Foresight VCT PLC : Annual Financial Report

FORESIGHT VCT PLC

Summary Financial Highlights

Net asset value per Ordinary Share at 31 December 2014 was 99.4p after a payment of 10.0p in dividends (31 December 2013: 101.0p).
Net asset value per Planned Exit Share at 31 December 2014 was 65.0p after a payment of 7.5p in dividends (31 December 2013: 82.5p).
Net asset value per Infrastructure Share at 31 December 2014 was 92.4p after a payment of 2.5p in dividends (31 December 2013: 91.5p).

Ordinary Shares fund

An interim dividend for the year ended 31 December 2014 of 6.0p per Ordinary Share was paid on 13 March 2015.
The fund realised £1.9 million from sales and loan redemptions from four portfolio companies.
The fund provided follow-on funding totalling £1.0 million to six portfolio companies and £5.4 million for five new investments.
A provision of £2.2 million has been made against the fund's investment in Closed Loop Recycling.

Planned Exit Shares fund

An interim dividend for the year ended 31 December 2013 of 7.5p per Planned Exit Share was paid on 12 December 2014.
The fund realised £0.8 million from sales and loan redemptions from two portfolio companies.
The fund provided follow-on funding totalling £0.1 million to two portfolio companies.
A provision of £0.7 million has been made against the fund's investment in Closed Loop Recycling.
The Board is pleased to declare an interim dividend for the year ended 31 December 2014 of 15.0p per Planned Exit Share, to be paid on 22 May 2015.

Infrastructure Shares fund

An interim dividend for the year ended 31 December 2013 of 2.5p per Infrastructure Share was paid on 30 September 2014.
The fund made six new investments totalling £7.2 million and is now fully invested.
The Manager agreed that the fund's management fee would be reduced from 1.75% to 1.0% from 1 January 2015.
The Board is pleased to declare an interim dividend for the year ended 31 December 2014 of 2.5p per Infrastructure Share to be paid on 22 May 2015.

Chairman's Statement

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 £44.2 million at 31 December 2014 from £31.1 million at 31 December 2013.

Of this net increase, amounting to £13.1 million, the principal contributing factors were a total of £14.0 million raised from the issue of new shares, less issue costs of £0.6 million, investment income of £1.2 million and a net increase of £3.2 million from the investment performance of the Ordinary Shares fund portfolio, despite the value of Closed Loop Recycling falling by £2.2 million as a result of tougher trading conditions and a failed exit process. These increases were offset by payment of dividends totalling £3.5 million, management fees and other expenses of £0.9 million, and share buybacks of £0.5 million.

The successful performance of the private equity investments in the Ordinary Shares portfolio, together with cash receipts from deferred consideration, the refinancing of investments and the success of recent fund-raisings, has generated significant cash balances. It is the Board's ambition that the size of the Ordinary Shares fund should be increased further in order that it can better sustain our commitment to Shareholders in relation to providing a regular flow of significant dividends, maintaining sufficient cash capacity for new investments to be made over the medium term and operating an active share buyback programme.

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 99.4p per share at 31 December 2014 from 101.0p per Share at 31 December 2013.

The performance of the investment portfolio, in particular the private equity investments was positive, and, after adding back the dividend payment of 10.0p per Ordinary Share, represented a total return of 8.3%.

iii. Cash & Deal Flow

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

New Investments

Ordinary Shares Fund	£
Industrial Efficiency II Limited	1,365,760
Positive Response Corporation Limited	1,000,000
Cole Henry PE 2 Limited	1,000,000
Kingsclere PE 3 Limited	1,000,000
Whitchurch PE 1 Limited	1,000,000
Total	5,365,760

Follow-on funding (including capitalised interest)

Ordinary Shares Fund	£
AlwaysOn Group Limited	246,934
Autologic Diagnostics Group Limited*	73,391
Biofortuna Limited	50,929
Closed Loop Recycling Limited*	427,627
Flowrite Refrigeration Holdings Limited*	7,893
Procam Television Holdings Limited	222,223
Total	1,028,997

*(including capitalised interest)

Disposal Proceeds, Deferred Consideration & Loan Repayments

Ordinary Shares Fund	£
Abacuswood Limited	49,997
Aerospace Tooling Corporation Limited	1,350,000
Alaric Systems Limited	560,191
Aquasium Technology Limited	333,333
Icore Limited	200,000
Infrared Integrated Systems Limited	84,030
Total	2,577,551

Cash Availability

The Ordinary Shares fund had cash and liquid resources of £14.0 million at 31 December 2014, which increased to £18.8 million at the time of writing. It is anticipated that these funds will be used to make several new private equity investments arising from Foresight Group's deal flow pipeline of new opportunities.

Additionally, a proportion of cash and liquidity will be for dividends to shareholders, paying annual running expenses and share buybacks.

iv. Investment Gains & Losses

During the year the Ordinary Shares fund in aggregate realised net losses amounting to £2.6 million (of which £2.5 million had already been provided for). The most significant write downs were Nanotecture Group plc (£1.0 million), Silvigen Limited (£0.8 million), iCore Limited (£0.6 million) and Withion Power Limited (£0.5 million). Further details of these gains and losses and 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 £681,000, of which £170,000 was charged to the revenue account and £511,000 was charged to the capital account. The average ongoing charges ratio of the Ordinary Shares fund for the year to 31 December 2014, at 2.3%, compares 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. Distributions, however, will inevitably be dependent on cash being generated from portfolio investments and successful realisations.

Based on this policy an interim dividend of 6.0p was paid on 13 March 2015 based on an ex-dividend date of 26 February 2015 and a record date of 27 February 2015.

During the year ended 31 December 2014, an interim dividend of 10.0p per Ordinary Share was paid on 14 March 2014, principally generated through the sale of Alaric Systems Limited. This dividend had an ex-dividend date of 26 February 2014 and a record date of 28 February 2014.

vii. Ordinary Shares Issues & Buybacks

A prospectus offer to raise £20 million was launched on 31 October 2014. At year end the offer had raised £4.2 million through the issue of 4,329,474 Ordinary Shares based on a net asset value of 95.2p per Ordinary Share. After the year end a further £13.6 million was raised through the issue of a further 13,525,998 Ordinary Shares, allotted at prices ranging from 93.4p to 100.1p per share.

The Company had previously launched an Ordinary Share prospectus offer on 26 September 2013 and 9,746,828 Ordinary Shares were allotted during the year ended 31 December 2014, based on net asset values ranging from 91.0p to 102.2p per Ordinary Share, raising £9.8 million.

The Company allotted 127,873 Ordinary Shares under the Company's Dividend Reinvestment Scheme at 91.0p per share.

During the year, 548,168 Ordinary Shares were repurchased for cancellation at a cost of £462,000 at an average discount to NAV of 10.1%. The Board and the Manager consider share buybacks to be a benefit to shareholders as a whole and an appropriate 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 £17.8 million has been raised under the current offer for subscription.

£1.3 million was invested into one new investment, Specac International Limited, in April 2015.

A total of £0.4 million was invested into follow-on funding for Biofortuna Limited, AtFutsal Group Limited and Procam Television Holdings Limited.

On 17 April 2015, Closed Loop Recycling filed a notice of intention to appoint an administrator. The carrying value at 31 December 2014 was £nil and we do not expect to recover any amounts through any subsequent administration process.

Outlook - Ordinary Shares Fund

The performance of the private equity part of the Ordinary Shares portfolio, including cash receipts from the refinancing of investments and deferred consideration and the success of the current fund-raising, has generated significant cash balances for the Ordinary Shares fund. This continues to underpin the Board's dividend commitment to Shareholders and provides sufficient capacity for several new investments to be made over the medium term in addition to those made this year, which we anticipate will further enhance shareholder returns.

Performance - Planned Exit Shares Fund
i. Movement in Net Asset Value of the Planned Exit Shares Fund

During the year, the net assets of the Planned Exit Shares fund decreased to £3,943,000 at 31 December 2014 from £5,044,000 at 31 December 2013.

The principal reason behind the fall in net assets was the aggregate performance of the investment portfolio; and one investment in particular, Closed Loop Recycling, which fell by £665,000, as a result of tougher trading conditions and a failed exit process.

Also contributing to this net decrease were the Planned Exit Shares fund dividends totalling £456,000, management fees and other expenses of £90,000 and share buybacks totalled £41,000 during the year.

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 65.0p per share at 31 December 2014 from 82.5p per Share at 31 December 2013, after payment of a 7.5p per Planned Exit Share dividend during the year.

iii. Cash & Deal Flow

There were no new investments made during the year.

During the year the Planned Exit Shares fund made the following follow-on investments:

Follow-on funding

Planned Exit Shares Fund	£
AlwaysOn Group Limited	929
Closed Loop Recycling Limited*	98,712
Total	99,641

*(including capitalised interest)

Disposal Proceeds, Deferred Consideration & Loan Repayments

Planned Exit Shares Fund	£
Channel Safety Systems Group Limited	614,250
Withion Power Limited	160,824
Total	775,074

The Planned Exit Shares fund had cash and liquid resources of £299,000 at 31 December 2014, which had increased to £1.7 million at the time of writing. The Planned Exit Shares fund is considered fully invested and its investments generate a running yield, which is principally utilised for 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 management fees totalled £51,000, of which £13,000 was charged to the revenue account and £38,000 was charged to the capital account. The total expense ratio of the Planned Exit Shares fund, for the year ended 31 December 2014 was 2.2%.

vi. Planned Exit Share Dividends

An interim dividend of 7.5p per Planned Exit Share was paid on 12 December 2014. The shares were quoted ex-dividend on 27 November 2014 and the record date for payment was 28 November 2014.

An interim dividend of 15.0p per Planned Exit Share will be paid on 22 May 2015. The shares will be quoted ex-dividend on 7 May 2015 with a record date of 8 May 2015.

vii. Planned Exit Shares Issues & Buybacks

There were no Planned Exit Shares issued during the year.

During the year under review 51,885 Planned Exit Shares were repurchased for cancellation at a cost of £41,000 at an average discount to NAV of 1.6%. 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

The investments in Industrial Efficiency Limited and Leisure Efficiency Limited were realised after the year end for combined proceeds of £998,500.

Channel Safety Systems Group Limited was also realised post year end for £519,000.

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 maximising the return 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 increased to £15,304,000 at 31 December 2014 from £15,229,000 at 31 December 2013.

Of this net increase, the Infrastructure Shares fund paid out dividends totalling £415,000 and management fees and other expenses of £379,000. Income for the year totalled £765,000.

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 increased to 92.4p per share at 31 December 2014 from 91.5p per Share at 31 December 2013.

iii. Cash & Deal Flow
During the year the Infrastructure Shares fund made the following new investments:

Infrastructure Shares Fund £

FS Hayford Farm Limited	2,000,000
Krk Solar Limited	2,000,000
Pula Infrastructure Limited	133,996
Rovinj Solar Limited	2,000,000
Zadar Infrastructure Limited	279,503
Zagreb Solar Limited	800,000
Total	7,213,499

The Infrastructure Shares fund had cash and liquid resources of £249,000 at 31 December 2014, which had decreased to £28,000 at the time of writing.

iv. Investment Gains & Losses

During the year, the Infrastructure Shares fund in aggregate realised net gains amounting to £97,000. The most significant gains were Lochgilphead Healthcare Services (Holdings) Limited (£73,000) and Stobhill Healthcare Facilities (Holdings) Limited (£49,000). 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 Infrastructure Shares fund, which was 1.75% until 31 December 2014, was reduced to 1% from 1 January 2015. The Board agreed with Foresight Group to make this change following the impact of the delay in investing the original amounts raised in qualifying infrastructure investments, which has the ability to impact the fund's returns. During the year the management fees totalled £268,000, of which £67,000 was charged to the revenue account and £201,000 was charged to the capital account. The total expense ratio of the Infrastructure Shares fund, for the year ended 31 December 2014 was 2.5%, which compares favourably with its VCT peer group.

vi. Infrastructure Share Dividends

An interim dividend of 2.5p per Infrastructure Share was paid on 30 September 2014. The shares were quoted ex-dividend on 17 September 2014 and the record date for payment was 19 September 2014.

An interim dividend of 2.5p per Infrastructure Share will be paid on 22 May 2015. The shares will be quoted ex-dividend on 7 May 2015 with a record date of 8 May 2015.

vii. Infrastructure Shares Issues & Buybacks

There were no Infrastructure Shares issued during the year.

During the period under review 80,792 Infrastructure Shares were repurchased for cancellation at a cost of £73,000 at an average discount to NAV of 0.7%. The Board and the Manager consider share buybacks to be an effective way to help manage the share price discount to NAV at which the Infrastructure Shares trade.

viii. Summary Post Year End Update

Following the year end, HMRC clearance was received to merge York Infrastructure 3 Limited and Zagreb Solar Limited and utilise their combined cash resources to repay £1.6 million of the senior debt early at a discount to par on the Drumglass PFI project, which will be value accretive to the fund. This investment completed in April 2015.

Outlook - Infrastructure Shares Fund

The Infrastructure portfolio is now fully invested in appropriate qualifying investments, including several significant new investments in solar infrastructure.

Alternative Investment Fund Management Registration

As reported at the interim stage, following the introduction of the new EU rules governing Alternative Investment Fund Managers ('AIFM'), the Board decided that the Company should register as a 'small registered UK AIFM' directly with the Financial Conduct Authority as permitted by the rules. The Company's application was completed in June 2014 and approval was confirmed in early August 2014. 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 28 May 2015 at 12.00pm. 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

Although there is still considerable uncertainty in continental Europe as a result of the stresses within the Euro area and in the UK because of the forthcoming General Election, it is apparent that the underlying UK economy is in reasonable health and many businesses are making steady progress. Although the immediate impact of the sharp reduction in oil prices has caused market volatility, we believe that we have some well managed competitive companies in our portfolio that are well placed to make good progress.

The investment phase of the Infrastructure Shares fund and the transition of part of the fund from non-qualifying PFI investments into VCT qualifying Solar Infrastructure has now been completed. Both the Board and the Manager are optimistic that the portfolio will now produce a steady income flow for future dividends, as originally planned.

The effect of the improvement in the economy has been noticeable in the performance of the private equity part of the Ordinary Shares portfolio. Within the Ordinary Shares portfolio, a series of refinancings and loan repayments and the success of the current fundraising 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 2015

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 £44.5 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 2014 was 44,485,151.

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 2014 was 6,063,626.

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 2014 was 16,567,066.

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 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, 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 2.2%. Share buy-backs, have been completed at discounts ranging from 0.5% to 10.2%. 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, 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.

31 December 2014 31 December 2013

	Ordinary	Planned Exit	Infrastructure	Ordinary	Planned Exit	Infrastructure
	Shares	Shares	Shares	Shares	Shares	Shares
Net asset value per share	99.4p	65.0p	92.4p	101.0p	82.5p	91.5p
Net asset value total return	217.8p	85.5p	97.4p	214.6p	95.5p	94.0p

		Planned			Planned
	Ordinary	Exit	Infrastructure	Ordinary	Exit	Infrastructure
	Shares	Shares	Shares	Shares	Shares	Shares
Share price	86.5p	73.0p	89.0p	93.0p	87.0p	97.5p
Share price total return	212.8p	93.5p	94.0p	206.6p	100.0p	100.0p

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

Dividends paid*	179.8p	20.5p	5.0p	176.0p	13.0p	2.5p
Dividends paid in the year	10.0p	7.5p	2.5p	5.0p	5.0p	2.5p
Dividend yield %	11.6	10.8	2.8	5.4	5.7	2.6
* From inception to 31 December 2014

Ordinary Shares fund
Discount to NAV at 31 December 2014	13.0%
Average discount on buybacks	10.1%
Shares bought back during the year under review	548,168
Increase in net asset value during year (after adding back 10.0p dividend)	8.3%
Ongoing charges ratio (based on assets at 31 December 2014)	2.0%
Planned Exit Shares fund
Premium to NAV at 31 December 2014	12.3%
Average discount on buybacks	1.6%
Shares bought back during the year under review	51,885
Decrease in net asset value during year (after adding back 7.5p dividend)	12.1%
Ongoing charges ratio (based on assets at 31 December 2014)	2.2%
Infrastructure Shares fund
Discount to NAV at 31 December 2014	3.7%
Average discount on buybacks	0.7%
Shares bought back during the year under review	80,792
Increase in net asset value during year (after adding back 2.5p dividend)	3.7%
Ongoing charges ratio (based on assets at 31 December 2014)	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 quoted 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 61 men and 40 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 63.
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 (rebased) at 31 December 2014 was 157.1p. 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 2014 was 85.5p

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 2014 was 97.4p

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 2014. The portfolio valuations are prepared by Foresight Group, reviewed and approved by the Board quarterly and subject to review by the auditors annually.

VCT Tax Benefit for Shareholders

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

Venture Capital Trust Status

Foresight 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 2013. The next complete review will be carried out for the year ended 31 December 2014. It is intended that the business of the Company be carried on so as to maintain its VCT status.

The Directors have managed, and continue to manage, the business in order to comply with the legislation applicable to VCTs. 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. As at 31 December 2014 the Company had 86.6% of its funds in such VCT qualifying holdings.

Future Strategy

The Board and the Manager believe that the strategy of focusing on traditional private equity investments is currently 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 enhance returns to shareholders.

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 2015

Manager's Report

Manager's Commentary

I am pleased to report a strong overall performance by the Ordinary Shares fund during the year. Several of the private equity investments performed well, particularly the relatively recent investments in Aerospace Tooling Corporation, Procam Television Holdings and Thermotech Solutions Limited. In line with the continuing UK economic recovery, trading conditions have improved generally across the portfolio which is reflected in an 8.3% increase in net asset value per Ordinary Share during the year to 99.4p per Ordinary Share (after adjusting for the 10.0p dividend paid in March 2014), notwithstanding a sizeable provision against the last remaining environmental investment, Closed Loop Recycling. Having realised a significant number of investments over recent years, we are now focussing on making new investments and achieving further profitable exits to facilitate dividend payments. An interim dividend of 10.0p per Ordinary Share was paid on 14 March 2014, reflecting in particular the sale of Alaric Systems for £7.1 million (including amounts in escrow) in December 2013, over five times the original cost of investment. Another interim dividend of 6.0p per Ordinary share was paid on 13 March 2015 in respect of the current year.

During the year, the net asset value per Planned Exit Share decreased by 12.1% to 65.0p per share as at 31 December 2014 from 82.5p as at 31 December 2013, of which 7.5p (£456,000) was accounted for by the Planned Exit Share interim dividend paid in December 2014. The remaining decreases were principally due to provisions of £665,379 and £286,434 made against the value of the investments in Closed Loop Recycling and Trilogy Communications. In October 2014, Channel Technical Services, a subsidiary of Channel Safety Systems, was sold for £1.6 million, as a result of which the Planned Exit Shares fund was paid £641,647, comprising a loan repayment of £614,250 and interest of £27,397. The remaining investment was sold in April 2015 for £518,937. In January 2015, the investments in Industrial Efficiency and Leisure Efficiency were sold to another Foresight managed fund for a total of £998,500, realising a combined profit of £556,190, after including interest received.

During the year, the net asset value per Infrastructure Share increased by 3.7% to 92.4p per share as at 31 December 2014 from 91.5p as at 31 December 2013 (after adjusting for the 2.5p interim dividend paid in September 2014).

As previously indicated, to increase the VCT qualifying proportion of the Infrastructure Share fund, action was taken during the year to refinance £4.5 million of non-qualifying loans in PFI investments and reinvest the proceeds in suitably qualifying solar infrastructure companies in line with the investment policy. This action has resulted in a diversified infrastructure risk and return profile as well as yield benefits to the portfolio while reducing the portion of non-qualifying investments to 30% of the Infrastructure Shares fund.

Reflecting increased competition, higher prices than originally envisaged have had to be paid for such PFI and solar assets, resulting in correspondingly lower than expected yields. Depending on the prices obtained on the ultimate sale of these assets, this may impact overall ultimate returns to investors.

Current and recent £20 million fund raisings for the Ordinary Share Fund

Foresight Group continue to see a number of high quality private equity investment opportunities, similar to the recent investments made in Positive Response Corporation, Aerospace Tooling Corporation, Thermotech Solutions and Procam Television referred to below. On 31 October 2014, the Board launched a full prospectus to raise up to £20 million by the issue of new Ordinary Shares, the securities note for the issue and a related application form being sent to shareholders in each of the Foresight VCTs. The issue is being well received by both new and existing investors, with over £17 million raised to date.

Foresight Group 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 longer term. Foresight Group believes that attractive deals are currently available and will utilise the funds raised to take advantage of these opportunities.

Portfolio Review: Ordinary Shares Fund

1. New Investments

Following an initial investment in July 2014, a total of £1,365,760 was invested during the year in Industrial Efficiency II Limited. The company provides energy efficiency fuel switching services, enabling customers to make significant cost savings and reduce emissions in return for paying charges based on the volume of fuel and electricity consumed.

In December 2014, the Ordinary Share fund invested £1,000,000 alongside other Foresight VCTs in a £2 million round to finance a shareholder recapitalisation of Positive Response Corporation. The company monitors the safety of people and property through its 24 hour monitoring centre in Dumfries, Scotland. The flagship product, StaffSafe, provides increased staff safety and protection in customer facing environments by enabling workers, particularly 'lone workers', to call for help when required utilising high quality two way audio communication and a CCTV feed linked to the monitoring centre.

In March 2014, investments of £1,000,000 were made into each of Cole Henry PE 2 Limited, Kingsclere PE 3 Limited and Whitchurch PE 1 Limited which are acquisition vehicles preparing to trade.

2. Follow-on funding

Ordinary Shares Fund	£
AlwaysOn Group Limited	246,934
Autologic Diagnostics Group Limited*	73,391
Biofortuna Limited	50,929
Closed Loop Recycling Limited*	427,627
Flowrite Refrigeration Holdings Limited*	7,893
Procam Television Holdings Limited	222,223
Total	1,028,997

* (including capitalised interest)

3. Realisations

In April 2014, the investment in iCore was sold to a new holding company established by management for £300,000, of which £200,000 was paid on completion and the remaining £100,000 is to be paid in October 2015.
In September 2014, Aerospace Tooling Corporation effected a recapitalisation and dividend distribution, returning the entire £3.5 million cost of the Foresight VCTs' investments made only 15 months previously. The Ordinary Share fund received full repayment of its loan capital of £1.35 million and a dividend of £150,000 equal to the original cost of its equity investment and still retains its original 23% equity shareholding in the company, effectively at nil cost.
In December 2014, Aquasium Technology repaid a loan of £333,333 and paid interest of £21,717.
£49,997 was recovered from the administrator of Abacuswood.

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

Ordinary Shares Fund	£
AlwaysOn Group Limited	566,422
AtFutsal Group Limited	92,291
Closed Loop Recycling Limited	2,163,946
Trilogy Communications Limited	416,214
Total	3,238,873

5. Performance Summary

I am pleased to report a strong overall performance by the Ordinary Shares fund during the year. The private equity investments generally performed well, particularly the relatively recent investments in Procam Television Holdings, Aerospace Tooling Corporation and Thermotech Solutions Limited, the aggregate valuations of which increased by over £5 million during the year. In line with the continuing UK economic recovery, trading conditions have improved generally across the portfolio which is reflected in an 8.3% increase in net asset value per Ordinary Share during the year to 99.4p per Ordinary Share (after adjusting for the 10.0p dividend paid in March 2014) from 101.0p per Ordinary Share as at 31 December 2013. These results are stated after making a sizeable provision of £2,163,946 against the last remaining environmental investment, Closed Loop Recycling, which experienced difficult trading conditions. Several of the portfolio companies are displaying good order books and revenue and profit growth, creating potential for further value increases.

Having realised a significant number of investments over recent years, we are now focussing on making new investments and achieving further profitable exits to facilitate dividend payments. An interim dividend of 10.0p per Ordinary Share was paid on 14 March 2014, reflecting in particular the sale of Alaric Systems for £7.1 million (including amounts in escrow) in December 2013, over five times the original cost of investment. Another interim dividend of 6.0p per Ordinary share was paid on 13 March 2015.

The M&A market continues to be active, providing opportunities for future realisations. With an encouraging economic backcloth, and proceeds from the recent fund raisings, Foresight Group is now well placed to take advantage of its current deal flow and is actively pursuing new investment opportunities.

Portfolio Review: Planned Exit Shares Fund
1. New Investments

No new investments were made during the year.

2. Follow-on funding

In March 2014, the Planned Exit Shares fund acquired a small number of shares in Data Continuity Group for £929.

3. Realisations

In October 2014, Channel Safety Systems Group repaid a loan of £614,250 and paid interest of £27,397 to the Planned Exit Shares fund following the successful sale of its subsidiary, Channel Technical Services.

Loans totalling £160,824 were repaid by the administrator of Withion Power during the year.

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

Planned Exit Shares Fund	£
Closed Loop Recycling Limited	665,379
Industrial Engineering Plastics Limited	78,262
Trilogy Communications Limited	286,434
Total	1,030,075

5. Performance Summary

During the year, the net asset value per Planned Exit Share decreased by 21.2% to 65.0p per share as at 31 December 2014 from 82.5p as at 31 December 2013. This decrease was principally due to the above provisions of £665,379 and £286,434 made against the value of the investments in Closed Loop Recycling and Trilogy Communications.

Channel Safety Systems, Industrial Efficiency and Leisure Efficiency all performed well during the year. As referred to above, in October 2014, Channel Technical Services, a subsidiary of Channel Safety Systems, was sold for £1.6 million, as a result of which the Planned Exit Shares fund was paid £641,647. The investment in the parent company was sold in April 2015 for £518,937. In January 2015, the investments in Industrial Efficiency and Leisure Efficiency were sold to another Foresight managed fund, based on an independent third party valuation. The investment in Industrial Efficiency was sold for £205,500, realising a profit of £85,215 and generating a total return of 1.5 times original cost of £180,000 after including interest received. The investment in Leisure Efficiency was sold for £793,000, realising a profit of £470,975 and generating a total return of 1.7 times original cost of £690,000 after including interest received.

Although Trilogy Communications has experienced difficult trading conditions over the last three years, a new strengthened management team has substantially improved the company's recent trading performance. A new Sales Director has been recruited to increase broadcast sales which has already resulted in a growing sales pipeline. Following successful completion of two important test programmes, significant defence orders are expected in 2015, materially improving profitability and cash conversion. A small number of shares were acquired in Data Continuity Group prior to its all share merger with AlwaysOn Group in April 2014. This merger created additional scale and scope for significant cost reductions for the enlarged Data Continuity Group, combined with the ability to cross-sell a broader range of services.

An interim dividend of 7.5p per Planned Exit Share was paid on 12 December 2014. An interim dividend of 15.0p per Planned Exit Share will be paid on 22 May 2015. The shares will be quoted ex-dividend on 7 May 2015 with a record date of 8 May 2015.

Foresight Group 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

Background

By the closing date of 18 July 2012, a total of £33,295,716 had been raised for the Infrastructure Share fund jointly with Foresight 2 VCT's Infrastructure Share fund (i.e. some £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, solar infrastructure, energy efficiency and onsite power generation markets.

The two funds acquired shareholdings in eight operating PFI companies, four in the education sector holding interests in 13 schools and four in the health sector, comprising 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. These investments have strong operating records and have remaining contract terms ranging from 12 to 27 years. All have project finance debt in place with interest rate hedging contracts for the duration of the concession, removing any refinancing or interest rate risks. They also benefit from having long term facilities management subcontracts which pass all operational risks through to major companies that are well established in the UK PFI market.

Good progress was made in investing the majority of the Infrastructure Share fund in secondary PFI investments within 12 months of the closing date. Secondary PFI yields fell significantly, however, reflecting increased competition and higher offer prices from new and established PFI infrastructure funds, driven by increasing investor appetite for PFI investments and a contraction in the supply of new infrastructure assets due to government policy changes and austerity measures. This yield compression has meant that assets were acquired at yields lower than originally forecast. The total return, however, depends on the prices achieved on an ultimate sale or refinancing (with suitable debt finance) of the assets and, if yield compression continues, the total return forecast originally may still be achieved through an increase in the underlying capital value of the assets. Foresight Group has agreed with the Board to reduce its management fee to 1% per annum from 1 January 2015 on the Infrastructure Share fund in order to help reduce costs and enhance investor returns.

Portfolio Developments

Although advance VCT clearances were received from HMRC in respect of four of the original PFI investments, only one is a VCT qualifying investment because the co-shareholders in the other three would not enter into a VCT qualifying structure. Accordingly, action was taken to rebalance the portfolio in order to increase the VCT qualifying proportion of the Infrastructure Share fund to 70% by July 2014 to meet the VCT qualification test. This test is applied to the Company as a whole and is currently 86.6%. This rebalancing exercise included the refinancing of £4.5 million of non-qualifying PFI assets with loans from the Foresight Inheritance Tax Service to reduce the non-qualifying holdings and then utilising the refinancing proceeds to invest in five suitably qualifying solar infrastructure companies, in line with the investment policy.

Investments in a number of infrastructure projects were reduced through the repayment of the above loans, namely the Infrastructure Share fund's loans in the Sandwell Schools (Norwich Infrastructure 4 Limited), Staffordshire Schools (Durham Infrastructure 5 Limited), Lochgilphead Hospital and Stobhill Forensic Psychiatry Unit PFI projects. This released an equal sum for reinvestment in qualifying solar infrastructure assets and reduced the portion of non-qualifying investments to 30% of the Infrastructure Share Fund.

New Investments

In July 2014, the Infrastructure Share fund invested a total of £6.8 million in four solar projects. The solar assets share many of the characteristics of PFI assets, including RPI-linked revenues, low correlation to economic conditions and low counterparty risk, although there is an element of exposure to commercial electricity prices.

The solar project details are as follows:

£2 million invested in Rovinj Solar Limited to acquire a shareholding in the 5.5MW Ford Farm solar project, located in St Ives, Cornwall which has been generating electricity since March 2013. The investment received HMRC clearance and was completed in December 2014.
£2 million invested in FS Hayford Farm Limited which had a conditional contract to acquire the Hayford Farm solar project which was completed in December 2014. Hayford Farm is a 9.8MW project which was partially financed with a co-investment from the Foresight Inheritance Tax Service and third party debt from Investec Bank. The investment received HMRC clearance in July 2014 and has been generating revenues since connection to the National Grid in September 2014.
£2 million invested in Krk Solar Limited which completed the acquisition of the 3.3MW Tope Farm Solar Project near Blackawton in Devon on 14 October 2014. The investment has received HMRC clearance.
£800,000 invested in Zagreb Solar Limited on a qualifying basis. A solar investment project for Zagreb completed in April 2015.

New investments were made in Zadar Infrastructure Limited (£279,503) and Pula Infrastructure Limited (£133,996) during the year which acquired interests in two hospitals.

Follow-on Investments

A further investment of £1.25 million was made into Canterbury Infrastructure 15 Limited, increasing the total investment to £2.25 million. In April 2014, the company invested £1.7 million in the Pentre solar project and will invest a further £400,000 alongside third party debt of £4.1 million from Investec Bank when the installation receives its Ofgem ROC Accreditation, which is expected shortly. Pentre is a 6MW ground mounted solar power project in Carmarthenshire, South Wales which has been connected to the National Grid and generating revenue for the Infrastructure Share fund since September 2014. This investment has received HMRC clearance. All of the six remaining follow-on investments totalling £346,400 were non-material.

Outlook

The Infrastructure Shares fund has now reduced its exposure to non-qualifying PFI investments to 30% of fund net assets and has successfully deployed the remaining funds into a combination of PFI and solar investments that have already received HMRC clearance. During the year, as detailed above, four solar investments were completed which provide an infrastructure risk, return profile, diversification and yield benefits to the portfolio.

Reflecting progress being made in generating yield from these investments, the Board paid a dividend of 2.5p per Infrastructure Share on 30 September 2014, making 5.0p in dividends per share to date. Overall, the total return increased to 97.4p (31 December 2014) per share from 94.0p (31 December 2013) per share in the year. An interim dividend of 2.5p per Infrastructure Share will be paid on 22 May 2015. The shares will be quoted ex-dividend on 7 May 2015 with a record date of 8 May 2015. We are optimistic for the prospects of the restructured portfolio over the coming years, while recognising that the total return of 130.0p per share is at the upper end of management forecasts for the portfolio.

Portfolio Company Highlights

In June 2013, the Ordinary Shares fund invested £1.5 million alongside other Foresight VCTs in a £3.5 million investment in Dundee based Aerospace Tooling Corporation ("ATL"), a well established specialist engineering company. ATL provides repair, refurbishment and remanufacturing services to large international companies for components in high-specification aerospace and turbine engines. With a heavy focus on quality assurance, the company enjoys strong relationships with companies serving the aerospace, military, marine and industrial markets. In the year to 30 June 2014, a number of significant orders underpinned growth, with turnover doubling and profits increasing significantly. With further progress being made in the current year, this strong trading performance supported an increase in valuation of £4.9 million in the Ordinary Shares fund during the year. Reflecting particularly strong cash generation, the company was able to effect a recapitalisation and dividend distribution in September 2014, returning the entire £3.5 million cost of the Foresight VCTs' investments made only 15 months previously. The Ordinary Shares fund received full repayment of its loan capital of £1.35 million and a dividend of £150,000 equal to the original cost of its equity investment while still retaining its original 23% equity shareholding in the company, effectively at nil cost. Held in the Ordinary Shares fund.

Following the all-share merger in April 2014 of the two Foresight portfolio companies, AlwaysOn Group and Data Continuity Group (now known as AlwaysOn Group), a major reorganisation was implemented, involving significant cost reductions and the year end changed to March 2015. As part of the merger transaction, a further £500,000 was invested by way of loans by the Foresight VCTs, including £240,000 from the Company, into AlwaysOn Group to ensure that the enlarged group had sufficient financial resources. AlwaysOn Group's shareholders received a total of 30.6% of the equity of the enlarged Group. The merged business now provides data backup services, connectivity and collaboration software (Microsoft Lync) to SMEs and larger enterprises. The merger was completed successfully, with no major outages. There is an increased focus on selling through indirect channels, particularly of Microsoft Lync, where AlwaysOn is a Microsoft Gold partner. In the current year to date, revenues have lagged budget resulting in small monthly losses being incurred, mostly due to weaker product sales and data back up renewals, whilst the managed services are performing ahead of expectations. With a number of significant pipeline opportunities generated through partners, performance is expected to improve significantly once some of these convert into orders. In view of the weak trading performance, a provision of £566,422 was made against the cost of the investment in the Ordinary Share fund during the year.

In March 2014, small numbers of additional shares in Data Continuity Group were acquired from a departing shareholder for £6,934 and £929 by the Ordinary Shares fund and the Planned Exit Shares fund respectively. The original investment in Data Continuity Group held by the Planned Exit Shares fund comprises both loans and shares which are currently valued above cost. Held in the Ordinary Shares and Planned Exit Shares funds.

For the year to 31 December 2013, Aquasium Technology achieved a NPBT of £646,000 on sales of £8.6 million, reflecting continuing demand for CVE's smaller electron welding machines. This compares with a NPBT of £608,000 achieved on sales of £8 million (after adjusting for the sale of its EBTEC division for $11 million which generated a 2.5 times return on its original cost) for the previous year. Having paid £518,345 in redemption premia and interest in 2013, the company repaid loans of £333,333 and interest of £21,717 in December 2014. Reflecting continuing strong order intake, further growth was achieved in both sales and profits in the year to 31 December 2014. The Company still holds 33% of Aquasium's equity and £333,334 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 Shares fund.

AtFutsal Group runs government approved education programmes for students aged 16-18 years old, principally as part of a consortium made up of Football League clubs, colleges and academies and training/accreditation organisations. Funding for these programmes is sourced from the Education Funding Agency. The company's three arenas in Birmingham, Leeds and Swindon are used as part of these education programmes. AtFutsal has introduced a wider range of government approved BTech courses and is using its own online education software platform to provide a broader range of educational services. A separate English Colleges education programme has been established to provide additional futsal related courses for 16-18 year olds at sixth form colleges. For the current student year which commenced in September 2014, the company registered 1,400 students on its futsal related courses, compared with 1,200 in the previous academic year and 100 for its new English Colleges programme. AtFutsal is also improving its capacity utilisation across its three arenas with a variety of different sports being regularly played at each arena alongside futsal at both child and adult level. For the year ended 31 December 2014, a small operating profit was achieved on sales of £5.0 million, with the growing Education division generating the majority of the profit and cash flow within the Group. Management is focussed on improving profitability by increasing the number of students and range of education programmes and also the usage of its online education platform. Held in the Ordinary Shares fund.

Following the £48 million secondary buy-out by Living Bridge (formerly ISIS Private Equity) in January 2012, investments in equity and loan stock valued at £1.486 million were retained in Autologic Diagnostics Group. The company generated reduced profits for the year to December 2013, achieving an EBITDA of £5.4 million on sales of £18.8 million (an EBITDA of £5.9 million on revenues of £17.2 million in 2012). Similar trading results were achieved during 2014, with relatively stronger sales in the UK and Europe compared with the USA. As at 31 December 2014, the company had a healthy cash balance of £7.9 million. Management continues to develop a business model to generate recurring revenues and improve the quality of the company's earnings through a new service-oriented product, the launch of which has now been delayed to mid 2015. In the short term, this change in strategy towards a pure recurring revenue model may impact EBITDA in 2015 and 2016 while helping to drive longer term shareholder value. During the year, interest of £73,391 deferred under the terms of the loan agreement with Autologic Diagnostics Group was capitalised. Held in the Ordinary Shares fund.

Biofortuna, an early stage 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 tests for genetic diseases and organ transplant compatibility. Because of the company's stabilisation and freeze-drying technology, its products can be transported easily (in the post if needed) and stored at room temperature for up to two years. A £1.3 million round to finance capital expenditure and working capital was completed in August 2013, in which the Ordinary Shares fund invested £99,066 in the first tranche and a further £50,929 in the second, final tranche in April 2014. For the year to March 2014, an operating loss of £1.05 million was incurred on sales of £325,000. Trading in the current year is stronger, with a lower rate of operating loss. Following successful FDA trials, Biofortuna has obtained FDA approval for its SSPGo genetic testing product range in the USA, a particularly important milestone enabling access to the USA market, the largest in the World, as well as obtaining FDA registration for its manufacturing site. Five companies have selected the company's freeze-dried kit manufacturing service to produce freeze dried versions of their products, with paid for feasibility studies and contract discussions occurring with various parties. The company is progressing in a number of areas, including broadening its product range, winning new customers, increasing its manufacturing capacity and assessing new market opportunities. To finance the development of new products, a £1.55 million round was concluded in January 2015, of which £890,000 was committed by the Foresight VCTs. The Ordinary Shares fund committed to invest £222,500, of which £128,000 was invested as the first tranche. Held in the Ordinary Shares 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 and provide growth capital. Blackstar 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 2014, the company achieved an EBITDA of £300,000 on sales of £8.6 million (cf. an EBITDA of £394,000 on sales of £9.7 million in the previous year, reflecting channel restocking). A similar performance is expected in the current year, reflecting continuing investment in new product development, reductions in overheads and challenging conditions in some overseas markets. In the US market, the largest guitar amplifier market globally, Blackstar continues to gain market share and is now the number two guitar amplifier brand by monthly sales volumes. Management are focused on increasing sales and improving margins, including selectively replacing distributors where appropriate. The company currently has a presence in over 35 countries worldwide and its products are stocked in over 2,500 stores globally. The new ID: Lite range of amplifiers, which are the company's first products at the value end of the market, was launched to critical acclaim in the US and UK markets in February and March 2014. Two new ID: Core products, again at the high growth value end of the market, have been launched, the first in time for the Christmas season in 2014, sales of which have already exceeded expectations, and the second in February 2015. Held in the Ordinary Shares fund.

In December 2010, the Planned Exit Share fund provided £565,000 to partially fund a management buy-in of long established Petersfield based Channel Safety Systems Group which designs and distributes emergency lighting and fire safety systems, as well as providing associated installation and maintenance services through its subsidiary, Channel Technical Services. For the year to 31 October 2013, Channel Safety Systems Group performed well, achieving an EBITDA of £580,000 on sales of £8.58 million (£420k EBITDA on sales of £8.5 million for the previous year). In the year to 31 October 2014, the group traded well ahead of budget and the previous year and has a strong cash position. In late October 2014, Channel Technical Services was sold for £1.6 million, as a result of which the Planned Exit Share fund was paid £641,647 comprising a loan repayment of £614,250 and interest of £27,397. The investment in the parent company was sold in April 2015 for £518,937. Held in the Planned Exit Shares fund.

During 2013/14, Closed Loop Recycling successfully doubled the capacity of its Dagenham plant, which is now operating at full capacity processing approximately 1,000 tonnes per week of waste plastic bottles. In October 2014, following protracted negotiations, the shareholders entered into a confidential, conditional sale and purchase agreement with a purchaser planning to seek a public listing simultaneously with completion of the acquisition, at a price higher than the then carrying valuation. One of the conditions related to the financial performance of the company during the listing process. The company's recent and short term projected performance, however, has been impacted by adverse movements in the price of waste plastic bottles reflecting overseas demand for such bottles and weaker prices for virgin resin, indirectly reflecting the falling price of oil. The latter impacts the price customers pay for the company's competing recycled HDPE and PET pellets. To mitigate the impact of these price movements, price increases have been negotiated with key customers. Unfortunately, the conditional sale and purchase agreement was formally terminated in December 2014, following weaker than projected financial performance by the company and weaker short term profit projections. Reflecting these two factors, full provisions of £2,363,946 and £665,379 were made against the costs of the respective investments in the Ordinary and Planned Exit Shares funds, reducing these to nil.

Despite actively pursuing various strategic options, including raising capital from third parties, an outright sale and seeking supply chain support, no viable solution was ultimately achieved, resulting in the company filing notice of intention to appoint an administrator on 17 April 2015. Held in the Ordinary and Planned Exit Shares funds.

In May 2012, the Ordinary Share fund invested £492,500 in Flowrite Refrigeration Holdings alongside other Foresight VCTs to finance the £3.2 million management buyout of Flowrite Services Limited. This long established, Maidstone based company provides refrigeration and air conditioning maintenance and related services nationally, principally to leisure and commercial businesses such as hotels, clubs, pubs and restaurants. In the year to 31 October 2014, the company traded well, achieving an operating profit of £740,000 on sales of £10.8 million after substantial investment in new engineers and systems (cf. an operating profit of £1.06 million on sales of £10.0 million in 2013). Management has increased sales efforts, particularly targeting more installation work, won a number of significant new contracts and customers. It is currently reviewing several potential acquisition opportunities with the aim of broadening its national coverage. In December 2013, as a result of strong trading, Flowrite repaid a loan (£282,699), rolled up interest (£31,785) and accrued interest (£47,661) totalling £362,145 to the Company, representing some 75% of original cost of investment, only 18 months after the MBO. The company has made a good start to its current financial year which is budgeted to show substantial growth. During the year, interest of £7,893 deferred under the terms of the loan agreement was capitalised. Held in the Ordinary Shares 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 these constraints limit upside potential, the investment was sold in April 2014 to a new holding company established by management for £300,000, of which £200,000 was paid on completion with the remaining £100,000 due in October 2015. Held in the Ordinary Shares fund.

As part of a £360,000 funding round in April 2013, the Planned Exit Shares fund invested £180,000 in Industrial Efficiency, alongside £180,000 from the Foresight 2 VCT Planned Exit Shares fund. The company installs and maintains proven and robust energy switching equipment, allowing customers to reduce emissions and make significant cost savings. The company completed its first energy cost reduction project in September 2013 and continues to pursue a number of similar opportunities. Returns are based solely on the cost savings made and do not depend on government subsidies or Feed-in- Tariffs. In January 2015, the investment in Industrial Efficiency was sold for £205,500 to another Foresight managed fund, based on an independent third party valuation. The sale of Industrial Efficiency realised a profit of £85,215 and generated a total return of 1.5 times original cost. Held in the Planned Exit Shares fund.

In July 2014, as part of the first £1.38 million tranche of a phased funding round totalling up to £4.4 million by three Foresight managed funds, a new investment of £990,760 was made by the Ordinary Shares fund in Industrial Efficiency II, alongside £326,740 from Foresight 3 VCT. The company provides energy efficiency fuel switching services, enabling customers to make significant cost savings and reduce emissions. Following completion of a number of installations for the first customer, a major corporation, the Ordinary Shares fund invested a further £375,000 in December 2014 as part of the second tranche of £500,000. A number of other such installations are currently in the course of construction and further tranches will be drawn down during 2015. The business charges this customer for the delivery of electricity and gas. Once the contracted level of power has been delivered, which is expected to be reached after five years, depending on the rate of usage, the contract will terminate and payments reduce to a nominal level. Held in the Ordinary Shares 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 help 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 18 month period ended 31 May 2014, reflecting increased competition in its plastics distribution and industrial fabrication markets, the company achieved a reduced EBITDA of £205,000 on sales of £6.7 million (compared to an EBITDA of £646,000 on sales of £4.9 million in 2012). Notwithstanding a good start in the following year and improved market sentiment, performance deteriorated subsequently during Summer 2014. A new Chairman and experienced turnaround CEO were appointed with a view to improving trading, operational efficiency and systems and performance has already started to improve. Reflecting this performance, a provision of £78,262 was made against this investment during the year. Held in the Planned Exit Shares fund.

As part of a £1.38 million funding round in January 2012, the Planned Exit Shares fund invested £690,000 in Leisure Efficiency. The company installs and maintains energy efficiency equipment, including voltage optimisers and heat exchangers, in 34 David Lloyd Leisure ("DLL") sites across the UK. The contract with DLL has a life of seven years during which the company will generate a strong yield. In January 2015, the investment in Leisure Efficiency was sold for £793,000 to another Foresight managed fund, based on an independent third party valuation. The sale of Leisure Efficiency realised a profit of £470,975 and generated a total return of 1.7 times original cost. Held in the Planned Exit Shares fund.

In December 2014, the Ordinary Shares fund invested £1,000,000 alongside other Foresight VCTs in a £2 million round to finance a shareholder recapitalisation of Positive Response Corporation. Established in 1997, the company monitors the safety of people and property through its 24 hour monitoring centre in Dumfries, Scotland. The flagship product, StaffSafe, provides increased staff safety and protection in customer facing environments by supporting workers, particularly 'lone workers', in dealing with verbal abuse, harassment and anti-social behaviour by enabling them to call for help utilising high quality two way audio communication and a CCTV feed linked to the monitoring centre. Customers include several major restaurant and retail chains. Revenues are generated from both initial installation fees and monitoring and maintenance fees. In the first nine months of the financial year ended 31 March 2015, an EBITDA of £454k was achieved on sales of £1.49 million. Significant growth is expected in the current financial year, reflecting a strong sales pipeline including both existing and potential new customers. The management team has been strengthened with the appointment of three experienced executives as Chairman, CEO and Finance Director respectively. A new Head of Sales is currently being recruited. Held in the Ordinary Shares 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 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 is a preferred supplier to BSkyB and an approved supplier to the BBC and ITV. Over the last four years revenues have more than doubled, following the introduction of new camera formats and increased sales and marketing efforts. In September 2013, Hammerhead, a competitor with facilities in London, Manchester, Edinburgh and Glasgow, was acquired in order to broaden the customer base, increase national coverage and realise various synergistic benefits.

For the year to 31 December 2013, the trading subsidiary achieved an EBITDA of £1.8 million on sales of £6.4 million, well ahead of trading in 2012. In the year to 31 December 2014, significant growth in sales and profits was achieved, well ahead of the prior year, reflecting both strong organic growth and the successful integration of the Hammerhead acquisition, supporting an increase in valuation of £571,280 during the year. Continuing strong growth is expected in the current financial year which will necessitate expansion into larger premises in due course. In December 2014, the Ordinary Shares fund invested a further £222,223 alongside £277,777 from other Foresight VCTs to partially fund the acquisition of True Lens Services which repairs broadcast equipment and refurbishes and supplies camera lenses. On 30 March 2015, Procam acquired New York based camera rental company Hotcam New York, in order to provide its US client base with the same services and quality of service as its UK customers, many of which also shoot in the US. Other acquisition opportunities are under consideration. Held in the Ordinary Shares fund.

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 Thermotech Solutions (formerly Fire and Air Services). Thermotech is 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 revenue visibility. Since investment, good progress has been made in diversifying and re-balancing the spread of revenues across the three main business lines, with an increased emphasis on service and maintenance. For the year to 31 March 2014, the trading subsidiary achieved an EBITDA of £717,000 on sales of £4.0 million. In the current year, reflecting a number of significant contract wins with major retailers, roll outs of existing contracts and a growing sales pipeline, revenues and profits are significantly ahead, with strong cash generation. The recently appointed new CEO has already made good progress in developing the business, including revamping the brand, website and marketing collateral, strengthening the finance, sales and marketing, health and safety and quality management functions. He has also introduced GPS tracking of engineers and electronic job sheets with the aim of enhancing business information and reporting. Held in the Ordinary Shares fund.

Reflecting defence contract orders from partners such as Northrop Grumman and Raytheon, Trilogy Communications achieved strong trading results up to 2012. Trading has since been affected by delays in long-term US defence programme orders. In the year to February 2014, despite cost reductions, the trading subsidiary incurred an EBITDA loss of £808k on sales of £3.8 million. Following further cost reductions and some recovery in defence orders, losses have since been stemmed and the company is now operating at or above EBITDA breakeven on a monthly basis. A new non-executive Chairman was appointed and the Chief Operating Officer was promoted to the position of Chief Executive Officer. A new Sales Director has been recruited to increase broadcast sales which has already resulted in a growing sales pipeline. Discussions are in progress in relation to further defence programmes and the company continues to develop its range of communication equipment and related services, including the planned launch of a software only variant. Following successful completion of two important test programmes, significant defence orders are expected in early 2015 which would largely be met from existing stock, materially improving profitability and cash conversion. Reflecting the above performance, provisions of £416,214 and £286,434 respectively were made during the year against the cost of the investments in the Ordinary Share fund and the Planned Exit Share fund. Held in the Ordinary Shares and Planned Exit Shares funds.

David Hughes
Chief Investment Officer
Foresight Group
28 April 2015

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 2015

Unaudited Non-Statutory Analysis of the Share Classes

Income Statements
for the year ended 31 December 2014

	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/(gains) on investments	-	(2,557)	(2,557)	-	-	-	-	97	97
Investment holding gains/(losses)	-	5,741	5,741	-	(704)	(704)	-	182	182
Income	1,199	-	1,199	251	-	251	765	-	765
Investment management fees	(170)	(511)	(681)	(13)	(38)	(51)	(67)	(201)	(268)
Other expenses	(224)	-	(224)	(39)	-	(39)	(111)	-	(111)

Return/(loss) on ordinary activities before taxation	805	2,673	3,478	199	(742)	(543)	587	78	665

Taxation	(92)	165	73	(41)	8	(33)	(117)	77	(40)


Return/(loss) on ordinary activities after taxation	713	2,838	3,551	158	(734)	(576)	470	155	625

Return/(loss) per share	1.9p	7.4p	9.3p	2.6p	(12.0)p	(9.4)p	2.8p	1.0p	3.8p

Balance Sheets
at 31 December 2014

	Ordinary Shares Fund	Planned Exit Shares Fund	Infrastructure Shares Fund
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	24,774	3,620	14,976

Current assets
Debtors	5,727	73	179
Money market securities and other deposits	7,081	75	-
Cash	6,879	224	249
	19,687	372	428
Creditors
Amounts falling due within one year	(253)	(49)	(100)

Net current assets	19,434	323	328

Net assets	44,208	3,943	15,304

Capital and reserves
Called-up share capital	445	61	165
Share premium account	21,032	-	-
Capital redemption reserve	401	1	1
Distributable reserve	17,118	4,909	15,268
Capital reserve	9,396	(134)	(312)
Revaluation reserve	(4,184)	(894)	182

Equity shareholders' funds	44,208	3,943	15,304

Number of shares in issue	44,485,151	6,063,626	16,567,066

Net asset value per share	99.4p	65.0p	92.4p

At 31 December 2014 there was an inter-share debtor/creditor of £130,000 which has been eliminated on aggregation.

Reconciliations of Movements in Shareholders' Funds
for the year ended 31 December 2014

	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Ordinary Shares Fund
As at 1 January 2014	308	7,660	396	25,196	7,496	(9,925)	31,131
Share issues in the year	142	13,964	-	-	-	-	14,106
Expenses in relation to share issues	-	(592)	-	-	-	-	(592)
Repurchase of shares	(5)	-	5	(462)	-	-	(462)
Net realised losses on disposal of investments	-	-	-	-	(2,557)	-	(2,557)
Investment holding gains	-	-	-	-	-	5,741	5,741
Dividends	-	-	-	(3,535)	-	-	(3,535)
Reallocation of dividends	-	-	-	(7,216)	7,216	-	-
Investment transaction costs	-	-	-	9	-	-	9
Management fees charged to capital	-	-	-	-	(511)	-	(511)
Reallocation of management fees charged to capital	-	-	-	2,413	(2,413)	-	-
Tax credited to capital	-	-	-	-	165	-	165
Revenue return for the year	-	-	-	713	-	-	713
As at 31 December 2014	445	21,032	401	17,118	9,396	(4,184)	44,208


	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Planned Exit Shares Fund
As at 1 January 2014	61	-	1	5,915	(743)	(190)	5,044
Expenses in relation to share issues	-	-	-	(28)	-	-	(28)
Repurchase of shares	-	-	-	(41)	-	-	(41)
Investment holding losses	-	-	-	-	-	(704)	(704)
Dividends	-	-	-	(456)	-	-	(456)
Reallocation of dividends	-	-	-	(800)	800	-	-
Management fees charged to capital	-	-	-	-	(38)	-	(38)
Reallocation of management fees charged to capital	-	-	-	161	(161)	-	-
Tax credited to capital	-	-	-	-	8	-	8
Revenue return for the year	-	-	-	158	-	-	158
As at 31 December 2014	61	-	1	4,909	(134)	(894)	3,943


	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Infrastructure Shares Fund
As at 1 January 2014	166	-	-	15,401	(338)	-	15,229
Expenses in relation to share issues	-	-	-	(73)	-	-	(73)
Repurchase of shares	(1)	-	1	(73)	-	-	(73)
Net realised gains on disposal of investments	-	-	-	-	97	-	97
Investment holding gains	-	-	-	-	-	182	182
Dividends	-	-	-	(415)	-	-	(415)
Reallocation of dividends	-	-	-	(416)	416	-	-
Investment transaction costs	-	-	-	11	-	-	11
Management fees charged to capital	-	-	-	-	(201)	-	(201)
Reallocation of management fees charged to capital	-	-	-	363	(363)	-	-
Tax credited to capital	-	-	-	-	77	-	77
Revenue return for the year	-	-	-	470	-	-	470
As at 31 December 2014	165	-	1	15,268	(312)	182	15,304

Audited Income Statement
for the year ended 31 December 2014

	Year ended			Year ended
	31 December 2014			31 December 2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000

Realised losses on investments	-	(2,460)	(2,460)	-	(816)	(816)
Investment holding gains/(losses)	-	5,219	5,219	-	(1,178)	(1,178)
Income	2,215	-	2,215	1,341	-	1,341
Investment management fees	(250)	(750)	(1,000)	(234)	(702)	(936)
Other expenses	(374)	-	(374)	(365)	-	(365)

Return/(loss) on ordinary activities before taxation	1,591	2,009	3,600	742	(2,696)	(1,954)

Taxation	(250)	250	-	(113)	113	-


Return/(loss) on ordinary activities after taxation	1,341	2,259	3,600	629	(2,583)	(1,954)

Return/(loss) per share:
Ordinary Share	1.9p	7.4p	9.3p	0.8p	(5.9)p	(5.1)p

Planned Exit Share	2.6p	(12.0)p	(9.4)p	1.2p	(13.2)p	(12.0)p

Infrastructure Share	2.8p	1.0p	3.8p	1.9p	(0.8)p	1.1p

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	Distributable reserve	Capital reserve	Revaluation reserve	Total
Year ended 31 December 2014	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Company
As at 1 January 2014	535	7,660	397	46,512	6,415	(10,115)	51,404
Share issues in the year	142	13,964	-	-	-	-	14,106
Expenses in relation to share issues	-	(592)	-	(101)	-	-	(693)
Repurchase of shares	(6)	-	6	(576)	-	-	(576)
Net realised losses on disposal of investments	-	-	-	-	(2,460)	-	(2,460)
Investment holding gains	-	-	-	-	-	5,219	5,219
Dividends	-	-	-	(4,406)	-	-	(4,406)
Reallocation of dividends*	-	-	-	(8,432)	8,432	-	-
Investment transaction costs	-	-	-	20	-	-	20
Management fees charged to capital	-	-	-	-	(750)	-	(750)
Reallocation of management fees charged to capital**	-	-	-	2,937	(2,937)	-	-
Tax credited to capital	-	-	-	-	250	-	250
Revenue return for the year	-	-	-	1,341	-	-	1,341
As at 31 December 2014	671	21,032	403	37,295	8,950	(4,896)	63,455

	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
Year ended 31 December 2013	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Company
As at 1 January 2013	500	19,290	390	31,852	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	46,512	6,415	(10,115)	51,404

* Dividends have been reallocated to the Distributable reserve during the year, which the Directors feel is more appropriate treatment.
** Management fees charged to capital have been reallocated to the Capital reserve during the year, which the Directors feel is more appropriate.

Audited Balance Sheet
at 31 December 2014

		Registered Number: 03421340

	As at	As at
	31 December 2014	31 December 2013
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	43,370	37,125

Current assets
Debtors	5,849	2,207
Money market securities and other deposits	7,156	7,130
Cash	7,352	5,163
	20,357	14,500

Creditors
Amounts falling due within one year	(272)	(221)
Net current assets	20,085	14,279
Net assets	63,455	51,404

Capital and reserves
Called-up share capital	671	535
Share premium account	21,032	7,660
Capital redemption reserve	403	397
Distributable reserve	37,295	46,512
Capital reserve	8,950	6,415
Revaluation reserve	(4,896)	(10,115)

Equity shareholders' funds	63,455	51,404


Net asset value per share:

Ordinary Share	99.4p	101.0p

Planned Exit Share	65.0p	82.5p

Infrastructure Share	92.4p	91.5p

The financial statements on pages 49 to 69 of the Annual Report and Accounts were approved by the Board of Directors and authorised for issue on 28 April 2015 and were signed on its behalf by:

John Gregory
Director

Audited Cash Flow Statement
for the year ended 31 December 2014

	Year ended	Year ended
	31 December 2014	31 December 2013
	£'000	£'000
Cash flow from operating activities
Investment income received	1,168	1,225
Dividends received from investments	315	169
Deposit and similar interest received	32	8
Investment management fees paid	(980)	(865)
Secretarial fees paid	(100)	(96)
Other cash payments	(118)	(365)

Net cash inflow from operating activities and returns on investment	317	76

Returns on investment and servicing of finance
Purchase of unquoted investments and investments quoted on AiM	(10,652)	(12,661)
Net proceeds on sale of investments	7,615	17,478
Net proceeds from deferred consideration	644	249
Net capital (outflow)/inflow from financial investment	(2,393)	5,066


Taxation	-	-
Equity dividends paid	(4,290)	(2,053)

Management of liquid resources
Movement in money market funds	(26)	(3,711)
	(6,392)	(622)
Financing
Proceeds of fund raising	9,613	4,365
Expenses of fund raising	(453)	(187)
Repurchase of own shares	(579)	(702)
	8,581	3,476
Net inflow of cash in the year	2,189	2,854

Reconciliation of net cash flow to movement in net funds
Increase in cash for the year	2,189	2,854
Net cash at start of year	5,163	2,309
Net cash at end of year	7,352	5,163

Analysis of changes in net debt	At 1 January 2014	Cashflow	At 31 December 2014
	£'000	£'000	£'000
Cash and cash equivalents	5,163	2,189	7,352

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 2014. All investments held by the Company are classified as 'fair value through the profit and loss'. Unquoted investments have been valued in accordance with IPEVC guidelines. Quoted investments are stated at bid prices in accordance with the IPEVC guidelines and Generally Accepted Accounting Practice.

2. These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 December 2014, which were unqualified and did not contain statements under S498(2) of the Companies Act 2006 or S498(3) of the Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 31 December 2014 including an unqualified audit report and containing no statements under the Companies Act 2006 will be delivered to the Registrar of Companies in due course.

3. Copies of the Annual Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG and can be accessed on the following website: www.foresightgroup.eu

4. Net asset value per 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 2014			31 December 2013

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

Net assets	£44,208,000	£3,943,000	£15,304,000	£31,131,000	£5,044,000	£15,229,000
No. of shares at year end	44,485,151	6,063,626	16,567,066	30,829,144	6,115,511	16,647,858
Net asset value per share	99.4p	65.0p	92.4p	101.0p	82.5p	91.5p

5. Return per share

	Year ended			Year ended
	31 December 2014			31 December 2013
	Ordinary Share	Planned Exit Share	Infrastructure Share	Ordinary Share	Planned Exit Share	Infrastructure Share
	£'000	£'000	£'000	£'000	£'000	£'000

Total return after taxation	3,551	(576)	625	(1,411)	(734)	191
Total return per share (note a)	9.3p	(9.4)p	3.8p	(5.1)p	(12.0)p	1.1p

Revenue return from ordinary activities after taxation	713	158	470	232	74	323
Revenue return per share (note b)	1.9p	2.6p	2.8p	0.8p	1.2p	1.9p

Capital return from ordinary shares after taxation	2,838	(734)	155	(1,643)	(808)	(132)
Capital return per share (note c)	7.4p	(12.0)p	1.0p	(5.9)p	(13.2)p	(0.8)p

Weighted average number of shares in issue in the year	38,040,734	6,095,558	16,613,023	27,776,607	6,125,011	16,647,858

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 28 May 2015 at the offices of Foresight Group LLP, The Shard, 32 London Bridge Street, London, SE1 9SG.

7. Income

	Year ended	Year ended
	31 December 2014	31 December 2013
	£'000	£'000

Loan Stock interest	1,869	1,164
Dividends	314	169
Overseas based Open Ended Investment Companies ("OEICs")	32	6
Bank deposits	-	2
	2,215	1,341

8. Investments

	2014	2013
	£'000	£'000
Company
Quoted investments	-	-
Unquoted investments	43,370	37,125

	43,370	37,125


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

Book cost as at 1 January 2014	-	47,430	47,430
Investment holding losses	-	(10,305)	(10,305)
Valuation at 1 January 2014	-	37,125	37,125

Movements in the period:
Purchases at cost*	-	11,236	11,236
Disposal proceeds	-	(7,605)	(7,605)
Realised losses**	-	(2,414)	(2,414)
Investment holding gains	-	5,028	5,028
Valuation at 31 December 2014	-	43,370	43,370

Book cost at 31 December 2014	-	48,647	48,647
Investment holding losses	-	(5,277)	(5,277)
Valuation at 31 December 2014	-	43,370	43,370


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

Book cost as at 1 January 2014	-	27,388	27,388
Investment holding losses	-	(10,115)	(10,115)
Valuation at 1 January 2014	-	17,273	17,273

Movements in the period:
Purchases at cost*	-	6,395	6,395
Disposal proceeds	-	(1,933)	(1,933)
Realised losses**	-	(2,511)	(2,511)
Investment holding gains	-	5,550	5,550
Valuation at 31 December 2014	-	24,774	24,774

Book cost at 31 December 2014	-	29,339	29,339
Investment holding losses	-	(4,565)	(4,565)
Valuation at 31 December 2014	-	24,774	24,774

* Capitalised interest of £379,000 was recognised by the Ordinary Shares fund in the year, and is included within purchases at cost. **Realised losses include a transfer of £700,000 relating to a bank overdraft guarantee facility provided by the Ordinary Shares fund from investment holding gains. During the year, £10,000 was received from the bank overdraft guarantee and is included within realised losses. Deferred consideration of £644,000 was received by the Ordinary Shares fund in the year and is included within realised losses in the income statement. This was offset by a decrease in the deferred consideration debtor of £509,000 which is included within investment holding gains in the income statement.





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

Book cost as at 1 January 2014	-	5,189	5,189
Investment holding losses	-	(190)	(190)
Valuation at 1 January 2014	-	4,999	4,999

Movements in the period:
Purchases at cost	-	100	100
Disposal proceeds	-	(775)	(775)
Realised gains	-	-	-
Investment holding losses	-	(704)	(704)
Valuation at 31 December 2014	-	3,620	3,620

Book cost at 31 December 2014	-	4,514	4,514
Investment holding losses	-	(894)	(894)
Valuation at 31 December 2014	-	3,620	3,620


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

Book cost as at 1 January 2014	-	14,853	14,853
Investment holding gains	-	-	-
Valuation at 1 January 2014	-	14,853	14,853

Movements in the period:
Purchases at cost	-	4,741	4,741
Disposal proceeds	-	(4,897)	(4,897)
Realised gains	-	97	97
Investment holding gains	-	182	182
Valuation at 31 December 2014	-	14,976	14,976

Book cost at 31 December 2014	-	14,794	14,794
Investment holding gains	-	182	182
Valuation at 31 December 2014	-	14,976	14,976

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 and other investments earned fees of £1,000,000 during the year (2013: £936,000). Foresight Fund Managers Limited, Company Secretary, received fees excluding VAT of £100,000 (2013: £100,000) during the year.

At the balance sheet date, there was £159,000 (2013: £127,000) due to Foresight Group and £nil (2013: £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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