Final Results

Foresight 4 VCT PLC
26 April 2005

Foresight 4 VCT plc



Chairman's Statement



Investment Objective



The objective of Foresight 4 VCT plc (formerly Advent 2 VCT plc) is to provide
private investors with attractive returns from a portfolio of investments in
fast growing unquoted technology-based companies in the United Kingdom.  It is
the intention to maximise the 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.



Summary



• The Company's Manager was changed to Foresight Venture Partners in July 2004,
the investment policy changed and the Company's name became Foresight 4 VCT plc.

• New funds are being raised to enable the Company to participate in new
investment opportunities generated from Foresight Venture Partners' strong deal
flow.

• To date the Company has raised £0.75 million from existing shareholders. A new
offer will be extended to the general public on or around 1 July 2005 to raise
the balance of up to £25 million.

• Realisations of two investments were achieved during the year, DNA Research
Innovations (£1.5m in November 2004 plus an earn out over the next 18 months of
up to £1.4m) and PrismTech (£0.2m).

• As a result of these realisations the Company's bank borrowings of £1 million
have been repaid.

• The Company invested some £613,000 in follow on funding rounds in six
portfolio companies, namely Adeptra (£7,000), Advanced Visual Technology
(£50,000), EnSeal Systems (£250,000), IPV (£42,000), Nomad Software (£246,000)
and Reqio (£18,000).

• The net asset value per share fell from 44.3p per share as at 29 February 2004
to 30.1p per share at 30 September 2004 and then increased to 34.0p per share as
at 28 February 2005.



Venture Capital Trust Status



Foresight 4 VCT plc has been granted approval as a Venture Capital Trust (VCT)
under section 842AA of the Income and Corporation Taxes Act 1988 and it is
intended that the business of the Company be carried on so as maintain its VCT
status.



Change of Manager, Name, Directors and Investment Policy



On 30 July 2004, following shareholders' approval, Foresight Venture Partners
took over the management of the Company from Advent Fund Managers Limited and
the name of the Company was changed to Foresight 4 VCT plc from Advent 2 VCT
plc.  Sir Peter Williams and Sir David Cooksey resigned as Directors while
Philip Stephens and I agreed to remain as a Director and Chairman respectively.
Bernard Fairman and Peter Dicks joined the Board.  Bernard is one of the two
founder partners of Foresight Venture Partners which has been a successful
technology sector investor for over 20 years. Foresight Venture Partners
launched and manage Foresight Technology VCT plc, the most successful VCT since
launch in 1997, has recently launched Foresight 2 VCT plc, they also took over
the management of Foresight 3 VCT plc (formerly Advent VCT plc) at the same time
as taking over the management of this Company, and they currently co-manage
TriVest VCT plc.  Peter was a founder director in 1973 of Abingworth plc, a
venture capital company, and is a director of a number of listed and unquoted
companies, including Chairman of Foresight Technology VCT plc, Foresight 2 VCT
plc and Unicorn AIM VCT plc.



Following the Annual General Meeting, I shall relinquish the Chairmanship in
favour of Peter Dicks but will remain on the Board as a Director.  Having spent
many years in the venture capital industry, Peter is highly experienced both as
a director and chairman and I wish him every success as the new Chairman of
Foresight 4 VCT plc.



After taking over the management of the Company, Foresight Venture Partners
carried out a detailed review of portfolio valuations as at 31 August 2004 and,
reflecting their prudent basis of valuation and the impact of current trading
conditions, a considerable number of changes were made to previous valuations -
both upwards as well as downwards - with the overall effect of reducing the net
asset value of the Company from 44.3p per share as at 29 February 2004 to 30.4p
per share as at 31 August 2004.  Reflecting inter alia the impact of
realisations and terms of proposed funding rounds, the net asset value has
increased subsequently to 34.0p per share as at 28 February 2005.



I believe Foresight Venture Partners have already started to improve the
prospects for the portfolio and to increase the likelihood of generating
positive returns for shareholders.  After more than three difficult years,
certain of our portfolio companies are now enjoying improved trading conditions,
are winning orders and also have limited projected funding requirements.
However, despite these conditions, others have still found current trading
conditions to be difficult.



Offers for Subscription to raise up to £25m



Following shareholder approval at an Extraordinary General Meeting on 28
February, the Board announced its intention, to raise up to £25m through offers
for subscription of new shares and to restructure the share capital to create
shares of 1p each.  The first offer was formally made on 18 March to existing
shareholders, offering the opportunity to subscribe up to £5m for new shares at
a price which was a 10% discount to the latest published net asset value.  To
date £0.75 million has been raised from existing shareholders. This offer closes
on 30 April 2005.  A further offer will be made to the general public to raise
the balance of up to £25m by issuing new shares at the prevailing net asset
value (but without such a discount) plus related issue expenses.



New capital from the offer for subscription will enable the Company to start
making new investments, including co-investing alongside other funds managed or
advised by Foresight Venture Partners. Additional capital is expected to be
generated from the realisation of existing portfolio investments, which will
also be used to make new investments, but this may take some time.



The restructuring approved at the Extraordinary General Meeting will be
completed following the close of the current offer to shareholders as the
further offer to the general public will now not be made until on or around 1
July 2005. The net effect of the restructuring will ultimately be to consolidate
three existing shares of 5p each into one new share of 1p each but this will not
affect the value of your aggregate shareholding in the Company.



Borrowing



During 2003, the Company became increasingly constrained by its lack of cash to
meet its various operating and investment requirements and consequently a
borrowing facility was arranged with the Company's bankers, of which some £1
million was drawn down as at 31 August 2004.  However, I am pleased to note
that, as a consequence of the realisations of the investments in DNA Research
Innovations in October 2004 and PrismTech in February 2005, these borrowings
have been fully repaid, leaving sufficient cash resources for operating and
supporting the existing portfolio. The Company still retains access to a £0.5
million bank facility if required.



Investment Activity



During the year to 28 February 2005, some £613,000 was invested in follow-on
funding rounds in six portfolio companies, namely Adeptra (£7,000), Advanced
Visual Technology (£50,000), EnSeal Systems (£250,000), IPV (£42,000), Nomad
Software (£246,000) and Reqio (£18,000). No new investments were made.



In October 2004, the investment in DNA Research Innovations was acquired by
Invitrogen Corporation of the USA for £1.5m in cash rising to £2.9m if certain
technical milestones are achieved by April 2006, nearly three times the £1m cost
of the original investment.



The prospects of several other portfolio companies are continuing to improve.
Footfall, INCA Digital and Casella have produced good trading performances;
Healthgain continues to develop successfully in a tough market; and in March
2005, Vectorcommand secured significant new investment which is expected to
accelerate growth, particularly from US sales.



Balance Sheet



The net asset value per share as at 28 February 2005 was 34.0p compared with
44.3p as at 29 February 2004. The Company continues to exceed the 70% minimum
requirement set by the Inland Revenue for qualifying holdings, thereby
maintaining continued Venture Capital Trust status. The outstanding loan of £1
million was repaid on 23 November 2004.



Valuation Policy



Unquoted investments have been valued in accordance with guidelines issued by
the British Venture Capital Association except that listed securities are valued
at mid-market prices with no discount applied.  Investments are carried on the
basis of fair value after applying the most appropriate method of valuation,
reflecting all factors considered material by the Manager.



International Financial Reporting Standards ('IFRS')



The Board notes that the EC Regulation No. 1606/2002 requiring all listed
companies which prepare consolidated accounts to produce these under IFRS may
have an impact on the Company's financial reporting requirements. These elements
will be monitored and assessed with regard to their likely impact.



Dividend



Although the Company successfully realised a gain on the sale of the investment
in DNA Research Innovations, the Company utilised the cash generated to repay
borrowings.  The Board is therefore not recommending a dividend.  The net
dividends paid since the inception of the Company total 19.95p.



Purchase of Own Shares



It continues to be the Company's policy to consider repurchasing shares when
they become available in order to provide liquidity for the Company's shares and
it is hoped that this may become possible once the outcome of the offers for
subscription are known.  However, the existence of a bank loan for most of the
year and the need to maintain cash resources for follow-on investments precluded
such repurchases during the year.



Outlook



Most of the portfolio companies are now benefiting from the prevailing stable
economic environment and improved trading conditions.  The Manager continues to
work with the Boards of portfolio companies to ensure they are focusing their
sales and marketing efforts to increase revenues.  A number of companies in the
portfolio have the potential to generate value provided these conditions
continue, particularly the levels of corporate spending on IT and services.
This potential has been recognised as a number of approaches have been received
from possible purchasers or merger partners for certain portfolio companies,
which should lead to realisations being achieved in due course.



Although the net asset value has declined during the year, the Board believes
that this represents the application by the Manager of robust and prudent
valuations in line with BVCA guidelines.  The appointment of Foresight Venture
Partners, a VCT manager with a strong performance record, has marked a turning
point in building and realising value from the portfolio and taking the Company
forward.



The offers for subscription to raise up to £25m of new capital will represent
the start of a new phase of the Company's life. Foresight Venture Partners has a
strong deal flow of interesting opportunities and new capital will enable the
Company to start making new investments at a phase of the economic cycle that
both the Board and the Manager expects to be advantageous for investment.



26 April 2005
For further information please contact:
Foresight Venture Partners, Tel:[phone]
Teather and Greenwood, Tel: [phone]










Profit and Loss Account

Unaudited figures for the year ended 28 February 2005
                                                                              2005                  2004
                                                                             £'000                 £'000


Investment income and deposit interest                                          47                   137
Investment management fees                                                   (273)                 (309)
Other expenses                                                               (298)                 (247)

Operating loss                                                               (524)                 (419)

Loss on realisation of investments                                         (1,645)               (5,636)

Loss on ordinary activities before taxation                                (2,169)               (6,055)

Tax on ordinary activities                                                      -                     -

Loss on ordinary activities after taxation                                 (2,169)               (6,055)

Dividends                                                                       -                     -

Balance transferred from reserves                                          (2,169)               (6,055)


Earnings per share                                                          (6.0)p               (16.9)p




Statement of Total Recognised Gains and Losses

Unaudited figures for the year ended 28 February 2005
                                                                               2005                 2004
                                                                              £'000                £'000

Loss for the year                                                           (2,169)              (6,055)
Unrealised (loss)/profit on revaluation of investments                      (1,523)                3,643

Total recognised loss relating to the year                                  (3,692)              (2,412)



All items in the above statements derive from continuing operations. No
operations were acquired or discontinued in the year.



The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits. Income from
investments is recognised on an accruals basis.




Balance Sheet

Unaudited figures at 28 February 2005
                                                          2005                         2004
                                                         £'000                        £'000


Fixed assets
Venture capital investments
Quoted                                                     125                          182
Unquoted                                                11,354                       16,256
                                                        11,479                       16,438
Current assets
Debtors                                                  1,073                          438
Cash                                                       308                          350
                                                         1,381                          788

Creditors: amounts falling due
   within one year                                       (663)                      (1,337)

Net current assets/(liabilities)                           718                        (549)

Net assets                                              12,197                       15,889

Capital and reserves
Called-up share                                          1,793                        1,793
capital
Share premium account                                   23,581                       23,581
Capital redemption reserve                                   9                            9
Revaluation reserve                                    (7,588)                      (6,065)
Profit and loss                                        (5,598)                      (3,429)
account

Equity shareholders' funds                              12,197                       15,889


Net asset value per share                                34.0p                        44.3p












Cashflow Statement

Unaudited figures for the year ended 28 February 2005
                                                                    2005                        2004
                                                                   £'000                       £'000
Cashflow from operating activities
Investment income received                                            30                          53
Deposit and similar interest received                                  2                           1
Investment management fees paid                                    (350)                          -
Secretarial fees paid                                               (60)                          -
Other cash receipts/(payments)                                        59                        (78)
Net cash outflow from
operating activities and returns on investment                     (319)                        (24)


Taxation                                                               -                          -

Returns on investment and servicing of finance
Purchase of unquoted investments and                               (613)                     (1,079)
investments
quoted on AIM
Net proceeds on sale of unquoted investments                       1,479                          25
Net proceeds on sale of quoted investments                            -                          622
Net proceeds on liquidation of investments                            25                          -

Net capital inflow/(outflow) from financial                          891                       (432)
investment

Management of liquid resources
Loans (repaid)/drawn down                                          (614)                         614

(Decrease)/increase in cash                                         (42)                         158

Reconciliation of net cashflow to movement
in net cash/(debt)
(Decrease)/increase in cash for the year                            (42)                         158
Movement in money market and other deposits                           -                            2
Net (debt)/cash at start of                                        (264)                         190
year
Loans repaid/(drawn down)                                            614                       (614)

Net cash/(debt) at end of                                            308                       (264)
year

Reconciliation of operating loss to net
cashflow from operating activities
Operating loss                                                     (524)                       (419)
Changes in working capital                                           205                         395

Net cash outflow from operating activities                         (319)                        (24)



Notes
1.    The unaudited preliminary results have been prepared on the basis of accounting policies set out in
the statutory accounts of the Company for the year ended 29 February 2004. Unquoted investments have been
valued in accordance with BVCA guidelines. Quoted investments are stated at middle market prices.

2.    These are not statutory accounts in accordance with section 240 of the Companies Act 1985 and are
unaudited. The full audited accounts for the year ended 29 February 2004, which were unqualified, have been
lodged with the Registrar of Companies. No statutory accounts in respect of any period after 29 February
2004 have been reported on by the Company's auditors or delivered to the Registrar of Companies.

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 Swiss Life House, South Park, Sevenoaks, Kent TN13 1DU.

4.    Number of shares in issue 35,862,753 (2004: 35,862,753).



5.    Post Balance Sheet Events

An offer for subscription of new shares to raise up to £5 million to existing
shareholders has to date raised £0.75 million. This offer closes on 30 April
2005.  A further offer will be made to the general public to raise the balance
of up to £25m by issuing new shares at the prevailing net asset value plus
related issue expenses.








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