Downing TWO VCT plc 
   LEI: 213800HJGTPW7F8YEY55 
   Result of AGM 
   23 September 2010 
   At the Annual General Meeting ("AGM") of Downing THREE VCT plc held on 
23 September 2020, all resolutions were passed. 
   Details of the proxy votes in respect of the resolutions passed at the 
AGM received as at 11:00 a.m. on 21 September 2020, 48 hours before the 
time of the meeting (excluding weekends), at the receiving agent, 
Downing LLP, are set out below: 
                       For  Discretionary     Against              Withheld 
--------------  ----------  -------------  ----------  ----------  -------- 
Resolution No.      No. of         No. of      No. of       Total    No. of 
                     Votes          Votes       Votes  Votes Cast     Votes 
                % of votes     % of votes  % of votes  % of votes 
--------------  ----------  -------------  ----------  ----------  -------- 
      1          5,120,509         51,591      68,750   5,240,850     4,962 
                    97.70%          0.98%       1.31%      99.99% 
--------------  ----------  -------------  ----------  ----------  -------- 
      2          4,436,256         74,136     387,338   4,897,730   348,082 
                    90.58%          1.51%       7.91%     100.00% 
--------------  ----------  -------------  ----------  ----------  -------- 
      3          4,282,145         64,311     481,774   4,828,230   417,582 
                    88.69%          1.33%       9.98%     100.00% 
--------------  ----------  -------------  ----------  ----------  -------- 
      4          4,884,960         51,591     270,374   5,206,925    38,887 
                    93.82%          0.99%       5.19%     100.00% 
--------------  ----------  -------------  ----------  ----------  -------- 
      5          4,737,802         56,491     328,720   5,123,013   122,799 
                    92.48%          1.10%       6.42%     100.00% 
--------------  ----------  -------------  ----------  ----------  -------- 
      6          4,721,682         56,491     333,845   5,112,018   133,794 
                    92.36%          1.11%       6.54%     100.00% 
--------------  ----------  -------------  ----------  ----------  -------- 
      7          4,901,090        142,913     143,859   5,187,862    57,950 
                    94.47%          2.75%       2.77%      99.99% 
--------------  ----------  -------------  ----------  ----------  -------- 
   A copy of the resolutions passed will be submitted to the National 
Storage Mechanism and will shortly be available for inspection at 
   In view of the ongoing social distancing restrictions, the AGM was held 
as a closed meeting. The Board requested that shareholders submit any 
questions prior to the meeting. The board commented on the issues raised 
as follows: 
   G Share pool - Poor performance of a number of investments -- Hermes, 
Apex and Zora 
   Hermes sought to develop a wood pelleting plant but encountered major 
issues. Zora was set up to distribute wood pellets to be supplied by 
Hermes. The investment decision was based upon the successful 
construction of a comparable plant by the same management team in 
Austria, however the management team struggled with UK construction 
practices and was unable to build the plant to the assumed cost and time 
budget and the project has become unviable. The Investment Manager is 
now seeking to sell the site to a third party as this is believed to be 
the best route to recover any value. 
   Apex Energy was a reserve energy plant which was constructed by a 
development partner with whom Downing had previously worked successfully 
on solar installations.  The scheme relied upon sourcing previously used 
engines.  Upon commissioning one engine failed and investigations showed 
that all the engines were unsafe.  Although protected by a comprehensive 
contract, the VCT was unable to recover value from the developer as at 
that time because the developer was in financial distress.  Lawyers were 
appointed, but the cost of pursuing the developer through the courts was 
not justified given the chances of a successful recovery. 
   K Share pool - portfolio diversification 
   Investing the K Share pool funds was very challenging as new VCT 
regulations had been brought in, which severely restricted the 
investments VCTs could make. Part of the planned exit approach was to 
invest the funds in a reasonably short period to ensure that exits could 
be achieved in a timely manner. This resulted in a lower diversification 
level than would have been optimal. The Board and Manager concluded at 
the time of the investments being made that the risk profile of these 
investments and the diversification level were acceptable under the 
   Monitoring of overseas investments 
   The VCT primarily backs the management teams on its investments.  On 
overseas investments, there are regular visits to the overseas locations 
by Downing executives -- For example, several Downing executives have 
had regular visits to India on the Indian Solar investments. However in 
that case, the local management team has failed to deliver the same 
standards that Downing had seen from them on previous projects and 
Downing has now had to take a more hands-on role and all aspects of the 
projects are being investigated. A prevailing Indian power price of much 
lower than forecast by consultants is the key factor in the loss of 
value on these investments, although delays and adverse local government 
policy have also been a significant hindrance. 
   Why no online access to AGM? 
   The Board believes shareholders have been given a suitable opportunity 
to question the Board by inviting questions prior to the AGM. 
   The Board has considered an online option for the AGM, however, has 
concluded that it is difficult to get such meetings to work smoothly. To 
properly undertake voting at an online AGM really requires a specialist 
third party provider to run the meeting and this appears to be an 
inappropriately expensive cost for the Company. It is also worth noting 
that many other investment companies much larger than this VCT have also 
chosen to hold their AGMs in a similar manner, presumably for the same 
reasons as we have identified. 
   While the Board accepts that there was no opportunity to put questions 
to the board and manager without advance warning, the Board and Manager 
are able to respond perhaps more fully by being able to discuss the 
matters first. 

(END) Dow Jones Newswires

September 23, 2020 13:27 ET (17:27 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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