Final Results
Foresight Technology VCT PLC
08 January 2003
Foresight Technology VCT plc
Preliminary Announcement of results
Objective
The objective of Foresight Technology VCT plc ('Foresight') is to provide
private investors with an attractive return from a portfolio of investments in
fast-growing UK technology-based companies - companies whose products or
services depend to a significant extent on the application of scientific and
technological skills or whose activities embrace a significant technology
component as a major source of competitive advantage.
Venture Capital Trust Status
Foresight has satisfied the conditions for venture capital trust status under
section 842(AA) of the Income and Corporation Taxes Act 1988 and the Directors
intend to conduct the business of the Company so as to continue to comply with
that section.
Performance Summary
30 September 2002 30 September 2001
Ordinary 'C' Ordinary 'C'
Shares Shares Shares Shares
Capital values
Net asset value per share 97.93p 73.74p 96.09p 80.06p
Net assets £12,876,540 £24,475,475 £12,829,926 £26,697,281
-------------- --------------- --------------- ---------------
Revenue and Dividend
(Loss)/return per share (0.22)p 2.04p (0.09p) 2.81p
Interim dividend (net) - 1.00p - 2.00p
Final dividend per share (net) - 0.75p - 2.50p
Total dividend per share (net) - 1.75p - 4.50p
Total dividend per share - 1.94p - 5.00p
(gross)
Performance Statistics
Ordinary 'C'
Shares Shares
Tax year originally launched 1997/1998 1999/2000
Cumulative dividends paid per share (net) plus recoverable tax
credits* 104.63p 6.25p
---------- --------
Net asset value per share as at 30 September 2002 97.93p 73.74p
---------- --------
Net asset value plus cumulative dividends (net) per share as at
30 September 2002 202.56p 79.99p
---------- --------
Total return as a percentage of an original investment (net of
Income tax relief), of 80p per share 153% 0%
------- -----
Total return as a percentage of an original investment (net of
maximum income tax and capital gains tax relief), of 40p per share 406p 100%
------ -------
* Recoverable tax credits were available on dividends paid on the Ordinary
Shares until April 1999. Recoverable tax credits are no longer available
on dividends paid by VCTs.
Chairman's Statement
Results
The technology market has continued to face difficulties over the last 12
months. The economic outlook still remains uncertain and difficult trading
conditions have taken their toll on a number of the companies in both the
Ordinary Shares and 'C' Shares fund portfolios. In certain cases this has
resulted in companies having to reduce costs and revise their development plans
with sales and profitability taking longer than anticipated. Your Board are,
however, encouraged by the performance shown by a number of the companies but
have continued to adopt a prudent valuation policy in all cases.
The results for the year from 1 October 2001 to 30 September 2002 are set out
below. The return (after tax) attributable to the Ordinary Shareholders was
£190,085 (2001: loss of £14,951,636) and the net asset value per Ordinary Share
as at 30 September 2002 was 97.93p (2001: 96.09p). With regard to the holders
of 'C' Shares the attributable loss (after tax) was £1,569,294 (2001: loss of
£3,028,312) and the net asset value per 'C' Share as at 30 September 2002 was
73.74p (2001: 80.06p).
Dividend
The after tax revenue loss (before capital losses) per Ordinary Share was 0.22p
and the after tax revenue return (before capital losses) per 'C' Share was 2.04p
for the year to 30 September 2002.
In relation to 'C' Shares, the Company paid an interim dividend in July of 1.00p
net (2001: 2.00p) per share on the basis of the results for the six months ended
31 March 2002. The Board is recommending a further dividend of 0.75p per 'C'
Share (2001: 2.50p) giving total dividends of 1.75p (2001: 4.50p) for the year
ended 30 September 2002 (2001: nil). The Board does not recommend a dividend on
the Ordinary Shares.
Cancellation of Share Premium
Shareholders and warrantholders approved the cancellation of the share premium
account on 23 September 2002. The sanction of the court to the cancellation was
obtained on 30 October 2002 and the cancellation was registered by the Registrar
of Companies on 7 November 2002. You will recall that the Company revoked
investment company status in March 2000 in order to be able to pay a capital
dividend of £1.00 per Ordinary Share. This means that the Company is obliged to
take into account capital losses in determining its ability to distribute
reserves. A special reserve, the cancelled share premium account, has been
created from the sum set free from the cancellation to which capital losses can
be written off enabling the Company to continue with its policy of distributing
revenue profits. The cancelled share premium account can also be used to fund
the purchase of own shares by the Company.
Change in Accounting Reference Date
Shareholders and warrantholders also approved on 23 September 2002 the change of
the Company's accounting reference date to 31 December. This will mean that in
future our annual accounts will be posted in March. The Company will prepare
accounts for a short accounting period from 1 October 2002 to 31 December 2002.
Share Issues
During the year the Company issued 2,600 Ordinary Shares and 26,400 'C' Shares
pursuant to the 2002 warrant exercise. The next warrant exercise date is 31
January 2003, notices for which were posted to warrantholders on 19 December
2002. Due to the change in the Company's accounting reference date, the
exercise date in 2004 will be 30 April.
Ordinary Shares fund
Advanced Composites Group Limited continued to trade satisfactorily. The
investment has been valued (on a PE basis using an index of comparable companies
after an appropriate discount in accordance with the British Venture Capital
Association guidelines) at £7.4 million compared with a cost of £1.6 million.
Telecom Plus plc continues to be increasingly profitable as it penetrates its
telephone subscriber base with energy services. Actimax plc, Clarity Commerce
Solutions plc and Sapphire Limited also all made progress during the year.
As at 30 September 2002 £6.9 million had been approved for investment or
invested in 9 companies. This represented approximately 92% of the Company's
investments, the balance being invested in fixed interest securities and cash
deposits. The Company's advisers, VCF Partners, are pleased with the overall
performance of the investments within the Ordinary Shares fund.
'C' Shares fund
A number of the investments in the 'C' Shares fund have, in light of the current
market conditions, been revalued at a discount to cost. It should be borne in
mind that many of the companies in which the 'C' Shares fund has invested are at
an earlier stage in their development than the companies in which the more
established Ordinary Shares fund has invested and so it is not surprising that
the performance of the two funds should proceed at different rates. iCore
Limited, Aquasium Technologies Limited and SmartFocus Limited have made good
progress but unfortunately, one company, iDesk Limited, has been put into
administration. The Company also recently increased its holding in Sarantel
Limited by acquiring another investor's holding in the company. VCF Partners
are encouraged at the quality of new investment opportunities shown by the
Company's recent investments in Oxonica Limited and Wire-e Limited.
As at 30 September 2002 £16.8 million had been approved for investment or
invested in 19 companies. This represented approximately 56% of the Company's
investments, the balance also being invested in fixed interest securities and
cash deposits. Several further investments are also being considered at present
by VCF Partners and the Board. Although there have been a number of provisions
made against and reductions in the valuations of a number of investments, the
Company's advisers, VCF Partners, are encouraged by the progress being made by
several of the companies.
Details of investments made from both of the Company's funds during the year are
given in the Advisers' and Managers' Report.
VCT Qualifying Status
I am pleased to report that as at 31 December 2002 the Company has satisfied the
'70% test' under the VCT regulations. This obliges the Company to have at least
70% of its investments in qualifying holdings. As at 31 December 2002 over 71%
of our total investments were represented by qualifying holdings.
Valuation Policy
The investments held by the Company have been valued in accordance with the
Guidelines for the Valuation and Disclosure of Venture Capital Portfolios issued
by the BVCA under which unquoted investments are not normally revalued above
cost for at least 12 months after the date of acquisition. The investments
which are traded on AIM, OFEX or the London Stock Exchange and the fixed
interest securities are carried at market value. The Board and the Advisers, in
any event, always attempt to follow a consistent and prudent valuation policy.
Recent Investments
Since 30 September 2002, the Company made further investments of £354,077 and
£146,711 in Alaric Systems Limited and Sarantel Limited respectively and a
further £1 million in Actimax plc.. In addition, the Company advanced a further
£524,000 to Oxonica Limited which were funds committed at the time of the
initial investment.
I would like to take this opportunity to thank all shareholders and
warrantholders for their continued support and I look forward to welcoming you
at the Annual General Meeting on 4 March 2003.
Peter Dicks
Chairman
8 January 2003
Advisers' and Managers' Report
THE VENTURE CAPITAL FUNDS
VCF Partners advise the Company in respect of investments made within the
Ordinary Shares fund and the 'C' Shares fund. During the year ended 30 September
2002 six new investments and one further investment were made from the 'C'
Shares fund at a cost of £6 million, including amounts committed in Oxonica and
Sarantel. The full investment portfolio of both funds as at 30 September 2002 is
detailed below.
ORDINARY SHARES FUND
Sapphire International Limited
Owns the established 'DataEase' family of computer database software products
and has a worldwide base of several hundred thousand users. The Company now
combines a consulting/professional services organisation with the sale of
DataEase software products. As a result of a significant new order from the
North American market, the company is trading profitably. Foresight holds
1,803,396 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2001:
profit before tax £5,475, net liabilities £256,000.
Dates of Amount invested Valuation % Equity/ Loan Investor % of Ordinary
investment including Voting Stock Director Shares
Loan Stock Rights Portfolio
Jul 98, £1,189,000 Cost 18.6 £439,000 10% Bernard 9.5
Jun 00, Unsecured Fairman
Oct 00
& Jun 01
Actimax plc
Supplies digital telecommunications systems to small and medium sized customers.
The company installs complex computer and telephone combined systems using
components from suppliers such as Ascom, Lucent and Intertel. The company won
the Integrated Dealer of the Year Award 2001 and is trading profitably.
Foresight holds 242,308 shares in the company.
Results from the latest audited accounts for the period ended 31 December 2001:
loss before tax £21,253, net liabilities £524,132.
Dates of Amount invested Valuation % Equity/ Loan Investor % of Ordinary
Investment including Voting Stock Director Shares
Loan Stock Rights Portfolio
Nov 98 £600,000** Cost 42.0* £120,000 10% Bernard 4.8
& Mar 00 Unsecured Fairman
* The Company also hold 6% warrants
** A further investment of £1 million of loan stock was made in December 2002
from the 'C' Shares fund
DSM Geo-Data Limited/Survey & Development Services Limited
Was formed to acquire certain parts of the business of Survey & Development
Services Limited from the Receivers of that Company in August 2002. It is a
specialist geo-spatial data software products and services business, serving the
growing market for digital mapping. Foresight have been issued 235,208
preference shares in the company in respect of their original holding of loan
stock in Survey & Development Services Limited. The Company continues to hold
170,408 shares in Survey and Development Services Limited which has been put
into liquidation and therefore the Board believe it prudent to write down the
investment by 100%.
The Company has not produced audited accounts since incorporation on 12 December
2001.
Date of Amount invested Valuation % Equity/ % of Ordinary
Investment including Voting Shares
Loan Stock Rights Portfolio
Aug 02 £1 £139,535 0.0 1.1
Entraline Limited
Was formed from Creature Laboratories Limited and has a range of entertainment
software products under development. The technology also relates to new
platforms such as toys, mobile phones and digital television. The Board has
decided to reduce the valuation of this
investment because of the company's difficulties with trading and further fund
raising. Entraline Limited was formed following the Administration of Creature
Laboratories Limited in June 2002 and Foresight were issued 11,765 shares in the
new company.
The company has not produced audited accounts since incorporation on 2 May 2002.
Dates of investment Amount invested Valuation % Equity/ % of Ordinary
prior to prior to Voting Shares
administration administration Rights Portfolio
Jan 99 £1,500,000 £10,000 0.5 0.1
& Sep 00
Advanced Composites Group Limited
Is a long established manufacturer of high technology carbon fibre composite
material, with factories in Heanor north of Derby, and Tulsa, USA. Successful
markets include F1 racing cars, sports equipment and aerospace applications.
After three years of profits, the company has been valued on a PE basis, using
an index of comparable companies after applying a 40% discount. This valuation
is in accordance with BVCA guidelines. Foresight holds 3,163,971 shares in the
company.
Results from the latest consolidated audited accounts for the year ended 31
August 2002: profit before tax £2,272,000, net assets £8,720,000.
Dates of Amount invested Valuation % Equity/ Investor % of Ordinary
Investment Voting Director Shares
Rights Portfolio
Mar 99, Oct 99 £1,622,978 £7,449,149 27.5 Peter 59.7
& Jul 00 English
YooMedia plc (formerly e-district.net plc) (AIM listed)
Operates a portal site which provides an increasing number of facilities
including online games, e-mail, personal home pages and chat available from a
number of platforms. The company was floated on the AIM market in March 2000 at
a valuation of £149.7 million. At that time Foresight sold 6,623,030 shares to
raise £12.4 million net of expenses. The company has signed a contract with Sky
to provide BSkyB's wholly owned channel with a comprehensive enhanced TV chat
solution and also provides interactive content via Telewest. Foresight holds
14,245,945 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2001:
loss before tax £3,982,881, net assets £8,804,703.
Date of Amount Valuation % Equity/ Investor % of Ordinary
Investment invested Voting Director Shares
Rights Portfolio
Mar 99 £341,319* £961,602 18.6 Bernard Fairman 7.7
* A further investment of £983 was made in November 2002.
Telecom plus plc (listed on the London Stock Exchange)
Offers low cost telephone and energy services to private subscribers. The
company's penetration of its telephone subscriber base with energy services is
at 10% and increasing. Foresight holds 1,250,000 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2002:
profit before tax £4,035,000, net assets £8,981,000.
Date of Amount invested Valuation % Equity/ % of Ordinary
investment including Voting Shares
Loan Stock Rights Portfolio
Jun 99 £475,000* £1,331,250 2.5 10.7
* Further investments of £680 and £750 were made in December 2002.
Clarity Commerce Solutions plc (AIM listed)
Is part of a group of companies that provide EPOS solutions, CRM products and
services to the UK hospitality and leisure markets including the pub market
place and the restaurant and nightclub sector. Foresight holds 400,000 shares in
the company.
Results from the latest audited accounts for the year ended 31 March 2002: loss
before tax £221,000, net assets £7,367,000.
Date of Amount invested Valuation % Equity/ % of Ordinary
investment Voting Shares
Rights Portfolio
Jul 00 £500,000 £300,000 4.2 2.4
'C' SHARES FUND
Travelstore.com plc
Travelstore sold its business earlier this year to On-line Travel Limited, a
company which provides on-line services for travel arrangements which had
synergies with Travelstore's business. Travelstore currently holds 7.2% of the
shares in On-line Travel Limited for the benefit of its shareholders and is
considering its future options. The Board believes it is prudent to write down
the investment. Foresight holds 4,265,000 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2002: loss
before tax £3,566,381, net assets £2,420,845.
Dates of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Dec 99 & Nov 02 £1,339,000 £47,250 3.5 0.2
KeepAhead Limited
Despatches lifestyle email services (e.g. current affairs, astrology, sport)
which approximately 200,000 registered users receive free of charge. Revenue is
generated from targeted e-mail advertising. The Board believes it is prudent to
write down this investment to reflect the current values of companies relying on
the on-line advertising market. Foresight holds 25,248 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2001: loss
before tax £709,815, net assets £198,756.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Apr 00 £1,000,000 £50,000 15.0 0.2
UK Directory (Holdings) Limited (OFEX Listed)
Operated an internet based directory of business websites, available on-line and
offline via the publication of a nationally distributed magazine available from
WH Smith. Foresight currently holds 2 million shares in the company. On 29
November 2001, UK Directory (Holdings) Limited's shares were suspended from
trading on OFEX. The Company is considering its future options.
Results from the latest audited accounts for the year ended 31 August 2001: loss
before tax £1,917,361, net assets £488,717.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Apr 00 £1,000,000 £35,000 10.0 0.2
themutual.net plc (AIM Listed)
Operates a financial information website and sells targeted advertising by email
aimed at their subscriber base. themutual.net's shares were listed on the AIM
market in June 2000. Interim accounts to 30 October 2002 show a net profit of
£274,000 which has resulted in a big increase in the company's share price. This
increase is not reflected in the valuation shown below. Foresight holds
342,730,249 shares in the company.
Results from the latest audited accounts for the year ended 30 April 2002: loss
before tax £28,239, net liabilities £533,689.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Jun 00 £500,000 £102,819 9.3 0.5
FFastFill plc (AIM Listed)
Is a software company that develops sophisticated trading solutions for futures
and options traders, brokers and risk managers. The management team has been
strengthened in recent months and an improvement in performance is expected.
Foresight holds 914,070 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2002: loss
before tax £8,018,000, net assets £4,842,000.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Jul 00 £500,000 £29,707 2.0 0.1
Sarantel Limited
Owns proprietary antenna technology with applications in mobile phone and other
wireless devices. The company's technology delivers major performance benefits
over traditional antennae. Market interest in Sarantel's first product, the GPS
antenna, has increased and the company now has a healthy pipeline of sales
prospects. The company has launched its innovative antenna for mobile phones and
other wireless devices and in November 2002 won a $12 million order,
demonstrating the potential for this new generation of high performance
antennas.
The Company invested a further £185,185 in March 2002 and £379,634 in August
2002 in the form of a new investment and a purchase of shares and loans held by
another investor. The Company also invested a further £77,587 in September 2002.
Foresight holds 464,167 shares in the company.
Results from the latest audited accounts for the year ended 30 September 2001:
loss before tax £1,751,173, net assets £4,950,312*.
Dates of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Sep 00, Apr 01,
Jun 01, Mar 02 £1,642,405** Cost 37.0 £1,441,573 Matt 7.2
& Aug 02 Secured Taylor
* The net assets figure shown above includes a convertible loan of £5,628,485
treated as converted.
** A further investment of £146,711 was made in November 2002.
Mondas plc (AIM Listed)
Has developed e-Business technologies to allow securities and investment houses
to deploy new front and back office applications to facilitate straight through
processing. Customers benefit from improved content management, document
management, business process software and service solutions. Foresight currently
holds 200,000 shares in the company in addition to the loan stock.
Results from the latest audited accounts for the year ended 30 April 2002: loss
before tax £2,177,858, net assets £1,431,762
Date of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Oct 00 £1,000,000 £909,000 7.7 £900,000 Bernard 4.0
Convertible Fairman
Callserve Communications plc
Is a voice over IP telecoms network and service provider which enables telephone
calls to be made from a PC via the internet to any phone worldwide. The company
has grown substantially over the last year. Foresight holds 222,222 shares in
the company.
Results from the latest audited accounts for the year ended 31 March 2002: loss
before tax £4,885,152, net liabilities £363,814.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Oct 00 £500,000 Cost 1.27 2.2
iDesk plc
Provide telcos, ISPs and other blue chip customers with outsourced technical
help desks, operated from a call centre in London. iDesk also sells its
proprietary and licensed CRM software and provides electronic billing services.
The company experienced a severe and sustained fall in demand for outsourced
call center services. As a result, the company's revenue reduced by 90% through
2001. Despite cost reductions, trading losses exhausted the company's cash
resources and resulted in the appointment of Administrative Receivers in April
2002. Foresight holds 63,291 shares in the company.
In view of the appointment of Administrative Receivers the Board has made a
provision of 100% against the Company's investment.
Results from the latest audited accounts for the year ended 31 December 2000:
loss before tax £7,534,017, net assets of £8,882,659.
Date of Amount invested Valuation % Equity/ % of 'C'
investment Voting Shares
Rights Portfolio
Nov 00 £500,000 Nil 1.47 -
iCore Limited
Is an IT management services company, with services that range from strategic IT
reviews, infrastructure design and management, outsourcing procurement, through
to business process management, interim project management, and establishing
project offices. The company is now trading profitably. Foresight holds 201,176
shares in the company.
Results from the latest audited accounts for the year ended 30 June 2002: profit
before tax £542,252, net assets £564,205.
Dates of Amount Valuation % Equity/ Investor % of 'C'
investment invested Voting Director Shares
Rights Portfolio
Dec 00 £750,000 Cost 16.7 Peter English 3.3
Heritage Image Partnership Limited
Is building an online library of high-resolution images from exclusive access to
the content of heritage institutions, principally museums and libraries, and
sells directly to business customers. The investment has been written down
because the business is trading below expectations. Foresight holds 68,898
shares in the company.
Results from the latest audited accounts for the 11 month period ended 31
December 2001: loss before tax £1,697,469 net assets £956,306.
Dates of Amount Valuation % Equity/ Investor % of 'C'
investment invested Voting Director Shares
Rights Portfolio
Mar 01 £950,000 £475,000 18.7 Matt Taylor 2.1
Monactive Limited
Is a leading provider of Software Asset Management (SAM) tools with over 100
customers. The company's software monitors software usage on PC networks,
providing corporates with data for cost reduction and compliance. Its customers
are able to reduce their software licensing costs whilst demonstrating legal
compliance. Foresight holds 442,544 shares in the company.
Results from the latest audited accounts for the year ended 31 July 2002: loss
before tax £982,394, net liabilities £893,077.
Dates of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Mar 01 £750,000 Cost 17.6 £375,000 Matt Taylor 3.3
ANT Limited
Is a software company that develops embedded browsers to improve users'
interactive communication with digital television sets and other consumer
electronic devices. ANT was set up in 1993 and first licensed its software to
Symbian (one of the leading software platforms for PDAs) in May 1998. As a
result of difficult trading conditions, the company will need to raise further
equity finance in the coming year. The valuation has been adjusted to reflect
that any further fundraising may dilute Foresight's current shareholding.
Foresight holds 19,771 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2000:
loss before tax £848,332, net assets £956,306*.
Date of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Jul 01 £1,000,000 £950,000 5.3 £900,000 Matt Taylor 4.2
* The net asset figure shown above includes a convertible loan of £5,518,202
treated as unconverted.
Blue Curve Research.net Limited
Is a software company that sells its products and services to investment banks
and fund managers to automate the production and distribution of research
material. Analysis is a key customer retention tool for investment banks but is
also a major cost. The company's software cuts costs and is therefore in
demand, particularly when investment bank spending is under pressure. Foresight
hold 367 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2001:
profit before tax £76,930, net assets £107,882.
Date of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Oct 01 £1,000,000 Cost 23.7 £666,667 Peter 4.4
Secured English
Aquasium Technology Limited
Is engaged in the design, manufacture and marketing of bespoke electron beam
welding and vacuum furnace equipment. Its products are used in the processes of
a wide range of manufacturing industries including automotive, electronics,
medical, power generation and aerospace. Foresight holds 86,666 shares in the
company.
The company has not produced audited accounts since incorporation on 26 June
2001.
Date of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Oct 01 £1,000,000 Cost 33.3 £666,667 Donald 4.4
Secured Maclennan
Smart Focus Limited
Provides analytic software to enable accurate targeting and execution of
marketing campaigns. The company is an established solution provider in this
area with 300 customers forming a wide customer base spread across financial
services, retail, marketing services and other consumer-driven sectors. The
company adds value to its customers marketing campaigns by linking with multiple
databases, returning query results in seconds and presenting the results in an
easily understandable graphic way. Foresight holds 398,667 shares in the
company.
Results from the latest audited accounts for the year ended 31 December 2001:
profits before tax £73,726, net assets £127,406.
Date of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Dec 01 £1,000,000 Cost 20.0 £666,667 Matt 4.4
Secured Taylor
Alaric Systems Limited
Specialises in the development, sale, distribution and support of payment
systems software including systems for electronic payments, authorisation and
e-commerce integration. It is also involved in the use of mathematical modeling
techniques for card payments and other fraud detection. Foresight holds 743,802
shares in the company.
Results from the latest audited accounts for the year ended 31 March 2002: loss
before tax £2,120,960, net assets £1,626,614.
Date of Amount Valuation % Equity/ Investor % of 'C'
investment invested Voting Director Shares
Rights Portfolio
Feb 02 £900,000* Cost 9.0 Donald 3.9
Maclennan
* Further investments were made of £181,000 and £173,077 in October and December
2002 respectively.
Oxonica Limited
Design manipulation and engineering of properties of materials at the nano-scale
for application in fuel additives, sunscreen, biotagging and other products. The
company has made good progress since the investment both in terms of product
development and investor interest. The audited accounts information shown below
is pre-investment and not indicative of expected future performance. Foresight
holds 1,395 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2001:
loss before tax £943,764, net assets £18,155.
Date of Amount Valuation % Equity/ Investor % of 'C'
investment invested Voting Director Shares
Rights Portfolio
Jun 02 £475,946* Cost 10.0 Bernard 2.1
Fairman
* A further £524,053 of committed funds was invested in December 2002.
Wire-e Limited
Provides mobile communication services to corporates and SMEs. Founded in 2000,
and having launched the 'Rapide' service in February 2002, Wire-e now has over
170 customers. The service enables users to access phone numbers and similar
information on the move. Users can also send emails, text messages and voice
broadcasts to multiple contacts from a mobile or desktop browser. The audited
accounts information shown below is pre-investment and not indicative of
expected future performance. Foresight holds 3,333,333 shares in the company.
Results from the latest audited accounts for the year ended 30 June 2001: profit
before tax £833,055, net assets £317,369.
Dates of Amount Valuation % Equity/ Loan Investor % of 'C'
investment invested Voting Stock Director Shares
Rights Portfolio
Sep 02 £1,000,000 Cost 18.4 £900,000 Jamie 4.4
Secured Richards
THE FIXED INTEREST FUNDS
The Ordinary Shares fixed interest portfolio and the 'C' Shares fixed interest
portfolio constitute the balance of the net proceeds from the issues of Ordinary
Shares and 'C' Shares. These funds are invested in fixed interest securities and
cash deposits by Cazenove Fund Management Limited.
Non-Statutory Analysis Statements between the Ordinary and 'C' Shares Funds
Statements of Total Return
for the year ended 30 September 2002
Ordinary Shares Fund 'C' Shares fund
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Unrealised and
realised gains/
(losses)
on investments - 380,555 380,555 - (1,863,399) (1,863,399)
Income 84,593 - 84,593 1,343,315 - 1,343,315
Investment
management fees (76,973) (230,920) (307,893) (157,610) (472,829) (630,439)
Other expenses (79,784) - (79,784) (344,684) - (344,684)
------------ ------------ ------------- ------------ ------------ ------------
Return on ordinary
activities before
Taxation (72,164) 149,435 77,271 841,021 (2,336,228) (1,495,207)
Tax on ordinary
Activities 42,326 70,488 112,814 (161,427) 87,340 (74,087)
------------ ------------ -------------- ------------ ------------ ------------
Return
attributable
to equity
shareholders (29,838) 219,923 190,085 679,594 (2,248,888) (1,569,294)
Dividends in
respect of equity
shares - - - (581,796) - (581,796)
------------ --------------- --------------- ------------ -------------- -------------
Transfer to/(from)
Reserves (29,838) 219,923 190,085 97,798 (2,248,888) (2,151,090)
------------ --------------- --------------- ------------ -------------- -------------
Return per share (0.22)p 1.66p 1.44p 2.04p (6.75)p (4.71)p
Balance Sheets
as at 30 September 2002
Ordinary Shares fund 'C' Shares fund
PRIVATE £ £ £ £
Fixed assets
Investments 12,475,843 22,836,328
Current assets
Debtors and prepayments 331,903 667,514
Cash at bank 128,489 1,522,926
------------ -------------
460,392 2,190,440
Creditors: amounts falling due within one (59,695) (551,293)
year
------------ -------------
Net current assets 400,697 1,639,147
------------ --------------
Net assets 12,876,540 24,475,475
------------ --------------
Capital and reserves
Called up share capital 131,484 331,912
Share premium account 5,513,036 25,913,748
Cancelled share premium account 2,075,619 3,482,242
Revaluation reserve 5,049,584 (5,476,461)
Profit and loss account 106,817 224,034
---------------
--------------
Equity shareholders' funds 12,876,540 24,475,475
--------------
--------------
Number of shares in issue 13,148,403 33,191,219
Net asset value per share of 1 pence each: 97.93p 73.74p
Profit and Loss Account
for the year ended 30 September 2002
30 September 2002 30 September 2001
PRIVATE Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
(Losses) on realisation of
investments - (60,068) (60,068) - (116,655) (116,655)
Income 1,427,908 - 1,427,908 1,849,786 - 1,849,786
Investment management fees (234,583) (703,749) (938,332) (291,728) (875,183) (1,166,911)
Other expenses (424,468) - (424,468) (422,937) - (422,937)
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) on ordinary
activities
before taxation 768,857 (763,817) 5,040 1,135,121 (991,838) 143,283
Tax on ordinary activities (119,101) 157,828 38,727 (223,185) 175,038 (48,147)
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) on ordinary
activities
after taxation 649,756 (605,989) 43,767 911,936 (816,800) 95,136
Dividends (581,796) - (581,796) (1,500,926) - (1,500,926)
------------ ------------ ------------ ------------ -------------- --------------
Retained profit/(loss) for
the year
transferred to/(from) 67,960 (605,989) (538,029) (588,990) (816,800) (1,405,790)
reserves
------------ ------------ ------------ ------------ ------------- --------------
Earnings per share:
Ordinary Shares (1,37)p (1.82)p
'C' Shares 0.68p 1.02p
All the items in the above statement derive from continuing operations.
Statement of Total Recognised Gains and Losses
for the year ended 30 September 2002
2002 2001
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Profit/(loss) for the 649,756 (605,989) 43,767 911,936 (816,800) 95,136
year
Unrealised (losses) on
revaluation of - (1,422,976) (1,422,976) - (18,075,084) (18,075,084)
investments
------------ --------------- --------------- ------------ --------------- ---------------
Total recognised gains/
(losses) during the year 649,756 (2,028,965) (1,379,209) 911,936 (18,891,884) (17,979,948)
Return per share:
Ordinary Shares (0.22)p 1.66p 1.44p (0.09)p (112.47)p (112.56)p
'C' Shares 2.04p (6.75)p (4.71)p 2.81p (11.99)p (9.18)p
Note of Historical Cost Profits and Losses
for the year ended 30 September 2002
2002 2001
Total Total
£ £
Profit on ordinary activities before taxation 5,040 143,283
Realisation of revaluation (losses) of previous years (100,370) (69,568)
-------------- --------------
Historical cost (loss)/ profit on ordinary activities before (95,330) 73,715
taxation
-------------- --------------
Historical cost loss for the year after taxation and dividends (638,399) (1,475,358)
-------------- --------------
Balance Sheet
as at 30 September 2002
2002 2001
(Restated)
£ £ £ £
Fixed assets
Investments 35,312,171 32,661,451
Current assets
Debtors and prepayments 772,038 884,169
Cash at bank 1,651,415 7,098,280
------------- -------------
2,423,453 7,982,449
Creditors: amounts falling due within one year (383,609) (1,116,693)
-------------- --------------
Net current assets 2,039,844 6,865,756
-------------- --------------
Net assets 37,352,015 39,527,207
-------------- --------------
Capital and reserves
Called up share capital 463,396 466,992
Share premium account 31,426,784 31,637,375
Cancelled share premium account 5,557,861 6,264,220
Revaluation reserve (426,877) 895,729
Profit and loss account 330,851 262,891
-------------- --------------
Equity shareholders' funds 37,352,015 39,527,207
-------------- --------------
Net asset value per share of 1 pence each:-
Ordinary Shares 97.93p 96.09p
'C' Shares 73.74p 80.06p
CASHFLOW STATEMENT
For the year ended 30 September 2002
PRIVATE 2002 2001 (Restated)
£ £ £ £
Operating activities
Dividends received 75,000 3,750
Deposit and similar interest received 1,380,871 1,822,205
Other cash receipts 66,960 407,768
Investment management fees paid (931,111) (1,074,318)
Other cash payments (472,142) (357,255)
-------------- --------------
Net cash inflow/(outflow) from operating 119,578 802,150
activities
Investing activities
Purchase of fixed income investments (10,982,547) (15,898,538)
Purchase of other investments (6,020,248) (6,686,095)
Sale of fixed income investments 12,858,700 21,030,734
Sale of other investments 10,331 -
-------------- ------------
Net cash outflow from investing (4,133,764) (1,553,899)
activities
Equity dividends
Equity dividends paid (1,166,532) (667,256)
--------------- ----------------
Net cash (outflow)/inflow before (5,180,718) (1,419,005)
financing
Financing
Issue of shares (net of expenses) 29,000 1,378,234
Purchase of own shares (295,147) (285,884)
-------------- --------------
(266,147) 1,092,350
-------------- --------------
Net decrease in cash (5,446,865) (326,655)
-------------- --------------
The Company holds gilts and bonds primarily as investments and not as liquid
resources. Accordingly, movements in the holdings of these investments are
shown within investing activities in the Cashflow Statements rather than within
management of liquid resources.
Notes
1. Earnings and return per share
Total earnings after taxation for the year were £43,767 (2001: £95,136)
comprising a loss on the Ordinary Shares fund after taxation of £181,688
(2001: £241,179) and a profit after taxation on the 'C' Shares fund of
£225,455 (2001: £336,315). The basic earnings per Ordinary Share is on the
net loss from ordinary activities and on 13,287,221 (2001: 13,282,371)
Ordinary Shares, being the weighted average number of Ordinary Shares in
issue during the year. There is no difference between the basic earnings
per share and diluted earnings per share as the Ordinary Warrants are not
considered to be dilutive. The basic earnings per 'C' Share is based on
the net profit from 'C' Shares fund activities and on 33,305,529 (2001:
32,955,624) 'C' Shares, being the weighted average number of 'C' Shares in
issue during the year. There is no difference between the basic earnings
per share and diluted earnings per share as the 'C' Warrants are not
considered to be dilutive.
The revenue return per Ordinary Share is based on the net loss from
Ordinary Share fund activities after taxation of £29,838 (2001: £12,520)
and on 13,287,221 (2001: 13,282,371) Ordinary Shares, being the weighted
average number of Ordinary Shares in issue during the year. The revenue
return per 'C' Ordinary Share is based on the net revenue from 'C' Share
fund activities after taxation of £679,594 (2001: £924,456) and on
33,305,529 (2001: 32,955,624) 'C' Shares, being the weighted average number
of 'C' Shares in issue during the year.
The capital return per Ordinary Share is based on the net realised capital
losses of £151,850 (2001: £240,916), on net unrealized capital gains of
£371,773 (2001: loss of £14,698,200) on the Ordinary Shares fund and on
13,287,221 (2001: 13,282,371) Ordinary Shares. The capital return per 'C'
Share is based on the net realised capital losses of £454,139 (2001:
£645,452), on net unrealised capital losses of £1,794,749 (2001:
£3,307,316) on the 'C' Shares fund and on 33,305,529 (2001: 32,955,624)
'C' Shares.
2. Capital and reserves
Called Cancelled
up share Share Share Profit and
COMPANY share premium premium Revaluation loss
capital account account reserve account Total
£ £ £ £ £ £
At 1 October 2001 466,992 31,637,375 6,264,220 895,729 262,891 39,527,207
Issued share capital 290 28,710 - - - 29,000
Own shares purchased
during the
year (3,886) (239,301) - - - (243,187)
Realisation of previously
unrealised diminution - - (100,370) 100,370 - -
Retained loss for the year - - - - (538,029) (538,029)
Decrease in unrealised
appreciation - - - (1,422,976) - (1,422,976)
Write off to cancelled
share
premium account - current - - (605,989) - 605,989 -
year
---------- ------------- ------------ ---------- ---------- --------------
At 30 September 2002 463,396 31,462,784 5,557,861 (426,877) 330,851 37,352,015
---------- ------------- ------------ ---------- ---------- --------------
A special reserve, the cancelled share premium account, to which existing and
future realised capital losses can be written off, was created by the reduction
of the share premium account by £10 million, sanctioned by the Court on 7 March
2001 and became effective on 14 March 2001.
Subsequent to the year end the Company has obtained the permission of the Court
to cancel the remainder of its share premium account.
ORDINARY SHARES
Cancelled
Called up Share share Profit and
share premium premium Revaluation loss
capital account account reserve account Total
£ £ £ £ £ £
At 1 October 2001 133,524 5,654,467 2,230,289 4,674,991 136,655 12,829,926
Issued share capital 26 2,574 - - - 2,600
Own shares purchased during
the
year (2,066) (144,005) - - - (146,071)
Realisation of previously
unrealised diminution - - (2,820) 2,820 - -
Retained loss for the year - - - - (181,688) (181,688)
Increase in unrealised
appreciation - - - 371,773 - 371,773
Write off to cancelled share
premium account - current - - (151,850) - 151,850 -
year
---------- ------------- -------------- ------------ ------------ --------------
At 30 September 2002 131,484 5,513,036 2,075,619 5,049,584 106,817 12,876,540
---------- ------------- ------------- ------------ ------------ --------------
'C' SHARES
Cancelled
Called up Share share Profit and
share premium premium Revaluation loss
capital account account reserve Account Total
£ £ £ £ £ £
At 1 October 2001 333,468 25,982,908 4,033,931 (3,779,262) 126,236 26,697,281
Issued share capital 264 26,136 - - - 26,400
Own shares purchased during
the year
(1,820) (95,296) - - - (97,116)
Realisation of previously
unrealised diminution - - (97,550) 97,550 - -
Retained loss for the year - - - - (356,341) (356,341)
Decrease in unrealised
diminution - - - (1,794,749) - (1,794,749)
Write off to cancelled share
premium account - current - - (454,139) - 454,139 -
year
---------- ------------- ------------ -------------- ---------- --------------
At 30 September 2002 331,912 25,913,748 3,482,242 (5,476,461) 224,034 24,475,475
---------- ------------- ------------ -------------- ---------- --------------
3. Net asset value per share
Net asset value per Ordinary Share is based on net assets of the Ordinary
Shares fund at the year end, and on 13,148,403 (2001: 13,352,444) Ordinary
Shares, being the number of Ordinary Shares in issue on that date.
Net asset value per 'C' Share is based on net assets of the 'C' Shares fund
at the year end, and on 33,191,219 (2001: 33,346,819) 'C' Shares, being the
number of 'C' shares in issue on that date.
4. The financial information set out in these statements does not constitute
the Company's statutory accounts for the years ended 30 September 2002 or
2001 but is derived from those accounts. Statutory accounts for the year
ended 30 September 2001 have been delivered to the Registrar of Companies
and those for 2002 will be delivered following the Company's Annual General
Meeting. The auditors have reported on those accounts: their reports were
unqualified and did not contain statements under Section 237 (2) or (3) of
the Companies Act 1985.
5. The Annual Report will be circulated by post to all shareholders shortly
and copies will be available thereafter to members of the public from the
Company's registered office at St Philips House, St Philips Place,
Birmingham B3 2PP.
6. The Annual General Meeting will be held at 11.00am on 4 March 2003 at the
offices of Martineau Johnson, 78 Cannon Street, London EC4N 6NQ.
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