Thames Ventures VCT 1 : Interim Report and Financial Statements

THAMES VENTURES VCT 1 PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT

30 September 2023

Contents

	Page
Shareholder Information	1
Chairman's Statement	2
Investment Adviser's Report	4
Unaudited Income Statement	7
Unaudited Balance Sheet	8
Statement of Changes in Equity	9
Unaudited Cash Flow Statement	11
Summary of Investment Portfolio	12
Notes to the Unaudited Financial Statements	14
Additional Information	19

Shareholder Information

Financial Summary

	30 Sep	31 Mar	30 Sep	Nov
	2023	2023	2022	2013
	pence	pence	pence	pence
	Unaudited	Audited	Unaudited	Unaudited
Net Asset Value per share ("NAV")	48.5	51.8	58.8	100.4
Cumulative dividends paid since Nov 2013	45.5	44.5	43.0	-
Total Return (NAV plus cumulative dividends paid per share)	94.0	96.3	101.8	100.4

Dividend Policy

The Company has a stated target of paying a dividend of at least 4% of net assets per annum.

Forthcoming Dividends

	Date payable	Pence per share
Interim dividend	2 February 2024	1.0p

Dividends will be paid by the Company's registrar, The City Partnership, on behalf of the Company. Shareholders who wish to have dividends paid directly into their bank account, rather than by cheque to their registered address, can update their instructions at the Investor Hub currently at:

thames-ventures-vcts.cityhub.uk.com/login

A Dividend Mandate Form is also available from this site that can be completed and emailed to [e-mail] or sent to The City Partnership (UK) Limited, The Mending Room, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH. If you have any queries, The City Partnership can be contacted by the email address above or on 01484 240910.

The Company operates a Dividend Reinvestment Scheme to allow Shareholders to reinvest their dividends in new shares and obtain income tax relief on that new investment. Shareholders can opt-in to the Dividend Reinvestment Scheme through the Investor Hub using the details shown above.

Share Scam Warning

We are aware that a significant number of shareholders of VCTs managed by Foresight and other VCT managers continue to receive unsolicited telephone calls from a company purporting to be acting on behalf of a client who is looking to acquire their VCT shares at an attractive price. We believe these calls to be a "Boiler Room Scam". Shareholders are warned to be very

suspicious if they receive any similar type of telephone call.

The FCA has published information about such scams at www.fca.org.uk/scamsmart

If you have any concerns, please contact Foresight at [e-mail] on 020 3667 8181.

1

Chairman's Statement

I present the Company's unaudited Half-Yearly Financial Report for the six months ended 30 September 2023.

Following an eventful year ended 31 March 2023 for the Company, with the main Investment Adviser changing from Downing LLP to Foresight Group LLP, the six-month period ended 30 September 2023 has been more settled from a management perspective. However, performance has been disappointing, with the UK investment environment continuing to remain challenging.

Net asset value and results

As at 30 September 2023, the Company's NAV stood at 48.5p, a decrease of 2.3p (or 4.4%) compared to the 31 March 2023 year-end position, after adding back the 1.0p dividend paid during the period.

The loss attributable to equity shareholders for the period was £4.4 million, comprising a revenue gain of £0.2 million and a capital loss of £4.6 million.

Adviser's Report on pages 4 to 6.

Dividends

The Company has a stated policy of seeking to pay dividends equivalent to at least 4% of NAV each year. The Board has declared an interim dividend of 1.0p (equivalent to 2.1% of NAV at 30 September 2023) which will be paid on 2 February 2024 to Shareholders on the register as at 29 December 2023.

The above interim dividend will take the total dividends paid since the merger in November 2013 to 46.5p per share.

Running costs

Shareholders are reminded that the Company benefits from a running cost cap provided by the Investment Adviser, whereby any costs above 2.6% of net assets per annum are met by the Adviser by way of a reduction in their fees.

Investment activity and performance

Over the last six months the Company has made new and follow-on investments totalling £2.4 million, as well as receiving proceeds of £3.3 million from exit events across the portfolio.

At the period end, the Company held a portfolio of 63 active investments, with 54% in unquoted growth (by value), 26% held in quoted growth and 20% in unquoted yield focused investments. A total of 31 investments are held in the quoted growth category which are either quoted on AIM, the Main Market or the AQSE Growth Market and have a value of £16.9 million. This includes one investment in new company, DXS International Plc. The 32 unquoted investments have a value of £48.9 million.

The reduction in value of the Company's investments over the period was driven by a large reduction (£4.1 million) in the valuation of Cornelis Networks Inc., with the Company's position being heavily diluted as a result of being unable to participate in the most recent funding round, as the portfolio company no longer meets the gross assets test in order to be VCT qualifying. Limitless Limited also experienced a decrease in valuation of £625,000, due to a co-investor remaining on the UK sanctions list. Furthermore, the valuation of the quoted portfolio fell by £1.9 million during the period, following the trend of the FTSE AIM All Share market.

Offsetting the valuation decreases above, there were some positive valuation movements seen from Carbice Limited, Cambridge Touch Technologies and FundingXchange Limited. Further details can be found in the Investment

Special Administration of the Company's

Custodian of Quoted Assets

Since September 2020, the Company has used IBP Markets Limited ("IBP") as custodian for its quoted investments. Appointing a custodian is a requirement of the FCA, and IBP is an FCA authorised and regulated wholesale broker, providing custody services and access to equity and fixed income securities for non-retail clients (which includes the Company). On 13 October 2023, the FCA published a supervisory notice under section 55L(3)(a) of the Financial Services and Markets Act 2000, imposing certain restrictions on IBP. On the same date, IBP applied to the High Court and special administrators were appointed. The special administrators have yet to publish an estimated outcome statement and therefore the full impact is currently unknown. The Investment Adviser is actively collaborating with the special administrators to reach a resolution and will communicate with Shareholders when further information becomes available. Whilst this is being resolved, the Company is unable to trade any of its AIM and fully listed portfolio on the quoted market.

The Investment Adviser is in regular dialogue with the special administrators. The outcome remains subject to change particularly as additional claims may be made on custody assets and client money and there remains a risk to the positions. However, considering the information made available to the Company at the date of this report, there is currently little indication that there will be a materially adverse impact to Shareholders with respect to the custody assets. The position with respect to client money remains to be determined, but total cash at IBP represented less than 1.5% of NAV as at 30 September.

2

Chairman's Statement (continued)

Fundraising

With the uncertainty brought about by the special administration of the custodian of the Company's quoted stocks, we have not been in a position to launch a fundraise so far this year. Once clarity is achieved on the IBP situation, the Board will be able to consider options for fundraising and will communicate this with Shareholders.

Share buybacks

The Company usually operates a policy of buying back its own shares that become available in the market, subject to regulatory and liquidity factors. The Board review these on a regular basis and will make appropriate adjustments as it sees fit.

Historically, we have been able to rely on the fact that we could liquidate part of our quoted portfolio if there was ever a shortage of cash. Unfortunately, given the IBP situation noted above, we would not currently be able to do this if required in the short term. Although our cash position remains reasonably healthy at the moment, the Board have reviewed the investment pipeline and cash flow forecast for the next 12 months and deem it prudent to be cautious with regard to the Company's uninvested funds and not undertake any buybacks. The Board will review this decision at the end of February 2024 when the IBP situation is clearer.

Sunset clause

A "sunset clause" applies to the current approved scheme for EIS and VCT tax reliefs. This clause provides that income tax relief will expire on subscriptions made for VCT shares on or after 6 April 2025, unless the legislation is amended to make the scheme permanent, or the "sunset clause" is extended.

The UK Chancellor confirmed in the autumn statement that the government remains committed to ensuring early- stage, innovative companies have access to the investment they need to grow and develop. As a result it was announced on 22 November 2023 that the government will legislate to extend the Enterprise Investment Scheme ('EIS') and Venture Capital Trusts ('VCT') to 2035.

Directorate

It was earlier communicated that within this period, Stuart Goldsmith, the last remaining founding Director of the Company, would be stepping down from the Board. My fellow Directors and I express our gratitude for his dedicated work throughout the years. On December 12, 2022, as part of a planned succession, Atul Devani officially joined the Board, contributing his VCT experience and expertise in the technology sector, enriching the Board's capabilities going forward.

Change of Company Secretary and Registered Office

I am pleased to announce that Foresight Group LLP was appointed as Company Secretary effective from 1 September 2023, succeeding Grant Whitehouse. I would like to take this opportunity to thank Grant for his many years of dedication and service to the Company.

Outlook

Businesses continue to face multiple challenges in the UK and internationally. The investment team will continue to monitor the existing portfolio companies closely to ensure management address the macroeconomic challenges appropriately and have the support that they need to do so. The Board hopes to see the ventures investment team continue to leverage the full benefits of the regional office network and other resources of Foresight Group.

Chris Kay

Chairman

21 December 2023

3

Investment Adviser's Report

We present our Investment Adviser's Report for the six- month period to 30 September 2023.

Unquoted Portfolio

Investment focus

In line with the current VCT regulations, the Company focus has for some years now been on young unquoted growth businesses. This focus will continue and other areas of Thames Ventures VCT 1's portfolio are expected to continue to reduce in size as suitable exit opportunities arise and proceeds are reinvested in the core area.

Investment activity

During the period, the Company invested a total of £1.9 million as further funding into two existing unquoted portfolio companies.

There were no investments made into new unquoted companies during the period, however, shortly after the period-end, £1.4 million was invested in a new company, Inoviv Limited. Inoviv has a long-term data play in drug discovery and trials, having developed novel precision biomarker technology which helps pharmaceutical customers run drug trials more efficiently. This investment will enable Inoviv to further accelerate their commercial plans, including facilitating the development of tests across more diseases.

The above excludes activity in the quoted portfolio, which is detailed in isolation on page 5 of this report.

The two follow-on investments are summarised as follows:

A further £1.75 million was invested into existing portfolio company, Cambridge Touch Technologies Limited, a company developing pressure sensitive multi touch technology.

A total of £150,000 was invested into Cambridge Respiratory Innovations Limited (now trading as Tidal Sense) who have developed a patent‐protected ultrahigh sensitivity handheld capnometer to provide actionable insights at the point of care for the diagnosis, monitoring and management of cardiorespiratory conditions.

There were 11 full exits of unquoted investments in the period, as summarised below:

Imagen Limited, a Software as a Service ("SaaS") video management platform which holds both current and archive footage for major sporting organisations and news outlets. The company was sold for initial cash consideration of £1.7 million at a gain over cost of £0.7 million. There is also £0.2 million deferred consideration, taking total proceeds to £1.9 million and a total gain over

cost of £0.9 million. DiA Imaging Analysis, a leading provider of advanced Artificial Intelligence based solutions for ultrasound analysis, was also sold in the period for initial proceeds of £0.2m versus cost invested of £0.2m. There is also a deferred element of consideration meaning a gain over cost will be realised on this exit.

There were further proceeds of £0.3 million received in relation to the winding up of two investments in the unquoted yield-focused portfolio, Downing Pub EIS ONE Limited and Pearce & Saunders Limited. No further proceeds are anticipated on these investments.

Portfolio valuation

Excluding the portfolio of quoted investments, there were net valuation losses of £2.5 million over the period, which included £0.1 million of unrealised foreign exchange gains.

Eleven companies in the portfolio recorded a combined valuation gain of £3.7 million in the period. However, this was offset by a number of companies reporting combined valuation losses totalling £6.2 million. This is driven by the ongoing challenges for businesses operating in the UK and associated restriction on access to capital. The £3.7 million of uplift in valuation over the period is driven by the following investments.

Carbice Limited (£1.6 million), the developer of a suite of products based on its carbon material called Carbice Carbon which is primarily used as thermal management solutions to enable greater thermal conductivity, has continued to progress well during the period, with recurring revenues continuing to grow and continued progress on fundraising. This movement includes the impact of FX as this is a USD-denoted investment.

Cambridge Touch Technologies Limited (£862,000), a company developing pressure sensitive multi touch technology. The value of this investment was uplifted to reflect the valuation of the round which completed during the period.

FundingXchange Limited (£718,000), an SME funding platform and B2B technology provider which enables online lending. After a challenging twelve months, this company has negotiated additional funding to deliver its growth plan. The valuation of this investment has therefore been uplifted to reflect this.

Offsetting these valuation uplifts, are a number of valuation decreases across the unquoted portfolio.

4

Investment Adviser's Report (continued)

Portfolio valuation (continued)

Cornelis Networks, Inc. (£4.1 million) is a technology provider delivering purpose-builthigh-performance fabrics for High Performance Computing, Analytics and Artificial Intelligence to leading commercial, scientific, academic, and government organizations. The valuation was amended to reflect a funding round which closed in the period in which Thames Ventures VCT 1 Plc was unable to participate due to the company not meeting the gross assets test to be VCT-qualifying. Not participating led to a significant dilution of the Company's stake which has been reflected in the movement in valuation. This movement includes the impact of FX as this is a USD-denoted investment.

Limitless Limited (£625,000), the developer of a crowdsourced customer service platform, was subject to a valuation reduction as a result of one of the co-investors being on the UK Sanctions List giving rise to a funding risk.

CommerceIQ Inc. (£394,000), the pioneer in helping brands win on retail ecommerce channels. Their unified platform applies machine learning and automation across marketing, supply chain, and sales operations to help brands gain market share profitably. This valuation movement is simply a reflection of current market conditions. The company continues to perform well growing revenues during the period and supported by a very strong balance sheet. This movement includes the impact of FX as this is a USD-denoted investment.

Data Centre Response Limited (£344,000), a provider of uninterruptable power supply systems. A discount has been applied to the EBITDA multiple approach to reflect the challenging market conditions which has led to an unrealised fair value loss on this investment.

There are a number of smaller valuation movements which partially offset one another for the half-year period, ultimately resulting in an additional net decrease in value of £238,000.

Quoted Portfolio

Investment focus

The Company continues to hold a portfolio of quoted investments, most of which are quoted on the AIM market. The team at Downing LLP continue to provide management services in respect of these investments under a subcontract agreement with Foresight.

Investment activity

At 30 September 2023, the quoted portfolio comprised 31 investments with a value of £16.9 million. There was only one material transaction in the period - the part sale of

Tracsis plc realising a gain £548,000. The decision to take profits in this holding was to reduce the large exposure to the Company after the share price had performed well. Tracsis remains one of the larger positions in the portfolio, reflecting our confidence in this niche transport software business.

There were two investments made into quoted assets during the period: new investment DXS International Plc (£300,000) and existing investment Deepmatter Group Plc

(£159,000).

Portfolio valuation

The quoted portfolio continued to be volatile in the period, following the trend of the FTSE AIM All Share market which was down 11.6%, which drove a £1.9 million fall in net valuation in the period.

Ten companies in the portfolio recorded a combined valuation gain of £0.8 million, however this was offset by a number of companies reporting combined valuation losses totalling £2.7 million. Driving the gains in the period were uplifts in Anpario Plc (£402,000) and Craneware Plc (£243,000) however material unrealised losses include Tracsis Plc (£547,000), Genincode Plc (£292,000), Libertine Holdings Plc (£254,000), Inland Homes Plc (£210,000) and Impact Healthcare REIT Plc (£210,000). The remaining portfolio recorded a total unrealised loss of £1.0 million. Whilst the companies continued to trade resiliently, this was not necessarily reflected in share prices. Since the period end, share prices have begun to recover into the December pre-Christmas trading period.

Although our view continues to be that the coming months are likely to remain challenging from a macroeconomic perspective, there is certainly renewed interest in UK smaller companies with the FTSE AIM All Share up over 9% since the beginning of November. The Investment Adviser is pleased to note that at the date of this report, the quoted portfolio had recovered by £0.7 million since the period end, representing a 4.4% uplift. We reiterate that the quoted portfolio contains good quality companies, with plenty of scope for self-help, strong balance sheets, and significant prospects for growth over the long-term which we hope will translate into an improved longer term share price performance.

5

Investment Adviser's Report (continued)

Outlook

The six months to 30 September 2023 has continued to see increasingly challenging market conditions, with inflation and global interest rates still high, which has had an inevitable impact on the portfolio.

Further to this, there have been a number of events impacting the valuation of unquoted investments which have been unavoidable, as detailed above, and the volatility of the quoted portfolio remains in line with FTSE AIM All Share market trends.

Despite this, we continue to see improved performance from certain portfolio companies and anticipate this will continue. Further to this, the economic situation has recently seen its first glimpse of hope with the UK's annual inflation rate falling sharply in October, its lowest level for two years. This being said, we are cognisant that the market has been, and will continue to be, tough for many of these companies. The portfolio companies that survive this economic turbulence may be better placed than beforehand, due to tighter cost and cash management.

We continue to expand our team to enable us to take full advantage of the opportunities we are seeing, whilst continuing to support the existing portfolio companies.

Thames Ventures Team

Foresight Group LLP

21 December 2023

6

Unaudited Income Statement

For the six months ended 30 September 2023

		Six months ended		Six months ended		Year ended
		30 September 2023		30 September 2022		31 March 2023
			(Unaudited)			(Unaudited)		(Audited)
		Revenue	Capital	Total	Revenue	Capital	Total	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Income		1,065	-	1,065	2,710	-	2,710	3,031
Losses on investments	10	-	(4,175)	(4,175)	-	(3,728)	(3,728)	(12,351)
		1,065	(4,175)	(3,110)	2,710	(3,728)	(1,018)	(9,320)
Investment management fees		(449)	(449)	(898)	(275)	(275)	(550)	(1,598)
Other expenses		(376)	-	(376)	(388)	-	(388)	(812)
Return/(loss) on ordinary
activities before tax		240	(4,624)	(4,384)	2,047	(4,003)	(1,956)	(11,730)
Tax on total comprehensive
income and ordinary activities		(24)	24	-	(78)	78	-	-
Return/(loss) attributable to
equity shareholders	5	216	(4,600)	(4,384)	1,969	(3,925)	(1,956)	(11,730)
Basic and diluted return per
share		0.1p	(2.5)p	(2.4)p	1.1p	(2.2)p	(1.1)p	(6.5)p

The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS102"). There are no other items of comprehensive income. The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 and updated in July 2022 by the Association of Investment Companies ("AIC SORP").

7

Unaudited Balance Sheet

as at 30 September 2023

			Company number: 03150868
		30 Sep	30 Sep	31 Mar
		2023	2022	2023
		£'000	£'000	£'000
	Note	(Unaudited)	(Unaudited)	(Audited)
Fixed assets
Investments	10	65,871	81,130	71,227
Current assets
Debtors		7,393	5,896	6,828
Cash at bank and in hand		13,580	20,051	15,282
		20,973	25,947	22,110
Creditors: amounts falling due within one year		(1,077)	(1,298)	(1,354)
Net current assets		19,896	24,649	20,756
Net assets		85,767	105,779	91,983
Capital and reserves
Called up share capital	8	1,770	1,799	1,774
Capital redemption reserve	9	71	1,711	32
Share premium account	9	2,252	81,236	428
Funds held in respect of shares not yet allotted	9	-	16	-
Special reserve	9	85,122	15,873	88,813
Capital reserve realised	9	(5,627)	-	-
Revaluation reserve	9	3,619	6,024	2,592
Revenue reserve	9	(1,440)	(880)	(1,656)
Equity shareholders' funds		85,767	105,779	91,983
Basic and diluted net asset value per share	7	48.5p	58.8p	51.8p

8