TIDMVEN2
RNS Number : 8292P
Ventus 2 VCT PLC
30 October 2012
Ventus 2 VCT plc
Half-yearly Financial Report
for the six month period ended 31 August 2012
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 2012. The
period has seen significant uplifts in the net asset value of both
of the Company's share funds. After payment of the final dividends
for the year ended 29 February 2012, the NAV per ordinary share
increased by 12.0p and the NAV per "C" share increased by
12.6p.
The ordinary share fund has a portfolio of four companies with
operational wind farms and one company which operates landfill gas
generators, all of which are generating strong cash yields in the
form of dividends and loan interest payments. The ordinary share
fund's investment in Osspower Limited was written up by GBP1.49
million during the period as the small hydro scheme built by this
investee company became operational.
The "C" share fund's portfolio now includes two companies with
operating wind farms, a company with a wind farm in construction
and four other companies developing wind farms.
In the Company's most recent annual report, which was published
on 31 May 2012, the Directors set out their intentions and
objectives with respect to future dividends. The Directors stated
their intention to pay a minimum annual dividend of 3.5p per
ordinary share for the next three years and an annual dividend of
3p to 4p per share per "C" share for the next two years. The
Directors affirm these intentions and believe that, for the year
ending 28 February 2013, the Company will be in a position to pay
full-year dividends in line with the statements in the most recent
annual report, that is, at least 3.5p per ordinary share and at
least 3p per "C" share. It should be stressed that these are
intentions only, and no forecasts are intended or are to be
inferred.
The "C" share fund has approximately GBP2.6 million of cash
available to be invested. The Investment Manager has identified
suitable investments to invest these funds and expects the "C"
share fund to be substantially invested by the end of the financial
year.
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, Results and Dividend - Ordinary Shares
At 31 August 2012, the net asset value of the ordinary share
fund of the Company attributable to equity shareholders stood at
GBP17,292,000 or 70.8p per ordinary share. At 31 August 2012, the
net asset value of the Group attributable to equity holders stood
at GBP16,899,000.
The Group's revenue profit attributable to ordinary shareholders
for the six month period ended 31 August 2012 was GBP663,000 or
2.70p per ordinary share. The Group's capital gain attributable to
ordinary shareholders for the period was GBP2,420,000 or 9.90p per
ordinary share, resulting in a net gain to ordinary shareholders
for the period of GBP3,083,000 or 12.60p per ordinary share (six
months ended 31 August 2011: net loss of GBP3,770,000 or 15.36p per
ordinary share; year ended 29 February 2012: net loss of
GBP3,967,000 or 16.15p per ordinary share).
The value of investments and investments in subsidiaries held by
the Company's ordinary share fund at 31 August 2012 was
GBP14,205,000 compared to GBP13,048,000 at 29 February 2012. During
the six months to 31 August 2012, the Company received a repayment
of its loan investment with Broadview Energy Limited of
GBP1,800,000 plus interest which has significantly improved the
cash position of the Company. 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 income generated in the ordinary share fund during the
period comprised interest earned on loan stock and cash deposits,
fees earned on loan stock and dividends earned from investee
companies. Total income attributable to the ordinary share fund for
the six month period to 31 August 2012 was GBP921,000 compared to
GBP505,000 for the six month period ended 31 August 2011. The
increase in revenue was due to higher dividends from wind farm
investee companies which resulted from higher output during last
winter, a significant dividend from Renewable Power Systems (Dargan
Road) Limited which followed the sale of a generator and an early
repayment fee on the loan made to Broadview Energy Limited which
was repaid during the period.
The Company has declared an interim dividend of 1.75p per
ordinary share which will be paid on 16 January 2013 to all
ordinary shareholders on the register as at the close of business
on 14 December 2012.
Net Asset Value, Results and Dividend - "C" Shares
At the period end, the net asset value per "C" share of the
Company stood at GBP11,834,000 or 104.5p per "C" share. The revenue
profit attributable to "C" shareholders for the period was
GBP143,000 or 1.26p per "C" share. The capital gain attributable to
"C" shareholders for the period was GBP1,390,000 or 12.28p per "C"
share, resulting in a net profit attributable to "C" shareholders
for the six months ended 31 August 2012 of GBP1,533,000 or 13.54p
per "C" share (six months ended 31 August 2011: net profit of
GBP42,000 or 0.37p per "C" share; year ended 29 February 2012: net
loss of GBP59,000 or 0.51p per "C" share).
The value of investments held at 31 August 2012 by the "C" share
fund was GBP8,483,000 compared to GBP8,183,000 at 29 February
2012.
The income generated in the "C" share fund during the period
comprised interest and fees earned on loan stock investments and
cash on deposit. Total income attributable to the "C" share fund
for the six months to 31 August 2012 was GBP275,000 (six months
ended 31 August 2011: GBP210,000). The increase in income resulted
from recognition of a facility fee of GBP90,000 on a short-term
loan, offset by a reduction in interest income resulting from loan
investments having been repaid during the period.
The Company has declared an interim dividend of 1.20p per "C"
share which will be paid on 16 January 2013 to all "C" shareholders
on the register as at the close of business on
14 December 2012.
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 share capital that has been
raised. The investments made constitute the important events of the
period.
Group Key Performance Indicators
Results and
dividends
For the six
months ended
31 August
2012 Ordinary Shares "C" Shares Total
Pence Pence
per share per share
GBP000 (1) GBP000 (1) GBP000
Revenue profit
attributable
to equity
shareholders 663 2.70 143 1.26 806
Capital gain
attributable
to equity
shareholders 2,420 9.90 1,390 12.28 3,810
----------------------- ----------------------------- --------------------- ---------------------------- --------------------------
Net gain
attributable
to equity
shareholders 3,083 12.60 1,533 13.54 4,616
Dividends
paid during
the year (562) (2.30) (113) (1.00) (675)
----------------------- ----------------------------- --------------------- ---------------------------- --------------------------
Total movement
in equity
shareholders'
funds 2,521 10.30 1,420 12.54 3,941
======================= ============================= ===================== ============================ ==========================
% % %
On-going
charges
ratio (2) 1.22% 3.07% 1.98%
======================= ============================= ===================== ============================ ==========================
Ordinary Shares "C" Shares Total
Pence Pence
GBP000 per share GBP000 per share GBP000
As at 31
August
2012
Net asset
value (3) 16,899 69.2 11,834 104.5 28,733
======================= ============================= ===================== ============================ ==========================
Total
shareholder
return (4) 19,013 82.4 12,060 106.5 31,073
======================= ============================= ===================== ============================ ==========================
Company Key Performance Indicators
Results and
dividends
For the six
months ended
31 August
2012 Ordinary Shares "C" Shares Total
Pence Pence
per share per share
GBP000 (1) GBP000 (1) GBP000
Revenue profit
attributable
to equity
shareholders 665 2.72 143 1.26 808
Capital gain
attributable
to equity
shareholders 2,802 11.46 1,390 12.28 4,192
--------------------- ----------------------------- ----------------------- ---------------------------- --------------------------
Net gain
attributable
to equity
shareholders 3,467 14.18 1,533 13.54 5,000
Dividends
paid during
the year (562) (2.30) (113) (1.00) (675)
--------------------- ----------------------------- ----------------------- ---------------------------- --------------------------
Total movement
in equity
shareholders'
funds 2,905 11.88 1,420 12.54 4,325
===================== ============================= ======================= ============================ ==========================
% % %
On-going
charges
ratio (2) 1.20% 3.07% 1.96%
===================== ============================= ======================= ============================ ==========================
Ordinary Shares "C" Shares Total
Pence Pence
GBP000 per share GBP000 per share GBP000
As at 31
August
2012
Net asset
value (3) 17,292 70.8 11,834 104.5 29,126
===================== ============================= ======================= ============================ ==========================
Total
shareholder
return (4) 19,406 84.0 12,060 106.5 31,466
===================== ============================= ======================= ============================ ==========================
(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 on-going charges ratio represents the Group or Company's
total operating expenditure respectively during the period
(excluding irrecoverable VAT, tender costs and investment costs) as
a percentage of the net asset value of the Group attributable to
equity holders or the net asset value of the Company at the period
end respectively, as determined in the Investment Management
Agreement.
(3) The "per share" value is determined in respect of the number
of shares in issue at the 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") Venture Capital Trust ("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 2012, the ordinary share fund of the Company
held investments in 16 companies including two subsidiaries, with a
total value of GBP14.21 million. The "C" share fund held
investments in eight companies with a total investment value of
GBP8.48 million.
The Investment Manager's Report provides details of the
investments held as at 31 August 2012. All investments are
structured so as to be treated as qualifying holdings for the
purposes of 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. In addition, the Board
has appointed an independent internal auditor, Roffe Swayne, to
report directly to the Board in respect of the Company's internal
controls undertaken by the Investment Manager.
-- 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.
-- Reliance on the UK Government's continued support for the renewable energy sector
The future level of Government-mandated support for renewables
has important implications for the industry and could impact the
value of investments the Company has made in companies developing
renewable projects. However, the Directors believe that any future
reductions in renewable energy tariffs should not impact any
existing investments in companies operating renewable energy
assets, as the UK Government has a consistent history of
grandfathering financial support mechanisms for existing
projects.
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.
Alan Moore OBE
Chairman
29 October 2012
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 profit 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.
Paul Thomas
Director
29 October 2012
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 investment valuations as
at 31 August 2012 and gains and losses during the six months ended
31 August 2012 is given below.
Ordinary Voting Investment Investment Gain/ Investment Investment
Shares rights value cost (loss) value cost
in
the
six
Shares Loans Total Shares Loans Total months Total Total
as as as as as as as as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 29 29
August August August August August August August August February February
2012 2012 2012 2012 2012 2012 2012 2012 2012 2012
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational:
Wind
Craig
Wind
Farm
Limited * Q 12.50% 878 346 1,224 497 341 838 21 1,203 838
Achairn
Energy
Limited * Q 40.40% 2,431 1,351 3,782 1,226 1,289 2,515 110 3,672 2,515
A7 Lochhead
Limited * Q 20.00% 642 125 767 569 121 690 (9) 776 690
Greenfield
Wind
Farm
Limited * PQ 16.65% 1,272 1,471 2,743 666 1,332 1,998 745 1,998 1,998
Operational
companies in
the wind sector
Broadview
Energy
Limited * Q 2.22% 450 - 450 200 - 200 - 2,250 2,000
Firefly
Energy
Limited * Q 50.00% - 139 139 200 160 360 (16) 155 360
Operational:
Landfill gas
Redimo
LFG
Limited * Q 50.00% - - - 1,000 - 1,000 - - 1,000
Renewable
Power
Systems
(Dargan
Road)
Limited Q 50.00% 1,003 1,278 2,281 780 1,120 1,900 398 1,883 1,900
Operational:
Small hydro
Osspower
Limited 50.00% 1,785 60 1,845 300 55 355 1,490 355 355
Development
and pre-planning
The
Small
Hydro
Company
Limited 22.50% - - - 115 534 649 - - 649
Redeven
Energy
Limited** * 60.00% 167 423 590 - 590 590 - 584 584
Spurlens
Rig
Wind
Limited*** * 60.00% - 32 32 174 69 243 - 32 242
Eye
Wind
Power
Limited * 50.00% 352 - 352 234 - 234 117 - -
Wind
Power
Renewables
Limited * 0.00% - - - - - - (20) 140 372
Olgrinmore
Limited * 17.60% - - - 68 - 68 - - 68
Waste wood
biomass
PBM
Power
Limited 25.00% - - - 574 - 574 - - 574
Sandsfield
Heat
& Power
Limited Q 44.90% - - - 1,796 1,000 2,796 - - 2,796
Twinwoods
Heat
& Power
Limited 0.00% - - - - - - - - 2,400
Total 8,980 5,225 14,205 8,399 6,611 15,010 2,836 13,048 19,341
------- ------- -------- ------- ------- -------- ------- ----------- -----------
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 the ordinary share fund of Ventus VCT plc
has also invested. The Company and Ventus VCT plc are both 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 has obtained 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.
During the six months ended 31 August 2012, the Company's
ordinary share fund advanced net new funds of GBP65,000 to acquire
a 50% shareholding in Eye Wind Power Limited. As part of this
transaction, the Company disposed of its entire interest in Wind
Power Renewables Limited. This interest consisted of 48% of the
ordinary shares of Wind Power Renewables Limited as well as a loan
of GBP138,000 plus accrued interest of GBP31,000. The cost of the
Company's investment in Eye Wind Power Limited is recorded as
GBP234,000, representing the cash advanced plus disposal of the
Wind Power Renewables Limited loan (including accrued interest),
however the value of the investment is considered to be the price
of recent investment made by Ventus VCT plc for the same
shareholding, which was GBP352,000.
During the period, Broadview Energy Limited repaid the Company a
loan of GBP1,800,000 together with interest accrued of GBP778,000
and a prepayment fee of GBP162,000.
Summary of Investments
Details of the valuations of the investments held by the
ordinary share fund are shown in the table above.
OPERATIONAL WIND
Each of the following investee companies owns and operates a
single wind farm:
Wind farm
capacity Operational
(megawatts) since Location
Craig Wind Farm 10.0 October 2007 Dumfries
Limited and Galloway,
Scotland
Achairn Energy 6.0 May 2009 Caithness,
Limited Scotland
A7 Lochhead 6.0 June 2009 Lanarkshire,
Limited Scotland
Greenfield Wind 12.3 March 2011 South Lanarkshire,
Farm Limited Scotland
The Company's investments in companies which own an operating
wind farm are valued using discounted cash flow models. The values
of Craig Wind Farm Limited and Achairn Energy Limited increased
during the six months ended 31 August 2012 primarily because the
underlying project debt in each company decreased during the period
and the Investment Manager amended the valuation models to reflect
a more realistic distribution profile subsequent to full repayment
of senior debt. The value of A7 Lochhead Limited was also impacted
by these factors but decreased during the six month period because
of a change in the profile of the projected cash flows combined
with the impact of discounting a shorter period of projected future
cash flows at 31 August 2012 than at 29 February 2012. The value of
Greenfield Wind Farm Limited increased significantly during the six
months ended 31 August 2012 because the investment was still held
at cost as at 29 February 2012 and has subsequently been revalued
on a discounted cash flow basis in line with the Company's
accounting policy which is discussed in more detail below.
Set out below is a brief summary of the performance of the
investee companies operating wind farms. All the companies
operating wind farms experienced good availability during the six
months ended 31 August 2012, however wind speeds were below
average, resulting in output across the portfolio being 18% below
budget. In the 12-month period ended 31 August 2012, all the wind
farms operated by investee companies of the Company produced at
least 95% of budgeted output, with an average across the portfolio
of 100%. It should be noted that there considerable lags between
the production of electricity of a wind farm operated by an
investee company and the ultimate payment of dividends from the
investee company to the Company.
Craig Wind Farm Limited
The electricity production of Craig Wind Farm Limited during the
six months ended 31 August 2012 was 83% of budget. The Company
received dividends and mezzanine interest cash payments totalling
GBP60,000 from Craig Wind Farm Limited in the six months ended 31
August 2012, representing a 7.2% cash yield during the six-month
period on the cost of investment. The value of the Company's
investment in Craig Wind Farm Limited increased by GBP21,000 during
the six months ended 31 August 2012.
Achairn Energy Limited
The electricity production of Achairn Energy Limited during the
six months ended 31 August 2012 was 78% of budget. The Company
received dividends and mezzanine interest cash payments totalling
GBP167,000 from Achairn Energy Limited in the six months ended 31
August 2012, representing a 6.6% cash yield during the six-month
period on the cost of investment. The value of the Company's
investment in Achairn Energy Limited increased by GBP110,000 during
the six months ended 31 August 2012.
A7 Lochhead Limited
The electricity production of A7 Lochhead Limited during the six
months ended 31 August 2012 was78% of budget. The Company received
dividends and mezzanine interest cash payments totalling GBP79,000
from A7 Lochhead Limited in the six months ended 31 August 2012,
representing an 11.5% cash yield during the six-month period on the
cost of investment. The value of the Company's investment in A7
Lochhead Limited decreased by GBP9,000 during the six months ended
31 August 2012.
Greenfield Wind Farm Limited
Greenfield Wind Farm Limited began exporting electricity to the
grid in January 2011 and became fully operational in March 2011.
Electricity production during the six months ended 31 August 2012
was 83% of budget. The ordinary share fund of the Company received
mezzanine interest cash payments totalling GBP360,000 from
Greenfield Wind Farm Limited in the six months ended 31 August
2012, representing an 18.1% cash yield during the six-month period
on the cost of investment. The value of the ordinary share fund's
investment in Greenfield Wind Farm Limited increased by GBP745,000
during the six months ended 31 August 2012. Although Greenfield
Wind Farm Limited's wind farm had been operating for over a year as
at 29 February 2012, it had not been taken over because there were
technical issues which had not been resolved to the satisfaction of
the lender's engineer at that date. The take-over was approved by
the senior lender's engineer on 30 April 2012. As take-over of
Greenfield Wind Farm Limited's wind farm had not occurred as at 29
February 2012, it was not considered appropriate to revalue the
investment based on discounted cash flows as at that date. See
discussion of the application of the Company's valuation policy
below and in note 1 to the financial statements.
OPERATIONAL COMPANIES IN THE WIND SECTOR
Broadview Energy Limited
Broadview Energy Limited is an independent renewable energy
company that develops, constructs and operates wind farms
throughout the UK. In May 2012, Broadview completed the sale of two
operating wind farms and one wind farm in construction (comprising
25.35 megawatts in total). The consideration received by Broadview
Energy Limited for these assets has now been reported in the annual
financial statements of Infinis Wind Holdings Limited as GBP17.4
million including GBP5.3 million consideration deferred until
completion of the wind farm in construction. In addition to the net
cash resulting from the sale of these assets and the deferred
consideration, Broadview has a development portfolio comprised of
two consented projects with a total of eight turbines (16 to 24
megawatts in total), two further projects in the planning process
(totalling nine turbines and 18 to 27 megawatts) and several other
projects at earlier stages of the development process. One of the
Broadview Energy Limited's consented projects, Spring Farm Ridge,
was approved on appeal in July 2012, however this appeal decision
is now facing a legal challenge in the High Court by local
residents.
The Company's holding of ordinary shares in Broadview Energy
Limited has been valued based on the reported value of the assets
sold and the Investment Manager's estimate of the market value of
the value of the remaining consented wind energy projects and the
development pipeline. The valuation as at 31 August 2012 is
unchanged from the valuation at 29 February 2012.
At 29 February 2012, the Company had a secured mezzanine loan
investment of GBP1,800,000 with Broadview Energy Limited that
accrued interest at 11% per annum. This mezzanine loan, which was
secured by one of the wind farm assets recently sold by Broadview
Energy Limited, had a final maturity date of 31 March 2024. In
connection with the sale of the wind farm asset securing this
mezzanine loan, the loan was repaid in full, including accrued
interest, on 4 May 2012. In accordance with the terms of the
mezzanine loan, Broadview Energy Limited also paid an early
repayment fee of GBP162,000.
As well as the equity investment made by the ordinary share
fund, the Company's "C" share fund had two mezzanine loans
outstanding at 29 February 2012 to subsidiaries of Broadview Energy
Limited, which were also repaid in full, including accrued
interest, on 4 May 2012. See the discussion of BEGL 2 Limited and
BEGL3 Limited below.
Firefly Energy Limited
Firefly Energy Limited is the parent company of a group of
trading subsidiaries that have entered into long term power
purchase agreements with customers for 41.7 megawatts of generating
capacity across five wind farm developments. The five wind farm
projects are fully operational and generating revenues. Each of the
five power purchase agreements expires on 31 March 2016. In
addition to earning a margin on the five long-term power purchase
agreements, Firefly Energy Limited also provided power purchase
agreement and management accounting services to third-party
renewable energy project operators.
The Company has a loan investment in Firefly Energy Limited
which had a principal amount outstanding at 31 August 2012 of
GBP160,000 and which accrues interest at 9% per annum. The loan is
valued in the Company's accounts based on the discounted projected
future cash flows from the five power purchase agreement on which
the company earns a spread, net of projected administration costs.
As at 31 August 2012, the value of the loan was GBP139,000. The
loan, as valued, is projected to be paid off, with interest, by the
end of 2016. The Company also holds 50% of the ordinary shares of
Firefly Energy Limited (cost of GBP200,000) which were written down
to nil value in the year ended 29 February 2012.
OPERATIONAL LANDFILL GAS
Redimo LFG Limited
Redimo LFG Limited operates four landfill gas electricity
generation sites in the north of England. Redimo LFG Limited is not
paying dividends to the Company and has been held in the accounts
at a nil valuation since late 2010. Given the senior debt
commitments of the Redimo LFG Limited's subsidiaries, it is highly
unlikely that the Company will recover any part of its investment
in Redimo LFG Limited therefore the loss in value in respect of
this investment is treated as a realised loss.
Renewable Power Systems (Dargan Road) Limited
Renewable Power Systems (Dargan Road) Limited operates a
landfill gas electricity generation site in Northern Ireland. The
site performed in line with expectations over the six months to 31
August 2012 and disposed of the first of its five generators as the
volume of gas at the site reduced. The disposal of the generator
resulted in significant cash inflow for the investee company. The
Company received dividends and loan interest payments totalling
GBP255,000 from Renewable Power Systems (Dargan Road) Limited in
the six months ended 31 August 2012, representing a 13.4% cash
yield during the six-month period on the cost of investment.
The investment in Renewable Power Systems (Dargan Road) Limited
is valued by applying a discount rate to the revenues the Company
expects to receive from the company. The revenue streams are finite
and so, all other things being equal, this will mean that the
holding value will fall over time as the projected revenues are
realised and paid over to the Company. However, the value of the
Company's investment in Renewable Power Systems (Dargan Road)
Limited increased by GBP398,000 in the six months ended 31 August
2012 because the total future cash flows available for distribution
from the investment has been revised upwards. Also the lower risk
profile of this investment has led to a decision to reduce the
discount factor applied in the valuation analysis. The impact of
the reduction in the discount factor on the value of the investment
in prior periods is not considered to be material.
OPERATIONAL SMALL HYDRO
Osspower Limited
The Company holds 50% of the ordinary shares of Osspower
Limited, which owns and operates a 1.99 megawatt hydro project at
Allt Fionn Ghlinne in Scotland. The Allt Fionn Ghlinne site was
commissioned by June 2012, on schedule and on budget. The Company
did not receive dividends from Osspower Limited in the six months
ended 31 August 2012. The value of the Company's investment in
Osspower Limited increased by GBP1,490,000 during the six months
ended 31 August 2012, as Osspower Limited is now valued based on
the discounted cash flows of the Allt Fionn Ghlinne project.
Osspower Limited has consent for a further three small hydro
projects on the same estate as the Allt Fionn Ghlinne project. The
Investment Manager is working with the management of Osspower
Limited to develop the appropriate strategy for financing the
construction of those three projects.
The Company entered into a cost overrun guarantee in May 2011
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
2012. Further details are presented in note 19 of the financial
statements.
DEVELOPMENT AND PRE-PLANNING
The Small Hydro Company Limited
The Small Hydro Company Limited holds planning permission on
five low-head run-of-river small hydroelectric 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 Company made an equity investment of GBP115,000 and holds
22.5% of the ordinary shares of The Small Hydro Company Limited.
The Company has also provided a shareholder loan facility of
GBP534,000. Because of uncertainty about the economics of the
consented projects, uncertainty regarding the future tariff levels
and the requirement for further funding to take the projects
forward, in the financial year ended 29 February 2012 the Company
recorded a write-down in its investment in The Small Hydro Company
Limited of GBP649,000 as well as a write-down of accrued interest
on the loan of GBP89,000. The Investment Manager, with Canal &
River Trust, also a shareholder, is considering ways in which to
restructure the investment in order that the Company may realise
value from the consented schemes. The restructuring will include
the discharging of the loan and accrued interest owed by The Small
Hydro Company Limited to the Company, therefore the write down of
the loan investment is considered to be a realised loss in the
Company's accounts.
Redeven Energy Limited
Through development funding agreements 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 and received.
The planning permissions on the three sites total nine turbines.
The Company is working with the three development companies to
proceed with the building out of the projects as soon as
possible.
Spurlens Rig Wind Limited
Spurlens Rig Wind Limited is the developer of a six-turbine site
in the Scottish Borders which was refused for planning in December
2011. There are no plans to appeal the planning refusal, so the
proposed six-turbine project is no longer viable. As such, the
Company's holding of 60% of the ordinary shares of Spurlens Rig
Wind Limited has been written down in value to GBP32,000 as at 29
February 2012. The valuation of Spurlens Rig Wind Limited is equal
to the company's net current assets which, primarily, comprise VAT
receivable. The Spurlens Rig development team is reviewing the
options to re-apply for permission to build a smaller project on
the same site which might address the reasons for refusal.
Eye Wind Power Limited
On 11 July 2012 the ordinary share funds of the Company and
Ventus VCT plc participated in a transaction where each acquired a
50% shareholding in Eye Wind Power Limited, a company which holds a
site in Suffolk with planning consent to build a two-turbine, 6
megawatt wind farm. The pre-planning development of this site had
been undertaken by Wind Power Renewables Limited, a company in
which the Company previously held 48% of the ordinary shares and to
which the Company had an outstanding loan of GBP138,000 plus
accrued interest of GBP31,000. In executing this transaction, the
Company advanced net new funds of GBP65,000 and disposed of its
entire interest, both equity and debt, in Wind Power Renewables
Limited. The Company and Ventus VCT plc intend to finance Eye Wind
Power Limited to allow it to construct and operate the two-turbine
wind farm. The investment made in Eye Wind Power Limited is not a
qualifying holding for the purposes of the VCT regulations. The
value of the investment is held at GBP352,000 as discussed in the
introduction to the Investment Manager's report. On 25 October
2012, the Company committed to invest a further GBP750,000 in
ordinary shares of Eye Wind Power Limited and to provide a loan
facility of GBP1,050,000. This further investment has been
structured to be a qualifying holding for the purposes of the VCT
regulations.
Wind Power Renewables Limited
The Company disposed of its investment in Wind Power Renewables
Limited on 11 July 2012 as discussed above.
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
lease option held by Olginmore Limited has expired and the
directors are taking steps to close down the company and have it
struck off the register. The Company's investment in Olgrinmore
Limited was written down to nil value in the previous financial
period. The amount by which the company's value has been written
down is considered to be a realised loss.
WASTE WOOD BIOMASS
PBM Power Limited
Sandsfield Heat & Power Limited
Twinwoods Heat & Power Limited
PBM Power Limited, Sandsfield Heat & Power Limited and
Twinwoods Heat & Power Limited are companies that constructed
biomass power plants fired with waste wood. The plant run by the
companies experienced severe operating difficulties. The three
investments had all been written down to nil value in previous
accounting periods. During the six months ended 31 August 2012, the
Company's interest in Twinwoods Heat & Power Limited
(comprising 50% of the ordinary shares and a mezzanine loan of
GBP400,000) was sold for a nominal consideration. Sandsfield Heat
& Power Limited is currently in administration and is expected
to go into liquidation by the end of 2012. There is no possibility
of any recovery from PBM Power Limited and Sandsfield Heat &
Power Limited, therefore the loss in value in respect of these
investments is a realised loss. PBM Power Limited is not considered
to be a qualifying holding.
"C" share portfolio
A summary of the "C" share fund's investment valuations as at 31
August 2012 and gains during the six months ended 31 August 2012 is
given below.
Voting Investment Investment Investment Investment
"C" Shares rights value cost Gains value cost
in
Shares Loans Total Shares Loans Total the Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 29 29
August August August August August August August August February February
2012 2012 2012 2012 2012 2012 2012 2012 2012 2012
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational:
Wind
Greenfield
Wind
Farm
Limited * PQ 12.50% 955 1,104 2,059 500 1,000 1,500 559 1,500 1,500
White
Mill
Windfarm
Limited * PQ 25.00% 1,765 812 2,577 1,000 673 1,673 904 1,673 1,673
Construction:
Wind
AD Wind
Farmers
Limited * Q 50.00% 1,000 - 1,000 1,000 - 1,000 - 1,000 1,000
Development and
pre-planning
Ovalau
Investments
1 Limited * Q 50.00% 1,000 - 1,000 1,000 - 1,000 - 1,000 1,000
Ovalau
Investments
2 Limited * Q 50.00% 1,000 - 1,000 1,000 - 1,000 - 1,000 1,000
Iceni
Renewables
Limited * 50.00% 400 17 417 400 17 417 - 400 400
Blackhaugh
Wind
Limited * 50.00% 20 - 20 20 - 20 - - -
Short-term investments
with renewable energy
companies
Renewable
Power
Systems
Limited * 0.00% - - - - - - - 200 200
BEGL
2 Limited * 0.00% - - - - - - - 500 500
BEGL
3 Limited * 0.00% - - - - - - - 500 500
EcoGen
Limited * 0.00% - 410 410 - 410 410 - 410 410
Total 6,140 2,343 8,483 4,920 2,100 7,020 1,463 8,183 8,183
------- ------- -------- ------- ------- -------- ------- ----------- -----------
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 the "C" share fund of Ventus VCT plc has
also invested. The Company and Ventus VCT plc are both managed by
Temporis Capital LLP.
During the six months ended 31 August 2012, the Company's "C"
share fund invested GBP17,500 in Iceni Renewables Limited and has
made an initial investment of GBP20,000 in Blackhaugh Wind Limited.
During the period, the Company received payment of GBP1,200,000
plus accrued interest with respect to short-term investments with
renewable energy companies. These short-term investments, in the
form of secured loans, had been made in order to generate
investment yields for the Company during the "C" share investment
period as the wind investment portfolio was developed. The interest
on these secured loans has helped defray the "C" share fund's
running costs and allowed the Company to pay dividends to holders
of "C" shares. There is one remaining short-term investment
outstanding, a secured loan to EcoGen Limited in the amount of
GBP410,000 plus accrued interest of 12% per annum. This loan is
scheduled for repayment on 31 December 2012.
The Company's "C" share fund has approximately GBP2.6 million of
cash and cash equivalents available to be invested. The Investment
Manager has identified suitable investments to invest these funds
and expects the "C" share funds to be substantially invested by the
end of the current financial year.
Summary of Investments
Details of the valuations of the investments held by the "C"
share fund are shown in the table above.
OPERATIONAL WIND
Each of the following investee companies owns and operates a
single wind farm:
Wind farm
capacity
(megawatts) Operational since Location
Greenfield Wind Farm Limited 12.3 March 2011 South Lanarkshire,
Scotland
White Mill Windfarm Limited 14.35 August 2012 Cambridgeshire,
England
The Company's investments in companies which own an operating
wind farm are valued using discounted cash flow models. The
valuesof Greenfield Wind Farm Limited and White Mill Windfarm
Limited increased during the six months ended 31 August 2012. Each
investment was valued using a discounted cash flow model as at 31
August 2012, whereas at 29 February 2012 each investment was held
at cost.
Greenfield Wind Farm Limited
This investment is held by both the ordinary and "C" share funds
and is discussed above. The "C" share fund of the Company received
mezzanine interest cash payments totalling GBP271,000 from
Greenfield Wind Farm Limited in the six months ended 31 August
2012, representing an 18.1% cash yield during the six-month period
on the cost of investment. The value of the "C" share fund's
investment in Greenfield Wind Farm Limited increased by GBP559,000
during the six months ended 31 August 2012.
White Mill Windfarm Limited
White Mill Windfarm Limited began exporting electricity to the
grid in May 2012 and became fully operational in August 2012. The
Company did not receive dividends or mezzanine interest cash
payments from White Mill Windfarm Limited in the six months ended
31 August 2012. The value of the Company's investment in White Mill
Windfarm Limited increased by GBP904,000 during the six months
ended 31 August 2012.
WIND UNDER CONSTRUCTION
AD Wind Farmers Limited
The Company's investment of GBP1,000,000 in AD Wind Farmers
Limited was completed in December 2011. The Company owns 50% of the
ordinary share capital of AD Wind Farmers Limited. AD Wind Farmers
Limited is an investor in Allt Dearg Wind Farmers LLP, which is
constructing a 10.2 megawatt wind farm near Lochgilphead, Scotland.
The wind farm will operate 12 Vestas V52 turbines. Construction of
the wind farm commenced in December 2011 and is currently on
schedule and on budget. The turbines have been erected and the wind
farm is scheduled for take-over in December 2012.
DEVELOPMENT AND PRE-PLANNING
Ovalau Investments 1 Limited
Ovalau Investments 2 Limited
In February 2012, the Company invested GBP1,000,000 in Ovalau
Investments 1 Limited and GBP1,000,000 in Ovalau Investments 2
Limited. These two companies have been established to construct
wind farms on identified sites which have planning consent. Ovalau
Investments 1 Limited and Ovalau Investments 2 Limited are
currently in negotiations with turbine suppliers and civil works
contractors in connection with the construction of two wind farms.
The development of these sites by the companies is dependent on the
outcome of commercial negotiations which have not yet been
concluded.
Iceni Renewables Limited
Through Iceni Renewables Limited, the Company has invested
GBP417,000 for the development of two wind energy development
projects in Scotland. The first, named Craigannet, is a six-turbine
project which was submitted for planning on 27 January 2012. The
other site is known as Merkins and was also submitted for planning
on 27 January 2012. Lomond Energy Limited is the development
manager of these sites. Determination of both these planning
applications is expected before the end of 2012, although further
delays are possible. The investment in Iceni Renewables Limited is
not a qualifying holding for the purposes of the VCT
regulations.
Blackhaugh Wind Limited
The Company made an investment in Blackhaugh Wind Limited during
the six months ended 31 August 2012, a company which intends to
apply for planning permission to construct a wind farm in the
Scottish Borders. The investment in Blackhaugh Wind Limited is not
a qualifying holding for the purposes of the VCT regulations.
SHORT-TERM INVESTMENTS WITH RENEWABLE ENERGY COMPANIES
Renewable Power Systems Limited
The loan from the Company's "C" share fund to Renewable Power
Systems Limited, which had a balance of GBP200,000 at 29 February
2012, was repaid in full, along with accrued interest, on 3 August
2012.
BEGL 2 Limited and BEGL 3 Limited
The loans from the Company's "C" shares fund to BEGL 2 Limited
and BEGL 3 Limited, which each had a balance of GBP500,000 at 29
February 2012, were repaid in full, along with accrued interest, on
4 May 2012.
EcoGen Limited
The Company has provided a loan facility of GBP410,000 to EcoGen
Limited, a developer and operator of wind energy projects. This
loan, together with a 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 Ventus VCT
plc ordinary share fund holds an investment. The Company and Ventus
VCT plc are both managed by Temporis Capital LLP. The loan accrues
interest at the rate of 12% per annum. The loan, together with
accrued interest, is to be repaid in full no later than 31 December
2012. The investment in EcoGen Limited is not a qualifying
investment for the purposes of VCT regulations.
Valuation of Investments
It is the accounting policy of the Company to hold its
investments at fair value. In this report, the Company's
investments in investee companies which operate renewable energy
assets are valued using a discounted cash flow methodology, unless
material uncertainties exist as to the future receipt of cash
flows, in which case an investment is valued at cost subject to an
impairment review. In prior periods the Company had applied its
valuation policy in a manner such that investments in companies
operating renewable energy assets were valued at cost until a
deemed satisfactory period of operations of between six and 18
months had passed. Based on the Company's experience over the past
six years with investee companies developing wind and hydro
projects, and given that the projects of such investee companies
use well-established technology and benefit from manufacturer and
contractor warranties, manufacturer performance guarantees and
insurance, the Investment Manager believes the satisfactory
operation of such projects should be determined based on the
specific circumstances and that an arbitrary waiting period of six
to 18 months is unnecessarily prudent. The impact of the change in
application of this policy resulted in unrealised gains of
GBP2,394,000 reported in the current period.
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 companies' generating assets
are expected to produce and operating costs.
The fair value of the Company's investments in project companies
which have not passed an initial satisfactory operational period,
or are engaged in seeking planning permission, are determined to be
the price of investment subject to a periodic impairment
review.
The Company's valuation of its holding in Broadview Energy
Limited is discussed above. The Company's valuation policy,
including the change to the application of the policy in respect of
the time period to determine satisfactory operations, is discussed
in more detail in note 1 of the financial statements.
Investment Policy
The Company is focused on investing in companies developing
renewable energy projects with installed capacities of two to 20
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 seeks to allocate the Company's
investments in equity securities and loan stock of companies owning
renewable energy projects, primarily wind energy. Up to 10% of net
proceeds raised from the initial share offer and the "C" share
offers, 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 made via subscriptions for new share
capital, or acquiring existing 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 Company
intends to continue to have a portfolio concentrated on wind energy
assets.
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 Company
for any purpose, the Directors shall restrict the borrowings of the
Company. The aggregate principal amount at any time outstanding in
respect of money borrowed by the Company 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 was 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.
VCT Regulations
The Finance Bill 2012, which became law on 19 July 2012,
includes measures to increase limits on certain restrictions
relating to VCT Qualifying Investments in respect of investments
made on or after 6 April 2012. The limit on the number of employees
of an investee company has increased from 50 to 250, the limit on
gross assets immediately prior to investment has increased from
GBP7 million to GBP15 million, the limit on gross assets
immediately after investment has increased from GBP8 million to
GBP16 million and the limit on the amount that can be invested in
an individual company in any 12-month period has increased from
GBP2 million to GBP5 million. The GBP5 million limit on the amount
of funds an investee company can receive in any 12-month period
must take into account VCT funding from all sources, as well as EIS
investment and other state-aided investment. The Finance Bill 2012
also removed the annual GBP1 million limit on the amount a VCT can
invest in a Qualifying Investment, except where the investee
company trades through a partnership or joint venture. Finally, the
Finance Bill 2012 has provisions relating to a "disqualifying
purpose" test, which will enable HMRC to deny Qualifying Investment
status for investments structured specifically in a way to access
VCT tax reliefs when the investment would otherwise not have been a
Qualifying Investment.
Market Outlook
According to the Department of Energy and Climate Change (DECC),
approximately one-fifth of the UK's electricity generating capacity
will shut down over the next decade 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. This would likely create upward
pressure on wholesale electricity prices in the long term.
Although the renewable energy industry in the UK benefits from
the favourable long-term price outlook for electricity, the
industry continues to operate in a state of political uncertainty.
There is clear disagreement within the governing coalition on how
renewable energy policy should be implemented, with a significant
group of Conservative MPs, including certain ministers, having
expressed public opposition to onshore wind. On the positive side,
the Government has consistently re-affirmed the concept that
existing projects will always be "grandfathered" with respect to
future changes in tariffs. Furthermore, the Scottish Government
(where a significant portion of the Company's investments are
based) continues to provide strong support for renewables.
In May of this year, the UK Government published legislation for
electricity market reform (EMR) and stated that it expects the
provisions in the reform package to begin taking effect in 2014.
The proposed law is meant to encourage the development of a
balanced portfolio of renewable generation capacity, new nuclear
generation capacity and carbon capture and storage (CCS) and to
ensure that these technologies can compete in the market-place.
Many industry observers are sceptical about the timeline for
implementation of the reforms or even whether the reforms as set
out will be implemented. Recent developments in the nuclear sector,
have added to uncertainty about the implementation of EMR, as RWE
and E.ON have announced their withdrawal from the nuclear sector in
the UK, and industry sources estimate that a Government-backed
floor price of GBP120 to GBP150 per megawatt-hour will be required
in order to support new nuclear plant.
In July, the Government confirmed the level of support for new
onshore wind projects at 0.9 Renewables Obligation Certificates
("ROCs") per megawatt-hour from 1 April 2013 to 31 March 2014,
although the level of ROCs for onshore wind beyond 31 March 2014
will be subject to further consultation. Although the level of ROCs
for onshore wind is important for the industry, the level of ROCs
for new wind farms does not 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 always
take into account the level of ROCs expected to be available for
projects operated by investee companies at the time of
commissioning. Because the Company's target returns remain
unchanged, any future changes in ROC banding for onshore wind will
be reflected in the price the Company will pay for investments.
Also in July, the Government confirmed tariff levels, tariff
digression rates and rules around pre-accreditation and site
definition for small hydro projects. The tariffs and rules, which
were in line with industry expectations, are relevant to the
Company because of its investment in Osspower Limited.
Wholesale electricity prices have been reasonably stable in
2012. The Company has relatively little exposure to short-term
wholesale electricity prices, as its investee companies sell their
electricity output pursuant to power purchase agreements with
wholesale electricity prices that are fixed over the medium
term.
Turbine prices (primarily denominated in Euros) have remained
relatively stable over the past year. The UK market for turbines
has been tight in the past year as developers have rushed to order
turbines to be built and commissioned prior to 1 April 2013, when
ROCs for onshore wind will be reduced by 10%. Although orders for
turbines to be commissioned prior to 1 April 2013 have already been
placed, there may well be a further period of tightening in the UK
turbine market as developers endeavour to commission projects prior
to 1 April 2014, as there is uncertainty as to the level of ROCs
for onshore wind beyond that date. (See above for a discussion of
the ROC regime for onshore UK wind projects). On the positive side,
the recent strength of Sterling against the Euro has been
favourable for UK operators acquiring turbines with prices
denominated in Euros.
The banking market for renewable energy projects remains
challenging. There is limited availability of senior debt finance
for renewable energy projects of 5 to 20 megawatts, which is the
typical size range for investee companies of the Company. Lending
margins and arrangement fees remain very wide by historical
standards and banks are unable to lend over the same term as they
had previously. Although the debt market has made it more difficult
to finance renewable energy projects, the shortage and cost of
senior debt has created an opportunity for the Company to invest
greater amounts of equity in companies with lower leverage (which
has been facilitated by the recent changes in the VCT rules
removing the annual GBP1 million limit on the amount a VCT can
invest in a portfolio company). Investments in portfolio companies
with lower leverage should reduce the volatility in dividends from
those companies compared to the dividends from portfolio companies
with higher leverage. Existing investments of the Company are not
impacted by the current lending environment for renewable energy
projects.
Temporis Capital LLP
Investment Manager
29 October 2012
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
Howard Kennedy LLP
19 Cavendish Square
London
W1A 2AW
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 month period ended 31 August 2012 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
related explanatory notes. 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 2012 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
29 October 2012
Group Statement of Comprehensive Income
for the six month period ended 31 August 2012 (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
Realised
loss on
investments 8 - (36) (36) - - - - (36) (36)
Net unrealised
gain on
investments 8 - 2,872 2,872 - 1,463 1,463 - 4,335 4,335
Income 2 921 - 921 275 - 275 1,196 - 1,196
Investment
management
fees 3 - - - (33) (99) (132) (33) (99) (132)
Other expenses 4 (152) (670) (822) (53) - (53) (205) (670) (875)
-------- -------- ------- -------- -------- ------- -------- -------- -------
Profit
before
taxation 769 2,166 2,935 189 1,364 1,553 958 3,530 4,488
Taxation 6 (110) - (110) (46) 26 (20) (156) 26 (130)
Profit
and total
comprehensive
income
for the
period 659 2,166 2,825 143 1,390 1,533 802 3,556 4,358
-------- -------- ------- -------- -------- ------- -------- -------- -------
Attributable
to:
The Company's
equity
shareholders 663 2,420 3,083 143 1,390 1,533 806 3,810 4,616
Non-controlling
interest (4) (254) (258) - - - (4) (254) (258)
-------- -------- ------- -------- -------- ------- -------- -------- -------
Profit
and total
comprehensive
income
for the
period 659 2,166 2,825 143 1,390 1,533 802 3,556 4,358
-------- -------- ------- -------- -------- ------- -------- -------- -------
Return
per share
Basic and
diluted
return
per share
(p) 7 2.70 9.90 12.60 1.26 12.28 13.54
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 on form an integral part of these
financial statements.
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
Realised
loss on
investment 8 - (576) (576) - - - - (576) (576)
Net unrealised
loss on
investments 8 - (3,126) (3,126) - - - - (3,126) (3,126)
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)
Non-controlling
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 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 on form an integral part of these
financial statements.
Group Statement of Comprehensive Income
for the year ended 29 February 2012 (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
Realised loss
on investments 8 - (4,249) (4,249) - - - - (4,249) (4,249)
Net unrealised
gain on investments 8 - 444 444 - - - - 444 444
Income 2 847 - 847 442 - 442 1,289 - 1,289
Investment
management
fees 3 (63) (189) (252) (65) (194) (259) (128) (383) (511)
Other expenses 4 (253) (675) (928) (94) (65) (159) (347) (740) (1,087)
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/ profit
before taxation 531 (4,669) (4,138) 283 (259) 24 814 (4,928) (4,114)
Taxation 6 (137) 49 (88) (57) 92 35 (194) 141 (53)
(Loss)/ profit
and total
comprehensive
income for
the year 394 (4,620) (4,226) 226 (167) 59 620 (4,787) (4,167)
-------- -------- -------- -------- -------- ------- -------- -------- --------
Attributable
to:
The Company's
equity shareholders 404 (4,371) (3,967) 226 (167) 59 630 (4,538) (3,908)
Non-controlling
interest (10) (249) (259) - - - (10) (249) (259)
-------- -------- -------- -------- -------- ------- -------- -------- --------
(Loss)/ profit
and total
comprehensive
income for
the year 394 (4,620) (4,226) 226 (167) 59 620 (4,787) (4,167)
-------- -------- -------- -------- -------- ------- -------- -------- --------
Return per
share
Basic and
diluted return
per share
(p) 7 1.66 (17.81) (16.15) 1.99 (1.48) 0.51
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 on form an integral part of these
financial statements.
Group Statement of Financial Position
as at 31 August 2012 (unaudited)
As at 31 August As at 31 August As at 29 February
2012 2011 2012
(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 13,750 8,483 22,233 12,742 5,533 18,275 12,599 8,183 20,782
Development
wind assets 10 - - - 331 - 331 - - -
Trade and
other
receivables 11 14 90 104 1,372 164 1,536 37 47 84
13,764 8,573 22,337 14,445 5,697 20,142 12,636 8,230 20,866
--------- -------- --------- --------- -------- -------- --------- -------- --------
Current
assets
Trade and
other
receivables 11 249 267 516 392 263 655 2,014 531 2,545
Cash and
cash
equivalents 12 3,387 3,021 6,408 346 4,579 4,925 622 1,685 2,307
3,636 3,288 6,924 738 4,842 5,580 2,636 2,216 4,852
--------- -------- --------- --------- -------- -------- --------- -------- --------
Total assets 17,400 11,861 29,261 15,183 10,539 25,722 15,272 10,446 25,718
--------- -------- --------- --------- -------- -------- --------- -------- --------
Current
liabilities
Trade and
other payables 13 (317) (27) (344) (183) (29) (212) (231) (32) (263)
Net current
assets 3,319 3,261 6,580 555 4,813 5,368 2,405 2,184 4,589
--------- -------- --------- --------- -------- -------- --------- -------- --------
Financial
liabilities 14 (583) - (583) (386) - (386) (763) - (763)
Net assets 16,500 11,834 28,334 14,614 10,510 25,124 14,278 10,414 24,692
--------- -------- --------- --------- -------- -------- --------- -------- --------
Share capital 15 6,105 2,832 8,937 6,134 2,832 8,966 6,134 2,832 8,966
Capital
redemption
reserve 2,097 - 2,097 - - - - - -
Share premium 2,791 - 2,791 7,890 7,874 15,764 - - -
Special
reserve 10,794 7,874 18,668 7,803 - 7,803 15,693 7,874 23,567
Capital
reserve
- realised (10,586) (510) (11,096) (2,663) (329) (2,992) (9,367) (437) (9,804)
Capital
reserve
- unrealised 5,037 1,463 6,500 (4,968) - (4,968) 1,399 - 1,399
Revenue
reserve 661 175 836 420 133 553 560 145 705
--------- -------- --------- --------- -------- -------- --------- -------- --------
Equity
attributable
to equity
holders 16,899 11,834 28,733 14,616 10,510 25,126 14,419 10,414 24,833
Non-controlling
interests (399) - (399) (2) - (2) (141) - (141)
--------- -------- --------- --------- -------- -------- --------- -------- --------
Total equity 16,500 11,834 28,334 14,614 10,510 25,124 14,278 10,414 24,692
--------- -------- --------- --------- -------- -------- --------- -------- --------
Basic and
diluted
net asset
value per
share (p) 16 69.2 104.5 59.6 92.8 58.8 91.9
Approved by the Board and authorised for issue on 29 October
2012.
Paul Thomas
Director
Ventus 2 VCT plc. Registered No: 05667210
The accompanying notes on form an integral part of these
financial statements.
Company Statement of Financial Position
as at 31 August 2012 (unaudited)
As at 31 August As at 31 As at 29 February
2012 August 2011 2012
(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 13,750 8,483 22,233 12,742 5,533 18,275 12,599 8,183 20,782
Investments
in subsidiaries 9 455 - 455 586 - 586 449 - 449
Trade and
other receivables 11 14 90 104 750 164 914 37 47 84
14,219 8,573 22,792 14,078 5,697 19,775 13,085 8,230 21,315
--------- ------- --------- --------- ------- -------- --------- ------- --------
Current
assets
Trade and
other receivables 11 248 267 515 340 263 603 1,258 531 1,789
Cash and
cash equivalents 12 3,261 3,021 6,282 325 4,579 4,904 608 1,685 2,293
3,509 3,288 6,797 665 4,842 5,507 1,866 2,216 4,082
--------- ------- --------- --------- ------- -------- --------- ------- --------
Total assets 17,728 11,861 29,589 14,743 10,539 25,282 14,951 10,446 25,397
--------- ------- --------- --------- ------- -------- --------- ------- --------
Current
liabilities
Trade and
other payables 13 (292) (27) (319) (119) (29) (148) (197) (32) (229)
Net current
assets 3,217 3,261 6,478 546 4,813 5,359 1,669 2,184 3,853
--------- ------- --------- --------- ------- -------- --------- ------- --------
Financial
liabilities 14 (144) - (144) - - - (327) - (327)
Net assets 17,292 11,834 29,126 14,624 10,510 25,134 14,427 10,414 24,841
--------- ------- --------- --------- ------- -------- --------- ------- --------
Equity attributable
to equity
holders
Share capital 15 6,105 2,832 8,937 6,134 2,832 8,966 6,134 2,832 8,966
Capital
redemption
reserve 2,097 - 2,097 - - - - - -
Share premium 2,791 - 2,791 7,890 7,874 15,764 - - -
Special
reserve 10,794 7,874 18,668 7,803 - 7,803 15,693 7,874 23,567
Capital
reserve
- realised (10,209) (510) (10,719) (2,663) (329) (2,992) (9,373) (437) (9,810)
Capital
reserve
- unrealised 5,037 1,463 6,500 (4,968) - (4,968) 1,399 - 1,399
Revenue
reserve 677 175 852 428 133 561 574 145 719
Total equity 17,292 11,834 29,126 14,624 10,510 25,134 14,427 10,414 24,841
--------- ------- --------- --------- ------- -------- --------- ------- --------
Basic and
diluted
net asset
value per
share (p) 16 70.8 104.5 59.6 92.8 58.8 91.9
Approved by the Board and authorised for issue on 29 October
2012.
Paul Thomas
Director
Ventus 2 VCT plc. Registered No: 05667210
The accompanying notes on form an integral part of these
financial statements.
Group Statement of Changes in Equity
for the six month period ended 31 August 2012 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue Non-controlling
capital reserve premium reserve realised unrealised reserve interests Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 6,134 - - 15,693 (9,367) 1,399 560 (141) 14,278
Shares
issued
in the
period 2,068 - 2,857 - - - - - 4,925
Issue costs - - (66) - - - - - (66)
Shares
repurchased
in the
period (2,097) 2,097 - (4,899) - - - - (4,899)
Transfers
of unrealised
losses
on
investments
to realised
losses
on
investments - - - - (766) 766 - - -
Profit
and total
comprehensive
income
for the
period - - - (453) 2,872 663 (258) 2,824
Dividends
paid in
the period - - - - - (562) - (562)
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
At 31 August
2012 6,105 2,097 2,791 10,794 (10,586) 5,037 661 (399) 16,500
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue Non-controlling
capital reserve premium reserve realised unrealised reserve interests Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 2,832 - - 7,874 (437) - 145 - 10,414
Profit
and total
comprehensive
income
for the
period - - - - (73) 1,463 143 - 1,533
Dividends
paid in
the period - - - - - - (113) - (113)
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ----------------
At 31 August
2012 2,832 - - 7,874 (510) 1,463 175 - 11,834
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue Non-controlling
capital reserve premium reserve realised unrealised reserve interests Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 8,966 - - 23,567 (9,804) 1,399 705 (141) 24,692
Shares
issued
in the
period 2,068 2,857 - - - - - 4,925
Issue costs - (66) - - - - - (66)
Shares
repurchased
in the
period (2,097) 2,097 - (4,899) - - - - (4,899)
Transfers
of unrealised
losses
on
investments
to realised
losses
on
investments - - - - (766) 766 - - -
Profit
and total
comprehensive
income
for the
period - - - - (525) 4,335 806 (258) 4,357
Dividends
paid in
the period - - - - - - (675) - (675)
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ----------------
At 31 August
2012 8,937 2,097 2,791 18,668 (11,096) 6,500 836 (399) 28,334
-------------- --------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
The accompanying notes on 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 Non-controlling
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 year - - - (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 year - - (59) 101 42
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
At 31 August
2011 2,832 7,874 (329) 133 10,510
-------------- -------------- -------------- -------------- -------------- ------------- ---------------- -------------
Capital Capital
Share Share Special reserve reserve Revenue Non-controlling
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 year - - - (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 on form an integral part of these
financial statements.
Group Statement of Changes in Equity
for the year ended 29 February 2012 (audited)
Capital Capital
Share Share Special reserve reserve Revenue Non-controlling
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
Cancellation
of share
premium
account - (7,890) 7,890 - - - - -
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - (2,797) 2,797 - - -
Loss and total
comprehensive
income for
the year - - - (4,815) 444 404 (259) (4,226)
Dividends
paid in the
year - - - - - (245) (245)
-------------- -------------- -------------- -------------- -------------- -------------- ----------------
At 29 February
2012 6,134 - 15,693 (9,367) 1,399 560 (141) 14,278
-------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue Non-controlling
capital premium reserve realised unrealised reserve interests Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 2,832 7,874 - (270) - 32 - 10,468
Cancellation
of share
premium
account - (7,874) 7,874 - - - - -
Profit and
total
comprehensive
income for
the year - - - (167) - 226 - 59
Dividends
paid in the
year - - - - - (113) - (113)
-------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
At 29 February
2012 2,832 - 7,874 (437) - 145 - 10,414
-------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
Capital Capital
Share Share Special reserve reserve Revenue Non-controlling
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
Cancellation
of share
premium
account - (15,764) 15,764 - - - - -
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - (2,797) 2,797 - - -
Loss and total
comprehensive
income for
the year - - - (4,982) 444 630 (259) (4,167)
Dividends
paid in the
year - - - - - (358) - (358)
-------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
At 29 February
2012 8,966 - 23,567 (9,804) 1,399 705 (141) 24,692
-------------- -------------- -------------- -------------- -------------- -------------- ---------------- --------------
The accompanying notes on form an integral part of these
financial statements.
Company Statement of Changes in Equity
for the six month period ended 31 August 2012 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 6,134 - - 15,693 (9,373) 1,399 574 14,427
Shares issued
in the period 2,068 - 2,857 - - - - 4,925
Issue costs - - (66) - - - - (66)
Shares
repurchased
in the period (2,097) 2,097 - (4,899) - - - (4,899)
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - - (766) 766 - -
Profit and
total
comprehensive
income for
the period - - - - (70) 2,872 665 3,467
Dividends
paid in the
period - - - - - - (562) (562)
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2012 6,105 2,097 2,791 10,794 (10,209) 5,037 677 17,292
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 2,832 - - 7,874 (437) - 145 10,414
Profit and
total
comprehensive
income for
the period - - - - (73) 1,463 143 1,533
Dividends
paid in the
period - - - - - - (113) (113)
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2012 2,832 - - 7,874 (510) 1,463 175 11,834
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2012 8,966 - - 23,567 (9,810) 1,399 719 24,841
Shares issued
in the period 2,068 - 2,857 - - - - 4,925
Issue costs - - (66) - - - - (66)
Shares
repurchased
in the period (2,097) 2,097 - (4,899) - - - (4,899)
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - - (766) 766 - -
Profit and
total
comprehensive
income for
the period - - - - (143) 4,335 808 5,000
Dividends
paid in the
period - - - - - - (675) (675)
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 August
2012 8,937 2,097 2,791 18,668 (10,719) 6,500 852 29,126
-------------- ----------------- -------------- -------------- -------------- -------------- -------------- --------------
All amounts presented in the Company Statement of Changes in
Equity are attributable to equity holders.The revenue reserve and
realised capital reserve are distributable reserves. The special
reserves may be used to fund buy-backs and pay dividends as and if
it is considered by the Board to be in the interests of the
shareholders.
The accompanying notes on 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
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
-------------- -------------- -------------- -------------- -------------- ------------- -------------
The accompanying notes on form an integral part of these
financial statements.
Company Statement of Changes in Equity
for the year ended 29 February 2012(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
2011 6,134 7,890 7,803 (1,755) (1,842) 399 18,629
Cancellation
of share
premium
account - (7,890) 7,890 - - - -
Transfers of
unrealised
losses on
investments
to realised
losses on
investments - - - (2,797) 2,797 -
Loss and total
comprehensive
income for
the year - - - (4,821) 444 420 (3,957)
Dividends paid
in the year - - - - - (245) (245)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 29 February
2012 6,134 - 15,693 (9,373) 1,399 574 14,427
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Capital
Share Share Special reserve Revenue
capital premium reserve realised reserve Total
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2011 2,832 7,874 - (270) 32 10,468
Cancellation
of share
premium
account - (7,874) 7,874 - - -
Profit and
total
comprehensive
income for
the year - - (167) 226 59
Dividends paid
in the year - - - (113) (113)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 29 February
2012 2,832 - 7,874 (437) 145 10,414
-------------- -------------- -------------- -------------- -------------- -------------- --------------
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
Cancellation
of share
premium
account - (15,764) 15,764 - - - -
Transfers of
unrealised
losses on
investments
to realised
losses on
investments - - - (2,797) 2,797 - -
Loss and total
comprehensive
income for
the year - - - (4,988) 444 646 (3,898)
Dividends paid
in the year - - - - - (358) (358)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 29 February
2012 8,966 - 23,567 (9,810) 1,399 719 24,841
-------------- -------------- -------------- -------------- -------------- -------------- --------------
The accompanying notes on form an integral part of these
financial statements.
Group Statement of Cash Flows
for the six month period ended 31 August 2012 (unaudited)
Six months Six months Year ended
ended 31 August ended 31 August 29 February
2012 2011 2012
(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 1,897 479 2,376 488 70 558 683 113 796
Deposit
interest
received 4 6 10 1 14 15 2 25 27
Investment
management
fees paid - (132) (132) (252) (131) (383) (252) (259) (511)
Other cash
payments (87) (66) (153) (241) (55) (296) (538) (116) (654)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Net cash
from/
(used in)
operations 1,814 287 2,101 (4) (102) (106) (105) (237) (342)
Taxes paid - - - - - - (4) 4 -
Net cash
inflow/
(outflow)
from
operating
activities 1,814 287 2,101 (4) (102) (106) (109) (233) (342)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Cash flows
from
investing
activities
Purchases
of
development
wind assets - - - - - - (49) - (49)
Purchases
of
investments (235) (38) (273) (91) (1,873) (1,964) (70) (5,298) (5,368)
Proceeds
from
investments 1,920 1,200 3,120 - 300 300 40 1,075 1,115
Net cash
inflow/
(outflow)
from
investing
activities 1,685 1,162 2,847 (91) (1,573) (1,664) (79) (4,223) (4,302)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Cash flows
from
financing
activities
Ordinary
shares
issued 26 - 26 - - - - - -
Ordinary
share
issue costs (18) - (18) - - - - - -
Dividends
paid (562) (113) (675) (245) - (245) (245) (113) (358)
Loan
Financing (180) - (180) 35 - 35 391 - 391
Payments to
meet Merger
costs - - - (13) - (13) - - -
Net cash
(outflow)/
inflow from
financing
activities (734) (113) (847) (223) - (223) 146 (113) 33
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Net
increase/
(decrease)
in cash and
cash
equivalents 2,765 1,336 4,101 (318) (1,675) (1,993) (42) (4,569) (4,611)
Cash and
cash
equivalents
at the
beginning
of the
period 622 1,685 2,307 664 6,254 6,918 664 6,254 6,918
Cash and
cash
equivalents
at the end
of the
period 3,387 3,021 6,408 346 4,579 4,925 622 1,685 2,307
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
The accompanying notes on form an integral part of these
financial statements.
Company Statement of Cash Flows
for the six month period ended 31 August 2012 (unaudited)
Six months Six months Year ended
ended 31 August ended 31 August 29 February
2012 2011 2012
(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 1,897 479 2,376 488 70 558 683 113 796
Deposit
interest
received 4 6 10 1 14 15 2 25 27
Investment
management
fees paid - (132) (132) (252) (131) (383) (252) (259) (511)
Other cash
payments (190) (66) (256) (193) (55) (248) (408) (116) (524)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Net cash from/
(used in)
operations 1,711 287 1,998 44 (102) (58) 25 (237) (212)
Taxes paid - - - - - - (4) 4 -
Net cash
inflow/
(outflow)
from
operating
activities 1,711 287 1,998 44 (102) (58) 21 (233) (212)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Cash flows
from investing
activities
Purchases of
investments (241) (38) (279) (91) (1,873) (1,964) (165) (5,298) (5,463)
Proceeds from
investments 1,920 1,200 3,120 - 300 300 40 1,075 1,115
Net cash
inflow/
(outflow from
investing
activities 1,679 1,162 2,841 (91) (1,573) (1,664) (125) (4,223) (4,348)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Cash flows
from financing
activities
Ordinary
shares
issued 26 - 26 - - - - - -
Ordinary share
issue costs (18) - (18) - - - - - -
Dividends paid (562) (113) (675) (245) - (245) (245) (113) (358)
Loan Financing (183) - (183) - - - 327 - 327
Payments to
meet Merger
costs - - - (13) - (13) - - -
Net cash
(outflow)/
inflow from
financing
activities (737) (113) (850) (258) - (258) 82 (113) (31)
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
Net increase/
(decrease)
in cash and
cash
equivalents 2,653 1,336 3,989 (305) (1,675) (1,980) (22) (4,569) (4,591)
Cash and cash
equivalents
at the
beginning
of the period 608 1,685 2,293 630 6,254 6,884 630 6,254 6,884
Cash and cash
equivalents
at the end
of the period 3,261 3,021 6,282 325 4,579 4,904 608 1,685 2,293
--------------- --------------- ------------------ --------------- --------------- --------------- --------------- --------------- ---------------
The accompanying notes on form an integral part of these
financial statements.
Notes to the Financial Statements
for the six month period ended 31 August 2012 (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 29 February
2012 and those that will be adopted in the financial statements for
the year ending 29 February 2013, except for a change in the
application of the investment valuation policy. In prior periods,
the Company had applied its valuation policy in a manner such that
investments in companies operating renewable energy assets were
valued at cost until a deemed satisfactory period of operations of
between six and 18 months had passed. Given that the projects of
such investee companies use well-established technology and benefit
from manufacturer and contractor warranties, manufacturer
performance guarantees and insurance, the Investment Manager and
the Board believe that the satisfactory operation of such projects
should be determined based on the specific circumstances and that
the previous application of the policy whereby an arbitrary waiting
period was applied of six to 18 months was unnecessarily prudent.
The change in the implementation of the valuation policy has not
had any impact on the valuations of the investments as at 29
February 2012 because there were no investments which were held
using the "price of recent investment" methodology, reviewed for
impairment, at that date which would have otherwise been valued
using the "discounted cash flows from underlying business"
methodology. The impact of the change in application of the policy
has resulted in an increase in total comprehensive income and net
assets of GBP2,394,000 in the current period.
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
29 February 2012 have been filed with the Registrar of Companies.
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
shareholdings in its subsidiaries are 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 derecognised 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 is 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
the original terms of 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
Loans, 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 reserves were created by approval of the High Court
to cancel the Company's share premium accounts in respect of shares
issued. The special reserves may be used to fund buy-backs of
shares and pay dividends 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 are valued using the "discounted future cash flows from
the underlying business" methodology, excluding interest accrued in
the accounts to date, unless uncertainties exist which would make
the "price of recent investment" methodology, reviewed for
impairment, more appropriate. Generally, renewable energy
generating plant will be considered to be operating when it has
been taken-over by the investee company, although specific
circumstances could cause a plant to be considered operating
satisfactorily earlier than formal take-over by the investee
company. 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. The estimates and
assumptions adopted in these financial statements are consistent
with those adopted in the financial statements for the year ended
29 February 2012 except for the change in the application of the
valuation policy as referred to above.
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
2012 (unaudited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Income from investments
Loan stock interest 404 179 583
Dividends 351 - 351
Other investment
income 162 90 1,186
------------------------- -------------------------- ------------------------
917 269 1,186
Other income
Bank deposit interest 4 6 10
921 275 1,196
========================= ========================== ========================
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
Year ended 29 February 2012
(audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Income from investments
Loan stock interest 790 418 1,208
Dividends 55 - 55
------------------------- -------------------------- ------------------------
845 418 1,263
Other income
UK treasury bill
income - 6 6
Bank deposit interest 2 18 20
847 442 1,289
========================= ========================== ========================
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 agreed to waive investment management fees
payable by the Company's ordinary share fund in the amount of
GBP530,000 from 12 September 2011 until the end of the period over
which such amount would have otherwise accrued. Therefore the
amount paid to Temporis Capital LLP during the six months ended 31
August 2012 in respect of net asset value attributable to ordinary
shareholders was nil when it would otherwise have been GBP184,000
had the investment management fees not been waived (six months
ended 31 August 2011: GBP252,000; year ended 29 February 2012:
GBP252,000). The amount paid to the Investment Manager for the six
months ended 31 August 2012 in respect of the net assets
attributable to the "C" shareholders was GBP132,000 (six months
ended 31 August 2011: GBP131,000; year ended 29 February 2012:
GBP259,000).
At 31 August 2012 the Company's ordinary share fund had a loan
of GBP144,000 outstanding to Temporis Capital LLP, having repaid
GBP183,000 during the six month period. Further details are set out
in note 14.
4. Other expenses
Group
Six months ended 31 August
2012 (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 13 6 19
- Audit of subsidiaries'
Annual Financial Statements 5 - 5
- Other services
relating to taxation 3 2 5
- Other services
pursuant to legislation 6 3 9
Tender costs 34 - 34
Legal and professional
fees 16 6 22
Other expenses 53 26 79
----------------------- ------------------------ -----------------------
152 53 205
Capital expenses:
Development costs 636 - 636
Investment costs 34 - 34
822 53 875
======================= ======================== =======================
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
- Audit of subsidiaries'
Annual Financial Statements 17 - 17
- Other services
relating to taxation 1 - 1
- Other services
pursuant to legislation 6 3 9
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
Year ended 29 February
2012 (audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
Revenue expenses:
Directors' remuneration 45 20 65
Fees payable to the
Company's Auditor
for:
- Audit of the Company's
Annual Financial Statements 18 8 26
- Audit of the accounts
of associates of the
Company pursuant to
legislation 13 - 13
- Other services
relating to taxation 2 1 3
- Other services
pursuant to legislation 8 3 11
Legal and professional
fees 37 10 47
Other expenses 130 52 182
----------------------- ------------------------ ----------------------
253 94 347
Capital expenses:
Development funding
costs 279 - 279
Impairment of development
wind assets 342 - 342
Investment costs 54 65 119
928 159 1,087
======================= ======================== ======================
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.
Development costs of GBP636,000 represent expenses of Redeven
Energy Limited which had previously been treated as other
receivables as it was anticipated these would be recharged to the
development companies established to develop the wind farms for
which Redeven Energy Limited has achieved planning consent. It is
now considered more appropriate to treat these expenses as cost of
sales as it is intended that Redeven Energy Limited will charge a
development fee to the companies developing the wind farms.
5. Directors' remuneration
Group
Six months ended 31 August
2012 (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
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
Year ended 29 February
2012 (audited)
Ordinary
Shares "C" Shares Total
GBP000 GBP000 GBP000
A Moore 17 8 25
P Thomas 14 6 20
C Wood 14 6 20
Aggregate emoluments 45 20 65
======================= ======================= ======================
6. Taxation
The half-yearly tax charge for the six months ended 31 August is
GBP110,000 in the ordinary share fund (six months ended 31 August
2011: tax charge GBP18,000; year ended 29 February 2012: GBP88,000)
and GBP20,000 in the "C" share fund (six months ended 31 August
2011: tax credit GBP18,000; year ended 29 February 2012:
GBP35,000). The charges have been accrued assuming an effective tax
rate of 24%, however dividends and capital gains are not subject to
tax, resulting in a lower effective tax rate than the standard
applicable rate in the UK.
7. Basic and diluted return per share
Group
For the six months ended Ordinary
31 August 2012 (unaudited) Shares "C" Shares
Revenue return for the period p per share 2.70 1.26
Based on:
Revenue return for the period GBP'000 663 143
Weighted average number number
of shares in issue of shares 24,440,507 11,329,107
Capital gain for the period p per share 9.90 12.28
Based on:
Capital gain for the period GBP'000 2,420 1,390
Weighted average number number
of shares in issue of shares 24,440,507 11,329,107
Net profit for the period p per share 12.60 13.54
Based on:
Net gain for the period GBP'000 3,083 1,533
Weighted average number number
of shares in issue of shares 24,440,507 11,329,107
Group
For the six months ended Ordinary
31 August 2011 (unaudited) Shares "C" Shares
Revenue return for the period p per share 1.08 0.89
Based on:
Revenue return for the period GBP'000 264 101
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
Capital loss for the period p per share (16.44) (0.52)
Based on:
Capital loss for the period GBP'000 (4,034) (59)
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
Net profit/(loss) for the
period p per share (15.36) 0.37
Based on:
Net gain/(loss) for the
period GBP'000 (3,770) 42
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
Group
For the year ended 29 February Ordinary
2012 (audited) Shares "C" Shares
Revenue return for the year p per share 1.66 1.99
Based on:
Revenue return for the year GBP'000 404 226
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
Capital gain/(loss) for
the year p per share (17.81) (1.48)
Based on:
Capital gain/(loss) for
the year GBP'000 (4,371) (167)
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
Net profit/(loss) for the
year p per share (16.15) 0.51
Based on:
Net gain/(loss) for the
year GBP'000 (3,967) 59
Weighted average number number
of shares in issue of shares 24,537,560 11,329,107
There were no differences between basic and diluted return per
ordinary 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
2012 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 8,272 18,514 4,900 3,283 8,183 15,142 11,555 26,697
Opening
realised
losses (5,904) (1,410) (7,314) - - - (5,904) (1,410) (7,314)
Opening
unrealised
gains/
(losses) 1,796 (397) 1,399 - - - 1,796 (397) 1,399
Opening fair
value 6,134 6,465 12,599 4,900 3,283 8,183 11,034 9,748 20,782
During the
period
Purchases at
cost 235 - 235 20 17 37 255 17 272
Disposal
proceeds - (1,920) (1,920) - (1,200) (1,200) - (3,120) (3,120)
Realised
losses (21) (15) (36) - - - (21) (15) (36)
Unrealised
gains 2,632 240 2,872 1,220 243 1,463 3,852 483 4,335
Closing fair
value 8,980 4,770 13,750 6,140 2,343 8,483 15,120 7,113 22,233
---------------- --------------- ------------- ---------------- --------------- -------------- -------------- -------------- -------------
Closing
position
Closing cost 8,225 5,952 14,177 4,920 2,100 7,020 13,145 8,052 21,197
Closing
realised
losses (3,905) (1,559) (5,464) - - - (3,905) (1,559) (5,464)
Closing
unrealised
gains 4,660 377 5,037 1,220 243 1,463 5,880 620 6,500
Closing fair
value 8,980 4,770 13,750 6,140 2,343 8,483 15,120 7,113 22,233
================ =============== ============= ================ =============== ============== ============== ============== =============
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
realised
losses (266) (2) (268) - - - (266) (2) (268)
Opening
unrealised
(losses)/
gains (2,233) 391 (1,842) - - - (2,233) 391 (1,842)
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)
Realised
losses (574) (2) (576) - - - (574) (2) (576)
Unrealised
losses (1,429) (1,697) (3,126) - - - (1,429) (1,697) (3,126)
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
realised
losses (840) (4) (844) - - - (840) (4) (844)
Closing
unrealised
losses (3,662) (1,306) (4,968) - - - (3,662) (1,306) (4,968)
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
Year ended 28 Loan Loan Loan
February 2012 Shares stock Total Shares stock Total Shares stock Total
(audited) 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
realised
losses (266) (2) (268) - - - (266) (2) (268)
Opening
unrealised
(losses)/gains (2,233) 391 (1,842) - - - (2,233) 391 (1,842)
Opening fair
value 7,743 8,631 16,374 900 3,060 3,960 8,643 11,691 20,334
During the year
Purchases at
cost - 70 70 4,000 1,298 5,298 4,000 1,368 5,368
Disposal
proceeds - (40) (40) - (1,075) (1,075) - (1,115) (1,115)
Realised losses (2,546) (1,703) (4,249) - - - (2,546) (1,703) (4,249)
Unrealised
gains/
(losses) 937 (493) 444 - - - 937 (493) 444
Closing fair
value 6,134 6,465 12,599 4,900 3,283 8,183 11,034 9,748 20,782
--------------- ------------- --------------- -------------- -------------- ------------
Closing
position
Closing cost 10,242 8,272 18,514 4,900 3,283 8,183 15,142 11,555 26,697
Closing
realised
gains/
(losses) 1,796 (397) 1,399 - - - 1,796 (397) 1,399
Closing
unrealised
losses (5,904) (1,410) (7,314) - - - (5,904) (1,410) (7,314)
Closing fair
value 6,134 6,465 12,599 4,900 3,283 8,183 11,034 9,748 20,782
=============== ============= =============== ============== ============== ============
The shares held by the Company represent equity holdings in
unquoted UK companies and equity based derivatives. The Investment
Manager's Report 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
has obtained 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 29 February
2012 2011 2012
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 2012 Shares Shareholder loans Total
(unaudited) GBP000 GBP000 GBP000
Opening position
Opening cost 174 653 827
Opening realised losses (174) (204) (378)
Opening fair value - 449 449
During the period
Purchases at cost - 6 6
Closing fair value - 455 455
Closing position
Closing cost 174 659 833
Closing realised losses (174) (204) (378)
Closing fair value - 455 455
Ordinary Shares
Six months ended 31 August 2011 Shares Shareholder loans Total
(unaudited) GBP000 GBP000 GBP000
Opening position
Opening cost and fair value 174 558 732
During the period
Purchases at cost - 21 21
Unrealised 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
Year ended 29 February 2012 Shares Shareholder loans Total
(audited) GBP000 GBP000 GBP000
Opening position
Opening cost and fair value 174 558 732
During the year
Purchases at cost - 95 95
Realised loss (174) (204) (378)
Closing fair value - 449 449
Closing position
Closing cost 174 653 827
Closing realised losses (174) (204) (378)
Closing fair value - 449 449
10. Development wind assets
The Group's development wind assets comprised capitalised costs
incurred in the pre-planning phase of the development of wind farm
schemes. The development wind assets were held by the Company's
subsidiary undertakings which are held by the ordinary share fund
only. The carrying value of the Group's development wind assets was
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
projects directly. The development wind assets held by Spurlens Rig
Wind Limited were impaired during the year ended 29 February 2012
as the planning application submitted by this company was
rejected.
Six months ended 31 August 2012 Ordinary Shares
(unaudited) GBP000
Opening and closing positions
Gross carrying amount 342
Accumulated impairment (342)
Opening and closing value -
Six months ended 31 August 2011 Ordinary Shares
(unaudited) GBP000
Opening position
Gross carrying amount 1,096
Opening value 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
Year ended 29 February 2012 Ordinary Shares
(audited) GBP000
Opening position
Gross carrying amount 1,096
Opening value 1,096
Reclassification to trade and other receivables (803)
Opening value (reclassified) 293
During the year
Purchases at cost 49
Impairment charges (342)
Closing value -
Closing position
Gross carrying amount 342
Accumulated impairment (342)
Closing value -
11. Trade and other receivables
Group
As at 31 August 2012 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 14 - 14
Other receivables - 90 90
14 90 104
Current assets
Accrued interest income 231 230 461
Other receivables 2 15 17
Corporation tax - 15 15
Prepayments 16 7 23
249 267 516
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 29 February 2012 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 37 47 84
37 47 84
Current assets
Accrued interest income 1,187 483 1,670
Other receivables 760 8 768
Corporation tax - 34 34
Prepayments 67 6 73
2,014 531 2,545
As at 31 August 2012 the Group had receivables of GBP104,000
which were due after more than one year (31 August 2011:
GBP1,536,000; 29 February 2012: GBP84,000). The Directors consider
that the carrying amount of trade and other receivables
approximates to their fair value. During the six month period ended
31 August 2012 a substantial amount of accrued interest income was
paid to the Group which contributed to the reduction in the balance
receivable. Other receivables were reduced over the six month
period because development costs of GBP636,000 representing
expenses of the Company's subsidiary, Redeven Energy Limited, were
expensed through the Statement of Comprehensive Income (refer to
note 4 for further details).
Company
As at 31 August 2012 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 14 - 14
Other receivables - 90 90
14 90 104
Current assets
Accrued interest income 245 230 475
Other receivables 1 15 16
Corporation tax - 37 37
Prepayments 16 7 23
262 289 551
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 29 February 2012 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Non-current assets
Accrued interest income 37 47 84
37 47 84
Current assets
Accrued interest income 1,187 483 1,670
Other receivables 4 8 12
Corporation tax - 34 34
Prepayments 67 6 73
1,258 531 1,789
As at 31 August 2012 the Company had receivables of GBP104,000
due after more than one year representing accrued interest and
facility fees from a short-term loan (31 August 2011: GBP914,000;
29 February 2012: GBP84,000). The Directors consider that the
carrying amount of trade and other receivables approximates to
their fair value. During the six month period ended 31 August 2012
a substantial amount of accrued interest income was paid to the
Group which contributed to the reduction in the balance
receivable.
12. Cash and cash equivalents
The total cash and cash equivalents held in the Company's
ordinary share fund was GBP3,261,000 at 31 August 2012 (31 August
2011: GBP325,000; 29 February 2012: GBP608,000). The increase, over
the period, in cash and cash equivalents held by the ordinary share
fund was due to the receipt of proceeds from investment,
particularly a repayment of loan principal of GBP1,800,000 made by
Broadview Energy Limited and investment income received offset by
payments of dividends, operating expenses, repayment loan financing
and purchase of 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 2012 the cash held by the subsidiaries
totalled GBP126,000 (31 August 2011: GBP21,000; 29 February 2012:
GBP14,000).
The total cash and cash equivalents held in the Company's "C"
share fund was GBP3,021,000 at 31 August 2012 (31 August 2011:
GBP4,579,000; 29 February 2012: GBP1,685,000). The increase in cash
and cash equivalents during the period was due to the receipt of
investment income and proceeds from investments, offset by payment
of investment management fees, expenses and dividends and purchase
of investments.
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 2012 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 197 - 197
Trade payables 16 3 19
Other payables 9 8 17
Accruals 95 16 111
317 27 344
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 29 February 2012 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 87 - 87
Trade payables 14 - 14
Other payables 41 7 48
Accruals 89 25 114
231 32 263
Company
As at 31 August 2012 (unaudited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 197 - 197
Trade payables - 3 3
Other payables 9 8 17
Accruals 86 16 102
292 27 319
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 29 February 2012 (audited)
Ordinary Shares "C" Shares Total
GBP000 GBP000 GBP000
Corporation tax 87 - 87
Trade payables 14 - 14
Other payables 7 7 14
Accruals 89 25 114
197 32 229
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 2012 (unaudited)
Ordinary Shares
GBP000
Shareholder loans 439
Loan from Temporis Capital LLP 144
583
Group
As at 31 August 2011 (unaudited)
Ordinary Shares
GBP000
Shareholder loans 386
386
Group
As at 29 February 2012 (audited)
Ordinary Shares
GBP000
Shareholder loans 436
Loan from Temporis Capital LLP 327
763
The Group's financial liabilities include shareholder loans of
GBP393,000 and GBP46,000 provided by Ventus VCT plc to the
Company's subsidiaries, Redeven Energy Limited and Spurlens Rig
Wind Limited respectively.
As at 31 August 2012 the Company's ordinary share fund had a
loan outstanding in the amount of GBP144,000 to Temporis Capital
LLP, the Investment Manager. This loan is interest-free, to be
repaid by the Company's ordinary share fund over the period of time
that the waived investment management fees referred to in note 3
would otherwise have been charged.
The Directors consider that the carrying amounts of the
financial liabilities approximate to their fair value.
Company
As at 31 August 2012 (unaudited)
Ordinary Shares
GBP000
Loan from Temporis Capital LLP 144
144
Company
As at 31 August 2011 (unaudited)
Ordinary Shares
GBP000
Loan from Temporis Capital LLP -
-
Company
As at 29 February 2012 (audited)
Ordinary Shares
GBP000
Loan from Temporis Capital LLP 327
327
The loan outstanding to Temporis Capital LLP, the Investment
Manager, is explained above.
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 of 25p Number of shares Number of shares
Authorised each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2012
(audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
Shares
authorised
during the
period 20,000,000 5,000 - - 20,000,000 5,000
At 31 August
2012
(unaudited) 50,000,000 12,500 20,000,000 5,000 70,000,000 17,500
Ordinary Shares "C" Shares Total
Allotted, called Number of
up and fully shares of 25p Number of shares Number of shares
paid each GBP000 of 25p each GBP000 of 25p each GBP000
At 1 March 2012
(audited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
Allotted, called
up and fully
paid during the
period 8,274,552 2,068 - - 8,274,552 2,068
Purchased and
cancelled
during the
period (8,389,457) (2,097) - - (8,389,457) (2,097)
At 31 August
2012
(unaudited) 24,422,655 6,105 11,329,107 2,832 35,751,762 8,937
Ordinary Shares "C" Shares Total
Number of
shares of 25p Number of shares Number of shares
Authorised 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 Number of
up and fully shares of 25p Number of shares Number of shares
paid 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 2011
(audited) 30,000,000 7,500 20,000,000 5,000 50,000,000 12,500
At 29 February
2012 (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 2011
(audited) 24,537,560 6,134 11,329,107 2,832 35,866,667 8,966
At 29 February
2012 (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 69.2p as at
31 August 2012 (31 August 2011: 59.6p; 29 February 2012: 58.8p)
is based on net assets attributable to equity holders of
GBP16,899,000 (31 August 2011: GBP14,616,000;
29 February 2012: GBP14,419,000) divided by 24,422,655 ordinary
shares in issue at that date (31 August 2011: 24,537,560 ordinary
shares; 29 February 2012: 24,537,560 ordinary shares). The "C"
share fund did not hold investments in subsidiaries at 31 August
2012, (31 August 2011 and 29 February 2012: GBPnil).
The Company's net asset value per ordinary share of 70.8p is
based on net assets attributable to the ordinary shareholders of
GBP17,292,000 (31 August 2011: GBP14,624,000; 29 February 2012:
GBP14,427,000) and the number of shares in issue as at 31 August
2012 of 24,422,655 (31 August 2011: 24,537,560 ordinary shares; 29
February 2012: 24,537,560 ordinary shares).
The net asset value per "C" share of 104.5p at 31 August 2012
(31 August 2011: 92.8p;
29 February 2012: 91.9p) is based on net assets attributable to
the "C" shareholders of GBP11,834,000 (31 August 2011:
GBP10,510,000; 29 February 2012: GBP10,414,000) and the number of
shares in issue as at 31 August 2012 of 11,329,107 (31 August 2011:
11,329,107; 28 February 2012: 11,329,107).
17. Dividends
A final dividend for the year ended 29 February 2012 of 2.30p
per ordinary share was paid to ordinary shareholders on 8 August
2012.
An interim dividend of 1.75p per ordinary share has been
declared for the six month period ended 31 August 2012 which will
be paid on 16 January 2013 to all ordinary shareholders on the
register as at close of business on 14 December 2012.
A final dividend for the year ended 29 February 2012 of 1.00p
per "C" share was paid to "C" shareholders on 8 August 2012.
An interim dividend of 1.20p per "C" share has been declared for
the six month period ended 31 August 2012 which will be paid on 16
January 2013 to all "C" shareholders on the register as at close of
business on 14 December 2012.
18. Events subsequent to period end
On 25 October 2012, the Company committed to invest a further
GBP750,000 in ordinary shares of Eye Wind Power Limited and to
provide a loan facility of GBP1,050,000.
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 29 February 2012, except for a
subsequent commitment to invest in Eye Wind Power Limited which is
disclosed in note 18.
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, which may occur at any time
up to the end of a defects notification period which extends for an
eighteen month period after construction. 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.
20. Related party transactions
The investment management fees paid to the Investment Manager
during the six months ended 31 August 2012 are set out in note 3.
The Investment Manager has provided a loan to the Company which is
detailed in note 14.
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 2012 are summarised
below.
Company
As at 31 August 2012 (unaudited)
Ordinary Shares "C" shares Total
GBP000 GBP000 GBP000
Balances as at 31 August 2012 (unaudited)
Investments - shares 7,652 6,140 13,792
Investments - loan stock 4,880 1,934 6,814
Accrued interest income 228 140 368
Other receivables - 90 90
Transactions in the six months ended 31 August 2012 (unaudited)
Loan stock interest income 268 110 378
Dividend income 335 - 335
Other income - 90 90
Company
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 6,772
Investments - loan stock 5,158 1,673 6,831
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
Company
As at 29 February 2012 (audited)
Ordinary Shares "C" shares Total
GBP000 GBP000 GBP000
Balances as at 29 February 2012 (audited)
Investments - shares 4,827 4,900 9,727
Investments - loan stock 4,768 1,673 6,441
Accrued interest income 521 301 822
Transactions in the year ended 29 February 2012 (audited)
Loan stock interest income 516 177 693
Dividend income 48 - 48
There are no differences between the Group and Company related
party transactions with the exception of investments in
subsidiaries included in the tables above as investments in shares
and loan stock totalling GBP455,000 relating to Redeven Energy
Limited and Spurlens Rig Wind Limited (31 August 2011: GBP586,000;
29 February 2012: GBP449,000) which are consolidated into the Group
accounts, of which GBPnil was attributable to the value of shares
(31 August 2011: GBP174,000; 29 February 2012: GBPnil) and
GBP455,000 attributable to the value of shareholder loans (31
August 2011: GBP412,000; 29 February 2012: GBP449,000).
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
IR LIFVTILLIVIF
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