FORESIGHT
VCT PLC
ANNUAL REPORT
AND ACCOUNTS
31 DECEMBER 2021
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
SHAREHOLDER INFORMATION
Foresight VCT plc is a Venture
Capital Trust aiming to provide
investors with regular dividends
and capital growth from a portfolio
of investments infast‑growing
unquoted companies in the UK.
For details on the Company’s investment policy
pleaserefer to the Strategic Report.
www.foresightvct.com
Enquiries
The Board and Manager are always keen to hear from
investors. If you have any feedback about the service
you receive or any queries relating to Foresight VCT plc,
please contact the Investor Relations team:
020 3667 8181
InvestorRelations@foresightgroup.eu
www.foresightgroup.eu
Annual and Half‑Yearly Reports, as well as quarterly
factsheets and information on new investments, can
beviewed online.
As part of the Manager’s investor communications
policy, investor forums are held throughout the year.
Shareholders can also arrange a mutually convenient time
to meet the Manager’s investment team. Please contact
Investor Relations if you are interested.
Dividends
All cash dividends will be credited to your nominated
bank/building society account. Your options are:
•
Receive your dividends in sterling via direct credit
to a UK domiciled bank account
•
Reinvest your dividends for additional shares in
the Company through our dividend reinvestment
scheme
www.investorcentre.co.uk
Investors can manage their shareholding online using
Investor Centre, Computershare’s secure website.
Shareholders just require their Shareholder
Reference Number (“SRN”), which can be found
on any communications previously received from
Computershare, to access the following:
Holding enquiry Balances l Values History l Payments
lReinvestments
Payments enquiry Dividends l Other payment types
Address change Change registered address to which
allcommunications are sent
Bank details update Please ensure bank details are up
todate in order to receive your dividends
Outstanding payments Reissue payments using our
online replacement service
Downloadable forms Dividend mandates l Stock transfer
l Dividend reinvestment l Change of address
Alternatively, you can contact Computershare by
phoneon 0370703 6388
Key dates
Annual General Meeting 31 May 2022
Half‑Yearly results to 30 June 2022 September 2022
Annual results to 31 December 2022 April 2023
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
CO NTENTS
Strategic Report
Financial Highlights 2
Chair’s Statement 4
Company Objectives and KPIs 10
Manager’s Review 14
Top Ten Investments 24
Portfolio Overview 30
About the Manager 34
Co-Investments 36
Stakeholders and S172 37
Responsible Investment 38
Risks 40
Viability Statement 42
Governance
Board of Directors 44
Directors’ Report 46
Corporate Governance 52
Audit Committee Report 56
Directors’ Remuneration
Report 58
Statement of Directors’
Responsibilities 62
Financial Statements
Independent Auditor’s Report 64
Income Statement 70
Reconciliation ofMovements
inShareholders’Funds 71
Balance Sheet 72
Cash Flow Statement 73
Notes to the Accounts 74
Notice of Annual General
Meeting 89
C Shares Dividend History and
NAV Total Return 93
Glossary of Terms 94
Financial Conduct Authority 95
Corporate Information 96
Additional Information IBC
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 1
WWW.FORESIGHTVCT.COM
2 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
FINANCIAL HIGHLIGHTS
“In the year, the value of the investment portfolio
rose by £34.3 million as a result of an increase of
£42.0million in the valuation of investments plus
£15.1 million of new investments offset by sales of
investments totalling £22.8 million.”
•
Total net assets £185.1 million
•
A final dividend of 3.7p per share was paid on
25June2021, costing £7.5million
•
Net Asset Value per share increased by 22.3%
from 73.7p at 31 December 2020 to90.1p
at 31December2021. After adding back
thepayment of a 3.7p dividend made on
25June2021, NAV Total Return per share was
93.8p, increasing the total return in the year
to27.3%
•
Six new investments totalling £9.9million and
six follow-on investments totalling £5.2million
madeduring the year
•
The value of the investment portfolio rose by
£34.3million in the year to 31December2021.
This wasdriven by an increase of £42.0 million in
the valuation of investments plus £15.1 million of
new investments offset by sales of investments
totalling £22.8 million
•
The offer for subscription launched in July2021
wasclosed on 8 April 2022 and raised a total of
£23.4million after expenses
•
The Board is recommending a final dividendfor
the year ended 31December2021 of 4.5p per
share, tobepaid on 24 June 2022
Key metrics
1 year 3 years 5 years
Movement in NAV Total Return as at 31 December 2021
1
27.3% 30.7% 38.9%
1. Definitions of these Alternative Performance Measures (“APMs”) can be found in the Glossary on page 94.
£185.1m
Total Net Assets
as at 31 December 2021
£42.0m
Uplift in portfolio value
in year to 31 December 2021
3.7p
Dividend paid
25 June 2021
90.1p
NAV per share
as at 31 December 2021
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 3
Place of business of portfolio companies
Key metrics
31 December 31 December
2021 2020
Total net assets £185.1m £151.8m
Net Asset Value per share 90.1p 73.7p
Movement in Net Asset Value Total Return during the year
1
27.3% 0.7%
Share price 76.5p 59.5p
Share Price Total Return
1, 2
223.9p 216.0p
Dividend per share paid in the year
1
3.7p 3.3p
Dividend yield
1
4.8% 5.5%
Shares in issue 205,591,087 205,954,017
2021 2020
Discount to NAV at 31 December
1
15.1% 19.3%
Average discount on buybacks
1
10.0% 10.1%
Shares bought back during the year under review
1
8,657,404 4,281,119
Shares issued through fundraising 6,508,226 34,331,524
Shares issued under the dividend reinvestment scheme 1,786,248 1,944,207
Ongoing charges ratio (based on net assets at 31 December)
1
2.0% 2.1%
1. Definitions of these Alternative Performance Measures (“APMs”) can be found in the Glossary on page 94.
2. Based on 100.0p invested in the original Ordinary Share class launched in 1997.
Key:
Technology, Media &
Telecommunications
Industrials
& Manufacturing
Healthcare
Business Services
Consumer & Leisure
Other
4 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
I would like to draw your attention to the separate section
on page 7 which includes information on material post
year end events.
Overview of 2021
The NAV per share increased from 73.7p to 90.1p during
the year and, after adding back the dividend of 3.7p
which was paid in June 2021, the total return was an
increase to 93.8p. Thisrepresents a strong investment
performance with a NAV Total Return per share of 27.3%
for the 12months.
The widespread rollout of the vaccination programme
in the UK in 2021 has fortunately resulted in a reduction
in hospitalisations and deaths from COVID-19 despite
the emergence of new, more transmissible variants.
As a consequence, Government restrictions have
gradually been lifted and life has begun to return to a
more normal pattern, although some structural changes
may now persist in the way that we live and work,
as the use of technology has accelerated during this
period.
After a sharp drop in value in 2020, the Company’s
portfolio in aggregate experienced a recovery which
continued strongly throughout 2021. Many of the
portfolio companies have successfully adapted to
the new economic landscape, with some performing
extremely well and demonstrating the strength of their
management teams.
A minority, particularly those companies in the travel,
retail and hospitality sectors, struggled as a result of
lockdowns, social distancing and travel restrictions,
but these businesses are beginning to bounce back
as pent-up demand is unlocked. At the end of 2021,
29 companies in the existing portfolio recorded a
combined increase in unrealised value of £41.6 million,
offset by 11companies recording an aggregate fall in
unrealised value of £4.0million. Three investments
were sold in full and one partially.
For the last two years the Manager has continued to work
very closely with all the businesses in the portfolio to help
them minimise the damage to their operations from the
pandemic and to revise their strategies where necessary.
Many of the members of the private equity team have
done this whilst working from home. Despite this
disruption to their working lives, they have also managed
to source a growing number of investment opportunities
during the year and added several new investments to
the portfolio. It is a sign of the improving outlook that the
team’s initial focus on value preservation of the portfolio
during the worst of the pandemic has since changed to
investment growth and acquisition. The Board would like
to thank the members of the team for their dedication
and diligence during this time.
I am pleased to present the
Company’s audited Annual Report
and Accounts for the year ended
31 December 2021 and to report a
significant uplift in Net Asset Value
(“NAV”) per share for the year.
Margaret Littlejohns
Chair of Foresight VCT plc
CHAIR’S STATEMENT
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 5
Strategy
The Board and the Manager continue to pursue a strategy
for the Company which includes the following four key
objectives:
•
Further development of Net Asset Value Total Return
while continuing to grow the Company’s assets
•
Payment of an annual dividend of at least 5% of
theNAV per share (based on the last announced
NAVper share) and at the same time endeavouring,
at a minimum, to maintain the NAV per share on
ayear-on-year basis
•
The implementation of a significant number of new
andfollow-on qualifying investments every year
•
Maintaining a programme of regular share buybacks
at a discount in the region of 10% to the prevailing
NAV per share
The Board and the Manager believe that these key
objectives remain appropriate and the Company’s
performance in relation to each of them over the past
year is reviewed in more detail below.
Net Asset Value
As at 31December2021 the NAV of the Company
was £185.1 million (31December2020: £151.8 million),
which is in line with the Board’s objective of growing
theCompany’s assets.
At the start of the year, 87% of the Company’s assets
were already invested and the Board believed it would
be in the Company’s best interest to raise further
funds to provide liquidity for its activities in 2021 and
beyond. On 26July2021 the Company launched an
offer for subscription to raise up to £20 million, with an
over-allotment facility to raise up to a further £10 million,
through the issue of new shares. By the end of 2021,
£5.3million of capital had been raised net of expenses
and, as at the date of this report, funds raised have
increased to £23.4 million, of which £18.1 million has been
raised post year end, as detailed in the post balance sheet
events note 20. We would like to thank those existing
shareholders who have supported this offer and welcome
all new shareholders to theCompany.
During the year the NAV per share increased by
22.3% from 73.7p at 31 December 2020 to 90.1p at
31December2021. After adding back the payment of
a dividend of 3.7p per share on 25 June 2021, which is
detailed below, NAV Total Return per share for the year
was 93.8p, representing a total return of 27.3%.
After paying the dividend of 5.0% of NAV, the Company
has exceeded its objective of maintaining the NAV per
share on a year-on-year basis.
The total return per share from an investment made
fiveyears ago would be 38.9%, which is above the
minimum target return set by the Board of 5% per annum.
Exceeding this target is at the centre of the Company’s
current andfuture portfolio management strategy.
6 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Dividends
The final dividend for the year ended 31December2020
of 3.7p per share was paid on 25June2021 based on
an ex-dividend date of 10 June 2021, with a record
date of 11June2021. The total cost of this dividend was
£7.5million, including shares allotted under the dividend
reinvestment scheme.
The Board is recommending a final dividend for the
year ended 31December2021 of 4.5p per share, to be
paid on 24 June 2022 based on an ex-dividend date of
9June2022, with a record date of 10June2022.
The Company continues to achieve its target dividend
yield of 5% of NAV, which was set in 2019 in light of the
change in portfolio towards earlier-stage, higher-risk
companies, as required by the current VCT rules.
The Board and the Manager hope that this level may be
exceeded in future by payment of additional “special”
dividends as and when particularly successful portfolio
disposals areachieved.
Investment performance and portfolio activity
A detailed analysis of the investment portfolio
performance over the year is given in the Manager’s
Review.
During the year under review, the Manager completed
six new investments, mostly in the technology and
healthcare sectors, and six follow-on investments costing
£9.9 million and £5.2 million respectively. The Company
also disposed of three investments and partially disposed
of one investment, generating proceeds of £22.8 million
with a further £1.5 million of deferred consideration
included within debtors at the year end. Details of each
of these new portfolio companies and disposals can be
found in the Manager’s Review.
The Board and the Manager are confident that a more
significant number of new and follow-on investments can
be achieved in 2022 as the economy continues to open up
and more opportunities emerge.
After the year end, a new investment of £1.1 million was
made into Homelink Healthcare Limited and a further
follow-on investment of £0.5 million was made into
RovcoLimited.
The Company and Foresight Enterprise VCT plc have
the same Manager and share similar investment policies.
The Board closely monitors the extent and nature of the
pipeline of investment opportunities and is reassured
by the Manager’s confidence in being able to deploy
funds without compromising quality and to satisfy the
investment needs of both companies.
Responsible investing
The analysis of environmental, social and governance
(“ESG”) issues is embedded in the Manager’s investment
process and these factors are considered key in
determining the quality of a business and its long-term
success. Central to the Manager’s responsible investment
approach are five ESG principles that are applied to
evaluate investee companies, acquired since May 2018,
throughout the lifecycle of their investment, from their
initial review and acquisition to their final sale. Every year,
these portfolio companies are assessed and progress
measured against these principles. More detailed
information about the process can be found on page 38
of the Manager’s Review.
Buybacks
During the year the Company repurchased 8,657,404
shares for cancellation at an average discount of 10.0%,
achieving its objective of maintaining regular share
buybacks at a discount of 10.0%, as noted above. The
Board and the Manager consider that the ability to offer
to buy back shares at a target discount of approximately
10.0% is fair to both continuing and selling shareholders
and is an appropriate way to help underpin the discount
to NAV at which the shares trade.
Share buybacks are timed to avoid the Company’s closed
periods. Buybacks will generally take place, subject to
demand, during the following times of year:
•
April, after the Annual Report has been published
•
June, prior to the Half-Yearly reporting date of 30June
•
September, after the Half-Yearly Report has been
published
•
December, prior to the end of the financial year
Management charges, co-investment and
performance incentive
The annual management fee is an amount equal to 2.0%
of net assets, excluding cash balances above £20million,
which are charged at a reduced rate of 1.0%. This has
resulted in ongoing charges for the period ended
31December2021 of 2.0% of net assets, which is at the
lower end of the range when compared to competitor VCTs.
Since March 2017, co-investments made by the Manager
and individual members of the Manager’s private equity
team have totalled £1.0 million alongside the Company’s
investments of £70.9 million. The co-investment scheme
requires that the individual members of the team invest in
all of the Company’s investments from that date onwards
and prohibits selective “cherry picking” of co-investments.
If any individual team member opts out of co-investment,
they cannot invest in anything during that year.
CHAIR’S STATEMENT CONTINUED
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 7
The performance incentive scheme only applies after an
investment has been sold and the scheme incorporates
three different hurdles, all of which need to be achieved
at different stages before any performance fee can be
paid: an Investment Growth Hurdle for the individual
investment at exit and also two NAV Total Return Hurdles,
the first upon the exit of the investment and the second
three years later. The NAV Total Return Hurdle increases
each year, so the second NAV Total Return Hurdle will be
higher than the first. The continued improvement in the
Company’s net asset performance and in its NAV Total
Return per share has resulted in the initial NAV Total
Return Hurdle under the arrangement being met for the
first time.
As at 31December2021, the individual Investment
Growth Hurdles have been met for two realised and 13
unrealised investments out of the 31 new early-stage
investments made since the introduction of the
performance incentive arrangements and a contingent
liability of £4.9 million in respect of this is disclosed in
note 15. For the first time, the Company has provided
for a £0.3 million liability in relation to the Accrosoft
exit, which achieved two of the three hurdles at the date
of exit. An investment under the arrangement will only
qualify for the payment of a performance fee if all three
hurdles described above have been met.
More information on the performance incentive
arrangements (including an explanation of terms used
above) can be found in note 13 of these accounts.
Board composition
The Board continues to review its own performance
and undertakes succession planning to maintain an
appropriate level of independence, experience, diversity
and skills in order to be in a position to discharge its
responsibilities. 2021 saw some planned changes to the
composition of the Board.
The Board was delighted to appoint Patricia (Patty)
Dimond as a Non-Executive Director in February 2021.
Details of Patty’s experience and expertise can be found
in her biography on page 45.
After nearly 11 years as Chair, John Gregory retired
at the AGM on 27May2021, as planned. On behalf of
the Company, I would again like to thank John for his
significant contribution and commitment to the Company,
which has benefited enormously from his wisdom and
guidance during his service as Chair. My fellow Directors
and I wish John a happy retirement.
The Nomination Committee will continue its plans to
refresh the Board over the next two years and aims
to achieve a sensible balance between continuity and
reinvigoration in compliance with the AIC code.
Material post year end events
The Russian invasion of Ukraine in February 2022 has
created a humanitarian crisis in Europe on a scale not
seen for decades, with the war’s fatalities and casualties
mounting and millions of Ukrainian refugees seeking
shelter in neighbouring countries. The wider ramifications
of this tragedy are still unknown but inflationary
pressures worldwide are increasing, particularly in energy
and food, and supply chains, already under strain from
the pandemic, will continue to be disrupted. Thewar
has also increased the potential for further market
turmoil and cyber attacks. The portfolio has some
limited direct exposure to Russia and Ukraine but this
remains manageable. The Manager is working closely
with management teams of investee companies to be
prepared and plan for a deteriorating economy.
Since the year end, the Company has continued to
allot new shares under its Prospectus published on
26July2021, containing an offer for subscription to raise
up to £20million with an over-allotment facility to raise
a further £10 million. In advance of the allotment of the
Company’s new shares under this offer in March and as a
result of increased market volatility, the Board announced
on 18 March 2022 two unaudited NAVs per share: a NAV
of 90.1p per share as at 31 December 2021 and 87.5p
per share as at 28 February 2022. The reduction of
2.9% in NAV since 31 December 2021 follows from the
general decline in public markets since that date. Since
this announcement, allotments of new shares have been
based on a NAV per share of 87.5p, the most up to date
unaudited valuation at the time.
On 25 March 2022, in order to accommodate further
demand and in accordance with the terms of the
Prospectus, the Board decided to implement the
over-allotment facility in part to raise up to a further
£5million. The offer was closed to applications on
7April2022 and ended on 8April 2022 with gross funds
raised of £24.1million.
Shareholder communication
We were disappointed that we were not able to meet with
shareholders in person in 2021 as a result of the travel
restrictions imposed due to COVID-19. As an alternative,
shareholders were invited to a virtual AGM in May,
followed at the beginning of June by an online investor
forum facilitated by the Manager. We appreciate how
popular such events are with our investors and hope to
hold future events in person if safe to do so.
8 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Annual General Meeting
The Company’s Annual General Meeting will take place
on 31May2022 at 1.00pm and we look forward to
meeting as many of you as possible in person, providing
rules permit. Please refer to the formal notice on page
89 for further details in relation to the format of this
year’s meeting, including remote attendance. Voting
will be conducted on a poll rather than a show of hands
with the Chair of the AGM holding the proxy votes.
Wewouldencourage you to submit your votes by
proxyahead of the deadline of 1.00pm on 27 May 2022
and, if attending remotely, toforward any questions by
email to InvestorRelations@foresightgroup.eu in advance
of themeeting.
Outlook
The global economy has rebounded strongly this year
from the low levels of activity recorded in 2020, when the
pandemic first struck and successive lockdowns severely
impacted both supply and demand factors. However, the
legacy of COVID-19, combined with the ongoing impact
of Brexit and the current geopolitical conflict in Ukraine,
continue to challenge both our economy and society
and create uncertainty for businesses. In particular, the
risks of inflationary pressures, supply chain issues and
staff shortages are emerging and may impact the future
economic recovery. In these conditions, the Company’s
investments in unquoted, small, early-growth businesses
entail higher levels of risk, greater volatility in valuation
and lower liquidity than larger listed companies. It is
unlikely, therefore, given these new global developments
that the Company will generate the same level of total
return that has been achieved in 2021.
However, the Manager understands well the management
and business requirements of each of the companies
within the investment portfolio and is working closely
with them to help them adapt to, and grow within, this
changing environment.
The Company’s current portfolio of investments is
well diversified by number, business sector, size and
stage of development and overall has demonstrated
its relative resilience in the face of the pandemic and
its repercussions. We anticipate that the portfolio in
aggregate will also be able to withstand the increasing
challenges and uncertainties arising from the current
turmoil in Central Europe and will continue to prosper
over time.
The fundraising referred to earlier will provide additional
resources to make new acquisitions and enable the
Company to take advantage of the increasing numbers
of investment opportunities that are now emerging out
of the recent disruption. We are cautiously optimistic
that the existing portfolio and these new acquisitions
willgenerate long term value for shareholders.
Margaret Littlejohns
Chair
13 April 2022
CHAIR’S STATEMENT CONTINUED
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 9
Dividend per Dividend per
share share (rebased)
1
25 June 2021 3.7p 1.4p
19 June 2020 3.3p 1.3p
3 May 2019 5.0p 1.9p
4 May 2018 5.0p 1.9p
29 September 2017 4.0p 1.5p
3 April 2017 5.0p 1.9p
1 April 2016 7.0p 2.7p
13 March 2015 6.0p 2.3p
14 March 2014 10.0p 3.8p
14 June 2013 5.0p 1.9p
23 March 2012 7.5p 2.9p
17 June 2011 5.0p 1.9p
29 May 2009 1.0p 0.7p
7 March 2008 5.0p 3.4p
26 May 2006 0.5p 0.5p
5 July 2004 52.0p 52.0p
22 September 2003 8.0p 8.0p
30 June 2003 0.5p 0.5p
8 May 2000 100.0p 100.0p
6 August 1999 1.0p 1.0p
29 January 1999 3.2p 3.2p
Total dividends paid 194.7p
NAV per share based on 100.0p invested at launch 34.4p
NAV Total Return per share based on 100.0p invested at launch 229.1p
1. To get an accurate NAV Total Return per share in relation to the original ordinary share class launched in 1997, we have
rebased dividends and NAV to account for the merger of the original ordinary share class and the C share class in
January2007 (conversion ratio of 0.688075647795) and the subsequent reconstruction of the merged share class
(this being the current share class) in March 2011 (conversion ratio of 0.554417986).
4
2
0
31 December
2011
31 December
2012
31 December
2013
31 December
2014
31 December
2015
31 December
2016
31 December
2017
31 December
2018
31 December
2019
31 December
2020
31 December
2021
8
6
12
10
80
85
90
95
100
105
110
115
120
125
Dividends paid and NAV Total Return (pence)
1
Dividends paid (p)
NAV Total Return (p)
Dividend paid (p) NAV Total Return (p)
1. Based on an initial investment on 1 January 2012.
In addition to the details above, holders of the original C share class (which became the current ordinary shares in
January 2007) have received total dividends as set out on page 93.
10 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
COMPANY OBJECTIVES AND KPIS
Objective Progress against objective KPIs
Further development of Net
Asset Value Total Return
while continuing to grow the
Company’s assets
•
The NAV of the Company grew from
£151.8million as at 31 December 2020 to
£185.1million as at 31 December 2021.
•
During the year the NAV per share increased
by 22.3% from 73.7p at 31December 2020 to
90.1p at 31December 2021.
•
After adding back the payment of a 3.7p
dividend made on 25 June 2021, NAV Total
Return per share was 93.8p, increasing the
total return in the year to 27.3%.
•
The total return per share from an investment
made five years ago is 38.9%, which is above
the minimum target return set by the Board of
5% per annum.
90.1p
NAV per share
(31 December 2020: 73.7p)
27.3%
Movement in NAV Total Return
(31 December 2020: 0.7%)
2.0%
Ongoing Charges Ratio
(31 December 2020: 2.1%)
Payment of an annual dividend
of at least 5% of the last
announced NAV per share and
at the same time endeavouring,
at a minimum, to maintain
the NAV per share on a
year‑on‑year basis
•
The final dividend for the year ended
31December 2020 of 3.7p per share was paid
on 25 June 2021 based on an ex-dividend
date of 10June 2021, with a record date of
11June2021.
•
This achieved the minimum target dividend
per share of 5% of the last announced NAV
pershare of 73.7p as at 31 December 2020.
•
This was set in 2019 in light of the change
inthe portfolio towards earlier-stage,
higher-risk companies, as required by the
current VCTrules.
3.7p
Dividend paid
25 June 2021
(19 June 2020: 3.3p)
The implementation of a
significant number of new
and follow‑on qualifying
investments every year
•
During the year the Manager completed six
new investments, mostly in the technology
and healthcare sectors, and six follow-on
investments costing £9.9 million and
£5.2million respectively. Details of each of
these new portfolio companies can be found
inthe Manager’s Review.
•
This level of new investment was in line with
the Board’s expectations, havingsuccessfully
supported the existing portfolio through the
various stages of the pandemic.
•
The Board and the Manager are confident
that a more significant number of new and
follow-on investments can be achieved in
2022 as the economy continues to open up
and more opportunities emerge.
£15.1m
Total deployment
In year to 31 December 2021
(31 December 2020: £7.7m)
£42.0m
Uplift in portfolio value
In year to 31 December 2021
(31 December 2020: £4.8m)
Maintaining a programme of
regular share buybacks at a
discount in the region of 10%
to the prevailing NAV per share
•
During the year, the Company repurchased
8,657,404 shares for cancellation at an
average discount of 10.0%, achieving its
objective of maintaining regular share
buybacks at a discount of 10.0%, as noted
above.
8,657,404
Number of shares bought back
In year to 31 December 2021
(31 December 2020: 4,281,119)
10.0%
Average discount on buybacks
In year to 31 December 2021
(31 December 2020: 10.1%)
Investment objective
To provide private investors with regular dividends and capital growth from a portfolio of investments in
fast-growing unquoted companies in the UK.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
EVOLUTION OF FORESIGHT VCT PLC
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 11
1997
Foresight VCT (formerly Foresight Technology VCT plc) was launched in November 1997, initially
raising £10.9 million through an issue of ordinary shares (original Ordinary Shares) forinvestment
in technology-focused companies.
1999
A separate class of C Shares was launched in 1999, initially raising £32.6million.
2007
In January 2007, the original Ordinary Share and C Share classes were merged into one class
ofOrdinary Shares and the Company was renamed Foresight VCT plc.
2010
Foresight VCT and Foresight 2 VCT raised £12 million of Planned Exit Shares in the 2009/10
tax year.
2011
In March 2011, Keydata Income VCT 1 plc and Keydata Income VCT 2 plc were merged into the
Ordinary Share class of Foresight VCT plc.
2011
In March 2011, a reconstruction of the Ordinary Shares took place to rebase the NAV per share
to 100p.
2012
Foresight VCT and Foresight 2 VCT raised more than £30 million in the 2011/12 tax year
throughthe launch of a new Infrastructure Share class.
2015
On 18 December 2015, following shareholder approval, Foresight 2 VCT plc was merged into
Foresight VCT plc, creating the then third largest VCT in the UK.
2017
The Company completed the sale of all investments in the Planned Exit Share class and the
Infrastructure Share class. These were wound up, with final distributions made to shareholders on
29 December 2017.
2018
Since 24 January 2018, the Company has comprised one single class of share, the Ordinary Shares.
2022
On 8 April 2022, the Company closed its latest offer for subscription after raising £24.1 million.
12 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
COMPANY OBJECTIVES AND KPIS CONTINUED
Performance and Key Performance Indicators
(“KPIs”)
The Board expects the Manager to deliver a performance
which meets the objectives of the Company. The KPIs
covering these objectives are growth in Net Asset Value
per share and dividend payment, which, when combined,
give an overall NAV per share or NAV Total Return.
Additional KPIs and Alternative Performance Measures
(“APMs”) reviewed by the Board include the total
expenses as a proportion of shareholders’ funds. KPIs
and APMs allow performance comparisons to be made
between VCTs.
A record of some of these indicators is contained in
the Key Metrics section on page 3 and the Company
Objectives and KPIs section on pages 10 to 13.
The ongoing charges ratio for the year was 2.0% of net
assets. Share buybacks were completed at an average
discount of 10.0%. Further detail of the Company’s KPIs
and APMs can be found in the Glossary of Terms on
page94.
A review of the Company’s performance during the
financial year, the position of the Company at the year
end and the outlook for the coming year is contained
within the Manager’s Review. The Board assesses the
performance of the Manager in meeting the Company’s
objective against the primary KPIs and APMs highlighted
above.
Investments in unquoted companies at an early stage of
their development will involve some disappointments.
However, investing the Company’s funds in companies
with high growth characteristics with the potential
to become strong performers within their respective
fields creates an opportunity for attractive returns to
shareholders.
Strategies for achieving objectives
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 securities
The Company invests in a range of securities including,
but not limited to, ordinary and preference shares, loan
stock, convertible securities, fixed-interest securities and
cash. Unquoted investments are usually structured as a
combination of ordinary shares and loan stock, while AIM
investments are primarily held in ordinary shares. Pending
investment in unquoted or AIM-listed securities, cash is
primarily held in interest-bearing accounts as well as in a
range of permitted liquidity investments.
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 satisfy a number of tests set out in Part 6 of the
Income Tax Act 2007 to be classed as VCT qualifying
holdings.
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 and a range of
permitted liquidity investments.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different
businesses within different industry sectors at different
stages of development, 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 investment to such a company, is limited by VCT
legislation to 15% of the Company’s investments (which
includes cash) by VCT value at the time of investment.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 13
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 appointment of an
investor director to investee company boards.
Borrowing powers
The Company is permitted by its Articles to borrow
an amount not exceeding a sum 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). The
Company does not currently borrow, and the Board has
no plans to do so.
Other funds managed by Foresight Group
The Company may invest alongside other funds managed
or advised by the Manager. Where more than one fund
is able to participate in an investment opportunity,
allocations will generally be made based on the
Manager’s allocation policy, other than where a fund has
a pre-existing investment where the incumbent fund will
have priority. Implementation of this policy will be subject
to the availability of monies to make the investment and
other portfolio considerations, such as the portfolio
diversity and the need to maintain VCT status.
The Manager provides investment management services
or advice to Foresight Enterprise VCT plc, Foresight Solar
& Technology VCT plc, Foresight Nottingham Fund LP,
Foresight Environmental Fund LP, Foresight Solar Fund
Limited, Foresight Inheritance Tax Solutions, Foresight
AD EIS, Foresight Energy Infrastructure EIS, Foresight
Regional Investment LP, Foresight Williams Technology
EIS Fund, Foresight Italian Green Bond Fund, MEIF ESEM
Equity LP, Scottish Growth Scheme — Foresight Group
Equity Partners LP, NI Opportunities LP, JLEN Group
Limited, Foresight Regional Investment II LP, Foresight
Energy Infrastructure Partners S.C.Sp, Foresight Regional
Investment III LP, NI Opportunities II LP and Foresight
Sustainable Forestry Company plc.
VCT regulation
The investment policy is designed to ensure that the
Company continues to qualify and is approved as a
VCTby HMRC. Amongst other conditions, the Company
may not invest more than 15% of its total investments
and cash by VCT value, at the time of making the
investment, in a single company and must also have
at least 80% by VCT value of its investments and cash
throughout the period in shares or securities in qualifying
holdings. In addition, in aggregate, 70% of a VCT’s
qualifying investments (30% for investments made
before 6April2018 from funds raised before 6April2011)
by VCT value must be in ordinary shares which carry
no preferential rights to assets on a winding up or to
dividends (apart from certain non-cumulative fixed
preferential rights). For each individual investment, a
minimum of 10% of the investment must be in ordinary
shares of that company.
Dividend policy
The Board will endeavour to pay annual dividends of
at least 5% of the NAV per share based on the last
announced NAV per share. The aim of the Board and
the Manager is for future investment performance to
support this level of distribution, whilst also at least
maintaining the NAV per share on a year-on-year basis.
Inthe event that significant realised gains arise on sales
of investments greatly in excess of their carrying value,
the Board will consider payment of special dividends.
Share buyback policy
It is the Company’s policy, subject to adequate cash
availability and distributable reserves, to consider
repurchasing shares when they become available in order
to help provide liquidity to the market in the Company’s
shares.
14 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
MANAGER’S REVIEW
The Board has appointed Foresight Group
LLP (“the Manager”) to provide investment
management and administration services.
Portfolio summary
As at 31 December 2021, the Company’s portfolio
comprised 49 investments with a total cost of
£102.7million and a valuation of £167.0 million. The
portfolio is diversified by sector, transaction type and
maturity profile. Details of the ten largest investments by
valuation, including an update on their performance, are
provided on pages 24 to 28.
In the year, the value of the investment portfolio rose by
£34.3 million as a result of an increase of £42.0 million
in the valuation of investments plus £15.1 million of new
investments offset by sales of investments totalling
£22.8million. Overall, the portfolio has performed well
as markets reopened following the impact of COVID-19.
In line with the Board’s strategic objectives, the Manager
remains focused on growing the Company through
further development of Net Asset Value Total Return
whilst paying an annual dividend to shareholders of at
least 5% of the last announced NAV per share. In the
year, Net Asset Value Total Return was 27.3%, net assets
increased 22.0% to £185.1 million and an annual dividend
of 5% of the NAV per share as at 31 December 2020 was
paid, meaning that the Company has successfully met
these objectives.
New investments
The Manager was able to meet prospective companies in
person again, an important part of assessing investments
and developing relationships with management teams.
Many management teams have successfully steered their
businesses through the pandemic whilst developing
clearer medium and longer-term growth plans.
The Manager has also invested further in its origination
capabilities and identified a large number of appropriate
investment opportunities during the year.
Over the course of 2021, six new investments were
completed, investing a total of £9.9 million. Behind these,
there continues to be a strong pipeline of opportunities
that the Manager expects to convert during the next
12months. Follow-on investments totalling £5.2 million
were also made in existing investee companies.
Portfolio diversification
Sector by
cost
Sector by
valuation
Key:
Technology, Media &
Telecommunications42%|34%
Consumer & Leisure21%|16%
Healthcare15%|17%
Business Services12%|13%
Industrials &
Manufacturing9%|17%
Other1%|3%
Cost Valuation
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 15
Hexarad Group Limited
In June 2021, the Company invested £0.8 million into
Hexarad Group, an early-stage, high-growth healthcare
technology company, providing teleradiology services
to NHS Trusts and UK private healthcare customers.
Headquartered in London, the company was founded
in 2016 by a team of NHS consultant radiologists and
differentiates itself through its clinical leadership and
technology-led proposition. The investment into Hexarad
Group will enable the company to support more NHS and
private healthcare customers and further improve how
they use the technology which is core to its customer
andradiologist experience.
NorthWest EHealth Limited
In June 2021, the Company invested £1.5 million into
NorthWest EHealth, which provides software and services
to the clinical trials market, allowing pharmaceutical
companies and contract research organisations to
conduct feasibility studies, recruit patients and run trials.
The investment will be used to expand the current data
network, enabling the company to support a larger
number of trials at a global level, increase product
development and expand the sales and marketing
teamto help build long-term, strategic relationships.
Additive Manufacturing Technologies Ltd
In June 2021, the Company invested £1.7 million
into Additive Manufacturing Technologies (“AMT”),
which manufactures systems that automate the
post-processing of 3D printed parts. AMT originally
received seed funding from Foresight Williams EIS
in September2019.Theadditional investment, made
alongside further investment from Foresight Williams
andother institutions, will be used to further accelerate
its commercial progress.
Callen‑Lenz Associates Limited
In August 2021, the Company made a £2.4 million
investment into Callen-Lenz Associates, a developer,
designer and manufacturer of high performance
unmanned aerial vehicles (“UAVs”) as well as components
and navigation and communication software for
UAVs. Callen-Lenz Associates delivers research and
development contracts for large public and private
sector clients, which create regulatory approved
technologies that are made into products and sold to
other commercial customers. Founded in 2007, it has four
revenue segments: research and development, hardware,
softwareand services which are mutually supportive
to clients as they move through the design and sales
process with the engineering team. The investment will
enable Callen-Lenz Associates to scale the business
through new hires in key operating and engineering
functions.
Newsflare Limited
In December 2021, the Company invested £2.0 million
intoNewsflare, a marketplace for user-generated video
(“UGV”) which currently has one of the largest video
libraries with fully cleared rights in the world, with over
244,000 licensable videos on its platform. Newsflare was
founded in 2011 and is headquartered in London with
staff in Los Angeles, New York and a technology team
in Bulgaria. This investment will allow the company to
focus on building its video library, attract new customers
by expanding the sales and marketing teams as well as
improving their platform and technology.
Crosstown Dough Ltd
In December 2021, the Company invested £1.5 million
into Crosstown Dough, a premium sweet treat brand
offering a range of doughnuts, recently complemented
by cookies and ice cream, with a growing vegan offering.
Founded in 2014, it has 14 bricks-and-mortar stores and
12 market stalls and food trucks, plus its goods are sold
online through its website, providing customers with an
on-demand or pre-order delivery service, which traded
well during the pandemic. The investment will support
the further rollout of the retail network as well as growing
the digital, wholesale and corporate/events revenue
streams.
16 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
MANAGER’S REVIEW CONTINUED
Follow-on investments
The Manager had expected that more portfolio
companies would need additional capital to support them
through continued difficult trading conditions resulting
from the lockdown. However, the portfolio has remained
relatively resilient, supported by the Manager.
The Manager has arranged follow-on investments into
sixcompanies during 2021, totalling £5.2 million.
Further details of each of these are provided below.
The additional equity injections in the period were mainly
used to support each company’s further growth plans,
such as launching new products or to expand into new
markets. As markets continue to open up, the Manager
remains cautiously optimistic about the health of the rest
of the portfolio and the need for follow-on funding over
the coming months.
Clubspark Group Ltd
In March 2021, Clubspark Group, a software platform
that provides sports clubs and centres with the ability
to manage operations such as court and equipment
booking, received a £1.5 million follow-on investment
from the Company. The investment will be used to push
further into international markets, including the US.
Fresh Relevance Ltd
In May 2021, a £0.7 million follow-on investment was
made into Fresh Relevance, a SaaS email marketing and
web personalisation platform providing online retailers
with personalised customer experiences and real-time
marketing tools. The investment will be used to support
further growth and accelerate the product rollout.
Biotherapy Services Limited
In July 2021, a follow-on investment of £0.7 million
was made into Biotherapy Services (“BTS”), a leading
pharmaceutical biotech company. BTS has developed
a wound care treatment for diabetic foot ulcers and
the additional funds will be used to support its clinical
development through trials.
Vio Healthtech Limited (formerly
Fertility Focus Limited)
In August 2021, a £0.3 million follow-on investment was
made into Vio Healthtech, a leading fertility monitoring
technology company that has developed registered
medical devices that enable women to predict ovulation.
The funding will be used to support a new product launch
over the next 12 months.
Fourth Wall Creative Limited
In November 2021, an additional £1.3 million was
invested into Fourth Wall Creative (“FWC”). FWC
designs, procures and fulfils branded merchandise
for use in membership welcome packs, season-ticket
presentation boxes and hospitality gifts for sports clubs
and organisations, predominantly football clubs in the UK
but increasingly cricket and rugby clubs. The investment
will be used to invest further in its technology to enable
the company to add more customers, allowing it to
secure long-term licence agreements with sports teams
to directly engage with the fans on their behalf. This will
allow FWC to drive fan engagement for the clubs.
Ten Health & Fitness Limited
In December 2021, Ten Health & Fitness, a multi-site
operator in the boutique health, wellbeing and fitness
market, received an additional investment of £0.6 million.
The funding will be used for the rollout strategy of more
sites as consumers return to in-person studio offerings
with an increased focus on health and wellbeing.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 17
Realisations
The M&A climate has been robust in certain sectors,
particularly in healthcare, technology and ecommerce.
The Manager continues to engage with a range of
potential acquirers of several portfolio companies, with
demand for these high-growth businesses demonstrated
by both private equity and trade buyers.
FFX Group Limited
In January 2021, the Company successfully sold its
investment in FFX Group, one of the UK’s largest
multi-channel, independent suppliers of high-quality
power tools, fixings and building supplies. Thetransaction
generated proceeds of £11.1 million at completion and
the Company will receive up to £0.3 million of deferred
consideration after 18 months, subject to certain
conditions. This implies a cash-on-cash return of 4.3x
the initial investment of £2.7 million, made in October
2015, which is equivalent to an IRR of c.32%. During the
investment period, FFX Group opened a new 60,000 sq
ft distribution centre and a new head office in Kent.
Thebusiness updated its brand and launched an
extensive range of its own products. Since the Company’s
investment, FFX Group more than tripled revenues and
increased headcount by over 125.
Mologic Ltd.
In July 2021, the Company successfully sold its
investment in Mologic, a health diagnostics company
providing both contract research services for clients and
developing its own range of proprietary point-of-care
diagnostics products. It was sold to Global Access Health,
a not-for-profit company financed by the Soros Economic
Development Fund, the impact investing arm of the Open
Society Foundations and a group of other philanthropic
organisations and investors. Thereturn multiple of
3.1x includes deferred consideration, reflecting an IRR
of c.38%. During the investment period, the Mologic
team had worked with the Manager to strengthen the
business, develop the product portfolio, increasing
turnover by over 165% and employee numbers by over
40%. The business has also developed a presence in
the US, opening an office on the East Coast, and also
amanufacturing partnership in West Africa.
Ixaris Systems Ltd
In August 2021, the Company sold its holding in Ixaris
Systems, an award-winning leader in B2B travel payment
technology, to Nium, a global B2B payments platform
based in Singapore, resulting in proceeds of c.£1.2million
representing a return of 1.5x cost. Ixaris Systems’ main
product is a pre-paid debit card providing flexible
funding and payment methods. Ixaris Systems has clients
in over 50 countries, ranging from the world’s largest
travel brands to independent travel agencies.
The decision was made to exit this investment as it would
likely have needed considerable further investment to
continue trading given the depressed travel industry.
Without a clear timeline on market recovery, a process
was undertaken to find the best acquirer for Ixaris
Systems led by a new executive chair brought in with the
Manager’s support.
Since investment, the Manager helped recruit key senior
team members as well as helping the business establish
partnerships with Visa and Mastercard and increase
headcount by over 75.
Accrosoft Limited
In October 2021, the Company completed the sale of
Accrosoft, a recruitment and employee onboarding
software company, to Acendre Technologies Inc., an
HR software business headquartered in the US. One
of its main products is Vacancy Filler (“VF”), software
which streamlines talent acquisition and recruitment
management for organisations. It helps millions of
candidates to apply for jobs easily and empowers
recruiters and hiring managers to recruit better and
faster. Acendre and Accrosoft’s VF product are
complementary businesses and by joining forces they
will be able to offer a recruitment and HR management
software platform across a much wider customer base,
aswell as establishing a presence in Europe.
Prior to the sale of Accrosoft, its subsidiary, Weduc,
was spun out, with the Company retaining its 19.4%
shareholding. Weduc is a leading communication
platform sold into the education sector and was initially
launched in 2017. Thecompany has grown significantly
since the Manager’s original investment, doubling its
customer numbers over thepast year.
This transaction generated proceeds of £4.3 million,
which represents a return of 1.8x and IRR of 25.9% over a
period ofthree years with further upside possible given
the ongoing investment in Weduc.
18 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Pipeline
At 31 December 2021, the Company had cash
reservesof £17.5 million, which will be used to fund
new and follow-on investments, buybacks and running
expenses. The Manager is seeing its pipeline of potential
investments grow and has a number of opportunities
under exclusivity or in due diligence, which it continues
toprogress.
The onset of COVID-19 and the resulting economic
downturn resulted in lower new investment activity in
2020, while 2021 saw an increased flow of opportunities
as restrictions reduced throughout the year. Depending
on the length and severity of any potential COVID-19
variants and associated restrictions, the Manager expects
to see a higher proportion of the Company’s deployment
focused on new investments in the short to medium term.
As the economy recovers from the worst effects of
thelockdowns, the Manager expects the demand for
funding to increase. However, given high levels of liquidity
in the market, investment opportunities are likely to be
reasonably competitive. Therefore, the Manager remains
focused on using its direct origination strategy to identify
off-market opportunities and supplement traditional
sources of deal flow.
Post-year end activity
HomeLink Healthcare Limited
Post year end, in March 2022, £1.1 million of growth
capital was invested into HomeLink Healthcare, a
specialist provider of Hospital-at-Home and Virtual
Ward services. The company employs highly qualified
and experienced nurses and rehabilitation teams to
provide services to patients in their own homes, through
contracts with the NHS. These services deliver a range of
clinical interventions, including wound care, intravenous
therapies, physiotherapy, and rehabilitation. The clinical
services offered alleviate pressure on the NHS by freeing
up vital bed space, saving time and reducing costs.
Rovco Limited
Post year end, in March 2022, Rovco received a
£0.5million follow-on growth capital investment, part
of a funding round totalling £15.2 million. Rovco is a
leading provider of autonomy and cloud managed
robotics for subsea surveys in offshore wind and oil
field decommissioning. The investment will allow Rovco,
and its technology division Vaarst, to further tech
development and continue global expansion to Austin,
Texas and Tokyo, Japan, as well as increasing its presence
across Europe.
MANAGER’S REVIEW CONTINUED
Realisations in the year ended 31 December 2021
Accounting Valuation at
cost at date Realised 31 December
of disposal Proceeds gain/(loss) 2020
Company Detail (£) (£) (£) (£)
FFX Group Limited Full disposal 2,676,426 11,056,074 8,379,648 11,196,564
Mologic Ltd. Full disposal 2,434,483 6,270,206 3,835,723 5,054,260
Ixaris Systems Ltd Full disposal 2,266,036 1,207,635 (1,058,401) 632,221
Accrosoft Limited Partial disposal 2,363,062 4,276,188 1,913,126 3,369,089
Total disposals 9,740,007 22,810,103 13,070,096 20,252,134
STRATEGIC REPORT FINANCIAL STATEMENTSGOVERNANCE
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 19
CASE STUDY
IMMJ SYSTEMS
In December 2020, the Company
invested in IMMJ Systems, a provider
of electronic document clinical
management solutions for the NHS.
IMMJ Systems is aligned to
Sustainable Development Goal 3
(Good Health and Wellbeing).
Awareness
The company’s product significantly
improves patient outcomes by having
better, easily accessible information
at the point of care.
Since investment, ESG awareness has
improved, with topics now regularly
discussed at board level.
Environment
The company’s electronic system
replaces old inefficient paper-based
record systems in the clinical process,
improving efficiency and speed while
reducing the consumption of energy
and paper required to house medical
records safely and securely. Health
systems account for c.5% of global
emissions.
Having a long-term plan around the
management and digitisation of
health records is key to helping the
large-scale operations that support
the country’s health service reduce
their carbon emissions.
By removing the need for couriers
totransport medical records, this
also reduces the carbon footprint
from vehicles used for transportation.
To date, the company has digitised
over 10 million patient records for
theNHS.
Social
The company now conducts twice
annual employee feedback surveys
to ensure continual engagement
amongst staff. Communications with
staff have also improved, with a focus
on the wellbeing of all employees.
The company has also introduced a
policy to align annual performance
reviews and feedback.
Governance
In 2021, with the Manager’s
support,IMMJ Systems established
a remuneration committee.
Thecompany’s board has 50%
female representation.
Third-party interactions
The company undertook due
diligence to ensure that its chosen
cloud provider is the most energy
efficient. The company also has
a responsible purchasing policy,
and this is communicated to all
itsproviders.
The company is accredited with
ISO 27001 (information security
management), ISO 9001 (quality
management) and ISO 14001
(environmental management).
20 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
MANAGER’S REVIEW CONTINUED
Key valuation changes in the year
Company Valuation methodology Net movement (£)
Hospital Services Group Limited Discounted earnings multiple 6,867,997
Nano Interactive Group Limited Discounted revenue multiple 4,396,303
Specac International Limited Discounted earnings multiple 3,740,867
TFC Europe Limited Discounted earnings multiple 2,683,854
TLS Management Limited (formerly Dhalia Limited) Net assets 2,620,405
Cinelabs International Ltd Discounted earnings multiple 2,577,655
Roxy Leisure Ltd Discounted earnings multiple 2,341,310
Mowgli Street Food Group Limited Discounted earnings multiple 2,321,642
Codeplay Software Limited Discounted revenue multiple 1,804,243
Ollie Quinn Limited Discounted revenue multiple 1,329,909
Innovation Consulting Group Limited Discounted earnings multiple 1,283,902
Spektrix Limited Discounted revenue multiple 1,171,851
NorthWest EHealth Limited Discounted revenue multiple 1,159,042
Fresh Relevance Ltd Discounted revenue multiple 1,032,572
Online Poundshop Limited Nil value (1,099,597)
Key portfolio developments
Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31December2020,
aredetailed below. Updates on these companies are included below, or in the Top Ten Investments section on pages
24 to 28.
TLS Management Limited
TLS is based in Barwell, Leicestershire and is a specialist
provider of lens manufacturing, refurbishment and
servicing to the film and television markets.
31 December 2021 update
Performance in the lens rehousing business continued
to underpin the company’s impressive performance,
representing 82% of FY2021 full-year revenue. Demand
fromdomestic and international customers remains
strong with a robust order book providing revenue
visibility for the next two years, driven by the high
levels of production activity returning in the film
andTVmarkets.
Cinelabs International Ltd
Cinelabs International provides non-creative post
production services to film and TV production houses
globally, primarily to those shooting on analogue film.
It also offers film restoration, digitisation and archiving
services to owners of film archives.
31 December 2021 update
Cinelabs International’s performance over 2021 was
asignificant improvement compared to the prior year
given the strong performance in TV dramas and more
consistent revenues from music promotions. However,
feature film revenue remains impacted by COVID-19
postponements and some global supply chain issues
for certain types of Kodak films. Cinelabs International
made an attractive acquisition during the year which
is performing well and brought additional digital
capabilities.
CASE STUDY
STRATEGIC REPORT FINANCIAL STATEMENTSGOVERNANCE
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 21
CASE STUDY
In December 2020, the
Companyinvested £1.2 million
growth capital into Titania Group,
a Worcestershire-based cyber
securitysoftware business.
Awareness
The World Economic Forum has
recognised that cyber security is
a systemic risk, particularly more
so with increased numbers of
employees working from home
because of the pandemic. In 2019,
Accenture reported that cyber
security breaches had risen by over
65% over the last five years. Cyber
security breaches create financial
and reputational damage. They
can also result in disruption to key
services. Winner of multiple cyber
security industry awards, as well as
the Queen’s Award for Enterprise in
Innovation, Titania Group has over
1,000 customers globally, particularly
within governments, critical
infrastructure and the penetration
testing market.
Third-party interactions
Titania Group is Cyber Essentials
certified and holds the ISO 9001
(quality management) accreditation.
During the year, Titania Group
introduced a new product to market,
the Nipper Enterprise, anauditing
tool which quickly identifies
undiscovered vulnerabilities in
firewalls, switches and routers,
andwhich will increase its customers’
network resilience and security
compliance.
Social
The Company’s investment supports
the creation of new jobs at Titania
Group, which already employs a
number of highly skilled professionals
and graduates. Titania Group has
close links with the local university,
offering a £200 prize to students that
complete a cyber security computing
project as part of a computing
degree.
As part of its community
engagement, Titania Group works
with the local foodbank, allowing it
touse the company’s outbuildings
forstorage.
Governance
With the Manager’s support,
Titania Group has strengthened
itsgovernance processes since
the Company’s investment with
board meetings now held monthly.
Anti-bribery and corruption policies
have now been added to the
employee handbook.
Environment
Titania Group has a formalised
environmental policy that includes
recycling, remote working etc.
Thecompany’s electricity is all
fromrenewable sources.
TITANIA GROUP
22 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
MANAGER’S REVIEW CONTINUED
Roxy Leisure Ltd
Roxy Leisure is a games bar group with venues
predominantly across the North of England. It offers a
range of entertainment facilities including pool tables,
ping-pong, bowling, shuffleboard, mini golf, arcade
games and karaoke.
31 December 2021 update
Roxy Leisure has had an extremely strong year since the
lifting of restrictions, with customers returning in force. It is
also benefiting significantly from the ongoing investments
in new sites made during the pandemic. The search for
potential new sites in other key target cities continues.
Mowgli Street Food Group Limited
A fast-casual chain of Indian street food restaurants
founded in 2014, Mowgli Street Food Group is
differentiated from traditional Indian restaurants with
a focus on healthy dishes and an extensive gluten-free,
vegetarian and vegan offering.
31 December 2021 update
Mowgli Street Food Group continues to trade very strongly
across its 14 sites, including London and Cheltenham,
which opened in 2021, and despite the Omicron wave and
“Plan B” restrictions. There is a schedule of site openings
planned throughout the UK for2022.
Codeplay Software Limited
Codeplay Software is an Edinburgh-based software
developer and software consultancy business which
wasestablished in 2002. Codeplay Software’s
consultancy customers are chip manufacturers
which need to develop tools that will extract the
bestperformance from their products.
31 December 2021 update
After investing in developing the product offering,
Codeplay Software has a platform which enables
artificial intelligence algorithms to run more efficiently
on next generation car hardware platforms. The nature
of recent projects with large global tech customers is
increasinglystrategic.
Online Poundshop Limited
Online Poundshop is an online-only discount
retailerofgeneral merchandise. Founded and chaired
by the founder of Poundland and a proven operator in
the sector, it currently has over 200,000 customers in its
database and sells over 3,000 products which are fulfilled
from a 21,000 sq ft warehouse inDudley.
31 December 2021 update
Despite generating ongoing revenues, the company had
achallenging year, in part due to the return tothehigh
street by consumers and in part due to stock availability
challenges. A funding round was required and the Manager
decided not to invest further, resulting in subsequent
dilution and the holding has been written down to zero.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 23
Outlook
The direct impact of COVID-19 is gradually receding but
the combination of loose fiscal policy and relaxation of
restrictions globally is resulting in other challenges for
businesses. In the UK, the success of the vaccination
rollout has enabled the Government to remove
restrictions and now “live with the virus”. There is an
expectation that the UK’s return to normal should
continue at least until next winter. This, combined with
the gradual easing of COVID-19 related border security
measures, will provide a welcome boost to hospitality,
travel and leisure. The Manager remains cautiously
optimistic but will keep the situation under review and
will support the portfolio as required at the first sign of
any relapse caused by new emerging COVID-19 variants.
The gradual opening up of the global economy and the
consequential increase in demand for resources and
staff are putting pressure on supply chains and resulting
in staffing concerns across some industries. Several
of Foresight Group’s portfolio companies have been
impacted by the global computer chip shortage amongst
other raw material price rises and delays in delivery.
Businesses are also struggling with both staff retention
and hiring new staff as the number of vacancies in the
market is driving both churn and wage inflation. However,
such is the demand in several markets, many companies
are successfully passing cost increases on to the end
customer, protecting margins but adding to the global
consumer squeeze.
Hospitality, which had a particularly torrid 2020, enjoyed
a strong summer 2021 and festive period, as consumers
relieved pent-up demand and returned to a pre-pandemic
trend of increased levels of experiential spend. This
has resulted in positive results at portfolio companies
including Roxy Leisure and Mowgli Street Food Group.
Similarly, technology businesses with clear revenue
visibility and a differentiated product, and healthcare
services businesses, continue to trade strongly and are
the current focus of the Manager’s origination efforts.
Inflation across the western world is at levels that have
not been seen for many years. The majority of Foresight
Group’s portfolio CEOs and finance directors have
worked in a high inflation environment and the Manager
is encouraging a prudent approach to cost inflation and
supply chain management and requesting scenario analyses
to model the impact of medium-term inflation on margins.
The Russian invasion of Ukraine, in recent weeks, has
brought further pressure on inflation and energy prices,
as well as the potential for further market turmoil and
increased cyber risks. The Company’s portfolio has some
direct exposure to Russia and Ukraine, but this remains
manageable. We are working closely with management
teams to ensure scenario planning for a wider economic
impact has been undertaken.
The Manager is pleased with the overall performance
of the portfolio over the past 12 months, especially in
these challenging times, and looks forward to a further
improvement as conditions return to normal.
During the pandemic, in addition to taking advantage of
the Coronavirus Job Retention (or “furlough”) Scheme,
many small businesses turned to Government-supported
debt facilities including “Bounce Back Loans”, the
Future Fund and the Coronavirus Business Interruption
Loan Scheme. As companies come to the end of their
repayment holidays, the drain on operating cash flow of
interest and capital repayments is making companies look
to alternative sources of funding for support or growth
which should support VCT deal flow.
Global equity markets are currently highly volatile with a
number of lockdown “winners” such as Amazon, Peloton
and Netflix beginning to lose their shine, whilst mining
stocks and traditional sectors including banking and
utilities are showing record profits. The threat of war in
Europe is looming over capital markets; however, M&A
activity remains relatively buoyant and both international
buyers and domestic investors have high levels of
deployable capital which should provide support for a
continued steady flow of realisations.
Notwithstanding the continued uncertainty, the Manager
expects to see a sustained high level of activity from UK
companies seeking growth capital, given VCTs remain an
attractive source of capital for entrepreneurs.
Russell Healey
on behalf of Foresight Group LLP
Head of Private Equity
13 April 2022
24 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
TOP TEN INVESTMENTS
BY VALUE AS AT 31 DECEMBER 2021
HOSPITAL SERVICES
GROUP LIMITED
SPECAC
INTERNATIONAL LIMITED
NANO INTERACTIVE
GROUP LIMITED
INNOVATION CONSULTING
GROUP LIMITED
BELFAST www.hsl.ie KENT www.specac.com LONDON www.nanointeractive.com HERTFORDSHIRE www.govgrant.co.uk
SECTOR: HEALTHCARE SECTOR: INDUSTRIALS & MANUFACTURING SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: BUSINESS SERVICES
Hospital Services Group (“HSL”) distributes, installs
and maintains high-quality healthcare equipment and
consumables from global partners such as Hologic,
Fujifilm and Shimadzu. HSL has strengths inthe radiology,
ophthalmic, endoscopy and surgical sectors, as well as a
building presence in telehealth and broader healthcare IT.
Specac International is a leading manufacturer of high
specification sample analysis and preparation equipment
used in testing and research laboratories worldwide,
primarily supporting infrared spectroscopy.
Nano Interactive Group is an advertising technology
business specialising in search re-targeting campaigns for
its global customer base. The business was founded in2010
and has offices across Europe.
Innovation Consulting Group provides support services and
advice to UK-based SME businesses seeking to gain access
to Government tax incentives.
31 December 2021 update
HSL had an excellent year of trading which included revenues
from MDI Medical, which was acquired in March2021.
Revenues remain strong, although are below FY2020.
However, the performance is now more sustainable as PPE
sales now make up a small fraction ofthe previous year.
31 December 2021 update
Specac International had a positive year, especially during the
last few months, as supplier costs were successfully passed
onto customers. Thebusiness hasbeen operating at a higher
level of efficiency sincean organisation redesign during 2021,
resultingin sales ahead of budget and group overheads
reduced. The company still has a number of key roles to
fill, including an engineering lead, marketing director and
technical director.
31 December 2021 update
Nano Interactive Group had an extremely strong year of
trading with UK clients primarily driving this, with the US and
Germany underperforming. To counteract this, there have
been some internal changes with one of the CEOs now leading
the US team and the other CEO/co-founder focusing on
leading the new LIIFT product development which is due to be
launched in 2022.
31 December 2021 update
The sales and business development teams have seen some
churn, resulting in some revenue from repeat customers being
delayed. However, the company saw strong contribution from
the new intellectual property services (“IPS”) side of the
business, providing product diversification and a new channel
of customers for its main services.
Initial investment
1
September 2015
Amount invested (£)
1
3,320,000
Accounting cost (£)
2
3,320,000
Valuation (£) 15,830,735
Basis of valuation Discounted earnings multiple
Equity held (%) 45.2%
Income received in the year (£) 185,203
Cash returned up to
31December 2021 (£) 231,884
Initial investment April 2015
Amount invested (£) 1,345,000
Accounting cost (£) 1,300,000
Valuation (£) 11,339,823
Basis of valuation Discounted earnings multiple
Equity held (%) 43.7%
Income received in the year (£) 117,000
Cash returned up to
31December 2021 (£) 791,929
Initial investment October 2017
Amount invested (£) 4,434,191
Accounting cost (£) 4,434,191
Valuation (£) 9,454,442
Basis of valuation Discounted revenue multiple
Equity held (%) 28.7%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) —
Initial investment
1
September 2015
Amount invested (£)
1
1,650,000
Accounting cost (£)
2
1,605,000
Valuation (£) 7,126,689
Basis of valuation Discounted earnings multiple
Equity held (%) 35.6%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) 484,701
£’000
Year ended
30 September
2020
18-month period
ended
30 September
2019
Sales 44,965 21,170
Profit/(loss) before tax 6,113 (1,516)
Retained profit/(loss) 5,028 (1,397)
Net assets/(liabilities) 3,663 (1,365)
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 11,093 12,545
Profit before tax 733 971
Retained profit 597 863
Net assets 4,673 4,126
£’000
Year ended
31 December
2020
Year ended
31 December
2019
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net (liabilities)/assets (411) 4,895
£’000
Year ended
30 September
2021
Year ended
30 September
2020
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net assets 2,647 3,384
1. Including the initial investment by Foresight 2 VCT plc (“F2”).
2. The accounting cost includes the value at which F2’s
holding was transferred to the Company as part of the
merger in December 2015.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
1. Including the initial investment by F2.
2. The accounting cost includes the value at which F2’s
holding was transferred to the Company as part of the
merger in December 2015.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 25
Company results are taken from the most recent
publicly available financial statements.
HOSPITAL SERVICES
GROUP LIMITED
SPECAC
INTERNATIONAL LIMITED
NANO INTERACTIVE
GROUP LIMITED
INNOVATION CONSULTING
GROUP LIMITED
BELFAST www.hsl.ie KENT www.specac.com LONDON www.nanointeractive.com HERTFORDSHIRE www.govgrant.co.uk
SECTOR: HEALTHCARE SECTOR: INDUSTRIALS & MANUFACTURING SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: BUSINESS SERVICES
Hospital Services Group (“HSL”) distributes, installs
and maintains high-quality healthcare equipment and
consumables from global partners such as Hologic,
Fujifilm and Shimadzu. HSL has strengths inthe radiology,
ophthalmic, endoscopy and surgical sectors, as well as a
building presence in telehealth and broader healthcare IT.
Specac International is a leading manufacturer of high
specification sample analysis and preparation equipment
used in testing and research laboratories worldwide,
primarily supporting infrared spectroscopy.
Nano Interactive Group is an advertising technology
business specialising in search re-targeting campaigns for
its global customer base. The business was founded in2010
and has offices across Europe.
Innovation Consulting Group provides support services and
advice to UK-based SME businesses seeking to gain access
to Government tax incentives.
31 December 2021 update
HSL had an excellent year of trading which included revenues
from MDI Medical, which was acquired in March2021.
Revenues remain strong, although are below FY2020.
However, the performance is now more sustainable as PPE
sales now make up a small fraction ofthe previous year.
31 December 2021 update
Specac International had a positive year, especially during the
last few months, as supplier costs were successfully passed
onto customers. Thebusiness hasbeen operating at a higher
level of efficiency sincean organisation redesign during 2021,
resultingin sales ahead of budget and group overheads
reduced. The company still has a number of key roles to
fill, including an engineering lead, marketing director and
technical director.
31 December 2021 update
Nano Interactive Group had an extremely strong year of
trading with UK clients primarily driving this, with the US and
Germany underperforming. To counteract this, there have
been some internal changes with one of the CEOs now leading
the US team and the other CEO/co-founder focusing on
leading the new LIIFT product development which is due to be
launched in 2022.
31 December 2021 update
The sales and business development teams have seen some
churn, resulting in some revenue from repeat customers being
delayed. However, the company saw strong contribution from
the new intellectual property services (“IPS”) side of the
business, providing product diversification and a new channel
of customers for its main services.
Initial investment
1
September 2015
Amount invested (£)
1
3,320,000
Accounting cost (£)
2
3,320,000
Valuation (£) 15,830,735
Basis of valuation Discounted earnings multiple
Equity held (%) 45.2%
Income received in the year (£) 185,203
Cash returned up to
31December 2021 (£) 231,884
Initial investment April 2015
Amount invested (£) 1,345,000
Accounting cost (£) 1,300,000
Valuation (£) 11,339,823
Basis of valuation Discounted earnings multiple
Equity held (%) 43.7%
Income received in the year (£) 117,000
Cash returned up to
31December 2021 (£) 791,929
Initial investment October 2017
Amount invested (£) 4,434,191
Accounting cost (£) 4,434,191
Valuation (£) 9,454,442
Basis of valuation Discounted revenue multiple
Equity held (%) 28.7%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) —
Initial investment
1
September 2015
Amount invested (£)
1
1,650,000
Accounting cost (£)
2
1,605,000
Valuation (£) 7,126,689
Basis of valuation Discounted earnings multiple
Equity held (%) 35.6%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) 484,701
£’000
Year ended
30 September
2020
18-month period
ended
30 September
2019
Sales 44,965 21,170
Profit/(loss) before tax 6,113 (1,516)
Retained profit/(loss) 5,028 (1,397)
Net assets/(liabilities) 3,663 (1,365)
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 11,093 12,545
Profit before tax 733 971
Retained profit 597 863
Net assets 4,673 4,126
£’000
Year ended
31 December
2020
Year ended
31 December
2019
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net (liabilities)/assets (411) 4,895
£’000
Year ended
30 September
2021
Year ended
30 September
2020
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net assets 2,647 3,384
1. Including the initial investment by Foresight 2 VCT plc (“F2”).
2. The accounting cost includes the value at which F2’s
holding was transferred to the Company as part of the
merger in December 2015.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
1. Including the initial investment by F2.
2. The accounting cost includes the value at which F2’s
holding was transferred to the Company as part of the
merger in December 2015.
26 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
TOP TEN INVESTMENTS CONTINUED
BY VALUE AS AT 31 DECEMBER 2021
DATAPATH GROUP LIMITED TFC EUROPE LIMITED SPEKTRIX LIMITED FRESH RELEVANCE LTD
DERBYSHIRE www.datapath.co.uk SUSSEX www.tfc.eu.com LONDON www.spektrix.com HAMPSHIRE www.freshrelevance.com
SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: INDUSTRIALS & MANUFACTURING SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
Datapath Group is a UK manufacturer of multiscreen
computer graphics cards and video capture hardware,
specialising in video wall and data wall technology. More
than 50% of all video walls installed worldwide useDatapath
Group equipment.
TFC Europe is one of Europe’s leading suppliers oftechnical
fasteners and springs, with an exclusive relationship with
Smalley Springs, one of the world’s major manufacturers of
springs.
Spektrix is an enterprise software company, providing
ticketing, CRM, marketing and fundraising software to
venues in the performing arts sector across the UK andUS.
Fresh Relevance is a SaaS email marketing and web
personalisation platform providing online retailers with
personalised customer experiences and marketing tools
across desktop and mobile.
31 December 2021 update
Despite reasonable trading, Datapath Group’s results are still
expected to see some volatility as the company slowly shifts
its business model to incorporate larger projects using its new
product, Aetria, which has a longer sales cycle. The pipeline
continues to build, although at a slower pace than forecast,
partly due to delays in the R&D programme. Supply chain
shortages have had an impact on revenues and some suppliers
have increased prices significantly. Despite this short-term
pressure, demand remains strong and, over the medium term,
the outlook should improve.
31 December 2021 update
TFC Europe continues to trade exceptionally strongly,
supported by increased demand from existing customers,
with a few additional new customers being won over the
past year. All sites across the UK and Germany continue to
outperform. With supply chain challenges, TFC Europe is
actively managing customers’ expectations byproactively
communicating with them on realistic lead times where
shipments have been delayed from the US.
31 December 2021 update
As restrictions have loosened, Spektrix has seen a good
recovery in revenues over the year, despite being impacted by
the Omicron variant at the end of the year. A large number of
new clients have signed contracts and the pipeline in the UK
is healthy, particularly with larger enterprises. Growth in the
US has had a similar uplift with an encouraging number ofnew
clients being won.
31 December 2021 update
Fresh Relevance has traded well over the year afterseeing
strong upsells to existing customers, up100% fromthe
previous year, and targeting larger enterprise-level customers.
These are some of the results from the company focusing
more on improving its direct sales strategy and funnel. A new
Head of Direct Sales has improved the whole sales strategy
and efficiently shortened the sales cycle.
Initial investment
1
September 2007
Amount invested (£)
1
1,000,000
Accounting cost (£)
2
7,563, 365
Valuation (£) 7,081,763
Basis of valuation Discounted earnings multiple
Equity held (%) 13.3%
Income received in the year (£) —
Cash returned up to
31December 2021 (£)
3
5,385,232
Initial investment
1
November 2007
Amount invested (£)
1
939,092
Accounting cost (£)
2
3,614,612
Valuation (£) 6,887,033
Basis of valuation Discounted earnings multiple
Equity held (%) 28.3%
Income received in the year (£) —
Cash returned up to
31December 2021 (£)
3
1,281,684
Initial investment December 2018
Amount invested (£) 4,875,999
Accounting cost (£) 4,875,999
Valuation (£) 6,868,894
Basis of valuation Discounted revenue multiple
Equity held (%) 12.1%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) —
Initial investment March 2017
Amount invested (£) 2,860,324
Accounting cost (£) 2,860,324
Valuation (£) 6,855,799
Basis of valuation Discounted revenue multiple
Equity held (%) 32.7%
Income received in the year (£) 38,594
Cash returned up to
31December 2021 (£) 232,836
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 21,845 29,923
Profit before tax 2,265 6,697
Retained profit 2,473 6,007
Net assets 26,111 23,527
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 19,734 22,730
Profit before tax 1,024 1,757
Retained profit 746 1,283
Net assets 7,934 7,232
£’000
Year ended
31 December
2020
Year ended
31 December
2019
Sales 7, 201 9,894
Loss before tax (2,157) (1,981)
Retained loss (1,882) (1,711)
Net assets 1,179 1,630
£’000
Year ended
30 September
2020
Year ended
30 September
2019
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net assets 45 372
1. The amount and date of initial investment by F2.
2. The accounting cost reflects the valuation of F2’s investment
in Datapath at the point it was transferred to the Company as
part of the merger in December 2015.
3. Includes £3,981,822 returned to F2 pre-merger.
1. The amount and date of initial investment by F2.
2. The accounting cost reflects the valuation of F2’s
investment in TFC at the point it was transferred to the
Company as part of the merger in December 2015.
3. The amount returned to F2 pre-merger.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 27
DATAPATH GROUP LIMITED TFC EUROPE LIMITED SPEKTRIX LIMITED FRESH RELEVANCE LTD
DERBYSHIRE www.datapath.co.uk SUSSEX www.tfc.eu.com LONDON www.spektrix.com HAMPSHIRE www.freshrelevance.com
SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: INDUSTRIALS & MANUFACTURING SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
SECTOR: TECHNOLOGY, MEDIA
&TELECOMMUNICATIONS
Datapath Group is a UK manufacturer of multiscreen
computer graphics cards and video capture hardware,
specialising in video wall and data wall technology. More
than 50% of all video walls installed worldwide useDatapath
Group equipment.
TFC Europe is one of Europe’s leading suppliers oftechnical
fasteners and springs, with an exclusive relationship with
Smalley Springs, one of the world’s major manufacturers of
springs.
Spektrix is an enterprise software company, providing
ticketing, CRM, marketing and fundraising software to
venues in the performing arts sector across the UK andUS.
Fresh Relevance is a SaaS email marketing and web
personalisation platform providing online retailers with
personalised customer experiences and marketing tools
across desktop and mobile.
31 December 2021 update
Despite reasonable trading, Datapath Group’s results are still
expected to see some volatility as the company slowly shifts
its business model to incorporate larger projects using its new
product, Aetria, which has a longer sales cycle. The pipeline
continues to build, although at a slower pace than forecast,
partly due to delays in the R&D programme. Supply chain
shortages have had an impact on revenues and some suppliers
have increased prices significantly. Despite this short-term
pressure, demand remains strong and, over the medium term,
the outlook should improve.
31 December 2021 update
TFC Europe continues to trade exceptionally strongly,
supported by increased demand from existing customers,
with a few additional new customers being won over the
past year. All sites across the UK and Germany continue to
outperform. With supply chain challenges, TFC Europe is
actively managing customers’ expectations byproactively
communicating with them on realistic lead times where
shipments have been delayed from the US.
31 December 2021 update
As restrictions have loosened, Spektrix has seen a good
recovery in revenues over the year, despite being impacted by
the Omicron variant at the end of the year. A large number of
new clients have signed contracts and the pipeline in the UK
is healthy, particularly with larger enterprises. Growth in the
US has had a similar uplift with an encouraging number ofnew
clients being won.
31 December 2021 update
Fresh Relevance has traded well over the year afterseeing
strong upsells to existing customers, up100% fromthe
previous year, and targeting larger enterprise-level customers.
These are some of the results from the company focusing
more on improving its direct sales strategy and funnel. A new
Head of Direct Sales has improved the whole sales strategy
and efficiently shortened the sales cycle.
Initial investment
1
September 2007
Amount invested (£)
1
1,000,000
Accounting cost (£)
2
7,563, 365
Valuation (£) 7,081,763
Basis of valuation Discounted earnings multiple
Equity held (%) 13.3%
Income received in the year (£) —
Cash returned up to
31December 2021 (£)
3
5,385,232
Initial investment
1
November 2007
Amount invested (£)
1
939,092
Accounting cost (£)
2
3,614,612
Valuation (£) 6,887,033
Basis of valuation Discounted earnings multiple
Equity held (%) 28.3%
Income received in the year (£) —
Cash returned up to
31December 2021 (£)
3
1,281,684
Initial investment December 2018
Amount invested (£) 4,875,999
Accounting cost (£) 4,875,999
Valuation (£) 6,868,894
Basis of valuation Discounted revenue multiple
Equity held (%) 12.1%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) —
Initial investment March 2017
Amount invested (£) 2,860,324
Accounting cost (£) 2,860,324
Valuation (£) 6,855,799
Basis of valuation Discounted revenue multiple
Equity held (%) 32.7%
Income received in the year (£) 38,594
Cash returned up to
31December 2021 (£) 232,836
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 21,845 29,923
Profit before tax 2,265 6,697
Retained profit 2,473 6,007
Net assets 26,111 23,527
£’000
Year ended
31 March
2021
Year ended
31 March
2020
Sales 19,734 22,730
Profit before tax 1,024 1,757
Retained profit 746 1,283
Net assets 7,934 7,232
£’000
Year ended
31 December
2020
Year ended
31 December
2019
Sales 7, 201 9,894
Loss before tax (2,157) (1,981)
Retained loss (1,882) (1,711)
Net assets 1,179 1,630
£’000
Year ended
30 September
2020
Year ended
30 September
2019
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net assets 45 372
1. The amount and date of initial investment by F2.
2. The accounting cost reflects the valuation of F2’s investment
in Datapath at the point it was transferred to the Company as
part of the merger in December 2015.
3. Includes £3,981,822 returned to F2 pre-merger.
1. The amount and date of initial investment by F2.
2. The accounting cost reflects the valuation of F2’s
investment in TFC at the point it was transferred to the
Company as part of the merger in December 2015.
3. The amount returned to F2 pre-merger.
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
28 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
TOP TEN INVESTMENTS CONTINUED
BY VALUE AS AT 31 DECEMBER 2021
OLLIE QUINN LIMITED ITAD (2015) LIMITED
LONDON www.olliequinn.co.uk SUSSEX www.itad.com
SECTOR: CONSUMER & LEISURE SECTOR: BUSINESS SERVICES
Ollie Quinn is a branded retailer ofprescription glasses,
sunglasses and non-prescription polarised sunglasses based
in the UK andCanada.
Itad (2015) is a long-established specialist consulting
firm focused on monitoring and evaluating the impact
ofinternational development money and aid on behalf
ofgovernments and charities in the UK and overseas.
31 December 2021 update
The company remained affected by lockdown restrictions in
both the UK and Canada over the course of 2021. However,
Black Friday saw record sales in October and November.
The impact of the Omicron variant resulted in 26 lost trading
days from staff being forced to self-isolate and reductions
in footfall across all stores, especially those close to office
locations. A number of initiatives were implemented to
improve online revenue, not only to increase sales but to
overhaul the back-end of the website, to provide better
dataanalysis.
31 December 2021 update
Itad (2015) had a relatively weaker year caused by a
reduction in work won during the previous COVID-impacted
year. However, over the last 12 months, the company has
worked hard to pivot away from its dependence on the UK
Government with new contracts won from a more diversified
pool of philanthropic customers, as well as a new focus on the
US market.
Initial investment March 2017
Amount invested (£) 5,693,917
Accounting cost (£) 5,693,917
Valuation (£) 6,740,762
Basis of valuation Discounted revenue multiple
Equity held (%) 64.7%
Income received in the year (£) —
Cash returned up to
31December 2021 (£) 4,164
Initial investment
1
October 2015
Amount invested (£)
1
2,750,000
Accounting cost (£)
2
2,750,000
Valuation (£) 5,178,462
Basis of valuation Discounted earnings multiple
Equity held (%) 24.1%
Income received in the year (£) 133,166
Cash returned up to
31December 2021 (£) 992,279
£’000
Year ended
30 June
2021
Year ended
30 June
2020
Sales N/A N/A
Profit before tax N/A N/A
Retained profit N/A N/A
Net assets 3,475 3,754
£’000
Year ended
31 January
2021
Year ended
31 January
2020
Sales 16,579 17,907
Loss before tax (208) (214)
Retained loss (441) (513)
Net liabilities (1,324) (744)
In accordance with Section 444 of the Companies Act 2006,
a statement of income has not been delivered in the financial
statements available on Companies House.
1. Including the initial investment by F2.
2. The accounting cost includes the value at which F2’s
holding was transferred to the Company as part of the
merger in December 2015.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 29
30 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
PORTFOLIO OVERVIEW
31 December 2021 31 December 2020
Investment
(by value)
Date of
thefirst
investment Sector Valuation methodology
Investment
(byvalue)
Accounting cost
£
Valuation
£
Accounting cost
£
Valuation
£
Addition
£
Disposal
proceeds
£
Net valuation
movement
£
1. Hospital Services Group Limited 2015 Healthcare Discounted earnings multiple 1. 3,320,000 15,830,735
1
3,320,000 8,962,738 — — 6,867,997
2. Specac International Limited 2015 Industrials & Manufacturing Discounted earnings multiple 2. 1,300,000 11,339,823
1
1,300,000 7,598,956 — — 3,740, 867
3. Nano Interactive Group Limited 2017 Technology, Media & Telecommunications Discounted revenue multiple 3. 4,434,191 9,454,442
1
4,434,191 5,058,139 — — 4,396,303
4. Innovation Consulting Group Limited 2015 Business Services Discounted earnings multiple 4. 1,605,000 7,126,689
1
1,605,000 5,842,787 — — 1,283,902
5. Datapath Group Limited 2007 Technology, Media & Telecommunications Discounted earnings multiple 5. 7,563, 365 7,081,763
1
7,563, 365 7,835,163 — — (753,400)
6. TFC Europe Limited 2007 Industrials & Manufacturing Discounted earnings multiple 6. 3,614,612 6, 887,033
1
3,614,612 4,203,179 — — 2,683,854
7. Spektrix Limited 2018 Technology, Media & Telecommunications Discounted revenue multiple 7. 4,875,999 6,868,894
1
4,875,999 5,697,043 — — 1,171,851
8. Fresh Relevance Ltd 2017 Technology, Media & Telecommunications Discounted revenue multiple 8. 2,860,324 6,855,799
1
2,117,750 5,080,653 742,574 — 1,032,572
9. Ollie Quinn Limited 2017 Consumer & Leisure Discounted revenue multiple 9. 5,693,917 6,740,762
1
5,693,917 5,410,853 — — 1,329,909
10. Itad (2015) Limited 2015 Business Services Discounted earnings multiple 10. 2,750,000 5,178,462
1
2,750,000 4,288,221 — — 890,241
11. Protean Software Limited 2015 Technology, Media & Telecommunications Discounted revenue multiple 11. 2,500,000 5,079,037 2,500,000 4,940,565 — — 138,472
12. Roxy Leisure Ltd 2019 Consumer & Leisure Discounted earnings multiple 12. 2,467,933 4,834,846 2,467,933 2,493,536 — — 2,341,310
13. Clubspark Group Ltd 2019 Technology, Media & Telecommunications Discounted revenue multiple 13. 2,756,085 4,788,619 1,270,936 2,384,197 1,485,149 — 919,273
14. Mowgli Street Food Group Limited 2017 Consumer & Leisure Discounted earnings multiple 14. 1,526,750 4,752,839 1,526,750 2,431,197 — — 2,321,642
15. Industrial Efficiency II Limited 2014 Business Services Discounted cash flow 15. 2,603,260 4, 357, 29 9 2,603,260 4,628,001 — — (270,702)
16. Fourth Wall Creative Limited 2019 Consumer & Leisure Discounted earnings multiple 16. 4,292,299 4,130,915 2,955,665 1,975,916 1,336,634 — 818,365
17. Codeplay Software Limited 2018 Technology, Media & Telecommunications Discounted revenue multiple 17. 689,656 4,099,278 689,656 2,295,035 — — 1,804,243
18. TLS Management Limited
2
2015 Other Net assets 18. 100 4,034,572 100 1,414,167 — — 2,620,405
19. Cinelabs International Ltd 2017 Technology, Media & Telecommunications Discounted earnings multiple 19. 2,216,250 3,733,587 2,216,250 1,155,932 — — 2,577,655
20. Aerospace Tooling Corporation
Limited
2013 Industrials & Manufacturing Discounted earnings multiple 20. 150,000 3,223,117 150,000 2, 247,374 — — 975,743
21. Ten Health & Fitness Limited 2019 Healthcare Discounted revenue multiple 21. 2,958,591 2,770,940 2,364,532 1,429,032 594,059 — 747, 849
22. Aquasium Technology Limited 2001 Industrials & Manufacturing Discounted earnings multiple 22. 333,333 2,743,986 333,333 1,923,664 — — 820,322
23. NorthWest EHealth Limited 2021 Healthcare Discounted revenue multiple 23. 1,485,149 2,644,191 — — 1,485,149 — 1,159,042
24. PH Realisations 2020 Limited
3
2013 Technology, Media & Telecommunications Discounted earnings multiple 24. 1,664,893 2,633,592 1,664,893 2,314,634 — — 318,958
25. Steamforged Holdings Limited 2019 Consumer & Leisure Discounted revenue multiple 25. 2,364,532 2,595,607 2,364,532 1,970,222 — — 625,385
26. Callen-Lenz Associates Limited 2021 Industrials & Manufacturing Discounted revenue multiple 26. 2,351,485 2,511,927 — — 2,351,485 — 160,442
27. Biotherapy Services Limited 2019 Healthcare Price of last funding round 27. 2,220,408 2,346,371 1,477,833 1,676,831 742, 575 — (73,035)
28. 200 Degrees Holdings Limited 2017 Consumer & Leisure Discounted earnings multiple 28. 1, 477,832 2,141,061 1,477,832 2,132,061 — — 9,000
29. Newsflare Limited 2021 Technology, Media & Telecommunications Price of last funding round 29. 1,980,198 1,980,198 — — 1,980,198 — —
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 31
31 December 2021 31 December 2020
Investment
(by value)
Date of
thefirst
investment Sector Valuation methodology
Investment
(byvalue)
Accounting cost
£
Valuation
£
Accounting cost
£
Valuation
£
Addition
£
Disposal
proceeds
£
Net valuation
movement
£
1. Hospital Services Group Limited 2015 Healthcare Discounted earnings multiple 1. 3,320,000 15,830,735
1
3,320,000 8,962,738 — — 6,867,997
2. Specac International Limited 2015 Industrials & Manufacturing Discounted earnings multiple 2. 1,300,000 11,339,823
1
1,300,000 7,598,956 — — 3,740, 867
3. Nano Interactive Group Limited 2017 Technology, Media & Telecommunications Discounted revenue multiple 3. 4,434,191 9,454,442
1
4,434,191 5,058,139 — — 4,396,303
4. Innovation Consulting Group Limited 2015 Business Services Discounted earnings multiple 4. 1,605,000 7,126,689
1
1,605,000 5,842,787 — — 1,283,902
5. Datapath Group Limited 2007 Technology, Media & Telecommunications Discounted earnings multiple 5. 7,563, 365 7,081,763
1
7,563, 365 7,835,163 — — (753,400)
6. TFC Europe Limited 2007 Industrials & Manufacturing Discounted earnings multiple 6. 3,614,612 6, 887,033
1
3,614,612 4,203,179 — — 2,683,854
7. Spektrix Limited 2018 Technology, Media & Telecommunications Discounted revenue multiple 7. 4,875,999 6,868,894
1
4,875,999 5,697,043 — — 1,171,851
8. Fresh Relevance Ltd 2017 Technology, Media & Telecommunications Discounted revenue multiple 8. 2,860,324 6,855,799
1
2,117,750 5,080,653 742,574 — 1,032,572
9. Ollie Quinn Limited 2017 Consumer & Leisure Discounted revenue multiple 9. 5,693,917 6,740,762
1
5,693,917 5,410,853 — — 1,329,909
10. Itad (2015) Limited 2015 Business Services Discounted earnings multiple 10. 2,750,000 5,178,462
1
2,750,000 4,288,221 — — 890,241
11. Protean Software Limited 2015 Technology, Media & Telecommunications Discounted revenue multiple 11. 2,500,000 5,079,037 2,500,000 4,940,565 — — 138,472
12. Roxy Leisure Ltd 2019 Consumer & Leisure Discounted earnings multiple 12. 2,467,933 4,834,846 2,4 67,933 2,493,536 — — 2,341,310
13. Clubspark Group Ltd 2019 Technology, Media & Telecommunications Discounted revenue multiple 13. 2,756,085 4,788,619 1,270,936 2,384,197 1,485,149 — 919,273
14. Mowgli Street Food Group Limited 2017 Consumer & Leisure Discounted earnings multiple 14. 1,526,750 4,752,839 1,526,750 2,431,197 — — 2,321,642
15. Industrial Efficiency II Limited 2014 Business Services Discounted cash flow 15. 2,603,260 4 ,357,299 2,603,260 4,628,001 — — (270,702)
16. Fourth Wall Creative Limited 2019 Consumer & Leisure Discounted earnings multiple 16. 4,292,299 4,130,915 2,955,665 1,975,916 1,336,634 — 818,365
17. Codeplay Software Limited 2018 Technology, Media & Telecommunications Discounted revenue multiple 17. 689,656 4,099,278 689,656 2,295,035 — — 1,804,243
18. TLS Management Limited
2
2015 Other Net assets 18. 100 4,034,572 100 1,414,167 — — 2,620,405
19. Cinelabs International Ltd 2017 Technology, Media & Telecommunications Discounted earnings multiple 19. 2,216,250 3,733,587 2,216,250 1,155,932 — — 2,577,655
20. Aerospace Tooling Corporation
Limited
2013 Industrials & Manufacturing Discounted earnings multiple 20. 150,000 3,223,117 150,000 2, 247,374 — — 975,743
21. Ten Health & Fitness Limited 2019 Healthcare Discounted revenue multiple 21. 2,958,591 2,770,940 2,364,532 1,429,032 594,059 — 747, 849
22. Aquasium Technology Limited 2001 Industrials & Manufacturing Discounted earnings multiple 22. 333,333 2,743,986 333,333 1,923,664 — — 820,322
23. NorthWest EHealth Limited 2021 Healthcare Discounted revenue multiple 23. 1,485,149 2,644,191 — — 1,485,149 — 1,159,042
24. PH Realisations 2020 Limited
3
2013 Technology, Media & Telecommunications Discounted earnings multiple 24. 1,664,893 2,633,592 1,664,893 2,314,634 — — 318,958
25. Steamforged Holdings Limited 2019 Consumer & Leisure Discounted revenue multiple 25. 2,364,532 2,595,607 2,364,532 1,970,222 — — 625,385
26. Callen-Lenz Associates Limited 2021 Industrials & Manufacturing Discounted revenue multiple 26. 2,351,485 2,511,927 — — 2,351,485 — 160,442
27. Biotherapy Services Limited 2019 Healthcare Price of last funding round 27. 2,220,408 2,346,371 1,477,833 1,676,831 742, 575 — (73,035)
28. 200 Degrees Holdings Limited 2017 Consumer & Leisure Discounted earnings multiple 28. 1, 477,832 2,141,061 1,477,832 2,132,061 — — 9,000
29. Newsflare Limited 2021 Technology, Media & Telecommunications Price of last funding round 29. 1,980,198 1,980,198 — — 1,980,198 — —
32 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
PORTFOLIO OVERVIEW CONTINUED
1. Top Ten Investments by value shown on pages 24 to 28.
2. TLS Management Limited (formerly Dhalia Limited).
3. PH Realisations 2020 Limited (formerly Procam Television Holdings Limited).
4. Vio Healthtech Limited (formerly Fertility Focus Limited).
31 December 2021 31 December 2020
Investment
(by value)
Date of
thefirst
investment Sector Valuation methodology
Investment
(byvalue)
Accounting cost
£
Valuation
£
Accounting cost
£
Valuation
£
Addition
£
Disposal
proceeds
£
Net valuation
movement
£
30. IMMJ Systems Limited 2020 Healthcare Discounted revenue multiple 30. 1,732,674 1,800,505 1,732,674 1,732,674 — — 67, 831
31. Biofortuna Ltd 2012 Healthcare Discounted revenue multiple 31. 1,172,517 1,777,943 1,172,517 2,393,778 — — (615,835)
32. iMIST Group Limited 2020 Industrials & Manufacturing Discounted revenue multiple 32. 1,598,515 1,747,451 1,598,515 1,598,515 — — 148,936
33. Titania Group Limited 2020 Business Services Discounted revenue multiple 33. 1, 237,624 1,726,714 1,237,624 1,237,624 — — 489,090
34. Additive Manufacturing
TechnologiesLtd
2021 Technology, Media & Telecommunications EV of last funding round 34. 1,720,296 1,720,296 — — 1,720,296 — —
35. Positive Response Corporation Ltd 2014 Business Services Discounted revenue multiple 35. 1,000,000 1,592,454 1,000,000 1,384,180 — — 208,274
36. Luminet Networks Limited 2018 Technology, Media & Telecommunications Discounted earnings multiple 36. 3,783,251 1,520,806 3,783,251 1, 347,945 — — 172,861
37. Crosstown Dough Ltd 2021 Consumer & Leisure Price of last funding round 37. 1,485,149 1,485,149 — — 1,485,149 — —
38. ABL Investments Limited 2015 Business Services Discounted earnings multiple 38. 2,750,000 1,243,814 2,750,000 1,376,203 — — (132,389)
39. Vio Healthtech Limited
4
2018 Healthcare Discounted revenue multiple 39. 1,648,334 1,000,644 1,301,779 1,596,883 346,555 — (942,794)
40. Hexarad Group Limited 2021 Healthcare Price of last funding round 40. 841,585 841,585 — — 841,585 — —
41. Rovco Limited 2019 Technology, Media & Telecommunications Discounted revenue multiple 41. 935,961 642,676 935,961 583,937 — — 58,739
42. Weduc Holdings Limited
5
2018 Technology, Media & Telecommunications Discounted revenue multiple 42. 54,145 458,615 2,417, 207 3,369,089 — (4,276,188) 1,365,714
43. Whitchurch PE 1 Limited 2014 Other Net assets 43. 100,000 289,186 100,000 289,928 — — (742)
44. Cole Henry PE 2 Limited 2014 Other Net assets 44. 100,000 215,818 100,000 216,558 — — (740)
45. Kingsclere PE 3 Limited 2014 Other Net assets 45. 100,000 176,171 100,000 176,912 — — (741)
46. Oxonica Materials Limited 2010 Technology, Media & Telecommunications Nil value 46. 2,804,473 — 2,804,473 — — — —
47. Powerlinks Media Limited 2017 Technology, Media & Telecommunications Nil value 47. 2,709,360 — 2,709,360 — — — —
48. Online Poundshop Limited 2017 Consumer & Leisure Nil value 48. 2,610,000 — 2,610,000 1,099,597 — — (1,099,597)
49. Sindicatum Carbon Capital Limited 2007 Other Nil value 49. 246,075 — 246,075 61,519 — — (61,519)
50. FFX Group Limited 2015 Business Services Sold 50. — — 2,676,426 11,196,564 — (11,056,074) (140,490)
51. Mologic Ltd. 2018 Healthcare Sold 51. — — 2,434,483 5,054,260 — (6,270,206) 1,215,946
52. Ixaris Systems Ltd 2006 Consumer & Leisure Sold 52. — — 2,266,036 632,221 — (1, 207,635) 575,414
102,686,121 167,006,211 97,314,720 132,738,483 15,111,408 (22,810,103) 41,966,423
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 33
31 December 2021 31 December 2020
Investment
(by value)
Date of
thefirst
investment Sector Valuation methodology
Investment
(byvalue)
Accounting cost
£
Valuation
£
Accounting cost
£
Valuation
£
Addition
£
Disposal
proceeds
£
Net valuation
movement
£
30. IMMJ Systems Limited 2020 Healthcare Discounted revenue multiple 30. 1,732,674 1,800,505 1,732,674 1,732,674 — — 67, 831
31. Biofortuna Ltd 2012 Healthcare Discounted revenue multiple 31. 1,172,517 1,777,943 1,172,517 2,393,778 — — (615,835)
32. iMIST Group Limited 2020 Industrials & Manufacturing Discounted revenue multiple 32. 1,598,515 1,747,451 1,598,515 1,598,515 — — 148,936
33. Titania Group Limited 2020 Business Services Discounted revenue multiple 33. 1, 237,624 1,726,714 1,237,624 1,237,624 — — 489,090
34. Additive Manufacturing
TechnologiesLtd
2021 Technology, Media & Telecommunications EV of last funding round 34. 1,720,296 1,720,296 — — 1,720,296 — —
35. Positive Response Corporation Ltd 2014 Business Services Discounted revenue multiple 35. 1,000,000 1,592,454 1,000,000 1,384,180 — — 208,274
36. Luminet Networks Limited 2018 Technology, Media & Telecommunications Discounted earnings multiple 36. 3,783,251 1,520,806 3,783,251 1, 347,945 — — 172,861
37. Crosstown Dough Ltd 2021 Consumer & Leisure Price of last funding round 37. 1,485,149 1,485,149 — — 1,485,149 — —
38. ABL Investments Limited 2015 Business Services Discounted earnings multiple 38. 2,750,000 1,243,814 2,750,000 1,376,203 — — (132,389)
39. Vio Healthtech Limited
4
2018 Healthcare Discounted revenue multiple 39. 1,648,334 1,000,644 1,301,779 1,596,883 346,555 — (942,794)
40. Hexarad Group Limited 2021 Healthcare Price of last funding round 40. 841,585 841,585 — — 841,585 — —
41. Rovco Limited 2019 Technology, Media & Telecommunications Discounted revenue multiple 41. 935,961 642,676 935,961 583,937 — — 58,739
42. Weduc Holdings Limited
5
2018 Technology, Media & Telecommunications Discounted revenue multiple 42. 54,145 458,615 2,417, 207 3,369,089 — (4,276,188) 1,365,714
43. Whitchurch PE 1 Limited 2014 Other Net assets 43. 100,000 289,186 100,000 289,928 — — (742)
44. Cole Henry PE 2 Limited 2014 Other Net assets 44. 100,000 215,818 100,000 216,558 — — (740)
45. Kingsclere PE 3 Limited 2014 Other Net assets 45. 100,000 176,171 100,000 176,912 — — (741)
46. Oxonica Materials Limited 2010 Technology, Media & Telecommunications Nil value 46. 2,804,473 — 2,804,473 — — — —
47. Powerlinks Media Limited 2017 Technology, Media & Telecommunications Nil value 47. 2,709,360 — 2,709,360 — — — —
48. Online Poundshop Limited 2017 Consumer & Leisure Nil value 48. 2,610,000 — 2,610,000 1,099,597 — — (1,099,597)
49. Sindicatum Carbon Capital Limited 2007 Other Nil value 49. 246,075 — 246,075 61,519 — — (61,519)
50. FFX Group Limited 2015 Business Services Sold 50. — — 2,676,426 11,196,564 — (11,056,074) (140,490)
51. Mologic Ltd. 2018 Healthcare Sold 51. — — 2,434,483 5,054,260 — (6,270,206) 1,215,946
52. Ixaris Systems Ltd 2006 Consumer & Leisure Sold 52. — — 2,266,036 632,221 — (1, 207,635) 575,414
102,686,121 167,006,211 97,314,720 132,738,483 15,111,408 (22,810,103) 41,966,423
5. Weduc Holdings Limited (formerly Accrosoft Limited). Accrosoft Limited previously had two trading subsidiaries, being
Vacancy Filler Limited and Weduc Limited. As part of the transaction in October 2021, Weduc Limited was demerged from the
Accrosoft Group. This allowed for the sale of Vacancy Filler and the retention of the holding in Weduc by the Company.
34 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
In 2021, the Manager was voted “Venture & Growth
Capital House of the Year” at the Unquote British
Private Equity Awards and “ESG Champion of the
Year” at the Growth Investor Awards.
ABOUT THE MANAGER
Russell Healey
Partner and Head
ofPrivate Equity
James Livingston
Partner
Matt Smith
Partner
Claire Alvarez
Partner
Russell is head of the
private equity team with
overall responsibility
for fundraising, new
investments and the
portfolio, and is a member
of Foresight Group’s
Executive Committee.
He has over 25 years’
experience in fund
management and venture
capital investing. Prior to
joining Foresight Group,
he worked at Parkmead
Group, a merchant bank,
and spent ten years
as CTO of a financial
information company that
was subsequently sold to
Thomson Reuters. Russell
holds a BA in Classics from
the University of Exeter and
an MBA with distinction
from London Business
School.
James joined Foresight
Group in 2007 from
Deloitte’s Strategy
Consulting team. James has
16 years’ venture capital
investment experience.
AtForesight Group, he has
led numerous successful
transactions including
growth and replacement
capital transactions in a
variety of sectors. James
holds an MA in Natural
Sciences and Management
Studies from Cambridge
University as well as the
CIMA Advanced Diploma
inManagement Accounting.
Matt joined Foresight
Group in 2010 and has
16 years’ venture capital
investment experience.
Prior to joining, he spent
six years at Rothschild,
advising companies in
a range of sectors on a
variety of transaction
types. Matt has a particular
focus on environmental,
social and governance
considerations when
evaluating investments
and has successfully
negotiated sales of a
number of difficult assets.
Matt graduated from the
University of Oxford with
an undergraduate degree
in Biological Sciences
and a distinction in a
postgraduate degree in
Physiology.
Claire joined Foresight
Group in 2016 and has 11
years’ experience managing
SME investments across
the North West of England
and North Wales. Prior to
joining, Claire worked at
Deloitte where she spent
six years advising banks
and company directors
on returning value from
distressed SMEs. Claire is
based in the Manchester
office and as an active
proponent of diversity and
inclusion, Claire is involved
with Fund Her North and
the 6% Club, groups that
promote diversity and
the removal of barriers
for women in finance and
entrepreneurship in the
North West.
Claire graduated from the
University of Lancaster with
an undergraduate degree
in Management and holds
an MBA with distinction
from Manchester Business
School.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 35
Management
The Company has appointed Foresight Group LLP (“the
Manager”) to provide investment management and
administration services.
The Manager 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:
•
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
Foresight Group LLP was most recently shortlisted for
“UK House of the Year” by Real Deals Private Equity
Awards 2022. Recent awards also include “Fund Manager
of the Year 2018” by the PLC Awards and “Generalist VCT
of the Year” in 2018/19 by Investment Week Tax Efficient
Awards. The Manager was also shortlisted for “Best EIS
Investment Manager 2018” by EISA Awards and “Best
Venture Capital Trust Provider 2018” by Moneyfactors
Investment Life & Pensions.
The growing private equity investment team of 32 is
proactive and hands-on, with a focus on investing up to
£5 million in UK growth companies across a broad range
of sectors.
The team, based out of offices in London, Manchester,
Nottingham, Edinburgh and Cambridge, with smaller
satellite offices in Leicester and Milton Keynes, searches
for investment opportunities across the whole of the UK.
Since inception, the Manager has worked intensively to
invest in, manage and exit a large number of investments.
The team completes a considerable number of new deals
and exits each year and supports investee companies
pursuing various different strategies, including organic
growth, buy & builds and turnarounds. The team
combines executives from varying backgrounds across
corporate finance, consulting, accounting, private equity
and industry. Between them, they have experience of
more than 500 private equity and corporate finance
transactions and have managed more than 200
investments, the majority of these during their time at
Foresight Group.
This team has c.300 years’ worth of collective investment
experience and combines investors’ capital and its
own expertise with the intention of creating long-term
shareholder value and generating attractive returns for
shareholders.
The Manager has an active and direct portfolio
management approach, taking a non-executive
directorship position on each investee company
board. The Foresight Investor Director will influence,
support and, where necessary, strengthen or change
management, in order to protect and build shareholder
value. This hands-on role involves regular dialogue
with the executive and non-executive team on growth,
markets, strategy, products and tactics and a continuous
evaluation of the performance of the team as a whole.
As a matter of policy, the Manager also has the right to
appoint a senior industry expert as chair.
The Manager works particularly closely with the investee
companies in the following areas:
•
Definition and review of strategy and its
implementation
•
Recruitment and incentivisation of key management
and board members
•
Planning for growth, international expansion and new
product/service introduction
•
Fundraising from banks and other external sources
•
Proactive monitoring
•
Merger, acquisition and exit planning
•
ESG compliance
36 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
CO-INVESTMENTS
Co-investments have been made by other funds that the Manager advises and manages, as follows:
Investment
Foresight
VCT
£
Foresight
Enterprise VCT
£
Other
Foresight
funds
£
Total equity
managed by
Foresight
%
200 Degrees Holdings Limited 1,477,832 — 1,500,000 25.0
ABL Investments Limited 2,750,000 1,494,075 — 57. 3
Additive Manufacturing Technologies Ltd 1,720,296 1,737,499 5,275,002 25.0
Aerospace Tooling Corporation Limited 150,000 415,255 — 82.2
Biofortuna Ltd 1,172,517 3,517,537 — 59.8
Biotherapy Services Limited 2,220,408 2,250,000 — 41.6
Callen-Lenz Associates Limited 2,351,485 2,375,000 — 25.0
Clubspark Group Ltd 2,756,085 1,860,000 — 30.6
Codeplay Software Limited 689,656 300,000 2,050,000 35.0
Cole Henry PE 2 Limited 100,000 200,000 — 50.0
Crosstown Dough Ltd 1,485,149 1,500,000 — 20.0
Datapath Group Limited 7,563, 365 11,081,243 — 40.0
Fourth Wall Creative Limited 4,292,299 2,900,000 — 41.5
Hexarad Group Limited 841,585 850,000 — 18.5
Hospital Services Group Limited 3,320,000 1,200,000 3,500,000 81.6
iMIST Group Limited 1,598,515 1,614,500 1,271,000 39.7
IMMJ Systems Limited 1,732,674 1,750,000 — 21.0
Industrial Efficiency II Limited 2,603,260 — 1,131,498 100.0
Innovation Consulting Group Limited 1,605,000 1,938,046 — 72.4
Itad (2015) Limited 2,750,000 1,371,726 — 35.0
Kingsclere PE 3 Limited 100,000 100,000 — 50.0
Luminet Networks Limited 3,783,251 960,000 — 47.9
Mowgli Street Food Group Limited 1,526,750 — 1,900,000 22.7
Newsflare Limited 1,980,198 2,000,000 — 16.3
NorthWest EHealth Limited 1,485,149 1,500,000 — 27. 8
PH Realisations 2020 Limited
1
1,664,893 2,162,929 1,000,000 57.7
Positive Response Corporation Ltd 1,000,000 1,009,195 — 65.1
Protean Software Limited 2,500,000 1,795,229 — 63.5
Rovco Limited 935,961 950,000 2,000,000 22.6
Roxy Leisure Ltd 2,467, 933 2,500,000 4,500,000 27.9
Specac International Limited 1,300,000 2,554,761 — 87.4
Spektrix Limited 4,875,999 2,118,000 — 17.6
Steamforged Holdings Limited 2,364,532 1,600,000 1,000,000 31.9
Ten Health and Fitness Limited 2,958,591 2,000,000 — 39.3
TFC Europe Limited 3,614,612 2,149,307 — 70.9
Titania Group Limited 1,237,624 1,250,000 — 16.7
Vio Healthtech Limited
2
1,648,334 675,578 — 18.4
Weduc Holdings Limited 54,145 23,750 — 28.7
Whitchurch PE 1 Limited 100,000 378,000 — 50.0
1. Formerly Procam Television Holdings Limited.
2. Formerly Fertility Focus Limited.
Companies valued at £nil have been excluded from the table above.
Where the Manager controls over 50% of an investment by virtue of its discretionary management of one or more funds under
management, decisions either have to be taken by the individual boards of the shareholding companies in respect of their
individual holdings or voting is limited to 50%.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 37
STAKEHOLDERS AND S172
DIRECTORS’ DUTY TO PROMOTE THE SUCCESS OF THE COMPANY
The Directors have a duty to promote the success of the
Company for the benefit of shareholders as a whole and to
describe how they have performed this duty having regard to
matters set out in Section 172(1) of the Companies Act 2006.
In fulfilling this duty, the Directors consider the likely
consequences of their actions over the long term and
on other stakeholders.
As a third-party-managed VCT, the Company does
not have employees. Its main stakeholders therefore
comprise its shareholders, who are also its customers,
portfolio companies, the environment and society and
a small number of suppliers. These suppliers are external
firms engaged by the Board to provide, amongst others,
investment management, secretarial, registrar, audit and
legal services.
The Manager
The principal relationship is with the Manager and the
Manager’s Review contains further information on this.
Its investment management service is fundamental to
the long-term success of the Company through the
pursuit of the investment objective. The Board reviews
the investment performance of the Company and the
ability of the Manager to produce satisfactory investment
performance. It seeks to maintain a constructive working
relationship with the Manager and, on an annual basis,
the Management Engagement Committee reviews the
appropriateness of the Manager’s appointment.
The Board receives and reviews detailed presentations
and reports from the Manager to enable the Directors to
exercise effective oversight of the Company’s activities.
Other suppliers
The Manager seeks to maintain constructive relationships
with the Company’s other suppliers on behalf of the
Company, typically through regular communications and
provision of relevant information.
Shareholders
To help the Board in its aim to act fairly between the
Company’s members, it encourages communications
with all shareholders. The Annual and Half-Yearly
Reports are issued to shareholders and are available on
the Company’s website, together with other relevant
information including quarterly factsheets. The Manager
and members of the Board are available to meet the
shareholders at investor forums held throughout the year.
Directors are also available to meet with shareholders at
the AGM.
Shareholders’ views are considered during the Board’s
annual strategy reviews. The Board has also established
guidelines in accordance with which the Manager
implements share buybacks at a target discount to NAV.
In addition, the Board has adopted a target dividend
policy of 5% of NAV per share per annum.
Portfolio companies
As described in more detail within the Corporate
Governance Report, the Board is committed to
maintaining and demonstrating high standards of
corporate governance in relation to the Company’s
business conduct. The Board also expects high standards
at the companies in which the Company is invested. In
this regard, it is satisfied that the Manager consistently
and proactively engages with investee companies on
environmental, social and governance matters, where
these are material to the investment case and therefore
to the long-term success of the Company. More detail on
this can be found in the Responsible Investment section
of the Manager’s Review.
Where environmental, social and governance matters
impinge upon the investment case, the Manager engages
with investee companies to encourage the issues to be
addressed through that company’s “100-day plan”. The
Manager is well placed to undertake this activity, which
has always been an integrated element of its investment
process. The team of 32 investment professionals is well
resourced and, collectively, has a deep knowledge and
understanding across corporate finance, consulting,
accountancy and private equity.
The Manager supports the aims and objectives of the
FRC’s Stewardship Code (the “Stewardship Code”).
While the Manager is not currently a signatory to the
Stewardship Code it is working to ensure alignment with
it and it is expected that an application will be made by
no later than 30 April 2023. A statement to that effect
is noted on the Manager’s website and can be found at:
https://www.foresightgroup.eu/stewardship-code.
In summary, the Board’s primary focus is to promote
the long-term success of the Company for the benefit
of its shareholders, with a view to achieving the
investment objective in a manner consistent with its
stated investment policy and strategy. In doing so, and
as described above, it has due regard to the impact of its
actions on other stakeholders and the wider community.
38 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
RESPONSIBLE INVESTMENT
In order to deliver sustainable growth and long-term
success, the Manager believes it is critical to incorporate
environmental, social and governance factors (“ESG”)
into its investment management processes.
Often referred to as Responsible Investment, these
principles provide not only a key basis for generating
attractive returns for investors, but also to help build
better quality businesses in the UK, creating jobs and
making a positive contribution to society.
ESG values form an integral part of the Manager’s
day-to-day decision making, with all new investments
made since May 2018 subject to ESG due diligence and
ongoing ESG monitoring.
This accounts for 41% of the current portfolio, with the
view of reaching 100% as legacy investments are sold.
Central to its investment approach are five ESG Principles
which are used to evaluate investee companies.
Overall, 40 individual key performance indicators are
considered under the five Principles.
The Manager invests in a wide range of sectors and
believes its approach covers the key tests that should
be applied to assess a company’s ESG performance,
throughout the life cycle of an investment:
Strategy and
awareness
Does the business
demonstrate a
good awareness
of corporate social
responsibility?
Is this reflected
in its processes
and management
structure?
Environmental
Does the company
follow good
practice for limiting
or mitigating its
environmental impact,
in the context of its
industry?
How does it encourage
the responsible use of
the world’s resources?
Social
What impact does the
company have on its
employees, customers
and society as a whole?
Is it taking steps to
improve the lives of
others, either directly,
such as through job
creation, or indirectly?
Governance
Does the company and
its leadership team
demonstrate integrity?
Are the correct policies
and structures in
place to ensure it
meets its legislative
and regulatory
requirements?
Third-party interaction
Is the principle of
corporate responsibility
evidenced in the
company’s supply
chain and customers?
How does it promote
ESG values and share
best practice?
UN SDGs
The UN’s Sustainable Development Goals (“SDGs”) also
represent a key driver and important lens through which
corporate and investment activities are reviewed.
In May 2021, the Manager formalised its Impact Themes
for private equity investments into four areas:
•
Health
•
Quality Employment at Scale
•
Research and Innovation
•
Sustainable, Inclusive, Local Infrastructure and
theEnvironment
These outcome-focused themes are aligned with the UN’s
SGDs. They help the Manager assess any opportunities in
the business model, and by mapping its investments to
them, the private equity team, can identify the value and
benefits for the companies, society and the environment.
Each portfolio company is subject to an annual
assessment where progress against each of the five
Principles and four Impact Themes are measured and an
evaluation matrix updated to allow progress to be tracked
and continuous improvement encouraged.
The diagram shows the specific SDGs that the Manager
has scope to contribute to across all of its activities.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 39
We believe in delivering sustainable growth and
incorporate ESG into our management process.
Credentials
The Manager has been a member of the UK Sustainable
Investment and Finance Association since 2009 and
a signatory to the Principles for Responsible Investing
(“PRI”) since2013.
The Manager is an accredited Living Wage Employer
and a signatory of the HM Treasury Women in Finance
Charter, committing to implement recommendations to
improve gender diversity in financial services. Portfolio
companies are encouraged to pursue similar objectives.
Climate Change Statement
The Manager has a long-term investing vision and its
strategy aligns with the UN’s Sustainable Development
Goals and the decarbonisation targets set out in the Paris
Agreement of 2015. As such, taking actions to mitigate
the risks posed by climate change, whilst also investing
to generate commercial returns for our investors, must
be done hand in hand. The Manager has been a signatory
to the United Nations-backed Principles for Responsible
Investment (“PRI”) since 2013. PRI is a globally
recognised voluntary framework concerned with the
incorporation of ESG considerations into the investment
decision-making process. It provides a basis for potential
and existing investors to judge the quality of a company’s
ESG processes and positioning within an industry sector.
In 2020, the Manager received an “A+” for Strategy and
Governance, and “A” for Private Equity and Infrastructure
investments.
The Board supports the Manager’s views on climate
change and ESG and its vigorous process in the
evaluation of an asset’s environmental and social impact
during due diligence and thereafter. For each material
risk identified during due diligence, a mitigation plan is
proposed in the investment submission and these actions
form part of each portfolio company’s “100-day plan”
post-investment.
From an environmental perspective, analysis relating to
the implementation of good industry practice in limiting
and mitigating the potentially adverse environmental
impact of a company’s operations has four principal
components:
•
Environmental policy and track record
•
Energy and resource usage and environmental impact
•
Environmental impact of products and services
•
Environmental performance improvements
Regular monitoring post-investment ensures that
standards are maintained in respect of ESG issues
wherethere is a change in either the regulatory or
operating environment or the composition of the
management team.
The FCA reporting requirements consistent with the
Task Force on Climate-related Financial Disclosures
(“TCFD”) commencing from 1 January 2021 do not
currently apply to the Company but will be kept under
review, the Board and Manager being mindful of any
recommended changes.
Environmental, human rights, employee,
social and community issues
The Board recognises the requirement under Section
414 of the Companies Act 2006 to provide information
about environmental matters (including the impact of
the Company’s business on the environment), employee,
human rights, social and community issues; and
information about any policies it has in relation to these
matters and the effectiveness of these policies.
The Company does not have any policies in place for
human rights, environmental, social and community
issues due to having no office premises, no employees
and its purchases being services as opposed to tangible
products. The Manager’s policies in respect of all the
above issues can be found on its website
www.foresightgroup.eu.
Diversity
The Board currently comprises two female and two male
Directors. There is no formal diversity policy in place,
however the Board is conscious of the need for diversity
and will consider male and female candidates from all
ethnic backgrounds when appointing new Directors.
The Manager has an equal opportunities policy and, as at
31 December 2021, employed 165 men and 103 women.
Global greenhouse gas emissions
The Company has no greenhouse gas emissions to report
from the operations of the Company, nor does it have
responsibility for any other emissions sources under the
Companies Act 2006 (Strategic Report and Directors’
Reports) regulations 2013.
40 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
The Board carries out half-yearly reviews of the risk
environment, including emerging risks, in which the
Company operates.
The principal risks and uncertainties identified by the
Board which might affect the Company’s business model
and future performance, and the steps taken with a view
to their mitigation, are set out below. Emerging risks that
have also been considered include that of climate change,
inflationary pressures and the Russian invasion of Ukraine.
Further details of the Board’s climate change
considerations are provided in the Climate Change
Statement in the Responsible Investment section on
page 39. The potential political and economic risks
associated with the invasion of Ukraine and the impact
on the companies in which the Company invests is under
continuous assessment by the Manager.
RISKS
PRINCIPAL RISKS, RISK MANAGEMENT AND REGULATORY ENVIRONMENT
MARKET RISK
Risk description:
Macroeconomic changes, geopolitical developments,
including the risk of war, or external shocks affect
the investment community in general and lead to a
fall in the valuation of investee companies, a drop
in the Company’s share price or widening discount
to Net Asset Value, resulting in capital losses for
shareholders.
Key controls and mitigation:
The Manager ensures the portfolio is diversified and
the Board reviews it at least quarterly. The Company
also maintains sufficient cash reserves to be able to
provide additional funding to investee companies
where appropriate and to repurchase its own shares.
STRATEGIC AND PERFORMANCE RISK
Risk description:
The Board fails to set appropriate strategic objectives
and fails to monitor the Company’s implementation of
strategy which leads to poor performance.
Unattractive objectives or prolonged poor
performance leads to a lack of investor demand for the
Company’s shares, resulting in difficulty raising new
capital, a lack of cash available to fund buybacks and
an inability to control a widening discount.
Key controls and mitigation:
The Board and the Manager meet on an annual basis
for a specific session to assess the Company’s strategy.
Investment strategy and performance are further
monitored quarterly at Board meetings.
INTERNAL CONTROL RISK
Risk description:
The control environments at service providers,
including the Manager, have inadequate procedures
for the identification, evaluation and management of
risks, cyber security and GDPR, putting the Company’s
assets and data at risk.
Key controls and mitigation:
The Board carries out semi-annual reviews of the
system of internal controls, both financial and
non-financial, operated by the Manager and other
service providers and asks the external auditor
to report on the Manager’s internal controls.
Theseinclude controls designed to ensure that the
Company’s assets are safeguarded and that proper
accounting records are maintained.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 41
LEGISLATIVE AND REGULATORY RISK
Risk description:
The Company fails to comply with applicable laws
and regulations including VCT Rules, UK Listing
Authority Rules, AIC Code on Corporate Governance,
Stewardship Code, Companies Act, Bribery Act,
Market Abuse Regulations, GDPR, Criminal Finances
Act and relevant Taxes Acts and as a result loses its
approval as a VCT.
Radical changes to VCT rules limit satisfactory
investment returns and the ability to issue new shares
causing a reluctance to sell investee companies. This
leads to a cash flow issue which restricts dividend
payments or share buybacks and the Company’s
ability to control a widening discount. In extreme
circumstances, the current VCT regime ending on
5April 2025 is not renewed or extended, causing
shareholders to cease to benefit from tax free dividends
and capital gains tax exemption after that date.
Key controls and mitigation:
The Manager is contracted to provide company
secretarial, accounting and administration services
through qualified professionals and the Board
receives regular updates on compliance with relevant
regulations.
The Company, the Manager and the VCT status adviser
are, between them, members of the VCT Managers
Association, EIS Association and the AIC and are
regularly consulted by HMRC and Treasury, or reply
to consultations, before changes in legislation take
place, often enabling a middle ground to be agreed on
legislative changes.
The Board and Manager review corporate governance
and regulatory changes on a continual basis and seek
additional advice as and when required.
VCT QUALIFYING STATUS RISK
Risk description:
The Company is required at all times to observe the
conditions laid down in the Income Tax Act 2007
for the maintenance of approved VCT status. The
loss of such approval could lead to the Company
ceasing to be exempt from corporation tax on capital
gains, to investors being liable to pay income tax on
dividends received from the Company and capital
gains tax on the disposal of their shares, and, in certain
circumstances, to investors being required to repay the
initial income tax relief on their investment.
Key controls and mitigation:
Legal advice is taken for each transaction to ensure
all investments are qualifying. Advance assurance,
where appropriate, is sought from HMRCahead of
completion. TheManager keeps the Company’sVCT
qualifying status under continual review, seeking
to take appropriate action to maintain it where
required, and its reports are reviewed by the Board
on a quarterly basis. The Board has also retained
Shakespeare Martineau LLP to undertake an
independent VCT status monitoring role.
INVESTMENT VALUATION AND
LIQUIDITY RISK
Risk description:
Most of the Company’s investments are in small and
medium-sized unquoted companies which are VCT
qualifying holdings, and which by their nature entail
a higher level of risk, subjective valuations and lower
liquidity than investments in larger quoted companies.
Unquoted companies are unlisted and there is no
published market price for their shares. The value
of the shares needs to be calculated based on other
information using estimates and judgements, and is
reliant on the accuracy and completeness of some
information provided by investee companies.
The Company may not be able to sell its investments
in unquoted companies. Insufficient capital realisations
and the Company’s inability to raise new capital
could prevent the Company from meeting its financial
commitments and restrict dividends and buybacks.
Key controls and mitigation:
The Manager aims to limit the risk attaching to
the portfolio as a whole by careful selection, close
monitoring and timely realisation of investments, by
carrying out rigorous due diligence procedures and
maintaining a spread of holdings in terms of industry
sector. The Board reviews the investment portfolio
andits realisation profile with the Manager on a
quarterly basis.
Valuations are prepared in accordance with the
IPEV Valuation Guidelines, as discussed in more
detail in note 1 to the accounts. Sensitivity analysis
is disclosed in note 14. The Board reviews portfolio
valuations quarterly and the external auditor performs
an annual review, as noted in the auditor’s report.
42 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
VIABILITY STATEMENT
In accordance with principle 21 of the AIC Code of
Corporate Governance published by the AIC in February
2019, the Directors have assessed the prospects of the
Company over the three-year period to 31December2024.
This three-year period is used by the Board during the
strategic planning process and is considered reasonable
for a business of its nature and size.
In making this statement, the Board carried out an
assessment of the principal risks facing the Company,
including those that might threaten its business model,
future performance, solvency or liquidity. The Board
concentrated its efforts on the major factors that affect
the economic, regulatory and political environment.
The Board also considered the ability of the Company to
raise finance and deploy capital. This assessment took
account of the availability and likely effectiveness of the
mitigating actions that could be taken to avoid or reduce
the impact of the underlying risks, including the Manager
adapting its investment process to take account of the
more restrictive VCT investment rules that currently
apply.
The Directors have also considered the Company’s
income and expenditure projections and underlying
assumptions for the next three years and found these
to be soundly based.
Stress testing on the cash flow forecast has not been
performed, due to the discretionary nature of the main
inflows and outflows. If fewer funds are raised, and
fewer realisations achieved, then fewer investments and
buybacks can be made and reduced dividends can be
paid. The contracted ongoing costs of the Company are
sufficiently covered for the next threeyears.
Based on the Company’s processes for monitoring
cash flow, share price discount, ongoing review of the
investment objective and policy, asset allocation, sector
weightings and portfolio risk profile, the Board has
concluded that there is a reasonable expectation that
theCompany will be able to continue in operation and
meet its liabilities as they fall due over the three years
to31 December 2024.
This Strategic Report 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 to help them 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.
Future strategy
The Board and the Manager believe that the strategy
of focusing on growth private equity investments is
currently in the best interests of shareholders and
the historical information reproduced in this report is
evidence of positive recent performance in this area.
The Company’s performance relative to its peer
group will depend on the Manager’s ability to allocate
the Company’s assets effectively, make successful
investments and manage its liquidity appropriately.
This Strategic Report has been approved for issue by
the Board.
Margaret Littlejohns
Chair
13 April 2022
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
GOVERNANCE
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 43
WHAT’S IN THIS SECTION
Board of Directors 44
Directors’ Report 46
Corporate Governance 52
Audit Committee Report 56
Directors’ Remuneration
Report 58
Statement of Directors’
Responsibilities 62
44 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
BOARD OF DIRECTORS
Margaret Littlejohns
Chair of the Board
Gordon Humphries
Non-Executive Director
Appointed
1 October 2017
Experience
Margaret has 19 years of experience in both commercial
and investment banking, developing particular
expertise in derivatives and in credit and market risk
management. Between 2004 and 2006 she co-founded
two start-up ventures, providing self-storage facilities
to domestic and business customers in the Midlands
and acted as finance director until the businesses were
successfully sold in 2016.
Other positions
Margaret is a non-executive director of UK Commercial
Property REIT Limited. She previously served as
non-executive chair of Henderson High Income Trust
plc and as non-executive director of JPMorgan Mid
Cap Investment Trust plc.
Beneficial shareholding
51,181 shares
Appointed
20 February 2007
Experience
Gordon has over 30 years’ experience in financial
services, particularly with regard to investment trusts.
He is an investor in early stage private companies.
He was head of investment companies at Standard
Life Investments and prior to this he was joint head
of investment trusts at F&C Asset Management. He
was previously a member of the Institute of Chartered
Accountants of Scotland Audit and Assurance
Committee for the period 2005 to 2015. Gordon began
his career with Deloitte Haskins & Sells (now PwC),
where he qualified as a chartered accountant.
Other positions
Non-executive director of Maven Income and
GrowthVCT 5 plc, non-executive director of
JPMorgan UK Smaller Companies Investment Trust
plc and non-executive director of The Association
ofInvestment Companies.
Beneficial shareholding
32,863 shares
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 45
Jocelin Harris
Non-Executive Director
Patricia Dimond
Non-Executive Director
Appointed
18 December 2015
Experience
Jocelin is a qualified solicitor and since 1986 has run
Durrington Corporation, which provides finance and
advice for small businesses. Before this, he was a
director of private bank Rea Brothers for 13 years.
Hehas personally invested in over 50 development
stage companies over the last 40 years.
Other positions
Currently chair or non-executive director of a
numberof companies in the UK and the US. He is also
a non-executive director of Unicorn AIM VCT plc and
atrustee of St Peter’s College, Oxford.
Beneficial shareholding
70,242 shares
Appointed
1 February 2021
Experience
Patty has had an international career with over 30
years in the consumer, retail and financial sectors.
Asan Executive or Strategic Advisor, she has worked
with FTSE 100, private equity and owner-managed
companies. She is an investor in early stage technology
ventures, with an expertise in Fintech. Patty is an
alumna of McKinsey & Company and a Chartered
Financial Analyst (“CFA”). She qualified, with Deloitte
Haskins & Sells, as a Chartered Accountant (“CA”), and
holds an MBA from IMD Switzerland.
Other positions
Patty currently serves as a non-executive director
for LXi REIT Plc, where she is the chair of the
audit committee. She is a non-executive director
of Aberforth Smaller Companies Trust plc and a
non-executive director of Hilton Food Group plc.
Patty is a trustee of the National Academy for Social
Prescribing and the English National Opera where
she is senior independent director and the chair of
theaudit and risk committee.
Beneficial shareholding
23,668 shares
Audit Committee
Management Engagement
Committee
Nomination Committee
Remuneration Committee
Chair
Please note that the information on the Directors noted above is accurate up to the date of signing of the
AnnualReport and Accounts.
46 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Activities and status
The principal activity of the Company during the year was
the making of investments in unquoted companies in the
UK. The Company is not an investment company within
the meaning of Section 833 of the Companies Act 2006.
It has satisfied the requirements as a VCT under Sections
274–280A of the Income Tax Act 2007. Confirmation of
the Company’s qualification as a VCT hasbeen received
up to 31December2020 and the Board hasmanaged
andintends to continue to manage the Company’s affairs
in such a manner as to continue to comply with these
regulations.
Results and dividends
The total return attributable to shareholders for the year
amounted to £40,381,000 (2020: £3,380,000).
The Board declared a final dividend in respect of the year
ended 31 December 2020 of 3.7p per share which was
paid on 25 June 2021.
The Board is recommending a final dividend for the
year ended 31December 2021 of 4.5p per share, to be
paid on 24 June 2022 based on an ex-dividend date of
9June2022, with a record date of10 June 2022.
Net Asset Value Total Return
During the year ended 31December2021, the Company’s
principal indicator of performance, NAV Total Return,
increased 27.3% (2020: 0.7%) from 73.7p per share
to93.8p per share.
Share issues
During the year 6,508,226 shares and 1,786,248 shares
were issued pursuant to an offer for subscription and the
dividend reinvestment scheme respectively. Shares were
issued at issue prices ranging from 75.9p to 90.9p per
share.
At 31 December 2021 the Company had 205,591,087
shares in issue.
Share buybacks
During the year, the Company repurchased 8,657,404
shares for cancellation at a cost of £6,142,000. No shares
bought back by the Company are held in treasury. Share
buybacks have been completed at an average discount of
10.0%.
Principal risks, risk management and regulatory
environment
A summary of the principal risks faced by the Company is
set out in the Strategic Report on pages 40 and 41.
Financial instruments
Details of all financial instruments used by the Company
during the year are given in note 14 to the accounts.
Policy of paying creditors
The Company does not subscribe to a particular code but
follows a policy whereby suppliers are paid by the due
date and investment purchases are settled in accordance
with the stated terms. At the year end, trade creditors
represented an average credit period of less than 1 day
(2020: 1 day).
Management
The Company has appointed Foresight Group LLP
(“the Manager”) to provide investment management,
accounting and administration services.
Annually, the Management Engagement Committee
reviews the appropriateness of the Manager’s
appointment. In carrying out its review, the Management
Engagement Committee considers the investment
performance of the Company and the ability of
the Manager to produce satisfactory investment
performance. It also considers the length of the notice
period of the investment management contract and
fees payable to the Manager, together with the standard
of other services provided, which include company
secretarial services. It is the Board’s opinion that the
continuing appointment of the Manager on the terms
agreed is in the interests of shareholders as a whole. The
last review was undertaken in March 2022. The principal
terms of the management agreement are set out in note 3
to the accounts.
The annual expenses cap is 2.4% of net assets,
excludingperformance incentive fees, which is one of
thelower expenses caps of any VCT with total assets
over£50million.
No Director has an interest in any contract to which the
Company is a party other than their own appointment.
The Directors present their report and
thefinancial statements of the Company
forthe year ended 31 December 2021.
DIRECTORS’ REPORT
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 47
Foresight Group CI Limited, which acted as Manager
to the Company until 27 January 2020, earned fees
of £nil (2020: £192,000). Foresight Group LLP was
appointed as Manager on 27January 2020 and earned
fees of £3,087,000 in the year to 31December2021
(2020: £2,527,000). Foresight Group LLP received
£122,000 (2020: £120,000) during the year in respect
of secretarial, administrative, accounting and custodian
services to the Company.
Foresight Group LLP also received from investee
companies arrangement fees of £453,000 (2020:
£230,000) and directors’ fees of £750,000
(2020: £682,000).
£
Management fee 3,087,000
Arrangement fees 453,000
Directors’ fees 750,000
Secretarial fee 122,000
4,412,000
All amounts are stated, where applicable, net of VAT.
The Manager is also a party to the co-investment and
performance incentive arrangements described in note 13
to the accounts.
At the time of writing, staff of the Manager held a total
of 1,420,031 shares in the Company.
Performance-related incentives
Shareholders approved a co-investment scheme
and performance incentive arrangements at a
General Meeting held on 8March2017, effective from
31March2017. The co-investment andperformance
incentive arrangements were novated from Foresight
Group CI Limited to the Manager on 27January 2020.
Detailscan be found in note 13 to the accounts.
Venture Capital Trust status
Foresight VCT plc has been granted approval as a
Venture Capital Trust (“VCT”) under Sections 274-280A
of the Income Tax Act 2007 for the year ended
31December2020. The next complete review will be
carried out for the year ended 31December2021. It is
intended that the business of the Company be carried
on so as to maintain its VCT status.
The Board and the Manager have managed, and
continue to manage, the business in order to comply
with the legislation applicable to VCTs. The Board has
appointed Shakespeare Martineau LLP to monitor
and provide continuing advice in respect of the
Company’s compliance with applicable VCT legislation
and regulation. Reviews of prospective investments
are carried out by advisers assisting on the relevant
investment transaction.
The Board monitors the Company’s VCT status at
quarterly meetings of the Board based on advice from
Shakespeare Martineau LLP and the Manager monitors
the status on a continuing basis. As at 31 December 2021,
the Company had 100.0% (by VCT value) of its applicable
funds in such VCT qualifying holdings.
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. Thetax reliefs for subscriptions since
6April2006 are:
•
Income tax relief of up to 30% on subscription by
qualifying investors for new shares
•
VCT dividends (including capital distributions of
realised gains on investments) are not subject to
income tax in the hands of qualifying investors
•
Capital gains on disposal of VCT shares by qualifying
investors are tax-free, whenever the disposal occurs
The upfront income tax relief will be forfeited by
shareholders if the shares are not held for five years or
the Company loses its approval as a VCT in that period.
The other tax reliefs will similarly be lost if the Company
loses its approval as a VCT.
48 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
DIRECTORS’ REPORT CONTINUED
Substantial shareholdings
So far as the Board is aware, there were no individual
shareholdings representing 3% or more of the Company’s
issued share capital at the date of this report.
Likely future developments
Please refer to the Manager’s Review on page 23 for more
details on likely future developments.
Alternative Investment Fund Managers Directive
(“AIFMD”)
The AIFMD came into force on 22 July 2013 and sets out
the rules for the authorisation and ongoing regulation of
managers (“AIFMs”) that manage alternative investment
funds (“AIFs”) in the EU. The Company qualifies as an
AIF and so is required to comply, although additional
costs and administration requirements are not material.
The Company’s approval was confirmed in August 2014.
This has not affected the current arrangements with
the Manager, who continues to report to the Board and
manage the Company’s investments on a discretionary
basis.
Valuation policy
Investments held by the Company have been valued
in accordance with the International Private Equity
and Venture Capital (“IPEV”) Valuation Guidelines
(December 2018 and further COVID-19 guidance for
March 2020) developed by the British Venture Capital
Association and other organisations. Through these
guidelines, investments are valued as defined at “fair
value”. Where the investment being valued was made
recently, its cost would normally provide a good starting
point for estimating fair value. Ateach measurement
date, fair value is estimated using appropriate valuation
techniques. Investments quoted or traded on a market
are valued at bid price. The portfolio valuations are
prepared by the Manager, reviewed and approved by the
Board quarterly and are subject to annual review by the
external auditor.
Statutory Instrument 2008/410 schedule
7 part 6
The following disclosures are made in accordance with
Statutory Instrument 2008/410 schedule 7 part6.
Capital structure
The Company’s issued share capital as at 13 April 2022
was 226,388,890 ordinary shares of 1 penny each.
Further information on the share capital of the Company
is detailed in note 11 to the accounts.
Voting rights in the Company’s shares
Details of the voting rights in the Company’s shares at
the date of this report are given in note 5 in the Notice of
Annual General Meeting onpage 91.
Notifiable interests in the Company’s voting rights
At the date of this report no notifiable interests had been
declared in the Company’s voting rights.
Auditor
Pursuant to Section 487(2) of the Companies Act 2006,
the Board has decided to propose the re-appointment of
Deloitte LLP as auditor and a resolution concerning this
will be proposed at the Annual General Meeting.
Audit information
Pursuant to Section 418(2) of the Companies Act 2006,
each of the Directors confirms that (a) so far as they are
aware, there is no relevant audit information of which the
Company’s auditor is unaware; and (b) they have taken all
steps they ought to have taken to make themselves aware
of any relevant audit information and to establish that the
Company’s auditor is aware of such information.
Companies Act 2006 disclosures
In accordance with Schedule 7 of the Large and Medium
Size Companies and Groups (Accounts and Reports)
Regulations 2008, as amended, the Directors disclose the
following information:
•
The Company’s capital structure and voting rights are
summarised above, and there are no restrictions on
voting rights nor any agreement between holders of
securities that result in restrictions on the transfer of
securities or on voting rights
•
There exist no securities carrying special rights with
regard to the control of the Company
•
The rules concerning the appointment and
replacement of directors, amendment of the Articles
of Association and powers to issue or buy back the
Company’s shares are contained in the Articles of
Association of the Company and the Companies Act
2006
•
The Company does not have an employee share
scheme
•
There exist no agreements to which the Company is
party that may affect its control following a takeover
bid
•
There exist no agreements between the Company and
its Directors providing for compensation for loss of
office that may occur following a takeover bid or for
any other reason
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 49
Conflicts of interest
The Directors have declared any conflicts or potential
conflicts of interest to the Board, which has the authority
to approve such conflicts. The Company Secretary
maintains the Register of Directors’ Conflicts of Interest
which is reviewed quarterly by the Board and when
changes are notified. The Directors advise the Company
Secretary and Board as soon as they become aware of
any conflicts of interest. Directors who have conflicts of
interest do not take part in discussions concerning their
own conflicts.
Whistleblowing
The Board has been informed that the Manager has
arrangements in place in accordance with the UK
Corporate Governance Code’s recommendations by
which staff may, in confidence, raise concerns within their
respective organisations about possible improprieties in
matters of financial reporting or other matters. On the
basis of that information, adequate arrangements are in
place for the proportionate and independent investigation
of such matters and, where necessary, for appropriate
follow-up action to be taken.
Going concern
The Company’s business activities, together with
the factors likely to affect its future development,
performance and position, are set out in the Strategic
Report. The financial position of the Company, its cash
flows, liquidity position and borrowing facilities are
referred to in the Chair’s Statement, Strategic Report and
Notes to the Accounts. In addition, the Annual Report
and Accounts include the Company’s objectives, policies
and processes for managing its capital; its financial
risk management objectives; details of its financial
instruments and hedging activities; and its exposures to
credit risk and liquidity risk.
The Company has adequate financial resources together
with investments and income generated therefrom across
a variety of industries and sectors. The Board believes
that the Company is able to manage its business risks.
Cash flow projections have been reviewed and show
that the Company has sufficient funds to meet both
its contracted expenditure and its discretionary cash
outflows in the form of share buybacks and dividends.
The Company has no external loan finance in place and
therefore is not exposed to any gearing covenants,
although its underlying investments may have external
loan finance.
The Directors have considered the impact of COVID-19,
Brexit and Russia’s invasion of Ukraine during their
assessment of going concern and have reasonable
expectation that the Company has adequate resources
to continue in operational existence for the foreseeable
future. Thusthey continue to adopt the going concern
basis of accounting in preparing the Annual Report and
Accounts.
Post-balance sheet events are disclosed in note 20.
Directors’ remuneration
Following changes to the Companies Act 2006, UK
investment companies must comply with new regulations
in relation to directors’ remuneration. Directors’ fees can
only be paid in accordance with a remuneration policy
which has been approved by shareholders. The Company
must also publish a Directors’ Remuneration Report that
complies with a new set of disclosure requirements. See
pages 58 to 61.
Directors’ indemnification and insurance
To the extent permitted by law, the Directors have the
benefit of indemnities under the Articles of Association
of the Company against liabilities they may incur acting
in their capacity as Directors of the Company.
An insurance policy is maintained by the Company
whichindemnifies the Directors of the Company against
certain liabilities that may rise in the conduct of their
duties. There is no cover in respect of fraudulent or
dishonest actions.
Annual General Meeting
A formal notice convening the Annual General Meeting
on 31May 2022 can be found on pages 89 to 92.
Resolutions 1 to 10 will be proposed as ordinary
resolutions, meaning that for each resolution to be
passed more than half of the votes cast at the meeting
must be in favour of the resolution. Resolutions 11 and 12
will be proposed as special resolutions, meaning that for
each resolution to be passed at least 75% of the votes
cast at the meeting must be in favour of the resolution.
Resolutions 10 to 12 renew share issue and buyback
authorities granted at previous general meetings of the
Company and, together with Resolution 9, are explained
in further detail below. TheDirectors believe that the
proposed resolutions are in the interests of shareholders
and accordingly recommend shareholders to vote in
favour of each resolution.
50 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
DIRECTORS’ REPORT CONTINUED
Annual General Meeting continued
Resolution 9
The Directors recommend to shareholders the payment
of a final dividend in respect of the financial year ended
31 December 2021 of 4.5p per share of 1p each in the
capital of the Company, for payment on 24 June 2022
toshareholders on the register on 9 June 2022.
Resolution 10
Resolution 10 will authorise the Directors to allot relevant
securities generally, in accordance with Section 551 of
the Companies Act 2006, up to an aggregate nominal
amount of £950,000 (representing 24.7% of the issued
share capital of the Company as at the date of this Annual
Report). This authority will be used for the purposes
listed under the authority requested under Resolution11.
This includes authority to issue shares pursuant to
the dividend reinvestment scheme operated by the
Company, performance incentive fee arrangements with
Foresight Group LLP and relevant individuals of the
Foresight Group LLP investment team and top-up offers
for subscription to raise new funds for the Company if
the Board believes this to be in the best interests of the
Company. Any offer is intended to be at an offer price
linked to NAV. The authority conferred by Resolution 10
is in substitution for all existing authorities and will expire
(unless renewed, varied or revoked by the Company in a
general meeting) on the fifth anniversary of the passing
of the resolution save that the Company may allot equity
shares after such date in pursuant of a contract or
contracts made prior to the expiration of this authority.
Resolution 11
Resolution 11 will sanction, in a limited manner, the
disapplication of pre-emption rights in respect of the
allotment of equity securities (i)with an aggregate
nominal amount of up to £400,000 pursuant to offer(s)
for subscription, (ii)with an aggregate nominal amount
of up to 10% of the issued share capital pursuant to the
dividend reinvestment scheme operated by the Company
at a subscription price per share which may be less than
the Net Asset Value per share, as may be prescribed by
the scheme terms, (iii)with an aggregate nominal amount
of up to £100,000 pursuant to performance incentive
arrangements with Foresight Group LLP and relevant
individuals of the Foresight Group LLP investment team
at a subscription price which may be less than Net Asset
Value per share and (iv) with an aggregate nominal
amount of up to 10% of the issued share capital from
time to time for general purposes, in each case where
the proceeds of such issue may be used in whole or
part to purchase the Company’s shares. The authority
conferred by Resolution 11 is in substitution for all existing
authorities and will expire (unless renewed, varied or
revoked by the Company in a general meeting) at the
conclusion of the Annual General Meeting to be held in
2023 or, if earlier, on the date falling 15 months after the
passing of the resolution, save that the Company shall be
entitled to make offers or agreements before the expiry
of such authority which would or might require equity
securities to be allotted after such expiry and Directors
shall be entitled to allot equity securities pursuant to any
such offers or agreements as if the authority conferred
hereby had not expired.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 51
Resolution 12
It is proposed by Resolution 12 that the Company be
authorised to make market purchases of the Company’s
own shares. Under this authority the Directors may
purchase up to 33,935,695 shares, (representing
approximately 14.99% of the Company’s shares in issue at
the date of this Annual Report) or, if lower, such number
of shares (rounded down to the nearest whole share)
as shall equal 14.99% of the issued share capital at the
date the resolution is passed. When buying shares, the
Company cannot pay a price per share which is more
than 105% of the average of the middle market quotation
for a share taken from the London Stock Exchange daily
official list on the five business days immediately before
the day on which shares are purchased or, if greater, the
amount stipulated by Article 5(6) of the Market Abuse
Regulation (EU) 596/2014 (as such Regulation forms part
of UK law and as amended). The authority conferred by
Resolution 12 is in substitution for all existing authorities
and will expire (unless renewed, varied or revoked by
the Company in a general meeting) at the conclusion
of the Annual General Meeting to be held in 2023 or, if
earlier, on the date falling 15 months after the passing
of the resolution, save that the Company may purchase
its shares after such date in pursuance of a contract or
contracts made prior to the expiration of this authority.
Front-end VCT income tax relief is only obtainable by an
investor who makes an investment in new shares issued
by the Company. This means that investors may be willing
to pay more for new shares issued by the Company
than they would pay to buy shares from an existing
shareholder. Therefore, in the interest of shareholders
who may wish to sell shares from time to time, the
Company proposes to renew the authority to buy-in
shares, as it enables the Board to provide a degree of
liquidity in the Company’s shares. Whilst, generally, the
Company does not expect that shareholders will want
to sell their shares within five years of subscribing for
them because this would lead to a loss of tax relief, the
Directors anticipate that from time to time a shareholder
may need to sell shares within this period. In making
purchases the Company will deal only with member
firms of the London Stock Exchange and at a discount
to the then prevailing Net Asset Value per share of the
Company’s shares to ensure that existing shareholders’
interests are protected.
This report has been approved for issue by the Board.
Foresight Group LLP
Company Secretary
13 April 2022
52 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
CORPORATE GOVERNANCE
The AIC Code addresses the Principles and Provisions
set out in the UK Corporate Governance Code (“the AIC
Code”) issued by the Financial Reporting Council, as
well as setting out additional Provisions on issues that
are of specific relevance to the Company.
The Board considers that reporting against the
Principles and Provisions of the AIC Code, which has
been endorsed by the Financial Reporting Council,
provides more relevant information to shareholders.
The Company has complied with thePrinciples and
Provisions of the AIC Code.
The AIC Code is available on the AIC website
(www.theaic.co.uk). Itincludes an explanation of
how the AIC Code adapts the Principles and Provisions
set out in the AIC Code to make them relevant for
investment companies.
Unless noted as an exception below, the requirements
of the AIC Code were complied with throughout the
year ended 31 December 2021.
The Board
The Board comprises four Directors, all of whom
are non-executive and deemed independent.
Notwithstanding Gordon Humphries’ tenure as a Director
for more than nine years, the Nomination Committee
believes that, with his ongoing level of commitment and
track record of independence, Gordon continues to be
effective and he is deemed to be independent, both in
character and judgement. The Nomination Committee
meets annually to discuss the appropriateness of the
Board appointments and Directors are required to stand
for annual re-election.
The Directors have significant relevant experience of
similar investment funds, regulatory organisations,
corporate governance of listed companies, the private
equity industry and investing in small companies.
Division of responsibilities
The Board is responsible to shareholders for the proper
management of the Company and meets at least
quarterly and on an adhoc basis as required. It has
formally adopted a schedule of matters that are required
to be brought to it for decision, thus ensuring that it
maintains full and effective control over appropriate
strategic, financial, operational and compliance issues.
A management agreement between the Company and
the Manager sets out the matters over which the Manager
has authority, including monitoring and managing the
existing investment portfolio and the limits above which
Board approval must be sought. All other matters are
reserved for the approval of the Board of Directors. The
Manager, in the absence of explicit instruction from the
Board, is empowered to exercise discretion in the use of
the Company’s voting rights.
Individual Directors may, at the expense of the Company,
seek independent professional advice on any matter that
concerns them in the furtherance of their duties.
The Board has access to the officers of the Company
Secretary who also attend Board meetings.
Representatives of the Manager attend all formal Board
meetings although the Directors may on occasion meet
without representatives of the Manager being present.
Informal meetings with the Manager are also held
between Board meetings as required. Attendance by
Directors at Board and Committee meetings is detailed in
the table below.
The Company Secretary provides full information on
the Company’s assets, liabilities and other relevant
information to the Board in advance of each Board
meeting.
The Board of Foresight VCT plc has considered
the Principles and Provisions of the AIC Code
of Corporate Governance (“AIC Code”).
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 53
In light of the responsibilities retained by the Board and
its committees and of the responsibilities delegated
to the Manager, Shakespeare Martineau LLP and other
service providers, the Company has not appointed a chief
executive officer, deputy chair or a senior independent
Non-Executive Director as recommended by the AIC
Code. The provisions of the AIC Code which relate to the
division of responsibilities between a chair and a chief
executive officer are, accordingly, not applicable to the
Company.
Board committees
The Board has adopted formal terms of reference, which
are available to view by writing to the Company Secretary
at the registered office, for four standing committees
which make recommendations to the Board in specific
areas.
The Audit Committee comprises Gordon Humphries
(Chair), Patricia Dimond, Jocelin Harris and Margaret
Littlejohns, all of whom are considered to have sufficient
recent and relevant financial experience to discharge the
role, and meets at least twice a year to consider, amongst
other things, the following:
•
Review the valuation of unquoted investments
•
Monitor the integrity of the Annual and Half-Yearly
Reports of the Company and recommend the accounts
to the Board for approval
•
Review the Company’s internal control and risk
management systems
•
Make recommendations to the Board in relation to
theappointment of the external auditor
•
Review and monitor the external auditor’s
independence
•
Implement and review the Company’s policy on
the engagement of the external auditor to supply
non-audit services
In the prior year, the Board re-appointedDeloitte LLP as
the Company’s auditor.
The Audit Committee has performed an assessment of
the audit process and the auditor’s report in the Audit
Committee Report. The Directors have decided to
recommend the reappointment of Deloitte LLP as auditor
and a resolution concerning this will be proposed at
the Annual General Meeting. Blick Rothenberg Limited
provides the Company’s taxation services.
The Management Engagement Committee comprises
Margaret Littlejohns (Chair), Patricia Dimond, Jocelin
Harris and Gordon Humphries and meets at least annually
to review the appointment and terms of engagement of
the Manager. The Board has decided that the entire Board
of Directors should fulfil the role of the Management
Engagement Committee due to its size.
In addition to the meetings below, ten further meetings were held in relation to the publication of corporate
documents, investments, Company strategy and fundraising.
Board Audit Nomination
Management
Engagement &
Remuneration
1
Patricia Dimond 4/4 2/2 1/1 1/1
Gordon Humphries 4/4 2/2 1/1 1/1
Jocelin Harris 4/4 2/2 1/1 1/1
Margaret Littlejohns 4/4 2/2 1/1 1/1
1. The last Management Engagement & Remuneration Committee meeting was held in March 2021, after which the Committee
was split into a separate Management Engagement Committee and a Remuneration Committee.
54 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
CORPORATE GOVERNANCE CONTINUED
Board committees continued
The Remuneration Committee comprises Gordon
Humphries (Chair), Patricia Dimond, Jocelin Harris and
Margaret Littlejohns and meets at least annually to
consider the levels of remuneration of the Directors.
More details can be found in the Directors’ Remuneration
Report. The Board has decided that the entire Board
of Directors should fulfil the role of the Remuneration
Committee due to its size.
The Nomination Committee comprises Margaret
Littlejohns (Chair), Patricia Dimond, Jocelin Harris
and Gordon Humphries and meets at least annually
to consider the composition and balance of skills,
knowledge and experience of the Board and to make
nominations to the Board in the event of a vacancy.
The Board has decided that the entire Board of Directors
should fulfil the role of the Nomination Committee due
to its size.
The Board believes that, as a whole, it has an appropriate
balance of skills, experience and knowledge. The Board
also believes that diversity of experience and approach,
including gender diversity, amongst Board members is
important and it is the Company’s policy to give careful
consideration to issues of Board balance and diversity
when making new appointments. The Board currently
comprises an equal number of female and male Directors.
There is no formal diversity policy in place, however
the Board is conscious of the need for diversity and
will consider both male and female candidates from all
ethnic backgrounds when making new appointments.
The Nomination Committee makes recommendations to
the Board on the Company’s succession plans and also
considers the resolutions for the annual re-election of
Directors.
Board evaluation
The Board undertakes a formal annual evaluation of
its own performance and that of its committees, as
recommended by the AIC Code. Initially, the evaluation
takes the form of a questionnaire for the Chair and
individual Directors. The Chair then discusses the results
with the Board (and its committees) and following
completion of this stage of the evaluation, the Chair will
take appropriate action to address any issues arising from
the process.
Internal controls
The Directors have overall responsibility for the
Company’s system of internal control and for reviewing
its effectiveness.
The internal controls system is designed to manage,
rather than eliminate, the risks of failure to achieve the
Company’s business objectives. The system is designed
to meet the particular needs of the Company and
the risks to which it is exposed and by its nature can
provide reasonable, but not absolute,assurance against
misstatement or loss.
The Manager has an established system of financial
control, including internal financial controls, to ensure
that proper accounting records are maintained and that
financial information for use within the business and for
reporting to shareholders is accurate and reliable and
that the Company’s assets are safeguarded.
The Manager was appointed as Company Secretary in
2017 with responsibilities relating to the administration of
the non-financial systems of internal control. All Directors
have access to the advice and services of the officers of
the Company Secretary, who is responsible to the Board
for ensuring that Board procedures and applicable rules
and regulations are complied with.
Pursuant to the terms of its appointment, the Manager
invests the Company’s assets and has physical custody
of documents of title relating to investments.
There is a continuous process for identifying, evaluating
and managing the significant risks faced by the Company,
that has been in place for the year under review and up to
the date of approval of the Annual Report and Accounts,
and this process is regularly reviewed by the Board
and accords with the guidance. The process is based
principally on the Manager’s existing risk-based approach
to internal control whereby a risk register is created that
identifies the key functions carried out by the Manager
and other service providers, the individual activities
undertaken within those functions, the risks associated
with each activity and the controls employed to counter
those risks. A residual risk rating is then applied.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 55
The Board is provided with reports highlighting
all changes to the risk ratings and confirming the
action that has been, or is being, taken. This process
covers consideration of the key business, operational,
compliance and financial risks facing the Company and
includes consideration of the risks associated with the
Company’s arrangements with the Manager, Shakespeare
Martineau LLP and other service providers.
The Audit Committee has carried out a review of the
effectiveness of the system of internal control, together
with a review of the operational and compliance controls
and risk management, as it operated during the year, and
reported its conclusions to the Board (which was satisfied
with the outcome of the review).
Such review procedures have been in place throughout
the full financial year and up to the date of approval
of the accounts, and the Board is satisfied with their
effectiveness. These procedures are designed to manage,
rather than eliminate, risk and, by their nature, can only
provide reasonable, but not absolute, assurance against
material misstatement or loss. The Board monitors the
investment performance of the Company against its
objectives at each Board meeting.
The Board also reviews the Company’s activities since the
last Board meeting to ensure that the Manager adheres to
the agreed investment policy and approved investment
guidelines and, if necessary, approves changes to such
policy and guidelines.
The Board has reviewed the need for an internal audit
function. Ithas decided that the systems and procedures
employed by the Manager, the Audit Committee and
other third-party advisers provide sufficient assurance
that asound system of internal control, which safeguards
shareholders’ investments and the Company’s assets,
is maintained. In addition, the Company’s financial
statements are audited by external auditors. TheBoard
has therefore concluded that it is not necessary to
establish an internal audit function at present but this
policy will be kept under review.
UK Stewardship Code
The Manager supports the aims and objectives of the
FRC’s Stewardship Code (the “Stewardship Code”).
While the Manager is not currently a signatory to the
Stewardship Code it is working to ensure alignment with
it and it is expected that an application will be made by
no later than 30 April 2023. A statement to that effect
is noted on the Manager’s website and can be found at:
https://www.foresightgroup.eu/stewardship-code.
Relations with shareholders
The Company communicates with shareholders and
solicits their views where it considers it is appropriate
to do so. TheManager hosts regular investor forums
forshareholders and publishes quarterly factsheets,
as well as information on new investments, on the
Company’s website.
Individual shareholders are welcomed, when not
prevented by temporary regulations, to the Annual
General Meeting, where they have the opportunity to
ask questions of the Directors, including the Chair, as
well as the Chairs of the Audit, Nomination, Management
Engagement and Remuneration Committees. The
Board may from time to time seek feedback through
shareholder questionnaires. There is also an open
invitation for shareholders to meet the Manager. For more
information on the Directors’ relations with shareholders
please refer to the Section 172(1) statement in the
Strategic Report on page 37.
Margaret Littlejohns
Chair
13 April 2022
56 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Gordon Humphries
Chair of the Audit Committee
The Audit Committee has identified and considered the
following key areas of risk in relation to the business
activities and financial statements of the Company:
•
Valuation of unquoted investments
•
Existence of unquoted investments
•
Venture Capital Trust status
These issues were discussed with the Manager and the
auditor at the conclusion of the audit of the financial
statements, as explained below:
Valuation of unquoted investments
The Directors have met quarterly to assess the
appropriateness of the estimates and judgements made
by the Manager in the investment valuations.
As a VCT, the Company’s investments are predominantly
in unlisted securities, which are difficult to value
and require the application of skill, knowledge and
judgement by the Board and Audit Committee. During
the valuation process the Manager follows the valuation
methodologies for unlisted investments as set out in
the IPEV Valuation guidelines and appropriate industry
valuation benchmarks. These valuation policies are set
out in note 1 of the accounts. These were then further
checked by the auditor and reviewed and challenged
by the Audit Committee. The Manager confirmed to
the Audit Committee that the investment valuations
had been calculated consistently with prior periods and
inaccordance with published industry guidelines, taking
account of the latest available information about investee
companies and current market data.
Existence of unquoted investments
For all investments made, both share certificates and
loan stock documentation are held by the Manager in
the Company’s own name and monthly reconciliations
are carried out by the Manager to ensure that valid
documents of title are held.
Venture Capital Trust status
Maintaining VCT status and adhering to the tax rules of
Section 274 of ITA 2007 is critical to both the Company
and its shareholders for them to retain their VCT tax
benefits.
The Manager confirmed to the Audit Committee that the
conditions for maintaining the Company’s status as an
approved VCT had been met throughout the year. The
Manager seeks legal advice in advance for all qualifying
investments and reviews the Company’s qualifying status
in advance of realisations being made and throughout the
year. The Audit Committee is in regular contact with the
Manager and any potential issues with VCT status would
be discussed at or between formal meetings. Inaddition,
an external third-party review of VCT status is conducted
by Shakespeare Martineau LLP on a quarterly basis and
this is reported to both the Board, Audit Committee and
the Manager.
AUDIT COMMITTEE REPORT
Gordon Humphries
Chair of the Audit Committee
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 57
Auditor’s assessment
The Manager and auditor confirmed to the Audit
Committee that they were not aware of any material
misstatements. Having reviewed the reports received
from the Manager and auditor, the Audit Committee
is satisfied that the key areas of risk and judgement
have been addressed appropriately in the financial
statements and that the significant assumptions used
in determining the value of assets and liabilities have
been properly appraised and are sufficiently robust. The
Audit Committee considers that Deloitte LLP has carried
out its duties as auditor in a diligent and professional
manner. During the year, the Audit Committee assessed
the effectiveness of the current external audit process by
assessing and discussing specific audit documentation
presented to it in accordance with guidance issued
by the Auditing Practices Board. The audit partner is
rotated every five years, ensuring that objectivity and
independence is not impaired. The current audit partner,
Chris Hunter, assumed responsibility for the audit in
2019. Deloitte LLP was appointed as auditor in August
2019, with its first audit for the year ended 31 December
2019. No tender for the audit of the Company has been
undertaken since this date and the Audit Committee
does not intend to put the audit out to tender during
the current financial year. Aspart of its review of the
continuing appointment of the auditor, the Audit
Committee considers the need to put the audit out to
tender, its fees and independence from the Manager
along with any matters raised during each audit.
Deloitte LLP is not engaged for non-audit services.
The Audit Committee considered the performance of
the auditor during the year and agreed that Deloitte
LLP continued to provide a good level of service and
maintained a good knowledge of the VCT market, making
sure audit quality continued to be maintained.
The Audit Committee met in March 2021 to review
the Annual Report and Accounts for the year ended
31December 2020 and the Company’s risk register, in
August 2021 to review the Half-Yearly Report, the audit
plan for the year ended 31December 2021 and the
Company’s risk register, and in March2022 to review
the Annual Report and Accounts for the year ended
31December 2021.
Gordon Humphries
Chair of the Audit Committee
13 April 2022
58 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Introduction
The Board has prepared this report in accordance with
the requirements of Schedule 8 of the Large and Medium
Sized Companies and Groups (Accounts and Reports)
Regulations 2008. An ordinary resolution to approve this
report will be put to the members at the forthcoming
Annual General Meeting.
The law requires the Company’s auditor, Deloitte LLP, to
audit certain areas of the disclosures provided. Where
disclosures have been audited, they are indicated as
such. The auditor’s opinion is included in the Independent
Auditor’s Report.
Annual Statement from the Chair of the
Remuneration Committee
The Board, which is profiled on pages44 and 45, consists
solely of Non-Executive Directors and considers at least
annually the levelof the Directors’ fees.
During the year, remuneration for the Directors was
increased following shareholder approval of the
remuneration policy and remuneration report at the
Annual General Meeting.
In March 2022, the Committee concluded, following a
review of the level of Directors’ fees, there would be an
increase of 3.45% to the base salary of Directors effective
1 July 2022.
Consideration by the Directors of matters
relating to Directors’ remuneration
The Remuneration Committee comprises four Directors:
Gordon Humphries (Chair), Patricia Dimond, Jocelin
Harris and Margaret Littlejohns.
The Remuneration Committee meets at least annually
to consider the levels of remuneration of the Directors,
specifically reflecting the time commitment and
responsibilities of the role.
The Remuneration Committee also undertakes external
comparisons and reviews to ensure that the levels of
remuneration paid are broadly in line with industry
standards and members have access to independent
advice where they consider it appropriate. During the
year neither the Board nor the Remuneration Committee
has been provided with external advice or services by any
person, but has received industry comparison information
from the Manager and industry research carried out by
third parties in respect of Directors’ remuneration.
The remuneration policy set by the Board is described
below. Individual remuneration packages are determined
by the Remuneration Committee within the framework of
this policy.
The Remuneration Committee recommends to the Board
a base feefor Non-Executive Directors which is increased
by agreed percentages for chairing the Board and each
committee.
DIRECTORS’ REMUNERATION REPORT
Gordon Humphries
Chair of the Audit Committee
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 59
Remuneration policy
The Board’s policy is that the remuneration of
Non-Executive Directors should reflect time spent
and the responsibilities borne by the Directors for the
Company’s affairs and should be sufficient to enable
candidates of high calibre to be recruited. The levels of
Directors’ fees paid by the Company for the year ended
31 December 2021 were agreed during the year.
It is considered appropriate that no aspect of Directors’
remuneration should be performance related in light of
the Directors’ non-executive status, and Directors are not
eligible for bonuses or other benefits.
The Company’s policy is to pay the Directors monthly in
arrears, to the Directors personally (or to a third party if
requested by any Director, although no such request has
been made).
None of the Directors has a service contract but, under
letters of appointment dated 10 January 2018 and
1February 2021 (for Patricia Dimond), they may resign at
any time. There are no set minimum notice periods and
nocompensation is payable to Directors on leaving office.
As the Directors are not appointed for a fixed length of
time there is no unexpired term to their appointment but
all Directors retire every year and may seek re-election.
The above remuneration policy was last approved
by shareholders at the Annual General Meeting on
27May2021 and it is the intention of the Board that the
above remuneration policy will, subject to shareholder
approval, continue in effect immediately following the
Annual General Meeting of the Company on 31May2022
for a period of three years unless renewed, varied or
revoked in a general meeting.
Shareholders’ views in respect of Directors’ remuneration
may be communicated at the Company’s Annual General
Meeting and are taken into account in formulating the
Directors’ remuneration policy. At the last Annual General
Meeting, 95.4% of shareholders voted in favour of the
resolution approving the Directors’ Remuneration Report,
showing significant shareholder support.
Please refer to page 61 for the Directors’ remuneration
tables.
Retirement by rotation
All Directors retire and may offer themselves for
re-election every year.
Details of individual emoluments
and compensation
The emoluments in respect of qualifying services of each
person who served as a Director during the year are
shown on page 61. NoDirector has waived or agreed to
waive any emoluments from the Company in either the
current or previous year.
No other remuneration was paid or payable by the
Company during the current or previous year nor were
any expenses claimed by or paid to them other than for
expenses incurred wholly, necessarily and exclusively in
furtherance of their duties as Directors of the Company.
The Company’s Articles of Association do not set an
annual limit on the level of Directors’ fees but fees must
be considered within the wider remuneration policy
notedabove.
Directors’ liability insurance is held by the Company in
respect of the Directors.
60 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
Directors
The Directors who held office during the year or up to the date of signing the Annual Report and their interests in the
issued shares of 1p each of the Company were as follows:
31 December 2021 31 December 2020
Shares (audited) Shares (audited)
Margaret Littlejohns (Chair) 51,181 38,759
Patricia Dimond
1
— —
Jocelin Harris 70,242 66,977
Gordon Humphries 32,863 27,783
John Gregory
2
— 49,322
1. Patricia Dimond appointed on 1 February 2021.
2. John Gregory retired on 27 May 2021.
All the Directors’ share interests shown above were held beneficially.
In January 2022, Patricia Dimond purchased 23,668 shares in the Company.
In accordance with the UK Corporate Governance Code and the Board’s policy, Ms Dimond, Mr Harris, Mr Humphries
and Ms Littlejohns retire annually and, being eligible, offer themselves for re-election. Biographical notes on the
Directors are given on pages 44 and 45.
The Board believes that MsDimond’s, Mr Harris’, Mr Humphries’ and Ms Littlejohns’ skills, experience and knowledge
continue to complement each other and add value to the Company and recommends their re-election to the Board.
None of the Directors has acontract of service with the Company.
Share Price Total Return (pence)
140
130
80
150
160
Share Price Total Return (pence)
31 December
2016
31 December
2017
31 December
2018
31 December
2019
31 December
2020
31 December
2021
Foresight VCT plc Share Price Total Return
AIC VCT Generalist sector share price total return
100
90
110
120
Share Proice Total Return (pence) (rebased)
Share Price Total Return
The graph below charts the total shareholder return to 31 December 2021, on the hypothetical value of £100 invested
on 1 January 2017. The return is compared to the total shareholder return on a notional investment of £100 in the AIC
VCT Generalist sector.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 61
Audited information
The information below has been audited. See the Independent Auditor’s Report on pages 64 to 69.
Directors’ fees Directors’ taxable Total remuneration Total remuneration
year ended benefits
1
year ended year ended year ended
31 December 2021 31 December 2021 31 December 2021 31 December 2020
(£) (£) (£) (£)
Margaret Littlejohns (Chair) 29,950 — 29,950 25,400
Patricia Dimond 22,400 — 22,400 —
Jocelin Harris 24,450 — 24,450 24,200
Gordon Humphries 29,800 2,050 31,850 30,800
John Gregory 13,600 — 13,600 32,650
Total 120,200 2,050 122,250 113,050
1. Relates to expenses incurred for attending meetings at the Company’s principal place of business.
The Directors are not eligible for pension benefits, share options or long-term incentive schemes. Directors’ fees are
reviewed annually and fees were last increased on 1 July 2021 after consideration of fees paid to other VCT directors
and available independent research.
Votes cast For and Against the Directors’ Remuneration Report for the year ended 31 December 2020:
Shares and percentage Shares and percentage
of votes cast of votes cast Number of
For Against votes withheld
95.4% 4.6%
10,744,004 votes 520,902 votes 230,074 votes
In accordance with Companies Act 2006 legislation, the table below sets out the relative importance of spend on pay
when compared to distributions to shareholders in the form of dividends and share buybacks.
Year ended Year ended
31 December 2021 31 December 2020
Dividends £7,508,000 £6,804,000
Share buybacks £6,142,000 £2,674,000
Total shareholder distributions £13,650,000 £9,478,000
Directors’ fees £120,200 £111,750
Directors’ fees % of shareholder distributions 0.9% 1.2%
Approval of report
An ordinary resolution for the approval of this Directors’ Remuneration Report will be put to shareholders at the
forthcoming Annual General Meeting. In addition to this, Resolution 3, which is seeking shareholder approval for the
Directors’ remuneration policy, will, if approved, take effect from the Annual General Meeting and will be valid for a
period of three years unless renewed, varied or revoked by the Company at a general meeting.
This Directors’ Remuneration Report was approved by the Board on 13 April 2022 and is signed on its behalf by
Gordon Humphries (Director).
On behalf of the Board
Gordon Humphries
Chair of the Remuneration Committee
13 April 2022
62 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Statement of Directors’ responsibilities in
respect of the Annual Report and Accounts
The Directors are responsible for preparing the Annual
Report and Accounts 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 including
FRS 102, The Financial Reporting Standard applicable in
theUK and Republic of Ireland.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of its profit or loss 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
•
State whether applicable UK Accounting Standards
have been followed, subject to any material departures
disclosed and explained in the financial statements
•
Assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern
•
Use the going concern basis of accounting unless they
either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the Company and enable them to ensure that its
financial statements comply with the Companies Act
2006. They are responsible for such internal control as
they determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a 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. Legislation in the
UK governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Statement of the Directors in respect of the
Annual Report
We confirm that to the best of our knowledge:
•
The financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company
•
The Directors’ Report and the Strategic Report include
a fair review of the development and performance
of the business and the position of the issuer,
together with a description of the principal risks and
uncertainties that they face
We consider the Annual Report and Accounts, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
On behalf of the Board
Margaret Littlejohns
Chair
13 April 2022
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 63
WHAT’S IN THIS SECTION
Independent Auditor’s Report 64
Income Statement 70
Reconciliation of Movements
in Shareholders’ Funds 71
Balance Sheet 72
Cash Flow Statement 73
Notes to the Accounts 74
Notice of Annual General Meeting 89
C Shares Dividend History
and NAV Total Return 93
Glossary of Terms 94
Financial Conduct Authority 95
Corporate Information 96
Additional Information IBC
FINANCIAL
STATEMENTS
64 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
Report on the audit of the financial
statements
1. Opinion
In our opinion the financial statements of Foresight VCT
plc (the Company):
•
Give a true and fair view of the state of the
Company’s affairs as at 31 December 2021 and of
its return for the year then ended
•
Have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice, including Financial Reporting Standard
102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland”
•
Have been prepared in accordance with the
requirements of the Companies Act 2006
We have audited the financial statements which comprise:
•
The Income Statement
•
The Balance Sheet
•
The Statement of Changes in Equity
•
The Cash Flow Statement
•
The related notes 1 to 20
The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom
Accounting Standards, including FRS 102 “The Financial
Reporting Standard applicable in the UK and Republic
of Ireland” (United Kingdom Generally Accepted
Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are
further described in the auditor’s responsibilities for the
audit of the financial statements section of our report.
We are independent of the Company in accordance with
the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the Financial
Reporting Council’s (the “FRC’s”) Ethical Standard as
applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements. We confirm that we have not
provided any non-audit services prohibited by the FRC’s
Ethical Standard to the Company.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FORESIGHT VCT PLC
3. Summary of our audit approach
Key audit matters
The key audit matter that we identified in the current year was the valuation of
early-stage unlisted investments.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality The materiality that we used in the current year was £3.7 million (2020: £3.0 million),
which was determined on the basis of 2% of the Net Asset Value of the Company at
year end.
Scoping Audit work to respond to the risks of material misstatement was performed directly
bythe engagement team.
Significant changes
inour approach
There were no significant changes to our audit approach in the current year.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 65
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
Our evaluation of the Directors’ assessment of the
Company’s ability to continue to adopt the going concern
basis of accounting included:
•
Considering as part of our risk assessment the
nature of the Company, its business model and
related risks including where relevant the impact
of the COVID-19 pandemic and Brexit, the
requirements of the applicable financial reporting
framework and the system of internal control
•
Evaluating the Directors’ assessment of the
Company’s ability to continue as a going concern,
including challenging the underlying data and
key assumptions used to make the assessment
through review of forecasted cash flows and the
impact of external market forces, and evaluating
the Directors’ plans for future actions in relation to
their going concern assessment
•
Assessing the relevant disclosures about whether
the Directors considered it appropriate to adopt
the going concern basis of accounting in preparing
the Financial Statements
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may
cast significant doubt on the Company’s ability to
continue as agoing concern for a period of at least
twelve monthsfrom when the financial statements are
authorised for issue.
In relation to the reporting on how the Company has
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described in
the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
that we identified. These matters included those which
had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the
efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
66 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF FORESIGHT VCT PLC
5. Key audit matters continued
5.1. Valuation of unquoted investments
Key audit
matter
description
The Company holds unquoted investments of £166.7 million representing 90% of the entity’s
netassets (2020: £132.7 million, 87.4%).
The valuation of the investments held by the Company, due to materiality in the context of
thefinancial statements as a whole, is considered to be one of the areas which has the greatest
effect on our overall audit strategy and allocation of resources in planning and completing our
audit. The unquoted investments are valued in line with IPEV Valuation Guidelines and carry
a higher degree of judgement. In particular, investments held by the Company that are in the
retail, leisure and hospitality industries have been highlighted as being particularly judgemental
duetothe adverse impact that the COVID-19 pandemic has had on these industries. Therefore,
we have pinpointed the key audit matter of material misstatement to the valuation of unquoted
investments operating in these sectors.
Refer to note 1(b) to the financial statements for the accounting policy on unquoted investments
and details of the investments are disclosed in note 8 to the financial statements. Critical accounting
judgement and key sources of estimation uncertainty is disclosed in note 1(k). Thevaluation of
investment risk is included within the Audit Committee Report on pages 56 and 57.
How the scope
of our audit
responded to
the key audit
matter
Our testing included:
•
Obtaining an understanding of controls in place over the valuation of unquoted investments
through enquiry of management and detailed review of documentation of relevant controls
•
Assessing the valuation methodology applied for compliance with the IPEV Guidelines and
assessed the assumptions adopted, enquiring with and challenging the Manager on the
assumptions where appropriate
•
Testing the judgemental inputs around maintainable revenue/EBITDA adjusted for
the impact of COVID-19 as relevant, against management accounts and latest audited
accounts where available. We have reviewed the suitability and accuracy of the multiple
from a basket of comparable transactions/quoted companies
•
Challenging the Manager on any adjustments made in relation to the impact of COVID-19 on
the performance of the investee companies, scrutinising cash position and forecasts as relevant
•
Testing a sample of unquoted investee company data (e.g. financial information and
capital structures) to supporting documentation
•
Assessing whether any critical judgement or sources of estimation uncertainty were
applied and appropriately disclosed
Key
observations
Based on our testing, we concluded that the valuation of the early-stage unlisted investments
is reasonable.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both
in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality £3.7m (2020: £3.0m)
Basis for
determining
materiality
2% (2020: 2%) of Net Asset
Value
Rationale
for the
benchmark
applied
Net Asset Value is the
primary measure used by the
shareholders in assessing the
performance of the Company
as an investment entity
Nav Materiality
Nav
£185.10m
Materiality £3.70m
Audit Committee
reporting threshold
£185k
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 67
6.2. Performance materiality
We set performance materiality at a level lower than
materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed
the materiality for the financial statements as a whole.
Performance materiality was set at 70% of materiality for
the 2021 audit (2020: 70%). In determining performance
materiality, we considered the quality of the Company’s
overall control environment and management’s
willingness to correct identified errors in previous audits.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would
report to the Committee all audit differences in excess
of £185k (2020: £151k), as well as differences below
that threshold that, in our view, warranted reporting
on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified
when assessing the overall presentation of the
financialstatements.
7. An overview of the scope of our audit
7.1.Scoping
Our audit was scoped by obtaining an understanding of
the entity and its environment, including internal control,
and assessing the risks of material misstatement. Audit
work to respond to the risks of material misstatement
wasperformed directly by the audit engagement team.
7.2. Our consideration of the control environment
The investment management and accounting and
reporting operations were undertaken by the Manager,
whilst the safeguarding of assets resides with the
Manager. We have obtained an understanding of the
Manager’s systems of internal control and reviewed the
Manager’s controls report. We have not relied on the
controls at the Manager. However, in the current year, we
took a controls reliance strategy over investment income.
This consisted of testing the relevant controls over the
processing and review of investment income. Inaddition,
we reperformed the calculation of investment income for
a sample of investments.
8. Other information
The other information comprises the information included
in the Annual Report and Accounts, other than the
financial statements and our auditor’s report thereon.
The Directors are responsible for the other information
contained within the Annual Report and Accounts.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
toreport that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for
the preparation of the financial statements and for
being satisfied that they give a true and fair view, and
for suchinternal control as the Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Company’s ability to
continue as a going concern, disclosing as applicable,
matters related to going concern and using the going
concern basis of accounting unless the Directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
A further description of our responsibilities for the
audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities.
Thisdescription forms part of our auditor’s report.
68 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF FORESIGHT VCT PLC
11. Extent to which the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below.
11.1. Identifying and assessing potential risks
related to irregularities
In identifying and assessing risks of material
misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, we
considered the following:
•
The nature of the industry and sector, control
environment and business performance including
the design of the Company’s remuneration policies,
key drivers for Directors’ remuneration, bonus
levels and performance targets
•
Results of our enquiries of management and the
Audit Committee about their own identification
and assessment of the risks of irregularities
•
Any matters we identified having obtained and
reviewed the Company’s documentation of their
policies and procedures relating to:
•
Identifying, evaluating and complying with laws
and regulations and whether they were aware of
any instances of non-compliance
•
Detecting and responding to the risks of fraud
and whether they have knowledge of any actual,
suspected or alleged fraud
•
The internal controls established to mitigate
risks of fraud or non-compliance with laws and
regulations
•
The matters discussed among the audit
engagement team and relevant internal specialists,
including tax and valuations regarding how and
where fraud might occur in the financial statements
and any potential indicators of fraud
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential
for fraud in the following areas: valuation of early-stage
unlisted investments. In common with all audits under ISAs
(UK), we are also required to perform specific procedures
to respond to the risk of management override.
We also obtained an understanding of the legal and
regulatory framework that the company operates in,
focusing on provisions of those laws and regulations
that had a direct effect on the determination of material
amounts and disclosures in the financial statements.
Thekey laws and regulations we considered in this context
included the UK Companies Act and Listing Rules.
In addition, we considered provisions of other laws
and regulations that do not have a direct effect on the
financial statements but compliance with which may be
fundamental to the Company’s ability to operate or to
avoid a material penalty. These included the Company’s
compliance with VCT regulations.
11.2. Audit response to risks identified
As a result of performing the above, we identified the
valuation of early-stage unlisted investments as a key
audit matter related to the potential risk of fraud. The key
audit matters section of our report explains the matter in
more detail and also describes the specific procedures we
performed in response to that key audit matter.
In addition to the above, our procedures to respond to
risks identified included the following:
•
Reviewing the Financial Statement disclosures and
testing to supporting documentation to assess
compliance with provisions of relevant laws and
regulations described as having a direct effect on
the financial statements
•
Enquiring of management, the Audit Committee
and external legal counsel concerning actual and
potential litigation and claims
•
Performing analytical procedures to identify any
unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud
•
Reading minutes of meetings of those charged with
governance, and reviewing correspondence with
HMRC and the FCA
•
In addressing the risk of fraud through
management override of controls, testing the
appropriateness of journal entries and other
adjustments; assessing whether the judgements
made in making accounting estimates are indicative
of a potential bias; and evaluating the business
rationale of any significant transactions that are
unusual or outside the normal course of business
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, including internal specialists,
and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout
theaudit.
Report on other legal and regulatory
requirements
12. Opinions on other matters prescribed by
the Companies Act 2006
In our opinion the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 69
In our opinion, based on the work undertaken in the
course of the audit:
•
The information given in the Strategic Report
and the Directors’ Report for the financial year
for which the financial statements are prepared is
consistent with the financial statements
•
The Strategic Report and the Directors’ Report
have been prepared in accordance with applicable
legal requirements
In the light of the knowledge and understanding of
the Company and its environment obtained in the
course of the audit, we have not identified any material
misstatements in the Strategic Report or the Directors’
Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ Report
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to
the Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements and our knowledge
obtained during the audit:
•
The Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on page 49
•
The Directors’ explanation as to its assessment
of the Company’s prospects, the period this
assessment covers and why the period is
appropriate set out on page 42
•
The Directors’ statement on fair, balanced and
understandable set out on page 62
•
The Board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on pages 40 and 41
•
The section of the Annual Report and Accounts
that describes the review of effectiveness of risk
management and internal control systems set out
on pages 54 and 55
•
The section describing the work of the Audit
Committee set out on pages 53 and 54
14. Matters on which we are required to report
by exception
14.1. Adequacy of explanations received and
accounting records
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
•
We have not received all the information and
explanations we require for our audit
•
Adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us
•
The financial statements are not in agreement with
the accounting records and returns
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to
report if in our opinion certain disclosures of Directors’
remuneration have not been made or the part of the
Directors’ Remuneration Report to be audited is not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to
address
15.1. Auditor tenure
Following the recommendation of the Audit Committee,
we were appointed by the Board of Directors on
30August 2019 to audit the Financial Statements for the
year ending 31 December 2019 and subsequent financial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments
of the firm is 3 years, covering the years ending
31December2019 to 31 December 2021.
15.2. Consistency of the audit report with the
additional report to the Audit Committee
Our audit opinion is consistent with the additional report
to the Audit Committee we are required to provide in
accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Chris Hunter CA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Edinburgh, United Kingdom
13 April 2022
70 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Year ended Year ended
31 December 2021 31 December 2020
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Realised gains/(losses)
on investments 8 — 13,070 13,070 — (1,415) (1,415)
Investment holding gains 8 — 30,424 30,424 — 6,250 6,250
Income 2 858 — 858 1,844 — 1,844
Investment
management fees 3 (772) (2,612) (3,384) (680) (2,039) (2,719)
Other expenses 4 (587) — (587) (580) — (580)
(Loss)/return on ordinary
activities before taxation (501) 40,882 40,381 584 2,796 3,380
Taxation 5 — — — — — —
(Loss)/return on ordinary
activities after taxation (501) 40,882 40,381 584 2,796 3,380
(Loss)/return per share 7 (0.2)p 19.9p 19.7p 0.3p 1.4p 1.7p
The total columns of this statement are 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 comprehensive income has been presented.
The Company has only one class of business and one reportable segment, the results of which are set out in the
Income Statement and Balance Sheet.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are
relevant. The basic and diluted earnings per share are, therefore, identical.
The notes on pages 74 to 88 form part of these financial statements.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 71
RECONCILIATION OF MOVEMENTS
IN SHAREHOLDERS’ FUNDS
Share Capital
Called-up premium redemption Distributable Capital Revaluation
Year ended share capital account reserve reserve
1
reserve
1
reserve Total
31 December 2021 Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000
As at 1 January 2021 2,060 67,634 994 50,546 (4,513) 35,097 151,818
Share issues in the year
2
11 83 6,714 — — — — 6,797
Expenses in relation
to share issues
3
— (198) — — — — (198)
Repurchase of shares 11 (87) — 87 (6,142) — — (6,142)
Cancellation
of share premium — (39,196) — 39,196 — — —
Realised gains on disposal
of investments 8 — — — — 13,070 — 13,070
Investment holding gains 8 — — — — — 30,424 30,424
Dividends paid 6 — — — (7,508) — — (7,508)
Management fees
charged to capital 3 — — — — (2,612) — (2,612)
Revenue loss for the year — — — (501) — — (501)
As at 31 December 2021 2,056 34,954 1,081 75,591 5,945 65,521 185,148
Share Capital
Called-up premium redemption Distributable Capital Revaluation
Year ended share capital account reserve reserve
1
reserve
1
reserve Total
31 December 2020 Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000
As at 1 January 2020 1,740 78,841 951 23,799 (1,059) 28,847 133,119
Share issues in the year
2
363 25,655 — — — — 26,018
Expenses in relation
to share issues
3
— (1,221) — — — — (1,221)
Repurchase of shares (43) — 43 (2,674) — — (2,674)
Cancellation
of share premium — (35,641) — 35,641 — — —
Realised losses on
disposal of investments — — — — (1,415) — (1,415)
Investment holding gains — — — — — 6,250 6,250
Dividends paid 6 — — — (6,804) — — (6,804)
Management fees
charged to capital 3 — — — — (2,039) — (2,039)
Revenue return for the year — — — 584 — — 584
As at 31 December 2020 2,060 67,634 994 50,546 (4,513) 35,097 151,818
1. Reserve is available for distribution; total distributable reserves at 31 December 2021 total £81,536,000 (2020:£46,033,000).
2. Includes the dividend reinvestment scheme.
3. Expenses in relation to share issues includes trail commission for prior years’ fundraising.
The notes on pages 74 to 88 form part of these financial statements.
72 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
BALANCE SHEET
AT 31 DECEMBER 2021
Registered number: 03421340
As at As at
31 December 31 December
2021 2020
Notes £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 8 167,006 132,739
Current assets
Debtors 9 1,669 239
Cash and cash equivalents 17,521 18,939
19,190 19,178
Creditors
Amounts falling due within one year 10 (751) (99)
Net current assets 18,439 19,079
Amounts falling due greater than one year 10 (297) —
Net assets 185,148 151,818
Capital and reserves
Called-up share capital 11 2,056 2,060
Share premium account 34,954 67,634
Capital redemption reserve 1,081 994
Distributable reserve 75,591 50,546
Capital reserve 5,945 (4, 513)
Revaluation reserve 65,521 35,097
Equity shareholders’ funds 185,148 151,818
Net Asset Value per share 12 90.1p 73.7p
The financial statements were approved by the Board of Directors and authorised for issue on 13 April 2022 and were
signed on its behalf by:
Margaret Littlejohns
Chair
The notes on pages 74 to 88 form part of these financial statements.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 73
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Year ended Year ended
31 December 31 December
2021 2020
Notes £’000 £’000
Cash flow from operating activities
Loan interest received from investments 2 582 478
Dividends received from investments 2 384 1,437
Deposit and similar interest received 2 1 34
Investment management fees paid 3 (3,095) (2,719)
Secretarial fees paid 4 (122) (120)
Other cash payments 4 (462) (4 49)
Net cash outflow from operating activities (2,712) (1,339)
Cash flow from investing activities
Purchase of investments 8 (15,111) (7,68 0)
Net proceeds on sale of investments 8 22,810 296
Net proceeds on deferred consideration — 13
Net cash inflow/(outflow) from investing activities 7,699 (7,37 1)
Cash flow from financing activities
Proceeds of fundraising 5,407 24,203
Expenses of fundraising (164) (637)
Repurchase of own shares (5,496) (2,668)
Equity dividends paid 6 (6,152) (5,573)
Net cash (outflow)/inflow from financing activities (6,405) 15,325
Net (outflow)/inflow of cash in the year (1,418) 6,615
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash and cash equivalents for the year (1,418) 6,615
Net cash and cash equivalents at start of year 18,939 12,324
Net cash and cash equivalents at end of year 17, 521 18,939
Analysis of changes in net debt
At At
1 January 31 December
2021 Cash flow 2021
£’000 £’000 £’000
Cash and cash equivalents 18,939 (1,418) 17, 521
The notes on pages 74 to 88 form part of these financial statements.
74 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1 Accounting policies
A summary of the principal accounting policies, all of
which have been applied consistently throughout the
year, is set out below:
a) Basis of accounting
The financial statements have been prepared under
the Companies Act 2006, and in accordance with
United Kingdom Generally Accepted Accounting
Practice (“UK GAAP”) including FRS 102 “The
Financial Reporting Standard applicable in the
UK and Republic of Ireland” and the Statement
of Recommended Practice (“SORP”): Financial
Statements of Investment Trust Companies and
Venture Capital Trusts issued in November 2014 and
updated in October 2019.
The financial statements have been prepared under
the historical cost convention as modified by the
revaluation of investments.
The Company presents its Income Statement in a
three-column format to give shareholders additional
detail of the performance of the Company split
between items of a revenue or capital nature.
As permitted by FRS 102, paragraph 14.4, investments
are held as part of an investment portfolio, and their
value to the Company is through their marketable
value as part of a portfolio of investments, rather
than as a medium through which the Company carries
out its business. Therefore, the investments are not
considered to be associated undertakings.
Where the Company’s interest in an investment is
greater than 50% of the investee company’s total
equity, specific clauses are included in the investee
company’s articles of association to prevent the
Company from exercising control. Therefore, these
investments are not considered to be subsidiary
undertakings. The Company is exempt from preparing
consolidated accounts under the investment entities
exemption as permitted by FRS 102.
Going concern
The Company’s business activities, together with
the factors likely to affect its future development,
performance and position, are set out in the Strategic
Report. The financial position of the Company, its
cash flows, liquidity position and borrowing facilities
are referred to in the Chair’s Statement, Strategic
Report and Notes to the Accounts. In addition, the
Annual Report and Accounts include the Company’s
objectives, policies and processes for managing its
capital; its financial risk management objectives; details
of its financial instruments and hedging activities; and
its exposures to credit risk and liquidity risk.
The Company has sufficient financial resources together
with investments and income generated therefrom across
a variety of industries and sectors. As a consequence, the
Board believes that the Company is able to manage its
business risks.
Cash flow projections have been reviewed and show
that the Company has sufficient funds to meet both
its contracted expenditure and its discretionary cash
outflows in the form of share buybacks and dividends.
The Company has no loan finance in place and therefore
is not exposed to any gearing covenants, although its
underlying investments may have external loan finance.
The Directors have considered both the impact of
COVID-19 and Brexit during their assessment of
going concern and have reasonable expectation that
the Company has adequate resources to continue in
operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
b) Assets held at fair value through profit or loss
– investments
All investments held by the Company are classified as
“fair value through profit or loss”. The Board values
investments in accordance with the International
Private Equity and Venture Capital (“IPEV”) Valuation
Guidelines, as updated in December 2018 and further
COVID-19 guidance for March 2020. This classification
is followed as the Company’s business is to invest in
financial assets with a view to profiting from their total
return in the form of capital growth and income.
Purchases and sales of unlisted investments are
recognised when the contract for acquisition or sale
becomes unconditional.
Unquoted investments are stated at fair value by the
Board in accordance with the following rules, which
are consistent with the IPEV Valuation Guidelines.
When valuing an unquoted investment at fair value
thefollowing factors will be considered:
(i) Where a value is indicated by a material arms-length
transaction by an independent third party in the
shares of a company, this value will be used.
(ii) In the absence of (i), and depending upon both the
subsequent trading performance and investment
structure of an investee company, the valuation basis
will usually move to either:
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 75
a) an earnings multiple basis. The shares may be valued
by applying a suitable price-earnings ratio to that
company’s historic, current or forecast earnings
before interest, tax, depreciation and amortisation
(the ratio used being based on a comparable sector
but the resulting value being adjusted to reflect
points of difference identified by the Manager
compared to the sector including, inter alia,
illiquidity); or
b) where a company’s underperformance against
plan indicates a diminution in the value of the
investment, a write down against cost is made, as
appropriate. Where the value of an investment has
fallen permanently below cost, the loss is treated
as a permanent write down and as a realised loss,
even though the investment is still held. The Board
assesses the portfolio for such investments and,
after agreement with the Manager, will agree
the values that represent the extent to which a
realised loss should be recognised. This is based
upon an assessment of objective evidence of
that investment’s future prospects, to determine
whether there is potential for the investment to
recover in value.
(iii) Premiums on loan stock investments are accrued at
fair value when the Company receives the right to the
premium and when considered recoverable.
(iv) Where an earnings multiple or cost less impairment
basis is not appropriate and overriding factors apply,
discounted cash flow, a net asset valuation, a price
of a recent or the last funding round, venture capital
method or industry-specific valuation benchmarks
may be applied. An example of an industry-specific
valuation benchmark would be the application of a
multiple to that company’s historic, current or forecast
turnover (the multiple being based on a comparable
sector but with the resulting value being adjusted
to reflect points of difference including, inter alia,
illiquidity). The venture capital method (“VC method”)
of valuation calculates and discounts the present value
of the expected exit proceeds from an investment,
taking account of both time and risk.
(v) In estimating the fair value of the investments held,
the Manager has considered the potential impact
the COVID-19 pandemic may have on the general
economic outlook which may impact the fair value of
the investments and the sectors in which they operate.
The COVID-19 pandemic has had a significant impact
in many sectors across the globe, and at the date of
this report there is a high level of uncertainty about
this impact. The Manager has applied assumptions
based on a best estimate of likely outcome for each
individual investment and applied discounts where it
isconsidered necessary.
c) Income
Dividends receivable on unquoted equity shares are
brought into account when the Company’s rights
to receive payment are established and there is no
reasonable doubt that payment will be received.
Other income such as interest is included on an accruals
basis. Loan interest income is calculated using the effective
interest method and recognised on an accruals basis.
d) Expenses
All expenses (inclusive of VAT) are accounted for on an
accruals basis. Expenses are charged through the revenue
column of the Income Statement, with the exception that
75% of the fees payable to the Manager for management
fees are allocated against the capital column of the
Income Statement. The basis of the allocation of
management fees is expected to reflect the revenue and
capital split of long-term returns in the portfolio.
Performance incentive payments predominantly relate
to the capital performance of the portfolio and are
therefore charged 100% to capital. The performance
incentive arrangements are described in note 13. Various
performance hurdles (as noted in note 13) must be met
before the performance incentive fee is triggered.
Once two of the three hurdles have been met on the
disposal of an investment, the Board will consider the
likelihood of the third hurdle being achieved. A provision
for a performance incentive fee is made when it is
probable the fee will be payable and the amount of the
obligation can be estimated reliably.
Where there is a possible but uncertain future obligation
on the remaining investments, the Board discloses a
contingent liability instead.
Note 15 gives detail on the nature of the contingent
liability, the estimate of its financial effect, an indication
of the uncertainties relating to the amount or timing of
any outflow and the possibility of any reimbursement.
e) Basic financial instruments
Trade and other debtors
Trade and other debtors are recognised initially at
transaction price less attributable transaction costs.
Subsequent to initial recognition they are measured
at amortised cost less any impairment losses. If the
arrangement constitutes a financing transaction, for
example if payment is deferred beyond normal business
terms, then it is measured at the present value of future
payments discounted at a market rate of interest for a
similar debt instrument.
76 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
1 Accounting policies continued
e) Basic financial instruments continued
Trade and other creditors
Trade and other creditors are recognised initially at
transaction price plus attributable transaction costs.
Subsequent to initial recognition they are measured at
amortised cost. If the arrangement constitutes a financing
transaction, for example if payment is deferred beyond
normal business terms, then it is measured at the present
value of future payments discounted at a market rate of
interest for a similar debt instrument.
Investments in preference and ordinary shares
Investments in preference and ordinary shares are
measured initially at transaction price less attributable
transaction costs. Subsequent to initial recognition,
investments that can be measured reliably are measured
at fair value with changes recognised through profit
or loss. Other investments are measured at cost less
impairment in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and
call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Company’s cash
management are included as a component of cash and
cash equivalents for the purpose only of the cash flow
statement.
f) Other financial instruments
Other financial instruments not meeting the definition
of basic financial instruments include non-current
investments and are recognised initially at fair value.
Subsequent to initial recognition, other financial
instruments are measured at fair value with changes
recognised in profit or loss except investments in equity
instruments that are not publicly traded and whose fair
value cannot otherwise be measured reliably shall be
measured at cost less impairment.
g) Taxation
Any tax relief obtained in respect of management fees
allocated to capital is reflected in the capital column of
the Income Statement and a corresponding amount is
charged against the revenue column. The tax relief is the
amount by which corporation tax payable is reduced asa
result of these capital expenses.
h) Deferred taxation
Provision is made for corporation tax at the current
rates on the excess of taxable income over allowable
expenses. A provision is made on all material timing
differences arising from the different treatment of items
for accounting and tax purposes. A deferred tax asset is
recognised only to the extent that there will be taxable
profits in the future against which the asset can be offset.
It is considered too uncertain that this will occur and,
therefore, no deferred tax asset has been recognised.
i) Capital reserves
The capital reserve is made up of two elements:
(i) Realised
The following are accounted for in this reserve:
•
Gains and losses on realisation of investments,
including the reversal of prior year revaluation reserves
•
Permanent diminution in value of investments
•
75% of management fee expense, together with the
related tax effect to this reserve in accordance with
the policies
•
Income and costs for the period (capital items)
(ii) Revaluation reserve (unrealised capital reserve)
Increases and decreases in the valuation of investments
held at the year end are accounted for in this reserve,
except to the extent that the diminution is deemed
permanent.
In accordance with stating all investments at fair value
through profit or loss, all such movements through both
revaluation and realised capital reserves are shown within
the Income Statement for the year.
j) Investment recognition and derecognition
Investments are recognised at the trade date, being
the date that the risks and rewards of ownership are
transferred to the Company. Upon initial recognition,
investments are held at the fair value of the consideration
payable. Transaction costs in respect of acquisitions
made are recognised directly in the Income Statement.
Investments are derecognised when the risks and rewards
of ownership are deemed to have transferred to a third
party. Upon realisation, the gain or loss on disposal is
recognised in the Income Statement.
k) Critical accounting judgement and key sources
of estimation uncertainty
The preparation of the financial statements requires the
Board to make judgements and estimates that affect the
application of policies and reported amounts of assets,
liabilities, income and expenses. In the Board’s opinion,
there was no critical accounting judgement applied.
The Board considers that the only area where the
Manager makes critical estimates and assumptions that
may have a significant effect on the financial statements
relates to the fair valuation of unquoted investments.
Trading results of investee companies may differ from
the estimates made. The underlying assumptions are
reviewed on each valuation date.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 77
The Board considers that the fair value of investments not quoted in an active market involves critical accounting
estimates and assumptions because they are determined by the Manager, using valuation methods and techniques
generally recognised as standard within the industry. Valuations use observable data to the extent practicable.
However, they also rely on significant unobservable inputs about the maintainable earnings; comparable multiples
and discounts. Furthermore, changes in these inputs and assumptions affect the reported fair value of unquoted
investments. The determination of what constitutes “observable” requires significant judgement by the Manager.
The Manager considers observable data to be market data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant
market. Both the Audit Committee and the auditor review the Manager’s valuations in detail. Sensitivity analysis is
performed on the portfolio as a whole and for more detail on this please refer to note 14.
The Board notes that the Manager also makes estimates relating to the performance incentive fee and contingentliability.
2 Income
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Loan stock interest 473 370
Dividends receivable 384 1,437
Deposit and similar interest received 1 34
Other income — 3
858 1,844
3 Investment management fees
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Investment management fees charged to the revenue account 772 680
Investment management fees charged to the capital account
1
2,612 2,039
3,384 2,719
1. Included within investment management fees charged to the capital account is an amount of £297,000 (2020: £nil) relating to
performance incentive fees charged to the capital account.
The Manager advises the Company on investments under an agreement dated 27January 2020. The agreement may
be terminated by not less than one year’s notice in writing.
The Manager receives an annual investment management fee of an amount equal to 2% of the net assets of the
Company. The Manager has agreed to reduce its annual management fee to 1% in respect of any cash within the net
assets of the Company in excess of £20 million.
Management fees are calculated on the most recently announced net assets and paid quarterly in advance.
Supplemental management fees are paid in relation to funds raised during any quarter.
Details of the performance-related incentive fees are given in note 13.
78 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
4 Other expenses
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Accounting and secretarial services (excluding VAT) 122 120
Directors’ remuneration including employer’s National Insurance contributions 127 122
Auditor’s remuneration (excluding VAT)
1
50 47
Other 288 291
587 580
1. The auditor’s remuneration relates to the audit of the financial statements. There were no non-audit fees paid to the Company’s
auditor during the year (2020: £nil).
The Manager is responsible for external costs such as legal and accounting fees incurred on transactions that do not
proceed to completion (“abort expenses”). In line with common practice, the Manager retains the right to charge
arrangement and syndication fees and directors’ or monitoring fees to companies in which the Company invests.
The Manager is the Company Secretary and received annual fees, paid quarterly in advance, for administration
services provided of £122,000 (2020: £120,000). The annual administration fee will be adjusted annually in line with
the UK Retail Prices Index and is subject to a cap of £130,000.
The normal annual running costs of the Company are capped at an amount equal to 2.4% of the net assets of the
Company as at the end of each financial year, with any excess being borne by the Manager.
5 Tax on ordinary activities
Year ended 31 December 2021 Year ended 31 December 2020
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Current tax
Corporation tax — — — — — —
Total current tax — — — — — —
Deferred tax — — — — — —
Total tax — — — — — —
Factors affecting the total tax charge for the year:
The tax assessed for the year is lower (2020: lower) than the standard rate of corporation tax in the UK of 19% (2020: 19%).
The differences are explained below:
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Total return on ordinary activities before taxation 40,381 3,380
Corporation tax at 19% (2020: 19%) 7,672 642
Effect of:
Realised capital (gains)/losses not taxable (2,483) 269
Unrealised capital gains not taxable (5,781) (1,187)
Unutilised management expenses 665 549
Dividend income not taxable (73) (273)
Total tax charge for the year — —
As a qualifying VCT, the Company is exempt from tax on capital gains; therefore, no provision for deferred tax has
been recognised in respect of any capital gains or losses arising on the revaluation or disposal of investments.
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 79
No deferred tax asset has been recognised in the year for surplus management expenses. At present it is not
envisaged that any tax will be recovered on these in the foreseeable future.
A deferred tax asset is recognised only to the extent that there will be taxable profits in the future against which the
asset can be offset. It is considered too uncertain that this will occur and, therefore, no deferred tax asset has been
recognised. There is an unrecognised deferred tax asset of approximately £4,518,000 (2020: £2,773,000).
6 Dividends
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Dividends – paid in the year 7,508 6,804
The dividends paid in the year were split between a cash dividend of £6,152,000 (2020: £5,573,000) and the value of
shares issued under the dividend reinvestment scheme of £1,356,000 (2020: £1,231,000).
The Board is recommending a final dividend for the year ended 31December 2021 of 4.5p (2020: 3.7p).
As at 31December 2021, reserves available for dividend distribution totalled £81,536,000 (2020: £46,033,000)
comprising the capital and distributable reserves.
In accordance with Section 259 of the Income Tax Act 2007, a VCT may not retain more than 15% of its qualifying
income in any one accounting period. The payment of the dividends noted above satisfies this requirement.
7 Return per share
Year ended Year ended
31 December 31 December
2021 2020
£’000 £’000
Total return after taxation 40,381 3,380
Total return per share (note a) 19.7p 1.7p
Revenue (loss)/return from ordinary activities after taxation (501) 584
Revenue (loss)/return per share (note b) (0.2)p 0.3p
Capital return from ordinary activities after taxation 40,882 2,796
Capital return per share (note c) 19.9p 1.4p
Weighted average number of shares in issue in the year 204 ,937,084 199,164,754
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 (loss)/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.
80 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
8 Investments held at fair value through profit or loss
2021 2020
£’000 £’000
Unquoted investments 167,006 132,739
£’000
Book cost as at 1 January 2021 97,316
Investment holding gains 35,423
Valuation at 1 January 2021 132,739
Movements in the year:
Purchases at cost 15,111
Disposal proceeds
1
(22,810)
Realised gains 13,070
Investment holding gains
2
28,896
Valuation at 31 December 2021 167,006
Book cost at 31 December 2021 102,687
Investment holding gains 64,319
Valuation at 31 December 2021 167,006
1. The Company received £22,810,000 (2020: £296,000) from the disposal of investments during the year. The book cost of these
investments when they were purchased was £9,740,000 (2020: £1,724,000). These investments have been revalued over time and
until they were sold any unrealised gains or losses were included in the fair value of the investments.
2. Investment holding gains in the Income Statement include the deferred consideration debtor of £1,528,000 with £141,000 relating
to FFX Group Limited, £1,202,000 relating to Mologic Ltd., £114,000 relating to Ixaris Systems Ltd and £71,000 relating to
Accrosoft Limited.
9 Debtors
2021 2020
£’000 £’000
Accrued interest 114 223
Deferred consideration 1,528 —
Prepayments 27 16
1,669 239
10 Creditors: amounts falling due within one year
2021 2020
£’000 £’000
Trade creditors 5 4
Accruals and other creditors 746 95
751 99
Amounts falling due greater than one year
2021 2020
£’000 £’000
Provision for performance incentive fee (see note 13) 297 —
11 Called-up share capital
2021 2020
£’000 £’000
Allotted, called-up and fully paid:
205,591,087 shares of 1p each (2020: 205,954,017) 2,056 2,060
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 81
Share issues and share buybacks
During the year 6,508,226 shares and 1,786,248 shares were issued pursuant to an offer for subscription and the
dividend reinvestment scheme respectively. Shares were issued at issue prices ranging from 75.9p to 90.9p per share.
These share issues were under the VCT provisions that commenced on 6 April 2006, namely: 30% upfront income tax
relief which can be retained by qualifying investors if the shares are held for the minimum five-year holding period.
As part of the Company’s buyback programme, during the year, 8,657,404 shares were purchased for cancellation at
a cost of £6,142,000.
Shares No.
Share capital at 1 January 2021 205,954,017
Shares allotted 6,508,226
Dividend reinvestment 1,786,248
Share buybacks (8,657,404)
Share capital at 31 December 2021 205,591,087
12 Net Asset Value per share
The Net Asset Value per share is based on net assets at the end of the year and on the number of shares in issue at
that date.
31 December 31 December
2021 2020
Net assets £185,148,000 £151,818,000
No. of shares at year end 205,591,087 205,954,017
Net Asset Value per share 90.1p 73.7p
13 Co-investment and performance incentive arrangements
A co-investment scheme and performance incentive fee arrangement was approved by shareholders and entered
intoby the Company and Foresight Group CI Limited in March 2017.
The rights and obligations of Foresight Group CI Limited in respect of the co-investment scheme and performance
incentive arrangements were novated to the Manager on 27January 2020. As a result, in respect of investments
made before that date, the co-investments to which Foresight Group CI Limited was entitled were transferred to the
Manager on 31March 2020.
Co-investment
In order to align the interests of the Manager and the individual members of the Manager’s private equity team
(“advisory team”) with those of shareholders, the Manager and the advisory team will co-invest, alongside the
Company, for shares and loans in each new investee company at the same time and at the same price paid by the
Company.
In respect of investments made by the Company in new investee companies (including follow-ons) on or after
31March2017, the Manager and the advisory team subscribe, in aggregate, for shares and loans equal to 1.0%
(1.5%forthe period from 31March 2017 to 27January 2020) of the total value being invested by the Company.
Thisallocation is split as to 75% to the advisory team and 25% to the Manager. The co-investment will be in the
lowestpriority of securities that the Company is investing in, subject to not representing more than 3.33% (5% for
theperiod from 31March 2017 to 27January 2020) of the amount the Company is investing in each security class.
The Board believes that these arrangements will align the interests of the advisory team with the Company through
their personal investment in each new investee company in which the Company invests.
Performance incentive
In order to incentivise the Manager to generate enhanced returns for shareholders, the Manager will potentially
be entitled to a performance incentive payment in respect of investments made by the Company in new investee
companies on or after 31 March 2017 (including follow-ons in such investee companies).
The Manager will be entitled to a performance incentive fee in respect of cash proceeds received by the Company in
respect of a realisation of an investment subject to (i) an Investment Growth Hurdle and (ii) a NAV Total Return Hurdle.
82 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
13 Co-investment and performance incentive arrangements continued
Performance incentive continued
The “Investment Growth Hurdle” requires that the cash return received in respect of all investments in the relevant
investee company is greater than the cost of those investments increased annually by 4% plus RPI (on a compound basis).
The “NAV Total Return Hurdle” requires that the NAV Total Return per share must be at least the “Hurdle TR” (i) at
the time of the exit of the relevant investment and (ii) at the end of the three-year period following the relevant exit.
For these purposes:
•
“NAV Total Return per share” means, as at the date of assessment, the NAV per share plus dividends paid per share
since 18 December 2015
•
“Dividends paid per share” means the aggregate of the amount of dividends actually paid, divided by the number
ofshares in issue at the point of assessment, to give a rebased amount of dividends per share
•
“Hurdle TR” means 100p as increased from 1January 2020 to the date of the relevant total return assessment by
thegreater of (i) the percentage increase in RPI and (ii) 3.5% per annum (such increase to be compounded yearly
by the greater of the RPI increase and 3.5% for the relevant year)
As at 31December 2021, the NAV Total Return was 116.7p (being the aggregate of the NAV per share as at
31December2021 of 90.1p and dividends paid per share (rebased) since 18 December 2015 totalling 26.6p).
Thiscompares to the NAV Total Return Hurdle as at 31December 2021 of 110.0p and is the first year this hurdle
hasbeen met.
Should all the above hurdles be met, the Manager will receive a fee equal to 20% of the amount by which the cash
proceeds received by the Company exceed the Investment Growth Hurdle. The Company may issue shares in lieu of
acash payment.
The fee will only be paid after three years following the exit of a relevant investment, when the NAV Total Return can
be measured.
Although no performance incentive fees have been paid during the year (2020: £nil), fees of £297,000 (2020:
£nil) have been provided for as at the year end. This is as a result of the successful sale of Accrosoft Limited in
October2021 when the Investment Growth Hurdle and initial NAV Total Return Hurdle had both been met. Settlement
is expected inOctober 2024 subject to meeting the end NAV Total Return Hurdle at this date. More detail on the
contingentliability relating to the performance incentive fee can be found in note 15.
14 Financial instrument risk management
The Company’s financial instruments comprise:
•
Equity shares, debt securities and fixed interest securities that are held in accordance with the Company’s
investment objective as set out in the Directors’ Report
•
Cash, liquid resources, short-term debtors and creditors that arise directly from the Company’s operations
Classification of financial instruments
The Company held the following categories of financial instruments at fair value as at 31 December 2021:
2021 2020
£’000 £’000
Investment portfolio 167,006 132,739
Cash and cash equivalents 17,521 18,939
Total 184,527 151,678
The investment portfolio consists of unquoted investments. Unquoted investments consist of shares in and loans to
investee companies and are valued at fair value through profit or loss.
The main financial risks arising from the Company’s financial instruments are market price risk, interest rate risk, credit
risk and liquidity risk. The Board regularly reviews and agrees policies for managing each of these risks and they are
summarised below.
Market price risk
Market price risk arises from uncertainty about the future prices of financial instruments held in accordance with the
Company’s investment objectives. It represents the potential loss that the Company might suffer through holding
market positions in the face of adverse market movements. The Board manages market price risk through the
application of venture capital disciplines and investment structuring delegated to the Manager.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 83
The investments in shares and loan stocks of unquoted companies are rarely traded and as such the prices are more
difficult to determine than those of more widely traded securities. In addition, the ability of the Company to realise
the investments at their carrying value will at times not be possible if there are no willing purchasers. The ability of
theCompany to purchase or sell investments is also constrained by the requirements set down for VCTs. The potential
maximum exposure to market price risk, being the value of the investment portfolio as at 31 December of 2021, was
£167,006,000 (2020: £132,739,000). Market price risk sensitivity analysis can be found on pages 84 and 85.
Interest rate risk
The fair value of the Company’s fixed rate securities and the net revenue generated from the Company’s floating rate
securities may be affected by interest rate movements. Investments are often in early stage businesses, which are
relatively high risk investments sensitive to interest rate fluctuations. Due to the short time to maturity of some of the
Company’s fixed rate investments, it may not be possible to reinvest in assets which provide the same rates as those
currently held. When making investments of an equity and debt nature, consideration is given during the structuring
process to the potential implications of interest rate risk and the resulting investment is structured accordingly.
Themaximum exposure to interest rate risk was £42,518,000, being the total value of the loan stock investments
and cash as at 31 December 2021 (2020: £47,798,000). Floating rate investments relate to the interest-bearing
deposit account which earned interest based on the Bank of England rate of 0.25% at 31December 2021. As at
31December2021, if the interest rate increased or decreased by 10 basis pointsthe interest earned would increase
ordecrease by £8,300.
Total Weighted average Weighted average
portfolio interest rate time for which rate is fixed
31 December 31 December 31 December 31 December 31 December 31 December
2021 2020 2021 2020 2021 2020
Company portfolio £’000 £’000 % % Days Days
Loan stock
— exposed to fixed interest rate risk 24,997 28,859 10.4 10.4 424 566
Loan stock
— exposed to variable interest rate risk — — — — — —
Cash 17, 521 18,939 0.1 0.1 — —
Total exposed to interest rate risk 42,518 47,798
Credit risk
Credit risk is the risk of failure by counterparties to deliver securities or cash to which the Company is entitled.
The Company has exposure to credit risk in respect of the loan stock investments it has made into investee companies,
most of which have no security attached to them, and where they do, such security ranks beneath any bank debt that an
investee company may owe. The Board manages credit risk in respect of cash and cash equivalents by ensuring spread
of cash balances such that none exceed 15% of the Company’s total investment assets. These cash and cash equivalents
are investment grade funds, and so credit risk is considered to be low. The Manager receives management accounts from
portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio
companies; this enables the close identification, monitoring and management of investment-specific credit risk.
The maximum exposure to credit risk at 31December 2021 was £44,160,000 (2020: £48,021,000) based on cash and
cash equivalents and other receivables (amounts due on investments, dividends and interest). As at 31December 2021,
the Company’s assets are held in its own name in certificated form and therefore custodian default risk is negligible.
An analysis of the Company’s assets exposed to credit risk is provided in the table below:
2021 2020
£’000 £’000
Loan stock investments 24,997 28,859
Cash and cash equivalents 17,521 18,939
Other debtors 1,642 223
Total 44,160 48,021
84 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
14 Financial instrument risk management continued
Liquidity risk
The investments in shares and fixed interest stocks of unquoted companies that the Company holds are not traded
and they are not readily realisable. The Company may not be able to realise the investments at their carrying value if
there are no willing purchasers. The Company’s ability to sell investments may also be constrained by the requirements
set down for VCTs. The maturity profile of the Company’s loan stock investments disclosed below indicates that these
assets are also not readily realisable until dates up to five years from the year end.
To counter these risks to the Company’s liquidity, the Company maintains sufficient cash and money market funds to
meet running costs and other commitments. The Company typically invests its surplus funds in money market funds
which are all accessible on an immediate basis.
2021 2020
Maturity analysis: £’000 £’000
— in one year or less 33,090 33,284
— in more than one year but no more than two years 3,011 3,562
— in more than two years but no more than three years 2,878 4,303
— in more than three years but no more than four years 2,576 3,863
— in more than four years but no more than five years 963 2,786
Total 42,518 47,798
Sensitivity analysis
Equity price sensitivity
The Board believes the Company’s investments are mainly exposed to equity price risk, as the Company holds 100%
ofits investments in the form of sterling-denominated investments in small companies.
All of the investments made in unquoted companies, irrespective of the instruments the Company holds (whether
shares or loan stock), carry a full equity risk, even though some of the loan stocks may be secured on assets (as they
will be behind any prior ranking bank debt in the investee company).
The Board considers that even the loan stocks are “quasi-equity” in nature, as the value of the loan stocks is
determined by reference to the enterprise value of the investee company. Such value is considered to be sensitive
to changes in quoted share prices, in so far as such changes affect the enterprise value of unquoted companies.
Thetable below shows the impact on profit and net assets if there were to be a 15% (2020: 15%) movement in overall
share prices, which might in part be caused by changes in interest rate levels, but it is not considered practical to
evaluate separately the impact of changes in interest rates upon the value of the Company’s portfolio of investments
in unquoted companies.
The sensitivity analysis below assumes that each of these sub-categories of investments (shares and loan stocks) held
by the Company produces an overall movement of 15%, and that the portfolio of investments held by the Company is
perfectly correlated to this overall movement in share prices. This percentage reflects a number of factors, including
the performance of the underlying investee companies as well as the wider market uncertainties associated with
Brexit, the spread of COVID-19 and Russia’s invasion of Ukraine. However, shareholders should note that this level
of correlation would not be the case in reality. Movements may occur to the value of both quoted and unquoted
companies and result from changes in the market or alternatively as a result of assumptions made when valuing the
portfolio or a combination of the two.
2021 2020
Return and Return and
net assets net assets
If overall share prices fell by 15% (2020: 15%), with all other variables held constant
– decrease (£’000) (25,051) (19,911)
Decrease in Net Asset Value per share (in pence) (12.18)p (9.67)p
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 85
2021 2020
Return and Return and
net assets net assets
If overall share prices increased by 15% (2020: 15%), with all other variables held constant
– increase (£’000) 25,051 19,911
Increase in Net Asset Value per share (in pence) 12.18p 9.67p
The impact of a change of 15% has been selected as this is considered reasonable given the current level of volatility
observed both on a historical basis and market expectations for future movement. The range in equity prices is
considered reasonable given the historic changes that have been observed.
Interest rate sensitivity
Although the Company holds investments in loan stocks that pay interest, the Board does not believe that the value
of these instruments is interest rate sensitive. This is because all of the interest is fixed, so not at risk of interest rate
movements (2020: no interest rate risk).
Fair value hierarchy
The following table shows financial instruments recognised at fair value, analysed between those whose fair value is
based on:
•
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
•
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(asprices) or indirectly (derived from prices) (Level 2)
•
Inputs for the instrument that are not based on observable market data (unobservable inputs) (Level 3)
Level 1 Level 2 Level 3 Total
As at 31 December 2021 £’000 £’000 £’000 £’000
Unquoted investments — — 167,006 167,006
Financial assets — — 167,006 167,006
Level 1 Level 2 Level 3 Total
As at 31 December 2020 £’000 £’000 £’000 £’000
Unquoted investments — — 132,739 132,739
Financial assets — — 132,739 132,739
Transfers
During the year there were no transfers between Levels 1, 2 or 3.
15 Contingent assets and liabilities
In order to incentivise the Manager to generate enhanced returns for shareholders, the Manager will potentially be
entitled to performance incentive payments in respect of investments made in new investee companies on or after
31March 2017 (including follow-ons in such investee companies), as described in note 13.
As at 31December 2021, the NAV Total Return was 116.7p (being the aggregate of the NAV per share as at
31December 2021 of 90.1p and dividends paid per share (rebased) since 18December 2015 totalling 26.6p).
This compares to the NAV Total Return Hurdle as at 31December 2021 of 110.0p and is the first time this hurdle
has been met.
As at 31December 2021, the Investment Growth Hurdle had been met for two realised and 13 unrealised investments
out of the 31 new early stage investments made since the introduction of the performance incentive arrangements.
Estimation of the financial effect
Should all the hurdles detailed in note 13 be met in the future, the Manager will receive a fee equal to 20% of the
amount by which the cash proceeds received by the Company exceed the Investment Growth Hurdle. Based on the
current investments made on or after 31March 2017, the contingent liability, if investments were sold at their current
carrying value, would be £4.9 million (2020: £1.8 million). Excluded from this figure are performance incentive fees of
£297,000 (2020: £nil) that have been provided for as at the year end, as described in note 13.
86 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
15 Contingent assets and liabilities continued
Possibility of reimbursement
The fee will only be paid after three years following the exit of a relevant investment, once the NAV Total Return can
be measured. As the payment is conditional on meeting the hurdles and payment would only occur three years after
the relevant exit, this contingent liability is not provided for in the financial statements.
Although no performance incentive fees have been paid during the year (2020: £nil), fees of £297,000 (2020: £nil)
have been provided for as at the year end. This is as a result of the successful sale of Accrosoft Limited in October
2021 when the Investment Growth Hurdle and initial NAV Total Return Hurdle had both been met. Settlement is
expected inOctober 2024 subject to meeting the end NAV Total Return Hurdle at this date.
16 Management of capital
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern, so that it can provide an adequate return to shareholders by allocating its capital to assets commensurately
with the level of risk.
In accordance with VCT requirements, the Company must have at least 80% of its total investments (as measured
under VCT legislation) in qualifying holdings (these being investments in a relatively high risk asset class of small
UK companies meeting VCT requirements). Effective 6April 2018, where new funds are raised, the Company must
invest 30% of such funds in qualifying holdings within 12 months following the end of the accounting period in
which that capital was subscribed, with the balance being invested within approximately three years of that capital
being subscribed. The Company accordingly has limited scope to manage its capital structure in light of changes
in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon
changing the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares, or sell assets if so required to maintain a level of liquidity to remain a going concern.
Although, as the investment policy implies, the Board may consider borrowing, there are no current plans to do so.
It regards the net assets of the Company as the Company’s capital, as the level of liabilities is small and the management
of them is not directly related to managing the return to shareholders. There has been no change in this approach from
the previous year.
17 Related party transactions
No Director has an interest in any contract to which the Company is a party other than their appointment and payment
as Directors.
18 Transactions with the Manager
Foresight Group CI Limited, which acted as Manager to the Company until 27January 2020, earned fees of
£nil(2020:£192,000). Foresight Group LLP was appointed as Manager on 27January 2020 and earned fees of
£3,087,000 up to 31December 2021 (2020: £2,527,000).
Foresight Group LLP is the Company Secretary (appointed in November 2017) and received accounting and company
secretarial services fees of £122,000 (2020: £120,000) during the year. At 31December 2021, the amount due to
Foresight Group LLP was £nil (2020: £nil).
No amounts have been written off in the year in respect of debts due to or from the Manager.
19 Related undertakings
Under Section 409 of the Companies Act 2006, the Company is required to disclose specified details of all its related
undertakings, including significant holdings which are undertakings where the Company’s holding amounted to 20%
or more of the nominal value of any class of shares as at 31 December 2021. These are listed below. The percentage
holding does not reflect the percentage voting right in the Company as a whole. All holdings are direct.
Please note that where holdings stated are above 50%, this is as a result of (i) holding 50% or more of a particular
share class as opposed to the entire share capital, (ii) holding 50% or more of the share capital but with restricted
rights, or (iii) is a legacy, historic, permitted non-qualifying holding and, therefore, not in breach of VCT rules.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 87
Investee company name
Latest accounts
year end
Profit/(loss)
after tax for year
£’000
Aggregate capital
and reserves
£’000
Class and
percentage of
shares held
200 Degrees Holdings Limited 31/03/2021 N/A
1
1,819 A Ordinary 49.1%
ABL Investments Limited 31/12/2020 (243) (2,011) A Ordinary 65.1%
Aerospace Tooling
Corporation Limited
30/06/2021 1,207 2,353 A Ordinary 42.9%
Aquasium Technology Limited 31/12/2020 157 6,388 Ordinary 33.3%
Biotherapy Services Limited 30/06/2021 N/A
1
(675) A Ordinary 47.9%
Callen-Lenz Associates Limited 28/02/2021 N/A
1
1,593 A Ordinary 49.3%
Cinelabs International Ltd 31/12/2020 N/A
1
889 A Ordinary 97.0%
Clubspark Group Ltd 31/03/2021 N/A
1
3,600 A Ordinary 57.7%
AA Ordinary 60.0%
Cole Henry PE 2 Limited 31/03/2021 (2) 485 Ordinary 50.0%
Crosstown Dough Ltd 31/01/2021 432 1,516 A Ordinary 49.4%
Datapath Group Limited 31/03/2021 2,473 26,111 A Ordinary 33.3%
Fourth Wall Creative Limited 30/09/2020 N/A
1
10,562 A Ordinary 58.1%
Fresh Relevance Ltd 30/09/2020 N/A
1
45 A Ordinary 95.3%
Hexarad Group Limited 30/06/2021 N/A
1
1,943 AA Ordinary 49.9%
AB Ordinary 48.4%
Hospital Services Group Limited 30/09/2020 4,893 3,663 A Ordinary 73.5%
iMIST Group Limited N/A
2
N/A N/A A Ordinary 34.8%
IMMJ Systems Limited 31/03/2021 N/A
1
(3,702) A Ordinary 49.2%
Industrial Efficiency II Limited 31/03/2021 N/A
1
(251) B Ordinary 75.2%
Innovation Consulting Group
Limited
30/09/2021 N/A
1
2,647 A Ordinary 49.2%
Itad (2015) Limited 31/01/2021 (4 41) (1,324) A Ordinary 68.8%
Kingsclere PE 3 Limited 31/03/2021 (2) 389 Ordinary 50.0%
Luminet Networks Limited 31/03/2020 (1,803) (3,489) A Ordinary 76.2%
Mowgli Street Food Group Limited 31/07/2021 (3,022) 5,074 A Ordinary 43.2%
Nano Interactive Group Limited 31/12/2020 N/A
1
(411) A Ordinary 95.2%
A1 Ordinary 28.1%
Newsflare Limited 31/07/2020 N/A
1
(162) B Ordinary 37.7%
NorthWest EHealth Limited 31/12/2020 (256) 3,675 AB Ordinary 49.2%
Ollie Quinn Limited 30/06/2021 N/A
1
3,475 AA Ordinary 98.3%
A Ordinary 98.5%
Online Poundshop Limited 30/04/2020 N/A
1
(1,846) A Ordinary 100.0%
AA Ordinary 100.0%
88 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES TO THE ACCOUNTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2021
Investee company name
Latest accounts
year end
Profit/(loss)
after tax for year
£’000
Aggregate capital
and reserves
£’000
Class and
percentage of
shares held
PH Realisations 2020 Limited
(formerly Procam Television
Holdings Limited)
31/12/2018
(in administration)
(1,522) (3,361) A Ordinary 50.0%
Positive Response Corporation Ltd 31/03/2021 N/A
1
241 A Ordinary 50.0%
Protean Software Limited 31/03/2021 N/A
1
1,657 A Ordinary 62.5%
Rovco Limited 31/12/2020 N/A
1
1,327 A Ordinary 24.0%
Specac International Limited 31/03/2021 597 4,673 A Ordinary 50.0%
Spektrix Limited 31/12/2020 (1,882) 1,179 A Ordinary 69.1%
Steamforged Holdings Limited 31/03/2021 (1,131) (1,035) A Ordinary 46.2%
Ten Health & Fitness Limited 31/12/2020 N/A
1
(234) A Ordinary 57.1%
AA Ordinary 58.3%
TFC Europe Limited 31/03/2021 702 7, 934 A Ordinary 40.0%
Titania Group Limited 30/04/2021 N/A
1
2,520 A Ordinary 48.4%
TLS Management Limited
(formerly Dhalia Limited)
31/12/2020 136 558 A Ordinary 100.0%
Vio Healthtech Limited
(formerly Fertility Focus Limited)
31/12/2020 N/A
1
113 C Ordinary 49.8%
D Ordinary 27.6%
Weduc Holdings Limited N/A
2
N/A N/A A Ordinary 66.7%
AB Ordinary 69.3%
Whitchurch PE 1 Limited 31/03/2021 (2) 663 Ordinary 50.0%
1. In accordance with Section 444 of the Companies Act 2006, a statement of income has not been delivered in the financial
statements available on Companies House.
2. The company is yet to deliver financial statements to Companies House.
20 Post-balance sheet events
The Company announced a £20 million prospectus offer on 26 July 2021 which was subsequently increased by a
further £5 million on 25 March 2022. The Company made the following issues of ordinary shares post year end:
Ordinary NAV to calculate
Date shares issue price
13 January 2022 2,995,780 84.5p
24 March 2022 7,326,933 87.5p
31 March 2022 3,712,995 87.5p
5 April 2022 6,047,882 87.5p
8 April 2022 714,213 87.5p
20,797,803
The offer was closed to new applications on 7 April 2022 and ended on 8 April 2022.
19 Related undertakings continued
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 89
NOTICE OF ANNUAL GENERAL MEETING
31 MAY 2022
Order of events
1.00pm Manager presentation
Immediately following the Manager presentation Formal business of the Annual General Meeting
Notice is hereby given that the Annual General Meeting of Foresight VCT plc (“the Company”) will be held on
31May2022 at 1.00pm at the offices of Foresight Group LLP, The Shard, 32 London Bridge Street, London, SE1 9SG
for the purpose of considering and, if thought fit, passing the following resolutions, of which Resolutions 1 to 10 will be
proposed as ordinary resolutions and Resolutions 11 and 12 will be proposed as special resolutions.
Resolution 1
To receive the Report and Accounts forthe year ended 31December2021.
Resolution 2
To approve the Directors’ Remuneration Report.
Resolution 3
To approve the Directors’ Remuneration Policy.
Resolution 4
To re-elect Gordon Humphries as aDirector.
Resolution 5
To re-elect Jocelin Harris as a Director.
Resolution 6
To re-elect Margaret Littlejohns as aDirector.
Resolution 7
To re-elect Patricia Dimond as aDirector.
Resolution 8
To reappoint Deloitte LLP as auditor and to authorise the Directors to fix the auditor’s remuneration.
Resolution 9
To approve the payment of a final dividend in respect of the financial year ended 31December 2021 of 4.5p per
ordinary share of 1p each in the capital of the Company, payable on 24 June 2022 to shareholders on the register
on9June 2022.
Resolution 10
That, in substitution for all existing authorities, the Directors be and they are generally and unconditionally authorised
in accordance with Section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares
of 1p each in the capital of the Company (“Shares”) and to grant rights to subscribe for, or to convert any security into,
Shares (“Rights”), up to an aggregate nominal amount of £950,000, provided that this authority shall expire (unless
renewed, varied or revoked by the Company in a general meeting) on the fifth anniversary of the date of the passing of
this resolution, save that the Company shall be entitled to make offers or agreements before the expiry of such authority
which would or might require Shares to be allotted or Rights to be granted after such expiry and the Directors shall be
entitled to allot Shares and grant Rights pursuant to any such offers or agreements as if this authority had not expired.
90 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
31 MAY 2022
Resolution 11
That, in substitution for all existing authorities, the Directors be and they are empowered pursuant to Section 570
and Section 573 of the Companies Act 2006 to allot equity securities (within the meaning of Section 560 of that Act)
for cash either pursuant to the authority conferred by Resolution 10 above or by way of a sale of treasury shares as if
Section 561(1) of that Act did not apply to any such allotment, provided that this power shall be limited to:
(a) the allotment of equity securities with an aggregate nominal amount of up to but not exceeding £400,000
pursuant to offer(s) for subscription;
(b) the allotment of equity securities with an aggregate nominal amount of up to but not exceeding an amount equal
to 10% of the issued share capital from time to time pursuant to the dividend reinvestment scheme operated by
the Company at a subscription price per Share which may be less than the Net Asset Value per Share, as may be
prescribed by the scheme terms;
(c) the allotment of equity securities with an aggregate nominal amount of up to but not exceeding £100,000 by way
of an issue of Shares (which may be at a subscription price per Share which is less than the Net Asset Value per
Share) pursuant to performance incentive arrangements with Foresight Group LLP and relevant individuals of the
Foresight Group LLP investment team; and
(d) the allotment (otherwise than pursuant to sub-paragraphs (a) to (c) of this resolution) to any person or persons
of equity securities with an aggregate nominal amount of up to but not exceeding an amount equal to 10% of the
issued share capital from time to time,
in each case where the proceeds may be used in whole or part to purchase shares in the capital of the Company, and shall
expire (unless renewed, varied or revoked by the Company in a general meeting) on the conclusion of the Annual General
Meeting of the Company to be held in the year 2023, or, if earlier, on the date falling 15 months after the passing of this
resolution, save that the Company shall be entitled to make offers or agreements before the expiry of such authority
which would or might require equity securities to be allotted after such expiry and the Directors shall be entitled to allot
equity securities pursuant to any such offers or agreements as if the authority conferred hereby had not expired.
Resolution 12
That, in substitution for all existing authorities, the Company be empowered to make market purchases (within the
meaning of Section 693(4) of the Companies Act 2006) of its own shares on such terms and in such manner as the
Directors shall from time to time determine, provided that:
(i) the aggregate number of Shares to be purchased shall not exceed 33,935,695 or, if lower, such number of Shares
(rounded down to the nearest whole Share) as shall equal 14.99% of the Company’s Shares in issue at the date of
passing this resolution;
(ii) the minimum price which may be paid for a Share is 1p (the nominal value thereof);
(iii) the maximum price which may be paid for a Share is the higher of (1) an amount equal to 105% of the average of
the middle market quotation for a Share taken from the London Stock Exchange daily list for the five business
days immediately preceding the day on which the Shares are purchased, and (2) the amount stipulated by Article
5(6) of the Market Abuse Regulation (EU) 596/2014 (as such Regulation forms part of UK law and as amended);
(iv) the authority conferred by this resolution shall expire (unless renewed, varied or revoked by the Company in a
general meeting) on the conclusion of the Annual General Meeting of the Company to be held in the year 2023 or,
if earlier, on the date falling 15 months after the passing of this resolution; and
(v) the Company may make a contract to purchase Shares under the authority conferred by this resolution prior to
the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority
and may make a purchase of Shares pursuant to such contract.
By order of the Board
Foresight Group LLP
Company Secretary
13 April 2022
The Shard
32 London Bridge Street
London
SE1 9SG
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 91
NOTES
1. No Director has a service contract with the Company. Directors’ appointment letters with the Company will be
available for inspection at the registered office of the Company until the time of the meeting and from 15 minutes
before the meeting at the location of the meeting, as well as at the meeting. Where the Company holds a virtual
meeting the appointment letters will be available for inspection on the Company’s website www.foresightvct.com.
2. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, entitlement to attend and vote at
the meeting and the number of votes which may be cast thereat will be determined by reference to the Register
of Members of the Company at close of business on the day which is two days (excluding non-working days)
before the day of the meeting or adjourned meeting. Changes to the Register of Members after that time shall be
disregarded in determining the rights of any person to attend and vote at the meeting.
3. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak
and vote on his or her behalf. A proxy need not also be a member but must attend the meeting to represent you.
Details of how to appoint the chair of the meeting or another person as your proxy using the form of proxy are
set out in the notes on the form of proxy which is enclosed. If you wish your proxy to speak on your behalf at the
meeting, you will need to appoint your own choice of proxy (not the chair) and give your instructions directly
to them.
4. You may appoint more than one proxy, provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more
than one proxy, (an) additional form(s) of proxy may be obtained by contacting Computershare Investor Services
PLC on 0370 703 6388. Please indicate in the box next to the proxy holder’s name the number of shares in relation
to which they are authorised to act as your proxy. Please also indicate by ticking the box provided if the proxy
instruction is one of multiple instructions being given. All forms must be signed and returned together in the
same envelope.
5. As at 13 April 2022 (being the last business day prior to the publication of this notice), the Company’s issued
share capital was 226,388,890 ordinary shares of 1p each in the capital of the Company, carrying one vote each.
Therefore, the total voting rights in the Company as at 13 April 2022 was 226,388,890.
6. Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006
to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the member by
whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the
meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may,
under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
7. The statement of the rights of members in relation to the appointment of proxies in paragraphs 3 and 4 above does
not apply to Nominated Persons. The rights described in those paragraphs can only be exercised by members of
the Company.
8. Appointment of a proxy will not preclude a member from subsequently attending and voting at the meeting should
he or she subsequently decide to do so. You can only appoint a proxy using the procedures set out in these notes
and the notes to the form of proxy.
9. The Register of Directors’ Interests will be available for inspection at the meeting. Where the Company holds a
virtual meeting the Register of Directors’ Interests will be available for inspection on the Company’s website
www.foresightvct.com.
10. Information regarding the meeting, including the information required by Section 311A of the Companies Act 2006,
is available from www.foresightgroup.eu.
11. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or
against the resolution. If you either select the “Discretionary” option or if no voting indication is given, your proxy
will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she
thinks fit in relation to any other matter which is put before the meeting.
92 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
NOTES CONTINUED
12. A form of proxy and reply paid envelope is enclosed. Tobe valid, it should be lodged with the Company’s registrar,
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or the proxy must be
registered electronically at www.investorcentre.co.uk/eproxy, in each case so as to be received no later than
48hours (excluding non-working days) before the time appointed for holding the meeting or any adjourned
meeting. To vote electronically, you will be asked to provide your Control Number, Shareholder Reference Number
and PIN, which are detailed on your proxy form. This is the only acceptable means by which proxy instructions may
be submitted electronically.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so for the meeting (and any adjournment of the meeting) by following the procedures described in the CREST
Manual (available via www.euroclear.com). CREST personal members or other CREST sponsored members (and those
CREST members who have appointed a voting service provider) should refer to their CREST sponsor or voting service
provider, who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message
(a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s
(“EUI”) specifications and must contain the information required for such instructions, as described in the CREST
Manual. The message (regardless of whether it constitutes the appointment of a proxy or an amendment to the
instruction given to a previously appointed proxy) must, in order to be valid, be transmitted so as to be received by the
issuer’s agent (ID 3RA50) by the latest time(s) for receipt of proxy appointments specified in note 3 above. For this
purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by
the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time any change of instructions to a proxy appointed through CREST should
be communicated to him by other means.
CREST members (and, where applicable, their CREST sponsors or voting service providers) should note that EUI
does not take available special procedures in CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member
or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider takes)
such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time.
In this connection, CREST members (and, where applicable, their CREST sponsors or voting service providers)
are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
13. Under Section 319A of the Companies Act 2006, the Company must answer any question you ask relating to
the business being dealt with at the meeting unless answering the question would interfere unduly with the
preparation for the meeting or involve the disclosure of confidential information or the answer has already been
given on a website in the form of an answer to a question or it is undesirable in the interests of the Company or the
good order of the meeting that the question be answered.
14. Pursuant to Chapter 5 of Part 16 of the Companies Act 2006 (Sections 527 to 531), where requested by a member
or members meeting the qualification criteria, the Company must publish on its website, a statement setting out
any matter that such members propose to raise at the meeting relating to the audit of the Company’s accounts
(including the auditor’s report and the conduct of the audit) that are to be laid before the meeting. Where
the Company is required to publish such a statement on its website it may not require the members making
the request to pay any expenses incurred by the Company in complying with the request, it must forward the
statement to the Company’s auditor no later than the time the statement is made available on the Company’s
website and the statement may be dealt with as part of the business of the meeting.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 93
C SHARES DIVIDEND HISTORY AND
NAV TOTAL RETURN
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 93
The C share class was launched in 1999. To provide an accurate NAV Total Return per share in relation to the original
Cshare class, we have rebased dividends and NAV to account for the merger of the original ordinary share class and
the C share class in January 2007 (conversion ratio of 1) and the subsequent reconstruction of the merged share
class (this being the current share class) to rebase the NAV per share to 100p in March 2011 (conversion ratio of
0.554417986).
Dividend per share
C Shares (converted into Ordinary Shares in January 2007): (rebased)
25 June 2021 2.1p
19 June 2020 1.8p
4 May 2019 2.8p
4 May 2018 2.8p
29 September 2017 2.2p
3 April 2017 2.8p
1 April 2016 3.9p
13 March 2015 3.3p
14 March 2014 5.5p
14 June 2013 2.8p
23 March 2012 4.15p
17 June 2011 2.8p
29 May 2009 1.0p
7 March 2008 5.0p
26 January 2007 2.0p
27 May 2005 0.5p
1 August 2004 0.5p
22 September 2003 0.75p
30 June 2003 0.75p
24 March 2003 0.75p
7 June 2002 1.0p
11 March 2002 2.5p
26 July 2001 2.0p
Total 53 .7p
NAV per C Share rebased
1
50.0p
NAV Total Return per C Share
1
103.7p
1. Based on an original 100.0p invested in the original C share class launched in 1999.
For information on the dividend history and NAV Total Return in relation to the original ordinary share class (which
became the current class of share in January 2007) please refer to the Financial Highlights section on page 9.
94 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
GLOSSARY OF TERMS
VCT
A Venture Capital Trust as defined in the
Income Tax Act 2007.
Net Asset Value
or NAV
The Net Asset Value (“NAV”) is the
amount by which total assets exceed total
liabilities, i.e. the difference between what
the Company owns and what it owes. It is
equal to shareholders’ equity, sometimes
referred to as shareholders’ funds.
Net Asset Value
per share or NAV
per share
Net Asset Value expressed as an amount
per share.
NAV Total Return
since inception
The sum of the published NAV per share
rebased by the conversion ratios as set
out on page 9 of 34.4p (2020: 28.1p)
plus all dividends paid per share since
inception rebased, being 194.7p (2020:
193.3p). This giving a NAV Total Return
of 229.1p (2020: 221.4p).
Movement in
Net Asset Value
Total Return
This is the movement in the NAV per
share at the start of the year to the NAV
per share at the end of the year plus all
dividends paid per share in the year. The
NAV at the start of the year was 73.7p
(2020: 76.5p), dividends paid during the
year were 3.7p (2020: 3.3p) with NAV at
the end of the year being 90.1p (2020:
73.7p); as such, NAV Total Return at the
end of the year was 93.8p (2020: 77.0p).
Therefore the movement in Net Asset
Value Total Return in the year is 27.3%
(2020: 0.7%).
Share Price
Total Return
The sum of the current share price
rebased by the conversion ratios as set
out on page 9 of 29.2p (2020: 22.7p)
plus all dividends paid per share since
inception rebased, being 194.7p (2020:
193.3p). This giving a share price total
return of 223.9p (2020: 216.0p).
Discount
to NAV
A discount to NAV is the percentage by
which the mid-market share price of the
Company of 76.5p (2020: 59.5p) is lower
than the Net Asset Value per share of
90.1p (2020: 73.7p). This giving a discount
to NAV of 15.1% (2020: 19.3%).
Dividends
paid in the
year
The total dividends paid in the year per
share of 3.7p (2020: 3.3p).
Dividend yield
The sum of dividends paid during the
year of 3.7p (2020: 3.3p) expressed as
a percentage of the mid-market share
price at the year-end date of 76.5p (2020:
59.5p). This giving a dividend yield of 4.8%
(2020: 5.5%).
Shares
bought back
in the year
The total number of shares which were
bought back in the year, being 8,657,404
(2020: 4,281,119).
Average
discount on
buybacks
The average of the percentage by which
the buyback price is lower than the Net
Asset Value per share at the point of the
buyback.
Ongoing
charges ratio
The sum of expenditure incurred in
the ordinary course of business, being
£3.6million (2020: £3.2 million),
expressed as a percentage of the Net
Asset Value at the reporting date, being
£185.1 million (2020: £151.8 million).
IRR
The internal rate of return on an
investment.
Qualifying
Company
A company satisfying certain conditions
under the VCT legislation. The conditions
are detailed but include that the company
must be unquoted (companies listed
on AIM can qualify), have a permanent
establishment in the UK, apply the money
raised for the purposes of growth and
development for a qualifying trade within
a certain time period and not be controlled
by another company. There are additional
restrictions relating to the size and stage
of the company to focus investment
into earlier stage businesses, as well
as maximum investment limits (certain
of such restrictions and limits being
more flexible for “knowledge intensive”
companies). VCT funds cannot be used by
a Qualifying Company to acquire shares in
another company or a trade.
Qualifying
investment
An investment which consists of shares or
securities first issued to the VCT (and held
by it ever since) by a Qualifying Company
and satisfying certain conditions under
the VCT legislation.
Manager
Foresight Group LLP. References to “the
Manager” throughout this report refer to
the activities of Foresight Group LLP and,
in relation to activities prior to 27 January
2020 when the investment management
and administration arrangements were
novated from Foresight Group CI Limited
to the Manager, include the activities of
Foresight Group CI Limited when acting
as the Company’s previous manager.
GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021 95
FINANCIAL CONDUCT AUTHORITY
Report a scam
If you are approached by fraudsters
please tell theFCA using the share
fraud reporting form at
www.fca.org.uk/scams, where you
can find out more about investment
scams.
You can also call the FCA Consumer
Helpline on 0800111 6768.
If you have already paid money to
share fraudsters you should contact
Action Fraud on 0300 123 2040.
In association with
5,000 people contact the Financial
Conduct Authority about share
fraud each year, with victims losing
an average of £20,000.
Beware of share fraud
Fraudsters use persuasive and high-pressure tactics to lure investorsinto
scams.
They may offer to sell shares that turn out to be worthless or non-existent,
or to buy shares at an inflated price in return for an upfrontpayment.
While high profits are promised, ifyou buy or sell shares in this way you
will probably lose your money.
How to avoid share fraud
•
Keep in mind that firms authorised by the FCA are unlikely to contact you
out of the blue with an offer to buy or sell shares.
•
Do not get into a conversation, note the name of the person and firm
contacting you and then end thecall.
•
Check the Financial Services Register from www.fca.org.uk to see
if theperson and firm contacting you is authorised by the FCA.
•
Beware of fraudsters claiming to befrom an authorised firm, copying
its website or giving you false contact details.
•
Use the firm’s contact details listed on the Register if you want to call
itback.
•
Call the FCA on 0800 111 6768 if the firm does not have contact details
on the Register or you are told they are out of date.
•
Search the list of unauthorised firms to avoid at www.fca.org.uk/scams.
•
Consider that if you buy or sell shares from an unauthorised firm you will
not have access to the Financial Ombudsman Service orFinancial Services
Compensation Scheme.
•
Think about getting independent financial and professional advice before
you hand over any money.
•
Remember: if it sounds too good tobe true, it probably is!
96 FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
CORPORATE INFORMATION
COMPANY NUMBER
03421340
DIRECTORS
Margaret Littlejohns (Chair)
Patricia Dimond (appointed 1 February 2021)
Jocelin Harris
Gordon Humphries
John Gregory (retired 27 May 2021)
COMPANY SECRETARY
Foresight Group LLP
The Shard
32 London Bridge Street
London
SE1 9SG
MANAGER
Foresight Group LLP
The Shard
32 London Bridge Street
London
SE1 9SG
AUDITOR
Deloitte LLP
20 Castle Terrace
Edinburgh
EH1 2DB
SOLICITORS AND VCT STATUS ADVISERS
Shakespeare Martineau LLP
No. 1 Colmore Square
Birmingham
B4 6AA
and
60 Gracechurch Street
London
EC3V 0HR
REGISTRAR
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
MARKET MAKER
Panmure Gordon & Co
One New Change
London
EC4M 9AF
BANKER
Lloyds Bank plc
25 Gresham Street
London
EC2V 7HN
ADDITIONAL INFORMATION
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Important information
Foresight VCT plc currently conducts its affairs so that
its shares can be recommended by IFAs to ordinary retail
investors in accordance with the FCA’s rules in relation to
non‑mainstream pooled investment products and intends
to continue to do so for the foreseeable future.
The shares are excluded from the FCA’s restrictions
which apply to non‑mainstream pooled investment
products because they are shares in a VCT.
Past performance is not necessarily a guide to future
performance. Stock markets and currency movements
may cause the value of investments and the income
from them to fall as well as rise and investors may not
get back the amount they originally invested. Where
investments are made in unquoted securities and smaller
companies, their potential volatility increases the risk to
the value of, and the income from, the investment.
Trading shares
The Company’s shares are listed on the London Stock
Exchange. Share price information is available on
Foresight Group LLP’s website and can also be obtained
from many financial websites.
The Company’s shares can be bought and sold in the
same way as any other quoted company on the London
Stock Exchange via a stockbroker. The primary market
maker for Foresight VCTplc is Panmure Gordon & Co.
You can contact Panmure Gordon by phone on
0207886 2716 or 0207886 2717
Investment in VCTs should be seen as a long‑term
investment and shareholders selling their shares within
five years of original subscription may lose any tax reliefs
claimed. Investors who are in any doubt about selling their
shares should consult their independent financial adviser.
Please contact the Manager if you or your adviser have
any questions about this process.
Privacy policy
We respect your privacy and are committed to protecting your personal data. If you would like to find out more
about the measures the Manager takes in processing your personal information, please refer to the privacy policy,
which can be found at https://www.foresightgroup.eu/privacy-policy.
Foresight VCT plc
The Shard
32 London Bridge Street
London
SE1 9SG
www.foresightvct.com
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021
FORESIGHT VCT PLC Annual Report and Accounts 31 December 2021