Gresham House
Renewable Energy
VCT1 plc
Annual Report and Accounts for the year
ended 30 September 2024
The total generation capacity of renewable energy
projects co-owned by Gresham House Renewable
Energy VCT1 plc (VCT and together the VCTs) and
Gresham House Renewable Energy VCT2 plc (VCT2)
during the financial year was 20.3MWp of solar and
1.0MWp of wind. The renewable energy assets in the
portfolio of the VCT and VCT2 generated 18,993MWh
of electricity over the financial year, sufficient to
meet the annual electricity consumption of c. 7,035
homes
1
. The Investment Adviser estimates that
the carbon dioxide savings achieved by generating
this output from renewable energy sources versus
gas-fired power stations, are equivalent to 8,300
tonnes
2
of carbon dioxide emissions saved.
Overview
01 Shareholder Information
02 Financial Highlights, Directors and
Investment Adviser
04 Chairman’s Statement
06 Investment Adviser’s Report
11 Review of Investments
18 Strategic Report
26 Sustainable Investing
29 Section 172
Governance
31 Report of the Directors
34 Directors’ Remuneration Report
37 Corporate Governance
41 Independent Auditor’s Report
Financial Statements
46 Income Statement
47 Balance Sheet
48 Statement of Changes in Equity
49 Cash Flow Statement
50 Notes to the Accounts
64 Company Information
For more information visit
https://greshamhouse.com/real-assets
Gresham House Renewable Energy VCT1 plc is a Venture
Capital Trust established under the legislation introduced
in the Finance Act 1995. Following the adoption of the new
Investment Policy from 13 July 2021 (the New Investment
Policy), the VCT’s principal objective is to manage the VCT
with the intention of realising the sale or monetisation
otherwise of all remaining assets in the portfolio in a
prudent manner consistent with the principles of good
investment management and with a view to returning value to
Shareholders in an orderly manner, whilst protecting the tax
position of Shareholders, hereafter being defined as Managed
Wind Down.
The VCT will pursue its investment objective by effecting
an orderly realisation of its assets in a manner that seeks to
achieve a balance between maximising the value received
from those assets and making timely returns of capital to
Shareholders. This process might include sales of individual
assets or running of the portfolio in accordance with the
existing terms of the assets, or a combination of both.
The detailed investment policy adopted to achieve
the investment objectives is set out in the VCT’s
Strategic Report of the Annual Report on
pages 18 to 30.
Investment Objectives
1 Assuming an “all non-renewable fuels” emissions statistic of 437tCO2/GWh of electricity supplied, BEIS statistics July 2024, Digest of UK Energy Statistics, Table 5.14 (“Estimated carbon dioxide
emissions from electricity supplied”). “Carbon avoided” calculated using Renewable UK methodology: Carbon reduction is calculated by multiplying the total amount of electricity generated by solar
and wind per year by the number of tonnes of carbon which fossil fuels would have produced to generate the same amount of electricity.
2 Assuming an average annual electricity usage per household of 2.7MWh, as quoted by OFGEM May 2023. “Homes powered” calculated using Renewable UK methodology: MWh divided by average
annual domestic electricity consumption. Household power consumption dropped in 2023 due to high power prices.
Financial
StatementsGovernanceOverview
Share price
The VCT’s share prices can be found on various
financial websites with the following TIDM/
EPIC codes:
Ordinary
Shares ‘A’ Shares
TIDM/EPIC codes GV1O GV1A
Latest share price
(21January 2025)
35.0p
per share
5.05p
per share
Selling shares
The Board has decided that the VCT will not
be buying shares for the foreseeable future as
highlighted in the Interim Results, as the VCT
wishes to conserve such cash as it generates
for the Managed Wind Down of the VCT and the
payment of dividends.
Financial calendar
18 March 2025 Annual General Meeting
June 2025 Announcement of half
yearly financial results
Dividends
Dividends will be paid by the registrar on
behalf of the VCT. Shareholders who wish
to have dividends paid directly into their
bank account, rather than by cheque to their
registered address, and did not complete
these details on their original application form
can, if they have a UK bank account, sign up
for this service on Signal Shares (by clicking
on ‘your dividend options’ and following the
on screen instructions) or by contacting the
Customer Support Centre. Signal Shares is a
secure online site where you can manage your
shareholding quickly and easily.
MUFG Corporate Markets (formerly called
Link Group) Customer Support Centre can be
contacted:
Æ by phone on UK – 0371 664 0300 (Calls are
charged at the standard geographic rate
and will vary by provider. Calls outside
the United Kingdom will be charged at
the applicable international rate. Lines
are open between 09:00 - 17:30, Monday
to Friday excluding public holidays in
England and Wales).
Æ By email – vcts@cm.mpms.mufg.com
Æ By post - MUFG Corporate Markets,
Central Square, 29 Wellington Street,
Leeds, LS1 4DL
Notification of change of address
Communications with Shareholders are
mailed to the registered address held on
the share register. In the event of a change
of address or other amendment this should
be notified to the VCT’s registrar, MUFG
Corporate Markets (formerly called Link
Group), under the signature of the registered
holder.
Other information for Shareholders
Up-to-date VCT information (including
financial statements, share prices and
dividend history) is available on the Investment
Adviser’s website at:
https://greshamhouse.com/real-assets
If you have any queries regarding your
shareholding in Gresham House Renewable
Energy VCT1 plc, please contact the registrar
on the above number or email.
Shareholder
Information
01
Gresham House Renewable Energy VCT1 plc
Financial Highlights*
Net asset value per
Ordinary Share (pence)
(as at 30 September 2024)
NAV Total return per Ordinary
Share and ‘A‘ Share (pence)
(as at 30 September 2024)
121.9p
38.7p
121.9p
131.3p
Sep 24
Sep 23
38.7p
55.6p
Sep 24
Sep 23
Cumulative Dividends paid
(pence)
(as at 30 September 2024)
83.1p
83.1p
75.6p
Sep 24
Sep 23
VCT1 Share Price Total Return
Total Return with dividends reinvested
The graph below represents the VCT’s performance over the reporting
periods since the VCT’s Ordinary Shares and ‘A’ Shares were first listed
on the London Stock Exchange, and shows share price total return
(share price plus cumulative dividends paid) and net asset value total
return (net asset value plus cumulative dividends paid) on a dividends
reinvested basis, as per the AIC method.
Gresham House Renewable Energy VCT1 plc NAV Total Return
Gresham House Renewable Energy VCT1 plc Share Price Total Return
Pence (p)
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
Dec-
10
Dec-
11
Dec-
12
Dec-
13
Dec-
14
Dec-
15
Dec-
16
Dec-
17
Dec-
18
Dec-
19
Dec-
20
Dec-
21
Dec-
23
Dec-
22
Cash Returned to Shareholders by date of investment
The chart below shows the cash returned to shareholders based on the
subscription price and the income tax reclaimed on subscription.
0
20
40
60
80
100
120
140
2011
Ordinary
2012
Ordinary
2014
Ordinary
2018
Ordinary
2019
Ordinary
Cash invested (p)
Income tax reclaim (p)
Cumulative dividends (p)
Pence (p)
* The above financial highlights are considered to be Alternative Performance
Measures, further details on how these are calculated have been included in
the Strategic Report under the Key Performance Indicators section.
Net asset value per
‘A’ Share (pence)
(as at 30 September 2024)
0.1p
0.1p
0.1p
Sep 24
Sep 23
02
Gresham House Renewable Energy VCT1 plc
Giles Clark has worked on solar projects
across Europe since 2006 and on UK
projects since 2010. In 2006, he co-
founded SunRay Renewable Energy, where
he was CFO, developing large utility scale
solar projects across Southern Europe.
SunRay had built a pipeline of 1.4GWp
of projects by the time it was acquired
by SunPower Corporation for $277mn
in 2010. From 2013 to 2016 Giles was a
founding shareholder and chairman of
Solstice Renewables which developed
and sold 100 MWp of ground mounted
solar farms in the UK.
From 2013 to 2017, Giles was the founder
and CEO of Primrose Solar which
acquired and built 253MW of ground
mounted solar farms in the UK. The
completed projects were sold in 2016 to
Bluefield, Greencoat and Equitix.
Giles is also a Director of Altano Energy
SLU and of AlSi Consulting Limited.
Giles was appointed as Director of
National Energy Holdings Limited in
December 2023. Giles has a BA in PPE
from Oxford and an MBA from the London
Gill Nott (Chairman) spent the majority
of the first 27 years of her career working
in the energy sector. In 1994 she became
CEO of ProShare.
Due to her work in the retail savings
sector, she spent six years on the Board
of the Financial Services Authority from
1998 to 2004.
Gill has held a portfolio of Non-Executive
positions, including roles with a number
of VCTs and other closed-end funds, over
the last 15 years.
She was also a board member of the AIC
from 2004 until 2014.
She is currently chairman of
PremierMiton Global Renewables Trust
plc, PMGR Securities 2025 plc and
David Hunter qualified as a chartered
accountant with PWC before joining 3i,
the FTSE100 listed private equity group
where he became Managing Director of
Investment Management responsible for
the entire UK portfolio of assets.
David is also a board member at Better
Society Capital where he chairs the Audit
Committee.
In the not-for-profit area, David is
Treasurer of Motability Foundation – the
charity & endowment which oversees the
disabled car scheme.
Past Non-Executive roles in the
investment area have included chairing
UCL Business, membership of Bridges
Ventures’ Investment Committee and
chairman of the Audit Committee of
one of the Baronsmead family of listed
investment companies
Directors
In December 2023, Gresham House plc was
acquired by Searchlight Capital Partners
L.P. Following the acquisition, Gresham
House plc delisted from the London Stock
Exchange on 20 December 2023, to become
a privately owned company. The acquisition
has had a minimal impact on the Company
and business is continuing as usual. For
further information please visit the website
link: https://greshamhouse.com/about/.
Gresham House Asset Management
Limited (GHAM or Gresham House) is the
Investment Adviser to the VCT and Gresham
House Renewable Energy VCT2 plc. GHAM
is owned by Gresham House Limited, a
specialist investment manager providing
funds, direct investments, and tailored
investment solutions, including co-investment
across a range of highly differentiated
alternative investment strategies. GHAM’s
expertise includes strategic public equity
and private assets, forestry, renewable
energy, housing, and infrastructure.
Investment Adviser
All Directors are Non-Executive and all Directors are independent of the Investment Adviser.
03
Gresham House Renewable Energy VCT1 plc
Additional
InformationGovernanceOverview
I am pleased to present the Annual
Report of Gresham House Renewable
Energy VCT1 plc (VCT) for the year
ended 30 September 2024.
Chairman’s
Statement
Gill Nott
Chairman
Following the results of the continuation vote
in July 2021, and therefore the decision to
enter a Managed Wind Down (see Investment
Objectives on the inside front cover),
the Board together with the Investment
Adviser has continued, throughout the year
under review, to work towards realising
the Company’s portfolio of assets.
Following the sale of two ground
mounted solar sites and approximately
1,600 commercial and residential solar
installations to Downing Renewables &
Infrastructure Trust plc in April 2023, the
Board has continued to seek an acquirer for
the remaining solar assets in the portfolio
(Apollo assets), and a small portfolio of
micro wind assets (the Transaction). The
Board appointed Jones Lang LaSalle (JLL)
in late 2023 to assist with this phase of the
Managed Wind Down process. The assets
continue to be managed by the Investment
Adviser with the focus on delivering the
best possible yield whilst minimising
costs ahead of the sale process. The
Investment Adviser has also been diligently
supporting the Boards of the VCTs and JLL
in progressing the ongoing sale process.
A number of non-binding offers had been
received for the Apollo assets by the date
of signing of the half-yearly report for the
six months ended 31 March 2024 at the
end of June 2024. JLL, the Boards of both
VCTs and the Investment Adviser have
continued to engage with the bidders to
clarify certain aspects of the offers in
the second half of the financial year.
As of writing, good progress is being made
towards the conclusion of the transaction
but until the sale completes, there is no
certainty. The VCT Boards current view
is that the Transaction has a reasonable
prospect of completion by the late spring of
this year. The technical performance of the
Apollo portfolio remains positive following
maintenance and repowering works carried
out. However, given the age of the portfolio,
further technical maintenance has been
necessary during the second half-year which
has impacted generation. Total revenue was
also affected by poor irradiation, resulting
in a shortfall for the whole portfolio of 4.5%,
4.1% for the solar assets, to budget in the six
month period ended 30 September 2024.
In determining a fair value for the Company’s
portfolio of assets, the Board has considered
market conditions and the valuation metrics
applied by other similar listed renewable
energy funds when setting the Company’s
Net Asset Value (NAV). In respect of the
financial year ended 30 September
2024, a firm offer for the Company’s
assets was received which is at a price
that the Board believes reflects the best
outcome achievable for shareholders. The
Company’s NAV has therefore been set at
a level consistent with that transaction,
albeit excluding associated sale costs (as
required by accounting standards), due to
the continuing poor market conditions for
realising this type of mature solar asset.
At the year end, the Company’s NAV per
‘pair’ of shares (one Ordinary Share and one
‘A’ Share) was 38.8p compared to 55.7p at
30 September 2023. This reduction is due
to the payment of dividends totalling 7.5p
per Ordinary Share mainly generated out
of the proceeds from the partial sale in
April 2023, and also the current challenging
market conditions being considered
following the ongoing sale process.
Investment portfolio
At the year end, the VCT held a portfolio
of ten investments, which were valued
at £14.2mn. There have been no follow-
on acquisitions. No investments were
disposed of during the financial year, but
a loan repayment of £129,000 was made.
One of the non-renewable investments,
having entered administration in May 2023,
was dissolved mid-September 2024.
04
Gresham House Renewable Energy VCT1 plc
The portfolio is analysed (by value) between
the different types of assets as follows:
Ground mounted solar 92.7%
Small wind 7.3%
Non-renewable assets 0.0%
As referred to previously, there has
been an ongoing issue in relation to the
connection of the South Marston solar
farm to the grid. This arose from the
decision of the off taker (Honda) to cease
business at the site and to sell the site
to a third party. It is taking considerable
time and effort to resolve the issue.
Whilst the new owner of the site, Panattoni,
a developer and provider of logistic facilities,
is cooperating to improve the way South
Marston connects to the grid, it is however a
complex and protracted process to amend the
various agreements and gain lender consent.
The final solution involves a new connection
to an independent Distribution Network
Operator (iDNO) which is almost agreed and
once this is implemented, the issue will
be resolved. iDNOs are similar to DNOs in
that they also own, operate and maintain
electricity infrastructure. The networks they
adopt are typically new installed assets,
such as connections to new developments,
which will connect back onto the DNO’s
network. Unlike DNOs, iDNOs do not have a
specific geographic area. Agreeing this is
one of the key objectives for the Investment
Adviser in the coming weeks and is necessary
before any Transaction can be completed.
In order to maintain VCT status, the Company
needs to ensure that it maintains certain
percentages of qualifying investments within
its portfolio. The Board anticipates that
the Company will fall below these required
percentages by September 2025. Therefore,
to avoid a breach of VCT status, the Board
has been advised that the Company need to
enter a members’ voluntary liquidation before
September 2025 which would involve delisting
the Company’s shares. If the assets are sold
early in 2025, the Board may decide to enter
voluntary liquidation before the required date.
Venture Capital investments
The VCT holds one investment that is not in
renewable energy. The company, bio-bean
Limited, went into administration in April
2023 and is in the process of liquidation.
No recovery of any value is expected. The
other venture capital investment, Rezatec
Limited, went into administration in May
2023 and was dissolved on 10 September
2024 without any recovery. The value of
both VCT’s venture capital investments was
marked down to £nil at 31 March 2023.
Further detail on the investment portfolio is
provided in the Investment Adviser’s Report.
Net asset value and results
At 30 September 2024, the NAV per Ordinary
Share stood at 38.7p and the NAV per ‘A’
Share stood at 0.1p, producing a combined
total of 38.8p per ‘pair’ of shares. The
movement in the NAV per share during the
financial year is detailed in the table below:
Pence per
‘pair’ of shares
NAV as at 1 October 2023 55.7
Less dividend payments
during the year (7.5)
Realised losses on assets still
held (7.2)
Valuation decrease on assets
still held (6.1)
Income less expenses 3.8
NAV as at 30 September 2024 38.8
The NAV Total Return (NAV plus cumulative
dividends) has decreased by 17.0% in the last
financial year and at the year end stands at
121.9p excluding the initial 30% VCT tax relief,
compared to the cost to investors in the initial
fundraising of £1.00 or 70.0p net of income
tax relief.
The loss on ordinary activities after taxation
for the year was £2.4mn (2023: £4.6mn loss),
comprising a revenue profit of £1.2mn (2023:
£391,000) and a capital loss of £3.6mn (2023:
capital loss of £5.0mn) as shown in the Income
Statement.
Dividends
On 21 December 2023, total dividends of 7.5p
per Ordinary Share were paid to Shareholders,
comprising of income generation from
the portfolio and part also related to the
distribution of the remaining proceeds arising
from the part sale of assets in April 2023. At
30 September 2024, dividends of 83.1p per
‘pair’ of shares had been paid (2023: 75.6p).
On 2 December 2024, it was announced that
the Company would not pay a dividend in
2024. The board intends to declare and pay
a dividend as soon as practically possible
following the sale of the remaining portfolio
of assets.
2024 Annual General Meeting (AGM)
The VCT’s thirteenth AGM was held on 19
March 2024 at 11:30 a.m. All resolutions were
passed by way of a poll.
2025 Annual General Meeting (AGM)
The VCT’s fourteenth AGM will be held at 18th
Floor, The Scalpel, 52 Lime Street, London
EC3M 7AF on 18 March 2025 at 3:30 p.m.
Share Buybacks
As noted in previous Reports, the Board has
decided that the VCT will not be buying in
shares for the foreseeable future.
Outlook
It is disappointing that despite diligent efforts
by the Board, supported by the Investment
Adviser, it has not been possible to progress
the sale of the Company’s remaining assets as
quickly as Shareholders may have expected,
due to extremely challenging market
conditions. Issues with certain assets (notably
South Marston) which needed resolving have
not helped. However, it is pleasing now to be
able to report significant progress as detailed
above. The Board continues to ensure that
every effort is being made to maximise
Shareholder returns.
In the meantime, the strong cash flows
generated by the remaining portfolio are
generating returns for the Company. Despite
this, costs throughout the remaining
portfolio continue to rise and, with only the
Investment Adviser’s fees linked to the NAV,
the Company’s costs largely remain at the
pre-sale of assets level. So, the right course
of action remains to find an appropriate and
willing purchaser who can achieve economies
of scale with the assets the Company is
seeking to sell.
Once again, I would like to thank Shareholders
for their patience and continued interest and
support.
Gill Nott
Chairman
29 January 2025
Financial
StatementsGovernanceOverview
05
Gresham House Renewable Energy VCT1 plc
05
Gresham House Renewable Energy VCT1 plc
Investment Adviser’s Report
Portfolio Highlights
Gresham House Renewable Energy VCT1
plc (VCT) remains invested in the renewable
energy projects that the VCT and Gresham
House Renewable Energy VCT2 plc (VCT2)
have co-owned for a period of between ten
to thirteen years, depending on the asset.
The total generation capacity of assets
co-owned by the VCT is 21.3MWp, made
up of 20.3MWp from six ground mounted
solar FIT projects and 1MWp of micro-wind
projects spread across approximately 200
sites. At 30 September 2024, the VCT also
owned one venture capital investment
which is in the process of liquidation with no
Work is currently underway to sell the
remainder of the VCT’s assets, with JLL as
the Corporate Finance Adviser who launched
a new sale process at the beginning of the
financial year.
The Investment Adviser continues to manage
the assets and deliver the best possible
yield from them, whilst also supporting the
Boards of the VCTs and JLL in advancing the
The Investment Adviser has undertaken
a valuation exercise (as of the full year to
30 September 2024) for the purpose of
determining the Net Asset Value (NAV) and
has provided the Directors with several
valuation scenarios based on a range of key
assumptions. It is the VCT Directors who have
the responsibility of valuing these assets
based on input from the Investment Adviser.
The valuation presented in this Annual
Report reflects the Directors’ view of the fair
market value of the assets as indicated by the
offer received as part of the ongoing sales
process whilst at the same time cognisant
of the Investment Adviser’s rolled forward
financial model. Whilst the model incorporates
potential future revenues and costs, as well
as key assumptions that determine future
operational and financial performance, it does
not reflect the limited market appetite for this
type of mature solar assets. The Board issued
an RNS on 2 December 2024 in which it stated
that the net sale proceeds may be 20-25%
lower than the last stated NAV in March 2024.
During the year the total revenue from
renewable energy generation was £12.2mn
(2023: £14.7mn) and of this, £9.5mn was from
government incentives and inflation-linked
contracts. The total revenue was 4.9% behind
budget due to a combination of factors including
lower than budgeted irradiation, lower fixed
power prices during the 12 month period and
output due to some technical issues.
The vast majority of the assets held by the VCT
produces solar power. The solar portfolio is
older than over 90% of the total installed solar
capacity in the UK, but positively this means
that the VCT’s solar assets benefit from higher
government- backed incentives than most other
solar installations.
The downside of the age of the VCT’s solar
assets is the additional maintenance required to
keep them operating effectively. Maintenance
programmes to repair or replace certain
components across the three worse performing
assets have been successful in improving
performance. Performance generally remains
fair, although Kingston Farm and Lake Farm
have suffered from faults due to deterioration
of some of their solar panels, for which
warranty claims are in progress, with one of the
manufacturers having offered compensation.
Additionally, the inverters at Wychwood and
Parsonage are starting to fail. A replacement
programme is in progress at Wychwood, the
larger of the two sites, after which its old
inverters (that currently still work) will then be
used as spares for Parsonage.
In terms of output, solar irradiation was 6% below budget during the year. The poor weather (low
irradiance) across the year significantly impacted the solar assets’ output. This, combined with
some technical issues (described in more detail later) resulted in 8% lower generation than budget.
These issues are being addressed through warranty claims and replacement works.
Æ power prices continued to be volatile during the year 2023/24. Although they have dropped
substantially following the spike that resulted largely from Russia’s invasion of Ukraine in
2022, prices remain at elevated levels compared to the long-term average before the conflict.
The most recent independent long-term power price curve forecast was higher than the last
quarter’s curve.
Mitie Power Prices – 1 October 2023 to 30 September 2024
0
20
40
60
80
100
120
140
160
02/10/23 02/11/23 02/12/23 02/01/2402/02/2402/03/2402/04/2402/05/2402/06/2402/07/2402/08/2402/09/24
Day ahead power price (£/MWh)
As fixed price power contracts for
the solar sites have expired and been
renewed, only one site, Lake Farm,
remained on a high price (£380/MWh),
although this also ended in December
2024. Fixed prices at the remaining sites
are between £65/MWh and £105/MWh
which continues to be above the historic
long-term norm of £50-60/MWh, which
bodes well for the future cash flows.
06
Gresham House Renewable Energy VCT1 plc
Fixing power prices under the PPAs
provides a good degree of security over
future revenues, subject to output being
on budget. Where prices have been on the
higher end of the scale, the Investment
Adviser took the opportunity to fix for
longer, 2-year terms. Conversely, when
the prices have been lower, they were only
fixed for a year.
Æ with a high degree of the portfolio’s
revenue being inflation linked, higher and
more sustained inflation increases the
revenues from the assets. The impact
of high inflation on revenues is offset
partially by the operating costs and the
debt also being inflation-linked. During
the period, inflation reduced significantly
to more normal levels, to 1.7% at
remain at these more normal levels.
Æ interest rates have decreased slightly
during the period as the Bank of England
(BoE) cut interest rates to try and
stimulate growth given inflation had
reduced substantially. Base Rates have
decreased during the financial year from
5.25% to 5.0% on 1 August 2024 and post
period to 4.75% on 7 November 2024. This
makes debt less expensive.
Portfolio Composition
Portfolio Composition by Asset Type and Impact on VCT1 Net Asset Value (NAV)
30 September 2024 30 September 2023
Asset Type kWp
VCT1 Value
(‘000)
% of Portfolio
value
VCT1 Value
(‘000)
% of Portfolio
value
Ground mounted solar (FiT)* 20,292 £13,165 92.7% £15,395 86.9%
Wind assets (FiT)* 995 £1,033 7.3% £2,318 13.1%
Venture Capital investments N.A. £0 0% £0 0.0%
TOTAL 21,287 £14,198 100.0% £17,713 100.0%
* Feed in Tariff (FiT)
** The investment values above are gross and include loans owed by the VCT to the investment portfolio companies of £4.4mn at 30 September 2024 (2023:£3.7mn) as reflected in the net assets on
the VCT’s balance sheet.
The above table shows the details of the assets
held as at 30 September 2024 and the assets
held as at the prior year end 30 September
2023. The renewable energy assets in the
portfolio (wind and solar) of the VCT and
VCT2, generated 18,993MWhs of electricity
over the financial year, sufficient to meet the
annual electricity consumption of c.7,035
homes. The Investment Adviser estimates
that the carbon dioxide savings achieved by
generating this output from renewable energy
sources versus gas-fired power stations, are
equivalent to 8,300 tonnes of carbon dioxide
Portfolio Summary
Portfolio revenues for the full year 1 October
2023 to 30 September 2024
Renewable Energy VCT Portfolio – Revenue
Ground mounted Solar (FiT) 96.8%
Wind Assets 3.2%
07
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
The performance against budget is shown below:
1 October 2023 – 30 September 2024 1 October 2022 – 30 September 2023
Asset type
Budgeted
revenue
(£)
Actual
revenue
(£)
Revenue
performance
(%)
Budgeted
revenue
(£)
Actual
revenue
(£)
Revenue
performance
(%)
Ground mounted solar (FiT) 12,409,444 11,849,241 95.5% 13,868,813 13,018,388 93.9%
Wind assets (FiT) 470,495 394,132 83.8% 417,653 303,517 72.7%
TOTAL 12,879,939 12,243,373 95.1% 14,286,466 13,321,905 93.3%
The revenue is affected by:
Æ renewable energy resources (solar irradiation or wind speed);
Æ the performance of the assets in converting the sun and wind into revenue; and
Æ the revenue paid per unit of energy generated and sold.
The ground mounted solar farms benefitted from attractive power prices and lower but still above BoE long-term inflation-linked increases to subsidies
(5.5% as of 1 April 2024), but technical problems and poor climatic conditions reduced output which offset these increases, such that actual revenue was
Ground mounted solar portfolio output analysis 1 October 2023 to 30 September 2024:
Forecast Output
Negative Positive
Irradiation
Achieved Output
Output
19,721,448
18,117,821
1,159,234
444,393
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
kWh
Renewable energy resources
During the year the assets suffered from lower solar irradiance than budgeted, with solar
irradiation being 6% behind for the year which significantly impacted overall performance.
The replacement of faulty or failing equipment,
(panels, inverters, transformers) that previously
caused the reduction in output, plus the
successful warranty claims against Jinko
Solar (who supplied Beechgrove and South
Marston) continue to bear fruit with improved
performance. However, Kingston and Lake Farm
are suffering from their solar panels degrading,
so the Investment Adviser is pursuing a warranty
claim against the solar panel manufacturers
(Canadian Solar and Trina). Both manufacturers
are engaging with the process and the
gathering of evidence to support the claims
is in progress, in particular Canadian Solar
who have made an offer of compensation for
their deteriorating solar panels. The inverters
at Wychwood and Parsonage are starting
to fail, so the Investment Adviser following
approval by the Board has initiated a full
replacement program at Wychwood. Once all
its inverters have been replaced, those that
still work will be used as spares for Parsonage
as both sites use the same technology.
Technical performance
The table below shows the technical performance for each of the groups of assets during this and prior financial year:
1October 2023 – 30September 2024
1October 2022
– 30September
2023
Asset Type
Budgeted
output
(kWh)
Actual
output
(kWh)
Technical
performance
(%)*
Actual
output
(kWh)
Ground mounted solar (FiT) 19,721,448 18,117,821 91.9% 19,417,739
Wind assets (FiT) 1,045,301 875,646 83.8% 759,642
TOTAL 20,766,749 18,993,467 91.5% 20,177,381
* Technical performance is a measure of the percentage of actual output over budgeted output.
Investment Adviser’s Report (continued)
08
Gresham House Renewable Energy VCT1 plc
Micro wind performance:
The micro wind portfolio performed around 16%
lower than budget but was an improvement
on the financial year ended 30 September
2023. Micro wind accounts for only 4.8% of
the portfolio in terms of capacity and even
less in terms of revenue. The entire portfolio
is comprised of approximately two hundred
R9000 wind turbines, which have the support
of an experienced O&M contractor with access
to spare parts and maintenance crews.
South Marston update
South Marston has historically sold all its
power to the Honda production plant adjacent
to the solar site at Swindon. Honda closed
down this facility in July 2021 when production
stopped and now Honda has sold the site to
a commercial real estate developer called
Panattoni. The Investment Adviser is working
with Panattoni and various advisers to ensure
that the export of power from the solar
farm is maintained, plus ensure the existing
contractual arrangements and protections are
preserved with the new owners.
Panattoni is keen to make the solar power
available to its future tenants when they move
into the facility. Panattoni will construct on
the site and has maintained in its planning
application all the existing infrastructure
including the substation through which South
Marston connects to the grid. Both Honda
and Panattoni have been supportive of South
Marston during this period of uncertainty,
agreeing to new switching arrangements
to allow South Marston to export directly to
the electricity network, whilst there is no
demand at the old Honda site as it is closed.
Ultimately Panattoni are looking to implement
an iDNO solution such that each of their new
tenants and South Marston Renewables Ltd as
generator with have their own metering and
connection arrangements. This is positive
for the project as it separates the connection
arrangements thus simplifying them and avoids
SMRL’s reliance on Panattoni in the future.
The Investment Adviser continues to work
with all parties to improve South Marston’s
contractual rights which will be needed
to satisfy any potential buyer of the VCT’s
assets and expects to sign an amended Cable
Easement agreement and a new connection
agreement with the iDNO (amongst others)
which gives South Marston certain new and
improved rights.
Revenue split for the year 2023/24
Ground mounted FiT 74.4%
Wind FiT 2.8%
Ground mounted export 21.2%
Wind export 0.4%
Ground mounted private wire 0.2%
Other 1.0%
Ground mounted private wire 0.4%
Other 0.5%
Ground mounted FiT solar portfolio, revenue
split for the year 2023/24
Ground mounted FiT 76.7%
Ground mounted export 22.0%
Ground mounted private wire 0.2%
Other 1.1%
Of total revenues generated from solar
assets in the year, c. 77% was earned from
government backed incentives for generating
renewable electricity.
The high proportion of income that is fixed by
the FiT scheme is RPI linked and not exposed
to wholesale power prices and is a significant
driver of value in this portfolio. This enables the
portfolio to be insulated from any significant
reductions in the wholesale price of electricity
whilst allowing it to benefit from increases
such as those experienced in 2022.
Total revenues (power price and subsidies) per
MWh generated by the solar assets were £654/
MWh for the year ended 30 September 2024.
Operating costs
The majority of the cost base is fixed and or
contracted under long term agreements and
includes rent, business rates, and regular O&M
costs. Many of these costs have also risen in
line with inflation.
The main variable cost item each year is the
repair and maintenance cost. Repair and
maintenance expenditure involving solar
panels, the key component of a solar project,
is covered by cash held in the maintenance
reserve account as part of the debt facility.
The maintenance reserve account has been
used for maintenance programmes to repair
or replace certain components across three
performing assets. At the end of the financial
year a reserve totalling £448k was in place for
the remaining ground mounted solar assets.
Venture Capital investments
bio-bean went into administration in April
2023 and is in the process of liquidation. No
recovery of any value is expected. Rezatec also
went into administration, in May 2023, and was
dissolved on 10 September 2024 without any
recovery. The value of the two VCT’s venture
capital investments was marked down to £nil at
31 March 2023.
09
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Investment Adviser’s Report (continued)
Outlook
The Investment Adviser’s continued focus is
to ensure that the assets operate at or above
budget whilst it supports the Directors’ efforts
to maximise exit value for Shareholders.
The Investment Adviser is working alongside
JLL to facilitate the due diligence process
currently underway with the buyer. The buyer’s
technical adviser has visited all the site and
conducted site assessments. These visits
The VCT Boards current view is that
the Transaction has a reasonable prospect of
completion by the late spring of this year.
Addressing the contractual status of the grid
connection arrangement at South Marston with
the new landowners remains a key priority.
The historical repairs and warranty claims
of the underperforming assets that were
completed have been successful and have
provided greater visibility and reliability of
revenues. Addressing the issues with the
deteriorating solar panels at Kingston Farm and
Lake Farm and replacing the failing inverters
at Wychwood and Parsonage will bring further
improvements to output and monitoring.
The Investment Adviser remains vigilant for
spotting any signs of degradation early so that
the impact on availability can be managed
All ground mounted solar assets had fixed price
PPAs during the financial year, which gave
some certainty to revenue. The Investment
Adviser is pleased to have secured new fixed
price PPAs for one to two years to further
de-risk near term future cash flows from
The combined effect of inflation and power
prices locked in at good levels should translate
into attractive, stable revenue and cash flow.
Gresham House Asset Management Limited
29 January 2025
10
Gresham House Renewable Energy VCT1 plc
Review of Investments
Portfolio of investments
The following investments were held at 30 September 2024:
Qualifying and part-qualifying
investments Operating sites Sector
Cost
£’000
Valuation
£’000
Valuation
movement
in year
£’000
% of
portfolio
Lunar 2 Limited
1, 4
South Marston, Beechgrove Ground solar 1,330 11,612 511 81.8%
Lunar 1 Limited
1, 4
Kingston Farm, Lake Farm Ground solar 124 653 (1,272) 4.6%
HRE Willow Limited
3
HRE Willow Small wind 875 482 (140) 3.4%
New Energy Era Limited
4
Wychwood Solar Farm Ground solar 884 474 (845) 3.3%
Vicarage Solar Limited
4
Parsonage Farm Ground solar 871 426 (623) 3.0%
Tumblewind Limited
3
Tumblewind Small wind 850 214 (966) 1.5%
Minsmere Power Limited
3
Minsmere Small wind 975 197 (81) 1.4%
Small Wind Generation Limited
3
Small Wind Generation Small wind 975 140 31 1.0%
bio-bean Limited
2
Cambridgeshire Clean energy 695 – – 0.0%
Lunar 3 Limited
1, 4
Ground solar 1 – – 0.0%
Total investments 7,580 14,198 (3,385) 100.0%
Cash at bank and in hand 1 0.0%
Total investments includingcash 14,199 100.0%
1
Partially qualifying investment
2
bio-bean Limited was permanently impaired as at 31 March 2023. bio-bean’s liquidation is ongoing.
3
£1.8mn of the valuation movement has been recognised as a realised loss at financial year ended 30 September 2024.
4
The individual portfolio company valuations are based on the estimated realisation proceeds from the ongoing sales process allocated by MWh per solar investment and number
of turbines per wind investment. Lunar 2 Limited has increased in value relative to the other solar investments as it holds a higher beneficial interest in other solar companies
within the group structure resulting in a higher allocated proportion of the estimated realisation proceeds.
All venture capital investments are incorporated in England and Wales.
Gresham House Renewable Energy VCT2 plc, of which Gresham House is the Investment Adviser, holds the same investments as above.
Investment movements for the year ended 30 September 2024
Disposals
Qualifying and partially qualifying investments
Cost at
30 September
2023
£’000
Valuation at
30 September
2023
£’000
Redemption
of loan notes
in year
£’000
Profit vs costs
in year
£’000
Realised
gain/(loss)
in year
£’000
Tumblewind Limited 129 129 129 – –
Rezatec Limited* – Dissolved on 10 September 2024* 1,000 – – – –
* The investment was permanently impaired as at 31 March 2023.
The basis of valuation for the largest investments is set out below on pages 12 to 16.
11
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Further details of the remaining investments (by value):
Lunar 2 Limited
Lunar 2 Limited is a holding company of FiT remunerated
ground mounted solar farms of 5MW (Wiltshire), 4MW (near
Hawkchurch) and 0.6MW (Ilminster, Somerset).
Cost at 30/09/24: £1,330,000
Cost at 30/09/23: £1,330,000
Date of first investment: December 2013
Valuation at 30/09/24: £11,612,000
Valuation at 30/09/23: £11,101,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £1,330,000
Proportion of equity held: 50%
Summary financial information
from statutory accounts
(non-consolidated): 31 March 2024
Turnover: *
Operating profit/(loss): *
Net assets: £2,447,000
* Lunar 2 Limited non-consolidated P&L is not publicly available.
Lunar 1 Limited
Lunar 1 Limited is a holding company of FiT remunerated
ground mounted solar farms of two 5MW (Wiltshire) and one
0.7MW (Oxfordshire).
Cost at 30/09/24: £125,000
Cost at 30/09/23: £125,000
Date of first investment: December 2013
Valuation at 30/09/24: £653,000
Valuation at 30/09/23: £1,925,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £125,000
Proportion of equity held: 5%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £nil
Operating loss: £(11,000)
Net assets: £728,000
Review of Investments (continued)
12
Gresham House Renewable Energy VCT1 plc
HRE Willow Limited
HRE Willow Limited owns a portfolio of FiT remunerated wind
turbines on largely farmer-owned sites located throughout
East Anglia. The total capacity of the wind assets owned by
HRE Willow Limited is 430kW.
Cost at 30/09/24: £875,000
Cost at 30/09/23: £875,000
Date of first investment: June 2011
Valuation at 30/09/24: £482,000
Valuation at 30/09/23: £622,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £875,000
Proportion of equity held: 44%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £177,000
Operating profit: £48,000
Net assets: £1,286,000
New Energy Era Limited
New Energy Era Limited owns a FiT remunerated solar farm
of 0.7MW near Shipton-under- Wychwood, Oxfordshire.
Cost at 30/09/24: £884,000
Cost at 30/09/23: £884,000
Date of first investment: November 2011
Valuation at 30/09/24: £474,000
Valuation at 30/09/23: £1,320,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £884,000
Proportion of equity held: 45%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £363,000
Operating profit: £203,000
Net assets: £2,088,000
Financial
StatementsGovernanceOverview
13
Gresham House Renewable Energy VCT1 plc
Vicarage Solar Limited
Vicarage Solar Limited is the holding company of a FiT
remunerated solar farm of 0.7MW near Ilminster, Somerset.
Cost at 30/09/24: £871,000
Cost at 30/09/23: £871,000
Date of first investment: March 2012
Valuation at 30/09/24: £426,000
Valuation at 30/09/23: £1,049,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £871,000
Proportion of equity held: 45%
Summary financial information
from statutory accounts
(non-consolidated): 31 March 2024
Turnover: *
Operating profit/(loss): *
Net assets: £1,944,000
* This information is not publicly available
Tumblewind Limited
Tumblewind Limited owns a portfolio of FiT remunerated wind
turbines on largely farmer owned sites located throughout
East Anglia. The total capacity of the wind assets owned by
Tumblewind Limited is 180kW. Tumblewind sold Priory Farm
Solar Farm Limited, which owns a ROC remunerated solar farm
of 3.2MW near Lowestoft, in April 2023.
Cost at 30/09/24: £850,000
Cost at 30/09/23: £979,000
Date of first investment: November 2011
Valuation at 30/09/24: £214,000
Valuation at 30/09/23: £1,310,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £79
Loan stock: £60,000
Proportion of equity held: 50%
Proportion of loan stock held: 50%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £66,000
Operating profit: £21,000
Net assets: £161,000
Review of Investments (continued)
14
Gresham House Renewable Energy VCT1 plc
Minsmere Power Limited
Minsmere Power Limited owns a portfolio of FiT remunerated
wind turbines on largely farmer owned sites located
throughout East Anglia. The total capacity of the wind assets
owned by Minsmere Power Limited is 230kW.
Cost at 30/09/24: £975,000
Cost at 30/09/23: £975,000
Date of first investment: November 2011
Valuation at 30/09/24: £197,000
Valuation at 30/09/23: £278,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £400,000
Proportion of equity held: 50%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £91,000
Operating profit: £34,000
Net assets: £112,000
Small Wind Generation Limited
Small Wind Generation Limited owns a portfolio of FiT
remunerated wind turbines on largely farmer owned sites
located throughout East Anglia. The total capacity of the
wind assets owned by Small Wind Generation Limited
Cost at 30/09/24: £168,000
Cost at 30/09/23: £168,000
Date of first investment: November 2011
Valuation at 30/09/24: £140,000
Valuation at 30/09/23: £109,000
Valuation method: Estimated realisation proceeds
Investment comprises:
Ordinary shares: £1,680,000
Proportion of equity held: 50%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: £73,000
Operating loss: £50,000
Net assets: £(389,000)
15
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Review of Investments (continued)
Lunar 3 Limited
Lunar 3 Limited was incorporated at end of 2013 as part of
the refinancing of the ground mounted solar assets owned
by Lunar 1 Limited and Lunar 2 Limited. Lunar 3 Limited is a
dormant company and does not own any assets.
Cost at 30/09/24: £100
Cost at 30/09/23: £100
Date of first investment: December 2013
Valuation at 30/09/24: £0
Valuation at 30/09/23: £0
Valuation method: n/a
Investment comprises:
Ordinary shares: £200
Proportion of equity held: 50%
Summary financial information
from statutory accounts: 31 March 2024
Turnover: *
Operating profit/(loss): *
Net assets: £200
* This information is not publicly available
Gresham House Renewable Energy VCT1 plc
16
Explanatory notes
The summary financial information has been sourced from the statutory accounts of the underlying investee companies. The net asset/liability
figures presented therefore do not approximate a valuation.
The proportion of equity held in each investment also represents the level of voting rights held by the VCT in respect of the investment.
Summary of loan stock interest income
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Loan stock interest income in the period
Tumblewind Limited 7 15
Minsmere Power Limited 11 11
Small Wind Generation Limited 5 11
Total 23 37
Analysis of investments by commercial sector
The split of the investment portfolio by sector (by cost and by value at 30 September 2024) is as follows:
Spread of investment by sector (cost) Spread of investment by sector (value)
Ground mounted solar 53%
Small wind 47%
Ground mounted solar 93%
Small wind 7%
Financial
StatementsGovernanceOverview
17
Gresham House Renewable Energy VCT1 plc
The Directors present the Strategic Report
for the year ended 30 September 2024.
The Board has prepared this report in
accordance with the Companies Act 2006.
Business model
The VCT acts as an investment company,
investing in a portfolio of businesses within
the renewable and clean energy sectors
and operating as a VCT to ensure that its
Shareholders can benefit from the tax
Business review and developments
The VCT’s business review and developments
during the year, including updates on the
Managed Wind Down process for the VCT and
the ongoing sale of the portfolio, are set out
in the Chairman’s Statement and Investment
Adviser’s Report.
During the year to 30 September 2024, the
renewable investments held decreased in value
by £3,385,000. The value of the non-renewable
investment bio-bean Limited remained at £nil
during the reporting period having entered
administration in April 2023. Rezatec Limited,
having entered administration in May 2023,
was dissolved on 10 September 2024. Both non-
renewable investments were fully impaired at
31 March 2023.
Income over expenditure for the year resulted
in a net loss, after accounting for capital
expenses, of £2.4mn (2023: £4.6mn loss).
The total loss for the year was £2.4mn and net
assets at the year end were £9.9mn (2023:
£14.2mn). An interim dividend of 7.5p per
the Company would not pay a dividend in
a dividend as soon as practically possible
following the sale of the remaining portfolio
provisional approval for the VCT to act as a
Customs. The Directors consider that the VCT
has continued to conduct its affairs in a manner
such that it complies with Part 6 of the Income
Investment advisory and administration fees
Gresham House Asset Management Limited
(Gresham House) provides investment advisory
services to the VCT, at a fee equivalent to
1.15% of net assets. The annual advisory fee is
a NAV based fee and was, up to an Investment
Advisory Agreement (IAA) amendment
announced on 25 June 2024, subject to a
clawback depending on whether the Company’s
annual running costs exceed 3% of NAV. The
agreement is for a minimum term of two years,
effective from 7 November 2017, with a nine
month notice period on either side thereafter.
Following the sale of some assets in April 2023
and subsequent dividend paid as a result of the
13 July 2021 shareholder vote to wind-down
the Company, the Company’s net assets have
reduced significantly to a level not anticipated
when the IAA was agreed and signed. Due
to this significant reduction in the NAV as a
result of the Managed Wind Down process,
the annual running costs for the financial year
ending 30 September 2024 were forecasted
to be around 4% of NAV. This would mean that
running costs, many of which are largely fixed,
would now exceed the initial 3% cap and the
Investment Adviser’s annual advisory fee would
therefore be subject to the clawback (on top of
an already reduced annual advisory fee due to
a lower NAV following asset sales). To rectify
this unintended consequence of the new
investment policy, the IAA amendment seeks to
minimise the effect of the clawback by raising
the cap to 5% of NAV or £625,000, whichever
is lower.
The Board has reviewed the services to be
provided by Gresham House and has concluded
that it is satisfied with the strategy, approach
and procedures which are to be implemented
in providing investment advisory services to
the VCT. The Board is also of the opinion that
the allocation of the investment advisory fee
between capital and revenue of the VCT, as
described in Note 4 to the financial statements,
is still appropriate.
JTC (UK) Limited (JTC) acts as Administrator
and Company Secretary. JTC provides
administration and accounting services to the
VCT for a fee of £45,400 (plus VAT, if applicable)
per annum. It also provides company
secretarial services for a base fee of £45,400
(plus VAT, if applicable) per annum and during
the financial year as an agreed standard cost
for further company secretarial support has
charged a fee of £1,250 (plus VAT, if applicable)
for each additional meeting of the Board
convened to discuss the Managed Wind Down
of the Company. The agreement shall continue
in force until determined by either party, with a
Investment policy
General
At the General Meeting held on 13 July 2021,
89.43% of the shareholders resolved to approve
the New Investment Policy of the Company to
reflect a realisation strategy and the Company
ceasing to make any new investments. The
new Investment Policy replaced the previous
Investment Policy in its entirety.
The Directors believed that being prescriptive
as regards the timeframe for realising
the Company’s investments could prove
detrimental to the value achieved on
realisation. Therefore, it was the Board’s view
that the strategy for the realisation of the
Company’s investments would need to be
flexible and may need to be altered to reflect
changes in the circumstances of a particular
investment or in the prevailing market
conditions.
Once all, or substantially all, of the Company’s
investments have been realised and an initial
distribution in respect thereof made, the
Company will, at an appropriate time, seek
Shareholders’ approval for it to be placed into
members’ voluntary liquidation.
Since inception to 13 July 2021
Up to 13 July 2021, the VCT’s objectives were
to maximise tax free capital gains and income
to Shareholders from dividends and capital
distributions by investing the VCT’s funds in:
Æ a portfolio of clean technology and
environmentally sustainable investments,
primarily being in the UK and the EU,
that have attractive income and growth
characteristics, with investments
in existing asset-backed renewable
generation projects as the core of the
portfolio; and
Strategic Report
18
Gresham House Renewable Energy VCT1 plc
Æ a range of non-qualifying investments,
comprised from a selection of cash
deposits, fixed income funds, securities
and secured loans and which will have
credit ratings of not less than A minus
(Standard & Poor’s rated)/A3 (Moody’s
rated). In addition, as the portfolio of VCT
qualifying investments will involve smaller
start-up companies, non-qualifying loans
could be made to these companies to
negate the need to borrow from banks
and, therefore, undermine the companies’
security within the conditions imposed
on all VCTs under current and future VCT
legislation applicable to the VCT.
13 July 2021 to 30 September 2024
Following shareholder approval at the General
Meeting on 13 July 2021, the New Investment
Policy of the VCT is that the Company will be
managed with the intention of realising all
remaining assets in the portfolio in a prudent
manner consistent with the principles of good
investment management and with a view to
returning cash to Shareholders in an orderly
manner, whilst protecting the tax position
The Company will pursue its investment
objective by effecting an orderly realisation of
its assets in a manner that seeks to achieve a
balance between maximising the value received
from those assets and making timely returns
of capital to Shareholders. This process might
include sales of individual assets or running off
the portfolio in accordance with the existing
terms of the assets, or a combination of both.
Pursuant to its investment objective, the
Company successfully completed the sale of a
portion of its solar assets in April 2023.
The Company will cease to make any
new investments or to undertake capital
expenditure except where, in the opinion of
both the Board and the Investment Adviser
(or, where relevant, the Investment Adviser’s
successors):
Æ the investment is a follow-on investment
made in connection with an existing asset
in order to comply with the Company’s pre-
existing obligations; or
Æ failure to make the follow-on investment
may result in a breach of contract or
applicable law or regulation by the
Company; or
Æ the investment is considered necessary
to protect or enhance the value of any
existing investments or to facilitate orderly
disposals.
Any cash received by the Company as part of
the realisation process prior to its distribution
to Shareholders will be held by the Company as
cash on deposit and/or as cash equivalents.
Investment strategy
Investee companies generally reflect the
following criteria:
Æ a well-defined business plan and ability
to demonstrate strong demand for its
products and services;
Æ products or services which are cash
generative;
Æ objectives of management and
Shareholders which are similarly aligned;
Æ adequate capital resources or access to
further resources to achieve the targets
set out in its business plan;
Æ high calibre management teams;
Æ companies where the Investment Adviser
believes there are reasonable prospects
of an exit, either through a trade sale or
flotation in the medium-term; and
Æ a focus on small and long-term renewable
energy projects that utilise proven
technology.
The new Investment Policy was adopted at the
General Meeting held on 13 July 2021 to reflect
a realisation strategy and the Company ceasing
to make any new investments.
Asset allocation
Throughout the year under review and to date,
the Company continued to hold 80% of its
funds in VCT qualifying investments in order to
retain its status as an approved Venture Capital
Trust. The 80% qualifying holdings requirement
narrowed in the course of the financial year
and is being monitored closely to ensure
compliance is maintained.
The Company’s qualifying ratio is expected to
fall below 80% before September 2025 by which
the Company will enter voluntary liquidation to
Prior to the Company’s entry into the Managed
Wind Down, the VCT sought to invest in at
least eight investments to reduce the potential
impact of poor performance by any individual
investment. During the Managed Wind Down the
number of investments has decreased to ten
investments.
Risk Management
During the year, the VCT’s assets have been
managed to reduce risk as far as possible in
anticipation of the conclusion of the Managed
Wind Down.
The main risk management features include:
Æ monitoring of investee companies – the
Investment Adviser will closely monitor the
performance of all the investments made
by the VCT in order to identify any issues
and to enable necessary corrective action
to be taken; and
Æ the VCT will ensure that it has sufficient
influence over the management of the
business of the investee companies, in
particular, through rights contained in the
relevant investment agreements and other
shareholder/constitutional documents.
The VCT has followed the above risk
diversification strategy with regard to the Lunar
1 Limited and Lunar 2 Limited investments
in AEE Renewables UK 3 Limited, AEE
Renewables UK 26 Limited, South Marston Solar
Limited, Beechgrove Solar Limited, New Energy
Era Limited and Vicarage Solar Limited.
Gearing
The creditors shown on the Balance Sheet,
which are short-term, include amounts owed to
investee companies, which the Board expect to
be repaid in the future by way of dividends from,
or the sale of, these companies.
As at 30 September 2024, the VCT had the
ability to borrow £4.5mn in accordance with the
articles and had actual borrowings of £nil.
The VCT has no intention to borrow any funding
in the foreseeable future.
UK Listing rules
In accordance with the UK Listing Rules:
(i) the VCT may not invest more than 10%, in
aggregate, of the value of the total assets
of the VCT at the time an investment
is made in other listed closed-ended
investment funds except listed closed-
ended investment funds which have
published investment policies which
permit them to invest no more than 15% of
their total assets in other listed closed-
ended investment funds;
(ii) the VCT must not conduct any trading
activity which is significant in the context
of the VCT; and
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Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
(iii) the VCT must, at all times, invest and
manage its assets in a way which is
consistent with its objective of spreading
investment risk and in accordance with its
published investment policy set out in this
document. This investment policy is in line
with Chapter 15 of the UK Listing Rules
and Part 6 of the Income Tax Act.
The UK Listing Rules have been complied with
for the year ended 30 September 2024.
Directors and senior management
The VCT has three Non-Executive Directors,
including one female and two males. The VCT
has no employees.
Key performance indicators
At each Board meeting, the Directors consider
a number of performance measures to assess
the VCT’s success in meeting its objectives. The
Board has identified the VCT’s key performance
indicators as NAV Total Return and dividends
paid per share, the performance of which
during the year are in the table below:
Key performance
indicators per
financialyear:
Year ended
30 September
2024
Year ended
30 September
20 23
Net Asset Value
Total Return (% p.a.) (7.2)% (12.1)%
Dividends paid per
share (p)* 0.0p 24.0p
* Dividend paid per Ordinary Share year ended 30 September
2023: 24.0p. No dividend was paid in respect of the ‘A’ shares.
See the Chairman’s Statement on page 4 for
details on the EGL. On the basis of the scope
to which this levy applies, there is no impact
on the current or future revenues received by
the VCT, however the fair value of the portfolio
incorporates the potential additional costs a
purchaser may incur.
These are defined as follows:
Net Asset Value Total Return: the sum of
NAV per Ordinary Share, NAV per ‘A’ Share and
cumulative dividends paid.
Net Asset Value per Ordinary Share: The
closing total net asset position of the VCT as at
the reporting date less the total par value of all
‘A’ Shares in issue at the reporting date divided
by the total number of Ordinary Shares in issue
at the reporting date.
Net Asset Value per ‘A’ Share: Par value per
‘A’ Share.
Cumulative dividends paid: The gross total
of all dividends paid for both Ordinary and ‘A’
Shares from inception up to the reporting date.
The total net asset position of the VCT as at
the reporting date is as per the Balance Sheet,
while the total number of shares in issue for
both Ordinary and ‘A’ Shares is disclosed in
15.
In addition, the Board considers the VCT’s
performance in relation to other VCTs.
The position of the VCT’s NAV Total Return
as at 30 September 2024 and a summary of
dividends paid per share are as indicated
in the table on this page. The VCT had an
objective of paying dividends of 5p per share
per annum. Under the New Investment policy
the quantum and timing of any dividends paid
during the Managed Wind Down process is at
the sole discretion of the board, and depends
on the sale of the assets, ongoing income
streams generated by the assets held and the
Company’s ongoing cash requirements. As part
of the Managed Wind Down, once the majority
of the assets have been sold, the intention
is to return all sale proceeds to shareholders
through dividend distributions or, if the VCT
has since entered voluntary liquidation, via
Principal risks and uncertainties
Schedule of principal risks
The other principal risks faced by the VCT,
along with the steps taken to mitigate these
risks, are shown in the table below. The risks
have not materially changed from the previous
year, however changes in the factors impacting
the risks attributable are discussed below.
These principally apply during the period until
the underlying assets are sold during the
Managed Wind Down process.
Principal Risk Context Specific risks Possible impact Mitigation
Investment
Performance
The VCT holds
investments in unquoted
UK businesses in the
renewable energy sector.
Poor investment
decisions or strategy
or poor monitoring,
management
and realisation of
investments.
Adverse weather
conditions, low inflation
rates and/or low power
prices resulting in below
forecast investment
returns.
Reduction in the NAV
of the VCT and the
inability of the VCT to pay
dividends.
The Investment Adviser has significant
experience in the renewable energy
sector. The Investment Adviser also
actively manages the portfolio, engaging
reputable and experienced Operations and
Maintenance (O&M) contractors. The assets
have limited exposure to power prices, due
to the use of the Feed in Tariff (FiT) regime.
The Board regularly reviews the performance
of the portfolio, alongside the Board of the
sister company.
Inflation has fallen considerably since its
double-digit highs in 2022. It has stabilised,
and was at 1.7% at 30 September 2024 just
below the long-term BoE target of 2%.
Higher inflation, whilst of concern from the
point of view of the wider UK and global
economy, is positive for the owners of
subsidised UK renewable assets. Although
most costs also rise in line with inflation, as
does the cost of servicing the debt facility,
the net benefit of increased inflation is
positive since it increases the inflation linked
revenues more than it increases the costs.
Strategic Report (continued)
20
Gresham House Renewable Energy VCT1 plc
Principal Risk Context Specific risks Possible impact Mitigation
Loss of
VCT status
The VCT must maintain
continued compliance
with the VCT Regulations,
which prescribe a number
of tests and conditions.
Breach of any of the rules
could result in the loss of
VCT status.
The loss of VCT status
would result in dividends
becoming taxable and
new Shareholders losing
their initial tax relief.
The VCT Qualification is actively
monitored by the Investment Adviser
and the Administrator, who liaise with
the designated VCT Status Adviser. The
VCT Status Adviser also produces twice
yearly reports for the Board. With no new
or follow-on investments anticipated, the
Company’s qualifying ratio is expected to
fall below 80% before September 2025 by
which the Company will enter voluntary
liquidation to ensure compliance with
The Investment Adviser is aware of the
dates of the latest fundraisings, and that
the five-year minimum holding period
finished in October 2023.
The Investment Adviser has also prepared
detailed forecasts relating to the wind up of
the VCTs, which takes this into account.
Legislative In recent years, the
changes to VCT
Regulations have
narrowed the breadth of
permitted investments.
VCTs were established
to encourage private
individuals to invest in
early-stage companies
that are considered to
be risky and have limited
funding options. The
state provides these
investors with tax relief.
A change in government
policy could result in a
cessation of tax reliefs or
reduction of the amount
of tax relief available
to investors which
would make them less
attractive to investors.
The loss of VCT status
would result in dividends
becoming taxable and
new Shareholders losing
their initial tax relief.
Both the Investment Adviser and
the Administrator closely monitor
developments and attend AIC conferences.
The VCT Status Adviser also has significant
experience in this field and works closely
with HMRC.
Further commentary on VCT Status is
provided on page 25.
The Investment Adviser engages with
HMT and industry representative bodies
to demonstrate the cost benefit of VCTs
to the economy in terms of employment
generation and taxation revenue.
Regulatory and
compliance
As a listed entity, the
VCT is subject to the UK
Listing Rules and related
regulations.
Any breaches of relevant
regulations could result
in suspension of trading
in the VCT’s shares or
financial penalties.
Reduction in the NAV
of the VCT due to
financial penalties and a
suspension of trading in
its shares, also leading to
loss of VCT status.
The VCT Secretary and Administrator have
a long history of acting for VCTs. The Board,
Investment Adviser and Administrator also
employ the services of reputable lawyers,
auditors, and other advisers to ensure
continued compliance with its regulatory
obligations.
Operational –
VCT level
The VCT relies on the
Investment Adviser,
Administrator and other
third parties to provide
many of its services
at the VCT level.
Inferior provision of
these services, thereby
leading to inadequate
systems and controls or
inefficient management
of the VCT’s assets
and its reporting
requirements. Service
providers, predominantly
the Registrar, hold
Shareholders’ personal
data and there is a risk of
an external shock (natural
disaster or terrorist
attack) or a cyber-attack
on a provider.
Errors in Shareholder
records, incorrect
mailings, misuse of data,
non-compliance with key
legislation, loss of assets,
breach of legal duties
and inadequate financial
reporting.
The VCT, the Investment Adviser and
the Administrator engage experienced
and reputable service providers, the
performance of which is reviewed on an
annual basis.
The Directors and the Investment Adviser
regularly review the service providers,
including their internal controls and the
procedures and policies they have in place
for preventing cyber attacks.
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Strategic Report (continued)
Principal Risk Context Specific risks Possible impact Mitigation
Operational –
portfolio level
At the portfolio level, the
VCT uses third party O&M
contractors managing
the various sites.
Inferior provision of
these services, thereby
leading to inadequate
systems and controls or
inefficient management
of the VCT’s assets.
Maintenance and repairs
not carried out in a timely
manner.
Poor investment
performance due to
assets being offline and
non-revenue generating.
The VCT, the Investment Adviser and
the Administrator engage experienced
and reputable service providers, the
performance of which is reviewed
on an ongoing basis. At the portfolio
level, technical reviews and studies are
conducted on the assets as appropriate.
Repair and reconfiguration work is carried
out and O&M procedures are revised
to reduce dependence on overseas
contractors and specialists.
Economic,
political and
other external
factors
The VCT’s investments
are heavily exposed
to the Feed in Tariff
(FiT) regime. Events
such as the Russian
Federation’s invasion of
Ukraine, conflict in the
Middle East, economic
recession, increasing
interest rates and
inflation.
Retrospective changes
to the regimes. Changes
in energy prices and
inflation. An increase in
inflation results in higher
interest charges for the
debt facility.
A significant negative
impact on performance
in respect of regime
changes, low inflation
and energy prices can
reduce portfolio revenue.
The Investment Adviser and Board
members closely monitor policy and geo-
political developments. However, the UK
Government has a general policy of not
introducing retrospective legislation. The
Investment Adviser and Board regularly
review the valuation model and its inputs.
Inflation has fallen considerably since its
double-digit highs in 2022. It has stabilised,
and was at 1.7% at 30 September 2024 just
below the long-term BoE target of 2%.
Lower inflation reduces the increase of
interest charges for the debt facility.
Lower energy prices and lower inflation
reduces portfolio performance as returns
are directly linked to both factors.
(Retroactive)
change to
Energy Market
regulation and
policies
The VCT operates within
the UK Energy market
which is governed by UK
regulation and could be
subject to change.
The current or future UK
Government may decide
that subsidies provided
to renewable energy
generation assets in the
form of feed-in-tariffs
(FiTs) pose too big a
burden on electricity
consumers and reduce
or even eliminate them
retroactively. Similarly,
other measures that
achieve a similar effect
such as special taxes,
a cap on applicable
inflation rates, limits on
generated KWhs that
earn FiTs.
A significant negative
impact of the renewable
energy generation
assets revenue reducing
the cash availability
of the VCT. The EGL
was introduced from
1 January 2023 and
legislated for in Part 5
of Finance Act (Number
2) 2023. The levy is
legislated to remain in
force until 31 March 2028.
The Investment Adviser continuously
monitors the regulatory landscape in the
UK. If an action that retroactively targets
these subsides it would join forces with
other owners of these assets and vigorously
challenge such retroactive law changes
in the courts. All of the sites owned by the
VCTs are fully-accredited which means that
there is no risk of an individual asset losing
its subsidy.
The previous government introduced the
EGL from 1 January 2023 to tax exceptional
profits up to 31 March 2028. The EGL does
not impact the VCT’s portfolio given its
smaller size, but any potential acquirer may
subsequently incur this levy.
Changes in regulation and policies are more
likely with a new UK government in place
since July 2024.
22
Gresham House Renewable Energy VCT1 plc
Principal risks since inception to 13 July 2021
The principal financial risks faced by the VCT, which include interest rate, market price, investment valuation, credit and liquidity risks, are
summarised within Note 1 to the financial statements.
Note 18 includes an analysis of the sensitivity of valuation of the portfolio to changes in each of the key inputs to the valuation model.
Other principal risks faced by the VCT have been assessed by the Board and grouped into the key categories outlined below:
Æ underperformance;
Æ loss of VCT status;
Æ VCT Regulations;
Æ regulatory and compliance;
Æ operational;
Æ economic, political and other external factors; and
Æ government intervention in the renewables market.
Principal risks 13 July 2021 to 30 September 2024
In approving a new Investment Policy for the Company, a number of risks which are material and currently known to the Company have been
disclosed. Additional risks and uncertainties not currently known to the Company, or that the Company deems immaterial, may also have an
adverse effect on the Company.
The main risks identified as part of the new Investment Policy of the Company are:
Risk identified Context Mitigation
Asset diversification In a Managed Wind Down, the investment portfolio will be
reduced as investments are realised and concentrated
in fewer holdings, and the mix of asset exposure will be
affected accordingly.
None identified.
Ownership All of the VCT’s main solar assets are owned 50:50
between the VCT and VCT2 and there are no rights
attached to such ownership that would allow one
company to force the other to sell its share in each asset.
The VCTs will sell their shares in each asset
simultaneously, so that no VCT holds more than 50% of
the underlying assets.
Volatility in NAV and/or
share price
The VCT might experience increased volatility in its Net
Asset Value and/or its share price as a result of possible
changes to the Portfolio structure following the adoption
of the new Investment Policy.
None identified.
Sale of assets The VCT’s assets may not be realised at their carrying
value, and it is possible that the VCT may not be able
to realise some assets at any value. The VCT’s assets’
fair value is linked to estimates and assumptions
about a variety of matters, including macroeconomic
considerations, which assumptions may prove to be
incorrect and which are subject to change. A material
change of governmental, economic, fiscal, monetary or
political policy, may result in a reduction in the value of
the VCT’s assets on sale.
The Board has engaged several experts in this field
to ensure an appropriate sale price is reached. The
Directors will ensure that the sale price reflects the
best available offer for the Company’s assets taking into
account future income generation by the portfolio and
the age and condition of the assets.
Sale of assets Sales commissions, liquidation costs, taxes
and other costs associated with the realisation
of the VCT’s assets together with the usual
operating costs of the VCT will reduce the cash
available for distribution to the Shareholders.
The Investment Adviser prepares detailed cash flow
forecasts which are presented to the Board quarterly.
The forecasts include the additional costs expected to be
incurred during the Managed Wind Down of the VCT.
Sale of assets A sale of the VCT’s assets may prove materially more
complex than anticipated, and the distribution of
proceeds to Shareholders may be delayed by a number
of factors, including, without limitation, the ability of
a liquidator to make distributions to Shareholders.
The Board has engaged several experts in this field,
to ensure against an extended handover period. If an
extended handover period occurs then it is the Directors
intention to ensure that the sale value obtained will
ultimately be in Shareholders’ interests.
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Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Viability statement
In accordance with Provisions 33 and 36 of
the 2019 AIC Code of Corporate Governance,
the Directors have conducted a robust
assessment of the potential strategic
decisions facing the VCTs that would threaten
their future solvency or liquidity, how these
strategic decisions are being managed and
Following the results of the continuation vote
at the 2021 AGM and with the shareholders’
subsequent approval of the Managed Wind
Down of the Company at the 2021 General
Meeting (13 July 2021), the VCTs commenced
the sale of assets process, with a sale
completion in April 2023, and the sale of the
remaining assets ongoing at the date of this
statement. Both the Managed Wind Down and
the ongoing sales of assets were considered
by the board as part of their assessment.
Following the dissolution of Rezatec in
September 2024, and without a sale of the
remaining assets in the 12 months to follow,
the Company’s qualifying ratio is expected
to fall below 80% before September 2025
when the 12 month disregard lapses by which
date the Company will need to have entered
voluntary liquidation to ensure compliance
with VCT rules. In case the ongoing sale
process leads to a successful sale during
the indicated 12 month period, the VCTs
will consider entering voluntary liquidation
sooner.
The Board considers that the VCT remains
viable up until the point at which the voluntary
liquidation will complete.
In making this assessment, the Boards
have taken the following scenarios into
consideration:
Æ scenario 1: Sale of all VCTs investments
followed by VCTs entering voluntary
liquidation by September 2025;
Æ scenario 2: No sale of VCTs investments
and the VCTs entering voluntary
liquidation by September 2025;
Æ scenario 3: No sale of VCTs investments
and the VCTs not entering voluntary
liquidation before the date the 80%
qualifying holding test falls below the 80%
following the lapse of Rezatec 12 month
disregard breaching VCTs rules and losing
VCTs status.
For each scenario mitigating factors are in
place.
The Board noted that the SPVs have good
debt cover and that there are sufficient cash
reserves at the SPV level at the date of this
statement, available to be paid up to the VCT
through dividends, reverse loans, interest
payments or the repayment of existing
shareholder loans, to cover debt and running
& sale of assets costs up to the VCTs entering
voluntary liquidation.
The Board have assessed the VCT’s ability to
cover its annual running costs under several
stress scenarios evaluating the impact of
higher VCT running costs. The SPVs cash
balances at the date of this statement were
used as VCTs income. No stress testing was
applied to the SPVs cash at bank. The Board
noted that even under the most extreme
reasonable assumptions increasing the VCTs
expenses by 20%, that the VCTs were able to
cover its costs.
The Directors have been advised to start the
process of a members’ voluntary liquidation
timely to avoid scenario 3 to occur.
The Directors believe that the VCT is well
placed to manage its potential strategic
decisions successfully. Based on the results,
the Board confirms that, taking into account
the VCT’s current position and subject to
the potential strategic decisions faced by
the business, the VCT will be able to meet
its liabilities under the scenarios presented
as they fall due until the point at which the
voluntary liquidation completes.
Directors’ remuneration
It is a requirement under the Companies Act
2006 for Shareholders to vote on the Directors’
remuneration every three years, or sooner if
the VCT wants to make changes to the policy.
The Directors’ remuneration policy for the
three-year period from 27 April 2023 is set out
on page 34.
Annual running costs cap
Following the IAA amendment on 25 June
2024, the annual running costs for the year,
initially capped at 3.0% of net assets, are now
capped at 5.0% of net assets or £625,000,
whichever is lower; any excess will either be
paid by the Investment Adviser or refunded by
way of a reduction of the Investment Adviser’s
fees. Annual Running Costs for the year to
502,000 (2023:
2.8% of the cap of 3.0% of the net assets
to the VCT) less than the cap of £625,000,
therefore the cap has not been breached.
Performance Incentive
The structure of the ‘A’ Shares, whereby
Management owns one third of the ‘A’ Shares in
issue (known as the “Management ‘A’ Shares”),
acts as a Performance Incentive mechanism.
The allocation to the ‘A’ shares of any revenue
or capital dividends declared by the VCT, will
be increased if, at the end of each year, the
hurdle is met, which is illustrated below:
i) Shareholders who invested under the
offer for subscription receive dividends in
excess of 5.0p per Ordinary Share in any
one financial period; and
ii) one Ordinary Share and one ‘A’ Share has
a combined net asset value of at least
100.0p.
The Performance Incentive is calculated
each year and is not based on cumulative
A summary of how proceeds are allocated between Shareholders and Management, before and after the hurdle is met, and as dividends per Ordinary
Share increase is as follows:
Hurdle criteria:
Annual dividend per Ordinary Share 0-5p 5-10p >10p
Combined NAV Hurdle N/A >100p >100p
Allocation:
Shareholders 99.97% 80% 70%
Management 0.03% 20% 30%
Strategic Report (continued)
24
Gresham House Renewable Energy VCT1 plc
As the NAV as at 30 September 2024 was below 100p, the NAV hurdle for the year was not met and no dividend in respect of the ‘A’ Shares was paid during
the year, therefore there was no Performance Incentive paid.
VCT status
The VCT has reappointed Philip Hare & Associates LLP (Philip Hare) to advise it on compliance with VCT requirements, including evaluation of
investment opportunities as appropriate and regular review of the portfolio. Although Philip Hare works closely with the Investment Adviser, they
report directly to the Board.
Compliance with the VCT regulations for the year under review is summarised as follows:
Position at the
year ended
30September
2024
1. To ensure that the VCT’s income in the period has been derived wholly or mainly (70% plus) from shares or securities; 100.0%
2. To ensure that the VCT has not retained more than 15% of its income from shares and securities; – see note below 2.6%
3. To ensure that the VCT has not made a prohibited payment to shareholders derived from an issue of shares since 6 April 2014; 0.0%
4. To ensure that at least 80% by value of the VCT’s investments has been represented throughout the period by shares or
securities comprised in qualifying holdings of the VCT;
81.7%
5. To ensure that at least 70% by value of the VCT’s qualifying holdings has been represented throughout the period by holdings
of eligible shares (disregarding investments made prior to 6 April 2018 from funds raised before 6 April 2011);
94.0%
6. To ensure that, of funds raised on or after 1 October 2018, at least 30% has been invested in qualifying holdings by the
anniversary of the end of the accounting period in which the shares were issued;
Complied
7. To ensure that no holding in any company has at any time in the period represented more than 15% by value of the VCT’s
investments at the time of investment;
Complied
8. To ensure that the VCT’s ordinary capital has throughout the period been listed on a regulated market; Complied
9. To ensure that the VCT has not made an investment in a company which causes it to receive more than the permitted
investment from State Aid sources;
Complied
10. To ensure that since 17 November 2015, the VCT has not made an investment in a company which exceeds the maximum
permitted age requirement;
Complied
11. To ensure that since 17 November 2015, funds invested by the VCT in another company have not been used to make a
prohibited acquisition; and
Complied
12. To ensure that since 6 April 2016, the VCT has not made a prohibited non-qualifying investment. Complied
The Directors, with the help of the Investment Adviser, monitor and ensure the investee companies have less than £5mn
state backed financing in a 12-month period listed in order to remain compliant with the VCT regulations.
Share Buybacks
The Board has decided that the VCT will not be buying in Shares for the foreseeable future as highlighted in the Interim Results, as
the VCT needs to conserve such cash as it generates for the Managed Wind Down of the VCT and the payment of dividends.
Future prospects
The Board’s assessment of the outlook and future strategy of the VCT are set out in the Chairman’s Statement and Investment Adviser’s Report.
25
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Sustainable
Investing
The VCT seeks to conduct its affairs responsibly
and Gresham House, the Investment Adviser, is
encouraged to consider environmental, social
and community issues, where appropriate,
and the Board will continue to monitor the
Investment Adviser’s progress in these areas.
The Board is conscious of its potential
impact on the environment as well as
its social and corporate governance
responsibilities. The Investment Adviser
has presented its Environmental, Social and
Governance (ESG) strategy to the Board.
The VCT, whilst not having an explicit
sustainable investment objective,
demonstrates clear consideration of
environmental characteristics by investing
in technologies that contribute to climate
change mitigation by supporting a
decarbonisation of the energy system
in the UK and a net zero economy
underpinned by cheap clean electricity.
Sustainable Investing at Gresham House
The Investment Adviser is committed to
sustainable investment as an integral part of its
business strategy. Since 2021, Gresham House
has enhanced its approach to sustainability
by setting an ambition to “be the manager
of choice for sustainable investment client
solutions” outlined in the company wide
GH30 targets and as set in Gresham House’s
Corporate Sustainability Strategy (CSS). The
CSS details objectives and actions to ensure
its progresses against its ambition to be a
leader in sustainable investment including
integrating sustainability and stewardship
responsibilities into the management of
each asset division. More information on
Gresham House’s sustainability approach
and CSS can be found in its Sustainable
Investment Report: https://greshamhouse.
com/sustainable-investment-report/
Policies and processes
Gresham House publishes a Sustainable
Investing Policy along with asset specific
policies, including the New Energy Sustainable
Investment Policy, which covers Gresham
House’s sustainable investment commitments,
how the investment processes meet these
commitments and the application of the
Sustainable Investment Framework.
The Sustainable Investment Team assesses
adherence to the commitments in the
Sustainable Investment Policies on an
annual basis and provides updates on
the findings of these assessments to the
Sustainability Executive Committee.
Sustainability Executive Committee
The Investment Adviser’s Sustainability
Executive Committee (Sustainability ExCo)
was established in 2021. The Sustainability
ExCo is chaired by the Director of Sustainable
Investment and requires representation
from across the business including from the
Group Management Committee, Divisional
heads and Heads of operational teams. The
Sustainability ExCo sets and oversees the
Gresham House Corporate Sustainability
Strategy and ensures priority areas of
sustainability related risks and opportunities
are proactively identified and debated.
New Energy Sustainable Investment
Committee
The VCTs investment advisers’ services are
provided by Gresham House New Energy
division. The division established the New
Energy Sustainable Investment Committee
(NESIC) in 2022 with a purpose to provide
leadership, strategic direction and implement
processes to enhance the integration of
sustainability across the New Energy division,
supporting the achievement of fund-specific
objectives and the CSS. The committee
supports the division to improve sustainability
governance and stewardship of assets.
The core objectives of the NESIC include:
Æ to become the experts in sustainability
within the New Energy division and apply
their knowledge to their areas of business.
Æ to be advocates for sustainable investment
and innovation for the division.
Æ to set and oversee the New Energy
sustainability objectives and targets
at fund and divisional level, aligned to
Gresham House Corporate Sustainability
Strategy.
Æ to ensure key sustainability related
risks and opportunities are proactively
identified and managed by the division.
Æ to ensure that New Energy Sustainable
Investment (SI)-related tools, processes,
frameworks and data remain relevant
and meet commitments made in the
New Energy Sustainable Investment
Policy to ensure the division is able to
evidence SI contribution and progress to
New Energy Sustainability Objectives
The NESIC developed and agreed a set of
sustainability objectives for the division
applicable to all assets under management
including these VCTs solar and wind
assets. The objectives were determined
by identifying the ESG topics deemed
most material to the assets. They were
also selected to align with the core topics
and objectives in the Investment Adviser’s
2025 Corporate Sustainability Strategy.
The Sustainable Investing report forms part of the Strategic Report.
26
Gresham House Renewable Energy VCT1 plc
NESIC set of sustainability objectives relevant to the VCTs below:
Table 1: New Energy Sustainability Objectives
Topic 2025 Objective
G: Risk and Compliance Become a leader in the measurement and disclosure of ESG risks and outcomes.
Have a comprehensive set of ESG KPIs to support investment and asset management decisions and
regularly report these to stakeholders.
G: Marketplace Responsibility Have market-leading Sustainable Investment policies and processes and ensure all investment activities
meet commitments at a high-quality level.
G: Governance & Ethics Engage with key counterparties to increase capacity of renewable energy or battery storage and the
contribution of these assets to a low carbon economy.
E: Climate Change & Pollution Demonstrate the role of New Energy in the energy transition and understand the carbon footprint of the full
lifecycle of assets.
E: Natural Capital Fully understand natural capital impacts and dependencies and aim to demonstrate enhancement of
biodiversity for all sites.
S: Supply Chain Management Determine best-in-class suppliers to work with long-term, and encourage more responsible supplier
practices, reducing supply chain sustainability risks.
E: Waste Management Incorporate full lifecycle analysis into investment and supplier decision making (product design,
construction, operation and end-of-life use) to reduce negative environmental and social impacts of assets.
Develop a market-leading approach to end-of-life use.
These objectives have and will continue to focus current and future sustainability-related activities for the division to 2025 as described throughout
this report. A review will take place in 2024 to determine progress made against the targets and outstanding actions required to achieve each
objective by the targeted deadline of 2025.
Risk and Compliance: Embedding ESG factors
As the assets within the VCTs are all well-
established, the assessment of ESG is
applied as part of our asset management
activities. All Operations & Maintenance
providers are required to report on various
ESG factors, including Health & Safety
and Environmental risks or incidents. Any
significant incidents must be reported to
us within 24 hours. Furthermore, they are
also expected to be proactive and to make
recommendations for improvements.
The team continues to work to expand the ESG
key performance indicators (KPIs) measured,
reported, and monitored by the New Energy
division for all assets under management,
including the VCTs. This reflects increased
investor and regulatory demand for ESG
data and the Investment Adviser’s ambitions
to enhance ESG data and transparency.
It is anticipated that the expanded ESG
data will be used by investment teams
and asset management teams to increase
their understanding of the operational ESG
performance of assets under management and
to identify any material ESG risks. It is expected
that the asset management team will aim to
improve ESG metrics over time, as feasible
within the context of the existing fund mandate.
In 2023, the Construction and Asset
Management team integrated ESG data
requests into Engineering, Procurement and
Construction (EPC) and supplier contracts. As
a result of this integration, fund level reporting
is now available across a range of ESG KPIs.
Work is in progress to produce a gap analysis
of remaining ESG KPIs, and a feasibility
assessment will be carried out to inform a
project plan for further ESG data collection.
Supply Chain Management
The Investment Adviser has had a Supply
Chain Policy in place since 2020. The
Supply Chain Policy covers material ESG
topics and places obligations on suppliers
(including contractors) to ensure their own
compliance, as well as the compliance of
their subcontractors, with the Policy. It also
requires suppliers to monitor and report any
non-compliance to the Investment Adviser.
27
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Sustainable Investing (continued)
1 Assuming an “all non-renewable fuels” emissions statistic of 437tCO2/GWh of electricity supplied, BEIS statistics July 2024, Digest of UK Energy Statistics, Table 5.14 (“Estimated carbon
dioxide emissions from electricity supplied”).”‘Carbon avoided” calculated using Renewable UK methodology: Carbon reduction is calculated by multiplying the total amount of electricity
generated by solar and wind per year by the number of tonnes of carbon which fossil fuels would have produced to generate the same amount of electricity.
2 Assuming an average annual electricity usage per household of 2.7MWh, as quoted by OFGEM May 2023. “Homes powered” calculated using Renewable UK methodology: MWh divided by
average annual domestic electricity consumption. Household power consumption dropped in 2023 due to high power prices.
Since July 2021, all new supplier contracts have
been updated to include clauses specifically
mandating suppliers to declare that they have
not been involved in any practices linked to
modern slavery and that they will permit on-
site audits at any time should we have reason
to suspect instances of slavery and human
trafficking. Any VCT suppliers with contracts
due for renewal will be obliged to update
clauses relating to modern slavery within
their contract terms. Gresham House is in the
process of reviewing existing sustainability
related policies and procedures including those
related to human rights, modern slavery and
supply chain management to meet and surpass
new regulatory requirements and achieve
our New Energy sustainability objective.
Operators of Gresham House managed
renewables projects are asked to complete
an annual questionnaire relating to both
their own labour practices and supply
chain management regarding material
sourcing from China. To mitigate the risk
of low response rates, completion of the
questionnaire is now mandated as part
of pre-qualification for new suppliers.
Gresham House recognizes that challenges
relating to modern slavery in the solar module
supply chain are a systemic issue that can be
hard to influence as a relatively small player in
the renewables industry. Therefore, Gresham
House became a member of the Solar Energy
UK Responsible Sourcing Steering Group in
Q2 2023. The Investment Adviser believes
this is a key mechanism through which it can
better understand risks relating to modern
slavery in the supply chain and encourage
regulatory and long-term solutions for a more
diversified, modern slavery free supply chain.
Climate Change & Pollution
The VCTs’ investment strategy materially
contributes to the UK’s net-zero Strategy
and ambition to decarbonise the energy
system. Based on the 18,993,000kWh
electricity generated by the renewable
assets in the portfolio of the VCT and
VCT2, it is estimated that the fund avoided
8,300 tonnes of CO¹ and powered c. 7,035
Greenhouse Gas (GHG) Emissions. Emissions
can be broken down into three categories
by the Greenhouse Gas Protocol:
Æ Scope 1: all direct emissions from the
activities of the VCT or under its control.
Æ Scope 2: indirect emissions from
electricity purchased and used by the VCT.
Æ Scope 3: all other indirect emissions from
activities of the VCT. This includes water
consumption, waste disposal, and third-
party fuel use.
The Investment Adviser updated its
methodology to measuring the carbon
emissions of the VCT and VCT2 in 2023
to enhance the reporting of the VCTs
emissions. The operational activities at
each site, such as water consumption and
vehicle fuel consumption, were recorded
throughout the year and converted to tCOe
using UK government conversion factors.
This new methodology acknowledges
the lifecycle emissions associated with
renewable energy sources and although
these assets are lower carbon emitters,
they still have a carbon footprint.
Table 2: Carbon footprint of each VCT in 2023.
VCT1 Plc VCT2 Plc
Scope 1 (tCOe) 17.2 17.2
Scope 2 (tCOe) 0.0 0.00
Scope 3 (tCOe) 2.0 2.0
Revenue Carbon
Intensity (Scope 1 + 2)
tCOe/£m
16.6 16.3
Gresham House conducted its carbon foot
printing for the calendar year (1 January 2023
– 31 December 2023) so the value reported
corresponds to the emissions produced
in this period, rather than the reporting
period of the VCTs. As a result, this value
includes the emissions of two assets that
were sold in the previous reporting period.
In previous years, the VCTs emissions
were reported as 0 tCOe in line with
guidance by an external consultant that
supported the Investment Adviser in the
carbon footprint measurement for all
Gresham House financed emissions.
The Investment Adviser will continue to
seek best practice and enhance reporting
where possible by considering further ways
to monitor and measure the embodied
carbon emissions related to the VCT.
Natural Capital
The Investment Adviser continues
to manage all assets in line with the
biodiversity commitments and habitat
management plans instigated as part of
project development and approvals.
Director’s Duties
Directors must consider the long-term
consequences of any decision they make.
They must also consider the interests of
the various stakeholders of the VCT, the
impact the VCT has on the environment and
community and operate in a manner which
maintains the VCT’s reputation for having
high standards of business conduct and
fair treatment between Shareholders.
Fulfilling this duty naturally supports the VCT in
its Investment Objective to maximise tax-free
capital gains and income to Shareholders and
helps ensure that all decisions are made in a
responsible and sustainable way. In accordance
with the requirements of the Companies
(Miscellaneous Reporting) Regulations 2018,
and the AIC Code, the information overleaf
explains how the Directors have individually
and collectively discharged their duties under
section 172 of the Companies Act 2006.
28
Gresham House Renewable Energy VCT1 plc
Role of the Board
The Board, which comprised of three
independent Non-Executive Directors during
the financial year with a broad range of
skills and experience, retains responsibility
for taking all decisions relating to the VCT’s
principal objectives, corporate governance
and strategy, and for monitoring the
performance of the VCT’s service providers.
The Board aims to ensure that the VCT
operates in a transparent culture where all
parties are able to contribute to the decisions
made and challenge where necessary with the
overall aim of achieving the expectations of
shareholders and other stakeholders alike.
In discharging their section 172 duties
the Directors have regard to the likely
consequences of any decisions during the
Managed Wind Down process; the need to
foster the VCT’s business relationships with
suppliers, customers and others; the impact
of the VCT’s operations on the community
and environment; the desirability of the VCT
maintaining a reputation for high standards of
business conduct and the need to act fairly as
between members of the VCT.
The Board works very closely with the
Investment Adviser and Company Secretary to
ensure there is visibility and openness in how
the affairs of the VCT are being conducted.
The VCT co-owns all its assets with Gresham
House Renewable Energy VCT2 plc (VCT2).
The VCT is an investment vehicle, externally
managed, has no employees, and is overseen
by an independent Non-Executive board of
Directors. As such the Board considers its
stakeholders to be the shareholders, the
service providers, including the Investment
Adviser, and regulatory bodies.
Following the adoption of the new
Investment Policy from 13 July 2021, the
VCT’s principal objective is to manage the
Company with the intention of realising all
remaining assets in the portfolio in a prudent
manner consistent with the principles of
good investment management and with a
view to returning cash to Shareholders in an
orderly manner.
Key Stakeholders
Shareholders
The Board engages with the VCT’s
shareholders in a variety of ways, including
annual and half-yearly reports and accounts,
an AGM and information provided on the
Investment Adviser’s website as well as ad hoc
communications with shareholders.
The Registrar is available to help shareholders
to manage their shareholding.
The VCT welcomes and encourages attendance
and participation from shareholders at the AGM
and values any feedback and questions it may
receive from shareholders ahead of and during
the AGM.
The Board communicates with its shareholders
through the publication of Annual and Half-Year
reports which are available on the VCT’s website
(https://greshamhouse.com/real-assets) and
sent to Shareholders.
The Board is also happy to respond to any
written queries made by shareholders during
the course of the period, or to meet with major
shareholders if so requested. In addition to the
formal business of the AGM, representatives
of the Investment Adviser and the Board are
available to answer any questions a Shareholder
may have. During the period the Board engaged
with shareholders on multiple matters,
including updates on continuing discussions
with potential purchasers of the remaining
solar and wind assets and the amendment to
the investment advisory agreement between
the VCT and Gresham House in June 2024.
Details of these matters are included in the
The Directors consider that in conducting the business of the VCT over the course of
the year they have complied with Section 172(1) of the Companies Act 2006 (the Act) by
fulfilling their duty to promote the success of the VCT and to act in the way they consider,
in good faith, would be most likely to promote the success of the VCT for the benefit of its
members as a whole, whilst also considering the broad range of stakeholders who interact
with and are impacted by the VCT’s business, especially with regard to major decisions.
Section 172
The Section 172 statement forms part of the Strategic Report.
29
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Investment Adviser
The Board has delegated authority for day-to-
day management of the VCT to the Investment
Adviser. The Board then engages with the
Investment Adviser in setting, approving and
overseeing the execution of the business
strategy and related policies. The Investment
Adviser attends Valuation Forums, Board
meetings and Audit Committee meetings to
update the Directors on the performance of the
portfolio. At every quarterly Board meeting a
review of financial and operational performance,
as well as legal and regulatory compliance, is
undertaken. Since the General Meeting held on
13 July 2021, the Managed Wind Down of the
Company has been reviewed at each quarterly
Board meeting and at ad hoc board meetings
being held as and when required.
The Board also reviews other areas over the
course of the financial year including the VCT’s
business strategy, key risks, stakeholder-related
matters, diversity and inclusion, environmental
matters, corporate responsibility and
governance, compliance and legal matters.
The Investment Adviser’s performance is critical
for the VCT to successfully deliver its investment
strategy and meet its objectives.
Service Providers
The VCT has a limited pool of service providers
which include the Investment Adviser, the
Administrator, the Registrar, the Legal Advisers,
the Auditor, the Tax Adviser and the VCT
These service providers are fundamental to
ensuring that as a business the VCT meets the
high standards of conduct that the Board sets.
The Board meets at least annually to review
the performance of the key service providers
and receives reports from them at Board and
Committee meetings.
The Board has regular contact with the two
main service providers (the Investment
Adviser and Administrator) through quarterly
board meetings, with the Chairman and Audit
Chairman meeting these providers more
regularly. The Audit Committee also reviews the
controls of the VCT’s service providers on an
annual basis to ensure that they are performing
their responsibilities in line with Board
expectations and providing value for money.
Regulators/Government
The Board regularly considers how it meets
regulatory and statutory obligations and follows
voluntary and best-practice guidance, including
how any governance decisions it makes impact
its stakeholders both in the shorter and in the
longer-term.
The VCT engages an external adviser to report
half-yearly on its compliance with the VCT
rules and a Company Secretary report is tabled
quarterly at board meetings.
ESG
Details on ESG are included in the Sustainable
Investing section on pages 26 to 28.
Key Board decisions and specific examples of
Stakeholder consideration during the year
The Board is fully engaged in both oversight
and the general strategic direction of the VCT.
During the year, the Board’s main strategic
discussions focused around the below items.
Managed Wind Down process
Following the General Meeting held on 13 July
2021, the shareholders resolved to approve
the Managed Wind Down of the Company and
associated amendments to the Company’s
Investment Policy. Under the Managed Wind
Down process, the Company has continued
to be managed with the intention of realising
all assets in its Portfolio in a prudent
manner consistent with the principles of
good investment management and with a
view achieving fair value for the Company’s
assets and subsequently returning cash to
shareholders in an orderly manner.
To that effect, the Board’s strategic discussions
have centred on the sale of the full remaining
portfolio of solar and wind assets. Particular
oversight and direction from the Board has been
provided with regard to ongoing discussions
with potential purchasers of the solar and wind
assets as well as the continued resolution of the
ongoing grid connection issue at the site in South
Marston. On 27 September 2024, the Company
confirmed that it had chosen Downing LLP’s
offer to commence the due diligence process to
Time has also been spent by the Board in
considering the impact of both the portfolio sale
and the dissolution of Rezatec and bio-bean on
compliance with the 80% qualifying holdings
requirement that applies to the Company as
a VCT. With no new or further investments
anticipated, the Company’s qualifying ratio is
expected to fall below 80% before September
2025 and, as a result, the Board with the
Investment Adviser and other service providers
have commenced the planning of the Company’s
eventual voluntary liquidation. The Board has
held discussions with potential liquidators with a
view to an appointment to oversee the process.
Once the VCT’s assets are sold the voluntary
liquidation process can be initiated.
Throughout the year, the Board has also
considered how to maximise dividend returns
to shareholders whilst taking into account the
Company’s expected cash requirements and
the potential timeline for and impact of the
sale of investment assets in accordance with
shareholder wishes. To that effect, the Company
declared a 7.5p per Ordinary Share interim
dividend that was paid on 21 December 2023.
The 7.5p interim dividend related to income
generation from the portfolio, but in part also
related to the distribution of the remaining
proceeds arising from the part sale of the
Company’s assets in April 2023. On 2 December
2024, it was announced that the Company would
not pay a dividend in 2024. The Board intends to
declare and pay a dividend as soon as practically
possible following the sale of the remaining
portfolio of assets. The Board takes seriously
its responsibilities to uphold the highest
standards of corporate governance and is open
to constructive dialogue with shareholders and
shareholder bodies.
By order of the Board
Gill Nott
Chairman
29 January 2025
Section 172 (continued)
30
Gresham House Renewable Energy VCT1 plc
37
to 40 forms part of this report.
Share capital
At the year end, the VCT had in issue 25,515,242
Ordinary Shares and 38,512,032 ‘A’ Shares.
All shares have voting rights; each Ordinary
Share has 1,000 votes and each ‘A’ Share has
one vote. Where there is a resolution in respect
of a variation of the rights of ‘A’ Shareholders
or a Takeover Offer, the voting rights of
Ordinary Shares.
Pursuant to the articles and subject to a
special resolution, the VCT is able to make
market purchases of its own shares, up to a
maximum number of shares equivalent to a set
percentage of the total number of each class
of issued shares from time to time. No such
resolution was passed at the Company’s 2024
Annual General Meeting.
Substantial interests
As at 30 September 2024, and the date of this
report, the VCT had not been notified of any
beneficial interest exceeding 3% of the issued
share capital.
Results and dividends
Year ended
30September
2024 £’000
Pence
per Ord
Share
Pence
per ‘A’
Share
Loss for the year 2,418 9.5 -
Dividend
1,914 7.5 -
Directors
The Directors of the VCT during the year and
their beneficial interests in the issued Ordinary
Shares and ‘A’ Shares at 30 September 2024
and at the date of this report are detailed
on page 36 of the Remuneration Report.
Biographical details of the Directors,
all of whom are Non-Executive,
can be found on page 3.
It is the Board’s policy that Directors do not
have service contracts, but each Director
is provided with a letter of appointment.
The Directors’ letters of appointment, are
terminable on three months’ notice by either
side. They are available on request at the
Company’s registered office during business
hours and will be available for 15 minutes
prior to and during the forthcoming AGM.
The Articles of Association require that each
Director retire from office at the next AGM
following their first appointment and that
each Director retires by rotation every three
years and being eligible, offer themselves for
re-election. Giles Clark was appointed as a
director on 30 September 2022 and accordingly
stood for election at the 2023 Annual General
Meeting. David Hunter stood for re-election
in 2023 and Gill Nott will be required to stand
for re-election in 2025 in the event that
the Company has not already completed
the Managed Wind Down by concluding the
process of a members voluntary liquidation.
The Directors’ appointment dates and the
date of their last election are shown below:
Director
Date of
original
appointment
Most recent
date of
re-election
and election*
Gill Nott
(Chairman) 01/05/2018 23/03/2022
David Hunter 18/09/2019 27/04/2023
Giles Clark 30/09/2022 27/04/2023*
The Directors believe that the Board has an
appropriate balance of skills, experience,
independence and knowledge of the Company
and the sector in which it operates to enable
it to provide effective strategic leadership
and proper guidance of the Company.
The Board confirms that, following
the evaluation process set out in the
Corporate Governance Statement on
38, the performance of the Directors
is, and continues to be, effective and
demonstrates commitment to the role.
Report of the Directors
The Directors present the fourteenth
Annual Report and Accounts of the VCT
for the year ended 30 September 2024.
31
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Each Director is required to devote
such time to the affairs of the VCT as
the Board reasonably requires.
Annual General Meeting
The VCT’s fourteenth Annual General
Meeting (AGM) will be held at The Scalpel,
at 3:30pm on 18 March 2025. The Notice
of the Annual General Meeting and Form of
Proxy will be circulated separately following
the publication of this Annual Report.
Any change of format will be notified
via the Company’s website and
Regulatory Information Service.
Auditor
The Independent Auditor’s Report can be
found on pages 41 to 45. At the 2024 AGM, the
shareholders approved the re-appointment of
BDO LLP as the auditor. Separate resolutions
are due to be proposed at the 2025 AGM to
re-appoint BDO LLP and to authorise the
Directors to determine their remuneration.
Directors’ responsibilities
The Directors are responsible for preparing the
Strategic Report, the Report of the Directors,
the Directors’ Remuneration Report and the
financial statements in accordance with
applicable law and regulations. They are also
responsible for ensuring that the Annual Report
includes information required by the UK Listing
Rules of the Financial Conduct Authority.
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 United Kingdom Generally Accepted
Accounting Practice (United Kingdom
accounting standards and applicable law),
including Financial Reporting Standard 102,
the financial reporting standard applicable
in the UK and Republic of Ireland (FRS 102).
Under company law, the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair
view of the state of affairs of the VCT and of
the profit or loss of the VCT for that period.
In preparing these financial statements
the Directors are required to:
Æ select suitable accounting policies and
then apply them consistently;
Æ make judgments and accounting
estimates that are reasonable and
prudent;
Æ state whether applicable UK accounting
standards have been followed, subject
to any material departures disclosed and
explained in the financial statements; and
Æ prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the VCT will
continue in business. As stated in Note,
the Directors do not consider the VCT to
be a going concern and have prepared
the financial statements on a basis
other than that of a going concern since
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the VCT’s transactions, to
disclose with reasonable accuracy at any time
the financial position of the VCT and to enable
them to ensure that the financial statements
comply with the Companies Act 2006. They
are also responsible for safeguarding the
assets of the VCT and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
In addition, each of the Directors considers
that the Annual Report, taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
Shareholders to assess the VCT’s position and
performance, business model and strategy.
Directors’ statement pursuant to the
disclosure and transparency rules
Each of the Directors, whose names and
functions are listed on page 3, confirms that,
to the best of each person’s knowledge:
Æ the financial statements, which have
been prepared in accordance with UK
Generally Accepted Accounting Practice
and the 2014 Statement of Recommended
Practice (updated in July 2022 (SORP)),
‘Financial Statements of Investment Trust
Companies and Venture Capital Trusts’
give a true and fair view of the assets,
liabilities, financial position and profit or
loss of the VCT; and
Æ that the management report, comprising
the Chairman’s Statement, Investment
Adviser’s Report, Review of Investments,
Strategic Report, and Report of the
Directors includes a fair review of the
development and performance of the
business and the position of the VCT
together with a description of the principal
risks and uncertainties that it faces.
Insurance cover
Directors’ and Officers’ liability insurance cover
is held by the VCT in respect of the Directors.
Report of the Directors (continued)
32
Gresham House Renewable Energy VCT1 plc
Website publication
The Directors are responsible for ensuring the
Annual Report and the Financial Statements
are made available on a website. Financial
statements are published on the website of the
Investment Adviser (https://greshamhouse.
com/real-assets) in accordance with
legislation in the United Kingdom governing
the preparation and dissemination of financial
statements, which may vary from legislation in
other jurisdictions. The Directors’ responsibility
also extends to the on-going integrity of the
financial statements contained therein.
Corporate governance
The VCT’s Corporate Governance statement
and compliance with and departures from the
2019 AIC Code of Corporate Governance, which
has been endorsed by the Financial Reporting
Council (www.frc.org.uk), is shown on page 40.
Other matters
The likely future developments in the
business of the Company including the
Managed Wind Down and ongoing sale of
assets process are set out in the Chairman’s
Statement (pages 4 to 5) and in the
Investment Adviser’s Report (pages 6 to 10).
Information in respect of risk
management has been disclosed within
the Strategic Report on page 19.
Information in respect of greenhouse
emissions which is normally disclosed within
the Report of the Directors has been disclosed
within the Sustainable Investing report
part of the Strategic Report on page 28.
During the year, the VCT did not have any
employees (2023: nil) and therefore there
is no comparison data available for the
change in Directors’ remuneration to average
change in employee remuneration.
Events after the end of the reporting period
The VCT has not paid a dividend between the
year end and 28 January 2025. The Company
announced on 2 December 2024 that it
intends on declaring and paying a dividend
as soon as practically possible following the
sale of its remaining portfolio of assets.
Statement as to disclosure of information to
the auditor
The Directors in office at the date of the report
have confirmed, as far as they are aware,
that there is no relevant audit information
of which the Auditor is unaware. Each of the
Directors has 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.
For and on behalf of the Board
Gill Nott
Chairman
29 January 2025
Financial
StatementsGovernanceOverview
33
Gresham House Renewable Energy VCT1 plc
Directors’
Remuneration Report
Annual statement of the Remuneration
Committee
The Remuneration Committee consists of
each of the VCT Directors. The Remuneration
Committee assists the Board to fulfil its
responsibility to shareholders to ensure that
the remuneration policy and practices of the
VCT reward the Directors fairly and responsibly,
with a clear link to corporate and individual
performance and having regard to statutory and
regulatory requirements. The Remuneration
Committee meets as and when required to
review the levels of Directors’ remuneration.
The Committee is also responsible for
considering the need to appoint external
remuneration consultants.
Following a review of the remuneration during
the financial year 2023/24 by the Remuneration
Committee, the Board approved a 6% increase
in the directors’ remuneration. These increases
took effect from 1 October 2024. The changes
to the Directors’ remuneration are outlined in
this report.
Details of the specific levels of remuneration to
each Director as well as the fee increases are
outlined in the report.
Report on Remuneration Policy
Below is the VCT’s remuneration policy. This
policy applies from 27 April 2023. Shareholders
must vote on the remuneration policy every
three years, or sooner, if the VCT wants to
make changes to the policy. The policy was
last approved by Shareholders at the 2023 AGM
and, if the Managed Wind Down of the Company
was still to be completed, will be presented to
Shareholders for approval at the 2026 AGM.
There are currently no planned changes to the
remuneration policy.
The VCT’s policy on Directors’ remuneration is
to seek to remunerate Board members at a level
appropriate for the time commitment required
and degree of responsibility involved and to
ensure that such remuneration is in line with
general market rates. Non-Executive Directors
will not be entitled to any performance related
pay or incentive.
Directors’ remuneration is also subject to the
VCT’s Articles of Association which provide
that:
(i) The aggregate fees will not exceed
£100,000 per annum (excluding any
Performance Incentive fees to which the
Directors may be entitled from time to
time)*; and
(ii) The Directors shall be entitled to be repaid
all reasonable travelling, hotel and other
expenses incurred by them respectively in
or about the performance of their duties as
Directors.
* As highlighted above, the Non-Executive Directors are
not currently entitled to any performance related pay or
incentives under the Company’s adopted remuneration
policy.
Agreement for services
Information in respect of the Directors’
agreements has been disclosed within the
Report of the Directors on page 31.
Performance incentive
The structure of ‘A’ Shares, whereby
Management (being staff of the Investment
Adviser) owns one third of the ‘A’ Shares in
issue (known as the “Management ‘A’ Shares”),
enables a payment, by way of a distribution of
income, of the Performance Incentive to the
Management Team. The performance incentive
structure of ‘A’ shares is detailed on pages 24 to
25 of the Strategic Report.
The NAV hurdle was not met for the financial
year end 30 September 2024 and no dividend
was paid in respect of the ‘A’ shares during
the year, therefore there was no Performance
Incentive.
Annual Report on remuneration
The Board has prepared this report in
accordance with the requirements of the Large
and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008
(SI2008/410) and the Companies Act 2006.
Under the requirements of Section 497 of
the Companies Act 2006, the VCT’s Auditor is
required to audit certain disclosures contained
within this report. These disclosures have
been highlighted and the audit opinion thereon
is contained within the Auditor’s Report on
Directors’ remuneration (audited)
Directors’ remuneration for the VCT for the year
under review is shown in the table below.
The basic annual fees of the Directors during
the year were £29,494 for the Chairman,
£26,712 for the Audit Committee Chairman and
£23,930 for the other Non-Executive Director.
34
Gresham House Renewable Energy VCT1 plc
Effective 1 October 2024, an increase of 6% will be applied to director fees. This increase is within the limit set by the Remuneration Policy. Both
changes are shown in the table below.
Current
Annual
Fee
£
Year ended
30 September
2024
fee
£
Additional
Special
Payment
for the
year end
30 September
2024
£
Total
Year ended
30 September
2024
fee
£
Year ended
30 September
2023
fee
£
Additional
Special
Payment
for the
year end
30 September
2023
£
Total
Year ended
30 September
2023
fee
£
Gill Nott 31,264 29,494 N/A 29,494 27,825 7,500 35,325
David Hunter 28,314 26,712 N/A 26,712 25,200 N/A 25,200
Giles Clark 25,365 23,930 N/A 23,930 22,575 N/A 22,575
Totals 84,943 80,136 0 80,136 75,600 7,500 83,100
The £80,136 above excludes employer National Insurance of £2,291.
No other emoluments, pension contributions or life assurance contributions were paid by the VCT to, or on behalf of, any Director. The VCT does not
have any share options in place.
Annual percentage change in Directors’ remuneration
The following table sets out the annual percentage change in Directors’ fees for the year up to 30 September 2024
1
:
% change
for the year to
30 September
2024
% change
for the year to
30 September
2023
% change
for the year to
30 September
2022
% change
for the year to
30 September
2021
% change
for the year to
30 September
2020
Gill Nott 6 5
(6)
0
(5)
6
(5)
0
(3)
David Hunter 6 5 0
(5)
6.7
(5)
0
(4)
Giles Clark
(2)
6 0 N/A N/A N/A
Stuart Knight
(2)
N/A N/A 0 7.5 0
Duncan Grierson
(2)
N/A N/A 0 7.5 0
(1) Disclosed percentage changes in the table above reflect changes in base underlying annual fees paid to Directors, and do not incorporate additional ad hoc special payments made for additional
work or oversight conducted during any financial period (these special payments are disclosed below)
(2) Effective 30 September 2022, Stuart Knight and Duncan Grierson resigned from the Board and Giles Clark was appointed as a new Non-Executive Director following his resignation from the
Board of VCT2.
(3) In view of the significant additional work involved in the integration of the Investment Adviser into Gresham House and the share top up, the Board agreed, during the year ended 30 September
2018, to pay a one-off additional fee of £5,000 (exclusive of VAT) to Gill Nott and this was paid during the year ended 30 September 2019.
(4) David Hunter was appointed as a Director on 18 September 2019. Disclosure reflects the percentage change in fee for the year to 30 September 2020 in proportion to the pro rata fee paid to David
Hunter for his tenure in the year ended 30 September 2019.
(5) During the financial year 2020/2021, in recognition of their increased oversight responsibilities, the Remuneration Committee approved additional special payments to the Chairman and Chair of
the Audit Committee, calculated at 25% of their annual fee. The additional special payments were split into two payment tranches. The first tranche was paid during the financial year ending 30
September 2021 for additional oversight responsibilities relating to the 2021 financial year and the second tranche was paid in October 2021 for additional oversight responsibilities relating to the
2022 financial year.
(6) During the year to 30 September 2023, in recognition of increased oversight responsibilities in relation to the completion of the sale of certain solar assets in April 2023, the Remuneration
Committee approved an additional special payment of £7,500 to the Chairman. This additional payment was paid on 12 July 2023.
35
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Directors’ Shareholding (Audited)
The Directors of the VCT during the year and their beneficial interests in the issued Ordinary Shares and ‘A’ Shares at 30 September 2024 and at the
date of this report were as follows:
Directors
At the date of
this report
At
30 September
2024
At
30 September
2023
Gill Nott
Ord 24,953 24,953 24,953
‘A’ 24,953 24,953 24,953
David Hunter
Ord - – –
‘A’ - – –
Giles Clark
Ord - – –
‘A’ - – –
Statement of voting at AGM
Remuneration report
At the AGM on 19 March 2024, the votes in respect of the resolution to
approve the Director’s Remuneration Report were as follows:
In favour 4,533,848 votes (100%)
Against 0 votes (0%)
Withheld 19,785 votes
Remuneration policy
At the 2023 AGM, when the remuneration policy was last put to a
Shareholder vote, 91.56% voted for the resolution, showing significant
shareholder support.
Relative importance of spend on pay
The difference in actual spend between 30 September 2024 and
30 September 2023 on Directors’ remuneration in comparison to
distributions (dividends and share buybacks) and other significant
spending are set out in the chart below.
0
1000
2000
3000
4000
5000
2023
2024
Pounds (£’000)
Investment
Advisory
fees
Directors
remuneration
Share
buybacks
Dividends
Dividends on
“Management
‘A’ Shares”
2024/25 Remuneration
The remuneration levels for the forthcoming year for the Directors of the
VCT are shown in the above table on page 35.
Performance graph
The graph below represents the VCT’s performance over the
reporting periods since the VCT’s Ordinary Shares and ‘A’ Shares
were first listed on the London Stock Exchange and shows share
price total return and net asset value total return performance
on a dividends reinvested basis. All returns are rebased to 100 at
10 January 2011, being the date the VCT’s shares were listed.
Gresham House Renewable Energy VCT1 plc NAV Total Return
Gresham House Renewable Energy VCT1 plc Share Price Total Return
Numis Smaller Companies Index
Pence (p)
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
260.0
280.0
300.0
320.0
Dec-
10
Dec-
11
Dec-
12
Dec-
13
Dec-
14
Dec-
15
Dec-
16
Dec-
17
Dec-
18
Dec-
19
Dec-
20
Dec-
23
Dec-
22
Dec-
21
The Numis Smaller Companies Index has been chosen as a comparison
as it is a publicly available broad equity index which focuses on smaller
companies and is therefore more relevant than most other publicly
available indices.
Giles Clark
Remuneration Committee Chairman
29 January 2025
Directors’ Remuneration Report (continued)
36
Gresham House Renewable Energy VCT1 plc
The Board of Gresham House Renewable
Energy VCT1 plc has considered the Principles
and Provisions of the 2019 AIC Code of
Corporate Governance (the AIC Code). The
AIC Code addresses the Principles and
Provisions set out in the 2018 UK Corporate
Governance Code (the UK Code), as well as
setting out additional Provisions on issues that
are of specific relevance to Gresham House
Renewable Energy VCT1 plc.
The Board considers that reporting against the
Principles and Provisions of the AIC Code, which
has been endorsed by the Financial Reporting
Council, provides more relevant information to
Shareholders.
Compliance with the Principles and Provisions
of the AIC Code by the VCT is detailed on
40.
The AIC Code is available on the AIC website
(www.theaic.co.uk). It includes an explanation
of how the AIC Code adapts the Principles and
Provisions set out in the UK Code to make them
relevant for investment companies.
The Board
The VCT has a Board comprising three Non-
Executive Directors, chaired by Gill Nott. Gill Nott,
Giles Clark and David Hunter are independent
from the Investment Adviser. The VCT has
not appointed a Senior Independent Director.
Biographical details of all Board members
(including significant other commitments of the
Chairman) are shown on page 3.
Full Board meetings take place quarterly and the
Board meets or communicates more regularly to
address specific issues. The Board has a formal
schedule of matters specifically reserved for
its decision which includes but is not limited
to: considering recommendations from the
Investment Adviser; making decisions concerning
the acquisition or disposal of investments; and
reviewing, annually, the terms of engagement of
all third party advisers (including the Investment
Adviser and Administrator).
The Board has also established procedures
whereby Directors wishing to do so in the
furtherance of their duties may take independent
professional advice at the VCT’s expense.
All Directors have access to the advice and
services of the Company Secretary. The
Company Secretary facilitates the Board’s
access to full information on the VCT’s assets
and liabilities and other relevant information
requested by the Chairman in advance of each
Board meeting.
The Board has decided that the VCT will not
be buying shares for the foreseeable future
as the VCT wishes to conserve such cash as it
generates for the Managed Wind Down of the
VCT and the potential payment of dividends.
The capital structure of the VCT is disclosed in
Note 19 to the financial statements.
During the period under review, all the Directors
of the VCT were Non-Executive and served on
each committee of the Board. David Hunter is
the Chairman of the Audit Committee and Giles
Clark is the Chairman of the Remuneration and
Nomination Committees. The Audit Committee
normally meets four times yearly, and the
Remuneration and Nomination Committees
normally meet once each year. The Board has
delegated a number of areas of responsibility
to its committees and each committee has
defined terms of reference and duties.
Audit Committee
The Audit Committee is responsible for
reviewing the half-year and annual accounts
before they are presented to the Board, the
terms of appointment of the Auditor, together
with their remuneration, as well as a full review
of the effectiveness of the VCT’s internal control
and risk management systems.
In particular, the Committee reviews,
challenges (where appropriate) and agrees the
basis for the carrying value of the unquoted
investments, as prepared by the Investment
Adviser, for presentation within the half-year
and annual accounts.
The Committee also takes into consideration
comments on matters regarding valuation,
revenue recognition and disclosures arising from
the Report to the Audit Committee as part of the
finalisation process for the annual accounts.
The Committee is also responsible for
reviewing the going concern assessment and
viability statement including consideration
of all reasonably available information about
the future financial prospects of the VCT, the
possible outcomes of events and changes in
conditions and realistic possible responses to
such events and conditions.
The Audit Committee met five times during
the year. The Committee reviewed the internal
financial controls and concluded that they were
appropriate.
As the VCT has no staff, other than the
Directors, there are no procedures in place
in respect of whistle blowing. The Audit
Committee understands that the Investment
Adviser and Administrator have whistle blowing
procedures in place.
External Auditor
The Audit Committee reviews and agrees the
audit strategy paper, presented by the Auditor
in advance of the audit, which sets out the key
risk areas to be covered during the audit and
confirms their status on independence.
The Committee also confirms that the main
areas of risk for the period under review
are the carrying value of investments,
management override of controls and the
potential for fraud in relation to revenue
recognition. The Company faces ongoing
liquidity and solvency risks after the period
under review, in anticipation of the Company’s
need to enter voluntary liquidation once the
majority of the assets have been sold.
The Committee, after taking into consideration
the timeline for the proposed members’
voluntary liquidation of the Company in addition
to comments from the Investment Adviser
and Administrator regarding the effectiveness
of the audit process; immediately before the
conclusion of the annual audit, will recommend
to the Board either the re-appointment or
removal of the Auditor.
Corporate Governance
37
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Under the Competition and Markets Authority
regulations and subject to transitional
provisions, there is a requirement that an
audit tender process be carried out every ten
years and mandatory rotation at least every
twenty years. The VCT undertook an audit
tender in respect of the audit required for the
year ended 30 September 2021 and, following a
competitive tender process in early 2021, BDO
was re-appointed.
Under the FRC’s Revised Ethical Standard
(2024), there is a requirement for the key
audit partner to cease their participation in
the statutory audit not later than five years
from the date of their appointment. In order
to comply with the independence rules of the
FRC’s Revised Ethical Standard and safeguard
the quality of the audit, a new audit partner
was appointed by BDO to oversee the audit for
the year ended 30 September 2024.
Board and Committee Meetings
The following table sets out the Directors’ attendance at the Board and Committee meetings
during the year:
Quarterly
Board
meetings
attended
Adhoc
Board
meetings
attended
Audit
Committee
meetings
attended
Nomination
Committee
meetings
attended
Remuneration
Committee
meetings
attended
(4 held) (14 held) (5 held) (1 held) (1 held)
Gill Nott 4 11 4 1 1
David Hunter 4 13 5 1 1
Giles Clark 4 14 5 1 1
The Directors attended a number of ad hoc board meetings, mainly to discuss the Managed Wind
Down of the VCT and the sale of the remaining assets held by the Company
Remuneration Committee
The Committee meets as and when required
to review the levels of Directors’ remuneration.
The Committee is also responsible for
considering the need to appoint external
remuneration consultants.
Details of the specific levels of remuneration
to each Director are set out in the Directors’
Remuneration Report on page 35.
Financial Reporting
The Directors’ responsibilities statement
for preparing the accounts is set out in the
Report of the Directors on page 32 and a
statement by the Auditor about their reporting
responsibilities is set out in the Independent
Auditor’s report on page 41.
Nomination Committee
The Nomination Committee’s primary function
is to make recommendations to the Board on all
new appointments and also to advise generally
on issues relating to Board composition and
balance. The Committee meets as and when
appropriate. Before any appointment is made
by the Board, the Committee shall evaluate the
balance of skills, knowledge, and experience,
and consider candidates on merit, against
objective criteria, and with due regard for the
benefits of diversity on the Board. Diversity
includes and makes good use of differences
in knowledge and understanding of relevant
diverse geographies, peoples and their
backgrounds including race or ethnic origin,
sexual orientation, gender, age, disability,
During the period, the Committee carried out a
rigorous internal board evaluation during which
it assessed the effectiveness of the Board and
its committees. The Committee found that the
Board was functioning well and had maintained
a strong degree of oversight of the Managed
Wind Down, and it was further confirmed that
all Directors contributed to the discussions
at meetings. A number of topics were raised
and discussed and overall, the Board and its
committees were found to be performing
satisfactorily.
Diversity
The Board currently comprises of three Non-
Executive Directors of which two are male
and one is female. Summary biographical
details of the Directors, including their
relevant experience, are set out on page 3. The
Company has no employees, with day- to-day
executive management functions carried out
by the Investment Adviser.
The Board notes the FCA UK Listing Rules
requirements (UKLR 6.6.6(9), (10)) which set out
targets for board diversity as follows:
Æ At least 40% of board members to be
women;
Æ At least one senior board position (Chair,
chief executive officer (CEO), senior
independent director or chief financial
officer (CFO)) to be held by a woman; and
Æ At least one individual on the board to
be from a minority ethnic background,
defined to include those from an ethnic
background and/or an ethnic group, other
than a white ethnic group, as specified in
categories recommended by the Office for
National Statistics.
As an externally managed Venture Capital Trust,
there is no CEO or CFO. Due to the size of the
Board and the nature of the VCT’s business,
a senior independent director has not been
appointed. However, the Board considers the
Chair of the Company and Chair of any of the
Company’s Committees to be senior positions
in the Company. The below table sets out the
constitution of the Company’s Board against
these targets. The data was collected on a self-
identifying basis.
The Board considers that three Non-Executive
Directors are sufficient given the current size
of the Company. The Board notes that, as of
30 September 2024 and at the time of signing
these financial statements, it did not meet
the first target on gender diversity whilst it did
meet the second as the Chair is a woman. The
Board did not meet the third target on ethnic
diversity. Whilst the Board gives due regard to
the benefits of diversity and the diversity targets
set out in the UKLR, no further appointments
are anticipated as the Company has entered
the Managed Wind Down process and will enter
voluntary liquidation in due course.
38
Gresham House Renewable Energy VCT1 plc
Board Diversity as at 30 September 2024
Gender
Number
of Board
members
Percentage
of the
Board
Number of
senior positions
on the Board
Men 2 67% 3
Women 1 33% 1
Prefer not to say 0 0% 0
Ethnic background
Number of
Board members
Percentage of
the Board
Number of senior
positions on
the Board
White British or other White
(including minority-white groups)
3 100% 4
Other ethnic group 0 0% 0
Prefer not to say 0 0% 0
Relations with Shareholders
Shareholders have the opportunity to meet
the Board at the AGM. The Board is also happy
to respond to any written queries made by
Shareholders during the course of the period, or
to meet with major Shareholders if so requested.
In addition to the formal business of the AGM,
representatives of the Investment Adviser
and the Board are available to answer any
questions a Shareholder may have. The notice
of the fourteenth AGM and proxy form will be
circulated separately following the publication
of this Annual Report.
The terms of reference of the Committees
and the conditions of appointment of
Non-Executive Directors are available to
Shareholders on request.
Internal Control
The Directors are fully informed of the
internal control framework established by the
Investment Adviser and the Administrator
to provide reasonable assurance on the
effectiveness of internal financial control.
The Board is responsible for ensuring that the
procedures to be followed by the advisers and
themselves are in place, and they review the
effectiveness of the internal controls, based
on the report from the Audit Committee, on
an annual basis to ensure that the controls
remain relevant and were in operation
throughout the year.
The Board also reviews the perceived risks
faced by the VCT in line with relevant guidance
on an annual basis and implements additional
controls as appropriate.
The Board also considered the requirement for
an internal audit function and considered that
this was not necessary as the internal controls
and risk management in place were adequate
and effective.
Although the Board is ultimately responsible
for safeguarding the assets of the VCT,
the Board has delegated, through written
agreements, the day-to-day operation of
the VCT (including the Financial Reporting
Process) to the following advisers:
Investment Adviser
Gresham House Asset Management Limited
Administrator and Company Secretary
JTC (UK) Limited
Anti-bribery policy
In order to ensure compliance with the UK
Bribery Act 2010, the Directors confirm that
the VCT has zero tolerance towards bribery and
a commitment to carry out business openly,
honestly and fairly.
Going concern
In assessing the VCT as a going concern, the
Directors have considered the forecasts which
reflect the proposed strategy for portfolio
investments and the result of the continuation
votes at the AGM and General Meeting held on
22 March 2021 and 13 July 2021 respectively.
At the meeting on 13 July 2021, the proposed
special resolution was approved by Shareholders,
resulting in the VCTs entering a Managed Wind
Down and a New Investment Policy replacing the
existing investment policy. The VCT’s principal
objective is to manage the VCT with the intention
of realising the sale or monetisation otherwise of
all remaining assets in the portfolio in a prudent
manner consistent with the principles of good
investment management and with a view to
returning value to Shareholders in an orderly
manner. Given that a formal decision has been
made to wind up the VCT, the Directors intend to
liquidate the VCT.
The VCT will pursue its investment objective
by effecting an orderly realisation of its assets
in a manner that seeks to achieve a balance
between maximising the value received from
those assets and making timely returns of
capital to Shareholders. This process includes
sales of individual assets. The VCT will enter
members’ voluntary liquidation, anticipated
by mid-September 2025, or sooner if the
remaining assets are sold.
Since the start of the Managed Wind Down
in July 2021, the Directors do not consider it
to be appropriate to adopt the going concern
basis of accounting in preparing the financial
statements. On this basis, the Directors have
prepared the VCT’s financial statements on a
basis other than going concern. As a result, the
investments held at fair value through profit
or loss were transferred from fixed assets to
financial statements and subsequent periods.
No additional adjustments in the financial
required to the financial statements as a result
of them being prepared on a basis other than
Share capital
The VCT has two classes of share capital:
Ordinary Shares and ‘A’ Shares. The rights and
obligations attached to those shares, including
the power of the VCT to buy back shares and
details of any significant shareholdings, are set
out on page 31 of the Report of the Directors.
39
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Corporate Governance (continued)
Compliance statement
The UK Listing Rules require the Board to report
on compliance with the AIC Code provisions
throughout the accounting period. With the
exception of the limited items outlined below, the
VCT has complied throughout the accounting year
ended 30 September 2024 with the provisions set
out in Section 5 to 9 of the AIC Code.
a) The VCT has no major Shareholders,
so Shareholders are not given the
opportunity to meet any new Non-
Executive Directors at a specific meeting
other than the AGM. (5.2.3)
b) Due to the size of the Board and the
nature of the VCT’s business, a senior
independent director has not been
appointed. (6.2.14)
c) Due to the size of the Board and the nature
of the VCT’s business, the Board considers
it appropriate for the entire Board to
fulfil the role of the nomination and
remuneration committees. (7.2.22, 9.2.37)
d) Due to the size of the VCT, the Board
thought it would be unnecessarily
burdensome to establish a separate
management engagement committee to
review the performance of the Investment
Adviser. (6.2.17, 7.2.26)
e) Due to the size of the Board and the nature
of the VCT’s business, the Board considers
it appropriate for the entire Board,
including the Chairman, to fulfil the role of
the audit committee. (8.2.29)
f) The Directors are not subject to annual
re-election but must be re-elected every
three years. At the next Annual General
Meeting following a Director’s first
appointment such Director shall retire
from office and be eligible for election.
A Director may then retire at any Annual
Meeting following the Annual General
Meeting at which they last retired and were
re-elected provided that they must retire
from office at or before the third Annual
General Meeting following the Annual
General Meeting at which they last retired
and were re-elected. (7.2.23)
By order of the Board
JTC (UK) Limited
Company Secretary
Company number: 04301763
Registered office:
The Scalpel, 18th Floor
52 Lime Street
London EC3M 7AF
29 January 2025
40
Gresham House Renewable Energy VCT1 plc
Independent auditor’s report to the
members of Gresham House
Renewable Energy VCT1 Plc
Opinion on the financial statements
In our opinion the financial statements:
Æ give a true and fair view of the state of
2024 and of its loss for the year
Æ have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting Practice;
Æ have been prepared in accordance with
the requirements of the Companies
We have audited the financial statements
of Gresham House Renewable Energy
VCT1 Plc (the ‘Company’) for the year ended
30September 2024 which comprise the
Income Statement, the Balance sheet, the
Statement of Changes in Equity, the Cash
Flow Statement, and notes to the financial
statements, including a summary of significant
accounting policies. The financial reporting
framework that has been applied in their
preparation is applicable law and United
Kingdom Accounting Standards, including
Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and
Republic of Ireland (United Kingdom Generally
Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described
in the Auditor’s responsibilities for the
audit of the financial statements section
of our report. We believe that the audit
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Our audit opinion is consistent with the
additional report to the audit committee.
Independence
Following the recommendation of the audit
committee, we were appointed by the Board
of Directors to audit the financial statements
for the year ended 30 September 2011 and
subsequent financial periods. The period of
total uninterrupted engagement including
retenders and reappointments is 14 years,
covering the years ended 30 September 2011 to
30 September 2024. We remain independent
of the Company in accordance with the ethical
requirements that are relevant to our audit of
the financial statements in the UK, including
the FRC’s Ethical Standard as applied to
listed public interest entities, and we have
fulfilled our other ethical responsibilities
in accordance with these requirements.
The non-audit services prohibited by that
standard were not provided to the Company.
Emphasis of matter – financial statements
prepared on a basis other than going concern
We draw attention to Note 1 to the financial
statements which explains that the Directors
intend to liquidate the Company. Therefore, the
Directors do not consider it to be appropriate
to adopt the going concern basis of accounting
in preparing the financial statements.
Accordingly, the financial statements have
been prepared on a basis other than going
concern as described in Note 1. Our opinion
is not modified in respect of this matter.
Overview
Key audit
matter
2024 2023
Valuation of
unquoted
investments X X
Materiality Company financial
statements as
awhole
£198,000
(2023:£285,000)
based on 2% (2023:
2%) of Net assets
An overview of the scope of our audit
Our audit was scoped by obtaining an
understanding of the Company and its
environment, including the Company’s system
of internal control, and assessing the risks
of material misstatement in the financial
statements. We also addressed the risk of
management override of internal controls,
including assessing whether there was
evidence of bias by the Directors that may have
represented a risk of material misstatement.
Independent Auditor’s
Report
41
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit addressed the key audit matter
Valuation of unquoted
investments
See Note 10, Note 18 and
the accounting policy in
Note 2
As disclosed in Note 10,
the Company entered
into a non binding
agreement with a
potential buyer in relation
to the sale of the VCTs
remaining solar and wind
assets. We consider the
valuation of investments
to be the most significant
audit area due to the
judgements involved in
determining unquoted
investment valuations,
and the appropriate
methodology as a result
of the proposed sale.
There is also an inherent
risk of management
override arising
from the unquoted
investment valuations
being prepared by the
Investment Manager,
who is remunerated
based on the net asset
value of the Company.
For these reasons we
considered the valuation
of unquoted investments
to be a key audit matter.
We performed the following procedures on the valuation of unquoted investments:
Æ We obtained an understanding of the Company’s processes for determining the fair
value of unquoted investments and assessed the design and implementation of the
investment valuation processes and controls. This included evidencing management’s
oversight of the valuation process through the Audit Committee and relevant
Valuation Committees;
Æ Considered the appropriateness of overall fair value and valuation movement in the
income statement;
Æ Challenged whether the valuation methodology applied was appropriate under the
International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines and
applicable accounting standards;
Æ Challenged the Investment Manager and the Board on the appropriateness of the
valuation methodology at year end, given that the Company entered into agreement
with a buyer in relation to the sale of the remaining portfolio; and
Æ Reviewed information such as non-binding offers and agreements obtained to
support the reasonableness of the year-end valuation process.
Key observations:
Based on the procedures performed we consider the investment valuations to be
reasonable considering the level of judgement involved.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality
to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the
basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated
as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows
Independent Auditor’s Report (continued)
42
Gresham House Renewable Energy VCT1 plc
Company Financial Statements
2024
(£)
2023
(£)
Materiality £198,000 £285,000
Basis for determining materiality 2 % of Net assets 2 % of Net assets
Rationale for the benchmark applied In setting materiality, we have had regard to the nature and disposition of the investment portfolio.
Given that the VCT’s portfolio is comprised of unquoted investments which would typically have a wider
spread of reasonable alternative possible valuations, we have determined the appropriate benckmark
to be net assets.
Performance materiality £149,000 £214,000
Basis for determining performance
materiality
75% of Materiality 75% of Materiality
Rationale for the percentage applied for
performance materiality
The level of performance materiality applied was
set after having considered a number of factors
including the expected total value of known and
likely misstatements and the level of transactions
in the year.
The level of performance materiality applied
was set after having considered a number of
factors including the Risk assessment of control
environment and consideration of the number of
historical errors identified.
Specific materiality
We determined that for Revenue return before
gain/loss on investments, a misstatement
of less than materiality for the financial
statements as a whole, could influence users
of the financial statements. The company’s
objective is to achieve a balance between
maximising the value received from the
remaining assets in the portfolio and making
timely returns of capital to Shareholders
through dividends. Therefore on-going costs
and revenue returns are important to the
users of the Financial Statements, despite
being considerably smaller in magnitude.
Given that the VCT receives dividend income
from its underlying investee companies,
materiality. As a result, we determined
a specific materiality of £34,000 (2023:
£21,000 ) for those items impacting revenue
return, based on 2% (2023: 2%) of Income.
Reporting threshold
We agreed with the Audit Committee that
we would report to them all individual audit
differences in excess of £9,900 (2023:£14,000)
and for those items impacting Revenue
return before tax £2,000 (2023: £1,050).
We also agreed to report differences below
these thresholds that, in our view, warranted
reporting on qualitative grounds.
Other information
The Directors are responsible for the other
information. The other information comprises
the information included in the Reports and
Accounts other than the financial statements
and our auditor’s report thereon. Our opinion on
the financial statements does not cover the other
information and, except to the extent otherwise
explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our
responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with the
financial statements or our knowledge obtained
in the course of the audit, or otherwise appears
to be materially misstated. If we identify such
material inconsistencies or apparent material
misstatements, we are required to determine
whether this gives rise to a material misstatement
in the financial statements themselves. If, based
on the work we have performed, we conclude that
there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK Listing Rules require us to review
the Directors’ statement in relation to going
concern, longer-term viability and that part
of the Corporate Governance Statement
relating to the Company’s compliance
with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of
our audit, we have concluded that each of
the following elements of the Corporate
Governance Statement is materially
consistent with the financial statements or
our knowledge obtained during the audit.
43
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Independent Auditor’s Report (continued)
Going concern and longer-Going concern and longer-
term viabilityterm viability
Æ The Directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 32; and
Æ The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment
covers and why the period is appropriate set out on page 24.
Other Code provisionsOther Code provisions Æ Directors’ statement on fair, balanced and understandable set out on page 32;
Æ Board’s confirmation that it has carried out a robust assessment of the principal risks set out on page 20;
Æ The section of the Annual Report that describes the review of effectiveness of risk management and internal
control systems set out on page 37; and
Æ The section describing the work of the Audit Committee set out on page 37.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006
and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
Æ the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
Æ the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we are
required to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
Æ adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
Æ the financial statements and the part of the Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
Æ certain disclosures of Directors’ remuneration specified by law are not made; or
Æ we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement, the Directors
are responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and for such
internal control as the Directors determine
is necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the
Directors are responsible for assessing the
Company’s ability to continue as a going
concern, disclosing, as applicable, matters
related to going concern and using the
going concern basis of accounting unless
the Directors either intend to liquidate the
Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement
when it exists. Misstatements can arise from
fraud or error and are considered material
if, individually or in the aggregate, they
could reasonably be expected to influence
the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in respect of
irregularities, including fraud. The extent to
which our procedures are capable of detecting
irregularities, including fraud is detailed below:
44
Gresham House Renewable Energy VCT1 plc
Non-compliance with laws and regulations
Based on:
Æ Our understanding of the Company and
the industry in which it operates;
Æ Discussion with management and those
charged with governance including the
Audit Committee; and
Æ Obtaining an understanding of the control
environment in monitoring compliance
with laws and regulations;
We considered the significant laws and
regulations to include (but not limited
to) compliance with the Companies Act
2006, the FCA listing and DTR rules, the
principles of the UK Corporate Governance
Code, industry practice represented by
the Statement of Recommended Practice:
Financial Statements of Investment Trust
Companies and Venture Capital Trusts (“the
SORP”) and the applicable financial reporting
framework. We also considered the Company’s
qualification as a VCT under UK tax legislation.
Our procedures in respect of
the above included:
Æ Agreement of the financial statement
disclosures to underlying supporting
documentation;
Æ Enquiries of management and those
charged with governance relating to the
existence of any non-compliance with
laws and regulations;
Æ Reviewing the minutes of board meetings
throughout the year to identify any
instances of non-compliance with laws
and regulations and corroborated our
above inquiries.
Æ Obtaining the VCT compliance reports
prepared by management’s expert during
the year and as at year end and reviewing
their calculations to check that the
Company was meeting its requirements to
retain VCT status; and
Æ Involvement of an internal tax expert in the
audit;.
Fraud
We assessed the susceptibility of
the financial statement to material
misstatement including fraud.
Our risk assessment procedures included:
Æ Enquiry with management and those
charged with governance including the
Audit Committee regarding any known or
suspected instances of fraud;
Æ Obtaining an understanding of the
Company’s policies and procedures
relating to:
– Detecting and responding to the risks
of fraud; and
– Internal controls established to
mitigate risks related to fraud.
Æ Review of minutes of meetings of those
charged with governance for any known or
suspected instances of fraud; and
Æ Discussion amongst the engagement
team as to how and where fraud might
occur in the financial statements;
Based on our risk assessment, we considered
the areas most susceptible to fraud to be
the valuation of unquoted investments,
management override of controls and
Revenue recognition of dividend income.
Our procedures in respect of
the above included:
Æ The procedures set out in the Key Audit
Matters section above;
Æ Testing journals posted in the process of
preparation of financial statements on the
basis of supporting documentation and
understanding of the business;
Æ Evaluating whether there was evidence
of bias by the Directors that represented
a risk of material misstatement due to
fraud, including valuation of investments;
Æ Recalculating investment management
fees in total; and
Æ Reviewed underlying investee companies’
accounts and assessed whether sufficient
reserves are available to support
dividends paid.
We also communicated relevant identified
laws and regulations and potential fraud risks
to all engagement team members who were
all deemed to have appropriate competence
and capabilities and remained alert to any
indications of fraud or non-compliance with
laws and regulations throughout the audit
Our audit procedures were designed to respond
to risks of material misstatement in the
financial statements, recognising that the risk
of not detecting a material misstatement due
to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve
deliberate concealment by, for example,
forgery, misrepresentations or through
collusion. There are inherent limitations in the
audit procedures performed and the further
removed non-compliance with laws and
regulations is from the events and transactions
reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities
is available on the Financial Reporting
Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006.
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.
Daniel Quiligotti
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
Date: 29 January 2025
BDO LLP is a limited liability partnership
registered in England and Wales
(with registered number OC305127).
45
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Year ended 30September 2024 Year ended 30September 2023
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Income 3 1,690 - 1,690 1,038 - 1,038
Loss on investments 10 - (3,385) (3,385) - (4,933) (4,933)
1,690 (3,385) (1,695) 1,038 (4,933) (3,895)
Investment advisory fees 4 (127) (42) (170) (235) (78) (313)
Other expenses 5 (380) (174) (554) (412) - (412)
(507) (216) (723) (647) (78) (725)
Profit/(loss) on ordinary activities beforetax 1,183 (3,602) (2,418) 391 (5,011) (4,620)
Tax on total comprehensive income/(loss) and
ordinary activities 7 – – – – – –
Profit/(loss) for the year and total
comprehensive income/(loss) 1,183 (3,602) (2,418) 391 (5,011) (4,620)
Basic and diluted earnings/(loss) per share:
Ordinary Share 9 4.6p (14.1p) (9.5p) 1.5p (19.6p) (18.1p)
‘A’ Share 9 – – – – – –
The above results arise from activities classified as continuing operations, however as described in Note 1, the VCT is in a Managed Wind Down
process. The total column within the Income Statement represents the Statement of Total Comprehensive Income of the VCT prepared in
accordance with Financial Reporting Standards (FRS 102). The supplementary revenue and capital return columns are prepared in accordance with
the Statement of Recommended Practice issued in November 2014 (updated in July 2022) by the Association of Investment Companies (AIC SORP).
Other than revaluation movements arising on investments held at fair value through the profit or loss, there were no differences between the return/
loss as stated above and at historical cost.
The accompanying notes form an integral part of these financial statements.
Income Statement
For the year ended 30 September 2024
46
Gresham House Renewable Energy VCT1 plc
2024 2023
Note £’000 £’000 £’000 £’000
Current assets
Investments 10 14,198 17,713
Costs incurred on sale of VCT’s assets 11 305 253
Debtors 12 14 38
Cash at bank and in hand 1 46
14,518 18,050
Creditors 13 (4,613) (1,596)
Net current asset 9,904 16,454
Creditors: amounts falling due after more than one year 14 - (2,217)
Net assets 9,904 14,237
Capital and reserves
Called up Ordinary Share capital 15 28 28
Called up ‘A’ Share capital 15 41 41
Treasury Shares 16 (2,991) (2,991)
Special reserve 16 8,133 8,995
Revaluation reserve 16 9,955 11,506
Capital reserve – realised 16 (5,305) (3,253)
Revenue reserve 16 44 (89)
Total Shareholders’ funds 9,904 14,237
Basic and diluted net asset value per share
Ordinary Share 17 38.7p 55.6p
‘A’ Share 17 0.1p 0.1p
The financial statements of Gresham House Renewable Energy VCT1 plc on pages 46 to 63 were approved and authorised for issue by the Board of
Directors and were signed on its behalf by:
Gill Nott
Chairman
Company number: 07378392
Date: 29 January 2025
The accompanying Notes form an integral part of these financial statements.
Balance Sheet
As at 30 September 2024
47
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Called
up share
capital
£’000
Share
Premium
Account
£’000
Treasury
Shares
£’000
Special
reserve
£’000
Revaluation
reserve
£’000
Capital
redemption
reserve
£’000
Capital
reserve
realised
£’000
Revenue
reserve
£’000
Total
£’000
At 30 September 2022 69 9,541 (2,991) 4,171 16,871 3 (3,607) (480) 23,577
Total comprehensive (loss)/income - - - - (5,365) - 354 391 (4,620)
Cancellation of Share premium and
Capital redemption reserve - (9,541) - 9,544 - (3) - - -
Dividend paid - - - (4,720) - - - - (4,720)
At 30 September 2023 69 - (2,991) 8,995 11,506 - (3,253) (89) 14,237
Total comprehensive
(loss)/income - - - - (1,550) - (2,051) 1,183 (2,418)
Dividend paid - - - (862) - - - (1,051) (1,913)
At 30 September 2024 69 - (2,991) 8,133 9,955 - (5,305) 44 9,904
The accompanying Notes form an integral part of these financial statements.
Statement of Changes in Equity
For the year ended 30 September 2024
48
Gresham House Renewable Energy VCT1 plc
Note
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Cash flows from operating activities
Loss for the financial year (2,418) (4,620)
Loss on investments 10 3,385 4,933
Cost incurred on sale of VCT’s assets write off 98 -
Dividend income (1,667) (998)
Interest income (23) (37)
Decrease in debtors 1 -
Increase/(decrease) in creditors 733 (131)
Net cash inflow/(outflow) from operating activities 109 (853)
Cash flows from investing activities
Net proceeds from sale of investments/loan note redemptions 10 129 4,456
Cost incurred on sale of VCT’s assets (84) (126)
Interest received 47 25
Dividend income received 1,667 998
Net cash inflow from investing activities 1,759 5,353
Cash flows from financing activities
Dividend paid (1,913) (4,720)
Repayment of loan - 263
Net cash outflow from financing activities (1,913) (4,457)
Net (decrease)/increase in cash (45) 43
Cash and cash equivalents at start of year 46 3
Cash and cash equivalents at end of year 1 46
Cash and cash equivalents comprise
Cash at bank and in hand 1 46
Total cash and cash equivalents 1 46
The accompanying Notes form an integral part of these financial statements.
Cash Flow Statement
For the year ended 30 September 2024
49
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
1. General Information
Gresham House Renewable Energy VCT1 plc (VCT) is a Venture Capital Trust established under the legislation introduced in the Finance Act 1995 and
is domiciled in the United Kingdom and incorporated in England and Wales (Company No. 07378392). The Company’s principal activity is that of a VCT
which invests in renewable energy investments. The registered office of the Company is The Scalpel 18th floor, 52 Lime Street, London, EC3M 7AF.
Going Concern
In assessing the VCT as a going concern, the Directors have considered the forecasts which reflect the proposed strategy for portfolio investments
2021, the proposed special resolution was approved by Shareholders, resulting in the VCTs entering a Managed Wind Down and a new investment
policy replacing the existing investment policy. The VCT’s principal objective is to manage the VCT with the intention of realising the sale or
monetisation otherwise of all remaining assets in the portfolio in a prudent manner consistent with the principles of good investment management
and with a view to returning value to Shareholders in an orderly manner. Given that a formal decision has been made to wind up the VCT , the Directors
intend to liquidate the VCT.
The VCT will pursue its investment objective by effecting an orderly realisation of its assets in a manner that seeks to achieve a balance between
maximising the value received from those assets and making timely returns of capital to Shareholders. This process includes sales of individual
assets. The VCT will enter members’ voluntary liquidation, anticipated by mid-September, or sooner if the remaining assets are sold.
Since the start of the Managed Wind Down in July 2021, the Directors do not consider it to be appropriate to adopt the going concern basis of
accounting in preparing the financial statements. On this basis, the Directors have prepared the VCT’s financial statements on a basis other than
going concern
September 2021 annual financial statements and subsequent periods. No additional adjustments in the financial year ended 30 September 2024 have
been required to the financial statements as a result of them being prepared on a basis other than going concern.
2. Accounting policies
Basis of accounting
The VCT has prepared its financial statements under FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and in
accordance with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” issued
by the Association of Investment Companies (AIC) in November 2014 and revised in July 2022 (SORP) as well as the Companies Act 2006.
The VCT implements new Financial Reporting Standards (FRS) issued by the Financial Reporting Council when they become effective. No new FRS
were implemented during the year.
The financial statements are presented in Sterling (£) as this is the VCT’s functional currency.
Presentation of income statement
In order to better reflect the activities of a Venture Capital Trust and in accordance with the SORP, supplementary information which analyses the
Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The net revenue is the
measure the Directors believe appropriate in assessing the VCT’s compliance with certain requirements set out in Part 6 of the Income Tax Act 2007.
Investments
All investments are designated as “fair value through profit or loss” assets due to investments being managed and performance evaluated on a fair
value basis. A financial asset is designated within this category if it is both acquired and managed on a fair value basis, in accordance with the VCT’s
documented investment policy. The fair value of an investment upon acquisition is deemed to be cost. Thereafter investments are measured at fair
value in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEV) together with FRS 102 sections 11 and 12.
For unquoted investments and subsequent to acquisition, fair value is established by using the IPEV guidelines.
Based on the ongoing sales process, a fair market view based upon the estimated realisation proceeds has been used as a primary valuation
approach in the financial year ended 30 September 2024.Further details are contained in Note 10.
Notes to the Accounts
For the year ended 30 September 2024
50
Gresham House Renewable Energy VCT1 plc
2. Accounting policies (continued)
Effective 1 January 2019, the IPEV guidelines to establish fair value were updated whereby the cost or price of a recent investment are no longer
considered valid valuation methodologies for establishing the fair value of an investment. The VCT along with its Investment Adviser may, under
orderly market conditions, deem the cost or recent price paid for an investment as an appropriate fair value for an investment at the time of
acquisition but subsequent to recognition must reconsider the assigned fair value based on up-to-date market conditions and performance of the
underlying investee company in order to assign a fair value in line with the IPEV guidelines.
The methodology applied takes account of the nature, facts and circumstances of the individual investment and uses reasonable data, market
inputs, assumptions and estimates in order to ascertain fair value.
Gains and losses arising from changes in fair value are included in the Income Statement for the year as a capital item and transaction costs on
acquisition or disposal of the investment are expensed. Where an investee company has gone into receivership or liquidation, or administration
(where there is little likelihood of recovery), the loss on the investment, although not physically disposed of, is treated as being realised.
The investee companies held by the VCT are treated as a portfolio of investments and are therefore measured at fair value in accordance with section
9 of FRS 102. The results of these companies are not incorporated into the Income Statement except to the extent of any income accrued. This is in
accordance with the SORP and FRS 102 sections 14 and 15 that does not require portfolio investments, where the interest held is greater than 20%, to
be accounted for using the equity method of accounting.
Income
Dividend income from investments is recognised when the Shareholders’ rights to receive payment have been established, normally on the ex-dividend
date.
Interest income is accrued on a time apportionment basis, by reference to the principal sum outstanding and at the effective interest rate applicable and
only where there is reasonable certainty of collection in the foreseeable future.
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 as follows:
Æ Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment; and
Æ 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. The VCT has adopted a policy of charging 75% of the investment advisory fees to the revenue account
and 25% to the capital account to reflect the Board’s estimated split of investment returns which will be achieved by the VCT over its lifetime.
Taxation
The tax effects on different items in the Income Statement are allocated between capital and revenue on the same basis as the particular item to
which they relate, using the Company’s effective rate of tax for the accounting period.
Due to the VCT’s status as a Venture Capital Trust and the continued intention to meet the conditions required to comply with Part 6 of the Income
Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the VCT’s investments which arises.
Deferred taxation, which is not discounted, is provided in full on timing differences that result in an obligation at the balance sheet date to pay more
tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences
arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in
Other debtors, other creditors and loan notes
Other debtors (including accrued income), other creditors and loan notes (other than those held as part of the investment portfolio as set out in
51
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
3. Income
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Income from investments
Bank interest – 3
Dividend income 1,667 998
Loan stock interest 23 37
1,690 1,038
4. Investment advisory fees
The investment advisory fees for the year ended 30 September 2024, which were charged quarterly in advance to the VCT, were based on 1.15% of the
net assets as at the previous quarter end. Based on each quarter’s final NAV, as and when available, the quarter’s investment advisory fees previously
charged are adjusted. In addition, investment advisory fees of £22,000 (2023: £44,000) relating to additional costs incurred by the Investment
Adviser during the financial year were approved by the Board.
Year ended 30September 2024 Year ended 30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment advisory fees 127 42 170 235 78 313
5. Other expenses
Year ended 30September 2024 Year ended 30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Administration services 133 - 133 96 - 96
Directors’ remuneration 82 - 82 79 - 79
Social security costs 3 - 3 3 - 3
Auditor’s remuneration for audit 49 - 49 59 - 59
Other 113 174 287 175 - 175
380 174 554 412 - 412
At 30 September 2023, the annual running costs of the VCT for the year were subject to a cap of 3.0% of NAV. Due to the significant reduction in the
NAV as a result of the Managed Wind Down process, the annual running costs for the financial year ending 30 September 2024 were forecasted to
exceed this cap. To rectify this unintended consequence, the Investment Advisory Agreement was amended through a variation in June 2024 raising
the cap to 5.0% of NAV or £625,000 whichever is the lower. During the year ended 30 September 2024, the annual running costs came to £502,000
being total expenses (£723,000) less one-off expenditure, which is less than the applicable cap of £625,000 (2023: 2.8% which was less than the cap
of 3.0% of NAV), therefore the cap has not been breached.
6. Directors’ remuneration
Details of remuneration (excluding employer’s NIC) are given in the audited part of the Directors’ Remuneration Report on page 35.
The VCT had no employees during the year. Costs in respect of the Directors are referred to in Note 5 above. No other emoluments or pension
contributions were paid by the VCT to, or on behalf of, any Director.
52
Gresham House Renewable Energy VCT1 plc
7. Tax on ordinary activities
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
(a) Tax charge for the year
UK corporation tax at 25% (2023: 22%) – –
Charge for the year – –
(b) Factors affecting tax charge for the year
Loss on ordinary activities before taxation (2,418) (4,620)
(Tax credit)/tax calculated on loss on ordinary activities before taxation at the applicable rate of 25%
(2023: 22%) (605) (1,016)
Effects of:
UK dividend income (417) (220)
Losses on investments 846 1,085
Excess management expenses on which deferred tax not recognised 176 151
Total tax charge – –
Excess management fees, which are available to be carried forward and set off against future taxable income, amounted to £4,857,000 (25%) (2023:
£4,153,000 (22%)). The associated deferred tax asset of £1,214,000 (2023: £1,038,000) has not been recognised due to the fact that it is unlikely that
the excess management fees will be set off against future taxable profits in the foreseeable future. The corporation tax rate of 25% became effective
from 1 April 2023. A blended rate of 22% was applied for the year ended 30 September 2023.
8. Dividends
Year ended 30September 2024 Year ended 30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Paid
2022 Interim Ordinary – 2p - - - - 510 510
2023 Interim Ordinary – 16.5p - - - - 4,210 4,210
2023 Interim Ordinary – 7.5p 1,051 862 1,913 - - -
1,051 862 1,913 - 4,720 4,720
The interim Ordinary 7.5p dividend was paid on 21 December 2023 to Shareholders on the register as at 1 December 2023.
As announced on 2 December 2024, the Company would not pay a dividend in 2024. The board intends to declare and pay a dividend as soon as
practically possible following the sale of the remaining portfolio of assets.
9. Basic and diluted earnings per share
Weighted
average number
of shares
in issue
Revenue
profit
£’000
Pence
per share
Capital
Loss
£’000
Pence
per share
Net
(loss)/
profit
£’000
Pence
per share
30 September 2024 Ordinary Shares 25,515,242 1,183 4.6 (3,602) (14.1) (2,418) (9.5)
‘A’ Shares 38,512,032 - - - - - -
30 September 2023 Ordinary Shares 25,515,242 391 1.5 (5,011) (19.6) (4,620) (18.1)
‘A’ Shares 38,512,032 - - - - - -
As the VCT has not issued any convertible securities or share options, there is no dilutive effect on earnings per Ordinary Share or ‘A’ Share. The
earnings per share disclosed therefore represents both the basic and diluted return per Ordinary Share or ‘A’ Share.
53
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
10. Investments
2024
Unquoted
investments
£’000
2023
Unquoted
investments
£’000
Opening cost at start of the year 8,709 13,011
Permanent impairment in cost of investments (1,695) (1,303)
Accumulated net unrealised gains at start of the year 10,699 16,064
Opening fair value at start of the year 17,713 27,772
Movement in the year:
Purchased at cost - -
Disposals at cost (129) (4,302)
Permanent impairment in cost of investments (1,835) (392)
Net unrealised losses in the income statement (1,550) (5,365)
Closing fair value at year end 14,198 17,713
Closing cost at year end 8,580 8,709
Permanent impairment in cost of investments as at 30 September 2024 (3,530) (1,695)
Accumulated net unrealised gains at year end 9,148 10,699
Closing fair value at year end 14,198 17,713
During the financial year, the VCT received £129,000 from the disposal at cost of loan notes.
The VCT has categorised its financial instruments using the fair value hierarchy as follows:
Level 1 Reflects financial instruments quoted in an active market;
Level 2 Reflects financial instruments that have prices that are observable either directly or indirectly; and
Level 3 Reflects financial instruments that use valuation techniques that are not based on observable market data (unquoted equity investments
and loan note investments).
Level 1 Level 2 Level 3 2024 Level 1 Level 2 Level 3 2023
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Unquoted loan notes - - 330 330 - - 459 459
Unquoted equity - - 13,868 13,868 - - 17,254 17,254
- - 14,198 14,198 - - 17,713 17,713
During the years ended 30 September 2024 and 30 September 2023 there were no transfers between levels.
54
Gresham House Renewable Energy VCT1 plc
10. Investments (continued)
A reconciliation of fair value for Level 3 financial instruments held at the year end is shown below:
Unquoted
loan notes
£’000
Unquoted
equity
£’000
Total
£’000
Balance at 30 September 2023 459 17,254 17,713
Movement in the income statement:
Unrealised losses in the income statement — (1,550) (1,550)
Impairment realised during the period — (1,835) (1,835)
Redemption of loan notes (129) — (129)
Balance at 30 September 2024 330 13,868 14,198
FRS 102 sections 11 and 12 require disclosure to be made of the possible effect of changing one or more of the inputs to reasonable possible
alternative assumptions where this would result in a significant change in the fair value of the Level 3 investments. There is an element of judgement
in the choice of assumptions for unquoted investments and it is possible that, if different assumptions were used, different valuations could have
been attributed to some of the VCT’s investments.
The Board believes that valuing the investments as at 30 September 2024 based on the estimated realisation proceeds from the ongoing sales
process is the most appropriate valuation method. For the Company’s valuation 30 September 2024, the Company’s multiple non-binding offers for
its assets before financial year end were used. The offers received were representative of arm’s length prices, based on what market participants
were prepared to pay. Therefore, the year end valuation reflects the market offers received, which are considered to be in the best interest of
shareholders in the context of the planned Managed Wind Down of the Company.
11. Costs incurred on sale of VCT’s assets
Since the beginning of the Managed Wind Down in July 2021, the VCT has capitalised the professional fees in relation to the sale of assets. The
capitalised costs directly attributable to the current sales of assets process incurred during the financial year amounted to £151,000. Costs of sale,
2024
£’000
2023
£’000
Cost incurred on sale of VCT’s assets 305 253
305 253
12. Debtors
2024
£’000
2023
£’000
Prepayments and accrued income 14 38
14 38
55
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
13. Creditors: amounts falling due within one year
2024
£’000
2023
£’000
Other loans 4,417 1,472
Taxation and social security 3 3
Accruals and deferred income 172 99
Creditors 21 22
4,613 1,596
The balance of other loans is made up of amounts borrowed from the underlying portfolio companies. All loans are interest free. Subject to any sale
of assets as part of the Managed Wind Down, these loans will be repaid at the date of such transaction. Other loans falling due within one year are
Investee company Drawdown date Repayment date
2024
£’000
2023
£’000
HRE Willow Limited 15 June 2016 ^ 18 18
12 September 2016 ^ 68 68
23 September 2016 ^ 29 29
115 115
Lunar 2 Limited 17 December 2019 ^ 1,543 -
13 January 2020 ^ 473 -
31 March 2020 ^ 50 -
22 April 2020 ^ 100 -
2,166 -
Minsmere Power Limited 31 January 2020 ^ 50 -
Subtotal ^ 2,331 115
Lunar 2 Limited 23 December 2020 ^^ 808 808
8 February 2023 ^^ 134 134
10 March 2023 ^^ 89 89
31 March 2023 ^^ 40 40
13 December 2023 ^^ 604 -
2 February 2024 ^^ 125 -
1,800 1,071
HRE Willow Limited 22 December 2020 ^^ 114 114
18 March 201 ^^ 63 63
6 June 2022 ^^ 44 44
221 221
Minsmere Power Limited 22 December 2020 ^^ 25 25
30 June 2021 ^^ 27 27
6 June 2022 ^^ 13 13
65 65
Subtotal ^^ 2,086 1,357
Amounts repayable within one year 4,417 1,472
^ The lender may demand full repayment of all amounts outstanding at any time after 5 years and 1 day from the date of the initial drawdown of the loan. The loans are interest free.
^^ The VCT and the indicated SPV’s (the ‘lender’) entered into loan agreements whereby the lender may, at any time, without having to provide any reason, by one or several demands
require immediate repayment of all or any part of the loan and all or any accrued interest thereon. The loans are interest free.
56
Gresham House Renewable Energy VCT1 plc
14. Creditors: amounts falling due after more than one year
2024
£’000
2023
£’000
Other loans - 2,217
- 2,217
The balance of other loans is made up of amounts borrowed from the underlying portfolio companies. The classification of the loans shown below is
by reference to the contractual agreement repayment date as detailed in Note 13. All loans are interest free.
Creditors falling due after more than one year are repayable at any time after the following repayment dates:
Investee company Repayment date
2024
£’000
2023
£’000
Minsmere Power Limited 14 January 2025 - 50
Lunar 2 Limited 18 December 2024 - 1,543
14 January 2025 - 474
1 April 2025 - 50
23 April 2025 - 100
- 2,167
Amounts repayable after more than one year - 2,217
15. Called up share capital
2024
£’000
2023
£’000
Allotted, called up and fully-paid:
25,515,242 (2023: 25,515,242) Ordinary Shares of 0.1p each 28 28
38,512,032 (2023: 38,512,032) ‘A’ Shares of 0.1p each 41 41
69 69
The VCT’s capital is managed in accordance with its investment policy as shown in the Strategic Report on pages 18 to 19, in pursuit of its principal
The VCT has the authority to buy back shares as described in the Report of the Directors. During the year ended 30 September 2024, the VCT did not
repurchase any Ordinary Shares or ‘A’ Shares.
During the year ended 30 September 2024, the VCT issued no Ordinary Shares or ‘A’ shares.
The holders of Ordinary Shares and ‘A’ Shares shall have rights as regards to dividends and any other distributions or a return of capital (otherwise than on
a market purchase by the VCT of any of its shares) which shall be applied on the following basis:
1) unless and until Ordinary Shareholders receive a dividend of at least 5.0p per Ordinary Share, and one Ordinary Share and one ‘A’ Share has a
combined net asset value of 100p (the Hurdle), distributions will be made as to 99.9% to Ordinary Shares and 0.1% to ‘A’ Shares;
2) after (and to the extent that) the Hurdle has been met, and subject to point 3 below, the balance of such amounts shall be applied as to 40% to
Ordinary Shares and 60% to ‘A’ Shares; and
3) any amount of a dividend which, but for the entitlement of ‘A’ Shares pursuant to point 2 above, would have been in excess of 10p per Ordinary
Share in any year shall be applied as to 10% to Ordinary Shares and 90% to ‘A’ Shares.
57
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
15. Called up share capital (continued)
If, on the date on which a dividend is to be declared on the Ordinary Shares, the amount of any dividend which would have been payable to the
would together:
a) in aggregate be less than £5,000; or
b) be less than an amount being equivalent to 0.25p per ‘A’ Share.
then the ‘A’ Dividend amount shall not be declared and paid but shall be aggregated with any ‘A’ Share Entitlement and retained by the VCT until either
threshold is reached. No interest shall accrue on any ‘A’ Share Entitlement.
The VCT does not have any explicit externally imposed capital requirements.
16. Reserves
2024
£’000
2023
£’000
Treasury shares (2,991) (2,991)
Special reserve 8,133 8,995
Revaluation reserve 9,955 11,506
Capital reserve – realised (5,305) (3,253)
Revenue reserve 44 (89)
9,836 14,168
The Special reserve is available to the VCT to enable the purchase of its own shares in the market. The Special reserve, Capital reserve – realised and
Revenue reserve are all distributable reserves for the purpose of dividend payments to Shareholders. At 30 September 2024, distributable reserves
were £2.9mn (2023: £5.7mn).
Share premium account
This reserve accounts for the difference between the prices at which shares are issued and the nominal value of the shares, less issue costs and
transfers to the other distributable reserves.
Treasury Shares
This reserve represents the aggregate consideration paid for the Shares repurchased by the VCT.
Revaluation reserve
Increases and decreases in the valuation of investments held at the year end against cost are included in this reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the VCT’s own shares.
Capital reserve – realised
The following are disclosed in this reserve:
Æ gains and losses compared to cost on the realisation of investments; and
Æ expenses, together with the related taxation effect, charged in accordance with the above accounting policies.
Revenue reserve
This reserve accounts for movements from the revenue column of the Income Statement and other non-capital realised movements.
58
Gresham House Renewable Energy VCT1 plc
17. Basic and diluted net asset value per share
2024 2023 2024 2023
Shares in issue Net asset value Net asset value
Pence
per share £’000
Pence
per share £’000
Ordinary Shares 25,515,242 25,515,242 38.7p 9,865 55.6p 14,198
‘A’ Shares 38,512,032 38,512,032 0.1p 39 0.1p 39
Total 38.8p 9,904 55.7p 14,237
The Directors allocate the assets and liabilities of the VCT between the Ordinary Shares and ‘A’ Shares such that each share class has sufficient net
assets to represent its dividend and return of capital rights as described in Note 15.
As the VCT has not issued any convertible shares or share options, there is no dilutive effect on net asset value per Ordinary Share or per ‘A’ Share.
18. Financial instruments
The VCT held the following categories of financial instruments at 30 September 2024:
2024
Cost
£’000
2024
Value
£’000
2023
Cost
£’000
2023
Value
£’000
Assets at fair value through profit or loss 8,580 14,198 8,709 17,713
Other financial liabilities (182) (182) (86) (86)
Cash at bank 1 1 46 46
Other loans (4,417) (4,417) (3,689) (3,689)
Total 3,982 9,600 4,980 13,984
The VCT’s financial instruments comprise investments held at fair value through profit or loss, being equity and loan stock investments in unquoted
companies, other loans and receivables consisting of short-term debtors, cash deposits and financial liabilities being creditors arising from its
operations. Other loans are borrowed from the VCT’s underlying portfolio companies. Other financial liabilities and assets include operational debtors
and prepaid expenses and short-term creditors which are measured at amortised cost. The main purpose of these financial instruments is to
generate cashflow and revenue and capital appreciation for the VCT’s operations. The VCT does not use any derivatives.
The fair value of investments is determined using the detailed accounting policy as shown in Note 2. The composition of the investments is set out in
Note 10.
The VCT’s investment activities expose the VCT to a number of risks associated with financial instruments and the sectors in which the VCT invests.
The principal financial risks arising from the VCT’s operations are:
Æ market risks;
Æ credit risk; and
Æ liquidity risk.
The Board regularly reviews these risks and the policies in place for managing them. There have been no significant changes to the nature of the risks
that the VCT was expected to be exposed to over the year and there have also been no significant changes to the policies for managing those risks
during the year.
59
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
18. Financial instruments (continued)
The risk management policies used by the VCT in respect of the principal financial risks and a review of the financial instruments held at the year end
are provided below:
Market risks
As a Venture Capital Trust, the VCT is exposed to investment risks in the form of potential losses and gains that may arise on the investments it
holds in accordance with its investment policy and since 13 July 2021, with reference to the New Investment Policy. The management of these
investment risks is a fundamental part of investment activities undertaken by the Investment Adviser and overseen by the Board. The Adviser
monitors investments through regular contact with management of investee companies, regular review of management accounts and other financial
information and attendance at investee company board meetings. This enables the Adviser to manage the investment risk in respect of individual
investments. Investment risk is also mitigated by holding a diversified portfolio spread across various operating sites across several asset classes.
During the Managed Wind Down, the investment portfolio will be reduced as investments are realised and concentrated in fewer holdings, and the mix
of asset exposure will be affected accordingly.
The key investment risks to which the VCT is exposed are:
Æ investment price risk; and
Æ interest rate risk.
Investment price risk
The VCT’s investments which comprise of both equity and debt financial instruments in unquoted investments are concentrated in renewable
energy projects with predetermined expected returns. Consequently, the investment price risk arises from uncertainty about the future prices and
valuations of financial instruments held in accordance with the VCT’s investment objectives which can be influenced by many macro factors such
as changes in interest rates, electricity power prices and movements in inflation. It represents the potential loss that the VCT might suffer through
changes in the fair value of unquoted investments that it holds.
At 30 September 2024, the unquoted portfolio was valued at £14.2mn (2023: £17.7mn). The Board believes that valuing the investments as at
For the Company’s valuation 30 September 2024, the Company’s multiple non-binding offers for its assets before financial year end were used.
The offers received were representative of arm’s length prices, based on what market participants were prepared to pay. Therefore, the year end
valuation reflects the market offers received, which are considered to be in the best interest of shareholders in the context of the planned Managed
Wind Down of the Company.
Interest rate risk
The VCT accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The VCT
receives interest on its cash deposits at a rate agreed with its bankers. Where investments in loan stock attract interest, this is predominately
charged at fixed rates. A summary of the interest rate profile of the VCT’s investments is shown below.
There are three categories in respect of interest which are attributable to the financial instruments held by the VCT as follows:
Æ “Fixed rate” assets represent investments with predetermined yield targets and comprise certain loan note investments and preference shares;
Æ “Floating rate” assets predominantly bear interest at rates linked to The Bank of England base rate or LIBOR and comprise cash at bank; and
Æ “No interest rate” assets do not attract interest and comprise equity investments, certain loan note investments, loans and receivables.
Average
interest rate
Average period
until maturity
2024
£’000
2023
£’000
Fixed rate 8% 2,426 days 330 459
Floating rate 0% – 1 46
No interest rate – – 9,269 13,479
9,600 13,984
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Gresham House Renewable Energy VCT1 plc
18. Financial instruments (continued)
The VCT monitors the level of income received from fixed and floating rate assets and, if appropriate, may adjust the allocation between the
categories, in particular, should this be required to ensure compliance with the VCT regulations.
It is estimated that an increase of 1% in interest rates would have increased loss before tax for the year by £5 (2023: £460). The Bank of England (‘BoE’)
base rate was 5.25% at the beginning of the financial year. As at 30 September 2024, the BoE base rate was 5.0%, having decreased from 5.25% on 1
August 2024. On 7 November 2024, the BoE base rate decreased to 4.75%. Any potential change in the base rate, at the current level, would have an
immaterial impact on the net assets and total return of the VCT.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument is unable to discharge a commitment to the VCT made under that instrument. The
VCT is exposed to credit risk through its holdings of loan stock in investee companies, cash deposits and debtors. Credit risk relating to loan stock in
investee companies is considered to be part of market risk as the performance of the underlying SPVs impacts the carrying values.
The VCT’s financial assets that are exposed to credit risk are summarised as follows:
2024
£’000
2023
£’000
Investments in loan stocks 330 459
Cash and cash equivalents 1 46
Interest, dividends, and other receivables 5 29
336 534
The Investment Adviser manages credit risk in respect of loan stock with a similar approach as described under “Market risks”. Similarly, the
management of credit risk associated with interest, dividends and other receivables is covered within the investment advisory procedures. The level of
security is a key means of managing credit risk. Additionally, the risk is mitigated by the security of the assets in the underlying investee companies.
Cash is held by the Royal Bank of Scotland plc which is an investment grade rated financial institution. Consequently, the Directors consider that the
credit risk associated with cash deposits is low.
There have been no changes in fair value during the year that are directly attributable to changes in credit risk. Any balances that are past due are
disclosed further under liquidity risk.
Liquidity risk
Liquidity risk is the risk that the VCT encounters difficulties in meeting obligations associated with its financial liabilities. Liquidity risk may
also arise from either the inability to sell financial instruments when required at their fair values or from the inability to generate cash inflows
The VCT’s creditors at year end were £196,000 (2023: £125,000) of which £67,300 related to the Costs incurred on sale of VCT’s assets. The VCTs
has short-term loans from investee companies (see Note 13 for an analysis of the repayment terms), which are expected to be repaid by way
of future dividends from, or the sale of, these companies, being £4,417,000 (2023: £3,689,000 short and long-term loans). The Board therefore
believes that the VCT’s exposure to liquidity risk is low. The SPVs hold sufficient levels of funds as cash to pay up in order to meet the VCT
expenses and other cash outflows as they arise. For these reasons the Board believes that the VCT’s exposure to liquidity risk is minimal.
The VCT’s liquidity risk is managed by the Investment Adviser in line with guidance agreed with the Board and is reviewed by the Board at
61
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Notes to the Accounts (continued)
18. Financial instruments (continued)
The following table analyses the VCT’s loan payables by contractual maturity date:
As at 30September 2024
Due in
less than
1 year
£’000
Due between
1 year and
5 years
£’000
Due after
5 years
£’000
Total
£’000
Loans payable to investee companies 4,417 – – 4,417
4,417 – – 4,417
As at 30September 2023
Due in
less than
1 year
£’000
Due between
1 year and
5 years
£’000
Due after
5 years
£’000
Total
£’000
Loans payable to investee companies 1,472 2,217 – 3,689
1,472 2,217 – 3,689
Although the VCT’s investments are not held to meet the VCT’s liquidity requirements, the table below shows an analysis of the assets, highlighting the
length of time that it could take the VCT to realise its assets if it were required to do so.
The carrying value of loan stock investments held at fair value through the profit and loss account at 30 September 2024 as analysed by the expected
maturity date is as follows:
As at 30September 2024
Not later
than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
3 years
£’000
Between
3 and
5 years
£’000
More
than
5 years
£’000
Total
£’000
Fully performing loan stock 330 – – – – 330
330 – – – – 330
As at 30September 2023
Not later
than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
3 years
£’000
Between
3 and
5 years
£’000
More
than
5 years
£’000
Total
£’000
Fully performing loan stock 459 – – – – 459
459 – – – – 459
19. Capital management
The VCT’s objectives when managing capital are to safeguard the VCT’s ability to provide returns for Shareholders and to provide an adequate return
to Shareholders by allocating its capital to assets commensurately with the level of risk.
By its nature, the VCT has an amount of capital, at least 80% (as measured under the tax legislation; and for the VCT, effective 1 October 2019) of
which is and must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being
subscribed. The VCT accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk
characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the VCT may adjust the amount of
dividends paid to Shareholders, return capital to Shareholders, issue new shares, or sell assets if so required to maintain a level of liquidity.
As the Investment Policy implies, the Board would consider levels of gearing. As at 30 September 2024, the VCT had loans from investee companies
of £4,417,000 (2023: £3,689,000). It regards the net assets of the VCT as the VCT’s capital, as the level of liabilities are small and the management of
them is not directly related to managing the return to Shareholders. There has been no change in this approach from the previous year.
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Gresham House Renewable Energy VCT1 plc
20. Contingencies, guarantees and financial commitments
At 30 September 2024, the VCT had no contingencies or guarantees. During the financial year, the VCT has entered into financial commitments
in respect of the Managed Wind Down process. The estimated financial commitments, in case a sale of assets completes, at 30 September 2024
amount to £255,000. However, this amount may be less if any of the agreements are terminated early.
21. Controlling party and related party transactions
In the opinion of the Directors there is no immediate or ultimate controlling party. For total Directors’ remuneration during the year, please refer to
Note 5 as well as the Directors‘ Remuneration Report on pages 34 to 36. Gresham House Asset Management Limited is the Investment Adviser of the
VCT, please refer to Note 4 for total investment advisory fees.
22. Significant interests
The details of all shareholdings in the remaining companies where the VCT’s holding, as at 30 September 2024, represents more than 20% of the
nominal value of any class of shares issued by the portfolio company are disclosed in the Review of Investments on pages 11 to 17.
23. Net debt reconciliation
1 October
2023
£’000
Non
cashflows
£’000
Cashflows
£’000
30 September
2024
£’000
Cash at bank and in hand 46 - (45) 1
Other loans 3,689 - 728 4,417
24. Events after the end of the reporting period
No significant events have occurred between the statement of financial position date and the date when the financial statements have been
approved, which would require adjustments to, or disclosure in the financial statements.
63
Gresham House Renewable Energy VCT1 plc
Financial
StatementsGovernanceOverview
Registered number
07378392
Directors
Gill Nott (Chairman)
David Hunter
Giles Clark
Company Secretary and Registered Office
JTC (UK) Limited
The Scalpel, 18th Floor
52 Lime Street
London EC3M 7AF
Investment Adviser
Gresham House Asset Management Limited
5 New Street Square
London EC4A 3TW
Tel: 020 3837 6270
www.greshamhouse.com
Administrator
JTC (UK) Limited
The Scalpel, 18th Floor
52 Lime Street
London EC3M 7AF
Tel: 020 7409 0181
www.jtcgroup.com
Auditor
BDO LLP
55 Baker Street
London W1U 7EU
VCT status advisers
Philip Hare & Associates LLP
Bridge House,
181 Queen Victoria Street
London EC4V 4EG
Registrars
MUFG Corporate Markets,
a division of MUFG Pension & Market Services
(formerly Link Group)
Central Square
29 Wellington Street
Leeds LS1 4DL
Solicitors
Dickson Minto LLP
69 Old Broad Street
London EC2M 1QS
Bankers
Royal Bank of Scotland plc
London Victoria Branch
119/121 Victoria Street
London SW1E 6RA
Corporate Broker
Panmure Liberum Limited
25 Ropemaker Street
London EC2Y 9LY
Company
Information
64
Gresham House Renewable Energy VCT1 plc
