Portfolio update & Dividend declaration

    Portfolio update & Dividend declaration
             



Downing Protected VCT I plc
9 May 2008
Portfolio update and Dividend declaration
�
Downing Protected VCT I plc has today sent the following update to
Shareholders:
�
Dear Shareholder
�
Shareholder Update
I am writing to  update you on several  developments that have  taken
place within Downing  Protected VCT  I plc since  the Company's  half
year results to 31 December 2007.
�
Management Incentive Fee Arrangements
Firstly, as I mentioned in my  statement with the half year  results,
the  Board   has  been   reviewing  the   management  incentive   fee
arrangements.� The Board  is planning  to make two  changes to  these
arrangements:
�
(i)�to remove the  cap on  the fees payable,  which is  now close  to
being used up, and
(ii) to reallocate the fees between the Directors and the  Investment
Manager such that the Investment Manager receives a higher proportion
when performance exceeds a certain level.
�
The  Board  believes  that  the  Company  should  continue  to   have
management incentive fee arrangements  in place that incentivise  the
Board and Management to achieve profitable exits from investments and
to distribute  those  gains to  Shareholders.�  A comparison  of  the
current scheme and the new scheme is summarised as follows:
�

�                           Current Scheme �               New Scheme
�
Rate:                  25% of the total of �      25% of the total of
                    dividends above 3p per     dividends above 3p per
                      share per annum plus   share per annum plus the
                         the incentive fee              incentive fee
                                         �
Cap:            Cumulative fees payable in �                   No cap
                        respect of capital
                      dividends limited to
                                  �400,000
                                         �
�                                        � �      Between           �
�                                        �      3p and 4p    Above 4p
Allocation:                              �      per share   per share
Chris       Kay                        25% �          25%         10%
(Chairman)
Martin Bradford                        25% �          25%         10%
(Non-exec.
Director)
Investment                             50% �          50%         80%
Management Team

�
It should be noted that the total cost to Shareholders under the  new
scheme is the same as that under the current scheme.
�
The Board had  initially been  advised that the  above changes  would
require the Company  to prepare a  full circular seeking  shareholder
approval.� After  some  discussions,  the UK  Listing  Authority  has
decided that the changes do not require a circular under the  Listing
Rules.� In view  of the fact  that the new  arrangements are only  an
extension of the existing arrangements and the fact that the Board do
not wish to incur unnecessary  costs, the Directors have decided  not
to produce a circular and will, therefore, not hold an  Extraordinary
General Meeting  on 14  May 2008  as previously  suggested.� The  new
scheme will be put in  place such that it  commences at the start  of
the Company's next financial year on 1 July 2008.
�
Portfolio Developments
Turning to the Company's investments, in the period since 31 December
2007, the portfolio has  produced another profitable realisation  and
has also seen a small gain  in value.� In February 2008, the  Company
sold one  of its  original investments,  Downing (Meadows)  Limited.�
This generated  proceeds of  approximately  �1.1 million  against  an
original cost of  �580,000 and  the previous carrying  value of  �1.0
million.� At 31 March  2008, the Company's Net  Asset Value stood  at
113.3p per share, an  uplift of 3.1p since  31 December 2007.�  Total
Return (NAV plus cumulative  dividends) to original shareholders  now
stands at 161.45p.
�
Dividend
In view of the  successful realisation of  the investment in  Downing
(Meadows) Limited,  the  Board  is  pleased  to  announce  a  further
dividend. �The Company will  pay a second  interim dividend of  1.25p
per share on 11 June 2008 to  Shareholders on the register at 23  May
2008.� This will bring total tax-free dividends paid to  Shareholders
since the Company's launch in 1997 to 50.90p per share.
�
It is clear that the  economic climate has become significantly  more
negative in recent months.�  It is, therefore, particularly  pleasing
to report the above  continuing good progress  by your Company.�  The
other Directors  and  I  feel  confident that  the  Company  holds  a
portfolio of investments that can  continue to perform well, even  in
more challenging conditions.
�
Yours sincerely
�
Chris Kay
Chairman

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