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Foresight 3 VCT PLC : Annual Financial Report(dpa-AFX International Compact Via Acquire Media NewsEdge) FORESIGHT 3 VCT PLC 2014 Highlights * Net asset value per Ordinary Share at 31 March 2014 was 74.2p (31 March 2013: 75.2p). * An interim dividend for the year ended 31 March 2014 of 2.0p per Ordinary Share was paid on 28 March 2014 based on an ex-dividend date of 12 March 2014 and a record date of 14 March 2014. * Follow-on funding totalling £1.03 million was provided to six portfolio companies and £3.75 million for five new investments, £3 million of which was in acquisition vehicles preparing to trade at the year end. * The Ordinary Shares fund realised £4.7 million from nine portfolio companies. * During the year, 429,636 Ordinary Shares were allotted for gross proceeds of £339,833. Chairman's Statement Strategic Report This is the first time that my annual Statement has been produced under the recently introduced UK 'narrative reporting' framework. This includes a requirement to provide a separate Strategic Report with certain prescribed content in accordance with regulations made under the provisions of the Companies Act 2006. This now brings together various governance disclosures and related matters and you will find it immediately following this statement. Some of the information previously contained in my statement will therefore be found elsewhere in the Report and Accounts. Performance During the year, our private equity investments benefited from the recent economic upturn both in the UK and traditional export markets and their performance outweighed the poor performance of the environmental investments such that, after taking into account the payment of a dividend of 2.0p per share on 28 March 2014, the overall net asset value of the fund at 31 March 2014 increased by 1.3% to 74.2p per share from 75.2p per Ordinary Share at 31 March 2013. It has been another difficult year for our environmental investments, although the portfolio's exposure is limited to just three remaining investments, namely Closed Loop Recycling, O-Gen Acme Trek and O-Gen UK. When our Manager, Foresight Group, started to focus on investments in environmental infrastructure in 2007 it appeared that there would be attractive opportunities to develop substantial new businesses particularly through the application of technologies used elsewhere in the world. It was envisaged that these businesses would benefit from growing regulation and awareness of the need to find ways to reduce the environmental impact of human economic activity and facilitate sustainable development. However as I said in my statement with the half year accounts, it has proved very difficult with the capital available to create viable businesses in the power generation and materials recycling sectors in which the Company has invested. This has been partly because the technology needed more development effort than any of those originally involved had anticipated and partly because following the severe problems in the banking sector the additional loan finance needed to set up full scale facilities was not forthcoming. For a detailed review of the Company's investments I would refer you to the Manager's Report that starts on page 11. Dividends An interim dividend of 2.0p per Ordinary Share for the year ended 31 March 2014 was paid on 28 March 2014. The shares were quoted ex dividend on 12 March 2014 and the record date for payment was 14 March 2014. 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. However distributions will inevitably be dependent on cash being generated from portfolio investments and successful realisations. Top-up Share Issues and Share Buy-Backs The Company launched an Ordinary Share top-up offer on 3 December 2012 and 429,636 Ordinary Shares were allotted during the year ended 31 March 2014, based on prices ranging from 75.2p to 78.3p per Ordinary Share. These allotments raised gross proceeds of £339,833. During the period under review 675,000 Ordinary Shares were repurchased for cancellation at a cost of £429,000. Alternative Investment Fund Management Registration The Board has considered the impact on the Company of an EU directive regulating Alternative Investment Fund Managers (AIFM) which applies to most UK investment funds including the Company. To minimise the regulatory and financial cost of compliance as a 'full scope UK AIFM', with this legislation the Board has decided that the Company will register directly with the Financial Conduct Authority as permitted by the rules as a 'small registered UK AIFM'. The application process, which must be completed by July 2014, has been completed. This will not affect the current arrangements with the Manager which will continue to report to the Board and manage the Company's investments on a discretionary basis. Management Fees During the year, the Board and Foresight Group agreed that investment management fees would be reduced by 0.25% to 2.25% per annum, for an initial period of 5 years. The effective date for the reduction in management fees was 1 October 2013. Valuation Policy Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines (December 2012) developed by the British Venture Capital Association and other organisations. Through these guidelines, investments are valued as defined at 'fair value'. Ordinarily, unquoted investments will be valued at cost for a limited period following the date of acquisition, being the most suitable approximation of fair value unless there is an impairment or significant accretion in value during the period. Quoted investments and investments traded on AIM and ISDX Growth Market are valued at the bid price as at 31 March 2014. The portfolio valuations are prepared by Foresight Group, reviewed and approved by the Board quarterly and subject to review by the auditors annually. Annual General Meeting The Company's Annual General Meeting will take place on 16 September 2014 at 1pm. I look forward to welcoming you to the Meeting, which will be held at the offices of Foresight Group in London. Details can be found on page 60. Outlook It is encouraging that the UK economy is continuing to recover and we believe that this should help the development of the businesses in which we have invested. A number of the investments in the fund are well managed and are well placed to continue their successful expansion. However many of the familiar risks, both financial and political, remain and there can be no grounds for complacency as all operate in competitive environments. The fund is, on the back of recent realisations, considering new investment opportunities and several potential investments are currently going through the selection process. Additionally, the Manager continues to concentrate on improving the performance of the existing portfolio and continues to look for appropriate opportunities to realise gains from the disposal of successful investments. Following the successful realisation of Alaric, the Board was pleased to resume the payment of dividends to Shareholders and future dividends to Shareholders remain a priority. This in turn should improve the liquidity of the Ordinary Shares and reduce the discount to net asset value, which continues at a higher level than the Board still feels is justified by the prospects of the underlying investments. Graham Ross Russell Chairman 24 July 2014 Strategic Report IntroductionThis Strategic Report, on pages 5 to 10, has been prepared in accordance with the requirements of Section 414 of the Companies Act 2006 and best practice. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with Section 172 of the Companies Act 2006. Foresight 3 VCT plc Foresight Group was appointed manager of Advent VCT plc on 30 July 2004 and the fund was renamed Foresight 3 VCT plc. Foresight Group was appointed manager of Noble VCT plc (formerly Enterprise VCT plc) on 1 April 2008 and the Company temporarily reverted to its former name of Enterprise VCT plc. On 10 September 2008 Foresight 3 VCT plc acquired the assets and liabilities of Enterprise VCT plc and the Company was partially merged into Foresight 3 VCT plc as a separate C Share class. On 24 July 2009 the Foresight 3 VCT plc Ordinary and C Shares were merged together to create new Ordinary shares. The number of Ordinary Shares in issue at 31 March 2014 was 51,226,401. Investment Policy The Manager (Foresight Group) will target UK unquoted companies which depend to a significant extent on the application of scientific and technological skills or knowledge as a major source of competitive advantage. A proportion of realised gains will normally be retained for re-investment and to meet future costs. Subject to this, the Company will endeavour to maintain a flow of dividend payments. Investment Objectives The investment objective of the Company is to provide private investors with attractive returns from a portfolio of investments in fast-growing unquoted companies in the United Kingdom. It is the intention to maximise tax free income available to investors from a combination of dividends and interest received on investments and distribution of capital gains arising from trade sales or flotations. Performance and key performance indicators (KPIs) The Board expects the Manager to deliver a performance which meets the objectives of the fund. The KPIs covering these objectives are net asset value performance and dividends paid, which, when combined, give net asset value total return. Additional key performance indicators reviewed by the Board include the discount of the share price relative to the net asset value and total expenses as a proportion of shareholders' funds. A record of some of these indicators is contained on the following page. The on- going charges ratio in the period was 2.7%. Share buy-backs, (excluding enhanced buybacks), have been completed at discounts ranging from 11.9% to 32.2%. The level of these KPIs are then compared with the wider VCT marketplace, based on independent published information, for reasonableness. A review of the Company's performance during the financial period, the position of the Company at the period end and the outlook for the coming year is contained within the Manager's Report. The Board assesses the performance of the Manager in meeting the Company's objective against the primary KPIs highlighted. Clearly, some investments in unquoted companies at an early stage of their development are likely to disappoint, but investing the funds raised in high growth companies with the potential to become market leaders creates an opportunity for enhanced returns to shareholders. The growth of some of these companies is, however, largely dependent on the continuing level of expenditure on relevant products and services by larger corporations. Performance over 1, 3 and 5 years 31 March 2014 31 March 2013 31 March 2011 31 March 2009 Ordinary Ordinary Ordinary Ordinary Shares Shares Shares Shares------------------------------------------------------------------------------- Net asset value per share 74.2p 75.2p 95.8p 91.2p Cumulative Dividends Paid per Share since year ended - 2.0p 4.5p 14.5p------------------------------------------------------------------------------- Net asset value total return at 31 March 2014 - 76.2p 78.7p 88.7p plus cumulative dividends paid ------------------------------------------------------------------------------- Performance (%) NAV Total Return - 1.3% (17.8%) (2.7%) ------------------------------------------------------------------------------- Ordinary Ordinary Ordinary Ordinary Shares Shares Shares Shares------------------------------------------------------------------------------- Share price 62.5p 65.5p 87.5p 78.0p ------------------------------------------------------------------------------- Share price total return at 31 March 2014 plus cumulative dividends paid - 64.5p 67.0p 77.0p ------------------------------------------------------------------------------- Performance (%) Share Price Total Return - (1.5%) (23.4%) (1.3%) ------------------------------------------------------------------------------- Ordinary Shares ------------------------------------------------------------------------------ Share price discount to NAV at 31 March 2014 stood at: 15.7% Shares bought back during the year under review: 675,000 Decrease in net asset value during year: 1.3% Ongoing charges ratio: 2.7% ------------------------------------------------------------------------------ Strategies for achieving objectives Investment Policy The Investment Manager (Foresight Group) will target UK unquoted companies which depend to a significant extent on the application of scientific and technological skills or knowledge as a major source of competitive advantage. A proportion of realised gains will normally be retained for re-investment and to meet future costs. Subject to this, the Company will endeavour to maintain a flow of dividend payments. Investment securities The Company invests in a range of securities including, but not limited to, ordinary and preference shares, loan stock, convertible securities, and fixed- interest securities as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stock, while AIM investments are primarily held in ordinary shares. Pending investment in unquoted and AIM listed securities, cash is primarily held in interest bearing money market open ended investment companies (OEICs). UK companies Investments are primarily made in companies which are based in the UK, although many will trade overseas. The companies in which investments are made must have no more than £15 million of gross assets at the time of investment (or £7 million depending on when the funds being invested were raised) to be classed as a VCT qualifying holding. Asset mix The Company aims to be invested significantly in growth businesses subject always to the quality of investment opportunities and the timing of realisations. Any uninvested funds are held in cash, interest bearing securities and a range of non-qualifying investments. It is intended that the significant majority of any funds raised by the Company will be invested in VCT qualifying investments. Risk diversification and maximum exposures Risk is spread by investing in a number of different businesses within different industry sectors using a mixture of securities. The maximum amount invested in any one company is generally limited to £1 million in a fiscal year (or, if lower, 15% of the portfolio at the time of investment) and generally no more than £2.5 million over time (at cost) is invested in the same company (or, if lower, 15% of the portfolio at the time of investment). The value of an individual investment is expected to increase over time as a result of trading progress and a continuous assessment is made of its suitability for sale. Investment style Investments are selected in the expectation that the application of private equity disciplines, including an active management style for unquoted companies through the appointment of an Investor Director to investee company boards, will enhance value. Borrowing powers The Company's Articles of Association permit gearing to give a degree of investment flexibility. The Board's current policy is not to use gearing. Co-investment The Company aims to invest in larger, more mature, unquoted and AiM companies and, in order to achieve this, often invest alongside the other Foresight funds. Consequently, at the time of initial investment, the combined investment can currently total up to a maximum of £5.0 million per annum for unquoted and for AIM investees. VCT regulation The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HM Revenue & Customs. Amongst other conditions, the Company may not invest more than 15% of its investments (by VCT value at the time of the investment) in a single company and must have at least 70% by value of its investments throughout the period in shares or securities in qualifying holdings, of which 30% by VCT value (70% for funds raised after 5 April 2011) in aggregate must be in ordinary shares which carry no preferential rights (although only 10% of any individual investment needs to be in the ordinary shares of that company). Management The Board has engaged Foresight Group as discretionary investment manager. Foresight Group also provides or procures the provision of company secretarial, administration and custodian services to the Company. Foresight Group prefers to take a lead role in the companies in which it invests. Larger investments may be syndicated with other investing institutions or strategic partners with similar investment criteria. In considering a prospective investment in a company, particular regard will be paid to: · Evidence of high-margin products or services capable of addressing fast- growing markets; · The company's ability to sustain a competitive advantage; · The strength of the management team; · The existence of proprietary technology; and · The company's prospects of being sold or achieving a flotation within three to five years. A review of the investment portfolio and of market conditions during the period is included within the Investment Manager's Report. Environmental, Human Rights, Employee, Social and Community Issues The Board recognises the requirement under Section 414 of the Act to provide information about environmental matters (including the impact of the Company's business on the environment), employee, human rights, social and community issues; including information about any policies it has in relation to these matters and effectiveness of these policies. As the Company has no employees or policies in these matters this requirement does not apply. Gender diversity The Board comprises three male Directors, however, the Board is conscious of the need for diversity and will consider both male and female candidates when appointing new Directors. The Manager has an equal opportunities policy and currently employs 46 men and 23 women. Dividend policy A proportion of realised gains will normally be retained for reinvestment and to meet future costs. Subject to this, the Company will endeavour to maintain a flow of dividend payments. It is the intention to maximise the Company's tax- free income available to investors from a combination of dividends and interest received on investments and the distribution of capital gains arising from trade sales or flotations. Purchase of own shares It is the Company's policy, subject to adequate cash availability, to consider repurchasing shares when they become available in order to help provide liquidity to the market in the Company's shares. Principal risks, risk management and regulatory environment The Board believes that the principal risks faced by the Company are: · Economic risk · Loss of approval as a Venture Capital Trust · Investment and strategic · Regulatory · Reputational · Operational · Financial · Market risk · Liquidity risk Further detail on these principal risks is given in note 15 on page 51. 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 framework of internal controls which is designed to monitor the principal risks and uncertainties facing the Company and to 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. Performance-related incentives Foresight Group is entitled to receive performance incentive fees representing 15% of dividends paid to shareholders, providing certain performance conditions are achieved. The performance-related incentive fee is payable to Foresight Group if the total return (comprising net asset value plus dividends paid) exceeds 100 pence per Share, both before and immediately after the performance-related incentive fee is paid. After each distribution is made to shareholders, the total return required to be achieved to trigger a performance-related incentive fee will be amended to take account of the cumulative dividends (net of the performance incentive fee payments made to Foresight Group) paid. The performance incentive fee may be satisfied by either a cash payment or the issue of Shares in the same class as the distribution being made (or by a combination of both) at the Board's discretion. Any new Shares to be issued to Foresight Group would be calculated by dividing the amount to be satisfied by the issue of the Shares by the latest net asset value per share. No performance-related incentives were earned during the year (2013: nil). Valuation Policy Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines (December 2012) developed by the British Venture Capital Association and other organisations. Through these guidelines, investments are valued as defined at 'fair value'. Ordinarily, unquoted investments will be valued at cost for a limited period following the date of acquisition, being the most suitable approximation of fair value unless there is an impairment or significant accretion in value during the period. Quoted investments and investments traded on AiM and ISDX Growth Market are valued at the bid price as at 31 March 2014. The portfolio valuations are prepared by Foresight Group, reviewed and approved by the Board quarterly and subject to review by the auditors annually. VCT Tax Benefit for Shareholders To obtain VCT tax reliefs on subscriptions up to £200,000 per annum, a VCT investor must be a 'qualifying' individual over the age of 18 with UK taxable income. The tax reliefs for subscriptions since 6 April 2006 are: · Income tax relief of 30% on subscription for new shares, which is forfeit by shareholders if the shares are not held for more than five years; · VCT dividends (including capital distributions of realised gains on investments) are not subject to income tax in the hands of qualifying holders; · Capital gains on disposal of VCT shares are tax-free, whenever the disposal occurs. Venture Capital Trust Status Foresight 3 VCT plc has been granted approval as a Venture Capital Trust (VCT) under S274-S280A of the Income Tax Act 2007 for the year ended 31 March 2013. The next complete review will be carried out for the year ended 31 March 2014. It is intended that the business of the Company be carried on so as to maintain its VCT status. The Directors have managed, and continue to manage, the business in order to comply with the legislation applicable to VCTs. In addition, the Board has appointed SGH Martineau LLP as taxation adviser to the Company to provide further independent assurance of compliance with venture capital tax legislation and to provide guidance on changes in taxation legislation affecting Foresight 3 VCT plc. As at 31 March 2014 the Company had 73.6% of its funds in such VCT qualifying holdings. Future Strategy The Board and the Manager believe that the strategy of focusing on traditional private equity investments is in the best interests of Ordinary Shareholders and the historical information reproduced in this report is evidence of positive recent performance in this area. The Company's performance relative to its peer group and benchmarks will depend on the Manager's ability to allocate the Company's assets effectively, and manage its liquidity appropriately. Graham Ross Russell Chairman 24 July 2014 Manager's Report When compared with the start of the year under review, economic sentiment has improved substantially in the UK. The economic climate and business confidence have improved more quickly than expected a year ago, as demonstrated by the continuing strength of the Stock Market, the volume of new issues and high level of mergers and acquisition activity. These conditions look set to continue for the present, although significant macroeconomic risks and uncertainties remain, particularly in major overseas markets. The good performance of the private equity portfolio during the year to 31 March 2014 was held back by certain environmental investments. The net asset value per Ordinary Share increased by 1.3% (after adjusting for the interim dividend of 2.0p per Ordinary Share paid on 28 March 2014), to 74.2p from 75.2p per Ordinary Share as at 31 March 2013. Several investments performed strongly, notably Aerospace Tooling Corporation, Datapath Group Holdings and TFC Europe, all of which achieved record sales and profits and together generated an increase in valuation of £3.7 million. The investment in Alaric Systems was sold to NCR Corporation in December 2013, with £3.17 million being received at completion with a further £589,390 held in escrow (to be released in tranches over the next four years), generating a return of over 5 times original cost of investment. Provisions totalling £3.4 million were made against four investments during the year including a provision of £2,002,057 against the cost of the investment in 2K Manufacturing which was placed into administration in November 2013 following the termination of sale and merger discussions. Foresight Group is encouraged by the recent performances of several private equity investments and the prospects for the portfolio overall. Management are focused on achieving realisations from the existing investments which should result in further increases in net asset value, facilitate shareholder distributions and provide additional funding for new investments. A review of the portfolio is set out below. Review 1. Follow-on funding (including capitalised interest) Company £ ----------------------------------------------- 2K Manufacturing 500,000 Autologic Diagnostics Group* 101,555 Biofortuna 99,066 Flowrite Refrigeration Holdings* 6,617 Ixaris Systems 219,852 The Bunker Secure Hosting 104,161----------------------------------------------- Total 1,031,251 ----------------------------------------------- *Capitalised interest 2. New Investments Company £ ------------------------------------------ Aerospace Tooling Corporation 500,000 Procam Television Holdings 250,000 ------------------------------------------ Total 750,000 ------------------------------------------ Investments of £1,000,000 were made into each of Cole Henry PE 2 Limited, Kingsclere PE 3 Limited and Whitchurch PE 1 Limited, which are acquisition vehicles preparing to trade. 3. Exits & Realisations As mentioned above, Alaric Systems was sold to NCR Corporation realising £3.17 million at completion with a further £589,390 held in escrow (to be released in tranches over the next four years). Following the successful sale of the seven pub estate, the investment in Convivial London Pubs was realised, with £520,635 received in March 2014. The investment in AIM listed Corero Network Security was sold during the year, realising proceeds of £74,298, as was the investment in AIM listed Probability, realising proceeds of £313,529. In February 2014, the investment in Ario (formerly Provesica), a drug development company, was sold for £872. In May 2014, after the year end, the investment in Xention Pharma, a related drug development company, was sold for £10,422. £140,186 was received from Alaric Systems during the year, comprising loan repayments (£35,047) and redemption premia (£105,139). In May 2013, Orthoview Holdings (formerly Meridian Technique) effected a capital reorganisation, following which £283,304 of accrued preference share dividends was received along with £43,900 of loan stock repayments of capital. A further £157,255 was similarly received in October 2013. The £233,250 6% Unsecured Loan notes in AIM listed Zoo Digital Group was sold for £177,813. Flowrite Refrigeration repaid loans of £127,709. A loan repayment totalling £2,242 was also received from Global Immersion in the year. 4. Material Provisions Company £------------------------------------------------ 2K Manufacturing Limited 2,002,057 Closed Loop Recycling Limited 644,459 Evance Wind Turbines Limited 626,973 Sindicatum Carbon Capital Limited 114,825 ------------------------------------------------ Total 3,388,314 ------------------------------------------------ During the year to 31 March 2014, several investments performed strongly, notably Aerospace Tooling Corporation, Datapath Group Holdings and TFC Europe, all of which achieved record sales and profits and together generated an increase in valuation of £3.7 million. The Bunker Secure Hosting, which provides ultra secure managed hosting services from two data centres, continued to generate record sales and profits at the EBITDA level. Other investments, such as Flowrite Refrigeration Holdings, Ixaris Systems and Procam Television Holdings also performed well. The investment in Alaric Systems was sold to NCR Corporation in December 2013, with £3.17 million being received at completion with a further £589,390 held in escrow (to be released in tranches over the next four years), generating a return of over 5 times original cost of investment. During the year, other realisations totalling over £1.1 million were achieved. During the year, four follow on investments were made totalling £923,079: 2K Manufacturing (£500,000), Biofortuna (£99,066), Ixaris Systems (£219,852) and The Bunker Secure Hosting (£104,161). Ixaris Systems, which provides a range of pre-paid electronic payment services integrated with the VISA network, continued to invest in developing and marketing its Ixaris Payment System to financial institutions. In January 2014, the Company invested a further £219,852 as part of a £2 million equity funding round to finance further investment in the Payment System. New Investments Two new investments totalling £750,000 were made in Aerospace Tooling Corporation and Procam Television Holdings. In June 2013, £500,000 was invested alongside other Foresight VCTs in a shareholder recapitalisation of Dundee based Aerospace Tooling Corporation. This company is a well established specialist engineering business providing repair, refurbishment and remanufacturing services to large international companies for components in high specification aerospace and turbine engines. A number of recent orders have underpinned growth and profitability for the current financial year. In April 2013, £250,000 was invested alongside other Foresight VCTs in a management buy-out of Battersea based Procam Television Holdings. Procam is a leading broadcast hire companies, supplying equipment and crews for location TV production. In September 2013, Procam acquired one of its competitors, Hammerhead, with facilities in London, Manchester, Edinburgh and Glasgow. This strategic acquisition will broaden the customer base and provide national coverage and also give synergistic and profitability benefits. Evance Wind Turbines, which designed and manufactured small wind turbines, was adversely affected by the reductions in the applicable Feed-in-Tariff which started in October 2012. Despite substantial cost cuts and efforts to diversify the Company's activities, significant monthly losses continued to be incurred. As a consequence, administrators were appointed and a provision of £626,973 was made against the cost of this investment. In February 2013, Closed Loop Recycling raised loans totalling £12.8 million which enabled production capacity to be doubled to meet demand from customers under long term supply contracts. The new sorting and production equipment has been commissioned and increased production utilising this additional capacity commenced in November 2013. The ramp up to full production has, however, been slower than expected and forecast profitability reduced and a provision of £644,459 has been made against the cost of the investment. As explained below, 2K Manufacturing experienced difficulties in raising capital to expand its production facilities. Following the failure of protracted sale and merger discussions, an administrator was appointed in November 2013. A full provision of £2,002,057 has been made against the cost of this investment. Where provisions have been made against the value of underlying investments, we have also provided against the income due from such investments. Outlook Foresight Group believes that the improvement in business confidence is now being reflected in the trading of a number of companies across the portfolio and considers that the portfolio is now well positioned for further growth. The Group is seeing a number of high quality private equity investment opportunities but the Company has finite cash resources at present with which to make such new investments. Foresight Group is endeavouring to realise existing investments, where appropriate, to generate cash for shareholder distributions and further funds for such new investments. Portfolio Review In June 2013, the Company invested £500,000 alongside other Foresight VCTs in a £3.5 million shareholder recapitalisation of Dundee based Aerospace Tooling Corporation, a well established specialist engineering company providing repair, refurbishment and remanufacturing services to large international companies for components in high-specification aerospace and turbine engines. The company was founded in 2007 by the former CEO, John Seaton, who, following the transaction, has assumed the role of Executive Chairman. John Green, formerly General Manager of the Dundee facility, became Operations Director, alongside a newly appointed Finance Director and Business Development Director. With a heavy focus on quality assurance, the company enjoys strong relationships with companies serving the aerospace, military, marine and industrial markets. A number of recent orders have underpinned growth, profitability and cash generation in the current financial year such that turnover is now expected to double and profits to increase significantly, supporting an increase in valuation of £420,000 during the year. Alaric Systems, which develops and sells credit and debit card authorisation and card anti fraud software to major financial institutions and retailers worldwide, achieved an audited PBIT of £1.3 million on sales of £9.8 million for the year to 31 March 2013. Having won several significant orders during 2013 and with a number of large contracts in prospect, an exit process was initiated which resulted in a sale of the company to NCR Corporation for £51.6 million in December 2013. The Company received £3.17 million at completion with a further £589,390 held in escrow (to be released in tranches over the next four years), generating a return of over 5 times original cost of investment. £140,186 was received from Alaric Systems during the year, comprising loan repayments (£35,047) and redemption premia (£105,139). AtFutsal Group runs government approved education programmes for students aged 16-18 years old in conjunction with a consortium made up of Football League clubs, colleges and academies and training/accreditation organisations. Funding for these programmes is sourced from the Education Funding Agency. Depending on the geographical location of the main partner football clubs, the three arenas that the company runs in Birmingham, Leeds and Swindon are used as part of the education programmes. AtFutsal is introducing a wider range of government approved BTech courses and has developed its own education software platform so that it can provide a range of educational services. AtFutsal Group has also developed a separate English Colleges education programme to provide additional futsal related courses for 16-18 year olds at sixth form colleges. For the current student year which commenced in September 2013, the company registered some 1,200 students on its futsal related courses, nearly double the number of students in the previous academic year. AtFutal Group is also improving its capacity utilisation across its three arenas with a variety of different sports being regularly played at each arena alongside futsal at both child and adult level. New activities and sports are planned across the arenas over the coming 3-6 months. This improved utilisation has enabled the arenas to reach cash breakeven. The company is now generating operating profits, with the strongly growing Education division generating the majority of the profit and cash flow within the Group. Following the £48 million secondary buy-out by ISIS Private Equity in January 2012, investments in equity and loan stock were retained in Autologic Diagnostics Group. Autologic Diagnostics Group continues to generate strong profits and for the year to December 2013 achieved an EBITDA of £5.4 million on sales of £18.6 million (an EBITDA of £5.9 million on revenues of £17.2 million in 2012). The company traded well in the first quarter and as at 31 March 2014, had a healthy cash balance of £4.5 million. In recent months, Autologic Diagnostics Group has further strengthened its management team, including recruiting a new Sales Director, to focus on the UK and European markets. The American market continues to perform well. Management continues to develop a business model to generate recurring revenues through a new service-oriented product, with the aim of launching this in Q4 2014. During the year, interest of £101,555 deferred under the terms of the loan agreement with Autologic Diagnostics Group was capitalised. Biofortuna, a molecular diagnostics business based in the Wirral, has developed unique expertise in the important area of enzyme stabilisation, effectively hi- tech freeze drying. Its first range of products, SSPGo, is a series of genetic compatibility tests for organ transplant recipients, although the breadth of application of the technology is extremely wide. Because of the company's stabilisation and freeze drying technology, its products can be transported easily (in the post if needed) and stored at room temperature for up to two years. A £1.3 million round to finance capital expenditure and working capital was completed in August 2013, in which the Company invested £99,066. The company is progressing in a number of areas, including broadening its product range, increasing manufacturing capacity and improving internal processes. Following successful FDA trials, Biofortuna has now obtained FDA approval for its SSPGo genetic testing product range in the USA, a particularly important milestone enabling access to the American market, the largest in the World, as well as obtaining FDA registration for its manufacturing site. The freeze-dried kit manufacturing service shows promise, with paid for feasibility studies and contract discussions occurring with a number of parties. In February 2013, Closed Loop Recycling concluded a major new supply contract and new customer contracts worth £17 million per annum as well as securing £12.8 million of loan finance (of which £6 million was provided by the Foresight Environmental Fund) to double capacity at the Dagenham plant. The new sorting and production equipment has now been commissioned and increased production utilising this additional capacity commenced in November 2013. Output of rHDPE has continued to increase although this ramp up in production has taken several months longer to achieve than expected. Higher market prices for feed stock have put margins under pressure reducing forecast profitability. Additional loan capital of £1.0m was agreed with the Foresight Environmental Fund in May 2014 to provide the necessary capital to achieve the forecast production run rate. Reflecting the above factors, a provision of £644,459 has been made against the cost of the investment. Management is examining a number of avenues to improve profitability further. Following a formal sales process in H2 2013, the Board of Convivial London Pubs successfully completed the sale of the seventh and final pub in the estate in December 2013, raising total proceeds ahead of expectations. The Company received £520,635 in March 2014, a small uplift on valuation. The investment in AIM listed Corero Network Security was sold during the year, realising proceeds of £74,298. 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 and signage and is entering other new markets. Management accounts for the year to 31 March 2014 show record profits and sales (for the year ended 31 March 2013, a record operating profit of £5.1 million was achieved on sales of £14.1 million), supporting an increase in valuation of £2.5 million during the year. The company is continuing to enjoy strong demand from its main OEM partners and distributors. The company has acquired its US distributor and has opened an office in Philadelphia to develop more US sales and distributorships. Evance Wind Turbines, which manufactured 5kW tree sized (up to 50 feet) wind turbines, enjoyed strong sales growth during 2012, driven primarily by the introduction of the UK Feed-in-Tariff regime. Sales and profits grew well in the year to 31 March 2013, the company delivering its fifteen hundredth machine and achieving an operating profit of £354,000 on sales of £8.6 million. Trading was, however, adversely affected by the reductions in the applicable Feed-in-Tariff which started in October 2012. Despite substantial cost cuts and efforts to diversify the Company's activities, significant monthly losses continued to be incurred. As a consequence, administrators were appointed in April 2014. The reductions in the Feed-in- Tariff were essentially the principal factor in the Company going from a position of profitability to administration in less than two years. A provision of £626,973 has been made against the cost of this investment after taking into account the expected recovery proceeds. In May 2012, £200,000 was invested in Flowrite Refrigeration Holdings alongside other Foresight VCTs to finance the £3.2 million management buyout of Kent based Flowrite Services Limited, which provides refrigeration and air conditioning maintenance services nationally, principally to leisure and commercial businesses such as hotels, clubs, pubs and restaurants. Management has accelerated sales efforts, won a number of significant new contracts and customers and also reviewed several potential acquisitions with the aim of broadening its national coverage. In the year to 31 October 2013, reflecting a particularly busy summer, the company traded well, achieving an operating profit of £1.06 million on sales of £10.0 million (cf. an operating profit of £852,000 on sales of £7.9 million in 2012) and also repaid loans of £127,709, representing some 75% of original cost of investment, after only 18 months from the MBO. During the year, interest of £6,617 deferred under the terms of the loan agreement was capitalised. Ixaris Systems has developed and operates Entropay, a web based global prepaid payment service using the VISA network, and offers its new IxSol (formerly known as Opn) product on a 'Platform as a Service' basis to enable enterprises to develop their own customised global applications for payments over various payment networks. IxSol continues to demonstrate potential with a number of deployments in progress and a growing sales pipeline. IxSol is being used by companies in the affiliate marketing and travel sectors and sales efforts are now also focussing on the international e-commerce and financial services sectors. 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 based on prepaid cards to their customers. The company has made good progress on building a sales pipeline. In the year to 31 December 2013, an EBITDA loss of £617k was incurred on sales of £9.5 million, reflecting the above mentioned investment in software and systems (cf. an EBITDA loss of £293,000 on sales of £8.4 million in the previous year). The management team has been strengthened by the appointments of a new Chief Operating Officer, Marketing Director and Sales Director. In January 2014, the Company invested a further £219,852 as part of a £2 million equity funding round to finance further investment in the Payment System. In order to focus on its technology division, Mplsystems (formerly The Message Pad) sold its call centre outsourcing division in June 2013. The sale proceeds will be used to further develop the technology division, which offers contact centre and customer service software on a SaaS (Software as a Service) basis to improve the efficiency of its customers' call centres and customers' experience. For the year to 30 June 2013, a small operating profit of £85,000 was achieved on sales of £5.86 million. Following the above disposal, the transition to a SaaS business model is going well although the company is incurring small losses. The sales pipeline remains strong and, as a result of new contracts, the level of contracted recurring SaaS revenues is growing. The company has been accredited within the G Cloud framework enabling it to provide contact centre services over the Cloud to all government departments and the wider public sector. In February 2014, O-Gen Acme Trek received planning permission for the proposed rebuild of the plant in Stoke as a 7MW waste wood to energy power plant. Management is currently working with the selected technology provider and a major EPC contractor to develop the project to the next stage, with a view to reaching financial close later this year and thereafter commence construction. Discussions are being held with potential funders to raise the required £35 million to finance the project. O-Gen UK is a leading developer of waste wood gasification facilities in the UK and in December 2013 reached financial close on a £46 million, 10.5MW, waste wood to energy power plant project in Birmingham. Construction of the plant is progressing on schedule. The company has established a number of partnerships which have led to the development of a growing pipeline of similar opportunities, including three forecast to close during 2014 (including O-Gen Acme Trek's Stoke plant referred to above). The company continues to develop relationships with a number of technology providers and major EPC contractors. O-Gen UK will not finance the construction of these plants but will benefit from project management fees, equity shareholdings and fuel and operation and maintenance contracts. Orthoview Holdings (formerly Meridian Technique), which develops and supplies surgery planning software to hospitals and surgeries principally in the UK and USA, completed a capital reorganisation in May 2013, following which £283,304 of accrued preference share dividends was received along with £43,900 by way of Ordinary Share and loan stock repayments of capital. Having achieved an EBITDA of £0.6 million on sales of £3.0 million for the year to 31 March 2013, the company is continuing to enjoy good trading and is highly cash generative. New partnerships have been established in Asia, further enhancing prospects. In October 2013, £157,255 was received from the company, comprising repayment of loan principal (£150,794) and interest (£6,461). In April 2014, after the year end, a further £153,954 was received, comprising repayment of loan principal (£150,794) and interest (£3,160). The investment in AiM listed Probability plc, comprising 535,000 ordinary shares, was sold during the year, realising proceeds of £313,529. In April 2013, the Company invested £250,000 alongside other Foresight VCTs in a £1.8 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 Battersea, 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. Over the last four years revenues have doubled, following the introduction of new camera formats. In September 2013, Hammerhead, a competitor with facilities in London, Manchester and Edinburgh and Glasgow, was acquired in order to broaden the customer base and national coverage and realise various synergistic benefits. The Hammerhead acquisition is expected to improve profits substantially. Preliminary results for the year to 31 December 2013 show an EBITDA of £2.0 million on sales of £6.4 million, well ahead of trading in 2012. Procam plans to open a further facility and launch a mobile outdoor camera facility. Further significant growth in sales and profits is forecast in the current year. TFC Europe, a leading distributor of technical fasteners in the UK and Germany, performed well during the year to 31 March 2014, again achieving record profits and sales (cf. a record operating profit of £2.45 million on sales of £18.1 million in 2013), supporting an increase in valuation of £820,741 during the year. In September 2013, a small Scottish distribution business was acquired, thereby improving national coverage. Management's current focus is to generate greater sales in Southern Germany. A new full service centre was opened in Bochum near Dusseldorf in October 2013 and existing customers are already discussing expanding their business with TFC. A strong physical presence will greatly assist TFC in growing its sales and profits in Europe's largest manufacturing market. 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 2013, a record EBITDA of £2.2 million was achieved on sales of £9.25 million (cf. in 2012, an EBITDA of £1.77 million on sales of £8.5 million). Sales growth slowed, however, reflecting increased competition. Recurring annual revenues currently exceed £9 million. In the current year to date, trading continues ahead of budget, with a much reduced attrition rate. To meet growing customer demand, a number of new Cloud based services have recently been launched while the sales and marketing strategy has been reassessed and sales efforts strengthened. Investment continues in upgrading the existing infrastructure. In April 2013, a small number of shares were purchased from two minority shareholders for £104,161. From its fully automated Luton factory, 2K Manufacturing produced high quality Ecosheet boards made from recycled waste plastic. Despite orders and a sales pipeline, limited production capacity constrained output and losses continued to be incurred. To meet working capital requirements, a further £500,000 was invested in loans during the year. Up to £10 million had been sought for some time to increase production capacity but these efforts proved unsuccessful, as did protracted sale and merger discussions. On 18 November 2013, these discussions ended, resulting in an administrator then being appointed. A full provision of £2,002,057 has accordingly been made against the cost of this investment. On 31 October 2013, the investment of £233,250 6% Unsecured Convertible Redeemable Loan note in AiM listed Zoo Digital Group was sold for £177,813 plus interest of £5,847. David Hughes Foresight Group Chief Investment Officer 24 July 2014 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. * 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. * Investment and strategic - inappropriate strategy, poor asset allocation or consistently weak stock selection leading to under performance and poor returns to shareholders. * 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. * Reputational - inadequate or failed controls might result in breaches of regulations or loss of shareholder trust. * 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. * 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. Statement of Directors' Responsibilities in respect of the Annual Report and Financial Statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). Under company law the Directors must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: * select suitable accounting policies and then apply them consistently; * make judgements and estimates that are reasonable and prudent; * state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website (which is delegated to Foresight Group and incorporated into their website). Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Statement of Directors' Responsibilities in respect of the Annual Financial Report We confirm that to the best of our knowledge: * the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; * the Annual Report includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces; and * the report and accounts, taken as a whole, are fair, balanced, and understandable and provide the necessary information for the shareholders to assess the company's performance, business model and strategy. On behalf of the Board Graham Ross Russell Chairman 24 July 2014 Income Statement for the year ended 31 March 2014 Year ended 31 March Year ended 31 March 2014 2013 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains/(losses) on - 1,898 1,898 - (2,536) (2,536) investments Investment holding - (816) (816) - 2,377 2,377 (losses)/gains Income 787 - 787 445 - 445 Investment management fees (237) (710) (947) (246) (737) (983) Other expenses (390) - (390) (437) - (437)------------------------------------------------------------------------------- Return/(loss) on ordinary 160 372 532 (238) (896) (1,134) activities before taxation - - - - - - Taxation------------------------------------------------------------------------------- Return/(loss) on ordinary 160 372 532 (238) (896) (1,134) activities after taxation ------------------------------------------------------------------------------- Return/(loss) per Ordinary Share 0.3p 0.7p 1.0p (0.5)p (1.8)p (2.3)p ------------------------------------------------------------------------------- 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. Reconciliation of Movements in Shareholders' Funds Called-up Share Capital share premium redemption Profit and capital account reserve loss account Total £'000 £'000 £'000 £'000 £'000 Year ended 31 March 2013 As at 1 April 503 - 1,872 36,605 38,980 2012 Share issues in 105 8,995 - - 9,100 the year Expenses in relation to - (125) - - (125) share issues Repurchase of (93) (221) 93 (7,895) (8,116) shares Loss for the - - - (1,134) (1,134) year --------------------------------------------------------------- As at 31 March 515 8,649 1,965 27,576 38,705 2013 --------------------------------------------------------------- Called-up Share Capital share premium redemption Profit and capital account reserve loss account Total £'000 £'000 £'000 £'000 £'000 Year ended 31 March 2014 As at 1 April 515 8,649 1,965 27,576 38,705 2013 Share issues in 4 331 - - 335 the year Expenses in relation to - (81) - - (81) share issues Repurchase of (7) - 7 (429) (429) shares Dividends - - - (1,031) (1,031) Return for the - - - 532 532 year --------------------------------------------------------------- As at 31 March 512 8,899 1,972 26,648 38,031 2014 --------------------------------------------------------------- Balance Sheet at 31 March 2014 Registered Number: 03121772 As at As at 31 March 2014 31 March 2013 £'000 £'000------------------------------------------------------------------------------- Fixed assets Investments held at fair value 36,086 35,447 through profit or loss ------------------------------------------------------------------------------- 36,086 35,447 Current assets Debtors 1,762 2,122 Money market securities and other 277 475 deposits Cash 87 739 ------------------------------------------------------------------------------- 2,126 3,336 Creditors Amounts falling due within one (181) (78) year ------------------------------------------------------------------------------- Net current assets 1,945 3,258 ------------------------------------------------------------------------------- Net assets 38,031 38,705 ------------------------------------------------------------------------------- Capital and reserves Called-up share capital 512 515 Share premium account 8,899 8,649 Capital redemption reserve 1,972 1,965 Profit and loss account 26,648 27,576------------------------------------------------------------------------------- Equity shareholders' funds 38,031 38,705 ------------------------------------------------------------------------------- Net asset value per Ordinary Share 74.2p 75.2p ------------------------------------------------------------------------------- Cash Flow Statement for the year ended 31 March 2014 Year ended Year ended 31 March 31 March 2014 2013 £'000 £'000------------------------------------------------------------------------------- Cash flow from operating activities Investment income received 357 171 Dividends received from investments 283 - Deposit and similar interest received 2 9 Investment management fees paid (922) (993) Secretarial fees paid (126) (121) Other cash payments (250) (449) ------------------------------------------------------------------------------- Net cash outflow from operating activities and returns (656) (1,383) on investment Taxation - - Investing activities Purchase of unquoted investments and investments quoted (4,673) (2,163) on AiM Net proceeds on sale of unquoted investments 4,157 847 Net proceeds on sale of quoted investments 566 159 ------------------------------------------------------------------------------- Net capital outflow from financial investment 50 (1,157) Equity dividends paid (1,031) - ------------------------------------------------------------------------------- Management of liquid resources Movement in money market funds 198 2,311 ------------------------------------------------------------------------------- 198 2,311 Financing Proceeds of fund raising 1,196 1,348 Expenses of fund raising (75) (125) Repurchase of own shares (334) (486)------------------------------------------------------------------------------- 787 737 ------------------------------------------------------------------------------- (Decrease)/increase in cash (652) 508 ------------------------------------------------------------------------------- Reconciliation of net cash flow to movement in net cash (Decrease)/increase in cash for the year (652) 508 Net cash at start of the year 739 231 ------------------------------------------------------------------------------- Net cash at end of year 87 739 ------------------------------------------------------------------------------- Analysis of changes in net debt At 1 April 2013 Cash flow As at 31 March 2014 £'000 £'000 £'000 ------------------------------------------------------------------------------ Cash and cash equivalents 1,214 (850) 364 ------------------------------------------------------------------------------ Notes 1. The audited Annual Financial Report has been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 March 2014. 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. 2. These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 March 2014, which were unqualified and did not contain and 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 2014 including an unqualified audit report and containing no statements under the Companies Act 2006 will be delivered to the Registrar of Companies in due course. 3. Copies of the Annual Financial 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 Ordinary Share Net asset value per Ordinary Share is based on net assets at the year end of £38,031,000 (2013: £38,705,000), and on 51,226,401 Ordinary Shares (2013: 51,471,765 Ordinary Shares), being the number of Ordinary Shares in issue at that date. 5. Return per Ordinary Share Year ended 31 March 2014 Year ended 31 March 2013 £'000 £'000 Total return/(loss) after taxation 532 (1,134) Basic return/(loss) per share (note a) 1.0p (2.3)p --------------------------------------- Revenue return/(loss) from ordinary 160 (238) activities after taxation Revenue return/(loss) per share (note 0.3p (0.5)p b) --------------------------------------- Capital return/(loss) from ordinary 372 (896) activities after taxation Capital return/(loss) per share (note 0.7p (1.8)p c) --------------------------------------- Weighted average number of shares in 51,767,674 50,804,645 issue in the year --------------------------------------- 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 Annual General Meeting will be held at 1.00pm on 16 September 2014 at the offices of Foresight Group, The Shard, 32 London Bridge Street, London, SE1 9SG. 7. Income Year ended Year ended 31 March 2014 31 March 2014 £'000 £'000------------------------------------------------------------------------------- Loan stock interest 501 438 Dividend income 283 - Bank deposits 2 - Overseas based on Open Ended Investment Companies 1 7 ("OEICs") ------------------------------------------------------------------------------- 787 445 ------------------------------------------------------------------------------- 8. Investments held at fair value through profit or loss Quoted Unquoted Total £'000 £'000 £'000 Book cost as at 1 April 2013 3,668 40,514 44,182 Investment holding losses (2,570) (6,165) (8,735) ------------------------------- Valuation at 1 April 2013 1,098 34,349 35,447 Movements in the year: Purchases at cost - 4,781 4,781 Disposal proceeds (566) (4,157) (4,723) Realised (losses)/gains (554) *1,951 1,397 Investment holding gains/(losses) 262 (1,078) (816) ------------------------------- Valuation at 31 March 2014 240 35,846 36,086 ------------------------------- Book cost at 31 March 2014 2,548 43,089 45,637 Investment holding losses (2,308) (7,243) (9,551) ------------------------------- Valuation at 31 March 2014 240 35,846 36,086 ------------------------------- *Included within realised gains/(losses) on investments in the Income Statement is £501,000 of deferred consideration in relation to the Alaric Systems Limited sale in the year. 9. Transactions with the manager Foresight Group, acting as investment manager to the Company in respect of its venture capital investments, earned fees of £947,000 during the year (2013: £983,000). Fees excluding VAT of £126,000 (2013: £123,000) were received during the year for company secretarial, administrative and custodian services to the Company. At the balance sheet date, there was £317 due from Foresight Group (2013: £24,755 due from Foresight Group) and £nil due to or from Foresight Fund Managers Limited (2013: £2,000 due from Foresight Fund Managers). No amounts have been written off in the year in respect of debts due to or from the related parties. Foresight Group also received from investee companies arrangement fees of £25,472 (2013: £58,563). VCF partners, an associate of Foresight Group, received from investee companies, Directors' fees of £175,287 (2013: £190,975). 10. Related party transactions No Director has an interest in any contract to which the Company is a party. END This announcement is distributed by GlobeNewswire on behalf of GlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Foresight 3 VCT PLC via GlobeNewswire [HUG#1838631] A0EQ39B3QF377R281 Copyright RTT News/dpa-AFX |