TIDMVEN3
RNS Number : 9371S
Ventus 3 VCT PLC
28 May 2009
Ventus 3 VCT plc
Annual Report & Financial Statements
for the year ended 28 February 2009
Ventus 3 VCT plc invests in companies that develop, construct and operate
renewable energy projects.
Registered No: 5667211
CHAIRMAN'S STATEMENT
I am pleased to present the Annual Report and Financial Statements of Ventus 3
VCT plc (the "Company") for the year ended 28 February 2009.
Net Asset Value, Results and Dividends
At the year end, the net asset value of the Company stood at GBP10,552,995 or
94.5p per share. Revenue profit attributable to shareholders for the year was
GBP375,516 or 3.36p per share. The capital gain attributable to shareholders for
the year was GBP17,841 or 0.16p per share, resulting in a total return to
shareholders for the year of GBP393,357 or 3.52p per share.
The value of investments held at 28 February 2009 was GBP8,099,811 compared to
GBP1,312,822 at 29 February 2008. The Investment Manager's Report gives details
of investments made during the year, together with information about the
valuation of all investee company holdings within the portfolio.
The revenue income generated during the year was interest earned on mezzanine
loan stock, cash deposits and UK treasury bills and dividend income. Total
revenue income for the year to 28 February 2009 was GBP614,699 compared to
GBP577,986 for the year to 29 February 2008. The increase in revenue income was
attributable to an increase in dividend income and interest income from
mezzanine loans. There was a decrease in interest earned from UK treasury bills,
as cash was deployed to acquire share capital in and to make mezzanine loans to
investee companies.
The Company paid an interim dividend of 1.50p per share on 14 January 2009 and
proposes to declare a dividend for the second half-year of 1.50p per share,
resulting in a total annual dividend of 3.00p per share. The dividend will be
paid on 14 July 2009 to all shareholders on the register as at the close of
business on 12 June 2009.
Investments
The Company's Investment Manager, Climate Change Capital Limited, continues to
be actively engaged in managing the existing investee company portfolio and in
identifying and negotiating potential investment opportunities to invest the
remaining capital from the initial offer. The investments made and dividends
paid constitute the important events of the year.
As at the date of this report, the Company holds investments in 22 companies
totalling GBP8.2 million which will be held as long term investments. The
Company has operated throughout the period in compliance with HM Revenue &
Customs VCT regulations.
The Investment Manager's Report provides details of the investments held as at
28 February 2009 and as at the date of this report. All investments are
structured so as to be treated as qualifying holdings for the purposes of VCT
regulations unless otherwise stated.
VCT Qualifying Status
The Company retains PricewaterhouseCoopers LLP to review its compliance with VCT
regulations. The Directors are satisfied that the Company continues to fulfil
the conditions for maintaining VCT status.
Future Communications
In accordance with the Company's commitment to environmental sustainability and
to minimise costs wherever appropriate, the Directors have decided that this
will be the last set of financial statements that will be posted to all
shareholders. The financial statements will continue to be made available
through regulated news service providers and on the Company website at
www.ventusvct.com. However any shareholder who wishes to elect to continue
receiving financial statements by post can do so by completing and returning the
confirmation notice enclosed with this report.
Outlook
The Company has substantially invested the initial capital raised and dividend
payments to shareholders are stepping up progressively towards the long term
dividend objective, which is to pay an average annual dividend of 8p per
ordinary share. The Directors consider that the Company holds a well diversified
portfolio of investments that are expected to yield the long term stable income
streams to support the dividend objective, once all of the portfolio companies'
assets are fully operational.
The Company's share price has performed well against a backdrop of volatile
market conditions and there is evidence of strong demand for the Company's
shares in the secondary market. The strong share price performance was
recognised by the Thomson Reuters fund data company Lipper who ranked the
Company in its top ten performing investment funds for the 2008 calendar year in
its Lipper Global UK Equity Small and Midcap index.
The UK renewable energy market continues to see strong growth and the Directors
believe that the Company occupies a very attractive niche supporting small to
medium sized companies in time of great financial uncertainty. Going forward the
Company is well positioned to focus on optimising the performance of the
existing investments.
David Pinckney
Chairman
27 May 2009
INVESTMENT MANAGER'S REPORT
Climate Change Capital Limited (the "Investment Manager") is pleased to present
a review of the investment activities of the Company.
Summary of Investments
As at the date of this report, the Company holds investments in 22 companies
with a total investment value of GBP8.2 million.
GBP7.5 million of the Company's investments have been structured so as to be
classified as qualifying holdings for the purposes of the VCT regulations of HM
Revenue & Customs. The Company is in compliance with the requirement to hold no
less than 70% by value of its total investments in qualifying holdings by the
end of its third financial year.
It is the accounting policy of the Company to hold investments at fair value. In
this report, investee companies whose assets have been fully constructed and
have passed an initial satisfactory operational period have been valued using a
discounted cash flow methodology to establish their fair value. The fair values
of the other investee companies are not considered to be materially different
from the historical cost of investment.
The majority of the Company's investments are still at the construction stage
and therefore the amount of operational performance data is limited. Where the
assets are already operational, performance is in line with original
expectations unless stated otherwise.
Based on the structure and status of the investments that have been made to
date, the Investment Manager is confident that the long term dividend objective
of the Company, to pay an average annual dividend of 8p per ordinary share, is
achievable once all of the portfolio companies' assets are fully operational.
The Investment Manager's primary focus over the last year has been on maximising
the value of the existing investments in the portfolio, completing investments
held under exclusivity and ensuring those assets that are under construction are
completed on budget and to schedule.
The following table shows total investments made as at 28 February 2009 and
total investments made as at the date of this report:
Investment Summary
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | | | | | | Investment |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | Investment | Additions | Unrealised | Investment | Investment | value |
| | | | | | | | | & |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | value | in | gains | value | value | commitments |
| | | | | the | in | | | |
| | | | | | the | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | as | year | year | as | as | as |
| | | | at | to | to | at | at | at |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | 29 | 28 | 28 | 28 | 27 | 27 |
| | | | February | February | February | February | May | May |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| | | | 2008 | 2009 | 2009 | 2009 | 2009 | 2009 |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Company name | Details | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Craig Wind Farm | 10 megawatt |Q | 349 | - | 153 | 502 | 502 | 502 |
| Limited | wind farm | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Firefly Energy | Renewable |Q | 200 | - | - | 200 | 200 | 200 |
| Limited | energy | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Achairn Energy | 6 megawatt |Q | 120 | 998 | - | 1,118 | 1,118 | 1,118 |
| Limited | wind farm | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| A7 Lochhead | 6 megawatt |Q | - | 333 | - | 333 | 333 | 333 |
| Limited | wind farm | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Broadview Energy | Wind farm |Q | - | 1,000 | - | 1,000 | 1,000 | 1,000 |
| Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Redimo LFG | 10 megawatt |Q | 500 | 500 | - | 1,000 | 1,000 | 1,000 |
| Limited | Landfill gas | | | | | | | |
| | portfolio | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| PBM Power | Biomass |Q | - | 287 | - | 287 | 287 | 287 |
| Limited | generator | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Spurlens Rig | Wind farm | | 30 | 45 | - | 75 | 75 | 75 |
| Wind Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Olgrinmore | Wind farm | | 24 | 6 | - | 30 | 30 | 30 |
| Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Redeven Energy | Wind farm | | 30 | 60 | - | 90 | 156 | 156 |
| Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Catfield Wind | Wind farm | | 27 | - | - | 27 | 27 | 27 |
| Power Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Potash Wind Farm | Wind farm | | 33 | - | - | 33 | 33 | 33 |
| Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Stalham Wind | Wind farm | | - | 6 | - | 6 | 6 | 6 |
| Power Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Meridian Wind | Wind farm | | - | 18 | - | 18 | 18 | 18 |
| Power Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Witton Wind Farm | Wind farm | | - | - | - | - | 6 | 6 |
| Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Osspower Limited | Hydro-electric | | - | 150 | - | 150 | 150 | 150 |
| | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Small Hydro | Hydro-electric | | - | 58 | - | 58 | 108 | 250 |
| Company Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| RPS Dargan Road | Land fill gas |Q | - | 950 | - | 950 | 950 | 950 |
| Limited | generator | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Sandsfield Heat | Biomass |Q | - | 898 | - | 898 | 898 | 898 |
| & Power Limited | generator | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Twinwoods Heat & | Biomass |Q | - | 1,000 | - | 1,000 | 1,000 | 1,000 |
| Power Limited | generator | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Kettering East | Wind farm |Q | - | 125 | - | 125 | 125 | 250 |
| Energy Limited | development | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| EcoGen Limited | Wind farm |Q | - | 200 | - | 200 | 200 | 200 |
| | developer & | | | | | | | |
| | consultancy | | | | | | | |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Total | | | 1,313 | 6,634 | 153 | 8,100 | 8,222 | 8,489 |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
| Q - Investment complies with HM Revenue & Customs VCT regulations (qualifying |
| investment) |
+------------------+----------------+--+------------+-----------+------------+------------+------------+-------------+
Craig Wind Farm Limited
The Company holds an investment valued at GBP501,977 in Craig Wind Farm Limited,
a company that operates a ten megawatt wind farm in the Scottish Borders. The
site became operational in October 2007.
Performance over the first full year of operation was below budget, primarily
due to a series of technical failures with the wind turbine generators. Craig
Wind Farm Limited was able to claim against the availability warranty from the
turbine manufacturer for a substantial part of the lost revenue. The main causes
for the technical failures appear to have been addressed by the turbine
manufacturer and in the early months of the second operational year there has
been an improvement in the technical availability at the site. The Manager is
keeping the situation under close review in conjunction with the other
shareholders and Craig Wind Farm Limited's technical consultants.
The Company owns 6.25% of the ordinary shares in Craig Wind Farm Limited and has
also provided a GBP169,000 mezzanine loan facility.
The first mezzanine loan interest payment was made in May 2009 in the sum of
GBP13,732. The first dividend distributions are expected in the second half of
2010.
Firefly Energy Limited
The Company holds an investment of GBP200,000 in Firefly Energy Limited by way
of a GBP100,000 subscription for 25% of the ordinary share capital and a
GBP100,000 shareholder loan.
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
final six megawatts of capacity became operational in May 2009 and therefore all
five wind farm sites are now generating revenues for the company.
Firefly Energy Limited has also entered into contracts with three other
renewable energy operating companies to provide power purchase agreement
administration services. It is expected that further contracts of this nature
will be secured, providing an ancillary income stream to the business alongside
the income from the five main long term power purchase agreements.
Achairn Energy Limited
Achairn Energy Limited is a company operating a six megawatt wind farm in
Caithness, Scotland.
Construction works at the site began in August 2008 and the wind farm became
operational on schedule in May 2009.
The Company has invested GBP498,666 to acquire 20.2% of the ordinary share
capital in Achairn Energy Limited and has provided a further GBP619,565 by way
of a mezzanine loan facility.
As the wind farm assets have only just started operating, the valuation of this
investment is not considered to be materially different from the historic cost.
A7 Lochhead Limited
A7 Lochhead Limited is a company developing a six megawatt wind farm in
Lanarkshire, Scotland.
Construction on the site began in October 2008 and the wind farm is expected to
be operational on schedule in June 2009.
The Company has invested GBP273,102 to acquire 10% of the ordinary share capital
in A7 Lochhead Limited and has provided a further GBP60,000 by way of a
mezzanine loan facility.
As the wind farm assets have not yet started operating, the valuation of this
investment is not considered to be materially different from the historic cost.
Broadview Energy Limited
The Company holds an investment of GBP1,000,000 in Broadview Energy Limited by
way of a GBP100,000 subscription for ordinary share capital and a GBP900,000
shareholder loan. Broadview Energy Limited is an established wind farm
development company and operator of small wind sites. The share investment
represents a holding of approximately 1.16% in the ordinary shares of Broadview
Energy Limited.
Broadview Energy Limited holds planning consent for one wind farm, a three
turbine scheme in Scotland, and is in the process of awarding contracts to
construct the project. The shareholder loan facility has been provided to
finance the construction costs of this scheme.
Planning applications for three further sites have been submitted with decisions
expected later
in 2009.
Broadview Energy Limited is also working on a range of other wind farm
developments and planning applications for further sites are expected to be
submitted during 2009.
Redimo LFG Limited
The Company has invested a total of GBP1,000,000 for 25% of the ordinary share
capital of Redimo LFG Limited. Redimo LFG Limited owns and operates a portfolio
of generating stations which use landfill gas to produce electricity for export
onto the grid. Generating electricity from methane gas created by landfill
operations is one of the most established sources of renewable energy in the UK.
As at the date of the last Half-yearly Report, the Company had invested
GBP500,000 and committed to invest a further GBP250,000 before the end of 2008
under the terms of the investment structure. This committed investment was made
in December 2008 and in February 2009 the Company agreed to invest a further
GBP250,000 for shares to meet the costs of installing additional generating
capacity at the largest site in the portfolio. The Company continues to own 25%
of the issued ordinary share capital as other shareholders have made investments
pro-rata.
The total operational capacity of the portfolio is now ten megawatts. Each of
the sites in the portfolio is fully operational. Given the recent expansion in
capacity and the need for the largest site in the portfolio to demonstrate a
suitable period of generation at the new increased installed capacity, the
Company has determined that the fair value of the investment is not materially
different to historic cost.
The Company received a dividend of GBP175,000 from Redimo LFG Limited in
February 2009.
PBM Power Limited
The Company has invested GBP287,000 for 12.5% of the ordinary shares in PBM
Power Limited, a company developing a woodchip biomass electricity generating
plant in Lincolnshire. The plant is fuelled by waste wood and therefore the
scheme will benefit from enhanced support from the Renewable Obligation policy
mechanism.
The initial investment of GBP250,000 was made in April 2008 and a further top up
investment of GBP37,000 to finance technical upgrades to the plant was made in
November 2008.
The plant became operational in April 2009, which was approximately five months
later than planned as a result of delays in provision of the grid connection by
the network operator.
This investment represented the first step by the Company into the emerging
waste wood biomass sector. This renewable energy technology is rapidly becoming
established as the UK Government seeks to encourage other non-wind forms of
energy generation.
Spurlens Rig Wind Limited
The Company has invested GBP75,000 in Spurlens Rig Wind Limited for 30% of the
ordinary share capital. Spurlens Rig Wind Limited has acquired the rights to a
wind farm being developed in Scotland and is currently preparing a planning
application for the site. Permission is being sought to install five wind
turbines and an application is now expected to be submitted in summer 2009.
The planning application was anticipated to have been submitted by the end of
2008 but has been deferred to allow additional time for pre-consultation with
statutory authorities and adjoining landowners.
Once the application has been submitted, a planning decision is anticipated
within six to twelve months. The Company has secured the rights to provide the
finance required to build the wind farm should planning permission be granted.
Olgrinmore Limited
An investment of GBP30,000 has been made for 8% of the ordinary share capital of
Olgrinmore Limited, a company developing a two turbine wind farm in Caithness,
Scotland. A planning application was submitted in January 2009 and is expected
to be determined within six to twelve months. The Company has secured the rights
to provide the finance required to build the wind farm should planning
permission be granted.
The Company originally invested GBP24,000 in Olgrinmore Limited in October 2007
and has invested a further GBP6,000 in February 2009 in order to contribute to
increased planning application costs.
Redeven Energy Limited
An investment of GBP156,000 has been made in Redeven Energy Limited to fund the
development of three wind farm sites in East Anglia. The Company has a 30%
shareholding in this wind farm development company which has entered into a
joint venture agreement with the landlord at the three sites.
Planning applications for the first two sites were submitted in May 2009 and the
third application is expected to be lodged before the end of summer 2009. The
combined capacity of these sites, if consented, would be in excess of 16
megawatts.
The Company has again negotiated the rights to provide the finance required to
build the wind farms should planning permissions be obtained.
Catfield Wind Power Limited, Potash Wind Farm Limited, Stalham Wind Power
Limited, Meridian Wind Power Limited and Witton Wind Farm Limited
The Company has invested a total of GBP90,000 in the ordinary share capital of
the following investee companies: Catfield Wind Power Limited (GBP27,000),
Potash Wind Farm Limited (GBP33,000), Stalham Wind Power Limited (GBP6,000),
Meridian Wind Power Limited (GBP18,000) and Witton Wind Farm Limited (GBP6,000).
In each case, the Company holds 15% of the ordinary shares.
These developments are being undertaken in partnership with Wind Power
Renewables Limited, an East Anglian based wind farm developer specialising in
small to medium sized sites.
These investments have been made under a framework agreement with Wind Power
Renewables Limited with the right for the Company to invest in further sites as
suitable opportunities arise. The Company has also negotiated the rights to
provide the finance to build the wind farms should planning permissions be
obtained.
Osspower Limited
Osspower Limited is a company developing a series of small scale hydro-electric
generating assets in Scotland. The Company has invested GBP150,000 for 25% of
the ordinary shares of Osspower Limited.
The Company has negotiated the rights to arrange the finance to build the
hydro-electric schemes as planning permissions are obtained. The first planning
application was submitted in August 2008 and the applications for the other
elements of the overall scheme are expected to be submitted early summer 2009.
The Small Hydro Company Limited
The Company has invested GBP57,500 for 12.5% of the ordinary share capital of
The Small Hydro Company Limited, a company developing a number of small scale
hydro-electric generating assets. The Company has also provided a committed
shareholder loan facility of up to GBP192,000 which will be drawn to meet the
cost of making planning applications. The first drawing of this facility in the
sum of GBP50,000 was made in March 2009.
RPS Dargan Road Limited
RPS Dargan Road Limited is a company developing a landfill gas generating scheme
on land owned by Belfast City Council.
The project manager and developer is Renewable Power Systems Limited, an
experienced UK landfill gas generation specialist. Renewable Power Systems
Limited own 50% of RPS Dargan Road Limited and will provide long term
operational support services once the plant is operational.
Construction on the site began in 2008 and the plant is expected to be
operational in July 2009.
The Company has invested GBP390,000 to acquire 25% of the ordinary share capital
in RPS Dargan Road Limited and has provided a further GBP560,000 by way of a
mezzanine loan facility.
Sandsfield Heat & Power Limited
Sandsfield Heat & Power Limited is a company developing a biomass generating
scheme in North Yorkshire. The scheme will use waste wood as a fuel to generate
electricity, via a conventional steam turbine, for export to the grid.
The project manager and developer is Bioflame Limited, a company specialising in
energy from waste systems. Bioflame Limited own 30% of Sandsfield Heat & Power
Limited Limited. The plant design and investment structure is based on the
Company's earlier investment alongside Bioflame Limited in PBM Power Limited.
The Company has invested GBP898,000 to acquire 22.5% of the ordinary share
capital in Sandsfield Heat & Power Limited.
Construction on the site commenced early in 2009 and the plant is expected to be
operational in the first half of 2010.
Twinwoods Heat & Power Limited
Twinwoods Heat & Power Limited is a company developing a waste wood biomass
generating scheme in Bedfordshire. The plant design is identical to the
Sandsfield Heat & Power Limited development and is again being developed in
partnership with Bioflame Limited.
The Company has invested GBP1,000,000 to acquire 25% of the ordinary share
capital in Twinwoods Heat & Power Limited.
Construction on the site commenced early in 2009 and the plant is expected to be
operational in the first quarter of 2010.
Kettering East Energy Limited
The Company has made an initial investment of GBP125,000 by way of a loan
facility to Kettering East Energy Limited, a company developing a seven turbine
wind farm project in Northamptonshire. The wind farm holds full planning consent
and the Company has entered in to an exclusivity agreement for a further
investment in a combination of ordinary shares and mezzanine loan facilities.
The Company is currently working with the developer to finalise the procurement
of the wind turbines for the project and the other contracts necessary to
commence construction. Upon satisfactory conclusion of this process the Company
anticipates that it will be in a position to complete the full planned
investment which will be structured as a qualifying holding.
EcoGen Limited
The Company has invested GBP200,000 to acquire 6% of the ordinary share capital
of EcoGen Limited, an experienced wind farm owner and operator and development
consultancy. EcoGen is actively managing the development of a series of new wind
farm sites in the UK.
The investment was completed in February 2009.
Investment Policy
The investment policy of the Company is focused on investing in companies
developing renewable energy projects with installed capacities of two to twelve
megawatts, although larger projects may also be considered. Given the target
investment size, investments will generally be in companies developing projects
initiated by specialist small-scale developers, small industrial sites and
smaller projects which are not attractive to large development companies and
utilities.
Asset Allocation
The Investment Manager seeks to maximise, so far as practicable, the Company's
investment in equity securities and loan stock of companies owning renewable
energy projects with full planning consent, ready for construction of the
project to commence or whose assets are already operational. Up to 10% of net
proceeds raised from the initial share offer 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 for the purpose of meeting operating
expenses and purchasing its ordinary shares in the market. Circumstances may
arise which will require the Company to hold less than 5% of net proceeds in
cash for a limited period of time.
In order to comply with VCT requirements, at least 70% by value of the Company's
investments are required to be comprised of qualifying investments. The Company
typically invests up to GBP2 million in equity and loan stock in each investee
company with no more than GBP1 million invested in an investee company in any
single tax year.
The Company typically owns 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 centred on the UK market due to VCT
requirements. This risk is mitigated by making investments in a wide
geographical spread of projects that are situated throughout the UK. Funds are
also invested with a range of small-scale independent developers so project risk
is not concentrated with only a few developers. The portfolio contains projects
at different stages of the asset lifecycle, ranging from pre-planning, to
construction and then into operation. Investments are made via subscriptions for
new share capital or via loan stock instruments in order to secure a negotiated
level of return from the project. The majority of investments are made in
special purpose companies set up specifically to develop each project and any
bank debt financing will normally be non-recourse to the Company.
The returns from projects are largely dependent on the UK Government's continued
support for renewable energy, primarily under the Renewables Obligation. The
effects of any negative change to this policy are mitigated by the UK
Government's historic practice of grandfathering financial support mechanisms
for existing assets. This risk is further mitigated by the Company typically
negotiating fixed and/or floor price mechanisms into the power purchase
agreements entered into by project companies for the sale of their generated
output.
Gearing
The Company does not intend to borrow funds for investment purposes. However the
Company is exposed to gearing through its investee companies which typically
fund the construction costs of each project through senior bank debt finance.
The Investment Manager is involved in negotiating the terms of this finance to
ensure competitive terms are achieved. The interest rate is typically fixed via
an interest rate swap for the duration of the bank loan so the projects are not
exposed to changes in market interest rates.
Maximum Exposures
In order to gauge the maximum exposure of the Company to various risks, the
following can be used as a guide:
i)Investments in qualifying holdings
70-95% of funds will be invested in qualifying holdings no later than three
years after the date that provisional approval by HM Revenue & Customs of the
Company's status as a VCT becomes effective. The relevant compliance date for
the initial share offer was 1 March 2009. Should the holdings inadvertently fall
below this level after the relevant date then this will be remedied within six
months as permitted by the VCT regulations of HM Revenue & Customs.
ii)Concentration limits
Under VCT regulations no more than 15% of the Company's total assets should
be in a single investee company at the time the investment is made in that
investee company.
iii)Investments in pre-planning projects
A maximum of 10% of the net funds raised from the initial share offer may be
invested in pre-planning projects.
UK Market Outlook
The UK renewable energy market continues to see strong growth in spite of the
turmoil in the wider economy and, in particular, the banking sector. According
to the British Wind Energy Association over 700 megawatts of new onshore wind
capacity became operational in 2008 taking the total installed capacity in the
UK to over 2,700 megawatts. Over 3,000 megawatts of onshore wind capacity holds
planning consent but is not yet built and a further 6,000 megawatts of further
wind capacity is in the planning system. Since the beginning of 2009 over 500
megawatts of capacity has been submitted into the planning system.
The UK renewable industry is not immune to the effects of the credit crisis and
there has been much coverage in recent months of larger energy companies and
investment funds postponing or reassessing the viability of their renewable
energy projects. Whilst such news portrays a less than positive image of the
attractiveness of the industry, the main driver for these companies is the
significant problems associated with raising capital on the scale required to
deliver larger schemes and the expectation amongst most developers that funding
conditions will improve as the capital markets stabilise.
There is evidence that the delays and postponements of larger projects is
leading to downward pressure on wind turbine prices and a shortening of delivery
timescales as manufacturers have excess supply. These are clearly positive
factors in the context of the Company's investment strategy.
The disruption in credit markets has resulted in a significant tightening of
terms and conditions for new lending and increased pricing for such facilities.
Several banks have ceased new lending to the sector and those still active have
set much tighter lending parameters, including a conservative approach to the
maximum amount they will lend to specific schemes. This is resulting in
significant equity investment opportunities for investors that have capital to
deploy. Again this is a positive factor for the Company given its position as
one of the key providers of investment capital to the small to medium sized UK
market. Bank lending remains available to well structured schemes backed by
sponsors with a proven track record and who are prepared to commit an
appropriate amount of their own capital to projects.
April 2009 saw the coming in to effect of a number of amendments to the
Renewables Obligation arising from the Energy Act 2008. The most notable change
is the increased level of support being provided to certain renewable energy
technologies such as offshore wind and biomass. The support tariff for onshore
wind and operational land fill gas projects has been 'grandfathered' at existing
support levels. The Government has also indicated that the Renewables Obligation
mechanism is to be extended out to 2035 from the current 2027. The recent Budget
2009 also announced a further review of the Renewables Obligation intended to
provide additional support in the short term to offshore wind projects.These
factors are intended to create the framework for long term investment in the
sector and the environment for newer technologies to establish themselves and
become cost competitive with established technologies such as onshore wind and
landfill gas generation.
Wholesale energy prices have fallen in recent months as a result of the
reduction in global industrial activity. Medium to long term fixed contract
prices have held value relatively well, primarily driven by the expectation that
there is a structural shortage of generating capacity in the UK and supported in
part by the Renewables Obligation which incentivises energy supply companies to
buy electricity from accredited renewable energy generators.
Climate Change Capital Limited
Investment Manager
27 May 2009
DIRECTORS' REPORT
The Directors present their Annual Report and the audited Financial Statements
for the year ended 28 February 2009.
Business review
Principal activities and status
The Company is an investment company, as defined in Section 833 of the Companies
Act 2006, and has received provisional approval as a Venture Capital Trust from
HM Revenue & Customs. The Directors consider that the Company has conducted its
affairs in a manner to enable it to comply with Section 842AA of the Income and
Corporation Taxes Act 1988. The investment policy of the Company is set out in
the Investment Manager's Report. The Company is a public limited company,
incorporated in England and listed on the London Stock Exchange. The registered
address of the Company is The Registry, 34 Beckenham Road, Beckenham, Kent, BR3
4TU.
The Company has no employees.
The Company's business during the year is reviewed in the Chairman's Statement
and the Investment Manager's report.
Key performance indicators
Results and dividends
+--------------------------------------------------------+--+--+---------+--------+
| For the year ended 28 February 2009 | | | GBP000 | Pence |
| | | | | per |
| | | | | share |
+--------------------------------------------------------+--+--+---------+--------+
| Revenue profit attributable to equity shareholders | | | 376 | 3.36 |
+--------------------------------------------------------+--+--+---------+--------+
| Capital gain attributable to equity shareholders | | | 18 | 0.16 |
+--------------------------------------------------------+--+--+---------+--------+
| Total profit attributable to equity shareholders | | | 394 | 3.52 |
+--------------------------------------------------------+--+--+---------+--------+
| Dividends paid during the year | | | (324) | (2.90) |
+--------------------------------------------------------+--+--+---------+--------+
| Total movement in equity shareholders' funds | | | 70 | 0.62 |
+--------------------------------------------------------+--+--+---------+--------+
| Net asset value | | | 10,553 | 94.5 |
+--------------------------------------------------------+--+--+---------+--------+
The performance of the Company is reviewed in the Investment Manager's Report,
including the Company's compliance with HM Revenue & Customs VCT regulations.
The Company's prospects are considered in the UK Market Outlook section of the
Investment Manager's Report.
Principal risks
Other than the inherent risks associated with investment activities, which are
discussed in the Investment Management Report, the risks described below are
those which the Directors consider to be material:
* Failure to meet and maintain the investment requirements for compliance
with HM Revenue & Customs VCT regulations
The Board mitigates this risk by regularly reviewing investment management
activity and by obtaining pre-approval from HM Revenue & Customs for each
investment.
- Inadequate control environment at service providers
The Board mitigates this risk by only appointing service providers of a high
standing under agreements that set out their responsibilities and by obtaining
assurances from them that all exceptions have been reported to the Board.
- Non-compliance with the Listing Rules of the Financial Services Authority,
Companies Act Legislation, HM Revenue & Customs VCT regulations and other
applicable regulations
The Board mitigates this risk by employing external advisers fully conversant
with applicable statutory and regulatory requirements who report regularly to
the Board on the Company's compliance.
Share capital
Issued share capital
As at the date of this report, the share capital is made up of 11,172,954
ordinary shares of 25p each which have been issued and are fully paid up and are
quoted on the London Stock Exchange.
During the year ended 28 February 2009, the Company renewed its authority to
repurchase up to 14.99% of its own issued ordinary share capital.
Rights and restrictions attaching to shares
The rights and obligations attaching to the Company's ordinary shares, as well
as the powers of the Company's Directors, are set out in the Company's Articles
of Association. Copies of the Articles of Association can be obtained from
Companies House in the UK or by writing to the Company Secretary.
CREST
The Company's ordinary shares are available for trading in CREST, the settlement
system for uncertified stocks and shares.
Dividends
The dividend for the half year to 31 August 2008 of 1.50p per share was paid on
14 January 2009 to shareholders on the register on 12 December 2008. The
Directors recommend a final dividend of 1.50p per share to be paid on 14 July
2009 to ordinary shareholders on the register on 12 June 2009. This gives a
total dividend for the year of 3.00p per share. Note 7 of the Financial
Statements gives details of the dividends declared and paid in the current and
prior financial years.
Directors and their interests
The Directors who held office during the period and their interests in the
Company were as follows:
+--------------------------------------------------+----------+----------+
| | 28 | 29 |
| | February | February |
+--------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------+----------+----------+
| | Ordinary | Ordinary |
| | | |
+--------------------------------------------------+----------+----------+
| | Shares | Shares |
+--------------------------------------------------+----------+----------+
| D Pinckney (Chairman) | 5,150 | 5,150 |
+--------------------------------------------------+----------+----------+
| A Moore | 5,150 | 5,150 |
+--------------------------------------------------+----------+----------+
| P Thomas | 5,150 | 5,150 |
+--------------------------------------------------+----------+----------+
| C Wood | 5,150 | 5,150 |
+--------------------------------------------------+----------+----------+
There have been no changes to Directors' share interests between 28 February
2009 and the date of this report.
All the Directors are non-executives and all are independent except Paul Thomas,
who is Chairman of the Investment Committee of the Investment Manager.
In accordance with the Company's Articles of Association and the Financial
Reporting Council's (FRC) 2006 Combined Code and the Listing Rules of the
Financial Services Authority, Paul Thomas and David Pinckney will retire at the
Annual General Meeting and being eligible will offer themselves for re-election.
As both Mr Thomas and Mr Pinckney have acted in the interests of the Company
throughout the period of their appointment and demonstrated commitment to their
roles, the Board recommends they be re-elected at the Annual General Meeting.
Biographical information on the Directors is detailed below. The terms of the
Directors' appointment and replacement are detailed in the Corporate Governance
Statement.
Substantial interests
As at 28 February 2009 and the date of this report, the Company was not aware of
any beneficial interest exceeding 3 per cent or more of the voting rights
attached to the Company's ordinary share capital.
Investment management, administration and performance fees
Climate Change Capital Limited, a subsidiary of Climate Change Holdings Limited,
which is a subsidiary of Climate Change Capital Group Limited, is the Investment
Manager of the Company and provides management and other administrative
services. Climate Change Capital Limited also provides similar services to
Ventus VCT plc and Ventus 2 VCT plc. The principal terms of the investment
management agreement are set out in note 3 of the Financial Statements.
Company Secretary
During the year under review, company secretarial services were provided by
Capita Company Secretarial Services Limited until 31 January 2009. With effect
from 1 February 2009, The City Partnership (UK) Limited was appointed to provide
company secretarial services to the Company as set out in the company
secretarial services agreement. For these services the Company Secretary
receives an annual fee of GBP5,000 plus VAT. The company secretarial services
agreement is for an initial period of three years terminable thereafter by
either party giving not less than six months notice in writing.
VCT monitoring status
The Company retains PricewaterhouseCoopers LLP to advise on its compliance with
the taxation requirements relating to VCTs.
Financial instruments
The Company's financial instruments comprise investments in unquoted companies,
Government securities and cash. Further details are set out in note 17 of the
Financial Statements.
Directors' and officers' liability insurance
Pursuant to section 236 of the Companies Act 2006, the Company, as permitted by
sections 233 & 234 of the Companies Act 2006, maintained insurance cover on
behalf of the Directors indemnifying them against certain liabilities which may
be incurred by them in relation to the Company.
Supplier payment policy
The Company's payment policy is to agree terms of payment before business is
transacted and to settle accounts in accordance with those terms. During the
year, all suppliers were paid within the terms agreed.
Directors' statement as to disclosure of information to the Auditor
The Directors who were in office on the date of approval of these Financial
Statements have confirmed that, as far as they are aware, there is no relevant
audit information of which the Auditor is unaware. Each of the Directors have
confirmed that they have taken all the steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit information
and to establish that it has been communicated to the Auditor.
Auditor
The Directors propose to appoint PKF (UK) LLP as the Auditor of the Company at
the forthcoming annual general meeting.
Details of the non-audit services provided to the Company by the Auditor are set
out in note 4 of the Financial Statements.
Annual General Meeting
Enclosed with this Annual Report and Financial Statements is the Notice of
Annual General Meeting ("AGM") of the Company (or any adjournment thereof) to be
convened for Wednesday, 1 July 2009 at 12.30pm. A copy of the Notice is set out
below (the "Notice").
The business of the meeting is outlined below.
Resolution 1 - Annual Report and Financial Statements
The Directors are required to present to the AGM the Annual Report and Financial
Statements for the financial year ended 28 February 2009.
Resolution 2 - To declare a final dividend
The final dividend cannot exceed the amount recommended by the Directors and can
only be paid after the members at a general meeting have approved it. The
Directors recommend a final dividend of 1.50p per share payable on 14 July 2009
to the holders of ordinary shares registered at the close of business on 12 June
2009 which will bring the total dividend for the year to 3.00p per share.
Resolution 3 - Directors' Remuneration Report
Under the Directors' Remuneration Report Regulations 2002, the Company is
required to produce a Directors' Remuneration Report for each relevant financial
year and to seek shareholder approval for that report at the AGM. The Directors'
Remuneration Report is set out below.
Resolution 4 - Re-election of Director
Mr Paul Thomas retires in accordance with Listing Rule 15.2.13(2) and, being
eligible, offers himself for re-election.
Resolution 5 - Re-election of Director
Mr David Pinckney retires by rotation in accordance with the Company's Articles
of Association and, being eligible, offers himself for re-election.
Resolution 6 - Appointment of Auditor
This resolution proposes that PKF (UK) LLP be appointed as Auditor of the
Company.
Resolution 7 - Remuneration of the Auditor
This resolution proposes that the Directors be authorised to set the Auditor's
remuneration.
Resolution 8 - Directors' authority to allot shares
By virtue of section 80 of the Companies 1985 Act, the Directors require the
authority of the shareholders of the Company to allot shares or other relevant
securities in the Company. This resolution authorises the Directors to make
allotments of up to an additional 3,724,318 shares (representing approximately
one-third of the issued ordinary share capital of the Company as at the date of
this report, being the latest practicable date prior to the publication of this
document). The existing authority will expire at the forthcoming AGM and, by
proposing this resolution, the Board seeks its renewal. The Directors have no
present intention of exercising the authority given by this resolution. This
authority will be effective until the earlier of the date of the AGM of the
Company to be held in 2010 and the date which is 18 months after the date on
which this resolution is passed (unless the authority is previously revoked,
varied or extended by the Company in general meeting).
Resolution 9 - Disapplication of pre-emption rights
Resolution 9, which will be proposed as a special resolution, supplements the
Directors' authority to allot shares in the Company given to them by Resolution
8. The Resolution authorises the Directors to allot equity shares for cash up to
a total nominal value of GBP418,986 (representing approximately 15% of the share
capital currently in issue). This authority will be effective until the earlier
of the date of the AGM of the Company to be held in 2010 and the date which is
18 months after the date on which this resolution is passed (unless the
authority is previously revoked, varied or extended by the Company in general
meeting).
Resolution 10 - Purchase of ordinary shares by the Company
Resolution 10 which will be proposed as a special resolution, will, if passed,
authorise the Company to purchase in the market up to 1,674,825 shares,
representing 14.99% of the issued share capital of the Company at a minimum
price of 25p per share and a maximum price, exclusive of any expenses, of not
more than an amount equal to the higher of (a) 105% of the average of the middle
market prices shown in the quotations for an ordinary share in The London Stock
Exchange Daily Official List for the five business days immediately preceding
the day on which that ordinary share is purchased; and (b) the amount stipulated
by Article 5(1) of the Buy-back and Stabilisation Regulation 2003. This
authority will be effective until the earlier of the date of the AGM of the
Company to be held in 2010 and the date which is 18 months after the date on
which this resolution is passed (unless the authority is previously revoked,
varied or extended by the Company in general meeting).
The Board believes that it is beneficial to the Company for it to continue to
have the flexibility to purchase in the market its own shares. However, the
Board considers it in the best interests of all shareholders if the Directors
use their authority to make share buy-backs sparingly. Resolution 10 seeks
authority from the shareholders for the Company to be authorised to do so when
considered appropriate by the Directors.
This resolution would renew the authorities granted to the Directors at the last
AGM of the Company.
The minimum and maximum prices to be paid for the shares are stated in the
Notice. Repurchases of shares will be made at the discretion of the Board and
will only be made in the market at prices below the prevailing net asset value
("NAV") per share as and when market conditions are appropriate. Any shares
which are repurchased in this way may be cancelled or held as treasury shares,
which may then be cancelled or sold for cash, as determined by the Board. The
Directors consider that this authority is in the interests of shareholders as a
whole, as the repurchase of ordinary shares at a discount to the underlying NAV
enhances the NAV of the remaining shares. The Directors are aware that the
secondary market for the shares of VCT companies can be illiquid and that shares
may trade at a discount to their NAV. The Company has established a special
reserve out of which it will fund share buy-backs.
Action to be taken
Shareholders have been issued with a Form of Proxy for use in connection with
the AGM. Shareholders are requested to complete the Form of Proxy in accordance
with the instructions printed on it and to return it to the Company's Registrar,
Capita Registrars, Proxy Department, PO Box 25, The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU not less than 48 hours before the time of the AGM.
Completion and return of a Form of Proxy will not preclude shareholders from
attending and voting at the AGM in person should they subsequently decide to do
so.
Recommendation
The Directors believe that all of the resolutions are in the best interests of
the Company and its shareholders as a whole and, accordingly, unanimously
recommend that you vote in favour of the resolutions, as they intend to do in
respect of their own beneficial holdings of shares.
By order of the Board
The City Partnership (UK) Limited
Secretary
27 May 2009
DIRECTORS' REMUNERATION REPORT
This report has been prepared by the Directors in accordance with the
requirements of Schedule 7A to the Companies Act 1985. A resolution to approve
the report will be proposed at the AGM to be held on Wednesday, 1 July 2009.
Remuneration policy
The Board comprises four Directors, all of whom are non-executive. The Board
does not have a separate remuneration committee, as the Company has no employees
or executive Directors.
The Board considers that Directors' fees should reflect the time commitment
required and the high level of responsibility borne by Directors and should be
broadly comparable to those paid by similar companies. It is not considered
appropriate that Directors' remuneration should be performance-related, and none
of the Directors are eligible for bonuses, pension benefits, share options,
long-term incentive schemes or other benefits in respect of their services as
non-executive Directors of the Company.
The total remuneration of non-executive Directors has not exceeded the
GBP100,000 per annum limit set in the Articles of Association of the Company.
The Articles of Association provide that Directors shall retire and offer
themselves for re-election at the first AGM after their appointment and at least
every three years thereafter. A Director's appointment will continue unless
terminated by the Company by giving three months written notice; it may also be
terminated in certain other circumstances.
Directors' fees (audited information)
The following fees were paid to individual Directors in respect of the year
ended 28 February 2009 with comparative figures for the year ended 29 February
2008:
+-----------------------------------------+---------------+--------------+
| | 28 February | 29 February |
+-----------------------------------------+---------------+--------------+
| | 2009 | 2008 |
+-----------------------------------------+---------------+--------------+
| | GBP | GBP |
+-----------------------------------------+---------------+--------------+
| D Pinckney (Chairman) | 10,000 | 10,000 |
+-----------------------------------------+---------------+--------------+
| A Moore | 7,500 | 7,500 |
+-----------------------------------------+---------------+--------------+
| P Thomas | 7,500 | 7,500 |
+-----------------------------------------+---------------+--------------+
| C Wood | 7,500 | 7,500 |
+-----------------------------------------+---------------+--------------+
| Aggregate emoluments | 32,500 | 32,500 |
+-----------------------------------------+---------------+--------------+
Directors' fees for the financial year ending 28 February 2010 (unaudited) are
expected to be the same as those for the year ended 28 February 2009.
Company performance
Due to the positioning of the Company in the market as a specialist VCT
investing in companies that will develop, construct and operate small on-shore
UK renewable energy projects, the Directors consider that, currently, there is
no suitable company or index that can be identified for comparison. However, in
order to comply with Directors' Remuneration Report Regulations 2002, the
FTSE100 Index has been used as a comparative.
The graph demonstrates the change in value, in terms of total shareholder return
(based on NAV plus cumulative dividends), of GBP100 invested in the Company on
the date it was first listed on the London Stock Exchange (10 March 2006) over
the period to 28 February 2009 compared with the value of GBP100 invested in the
FTSE 100 Index over the same period. The total shareholder return based on share
price has not been presented due to the illiquid nature of the shares during the
initial three year holding period pursuant to HM Revenue & Customs VCT
regulations. The graph shows that there have been no significant changes in
shareholder value.
By order of the Board
The City Partnership (UK) Limited
Secretary
27 May 2009
CORPORATE GOVERNANCE STATEMENT
The Board is accountable to shareholders for the governance of the Company's
affairs and is committed to maintaining the highest standards of corporate
governance. The Board has adopted the 2006 FRC Combined Code ("the Code") in
respect of the year ended 28 February 2009. It has considered the principles
detailed in the Code and believes that, insofar as they are relevant to the size
and structure of the Company's business, the Company has complied or explained
non-compliance with the provisions of the Code throughout the year to 28
February 2009, as detailed below.
Board of Directors
Throughout the year ended 28 February 2009 the Board consisted of four
Directors, all of whom are non-executive. The Board ensures that it has the
appropriate balance of skills, experience and age amongst its Directors.
Biographical information on the Directors is detailed below.
Independence
In accordance with the Listing Rules of the Financial Services Authority, the
Board has reviewed the independence of each Director and of the Board as a
whole. Directors withdrew from discussions concerning their individual status.
Mr Thomas is also the Chairman of the Investment Committee of the Investment
Manager and is therefore not considered to be independent. In the last year all
Board members have served as Directors of Ventus VCT plc and Ventus 2 VCT plc.
These companies have appointed Climate Change Capital Limited as their
Investment Manager. The Board believes that each Director, with the exception of
Mr Thomas, has demonstrated that he is independent in character and judgement
and independent of the Investment Manager and therefore, that Mr Pinckney, Mr
Moore and Mr Wood are each considered independent.
The Board meets at least quarterly and is in regular contact with the Investment
Manager between these meetings. The Directors held four meetings of the Board
during the year. In addition there were a number of ad-hoc meetings, including
meetings related to the approval of the Half-yearly Report and the Interim
Management Statements. The number of meetings of the Board and the Audit
Committee held during the year and the attendance of the Directors is shown in
the table below:
+-------------------------------------------------------------------+-------------+-------------+
| | Board | Audit |
+-------------------------------------------------------------------+-------------+-------------+
| | Meeting | Committee |
+-------------------------------------------------------------------+-------------+-------------+
| | Attendance | Attendance |
+-------------------------------------------------------------------+-------------+-------------+
| D Pinckney (Chairman) | 4 (4) | 3 (3) |
+-------------------------------------------------------------------+-------------+-------------+
| A Moore | 4 (4) | N/A |
+-------------------------------------------------------------------+-------------+-------------+
| P Thomas | 4 (4) | 3 (3) |
+-------------------------------------------------------------------+-------------+-------------+
| C Wood | 4 (4) | 3 (3) |
+-------------------------------------------------------------------+-------------+-------------+
The figure in brackets indicates the total number of meetings at which the
Director was expected to attend.
All the Directors are equally responsible under the law for the proper conduct
of the Company's affairs. In addition, the Directors are responsible for
ensuring that the policies and operations are in the best interests of all the
Company's shareholders and that the best interests of creditors and suppliers to
the Company are properly considered.
The Board has agreed a schedule of matters reserved to it, which includes the
general investment strategy of the Company and the performance of the Company.
The terms and conditions of appointment of non-executive Directors are available
upon written application to the Company Secretary.
All Directors have direct access to the Company Secretary and independent
advisers at the Company's expense provided prior clearance has been obtained
from the Board. The Company Secretary is responsible to the Board for ensuring
that Board and Committee procedures are followed and for compliance with
applicable rules and regulations. The Company Secretary is also responsible to
the Board for ensuring the timely delivery of information and reports and that
the statutory obligations of the Company are met.
When Directors have concerns that cannot be resolved about the running of the
Company or a proposed action, they are asked to ensure that their concerns are
recorded in the Board minutes. On resignation, a Director who has any such
concerns is encouraged to provide a written statement to the Chairman, for
circulation to the Board.
At each AGM of the Company one third of the Directors shall retire from office.
The Directors to retire will be those who have been longest in office or, in the
case of those who were appointed or reappointed on the same day, will be (unless
they otherwise agree) determined by lot. Furthermore, no Director shall be
required to retire by rotation earlier than the third AGM after the meeting at
which he was elected. In addition, as Mr Thomas is the Chairman of the
Investment Committee of the Investment Manager, he is subject to re-election
under Listing Rule 15.2.13(2), and will therefore offer himself for re-election
at the AGM and annually thereafter.
Upon joining the Board, new Directors will receive a full, formal and tailored
induction. As the Company has no major shareholders, it is considered
unnecessary to provide shareholders with the opportunity to meet new
non-executive Directors at a specific meeting other than the AGM.
Due to the size and structure of the Board together with the nature of the
Company's business, a formal performance evaluation of the Board, its
committees, the individual Directors and the Chairman has not been undertaken.
Specific performance issues are dealt with as they arise.
Audit Committee
The Audit Committee comprises David Pinckney, Colin Wood and Paul Thomas. Due to
his extensive international auditing experience (detailed in the Directors'
Information below), it is deemed appropriate that David Pinckney is Chairman of
both the Audit Committee and the Board of the Company. The Committee meets twice
a year to review the Half-yearly Report and Annual Financial Statements before
submission to the Board. The roles and responsibilities of the Audit Committee,
including reviewing the Company's internal controls, risk management systems and
monitoring auditor independence, are set out in written terms of reference.
These are available upon written application to the Company Secretary. The Audit
Committee has primary responsibility for making recommendations on the
appointment, reappointment and removal of the external Auditor.
The Audit Committee reviews the nature and extent of non audit services provided
by the Company's external Auditor and ensures that the Auditor's independence
and objectivity is safeguarded.
During the year under review, the Company's external Auditor also provided tax
compliance services and advice. The Board is satisfied that the fees charged and
work undertaken did not affect the Auditor's objectivity.
Nomination and Remuneration Committees
To date, no Nomination or Remuneration Committees have been established. The
establishment of a Nomination Committee is not anticipated as there are no
current proposals to appoint any new Directors and recommendations for the
re-election of Directors are considered by the Board. Matters relating to
remuneration of Directors are considered by the Board and any Director is
excluded from meetings whose purpose is the setting of his own remuneration.
Each Director has signed a formal letter of appointment, copies of which are
available from the registered office and will be available on the day of the
AGM. None of the Directors has a contract of service with the Company, nor have
there been any other contracts or arrangements between the Company and any
Director at any time. No Director has been granted any options to acquire shares
in the Company.
Internal control
The Board acknowledges that it is responsible for the Company's system of
internal control. Internal control systems are designed to provide reasonable,
but not absolute, assurance against material misstatement or loss. The Board has
delegated, contractually to third parties, the management of the investment
portfolio, the custodial services (which include safeguarding the Company's
assets), the day-to-day accounting, company secretarial and administration
requirements and the registration services. Each of these contracts was entered
into after full and proper consideration by the Board of the quality and cost of
services offered.
There is an ongoing process for identifying, evaluating and managing the
significant risks faced by the Company, which has been in place for the period
under review and up to the date of approval of the accounts. This process is
regularly reviewed by the Board. Having considered the need for an internal
audit function, the Board has decided that the structure of the Company does not
justify it. The Board will continue to monitor and review the risk management
process on a regular basis.
Going concern
The Directors believe that it is appropriate to continue to adopt the going
concern basis in preparing the accounts, as the Company has adequate financial
resources to continue in operational existence for the foreseeable future.
Relations with shareholders
The Company communicates with shareholders and solicits their views where it is
appropriate to do so. All shareholders are welcome at the AGM which provides a
forum for shareholders to ask questions of the Directors and to discuss with
them issues affecting the Company. The Board as a whole approves the Chairman's
Statement which forms part of the Annual and Half-yearly Reports to shareholders
in order to ensure that they present a balanced and understandable assessment of
the Company's position and future prospects. Notice of the AGM accompanies this
Annual Report, which is sent to shareholders a minimum of 20 working days before
the meeting.
A separate resolution is proposed at the AGM on each substantially separate
issue. The Registrar collates the proxy votes, and the results (together with
the proxy forms) are forwarded to the Company Secretary immediately prior to the
AGM. In order to comply with the Combined Code, proxy votes are announced at the
AGM, following each vote on a show of hands, except in the event of a poll being
called. The notice of the next AGM and proxy form can be found at the end of
these Financial Statements. A proxy form in respect of this meeting has been
issued to shareholders separately.
Compliance statement
The Directors acknowledge that the Company did not comply with the following
provisions of the Combined Code in the year ended 28 February 2009:
Provision
A.1.3 Due to the size and structure of the Company, the Directors do not feel
it necessary to meet on an annual basis, without the Chairman present, in order
to appraise his performance.
A.2.1 Due to the structure of the Company, the Directors do not feel it
necessary to appoint a Chief Executive Director.
A.3.3 Due to the size and structure of the Company and the Board, the
Directors do not feel it necessary to appoint a senior independent Director.
A.4.1 No nomination committee has been established as no new appointments are
anticipated.
A.5.1 As the Company has no major shareholders, it is considered unnecessary
to provide shareholders with the opportunity to meet new non-executive Directors
at a specific meeting other than the AGM.
A.6.1 Due to the size and structure of the Board together with the nature of
the Company's business, a formal performance evaluation of the Board, its
committees, the individual Directors and the Chairman has not been undertaken.
A.7.2 The non-executive Directors have not been appointed for specified terms
because one third of the longest serving Directors are required to retire at
each AGM. Subject to re-election, a Director's appointment will continue unless
terminated by the Company by giving three months written notice; it may also be
terminated in certain other circumstances.
B.2.1 No Remuneration Committee has been established as all Directors are
Non-Executive Directors and the matters relating to the remuneration of
Directors are considered by the Board, with no Director taking part in any
decision relating to his own remuneration.
C.3.1 Paul Thomas is Chairman of the Investment Committee of the Investment
Manager and, under the code, the independence test does not apply to Mr
Pinckney, the Chairman of the Company, therefore both are deemed not to be
independent by the Code. The Board considers Mr Pinckney to be independent in
nature and judgement and is satisfied that no one individual on the Board or the
Audit Committee has unfettered power of decision-making.
C.3.4 As there are no employees, no arrangements have been made for staff to
raise concerns about possible improprieties in matters of financial reporting or
otherwise.
DIRECTORS' INFORMATION
The Board of the Company comprises four Directors, three of whom are independent
of the Investment Manager. The Directors operate in a non-executive capacity and
are responsible for overseeing the investment strategy of the Company. The Board
has wide experience of investment in both smaller growing companies and larger
quoted companies. In addition, Alan Moore has specific investment experience in
the UK renewable energy industry.
David Pinckney, FCA, MA
Chairman (aged 68)
David Pinckney was, until December 2003, the Vice Chairman of AXA Investment
Managers SA, the investment management arm of the AXA Group with over US$500
billion under management. He was a member of the Executive and Audit Committees.
From 1987 to 1997, he was Group Finance Director and Joint Managing Director of
The Thornton Group (a subsidiary of Dresdner Bank), which specialized in equity
investment management, in particular in the Asia/Pacific region. From 1984 to
1986, he was Managing Director of Wrightson Wood Financial Services Limited, a
company specialising in international corporate finance and venture capital.
From 1963 to 1983, he was with Peat, Marwick Mitchell (now KPMG), where in his
last six years he was Senior Audit Partner for France and French speaking
Africa. He was Non-executive Chairman of the AIM-quoted Park Row Group PLC from
2002 to 2003, when the Group was successfully sold. He is a Director of Albion
Development VCT PLC, Chairman of Syndicate Asset Management PLC and Chairman of
Rutley European Property Limited. He is a Chartered Accountant and an "Expert
Comptable" (a French Accountant). He has been a member of the Board since
January 2006.
Alan Moore (aged 60)
Alan Moore has more than 40 years experience in the UK electricity industry,
beginning his career with the Central Electricity Generating Board. From 1998 to
May 2004, he was the Managing Director of National Wind Power (now RWE npower
Renewables), one of the largest developers and owners of wind generation assets
in the UK. He is a former Chairman of the British Wind Energy Association,
Co-Chairman of the UK Government's Renewables Advisory Board and Chairman of
Cowrie Limited, a fund which invests in offshore environmental research
projects, and he is also a non-executive director of Partnerships for Renewables
Limited. He has been a member of the Board since January 2006.
Paul Thomas, ACA (aged 51)
Paul Thomas is Managing Director of Pi Capital Limited, the London-based
independent private equity firm that invests in transactions of up to GBP5
million in growing, unquoted UK businesses. He has over 24 years of private
equity experience, including 19 years with ECI Partners LLP, the London based
midmarket buy-out house, where he was Managing Director until retiring in 2003.
During his time with ECI, the firm made over 100 equity investments in
transactions ranging in size from GBP500,000 to GBP25 million, deploying capital
of more than GBP200 million. Previously, he was with Price Waterhouse for 6
years, latterly in corporate finance. He is a physics graduate and a Chartered
Accountant. He is Chairman of the Investment Committee of the Investment Manager
and has been a member of the Board since January 2006.
Colin Wood (aged 62)
Colin Wood spent 27 years as a civil servant in the Scottish Office before
retiring from a senior position in the Scottish Executive in 2001. He holds a
degree in economics and from 1993 to 1998, he was Senior Economic Advisor and
Head of the Economics and Statistics Unit at the Scottish Office Industry
Department, where he was responsible for providing economic advice on a range of
issues including energy markets and the environment. He is a Director of the
Century Building Society in Edinburgh. He has been a member of the Board since
January 2006.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
in respect of the financial statements
The Directors are responsible for preparing the Annual Report, the Directors'
Remuneration Report and the Financial Statements in accordance with applicable
law and regulations.
UK Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
Financial Statements in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union.
The Financial Statements are required by law and IFRS as adopted by the European
Union to present fairly the financial position and performance of the Company;
the Companies Act 1985 provides, in relation to such financial statements, that
references in the relevant part of that Act to financial statements giving a
true and fair view are references to their achieving a fair presentation.
The Financial Statements are required by law to give a true and fair view of the
state of affairs of the Company.
In preparing these Financial Statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether they have been prepared in accordance with IFRS as adopted in
the European Union; and
- prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and which enable them to ensure that the Financial Statements comply
with the Companies Act 1985. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Each of the Directors, whose names and functions are listed in the Directors'
Information above confirms that, to the best of their knowledge:
a. the Financial Statements, prepared in accordance with IFRS as adopted by
the European Union, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
b. the Directors' Report contained in the Annual Report includes a fair
review of the development and performance of the business and the position of
the company together with a description of the principal risks and uncertainties
that it faces.
The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
DIRECTORS AND ADVISERS
Directors
D Pinckney (Chairman)
A Moore
P Thomas
C Wood
Company Secretary
The City Partnership (UK) Limited
Thistle House
21 Thistle Street
Edinburgh
EH2 1DF
Auditor
Baker Tilly UK Audit LLP
Chartered Accountants
2 Bloomsbury Street
London
WC1B 3ST
Banker
HSBC Bank Plc
60 Queen Victoria Street
London
EC4N 4TR
Investment Manager
Climate Change Capital Limited
3 More London Riverside
London
SE1 2AQ
Registrar and Registered Office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Broker
Matrix Corporate Capital LLP
One Vine Street
London
W1J 0AH
Taxation Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Solicitor
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London
EC4R 9HA
INDEPENDENT AUDITOR'S REPORT
to the members of Ventus 3 VCT plc
We have audited the Financial Statements. We have also audited the information
in the Directors' Remuneration Report that is described as having been audited.
This report is made solely to the Company's members, as a body, in accordance
with section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the Company's members those matters we are required to
state to them in an Auditor's 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 and the Company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditor
The Directors' responsibilities for preparing the Annual Report, the Directors'
Remuneration Report and the Financial Statements in accordance with applicable
law and International Financial Reporting Standards ("IFRS") as adopted by the
European Union are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the Financial Statements and the part of the
Directors' Remuneration Report to be audited in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the Financial Statements give a true
and fair view and whether the Financial Statements and the part of the
Directors' Remuneration Report to be audited have been properly prepared in
accordance with the Companies Act 1985. We also report to you whether in our
opinion the information given in the Directors' Report is consistent with the
Financial Statements. The information given in the Directors' Report includes
that specific information presented in the Chairman's Statement and Investment
Manager's Report that is cross referenced from the Business Review section of
the Directors' Report.
In addition we report to you if, in our opinion, the Company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
Directors' remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the Company's
compliance with the nine provisions of the 2006 Combined Code specified for our
review by the Listing Rules of the Financial Services Authority, and we report
if it does not. We are not required to consider whether the Board's statements
on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Company's corporate governance procedures or its risk and
control procedures.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited Financial Statements. The other information
comprises only the Directors' Report, the unaudited part of the Directors'
Remuneration Report, the Chairman's Statement, the Investment Manager's Report,
the Director's Information and the Corporate Governance Statement. We consider
the implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the Financial Statements. Our responsibilities
do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the Financial Statements and the part of the Directors'
Remuneration Report to be audited. It also includes an assessment of the
significant estimates and judgements made by the Directors in the preparation of
the Financial Statements, and of whether the accounting policies are appropriate
to the Company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the Financial Statements
and the part of the Directors' Remuneration Report to be audited are free from
material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the Financial Statements and the part of the
Directors' Remuneration Report to be audited.
Opinion
In our opinion:
- the Financial Statements give a true and fair view, in accordance with IFRS
as adopted by the European Union, of the state of the Company's affairs as at 28
February 2009 and of its profit for the year then ended;
- the Financial Statements and the part of the Directors' Remuneration Report
to be audited have been properly prepared in accordance with the Companies Act
1985; and
- the information given in the Directors' Report is consistent with the
Financial Statements.
Baker Tilly UK Audit LLP
Registered Auditor
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST
27 May 2009
INCOME STATEMENT
for the year ended 28 February 2009
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| | | 2009 | | 2008 | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| | | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| | Note | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Income | 2 | 615 | - | 615 | 578 | - | 578 |
| | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Net gains on investment | 9 | - | 153 | 153 | - | - | - |
| | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| | | 615 | 153 | 768 | 578 | - | 578 |
| | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Expenditure | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Investment management fees | 3 | 57 | 171 | 228 | 78 | 233 | 311 |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Other expenses | 4 | 129 | - | 129 | 120 | - | 120 |
| | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| | | 186 | 171 | 357 | 198 | 233 | 431 |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Profit/(loss) before taxation | | 429 | (18) | 411 | 380 | (233) | 147 |
| | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Tax | 6 | (53) | 36 | (17) | (76) | 47 | (29) |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Profit/(loss) for the year | | 376 | 18 | 394 | 304 | (186) | 118 |
| attributable to equity | | | | | | | |
| shareholders | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Earnings per share | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
| Basic and diluted return per | 8 | 3.36 | 0.16 | 3.52 | 2.71 | (1.66) | 1.05 |
| ordinary share (p) | | | | | | | |
+-----------------------------------+------+---------+---------+--------+---------+---------+--------+
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made.
The total column of this statement represents the Company's Income Statement,
prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. The supplementary revenue return and capital
return columns are both prepared under guidance published by the Association of
Investment Companies.
The accompanying accounting policies and notes form an integral part of these
Financial Statements.
BALANCE SHEET
as at 28 February 2009
+-----------------------------------------+------+---+----------+---+--------------+
| | | | 2009 | | 2008 |
+-----------------------------------------+------+---+----------+---+--------------+
| | Note | | GBP000 | | GBP000 |
+-----------------------------------------+------+---+----------+---+--------------+
| Non-current assets | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
| Investments | 9 | | 8,100 | | 1,313 |
+-----------------------------------------+------+---+----------+---+--------------+
| Trade and other receivables | 10 | | 139 | | 36 |
+-----------------------------------------+------+---+----------+---+--------------+
| | | | 8,239 | | 1,349 |
+-----------------------------------------+------+---+----------+---+--------------+
| Current assets | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
| Trade and other receivables | 10 | | 100 | | 13 |
+-----------------------------------------+------+---+----------+---+--------------+
| Cash and cash equivalents | 11 | | 2,258 | | 9,177 |
+-----------------------------------------+------+---+----------+---+--------------+
| | | | 2,358 | | 9,190 |
+-----------------------------------------+------+---+----------+---+--------------+
| Total assets | | | 10,597 | | 10,539 |
+-----------------------------------------+------+---+----------+---+--------------+
| Current liabilities | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
| Trade and other payables | 12 | | (44) | | (56) |
+-----------------------------------------+------+---+----------+---+--------------+
| Net current assets | | | 2,314 | | 9,134 |
| | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
| Net assets | | | 10,553 | | 10,483 |
+-----------------------------------------+------+---+----------+---+--------------+
| Equity attributable to equity holders | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
| Ordinary share capital | 13 | | 2,793 | | 2,793 |
+-----------------------------------------+------+---+----------+---+--------------+
| Special reserve | 14 | | 7,803 | | 7,803 |
+-----------------------------------------+------+---+----------+---+--------------+
| Capital reserve - realised | 14 | | (494) | | (359) |
+-----------------------------------------+------+---+----------+---+--------------+
| Capital reserve - unrealised | 14 | | 153 | | - |
+-----------------------------------------+------+---+----------+---+--------------+
| Revenue reserve | 14 | | 298 | | 246 |
+-----------------------------------------+------+---+----------+---+--------------+
| Total equity | | | 10,553 | | 10,483 |
+-----------------------------------------+------+---+----------+---+--------------+
| Basic and diluted net asset value per | 15 | | 94.5 | | 93.8 |
| ordinary share (p) | | | | | |
+-----------------------------------------+------+---+----------+---+--------------+
Approved by the Board and authorised for issue on 27 May 2009.
D Pinckney P Thomas
Director Director
The accompanying accounting policies and notes form an integral part of these
Financial Statements.
CASH FLOW STATEMENT
for the year ended 28 February 2009
+-------------------------------------------------+---------+--+---------+
| | 2009 | | 2008 |
+-------------------------------------------------+---------+--+---------+
| | GBP000 | | GBP000 |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Cash flows from operating activities | | | |
+-------------------------------------------------+---------+--+---------+
| Investment income received | 175 | | - |
+-------------------------------------------------+---------+--+---------+
| Deposit interest received | 323 | | 544 |
+-------------------------------------------------+---------+--+---------+
| Investment management fees paid | (250) | | (311) |
+-------------------------------------------------+---------+--+---------+
| Other expenses paid | (180) | | (119) |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Net cash from operating activities before taxes | 68 | | 114 |
+-------------------------------------------------+---------+--+---------+
| Taxes paid | (29) | | (13) |
+-------------------------------------------------+---------+--+---------+
| Net cash from operating activities | 39 | | 101 |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Cash flows from investing activities | | | |
+-------------------------------------------------+---------+--+---------+
| Purchases of investments | (6,634) | | (1,144) |
+-------------------------------------------------+---------+--+---------+
| Net cash used in investing activities | (6,634) | | (1,144) |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Cash flows from financing activities | | | |
+-------------------------------------------------+---------+--+---------+
| Dividends paid | (324) | | (196) |
+-------------------------------------------------+---------+--+---------+
| Net cash used in financing activities | (324) | | (196) |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Net decrease in cash and cash equivalents | (6,919) | | (1,239) |
+-------------------------------------------------+---------+--+---------+
| | | | |
+-------------------------------------------------+---------+--+---------+
| Cash and cash equivalents at the beginning of | 9,177 | | 10,416 |
| the year | | | |
+-------------------------------------------------+---------+--+---------+
| Cash and cash equivalents at the end of the | 2,258 | | 9,177 |
| year | | | |
+-------------------------------------------------+---------+--+---------+
The accompanying accounting policies and notes form an integral part of these
Financial Statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2009
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | Ordinary | | Capital | Capital | | |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | share | Special | reserve | reserve | Revenue | |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | capital | reserve | realised | unrealised | reserve | Total |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | | | | | | |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| At 1 March 2008 | 2,793 | 7,803 | (359) | - | 246 | 10,483 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| (Loss)/profit for the year after tax | - | - | (135) | 153 | 376 | 394 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| Total recognised income and expense | - | - | (135) | 153 | 376 | 394 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| Dividends paid in the year | - | - | - | - | (324) | (324) |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| At 28 February 2009 | 2,793 | 7,803 | (494) | 153 | 298 | 10,553 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| | | | | | | |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| At 1 March 2007 | 2,793 | 7,803 | (173) | - | 138 | 10,561 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| (Loss)/profit for the year after tax | - | - | (186) | - | 304 | 118 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| Total recognised income and expense | - | (186) | - | 304 | 118 | |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| Dividends paid in the year | - | - | - | - | (196) | (196) |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
| At 29 February 2008 | 2,793 | 7,803 | (359) | - | 246 | 10,483 |
+-----------------------------------------+----------+---------+----------+------------+----------+----------+
The accompanying accounting policies and notes form an integral part of
these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 28 February 2009
1. Accounting policies
Accounting convention
The Financial Statements of the Company have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), which comprise standards
and interpretations approved by the International Accounting Standards Board
("IASB"), and International Accounting Standards ("IAS") and Standing
Interpretations Committee interpretations approved by the International
Accounting Standards Committee ("IASC") that remain in effect, and to the extent
that they have been adopted by the European Union and with those parts of the
Companies Act 1985 applicable to companies under IFRS.
The Financial Statements have been prepared on the historical cost basis, except
for the revaluation of certain financial assets at fair value through profit or
loss. The principal accounting policies adopted are set out below. Where
presentational guidance set out in the Statement of Recommended Practice
("SORP") for investment companies issued in January 2003 and revised in December
2005 is consistent with the requirements of IFRS, the Directors have sought to
prepare the Financial Statements on a basis compliant with the recommendations
of the SORP.
Presentation of income statement
In order to better reflect the activities of the Company and in accordance with
guidance issued by the Association of Investment Companies ("AIC"),
supplementary information which analyses the Income Statement between items of a
revenue and capital nature has been presented alongside the Income Statement.
Income
Income on investments is stated on an accruals basis, by reference to the
principal outstanding and at the effective interest rate applicable. Interest
receivable on cash and non-equity investments is accrued to the end of the year.
No tax was withheld at source on income.
Dividend income from investments is recognised when the shareholders' rights to
receive payment has been established, normally the ex-dividend date.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis
between revenue and capital items presented within the Income Statement, all
expenses have been presented as revenue items except when expenses are split and
presented partly as capital items where a connection with the maintenance or
enhancement of the value of the investments held can be demonstrated, and
accordingly the investment management fee has been allocated 25% to revenue and
75% to capital, in order to reflect the Directors' expected long-term view of
the nature of the investment returns of the Company.
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 Income Statement
because it excludes items of income or expense that are taxable or deductible in
other years 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 balance sheet date.
The tax charge for the year is allocated between revenue return and capital
return on the "marginal basis" as recommended in the SORP. Under this basis, the
benefit of tax relief on allowable expenses is allocated to revenue return.
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 balance sheet
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 balance sheet date. Deferred tax is charged or credited in the Income
Statement, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
Financial Instruments
Financial assets and financial liabilities are recognised on the Company's
balance sheet when the Company has become a party to the contractual provisions
of the instrument.
Trade and other receivables
Trade and other receivables are initially recognised at fair value. They are
subsequently measured at their amortised cost using the effective interest
method less any provision for impairment. A provision for impairment is made
where there is objective evidence (including counterparties with financial
difficulties or in default on payments) that amounts will not be recovered in
accordance with original terms of the agreement. A provision for impairment is
established when the carrying value of the receivable exceeds the present value
of the future cash flow 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 Income Statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at bank and other short-term
deposits held by the Company with maturities of less than three months.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently
at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received
amount, net of direct issue costs.
Key assumptions and key sources of estimation uncertainty
The preparation of the Financial Statements requires the application of
assumptions and estimates which may affect the results reported in the Financial
Statements. Estimates, by their nature, are based on judgement and available
information. The assumptions and estimates made in respect of investment values
are outlined below.
Investments
As the Company's business is investing in financial assets with a view to
profiting from their total return in the form of interest, dividends and
increases in fair values, all investments are designated as fair value through
profit or loss on initial recognition. A financial asset is designated within
this category if it is acquired, managed and evaluated on a fair value basis in
accordance with the Company's documented investment policy. In the year of
acquisition, investments are 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 Income Statement.
Investments in unquoted companies are valued in accordance with International
Private Equity and Venture Capital Valuation Guidelines. The price of recent
investment methodology is applied until the relevant investee company's
generating assets have proved stable operational performance for an acceptable
period of time. This time period will vary depending on the nature of the
renewable energy technology that the investee company uses, but is typically
between 6 and 18 months following completion of the construction phase. The
investments in unquoted companies are subsequently valued using the 'discounted
cash flow from the underlying business' methodology.
The key assumptions that have a significant impact on fair value in the
discounted cash flow valuations are the discount factor used, the price at which
the power and associated benefits can be sold and the level of electricity the
investee company's generating assets are expected to produce. The discount
factor applied to the cash flows is regularly reviewed by the Investment
Committee of the Investment Manager to ensure it is set at the appropriate level
and is benchmarked to other investments in the renewable energy sector using
similar generating technology. The Investment Committee and the Board will also
give consideration to the specific performance characteristics of the particular
type of generating technology being used. The price at which the output from the
generating assets is sold is often fixed in the medium term under power purchase
agreements. For periods outside the term of these agreements the assumed future
prices are taken from external third party market data which take the form of
specialist consultancy reports. Specifically commissioned external consultant
reports are also used to verify the expected electrical output from the investee
company's generating assets taking in to account their type and location. All of
these key assumptions are reviewed regularly by the Investment Committee of the
Investment Manager and the Board.
When an investee company has gone into receivership or liquidation, the
investment, although physically not disposed of, is treated as being realised.
The company has taken the exemption, permitted by IAS 28 Investments in
Associates and IAS 31 Interests in Joint Ventures, from equity accounting for
investments where it has significant influence 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. UK treasury bills are valued at bid prices as at the year end.
Dividends payable
Dividends payable are recognised as distributions in the Financial Statements
when the Company's liability to make payment has been established.
Accounting standards issued but not yet effective
At the date of authorisation of these Financial Statements, the following
Standards and Interpretations, which are deemed to be relevant to the Company,
were in issue but not yet effective. These Standards and Interpretations have
not been applied in these Financial Statements.
International Accounting Standards (IAS/IFRS)
+--------------+--------------------------------+---------------+
| | | Effective |
| | | Date |
+--------------+--------------------------------+---------------+
| | | (annual |
| | | periods |
| | | beginning |
| | | after) |
+--------------+--------------------------------+---------------+
| IAS 39 & | Amendments - Reclassification | 1 July 2008 |
| IFRS 7 | of Financial Assets | |
+--------------+--------------------------------+---------------+
| IAS 1R | Presentation of Financial | 1 January |
| | Statements | 2009 |
+--------------+--------------------------------+---------------+
| IAS 7 | Statement of Cash Flows | 1 January |
| | | 2009 |
+--------------+--------------------------------+---------------+
| IAS 8 | Amendment - Accounting | 1 January |
| | Policies, Changes in | 2009 |
| | Accounting Estimates and | |
| | Errors | |
+--------------+--------------------------------+---------------+
| IAS 10 | Amendment - Events after the | 1 January |
| | Reporting Period | 2009 |
+--------------+--------------------------------+---------------+
| IAS 18 | Amendment - Revenue | 1 January |
| | | 2009 |
+--------------+--------------------------------+---------------+
| IAS 32 | Amendment - Financial | 1 January |
| | Instruments: Presentation | 2009 |
+--------------+--------------------------------+---------------+
| IAS 36 | Amendment - Impairment of | 1 January |
| | Assets | 2009 |
+--------------+--------------------------------+---------------+
| IAS 38 | Amendment - Intangible Assets | 1 January |
| | | 2009 |
+--------------+--------------------------------+---------------+
| IAS 39 | Amendment - Financial | 1 January |
| | Instruments: Recognition and | 2009 |
| | Measurement | |
+--------------+--------------------------------+---------------+
| IFRS | 2008 Annual Improvements to | 1 January |
| | IFRS | 2009 |
+--------------+--------------------------------+---------------+
| IFRS 1 & IAS | Amendments - Cost of an | 1 January |
| 27 | Investment in a Subsidiary, | 2009 |
| | Jointly Controlled Entity or | |
| | Associate | |
+--------------+--------------------------------+---------------+
| IFRS 7 | Amendment - Improving | 1 January |
| | Disclosures about Financial | 2009 |
| | Instruments | |
+--------------+--------------------------------+---------------+
| IFRS 8 | Operating Segments | 1 January |
| | | 2009 |
+--------------+--------------------------------+---------------+
| IAS 27 | Amendment - Consolidated and | 1 July 2009 |
| | Separate Financial Statements | |
+--------------+--------------------------------+---------------+
| IAS 39 | Amendment - Eligible Hedge | 1 July 2009 |
| | Items | |
+--------------+--------------------------------+---------------+
| IFRS 1R | Structural Amendment | 1 July 2009 |
+--------------+--------------------------------+---------------+
| IFRS 3R | Business Combinations | 1 July 2009 |
+--------------+--------------------------------+---------------+
| IFRS 5 | Amendment - Non-current Assets | 1 July 2009 |
| | Held for Sale and Discontinued | |
| | Operations | |
+--------------+--------------------------------+---------------+
| IFRIC 17 | Distributions of Non-Cash | 1 July 2009 |
| | Assets to Owners | |
+--------------+--------------------------------+---------------+
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the Financial
Statements of the Company.
2. Income
+----------------------------------------+----------+--+-------------+
| | 2009 | | 2008 |
+----------------------------------------+----------+--+-------------+
| | GBP000 | | GBP000 |
+----------------------------------------+----------+--+-------------+
| Income from investments | | | |
+----------------------------------------+----------+--+-------------+
| Mezzanine loan stock interest income | 114 | | 24 |
+----------------------------------------+----------+--+-------------+
| Dividend income | 175 | | - |
+----------------------------------------+----------+--+-------------+
| | 289 | | 24 |
+----------------------------------------+----------+--+-------------+
| Other income | | | |
+----------------------------------------+----------+--+-------------+
| UK treasury bill income | 301 | | 534 |
+----------------------------------------+----------+--+-------------+
| Bank deposit interest | 25 | | 20 |
+----------------------------------------+----------+--+-------------+
| | 615 | | 578 |
+----------------------------------------+----------+--+-------------+
3. Investment management fees
+---------------------------------------+---+---+---+--+--+--+--------+---+--------+
| | | | | | | | 2009 | | 2008 |
+---------------------------------------+---+---+---+--+--+--+--------+---+--------+
| | | | | | | | GBP000 | | GBP000 |
+---------------------------------------+---+---+---+--+--+--+--------+---+--------+
| Investment management fees | | | | | | | 228 | | 311 |
+---------------------------------------+---+---+---+--+--+--+--------+---+--------+
The Investment Manager is entitled to an annual fee equal to 2.5% of NAV. This
fee is exclusive of VAT and is paid quarterly in advance. The fee covers the
provision by the Investment Manager of investment management services as well as
all accounting and administrative services together with the additional annual
trail commission payable to authorised financial intermediaries. Total annual
running costs are in aggregate capped at 3.6% of NAV (excluding the Investment
Manager's performance-related incentive fee and any irrecoverable VAT), with any
excess being borne by the Investment Manager.
During the year, HM Revenue & Customs amended the treatment of the supply of
investment management services to Venture Capital Trusts from taxable to exempt;
therefore, VAT is no longer chargeable on the investment management fee. As the
change in treatment may be applied retrospectively, Climate Change Capital
Limited made a claim with HM Revenue & Customs to recover VAT previously paid
net of irrecoverable VAT attributable to the supply of investment management
services. The amount recovered from the claim, GBP57,721, was refunded to the
Company during the year and was credited to investment management fees through
the Income Statement. Of the amount recovered, GBP15,175 was in respect of VAT
paid in the current year.
The Investment Manager will receive a performance related incentive fee subject
to the Company achieving certain defined targets. No incentive fee will be
payable until the Company has provided a cumulative return to investors in the
form of growth in Net Asset Value plus payment of dividends ("the Return") of
60p per ordinary share. Thereafter, the incentive fee, which is payable in cash,
is calculated as 20% of the amount by which the Return in any accounting period
exceeds 7p per share. The incentive fee is exclusive of VAT.
The management agreement may be terminated on 12 months' notice, given at any
time after 21 January 2013. In the opinion of the Directors, the continuing
appointment of the Investment Manager, on the terms agreed, is in the interests
of the shareholders. The Directors are satisfied that the Investment Manager
will continue to manage the Company's investment programme in a way which enable
the Company to achieve its objectives.
4. Other expenses
+----------------------------------------------+--+--------+--+--------+
| | | 2009 | | 2008 |
+----------------------------------------------+--+--------+--+--------+
| | | GBP000 | | GBP000 |
+----------------------------------------------+--+--------+--+--------+
| Directors' remuneration | | 33 | | 33 |
+----------------------------------------------+--+--------+--+--------+
| Fees payable to the Company's Auditor for: | | | | |
+----------------------------------------------+--+--------+--+--------+
| Statutory audit services | | | | |
+----------------------------------------------+--+--------+--+--------+
| - Audit of the Company's Annual Financial | | 12 | | 12 |
| Statements | | | | |
+----------------------------------------------+--+--------+--+--------+
| Other services | | | | |
+----------------------------------------------+--+--------+--+--------+
| - Review of interim information | | 3 | | 2 |
+----------------------------------------------+--+--------+--+--------+
| - Risk review | | - | | 1 |
+----------------------------------------------+--+--------+--+--------+
| Tax services | | | | |
+----------------------------------------------+--+--------+--+--------+
| - Compliance services | | 2 | | 3 |
+----------------------------------------------+--+--------+--+--------+
| Legal and professional fees | | 2 | | - |
+----------------------------------------------+--+--------+--+--------+
| Other expenses | | 77 | | 69 |
+----------------------------------------------+--+--------+--+--------+
| | | 129 | | 120 |
+----------------------------------------------+--+--------+--+--------+
Other services provided by the Company's Auditor related to their review of the
Half-yearly Report and the risk management process.
Tax services provided by the Company's Auditor included the provision of
corporation tax advice.
5. Directors' remuneration
+-----------------------------------------------+--------+--------+
| | 2009 | 2008 |
+-----------------------------------------------+--------+--------+
| | GBP000 | GBP000 |
+-----------------------------------------------+--------+--------+
| D Pinckney | 10 | 10 |
+-----------------------------------------------+--------+--------+
| A Moore | 7 | 8 |
+-----------------------------------------------+--------+--------+
| P Thomas | 8 | 8 |
+-----------------------------------------------+--------+--------+
| C Wood | 8 | 7 |
+-----------------------------------------------+--------+--------+
| Aggregate emoluments | 33 | 33 |
+-----------------------------------------------+--------+--------+
Further details regarding Directors' remuneration are disclosed in the
Directors' Remuneration Report above.
6. Tax
+-----+---------------------------------------------+--------+---+--------+
| | | 2009 | | 2008 |
+-----+---------------------------------------------+--------+---+--------+
| | | GBP000 | | GBP000 |
+-----+---------------------------------------------+--------+---+--------+
| (a) | Tax charge for the year | | | |
+-----+---------------------------------------------+--------+---+--------+
| | Current UK corporation tax: | | | |
+-----+---------------------------------------------+--------+---+--------+
| | Charged to revenue reserve | 53 | | 76 |
+-----+---------------------------------------------+--------+---+--------+
| | Credited to capital reserve | (36) | | (47) |
+-----+---------------------------------------------+--------+---+--------+
| | | 17 | | 29 |
| | | | | |
+-----+---------------------------------------------+--------+---+--------+
| (b) | Factors affecting the tax charge for the | | | |
| | year | | | |
+-----+---------------------------------------------+--------+---+--------+
| | Revenue return before taxation | 429 | | 380 |
| | | | | |
+-----+---------------------------------------------+--------+---+--------+
| | Tax charge calculated on profit before | 90 | | 76 |
| | taxation at the applicable rate of 21% | | | |
| | (2008: 20%) | | | |
+-----+---------------------------------------------+--------+---+--------+
+--------------------------------------------+--+--+-------+--+-------+
| Effect of: | | | | | |
+--------------------------------------------+--+--+-------+--+-------+
| UK dividends not subject to tax | | | (37) | | - |
+--------------------------------------------+--+--+-------+--+-------+
| Capital expenses | | | (36) | | (47) |
+--------------------------------------------+--+--+-------+--+-------+
| | | | 17 | | 29 |
+--------------------------------------------+--+--+-------+--+-------+
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 Company intends to continue to
meet the conditions required to maintain its status as a Venture Capital Trust
for the foreseeable future.
7. Dividends
+---------------------------------------------+--------+--+--------+
| | 2009 | | 2008 |
+---------------------------------------------+--------+--+--------+
| | GBP000 | | GBP000 |
+---------------------------------------------+--------+--+--------+
| Amounts recognised as distributions to | | | |
| equity holders in the year: | | | |
+---------------------------------------------+--------+--+--------+
| Previous year's final dividend of 1.40p per | 156 | | 84 |
| ordinary share (2008: 0.75p) | | | |
+---------------------------------------------+--------+--+--------+
| Current year's interim dividend of 1.50p | 168 | | 112 |
| per ordinary share (2008: 1.00p) | | | |
+---------------------------------------------+--------+--+--------+
| | 324 | | 196 |
+---------------------------------------------+--------+--+--------+
The Directors recommend a final dividend of 1.50p per share (2008: 1.40p) to be
paid on 14 July 2009 to all shareholders on the register as at the close of
business on 12 June 2009. The proposed final dividend is subject to approval by
the shareholders at the AGM and has not been included as a liability in these
Financial Statements.
Subject to approval of the final dividend, the total dividend in respect of the
financial year is set out below:
+---------------------------------------------+---------+--+--------+
| | 2009 | | 2008 |
+---------------------------------------------+---------+--+--------+
| | GBP000 | | GBP000 |
+---------------------------------------------+---------+--+--------+
| Interim dividend for the year ended 28 | | | |
| February 2009 | | | |
+---------------------------------------------+---------+--+--------+
| of 1.50p per ordinary share (2008: 1.00p) | 168 | | 112 |
+---------------------------------------------+---------+--+--------+
| Proposed final dividend for the year ended | | | |
| 28 February 2009 | | | |
+---------------------------------------------+---------+--+--------+
| of 1.50p per ordinary share (2008: 1.40p) | 168 | | 156 |
+---------------------------------------------+---------+--+--------+
| | 336 | | 268 |
+---------------------------------------------+---------+--+--------+
8. Return per ordinary share
The total return per ordinary share is based on the net revenue after taxation
of GBP393,357 (2008: GBP117,560) and the weighted average number of shares in
issue during the year of 11,172,954 (2008: 11,172,954).
The basic revenue return per ordinary share is based on the net revenue from
ordinary activities after taxation of GBP375,516 (2008: GBP303,819) and the
weighted average number of shares in issue during the year of 11,172,954 (2008:
11,172,954).
The net capital gain per ordinary share is based on the net gain from ordinary
activities after taxation of GBP17,841 (2008: net loss of GBP186,259) and the
weighted average number of shares in issue during the year of 11,172,954 (2008:
11,172,954).
There is no difference between the basic return per ordinary share and the
diluted return per ordinary share because no dilutive financial instruments have
been issued.
9. Investments
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | | Mezzanine | | | Mezzanine | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | Shares | loan | Total | Shares | loan | Total |
| | | | | | | stock | | | stock | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Opening position | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Opening cost | | | | | 1,014 | 299 | 1,313 | - | 169 | 169 |
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Opening gains | | | | | - | - | - | - | - | - |
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Opening fair value | | | | | 1,014 | 299 | 1,313 | - | 169 | 169 |
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| During the year | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Purchases at cost | | | | | 4,309 | 2,325 | 6,634 | 1,014 | 130 | 1,144 |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Gains | | | | | 153 | - | 153 | - | - | - |
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Closing fair value at | | | | | 5,476 | 2,624 | 8,100 | 1,014 | 299 | 1,313 |
| year end | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Closing position | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Closing cost | | | | | 5,323 | 2,624 | 7,947 | 1,014 | 299 | 1,313 |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Closing gains | | | | | 153 | - | 153 | - | - | - |
| | | | | | | | | | | |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
| Closing fair value | | | | | 5,476 | 2,624 | 8,100 | 1,014 | 299 | 1,313 |
+-----------------------+--+--+--+-------+--------+-----------+--------+---------+-----------+---------+
The shares held by the Company are in unquoted companies. The Investment
Manager's Report, above, provides details in respect of the Company's share
holding in each investment, together with details of mezzanine loans issued.
The investments acquired during the year are detailed in the Investment
Manager's Report.
There were no costs incurred by the Company on acquisition of investments. No
impairment provisions have been made in respect of investments.
The Company had a shareholding of 20% or more in each of the investee companies
set out below, which are presented with their respective total assets and
liabilities as at the balance sheet date, and total revenues and profits for the
year ended 28 February 2009. Where companies have only been trading for a short
period, revenue and profits have not been presented.
+--------------------+--+-----------+--------+-------------+---------+---------------+
| | | Ownership | Assets | Liabilities | Revenue | Profit/(Loss) |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Investment | | interest | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Firefly Energy | | 25.00% | 2,483 | 2,481 | 45 | (225) |
| Limited | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Achairn Energy Ltd | | 20.20% | 8,752 | 7,572 | 32 | 19 |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Redimo LFG Limited | | 25.00% | 19,989 | 16,077 | 1,722 | 788 |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Spurlens Rig Wind | | 30.00% | 252 | - | 2 | - |
| Limited | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Redeven Energy | | 30.00% | 301 | 300 | 1 | - |
| Limited | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Osspower Limited | | 25.00% | 575 | - | - | (10) |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| RPS Dargan Road | | 25.00% | 1,900 | - | - | - |
| Ltd | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Sandsfield Heat & | | 22.45% | 1,796 | - | - | - |
| Power | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
| Twinwoods Heat & | | 2,000 | - | - | - | - |
| Power Ltd | | | | | | |
+--------------------+--+-----------+--------+-------------+---------+---------------+
10. Trade and other receivables
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| | | | | | | | | 2009 | | 2008 |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| | | | | | | | | GBP000 | | GBP000 |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| Non-current | | | | | | | | | | |
| assets | | | | | | | | | | |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| Accrued interest | | | | | | | | 139 | | 36 |
| income | | | | | | | | | | |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| | | | | | | | | 139 | | 36 |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| Current assets | | | | | | | | | | |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| Accrued interest | | | | | | | | 24 | | 10 |
| income | | | | | | | | | | |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| Prepayments | | | | | | | | 76 | | 3 |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
| | | | | | | | | 100 | | 13 |
+-------------------+------+---------+--------+--------+----+---+------+---------+--------+--------+
Included in accrued interest income is mezzanine loan stock interest totalling
GBP138,680 (2008: GBP36,253) which is due after more than one year, which
represents non-current assets. The Directors consider that the carrying amount
of trade and other receivables approximates to fair value.
11. Cash and cash equivalents
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| | | | | | | Treasury | | | Treasury | |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| | | | | | Cash | Bills | Total | Cash | Bills | Total |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| | | | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| | | | | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| Opening balance | | | | | 202 | 8,975 | 9,177 | 267 | 10,149 | 10,416 |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| Net increase/(decrease) | | | | | 436 | (7,355) | (6,919) | (65) | (1,174) | (1,239) |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
| Closing balance | | | | | 638 | 1,620 | 2,258 | 202 | 8,975 | 9,177 |
+--------------------------+---+---+---+---+--------+----------+---------+--------+----------+----------+
Cash and cash equivalents comprise bank balances and cash held by the Company
including UK treasury bills. The carrying amount of these assets approximates to
fair value.
12. Trade and other payables
+----------------+----+------+------+-----+---+---+----+--------+--------+
| | | | | | | | | 2009 | 2008 |
+----------------+----+------+------+-----+---+---+----+--------+--------+
| | | | | | | | | GBP000 | GBP000 |
+----------------+----+------+------+-----+---+---+----+--------+--------+
| Corporation | | | | | | | | 17 | 29 |
| tax | | | | | | | | | |
+----------------+----+------+------+-----+---+---+----+--------+--------+
| Accruals | | | | | | | | 27 | 27 |
+----------------+----+------+------+-----+---+---+----+--------+--------+
| | | | | | | | | 44 | 56 |
+----------------+----+------+------+-----+---+---+----+--------+--------+
The Directors consider that the carrying amount of trade and other payables
approximates to fair value.
13. Share capital
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| | | | | | | | | 2009 | | 2008 |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| | | | | | | | | GBP000 | | GBP000 |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| Authorised | | | | | | | | | | |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| 30,000,000 ordinary shares of 25p each | | | | | | | | 7,500 | | 7,500 |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| Allotted, called up and fully paid | | | | | | | | | | |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
| 11,172,954 ordinary shares of 25p each | | | | | | | | 2,793 | | 2,793 |
+-----------------------------------------+--+---+---+---+--+--+--+---------+---+---------+
At the year end, the Company had one class of ordinary shares which carry no
right to fixed income. There was no movement in share capital during the years
ended 28 February 2009 and 29 February 2008.
14. Reserves
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| | | | | | | | | Capital | Capital | |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| | | | | | | | Special | reserve | reserve | Revenue |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| | | | | | | | reserve | realised | unrealised | reserve |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| | | | | | | | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| As at 1 March 2008 | | | | | | | 7,803 | (359) | - | 246 |
| | | | | | | | | | | |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| (Loss)/profit after tax | | | | | | | - | (135) | 153 | 376 |
| | | | | | | | | | | |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| Dividends paid during the year | | | | | | | - | - | - | (324) |
| | | | | | | | | | | |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
| As at 28 February 2009 | | | | | | | 7,803 | (494) | 153 | 298 |
+--------------------------------+--+--+--+--+--+--+---------+----------+------------+---------+
The realised capital reserve and the revenue reserve are distributable reserves.
The special reserve is also distributable and can be used to fund buy-backs of
ordinary shares as and when it is considered by the Board to be in the interests
of the shareholders.
15. Net asset value per share
The calculation of net asset value per share as at 28 February 2009 is based on
net assets of GBP10,552,995 (2008: GBP10,483,653) divided by the 11,172,954
(2008: 11,172,954) ordinary shares in issue at that date.
16. Post balance sheet events
After the period end, the Company has invested a further GBP50,000 in Small
Hydro Company Limited, GBP66,000 in Redeven Energy Limited and GBP6,000 in
Witton Wind Farm Limited. For further details refer to the Investment Manager's
Report.
17. Financial instruments and risk management
The Company's financial instruments comprise investments in unquoted companies,
Government securities and cash. All are designated as "fair value through profit
or loss". The main purpose of these financial instruments is to generate revenue
and capital appreciation for the Company's operations.
The Company has not entered into any derivative transactions and has no
financial asset or liability for which hedge accounting has been used.
The main risks arising from the Company's financial instruments are interest
rate and investment risk. The Board reviews and agrees policies for managing
each of these risks, and they are summarised below. These policies have remained
unchanged since the beginning of the financial year.
Interest rate risk profile of financial assets and financial liabilities
Financial assets
+---------------------------------+------+----------+-------------+----------+------------+
| | | Held | | | |
| | | at | | | |
+---------------------------------+------+----------+-------------+----------+------------+
| | | 28 | | Weighted | Weighted |
| | | February | | | |
+---------------------------------+------+----------+-------------+----------+------------+
| | | 2009 | | average | average |
| | | | | | period |
+---------------------------------+------+----------+-------------+----------+------------+
| | | GBP000 | Interest | interest | to |
| | | | rate | rate | maturity |
+---------------------------------+------+----------+-------------+----------+------------+
| At fair value through profit or | | | | | |
| loss: | | | | | |
+---------------------------------+------+----------+-------------+----------+------------+
| Ordinary shares | | 5,476 | - | - | - |
+---------------------------------+------+----------+-------------+----------+------------+
| Mezzanine loan stock | | 2,624 | 11%-13.5% | 12.20% | 16 years |
+---------------------------------+------+----------+-------------+----------+------------+
| UK treasury bills | | 1,620 | 3.07%-5.42% | 4.67% | 86 days |
+---------------------------------+------+----------+-------------+----------+------------+
| Loans and receivables: | | | | | |
+---------------------------------+------+----------+-------------+----------+------------+
| Cash | | 638 | 2.76% | 2.76% | - |
+---------------------------------+------+----------+-------------+----------+------------+
| Accrued interest income | | 163 | - | - | - |
+---------------------------------+------+----------+-------------+----------+------------+
- Ordinary share capital investments have no interest rate attached to them.
- The mezzanine loan stock bears interest at fixed rates of 11%, 12.5%, 13%
or 13.5% per annum.
- The interest rate described for UK treasury bills is the predetermined
yield.
It is estimated that a one percentage point increase or decrease in interest
rates would have increased or decreased profit before tax for the year by
GBP69,218 or 16.9% (2008: GBP102,116 or 69.4%) and increase or decreased net
asset value by GBP54,682 or 0.52% (2008: GBP81,693 or 0.78%). The analysis
assumes a change in weighted average interest rate applied to UK treasury bills
and cash held on deposit over the year and a tax effect based on the tax rate
that applied in the year. The risk from future fluctuations in interest rate
movements should be mitigated by the Company's intention to complete its
investment strategy and to hold the majority of its investments in instruments
which are not exposed to market changes in interest rates. Interest income
earned from mezzanine loan stock is not subject to movements resulting from
market interest rate fluctuations as the rates are fixed, therefore this income
presents a low interest rate risk profile. However, interest earned from
mezzanine loan stock remains exposed to fair value interest rate risk when
bench-marked against market rates.
Financial liabilities
The Company has no guarantees or financial liabilities other the accruals.
Currency exposure
All financial assets and liabilities are held in sterling, hence there is no
foreign currency exchange rate exposure.
Borrowing facilities
The Company has no committed borrowing facilities as at 28 February 2009 (2008:
GBPnil).
Investment risk
As a VCT, it is the Company's specific business to evaluate and control the
investment risk in its portfolio of unquoted companies, the details of which are
discussed in the Investment Manager's Report.
Investment price risk
Investment price risk is the risk that the fair value of future investment cash
flows will fluctuate due to factors specific to an investment. The Company aims
to mitigate the impact of investment price risk by adhering to its investment
policy of risk diversification, as described in the Investment Manager's Report.
The sensitivity of the ordinary shares held by the Company to a ten percentage
point increase or decrease in equity valuation would be an increase or decrease
in profit before tax of GBP547,632 or 133.4% (2008: GBP101,390 or 68.9%) and an
increase or decrease in the net asset value of the Company of the same amount or
5.2% (2008: 0.97%). A 10% variable is considered to be a suitable factor by
which to demonstrate a potential change in fair value over the course of a year.
The analysis assumes no tax effect applied on the gain or loss.
Liquidity risk
Due to the nature of the Company's qualifying investments, it is not possible to
liquidate investments in ordinary shares, preference shares and mezzanine loan
stock easily. The Company's holdings in UK treasury bills can be liquidated at
two days' notice. The main cash outflows are made for investments, which are
within the control of the Company. In this respect, the Company may be regarded
as subject to a low level of liquidity risk.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with the
Company. The Company is exposed to credit risk through its receivables,
investments in mezzanine loan stock and through cash held on deposit with banks.
The Investment Manager evaluates credit risk on mezzanine loan stock prior to
making investment as well as monitoring ongoing exposures. Mezzanine loan stock
have a first fixed charge or a fixed and floating charge over the same assets of
the investee company in order to mitigate the gross credit risk. The Investment
Manager regularly reviews management accounts from investee companies and
generally appoints directors to sit on their boards in order to closely identify
and manage the credit risk.
Cash is held on deposit with banks which are AA rated financial institutions.
Consequently, the Directors consider that the risk profile associated with cash
deposits is low and the carrying value in the Financial Statements approximates
to fair value.
The maximum credit risk of the Company is GBP5.0 million (2008: GBP9.5 million).
At the year end, no debt was overdue for payment to the Company nor had been
impaired. The expected timing of receipt of amounts receivable is presented
below:
+------------------------------------+--+---+---+---+---+---+--------+--------+---------+--------+
| | | | | | | | | Within | Between | Over |
+------------------------------------+--+---+---+---+---+---+--------+--------+---------+--------+
| | | | | | | | Total | 1 | 1 | 2 |
| | | | | | | | | year | and | years |
| | | | | | | | | | 2 | |
| | | | | | | | | | years | |
+------------------------------------+--+---+---+---+---+---+--------+--------+---------+--------+
| | | | | | | | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------+--+---+---+---+---+---+--------+--------+---------+--------+
| Accrued interest income | | | | | | | 163 | 24 | 123 | 16 |
+------------------------------------+--+---+---+---+---+---+--------+--------+---------+--------+
18. Contingencies, guarantees and financial commitments
On 31 July 2006, the Company registered a charge over its shares in Craig Wind
Farm Limited to Alliance & Leicester Commercial Bank plc as security for a
senior loan facility of GBP7.6 million raised by Craig Wind Farm Limited to
finance the construction costs of the wind farm. The liability of the Company
under this charge of shares is limited to the value of the Company's investment
in shares of Craig Wind Farm Limited.
On 2 April 2008, the Company undertook a commitment to Alliance & Leicester
Commercial Bank plc to subscribe for further equity in Redimo LFG Limited by
signing and delivering an application for 2,500 shares, for a consideration of
GBP250,000, on or before 31 December 2008. The Company satisfied this commitment
on 19 December 2008. On 2nd April 2008, the Company registered a charge over its
shares in Redimo LFG Limited to Alliance & Leicester Commercial Bank plc as
security for a senior loan facility of GBP16.9 million raised by Redimo LFG
Limited. The charge includes all existing and future shares that the Company
owns in Redimo LFG Limited and therefore includes the 2,500 shares the company
acquired on 19 December 2008 and the further 2,000 shares the Company acquired
on 18 February 2009. The liability of the Company under this charge of shares is
limited to the value of the Company's investment in shares of Redimo LFG
Limited.
On 22 October 2008, the Company registered a charge over its shares in Achairn
Energy Limited to Alliance & Leicester Commercial Bank plc as security for a
senior loan facility of GBP6.9 million raised by Achairn Energy Limited to
finance the construction costs of the wind farm. The liability of the Company
under this charge of shares is limited to the value of the Company's investment
in shares of Achairn Energy Limited.
On 28 November 2008, the Company registered a charge over its shares in A7
Lochhead Limited to Alliance & Leicester Commercial Bank plc as security for a
senior loan facility of GBP7.8 million raised by A7 Lochhead Limited to finance
the construction costs of the wind farm. The liability of the Company under this
charge of shares is limited to the value of the Company's investment in shares
of A7 Lochhead Limited.
On 28 April 2008, the Company registered a charge over its shares in PBM Power
Limited to Alliance & Leicester Commercial Bank plc as security for a senior
loan facility of GBP3.8 million raised by PBM Power Limited to finance the
construction costs of the wind farm. The liability of the Company under this
charge of shares is limited to the value of the Company's investment in shares
of PBM Power Limited.
As at the year end the Company had also committed to make a follow-on investment
of GBP66,000 to Redeven Energy Limited and has provided committed shareholder
loan facilities to the following companies that are partly drawn:
I. The Small Hydro Company Limited. GBP192,000 facility of which GBP50,000 is
drawn
II. Kettering East Energy Limited. GBP250,000 facility of which GBP125,000
is drawn
The Company had no other contingencies, financial commitments or guarantees as
at 28 February 2009.
19. Related party transactions
The Company retains as its Investment Manager Climate Change Capital Limited, a
subsidiary of Climate Change Holdings Limited, which is a subsidiary of Climate
Change Capital Group Limited. Details of the agreement with the Investment
Manager are set out in note 3 of the Financial Statements. During the year, the
Company paid GBP307,705 to the Investment Manager (2008: GBP310,757) and was
refunded GBP57,721 in respect of VAT recovered (as explained in note 3 of the
Financial Statements). The amount paid by the Company to the Investment Manager
included a prepayment of GBP21,852 (2008: GBPnil).
Climate Change Capital Limited is also the Investment Manager of Ventus VCT plc
and Ventus 2 VCT plc; Ventus 3 VCT plc holds certain of its investments in
common with these companies.
The investee companies in which the Company has a shareholding of 20% or more,
as identified in note 9, are related parties. The aggregate balances at the
balance sheet date and transactions with these companies during the year are
summarised below.
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| | | | | | | | | 2009 | | 2008 |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| | | | | | | | | GBP000 | | GBP000 |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Balances | | | | | | | | | | |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Investments - shares | | | | | | | | 4,112 | | 630 |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Investments - mezzanine loan stock | | | | | | | | 1,369 | | 130 |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Accrued interest income | | | | | | | | 82 | | - |
| | | | | | | | | | | |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Transactions | | | | | | | | | | |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Mezzanine loan stock interest income | | | | | | | | 82 | | - |
| | | | | | | | | | | |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
| Dividend income | | | | | | | | 175 | | - |
| | | | | | | | | | | |
+---------------------------------------+--+---+--+--+--+--+----+---------+---+--------+
20. Controlling party
In the opinion of the Directors there is no immediate or ultimate controlling
party.
21. Management of capital
The Company's objective when managing capital is to safeguard the Company's
ability to continue as a going concern in order to continue to provide returns
for Shareholders.
The requirements of the Venture Capital Trust regulations and the fact that the
Company has a policy of not having any borrowings, means that there is limited
scope to manage the Company's capital structure. However, to the extent to which
it is possible, the Company can maintain or adjust its capital structure by
adjusting the amount of dividends paid to shareholders, purchasing its own
shares or issuing new shares.
The Board considers the Company's net assets to be its capital.
The Company does not have any externally imposed capital requirements.
There has been no change in the objectives, policies or processes for managing
capital from the previous year.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the AGM of Ventus 3 VCT plc will be held at 12.30pm
on Wednesday, 1 July 2009 at Climate Change Capital's office at 3 More London
Riverside, London, SE1 2AQ for the purpose of considering and, if thought fit,
passing the following Resolutions (of which, Resolutions 1 to 8 will be proposed
as Ordinary Resolutions and Resolutions 9 and 10 will be proposed as Special
Resolutions):
Ordinary Business
1. To receive the Company's audited Annual Report and Financial Statements for
the year ended 28 February 2009.
2. To declare a final dividend of 1.50p per ordinary share in respect of the
year ended 28 February 2009.
3. To approve the Directors' Remuneration Report for the year ended 28 February
2009.
4. To re-elect Mr Paul Thomas as a Director of the Company.
5. To re-elect Mr David Pinckney as a Director of the Company.
6. To appoint PKF (UK) LLP as Auditor of the Company to hold office until the
conclusion of the next general meeting at which accounts are laid before the
Company.
7. To authorise the Directors to determine the remuneration of the Auditor.
8. (i) That the Directors be and are hereby generally and unconditionally
authorised in accordance with section 80 of the Companies Act 1985 (as amended)
(the "Act") to exercise all the powers of the Company to allot relevant
securities (as defined in that section) up to an aggregate nominal amount of
GBP931,079 (3,724,318 shares of 25p each) during the period commencing on the
passing of this resolution and expiring on the earlier of the date of the AGM of
the Company to be held in 2010 and the date which is 18 months after the date on
which this resolution is passed (unless the authority is previously revoked,
varied or extended by the Company in general meeting) but so that this authority
shall allow the Company to make, before the expiry of this authority, offers or
agreements which would or might require relevant securities to be allotted after
such expiry; and
(ii) That all previous authorities given to the Directors in accordance
with section 80 of the Act be and they are hereby revoked, provided that such
revocation shall not have retrospective effect.
Special Resolutions
9. The Directors be and are hereby empowered pursuant to Section 95(1) of the
Act to allot or make offers or agreements to allot equity securities (which
expression shall have the meaning ascribed to it in Section 94(2) of the Act)
for cash pursuant to the authority given in accordance with Section 80 of the
Act by the Resolution 8 set out in this notice of AGM as if section 89(1) of the
Act did not apply to such allotment provided that this power shall expire on the
date falling 18 months after the date of the passing of this resolution and
provided further that this power shall be limited to the allotment and issue of
equity securities in connection with:
(i) the allotment of equity securities with an aggregate nominal value of up to
but not exceeding GBP279,324, representing 1,117,295 shares or 10% of the issued
ordinary share capital, where the proceeds of the allotment are to be used in
whole or in part to purchase the Company's Ordinary shares, and
(ii)the allotment of equity securities with an aggregate nominal value of up to
but not exceeding GBP139,662, representing 558,648 or 5% of the issued ordinary
share capital of the Company.
10. That the Company be and is hereby generally and unconditionally authorised
for the purpose of section 166 of the Act to make market purchases (as defined
in section 163(3) of the Act) of ordinary shares of 25p each in the capital of
the Company ("Ordinary Shares") provided that:
(i) The maximum aggregate number of Ordinary Shares hereby authorised to be
purchased is an amount equal to 1,674,825 shares, representing 14.99% of the
issued ordinary share capital of the Company;
(ii) The minimum price which may be paid for an Ordinary Share is 25p per
share;
(iii) The maximum price, exclusive of any expenses, which may be paid for an
Ordinary Share is an amount equal to the higher of; (a) 105% of the average of
the middle market prices shown in the quotations for an ordinary share in The
London Stock Exchange Daily Official List for the five business days immediately
preceding the day on which that ordinary share is purchased; and (b) the amount
stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation 2003;
(iv) The authority hereby conferred shall (unless previously renewed or revoked)
expire on the earlier of the AGM of the Company to be held in 2010 and the date
which is 18 months after the date on which this resolution is passed; and
(v) The Company may make a contract or contracts to purchase its own Ordinary
Shares under this authority before the expiry of the authority which will or may
be executed wholly or partly after the expiry of the authority, and may make a
purchase of its own Ordinary Shares in pursuance of any such contract or
contracts as if the authority conferred hereby had not expired.
By order of the Board
The City Partnership (UK) Limited
Secretary
Note:
The Annual Report and Financial Statements will be posted to shareholders
shortly and will also be available on
the Company's website
www.ventusvct.com. Copies may be obtained during normal business hours from
the
Company's registered office, The Registry, 34 Beckenham Road, Beckenham,
Kent, BR3 4TU.
By order of the Board
David Pinckney
Chairman
27 May 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPSPADSNEEE
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