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Foresight 2 VCT plc 

Unaudited Half-Yearly Financial Report 

for the six month period ended 

31 March 2008 

Foresight 2

2 


Objective 

To provide private investors with attractive returns from a portfolio of investments in fast-growing unquoted technologybased 

companies in the United Kingdom. It is the intention to maximise tax-free income available to investors from a 

combination of dividends and interest received on investments and the distribution of capital gains arising from trade 

sales or flotations. 

Summary 

2 

● The net asset value per Ordinary Share as at 31 March 2008 was 99.0p compared with 105.2p as at 

30 September 2007. The net asset value per C Share as at 31 March 2008 was 102.6p compared with 94.2p 

at 30 September 2007. 

● A final dividend of 5.0p per Ordinary Share was paid on 20 March 2008. 

● One new investment was made in the Ordinary Shares fund during the period: £300,000 in Lynwood Group 

Holdings Limited. 

● The Ordinary Shares fund provided follow-on funding totalling £664,322 for six portfolio companies: £181,473 in 

Oxonica plc, £180,647 in Oled-T, £166,667 in Closed Loop London, £81,606 in The Bunker Secure Hosting, 

£37,500 in High Integrity Solutions and £16,429 in ClockWorx (formerly Auctioning4U). 

● Three new investments totalling £1,250,000 were made in the C Shares fund during the period: £250,000 in 

Lynwood Group Holdings Limited, £500,000 in Land Energy Limited and £500,000 in AWP Environmental Limited. 

● One follow-on investment was made in the C Shares fund during the period: £166,667 in Closed Loop London. 

● As a result of the Linked Offer, Foresight 2 Ordinary Shares fund had raised gross proceeds of £1,593,076 as at 

31 March 2008 increasing to £1,979,376 as at 30 April 2008 when the offer closed. 

● Foresight 2 C Share fund raised gross proceeds of £4,255,372 from its offer for subscription as at 31 March 2008 

increasing to £7,872,747 as at 30 April 2008 when the offer closed. 

Website: www.foresightvct.com 

Contents 

Summary and Chairman’s Statement 1 

Investment Summary 3 

Unaudited Interim Results and 

Responsibility Statements 8 

Non-Statutory Analysis between 

the Ordinary Shares and C Shares Funds 9 

Income Statement 11 

Balance Sheet 12 

Reconciliation of Movements in Shareholders’ Funds 12 

Statement of Cash Flows 13 

Notes to the Interim Report 14 

Shareholder Information 16

Chairman’s Statement 

I Introduction 

During the six months under review, stock markets 

experienced extreme volatility, primarily as a result of 

difficulties in the US sub-prime mortgage market and in 

the UK as a result of the problems surrounding the 

lending activities of Northern Rock. I am pleased to report 

that this market turmoil has not directly affected the 

unquoted holdings within our investments and that your 

Company has continued to build on recent progress 

during the period under review and is continuing with its 

active new investment programme as well as realising 

investments from within the portfolio. Reflecting recent 

investment gains, a final dividend for the year ended 

30 September 2007 of 5.0p per Ordinary Share was paid 

to Ordinary shareholders on 20 March 2008. 

The performance of a number of portfolio companies 

continued to improve, reflecting growing demand and 

strong sales pipelines, most notably Trilogy 

Communications, Probability plc and Ixaris Systems. 

Trilogy Communications is enjoying increasing demand 

for its Internet Protocol (‘IP’) based command and control 

communication system, Mercury, particularly from the 

defence and Homeland Security sectors in the US. 

Probability plc recently announced continued growth in 

both its gaming revenues and new customer registration 

as well as announcing several strategic relationships with 

groups such as The Sun, Rank and News International. 

Ixaris Systems’ sales progress has continued as a result 

of improved worldwide distribution for its virtual credit 

cards. 

Datapath continues to trade well and produced operating 

profits of £2.5 million in the year to 31 March 2008. 

Disappointingly, ClockWorx (formerly Auctioning4U) was 

placed into Administration on 31 January 2008 following 

a failure to secure funding commitments for its specialist 

online auction platforms and its ClockWorx workflow 

software suite. High Integrity Solutions was also placed 

into administration, on 3 April 2008, as a result of losing a 

major contract with BAE Systems. Full provisions were 

taken against the values of both companies at a 

combined cost of £1,165,929. 

I Offers for Subscription 

Linked Offer 

The linked offer for subscription between Foresight VCT, 

Foresight 2, Foresight 3 and Foresight 4 was successful 

and raised £7,917,503 when it closed on 30 April 2008. 

The proceeds of the offer were equally split with the 

Foresight 2 Ordinary Shares fund receiving total gross 

proceeds of £1,979,376. 

C Share Offer 

The C Share Offer raised £7,872,747 when it closed on 

30 April 2008. 

Peter Dicks 

Chairman 

Half-Yearly Financial Report for the six months ended 31 March 2008 

01 

The new funds raised by both offers will be invested to 

take advantage of the strong deal flow being generated 

by Foresight Group, the Company’s Manager. 

Administration costs are spread across both pools to the 

benefit of both sets of shareholders. 

I Results and Dividend 

The results for the six months from 1 October 2007 to 

31 March 2008 are set out below. The net asset value per 

Ordinary Share as at 31 March 2008 was 99.0p compared 

with 105.2p as at 30 September 2007, the reduction 

largely being due to the 5.0p Ordinary Share dividend. 

The net asset value per C Share as at 31 March 2008 was 

102.6p compared to 94.2p as at 30 September 2007. 

The Company’s policy is to maximise the level of 

dividends, free of tax for qualifying shareholders, either 

generated from income received or from capital profits 

realised on the sale of investments. Reflecting recent 

investment gains, a final dividend of 5.0p per Ordinary 

Share for the year ended 30 September 2007 was paid 

on 20 March 2008 to the Ordinary shareholders. 

I Ordinary Share Portfolio — Investment Activity 

Realisations 

Foresight 2 invested £1,000,000 in the management 

buyout of Covion Holdings in May 2005. This was one of 

the first investments by your Company following the 

launch of the Ordinary Shares fund in September 2004. 

In the period since the investment was made, Covion 

Holdings has grown its turnover from £10 million per 

annum to a current annualised rate in excess of £30 

million. Covion Holdings was sold to Balfour Beatty for 

total proceeds of £33 million, of which Foresight 2 

received some £4.3 million, over four times its original 

investment of £1 million. 

Furthermore, during March 2008 Foresight 2’s investment 

in Utarget, an investment made 15 months previously in 

December 2006, was sold to Fox International for 

proceeds of £1,318,140, a return of 1.95 times the 

original cost of £675,000. 

Purchases 

One new investment was made in the Ordinary Shares 

fund during the period: £300,000 in Lynwood Group 

Holdings Limited. 

Lynwood is an established business in the plastic building 

products market in the UK and has made the transition to 

using waste plastic streams as its raw material. Lynwood 

has acquired a small business with specialist expertise in 

manufacturing wood profile and wood replacement 

products from waste plastic and it is now one of the best 

equipped recycling manufacturing operations in the UK. 

The company is well positioned in a growing market for 

recycled and sustainable products such as wood 

replacement which offer economic and environmental 

advantages.

2 


02 

Chairman’s Statement 

During the period, £664,322 was invested in follow-on 

funding rounds in six portfolio companies: Oxonica plc 

(£181,473), Oled-T (£180,647), Closed Loop London 

(£166,667), The Bunker Secure Hosting (£81,606), High 

Integrity Solutions (£37,500), and ClockWorx (£16,429). 

After suffering a contract setback for its fuel additive, 

Envirox, during the first half of 2007 which had a 

significant impact on the company’s operations as well as 

its share price, Oxonica recently reported performance 

validation for this additive and significant commercial 

progress in mainland Europe and Russia. In December 

the company announced that it had raised in excess of 

£4 million through a share placing to existing 

shareholders. New contract wins in the biodiagnostics 

and security divisions also helped sales. 

Closed Loop London is a business at the leading edge of 

plastics recycling in the UK. The company is initially 

focused on producing food grade recycled PET 

(polyethylene terephthalate) and HDPE (high density 

polyethylene). PET is the clear plastic used in over 50% 

of soft drinks bottles, with over 300,000 tonnes used per 

annum in the UK with none currently recycled for use as 

food grade plastic. HDPE is the white plastic used in milk 

bottles. Closed Loop London is nearing completion of its 

first recycling plant in Dagenham and has plans in place 

for a second facility in the North-West. Initial 

commissioning of the first plant will commence at the end 

of June with the whole plant coming on-stream within 

three months, starting with PET and then with the HDPE 

facilities. 

The Bunker Secure Hosting is experiencing strong 

demand for its ultra secure IT hosting services and is 

developing plans for a substantial increase in its capacity. 

I C Share Portfolio — Investment Activity 

The C Share fund continues to progress well and three 

new investments were made during the six months under 

review: Lynwood Group Holdings Limited (£250,000), 

AWP Environmental Limited (£500,000) and Land Energy 

Limited (£500,000). 

Lynwood is a co-investment with the Ordinary Shares 

fund and further details are included earlier in this 

statement. 

AWP plans to develop waste to energy power stations, 

geographically distributed across the country. The 

investment offers significant environmental benefits. It will 

divert waste from landfill, contributing to the reduction in 

landfill targeted by EU and UK legislation. It will also 

generate renewable electricity, contributing to government 

targets and earning Renewable Obligation Certificates. 

Land Energy has been set up to generate renewable 

power from virgin wood and to exploit the growing 

demand for wood pellets as a renewable fuel, through a 

series of plants countrywide. The plants will generate 

electricity for export to the grid and either use heat for 

pellet production or supply heat to a nearby user. The 

company will therefore be both a combined heat and 

power (CHP) generation operator and a pellet producer. 

The UK Government has identified CHP as a highly 

efficient form of energy use, which will be further 

incentivised from April 2009 by becoming eligible for 

double Renewable Obligations Certificates. 

A follow-on investment of £166,667 was also made from 

the C Shares fund during the period in Closed Loop 

London, which is described in more detail earlier. 

I Valuation policy 

Investments held by the Company have been valued in 

accordance with the International Private Equity and 

Venture Capital (IPEVC) guidelines developed by the 

British Venture Capital Association and other organisations 

under which investments are valued, as defined in the 

guidelines, at “fair value”. Ordinarily, unquoted investments 

will be valued at cost for the 12 months following the date 

of acquisition as the most suitable approximation of fair 

value unless there is an impairment or accretion in value 

during the period. Quoted investments and investments 

traded on AIM and PLUS (formerly OFEX) are valued at 

the bid price as at 31 March 2008. The portfolio valuations 

are prepared by Foresight Group and are subject to 

approval by the Board. 

I Share Issues and Share Buy-backs 

During the period, the Company issued 196,008 Ordinary 

Shares under the Dividend Investment Scheme at 

101.19p per share raising approximately £198,000 in 

aggregate. These shares were issued under the new VCT 

provisions that commenced on 6 April 2006, namely: 

30% upfront income tax relief which can be retained by 

qualifying investors if the shares are held for the minimum 

five year holding period. 

As a result of the linked offer for subscription, Foresight 2 

issued 1,493,309 Ordinary Shares during the period at 

prices ranging from 104.0p to 114.0p per share. 

It continues to be the Company’s policy to consider 

repurchasing shares when they become available in order 

to provide a degree of liquidity for the Company’s shares. 

During the period, the Company repurchased 252,435 

Ordinary Shares for cancellation at a cost of £222,588 

and at an approximate discount to Net Asset Value (NAV) 

of 10%. 

A total of 4,353,152 C Shares were issued under its offer 

for subscription at a cost of £1 per share during the 

period. 

I Manager Change of Name 

The Investment Manager changed its name from Foresight 

Venture Partners to Foresight Group on 1 October 2007. 

I Outlook 

To date there has been no significant fallout from the 

current credit crunch on the levels of merger and 

acquisition activity at the smaller end of the market in 

which Foresight 2 VCT operates and of which the sale of 

Utarget and Covion Holdings are examples. Your 

Manager will continue to pursue potential realisations 

from within the portfolio. 

The market in which Foresight 2 VCT operates continues 

to be encouraging in terms of potential new investment 

opportunities, as evidenced by the current deal flow 

being reviewed by Foresight Group. Foresight 2 VCT will 

have access to this deal flow of new opportunities as it 

invests new funds raised as well as reinvesting some of 

the proceeds from successful realisations. 

Peter Dicks 

Chairman 

30 May 2008

Investment Summary 


03 

I ORDINARY SHARE FUND 

31 March 2008 30 September 2007 

Amount Amount 

Investment Invested Valuation Valuation Methodology Invested Valuation 

£ £ £ £ 

Trilogy Communications Limited 1,650,000 1,650,000 * Cost 1,650,000 1,650,000 

OLED-T Limited 1,180,647 1,489,308 * Discounted revenue multiple 1,000,000 1,445,719 

alwaysON Group Limited 1,050,350 1,050,350 * Cost 1,050,350 1,050,350 

Closed Loop London Limited 916,667 916,667 * Cost 750,000 750,000 

SkillsMarket Limited 519,999 902,220 * Price of recent funding round 519,999 789,443 

The Bunker Secure Hosting Limited 512,510 868,270 * Discounted revenue multiple 430,904 430,904 

Aigis Blast Protection Limited 1,000,000 750,000 * Discounted cost 1,000,000 1,000,000 

Infrared Integrated Systems Limited 749,985 749,985 * Cost 749,985 749,985 

Ixaris Systems Limited 700,000 700,000 * Cost 700,000 700,000 

Oxonica plc (AIM listed) 1,181,473 629,639 * Bid price 1,000,000 396,660 

ZOO Digital Group plc (AIM listed) 600,000 522,692 Bid price 600,000 591,923 

Iskra Wind Turbines Limited 500,000 500,000 Cost 500,000 500,000 

Nanotecture Group plc 500,000 500,000 Price of recent funding round 500,000 500,000 

TFC Europe Limited 350,000 350,000 Cost 350,000 350,000 

Sindicatum Carbon Capital Limited 125,006 328,100 Price of recent funding round 125,006 131,240 

Lynwood Group Holdings Limited 300,000 300,000 Cost — — 

Probability plc (AIM listed) 250,000 210,526 Bid price 250,000 164,474 

Sarantel Group plc (AIM listed) 468,000 45,366 Bid price 468,000 68,049 

ClockWorx (formerly Auctioning4U Limited) 728,429 — Nil value 712,000 712,000 

High Integrity Solutions Limited 437,500 — Nil value 400,000 400,000 

Covion Holdings Limited — — Sold 1,000,000 4,284,251 

Utarget Limited — — Sold 675,000 675,000 

13,720,566 12,463,123 14,431,244 17,339,998 

* Top ten investments by value shown on pages 4 to 5. 

I C SHARE FUND 

31 March 2008 30 September 2007 

Amount Amount 

Investment Invested Valuation Valuation Methodology Invested Valuation 

£ £ £ £ 

Datapath Holdings Limited 1,000,000 2,459,661 Discounted price/earnings multiple 1,000,000 1,000,000 

AWP Environmental Limited 500,000 500,000 Cost — — 

Land Energy Limited 500,000 500,000 Cost — — 

Heritage House Media Limited 425,000 425,000 Cost 425,000 425,000 

O-Gen UK Limited 300,000 300,000 Cost 300,000 300,000 

Closed Loop London Limited 416,667 416,667 Cost 250,000 250,000 

Lynwood Group Holdings Limited 250,000 250,000 Cost — — 

TFC Europe Limited 250,000 250,000 Cost 250,000 250,000 

Global Immersion Limited 166,667 166,667 Cost 166,667 166,667 

Iskra Wind Turbines Limited 150,000 150,000 Cost 150,000 150,000 

3,958,334 5,417,995 2,541,667 2,541,667 

All investments shown on pages 6 to 7.

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04 

Investment Summary — Ordinary Share Portfolio 

Top ten investments by value as at 31 March 2008 are detailed below: 

Trilogy Communications Limited 

Is a world class supplier of audio communications and infrastructure equipment to the broadcast, defence, emergency management 

and commercial and industrial sectors. Trilogy has a reputation for innovative design, ease of operation and reliability. The company’s 

products and systems are used in more than 40 countries. 

OLED-T Limited 

Develops organic light-emitting display materials targeting the flat-screen display market. Its materials are well suited to small portable 

devices offering brighter, clearer colours, longer lifetimes and low power consumption. The company is working closely with key Far 

East product manufacturers which have given positive feedback. However, commercial revenues are some time away because of the 

lead time for building new manufacturing facilities. The $50 billion global display screen market offers strong licence revenue 

opportunities. 

alwaysON Group Limited 

A market leading provider of data VPNS voice over IP (VOIP) services to SMEs and public sector organisations. The company’s 

infrastructure is extremely secure and can be rolled out to customers quickly. Easynet and Ofsted are recent customer wins. 

Closed Loop London Limited 

Is the first plant in the UK to recycle waste PET plastic bottles into food grade packaging material. Following a £12 million private and 

public sector funding issue led by Foresight Group, the 35,000 tonne capacity plant also in Dagenham is expected to be fully 

operational by June 2008. Further funding is being provided to enable the Dagenham plant to also recycle HDPE. 

SkillsMarket Limited 

Manages CV data for recruitment agencies and operates online information exchanges. The service is highly automated, using a mix 

of proprietary and third-party software. The company holds data on 90% of all IT staff in the UK and its customers employ 20% of all 

recruitment consultants in the UK IT recruitment sector.


05 

Investment Summary — Ordinary Share Portfolio 

The Bunker Secure Hosting Limited 

Is a high security IT data business which owns and leases 41,500 square feet of underground ex-military command centres at Ash, 

Greenham Common and Bawdsey. The Bunker builds, hosts and manages IT infrastructure platforms for top financial, telecoms and 

web-centric companies worried about terrorist and disaster threats, both physical and digital. 

Aigis Blast Protection Limited 

Produces blast protection materials. Applications include containers that can be used at airports for homeland security purposes, military 

vehicles and building cladding. The company is now selling products on an international basis. 

Infrared Integrated Systems Limited 

Manufactures infrared arrays and sells cameras and thermal imagers incorporating these arrays. The lead product is a people counter 

used by many large retail organisations and a range of hand-held thermal imaging cameras used in security and inspection applications. 

Ixaris Systems Limited 

Operates online bank accounts and a prepaid electronic payment service integrated with the VISA network. Consumers deposit funds 

by credit card, cash at Post Offices and similar payment points or via normal bank transfers. 

Oxonica plc (AIM listed) 

Develops products based on advanced nanomaterials which are then sold through agreements with commercial partners for end 

market adoption. The Company operates through two divisions, Oxonica Nanomaterials and Oxonica Diagnostics. The Nanomaterial 

division focuses on three product areas, namely (i) Envirox, a fuel borne additive for diesel which reduces fuel consumption and 

particulate emissions; (ii) cosmetic and industrial UV absorbers Optisol (used in sunscreens and anti-ageing consumer products) and 

Solacor (for use in industrial coatings such as paint and in plastics to prevent degradation by sunlight); and (iii) security applications 

using nanotechnology based marker systems for anticounterfeiting and brand protection. The Diagnostics division, using nanomaterial 

based tags, is developing individual tests and rapid test systems for use in detecting and quantifying diseases and other protein/DNA 

based biomaterials for a wide range of applications in the clinical diagnostics, life sciences, veterinary, food and bioterrorism markets. 

Despite the loss of a large order for Envirox in mid 2007, the Company has since made good progress with Envirox. Optisol continues 

to move forward and a number of good opportunities are emerging for the security technology and Solacor. The Diagnostics division 

made significant progress as evidenced by a further collaboration agreement with Becton Dickinson. Oxonica successfully raised £4.1 

million of equity through a placing in December 2007, in which your Company participated.

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06 

Investment Summary — C Share Portfolio 

Investment portfolio as at 31 March 2008 is detailed below: 

Datapath Holdings Limited 

Supplies graphics cards and other products, used mainly to control large screen displays known as ‘videowall’. The business has grown 

strongly in recent years, with annualised turnover approaching £10 million. 

AWP Environmental Limited 

Is a holding company set up to develop waste to energy power stations. In October 2007, AWP acquired an established waste handling 

business, BCB Environmental Management Ltd, which is profitable and secures access to part of the waste stream required for the 

first power station. The total Foresight investment of £6 million will fund the first power station, alongside £12 million of bank debt. The 

company’s vision is to establish 8 geographically-distributed plants in the UK. 

Land Energy Limited 

Has been set up to generate renewable power from virgin wood, and to exploit the growing demand for wood pellets as a renewable 

fuel. The company plans to build 3 plants, in Wales, Scotland and England, at sites chosen for local demand for pellets and proximity 

to forestry resources, thereby reducing transport costs for wood supply and distribution of pellets. Our investment of £5 million will 

support the first plant. 

Heritage House Media Limited 

Provides contract publishing and souvenirs to the heritage market. The company is pursuing an aggressive acquisition strategy and aims to 

become a ‘one-stop shop’ for online services, publishing and souvenirs to the heritage market. 

O-Gen (UK) Limited 

O-Gen’s business is to develop, build, own and operate waste wood to energy and combined heat and power (‘CHP’) plants. The 

market is driven by government regulation and incentives. Specifically, landfill tax, which is driving waste operators towards cheaper 

and more efficient methods of waste disposal such that gate fees will be received by O-Gen from the waste wood (biomass) suppliers. 

The electricity generated from processing the wood will be sold to the National Grid and attracts Renewable Obligation Certificates 

(“ROCs”) which generate further revenue.

Investment Summary — C Share Portfolio 

Closed Loop London Limited 

Lynwood Group Holdings Limited 


07 

Is the first plant in the UK to recycle waste PET plastic bottles into food grade packaging material. Following a £12 million private and 

public sector funding issue led by Foresight Group, the 35,000 tonne capacity plant in Dagenham is expected to be fully operational 

by June 2008. Further funding is being provided to enable the Dagenham plant to also recycle HDPE. 

Is a well established business in the UK plastic building products market that has made the transition to using waste plastic streams 

as its raw materials. In addition, its Intruplas operation has specialist expertise in manufacturing wood replacement products from waste 

plastic. It is well positioned in a growing market for recycled and sustainable goods that offer economic and environmental advantages. 

Based in Halifax, it plans to roll-out multiple satellite operations throughout the UK, funded by the £3 million total Foresight investment. 

TFC Europe Limited 

Supplies injection moulded technical fasteners and ring and spring products to customers across a wide range of industries, including 

aerospace, automotive, hydraulics and petrochemicals. 

Global Immersion Limited 

Provides planetariums and immersive theatres with projection equipment, design, installation and maintenance services. There are over 

3,200 immersive theatres worldwide and it is estimated that over 108 million people visited these domes last year. The most profound 

change to the immersive theatre market over the last ten years has been the transition from optical-mechanical projection systems to the 

digital age and the company has identified a number of growth areas to target over the next five years. 

Iskra Wind Turbines Limited 

Is a manufacturer of high efficiency tree-sized wind turbines, suitable for volume manufacture, that have the best price/performance 

combination of any tree-sized turbine currently commercially available.

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08 

Unaudited Half-Yearly Results and Responsibility Statements 

I Principal Risks and Uncertainties 

The principal risks faced by the Company can be divided into various areas as follows: 

● Performance 

● Regulatory 

● Operational and 

● Financial 

The Board reported on the principal risks and uncertainties faced by the company in the Annual Report and Accounts 

for the year ended 30 September 2007. A detailed explanation can be on found on pages 17 and 18 of the Annual 

Report and Accounts which is available on www.foresightgroup.eu or by writing to Foresight Group at ECA Court, 

South Park, Sevenoaks, Kent TN13 1DU. 

In the view of the Board, there have not been any changes to the fundamental nature of these risks since the previous 

report and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year 

as they were to the six months under review. 

I 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 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 1985 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). 

The half-yearly Financial Report has not been audited or reviewed by the auditors. 

By order of the Board 

Peter Dicks 

Chairman 

30 May 2008

Income Statements 

for the six months to 31 March 2008 


09 

Unaudited Non-Statutory Analysis between the 

Ordinary Shares and C Shares Funds 

Ordinary Shares Fund C Shares Fund 

Revenue Capital Total Revenue Capital Total 

£’000 £’000 £’000 £’000 £’000 £’000 

Unrealised (losses)/gains on investments — (3,999) (3,999) — 1,460 1,460 

Realised gains on investments — 3,760 3,760 — 6 6 

Income 351 — 351 405 — 405 

Investment management fees (60) (180) (240) (40) (118) (158) 

Other expenses (95) — (95) (65) — (65) 

Net surplus/(deficit) before taxation 196 (419) (223) 300 1,348 1,648 

Tax on ordinary activities (39) 39 — — — — 

Return/(deficit) attributable to 

equity shareholders 157 (380) (223) 300 1,348 1,648 

Return per share 0.8p (1.9)p (1.1)p 2.1p 9.2p 11.3p 

Reconciliation of Movements in Shareholders’ Funds 

for the six months ended 31 March 2008 

Ordinary C 

Shares Fund Shares Fund 

£’000 £’000 

Opening shareholders’ funds 20,530 13,433 

Return attributable to equity shareholders: 

— revenue 157 300 

— capital (380) 1,348 

Total (223) 1,648 

Share issues 1,593 4,257 

Expenses on share issues (101) (235) 

Share buy-backs (224) — 

Dividends (1,027) — 

Dividends reinvested 198 — 

Net increase in shareholders’ funds 216 5,670 

Closing shareholders’ funds 20,746 19,103

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10 

Unaudited Non-Statutory Analysis between the 

Ordinary Shares and C Shares Funds 

Balance Sheets 

as at 31 March 2008 

Ordinary Shares Fund C Shares Fund 

£’000 £’000 £’000 £’000 

Non-current assets 

Assets held at fair value through 

profit or loss — investments 12,463 5,418 

Current assets 

Debtors 1,156 4,344 

Money market and other deposits 6,094 9,573 

Cash 1,420 1 

8,670 13,918 

Creditors 

Amounts falling due within one year (387) (233) 

Net current assets 8,283 13,685 

Net assets 20,746 19,103 

Capital and reserves 

Called-up share capital 210 186 

Share premium account 1,697 17,311 

Capital reserve — realised 2,778 (254) 

Capital reserve — unrealised (1,088) 1,459 

Capital redemption reserve 3 — 

Distributable reserve 17,146 401 

Equity shareholders’ funds 20,746 19,103 

Number of shares in issue 20,951,094 18,610,589 

Net asset value per share 99.0p 102.6p

Unaudited Income Statement 

(incorporating the Revenue Account) for the period to 31 March 2008 


11 

6 Months to 6 Months to Year to 

31 March 2008 31 March 2007 30 September 2007 

(unaudited) (unaudited) (audited) 

Revenue Capital Total Revenue Capital Total Revenue Capital Total 

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 

Unrealised (losses)/gains 

on investments — (2,539) (2,539) — 1,449 1,449 — 2,407 2,407 

Realised gains on investments — 3,766 3,766 — — — — — — 

Income 756 — 756 209 — 209 641 — 641 

Investment management fees (100) (298) (398) (60) (181) (241) (161) (484) (645) 

Other expenses (160) — (160) (126) — (126) (282) — (282) 

Net income before taxation 496 929 1,425 23 1,268 1,291 198 1,923 2,121 

Tax on ordinary activities (39) 39 — — — — 38 (38) — 

Return attributable to equity 

shareholders 457 968 1,425 23 1,268 1,291 236 1,885 2,121 

Return per Ordinary Share 0.8p (1.9)p (1.1)p 0.1p 6.6p 6.7p 0.6p 10.5p 11.1p 

Return per C Share 2.1p 9.2p 11.3p (0.1)p (0.7)p (0.8)p 2.2p (3.0)p (0.8)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. 

The Company has no recognised gains and losses other than those shown above and therefore no separate statement of total 

recognised gains and losses has been presented. 

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued 

in the period. 

The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. 

Income from investments is recognised on an accruals basis.

2 


12 

Unaudited Balance Sheet 

at 31 March 2008 

As at As at As at 



£’000 £’000 £’000 

Non-current assets 

Assets held at fair value through profit and loss — investments 17,881 15,821 19,882 

Current assets 

Debtors 5,275 86 578 

Money market and other deposits 15,667 4,567 13,001 

Cash 1,421 8,273 617 

22,363 12,926 14,196 

Creditors 

Amounts falling due within one year (395) (75) (115) 

Net current assets 21,968 12,851 14,081 

Net assets 39,849 28,672 33,963 

Capital and reserves 

Called-up share capital 396 290 338 

Share premium account 19,008 8,880 13,357 

Capital reserve — realised 2,524 (642) (983) 

Capital reserve — unrealised 371 1,952 2,910 

Capital redemption reserve 3 — — 

Distributable reserve 17,547 18,192 18,341 

Equity shareholders’ funds 39,849 28,672 33,963 

Net asset value per Ordinary Share 99.0p 101.1p 105.2p 

Net asset value per C Share 102.6p 94.3p 94.2p 

Unaudited Reconciliation of Movements in 

Shareholders’ Funds 

£’000 £’000 £’000 

Opening shareholders’ funds 33,963 18,564 18,564 

Return attributable to shareholders 1,425 1,291 2,121 

Shares issues (net of expenses) 5,514 8,975 13,436 

Share buybacks (224) (40) (40) 

Dividends (1,027) (118) (118) 

Dividends reinvested 198 — — 

Closing shareholders’ funds 39,849 28,672 33,963

Unaudited Statement of Cash Flows 

for the six months to 31 March 2008 


13 

6 months to 6 months to Year to 



£’000 £’000 £’000 

Cash flow from operating activities 

Investment income received 203 64 146 

Deposit and similar interest received 443 169 388 

Investment management fees paid (369) (225) (645) 

Secretarial fees paid (59) (37) (55) 

Other cash payments (84) (98) (552) 

Net cash inflow/(outflow) from operating activities and returns on investment 134 (127) (718) 

Taxation — — — 

Returns on investment and servicing of finance 

Purchase of unquoted investments and investments quoted on AIM (2,319) (3,256) (6,359) 

Net proceeds on sale of unquoted investments 5,559 — — 

Repurchase of own shares — (41) (40) 

Net capital inflow/(outflow) from financial investment 3,240 (3,297) (6,399) 

Equity dividends paid (1,027) (118) (118) 

Net cash inflow/(outflow) before financing and liquid resource management 2,347 (3,542) (7,235) 

Management of liquid resources 

Movement in money market and other deposits (2,567) 2,864 (5,569) 

Financing 

Proceeds of fund raising 830 9,475 14,258 

Expenses of fund raising (4) (532) (845) 

Dividends reinvested 198 25 25 

1,024 8,968 13,438 

Increase in cash 804 8,290 634 

Reconciliation of net cash flow to movement in net cash 

Increase in cash for the period 804 8,290 634 

Net cash at start of period 617 (17) (17) 

Net cash at end of period 1,421 8,273 617 

Reconciliation of income to net cash flow from operating activities 

Net income before taxation 497 23 198 

Investment management fee charged to capital (299) (181) (484) 

(Increase)/decrease in debtors (111) 18 (474) 

Increase in creditors 47 13 42 

Net cash inflow/(outflow) from operating activities 134 (127) (718)

2 


14 

Notes to the Half-Yearly Results 

1. The unaudited interim results have been prepared on the basis of accounting policies set out in the statutory accounts of the 

Company for the year ended 30 September 2007. Unquoted investments have been valued in accordance with IPEVC 

guidelines. Quoted investments are stated at bid prices in accordance with the IPEVC guidelines and Generally Accepted 

Accounting Practice. 

2. These are not statutory accounts in accordance with section 240 of the Companies Act 1985 and are neither audited nor 

reviewed. Statutory accounts in respect of the period to 30 September 2007 have been audited and reported on by the 

Company’s auditors and delivered to the Registrar of Companies. No statutory accounts in respect of any period after 

30 September 2007 have been reported on by the Company’s auditors or delivered to the Registrar of Companies. 

3. Copies of the Interim Report will be sent to shareholders and will be available for inspection at the Registered Office of the 

Company at ECA Court, South Park, Sevenoaks, Kent TN13 1DU. 

4. The net asset value per share for both the Ordinary Share and the C Shares has been calculated on the appropriate allocation of 

the Company’s assets and liabilities. Other than expenses specifically attributable to one fund or the other, all the remaining 

costs were attributed to the Ordinary Share fund to 31 March 2007. From 1 April 2007 to 31 March 2008 60 per cent of the 

joint costs incurred are allocated to the Ordinary Share fund and 40 per cent to the C Share fund, based on original funds 

raised. From 31 March 2008 all costs will be split equally between the two funds. The Net Asset Value per Ordinary Share is 

based on net assets of £20,746,468 (31 March 2007: £19,735,461) of the Ordinary Share fund at 31 March 2008 and on 

20,951,094 (31 March 2007: 19,514,212) Ordinary Shares, being the number of Ordinary Shares in issue at that date. The Net 

Asset Value per C Share is based on net assets of £19,102,392 (31 March 2007: 8,936,279) of the C Share fund at 31 March 

2008 and on 18,610,589 (31 March 2007: 9,474,896) C Shares, being the number of C Shares in issue at that date. 

5. Earnings for the first six months should not be taken as a guide to the results for the full year. The total earnings after taxation 

were £1,425,000 (31 March 2007: £1,291,000), being made up of a deficit on the Ordinary Share fund of £223,000 (31 March 

2007: surplus of £1,305,000), and a surplus on the C Share fund of £1,648,000 (31 March 2007: deficit of £14,000). 

The revenue return per Ordinary Share is based on the revenue surplus for the period of £157,000 (31 March 2007: surplus of 

£25,000) and on 19,738,338 Ordinary Shares (31 March 2007: 19,539,194 Ordinary Shares), being the total weighted average 

number of Ordinary Shares in issue during the period. The capital return per Ordinary Share is based on the capital deficit for the 

period of £380,000 (31 March 2007: surplus of £1,280,000) and on 19,738,338 Ordinary Shares (31 March 2007: 19,539,194 

Ordinary Shares), being the weighted average number of Ordinary Shares in issue during the period. The total return per 

Ordinary Share is based on the total deficit for the period of £223,000 (31 March 2007: surplus of £1,305,000) and on 

19,738,338 Ordinary Shares (31 March 2007: 19,539,194 Ordinary Shares), being the weighted average number of Ordinary 

Shares in issue during the period. 

The revenue return per C Share is based on the revenue surplus for the period of £300,000 (31 March 2007: deficit of £2,000) 

and on 14,646,797 C Shares (31 March 2007: 1,811,818 C Shares), being the total weighted average number of C Shares in 

issue during the period. The capital return per C Share is based on the capital surplus for the period of £1,348,000 (31 March 

2007: deficit of £12,000) and on 14,646,797 C Shares (31 March 2007: 1,811,818 C Shares), being the weighted average 

number of C Shares in issue during the period. The total return per C Share is based on the total surplus for the period of 

£1,648,000 (31 March 2007: deficit of £14,000) and on 14,646,797 C Shares (31 March 2007: 1,811,818 C Shares), being the 

weighted average number of C Shares in issue during the period.

Notes to the Half-Yearly Results 


15 

6. Income 

COMPANY 6 months to 6 months to Year to 


Other income 

£’000 £’000 £’000 

— Deposit interest 453 163 424 

— Venture capital investments 303 46 217 

7. Movement in reserves 

COMPANY 

756 209 641 

Share Capital Capital Capital 

Called-up premium reserve reserve redemption Distributable 

share capital account realised unrealised reserve reserve Total 

£’000 £’000 £’000 £’000 £,000 £’000 £’000 

As at 30 September 2007 338 13,357 (983) 2,910 — 18,341 33,963 

Share issues in the period 59 5,791 — — — — 5,850 

Expenses in relation to share issues — (336) — — — — (336) 

Dividends reinvested 2 196 — — — — 198 

Share buyback (3) — — — 3 (224) (224) 

Net decrease in the value of investments — — — (2,539) — — (2,539) 

Realised gains on sale of investments — — 3,766 — — — 3,766 

Management fees charged to capital — — (298) — — — (298) 

Tax charged to capital — — 39 — — — 39 

Dividends — — — — — (1,027) (1,027) 

Income for the period — — — — — 457 457 

As at 31 March 2008 396 19,008 2,524 371 3 17,547 39,849 

8. Summary of investments during the period 

COMPANY Quoted 

on AIM Unquoted Total 

£’000 £’000 £’000 

Book cost as at 30 September 2007 2,317 14,655 16,972 

Unrealised (depreciation) / appreciation (1,096) 4,006 2,910 

Valuation at 30 September 2007 

Movements in the period: 

1,221 18,661 19,882 

Purchases at cost 181 2,319 2,500 

Disposal proceeds — (5,559) (5,559) 

Realised gains — 3,766 3,766 

Unrealised appreciation / (depreciation) 6 (2,714) (2,708) 

Valuation at 31 March 2008 1,408 16,473 17,881 

Book cost at 31 March 2008 2,498 15,181 17,679 

Unrealised (depreciation) / appreciation (1,090) 1,292 202 

Valuation at 31 March 2008 1,408 16,473 17,881

2 


16 

Shareholder Information 

Dividends 

Shareholders who wish to have dividends paid directly into their bank account rather than by cheque to their registered address can 

complete a Mandate Form for this purpose. Mandates can be obtained by telephoning the Company’s registrar, Computershare 

Investor Services PLC (see over for details). 

Share price 

The Company’s Ordinary Shares are listed on the London Stock Exchange. The mid-price of the Company’s Ordinary and ‘C’ Shares is 

given daily in the Financial Times in the Investment Companies section of the London Share Service. Share price information can also 

be obtained from many financial websites. 

Notification of change of address 

Communications with shareholders are mailed to the registered address held on the share register. A change of address or other 

amendment should be notified to the Company’s registrar, Computershare Investor Services PLC, under the signature of the registered 

holder. 

Trading shares 

The Company’s Ordinary and ‘C’ Shares can be bought and sold in the same way as any other quoted company on the London Stock 

Exchange via a stockbroker. The primary market maker for Foresight 2 VCT plc is Landsbanki (see over for details). Investment in VCTs 

should be seen as a long-term investment and shareholders selling their shares within three years of original purchase (five years post- 

6 April 2006) may lose any tax reliefs claimed. Investors who are in any doubt about selling their shares should consult their 

independent financial adviser. 

Please call Foresight Group (see details below) if you or your adviser have any questions about this process. 

Indicative financial calendar 

January 2009 Announcement of preliminary results for the year ended 30 September 2008 

January 2009 Posting of the Annual Report for the year ended 30 September 2008 

January 2009 Annual General Meeting 

June 2009 Announcement of Interim Results for the six months ended 31 March 2009 

Open invitation to meet the Investment Manager 

As part of our investor communications policy, shareholders can arrange a mutually convenient time to come and meet the Company’s 

investment management team at Foresight Group. If you are interested please call Foresight Group (see details below). 

Enquiries 

Contact: Please call Foresight Group, for any queries relating to Foresight 2 VCT plc: 

Telephone: 01732 471800 

Fax: 01732 471810 

e-mail: info@foresightgroup.eu 

website: www.foresightvct.com 

Foresight 2 VCT plc is advised by Foresight Group LLP, which is authorised and regulated by the Financial Services Authority. Past 

performance is not necessarily a guide to future performance. Stock markets and currency movements may cause the value of 

investments and the income from them to fall as well as rise and investors may not get back the amount they originally invested. Where 

investments are made in unquoted securities and smaller companies, their potential volatility may increase the risk to the value of, and 

the income from, the investment.


17

Corporate Information 

Foresight 2 VCT 

ECA Court 

South Park 

Sevenoaks 

Kent 

TN13 1DU 

Directors Sponsors and Stockbrokers 

Peter Dicks (Chairman) Landsbanki 

Roger Blears Beaufort House 

Bernard Fairman 15 St Botolph Street 

David Quysner London 

EC3A 7QR 

Company Secretary Auditors 

VCF Fund Managers Limited Ernst & Young LLP 

ECA Court 1 More London Place 

South Park London 

Sevenoaks SE1 2AF 

TN13 1DU 

Registered Office and Investment Managers Solicitors and VCT Tax Adviser 

Foresight Group Martineau Johnson 

ECA Court No. 1 Colmore Square 

South Park Birmingham 

Sevenoaks B4 6AA 

TN13 1DU 

Registrar Registered Number 

Computershare Investor Services PLC 05200494 

PO Box 82 

The Pavilions 

Bridgwater Road 

Bristol 

BS99 7NH 

Registrar’s shareholder helpline: 0870 703 6292 

2

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