TIDMVEN2
RNS Number : 0016R
Ventus 2 VCT PLC
27 October 2011
Ventus 2 VCT plc
Half-yearly Financial Report
for the six month period ended 31 August 2011
Registered No: 05667210
Chairman's Statement
I am pleased to present the financial report of Ventus 2 VCT plc
(the "Company") for the six month period ended 31 August 2011.
Overview
The period since 28 February 2011 has been a challenging one for
the Company, as a further write-down of GBP4,141,000, or 16.87
pence per ordinary share, has been recorded on investments in
companies operating biomass power plants. The Company also
appointed a new Investment Manager during this period.
Wind speeds in the UK during the summer of 2011 were below
long-term averages, however the wind energy generation of investee
companies of the Company has been, on average, 90% of budget during
the first nine months of 2011.
The net asset value of the ordinary share fund of the Company
decreased from 75.9p per ordinary share at 28 February 2011 to
59.6p per ordinary share at 31 August 2011. The net asset value of
the "C" share fund of the Company increased from 92.4p per "C"
share at 28 February 2011 to 92.8p per "C" share at 31 August
2011.
Change of Investment Manager
With effect from 12 September 2011, the Board transferred the
investment management of the Company from Climate Change Capital
Limited to Temporis Capital LLP ("Temporis"). There was no notice
period or charge due to Climate Change Capital Limited under the
Termination and Transfer Agreement. Each of the members of staff
formerly employed by Climate Change Capital Limited in respect of
the Ventus Funds transferred to Temporis Capital LLP on 12
September 2011.
Temporis has been involved in asset management since its
formation in 2005 and specialises in facilitating the provision of
capital to the sustainable and clean tech sectors and, in
particular, providing long-term liquidity to renewable energy
projects. The Board considers that Temporis has the right level of
resources, experience and expertise to manage the existing
portfolio and to successfully implement the future investment
programme. The new Investment Manager has begun a thorough review
of each of the Company's assets and will report to the Board in due
course.
Group
The Company has a shareholding of 60% of the ordinary shares
issued by each of Redeven Energy Limited and Spurlens Rig Wind
Limited. These shareholdings constitute controlling interests
therefore these companies are subsidiaries of the Company. The
consolidated financial statements of the Company and its
subsidiaries (the "Group") are presented in this half-yearly
report.
Net Asset Value and Results - Ordinary Shares
At 31 August 2011, the net asset value of the ordinary share
fund of the Company attributable to equity shareholders stood at
GBP14,624,000 or 59.6p per ordinary share.
The Group's revenue profit attributable to ordinary shareholders
for the six month period ended 31 August 2011 was GBP264,000 or
1.08p per ordinary share. The Group's capital loss attributable to
ordinary shareholders for the period was GBP4,034,000 or 16.44p per
ordinary share, resulting in a net loss to ordinary shareholders
for the period of GBP3,770,000 or 15.36p per ordinary share (six
months ended 31 August 2010: net profit of GBP842,000 or 4.18p per
ordinary share; year ended 28 February 2011: net loss of
GBP1,654,000 or 7.41p per ordinary share).
The value of investments and investments in subsidiaries held by
the Company's ordinary share fund at 31 August 2011 was
GBP13,328,000 compared to GBP17,106,000 at 28 February 2011. 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 value of
the Company's waste wood biomass investments was written down by a
further GBP4,141,000 during the six months to 31 August 2011 which
has had a significant impact on the Company's portfolio value.
The income generated in the ordinary share fund during the
period comprised interest earned on loan stock and cash deposits
and dividends earned from investee companies. Total income
attributable to the ordinary share fund for the six month period to
31 August 2011 was GBP505,000 compared to GBP635,000 for the six
month period ended 31 August 2010. The impairment of the interest
accrued on the loans with the Company's waste wood biomass
investments has had a significant impact on the Company's income.
Also, the Company has received reduced dividends during the six
months compared to the same period last year.
The Company has not declared an interim dividend in respect of
the ordinary share fund in order to preserve the Company's cash
resources.
Investments in PBM Power Limited, Sandsfield Heat & Power
Limited and Twinwoods Heat & Power Limited - Ordinary
Shares
In the financial statements of the Company for the year ended 28
February 2011, the Company recorded write-downs on its investments
in three companies building and operating biomass power plants. The
companies were PBM Power Limited ("PBM"), Sandsfield Heat &
Power Limited ("SHPL") and Twinwoods Heat & Power Limited
("THPL"). The write-downs totalled GBP2,454,000, with PBM
(including amounts advanced to fund the company's operating costs)
being written down by GBP1,104,000, SHPL being written down by
GBP950,000 and THPL being written down by GBP400,000. The
written-down values at 28 Feburary 2011, including accrued interest
on mezzanine loan stock were GBPnil for PBM, GBP2,096,000 for SHPL
and GBP2,045,000 for THPL.
For the reasons set out below, the Board decided in September
2011 to record full write-downs of the remaining balances of the
investments in SHPL and THPL, including the interest accrued on the
mezzanine loan stock. The effect of the further write-downs of SHPL
and THPL is to reduce the Company's NAV by GBP4,141,000, or 16.87
pence per share.
The financial statements of the Company for the year ended 28
February 2011 outlined the key factors impacting on the valuation
of SHPL and THPL and stated that the valuations were subject to a
high degree of uncertainty. The financial statements also stated
that the validity of the valuation assumptions was dependent on the
completion of renegotiation of contracts and debt finance terms
with third parties which were in progress at the date of
preparation of the financial statements.
Bioflame Limited ("Bioflame"), the technology provider and
contractor for the biomass power plants owned by PBM, SHPL and
THPL, became insolvent and stopped trading in September 2011 as a
result of withdrawal of support of its principal backer. Bioflame
entered liquidation on 4 October 2011. The financial, technical and
operational stability of Bioflame was an important factor
supporting the Company's valuations of SHPL and THPL as at 28
February 2011. Bioflame's ceasing to trade also resulted in a
suspension of the contract renegotiations referenced above.
The Company's investment manager, Temporis Capital LLP
("Temporis"), is continuing to work with PBM, SHPL and THPL, as
well as with the lending banks to these investee companies and with
external engineering consultants, with a view to developing a plan
for bringing the biomass power plants forward to sustainable
operation. At the present time, the likely outcome of these efforts
is uncertain.
The write-downs of the investments in PBM, SHPL and THPL do not
affect the Company's "C" shares.
Effective Recovery of GBP530,000 Loaned to PBM - Ordinary
Shares
The Company disclosed in its financial statements for the year
ended 28 February 2011 that an unsecured loan of GBP530,000 was
made to PBM to fund its operating expenses. This loan was not
approved by the Ventus Investment Committee of Climate Change
Capital Limited (the investment manager at the time) and was
recognised as a realised capital loss in the financial statements
for the year ended 28 February 2011.
Since the period end, Temporis has agreed to waive investment
management fees amounting to GBP530,000 in relation to the ordinary
share fund. Also, in order to reinforce the Company's financial
position, Temporis has agreed to advance a GBP530,000 interest-free
loan to the Company's ordinary share fund, to be repaid by the
Company over the period of time that the waived investment
management fees would otherwise have been charged.
Net Asset Value and Results and Dividend - "C" Shares
At the period end, the net asset value per "C" share of the
Company stood at GBP10,510,000 or 92.8p per "C" share. The revenue
profit attributable to "C" shareholders for the period was
GBP101,000 or 0.89p per "C" share. The capital loss attributable to
"C" shareholders for the period was GBP59,000 or 0.52p per "C"
share, resulting in a net profit attributable to "C" shareholders
for the six months ended 31 August 2011 of GBP42,000 or 0.37p per
"C" share (six months ended 31 August 2011: loss of GBP45,000 or
0.43p per "C" share; year ended 28 February 2011: net loss of
GBP75,000 or 0.68p per "C" share).
The value of investments held at 31 August 2011 by the "C" share
fund was GBP5,533,000 compared to GBP3,960,000 at 28 February
2011.
The income generated in the "C" share fund during the period
comprised interest earned on loan stock, cash on deposit and UK
treasury bills. Total income attributable to the "C" share fund for
the six months to 31 August 2011 was GBP210,000 (six months ended
31 August 2011: GBP95,000). The increase in income was primarily
attributable to the increase in loan stock interest as the "C"
share fund has made further investments.
The Company has declared an interim dividend of 1.00p per "C"
share which will be paid on 11 January 2012 to all "C" shareholders
on the register as at the close of business on 9 December 2011.
This is the first dividend to be paid to "C" shareholders.
The Company's Investment Manager, Temporis Capital LLP,
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 constitute the important
events of the period.
Group Key Performance Indicators
For the six
month
period ended
31 August 2011 Ordinary Shares "C" Shares Total
Pence Pence
per per
share share
GBP000 (1) GBP000 (1) GBP000
Revenue profit
attributable
to
equity
shareholders 264 1.08 101 0.89 365
Capital loss
attributable
to equity
shareholders (4,034) (16.44) (59) (0.52) (4,093)
-------- --------------------------------
Net loss
attributable
to equity
shareholders (3,770) (15.36) 42 0.37 (3,728)
Dividends paid
during the
period (245) 1.00 - - (245)
--------------------- -------- ------------------------ -------------------------------- --------------------------
Total movement
in equity
shareholders'
funds (4,015) (14.36) 42 0.37 (3,973)
===================== ======== ======================== ================================ ==========================
% % %
Total expense
ratio (2) 4.78% 3.41% 4.21%
======== ================================ ==========================
As at 31
August
2011 Ordinary Shares "C" Shares Total
Pence Pence
per per
share share
GBP000 (3) GBP000 (3) GBP000
Net asset
value 14,616 59.6 10,510 92.8 25,126
=================== ============================= =================== ============================= =======================
Total
shareholder
return (4) 16,168 70.5 10,510 92.8 26,678
=================== ============================= =================== ============================= =======================
(1) The "per share" value is determined in respect of the
weighted average number of shares in issue during the period,
except in respect of the dividends paid in the period, which is
determined on the basis of the number of shares eligible to receive
dividends at the time the dividends were paid.
(2) The total expense ratio represents the Company's total
operating expenditure during the period (excluding irrecoverable
VAT, merger costs and investment costs) as a percentage of the net
asset value of the Company at period end, as determined in the
Investment Management Agreement.
(3) The "per share" value is determined in respect of the number
of shares in issue at period end, except in respect of the
dividends paid, which is determined on the basis of the number of
shares eligible to receive dividends at the time the dividends were
paid.
(4) The total shareholder return represents the net asset value
of the Group attributable to equity holders at period end plus the
cumulative dividends paid since incorporation.
The performance of the Group is reviewed in the Investment
Manager's Report, including the Company's compliance with HM
Revenue & Customs ("HMRC") VCT regulations. The Group's
prospects are considered in the UK Market Outlook section of the
Investment Manager's Report.
Investments
As at 31 August 2011, the ordinary share fund of the Company
held investments in 17 companies including two subsidiaries, with a
total value of GBP13.33 million. The "C" share fund held
investments in 8 companies with a total investment value of GBP5.53
million.
The Investment Manager's Report provides details of the
investments held as at 31 August 2011. All investments are
structured so as to be treated as qualifying holdings for the
purposes of Venture Capital Trust ("VCT") regulations, unless
otherwise stated.
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. Other than the inherent risks
associated with investment activities, which are discussed in the
Investment Manager's Report, the risks described below are those
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 HMRC VCT regulations
The Board mitigates this risk by regularly reviewing investment
management activity with appropriately qualified advisers and by
obtaining pre-approval from HMRC for each qualifying
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. The new Investment
Manager is undertaking a thorough review of processes and controls
within the Company and each of its investee companies and is to
implement improvements where appropriate. The Investment Manager
will report to the Board in due course further to this review.
-- Non-compliance with the Listing Rules of the Financial
Services Authority, Companies Act legislation, HMRC 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 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 and financial position of the Company and Group
and the loss of the Group as required by Disclosure and
Transparency Rule ("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, being 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 financial statements include a fair review of related
party transactions and changes thereto, as required by DTR
4.2.8R.
The Responsibility Statement has been approved by the Board.
Alan Moore OBE
Chairman
27 October 2011
Investment Manager's Report
Temporis Capital LLP (the "Investment Manager") presents a
review of the investment activities of the Company since the last
annual report.
Ordinary Share portfolio
A summary of the ordinary share fund's investments valuations as
at 31 August 2011 and gains and losses during the six months ended
31 August 2011 is given below.
Unrealised
and
realised
Ordinary Voting Investment gains/ Investment Investment
Shares rights value Investment cost (losses) value cost
Shares Loans Total Shares Loans Total Total Total
as as as as as as as as
at at at at at at at at as at as at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2011 2011 2011 2011 2011 2011 2011 2011 2011 2011
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational:
Wind
Craig
Wind
Farm
Limited * Q 12.50% 655 343 998 497 341 838 54 944 838
Achairn
Energy
Limited * Q 40.40% 1,950 1,332 3,282 1,226 1,289 2,515 129 3,153 2,515
A7 Lochhead
Limited * Q 20.00% 556 122 678 569 121 690 32 646 690
Greenfield
Wind
Farm
Limited * PQ 16.65% 666 1,332 1,998 666 1,332 1,998 - 1,998 1,998
Operational
companies
in the
wind
sector
Broadview
Energy
Limited * Q 2.22% 500 1,800 2,300 200 1,800 2,000 - 2,300 2,000
Firefly
Energy
Limited * Q 50.00% 196 200 396 200 200 400 96 300 400
Operational:
Landfill
gas
Redimo
LFG Limited * Q 50.00% - - - 1,000 - 1,000 - - 1,000
Renewable
Power
Systems
(Dargan
Road)
Limited Q 50.00% 615 1,164 1,779 780 1,120 1,900 77 1,702 1,900
Waste
wood
biomass
PBM Power
Limited Q 25.00% - - - 574 - 574 - - 574
Sandsfield
Heat
& Power
Limited Q 44.90% - - - 1,796 1,000 2,796 (2,096) 2,096 2,796
Twinwoods
Heat
& Power
Limited Q 50.00% - - - 2,000 400 2,400 (2,045) 2,045 2,400
Development
and
pre-planning
Osspower
Limited 50.00% 300 55 355 300 55 355 - 355 355
The Small
Hydro
Company
Limited 22.50% 115 534 649 115 534 649 - 579 579
Redeven
Energy
Limited
** * 60.00% 167 367 534 - 534 534 - 534 534
Spurlens
Rig Wind
Limited
*** * 60.00% 174 45 219 174 45 219 - 198 198
Wind
Power
Renewables
Limited * Q 48.00% 20 120 140 252 120 372 (116) 256 372
Olgrinmore
Limited * 17.60% - - - 68 - 68 - - 68
Total 5,914 7,414 13,328 10,417 8,891 19,308 (3,869) 17,106 19,217
======= ======= ======== ======= ======= ======== =========== =========== ===========
Q - Investment complies with VCT regulations on qualifying
holdings.
PQ - Part of the investment complies with VCT regulations on
qualifying holdings.
* - A company in which Ventus VCT plc's ordinary share fund has
also invested. The Company and Ventus VCT plc are managed by
Temporis Capital LLP.
** - Through development funding agreements entered into by
Redeven Energy Limited, the Company holds the right to invest in
companies which hold lease options on sites for which Redeven
Energy Limited obtains planning permission (further details are
presented below). On the Company's Statement of Financial Position
the value attributed to Redeven Energy Limited is apportioned
between investments, in respect of the investment rights attached
to the development funding agreement and investments in
subsidiaries in respect of the Company's holding in Redeven Energy
Limited.
*** - Spurlens Rig Wind Limited is accounted for within
investments in subsidiaries on the Company Statement of Financial
Position.
Summary of Investments - Ordinary Share Portfolio
Operational wind farms
Each of the following investee companies owns and operates a
single wind farm:
Wind farm Operational Location
capacity since
(megawatts)
10.0 October 2007 Scottish Borders
Craig Wind Farm
Limited
Achairn Energy 6.0 May 2009 Caithness, Scotland
Limited
6.0 June 2009 Lanarkshire, Scotland
A7 Lochhead
Limited
Greenfield Wind 12.3 February
Farm Limited 2011 South Lanarkshire,
Scotland
Technical availability on the operating wind farms in 2011 has
been good, averaging greater than 97%. Wind speeds in the UK in
2011 have remained below long-term averages because of a poor
summer. The Company's portfolio companies achieved good energy
output during the spring and excellent output for September. On
average, the Company's portfolio companies produced 90% of budgeted
output during the first nine months of 2011.
Operational companies in the wind sector
Broadview Energy Limited
Broadview Energy Limited has continued to execute its business
plan in 2011. Broadview's key achievements since the beginning of
the 2011 have been:
-- completion and commencement of operations on Low Spinney, a
four-turbine wind project in Leicestershire
-- financial close and commencement of construction on Seamer, a
five-turbine wind project in Teesside
-- receipt of planning consent on Westnewton, a 3-turbine wind project in Cumbria
In total, Broadview's portfolio includes seven turbines (15.20
megawatts) in operation, five turbines (10.25 megawatts) in
construction and three turbines (6 to 7.5 megawatts) with planning
consent. It also has a portfolio of four proposed wind energy sites
at various stages in the planning process.
Firefly Energy Limited
Firefly Energy Limited continues to provide power purchase
agreements and to roll out its strategy to provide management
accounting services to renewable energy project operators.
The increase in valuation of the Company's investment in Firefly
Energy Limited is due the loan repayment cash flows from the power
purchase agreement business now being discounted over a shorter
period.
Other operational investee companies
Redimo LFG Limited
The operating environment for the Redimo LFG Limited landfill
gas generation portfolio continues to be challenging, as
contamination in the gas continues to cause problems for the
generators at the two largest sites. The Investment Manager is
exploring alternatives for more active management of the sites in
the portfolio. Redimo LFG Limited retains the support of its
lending bank. The Company did not receive cash distributions from
Redimo LFG Limited during the year, and the investment in Redimo
LFG Limited continues to be held in the Company's accounts at a nil
valuation.
Renewable Power Systems (Dargan Road) Limited
Renewable Power Systems (Dargan Road) Limited continues to
perform in line with expectations. The increase in valuation of the
Company's investment is due to expected cash flows now being
discounted over a shorter period.
Waste wood biomass investments
PBM Power Limited, Sandsfield Heat & Power Limited,
Twinwoods Heat & Power Limited
As discussed in the Chairman's Statement, the Company's
investments in PBM Power Limited, Sandsfield Heat & Power
Limited, Twinwoods Heat & Power Limited have been written down
to nil value. The Investment Manager is continuing to work with the
three companies, as well as with the lending banks to the companies
and with external engineering consultants, with a view to
developing a plan for bringing the businesses forward to
sustainable operation. At the present time, the likely outcome of
these efforts is uncertain.
Development and pre-planning investments
Osspower Limited
Osspower Limited has begun construction of its first small hydro
scheme (Allt Fionn Ghlinne) in Scotland, having secured GBP6.45
million of bank financing in May 2011. Ventus 2 VCT plc has entered
into a cost overrun guarantee with the lending bank on behalf of
Osspower Limited in the amount of GBP750,000. The guarantee is in
the form of a loan to be drawn down in the event of the
construction costs of this scheme exceeding GBP7.5 million. As at
the date of this report, the Investment Manager considers the
probability of the guarantee being drawn down to be very low and
the value of the liability associated with the guarantee is
considered to be insignificant at 31 August 2011. Further details
are presented in note 19 of the financial statements. The value of
the Company's investment is held at cost of investment as at 31
August 2011.
The Small Hydro Company Limited
The Small Hydro Company Limited holds planning permission on
five low head run of river hydro electric projects in England and
is currently assessing the strategic options for raising further
finance to construct and operate the projects. The schemes are
expected to be eligible under the Feed-In Tariff regime. The
Feed-In Tariff regime is expected to be subject to further
government consultation in the coming months and this is likely to
have implications for the way forward for the current schemes and
the longer term strategy of The Small Hydro Company Limited.
The Company has a 22.5% equity share in The Small Hydro Company
Limited and has also provided a shareholder loan facility of
GBP534,000.
Redeven Energy Limited
Through a development funding agreement entered into by Redeven
Energy Limited, the Company holds investment rights in three
companies intending to develop and operate wind farms in East
Anglia. Each of the three companies holds a lease option over a
site for which planning permission has been sought. The costs
incurred in relation to the planning applications for these sites
have been met by Redeven Energy Limited. The Company's right to
invest in each of these wind farm companies is subject to Redeven
Energy Limited securing planning permission on each site. Planning
permission is held on two sites with schemes totalling seven
turbines. Progress on the larger of these two schemes, which has
permission to erect five turbines, is dependent on resolution of
certain planning conditions, but the intention is to proceed with
the building out of this project as soon as possible. The third
planning application for a two turbine project was refused in
January 2011. An appeal in relation to this project will be lodged
in November 2011. The Company has not yet made an investment in any
of the three development companies.
Spurlens Rig Wind Limited
A planning application for this proposed six turbine site was
submitted in December 2010. It is expected that the outcome will be
determined within the next six months.
Wind Power Renewables Limited
Wind Power Renewables Limited has submitted planning
applications for three sites in East Anglia. Two of these
applications have been refused, while a determination on the third
site (for 2 turbines) is expected within six months. The second
planning refusal took place during the half-yearly period of these
accounts, as a consequence of which the enterprise value of Wind
Power Renewables has been written down further (to one-third of the
original investment cost). This has resulted in a further write
down of GBP77,000 in the value of the equity held by the
Company.
Olgrinmore Limited
Olgrinmore Limited was a potential two-turbine site in Caithness
which was refused in planning and is being held at nil value. The
Olgrinmore development team is reviewing the options to re-apply
for permission to build a smaller project on the same site which
would address the previous reasons for refusal.
"C" share portfolio
A summary of the "C" share fund's investments valuations as at
31 August 2011 is given below. There were no gains or losses in
value recognised during the six months ended 31 August 2011.
Voting Investment Investment Investment Investment
"C"Shares rights value cost value cost
Shares Loans Total Shares Loans Total Total Total
as as as as as as as as as
at at at at at at at at at
31 31 31 31 31 31 31 28 28
August August August August August August August February February
2011 2011 2011 2011 2011 2011 2011 2011 2011
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational:
Wind
Greenfield
Wind Farm
Limited * PQ 12.50% 500 1,000 1,500 500 1,000 1,500 1,500 1,500
Development,
developers
and
pre-planning
Iceni
Renewables
Limited * 50.00% 400 - 400 400 - 400 400 400
Renewable
Power
Systems
Limited * 0.00% - 350 350 - 350 350 350 350
BEGL 2
Limited * 0.00% - 500 500 - 500 500 500 500
BEGL 3
Limited * 0.00% - 500 500 - 500 500 500 500
Osspower
Limited * 0.00% - - - - - - 300 300
EcoGen
Limited * 0.00% - 410 410 - 410 410 410 410
Allt Dearg
Wind Farmers
LLP * 0.00% - 200 200 200 200 - -
White Mill
Wind Farm
Limited * PQ 25.00% 1,000 673 1,673 1,000 673 1,673 - -
Total 1,900 3,633 5,533 1,900 3,633 5,533 3,960 3,960
======= ======= ======== ======== ======== ======== =========== ===========
PQ - Part of the investment complies with VCT regulations on
qualifying holdings.
* - A company in which Ventus VCT plc's "C" share fund has also
invested. The Company and Ventus VCT plc are managed by Temporis
Capital LLP.
Summary of Investments - "C" Share Portfolio
Operational wind farms
Greeenfield Wind Farm Limited
Both the ordinary share fund and "C" share fund have made
investments in Greenfield Wind Farm Limited, which are presented in
the ordinary share fund's summary of investments above.
Development and pre-planning investments
Shareholders should note that the following investments are not
structured so as to be qualifying holdings for the purposes of the
VCT regulations.
Iceni Renewables Limited
Through Iceni Renewables Limited the Company has invested in and
committed to provide further funding to two wind energy development
projects in Scotland. The total investment and commitment is
GBP400,000. Scoping and pre-planning work is underway on both
sites. The first, named Craigannet, is likely to be submitted for
planning permission this year as a six turbine scheme. The other
site is known as Merkins and is likely to be submitted as a ten
turbine scheme later this year. Lomond Energy Limited is the
development manager of these sites.
Renewable Power Systems Limited
The Company's "C" share fund has provided a loan facility of
GBP350,000 to Renewable Power Systems Limited, a company which
specialises in the development and operation of energy from waste
generating plants. The loan was due to be repaid in June 2011,
however the term has been extended. The loan is currently being
restructured to extend the term further and establish a repayment
schedule. Since 31 August 2011, Renewable Power Systems has repaid
GBP50,000 plus accrued interest on this loan, reducing the balance
to GBP300,000.
BEGL 2 Limited and BEGL 3 Limited
The Company has provided medium term loan facilities of
GBP500,000 to each of BEGL 2 Limited and BEGL 3 Limited.
These companies are subsidiaries of Broadview Energy Limited.
BEGL 2 Limited is the development company for Seamer, a
five-turbine wind farm in Teesside currently being constructed.
BEGL 3 Limited is the development company for Low Spinney, an
operational four-turbine wind farm in Leicestershire.
In each case the loans have been secured against the shares held
by the development companies' parent company and will be used to
meet construction and post consent development costs alongside long
term bank loan facilities.
The loans, together with accrued interest, are to be repaid in
full no later than 30 June 2012.
Osspower Limited
Loans to Osspower Limited by the Company's "C" share fund were
repaid in May 2011. The lending facility to Osspower Limited has
now been cancelled.
EcoGen Limited
The Company's "C" share fund has provided a medium term loan
facility of GBP410,000 to EcoGen Limited. The loan, together with
accrued interest, is to be repaid in full no later than 31 December
2012. It, together with the matching loan made by the "C" share
fund of Ventus VCT plc, is secured against EcoGen Limited's one
third shareholding in Fenpower Limited, a company in which the
Company's ordinary share fund holds an investment (please refer to
the section in the ordinary share report above for further
details).
Allt Dearg Wind Farmers LLP
This LLP has consent to develop a 12 turbine site near
Lochgilphead, Scotland. The "C" share fund has provided a secured
short term loan facility of GBP300,000 to fund pre-financial close
project expenditure of which GBP200,000 had been drawn down at 31
August 2011 and a further GBP75,000 since the period end. The
Company has secured exclusivity to make a long term investment in
the project.
White Mill Wind Farm Limited
The Company has completed an investment in White Mill Windfarm
Limited, which will construct a 14.35 megawatt windfarm in the
Cambridgeshire Fens. The Company invested GBP1million for 25% of
the ordinary share capital, and has provided a mezzanine loan
facility of GBP672,500. The "C" share fund of Ventus VCT plc has
made an investment on the same terms as the Company. The remaining
50% of the ordinary shares are held by a subsidiary of the
Co-operative Group Limited. White Mill Windfarm Limited has secured
a debt facility from the Co-operative Bank plc which, together with
the funding provided by the Company and Ventus VCT plc, will
finance the construction of the project. Construction is underway,
and the site is expected to begin exporting electricity in the
summer of 2012. The windfarm will operate seven REpower MM82
turbines.
Valuation of Investments
It is the accounting policy of the Company to hold its
investments and investments in subsidiaries at fair value. In this
report, the Company's investments in investee companies which
operate an asset and have passed an initial satisfactory
operational period are valued using a discounted cash flow
methodology. The key assumptions that have a significant impact on
discounted cash flow valuations for these assets are the discount
rate used, the price at which the power and associated benefits can
be sold, the amount of electricity the investee company's
generating assets are expected to produce and operating costs.
The fair value of the Company's investments in companies which
have not passed an initial satisfactory operational period, or are
engaged in seeking planning permission, are determined to be the
investment cost subject to a periodic impairment review. The
Company has resolved that it is appropriate to value its holding in
Broadview Energy Limited on the basis of the price paid by
investors in a recent capital raising round. Details of the
valuations are shown in the table above.
Investment Policy
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 and smaller projects which are not attractive to large
development companies and utilities.
Asset Allocation
The Investment Manager primarily seeks to allocate the Company's
investments 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, respectively, 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
would 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 owns 25% to 50% 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 the UK and the
majority of investments made to date are in the wind sector. Funds
are invested with a range of small-scale independent developers so
project risk is not concentrated on 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 also made in technologies that have no
inherent operational correlation with the performance of wind
farms. 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 bank debt financing is non-recourse to the Company.
The returns from projects depend on the UK Government's
continued support for renewable energy, primarily under the
Renewables Obligation and Feed-in Tariff mechanisms. 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 assisting investee companies 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.
To the extent that borrowing should be required by the Group for
any purpose, the Directors shall restrict the borrowings of the
Group. The aggregate principal amount at any time outstanding in
respect of money borrowed by the Group shall not without the
previous sanction of an ordinary resolution of the Company exceed a
sum equal to 10% of the adjusted share capital and reserves of the
Company in accordance with its Articles.
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
HMRC 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 first "C" share offer and ordinary share "top-up"
offer is 1 March 2012. The relevant compliance date for the second
"C" share offer is 1 March 2013.
For the purposes of the 70% qualifying holdings requirement,
disposals of qualifying investments for cash may be disregarded for
a period of six months. Where a VCT breaches one or more of the
requirements due to factors outside of its control, it may apply to
HMRC for a determination that the breach will be disregarded for a
period of 90 days while the breach is remedied.
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
In accordance with the Company's investment policy 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.
Market outlook
According to the Department of Energy and Climate Change (DECC),
approximately one-quarter of the UK's electricity generating
capacity will shut down over the next ten years as old coal and
nuclear power stations close. DECC predicts that more than GBP110
billion in investment is needed to replace this generation capacity
and upgrade the grid. In the longer term, by 2050, DECC expects
electricity demand to double, as the UK shifts more transport and
heating onto the electricity grid.
In response to these challenges, the UK Government has announced
a series of policy announcements and initiatives over the past 18
months that have created considerable uncertainty for participants
in the UK renewable energy market. On 7 February 2011, the
Government announced that it would carry out a comprehensive review
of the Feed-in tariffs (FIT) scheme for small-scale low-carbon
electricity generation, however to date the Government has only
consulted on and made adjustments to the Feed-in Tariffs for solar
PV and anaerobic digestion projects. The outcome of the
comprehensive FIT review could be relevant to the Company's
investments Osspower Limited and The Small Hydro Company. Further
consultation on the comprehensive review of the FIT scheme is
expected this autumn.
On 20 October 2011, the Government issued a consultation paper
regarding ROC (Renewable Obligation Certificate) banding levels for
renewable energy generating stations accredited from 1 April 2013
to 31 March 2017. This public consultation will be open until 12
January 2012, with the new rules going through the parliamentary
process next year and coming into force on 1 April 2013. The level
of support for onshore wind projects is proposed to be reduced from
the current level of 1 ROC per megawatt-hour to 0.9 ROCs per
megawatt-hour effective 1 April 2013. This change, if implemented,
would reduce revenues from wind farms by approximately 5%, but
would not apply to projects commissioned before 1 April 2013. It
would have no impact on any existing wind farms operated by the
Company's investee companies. The Investment Manager's analysis of
any future investments by the Company will take into account the
level of ROCs expected to be available for projects operated by
investee companies. The Company's target returns will not be
impacted by the proposed change in ROC banding for onshore wind
projects.
On 12 July 2011, the UK Government published a White Paper
setting out measures to reform the UK electricity market and
encourage investment in electricity generating capacity. The
Government's stated objective is to create a secure mix of
electricity sources including gas, new nuclear, renewables and
carbon capture and storage. Key elements of the reform package
include:
-- a Carbon Price Floor (announced in Budget 2011) to reduce
investor uncertainty, putting a fair price on carbon and providing
a stronger incentive for investment in low-carbon generation;
-- the introduction of new long-term contracts (Feed-in Tariff
with Contracts for Difference) to provide stable financial
incentives to invest in all forms of low-carbon electricity
generation;
-- an Emissions Performance Standard (EPS) set at 450g CO2/kWh
to reinforce the requirement that no new coal-fired power stations
are built without carbon capture and storage, but also to ensure
necessary short-term investment in gas can take place; and
-- a Capacity Mechanism, including demand response as well as
generation, to ensure future security of electricity supply.
The Government has stated its intention to legislate for the key
elements of this package in the second session of this Parliament,
which starts in May 2012, and for legislation to reach the statute
book by the end of the next session (by spring 2013). The intent is
that provisions in the reform package will begin to take effect in
2014. The Government has stated that it will put in place
transitional arrangements to ensure there is no hiatus in
investment while the new system is established.
The Localism Bill, which has been before Parliament since 13
December 2010, is expected to become law soon. This bill will
result in a significant shift in power to the local level. There is
concern in the renewables industry that the bill will increase the
disconnect between local planning decisions and broader national
policies encouraging renewable energy, resulting in fewer
successful planning applications for renewable energy projects. The
challenge for the renewable industry will be to engage effectively
with local communities and show communities that renewable energy
projects can provide meaningful local economic benefits.
The banking market for renewable energy projects has been
relatively stable in the past year. No new entrants have been seen
over the last year and lending margins and leverage packages remain
consistent with the past few years. Turbine prices have stabilised
in recent months after declining in the 2008-2010 period, although
fluctuations in the Sterling/Euro exchange rate make the timing of
purchasing decisions challenging. Wholesale electricity prices have
been relatively stable in recent months, but are still expected to
rise over the long term due to capacity constraints and to
increases in demand as transport and heating are shifted onto the
electricity grid.
Temporis Capital LLP
Investment Manager
27 October 2011
Directors and Advisers
Directors
Alan Moore (Chairman)
Paul Thomas
Colin 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
Principal Banker
HSBC Bank plc
60 Queen Victoria Street
London
EC4N 4TR
Investment Manager
Temporis Capital LLP
Berger House
36/38 Berkeley Square
London
W1J 5AE
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
VCT Taxation Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Solicitors
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London
EC4R 9HA
Independent Review Report to Ventus 2 VCT plc
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 August 2011 which comprise the group statement
of comprehensive income, the group and company statements of
financial position, the group and company statements of changes in
equity, the group and company statements of cash flows and the
notes to the financial statements. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the
company are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
August 2011 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PKF (UK) LLP
London, UK
27 October 2011
Group Statement of Comprehensive Income
for the six month period ended 31 August 2011 (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 unrealised
loss on investments 8 - (3,126) (3,126) - - - - (3,126) (3,126)
Realised
loss on investments 8 - (576) (576) - - - - (576) (576)
Income 2 505 - 505 210 - 210 715 - 715
Investment
management
fees 3 (63) (189) (252) (33) (98) (131) (96) (287) (383)
Other expenses 4 (130) (293) (423) (51) (4) (55) (181) (297) (478)
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/ profit
before taxation 312 (4,184) (3,872) 126 (102) 24 438 (4,286) (3,848)
Taxation 6 (56) 38 (18) (25) 43 18 (81) 81 -
(Loss)/ profit
and total
comprehensive
income for
the period 256 (4,146) (3,890) 101 (59) 42 357 (4,205) (3,848)
-------- -------- -------- -------- -------- ------- -------- -------- --------
Attributable
to:
The Company's
equity shareholders 264 (4,034) (3,770) 101 (59) 42 365 (4,093) (3,728)
Minority
interest (8) (112) (120) - - - (8) (112) (120)
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/ profit
and total
comprehensive
income for
the period 256 (4,146) (3,890) 101 (59) 42 357 (4,205) (3,848)
======== ======== ======== ======== ======== ======= ======== ======== ========
Return per
share
Basic and
diluted return
per share
(p) 7 1.08 (16.44) (15.36) 0.89 (0.52) 0.37
The Group has only one class of business and derives its income
from investments made in the UK.
The total column of this statement represents the Group'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 the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" 2009 ("SORP") published by the Association of
Investment Companies.
The accompanying notes form an integral part of these financial
statements.
Group Statement of Comprehensive Income
for the six month period ended 31 August 2010 (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 unrealised
gain investments 8 - 534 534 - - - - 534 534
Income 2 635 - 635 95 - 95 730 - 730
Investment
management
fees 3 (52) (156) (208) (31) (92) (123) (83) (248) (331)
Merger costs (30) - (30) - - - (30) - (30)
Other expenses 4 (67) - (67) (39) - (39) (106) - (106)
-------- -------- ------- -------- -------- ------- -------- -------- -------
Profit/ (loss)
before taxation 486 378 864 25 (92) (67) 511 286 797
Taxation 6 (54) 32 (22) (5) 27 22 (59) 59 -
-------- -------- ------- -------- -------- ------- -------- -------- -------
Profit/ (loss)
and total
comprehensive
income attributable
to equity
shareholders 432 410 842 20 (65) (45) 452 345 797
======== ======== ======= ======== ======== ======= ======== ======== =======
Return per
share
Basic and
diluted return
per share
(p) 7 2.14 2.04 4.18 0.19 (0.62) (0.43)
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 Group'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 the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" 2009 ("SORP") published by the Association of
Investment Companies.
The accompanying notes form an integral part of these financial
statements.
Group Statement of Comprehensive Income
for the year ended 28 February 2011 (audited)
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 unrealised
loss on
investments 8 - (1,284) (1,284) - - - - (1,284) (1,284)
Realised
loss on
investments 8 - (268) (268) - - - - (268) (268)
Income 2 1,127 - 1,127 262 - 262 1,389 - 1,389
Investment
management
fees 3 (118) (354) (472) (64) (190) (254) (182) (544) (726)
Impairment
charge - (530) (530) - - - - (530) (530)
Merger costs (31) - (31) - - - (31) - (31)
Other expenses 4 (154) (42) (196) (83) - (83) (237) (42) (279)
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/
profit before
taxation 824 (2,478) (1,654) 115 (190) (75) 939 (2,668) (1,729)
Taxation 6 (90) 90 - (24) 24 - (114) 114 -
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/
profit and
total comprehensive
income attributable
to equity
shareholders 734 (2,388) (1,654) 91 (166) (75) 825 (2,554) (1,729)
======== ======== ======== ======== ======== ======= ======== ======== ========
Return per
share
Basic and
diluted
return per
share (p) 7 3.29 (10.70) (7.41) 0.84 (1.52) (0.68)
The Group has only one class of business and derives its income
from investments made in the UK.
The total column of this statement represents the Group'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 the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" 2009 ("SORP") published by the Association of
Investment Companies.
The accompanying notes form an integral part of these financial
statements.
Group Statement of Financial Position
as at 31 August 2011 (unaudited)
As at 31 August As at 31 August As at 28 February
2011 2010 2011
Reclassified* Reclassified*
(unaudited) (unaudited) (audited)
Ordinary "C" Ordinary "C" Ordinary "C"
Shares Shares Total Shares Shares Total Shares Shares Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-current
assets
Investments 8 12,742 5,533 18,275 19,158 1,850 21,008 16,374 3,960 20,334
Development
wind assets 10 331 - 331 271 - 271 293 - 293
Trade and
other receivables 11 1,372 164 1,536 1,078 62 1,140 1,373 103 1,476
14,445 5,697 20,142 20,507 1,912 22,419 18,040 4,063 22,103
--------- -------- -------- --------- -------- ------- --------- -------- --------
Current
assets
Trade and
other receivables 11 392 263 655 1,090 67 1,157 614 175 789
Cash and
cash equivalents 12 346 4,579 4,925 535 8,547 9,082 664 6,254 6,918
738 4,842 5,580 1,625 8,614 10,239 1,278 6,429 7,707
--------- -------- -------- --------- -------- ------- --------- -------- --------
Total assets 15,183 10,539 25,722 22,132 10,526 32,658 19,318 10,492 29,810
--------- -------- -------- --------- -------- ------- --------- -------- --------
Current
liabilities
Trade and
other payables 13 (183) (29) (212) (147) (28) (175) (197) (24) (221)
Net current
assets 555 4,813 5,368 1,478 8,586 10,064 1,081 6,405 7,486
--------- -------- -------- --------- -------- ------- --------- -------- --------
Financial
liabilities 14 (386) - (386) (372) - (372) (372) - (372)
--------- -------- -------- --------- -------- ------- --------- -------- --------
Net assets 14,614 10,510 25,124 21,613 10,498 32,111 18,749 10,468 29,217
========= ======== ======== ========= ======== ======= ========= ======== ========
Share capital 15 6,134 2,832 8,966 6,134 2,832 8,966 6,134 2,832 8,966
Share premium 7,890 7,874 15,764 7,890 7,874 15,764 7,890 7,874 15,764
Special
reserve 7,803 - 7,803 7,803 - 7,803 7,803 - 7,803
Capital
reserve
- realised (2,663) (329) (2,992) (775) (169) (944) (1,755) (270) (2,025)
Capital
reserve
- unrealised (4,968) - (4,968) (24) - (24) (1,842) - (1,842)
Revenue
reserve 420 133 553 467 (39) 428 401 32 433
--------- -------- -------- --------- -------- ------- --------- -------- --------
Equity
attributable
to equity
holders 14,616 10,510 25,126 21,495 10,498 31,993 18,631 10,468 29,099
Minority
interests (2) - (2) 118 - 118 118 - 118
--------- -------- -------- --------- -------- ------- --------- -------- --------
Total equity 14,614 10,510 25,124 21,613 10,498 32,111 18,749 10,468 29,217
========= ======== ======== ========= ======== ======= ========= ======== ========
Basic and
diluted
net asset
value per
share (p) 16 59.6 92.8 87.6 92.7 75.9 92.4
* The Group Statements of Financial Position as at 31 August
2010 and 28 February 2011 have been adjusted to reflect the
reclassification of development wind assets to trade and other
receivables. These adjustments are further explained in notes 10
and 11 of the financial statements.
Approved by the Board and authorised for issue on 27 October
2011.
Paul Thomas
Director
Ventus 2 VCT plc. Registered No: 05667210
The accompanying notes form an integral part of these financial
statements.
Company Statement of Financial Position
as at 31 August 2011 (unaudited)
As at 31 August As at 31 August As at 28 February
2011 2010 2011
(unaudited) (unaudited) (audited)
Ordinary "C" Ordinary "C" Ordinary "C"
Shares Shares Total Shares Shares Total Shares Shares Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-current
assets
Investments 8 12,742 5,533 18,275 19,158 1,850 21,008 16,374 3,960 20,334
Investments
in subsidiaries 9 586 - 586 732 - 732 732 - 732
Trade and
other receivables 11 750 164 914 301 62 363 570 103 673
14,078 5,697 19,775 20,191 1,912 22,103 17,676 4,063 21,739
--------- -------- -------- --------- -------- ------- --------- -------- --------
Current
assets
Trade and
other receivables 11 340 263 603 1,002 67 1,069 510 175 685
Cash and
cash equivalents 12 325 4,579 4,904 442 8,547 8,989 630 6,254 6,884
665 4,842 5,507 1,444 8,614 10,058 1,140 6,429 7,569
--------- -------- -------- --------- -------- ------- --------- -------- --------
Total assets 14,743 10,539 25,282 21,635 10,526 32,161 18,816 10,492 29,308
--------- -------- -------- --------- -------- ------- --------- -------- --------
Current
liabilities
Trade and
other payables 13 (119) (29) (148) (142) (28) (170) (187) (24) (211)
Net current
assets 546 4,813 5,359 1,302 8,586 9,888 953 6,405 7,358
--------- -------- -------- --------- -------- ------- --------- -------- --------
Net assets 14,624 10,510 25,134 21,493 10,498 31,991 18,629 10,468 29,097
========= ======== ======== ========= ======== ======= ========= ======== ========
Equity
attributable
to equity
holders
Share capital 15 6,134 2,832 8,966 6,134 2,832 8,966 6,134 2,832 8,966
Share premium 7,890 7,874 15,764 7,890 7,874 15,764 7,890 7,874 15,764
Special
reserve 7,803 - 7,803 7,803 - 7,803 7,803 - 7,803
Capital
reserve
- realised (2,663) (329) (2,992) (775) (169) (944) (1,755) (270) (2,025)
Capital
reserve
- unrealised (4,968) - (4,968) (24) - (24) (1,842) - (1,842)
Revenue
reserve 428 133 561 465 (39) 426 399 32 431
--------- -------- -------- --------- -------- ------- --------- -------- --------
Total equity 14,624 10,510 25,134 21,493 10,498 31,991 18,629 10,468 29,097
========= ======== ======== ========= ======== ======= ========= ======== ========
Basic and
diluted
net asset
value per
share (p) 16 59.6 92.8 87.6 92.7 75.9 92.4
Approved by the Board and authorised for issue on 27 October
2011.
Paul Thomas
Director
Ventus 2 VCT plc. Registered No: 05667210
The accompanying notes form an integral part of these
financial
statements.
Group Statement of Changes in Equity
for the six month period ended 31 August 2011 (unaudited)
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 6,134 7,890 7,803 (1,755) (1,842) 401 118 18,749
Loss and total
comprehensive
income for
the period - - - (908) (3,126) 264 (120) (3,890)
Dividends paid
in the period - - - - - (245) - (245)
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
At 31 August
2011 6,134 7,890 7,803 (2,663) (4,968) 420 (2) 14,614
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 2,832 7,874 (270) 32 10,468
Profit and
total
comprehensive
income for
the period - - (59) 101 42
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
At 31 August
2011 2,832 7,874 (329) 133 10,510
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 8,966 15,764 7,803 (2,025) (1,842) 433 118 29,217
Loss and total
comprehensive
income for
the period - - - (967) (3,126) 365 (120) (3,848)
Dividends paid
in the period - - - - - (245) - (245)
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
At 31 August
2011 8,966 15,764 7,803 (2,992) (4,968) 553 (2) 25,124
============== ============== ============== ============== ============== ============= ================ =============
The accompanying notes form an integral part of these financial
statements.
Group Statement of Changes in Equity
for the six month period ended 31 August 2010 (unaudited)
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 3,071 658 7,803 (651) (558) 33 - 10,356
Shares issued
in the period 3,063 7,232 - - - - - 10,295
Changes in
equity
arising
from
acquisition
of
subsidiaries - - - - - 2 118 120
Profit and
total
comprehensive
income for
the period - - - (124) 534 432 - 842
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 6,134 7,890 7,803 (775) (24) 467 118 21,613
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 1,731 4,813 (104) (59) 6,381
Shares issued
in the period 1,101 3,303 - - 4,404
Issue costs - (242) - - (242)
Loss and total
comprehensive
income for
the period - - (65) 20 (45)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 2,832 7,874 (169) (39) 10,498
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 4,802 5,471 7,803 (755) (558) (26) - 16,737
Shares issued
in the period 4,164 10,535 - - - - - 14,699
Issue costs - (242) - - - - - (242)
Changes in
equity
arising
from
acquisition
of
subsidiaries - - - - - 2 118 120
Profit and
total
comprehensive
income for
the period - - - (189) 534 452 - 797
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 8,966 15,764 7,803 (944) (24) 428 118 32,111
============== ============== ============== ============== ============== ============== ============== ==============
The accompanying notes form an integral part of these financial
statements.
Group Statement of Changes in Equity
for the year ended 28 February 2011 (audited)
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 3,071 658 7,803 (651) (558) 33 10,356
Share issued
in the year 3,063 7,232 - - - - 10,295
Changes in
equity
arising
from
acquisition
of
subsidiaries - - - - - 2 118 120
Loss and total
comprehensive
income for
the year - - - (1,104) (1,284) 734 (1,654)
Dividends
paid in the
year - - - - - (368) (368)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 6,134 7,890 7,803 (1,755) (1,842) 401 118 18,749
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 1,731 4,813 (104) (59) 6,381
Shares issued
in the year 1,101 3,303 - - 4,404
Issue costs - (242) - - (242)
Loss and total
comprehensive
income for
the year - - (166) 91 (75)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 2,832 7,874 (270) 32 10,468
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue Minority
capital premium reserve realised unrealised reserve interests Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 4,802 5,471 7,803 (755) (558) (26) - 16,737
Shares issued
in the year 4,164 10,535 - - - - - 14,699
Issue costs - (242) - - - - - (242)
Changes in
equity
arising
from
acquisition
of
subsidiaries - - - - - 2 118 120
Loss and total
comprehensive
income for
the year - - - (1,270) (1,284) 825 - (1,729)
Dividends
paid in the
year - - - - - (368) - (368)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 8,966 15,764 7,803 (2,025) (1,842) 433 118 29,217
============== ============== ============== ============== ============== ============== ============== ==============
The accompanying notes form an integral part of these financial
statements.
Company Statement of Changes in Equity
for the six month period ended 31 August 2011 (unaudited)
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 6,134 7,890 7,803 (1,755) (1,842) 399 18,629
Loss and total
comprehensive
income for
the period - - - (908) (3,126) 274 (3,760)
Dividends
paid in the
period - - - - - (245) (245)
-------------- -------------- -------------- -------------- -------------- ------------- -------------
At 31 August
2011 6,134 7,890 7,803 (2,663) (4,968) 428 14,624
-------------- -------------- -------------- -------------- -------------- ------------- -------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 2,832 7,874 (270) 32 10,468
Profit and
total
comprehensive
income for
the period - - (59) 101 42
-------------- -------------- -------------- -------------- -------------- ------------- -------------
At 31 August
2011 2,832 7,874 (329) 133 10,510
-------------- -------------- -------------- -------------- -------------- ------------- -------------
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 8,966 15,764 7,803 (2,025) (1,842) 431 29,097
Loss and total
comprehensive
income for
the period - - - (967) (3,126) 375 (3,718)
Dividends
paid in the
period - - - - - (245) (245)
-------------- -------------- -------------- -------------- -------------- ------------- -------------
At 31 August
2011 8,966 15,764 7,803 (2,992) (4,968) 561 25,134
============== ============== ============== ============== ============== ============= =============
All amounts presented in the Company Statement of Changes in
Equity are attributable to equity holders.The revenue reserve is a
distributable reserve. The special reserve may be used to fund
buy-backs of ordinary shares as and if it is considered by the
Board to be in the interests of the shareholders.
The accompanying notes form an integral part of these financial
statements.
Company Statement of Changes in Equity
for the six month period ended 31 August 2010 (unaudited)
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 3,071 658 7,803 (651) (558) 33 10,356
Shares issued
in the period 3,063 7,232 - - - - 10,295
Profit and
total
comprehensive
income for
the period - - - (124) 534 432 842
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 6,134 7,890 7,803 (775) (24) 465 21,493
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 1,731 4,813 (104) (59) 6,381
Shares issued
in the period 1,101 3,303 - - 4,404
Issue costs - (242) - - (242)
Loss and total
comprehensive
income for
the period - - (65) 20 (45)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 2,832 7,874 (169) (39) 10,498
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 4,802 5,471 7,803 (755) (558) (26) 16,737
Shares issued
in the period 4,164 10,535 - - - - 14,699
Issue costs - (242) - - - - (242)
Profit and
total
comprehensive
income for
the period - - - (189) 534 452 797
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2010 8,966 15,764 7,803 (944) (24) 426 31,991
============== ============== ============== ============== ============== ============== ==============
All amounts presented in the Company Statement of Changes in
Equity are attributable to equity holders.The revenue reserve is a
distributable reserve. The special reserve may be used to fund
buy-backs of ordinary shares as and if it is considered by the
Board to be in the interests of the shareholders.
The accompanying notes form an integral part of these financial
statements.
Company Statement of Changes in Equity
for the year ended 28 February 2011(audited)
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 3,071 658 7,803 (651) (558) 33 10,356
Share issued
in the year 3,063 7,232 - - - - 10,295
Loss and total
comprehensive
income for
the year - - - (1,104) (1,284) 734 (1,654)
Dividends
paid in the
year - - - - - (368) (368)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 6,134 7,890 7,803 (1,755) (1,842) 399 18,629
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital
Share Share reserve Revenue
capital premium realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 1,731 4,813 (104) (59) 6,381
Shares issued
in the year 1,101 3,303 - - 4,404
Issue costs - (242) - - (242)
Loss and total
comprehensive
income for
the year - - (166) 91 (75)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 2,832 7,874 (270) 32 10,468
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue
capital premium reserve realised unrealised reserve Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2010 4,802 5,471 7,803 (755) (558) (26) 16,737
Shares issued
in the year 4,164 10,535 - - - - 14,699
Issue costs - (242) - - - - (242)
Loss and total
comprehensive
income for
the year - - - (1,270) (1,284) 825 (1,729)
Dividends
paid in the
year - - - - - (368) (368)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 28 February
2011 8,966 15,764 7,803 (2,025) (1,842) 431 29,097
============== ============== ============== ============== ============== ============== ==============
All amounts presented in the Company Statement of Changes in
Equity are attributable to equity holders.The revenue reserve is a
distributable reserve. The special reserve may be used to fund
buy-backs of ordinary shares as and if it is considered by the
Board to be in the interests of the shareholders.
The accompanying notes form an integral part of these financial
statements.
Group Statement of Cash Flows
for the six month period ended 31 August 2011 (unaudited)
Six months ended Six months ended Year ended 28
31 August 2011 31 August 2010 February 2011
Reclassified
(unaudited) (unaudited) * (audited)
Ordinary "C" Ordinary "C" Ordinary "C"
Shares Shares Total Shares Shares Total Shares Shares Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash flows
from
operating
activities
Investment
income
received 488 70 558 351 14 365 751 14 765
Deposit
interest
received 1 14 15 1 16 17 2 34 36
Investment
management
fees paid (252) (131) (383) (179) (123) (302) (443) (254) (697)
Other cash
payments (241) (55) (296) (207) (48) (255) (482) (118) (600)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------
Net cash
outflow
from
operating
activities (4) (102) (106) (34) (141) (175) (172) (324) (496)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------
Cash flows
from
investing
activities
Purchases of
development
wind assets - - - - - - (33) - (33)
Purchases of
investments (91) (1,873) (1,964) (1,420) (1,900) (3,320) (1,572) (4,010) (5,582)
Proceeds
from
investments - 300 300 - 375 375 850 375 1,225
Net cash
outflow
from
investing
activities (91) (1,573) (1,664) (1,420) (1,525) (2,945) (755) (3,635) (4,390)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------
Cash flows
from
financing
activities
"C" shares
issued - - - - 3,960 3,960 - 3,960 3,960
"C" share
issue
costs - - - - (242) (242) - (242) (242)
Dividends
paid (245) - (245) - - - (368) - (368)
Cash
received
on
acquisition
of net
assets
from Ventus
3 VCT plc - - - 639 - 639 639 - 639
Stamp duty
on shares
issued
to acquire
net assets
of Ventus 3
VCT plc - - - (22) - (22) (22) - (22)
Payments to
meet Ventus
3 VCT plc
costs (13) - (13) (32) - (32) (62) - (62)
Loan
financing 35 - 35 40 - 40 40 - 40
Net cash
(outflow)/
inflow from
financing
activities (223) - (223) 625 3,718 4,343 227 3,718 3,945
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------
Net
(decrease)/
increase in
cash and
cash
equivalents (318) (1,675) (1,993) (829) 2,052 1,223 (700) (241) (941)
Cash and
cash
equivalents
at the
beginning
of the
period 664 6,254 6,918 1,364 6,495 7,859 1,364 6,495 7,859
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------
Cash and
cash
equivalents
at the end
of the
period 346 4,579 4,925 535 8,547 9,082 664 6,254 6,918
=============== =============== =============== =============== =============== =============== =============== =============== ==============
* The Group Statement of Cash Flows for the year ended 28
February 2011 has been adjusted to reclassify purchases of
development wind assets of GBP57,000 to other cash payments.
The accompanying notes form an integral part of these financial
statements.
Company Statement of Cash Flows
for the six month period ended 31 August 2011 (unaudited)
Six months ended Six months ended Year ended 28
31 August 2011 31 August 2010 February 2011
(unaudited) (unaudited) (audited)
Ordinary "C" Ordinary "C" Ordinary "C"
Shares Shares Total Shares Shares Total Shares Shares Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash flows
from operating
activities
Investment
income received 488 70 558 351 14 365 751 14 765
Deposit interest
received 1 14 15 1 16 17 2 34 36
Investment
management
fees paid (252) (131) (383) (179) (123) (302) (443) (254) (697)
Other cash
payments (193) (55) (248) (200) (48) (248) (449) (118) (567)
--------------- --------------- --------------- --------------- --------------- ------------------- --------------- --------------- --------------
Net cash (outflow)/
inflow from
operating
activities 44 (102) (58) (27) (141) (168) (139) (324) (463)
--------------- --------------- --------------- --------------- --------------- ------------------- --------------- --------------- --------------
Cash flows
from investing
activities
Purchases of
investments (91) (1,873) (1,964) (1,480) (1,900) (3,380) (1,632) (4,010) (5,642)
Proceeds from
investments - 300 300 - 375 375 850 375 1,225
Net cash outflow
from investing
activities (91) (1,573) (1,664) (1,480) (1,525) (3,005) (782) (3,635) (4,417)
--------------- --------------- --------------- --------------- --------------- ------------------- --------------- --------------- --------------
Cash flows
from financing
activities
"C" shares
issued - - - - 3,960 3,960 - 3,960 3,960
"C" share issue
costs - - - - (242) (242) - (242) (242)
Dividends paid (245) - (245) - - - (368) - (368)
Cash received
on acquisition
of net assets
from Ventus
3 VCT plc - - - 639 - 639 639 - 639
Stamp duty
on shares issued
to acquire
net assets
of Ventus 3
VCT plc - - - (22) - (22) (22) - (22)
Payments to
meet Merger
costs (13) - (13) (32) - (32) (62) - (62)
Net cash
inflow/(outflow)
from financing
activities (258) - (258) 585 3,718 4,303 187 3,718 3,905
--------------- --------------- --------------- --------------- --------------- ------------------- --------------- --------------- --------------
Net
(decrease)/increase
in cash and
cash equivalents (305) (1,675) (1,980) (922) 2,052 1,130 (734) (241) (975)
Cash and cash
equivalents
at the beginning
of the period 630 6,254 6,884 1,364 6,495 7,859 1,364 6,495 7,859
--------------- --------------- --------------- --------------- --------------- ------------------- --------------- --------------- --------------
Cash and cash
equivalents
at the end
of the period 325 4,579 4,904 442 8,547 8,989 630 6,254 6,884
=============== =============== =============== =============== =============== =================== =============== =============== ==============
The accompanying notes form an integral part of these financial
statements.
Notes to the Financial Statements
for the six month period ended 31 August 2011 (unaudited)
1. Accounting convention and policies
Accounting convention
The half-yearly financial statements of the Group and the
Company have been prepared in accordance with International
Financial Reporting Standards ("IFRS") 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 presentation and 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
2011, with the exception of the reclassification of the Group
Statement of Financial Position explained further in notes 10 and
11, and those that will be adopted in the financial statements for
the year ending 29 February 2012.
Where presentational guidance set out in the Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" 2009 is consistent with the
requirements of IFRS, the Directors have sought to prepare the
financial statements on a basis which is compliant with the
guidance.
The financial information contained in this 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 2011 have been filed with the Registrar of Companies.
The auditor's report on these accounts included a reference to
matters to which the auditor drew attention by way of emphasis
without qualifying their report. The auditor's report did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and its subsidiaries (the companies over
which it exercises control) made up to the end of the financial
period. The Company is deemed to have control where it has the
power to govern the financial and operating policies of an investee
company so as to obtain benefits from its activities. In the
Company's financial statements investments in subsidiaries are
accounted for as "fair value through profit or loss" investments in
accordance with the Company's valuation policy. The Company's
shareholding in its subsidiaries is held by the ordinary share
fund.
Business combinations
Newly acquired or newly established businesses are recognised in
the Group Financial Statements from the date of acquisition, which
is the date that the Company achieved control over the business
acquired and are subsequently de-recognised from the date that
control ceases.
The Company accounts for business combinations using the
acquisition method of accounting, with the identifiable assets and
liabilities of acquired entities measured at their fair value at
the time of acquisition. Identifiable intangible assets are
recognised where they can be separated or arise from a contractual
right, and their fair value can be reliably measured.
The difference between the fair value of the cost of the
business acquired and the fair value of the identifiable assets and
liabilities is recognised as goodwill or negative goodwill at the
date of acquisition. Goodwill is not amortised but is tested for
impairment annually and whenever impairment indicators require.
Negative goodwill is recognised immediately in the Statement of
Comprehensive Income.
Impairment testing
The carrying amount of the Group's and the Company's assets,
other than those assets held at fair value through profit and loss,
are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. If there is evidence of impairment, the recoverable
amount, being the higher of the fair value less costs to sell and
the value in use of the asset, is estimated to determine the extent
of any such impairment. For goodwill and other intangible assets
with an indefinite life or which are not ready for use, the test
for impairment is carried out annually.
Income
Income on investments is recognised on an accruals basis, by
reference to the principal outstanding and at the effective
interest rates applicable.
Where contractual arrangements in loan agreements allow for
interest payments to be deferred and the timing of receipt of
interest income may not be determined with reasonable certainty,
the accrued interest is not recognised in the Statement of
Comprehensive Income but is added to the carrying value of the loan
investment. Interest receivable on cash and non-equity investments
is accrued to the end of the period. No tax is withheld at source
on interest income.
Dividend income from investments is recognised when the
shareholders' rights to receive payment have been established,
which is 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
charged partly as capital items where a connection with the
maintenance or enhancement of the value of the investments held can
be demonstrated. 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.
Expenses are allocated between the ordinary and "C" share funds
on the basis of the number of shares in issue during the period,
except expenses which are directly attributable to a particular
share fund.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit before tax as reported in
the Statement of Comprehensive Income because it excludes items of
income or expense that are taxable or deductible in other periods
and it further excludes items that are never taxable or deductible.
The Company's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the period
end.
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.
Due to the Company's status as a Venture Capital Trust, no
provision for deferred taxation is required in respect of any
realised or unrealised appreciation in the Company's
investments.
The carrying amount of deferred tax assets is reviewed at each
period end date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates enacted or
substantively enacted at the period end date. Deferred tax is
charged or credited in the Statement of Comprehensive Income,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity.
Development wind assets
Costs incurred in the pre-planning consent phase of the
development of a wind farm scheme are capitalised as intangible
assets and recognised as development wind assets. Costs associated
with the pre-planning phase of the wind farm development include
options over land leases, planning application costs and
environmental impact studies. These costs may be incurred directly
or comprise part of the fair value attributed to a controlling
interest in a business acquired. The capitalised costs are not
amortised until the asset is substantially complete and available
for its intended use, until which time the asset is subject to an
annual impairment test.
When a consented wind farm scheme begins construction, the
carrying value of the project is transferred to property, plant and
equipment as assets under construction.
Financial Instruments
Financial assets and financial liabilities are recognised on the
Company's Statement of Financial Position when the Company has
become a party to the contractual provisions of each
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
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. These short-term deposits are classified
under cash equivalents as they meet the definition in IAS 7 "Cash
Flow Statements" of a short-term highly liquid investment that is
readily convertible into known amounts of cash and subject to
insignificant risk of change in value.
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.
Loans, 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
proceeds received amount, net of direct issue costs.
Special reserve
The special reserve was created by approval of the High Court to
cancel the Company's share premium account in respect of the shares
issued in the initial offer for the Company's ordinary shares. The
special reserve may be used to fund buy-backs of shares as and when
it is considered by the Board to be in the interests of the
shareholders.
Capital reserve - realised
This reserve includes gains and losses compared to cost on the
realisation of investments and expenses, together with the related
taxation effect, allocated to this reserve in accordance with the
above policy on expenses.
Capital reserve - unrealised
This reserve includes increases and decreases in the valuation
of investments held at fair value.
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 value, all investments,
including investments in subsidiaries, 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 initially 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 and equity based derivatives
are valued in accordance with International Private Equity and
Venture Capital Valuation Guidelines, using the most appropriate
valuation methodology as determined by the Board. Where there has
been a recent arm's length transaction between knowledgeable,
willing parties, the "price of recent investment" methodology is
used to determine the value of the investment. In the absence of a
recent market transaction, unquoted investee companies with
renewable energy generating plant constituting a substantial
portion of their assets and which have proved stable operational
performance for an acceptable period of time are valued using the
discounted future cash flows from the underlying business,
excluding interest accrued in the accounts to date. The period of
time to assess stable operational performance 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. Investments in unquoted
companies and equity based derivatives which have not demonstrated
stable operational performance will be valued using the "price of
recent investment" methodology, reviewed for impairment.
Notwithstanding the above, the Board may determine that an
alternative methodology should be used where this more
appropriately reflects the fair value of an investment.
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 or joint 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.
Key assumptions and key sources of estimation uncertainty
The preparation of the financial statements requires the
application of estimates and assumptions which may affect the
results reported in the financial statements. With the exception of
the changes to the estimates of the waste wood biomass investments
explained in the Investment Manager's Report, the uncertainties
surrounding the estimates and assumptions adopted in these
financial statements are consistent with those adopted in the
financial statements for the year ended 28 February 2011.
Dividends payable
Dividends payable are recognised as distributions in the
financial statements when the Company's liability to make payment
has been established.
Segmental Reporting
The Directors consider that the Company has engaged in a single
operating segment as reported to the chief operating decision maker
which is that of investing in equity and debt. The chief operating
decision maker is considered to be the Board.
2. Income
Group
Six months ended 31 August
2011 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Income from investments
Loan stock interest 449 196 645
Dividends 55 - 55
------------------------- -------------------------- ------------------------
504 196 700
Other income
UK treasury bill
income - 6 6
Bank deposit interest 1 8 9
505 210 715
========================= ========================== ========================
Group
Six months ended 31 August
2010 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Income from investments
Loan stock interest 463 79 542
Dividends 170 - 170
------------------------- -------------------------- ------------------------
633 79 712
Other income
UK treasury bill
income - 12 12
Bank deposit interest 2 4 6
635 95 730
========================= ========================== ========================
Group
Year ended 28 February 2011
(audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Income from investments
Loan stock interest 696 227 923
Dividends 428 - 428
------------------------- -------------------------- ------------------------
1,124 227 1,351
Other income
UK treasury bill
income - 24 24
Bank deposit interest 3 11 14
1,127 262 1,389
========================= ========================== ========================
The income recognised by the Group was wholly derived from the
Company's activities.
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 not subject
to VAT and is payable quarterly in advance. The annual management
fee is allocated 75% to capital and 25% to revenue.
Temporis Capital LLP was appointed as Investment Manager on 12
September 2011 and Climate Change Capital Limited's appointment as
Investment Manager was terminated on the same day with no notice
period. The amount paid to the Investment Manager for the six
months ended 31 August 2011 in respect of net asset value
attributable to ordinary shareholders was GBP252,000 (six months
ended 31 August 2010: GBP208,000; year ended 28 February 2011:
GBP472,000). The amount paid to the Investment Manager for the six
months ended 31 August 2011 in respect of the net assets
attributable to the "C" shareholders was GBP131,000 (six months
ended 31 August 2010: GBP123,000; year ended 28 February 2011:
GBP254,000).
4. Other expenses
Group
Six months ended 31 August
2011 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Revenue expenses:
Directors' remuneration 22 10 32
Fees payable to the
Company's Auditor
for:
- Audit of the Company's
Annual Financial Statements 18 8 26
- The auditing of
accounts of associates
of the Company pursuant
to legislation 17 - 17
- Other services pursuant
to legislation 6 3 9
- Other services relating
to taxation 1 - 1
Legal and professional
fees 18 8 26
Other expenses 48 22 70
----------------------- ------------------------ -----------------------
130 51 181
Capital expenses:
Development funding
costs 279 - 279
Investment costs 2 4 6
Other expenses 12 - 12
423 55 478
======================= ======================== =======================
Group
Six months ended 31 August
2010 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Directors' remuneration 16 10 26
Fees payable to the
Company's Auditor
for:
- Audit of the Company's
Annual Financial Statements 9 6 15
- Other services pursuant
to legislation 6 3 9
- Other services relating
to taxation 1 - 1
Legal and professional
fees 2 1 3
Other expenses 33 19 52
67 39 106
======================= ======================== =======================
Group
Year ended 28 February
2011 (audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Revenue expenses:
Directors' remuneration 38 20 58
Fees payable to the
Company's Auditor
for:
- Audit of the Company's
Annual Financial Statements 17 10 27
- Other services pursuant
to legislation 5 3 8
- Other services relating
to taxation 2 1 3
Legal and professional
fees 13 6 19
Other expenses 79 43 122
----------------------- ------------------------ -----------------------
154 83 237
Capital expenses:
Investment costs 42 - 42
196 83 279
======================= ======================== =======================
The other services pursuant to legislation provided by the
Company's Auditor related to reviews of the half-yearly report.
Other services relating to taxation were in respect of tax services
provided by the Company's Auditor relating to corporation tax
compliance.
5. Directors' remuneration
Group
Six months ended 31 August
2011 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
A Moore 8 4 12
P Thomas 7 3 10
C Wood 7 3 10
Aggregate
emoluments 22 10 32
======================= ======================= =======================
Group
Six months ended 31 August
2010 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
D Pinckney 3 2 5
A Moore 5 4 9
P Thomas 4 2 6
C Wood 4 2 6
Aggregate
emoluments 16 10 26
======================= ======================= =======================
Group
Year ended 28 February 2011
(audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
D Pinckney 3 2 5
A Moore 13 7 20
P Thomas 11 6 17
C Wood 11 5 16
Aggregate
emoluments 38 20 58
======================= ======================= =======================
The Directors did not receive any other remuneration during the
period except for that which is disclosed in the table above.
6. Taxation
The half-yearly tax charge of GBP18,000 in the ordinary share
fund (six months ended 31 August 2010: tax charge GBP22,000; year
ended 28 February 2011: GBPnil) offsets a tax credit of GBP18,000
in the "C" share fund (six months ended 31 August 2010: tax credit
GBP22,000; year ended 28 February 2011: GBPnil). The charge and
credit have been accrued assuming an effective tax rate of 20%.
7. Basic and diluted return per share
The Group's net loss attributable to the ordinary shareholders
of 15.36p per ordinary share (six months ended 31 August 2010: net
profit of 4.18p per ordinary share; year ended 28 February 2011:
net loss of 7.41 per ordinary share) is based on the net loss for
the period of GBP3,770,000 (six months ended 31 August 2010: net
profit of GBP842,000; year ended 28 February 2011: net loss of
GBP1,654,000) and the weighted average number of ordinary shares in
issue during the period of 24,537,560 (six months ended 31 August
2010: 20,143,427; year ended 28 February 2011: 22,322,435).
The Group's basic revenue return to the ordinary shareholders of
1.08p per ordinary share (six months ended 31 August 2010: 2.14p;
year ended 28 February 2011: 3.29p) is based on the basic revenue
return for the period of GBP264,000 (six months ended 31 August
2010: GBP432,000; year ended 28 February 2011: GBP734,000) and the
weighted average number of ordinary shares in issue during the
period of 24,537,560 (six months ended 31 August 2010: 20,143,427;
year ended 28 February 2011: 22,322,435).
The Group's net capital loss to the ordinary shareholders of
16.44p per ordinary share (six months ended 31 August 2010: gain of
2.04p; year ended 28 February 2011: loss of 10.70p) is based on the
net capital loss for the period of GBP4,034,000 (six months ended
31 August 2010: gain of GBP410,000; year ended 28 February 2011:
loss of GBP2,388,000) and the weighted average number of ordinary
shares in issue during the period of 24,537,560 (six months ended
31 August 2010: 20,143,427; year ended 28 February 2011:
22,322,435).
There were no differences between basic and diluted return per
ordinary share because no dilutive instruments had been issued or
granted.
The Group's net profit per "C" share of 0.37p (six months ended
31 August 2010: net loss of 0.43p per "C" share; year ended 28
February 2011: net loss of 0.68p per "C" share) is based on the net
profit for the period of GBP42,000 (six months ended 31 August
2010: net loss of GBP45,000; year ended 28 February 2011: net loss
of GBP75,000) and the weighted average number of "C" shares in
issue during the period of 11,329,107 (six months ended 31 August
2010: 10,515,992; year ended 28 February 2011: 10,919,208).
The Group's basic revenue return per "C" share of 0.89p (six
months ended 31 August 2010: 0.19p; year ended 28 February 2011:
0.84p) is based on the basic revenue return for the period of
GBP101,000 (six months ended 31 August 2010: GBP20,000; year ended
28 February 2011: GBP91,000) and the weighted average number of "C"
shares in issue during the period of 11,329,107 (six months ended
31 August 2010: 10,515,992; year ended 28 February 2011:
10,919,208).
The Group's net capital loss per "C" share of 0.52p (six months
ended 31 August 2010: 0.62p; year ended 28 February 2011:1.52p) is
based on the net capital loss for the period of GBP59,000 (six
months ended 31 August 2010: GBP65,000; year ended 28 February
2011: GBP166,000) and the weighted average number of "C" shares in
issue during the period of 11,329,107 (six months ended 31 August
2010: 10,515,992; year ended 28 February 2011: 10,919,208).
There were no differences between basic and diluted return per
"C" share because no dilutive instruments had been issued or
granted.
8. Investments
Group and
Company Ordinary Shares "C" Shares Total
Six months
ended 31
August Loan Loan Loan
2011 Shares stock Total Shares stock Total Shares stock Total
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 10,242 8,242 18,484 900 3,060 3,960 11,142 11,302 22,444
Opening
unrealised
(losses)/
gains (2,233) 391 (1,842) - - - (2,233) 391 (1,842)
Opening
realised
losses (266) (2) (268) - - - (266) (2) (268)
Opening
fair value 7,743 8,631 16,374 900 3,060 3,960 8,643 11,691 20,334
During
the period
Purchases
at cost - 70 70 1,000 873 1,873 1,000 943 1,943
Disposal
proceeds - - - - (300) (300) - (300) (300)
Unrealised
losses (1,429) (1,697) (3,126) - - - (1,429) (1,697) (3,126)
Realised
losses (574) (2) (576) - - - (574) (2) (576)
Closing
fair value 5,740 7,002 12,742 1,900 3,633 5,533 7,640 10,635 18,275
---------------- --------------- ---------------- ---------------- --------------- -------------- ------------------ --------------- ----------------
Closing
position
Closing
cost 10,242 8,312 18,554 1,900 3,633 5,533 12,142 11,945 24,087
Closing
unrealised
losses (3,662) (1,306) (4,968) - - - (3,662) (1,306) (4,968)
Closing
realised
losses (840) (4) (844) - - - (840) (4) (844)
Closing
fair value 5,740 7,002 12,742 1,900 3,633 5,533 7,640 10,635 18,275
================ =============== ================ ================ =============== ============== ================== =============== ================
Group and
Company Ordinary Shares "C" Shares Total
Six months
ended 31
August Loan Loan Loan
2010 Shares stock Total Shares stock Total Shares stock Total
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 5,345 3,647 8,992 - 325 325 5,345 3,972 9,317
Opening
unrealised
(losses)/
gains (611) 53 (558) - - - (611) 53 (558)
Opening
fair value 4,734 3,700 8,434 - 325 325 4,734 4,025 8,759
During
the period
Investments
transferred
from Ventus
3 VCT plc 4,891 3,879 8,770 - - - 4,891 3,879 8,770
Purchases
at cost 334 1,086 1,420 500 1,350 1,850 834 2,436 3,270
Disposal
proceeds - - - - (325) (325) - (325) (325)
Unrealised
gains 489 45 534 - - 489 45 534
Closing
fair value 10,448 8,710 19,158 500 1,350 1,850 10,948 10,060 21,008
---------------- --------------- -------------- ---------------- --------------- -------------- -------------- -------------- -------------
Closing
position
Closing
cost 10,570 8,612 19,182 500 1,350 1,850 11,070 9,962 21,032
Closing
unrealised
(losses)/
gains (122) 98 (24) - - - (122) 98 (24)
Closing
fair value 10,448 8,710 19,158 500 1,350 1,850 10,948 10,060 21,008
================ =============== ============== ================ =============== ============== ============== ============== =============
Group and
Company Ordinary Shares "C" Shares Total
Year ended
28 February Loan Loan
2011 Shares stock Total Shares Loan stock Total Shares stock Total
(audited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 5,345 3,647 8,992 - 325 325 5,345 3,972 9,317
Opening
unrealised
(losses)/
gains (611) 53 (558) - - - (611) 53 (558)
Opening
fair value 4,734 3,700 8,434 - 325 325 4,734 4,025 8,759
During
the year
Investments
transferred
from Ventus
3 VCT plc 4,891 3,879 8,770 - - - 4,891 3,879 8,770
Purchases
at cost 406 1,166 1,572 900 3,110 4,010 1,306 4,276 5,582
Disposal
proceeds (400) (450) (850) - (375) (375) (400) (825) (1,225)
Unrealised
(losses)/
gains (1,622) 338 (1,284) - - - (1,622) 338 (1,284)
Realised
losses (266) (2) (268) - - - (266) (2) (268)
Closing
fair value 7,743 8,631 16,374 900 3,060 3,960 8,643 11,691 20,334
-------------- --------------- -------------- ------------ ---------------
Closing
position
Closing
cost 10,242 8,242 18,484 900 3,060 3,960 11,142 11,302 22,444
Closing
unrealised
(losses)/
gains (2,233) 391 (1,842) - - - (2,233) 391 (1,842)
Closing
realised
losses (266) (2) (268) - - - (266) (2) (268)
Closing
fair value 7,743 8,631 16,374 900 3,060 3,960 8,643 11,691 20,334
============== =============== ============== ============ ===============
The shares held by the Company represent equity holdings in
unquoted UK companies and equity based derivatives. The Investment
Manager's Report above provides details in respect of the Company's
shareholding in each investment.
Through development funding agreements entered into by Redeven
Energy Limited, the Company holds the right to invest in companies
which hold lease options on sites for which Redeven Energy Limited
obtains planning permission. The value attributed to the investment
rights attached to this development funding agreement is recognised
in the fair value of the investments held on the Group and Company
Statement of Financial Position.
The investments acquired and disposed of during the period are
detailed in the Investment Manager's Report.
9. Investments in subsidiaries
Subsidiary Country of Portion of voting Portion of voting Portion of voting Principal
undertaking incorporation rights rights rights activity
As at 31 August As at 31 August As at 28 February
2011 2010 2011
Wind farm
Redeven Energy development
Limited England & Wales 60% 60% 60% funding
Spurlens Rig Wind Wind farm
Limited England & Wales 60% 60% 60% development
Ordinary Shares
Six months ended 31 August 2011 Shares Shareholder loans Total
(unaudited) GBP000 GBP000 GBP000
Opening position
Opening cost 174 558 732
Opening fair value 174 558 732
During the period
Purchases at cost - 21 21
Realised loss - (167) (167)
Closing fair value 174 412 586
Closing position
Closing cost 174 579 753
Closing unrealised loss - (167) (167)
Closing fair value 174 412 586
Ordinary Shares
Six months ended 31 August 2010 Shares Shareholder loans Total
(unaudited) GBP000 GBP000 GBP000
Opening position
Opening cost - - -
Opening fair value - - -
During the period
Investments held by the Company
becoming subsidiaries by virtue of
the Merger 87 249 336
Investments transferred from Ventus 3
VCT plc 87 249 336
Purchases at cost - 60 60
Closing fair value 174 558 732
Closing position
Closing cost 174 558 732
Closing fair value 174 558 732
Ordinary Shares
Year ended 28 February 2011 Shares Shareholder loans Total
(audited) GBP000 GBP000 GBP000
Opening position
Opening cost - - -
Opening fair value - - -
During the year
Investments held by the Company
becoming subsidiaries by virtue of
the Merger 87 249 336
Investments transferred from Ventus 3
VCT plc 87 249 336
Purchases at cost - 60 60
Closing fair value 174 558 732
Closing position
Closing cost 174 558 732
Closing fair value 174 558 732
10. Development wind assets
The Group's development wind assets comprise capitalised costs
incurred in the pre-planning phase of the development of wind farm
schemes. The development wind assets are held by the Company's
subsidiary undertakings which are held by the ordinary share fund
only. There have been no impairments to the value of these assets
during the period. However, the carrying values of the Group's
development wind assets have been adjusted in respect of the prior
periods to account for a reclassification to trade and other
receivables in respect of recoverable development funding costs
incurred by Redeven Energy Limited as this company does not hold
the investment rights in the projects directly (refer to note
11).
Six months ended 31 August 2011 Ordinary Shares
(unaudited) GBP000
Opening position
Gross carrying amount 1,096
Opening value prior to reclassification 1,096
Reclassification to trade and other receivables (803)
Opening value (reclassified) 293
During the period
Purchases at cost 38
Closing value 331
Closing position
Gross carrying amount 331
Closing value 331
Six months ended 31 August 2010 Ordinary Shares
(unaudited) GBP000
Opening position
Gross carrying amount -
Opening value -
During the period
Assets acquired or recognised through business combinations 1,006
Reclassification to trade and other receivables (777)
Purchases at cost 42
Closing value 271
Closing position
Gross carrying amount 271
Closing value (reclassified) 271
Year ended 28 February 2011 Ordinary Shares
(audited) GBP000
Opening position
Gross carrying amount -
Opening value -
During the year
Assets acquired or recognised through business combinations 1,006
Reclassification to trade and other receivables (803)
Purchases at cost 90
Closing value 293
Closing position
Gross carrying amount 293
Closing value (reclassified) 293
11. Trade and other receivables
The carrying values of the Group's trade and other receivables
as at 31 August 2010 and 28 February 2011 have been adjusted to
take account of a reclassification from development wind assets to
other receivables in respect of development funding costs incurred
by the Company's subsidiary, Redeven Energy Limited, as this
company does not hold the investment rights in the projects
directly (refer to note 10).
Group
As at 31 August 2011 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current
assets
Accrued
interest
income 750 164 914
Other
receivables 622 - 622
1,372 164 1,536
Current
assets
Accrued
interest
income 328 187 515
Other
receivables 54 48 102
Corporation
tax - 23 23
Prepayments 10 5 15
392 263 655
Group
As at 31 August 2010 (unaudited)
Reclassified
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 301 62 363
Balance prior to reclassification 301 62 363
Other receivables reclassified from
development wind assets 777 - 777
Balance as reclassified 1,078 62 1,140
Current assets
Accrued interest income 669 15 684
Other receivables 408 46 454
Prepayments 13 6 19
1,090 67 1,157
Group
As at 28 February 2011 (audited)
Reclassified
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 570 103 673
Balance prior to reclassification 570 103 673
Other receivables reclassified
from development wind assets 803 - 803
Balance as reclassified 1,373 103 1,476
Current assets
Accrued interest income 493 122 615
Other receivables 111 48 159
Prepayments 10 5 15
614 175 789
Company
As at 31 August 2011 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 750 164 914
750 164 914
Current assets
Accrued interest income 328 187 515
Other receivables 2 48 50
Corporation tax - 23 23
Prepayments 10 5 15
340 263 603
Company
As at 31 August 2010 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 301 62 363
301 62 363
Current assets
Accrued interest income 669 15 684
Other receivables 320 46 366
Prepayments 13 6 19
1,002 67 1,069
Company
As at 28 February 2011 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 570 103 673
570 103 673
Current assets
Accrued interest income 493 122 615
Other receivables 7 48 55
Prepayments 10 5 15
510 175 685
As at 31 August 2011, accrued interest income on loan stock of
GBP914,000 due to the Group and Company and other receivables due
to the Group of GBP622,000 represent non-current assets (31 August
2010: GBP363,000; 28 February 2011: GBP673,000). The Directors
consider that the carrying amount of trade and other receivables
approximates to their fair value.
12. Cash and cash equivalents
The total cash and cash equivalents held in the Company's
ordinary share fund was GBP325,000 at 31 August 2011 (31 August
2010: GBP442,000; 28 February 2011: GBP630,000). The reduction,
over the period, in cash and cash equivalents held by the ordinary
share fund was due to the purchase of investments, payment of
dividends and expenses exceeding cash proceeds from
investments.
The cash balances of the subsidiaries held by the Company's
ordinary share fund are consolidated into the Group's financial
statements. At 31 August 2011 the cash held by the subsidiaries
totalled GBP21,000 (31 August 2011: GBP93,000; 28 February 2011:
GBP34,000).
The total cash and cash equivalents held in the Company's "C"
share fund was GBP4,579,000 at 31 August 2011 (31 August 2010:
GBP8,547,000; 28 February 2011: GBP6,254,000). The decrease in cash
and cash equivalents during the period was attributable to the
purchase of investments and payment of investment management fees
and other expenses which was offset by income received from
investments, proceeds from loan investments repaid and deposit
interest received.
The Directors consider that the carrying amounts of the cash and
cash equivalents approximate to their fair value.
13. Trade and other payables
Group
As at 31 August 2011 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 23 - 23
Trade payables 48 2 50
Accruals 112 27 139
183 29 212
Group
As at 31 August 2010 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 26 (26) -
Trade payables - - -
Other payables 12 18 30
Accruals 109 36 145
147 28 175
Group
As at 28 February 2011 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 4 (4) -
Trade payables 17 - 17
Other payables 10 8 18
Accruals 166 20 186
197 24 221
Company
As at 31 August 2011 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 23 - 23
Trade payables 2 2 4
Accruals 94 27 121
119 29 148
Company
As at 31 August 2010 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 26 (26) -
Trade payables - - -
Other payables 7 18 25
Accruals 109 36 145
142 28 170
Company
As at 28 February 2011 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 4 (4) -
Trade payables 17 - 17
Other payables - 8 8
Accruals 166 20 186
187 24 211
The Directors consider that the carrying amounts of trade and
other payables approximate to their fair value.
14. Financial liabilities
Group
As at 31 August 2011 (unaudited)
Ordinary Shares
GBP000
Shareholder loans 386
386
Group
As at 31 August 2010 (unaudited)
Ordinary Shares
GBP000
Shareholder loans 372
372
Group
As at 28 February 2011 (audited)
Ordinary Shares
GBP000
Shareholder loans 372
372
The Group's financial liabilities consist of shareholder loans
of GBP30,000 and GBP356,000 provided by Ventus VCT plc to the
Company's subsidiaries, Redeven Energy Limited and Spurlens Rig
Wind Limited respectively.
The Directors consider that the carrying amounts of the
financial liabilities approximate to their fair value.
15. Share capital
Ordinary Shares "C" Shares Total
Number of shares Number of shares Number of shares
Authorised of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2011
(audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
At 31 August
2011
(unaudited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
Ordinary Shares "C" Shares Total
Allotted, called
up and fully Number of shares Number of shares Number of shares
paid of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2011
(audited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
At 31 August
2011
(unaudited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
Ordinary Shares "C" Shares Total
Number of shares Number of shares Number of shares
Authorised of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2010
(audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
At 31 August
2010
(unaudited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
Ordinary Shares "C" Shares Total
Allotted, called
up and fully Number of shares Number of shares Number of shares
paid of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2010
(audited) 12,287,249 3,071 6,924,686 1,731 19,211,935 4,802
Allotted, called
up and fully
paid during the
period 12,250,311 3,063 4,404,421 1,101 16,654,732 4,164
At 31 August
2010
(unaudited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
Ordinary Shares "C" Shares Total
Number of shares Number of shares Number of shares
Authorised of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2010
(audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
At 28 February
2011 (audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
Ordinary Shares "C" Shares Total
Allotted, called
up and fully Number of shares Number of shares Number of shares
paid of 25p each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2010
(audited) 12,287,249 3,071 6,924,686 1,731 19,211,935 4,802
Allotted, called
up and fully
paid during the
year 12,250,311 3,063 4,404,421 1,101 16,654,732 4,164
At 28 February
2011 (audited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
16. Basic and diluted net asset value per share
The calculation of the Group's net asset value per ordinary
share of 59.6p as at 31 August 2011 (31 August 2010: 87.6p; 28
February 2011: 75.9p) is based on net assets attributable to equity
holders of GBP14,616,000 (31 August 2010: GBP21,495,000; 28
February 2011: GBP18,631,000) divided by 24,537,560 ordinary shares
in issue at that date (31 August 2010: 24,537,560 ordinary shares;
28 February 2011: 24,537,560 ordinary shares). The "C" share fund
did not hold investments in subsidiaries at 31 August 2011.
The Company's net asset value per ordinary share of 59.6p at 31
August 2011 (31 August 2010: 87.6p; 28 February 2011: 75.9p) is
based on net assets attributable to the ordinary shareholders of
GBP14,624,000 (31 August 2010: GBP21,493,000; 28 February 2010:
GBP18,629,000) and the number of shares in issue as at 31 August
2011 of 24,537,560 (31 August 2010: 24,537,560 ordinary shares; 28
February 2011: 24,537,560 ordinary shares).
The net asset value per "C" share of 92.8p at 31 August 2011 (31
August 2010: 92.7p; 28 February 2011: 92.4p) is based on net assets
attributable to the "C" shareholders of GBP10,510,000 (31 August
2010: GBP10,498,000; 28 February 2011: GBP10,468,000) and the
number of shares in issue as at 31 August 2011 of 11,329,107 (31
August 2010: 11,329,107; 28 February 2011: 11,329,107).
17. Dividends
A final dividend for the year ended 28 February 2011 of 1.00p
per ordinary share was paid to ordinary shareholders on 10 August
2011.
An interim dividend of 1.00p per "C" share has been declared for
the six month period ended 31 August 2011 which will be paid on 11
January 2012 to all "C" shareholders on the register as at close of
business on 9 December 2011. This is the first dividend to be paid
to "C" shareholders.
18. Events since period end
Since the period end the Company's "C" share fund has invested a
further GBP75,000 in Allt Dearg Wind Farmers LLP by way of a loan
under a GBP300,000 two year loan facility dated 15 March 2011 of
which a total GBP275,000 has now been drawn.
Since the period end Renewable Power Systems Limited part repaid
its loan with the Company's "C" share fund by GBP50,000 and paid
interest of GBP10,600. The outstanding balance of the loan is
GBP300,000.
Since the period end, the new investment manager, Temporis, has
agreed to waive investment management fees amounting to GBP530,000
in relation to the ordinary share fund. Also, in order to reinforce
the Company's financial position, Temporis has agreed to advance a
GBP530,000 interest-free loan to the Company's ordinary share fund,
to be repaid by the Company over the period of time that the waived
investment management fees would otherwise have been charged.
19. Contingencies, guarantees and financial commitments
The contingencies, guarantees and financial commitments of the
Company were disclosed in the annual report and financial
statements for the year ended 28 February 2011. In addition to
those contingencies, guarantees and financial commitments
previously disclosed, the Company has entered into the following
agreements:
On 29 July 2010, the Company registered a charge over its shares
in Twinwoods Heat & Power Limited to The Co-operative Bank plc
as security for a senior loan facility of GBP5.6 million raised by
Twinwoods Heat & Power Limited to finance the construction
costs of the waste wood biomass plant. The liability of the Company
under this charge of shares is limited to the value of the
Company's investment in shares of Twinwoods Heat & Power
Limited.
On 17 May 2011, the Company registered a charge over its shares
in Osspower Limited to The Co-operative Bank plc as security for
senior loan funding of up to GBP6,450,000 raised by Osspower
Limited to finance the construction costs of the Allt Fionn Ghlinne
small hydro scheme. The liability of the Company under this charge
of shares is limited to the value of the Company's investment in
shares of Osspower Limited.
The Company has provided a cost overrun guarantee of GBP750,000
to the Co-operative Bank plc on behalf of Osspower Limited. Any
sums called under this guarantee shall be payable by way of a loan
from the Company to Osspower Ltd which may be drawn down in the
event of the construction of Allt Fionn Ghlinne small hydro scheme
exceeding its budget of GBP7.5 million. In the event of cost
overrun, the loan is repayable over a term of 15 years, interest
free. The Directors consider the probability of the loan being
drawn down to be very low and the fair value of the liability
associated with the guarantee is not considered to be significant
at the period end.
On 26 July 2011, the Company registered a charge over its shares
in White Mill Wind Farm Limited to The Co-operative Bank plc as
security for a senior loan facility of up to GBP15.5 million raised
by White Mill Wind Farm Limited to finance the construction costs
of the wind farm. The liability of the Company under this charge of
shares is limited to the value of the Company's investment in
shares of White Mill Wind Farm Limited.
As at 31 August 2011, the Company had provided a two year loan
facility to Allt Dearg Wind Farmers LLP of GBP300,000 of which
GBP200,000 had been drawn down and GBP100,000 was outstanding to be
drawn. A further GBP75,000 has been drawn down since the period
end.
20. Related party transactions
The Company appointed Temporis Capital LLP as Investment Manager
on 12 September 2011 and terminated the appointment of Climate
Change Capital Limited as its Investment Manager on the same day
with no notice period. Details of the fees paid to Climate Change
Capital Limited, the Investment Manager during the six months ended
31 August 2011, are set out in note 3.
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 period end and transactions with these
companies during the six months to 31 August 2011 are summarised
below.
As at 31 August 2011 (unaudited)
Ordinary Shares "C" shares Total
GBP000 GBP000 GBP000
Balances as at 31 August 2011 (unaudited)
Investments - shares 4,872 1,900 6,493
Investments - loan stock 5,158 1,673 7,110
Accrued interest income 504 192 696
Transactions in the six months ended 31 August 2011 (unaudited)
Loan stock interest income 304 80 384
Dividend income 48 - 48
As at 31 August 2010 (unaudited)
Ordinary Shares "C" shares Total
GBP000 GBP000 GBP000
Balances as at 31 August 2010 (unaudited)
Investments - shares 8,312 - 8,312
Investments - loan stock 4,785 - 4,785
Accrued interest income 497 - 497
Other receivables 255 - 255
Transactions in the six months ended 31 August 2010 (unaudited)
Loan stock interest income 245 - 245
Dividend income 160 - 160
As at 28 February 2011
Ordinary Shares "C" shares Total
GBP000 GBP000 GBP000
Balances as at 28 February 2011 (audited)
Investments - shares 6,817 900 7,717
Investments - loan stock 7,047 1,000 8,047
Accrued interest income 540 124 664
Transactions in the year ended 28 February 2011 (audited)
Loan stock interest income 559 124 683
Dividend income 428 - 428
There are no differences between the Group and Company related
party transactions with the exception of investments included above
totalling GBP753,000 relating to Redeven Energy Limited and
Spurlens Rig Wind Limited (31 August 2010: GBP732,000; 28 February
2011: GBP732,000) which are consolidated into the Group accounts,
of which GBP174,000 was invested in shares (31 August 2010:
GBP174,000; 28 February 2011: GBP174,000) and GBP300,000 in
shareholder loans (31 August 2010: GBP558,000; 28 February 2011:
GBP558,000).
At 31 August 2011 the Company's ordinary share fund was owed
GBP541,000 by PBM Power Limited in respect to amounts which had
been advanced to fund the investee company's operating expenses.
The Company's shareholding in PBM Power Limited was 25% at the
period end. The carrying value of the amount receivable is
considered to be fully impaired due to the poor performance of this
investment.
21. Report distribution
In accordance with the Company's commitment to environmental
sustainability and to minimise costs wherever appropriate, the
financial statements will continue to be made available through
regulated news service providers and will also be available in the
Financial Reports section of the Company's website
www.ventusvct.com. Any shareholder who wishes to receive
notification of reports by email or post may request this by
contacting the Registrar 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
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