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Objective The objective of Foresight 4 VCT plc is to provide private investors with attractive returns from a portfolio of investments in fast growing unquoted technology-based companies in the United Kingdom. It is the intention to maximise the 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. VCT Tax Benefit for Shareholders beyond 6 April 2004 To obtain VCT tax reliefs on subscriptions up to £200,000 per annum, a VCT investor must be a ‘qualifying’ individual over the age of 18 with UK taxable income. The tax reliefs for subscriptions since 6 April 2004 are: • Income tax relief of up to 40% on subscription of new shares, which is retained by shareholders if the shares are held for more than three years. This relief is available for the two tax years 2004/05 and 2005/06. • VCT dividends (including capital distributions of realised gains on investments) are not subject to income tax. • Capital gains on disposal of VCT shares are tax free, whenever the disposal occurs. Website: www.foresightvct.com Contents Summary and Chairman’s Statement 1 Investment Summary 3 Profit and Loss Account 9 Statement of Total Recognised Gains and Losses 9 Balance Sheet 10 Summarised Statement of Cashflows 11 Notes to the Interim Report 12 Shareholder Information Corporate Information
Summary ● As part of plans to raise up to £25m of new share capital, £832,000 was raised from existing shareholders in March 2005 and the share capital was restructured in May 2005 (three ordinary shares of 5p each being consolidated into one new ordinary share of 1p each). An open offer for subscription to raise up to £24m was announced on 2 September 2005. ● The Company invested £627,000 in follow-on funding rounds in three portfolio companies, namely Advanced Visual Technology (£200,000 net of a £50,000 loan repayment), Elam-T (£300,000) and EnSeal Systems (£127,000). ● Two new investments were made during the period; £200,000 in alwaysON Group (VOiP telephony services) and £200,000 in Covion Holdings (facilities management). ● During the period INCA Digital Printers was sold realising £2.3m in cash for Foresight 4 VCT, generating a return of three times the original cost of investment. ● During the period The Casella Group sold its principal operating subsidiary, enabling Casella to redeem all its bank borrowings and a significant part of its shareholder loans, including £746,000 to Foresight 4 VCT. ● Net asset value per share as at 31 August 2005 was 102.8p (compared to the equivalent 102.0p as at 28 February 2005), adjusted for the share consolidation in May 2005. ● The Company has a mature portfolio of investments which, depending on their progress, could generate further successful exits and capital dividends. ● The Company continues to exceed the 70% requirement for investment in qualifying holdings set by HM Revenue & Customs. Chairman’s Statement Peter Dicks Offers for Subscription, Share Consolidation and Change of Chairman During the six months to 31 August 2005, your Company made significant progress. In line with Foresight Venture Partners’ previously announced plans to raise further funds of up to £25 million for the Company via two offers, I am pleased to report that £832,000 was raised in March 2005 through an initial offer for subscription to existing shareholders. On 23 June 2005, as previously announced, I replaced Roger Brooke as Chairman who still remains as a Director on the Board. I should like to take this opportunity to thank Roger for all his commitment and effort to the Company since inception. On 2 September 2005, following the three for one share consolidation, the second offer was formally announced, comprising a linked offer for subscription to the investing public with Foresight 3 VCT plc, another of the five VCTs managed by Foresight Venture Partners, whereby the two companies would raise up to £48m between them. Under this linked offer, which is currently open and will remain open until April 2006 (after which 40% income tax relief may be withdrawn), subscriptions will be divided equally between each company, thereby enabling each to raise up to £24m. With such new funds, your Company will be able to start a new phase in its life by participating in Foresight Venture Partners’ strong deal flow and make new investments at a time in the economic cycle which is considered attractive. I consider this offer to be particularly important as it will increase the size of the Company, facilitate further investment and share buy backs, enhance liquidity in the Company’s shares and spread risk and running costs over a larger asset base while also increasing the prospects for dividends to recommence. In line with customary practice within the venture capital industry, it is proposed that Foresight Venture Partners be granted a performance related incentive as part of the second offer. Because of Bernard Fairman’s association with Foresight Venture Partners, your Company’s Manager, the grant of this performance related incentive is subject to shareholder approval and a circular and notice of extraordinary general meeting was recently sent to shareholders to seek such approval. This incentive relates solely to the new monies raised under this second offer and the terms are in line with current venture capital industry practice. I should like to confirm that the prior performance related incentive over the Company’s present assets will remain unchanged and unaffected by this new proposed carried interest incentive. The prospects of a number of portfolio companies continue to improve, with stronger order books and sales pipelines, most notably Footfall and EQOS. Advanced Visual Technology’s sales pipeline also continues to grow; its market leading retail space planning software is now being used by 50 major retailers Worldwide. Vectorcommand, through its US partner, continues to make good progress in the USA with its leading emergency simulation and training software. Other portfolio companies continue to experience more difficult trading conditions but are actively taking steps to improve their sales efforts or broaden their ranges of products or services in order to enhance sales growth. Investment activity During this six-month period, £627,000 was invested in follow-on funding rounds in three portfolio companies, namely Advanced Visual Technology (£200,000 net of a £50,000 loan repayment), Elam-T (£300,000) and EnSeal Systems (£127,000). In August 2005, Elam-T underwent a capital reorganisation, following which Foresight 4 VCT invested £300,000. The company raised the finance to continue the commercialisation of its promising organic light emitting display (OLED) materials, which are forecast to grow rapidly with applications in mobile phones, car stereos and MP3 players. Foresight 4 VCT plc 1
Page 1: Foresight 4 VCT plc Interim Report
Page 5 and 6: Investment Summary THE VENTURE CAPI
Page 7 and 8: Investment Summary EnSeal Systems L
Page 9 and 10: Investment Summary Reqio Ltd despit
Page 11 and 12: Profit and Loss Account for the six
Page 13 and 14: Summarised Statement of Cashflows f
Page 15 and 16: Notes to the Interim Report 8. Summ

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