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Downing FOUR VCT plc: Annual Financial Report

Thu 25th July, 2019 3:59pm
Downing FOUR VCT plc: Annual Financial Report

Downing FOUR VCT plc
LEI: 21380035MV1VRYEXPR95
Final Results for the year ended 31 March 2019

25 July 2019

FINANCIAL HIGHLIGHTS

 31 March
2019
 31 March
2018
 pence pence
DSO D Share pool   
Net Asset Value per DSO D Share27.8 54.4
Cumulative distributions76.5 52.5
Adjusted for Performance Incentive estimate(3.9) (4.4)
Total Return per DSO D Share100.41102.5
    
DP67 Share pool   
Net Asset Value per DP67 Share48.5 50.0
Cumulative distributions (since original launch)49.8 49.8
Total Return per DP67 Share98.3 99.8
    
DP2011 General Share pool   
Net Asset Value per DP2011 General Ordinary Share- -
Net Asset Value per DP2011 General A Share13.3 20.3
Cumulative distributions (since original launch)92.0 85.0
Total Return per DP2011 General Ordinary Share and DP2011 General A Share105.32105.3
    
DP2011 Structured Share pool   
Net Asset Value per DP2011 Structured Ordinary Share- -
Net Asset Value per DP2011 Structured A Share9.9 15.0
Cumulative distributions (since original launch)95.0 90.0
Total Return per DP2011 Structured Ordinary Share and DP2011 Structured A Share104.93105.0
    
Generalist Share pool   
Net Asset Value and Total Return per Generalist Share83.5 95.5
    
Healthcare Share pool   
Net Asset Value and Total Return per Healthcare Share83.3 94.6
    

1Based on Total Return to Shareholders at 31 March 2019, a Performance Incentive is expected to become due to management. The Performance Incentive has been estimated at 3.9p per DSO D Share.
2The Total Return to Shareholders at 31 March 2019 is shown net of the Performance Incentive due to management. By virtue of the A Share dividends paid to date, members of the management team have received Performance Incentive payments, to date, equivalent to 3.1p per DP2011 General Ordinary Share. The remaining Performance Incentive, expected to become payable to management, has been estimated at 2.4p per DP2011 General Ordinary Share.
3The Total Return to Shareholders at 31 March 2019 is shown net of the Performance Incentive due to management. By virtue of the A Share dividends paid to date, members of the management team have received Performance Incentive payments, to date, equivalent to 3.6p per DP2011 Structured Ordinary Share. The remaining Performance Incentive, expected to become payable to management, has been estimated at 1.7p per DP2011 Structured Ordinary Share.

CHAIRMAN’S STATEMENT

Introduction
I present the Company’s Annual Report for the year ended 31 March 2019.

We have seen further progress in the realisation of the remaining investments in the planned exit share pools, ahead of making final distributions to Shareholders. The Manager has also continued to make good progress in investing the proceeds of the 2016/17 and 2018/19 Generalist and Healthcare fundraisings.

Share pool review
As at 31 March 2019 the Company had six active Share pools, being four planned exit pools, which we expect will have completed the process of returning funds to Shareholders by the end of this calendar year, and two evergreen pools. Brief reviews of the Share pools which were active during the year are given below.

Planned Exit Share pools
DSO D Share pool
During the year the Manager made further progress in exiting from the remaining investments held by the DSO D Share pool. Exit plans are in place for the six investments held at the year end, and we expect the final realisations to take place in the coming months.

The DSO D Share NAV stood at 27.8p at the year end, a decrease of 2.6p per Share or 4.8% over the year after adjusting for the dividend of 24.0p per Share paid in the year. Total Return now stands at 100.4p per Share, after adjusting for the expected Performance Incentive of 3.9p. The cost for Shareholders who invested in the DSO D Share offer was 100.0p, or 70.0p per Share net of income tax relief.

A more detailed review of the DSO D Share pool is included in the Investment Manager’s Report on page 7 of the Annual Report.

DP67 Share pool
During the year the Manager continued to work on exiting from the remaining investments held by the DP67 Share pool. Whilst a limited number of realisations took place during the year, exit plans are in place for all of the investments held at the year end, and we expect the final realisations to take place in the coming months.

The DP67 Share NAV stood at 48.5p at the year end, a decrease of 1.5p per Share or 3.0% over the year. Total Return now stands at 98.3p per Share, compared to the original cost for Shareholders who invested in 2007 of 100.0p, or 70.0p net of income tax relief.

A more detailed review of the DP67 Share pool is included in the Investment Manager’s report on page 13 of the Annual Report.

DP2011 General Share pool
The Manager continued the process of exiting from the remaining investments during the year. All of the investments held at the year-end have a clear path to exit and we expect to be in a position to make a final return of capital to Shareholders during the summer.

The NAV of a combined holding of one DP2011 General Ordinary Share and one DP2011 General A Share stood at 13.3p at 31 March 2019. The combined NAV has therefore remained unchanged from 31 March 2018, after adjusting for dividends paid during the year, of 7.0p per combined holding. Total Return now stands at 105.3p per Share, compared to the cost for Shareholders of 100.0p, or 70.0p net of income tax relief.

A more detailed review of the DP2011 General Share pool is presented in the Investment Manager’s report on page 18 of the Annual Report.

DP2011 Structured Share pool
The Manager continued the process of exiting from the remaining investments during the year. All of the investments held at the year-end have a clear path to exit and we expect to be in a position to make a final return of capital to Shareholders during the summer.

The NAV of a combined holding of one DP2011 Structured Ordinary Share and one DP2011 Structured A Share stood at 9.9p at the year end, a decrease of 0.1p or 0.7% for the year after adjusting for the dividends paid during the year, of 5.0p per combined holding. Total Return now stands at 104.9p per Share, compared to the cost for Shareholders of 100.0p or 70.0p net of income tax relief.

A more detailed review of the DP2011 Structured Share pool is presented in the Investment Manager’s Report on page 23 of the Annual Report.

Evergreen Share pools
Generalist Share pool
The first Generalist fundraising launched in December 2016 and closed during 2018, having raised £32.2 million. The subsequent Generalist Offer launched on 13 November 2018 and has raised a further £10.7 million to date. The cost for Shareholders who invested under the initial offer was 100.0p or 70.0p net of income tax relief.

The Manager has built a pipeline of suitable investment opportunities and made a number of initial and follow on investments, totalling £10.9 million, into a variety of VCT Qualifying entities during the year.

The Generalist Share NAV and Total Return stood at 83.5p at the year end, representing a decrease of 12.0p per Share or 12.6% over the year. The decrease in the NAV is attributable to a combination of factors. The most significant is the fall in value of the Liquidity investments, which have been impacted by the adverse global market conditions in the final quarter of 2018. The second factor is the cumulative impact of the provisions required in the Venture Capital portfolio, and in particular Ormsborough Limited and Glownet Limited.

As the Board and Manager anticipated when the Generalist Share pool was launched, there have been some businesses for which valuation reductions have been recognised at what is an early stage in the life of the Share pool. A typical feature of investing in young growth companies is that the weaker businesses in a portfolio tend to become visible before the stronger businesses prove themselves as such. It is therefore no surprise that some investments in the Generalist Share pool have underperformed and provisions have been made accordingly. The Manager continues to work closely with the management teams of all of the Generalist Share pool’s unquoted investments and believes that a number of these businesses have the potential to deliver good rewards to investors over time. Additionally, the Share pool held a sizable cash balance during the year, representing funds awaiting investment. As these funds were yet to be deployed into VCT Qualifying investments no income or capital growth could be achieved thereon.

A more detailed review of the Generalist Share pool is included in the Investment Manager’s Report on page 28 of the Annual Report.

Healthcare Share pool
The first Healthcare fundraising launched in December 2016 and closed during 2018, having raised £12.6 million. The subsequent Healthcare Offer launched on 13 November 2018 and has raised a further £4.9 million to date.

The Manager has been working on sourcing investment opportunities and has made good progress in this regard, having invested £4.9 million in six VCT Qualifying entities during the year.

The Healthcare Share NAV and Total Return stood at 83.3p at the year end, representing a decrease of 11.3p per Share or 11.9% over the year. As with the Generalist Share Pool, the decrease in the NAV is attributable to several factors. Valuation adjustments in the Venture Capital portfolio have been the single largest factor, with significant provision required against ADC Biotechnology and a drifting share price for AIM-quoted Destiny Pharma plc.  The Share pool has also been impacted by falls in the value of the Liquidity investments and the “cash-drag” of holding uninvested funds.

A more detailed review of the Healthcare Share pool is included in the Investment Manager’s Report on page 38 of the Annual Report.

Share buybacks
In the initial five-year period of each Share class, the Company operates a policy of buying in its own Shares that become available in the market, subject to regulatory and liquidity factors. Any such purchases are undertaken at a price approximately equal to NAV (i.e. at a nil discount). 

As the planned exit Share pools have all initiated the process of returning funds to Shareholders, the Company will not undertake any further buybacks in respect of those Share classes.

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

14,400 Generalist Shares were purchased during the year ended 31 March 2019.

Annual General Meeting (“AGM”)
The Company’s ninth AGM will be held at 6th Floor, St. Magnus House, 3 Lower Thames Street, London, EC3R 6HD at 12:30 p.m. on 10 September 2019.

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

Outlook
The remaining planned exit share pools are expected to complete their respective exit processes in the coming months and the Manager will work to ensure that remaining funds are promptly returned to Shareholders thereafter.

The focus of the Manager will also be on further building the Generalist and Healthcare investment portfolios and we expect new investment activity to continue at a similar rate during the year ended 31 March 2020.  As many companies in the portfolio are young, we expect it to be some time before the stronger prospects can deliver any rewards for investors. We also expect that some investments may not be able to meet their plans and the Manager may therefore decide not to support them further.

I look forward to reporting on developments in the Half-Yearly Report to 30 September 2019.

Sir Aubrey Brocklebank
Chairman

INVESTMENT MANAGER’S REPORT - DSO D SHARE POOL
Introduction

The five-year anniversary of the DSO D Share pool has passed and the process of realising the investments and returning funds to Shareholders is underway.

Net Asset Value and results
The Net Asset Value (“NAV”) per DSO D Share at 31 March 2019 stood at 27.8p, a decrease of 2.6p or 4.8% over the year after adjusting for dividends paid. Total Return stands at 100.4p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per Share.

The loss on ordinary activities after taxation for the year was £207,000 (2018: profit of £453,000), comprising a revenue loss of £49,000 (2018:  profit of £57,000) and a capital loss of £158,000 (2018: gain of £396,000).

Venture Capital investments
As at 31 March 2019, the DSO D Share Pool held six Venture Capital investments with a total value of £1.3 million.

Portfolio activity
Four investments were fully exited during the year, generating total proceeds of £2.3 million and a gain over opening value of £214,000.

The largest realisation was the sale of Goonhilly Earth Station Limited, the owner of the Goonhilly Satellite Earth Station in Cornwall. The sale generated proceeds of £878,000 for the DSO D Share pool, resulting in a gain over cost and opening value of £163,000.

Merlin Renewables Limited, the owner and operator of an Anaerobic Digestion plant in Doncaster, was also sold during the year. The sale achieved proceeds of £770,000 for the DSO D Share pool, realising a gain over cost of £270,000.

The other substantial exit was from Nightjar Sustainable Power Limited, the owner and operator of a hydroelectric scheme in Scotland. A refinancing generated proceeds of £600,000 and resulted in a gain over cost of £115,000.

The DSO D Share pool also exited in full from Fubar Stirling Limited, a Scottish licensed leisure company. The loan note investment was being repaid over time and the £8,000 received marks the final instalment from the company. The Loss over cost of £118,000 is in relation to the equity interest in the company, to which no value ultimately accrued.

Portfolio valuation
During the year, the carrying value of the DSO D portfolio was reduced in value by £355,000.

Apex Energy Limited, the owner of a standby electricity generation plant, has experienced some significant technical problems in respect of its engines which have taken the site out of operation. The DSO D investment has been written down by £360,000 as a result.

Other portfolio valuation movements amounted to a net uplift of £5,000.

Outlook
The focus for the DSO D Share pool is now on realising the remaining investments. We anticipate that the remaining realisations will take place in the coming months and further dividends will be declared once this process has been completed.

Downing LLP

REVIEW OF INVESTMENTS - DSO D SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:

 CostValuationValuation
movement
in year
% of
portfolio
  £’000 £’000 £’000 
Venture Capital investments    
Lambridge Solar Limited 500605 (21)27.4%
Pearce and Saunders Limited300376 7617.0%
Fresh Green Power Limited 189210 (21)9.5%
Green Energy Production UK Limited 10051 (29)2.3%
Apex Energy Limited 40040 (360)1.8%
Pearce and Saunders DevCo Limited* 2020 -0.9%
 1,5091,302 (355)58.9%
     
Cash at bank and in hand 910 41.1%
Total investments  2,212 100.0%

* non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2019

DISPOSALS

 CostValuation
at 01/04/18

Proceeds
Profit/(loss)
vs. cost
Realised
gain
 £’000£’000£’000£’000£’000
Venture Capital investments     
Merlin Renewables Limited50071977027051
Goonhilly Earth Station Limited715715878163163
Nightjar Renewables Limited485600600115-
Fubar Stirling Limited12688(118)-
 1,8262,0422,256430214

INVESTMENT MANAGER’S REPORT - DP67 SHARE POOL

Introduction
The DP67 Share pool has now passed the five-year anniversary for those investors who took advantage of the Share Realisation and Reinvestment Scheme in 2013.  Accordingly, the process of realising the investment portfolio and returning funds to investors is underway.

Net Asset Value and results
The Net Asset Value (“NAV”) per DP67 Share at 31 March 2019 stood at 48.5p, a decrease of 1.5p or 3.0% over the year. Total Return stands at 98.3p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per Share.

The loss on ordinary activities after taxation for the year was £166,000 (2018: profit of £652,000), comprising a revenue profit of £127,000 (2018: £20,000) and a capital loss of £293,000 (2018: gain of £632,000).

Venture Capital investments
As at 31 March 2019, the DP67 Share pool held a portfolio of six Venture Capital investments, with a total value of £3.6 million.

Portfolio activity
One full and one partial divestment took place during the year, generating proceeds of £689,000 and a total gain over opening value of £41,000.

The largest realisation was the sale of Oak Grove Renewables Limited, the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved proceeds of £502,000, representing a gain over opening value of £10,000.

£187,000 was also received from Snow Hill Developments LLP. The DP67 Share pool has a membership interest in the business under which a fixed return accrues. The disposal marks the return of some of this fixed value to the Share pool. The investment in Snow Hill Developments LLP was also uplifted by £67,000 as at 31 March 2019, as the effect of discounting the future cash receipts continues to unwind over time.

Portfolio valuation
The DP67 portfolio was reduced in value by a total of £413,000 during the period.

The majority of the total valuation reduction is attributable to Yamuna Energy Limited, the owner and operator of a wood pelleting plant in Austria. The site experienced two fires during the year which halted production and led to a loss of key customers. Downing is working with the management team at present, however it is unlikely that any value will be recovered and the investment has been fully provided against as a result.

London City Shopping Centre Limited has also been reduced to £nil as the company was unable to secure the finance it required in order to progress with its development plans.
A Valuation uplift of £19,000 was also recognised in respect of Fenkle Street LLP, as the impact of discounting the expected future cash flows unwinds over time.

Outlook
The focus for the DP67 Share pool is now on realising the remaining investments. We anticipate that the remaining realisations will take place in the coming months and further dividends will be declared once this process has been completed.

Downing LLP

REVIEW OF INVESTMENTS - DP67 SHARE POOL
The following investments were held at 31 March 2019:

  CostValuationValuation
movement
in period
% of
portfolio
   £’000  £’000 £’000 
Venture Capital investments     
Cadbury House Holdings Limited 1,4091,613-33.4%
Snow Hill Developments LLP** 4747416715.4%
Fenkle Street LLP** 4056971914.4%
Gatewales Limited* 343527-10.9%
Yamuna Renewables Limited 400-(400)0.0%
London City Shopping Centre Limited** 99-(99)0.0%
      
  3,1303,578(413)74.1%
      
Cash at bank and in hand  1,251 25.9%
Total investments  4,829 100.0%

*partially qualifying investment
**non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2019
DISPOSALS

 CostValuation
at 01/04/18
Proceeds(Loss)/
profit
vs. cost
Realised
gain
 £’000£’000£’000£’000£’000
Venture Capital investments     
Oak Grove Renewables Limited820492502(318)10
Snow Hill Developments LLP**1101561877731
 930648689(241)41

*partially qualifying investment
**non-qualifying investment

INVESTMENT MANAGER’S REPORT - DP2011 GENERAL SHARE POOL

Introduction
The DP2011 General Share pool has made good progress in realising investments, with two full and two partial exits completed during the year. 

Net Asset Value and results
The combined Net Asset Value (“NAV”) of one DP2011 General Ordinary Share and one DP2011 General A Share at 31 March 2019 stood at 13.3p, which has remained unchanged from 31 March 2018, after adjusting for dividends paid. Total Return stands at 105.3p per share compared to an initial cost to Shareholders, net of income tax relief, of 70.0p per Share.

The profit on ordinary activities after taxation for the year was £4,000 (2018: £760,000) comprising a revenue loss of £47,000 (2018: of £112,000) and a capital gain of £51,000 (2018: £872,000).
Venture Capital investments
The DP2011 General Share pool began the year with £2.2 million of investments and ended with £1.9 million spread across a portfolio of five Venture Capital investments.

Investment activity
The process of exiting investments in the portfolio is underway. Two full and two partial exits occurred during the year, generating proceeds of £419,000 and a gain over opening value of £38,000.

The largest realisation was the sale of Oak Grove Renewables Limited, the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved proceeds of £254,000, representing a gain over opening value of £5,000.

£141,000 was also received from Snow Hill Developments LLP. The DP2011 General Share pool has a membership interest in the business under which a fixed return accrues. The disposal marks the return of some of this fixed value to the Share pool. The investment in Snow Hill Developments LLP was also uplifted by £138,000 as at 31 March 2019, as the effect of discounting the future cash receipts continues to unwind over time.

The residual investments in Fubar Stirling and Mosaic Spa & Leisure Limited were also exited in full during the year. The loan notes investments were being repaid over time and the amounts received during the year constitute the final settlements. The loss over cost in respect of Fubar Stirling Limited relates to the equity interest in the company, to which no value ultimately accrued.

Portfolio valuation
During the year, the carrying value of the DP2011 General portfolio was increased in value by £33,000.

Wickham Solar Limited owns a portfolio of ground mounted solar panels in Lincolnshire. The company is performing to budget and an uplift of £10,000 was recognised in the year as a result.

London City Shopping Centre Limited has been reduced to £nil, as the company was unable to secure the finance it required in order to progress with its plans.

The DP2011 General Share pool’s interest in Mosaic Spa and Health Clubs Limited has also been reduced in value, by £27,000, as the business is behind on its loan repayments.

Outlook

The focus for the Share pool is on realising the remaining investments at sensible valuations. We hope to be in a position to announce a final distribution to Shareholders during the summer.

Downing LLP

REVIEW OF INVESTMENTS - DP2011 GENERAL SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:

  CostValuationValuation
Movement
in period
% of
portfolio
   £’000  £’000 £’000 
Venture Capital investments     
Snow Hill Developments LLP** 6801,20613848.5%
Wickham Solar Limited 5506601026.5%
Mosaic Spa and Health Clubs Limited* 8629(27)1.2%
Odysian (Holdings) Limited 233--0.0%
London City Shopping Centre Limited** 88-(88)0.0%
  1,6371,8953376.2%
Cash at bank and in hand  594 23.8%
Total investments  2,489 100.0%

*partially qualifying investment
**non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2019

DISPOSALS

 CostValuation
at 01/04/18
Proceeds(Loss)/profit
vs. cost
Realised
gain
 £’000£’000£’000£’000£’000
Venture Capital investments     
Oak Grove Renewables Limited400254259(141)5
Snow Hill Developments LLP701101417131
Fubar Stirling Limited13399(124)-
Mosaic Spa and Health Clubs Limited*10810-2
 613381419(194)38

*partially qualifying investment

INVESTMENT MANAGER’S REPORT - DP2011 STRUCTURED SHARE POOL
Introduction

The DP2011 Structured Share pool has made good progress during the year in realising investments, with one full exit and two partial exits having been completed. 

As at 31 March 2019 the DP2011 Structured Share pool held a portfolio of three Venture Capital investments, with a total value of £0.7 million.

Net Asset Value and results
The Net Asset Value (“NAV”) of a combined holding of one DP2011 Structured Ordinary Share and one DP2011 Structured A Share at 31 March 2019 stood at 9.9p, a decrease of 0.1p or 0.7% over the year after adjusting for dividends paid. Total Return stands at 104.9p per share compared to an initial cost to Shareholders, net of income tax relief, of 70.0p per Share.

The loss on ordinary activities after taxation for the year was £26,000 (2018: profit of £405,000), comprising a revenue loss of £19,000 (2018: profit of £91,000) and a capital loss of £7,000 (2018: £496,000).

Venture Capital investments
Investment activity
The DP2011 Structured Share pool began the year with £1.0 million of investments and ended the year with £0.7 million spread across a portfolio of three Venture Capital investments.

One full and two partial disposals were made during the year, generating total proceeds of £366,000 and a total realised gain of £8,000.

The largest realisation was the sale of Oak Grove Renewables Limited, the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved proceeds of £353,000, representing a gain over opening value of £6,000.

The residual investments in Fubar Stirling and Mosaic Spa & Leisure Limited were also exited in full during the year. The loan notes investments were being repaid over time and the amounts received during the year constitute the final settlements. The loss over cost in respect of Fubar Stirling Limited relates to the equity interest in the company, to which no value ultimately accrued.

Portfolio valuation
Valuation movements in the year resulted in a net reduction of £8,000.

Wickham Solar Limited owns a portfolio of ground mounted solar panels in Lincolnshire. The company is performing to budget and an uplift of £10,000 was recognised in the year as a result.

The DP2011 Structured Share pool’s interest in Mosaic Spa and Health Clubs Limited has also been reduced in value, by £18,000, as the business is behind on its loan repayments.

Outlook

The focus for the Share pool is on realising the remaining investments at values which maximise returns for Shareholders. We hope to be in a position to announce a final distribution to Shareholders during the summer.

Downing LLP

REVIEW OF INVESTMENTS - DP2011 STRUCTURED SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:

  CostValuationValuation
Movement
in period
% of
portfolio
   £’000  £’000 £’000 
Venture Capital investments     
Wickham Solar Limited 5506601053.0%
Mosaic Spa and Health Clubs Limited* 5819(18)1.5%
Odysian (Holdings) Limited 155--0.0%
  763679(8)54.5%
      
Cash at bank and in hand  566 45.5%
Total investments  1,245 100.0%

*partially qualifying investment
All Venture Capital investments are incorporated in England and Wales.

Investment movements for the year ended 31 March 2019

DISPOSALS

 CostValuation
at 01/04/18
Proceeds(Loss)/profit
vs. cost
Realised
gain
 £’000£’000£’000£’000£’000
Venture Capital investments     
Oak Grove Renewables Limited545347353(192)6
Fubar Stirling Limited9066(84)-
Mosaic Spa and Health Clubs Limited*65712
 641358366(275)8

*partially qualifying investment

INVESTMENT MANAGER’S REPORT - GENERALIST SHARE POOL

Introduction
As at 31 March 2019, the Generalist Share Pool held a portfolio of 26 Venture Capital investments and three Liquidity investments, with a combined value of £24.7 million.

Net Asset Value and results
As at 31 March 2019, the NAV of a Generalist share stood at 83.5p, a decrease of 12.0p over the year. The fall in value arises from several areas. 5.4p of the decrease is attributable to the Liquidity investments which have been negatively impacted by the falls in global markets towards the end of 2018. 5.5p of the fall arises from net losses in the Venture Capital portfolio, where two investments in particular have had significant provisions made against them. The remaining 1.1p of the decrease has arisen from the surplus of running costs over income.

The loss on ordinary activities for the Generalist Share pool for the year was £3.9 million (2018: £1.3 million), comprising a revenue loss of £283,000 (2018: £381,000) and a capital loss of £3.6 million (2018: £953,000).

Investment activity
During the year we made good progress in building the VCT Qualifying portfolio of the Generalist Share pool, having invested a total of £10.9 million in 17 companies.

New Venture Capital investments
A description of each of the new VCT Qualifying investments made during the year is shown below.

£1.3 million was invested in Rated People Limited, an online home services marketplace that aims to connect homeowners with high quality local tradespeople.

£1.1 million was invested in Lignia Wood Company Limited (formerly Fibre 7 UK Limited). The company’s product, LIGNIA®, is produced by impregnating sustainably-sourced softwood with resin such that it has an appearance resembling a tropical hardwood with a better appearance, durability, stability and fire resistance than many high value hardwoods such as oak and teak.

£1.0 million was invested in Firefly Learning Limited, the developer of a suite of school learning tools which allow teachers to share lesson plans, assign and review homework and communicate with students and parents online.

£1.0 million was invested in Imagen Limited, the developer of a SaaS video management platform which holds both current and archive footage for major sporting organisations and news outlets, including Premier League, World Tennis Association and the BBC.

£803,000 was invested in Virtual Class Limited, trading as Third Space Learning, via two fundraising tranches. The Company has developed an online educational platform that provides mathematics tuition to pupils studying for their Key Stage 2 exams.
£784,000 was invested in Hackajob Limited, the developer of an online recruitment platform that allows companies to hire tech talent directly through a combination of domain-specific challenges, data and human intelligence.

£741,000 was invested in Glownet Limited, the developer of a technology solution for organisers of mass-attendance live events, which allows attendees to make cashless payments at the event.

£500,000 was invested in Exonar Limited, a developer of software solutions which help ensure compliance with data-centric regulations and imperatives, including GDPR.

£412,000 was invested in ADC Biotechnology Limited, a company creating innovative new technology which aims to speed up, simplify and lower the costs of the processes involved in the production of new Antibody Drug Conjugates (ADCs). This investment was made alongside £1.1 million from the Healthcare Share Pool.

£300,000 was invested in Arecor Limited, the developer of biopharmaceuticals and proprietary diabetes-related products, including ultra-fast acting insulin to treat type 1 and 2 diabetes. This investment was made alongside £1.1 million from the Healthcare Share Pool.

£200,000 was invested in Channel Mum Limited, the developer of a community-based online platform for parents.

£167,000 was invested in Masters of Pie Limited, an early-stage technology firm specialising in virtual and augmented reality software for manufacturing and wider enterprise solutions.

Follow-on Venture Capital investments
A description of each of the existing VCT Qualifying businesses to which the Generalist Share pool provided further funding during the year is shown below.

£991,000 was invested in Live Better With Limited, the developer of a healthcare platform aiming to help people with long-term medical conditions, focusing on non-medical products that make day-to-day life better for patients. The Generalist Share pool has now invested a total of £1.2 million in the business, alongside £1.1 million from the Healthcare Share pool.

£639,000 was invested in E Fundamentals (Group) Limited, via two fundraising tranches, bringing the total invested to £917,000. The company provides a data analytics service which provides online merchandising insights to brand owners, to enable them to improve their online revenues.

£417,000 was invested in BridgeU Corporation, the developer of a platform providing intelligent university and course matching which is tailored to the individual student. £811,000 has been invested by the Generalist Share pool to date.

A further £278,000 was invested in Empiribox Holdings Limited, bringing the total invested to £1.0 million. The company provides equipment, lesson plans and CPD‐accredited support for teachers to deliver engaging and practical science lessons to UK primary school children.

A further £218,000 was invested in Xupes Limited, bringing the total investment to £818,000. Xupes is an online retailer of pre-owned luxury goods including designer watches, handbags, jewellery and antiques.

Liquidity Investments
As Shareholders will be aware, where the Generalist Share pool invests in other Downing-managed funds, Downing provides fee rebates to the Generalist Share pool such that its investors are not “double-charged”. As MI Downing Diversified Global Managers Fund moved away from being under Downing’s management during the year, the decision was taken to exit from this investment, as the fee economies which the Generalist Share pool could previously take advantage of fell away. The exit generated proceeds of £1.8 million and resulted in a loss against cost of £23,000.

Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Generalist Share pool was reduced in value by a total of £1.7 million.
The largest valuation decrease was in respect of Ormsborough Limited. The company has experienced some significant challenges in respect of its pub developments, which have set the company back considerably. As a result, the Generalist Share pool’s investment in the company was been written down by £706,000 during the year. Downing to continue to work with the company to make improvements to its operations.

The Share pool’s investment in Glownet Limited was also written down during the year. The carrying value of the investment was reduced by £556,000, as a result of the company performing substantially behind budget and the impact this has had on its working capital.

Virtual Class Limited (Third Space Learning), the developer of an online educational platform was written reduced in value by £259,000 during the year, as a result of the company being behind budget. Steps are being taken to rationalise the business and we hope to see improvement in this regard.

The investment in ADC Biotechnology Limited was reduced in value by £146,000 during the year, in line with a new funding round, which was undertaken at a lower price to the first round under which the Share pool invested. The company is running behind plan as a result of delayed approvals on its production site. However, production is expected to commence shortly and we continue to work closely with the management team.

Empiribox Holdings Limited was reduced in value by £131,000 during the year, in view of the fact that the business has not met its sales targets and has therefore missed its budget.

Destiny Pharma plc (“Destiny Pharma”), which is listed on London’s Alternative Investment Market (AIM), was also revalued downwards as at 31 March 2019, by £102,000 in line with the prevailing quoted price at that date. AIM prices typically fluctuate considerably in a given year and the reduction in the share price of the Destiny Pharma is symptomatic of this, as the business is progressing well.

Other valuation movements in the Venture Capital portfolio amounted to a net valuation uplift of £157,000.

Liquidity investments
The carrying values of the liquidity investments have been adjusted to reflect their quoted prices as at 31 March 2019. This resulted in a valuation reduction of £1.7 million for the year. This decrease is largely due to adverse conditions in global markets during the end of 2018, which have impacted quoted prices.

MI Downing UK Micro-Cap Growth Fund and Downing Strategic Micro-Cap Investment Trust plc in particular, have a strategic approach to the underlying business in which they invest. Given this, we feel that there continues to be the potential for growth in these underlying businesses.

Outlook
The building of the Venture Capital portfolio of the Generalist Share pool progressed well during the year and we expect to see a similar level of investment activity over the coming year, as we work to deploy the proceeds from the 2018 Offer, in addition to the residual proceeds from the 2016 Offer.

Downing LLP

REVIEW OF INVESTMENTS - GENERALIST SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:

  CostValuationValuation
Movement
in period
% of
portfolio
   £’000  £’000 £’000 
Venture Capital investments     
Live Better With Limited 1,2111,284733.9%
Rated People Limited 1,2821,282-3.9%
Lignia Wood Company Limited 1,1111,200893.6%
Firefly Learning Limited 1,0471,047-3.2%
Imagen Limited 1,0001,000-3.0%
E-Fundamentals (Group) Limited 917917-2.7%
Maverick Pubs Limited 1,000900(100)2.7%
Empiribox Holdings Limited 1,028897(131)2.7%
Xupes Limited 818818-2.5%
BridgeU Limited 811811-2.4%
Hackajob Limited 784784-2.4%
Volo Commerce Limited 567567-1.7%
Virtual Class Limited 803544(259)1.6%
Exonar Limited 500500-1.5%
Fenkle Street LLP* 301372711.1%
Arecor Limited 300300-0.9%
ADC Biotechnology Limited 412266(146)0.8%
Destiny Pharma plc^ 500261(102)0.8%
Limitless Technology Limited 173219460.7%
Channel Mum Limited 200200-0.6%
Ormsborough Limited 900194(706)0.6%
Glownet Limited 741185(556)0.6%
Masters of Pie Limited 167167-0.5%
Snow Hill Developments LLP* 6492230.3%
Mosaic Spa and Health Clubs Limited* 3217(15)0.1%
London City Shopping Centre Limited* 30-(30)0.0%
  16,69914,824(1,743)44.8%
Liquidity investments     
MI Downing Monthly Income Fund* 3,9503,503(319)10.5%
MI Downing UK Micro-Cap Growth Fund* 4,0253,327(534)10.0%
Downing Strategic Micro-Cap Investment Trust plc*^ 4,1002,911(861)8.7%
  12,0759,741(1,714)29.2%
      
  28,77424,565(3,457)74.0%
      
Cash at bank and in hand  8,661 26.0%
Total investments  33,226 100.0%

All VCT Qualifying Investments are incorporated in England and Wales.
*non-qualifying investment
^listed and traded on the London Stock Exchange

Investment movements for the year ended 31 March 2019

ADDITIONS

 Cost
  £’000
Venture Capital investments 
Rated People Limited1,282
Lignia Wood Company Limited1,111
Firefly Learning Limited1,047
Imagen Limited1,000
Live Better With Limited991
Virtual Class Limited803
Hackajob Limited784
Glownet Limited741
E-Fundamentals (Group) Limited639
Exonar Limited500
BridgeU Limited417
ADC Biotechnology Limited412
Arecor Limited300
Empiribox Holdings Limited278
Xupes Limited218
Channel Mum Limited200
Masters of Pie Limited167
 10,890

DISPOSALS

 CostValuation
at
01/04/18
 Proceeds(Loss)/
profit
vs. cost
Realised
(loss)/
gain
 £’000£’000  £’000£’000£’000
Venture Capital investments     
Fenkle Street LLP6060-(60)(60)
Snow Hill Developments LLP2223231-
Mosaic Spa and Health Clubs Limited*65611
 878829(58)(59)
Liquidity investments     
MI Downing Diversified Global Managers Fund1,8001,8331,777(23)(56)
 1,8001,8331,777(23)(56)
      
 1,8871,9211,806(81)(115)

*partially qualifying investment

INVESTMENT MANAGER’S REPORT - HEALTHCARE SHARE POOL

Introduction
As at 31 March 2019, the Healthcare Share pool held a portfolio of seven Venture Capital investments and three Liquidity investments, with a combined value of £7.4 million.

Net Asset Value and results
As at 31 March 2019, the NAV of a Healthcare share stood at 83.3p, a decrease of 11.3p over the year. 3.3p of the decrease relates to investment revaluations in the Venture Capital portfolio, where, as is to be expected, some of the early stage companies have fallen a little behind plan. 5.4p relates to a reduction in value of the Liquidity Investments which have been negatively impacted by the falls in global markets towards the end of 2018. The remaining 2.6p of the NAV decrease is attributable to the surplus of running costs over income.

The return on ordinary activities for the Healthcare Share pool for the year was a loss of £1.4 million (2018: £589,000), being a revenue loss of £198,000 (2018: £160,000) and a capital loss of £1.2 million (2018: £429,000).

Investment activity
During the year a total of £4.9 million was invested in six venture capital investments.

New Venture Capital investments
A description of each of the new VCT Qualifying investments made during the year is shown below.

£1.1 million was invested in Arecor Limited, the developer of biopharmaceuticals and proprietary diabetes-related products, including ultra-fast acting insulin to treat type 1 and 2 diabetes. This investment was made alongside £300,000 from the Generalist Share Pool.

£1.1 million was invested in ADC Biotechnology Limited, a company creating innovative new technology which aims to speed up, simplify and lower the costs of the processes involved in the production of new Antibody Drug Conjugates (ADCs). The company has also been provided with an investment of £412,000 from the Generalist Share Pool.

£1.0 million was invested in Open Bionics Limited, the designer and manufacturer of affordable bionic prosthetic hands by using 3D scanning and printing. The company’s current focus is on becoming the market leader for bionic hands, before entering the new higher-growth prosthetic/orthotic markets.

£556,000 was invested in Adaptix Limited, the developer of a new flatpanel x-ray source which will improve the accuracy and mobility of 3D imaging. The company’s technology will make portable, low radiation-dose 3D imaging more accessible and lower-cost than systems currently available on the market. The technology will also allow hospitals to provide faster and more definitive diagnoses.

£278,000 was invested in Future Health Works Limited, the developer of myrecovery, a mobile app that informs and empowers patients through every step of their orthopedic treatment journey, customised to their procedure and hospital. The app improves efficiency across the healthcare value chain and delivers actionable insight through data analytics. In the long term, myrecovery’s product is designed to save money and time to both practitioners and patients.

Follow-on Venture Capital investments
A further £886,000 was invested in Live Better With Limited, the developer of a healthcare platform aiming to help people with long-term medical conditions, focusing on non-medical products that make day-to-day life better for patients. The Healthcare Share pool has invested a total of £1.1 million to date, alongside £1.2 million from the Generalist Share pool.

Liquidity Investments
As Shareholders will be aware, where the Healthcare Share pool invests in other Downing-managed funds, Downing provides fee rebates to the Healthcare Share pool such that its investors are not “double-charged”. As MI Downing Diversified Global Managers Fund moved away from being under Downing’s management during the year, the decision was taken to exit from this investment, as the fee economies which the Healthcare Share pool could previously take advantage of fell away. The exit generated proceeds of £935,000 and resulted in a loss against cost of £15,000.

Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Healthcare Share pool was reduced in value by £1.0 million.

The largest valuation reduction was in respect of ADC Biotechnology Limited, with the Healthcare Share pool’s investment having been reduced in value by £520,000 during the year. This was to bring the valuation in line with a new funding round, which was undertaken at a lower price to the first round under which the Share pool invested. The company is running behind plan as a result of delayed approvals on its production site. However, production is expected to commence shortly and we continue to work closely with the management team.

Destiny Pharma plc (“Destiny Pharma”), which is listed on London’s Alternative Investment Market (AIM), was also revalued downwards as at 31 March 2019, by £153,000 in line with the prevailing quoted price at that date. AIM prices typically fluctuate considerably in a given year and the reduction in the share price of the Destiny Pharma is symptomatic of this, as the business is progressing well.

Other movements in the Venture Capital portfolio amounted to a net uplift of £8,000.

Liquidity investments
The carrying values of the liquidity investments have been adjusted to reflect their quoted prices as at 31 March 2019. This resulted in a valuation reduction of £1.7 million for the year. This decrease is largely due to adverse conditions in global markets, which have reduced quoted prices.

MI Downing UK Micro-Cap Growth Fund and Downing Strategic Micro-Cap Investment Trust plc in particular, have a strategic approach to the underlying business in which they invest. Given this, we feel that there continues to be the potential for growth in these underlying businesses.

Outlook
The building of the Venture Capital portfolio of the Healthcare Share pool progressed well during the year and we expect to see a similar level of investment activity over the coming year, as we work to deploy the proceeds from the 2018 Offer, in addition to the residual proceeds from the 2016 Offer.

Downing LLP

REVIEW OF INVESTMENTS - HEALTHCARE SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:

  CostValuationValuation
Movement
in period
% of
portfolio
   £’000 £’000 £’000 
Venture Capital investments     
Live Better With Limited 1,1061,179738.5%
Arecor Limited 1,1001,100-8.0%
Open Bionics Limited 1,0001,000-7.2%
ADC Biotechnology 1,054534(520)3.9%
Adaptix Limited 556491(65)3.5%
Destiny Pharma plc^ 750392(153)2.8%
Future Health Works Limited 278278-2.0%
  5,8444,974(665)35.9%
Liquidity Investments     
MI Downing Monthly Income Fund* 1,100978(89)7.1%
MI Downing UK Micro-Cap Growth Fund* 1,125926(149)6.7%
Downing Strategic Micro-Cap Investment Trust plc*^ 700497(147)3.6%
  2,9252,401(385)17.4%
      
  8,7697,375(1,050)53.3%
      
Cash at bank and in hand  6,461 46.7%
Total investments  13,836 100.0%

*non-qualifying investment
^listed and traded on the London Stock Exchange

Investment movements for the year ended 31 March 2019

ADDITIONS

 Cost
  £’000
Venture Capital investments 
Arecor Limited1,100
ADC Biotechnology1,054
Open Bionics Limited1,000
Live Better With Limited886
Adaptix Limited556
Future Health Works Limited278
 4,874

DISPOSALS

 CostValuation
at 01/04/18
 ProceedsLoss
vs. cost
Realised
loss
 £’000£’000  £’000£’000£’000
Liquidity investments     
Downing Diversified Global Managers Fund950962935(15)(27)
 950962935(15)(27)

*partially 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) including Financial Reporting Standard 102, the financial reporting standard applicable in the UK and Republic of Ireland (FRS 102). Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements the Directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
  • carry out a robust assessment of the principal risks facing the Company, as set out in the Strategic report on page 46 of the Annual Report.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions, to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In addition, each of the Directors considers that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position, performance, business model and strategy.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in the Annual Reports may differ from legislation in other jurisdictions.

Directors’ statement pursuant to the Disclosure Guidance and Transparency Rules
Each of the Directors, whose names and functions are listed on page 3 of the Annual Report, confirms that, to the best of each person’s knowledge:

  • the financial statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
  • the management report included within the Report of the Directors, Strategic report, Chairman’s Statement, Investment Manager’s Report, and Review of Investments includes a fair review of the development and performance of the business and the position of the company, together with a robust assessment of the principal risks and uncertainties that it faces.

Statement as to disclosure of information to Auditors
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.

By order of the Board

Grant Whitehouse
Secretary of Downing FOUR VCT plc

INCOME STATEMENT
for the year ended 31 March 2019


 
 Year ended 31 March 2019 Year ended 31 March 2018
  RevenueCapitalTotal RevenueCapitalTotal
  £’000£’000£’000 £’000£’000£’000
         
Income 378230608 765-765
         
Net (loss)/gain on investments -(5,091)(5,091) -1,4251,425
         
  378(4,861)(4,483) 7651,4252,190
         
Investment management fees (386)(386)(772) (596)(596)(1,192)
         
Other expenses (468)-(468) (805)(409)(1,214)
         
(Loss)/return on ordinary activities before tax(476)(5,247)(5,723) (636)420(216)
         
Tax on total comprehensive income and ordinary activities 7-7 (160)-(160)
         
(Loss)/return attributable to equity Shareholders, being total comprehensive income for the year(469)(5,247)(5,716) (796) 

420
(376)
         
Basic and diluted return per share:       
DSO B Share --- (0.2p)0.2p-
DSO C Share --- (0.2p)0.2p-
DSO D Share 0.6p2.0p2.6p 0.7p5.1p5.8p
DP67 Share 1.1p(2.6p)(1.5p) 0.2p5.7p5.9p
DP2011 General Share --- ---
DP2011 General A Share (0.3p)0.3p- (0.6p)4.7p4.1p
DP2011 Structured Share --- ---
DP2011 Structured A Share (0.2p)(0.1p)(0.3p) (0.6p)4.0p3.4p
DP2011 Low Carbon Share --- (0.6p)(9.1p)(9.7p)
Generalist Share (0.9p)(11.1p)(12.0p) (1.7p)(4.5p)(6.2p)
Healthcare Share (1.6p)(9.7p)(11.3p) (2.5p)(6.9p)(9.4p)

The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standard 102 (“FRS 102”).  The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommenced Practice issued in February 2018 by the Association of Investment Companies (“AIC SORP”).

INCOME STATEMENT (analysed by Share pool)
for the year ended 31 March 2019
Split as:

DSO D Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income14-14 166-166
        
Net (loss)/gain on investments-(141)(141) -442442
        
 14(141)(127) 166442608
        
Investment management fees(17)(17)(34) (46)(46)(92)
        
Other expenses(46)-(46) (53)-(53)
        
(Loss)/return on ordinary activities before tax(49)(158)(207) 67396463
        
Tax on total comprehensive income and ordinary activities--- (10)-(10)
        
(Loss)/return attributable to equity Shareholders, being total comprehensive income for the year(49)(158)(207) 57396453

DP67 Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income214112326 247-247
        
Net (loss)/gain on investments-(372)(372) -683683
        
 214(260)(46) 247683930
        
Investment management fees(33)(33)(66) (51)(51)(102)
        
Other expenses(26)-(26) (62)-(62)
        
Return/(loss) on ordinary activities before tax155(293)(138) 134632766
        
Tax on total comprehensive income and ordinary activities(28)-(28) (114)-(114)
Return/(loss) attributable to equity Shareholders, being total comprehensive income for the year127(293)(166) 20632652

DP2011 General Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income4-4 160-160
        
Net gain on investments-7171 -947947
        
 47175 1609471,107
        
Investment management fees(20)(20)(40) (75)(75)(150)
        
Other expenses(31)-(31) (196)-(196)
        
(Loss)/return on ordinary activities before tax(47)514 (111)872761
        
Tax on total comprehensive income and ordinary activities--- (1)-(1)
        
(Loss)/return attributable to equity Shareholders, being total comprehensive income for the year(47)514 (112)872760

DP2011 Structured Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income3-3 75-75
        
Net gain on investments--- -535535
        
 3-3 75535610
        
Investment management fees(7)(7)(14) (39)(39)(78)
        
Other expenses(15)-(15) (126)-(126)
        
(Loss)/return on ordinary activities before tax(19)(7)(26) (90)496406
        
Tax on total comprehensive income and ordinary activities--- (1)-(1)
        
(Loss)/return attributable to equity Shareholders, being total comprehensive income for the year(19)(7)(26) (91)496405

Generalist Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income114118232 62-62
        
Net loss on investments-(3,572)(3,572) -(718)(718)
        
 114(3,454)(3,340) 62(718)(656)
        
Investment management fees(180)(180)(360) (235)(235)(470)
        
Other expenses(252)-(252) (208)-(208)
        
Loss on ordinary activities before tax(318)(3,634)(3,952) (381)(953)(1,334)
        
Tax on total comprehensive income and ordinary activities35-35 ---
        
Loss attributable to equity Shareholders, being total comprehensive income for the year(283)(3,634)(3,917) (381)(953)(1,334)

Healthcare Share pool


 
Year ended 31 March 2019 Year ended 31 March 2018
 RevenueCapitalTotal RevenueCapitalTotal
 £’000£’000£’000 £’000£’000£’000
        
Income29-29 9-9
        
Net loss on investments-(1,077)(1,077) -(332)(332)
        
 29(1,077)(1,048) 9(332)(323)
        
Investment management fees(129)(129)(258) (97)(97)(194)
        
Other expenses(98)-(98) (72)-(72)
        
Loss on ordinary activities before tax(198)(1,206)(1,404) (160)(429)(589)
        
Tax on total comprehensive income and ordinary activities--- ---
        
Loss attributable to equity Shareholders, being total comprehensive income for the year(198)(1,206)(1,404) (160)(429)(589)

BALANCE SHEET
as at 31 March 2019


 
 2019 2018
 £’000 £’000
     
Fixed assets    
Investments 39,394 35,192
     
Current assets    
Debtors 800 695
Cash at bank and in hand 18,443 21,063
  19,243 21,758
     
Creditors: amounts falling due within one year (485) (615)
     
Net current assets18,758 21,143
Net assets 58,152 56,335
     
Capital and reserves    
Called up Share capital  138 188
Capital redemption reserve - 31
Special reserve 47,040 8,021
Share premium account 7,172 43,904
Funds held in respect of Shares not yet allotted 4,772 420
Revaluation reserve (4,158) 234
Capital reserve – realised 4,940 4,641
Revenue reserve (1,752) (1,104)
Total equity Shareholders’ funds 58,152 56,335
    
Basic and diluted Net Asset Value per Share:   
DSO B Share - -
DSO C Share - -
DSO D Share 27.8p 54.4p
DP67 Share  48.5p 50.0p
DP2011 General Ordinary Share - -
DP2011 General A Share 13.3p 20.3p
DP2011 Structured Ordinary Share - -
DP2011 Structured A Share  9.9p 15.0p
DP2011 Low Carbon Share - -
Generalist Share 83.5p 95.5p
Healthcare Share 83.3p 94.6p

BALANCE SHEET (analysed by Share pool)
as at 31 March 2019
Split as:

DSO D Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 1,302 3,699
Current assets    
Debtors 1 66
Cash at bank and in hand 910 582
  911 648
Creditors: amounts falling due within one year (28) (67)
Net current assets 883 581
Net assets 2,185 4,280
     
Capital and reserves    
Called up share capital 8 8
Special reserve 2,259 4,201
Revaluation reserve 153 471
Capital reserve – realised (148) (362)
Revenue reserve (87) (38)
Total equity Shareholders’ funds 2,185 4,280

DP67 Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 3,578 4,639
Current assets    
Debtors 669 552
Cash at bank and in hand 1,251 519
  1,920 1,071
Creditors: amounts falling due within one year (70) (116)
Net current assets 1,850 955
Net assets 5,428 5,594
     
Capital and reserves    
Called up share capital 11 11
Capital redemption reserve - 31
Special reserve 534 805
Revaluation reserve 547 579
Capital reserve – realised 3,622 3,581
Revenue reserve 714 587
Total equity Shareholders’ funds 5,428 5,594

DP2011 General Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 1,895 2,243
Current assets    
Debtors 1 -
Cash at bank and in hand 594 1,569
  595 1,569
Creditors: amounts falling due within one year (31) (68)
Net current assets 564 1,501
Net assets 2,459 3,744
     
Capital and reserves    
Called up share capital – Ordinary Shares 16 16
Called up share capital – A Shares 18 18
Special reserve 652 2,209
Revaluation reserve 636 353
Capital reserve – realised 867 831
Revenue reserve 270 317
Total equity Shareholders’ funds 2,459 3,744

DP2011 Structured Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 679 1,045
Current assets    
Debtors 3 3
Cash at bank and in hand 566 877
  569 880
Creditors: amounts falling due within one year (15) (37)
Net current assets 554 843
Net assets 1,233 1,888
     
Capital and reserves    
Called up share capital – Ordinary Shares 11 11
Called up share capital – A Shares 13 13
Special reserve 332 1,204
Revaluation reserve 109 (119)
Capital reserve – realised 599 591
Revenue reserve 169 188
Total equity Shareholders’ funds 1,233 1,888

Generalist Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 24,565 19,053
Current assets    
Debtors 124 73
Cash at bank and in hand 8,661 10,563
  8,785 10,636
Creditors: amounts falling due within one year (220) (215)
Net current assets 8,565 10,421
Net assets 33,130 29,474
     
Capital and reserves    
Called up share capital 43 38
Special reserve 31,111 (240)
Share premium account 4,692 31,508
Revaluation reserve (4,209) (718)
Funds held in respect of Shares not yet allotted 3,396 398
Revenue reserve (1,903) (1,512)
Total equity Shareholders’ funds 33,130 29,474

Healthcare Share pool


 
 2019 2018
  £’000 £’000
Fixed assets    
Investments 7,375 4,513
Current assets    
Debtors 2 1
Cash at bank and in hand 6,461 6,953
  6,463 6,954
Creditors: amounts falling due within one year (121) (112)
Net current assets 6,342 6,842
Net assets 13,717 11,355
     
Capital and reserves    
Called up share capital 18 15
Special reserve 12,152 (100)
Share premium account 2,480 12,396
Revaluation reserve (1,394) (332)
Funds held in respect of Shares not yet allotted 1,376 22
Revenue reserve (915) (646)
Total equity Shareholders’ funds 13,717 11,355

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

 Called
up
Share
capital
Capital
Redemption
reserve
Special
reserve
Share
premium
account
Funds held
in respect
of Shares
not yet
allotted
Revaluation
Reserve
Capital
reserve
- realised
Revenue
reserve
Total
 £’000£’000£’000£’000£’000£’000£’000£’000£’000
At 31 March 20171443130,62010,07416,137(1,980)3,3311,05559,412
Total comprehensive income-----(225)645(796)(1,363)
Transfer between reserves*--(22,576)--2,43919,548589-
Unallotted Shares----420---420
Transactions with owners         
Dividend paid------(18,883)(589)(19,472)
Purchase of own Shares--(23)-----(23)
Issue of Shares44--33,830(16,137)---17,737
Share issue costs-------(1,363)(1,363)
At 31 March 2018188318,02143,9044202344,641(1,104)56,335
Total comprehensive income-----(5,250)3(469)(5,716)
Transfer between reserves*--(4,960)--8584,102--
Unallotted Shares----4,352---4,352
Transactions with owners         
Dividend paid------(3,806)-(3,806)
Cancellation of Share Premium/ Capital Redemption Reserve-(89)43,993(43,904)-----
Cancellation of Shares(58)58-------
Purchase of own Shares--(14)-----(14)
Issue of Shares8--7,172----7,180
Share issue costs-------(179)(179)
At 31 March 2019138-47,0407,1724,772(4,158)4,940(1,752)58,152

*A transfer of £858,000 (2018: £2.4 million), representing previously recognised unrealised gains and losses on disposal of investments during the year ended 31 March 2019, has been made between the Revaluation Reserve and the Special Reserve.  A transfer of £4.1 million (2018: £19.5 million) representing realised gains and losses on disposal of investments, less capital expenses and capital dividends in the year was made between the Capital Reserve - realised and the Special reserve.  

CASHFLOW STATEMENT
for the year ended 31 March 2019

 DSO D
Share
pool
DP67
Share
pool
DP2011
General
Share
pool
DP2011
Structured
Share
pool
Generalist
Share pool
Healthcare
Share pool
Total
 £’000£’000£’000£’000£’000£’000£’000
Cash flows from operating activities       
(Loss)/return on ordinary activities before taxation(207)(138)4(26)(3,952)(1,404)(5,723)
Losses/(gains) on investments141372(71)-3,5721,0775,091
(Decrease)/increase in creditors(39)(74)(37)(22)409(123)
Decrease/(increase) in debtors65(117)(1)-(50)(1)(104)
Net cash (outflow)/inflow from operating activities(40)43(105)(48)(390)(319)(859)
Corporation tax paid-------
Net cash generated from operating activities(40)43(105)(48)(390)(319)(859)
        
Cash flow from investing activities       
Purchase of investments ----(10,890)(4,874)(15,764)
Proceeds from disposal of investments  

2,256
 

689
 

419
 

366
 

1,806
 

935
 

6,471
Net cash inflow/(outflow) from investing activities2,256689419366(9,084)(3,939)(9,293)
        
Net cash inflow/(outflow) before financing2,216732314318(9,474)(4,258)(10,152)
         
Cash flows from financing activities       
Repurchase of Shares----(14)-(14)
Issue of share capital----4,5892,4127,001
Funds held in respect of Shares not yet allotted----2,9971,3544,351
Equity dividends paid (1,888)-(1,289)(629)--(3,806)
Net cash (outflow)/inflow from financing activities(1,888)-(1,289)(629)7,5723,7667,532
          
Net change in cash328732(975)(311)(1,902)(492)(2,620)
Cash and cash equivalents at start of  the year5825191,56987710,5636,95321,063
Cash and cash equivalents at end of  the year9101,2515945668,6616,46118,443
          
Cash and cash equivalents comprise       
Cash at bank and in hand9101,2515945668,6616,46118,443
Total cash and cash equivalents9101,2515945668,6616,46118,443

CASH FLOW STATEMENT

for the year ended 31 March 2018

 DSO B
Share
pool
DSO D
Share
pool
DP67
Share
pool
DP2011
General
Share
pool
DP2011
Structured
Share
pool
DP2011
LC Share pool
Generalist
Share pool
Healthcare
Share pool
Total
  £’000£’000£’000£’000£’000£’000£’000£’000£’000
Cash flows from operating activities        
Return/(loss) on ordinary activities before taxation43463766761406(732)(1,334)(589)(216)
(Gains)/losses on investments(120)(442)(683)(947)(535)252718332(1,425)
Decrease/(increase) in debtors39188(40)585362140(29)(1)1,244
(Decrease)/increase in creditors(111)(18)10(60)(50)(54)20510628
Net cash (outflow)/inflow from operating activities(149)19153339183(394)(440)(152)(369)
Corporation tax paid (40)10(534)(16)(8)(5)(44)-(637)
New cash generated from operating activities (189)201(481)323175(399)(484)(152)(1,006)
           
Cash flow from investing activities        
Purchase of investments ------(19,546)(4,820)(24,366)
Proceeds from disposal of investments 1,8722,1091,0906,0893,7232,813--17,696
Net cash inflow/(outflow) from investing activities1,8722,1091,0906,0893,7232,813(19,546)(4,820)(6,670)
           
Net cash inflow/(outflow) before financing1,6832,3106096,4123,8982,414(20,030)(4,972)(7,676)
          
Cash flows from financing activities        
Repurchase of Shares --(23)-----(23)
Issue of share capital ------9,3687,42516,793
Equity dividends paid (4,158)(2,163)(2,463)(5,109)(3,049)(2,530)--(19,472)
Net cash (outflow)/inflow from financing activities(4,158)(2,163)(2,486)(5,109)(3,049)(2,530)9,3687,425(2,702)
           
Net change in cash(2,475)147(1,877)1,303849(116)(10,662)2,453(10,378)
Cash and cash equivalents at start of year 2,4754352,3962662811621,2254,50031,441
Cash and cash equivalents at end of year -5825191,569877-10,5636,95321,063
           
Cash and cash equivalents comprise        
Cash at bank and in hand-5825191,569877-10,5636,95321,063
Total cash and cash equivalents-5825191,569877-10,5636,95321,063

NOTES TO THE ACCOUNTS
for the year ended 31 March 2019
Accounting policies

Basis of accounting
The Company has prepared its financial statements in accordance with the Financial Reporting Standard 102 (“FRS 102”) and in accordance with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” revised February 2018 (“SORP”).

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

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

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

Judgements in applying accounting policies and key sources of estimation uncertainty
Investments
All investments are designated as “fair value through profit or loss” assets due to investments being managed and performance evaluated on a fair value basis, in accordance with Section 9.9B(a) of FRS 102. A financial asset is designated within this category if it is both acquired and managed on a fair value basis, with a view to selling after a period of time, in accordance with the Company’s documented investment policy.

It is possible to determine the fair values within a reasonable range of estimates.  The fair value of an investment upon acquisition is deemed to be cost. Thereafter investments are measured at fair value in accordance with FRS 102 sections 11 and 12, together with the International Private Equity and Venture Capital Valuation Guidelines (“IPEV”).

Liquidity investments are measured using bid prices.

For unquoted investments, fair value is established by using the IPEV guidelines. The valuation methodologies for unquoted entities used by the IPEV to ascertain the fair value of an investment are as follows:
-Price of recent investment;
-Multiples;
-Net assets;
-Discounted cash flows or earnings (of underlying business);
-Discounted cash flows (from the investment); and
-Industry valuation benchmarks.

Price of recent investment includes valuations resulting from provisions made against the price of a recent investment.

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

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

The key source of estimation uncertainty is the selection of a multiple to be applied when valuing unquoted companies. Whilst there is a degree of subjectivity in the process of selecting a multiple, the Manager undertakes a rigorous internal valuations process, which involves challenging all relevant valuation inputs. The Board then challenges the proposed valuations once this process is complete.

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

Interest income is accrued on a time apportioned 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 income.

Arrangement fee rebates received from Downing LLP are treated as capital income following the date of investment.

Where previously accrued income is considered unrecoverable a corresponding bad debt expense is recognised.

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

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

Expenses and liabilities not specific to a share class are generally allocated pro rata to the Net Asset Values of each share class.

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

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

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

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

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

Performance Incentive
Amounts payable in respect of Performance Incentive arrangements are recorded at such time that an obligation has been established. An explanation of each of the Performance Incentive arrangements is given in Note 12 of the Annual Report. In respect of the DSO D Share pool, the Performance Incentive is expected to be recorded as an expense item through the Income Statement. Performance Incentives in respect of all other Share classes are paid by way of dividends, and will therefore be recognised in accordance with the dividend accounting policy.

Dividends
Dividends payable are recognised as distributions in the financial statements when the company’s liability to make payment has been established, typically once declared by the Board or approved by Shareholders at the AGM.

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

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

Reportable segments
The Company has one reportable segment as the sole activity of the Company is to operate as a VCT and all of the Company’s resources are allocated to this activity.

Basic and diluted return per share

 Weighted
 Average
 number
of Shares in
 issue*
Revenue
Return
Capital
(loss)/
gain
Total
Comprehensive
income
Return per share is calculated on the following: £’000£’000£’000
     
Year ended 31 March 2019DSO D Shares7,867,247(49)(158)(207)
 DP67 Shares11,192,136127(293)166
 DP2011 General Shares15,644,066---
 DP2011 General A Shares18,418,614(47)514
 DP2011 Structured  Shares10,678,725---
 DP2011 Structured A Shares12,572,817(19)(7)(26)
 Generalist Shares31,412,013(283)(3,634)(3,917)
 Healthcare Shares12,378,737(198)(1,206)(1,404)
      
Year ended 31 March 2018DSO B Shares19,911,070(42)475
 DSO C Shares29,926,070(43)474
 DSO D Shares7,867,24757396453
 DP67 Shares11,229,21120632652
 DP2011 General Shares15,644,066---
 DP2011 General A Shares18,418,614(112)872760
 DP2011 Structured  Shares10,678,725---
 DP2011 Structured A Shares12,572,817(91)496405
 DP2011 Low Carbon Shares7,575,419(44)(688)(732)
 Generalist Shares21,421,985(381)(953)(1,334)
 Healthcare Shares6,267,690(160)(429)(589)

*Excluding Management Shares

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

Basic and diluted Net Asset Value per share

  2019 Net Asset Value 2018 Net Asset Value
 Shares in issuePence per
share
 £’000 Pence per
share
 £’000
 20192018       
DSO B Shares-19,911,070- - - -
DSO C Shares-29,926,070- - - -
DSO D Shares7,867,2477,867,24727.8 2,185 54.4 4,280
DP67 Shares11,192,13611,192,13648.5 5,428 50.0 5,594
DP2011 General Ordinary Shares15,644,06615,644,066- - - -
DP2011 General A Shares18,418,61418,418,61413.3 2,459 20.3 3,744
DP2011 Structured Ordinary Shares10,678,72510,678,725- - - -
DP2011 Structured A Shares12,572,81712,572,8179.9 1,233 15.0 1,888
DP2011 Low Carbon Shares-7,575,419- - - -
Generalist Shares35,621,59830,450,04083.5 29,734 95.5 29,076
Generalist Management Shares7,487,8747,487,874- - - -
Healthcare Shares14,821,56411,974,28583.3 12,341 94.6 11,333
Healthcare Management Shares2,993,5712,993,571- - - -
Funds held in respect of shares not yet allotted 4,772   420
Net assets per Balance Sheet  58,152   56,335

The Directors allocate the assets and liabilities of the Company between the DSO D Shares, DP67 Shares, DP2011 General Ordinary Shares, DP2011 General A Shares, DP2011 Structured Shares, DP2011 Structured A Shares, Generalist Shares and Healthcare Shares such that each Share class has sufficient net assets to represent its dividend and return of capital rights as described in note 12 of the Annual Report.

As the Company has not issued any convertible shares or share options, there is no dilutive effect on the Net Asset Value per DSO D Share, per DP67 Share, per DP2011 General Ordinary Share, per DP2011 General A Share, per DP2011 Structured Ordinary Share, per DP2011 Structured A Share, per Generalist Share or per Healthcare Share. The Net Asset Value per share disclosed therefore represents both the basic and diluted Net Asset Value per DSO D Share, per DP67 Share, per DP2011 General Ordinary Share, per DP2011 General A Share, per DP2011 Structured Ordinary Share, per DP2011 Structured A Share, per Generalist Share and per Healthcare Share.

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

Market risks

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

The key market risks to which the Company is exposed are:
-Investment price risk; and
-Interest rate risk.
The Company has undertaken sensitivity analysis on its financial instruments, split into the relevant component parts, taking into consideration the economic climate at the time of review in order to ascertain the appropriate risk allocation.

Investment price risk

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

Interest rate risk

The Company accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The Company receives interest on its cash deposits at a rate agreed with its bankers. Investments in loan stock attract interest predominately at fixed rates. A summary of the interest rate profile of the Company’s investments is shown below.

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. Credit risk relating to holdings of loan stock in investee companies is considered to be part of market risk.

Liquidity risk

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

Events after the reporting period

In the period between 31 March 2019 and the date of this report, the Company issued the following Shares:

  • 6,015,148 Generalist Shares, at an average price of 89.1p per Share; and
  • 2,595,525 Healthcare Shares, at an average price of 86.7p per Share.

At the date of this report, there were 49,124,620 Generalist Shares and 20,410,660 Healthcare Shares in issue, including Management Shares.

ANNOUNCEMENT BASED ON AUDITED ACCOUNTS
The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 31 March 2019 but has been extracted from the statutory financial statements for the year ended 31 March 2019 which were approved by the Board of Directors on 25 July 2019 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

The statutory accounts for the year ended 31 March 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.

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