SolarEIS - IIT - Percent

Foresight Solar EIS Fund
Targeting capital growth

from solar power
Foresight
Solar
EIS Fund
Information Memorandum with Application Form
Foresight Solar VCT Plc
Foresight
Solar
EIS Fund
Information Memorandum with Application Form
Important notice
This Information Memorandum is issued and approved by Foresight Group LLP (“Foresight”), an
authorised person within the meaning of the Financial Services and Markets Act 2000 (FSA number:
198020) whose registered office is at ECA Court South Park, Sevenoaks, Kent TN13 1DU. Reliance
on this promotion for the purpose of engaging in any investment activity may expose an individual
to a significant risk of losing all of the property or other assets invested. The Fund is only open
for participation by prospective investors who can be categorised by Foresight as a professional
client under the rules of the Financial Services Authority (“FSA”); that is to say, someone in respect
of whom Foresight undertakes an adequate assessment of his or her expertise, experience and
knowledge which gives reasonable assurance, in light of the nature of the transactions or services
envisaged, that the prospective investor is capable of making his or her own investment decisions
and understands the risks involved; someone to whom Foresight has given a clear warning of the
protections and investor compensation rights which the potential investor may lose; and someone
who has stated in writing, in a separate document from the Investor’s Agreement in Appendix
2 to this Information Memorandum, that he or she is aware of the consequences of losing such
protections. Further information explaining how this categorisation can be effected, what it means,
and the consequences thereof, is set out in the Investor’s Agreement in Appendix 2 to
this Information Memorandum.
Please note that applications may only be made, and will only be accepted, subject to the terms and
conditions of this Information Memorandum. The attention of prospective investors is drawn to the
fact that amounts invested in the Fund will be committed to investments which may be of a long
term and illiquid nature. Neither the Fund nor the companies in which it invests will be quoted on
any recognised or designated investment exchange and, accordingly, there will not be an established
or ready market for participation in the Fund nor the underlying investments. An investment in
the Fund will therefore not be easily realisable. The protections offered by the FSA to retail clients
do not apply to the Fund and compensation under the UK Investor Compensation Scheme will
not be available. This Information Memorandum does not constitute an offer or solicitation in any
jurisdiction in which such an offer or solicitation is not authorised or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such
an offer or solicitation. It is the responsibility of each recipient (including those located outside the
UK) to satisfy himself or herself as to full compliance with the applicable laws and regulations of any
relevant territory in connection with any application to participate in the Fund, including obtaining
any requisite governmental or other consent and observing any other formality presented in such
territory. Prospective investors should not regard the contents of this Information Memorandum as
constituting advice relating to legal, taxation or investment matters and are advised to consult their
own professional advisers before contemplating any investment or transaction.
The information contained in this Information Memorandum makes reference to the current laws
concerning EIS relief, IHT relief and CGT deferral. These levels and bases of relief may be subject to
change. The tax reliefs referred to in this Information Memorandum are those currently available
and their value depends on individual circumstances. Past performance is not necessarily a guide to
future performance and may not necessarily be repeated. You should be aware that share values and
income from them may go down as well as up and you may not get back the amount you originally
invested. This Information Memorandum does not constitute, and should not be considered as, an
offer to buy or sell or solicitation of an offer to buy or sell any security or share. It does not constitute
a public offering in the United Kingdom. Foresight has taken all reasonable care to ensure that all
the facts stated in this Information Memorandum are true and accurate in all material respects and
that there are no other material facts, or opinions, which have been omitted, which would make any
part of this promotion misleading. This Information Memorandum constitutes a financial promotion
pursuant to section 21 of the Financial Services and Markets Act 2000.
Further Information
If you require any further information relating to the Fund please contact Mike Currie at Foresight by
telephone on 01732 471812 or by e-mail to sales@foresightgroup.eu
Contents
Page
n Letter of Introduction 4
n Expected Timetable, statistics and Costs 5
n Enterprise Investment Scheme Tax Reliefs 6
n Investment Opportunity 7
n Fund Manager 7
n Investment Strategy 9
n Dealflow 9
n Returns 9
n Accumulator Option 10
n Individual Roll-Over Option 10
n Liquidity 10
n Charges 11
n Fund Structure 11
n How to Invest 11
n Introduction to Solar Power Investing 12
n Investment Team 18
n Directory 21
n Risk Factors 22
n Appendix 1: Taxation 27
n Appendix 2: Investor’s Agreement 30
n Appendix 3: Glossary of Terms 40
n Application Forms, Adviser’s Certificate and Schedule 42
Since its establishment in 1984, Foresight has built a reputation for creating innovative and
successful investment products that meet the needs of private investors. We now have over
12,000 investors and funds under management of over £200 million.
Letter of Introduction
March 2011 and your investment should be outside the scope of

Inheritance Tax after two years. The EIS benefits are available
Dear Investor on subscriptions of up to £500,000 per individual in any one
tax year. Further details of the tax benefits are described on
The economics of generating solar electricity in the UK were page 6.
transformed in 2010 by the introduction of government-
regulated “Feed-in Tariffs” which effectively guarantee I hope that you find this Information Memorandum clear
25-year inflation-linked prices for electricity generated by and easy to understand. You can call us on 01732 471800
qualifying solar power systems (the “FIT Scheme”). Similar for more detail at any time. We always recommend that you
measures introduced previously in countries such as Germany, seek independent professional advice before you invest in
Spain and Italy have attracted great interest among private any product. When you are ready to invest, you will find the
investors and demand for the Foresight Solar VCT, launched in Application Forms from page 42 onwards.
2010, has surpassed our expectations. We are now launching
the Foresight Solar EIS Fund to give investors access to our
strong flow of solar power investment opportunities with the Bernard Fairman
added tax benefits of the Enterprise Investment Scheme. Chairman
Since establishing our solar power team in 2007, we have

invested in solar power projects with a total transaction value
of more than £150 million and forecast generating capacity
of 29 megawatts. I believe that this in-house experience
of sourcing opportunities, arranging bank finance and
completing solar power investments sets Foresight apart
from any other EIS fund manager.
Feed-in Tariffs amount, in effect, to a government guarantee

of long-term prices. In the UK alone, these incentives are
expected to be worth over £3 billion to the renewable
electricity industry in the period to 2020. Foresight Solar EIS
Fund aims to enable individuals to be part of that industry and
to benefit from the predictable revenue streams possible from
Feed-in Tariffs, which in the UK are inflation-adjusted in line
with the retail prices index. In February 2011 the Government
announced a review of the FIT regime, and this has led some
people to question the solar investment opportunity. I am
convinced that the opportunity remains attractive and I
believe that the Fund will benefit from having less competition
as potential new entrants to our market delay their plans. You
will find more information on the FIT review on page 17.
The Enterprise Investment Scheme is one of a very small

number of tax-efficient investment schemes officially
sanctioned by HM Revenue and Customs. Subject to your
personal circumstances, you should be able to reclaim 20% of
your initial investment into the Fund against your tax bill
04
EXPECTED TIMETABLE, Statistics AND COSTS
Fund Name Foresight Solar EIS Fund

Fund Structure Unapproved EIS Fund
Target Size £20 million
Sector Focus Unquoted companies which derive their
revenues from generating solar electricity,
primarily in the UK
Fund Manager Foresight
Target Portfolio Size 10-20 companies with assets capable of
generating 30 megawatts of electricity
Investment Period Up to 31 March 2012*
Minimum Investment £10,000
Closing Date 30 June 2011 **
*Foresight may extend the investment period by up to 12 months if the Fund is not fully invested
by 31 March 2012
**Foresight may accept applications after the Closing Date
05
Enterprise Investment Scheme Tax Reliefs
The following summary may not apply to all potential investors. You must hold each
investment for a Three-Year Period to retain the reliefs summarised below. Reliefs
are only available on your investment in EIS qualifying shares. You should seek
advice in relation to tax reliefs.
Income tax relief Inheritance Tax Relief

You can reduce the amount of income tax you pay by 20% of Once held for at least two years, your shareholdings in EIS
the amount you subscribe to the Fund. As an example, if you Qualifying Companies should qualify for 100% Business
subscribe £100,000 to the Fund, you can reduce the amount of Property Relief. This means that they will not be part of your
income tax you pay by £20,000. estate for inheritance tax purposes.
This relief is available on the first £500,000 that you subscribe Timing
to EIS investments in each tax year. If you subscribe more than EIS tax reliefs become available each time that Foresight
£500,000 to the Fund in any tax year, the reduction in your makes a qualifying investment from the Fund. As an example,
income tax bill for that year will be £100,000. if Foresight makes the first qualifying investment from the
Fund in April 2011 and commits 10% of the Fund to that
You cannot claim relief of more than the amount of income tax
investment, then April 2011 is the effective date for working
that you are due to pay.
out the timing of your tax relief.
You can claim the relief against your income tax liability in the
Each Investee Company will produce EIS 3 certificates as soon
year that Foresight makes each investment or in the preceding
as practical following investment, and Foresight will send you
year. As an example, if Foresight invests the whole fund in the
the EIS 3 certificate for your part of that investment. These
2011/2012 tax year, you can claim all your income tax relief
certificates provide the evidence you need to claim income tax
against your tax liability for 2010/2011 and/or 2011/2012. If the
relief and capital gains tax deferral relief.
investment period extends into the 2012/2013 tax year, you
would still be able to claim against your 2011/2012 tax bill. Foresight expects to invest the Fund into Investee Companies
by 31 March 2012, but there is no guarantee that all
Capital Gains Tax Deferral Relief
Investments from the Fund will be made by that date.
You can defer capital gains up to the amount of your
This means that the effective dates for most of the Fund’s
subscription to the Fund. This applies to gains you have made
Investments are likely to be in the 2011/2012 tax year, but
in the three years before the effective date (see Timing across)
some may be in the following year.
and gains you make up to one year after the effective date.
Loss relief
Gains are deferred until you sell the investments that Foresight
If any of the Investments that Foresight makes for you through
has made for you through the Fund. Capital gains tax will apply
the Fund are realised at a loss, you would be able to set the
to the deferred gain at the rate current when the investments
loss against your income and gains when calculating your
are sold.
liability to CGT and/or income tax in the year of realisation.
Capital Gains Tax Exemption This means that your maximum exposure to losses should not
Any capital gains realised on a disposal of Shares in an EIS exceed 48% of your total investment after taking the income
Qualifying Company after the Three Year Period, and on which tax and loss reliefs into account (and assuming that your
EIS relief has been given and not withdrawn, will be capital marginal rate of tax is 40%; if your marginal rate is 50% then
gains tax free. Any capital gains realised on a disposal within the maximum exposure would be even lower at 40%).
the Three Year Period will be subject to capital gains tax, but in
respect of gains realised after 23 June 2010 the effective rate
of CGT is either 18% or 28% for individuals (the tax rate used
depends on the total amount of the individual’s taxable income).
06
Investment Opportunity
In order to promote low-carbon energy, the UK Government electricity production above all other renewable sources,
and some other European countries have legislated to create reflecting its higher capital cost and allowing for relative
the incentive of Feed-in Tariffs, which amount in effect to a differences in energy yield. Prices under the FIT Scheme are
government guarantee of long-term prices. In the UK alone, set to reduce each year for new installations, but Foresight
these incentives are expected to be worth over £3 billion expects the Fund to be substantially invested before 31 March
to the renewable electricity industry in the period to 2020. 2012, the last date for which the current FIT Scheme rates are
Foresight Solar EIS Fund aims to enable individuals to be part expected to apply (see page 17 in relation to the review of the
of that industry and to benefit from the predictable revenue FIT Scheme).
streams possible from Feed-in Tariffs, which in the UK are
In the UK, investment of over £170 billion would theoretically
inflation-adjusted in line with the retail prices index.
be required at current prices to exploit the potential PV
Foresight believes that solar power projects are particularly solar generating capacity as estimated by Foresight on the
attractive for investors because the prices for electricity basis of advice provided to the UK Government. Taking into
under the FIT Scheme are effectively guaranteed by the UK account the various practical constraints, such as funding,
Government for 25 years and the technology involved is well- planning permission and resource availability at equipment
proven and reliable. The FIT Scheme also rewards solar manufacturers and installers, Foresight estimates a funding
requirement in the UK in 2011/12 of £750 million.
Fund Manager
Since establishing its solar power team in 2007, Foresight Foresight has also won the support of the independent boards
has invested in solar power projects with a total transaction of five other funds to take over the management role in place
value of more than £150 million, demonstrating its ability to of the incumbent managers. Foresight was named Venture
source opportunities, arrange bank finance and complete Capital House of the Year at the November 2009 Unquote
investments. The current portfolio of Foresight’s first solar British Private Equity Awards.
fund has total forecast generating capacity of 29 megawatts.
Foresight has demonstrated its ability to deliver value for
Foresight’s team of 12 environmental investment managers investors. Its first institutional fund raised £20 million and
has been assembled gradually, allowing time to integrate their returned £80 million to investors. In the VCT sector, Foresight
experience in renewable energy investing and operational is responsible for the best performing fund in terms of total
management with Foresight’s proven strengths in private return, outperforming more than 30 other managers of VCTs in
equity and EIS fund management. Foresight’s achievements in a sector that has raised more than £3.5 billion over 14 years. Its
the environmental arena were recognised in 2009 when the Foresight 3 VCT is ranked 2nd among 56 VCTs that raised capital
firm was named New Energy Investor of the Year. in 2004/5. Foresight’s first environmental EIS fund has recently
completed its initial investment phase, providing investors with
Foresight has been managing UK tax-efficient funds for more
exposure to wider UK environmental opportunities just as these
than 12 years and is responsible for more than £160 million of
sectors are showing exceptional growth.
VCT and EIS fund capital. As well as launching its own funds,
07
08
Investment Strategy
The Fund will invest primarily in a portfolio of EIS-qualifying Investments may be made in companies seeking to generate
companies that will acquire Solar Power Systems backed by renewable energy from other sources provided that these
the FIT Scheme or similar long-term government-backed price benefit from the FIT Scheme or similar long-term government-
guarantee mechanisms. Investee Companies will not generally backed price guarantee mechanisms. The majority of Solar
incur risks related to applying for planning permission or other Power Systems financed by the Fund are expected to be in the
pre-construction risks, which will usually be the responsibility UK, but the Fund may also invest in other countries, provided
of the Fund’s installation partners. that substantially all of the Fund’s investments are made in
EIS-qualifying companies. Pending investment or distribution,
Foresight will seek to sell the Fund’s portfolio within five to six
any uninvested funds may be held in cash, interest bearing
years to generate capital gains for investors. An Individual Roll-
securities or other investments.
Over Option is available for Investors who wish to hold their
investment for the long term and to benefit from a reliable In order to comply with EIS rules, Foresight will seek to invest
stream of dividends over the full 25-year Feed-in Tariff (see exclusively in companies meeting the following criteria:
Roll-Over Option on page 10).
• consolidated gross assets do not exceed £7 million
The Fund will seek to maximise the aggregate generating immediately before the investment and £8 million
capacity of its portfolio by inviting other funds, including immediately afterwards;
Foresight Solar VCT, to co-invest in the portfolio and by using
• fewer than 50 full-time employees (or full time equivalent)
third party gearing as appropriate. Foresight believes that this
at the time of investment;
approach will maximise value for Investors, on the basis that
the sale of a larger portfolio is likely to be more attractive • EIS and VCT fundraising of no more than £2 million in any 12
to potential acquirors and should therefore generate a months.
premium value.
Dealflow
Foresight has a strong flow of solar investment opportunities attractive partner for such businesses. Foresight has already
through partnering relationships with installers, operators and worked effectively with installers and operators in Italy and
developers and from its network of contacts with property Spain and has built similar relationships with installers in
owners and professional advisers. In the UK there are more the UK. In November 2010, Foresight announced a strategic
than 300 installers accredited under the Microgeneration partnership with Solarcentury, a leading supplier and installer
Certification Scheme, ranging from large and well-established of Solar Power Systems.
companies to smaller and younger businesses. If the UK
Foresight plans to invest the Fund by 31 March 2012, in order
market for solar power expands as predicted, installers,
to take advantage of the highest UK guaranteed prices under
developers and operators have the opportunity to grow
the FIT Scheme. Foresight’s pipeline of potential investments
rapidly, a growth that could be constrained by lack of finance
totalled over £500 million in January 2011.
for investment. As a provider of such finance, with a track
record in the solar industry, Foresight believes that it is an
Returns
The Fund is designed to provide attractive returns to Investors would achieve a tax-free cash profit of 63% of their net cost of
by combining initial tax relief of 20% with tax-free capital investment, and a gross equivalent compound annual return of
gains on sale of the Investments, and to offer relief from 16.7% per annum (assuming that the Investor’s marginal rate
inheritance tax plus the opportunity to defer CGT deferral of income tax is 50%).
opportunities.
Investors looking for income and wishing to hold their
For Investors wishing to maximise capital growth and to investment for the long term should expect to receive an
realise their investment in five to six years, Foresight aims to annual yield of 6.3% (calculated on the amount subscribed
deliver a capital return of 130p per £1 invested in the Fund by less income tax relief) after the first year.
April 2017. If the planned level and timing of sale proceeds is
Interest earned on cash balances held in the Fund will be
achieved, then Investors benefiting from full EIS tax reliefs
added to the relevant Investor’s subscription.
09
Accumulator Option
Income available for dividends will normally be paid to entitlements) in proportion to the aggregate of (i) the amount
Investors as and when it arises. If you prefer to roll up dividend of each Investor’s initial investment; and (ii) the amount of
entitlements in order to maximise capital gain, please select dividend entitlements which each Investor has rolled up.
the Accumulator Option on the Application Form. Foresight will
If you and members of your family intend to invest in the Fund,
seek to convert your entitlement to dividends into an increased
you should consider taking independent tax advice if one or
call on the capital in each Investment, to be realised in years
some but not all of them intend to select the Accumulator
5-6 as a capital gain.
Option. This is because HMRC may treat dividend entitlements
The Accumulator Option will be structured within the articles converted under the Accumulator Option as a settlement of
of association of each Investee Company so that future income on your spouse, civil partner or a child, which would
Investment returns are shared (as between those Investors remain taxable on you.
who take their dividends and those who roll up their dividend
Individual Roll-Over Option

Some Investors may wish to stay invested for the longer each Investor’s preference to exit or remain invested for
term to take advantage of the 25-year income profile of solar the long term. Under certain circumstances Foresight
power assets. Each Investor is therefore invited to tell us may be unable to meet the wishes of Investors in relation
whether he or she wishes to exit in years 5-6 as planned or to to the Individual Roll-Over Option. For example, if the
stay invested for the long term. Each Investor may select the Individual Roll-Over Option is exercised in respect of a
Individual Roll-Over Option at any time up to 30 June 2015. relatively small proportion of the Fund, it may be impractical
Selection may only be made in writing addressed to Foresight or uneconomic for the Fund to continue. Foresight may
Group, ECA Court, 24-26 South Park, Sevenoaks, Kent, TN13 1DU. therefore decide to terminate the Fund and realise and
distribute all Investments.
Foresight will manage the Fund’s Investments with the aim
of providing the necessary flexibility consistent with meeting
Liquidity
Investors who need to realise their Investment early will be other Investors. This does not imply any obligation on the part
able to offer their Investments for sale through Foresight of the VCTs to acquire Investments and there is no guarantee
at their most recent valuation. Foresight will endeavour to that Investments offered can be sold or that they can be sold
arrange for any Investments so offered to be bought in by at their most recent valuation.
the Investee Companies, or acquired by the Foresight VCTs or
10
Charges
Foresight intends that Investors should benefit from tax reliefs at least £1 per £1 invested. The performance incentive fee is
on the full amount of their subscription to the Fund. For this calculated as 20% of distributions to Investors in excess of
reason, the charges described below are payable by Investee £1 per £1 invested until total distributions reach 130p per £1
Companies rather than by the Fund. The percentages shown invested and 30% above that level.
below will be applied to the amount invested by the Fund in
Fundraising Charges
each Investee Company. The charges will accrue from 1 April
Initial charge 5.5%
2011 and will be payable quarterly in advance from the date
Annual trail commission 0.5%
of investment in the relevant Investee Company. VAT will be
added where applicable. Foresight will receive the initial charge and will pay the costs
of establishing the Fund, including introductory commission
Fund Management Charges
to authorised financial advisers, legal and taxation costs, the
Annual management charge 1.5%
preparation of this Information Memorandum and any other
Secretarial charge 0.3% (subject to an index-linked direct expenses incurred.
minimum of £60,000 in
Annual trail commission will be paid to your adviser for up to
aggregate)
six years and is capped at 3% of the amount you subscribe to
Foresight will bear any legal, accounting and other fees the Fund. The administration of annual trail commission will
incurred by the Fund in connection with potential Investments be managed by Foresight Fund Managers Limited which will
which do not proceed to completion and may retain for its own maintain a register of advisers entitled to trail commission.
benefit any arrangement fees and directors’ or monitoring
If you change your adviser, you should inform Foresight Fund
fees which it receives in connection with Investments.
Managers Limited of the details of your new adviser, who will
Performance Incentive be entitled to receive the annual trail commission instead.
Foresight will be entitled to a performance incentive fee, Advisers should keep a record of Application Forms submitted
payable from the proceeds of realising the Fund’s assets. This bearing their stamp to substantiate any claim for annual
fee is only payable once Investors have received proceeds of trail commission.
Fund structure
The Fund comprises a number of discretionary managed Investments together and their Investments will be managed by
Portfolios, which are managed in accordance with the the Fund Manager on a common basis, the Fund will constitute
investment objectives and restrictions set out in Schedule 1 a collective investment undertaking within the meaning of the
of the Investor’s Agreement. Each Investor for legal and tax Markets in Financial Instruments Directive (“MiFiD”), which
purposes is the beneficial owner of a specific number of shares came into force in the UK on 1 November 2007. Therefore, by
in each Investee Company, the aggregate of which comprise virtue of the exemption for collective investment undertakings
his or her Portfolio. The combined Portfolios comprise the Fund in article 2.1(h) of MiFiD, the Fund falls outside the ambit of
which is as an unapproved EIS fund. The Nominee will be the MiFiD. This means, in particular, that Investors may participate
registered holder of all Investments of the Fund. in the Fund as professional clients if their financial adviser
is prepared to certify that that they have the expertise,
The Fund is not a collective investment scheme within the
experience and knowledge to understand the risks involved
meaning of section 235 of the Financial Services and Markets
in a participation in the Fund and that they are capable of
Act 2000 because it is a complying fund within the meaning of
making their own investment decisions. Investors who do not
Article 2 of the Schedule to the Financial Services and Markets
have financial advisers may participate if they can be assessed
Act 2000 (Collective Investment Schemes) Order 2001 and,
as a professional client by Foresight. There is no requirement
pursuant to clause 15.2 of the Investor’s Agreement, Investors
to demonstrate a minimum net worth or level of dealing or
are entitled to the withdrawal rights prescribed by that Article.
previous employment in a professional capacity in the financial
Notwithstanding this, as Investors in the Fund will make
sector.
How to Invest
Please read the Investor’s Agreement and complete the Please send the completed Application Form to us by post.
Application Form, both of which are included in this document. We will notify you if we accept your application and our
You can invest any amount from £10,000 upwards, subject to acceptance of your Application Form will create a binding
the amount being a multiple of £1,000. agreement between you and Foresight.
11
Introduction to solar power investing
Enough solar energy reaches the earth every hour to meet with a sheet of glass on the front to protect the semiconductor
the world’s energy consumption for a whole year. After forty wafers from weather and physical damage, creates a solar
years of development, the technology to harness some of this panel of the sort so often depicted in the media. A typical
energy in the form of electricity is tried and tested and familiar photovoltaic Solar Power System will comprise a number
to many people from the images of solar panels published in of panels connected together and linked to an inverter, a
so many newspapers, magazines and online. It is generally a standard item of electrical equipment that converts the direct
more expensive way to generate electricity than the burning current generated by the panels into alternating current, the
of fossil fuels, but enjoys government financial support as part form of electricity supplied through the electricity mains.
of the drive to reduce greenhouse gas emissions by building Panels may be mounted on rooftops or on the ground, and
renewable energy generating capacity. may be fixed or track the sun. Large numbers of PV systems
have already been installed, mostly in other EU countries using
The European Union decided many years ago to promote
crystalline silicon-based panels. Systems of this type are the
renewable energy as part of the response to climate change.
main focus for the Fund and are referred to in this document
Over the last ten years, Germany, Spain and Italy among
as “Solar Power Systems”.
others have demonstrated how massive private sector
investment in renewable energy can be unleashed by long- Solar Panel Photovoltaic Cell
term prices effectively guaranteed by governments. In 2010
anti-reflective coating
the UK adopted a similar price incentive, called a Feed-in Tariff. metal conductor strips
This Feed-in Tariff, effectively guarantees for 25 years an
inflation-linked price for electricity generated by qualifying
Solar Power Systems.
Foresight believes that solar power generation supported by
Feed-in Tariffs is attractive for investors in a time of economic
uncertainty and austerity in government spending. Demand
for solar electricity in the UK is not dependent on a general silicon layers metal backing
economic recovery and is expected to grow at rates well above
GDP growth. The Feed-in-Tariffs in the UK are not paid by What about watts?
the government and were not altered by the Comprehensive To calculate the potential revenue that a Solar Power System
Spending Review of October 2010. The UK Government can generate, we need to know both the value of each unit of
has committed to ensure that 15% of all of the UK’s energy electricity and the number of units that can be expected to be
needs are met from renewable sources by 2020 and this generated each year, termed “annual output” and measured in
commitment implies a need for investment of an estimated “kilowatt-hours (kWh)”. Annual output is a function of a Solar
£100 billion, part of which is expected to be directed to Power System’s peak capacity, measured in “kilowatts peak
solar power. Spain, Italy and other EU countries have similar (kWp)”, the amount of solar energy reaching its panel(s), and
commitments. a performance factor that allows for the alignment of the
panels in relation to the sun, as well as the temperature and
Having invested in solar power installations in Spain and Italy
other factors.
over the last three years, Foresight understands the exciting
opportunities that Feed-in Tariffs can unlock for private A typical, well-sited Solar Power System in the UK can produce
investors. Foresight has already established relationships with an annual output of 900 kilowatt-hours of electricity for every
installers, banks and other key counterparties and created 1 kilowatt of peak capacity.
a pipeline of investment opportunities. With a three year
Capacity is related to the physical size of the panels and the
track record in solar power investing and an in-house team
efficiency with which they convert solar energy into electricity.
of experts in project finance, procurement and operations,
Efficiency is typically guaranteed by the panel manufacturer.
Foresight intends to play a leading role in opening the solar
power opportunity to private investors. Annual output is forecast using meteorological data for
average monthly sunlight levels for different geographical
Many people are aware of solar power, but have questions
areas, allowing for weather and the number of daylight hours.
about how it works, whether it is economic or how Investors
Foresight’s experience suggests that estimates properly based
can profit from it. This Introduction to Solar Power Investing
on this data are reliable.
is intended to answer some of the more common questions.
It does not seek to provide all the information necessary to (a megawatt = 1,000 kilowatts; a gigawatt = 1,000,000 kilowatts)
invest successfully in solar power and does not constitute
advice in relation to the Fund.
What is solar power?

The building blocks of a solar power generator are
photovoltaic cells, typically made of semiconductor material
such as crystalline silicon, which converts light into electricity.
Packaging a number of these photovoltaic cells into a frame,
12
13
An Introduction to Solar Power investing
Insolation – solar energy reaching the UK
Units are kilowatt-hours per m2 per year
900
1000
1100
1200
Source: Design of Feed-in Tariffs for Sub-5MW Electricity in Great Britain, quantitative analysis prepared for Department for Energy
and Climate Change, July 2009
Vital statistics for some examples of PV Solar Systems:
Capacity Output in kilowatt-hours annually*

in kW peak UK Italy Spain
School rooftop 100 86,900 135,000 140,000
Warehouse rooftop 300 260,700 405,000 420,000
Ground-mounted 2,000 1,738,000 2,700,000 2,800,000
*Based on data from the Photovoltaic Geographical Information System (“PVGIS”) for London, Brindisi
(Italy) and Toledo (Spain)
14
Is the equipment reliable? Compliance with the UK FIT Scheme requires the owner of
Solar Power Systems have few moving parts and operate over an eligible Solar Power System to agree standard terms and
long periods with minimal maintenance. The UK Government conditions. An electricity supplier cannot impose conditions
has stated that “PV is easier to deploy than other technologies on an owner of a Solar Power System which are additional
and carries less risk to the investor since it is a tried and to or more onerous than those that are necessary to enable
tested technology”. Research by the independent EU Energy the electricity supplier to meet its obligations under the UK
Institute suggests that more than 90% of the solar panels FIT Scheme. Owners must also be entered in the register
on the market ten years ago remain capable of performing maintained by The Gas and Electricity Markets Authority in
well after thirty years of life, albeit with a slight drop in the UK pursuant to The Feed-in-Tariffs (Specified Maximum
performance. Capacity and Functions) Order 2010 (SI 2010 678).
The major suppliers of solar panels usually guarantee the The UK 2010 Generation Tariff depends on the capacity of
efficiency of their equipment over long periods. Typical the Solar Power System and the date on which it is installed.
guarantees underpin 90% of the rated efficiency for ten Smaller systems get a higher price to compensate for the
years and 80% for the remaining fifteen years. The top ten lower economies of scale, while installations after 31 March
suppliers worldwide of photovoltaic solar panels in 2009 2012 will get a lower price to match an expected fall in the
were First Solar, Suntech, Sharp, Yingli, Trina Solar, Sunpower capital cost of Solar Power Systems as the market grows. The
Corporation, Kyocera Corporation, Canadian Solar Inc., UK FIT Scheme does not apply to Solar Power Systems with a
SolarWorld AG and Sanyo Electric. net capacity of more than 5 megawatts peak.
Solar Power Systems owned by Investee Companies will
UK 2010 Generation Tariff in pence per kilowatt hour
generally be installed and maintained by specialist contractors,
who may also provide guarantees to supplement the core Installation date: Up to 31.3.2012 1.4.2012-31.3.2013
equipment guarantees. Such guarantees and contracts are of
4kW or less 41.3 37.8
course subject to normal commercial limitations.
Over 4kW up to 10kW 36.1 33
Why is solar power interesting now? Over 10kW up to 100kW 31.4 28.7
The UK Government has recently decided to follow the lead over 100 kW to 5 MW 29.3 26.8
set by other EU countries and in April 2010 implemented new
Feed-in Tariffs – FITs for short. The UK 2010 FITs effectively This table does not show all UK 2010 FITs.
guarantee inflation-linked prices for electricity produced by
Solar Power Systems for 25 years, at a level which has been The revenue potentially available to the owner of a Solar
calculated to offer attractive returns on investment. Similar Power System under the UK FITs is calculated by combining
schemes introduced in Germany, Spain and Italy a number of the annual output multiplied by the Generation Tariff (which
years ago stimulated major investment in the sector. Foresight is effectively a renewable energy bonus) with the annual
has been investing in solar power projects in Italy and Spain output multiplied by the Export Tariff (the price at which the
since 2008 and believes that the UK FITs will drive a wave of electricity will actually be sold).
investment which the Fund can exploit.
Is solar power economic, particularly in the UK?
Getting FIT The long-term prices, effectively guaranteed, under the FITs
The Energy Act 2008 introduced powers for the Secretary are deliberately set high enough to provide an attractive
of State to implement FITs. These powers were exercised return on investment after taking into account the system
to modify the standard UK conditions which govern the cost, sunlight available and other factors which vary by
supply of electricity by electricity suppliers. The UK FIT location. The potential economic returns to owners of Solar
Scheme requires licensed electricity suppliers to pay the Power Systems that are properly installed in appropriate
owner of any Solar Power System who complies with the UK locations are well-documented.
FIT Scheme a “Generation Tariff”, effectively a guaranteed
inflation-linked premium payment on every unit of electricity
generated . In addition, the owner is free to use or sell the
electricity separately, either at a guaranteed price initially set
at 3p per kilowatt-hour (the “Export Tariff”) or in the open
market, where prices have been around 6p per kilowatt-hour.
Assuming moderate to high demand, research published by
the UK Government suggests that traded electricity prices
may rise by 5-14% in total between 2010 and 2020 depending
on the level of investment in supply, potentially increasing
revenues to the owners of Solar Power Systems. Both the
Generation Tariff and the Export Tariff are index-linked to the
Retail Prices Index in order to maintain the real value of the
tariff revenue streams over time.
15
What can we learn from experience in other EU countries? represents a small part of the financing opportunity that is
The potential effect of Feed-in Tariffs is illustrated by the expected to be available during the target investment period.
German experience, where the growth rate of the PV solar
How does Foresight source investments?
industry averaged 70% per year over several years. In the UK,
Foresight sources solar investment opportunities through
research published by the UK Government suggests that spare
partnering relationships with installers, operators and
supply capacity in other countries both in manufacturing and
developers and from its network of contacts with property
installation of Solar Power Systems could be used to meet
owners and professional advisers. In the UK there are more
rapidly growing UK demand and this means that in the short
than 300 installers accredited under the Microgeneration
term annual UK sales may be able to grow at a significantly
Certification Scheme, ranging from large and well-established
higher annual rate than 70%. For this reason, the UK Solar
companies to smaller and younger businesses. If the UK
Power System industry may install capacity of 50 MW peak
market for solar power expands as predicted, installers,
in the first year of the policy, more than five times the rate
developers and operators have the opportunity to grow
achieved previously. During the growth of the solar industry
rapidly, a growth that could be constrained by lack of finance
in Germany, much larger year-on-year increases in sales
for investment. As a provider of such finance, with a track
occurred in individual years.
record in the solar industry, Foresight can be an attractive
partner for such businesses. Foresight has already worked
Comparing potential UK uptake of Solar Power effectively with installers and operators in Italy and Spain and
Systems to the German experience
is building similar relationships with installers in the UK.
10000 What returns can be expected from the portfolio?

Annual PV Uptake (MW per year)
Foresight aims to achieve returns sufficient to exceed the

1000 target for total return of 130p over six years. In order to
achieve these returns, Foresight will focus on three key
100 Germany – aspects of the selection and management of Solar
time shifted
Power Systems:
10 UK – predicted
Minimising system cost – one of the main determinants of
returns is the installed cost of Solar Power Systems, the key
1 UK – actual
2000 2005 2010 2015 2020
element of which is module cost, which fell significantly during
2009/2010. The Fund will seek to minimise installed cost,
This chart was published in the July 2009 report “Design subject to obtaining appropriate guaranteed quality.
of Feed-in Tariffs for Great Britain” commissioned by the
UK Department of Climate Change.
Selecting locations – Foresight expects returns to be higher
for a Solar Power System located in an area with more
How big is the market opportunity? solar radiation than the UK average, for example in southern
In the UK, investment of over £170 billion would theoretically England.
be required at current prices to exploit the potential PV Leverage and realisation – calculated returns can be boosted
solar generating capacity of around 70 million kWp as by leveraging the Fund’s investment with third-party lending
estimated by Foresight on the basis of advice provided to the and by selling assets at the end of the planned exit period to
UK Government. Taking into account the various practical buyers willing to accept a lower future yield on the investment.
constraints, such as funding, planning permission and resource Foresight has secured significant levels of banking finance for
availability at equipment manufacturers and installers, solar power investments during and since the credit crisis and
Foresight estimates a funding requirement in 2011/12 of £750 has wide experience of realising investments.
million in the UK.
Returns from the Fund’s portfolio will also depend on a
How long will it take to get the Fund invested? number of other factors, including the timing of deployment
Foresight plans to invest the Fund by the end of March 2012, of the funds raised and the level of UK inflation.
in order to take advantage of the highest UK guaranteed
prices though may extend the investment period by up to How can the Fund realise investments?
12 months if the Fund is not fully invested by 31 March 2012. Foresight believes that operational solar power assets will
Foresight’s pipeline totalled over £500 million of potential be attractive to utilities, pension funds, insurance companies
investment in January 2011. and other investors and will be readily marketable within the
planned exit timeframe. Where Foresight does not control
In order fully to invest the net cash raised by the Fund, Investee Companies, it typically seeks to agree a timetable
assuming gross funds raised of £20 million, Foresight believes for exit with other stakeholders before investing. Refinancing
that it will need to source opportunities with a total investment potentially offers an alternative route to liquidating part of the
volume of between £38 million and approximately £125 portfolio ahead of exits.
million depending on the level of third-party lending used. This
16
What competition will Foresight face? What if there’s a double-dip recession?

Foresight has demonstrated its ability to compete successfully In Foresight’s view, the drivers of solar power investment are
in the solar sector in Spain and Italy and believes that its not related to general economic trends. The financial case
in-house sector expertise, track record and entrepreneurial for investment is based on the commitment of the EU to
approach provide a powerful competitive advantage in renewable energy, reflected in legally binding EU directives
many situations. A variety of other investors are or will under which the UK has committed to source 15% of all
become active in the UK, Italy and Spain and may compete to energy from renewable sources by 2020. This target implies
provide equity finance. In some cases, equity finance for the new investment of around £100 billion in the UK alone, some
installation of Solar Power Systems may be provided by the of which is expected to be directed to solar power.
owner or occupier of the building or land, by a utility or by the
If some of the investments will be outside the UK, is there
installer or even the equipment manufacturer.
a currency risk?
Will the guaranteed prices fall in future? Foresight has been able fully to hedge currency exposure for
Under the UK 2010 FITs, the Generation Tariff applying to each all its solar power investments outside the UK and expects
Solar Power System will increase in line with the RPI each year to do so for investments funded by the Fund in order to
from the date of installation for 25 years. The UK Government protect investors from currency movements against the
has expressed the intention not to change the Generation pound sterling. For UK investments, depreciation of the
Tariff in respect of systems already installed at the time of any pound sterling against the US dollar or the Euro would tend
future change in the scheme. to increase equipment prices, potentially reducing the returns
from investments made after such depreciation.
The UK 2010 FITs do reduce over time, but these lower
prices apply to later installations and not to Solar Power Is there a shortage of equipment?
Systems installed in the initial periods. In February 2011 the Shipments of solar panels reached a record level in the
Government announced a review of the FIT regime, confirming final quarter of 2009 as suppliers increased production to
that any resulting changes to the FITs would take effect after serve booming European markets such as Germany, Italy,
31 March 2012 and would not be retrospective. However the France and the Czech Republic. Foresight expects additional
announcement also proposed a separate review of the FIT for manufacturing capacity coming on stream to increase supply
large solar PV systems. Large systems are defined as having to the UK market. Solar panel prices have fallen and if growth
greater than 50kW generating capacity, which is about 20 times in Germany slows in 2011 as some commentators expect there
the size of a typical domestic rooftop system. This separate could be an oversupply of panels.
review could result in changes taking effect during 2011. The
Government’s objective is to prevent large solar PV systems Is planning permission a problem?
taking an excessive share of the overall FIT cost and to allow The Town and Country Planning (General Permitted
this overall cost to grow to £360 million annually in 2014/15 Development) (Amendment) (England) Order 2008 removed
instead of £400 million. the need for planning permission in England for domestic
rooftop Solar Power Systems, with limited exceptions.
The announcement has no immediate relevance for the sub- Non-domestic and ground-mounted installations usually
50kW solar opportunity, which in Foresight’s view could absorb require planning permission, but Foresight expects planning
around £1.5 billion of capital investment and supports the authorities to be supportive, on the basis that Solar Power
return targets of the Fund. Foresight’s pipeline includes £165 Systems may have less visual and other impact on the local
million of opportunity in the sub-50kW size category. environment than other renewable energy technologies (with
Will the opportunity be affected by cuts in the possible exception of ground source heat pumps which
may also have little visual impact).
government spending?
The long-term prices, effectively guaranteed, under the FITs
are not paid by the UK Government. Instead, UK legislation
requires the major electricity suppliers to pay the prices
directly to owners of Solar Power Systems. The costs are
spread among all licensed electricity suppliers, and may
be passed on to consumers as part of the normal bill for
electricity consumption.
17
Investment Team
Since 2006 Foresight has built a highly-experienced team of 12 investment managers

focused on the environmental sector. Supported by other Foresight partners, this
team invested in environmental projects with a total value of more than £200 million
between 2006 and 2010.
Jamie Richards has led Foresight’s solar energy team Matt Taylor has an 18-year track record in private equity
since inception in 2007. He has played a key role in creating investment management, first with 3i Group plc and since
Foresight’s network of lenders, advisers, installation May 2000 with Foresight. Matt’s first experience of
contractors and asset owners, and has been directly involved environmental investment came in 1991 when he joined IKB
in financing 30 megawatts of solar assets. Jamie is a Deutsche Industriebank AG, a partner for the environmental
chartered accountant with 17 years’ experience across fund support programmes backed by Germany’s Kreditanstalt
management, banking and asset financing and has worked at für Wiederaufbau.
PricewaterhouseCoopers, Citigroup and Macquarie.
Andrew Page spent nine years in operational management
Pietro Zerauschek is responsible for operational and technical roles in industry before starting his career in private equity
oversight of Foresight’s European solar assets. Pietro is a management in 2000. Andrew guides engineering procurement
qualified mechanical engineer with over 15 years’ engineering and management activities across all environmental companies
experience and has been providing technical advisory and within Foresight’s portfolio. His operational experience in
engineering services for the financing, construction and engineering management allows him to contribute unique
operation of solar energy projects for five years. He is a insight to selection and management of project-based
director of the project companies for all Foresight’s existing investments.
Italian and Spanish solar assets.
Nigel Aitchison has a deep understanding of project
Humberto Santillana joined Foresight from Fotowatio management and engineering in the environmental sector. As
Renewable Ventures, a global solar energy operator with more managing director of Shanks PFI Investments, Nigel successfully
than 130 megawatts of installed solar power capacity and completed two major project financings and raised over £150
more than €700 million invested in the sector. At Fotowatio, million in bank financing. Nigel is a Chartered Environmentalist.
Humberto led solar investments in Spain and was responsible
Giles Whitman has played a key role in the development of
for structuring project finance and negotiation of installation
Foresight’s pipeline of UK solar investment opportunities.
contracts. Humberto has also worked within the solar team at
Prior to joining Foresight in 2008 he was involved in assessing
Babcock & Brown.
potential acquisitions in the energy consultancy and utility
Federico Giannandrea trained as a lawyer with Allen & Overy infrastructure sectors for Spice plc. He has also been
in Rome before joining Deutsche Bank, London in 2005. responsible, as an equity research analyst for HSBC Investment
There he was involved in the acquisition of solar and other Bank, for researching and valuing major wind-turbine
renewable energy assets in Poland, Spain, Greece, Belgium manufacturers. Giles is a Chartered Accountant.
and Italy, structuring and negotiating key elements of a
Tom Thorp is a Chartered Accountant with over five years’
portfolio with electricity generating capacity of 2 gigawatts.
experience in financial analysis and due diligence reporting
As a vice-president within the renewable energy team,
with KPMG’s Transaction Services and Restructuring teams
Federico led the project financing and installation contracting
both in London and Munich. He has advised on a wide range of
for an 8 megawatt solar power plant project in southern Italy
industries, performing acquisition and vendor due diligence as
and was involved in several other solar and wind
well as advising on company refinancings and working capital
power projects.
exercises for demergers and AIM listings.
Diomidis Dorkofikis gained a degree in Industrial
James Samworth has 10 years’ experience in manufacturing
Management & Technology and a masters degree in
and commercial roles within Corus (previously British Steel),
corporate finance before joining Millennium Bank, Athens as
helping to improve the performance of large manufacturing
a project finance analyst. At Millennium Bank he specialised
plants and holding responsibility for £100 million sales accounts.
in renewable energy and other infrastructure and property
James gained private equity experience through internships at
investments and was involved in the sale of two wind power
Lyceum Capital, Actis, NextWave Ventures and Deutsche Bank
projects with capacity of 48 megawatts and in the appraisal
before joining Foresight in 2009. James gained an MBA with
of a solar power project. He joined Foresight’s Rome office in
distinction at London Business School and a 1st class Natural
September 2009.
Sciences degree from Cambridge University.
18
Investment Team
Senior Partners Early experience as an analyst for the oil industry led Bernard to
grasp the opportunity of renewable energy and, in 2005, to turn
Three further partners of Foresight will play important
Foresight’s focus towards sustainable environmental investing.
roles in relation to the Fund. Bernard Fairman and David
Hughes are members of Foresight’s investment committee, David Hughes is responsible for Foresight’s private equity
whilst Gary Fraser heads Foresight’s finance and investment activities and portfolio management. David has
administration department. 36 years experience of unquoted investment management,
initially with 3i and subsequently establishing fund management
Bernard Fairman is the chairman of Foresight Group and is
operations for Framlington Investment Management Ltd, Baltic
responsible for group business development, strategy and
plc and Bank Austria AG, London. He has been involved in VCT
administration, as well as having final responsibility for all
management since 2004.
significant investment decisions made on behalf of funds
managed by Foresight. Over the past 25 years he has led Gary Fraser directs financial management and compliance, a
Foresight’s development into a business that now manages role he has fulfilled at Foresight for six years. He was previously
over £200 million with 28 staff in the UK, Italy and Spain, and company secretary for Baronsmead VCTs and other companies
in 1997 launched the best ever performing VCT. For ten years and funds within ISIS Asset Management plc. He qualified as a
he was a director of smartcard innovator Gemplus, involved Chartered Accountant with Ernst & Young in 1996 and has been
in its growth from start-up to over $1 billion annual revenues. involved in raising over £1 billion for a range of companies.
Bernard Fairman David Hughes Gary Fraser Jamie Richards Pietro Zerauschek Humberto Santillana Federico Giannandrea
Chairman of Foresight Chief Investment Partner Partner & CEO Partner & Technical Investment Director Investment Director
Group & Foresight Solar Officer Director
Diomidis Dorkofikis Matt Taylor Andrew Page Nigel Aitchison Giles Whitman Tom Thorp James Samworth
Investment Manager Partner Partner Industrial Partner Senior Investment Investment Manager Investment Manager
Manager
Track Record*
VCTs managed exclusively by Foresight Group
Fund Timeframe Effective Net Total Return*** IRR with initial

Issue Price** tax break****
Fleming Ventures 1985 – 2001 100p 400p n/a
Foresight VCT (“O”) 1997 – 2007 80p 221p 23.85%
Foresight VCT (“C”) 1999 – 2007 80p 92p -3.11%
Foresight VCT (“O”)* 2007 – to date 83p 53.3p -5.66%
Foresight 2 VCT 2005 – to date 60p 89.7p 7.06%
Foresight 2 VCT (“C”) 2007 – to date 70p 114p 26.24%
Foresight 3 VCT 2004 – to date 90.3p 109.7p 23.60%
Foresight 4 VCT 2004 – to date 91.2p 125.1p 17.22%
* Foresight VCT O and C shares merged in January 2007 to form new Foresight VCT “O” shares
** Effective Net Issue Price - £1 subscription price less income tax relief where applicable
*** Total Return = Dividend distributions + Net Asset Value as at 14 September 2010
**** Source courtesy of Martin Churchill: www.taxefficientreview.com
NB: Foresight 3 & 4 VCTs were originally managed by Advent. Foresight took over the management of these funds in July 2004.
19
20
Directory
Fund Manager and Promoter

Foresight Group CI Limited Foresight Group LLP
La Plaiderie House ECA Court
La Plaiderie South Park
St Peter Port Sevenoaks
Guernsey Kent
GY1 4HE TN13 1DU
United Kingdom
T: 01732 471812
F: 01732 471810
Administrator and Nominee

Foresight Fund Managers Limited
ECA Court
South Park
Sevenoaks
Kent
TN13 1DU
United Kingdom
T: 01732 471812
F: 01732 471810
Solicitors and Tax Advisers

RW Blears LLP
125 Old Broad Street
London
EC2N 1AR
T: 020 3192 5691

E: roger@blears.com
21
Risk Factors
Prospective Investors should be aware that the value of investments through the
Fund can fall as well as rise.
Investors should be fully aware of the high risk nature of It is expected that major suppliers of solar panels will guarantee
this type of investment. In addition, statements concerning the efficiency of their equipment over long periods. Investments
taxation are merely a brief summary and should not be viewed will only be made in Investee Companies where Foresight
as constituting tax advice. The information below does not believes that any relevant counterparties are, and will remain,
purport to be exhaustive. Additional risks and uncertainties, financially strong, but such judgements on the part of Foresight
not presently known to the Fund Manager, or which the Fund necessarily involve risk and uncertainty because they relate to
Manager currently deems immaterial, may also have an adverse future events and circumstances which may affect the financial
effect on the Fund and on Investments. Investors should strength of counterparties. It is possible that counterparties
consider carefully whether an investment in the Fund is suitable could be unable to meet guarantee obligations.
for them in the light of the information in this document and
The standard UK conditions of electricity supply licences, as
their personal circumstances. If in any doubt whatsoever,
recently modified by the UK Secretary of State, provide that
an Investor should not subscribe. In any case, it is strongly
from the date on which the owner of an eligible Solar Power
recommended that Investors seek the advice of their financial
System is entered in the register maintained by The Gas and
adviser or other appropriately qualified professional adviser.
Electricity Markets Authority in the UK the relevant electricity
Risks relating to the Investee Companies supplier must commence Feed-in Tariff payments at the rates
The Investee Companies will be small, unquoted companies. provided for in the FIT Scheme from the next payment cycle
There is no market, nor is there intended to be a market, or the date on which standard terms are agreed between the
for Investments; as such, an Investment will not be Readily owner and that electricity supplier. UK electricity suppliers
Realisable. It is not intended that any income or capital will be cannot impose conditions on an owner of a Solar Power
returned to Investors during the Three Year Period. After the System which are additional to or more onerous than those
Three Year Period, it may still be difficult to realise Investments that are necessary to enable the electricity supplier to meet its
or to obtain reliable information about their value as the obligations under the FIT Scheme. This amounts effectively to
market for shares in smaller companies is often less liquid than a UK government guarantee of the long-term prices provided
that for shares in larger companies, bringing with it potential for in accordance with the FIT Scheme. However, the UK
difficulties in acquiring, valuing and disposing of such shares. government does not guarantee the solvency of electricity
The performance of the Fund is dependent on the ability of suppliers and if an electricity supplier were to collapse or if its
the Fund Manager to identify appropriate Investee Companies financial strength deteriorates then its obligations to owners
and on the ability of the Investee Companies to perform in under the FIT Scheme may become worthless. It is believed that
line with their respective business plans. The income from the the same solvency risk is likely to exist in relation to overseas
Investee Companies will depend on the revenues generated by Feed-in Tariffs.
the activities undertaken by such companies, which may be less Investee Companies may incur unplanned costs and delays as a
than the costs incurred by such companies. result of statutory and regulatory requirements, including those
Investment in smaller, unquoted companies, by its nature, imposed by environmental, safety, labour and other regulatory
involves a high degree of risk. Proper information for and political authorities, or where construction operations do
determining their value or the risks to which they are exposed not proceed as planned, or where insurance is not adequate
may also not be available. Investment in such companies can or as to which inadequate reserves had been established, risks
offer good investment returns but by its nature is illiquid and arising out of the presence of certain construction materials,
uncertain and consequently involves a higher degree of risk force majeure acts, terrorist events, or other operating risks.
than a portfolio of quoted shares. Realisation of investments The level of returns from Investments may be less than
in unquoted companies can be difficult and may take expected if there is delay in the investment programme,
considerable time. such that all or part of the Fund is held in cash or near cash
Investee Companies may be affected by divergence between Investments for longer than expected, or if the returns obtained
forecast and actual levels of solar radiation, or by changes in on Investments are less than planned, or if Investments cannot
legislation, or by changes in the rates of Feed-in Tariffs, interest, be realised at the expected time and values. There can be
inflation, foreign exchange or tax, or by changes in prices of no guarantee that suitable investment opportunities will be
solar panels and other capital equipment, energy, or financing, identified in order to meet the Fund’s objectives.
or by changes in labour, maintenance, safety or other operating The departure of any of the Fund Manager’s members, partners
costs, or by operating and technical risks, including risk of or employees or those of its Associates could have a material
mechanical breakdown, failure to perform according to design adverse effect on the performance of the Fund. Whilst the Fund
specifications, failure to obtain accreditation and registration Manager has entered into appropriate agreements with its
with Ofgem for Solar Power Systems, unavailability of grid members, partners, employees and Associates, the retention
connection, labour and other work interruptions and other of their services cannot be guaranteed. The past performance
unanticipated events that adversely affect operations. of Foresight Group is not necessarily a guide to its future
performance and may not necessarily be repeated. The value
22
Risk Factors
of Investments and income from them may go down as well as Under HMRC EIS rules, EIS Qualifying Companies are required
up and Investors may not get back the amount they originally to have employed 100% of their net funds (after the deduction
invest in the Fund. of issue costs) within 24 months after the date of issue of
Shares, except where the qualifying activity consists of
Risk Factors
preparing to carry on a trade in which case the time limit is
This document should not be considered as constituting legal,
24 months after the date of commencing the trade. If an
taxation or investment advice by the Fund Manager or its
Investee Company fails to employ this level of funds within the
advisers. Each party to whom this document is made available
required deadlines, the Investee Company would be in breach
must make its own independent assessment of the Fund after
of the EIS regulations and tax relief may be withdrawn.
making such investigations and taking such advice as may be
deemed necessary. In particular, any estimates or projections A sale of Shares in the Investee Companies within the Three
or opinions contained in this document necessarily involve Year Period will result in the 20% income tax relief available
significant elements of subjective judgement, analysis and upon subscription for those Shares becoming repayable
assumptions and each recipient should satisfy itself in relation to HMRC and in any capital gains on such Shares and any
to such matters. deferred gain being subject to CGT. It is possible for Investors
to lose their EIS Relief and/or Capital Gains Tax Deferral Relief
Risks relating to the EIS qualifying status of and/or Business Property Relief by taking or not taking certain
the Investor steps. Investors are advised to take appropriate independent
There are circumstances in which an Investor could cease professional advice on the tax aspects of their investment.
to qualify for the taxation advantages offered by the EIS.
For example, Capital Gains Tax Deferral Relief could be lost Fund Issues
if an Investor ceases to be resident or ordinarily resident in The Fund Manager reserves the right to cease to manage
the United Kingdom during the Three Year Period. In the Fund in certain circumstances set out in the Investor’s
addition, an Investor could cease to qualify for EIS Relief Agreement, in which event it will try to transfer the Portfolios
if he receives value from the Fund or one of the Investee to another fund manager or to terminate the Fund in an
Companies during the period beginning one year before the expeditious way, but there is a possibility that the Tax
Shares in the Investee Companies are issued and ending Advantages may be lost.
on the conclusion of the Three Year Period. Payment of a The Fund Manager will seek to realise Investments and to
dividend, however, would not typically be regarded as a terminate the Fund in an orderly fashion over a period of six
receipt of value. years from the final Closing Date but it cannot be guaranteed
Risks relating to the EIS qualifying status of the that the Investments made can easily be realised within this
period and, even where they can be realised, that this can be
Investee Companies
done on an advantageous basis.
If an Investee Company ceases to carry on business of the
type prescribed for EIS Qualifying Companies during the Three Generally, the Fund Manager reserves the right to return
Year Period, this could prejudice its qualifying status under a small surplus of cash if it concludes that it cannot be
the EIS. The situation will be closely monitored with a view properly invested.
to preserving the Investee Company’s qualifying status, but
this cannot be guaranteed. A failure to meet the qualifying Potential Conflicts of Interest
requirements for EIS could result in: There may arise situations where the interests of the Fund
conflict with the interests of other funds managed by the Fund
• Investors being required to repay the 20% income tax relief Manager or with those of the Fund Manager itself. The Fund
received on subscription for Shares and interest on the may invest in companies in which other funds managed by the
same; Fund Manager may invest or may already hold investments.
• a liability to tax on capital gains on a disposal of the Shares; Decisions made by the Fund Manager may be more beneficial
and for one fund managed or advised by the Fund Manager than
for any other.
• any deferred gain crystallising.
The Fund may co-invest with third parties or through joint
Further details of the taxation implications of an investment ventures or other entities. Such co-investing may give rise
in an EIS Qualifying Company are set out in Appendix 1 of to the possibility that a co-investor or partner may at any
this document. time have economic or business interests or goals which are
Although provisional approval will be sought from HMRC that inconsistent with those of the Fund, or that such person may
the Investee Companies and their activities should qualify take action contrary to the Fund’s investment objectives. The
under the EIS, there is no guarantee that the formal EIS claims entitlement of the Fund Manager to the performance fee
will be agreed or that such agreement will not be subsequently referred to in Schedule 2 may create an incentive for the Fund
withdrawn. In those circumstances, Subscription monies will Manager to make more speculative investments on behalf of
not be returned to Investors. If an Investee Company fails to the Fund than it would otherwise make in the absence of such
obtain EIS Qualifying Company status, or if it is subsequently a performance-based compensation arrangement. The Fund
withdrawn, EIS income tax relief and Capital Gains Tax Manager may enter into fee sharing arrangements with third
Deferral Relief would not be available to Investors or could
be withdrawn.
23
Risk Factors
party marketers, including placement agents, or other advisers Prospective investors are strongly advised to conduct their
who refer Investors to the Fund, and such marketers may have own due diligence including, without limitation, the legal and
a conflict of interest in advising prospective investors whether tax consequences to them of investing in the Fund.
to invest in the Fund.
Conflicts of interest may arise in connection with decisions The investments described in this document may not
made by the Fund Manager that may be more beneficial for be suitable for all investors. Investors are accordingly
certain Investors than for any other. In making such decisions, advised to consult an investment adviser authorised
the Fund Manager intends to consider the investment under the Financial Services and Markets Act 2000
objectives of the Fund as a whole, not the investment and an appropriately qualified professional adviser,
objectives of any individual Investor. prior to investing.
The Fund Manager may provide certain Investors with
the opportunity to co-invest in Investments. Potential
conflicts may be inherent in, or arise from, the Fund
Manager’s discretion in providing such opportunities to
certain Investors. In addition, once such co-investments
are made, the Fund’s interests and those of co-investing
Investors may subsequently diverge.
General Risks
The subscription for Shares in the Investee Companies and
the performance of Shares will not be covered by the Financial
Services Compensation Scheme or by any other compensation
scheme. Prospective investors should not regard the contents
of this Information Memorandum as constituting advice
relating to legal, taxation or investment matters and are
advised to consult their own professional advisers before
contemplating any investment or transaction.
The information contained in this Information Memorandum
makes reference to the current laws concerning EIS Relief,
Business Property Relief and Capital Gains Tax Deferral Relief.
These levels and bases of relief may be subject to change.
The tax reliefs referred to in this Information Memorandum
are those currently available and their value depends on
individual circumstances. Past performance is not necessarily
a guide to future performance and may not necessarily be
repeated. You should be aware that Share values and income
from them may go down as well as up and you may not get
back the amount you originally invested. All statements of
opinion and/or belief contained in this document and all views
expressed and all projections, forecasts or statements relating
to expectations regarding future events or the possible
future performance of the Fund represent Foresight’s own
assessment and interpretation of information available to it
as at the date of this document. No representation is made
or assurance given that such statements, views, projections
or forecasts are correct or that the objectives of the Fund
will be achieved. Prospective investors must determine
for themselves what reliance (if any) they should place on
such statements, views, projections or forecasts and no
responsibility is accepted by Foresight in respect thereof.
24
25
26
Appendix 1: Taxation
EIS Qualifying Companies Finance (No 3) Act 2010 which is expect to come into force
Each Investee Company in which the Fund invests must initially in these respects in April 2011 will replace the geographical
(i.e. at the time of issue of the Shares) not be listed on a restriction to carrying on a trade wholly or mainly in the UK
recognised stock exchange (as defined for the purposes of EIS with a requirement that an Investee Company issuing the
Relief) and there must be no “arrangements” in place for it to shares under the EIS must have a permanent establishment in
become so listed. In addition, throughout the Three Year Period, the UK. The same legislation also requires that a company must
it must not be a subsidiary of, or be controlled by, another not be “in difficulty” when shares are issued. A company will not
company. It must either exist to carry on a qualifying trade or be treated as “in difficulty” within three years of its formation
else be the parent company of a trading group and there must or if it is able to raise funds from existing shareholders or
be no “arrangements” in existence for the Investee Company to the market.
become a subsidiary of, or be controlled by, another company.
Shares only qualify for EIS Relief if they are ordinary shares
A trading group is a group in which, directly or indirectly, more which do not, at any time during the Three Year Period, carry
than 50% of the shares of each subsidiary are held by another any present or future preferential right to dividends or to an
member of the group, but any subsidiary employing any of Investee Company’s assets on its winding up, or any present or
the money raised by the issue of Shares must be a qualifying future right to be redeemed. The Accumulator Option will be
90% subsidiary. Non-qualifying business activities (broadly, structured within the articles of association of each Investee
investment activities and non-qualifying trades) must not Company so that future returns are shared (as between those
comprise a substantial part of the business of the group as a investors who take their dividends and those who roll up their
whole. The qualifying business activity for which the money dividend entitlements) in proportion to the aggregate of (i) the
is raised by the issue of Shares must be a trade carried on amount of each Investor’s initial investment; and (ii) the amount
by a company wholly or mainly in the UK and the trade must of dividend entitlements which each Investor has rolled up. Such
be conducted on a commercial basis and with a view to the rights within the articles of association of an Investee Company
realisation of profit. should not constitute preferential rights either as a matter of
law, because Investors will subscribe the same class of Shares
The value of the gross assets of the Investee Company and any
and so other classes of shares will not be effected by the intra
subsidiaries must not exceed £7 million immediately before the
class operation of the Accumulator Option, or as a matter of
issue of Shares and £8 million immediately afterwards.
fact, notwithstanding that some Investors may repeatedly waive
The maximum fundraising per Investee Company is restricted their dividends given that those who elect for the Accumulator
to £2 million per year and the maximum number of full-time Option may, at their discretion, switch their election so that they
employees (or full-time equivalent) in the Investee Company at do not roll up their dividends. No Accumulator Option will be
the time of Investment is restricted to fewer than 50. exercised in respect of any Shares unless an advance assurance
has been obtained from HMRC in relation to an Investment
Most types of trades are qualifying trades but the following
which sanctions the operation of the Accumulator Option.
are excluded:
If no such advance assurance(s) can be obtained then the
• Dealing in land, commodities or futures, or in shares, Accumulator Option may not be available for some or all of the
securities or other financial instruments; Investments made by the fund.
• dealing in goods otherwise than in the course of an ordinary Fund Status
trade of wholesale or retail distribution, or acting as a The Fund has not been approved by HMRC under section 251
wholesaler or retailer of goods of a kind which are collected of the Income Tax Act. This means that the Investor can obtain
or held as investments if stock is not actively sold; EIS Relief in the tax year in which Investments in EIS Qualifying
• banking, insurance, money lending, debt factoring, hire Companies are made by the Fund and in the preceding tax year
purchase financing or other financial activities; to the extent that Carry Back Relief is claimed in respect of
• leasing, except certain lettings of ships, or receiving royalties the Investments.
or licence fees (subject to certain exceptional cases); The tax year in which the Fund invests may not be the same
• providing legal or accountancy services; as the tax year in which an Investor subscribes to the Fund,
• farming and market gardening; notwithstanding the availability of Carry Back Relief, given
that the Fund Manager anticipates investing the Fund over the
• forestry and timber production;
course of the three tax years 2009/10 to 2011/12. Capital Gains
• property development; Tax Deferral Relief is also given by reference to the dates on
• shipbuilding; which the Fund makes its Investments.
• producing coal and/or steel; When an Investment has been made in an EIS Qualifying
• operating or managing hotels or similar establishments; Company and that company has been trading for at least four
• operating or managing nursing homes and residential care months, the Fund Manager will send Investors an EIS 3 Form.
homes; and The EIS 3 Form can be used by an Investor to claim EIS Relief in
respect of the amount invested in that company. The EIS 3 Form
• providing services to a trade consisting of any of the above
will state the amount of the EIS qualifying investment
carried on by a “connected person.”
27
the Investor has made through the Fund and is required when an individual’s income tax liability for the tax year preceding
claiming EIS Relief through a personal taxation return. EIS that in which Shares are issued, save to the extent that income
Relief must be claimed no later than five years after 31 January tax relief has already been claimed under the EIS for the
following the year of assessment in which the Investment preceding year.
was made.
(c) Capital Gains Tax Deferral Relief
Complying fund (non-MiFiD) status To the extent to which a UK resident Investor (including
The Fund is a complying fund within the meaning of Article 2 of individuals and certain trustees) subscribes for Shares, he can
the Schedule to the Financial Services and Markets Act 2000 claim to defer paying tax on all or part of a chargeable gain.
(Collective Investment Schemes) Order 2001 and, pursuant to The gain may have arisen on the disposal of any asset, or a
clause 15.2 of the Investor’s Agreement, Investors are entitled to previously deferred gain may have been brought back into
the withdrawal rights prescribed by that Article. Accordingly, the charge. Although there is a limit of £500,000 for income tax
Fund is not a collective investment scheme within the meaning relief (see (a) above) and for the exemption from capital gains
of section 235 of the Financial Services and Markets Act tax upon a disposal (see (d) below), there is no limit on the
2000. Notwithstanding this, as Investors in the Fund will make amount of EIS Investments which can be used to defer a gain.
investments together and their investments will be managed by If the Investor dies whilst still holding Shares, the deferred CGT
the Fund Manager on a common basis, the Fund will constitute liability is extinguished entirely. Shares must be issued within
a collective investment undertaking within the meaning of the one year before and three years after the date of the disposal
Markets in Financial Instruments Directive (“MiFiD”), which which gives rise to the gain or the date upon which a previously
came into force in the UK on 1 November 2007. Therefore, by deferred gain crystallises. The gain is deferred until there is
virtue of the exemption for collective investment undertakings a chargeable event such as a disposal of Shares or an earlier
in article 2.1(h) of MiFiD, the Fund falls outside the ambit of breach of the EIS rules.
MiFiD. This means, in particular, that the category of Investors in
(d) Capital Gains Tax Exemption
the Fund able to participate in the Fund as professional clients is
Any capital gains realised on a disposal of Shares in an EIS
wider than if the Fund were to fall within the ambit of MiFiD.
Qualifying Company after the Three Year Period, and on which
Dividends EIS relief (see (a) above) has been given and not withdrawn, will
Under current legislation, no advance corporation tax is payable be capital gains tax-free. Any capital gains realised on a disposal
by Investee Companies on dividends. Shareholders will receive within the Three Year Period will be subject to capital gains tax,
a notional tax credit on dividends paid, such that basic rate tax but in respect of gains realised after 23 June 2010 the effective
payers will have no further tax to pay on the dividend received rate of CGT is 18% and 28% for individuals (the tax rate used
and higher rate taxpayers will have a liability to pay higher rate depends on the total amount of the individual’s taxable income).
tax equivalent to 25% of the amount of the dividend received.
(e) Loss Relief against Income or Gains
EIS Tax Reliefs Tax relief is available at any time in respect of any loss realised
To obtain the tax reliefs described below, it is necessary to upon a disposal of Shares in an EIS Qualifying Company on
subscribe for Shares in EIS Qualifying Companies and claim which EIS income tax relief (see (a) above) or Capital Gains
the relief. The summary below is based on current law, and Tax Deferral Relief (see (c) above) has been given and not
gives only a brief outline of the tax reliefs and assumes that withdrawn. The amount of the loss (after taking account of
the Investor is a 40% taxpayer. It does not set out all the any income tax relief initially obtained) can be set against
rules which must be met by EIS Qualifying Companies and an the individual’s gains in the tax year in which the disposal
Investor. The tax reliefs will only be relevant to Investors who occurs, or, if not fully used, against gains of a subsequent year.
pay UK income tax and/or wish to defer a capital gain. Alternatively, on making a claim, the loss, net of income tax
relief, may be set off against the individual’s taxable income in
(a) Income Tax Relief
either the tax year in which the disposal occurs, or the
Individuals can obtain income tax relief on the amount
previous tax year.
subscribed for Shares in EIS Qualifying Companies (up to
£500,000 in each tax year for all EIS investments) provided
they are not connected with any issuing company. Husbands Inheritance Tax – Business
and wives and civil partners can each subscribe up to
£500,000. To calculate the relief, the lower rate of tax (currently Business Property Relief
20%) is multiplied by the amount subscribed. The relief is given Although not an EIS tax relief as such, an investment in an EIS
against the individual’s income tax liability for the tax year in Qualifying Company should qualify for 100% relief from IHT
which the Shares are issued unless the individual makes a Carry under current legislation, provided the investment has been
Back Relief claim. held for at least two years and is still held at time of death.
There is no upper limit on the amount of IHT Relief which can
(b) Carry Back Relief be claimed. The combined availability of the reliefs referred to
Carry Back Relief claims may be made for amounts subscribed above can result in significant tax savings.
for Shares in EIS Qualifying Companies up to the full amount of
£500,000 multiplied by the lower rate of tax to be set against
28
Trusts
Reliefs are available to UK resident Investors as trustees of
discretionary or life interest trusts.
Apart from being attractive to individual Investors who are UK
resident for tax purposes, the Fund offers excellent tax planning
opportunities to trustees of certain trusts.
Capital Gains Tax Deferral Relief, as described above, can be
claimed on the amount subscribed for Shares in EIS Qualifying
Companies against any chargeable gains if the Investment is
made within one year before and three years after the date of
the disposal which gives rise to the gain or the date upon which
a previously deferred gain crystallises.
Loss Relief is available under the normal capital loss rules
in respect of any losses incurred on Investments made by
the Fund.
Inheritance Tax: discretionary trusts can benefit from Business
Property Relief on EIS Investments made by the Fund, provided
they have been held by the trustees for two years.
Please note that this is only a condensed summary of

the taxation legislation and should not be construed as
constituting advice which a potential Investor should
obtain from his or her own investment or taxation adviser
before applying for an investment in the Fund. The
value of any tax reliefs will depend on the individual
circumstances of Investors.
29
Appendix 2: Investor’s Agreement
This Agreement sets out the terms and conditions for the Fund (a) the Fund Manager undertakes an adequate assessment
of the expertise, experience and knowledge of the Investor
that gives reasonable assurance, in the light of the nature
1. Definitions, Construction and of the transactions or services envisaged, that the Investor
Interpretation is capable of making his own investment decisions and
1.1 In this Agreement the definitions contained in the Glossary understanding the risks involved;
set out in Appendix 3 shall apply. (b) the Fund Manager has given the Investor a clear written
1.2 Words and expressions defined in the FSA Rules which are warning of the protections and investor compensation
not otherwise defined in this Agreement shall, unless the rights the Investor may lose; and
context otherwise requires, have the same meaning in this (c) the Investor has stated in writing, in a separate
Agreement. document from this Agreement, that he is aware of the
1.3 Any reference to a statute, statutory instrument or to rules consequences of losing such protections. Such a statement
or regulations shall be references to such statute, statutory is contained within the Application Form.
instrument or rules or regulations as from time to time 2.9 If the Investor has been advised by an authorised
amended, re-enacted or replaced and to any codification, intermediary who is able to advise on EIS investments and
consolidation, re-enactment or substitution thereof as from who completes the final section of the Application Form,
time to time in force. the Investor will be treated as having satisfied the above
1.4 References to the singular only shall include the plural and criteria. However, if the Investor has applied directly he will
vice versa. have to complete the form on his investment experience
1.5 Unless otherwise indicated, references to Clauses shall be which appears immediately after the Application Form.
to Clauses in this Agreement. The information provided by the Investor will be kept
confidential by the Fund Manager but it is important to
1.6 Headings to Clauses are for convenience only and shall not enable the Fund Manager to categorise the Investor as a
affect the interpretation of this Agreement. professional client as required by the FSA. An application
to subscribe to the Fund will only be accepted from an
2. Investing in the Fund Investor if he has been categorised by the Fund Manager as
a professional client.
2.1 This Agreement comes into force on the date on which an
2.10 Once an Investor is treated as a professional client he
Investor is notified in writing by the Fund Manager that his
will lose the protections applicable exclusively to retail
Application Form is accepted in respect of the Fund.
clients under the FSA Rules. Certain of the FSA Rules will
2.2 This Agreement enables the Investor to invest in the Fund. automatically be limited or modified in their application
The Fund will be a Complying Fund. to the Investor. Certain of the FSA Rules will be capable of
2.3 The Investor hereby appoints the Fund Manager, on the modification in their application to the Investor in relation
terms set out in this Agreement, to manage his Portfolio(s) to any business carried out by the Fund Manager under the
in the Fund as one of a series of similar Portfolios which terms of the Information Memorandum (“the Business”).
together constitute the Fund in which he has invested. 2.11 The following protections will not apply to an Investor in
The Fund Manager agrees to accept its appointment and the Fund. The Fund Manager will not be obliged to warn
obligations on the terms set out in this Agreement. the Investor of the nature of any risks involved in any
2.4 The Fund Manager is authorised and regulated by potential Investments in the Fund. The Fund Manager
the Financial Services Authority for the conduct of will not be obliged to disclose to the Investor the basis or
UK business. The Administrator and the Nominee are amount of its charges for any services the Fund Manager
Associates of the Fund Manager. The Fund Manager is a provides to the Investor or on his behalf or the amount
party to this Agreement in its own right and as agent for of any other income that the Fund Manager may receive
and on behalf of the Administrator and the Nominee. from third parties in connection with such services. The
2.5 Under the terms of this Agreement, and in accordance with Fund Manager will not be obliged to set out any of the
the FSA conduct of business rules 15.2.1, the Investor does prescribed contents, disclosures or risk warnings needed
not have the right to cancel arrangements to which this for retail customers in prospectuses, marketing brochures
Agreement applies. and other non real-time financial promotions material, nor
will the Fund Manager be subject to the restrictions that
2.6 If an application set out in an Application Form is not
apply to a retail client in relation to unsolicited real-time
accepted, the Fund Manager will promptly notify the
communications with the Investor. The Fund Manager will
Investor and return the Subscription enclosed with the
not be required to give the Investor the warnings required
Application Form.
for retail clients in relation to material which may lead the
2.7 The Investor confirms to the Fund Manager that he wishes Investor to deal with or use overseas firms which are not
to be treated as a professional client in respect of his regulated by the Financial Services and Markets Act 2000
Portfolio(s) in the Fund. nor will the Fund Manager have to satisfy itself that the
2.8 The Fund Manager may provide the Services to the Investor overseas firm will deal with the Investor in an honest and
on the basis that he is an elective professional client if: reliable way. The Fund Manager will also not be required to
comply with the FSA Rules relating to restrictions on and
the content of direct offer advertisements.
30
2.12 The following rules will be limited or modified in their 2.16 The Fund Manager may have regard to an Investor’s
application to the Investor. The majority of the FSA Rules expertise when complying with the requirements under the
in relation to the form and content of financial promotions regulatory system that communications must be clear, fair
will not be applicable in respect of any financial promotion and not misleading.
communicated or approved by the Fund Manager. The 2.17 Under FSA Rules the Fund Manager has to review its
Fund Manager will not be required by the FSA to provide categorisation of clients at least once a year. As part of
the Investor with a periodic statement on the value and this review procedure the Administrator may write to the
composition of his Portfolio in the Fund where the Investor Investor.
has requested the Fund Manager not to do so or where the
Fund Manager has taken reasonable steps to establish that
the Investor does not want it. 3. Subscriptions
2.13 The Fund Manager will comply with FSA conduct of 3.1 The Investor:
business rule 11.2 and take all reasonable steps to obtain, (a) must make a Subscription in the Fund of not less than
when making investments, the best possible result for an the amount shown in the Application Form at the same
Investor taking into account the following execution factors: time as submitting his Application Form to invest in the
price, costs, speed, likelihood of execution and settlement, Fund;
size, nature or any other consideration relevant to making (b) may make further Subscriptions (in multiples of £1,000)
investments. In doing this, the Fund Manager will take into up to and including the final Closing Date; and
account the following criteria for determining the relative
(c) may not make any Subscriptions after the final
importance of these execution factors: the categorisation
Closing Date.
of the Investor as a professional client (rather than
as a retail client), the characteristics and investment 3.2 The Investor may make a withdrawal from the Fund and
objectives of the Fund as described in the Information terminate this Agreement pursuant to Clause 15.2 below.
Memorandum, the characteristics of the rules of the EIS 3.3 Subscriptions received shall be deposited (in an interest
and the characteristics of the normal commercial practice bearing client account) pursuant to Clause 7.8 pending
of the counterparties with which, and the markets in which, their investment.
the Investee Companies will do business. In particular, the
provision by counterparties of guarantees of minimum
contractual levels of return may be more important than
4. Services
price in obtaining the best possible execution result in the 4.1 The Fund Manager will manage the Fund as from the first
context of achieving the investment objectives set out in Closing Date on the terms set out in this Agreement. The
Schedule 1 to this Agreement. If the Investor is reclassified Fund Manager will exercise all discretionary powers in
as a retail client, the Fund Manager shall be entitled to relation to the selection of, or exercising rights relating
terminate this agreement pursuant to clause 15.3. to, Investments on the terms set out in this Agreement,
including, in particular the negotiation and execution
2.14 The Investor should note that he will not be covered by
of agreements and ancillary documentation relating to
certain protections applicable to retail clients in relation to
Investments in EIS Qualifying Companies.
custody services because, in subscribing to the Fund, the
Investor will by the written acknowledgment contained in 4.2 The Fund Manager will also arrange for the provision of
the Application Form, waive, as he is permitted to do under administration services in relation to the Fund with the
the FSA Rules, the protections conferred by the client Administrator and the Nominee.
money rules in respect of any money and other assets the 4.3 The Investor hereby authorises the Fund Manager (and
Fund Manager holds for the Investor. Accordingly the Fund grants to the Fund Manager a power of attorney) to act on
Manager will not be required necessarily to segregate the its behalf and in the name of the Investor or its nominee
Investor’s money from that of the Fund Manager. In such to negotiate, agree and do all such acts, transactions,
circumstances, in the event of insolvency the Investor agreements and deeds as the Fund Manager may deem
would rank only as a general creditor of the Fund Manager necessary or desirable for the purposes of making and
in respect of any uninvested money. Notwithstanding the managing Investments on behalf of the Investor and this
foregoing, it is the policy of the Fund Manager to segregate authority (and power of attorney) shall be irrevocable and
an Investor’s money from funds held for or on behalf of the shall survive, and shall not be affected by, the subsequent
Fund Manager. death, disability, incapacity, incompetence, termination,
2.15 If the Investor has a complaint regarding the Services he bankruptcy, insolvency or dissolution of the Investor. This
may raise the complaint with his independent financial authority (and power of attorney) (subject to clause 7.6) will
adviser or directly with the Fund Manager by writing to the terminate upon the complete withdrawal of the Investor
address shown in the Information Memorandum and the from the Fund.
Fund Manager shall endeavour to resolve the complaint 4.4 The Fund Manager, the Administrator and the Nominee
speedily and efficiently and will reply to the Investor in shall not except as expressly provided in this Agreement or
writing. As a professional client the Investor may lose the unless otherwise authorised, have any authority to act on
right to access the Financial Ombudsman Service. behalf of, or as the agent of the Investor.
31
5. Investment Objectives and shall, as nearly as possible, be in the proportion which the
Restrictions Investor’s Subscription bears to the total Subscriptions
by all Investors holding Portfolios of the same Set, with
5.1 In performing the Services, the Fund Manager shall have Portfolios of one Set being invested in proportion to other
regard to and shall comply with the investment objectives Sets of Portfolios being invested in the same Investee
and the investment restrictions set out in Schedule 1 to this Companies provided, however, that depending on the
Agreement. timing of investments, a Portfolio of a later Set may not
5.2 In performing the Services, the Fund Manager shall at all be invested in the same Investee Companies in which a
times have regard to: Portfolio of an earlier Set is invested. Variations may be
allowed to prevent Investors having fractions of Shares
(a) the need for an Investor’s Portfolio(s) to attract the Tax
but only in circumstances in which there can be minor
Advantages in accordance with the investment objectives
variations. If one or more of the Investors in the Fund is
and restrictions set out in Schedule 1 of this Agreement;
an accountant, lawyer or other professional person who is
and
subject to professional rules preventing him from making
(b) all Applicable Laws. an investment in a particular EIS Qualifying Company,
5.3 In the event of a gradual realisation of Investments prior then the number of Shares provisionally allocated to that
to termination of the Fund under Clause 15.1, the cash Investor or Investors shall not be acquired for any of his
proceeds of realised Investments may be placed on Portfolios in the Fund. Entitlement to Shares will be to the
deposit or invested in government securities or in other nearest whole Share rounded down and the aggregate of
investments of a similar risk profile. fractional entitlements may be held by the Nominee for the
Fund Manager.
6. Terms Applicable to Dealing 6.5 The Fund Manager may make use of soft commission
arrangements in respect of transactions undertaken for the
6.1 In effecting transactions for the Fund, the Fund Manager Fund as may be disclosed to the Investor from time to time.
will act in accordance with the FSA Rules. 6.6 The Fund Manager will act in good faith and with due
6.2 Where relevant, it is agreed that all transactions will be diligence in its choice and use of counterparties but,
effected in accordance with the rules and regulations of subject to this obligation, shall have no responsibility for
any relevant market, exchange or clearing house (and the the performance by any counterparty of its obligations in
Fund Manager shall take all such steps as may be required respect of transactions effected under this Agreement.
or permitted by such rules and regulations and/or by good 6.7 Where an Investor has elected for the Accumulator
market practice) through which transactions are executed Option the Fund Manager will on his behalf, if and to the
and to all applicable laws so that: extent that an advance assurance is obtained from HMRC
(a) if there is any conflict between the provisions of this permitting the operation of the Accumulator Option,
Agreement and any such rules, customs or applicable laws, waive dividends that would otherwise be paid to him
the latter shall prevail; and by an Investee Company if and to the extent that the
(b) action may be taken as thought fit in order to ensure articles of association of that Investee Company provide,
compliance to any such rules, customs or applicable laws. as between those Investors who take their dividends and
those on whose behalf dividends are waived, that future
An Investor should, however, be aware that the Portfolio(s)
entitlements of Investors to participate in the profits
of an Investor will be invested in a range of unlisted
available for distribution from that Investee Company or
securities and there is generally no relevant market or
on a sale of Investments in that Investee Company and
exchange and consequent rules and customs and there will
to participate in capital returned on a winding up of that
be varying practices for different securities. Transactions
Investee Company will be shared in proportion to the
in shares of such securities will be effected on the best
aggregate of (i) the amount which each Investor invests in
commercial terms which can be secured.
that Investee Company; plus (ii) the amount of all dividends
6.3 Subject to the FSA Rules, transactions for an Investor will which, but for his waiver of them, would otherwise have
be aggregated with those for other Investors pursuant to been paid to him by that Investee Company. An Investor
clause 6.4. They may also be aggregated with transactions may at any time by written notice received by the Fund
for other customers of the Fund Manager, and of its Manager revoke an election for the Accumulator Option
members, partners, employees and Associates and their (though not with retrospective effect) or reinstate an
employees and, if so, any Investments made pursuant to election previously revoked, or if no election has been
such transactions will be allocated on a fair and reasonable made, make such an election.
basis in accordance with the FSA Rules and endeavours will
be made to ensure that the aggregation will work to the
advantage of each of the Investors, but an Investor should 7. Custody
be aware that the effect of aggregation may work on some
7.1 The Fund Manager will be responsible for safeguarding
occasions to an Investor’s disadvantage.
the assets within an Investor’s Portfolio. The Administrator
6.4 Where transactions for an Investor are aggregated with will be responsible for providing administrative services
those for another Investor, the number of Shares in an in relation to the safe keeping of Investments and cash
Investee Company held as an Investment for the Investor
32
comprised in the Fund from time to time, including the (b) otherwise (where appropriate) the Fund Manager will be
settlement of transactions, collection of income and the sent a summary of the proposal and the required action to
effecting of other administrative actions in relation to the be taken (if any);
Investments. (c) if, on a rights issue, no instruction is received from
7.2 Investments will be registered in the name of the Nominee. the Fund Manager, the Nominee will allow the rights to
Investments within the Investor’s Portfolio in the Fund will lapse. Lapsed proceeds in excess of £3 will be credited to
be beneficially owned by the Investor at all times but the the Investor. Sums less than this will be retained for the
Nominee will be the legal owner of the Investments in the benefit of the Administrator. However, if nil paid rights in
Fund. The Nominee will not carry on any activity except as a secondary market are acquired for the Investor, such
instructed by the Fund Manager. rights will be taken up, unless the Fund Manager provides
7.3 The Nominee will hold any title documents or documents contrary instructions;
evidencing title to the Investments. Individual customer (d) all offers will be accepted upon going unconditional
entitlements are not identifiable by separate certificates whether or not any instructions have been received; and
or other physical documents of title or external electronic (e) entitlements to Shares will be to the nearest whole
records. In the event of a default of the Nominee, those Share rounded down and the aggregate of fractional
for whom it holds securities may share in any shortfall entitlements may be held by the Nominee for the
pro rata. The Administrator may deliver or accept delivery Administrator. If partly paid Shares are held for an Investor
of certificates and/or Crest balances on behalf of the and are the subject of a call for any due balance and no
Nominee. The Nominee holds the Investments pursuant to instruction is received, the Administrator may sell sufficient
a trust under which the interests of customers are created of the Investments to meet the call.
or extinguished when a customer makes acquisitions or
7.7 The Investor is responsible for complying with all
disposals in accordance with this Agreement. Pursuant to
requirements under the Takeover Code and to notify the
section 250(1) of the Income Tax Act shares subscribed
FSA and the Takeover Panel of dealings in relevant shares
for, issued to, held by or disposed of for an individual by
during a takeover or merger.
a nominee are treated for the purposes of the EIS as
subscribed for, issued to, held by or disposed of by the 7.8 The Fund Manager will be responsible for holding cash
individual Investor. The Nominee shall maintain at all times of the Investor but cash will not be held in accordance
a record sufficient to show the beneficial interest of the with the client money rules of the FSA. The cash balance
Investor in the whole number of Shares allocated to and held for an Investor in the Fund will be deposited with an
the cash within his Portfolio. authorised banking institution in a common account in
the name of the Fund Manager with customer trust status
7.4 Investments or title documents may not be lent to a third
together with cash balances belonging to other Investors
party and nor may there be any borrowing against the
in the Fund. The Fund Manager may debit or credit the
security of the Investments or such title documents.
account for all sums payable by or to an Investor (e.g.
7.5 An Investment may be realised in order to discharge dividends receivable in cash or amounts payable by the
an obligation of the Investor under the Agreement, for Investor) and make adjustments:
example in relation to payment of fees, costs and expenses.
(a) in respect of sums received by the Investor otherwise
7.6 The Administrator will arrange for the Investor to receive than as a result of credits properly made to the accounts
details of any meetings of investors in Investments and any initiated by the Fund Manager under the Investor’s
other information issued to investors in Investments if the Agreement; and
Investor at any time in writing requests such details and
(b) to effect settlement in respect of Investments. Share
information (either specifically in relation to a particular
dividends shall not be receivable under this Agreement
Investment or generally in respect of all Investments). The
otherwise than in cash. Interest will be payable on all
Investor shall be entitled, as a matter of right, to require
credit balances on the bank account (including credit
the Nominee to appoint the Investor as its proxy to vote
balances arising as a result of realisations of Investments)
as the Investor may see fit at any meeting of shareholders
at rates published by the Administrator. Where the Investor
in an Investee Company in which an Investment is held for
forwards a cheque to the Fund Manager for credit to his
an Investor. In the case of an Investor who is not validly
account, no interest will be credited until the cheque is
appointed as the Nominee’s proxy for the purposes of a
cleared.
meeting of the shareholders of an Investee Company in
which an Investment is held for that Investor, and upon 7.9 The Fund Manager may decide to cease to treat as money
the application of the Fund Manager to the Administrator, owed to an Investor any unclaimed cash of an Investor if
the Nominee may (but is not obliged to) appoint the Fund there has been no movement in the balance in the bank
Manager as its proxy to vote at that meeting. In the case account in a period of six years (notwithstanding any
of variations in the share capital, receipts of a notice of payments or receipts of charges, interest or similar items)
conversion, or proposal to wind up, amalgamate or take and the Fund Manager has taken reasonable steps to
over a company in which an Investment is held for the contact the Investor and to return the balance.
Investor:
(a) a bonus or capitalisation issue will be automatically
credited to an Investor’s holding;
33
8. Reports and Information Subscription:

(a) the fact as to whether or not the Investor wishes
8.1 Contract notes will be provided for each transaction for
to seek EIS Relief for the Investments in EIS Qualifying
the Investor.
Companies;
8.2 The Fund Manager shall send the Investor a report relating
(b) that he agrees to notify the Fund Manager if any
to the Fund, complying with the FSA Rules, every six
Investment is in any company with which the Investor is
months, in respect of the periods ending on or around
connected within the meaning of Section 163 and Sections
5 April and 5 October. Reports will include a measure of
166 to 177 of the Income Tax Act;
performance in the later stages of the Fund once valuations
are available for the Investments. Investments will be (c) that he agrees to notify the Fund Manager if, within
valued in accordance with appropriate IPEVC Guidelines three years of the date of issue of Shares by an EIS
from time to time prevailing. Qualifying Company, the Investor becomes connected with
the company or receives value from such company;
8.3 Details of dividends which are received in respect of
the Investments will be provided in respect of each tax (d) that he will provide the Fund Manager with his tax
year ending 5 April and appropriate statements sent district, tax reference number and National Insurance
to the Investor within sections 1105(1), (2) and (3) of the number; and
Corporation Taxes Act 2010. (e) that he is aware that he is consenting to be treated
8.4 The Fund Manager and the Administrator shall supply such as an elective professional investor and that the money
further information which is in its respective possession or he subscribes is not to be treated as client money in
under its control as the Investor may reasonably request accordance with the rules of the FSA.
as soon as reasonably practicable after receipt of such 11.2 The Investor confirms that the information stated in the
request. Application Form in these (and all other) respects is true
8.5 Any contract notes, statements, reports or information and accurate as at the date of this Agreement.
so provided by the Fund Manager or the Administrator 11.3 The Investor must immediately inform the Fund Manager
to the Investor will state the basis of any valuations of in writing of any change of tax status, other material
Investments provided. change in circumstance and any change in the information
provided in the Application Form to which Clause 11.1 above
refers.
9. Fees and Expenses
11.4 In addition, an Investor must provide the Fund Manager
The Fund Manager and the Administrator shall receive fees with any information which it reasonably requests for the
for their Services, and reimbursements of their costs and purposes of managing the Investments of the Investor
expenses, as set out in Schedule 2 to this Agreement. The pursuant to the terms of this Agreement.
Fund Manager shall be responsible for meeting all fees and
expenses of the Nominee.
12. Delegation and Assignment
10. Management and Administration The Fund Manager (and the Administrator where
reasonable and as may be agreed with the Fund Manager)
Obligations
may employ agents and subcontractors, including
10.1 The Fund Manager and the Administrator shall each devote Associates, to perform any administrative, custodial or
such time and attention and have all necessary competent ancillary services to assist the Fund Manager in performing
personnel and equipment as may be required to enable its Services, in which case it will act in good faith and
them to provide their respective Services properly and with due diligence in the selection, use and monitoring of
efficiently, and in compliance with the FSA Rules. agents. Any such employment of agents shall not affect the
10.2 Except as disclosed in the Information Memorandum liability of the Fund Manager (or the Administrator where
and as otherwise provided in this Agreement (for example appropriate) under the terms of this Agreement.
on early termination), neither the Fund Manager nor the
Administrator shall take any action which may prejudice 13. Potential Conflicts of Interest and
the tax position of the Investor insofar as it is aware of Disclosure
the relevant circumstances, and in particular which
may prejudice obtaining the Tax Advantages for the 13.1 The Fund Manager and the Administrator may provide
Fund Investments. similar services or any other services whatsoever to
any customer and neither the Fund Manager nor the
Administrator shall in any circumstance be required to
11. Obligations of the Investor account to the Investor for any profits earned in connection
11.1 A Portfolio of an Investor which is established by this therewith. So far as is deemed practicable by the Fund
Agreement is set up on the basis of the declaration made Manager or the Administrator, the Fund Manager or the
by the Investor in his Application Form which includes Administrator will use all reasonable endeavours to ensure
the following statements by the Investor in relation to his fair treatment as between the Investor and such customers
in compliance with the FSA Rules.
34
13.2 The Fund Manager, and any Associate may, subject to (m) the transaction is in the securities of a company for
FSA Rules and without prior reference to the Investor, which the Fund Manager or an Associate has underwritten,
recommend transactions in which it or an Associate has, managed or arranged an issue within the period of 12
directly or indirectly, a material interest or a relationship months before the date of the transaction; or
of any description with another party, which may involve a (n) the transaction is in securities in respect of which
potential conflict with its duty to the Investor. Neither the the Fund Manager, or a member, partner or employee
Fund Manager, nor any Associate, shall be liable to account of the Fund Manager or an Associate or its employees,
to the Investor for any profit, commission or remuneration is contemporaneously trading or has traded on its own
made or received from or by reason of such transactions account or has either a long or short position.
or any connected transactions. For example, such potential
conflicting interests or duties may arise because:
(a) the Fund Manager or an Associate may receive
14. Liability
remuneration or other benefits by reason of acting 14.1 The Fund Manager agrees, for itself and as agent for the
in corporate finance or similar transactions involving Administrator that each of them will at all times act in good
companies whose securities are held for the Investor; faith and with reasonable care and due diligence. Nothing in
(b) the Fund Manager may take an equity stake in a this paragraph 14 shall exclude any duty or liability owed by
company whose securities are held for the Investor at a the Investor under the FSA Rules.
price not below the issue price available to the Investor 14.2 The Fund Manager shall not be liable for any loss to the
subject to subparagraph (c) below; Investor arising from any investment decision made
(c) the Fund Manager’s entitlement to the performance in accordance with the investment objectives and the
incentive described in Schedule 2 of this Agreement may investment restrictions set out in Schedule 1 to this
be obtained by subscriptions for Shares by or on behalf of Agreement or for other action in accordance with this
the Fund Manager and its directors, members, partners, Agreement, except to the extent that such loss is directly
employees, Associates and others with whom the Fund due to the negligence or wilful default or fraud of the Fund
Manager may share such entitlement. Those Shares may be Manager or any of its members, partners or employees.
subscribed at a price below the issue price available to the 14.3 The Fund Manager accepts responsibility for holdings of
Investor and may dilute the returns to the Investor but only Shares in the name of the Nominee and for the acts and
to the extent of the value of the performance incentive and omissions of the Nominee, provided, however, that the
subject to the conditions described in Schedule 2; Fund Manager shall not be liable for any loss to the Investor
(d) the Fund Manager or an Associate provides investment arising from any action it takes in accordance with this
services for other customers; Agreement, except to the extent that such loss is directly
(e) any of the Fund Manager’s directors, members, partners, due to the negligence or wilful default or fraud of the Fund
employees or Associates or their employees, is or may Manager or any of its members, partners or employees.
become a director of, holds or deals in securities of, or is 14.4 Subject to Clauses 6.6 and 12, the Fund Manager shall not
otherwise interested in any company whose securities are be liable for any defaults of any counterparty, agent, banker,
held or dealt in on behalf of the Investor; nominee or other person or entity which holds money,
(f) the transaction is in securities issued by an Associate or investments or documents of title for the Fund, other than
the customer of an Associate; where such party is an Associate.
(g) the transaction is in relation to an Investment in respect 14.5 In the event of any failure, interruption or delay in the
of which the Fund Manager or an Associate may benefit performance of the Fund Manager’s or the Administrator’s
from a commission of fee payable otherwise than by the respective obligations resulting from acts, events or
Investor and/or it or an Associate may also be remunerated circumstances not reasonably within its control (including
by the counterparty to any such transaction; but not limited to acts or regulations of any governmental
or supranational bodies or authorities) or breakdown, failure
(h) the Fund Manager deals on behalf of the Investor with
or malfunction of any telecommunications or computer
an Associate;
service or systems, the Investor acknowledges that neither
(i) the Fund Manager may act as agent for the Investor in the Fund Manager nor the Administrator, as appropriate,
relation to a transaction in which it is also acting as agent shall be liable or have any responsibility of any kind for any
for the account of other customers and Associates; loss or damage thereby incurred or suffered by the Investor.
(j) the Fund Manager may, in exceptional circumstances, 14.6 The Fund Manager gives no representations or warranty
deal in investments as principal in respect of a transaction as to the performance of the Fund. Investments are high
for the Investor; risk investments, being non-Readily Realisable Investments.
(k) the Fund Manager may have regard, in exercising its There is a restricted market for such Investments and it may
management discretion, to the relative performance of therefore be difficult to sell the Investments or to obtain
other funds under its management; reliable information about their value. Investors should
(l) the Fund Manager may effect transactions involving consider the suitability of the investment objectives and
placings and/or new issues with an Associate who may be restrictions set out in Schedule 1 of this Agreement carefully
acting as principal or receiving agent’s commission. The and note the risk warnings set out in the Information
Fund Manager or an Associate may retain any agent’s Memorandum. Nothing in this Clause 14 shall exclude the
commission or discount or other benefit (including liability of the Fund Manager for its own fraud.
directors’ fees) that accrues to them;
35
15 Termination 16.3 On termination, the Fund Manager may retain and/or

realise such Investments as may be required to settle
15.1 The Fund Manager will seek to realise Investments and transactions already initiated and to pay the Investor’s
to terminate the Fund in an orderly fashion over a period outstanding liabilities, including fees, costs and expenses
of six years from the final Closing Date but it cannot be payable under Clause 9 of this Agreement (including a fair
guaranteed that Investments made can be easily realised amount determined by the Fund Manager in compensation
within this period and, even where they can be realised, for accrued performance incentive not obtained by
that this can be done on an advantageous basis. On subscriptions for Shares), the details of which are set out in
termination of the Fund, the Fund Manager shall endeavour Schedule 2 to this Agreement.
to procure that all Shares in the Investor’s Portfolio will
be sold or transferred into the Investor’s name or as
the Investor may otherwise direct. Any cash within the 17 Confidential Information
Investor’s Portfolio will be paid to the Investor. 17.1 None of the Fund Manager, the Administrator or the
15.2 An Investor is entitled to make withdrawals of Shares in Investor shall disclose to third parties or take into
his Portfolio at any time after the end of the period of consideration for purposes unrelated to the Fund
seven years beginning with the date on which the Shares information either:
in question were issued. An Investor is entitled to withdraw (a) the disclosure of which by it would be or might be a
cash in his Portfolio at any time. The Fund Manager will breach of duty or confidence to any other person; or
have a lien on all assets being withdrawn or distributed
(b) which comes to the notice of a partner or member of or
from the Fund and shall be entitled to dispose of some
an employee, officer or agent of the Fund Manager or the
or all of the same and apply the proceeds in discharging
Administrator or of any Associate but properly does not
any liability (including for any accrual of the performance
come to the actual notice of that party providing services
incentive) of the Investor to the Fund Manager. This under this Agreement.
Agreement shall terminate upon the completion of the
withdrawal from the Fund of all shares and cash which the 17.2 Each of the Fund Manager and the Administrator will at
Investor is entitled to receive under this clause 15.2. The all times keep confidential all information acquired in
consequence of the Services, except for information which:
balance of any sale proceeds and control of any remaining
Investments will then be passed to an Investor. (a) is in the public knowledge; or
15.3 If: (b) which they may be entitled or bound to disclose under
compulsion of law; or
(a) the Fund Manager gives to the Investor not less than
three months’ written notice of its intention to terminate its (c) is requested by regulatory agencies; or
role as Fund Manager under this Agreement; (d) is given to their professional advisers where reasonably
(b) the Fund Manager ceases to be appropriately necessary for the performance of their professional
authorised by the FSA or becomes insolvent; or services; or
(c) the Fund Manager is no longer able to categorise the (e) which is authorised to be disclosed by the relevant
Investor as a professional client under the FSA Rules; party; and shall use all reasonable endeavours to prevent
any breach of this Clause 17.2.
the Fund Manager shall endeavour to make arrangements
to transfer the Investments to another fund manager, in 17.3 The Administrator may verify the Investor’s identity and
which case that fund manager shall assume the role of assess the Investor’s financial standing. In doing so, a
the Fund Manager under this Agreement, failing which the credit reference agency may be consulted which will
Agreement shall terminate forthwith and, subject to Clause record a search.
16, the Investments held for the account of the Investor
shall be transferred into the Investor’s name or as the 18 Complaints and Compensation
Investor may otherwise direct.
18.1 The Fund Manager has established procedures in
accordance with the FSA Rules for consideration of
16 Consequences of Termination complaints. Details of these procedures are available from
it on request. Should an Investor have a complaint, he
16.1 On termination of this Agreement pursuant to Clause should contact the Fund Manager.
15, the Fund Manager will use reasonable endeavours
to complete all transactions in progress at termination 18.2 The protections offered by the FSA do not apply to the
Fund or the Investments of the Investor and compensation
expeditiously on the basis set out in this Agreement.
under the UK Investor Compensation Scheme will not
16.2 Termination will not affect accrued rights, existing be available.
commitments or any contractual provision intended to
survive termination and will be without penalty or other
additional payments save that the Investor will pay fees, 19 Notices, Instructions and
expenses and costs properly incurred by the Manager and Communications
the Administrator (including a fair amount determined 19.1 Notices of instructions to the Fund Manager or the
by the Fund Manager in compensation for accrued Administrator should be in writing and signed by the
performance incentive not obtained by subscriptions for Investor, except as otherwise specifically indicated.
Shares) up to and including the date of termination and
payable under the terms of this Agreement.
36
19.2 The Fund Manager or the Administrator may rely and act 24 Rights of Third Parties
on any instruction or communication which purports to
have been given by persons authorised to give instructions A person who is not a party to this Agreement has no right
by the Investor under the Application Form or subsequently under the Contracts (Rights of Third Parties) Act 1999
notified by the Investor from time to time and, unless that to enforce any term of this Agreement, but this does not
relevant party receives written notice to the contrary, affect any right or remedy of such third party which exists
whether or not the authority of such person shall have or is available apart from that Act.
been terminated.
19.3 All communications to the Investor shall be sent (whether 25 Severability
postal or electronic) to the latest address notified by the
Investor to the Fund Manager or the Administrator and If any term, condition or provision of this Agreement shall
shall be deemed received by the Investor on the second be held to be invalid, unlawful or unenforceable to any
day after posting or on the day after dispatch in the case extent, such term, condition or provision shall not affect
of electronic communication. All communications by the the validity, legality or enforceability of the remainder of
Investor shall be made in writing or (save as otherwise this Agreement.
provided) shall be made by telephone to the Fund Manager
or the Administrator, in which case conversations may
be recorded for the avoidance of any subsequent doubt. 26 Governing Law
Communications sent by the Investor will be deemed
This Agreement and all matters relating thereto shall be
received only if actually received by the Fund Manager
governed by and construed in accordance with English Law
or the Administrator. Neither the Fund Manager nor the
and the parties submit to the non-exclusive jurisdiction of
Administrator will be liable for any delay or failure of
the English Courts.
delivery (for whatever reason) of any communication sent
to the Investor.
20 Unsolicited real-time financial

promotion
The Fund Manager may communicate an unsolicited real-
time financial promotion (i.e. interactive communications
such as a telephone call or electronic mail promoting
Investments) to the Investor.
21 Amendments
The Fund Manager may amend the terms and conditions
in this Agreement by giving the Investor not less than 10
business days’ written notice. The Fund Manager may also
amend these terms by giving the Investor written notice
with immediate effect if such is necessary in order to
comply with HMRC requirements, in order to maintain the
EIS Relief or in order to comply with the FSA Rules.
22 Data protection
All data which the Investor provides to the Fund Manager
and the Administrator is held by that party subject to the
Data Protection Act 1998. The Investor agrees that the
Fund Manager and the Administrator may pass personal
data to each other and to other parties insofar as is
necessary in order for them to provide their Services as set
out in this Agreement and to the FSA and any regulatory
authority which regulates them and in accordance with all
other Applicable Laws.
23 Entire agreement
This Agreement, together with the Application Form,
comprises the entire agreement of the Fund Manager and
its Associates with the Investor relating to the provision of
the Services.
37
Schedule 1 Annual trail commission will be paid to the Investor’s

Investment Objectives and Restrictions authorised financial adviser, if any, for up to six years and is
capped at 3% of the amount the Investor subscribes to the
Investment Objectives of the Fund Fund. The administration of annual trail commission will be
1 To generate capital gains and to provide Investors managed by Foresight Fund Managers Limited which will
with the Tax Advantages associated with EIS Investments. maintain a register of advisers entitled to trail commission.
2 At least 80% by cost of Investments shall be in Shares If the Investor changes his adviser, he should inform
which entitle Investors to the reliefs from taxation available Foresight Fund Managers Limited of the details of his
under the EIS subject to their personal circumstances. new adviser, who will be entitled to receive the annual
Investment Restrictions of the Fund trail commission instead. Advisers should keep a record
of Application Forms submitted bearing their stamp to
1 In carrying out its duties hereunder in respect of the Fund,
substantiate any claim for Annual trail commission.
regard shall be had, and all reasonable steps taken, by the
Fund Manager to comply with such policies or restrictions 3 Fund Management Charges
as are required in respect of EIS Investments in order to Annual management charge 1.5%
attract the reliefs from taxation under the EIS as may be Secretarial charge 0.3% (subject to an
prescribed by HMRC from time to time. index linked minimum of
2 In particular, but without prejudice to the generality of £60,000 in aggregate)
the above statements, the restrictions for the Fund are Foresight will bear any legal, accounting and other
as follows: fees incurred by the Fund in connection with potential
(a) No more than 25% of the Subscription of an Investor Investments which do not proceed to completion and
will be invested in any one Investee Company; may retain for its own benefit any arrangement fees
(b) Investors should be aware that the Fund’s Investments and director’s or monitoring fees which it receives in
will include non-Readily Realisable Investments. There connection with Investments.
is a restricted market for such Investments and it may 4 Performance Incentive
therefore be difficult to deal in the Investments or to obtain Foresight will be entitled to a performance incentive fee,
reliable information about their value; payable from the proceeds of realising the Fund’s assets.
(c) in the event of a gradual realisation of Investments This fee is only payable once an Investor has received
prior to termination of the Fund under Clause 15.1, the cash proceeds of at least £1 per £1 invested. The performance
proceeds of realised EIS investments may be placed on incentive fee is calculated as 20% of distributions to
deposit or invested in fixed interest government securities the Investor in excess of £1 per £1 invested until total
or other investments of a similar risk profile. Proceeds will distributions reach 130p per £1 invested and 30% above
be paid out on termination of the Fund or in instalments that level.
in advance of termination, as determined by the The performance incentive may be obtained by
Fund Manager. subscriptions for Shares by or on behalf of the Fund
Manager and its directors, employees and Associates or
as a charge deducted from realisation proceeds due to the
Schedule 2
Investor. In the event of the Investor making a withdrawal of
1 Fees and Expenses in respect of the Fund Shares pursuant to Clause 15.2 the Investor shall be liable
The charges described below are payable by Investee for a charge equal to a fair amount determined by the
Companies and not directly by the Fund or the Investor Fund Manager in compensation for accrued performance
save in the event of a withdrawal as noted in paragraph 4 incentive not obtained by subscriptions for Shares.
below. The percentages shown below will be applied to the
5 Expenses
amount invested by the Fund in each Investee Company.
The charges will accrue from 1 April 2011 and will be payable The Fund Manager shall be entitled to charge each Investee
quarterly in advance from the date of investment in the Company a pro-rata proportion of expenses reasonably
relevant Investee Company. VAT will be added where incurred by the Manager in respect of the administration
applicable. of the Fund.
2 Fundraising Charges 6 Interest pending investment
Initial charge 5.5% Interest earned on cash balances held for the Investor in
Annual trail commission 0.5% the Fund will be added to the Investor’s Portfolio.
The Fund Manager will receive the initial charge and
will pay all costs of establishing the Fund, including
introductory commission to authorised financial advisers,
all legal and taxation costs incurred in creating the Fund,
the preparation and issue of this document and any other
direct expenses wholly incurred in establishing the Fund.
38
39
Appendix 3: Glossary
In this document these expressions and abbreviations have the following meanings
unless the context otherwise requires.
“Accumulator Option” the option exercisable by completing the appropriate box on the Application Form or
otherwise by notice in writing to Foresight to authorise Foresight on behalf of the Investor to
waive dividends that would otherwise be paid by an Investee Company if and to the extent
that, with the sanction of an advance assurance from HMRC, the articles of association of
that Investee Company provide, as between those Investors who take their dividends and
those who waive their dividend entitlements, that future entitlements to participate in the
profits available for distribution from that Investee Company or on a sale of Investments in
that Investee Company and to participate in capital returned on a winding up of that Investee
Company will be shared in proportion to the aggregate of (i) the amount which each Investor
invests that Investee Company; plus (ii) the amount of all dividends which, but for his waiver
of them, would otherwise have been paid to him by that Investee Company.
“Administrator” Foresight Fund Managers Limited or (subject to prior notification to Investors) such other
person as the Fund Manager may appoint to provide, safe custody and, on behalf of the Fund
Manager, administration services in respect of the Fund;
“AIM” the Alternative Investment Market of the London Stock Exchange;
“Applicable Laws” all relevant UK laws, regulations and rules, including those of any government or of the FSA;
“Application Form” an application form to invest in the Fund completed by a prospective Investor in the form
provided by the Fund Manager;
“Associate” any person or entity which (whether directly or indirectly) controls or is controlled by the
Fund Manager (for the purpose of this definition “control” shall refer to the ability to exercise
significant influence over the operating or financial policies of any person or entity);
“Business Property Relief” relief from IHT pursuant to sections 103-114 Inheritance Tax Act 1984;
“Capital Gains Tax Deferral Relief” relief by way of deferral of CGT (Section 150C and Schedule 5B of the Taxation of Chargeable
Gains Act 1992);
“Carry Back Relief” Income tax relief for the full amount of an investment in an EIS Qualifying Company up to
£500,000, multiplied by the lower rate of tax and set against an individual’s income tax
liability for the tax year preceding that in which Shares are issued, save to the extent that
income tax relief has already been claimed under the EIS for the preceding year;
“Complying Fund” a complying fund within the meaning of Article 2 of the Schedule to the Financial
Services and Markets Act 2000 (Collective Investment Schemes) Order 2001;
“CGT” Capital gains tax;
“Closing Date” a date by which Subscriptions may be accepted by the Fund Manager for the creation of
Portfolios;
“Corporate Venturing Scheme” The Corporate Venturing Scheme as set out in Schedule 15 Finance Act 2000;
“EIS” Enterprise Investment Scheme, as set out in the Income Tax Act;
“EIS Qualifying Company” a company that meets the EIS requirements regarding EIS Relief and Capital Gains
Deferral Relief;
“EIS Relief” relief from income tax under EIS;
“Feed-in-Tariffs” various government-regulated prices to producers of qualifying renewable electricity for
varying periods (25 years for qualifying Solar Power Systems under the FIT Scheme in the UK);
“Fees and Expenses” the fees and expenses set out in Schedule 2 to the Investor’s Agreement;
“FIT Scheme” the UK Scheme for Feed-in-Tariffs introduced in 2010 in accordance with sections 41 to 43 of
the Energy Act 2008;
“Foresight or Fund Manager” Foresight Group CI Limited (a private company registered in Guernsey under company
number 51471, incorporated on 12 February 2010 and whose registered office is at
La Plaiderie House, La Plaiderie, St Peter Port, Guernsey GY1 4HE) except where the
context refers expressly or by implication to Foresight Group LLP and except where the
acts, obligations and activities attributed to ‘Foresight’ or the Fund Manager are regulated
by the FSA in which event the reference is to Foresight Group LLP;
“FSA” The Financial Services Authority;
“FSA Rules” the FSA’s rules made under powers given to the FSA by the Financial Services and Markets
Act 2000;
“Fund” The Foresight Solar EIS Fund which describes the aggregate of all the Investors’ Agreements;
40
Appendix 3: Glossary
“HMRC” HM Revenue & Customs;

“IHT” Inheritance Tax;
“Income Tax Act” Income Tax Act 2007;
“Individual Roll Over Option” The Individual Roll Over Option described on page 10;
“Information Memorandum” this document;
“Intermediary” a person/company who promotes and markets the Fund and arranges the investment for
the Investor;
“Investee Company” a Company in which the Fund invests;
“Investment” investment made through the Fund;
“Investor” an individual (and certain trustees) who complete(s) an Application Form in the form
enclosed with this Information Memorandum which is accepted by the Fund Manager and so
enters into an Investor’s Agreement and invests through the Fund;
“Investor’s Agreement” an Investor’s agreement to be entered into by each Investor, in the terms set out in Appendix
2 of this Information Memorandum;
“IPEVC Guidelines” The International Private Equity and Venture Capital Valuation Guidelines;
“Loss Relief” relief in respect of income tax for allowable losses pursuant to section 131 of the Income
Tax Act;
“Net Asset Value” the value of the net assets attributable to Shares as determined from the audited annual
accounts of the Investee Companies
“Nominee” Foresight Fund Managers Limited or a wholly owned subsidiary of the Fund Manager or
such other nominee as may be appointed by the Fund Manager from time to time to be the
registered holder of Investments;
“PLUS” the market for trading in unquoted securities operated by PLUS Markets Group plc;
“Portfolio” the monies an Investor subscribes to the Fund on or before a Closing Date plus all
Investments made through the Fund which are allocated to an Investor and registered in the
name of the Nominee on his behalf and which are subscribed out of such monies plus all
income and capital profits arising therefrom; and so that, where an Investor subscribes more
than once in the Fund: (i) all Subscriptions made within a single period which falls between
two Closing Dates shall be regarded as part of the same Portfolio; and (ii) Subscriptions
which are made within periods which fall between three or more Closing Dates shall be
regarded as separate Portfolios of that Investor;
“Readily Realisable Investment” a government or public security denominated in the currency of the country of its issuer
or any other security which is admitted to official listing on an Exchange in an EEA State,
regularly traded on or under the rules of such an Exchange, or regularly traded on or
under the rules of a recognised investment exchange or (except in relation to unsolicited
realtime financial promotions) designated investment exchange, or a newly issued security
which can reasonably be expected to fall within the above categories when it begins to be
traded (this term does not include AIM or PLUS traded investments, nor does it include
unlisted securities);
“Services” the services provided under Clause 4 of the Investor’s Agreement;
“Set” portfolios created from Subscriptions accepted by the Fund Manager on or before the same
Closing Date;
“Shares” shares in an Investee Company subscribed for by the Fund on behalf of Investors;
“Solar Power Systems” a system which produces electricity from daylight;
“Subscription” a subscription to the Fund by way of an Application Form pursuant to Clause 3 of the
Investor’s Agreement;
“Tax Advantages” the various tax advantages, including EIS Relief, arising from Investments in Shares in EIS
Qualifying Companies;
“Three Year Period” the period beginning on the date the Shares in an Investee Company are issued and
ending three years after that date, or three years after the commencement of the Investee
Company’s trade, whichever is later; and,
“Total Return” the aggregate value of an investment or collection of investments comprising net asset
value, valued where appropriate in accordance with IPEVC Guidelines, plus the aggregate of
all distributions (both revenue and capital) made.
41
Application Forms, Advisor’s Certificate
and Schedule
Application Form and Instructions for Completing this
Important Note Application Form
This Application Form incorporates by reference the Information Before completing this Application Form, please carefully review
Memorandum. Unless otherwise stated or as the context shall the following documents:
otherwise require, defined terms and expressions used in this
• the Information Memorandum; and
Application Form have the meanings ascribed to them in the
Information Memorandum. • the Investor’s Agreement.
The minimum investment is £10,000. Then follow the steps listed 1 - 5 below.
1. Please complete the form in type or use BLOCK CAPITALS
(save for your signature) in black/blue permanent ink, and
Who can apply? sign any changes you make. Do not erase any text or use
You can apply for an investment in the Foresight Solar EIS Fund white-out. If you have any queries, please contact Foresight
if you can be categorised by the Fund Manager as a professional on 01732 471812.
client under the rules of the Financial Services Authority. 2. Arrange for an independent financial adviser, authorised
A prospective investor can be categorised as a professional by the Financial Services Authority, to carry out the
client if it is a per se professional client within the meaning assessments and customer due diligence measures
of the FSA’s conduct of business sourcebook rule COBS 3.5.2 referred to above and to execute the certificate on
or if Foresight is satisfied that the prospective investor can page 47. If you do not have an independant financial
be treated as an elective professional client in accordance advisor, please complete the assessment form on page 43
with the FSA’s conduct of business sourcebook rule COBS so that we can satisfy ourselves that you are elegible to be
3.5.3 and thus as a person who is capable of making its own categorised as a professional client.
investment decisions and understanding the risks involved, has If you are not applying through an independent financial
received a clear written warning of the protections and investor adviser and your application is for the Sterling equivalent
compensation rights it may lose and has stated in writing, in of Euro 15,000 or more (or is one of a series of linked
a separate document, that it is aware of the consequences applications the value of which exceeds the amount)
of losing such protections. Confirmation by an authorised the verification requirements of the Money Laundering
intermediary will normally be sufficient to satisfy Foresight. Regulations will apply and verification of the identity of
Alternatively, the prospective investor will need to provide the applicant (and if a cheque is drawn by a third party)
evidence of his or her investment experience. is required and you must ensure that the following
documents are enclosed with your Application Form:
Independent Financial Advice, Assessment • A certified copy of either the passport or the driving
and Customer Due Diligence Procedures licence of the applicant (and cheque payer if different);
and
You must arrange for an independent financial adviser,
authorised by the Financial Services Authority, to carry out: • An original bank or building society statement or utility
bill (no more than 3 months old), or recent tax bill, in the
(i) the assessment required to enable you to be categorised as name of the applicant (and cheque payer if different).
an elective professional client (unless you can be categorised as Copies should be certified by a solicitor or bank. Original
a per se professional client); and documents will be returned by post at your own risk.
(ii) the customer due diligence procedures required by The 3. Execute and date this Application Form on page 43
Money Laundering Regulations 2007 within the guidance for or page 45.
the UK Financial Sector issued by the Joint Money Laundering
Steering Group. 4. Send the entire Application Form by post to Foresight using
the following address:
Your independent financial adviser must provide the certificate
requested on page 47. Foresight Group LLP
ECA Court, South Park
Sevenoaks, Kent, TN13 1DU
5. Retain a copy of the completed Application Form.
42
Application Form
Private Investors
Before completing this Application Form you should read the Acknowledgements and Representations and make the appropriate
deletion in the first bullet point in paragraph ‘n’ over the page. Once completed in full, please attach your cheque made payable
to ‘Foresight Group LLP’ and send by post to Foresight Group LLP, ECA Court, South Park, Sevenoaks, Kent, TN13 1DU.
Foresight will decide, in its absolute discretion, to accept or reject the application and will notify you of its decision. No
Application Form will be accepted by Foresight until it has issued a written confirmation of acceptance.
Please complete the following
Title: Forenames:
Surname(s): Date of Birth:
Nationality: Town & Country of Birth:
Permanent Residential Address:
Post Code:
Daytime Phone: Tax District:
National Insurance No: Tax Ref No:
Length of occupation at the above address:
If the length of occupation is not more than 3 years then please provide your previous residential address:
Post Code:
Please tick the appropriate Box
Accumulator Option Income Option
invest In the Foresight Solar EIS Fund
I hereby apply to invest £ (In figures) in the Foresight Solar EIS Fund
£ (In Words)
Signature: Please print name: Date:
By completing and signing this Application Form, you confirm that your identity may be verified by electronic means such as
the use of data held by specialised data agencies.
43
Acknowledgements
and representations
a If your application is accepted, you agree to observe, i You agree that by the execution of this Application Form,
perform and be bound by the provisions of the you grant to the Fund Manager a power of attorney to
Investor’s Agreement. make, execute, sign, acknowledge, swear to, deliver, record
b You confirm that you personally possess sufficient and file as your attorney and on your behalf: any other
knowledge, experience and expertise in financial and business certificate or other instrument or document of any
business matters (including experience with investments of a kind that the Fund Manager deems necessary or desirable
similar nature to an investment in the Fund) to be capable of to accomplish the business, purpose and objectives of
evaluating the merits and risks of an investment in the Fund. the Fund, and that is required by any applicable law; any
agreement or instrument which the Fund Manager deems
c You, if investing as an elective professional client, confirm appropriate to (i) admit you as an Investor in the Fund in
that you wish to invest as an elective professional client accordance with the terms of the Investor’s Agreement;
under the rules of the FSA and that you are aware of (ii) effect the addition, substitution or removal of the Fund
the consequences of losing the protection and investor Manager pursuant to the Investor’s Agreement; or (iii) effect
compensation rights that you lose by participating in the an amendment or modification to the Investor’s Agreement
Fund as an elective professional client. adopted in accordance with the terms of the Investor’s
d You waive the protections conferred by the client money Agreement; provided always, to the fullest extent permitted
rules in respect of any money the Fund Manager holds for by law, this power of attorney is irrevocable and shall
you. In doing so you acknowledge that the Fund Manager survive, and shall not be affected by, your subsequent death,
will not be required necessarily to segregate your money disability, incapacity, incompetence, termination, bankruptcy,
from that of the Fund Manager and that in the event of insolvency or dissolution. This power of attorney will only
insolvency you would rank only as a general creditor of terminate upon your complete withdrawal from the Fund.
the Fund Manager in respect of any uninvested money. j You agree that the foregoing representations, warranties,
Notwithstanding the foregoing you acknowledge that it is the agreements and acknowledgments shall survive the date of
policy of the Fund Manager to segregate Investors’ money your admission to the Fund and this Application Form shall
from funds held for or on behalf of the Fund Manager. be binding upon and inure to the benefit of the parties and
e You represent and warrant that (a) if it is a trust, it is duly their successors and permitted assignees.
authorised and qualified to invest in the Fund and the k You agree that if this application is made by more than
individual or individuals signing this Application Form on its one person, your obligations shall be joint and several
behalf have been duly authorised by it to do so or; (b) if you and the representations, warranties, agreements and
are an individual, that you have reached the age of majority acknowledgments herein shall be deemed to be made by
under the laws of your country of nationality or domicile; and be binding upon such persons and their successors
and, in the case of a trust or an individual, this application, and assignees.
upon acceptance by the Fund Manager, will be its or your
legal, valid and binding obligation, enforceable against it or l You agree that any term or provision of this Application
you in accordance with the terms of the Investor Agreement. Form which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
f You acknowledge that this Application Form is not such invalidity or unenforceability without rendering invalid
transferable or assignable. or unenforceable the remaining terms or provisions of this
g You confirm your agreement that this Application Form be Application Form or affecting the validity or enforceability of
governed by and construed in accordance with the laws any of the terms or provisions of this Application Form in any
of England and Wales and that the courts of England and other jurisdiction.
Wales shall have exclusive jurisdiction to hear and determine m You undertake to notify the Fund Manager immediately if
any suit, action or proceedings and to settle any disputes there are ever relevant circumstances of which the Fund
which may arise out of or in connection with this Application Manager should be aware in relation to managing your
Form and, for such purposes, you irrevocably submit to the Portfolio(s).
jurisdiction of such courts. In addition, you irrevocably waive
any objection which you might now or hereafter have to the n You confirm, in relation to your investment in the Fund, that:
courts of England and Wales being nominated as the forum • you wish / do not * wish to seek EIS Relief;
to hear and determine any such suit, action or proceedings ( *delete as appropriate)
and to settle any such disputes, and agree not to claim that • you are applying on your own behalf;
any such court is not a convenient or appropriate forum.
• you will notify the Fund Manager of any Investment with
h You confirm that you will, at the request of the Fund which you are connected within section 163 and sections
Manager, forthwith enter into and execute such formal deeds 166 to 177 of the Income Tax Act; and
of adherence whereby you will agree to observe, perform
and be bound by the provisions of the Investor’s Agreement • you will notify the Fund Manager if, within three years of
as the Fund Manager may require. the date of issue of Shares by an EIS Qualifying Company,
you become connected with that EIS Qualifying Company
or receive value from it.
44
Application Form
Trustees
(“The Company”)
Before completing this Application Form you should read the Acknowledgements and Representations over the page. Once
completed in full, please attach your cheque made payable to ‘Foresight Group LLP’ and send by post to Foresight Group LLP,
ECA Court, South Park, Sevenoaks, Kent, TN13 1DU.
Foresight will decide, in its absolute discretion, to accept or reject the application and will notify you of its decision. No
Application Form will be accepted by Foresight until it has issued a written confirmation of acceptance.
IF YOU DO NOT RECEIVE AN ACKNOWLEDGEMENT OF YOUR APPLICATION WITHIN 10 DAYS OF

SENDING IT TO FORESIGHT, PLEASE CONTACT FORESIGHT ON 01732 471812.
Trusts If the application is by a trust, please provide the following information:

Full Name:
Nature and purpose of the trust (e.g. discretionary, testamentary, bare):
Country of establishment:
Names of all trustees:
Name and address of any protector or controller:
Post Code:
Name and address of any protector or controller:
If the trustees are regulated in the UK, please state the name of the regulator: (Otherwise please provide a Certified Copy of the trust deed)
Signature:
Please provide:
• A Certified Copy of the mandate form or trustee resolution listing the trustees (or equivalent) with authority to give the Fund
Manager instructions concerning the use or transfer of assets; and
• Constitutional documents for any corporate trustee.
invest In the Foresight Solar EIS Fund
You hereby apply to invest £ (In figures) in the Foresight Solar EIS Fund
£ (In Words)
Signature: Please print name: Date:
45
Acknowledgements
and representations
a If your application is accepted, you agree to observe, i You agree that by the execution of this Application Form,
perform and be bound by the provisions of the Investor’s you grant to the Fund Manager a power of attorney to
Agreement. make, execute, sign, acknowledge, swear to, deliver, record
b You confirm that you personally possess sufficient and file as your attorney and on your behalf: any other
knowledge, experience and expertise in financial and business certificate or other instrument or document of any
business matters (including experience with investments of a kind that the Fund Manager deems necessary or desirable
similar nature to an investment in the Fund) to be capable of to accomplish the business, purpose and objectives of
evaluating the merits and risks of an investment in the Fund. the Fund, and that is required by any applicable law; any
agreement or instrument which the Fund Manager deems
c You, if investing as an elective professional client, confirm appropriate to (i) admit you as an Investor in the Fund in
that you wish to invest as an elective professional client accordance with the terms of the Investor’s Agreement;
under the rules of the FSA and that you are aware of (ii) effect the addition, substitution or removal of the Fund
the consequences of losing the protection and investor Manager pursuant to the Investor’s Agreement; or (iii) effect
compensation rights that you lose by participating in the an amendment or modification to the Investor’s Agreement
Fund as an elective professional client. adopted in accordance with the terms of the Investor’s
d You waive the protections conferred by the client money Agreement; provided always, to the fullest extent permitted
rules in respect of any money the Fund Manager holds for by law, this power of attorney is irrevocable and shall
you. In doing so you acknowledge that the Fund Manager survive, and shall not be affected by, your subsequent death,
will not be required necessarily to segregate your money disability, incapacity, incompetence, termination, bankruptcy,
from that of the Fund Manager and that in the event of insolvency or dissolution. This power of attorney will only
insolvency you would rank only as a general creditor of terminate upon your complete withdrawal from the Fund.
the Fund Manager in respect of any uninvested money. j You agree that the foregoing representations, warranties,
Notwithstanding the foregoing you acknowledge that it is the agreements and acknowledgments shall survive the date of
policy of the Fund Manager to segregate Investors’ money your admission to the Fund and this Application Form shall
from funds held for or on behalf of the Fund Manager. be binding upon and inure to the benefit of the parties and
e You represent and warrant that (a) if it is a trust, it is duly their successors and permitted assignees.
authorised and qualified to invest in the Fund and the k You agree that if this application is made by more than
individual or individuals signing this Application Form on its one person, your obligations shall be joint and several
behalf have been duly authorised by it to do so or; (b) if you and the representations, warranties, agreements and
are an individual, that you have reached the age of majority acknowledgments herein shall be deemed to be made by
under the laws of your country of nationality or domicile; and be binding upon such persons and their successors and
and, in the case of a trust or an individual, this application, assignees.
upon acceptance by the Fund Manager, will be its or your
legal, valid and binding obligation, enforceable against it or l You agree that any term or provision of this Application
you in accordance with the terms of the Investor Agreement. Form which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
f You acknowledge that this Application Form is not such invalidity or unenforceability without rendering invalid
transferable or assignable. or unenforceable the remaining terms or provisions of this
g You confirm your agreement that this Application Form be Application Form or affecting the validity or enforceability of
governed by and construed in accordance with the laws any of the terms or provisions of this Application Form in any
of England and Wales and that the courts of England and other jurisdiction.
Wales shall have exclusive jurisdiction to hear and determine m You undertake to notify the Fund Manager immediately if
any suit, action or proceedings and to settle any disputes there are ever relevant circumstances of which the Fund
which may arise out of or in connection with this Application Manager should be aware in relation to managing your
Form and, for such purposes, you irrevocably submit to the Portfolio(s).
jurisdiction of such courts. In addition, you irrevocably waive
any objection which you might now or hereafter have to the
courts of England and Wales being nominated as the forum
to hear and determine any such suit, action or proceedings
and to settle any such disputes, and agree not to claim that
any such court is not a convenient or appropriate forum.
h You confirm that you will, at the request of the Fund
Manager, forthwith enter into and execute such formal deeds
of adherence whereby you will agree to observe, perform
and be bound by the provisions of the Investor’s Agreement
as the Fund Manager may require.
46
Application Form
IFAs
To be completed by the Investor’s Financial Adviser
We certify to Foresight Group LLP in the terms of paragraphs 1 and 2 below:
1. We have undertaken an adequate assessment of the Investor’s expertise, experience and knowledge such as to give
reasonable assurance to Foresight Group LLP in the light of the nature of the transactions or services envisaged that the
Investor is capable of making its own investment decisions and understanding the risks involved in a participation in the Fund.
2. We have applied customer due diligence measures on a risk-sensitive basis in respect of the Investor to the standard required
by The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money
Laundering Steering Group and we certify that we have:
(a) identified and verified the identity of the Investor on the basis of documents, data and information obtained from a reliable
and independent source;
(b) identified, where there is a beneficial owner who is not the Investor, the beneficial owner and have taken adequate
measures, on the basis of documents, data and information obtained from a reliable and independent source, to verify his
identity so that we know who the beneficial owner is, including, in the case of a legal person, trust or similar arrangement,
measures to understand the ownership and control structure of the person, trust or arrangement and the identity of the
beneficial owner and details of the ownership and control structure are set out in the Schedule hereto; and
(c) obtained information on the purpose and intended nature of the Investor’s proposed investment in the Foresight Solar EIS
Fund, as the case may be, which information is set out in the Schedule hereto.
Email:
We consent to Foresight relying on this certificate
Firm Name: Interactive Investor Trading Ltd
Contact Name:
Address: Interactive Investor Trading Ltd, Standon House, 21 Mansell Street, London
Post Code: E1 8AA
Telephone: Fax:
Email:
FSA registration no: 190551
Signature: Date:
47
Application Form
IFAs
Schedule: To be completed by the Investor’s Financial Adviser where the Beneficial

Owner is not the Investor
Please complete:
We have applied customer due diligence measures on a risk-sensitive basis in respect of the Investor to the standard required by
The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering
Steering Group and we certify that we have identified that the beneficial owner is:
and (in the case of a legal person, trust or similar arrangement), the ownership and control structure of the person, trust or
arrangement is:
F
The purpose of the investment is:
Professional Client Assessment Form: Private investors
S
In order for you to participate in the Fund, we must undertake an assessment of your expertise, experience and knowledge so as
to give us reasonable assurance, in light of the nature of investments in complying funds such as The Foresight Solar EIS Fund,
that you are capable of making your own investment decisions and understanding the risks involved.
Please answer the following questions providing details, where required, in the space provided.
1. Please give your most current/most recent occupation
EIS
2. Please give details of any university degrees or professional qualifications which you hold
3. Please list any current company directorships you hold/have held in the last five years
Current:
Last Five Years:
4. Do you hold a portfolio of shares? Are these shares in listed or unlisted companies?
5. Please describe the type of investments you have made within the last five years. (e.g. EIS, VCT, FTSE 100)
6. Have you been in a network or syndicate of business angels for at least six months prior to today’s date? Please give details
7. Please provide any further information (e.g. details of your wider experience or background) which you think might be
relevant to our assessment of you as a professional client in relation to investments, particularly in EIS or similar funds
48
Corporate Information
Directors (Non-executive) Investment Manager

John Maples (Chairman) and Promoter
Mike Liston Foresight Group LLP
Tim Dowlen ECA Court
24-26 South Park
Sevenoaks
Registered Office and Kent TN13 1DU
Head Office
ECA Court
24-26 South Park Auditors
Foresight
Sevenoaks Ernst & Young LLP
Kent TN13 1DU 1 More London Place
London SE1 2AF
Company Registration Number

7289280 Solicitors and VCT Tax Advisers
Solar
RW Blears LLP
125 Old Broad Street
Website London EC2N 1AR
www.foresightgroup.eu
Broker
Telephone Number Singer Capital Markets Limited
EIS Fund
01732 471 800 1 Hanover Street
Information Memorandum with Application Form London W15 1YZ
Company Secretary and

Accountant Sponsor
Foresight Fund Managers Limited BDO LLP
ECA Court 125 Colmore Row
24-26 South Park Birmingham B3 3SD
Sevenoaks
Kent TN13 1DU Receiving Agent
The City Partnership (UK) Limited
Registrars Thistle House
Computershare Investor Services PLC 21-23 Thistle Street
P.O. Box 859 Edinburgh EH2 1DF
The Pavilions
Bridgwater Road Bankers
Bristol BS99 1XZ
Barclays Bank plc
54 Lombard Street
London EC3P 3AH
45
Foresight Solar VCT PLC
Foresight Group
ECA Court
24-26 South Park
Sevenoaks
Kent
TN13 1DU
United Kingdom
t:+44 (0) 1732 471800
f:+44 (0) 1732 471810
www.foresightgroup.eu
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Foresight Solar EIS Fund

Targeting capital growth

March 2011 and your investment should be outside the scope of

Since establishing our solar power team in 2007, we have

Feed-in Tariffs amount, in effect, to a government guarantee

The Enterprise Investment Scheme is one of a very small

Fund Name Foresight Solar EIS Fund

Income tax relief Inheritance Tax Relief

Individual Roll-Over Option

What is solar power?

Insolation – solar energy reaching the UK

Units are kilowatt-hours per m2 per year

Vital statistics for some examples of PV Solar Systems:

Capacity Output in kilowatt-hours annually*

School rooftop 100 86,900 135,000 140,000

Warehouse rooftop 300 260,700 405,000 420,000

Ground-mounted 2,000 1,738,000 2,700,000 2,800,000

10000 What returns can be expected from the portfolio?

Foresight aims to achieve returns sufficient to exceed the

What competition will Foresight face? What if there’s a double-dip recession?

Since 2006 Foresight has built a highly-experienced team of 12 investment managers

Fund Timeframe Effective Net Total Return*** IRR with initial

Fund Manager and Promoter

Administrator and Nominee

Solicitors and Tax Advisers

T: 020 3192 5691

Please note that this is only a condensed summary of

8. Reports and Information Subscription:

15 Termination 16.3 On termination, the Fund Manager may retain and/or

20 Unsolicited real-time financial

Schedule 1 Annual trail commission will be paid to the Investor’s

“HMRC” HM Revenue & Customs;

Please complete the following

Surname(s): Date of Birth:

Nationality: Town & Country of Birth:

Permanent Residential Address:

Daytime Phone: Tax District:

National Insurance No: Tax Ref No:

Length of occupation at the above address:

Please tick the appropriate Box

Accumulator Option Income Option

invest In the Foresight Solar EIS Fund

Signature: Please print name: Date:

IF YOU DO NOT RECEIVE AN ACKNOWLEDGEMENT OF YOUR APPLICATION WITHIN 10 DAYS OF

Trusts If the application is by a trust, please provide the following information:

Nature and purpose of the trust (e.g. discretionary, testamentary, bare):

Names of all trustees:

Name and address of any protector or controller:

Name and address of any protector or controller:

invest In the Foresight Solar EIS Fund

Signature: Please print name: Date:

To be completed by the Investor’s Financial Adviser

We certify to Foresight Group LLP in the terms of paragraphs 1 and 2 below:

Firm Name: Interactive Investor Trading Ltd

Post Code: E1 8AA

FSA registration no: 190551

Schedule: To be completed by the Investor’s Financial Adviser where the Beneficial

Professional Client Assessment Form: Private investors