Gresham House

Renewable Energy

VCT2

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 (VCT1) and Gresham House Renewable

Energy VCT2 plc (VCT and together the VCTs) during the

financial year was 20.3MWp of solar and 1.0MWp of wind.

The renewable energy assets in the portfolio of VCT1 and

the VCT generated 18,993MWh 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 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 VCT2 plc (VCT) 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 GV2O GV2A

Latest share price

(21January 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



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 VCT2 plc, please contact the registrar

on the above number or email.

Shareholder

Information

Gresham House Renewable Energy VCT2 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)

121.1p

37.9p

121.1p

131.0p

Sep 24

Sep 23

37.9p

55.3p

Sep 24

Sep 23

Cumulative Dividends paid

(pence)

(as at 30 September 2024)

83.1p

75.6p

Sep 24

Sep 23

VCT2 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 VCT2 plc NAV Total Return

Gresham House Renewable Energy VCT2 plc Share Price Total Return

Pence (p)

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Dec-

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.

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

Sep 24

Sep 23

Gresham House Renewable Energy VCT2 plc

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 VCT1 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. Details of the independence of each Director are set out in the Corporate Governance Statement on page 37.

Andrew Donovan is an experienced

corporate financier, with over 28

years of M&A and capital-raising

transaction experience in the utilities,

energy and infrastructure sectors at

Schroders, Citi, Lexicon, Evercore

and Schroders Greencoat. He has

specialised in the renewable energy

sector for the past 20 years.

Andrew also helped develop a portfolio of

UK grid-scale battery storage projects for

Capbal (2016-22). Batteries have a crucial

role to play in balancing and stabilising

the electricity network with the rapid

growth of intermittent renewables.

Andrew is also a member of

Chartered Accountants Ireland.

Christian Yates (Chairman) was closely

involved in establishing both Gresham

House Renewable Energy VCTs in 2010

(formerly Hazel Renewable Energy VCTs)

whilst a Partner at Hazel Capital LLP

from 2009 to 2012. Having started his

career in financial services in 1988 he

has worked for a number of investment

houses holding senior positions at

Bear Stearns Asset Management,

Julius Baer, Chase Asset Management

and Lazard Asset Management.

He has significant investment

experience across many asset classes

including private equity, hedge funds,

infrastructure, natural resources and

real estate. He remains active, both as

an investor and developer, in the field of

renewable energy. Having successfully

established a UK self-storage inner

city business where he retains a small

interest, he is now focused on mining

precious metals in South America as

Chairman of Nativo Resources plc.

Matthew Evans was a founding partner

of LGT Vestra in 2007, where he ran the

ventures team, focusing on renewables,

unlisted commercial property and

private equity investments. Matthew

founded CH1 Investment Partners LLP,

which provides bespoke investment

solutions to high net worth, professional

and sophisticated investors.

Matthew is a director of several other

businesses, including Innova Energy

II Ltd and Cygnet Renewables Ltd,

and is also a Designated Member of

Innova Transmission Funding LLP.

Gresham House Renewable Energy VCT2 plc

Additional

InformationGovernanceOverview

I am pleased to present the Annual

Report of Gresham House Renewable

Energy VCT2 plc (VCT) for the year

ended 30 September 2024.

Chairman’s

Statement

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%,

4.14% 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 38.0p compared to 55.4p 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 £14.1mn. There have been no follow-

on acquisitions. No investments were

disposed of during the financial year, but

a loan repayment of £338,000 was made.

One of the non-renewable investments,

having entered administration in May 2023,

was dissolved mid-September 2024.

Christian Yates

Chairman

Gresham House Renewable Energy VCT2 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 37.9p and the NAV per ‘A’

Share stood at 0.1p, producing a combined

total of 38.0p 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 55.4

Less dividend payments

during the year (7.5)

Realised losses on assets

still held (7.0)

Valuation decrease on assets

still held (6.6)

Income less expenses 3.7

NAV as at 30 September 2024 38.0

The NAV Total Return (NAV plus cumulative

dividends) has decreased by 17.9% in the last

financial year and at the year end stands at

121.1p 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 £2.6mn (2023: £4.6mn

loss), comprising a revenue profit of £1.2mn

(2023: £411,000) and a capital loss of £3.8mn

(2023: capital loss of £5.0mn) as shown in the



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 12:00 p.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 4:00 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



Christian Yates

Chairman

29 January 2025

Financial

StatementsGovernanceOverview

Gresham House Renewable Energy VCT2 plc

Investment Adviser’s Report

Portfolio Highlights

Gresham House Renewable Energy VCT2 plc

(VCT) remains invested in the renewable energy

projects that the VCT and Gresham House

Renewable Energy VCT1 plc (VCT1) 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 recovery expected.

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

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.

Gresham House Renewable Energy VCT2 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 30

September 2024, and is expected to

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 VCT2 Net Asset Value (NAV)

30 September 2024 30 September 2023

Asset Type kWp

VCT2 Value**

(‘000)

% of Portfolio

value

VCT2 Value

(‘000)

% of Portfolio

value

Ground mounted solar (FiT)* 20,292 £13,040 92.7 % £15,395 85.7%

Wind assets (FiT)* 995 £1,033 7.3% £2,568 14.3%

Venture Capital investments N.A. £0 0% £0 0.0%

TOTAL 21,287 £14,073 100.0% £17,963 100.0%

* Feed in Tariff (FiT)

** The investment values above are gross and include loans owed by the VCT to the investment portfolio companies of £4.3mn 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

VCT1, 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%

Gresham House Renewable Energy VCT2 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:

1October 2023 – 30September 2024

1October 2022

– 30September

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)

Gresham House Renewable Energy VCT2 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.

Gresham House Renewable Energy VCT2 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

Gresham House Renewable Energy VCT2 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 11,502 401 81.7%

Lunar 1 Limited

1,4

Kingston Farm, Lake Farm Ground solar 124 647 (1,278) 4.6%

HRE Willow Limited

HRE Willow Small wind 875 482 (140) 3.4%

New Energy Era Limited

Wychwood Solar Farm Ground solar 884 470 (850) 3.4%

Vicarage Solar Limited

Parsonage Farm Ground solar 871 422 (627) 3.0%

Tumblewind Limited

Tumblewind Small wind 850 214 (1,005) 1.5%

Minsmere Power Limited

Minsmere Small wind 975 197 (84) 1.4%

Small Wind Generation Limited

Small Wind Generation Small wind 975 140 31 1.0%

bio-bean Limited

Cambridgeshire Clean energy 695 – – 0.0%

Lunar 3 Limited

1,4

Ground solar 1 – – 0.0%

Total investments 7,580 14,074 (3,552) 100.0%

Cash at bank and in hand 1 0.0%

Total investments including cash 14,075 100.0%

Partially qualifying investment

bio-bean Limited was permanently impaired as at 31 March 2023. bio-bean’s liquidation is ongoing.

£1.8mn of the valuation movement has been recognised as a realised loss at financial year ended 30 September 2024.

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 VCT1 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 338 338 338 – –

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.

Gresham House Renewable Energy VCT2 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: £11,502,000

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: £647,000

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)

Gresham House Renewable Energy VCT2 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: £470,000

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

Gresham House Renewable Energy VCT2 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: £422,000

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: £1,188,000

Date of first investment: November 2011

Valuation at 30/09/24: £214,000

Valuation at 30/09/23: £1,557,000

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)

Gresham House Renewable Energy VCT2 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: £281,000

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 is

190kW.

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)

Gresham House Renewable Energy VCT2 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 VCT2 plc

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

30September

2024

£’000

Year ended

30September

2023

£’000

Loan stock interest income in the period

Tumblewind Limited 12 15

Minsmere Power Limited 11 11

Small Wind Generation Limited 5 11

Total 28 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

Gresham House Renewable Energy VCT2 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 £3,552,000. 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 £2.6mn (2023: £4.6mn loss).

The total loss for the year was £2.6mn and

net assets at the year-end were £9.9mn

(2023: £14.5mn). An interim dividend of 7.5p

per Ordinary Share was announced on 22

November 2023 and was paid on 21 December

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



The Directors initially obtained provisional

approval for the VCT to act as a Venture Capital

Trust from HM Revenue & 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 Tax



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,

99.59% 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



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

Gresham House Renewable Energy VCT2 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



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



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

Gresham House Renewable Energy VCT2 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, all

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

financialyear:

Year ended

30 September

2024

Year ended

30 September

20 23

Net Asset Value

Total Return (% p.a.) (7.6)% (11.7)%

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



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)

Gresham House Renewable Energy VCT2 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.

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

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.

Gresham House Renewable Energy VCT2 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 VCT1 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.

Gresham House Renewable Energy VCT2 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

how they are being mitigated.

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



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



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 30

September 2024 were £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)

Gresham House Renewable Energy VCT2 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

30September

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 1.6%

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.

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Strategic Report (continued)

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



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.

Gresham House Renewable Energy VCT2 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.

Gresham House Renewable Energy VCT2 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

VCT1, it is estimated that the fund avoided

8,300 tonnes of CO

and powered c. 7,035

homes

during the reporting period.

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 VCT1 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 tCO

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 (tCOe) 17.2 17.2

Scope 2 (tCOe) 0.0 0.00

Scope 3 (tCOe) 2.0 2.0

Revenue Carbon

Intensity (Scope 1 + 2)

tCOe/£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 tCO

e 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.

Gresham House Renewable Energy VCT2 plc

Role of the Board

The Board, which comprised of three 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 VCT1 plc (VCT1).

The VCT is an investment vehicle, externally

managed, has no employees, and is overseen

by a 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 Chairman’s Statement.

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.

Gresham House Renewable Energy VCT2 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 Status Advisers.

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 complete the sale of the remaining assets.

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



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

Christian Yates

Chairman

29 January 2025

Section 172 (continued)

Gresham House Renewable Energy VCT2 plc

The Corporate Governance Report on pages 37

to 40 forms part of this report.

Share capital

At the year end, the VCT had in issue 26,133,036

Ordinary Shares and 39,463,845 ‘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

30September

2024 £’000

Pence

per Ord

Pence

per ‘A’

Loss for the year 2,584 9.9 –

Dividend

 1,960 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 retires by rotation every three years

and being eligible, offer themselves for re-

election. Accordingly, Matthew Evans stood

for re-election in 2023 and Christian Yates and

Andrew Donovan stood for re-election in 2024.

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*

Christian Yates

(Chairman) 28/09/2010 19/03/2024

Matthew Evans 31/01/2017 27/04/2023

Andrew

Donovan 07/12/2020 19/03/2024

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

page 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.

Gresham House Renewable Energy VCT2 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 4:00pm 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

1,

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)

Gresham House Renewable Energy VCT2 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

Christian Yates

Chairman

29 January 2025

Financial

StatementsGovernanceOverview

Gresham House Renewable Energy VCT2 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



(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 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



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.

Gresham House Renewable Energy VCT2 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

Christian Yates 31,264 29,494 N/A 29,494 27,825 7,500 35,325

Andrew Donovan 28,314 26,712 N/A 26,712 25,200 N/A 25,200

Matthew Evans 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 £4,539.

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

Christian Yates 6 5

(6)

0 6

(5)

(3)

Matthew Evans 6 5 0 7.5 0

Andrew Donovan 6 5 0

(5)

N/A

(4)(5)

N/A

Giles Clark

(2)

N/A N/A 0

(5)

6.7

(4)(5)

12.5

(3)

(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, Giles Clark resigned from the Board and was appointed as a new Non-Executive Director of VCT1.

(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 each of Christian Yates and Giles Clark and this was paid during the year ended 30 September 2019.

(4) Andrew Donovan was appointed as a Director on 7 December 2020. Giles Clark was the Chair of the Audit Committee until 10 May 2021, stepping away from the position to manage the sales

process, and Andrew Donovan was then appointed as the Chair of the Audit Committee with effect from 11 May 2021. Annual fees were paid on a pro rata basis, with an additional annual fee of

£2,500 paid to the Chair of the Audit Committee.

(5) During the financial year to 30 September 2021, in recognition of the increased oversight responsibilities, the Remuneration Committee approved additional special payments to the Chairman,

Chair of the Audit Committee and Giles Clark (as the previous 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 to 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, 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 16 May 2023.

Gresham House Renewable Energy VCT2 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

30 September

2024

30 September

2023

Christian Yates

Ord 27,789 27,789 27,789

‘A’ 2,624,185 2,624,185 2,624,185

Matthew Evans

Ord – – –

‘A’ – – –

Andrew Donovan

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 4,691,696 votes (89.82%)

Against 342,696 votes (6.56%)

Withheld nil votes

Remuneration policy

At the 2023 AGM, when the remuneration policy was last put to a

Shareholder vote, 99.85% 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.

1000

2000

3000

4000

5000

2023

2024

Pounds (£’000)

Investment

Advisory

fees

Directors

remuneration

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 VCT2 plc NAV Total Return

Gresham House Renewable Energy VCT2 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-

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.

Matthew Evans

Remuneration Committee Chairman

29 January 2025

Directors’ Remuneration Report (continued)

Gresham House Renewable Energy VCT2 plc

The Board of Gresham House Renewable

Energy VCT2 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 VCT2 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



Compliance with the Principles and Provisions of

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 Christian

Yates. Andrew Donovan is independent from

the Investment Adviser. Matthew Evans is not

considered independent as he is a Designated

Member of CH1 Investment Partners LLP,

which receives trail commission from the

Investment Adviser. Christian Yates was

independent on appointment, however, he is

no longer considered independent as he has

been on the Board for over 9 years. 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. Andrew

Donovan is the Chairman of the Audit Committee

and Matthew Evans 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



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

Gresham House Renewable Energy VCT2 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)

Christian Yates 4 13 5 1 1

Matthew Evans 3 10 5 1 1

Andrew Donovan 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



Diversity

The Board currently comprises of three Non-

Executive Directors, all of which are male.

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 or second target on gender diversity. 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.

Gresham House Renewable Energy VCT2 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 3 100% 4

Women 0 0% 0

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



The terms of reference of the Committees

and the conditions of appointment of Non-

Executive Directors are available to Shareholders



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

current assets in the 30 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.

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.

Gresham House Renewable Energy VCT2 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

Gresham House Renewable Energy VCT2 plc

Independent auditor’s report to

the members of Gresham House

Renewable Energy VCT2 Plc

Opinion on the financial statements

In our opinion the financial statements:

Æ give a true and fair view of the state of

the Company’s affairs as at 30 September

2024 and of its loss for the year then

ended;

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 Act

2006.

We have audited the financial statements

of Gresham House Renewable Energy VCT2

Plc (the ‘Company’) for the year ended 30

September 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

matters

2024 2023

Valuation of

unquoted

investments X X

Materiality Company financial

statements as a

whole

£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

Gresham House Renewable Energy VCT2 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.

Independent Auditor’s Report (continued)

Gresham House Renewable Energy VCT2 plc

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

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, we

consider it appropriate to apply a specific

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.

Gresham House Renewable Energy VCT2 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 provisions Other 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:

Gresham House Renewable Energy VCT2 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:

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).

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Year ended 30September 2024 Year ended 30September 2023

Note

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Income 3 1,695 – 1,695 1,055 – 1,055

Loss on investments 10 – (3,552) (3,552) – (4,892) (4,892)

1,695 (3,552) (1,857) 1,055 (4,892) (3,837)

Investment advisory fees 4 (129) (43) (172) (235) (79) (314)

Other expenses 5 (382) (174) (555) (409) – (409)

(511) (217) (727) (644) (79) (723)

Profit/(loss) on ordinary activities before tax 1,184 (3,769) (2,584) 411 (4,971) (4,560)

Tax on total comprehensive income/(loss) and

ordinary activities 7 – – – – – –

Profit/(loss) for the year and total

comprehensive income/(loss) 1,184 (3,769) (2,584) 411 (4,971) (4,560)

Basic and diluted earnings/(loss) per share:

Ordinary Share 9 4.5p (14.4p) (9.9p) 1.6p (19.0p) (17.4p)

‘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

Gresham House Renewable Energy VCT2 plc

2024 2023

Note £’000 £’000 £’000 £’000

Current assets

Investments 10 14,074 17,963

Costs incurred on sale of VCT’s assets 11 305 252

Debtors 12 51 80

Cash at bank and in hand 1 4

14,431 18,299

Creditors 13 (4,489) (1,926)

Net current asset 9,942 16,373

Creditors: amounts falling due after more than one year 14 – (1,887)

Net assets 9,942 14,486

Capital and reserves

Called up Ordinary Share capital 15 29 29

Called up ‘A’ Share capital 15 42 42

Treasury Shares 16 (3,404) (3,403)

Special reserve 16 8,736 9,713

Revaluation reserve 16 9,830 11,546

Capital reserve – realised 16 (5,318) (3,265)

Revenue reserve 16 27 (176)

Total Shareholders’ funds 9,942 14,486

Basic and diluted net asset value per share

Ordinary Share 17 37.9p 55.3p

‘A’ Share 17 0.1p 0.1p

The financial statements of Gresham House Renewable Energy VCT2 plc on pages 46 to 63 were approved and authorised for issue by the Board of

Directors and were signed on its behalf by:

Christian Yates

Chairman

Company number: 07378395

Date: 29 January 2025

The accompanying Notes form an integral part of these financial statements.

Balance Sheet

As at 30 September 2024

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Called

up share

capital

£’000

Premium

Account

£’000

Treasury

£’000

Special

reserve

£’000

Revaluation

reserve

£’000

Capital

redemption

reserve

£’000

Capital

reserve

realised

£’000

Revenue

reserve

£’000

Total

£’000

At 30 September 2022 71 9,734 (3,403) 4,813 16,869 1 (3,617) (587) 23,881

Total comprehensive (loss)/income – – – – (5,323) – 352 411 (4,560)

Cancellation of Share premium and

Capital redemption reserve – (9,734) – 9,735 – (1) – – –

Dividend paid – – – (4,835) – – – – (4,835)

At 30 September 2023 71 – (3,403) 9,713 11,546 – (3,265) (176) 14,486

Total comprehensive (loss)/income – – – – (1,717) – (2,052) 1,184 (2,584)

Dividend paid – – – (980) – – – (980) (1,960)

At 30 September 2024 71 – (3,404) 8,736 9,830 – (5,318) 27 9,942

The accompanying Notes form an integral part of these financial statements.

Statement of Changes in Equity

For the year ended 30 September 2024

Gresham House Renewable Energy VCT2 plc

Note

Year ended

30September

2024

£’000

Year ended

30September

2023

£’000

Cash flows from operating activities

Loss for the financial year (2,584) (4,560)

Loss on investments 10 3,552 4,892

Cost incurred on sale of VCT’s assets write off 98

Dividend income (1,667) (998)

Interest income (28) (53)

Decrease in debtors 1 –

Increase/(decrease) in creditors 608 (130)

Net cash outflow from operating activities (20) (849)

Cash flows from investing activities

Net proceeds from sale of investments/loan note redemptions 10 338 4,453

Cost incurred on sale of VCT’s assets (84) (124)

Interest received 56 97

Dividend income received 1,667 998

Net cash inflow from investing activities 1,977 5,424

Cash flows from financing activities

Dividend paid (1,960) (4,835)

Proceeds from loans – 263

Net cash outflow from financing activities (1,960) (4,572)

Net (decrease)/increase in cash (3) 3

Cash and cash equivalents at start of year 4 1

Cash and cash equivalents at end of year 1 4

Cash and cash equivalents comprise

Cash at bank and in hand 1 4

Total cash and cash equivalents 1 4

The accompanying Notes form an integral part of these financial statements.

Cash Flow Statement

For the year ended 30 September 2024

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

1. General Information

Gresham House Renewable Energy VCT2 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. 07378395). 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. Its

share capital is denominated in Pound Sterling (GBP) and consists of Ordinary shares and ‘A’ shares.

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 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 current assets in the

 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

Gresham House Renewable Energy VCT2 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



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-



Interest income is accrued on a time apportionment basis, by reference to the principal sum outstanding and at the effective interest rate applicable



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



Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Notes to the Accounts (continued)

3. Income

Year ended

30September

2024

£’000

Year ended

30September

2023

£’000

Income from investments

Bank interest – 4

Dividend income 1,667 998

Loan stock interest 28 53

1,695 1,055

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 30September 2024 Year ended 30September 2023

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Investment advisory fees 129 43 172 235 79 314

5. Other expenses

Year ended 30September 2024 Year ended 30September 2023

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Administration services 132 – 132 96 – 96

Directors’ remuneration 85 – 85 81 – 81

Social security costs 3 – 3 3 – 3

Auditor’s remuneration for audit 49 – 49 59 – 59

Other 113 174 287 170 – 170

382 174 555 409 – 409

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 £506,000

being total expenses (£727,000) 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.

Gresham House Renewable Energy VCT2 plc

7. Tax on ordinary activities

Year ended

30September

2024

£’000

Year ended

30September

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 (2,584) (4,560)

(Tax credit)/tax calculated on loss on ordinary activities before taxation at the applicable rate of 25%

(2023: 22%) (646) (1,003)

Effects of:

UK dividend income (417) (220)

Losses on investments 888 1,076

Excess management expenses on which deferred tax not recognised 175 147

Total tax charge – –

Excess management fees, which are available to be carried forward and set off against future taxable income, amounted to £4,953,000 (2023:

£4,253,000). The associated deferred tax asset of £1,238,000 (2023: £1,063,000) 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 30September 2024 Year ended 30September 2023

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Paid

2022 Interim Ordinary – 2p – – – – 523 523

2023 Interim Ordinary – 16.5p – – – – 4,312 4,312

2023 Interim Ordinary – 7.5p 980 980 1,960 – – –

980 980 1,960 – 4,835 4,835

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

Year ended 30 September 2024 Ordinary Shares 26,133,036 1,184 4.5 (3,769) (14.4) (2,584) (9.9)

‘A’ Shares 39,463,845 – – – – – –

Year ended 30 September 2023 Ordinary Shares 26,133,036 411 1.6 (4,971) (19.0) (4,560) (17.4)

‘A’ Shares 39,463,845 – – – – – –

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

Gresham House Renewable Energy VCT2 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 8,918 13,220

Permanent impairment in cost of investments (1,695) (1,303)

Accumulated net unrealised gains at start of the year 10,740 16,063

Opening fair value at start of the year 17,963 27,980

Movement in the year:

Purchased at cost – –

Disposals at cost (338) (4,302)

Permanent impairment in cost of investments (1,835) (392)

Net unrealised losses in the income statement (1,717) (5,323)

Closing fair value at year end 14,074 17,963

Closing cost at year end 8,580 8,918

Permanent impairment in cost of investments as at 30 September 2024 (3,530) (1,695)

Accumulated net unrealised gains at year end 9,024 10,740

Closing fair value at year end 14,074 17,963

During the financial year, the VCT received £338,000 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 – – 668 668

Unquoted equity – – 13,744 13,744 – – 17,295 17,295

– – 14,074 14,074 – – 17,963 17,963

During the years ended 30 September 2024 and 30 September 2023 there were no transfers between levels.

Gresham House Renewable Energy VCT2 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 668 17,295 17,963

Movement in the income statement

Unrealised losses in the income statement – (1,717) (1,717)

Impairment realised during the period – (1,835) (1,835)

Redemption of loan notes (338) – (338)

Balance at 30 September 2024 330 13,744 14,074

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, no

longer or not related to the current sale of assets process, amounting to £98,000 have been expensed in the financial year.

2024

£’000

2023

£’000

Cost incurred on sale of VCT’s assets 305 252

305 252

12. Debtors

2024

£’000

2023

£’000

Prepayments and accrued income 51 80

51 80

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Notes to the Accounts (continued)

13. Creditors: amounts falling due within one year

2024

£’000

2023

£’000

Other loans 4,293 1,802

Taxation and social security 3 3

Accruals and deferred income 172 98

Creditors 21 23

4,489 1,926

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

Minsmere Power Limited 13 January 2020 ^ 50 –

50 –

Lunar 2 Limited 12 February 2018 ^ 768 768

17 December 2019 ^ 1,581 –

13 January 2020 ^ 474 –

2,823 768

Subtotal ^ 2,873 768

Minsmere Power Limited 22 December 2020 ^^ 25 25

30 June 2021 ^^ 27 27

6 June 2022 ^^ 13 13

65 65

HRE Willow Limited 22 December 2020 ^^ 228 228

16 March 2021 ^^ 64 64

6 June 2022 ^^ 44 44

336 336

Lunar 2 Limited 23 December 2020 ^^ 152 370

8 February 2023 ^^ 134 134

27 February 2023 ^^ 89 89

31 March 2023 ^^ 40 40

13 December 2023 ^^ 604 –

1,019 633

Subtotal ^^ 1,420 1,034

Amounts repayable within one year 4,293 1,802

^ 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.

Gresham House Renewable Energy VCT2 plc

14. Creditors: amounts falling due after more than one year

2024

£’000

2023

£’000

Other loans – 1,887

– 1,887

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

Lunar 2 Limited 18 December 2024 – 1,481

14 January 2025 – 356

– 1,837

Minsmere Power Limited 14 January 2025 – 50

Amounts repayable after more than one year – 1,887

15. Called up share capital

2024

£’000

2023

£’000

Allotted, called up and fully-paid:

26,133,036 (2023: 26,133,036) Ordinary Shares of 0.1p each 29 29

39,463,845 (2023: 39,463,845) ‘A’ Shares of 0.1p each 42 42

71 71

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.

Gresham House Renewable Energy VCT2 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 (3,404) (3,403)

Special reserve 8,736 9,713

Revaluation reserve 9,830 11,546

Capital reserve – realised (5,318) (3,265)

Revenue reserve 27 (176)

9,871 14,415

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 £3.4mn (2023: £6.3mn).

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.

Gresham House Renewable Energy VCT2 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 26,133,036 26,133,036 37.9 9,903 55.3 14,447

‘A’ Shares 39,463,845 39,463,845 0.1 39 0.1 39

Total 38.0p 9,942 55.4p 14,486

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. The

NAV per share disclosed therefore represents both the basic and diluted net asset value per Ordinary Share and 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 14,074 8,918 17,963

Other financial liabilities (145) (145) (43) (43)

Cash at bank 1 1 4 4

Other loans (4,293) (4,293) (3,689) (3,689)

Total 4,143 9,637 5,190 14,235

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.

Gresham House Renewable Energy VCT2 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 £14.1mn (2023: £18.0mn). The Board believes that valuing the investments as at



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% 1,920 days 330 668

Floating rate 0% 1 4

No interest rate 9,306 18,046

9,637 18,718

Gresham House Renewable Energy VCT2 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 £9 (2023: £10). 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



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 330 668

Cash and cash equivalents 1 4

Interest, dividends, and other receivables 43 71

374 743

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: £123,000) of which £67,300 related to the Costs incurred on sale of VCT’s assets. The VCT’s

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 £4,293,000 (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



Gresham House Renewable Energy VCT2 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 30September 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 4,293 – – 4,293

4,293 – – 4,293

As at 30September 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 1,802 1,887 – 3,689

1,802 1,887 – 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 30September 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

than

5 years

£’000

Total

£’000

Fully performing loan stock 330 – – – – 330

330 – – – – 330

As at 30September 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

than

5 years

£’000

Total

£’000

Fully performing loan stock 668 – – – – 668

668 – – – – 668

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 £4,293,000 (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.

Gresham House Renewable Energy VCT2 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 4 - (3) 1

Other loans 3,689 - 604 4,293

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.

Gresham House Renewable Energy VCT2 plc

Financial

StatementsGovernanceOverview

Registered number

07378395

Directors

Christian Yates (Chairman)

Matthew Evans

Andrew Donovan

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

Gresham House Renewable Energy VCT2 plc