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FTF Foresight Enterprise Vct Plc

57.50
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Foresight Enterprise Vct Plc LSE:FTF London Ordinary Share GB00B07YBS95 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 57.50 56.00 59.00 57.50 57.50 57.50 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 9.9M 6.22M 0.0263 21.86 136.19M

Foresight 4 VCT Plc Foresight 4 Vct Plc : Annual Financial Report

29/07/2016 4:22pm

UK Regulatory


 
TIDMFTF 
 
 
   FORESIGHT 4 VCT PLC 
 
   Summary Financial Highlights 
 
 
   -- Net asset value per Ordinary Share at 31 March 2016 was 70.4p (31 March 
      2015: 83.9p), after allowing for the 4.0p per share dividend paid on 18 
      December 2015. 
 
   -- On 10 August 2015 the O and C Share funds were merged. On the basis of 
      the conversion ratio of 1.022646, 19,101,896 new Ordinary Shares were 
      allotted. 
 
   -- A 25.0p dividend per C Share was paid to C Shareholders on 6 August 
      2015. 
 
   -- Seven new investments were made by the fund totalling GBP7.2 million and 
      two follow-on investments were made totalling GBP0.2 million. 
 
   -- The fund realised GBP0.9 million from sales and loan redemptions from 
      four portfolio companies. 
 
 
 
 
 
   Chairman's Statement 
 
   Performance 
 
   In the year to 31 March 2016, the net asset value per Ordinary Share 
decreased by 11.3% to 70.4p from 83.9p at 31 March 2015, after allowing 
for the 4.0p per share dividend paid in December 2015. 
 
   Overall, the Board is pleased with the composition of the portfolio, 
particularly the prospects for the recent addition of seven new 
investments for a total consideration of GBP7.2 million. Of these new 
investments made during the year, several are already making encouraging 
progress, particularly Itad and Specac. Reflecting the Board and 
Manager's confidence in the current portfolio, the performance in the 
last quarter of the year under review showed an increase in underlying 
NAV of 2.5%. We believe the portfolio is well placed to deliver growth, 
underpin future dividends and enhance shareholder returns. 
 
   The overall fall in the year is, however, disappointing and was largely 
due to the performance of one portfolio company, Aerospace Tooling, 
which saw a reduction or delay in orders as some of its customers were 
severely impacted by the significant drop in the price of oil. Although 
it did not feel the impact as acutely as Aerospace Tooling, TFC Europe 
also suffered a drop in revenues from market driven factors related to 
the fall in the price of oil. Aerospace Tooling was reduced by GBP4.6 
million or 7.9p per share. Some encouraging progress has been made in 
winning orders and acquiring new customers but this process and the 
related sales cycles inevitably takes time. A new, experienced, CEO was 
appointed in January 2016 and the company is now returning to 
profitability. Despite the further provisions against the valuation 
following the period of sustained difficult trading conditions, I would 
like to remind Shareholders that the Company has previously repaid the 
entire cost of the original investment to the VCT. 
 
   Derby-based Datapath Group is the largest holding in the portfolio, 
being valued at GBP8.7 million and is a world leading innovator in the 
field of computer graphics and video-wall display technology utilised in 
a number of international markets. The company is increasing market 
share in control rooms, betting shops and signage and entering other new 
areas such as the medical market. For the year to 31 March 2015, an 
operating profit of GBP6.8 million was achieved on sales of GBP20.3 
million, with the North American division trading ahead of budget. The 
Board and Manager continue to focus on derisking large portfolio 
exposures such as Datapath and, in November 2015, Datapath paid a 
special dividend of GBP2.1 million to the Company. This was met 
principally from the company's own cash resources and management loans 
which are expected to be repaid from internally generated cash flow over 
the next year. 
 
   For a detailed review of all of the Company's investments I refer you to 
the Manager's Report that starts on page 10 of the Annual Report and 
Accounts. 
 
   Dividends 
 
   Prior to the merger, on 6 August 2015, a special dividend of 25.0p per C 
Share was paid to C Shareholders, following good performance of the 
portfolio including the sale of Defaqto Group Limited on 30 March 2015 
for GBP9.5 million, as announced on 31 March 2015. Holders of C Shares 
receiving this dividend were also given the opportunity to reinvest 
their dividend proceeds into new Ordinary Shares by way of a top up 
offer. 
 
   An interim dividend of 4.0p per Ordinary Share for the year ended 31 
March 2016 was paid on 18 December 2015 to the Shareholders on the 
register on 3 December 2015. It continues to be the Company's policy to 
provide a flow of tax-free dividends, generated from income and from 
capital profits realised on the sale of investments. Distributions will, 
however, inevitably be dependent on cash being generated from portfolio 
investments and successful realisations. 
 
   The recent and continuing success in generating cash from portfolio 
investments within the fund gives the Board confidence that it will be 
able to maintain the future payment of dividends to Shareholders. 
 
   Merger, Top-up Share Issues and Share Buy-backs 
 
   On 10 August 2015 the O and C share funds were merged, based on the net 
asset value of the Company's C Shares as at 31 March 2015 of 85.8p per C 
Share (being the audited NAV per C Share of 110.8p as at 31 March 2015, 
adjusted to take account of the 25.0p per C Share dividend paid on 6 
August 2015) and the NAV of the Company's Ordinary Shares as at 31 March 
2015 of 83.9p. The conversion ratio was 1.022646. On the basis of this 
conversion ratio, 19,101,896 new Ordinary Shares were allotted. 
 
   In accordance with the terms of the dividend reinvestment offer referred 
to above, on 11 August 2015, 423,717 Ordinary Shares were allotted at 
83.9p per share. 
 
   During the period under review 434,528 Ordinary Shares were repurchased 
for cancellation at a cost of GBP266,000. These were purchased at a 
discount to NAV ranging from 20.9% to 30.1%. 
 
   Shareholder Communication 
 
   As part of its ongoing commitment to improving shareholder communication 
the Board has solicited shareholder views by means of a survey in 2016 
and has also held a successful Shareholder Forum in June 2016. As the 
event was oversubscribed we will be in touch later this year about 
opportunities to attend similar events. 
 
   VCT Legislation 
 
   As previously discussed, changes to VCT regulations were finally 
confirmed on 18 November 2015. There were no material changes to those 
detailed in my interim report. One of the principal purposes of the 
changes was to prevent VCT investment being used to acquire existing 
shares or the principal trade or assets of businesses. 
 
   The key aspects of the proposed new rules are as follows: 
 
 
   -- Introducing an 'age of company' restriction of a maximum of seven years 
      at the time of first VCT investment; 
 
   -- Introducing a lifetime state aided investment limit of GBP12 million; and 
 
   -- Prohibiting VCT investment financing acquisitions (as mentioned above). 
 
 
   Although the recent rule changes preclude VCTs investing in replacement 
capital transactions, the Treasury and HMRC have since agreed to review 
this policy following representations from inter alia the British 
Venture Capital Association, the Association of Investment Companies, a 
number of legal firms and VCT managers, including Foresight Group. 
 
   Rather than an absolute restriction on replacement capital transactions, 
this review will consider relaxing the current rules to enable VCTs to 
invest an element of replacement capital alongside a significant element 
of growth capital in any particular transaction, possibly up to a 
maximum of 50% of the total amount invested. Agreement for the change is 
currently expected to take up to two years and shareholders will be kept 
informed of any significant developments. 
 
   If concluded satisfactorily, the range of potential investment 
opportunities for VCTs would be widened, compared to the more 
restrictive regime that currently applies. 
 
   Brexit 
 
   There are two principal areas where the implementation of Brexit could 
impact the VCT: 
 
 
   1. Investee Companies - there has been much debate on the possible impact on 
      trade between Europe and the UK following the Brexit vote and how this 
      will impact UK corporates. Although it is much too early to say how large 
      or small the impact may ultimately be, we do not believe that the impact 
      will be material in the short to medium term; and 
 
   2. Regulation - many parts of the current VCT legislation has been cast from 
      EU State Aid Directives, however, we do not believe that even following 
      Brexit that changing VCT legislation will be a priority for the UK 
      Government and therefore we do not expect any changes to the existing 
      legislation in the short to medium term. 
 
   Merger Consideration 
 
   The Board has been closely monitoring the successful merger of Foresight 
VCT plc and Foresight 2 VCT plc following Shareholder approval in 
December 2015. Although the Board has not formally engaged with another 
company at this time, it is considering whether a merger and the 
benefits therefrom would be in Shareholders long term interests and 
hopes to provide a further update in that regard in due course. 
 
   Restatement of reserves 
 
   The Company completed a cancellation of GBP30,963,251 and GBP1,750,587 
of the amounts standing to the credit of share premium account and 
capital redemption reserve respectively on 29 November 2012. The amounts 
so cancelled created additional distributable reserves which could be 
used to support dividend payments or distributions, buy-backs, set off 
losses against and for other corporate purposes. The cancellation has 
not been reflected in the financial statements for the years ended 31 
March 2013 to 31 March 2015 and has now been corrected in the enclosed 
financial statements. 
 
   Annual General Meeting 
 
   The Company's Annual General Meeting will take place on 30 September 
2016 at 1.00pm. I look forward to welcoming you to the Meeting, which 
will be held at the offices of Shakespeare Martineau LLP in London. 
Details can be found on page 62 of the Annual Report and Accounts. 
 
   Prior to the formal business of the Annual General Meeting, Foresight 
Group, the investment Manager and two investee companies will give 
presentations between 12.00pm and 1.00pm. 
 
   Outlook 
 
   Although there is still considerable uncertainty in continental Europe 
as a result of stresses within the Euro area the UK economy is in 
reasonable health and many businesses are making steady progress. The 
recent decision resulting from the referendum on 23 June, for the UK to 
begin negotiations to leave the European Union has also given rise to 
further uncertainty and it will take time to gauge the full effect that 
this may have for the Company. Many of the familiar risks, both 
financial and political, remain and there can be no grounds for 
complacency as all of our investments operate in competitive 
environments. 
 
   We hope that the effect of the improvement in the economy over the last 
few years continues, as this has been reflected in the improving 
performance of the private equity part of the portfolio. Within the 
portfolio, there is an ongoing focus on performance and realisations, 
refinancings, dividends and loan repayments which underpin the Board's 
dividend commitment to Shareholders. It has also enabled several new 
investments to be made which we anticipate will further enhance 
Shareholder returns. 
 
   Philip Stephens 
 
   Chairman 
 
   29 July 2016 
 
 
 
   Manager's Report 
 
   In the year under review for 31 March 2016, the net asset value per 
Ordinary Share decreased by 11.3% to 70.4p per share from 83.9p per 
share as at 31 March 2015 (after taking into account the 4.0p per share 
dividend paid in December 2015). During the year the Company was 
negatively impacted in particular by a GBP4.6 million reduction in the 
valuation of one investment, Aerospace Tooling Holdings, due to a lower 
level of orders from its two largest customers, but benefitted from good 
performances by several portfolio companies and the receipt of a GBP2.1 
million dividend from Datapath and a recapitalisation of GBP710,000 from 
TFC. 
 
   On 10 August 2015, the merger of the Ordinary Share and C Share classes 
was completed. A special dividend of 25.0p per C Share was paid on 6 
August 2015 reflecting the performance of the C Share class portfolio 
and, in particular, the sale of Defaqto Group Limited on 30 March 2015 
for GBP9.5 million. The merger was effected by converting the C Shares 
into new Ordinary Shares on a relative net asset value basis using the 
audited NAVs of the Ordinary Share and C Share as at 31 March 2015, 
adjusted for any material movements up to the date of conversion. Based 
on the audited net asset value as at 31 March 2015 of 85.8p per C share 
(being the audited NAV per C Share of 110.8p as at 31 March 2015, 
adjusted to take into account of the above mentioned 25.0p per share 
dividend) and the NAV per Ordinary Share as at 31 March 2015 of 83.9p, 
the conversion ratio was 1.022646. 
 
   An interim dividend of 4.0p per Ordinary Share was paid on 18 December 
2015 to shareholders on the Register on 3 December 2015. 
 
   Having realised a significant number of investments over recent years, 
the principal focus in the year under review was making new investments. 
Seven new investments were made, several of which are already making 
encouraging progress, particularly Itad and Specac. Further details of 
these new investments can be found in the Portfolio Review later in this 
report. 
 
   Foresight Group continues to see a number of high quality private equity 
investment opportunities. Foresight believes that, with the UK and US 
economies slowly recovering, investing in growing, well managed private 
companies should, based on past experience, generate attractive returns 
over the longer term. Based on its current deal flow, Foresight believes 
that attractive deals are currently available. 
 
   The recent Brexit referendum results on the United Kingdom leaving the 
European Union is not expected to result in any immediate material 
changes to the overall portfolio. Any prolonged weakness in Sterling 
will benefit those companies in the portfolio with a high proportion of 
exports. 
 
   Impact of recent changes to VCT legislation 
 
   The budget in July 2015 introduced a number of significant changes to 
VCT legislation. Following receipt of EU State Aid approval, these 
regulatory changes took effect from 18 November 2015, the date of Royal 
Assent to the Finance Act 2015. Two of these changes in particular are 
expected to impact the future management of all VCTs. First the 
restriction on the age of a company that is eligible for investment by a 
VCT (generally no more than seven years from the date of the company's 
first commercial sale) and second, restrictions on VCT funds being used 
in acquiring an interest in another company or existing business. By 
precluding replacement capital transactions, such as shareholder 
recapitalisations, management buy-outs or buy-ins and funding 
acquisitions by investee companies, the restrictions are designed to 
encourage more development capital transactions and investment in 
generally younger, less mature companies. 
 
   Foresight VCTs already invest in all these types of transactions so, 
although the proposed changes will result in a change of investment 
emphasis, they are not expected to have a material impact. Foresight 
VCTs will continue to focus on investing in established, growing, 
profitable companies with an attractive risk/return profile as at 
present but will change emphasis from replacement capital transactions 
to development capital investments, including investing in earlier stage 
companies with a clear path to profitability. It will not be the policy, 
except in exceptional circumstances, to invest in start up companies. 
 
   Foresight Group has a strong track record in development capital 
transactions, having invested in both growth capital and replacement 
capital transactions since its formation over 30 years ago. For example, 
40% of all investments made since 2010 were development capital 
transactions. Since then, 14 of these investments have been successfully 
realised, generating an average return of 2.2 times original cost. 
 
   With this long and successful track record, Foresight's marketing 
efforts have been refocused towards finding suitable, later stage 
development capital investment opportunities, with the aim of 
accelerating their growth. A number of such opportunities are currently 
under active consideration. Foresight remains confident that sufficient, 
suitable new and attractive investment opportunities can be sourced 
which will meet its return criteria and comply with the VCT rules. 
 
   While the full implications of the new rules have yet to be established, 
it is clear that, over the medium term, as existing investments are 
realised, this change in investment emphasis and the nature of new 
investments may lead to an increase in the VCTs' risk profile. Over the 
medium term, however, any such increase in risk profile could be 
tempered by a favourable outcome to the proposed VCT policy review, as 
mentioned below. The rule changes will, however, make the VCTs' 
operating environment more complicated and could limit the number of 
opportunities available for investment. Similarly, the Company may not 
necessarily be able to provide further investment funds for companies 
already in its portfolio. 
 
   Proposed VCT Policy Review 
 
   Although the recent rule changes preclude VCTs investing in replacement 
capital transactions, the Treasury and HMRC have since agreed to review 
this policy following representations from inter alia the British 
Venture Capital Association, the Association of Investment Companies and 
a number of legal firms and consider relaxing the current rules to 
enable VCTs to invest an element of replacement capital alongside a 
significant element of growth capital in any particular transaction. At 
this stage, it is not possible to forecast the outcome of the review, 
and Shareholders will be kept informed of any significant developments. 
 
   If this review concludes satisfactorily, the range of potential 
investment opportunities for VCTs would be widened, compared to the more 
restrictive regime that currently applies. 
 
 
 
   Portfolio Review 
 
 
   1. New Investments 
 
 
 
 
 
 
 
Company                            GBP 
ABL Investments Limited         1,000,000 
FFX Group Limited               1,372,000 
Hosital Services Limited        1,200,000 
Itad Limited                    1,000,000 
Protean Software Limited        1,000,000 
Specac International Limited      650,000 
The Business Advisory Limited   1,000,000 
Total                           7,222,000 
 
 
 
   During the year, GBP7.2 million was invested in the above seven 
companies, each well established, growing and profitable. 
 
   In September 2015, as part of a GBP4.2 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in ABL Investments 
Limited ("ABL") to support its continuing growth. 
 
   ABL, based in Wellingborough, Northants and with a manufacturing 
subsidiary in Serbia, manufactures and distributes office power supplies 
and distributes monitor arms, cable tidies and CPU holders to office 
equipment manufacturers and distributors across the UK. 
 
   In September 2015, as part of a GBP3.9 million round alongside other 
Foresight VCTs, the Company invested GBP1.4 million in FFX Group Limited 
to support the continuing growth of this Folkestone based multi- channel 
distributor of power tools, hand tools, fixings and other building 
products. Since launching its ecommerce channel in 2011, FFX has grown 
rapidly supplying a wide range of tools to builders and tradesmen 
nationally. 
 
   In September 2015, as part of a GBP4.5 million round alongside other 
Foresight VCTs, the Company invested GBP1.2 million in Hospital Services 
Limited (HSL) to support its continuing growth. Based in Belfast and 
Dublin, HSL distributes, installs and maintains high quality healthcare 
equipment supplied by global partners such as Hologic, Fujifilm and 
Shimadzu, as well as supplying related consumables. 
 
   In September 2015, as part of a GBP4.0 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in Itad Limited, a 
long established consulting firm which monitors and evaluates the impact 
of international development and aid programmes, largely in developing 
countries. Customers include the UK Government's Department for 
International Development, other European governments, philanthropic 
foundations, charities and international NGOs. Most contracts are long 
term, providing good revenue visibility, while more than half of the 
employees being experienced consultants. 
 
   In July 2015, the Company invested GBP1.0 million as part of a GBP4.0 
million round alongside other Foresight VCTs to finance a management 
buy-in/buy-out of Coventry based Protean Software Limited ("Protean") 
and fund planned growth. Protean develops and sells business management 
and field service management software for organisations involved in the 
supply, installation and maintenance of equipment, across sectors 
including facilities management, HVAC and elevator installation. 
Foresight has introduced two experienced software executives as CEO and 
Chairman respectively, who are working alongside three of the current 
directors to drive the business forward and execute growth plans. 
 
   In April 2015, the Company and Foresight 3 VCT each invested 
 
   GBP650,000 in shares and loan notes, alongside a further a GBP1.3 
million investment by Foresight VCT, in Specac International Limited 
("Specac") to finance a GBP2.6 million management buy-out of Specac 
Limited from Smiths Group plc. The three Foresight VCTs together 
acquired a majority equity shareholding with the management team holding 
the remaining equity. 
 
   Specac, based in Orpington, Kent, is a long established, scientific 
instrumentation accessories business, manufacturing high specification 
sample analysis and sample preparation equipment used across a broad 
range of applications in testing, research and quality control 
laboratories and other end markets worldwide. The company's products are 
primarily focused on supporting IR Spectroscopy, an important analytical 
technique widely used in research and commercial/ industrial 
laboratories. 
 
   In September 2015, as part of a GBP3.3 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in The Business 
Advisory Limited. This company provides a range of advice and support 
services to UK based small businesses seeking to gain access to 
Government tax incentives, largely on a contingent success fee basis. 
With a large number of small customers signed up under medium term 
contracts, the company enjoys a high level of recurring income and good 
visibility on future revenues. 
 
 
   1. Follow-on funding 
 
 
 
 
 
 
 
Company                                       GBP 
The SkillsGroup (formerly AtFutsal Group)    34,000 
Autologic diagnostics Group Limited*        160,000 
Total                                       194,000 
 
 
 
   *Representing capitalised interest. 
 
 
 
 
   1. Realisations 
 
 
 
   In July 2015, TFC Europe effected a successful recapitalisation and 
share reorganisation, through which the Foresight VCTs were repaid all 
their outstanding loans, together with all accrued interest and a 
redemption premium. The Company was repaid GBP710,000 and increased its 
shareholding from 17.87% to 22.23%. 
 
   An amount of GBP58,000 was received from the administrators of i-Plas 
Group during the year. 
 
   During the year, 62,982 ordinary shares in AIM listed Zoo Digital were 
sold, realising GBP7,000. 
 
   In November 2015, the Company received a dividend of GBP2.1 million from 
Datapath. 
 
   In March 2016 the Company's interest in O-Gen Acme Trek was sold to 
Blackmead Infrastructure Limited, a subsidiary of Foresight's 
 
   Inheritance Tax Solution, at book value for an initial cash 
consideration of GBP107,000 and a deferred consideration of GBP516,000. 
 
 
   1. Material provisions to a level below cost in the year 
 
 
 
 
Company                                              GBP 
Aerospace Tooling Corporation Limited             4,560,000 
AlwaysOn Group Limited                              182,000 
Autologic Diagnostics Group Limited                 306,000 
Trilogy Communications Holdings Limited              60,000 
The SkillsGroup (formerly named AtFutsal Group)     412,000 
VectorCommand Limited                               302,000 
Total                                             5,822,000 
 
 
   The valuation of the investment in Aerospace Tooling Holdings Limited 
was reduced by GBP4.6 million to GBP987,000 during the year due to a 
lower level of orders from its two largest customers. The cost of 
investment at the year-end was GBP150,000. The full original cost of the 
investment has already been repaid to Foresight 4 VCT plc. 
 
 
   1. Performance Summary 
 
 
   The net asset value per Ordinary Share decreased by 11.3% to 70.4p per 
share as at 31 March 2016 from 83.9p per share as at 31 March 2015 
(after incorporating the 4.0p per share dividend paid in December 2015). 
As explained below, the net asset value was negatively impacted by a 
GBP4.6 million reduction in the valuation of Aerospace Tooling Holdings. 
However, during the year the Company benefitted from good performances 
by several portfolio companies. Together with Itad and Specac, Blackstar 
Amplificiation Holdings Limited, CoGen Limited, Ixaris Systems Limited, 
Positive Response Communications Limited, and The Bunker Secure Hosting 
limited all performed well, supporting an increase in their aggregate 
valuation of over GBP2.3 million. Seven new investments totalling GBP7.2 
million were made during the year and are already making encouraging 
progress, particularly Itad and Specac. Itad has won several large long 
term contracts, providing good revenue visibility for the current and 
future years, while Specac successfully launched new products and 
increased sales, particularly in the important US market. 
 
   TFC's valuation was reduced by GBP706,000 during the year reflecting 
reduced demand from the Oil & Gas sector in marked contrast to positive 
signs of improvement across a variety of other industry sectors. As a 
consequence of the VCT rule changes referred to above, Foresight's 
marketing efforts have already been refocused towards finding more 
suitable, later stage development capital investment opportunities, with 
the aim of accelerating the growth of established, profitable companies. 
A number of such opportunities are currently under active consideration. 
The M&A market continues to be active, providing opportunities for 
future realisations. 
 
   Portfolio Company Highlights 
 
   In September 2015, as part of a GBP4.2 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in ABLInvestments 
Limited ("ABL") to support further growth. ABL, based in Wellingborough, 
Northants and with a manufacturing subsidiary in Serbia, manufactures 
and distributes office power supplies and distributes monitor arms, 
cable tidies and CPU holders to office equipment manufacturers and 
distributors across the UK. Founded in 2003, ABL has grown strongly over 
the last five years, achieving an EBITDA of GBP1.9 million on sales of 
GBP5.5 million in its financial year to 31 August 2015, reflecting a 
strong focus on customer service, speed of delivery and value for money. 
Growth is forecast to be achieved by broadening the product range and 
customer base in the UK, improving efficiency, marketing materials and 
the website and, in due course, expanding internationally. A new 
Chairman with experience of the office supplies market has been 
appointed to the Board, alongside a new Finance Director, with plans in 
hand to recruit a COO. A Financial Controller and additional salesmen 
have been recruited. 
 
   In June 2013, the Company invested GBP1.5 million alongside other 
Foresight VCTs in a GBP3.5 million investment in Dundee-based Aerospace 
Tooling Holdings ("ATL"), a well-established specialist engineering 
company. ATL provides repair, refurbishment and remanufacturing services 
to large international companies for components in high-specification 
aerospace and turbine engines. With a heavy focus on quality assurance, 
the company enjoys well established relationships with companies serving 
the aerospace, military, marine and industrial markets. In the year to 
30 June 2014, a number of large orders underpinned exceptional growth, 
with turnover doubling and EBITDA profits increasing significantly to a 
record GBP4.3 million. 
 
   Reflecting particularly strong cash generation, the company effected a 
recapitalisation and dividend distribution in September 2014, returning 
the entire GBP3.5 million cost of the Foresight VCTs' investments made 
only 15 months previously. Having received full repayment of its loan of 
 
   GBP1.4 million and dividends of GBP150,000 equal to the cost of its 
equity investment, the Company retained its original 23% equity 
shareholding in the company, effectively at nil cost. 
 
   Although sales and profitability were expected to be lower in the year 
to 30 June 2015, the actual trading results were weaker than budgeted, 
EBITDA of GBP2.5 million being achieved on sales of GBP8.1 million, 
reflecting weak trading in the final quarter of the year due to a 
premature reduction of work under a major defence contract. This 
unexpected early contract termination was subsequently followed by a 
significant reduction in work for an important customer in the Oil and 
Gas industries, as a consequence of the falling oil price. With poor 
order visibility, costs were reduced, management changes made and sales 
efforts increased substantially. 
 
   Trading in the first half to December 2015 continued to be weak, with 
EBITDA losses being incurred on significantly lower sales. A new 
experienced CEO was appointed in January 2016 and the company has since 
seen improving sales, winning new customers and is now returning to 
profitability. 
 
   Following a merger with Data Continuity Group in April 2014, AlwaysOn 
Group implemented a major reorganisation, involving significant cost 
reductions and a subsequent change in the year end to June 2015. The 
merged business now provides data backup services, connectivity and 
Microsoft's Skype for Business (formerly known as Lync) collaboration 
software (AlwaysOn being a Microsoft Gold partner) to SMEs and larger 
enterprises. For the year to 31 March 2015, losses were successfully 
stemmed, with a small EBITDA profit being achieved on sales of GBP8.0 
million and reasonable cash balances at that date. In the current year, 
trading continues at a similar level with small losses being incurred. 
 
   Revenues for the merged entity were slightly behind budget, due to 
weaker product sales and data back-up renewals, while managed services 
performed ahead of expectations. Further cost reductions were also 
implemented. To improve the company's digital presence and channel sales 
of Lync (to be rebranded Skype for Business), a new Head of Marketing 
was recruited, who has had a beneficial impact on sales. With a number 
of significant pipeline opportunities being generated through partners 
for Skype for Business, performance is expected to improve significantly 
as these convert into orders. In view of the overall weak trading 
performance, a provision of GBP182,000 was made against the cost of the 
investment during the period. 
 
   Following the GBP48.0 million secondary buy-out of Autologic Diagnostics 
Group, an automotive diagnostics software company, by Living Bridge 
(formerly ISIS Private Equity) in January 2012, the Company retained 
investments in equity and loan stock valued at GBP2.0 million. For the 
year to 31 December 2014, Autologic reported an EBITDA of GBP5.4 million 
on sales of GBP19.7 million, with relatively stronger sales in the UK 
and Europe compared with the USA. In May 2015, a new business model was 
launched to generate recurring revenues and improve the quality of the 
company's earnings from a new product, Assist Plus, and associated 
Assist Plus service. This change in strategy towards a pure recurring 
revenue model has resulted in certain exceptional costs being incurred 
impacting EBITDA which fell to, GBP4.0 million on revenues of GBP18.5 
million for the year to 31 December 2015, in line with expectations. At 
31 March 2016, the company had cash balances of over GBP6.0 million. 
Management are transitioning the existing customer base onto the new 
support service platform and growing sales of the new product and 
service to both new and existing customers. Depending on the number of 
existing customers transitioning onto the new product and service and 
along with the level of new customer sales, this change in strategy will 
also impact EBITDA in 2016 but is expected to increase shareholder value 
over the longer term. Initial signs are promising, with largely positive 
feedback from customers. 
 
   Biofortuna, established in 2008, is a molecular diagnostics business 
based in the North West, which has developed unique expertise in the 
manufacture of freeze dried, stabilised DNA tests. Biofortuna develops 
and sells both its own proprietary tests as well as a comprehensive 
range of contract manufacturing services. A GBP1.3 million round to 
finance capital expenditure and working capital was completed in August 
2013, in which the Company invested GBP198,000 in the first tranche and 
a further GBP102,000 in the second, final tranche in April 2014. For the 
year to March 2015, a substantially reduced operating loss of GBP528,000 
was incurred on higher sales of GBP1.1 million (2014: an operating loss 
of GBP1.1 million on sales of GBP325,000). Trading in the year to 31 
March 2016 was well ahead of budget and the previous year, with an 
improved, reduced EBITDA loss, the profitable Contract Manufacturing 
division helping to offset investment in the proprietary products being 
developed by the Molecular Diagnostics division. 
 
   To finance the development of new products, a GBP1.6 million round was 
concluded in January 2015, of which GBP890,000 was committed by the 
Foresight VCTs. The Company committed to invest GBP429,000, of which 
GBP256,000 was invested as the first tranche. With a lower than planned 
cash outflow, the second, final tranche is now expected to be drawn down 
during late 2016. 
 
   In July 2012, the Company invested GBP1.0 million in Northampton based 
Blackstar Amplification Holdings alongside GBP2.5 million from Foresight 
VCT to finance a management buy-out and provide growth capital. 
Blackstar was founded in 2004 by four senior members of the new product 
development team at Marshall Amplification to design and manufacture a 
range of innovative guitar amplifiers. Following commercial launch in 
2007, sales grew rapidly, reflecting new product launches, entry into 
new markets, and a global brand was soon established. In the year to 30 
April 2015, the company achieved an EBITDA of GBP537,000 on sales of 
GBP8.6 million (2014: GBP323,000 EBITDA on sales of GBP8.6 million). 
Trading in the current year to 30 April 2016 resulted in an increased 
EBITDA on slightly lower sales, reflecting increased margins and the 
full impact of cost reductions made in 2014. The budget for future 
contracts for the current year shows further growth in profits and 
higher sales. Blackstar continues to be the number two guitar amplifier 
brand by units sold in the UK and USA. Management are focused on 
increasing sales, albeit in a price sensitive market, while improving 
margins, as well as selectively replacing distributors where 
appropriate. 
 
   In the first eleven months or 1 May 2015 to 31 March 2016 of the 
financial year ending 30 April 2016, the company recorded sales of 
GBP6.9 million and an EBITDA of GBP407,000. On a like-for-like basis, 
sales were slightly behind of the prior year and EBITDA was flat. The 
decline in sales is primarily a direct result of SJE, one of the 
Company's key Korean based suppliers, effectively entering 
administration. While the Company has dual and tri-source supplier 
arrangements in place, SJE's failure led to short term supply chain 
disruption. Looking ahead, the company is forecasting sales of GBP9.5 
million and EBITDA of GBP900,000 for the financial year commencing 1 May 
2016. Encouraging progress continues to be made into the consumer 
products market. 
 
   The company currently has a presence in over 35 countries worldwide and 
its products are stocked in over 2,500 stores globally, including 
Maplins and Argos stores in the UK. New product development remains a 
key focus. A new division, Dist-X, has been established to leverage 
Blackstar's UK distribution capabilities by distributing other, 
non-competition Music Instrument brands. 
 
   Building on the success of its GBP48.0 million, 10MW Birmingham Bio 
Power Limited project ("BBPL") with Carbonarius (a 50:50 joint venture 
with Plymouth-based Una Group), O-Gen UK has become the UK's leading 
independent developer of Advanced Conversion Technology waste to energy 
projects. In March 2015, O-Gen UK and Una Group combined their two teams 
into a new company, CoGen Limited, to further develop their substantial, 
combined pipeline of projects. In order to accelerate growth and provide 
additional working capital, a new investor subscribed GBP750,000 for 
equity in CoGen, alongside a loan of GBP500,000 from Una Group. Funds 
managed by Foresight hold 22.13% of CoGen's equity, including Foresight 
VCT (3.53%), Foresight 3 VCT (7.73%), Foresight 4 VCT (8.55%) and the 
Foresight UK Sustainable EIS fund (2.32%). O-Gen UK remains the 
shareholder in BBPL. 
 
   In March 2015, CoGen reached financial close on a GBP53.0 million, 10MWe 
waste wood to energy plant in Welland, Northamptonshire, using the same 
technology and partners as BBPL. This latest project was funded with 
investment from Balfour Beatty plc, Equitix and Noy (an Israeli 
investment fund), with CoGen earning development fees on the transaction 
while retaining a 12.5% shareholding in the project. Also in March, 
CoGen completed the acquisition of the entire O-Gen Plymtrek site in 
Plymouth, originally developed by Carbonarius and MITIE plc, on which an 
GBP8.0 million 4.5MW waste to energy plant is planned to be built 
utilising much of the footprint of the existing plant. The funding for 
this transaction was provided by Aurium Capital 
 
   Markets, with CoGen owning 50% of the acquisition vehicle and Aurium 50% 
but with a prior ranking return on the latter's invested capital. 
 
   In October 2015, CoGen reached financial close on a GBP97.0 million, 
21.5MW project in Ince Park, Merseyside to be fuelled with circa 160,000 
tonnes per annum of recycled wood fibre. All of the funding was provided 
by the Bioenergy Infrastructure Group ("BIG", of which Foresight Group 
is a co-sponsor) through a combination of shareholder loan and shares 
which receive a preferential return. 
 
   Cogen is developing its pipeline of projects and funding relationships, 
with active support from Foresight and BIG. The market has become more 
uncertain with the Government's changes in renewables policy, in 
particular uncertainty relating to future CfD auctions. Cogen's primary 
deal pipeline comprises four projects in Northern England and it plans 
to bid in the CfD auction due at the end of 2016, with the aim of 
closing projects, if successful in that auction, during 2017. BIG is 
expected to jointly fund this process, requiring a total of GBP5.0 
million of investment. 
 
 
 
 
                                             Year of financial 
Project Name           Project Size (GBPm)         close          Shareholding 
Birmingham Bio Power 
 Limited                                48                  2013         20.0% 
Plymouth                                20                  2015         50.0% 
Welland                                 53                  2015         12.5% 
Ince Park                               97                  2015         20.0% 
 
 
   It is unlikely that full value will be secured for Foresight VCT's 
stakes in Cogen and O-Gen UK until the portfolio of plants is fully 
operational. However, Foresight will keep this situation under review. 
 
   In February 2014, the O-Gen Acme Trek facility in Stoke-on-Trent was 
granted planning permission for an enlarged 8MW waste wood to energy 
plant. It was not possible, however, to finance and redevelop the site 
as a project qualifying for ROCs in time for the ROC deadline. In March 
2016 the Company's interest in O-Gen Acme Trek was sold to Blackmead 
Infrastructure Limited, a subsidiary of Foresight's Inheritance Tax 
Solution, at book value for an initial cash consideration and a deferred 
consideration element. 
 
   Derby-based Datapath Group is a world leading innovator in the field of 
computer graphics and video-wall display technology utilised in a number 
of international markets. The company is increasing its market share in 
control rooms, betting shops and signage and entering other new markets 
such as medical. For the year to 31 March 2015, an operating profit of 
GBP6.8 million was achieved on sales of GBP19.3 million, with the North 
American division trading ahead of budget (2014: record operating 
profits of GBP7.4 million on sales of GBP18.7 million). In November 
2015, Datapath paid dividends of GBP6.3 million, comprising GBP2.1 
million to the Company and the same amount to Foresight 2 VCT and 
Foresight 3 VCT. This was met principally from the company's own cash 
resources and short term loans which are expected to be repaid from 
internally generated cash flow over the next year. For the year to March 
2016, the company made an operating profit of GBP5.9 million on sales of 
GBP19.9 million. 
 
   In September 2015, as part of a GBP3.9 million round alongside other 
Foresight VCTs, the Company invested GBP1.4 million in FFX Group Limited 
to support the continuing growth of this Folkestone based multi- channel 
distributor of power tools, hand tools, fixings and other building 
products. Since launching its ecommerce channel in 2011, FFX has grown 
rapidly supplying a wide range of tools to builders and tradesmen 
nationally. For the year to 31 March 2015, the company achieved an 
EBITDA of GBP1.3 million on sales of GBP23.0 million. The management 
team has been strengthened by the appointment of two new Joint Managing 
Directors and a new Chairman, each with experience of successfully 
developing similar businesses. The relocation into a nearby, much larger 
warehouse at Lympne in early 2016 was completed successfully. 
 
   In May 2012, the Company invested GBP693,000 in Flowrite Refrigeration 
Holdings alongside other Foresight VCTs to finance the GBP3.2 million 
management buy-out of Kent-based Flowrite Services Limited. Flowrite 
Refrigeration Holdings provides refrigeration and air conditioning 
maintenance and related services nationally, principally to leisure and 
commercial businesses such as hotels, clubs, pubs and restaurants. In 
the year to 31 October 2014, the company traded well, achieving an 
operating profit of GBP740,000 on sales of GBP10.8 million after 
substantial investment in new engineers and systems. 
 
   In July 2015, the company completed another recapitalisation, returning 
GBP156,000 of accrued interest to the Foresight VCTs, including 
GBP78,000 to the Company, taking total cash returned on this investment 
to 85% of cost. For the 14 months to 31 December 2015, the company 
achieved a disappointing operating profit of GBP404,000 on sales of 
GBP12.8 million, reflecting difficulties arising from installing a new 
workflow IT system to improve operational efficiency and optimise 
profitability. To drive the business forward, steps were taken in August 
2015 to broaden the management team through the appointment of a new 
Chairman and a new Finance Director. 
 
   In September 2015, as part of a GBP4.5 million round alongside other 
Foresight VCTs, the Company invested GBP1.2 million in Hospital Services 
Limited (HSL) to support its continuing growth. Based in Belfast and 
Dublin, HSL distributes, installs and maintains high quality healthcare 
equipment supplied by global partners such as Hologic, Fujifilm and 
Shimadzu, as well as supplying related consumables. HSL has particular 
expertise in the radiology, ophthalmic, endoscopy and surgical sectors. 
For the year to 31 March 2015, the company achieved EBITDA of GBP1.7 
million on revenues of GBP7.2 million. A new, experienced Non-Executive 
Chairman and a Commercial Director have been appointed to the Board. 
 
   In September 2015, as part of a GBP4.0 million round, alongside other 
Foresight VCTs, the Company invested GBP1.0 million in Itad Limited, a 
long established consulting firm which monitors and evaluates the impact 
of international development and aid programmes, largely in developing 
countries. Customers include the UK Government's Department for 
International Development, other European governments, philanthropic 
foundations, charities and international NGOs. For the year to 31 
January 2015, Itad achieved an EBITDA of 
 
   GBP1.5 million on revenues of GBP8.8 million with significant future 
growth forecast. A number of significant contracts have been won 
recently and, as most contracts are long term, this provides good 
revenue visibility for the current and future years. 
 
   Ixaris Systems has developed and operates Entropay, a web-based global 
prepaid payment service using the VISA network. Ixaris also offers its 
IxSol product on a 'Platform as a Service' basis to enable enterprises 
to develop their own customised global applications for payments over 
various payment networks. During 2013, the company invested in 
developing and marketing its Ixaris Payment System, the platform that 
runs IxSol, to financial institutions. The platform enables financial 
institutions to offer payment services to customers based on prepaid 
cards. This division continues to make good progress. The first 
deployment went live in late 2015, the second in early 2016 and a third 
expected shortly. Ixaris was awarded an EU grant of EUR2.5 million, of 
which EUR1.6 million will be received over three years, to help fund the 
existing platform technology roadmap, which highlights the innovative 
nature of the Payment System. 
 
   For part of the year to 31 December 2015, the company operated at around 
EBITDA and cash flow break even while continuing to invest further in 
Ixsol and Ixaris Payment System. For the full year to 31 December 2015, 
reflecting strong trading and continuing investment in software and 
systems, an EBITDA loss of GBP501,000 was incurred on sales of GBP10.8 
million, ahead of budget (2014: EBITDA loss of 
 
   GBP622,000 on sales of GBP9.5 million). 
 
   In December 2014, the Company invested GBP500,000 alongside other 
Foresight VCTs in a GBP2.0 million round to finance a shareholder 
recapitalisation of Positive Response Communications. Established in 
1997, the company monitors the safety of people and property from its 24 
hour monitoring centre in Dumfries, Scotland. Customers include several 
major restaurant and retail chains. For the year ended 31 March 2015, an 
EBITDA of GBP637,000 was achieved on sales of GBP2.0 million. In the 
financial year to 31 March 2016, sales grew modestly with reduced EBITDA 
profits, reflecting investment in improving efficiency and systems and 
recruitment of more sales staff. The management team has been 
strengthened with the appointment of three experienced executives as 
Chairman, CEO and Finance Director respectively. 
 
   In April 2013, the Company invested GBP650,000 alongside other Foresight 
VCTs in a GBP1.8 million round to finance a management buy- out of 
Procam Television Holdings. Procam is one of the UK's leading broadcast 
hire companies, supplying equipment and crews for UK location TV 
production to broadcasters, production companies and other businesses 
for over 20 years. Headquartered in Acton, London, with additional 
facilities in Manchester, Edinburgh and Glasgow, Procam is a preferred 
supplier to BSkyB and an approved supplier to the BBC and ITV. Revenues 
and profits have grown strongly, following the introduction of new 
camera formats, acquisitions in both the UK and USA and increased sales 
and marketing efforts. 
 
   In December 2014, Procam acquired True Lens Services, based in Leicester, 
which specialises in the repair, refurbishment and supply of camera 
lenses with further support from the Foresight VCTs. In March 2015, in 
order to service the requirements of many of its existing UK customers 
and enter the large US market, Procam acquired HotCam New York City 
which provides camera, audio and lighting rental for TV production, plus 
crew and related production services. These two acquisitions were 
supported by a further investment of GBP1.3 million from the Foresight 
VCTs, of which the Company invested GBP451,385. Other acquisition 
opportunities are under active consideration. 
 
   In February 2016, ProCam acquired the trading assets of the film 
division of Take 2 Films which provides digital and film camera 
equipment for Film and TV. This was funded by bank debt and asset 
finance facilities. 
 
   For the year to 31 December 2014, the company achieved an EBITDA of 
GBP2.3 million on revenues of GBP8.1 million, ahead of the prior year, 
reflecting organic growth and the integration of the Hammerhead 
acquisition. Trading in the year to 31 December 2015 was strong with an 
EBITDA of GBP3.3 million being achieved on sales of GBP11.5 million, 
reflecting both organic growth, driven principally by the strong 
performance of the London office, and impact of the acquisitions. 
 
   In July 2015, as part of a GBP4.0 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in Coventry-based 
Protean Software. Protean develops and sells business management and 
field service management software, together with related support and 
maintenance services, to organisations involved in the supply, 
installation and maintenance of equipment, across a number of sectors 
including facilities management, HVAC and elevator  installation. 
Protean's software suite offers both desktop and mobile variants used on 
engineers' Android devices. A new CEO and an experienced Chairman were 
appointed at completion and a new Financial Controller recruited 
subsequently. For the year to 31 March 2015, EBITDA of 
 
   GBP900,000 was achieved on sales of GBP3.0 million. Trading in the year 
to 31 March 2016 was ahead of the previous year while profits were in 
line with the previous year, reflecting increased investment. 
 
   In April 2015, Foresight funds invested GBP2.6 million in shares and 
loan notes in Specac International ("Specac") to finance a management 
buy-out of Specac Limited from Smiths Group plc. The Company invested 
GBP650,000, alongside GBP1.3 million from Foresight VCT and 
 
   GBP650,000 from Foresight 3 VCT, together acquiring a majority equity 
shareholding with the management team holding the remaining equity. 
Based in Orpington, Kent, Specac is a long established, leading 
scientific instrumentation accessories business, manufacturing high 
specification sample analysis and sample preparation equipment used for 
a broad range of applications in testing, research and quality control 
laboratories and other end markets Worldwide. The company's products are 
primarily focused on supporting IR Spectroscopy, an important analytical 
technique widely used in research and commercial/ industrial 
laboratories. 
 
   For the year to 31 July 2015, the company achieved EBITDA of GBP906,000 
on sales of GBP6.9 million. Trading in the current year has exceeded 
expectations with profit growth ahead of forecast, reflecting greater 
focus on sales and costs. The company has accelerated new product 
development and successfully launched new products. A non- executive 
Chairman has also been appointed with a strong sales and marketing 
background in the scientific instrumentation market who will complement 
the existing management team and assist in developing the business. 
 
   TFC Europe, a leading distributor of technical fasteners in the UK and 
Germany, performed satisfactorily during the year to 31 March 2015, 
achieving an operating profit of GBP2.8 million on sales of GBP20.3 
million (2014: operating profit of GBP2.8 million on sales of GBP19.5 
million). Trading in the year to 31 March 2016, however, was appreciably 
weaker than budgeted due to a general downturn in the UK manufacturing 
sector, particularly the Oil and Gas sector. 
 
   In July 2015, the company effected a successful recapitalisation, as a 
result of which GBP2.4 million was received by the Foresight VCTs, 
repaying all their outstanding loans, together with accrued interest and 
a redemption premium. The overall Foresight shareholding increased from 
53.6% to 66.7%. The Company received GBP710,000 and increased its 
shareholding from 17.87% to 22.23%. A number of senior management 
changes and promotions were made to facilitate the planned retirement of 
the Chairman, helping the CEO to drive strategic growth projects, 
particularly in Germany and to focus on new customer targets within the 
aerospace sector. In April 2015, two senior managers were promoted to 
Sales Director and Commercial Director roles. A Group Operations Manager 
has been appointed to drive cost efficiencies and introduce best 
operational practice across the Group. A new, experienced Chairman 
joined the Board in January 2016 and is evaluating TFC's sales strategy 
and industry focus. 
 
   The Bunker Secure Hosting, which operates two ultra-secure data centres, 
continues to generate substantial profits at the EBITDA level. For the 
year to 31 December 2015, an EBITDA of GBP2.2 million was achieved on 
sales of GBP9.6 million (2014: EBITDA of GBP2.2 million on sales of 
GBP9.1 million). Recurring annual revenues presently exceed GBP9.3 
million while cash balances remain healthy. On 31 March 2015, The Bunker 
repaid all its shareholder loans and outstanding interest totalling 
GBP6.5 million, financed through a GBP5.7 million secured medium term 
bank loan plus GBP1.0 million from its own cash resources. In total, 
GBP5.1 million was repaid to the Foresight VCTs, comprising GBP3.0 
million of loan principal and GBP2.1 million of interest. The Company 
received GBP2.0 million, comprising GBP1.5 million of loan principal and 
GBP503,000 of interest. The company has now commenced a trial with a 
large distributor which serves many value added resellers. A new, 
experienced Sales Manager has been recruited to lead channel sales. A 
number of acquisitions have been reviewed with a view to increasing the 
scale of operations. 
 
   In September 2015, as part of a GBP3.3 million round alongside other 
Foresight VCTs, the Company invested GBP1.0 million in The Business 
Advisory Limited. This company provides a range of advice and support 
services to UK-based small businesses seeking to gain access to 
Government tax incentives, largely on a contingent success fee basis. 
With a large number of small customers signed up under medium term 
contracts, the company enjoys a high level of recurring income and good 
visibility on future revenues. 
 
   For the year to 30 September 2015, the Company achieved a net profit 
before tax of GBP1.4 million on sales of GBP4.2 million, well ahead of 
the prior year. Management has been strengthened by the appointment of a 
new COO in January 2016 and a new experienced, non-executive Chairman. 
 
   In August 2013, the Company invested GBP1.0 million alongside Foresight 
VCT in a GBP2.5 million shareholder recapitalisation of Stockport based 
Thermotech Solutions (formerly Fire and Air Services). Thermotech is a 
hard facilities management provider with two divisions, Mechanical 
Services and Fire Protection, which designs, installs and services air 
conditioning and fire sprinkler systems for retail, commercial and 
residential properties through a national network of engineers. The 
company focusses primarily on the retail sector and enjoys long term 
customer relationships and multi-year preferred supplier contracts with 
various blue chip high street retailers, giving good revenue visibility. 
Since investment, good progress has been made in diversifying and 
rebalancing the spread of revenues, with greater emphasis on service and 
maintenance. For the year to 31 March 2015, an EBITDA of GBP1.1 million 
was achieved on sales of GBP7.8 million, some 40% ahead of the previous 
year (2014: an EBITDA of GBP714,000 on sales of GBP5.6 million), 
reflecting significant contract wins and resultant strong cash 
generation. 
 
   For the year to 31 March 2016, both the Fire Protection and Mechanical 
Services divisions experienced good performances. However, the 
Mechanical Services first quarter was lower than expected due to delays 
on three projects. EBITDA for the year was slightly behind last year as 
a consequence but the project pipeline for the current year is 
encouraging. 
 
   Good progress has been made in further developing the business, 
including revamping the brand, optimising the website, introducing 
telesales and strengthening various functions. A new non-executive 
Chairman has been appointed, bringing extensive experience from the 
facilities management and business services sectors. Terms have been 
agreed on an attractively priced acquisition and a large proportion of 
the consideration will be paid on a deferred basis. Bank funding is 
currently being sought to finance the acquisition. 
 
   Trilogy Communications continues to face a difficult trading environment, 
with both broadcast market and defence revenues weaker than twelve 
months ago. Despite strong trading results up to 2012 reflecting large 
defence contract orders from partners such as Northrop Grumman and 
Raytheon, the company's trading has since been badly affected by delays 
in long-term US defence programme orders. For the year to February 2015, 
an EBITDA loss of GBP509,000 was incurred on sales of GBP3.9 million. 
For the year to February 2016, revenues of GBP2.9 million were incurred 
on a normalised EBITDA loss of GBP537k reflecting a fall in defense 
revenues. 
 
   The departure of the CEO, who was already under review by Foresight, has 
not adversely impacted the business, but has facilitated the appointment 
of a new Sales Director. Between them they have secured the first of 
five expected $900k orders, to be placed throughout calendar 2016. If 
received this would underpin a profitable result for FY 2017. Additional 
orders from Lockheed Martin and Northrop Grumman indicate a strong 
defence pipeline, with the Company being confident that a total of 
GBP4.8m of defence orders will be placed during the current financial 
year. 
 
   A provision of GBP60,000 was made against the cost of the investment 
during the period reflecting, poor results. 
 
   Reflecting continued difficult trading conditions and reducing sales of 
its fire and emergency simulation software, Vector Command, an 
investment inherited from the acquisition of Advent VCT in August 2004, 
was placed into administration in May 2016, with no prospect of any 
recoveries. A full provision of GBP302,000 was accordingly made against 
this investment. 
 
   Russell Healey 
 
   Head of Private Equity 
 
   Foresight Group 
 
   29 July 2016 
 
   The Disclosure and Transparency Rules ("DTR") of the UK Listing 
Authority require certain disclosures in relation to the annual 
financial report, as follows: 
 
   Principal risks, risk management and regulatory environment 
 
   The Board believes that the principal risks faced by the Company are: 
 
 
   -- Economic risk - events such as an economic recession and movement in 
      interest rates could affect smaller companies' performance and 
      valuations. The Company mitigates this risk by investing in a diversified 
      portfolio of companies across a variety of sectors which provides 
      protection against such events. 
 
   -- Loss of approval as a Venture Capital Trust - the Company must comply 
      with Section 274 of the Income Tax Act 2007 which allows it to be 
      exempted from corporation tax on investment gains. Any breach of these 
      rules may lead to: the Company losing its approval as a VCT; qualifying 
      shareholders who have not held their shares for the designated holding 
      period having to repay the income tax relief they obtained; and future 
      dividends paid by the Company becoming subject to tax in the hands of 
      investors. The Company would also lose its exemption from corporation tax 
      on capital gains. To mitigate this risk the company employs specialists 
      lawyers to monitor and advise on matters that may impact qualifying 
      status. 
 
   -- Investment and strategic - inappropriate strategy, poor asset allocation 
      or consistently weak stock selection leading to under performance and 
      poor returns to shareholders. To mitigate this risk the Company ensures 
      its directors have the appropriate qualities and experience to make 
      decisions that maximise shareholder benefit. 
 
   -- Regulatory - the Company is required to comply with the Companies Acts 
      2006, the rules of the UK Listing Authority and United Kingdom Accounting 
      Standards. Breach of any of these might lead to suspension of the 
      Company's Stock Exchange listing, financial penalties or a qualified 
      audit report. To mitigate this risk the company ensures the staff of the 
      Investment Manager have the appropriate knowledge and experience to 
      prevent breaches of any required standards and where appropriate will 
      seek professional advice on regulatory matters concerning the company. 
 
   -- Reputational - inadequate or failed controls might result in breaches of 
      regulations or loss of shareholder trust. To mitigate this risk the 
      Company maintains a transparent relationship with its shareholders and 
      regularly solicits their views. 
 
   -- Operational - failure of the Manager's or Company Secretary's accounting 
      systems or disruption to its business leading to an inability to provide 
      accurate reporting and monitoring. To mitigate this risk the Company has 
      a business continuity plan in place and regularly reviews all third party 
      service providers to ensure they have similar plans and procedures in 
      place. 
 
   -- Financial - inadequate controls might lead to misappropriation or loss of 
      assets. Inappropriate accounting policies might lead to misreporting or 
      breaches of regulations. Additional financial risks, including interest 
      rate, credit, market price and currency, are detailed later in this 
      note. 
 
   -- Market risk - investment in AIM traded, ISDX Growth Market traded and 
      unquoted companies by its nature involves a higher degree of risk than 
      investment in companies traded on the main market. In particular, smaller 
      companies often have limited product lines, markets or financial 
      resources and may be dependent for their management on a small number of 
      key individuals. In addition, the market for stock in smaller companies 
      is often less liquid than that for stock in larger companies, bringing 
      with it potential difficulties in acquiring, valuing and disposing of 
      such stock. 
 
   -- Liquidity risk - the Company's investments, both unquoted and quoted, may 
      be difficult to realise. Furthermore, the fact that a share is traded on 
      AIM or ISDX Growth Markets does not guarantee that it can be realised. 
      The spread between the buying and selling price of such shares may not 
      reflect the price that any realisation is actually made. 
 
 
   The Board regularly reviews the principal risks and uncertainties facing 
the Company which the Board and the Manager have identified and the 
Board sets out delegated controls designed to manage those risks and 
uncertainties. Key risks within investment strategy are managed by the 
Board through a defined investment policy, with guidelines and 
restrictions, and by the process of oversight at each Board meeting. 
Operational disruption, accounting and legal risks are also covered at 
least annually and regulatory compliance is reviewed at each Board 
meeting. The Directors have adopted a robust framework of internal 
controls which is designed to monitor the principal risks and 
uncertainties facing the Company and provide a monitoring system to 
enable the Directors to mitigate these risks as far as possible. Details 
of the Company's internal controls are contained in the Corporate 
Governance and Internal Control sections. 
 
   The Company's financial instruments comprise: 
 
 
   -- Equity shares, debt securities and fixed interest securities that are 
      held in accordance with the Company's investment objective as set out in 
      the Directors' Report. 
 
   -- Cash, liquid resources, short-term debtors, creditors and derivatives 
      that arise directly from the Company's operations. 
 
 
 
 
 
   Audited Income Statement 
 
   for the year ended 31 March 2016 
 
 
 
 
                              Year ended                  Year ended 
                             31 March 2016               31 March 2015 
                      Revenue  Capital    Total    Revenue  Capital   Total 
                      GBP'000  GBP'000   GBP'000   GBP'000  GBP'000  GBP'000 
 
Investment holding 
 gains                      -     3,931     3,931        -    9,322    9,322 
Realised losses on 
 investments                -  (10,434)  (10,434)        -  (1,701)  (1,701) 
Income                  2,570         -     2,570    1,147        -    1,147 
Investment 
 management fees        (279)     (839)   (1,118)    (265)    (794)  (1,059) 
Transaction costs           -         -         -     (11)        -     (11) 
Other expenses          (499)         -     (499)    (426)        -    (426) 
 
Return/(loss) on 
 ordinary activities 
 before taxation        1,792   (7,342)   (5,550)      445    6,827    7,272 
 
Taxation                    -         -         -     (61)       61        - 
 
Return/(loss) on 
 ordinary activities 
 after taxation         1,792   (7,342)   (5,550)      384    6,888    7,272 
 
Return per share: 
Ordinary Share           3.1p   (12.7)p    (9.6)p     0.4p   (3.2)p   (2.8)p 
 
C Share                   n/a       n/a       n/a     1.3p    43.5p    44.8p 
 
 
   The total column of this statement is the profit and loss account of the 
Company and the revenue and capital columns represent supplementary 
information. 
 
   All revenue and capital items in the above Income Statement are derived 
from continuing operations. No operations were acquired or discontinued 
in the year. 
 
   The Company has no recognised gains or losses other than those shown 
above, therefore no separate statement of total recognised gains and 
losses has been presented. 
 
 
 
   Audited Reconciliation of Movements in Shareholders' Funds 
 
 
 
 
                           Called-up   Share     Capital     Profit 
                             share    premium   redemption  and loss 
                            capital   account    reserve     account    Total 
Year ended 31 March 2016 
 Company                    GBP'000   GBP'000    GBP'000     GBP'000   GBP'000 
As at 1 April 2015               570     4,847         261     47,165   51,469 
Share issues in the year           8       347           -          -      355 
Expenses in relation to 
 previous share issues**           -      (47)           -          -     (47) 
Repurchase of shares             (4)         -           4      (266)    (266) 
Dividends                          -         -           -    (6,970)  (6,970) 
Loss for the year                  -         -           -    (5,550)  (5,550) 
As at 31 March 2016              574     5,147         265  34,379***   40,365 
 
 
 
 
                           Called-up 
                             share    Share premium account  Capital redemption reserve  Profit and loss account 
Restated                    capital         (restated)               (restated)                 (restated)         Total 
Year ended 31 March 2015 
 Company                    GBP'000          GBP'000                  GBP'000                    GBP'000          GBP'000 
As at 1 April 2014               573                 4,918*                        258*                  40,056*   45,805 
Expenses in relation to 
 previous years share 
 issues**                          -                   (71)                           -                        -     (71) 
Repurchase of shares             (3)                      -                           3                    (163)    (163) 
Return for the year                -                      -                           -                    7,272    7,272 
As at 31 March 2015              570                  4,847                         261                47,165***   52,843 
 
 
   * Refer to note 10 
 
   **Trail commission payable to financial advisors in the year. 
 
   *** Of this amount GBP20,949,000 (2015: GBP37,665,000) is realised and 
distributable. 
 
 
 
   Audited Balance Sheet 
 
   at 31 March 2016 
 
 
 
 
                                             Registered Number: 03506579 
                                                             Restated 
                                               As at           As at 
                                           31 March 2016   31 March 2015 
                                              GBP'000         GBP'000 
 
Fixed assets 
Investments held at fair value through 
 profit or loss                                    37,738         38,223 
 
Current assets 
Debtors                                               959            736 
Money market securities and other 
 deposits                                           1,773          4,400 
Cash                                                   62          9,632 
                                                    2,794         14,768 
 
Creditors 
Amounts falling due within one year                 (167)          (148) 
 
Net current assets                                  2,627         14,620 
Net assets                                         40,365         52,843 
 
Capital and reserves 
Called-up share capital                               574            570 
Share premium account                               5,147         4,847* 
Capital redemption reserve                            265           261* 
Profit and loss account                            34,379        47,165* 
 
 
Equity shareholders' funds                         40,365         52,843 
 
 
Net asset value per share: 
Ordinary Share                                      70.4p          83.9p 
 
C Share                                               n/a         110.8p 
 
 
 
   *Refer to Note 10 
 
 
 
   Audited Cash Flow Statement 
 
   for the year ended 31 March 2016 
 
 
 
 
                                                      Year ended   Year ended 
                                                       31 March     31 March 
                                                         2016         2015 
                                                        GBP'000      GBP'000 
Cash flow from operating activities 
Investment income received                                    563        1,000 
Dividends received from investments                         2,117          150 
Deposit and similar interest received                          24            4 
Investment management fees paid                           (1,118)      (1,059) 
Secretarial fees paid                                       (157)        (117) 
Other cash payments                                         (379)        (260) 
 
Net cash inflow/(outflow) from operating activities 
 and returns on investment                                  1,050        (282) 
 
Returns on investment and servicing of finance 
Purchase of unquoted investments                          (7,256)      (1,766) 
Net proceeds on sale of investments                           717       13,742 
Net proceeds on deferred consideration                          7           87 
Net proceeds on liquidation of investments                     58            - 
Net capital (outflow)/inflow from financial 
 investment                                               (6,474)       12,063 
 
Equity dividends paid                                     (6,970)            - 
 
Management of liquid resources 
Movement in money market funds                              2,627      (3,763) 
                                                            2,627      (3,763) 
Financing 
Proceeds of fund raising                                      355            - 
Expenses of fund raising for previous years                  (47)         (71) 
Repurchase of own shares                                    (111)        (163) 
                                                              197        (234) 
Net (outflow)flow/inflow of cash for the year             (9,570)        7,784 
 
Reconciliation of net cash flow to movement in net 
 funds 
(Decrease)/increase in cash for the year                  (9,570)        7,784 
Net cash at start of year                                   9,632        1,848 
Net cash at end of year                                        62        9,632 
 
 
 
 
 
Analysis of changes in net 
debt 
                              At 1 April 2015  Cash flow  At 31 March 2016 
                                  GBP'000       GBP'000            GBP'000 
 
Cash and cash equivalents               9,632    (9,570)                62 
 
 
   Notes to the accounts 
 
   1. These are not statutory accounts in accordance with S436 of the 
Companies Act 2006. The full audited accounts for the year ended 31 
March 2016, which were unmodified and did not contain any statements 
under S498(2) of Companies Act 2006 or S498(3) of Companies Act 2006, 
will be lodged with the Registrar of Companies. Statutory accounts for 
the year ended 31 March 2016 including an unmodified audit report and 
containing no statements under the Companies Act 2006 will be delivered 
to the Registrar of Companies in due course. 
 
   2. The disclosures in this announcement have been prepared on the basis 
of accounting policies set out in the statutory accounts of the Company 
for the year ended 31 March 2016. All investments held by the Company 
are classified as 'fair value through the profit and loss'. Unquoted 
investments have been valued in accordance with IPEVC guidelines. Quoted 
investments are stated at bid prices in accordance with the IPEVC 
guidelines and Generally Accepted Accounting Practice. 
 
 
 
 
 
   3. Copies of the Annual Report will be sent to shareholders and will be 
available for inspection at the Registered Office of the Company at The 
Shard, 32 London Bridge Street, London, SE1 9SG and can be accessed on 
the following website: www.foresightgroup.eu 
 
 
 
 
 
   4. 
   Net asset value per share 
 
 
 
   Net asset value per Ordinary Share is based on net assets at the year 
end of GBP40,364,641 (2015: GBP32,139,000) and on 57,375,499 (2015: 
38,284,414) Ordinary Shares, being the number of Ordinary Shares in 
issue at that date. 
 
 
 
 
 
   5.    Return per share 
 
 
 
 
                                                         Year ended          Year ended 
                                                        31 March 2016       31 March 2015 
                                                          Ordinary      Ordinary 
                                                           Shares        Shares     C Shares 
                                                          GBP'000       GBP'000     GBP'000 
 
Total return/(loss) after taxation                            (5,550)     (1,091)       8,363 
Total return/(loss) per share (note a)                         (9.6)p      (2.8)p       44.8p 
 
Revenue return/(loss) from ordinary activities after 
 taxation                                                       1,792         149         235 
Revenue return/(loss) per share (note b)                         3.1p        0.4p        1.3p 
 
Capital return/(loss) from ordinary activities after 
 taxation                                                     (7,343)     (1,240)       8,128 
Capital return/(loss) per share (note c)                      (12.7)p      (3.2)p       43.5p 
 
Weighted average number of shares in issue in the 
 period*                                                   57,567,321  38,445,770  18,680,907 
 
 
   * The weighted average number of shares has been adjusted to take 
account of the O and C Share fund merger on 10 August 2015. 
 
   Notes: 
 
   a) Total return/(loss) per share is total return after taxation divided 
by the weighted average number of shares in issue during the year. 
 
   b) Revenue return/(loss) per share is revenue return after taxation 
divided by the weighted average number of shares in issue during the 
year. 
 
   c) Capital return/(loss) per share is capital return after taxation 
divided by the weighted average number of shares in issue during the 
year. 
 
 
 
 
   6.    Annual General Meeting 
 
   The Company's Annual General Meeting will take place on 30 September 
2016 at 1.00pm at the offices of Shakespeare Martineau LLP in London. 
Details can be found on page 62 of the Annual Report and Accounts. 
 
   Prior to the formal business of the Annual General Meeting, Foresight 
Group, the investment Manager and two investee companies will give 
presentations between 12.00pm and 1.00pm. 
 
   7.    Income 
 
 
 
 
                                      Year ended 
                                     31 March 2016  Year ended 31 March 2015 
                                       GBP'000              GBP'000 
 
Loan stock interest                            428                       993 
Dividends receivable                         2,117                       150 
Overseas based Open Ended 
 Investment Companies ("OEICS")                 24                         4 
Bank deposits                                    1                         - 
                                             2,570                     1,147 
 
 
   8.    Investments held at fair value through profit or loss 
 
   2016 
 
   2015 
 
   GBP'000 
 
   GBP'000 
 
   Quoted investments 
 
   282 
 
   289 
 
   Unquoted investments 
 
   37,456 
 
   37,934 
 
   37,738 
 
   38,223 
 
   Company 
 
 
 
 
 
 
                                    Quoted   Unquoted   Total 
                                    GBP'000  GBP'000   GBP'000 
Book cost as at 1 April 2015            847    31,311    32,158 
Investment holding (losses)/gains     (558)     6,623     6,065 
Valuation at 1 April 2015               289    37,934    38,223 
 
Movements in the year: 
Purchases at cost*                        -     7,416     7,416 
Disposal proceeds ***                   (7)     (875)     (882) 
Realised losses****                    (13)  (10,414)  (10,427) 
Investment holding gains **              13     3,395     3,408 
Valuation at 31 March 2016              282    37,456    37,738 
 
Book cost at 31 March 2016              827    27,438    28,265 
Investment holding (losses)/gains     (545)    10,018     9,473 
Valuation at 31 March 2016              282    37,456    37,738 
 
 
   Ordinary Shares Fund 
 
 
 
 
 
 
                                                   Quoted   Unquoted   Total 
                                                   GBP'000  GBP'000   GBP'000 
Book cost as at 1 April 2015                           847    24,474    25,321 
Investment holding (losses)/gains                    (558)     4,709     4,151 
Valuation at 1 April 2015                              289    29,183    29,472 
 
Movements in the year: 
Purchases at cost*                                       -     6,016     6,016 
Disposal proceeds ***                                  (7)     (875)     (882) 
Realised losses****                                   (13)  (10,414)  (10,427) 
Investment holding gains **                             13     4,308     4,321 
Transfer of C Shares fund - book cost                    -     8,237     8,237 
Transfer of C Shares fund - investment holding 
 gains                                                   -     1,001     1,001 
Valuation at 31 March 2016                             282    37,456    37,738 
 
Book cost at 31 March 2016                             827    27,438    28,265 
Investment holding (losses)/gains                    (545)    10,018     9,473 
Valuation at 31 March 2016                             282    37,456    37,738 
 
 
   C Shares Fund 
 
 
 
 
 
 
                                                        Quoted   Unquoted   Total 
                                                        GBP'000  GBP'000   GBP'000 
Book cost as at 1 April 2015                                  -     6,837    6,837 
Investment holding gains                                      -     1,914    1,914 
Valuation at 1 April 2015                                     -     8,751    8,751 
 
Movements in the year: 
Purchases at cost                                             -     1,400    1,400 
Investment holding losses                                     -     (913)    (913) 
Transfer to Ordinary Shares fund - book cost                  -   (8,237)  (8,237) 
Transfer to Ordinary Shares fund - investment holding 
 gains                                                        -   (1,001)  (1,001) 
Valuation at 31 March 2016                                    -         -        - 
 
Book cost at 30 September 2015                                -         -        - 
Investment holding gains                                      -         -        - 
Valuation at 31 March 2016                                    -         -        - 
 
 
   * Capitalised interest of GBP160,000 was recognised by the Ordinary 
Shares fund in the year and is included within purchases at cost. 
 
   ** Investment holding gains in the income statement includes GBP516,000 
of deferred consideration recognised in the year by the Ordinary Shares 
fund and GBP7,000 that was received and transferred from investment 
holding gains in the period. 
 
   *** Disposal proceeds includes GBP107,000 not within the cashflow 
statement as this amount is within debtors. 
 
   **** Realised losses in the income statement includes GBP7,000 that was 
received and transferred from investment holding gains in the period. 
 
   9.    Transactions with the manager 
 
   Foresight Group, which acts as investment manager to the Company in 
respect of its investments earned fees of GBP1,118,000 during the year 
(2015: GBP1,059,000). 
 
   Foresight Fund Managers Limited, Company Secretary, received fees of 
GBP157,000 (2015: GBP157,000) during the year. The annual secretarial 
fee (which is payable together with any applicable VAT) is adjusted 
annually in line with the UK Retail Prices Index. 
 
   At the balance sheet date there was GBP1,000 due from (2015: GBP20,000 
due to) Foresight Group and GBPNil (2015: GBP40,000) due to Foresight 
Fund Managers Limited. No amounts have been written off in the year in 
respect of debts due to or from related parties. 
 
   10.    Restatement of capital and reserves 
 
   On 28 November 2012, GBP30,963,251 of share premium, and GBP1,750,587 of 
capital redemption reserve were cancelled by order of the High Court. 
However, the balances were not moved to the profit and loss account at 
31 March 2013. The share premium, capital redemption reserve and profit 
and loss account have been restated to adjust for this. There is no 
impact on the profit and loss account or the net asset value of the 
Company in this or any earlier period. The impact of this is shown in 
the table below: 
 
 
 
 
                31 March 2015   31 March 2015    1 April 2014    1 April 2014 
                 (as reported)   (as restated)   (as reported)   (as restated) 
                    GBP'000         GBP'000         GBP'000         GBP'000 
 
Share premium 
 account                35,810           4,847          35,881           4,918 
Capital 
 redemption 
 reserve                 2,012             261           2,009             258 
Profit and 
 loss account           14,451          47,165           7,342          40,056 
 
 
 
   END 
 
   This announcement is distributed by NASDAQ OMX Corporate Solutions on 
behalf of NASDAQ OMX Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Foresight 4 VCT PLC via Globenewswire 
 
   HUG#2032046 
 
 
  http://www.foresightgroup.eu/ 
 

(END) Dow Jones Newswires

July 29, 2016 11:22 ET (15:22 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.

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