TIDMVEN2
RNS Number : 5499B
Ventus 2 VCT PLC
29 October 2009
Ventus 2 VCT plc
Half-yearly Financial Report
for the six month period ended 31 August 2009
Registered No: 5667210
Chairman's Statement
I am pleased to present the half-yearly financial report of Ventus 2 VCT plc
(the "Company") for the six month period ended 31 August 2009.
Net Asset Value, Results and Dividends - Ordinary Shares
At the period end, the net asset value of the ordinary share fund of the Company
stood at GBP10,374,000 or 92.9 pence per ordinary share. Revenue profit
attributable to ordinary shareholders for the period was GBP80,000 or 0.71 pence
per ordinary share. The capital loss attributable to ordinary shareholders for
the period was GBP91,000 or 0.81 pence per ordinary share, resulting in a total
loss attributable to ordinary shareholders for the period of GBP11,000 or 0.10
pence per ordinary share.
The value of investments held at 31 August 2009 in the ordinary share fund was
GBP8,915,000 compared to GBP2,751,000 at 31 August 2008. The Investment
Manager's report gives details of investments made during the period, together
with information about the valuation of all investee company holdings within the
portfolio.
The revenue income generated in the ordinary share fund during the period
comprised interest earned on mezzanine loan stock, cash deposits and UK treasury
bills. Total revenue income for the six months to 31 August 2009 was GBP178,000
compared to GBP236,000 for the six months to 31 August 2008. The decrease in
revenue income was attributable to a decrease in interest income from cash on
deposit and UK treasury bills, which declined as cash has now been substantially
deployed to acquire share capital in and to make mezzanine loans to investee
companies, however in contrast the interest earned from mezzanine loans has
increased.
The Company declared and paid an annual dividend of 3.00p per ordinary share for
the year to 28 February 2009. This was paid as an interim dividend of 1.50 pence
per share on 14 January 2009 and a final dividend of 1.50 pence per share on 14
July 2009.
The Company has declared an interim dividend of 1.50 pence per ordinary share
which will be paid on 13 January 2010 to all shareholders on the register as at
the close of business on 11 December 2009.
Net Asset Value and Results - "C" Shares
On 12 February 2009 the Company launched a "C" share offer jointly with Ventus
VCT plc. The offer closed on 30 June 2009 having allotted "C" shares to the
value of GBP6,924,686.
At the period end, the net asset value of the "C" share fund of the Company
stood at GBP6,483,000 or 93.6 pence per "C" share. Revenue loss attributable to
"C" shareholders for the period was GBP25,000 or 0.40 pence per "C" share. The
capital loss attributable to "C" shareholders for the period was GBP36,000 or
0.61 pence per share, resulting in a total loss to "C" shareholders for the
period of GBP61,000 or 1.01 pence per share.
The revenue income relating to the "C" share capital generated during the period
was interest earned on cash on deposit and UK treasury bills.
The Company has not declared an interim dividend in respect of the "C" Shares
for the period.
Investments
The Company's Investment Manager, Climate Change Capital Limited, continues to
be actively engaged in managing the portfolio of existing investments and in
identifying and negotiating potential investment opportunities to invest the new
"C" share capital that has been raised. The investments made, dividends paid and
"C" share capital raised constitute the important events of the period.
As at the date of this report, the Company holds investments in 18 companies
attributable to the ordinary share fund, with total investment value of GBP8.9
million. The Company has operated throughout the period in compliance with HM
Revenue & Customs VCT regulations.
The Company has not yet made investments from the cash raised by the "C" share
offer. However, the Investment Manager has secured two exclusivity agreements
which offer the Company the opportunity to invest up to GBP1.85 million. A third
exclusivity agreement is currently being sought for investment of a further
GBP1.25 million. The Investment Manager is also assessing several other
potential investments.
Principal Risks and Uncertainties
Under the Financial Services Authority's Disclosure and Transparency Rules, the
Directors are required to identify those material risks to which the Company is
exposed and take appropriate steps to mitigate those risks. Described below are
those risks, other than the inherent risks associated with investment, which the
Directors consider to be material. The Directors do not expect that the risks
and uncertainties presented will change significantly over the current financial
year.
* Failure to meet the investment requirements for compliance with HM Revenue &
Customs VCT regulations
The Board mitigates this risk by regularly reviewing investment management
activity and by obtaining pre-approval from HM Revenue & Customs for each
investment.
* Inadequate control environment at service providers
The Board mitigates this risk by only appointing service providers of a high
standing under agreements that set out their responsibilities and by obtaining
assurances from them that all exceptions have been reported to the Board.
* Non-compliance with the Listing Rules of the Financial Services Authority,
Companies Act legislation, HM Revenue & Customs VCT regulations and other
applicable regulations
The Board mitigates this risk by employing external advisers fully conversant
with applicable statutory and regulatory requirements who report regularly to
the Board on the Company's compliance.
VCT qualifying status
The Company retains PricewaterhouseCoopers LLP to review its compliance with VCT
regulations. The Directors are satisfied that the Company has continued to
fulfil the conditions for maintaining VCT status.
Responsibility statement
The Directors acknowledge responsibility for the interim results and approve
this half-yearly report. The half-yearly report has not been audited or reviewed
by the Company's auditor. The Directors confirm that to the best of their
knowledge:
(a) the condensed financial statements have been prepared in accordance with
International Accounting Standard 34 ("IAS 34") Interim Financial Reporting, and
give a true and fair view of the assets, liabilities, financial position and
loss of the Company as required by the Disclosure and Transparency Rules ("DTR")
4.2.4R;
(b) the interim management report, included within the Chairman's statement
and Investment Manager's report, includes a fair review of the information
required by DTR 4.2.7R, the significant events of the first half of the year and
the principal risks and uncertainties for the remaining six months of the year;
and
(c) the report includes a fair review of related party transactions and
changes thereto, as is required by DTR 4.2.8R.
The responsibility statement has been approved by the Board.
David Pinckney
Chairman
28 October 2009
Investment Manager's Report
Climate Change Capital Limited (the "Investment Manager") is pleased to present
a review of the investment activities of the Company since the last annual
report.
Summary of Investments - Ordinary Shares
As at the date of this report, the Company holds investments in the ordinary
share fund in 18 companies with a total investment value of GBP8.9 million.
GBP4.6 million of the investments held are in investee companies which are now
trading and operating their assets. The Company also holds investments valued at
GBP3.5 million in companies whose assets are in construction and expected to
become operational over the course of the next year and a further GBP0.8 million
of investments in earlier stage opportunities. These are typically investee
companies that are seeking planning permissions on new sites.
It is the accounting policy of the Company to hold its investments at fair
value. In this report, investee companies whose assets have been fully
constructed and have passed an initial satisfactory operational period are
valued using a discounted cash flow methodology to establish their fair value.
The periodic adjustment to the valuation of these investments is primarily
attributable to the changes in long term projected value of the energy and
associated benefits that are generated by the assets when compared to the
original assumptions used at the last valuation date and changes to the discount
factors applied to the resultant cash flows. The fair values of the other
investee companies are not considered to be materially different from the
historical cost of investment.
The following table shows total investments made from the ordinary share fund as
at 31 August 2009, as at the date of this report and the total amount invested
and contractually committed as at the date of this report.
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| | | | | Investment | Additions/(disposals) | Unrealised | Investment | Investment | Investment | Investment |
| | | | | value as | in the six months to | gains/(losses) | cost as at | value as | value as | value & |
| | | | | at | | in the six | | at | at | commitments |
| | | | | | | months to | | | | as at |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Company | | Details | | 28 | 31 | 31 | 31 | 31 | 28 | 28 |
| name | | | | February | August | August | August | August | October | October |
| | | | | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| | | | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Craig Wind | * | 10 |Q | 502 | - | (13) | 349 | 489 | 489 | 489 |
| Farm | | megawatt | | | | | | | | |
| Limited | | wind | | | | | | | | |
| | | farm | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Firefly | * | Renewable |Q | 200 | - | - | 200 | 200 | 200 | 200 |
| Energy | | energy | | | | | | | | |
| Limited | | | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Achairn | * | 6 |Q | 1,118 | - | - | 1,118 | 1,118 | 1,118 | 1,118 |
| Energy | | megawatt | | | | | | | | |
| Limited | | wind | | | | | | | | |
| | | farm | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| A7 | * | 6 |Q | 333 | - | - | 333 | 333 | 333 | 333 |
| Lochhead | | megawatt | | | | | | | | |
| Limited | | wind | | | | | | | | |
| | | farm | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Broadview | * | Wind |Q | 1,000 | - | - | 1,000 | 1,000 | 1,000 | 1,000 |
| Energy | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Redimo LFG | * | 10 |Q | 1,000 | - | - | 1,000 | 1,000 | 1,000 | 1,000 |
| Limited | | megawatt | | | | | | | | |
| | | landfill | | | | | | | | |
| | | gas | | | | | | | | |
| | | portfolio | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| PBM Power | | Woodchip |Q | 287 | - | - | 287 | 287 | 287 | 287 |
| Limited | | biomass | | | | | | | | |
| | | plant | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Spurlens | | Wind | | 75 | 12 | - | 87 | 87 | 87 | 87 |
| Rig Wind | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Olgrinmore | * | Wind | | 30 | - | - | 30 | 30 | 34 | 34 |
| Limited | | farm | | | | | | | | |
| | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Redeven | * | Wind | | 90 | 102 | - | 192 | 192 | 192 | 192 |
| Energy | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Osspower | | Hydro-electric | | 150 | - | - | 150 | 150 | 150 | 178 |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Small | | Hydro-electric | | 58 | 150 | - | 208 | 208 | 208 | 250 |
| Hydro | | development | | | | | | | | |
| Company | | | | | | | | | | |
| Limited | | | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| RPS Dargan | | Landfill | | 950 | - | - | 950 | 950 | 950 | 950 |
| Road | | gas | | | | | | | | |
| Limited | | generator | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Sandsfield | | Biomass | | 898 | 500 | - | 1,398 | 1,398 | 1,398 | 1,398 |
| Heat & | | generator | | | | | | | | |
| Power | | | | | | | | | | |
| Limited | | | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Twinwoods | | Biomass | | 1,000 | - | - | 1,000 | 1,000 | 1,000 | 1,000 |
| Heat & | | generator | | | | | | | | |
| Power | | | | | | | | | | |
| Limited | | | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Kettering | | Wind | | 125 | - | - | 125 | 125 | 125 | 125 |
| East | | farm | | | | | | | | |
| Energy | | development | | | | | | | | |
| Limited | | | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| EcoGen | | Wind | | 200 | - | - | 200 | 200 | 200 | 200 |
| Limited | | farm | | | | | | | | |
| | | developer | | | | | | | | |
| | | & | | | | | | | | |
| | | consultancy | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Wind Power | * | Wind | | - | 148 | - | 148 | 148 | 148 | 150 |
| Renewables | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Catfield | * | Wind | | 27 | (27) | - | - | - | - | - |
| Wind Power | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Potash | * | Wind | | 33 | (33) | - | - | - | - | - |
| Wind Farm | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Stalham | * | Wind | | 6 | (6) | - | - | - | - | - |
| Wind Power | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Meridian | * | Wind | | 18 | (18) | - | - | - | - | - |
| Wind Power | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Witton | * | Wind | | - | - | - | - | - | - | - |
| Wind Farm | | farm | | | | | | | | |
| Limited | | development | | | | | | | | |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
| Total | | | | 8,100 | 828 | (13) | 8,775 | 8,915 | 8,919 | 8,991 |
+------------+----+----------------+---+------------+-----------------------+----------------+------------+------------+------------+-------------+
Q - Investment complies with HM Revenue & Customs VCT regulations (qualifying
investment).
Ventus 3 VCT plc has invested in each of the companies in which Ventus 2 VCT plc
has invested.
* - A company in which Ventus VCT plc has also invested.
Together with Ventus 2 VCT plc, Ventus 3 VCT plc and Ventus VCT plc are managed
by Climate Change Capital Limited.
Craig Wind Farm Limited
The Company holds an investment valued at GBP489,000 in Craig Wind Farm Limited,
a company that operates a ten megawatt wind farm in the Scottish Borders. The
site became operational in October 2007.
Performance over the first full year of operation was below budget, primarily
due to a series of
technical failures with a wind turbine, resulting in a claim against the
warranty from the turbine manufacturer for a substantial part of the lost
revenue.
There has been a substantial improvement in the performance of the wind turbines
in the second year of operation as the manufacturer has resolved the majority of
the faults that affected production levels in the first year. The Manager is
continuing to keep the situation under close review in conjunction with the
other shareholders and Craig Wind Farm Limited's technical consultants.
Craig Wind Farm Limited has also become aware of the potential release of
further grid capacity at its existing connection point. An application has been
made to the network operator to secure this additional capacity, in conjunction
with a planning application, which if successful would allow Craig Wind Farm
Limited to increase the capacity at the site by the addition of a further two
wind turbines. The Manager is working with the other shareholders to progress
this potential extension to the generating capacity.
The Company owns 6.25% of the ordinary shares in Craig Wind Farm Limited and has
also provided a GBP169,000 mezzanine loan facility. Mezzanine interest payments
are being made in accordance with the loan agreement and the first dividend
distribution is expected to take place in the second half of 2010.
There has been a small GBP13,000 downward revaluation of the holding in Craig
Wind Farm Limited as a result of a reduction in the long term forward price
assumption for the sale of the electricity and associated benefits.
Firefly Energy Limited
Firefly Energy Limited is the parent company of a group of trading subsidiaries
that have entered into long term power purchase agreements with customers for
41.7 megawatts of generating capacity across five wind farm developments. The
five wind farm projects are fully operational and generating revenues for the
group.
Firefly Energy Limited has also entered into contracts with seven renewable
energy companies to provide power purchase agreement administration services.
There is a strong probability that further contracts of this nature will be
secured, providing an ancillary income stream to the business alongside the
income from the five main long term power purchase agreements.
The Company holds an investment of GBP200,000 in Firefly Energy Limited by way
of a GBP100,000 subscription for 25% of the ordinary share capital and a
shareholder loan which has capital outstanding of GBP100,000. The fair value of
the equity investment is not considered to be materially different from the
historic cost of investment.
Achairn Energy Limited
Achairn Energy Limited is a company operating a six megawatt wind farm in
Caithness, Scotland. The site became operational on schedule in May 2009.
Whilst the wind farm has only been operational for a short period of time, the
early results are encouraging, with performance in line with budget. The
turbines in use at this site are the same as those being used at the A7
Greendykeside Limited site (in which Ventus VCT plc has invested) and therefore
the Manager believes there is a reasonable expectation of similar high levels of
operational availability.
The Company has invested GBP498,666 to acquire 20.2% of the ordinary share
capital in Achairn Energy Limited and has provided GBP619,565 by way of a
mezzanine loan facility.
As the wind farm has only recently started operating, the fair value of this
investment is not considered to be materially different from the historic cost
of investment.
A7 Lochhead Limited
A7 Lochhead Limited is a company operating a six megawatt wind farm in
Lanarkshire, Scotland. The site became operational on schedule in June 2009.
As with the Achairn Energy Limited site, although the wind farm has only been
operational for a short period of time, the early results are encouraging with
performance in line with budget. The turbines in use at this site are again the
same as those being used at the A7 Greendykeside Limited site and therefore the
Manager believes there is a reasonable expectation of similar high levels of
operational availability.
The Company has invested GBP273,102 to acquire 10% of the ordinary share capital
in A7 Lochhead Limited and has provided a further GBP60,000 by way of a
mezzanine loan facility.
As the wind farm has only recently started operating, the fair value of this
investment is not considered to be materially different from the historic cost
of investment.
Broadview Energy Limited
The Company holds an investment valued at GBP1.0 million in Broadview Energy
Limited by way of a GBP100,000 subscription for ordinary share capital and a
GBP900,000 shareholder loan. Broadview Energy Limited is an established wind
farm development company and operator of small wind sites. The investment
represents a holding of approximately 1.16% in the ordinary shares of Broadview
Energy Limited.
Broadview Energy Limited is in the process of constructing a three turbine wind
farm in Aberdeenshire which is expected to become operational by the end of 2009
and has recently secured planning consent for a further site in the north east
of England which will also consist of three wind turbines.
Planning applications for three further sites are awaiting approval and several
further developments are expected to be submitted during 2010.
Broadview Energy Limited has not declared or made any payment of dividends as
the strategy of the business is currently to reinvest any trading revenues back
into the development of further wind farm opportunities. Payments of interest on
the shareholder loan are expected to commence in 2010 once the Aberdeenshire
wind farm has become operational.
Redimo LFG Limited
The Company has invested GBP1,000,000 for 25% of the ordinary share capital of
Redimo LFG Limited. Redimo LFG Limited owns and operates a portfolio of
generating stations which use landfill gas to produce electricity for export
onto the grid. Generating electricity from methane gas arising from landfill
operations is one of the most established sources of renewable energy in the UK.
Over recent months Redimo LFG Limited has continued to invest substantially in
the upgrading of the gas collection and generating equipment, in particular at
the largest of the four sites within the portfolio. There have been a number of
operational issues at this largest site, resulting in higher levels of downtime
on some of the older engines than has been budgeted. The higher than expected
operational downtime is primarily due to increased levels of pollutants within
the methane gas which have a corrosive effect on engine parts leading to
increased costs of servicing and unplanned maintenance work.
The Manager has been working closely with Redimo LFG Limited's technical
consultants to address these issues and to identify suitable long term solutions
which are in the course of being implemented. There was an increase in the
installed generating capacity earlier in the year and a recent upgrade to the
gas collection system. A consistent period of stable generation has yet to be
achieved. For this reason, in line with the Company's investment valuation
policy, the investment has not been revalued using a discounted cash flow
methodology. However, the Company does not consider that the value of the
investment has been impaired. The fair value of the investment is not considered
to be materially different from historic cost.
Dividends are distributed by Redimo LFG Limited on an annual basis and the next
dividend is expected to be paid in February 2010.
PBM Power Limited
The Company has invested GBP287,000 for 12.5% of the ordinary shares in PBM
Power Limited, a company operating a waste wood biomass electricity generating
plant in Lincolnshire. The
plant is fuelled by waste wood and therefore the scheme will benefit from
enhanced support from the Renewable Obligation policy mechanism.
The plant became operational in April 2009, which was approximately five months
later than scheduled as a result of delays in provision of the grid connection
by the network operator. There have been some operational issues with the plant
in the early months of full commercial production which are currently in the
process of being rectified by the plant manufacturer under warranty. This has
involved plant shutdown to allow the remedial works to take place. The technical
issues that have arisen are expected to be resolved by these works.
Together with the delayed start, the remedial works shutdowns have led to
significantly lower than expected generation volumes compared to the original
year one operating budget.
As a result of the lower than expected revenue in the first contractual year,
PBM Power Limited is currently in negotiation with its lending bank regarding
the extension of its long term loan facilities. This is expected to result in
the deferment of the payment of the first dividends to shareholders until the
end of 2010.
In view of the need for the generating plant to demonstrate a consistent period
of stable operation, the investment has not been revalued using a discounted
cash flow methodology. However, based on technical advice that the remedial
works referred to above have had the desired effect, the Company also does not
consider the investment to be impaired. The fair value of this investment is not
considered to be materially different to the historic cost of investment.
Spurlens Rig Wind Limited
The Company has invested GBP87,000 in Spurlens Rig Wind Limited to acquire 30%
of the ordinary share capital. Spurlens Rig Wind Limited holds the rights to a
wind farm being developed in the Borders region of Scotland.
Permission is being sought to install six wind turbines and a planning
application is expected to be submitted in November 2009. The original wind farm
proposal envisaged a site comprised of five turbines, however the development
consultants engaged by Spurlens Rig Wind Limited identified the potential to
increase the scope of the scheme in consultation with the local planning
authorities.
Once the planning application has been submitted, a decision is anticipated
within six to twelve months. The Company has secured the rights to provide the
finance required to build the wind farm should planning permission be granted.
Olgrinmore Limited
An investment of GBP34,200 has been made for 8.8% of the ordinary share capital
of Olgrinmore Limited, a company developing a two turbine wind farm in
Caithness, Scotland. A planning application was submitted in January 2009 and is
expected to be determined by the end of 2009.
The Company originally invested GBP24,000 for a 7.5% stake in Olgrinmore Limited
and has since subscribed for shares in two subsequent capital raising rounds to
fund the increased cost of the planning application. The increased costs have
arisen as additional reports have been commissioned to address specific planning
issues raised by statutory consultees. The reports have now been delivered to
the local planning authority and a determination is awaited.
The Company has secured the rights to provide the finance required to build the
wind farm should planning permission be granted.
Redeven Energy Limited
An investment of GBP192,000 has been made in Redeven Energy Limited, by way of a
loan, to fund the development of three wind farm sites in East Anglia. Through a
nominal share capital investment, the Company has a 30% shareholding in this
wind farm development company which has entered into a joint venture agreement
with the landlord at the three sites.
Planning applications for the first two sites were submitted in May 2009 and the
third application is expected to be submitted before the end of 2009. The
combined capacity of these sites, if consented, would be in excess of 16
megawatts.
The Company has again secured the rights to provide the finance required to
build the wind farms should planning permissions be obtained.
Wind Power Renewables Limited
Catfield Wind Power Limited, Potash Wind Farm Limited, Stalham Wind Power
Limited, Meridian Wind Power Limited and Witton Wind Farm Limited
As at the date of the last report, the Company had invested a total of GBP90,000
for 15% of the ordinary share capital of the following companies: Catfield Wind
Power Limited (GBP27,000), Potash Wind Farm Limited (GBP33,000), Stalham Wind
Power Limited (GBP6,000), Meridian Wind Power Limited (GBP18,000) and Witton
Wind Farm Limited (GBP6,000).
These five wind farm developments are being undertaken under a framework
agreement with Wind Power Renewables Limited, an East Anglian based wind farm
developer specialising in small to medium sized sites.
The Company has renegotiated the terms of its investment and has been allotted a
15% stake in Wind Power Renewables Limited. The consideration for the ordinary
shares in Wind Power Renewables Limited was the transfer to Wind Power
Renewables Limited of the Company's 15% holding in each of the five wind farm
development companies at the original subscription price. The Company has also
provided Wind Power Renewables Limited with a shareholder loan facility of
GBP60,000, of which GBP57,600 has been drawn.
Osspower Limited
Osspower Limited is a company developing a group of four small scale
hydro-electric generating assets in Scotland. The Company has
invested GBP150,000 for 25% of the ordinary shares of Osspower Limited. The
Company has also negotiated the rights to arrange the finance to build the
hydro-electric schemes as planning permissions are obtained.
The planning applications for the four sites were submitted to the Scottish
Government Consents Unit in July 2009 and determination is expected during the
first half of 2010.
The Company has also committed to provide additional funding to Osspower Limited
by way of a shareholder loan facility up to a maximum amount of GBP27,500. This
facility can be drawn by Osspower Limited to meet additional costs in relation
to the planning applications as required.
The Small Hydro Company Limited
The Company has invested GBP57,500 for 12.5% of the ordinary share capital of
The Small Hydro Company Limited, a company developing a number of small scale
hydro-electric generating assets in England. The Company has also committed a
shareholder loan facility of up to GBP192,000 which can be drawn to meet the
cost of making planning applications. GBP150,000 of this facility has been drawn
as at the date of this report.
The Small Hydro Company Limited submitted planning applications for its first
five sites in July 2009 and is currently working with the relevant authorities
to manage the applications through the planning process.
Renewable Power Systems (Dargan Road) Limited
Renewable Power Systems (Dargan Road) Limited is a company operating a landfill
gas generating scheme on Belfast City Council's North Foreshore waste management
site.
The project manager and developer is Renewable Power Systems Limited,
an experienced UK landfill gas generation specialist. Renewable Power Systems
Limited own 50% of Renewable Power Systems (Dargan Road) Limited and provide
long term operational support services.
Construction on the site began in 2008 and the plant became operational on
schedule and to budget in August 2009.
The Company has invested GBP390,000 to acquire 25% of the ordinary share capital
in RPS Dargan Road Limited and has provided a further GBP560,000 by way of a
mezzanine loan facility.
The first payment of mezzanine loan interest is expected to be paid by the end
of 2009.
As the generating plant has only recently started operating, the fair value of
this investment is not considered to be materially different from the historic
cost of investment.
Sandsfield Heat & Power Limited
Sandsfield Heat & Power Limited is a company developing a biomass generating
scheme in North Yorkshire. The scheme will use waste wood as a fuel to generate
electricity, via a conventional steam turbine, for export to the grid.
The project manager and developer is Bioflame Limited, a company specialising in
energy from waste systems. Bioflame Limited own 30% of Sandsfield Heat & Power
Limited Limited.
The Company has invested GBP898,000 to acquire 22.5% of the ordinary share
capital in Sandsfield Heat & Power Limited. In June 2009 the Company provided a
further GBP500,000 by way of a mezzanine loan facility.
Construction on the site commenced early in 2009 and the plant is expected to be
operational in the first half of 2010.
Twinwoods Heat & Power Limited
Twinwoods Heat & Power Limited is a company developing a waste wood biomass
generating scheme in Bedfordshire. The plant design is identical to the
Sandsfield Heat & Power Limited development and is again being developed in
partnership with Bioflame Limited who own 30% of Twinwoods Heat & Power Limited.
The Company has invested GBP1,000,000 to acquire 25% of the ordinary share
capital in Twinwoods Heat & Power Limited.
Construction on the site commenced early in 2009 and the plant is expected to be
operational in the first half of 2010.
Kettering East Energy Limited
The Company has made an investment of GBP125,000 by way of a loan facility to
Kettering East Energy Limited, a company developing a seven turbine wind farm
project in Northamptonshire with full planning consent.
The Investment Manager has been working closely with the wind farm owner to
secure a grid connection offer and to assess the optimum choice of wind turbines
for the site. This has been a longer process than originally expected due to
unforeseen complications with the network operator which has delayed the issue
of a formal grid connection offer. This is now close to being resolved and the
Investment Manager together with the wind farm owner expect to agree the way
forward in the near future.
EcoGen Limited
The Company has invested GBP200,000 to acquire 6% of the ordinary share capital
of EcoGen Limited, an experienced wind farm owner and operator and development
consultancy.
EcoGen is actively managing the development of a series of new wind farm sites
in the UK and has recently submitted a planning application for a five turbine
wind farm project in Cambridgeshire.
Summary of Investments - "C" Shares
As at the date of this report, the Company has not made investments from the
cash raised by the "C" share offer. However, the Investment Manager is assessing
several potential investments and has secured two exclusivity agreements which
offer the Company the opportunity to invest up to GBP1.85 million. A third
exclusivity agreement is currently being sought for an investment of a further
GBP1.25 million.
Investment Policy
The investment policy of the Company is focused on investing in companies
developing renewable energy projects with installed capacities of two to twelve
megawatts, although larger projects may also be considered. Given the target
investment size, investments will generally be in companies developing projects
initiated by specialist small-scale developers, small industrial sites and
smaller projects which are not attractive to large development companies and
utilities.
Asset Allocation
The Investment Manager seeks to maximise, so far as is practicable, the
Company's investment in equity securities and loan stock of companies owning
renewable energy projects with full planning consent, ready for construction of
the project to commence or whose assets are already operational. Up to 10% of
net proceeds raised from the initial share offer and the "C" share offer may be
allocated to development funding for early stage renewable energy projects prior
to planning permissions being obtained.
The Company's policy is to maintain cash reserves of at least 5% of net proceeds
raised from the initial share offer and the "C" share offer for the purpose of
meeting operating expenses and purchasing its shares in the market.
Circumstances may arise which will require the Company to hold less than 5% of
net proceeds in cash for a limited period of time.
In order to comply with VCT requirements, at least 70% by value of the Company's
investments are required to be comprised of qualifying investments. The Company
typically invests up to GBP2 million in equity and loan stock in each investee
company with no more than GBP1 million invested in an investee company in any
single tax year.
The Company typically owns 12.5% to 25% of the equity share capital of each
investee company and a portion of its investment in each investee company may be
in the form of loan stock.
The Company's uninvested funds are placed on deposit or invested in short-term
fixed income securities until suitable investment opportunities are found.
Risk Diversification
The geographical focus of the portfolio is centred on the UK market due to VCT
requirements. This is mitigated by making investments in a wide geographical
spread of projects that are situated throughout the UK. Funds are also invested
with a range of small-scale independent developers so project risk is not
concentrated with only a few developers. The portfolio contains projects at
different stages of the asset lifecycle, ranging from pre-planning, to
construction and then into operation. Investments are made via subscriptions for
new share capital or via loan stock instruments in order to secure a negotiated
level of return from the project. The majority of investments are made in
special purpose companies set up specifically to develop each project and any
bank debt financing will normally be non-recourse to the Company.
The returns from projects are largely dependent on the UK Government's continued
support for renewable energy, primarily under the Renewables Obligation. The
effects of any negative change to this policy are mitigated by the UK
Government's historic practice of grandfathering financial support mechanisms
for existing assets. This risk is further mitigated by the Company typically
negotiating fixed and/or floor price mechanisms into the power purchase
agreements entered into by project companies for the sale of their generated
output.
Gearing
The Company does not intend to borrow funds for investment purposes. However the
Company is exposed to gearing through its investee companies which typically
fund the construction costs of each project through senior bank debt finance.
The Investment Manager is involved in negotiating the terms of this finance to
ensure competitive terms are achieved. The interest rate is typically fixed via
an interest rate swap for the duration of the bank loan so that investee
companies are not exposed to changes in market interest rates.
Maximum Exposures
In order to gauge the maximum exposure of the funds to various risks, the
following can be used as a guide:
i) Investments in qualifying holdings
70-95% of the funds will be invested in qualifying holdings no later than three
years after the date that provisional approval by HM Revenue & Customs of the
Company's status as a VCT becomes effective. The relevant compliance date for
the initial share offer was 1 March 2009 and for the "C" shares is 1 March 2012.
Should the holdings inadvertently fall below this level after the relevant dates
then this will be remedied within six months as permitted by the VCT regulations
of HM Revenue & Customs.
ii) Concentration limits
Under VCT regulations no more than 15% of the Company's total assets should be
in a single investee company at the time the investment is made in that investee
company.
iii) Investments in pre-planning projects
A maximum of 10% of the net funds raised from each of the initial share offer
and "C" share offer respectively may be invested in pre-planning projects.
UK Market Outlook
The development of renewable energy generating capacity continues to occupy a
prominent position on the UK Government's agenda, notwithstanding the fragile
nature of the wider economy.
Debt markets have started to show early signs of easing over recent months and
in an effort to stimulate increased lending to renewable projects, several
initiatives are being promoted by HM Treasury and the Department of Energy and
Climate Change ("DECC"). Most notably, a GBP4 billion liquidity capital facility
is being provided by the European Investment Bank through a panel of domestic
banks, which is intended to improve the access to capital for UK renewable
energy projects, including specifically smaller scale onshore projects. The
exact details of the scheme have yet to emerge, however it is expected to
improve access to finance in what remains a very tight market with limited
competition on key terms and conditions.
Bank lending remains available for well structured schemes with sponsors who are
prepared to inject an appropriate amount of equity and can demonstrate that they
have access to a pipeline of further lending opportunities.
The effect of the credit crunch on large projects is having an adverse impact on
equipment manufacturers which is feeding through to the market in the form of
shortened delivery times and some downward pressure on prices as suppliers find
themselves sitting on surplus stock. Unfortunately these positive developments
for purchasers of generating plant is only acting as a mitigation for the
continued deterioration of Sterling against the Euro given that the majority of
the suppliers to the UK renewable energy market are based in the Eurozone.
Wholesale energy prices have fallen in recent months, both on spot and on medium
to long term forecasts, as uncertainty prevails on the rate at which global
industrial production will stabilise and then start to increase as major
economies start to emerge from recession. Medium to long term fixed prices
continue to hold value, primarily driven by the legal obligations on supply
companies to buy an escalating percentage of their overall supply from
accredited renewable energy generating sources.
Climate Change Capital Limited
Investment Manager
28 October 2009
Directors and Advisers
Directors
D Pinckney (Chairman)
A Moore
P Thomas
C Wood
Company Secretary
The City Partnership (UK) Limited
Thistle House
21 Thistle Street
Edinburgh
EH2 1DF
Auditor
PKF (UK) LLP
Farringdon Place
20 Farringdon Road
London
EC1M 3AP
Banker
HSBC Bank plc
60 Queen Victoria Street
London
EC4N 4TR
Investment Manager
Climate Change Capital Limited
3 More London Riverside
London
SE1 2AQ
Registrar & Registered Office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Broker
Matrix Corporate Capital LLP
1 Vine Street
London
W1J 0AH
Taxation Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Solicitor
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London
EC4R 9HA
Statement of Comprehensive Income
for the six month period ended 31 August 2009 (unaudited)
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| | | Six months ended 31 August 2009 (unaudited) |
+-----------------+------+--------------------------------------------------------------------------------------+
| | | Ordinary Shares | "C" Shares | Total |
+-----------------+------+----------------------------+----------------------------+----------------------------+
| | | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| | Note | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Net losses on | | - | (13) | (13) | - | - | - | - | (13) | (13) |
| investments | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Income | 2 | 178 | - | 178 | 9 | - | 9 | 187 | - | 187 |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Investment | 3 | (33) | (99) | (132) | (15) | (46) | (61) | (48) | (145) | (193) |
| management fees | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Other expenses | | (44) | - | (44) | (25) | - | (25) | (69) | - | (69) |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Profit/(loss) | | 101 | (112) | (11) | (31) | (46) | (77) | 70 | (158) | (88) |
| before taxation | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Tax | 4 | (21) | 21 | - | 6 | 10 | 16 | (15) | 31 | 16 |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Profit/(loss) | | 80 | (91) | (11) | (25) | (36) | (61) | 55 | (127) | (72) |
| for the period | | | | | | | | | | |
| attributable to | | | | | | | | | | |
| equity | | | | | | | | | | |
| shareholders | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Return per | | | | | | | | | | |
| share: | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
| Basic and | 5 | 0.71 | (0.81) | (0.10) | (0.40) | (0.61) | (1.01) | | | |
| diluted return | | | | | | | | | | |
| per share (p) | | | | | | | | | | |
+-----------------+------+---------+---------+--------+---------+---------+--------+---------+---------+--------+
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made in the UK.
The total column of this statement represents the Company's statement of
comprehensive income, prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards as adopted
by the European Union. The revenue and capital columns shown above constitute
supplementary information prepared under guidance published by the Association
of Investment Companies.
There were no recognised gains and losses for the period other than those shown
above.
Statement of Comprehensive Income
for the six month period ended 31 August 2008 (unaudited)
+-----------------+------+---------+---------+--------+
| | | |
| | | Six months ended 31 |
| | | August 2008 |
| | | (unaudited) |
+-----------------+------+----------------------------+
| | | |
+-----------------+------+----------------------------+
| | | Revenue | Capital | Total |
+-----------------+------+---------+---------+--------+
| | Note | GBP000 | GBP000 | GBP000 |
+-----------------+------+---------+---------+--------+
| | | | | |
+-----------------+------+---------+---------+--------+
| Net gains on | | - | 148 | 148 |
| investments | | | | |
+-----------------+------+---------+---------+--------+
| Income | 2 | 236 | - | 236 |
+-----------------+------+---------+---------+--------+
| Investment | 3 | (39) | (116) | (155) |
| management fees | | | | |
+-----------------+------+---------+---------+--------+
| Other expenses | | (63) | - | (63) |
+-----------------+------+---------+---------+--------+
| Profit before | | 134 | 32 | 166 |
| taxation | | | | |
+-----------------+------+---------+---------+--------+
| Tax | 4 | (27) | 23 | (4) |
+-----------------+------+---------+---------+--------+
| Profit for the | | 107 | 55 | 162 |
| period | | | | |
| attributable to | | | | |
| equity | | | | |
| shareholders | | | | |
+-----------------+------+---------+---------+--------+
| Return per | | | | |
| share: | | | | |
+-----------------+------+---------+---------+--------+
| Basic and | 5 | 0.96 | 0.49 | 1.45 |
| diluted return | | | | |
| per share (p) | | | | |
+-----------------+------+---------+---------+--------+
The first allotment of "C" shares took place on 24 March 2009, therefore the
statement of comprehensive income for the six month period ended 31 August 2008
represents the ordinary share fund only.
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made in the UK.
The total column of this statement represents the Company's statement of
comprehensive income, prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards as adopted
by the European Union. The revenue and capital columns shown above constitute
supplementary information prepared under guidance published by the Association
of Investment Companies.
There were no recognised gains and losses for the period other than those shown
above.
Statement of Comprehensive Income
for the year ended 28 February 2009 (audited)
+-----------------+------+---------+---------+---------+
| | | |
| | | Year ended 28 February |
| | | 2009 (audited) |
+-----------------+------+-----------------------------+
| | | |
+-----------------+------+-----------------------------+
| | | Revenue | Capital | Total |
+-----------------+------+---------+---------+---------+
| | Note | GBP000 | GBP000 | GBP000 |
+-----------------+------+---------+---------+---------+
| | | | | |
+-----------------+------+---------+---------+---------+
| Net gains on | | - | 153 | 153 |
| investments | | | | |
+-----------------+------+---------+---------+---------+
| Income | 2 | 615 | - | 615 |
+-----------------+------+---------+---------+---------+
| Investment | 3 | (57) | (171) | (228) |
| management fees | | | | |
+-----------------+------+---------+---------+---------+
| Other expenses | | (129) | - | (129) |
+-----------------+------+---------+---------+---------+
| Profit/(loss) | | 429 | (18) | 411 |
| before taxation | | | | |
+-----------------+------+---------+---------+---------+
| Tax | 4 | (53) | 36 | (17) |
+-----------------+------+---------+---------+---------+
| Profit for the | | 376 | 18 | 394 |
| year | | | | |
| attributable to | | | | |
| equity | | | | |
| shareholders | | | | |
+-----------------+------+---------+---------+---------+
| Return per | | | | |
| share: | | | | |
+-----------------+------+---------+---------+---------+
| Basic and | 5 | 3.36 | 0.16 | 3.52 |
| diluted return | | | | |
| per share (p) | | | | |
+-----------------+------+---------+---------+---------+
The first allotment of "C" shares took place on 24 March 2009, therefore the
statement of comprehensive income for the year ended 28 February 2009 represents
the ordinary share fund only.
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made in the UK.
The total column of this statement represents the Company's statement of
comprehensive income, prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards as adopted
by the European Union. The revenue and capital columns shown above constitute
supplementary information prepared under guidance published by the Association
of Investment Companies.
There were no recognised gains and losses for the period other than those shown
above.
Balance Sheet
as at 31 August 2009 (unaudited)
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | As at 31 August 2009 | | As at 31 | | As at 28 |
| | | | | August 2008 | | February 2009 |
+------------------------------+------+-----------------------------+--+--------------+---+---------------+
| | | (unaudited) | | (unaudited) | | (audited) |
+------------------------------+------+-----------------------------+--+--------------+---+---------------+
| | | Ordinary | "C" | Total | | Total | | Total |
| | | Shares | Shares | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | Note | GBP000 | GBP000 | GBP000 | | GBP000 | | GBP000 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Non-current assets | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Investments | 6 | 8,915 | - | 8,915 | | 2,751 | | 8,100 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Trade and other receivables | | 159 | - | 159 | | 36 | | 139 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | 9,074 | - | 9,074 | | 2,787 | | 8,239 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Current assets | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Trade and other receivables | | 251 | 28 | 263 | | 45 | | 100 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Cash and cash equivalents | 7 | 1,084 | 6,469 | 7,553 | | 7,725 | | 2,452 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | 1,335 | 6,497 | 7,816 | | 7,770 | | 2,552 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Total assets | | 10,409 | 6,497 | 16,890 | | 10,557 | | 10,791 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Current liabilities | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Trade and other payables | | (35) | (14) | (33) | | (68) | | (238) |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Net current assets | | 1,300 | 6,483 | 7,783 | | 7,702 | | 2,314 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Net assets | | 10,374 | 6,483 | 16,857 | | 10,489 | | 10,553 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Equity attributable to | | | | | | | | |
| equity holders | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Share capital | | 2,793 | 1,731 | 4,524 | | 2,793 | | 2,793 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Share premium | | - | 4,813 | 4,813 | | - | | - |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Special reserve | | 7,803 | - | 7,803 | | 7,803 | | 7,803 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Capital reserve - realised | | (572) | (36) | (608) | | (452) | | (494) |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Capital reserve - unrealised | | 140 | - | 140 | | 148 | | 153 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Revenue reserve | | 210 | (25) | 185 | | 197 | | 298 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Total equity | | 10,374 | 6,483 | 16,857 | | 10,489 | | 10,553 |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
| Basic and diluted net asset | 8 | 92.9 | 93.6 | | | 93.9 | | 94.5 |
| value per share (p) | | | | | | | | |
+------------------------------+------+----------+--------+---------+--+--------------+---+---------------+
The first allotment of "C" shares took place on 24 March 2009, therefore the
balance sheets as at 31 August 2008 and 28 February 2009 represent the ordinary
share fund only.
Cash Flow Statement
for the six month period ended 31 August 2009 (unaudited)
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| | Six months ended 31 | | Six months | | Year ended |
| | August 2009 | | ended 31 | | 28 |
| | | | August | | February |
| | | | 2008 | | 2009 |
+-----------------------+---------------------------------+--+-------------+--+------------+
| | (unaudited) | | (unaudited) | | (audited) |
+-----------------------+---------------------------------+--+-------------+--+------------+
| | Ordinary | "C" | Total | | Total | | Total |
| | Shares | Shares | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| | GBP000 | GBP000 | GBP000 | | GBP000 | | GBP000 |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Cash flows from | | | | | | | |
| operating activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Investment income | 14 | - | 14 | | - | | 175 |
| received | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Deposit interest | 17 | 9 | 26 | | 211 | | 323 |
| received | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Investment management | (66) | (61) | (127) | | (155) | | (250) |
| fees paid | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Other cash payments | (143) | (23) | (166) | | (62) | | (180) |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Net cash (used | (178) | (75) | (253) | | (6) | | 68 |
| in)/from operating | | | | | | | |
| activities before | | | | | | | |
| taxes | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Taxes paid | - | - | - | | - | | (29) |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Net cash (used | (178) | (75) | (253) | | (6) | | 39 |
| in)/from operating | | | | | | | |
| activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Cash flows from | | | | | | | |
| investing activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Purchases of | (828) | - | (828) | | (1,290) | | (6,634) |
| investments | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Net cash used in | (828) | - | (828) | | (1,290) | | (6,634) |
| investing activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Cash flows from | | | | | | | |
| financing activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| "C" shares issued | (194) | 6,925 | 6,731 | | - | | 194 |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| "C" share issue costs | - | (381) | - | | - | | - |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Dividends paid | (168) | - | (168) | | (156) | | (324) |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Net cash (used | (362) | 6,544 | 6,563 | | (156) | | (130) |
| in)/from financing | | | | | | | |
| activities | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Net | (1,368) | 6,469 | 5,101 | | (1,452) | | (6,725) |
| (decrease)/increase | | | | | | | |
| in cash and cash | | | | | | | |
| equivalents | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Cash and cash | 2,452 | - | 2,452 | | 9,177 | | 9,177 |
| equivalents at the | | | | | | | |
| beginning of the | | | | | | | |
| period/year | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
| Cash and cash | 1,084 | 6,469 | 7,553 | | 7,725 | | 2,452 |
| equivalents at the | | | | | | | |
| end of the | | | | | | | |
| period/year | | | | | | | |
+-----------------------+-----------+----------+----------+--+-------------+--+------------+
The first allotment of "C" shares took place on 24 March 2009, therefore the
cash flow statements for the six months ended 31 August 2008 and the year ended
28 February 2009 represent the ordinary share fund only.
Statement of Changes in Equity
for the six month period ended 31 August 2009 (unaudited)
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| | Share | Share | Special | Capital | Capital | Revenue | Total |
| | capital | premium | reserve | reserve | reserve | reserve | |
| | | | | realised | unrealised | | |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Ordinary Shares | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 1 March 2009 | 2,793 | - | 7,803 | (494) | 153 | 298 | 10,553 |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| (Loss)/profit for the period | - | - | - | (78) | (13) | 80 | (11) |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Total recognised income and | - | - | - | (78) | (13) | 80 | (11) |
| expense | | | | | | | |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Dividends paid in the period | - | - | - | - | - | (168) | (168) |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 31 August 2009 | 2,793 | - | 7,803 | (572) | 140 | 210 | 10,374 |
+------------------------------+----------+---------+----------+----------+------------+---------+-----------+
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| "C" Shares | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| At 1 March 2009 | - | - | - | - | - | - | - |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| Shares issued in the period | 1,731 | 5,194 | - | - | - | - | 6,925 |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| Issue costs | - | (381) | - | - | - | - | (381) |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| Net increase in | 1,731 | 4,813 | - | - | - | - | 6,544 |
| shareholders' equity | | | | | | | |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| Loss for the period | - | - | - | (36) | - | (25) | (61) |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| Total recognised income and | - | - | - | (36) | - | (25) | (61) |
| expense | | | | | | | |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
| At 31 August 2009 | 1,731 | 4,813 | - | (36) | - | (25) | 6,483 |
+------------------------------+----------+----------+--------+--------+----------+--------+----------+
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Combined | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| At 1 March 2009 | 2,793 | - | 7,803 | (494) | 153 | 298 | 10,553 |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Shares issued in the period | 1,731 | 5,194 | - | - | - | - | 6,925 |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Costs of issue | - | (381) | - | - | - | - | (381) |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Net increase in | 1,731 | 4,813 | - | - | - | - | 6,544 |
| shareholders' equity | | | | | | | |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| (Loss)/profit for the period | - | - | - | (114) | (13) | 55 | (72) |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Total recognised income and | - | - | - | (114) | (13) | 55 | (72) |
| expense | | | | | | | |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| Dividends paid in the period | - | - | - | - | - | (168) | (168) |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
| At 31 August 2009 | 4,524 | 4,813 | 7,803 | (608) | 140 | 185 | 16,857 |
+------------------------------+----------+----------+----------+---------+----------+---------+-----------+
All amounts presented in the statement of changes in equity are attributable to
equity holders. The realised capital reserve and the revenue reserve are
distributable reserves. The special reserve is also distributable and can be
used to fund buy-backs of ordinary shares as and when it is considered by the
Board to be in the interests of the shareholders.
Statement of Changes in Equity
For the six month period ended 31 August 2008 (unaudited)
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| | Share | Share | Special | Capital | Capital | Revenue | Total |
| | capital | premium | reserve | reserve | reserve | reserve | |
| | | | | realised | unrealised | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 1 March 2008 | 2,793 | - | 7,803 | (359) | - | 246 | 10,483 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| (Loss)/profit for the | - | - | - | (93) | 148 | 107 | 162 |
| period | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Total recognised income | - | - | - | (93) | 148 | 107 | 162 |
| and expense | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Dividends paid in the | - | - | - | - | - | (156) | (156) |
| period | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 31 August 2008 | 2,793 | - | 7,803 | (452) | 148 | 197 | |
| | | | | | | | 10,489 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
Statement of Changes in Equity
For the year ended 28 February 2008 (audited)
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| | Share | Share | Special | Capital | Capital | Revenue | Total |
| | capital | premium | reserve | reserve | reserve | reserve | |
| | | | | realised | unrealised | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 1 March 2008 | 2,793 | - | 7,803 | (359) | - | 246 | 10,483 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| (Loss)/profit for the | - | - | - | (135) | 153 | 376 | 394 |
| year | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Total recognised income | - | - | - | (135) | 153 | 376 | 394 |
| and expense | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| Dividends paid in the | - | - | - | - | - | (324) | (324) |
| year | | | | | | | |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
| At 28 February 2009 | 2,793 | - | 7,803 | (494) | 153 | 298 | |
| | | | | | | | 10,553 |
+---------------------------+----------+---------+----------+----------+------------+---------+-----------+
The first allotment of "C" shares took place on 24 March 2009, therefore, the
Statements of Changes in Equity for the six months ended 31 August 2008 and the
year ended 28 February 2009 represent changes in equity in respect of the
ordinary share fund only.
Notes to the Financial Statements
for the six month period ended 31 August 2009 (unaudited)
1. Accounting convention and policies
Accounting convention
The half-yearly financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards ("IFRS"), which
comprise standards and interpretations approved by the International Accounting
Standards Board ("IASB"), and International Accounting Standards ("IAS") and
Standing Interpretations Committee interpretations approved by the International
Accounting Standards Committee ("IASC") that remain in effect, and to the extent
that they have been adopted by the European Union and with those parts of the
Companies Act 2006 applicable to companies under IFRS. The half-yearly financial
statements have been prepared under IAS 34 Interim Financial Reporting.
The accounting policies used in the preparation of the half-yearly financial
statements are consistent with those adopted in the financial statements for the
year ended 28 February 2009 and those that will be adopted in the financial
statements for the year ending 28 February 2010.
The half-yearly financial statements have been presented using the
presentational guidance set out in the Statement of Recommended Practice
("SORP") "Financial Statements of Investment Companies and Venture Capital
Trusts" (issued in January 2009), to the extent that the guidance is consistent
with IFRS.
The financial information contained in the half-yearly report does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The financial statements for the year ended 28 February 2009 have been
filed with the Registrar of Companies. The auditor's report on these accounts
was unqualified and did not include a statement under Section 498(2) or 498(3)
of the Companies Act 2006.
Presentation of the statement of comprehensive income
In order better to reflect the activities of the Company and in accordance with
guidance issued by the Association of Investment Companies ("AIC"),
supplementary information which analyses the statement of comprehensive income
between items of a revenue and capital nature has been presented alongside the
statement.
Income
Income on current asset investments is stated on an accruals basis, by reference
to the principal outstanding and at the effective interest rate applicable.
Interest receivable on cash and non-equity investments is accrued to the end of
the period. No tax was withheld at source on income.
Dividend income from investments is recognised when the shareholders' rights to
receive payment has been established, normally the ex-dividend date.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis
between revenue and capital items presented within the statement of
comprehensive income, all expenses have been presented as revenue items except
when expenses are split and presented partly as capital items where a connection
with the maintenance or enhancement of the value of the investments held can be
demonstrated. Accordingly, the investment management fee has been allocated 25%
to revenue and 75% to capital, in order to reflect the Directors' expected
long-term view of the nature of the investment returns of the Company.
Other than the management fees, expenses have been allocated between the
ordinary and "C" share funds on the basis of the number of shares in issue
during the period.
Taxation
Tax is applied on a current basis and allocated between revenue return and
capital return on the "marginal basis" as recommended in the SORP.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets or liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the Balance Sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised.
The specific nature of Venture Capital Trusts means that it is unlikely that
deferred tax will arise, therefore the Directors do not consider it necessary
that a provision should be made for deferred tax.
Financial instruments
Financial assets and financial liabilities are recognised on the Company's
balance sheet when the Company has become a party to the contractual provisions
of the instrument.
Trade and other receivables
Trade and other receivables are initially recognised at fair value. They are
subsequently measured at their amortised cost using the effective interest
method less any provision for impairment. A provision for impairment is made
where there is objective evidence (including counterparties with financial
difficulties or in default on payments) that amounts will not be recovered in
accordance with the original terms of the agreement. A provision for impairment
is established when the carrying value of the receivable exceeds the present
value of the future cash flows discounted using the original effective interest
rate. The carrying value of the receivable is reduced through the use of an
allowance account and any impairment loss is recognised in the statement of
comprehensive income.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at bank and other short-term
deposits held by the Company with maturities of less than three months.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently
at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the Company are recorded at the received amount,
net of direct issue costs.
Key assumptions and key sources of estimation uncertainty
The preparation of the financial statements requires the application of
assumptions and estimates which may affect the results reported in the financial
statements. Estimates, by their nature, are based on judgement and available
information. The assumptions and estimates made in respect of investment values
are outlined below.
Investments
As the Company's business is investing in financial assets with a view to
profiting from their total return in the form of interest, dividends and
increases in fair values, all investments are designated as fair value through
profit or loss on initial recognition. A financial asset is designated within
this category if it is acquired, managed and evaluated on a fair value basis in
accordance with the Company's documented investment policy. In the year of
acquisition, investments are measured at cost, which is considered to be their
fair value. Thereafter, the investments are measured at subsequent reporting
dates on a fair value basis in accordance with IFRS. Gains or losses resulting
from revaluation of investments are taken to the capital account of the
statement of comprehensive income.
Investments in unquoted companies are valued in accordance with International
Private Equity and Venture Capital Valuation Guidelines. The price of recent
investment methodology is applied until the relevant investee company's
generating assets have proved stable operational performance for an acceptable
period of time. This time period will vary depending on the nature of the
renewable energy technology that the investee company uses, but is typically
between 6 and 18 months following completion of the construction phase. The
investments in unquoted companies are subsequently valued using the 'discounted
cash flow from the underlying business' methodology.
The key assumptions that have a significant impact on fair value in the
discounted cash flow valuations are the discount factor used, the price at which
the power and associated benefits can be sold and the level of electricity the
investee company's generating assets are expected to produce. The discount
factor applied to the cash flows is regularly reviewed by the Investment
Committee of the Investment Manager to ensure it is set at the appropriate level
and is benchmarked to other investments in the renewable energy sector using
similar generating technology. The Investment Committee and the Board will also
give consideration to the specific performance characteristics of the particular
type of generating technology being used. The price at which the output from the
generating assets is sold is often fixed in the medium term under power purchase
agreements. For periods outside the term of these agreements the assumed future
prices are taken from external third party market data which take the form of
specialist consultancy reports. Specifically commissioned external consultant
reports are also used to verify the expected electrical output from the investee
company's generating assets taking in to account their type and location. All of
these key assumptions are reviewed regularly by the Investment Committee of the
Investment Manager and the Board.
When an investee company has gone into receivership or liquidation, the
investment, although physically not disposed of, is treated as being realised.
The Company has taken the exemption, permitted by IAS 28 Investments in
Associates and IAS 31 Interests in Joint Ventures, from equity accounting for
investments where it has significant influence in common control.
The majority of money held pending investment is invested in financial
instruments with same day or two-day access and as such is treated as cash and
cash equivalents. UK treasury bills are valued at bid prices as at the period
end.
Dividends payable
Dividends payable are recognised as distributions in the financial statements
when the Company's liability to make payment has been established.
2. Income
+-----------------------------+--------------+--------------+--------------+
| | Six months ended 31 August 2009 |
| | (unaudited) |
+-----------------------------+--------------------------------------------+
| | Ordinary | "C" Shares | Total |
| | Shares | | |
+-----------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------+--------------+--------------+--------------+
| Income from investments | | | |
+-----------------------------+--------------+--------------+--------------+
| Mezzanine loan stock | 174 | - | 174 |
| interest income | | | |
+-----------------------------+--------------+--------------+--------------+
| Dividend income | - | - | - |
+-----------------------------+--------------+--------------+--------------+
| | 174 | - | 174 |
+-----------------------------+--------------+--------------+--------------+
| Other income | | | |
+-----------------------------+--------------+--------------+--------------+
| UK treasury bill income | 3 | 6 | 9 |
+-----------------------------+--------------+--------------+--------------+
| Bank deposit interest | 1 | 3 | 4 |
+-----------------------------+--------------+--------------+--------------+
| | 178 | 9 | 187 |
+-----------------------------+--------------+--------------+--------------+
| | | | |
+-----------------------------+--------------+--------------+--------------+
| | Six months ended 31 August 2008 |
| | (unaudited) |
+-----------------------------+--------------------------------------------+
| | Ordinary | "C" Shares | Total |
| | Shares | | |
+-----------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------+--------------+--------------+--------------+
| Income from investments | | | |
+-----------------------------+--------------+--------------+--------------+
| Mezzanine loan stock | 30 | - | 30 |
| interest income | | | |
+-----------------------------+--------------+--------------+--------------+
| Dividend income | - | - | - |
+-----------------------------+--------------+--------------+--------------+
| | 30 | - | 30 |
+-----------------------------+--------------+--------------+--------------+
| Other income | | | |
+-----------------------------+--------------+--------------+--------------+
| UK treasury bill income | 197 | - | 197 |
+-----------------------------+--------------+--------------+--------------+
| Bank deposit interest | 9 | - | 9 |
+-----------------------------+--------------+--------------+--------------+
| | 236 | - | 236 |
+-----------------------------+--------------+--------------+--------------+
| | | | |
+-----------------------------+--------------+--------------+--------------+
| | Year ended 28 February 2009 (audited) |
+-----------------------------+--------------------------------------------+
| | Ordinary | "C" Shares | Total |
| | Shares | | |
+-----------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------+--------------+--------------+--------------+
| Income from investments | | | |
+-----------------------------+--------------+--------------+--------------+
| Mezzanine loan stock | 114 | | 114 |
| interest income | | | |
+-----------------------------+--------------+--------------+--------------+
| Dividend income | 175 | | 175 |
+-----------------------------+--------------+--------------+--------------+
| | 289 | - | 289 |
+-----------------------------+--------------+--------------+--------------+
| Other income | | | |
+-----------------------------+--------------+--------------+--------------+
| UK treasury bill income | 301 | - | 301 |
+-----------------------------+--------------+--------------+--------------+
| Bank deposit interest | 25 | - | 25 |
+-----------------------------+--------------+--------------+--------------+
| | 615 | - | 615 |
+-----------------------------+--------------+--------------+--------------+
3. Investment management fees
The Company pays the Investment Manager an annual management fee equal to 2.5%
of the Company's net assets. The fee is exclusive of VAT and is payable
quarterly in advance. The annual management fee is allocated 75% to capital and
25% to revenue.
The Company retains Climate Change Capital Limited as its Investment Manager, a
subsidiary of Climate Change Holdings Limited, of which the ultimate holding
company is Climate Change Capital Group Limited. The amount payable to the
Investment Manager for the six months ended 31 August 2009 in respect of net
asset value attributable to ordinary shareholders was GBP131,623 (six months
ended 31 August 2008: GBP154,621; twelve months ended 28 February 2009:
GBP228,132). The amount payable to the Investment Manager for the six months
ended 31 August 2009 in respect of the net assets attributable to the "C"
shareholders was GBP61,446. During the period, the Company paid GBP201,986 to
the Investment Manager in respect of the offer fee for the issue of "C" shares
(referred to in note 8).
4. Tax
The half-yearly tax credit of GBP15,671 is based on an effective tax rate of 21%
assuming that the loss for the period is carried back to offset against the
profit for the previous 12 months (six months ended 31 August 2008: tax charge
GBP3,500; year ended 28 February 2009: tax charge GBP17,294).
5. Return per share
The basic and diluted loss per ordinary share of 0.10 pence (six months ended 31
August 2008: profit of 1.45 pence per ordinary share; twelve months ended 28
February 2009: profit of 3.52 pence per ordinary share) is based on the loss for
the period of GBP11,055 (six months ended 31 August 2008: profit of GBP162,507;
twelve months ended 28 February 2009: profit of GBP393,547) and the number of
ordinary shares in issue during the period of 11,173,337 (six months ended 31
August 2008: 11,173,337; twelve months ended 28 February 2009: 11,173,337).
There were no differences between basic and diluted return per share because no
dilutive instruments had been issued or granted.
The basic and diluted loss per "C" share of 1.01 pence is based on the loss for
the period of GBP60,713 and the weighted average number of "C" shares in issue
during the period of 6,021,215. There were no differences between basic and
diluted return per share because no dilutive instruments had been issued or
granted.
6. Investments
Total investments held at fair value through profit or loss, by the ordinary
share fund, were valued at GBP8,914,597 at 31 August 2009 (31 August 2008:
GBP2,750,954; 28 February 2009: GBP8,099,811). There have been no investments
made by the "C" share fund. The movements in investment values are presented in
the table below:
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| | Six months ended 31 August | Six months ended 31 August | Year ended 28 February |
| | 2009 | 2008 | 2009 |
+----------------+---------------------------------+---------------------------------+---------------------------------+
| | (unaudited) | (unaudited) | (audited) |
+----------------+---------------------------------+---------------------------------+---------------------------------+
| | Shares | Mezzanine | Total | Shares | Mezzanine | Total | Shares | Mezzanine | Total |
| | | loan | | | loan | | | loan | |
| | | stock | | | stock | | | stock | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Opening | | | | | | | | | |
| position | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Opening cost | 5,323 | 2,624 | 7,947 | 1,014 | 299 | 1,313 | 1,014 | 299 | 1,313 |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Opening | 153 | - | 153 | - | - | - | - | - | - |
| unrealised | | | | | | | | | |
| gains | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Opening fair | 5,476 | 2,624 | 8,100 | 1,014 | 299 | 1,313 | 1,014 | 299 | 1,313 |
| value | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| During the | | | | | | | | | |
| period/year | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Purchases at | 18 | 810 | 828 | 847 | 443 | 1,290 | 4,309 | 2,325 | 6,634 |
| cost | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Unrealised | (13) | - | (13) | 148 | - | 148 | 153 | - | 153 |
| (losses)/gains | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Closing fair | 5,481 | 3,434 | 8,915 | 2,009 | 742 | 2,751 | 5,476 | 2,624 | 8,100 |
| value | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Closing | | | | | | | | | |
| position | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Closing cost | 5,341 | 3,434 | 8,775 | 1,861 | 742 | 2,603 | 5,323 | 2,624 | 7,947 |
| | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Closing | 140 | - | 140 | 148 | - | 148 | 153 | - | 153 |
| unrealised | | | | | | | | | |
| gains | | | | | | | | | |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
| Closing fair | 5,481 | 3,434 | 8,915 | 2,009 | 742 | 2,751 | 5,476 | 2,624 | |
| value | | | | | | | | | 8,100 |
+----------------+----------+-----------+----------+----------+-----------+----------+----------+-----------+----------+
7. Cash and cash equivalents
The total cash and cash equivalents held in the ordinary share fund was
GBP1,084,085 at 31 August 2009 (31 August 2008: GBP7,725,015; 28 February 2009:
GBP2,452,039). The reduction in cash and cash equivalents is due, substantially,
to the purchase of investments requiring cash funding.
The total cash and cash equivalents held in the "C" share fund was GBP6,468,705
at 31 August 2009.
8. Net asset value per share
The net asset value per ordinary share of 92.9 pence (31 August 2008: 93.9
pence; 28 February 2009: 94.5 pence) is based on net assets attributable to the
ordinary shareholders of GBP10,374,208 (31 August 2008: GBP10,489,422; 28
February 2009: GBP10,552,863) and the number of ordinary shares in issue as at
31 August 2009 of 11,173,337 (31 August 2008: 11,173,337; 28 February 2009:
11,173,337).
The net asset value per "C" share of 93.6 pence is based on net assets
attributable to the "C" shareholders of GBP6,483,115 and the number of "C"
shares in issue as at 31 August 2009 of 6,924,686.
9. "C" share issue
Further to an Extraordinary General Meeting held on 2 March 2009 the authorised
share capital of the Company was increased from GBP7,500,000 to GBP12,500,000 by
the creation of 20,000,000 "C" shares of 25 pence each.
During the period the following allotments of "C" shares of 25 pence took place
at a price of 100 pence per share:
+-----------------------+-----------------------------------+
| Date of allotment | Number of shares |
+-----------------------+-----------------------------------+
| 24 March 2009 | 2,200,023 |
+-----------------------+-----------------------------------+
| 3 April 2009 | 2,448,579 |
+-----------------------+-----------------------------------+
| 4 April 2009 | 806,826 |
+-----------------------+-----------------------------------+
| 18 May 2009 | 843,482 |
+-----------------------+-----------------------------------+
| 7 July 2009 | 625,776 |
+-----------------------+-----------------------------------+
| | |
+-----------------------+-----------------------------------+
| Total | 6,924,686 |
+-----------------------+-----------------------------------+
The offer for "C" shares was closed on 30 June 2009 and the final allotment was
made on 7 July 2009. After issue costs, GBP6,543,828 was raised from these share
issues. Under an agreement between the Company and the Investment Manager, the
Company agreed to pay the Investment Manager an offer fee of 5.5% of the gross
proceeds (but net of up front commission paid to authorised introducers by the
Company). The Company paid GBP201,986 to Climate Change Capital Limited during
the period in respect of this offer fee.
10. Dividends
An interim dividend of 1.50 pence per ordinary share has been declared for the
half-year ended 31 August 2009 which will be paid on 13 January 2010 to all
shareholders on the register as at close of business on 11 December 2009. A
final dividend for the year ended 28 February 2009 of 1.50 pence per share was
paid on 14 July 2009.
11. Related parties
The investee companies in which the Company has a shareholding of 20% or more
are considered to be related parties. The significant changes to the balances
and transactions with these companies are presented in the Investment Manager's
report. The aggregate balances at the balance sheet date and transactions with
these companies during the six months to 31 August 2009 are summarised below,
all of which are attributable to the ordinary shareholders only:
+-----------------------------+----------------+----------------+----------------+
| Balances | 31 August | 31 August | 28 February |
| | 2009 | 2008 | 2009 |
+-----------------------------+----------------+----------------+----------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------+----------------+----------------+----------------+
| | (unaudited) | (unaudited) | (audited) |
+-----------------------------+----------------+----------------+----------------+
| Investments - shares | 4,124 | 1,284 | 4,112 |
+-----------------------------+----------------+----------------+----------------+
| Investments - mezzanine | 1,971 | 573 | 1,369 |
| loan stock | | | |
+-----------------------------+----------------+----------------+----------------+
| Accrued interest income | 184 | 16 | 82 |
+-----------------------------+----------------+----------------+----------------+
| | | | |
+-----------------------------+----------------+----------------+----------------+
| Transactions | Six months | Six months | Year ended |
| | ended | ended | |
+-----------------------------+----------------+----------------+----------------+
| | 31 August | 31 August | 28 February |
| | 2009 | 2008 | 2009 |
+-----------------------------+----------------+----------------+----------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------+----------------+----------------+----------------+
| | (unaudited) | (unaudited) | (audited) |
+-----------------------------+----------------+----------------+----------------+
| Mezzanine loan stock | 102 | 16 | 82 |
| interest income | | | |
+-----------------------------+----------------+----------------+----------------+
| Dividend income | - | - | 175 |
+-----------------------------+----------------+----------------+----------------+
12. Report distribution
This half-yearly financial report will be sent to those shareholders who have
requested to continue to receive copies. The report will also be available on
the Company's website ventusvct.com (under The Ventus Funds section) and at the
Company's registered address c/o Capita Registrars, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFVDIVLTFIA
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