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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Down. Plan 9 | LSE:DPV9 | London | Ordinary Share | GB00B28C4Z43 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 28.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMDPV9
DOWNING PLANNED EXIT VCT 9 plc
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011
FINANCIAL HIGHLIGHTS
31 Dec 2011 31 Dec 2010
Pence Pence
Net asset value per Ordinary Share 82.3 83.8
Net asset value per 'A' Share 0.1 0.1
Cumulative distributions per Ordinary Share and 'A' 7.5 5.0
Share
------------- ------------
Total return per Ordinary Share and 'A' Share 89.9 88.9
------------- ------------
Dividend history
Date paid Pence
Year end per share
Final 2008 5 June 2009 2.5
Final 2009 28 May 2010 2.5
Final 2010 3 June 2011 2.5
------------
7.5
------------
Proposed 2011 Final (Payable 29 June 2012) 2.5p
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's Annual Report and Accounts for the year
ended 31 December 2011.
Portfolio activity
As expected, the Company has had a relatively low level of investment activity
during the year. A small number of loan stock redemptions took place and some
small new non-qualifying investments were made but the majority of the portfolio
remained unchanged.
Full details of the portfolio activity are included in the Investment Manager's
report.
Investment valuations
At the year end, the Board has reviewed the investment valuations with the
Investment Manager and made four relatively small uplifts and one reduction from
carrying values at the previous year-end.
The reduction in value is in respect of The Thames Club Limited. Shareholders
will recall that the health club underwent a major refurbishment soon after the
investment was made. Although the club is now fully operational, the task of
building the membership levels is proving challenging and is running behind
budget. As a result the value has been reduced by GBP270,000.
Small uplifts have been made to Hoole Hall Country Club Holdings, Hoole Hoole
Spa and Leisure Club, Cadbury House Holdings and Crossco (1145) which are all
making satisfactory progress.
All other investments have been held at their previous carrying values. The net
effect of the revaluations was that the portfolio incurred net unrealised losses
for the year of GBP155,000.
Net Asset Value
The Net Asset Value per Ordinary Share ("NAV") at 31 December 2011 stood at
82.3p and NAV per 'A' Share at 0.1p. With dividends paid to date of 7.5p per
Ordinary Share, Total Return (NAV plus cumulative dividends) per Ordinary and
'A' Shares was 89.9p per share.
Results
The return on ordinary activities after taxation for the year was GBP91,000 (2010
loss: GBP159,000) comprising a revenue profit of GBP211,000 (2010 loss: GBP35,000) and
a capital loss of GBP120,000 (2010: GBP124,000).
Dividends
The Board is proposing to pay a dividend of 2.5p per Ordinary Share (comprising
2.0p revenue and 0.5p capital) on 29 June 2012 to Shareholders on the register
at the close of business on 1 June 2012.
Share buybacks
The Company has operated a policy, subject to certain restrictions, of buying
shares that become available in the market at a price equivalent to a 10%
discount to the Company's most recently published NAV.
No shares were purchased in the year for cancellation.
A special resolution to continue this policy is proposed for the forthcoming
AGM.
Annual General Meeting
The Company's fourth Annual General Meeting ("AGM") will be held at 10 Lower
Grosvenor Place, London SW1W 0EN at 11:05 am on 26 June 2012.
One item of special business is proposed at the AGM in respect of the authority
to buy in shares as noted above.
Outlook
The Company's target is to start returning funds to Shareholders in
approximately one year's time. Most portfolio companies are performing
satisfactorily, although there are three currently valued below original cost,
where the chances of a full recovery in value are uncertain.
The most significant challenge for the Investment Manager will be achieving
exits from investments at the optimal time and at acceptable prices. This task
will be made more difficult by the fact that ready availability of bank finance
is unlikely to return in the near future. Despite these concerns, the Company
has the potential to produce a satisfactory final outcome for investors if given
sufficient time to unwind its portfolio.
Hugh Gillespie
Chairman
INVESTMENT MANAGER'S REPORT
Introduction
The Company is now fully invested and performing reasonably in line with its
plan, despite the challenging economic environment. Further investment activity
is limited to reinvesting proceeds from divestments when short term investment
opportunities arise.
Investment activity
The Company began the year with GBP6.9m of investments and ended the year with
GBP6.8m spread across a portfolio of 15 investments. During the year the Company
made further investments totalling GBP0.7m which was funded by divestments of
GBP0.7m and a valuation decrease on existing investments of GBP0.1m.
Of the four additions made during the year, two were new investments; GBP250,000
was invested in Snow Hill Developments LLP, which is refurbishing a building in
Birmingham into a 224 bedroom Holiday Inn Express. The hotel is due to be
completed in spring 2013.
GBP350,000 was invested in Future Biogas (SF) Limited which owns a 1.4MWh self-
contained biogas plant in Norfolk.
The portfolio returned income of GBP495,000 in the year and a net return of
GBP211,000 after expenses and tax; or 2.4p return per share. This profit was
reduced by a GBP120,000 capital loss (or 1.4p per share) owing to the decrease in
value of one investment, which was greater than the increase in value on four
other investments, reflecting their improved trading performance. The resulting
net return of 1.0p per share in the year reflects the improvements in the
Company's maturing portfolio in the last year.
The Company expects the current portfolio to provide the core of its income and
growth in the medium term and will therefore focus on managing its existing
investments before seeking to return funds to shareholders over the next two
years.
Portfolio valuation
The GBP0.1m decrease in the valuation of the portfolio during the year was driven
by an increase in value to four investments and a decrease in value to Thames
Club Limited. The increases were GBP83,000 in Crossco (1135) Limited (trading as
Kingsclere Nurseries), GBP13,000 in Cadbury House Holdings Limited, GBP11,000 in
Hoole Hall Country Club Holdings Limited and GBP8,000 in Hoole Hall Spa and
Leisure Club Limited.
The investment in Crossco (1135) Limited was made three years ago and the
business is now performing well. The increase in value recognises the improved
performance of the business.
Cadbury House, Hoole Hall Country Club and Hoole Hall Spa each saw a small
increase in value over the year. The increase in value recognises that the
businesses continue to perform in line with our expectations for a full exit
next year.
The investment in Thames Club Limited was written down by GBP270k at the year end
following concerns that the profits of the business are behind the original
business plan. Whilst membership numbers at the club are higher than at the
start of the year, and management are optimistic that the business will meet its
2012 forecasts, it is prudent to recognise a reduction in the valuation at the
year end.
Outlook
The uncertain economic environment is expected to continue throughout 2012 with
consumer confidence unlikely to improve in the short term. The Company will
continue to focus on working closely with our investment partners to strengthen
performance in order to secure optimal exits over the next two years.
Downing Managers 9 Limited
REVIEW OF INVESTMENTS
Portfolio of investments
The following investments, all of which are incorporated in England and Wales,
were held at 31 December 2011:
Valuation
movement
Cost Valuation in year % of
GBP'000 GBP'000 GBP'000 portfolio
Hoole Hall Country Club Holdings Limited** 1,094 1,161 11 16.4%
Crossco (1135) Limited t/a Kingsclere 998 1,081 83 15.2%
Nurseries
Cadbury House Holdings Limited 700 763 13 10.8%
West Tower Holdings Limited 1,150 750 - 10.6%
Horsham Bowl Limited ** 861 681 - 9.6%
Hoole Hall Spa and Leisure Club Limited 562 613 8 8.7%
The Thames Club Limited 1,075 455 (270) 6.4%
Kings Gap Group Limited* 400 400 - 5.6%
Future Biogas (SF) Limited* 350 350 - 4.9%
Snow Hill Developments LLP* 250 250 - 3.5%
Fenkle Street LLP* 92 92 - 1.3%
Sanguine Hospitality Limited* 56 56 - 0.8%
Chapel Street Food & Beverage Limited 50 50 - 0.7%
Chapel Street Services Limited 250 50 - 0.7%
Chapel Street Hotel Limited* 2 2 - 0.0%
--------------------------------------
7,690 6,754 (155) 95.2%
-------- ------------
Cash at bank and in hand 344 4.8%
----------- ----------
Total investments 7,098 100.0%
----------- ----------
Investment movements for the year ended 31 December 2011
ADDITIONS
GBP'000
Future Biogas (SF) Limited* 350
Snow Hill Developments LLP* 250
Sanguine Hospitality Limited* 119
The Thames Club Limited 25
--------
744
--------
DISPOSALS
MV at Profit/ Realised
31/12/10 (loss) vs gain
Cost *** Proceeds cost /(loss)
Loan stock redemptions GBP000 GBP000 GBP000 GBP000 GBP000
Sanguine Hospitality Limited* 313 313 348 35 35
Fenkle Street LLP* 308 308 308 - -
Bijou Wedding Venues Limited* 100 100 100 - -
Fenkle Street Developments LLP* 20 20 20 - -
------------------------------------------
741 741 776 35 35
------------------------------------------
* non qualifying VCT investment
** partially non qualifying VCT investment
*** adjusted for purchases during the year
DIRECTORS' RESPONSIBILITIES STATEMENT
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 Services Authority.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and of the profit or loss of the Company for that period. In
preparing those financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgments and accounting estimates that are reasonable and prudent;
* state whether applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions, to disclose with
reasonable accuracy at any time the financial position of the Company and to
enable them to ensure that the financial statements comply with the requirements
of 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.
The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the Manager's website. Legislation in the
United Kingdom governing the preparation and dissemination of the financial
statements and other information included in annual reports may differ from
legislation in other jurisdictions.
Statement as to disclosure of information to the Auditor
The Directors in office at the date of the report have confirmed, as far as they
are aware, that there is no relevant audit information of which the Auditor is
unaware. Each of the Directors has confirmed that they have taken all the steps
that they ought to have taken as Directors in order to make themselves aware of
any relevant audit information and to establish that it has been communicated to
the Auditor.
By order of the Board
Grant Whitehouse
Secretary of Downing Planned Exit VCT 9 plc
INCOME STATEMENT
for the year ended 31 December 2011
Year ended 31 December Year ended 31 December
2011 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 495 - 495 256 - 256
Net loss on investments - (120) (120) - (124) (124)
--------------------------------------------------
495 (120) 375 256 (124) 132
Investment management fees (85) - (85) (91) - (91)
Other expenses (126) - (126) (198) - (198)
--------------------------------------------------
(Loss)/return on ordinary
activities before tax 284 (120) 164 (33) (124) (157)
Tax on ordinary activities (73) - (73) (2) - (2)
--------------------------------------------------
(Loss)/return attributable to
equity Shareholders 211 (120) 91 (35) (124) (159)
--------------------------------------------------
Basic and diluted (loss)/return per
share:
Ordinary Share 2.4p (1.4p) 1.0p (0.4p) (1.4p) (1.8p)
'A' Share - - - - - -
All Revenue and Capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the year. The
total column within the Income Statement represents the profit and loss account
of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains and losses are recognised in the Income Statement noted above.
Other than revaluation movements arising on investments held at fair value
through profit and loss, there were no differences between the return/loss as
stated above and historical cost.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Year ended Year ended
31 December 31 December
2011 2010
GBP'000 GBP'000
Opening Shareholders' funds 7,265 7,641
Dividends paid (217) (217)
Total profit/(loss) for the year 91 (159)
----------------------------
Closing Shareholders' funds 7,139 7,265
----------------------------
BALANCE SHEET
as at 31 December 2011
2011 2010
GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Investments
6,754 6,906
Current assets
Debtors 196 113
Cash at bank and in hand 344 316
--------- ---------
540 429
Creditors: amounts falling due within one year (155) (70)
--------- ---------
Net current assets 385 359
--------- --------
Net assets 7,139 7,265
--------- --------
Capital and reserves
Called up Ordinary Share capital 9 9
Called up 'A' Share capital 13 13
Deferred Share capital 3 3
Special reserve 7,817 8,034
Revaluation reserve (936) (781)
Capital reserve - realised 44 9
Revenue reserve 189 (22)
--------- --------
Total equity Shareholders' funds 7,139 7,265
--------- --------
Basic and diluted net asset value per share
Ordinary Share 82.3p 83.8p
'A' Share 0.1p 0.1p
CASH FLOW STATEMENT
for the year ended 31 December 2011
Year Year
ended ended
31 Dec 31 Dec
2011 2010
GBP'000 GBP'000
Net cash inflow from operating activities 213 5
Taxation
Corporation tax paid - (82)
Capital expenditure
Purchase of investments (744) (1,172)
Proceeds from disposal of investments 776 1,055
-------------------
Net cash inflow/(outflow) from capital expenditure 32 (117)
-------------------
Equity dividends paid (217) (217)
Net cash inflow/(outflow) before financing 28 (411)
Financing
Purchase of own shares - -
-------------------
Net cash inflow from financing - -
-------------------
Increase/decrease in cash 28 (411)
-------------------
NOTES TO THE ACCOUNTS
for the year ended 31 December 2011
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally Accepted
Accounting Practice ("UK GAAP") and in accordance with the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" revised January 2009 ("SORP").
The financial statements are prepared under the historical cost convention
except for the certain financial instruments measured at fair value and on the
basis that it is not necessary to prepare consolidated accounts.
The Company implements new Financial Reporting Standards ("FRS") issued by the
Accounting Standards Board when required.
Presentation of Income Statement
In order to better reflect the activities of a Venture Capital Trust and in
accordance with the SORP, supplementary information which analyses the Income
Statement between items of a revenue and capital nature has been presented
alongside the Income Statement. The net revenue is the measure the Directors
believe appropriate in assessing the Company's compliance with certain
requirements set out in Part 6 of the Income Tax Act 2007.
Investments
All investments are designated as "fair value through profit or loss" assets due
to investments being managed and performance evaluated on a fair value basis.
A financial asset is designated within this category if it is both acquired and
managed on a fair value basis, with a view to selling after a period of time, in
accordance with the Company's documented investment policy. The fair value of
an investment upon acquisition is deemed to be cost. Thereafter investments are
measured at fair value in accordance with the International Private Equity and
Venture Capital Valuation Guidelines ("IPEV") together with FRS26.
For unquoted investments, fair value is established by using the IPEV
guidelines. The valuation methodologies for unquoted entities used by the IPEV
to ascertain the fair value of an investment are as follows:
* Price of recent investment;
* Multiples;
* Net assets;
* Discounted cash flows or earnings (of underlying business);
* Discounted cash flows (from the investment); and
* Industry valuation benchmarks.
The methodology applied takes account of the nature, facts and circumstances of
the individual investment and uses reasonable data, market inputs, assumptions
and estimates in order to ascertain fair value.
Gains and losses arising from changes in fair value are included in the Income
Statement for the year as a capital item and transaction costs on acquisition or
disposal of the investment are expensed.
Where an investee company has gone into receivership, liquidation or
administration (where there is little likelihood of recovery), the loss on the
investment, although not physically disposed of, is treated as being realised.
It is not the Company's policy to exercise significant influence over investee
companies. Therefore the results of these companies are not incorporated into
the Income Statement except to the extent of any income accrued. This is in
accordance with the SORP that does not require portfolio investments to be
accounted for using the equity method of accounting.
Income
Dividend income from investments is recognised when the Shareholders' rights to
receive payment has been established, normally the ex-dividend date.
Interest income is accrued on a time apportionment basis, by reference to the
principal sum outstanding and at the effective rate applicable and only where
there is reasonable certainty of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis
between revenue and capital items presented within the Income Statement, all
expenses have been presented as revenue items except as follows:
* Expenses which are incidental to the disposal of an investment are deducted
from the disposal proceeds of the investment; and
* 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 100% of the
investment manager's fees to the revenue account.
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, other creditors and loan notes
Other debtors (including accrued income), other creditors and loan notes are
included within the accounts at amortised cost.
2. Basis and diluted return per share
Weighted average Revenue Capital
number of return/ gain/
shares in issue (loss) (loss)
Return per share is calculated on the GBP'000 GBP'000
following:
Year ended 31 December 2011 Ordinary 8,657,673 211 (120)
Shares
'A' Shares 12,986,507 - -
Year ended 31 December 2010 Ordinary 8,657,673 (35) (124)
Shares
'A' Shares 12,986,507 - -
As the Company has not issued any convertible securities or share options, there
is no dilutive effect on return per Ordinary Share or 'A' Share. The return per
share disclosed therefore represents both the basic and diluted return per
Ordinary Share and 'A' Share.
3. Basic and diluted net asset value per share
2011 2010
Shares in issue Net asset value Net asset value
2011 2010 Pence GBP'000 Pence GBP'000
per per
share share
Ordinary Shares 8,657,673 8,657,673 82.3 7,130 83.8 7,256
'A' Shares 12,986,507 12,986,507 0.1 9 0.1 9
------------------------------------
82.4 7,139 88.9 7,265
------------------------------------
The Directors allocate the assets and liabilities of the Company between the
Ordinary Shares and 'A' Shares such that each share class has sufficient net
assets to represent its dividend and return of capital rights.
As the Company has not issued any convertible shares or share options, there is
no dilutive net asset value per Ordinary Share or per 'A' Share. The Net Asset
Value per share disclosed therefore represents both the basic and diluted net
asset value per Ordinary Share and per 'A' Share.
4. Financial instruments and derivatives
The Company's financial instruments comprise investments held at fair value
through profit and loss, being equity and loan stock investments in unquoted
companies, loans and receivables being cash deposits and short term debtors and
financial liabilities being creditors arising from its operations. The main
purpose of these financial instruments is to generate cashflow and revenue and
capital appreciation for the Company's operations. The Company has no gearing or
other financial liabilities apart from short-term creditors and does not use any
derivatives.
The fair value of investments is determined using the detailed accounting policy
as shown in note 1.
Loans and receivables and other financial liabilities, as set out in the balance
sheet, are stated at amortised cost which the Directors consider is equivalent
to fair value.
The Company's investment activities expose the Company to a number of risks
associated with financial instruments and the sectors in which the Company
invests. The principal financial risks arising from the Company's operations
are:
* Market risks
* Credit risk
* Liquidity risk
The Board regularly reviews these risks and the policies in place for managing
them. There have been no significant changes to the nature of the risks that
the Company is exposed to over the year and there have also have been no
significant changes to the policies for managing those risks during the year.
The risk management policies used by the Company in respect of the principal
financial risks and a review of the financial instruments held at the year end
are provided below:
Market risks
As a VCT, the Company is exposed to market risks in the form of potential losses
and gains that may arise on the investments it holds in accordance with its
investment policy. The management of these market risks is a fundamental part of
investment activities undertaken by the Investment Manager and overseen by the
Board. The Manager monitors investments though regular contact with management
of investee companies, regular review of management accounts and other financial
information and attendance at investee company board meetings. This enables the
Manager to manage the investment risk in respect of individual investments.
Market risk is also mitigated by holding a diversified portfolio spread across
various business sectors and asset classes.
The key market risks to which the Company is exposed are:
* Market price risk
* Interest rate risk
Market price risk
Market price risk arises from uncertainty about the future prices and valuations
of financial instruments held in accordance with the Company's investment
objectives. It represents the potential loss that the Company might suffer
through changes in the fair value of unquoted investments that it holds.
At 31 December 2011, the unquoted portfolio was valued at GBP6,754,000.
As the larger proportion of the Company's unlisted investments are classified as
'asset-backed', it is believed that a fall in share prices generally would have
a lesser impact on the valuation of the unlisted portfolio.
Interest rate risk
The Company accepts exposure to interest rate risk on floating-rate financial
assets through the effect of changes in prevailing interest rates. The Company
receives interest on its cash deposits at a rate agreed with its bankers.
Investments in loan stock attract interest predominately at fixed rates. A
summary of the interest rate profile of the Company's investments is shown
below.
There are four categories in respect of interest which are attributable to the
financial instruments held by the Company as follows:
"Fixed rate" assets represent investments with predetermined yield targets and
comprise certain loan note investments and Preference Shares;
"Variable rate" asset represent investments with interest rates linked to Bank
of England base rate in accordance with loan agreements;
"Floating rate" assets predominantly bear interest at rates linked to Bank of
England base rate or LIBOR and comprise cash at bank and liquidity fund
investments and certain loan note investments; and
"No interest rate" assets do not attract interest and comprise equity
investments, certain loan note investments, loans and receivables (excluding
cash at bank) and other financial liabilities.
Average Average period 2011 2010
interest rate until maturity GBP'000 GBP'000
Fixed rate 13.4% 874 days 5,034 5,550
Variable rate 10.0% 195 days 261 261
Floating rate 0.5% 344 316
No interest rate 1,500 1,138
------------
7,139 7,265
------------
The Company monitors the level of income received from fixed and floating rate
assets and, if appropriate, may make adjustments to the allocation between the
categories, in particular, should this be required to ensure compliance with the
VCT regulations.
It is estimated that an increase of 1% in interest rates would have increased
total return before taxation for the year by GBP3,000. As the Bank of England base
rate stood at 0.5% per annum throughout the year, it is not believed that a
reduction from this level is likely.
Credit risk
Credit risk is the risk that the 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 thought its holdings of loan stock in investee
companies, investments in liquidity funds, cash deposits and debtors.
The Company's financial assets that are exposed to credit risk are summarised as
follows:
2011 2010
GBP'000 GBP'000
Investments in loan stocks 5,295 5,811
Cash and cash equivalents 344 316
Interest and other receivables 196 113
----------------
5,835 6,240
----------------
The Manager manages credit risk in respect of loan stock with a similar approach
as described under "Market risks" above. The management of credit risk
associated interest, dividends and other receivables is covered within the
investment management procedures. The level of security is a key means of
managing credit risk.
Cash is held by Bank of Scotland plc and Royal Bank of Scotland plc, both of
which are A-rated financial institution and both also ultimately part-owned by
the UK Government. Consequently, the Directors consider that the credit risk
associated with cash deposits is low.
There have been no changes in fair value during the year that are directly
attributable to changes in credit risk.
Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties in meeting
obligations associated with its financial liabilities. Liquidity risk may also
arise from either the inability to sell financial instruments when required at
their fair values or from the inability to generate cash inflows as required. As
the Company has a relatively low level of creditors being ( GBP155,000) and has no
borrowings, the Board believes that the Company's exposure to liquidity risk is
low. The Company always holds sufficient levels of funds as cash in order to
meet expenses and other cash outflows as they arise. For these reasons the Board
believes that the Company's exposure to liquidity risk is minimal.
The Company's liquidity risk is managed by the Investment Manager in line with
guidance agreed with the Board and is reviewed by the Board at regular
intervals.
5. Related party transactions
Downing Managers 9 Limited ("DM9"), a wholly owned subsidiary, is the Company's
Investment Manager. During the year ended 31 December 2011, GBP85,000 (2010:
GBP91,000) was payable to DM9. Additionally, DM9 provides accounting, secretarial
and administrative services for an annual fee of GBP40,000 (plus an annual RPI
increase) per annum. During the year ended 31 December 2011, GBP43,000 (2010:
GBP41,000) was due in respect of administration fees. At the year end a balance of
GBP33,000 (2010: GBP27,000) was due to DM9.
ANNOUNCEMENT BASED ON AUDITED ACCOUNTS
The financial information set out in this announcement does not constitute the
Company's statutory financial statements in accordance with section 434
Companies Act 2006 for the year ended 31 December 2011, but has been extracted
from the statutory financial statements for the year ended 31 December 2011,
which were approved by the Board of Directors on 25 April 2012 and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting. 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 December 2010 have been delivered
to the Registrar of Companies and received an Independent Auditors report which
was unqualified and did not contain any emphasis of matter nor statements under
s 498(2) and (3) of the Companies Act 2006.
A copy of the full annual report and financial statements for the year ended 31
December 2011 will be printed and posted to shareholders shortly. Copies will
also be available to the public at the registered office of the Company at 10
Lower Grosvenor Place, London, SW1W 0EN and will be available for download from
www.downing.co.uk.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: DOWNING PLANNED EXIT VCT 9 PLC via Thomson Reuters ONE
[HUG#1605975]
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