FORESIGHT 4 VCT PLC - Foresight Group

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Investment Manager The Company’s investment manager is Foresight, the same investment manager as for the Target VCTs. Foresight is a private limited company incorporated and registered in Guernsey on 12 February 2010 with registered number 51471. Foresight’s registered office and principal place of business is at La Plaiderie House, La Plaiderie, St Peter Port, Guernsey GY1 1WF (telephone 01481 702 411). Foresight is authorised and regulated by the Guernsey Financial Services Commission to provide investment management services. The principal legislation under which Foresight operates is the provisions of the Companies (Guernsey) Law 2008 (and regulations made thereunder). Foresight has, as is also the case with the Target VCTs, appointed Foresight Group to provide investment advisory services to Foresight for the purposes of fulfilment of the obligations to the Company and the Target VCTs. Foresight GP’s registered office and principal place of business is at ECA Court, 24-26 South Park, Kent TN13 1DU (telephone 01732 471 800). Foresight GP is authorised and regulated by the Financial Services Authority to provide investment management services. The principal legislation under which Foresight GP operates is the provisions of the Limited Liability Partnerships Act 2000 and the applicable provisions of CA 2006 (and relevant regulations made thereunder). Foresight GP (through Foresight Fund Managers) provides administration services to all of the Companies. It is expected that all of the Companies will novate the provision of administration services to Foresight once it has authorisation to carry out such services from the Guernsey Financial Services Commission. Foresight will continue to delegate the provision of administration services to Foresight Fund Managers (via Foresight GP) once the provision of administration services are novated to Foresight. Foresight and Foresight GP (through Foresight Fund Managers), as applicable, will continue to provide investment management services and administration services to the Enlarged Company as is currently in place for the Company now. Further details on Foresight and the substantial experience of its team is set out in Part IV of this document. Investment Policy The Company will seek Shareholder approval to change its investment policy at the General Meeting. The proposed change will provide for a more generic policy of investing in unquoted companies and to remove references to specific VCT investment requirements which are continually changing. Incorporating these VCT references directly into the investment policy could be unduly restrictive. The proposed change to the investment policy will also better encompass the investments which are intended to be acquired from the Target VCTs as part of the merger. It will also cover both the Ordinary Shares fund and C Shares fund. The existing objective is to provide private investors with attractive returns from a portfolio of investments in fast-growing unquoted companies in the UK, with the intention being to maximise tax-free income which will be applied to each fund. In addition, the proposed revised investment policy will also allow the Company to take advantage of the opportunities which Foresight is seeing in the wider unquoted market. This proposed change to the investment policy is not expected to adversely impact on the risk profile of the Company and/or its investments. The change to the investment policy is not subject to any part of the merger being effected. Each Scheme is, however, subject to the approval by Shareholders of the change to the investment policy as it will immediately apply to the funds brought across as part of the merger process. The existing investment policy and the proposed investment policy is set out in full below: Existing Investment Policy The investment manager (Foresight) will target UK unquoted companies which depend to a significant extent on the application of scientific and technological skills or knowledge, or whose activities embrace a significant technology component as a major source of competitive advantage. Investment securities The Company invests in a range of securities including, but not limited to, ordinary and preference shares, loan stock, convertible securities, and fixed-interest securities as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stock, while AIM investments are primarily held in ordinary shares. Pending investment in unquoted and AIM-listed 30
securities, cash is primarily held in an interest bearing money market open ended investment company (OEIC). UK companies Investments are primarily made in companies which are substantially based in the UK, although many of these investees will trade overseas. The companies in which investments are made must have no more than £15 million of gross assets at the time of investment (or £7 million if the funds being invested were raised after 5 April 2006) to be classed as a VCT qualifying holding. VCT regulation The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the Company may not invest more than 15% of its investments in a single company and must have at least 70% by value of its investments throughout the period in shares or securities comprised in Qualifying Investments, of which 30% by value in aggregate across the portfolio must be ordinary shares which carry no preferential rights (although only a minimum of 10% needs to be in ordinary shares on a per investment basis). Asset mix The Company aims to be significantly invested in growth businesses subject always to the quality of investment opportunities and the timing of realisations. Any uninvested funds are held in cash and interest bearing securities. It is intended that the significant majority of any funds raised by the Company will be invested in VCT qualifying investments. Risk diversification and maximum exposures Risk is spread by investing in a number of different businesses within different industry sectors using a mixture of securities. The maximum amount invested in any one company is limited to £1 million in a fiscal year (or, if lower, 15% of the portfolio at the time of investment) and generally no more than £2.5 million at cost is invested in the same company (or, if lower, 15% of the portfolio at the time of investment). The value of an individual investment is expected to increase over time as a result of trading progress and a continuous assessment is made of its suitability for sale. Investment style Investments are selected in the expectation that the application of private equity disciplines, including an active management style for unquoted companies through the placement of an Investor Director on investee company boards, will enhance value. Co-investment The Company aims to invest in larger, more mature, unquoted and AIM companies and to achieve this it invests alongside the other VCTs managed by Foresight and the Foresight Sustainable UK Investment Fund. As such, at the time of initial investment, the combined investment can currently total up to a maximum of £6.0 million for unquoted and for AIM investees. Borrowing powers The Company’s Articles permit borrowing to give a degree of investment flexibility. The Company’s policy is not to use borrowing. Proposed Investment Policy The Company will target UK unquoted companies which it believes will achieve the objective of producing attractive returns for Shareholders. Investment securities The Company invests in a range of securities including, but not limited to, ordinary and preference shares, loan stocks, convertible securities, and fixed-interest securities as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stock, while AIM investments are primarily held in ordinary shares. Pending investment in unquoted and AIM listed securities, cash is primarily held in interest-bearing money market open ended investment companies (OEICs) as well as in a range of non-qualifying companies. Non qualifying investments may include 31
Page 1 and 2: THIS DOCUMENT IS IMPORTANT AND REQU
Page 3 and 4: SUMMARY This summary should be read
Page 5 and 6: Summary Investment Objective and In
Page 7 and 8: RISK FACTORS Shareholders and prosp
Page 9 and 10: EXPECTED TIMETABLES EXPECTED TIMETA
Page 11 and 12: Directors Philip Henry Stephens (Ch
Page 13 and 14: ‘‘Conversion’’ the conversi
Page 15 and 16: ‘‘London Stock Exchange’’ L
Page 17 and 18: PART I MERGER OF THE COMPANY AND TH
Page 19 and 20: Cost Savings The Board and the boar
Page 21 and 22: However, the purchase of their hold
Page 23 and 24: New C Shares to be issued to Foresi
Page 25 and 26: D = the number of Acuity 3 Shares i
Page 27 and 28: As at 30 September 2011, the unaudi
Page 29: The Board of Directors The Board of
Page 33 and 34: Dividend Policy The dividend policy
Page 35 and 36: Custodian Foresight Fund Managers (
Page 37 and 38: Gary Fraser Is a chartered accounta
Page 39 and 40: PART V FINANCIAL INFORMATION ON THE
Page 41 and 42: Description 2010 Annual Report Obje
Page 43 and 44: Opinion In our opinion: . the pro f
Page 45 and 46: PART VII INVESTMENT PORTFOLIOS AND
Page 47 and 48: Acuity 3 Value (£’000s) % Invest
Page 49 and 50: Trilogy Communications Limited Acco
Page 51 and 52: Connect2media Limited Dormant accou
Page 53 and 54: PART IX TAX POSITION OF THE COMPANY
Page 55 and 56: PART X ADDITIONAL INFORMATION 1. TH
Page 57 and 58: (d) the authority conferred by this
Page 59 and 60: days immediately preceding the day
Page 61 and 62: including any corporation present b
Page 63 and 64: 3.7 Directors (i) There shall be no
Page 65 and 66: the Company is to be dealt with as
Page 67 and 68: 4.8 The Directors are currently or
Page 69 and 70: adviser or manager in respect of th
Page 71 and 72: 7. CORPORATE GOVERNANCE 7.1 Board o
Page 73 and 74: Following publication of Internal C
Page 75 and 76: 10.11 There are no known trends, un
Page 78: RF65245 Printed by Royle Financial

FORESIGHT 4 VCT PLC - Foresight Group

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