Foresight VCT PLC : Annual Financial Report

FORESIGHT VCT PLC

Summary Financial Highlights

·         Net asset value per Ordinary Share at 31 December 2013 was 101.0p after a payment of 5.0p in dividends (31 December 2012: 111.3p).
·         Net asset value per Planned Exit Share at 31 December 2013 was 82.5p after a payment of 5.0p in dividends (31 December 2012: 100.0p).
·         Net asset value per Infrastructure Share at 31 December 2013 was 91.5p after a payment of 2.5p in dividends (31 December 2012: 94.6p).

Ordinary Shares fund

An interim dividend for the year ended 31 December 2013 of 10.0p per Ordinary Share was paid on 14 March 2014 based on an ex-dividend date of 26 February 2014 and a record date of 28 February 2014.
The Ordinary Shares fund provided follow-on funding totalling £1.0 million to eight portfolio companies and £3.8 million for three new investments.
The Ordinary Shares fund realised £11.2 million from sales and loan redemptions from ten portfolio companies.

Planned Exit Shares fund

An interim dividend of 5.0p per Planned Exit Share was paid on 25 October 2013. The dividend had a record date of 11 October 2013 and an ex-dividend date of 9 October 2013.
One new investment was made by the Planned Exit Shares fund totalling £0.2 million and two follow-on investments were made totalling £0.2 million.
The Planned Exit Shares fund realised £0.2 million from sales and loan redemptions from three portfolio companies.

Infrastructure Shares fund

An interim dividend of 2.5p per Infrastructure Share was paid on 20 December 2013. The dividend had a record date of 13 December 2013 and an ex-dividend date of 11 December 2013.
The Infrastructure Shares fund made six new investments totalling £7.6 million and is expected to become fully invested over the next twelve months.

Chairman's Statement

Strategic Report

This is the first time that my annual Statement has been produced under the recently introduced UK 'narrative reporting' framework. This includes a requirement to provide a separate Strategic Report with certain prescribed content in accordance with regulations made under the provisions of the Companies Act 2006. This now brings together various governance disclosures and related matters and you will find it immediately following this statement. Some of the information previously contained in my statement will therefore be found elsewhere in the Report and Accounts but my statement includes those key areas of performance which I believe are of most significance to each sub-set of Shareholders.

Performance - Ordinary Shares Fund

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

During the year, the net assets of the Ordinary Shares Fund increased to £31.1 million at 31 December 2013 from £30.4 million at 31 December 2012.

Of this net increase, the principal contributing factors were a total of £4.2 million raised from the issue of new shares, and investment income of £0.6 million; this was offset by payment of dividends totalling £1.4 million, management fees and other expenses of £0.8 million, share buybacks of £0.7 million and disappointingly a net decrease of £1.2 million from the investment performance of the Ordinary Shares fund portfolio.

ii. Movement in Net Asset Value per Share of the Ordinary Shares Fund

During the year, the net asset value of the Ordinary Shares Fund decreased to 101.0p per share at 31 December 2013 from 111.3p per Share at 31 December 2012.

The main reason behind the fall in net assets was the aggregate performance of the investment portfolio: the private equity investments performed reasonably well but the poor performance of the small portfolio of environmental investments has meant that the overall net asset value of the Ordinary Share Fund decreased over the year.

iii. Cash & Deal Flow

During the year the Ordinary Shares Fund made the following new private equity and follow-on investments:

New Investments

Company	£
Aerospace Tooling Corporation Limited	1,500,000
Fire and Air Services Limited	1,500,000
Procam Television Holdings Limited	800,000
Total	3,800,000

Follow-on funding (including capitalised interest)

Company	£
Abacuswood Limited	120,000
AlwaysOn Group	75,075
Autologic Diagnostics Holdings Limited*	73,305
Biofortuna Limited	99,095
DCG Group Limited	219,933
Flowrite Refrigeration Holdings Limited*	19,288
Trilogy Communications Limited	287,165
Withion Power Limited	136,000
Total	1,029,861

*(including capitalised interest)

Cash Availability
The Ordinary Shares Fund had cash and liquid resources of £12.1 million at 31 December 2013, which had increased to £12.2 at the time of writing. These funds will be used to make several new private equity investments over the next twelve months from Foresight Group's deal flow pipeline of new opportunities.

Additionally, a proportion of cash and liquidity will be utilised in the maintenance of payment of dividends to shareholders as well as annual running expenses and a continuing share buyback programme.

iv. Investment Gains & Losses

During the year the Ordinary Share Fund in aggregate realised net losses amounting to £529,000 and this was despite a significant gain of £4.9m from Alaric Systems Limited. The most significant losses were Sarantel plc (£3.1 million) and Corero plc (£1.7 million). Further details of these gains and losses as well as others of significance during the year are contained in the Managers' Report.

v. Running Costs

The annual management fee of the Ordinary Shares Fund is 2.0%. During the year the management fees totalled £603,000, of which £151,000 was charged to the revenue account and £452,000 was changed to the capital account. At 2.6% the total expense ratio of the Ordinary Shares Fund for the year to 31 December 2013 compares very favourably with its VCT peer group.

vi. Ordinary Share Dividends

It continues to be the Company's policy to provide a flow of tax-free dividends, generated from income and from capital profits realised on the sale of investments. However distributions will inevitably be dependent on cash being generated from portfolio investments and successful realisations.

Based on this policy an interim dividend of 10.0p was paid on 14th March 2014 based on an ex-dividend date of 26 February 2014 and a record date of 28 February 2014.

During the year ended 31 December 2013, an interim dividend of 5.0p per Ordinary Share was paid on 14 June 2013. This dividend had an ex-dividend on 29 May 2013 and the record date for payment was 31 May 2013.

vii. Ordinary Shares Issues & Buybacks

A prospectus offer to raise £20 million was launched on 26 September 2013. At year end the offer had raised £3,772,222 through the issue of 3,646,287 Ordinary Shares based on a net asset value of 102.2p per Ordinary Share. The Company launched an Ordinary Share top-up offer on 3 December 2012 and 519,920 Ordinary Shares were allotted during the year ended 31 December 2013, based on net asset values ranging from 98.0p to 111.3p per Ordinary Share.

The Company allotted 46,334 Ordinary Shares under the Company's Dividend Reinvestment Scheme at 98.0p per share.

During the period under review 707,552 Ordinary Shares were repurchased for cancellation at a cost of £673,000 at an average discount to NAV of 10.3%. The Board and the Manager consider share buybacks to be an effective way to manage the share price discount to NAV at which the Ordinary Shares trade.

viii. Summary Post Year End Update
Following the year end, a total of £11.7 million has been raised under the current offer for subscription.

Additionally, as part of a takeover of AlwaysON Limited by DCG Group Limited, the Ordinary Shares Fund invested £130,000 into AlwaysON Limited.

A total of £3.0 million was invested into one new investment, which is expected to acquire a trading business in the next few months.

Proceeds of £20,000 were received from the liquidators of Abacuswood Limited.

Outlook - Ordinary Shares Fund

The effect of the improvement in the economy
The performance of the private equity part of the Ordinary Share portfolio including a series of realisations at attractive prices and the success of the current fund-raising, has generated significant cash balances for that fund. This underpins the Board's dividend commitment to Shareholders and provides sufficient capacity for several new investments to be made over the medium term, which we anticipate will further enhance shareholder returns.

Performance - Planned Exit Shares Fund
i. Movement in Net Asset Value of the Planned Shares Fund
During the year, the net assets of the Planned Exit Shares Fund decreased to £5,044,000 at 31 December 2013 from £6,144,000 at 31 December 2012.

Contributing to this net decrease were the Planned Exit Shares Fund dividends totalling £305,000, management fees and other expenses of £100,000 and share buybacks totalled £25,000 during the year. The principal reasons, however, behind the fall in net assets was the aggregate performance of the investment portfolio: and one investment in particular, Industrial Engineering Plastics, which fell by £814,000, as a result of tougher trading conditions. Foresight Group, however, remain confident about the longer term future prospects for this investment.

ii. Movement in Net Asset Value per share of the Planned Exit Shares Fund
Over the year, the net asset value of the Planned Exit Shares Fund decreased to 82.5p per share at 31 December 2013 from 100.0p per Share at 31 December 2012.

iii. Cash & Deal Flow
During the year the Planned Exit Shares Fund made the following new and follow-on investments:

One new investment was made during the year. As part of a £360,000 funding round in March 2013, the Planned Exit Shares Fund invested £180,000 in Industrial Efficiency Limited, an energy efficiency investment.

Follow-on funding

Company	£
DCG Group Limited	30,982
Trilogy Communications Limited	135,864
Total	166,846

The Planned Exit Shares Fund had cash and liquid resources of £88,000 at 31 December 2013, which had increased to £123,000 at the time of writing. The Planned Exit Shares Fund is considered fully invested and its investments generate a running yield, which is utilised in the payment of expenses and dividends every year.

iv. Investment Gains & Losses
There were no realised gains or losses during the year.

v. Running Costs
The annual management fee of the Planned Exit Shares Fund is 1.0%. During the year the management fees totalled £57,000, of which £14,000 was charged to the revenue account and £43,000 was changed to the capital account. The total expense ratio of the Planned Exit Shares Fund, for the year ended 31 December 2013 was 2.0%, which compares very favourably with its VCT peer group.

vi. Planned Exit Share Dividends
An interim dividend of 5.0p per Planned Exit Share was paid on 25 October 2013. The shares were quoted ex-dividend on 9 October 2013 and the record date for payment was 11 October 2013.

vii. Planned Exit Shares Issues & Buybacks
There were no Planned Exit Shares issued during the year.
During the year under review 27,302 Planned Exit Shares were repurchased for cancellation at a cost of £25,000 at an average discount to NAV of 8.3%. The Board and the Manager consider share buybacks to be an effective way to manage the share price discount to NAV at which the Planned Exit Shares trade.

viii Summary Post Year End Update

As part of a small round of investment to acquire an existing Shareholder's shares, an investment of £1,000 was made into DCG Group.

Outlook - Planned Exit Shares Fund
The Planned Exit Shares Fund is considered fully invested and Foresight Group is working hard to manage the portfolio with a view to achieving the fund's original objective of returning 110p per Planned Exit Share to investors between the fifth and sixth anniversary of the final allotment i.e. by no later than 30 June 2016.

Performance - Infrastructure Shares Fund
i. Movement in Net Asset Value of the Infrastructure Shares Fund
During the year, the net assets of the Infrastructure Shares Fund decreased to £15,229,000 at 31 December 2013 from £15,754,000 at 31 December 2012.

Of this net decrease, the Infrastructure Shares Fund paid out dividends totalling £416,000 and management fees and other expenses of £385,000. Income for the year totalled £550,000.

ii. Movement in Net Asset Value per share of the Infrastructure Shares Fund

During the year, the net asset value of the Infrastructure Shares Fund decreased to 91.5p per share at 31 December 2013 from 94.6p per Share at 31 December 2012.

iii. Cash & Deal Flow

During the year the Infrastructure Shares Fund made the following new investments:

Company £

Durham Infrastructure 5 Limited	1,000,000
Norwich Infrastructure 4 Limited	1,000,000
Criterion Healthcare Holdings Limited	1,709,074
Lochgilphead Healthcare Holdings Limited	1,693,367
Stobhill Healthcare Facilities (Holdings) Limited	1,493,247
Wharfdale SPV (Holdings) Limited	677,947
Total	7,573,635

The Infrastructure Shares Fund had cash and liquid resources of £154,000 at 31 December 2013, which had increased to £1.6 million at the time of writing. The Infrastructure Shares Fund is currently still in its investment phase and expects to utilise its cash by making several new investments in the current year.

iv. Investment Gains & Losses
There were no realised gains or losses during the year.

v. Running Costs
The annual management fee of the Infrastructure Shares fund is 1.75%. During the year the management fees totalled £276,000, of which £69,000 was charged to the revenue account and £207,000 was changed to the capital account. The total expense ratio of the Infrastructure Shares Fund, for the year ended 31 December 2013 was 2.5%, which compares very favourably with its VCT peer group.

vi. Infrastructure Share Dividends
An interim dividend of 2.5p per Infrastructure Share was paid on 20 December 2013. The shares were quoted ex-dividend on 11 December 2013 and the record date for payment was 13 December 2013.

vii. Infrastructure Shares Issues & Buybacks
There were no Infrastructure Shares issued or bought back during the year.

viii. Summary Post Year End Update
Following the year end, a total of £1,719,000 was received from four infrastructure investments and this will be used to acquire new, qualifying infrastructure investments including solar infrastructure investments, as previously communicated to Shareholders.

Outlook - Infrastructure Shares Fund
As previously reported, over the next few months it is expected that the Infrastructure portfolio will become fully invested in appropriate qualifying investments and this will include several significant new investments in solar infrastructure.

VCT legislation
HM Treasury has recently undertaken a consultation exercise in relation to "Enhanced Share Buy Backs" and the likely outcome is that it will not be possible to make such offers to Shareholders in future. The Manager has participated in discussions regarding the consequent legislation that the Government is proposing, with the aim of identifying and reducing the impact of any unintended consequences of this legislation that might adversely affect VCT's.

In addition, the European Commission is currently undertaking a review of the state aid regulations including the risk capital guidelines under which VCT's are approved at the European level. The aim of the review is to set out a clear framework to allow member states to grant aid without the need for the European Commission to be involved. The Association of Investment Companies ("AIC") of which the Company is a member is involved in consideration of the rules and the Manager has provided data and case studies to assist in production of a suitable submission.

Management Arrangements
The Board has considered the impact on the Company of an EU directive regulating Alternative Investment Fund Managers which applies to most UK investment funds including the Company. To minimise the regulatory cost of compliance with this legislation the Board has decided that the Company will register directly with HM Treasury as permitted by the rules. This will not affect the current arrangements with the Manager which will continue to report to the
Board and manage the Company's investments on a discretionary basis.

Annual General Meeting
The Company's Annual General Meeting will take place on 29 May 2014 at 12pm. I look forward to welcoming you to the Meeting, which will be held at the offices of Foresight Group in London. Details can be found on page 71.

Outlook
The Board is encouraged by the pickup in the UK economy in the second half of 2013. We are however conscious that there remains much to be done to place the UK economy on a sound footing, with public borrowing under proper control, and that many of our major export markets, particularly in Europe, continue to face great uncertainties.

The effect of the improvement in the economy has been noticeable in the performance of the private equity part of the Ordinary Share and Planned Exit Share portfolios. Within the Ordinary Shares portfolio, a series of realisations at attractive prices and the success of the current fund-raising, has generated significant cash balances for that fund. This underpins the Board's dividend commitment to Shareholders and provides sufficient capacity for several new investments to be made over the medium term, which we anticipate will further enhance Shareholder returns.

John Gregory
Chairman
Telephone: 01296 682751
Email: j.greg@btconnect.com
28 April 2014

Strategic Report

Introduction
This Strategic Report, on pages 7 to 12, has been prepared in accordance with the requirements of Section 414 of the Companies Act 2006 and best practice. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with Section 172 of the Companies Act 2006.

Foresight VCT plc Ordinary Shares Fund
Foresight VCT plc originally raised £10.9 million through an Ordinary Share issue in the 1997/98 tax year. This fund currently has investments and assets totalling £31.1 million of which a significant portion is held in cash and is available to make new investments. The number of Ordinary Shares in issue at 31 December 2013 was 30,829,144.

Foresight VCT plc Planned Exit Shares fund
In the 2009/10 tax year, £12 million was raised through a linked offer for the Planned Exit Shares fund, the proceeds of which were divided equally between Foresight VCT plc and Foresight 2 VCT plc. These Funds comprise separate share classes within Foresight 2 VCT plc and Foresight VCT plc with their own investments and income streams.

The number of Planned Exit shares in the Company in issue at 31 December 2013 was 6,115,511.

Foresight VCT plc Infrastructure Shares fund
In the 2011/2012 tax year, £33 million was raised through a linked offer for the Infrastructure Shares fund, the proceeds of which were divided equally between Foresight VCT plc and Foresight 2 VCT plc. These Funds comprise separate share classes within Foresight VCT plc and Foresight 2 VCT plc with their own investments and income streams.

The number of Infrastructure Shares in the Company in issue at 31 December 2013 was 16,647,858.

Summary of the Investment Policy
The Company will target investments in UK unquoted companies which it believes will achieve the objective of producing attractive returns for shareholders.

Investment Objectives
Ordinary Shares fund
The investment objective of the Ordinary Shares fund is to provide private investors with attractive returns from a portfolio of investments in fast-growing unquoted companies in the United Kingdom.

Planned Exit Shares fund
The investment objective of the Planned Exit Shares fund is to combine greater security of capital than is normal within a VCT with the enhancement of investor returns created by the VCT tax benefits - income tax relief of 30% of the amount invested, and tax-free distribution of income and capital gains. The key objective of the Planned Exit Shares fund is to distribute a minimum of 110p per share through a combination of tax-free income, buy-backs and tender offers before the sixth anniversary of the closing date of the original offer.

Infrastructure Shares fund
The investment objective of the Infrastructure Shares fund is to invest in companies which own and operate essential assets and services which enjoy long-term contracts with strong counterparties or government concessions. To ensure VCT qualification, Foresight Group will focus on companies where the provision of services is the primary activity and which generate long-term contractual revenues, thereby facilitating the payment of regular predictable dividends to investors.

Performance and Key Performance Indicators (KPIs)
The Board expects the Manager to deliver a performance which meets the objectives of the three classes of shares. The KPIs covering these objectives are net asset value performance and dividends paid, which, when combined, give net asset value total return. Additional key performance indicators reviewed by the Board include the discount of the share price relative to the net asset value and total expenses as a proportion of shareholders funds.

A record of some of these indicators is contained on the following page. The total expense ratio in the period was 2.5%. Share buy-backs, have been completed at discounts ranging from 8.3% to 14.4%. The level of these KPIs are comparable with the wider VCT marketplace based on independently published information.

A review of the Company's performance during the financial period, the position of the Company at the period end and the outlook for the coming year is contained within the Manager's Report. The Board assesses the performance of the Manager in meeting the Company's objective against the primary KPIs highlighted above.

Clearly, in the Ordinary Share fund, some investments in unquoted companies at an early stage of their development may disappoint. Investing the funds raised in high growth companies, however, with the potential to become strong performers within their respective fields creates an opportunity for enhanced returns to shareholders. The growth of this type of company is, however, largely dependent on the continuing level of expenditure on relevant products and services by larger corporations.

31 December 2013 31 December 2012

	Ordinary	Planned Exit	Infrastructure	Ordinary	Planned Exit	Infrastructure
	Shares	Shares	Shares	Shares	Shares	Shares
Net asset value per share	101.0p	82.5p	91.5p	111.3p	100.0p	94.6p
Net asset value total return	214.6p	95.5p	94.0p	216.6p	108.0p	94.6p

		Planned			Planned
	Ordinary	Exit	Infrastructure	Ordinary	Exit	Infrastructure
	Shares	Shares	Shares	Shares	Shares	Shares
Share price	93.0p	87.0p	97.5p	103.5p	84.4p	100.0p
Share price total return	206.6p	100.0p	100.0p	208.8p	92.4p	100.0p

		Planned			Planned
Ordinary		Exit	Infrastructure	Ordinary	Exit	Infrastructure
Shares		Shares	Shares	Shares	Shares	Shares

Dividends paid*	176.0p	13.0p	2.5p	174.1p	8.0p	-
Dividends paid in the year	5.0p	5.0p	2.5p	7.5p	5.0p	-
Dividend yield %	5.4	5.7	2.6	7.2	5.9	-
* From inception to 31 December 2013

Ordinary Shares fund
Discount to NAV at 31 December 2013	7.9%
Average discount on buybacks	10.3%
Shares bought back during the year under review	707,552
Decrease in net asset value during year (after adding back 5.0p dividend)	4.8%
Total expense ratio	2.6%
Planned Exit Shares fund
Premium to NAV at 31 December 2013	5.5%
Average discount on buybacks	8.3%
Shares bought back during the year under review	27,302
Decrease in net asset value during year (after adding back 5.0p dividend)	12.5%
Total expense ratio	2.0%
Infrastructure Shares fund
Premium to NAV at 31 December 2013	6.6%
Decrease in net asset value during year (after adding back 2.5p dividend)	0.6%
Total expense ratio	2.5%

Strategies for achieving objectives
Investment Policy
The Company will target UK unquoted companies which it believes will achieve the objective of producing attractive returns for shareholders.

Investment securities
The Company invests in a range of securities including, but not limited to, ordinary and preference shares, loan stock, convertible securities, and fixed-interest securities as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stock, while AiM investments are primarily held in ordinary shares. Pending investment in unquoted or AiM listed securities, cash is primarily held in interest bearing money market open ended investment companies (OEICs) as well as in a range of non-qualifying companies. Non Qualifying Investments may include holdings in money market instruments, short-dated bonds, unit trusts, OEICs, structured products, guarantees to banks or third parties providing loans or other investment to investee companies and other assets where Foresight Group believes that the risk/return portfolio is consistent with the overall investment objectives of the portfolio.

UK companies
Investments are primarily made in companies which are substantially based in the UK, although many will trade overseas. The companies in which investments are made must have no more than £7 million of gross assets at the time of investment (or £15 million depending on when the funds being invested were raised to be classed as a VCT qualifying holding).

Asset mix
The Company aims to be significantly invested in growth businesses subject always to the quality of investment opportunities and the timing of realisations. Any uninvested funds are held in cash, interest bearing securities and a range of non-qualifying investments. It is intended that the significant majority (no less than 70%) of any funds raised by the Company will ultimately be invested in VCT qualifying investments.

Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within different industry sectors using a mixture of securities. The maximum amount invested in any one company including any guarantees to banks or third parties providing loans or other investments, is limited to 15% of the portfolio at the time of investment.

Investment style
Investments are selected in the expectation that value will be enhanced by the application of private equity disciplines, including an active management style for unquoted companies through the placement of an investor director to investee company boards.

Borrowing powers
The Company has a borrowing limit of an amount not exceeding an amount equal to the adjusted capital and reserves (being the aggregate of the amount paid up on the issued share capital of the Company and the amount standing to the credit of its reserves). Whilst the Company does not currently borrow, its policy allows it to do so.

Co-investment
The Company aims to invest in larger, more mature, unquoted and AiM companies and, in order to achieve this, often invests alongside other Foresight funds. Consequently, at the time of initial investment, the combined investment can currently total up to a maximum of £5.0 million per annum for unquoted and for AIM investments.

VCT regulation
The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HM Revenue & Customs. Amongst other conditions, the Company may not invest in a single company more than 15% of its gross assets at the time of making any investment and must have at least 70% by value of its investments throughout the period in shares or securities in qualifying holdings, of which 30% by value in aggregate must be in ordinary shares which carry no preferential rights (although only 10% of any individual investment needs to be in the ordinary shares of that Company).

Management
The Board has engaged Foresight Group as discretionary investment manager. Foresight Fund Managers Limited also provides or procures the provision of company secretarial, administration and custodian services to the Company. Foresight Group prefers to take a lead role in the companies in which it invests. Larger investments may be syndicated with other investing institutions, or strategic partners with similar investment criteria. In considering a prospective investment in a company, particular regard will be paid to:

Ordinary Shares fund
· Evidence of high-margin products or services capable of addressing
fast-growing markets;
· The company's ability to sustain a competitive advantage;
· The strength of the management team;
· The existence of proprietary technology;
· The company's prospects of being sold or achieving a flotation within three to five years.

Planned Exit Shares fund
· Security of income and capital;
· Asset backing;
· The company's ability to provide an attractive yield for the fund;
· The prospects of achieving an exit within five years;
· The strength of the management team.

Infrastructure Shares fund
· Long-term contracts with Governmental or strong counter-parties;
· Protection from competition;
· Inflation-linked revenues over 10-50 year contract durations.

Environmental, Human Rights, Employee, Social and Community Issues
Several investments have been made in clean energy and environmental infrastructure projects which have clear environmental benefits.
The Board recognises the requirement under Section 414 of the Act to provide information about environmental matters (including the impact of the Company's business on the environment), employee, human rights, social and community issues; including information about any policies it has in relation to these matters and effectiveness of these policies. As the Company has no employees or policies in these matters this requirement does not apply.

Gender diversity
The Board currently comprises three male Directors. The Board is, however, conscious of the need for diversity and will consider both male and female candidates when appointing new Directors.
The Manager has an equal opportunities policy and currently employs 45 men and 22 women.

Dividend policy
A proportion of realised gains will normally be retained for reinvestment and to meet future costs. Subject to this, the Company will endeavour to maintain a flow of dividend payments of the order of 5p per share across all share classes, although a greater or lesser sum may be paid in any year. It is the intention to maximise the Company's tax-free income available to investors from a combination of dividends and interest received on investments and the distribution of capital gains arising from trade sales or flotations.

Purchase of own shares
It is the Company's policy, subject to adequate cash availability, to consider repurchasing shares when they become available in order to help provide liquidity to the market in the Company's shares.

Principal risks, risk management and regulatory environment
The Board believes that the principal risks faced by the Company are:
· Economic risk
· Loss of approval as a Venture Capital Trust
· Investment and strategic
· Regulatory
· Reputational
· Operational
· Financial
· Market risk
· Liquidity risk
Further detail on these principal risks is given in note 15 on page 62.
The Board regularly reviews the principal risks and uncertainties facing the Company which the Board and the Manager have identified and the Board sets out delegated controls designed to manage those risks and uncertainties. Key risks within investment strategy are managed by the Board through a defined investment policy, with guidelines and restrictions, and by the process of oversight at each Board meeting. Operational disruption, accounting and legal risks are also covered at least annually and regulatory compliance is reviewed at each Board meeting.

The Directors have adopted a framework of internal controls which is designed to monitor the principal risks and uncertainties facing the Company and to provide a monitoring system to enable the Directors to mitigate these risks as far as possible. Details of the Company's internal controls are contained in the Corporate Governance and Internal Control sections.

Performance-related incentives
Ordinary Shares fund
Foresight is entitled to a performance incentive payout equal to 15% of the dividends paid to Ordinary Shareholders subject to the Net Asset Value plus cumulative dividends paid ('Total Return') per Ordinary Share exceeding 180.4p per Ordinary Share both immediately before and immediately after the performance incentive fee is paid.
The total return at 31 December 2013 was 148.7p. This is after rebasing dividends and net asset value.

Planned Exit Shares fund
Foresight Group has a performance incentive which is conditional on distributions of a minimum of 110.0p per Planned Exit Share issued under the offer and remaining in issue at the date of calculation. The performance incentive is equivalent to the next 15.0p of distributions above this hurdle of 110.0p plus 20% of any distributions above 125.0p. The performance incentive may be satisfied in cash or by the issue of new Planned Exit Shares to Foresight Group, at the discretion of the Board. No performance incentive fees have been earned or paid during the year.
The total return at 31 December 2013 was 95.5p

Infrastructure Shares fund
Foresight Group has a performance incentive fee equal in value to 15% of Distributions made to the holders of Infrastructure Shares in excess of 100.0p per Infrastructure Share issued under the Offer and remaining in issue at the date of calculation. No payment of the performance incentive fee will be made to Foresight Group until Distributions exceed 100.0p per Infrastructure Share. Performance incentive fees may, at the discretion of the Board, be satisfied wholly or partly in cash or by the issue of new Infrastructure Shares. No performance incentive fees have been earned or paid during the year.
The total return at 31 December 2013 was 94.0p

Valuation Policy
Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines (December 2012) developed by the British Venture Capital Association and other organisations. Through these guidelines, investments are valued as defined at 'fair value'. Ordinarily, unquoted investments will be valued at cost for a limited period following the date of acquisition, being the most suitable approximation of fair value unless there is an impairment or significant accretion in value during the period. Quoted investments and investments traded on AiM and ISDX Growth Market (formerly PLUS) are valued at the bid price as at 31 December 2013. The portfolio valuations are prepared by Foresight Group, reviewed and approved by the Board quarterly and subject to review by the auditors annually.

VCT Tax Benefit for Shareholders
To obtain VCT tax reliefs on subscriptions up to £200,000 per annum, a VCT investor must be a 'qualifying' individual over the age of 18 with UK taxable income. The tax reliefs for subscriptions since 6 April 2006 are:
· Income tax relief of 30% on subscription for new shares, which is forfeit by shareholders if the shares are not held for more than five years;
· VCT dividends (including capital distributions of realised gains on investments) are not subject to income tax in the hands of qualifying holders;
· Capital gains on disposal of VCT shares are tax-free, whenever the disposal occurs.

Venture Capital Trust Status
Foresight VCT plc has been granted approval as a Venture Capital Trust (VCT) under S274-S280A of the Income Tax Act 2007 for the year ended 31 December 2012. The next complete review will be carried out for the year ended 31 December 2013. It is intended that the business of the Company be carried on so as to maintain its VCT status.

The Directors have managed, and continue to manage, the business in order to comply with the legislation applicable to VCTs. The Board has appointed SGH Martineau to monitor and provide continuing advice in respect of the Company's compliance with applicable VCT legislation and regulation. In addition, the Board has appointed KPMG LLP as taxation adviser to the Company to provide further independent assurance of compliance with venture capital tax legislation and to provide guidance on changes in taxation legislation affecting Foresight VCT plc. The Company has appointed KPMG LLP to prepare and submit the relevant annual tax returns. As at 31 December 2013 the Company had 78.0% of its funds in such VCT qualifying holdings.

Future Strategy
The Board and the Manager believe that the strategy of focusing on traditional private equity investments is in the best interests of Ordinary Shareholders and the historical information reproduced in this report is evidence of positive recent performance in this area.
Furthermore, the Board expects that the transition of the Infrastructure Shares' fund from solely PFI investments to a mix of PFI, solar infrastructure and other infrastructure investments will enable that fund to achieve its original objectives.
The Company's performance relative to its peer group and benchmarks will depend on the Manager's ability to allocate the Company's assets effectively, make successful investments and manage its liquidity appropriately.

John Gregory
Director

28 April 2014

Manager's Report

Manager's Commentary
As reported in the interim statement, there was a notable change in economic sentiment in mid 2013 which has continued to date, with further signs of improving trading conditions across the portfolio and some companies achieving record results and growing order books. After several years of considerable macroeconomic uncertainties and weak demand in a recessionary environment, we now expect the economic climate and business confidence in the UK to improve gradually, as evidenced by the continuing strength of the stock market and high level of M & A activity. Despite these positive signs, significant economic uncertainties still remain, particularly in Europe where demand is still weak, in contrast to the more promising outlook in the USA, and this gradual improvement in sentiment could be halted by external macroeconomic factors.

Having made a number of secondary PFI investments, the Infrastructure Share class is continuing to look for more such investments but increasing competition for these assets has reduced yields substantially. Although the rate of investment to date is behind original expectations, Foresight Group expects to have fully invested the fund within the next few months and negotiations are currently well advanced to make future investments in the wider infrastructure sector. Following the dividend of 5.0p per Ordinary Share paid in June 2013, a further interim dividend of 10.0p per Ordinary Share was paid on 14 March 2014. This increase in dividend from the normal target of 5.0p per Ordinary Share reflects recent successful realisations, most notably the sale of Alaric Systems for £7.1 million (including amounts in escrow) in December 2013, over five times the original cost of investment.

Having realised a significant number of investments over recent years, we continue to focus on achieving profitable realisations from the portfolio to facilitate the payment of further dividends and make new investments.

An interim dividend of 5.0p per Planned Exit Share was paid on 25 October 2013 and an interim dividend of 2.5p per Infrastructure Share was paid on 11 December 2013.

Progress on the Current £20 million Ordinary Share Fund Raising
As indicated in the interim statement, the Board launched a full prospectus on 26 September 2013 to raise up to £20 million by the issue of new Ordinary Shares. The securities note for this issue and a related application form were sent to all existing shareholders in each of the Foresight VCTs. The issue has been well received by both new and existing investors, with over £11 million being raised to date.

Foresight are currently experiencing strong deal flow, seeing an increasing number of high quality private equity investment opportunities, examples being Aerospace Tooling, Fire and Air Services and Procam Television referred to below. Foresight believe that, with the UK and US economies showing signs of continuing recovery, investing in growing, well managed private companies in this phase of the economic cycle should, based on past experience, generate attractive returns over the long term. With realistic pricing expectations being expected by companies and selling shareholders, limited funding available from banks and relatively lower competition for deals, Foresight believe that attractive deals are currently available on favourable terms and will utilise the funds currently being raised to take advantage of this window of opportunity.

Portfolio Review: Ordinary Shares fund

1. New Investments

Company	£
Aerospace Tooling Corporation Limited	1,500,000
Fire and Air Services Limited	1,500,000
Procam Television Holdings Limited	800,000
Total	3,800,000

2. Follow-on funding (including capitalised interest)

Company	£
Abacuswood Limited	120,000
AlwaysOn Group	75,075
Autologic Diagnostics Holdings Limited*	73,305
Biofortuna Limited	99,095
DCG Group Limited	219,933
Flowrite Refrigeration Holdings Limited*	19,288
Trilogy Communications Limited	287,165
Withion Power Limited	136,000
Total	1,029,861

*includes capitalised interest

3. Realisations

· Proceeds of £6,014,417 were received in December from the sale of the investment in Alaric Systems to NCR Corporation for £51.6 million in total, representing more than five times original cost. Loan repayments (£66,454) and redemption premia (£199,361) totalling £265,815 were also received from Alaric Systems during the year.

Leisure Efficiency II Limited, Leisure Efficiency III Limited and Wholesale Efficiency II Limited repaid £675,150, £2,000,000 and £1,000,000 respectively to provide funds for the new investments in Aerospace Tooling Corporation Limited, Fire and Air Services Limited and Procam Television Holdings Limited.

Following a public takeover offer from Espial Group Inc, the entire investment in Aim listed ANT plc was sold in February, realising £407,252. The entire investment in AiM listed Corero Network Security plc and the remaining investment in AiM listed Sarantel Group were also sold, realising £191,110 and £13,831 respectively.
Following a notably successful first 18 months trading after its Foresight funded MBO, Flowrite repaid a loan of £314,484, including rolled up interest, representing some 75% of original cost of investment.
Deferred consideration and further proceeds of £256,910 were received from AppDNA and £89,404 was recovered from the administration of i-plas Group.

4. Material Provisions to a level below cost in the year

Company	£
Abacuswood Limited	367,194
Aigis Blast Protection Limited	100,442
alwaysOn Limited	291,107
iCore Limited	175,000
Trilogy Communications Limited	764,977
Withion Power Limited	605,586
Total	2,304,306

5. Performance Summary

The net asset value decreased by 4.8% to 101.0p, after allowing for the 5.0p dividend, from 111.3p as at 31 December 2012.

During the year, several of the portfolio companies in the Ordinary Shares fund continued to perform strongly, principally Aquasium Technology, Autologic Diagnostics, Blackstar Amplification and Flowrite Refrigeration, their aggregate valuations increasing by £0.8 million. The investment in Alaric Systems was sold in December 2013 to NCR Corporation for £7.1 million (including money held in escrow), helping to facilitate the payment of a dividend of 10p per Ordinary Share on 14 March 2014. This has been counterbalanced by provisions made against two environmental investments, Abacuswood and Withion Power, as well as Trilogy Communications.

No new environmental investments have been made since 2010 and the Board and Investment Manager have for some years agreed to focus solely on private equity investments. Reflecting better risk adjusted returns available from private equity investments such as MBOs, MBIs, shareholder recapitalisations and growth capital, the Investment Manager has for sometime been focusing solely on private equity investments. After making the provisions against the above two environmental investments, Closed Loop Recycling is now the only material remaining environmental investment (representing 5.6% of net assets). Following a successful £12.8 million fund raising to double its capacity to fulfil long term orders this company appears to be well placed for growth, although this continues to be dependant on a number of external factors. Consequently, the Board and Investment Manager believe that any further strong performance in the private equity portfolio of the Ordinary Shares fund will no longer be offset by further material environmental investment write-downs.

Several of the portfolio companies are displaying strong order books and revenue and profit growth, giving grounds for cautious optimism about further value growth.

The M & A market continues to be active which augurs well for further realisations. Although the economic outlook is definitely improving, the recovery is still considered fragile and could easily be stymied by changes in macroeconomic fundamentals. With cash from realisations and the proceeds from the current £20 million fund raising, Foresight will be in a good position to take advantage of its current strong deal flow and is now actively pursuing new investment opportunities.

Portfolio Review: Planned Exit Shares fund

1. New Investments

One new investment was made during the year. As part of a £360,000 funding round in March 2013, the Planned Exit Shares fund invested £180,000 in Industrial Efficiency Limited, an energy efficiency investment.

2. Follow-on funding

Company	£
DCG Group Limited	30,9982
Trilogy Communications Limited	135,864
Total	166,846

3. Realisations

A loan of £50,000 was repaid by Withion Power.
Loans totalling £115,000 were repaid by Leisure Efficiency.
A loan of £25,000 was repaid by Industrial Efficiency.

4. Material Provisions to a level below cost in the year

Company	£
Industrial Engineering Plastics Limited	813,757
Withion Power Limited	223,952
Total	1,037,709

5. Performance Summary

As referred to in the interim statement, the performance of the Planned Exit Shares fund during the year was affected by both positive and negative factors, the latter outweighing the former, resulting in the net asset value per Planned Exit Share decreasing by 12.5% to 82.5p per share from 100.0p as at 31 December 2012, after taking into account the payment of a 5.0p dividend in October 2013
On the positive side, Channel Safety Systems, DCG Group, Industrial Efficiency and Leisure Efficiency all continue to perform satisfactorily. Channel Safety Systems is currently trading at record levels while the investment in DCG Group benefitted from the purchase of further shares and the crystallisation of a loan redemption premium.
The Planned Exit Shares fund is now fully invested in a range of established businesses. Notwithstanding the currently tough trading conditions being experienced by Industrial Engineering Plastics and Trilogy Communications, the encouraging prospects at Channel Safety Systems, DCG Group, Leisure Efficiency, Industrial Efficiency and Closed Loop Recycling following its successful raising of £12.8 million of loans to double its capacity, give comfort that the Planned Exit Shares fund's return objectives can be met. Foresight is actively monitoring the performance and likely returns from each investment to ensure that sufficient interest and cash are generated to meet the fund investors' running yield expectations and is working on meeting the planned capital repayment profile.
Portfolio Review: Infrastructure Shares fund

1. New Investments

Company £

Durham Infrastructure 5 Limited	1,000,000
Norwich Infrastructure 4 Limited	1,000,000
Criterion Healthcare Holdings Limited	1,709,074
Lochgilphead Healthcare (Holdings) Limited	1,693,367
Stobhill Healthcare Facilities (Holdings) Limited	1,493,247
Wharfdale SPV (Holdings) Limited	677,947
Total	7,573,635

2. Realisations

During the year, £6,300,000 was received from limited companies preparing to trade. Stirling Gateway also repaid £8,625 in loans.

3. Performance Summary
By the closing date of 18 July 2012, a total of £33,295,716 had been raised for the Infrastructure Shares fund jointly with Foresight 2 VCT's Infrastructure Shares fund (i.e. c. £16.6 million for each fund). The strategy of both funds is to invest in infrastructure assets on a pari passu basis, in the secondary PFI, energy efficiency and onsite power generation markets.

Although the rate of investment to date is behind original expectations, Foresight Group expects to have fully invested the fund within the next few months. In accordance with the original investment policy, these investments may be made within the wider infrastructure sector including solar investments or energy related investments where the strength of the investment counterparty will be a priority.

The overall yield on the infrastructure portfolio has, due to market competition within the PFI sector, been negatively impacted over the last 12 months but this is being addressed with the wider investment focus described above. The Board anticipates paying a total of 5p per share in dividends on the infrastructure shares by July 2014 as originally targeted but it is possible that these dividends may come out of a combination of both revenue and capital reserves.

The two funds have acquired shareholdings in eight operating PFI companies, comprising four in the education sector and four in the health sector. Across the eight investments in the portfolio, the Infrastructure Shares fund manages 13 individual schools, three acute hospitals and one forensic psychiatry unit. In terms of geographic diversification, four of the investments are located in Scotland, three in England and one in Northern Ireland. All of the projects are contracted under UK PFI standard form and the counterparties are various Local Authorities and NHS Trusts. All of the investments have strong operating records and have remaining contract terms ranging from 13 to 28 years. They also have project finance debt in place with interest rate hedging contracts for the duration of the concession removing any refinancing or interest rate risks. All of the companies have long term facilities management subcontracts in place which pass all operational risks through to blue chip companies that are well established in the UK PFI market. Strong progress has been made towards investing the majority of the Infrastructure Shares fund in secondary PFI investments with 60% invested to date, although the proportion of VCT qualifying investments and yield profile are below the levels targeted. Secondary PFI yields have fallen significantly during the last 12 to 18 months owing to increased competition from four new PFI infrastructure funds and various tap issues from established funds, driven by increasing investor appetite for PFI investments. Foresight experienced first hand these falling yields when the Infrastructure Shares fund was out-bid during competitive bidding processes. Although the yield profile of the current PFI investments is lower than planned, Foresight expects to invest the balance of the fund to generate superior yields in order to compensate for this reduction.

Although advance VCT clearances have been received from HMRC in respect of four of the portfolio investments, only one has been executed as a VCT qualifying investment because the co-shareholders in three of those companies would not co-operate in entering into a VCT qualifying structure. The funds raised via the Infrastructure Share class will fall within the Company's qualifying holdings test from December 2014 and the intention is to increase the VCT qualifying proportion of the Infrastructure Share class to achieve 70% by this date. Prior to this date, the non-qualifying assets will be refinanced with a component of third party shareholder debt to reduce the VCT's non-qualifying holdings and the refinancing proceeds will subsequently be used to invest in either additional qualifying PFI assets or qualifying solar infrastructure assets in accordance with the investment policy.
Portfolio Company Highlights
The new Abacuswood management team, led by Julian Tranter, an experienced CEO, planned to double plant capacity at Bridgend and ultimately expand into the growing distributed energy supply markets by establishing ESCos (Energy Supply Companies). The company continued to incur small EBITDA losses at the Bridgend plant during 2013. Although demand for the plant's high quality wood pellets continue to exceed supply, overcapacity in the UK wood pellet market adversely impacted the selling price, with a consequent pressure on margins. Following protracted discussions with potential funders, the Company revised its business plan, reduced its overheads further and re-entered into discussions with a number of potential funders to raise £5.5 million to double wood pellet production capacity to 50,000tpa and reduce its energy costs by installing a new pellet fuelled boiler, thereby benefitting from additional revenues under the Government's Renewable Heat Incentive. The key risk was the timely availability of this required funding but ultimately a funding round could not be concluded. The Foresight VCTs subsequently decided not to provide any further support to maintain operations and so the company was placed into administration on 17 May 2013, with the prospect of only limited recoveries, necessitating a provision of £367,194 being made against the cost of the investment. Held in the Ordinary Share fund.

In June, the Ordinary Shares fund invested £1.5 million alongside other Foresight VCTs in a £3.5 million shareholder recapitalisation of Dundee based Aerospace Tooling Limited, a well established specialist engineering company providing repair, refurbishment and remanufacturing services to large international companies for components in high-specification aerospace and turbine engines. The company was founded in 2007 by the former CEO, John Seaton, who, following the transaction, has assumed the role of Executive Chairman. John Green, formerly General Manager of the Dundee facility, became Operations Director, alongside a newly appointed Finance Director and Business Development Director. With a heavy focus on quality assurance, the company enjoys good relationships with companies serving the aerospace, military, marine and industrial markets. A number of recent orders have underpinned growth, profitability and cash generation in the current financial year, such that turnover is now expected to double and profits to increase significantly, justifying an increase in valuation of £847,709. Held in the Ordinary Share fund.

Aigis Blast Protection, a small Derby based technology company specialising in developing blast absorption materials for homeland security applications such as bomb containment units, munitions boxes and anti-mine boots, was placed into administration in December 2013 due to poor, erratic order intake and consequent liquidity problems. A full provision of £100,442 has been made against the remaining cost of investment. Held in the Ordinary Share fund.

Alaric Systems, which develops and sells credit and debit card authorisation and card anti fraud software to major financial institutions and retailers worldwide, achieved an audited PBIT of £1.3 million on sales of £9.8 million for the year to 31 March 2013. Having won several significant orders during 2013 and with a number of large contracts in prospect, an exit process was initiated which resulted in a sale of the company to NCR Corporation for £51.6 million in December 2013. In total, the Ordinary Shares fund received £6.01 million at completion with a further £1.12 million held in escrow, (to be released in tranches over the next four years), generating a return of just over 5 times original cost of investment. Loan repayments (£66,454) and redemption premia (£199,361) totalling £265,815 were also received from Alaric Systems during the year. Held in the Ordinary Share fund.

Following a change of management at alwaysON Group, the turnround of this VPN/VOIP service provider made progress during the year to 30 June 2012, achieving a break even operating profit on sales of £2.7 million. For the year to June 2013, an EBITDA loss of £388k was incurred on sales of £2.9 million, reflecting considerable investment in upgrading the underlying network and recruiting additional staff for the network and applications teams. In August, £75,075 was invested as part of a £250,000 round alongside other Foresight VCTs to fund the company's working capital requirements. Although good progress was made during 2013 in building a sales pipeline and, as one of only two Tier 1 Microsoft Lync partners in the UK, also developing channels to resell this product, conversion into orders proved to be slower than expected, resulting in continuing losses. These were compounded by a number of technical issues in late 2013/early 2014. Although a formal sale process was implemented, this proved to be inconclusive, and after the year end in February 2014, a merger proposal was accepted from DCG Group, another Foresight VCT investee company. Held in the Ordinary Share fund.

For the year to 31 December 2012, Aquasium Technology, after adjusting for the sale of EBTEC division which has been sold, achieved a NPBT of £608,000 on sales of £8 million reflecting continuing demand for CVE's smaller electron welding machines. Trading in the year to 31 December 2013 was stronger, reflecting a growing sales pipeline and orders from a wider customer base across a range of industries, generating a significant increase in profits. In June 2012, Aquasium's Massachusetts based engineering services subsidiary, Ebtec Corporation, was successfully sold to NASDAQ listed EDAC Technologies Corporation for $11 million, generating a 2.5 times return. Having invested a total of £1.93 million in Aquasium since 2001, the Company received £3,036,059 from the sale of Ebtec. During 2013, the company paid £518,345 in redemption premia and interest. The Company still holds 33% of Aquasium's equity and £666,667 of loans. With its partners, Aquasium is continuing its development of new electron beam technologies which are expected to have considerable commercial potential. Held in the Ordinary Share fund.

AtFutsal Group provides facilities for futsal, an increasingly popular type of indoor football with 30 million participants worldwide and the only type of indoor football recognised by the Football Association. The business has evolved so that its core focus is now on running education programmes for 16 to 18 year olds in conjunction with Football League clubs, educational establishments and training organisations. AtFutsal has developed its own education software platform so that it can provide a number of educational services previously outsourced. For the current student year which commenced in September 2013, the company registered some 1,200 students on its futsal related courses, nearly double the number in the previous student year. The educational activities are performing well, with plans to broaden the range of courses offered and increase the numbers of students overall. Although trading has improved at each of the three arenas, the Swindon and Leeds arenas continue to incur small losses. The company has reached near cash break even and management is focussed on developing new strategies for the educational activities while improving utilisation of the arenas to ensure that all are operating at cash break even or better. Held in the Ordinary Share fund.

Approximately 50% of the investment in Autologic Diagnostics was successfully sold in January 2012 in a £48 million secondary management buy-out funded by ISIS Equity Partners. The sale generated cash proceeds of £2.187 million for the Ordinary Shares fund (nearly 2.7 times original cost of £0.8 million). The Ordinary Shares fund has retained an ongoing investment of £1.486 million in a combination of equity and loan stock in the new buy-out company. In the year ended 31 December 2012, an operating profit of £6.0 million was achieved on sales of £17.2 million (£5.2 million on sales of £12.2 million in 2011). In 2013, the management team was strengthened, a new CEO being recruited together with new Operations and Marketing directors. The company underperformed slightly against the previous year, however, in large part reflecting a slowing in the sales of one-off hardware into the UK and European markets. The UK market is maturing and continental Europe was affected by a relative lack of sales focus. The USA continues to perform well, largely driven by a well-structured sales effort. As at 31 December 2013, the company had a healthy cash balance of more than £5 million. The new management team believes long term value creation will be driven by moving to a subscription based business model with a greater proportion of recurring revenues. Such a move would likely see revenues and earnings dip before growth recovers. In the long term the quality of earnings should improve, helping to drive value. During the year, interest of £73,305 deferred under the terms of the loan agreement with Autologic was capitalised. Held in the Ordinary Share fund.

Biofortuna, a molecular diagnostics business based in the Wirral, has developed unique expertise in the important area of enzyme stabilisation, effectively hi-tech freeze drying. Its first range of products, SSPGo, is a series of genetic compatibility tests for organ transplant recipients, although the application of the technology is extremely broad. Because of the company's stabilisation and freeze-drying technology, its products can be transported easily (in the post if needed) and stored at room temperature for up to two years. In August, a two tranche £1.3 million funding round to finance capital expenditure and working capital requirements was completed, of which £99,095 was invested by the Ordinary Share fund as part of the first £875,000 tranche. The company is making progress in a number of areas, including broadening its product range, increasing manufacturing capacity and improving internal processes. Following successful trials, Biofortuna has obtained FDA approval for its SSPGo genetic testing product range, a particularly important milestone enabling access to the USA market, the largest in the World. A recent manufacturing issue was successfully addressed but delayed output, which was caught up resulting in the highest monthly sales to date. The freeze-dried kit manufacturing service shows promise, with paid for feasibility studies and contract discussions occurring with a number of parties. Held in the Ordinary Share fund.

In July 2012, the Ordinary Shares fund invested £2.5 million in Northampton based Blackstar Amplification Holdings alongside £1 million from Foresight 4 VCT to finance a management buy-out of and provide growth capital to Blackstar Amplification Limited. The company was founded in 2004 by four senior members of the new product development team at Marshall Amplification to design and manufacture a range of innovative guitar amplifiers. Following commercial launch in 2007, sales grew rapidly, reflecting new product launches and entry into new markets, and a global brand was soon established. In its financial year to 30 April 2013, the company achieved an EBITDA of £394k on sales of £8.1 million ,nearly double that achieved in the previous year. Reflecting continuing investment in new product development and marketing initiatives, a similar performance is now expected for the current year to April 2014. Management is focused on product sell through in established markets while also increasing the company's presence in new, emerging markets, such as Asia and South
America. The company currently has a presence in over 35 countries Worldwide and its products are stocked in over 2,500 stores globally. Management is also focused on completing the portfolio of core amplifiers, whilst investigating brand extension into non-core markets. The new ID: Lite range of amplifiers, which will be the company's first products at the value end of the market, is expected to come to market in early 2014. Held in the Ordinary Share fund.

In December 2010, the Planned Exit Shares fund provided £565,000 to partially fund a management buy-in of long established Petersfield based Channel Safety Systems which designs and distributes fire safety systems and emergency lighting, as well as providing associated services. Having traded profitably through the recession, the company achieved an operating profit of over £420,000 on sales of £8.5 million for the year to 31 October 2012. Despite some temporary overseas supply problems in early 2013, the performance in the year to 31 October 2013 appreciably exceeded that achieved in 2012. The management team is implementing a growth strategy, including introducing new products such as energy efficient LED emergency lighting, a domestic fire detection range and is combining this with a more effective marketing programme. Held in the Planned Exit Share fund.

In January 2013, Closed Loop Recycling concluded a major new supply contract and new customer contracts worth £17 million per annum, as well as securing £12.8 million of loan finance (of which £6 million was provided by the Foresight Environmental Fund) to double production capacity at the Dagenham plant. Once the additional capacity is fully operational, annual revenues are expected to double, principally through these long-term supply contracts, and future profits are expected to increase substantially. Short term facilities provided by the current bankers, Allied Irish Bank, have been placed onto a term basis. In April 2013, the additional plastic waste sorting equipment was successfully installed whilst maintaining production, with an immediate beneficial impact on efficiency and output, resulting in record monthly turnover. In September 2013, additional production equipment was also successfully installed and commissioned, the first output from this additional capacity being produced in November 2013 and immediately meeting food grade standards. A number of continuing issues have arisen which are being addressed. These, together with temporary feedstock supply disruptions during December and January constrained planned growth in output and resulted in losses being incurred for longer than anticipated. The Company is expected to return to positive monthly

EBITDA shortly which will increase substantially when the final machine, a third extruder, is installed. Management is examining a number of avenues to improve profitability further. Held in the Ordinary Share and Planned Exit Share funds.

DCG Group designs, sources, implements and maintains data storage solutions for companies and provides them as a managed service. Managed service contracts typically run for an initial term of three years and the company has a high level of customer retention. The £750,000 initial investment from the Planned Exit Shares fund was used to re-finance existing loans and to provide additional working capital to enable the company to continue the growth of its managed services.

For the year to 31 March 2013, an EBITDA of £540,000 was achieved on sales of £5.6 million, most of which was recurring revenue. In response to increasing pricing pressure reflecting the general economic climate and reducing hardware costs, sales efforts have been increased and more channel partners are being recruited to resell DCG's services to their customers but this has yet to translate into improved orders. The company has invested in a new Support Operations Centre as well as additional sales resource. In January 2013, further shares representing 12.8% of the equity were acquired from other departing shareholders for £250,915 (£219,933 by the Ordinary Shares fund and £30,982 by the Planned Exit Shares fund). DCG Group is currently in the process of being merged with alwaysON Group. Held in the Ordinary Share and Planned Exit Share funds.

In August 2013, the Ordinary Shares fund invested £1.5 million alongside other Foresight VCTs in a £2.5 million shareholder recapitalisation of Stockport based Fire and Air Services, a hard facilities management provider which designs, installs and services air conditioning and fire sprinkler systems for retail, commercial and residential properties through a national network of engineers. The company focusses primarily on the retail sector and enjoys long term customer relationships and multi-year preferred supplier contracts with various blue chip high street retailers, giving good visibility on revenues. Two recent acquisitions give access to new customer relationships and the commercial real estate sector. Contracts have recently been entered into with two major retailers, further increasing the visibility of the sales pipeline. Held in the Ordinary Share fund.

In May 2012, the Ordinary Shares fund invested £492,500 in Flowrite Refrigeration Holdings alongside other Foresight VCTs to finance the £3.2 million management buyout of Flowrite Services Limited, a long established Maidstone based company which provides refrigeration and air conditioning maintenance and related services nationally, principally to leisure and commercial businesses such as hotels, clubs, pubs and restaurants. For the year to 31 October 2013, the company achieved an operating profit of £852,000 on sales of £7.9 million. Management has accelerated sales efforts, won a number of significant new contracts and customers and also reviewed several potential acquisitions with the aim of broadening its national coverage. In the year to 31 October 2013, reflecting a particularly busy summer, the company traded well ahead of budget and repaid much of the buyout bank debt finance. Interest of £31,785 was deferred under the terms of the loan agreement and capitalised to 31 October 2013, which was repaid prior to the year end. In December 2013, again reflecting continuing strong trading, Flowrite repaid a loan (£282,699), rolled up interest (£31,785) and accrued interest (£47,661) totalling £362,145, representing some 75% of original cost of investment, after only 18 months following the MBO. Held in the Ordinary Share fund.

iCore provides specialist IT consultancy services to major corporate clients in the UK and Europe to drive service improvements and maximise returns on IT investments. These services include strategic IT reviews, infrastructure design and management and outsourcing to project and business process management. Although the company achieved a net profit of £306,000 on sales of £6.5 million in the year ended 30 June 2013, revenues and profitability are dependent on a small number of contracts at any one time and also the availability of sufficient, experienced consultants. Because of these constraints which limit upside potential, agreement has been reached for the company to purchase the investment. Held by the Ordinary Shares fund.

As a part of a £360,000 funding round in March 2013, the Planned Exit Shares fund invested £180,000 in Industrial Efficiency, alongside £180,000 from the Foresight 2 Planned Exit Shares fund. The company installs and maintains proven and robust energy switching equipment, allowing end customers to reduce emissions and make significant cost savings. The company completed its first energy cost reduction project in September 2013, with a major building supplies manufacturer as its first client, and has received its first payment. Returns are based solely on the cost savings made and do not depend on government subsidies or Feed-in Tariffs. In October, a loan of £25,000 was repaid. Held in the Planned Exit Share fund.

In December 2011 and March 2012, the Planned Exit Shares fund provided a total of £875,000 by way of loans and equity to partially fund a management buy-in at Industrial Engineering Plastics. The company is a long established Liphook based plastics distributor and fabricator to a wide range of industries nationally, principally supplying ventilation and pipe fittings, plastic welding rods, hygienic wall cladding, plastic tanks and sheets. For the year ended 30 November 2012, with some 20 employees, the company achieved an EBITDA of £646,000 on sales of £4.9 million, slightly ahead of the previous year's performance. To replace the founder, a new Chief Executive was recruited and in early 2013, a new General Manager was also appointed. The team is focussing on improving sales, consolidation and operational efficiency. In the year to 30 November 2013 and currently, the company is experiencing more challenging conditions and lower profitability as a result of increased competition and pressure on margins but sales efforts have been consequently increased. Held in the Planned Exit Share fund.

As part of a £1.38 million funding round in January 2012, the Planned Exit fund invested £690,000 in Leisure Efficiency. The company installs and maintains proven energy efficiency equipment, including voltage optimisers and heat exchangers, in 34 David Lloyd Leisure ("DLL") sites across the UK. With a fixed life of seven years, the company will generate a strong yield over that period, after which it will be sold to DLL for a nominal value. Revenues are generated from taking a significant part of the value of the energy savings made by the equipment. The equipment is currently saving energy in excess of original projections and the company has already received several cash payments from DLL. On 30 September 2013, the company repaid loans of £115,000. Held in the Planned Exit Share fund.

In April 2013, the Ordinary Shares fund invested £800,000 alongside other Foresight VCTs in a £1.8 million round to finance a management buy-out of Procam Television Holdings. Procam Television Holdings is one of the UK's leading broadcast hire companies, supplying equipment and crews for UK location TV production to broadcasters, production companies and corporates for over 20 years. Headquartered in Battersea, London, with additional facilities in Manchester, Edinburgh and Glasgow, Procam Television Holdings employs 103 people and has supported shows including Made in Chelsea, ITV's Splash, Watch's The Incredible Mr Goodwin, BBC2's The Great British Sewing Bee, Derren Brown and The Great British Bake Off. It is a preferred supplier to BSkyB and an approved supplier for BBC and ITV. Over the last four years revenues have doubled, following the introduction of new camera formats. The management buy-out team was led by current Managing Director John Brennan while the former CEO of Carlton Television, Clive Jones, has been appointed as Chairman. Trading in the year to 31 December 2013 was ahead of the previous year. The company plans to gain greater market share by launching new facilities and services during the current year. In September 2013, Procam Television Holdings acquired one of its competitors, Hammerhead, with facilities in London, Manchester, Edinburgh and Glasgow, in order to broaden the customer base and national coverage and realise various synergistic benefits. This acquisition has now been successfully integrated and is expected to improve profits substantially. Held in the Ordinary Share fund.

Trilogy Communications achieved strong trading results in the two years to 29 February 2012, following a number of contract wins in the defence sector with partners such as Northrop Grumman and Raytheon. Trading in the year to 28 February 2013 was however adversely affected by the deferral of certain expected orders under long-term defence programmes, particularly from the US, reflecting uncertainties about reductions in US defence spending. Specified annual reductions in such spending are now in place (the so called 'Sequester'). In the year to 28 February 2014, Trilogy Communications initially incurred substantial trading losses but, following further cost reductions and a partial recovery in defence orders, the company is nearing breakeven EBITDA. A new Chief Operating Officer has recently been appointed, which has already resulted in a number of significant improvements. The broadcast division continues to

win orders and trade satisfactorily. As part of a phased £1.09 million funding round in June 2013 to meet the company's working capital requirements, the Ordinary Shares fund and the Planned Exit Shares fund advanced loans in three tranches totalling £287,165 and £135,864 respectively. To reflect the current trading performance, the valuation of the investment has been reduced by £764,977 in the Ordinary Shares fund and by £139,500 in the Planned Exit Shares fund. Held in the Ordinary Share and Planned Exit Share funds.

Withion Power successfully built and commissioned a second generation 0.5MW advanced gasification waste wood to energy plant in Derby, being the first of three planned phases to build ultimately a 3MW plant. Operating this small, first phase of the plant alone was always recognised as being uneconomic. The decision was taken to hibernate the plant until additional planned finance for much larger second and third phases could be raised from strategic partners and funders or, alternatively, redevelop the site but these all proved impossible. Although discussions were held with potential funders as well as with possible strategic partners to exploit this technology, no funding was forthcoming and the company was put into liquidation on 28 June 2013. To meet running costs such as insurance and security, short term loans totalling £136,000 were advanced during the first half of the year from the Ordinary Shares fund. A full provision of £605,586 has been made against the cost of this investment in the Ordinary Shares fund and a provision of £223,952 has been made against the cost of investment in the Planned Exit Shares fund as this fund has prior ranking security over certain surplus assets. The Planned Exit Shares fund has already been repaid a loan of £50,000 and a further £101,000 is expected to be repaid from sales of these assets.
Under the terms of the merger between the Ordinary Shares fund and the Keydata VCTs in February 2011, additional share consideration would have been due to former Keydata shareholders after September 2013 if the value of the merger assets (Withion Power) at 30 September 2013 had exceeded their value at the time of the merger. Following the company's liquidation, the value of the merger assets was nil at that date and no such share consideration was payable. Held in the Ordinary Share and Planned Exit Share funds.

David Hughes
Chief Investment Officer
Foresight Group
28 April 2014

The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority require certain disclosures in relation to the annual financial report, as follows:

Principal risks, risk management and regulatoryenvironment

The Board believes that the principal risks faced by the Company are:

Economic risk - events such as an economic recession and movement in interest rates could affect smaller companies' performance and valuations.
Loss of approval as a Venture Capital Trust - the Company must comply with Section 274 of the Income Tax Act 2007 which allows it to be exempted from corporation tax on investment gains. Any breach of these rules may lead to: the Company losing its approval as a VCT; qualifying shareholders who have not held their shares for the designated holding period having to repay the income tax relief they obtained; and future dividends paid by the Company becoming subject to tax in the hands of investors. The Company would also lose its exemption from corporation tax on capital gains.
Investment and strategic - inappropriate strategy, poor asset allocation or consistently weak stock selection leading to under performance and poor returns to shareholders.
Regulatory - the Company is required to comply with the Companies Acts 2006, the rules of the UK Listing Authority and United Kingdom Accounting Standards. Breach of any of these might lead to suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report.
Reputational - inadequate or failed controls might result in breaches of regulations or loss of shareholder trust.
Operational - failure of the Manager's or Company Secretary's accounting systems or disruption to its business leading to an inability to provide accurate reporting and monitoring.
Financial - inadequate controls might lead to misappropriation or loss of assets. Inappropriate accounting policies might lead to misreporting or breaches of regulations. Additional financial risks, including interest rate, credit, market price and currency, are detailed later in this note.
Market risk - investment in AIM traded, ISDX Growth Markets traded and unquoted companies by its nature involves a higher degree of risk than investment in companies traded on the main market. In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a small number of key individuals. In addition, the market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock.
Liquidity risk - the Company's investments, both unquoted and quoted, may be difficult to realise. Furthermore, the fact that a share is traded on AIM or ISDX Growth Markets does not guarantee that it can be realised. The spread between the buying and selling price of such shares may not reflect the price that any realisation is actually made.

The Board regularly reviews the principal risks and uncertainties facing the Company which the Board and the Manager have identified and the Board sets out delegated controls designed to manage those risks and uncertainties. Key risks within investment strategy are managed by the Board through a defined investment policy, with guidelines and restrictions, and by the process of oversight at each Board meeting. Operational disruption, accounting and legal risks are also covered at least annually and regulatory compliance is reviewed at each Board meeting. The Directors have adopted a robust framework of internal controls which is designed to monitor the principal risks and uncertainties facing the Company and provide a monitoring system to enable the Directors to mitigate these risks as far as possible. Details of the Company's internal controls are contained in the Corporate Governance and Internal Control sections.

Statement of Directors' Responsibilities

Statement of Directors' Responsibilities in respect of the Annual Report and Financial Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the directors must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the 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 the Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website (which is delegated to Foresight Group and incorporated into their website). Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of Directors' in respect of the AnnualFinancial Report

We confirm that to the best of our knowledge:

the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
the Chairman's Statement, Directors' Report and Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces; and
the report and accounts, taken as a whole, are fair, balanced, and understandable and provide the necessary information for shareholders to assess the company's performance, business model and strategy.

On behalf of the Board

John Gregory
Chairman
28 April 2014

Unaudited Non-Statutory Analysis of the Share Classes

Income Statements
for the year ended 31 December 2013

	Ordinary Shares Fund			Planned Exit Shares Fund			Infrastructure Shares Fund
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Realised losses on investments	-	(816)	(816)	-	-	-	-	-	-
Investment holding losses	-	(404)	(404)	-	(774)	(774)	-	-	-
Income	611	-	611	150	-	150	580	-	580
Investment management fees	(151)	(452)	(603)	(14)	(43)	(57)	(69)	(207)	(276)
Other expenses	(213)	-	(213)	(43)	-	(43)	(109)	-	(109)

Return/(loss) on ordinary activities before taxation	247	(1,672)	(1,425)	93	(817)	(724)	402	(207)	195

Taxation	(15)	29	14	(19)	9	(10)	(79)	75	(4)


Return/(loss) on ordinary activities after taxation	232	(1,643)	(1,411)	74	(808)	(734)	323	(132)	191

Return/(loss) per share	0.8p	(5.9)p	(5.1)p	1.2p	(13.2)p	(12.0)p	1.9p	(0.8)p	1.1p

Balance Sheets
at 31 December 2013

	Ordinary Shares Fund	Planned Exit Shares Fund	Infrastructure Shares Fund
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	17,273	4,999	14,853

Current assets
Debtors	2,028	143	259
Money market securities and other deposits	7,056	74	-
Cash	4,995	14	154
	14,079	231	413
Creditors
Amounts falling due within one year	(221)	(186)	(37)

Net current assets	13,858	45	376

Net assets	31,131	5,044	15,229

Capital and reserves
Called-up share capital	308	61	166
Share premium account	7,660	-	-
Capital redemption reserve	396	1	-
Special distributable reserve	25,071	5,452	15,101
Revenue reserve	125	463	300
Capital reserve	7,496	(743)	(338)
Revaluation reserve	(9,925)	(190)	-

Equity shareholders' funds	31,131	5,044	15,229

Number of shares in issue	30,829,144	6,115,511	16,647,858

Net asset value per share	101.0p	82.5p	91.5p

At 31 December 2013 there was an inter-share debtor/creditor of £223,000 which has been eliminated on aggregation.

Reconciliation of Movements in Shareholders' Funds
for the year ended 31 December 2013

	Called-up share capital	Share premium account	Capital redemption reserve	Special distributable reserve	Revenue reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Ordinary Shares Fund
As at 1 January 2013	273	3,513	389	26,206	(107)	9,658	(9,521)	30,411
Share issues in the year	42	4,355	-	-	-	-	-	4,397
Expenses in relation to share issues	-	(208)	-	-	-	-	-	(208)
Repurchase of shares	(7)	-	7	(673)	-	-	-	(673)
Net realised losses on disposal of investments	-	-	-	-	-	(816)	-	(816)
Investment holding losses	-	-	-	-	-	-	(404)	(404)
Dividends	-	-	-	-	-	(1,375)	-	(1,375)
Investment transaction costs	-	-	-	(10)	-	-	-	(10)
Management fees charged to capital	-	-	-	(452)	-	-	-	(452)
Tax credited to capital	-	-	-	-	-	29	-	29
Revenue return for the year	-	-	-	-	232	-	-	232
As at 31 December 2013	308	7,660	396	25,071	125	7,496	(9,925)	31,131


	Called-up share capital	Share premium account	Capital redemption reserve	Special distributable reserve	Revenue reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Planned Exit Shares Fund
As at 1 January 2013	61	-	1	5,556	389	(447)	584	6,144
Expenses in relation to share issues	-	-	-	(36)	-	-	-	(36)
Repurchase of shares	-	-	-	(25)	-	-	-	(25)
Investment holding losses	-	-	-	-	-	-	(774)	(774)
Dividends	-	-	-	-	-	(305)	-	(305)
Management fees charged to capital	-	-	-	(43)	-	-	-	(43)
Tax credited to capital	-	-	-	-	-	9	-	9
Revenue return for the year	-	-	-	-	74	-	-	74
As at 31 December 2013	61	-	1	5,452	463	(743)	(190)	5,044


	Called-up share capital	Share premium account	Capital redemption reserve	Special distributable reserve	Revenue reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Infrastructure Shares Fund
As at 1 January 2013	166	15,777	-	(169)	(23)	3	-	15,754
Expenses in relation to share issues	-	-	-	(266)	-	-	-	(266)
Cancellation of share premium	-	(15,777)	-	15,777	-	-	-	-
Dividends	-	-	-	-	-	(416)	-	(416)
Investment transaction costs	-	-	-	(34)	-	-	-	(34)
Management fees charged to capital	-	-	-	(207)	-	-	-	(207)
Tax credited to Capital	-	-	-	-	-	75	-	75
Revenue return for the year	-	-	-	-	323	-	-	323
As at 31 December 2013	166	-	-	15,101	300	(338)	-	15,229

Audited Income Statement
for the year ended 31 December 2012

	Year ended			Year ended
	31 December 2013			31 December 2012
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000

Realised (losses)/gains on investments	-	(816)	(816)	-	3,372	3,372
Investment holding losses	-	(1,178)	(1,178)	-	(3,736)	(3,736)
Income	1,341	-	1,341	974	-	974
Investment management fees	(234)	(702)	(936)	(232)	(696)	(928)
Other expenses	(365)	-	(365)	(460)	-	(460)

Return/(loss) on ordinary activities before taxation	742	(2,696)	(1,954)	282	(1,060)	(778)

Taxation	(113)	113	-	(21)	21	-


Return/(loss) on ordinary activities after taxation	629	(2,583)	(1,954)	261	(1,039)	(778)

Return per share:
Ordinary Share	0.8p	(5.9)p	(5.1)p	0.3p	(5.4)p	(5.1)p

Planned Exit Share	1.2p	(13.2)p	(12.0)p	3.4p	10.0p	13.4p

Infrastructure Share	1.9p	(0.8)p	1.1p	(0.2)p	(1.0)p	(1.2)p

The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information.

All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the year.

The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total recognised gains and losses has been presented.

Audited Reconciliation of Movements in Shareholders' Funds

	Called-up share capital	Share premium account	Capital redemption reserve	Special distributable reserve	Revenue reserve	Capital reserve	Revaluation reserve	Total
Year ended 31 December 2012	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Company
As at 1 January 2012	341	-	352	36,614	(2)	8,226	(5,201)	40,330
Share issues in the year	197	20,138	-	-	-	-	-	20,335
Expenses in relation to share issues	-	(848)	-	-	-	-	-	(848)
Repurchase of shares	(38)	-	38	(4,313)	-	-	-	(4,313)
Net realised gain on disposal of investments	-	-	-	-	-	3,372	-	3,372
Investment holding losses	-	-	-	-	-	-	(3,736)	(3,736)
Investment stamp duty	-	-	-	(12)	-	-	-	(12)
Dividends	-	-	-	-	-	(2,405)	-	(2,405)
Management fees charged to capital	-	-	-	(696)	-	-	-	(696)
Tax credited to capital	-	-	-	-	-	21	-	21
Revenue return for the year	-	-	-	-	261	-	-	261
As at 31 December 2012	500	19,290	390	31,593	259	9,214	(8,937)	52,309

	Called-up share capital	Share premium account	Capital redemption reserve	Special distributable reserve	Revenue reserve	Capital reserve	Revaluation reserve	Total
Year ended 31 December 2013	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Company
As at 1 January 2013	500	19,290	390	31,593	259	9,214	(8,937)	52,309
Share issues in the year	42	4,355	-	-	-	-	-	4,397
Expenses in relation to share issues	-	(208)	-	(302)	-	-	-	(510)
Repurchase of shares	(7)	-	7	(698)	-	-	-	(698)
Cancellation of share premium	-	(15,777)	-	15,777	-	-	-	-
Net realised losses on disposal of investments	-	-	-	-	-	(816)	-	(816)
Investment holding losses	-	-	-	-	-	-	(1,178)	(1,178)
Dividends	-	-	-	-	-	(2,096)	-	(2,096)
Investment transaction costs	-	-	-	(44)	-	-	-	(44)
Management fees charged to capital	-	-	-	(702)	-	-	-	(702)
Tax credited to capital	-	-	-	-	-	113	-	113
Revenue return for the year	-	-	-	-	629	-	-	629
As at 31 December 2013	535	7,660	397	45,624	888	6,415	(10,115)	51,404

Audited Balance Sheet
at 31 December 2013

		Registered Number: 03421340

	As at	As at
	31 December 2013	31 December 2012
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	37,125	44,433

Current assets
Debtors	2,207	2,266
Money market securities and other deposits	7,130	3,419
Cash	5,163	2,309
	14,500	7,994

Creditors
Amounts falling due within one year	(221)	(118)
Net current assets	14,279	7,876
Net assets	51,404	52,309

Capital and reserves
Called-up share capital	535	500
Share premium account	7,660	19,290
Capital redemption reserve	397	390
Special distributable reserve	45,624	31,593
Revenue reserve	888	259
Capital reserve	6,415	9,214
Revaluation reserve	(10,115)	(8,937)

Equity shareholders' funds	51,404	52,309


Net asset value per share:

Ordinary Share	101.0p	111.3p

Planned Exit Share	82.5p	100.0p

Infrastructure Share	91.5p	94.6p

The financial statements on pages 48 to 69 were approved by the Board of Directors and authorised for issue on 28 April 2014 and were signed on its behalf by:

John Gregory
Director

Audited Cash Flow Statement
for the year ended 31 December 2013

	Year ended	Year ended
	31 December 2013	31 December 2012
	£'000	£'000
Cash flow from operating activities
Investment income received	1,225	1,209
Dividends received from investments	169	-
Deposit and similar interest received	8	39
Investment management fees paid	(865)	(796)
Secretarial fees paid	(96)	(114)
Other cash payments	(365)	(891)

Net cash inflow/(outflow) from operating activities and returns on investment	76	(553)

Returns on investment and servicing of finance
Purchase of unquoted investments and investments quoted on AiM	(12,661)	(23,605)
Net proceeds on sale of investments	17,478	6,342
Net proceeds from deferred consideration	249	197
Net capital inflow/(outflow) from financial investment	5,066	(17,066)


Taxation	-	-
Equity dividends paid	(2,053)	(2,321)

Management of liquid resources
Movement in money market funds	(3,711)	7,922
	(622)	(12,018)
Financing
Proceeds of fund raising	4,365	15,857
Expenses of fund raising	(187)	(320)
Repurchase of own shares	(702)	(1,308)
	3,476	14,229
Net inflow of cash in the year	2,854	2,211

Reconciliation of net cash flow to movement in net funds
Increase in cash for the year	2,854	2,211
Net cash at start of year	2,309	98
Net cash at end of year	5,163	2,309

Analysis of changes in net debt	At 1 January 2013	Cashflow	At 31 December 2013
	£'000	£'000	£'000
Cash and cash equivalents	2,309	2,854	5,163

Notes

1. The audited Annual Financial Report has been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 December 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 31 December 2013, which were unqualified and did not contain and statements under S498(2) of Companies Act 2006 or S498(3) of Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 31 December 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

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

	31 December 2013			31 December 2012

	Ordinary Shares Fund	Planned Exit Shares Fund	Infrastructure Shares Fund	Ordinary Shares Fund	Planned Exit Shares Fund	Infrastructure Shares Fund

Net assets	£31,131,000	£5,044,000	£15,229,000	£30,411,000	£6,144,000	£15,754,000
No. of shares at year end	30,829,144	6,115,511	16,647,858	27,324,155	6,142,813	16,647,858
Net asset value per share	101.0p	82.5p	91.5p	111.3p	100.0p	94.6p

5. Return per share

	Year ended			Year ended
	31 December 2013			31 December 2012
	Ordinary Share	Planned Exit Share	Infrastructure Share	Ordinary Share	Planned Exit Share	Infrastructure Share
	£'000	£'000	£'000	£'000	£'000	£'000

Total return after taxation	(1,411)	(734)	191	(1,425)	824	(177)
Total return per share (note a)	(5.1)p	(12.0)p	1.1p	(5.1)p	13.4p	(1.2)p

Revenue return from ordinary activities after taxation	232	74	323	74	210	(23)
Revenue return per share (note b)	0.8p	1.2p	1.9p	0.3p	3.4p	(0.2)p

Capital return from ordinary shares after taxation	(1,643)	(808)	(132)	(1,499)	614	(154)
Capital return per share (note c)	(5.9)p	(13.2)p	(0.8)p	(5.4)p	10.0p	(1.0)p

Weighted average number of shares in issue in the year	27,776,607	6,125,011	16,647,858	27,783,381	6,170,224	14,626,385

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. Annual General Meeting

The Annual General Meeting will be held at 12.00pm on 29 May 2014 at the offices of Foresight Group, The Shard, 32 London Bridge Street, London, SE1 9SG.

7. Income

	Year ended	Year ended
	31 December 2013	31 December 2012
	£'000	£'000

Loan Stock interest	1,164	836
Dividends	169	106
Overseas based Open Ended Investment Companies ("OEICs")	6	30
Bank deposits	2	2
	1,341	974

8. Investments

	2013	2012
	£'000	£'000
Company
Quoted investments	-	878
Unquoted investments	37,125	43,555

	37,125	44,433


Company	Quoted	Unquoted	Total
	£'000	£'000	£'000

Book cost as at 1 January 2013	6,265	46,670	52,935
Investment holding losses	(5,387)	(3,115)	(8,502)
Valuation at 1 January 2013	878	43,555	44,433

Movements in the period:
Purchases at cost	-	12,751	12,751
Disposal proceeds	(612)	(17,115)	(17,727)
Realised (losses)/gains	(5,653)	5,124	(529)
Investment holding gain/(losses)	5,387	(7,190)	(1,803)
Valuation at 31 December 2013	-	37,125	37,125

Book cost at 31 December 2013	-	47,430	47,430
Investment holding losses	-	(10,305)	(10,305)
Valuation at 31 December 2013	-	37,125	37,125


Ordinary Shares Fund	Quoted	Unquoted	Total
	£'000	£'000	£'000

Book cost as at 1 January 2013	6,265	28,050	34,315
Investment holding losses	(5,387)	(3,699)	(9,086)
Valuation at 1 January 2013	878	24,351	25,229

Movements in the period:
Purchases at cost*	-	4,830	4,830
Disposal proceeds	(612)	(10,616)	(11,228)
Realised (losses)/gains+	(5,653)	5,124	(529)
Investment holding gains/(losses)**	5,387	(6,416)	(1,029)
Valuation at 31 December 2013	-	17,273	17,273

Book cost at 31 December 2013	-	27,388	27,388
Investment holding losses	-	(10,115)	(10,115)
Valuation at 31 December 2013	-	17,273	17,273

* Capitalised interest of £90,000 was recognised by the Ordinary Shares fund in the year, and is included within purchases at cost. + Deferred consideration of £287,000 was written off by the Ordinary Shares fund in the year and is included in realised losses in the income statement. ** Deferred consideration of £950,000 was recognised by the Ordinary Shares fund in the year, and is included in debtors. In addition, £325,000 was written off in the year and is included in investment holding losses in the income statement. More details can be found in note 10.





Planned Exit Shares Fund	Quoted	Unquoted	Total
	£'000	£'000	£'000

Book cost as at 1 January 2013	-	5,032	5,032
Investment holding gains	-	584	584
Valuation at 1 January 2013	-	5,616	5,616

Movements in the period:
Purchases at cost	-	347	347
Disposal proceeds	-	(190)	(190)
Realised gains	-	-	-
Investment holding losses	-	(774)	(774)
Valuation at 31 December 2013	-	4,999	4,999

Book cost at 31 December 2013	-	5,189	5,189
Investment holding losses	-	(190)	(190)
Valuation at 31 December 2013	-	4,999	4,999


Infrastructure Shares Fund	Quoted	Unquoted	Total
	£'000	£'000	£'000

Book cost as at 1 January 2013	-	13,588	13,588
Investment holding gains	-	-	-
Valuation at 1 January 2013	-	13,588	13,588

Movements in the period:
Purchases at cost	-	7,574	7,574
Disposal proceeds	-	(6,309)	(6,309)
Realised gains	-	-	-
Investment holding gains	-	-	-
Valuation at 31 December 2013	-	14,853	14,853

Book cost at 31 December 2013	-	14,853	14,853
Investment holding gains	-	-	-
Valuation at 31 December 2013	-	14,853	14,853

9. Related party transactions

No Director has an interest in any contract to which the Company is a party.

10. Transactions with the manager

Foresight Group which acts as investment manager to the Company in respect of its venture capital investments earned fees of £936,000 during the year (2012: £928,000). Foresight Fund Managers Limited, Company Secretary, received fees excluding VAT of £100,000 (2012: £100,000) during the year.

At the balance sheet date, there was £127,000 (2012: £nil) due to Foresight Group and £nil (2012: £nil) due to Foresight Fund Managers Limited. No amounts have been written off in the year in respect of debts due to or from the related parties.

END

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Foresight VCT PLC via Globenewswire

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Tuesday, 14th May 2024

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