LEI: 213800R88MRC4Y3OIW86
Half-Yearly Report for the
Six months ended
Financial Summary
30 Nov | 30 Sep | 31 Mar | 30 Sep | Nov | |
2021 | 2021 | 2021 | 2020 | 2013 | |
pence | pence | pence | pence | pence | |
Net Asset Value per share (“NAV”) | 62.2 | 61.3 | 58.20 | 56.3 | 100.4 |
Cumulative dividends paid since | 40.0 | 40.0 | 38.75 | 37.5 | - |
Total Return | 102.2 | 101.3 | 96.95 | 93.8 | 100.4 |
(NAV plus cumulative dividends paid per share) | |||||
Chairman’s Statement
I present the Company’s half-yearly report for the six-month period ended
Net asset value and results
As at
The return attributable to equity shareholders for the period was a gain of £7.7 million, comprising a revenue loss of £299,000 and a capital gain of £8.0 million.
Investment activity and performance
Over the last six months the main focus of the Investment Adviser has been on supporting portfolio companies as they continue to recover from the impact of the coronavirus pandemic, however, there have also been a small number of realisations generating proceeds of £3.3 million and some new investments totalling £0.7 million.
Following a review of valuations by the Board, net unrealised gains across the whole portfolio over the period were £7.2 million. In addition, the realisations noted above, resulted in a net realised gain of £0.8 million.
At the period end, the Company held a portfolio of 81 active investments, with 32% (by value) held in quoted growth, 27% (by value) in unquoted yield focused and 41% (by value) in unquoted growth. 32 investments are held in the quoted growth category which are either quoted on AIM or the AQSE Growth Market and have a value of £29.9 million. The 49 unquoted investments have a value of £65.0 million.
The proportion of the portfolio held in unquoted growth companies is expected to grow as exits from the more mature yield focused investments arise and funds are then redeployed into younger growth businesses in line with the current VCT regulations.
Further details of the investment activities of the Company are included in the Investment Adviser’s Report below.
Dividends
The Company has a stated policy of seeking to pay dividends equivalent to at least 4% of net asset value (currently 61.3p) each year. Consistent with this policy, the Board has declared an interim dividend of 1.25p (equivalent to 2.0% of current NAV) which will be paid on
This will take the total dividends paid since the merger in
Annual running costs cap
Shareholders are reminded that the Company benefits from a running cost cap provided by the Investment Adviser. Any annual running costs above 2.6% of net assets per annum are met by the Adviser by way of a reduction in their fees. This cap has been in effect over this period.
Fundraising
The Company launched an offer for subscription in
At the end of
Shareholders that may be interested in topping up their investment can find an investment memorandum for the offer on the Downing website:
www.downing.co.uk/d1
Investors are recommended to consult their financial adviser before making any investments.
Share buybacks
The Company operates a policy of buying in its own shares that become available in the market at a 5% discount to NAV (subject to liquidity and any regulatory restrictions).
During the period, the Company purchased 2,626,746 shares (equal to 1.6% of the opening number of shares in issue) at an average price of 56.9p per share.
VCT Qualification
VCT qualifying investments now represent 85.1% of total investments as defined by VCT regulations. The minimum VCT qualification level of 80% is expected to continue to be comfortably exceeded for the foreseeable future.
Registrars
In July, the Company appointed
downing-vct.cityhub.uk.com
Outlook
It is pleasing to see some progress being made by the portfolio after the significant setbacks suffered with the coronavirus pandemic. Improving trading performance, trade buyer activity, and, in the case of GENinCode, an IPO, have all contributed to some healthy valuation uplifts across the portfolio.
In late November, we were pleased to note that Universe Group plc announced a recommended offer for the company to be acquired at a significant premium to its previous share price. The increase in the share price of Universe, along with other quoted investments, has resulted in the NAV increasing by a further 0.9p per share. The unaudited NAV at
The Board believes the above developments are a good indication that the Company’s earlier growth investments are now starting to mature and can drive performance going forward. However, Shareholders should be mindful that it is still relatively early days for many of the Company’s investments and ultimate success will be determined by realisations rather than unrealised valuation uplifts, driven by, what some commentators consider to be, very buoyant market conditions.
Very recently, we have seen the rapid onset of the Omicron Covid variant. It is unclear at the time of writing how great the impact on the economy will be, but there are a number of worrying signs which could present further challenges to portfolio companies. The Board will closely monitor developments.
I look forward to updating Shareholders on developments in the Annual Report to
Chairman
Investment Adviser’s Report - Overview
Introduction
We present a review of the investment portfolio and activity over the six months to
Portfolio Overview
As the portfolio continues to recover and economies begin to open up, of the 81 active investments with a positive value, approximately half are valued at or above cost
Following the significant level of new investment activity over the past 18 months, the proportion of the portfolio in new, younger investments has increased, with approximately half of the portfolio now less than 5 years old.
Focus during this period has shifted towards supporting the current investee companies as well as seeking to enhance shareholder value and working towards exits where possible. We expect the portfolio to continue to shift towards new growth investments going forward as exits from the maturing portfolio of yield focused investments arise.
Performance
The performance of the portfolio over the year has produced an unrealised gain of £7.5 million, including foreign exchange gains of £224,000, with the unquoted portfolio generating an unrealised gain of £3.2 million and the quoted portfolio generating an unrealised gain of £4.3 million.
As we have noted previously, it is not unusual to suffer some losses at a relatively early stage in a portfolio of young growth companies, and it has therefore been encouraging to see a number of the stronger businesses now starting to prove themselves and showing gains in the period.
Despite the positives, some businesses have not developed as originally anticipated and there have been a small number of write downs.
Further details on these and other movements can be found within the quoted and unquoted Investment Adviser Reports.
Portfolio Composition
The shift in the balance of the portfolio towards younger, unquoted growth investments, in line with the current VCT regulations, has continued with the proportion of funds (by value) in these investments increasing from 38% to 41% over the last 12 months.
We expect a number of further exits from the yield focused portfolio to complete prior to the end financial year.
The investment portfolio continues to be well diversified, with the top three sectors in which the Company is invested being; Software and Computer Services, Alternative Energy, and Support Services, with investment costs totalling £17.8 million, £8.5 million, and £7.3 million respectively.
Outlook
The period to
Following periods of a higher level of investment activity in the past 18 months, over the six months to
Investment Adviser’s Report – Unquoted portfolio
We present a review of the unquoted investment portfolio for the six months ended
Investment activity
At
During the period, the Company invested a total of £333,000 in unquoted companies comprising of one new and one follow-on investment.
The one new qualifying investment that in
The follow-on investment made during the period was in
Details of the realisations in the year are set out below. Total proceeds of £3.3 million were generated, producing realised gains in the period of £808,000.
GENinCode develops products and technology that helps patients and healthcare practitioners assess and predict the onset of cardiovascular disease, thrombosis, and to diagnose Familial Hypercholesterolemia. In
During the period, the Company also exited from two of its Indian solar investments,
Portfolio valuation
Following a review of the carrying values, there was an overall gain of £3.2 million, including unrealised foreign exchange gains of £224,000. The most significant movements are summarised below.
The largest gain in value was in
The gains recognised at the period end were partly offset by a number of losses across the portfolio. The most significant loss in the period related to
Outlook
The period to
The priorities for the Adviser for the next six months will continue to be assisting portfolio companies through this challenging trading period, whilst seeking to secure exits when opportunities present themselves.
Investment Adviser’s Report – Quoted portfolio
Investment activity
At
COVID-19 continued to present challenges to markets and economies during the six-month reporting period to
The quoted portfolio saw limited trading activity during the period, with new investments made into Trellus Health plc (£175,000) and GENinCode plc (£200,000). There was one corporate action as the
Overall, the quoted portfolio produced unrealised gains of £4.3 million. The most notable movements in the portfolio over the period are discussed below.
Portfolio valuation
The main positive contributor to performance was Tracsis Plc, which increased the value of the portfolio by £2.4 million.
Tracsis, is a leading provider of software, hardware, data analytics/GIS and services for the rail, traffic data and wider transport industries. The group issued its latest trading update for the year ended
The Rail Technology and Services Division has continued to trade well, benefitting from high levels of recurring software revenue and a large pipeline of multi-year opportunities. The Data, Analytics, Consultancy and Events Division also performed well despite the impact of COVID-19 on end markets. The group is well positioned to respond quickly to increased demand in both markets as corona restrictions have been lifted. Management anticipates further recovery in activity levels through Q1 of FY 21/22, supported by the recently announced Government-backed insurance scheme for the live events sector.
GENinCode plc, the cardiovascular disease (CVD) company focused on predictive genetics for the prevention of cardiovascular disease, also made a positive contribution to the portfolio, delivering an unrealised gain of £813,000. The group announced its results for the six months ended
The group is working closely with its US collaborative partner, Eversana, on launch planning and advancing its discussions with
Inland Homes plc was a negative contributor, reducing the value of the portfolio by £236,000. Inland Homes is a brownfield developer and housebuilder focused on building residentially led developments for direct sale or on behalf of partner organisations. The group announced its interim results for the six-month period ended
The board reported that one of its key objectives is to continue the progress it is making on the reduction of group net debt. Solid progress has been made in the first half and management expects this process to continue through to the year end. The group continues to see increased demand for its quality land assets and planning expertise in the asset management division from investors, developers, Build to Rent operators and housing associations. During the reporting period, it secured planning on the
Management’s focus is on unlocking the value in digital chemistry by building a fully integrated digital chemistry cloud platform of chemical reaction data for scientists. On the back of a strong renewals base and its new focus on growing revenues with those customers as well as growth in users and trials, the group look forward with increasing confidence to delivering on its potential and the growth it envisages for 2021 and beyond.
Outlook
COVID-19 continued to disrupt throughout the period, albeit trading conditions gradually improved as economies opened up. The Adviser is encouraged by the progress achieved by the quoted portfolio over the last six months. While the
Supply chain issues, increasing concerns around inflation and rising interest rates all give cause for pessimism over the near-term outlook for equity markets. However, the Adviser is cautiously optimistic about the prospects for the quoted portfolio which contains a diversified range of quality companies with strong balance sheets that can deliver long-term, sustained growth in shareholder value.
Unaudited Balance Sheet
as at
30 Sep 2021 | 30 Sep 2020 | 31 | ||||
£’000 | £’000 | £’000 | ||||
Fixed assets | ||||||
Investments | 94,932 | 77,048 | 89,157 | |||
Current assets | ||||||
Debtors | 1,630 | 1,182 | 2,001 | |||
Cash at bank and in hand | 13,732 | 10,569 | 10,738 | |||
15,362 | 11,751 | 12,739 | ||||
Creditors: amounts falling due within one year | (510) | (443) | (543) | |||
Net current assets | 14,852 | 11,308 | 12,196 | |||
Net assets | 109,784 | 88,356 | 101,353 | |||
Capital and reserves | ||||||
Called up share capital | 1,790 | 1,564 | 1,611 | |||
Capital redemption reserve | 1,675 | 1,628 | 1,649 | |||
Share premium | 78,561 | 62,494 | 66,430 | |||
Funds held in respect of shares not yet allotted | 30 | 264 | 7,545 | |||
Special reserve | 17,435 | 30,388 | 20,238 | |||
Capital reserve – unrealised | 13,863 | (5,703) | 6,409 | |||
Revenue reserve | (3,570) | (2,279) | (2,529) | |||
Equity shareholders’ funds | 109,784 | 88,356 | 101,353 | |||
Basic and diluted net asset value per share | 61.3p | 56.3p | 58.2p |
Unaudited Income Statement
For the six months ended
Six months ended | Six months ended | Year ended 31 March 2021 | |||||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||||
Income | 732 | - | 732 | 644 | - | 644 | 1,333 | ||||
(Losses)/gains on investments | |||||||||||
- realised gains/(losses) on disposal | - | 808 | 808 | - | 328 | 328 | (195) | ||||
- unrealised valuation gains/(losses) | - | 7,313 | 7,313 | - | 1,660 | 1,660 | 8,332 | ||||
- unrealised foreign exchange gains/(losses) | - | 224 | 224 | - | (36) | (36) | (735) | ||||
732 | 8,345 | 9,077 | 644 | 1,952 | 2,596 | 8,735 | |||||
Investment management fees | (490) | (490) | (980) | (448) | (448) | (896) | (1,634) | ||||
Other expenses | (401) | - | (401) | (434) | - | (434) | (900) | ||||
(Loss)/gain on ordinary activities before tax | (159) | 7,855 | 7,696 | (238) | 1,504 | 1,266 | 6,201 | ||||
Tax on total comprehensive income and ordinary activities | (140) | 140 | - | (128) | 128 | - | - | ||||
(Loss)/return attributable to equity shareholders | (299) | 7,995 | 7,696 | (366) | 1,632 | 1,266 | 6,201 | ||||
Basic and diluted return per share | (0.2p) | 4.5p | 4.3p | (0.2p) | 1.1p | 0.9p | 4.0p |
The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards (“FRS102”). There are no other items of comprehensive income. The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in
Statement of Changes in Equity
For the six months ended
Share Capital | Capital redemption reserve | Share premium account | Funds held in respect of shares not yet allotted | Special reserve | Capital reserve -realised | Revaluation reserve | Revenue reserve | Total | |||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||
For the six months ended | |||||||||||
At | 1,611 | 1,649 | 66,430 | 7,545 | 20,238 | - | 6,409 | (2,529) | 101,353 | ||
Total comprehensive income | - | - | - | - | - | 457 | 7,538 | (299) | 7,696 | ||
Transfer between reserves* | - | - | - | - | (944) | 1,028 | (84) | - | - | ||
Transactions with owners | |||||||||||
Utilised in share issue | - | - | - | (7,545) | - | - | - | - | (7,545) | ||
Unallotted shares | - | - | - | 30 | - | - | - | - | 30 | ||
Dividends paid | - | - | - | - | - | (1,485) | - | (742) | (2,227) | ||
Issue of new shares | 205 | - | 12,131 | - | - | - | - | - | 12,336 | ||
Share issue costs | - | - | - | - | (357) | - | - | - | (357) | ||
Purchase of own shares | (26) | 26 | - | - | (1,502) | - | - | - | (1,502) | ||
At | 1,790 | 1,675 | 78,561 | 30 | 17,435 | - | 13,863 | (3,570) | 109,784 | ||
* A transfer of £84,000 representing previously recognised unrealised gains on disposal of investments during the period ended
** A transfer of £944,000 representing realised gains on disposal of investments, less net investment impairments and the excess of capital expenses over capital income and capital dividends in the year (year ended
Statement of Changes in Equity
For the year ended
Share Capital | Capital redemption reserve | Share premium account | Funds held in respect of shares not yet allotted | Special reserve | Capital reserve -realised | Revaluation reserve | Revenue reserve | Total | ||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
For the year ended | ||||||||||
At | 1,440 | 1,615 | 54,703 | 5,775 | 34,587 | - | (8,504) | (874) | 88,742 | |
Total comprehensive income | - | - | - | - | - | (780) | 7,597 | (616) | 6,201 | |
Transfer between reserves | - | - | - | - | (12,197) | 4,881 | 7,316 | - | - | |
Transactions with owners | ||||||||||
Dividends paid | - | - | - | - | - | (4,101) | - | (1,039) | (5,140) | |
Utilised in share issue | - | - | - | (5,775) | - | - | - | - | (5,775) | |
Unallotted shares | - | - | - | 7,545 | - | - | - | - | 7,545 | |
Issue of new shares | 205 | - | 11,727 | - | - | - | - | - | 11,932 | |
Share issue costs | - | - | - | - | (286) | - | - | - | (286) | |
Purchase of own shares** | (34) | 34 | - | - | (1,866) | - | - | - | (1,866) | |
At | 1,611 | 1,649 | 66,430 | 7,545 | 20,238 | - | 6,409 | (2,529) | 101,353 | |
Unaudited Cash Flow Statement
For the six months ended
30 | |||||||||
£’000 | £’000 | £’000 | |||||||
Cash flow from operating activities | |||||||||
Profit/(loss) on ordinary activities before taxation | 7,696 | 1,266 | 6,201 | ||||||
Loss/(gain) on investments | (8,345) | (1,952) | (7,402) | ||||||
Decrease/(increase) in debtors | 371 | 763 | (57) | ||||||
(Decrease)/increase in creditors | (38) | (86) | 25 | ||||||
Cash from operations | |||||||||
Corporation tax paid | - | - | - | ||||||
Net cash (utilised)/generated from operating activities | (316) | (9) | (1,233) | ||||||
Cash flow from investing activities | |||||||||
Purchase of investments | (708) | (12,713) | (21,403) | ||||||
Proceeds from disposal of investments | 3,277 | 1,206 | 3,238 | ||||||
Net cash generated/(utilised) from investing activities | 2,569 | (11,507) | (18,165) | ||||||
Cash flows from financing activities | |||||||||
Proceeds from share issue | 12,336 | 7,928 | 11,933 | ||||||
Funds held in respect of shares not yet allotted | (7,515) | (5,511) | 1,770 | ||||||
Share issue costs | (357) | (215) | (286) | ||||||
Purchase of own shares | (1,496) | (467) | (1,612) | ||||||
Equity dividends paid | (2,227) | (3,121) | (5,140) | ||||||
Net cash utilised from financing activities | 741 | (1,386) | 6,665 | ||||||
(Decrease)/increase in cash | 2,994 | (12,902) | (12,733) | ||||||
Net increase in cash | |||||||||
Beginning of period | 10,738 | 23,471 | 23,471 | ||||||
Net cash (outflow)/inflow | 2,994 | (12,902) | (12,733) | ||||||
End of period | 13,732 | 10,569 | 10,738 |
Summary of Investment Portfolio
as at
Cost | Valuation | Valuation movement in period† | % of portfolio by value | ||
£’000 | £’000 | £’000 | |||
Top twenty venture capital investments (by value) | |||||
Tracsis plc* | 1,443 | 7,321 | 2,389 | 6.7% | |
Downing | 3,880 | 5,830 | 304 | 5.4% | |
3,630 | 4,155 | (193) | 3.8% | ||
Downing Strategic Micro-Cap Investment Trust plc** | 5,197 | 4,055 | 239 | 3.7% | |
1,342 | 3,668 | 1,260 | 3.4% | ||
Anpario plc* | 1,448 | 3,587 | 186 | 3.3% | |
2,695 | 3,234 | - | 3.0% | ||
3,020 | 2,895 | 65 | 2.7% | ||
2,970 | 2,851 | 64 | 2.6% | ||
443 | 2,508 | 573 | 2.3% | ||
1,000 | 2,351 | 523 | 2.2% | ||
1,400 | 2,113 | 56 | 1.9% | ||
2,594 | 2,079 | 25 | 1.9% | ||
1,280 | 2,025 | 790 | 1.9% | ||
2,102 | 2,006 | 45 | 1.8% | ||
Virtual Class Limited t/a Third Space Learning | 1,164 | 1,912 | (62) | 1.8% | |
Craneware plc* | 353 | 1,839 | 266 | 1.7% | |
3,081 | 1,801 | - | 1.7% | ||
2,250 | 1,771 | (481) | 1.6% | ||
Impact Healthcare REIT plc** | 1,518 | 1,627 | (4) | 1.5% | |
42,810 | 59,628 | 6,045 | 54.9% | ||
Other venture capital investments | 51,394 | 35,304 | 1,492 | 32.5% | |
94,204 | 94,932 | 7,537 | 87.4% | ||
Cash at bank and in hand | 13,732 | 12.6% | |||
Total investments | 108,664 | 100% |
All venture capital investments are unquoted unless otherwise stated.
* Quoted on AIM
** Listed and traded on the Main Market of the
† The valuation movement in the period includes unrealised foreign exchange gains of £224,000
Summary of Investment Movements
For the six months ended
Additions
£’000 | |
Quoted growth investments | |
GENinCode plc | 200 |
Trellus Health plc | 175 |
375 | |
Unquoted growth investments | |
208 | |
125 | |
333 | |
Total additions | 708 |
Disposals
Cost | Value at 31/03/21 | Disposal proceeds | (Loss)/gain against cost | Realised gain in period | |
£’000 | £’000 | £’000 | £’000 | £’000 | |
Quoted growth investments | |||||
6 | 4 | 5 | (1) | 1 | |
6 | 4 | 5 | (1) | 1 | |
Unquoted yield focused investments (including loan note redemptions) | |||||
920 | - | 4 | (916) | 4 | |
920 | - | 4 | (916) | 4 | |
1,369 | 1,369 | 1,369 | - | - | |
3,209 | 1,369 | 1,377 | (1,832) | 8 | |
Unquoted growth investments (including loan note redemptions) | |||||
1,663 | 1,096 | 1,604 | (59) | 508 | |
1,833 | - | 291 | (1,542) | 291 | |
741 | - | - | (741) | - | |
4,237 | 1,096 | 1,895 | (2,342) | 799 | |
7,452 | 2,469 | 3,277 | (4,175) | 808 |
* adjusted for purchases in the period
Notes to the Unaudited Financial Statements
For the six months ended
1. General information
2. Basis of accounting
The unaudited half-yearly financial results cover the six months to
3. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the six months ended
5. Return per share
Weighted average number of shares in issue | Revenue (deficit)/ return | Capital Gain/(loss) | |||
£’000 | £’000 | ||||
Period ended | 176,390,695 | (299) | 7,995 | ||
Period ended | 153,783,770 | (366) | 1,632 | ||
Year ended | 156,403,594 | (616) | 6,817 |
6. Dividends paid in the period
Six months ended | Year ended | |||||
Revenue | Capital | Total | Total | |||
Date paid | £’000 | £’000 | £’000 | £’000 | ||
2021 Final | 742 | 1,485 | 2,227 | - | ||
2021 Interim | - | - | - | 2,021 | ||
2020 Final | - | - | - | 3,119 | ||
742 | 1,485 | 2,227 | 5,140 |
7. Basic and diluted net asset value per share
Shares in issue | Net assets | NAV per share | |||
£’000 | pence | ||||
Period ended | 179,011,001 | 109,784 | 61.3 | ||
Period ended | 156,354,880 | 88,356 | 56.3 | ||
Year ended | 161,094,068 | 101,353 | 58.2 |
8. Called up share capital
Shares in issue | £’000 | ||||
Period ended | 179,011,001 | 1,790 | |||
Period ended | 156,354,880 | 1,564 | |||
Year ended | 161,094,068 | 1,611 |
9. Reserves
The Special reserve is available to the Company to enable the purchase of its own shares in the market without affecting its ability to pay dividends/capital distributions.
30 Sep 2021 | 30 Sep 2020 | 31 Mar 2021 | ||||
£’000 | £’000 | £’000 | ||||
Capital redemption reserve | 1,675 | 1,628 | 1,649 | |||
Share premium account | 78,561 | 62,494 | 66,430 | |||
Funds held in respect of shares not yet allotted | 30 | 264 | 7,545 | |||
Special reserve | 17,435 | 30,388 | 20,238 | |||
Revaluation reserve | 13,863 | (5,703) | 6,409 | |||
Revenue reserve | (3,570) | (2,279) | (2,529) | |||
Total reserves | 107,994 | 86,792 | 99,742 |
Distributable reserves are calculated as follows:
30 Sep 2021 | 30 Sep 2020 | 31 Mar 2021 | |||
£’000 | £’000 | £’000 | |||
Special reserve | 17,435 | 30,388 | 20,238 | ||
Revenue reserve | (3,570) | (2,279) | (2,529) | ||
Unrealised gains/(losses) (excluding unrealised unquoted gains) | (402) | (12,839) | (3,547) | ||
13,463 | 15,270 | 14,162 |
10. Investments
The fair value of investments is determined using the detailed accounting policy as shown in the audited financial statements for the year ended
Level 1 Reflects financial instruments quoted in an active market (quoted companies and fixed interest bonds);
Level 2 Reflects financial instruments that have prices that are observable either directly or indirectly; and
Level 3 Reflects financial instruments that use valuation techniques that are not based on observable market data (investments in unquoted shares and loan note investments).
Level 1 | Level 2 | Level 3 | 30 | Level 1 | Level 2 | Level 3 | |||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Quoted on AIM | 24,230 | - | - | 24,230 | 19,133 | - | - | 19,133 | |
Quoted on Aquis | 4 | - | - | 4 | 4 | - | - | 4 | |
Quoted on main market | 5,681 | - | - | 5,681 | 5,447 | - | - | 5,447 | |
Unquoted loan notes | - | - | 19,753 | 19,753 | - | - | 19,891 | 19,891 | |
Unquoted equity | - | - | 45,264 | 45,264 | - | - | 44,682 | 44,682 | |
29,915 | - | 65,017 | 94,932 | 24,584 | - | 64,573 | 89,157 |
11. The unaudited financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended
12. Going concern
The Directors have reviewed the Company’s financial resources at the period end and concluded that the Company is well placed to manage its business risks.
The Directors confirm that they are satisfied that the Company has adequate resources to continue to operate for the foreseeable future. For this reason, the Directors believe that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements.
13. Risks and uncertainties
Under the Disclosure and Transparency Rules, the Board is required, in the Company’s half-year results, to report on principal risks and uncertainties facing the Company over the remainder of the financial year. The impact of the coronavirus pandemic has created heightened uncertainty but has not changed the nature of these risks.
The Board has concluded that the key risks are:
(i) compliance risk of failure to maintain approval as a VCT; and
(ii) investment risk associated with investing in small and immature businesses.
The Company’s compliance with the VCT regulations is continually monitored by the Investment Adviser, who regularly reports to the Board on the current position. The Company also retains
In order to make VCT qualifying investments, the Company has to invest in small businesses which are often immature. The impact of the coronavirus pandemic has been significant on some portfolio companies and, in many cases, the VCT regulations restrict the Company from making further investment into these businesses, so the Investment Adviser seeks to provide whatever other support they can to these businesses, including encouraging them to take advantage of Government support that may be available. The Company also has a limited period in which it must invest the majority of its funds into VCT qualifying investments. The Investment Adviser follows a rigorous process in vetting and careful structuring of new investments, including taking a charge over the assets of the business wherever possible and, after an investment is made, closely monitoring the business.
The Board is satisfied that these approaches provide satisfactory management of the key risks.
14. The Directors confirm that, to the best of their knowledge, the half yearly financial report has been prepared in accordance with the “Statement: Half-Yearly Financial Reports” issued by the
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place during the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.
15. Copies of the unaudited half-yearly financial results will be sent to Shareholders shortly. Further copies can be obtained from the Company’s Registered Office and will be available for download from www.downing.co.uk/d1
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