Foresight Technology Regulatory News (FTV)

10 Mar 2005 17:11

Foresight Technology VCT PLC10 March 2005 FORESIGHT TECHNOLOGY VCT PLCPRELIMINARY ANNOUNCEMENT OF RESULTS CHAIRMAN'S STATEMENT Introduction I have pleasure in announcing the Annual Results for the year ending 31stDecember 2004. The results are set out below. As I have indicated over the last year, a number of the portfolio companies arebenefiting from improving economic conditions after a sustained period ofdifficult trading. They are increasing their sales and marketing efforts, but atthe same time ensuring they have sufficient resources to manage growing orderbooks and sales. I believe that several investee companies in the portfolio havethe potential to generate further value, providing the outlook is maintained orcontinues to improve. The technology sector, in particular, has been abeneficiary and increased corporate spending on IT services will be an importantcontributory aspect. As a result of these trends, corporate activity has been on the increase with arevival of enthusiasm for new listings. During the period under review andfollowing the year end a number of our unquoted holdings have either been thesubject of Initial Public Offerings (IPOs) to the AIM Market or have been thesubject of preliminary approaches from potential purchasers or merger partners. Results The results for the year from 1st January 2004 to 31st December 2004 are set outbelow. The return (after tax) attributable to the Ordinary Shareholders was aloss of £7,751,552 (2003: profit of £12,711,291) and the net asset value perordinary share as at 31st December 2004 was 76.60p (2003: 186.75p). The return(after tax) attributable to "C" Shareholders was a profit of £9,842,237 (2003:loss of £1,420,232) and the net asset value per "C" Share as at 31st December2004 was 93.41p (2003: 67.18p). The after tax revenue return (before capital gains) per Ordinary Share was(0.15)p (2003: 2.04p) and the after tax revenue return (before capital gains)per "C" Share was 0.81p (2003: 0.96p) for the year ended 31st December 2004. Dividend The Board is recommending a final dividend of 0.50p per "C" Share (2003: 0.50p)for the year ended 31st December 2004 payable to "C" Shareholders on theregister on 18th March 2005. If approved at the Annual General Meeting, thesepayments will be made on 27th May 2005. The Board does not recommend a finaldividend on the Ordinary Shares (2003: £nil) in addition to the special dividendof 52p per share paid to Ordinary Shareholders in July 2004. The Company'sdividend policy is to distribute to shareholders income earned and capital gainsrealised as soon as is practicable. Ordinary Shares Fund Advanced Composites Group Limited, as reported in my interim statement, was soldto UMECO in May 2004 for a total cash consideration of £44.25 million of whichthe Fund received approximately £10 million. This enabled the Company to pay adividend of £7.98 million or 52p per Ordinary Share to shareholders in July. The price of YooMedia plc has performed poorly in the year under review, fallingfrom 49p as at 31st December 2003 to 17p as at 31st December 2004. Thisresulted in a net decrease of approximately £5.8 million in the value of thefund. However, YooMedia acquired Digital Interactive Television Group and theGaming Channel during the year predominately through the issue of 120 millionnew shares as well as undertaking a discounted rights issue at 15p per share toraise up to £25 million for on-going working capital for the enlarged group. Theresult is that the group is now a market leader in the independent interactivedigital TV industry and in a position to satisfy the growing appetite forinteractive applications in TV, radio, mobile and through the internet. BernardFairman left the Board of YooMedia in December 2004. A small holding in Telecom Plus plc was realised during the year atapproximately ten times cost, generating proceeds of £400,000 leaving the fundwith a holding of 651,000 shares with a year end value of £1,448,475. During the year three smaller new investments were made in DCG Datapoint GroupLimited (£175,000), Aigis Limited (£33,000) and Sarantel Limited (£110,000).Sarantel manufactures miniature antennae used in a variety of wirelessapplications. Subsequent to the year end, it undertook an IPO on the AIM marketat a price of 82p per share. At the current price of 108p per share, Sarantel'smarket value is £57 million. "C" Shares Fund The Board is pleased with recent progress made within the "C" Share portfoliowhich is driven by the valuations and prospects of several of the investeecompanies. As noted above, Sarantel listed on the AIM market on 2nd March 2005raising a total of £18 million to fund its ongoing expansion. Its miniatureantennae are used in mobile phones and personal digital assistants offeringlocation based services through navigation satellites. These antennae alsoreduce the amount of energy absorbed by the users of mobile phones. The Companysaw its sales quadruple in the year to 30th September 2004 and expects furthergrowth during the current year. ANT Limited is a leading provider of embedded application software and supportfor the broadband TV, hospitality and consumer electronics markets. ANT softwarehas been extensively deployed by customers throughout the world includingThomson, Pace, Philips, Amino, Sagem and Samsung. ANT is now the preferred settop box browser supplier for Alcatel's Open Media Suite, which is deployed inmore IPTV networks than any other middleware solution. Oxonica Limited engineers the properties of materials at the nano-scale levelfor application in fuel additives, UV protection and other products. Demand hasbeen encouraging for the company's products and Stagecoach has now rolled outthe fuel additive product globally. It is anticipated that a major retail groupwill be incorporating the UV protection product into a sunscreen material in aSpring 2005 facial product range. Foresight Technology invested £510,000 intothe company in a post year end rights issue. Oxonica is considering thepossibility of an IPO later this year. Smartfocus Group PLC listed on the AIM market during October 2004 and at thesame time Foresight Technology took the opportunity to invest a further £667,000into the company. At the year end this holding was valued at an approximate 50%increase on cost. The company provides software to enable accurate targeting andexecution of marketing campaigns. Broadreach Networks Limited continues to make progress in the Wi-Fi market. Itspartners now include Virgin Megastores, Little Chef, Moto, Sainsbury's andTravel Lodge. During the year Foresight Technology invested a further £1 millionin the company to finance its expansion plans. In addition to several follow-on funding rounds in existing investee companies,new investments were made in DCG Datapoint Group Limited (£575,000) and AigisLimited (£109,000). Datapoint provides data storage and back-up solutions tocorporates either remotely or at their premises. Its growing customer listincludes MCI, Channel 4 and National Blood Service. Aigis Limited manufacturesblast absorption materials that can be used in a wide variety of applications,including airlines, military and buildings. Aigis is performing well in itscurrent financial year and demand for its products is increasing. As at 31 December 2004 approximately £24 million had been approved forinvestment or invested in 24 companies by the "C" Share Fund. This representedapproximately 79% of the Fund's investments, the balance was temporarilyinvested in money funds and cash deposits. Foresight Venture Partners continue to receive a steady flow of new investmentopportunities and is reviewing a number of new investments as well asconsidering additional investments in existing portfolio companies. Althoughdifficult to forecast with any accuracy, we are hopeful that as a result of theimproved Stock Market conditions and increased corporate activity there may befurther liquidity opportunities within the portfolio during the year. Details of investments made in the Ordinary and "C" Share funds during theperiod are given below. Valuation Policy The investments held by the Company that are not quoted on AIM, OFEX or theLondon Stock Exchange have been valued in accordance with the ValuationGuidelines issued by the British Venture Capital Association ("BVCA") underwhich unquoted investments are not normally revalued above cost for at least 12months after the date of acquisition and thereafter at "fair value". Quotedinvestments and investments traded on AIM and OFEX are stated at themiddle-market price as at 31st December 2004. The portfolio valuations areprepared by Foresight Venture Partners and are subject to approval by the Board. Share Offers and Dividend Investment Scheme During the year, the Company issued 717,262 Ordinary Shares and 2,151,766 "C"Shares under two offers for subscription. These offers raised approximately£1,167,000 for the Ordinary Shares fund and £1,456,000 for the "C" Shares fund. Under the dividend investment scheme 836,222 Ordinary Shares and 13,578 "C"Shares were issued raising approximately £708,000 in aggregate. Warrant Exercise The final warrant exercise opportunity on 22nd May 2004 resulted in 1,231,724Ordinary Shares and 139,400 "C" Shares being issued to shareholders, both at100p per share. After this date, the remaining options lapsed. International Financial Reporting Standards ("IFRS") The Board notes that the IFRS may have an impact on the Company's financialreporting requirements. These elements will be monitored and assessed withregard to their likely impact. Shareholder Questionnaire As shareholders will be aware, a questionnaire was sent out to all shareholderson 7 December 2004. This questionnaire resulted in a good response with some 23%of the combined shareholder base of Ordinary and "C" Shares Funds replying.Overall, shareholder feedback was positive and we are grateful for yourresponses. As many of you will know, our manager, Foresight Venture Partners nowhas a dedicated person in place to address shareholders' questions and concernsand we welcome all comments and suggestions which you may have. Annual General Meeting The Company's Annual General Meeting will take place on 4 May 2005. I lookforward to welcoming you at the meeting which will be held in London this yearin response to Shareholders' comments. I would also like to take thisopportunity to thank all shareholders for their continued support. Peter Dicks Chairman 10 March 2005 THE VENTURE CAPITAL FUNDS Foresight Venture Partners advise the Company in respect of investments madewithin the Ordinary Shares fund and the "C" Shares fund. During the year ended31 December 2004 one follow on investment was made from the Ordinary Shares fundat a cost of £100,000 and three new investments were made at a cost of £317,837.In addition eight further follow-on investments were made from the "C" Sharesfund at a cost of £3,346,685 and two new investments were made at a cost of£684,470. In accordance with the BVCA guidelines, all investments are held at 'fair value' unless this cannot be reliably measured, in such cases anexplanation has been given in the individual company narratives. No discountshave been applied to the quoted investments, in line with generally acceptedpractice in the venture capital market. The full investment portfolio of bothfunds as at 31 December 2004 is detailed below. ORDINARY SHARES FUND Actimax plc Supplies digital telecommunications systems to small and medium sized customers.The company installs complex computer and telephone combined systems usingcomponents from suppliers such as Ascom, Alcatel, Cisco and Intertel. Thecompany won the Best Small Business, Essex Business Awards 2004 and is tradingprofitably. The Ordinary Shares fund holds 300,868 shares in the company and34,615 warrants. Results from the latest audited accounts for the period ended 31 December 2003:sales £2,627,721, profit before tax £155,611, retained profit £155,611, netliabilities £61,650. Dates of Amount Invested Valuation Valuation % Equity/ Investor % of OrdinaryInvestment (including Loan Director Shares Portfolio Stock) as at 31 as at 31 December Voting Rights December 2003 2004Nov 98, Mar 00 £480,001* £937,412 £817,412 42.2* Peter English 6.80& Jun 03 * Foresight also holds warrants in the company. Aigis Limited Produces materials that provide explosive blast protection. Applications includecontainers that can be used at airports for homeland security purposes, militaryvehicles and buildings. The company is already selling its productsinternationally. The Ordinary Shares fund holds 9,122 shares in the company. Results from the latest accounts for the year ended 30 September 2004: sales£680,759, loss before tax £20,293, retained loss £6,549, net liabilities£364,247. Date of Amount Invested Valuation Valuation % Equity/Voting Investor % of OrdinaryInvestment Rights Director Shares Portfolio as at 31 as at 31 December 2003 December 2004 Jul 04 £32,837 N/A £32,837 1.8 Jamie Richards 0.27 Clarity Commerce Solutions plc (AIM listed) Is part of a group of companies that provide EPOS solutions, CRM products andservices to the UK hospitality and leisure sectors. Recent customers includeBurberry and Yo! Sushi. A further acquisition was made in the final quarter of2004 which extends the company's product set and customer base. The OrdinaryShares fund holds 400,000 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£13,325,000, profit before tax £511,000, retained profit £380,000, net assets£9,021,000. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Rights Shares Portfolio as at 31 December as at 31 December 2003 2004 (Mid-market) (Mid-market) Jul 00 £500,000 £282,000 £270,000 2.5 2.25 DCG Datapoint Group Limited Provider of data storage and back-up solutions to coporates either remotely orat customers' premises. The demand for Datapoint's services is driven by greatercompliance requirements for retention and retrieval of data and the ever growingvolume of electronic data produced by organisations. Datapoint's growingcustomer list includes MCI, Channel 4 and National Blood Service. The OrdinaryShares fund holds 6,388 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,572,694, loss before tax £394,807, retained loss £394,807, net liabilities£222,355. Date of Amount Valuation Valuation % Equity/ Loans Investor % of OrdinaryInvestment Invested Director Shares (including as at 31 as at 31 Voting Rights Portfolio Loans) December 2003 December 2004 Mar 04 £175,000 N/A £175,000 4.4 £116,725 Jamie Richards 1.46 (Secured) Sarantel Limited Sarantel Limited listed on the AIM market on 2 March 2005 raising an additional£18 million to fund the ongoing expansion of the business. Sarantel's miniatureantennae (which reduce the energy reaching the heads of users by approximately90%) are used in mobile phones and personal digital assistants offering locationbased services through navigation satellites. Its sales quadrupled in the yearto 30 September 2004 and further growth is anticipated in 2005. The OrdinaryShares fund holds 220,000 shares in the company. Results from the latest audited accounts for the year ended 30 September 2003:sales £204,836, loss before tax £2,930,606, retained loss £2,655,634, net assets£5,023,395. Date of Amount Invested Valuation Valuation % Equity/ Investor % of "C" SharesInvestment Director Portfolio as at 31 as at 31 Voting Rights December 2003 December 2004 Sep 04 £110,000 N/A £180,400 0.9 Matt Taylor 1.5 Telecom plus plc (listed on the London Stock Exchange) Offers low cost telephone and energy services to private subscribers. Interimresults announced in December 2004 show an increase of 31% in profit before taxand turnover up 15%. Telecom Plus claims to be the UK's cheapest gas andelectricity supplier. The Ordinary Shares fund holds 651,000 shares in thecompany following the partial realisation during the year. Results from the latest audited accounts for the year ended 31 March 2004: sales£81,828,000, profit before tax £10,632,000, retained profit £1,295,000, netassets £13,014,000. Dates of Amount Invested Valuation Valuation % Equity/Voting % of OrdinaryInvestment Rights Shares Portfolio as at 31 December as at 31 December 2003 2004 (Mid-market) (Mid-market) Jun 99 & Dec 02 £248,367 £2,985,225 £1,448,475 1.1 12.05 YooMedia plc (AIM listed) Operates a portal site which provides an increasing number of facilitiesincluding online games, e-mail, personal home pages and chat available from anumber of platforms. The company now operates interactive games channels on Skyand Freeview and also distributes games on Telewest and NTL. In addition thecompany provides various other interactive TV solutions such as e-voting.Foresight made a further investment of £100,000 in April 2004, following whichthe Ordinary Shares fund now holds 18,810,000 shares in the company. Results from the latest audited accounts for the year ended 31 December 2003:sales £743,150, loss before tax £4,849,307, retained loss £4,621,862, net assets£1,914,585. Dates of Amount Invested Valuation Valuation % Equity/Voting % of OrdinaryInvestment Rights Shares Portfolio as at 31 December as at 31 December 2003 2004 (Mid-market) (Mid-market) Mar 99, £917,357 £9,020,900 £3,197,700 4.1 26.61Nov 02, May 03,Oct 03 & Apr 04 "C" SHARES FUND Actimax plc Supplies digital telecommunications systems to small and medium sized customers.The company installs complex computer and telephone combined systems usingcomponents from suppliers such as Ascom, Alcatel, Cisco and Intertel. Thecompany won the Best Small Business, Essex Business Awards 2004 and is tradingprofitably. The "C" Shares fund holds 79,440 shares in the company. Results from the latest audited accounts for the period ended 31 December 2003:sales £2,627,721, profit before tax £155,611, retained profit £155,611, netliabilities £61,650. Date of Amount Valuation Valuation % Equity/ Loans Investor % of "C"Investment Invested Director Shares (including as at 31 as at 31 Voting Rights Portfolio Loans) December 2003 December 2004 Jun 03 £203,193 Cost £200,000 10.0 £133,333 Peter English 0.58 (Secured) Aigis Limited Produces materials that provide explosive blast protection. Applications includecontainers that can be used at airports for homeland security purposes, militaryvehicles and buildings. The company is already selling its productsinternationally. The "C" Shares fund holds 30,410 shares in the company. Results from the latest accounts for the year ended 30 September 2004: sales£680,759, loss before tax £20,293, retained loss £6,549, net liabilities£364,247. Date of Amount Invested Valuation Valuation % Equity/Voting Investor % of OrdinaryInvestment Rights Director Shares Portfolio as at 31 as at 31 December 2003 December 2004 Jul 04 £109,470 N/A £109,470 5.5 Jamie Richards 0.32 Alaric Systems Limited Specialises in the development, sale, distribution and support of paymentsystems software including systems for electronic payments, authorisation ande-commerce integration. It is also involved in the use of software basedmathematical modelling techniques for card payments and fraud detection. The "C"Shares fund holds 2,141,075 shares in the company. Existing investors have approved a further investment of up to £500,000 in thecompany in the form of secured loans; Foresight's share of this is £114,923, ofwhich £45,969 was advanced to the company on 23 June 2004 and £22,985 on 29September 2004. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,173,999, loss before tax £844,005, retained loss £512,418, net assets£198,371. Dates of Amount Valuation Valuation % Equity/ Loans Investor % of "C"Investment Invested Director Shares (including as at 31 as at 31 Voting Rights Portfolio Loans) December 2003 December 2004 Feb 02, Oct £1,323,133 £1,254,179 £1,323,133 16.8 £68,954 Donald 3.8502, Dec 02, MaclennanJun 04 & Sept 04 ANT Limited Provides content rendering software to improve users' interactive communicationwith digital television sets and other consumer electronic devices. ANT was setup in 1993 and first licensed its software to Symbian (one of the leadingsoftware platforms for PDAs) in May 1998. It now has a leading position in themarket for integrated digital TVs, TV over internet protocol and enhanced DVDs.Trading in 2003 improved significantly and the company was profitable in thelast quarter of the year. The "C" Shares fund holds 7,782,976 shares in thecompany. Results from the latest audited accounts for the year ended 31 December 2003:sales £1,719,113, loss before tax £1,020,470, retained loss £1,020,470, netliabilities £6,216,456. Dates of Amount Invested Valuation Valuation % Equity/ Investor % of OrdinaryInvestment Director Shares Portfolio as at 31 as at 31 Voting Rights December 2003 December 2004 Jul 01, Feb 03 & £1,097,200 £491,590 £1,945,744 12.3 Matt Taylor 5.66Mar 04 Aquasium Technology Limited Is engaged in the design, manufacture and marketing of bespoke electron beamwelding and vacuum furnace equipment. Its products are used in the processes ofa wide range of manufacturing industries including automotive, electronics,medical, power generation and aerospace. The "C" Shares fund holds 86,666 sharesin the company. Results from the latest audited accounts for the year ended 31 December 2003:sales £4,512,621, loss before tax £522,627, retained loss ££510,023, netliabilities £1,085,006. Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December Voting Rights Portfolio Loans) 2004 Oct 01 & £1,200,000 £1,100,000 £1,200,000 33.3 £866,667 Donald 3.49April 03 (Secured) Maclennan Blue Curve Research.net Limited Is a software company that sells products and services to investment banks andfund managers which automate the production and distribution of researchmaterial. Analytical research and services are a key customer retention tool forinvestment banks but are also a major cost. The company's software productsimprove the efficiency of research distribution while at the same time reducingcost. The "C" Shares fund holds 367 shares in the company. Results from the latest audited accounts for the year ended 31 December 2003:sales £687,428, loss before tax £447,829, retained loss £433,697, netliabilities £844,255. Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Oct 01 £1,000,000 £793,334 £793,334 23.7 £666,667 Peter English 2.31 (Secured) Broadreach Networks Limited Provides both fixed line and Wi-Fi hotspot public internet access. Users gainaccess from fixed terminals installed at coffee shops, hotels and transport hubsor by utilising their own portable device. Location partners include VirginMegastores, Little Chef, Moto, Sainsbury's and Travelodge. Investors includeVirgin, Intel and BT. The "C" Shares fund holds 4,854,006 shares in the company. Results from the latest audited accounts for the year ended 31 October 2003:sales £323,418, loss before tax £1,131,860, retained loss £1,131,860, netliabilities £1,085,896. Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Feb 03 & £1,857,000 £1,000,000 £1,857,000 22.9 £1,585,600 Jamie 5.40Oct 03 (Secured) Richards Broadreach Train Services Limited ("BTSL") Set up to exploit the on-train Wi-FI opportunity that originated from BroadreachNetworks Limited. Working closely with Virgin Trains, BTSL is aiming to secure asubstantial share of the on-train Wi-Fi market. Users will benefit frombroadband internet connections throughout their journeys. No accounts produced since trading commenced on 16 June 2004. Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December Voting Rights Portfolio Loans) 2004 Jun 04 £143,000 N/A £143,000 0.0 £143,000 Jamie 0.42 (Secured) RichardsCallserve Communications plc Is a voice over IP telecoms network and service provider which enables telephonecalls to be made from a PC via the internet to any phone worldwide. The companysells phonecards to consumers in many jurisdictions, particularly the MiddleEast. It continues to grow the geographic spread of its business which helps tocombat tactical pricing decisions by local competitors. The "C" Shares fundholds 222,222 shares in the company. Results from the latest audited accounts for the year ended 31 March 2003: sales£9,293,066, loss before tax £3,960,176, retained loss £3,960,176, netliabilities £4,323,990. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Rights Portfolio as at 31 December as at 31 December 2003 2004 Oct 00 £502,893 £224,999 £224,999 1.27 0.65 Camwood Limited Provides an 'Enterprise Platform Manager' solution which allows its customers toassess the effects of the introduction of new operating systems and updates suchas the service Pack 2 update to Microsoft Windows XP. It also providesmonitoring checks to allow customers to ensure compliance with Microsoft bestpractices. Sales are made directly and through channel partners to the corporatesector. The "C" Shares fund holds 2,214,800 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,621,946, loss before tax £830,007, retained loss £631,665, net liabilities£218,531. Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Sep 03 £500,000 £500,000 £500,000 11.9 £333,333 Donald 1.45 (Secured) Maclennan DCG Datapoint Group Limited Provider of data storage and back-up solutions to coporates either remotely orat customers' premises. The demand for Datapoint's services is driven by greatercompliance requirements for retention and retrieval of data and the ever growingvolume of electronic data produced by organisations. Datapoint's growingcustomer list includes MCI, Channel 4 and National Blood Service. The "C" Sharesfund holds 20,987 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,572,694, loss before tax £394,807, retained loss £394,807, net liabilities£222,355. Date of Amount Valuation Valuation % Equity/ Loans Investor % of OrdinaryInvestment Invested Director Shares (including as at 31 as at 31 Voting Rights Portfolio Loans) December 2003 December 2004 Mar 04 £575,000 N/A £575,000 14.4 £383,525 Jamie Richards 1.67 (Secured) FfastFill plc (AIM Listed) Is a software company that develops sophisticated trading solutions for futuresand options traders, brokers and risk managers. The acquisition of FutureDynamics in 2004 has resulted in a combined customer base of 30 customers andhas added a back office capability to the company's software. An importantcontract with Reuters was also won during the period. The "C" Shares fund holds6,485,498 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,651,000, loss before tax £2,547,000, retained loss £2,546,000, net assets£231,000. "C"Dates of Amount Invested Valuation Valuation % Equity/Voting % of "C" SharesInvestment Rights Portfolio as at 31 December as at 31 December 2003 2004 (Mid-market) (Mid-market) Jul 00, Jan 04 & £856,339 £52,559 £421,558 3.3 1.22Apr 04 iCore Limited Is an IT management services company, with services that range from strategic ITreviews, infrastructure design and management, outsourcing procurement, throughto business process management, interim project management and establishingproject offices. Although the company is trading profitably, the Board believesit is prudent to make a further small provision against the cost of thisinvestment to reflect lower turnover than that anticipated at the time of theinitial investment. The "C" Shares fund holds 201,176 shares in the company. Results from the latest audited accounts for the year ended 30 June 2003: sales£3,355,901, profit before tax £3,735, retained profit £237, net assets£564,442.f "C"Date of Amount Invested Valuation Valuation % Equity/Voting Investor % of "C" SharesInvestment Rights Director Portfolio as at 31 as at 31 December 2003 December 2004 Dec 00 £750,000 £544,000 £500,000 16.8 Peter English 1.45 Monactive Limited Is a leading provider of software licence information management solutions withover 100 customers. The company's software monitors software usage on PCnetworks, providing corporates with data for cost reduction and compliance. Itscustomers are able to reduce software licensing costs whilst demonstratinglegal compliance. The "C" Shares fund holds 474,057 shares in the company. After a difficult period, the company has achieved renewed growth in sales and areturn to profitability at the operating level. Results from the latest audited accounts for the year ended 31 July 2003: sales£865,776, loss before tax £792,351, retained loss £741,971, net liabilities£1,585,051. Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Mar 01 & £1,017,858 £656,251 £656,251 22.2 £616,072 Matt Taylor 1.91Jan 03 (Secured) Mondas plc (AIM Listed) Has developed e-Business technologies to allow securities and investment housesto deploy new front and back office applications to facilitate straight throughprocessing. Customers benefit from improved content management, documentmanagement, business process software and service solutions. The "C" Shares fundholds 489,855 shares in the company and £900,000 convertible loan stock. Results from the latest audited accounts for the year ended 30 April 2004: sales£3,974,732, loss before tax £1,779,554, retained loss £1,631,806, netliabilities £617,901. Dates of Amount Valuation as Valuation as % Equity/ Loan Stock Investor % of "C"Investment Invested at 31 December at 31 December Director Shares (including 2003 2004 Voting Rights Portfolio Loan Stock (Mid-market) (Mid-market) Oct 00 & £1,068,116 £1,113,145 £1,017,623 1.9 £900,000 Bernard 2.96Dec 02 (at cost) Fairman Oxonica Limited Engineers the properties of materials at the nano-scale for application in fueladditives, UV protection and other products. Stagecoach has now rolled out thefuel additive product globally, and Boots will be incorporating the sun screenmaterial into a Spring 2005 facial product range. Foresight invested a further£510,000 in shares in a January 2005 rights issue. The Company is nowconsidering an IPO on the AIM market. The "C" Shares fund holds 60,071 shares inthe company prior to the further investment. Results from the latest audited accounts for the year ended 31 December 2003:sales £209,905, loss before tax £2,705,216, retained loss £2,621,827, netliabilities £2,538,148. Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Jun 02, Dec £1,863,437 999,999 £5,746,186 20.6 £524,053 Bernard 16.7002 & Jan 04 (Secured) Fairman Sarantel Limited Sarantel Limited listed on the AIM market on 2 March 2005 raising an additional£18 million to fund the ongoing expansion of the business. Sarantel's miniatureantennae (which reduce the energy reaching the heads of users by approximately90%) are used in mobile phones and personal digital assistants offering locationbased services through navigation satellites. Its sales quadrupled in the yearto 30 September 2004 and further growth is anticipated in 2005. The "C" Sharesfund holds 8,268,429 shares in the company. At 31 December Sarantel was valuedat £6.8 million against an original cost of £2.8 million. Results from the latest audited accounts for the year ended 30 September 2003:sales £204,836, loss before tax £2,930,606, retained loss £2,655,634, net assets£5,023,395. Dates of Amount Invested Valuation Valuation % Equity/ Investor % of "C" SharesInvestment Director Portfolio as at 31 as at 31 Voting Rights December 2003 December 2004 Sep 00, Apr 01, £2,853,166 £2,466,158 £6,780,112 34.6 Matt Taylor 19.71Jun 01, Mar 02,Aug 02, Sep 02,Nov 02, Feb 03,Jun 04 & Sep 04 SmartFocus Group PLC (AIM Listed) Provides software to enable accurate targeting and execution of marketingcampaigns. The company is an established solution provider in this area withapproximately 300 customers forming a wide customer base spread across financialservices, retail, marketing services and other consumer-driven sectors. Thecompany adds value to its customers marketing campaigns by linking with multipledatabases, returning query results in seconds whilst presenting the results inan easily understandable graphic manor. The "C" Shares fund holds 19,892,985shares in the company. Results from the latest audited accounts for the year ended 31 December 2003:sales £2,151,092, loss before tax £546,949, retained loss £393,735, netliabilities £1,260,286. Date of Amount Invested Valuation Valuation % Equity/ Loans % of "C" SharesInvestment (including Portfolio Loans) as at 31 as at 31 Voting Rights December 2003 December 2004 (Mid-market) Dec 01 & Oct 04 £1,666,667 £1,000,000 £2,480,843 27.0 £666,667 7.21 (Secured) themutual.net plc (AIM Listed) Sells targeted advertising by email aimed to its 1 million plus loyalty basedonline shoppers. The company's share price has risen as a result of a good setof interim accounts and consequent institutional interest in the shares. The "C" Shares fund holds 3,427,302 shares in the company. Results from the latest audited accounts for the year ended 30 April 2004: sales£2,198,708, profit before tax 650,485, retained profit £650,485, net assets£1,797,467. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Rights Portfolio as at 31 December as at 31 December 2003 2004 Jun 00 £502,938 £822,553 £976,781 9.3 2.84 Wire-e Limited Provides voice and text broadcast services to corporates and small and mediumenterprises. The business is now making an operating profit as sales continueto grow. The company is developing a more user friendly version of its serviceand is targeting new channels to market in order to grow revenues further. The "C" Shares fund holds 6,666,666 shares in the company. Results from the latest audited accounts for the year ended 30 June 2004: sales£897,661, loss before tax £381,079, retained loss £356,692, net liabilities£1,313,574. Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of "C"Investment Invested at 31 at 31 Director Shares (including December 2003 December 2004 Voting Rights Portfolio Loans) Sep 02 £1,000,000 £750,000 £500,000 26.9 £900,000 Jamie 1.45 (at cost) Richards (Secured) In addition Foresight Ordinary Fund has small investments in DSM Geodata Ltd(£69,391) and Sapphire International Limited (£60,000). The "C" Shares fund hasa small investment in KeepAhead Ltd (£10,000). REALISATIONS - ORDINARY SHARES FUND Advanced Composites Group Limited Is a long established manufacturer of high technology carbon fibre compositematerial, with factories in Heanor, north of Derby, and Tulsa, USA. Successfulmarkets include F1 racing cars, sports equipment and aerospace applications.UMECO plc acquired 100% of the company for a total cash consideration of £44.25million in May 2004, realising £10 million in respect of the investment byForesight. Dates of Investment Amount Invested Amount Realised % Equity/Voting Rights Mar 99, Oct 99 & Jul 00 1,622,978 £9,997,911 40.14 Investment Portfolio Summary at 31 December 2004 ORDINARY SHARES FUND Cost % of (including Ordinary administrative Shares costs) Valuation PortfolioEquity Portfolio (including loans) £ £ % YooMedia plc (formerly e-district.net plc) 917,357 3,197,700 26.61Telecom plus plc 248,367 1,448,475 12.05Actimax plc 480,001 817,412 6.80Clarity Commerce Solutions plc 500,000 270,000 2.25Sarantel Limited 110,000 180,400 1.50DCG Datapoint Consulting Group 175,000 175,000 1.46DSM Geodata Limited - 69,391 0.58Sapphire International Limited 1,150,000 60,000 0.50Aigis Engineering Solutions Limited 32,837 32,837 0.27Survey and Development Services Limited 700,000 - -Entraline Limited (formerly CreatureLaboratories Limited) 1,501,897 - - --------------- --------------- --------------- 5,815,459 6,251,215 52.02 Current investments 5,766,660 5,766,660 47.98 --------------- --------------- ---------------Total Ordinary Shares fund 11,582,119 12,017,875 100.00 --------------- --------------- --------------- "C" SHARES FUND Cost % of (including Ordinary administrative Shares costs) Valuation PortfolioEquity Portfolio (including loans) £ £ % Sarantel Limited 2,853,166 6,780,112 19.71Oxonica Limited 1,863,437 5,746,186 16.70SmartFocus Group PLC 1,666,667 2,480,843 7.21ANT Limited 1,097,200 1,945,744 5.66Broadreach Networks Limited 1,857,000 1,857,000 5.40Alaric Limited 1,323,133 1,323,133 3.85Aquasium Technology Limited 1,200,000 1,200,000 3.49Mondas plc 1,068,116 1,017,623 2.96themutual.net.plc 502,938 976,781 2.84Blue Curve Research.net Limited 1,000,000 793,334 2.31Monactive Limited 1,017,858 656,251 1.91DCG Datapoint Consulting Group 575,000 575,000 1.67Camwood Limited 500,000 500,000 1.45iCore Limited 750,000 500,000 1.45Wire-e Limited 1,000,000 500,000 1.45FfastFill plc 856,339 421,558 1.22Callserve Communications plc 502,893 224,999 0.65Actimax plc 203,193 200,000 0.58Broadreach Train Services Limited 143,000 143,000 0.42Aigis Engineering Solutions Limited 109,470 109,470 0.32KeepAhead Limited 1,000,000 10,000 0.03Travelstore.com plc 1,343,202 - -UK Directory (Holdings) Limited 1,000,000 - -iDesk plc 500,000 - - --------------- --------------- --------------- 23,932,612 27,961,034 81.28 Current investments 6,440,351 6,440,351 18.72 --------------- --------------- --------------- Total "C" Shares fund 30,372,963 34,401,385 100.00 --------------- --------------- --------------- COMPANY TOTAL 41,955,082 46,419,260 --------------- --------------- The amounts provided or written off against unlisted investments in the lastfinancial years were: Provisions Write Offs MadeFinancial Year £ £Year ended 31 December 2004 67,259 3,745,499Year ended 31 December 2003 2,456,474 695,000Period to 31 December 2002 (128,528) -Year ended 30 September 2002 2,231,971 -Year ended 30 September 2001 3,220,526 - No individual provision or write off exceeded 5% of the gross assets of theCompany. Non-Statutory Analysis between the Ordinary Shares and "C" Shares Funds Unaudited Statement of Total Return for the year ended 31 December 2004 Ordinary Shares fund "C" Shares fund Revenue Capital Total Revenue Capital Total £ £ £ £ £ £(Losses)/ gainson investments - (7,360,488) (7,360,488) - 9,923,132 9,923,132Income 238,476 - 238,476 935,581 - 935,581Investmentmanagement fees (122,701) (368,103) (490,804) (148,630) (445,892) (594,522)Other expenses (138,736) - (138,736) (421,954) - (421,954) ------------ ------------ ------------- ------------ ------------ ------------Return on ordinaryactivities beforetaxation (22,961) (7,728,591) (7,751,552) 364,997 9,477,240 9,842,237Tax on ordinaryactivities - - - (69,349) 69,349 - ------------ ------------ ------------- ------------ ------------ ------------ Return attributableto equityShareholders* (22,961) (7,728,591) (7,751,552) 295,648 9,546,589 9,842,237Dividends inrespect of equityShares - (7,988,846) (7,988,846) (186,430) - (186,430) ------------ --------------- --------------- ------------ -------------- -------------Transfer (from)/ toReserves (22,961) (15,717,437) (15,740,398) 109,218 9,546,589 9,655,807 ------------ --------------- --------------- ------------ -------------- -------------Return per share* (0.15)p (51.73)p (51.88)p 0.81p 26.14p 26.95p Unaudited Balance Sheets as at 31 December 2004 Ordinary Shares fund "C" Shares fund £ £ £ £Fixed assetsInvestments 6,251,215 27,961,034 Current assetsDebtors and prepayments 192,836 592,632Current investments 5,766,660 6,440,351Cash at bank 7,566 45,978 ------------ ------------- 5,967,062 7,078,961Creditors: amounts falling due within one year (101,239) (426,773) ------------ ------------- Net current assets 5,865,823 6,652,188 ------------ --------------Net assets 12,117,038 34,613,222 ------------ -------------- CapitalCalled up share capital 158,188 370,544Share premium account 4,046,967 2,943,011Cancelled share premium account 4,858,002 24,817,483Revaluation reserve 1,937,653 6,371,624Profit and loss account 1,116,228 110,560 -------------- ---------------Equity shareholders' funds 12,117,038 34,613,222 -------------- -------------- Number of shares in issue 15,818,826 37,054,390Net asset value per share - basic 76.60p 93.41pNet asset value per share - diluted 76.60p 93.41p Unaudited Profit and Loss Account for the year ended 31 December 2004 Year ended Year ended 31 December 2004 31 December 2003 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ (Losses)/gains onrealisation ofinvestments - (14,261) (14,261) - 64,000 64,000Income 1,174,057 - 1,174,057 1,282,311 - 1,282,311Investment management