Foresight Solar VCT PLC : Annual Financial Report
FORESIGHT SOLAR VCT PLC
Summary
Net asset value total return per Ordinary Share in the year to 30 June 2013 increased by 22.2%, representing an uplift in net asset value to 115.7p (30 June 2012: 98.8p) and total dividend payments in the year of 5.0p per Ordinary Share.
In line with original expectations, interim dividends of 2.5p per Ordinary Share were paid to shareholders on 31 October 2012 and 12 April 2013, making 5.0p per Ordinary Share for the year.
Bond refinancing completed on 2 May 2013, increasing target returns per Ordinary Share from 130p towards 150p.
Two small further investments of £325,878 into Greenersite Limited and £6,820 into Foresight Luxembourg Solar 2 S.â.r.l were made during the year and a loan repayment of £410,505 was received from Foresight VCT (Lux) 1 S.â.r.l.
The Ordinary Shares fund is considered fully invested and therefore the Board launched a C Shares fund in February 2013 to take advantage of new solar photovoltaic investment opportunities benefiting from the Renewable Obligation Certificate (ROC) regime (as opposed to the Feed-in-Tariff (FiT) scheme that benefited investments in the Ordinary Shares fund). As at 30 June 2013, a total of 5,731,693 C Shares had been issued
based on an issue price of 100p per C Share.
| Ordinary Shares Fund | Year ended 30 June 2013 | Year ended 30 June 2012 |
| Net asset value per share | 115.7p | 98.8p |
| Revenue return per share | 4.8p | 0.1p |
| Capital return per share | 17.7p | 5.1p |
| Total Dividends per share | 5.0p | - |
| Total return per share | 22.5p | 5.2p |
| Share price per share | 99.0p | 93.0p |
| C Shares Fund | Year ended 30 June 2013 | Year ended 30 June 2012 |
| Net asset value per share | 99.4p | n/a |
| Revenue return per share | (0.4)p | n/a |
| Capital return per share | (0.3)p | n/a |
| Total Dividends per share | - | n/a |
| Total return per share | (0.7)p | n/a |
| Share price per share | 100.0p | n/a |
Chairman's Statement
Results
I am pleased to be able to report on a period of robust performance from the Company's portfolio of solar investments. A combination of the solar plants performing in line with or better than original expectations and the bond refinancing has resulted in a 22.2% increase, after including dividends paid in the year, in net asset value to 115.7p at 30 June 2013 from 98.8p at 30 June 2012. All of the investments are more fully described in the Investment Manager's Report.
Bond Refinancing
On 2nd May 2013, two institutional investors, a British pension fund and an insurance company, invested a total of £60 million gross in this index linked listed bond which is the largest such bond issued to date in the UK. Of this total, approximately £30 million related to the refinancing of the UK solar assets of Foresight Solar VCT plc. The Board and Foresight Group believe that this bond structure offers the best opportunity to investors in Foresight Solar VCT to maximise refinancing proceeds for re-investment in new solar ROC projects and optimise returns when compared with other alternative refinancing structures, such as traditional bank loans and project or asset finance facilities. Investors in Foresight Solar VCT are expected to benefit from higher dividends and greater capital appreciation as a result of this innovative refinancing, increasing the target return from 130p per share towards 150p per share in 2016. Further details are included in the Investment Manager's report.
Dividends
The Board plans to pay dividends of 5.0p per Ordinary Share each year throughout the life of Foresight Solar 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.
In line with original expectations, the first interim dividend of 2.5p per Ordinary Share was paid on 31 October 2012 and a second interim dividend of 2.5p per Ordinary Share was paid to shareholders on 12 April 2013, making 5.0p per Ordinary Share in total.
As a result of the strong operational performance of the portfolio and the successful bond refinancing, the Board is pleased to announce that the next interim dividend, increased to 3.0p per Ordinary Share was paid on 25 October 2013. The dividend had an ex-dividend date of 9 October 2013 and a record date of 11 October 2013. This forms the first part of the 6p annual target dividend for 2013/14.
Share Issues & New Fund Raising
During the period there were no issues or buybacks of Ordinary Shares. The Ordinary Shares fund is now effectively fully invested and therefore the Board has decided to launch a C Shares fund to take advantage of new solar photovoltaic (PV) investment opportunities benefiting from the Renewable Obligation Certificate (ROC) regime (as opposed to the Feed-in-Tariff (FiT) scheme that benefited investments in the Ordinary Shares fund). The new fund, which has been launched as a separate "C" Share class whose assets and liabilities will be segregated from those of the Ordinary Shares fund, is being managed by the existing Foresight Group Solar team. The target is for a total fund-raising of £20 million. Although the funds will be run separately there will be areas of
commonality between the funds, which should allow for cost savings that will benefit both sets of shareholders.
The prospectus for the new £20 million C Shares fund-raising was launched in February 2013 and as at 30 June 2013, a total of 5,731,693 C Shares had been issued based on an issue price of 100p per C Share. As at the date of publication of this announcement a total of 6,903,414 C Shares had been issued based on an issue price of 100p per C Share.
Valuation Policy
Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital (IPEVC) valuation guidelines (August 2010) 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. The portfolio valuations are prepared by Foresight Group, reviewed and approved by the Board quarterly and subject to audit annually.
Outlook
The Board and Foresight Group, the Investment Manager, are satisfied with the current portfolio and the quality of the returns being seen from those projects, which gives us confidence in achieving the original objectives of the Company. The refinancing of existing projects has facilitated the release of funds for further investment in a rapidly growing UK PV sector, which should enhance returns to shareholders.
Additionally, as outlined earlier in my statement, a further fund-raising has been undertaken to enable the Company to take advantage of further solar investment opportunities, although these investments will be managed in a separate C Shares fund as the Government incentives and returns from Solar ROC investments differ from the investments in the fully invested Ordinary Shares fund.
David Hurst-Brown
Chairman
28 October 2013
Investment Manager's Report
UK Assets
As indicated in the Investment Manager's review in the interim report & accounts, the Company's Ordinary share class interests in four UK ground based solar power plants were refinanced during the period with cheaper long term debt which is expected to enhance investor returns (both in terms of higher dividends and greater capital appreciation). A £60 million listed index linked solar bond, of which £30 million relates solely to Foresight Solar VCT, was issued secured
solely on these plants which are held jointly with another Foresight Group managed fund, the Foresight Solar EIS Fund. These proceeds will in turn be invested in other UK ground based solar power plants benefiting from the UK Government's ROC subsidy scheme. Because of the favourable differential between the yield on these new ROC based plants and the cost of the bond, investors in Foresight Solar VCT are expected to benefit from higher dividends and greater capital appreciation as a result of this refinancing, increasing the target return from 130p per share towards 150p per share in 2016. Through the
issue of this bond, over 100p of refinancing proceeds has been raised for each 100p invested in the plants by Foresight Solar VCT which still owns the same equity interest in the four UK plants. The four plants are the principal assets of the Ordinary share class and are all trading successfully benefitting from index linked Feed-in Tariffs (FiTs) over 25 years.
The solar bond, which at £60 million was the largest such bond issued to date in the UK, was subscribed for by two institutional investors, a British pension fund and an insurance company. Foresight believes that this bond structure offers the best opportunity to investors in Foresight Solar VCT to maximise refinancing proceeds for re-investment in new solar ROC projects and optimise returns when compared with other alternative refinancing structures, such as traditional bank loans and project or asset finance facilities. The bond capital which is index linked will be repaid over 21 years in instalments twice yearly. Annual interest will be charged at a fixed rate of 2.60% on such index linked principal which compares with much higher rates and shorter average lives for conventional bank loans. Interest rates on comparable government bonds were at or near long term lows when the bond completed and this is one of the main reasons, along with the long 21 year tenor, that such a bond is the most efficient refinancing structure currently available.
The solar bond proceeds were generated not by Foresight Solar VCT but by the underlying investments it holds, so although there is no borrowing or leverage by the Foresight Solar VCT, the underlying investments now have borrowings, effectively, of £30 million. These borrowings are secured on the assets of the underlying investments and there is no recourse to Foresight Solar VCT plc or against the proceeds, which will be reinvested in new projects.
Reinvestment of Bond Proceeds and Investment of C share class
Foresight has an extensive pipeline of UK solar ROC opportunities totalling over 600 MWs in which to invest (more than £600 million), over part of which Foresight already enjoys exclusivity. It is expected that all of the net bond proceeds and the funds raised by the Company's £20m "C" Share issue will be invested in UK based operating plants with a view to benefiting from the ROC subsidy framework.
European Assets
Although the Foresight Solar VCT portfolio is predominantly comprised of UK solar assets, the Company also has exposure to several assets in both Italy and Spain accounting in aggregate for 18% of the total invested assets.
The Company's Italian assets continue to perform in line or slightly ahead of original expectations, which is reflected in the current carrying value of the investment. Although the Italian Government raised the rate of corporate tax for energy producers, this has had a minimal impact on the portfolio as a whole.
The Spanish assets owned by the fund have been negatively impacted by recent changes in legislation, which effectively place a cap on the revenues that Spanish solar assets can generate. Although the application and financial impact of these regulatory changes are, as yet, uncertain, a provision of 25% has been made against the previous carrying value of the Spanish assets held by Foresight Solar VCT plc.
Increasing Capital Value and Dividends
After the bond issue, the residual net present value of the equity in the four UK solar assets is estimated to be worth approximately 30p per share. Together with the net bond proceeds, this more than achieves the 130p per share return on the UK solar assets originally targeted.
By investing the proceeds in new ROC solar plants in a timely manner, investor returns are expected to be enhanced, facilitating the payment of dividends increasing from the current annual level of 5.0p per share while also creating more scale which will be valuable in maximising ultimate sale proceeds. Once fully operational, the new solar ROC plants are expected to deliver a net 5.0p annual dividend to investors. Combined with the annual residual equity distributions from the four existing UK solar assets, this is expected to result in progressive, growing dividends for VCT investors from 2014 onwards.
Each 100p invested in new solar ROC plants is expected to generate a total return of 120p. By adding this to the estimated residual net present value of the four UK solar assets, the bond refinancing and reinvestment strategy could improve total returns for investors from 130p towards 150p per share.
A small investment was completed during the period in Greenersite Limited which owns a fully FiT accredited 100 kilowatt roof top PV plant on a farm in Herefordshire.
Outlook
Utility scale ground based UK solar PV installations are currently growing rapidly based on ROC subsidy support. The VCT Ordinary share class can use this opportunity to enhance investment returns generated by the existing portfolio by using the refinancing proceeds to build a bigger portfolio that should generate more yield and value on an exit. The 'C' share class will invest in a similar portfolio over the course of the next 12 months.
Jamie Richards
Head of Infrastructure
28 October 2013
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 - events such as an economic recession and movement in interest rates could affect 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 capital gains 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. The Company would also lose its exemption from corporation tax on capital gains.
Investment and strategic - inappropriate strategy, poor asset allocation or consistent weak stock selection might lead to under performance and poor returns to shareholders. Changes in the rates of Feed-in Tariffs (FiTs) could impact the underlying returns of the Company's investments.
Regulatory - the Company is required to comply with the Companies Act 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.
Natural disasters - severe weather/natural disaster could lead to reduction in performance and value of the assets.
Reputational - inadequate or failed controls might result in breaches of regulations or loss of shareholder trust.
Operational - failure of the Manager's accounting systems or disruption to its business might lead to an inability to provide accurate reporting and monitoring.
Fraud - inadequate controls might lead to misappropriation of assets.
Theft - inadequate security and control could lead to the theft of assets.
Financial - inappropriate accounting policies might lead to misreporting or breaches of regulations. Additional financial risks, including interest rate, credit, market price and currency, are detailed in note 15 to the Annual Report and Accounts.
Market risk - investment in AIM traded, PLUS 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 smaller 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 - the Company's investments, being unquoted, may be difficult to realise.
Currency risk - short-term currency risk, such as that associated with the investments in Spain and Italy, is mitigated by taking out options that convert the capital investment proceeds back into sterling at the same rate as the original sterling investment was converted into Euros when making the original investment. This ensures no currency loss on the investment up to original cost. The cost of the option is covered by the returns on the investment.
The Board seeks to mitigate the internal risks by setting policy, regular review of performance, enforcement of contractual obligations and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the UK Corporate Governance Code. Details of the Company's internal controls are contained in the Corporate Governance and Internal Control sections of the Annual Report and Accounts.
Statement of Directors' Responsibilities
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 that 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 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.
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; and
the Directors' 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.
On behalf of the Board
David Hurst-Brown
Chairman
28 October 2013Unaudited Non-Statutory Analysis between the Ordinary Shares and C Shares Funds
| Income Statements | ||||||||||||||
| for the year ended 30 June 2013 | ||||||||||||||
| Ordinary Shares Fund | C Shares Fund | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Investment holding gains | - | 7,432 | 7,432 | - | - | - | ||||||||
| Realised losses on investments | - | (28) | (28) | - | - | - | ||||||||
| Income | 2,461 | - | 2,461 | - | - | - | ||||||||
| Investment management fees | (152) | (457) | (609) | (6) | (18) | (24) | ||||||||
| Losses on the value of derivatives | - | (305) | (305) | - | - | - | ||||||||
| Other expenses | (310) | - | (310) | (19) | - | (19) | ||||||||
| Return/(loss) on ordinary activities before taxation | 1,999 | 6,642 | 8,641 | (25) | (18) | (43) | ||||||||
| Taxation | (166) | 156 | (10) | 6 | 4 | 10 | ||||||||
| Return/(loss) on ordinary activities after taxation | 1,833 | 6,798 | 8,631 | (19) | (14) | (33) | ||||||||
| Return/(loss) per share | 4.8p | 17.7p | 22.5p | (0.4)p | (0.3)p | (0.7)p | ||||||||
| Balance Sheets | |||||||
| at 30 June 2013 | |||||||
| Ordinary Shares Fund | C Shares Fund | ||||||
| £'000 | £'000 | ||||||
| Fixed Assets | |||||||
| Investments held at fair value through profit or loss | 43,838 | - | |||||
| Current assets | |||||||
| Debtors | 610 | 41 | |||||
| Money market securities and other deposits | 8 | - | |||||
| Cash | 129 | 5,766 | |||||
| 747 | 5,807 | ||||||
| Creditors | |||||||
| Amounts falling due within one year | (213) | (110) | |||||
| Net current assets | 534 | 5,697 | |||||
| Net assets | 44,372 | 5,697 | |||||
| Capital and reserves | |||||||
| Called-up share capital | 384 | 57 | |||||
| Share premium account | - | 5,673 | |||||
| Capital redemption reserve | 1 | - | |||||
| Profit and loss account | 43,987 | (33) | |||||
| Equity shareholders' funds | 44,372 | 5,697 | |||||
| Number of shares in issue | 38,366,252 | 5,731,693 | |||||
| Net asset value per share | 115.7p | 99.4p |
At 30 June 2013 there was an inter-share debtor/creditor of £37,000 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 year ended 30 June 2013
| Called-up share capital | Share premium account | Capital redemption reserve | Profit and loss account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Ordinary Shares | |||||
| As at 1 July 2012 | 384 | - | 1 | 37,506 | 37,891 |
| Expenses in relation to share issues | - | - | - | (232) | (232) |
| Dividends | - | - | - | (1,918) | (1,918) |
| Return for the year | - | - | - | 8,631 | 8,631 |
| As at 30 June 2013 | 384 | - | 1 | 43,987 | 44,372 |
| Called-up share capital | Share premium account | Capital redemption reserve | Profit and loss account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| C Shares | |||||
| As at 1 July 2012 | - | - | - | - | - |
| Share issues in the year | 57 | 5,943 | - | - | 6,000 |
| Expenses in relation to share issues | - | (270) | - | - | (270) |
| Loss for the year | - | - | - | (33) | (33) |
| As at 30 June 2013 | 57 | 5,673 | - | (33) | 5,697 |
Audited Income Statement
for the year ended 30 June 2013
| Year ended | Year ended | ||||||
| 30 June 2013 | 30 June 2012 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Investment holding gains | - | 7,432 | 7,432 | - | 2,240 | 2,240 | |
| Realised losses on investments | - | (28) | (28) | - | - | - | |
| Income | 2,461 | - | 2,461 | 488 | - | 488 | |
| Investment management fees | (158) | (475) | (633) | (130) | (390) | (520) | |
| (Losses)/gains on the value of derivatives | - | (305) | (305) | - | 63 | 63 | |
| Other expenses | (329) | - | (329) | (339) | - | (339) | |
| Return on ordinary activities before taxation | 1,974 | 6,624 | 8,598 | 19 | 1,913 | 1,932 | |
| Taxation | (160) | 160 | - | - | - | - | |
| Return on ordinary activities after taxation | 1,814 | 6,784 | 8,598 | 19 | 1,913 | 1,932 | |
| Return/(loss) per share: | |||||||
| Ordinary Share | 4.8p | 17.7p | 22.5p | 0.1p | 5.1p | 5.2p | |
| C Share | (0.4)p | (0.3)p | (0.7)p | n/a | n/a | n/a | |
The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information.
All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the year.
The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total recognised gains and losses has been presented.
Audited Reconciliation of Movements in Shareholders' Funds
| Called-up share capital | Share premium account | Capital redemption reserve | Profit and loss account | Total | |
| Year ended 30 June 2012 | £'000 | £'000 | £'000 | £'000 | £'000 |
| As at 1 July 2011 | 331 | 30,946 | - | (333) | 30,944 |
| Share issues in the year | 54 | 5,354 | - | - | 5,408 |
| Expenses in relation to share issues | - | 338 | - | (633) | (295) |
| Repurchase of shares | (1) | - | 1 | (98) | (98) |
| Cancellation of share premium* | - | (36,638) | - | 36,638 | - |
| Return for the year | - | - | - | 1,932 | 1,932 |
| As at 30 June 2012 | 384 | - | 1 | 37,506 | 37,891 |
* The share premium of the Company was cancelled by order of the High Court of Justice, Chancery Division, on 8 February 2012 and registered at Companies House on 21 February 2012. This has enabled the Company to increase its distributable reserve to which, amongst other things, losses can be written off, providing the Company greater flexibility when considering dividend payments to shareholders and from which share buybacks can be financed.
| Called-up share capital | Share premium account | Capital redemption reserve | Profit and loss account | Total | |
| Year ended 30 June 2013 | £'000 | £'000 | £'000 | £'000 | £'000 |
| As at 1 July 2012 | 384 | - | 1 | 37,506 | 37,891 |
| Share issues in the year | 57 | 5,943 | - | - | 6,000 |
| Expenses in relation to share issues | - | (270) | - | (232) | (502) |
| Dividends | - | - | - | (1,918) | (1,918) |
| Return for the year | - | - | - | 8,598 | 8,598 |
| As at 30 June 2013 | 441 | 5,673 | 1 | 43,954 | 50,069 |
Audited Balance Sheet
at 30 June 2013
| Registered Number: 07289280 | |||||
| As at | As at | ||||
| 30 June 2013 | 30 June 2012 | ||||
| £'000 | £'000 | ||||
| Fixed assets | |||||
| Investments held at fair value through profit or loss | 43,838 | 36,511 | |||
| Current assets | |||||
| Debtors | 614 | 1,240 | |||
| Money market securities and other deposits | 8 | 336 | |||
| Cash | 5,895 | 58 | |||
| 6,517 | 1,634 | ||||
| Creditors | |||||
| Amounts falling due within one year | (286) | (254) | |||
| Net current assets | 6,231 | 1,380 | |||
| Net assets | 50,069 | 37,891 | |||
| Capital and reserves | |||||
| Called-up share capital | 441 | 384 | |||
| Share premium account | 5,673 | - | |||
| Capital redemption reserve | 1 | 1 | |||
| Profit and loss account | 43,954 | 37,506 | |||
| Equity shareholders' funds | 50,069 | 37,891 | |||
| Net asset value per share | |||||
| Ordinary Share | 115.7p | 98.8p | |||
| C Share | 99.4p | n/a | |||
Audited Cash Flow Statement
for the year ended 30 June 2013
| Year ended | Year ended | |
| 30 June 2013 | 30 June 2012 | |
| £'000 | £'000 | |
| Cash flow from operating activities | ||
| Investment income received | 2,753 | 36 |
| Deposit and similar interest received | - | 7 |
| Investment management fees paid | (702) | (495) |
| Secretarial fees paid | (134) | (106) |
| Other cash payments | (202) | (232) |
| Net cash inflow/(outflow) from operating activities and returns on investment | 1,715 | (790) |
| Returns on investment and servicing of finance | ||
| Purchase of investments | (333) | (32,190) |
| Net proceeds on sale of investments | 410 | 7,108 |
| Purchase of financial assets | - | (361) |
| Net capital inflow/(outflow) from financial investment | 77 | (25,443) |
| Equity dividends paid | (1,918) | - |
| Financing | ||
| Proceeds of fund raising | 6,050 | 5,577 |
| Expenses of fund raising | (415) | (408) |
| Repurchase of own shares | - | (98) |
| 5,635 | 5,071 | |
| Increase/(decrease) in cash | 5,509 | (21,162) |
| Reconciliation of net cash flow to movement in net funds | ||
| Increase/(decrease) in cash for the year | 5,509 | (21,162) |
| Net cash at start of year | 394 | 21,556 |
| Net cash at end of year | 5,903 | 394 |
| Analysis of changes in net cash | ||||||
| At 1 July 2012 | Cash flow | At 30 June 2013 | ||||
| £'000 | £'000 | £'000 | ||||
| Cash and cash equivalents | 394 | 5,509 | 5,903 | |||
Notes to the accounts
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 30 June 2013. 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 30 June 2013, which were unqualified and did not contain any statements under S498(2) or S498(3) of Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 30 June 2013 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 Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at ECA Court, 24-26 South Park, Sevenoaks, Kent, TN13 1DU and can be accessed on the following website: www.foresightgroup.eu
4. Net asset value per share
Net asset value per Ordinary Share is based on net assets at the year end of £44,372,000 (2012: £37,891,000) and on 38,366,252 Ordinary Shares (2012: 38,366,252 Ordinary Shares), being the number of Ordinary Shares in issue at that date.
Net asset value per C Share is based on net assets at the year end of £5,697,000 (2012: n/a) and on 5,731,693 C Shares (2012: n/a), being the number of C Shares in issue at that date.
5. Return per share
| Year ended 30 June 2013 | Year ended 30 June 2012 | |||
| Ordinary Shares | C Shares | Ordinary Shares | C Shares | |
| £'000 | £'000 | £'000 | £'000 | |
| Total return/(loss) after taxation | 8,631 | (33) | 1,932 | n/a |
| Total return/(loss) per share (note a) | 22.5p | (0.7)p | 5.2p | n/a |
| Revenue return/(loss) from ordinary activities after taxation | 1,833 | (19) | 19 | n/a |
| Revenue return/(loss) per share (note b) | 4.8p | (0.4)p | 0.1p | n/a |
| Capital return/(loss) from ordinary activities after taxation | 6,798 | (14) | 1,913 | n/a |
| Capital return/(loss) per share (note c) | 17.7p | (0.3)p | 5.1p | n/a |
| Weighted average number of shares in issue during the year | 38,366,252 | 5,079,631 | 37,361,746 | n/a |
Notes:
a) Total return per share is total return after taxation divided by the weighted average number of shares in issue during the year.
b) Revenue return per share is revenue return after taxation divided by the weighted average number of shares in issue during the year.
c) Capital return per share is capital return after taxation divided by the weighted average number of shares in issue during the year.
6. The Annual General Meeting will be held at 4.00pm on 16 December 2013 at the offices of Foresight Group LLP, ECA Court, South Park, Sevenoaks, Kent, TN13 1DU.
7. Income
| Year ended 30 June | Year ended 30 June | ||
| 2013 | 2012 | ||
| £'000 | £'000 | ||
| Bank interest | - | - | |
| Distributions from overseas based Open Ended Investment Companies ("OEICs") | - | 37 | |
| Loan stock interest | 1,368 | 444 | |
| Dividends receivable | 1,093 | - | |
| 2,461 | 488 | ||
8. Investments held at fair value through profit or loss
2013
2012
£'000
£'000
Unquoted investments
43,838
36,511
43,838
36,511
| Unquoted | Total | ||
| Company | £'000 | £'000 | |
| Book cost as at 1 July 2012 | 34,215 | 34,215 | |
| Opening investment holding gains | 2,296 | 2,296 | |
| Valuation at 1 July 2012 | 36,511 | 36,511 | |
| Movements in the period: | |||
| Purchases at cost | 333 | 333 | |
| Disposal proceeds | (410) | (410) | |
| Realised losses | (28) | (28) | |
| Investment holding gains | 7,432 | 7,432 | |
| Valuation at 30 June 2013 | 43,838 | 43,838 | |
| Book cost at 30 June 2013 | 34,110 | 34,110 | |
| Closing investment holding gains | 9,728 | 9,728 | |
| Valuation at 30 June 2013 | 43,838 | 43,838 | |
| Unquoted | Total | ||
| Ordinary Shares | £'000 | £'000 | |
| Book cost as at 1 July 2012 | 34,215 | 34,215 | |
| Opening investment holding gains | 2,296 | 2,296 | |
| Valuation at 1 July 2012 | 36,511 | 36,511 | |
| Movements in the period: | |||
| Purchases at cost | 333 | 333 | |
| Disposal proceeds | (410) | (410) | |
| Realised losses | (28) | (28) | |
| Investment holding gains | 7,432 | 7,432 | |
| Valuation at 30 June 2013 | 43,838 | 43,838 | |
| Book cost at 30 June 2013 | 34,110 | 34,110 | |
| Closing investment holding gains | 9,728 | 9,728 | |
| Valuation at 30 June 2013 | 43,838 | 43,838 | |
No investments had been made by the C Shares fund at 30 June 2013.
9. Transactions with the manager
Foresight Group LLP, Foresight Fund Managers Limited and Foresight Group CI Limited are considered to be related parties of the Company.
Foresight Group, which acts as investment manager to the Company in respect of its venture capital investments earned fees of £633,000 in the year (2012: £520,000).
Foresight Group also provides administration services to the Company, and received fees of £122,000 plus VAT during the year (2012: £104,000). The annual administration and accounting fee (which is payable together with any applicable VAT) is 0.3% of the net funds raised by the offer (subject to a minimum index-linked fee of £60,000 for each of the Ordinary and C Share funds).
At the balance sheet date there was £96,000 due to Foresight Group (2012: £159,000).
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. From this, Foresight Group received from investee companies arrangement fees of £nil in the year (2012: £716,000).
Foresight Fund Managers are the Secretary of the Company and received £nil during the year for their services (2012: £nil).
END
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 Solar VCT PLC via Thomson Reuters ONE
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