Foresight Solar & Infrastructure VCT PLC : Half...

FORESIGHT SOLAR & INFRASTRUCTURE VCT PLC

Financial Highlights

Ordinary Shares Fund	Six months ended 31 December 2015	Year ended 30 June 2015
Net asset value per share	105.9p	109.9p
Revenue return per share	0.5p	1.0p
Total (loss)/return per share	(0.8)p	14.9p
Share price per share	104.5p	102.5p

C Shares Fund	Six months ended 31 December 2015	Year ended 30 June 2015
Net asset value per share	82.0p	91.7p
Revenue return per share	(0.0)p	0.2p
Total (loss)/return per share	(7.0)p	(1.0)p
Share price per share	88.5p	93.5p

Chairman's Statement

Summary Financial Highlights

• Net asset value per Ordinary Share at 31 December 2015 was 105.9p after payments of 3.0p in dividends (30 June 2015: 109.9p).
• Net asset value per C Share at 31 December 2015 was 82.0p after payments of 2.5p in dividends (30 June 2015: 91.7p).
• Total net asset value return (including dividends paid since launch) at 31 December 2015 is 125.9p for the Ordinary Shares fund and 89.5p for the C Shares fund.

Ordinary Shares Fund

• An interim dividend of 3.0p per Ordinary Share was paid on 13 November 2015.
• An interim dividend of 3.0p per Ordinary Share will be paid on 8 April 2016. based on an ex-dividend date of 17 March 2016 and a record date of 18 March 2016.

C Shares Fund

• An interim dividend of 2.5p per C Share was paid on 13 November 2015.
• An interim dividend of 2.5p per C Share will be paid on 8 April 2016 based on an ex-dividend date of 17 March 2016 and a record date of 18 March 2016.
• One new investment was made during the period totalling £950,000.

Dividend History

Ordinary Shares		Dividend per share
13	November 2015	3.0p
10	April 2015	3.0p
14	November 2014	3.0p
4 April 2014		3.0p
25	October 2013	3.0p
12	April 2013	2.5p
31	October 2012	2.5p
C Shares Fund		Dividend per share
13	November 2015	2.5p
10	April 2015	2.5p
14	November 2014	2.5p

Introduction

As outlined in my statement last October, 2015 saw a significant strategic shift in the UK Government's policies with respect to renewable energy investment. Although this has changed fundamentally the landscape for future investment in PV solar, as an established owner of assets these changes are not expected to have a material detrimental effect on our existing portfolio.

Additionally, changing legislation permits investment in energy generating investments (subject to them not benefitting from any form of Government subsidy) albeit for a very short period until 5 April 2016, after which time they will also be prohibited for VCTs. Consequently, given the complementary nature of this investment opportunity to those already being pursued by the Company, the Board decided to launch a 'D' Share fund raising to take advantage of it. The fund will invest in new electricity generation projects in the very short term as well as longer term energy related infrastructure investments such as smart meters. The offer for up to £20 million opened on 1 February 2016 and will close on 31 August 2016.

Performance - Ordinary Shares Fund

The underlying net asset value decreased by 1.0p per Ordinary Share before deducting the 3.0p per Ordinary share dividend paid during the period.

The valuation of the UK portfolio decreased by approximately £0.5 million (1.2p per Ordinary Share) principally as a result of the Government's removal of Levy Exemption Certificates (LECs) for renewable energy schemes from August 2015. The overall impact was partially offset by improvements in the valuations of our Italian and Spanish assets.

The restructuring of the debt component of our Italian holdings due to be completed this month, February 2016, will put the portfolio on a sound footing and in a position to recommence distributions to the VCT later in the year. At the same time we continue to pursue international arbitration proceedings against the Government of Spain for breaching the protections available under the Energy Charter Treaty and international law in order to remedy our losses. The Spanish and Italian assets account for circa 8% of the Ordinary share portfolio.

The overall performance of the Ordinary Shares fund remains robust and the total return since inception as at 31 December 2015 was 125.9p per Ordinary Share compared with the fund's original target of a total 5 year return of 130.0p per Ordinary Share.

Ordinary Shareholder Individual Roll-Over Option

As noted in the original prospectus, the Board undertook to write to Shareholders with respect to their individual roll-over option choices which was envisaged to be in June 2015, four years after the original offer closed in June 2011. As the offer was eventually extended until November 2011, this period has been extended by a few months.

In line with its original intention, the Board has included a separate enclosure for Shareholders to complete and return in respect of their anticipated preference to either sell or hold their shares once their minimum five year holding period has expired. This declaration will provide both the Board and the Manager with an indication of whether Shareholders intend to liquidate their holdings or to remain invested for the longer term, although a final confirmation of the declaration will be sought later in 2016. This, in turn, will allow the Board and Manager to better plan asset realisations over the coming months.


i. Movement in Net Asset Value of the Ordinary Shares Fund

During the period, the net asset value of the Ordinary Shares fund decreased to 105.9p per share (£40.5 million) at 31 December 2015 from 109.9p per share (£42.1 million) at 30 June 2015. The main reason behind the fall in net assets was the aggregate performance of the investment portfolio decreasing by 0.7p, a dividend payment of 3.0p per Ordinary Share and income less expenses of negative 0.3p. This is summarised further in the table below:

		Pence per
		Ordinary
	£'000	Share
NAV at 30 June 2015	42,111	109.9
Dividends paid	(1,150)	(3.0)
UK investments valuation decrease	(462)	(1.2)
Italian investments valuation increase	164	0.4
Spanish investments valuation increase	38	0.1
Other	(167)	(0.3)
NAV at 31 December 2015	40,534	105.9

ii. Cash & Deal Flow
The Ordinary Shares fund had cash and liquid resources of £10,000 at 31 December 2015. The Company receives regular interest and loan stock payments and dividends from its underlying investments enabling it to continue to fund its dividend policy as well as meeting expenses in the ordinary course of business as they fall due.

iii. Investment Gains & Losses
There were no realised gains or losses during the period for the Ordinary Shares fund.

During the period the Ordinary Shares fund recognised unrealised losses of £259,000. Further information regarding the breakdown of this amount is contained in the Manager's Report.

iv. Running Costs
The annual management fee of the Ordinary Shares fund is 1.5%. During the period the management fees totalled £313,000, of which £78,000 was charged to the revenue account and £235,000 was charged to the capital account.

v. Ordinary Share Dividends
The Board originally planned to pay dividends of 5.0p per Ordinary Share each year throughout the life of Foresight Solar & Infrastructure VCT plc after the first year, payable bi-annually via dividends of 2.5p per Ordinary Share in April and October each year. The level of dividends is not, however, guaranteed. The Board is pleased to announce that the next interim dividend, of 3.0p per Ordinary Share, will be paid on 8 April 2016 based on an ex-dividend date of 17 March 2016 and a record date of 18 March 2016, which means that total dividends of 6.0p per Ordinary Share will have been paid during the 2015/16 year.

vi. Ordinary Share Issues & Buybacks
During the period under review, 26,094 Ordinary Shares were repurchased for cancellation. No new shares were issued.
Performance - C Shares Fund
The underlying net asset value decreased by 7.2p per 'C' Share before deducting the 2.5p per 'C' share dividend paid during the year.

The valuation of the UK portfolio decreased by approximately £0.8 million (6.4p per C Share). This decrease in valuation was driven principally by the removal of Levy Exemption Certificates (LECs) for renewable energy by the Government from August 2015 and a reduction in actual and forecast power prices. The 'C' shares fund has a greater exposure to ROC subsidised projects than the Ordinary shares fund. This means a greater proportion of project revenues are exposed to changes in power prices. The US solar investment in the 'C' share portfolio helps to diversify this particular risk.

The overall performance of the 'C' Shares fund is disappointing to date but the opportunity to refinance the portfolio together with other operational efficiencies being implemented should see performance improving.
i. Movement in Net Asset Value of the C Shares Fund

During the period, the net assets of the C Shares fund decreased to 82.0p per share (£10.3 million) at 31 December 2015 from 91.7p per share (£11.5 million) as at 30 June 2015, largely due to the aggregate performance of the investment portfolio and dividends paid.

This is summarised further in the table below:

			Pence per
		£'000	C share
NAV at 30	June 2015	11,477	91.7
Dividends paid		(312)	(2.5)
UK investments valuation decrease		(797)	(6.4)
Other		(108)	(0.8)
NAV at 31	December 2015	10,260	82.0

ii. Cash & Deal Flow
During the period, the C share class invested £0.95 million in the EOSOL project in Lancaster, California. The project has been operational since 2013 and the region benefits from some of the highest irradiation levels in the world. At 31 December 2015 the C Share fund had cash or near cash resources of £8,000.

iii. Investment Gains & Losses
There were no realised gains or losses during the period.
During the period the C Shares fund recognised unrealised losses of £797,000. Further information regarding the breakdown of this amount is contained in the Manager's Report.

iv. Running Costs
The annual management fee of the C Shares fund is 1.75%. During the period the management fees totalled £98,000, of which £25,000 was charged to the revenue account and £73,000 was charged to the capital account.

v. C Share Dividends
The Board is pleased to announce that the next interim dividend, of 2.5p per C Share, will be paid on 8 April 2016 based on an ex-dividend date of 17 March 2016 and a record date of 18 March 2016, which means that total dividends of 5.0p per C Share will have been paid during the 2015/16 year.

Outlook - C Shares Fund
The proceeds of the C Share offer have been fully allocated to new projects currently being completed. Further details on these investments and their underlying performance will be provided when they have completed over the next few months.

Overall Company Outlook
The O share portfolio continues to perform in line with expectations. As a mature solar fund based on FIT revenues, its future performance will be dependent mostly on our efforts to improve operational efficiency and any restructuring benefits that can be extracted from the smaller European investments.

The performance of the C Share portfolio in the last six months has been impacted by a combination of the abrupt removal of LECs by the UK government in August 2015 as well as the continuing fall in power prices. Our objective is to focus on a combination of operational and financing improvements and, when, over the next few months our final investment begins to generate power and revenues the trend in underlying NAV should begin to improve.

David Hurst-Brown
Chairman
29 February 2016
Investment Manager's Report

Ordinary Shares

Regulatory and Market Changes

There have been a number of regulatory developments over the second half of 2015 but it is important to note that the changes to the Renewables Obligation scheme have no impact on the Fund's existing operating assets or any of the projects under exclusivity. In relation to the immediate pipeline, the single project under development will qualify for 1.3 ROC banding upon its imminent completion through Scorpii Solar as noted on the investment summary on page 7.

In the Budget on 8 July 2015 changes were announced to the Climate Change Levy ("CCL") with the removal of Levy Exemption Certificates ("LECs") impacting both existing and new solar investments from 1 August 2015. This announcement led to a c. 3% reduction in future cash flows at project level.

It should be noted that the CCL announcement represented a change in tax policy, in that it removed an existing tax benefit for electricity sourced from renewable sources, rather than a subsidy change. The impact of this change is fully reflected in the fund's NAV.

In July 2015, the Government held consultations around solar PV growth and its provisions for banded support for new solar PV under the Renewables Obligation Scheme ("RO Scheme"). Following the consultations, the Department of Energy and Climate Change ("DECC") announced in December it would close the RO Scheme to new solar PV of 5MW and below from 1 April 2016 onwards, subject to certain Grace Periods.

The decision by DECC was driven by the significant increase in the installed capacity of UK solar in recent years, expected to exceed 10GW by the end of March 2016. DECC had previously flagged that it would continue to monitor the deployment of new installations and the subsequent impact this would have on the Levy Control Framework ("LCF"). We believe this confirms DECC's continued intention to introduce changes that support the future sustainability of the LCF, without impacting the existing support mechanisms for renewable energy investments already in place.

Power Prices

UK power prices continued a downward trend throughout 2015, driven in part by lower gas prices due to stockpiles of liquefied gas and above average winter temperatures during Q1 and Q4 of 2015. As a result, the Company has revised downwards its forecast power prices by an average of c.13% over the period, with a greater revision being seen in the front end of the curve. This has led to a reduction in NAV.

It should be noted that the impact of falling power prices on the portfolio is mitigated to a certain extent by the fact that a large proportion of portfolio revenues received are from subsidies and associated green benefits which are fixed and index-linked.

Ordinary Shares

UK Assets

Four plants in Kent, Somerset and Wiltshire are the principal assets of the Ordinary Shares fund and are all trading successfully and benefiting from index linked Feed-in Tariffs (FiTs) over 25 years. The favourable differential between the yield on new ROC based plants and the cost of the bond means that investors in Foresight Solar VCT's Ordinary Shares fund are benefiting from higher dividends and greater capital appreciation as a result of this refinancing. This has enabled 130.0p per share to be restored as the target total return of the share class despite the negative impact of the Spanish assets (see below).

This was the first period that materially benefitted from the Capacity Agreements with the Turweston solar project. These agreements substantially take the form of the original agreements in place with the four FiT assets. Turweston is a 16.45 MW site and benefits from 1.4 ROCs. Following completion of Turweston in December 2014, the Ordinary Share class became fully re-invested.

During the period under review production from the four FiT sites was approximately 4% lower than expectations due to lower levels of solar irradiation. The technical efficiency of the plants continued to exceed expectations. The performance of Turweston mirrored that of the FiT assets.

European Assets

Although the Foresight Solar VCT Ordinary Shares fund is predominantly comprised of UK solar assets, the Company also has exposure to several assets in both Italy and Spain accounting in aggregate for approximately 8% of the portfolio value. The Spanish and Italian assets achieved production levels slightly above expectations despite suffering from poor irradiation during the period.

The Italian solar sector is now stabilising as it adapts to unfavourable regulatory changes and increased risk, driven by the government's desire to reduce the cost of renewable energy to domestic electricity consumers, who indirectly fund the subsidies.

Foresight has analysed the impact of these changes in legislation across the portfolio and recently completed refinancing of the Italian portfolio following the 31 December period end. This has led to a more efficient debt package which will result in a small increase in carrying value for the Italian portfolio and will facilitate ongoing distributions from the portfolio.

The Spanish asset owned by the Company has also been negatively impacted by changes in legislation, which have effectively placed a cap on the returns that Spanish solar assets can generate. This cap has been set at 7.4%. (Calculated as 300 basis points over the average

of the 10 year Spanish Government Bond yield). The Ordinary Shares fund's exposure to the Company's only Spanish asset is 3.0% of the portfolio value. A provision of 50% is in place against the cost of the Spanish asset held by Foresight Solar VCT plc.

The Investment Manager is progressing compensation claims for the retrospective legislative changes in Italy and Spain but the outcome, quantum and timing of any compensation is currently difficult to predict.

Exit

Despite the impact of the Italian and Spanish assets on the share class, alongside the continued decline in forecast prices in the wholesale power market, we continue to believe that the 130p target for the Ordinary Shares Fund is achievable. The Board will write separately to shareholders to set out the relevant timescales and exit opportunities from this share class.

'C' Shares

Investments into Saron and New Kaine, sized at 6.3MW and 1.9MW respectively, were completed during 2015. The Fund has a third asset under exclusivity that, upon completion, will see all of the C share class fund fully deployed.

During the period under review production from the two UK sites was approximately 5% below expectations due to lower levels of irradiation. The technical efficiency of the plant continued to exceed expectations.

It has taken longer to fully deploy the 'C' shares than expected partly due to the relatively small size of the 'C' share investee companies required to satisfy the VCT rules. Solar project sizes have been at 5MWs on the whole driven by the ROC subsidy requirements and associated project development activity which creates an investment size bigger than some of the £4m investee companies but not big enough to attract bank lenders to the projects. This delay has had an impact on returns as has the competiveness for projects generally. The current 'C' share NAV reflects these challenges generally including the impact of power prices as mentioned above.

US assets

During the period the C Shares fund acquired an equity share of a 3.6MW portfolio located in Lancaster, California, a region which benefits from some of the highest levels of irradiance in the world. The EOSOL project has been operational since 2013 and to date has performed above investment base case projections.

Outlook

With deployment now almost complete across both share classes our focus has shifted to optimising the financial and technical performance of the sites. Our six-strong in-house technical team continue to develop initiatives to improve production levels and we continue to see benefits from a growing portfolio of solar assets through reduced overheads and improved commercial terms across a number of maintenance contracts. As we get closer to the 5 year anniversary of the Ordinary Shares fund, we will actively consider further refinancing opportunities in order to optimise value ahead of or in conjunction with any sale.

Jamie Richards

Head of Infrastructure

Foresight Group

29 February 2016

Unaudited Half-Yearly Financial Report and Responsibility Statements

Principal Risks and Uncertainties
The principal risks faced by the Company can be divided into various areas as follows:

• Performance
• Regulatory
• Operational; and
• Financial

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the year ended 30 June 2015. A detailed explanation can be on found on page 8 of the Annual Report and Accounts which is available at www.foresightgroup.eu or by writing to Foresight Group at The Shard, 32 London Bridge Street, London, SE1 9SG.
In the view of the Board, there have been no changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review.
Directors' Responsibility Statement:
The Disclosure and Transparency Rules ('DTR') of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Unaudited Half-Yearly Financial Report for the six months ended 31 December 2015.
The Directors confirm to the best of their knowledge that:
(a) the summarised set of financial statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board;
(b) the Unaudited Half-Yearly Financial Report for the six months ended 31 December 2015 includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year and a description of principal risks and uncertainties that the Company faces for the remaining six months of the year);
(c) the summarised set of financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R; and
(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Going Concern
The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report in the 30 June 2015 Annual Report and Accounts. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement, Strategic Report and Notes to the Accounts of the 30 June 2015 Annual Report and Accounts. In addition, the Annual Report and Accounts includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Company has considerable financial resources together with investments and income generated therefrom, which benefit from Feed-in-Tariffs guaranteed by the UK Government. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.

Cash flow projections have been reviewed and show that the Company has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of the share buy-back programme and dividend policy. The Company has no external loan finance in place and therefore is not exposed to any gearing covenants.

The Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The Half-Yearly Financial Report for the six months ended 31 December 2015 has not been audited or reviewed by the auditors.
On behalf of the Board

David Hurst-Brown
Chairman
29 February 2016

Unaudited Non-Statutory Analysis between the Ordinary Shares and C Shares Funds

Income Statements
for the six months ended 31 December 2015

		Ordinary Shares Fund			C Shares Fund
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Investment holding losses		-	(259)	(259)	-	(797)	(797)
Income		442	-	442	75	-	75
Investment management fees		(78)	(235)	(313)	(25)	(73)	(98)
Other expenses		(163)	-	(163)	(52)	-	(52)
Return/(loss) on ordinary activities before taxation		201	(494)	(293)	(2)	(870)	(872)
Taxation		-	-	-	-	-	-
Return/(loss) on ordinary activities after taxation		201	(494)	(293)	(2)	(870)	(872)
Return/(loss) per share		0.5p	(1.3)p	(0.8)p	(0.0)p	(7.0)p	(7.0)p

Balance Sheets
at 31 December 2015

				Ordinary Shares Fund			C Shares Fund
				£'000			£'000
Fixed Assets
Investments held at fair value through profit and loss				40,273			9,948
Current assets
Debtors				402			313
Money market securities and other deposits				9			-
Cash				1			8
				412			321
Creditors
Amounts falling due within one year				(151)			(9)
Net current assets				261			312
Net assets				40,534			10,260
Capital and reserves
Called-up share capital				383			125
Share premium				-			1,576
Capital redemption reserve				2			-
Profit and loss account				40,149			8,559
Equity shareholders' funds				40,534			10,260
Net asset value per share				105.9p			82.0p

At 31 December 2015 there was an inter-share debtor/creditor of £57,000 which has been eliminated on aggregation.

Unaudited Non-Statutory Analysis between the Ordinary Shares and C Shares Funds
Reconciliations of Movements in Shareholders' Funds
for the six months ended 31 December 2015

	Called-up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total
	£'000	£'000	£'000	£'000	£'000
Ordinary Shares Fund
As at 1 July 2015	383	-	2	41,426	42,111
Expenses in relation to share issues	-	-	-	(107)	(107)
Repurchase of shares	-	-	-	(27)	(27)
Dividends	-	-	-	(1,150)	(1,150)
Loss for the period	-	-	-	(293)	(293)
As at 31 December 2015	383	-	2	40,149	40,534
	Called-up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total
	£'000	£'000	£'000	£'000	£'000
C Shares fund
As at 1 July 2015	125	1,609	-	9,743	11,477
Expenses in relation to share issues	-	(33)	-	-	(33)
Dividends	-	-	-	(312)	(312)
Loss for the period	-	-	-	(872)	(872)
As at 31 December 2015	125	1,576	-	8,559	10,260

Unaudited Income Statement
for the six months ended 31 December 2015

	Six months ended			Six months ended			Year ended
	31 December 2015 (unaudited)			31 December 2014 (unaudited)			30 June 2015 (audited)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investment holding (losses)/gains	-	(1,056)	(1,056)	-	2,297	2,297	-	5,525	5,525
Income	517	-	517	609	-	609	1,155	-	1,155
Investment management fees	(103)	(308)	(411)	(103)	(311)	(414)	(205)	(616)	(821)
Gains on the value of derivatives	-	-	-	-	154	154	-	154	154
Other expenses	(215)	-	(215)	(200)	-	(200)	(433)	-	(433)
Return/(loss) on ordinary activities before taxation	199	(1,364)	(1,165)	306	2,140	2,446	517	5,063	5,580
Taxation	-	-	-	(47)	47	-	(107)	107	-
Return/(loss) on ordinary activities after taxation	199	(1,364)	(1,165)	259	2,187	2,446	410	5,170	5,580
Return/(loss) per share:
Ordinary Share	0.5p	(1.3)p	(0.8)p	0.5p	5.9p	6.4p	1.0p	13.9p	14.9p
C Share	(0.0)p	(7.0)p	(7.0)p	0.4p	(0.7)p	(0.3)p	0.2p	(1.2)p	(1.0)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 period.

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.

Unaudited Balance Sheet
at 31 December 2015

Registered Number: 07289280

	As at	As at	As at
	31 December 2015	31 December 2014	30 June 2015
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	50,221	51,430	51,705
Current assets
Debtors	715	577	720
Money market securities and other deposits	9	8	9
Cash	9	144	1,221
	733	729	1,950
Creditors
Amounts falling due within one year	(160)	(130)	(67)
Net current assets	573	599	1,883
Net assets	50,794	52,029	53,588
Capital and reserves
Called-up share capital	508	508	508
Share premium account	1,576	12,318	1,609
Capital redemption reserve	2	2	2
Profit and loss account	48,708	39,201	51,469
Equity shareholders' funds	50,794	52,029	53,588
Net asset value per share:
Ordinary Share	105.9p	104.7p	109.9p
C Share	82.0p	95.0p	91.7p

Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 December 2015

Company	Called-up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total
	£'000	£'000	£'000	£'000	£'000
As at 1 July 2015	508	1,609	2	51,469	53,588
Expenses in relation to share issues	-	(33)	-	(107)	(140)
Repurchase of shares	-	-	-	(27)	(27)
Dividends	-	-	-	(1,462)	(1,462)
Return for the period	-	-	-	(1,165)	(1,165)
As at 31 December 2016	508	1,576	2	48,708	50,794

Unaudited Cash Flow Statement
for the six months ended 31 December 2015

	Six months  ended	Six months  ended	Year ended
	31 December 2015	31 December 2014	30 June 2014
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash flow from operating activities
Investment income received	585	282	686
Deposit and similar interest received	-	1	1
Investment management fees paid	(410)	(402)	(818)
Secretarial fees paid	(84)	(84)	(167)
Other cash payments	(141)	(129)	(289)
Net cash outflow from operating activities and returns on investment	(50)	(332)	(587)
Returns on investment and servicing of finance
Purchase of investments	(950)	(1,808)	(1,808)
Net proceeds on sale of investments	1,378	1,118	4,071
Net proceeds on sale of financial assets	-	662	662
Net capital inflow/(outflow) from financial investment	428	(28)	2,925
Equity dividends paid	(1,462)	(1,463)	(2,925)
Financing
Expenses of fund raising	(101)	(305)	(463)
Repurchase of own shares	(27)	(36)	(36)
	(128)	(341)	(499)
Decrease in cash	(1,212)	(2,164)	(1,086)
Reconciliation of net cash flow to movement in net funds
Decrease in cash for the period	(1,212)	(2,164)	(1,086)
Net cash at start of period	1,230	2,316	2,316
Net cash at end of period	18	152	1,230

Analysis of changes in net cash
	1 July 2015	Cash flow	31 December 2015
	£'000	£'000	£'000
Cash and cash equivalents	1,230	(1,212)	18

Notes to the Unaudited Half-Yearly Financial Report
for the six months ended 31 December 2015

 1.    The Unaudited Half-Yearly results have been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 30 June 2015. Unquoted investments have been valued in accordance with the International Private Equity and Venture Capital Valuation guidelines. Quoted investments are stated at bid prices in accordance with UK Generally Accepted Accounting Practice.

 2.    These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six months ended 31 December 2015 and 31 December 2014 has been neither audited nor reviewed. Statutory accounts in respect of the year to 30 June 2015 have been audited and reported on by the Company's auditor and delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006. No statutory accounts in respect of any period after 30 June 2015 have been reported on by the Company's auditor or delivered to the Registrar of Companies.

3.    Copies of the Unaudited Half-Yearly Financial Report for the six months ended 31 December 2015 have been sent to shareholders and are available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG.
Copies of the Unaudited Half-yearly Financial Report for the six months ended 31 December 2015 are also available electronically at www.foresightgroup.eu.

4. Net asset value per share

The net asset value per share is based on net assets at the end of the period and the number of shares in issue at that date.

	Ordinary Shares Fund		C Shares Fund
	Net assets £'000	Number of Shares in Issue	Net assets £'000	Number of Shares in Issue
31 December 2015	40,534	38,290,862	10,260	12,509,245
31 December 2014	40,141	38,331,956	11,888	12,511,089
30 June 2015	42,111	38,331,956	11,477	12,511,089

5. Return per share

The weighted average number of shares for the Ordinary Shares and C Shares funds used to calculate the respective returns are shown in the table below:

	Ordinary Shares Fund Number of Shares	C Shares Fund Number of Shares
Six months ended 31 December 2015	38,314,971	12,511,079
Six months ended 31 December 2014	38,331,956	12,511,089
Year ended 30 June 2015	38,331,915	12,511,089

6. Income

	Six months ended	Six months ended	Year ended
	31 December 2015	31 December 2014	30 June 2015
	(unaudited) £'000	(unaudited) £'000	(audited) £'000
Loan stock interest	517	608	1,153
Bank interest	-	1	2
	517	609	1,155

7. Investments held at fair value through profit or loss

Company	Unquoted & Total
	£'000
Book cost as at 1 July 2015	39,373
Investment holding gains	12,332
Valuation at 1 July 2015	51,705
Movements in the period:
Purchases at cost	950
Disposal proceeds	(1,378)
Investment holding losses	(1,056)
Valuation at 31 December 2015	50,221
Book cost at 31 December 2015	38,945
Investment holding gains	11,276
Valuation at 31 December 2015	50,221

Ordinary Shares Fund	Unquoted & Total
	£'000
Book cost as at 1 July 2015	29,373
Investment holding gains	12,324
Valuation at 1 July 2015	41,697
Movements in the period:
Disposal proceeds	(1,165)
Investment holding losses	(259)
Valuation at 31 December 2015	40,273
Book cost at 31 December 2015	28,208
Investment holding gains	12,065
Valuation at 31 December 2015	40,273

C Shares Fund	Unquoted & Total
	£'000
Book cost as at 1 July 2015	10,000
Investment holding gains	8
Valuation at 1 July 2015	10,008
Movements in the period
Purchases at cost	950
Disposal proceeds	(213)
Investment holding losses	(797)
Valuation as at 31 December 2015	9,948
Book cost at 31 December 2015	10,737
Investment holding losses	(789)
Valuation at 31 December 2015	9,948

8. Transactions with the manager

Details of arrangements of the Company with Foresight Group are given in the Annual Report and Accounts for the year ended 30 June 2015, in the Directors' Report and Note 3.

Foresight Group, which acts as investment manager to the Company in respect of its venture capital investments earned fees of £410,000 in the six months ended 31 December 2015 (31 December 2014: £414,000; 30 June 2015: £821,000).

Foresight Group also provides administration services to the Company via Foresight Fund Managers Limited, and received fees excluding VAT of £84,000 during the six months ended 31 December 2015 (31 December 2014: £84,000; 30 June 2015: £167,000). The annual administration and accounting fee (which is payable together with any applicable VAT) is 0.3% of the net funds raised (subject to a minimum index-linked fee of £60,000 for each of the Ordinary and C Shares funds).

At the balance sheet date there was £10,000 due to Foresight Group (31 December 2014: £26,000; 30 June 2015: £3,000).

Foresight Group are responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ('abort expenses'). In line with industry practice, Foresight Group retain the right to charge arrangement and syndication fees and Directors' or monitoring fees ('deal fees') to companies in which the Company invests.

Foresight Group is also a party to the performance incentive agreement described in Note 13 of the Annual Report and Accounts for the year ended 30 June 2015.

9. Related party transactions

There were no related party transactions in the period.

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Foresight Solar VCT PLC via Globenewswire

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