Foresight Solar & Technology VCT plc - Annual Report

FORESIGHT SOLAR & TECHNOLOGY VCT PLC

Ordinary Shares Total Net Assets as at 31 March 2022: £37.1m
Ordinary Shares Net Asset Value per share as at 31 March 2022: 107.3p
Foresight Williams Technology Shares Total Net Assets as at 31 March 2022: £16.6m
Foresight Williams Technology Shares Net Asset Value per share as at 31 March 2022: 97.4p

Ordinary Shares Fund

• Net Asset Value per Ordinary Share at 31 March 2022 was 107.3p (31 March 2021: 68.9p).

• At 31 March 2022, the fund held positions in 11 UK solar assets, with a total installed capacity of 69.7MW.

• As communicated in December 2021, the Board and the Investment Manager are in the process of realising the Solar portfolio with the objective to return value to all Ordinary shareholders.

Foresight Williams Technology Shares Fund

• During the year, under the Offers for subscription for the Foresight Williams Technology Shares fund (the “FWT Shares fund”), dated 30 December 2020 and 5 January 2022, £6.8m of new funds were raised.

• During the year, the fund invested in eleven new portfolio companies as well as executed a follow on investment into one existing portfolio company.

• Since the end of the reporting period, a further £1.7m has been raised, bringing the total funds raised to £18.8m.

• Since the end of the reporting period, a further nine investments have been made, bringing total deployment to £13.1m.

Chairman’s Statement

On behalf of the Board, I am pleased to present the Annual Report and Accounts for Foresight Solar & Technology VCT Plc for the year ended 31 March 2022 and to provide you with an update on the developments affecting the Company.

As with previous recent publications, my introduction to the Annual Report and Accounts will be split between the two share classes, the Ordinary Shares and the FWT Shares, with a general section for the Company as a whole at the end.

ORDINARY SHARES

Performance and portfolio activity
The Ordinary Shares fund performed strongly during the year benefitting from robust asset availability, rising power prices throughout the period, increased short-term forward power prices and above budget inflation. This resulted in a Net Asset Value total return increase for the year of 33.4% and earnings per share of 38.3p, representing excellent financial performance well ahead of base case.

As pandemic restrictions around the world eased, industrial and commercial activity ramped up, leading to increased demand for electricity. Power prices, already at pre-pandemic high levels at the start of 2021, continued to rise during the year resulting in record high wholesale energy prices in the UK and western Europe. This was predominantly driven by the reduced supply of natural gas, coupled with low reserves, higher pent-up demand and low wind levels in northern Europe during the summer months.

The Russian invasion of Ukraine in February 2022 further pushed wholesale energy prices higher resulting in a further increase in the valuation of the underlying assets.

The Company remained well protected from downside risk in the electricity markets during the pandemic as it secured a high proportion of its revenues through advanced fixed price agreements. The Company actively seeks to maintain an element of its revenues with exposure to merchant power prices, thereby keeping some generation unhedged, a decision which proved beneficial given rising energy prices. The Company further capitalised on the current power price environment by increasing the level of future fixed rate power price agreements at prices significantly above forecasts.

There were no new acquisitions in the UK portfolio during the year. As reported in the Interim Report to 30 September 2021, the Board and the Investment Manager commenced the process of realising the solar assets towards the end of 2021 with the objective to return value to all Ordinary Shareholders. At the time of writing, the process remains ongoing with interest from several parties, and is expected to conclude in the coming months. With the recovery in long term power prices and the buoyant energy market in general, the Board is confident this remains an optimal time to conduct such a process and maximise shareholder value.

As reported in previous reports, following the Company’s long running arbitration case with the Spanish Government with respect to retrospective changes to feed-in-tariffs on its previously held Spanish assets and the subsequent award of the claim (equivalent to £2m-£2.5m, or 5.8-7.2p per Ordinary Share), the Company continues to follow up this claim in the courts. As such, the Board has not assigned any current value to the claim in the net asset value reported. In the context of the wider portfolio realisation and resulting return of proceeds to shareholders, in the event that proceeds are recovered from this claim, the Board are considering methods to return this to shareholders.

The overall performance of the Ordinary Shares remains robust and the total return since inception as at 31 March 2022 was 153.3p per Ordinary Share.

Cash and working capital
The Ordinary Shares had cash and liquid resources of £0.1m at 31 March 2022 (excluding cash held in portfolio companies who have the ability to repay interest and dividends when required).

The Company receives regular interest and loan stock payments and dividends from its underlying investments enabling it to continue to fund its dividend policy as well as meeting expenses in the ordinary course of business as they fall due.

Management fees
The annual management fee of the Ordinary Shares fund is calculated as 1.5% of Net Assets and equated to £427,000 during the year.

In the context of realisations achieved during the fund’s life and the continuing professional management of the portfolio, the Board believe that the annual management fee represents good value for investors.

Green Economy Mark

The Board is pleased that the Company continues to be classified as a Green Economy Issuer by the London Stock Exchange (“LSE”). This is an initiative launched by the LSE supporting sustainable finance on its markets. The Green Economy Mark recognises listed companies with 50% or more of revenues from environmental solutions.

FWT SHARES
The Foresight Williams Technology VCT share class (the “FWT Shares”) was launched in December 2019, and represents an exciting investment opportunity made possible by the collaboration between Foresight Group and Williams Advanced Engineering (‘WAE’), a technology and engineering services business, originally spun out of the Williams Formula One business.

The share class provides investors with the opportunity to invest in a portfolio of early-stage companies with high growth-potential, developing innovative and occasionally transformational technologies across a range of different sectors. It builds on the successful relationship that Foresight and WAE have enjoyed from their launch of the Foresight Williams Technology EIS Fund (the ‘EIS fund’) in November 2016, which has raised over £50 million to date and has made over thirty investments across a range of different sectors so far, and recently completed its first exit achieving a gross return of over 16x.

Fundraising and share issues
The Offers for subscription, dated 30 December 2020 and relaunched on 5 January 2022, are each up to £20 million (with an overallotment facility for up to an additional £10 million) through the issue of FWT Shares. During the year, across both Offers, 7.0 million FWT Shares were allotted, raising a further £6.8m, bringing the total funds raised to over £17m.

Post year end, a further 1.7 million FWT Shares were allotted, increasing the total funds raised to £18.8m.

Portfolio and deal activity
The FWT Shares fund had a busy year deploying the funds raised, completing eleven new investments and one follow-on investment costing £6.3m and £0.8m respectively.

Post year end, the FWT Shares made investments in seven new companies and two follow on investments, bringing total deployment to £13.1m. Further details of these deals are included in the Investment Manager’s review.

The Board and the Investment Manager are confident that a number of new and follow-on investments can be achieved this year, particularly with the investment activity noted above. Details of each of these new and existing portfolio companies can be found in the Investment Manager’s Review. The Investment Manager continues to see a strong pipeline of potential investments sourced through its regional networks and well developed relationships with advisers and the SME community; however, it is also focused on supporting the existing portfolio through the pandemic. Following the fundraising over the last couple of years as well as the fundraising for the ongoing January 2022 offer, the Company is in a position to fully support the portfolio, where appropriate, and exploit potential attractive investment opportunities.

Management fees
The annual management fee of the FWT Shares fund is calculated as 2.0% of Net Assets and equated to £265,000 during the year.

COMPANY

Annual General Meeting
The Company’s Annual General Meeting will take place on 27 September 2022 at 12.30pm and we look forward to meeting as many of you as possible in person, providing rules permit. Please refer to the formal notice on pages 92 to 95 of the Annual Report and Accounts for further details. We would encourage those of you who are unable to attend to submit your votes by proxy ahead of the deadline of 1.00pm on 23 September 2022 and to forward any questions by email to InvestorRelations@foresightgroup.eu in advance of the meeting.

Outlook
The Board continue to monitor the events unfolding in Ukraine and the impact on the Ordinary Shares portfolio while continuing to optimise the assets ahead of the proposed realisation and return of funds to Ordinary Shareholders.

The Company will also continue to raise new funds in the FWT Shares fund and seek appropriate qualifying investments for this share class.

Ernie Richardson
Chairman

17 August 2022

Investment Manager’s Review – Ordinary Shares

Portfolio Summary and Performance
Over the past year, the Investment Manager has focused on delivering positive operational performance from the assets within the portfolio while preparing the portfolio for sale. The portfolio performed well with production above budget aided by high levels of solar irradiation which was 4.1% above forecast for the year.

The assets in the portfolio achieved a strong performance during the year despite short production outages occurring at several sites due to grid outages which particularly affected the largest site in the portfolio, Turweston.

Unavailability due to technical issues related to the parks themselves were few as expected in such a mature portfolio. Further details on performance of the individual assets are included on pages 12 to 17. The operation of the assets throughout the year continued to be largely unaffected by issues arising from the COVID-19 pandemic.

There were no acquisitions or disposals of sites during the year.

Market Update
Power Prices
The rebound in economic activity early in the year saw power prices return to pre-pandemic levels through spring and summer 2021. Global gas prices continued to rise throughout autumn causing power prices to rise across much of the world. In the UK, this coincided with an unusually large amount of generating capacity offline after summer and the lowest wind resource seen for many years throughout winter. The combined effect of these factors saw record power prices in the UK during the second half of the year – price levels that have only slightly ebbed at the time of writing due to continued tightness in gas supply exacerbated by the war in Ukraine.

Inflation
Aside from power prices, general measures of inflation rose to levels not seen for decades. One such measure, the Retail Price Index (“RPI”), is used to escalate the base price for ROCs, the green certificates that the projects in this portfolio benefit from. This inflation, and expectations of it continuing for at least a short period, have had a positive effect on the valuation of the portfolio’s assets.

Green Investment

Governments in the UK and across Europe continue to remain supportive of the renewables sector, such support growing in the wake of the pandemic and moreso following the commencement of the war in Ukraine. While this fund cannot invest further into new solar parks, such strong messaging from governments does appear to steer more capital towards investing in renewables and hence be supportive of valuations for existing asset portfolios.

Revenues
Revenues within the portfolio exceeded forecast by 40% during the year. This was primarily driven by high power prices on top of strong operating performance. The fund had a portion of power prices fixed for the year with some exposure left to market power prices.

Approximately half of revenue from the portfolio’s investments came from subsidies (predominantly under the ROC scheme) and other green benefits. These revenues are directly and explicitly linked to inflation for 20 years from the accreditation date under the ROC regime and subject to RPI inflationary increases applied by Ofgem in April of each year. Thus the extraordinary increases in RPI during the year did not affect the ROC revenues achieved in the year but have increased the ROC price currently being received and that which will be applicable for the remainder of the life of the ROC regime.

The average power price achieved during the year was £96.84 per MWh, representing the highest power prices ever seen in the UK. The average monthly price peaked in March 2022 at £156.93 per MWh.

There remains volatility and uncertainty about market factors affecting power prices in the short to medium term. The Investment Manager continues to monitor these to seek the best opportunities to enter into short term price fixing arrangements when they arise. A majority of the portfolio’s power output is contracted at fixed power prices for the year ahead at levels more than double those of previous years. A combination of these prices and the high level of RPI ensured substantially higher than forecast revenues for the year ahead.

Valuation
Market valuations for solar parks are typically based on assessments of future cashflow generation over the life of the projects. Rising inflation and rising power price forecasts have been very supportive of higher market valuations for the fund’s assets. Increased investor appetite for the assets has also had a positive impact on valuations. These factors as well as strong operating performance and cash generation have led to rising valuations for the Ordinary Shares fund overall.

Portfolio Sale
In keeping with the intentions set out over the two years since the last tender offer, the portfolio is being prepared for sale. Given the strong growth in asset value, the Board and the Investment Manager considers that 2022 remains an optimum time to pursue a sale of this mature portfolio. A sale process was commenced earlier this year and is ongoing with interest from several parties. It is anticipated that a sale will be concluded by September 2022 and the proceeds returned to investors shortly thereafter.

Sustainable Investing
Sustainability lies at the heart of the Manager’s approach, and the Manager believes that investing responsibly, seeking to make a positive social and environmental impact, is critical to its long-term success. These factors have been integrated into its investment and asset management processes. Foresight continues to refine its evaluation of the sustainability considerations of all of its investments so as to demonstrate more comprehensively the environmental benefits and social contribution of all assets managed by Foresight, including this solar portfolio.

Land Management
Compliance audits have been carried out on all UK sites held by portfolio companies, confirming that they are in line with government permits and conditions. Foresight Group remains a working partner of the Solar Trade Association’s Large Scale Asset Management Working Group. Foresight is a signatory to the Solar Farm Land Management Charter and seeks to ensure that the solar farms operated by all of our portfolio companies are managed in a manner that maximises the agricultural, landscaping, biodiversity and wildlife potential, which can also contribute to lowering maintenance costs and enhancing security. As such, Foresight Group regularly inspects sites and advises portfolio companies to develop site specific land management and biodiversity enhancement plans to secure long term gains for wildlife and ensure that the land and environment are maintained to a high standard. This includes:

• • Management of grassland areas within the security fencing to promote wildflower meadows and sustainable sheep grazing

  • Planting and management of hedgerows and associated hedge banks

  • Management of field boundaries between security fencing and hedgerows

  • Sustainable land drainage and pond restoration

  • Installation of insect hotels and reptile hibernacula

  • Installation of boxes for bats, owls and kestrels

  • Installation of beehives by local beekeepers.

Most solar parks are designed to enable sheep grazing and the remaining plants are investigated for alterations to ensure that the farmland on which the solar assets are located can remain useful in agricultural production, which is a frequent desire of local communities.

Examples of sustainable land management activities across the portfolio include:

• • Free-range chickens grazing at the New Kaine site

  • The grounds of Turweston continue to be managed as wildflower meadow

  • Beehives are on site at Turweston

  • Bird and bat boxes have been installed at Basin Bridge

  • At Turweston additional gates with sufficient gaps at the lower edge were installed to allow for safe wildlife passage across the site

  • Trees and hedgerows have been planted, and hedge infill work undertaken at Dove View and Hurcott.

Social and Community Engagement
Foresight Group actively seeks to engage with the local communities around the solar assets operated by our portfolio companies and regularly attends parish meetings to encourage community engagement and promote the benefits of their solar assets.

Health and Safety
Health and safety audits have been carried out at all assets during the period and there have been no reportable or material health and safety incidents. Safety, Health, Environment and Quality (“SHEQ”) performance and risk management are a top priority at all levels for Foresight Group. To further improve the management of SHEQ risks, reinforce best practice and ensure non-compliance with regulations is avoided, Foresight Group continues to work with independent health and safety consultants who regularly visit the assets operated by our portfolio companies to ensure they not only meet, but exceed, industry and legal standards. The consultants have confirmed that all sites are compliant with applicable regulations.

Outlook
It has been another positive year for the Ordinary Shares fund with strong performance from the assets and, combined with supportive external factors, this has led to rising valuations for the portfolio. The outlook continues to be cautiously optimistic that recent valuation increases can be maintained. Power prices remain at elevated levels and the macro drivers to this do not appear to be dissipating at the time of writing. With interest rates rising there is a likelihood of declining economic growth and for inflation to return to more usual levels. Our valuations assume that inflation is swiftly brought under control and that power prices remain high in the near term. On balance however, given the tenure of this fund, it remains appropriate to pursue a sales process. In the meantime, the Company will continue to focus on delivering strong operational performance across the portfolio.

Foresight Group LLP
Investment Manager

17 August 2022

Investment Manager’s Review – Foresight Williams Technology Shares

Summary
Between its launch on 20 December 2019 and the end of the reporting period, the FWT Shares fund has raised £17.1 million. The Offer provides investors with the opportunity to invest in a portfolio of early-stage companies with high growth-potential, developing innovative and occasionally transformational technologies across a range of different sectors. As at 31 March 2022, the FWT fund had made 15 investments totalling £8.6 million:

Kognitiv Spark: a software company that provides 3D data to support field service workers in remote locations.

Additive Manufacturing Technologies (AMT): a manufacturer of systems that automate the postprocessing of 3D printed parts e.g. unpacking, surface smoothing, sealing and colouring.

VividQ: a technology company enabling the next generation of holographic displays.

Zero Point Motion: a developer of a chip-scale unit for ultraprecise motion-tracking and indoor navigation.

Refeyn: a University of Oxford spin-out developing a new generation of biomolecule analysis instrumentation based on weighing molecules using light, known as mass photometry.

Previsico: a University of Loughborough spin-out providing a market-leading flood forecasting and warning software platform.

Rovco: a sub-sea computer vision and robotics technology company focused on marine surveys in offshore wind and oil field decommissioning.

dRISK: an AI company accelerating the training of autonomous vehicles on how to avoid unexpected, real-world “edge case” or hazardous scenarios.

Cambridge GaN Devices: a developer of a new generation of gallium nitride semiconductor power devices.

Audioscenic: a University of Southampton spin-out applying computer vision software to create 3D immersive audio experiences initially in consumer soundbars.

Insphere: a provider of in-process measurement systems that speed up the calibration and enhance the accuracy of automated production lines.

Oxford Space Systems: a satellite component company developing stowable and deployable booms and antennas.

Forefront RF: a manufacturer of next generation RF modules, small electrical devices that transmit and/ or receive radio signals between devices, reducing component size, cost and supply chain waste, and enabling geographically agnostic smartphones.

Machine Discovery: a University of Oxford spin-out developing machine learning technology that simplifies, automates and accelerates highly complex computer simulations.

Vector Photonics: a University of Glasgow spin-out commercialising the next generation of semiconductor laser devices.

Post year end acquisitions
Subsequent to the year end, the FWT fund has made seven new investments described further below, and two follow on investments into Cambridge GaN Devices Limited and Forefront RF Limited. This brings total deployment to £13.1m.

Nebuflow
Nebuflow is developing surface acoustic wave nebulisers to enable the delivery of next-generation respiratory pharmaceuticals and improve the efficiency of well-established treatments. Nebulisers are used by patients with Cystic Fibrosis and Chronic Obstructive Pulmonary Disorder as they can deliver drugs directly into the patients’ lungs. However, commercially available nebulisers are inefficient, bulky and unsuitable for use with the next generation of pharmaceuticals, which are already reaching clinics. Nebuflow’s patented technology overcomes these issues providing a tightly controlled distribution of droplet sizes using a technique compatible with new pharmaceuticals based around RNA and antibodies, known as biologics. The nebuliser device housing is a critical element to be developed and WAE has expertise in computational fluid dynamic simulations, a skillset which will be required to optimise the housing design.

Salvalco
Salvalco develops innovative valve systems, called Eco- Valve, based on prior research by the Spray Research Group at Salford University. The Eco-Valve technology allows eco-friendly inert gases such as nitrogen or simple fresh air to be used as propellants in aerosol sprays, thus enabling a more sustainable and safer alternative to conventional aerosol propellants.

Salvalco has subsequently developed a family of valves using this technology to pressurise the can without compromising user experience. The company has secured a significant investment from Beiersdorf, a leading provider of skincare products, including brands such as NIVEA, Eucerin and La Prairie and launched a new and eco-friendly NIVEA deodorant.

Opsydia
Opsydia has developed a laser-based technology that rapidly and accurately performs sub-surface marking of diamonds and other gemstones. As with many raw materials markets, the global gemstone market is under increasing pressure to provide greater transparency and full traceability. Opsydia’s sub-surface inscription marks cannot be tampered with or removed without destroying the value of the stone, providing diamond producers with a robust and immutable method of connecting a physical stone with its certificate of origin, and offering high-end brands the means to differentiate their products. Opsydia’s core technology, licensed from the University of Oxford, uses an optical system to pre-correct for the expected aberration of the laser that occurs when it passes through the surface of the diamond. The technology has now been commercialised and the company already sells the marking systems to several international diamond producers.

Open Bionics
Open Bionics is a designer and manufacturer of the world’s first clinically approved 3D-printed bionic limbs with multi-grip functionality and empowering aesthetics. The company’s core product is the Hero Arm, a life-changing myoelectric prosthesis for below-elbow amputee adults and children aged eight and above. Open Bionics’ goal is to open the bionics market to a much wider audience by offering an affordable product made using the unique approach of 3D printing and digital scanning. The key enabling technology behind the company’s prosthetics is its proprietary automation software that generates bespoke designs for bionic arm sockets and frames from a 3D scan of a user’s remaining arm. It also tailors the designs to be 3D-printable, while maintaining socket comfort and functionality for the user, and allowing for personalised and aesthetically appealing designs.

Mirico
Mirico is one of the top emerging climate tech companies in the PwC Future 50 report published earlier in the year. The company provides ultra-high sensitivity gas detection and quantification services in the most challenging weather conditions. Mirico’s unique Laser Dispersion Spectroscopy technology for gas analysis is covered by six patents, five licensed from Rutherford Appleton Laboratory and one owned by Mirico. By providing reliable continuous monitoring of greenhouse gas emissions across a range of industries and applications globally, Mirico addresses the significant increase in the need for organisations to demonstrate progress towards net zero goals and accelerate the uptake and efficiency of climate change monitoring.

Novosound
Novosound is a technology spinout from the University of West of Scotland that has developed a novel technology for use in ultrasound sensors. The Company designs and manufactures a thin-film core material that is flexible, extreme temperature resistant, lightweight, low profile, compact, and capable of producing high resolution images. Novosound’s ultrasound solutions are used in a variety of applications in industrial, medical, dental, and veterinary industry settings.

Living Optics
Living Optics is a University of Oxford spin-out commercialising next generation hyperspectral imaging technology. The company’s hyperspectral camera system promises to capture higher resolution images, faster, at lower cost and in a more compact form factor than incumbent camera systems. The technology is attracting strong interest from potential customers in defence and industrial applications and prototypes cameras have been successfully deployed in paid trials.

Fundraising
The Offer, made possible through an innovative collaboration between Foresight Group and Williams Advanced Engineering Ltd, continues to build positive momentum in the market. Since the end of the year to 31 March 2022, a further £1.7 million has been raised, bringing the total raised to £3.5 million in the current fund raising round and £18.8 million overall.

Climate Change Statement
The Investment Manager has a long-term investing vision and its strategy aligns with the UN’s Sustainable Development Goals and the decarbonisation targets set out in the Paris Agreement of 2015. As such, taking actions to mitigate the risks posed by climate change, whilst also investing to generate commercial returns for our investors, must be done hand in hand. The Manager has been a signatory to the United Nations-backed Principles for Responsible Investment (“PRI”) since 2013. PRI is a globally recognised voluntary framework concerned with the incorporation of ESG considerations into the investment decision-making process. It provides a basis for potential and existing investors to judge the quality of a company’s ESG processes and positioning within an industry sector. In 2020, the Manager received an “A+” for Strategy and Governance, and “A” for Private Equity and Infrastructure investments.

The Board supports the Manager’s views on climate change and ESG and its vigorous process in the evaluation of an asset’s environmental and social impact during due diligence and thereafter. For each material risk identified during due diligence, a mitigation plan is proposed in the investment submission and these actions form part of each portfolio company’s “100-day plan” post-investment.

From an environmental perspective, analysis relating to the implementation of good industry practice in limiting and mitigating the potentially adverse environmental impact of a company’s operations has four principal components:

• • Environmental policy and track record

  • Energy and resource usage and environmental impact

  • Environmental impact of products and services

  • Environmental performance improvements

Regular monitoring post-investment ensures that standards are maintained in respect of ESG issues where there is a change in either the regulatory or operating environment or the composition of the management team.

Pipeline
The Investment Manager has a strong pipeline covering new deals and EIS portfolio follow-ons. At the time of writing, three deals had passed the Investment Manager’s final Investment Committee stage and were nearing completion. On three further deals, terms and exclusivity had been agreed and, subject to Investment Committee approval, were progressing to due diligence.

Foresight Group LLP
Investment Manager
17 August 2022

Unaudited Non-Statutory Analysis of the Share Classes

Income Statement
for the year ended 31 March 2022
	Ordinary Shares			FWT Shares
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment holding gains	—	14,323	14,323	—	643	643
Realised losses on investments	—	(1,121)	(1,121)	—	—	—
Income	901	—	901	1	—	1
Investment management fees	(107)	(320)	(427)	(66)	(199)	(265)
Other expenses	(332)	—	(332)	(129)	—	(129)
Profit/(loss) before taxation	462	12,882	13,344	(194)	444	250
Taxation	—	—	—	—	—	—
Profit/(loss) after taxation	462	12,882	13,344	(194)	444	250
Profit/(loss) per share	1.3p	37.0p	38.3p	(1.4)p	3.2p	1.8p

Balance Sheet
at 31 March 2022
				Ordinary Shares		FWT Shares
				£'000		£'000
Fixed assets
Investments held at fair value through profit or loss				37,035		9,196
Current assets
Debtors				355		300
Money market securities and other deposits
Cash and cash equivalents				60		7,154
				415		7,454
Creditors
Amounts falling due within one year				(339)		(28)
Net current assets				76		7,426
Net assets				37,111		16,622
Capital and reserves:
Called-up share capital				346		171
Share premium				—		13,998
Capital redemption reserve				208		—
Distributable reserve				36,046		2,066
Capital reserve				(13,951)		(256)
Revaluation reserve				14,462		643
Equity shareholders' funds				37,111		16,622
Net asset value per share				107.3p		97.4p

At 31 March 2022 there was an inter-share debtor/creditor of £213,000 which has been eliminated on aggregation.

Unaudited Non-Statutory Analysis of the Share Classes

Reconciliations of Movements in Shareholders’ Funds
for the year ended 31 March 2022

                                                                               

Ordinary Shares	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2021	351	—	203	35,995	(12,510)	139	24,178
Expenses in relation to prior year share issues	—	—	—	(7)	—	—	(7)
Repurchase of shares	(5)	—	5	(404)	—	—	(404)
Realised losses on disposal of investments	—	—	—	—	(1,121)	—	(1,121)
Investment holding gains	—	—	—	—	—	14,323	14,323
Management fees charged to capital	—	—	—	—	(320)	—	(320)
Revenue profit for the year	—	—	—	462	—	—	462
As at 31 March 2022	346	—	208	36,046	(13,951)	14,462	37,111
FWT Shares	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2021	100	7,515	—	2,260	(57)	—	9,818
Share issues in the year	71	6,682	—	—	—	—	6,753
Expenses in relation to share issues	—	(194)	—	—	—	—	(194)
Expenses in relation to prior year share issues	—	(5)	—	—	—	—	(5)
Investment holding gains	—	—	—	—	—	643	643
Management fees charged to capital	—	—	—	—	(199)	—	(199)
Revenue loss for the year	—	—	—	(194)	—	—	(194)
As at 31 March 2022	171	13,998	—	2,066	(256)	643	16,622

 Income Statement for the year ended 31 March 2022

	Year ended 31 March 2022			Year ended 31 March 2021
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Investment holding gains/(losses)	—	14,966	14,966	—	(17,500)	(17,500)
Realised losses on investments	—	(1,121)	(1,121)	—	—	—
Income	902	—	902	17,667	—	17,667
Investment management fees	(173)	(519)	(692)	(114)	(340)	(454)
Interest payable	—	—	—	(71)	—	(71)
Other expenses	(461)	—	(461)	(478)	—	(478)
Profit/(loss) before taxation	268	13,326	13,594	17,004	(17,840)	(836)
Taxation	—	—	—	—	—	—
Profit/(loss) after taxation	268	13,326	13,594	17,004	(17,840)	(836)
Profit/(loss) per share:
Ordinary Share	1.3p	37.0p	38.3p	48.4p	(50.2)p	(1.8)p
FWT Share	(1.4)p	3.2p	1.8p	(3.5)p	(1.5)p	(5.0)p

The total column of this statement is the profit and loss account of the Company and the revenue and capital columns
represent supplementary information.

All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were
acquired or discontinued in the year.

The Company has no recognised gains or losses other than those shown above, therefore no separate statement of
comprehensive income has been presented.

Reconciliation of Movements in Shareholders’ Funds
  

Year ended 31 March 2022	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve*	Capital reserve*	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2021	451	7,515	203	38,255	(12,567)	139	33,996
Share issues in the year	71	6,682	—	—	—	—	6,753
Repurchase of shares	(5)	—	5	(404)	—	—	(404)
Expenses in relation to share issues	—	(194)	—	—	—	—	(194)
Expenses in relation to prior year share issues	—	(5)	—	(7)	—	—	(12)
Realised losses on disposal of investments	—	—	—	—	(1,121)	—	(1,121)
Investment holding gains	—	—	—	—	—	14,966	14,966
Management fees charged to capital	—	—	—	—	(519)	—	(519)
Revenue profit for the year	—	—	—	268	—	—	268
As at 31 March 2022	517	13,998	208	38,112	(14,207)	15,105	53,733
Year ended 31 March 2021	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve*	Capital reserve*	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2020	365	8,101	200	12,845	(12,227)	17,639	26,923
Share issues in the year	89	9,062	—	—	—	—	9,151
Expenses in relation to share issues	—	(277)	—	—	—	—	(277)
Expenses in relation to prior year share issues	—	(8)	—	(5)	—	—	(13)
Repurchase of shares	(3)	—	3	(243)	—	—	(243)
Cancellation of share premium	—	(9,363)	—	9,363	—	—	—
Investment holding losses	—	—	—	—	—	(17,500)	(17,500)
Dividends paid	—	—	—	(709)	—	—	(709)
Management fees charged to capital	—	—	—	—	(340)	—	(340)
Revenue profit for the year	—	—	—	17,004	—	—	17,004
As at 31 March 2021	451	7,515	203	38,255	(12,567)	139	33,996

* Total distributable reserves at 31 March 2022 were £23,905,000 (2021: £25,688,000).
 Balance Sheet at 31 March 2022                                   Registered Number: 07289280

	As at 31 March 2022 £’000	As at 31 March 2021 £’000
Fixed assets
Investments held at fair value through profit or loss	46,231	25,352
Current assets
Debtors	442	1,057
Cash and cash equivalents	7,214	8,076
	7,656	9,133
Creditors
Amounts falling due within one year	(154)	(489)
Net current assets	7,502	8,644
Net assets	53,733	33,996
Capital and reserves
Called-up share capital	517	451
Share premium	13,998	7,515
Capital redemption reserve	208	203
Distributable reserve	38,112	38,255
Capital reserve	(14,207)	(12,567)
Revaluation reserve	15,105	139
Equity shareholders’ funds	53,733	33,996
Net asset value per share:
Ordinary Share	107.3p	68.9p
FWT Share	97.4p	98.0p

 Cash Flow Statement for the year ended 31 March 2022

	Year ended 31 March 2022 £’000	Year ended 31 March 2021 £’000
Cash flow from operating activities
Deposit and similar interest received	1	1
Investment management fees paid	(676)	(435)
Secretarial fees paid	(168)	(172)
Other cash (payments)/receipts	(230)	43
Net cash outflow from operating activities	(1,073)	(563)
Cash flow from investing activities
Purchase of investments	(6,361)	(1,441)
Investments pending completion	—	(796)
Net proceeds on sale of investments	110	759
Investment income received	361	406
Net cash outflow from investing activities	(5,890)	(1,072)
Cash flow from financing activities
Proceeds of fund raising	6,699	9,065
Expenses of fund raising	(194)	(204)
Repurchase of own shares	(404)	(243)
Equity dividends paid	—	(709)
Net cash inflow from financing activities	6,101	7,909
Net (outflow)/inflow of cash in the year	(862)	6,274
Reconciliation of net cash flow to movement in net funds
(Decrease)/Increase in cash for the year	(862)	6,274
Net cash at start of year	8,076	1,802
Net cash at end of year	7,214	8,076

Analysis of changes in net debt
	At 1 April 2021 £’000	Cash Flows £’000	Other non-cash changes £’000	At 31 March 2022 £’000
Cash and cash equivalents
Cash	8,076	(862)	—	7,214

Notes to the Accounts

1.     The audited Annual Financial Report has been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 March 2022.  All investments held by the Company are classified as ‘fair value through the profit and loss’. Unquoted investments have been valued in accordance with IPEVC guidelines, as updated in December 2018 with further COVID-19 guidance issued in March 2020.

2.    These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 March 2022, which were unqualified and did not contain any statements under S498(2) or S498(3) of Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 31 March 2022 including an unqualified audit report and containing no statements under the Companies Act 2006 will be delivered to the Registrar of Companies in due course.

3.    Copies of the Annual Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG and can be accessed on the following website: www.foresightgroup.eu

4.    Net asset value per share

Net asset value per Ordinary Share is based on net assets at the year end of £37,111,000 (2021: £24,178,000) and on 34,593,623 Ordinary Shares (2021: 35,109,032), being the number of Ordinary Shares in issue at that date.

Net asset value per FWT Share is based on net assets at the year end of £16,622,000 (2021: £9,818,000) and on 17,058,716 FWT Shares (2021: 10,021,408), being the number of FWT Shares in issue at that date.

5.    Return per share

	Year ended 31 March 2022		Year ended 31 March 2021
	Ordinary Shares £'000	FWT Shares £’000	Ordinary Shares £'000	FWT Shares £’000
Total profit/(loss) after taxation	13,344	250	(645)	(191)
Total profit/(loss) per share (note a)	38.3p	1.8p	(1.8)p	(5.0)p
Revenue profit/(loss) from ordinary activities after taxation	462	(194)	17,139	(135)
Revenue profit/(loss) per share (note b)	1.3p	(1.4)p	48.4p	(3.5)p
Capital gain/(loss) from ordinary activities after taxation	12,882	444	(17,784)	(56)
Capital gain/(loss) per share (note c)	37.0p	3.2p	(50.2)p	(1.5)p
Weighted average number of shares in issue during the year	34,850,621	13,566,526	35,414,680	3,831,368

Notes:
a) Total profit/(loss) per share is total profit/(loss) after taxation divided by the weighted average number of shares in issue during the year.
b) Revenue profit/(loss) per share is revenue profit/(loss) after taxation divided by the weighted average number of shares in issue during the year.
c) Capital gain/(loss) per share is capital gain/(loss) after taxation divided by the weighted average number of shares in issue during the year.

6.    The Annual General Meeting will be held at 12.30pm on 27 September 2022 at the offices of Foresight Group, The Shard, 32 London Bridge Street, London, SE1 9SG. Please refer to the formal notice on page 92 of the Annual Report and Accounts for further details in relation to this year’s meeting.

7.    Income

	Year ended 31 March 2022 £’000	Year ended 31 March 2021 £’000
Dividends received	484	233
Loan stock interest	417	442
Bank interest	1	1
Release of loans payable*	—	16,991
	902	17,667

*Release of loans payable in the prior year relates to the release of the Company’s loan liability from its wholly owned subsidiary, Youtan Limited and associated accrued interest. The release had an equal and opposite effect on the carrying value of Investments, resulting in a nil impact for the NAV of the Company.

8.    Investments held at fair value through profit or loss

	Ordinary Shares Fund £’000	FWT Shares Fund £’000	Company £’000
Book cost at 1 April 2021	23,772	1,441	25,213
Investment holding gains	139	—	139
Valuation at 1 April 2021	23,911	1,441	25,352
Movements in the year:
Purchases at cost*	45	7,112	7,157
Disposal proceeds	(123)	—	(123)
Realised losses	(1,121)	—	(1,121)
Investment holding gains	14,323	643	14,966
Valuation at 31 March 2022	37,035	9,196	46,231
Book cost at 31 March 2022	22,573	8,553	31,126
Investment holding gains	14,462	643	15,105
Valuation at 31 March 2022	37,035	9,196	46,231

*Purchases at cost for the Ordinary Shares represents costs incurred in relation to the ongoing disposal of the Ordinary Shares portfolio.

9.    Transactions with the Investment Manager

Foresight Group LLP was appointed as Investment Manager in January 2020 and earned fees of £692,000 in the year ended 31 March 2022 (2021: £454,000). No performance fee was paid or accrued for the year (2021: nil).

Foresight Group LLP is the Company Secretary (appointed in November 2017) and received accounting and company secretarial services fees of £169,000 (2021: £169,000), during the year.

At the balance sheet date there was £49,000 (2021: £30,000) due from Foresight Group LLP. No amounts have been written off in the year in respect of debts due to or from the Investment Manager.

END