Half-yearly report

FORESIGHT SOLAR VCT PLC Summary * Net asset value per Ordinary Share as at 31 December 2010 was 93.9p compared to 94.5p at launch. * 8,119,318 Ordinary Shares were allotted at £1 per share on 1 November 2010 * Following the period end a further 5,293,672 Ordinary Shares were allotted at £1 per share * The pipeline of opportunities continues to develop well particularly in the sub 50kw school and residential roof-top sectors where contract negotiations are at an advanced stage.   Period ended  Incorporation 31 December 2010 18 June 2010   Ordinary Shares Ordinary Shares Net asset value per ordinary share 93.9p 94.5p Revenue return per ordinary share (2.2)p N/A Total return per ordinary share (2.7)p N/A Chairman's Statement Results I am pleased to be able to report sound progress in the development and structuring of  potential investments which our Fund Manager, Foresight Group, believe represent attractive opportunities for the Company, although no investments have been completed so far.  In addition, the offer for subscription to raise up to £40,000,000 by issues of Ordinary Shares pursuant to the prospectus published by Foresight Solar VCT plc on 31 August 2010 ("the Offer") continues to be attractive to investors with £20,000,000 having been raised as at 23 February 2011. Further details are set out below in the investment manager's report. Dividend Policy The Board plans to pay dividends of 5p per Share each year throughout the life of Foresight Solar VCT plc, except in respect of the first year from the closing date of the Offer when it is intended that no dividend will be paid. Dividends are expected to be paid bi-annually at or close to the end of April and October in each year, commencing in October 2012. The level of dividends is not, however, guaranteed. Share Issues and Share Buy-Backs During the period from incorporation on 18 June 2010 to 31 December 2010, one allotment for 8,119,318 Ordinary Shares at £1 per share was made on 1 November 2010. One further allotment has been made since the period end: 5,293,672 Ordinary Shares at £1 on 13 January 2011. Applications for allotment in the 2010/2011 tax year need to be received as soon as possible and no later than 5 April 2011 and applications for allotment in  the 2011/2012 tax year can be received from 6 April 2011 onwards. The offer is due to close on 30 June 2011 but may, at the Directors' discretion, close earlier if fully subscribed prior to this date. Outlook The Board and Foresight Group, the investment manager, believe that satisfactory progress is being made towards the early investment of funds raised under the Offer.. Critical to the success of the Company is the conversion of these investment prospects into investments and to ensure that the installation of the solar plants, following investment, is completed in sufficient time to secure the most attractive feed-in tariff available for the generation and export of electricity to the national grid. Lord Maples Chairman 28February 2011 For further information please contact: Gary Fraser, Foresight Fund Managers Limited Tel: 01732 471800 Investment Manager's Report Although the solar industry in the UK is still very much in its infancy, Foresight Group has several years of experience in investing solar projects in Europe and believes that it can utilise its existing experience to gain a competitive advantage in the UK marketplace.  The UK residential roof-top market is growing quickly and Foresight Group is seeing a significant number of opportunities in this sub-sector.    We are confident that the Company will  be considered as an appropriate investor for all of these projects and, subject to due diligence, will have deployed a significant proportion of funds raised, before my report in the annual report and accounts for the year ended 30 June 2011. As the UK solar sector develops, a number of more established service organisations are entering the market. This widens the scope of investable opportunities for the Company which is focussing on projects e.g. residential installations, where the contracted counterparties have financial strength and a track record in the solar sector. Foresight Group's pipeline also includes Local Authority roofs and school roofs in the sub 50kw segment. It has been announced that the Feed-in Tariffs associated with larger scale solar projects are to form part of a Government "fast track" review due to take place in summer 2011. Although we do not know if this will result in the Feed- in-Tariff for larger scale projects being reduced prior to the planned reduction post 31 March 2012, this has resulted in a degree of uncertainty with respect to investing in larger scale projects at the current time. Until this uncertainty is resolved, Foresight Group's predominant investment focus will be on smaller scale solar projects. I look forward to reporting further progress in the annual report and accounts. Jamie Richards Chief Executive, Foresight Solar Unaudited Half-Yearly Results and Responsibility Statements Principal Risks and Uncertainties The Board believes that the principal risks faced by the Company remain as: * Economic risk - events such as an economic recession and movement in interest rates could affect smaller companies' performance and valuations. * Loss of approval as a Venture Capital Trust - the Company must comply with Section 274 of the Income Tax Act 2007 which allows it to be exempted from capital gains tax on investment gains. Any breach of these rules may lead to: the Company losing its approval as a VCT; qualifying shareholders who have not held their shares for the designated holding period having to repay the income tax relief they obtained; and future dividends paid by the Company becoming subject to tax. The Company would also lose its exemption from corporation tax on capital gains. * Investment and strategic - inappropriate strategy, poor asset allocation or consistent weak stock selection might lead to under performance and poor returns to shareholders. * Regulatory - the Company is required to comply with the Companies Acts 2006, the rules of the UK Listing Authority and United Kingdom Accounting Standards. Breach of any of these might lead to suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report. Additionally, any regulatory changes to the Feed-In-Tariff regime under which the Company operates could impact the balance of returns produced. * Reputational - inadequate or failed controls might result in breaches of regulations or loss of shareholder trust. * Operational  - failure of the Manager's or Company Secretary's accounting systems or disruption to its business might lead to an inability to provide accurate reporting and monitoring. * Financial - inadequate controls might lead to misappropriation of assets. Inappropriate accounting policies might lead to misreporting or breaches of regulations. Additional financial risks, include interest rate, credit, market price and currency risk.. * Market risk - investment in AIM traded, PLUS traded and unquoted companies by its nature involves a higher degree of risk than investment in companies traded on the main market. In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock. * Liquidity risk - the Company's investments, both unquoted and quoted, may be difficult to realise. Furthermore, the fact that a share is traded on AIM or PLUS Markets does not guarantee its liquidity. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable. The Board seeks to mitigate the internal risks by setting policy, regularly reviewing performance, enforcing contractual obligations and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the Combined Code. Directors' Responsibility Statement: The Disclosure and Transparency Rules ('DTR') of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Report and financial statements. The Directors confirm to the best of their knowledge that: (a) the summarised set of financial statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board; (b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); (c) the summarised set of financial statements give a true and fair view in accordance with UK GAAP of the state of affairs of the Company and of the profit and loss of the Company for that period and comply with UK GAAP and Companies Act 2006; and (d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). Going Concern The Company's business activities, together with the factors likely to affect its future development, performance and position will be set out in the Business Review of the Annual Report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities where appropriate are set out herein. The Company has considerable financial resources together with future investments and anticipated income generated therefrom.. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they are adopting the going concern basis of accounting in preparing the financial statements. The half-yearly Financial Report has not been audited or reviewed by the auditors. On behalf of the Board Lord Maples Chairman 28 February 2011 Unaudited Income Statement for the period from incorporation on 18 June 2010 to 31 December 2010 Period from incorporation on   18 June 2010 to 31 December 2010   (unaudited)                     Revenue Capital Total   £'000 £'000 £'000 Investment management fees  (5)  (14)  (19) Other expenses       (49) -  (49) ------------------------------------------ Loss on ordinary activities before taxation  (54)  (14)  (68) Taxation - - - ------------------------------------------ Loss on ordinary activities after taxation  (54)  (14)  (68) ------------------------------------------ Return per Ordinary Share       (2.2)p (0.5)p  (2.7)p ------------------------------------------ The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information. All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the year. The Company has no recognised gains or losses other than those shown above; therefore, no separate statement of total recognised gains and losses has been presented. Unaudited Balance Sheet as at 31 December 2010 Registered Number: 07289280   As at   31 December 2010   (unaudited)   £'000 Current assets Debtors - amounts receivable within one year 282 Cash 10,756 ----------   11,038 Creditors: Amounts falling due within one year (3,418) ---------- Net current assets 7,620 ---------- Net assets 7,620 ---------- Capital and reserves Called-up share capital 81 Share premium account 7,607 Profit and loss account (68) ---------- Equity shareholders' funds 7,620 ----------   .131 Net asset value per Ordinary Share 93.9p ---------- Unaudited Reconciliation of Movements in Shareholders' Funds for the period from incorporation on 18 June 2010 to 31 December 2010     Called-up share Share premium Profit and loss Total capital account account     £'000 £'000 £'000 £'000 As at 18 June 2010   -   -   -   - Share issues in the period   81 8,038 -   8,119 Expenses in relation to share issues   -   (431) -   (431) Return for the period   -   -   (68) (68) ------------------------------------------------------------ As at 31 December   81 7,607 (68) 7,620 2010 ------------------------------------------------------------ Unaudited Cash Flow Statement for the period from incorporation on 18 June 2010 to 31 December 2010 Period from incorporation on   18 June 2010 to   31 December 2010   (unaudited)   £'000 Cash flow from operating activities Other cash payments (26) ----------------------------- Net cash outflow from operating activities and returns on investment (26) ----------------------------- Taxation - ----------------------------- Net cash outflow before financing and liquid resource management (26) ----------------------------- Financing Proceeds of fund-raisings 11,213 Expenses of fund-raisings (431) -----------------------------   10,782 ----------------------------- Increase in cash 10,756 ----------------------------- Notes to the Unaudited Half-Yearly Financial Report 1. The unaudited half-yearly results have been prepared on the basis of accounting policies that will be set out in the statutory accounts of the Company for the year ending 30 June 2011. Unquoted investments will be valued in accordance with IPEVC guidelines. Quoted investments will be stated at bid prices in accordance with UK Generally Accepted Accounting Practice. 2. These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the period ended 31 December 2010 and has been neither audited nor reviewed. No statutory accounts in respect of any period after 31 December 2010 have been reported on by the Company's auditors or delivered to the Registrar of Companies.                  Copies of the Half-yearly Financial Report are available electronically atwww.foresightgroup.eu. 3. Net asset value per share The net asset value per share is based on net assets at the end of the period and on the number of Ordinary Shares in issue at that date.   Net Assets Number of Shares   £'000 in Issue               31 December 2010           7,620 8,119,318 4. Return per share Period from incorporation on     18 June to     31 December 2010     (unaudited)     £'000               Total return after taxation    (68)               Total return per Ordinary Share (note a)    (2.7)p ------------------------------               Revenue return from ordinary activities after taxation    (54) ------------------------------               Revenue return per Ordinary Share (note b)    (2.2)p               Capital return from ordinary activities after taxation    (14) ------------------------------               Capital return per Ordinary Share (note c)    (0.5)p               Weighted average number of shares in issue in the period   2,485,506 Notes: a) Total return per Ordinary Share is total return after taxation divided by the weighted average number of shares in issue during the period. b) Revenue return per Ordinary Share is revenue return after taxation divided by the weighted average number of shares in issue during the period. c) Capital return per Ordinary Share is capital return after taxation divided by the weighted average number of shares in issue during the period. 5.      Creditors: Amounts falling due within one year     2010     (unaudited)     £'000   Accruals and other creditors 45   Fundraising amounts received still to be allotted 3,373 --------------     3,418 --------------  6.   Related party transactions Foresight Group, as Investment Manager of the Company, is considered to be a related party by virtue of its management contract with the Company. During the period, management fees of £18,567 and net promoter fees of £151,727 were invoiced to the Company by Foresight Group. At 31 December 2010, the amount due by Foresight Group was £260,768. Foresight Fund Managers Limited, as Secretary of the Company and as a subsidiary of Foresight Group, is also considered to be a related party of the Company. During the period, services of a total value of £10,027 excluding VAT were invoiced to the Company by Foresight Fund Managers Limited. At 31 December 2010, the amount due to Foresight Fund Managers was £10,027. No Director has, or during the period had, a contract of service with the Company. No Director was party to, or had an interest in, any contract or arrangement (with the exception of Directors' fees) with the Company at any time during the period under review or as at the date of this report. Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Foresight Solar VCT PLC via Thomson Reuters ONE [HUG#1493106]

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