class.

Significant estimates and judgements
Disclosure is required of judgements and estimates made by management in applying the accounting policies that have a significant effect on the financial statements. The area involving a higher degree of judgement and estimates is the valuation of unquoted investments as explained in the investment accounting policy.

3. Basic and diluted return per share

        ‘F’ Shares ‘H’ Shares ‘J’ Shares
             
Revenue return/(loss) (£’000)       14 132 (25)
Per share (pence)       0.1p 1.0p (0.2p)
             
Net capital gain/(loss) for the year (£’000)   100 (1,205) (3,563)
Per share (pence)       0.9p (9.0p) (33.4p)
             
Total gain/(loss) after taxation (£’000)   114 (1,073) (3,588)
Per share (pence)   1.0p (8.0p) (33.6p)
             
Weighted average number of shares in issue   10,821,660 13,389,758 10,675,533

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

4. Basic and diluted net asset value per share

    2019 2018
  Shares in issue   Net asset value Net asset value
  31 Dec 2019 31 Dec 2018 per share £’000  per share £’000
                     
‘F’ Shares 10,821,660 10,821,660   24.5p   2,646   28.4p   3,073
‘H’ shares 13,389,758 13,389,758   33.2p   4,448   51.3p   6,862
‘J’ Shares 10,675,533 10,675,533   50.3p   5,371   88.9p   9,491
            12,465       19,426

The ‘F’ Share pool, ‘H’ Share pool and ‘J’ Share pool are treated as separate investment pools.

5. Principal risks
The Company’s financial instruments comprise investments held at fair value through profit and loss, being equity and loan stock investments in unquoted companies, loans and receivables consisting of short term debtors, cash deposits and financial liabilities, being creditors arising from its operations. The main purpose of these financial instruments is to generate cashflow and revenue and capital appreciation for the Company’s operations. The Company has no gearing or other financial liabilities apart from short-term creditors and does not use any derivatives.

The fair value of investments is determined using the detailed accounting policy above.

The fair value of cash deposits and short term debtors and creditors equates to their carrying value in the Balance Sheet.

Loans and receivables and other financial liabilities are stated at amortised cost which the Directors consider is equivalent to fair value.

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 emerging and principal financial risks arising from the Company’s operations are:

- Market risks
- Credit risk
- 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 emerging and 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 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 investment risks to which the Company is exposed are:

- Investment price risk
- Interest rate risk

 

Investment price risk

Investment price risk arises from uncertainty about the valuation of financial instruments held in accordance with the Company’s investment objectives in addition to the appropriateness of the valuation method used. It represents the potential loss that the Company might suffer through 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.

There are three categories in respect of interest which are attributable to the financial instruments held by the Company as follows:

- “Fixed rate” assets represent investments with predetermined yield targets and comprise certain loan note investments.
- “Floating rate” assets predominantly bear interest at rates linked to Bank of England base rate or LIBOR and comprise cash at bank and liquidity fund investments and certain loan note investments.
- “No interest rate” assets do not attract interest and comprise equity investments and debtors.

 

The Company monitors the level of income received from fixed and floating 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.

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 and debtors.

The Manager manages credit risk in respect of loan stock with a similar approach as described under “Market risks” above. In addition, the credit risk is mitigated for all investments in loan stocks by taking security, covering the full par value of the loan stock in the form of fixed and floating charges over the assets of the 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. Similarly, the management of credit risk associated with interest, dividends and other receivables is covered within the investment management procedures.

Cash is mainly held by Bank of Scotland plc and Royal Bank of Scotland plc, both of which are A-rated financial institutions. 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 are directly attributable to changes in credit risk.

 

Of the loan stock classified as “past due” above, as at the balance sheet date, £510,000, falling within the banding of one to two years related to the principal of loan notes where, although the principal remained within term, the investee company was not fully servicing the interest obligations under the loan note and is thus in arrears. The £1,593,000 remaining related to the principal of loan notes where the note has passed the maturity date. Notwithstanding the arrears of interest, the Directors do not consider that the maturity of the principal has 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. As the Company has a relatively low level of creditors, (£164,000, 2018: £255,000) and has no borrowings, the Board believes that the Company’s exposure to liquidity risk is low. The Company always holds sufficient levels of funds as cash 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 Manager in line with guidance agreed with the Board and is reviewed by the Board at regular intervals.

6. Events after the end of the reporting period
After the end of the reporting period, on 11 March 2020, the World Health Organisation declared the outbreak of a strain of novel coronavirus disease, COVID-19, a global pandemic which has resulted in subsequent major developments and an impact on post year end valuations. Although the full impact of the pandemic is not yet known, there is a significant risk that the pandemic will negatively impact the prospects of many businesses within the portfolio, particularly those in the hospitality and children’s nursery sectors which are held across all Share classes. Investment executives are carrying out an active and ongoing role in supporting all portfolio companies at this unprecedented time and are implementing any measures required to ensure each business suffers the least possible disruption. Provisions have been required against a number of the portfolio companies as at 31 March 2020. As a result, the unaudited NAVs and Total Return as at 31 March 2020 are as follows:
        

  Unaudited
31 Mar 2020
  Audited
 31 Dec

2019
  Pence   Pence
‘F’ Share pool      
Net asset value per ‘F’ Share 21.3   24.5
Cumulative distributions per ‘F’ Share 72.0   72.0
Total Return per ‘F’ Share 93.3   96.5
       
‘H’ Share pool      
Net asset value per ‘H’ Share 22.3   33.2
Cumulative distributions per ‘H’ Share 35.0   35.0
Total Return per ‘H’ Share 57.3   68.2
       
‘J’ Share pool      
Net asset value per ‘J’ Share 43.8   50.3
Cumulative distributions per ‘J’ Share 5.0   5.0
Total Return per ‘J’ Share 48.8   55.3

        
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 December 2019, but has been extracted from the statutory financial statements for the year ended 31 December 2019 which were approved by the Board of Directors on 30 April 2020 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 period ended 31 December 2018 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 December 2019 will be printed and posted to shareholders shortly. Copies will also be available to the public at the registered office of the Company at St. Magnus House, London, EC3R 6HD and will be available for download from www.downing.co.uk.
        


a d v e r t i s e m e n t