TIDMD1GO
The announcement made by the Company at 16:21 today, entitled Final
Results, contained an error in the body of the Chairman's Statement in
respect of Total Return value quoted for the Low Carbon Shares. The full
corrected text of the announcement is as follows:
Downing Planned Exit VCT 2011 plc
Final results for the year ended 30 November 2013
30 Nov 30 Nov
Performance summary 2013 2012 Initial
General pool Pence Pence Pence
Net asset value per General Ordinary Share 78.0 80.3 88.4
Net asset value per General 'A' Share 6.2 6.3 6.1
Cumulative dividends paid per General Ordinary Share 12.5 7.5 -
Total return per General Ordinary Share and 'A' Share 96.7 94.1 94.5
Structured pool
Net asset value per Structured Ordinary Share 80.1 81.9 88.4
Net asset value per Structured 'A' Share 6.3 6.5 6.1
Cumulative dividends paid per Structured Ordinary
Share 12.5 7.5 -
Total return per Structured Ordinary Share and 'A'
Share 98.9 95.9 94.5
Low Carbon pool (per GBP1 invested) *
Net asset value per 1.0695 Low Carbon Ordinary Shares 89.7 86.0 94.5
Cumulative dividends paid per 1.0695 Low Carbon Ordinary
Shares 13.3 8.0 -
103.0 94.0 94.5
* Low Carbon Ordinary Shares were originally issued at 93.5p per share.
The above figures have been expressed in terms of an original investment
of GBP1 which equates to a holding of 1.0695 shares.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Annual Report of Downing Planned Exit VCT
2011 plc for the year ended 30 November 2013. The General and Structured
pools were reasonably active investors during the year as they completed
building their VCT qualifying portfolios. In terms of performance, a
number of the venture capital investments have started to mature and, in
the Structured Share Pool, the Structured Products continue to produce
steady results. The solar investments in the Low Carbon Pool have
similarly made reasonable progress. On the negative side, there have
been a small number of investments that have underperformed in the
General and Structured pools which has held back overall performance a
little.
General Share pool
At 30 November 2013, the net asset value ("NAV") per General Ordinary
Share was 78.0p and per General 'A' Share was 6.2p. This represents an
increase of 2.6p (3.2%) over the year after adjusting for dividends
paid. Uplifts in the valuation of several investments were partly
cancelled out by provisions which were required against two
underperforming businesses, Mosaic Spa and Health Clubs Limited and City
Falkirk Limited.
Dividends totalling 12.5p per General Ordinary Share have been paid to
date so Total Return for a combined holding of one General Ordinary
Share and one General 'A' Share is 96.7p. This compares to the initial
NAV of 94.5p (net of issue costs) and the cost to Shareholders (net of
income tax relief) of 70.0p.
The General Share pool made four new VCT qualifying investments in the
year at a total cost of GBP2.7 million. Much of the funding for the new
investments arose from redemption of non-qualifying short-term secured
loans. Since the year end, there has been one further new investment
such that the task of building the General Share portfolio is now
considered to be complete. Any further new investment activity is only
likely to arise if there is an unexpected exit from an existing
investment earlier than planned.
Structured Share pool
At 30 November 2013, the net asset value ("NAV") per Structured Ordinary
Share was 80.1p and per Structured 'A' Share was 6.3p. This represents
an increase of 3.0p (3.1%) over the year after adjusting for dividends
paid. As with the General Share pool, gains on a number of venture
capital investments and the Structured Product investments were partly
offset by provisions required against Mosaic Spa & Health Clubs Limited
and City Falkirk limited.
Dividends totalling 12.5p per Structured Ordinary Share have been paid
to date so Total Return for a combined holding of one Structured
Ordinary Share and one Structured 'A' Share is 98.9p. This compares to
the initial NAV of 94.5p (net of issue costs) and the cost to
Shareholders (net of income tax relief) of 70.0p.
The Structured Share pool completed five new VCT qualifying investments
in the year at a total cost of GBP2.2 million, the majority of these
funds being provided from Structured Products which matured. At the year
end, the Structured Share pool held approximately 22% of its funds in
Structured Products and the majority of the reminder in VCT qualifying
investments. As with the General Share pool, there has been one further
qualifying investment made since the year end and further new investment
activity is now expected to be limited.
Low Carbon pool
The net asset value ("NAV") per Low Carbon Ordinary Share at 30 November
2013 was 83.8p. This represents an increase of 8.4p (10.4%) over the
year after adjusting for dividends paid. Dividends totalling 12.5p per
Low Carbon Ordinary Share have been paid to date so Total Return per
share is 96.3p. The Low Carbon Ordinary Shares were originally issued at
a price of 93.5p rather than the more usual price of GBP1. Total Return
based on an investment of GBP1 is therefore 103.0p. This compares to the
initial net asset value of an investment of GBP1 (net of issue costs) of
94.5p and the cost to Shareholders (net of income tax relief) of 70.0p.
The Low Carbon Share pool investments have now established solid records
of electricity generation in line with, or exceeding, original plan and
valuation uplifts have been recognised in a number of the holdings.
Dividends
It is the Company's intention to pay dividends of 5.0p per annum in
respect of each of the classes of Ordinary Shares.
Interim dividends of 2.5p were paid on 30 November 2013 in respect of
each class of Ordinary Shares and so a final dividend of 2.5p for each
class of Ordinary Shares is being proposed.
Subject to Shareholder approval at the AGM, the dividends will be paid
on 16 May 2014 to Shareholders on the register at 22 April 2014.
Share buybacks
The Company operates a share buyback policy whereby, subject to certain
restrictions, it will buy in any of its own shares that become available
in the market for cancellation. In its initial years, the Company has a
policy of, subject to any regulatory and liquidity contracts,
undertaking any buybacks at a price approximately equal to the latest
published NAV (i.e. at a nil discount).
Share buybacks undertaken in the year are summarised as follows:
Average
purchase
price % of
(pence per shares
Share class Number share) in issue
General Ordinary 5,650 80.0 0.04%
General A 7,700 6.0 0.04%
Structured Ordinary 5,650 82.0 0.05%
Structured A 7,700 6.0 0.07%
Low Carbon Ordinary 7,141 86.0 0.09%
A special resolution seeking authority for the Company to continue to
make further purchases of its own shares is proposed for the forthcoming
Annual General Meeting ("AGM").
Annual General Meeting
The Company will hold its third AGM on 13 May 2014 at 11:30 a.m. at 10
Lower Grosvenor Place, London SW1W 0EN.
One item of special business is proposed in respect of share buybacks as
mentioned above.
Outlook
The Board remains generally satisfied with progress made by the Company
to date. Although there are a small number of investments that have
faced difficulties, we believe that appropriate action has, or is, being
taken by the Investment Manager and are optimistic that any further
potential loss of value from these investments will be limited. The
majority of investments are making satisfactory progress and have the
potential to deliver further uplifts in value as they continue to
mature.
The exit process for all share classes is due to start in 2016. The
Investment Manager's objective between now and then is to ensure that
the majority of investment continue to make progress, while developing
plans for how exits will ultimately be secured.
Sir Aubrey Brocklebank Bt.
Chairman
INVESTMENT MANAGER'S REPORT - GENERAL SHARE POOL
Introduction
The General Share pool holds investments in 24 companies the initial
investment phase is now complete. The majority of the General Share
pool's investments are performing to plan, although three investments
faced difficulties against which provisions have been made resulting in
a combined unrealised loss of GBP414,000 being recorded. Overall, there
was an unrealised capital loss of GBP45,000 for the year.
Net asset value and results
The net asset value ("NAV") per General Ordinary Share at 30 November
2013 stood at 78.0p and the NAV per General 'A' Share at 6.2p. Total
Return (combined NAV plus dividends paid to date) now stands at 96.7p
compared to the original cost, net of income tax relief, of 70.0p.
The profit on ordinary activities after taxation for the period was
GBP393,000, comprising a revenue profit of GBP515,000 and a capital loss
of GBP122,000.
Investment activity
The General Share pool began the year with GBP12.1 million of
investments and ended with GBP13.3 million spread across a portfolio of
24 companies. Fifteen of these investments, with a value of GBP10.0
million, were VCT qualifying (or part qualifying).
Three new qualifying or partially qualifying and one reinvestment of
capital investments were made at a total cost of GBP2.7 million. Brief
details of these investments are as follows:
A GBP1,620,000 investment was made in Vulcan Renewables Limited. The
company is developing a 2.0MW maize fed biogas plant near Doncaster.
Biogas is produced through an anaerobic digestion process, which is then
processed further so that it can be injected to the National Gas Grid.
Some of the gas is also used to produce electricity. The company will
receive both Feed-In Tariffs and payments under the Renewable Heat
Incentive scheme.
GBP472,000 was invested in Wickham Solar Limited. The company has
developed a 5.6MW ground mounted solar farm in Bourne, Lincolnshire. The
project has a power purchase agreement with the French energy company,
Total, for all electricity exported and will receive Renewable
Obligation Certificates at the rate of two per MW generated as it was
commissioned before 31 March 2013.
As part of a loan restructuring, a further GBP327,000 was invested into
an existing investment, Mosaic Spa and Health Clubs Limited. Part of the
investment was qualifying.
GBP298,000 was received to pay down the existing loan in Kidspace
Adventures Limited, these proceeds were reinvested into Kidspace
Adventures Holdings Limited.
The share pool also made two non-qualifying investments in Dominions
House Limited and Snow Hill Developments LLP. The funds assisted in the
purchase of two development properties and provide the share pool with
an attractive yield as well as a share in the development profit.
The share pool realised a number of investments, mostly non-qualifying,
during the year generating proceeds of GBP2.4 million.
Portfolio valuation
A number of portfolio companies have started to develop well, resulting
in uplifts in value of Residential PV Trading (GBP144,000), Tooting Tram
and Social Limited (GBP120,000), Kidspace Adventures Holdings Limited
(GBP90,000) and Odysian (Holdings) Limited (GBP15,000).
There have, however, been three investments that have been adjusted
downwards lost value, City Falkirk Limited, Mosaic Spa and Health Clubs
Limited and Lochrise Limited.
Performance of the nightclub owned by City Falkirk Limited has
unfortunately been significantly below expectation and a reduction in
value of GBP153,000 has been made. We are working closely with the
club's management in order to try to bring the trading back on track,
however, it is clear that the depressed economic conditions are a major
contributing factor to the weak performance. For the same reason a full
provision of GBP20,000 has been made against the management company of
the club Lochrise Limited.
Mosaic Spa and Health Clubs Limited, owns and manages two health clubs:
The Shrewsbury Club, in Shrewsbury; and Holmer Park, in Hereford. It
also provides gym and spa management services to hotels, universities
and corporate clients. Both Holmer Park and The Shrewsbury club have
underperformed throughout the period against budget and the value has
been reduced by GBP241,000.
Outlook
The General Share pool now has a well-diversified qualifying portfolio,
which includes investments in nightclubs, renewable energy projects,
pubs and health clubs. We will continue to focus on generating value
from the portfolio as we make progress towards the planned exit date in
2016.
Downing LLP
Portfolio of investments
The following investments were held at 30 November 2013:
Valuation
movement % of
Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying investments
Vulcan Renewables Limited 1,620 1,620 - 11.9%
Mosaic Spa & Health Clubs Limited* 1,500 1,259 (241) 9.2%
Tooting Tram and Social Limited* 1,067 1,187 120 8.7%
Kidspace Adventures Holdings
Limited 988 1,077 90 7.9%
Residential PV Trading Limited 600 744 144 5.5%
South-Western Farms Solar Limited* 655 655 - 4.8%
Westcountry Solar Solutions Limited 600 600 - 4.4%
Odysian (Holdings) Limited 527 543 15 4.0%
Avon Solar Energy Limited 505 505 - 3.7%
Wickham Solar Limited 472 472 - 3.5%
Fubar Stirling Limited 429 429 - 3.1%
City Falkirk Limited 674 391 (153) 2.9%
Angel Solar Limited 300 300 - 2.2%
Cheers Dumbarton Limited 76 76 - 0.6%
Lochrise Limited 20 - (20) 0.0%
10,033 9,858 (45) 72.4%
Non-qualifying investments
Hoole Hall Hotel Limited 1,200 1,200 - 8.8%
Snow Hill Developments LLP 750 750 - 5.5%
Kidspace Adventures Limited 512 512 - 3.7%
Future Biogas (SF) Limited 350 350 - 2.6%
Antelope Pub Limited 300 300 - 2.2%
Dominions House Limited 178 178 - 1.3%
Clean Electricity Limited 70 70 - 0.5%
UK Renewable Power Limited 55 55 - 0.4%
21(st) Century Energy Limited 22 22 - 0.2%
3,437 3,437 - 25.2%
13,470 13,295 (45) 97.6%
Cash at bank and in hand 332 2.4%
Total investments 13,627 100%
* Part-qualifying investment
All venture capital investments above are incorporated in England and
Wales.
Investment movements for the year ended 30 November 2013
ADDITIONS
GBP'000
VCT qualifying investments
Vulcan Renewables Limited 1,620
Wickham Solar Limited 472
Mosaic Spa and Health Clubs Limited* 327
Kidspace Adventures Holdings Limited 298
2,717
Non-qualifying investments
Snow Hill Developments LLP 750
Dominions House Limited 178
928
3,645
DISPOSALS
Total
Market Profit
Value Profit realised
at Proceeds against during
Cost 01/12/12 ** cost the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying investments
Avon Solar Energy Limited 95 95 95 - -
Odysian (Holdings) Limited 73 73 89 16 16
168 168 184 16 16
Non-qualifying investments
Kidspace Adventures Limited 298 298 298 - -
South-Western Farms Solar
Limited 145 145 145 - -
Tooting Tram and Social
Limited 374 374 374 - -
West Tower Holdings Limited 1,320 1,320 1,320 - -
21(st) Century Energy
Limited 98 98 98 - -
2,235 2,235 2,235 - -
2,403 2,403 2,419 16 16
* part-qualifying investment
** adjusted for additions during the year
INVESTMENT MANAGER'S REPORT - STRUCTURED SHARE POOL
Introduction
During the year, the Structured Share pool has continued to make
progress towards having 70% of its funds in VCT qualifying investments.
At the year end, the pool held 16 venture capital investments and held
seven Structured Product investments which form the majority of the
non-qualifying portfolio.
The Structured Product portfolio had a very strong performance over the
year. The majority of the venture capital portfolio is performing to
plan, although three investments faced difficulties resulting in a
combined unrealised loss of GBP276,000. Overall an unrealised gain of
GBP65,000 was made on the pool.
Net asset value and results
At 30 November 2013, the net asset value ("NAV") per Structured Ordinary
Share stood at 80.1p and per Structured 'A' Share at 6.3p. Total Return
(combined NAV plus dividends paid to date) now stands at 98.9p, compared
to the original cost, net of income tax relief, of 70.0p.
The profit on ordinary activities after taxation for the year was
GBP326,000, comprising a revenue profit of GBP171,000 and a capital
return of GBP155,000.
Venture capital investment activity
During the year, the Company made five VCT qualifying or partially
qualifying investments at a total cost of GBP2.1 million. A brief
overview of the new investments is detailed below.
GBP472,000 was invested in Wickham Solar Limited. The company has
developed a 5.6MW ground mounted solar farm in Bourne, Lincolnshire. The
project has a power purchase agreement with the French energy company,
Total, for all electricity exported and will receive Renewable
Obligation Certificates at the rate of two per MW generated as it was
commissioned before 31 March 2013.
A GBP900,000 investment was made in Vulcan Renewables Limited. The
company is developing a 2.0MW maize fed biogas plant near Doncaster.
Biogas is produced through an anaerobic digestion process, which is then
processed further so that it can be injected into the National Gas Grid.
Some of the gas is also used to produce electricity. The company will
receive both Feed-In Tariffs and payments under the Renewable Heat
Incentive scheme.
As part of a loan restructuring, a further GBP217,000 was invested into
an existing investment, Mosaic Spa and Health Clubs Limited. Part of the
investment was qualifying.
GBP199,000 was received to pay down the existing loan in Kidspace
Adventures Limited, these proceeds were reinvested into Kidspace
Adventures Holdings Limited.
A follow on investment of GBP373,000 was made in Tooting Tram and Social
Limited
Venture capital portfolio valuation
A number of portfolio companies have started to develop well, resulting
in uplifts in value of Residential PV Trading (GBP96,000), Tooting Tram
and Social Limited (GBP80,000), Kidspace Adventures Holdings Limited
(GBP59,000) and Odysian (Holdings) Limited (GBP10,000).
There have, however, been three investments that have lost value, City
Falkirk Limited, Mosaic Spa and Health Clubs Limited and Lochrise
Limited.
Performance of the nightclub owned by City Falkirk Limited has
unfortunately been significantly below expectation and a reduction in
value of GBP102,000 has been made. We are working closely with the
club's management in order to try to bring the trading back on track,
however, it is clear that the depressed economic conditions are a major
contributing factor to the weak performance. For the same reason a full
provision of GBP13,000 has been made against the management company of
the club Lochrise Limited.
Mosaic Spa and Health Clubs Limited, owns and manages two health clubs:
The Shrewsbury Club, in Shrewsbury; and Holmer Park, in Hereford. It
also provides gym and spa management services to hotels, universities
and corporate clients. Both Holmer Park and The Shrewsbury club have
underperformed throughout the period against budget and the value has
been reduced by GBP161,000.
Structured Product portfolio
The Company's defensive approach to Structured Product investing
produced good rewards over the year as the portfolio generated
unrealised gains of GBP96,000 and realised gains of GBP142,000.
A significant number of Structured Products matured during the year
which, along with two sales, produced proceeds of GBP3.4 million and
provided funds for the new qualifying venture capital investments
described above.
The Structured Product portfolio now comprises seven investments. In
line with the pool's strategy, the portfolio will continue to reduce in
size as more investments mature or are sold to fund further qualifying
investments over the next year. We expect to see continued steady
performance from the existing Structured Product portfolio.
Outlook
Although the general economic outlook is a little brighter than it has
been, close monitoring of the investments within both the venture
capital and Structured Product portfolios will continue to be the focus
of our work to ensure that any issues are addressed at the earliest
stage and full value can ultimately be extracted when we start the
realisation process in 2016.
Downing LLP
Portfolio of investments
The following investments were held at 30 November 2013:
Valuation
movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying investments
Vulcan Renewables Limited 900 900 - 9.4%
Mosaic Spa and Health Clubs
Limited* 920 759 (161) 7.9%
Kidspace Adventures Holdings
Limited 659 718 59 7.5%
Tooting Tram and Social Limited 533 613 80 6.4%
Residential PV Trading Limited 400 496 96 5.2%
Wickham Solar Limited 472 472 - 4.9%
South-Western Farms Solar Limited 400 400 - 4.2%
Westcountry Solar Solutions
Limited 400 400 - 4.2%
Odysian (Holdings) Limited 351 362 10 3.8%
Avon Solar Energy Limited 336 336 - 3.5%
Fubar Stirling Limited 286 286 - 3.0%
City Falkirk Limited 450 261 (102) 2.7%
Angel Solar Limited 200 200 - 2.1%
Cheers Dumbarton Limited 51 51 - 0.5%
Lochrise Limited 13 - (13) 0.0%
6,371 6,254 (31) 65.3%
Non-qualifying investments
Kidspace Adventures Limited 341 341 - 3.6%
341 341 - 3.6%
Structured Product investments
HSBC 7.1% Defensive
Worst-Of-Auto-Call 401 413 12 4.3%
Barclays 7.75% Defensive
Worst-Of-Auto-Call 351 360 9 3.8%
RBS 6 Yr Dual Index Synthetic Zero
10.16% 251 345 51 3.6%
BNP Paribas Harewood Abs
Progression 2 253 262 8 2.7%
UBS 7.3% Defensive
Worst-Of-Auto-Call 250 260 10 2.7%
Goldman Sachs 8.5% Defensive
Worst-Of-Autocall 251 257 6 2.7%
Credit Suisse 7% Defensive
Worst-Of-Auto-Call 251 251 - 2.6%
2,008 2,148 96 22.4%
8,720 8,743 65 91.3%
Cash at bank and in hand 831 8.7%
Total investments 9,574 100%
* part-qualifying investment
All venture capital investments are incorporated in England and Wales.
ADDITIONS
GBP'000
VCT qualifying investments
Kidspace Adventures Holdings Limited 199
Mosaic Spa & Health Clubs Limited* 217
Tooting Tram and Social Limited 373
Vulcan Renewables Limited 900
Wickham Solar Limited 472
2,161
Non-qualifying investments
Barclays 7.75% Defensive Worst-Of-Auto-Call 351
Credit Suisse 7% Defensive Worst-Of-Auto-Call 251
Goldman Sachs 8.5% Defensive Worst-Of-Auto-Call 251
HSBC 7.1% Defensive Worst Of-Auto-Call 401
UBS 7.3% Defensive Worst-Of-Auto-Call 250
1,504
3,665
DISPOSALS
Market Total
Value Gain realised gain
At against during
Cost 01/12/12 Proceeds cost the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
investments
Avon Solar Energy
Limited 49 49 59 10 10
Odysian (Holdings)
Limited 64 64 64 - -
113 113 123 10 10
Non-qualifying
investments
Kidspace Adventures
Limited 199 199 199 - -
199 199 199 - -
Structured Product
investments
Barclays 10% FTSE/S&P
Worst-Of-Defensive-AC 501 590 600 99 10
Credit Suisse 7% FTSE
Autocall 501 555 575 74 20
Elders Cap
Accumulation II 16A
(Rollover) 502 559 590 88 31
Goldman Sachs 10.5%
Defensive FTSE 501 564 605 104 41
JP Morgan 7% Defensive
FTSE AC 501 553 570 69 17
Morgan Stanley 11%
Defensive FTSE 352 403 426 74 23
2,858 3,224 3,366 508 142
3,170 3,536 3,688 518 152
* part-qualifying investment
** adjusted for additions during the year
INVESTMENT MANAGER'S REPORT - LOW CARBON SHARE POOL
Introduction
The task of building the Low Carbon investment portfolio was completed
at an early stage, ahead of deadlines for changes in the Feed-in Tariffs
("FiTs") and other regulations. As a result, there has been limited
investment activity in the period. The investee companies have now
started to establish steady track records and some have justified
initial uplifts in value.
Net asset value and results
The net asset value ("NAV") per Low Carbon Ordinary Share at 30 November
2013 stood at 83.8p. Total Return (NAV plus dividends paid to date) now
stands at 96.3p, compared to the original cost, net of income tax relief,
of 65.4.
The profit on ordinary activities after taxation for the year was
GBP687,000 comprising a revenue profit of GBP308,000 and a capital
return of GBP379,000.
Investment activity and valuation
At 30 November 2013, the Low Carbon portfolio comprised investments in
seven companies, each of which is VCT qualifying or part-qualifying, and
had a valuation of GBP6.8 million. All of the investments within the
portfolio receive FiTs from the production of electricity from solar PV
panels. The investments are well spread across five different
operators/installers and the panels are on a mix of commercial and
residential rooftops.
The majority of the investments have been held at original cost while we
continue to gather data to confirm that they are consistently generating
electricity at the planned levels. Most of the companies hold a large
portfolio of residential rooftop PV panels. As there are many
electricity sources to monitor, the task of ensuring reliable data flow
has taken longer than would have been the case with, say, a dedicated
solar park. However, in the case of three investments, Green Electricity
Generation, 21(st) Century Energy and PV Generation, yield has been
sufficiently proven to justify increases in the carrying values by
GBP210,000, GBP108,000 and GBP90,000 respectively.
Outlook
With no significant further investment activity expected over the next
year, our focus remains on close monitoring of the various projects to
ensure that they perform in line with expectations.
Assuming that the generation of electricity by the investee companies
continues at the anticipated levels, we expect to see further growth in
the Low Carbon pool's NAV. Over the coming year we will start to
undertake some preliminary work on how successful exits might be
achieved from the investments when that task commences in two years'
time.
Downing LLP
Portfolio of investments
Valuation
movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying investments
Progressive Energies Limited* 1,400 1,400 - 20.2%
Green Electricity Generation
Limited 1,000 1,210 210 17.5%
PV Generation Limited 1,000 1,090 90 15.8%
Progressive Power Generation
Limited 800 800 - 11.5%
UK Renewable Power Limited 780 780 - 11.3%
Clean Electricity Limited 780 780 - 11.3%
21(st) Century Energy Limited 600 708 108 10.2%
6,360 6,768 408 97.8%
Cash at bank and in hand 188 2.2%
Total investments 6,956 100%
* part-qualifying investment
All venture capital investments are incorporated in England and Wales.
ADDITIONS
GBP'000
VCT qualifying investments
21(st) Century Energy Limited 22
22
DISPOSALS
Market Gain Total realised
value at against gain during
Cost 01/12/12 Proceeds cost the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-qualifying
investments
Progressive Power
Generation Limited 134 134 134 - -
134 134 134 - -
* part-qualifying investment
Directors' responsibilities
The Directors are responsible for preparing the Report of the Directors,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations. They are also
responsible for ensuring that the annual report includes information
required by the Listing Rules of the Financial Conduct Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law, the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). Under company law the Directors must not
approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period. In preparing these
financial statements the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the
financial statements; and
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
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
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.
Directors' statement pursuant to the Disclosure and Transparency Rules
Each of the Directors, whose names and functions are listed on page 2,
confirms that, to the best of each person's knowledge:
the financial statements, which have been prepared in accordance with
United Kingdom Generally Accepted Accounting Practice, give a true and
fair view of the assets, liabilities, financial position and profit or
loss of the Company; and
the management report within the Report of the Directors, Strategic
Report, Chairman's Statement, Investment Manager's Report and the Review
of Investments includes a fair review of the development and performance
of the business and the position of the Company together with a
description of the principal risks and uncertainties that it faces.
By order of the Board
Grant Whitehouse
Secretary of Downing Planned Exit VCT 2011 plc
INCOME STATEMENT
for the year ended 30 November 2013
Year ended 30 November 2013 Year ended 30 November 2012
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 2,027 - 2,027 1,192 - 1,192
Net gain on
investments - 597 597 - 593 593
2,027 597 2,624 1,192 593 1,785
Investment
management
fees (401) (133) (534) (417) (140) (557)
Other
expenses (343) (52) (395) (338) - (338)
Return on
ordinary
activities
before tax 1,283 412 1,695 437 453 890
Tax on
ordinary
activities (289) - (289) (92) - (92)
Return
attributable
to equity
shareholders 994 412 1,406 345 453 798
Basic and
diluted
return per
share:
General
Ordinary
Share 3.3 (0.8) 2.5 2.3 (2.3) -
General 'A'
Share - - - - - -
Structured
Ordinary
Share 1.6 1.5 3.1 (1.0) 7.9 6.9
Structured
'A' Share - - - - - -
Low Carbon
Ordinary
Share 3.8 4.7 8.5 1.1 (0.4) 0.7
All Revenue and Capital items in the above statement derive from
continuing operations. The total column within the Income Statement
represents the profit and loss account of the Company. No operations
were acquired or discontinued during the year.
A Statement of Total Recognised Gains and Losses has not been prepared
as all gains and losses are recognised in the Income Statement noted
above.
Other than revaluation movements arising on investments held at fair
value through the profit and loss, there were no differences between the
return/(loss) as stated above and historical cost.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Year ended 30 November 2013 Year ended 30 November 2012
Low Low
General Structured Carbon General Structured Carbon
Share Share Share Share Share Share
pool pool pool Total pool pool pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening
Shareholders
funds 13,761 9,588 6,516 29,865 14,950 9,665 7,062 31,677
Dividends
paid (784) (536) (405) (1,725) (1,177) (803) (608) (2,588)
Shares bought
back (5) (6) (6) (17) (18) (4) - (22)
Return
attributable
to equity
shareholders 393 326 687 1,406 6 730 62 798
Closing
Shareholders
funds 13,365 9,372 6,792 29,529 13,761 9,588 6,516 29,865
INCOME STATEMENT (ANALYSED BY SHARE POOL) for the year ended 30 November
2013
General Share
pool Year ended 30 November 2013 Year ended 30 November 2012
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 1,003 - 1,003 787 - 787
Net loss on
investments - (29) (29) - (291) (291)
1,003 (29) 974 787 (291) 496
Investment
management
fees (184) (61) (245) (197) (66) (263)
Other expenses (158) (32) (190) (161) - (161)
Return/(loss)
on ordinary
activities
before tax 661 (122) 539 429 (357) 72
Tax on
ordinary
activities (146) - (146) (66) - (66)
Return/(loss)
attributable
to equity
shareholders 515 (122) 393 363 (357) 6
Structured
Share pool Year ended 30 November 2013 Year ended 30 November 2012
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 463 - 463 124 - 124
Net gain on
investments - 218 218 - 884 884
463 218 681 124 884 1,008
Investment
management
fees (129) (43) (172) (128) (43) (171)
Other expenses (110) (20) (130) (107) - (107)
Return/(loss)
on ordinary
activities
before tax 224 155 379 (111) 841 730
Tax on
ordinary
activities (53) - (53) - - -
Return/(loss)
attributable
to equity
shareholders 171 155 326 (111) 841 730
Low Carbon
Share pool Year ended 30 November 2013 Year ended 30 November 2012
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 561 - 561 281 - 281
Net gain on
investments - 408 408 - - -
561 408 969 281 - 281
Investment
management
fees (88) (29) (117) (92) (31) (123)
Other expenses (75) - (75) (70) - (70)
Return/(loss)
on ordinary
activities
before tax 398 379 777 119 (31) 88
Tax on
ordinary
activities (90) - (90) (26) - (26)
Return/(loss)
attributable
to equity
shareholders 308 379 687 93 (31) 62
BALANCE SHEET as at 30 November 2013
Year ended 30 November 2013 Year ended 30 November 2012
Low Low
General Structured Carbon General Structured Carbon
Shares Shares Shares Total Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Investments 13,295 8,743 6,768 28,806 12,098 8,548 6,472 27,118
Current assets
Debtors 215 75 2 292 237 51 2 290
Cash at bank
and in hand 332 831 188 1,351 1,654 1,096 138 2,888
547 906 190 1,643 1,891 1,147 140 3,178
Creditors:
amounts
falling due
within one
year (477) (277) (166) (920) (228) (107) (96) (431)
Net current
assets 70 629 24 723 1,663 1,040 44 2,747
Net assets 13,365 9,372 6,792 29,529 13,761 9,588 6,516 29,865
Capital and
reserves
Called up
Ordinary
Share
capital 16 11 8 35 16 11 8 35
Called up 'A'
Share
capital 18 13 - 31 18 13 - 31
Special
reserve 13,507 9,050 6,056 28,613 13,893 9,265 6,656 29,814
Revaluation
reserve (176) 22 408 254 (131) 322 - 191
Capital
reserve -
realised - 365 - 365 - 237 (160) 77
Revenue
reserve - (89) 320 231 (35) (260) 12 (283)
Total equity
shareholders'
funds 13,365 9,372 6,792 29,529 13,761 9,588 6,516 29,865
Basic and diluted net asset value
per share
Ordinary Share 78.0p 80.1p 83.8p 80.3p 81.9p 80.4p
'A' Share 6.2p 6.3p n/a 6.3p 6.5p n/a
CASH FLOW STATEMENT for the year ended 30 November 2013
Year ended 30 November 2013 Year ended 30 November 2012
Low Low
General Structured Carbon General Structured Carbon
Shares Shares Shares Total Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash
inflow/(outflow)
from operating
activities 751 254 372 1,377 265 (203) 88 150
Taxation
Corporation tax paid (58) - (23) (81) - - - -
Capital expenditure
Purchase of
investments (3,645) (3,665) (22) (7,332) (8,667) (4,294) (4,376) (17,337)
Proceeds from
disposal of
investments 2,419 3,688 134 6,241 4,698 5,177 448 10,323
Net cash
(outflow)/inflow
from capital
expenditure (1,226) 23 112 (1,091) (3,969) 883 (3,928) (7,014)
Equity dividends
paid (784) (536) (405) (1,725) (1,177) (803) (608) (2,588)
Net cash
(outflow)/inflow
before financing (1,317) (259) 56 (1,520) (4,881) (123) (4,448) (9,452)
Financing
Shares bought back (5) (6) (6) (17) (18) (4) - (22)
Net cash (outflow)
from financing (5) (6) (6) (17) (18) (4) - (22)
(Decrease)/increase
in cash (1,322) (265) 50 (1,537) (4,899) (127) (4,448) (9,474)
NOTES
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" revised January 2009
("SORP").
The financial statements are prepared under the historical cost
convention except for certain financial instruments measured at fair
value.
The Company implements new Financial Reporting Standards ("FRS") 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 the SORP, supplementary information which analyses
the Income Statement between items of a revenue and capital nature has
been presented alongside the Income Statement. The revenue return is the
measure the Directors believe appropriate in assessing the Company's
compliance with certain requirements set out in Part 6 of the Income Tax
Act 2007.
Investments
All investments are designated as "fair value through profit or loss"
assets due to investments being managed and performance evaluated on a
fair value basis. 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 FRS26.
For unquoted investments, fair value is established by using the IPEV
guidelines. The valuation methodologies for unquoted entities used by
the IPEV to ascertain the fair value of an investment are as follows:
* Price of recent investment;
* Multiples;
* Net assets;
* Discounted cash flows or earnings (of underlying business);
* Discounted cash flows (from the investment); and
* Industry valuation benchmarks.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions and estimates in order to ascertain fair
value.
Gains and losses arising from changes in fair value are included in the
Income Statement for the year as a capital item and transaction costs on
acquisition or disposal of the investment are expensed. Where an
investee company has gone into receivership or liquidation, or
administration (where there is likelihood of little 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 that does not
require portfolio investments to be accounted for using the equity
method of accounting.
Income
Dividend income from investments is recognised when the shareholders'
rights to receive payment has been established, normally the ex-dividend
date.
Interest income is accrued on a time apportionment basis, by reference
to the principal sum outstanding and at the effective rate applicable
and only where there is reasonable certainty of collection in the
foreseeable future.
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 a policy
of charging 75% of the investment management fees to the revenue account
and 25% to the capital account to reflect the Board's estimated split of
investment returns which will be achieved by the company over the long
term.
* Expenses and liabilities not specific to Share class are generally
allocated pro rata to the net assets.
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 arises.
Deferred taxation, which is not discounted, is provided in full on
timing differences that result in an obligation at the balance sheet
date to pay more tax, or a right to pay less tax, at a future date, at
rates expected to apply when they crystallise based on current tax rates
and law. Timing differences arise from the inclusion of items of income
and expenditure in taxation computations in periods different from those
in which they are included in the accounts.
A net deferred tax asset is regarded as recoverable and therefore
recognised only to the extent that, on the basis of all available
evidence, it can be regarded as more likely than not that there will be
suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Other debtors, other creditors and loan notes
Other debtors (including accrued income), other creditors and loan notes
(other than those held as part of the investment portfolio as set out in
note 9) are included within the accounts at amortised cost.
Issue costs
Issue costs in relation to the shares issued for each share class have
been deducted from the share premium account.
2. Basic and diluted return per share
Return per share is calculated on the following:
Weighted
average Revenue Capital
number return loss/return
Year ended 30 November 2013 of shares in issue GBP'000 GBP'000
General Ordinary Shares 15,682,198 515 (122)
General 'A' Shares 18,436,157 - -
Structured Ordinary Shares 10,706,682 171 155
Structured 'A' Shares 12,601,247 - -
Low Carbon Ordinary Shares 8,105,758 308 379
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.
3. Basic and diluted net asset value per share
Shares in issue 2013 2012
Pence Pence
per per
2013 2012 share GBP'000 share GBP'000
General Ordinary
Shares 15,679,241 15,684,891 78.0 12,229 80.3 12,595
General 'A' Shares 18,453,789 18,476,489 6.2 1,136 6.3 1,166
Structured
Ordinary Shares 10,703,725 10,709,375 80.1 8,576 81.9 8,770
Structured 'A'
Shares 12,597,594 12,605,294 6.3 796 6.5 818
Low Carbon
Ordinary Shares 8,102,222 8,109,363 83.8 6,792 80.4 6,516
Net assets per
Balance Sheet 29,529 29,865
As the Company has not issued any convertible shares or share options,
there is no dilutive net asset value per share. The net asset value per
share disclosed therefore represents both the basic and diluted net
asset value per share.
4. Principal Risks
The Company's investment activities expose the Company to a number of
risks associated with financial instruments and the sectors in which the
Company invests. The principal financial risks arising from the
Company's operations are:
Market risks;
Credit risk; and
Liquidity risk.
The Board regularly reviews these risks and the policies in place for
managing them. There have been no significant changes to the nature of
the risks that the Company is exposed to over the year and there have
also have 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 market risks in the form of
potential losses and gains that may arise on the investments it holds in
accordance with its investment policy. The management of these market
risks is a fundamental part of investment activities undertaken by the
Investment Manager and overseen by the Board. The Manager monitors
investments through regular contact with management of investee
companies, regular review of management accounts and other financial
information and attendance at investee company board meetings. This
enables the Manager to manage the investment risk in respect of
individual investments. Market risk is also mitigated by holding a
diversified portfolio spread across various business sectors and asset
classes.
The key market risks to which the Company is exposed are:
Market price risk
Interest rate risk
Market price risk
Market price risk arises from uncertainty about the future prices and
valuations of financial instruments held in accordance with the
Company's investment objectives. It represents the potential loss that
the Company might suffer through market price movements in respect of
quoted investments and also changes in the fair value of unquoted
investments that it holds.
At 30 November 2013, the structured product portfolio was valued at
GBP2,148,000.
The fair values of structured products are influenced primarily by
changes in the FTSE 100 Index. The Company's sensitivity to fluctuations
in the FTSE 100 Index is summarised below.
* This excludes the BNP Paribas Harewood Absolute Progression 2 which is
not directly linked to FTSE 100 Index performance.
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. A summary of the interest rate profile of
the Company's investments is shown below.
There are four 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 and Preference
Shares.
"Variable rate" assets represent investments with predetermined interest
rates that vary at set dates in accordance with loan agreements.
"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, certain loan note investments, loans and receivables
(excluding cash at bank) and other financial liabilities.
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, structured products, cash deposits
and debtors. Credit risk relating to loan stock investee companies is
considered to be part of market risk.
The Manager manages credit risk in respect of loan stock 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 interest, dividends and other receivables is covered within
the investment management procedures.
Cash is mainly held by The Co-operative Bank plc and Royal Bank of
Scotland plc, both of which are A-rated financial institutions and Royal
Bank of Scotland plc is also 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 are
directly attributable to changes in credit risk.
Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties in
meeting obligations associated with its financial liabilities. Liquidity
risk may also arise from either the inability to sell financial
instruments when required at their fair values or from the inability to
generate cash inflows as required. As the Company 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.
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 30 November 2013,
but has been extracted from the statutory financial statements for the
year ended 30 November 2013 which were approved by the Board of
Directors on 28 March 2014 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 30 November 2012 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 30 November 2013 will be printed and posted to shareholders
shortly. Copies will also be available to the public at the registered
office of the Company at 10 Lower Grosvenor Place, London, SW1W 0EN and
will be available for download from www.downing.co.uk.
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 Planned Exit VCT 2011 plc via Globenewswire
HUG#1772687
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