DOWNING PROTECTED VCT VI

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DOWNING PROTECTED VCT VI VII

• March 2007

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Important Notice

• This presentation has been designed for
  independent financial advisers, authorised and
  regulated by the Financial Services Authority and
  has not been approved for any other purpose. If
  you forward this document to any other person,
  you must ensure that you have taken
  responsibility for it under the financial
  promotion rules. The information contained herein
  is in summary form, subject to change, and has
  been set out for illustrative purposes only and
  no reliance should be placed on it. Investment
  decisions should be based only on the Prospectus,
  which was published in January 2007. Downing
  Corporate Finance Limited, 69 Eccleston Square,
  London SW1V 1PJ (tel [phone]), is
  authorised and regulated by the Financial
  Services Authority.

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Risk Factors

• Limited secondary market the secondary market
  for shares in VCTs is limited and as a result VCT
  shares usually trade at a discount to their
  underlying value.
• Type of company invested in VCTs are designed to
  provide capital for small companies and the
  Company will invest in several companies. As
  such, there is a risk that any of these companies
  may not perform as hoped and in some circumstance
  may fail completely.
• VCT tax breaks the generous tax breaks are one
  of the major attractions of VCTs. If the
  investment is not held for five years or if the
  VCT does not comply with all the VCT regulations,
  the initial tax breaks can be withdrawn. In
  addition, the VCT tax reliefs are those which
  currently apply they may change in the future
  and their value to investors will depend on
  personal circumstances.
• Long-term nature of VCT investments VCTs are
  considered to be long-term investments (generally
  at least seven years).
• Charges and performance fees the levels of
  charges for VCTs may be greater than Unit Trusts
  and Open Ended Investment Companies.
• Security of capital as with most investments,
  the value of a VCT depends on the performance of
  the underlying assets. The value of the
  investment and the dividend stream can rise and
  fall. So the investor may get back less than they
  originally invested, even taking into account the
  tax breaks.
• Diversification if the funds raised under the
  Offers do not reach critical mass then the level
  of diversification within the VCTs may be
  reduced, which could increase risk.

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Contents

• DPVI VII - The Offer
• Track Record of DP I V
• Example DP VI VII transaction
• Investment Team Board
• The Offers
• Conclusion

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DPVI VII Whats on Offer?

• Lower risk VCT
• Conservative target 8 IRR to investors
  (equivalent to 13.3 gross)
• Investments secured on assets
• Clear exit strategy
• Start returning funds after 5 years, wind-up
  after 7 years
• Return of Capital e.g. Dividends,
  Distributions, Buy Backs, Tender Offers, Wind-up
• Target min cash return of 70p after five years
  balance within 7 years
• Low charges
• 1.35 p.a. management fee (inc VAT), TER capped
  at 2.9 p.a. (incl VAT)
• Performance incentive only commences once 100p
  returned to shareholders with 7 cash to cash IRR

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Downing Protected VCT I - Summary

• Raised 10m in 1997
• Invested within 3 years 9m in 10 investees
• Realised (8 assets/investments) within 9 years
• 1 loss (88k on 950k)
• 7 profitable
• Re-invested capital gt80 VCT Qualifying
• Total Return 149.5p over 9 years 5.5 p.a.
  (before effect of tax relief)
• 3rd out of 60 VCTs over 5 years (source
  Trustnet)

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DPI Performance
Top 25 out of over 100 VCTs
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Downing VCTs Track Record
Qualifying Investments (70 test)
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Investment Team

• Nicholas Lewis (51)
• Founder and director, Downing Corporate Finance
  Director of a number of VCTs including Downing
  Protected VCT I, formerly with Natwest Ventures
  and Apax Partners.
• David Megginson (48)
• Previous venture capital and structured finance
  experience obtained at Johnson Fry specialising
  in assessing and troubleshooting venture capital
  projects. He qualified as a chartered accountant
  with Arthur Andersen.
• Colin Corbally (38)
• Qualified as a solicitor with Linklaters, spent
  six years at 3i Group and four years at RBS
  (structured equity and debt investments). Managed
  investments in a night club, petrol stations and
  a pub group at RBS, as well as several
  manufacturing businesses with strong
  asset-backing.
• Tony McGing (41)
• Director of Downing Corporate Finance Limited,
  Pennine Downing AIM VCT plc and formerly a
  director of Downing Protected VCT I. He qualified
  as a chartered accountant with Kingston Smith
  Chartered Accountants.
• Grant Whitehouse (40)
• Joined Kingston Smiths city office in 1987 and
  qualified as a chartered accountant in 1991. He
  moved from audit to corporate finance in 1993 and
  was a senior manager when he left to join Downing
  in January 2000. He is company secretary to
  several VCTs.

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Board

• Hugh Gillespie (64) (Chairman)
• Chairman of Pennine AIM VCT and non-exec director
  of Burgess Group, formerly a director of Hill
  Samuel Bank.
• Dennis Hale (52) (Director)
• Formerly investment director of Financial
  Management Bureau FMB (a firm of independent
  financial advisers based in Cumbria). Clients
  advised by FMB have invested over 5m in VCTs to
  date.
• Nicholas Lewis (51) (Also Director)
• See Investment Team on previous page.
• Board Management Team have invested 1m in the
  Downing Protected VCTs to date.
• Amount to be invested in DPVI VII approx
  250,000.

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Offers Costs

• Upfront Charge 5.5
• Investment Management Fees 1.35 p.a.
• Other Running Costs max 1.55
• Performance Incentive Hurdle
• 7 p.a. tax-free IRR on 70p net investment (based
  on cash to cash) and
• 100p minimum cash return
• Performance Incentive Cap/Structure
• Capped at 1.25 p.a. of net assets
• Management fee max Performance Incentive 2.6
  p.a. (incl tax)
• Typical Generalist VCT management fee 2.3-2.9
  p.a. (incl VAT)
• No co-investment (in sweet equity) by management.

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Performance Incentive

• Performance Incentive Fee
• 3 on first 1 20 thereafter

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Conclusion

• Lower risk VCT Asset backed Generalist VCT
• Clear exit strategy Min target 70p in cash after
  5 years, wind-up within 7 years
• 8 target tax-free Compound Return (13.3
  gross equivalent)
• ( approx 113p)
• Low charges 1.35 a.m.c. (2.9 Max TER incl VAT)
• Successful team DPI is top decile performer
• DPIIV ahead of plan