Downing Plan 2011 Downing Planned Exit Vct 2011 -2-

   *  no impact on the tax position of Shareholders - existing VCT tax 
reliefs carry over and attach to the post- Merger shares for all 
Shareholders. 
 
   The Merger is comprised of three separate Schemes and will only go ahead 
if at least the DP2011 Scheme becomes unconditional. If one or two of 
the Schemes become unconditional, then the resulting Enlarged Company 
will be commensurately smaller than if all three Schemes become 
unconditional with the result that the Enlarged Company will have a 
smaller net asset base across which to spread the costs of the Schemes 
that do go ahead and the running costs of the Enlarged Company going 
forward. In this case, the costs of the Schemes that do go ahead may 
take longer to recover than they would if the full four-way Merger was 
implemented. 
 
   The estimated total costs of this four-way merger are GBP400,000. 
Downing has agreed to bear 50% of the costs of the Merger and 100% of 
any costs in excess of GBP420,000. After Downing's contribution, and 
taking into account Downing's reduced management fees in year one 
following the Merger, the net costs of the Merger to be borne by the 
Companies are estimated at GBP110,000. 
 
   As an illustration, had the Merger been completed on the basis of the 
Schemes as set out the Circulars, the number of Consideration Shares 
that would be issued for each Target VCT share would be as follows: 
 
 
 
 
                                                   Downing FOUR 
                            Number of                   VCT                          Voting 
              Current         Shares        Net     share class       Shares/        rights 
  Current     share        currently in    Asset     following     Consideration    following 
  company     class           issue        Value*     Merger          shares         merger 
                             Number        GBPM                      Number            % 
Existing Shares 
            Ordinary                               DSO Ordinary 
DSO          Shares          10,288,157      5.54        Shares       10,288,157        9.02% 
DSO         A Shares         15,506,488      0.02  DSO A Shares       15,506,488        0.02% 
DSO         B Shares         19,911,070     13.98  DSO B Shares       19,911,070       23.04% 
DSO         C Shares         29,926,070      0.03  DSO C Shares       29,926,070        0.04% 
DSO         D Shares          7,877,527      6.36  DSO D Shares        7,877,527       10.22% 
Consideration Shares 
                                                     DP2011 Gen 
DP2011      Gen Ords         15,679,241     11.49          Ords       15,679,241       18.70% 
DP2011      Gen A            18,453,789      1.11  DP2011 Gen A       18,453,789        1.94% 
                                                         DP2011 
            Structured                               Structured 
DP2011       Ords            10,678,725      8.08          Ords       10,678,725       13.11% 
                                                         DP2011 
            Structured                               Structured 
DP2011       A               12,572,817      0.78             A       12,572,817        1.32% 
            Low Carbon                               DP2011 Low 
DP2011       Ords             8,102,222      6.11   Carbon Ords        7,575,577       10.63% 
DP6         DP6               5,355,154      3.42          DP67        5,355,154        5.63% 
DP7         DP7               6,006,085      3.81          DP67        6,006,085        6.32% 
 
  * The Net Asset Values shown here are the unaudited 
  figures as at 31 March 2015 for DSO, 30 November 2014 
  for DP2011 (adjusted for dividends paid since) and 
  31 January 2015 for DP6 and DP7. 
 
 
   The worked example above is produced for illustrative purposes only and 
assumes that all Schemes are approved in full with no dissenting 
shareholders from any of the Companies. Voting rights of each share 
class following the Merger will be broadly in line with their relative 
net assets. 
 
   MANAGEMENT AND ADMINISTRATION ARRANGEMENTS 
 
   Downing is the investment manager of all of the Companies and also 
provides administration and secretarial services to all of the 
Companies. 
 
   Subject to the completion of the Merger, the Enlarged Company will enter 
into revised arrangements with Downing pursuant to which Downing will 
receive fees as follows: - 
 
   Investment Management Fees are to be calculated according to the 
specific share class in which the assets in question are held: 
 
 
 
 
           Annual Fee 
             (Pre and 
Company    post Merger)                         Comments 
                         Reduced by 0.2% to 1.3% for the 12 months immediately 
DSO           1.5%                        following the Merger 
                         Reduced by 0.2% to 1.6% for the 12 months immediately 
DP2011        1.8%                        following the Merger 
DP6/DP7           1.35% 
 
 
   Downing has agreed to provide running cost caps following the Merger as 
follows: 
 
 
 
 
                             Running Cost 
             Running Cost      Cap post- 
  Company    Cap pre-Merger     Merger 
DSO                    3.5%          3.0% 
DP2011                 3.5%          3.0% 
DP6/ DP7               2.9%          2.9% 
 
   THE DSO BOARD 
 
   The Boards have considered what the size and future composition of the 
DSO Board should be following the Merger and it has been agreed that 
subject to completion of the Merger, the Board composition will be 
rearranged such that two new directors will be appointed to join the 
existing DSO Board. 
 
   It is proposed that Sir Aubrey Brocklebank and Russell Catley join the 
DSO Board from their current appointments as directors of DP2011. The 
appointments of Sir Aubrey Brocklebank and Russell Catley as directors 
of DSO are subject to the completion of the Merger, and will ensure that 
the board of directors of the Enlarged Company have direct experience of 
approximately 90% of the Enlarged Company's portfolio (by value). It is 
intended that Sir Aubrey Brocklebank will be appointed as the Senior 
Independent Director upon joining the DSO Board. 
 
   DSO CHANGES TO ITS ARTICLES, RENEWAL OF SHARE ISSUE AND BUYBACK 
AUTHORITIES AND CANCELLATION OF SHARE CAPITAL AND RESERVES 
 
   As the structure of DSO will change if the Merger goes ahead, due to the 
creation of a number of new classes of shares, there are some structural 
changes required to the Articles to ensure the smooth and equitable 
running of the Enlarged Company. The proposed changes are as follows: 
 
   1. The addition to the Articles of the share rights of the New Share 
Classes 
 
   In respect of rights to receive dividends and distributions of capital, 
these will be identical to the rights in the Target VCT's existing 
articles of association and will not affect existing Shareholders of DSO 
as they will only be relevant to the segregated assets of each New Share 
Class which are transferred to DSO pursuant to the Merger. 
 
   2. The introduction of a structured voting rights system for general 
meetings 
 
   A proposed new voting rights system (described in more detail below) 
aims to ensure that, at a general meeting where holders of all types of 
shares may be present, the voting power attributable to the various 
existing classes and New Share Classes is broadly proportionate to the 
relative value those classes represent in the Enlarged Company. This is 
achieved by having a base number of votes for each share in a particular 
class, based on that class's current Net Asset Value. There is also a 
mechanism for increasing or decreasing the number of base votes in the 
event that the NAV of a class rises or falls in increments of 25%. 
 
   3. The introduction of mechanism to wind up exiting share classes 
 
   As certain of the planned exit classes of shares in the Enlarged Company 
are approaching the end of their lifecycles, the Board believes this is 
an opportune time to introduce a mechanism into the Articles to allow 
the Enlarged Company to efficiently wind up share classes in which the 
value has been almost entirely distributed to shareholders. 
 
   It is proposed that where the Net Asset Value of a particular class 
falls below GBP25,000 or the largest shareholder holds shares with a 
value of less than GBP20, the Board will have the right to convert the 
remaining shares into deferred shares for repurchase by DSO. This will 
prevent an almost 'empty' share class, with minimal economic value, from 
persisting inefficiently and incurring fixed costs relating, amongst 
other things, to maintaining its listing on the London Stock Exchange. 
 
   4. The increase to the directors' annual remuneration cap 
 
   An increase to the cap on the aggregate sum to which directors of DSO 
are entitled by way of remuneration for their services from GBP100,000 
to GBP150,000 is proposed in light of the increase in size of the 
Enlarged Company and its board. 
 
 
 
 
EXPECTED TIMETABLE FOR THE MERGER                                         2015 
Latest time for the receipt of forms of proxy for                 12 noon on 7 
 the DSO General Meeting                                                  July 
DSO General Meeting                                               12 noon on 9 
                                                                          July 
Class Meeting of Ordinary Shareholders                         12.05 p.m. on 9 
                                                                          July 
Class Meeting of A Shareholders                                12.10 p.m. on 9 
                                                                          July 
Class Meeting of B Shareholders                                12.15 p.m. on 9 
                                                                          July 
Class Meeting of C Shareholders                                12.20 p.m. on 9