AQUILA ENERGY EFFICIENCY TRUST PLC

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2024

INVESTING WITH IMPACT

AQUILA ENERGY EFFICIENCY TRUST PLC

ANNUAL REPORT 2024

For more information please contact:

Aquila Group

Valentinskamp 70

20355 Hamburg

Germany

Tel.: +49 (0)40 87 50 50-100

Email: info@aquila-capital.com

Web: www.aquila-capital.com

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Important Notice: This document serves informational purposes only. It constitutes neither an investment advice, an investment service nor the

invitation to make offers or any declaration of intent; the contents of this document also do not constitute a recommendation for any other

actions. The validity of the provided information is limited to the date of preparation of this document and may change at any time for various

reasons, especially the market development. The sources of information are considered reliable and accurate, however we do not guarantee the

validity and the actuality of the provided information and disclaim all liability for any damages that may arise from the use of the information.

Historical information cannot be understood as a guarantee for future earnings. Predictions concerning future developments only represent

forecasts. Statements to future economic growth depend on historical data and objective methods of calculation and must be interpreted as

forecasts. No assurances or warranties are given, that any indicative performance or return will be achieved in the future. The terms Aquila

and Aquila Capital comprise companies for alternative and real asset investments as well as sales, fund-management and service companies

of Aquila Group (“Aquila Group” meaning Aquila Capital Holding GmbH and its affiliates in the sense of sec. 15 et seq. of the German Stock

Corporation Act (AktG)). The respective responsible legal entities of Aquila Group that offer products or services to (potential) investors/

customers, are named in the corresponding agreements, sales documents or other product information.

A publication of Aquila Capital Investmentgesellschaft mbH. As at 28 April 2025

COMPANY INFORMATION

Contents

Your Company at a Glance ...........................3

Highlights.........................................3

STRATEGIC REPORT

Chair’s Statement ..................................4

Investment Adviser’s Report ..........................6

Environmental, Social and Governance ................13

Investment Policy .................................16

Key Performance Indicators .........................18

Risk Management .................................19

Section 172 Report ................................24

Other information .................................26

GOVERNANCE

Directors’ Report ..................................28

Corporate Governance Statement.....................34

Directors’ Remuneration Report ......................43

Report of the Audit and Risk Committee ...............48

Statement of Directors’ Responsibilities ...............51

FINANCIAL STATEMENTS

Independent Auditors’ Report .......................52

Consolidated Statement of Profit or Loss and

Comprehensive Income .............................60

Company Statement of Profit or Loss and

Comprehensive Income .............................61

Consolidated Statement of Financial Position ...........62

Company Statement of Financial Position ..............63

Consolidated Statement of Changes in Equity ...........64

Company Statement of Changes in Equity ..............65

Consolidated Statement of Cash Flows ................66

Company Statement of Cash Flows....................67

Notes to the Financial Statements ....................68

OTHER INFORMATION

Alternative Performance Measures ...................92

Glossary .........................................93

Annex I - Article 8 Periodic Disclosures ................95

Company Information ..............................99

For more information please visit our website

www.aquila-energy-efficiency-trust.com

YOUR COMPANY AT A GLANCE

Investment Objective

FOLLOWING THE ADOPTION OF A NEW INVESTMENT POLICY AT THE 2023 AGM,

AQUILA ENERGY EFFICIENCY TRUST PLC IS BEING 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.

Management

The Company has appointed FundRock Management

Company (Guernsey) Limited as its Alternative Investment

Fund Manager (“AIFM”) to provide portfolio and risk

management services. The AIFM is part of the Apex Group.

The AIFM has appointed Aquila Capital Investmentgesellschaft

mbH as its Investment Adviser (“Aquila Capital” or

“Investment Adviser”). The Investment Adviser is part of the

Aquila Group, which was founded in 2001. Since its inception

it has undertaken a range of advisory mandates, mostly

focused on renewable energy infrastructure, including energy

efficiency.

The Board comprises four non-executive Directors, all of

whom are independent of the Investment Adviser, from

relevant and complementary backgrounds offering

experience in the management of listed funds, as well as

in the energy efficiency and infrastructure sectors.

Capital Structure

As at 31 December 2024, the Company’s share capital

comprised 81,438,268 ordinary shares of £0.01 each

(“Ordinary Shares”) (31 December 2023: 100,000,000).

The Ordinary Shares are admitted to trading on the Main

Market of the London Stock Exchange.

Highlights (Consolidated figures)

Financial information

As at

31 December

2024

As at

31 December

2023

NAV per Ordinary Share (pence) 85.55 94.28

Ordinary Share price (pence) 52.00 57.25

Ordinary Share price discount to

NAV

(%)

(39.2) (39.3)

Dividend per Ordinary Share

(pence)

6.139 –

Net assets (£ million) 69.67 94.28

Ongoing charges

(%) 3.8 3.5

Performance summary

For the year

ended

31 December

2024

% change

For the year

ended

31 December

2023

% change

NAV total return per Ordinary

1,3

(2.7) 0.3

Share price total return per

Ordinary Share

1,3

1.6 (17.6)

1 Alternative Performance Measures (“APMs”), as defined by the European and Markets Authority. Definitions of APMs, and other terms used in the report, are given on page 92

together with supporting calculations where appropriate.

2 Dividend declared and paid in respect of the financial year.

3 Adjusted for dividends paid during the financial year.

CHAIR’S STATEMENT

Investment Performance

The Company’s NAV per share as at 31 December 2024

was 85.55p (2023: 94.28p), representing a decrease of

9.3% which, amongst other things, reflects the payment

of a dividend of 6.139 pence per ordinary share on

1November 2024 as part of the return of capital to s. The

Company’s shares continued to trade at a significant

discount to NAV over the period. The NAV total return,

which includes an adjustment for the dividend paid,

amounted to a negative 2.7% return. As discussed in

previous Statements, the focus has been on maximising

value for the return of capital to Shareholders. This has

meant working on withdrawing from pre-existing

commitments where legally possible, negotiating exits to

achieve acceptable realisations and only advancing

commitments of further capital where legally committed

to do so. The results of this are further detailed in the

Investment Adviser’s report.

The Group’s investments continue to produce income. In

2024, total investment income was £5.4 million, a decrease

of £0.6 million versus the previous year and net revenue

loss was £0.2 million (2023: £0.9 million profit). In the

same period, investment income from investments was

£4.7 million compared to £5.0 million in the previous year,

a decrease of £0.3 million, which was largely attributable

to lower investment income from the Company’s Superbonus

investments in Italy. The Superbonus investments are

described in further detail in the Investment Adviser’s

Report on pages 8 to 9 of this Annual Report. In the same

period, interest income from cash deposits was £0.7 million

compared to £0.9 million in the previous year, a decrease

of £0.2 million as a consequence of the lower level of

average cash balances held during the period following

the return of capital referred to.

In line with the Company’s investment policy, on 31December

2024, £53.3 million of the Company’s investments of

£56.3 million were denominated in Euros. Information on

the Company’s continued use of forward foreign exchange

agreements to hedge the value of the Euro-denominated

investments can be found on page 7 in the Investment

Adviser’s report.

Following an extensive asset sale process run on behalf

of the Company, by its financial advisors, and which ended

in February 2024, the Board has continued to seek and

assess opportunities to realise capital through the sale of

assets. This remains challenging. As discussed in previous

reports, the portfolio consists of assets that are geographically

diverse, small in size, contractually complex and many

have lengthy maturities of between ten to eighteen years.

Furthermore, because of the Managed Run-Off status of

the Company, additional complexities have arisen around

the realisation of and protection of value in the Company’s

assets. Our counterparties on some of these investments

are aware of the Managed Run-Off position of the

Company, and it appears that this is potentially placing

us at a disadvantage in certain negotiations/relationships.

The Board remains actively involved in negotiating terms

to protect the value in the portfolio and continues to work

actively with its financial and legal advisers on seeking

alternative ways to deliver the return of capital to our

Shareholders.

Return of Capital

On 6 March 2024, the Company announced that it

intended to return capital to Shareholders by way of a

Tender Offer to ordinary Shareholders of up to 18,561,732

ordinary shares for a maximum aggregate cash consideration

of £17.5 million. This entitlement to tender was undertaken

at a price of 94.28p, the Company’s NAV per share at

31December 2023. The Tender Offer was launched on

19 April 2024 and the result of the Tender Offer was

announced on 13 May 2024; 90,231,121 shares were

validly tendered, and the requisite Special Resolution was

passed, resulting in the purchase by the Company of

18,561,732 shares, which was the maximum amount

possible under the terms of the Tender Offer.

ON BEHALF OF THE BOARD, I AM PLEASED TO PRESENT THE ANNUAL REPORT (THE

“ANNUAL REPORT”) FOR AQUILA ENERGY EFFICIENCY TRUST PLC, FOR THE YEAR

ENDED 31 DECEMBER 2024.

The Board intends to continue returning capital to

Shareholders, either through the payment of dividends

or by means of Tender Offers as soon as sufficient realisation

proceeds are received. We have engaged with the majority

of our largest Shareholders who have expressed a preference

for returns of capital to occur in meaningful tranches, and

we will continue with that strategy, if appropriate. However,

if realisations are either delayed or it takes longer to make

sizeable returns of capital, the Board will still consider the

payment of dividends which provide a much more

cost-effective return of capital. As noted, a dividend of

6.139p per share was paid on 1 November 2024.

Significant Developments since 31 December 2024

In the 3 months ended 31 March 2025, proceeds of £23.8

million were realised from repayments:

n In January and February 2025, the Company received

£0.5 million and £7.0 million from a quarterly contractual

payment and full repayment, respectively, of the Bio-LNG

investment in Germany; and

In February and March 2025, three of the five Superbonus

investments were largely repaid realising proceeds of

£16.3 million. This represents repayment of the majority

of Superbonus investments in Italy.

The repayments of the Superbonus investments were

made after negotiation by two of the three developers of

these projects (the “ESCOs”), and not from proceeds

received from the purchasers of the tax credits generated

from these projects, which was the expected source of

repayment when these investments were initially made.

The return from the Superbonus projects was in two parts,

payments for the tax credits and an interest element

calculated by reference to the delay in receiving payment.

In order to mitigate the significant delayed interest cost,

which was being borne by ESCOs, a repayment plan was

proposed to reduce the impact of late payment interest

accruing on these investments. To accelerate the realisation

of these Superbonus investments, which has been significantly

slower than originally anticipated, the Company accepted

a modest discount of the full late payment interest due

on these investments. These investments achieved internal

rates of return of greater than 9% p.a.

The Board is in discussions whether an early repayment

plan for the two other Superbonus investments is feasible

and in Shareholders’ interests, taking into account the

contractual arrangements.

Costs

The Board continues to be very mindful of the costs

incurred in the running of the Company whilst it is in

Managed Run-Off. The unintended and unhelpful

consequences of the Managed Run-Off are numerous.

In particular, some investment counterparties and service

providers no longer have the same incentives and

motivation to cooperate with the Company and this is,

in some cases, leading to additional costs being incurred.

We will remain focused on cost recovery and reduction,

in particular, where additional costs have been incurred

as a consequence of underperformance of particular

services provision.

Return of Capital post year end

Given the recent substantial repayments of investments

and the accumulated cash position at 31 March 2025

of £36.4million, excluding £2.5 million cash held as

collateral for hedging, the Company will make a distribution

of £30 million as quickly and as cost-effectively as

practicable. The assets remaining after the realisations

referred to above and excluding the two Superbonus

investments, have an average life of 8.9 years. Currently,

no significant realisations are expected on a contractual

basis for several years.

The Board of Directors has declared a special interim

dividend of 36.837 pence per Ordinary Share in respect

of the first six months of the financial year ending

31December 2025 payable on 30 May 2025 to Shareholders

on the register on 9 May 2025. The ex-dividend date is

8 May 2025.

Miriam Greenwood OBE DL

Chair of the Board

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INVESTMENT ADVISER’S REPORT

Overview

During 2024, the Investment Adviser continued to support

the Managed Run-Off of the Company’s Portfolio by, (i)

limiting new investment activity to the execution of

commitments agreed up to the date of the continuation

vote in February 2023, (ii) the withdrawal from pre-existing

legally binding commitments where feasible on acceptable

terms, (iii) undertaking negotiations to achieve the realisation

of individual investments at acceptable terms before their

contracted maturity date, and (iv) the monitoring of

performance and addressing where necessary operating

performance and/or payment issues in the Company’s

Portfolio.

During 2024, the Company invested the second and final

tranches of two investments, a rooftop Solar PV project in

Italy with an investment of £0.4 million and a biogas

investment in Germany with an investment of £3.7 million.

These investments were completed in the first half of 2024

and no additional investments, except for transaction costs,

were made in the second half of 2024. The final tranche

of an investment for the Spanish building refurbishment

project was not required because it was offset against the

receipt of grant funding for this project. There now remains

only one small investment commitment, excluding sundry

investment costs, of less than £0.05 million to a UK

lightingproject.

During 2024, the Company realised two Solar PV investments

in Spain generating proceeds of £1.0 million. One of these

transactions enabled the Company to withdraw from an

existing commitment to invest £0.5 million in another solar

PV project in Spain. In February 2025, the Company

completed the sale of its Bio-LNG investment in Germany

at a small premium to book value of £7.4 million as at

31 December 2024. Total proceeds from this investment

in 2025 amounted to £7.5 million after taking account of

a scheduled cash receipt of £0.5 million in January 2025.

During 2024, the Company received £5.0 million of cash

from the Superbonus investments in Italy, which were

valued at £24.8 million as at 31 December 2024 (£30.9

million as at 31 December 2023). This amount was

substantially less than expected. However, as reported in

the Chair’s Statement above, following negotiations with

two ESCOs, £16.3 million was received by the end of

March 2025, from the repayment of the majority of the

Superbonus investments.

The Investment Adviser is in discussions whether an early

repayment plan for the two remaining Superbonus investments

is feasible and in Shareholders’ interests, taking into account

the contractual position.

The Investment Adviser continues to closely monitor the

performance of all of the Company’s investments and, in

particular, the receipt of cash payments, which are due on

a monthly, quarterly and annual basis. In 2024, the large

majority of the Company’s other (i.e. non-Superbonus)

investments and, in particular, all of the larger investments,

performed in accordance with their contractual terms.

However, there are investments in the portfolio which

continue to be problematic:

n Two Solar PV investments in Spain, which were written

down as at 31 December 2024 to £0.4 million (£1.3million

as at 31 December 2023) because of operational difficulties

with individual projects, the failure of the ESCOs which

developed the projects to remedy these difficulties and

expected higher O&M costs from having to replace these

ESCOs.

The two wind investments in the UK, which were

written down to a value of £1.0 million as at

31 December 2024 (£1.9 million as at 31 December

2023), principally because of operational problems at

individual sites, which have resulted in lower than

expected electricity production and higher operational

and maintenance costs.

It has also been necessary in 2024 to make further provisions

of £0.8 million against three amortised cost investments,

taking these investment values to zero:

The German sub-metering investment, which had a

book value of £0.2 million as at 31 December 2023

versus cost of £1.7 million, was fully provided against

as at 30 June 2024 and 31 December 2024 because,

following the insolvency of the service provider in

October 2023, it now appears that any sale proceeds

from selling the sub-metering contracts are unlikely to

exceed tax and other liabilities of the SPV into which

the original investment was made.

The UK CHP investment, which had a book value of

£0.5million as at 31 December 2023 versus cost of

£1.0million, was reduced to a book value of zero because,

following the ESCO’s client, Vale of Mowbray, entering

into administration and subsequently liquidation, there

has been no significant progress to date with the new

owner of the site nor in securing a new customer for

the CHP equipment.

A Solar PV project in Spain, which had a book value of

£0.1 million as at 31 December 2023 versus cost of

£0.2 million, was also fully impaired as at 31December

2024. This investment, which comprised two Solar PV

installations, was developed and maintained by an

ESCO which entered into bankruptcy in 2024 and it

has not proved possible to secure a new O&M provider

to replace the ESCO on economic terms to protect the

value of the investment.

As at 31 December 2024, £53.3 million of the Company’s

total investments of £56.3 million were denominated in

Euros. During 2024, the Company continued to use forward

foreign exchange agreements to hedge the value of the

Euro denominated investments. In the year ended 31December

2024 the Company reported realised foreign exchange

gains of £3.5 million, receiving £3.6 million in cash upon

settlement of these forward foreign exchange agreements.

The Company continues to seek to hedge approximately

100% of the value of the Company’s Euro denominated

investments. The quantum of the forward foreign exchange

agreements is modified upon the rollover of the contracts,

which have maturities of between one and three months,

to reflect additional deployment and returns of capital and

changes in valuation. As at 8 April 2025, the Company had

entered into forward foreign exchange agreements in an

amount of £31.3 million following the significant repayment

of Euro denominated investments. £2.5million of the

Company’s cash balances continue to be held as security

by the bank providing the forward foreign exchange

contracts.

As at 31 December 2024, the Company’s cash position,

including cash held as collateral for foreign exchange

hedging, was £14.4 million. The cash position increased

significantly to £38.9 million as at 31 March 2025 because

of the repayments of the Bio-LNG investment in Germany

and the partial repayments of the Superbonus investments.

Portfolio Overview

As at 31 December 2024, the Company’s portfolio of 29

Energy Efficiency Investments was diversified across

geographies (Italy, Spain, Germany and the United Kingdom),

technologies, counterparties and ESCO partnerships.

The Company’s portfolio is characterised by projects with

(i) a low technology risk through the use of proven

technologies; (ii) medium to long-term contracts providing

for predictable cash flows; and (iii) counterparties with

good creditworthiness.

i) Projects by Technology

CHP

Wind

Lighting

Heating

Biogas / BioLNG

Solar PV

Water Management

Building Retrofit

0.7%

1.8%

2.8%

3.7%

13.2%

13.6%

16.1%

48.1%

% of investment values by technology – as of 31 December 2024

ii) Projects by Tenor

15-20

10-15

5-10

2-5

0-2

0.3%

12.1%

42.0%

1.5%

44.1%

% of investment values by maturity (years) – as of 31 December 2024

Years

1 Investments with a value of zero as at 31 December 2024 are excluded

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

iii) Projects by Country

Germany

% of investment value by country – as of 31 December 2024

Italy

Spain

United Kingdom

10.8%

32.9%

50.9%

5.4%

iv) Projects by Investment Grade

CCC/CC

BB-

BB+/BB

BBB+/BBB-

A-

AAA/AA-

0.5%

10.7%

5.2%

75.5%

0.4%

7.7%

% of investment values by credit rating – as of 31 December 2024

Approximately 84% of the Company’s investments by

value as at 31 December 2024 (72% as at 31 December

2023) had investment grade counterparties, as assessed

using either the Investment Adviser’s credit analysis or

external agencies. The increase in the percentage of

investment grade counterparties is mostly attributable to

an improvement in the credit rating of one of the ESCOs

managing two Superbonus investments from BB+/BB to

BBB+/BBB-. However, the percentage of the higher

investment grade ratings, i.e. above BBB+/BBB-, reduced

from 19% of the Company’s investments by value as at

31 December 2023 to 8% as at 31 December 2024. This

change was primarily due to a change in the credit rating

of the German Bio-LNG investment from A- to BBB+/BBB-.

As reported above, this project has now been realised.

For projects which are non-investment grade, there are

typically additional protections. These protections include

the ability to export power to the grid, and to extend the

maturity of a contract with the ESCO and the underlying

counterparty to recover missed payments. The latter is

possible because the Company’s financing agreements

are of a shorter duration than the useful life of equipment

installed and, in many cases, of a shorter duration than

the contract between the ESCO and the counterparty.

The credit quality and performance of the Company’s

portfolio is discussed further below in respect of valuations

and Expected Credit Loss (‘ECL’).

The Company’s portfolio comprises largely fixed return

cash flows. Following a renegotiation of the terms of the

German Bio-LNG investment, 95% of the total investment

value provides a fixed rate of return from contracted cash

flows (84% as at 31 December 2023). Approximately 5%

by investment value has variable cash flows linked to

power production and power prices, or inflation indexation.

In many cases, these variable return investments have

significant fixed income elements, for example feed-in

tariffs or fixed power prices in Power Purchase Agreements.

In addition, certain investments have downside protections,

for example, minimum contractual returns in order to

reduce the risk of lower than forecast cash flows.

The Company’s portfolio of investments is expected to

achieve an overall unlevered average return of 9.2% per

annum, an increase from the yield of 8.1% per annum

reported in the Half-Yearly Financial Report for the six

months ended 30 June 2024. The increase is mostly

attributable to reductions in the carrying value of the

Company’s investments as at 31 December 2024.

Investments in Italy (£28.7 million value as at

31 December 2024)

In 2024, the Company invested £0.4 million to complete a

rooftop Solar PV project developed by Noleggio Energia,

with whom the Company has made seven investments. As

at 31 December 2024, total investment value in Italy was

£28.7 million across a total of 13 investments and there

were no outstanding investment commitments.

1) Investments in Italian “Superbonus” projects (£24.9 million

value as at 31 December 2024)

In 2024, the Company received £5.0 million from the

Superbonus investments while no further capital was required

to be deployed. The ESCOs continued to experience delays

with final payments from the buyers of the tax credits.

However, in the three months ended 31 March 2025 the

Company received £16.3 million in substantial repayment

of three of the five Superbonus investments.

“Superbonus” is an incentive measure introduced by the

Italian Government through Decree “Rilancio Nr. 34” on

19 May 2020, which aimed to make residential buildings

(condominiums and single houses) more energy efficient

through improvements to thermal insulation and heating

systems. When qualifying measures were completed, ESCOs

delivering the measures were awarded a tax credit equal

to 110%

of the cost of the measures. These tax credits

INVESTMENT ADVISER’S REPORT

CONTINUED

2 The Italian Government has made various modifications to Superbonus, including the value of tax credits awarded and how these tax credits can be utilised.

can then be sold to banks, insurance companies and other

corporations and, thus, projects can be financed without

the need for a financial contribution from landlords. The

projects involve a range of energy efficiency measures

including insulation, the replacement of heating systems

with more efficient solutions and energy efficient windows.

2) Solar PV investments for self-consumption in Italy

(£3.8 million value as at 31 December 2024)

As at 31 December 2024, the Company had invested in

eight rooftop Solar PV projects with an aggregate capacity

of 5.1 MWp and a book value of £3.8 million. Following

completion of the final project in January 2024 with an

investment of £0.4 million, all of these projects are

operational and cash generative. These projects enable

companies to reduce their energy costs and CO

emissions

and avoid grid losses through the self-consumption of the

electricity produced.

2.i) Projects with Noleggio Energia

Of the eight Solar PV projects which the Company has

committed to finance, seven projects have been developed

by the ESCO Noleggio Energia, which was established in

2017 and is an Italian company that specialises in providing

operating leases for energy efficiency and renewable

energy projects for commercial and industrial clients in

Italy. These projects are all structured as the purchase of

receivables from operating leases with maturities of five

to ten years, with a remaining weighted average maturity

of 7.3 years outstanding, and all use very similar

documentation. Energia has paid the SPV the monthly

receivables from these operating lease agreements, which

provide for fixed rates of return with a weighted average

return of 8.4% per annum.

2.ii) Project with CO-VER Power Technologies

In January 2022, the Company refinanced the acquisition

of an existing rooftop Solar PV plant in Ascoli Piceno

(Central Italy) with a generating capacity of 902 kWp. The

investment, with an original cost of £0.7 million, is based

on the purchase of receivables generated by an energy

service contract between the leading Italian engineering

firm CO-VER Power Technologies (“CO-VER”) and its

subsidiary Futura APV S.r.l. (“Futura”). The contract governs

the management of an operating roof-mounted Solar PV

plant until April 2028. Thereafter, the investment is based

on a feed-in tariff for an additional six years, aggregating

to a twelve-year tenor. The investment, which generated

total cash receipts of £0.3 million in the period from

inception of the investment until 31 December 2024, is

forecast to generate a return of 8.4% per annum based

on the valuation as at 31 December 2024 of £0.58 million.

CO-VER has a successful 20-year history in developing

industrial projects in the areas of energy storage systems,

co/tri-generation plants and renewable energies. Futura

is the owner of the PV plant which benefits from feed-in

tariffs payable by Gestore dei Servizi Energetici (“GSE”).

GSE is a joint stock company managed by the Italian

Government which is responsible for promoting and

developing the growth of renewable assets in Italy. GSE

currently has a credit rating of BBB+ from the Italian

Government.

Investments in Spain (£6.1 million value as at

31 December 2024)

In 2024, the Company deployed no further capital into

investments in Spain, other than a small amount for

investment costs. As at 31 December 2024, total investment

value in Spain was £6.1 million across a total of six investments

and there were no outstanding investment commitments.

1) Solar PV investments in Spain (£3.8 million value as at

31 December 2024)

During 2024, the Company completed the sale of two

Solar PV projects, generating cash proceeds of £1.0 million.

As at 31 December 2024, the Company had capital invested

in five Solar PV installation projects throughout Spain with

five project developers. The largest project, with a value

of £2.8 million as at 31 December 2024 has been structured

to provide a fixed rate of return. The other four projects

have been structured under Power Purchase Agreements

(“PPAs”) with maturities of up to eighteen years and have

variable revenues, often subject to a combination of

production fluctuations, power price changes and inflation.

In addition, excess production beyond the on-site demand

may be injected into the grid. These variable revenue risks

are mitigated by conducting technical due diligence prior

to making commitments and by contracted prices within

the PPAs.

As reported earlier in the Investment Adviser’s Report,

there are operational issues with three Solar PV projects

in Spain, which were developed by ESCOs which have

entered into administration. These issues resulted in

negative fair value adjustments or impairments of £1.0 million

as at 31 December 2024 compared to the position as at

31 December 2023. In all of these cases, the Investment

Adviser has been seeking to exercise its legal rights including

its step in rights to procure a new ESCO to manage the

projects so that the PPAs can be maintained with the

counterparties.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INVESTMENT ADVISER’S REPORT

CONTINUED

2) Building Energy Efficiency Investments in Spain

(£2.3 million value as at 31 December 2024)

The Spanish Government has established incentive schemes

to promote energy efficiency measures in buildings, including

the “Programa de Rehabilitacion Energetica de Edificios”

(“PREE”). PREE is a €402.5 million incentive scheme in Spain

which is designed to promote and reward energy efficiency

improvements for condominiums and other buildings,

improving their energy rating by at least one energy class.

Under this scheme, the Company has invested £2.3 million

to fund the refurbishment of condominiums, which is being

managed by a leading ESCO specialised in designing and

implementing energy efficiency and renewable energy

projects in Spain. The investment cash flows, which are

expected to commence in the second quarter of 2025, are

based on the purchase of receivables generated by the

underlying energy saving contracts between the ESCO and

the “Comunidad de Proprietarios”; the legal entities which

represent each of the owners of the apartments in a

residential building. The receivables have been rated with

the S&P equivalent of AAA/AA-.

Investments in Germany (£18.6 million value as

at 31 December 2024)

In 2024, the Company invested £3.7 million to complete

the financing of the installation of liquefaction equipment

at a biogas plant in Northern Germany. There are no

further investment commitments outstanding to investments

in Germany. Following the decision as at 30 June 2024

to provide in full against this sub-metering investment in

Germany, the Company has three investments across three

distinct technologies including water management solutions,

Bio-LNG and heat pumps.

All of the investments in Germany now provide for fixed

rates of return because in December 2024 the Company

agreed to modify the terms of the Bio-LNG investment

to take out the variable return element, which previously

provided for the right to receive 5% of revenue generated

by the project in addition to a fixed return of 5% per

annum on the capital invested, capped at £1.1 million

across eight years. The investment was therefore structured

to provide for a fixed rate of return of 8.5% per annum.

As reported earlier in the Investment Adviser’s Report, the

Company completed the sale of the Bio-LNG investment

in Germany in February 2025 at a small premium to the

net book value at 31 December 2024. The two other

investments with a book value of £11.1 million as at

31December 2024 are performing in line with their contracts.

Investments in the United Kingdom

(£3.0 million value as at 31 December 2024)

In 2024, the Company deployed no further capital into

investments in the United Kingdom. There remains,

however, a small commitment outstanding of less than

£0.05 million for lighting investments. In May 2024, one

of the CHP investments was realised through a refinancing

arranged by the ESCO which developed the project. The

realisation resulted in proceeds of £0.1 million, which was

equal to the book value at the date of realisation. As at

31 December 2024, the CHP investment with EGA Energy

was provided against in full, resulting in an impairment

cost in 2024 of £0.5 million. Seven investments remain

in the United Kingdom of which four are lighting, one is

CHP and two are in wind power.

The lighting and CHP investments are fixed return investments

although one of the lighting investments benefits from

annual inflation adjustments to the income. The wind

investments are variable return investments due to the

variability of operation and maintenance costs, power

production and export tariffs, which are renewed each

year, although a significant percentage of revenue is based

on feed-in tariffs which benefit from annual inflation

adjustments.

The fixed return investments performed satisfactorily.

However, the wind investments, which had a value of £1.9

million as at 31 December 2023, have been written down

to a value of £1.0 million as at 31 December 2024 due

primarily to operational problems at individual sites, which

have resulted in lower than expected electricity production

and higher operation and maintenance costs. In addition,

the ESCO has withheld payments due to the Company in

2024 because it has not generated sufficient income to

cover its operating costs. The Company is in negotiations

with the ESCO to restructure the wind investments.

Valuations and ECL Provisions as at

31December 2024

As at 31 December 2024, the Company’s investments had

a book value of £56.3 million, with investments held at

amortised cost valued at £46.3 million and investments

held at fair value through profit or loss valued at £10.0 million

(see Note 4 to the Accounts).

The investments held at amortised cost are net of ECL

provisions of £4.4 million, which increased by £2.5 million

from £1.9 million as at 31 December 2023, reflecting:

an increase for Superbonus investments to reflect the

credit risk moving to the ESCOs themselves rather than

the purchasers of the tax credits generated by these

investments; and

additional provisions against the three investments

which were fully impaired as at 31 December 2024.

Apart from these projects, the Company has not experienced

payment issues of material significance on the receivables

from amortised cost investments due to be paid to it in 2024.

As at 31 December 2024, the Company’s eight fair value

investments had a book value of £10.0 million and

comprised:

The German Bio-LNG investment with a value of

£7.4million;

four Solar PV projects in Spain with an aggregate value

of £1.0 million;

two wind projects in the United Kingdom with an

aggregate value of £1.0 million; and

n a Solar PV project in Italy with a value of £0.6 million.

The changes in fair value of these investments are summarised in the chart below.

31/12/2024

Business plan update

Change in discount rates

FX effect

Distributions to AEET

Valuation timing*

Price Curve/CPI

31/12/2023

0% 20% 40% 60% 80% 100% 120%

-0.08%

7.10%

-10.08%

-3.69%

-3.71%

-11.92%

77.6%

100.00%

The change in valuation of the investments held at fair

value through profit or loss, as reported above, was

impacted primarily by operational issues with the wind

investments in the United Kingdom and Solar PV investments

in Spain:

The two wind investments in the UK, which had a value

of £1.9 million as at 31 December 2023, have been

marked down to a value of £1.0 million as at 31 December

2024 due primarily to operational problems at individual

sites, which have resulted in lower than expected

electricity production and higher operation and

maintenance costs.

n Two Solar PV investments in Spain, which had a value

of £1.3 million as at 31 December 2023, have been

marked down to a value of £0.4 million as at 31December

2024 due to operational difficulties with individual

projects and the failure of the ESCOs, who developed

the projects, which resulted in the need to introduce

new operational and maintenance service providers.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INVESTMENT ADVISER’S REPORT

CONTINUED

These operational issues have resulted in negative changes

to the forecast cash flows, referred to in the chart above

as business plan updates, and resulted in a negative change

of –11.9%. Other negative impacts on valuation were:

An overall increase in the discount rates applied to the

valuations, which had a negative effect of –3.7%

n FX effects, -3.7%;

n Distributions from these investments, -10.1%; and

Changes to forecast power price and inflation assumptions,

- 0.1%.

These impacts were offset by valuation timing, that is the

time value of money effect between the two valuation

dates, which had a positive effect of +7.1%. In addition,

the Company benefited from gains from forward foreign

exchange contracts which mitigated the negative FX

effects reported above.

Summary of Investments as at 31 December 2024

Description

Receivables

Weighted

Avg. Credit

Ratings

Term

Years Technology Status Country

Value

£k

Commitment

o/s

£k

Receivables (fixed) from sales of tax

credits generated under the Italian

Superbonus, which supports energy

efficiency retrofits of residential

buildings.

BB- 2 Building

Retrofit

Construction Italy 24,835 –

Subscription for Notes (fixed) entitling

the Note holder to receivables

generated through services

agreements for heat pump systems,

water management services and

sub-metering hardware and services in

Germany.

BBB+ / BBB- 9-15 Heat Pumps

Water

Management

Sub-meters

Default Germany 11,128 –

Subscription for a Note (fixed) for the

refinancing of an operating biogas

plant in north-eastern Germany and

an upgrade to a Bio-LNG facility.

BBB+ / BBB- 8 Biogas /

Bio-LNG

Operational Germany 7,423 –

Receivables (fixed/variable) from solar

PV plants and building refurbishment

projects in Spain.

BBB+ / BBB- 10 -18 Solar PV Operational Spain 6,098 –

Receivables (fixed/variable) from

Solar PV projects in Italy.

BBB+ / BBB- 7-10 Solar PV Operational Italy 3,826 –

Receivables (fixed/variable) from

wind, CHP, metering and lighting as a

service contracts in the UK.

BBB+ / BBB- 5-14 Wind

Lighting

CHP

Metering

Operational United

Kingdom

3,021 41

Notes:

The term is the original maturity of the investment.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)

Introduction

The Company’s goal is to generate attractive returns for

investors by reducing Primary Energy Consumption (“PEC”).

The Company seeks to achieve this through investing

principally in a diversified portfolio of energy efficiency

projects with high-quality counterparties. The Company’s

investments positively impact the environment by reducing

the amount of carbon dioxide produced, by decreasing

PEC and by increasing the amount of renewable energy

used. The synergies

generated by the reduction of PEC

and simultaneously using renewable energy sources further

decrease CO

emissions.

This is reflected across the investment philosophy and

approach of both the Company and its Investment Adviser,

Aquila Capital, who are dedicated to the green energy

transition. The Company is committed to being a responsible

investor, ensuring that environmental, social and governance

criteria are incorporated into day-to-day investment

decisions as well as generating a positive impact for society.

By reducing PEC, the Company often improves life standards

for end users; for example, better lights, easier maintenance,

reduced danger, security of supply and, very importantly,

the reduction of emissions like Nitrogen Oxides. In 2024,

the portfolio performed as follows:

n 5,285 tonnes of avoided CO

emissions (“tCO

e”); and

n 19,581 MWh of energy saved,

for total emission savings equivalent to 2,312 passenger

flights around the world

Method of Calculation for Energy Savings

(kWh) and Avoided CO

Emissions (tCO

The energy savings (in kWh) and avoided CO

emissions

(in tCO

e) are reported to Aquila Capital by third parties,

including the development companies, ESCOs and other

third parties. These reports are supported by asset-level

documentation of individual methodologies. Aquila Capital

has reviewed the individual methodologies for technical

consistency and reconciled the reported values for plausibility.

Where quantification of likely energy savings and avoided

emissions is not clear, for example, with the Superbonus

projects in Italy and the Bio-LNG, water metering and

heat pump projects in Germany, no estimations are included

in the avoided CO

emissions and energy savings statistics

above.

Only energy savings and avoided CO

emissions for

operational projects are considered on a pro-rata basis

for the time of operation during the reporting period.

Avoided CO

emissions are estimated in gross terms and

derived from energy savings in kWh using a conversion

factor (except CHP, see below) which measures the grid’s

emission intensity. Emissions incurred during the life cycle

of light bulbs such as materials sourcing, manufacturing,

installation, maintenance etc. are not available. The reported

metrics are estimations based on assumptions. For technical

reasons, it is not possible or feasible to observe or measure

actual energy or emission avoidance in real-time.

LED/Lighting: Savings estimates are derived based on

technical, product-specific attributes provided by the

product manufacturer. Lighting assets are typically not

connected to a distinct circuit. These solutions are

designed according to the requirements of a given

functional unit, i.e. office, street or space, which varies

on asset level. Changes in the number of light bulbs or

lumen are not considered.

Solar PV: Electricity production is translated into

emissions avoidance with a conversion factor (see

above). Production estimates for Solar PV assets are

evaluated during technical due diligence processes.

CHP: Avoided CO

emissions are calculated directly by

comparing the asset’s emissions based on the feedstock

used for a specific plant with a reference co-generation

unit’s emission factor.

ESG Approach

The Company has adopted Aquila Capital’s ESG Integration

Policy

, ensuring that environmental, social and governance

criteria have been incorporated into day-to-day investment

decisions as well as generating a positive contribution

3 International Renewable Energy Agency (Irena), “Synergies between renewable energy and energy efficiency” (2017), available at: https://www.irena.org/publications/2017/

Aug/Synergies-between-enewable-energy-and-energy-efficiency#:~:text=Renewables%20would%20account%20for%20about,country%2C%20sector%20and%20

technology%20levels

4 Passenger flights around the world: This number is derived from passenger flight emissions data retrieved on 4 April 2023 from the International Civil Aviation Organization;

https://applications.icao.int/icec/Home/Index. The total emissions associated with a passenger flight around the world based on a standard itinerary from New York to Dubai,

Bangkok, Sydney, Los Angeles and back to New York in the economy class is 2,285.80 kg CO

5 For details please refer to: https://www.aquila-capital.de/fileadmin/user_upload/ESG_report/Aquila_Group_ESG_Integration_Policy.pdf

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)

CONTINUED

forsociety. The Company’s investment approach is focused

on investments in energy efficiency projects located

primarily in Europe. These investments are predominantly

into proven technologies that deliver energy savings for

commercial, industrial and public sector buildings. Prior

to the adoption of the New Investment Policy by Shareholders

in June 2023 the Company sought to invest in projects

for the long term with a focus on optimising and improving

the assets’ PEC (and, of course, the Company’s investments

continue to meet this initial objective). Technologies include:

n LED Lighting Systems;

n Solar PV;

n HVAC/Buildings; and

n Bio LNG.

Environmental Contribution

The Company’s investments are focused on reducing PEC,

which should lead to significant reductions in greenhouse

gas emissions. In addition, local production of energy

(CHP, biomass boilers, Solar PV) reduces transportation

energy losses and grid over-utilisation. Smart meters and

other control technologies enable a better visibility and

management of energy and therefore represent a basis

for energy savings.

Social Contribution

Energy efficiency measures not only reduce PEC, but

typically also have a positive impact on health and quality

of life for different stakeholders, such as employees and

users of public facilities. This is largely achieved through

the installation of advanced solutions for lighting, heating,

cooling, ventilation and the associated control units. All

project developers are required to adhere to local, regional

and national health and safety laws, to train and educate

employees accordingly, to make sure casualties and injuries

are avoided. Aquila Capital’s ESG Integration Policy, as

adopted by the Company, has sought to exclude suppliers

and manufacturers that do not meet Aquila Capital’s

criteria (exclusion of certain sectors/subsectors, or companies

that, for example, use unfavourable labour conditions).

For all counterparties, a rating has been performed (in

collaboration with a third-party rating agency) assessing

the creditworthiness of the relevant counterparty as well

as a “Know Your Client” check for the relevant parties

involved to increase transparency of the counterparties’

activities.

Governmental Contribution

The Company’s business partners are required to adhere

to the requirements of the relevant social security and tax

authorities. The Company’s business partners are required

to provide evidence that they adhere to anti-bribery and

corruption laws.

Due Diligence

The Investment Adviser performed detailed ESG due

diligence for each asset prior to investment. The investment

management team followed a structured screening, due

diligence and investment process designed to ensure that

investments are reviewed and compared on a consistent

basis. Execution of this process is facilitated by the team’s

deep experience in energy efficiency project investing. As

part of this process, the Investment Adviser, as relevant

for each investment, considered:

total PEC reduction, and implied CO

emissions reduced

and/or avoided; and/or

total energy production from renewable and

non-renewable sources.

Governance Framework

The Company has an independent Board of Directors,

with FundRock Management Company (Guernsey) Limited

as the AIFM. The Board of Directors supervises the AIFM,

which is responsible for making recommendations in

relation to any investment proposals put forward by the

Investment Adviser. The Investment Adviser is fully regulated

and supervised by BaFin in Germany. The Company

maintains a comprehensive risk register which is regularly

updated and reviewed by the AIFM and the Board of

Directors. The Company has established procedures to

deal with any potential conflicts of interest in circumstances

where Aquila Capital (or any affiliate) is advising both the

AIFM (for the Company) and other Aquila Capital managed

funds. In the context of an investment decision, these

procedures may include a fairness opinion in relation to

the valuation of an investment, which is obtained from

an independent expert.

Monitoring of ESG

The Company’s commitment to and compliance with the

Company’s established ESG approach is monitored on a

continuous basis throughout the lifecycle of investments,

as they become operational. This includes:

ongoing monitoring of the PEC based on the energy

consumption and deriving from that the CO

savings,

where appropriate, monitoring additional environment

and ESG relevant developments both at the portfolio

and asset level; and

annual reporting, including ESG aspects, to relevant

stakeholders including ad-hoc reporting of any material

and urgent issues identified in the monitoring process.

The Company has been awarded the Green Economy

Mark from the London Stock Exchange. The Green Economy

Mark identifies London-listed companies and funds that

generate between 50% and 100% of total annual revenues

from products and services that contribute to the global

green economy.

Aquila Capital Investmentgesellschaft mbH

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INVESTMENT POLICY

As at the date of this Annual Report, the Company’s investment

policy (including defined terms) is as adopted at the June

2023 AGM pursuant to the Continuation Managed Run-Off

Resolution, which replaced the previous investment objective

and policy in its entirety and is set out below.

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.

The Company will pursue its investment objective by

effecting an orderly realisation of its assets in a manner

that seeks to achieve the best balance for Shareholders

between maximising the value received from those assets

and making timely returns of capital to Shareholders. This

process might include sales of individual assets, mainly

structured as loans/receivables, or groups of assets, or

running off the Portfolio in accordance with the existing

terms of the assets, or a combination.

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):

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

failure to make the follow-on investment may result in

a breach of contract or applicable law or regulation by

the Company; or

the investment is considered necessary to protect or

enhance the value of any existing investments or to

facilitate orderly disposals,

and in these circumstances the Company will observe the

following restrictions when making any such investments:

no more than 20 per cent. of its Gross Asset Value will

be invested in any single asset;

no more than 20 per cent. of its Gross Asset Value will

be invested in Energy Efficiency Investments with the

same Counterparty;

n no investments will be made outside of Europe; and

no more than 7.5 per cent. of its Gross Asset Value, in

aggregate, will be invested in Equity Investments, and

at all times such investments will only be made with

appropriate Shareholder protections in place.

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.

The Company will not undertake new borrowing.

As required by the UK Listing Rules, any material change

to the investment policy of the Company will be made

only with the approval of Shareholders by way of

ordinaryresolution.

Currency and Hedging

The Company does not use hedging or derivatives for

investment purposes. The functional currency of the

Company is sterling. With many of its investment assets

in euros the Company uses a series of regular forward

foreign exchange contracts to provide protection against

movements in the sterling exchange rate. Under these

arrangements the Company is required to provide £2.5million

in cash as collateral for these forward foreign exchange

contracts.

Cash Management

Cash held pending investment in Energy Efficiency

Investments or for working capital purposes will either be

held in cash or invested in cash, cash equivalents, near

cash instruments, bearer bonds and/or money market

instruments (“Cash and Cash Equivalents”). There is no

restriction on the amount of Cash and Cash Equivalents

that the Company may hold and there may be times when

it is appropriate for the Company to have a significant

Cash and Cash Equivalents position. For the avoidance of

doubt, the FCA’s restriction that not more than 15 per

cent. of the Gross Asset Value at the time an investment

is made will be invested in other closed-ended investment

funds which are listed on the Official List of the London

Stock Exchange, does not apply to money market typefunds.

Changes to and compliance with the Investment

Policy

As required by the Listing Rules, any material changes to the

Company’s Investment Policy as set out above will require

the approval of Shareholders by way of an ordinary resolution

at a general meeting and the approval of the FCA.

Compliance with the above restrictions will be measured

at the time of investment and non-compliance resulting

from changes in the price or value of assets following

investment will not be considered as a breach of the

investment restrictions.

In the event of a breach of the investment guidelines and

the investment restrictions set out above, the AIFM shall

inform the Board upon becoming aware of the same and

if the Board considers the breach to be material, notification

will be made to a Regulatory Information Service.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

KEY PERFORMANCE INDICATORS

Efficient Return of Capital

In line with the Managed Run-Off status of the Company,

the Board is focussed on the efficient return of capital to

Shareholders.

On 19 April 2024, the Company launched a Tender Offer

of up to 18,561,732 Ordinary Shares, representing

approximately 18.6 per cent. of the Company’s Issued

Ordinary Share Capital. Further to Shareholder approval

at the Company’s general meeting held on 13 May 2024,

90,231,121 Ordinary Shares were tendered and 18,561,732

Ordinary Shares were acquired at the Tender Price of

94.28pence per Ordinary Share, equating to £17.5 million

being returned to Shareholders, and then cancelled by

the Company.

As and when sufficient cash has been accumulated, the

Board’s intention is for there to be further distribution of

cash to Shareholders. However, if realisations are either

delayed or it takes longer to make sizeable returns of

capital, the Board will consider the payment of dividends.

The Company paid an interim dividend of 6.139p per

Ordinary Share, amounting to £5.0 million, to Shareholders

on 1 November 2024.

The Company has announced on 28 April 2025 the

intention to return a further £30.0

million by way of a

special interim dividend.

Discount of share price to NAV

The Board monitors the price of the Company’s shares in

relation to their NAV and the premium or discount at

which they trade. The share price closed at a 39.2%

discount to the NAV as at 31 December 2024. As at

25April 2025, the latest date prior to the publication of

the Annual Report, the share price discount to NAV

was25.4%.

Maintenance of a reasonable level of ongoing charges

The expenses of managing the Group are carefully monitored

by the Board. The Board receives and reviews management

accounts which contain an analysis of expenditure which

are reviewed at quarterly Board meetings. The Board

reviews the ongoing charges on a quarterly basis. Based

on the Group’s average net assets during the year ended

31 December 2024, the Group’s ongoing charges figure

calculated in accordance with the AIC methodology was

3.8% (31 December 2023: 3.5%). Following the

announcement of a special interim dividend on 28 April2025

the Board is reviewing its cost structure to reduce the

costs in absolute terms to alevel more appropriate for a

company of its size.

THE BOARD MEASURES THE COMPANY’S SUCCESS IN ACHIEVING ITS

INVESTMENT OBJECTIVE BY REFERENCE TO THE KEY PERFORMANCE

INDICATORS (“KPIs”) DESCRIBED BELOW:

1 The Board has announced a special interim dividend of 36.837p per share, payable on 30 May 2025, to Shareholders on the register on 9 May 2025. The ex-dividend date

is 8 May 2025.

RISK MANAGEMENT

Principal Risks and Uncertainties

During the year under review, the Company has carried

out a robust assessment of its principal and emerging risks

and the procedures in place to identify any emerging risks

are described below.

Procedures to identify principal or emerging risks:

The Board regularly reviews the Company’s risk matrix,

with a focus on ensuring that the appropriate controls are

in place to mitigate each risk. The experience and knowledge

of the Board is important, as is advice received from the

Board’s service providers, specifically the AIFM, which is

responsible for the risk and portfolio management services

and outsources the portfolio management to the Investment

Adviser. Each service provider has a role with respect to

the identification of risks:

1. Investment Adviser: the Investment Adviser submits a

quarterly report on the investment portfolio to the

Board which includes risks faced by the projects in the

portfolio, plus an update on hedging;

2. Alternative Investment Fund Manager: following advice

from the Investment Adviser and other service providers,

the AIFM maintains a register of identified risks including

emerging risks likely to impact the Company;

3. Broker: provides advice periodically specific to the

Company on the Company’s sector, competitors and

the investment company market whilst working with

the Board and Investment Adviser to communicate

with Shareholders;

4. Company Secretary: briefs the Board on forthcoming

legislation/regulatory change that might impact on the

Company; and

5. Association of Investment Companies (‘‘AIC’’): The

Company is a member of the AIC, which provides

regular technical updates as well as drawing members’

attention to forthcoming industry and regulatory issues.

Procedure for oversight

The Audit and Risk Committee undertakes a review at

least twice a year of the Company’s risk matrix and a

formal review of the risk procedures and controls in place

at the AIFM and other key service providers to ensure that

emerging (as well as known) risks are adequately identified

and, so far as is practicable, mitigated.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

RISK MANAGEMENT

CONTINUED

Principal Risks

The Board considers the following to be the principal risks faced by the Company along with the potential impact of

these risks and the steps taken to mitigate them.

Portfolio

Principal Risks Potential Impact/Description Mitigation

Counterparty /

Credit

The risk that the Company has allocated funds to a

Counterparty that defaults on its obligations.

This could impact the financial performance of the

Company and its ability to meet dividends as well as

achieving its intended goals and returns for its investors.

The Company has sought to invest mostly, although not exclusively,

in projects where the counterparties have an investment grade or

near investment grade rating. The Investment Adviser uses third

party credit rating service providers to support its credit risk

assessments.

Continued monitoring of the investments and the associated

counterparties/service providers, including the use of credit rating

data providers, allows the Investment Adviser to identify and

address these risks early. The Investment Adviser seeks to mitigate

credit risks, for example, in the case of Solar PV investments, by

the counterparty having the opportunity to sell electricity to the

grid or other customers where possible. The Investment Adviser

also seeks to structure investments whereby contracts can be

adapted/extended to accommodate periods of payment defaults.

The Board closely scrutinises, on an asset specific basis, the fair

value calculations and expected credit loss provisions proposed by

the Investment Adviser. An independent credit rating services

company provides probability of default (“PD”) and loss given

default (“LGD”) ratios of individual counterparties to support the

calculation of ECL provisions.

Diversification of counterparties and service providers ensures any

impact is limited. In addition, a diversified portfolio provides

furthermitigation.

Concentration

risk

The risk that the concentration of investments in a limited

number of countries, counterparties, geographical markets,

tenure and currencies could expose the Company to

unnecessary fluctuations in a narrow range of markets.

This risk could negatively impact the Company’s performance

and ability to meet strategic targets.

The AIFM and the Investment Adviser continuously monitor the

existing portfolio against the Company’s portfolio concentration

limits and investment policy. This mitigates the risk by ensuring

that concentration limits and asset diversification limits are observed.

As at 31 December 2024, the Company had no substantial geographic

exposure to any one country (with assets principally in Italy, Spain,

Germany and the UK).

Environmental/

Social/

Governance

(“ESG”)

Failure to adequately consider ESG implications when

making and monitoring investments could lead to

reputational risk: exposure to greenwashing claims and

potentially have an adverse impact on the portfolio’s

ability to achieve its targeted returns.

The Investment Adviser performs detailed due diligence on ESG

for each asset prior to recommendation.

General standards including IFS Performance Standards, IFC

Environmental Health and Safety Guidelines (‘‘EHS’’) and Equator

Principles as well as local health and safety and social laws are

reviewed on a regular basis for all assets depending on the location

and development status of each asset.

Economic and Markets

Principal Risks Potential Impact/Description Mitigation

Discount

management

Market sentiment has moved the share price to a persistent

discount to NAV.

There is a risk that the Company will not be able to find

ways to bring the share price back to NAV, leading to

Shareholders being unable to realise their investments

through the secondary market at Net Asset Value or at

market price.

Loss of market confidence in the Board/Investment

Adviser.

The Company’s Broker monitors the market for the Company’s

shares and reports at quarterly Board meetings. The Company has

the authority, if appropriate, to purchase Ordinary Shares in the

market with the result of, amongst other things, enhancing the Net

Asset Value per Ordinary Share.

The Board and Broker maintains engagement with Shareholders

and ensures good market information is available to investors.

Following the successful continuation and managed run-off vote in

June 2023, the Board, with its advisers, continues to consider strategic

options, including asset realisations, to maximise value for Shareholders.

Interest rates/

inflation

Changes to interest rates may impact the valuation of

the investment portfolio by impacting the valuation

discount rate. This in turn may have an adverse impact

on the attractiveness of returns.

Although energy prices have fallen from the heights,

they reached in mid-2022, current global geopolitics

could drive a return to increased energy prices and

volatility, as well as prolonged higher inflation and interest

rate levels.

The Company’s investments, which provide in many cases for fixed

returns, are not significantly exposed to inflation and interest rate

movements because the income streams from investments are not

subject to significant deductions for operating costs associated

with the investments. While there may be O&M costs these are

not a high percentage of revenues and so any inflationary pressures

on such costs are not expected to have a significant impact.

Furthermore, the Company has not taken on indebtedness to

finance its investments and so there is no risk of the costs of

indebtedness negatively impacting the revenues from investments.

Were the Company to take on indebtedness it may use derivative

instruments such as futures, options and swaps to protect the

Company from fluctuations in interest rates.

The Investment Adviser manages the correlation of cash flows to

inflation and resilience to the economic environment.

The Investment Adviser has sought to incorporate RPI adjustments

in investment documentation where possible.

In addition, investing in energy efficiency assets can in some cases

provide an effective protection against inflation, as many such

assets benefit from rising electricity prices with no burden on the

cost side in relation to the use of resources.

Relations with

ESCOs during

managed run-off

Entering a managed run-off has strained relations with

some ESCOs who may have expected further volume

from AEET over time, giving rise to further counterparty/

credit risk for the Company.

In certain investments there is risk on the ESCO to provide a

continuing service to enable the underlying investment, for example,

to deliver energy savings or produce renewable energy. Where

relationships may be strained the ESCO may not deliver such service

and/or there may be a requirement to secure an alternative service

provider, in which circumstances receivables may be at risk and/

or the cost of delivering the necessary services may increase.

Appropriate provisions have been made within the financial

statements where necessary. Communications with the ESCOs

from the Investment Adviser (“IA”) take into account these

considerations and professional advice has been sought by the

Company where needed.

The Board and IA will continue to monitor relations with ESCOs

as the run-off progresses.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

RISK MANAGEMENT

CONTINUED

Economic and Markets continued

Principal Risks Potential Impact/Description Mitigation

Service provider

risk

Risks that the Company’s third-party service providers

do not perform to the appropriate standards.

Potential lack of resource, experience or depth in the

Investment Adviser’s team to manage the Company’s

investments. This may be exacerbated by the Managed

Run-off status of the Company which has led, over time,

to reduced fees for the Investment Adviser.

Possible conflicts with other private Aquila clients and

private investing vehicles which Aquila cannot disclose

to the Board or the AIFM.

The Investment Adviser is dependent on key people to

identify, acquire and manage the Company’s investments.

The Board continues to monitor the quality of services provided by

all of its service providers, and in particular, the Investment Adviser.

Where it is deemed that work carried out by any service provider is

of insufficient quality, the Board will procure additional services from

other service providers with a view to ensuring the required standard

of portfolio management and reporting is maintained. The Board

will reserve its right to recover the cost of such additional services

from the current service providers.

Additionally through the Management Engagement Committee,

the Board conducts a formal assessment of each key service provider’s

performance once a year. To assist its ability to properly oversee the

Company’s service providers, the Board requires each service provider

to notify it as soon as reasonably practicable following any material

breach of its contract with the Company.

The Company and AIFM are made aware of and review potential

conflicts of interest at the time of each investment being made.

Conflicts of interest and investment allocation policies are in place

and agreed with the Board.

The strength and depth of the Investment Adviser’s resources mitigate

the risk of a key person departure and provides the ability to draw

skills from other areas if needed.

Operational

Principal Risks Potential Impact/Description Mitigation

IT security

A hacker or third party could obtain access to the Investment

Adviser or any other service provider and destroy data

or use it for malicious purposes resulting in reputational

damage and possible GDPR concern.

Data records could be destroyed resulting in an inability

to make investment decisions and/or monitor investments.

Service providers have been carefully selected for their expertise

and reputation in the sector. Each service provider has provided

assurances to both the AIFM and the Company on their cyber

policies and business continuity plans along with external reviews

of their procedures where applicable.

The AIFM, Administrator and Board include Cyber Risk in their

reviews of counterparties.

Principal Risks continued

Emerging Risks

Principal Risks Potential Impact/Description Mitigation

Shrinking

Company size

relative to cost

base.

As the run-off progresses there will be a significantly

reduced size to the portfolio, which will in turn reduce

the IA fee and potentially place a strain on available IA

resourcing. As several costs are fixed, this will potentially

lead to a growing cost base relative to the size of

theCompany.

The Board will continue to monitor the services of IA and other

providers during run-off. Should it be considered that there is either

a lack of sufficient service, this can be addressed prior to it having

a detrimental effect on the Company.

Conversely, should the Board feel that costs are becoming

disproportionately high relative to the requirements of the Company,

steps can be taken to scale back providers and their associated

costs where possible.

Financial

Principal Risks Potential Impact/Description Mitigation

Portfolio

Carrying Value

The principal component of the Company’s balance sheet

is its portfolio of energy efficiency assets. The Investment

Adviser is responsible for preparing a fair market value

of the investments where such investments have variable

returns. Fair value calculations rely on projections, which

involve estimates of the future, which are inherently

judgmental.

There is a risk that these valuations and underlying

assumptions such as discount rates being applied are not

a fair reflection of an open market valuation, therefore

the investment portfolio could be over or under valued.

Investments with fixed returns are measured at amortised

cost and subject to expected credit loss provisions, which

are based on numerous assumptions and judgments.

The Investment Adviser has experience in undertaking valuations

of renewable sustainability/energy transition assets. In addition,

independent advice from a professional accounting services firm

has been received to ensure that the Portfolio valuation adheres to

the relevant accounting standards.

The AIFM and the Board review and interrogate the valuations and

underlying assumptions provided by the Investment Adviser.

It should be noted that valuations are held at fair value and at

amortised cost and not at net realisable value.

Act of War/

Sanctions

As evidenced with conflict in the Ukraine and the Middle

East, various sanctions and restrictions imposed. There

is a possibility that there could be supply delays for

Operations and Maintenance (“O&M”), sanction

considerations, volatile markets and general uncertainty.

More difficult energy markets are expected along with

inflationary pressures on inputs.

It has also led to short term price increases and more

focus on renewable energy infrastructure.

Possible change to the world order and globalisation.

Conflict brings uncertainty to the commodities market

and how price levels of modules and other hardware will

be impacted directly or indirectly.

The Company does not have any direct exposure in Ukraine, Russia

or the Middle East, there are also no direct business relationships

with counterparties from these countries; therefore assessments

have led the Company to the conclusion that its investments in

Europe are not impacted directly at this time.

Capital

Preservation

During the run-off, there is a risk that overdistribution

of cash will leave the Company short of sufficient liquidity

to meet ongoing expenditure.

The Board, Investment Adviser and AIFM will review the ongoing

liquidity requirements and cashflow forecasts of the Company prior

to making distributions to ensure that sufficient funds are maintained

throughout the run-off process.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

SECTION 172 REPORT

In accordance with section 172 of the Companies Act 2006

(the “Act”), the Board has a duty to promote the long-term

success of the Company for the benefit of its Shareholders

as a whole and, in doing so, the Board is required to consider

the likely consequences of its actions over the long-term

and on other stakeholders and the environment.

The Directors are required to describe how they have had

regard to matters set out in section 172 of the Act.

Employees and stakeholders

As an externally managed investment company, the Company

does not have any employees. Its main stakeholders are as

set out in the diagram below which explains the relationship

between the Company and each of its stakeholders. The

Company’s stakeholders are the Board, Shareholders,

Investment Adviser, Investments, ESCOs, AIFM, Administrator,

Company Secretary, Broker, Legal Adviser and its Registrar.

The Board believes the best interests of the Company are

aligned with its stakeholders as all parties aim to ultimately

benefit from achieving the Company’s investment objectives

in compliance with regulatory, legal, ethical and commercial

standards.

Investment

Adviser

Board

Shareholders

Company

Secretary

Administrator

Registrar

Broker

AIFM

Investments

ESCOs

Legal

Advisers

Company

Company’s Operating Model

The Company was listed on the main market of the London

Stock Exchange on 2 June 2021. The Company can hold

investments directly or through subsidiaries.

Engagement with Key Service Providers

The Board has identified that its key service providers are

the Company’s AIFM, Administrator, Company Secretary,

Brokers, Legal Adviser, Registrars, PR Consultants and

Investment Adviser.

In order to ensure strong working relationships, the

Company’s key service providers are invited to attend the

regular Board meetings to present their respective reports.

The Board seeks to maintain constructive relationships

with the Company’s key service providers on behalf of

the Company through regular communications, meetings

and the provision of relevant information and update

meetings. This enables the Board to exercise effective

oversight of the Company’s activities.

On at least an annual basis, the Board has committed to

undertake a thorough evaluation of each of its service

providers during which it considers their performance

against the terms of their engagement, including each

service provider’s fees to ensure that each remain competitive

within the market. Additionally, on an annual basis the

Board reviews the internal reports produced on behalf of

those service providers that are key to the Company’s

day-to-day administration (the AIFM, Administrator and

Registrar) to ensure that there have been no failings in

their systems or procedures considered relevant to the

Company’s operations.

The Investment Adviser is the most significant service

provider to the Company and a description of its role can

be found on page 29. The Board receives regular reports

from the Investment Adviser, discusses the portfolio at

each Board meeting and maintains a constructive dialogue

between meetings. The Investment Adviser’s remuneration

is charged only on committed capital (being the sum of

funds actually invested and funds committed for investment

in Energy Efficiency Investments).

Engagement with Shareholders

Shareholders’ views are considered by the Board at their

quarterly meetings and assist in the Board’s decision-

making process.

The Board and the Company’s Broker engage constructively

with major Shareholders and the Board has meetings with

them as and when requested.

In addition, and in order to help the Board in its aim to

act fairly between the Company’s members, the Board

seeks to ensure effective communication is provided to

all Shareholders. The Board encourages Shareholders to

attend the Annual General Meeting on 28 May 2025 at

which the Board and representatives of the Investment

Adviser will be available to meet Shareholders in person

and to answer questions. The Annual Report has been

issued to Shareholders and will be available to view on

the Company’s website (www.aquila-energy-efficiency-

trust.com) as are the Company’s press releases.

Board Decisions

Investments

When the Company was set up and looking to invest the

proceeds raised in the IPO in June 2021, the Board was

presented with each investment opportunity identified by

the Investment Adviser, unless these fell under the authority

delegated to the AIFM to approve investments within certain

agreed criteria (“Delegated Authority”). These had undergone

a process of analysis and challenge by the AIFM, including

considerations relating to environmental, social and governance

issues. The Board considered each approved proposal

against the Company’s investment objectives, investment

policy and strategy. Following the failure of the continuation

vote on 28 February 2023, no new commitments were

made from that date, but contractually committed sums

were invested to honour existing contractual obligations.

During 2024, £4.2 million was deployed into investments,

which had been committed to on or before the date of the

Continuation Vote. As at 31 December 2024, the total value

of investments was £56.3 million. Further details for these

investments can be found at the Investment Adviser’s report

on pages 6 to 12.

Since the approval by Shareholders of the Managed Run-Off

in 2023 and following the unsuccessful attempt, run on

behalf of the Company by its financial advisers, to seek

offers from market participants for the portfolio of assets

(which ended in February 2024), the Board has continued

to seek opportunities to realise capital through the sale of

assets. Where the Board has been presented an opportunity

to realise an investment prior to its designated term it has

considered each opportunity against various criteria but

particularly whether the disposal represented fair value and

was in Shareholders’ interests, taking into account the New

Investment Policy.

Return of Capital

On 6 March 2024, the Company announced that it intended

to return capital to Shareholders by way of a Tender Offer

to ordinary Shareholders of up to 18,561,732 ordinary

shares for a maximum aggregate cash consideration of

£17.5 million. This entitlement to tender was undertaken

at a price of 94.28p, the Company’s NAV per share at

31December 2023. The Tender Offer was launched on

19 April 2024 and the result of the Tender Offer was

announced on 13 May 2024; 90,231,121 shares were

validly tendered, and the requisite Special Resolution was

passed, resulting in the purchase by the Company of

18,561,732 shares, which was the maximum amount

possible under the terms of the Tender Offer.

Decisions Following Year-End

Investments

As announced on 28 February 2025, the Company has

entered into agreements to realise its Bio-LNG investment

in Germany and the majority of its Italian Superbonus

investments for a combined gross consideration of

£26.8million.

As a result of these realisations, the Company has announced

on 28 April 2025 the payment of a special interim dividend

of 36.837 pence per Ordinary Share.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force for Climate-Related Financial

Disclosures (“TCFD”)

The Company notes the TCFD recommendations on climate

related financial disclosures. As stated above, the Company

is an investment trust with no employees, internal operations

or property and, as such, is exempt from TCFD disclosure

requirements.

Anti-bribery, corruption and tax evasion

It is the Company’s policy to conduct all of its business in

an honest and ethical manner. The Company takes a

zero-tolerance approach to bribery and corruption and is

committed to acting professionally, fairly and with integrity

in all its business dealings and relationships wherever it

operates. The Company does not tolerate the criminal

facilitation of tax evasion. The Company’s AIFM, Investment

Adviser, Company Secretary and Administrator have

confirmed that anti-bribery policies and procedures are

in place and that they do not tolerate bribery. The Company’s

policy and the procedures that implement it are designed

to support that commitment.

Conﬂicts of Interest

As required by law, a Director must avoid a situation where

he or she has an interest that conflicts with the Company’s

interests. The Company’s Articles of Association provide

the Directors with the authority to authorise potential

conflicts of interest. The Directors are able to impose limits

or conditions when giving authorisation if they think this

is appropriate. The procedure observed by the Board in

considering dealing with conflicted matters is as follows:

any Board member so conflicted must recuse themself

from the discussion involving the relevant conflict;

only Directors who have no interest in the matter being

considered are able to debate the matter and take the

relevant decision; and

n in taking the decision, the Directors must act in a way

they consider, in good faith, will be most likely to

promote the Company’s success.

The Directors have declared any potential conflicts of

interest to the Company. These are entered into the

Company’s register of potential conflicts, which is reviewed

regularly by the Board. The Directors are obliged to advise

the Company Secretary as soon as they become aware

of any potential conflicts of interest.

The Company has established procedures to deal with

any potential conflicts of interest in circumstances where

Aquila Capital is advising both the AIFM (for the Company)

and other Aquila Capital managed funds that are

counterparties to the Company. These procedures may,

on a case-by-case basis, include:

identifying whether potential conflicts of interest exist

on individual transactions and the nature of the potential

conflicts of interest;

establishing that an individual transaction has been

negotiated on arm’s length commercial terms;

separate teams at the Investment Adviser being established

in relation to any proposed transaction to represent

the Company and the relevant counterparty;

a fairness opinion on the value of the Energy Efficiency

Investments to be obtained from an independent expert;

a due diligence and reporting package from relevant

professional advisers on which the Company (or other

applicable vehicles) can place reliance;

the AIFM operating its own risk management system

and internal control system as well as monitoring approved

systems operated by the Investment Adviser; and

any conflict of interest arising in the course of the

transaction being resolved in accordance with procedures

agreed between the Investment Adviser and the AIFM,

subject to Board agreement.

OTHER INFORMATION

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Employees

The Company has no employees. As at 31 December

2024, the Company had four Directors, of whom two

were female and two were male. The Board’s policy on

diversity is contained in the Corporate Governance Statement

(see page 40).

Viability Statement

In accordance with the UK Corporate Governance Code

(“UK Code”) and the Listing Rules, the Directors have assessed

the prospects of the Company over a longer period than the

12 months required by the ‘Going Concern’ provision.

In reviewing the Company’s viability, the Directors have

assessed the viability of the Company for the period to

31 December 2027 (the “Look-forward Period”).

Following the change in investment policy approved by

Shareholders at the 2023 AGM, the Company entered a

managed run-off, meaning that it is not making any new

investments (save for in limited circumstances as set out

in the New Investment Policy) and its investing activity is

solely in respect of funding legal commitments to existing

investments (the “Managed Run-Off”). The Board will

continue to review strategic options in respect of the

Company’s assets to realise the maximum value for

Shareholders in the shortest possible time, recognising

the inherent difficulties in the construction of the portfolio,

including the number of investments, multiple geographies

and long tenors. While the Company is continuing to

explore strategic options there remains no certainty that

any of these options will materialise and be put to

Shareholders for consideration. Accordingly, the Directors

recognise that these conditions indicate the existence of

material uncertainty which may cast significant doubt

about the Group and the Company’s viability over the

Look-forward Period.

Although the Company is in a Managed Run-Off, the

Board believes that the Look-forward Period, being

approximately three years, is an appropriate time horizon

over which to assess the viability of the Company, particularly

when taking into account the long-term nature of the

maturity of the Company’s assets, which is modelled over

three years and the principal risks outlined above. In

considering the prospects of the Company, the Directors

looked at the key risks facing the Company, focusing on

the likelihood and impact of each risk as well as any key

contracts, future events or timescales that may be assigned

to each key risk.

The Directors have a reasonable expectation that the

Company has adequate resources to: continue in operation;

realise the Company’s assets in an orderly manner; and

meet its liabilities as they fall due, over the Look-forward

Period.

Outlook

The outlook for the Company, including the future

development and performance of the Company, is discussed

in the Chair’s Statement on page 4 and the Investment

Adviser’s Report on page 6.

Strategic Report

The Strategic Report set out on pages 4 to 27 of this

Annual Report was approved by the Board of Directors

on 28 April 2025.

For and on behalf of the Board

Miriam Greenwood OBE DL

Chair of the Board

28 April 2025

DIRECTORS’ REPORT

The Directors present their report and financial statements

for the year ended 31 December 2024.

Corporate Governance

The Corporate Governance Statement on pages 34 to 42

forms part of this report.

Introduction and Status

The Company is incorporated in England and Wales as a

public limited company and is domiciled in the United

Kingdom. It is an investment company as defined in section

833 of the Act and has a premium listing on the London

Stock Exchange.

The Company received approval as an investment trust

from HMRC. The Company must meet eligibility conditions

and ongoing requirements in order for investment trust

status to be maintained. In the opinion of the Directors,

the Company has met the conditions and requirements for

approval as an investment trust for the year ended

31December 2024, and the Directors, under advice, expect

the affairs of the Company to continue to satisfy the

conditions of an investment trust. The Company seeks to

continue to operate as an investment trust in accordance

with section 1158 and 1159 of the Corporation Tax Act

2010 (as amended by section 42(2) of the Finance Act 2011).

Greenhouse Gas Emissions (“GHG”) and Streamlined

Energy and Carbon Reporting (“SECR”)

As the Company has outsourced operations to third parties,

there are no significant GHG emissions to report in relation

to the operation of the Company. The Company qualifies

as a low energy user and is therefore not required to

produce an energy and carbon report under the SECR

framework. In relation to the Company’s investments, the

level of GHG emissions arising from a low volume of

electricity imports and from operation and maintenance

activity is not considered material for disclosure purposes.

Retail distribution of Investment Company shares via

ﬁnancial advisers and other third-party promoters

As a result of the Financial Conduct Authority (“FCA”)

rules determining which investment products can be

promoted to retail investors, certain investment products

are classified as ‘non-mainstream pooled investment

products’ and face restrictions on their promotion to retail

investors.

The Company has concluded that the distribution of its

shares, being shares in an investment trust, is not restricted

as a result of the FCA rules described above.

The Company currently conducts its affairs and intends

to do so for the foreseeable future so that the exclusion

continues to apply. The Company’s ordinary shares are

eligible for inclusion in a stocks and shares ISA.

Alternative Investment Fund Manager (“AIFM”)

The Company is classified as an Alternative Investment

Fund under The Alternative Investment Fund Managers’

Directive (“AIFMD”) and is therefore required to have an

AIFM. FundRock Management Company (Guernsey) Limited

is the AIFM of the Company.

The AIFM is responsible for the portfolio management of

the Company’s assets, including the following services:

• monitoring the Energy Efficiency Investments in

accordance with the Investment Policy;

• evaluating investment opportunities identified by the

Investment Adviser and making relevant recommendations

to the Board; and

• acting upon instructions from the Board with regard

to the execution of transactions on behalf of the

Company.

Under the terms of the AIFM Agreement, the AIFM is

required to provide risk management services to the

Company, including:

• assisting the Board with the establishment of a risk

reporting framework; monitoring the Company’s

compliance with its Investment Policy and the Investment

Restrictions in accordance with the AIFM risk management

policies and procedures and providing regular updates

to the Board; and

• carrying out a risk analysis of the Company’s exposures,

leverage, counterparty and concentration risk; and

analysing market risk and liquidity risk. The AIFM will

be required to record details of executed transactions,

carry out reporting obligations to the FCA and prepare

investor reports. In addition, the AIFM is required to

assist the Board in establishing, maintaining and

reviewing valuation policies for the purpose of calculating

the NAV.

Under an agreement dated 10 May 2021, the AIFM is

entitled to:

• a management fee of £87,500 per annum (subject to

annual RPI) plus an additional amount which is equal

to 0.015% per annum of the Net Asset Value of the

Company that exceeds £250 million;

• an additional fee of £3,000 per annum (subject to

annual RPI) in respect of each jurisdiction in which a

marketing notification has been made in accordance

with the UK AIFMD and the EU AIFM Directive; and

• the reimbursement of the investment advisory fee

payable by the AIFM to the Investment Adviser.

The AIFM Agreement is terminable by either party on not

less than six months’ notice in writing. The AIFM Agreement

may be terminated earlier by the AIFM with immediate

effect in certain circumstances.

The AIFM has the benefit of an indemnity from the

Company in relation to liabilities incurred by the AIFM in

the discharge of its duties other than those arising by

reason of gross negligence, wilful misconduct or fraud of

or by the AIFM.

Investment Adviser

The AIFM has appointed Aquila Capital Investmentgesellschaft

mbH as the Investment Adviser to provide investment

advisory services to the AIFM in respect of the Company

pursuant to the Investment Advisory Agreement.

The Investment Adviser is responsible for certain investment

advisory services to the Company, including sourcing

potential opportunities in which the Company may invest,

as well as on-going monitoring of the Energy Efficiency

Investments.

The Company will benefit from the advisory services

provided to the AIFM by the Investment Adviser in respect

of the Company and its Energy Efficiency Investments.

The Investment Advisory Agreement will continue in force

for an initial period of four years from the date of Admission.

The Investment Advisory Agreement will continue thereafter

on a rolling basis and may be terminated following the

initial period on 12 months’ notice in writing.

The AIFM has also agreed to indemnify the Investment

Adviser for losses that the Investment Adviser may incur

in the performance of its duties pursuant to the Investment

Advisory Agreement that are not attributable to the fraud,

gross negligence or wilful default of, the Investment Adviser

determined by a court of competent jurisdiction.

Under the Investment Advisory Agreement, entered into

at the time of IPO, the following fee is payable to the

Investment Adviser:

(i) 0.95% per annum of NAV (plus VAT) of the Company

up to and including £500 million; and

(ii) 0.75% per annum NAV (plus VAT) of the Company

above £500 million.

Under the Investment Advisory Agreement, the Investment

Adviser is entitled to an advisory fee based on the Company’s

NAV. As announced on 21 April 2022, the Investment

Adviser agreed to amend the Investment Advisory Agreement

such that any advisory fees payable are charged only on

committed capital (being the sum of funds actually invested

and funds committed for investment in Energy Efficiency

Investments), with this amendment to be applied

retrospectively from the time of the Company’s IPO.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Company Secretary and Administrator

Apex Listed Companies Services (UK) Limited has been

appointed to provide company secretarial and administration

services to the Group. The AIFM, Company Secretary and

Administrator are part of the Apex group of companies.

Alternative Investment Fund Portfolio Managers’

Directive

In accordance with the AIFMD, the AIFM must ensure that

an annual report containing certain information on the

Company is made available to investors for each financial

year. The investment funds sourcebook of the FCA (the

“Sourcebook”) details the requirements of the annual

report. All the information required by those rules are

included in this Annual Report or will be made available

on the Company’s website.

Continuing Appointment of the Investment Adviser

The performance of the Investment Adviser is subject to

rigorous review by the Board. During 2024, the continuing

appointment of the Investment Adviser was recommended

by the Board.

Share Capital

As at 31 December 2024, the Company’s issued share

capital comprised 81,438,268 Ordinary Shares (31 December

2023: 100,000,000).

Voting rights

Each Ordinary Share entitles the holder to one vote. All

Ordinary Shares carry equal voting rights and there are

no restrictions on those voting rights. Voting deadlines

are stated in the Notice of Meeting and Form of Proxy

and are in accordance with the Act.

Restrictions

There are no restrictions on the transfer of Shares, nor

are there any limitations or special rights associated with

regard to control attached to the Ordinary Shares. There

are no agreements between holders regarding their transfer

known to the Company, no restrictions on the distribution

of dividends and the repayment of capital, and no agreements

to which the Company is a party that might affect its

control following a successful takeover bid.

Results and Dividend

The Group’s revenue loss after tax for the year amounted

£0.2 million (2023: £0.9 million). An interim dividend of

6.139p per Ordinary Share was paid in respect of the period

ended 30 June 2024 and the Board has declared a special

interim dividend of 36.837 pence per ordinary share in

respect of the first six months of the financial year ending

30 June 2025, payable on 30 May 2025, to Shareholders

on the register on 9 May 2025. The ex-dividend date is

8May 2025.

Notifiable Shareholders

As at 31 December 2024, the Directors have been formally

notified of the following interests in the Company’s

Ordinary Shares, comprising 3% or more of the issued

share capital of the Company:

Shareholder Holding

Percentage

held*

Date

notified

Rathbones Investment Management Ltd 14,653,937 17.99 24/12/2024

Schroders Plc 12,087,401 14.84 16/05/2024

Lion Umbrella Fund I S. A. SICAV-RAIF 12,978,637 12.98 23/02/2022

Stichting Juridisch Eigendom Privium Sustainable Impact Fund 4,795,151 5.89 16/05/2024

Marmarkon 4 S.à r.l. 5,847,819 5.85 28/06/2021

City of Bradford - West Yorkshire Pension Fund 5,000,000 5.00 03/06/2021

Premier Miton Group plc 3,308,654 4.06 20/05/2024

* Percentage held as at the date notified.

DIRECTORS’ REPORT

CONTINUED

Since year end, the Company has been notified of the

following change to the above shareholdings:

• Rathbones Investment Management Ltd notified the

Company on 10 March 2025 that it had sold 1,295,225

Ordinary Shares, resulting in a holding of 16.40% of

the issued share capital of the Company; and

• Morgan Stanley notified the Company on 11 March

2025 of a holding of 5.04% of the issued share capital

of the Company.

Shareholder Engagement

The Board is mindful of the importance of engaging with

the Company’s Shareholders to gauge their views on

topics affecting the Company. The Chair engaged closely

with its major Shareholders during the year to discuss

their expectations and requirements.

The Company’s Annual General Meeting will be held on

28 May 2025 at 2:00pm at the offices of CMS Cameron

McKenna Nabarro Olswang LLP located at Cannon Place,

78 Cannon Street, London EC4N 6AF. Shareholders are

encouraged to attend the Annual General Meeting of the

Company. Proxy voting figures will be made available

shortly after the AGM on the Company’s website.

Appointment of Auditor

The Company’s auditors, PricewaterhouseCoopers LLP

(“PwC”), having expressed their willingness to continue

in office as auditors, will be put forward for appointment

at the Company’s Annual General Meeting and the Board

will seek authority to determine their remuneration for

the forthcoming year.

Going Concern

The Directors have adopted the going concern basis in

preparing the financial statements. The following is a summary

of the Directors’ assessment of the going concern status of

the Group and Company.

The Group and Company continue to meet day-to-day

liquidity needs through their cash resources. The Directors

have a reasonable expectation that the Group and Company

have adequate resources to continue in operational existence

for at least twelve months from the date of thisdocument.

In reaching this conclusion, the Directors have taken into

account the following considerations:

• The Group’s investment commitments, amounting to

£0.04million, and its income and expense flows;

• No new commitments have been entered into since

28February 2023;

• The £36.4 million cash balance at 31 March 2025

(excluding £2.5 million held as collateral for FX hedging)

following the receipt of repayments up to that date;

and

• The potential income from the remaining investments.

The Board has announced that a special interim dividend

of 36.837 pence per Ordinary Share will be paid on 30 May

2025. Total expenses for the year were £3.0 million (excluding

impairment losses) (2023:£3.3million), which represented

3.8% of average net assets during the year (2023: 3.5%).

The Board, Investment Adviser and AIFM will review the

ongoing liquidity requirements and cashflow forecasts of

the Company prior to making further distributions to ensure

that sufficient funds are maintained throughout the run-off

process. At the date of approval of this document, based

on the aggregate of investments and cash held, the Group

and Company have substantial operating expenses cover.

The Directors are also satisfied that the Group and Company

would continue to remain viable under downside scenarios.

As set out in the 2023 Annual Report, at the 2023 AGM,

Shareholders voted in favour of the Company’s change

of investment policy (the “New Investment Policy”).

Following the 2023 AGM, and in accordance with the

New Investment Policy, the Company entered a continuation

and managed run-off of its portfolio (“Managed Run-Off”),

meaning that it is not making any new investments (save

for the limited circumstances as set out in the New

Investment Policy) and its investing activity is solely in

respect of funding legal commitments to existing investments.

The Continuation and Managed Run-Off Resolution was

put forward as a resolution to Shareholders in response

to the outcome of the Company’s continuation vote held

in February 2023, which did not pass.

As referred to above, the Company is operating currently

under a Managed Run-Off with the term of some of the

Company’s assets being several years. While the Company

is continuing to explore other strategic options, there

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

remains no certainty that any of these options will materialise

and be put to Shareholders for consideration.

Accordingly, while the Directors recognise that these

conditions indicate the existence of material uncertainty

which may cast significant doubt about the Group and

Company’s ability to continue as a going concern, based

on the assessment and considerations above, the Directors

have concluded that the financial statements of the Group

and the Company should be prepared on a going concern

basis. Neither the Group nor the Company financial

statements include any potential costs of liquidation and

the financial statements do not include the other adjustments

that would result if the Group and the Company were

unable to continue as a going concern.

Auditor information

Each of the Directors at the date of the approval of this

report confirms that:

I. so far as the Director is aware, there is no relevant

audit information of which the Company’s auditors

are unaware; and

II. the Director has taken all steps that he/she ought to

have taken as director to make himself/herself aware

of any relevant information and to establish that the

Company’s auditors are aware of that information.

This confirmation is given and should be interpreted in

accordance with the provisions of Section 418 of the

Companies Act 2006.

Annual General Meeting (“AGM”)

The Company’s AGM will be held on 28 May 2025 at the

offices of CMS Cameron McKenna Nabarro Olswang LLP

located at Cannon Place, 78 Cannon Street, London EC4N

6AF. Full details of the AGM, the resolutions proposed and

how to vote by proxy are described in the Notice of AGM,

which can be found on the Company’s website. Shareholders

are welcome at any time to submit questions they may

have to aeetcosecmbx@apexgroup.com.

Resolutions relating to the following items of special business

will be proposed at the forthcoming AGM to be held on

28 May 2025.

Special Resolution 10.

Authority for the Company to purchase its own

This resolution replaces the authority given at last year’s

annual general meeting for the Company to make market

purchases of its own Ordinary Shares as permitted by the

Companies Act 2006. The Directors recommend that an

authority to purchase up to a maximum of 12,207,596

Ordinary Shares, representing 14.99% of Ordinary Shares

in issue as at 28 April 2025, being the latest practicable

date prior to the publication of the Notice of AGM, (subject

to the condition that not more than 14.99%. of the

Ordinary Shares in issue, excluding Treasury Shares, at the

date of the AGM are purchased) be granted. Any Ordinary

Shares purchased will either be cancelled or, if the Directors

so determine, held in treasury. At the date of this document,

the Company did not hold any shares in treasury.

The price per Ordinary Share that the Company may pay

is set at a minimum amount of the nominal value of each

Ordinary Share and a maximum amount of the higher of:

(i) 105%. of the average of the previous five business days’

middle market prices as derived from the Daily Official

List of the London Stock Exchange; and (ii) the higher of

the price of the last independent trade of an Ordinary

Share and the highest current independent bid for an

Ordinary Share on the trading venue where the purchase

is carried out. Unless otherwise authorised by Shareholders,

Ordinary Shares will not be issued at less than NAV and

Ordinary Shares held in treasury will not be sold at less

than NAV.

This authority would continue to provide flexibility in the

management of the Company’s capital resources. The

Directors will only exercise this authority if the Directors

believe that such exercise would be likely to achieve the

best balance for Shareholders for making timely returns

of capital to Shareholders.

DIRECTORS’ REPORT

CONTINUED

Special Resolution 11.

Authority to call general meetings (other than annual

general meetings) on 14 clear days’ notice

The minimum notice period for general meetings of the

Company is 21 days unless Shareholders approve a shorter

period for general meetings (other than an annual general

meeting), which cannot be less than 14 clear days. The

Board believes that it is in the best interests of Shareholders

to have the ability to call meetings on 14 clear days’ notice

on matters requiring urgent approval and resolution 11

seeks such approval.

In accordance with the Companies (Shareholders’ Rights)

Regulation 2009, the Company will offer Shareholders

the ability to vote by electronic means. This facility will be

accessible to all Shareholders, should the Board call a

general meeting at 14 clear days’ notice. Short notice will

only be used by the Board under appropriate circumstances.

If given, the approval would be effective until the Company’s

next annual general meeting.

Outlook

The outlook for the Company, including the future

development and performance of the Company, is discussed

in the Chair’s Statement on page 4 and the Investment

Adviser’s Report on page 6.

By order of the Board

Sinead van Duuren

For and on behalf of

Apex Listed Companies Services (UK) Limited

Company Secretary

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Corporate Governance Framework

Responsibility for good governance lies with the Board.

The governance framework of the Company reflects the

fact that it is an investment company with no employees

and outsources investment management and other key

functions to external service providers.

Statement of Compliance and Application of the AIC

Code’s Principles

The Board has considered the principles and provisions of

the Association of Investment Companies (“AIC”) Code

of Corporate Governance issued in February 2019 (the

“AIC Code”). The AIC Code addresses the principles and

provisions set out in the UK Corporate Governance Code

(“UK Code”), as well as setting out additional provisions

on issues that are of specific relevance to the Company.

The Board considers that reporting against the AIC Code,

which has been endorsed by the Financial Reporting

Council, provides more relevant information to Shareholders.

The AIC Code is available on the AIC website (www.theaic.co.uk)

and the UK Code can be found on the Financial Reporting

Council’s website (www.frc.org.uk). The AIC Code includes

an explanation of how it adapts the principles and provisions

set out in the UK Code to make them relevant for investment

companies.

Compliance

Throughout the year ended 31 December 2024 the

Company complied with the recommendations of the AIC

Code except, as explained below, where the Company

does not believe it appropriate to comply.

The UK Code includes provisions relating to the role of

the chief executive, executive Directors’ remuneration and

the need for an internal audit function. For reasons set

out in the AIC Code, the Board considers these provisions

are not relevant to the Company as it is an externally

managed investment company. In particular, all of the

Company’s day-to-day management and administrative

functions are outsourced to third parties. As a result, the

Company has no executive Directors, employees or internal

operations. The Company has therefore not reported

further in respect of these provisions.

BOARD LEADERSHIP AND PURPOSE

The Company is an investment company and its investment

objective and policy are set out on page 16. Any material

change to the investment policy requires Shareholder

approval.

The Company is governed by a Board of Directors, all of

whom are non-executive, and it has no employees. The

business model adopted by the Board to achieve the

Company’s objective has been to contract the services of

the Investment Adviser and AIFM to manage the portfolio

and the risks associated in accordance with the Board’s

strategy and under its oversight. The Board monitors

adherence to the Company’s investment policy and regularly

reviews the Company’s performance in meeting its

investment objective.

All other functions are provided by third parties under the

oversight of the Board.

The Board reviews the performance of the AIFM and

Investment Adviser and its other key service providers on

an ongoing basis.

CORPORATE GOVERNANCE STATEMENT

Experience and Contribution of Directors

As at the date of this report, the Board of Directors consists of four non-executive Directors, whose biographies are

included below.

Miriam Greenwood OBE DL

Non-Executive Chair*

Appointed on 19 April 2021

With qualifications as a barrister and in corporate finance,

Miriam spent more than 30 years working for a number

of leading investment banks and other financial institutions.

In previous roles, she served as a non- executive Director

of the UK energy regulator OFGEM and on the Board of

a number of publicly quoted companies and was also a

founding partner of SPARK Advisory Partners, an independent

corporate advisory business.

Miriam is currently chair of ESP Utilities Group Ltd, senior

independent director of Canopius Group Limited, a

non-executive director of Canopius Managing Agents,

Encyclis Holdco Limited and Liontrust Asset Management

plc, and an adviser to the Mayor of London’s Energy

Efficiency Fund.

A Deputy Lieutenant of the City of Edinburgh, Miriam

was awarded an OBE for services to corporate finance

in2000.

David Fletcher

Non-Executive Director, Senior

Independent Director*

Appointed on 29 April 2022

David was Group Finance Director of Stonehage Fleming

Family & Partners, a leading independently owned multi-

family office, having joined in 2002. Prior to that, he spent

20years in investment banking with JPMorgan Chase,

Robert Fleming & Co. and Baring Brothers & Co Limited,

latterly focused on financial services in the UK (asset

management and life insurance). He started his career

with Price Waterhouse and is a chartered accountant. He

is the Chair of JPMorgan Claverhouse Investment Trust

plc. He is also a director and Audit Committee Chairman

at Ecofin US Renewables Infrastructure Trust plc. David is

a graduate of Oxford University.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Nicholas Bliss

Non-Executive Director*

Appointed on 9 April 2021

Nicholas established and led the global infrastructure and

transport sector group at the international law firm

Freshfields Bruckhaus Deringer LLP where he was a partner

for over 20 years and also served on the Partnership

Council, the supervisory board of the firm. During this

period he led on mandates involving some of the most

notable infrastructure projects across the UK, Europe,

Africa and the Gulf. In particular, he was heavily involved

in the development and application of PFI, PPP and other

project finance techniques to the delivery of major

infrastructure projects. Since leaving Freshfields, he has

developed an expertise in both advising and acting as an

independent director in “distressed situations” at SPV

corporates owned by infrastructure funds or industrials.

Among his other engagements, he is Of Counsel at

Chatham Partners LLP, a Hamburg based infrastructure/

energy/real estate “boutique” law firm.

Janine Freeman

Non-Executive Director*

Appointed on 2 November 2022

Janine Freeman is an experienced, senior energy industry

executive and Non-executive Director with over 20 years

in the energy industry. Driving investment in clean energy

infrastructure has been her primary focus for much of

that time. Janine is currently a Non-executive Director and

Audit and Risk Committee Chair at Harmony Energy Income

Trust plc, a non-executive director of Phoenix Technologies

Holdings Limited and Executive Chair at Intelligent Resource

Management Ltd. Previously, Janine was a Director at PwC

within the Deals team, where she led on Net Zero Investment

Strategy & Deals. At National Grid plc, where Janine spent

16 years, she was a member of the UK Executive Committee

and the GB Electricity System Operator Executive Committee.

Janine achieved her Chartered Accountancy qualification

(ACA) at Deloitte & Touche in London.

*All the Directors are members of each committee.

CORPORATE GOVERNANCE STATEMENT

CONTINUED

Board Committees

The Board decides upon the membership and chairmanship of its committees.

Audit and Risk Committee

The committee has formal terms of reference which clearly

define roles and responsibilities. It meets at least three

times a year or more often if required. A separate report

of the work of the Committee during the year under

review is set out on pages 48 to 50. The Committee

comprises all the independent non-executive Directors

and is chaired by David Fletcher. In accordance with the

AIC Code, the Chair of the Board is a member of the Audit

and Risk Committee as she was independent on appointment

and she remains so.

Remuneration Committee

The committee has formal terms of reference which clearly

define roles and responsibilities. It meets at least once a

year or more often if required. Its principal duties include

(i) agreeing the policy for the remuneration of the Directors

and reviewing any proposed changes to the policy; (ii)

reviewing and considering ad hoc payment to the Directors

in relation to duties undertaken over and above normal

business; and (iii) if required, appointing independent

professional remuneration advice. The Committee comprises

all the independent non-executive Directors and is chaired

by Janine Freeman.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Nomination Committee

The committee has formal terms of reference which

clearly define roles and responsibilities. It meets at least

once per annum. Its principal duties include:

i. identifying individuals qualified to become Board

members and selecting the director nominees for

election at general meetings of the Shareholders or

for appointment to fill vacancies;

ii. determining director nominees for each committee of

the Board;

iii. considering the appropriate composition of the Board

and its committees; and

iv. undertaking an annual performance evaluation of the

Board and its committees.

The Nomination Committee comprises all the independent

non-executive Directors and is chaired by Miriam Greenwood.

Management Engagement Committee

The committee has formal terms of reference which clearly

define roles and responsibilities. It meets at least once a

year or more often if required. Its principal duties include

regularly reviewing the contracts, the performance and

the remuneration of the Company’s key service providers.

The Management Engagement Committee comprises all

the independent non-executive Directors and is chaired

by Nicholas Bliss.

Decision Making

The Board is responsible for the overall stewardship of the

Company’s affairs and has adopted a schedule of matters

specifically reserved for decision by the Board. Strategic

issues and all operational matters of a material nature are

considered at its meetings, including reviewing the

Company’s performance by reference to the Company’s

key performance indicators.

The Board has access to independent advice at the

Company’s expense where it judges it necessary in order

to discharge its responsibilities properly.

Prior to being presented to the Board, each transaction

was considered by the AIFM who reviewed it against an

agreed set criteria of items to ensure it was suitable for

the Company’s long-term success and in Shareholders’

best interests.

Meeting Attendance during the year ended 31 December 2024

Board

Audit and Risk

Committee

Management

Engagement

Committee

Remuneration

Committee

Nomination

Committee

Miriam Greenwood 6/6 5/5 1/1 1/1 1/1

David Fletcher 6/6 5/5 1/1 1/1 1/1

Nicholas Bliss 6/6 5/5 1/1 1/1 1/1

Janine Freeman 6/6 5/5 1/1 1/1 1/1

CORPORATE GOVERNANCE STATEMENT

CONTINUED

In addition, a number of ad hoc Board and Committee

meetings were held during the year under review to deal

with administrative matters and the formal approval of

documents, investment proposals and to consider the

valuation of the Company’s portfolio which were considered

time critical.

Directors’ share dealings

The Directors comply with the Share Dealing Code adopted

by the Company in accordance with UK Market Abuse

Regulations (the “Share Dealing Code”) in relation to their

dealings in Ordinary Shares. The Board is responsible for

taking all proper and reasonable steps to ensure compliance

with the Share Dealing Code by the Directors.

DIVISION OF RESPONSIBILITIES

The independent Board is responsible to Shareholders for

the overall management of the Company. The following

sets out the division of responsibilities between the Chair,

the Board and its Committees.

Role of the Chair

The Chair leads the Board and is responsible for its overall

effectiveness in directing the Company. The Chair sets

the agenda for the Board and, in conjunction with the

Company Secretary, ensures that accurate, timely and

clear information is circulated to the Directors five working

days prior to the meeting. The Board has implemented

various policies and procedures to ensure the Company

runs effectively and efficiently.

An open, informed and transparent environment is

promoted at each Board meeting and the Chair maintains

open communication channels with the other Directors,

AIFM, Investment Adviser and Company Secretary between

Board meetings.

Senior Independent Director

The Senior Independent Director provides a sounding

board to the Chair, and serves as an intermediary for the

other directors and Shareholders.

Role of the Board

All Board members are independent non-executive

Directors, who continue to be independent of the AIFM

and Investment Adviser. The Board is responsible for the

governance of the Company, notwithstanding any delegation

of responsibilities to third parties. It has oversight over the

management and conduct of the Company’s business,

strategy and development. The Board determines the

Investment Objective and Investment Policy as well as risk

appetite and has overall responsibility for the Company’s

activities, including review of investment activity and

performance. The Board ensures the maintenance of a

sound system of internal controls and risk management

(including financial, operational and compliance controls)

and reviews the overall effectiveness of systems in place.

The Board is responsible for approval of any changes to

the capital, corporate and/or management structure of

the Company. The Board Members offer strategic guidance

and specialist advice; whilst providing constructive and

effective challenge, especially to the decisions of the

Investment Adviser. The Board scrutinises and assesses

the performance of third party service providers (including

the AIFM and Investment Adviser).

The principal objectives of the Board are the run-off of

the portfolio and the continuing evaluation of any strategic

proposals. The Board does not routinely involve itself in

day-to-day business decisions. The AIFM is responsible

for the risk management of the Company pursuant to

AIFMD and the Investment Adviser for portfolio management.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Appointment and Replacement of Board

The rules concerning the appointment and replacement

of Directors are contained in the Company’s Articles of

Association which require that a Director shall be subject

to election at the first AGM after appointment and re-

election at least every three years thereafter. However, in

accordance with the UK Corporate Governance Code, the

Board has resolved that all Directors shall stand for annual

re-election at each AGM.

Independent advice

A procedure has been adopted for Directors, in the

furtherance of their duties, to take independent professional

advice at the expense of the Company. No professional

advice has been independently sought during the year

ended 31 December 2024. The Directors have access to

the advice and services of the Company Secretary.

Role of Committees

The role of each Committee is described in their respective

terms of reference, which can be found on the Company’s

website.

COMPOSITION, SUCCESSION AND EVALUATION

Composition

At the date of this report, the Board consists of four

independent non-executive Directors including the Chair.

All of the Directors are independent of the Investment

Adviser and are able to allocate sufficient time to the

Company to discharge their responsibilities effectively.

The Directors have a broad range of relevant experience

to meet the Company’s requirements and their biographies

are shown on pages 35 and 36.

In line with the AIC Code, the Board has decided that

each Director should be subject to annual re-election by

Shareholders, although this is not required by the Company’s

Articles of Association.

The Board recommends that all the Directors should be

elected for the reasons highlighted in the Notice of Annual

General Meeting.

Board diversity

The Company’s policy is that the Board should have an

appropriate level of diversity in the boardroom with the

overriding aim of ensuring that the Board is composed of

the best combination of people for ensuring effective

oversight of the Company and constructive support and

challenge to the Investment Adviser. All Board appointments

will be made on merit and have regard to diversity including

factors such as ethnicity, gender, skills, background and

experience. There will be no discrimination on the grounds

of gender, religion, race, ethnicity, sexual orientation, age

or physical ability. As at 31 December 2024, the Company

had 4 Directors, 2 of whom were female and 2 of whom

were male. As at the date of this Report, the Company

has 4 Directors, 2 female and 2 male.

The Board takes account of the FCA’s listing rule

(UKLR6.6.6R(9)(a)) concerning public disclosures on whether

a company has met the following targets on board diversity:

a) at least 40% of individuals on the board are women;

b) at least one of the senior board positions (defined by

the FCA as either the chair, senior independent director,

chief executive or chief financial officer) is held by a

woman; and

c) at least one individual on the board is from a minority

ethnic background.

As at 31 December 2024, the Board meets the criteria of

two of the three targets as a) 50% of the Board are

women, and b) the Chair of the Board is a woman. The

Board does not meet target c) as no Board members are

from a minority ethnic background. There have been no

new appointments to the Board in 2024, however, the

Board would seek to include candidates from minority

ethnic backgrounds on a short-list as part of the recruitment

of a new director.

CORPORATE GOVERNANCE STATEMENT

CONTINUED

The below tables set out the diversity data required under UKLR6.6.6R(10) as at 31 December 2024. As an externally

managed investment company, the Board employs no executive staff, and therefore does not have a chief executive officer

(CEO) or a chief financial officer (CFO), both of which are deemed senior board positions by the FCA.

The following information has been provided by each Director. There have been no changes since 31 December 2024.

Board diversity as at 31 December 2024

Gender

Number of

Board members

Percentage of

the Board

Number of

senior positions

on the Board

Men 2 50% 1

Women 2 50% 1

Prefer not to say – – –

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) 4 100% 2

1,2

1 David Fletcher is Senior Independent Director.

2 Miriam Greenwood is Chair of the Board.

Board tenure and succession

The Directors recognise that independence is not a function of service or age and that experience is an important

attribute within the Board. To ensure continuity, the Board has adopted a succession plan that allows for a gradual

refreshment. Accordingly, the Board may decide to recommend a Director with more than nine years’ service for

re-election at the Company’s AGM.

Performance evaluation

A formal annual performance evaluation was conducted on the Board, the Chairman, the Committees, the Investment

Manager, and the main service providers for the year ended 31 December 2024. The evaluation was conducted by the

Company Secretary with the oversight of the Chair and Senior Independent Director.

The results of the Board performance evaluation were positive and demonstrated that the Directors were committed

to the fulfilment of their duties and with a high level of engagement.

A policy of insurance against Directors’ and Officers’ liabilities is maintained by the Company.

AUDIT, RISK AND INTERNAL CONTROL

Audit

The Audit and Risk Committee monitors the performance, objectivity and independence of the external auditors and this

is assessed before the approval of the Annual Report. In evaluating the Auditors’ performance, the Audit and Risk Committee

examines the robustness of the audit process, the independence and objectivity of the auditor and the quality of delivery.

The members of the Audit and Risk Committee satisfy themselves that the Annual Report taken as a whole is fair, balanced

and understandable. The assessment of the performance during the year ended 31 December 2024 and the judgements,

estimates and assumptions made throughout the Annual Report are considered formally as a committee agenda item.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk

The Directors confirm that they have carried out a robust

assessment of the principal risks facing the Company,

including those that would threaten its business model,

future performance, solvency or liquidity. The principal

risks and how they are being managed are set out in the

Strategic Report on pages 4 to 27.

Internal control

The AIC Code requires the Board to review the effectiveness

of the Company’s system of internal controls. The Board

recognises its ultimate responsibility for the Company’s

system of internal controls and for monitoring its

effectiveness. The system of internal controls is designed

to manage rather than eliminate the risk of failure to

achieve business objectives. It can provide only reasonable

assurance against material misstatement or loss. The Board

has undertaken a review of the aspects covered by the

guidance and has identified risk management controls in

the key areas of business objectives, accounting, compliance,

operations and secretarial as being matters of particular

importance upon which it requires reports from the relevant

key service providers. The Board believes that the existing

arrangements, set out below, represent an appropriate

framework to meet the internal control requirements. The

Directors reviewed the effectiveness of the internal control

system throughout the year ended 31 December 2024.

Financial aspects of internal control

These are detailed in the Report of the Audit and Risk

Committee on page 49.

Other aspects of internal control

The Board will hold at least four regular meetings each

year, plus additional meetings as required. Between these

meetings there is regular contact with the AIFM, the

Investment Adviser, the Administrator and Company

Secretary.

The Administrator and Company Secretary, Apex Listed

Companies Services (UK) Limited, reports separately in

writing to the Board concerning risks and internal control

matters within its remit, including internal financial control

procedures and company secretarial matters. Additional

ad hoc reports are received as required and Directors have

access at all times to the advice and services of the Company

Secretary, which is responsible to the Board for ensuring

that Board procedures are followed and that applicable

rules and regulations are complied with. Contact with the

Investment Adviser, the AIFM and the Administrator enable

the Board to monitor the Company’s progress towards its

objectives and encompass an analysis of the risks involved.

The effectiveness of the Company’s risk management and

internal controls systems is monitored regularly and a

formal review, utilising a detailed risk assessment programme,

takes place at least annually. This includes review of the

internal controls and the reports of the Administrator, the

AIFM and the Registrar.

Based on the work of the Audit and Risk Committee, and

the reviews of the reports received by the Audit and Risk

Committee on behalf of the Board, the Board has concluded

that there were no material control failures during the

year under review and up to the date of this report.

REMUNERATION

The Remuneration Committee comprises all the Directors

of the Board. It meets at least annually and is responsible

for considering and making appropriate recommendations

to the Board in relation to Directors’ remuneration.

The Company does not have any executive Directors or

employees, and, as a result, operates a simple and transparent

remuneration policy with no variable element, that reflects

the non-executive Directors’ duties, responsibilities and

time spent.

CORPORATE GOVERNANCE STATEMENT

CONTINUED

DIRECTORS’ REMUNERATION REPORT

Annual Chair’s Statement

I am pleased to present the Remuneration Committee

(the “Committee”) report for the year ended 31 December

2024. It is set out in two sections:

a) Remuneration Policy – a summary of our current and

future Policy which was last approved at the Company’s

General Meeting in July 2022 and which will be put

to Shareholders, as a binding vote by way of an ordinary

resolutions at the forthcoming Annual General Meeting

(“AGM”) to be held on 28 May 2025. The below stated

Remuneration Policy remains unchanged from the

Remuneration Policy last placed before Shareholders

at the Company’s AGM held in 2022, except for one

minor change; it has been updated to clarify that the

Chair of the Board, each Committee Chair and theSenior

Independent Director will receive a higher fee in

recognition of their additional duties;

b) Remuneration Implementation Report – a description

on how the Directors’ Remuneration Policy has been

implemented during the year under review. The

Remuneration Implementation Report is put forward

for approval by Shareholders on an annual basis.

The Remuneration Committee Report for the year to

31December 2024 has been prepared in accordance with

sections 420-422 of the Act, Schedule 8 of the Large and

Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008, as amended (the Regulations)

and the Listing Rules. The law requires the Company’s

auditor to audit certain sections of the Remuneration

Report; where this is the case, the relevant section has

been indicated as such. The Remuneration Committee

met twice during the year under review.

General Meeting approval of the Remuneration Policy

and Remuneration Implementation Report

The Company’s Remuneration Policy was approved by

Shareholders at the Company’s General Meeting on

25 July 2022. In accordance with the requirements of

Schedule 8 of the Large and Medium-sized Companies

and Groups (Accounts and Reports) Regulations 2008,

asamended (the Regulations), the Remuneration Policy

is required to be put to Shareholders for approval every

three years, unless a material variation to the Remuneration

Policy is proposed, in which case Shareholder approval

will be sought to amend the policy.

Remuneration Policy

Directors are remunerated in the form of fees, in respect

of their appointments as non-executive Directors of the

Company and as non-executive Directors of Attika Holdings

Limited, a wholly owned subsidiary of the Company, with

the split of fees between these appointments agreed

between the parties in writing. Directors’ fees are payable

in quarterly instalments in arrears. The Company’s Articles

of Association limit the fees payable to the Directors in

aggregate to £500,000 per annum. Subject to the overall

limit, the Company’s policy is that the fees payable to the

Directors should reflect the time spent by the Board on

the Company’s affairs and the responsibilities borne by

the Directors and should be sufficient to promote the

long-term success of the Company. All Directors, including

any new appointments to the Board, are paid at the same

rate, apart from the Chair of the Board (who is also Chair

of the Nomination Committee), the Chair of the Audit

and Risk Committee, the Chair of the Remuneration

Committee, the Chair of the Management Engagement

Committee and the Senior Independent Director, who are

paid a higher fee in recognition of their additional

responsibilities. As provided for in clause 107 of the Articles

of Association and in accordance with the relevant provisions

of the AIC Code, as well as each Director’s appointment

letter, the Directors are entitled to an additional fee where

a Director undertakes any special duties, or services outside

their ordinary duties as a Director.

The policy is to review fee rates annually, although such

review will not necessarily result in any change to the

rates. As part of this process reference is made to the fees

paid to the directors of other similar investment trust

companies.

Consideration of Shareholders’ Views

The General Meeting which was held on 25 July 2022

was the first opportunity for Shareholders to vote on the

Directors’ Remuneration Policy. The Remuneration Policy

was approved with 99.93% votes in favour.

Effective Date

The Remuneration Policy was effective from 25 July 2022,

being the date at which the Policy was approved by

Shareholders at the Company’s General Meeting. At the

Annual General Meeting on 12 June 2024 the Directors’

Remuneration Report as set out in the 2023 Annual Report

was approved with 99.92% in favour.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

DIRECTORS’ REMUNERATION REPORT

CONTINUED

Remuneration Implementation Report

Directors’ remuneration

During the year ended 31 December 2024, the Remuneration

Committee undertook a review of Directors’ fees.

With effect from 1 July 2024 each of the Directors was

entitled to receive a fee of £44,899 per annum (31 December

2023: £43,676) with the Chair of the Board (who is also

Chair of the Nomination Committee) entitled to receive

an additional fee of £27,389 per annum (31 December

2023: £26,643). With effect from 1 July 2024, the Chair

of the Audit & Risk Committee, who is also the Senior

Independent Director of the Company received an

additional total fee of £11,613 per annum (31 December

2023: £11,297 ). The Chair of the Remuneration Committee,

appointed with effect from 1 July 2024 received an

additional £6,607 per annum (31 December 2023: £5,902

for her additional Board and Committee engagement

work prior to appointment). The Chair of the Management

Engagement Committee received an additional £6,607

per annum (31 December 2023: £5,902). All these fees

represented an increase of 2.8% over the previous year.

Each of the Directors’ fees are in respect of their

appointment as a non-executive director of the Company

and their appointment as non-executive director of

Attika Holdings Limited. The Board also considered that

the split of Directors’ fees between the Company and

Attika Holdings Limited of 70%/30% respectively remained

appropriate with effect from 1 July 2024.

The Board believes that the level of increase and resulting

fees appropriately reflect the level of demands on the

individual Directors, prevailing market rates for an

investment trust of the Company’s size and complexity,

the increasing complexity of regulation and resultant

time spent by the Directors on matters, and it will also

enable the Company to continue to attract appropriately

experienced Directors in the future.

Directors receive fixed fees and do not receive bonuses

or other performance related remuneration, share options,

pension contributions or other benefits apart from the

reimbursement of allowable expenses. No commissions

or performance related payments will be made to the

Directors by the Company.

No Director has waived or agreed to waive any emoluments

from the Company or any subsidiary undertaking.

The decision by Shareholders to vote against Continuation

at the end of February 2023 meant that the duties of

the Directors have been beyond those normally expected

as part of their appointment. Therefore, in accordance

with Principal 8 of the AIC Code it was decided that

provision should be made for additional fees. In view of

the additional duties and responsibilities, the Remuneration

Committee decided, immediately following the Continuation

Vote and before detailed work commenced on reviewing

the options to implement Shareholders’ wishes, to increase

with effect from 1 March 2023 the monthly fees of the

Chair of the Board and the Chair of the Audit & Risk

Committee by £2,500 and £1,900 respectively and by

£1,150 for the Chair of the Management Engagement

Committee and £1,010 for the other non-executive

Director. This was set out in detail in the Remuneration

Report within the Annual Report for the year ended

31 December 2022.

On 1 July 2023, and taking into account the approval by

Shareholders of the Managed Run Off resolution at the

June 2023 Annual General Meeting, and the review of

strategic options for the portfolio, including the possible

sale of assets and other options, these monthly fees were

maintained and increased to £2,930 for the Chair of the

Board, £2,291 for the Chair of Audit & Risk Committee,

Chair of the Remuneration Committee and Senior

Independent Director and £1,239 for the other Directors.

With effect from 1 July 2024, the additional monthly

fees were maintained and increased to £3,012 for the

Chair of the Board, £2,355 for the Chair of the Audit &

Risk Committee and £1,699 for each of the Remuneration

and Management Engagement Committee Chairs.

The standard fees for Directors are reviewed annually

and the additional monthly fees are subject to regular

review.

Directors’ Remuneration

The table below (audited) provides a single figure for the total remuneration of each Director.

		Fees for the			Fees for the
		year ended			year ended
	Date of	31 December	Taxable		31 December
	appointment to	2024 1	benefits	Total	2023 1
	the Board	(£)	(£)	(£)	(£)
Miriam Greenwood	19 April 2021	106,954	–	106,954	92,852
Nicholas Bliss	9 April 2021	67,902	–	67,902	59,794
David Fletcher	29 April 2022	83,613	–	83,613	71,861
Janine Freeman	2 November 2022	67,902	–	67,9 02	56,512
Total		326,371	–	326,371	281,019

1 Including fees in respect of directorships in Attika Holdings Limited.

No additional expenses were paid to the Directors (2023: nil). None of the above fees were paid to third parties.

The annual percentage change in remuneration in respect of the financial years prior to the current year in respect of

each Director is as follows:

	% change	% change	% change
	2023 to 2024	2022 to 2023	2021 to 2022 1
Miriam Greenwood	15.19	61.24 2	–
Nicholas Bliss	13.56	41.60 3	–
David Fletcher	16.35	135.17 4	–
Janine Freeman	20.16	750.83 5	–

1 The fees received for the period to 31 December 2021 and the year to 31 December 2022 are not comparable as they cover different durations and two Directors joined the

Board in 2022. Accordingly, a year-on-year percentage change has not been included in the table above.

2 The 61.24% increase in 2023 for Miriam Greenwood arose mainly from the introduction of an additional monthly fee to reflect the extra duties and responsibilities as Chair of

the Board arising from the failed continuation vote at the end of February 2023, the approval of the Managed Run Off resolution at the end of June 2023 and the continuing

review of strategic options for the portfolio as detailed in this Remuneration Report.

3 The 41.60% increase in 2023 for Nicholas Bliss arose mainly from the introduction of an additional monthly fee to reflect the extra duties and responsibilities arising from the

failed continuation vote at the end of February 2023, the approval of the Managed Run Off resolution at the end of June 2023 and the continuing review of strategic options for

the portfolio as detailed in this Remuneration Report.

4 The 135.17% increase in 2023 for David Fletcher arose mainly from (i) his appointment part way through 2022 (29 April 2022) (ii) the introduction of an additional monthly fee

to reflect the extra duties and responsibilities arising from the failed continuation vote at the end of February 2023, the approval of the Managed Run Off resolution at the end

of June 2023 and the continuing review of strategic options for the portfolio and (iii) his appointment to the role of Senior Independent Director of the Board on 1 July 2023 as

detailed in this Remuneration Report.

5 The 750.83% increase in 2023 for Janine Freeman arose mainly from (i) her appointment part way through the year as a Director on 2 November 2022 (ii) the introduction of

an additional monthly fee to reflect the extra duties and responsibilities arising from the failed continuation vote at the end of February 2023, the approval of the Managed Run

Off resolution at the end of June 2023 and the continuing review of strategic options for the portfolio and (iii) to reflect her role and particular involvement on the Audit & Risk

Committee as detailed in the Remuneration Report in the 2023 Annual Report.

Directors’ Service Contracts, Term and Loss of Ofﬁce

The Directors do not have service contracts with the Company.

The Directors have appointment letters which provide for

an initial term of three years. In accordance with the AIC

Code, each member of the Board will seek annual re-election

by Shareholders at the AGM. There are no agreements in

place to compensate the Board for loss of office.

Directors’ Indemnities

Subject to the provisions of the Act, the Company has

agreed to indemnify each Director against all liabilities which

any Director may suffer or incur arising out of or in connection

with any claim made or proceedings taken against him, or

any application made by him, on the grounds of his negligence,

default, breach of duty or breach of trust in relation to the

Company or any associated company.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

DIRECTORS’ REMUNERATION REPORT

CONTINUED

Performance

The following chart shows the Company’s share price (total return) by comparison to the FTSE All share index for the

period since the Company commenced operations on 2 June 2021. The Company does not have a specific benchmark

but has deemed the FTSE All share index to be the most appropriate comparator for its performance.

100

105

110

115

120

125

130

2/6/2021 31/12/21 31/12/2331/12/22 31/12/24

Share price total return FTSE All-Share Index

Total return rebased to 100 at date commencement of operations on 2 June 2021

Relative Importance of Spend on Pay

The following table sets out the total level of Directors’ remuneration compared to the distributions to Shareholders by

way of dividends and share buybacks.

31 December

2024

£‘000

31 December

2023

£‘000

change

Directors’ fees payable 326 281 16.0

Dividends paid to Shareholders 4,999 1,250

Repurchase of shares via a Tender Offer 17,5 0 0 –

Total Distribution to Shareholders 22,499 1,250 1,699.9

The disclosure of the information in the table above is required under The Large and Medium-sized Companies and

Groups (Accounts and Reports) (Amendment) Regulations2013.

Directors’ Share Interests

The Company’s Articles of Association do not require Directors to own shares in the Company. The Shares held by

Directors, including those of connected persons, at the beginning and end of the financial year are set out below.

31 December 2024 31 December 2023

Director

Connected

person Total Director

Connected

person Total

Miriam Greenwood

19,181 – 19,181 24,000 – 24,000

David Fletcher

38,598 12,832 51,430 42,425 14,181 56,606

Nicholas Bliss

16,280 – 16,280 20,000 – 20,000

Janine Freeman

– – – – – –

The information in the above table has been audited. There have been no changes following the year end.

Remuneration Consultants

Remuneration Consultants were not engaged by the

Company during the year under review and in respect of

the Remuneration Report.

Recruitment Agencies

The Board has not paid and will not pay any incentive fees

to any person to encourage them to become a director

of the Company.

Statement

On behalf of the Board and in accordance with Part 2 of

Schedule 8 of the Large and Medium-sized Companies

and Groups (Accounts and Reports) (Amendment) Regulations

2013, I confirm that the above Remuneration Policy and

Remuneration Implementation Report summarises,

as applicable, for the year ended 31 December 2024:

a) the major decisions on Directors’ remuneration;

b) any substantial changes relating to Directors’ remuneration

made; and

c) the context in which the changes occurred and decisions

have been taken.

Janine Freeman

Chair of the Remuneration Committee

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

REPORT OF THE AUDIT AND RISK COMMITTEE

Introduction

I am pleased to present the Audit and Risk Committee (the

“Committee”) report for the year ended 31 December 2024.

At least once a year the Committee Chair meets with the

external Auditors without any representative of the Investment

Adviser or Administrator being present. The Committee’s

effectiveness is reviewed on an annual basis as part of the

Board’s performance evaluation process (see page 41).

Role and Composition

The role of the Committee is to ensure that Shareholder

interests are properly protected in relation to the application

of financial reporting and internal control principles and

to assess the effectiveness of the audit. The Committee’s

role and responsibilities are set out in full in its terms of

reference which are available on request from the Company

Secretary and can be found on the Company’s website

(www.aquila-energy-efficiency-trust.com). A summary of

the Committee’s main responsibilities and how it has

fulfilled them is set out below. Review of the Company’s

internal control and risk management fall within the terms

of reference of the Committee.

The Committee comprises all the Directors and the Board

is satisfied that the Committee has sufficient and recent

financial experience, and as a whole, has competence

relevant to the sector in which the Company operates to

discharge its functions effectively. In accordance with the

AIC Code, the Chair of the Board is a member of the Audit

Committee as she was independent on appointment and

she remains so. The experience of the members of the

Committee can be assessed from the Director’s biographies

set out on pages 35 and 36.

Main Activities of the Committee

The Committee met formally five times during the year under

review and twice after the year-end. PwC, the external

Auditors, attended three meetings in 2024 and twice after

the year-end. The AIFM’s risk function provided reports on

their monitoring programme for these meetings.

The matters considered, monitored and reviewed by the

Committee during the course of the year under review

included the following:

• a detailed analysis of the Group and Company’s semi-

annual NAVs and underlying assumptions;

• monitored the Group and Company’s reserves and

reviewed the Group and Company’s net income, cash

position and cash flow forecasts and recommended

appropriate dividend levels and the tender offer level

to the Board;

• monitored and reviewed the Group and Company’s

emerging and principal risks and internal controls;

• considered the ongoing assessment of the Group and

Company as a going concern;

• considered the appointment, independence, objectivity

and remuneration of the Auditor;

• reviewed the audit plan;

• approved the accounting principles including the

investment entity status, the valuation methodology

including fair value and amortised cost;

• monitored the preparation and timetable for the

production of the Annual Report & Accounts;

• monitored the integrity of the financial statements of

the Group and Company, including its annual and

half-yearly reports, and any other formal announcements

relating to its financial performance, and reviewed and

reported to the Board on significant financial reporting

issues and judgements contained within them; and

• considered the financial and other implications on the

independence of the auditor arising from the provision

of non-audit services.

Following the proposed distribution of capital to Shareholders

referred to in the Chair’s statement on page 5 the Board

is reviewing all its costs with a view to reducing them to

a level more appropriate for the size of the Group and

Company.

Going Concern

The Committee reviewed the Group’s and Company’s going

concern assessment and concluded that although there are

conditions that indicate the existence of material uncertainty

which may cast significant doubt about the Group’s and

Company’s ability to continue as a going concern, it is

appropriate for the Group’s and Company’s financial statements

to be prepared on a going concern basis as described in the

Directors’ Report on page31.

Internal Control and Risk

During the year under review, the Committee together

with the AIFM and other service providers carefully

considered the Company’s matrix of risks and uncertainties

(including emerging risks) and appropriate mitigating

actions. The procedure for identifying emerging risks can

be found on page 19 and the Company’s principal risks

can be found on pages 20 to 23.

The Committee also considered the internal control reports

of its AIFM, Investment Adviser, Administrator and Registrar.

The Committee reviewed these reports and concluded

that there were no significant control weaknesses or other

issues that needed to be brought to the Board’s attention.

Financial Aspects of Internal Control

The Directors are responsible for the internal financial control

systems of the Group and Company and for reviewing their

effectiveness. The aim of the internal financial control system

is to ensure the maintenance of proper accounting records,

the reliability of the financial information upon which business

decisions are made and used for publication, and that the

assets of the Group and Company are safeguarded.

The Board has contractually delegated to external agencies

the services the Group and Company requires, but they are

fully informed of the internal control framework established

by each relevant service provider which provide reasonable

assurance on the effectiveness of internal financial controls.

The Statement of Directors’ Responsibilities in respect of the

financial statements is on page 51 and a Statement of Going

Concern is on page 31. The Report of the Independent

Auditor is on pages 52 to 59.

Financial Statements and Signiﬁcant Accounting

Matters

The Committee reviewed the financial statements and

considered the following significant accounting issues in

relation to the Group and Company’s financial statements

for the year ended 31 December 2024.

Investment Entity Status

As a result of the development of the portfolio of investments,

the actual investments made and the structure of those

investments, many of which were receivables purchase

investments with fixed rates of return, the Committee

determined that this required judgement and re-assessment

of the Company’s investment entity status for the year

ended 31 December 2022. As a result of this re-assessment,

which identified that fixed rate of return investments

constituted a substantial proportion of the pipeline of

investments and resultant actual investments, the Committee

determined that as from 1 January 2022 the Company

was no longer an investment entity. This has continued

to be the position in 2023 and 2024.

Valuation and Existence of Investments

The Group’s and Company’s accounting policy is to

designate investments at fair value through profit or loss,

or at amortised cost less expected credit loss provisions,

whichever is appropriate, adjusted by any foreign exchange

differences. Investments with variable returns are measured

at fair value and investments with a fixed return structure

are measured at amortised cost. Therefore, the most

significant risk in the Group and Company’s financial

statements is the carrying value of the Group and Company’s

investments because fair values, the effective interest

method and expected credit loss provisions have been

arrived at using a number of judgments. The Committee

reviewed the procedures in place for ensuring the accurate

valuation and existence of investments and approved the

valuation of the Company’s investments and their existence

at the year-end with the Investment Adviser, the AIFM

and other service providers.

The Board has approved a Valuation Policy which sets out

the valuation process. The process includes a valuation by

the Investment Adviser of the Group and Company’s

investments on an annual basis as at 31 December each

year. Thesevaluations are updated as at 30 June each

year. The valuation principles used to calculate the fair

value of the assets are based on International Private Equity

and Venture Capital Valuation Guidelines.

Fair value for each investment is derived from the present

value of the investment’s expected future cash flows,

using reasonable assumptions and forecasts for revenues

and operating costs, and an appropriate discount rate.

For those investments measured at amortised cost the

Company has used the effective interest method and has

calculated an expected credit loss provision in accordance

with IFRS 9.

The Audit and Risk Committee has satisfied itself with the

investment valuation, the calculation of amortised cost

values and expected credit loss provisions.

Recognition of Income

Income may not be accrued correctly. Calculations of

investment income using the effective income method

have been provided to the Company by the Investment

Adviser. The Committee reviewed the Administrator’s

procedures for recognition of income and reviewed the

treatment of income receivable in the year under review.

Tax Status

The Company may suffer tax on gains on the realisation

of investments if investment trust status is not maintained.

The Committee reviewed the compliance of the Company

during the year under review, against the eligibility

conditions and ongoing requirements it must meet in

order for investment trust status to be maintained.

Calculation of the Investment Adviser’s Fees

The Committee reviewed the Investment Adviser’s fees

and concluded that they have been correctly calculated.

Details of the Investment Adviser’s fees can be found in

note 6 to the financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Internal Audit

The Committee has considered the need for an internal

audit function and considers that this is not appropriate

given the nature and circumstances of the Company as an

externally managed investment company with external

service providers. The Committee keeps the need for an

internal audit function under periodic review.

Audit Arrangements

PwC was selected as the Company’s auditor at the time

of the Company’s launch. The auditor was formally engaged

in November 2021. This is Richard McGuire’s fourth year

as the Company’s audit partner. The appointment of the

auditor will be reviewed annually by the Committee and

the Board and is subject to approval by Shareholders. In

accordance with the Financial Reporting Council’s (“FRC”)

guidance, the audit will be put out to tender within ten

years of the initial appointment of PwC. Additionally, the

Senior Statutory Auditor must be rotated every five years

and is next eligible for rotation in 2026.

The audit plan was presented to the Committee at its

November 2024 meeting, ahead of the commencement

of the Company’s year-end audit. The audit plan sets out

the audit process, materiality, scope and significant risks.

Auditors’ Independence

The Audit and Risk Committee considered the independence

of the auditor and the objectivity of the audit process and

is satisfied that PwC has fulfilled its obligations to

Shareholders and as independent auditor to the Company

for the year ended 31 December 2024.

The Audit and Risk Committee is satisfied that there are

no issues in respect of the independence of the auditors.

Effectiveness of External Audit

The Committee is responsible for reviewing the effectiveness

of the external audit process. The Committee received a

presentation of the audit plan from the external auditor

prior to the commencement of the audit and a presentation

of the results of the audit following completion of the

main audit testing. Additionally, the Committee received

feedback from the Company Secretary, Administrator,

AIFM and Investment Adviser regarding the effectiveness

of the external audit process. Following the above review,

the Committee has agreed that the re-appointment of

the auditors should be recommended to the Board and

to the Shareholders of the Company.

Provision of Non-audit Services

The Audit and Risk Committee has reviewed the FRC’s

Revised Ethical Standard 2019 Guidance on Audit Committees

and has formulated a policy on the provision of non-audit

services by the Company’s auditor. The Audit and Risk

Committee has determined that the Company’s appointed

auditor will not be considered for the provision of certain

non-audit services, such as accounting and preparation of

the financial statements, internal audit and custody. The

auditor may, if required, provide other non-audit services,

however, and this will be judged on a case-by-case basis.

PwC was not engaged to provide non-audit services to the

Company during the year ended 31 December 2024.

Conclusion with Respect to the Annual Report

The production and audit of the Company’s Annual Report

is a comprehensive process requiring input from different

contributors. In order to reach the conclusion that the

Annual Report when taken as a whole is fair, balanced and

understandable, the Board has requested that the Committee

advises on whether it considers these criteria have been

satisfied. In so doing the Committee has considered the

following:

• the control framework around the production of the

Annual Report;

• the extensive levels of review undertaken in the

production process, by the Investment Adviser and the

Committee; and

• the internal control environment as operated by the

Investment Adviser and other suppliers including any

checks and balances within those systems.

As a result of the work performed, the Committee has

concluded that the Annual Report and Financial Statements

for the year ended 31 December 2024, taken as a whole,

are fair, balanced and understandable and provide the

information necessary for Shareholders to assess the

Company’s performance, business model and strategy,

and it has reported on these findings and provided such

conclusion to the Board.

David Fletcher

Chair of the Audit and Risk Committee

28 April 2025

REPORT OF THE AUDIT AND RISK COMMITTEE

CONTINUED

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual

Report and the financial statements in accordance with

applicable law and regulation.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have prepared the Group and the Company

financial statements in accordance with UK-adopted

international accounting standards in conformity with the

requirements of the Companies Act 2006.

Under company law, 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 Group

and Company and of the profit or loss of the Group and

Company for that period. In preparing the financial

statements, the Directors are required to:

• select suitable accounting policies and then apply them

consistently;

• state whether applicable UK-adopted international

accounting standards have been followed, subject to

any material departures disclosed and explained in the

financial statements;

• make judgements and accounting estimates that are

reasonable and prudent; and

• prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the

Group and Company will continue in business.

The Directors are responsible for safeguarding the assets

of the Group and Company and hence for taking reasonable

steps for the prevention and detection of fraud and other

irregularities.

The Directors are also responsible for keeping adequate

accounting records that are sufficient to show and explain

the Group’s and Company’s transactions and disclose with

reasonable accuracy at any time the financial position of

the Group and Company and enable them to ensure that

the financial statements and the Directors’ Remuneration

Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and

integrity of the Company’s website. Legislation in the

United Kingdom governing the preparation and dissemination

of financial statements may differ from legislation in

otherjurisdictions.

Directors’ Conﬁrmations

The Directors consider that the Annual Report and financial

statements, taken as a whole, is fair, balanced and

understandable and provides the information necessary

for Shareholders to assess the Group’s and Company’s

position and performance, business model and strategy.

Each of the Directors, whose names and functions are

listed in the Corporate Governance section confirm that,

to the best of their knowledge:

• the Group and Company financial statements, which

have been prepared in accordance with UK-adopted

international accounting standards in conformity with

the requirements of the Companies Act 2006, give a

true and fair view of the assets, liabilities, financial

position and profit of the Group and profit of the

Company; and

• the Strategic Report includes a fair review of the

development and performance of the business and

the position of the Group and Company, together with

a description of the principal risks and uncertainties

that it faces.

In the case of each Director in office at the date the

Directors’ report is approved:

• so far as the Director is aware, there is no relevant

audit information of which the Group’s and Company’s

auditors are unaware; and

• they have taken all the steps that they ought to have

taken as a Director in order to make themselves aware

of any relevant audit information and to establish that

the Group’s and Company’s auditors are aware of that

information.

For and on behalf of the Board,

Miriam Greenwood OBE DL

Chair of the Board

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AQUILA ENERGY EFFICIENCY TRUST PLC

Report on the audit of the ﬁnancial statements

Opinion

In our opinion, Aquila Energy Efficiency Trust Plc’s Group financial

statements and Company financial statements (the “financial

statements”):

• give a true and fair view of the state of the Group’s and of the

Company’s affairs as at 31 December 2024 and of the Group’s

and Company’s loss and the Group’s and Company’s cash flows

for the year then ended;

• have been properly prepared in accordance with UK-adopted

international accounting standards; and

• have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within the Annual

Report, which comprise: the Consolidated Statement of Financial

Position and the Company Statement of Financial Position as at 31

December 2024; the Consolidated Statement of Profit or Loss and

Comprehensive Income, the Company Statement of Profit or Loss

and Comprehensive Income, the Consolidated Statement of Changes

in Equity, the Company Statement of Changes in Equity, the Consolidated

Statement of Cash Flows and the Company Statement of Cash Flows

for the year then ended; and the Notes to the Financial Statements,

comprising material accounting policy information and other

explanatory information.

Our opinion is consistent with our reporting to the Audit and Risk

Committee.

Basis for opinion

We conducted our audit in accordance with International Standards

on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities

under ISAs (UK) are further described in the Auditors’ 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.

Independence

We remained independent of the Group in accordance with the

ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard, as

applicable to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit

services prohibited by the FRC’s Ethical Standard were not provided.

We have provided no non-audit services to the Company or its

controlled undertakings in the period under audit.

Material uncertainty related to going concern

In forming our opinion on the financial statements, which is not

modified, we have considered the adequacy of the disclosure made

in note 2 to the financial statements concerning the Group’s and the

Company’s ability to continue as a going concern. The Company

held a continuation vote in February 2023, which did not pass. At

the Annual General Meeting of the Company (the“AGM”) held on

14 June 2023, Shareholders voted in favour of the Company’s change

of investment policy (the “New Investment Policy”). Following the

AGM, and in accordance with the New Investment Policy, the Company

entered a continuation and managed run-off of its portfolio (“Managed

Run-Off”), meaning that it is not making any new investments (save

for the limited circumstances as set out in the New Investment Policy)

and its investing activity is solely in respect of funding legal commitments

to existing investments. The Company is operating currently under

a Managed Run-Off with the term of some of the Company’s assets

being of several years. While the Company is continuing to explore

other strategic options, there remains no certainty that any of these

options will materialise and be put to Shareholders for consideration.

These conditions, along with the other matters explained in note 2

to the financial statements, indicate the existence of a material

uncertainty which may cast significant doubt about the Group’s and

the Company’s ability to continue as a going concern. The financial

statements do not include the adjustments that would result if the

Group and the Company were unable to continue as a going concern.

In auditing the financial statements, we have concluded that the

Directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and the

Company’s ability to continue to adopt the going concern basis of

accounting included:

• Obtained the Directors’ going concern assessment and corroborated

key assumptions to underlying documentation and ensured this

was consistent with our audit work in these areas;

• Assessed the appropriateness of the key assumptions used both

in the base case and downside scenarios, including assessing

whether we considered the downside sensitivities to be

appropriatelysevere;

• Tested the integrity of the underlying formulae and calculations

within the going concern and cash flow models; and

• Considered the appropriateness of the mitigating actions available

to the Directors in the event of the downside scenario materialising.

Specifically, we focused on whether these actions are within the

Directors’ control and are achievable.

In relation to the Directors’ reporting on how they have applied the

UK Corporate Governance Code, other than the material uncertainty

identified in note 2 to the financial statements, we have nothing

material to add or draw attention to in relation to the Directors’

statement in the financial statements about whether the Directors

considered it appropriate to adopt the going concern basis of

accounting, or in respect of the Directors’ identification in the financial

statements of any other material uncertainties to the Group’s and

the Company’s ability to continue to do so over a period of at least

twelve months from the date of approval of the financial statements.

Our responsibilities and the responsibilities of the Directors with

respect to going concern are described in the relevant sections of

this report.

Our audit approach

Overview

Audit scope

• The Company invests in energy efficient investments through its

investments in its subsidiaries, Attika Holdings Limited and one

compartment of SPV Project 2013 S.r.l.;

• The Company is an Investment Trust Company and has appointed

Aquila Capital Investmentgesellschaft mbH (the “Investment

Adviser”) to manage its assets, and;

• The financial statements are prepared for the Group by Apex

Listed Companies Services (UK) Limited (the “Administrator”) to

whom the provision of certain administrative functions has been

delegated. The Group audit team performed all the work and

did not use component auditors.

Key audit matters

• Material uncertainty related to going concern

• Valuation of investments held at fair value through profit or loss

(Group)

• Carrying value of investments at amortised cost (Group)

• Investment in subsidiary held at fair value through profit or loss

(Company)

Materiality

• Overall Group materiality: £1,393,000 (2023: £1,886,000) based

on 2% of net assets.

• Overall Company materiality: £1,323,000 (2023: £1,791,000)

based on 2% of net assets capped at 95% of Group materiality.

• Performance materiality: £1,045,000 (2023: £1,414,000) (Group)

and £992,000 (2023: £1,344,000) (Company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed

the risks of material misstatement in the financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AQUILA ENERGY EFFICIENCY TRUST PLC

CONTINUED

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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)

identified by the auditors, 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, and any comments we make on the results of our procedures thereon,

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.

In addition to going concern, described in the Material uncertainty related to going concern section above, we determined the matters

described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Valuation of investments held at fair value through profit or loss

(Group)

The Group holds energy efficient investments through its subsidiaries

Attika Holdings Limited and SPV Project 2013 S.r.l. These underlying

investments held in Attika Holdings Limited and SPV Project 2013

S.r.l. are either held at fair value through profit or loss or at amortised

cost. The investments at fair value of the Group are £10,022k. The

fair value of the investments have principally been valued on a

discounted cash flow basis, which necessitates significant estimates

in respect of the forecasted cash flows and discount rates applied.

Determining the valuation methodology and determining the inputs

and assumptions within the valuations are subjective and complex.

This, combined with the significance of the investments at fair value

through profit or loss balance in the consolidated statement of financial

position, meant that this was a key audit matter for our current

yearaudit.

We planned our audit to critically assess management’s assumptions

and the investment valuation models in which they are applied. We

have assessed whether the valuation methodology adopted for the

investments held at fair value through profit and loss was appropriate

and in line with accounting standards and industry guidelines. For a

sample of investments at fair value, we performed the following

procedures:

• We tested the mathematical accuracy of the valuation models;

• We engaged our internal valuation experts to provide audit support

in reviewing and concluding on the fair valuation of a sample of

the investments held at fair value. Our internal valuations experts

developed an independent range to benchmark against management’s

discount rates taking into account items such as country risk

premia and price risk exposure which vary depending on the asset;

and

• We agreed the key valuation drivers to relevant supporting

documentation. Specifically, we have agreed a sample of inputs

driving the revenue in the underlying models to supporting

documentation such as signed contracts.

No material issues were identified in our audit testing.

Key audit matter How our audit addressed the key audit matter

Carrying value of investments at amortised cost (Group)

As stated above, the Group holds energy efficient investments through

its subsidiaries Attika Holdings Limited and through SPV Project 2013

S.r.l. These underlying investments held in Attika Holdings Limited

and SPV Project 2013 S.r.l. are either held at fair value through profit

or loss or at amortised cost. The investments at amortised cost of the

Group are £46,309k. The amount is net of the allowance for expected

credit losses in accordance with IFRS 9. The impairment assessment

requires estimates and judgements to be applied by the Directors,

especially around expected credit loss allowance under IFRS 9, such

that changes to key inputs to the estimates and/or judgements made

may result in a material change to the carrying value. These factors

combined with the significance of the investments at amortised cost

balance in the consolidated statement of financial position, meant

that this was a key audit matter for our current year audit.

We understood and evaluated the methodology and assumptions

applied, by reference to IFRS 9 and industry practice, and tested the

techniques used, in determining the amortised cost and recognition

of any expected credit loss. For a sample of investments at amortised

cost, we performed the following procedures:

• We obtained confirmations of the investments or performed

alternative procedures such as agreeing to supporting documentation,

where applicable;

• We assessed key assumptions used, such as those relating to

when a significant increase in credit risk has occurred;

• We assessed the key parameters within the expected credit loss

model such as the probabilities of default and loss given default; and

• We tested the mathematical accuracy of the amortised cost

models.

No material issues were identified in our audit testing.

Investment in subsidiary held at fair value through profit or loss

(Company)

The Company’s investment in subsidiaries is held at £38,399k between

an investment in Attika Holdings Limited of £9,048k held at cost less

impairment and an investment in one compartment of SPV Project

2013 S.r.l (the “Italian SPV”) of £29,351k held at fair value through

profit or loss. The fair value of the Italian SPV as at 31 December 2024

has been determined through an aggregation of the fair value of the

Italian SPV’s individual investments adjusted for the cash and liabilities

of the Italian SPV at 31 December 2024. The fair values of the Italian

SPV’s individual investments take account of projections of future

cash flows and discount rates which seek to take account of the risk

profile of the counterparty and other areas of judgment. The valuation

of the investment in the Italian SPV was identified as a key audit matter

given the components of the underlying valuation such as forecast

cash flows and discount rates are inherently subjective.

We obtained management’s calculations of the fair value of the

investment in the Italian SPV. We performed the following procedures:

• Obtained the calculation for the fair value of the Italian SPV.

• Tested the mathematical accuracy of the calculation and agreed

the inputs to the supporting documentation; and

• In respect of the underlying investments in the Italian SPV, we

agreed the forecast cash flows to supporting documentation such

as signed contracts, tested the mathematical accuracy of the

valuation models and assessed the discount rates used.

Our testing did not identify any evidence of material misstatement.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed

enough work to be able to give an opinion on the financial statements

as a whole, taking into account the structure of the Group and the

Company, the accounting processes and controls, and the industry

in which they operate.

The Group consists of the Company and its two subsidiaries in the

UK and Italy, Attika Holdings Limited and one compartment of SPV

Project 2013 S.r.l. respectively. All three were determined to be

financially significant components for the purposes of the Group

audit. The Group operates common processes and controls in

accounting for its investments held at fair value through and profit

and loss and investments at amortised cost and investment income.

The related balances were therefore audited by the Group team in

the UK and the Group team was able to get sufficient coverage over

the components’ balances such that there was no need for the

involvement of component auditors. As part of designing our audit

of the Company, we determined materiality and assessed the risks

of material misstatement in the financial statements. In particular,

we looked at where the Directors made subjective judgements, for

example in respect of significant accounting estimates that

involvedmaking assumptions and considering future events that are

inherently uncertain.

The impact of climate risk on our audit

As part of our audit, we made enquiries of management to understand

the extent of the potential impact of climate risk on the Group’s and

Company’s financial statements, and we remained alert when performing

our audit procedures for any indicators of the impact of climate risk.

As part of our procedures over the valuation of investments held at

fair value through profit or loss, we obtained the third-party technical

advice used by management to forecast energy production. We have

reviewed the appropriateness of disclosures included in the financial

statements and have read the Annual Report to consider whether

other climate change disclosures are materially consistent with the

financial statements and our knowledge obtained in the audit. Based

on our procedures performed, no significant findings have been noted.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AQUILA ENERGY EFFICIENCY TRUST PLC

CONTINUED

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together

with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on

the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate

on the financial statements as a whole.

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

Financial statements – Group Financial statements – Company

Overall materiality

£1,393,000 (2023: £1,886,000). £1,323,000 (2023: £1,791,000).

How we determined it

2% of net assets

2% of net assets capped at 95% of Group materiality

Rationale for benchmark applied

Net assets are deemed to be the appropriate

benchmark because the Group's performance is

measured on its net asset value.

Net assets are deemed to be the appropriate

benchmark because the Company's performance

is measured on its net asset value.

For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of

materiality allocated across components was between £1,028,000 and £1,323,000. Certain components were audited to a local statutory

audit materiality that was also less than our overall Group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected

misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature

and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance

materiality was 75% (2023: 75%) of overall materiality, amounting to £1,045,000 (2023: £1,414,000) for the Group financial statements and

£992,000 (2023: £1,344,000) for the Company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation

risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £69,665 (Group

audit) (2023: £94,281) and £66,182 (Company audit) (2023: £90,000) as well as misstatements below those amounts that, in our view,

warranted reporting for qualitative reasons.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon.

The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, 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 audit, or otherwise appears

to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures

to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act2006

have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report 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, the information given in the Strategic Report and Directors’

Report, for the year ended 31 December 2024 is consistent with the

financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the Group and

Company and their environment obtained in the course of the audit,

we did not identify any material misstatements in the Strategic Report

and 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.

Corporate governance statement

The Listing Rules require us to review the Directors’ statements 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. Our additional responsibilities with respect to the

corporate governance statement as other information are described

in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded

that each of the following elements of the corporate governance

statement, included within the Strategic Report and Directors’ Report

is materially consistent with the financial statements and our knowledge

obtained during the audit, and, except for the matters reported in

the section headed ‘Material uncertainty related to going concern’,

we have nothing material to add or draw attention to in relation to:

• The Directors’ confirmation that they have carried out a robust

assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those principal

risks, what procedures are in place to identify emerging risks and

an explanation of how these are being managed or mitigated;

• The Directors’ statement in the financial statements about whether

they considered it appropriate to adopt the going concern basis

of accounting in preparing them, and their identification of any

material uncertainties to the Group’s and Company’s ability to

continue to do so over a period of at least twelve months from

the date of approval of the financial statements;

• The Directors’ explanation as to their assessment of the Group’s

and Company’s prospects, the period this assessment covers and

why the period is appropriate; and

• The Directors’ statement as to whether they have a reasonable

expectation that the Company will be able to continue in operation

and meet its liabilities as they fall due over the period of its

assessment, including any related disclosures drawing attention

to any necessary qualifications or assumptions.

Our review of the Directors’ statement regarding the longer-term

viability of the Group and Company was substantially less in scope

than an audit and only consisted of making inquiries and considering

the Directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK

Corporate Governance Code; and considering whether the statement

is consistent with the financial statements and our knowledge and

understanding of the Group and Company and their environment

obtained in the course of the audit.

In addition, 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 and our knowledge obtained during the audit:

• The Directors’ statement that they consider the Annual Report,

taken as a whole, is fair, balanced and understandable, and

provides the information necessary for the members to assess

the Group’s and Company’s position, performance, business

model and strategy;

• The section of the Annual Report that describes the review of

effectiveness of risk management and internal control systems;

and

• The section of the Annual Report describing the work of the

Audit and Risk Committee.

We have nothing to report in respect of our responsibility to report

when the Directors’ statement relating to the Company’s compliance

with the Code does not properly disclose a departure from a relevant

provision of the Code specified under the Listing Rules for review by

the auditors.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AQUILA ENERGY EFFICIENCY TRUST PLC

CONTINUED

Responsibilities for the financial statements and the audit

Responsibilities of the Directors for the financial statements

As explained more fully in the Statement of Directors’ Responsibilities

in respect of the financial statements, the Directors are responsible

for the preparation of the financial statements in accordance with

the applicable framework and for being satisfied that they give a

true and fair view. The Directors are also responsible for such internal

control as they 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 Group’s and 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 Group or the Company or to

cease operations, or have no realistic alternative but to do so.

Auditors’ 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 auditors’ 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.

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.

Based on our understanding of the Group and industry, we identified

that the principal risks of non-compliance with laws and regulations

related to the ongoing qualification as an Investment Trust under

Section 1158 of the Corporation Tax Act 2010, and we considered the

extent to which non-compliance might have a material effect on the

financial statements. We also considered those laws and regulations

that have a direct impact on the financial statements such as the

Companies Act 2006. We evaluated management’s incentives and

opportunities for fraudulent manipulation of the financial statements

(including the risk of override of controls), and determined that the

principal risks were related to posting inappropriate journal entries to

increase profit or to increase total Shareholders’ funds, and management

bias in accounting estimates, such as the valuation of investments held

at fair value through profit or loss or carrying value of of investments

held at amortised cost less expected credit losses. Audit procedures

performed by the engagement team included:

• Enquires with the Board of Directors, Investment Adviser and the

Administrator, over consideration of known or suspected instances

of non-compliance with laws and regulations and fraud;

• Challenging assumptions and judgements made by the Board of

Directors and the Investment Adviser in their significant accounting

estimates, in particular, in relation to the valuation of investments

held at fair value through profit or loss and carrying value of

investments held at amortised cost less expected credit losses (see

related key audit matters above);

• Identifying and testing journal entries, based on risk criteria, made

throughout the year as well as those made as part of the year end

reporting process;

• Reviewing relevant meeting minutes, including those of the Board

of Directors and Audit and Risk Committee;

• Assessment of the Company’s compliance with the requirements

of Section 1158 of the Corporation Tax Act 2010;

• Reviewing the financial statements disclosures to underlying

supporting documentation; and

• Designing audit procedures to incorporate unpredictability around

the nature, timing or extent of our testing.

There are inherent limitations in the audit procedures described above.

We are less likely to become aware of instances of non-compliance

with laws and regulations that are not closely related to events and

transactions reflected in the financial statements. Also, 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 or intentional misrepresentations,

or through collusion.

Our audit testing might include testing complete populations of certain

transactions and balances, possibly using data auditing techniques.

However, it typically involves selecting a limited number of items for

testing, rather than testing complete populations. We will often seek

to target particular items for testing based on their size or risk

characteristics. In other cases, we will use audit sampling to enable

us to draw a conclusion about the population from which the sample

is selected.

A further description of our responsibilities for the audit of the financial

statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part

of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only

for the Company’s members as a body in accordance with Chapter3

of Part 16 of the Companies Act 2006 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility

for any other purpose or to any other person to whom this report is

shown or into whose hands it may come save where expressly agreed

by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if,

in our opinion:

• we have not obtained all the information and explanations we

require for our audit; or

• adequate accounting records have not been kept by the Company,

or returns adequate for our audit have not been received from

branches not visited by us; or

• certain disclosures of Directors’ remuneration specified by law

are not made; or

• the Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with

the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit and Risk Committee,

we were appointed by the Directors on 16 November 2021 to audit

the financial statements for the year ended 31 December 2021 and

subsequent financial periods. The period of total uninterrupted

engagement is 4 years, covering the years ended 31 December 2021

to 31 December 2024.

Other matter

The Company is required by the Financial Conduct Authority Disclosure

Guidance and Transparency Rules to include these financial statements

in an annual financial report prepared under the structured digital

format required by DTR 4.1.15R – 4.1.18R and filed on the National

Storage Mechanism of the Financial Conduct Authority. This auditors’

report provides no assurance over whether the structured digital

format annual financial report has been prepared in accordance with

those requirements.

Richard McGuire (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

28 April 2025

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

		For the year ended			For the year ended
		31 December 2024			31 December 2023
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Losses on investments at fair value through profit and loss	4	–	(2, 077)	(2, 077)	–	(2, 3 8 0)	(2, 3 8 0)
Unrealised (loss)/gain on derivatives		–	(24)	(24)	–	12 2	12 2
Realised gain on derivatives		–	3, 4 93	3 , 493	–	1, 713	1,7 13
Net foreign exchange loss		–	(3,2 41)	(3 , 241)	–	(6 4)	(6 4)
Investment Income	5	5,397	–	5, 397	5,9 4 8	–	5,9 4 8
Investment advisory fees	6	(6 47)	–	(6 47)	(808)	–	(808)
Impairment loss	4	(2,55 4)	–	(2, 55 4)	(1, 7 3 5)	–	(1, 7 3 5)
Other expenses	7	(2 , 3 74)	–	(2 , 3 74)	(2,492)	–	(2,492)
(Loss)/profit on ordinary activities before taxation		(17 8)	(1, 849)	(2 ,027)	913	(60 9)	304
Taxation	8	–	–	–	–	–	–
(Loss)/profit on ordinary activities after taxation		(17 8)	(1, 849)	(2 ,027)	913	(60 9)	304
(Loss)/return per Ordinary Share	9	(0. 20)p	(2.09)p	(2.2 9)p	0 . 91p	(0 . 61)p	0.30p

The total column of the Consolidated Statement of Profit or Loss and Comprehensive Income is the profit and loss account of the Group.

All revenue and capital items in the above consolidated statement derive from continuing operations. No operations were discontinued during

the year.

Profit/(loss) on ordinary activities after taxation is also the “Total comprehensive income/(expense) for the year”.

The notes on pages 68 to 91 are an integral part of these financial statements.

COMPANY STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

For the year ended

31 December 2024

For the year ended

31 December 2023

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000Notes

(Losses)/gains on investments at fair value through

profit or loss

4 – (1,299) (1,299) – 961 961

Net foreign exchange loss – (1,728) (1,728) – (37) (37)

Investment income 5 4,203 – 4,203 4,080 – 4,080

Investment advisory fees 6 (647) – (647) (808) – (808)

Other expenses 7 (1,939) – (1,939) (1,912) – (1,912)

Impairment loss 4 (923) – (923) (2,041) – (2,041)

Profit/(loss) on ordinary activities before

taxation

694 (3,027) (2,333) (681) 924 243

Taxation 8 – – – – – –

Profit/(loss) on ordinary activities after

taxation

694 (3,027) (2,333) (681) 924 243

Return/(loss) per Ordinary Share 9 0.79p (3.43)p (2.64)p (0.68)p 0.92p 0.24p

The total column of the Company Statement of Profit or Loss and Comprehensive Income is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during

the year.

Profit/(loss) on ordinary activities after taxation is also the “Total comprehensive income/(expense) for the year”.

The notes on pages 68 to 91 are an integral part of these financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

		2024	2023
	Notes	£‘000	£‘000
Fixed assets
Investments at fair value through profit or loss	4	10, 02 2	10, 4 9 2
Investments at amortised cost	4	46,30 9	54 ,99 0
		56 , 3 31	65,4 82
Current assets	10
Trade and other receivables		80	652
Derivative financial instrument		–	12 2
Cash and cash equivalents		14 , 417	29,0 82
		14 , 4 9 7	2 9,8 56
Creditors: amounts falling due within one year	11
Payables		(1 ,1 3 7)	(1, 0 57)
Derivative financial instrument		(24)	–
Net current assets		13 , 33 6	28,79 9
Net assets		69,6 67	9 4 , 281
Capital and reserves: equity
Share capital	12	814	1 ,000
Capital redemption reserve	13	18 6	–
Special reserve	13	7 0 , 913	93 ,5 0 0
Capital reserve	13	(2,0 27)	(17 8)
Revenue reserve	13	(219)	(4 1)
Shareholders‘ funds		6 9,6 67	94 , 2 81
Net asset value per Ordinary Share	14	8 5 .55p	9 4. 28p
No. of Ordinary Shares in issue		8 1, 4 3 8 , 2 6 8	1 00, 000 ,000

Approved by the Board of directors and authorised for issue on 28 April 2025.

Signed on behalf of the Board of Directors

Miriam Greenwood OBE DL

Aquila Energy Efficiency Trust PLC is incorporated in England and Wales with Company number 13324616.

The notes on pages 68 to 91 are an integral part of these financial statements.

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

2024

£‘000

2023

£‘000Notes

Fixed assets

Investment in subsidiaries 4 38,399 45,654

Current assets 10

Trade and other receivables 27,34 8 27,548

Cash and cash equivalents 7,620 22,548

34,968 50,096

Creditors: amounts falling due within one year 11 (3, 411) (874)

Net current assets 31,557 49,222

Net assets 69,956 94,876

Capital and reserves: equity

Share capital 12 814 1,000

Capital redemption reserve 13 186 –

Special reserve 13 70,913 93,500

Capital reserve 13 (104) 2,923

Revenue reserve 13 (1,853) (2,547)

Shareholders' funds 69,956 94,876

Approved by the Board of directors and authorised for issue on 28April 2025.

Signed on behalf of the Board of Directors

Miriam Greenwood OBE DL

Aquila Energy Efficiency Trust PLC is incorporated in England and Wales with Company number 13324616.

The notes on pages 68 to 91 are an integral part of these financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

			Capital
		Share	redemption	Special	Capital	Revenue
		capital	reserve	reserve	reserve	reserve	Total
For the year ended 31 December 2024	Notes	£‘000	£’000	£‘000	£‘000	£‘000	£‘000
Opening equity as at 1 January 2024		1 ,000	–	93, 50 0	(17 8)	(41)	94 , 281
Repurchase and cancellation of the Company’s own shares following a Tender Offer	12	(18 6)	18 6	(17, 5 00)	–	–	(17, 5 00)
Expenses of Tender Offer		–	–	(88)	–	–	(88)
Dividend paid	15	–	–	(4, 999)	–	–	(4,999)
Loss for the year		–	–	–	(1, 849)	(17 8)	(2 ,0 27)
Closing equity as at 31 December 2024		814	18 6	7 0 , 913	(2,027)	(219)	69,6 67
			Capital
		Share	redemption	Special	Capital	Revenue
		capital	reserve	reserve	reserve	reserve	Total
For the year ended 31 December 2023	Notes	£‘000	£’000	£‘000	£‘000	£‘000	£‘000
Opening equity as at 1 January 2023		1 ,000	–	9 4 ,75 0	431	(9 5 4)	9 5, 2 27
Dividend paid	15	–	–	(1, 25 0)	–	–	(1, 2 5 0)
(Loss)/profit for the year		–	–	–	(609)	913	30 4
Closing equity as at 31 December 2023		1 ,000	–	93, 50 0	(17 8)	(41)	94 , 281

The notes on pages 68 to 91 are an integral part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

For the year ended 31 December 2024

capital

£‘000

Capital

redemption

reserve

£’000

Special

reserve

£‘000

Capital

reserve

£‘000

Revenue

reserve

£‘000

Total

£‘000Notes

Opening equity as at 1 January 2024 1,000 – 93,500 2,923 (2,547) 94,876

Repurchase and cancellation of the Company’s own

shares following a Tender Offer 12 (186) 186 (17,500) – – (17,500)

Expenses of Tender Offer – – (88) – – (88)

Dividend paid 15 – – (4,999) – – (4,999)

(Loss)/profit for the year – – – (3,027) 694 (2,333)

Closing equity as at 31 December 2024 814 186 70,913 (104) (1,853) 69,956

For the year ended 31 December 2023

capital

£‘000

Capital

redemption

reserve

£’000

Special

reserve

£‘000

Capital

reserve

£‘000

Revenue

reserve

£‘000

Total

£‘000Notes

Opening equity as at 1 January 2023 1,000 – 94,750 1,999 (1,866) 95,883

Dividend paid 15 – – (1,250) – – (1,250)

Profit/(loss) for the year – – – 924 (681) 243

Closing equity as at 31 December 2023 1,000 – 93,500 2,923 (2,547) 94,876

The notes on pages 68 to 91 are an integral part of these financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

		For the year	For the year
		ended	ended
		31December	31December
		2024	2023
	Notes	£‘000	£’000
Operating activities
(Loss)/profit on ordinary activities before taxation		(2,0 27)	304
Adjustments for:
Unrealised loss on investments	4	2,0 60	2, 3 8 0
Unrealised loss/(gain) on derivative instruments		24	(12 2)
Realised loss on investments	4	17	–
Realised gains on derivative investments		–	(10 8)
Impairment loss		2,55 4	1, 7 3 5
Net foreign exchange loss		3, 241	11 6
Decrease/(increase) in trade and other receivables		572	(3 10)
Increase in creditors: amounts falling due within one year		80	968
Interest receivable from amortised cost investments	4	(4 , 008)	(2,4 20)
Net cash flow from operating activities		2 , 513	2 ,543
Investing activities
Purchase of investments	4	(4, 224)	(2 1, 8 3 4)
Repayment of investments	4	9, 89 4	3,0 50
Net cash flow used in investing activities		5, 670	(18 ,78 4)
Financing activities
Tender Offer payment		(17, 5 00)	–
Expenses of Tender Offer		(88)	–
Dividends paid	15	(4, 999)	(1, 25 0)
Net cash flow used in financing activities		(22 ,5 87)	(1, 2 5 0)
Decrease in cash and cash equivalents		(1 4,404)	(17, 4 9 1)
Cash and cash equivalents at start of year		29,0 82	46 ,6 25
Effect of foreign currency exchange translation		(261)	(52)
Cash and cash equivalents at end of year		14 , 4 17	29, 0 82

The notes on pages 68 to 91 are an integral part of these financial statements.

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

For the year

ended

31December

2024

£‘000

For the year

ended

31December

2023

£’000Notes

Operating activities

(Loss)/profit on ordinary activities before taxation (2,333) 243

Adjustments for:

Unrealised loss/(gain) on investments 4 1,299 (961)

Net foreign exchange loss/(gain) 1,728 (17)

Shareholder loan interest income (1,936) (1,912)

Adjustment for impairment loss 923 2,041

Movement in intercompany balances 2,443 (1,901)

Decrease/(increase) in trade receivables 199 (91)

Increase/(decrease) in creditors: amounts falling due within one year 94 (175)

Net cash flow generated from/(used in) operating activities* 2,417 (2,773)

Investing activities

Purchase of investments 4 (294) (4,808)

Repayment of investments 4 3,724 1,306

Net cash flow used in investing activities 3,430 (3,502)

Financing activities

Loan to subsidiary 1 (4,437)

Shareholder loan interest income received 1,936 1,782

Tender Offer payment (17,500) –

Expenses of Tender Offer (88) –

Dividends paid 15 (4,999) (1,250)

Net cash flow used in financing activities (20,650) (3,905)

Decrease in cash and cash equivalents (14,803) (10,180)

Cash and cash equivalents at start of year 22,548 32,714

Effect of foreign currency exchange translation (125) 14

Cash and cash equivalents at end of year 7,620 22,548

*Cash flows from operating activities were presented after the following non-cash

transactions:

Conversion of intercompany receivables to investment in subsidiary – 11,791

Conversion of intercompany receivable to Shareholder loan – 23,076

– 34,867

The notes on pages 68 to 91 are an integral part of these financial statements.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

1. GENERAL INFORMATION

Aquila Energy Efficiency Trust Plc (the “Company”) is a public Company

limited by shares , incorporated in England and Wales on 9 April 2021

with registered number 13324616. The Company is domiciled in

England and Wales. The Company is a closed-ended investment

company with an indefinite life. The Company commenced its

operations on 2 June 2021 when the Company’s Ordinary Shares

were admitted to trading on the London Stock Exchange. The Directors

intend to continue conducting the affairs of the Company so as to

retain its status as an investment trust for the purposes of section

1158 of the Corporation Tax Act 2010, as amended.

The Company owns 100% of its subsidiary, Attika Holdings Limited

(the “HoldCo” or ‘‘AHL’’) and 100% of the notes issued by one

compartment of SPV Project 2013 S.r.l. (the ‘‘SPV’’ or ‘‘Italian SPV’’)

issued to the Company, which entitles the Company to a 100%

economic interest in the receivables purchased through the proceeds

of these notes, together the ‘‘Group’’.

The registered office address of the Company is 4th Floor, 140 Aldersgate

Street, London, EC1A 4HY .

The Company’s investment objective is to generate attractive returns,

principally in the form of income distributions, by investing in a

diversified portfolio of Energy Efficiency Investments.

FundRock Management Company (Guernsey) Limited (formerly Sanne

Fund Management (Guernsey) Limited) acts as the Company’s

Alternative Investment Fund Manager (the “AIFM”) for the purposes

of Directive 2011/61/EU on alternative investment fund managers

(“A IFM D”).

The Group’s Investment Adviser is Aquila Capital Investmentgesellschaft

mbH authorised and regulated by the German Federal Financial

Supervisory Authority.

Apex Listed Companies Services (UK) Limited (the “Administrator”)

(formerly Sanne Fund Services (UK) Limited) provides administrative

and company secretarial services to the Group under the terms of

an administration agreement between the Company and the

Administrator. The Italian SPV is administered by Zenith Service S.p.A.

2. BASIS OF PREPARATION

Group financial statements

The consolidated financial statements have been prepared in accordance

with UK adopted international accounting standards in conformity

with the requirements of the Companies Act 2006 as applicable to

companies reporting under those standards.

The consolidated financial statements have also been prepared as

far as is relevant and applicable to the Group in accordance with the

Statement of Recommended Practice (“SORP”) issued by the Association

of Investment Companies (“AIC”) in July 2022.

The consolidated financial statements are prepared on the historical

cost basis, except for the revaluation of certain financial instruments

at fair value through profit or loss. The principal accounting policies

adopted are set out below. These policies are consistently applied.

The financial statements are presented in sterling rounded to the

nearest thousand. They have been prepared in accordance with the

accounting policies, significant judgements, key assumptions and

estimates set out below.

Company financial statements

The Company financial statements have been prepared in accordance

with the UK adopted international accounting standards in conformity

with the requirements of the Companies Act 2006 as applicable to

companies reporting under those standards.

The financial statements have also been prepared as far as is relevant

and applicable to the Company in accordance with the Statement

of Recommended Practice (“SORP”) issued by the AIC in July 2022.

The financial statements are prepared on the historical cost basis,

except for the revaluation of certain financial instruments at fair value

through profit or loss. The principal accounting policies adopted are

set out below. These policies are consistently applied.

The functional currency of the Company is sterling. The capital of

the Company was raised in sterling and majority of its expenses are

in sterling. The liquidity of the Company is managed in sterling as

the Company’s performance is evaluated in that currency. Accordingly,

the financial statements are presented in sterling rounded to the

nearest thousand. They have been prepared in accordance with the

accounting policies, significant judgements, key assumptions and

estimates as set out below.

Basis of consolidation

The Company does not satisfy the definition of an investment entity

in paragraph 27(c) if IFRS 10, as it does not measure and evaluate

the performance of substantially all of its investment on a fair value

basis. It is therefore required to prepare consolidated accounts.

The Group’s financial statements consolidate those of the Company

and of its subsidiaries at 31 December 2024. The subsidiaries have

a reporting date of 31 December. AHL’s functional currency is

sterling. The Italian SPV’s functional currency is the euro. However,

to align with the Group’s functional currency, the balances of

Italian SPV have been converted to sterling at the year-end rate

for the Statement of Financial Position accounts and at the average

rate during the year for the Statement of Profit or Loss and

Comprehensive Income accounts.

All transactions and balances between Group companies are

eliminated on consolidation. The accounting policies adopted by

the Group are consistent with those adopted by the Company

and the subsidiaries.

Accounting for wholly owned entities

AHL

The Company owns 100% of its subsidiary, AHL. The registered

office address of AHL is Leaf B, 20th Floor, Tower 42, Old Broad

Street, London, England, EC2N 1HQ. The Company has acquired

Energy Efficiency Investments through its investment in the subsidiary.

The Company will finance the subsidiary through a mix of equity and

debt instruments. The Company consolidates the subsidiary.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Italian SPV

The Italian SPV is a Company established under the laws of Italy to

hold securitised receivables. The Company does not hold any equity

in the SPV. However, it does own 100% of the notes issued by one

compartment of the SPV which entitles the Company to an 100%

economic interest in the receivables purchased through the proceeds

of these notes. The Company does not have an economic interest

in any of the other securities receivables issuances by the Italian SPV.

The notes subscribed by the Company, issued by the Italian SPV, and

the receivables purchased from the proceeds of these notes, together

with all associated assets and liabilities and income and costs, are

ring-fenced from other assets and liabilities of the Italian SPV and

thus the Company’s holdings have been deemed a silo under IFRS

10 paragraph B77. The Company consolidates the results of the

Italian SPV in respect of the performance of the receivables in the silo.

Going concern

The Directors have adopted the going concern basis in preparing the

financial statements. The following is a summary of the Directors’

assessment of the going concern status of the Group and Company.

The Group and Company continue to meet day-to-day liquidity needs

through their cash resources. The Directors have a reasonable

expectation that the Group and Company have adequate resources

to continue in operational existence for at least twelve months from

the date of this document.

In reaching this conclusion, the Directors have taken into account the

following considerations:

• The Group’s investment commitments, amounting to £0.04 million,

and its income and expense flows;

• No new commitments have been entered into since 28 February 2023;

• The £36.4 million cash balance at 31 March 2025 (excluding £2.5

million held as collateral for FX hedging) following the receipt of

repayments up to that date; and

• The potential income from the remaining investments.

The Board has announced that a special interim dividend of 36.837

pence per Ordinary Share will be paid on 30 May 2025. Total expenses

for the year were £3.0 million (excluding impairment losses)

(2023: £3.3 million), which represented 3.8% of average net assets

during the year (2023: 3.5%). The Board, Investment Adviser and AIFM

will review the ongoing liquidity requirements and cashflow forecasts

of the Company prior to making further distributions to ensure that

sufficient funds are maintained throughout the run-off process. At

the date of approval of this document, based on the aggregate of

investments and cash held, the Group and Company have substantial

operating expenses cover. The Directors are also satisfied that the

Group and Company would continue to remain viable under downside

scenarios.

At the Annual General Meeting of the Company (the “AGM”)

held on 14 June 2023, Shareholders voted in favour of the

Company’s change of investment policy (the “New Investment

Policy”). Following the AGM, and in accordance with the New

Investment Policy, the Company entered a continuation and

managed run-off of its portfolio (“Managed Run-Off”), meaning

that it is not making any new investments (save for the limited

circumstances as set out in the New Investment Policy) and its

investing activity is solely in respect of funding legal commitments

to existing investments.

The Continuation and Managed Run-Off Resolution was put forward

as a resolution to Shareholders in response to the outcome of the

Company’s continuation vote held in February 2023, which did not pass.

As referred to above, the Company is operating currently under a

Managed Run-Off with the term of some of the Company’s assets

being of several years. While the Company is continuing to explore

other strategic options, there remains no certainty that any of these

options will materialise and be put to Shareholders for consideration.

Accordingly, while the Directors recognise that these conditions

indicate the existence of material uncertainty which may cast significant

doubt about the Group and Company’s ability to continue as a going

concern, based on the assessment and considerations above, the

Directors have concluded that the financial statements of the Group

and the Company should be prepared on a going concern basis.

Neither the Group nor the Company financial statements include

any potential costs of liquidation and the financial statements do

not include the other adjustments that would result if the Group

and the Company were unable to continue as a going concern.

Critical accounting judgements, estimates and assumptions

The preparation of the consolidated financial statements requires

the application of estimates and assumptions which may affect the

results reported in the consolidated financial statements. Estimates,

by their nature, are based on judgement and available information.

The estimates and assumptions that have a significant risk of causing

a material adjustment to the carrying value of assets and liabilities

are those used to determine the fair value of the investments and

expected credit loss as disclosed in note 4 to the financial statements.

Investment fair value

The key assumptions that have a significant impact on the value of

the Group’s investments are discount rates, energy yield, power

prices and capital expenditure factors. The impact of risks associated

with climate change is assessed on an investment-by-investment

basis and factored into the underlying cash flows where relevant.

The discount factors are subjective and therefore it is feasible that a

reasonable alternative assumption may be used resulting in a different

value. The discount factors applied to the cashflows are reviewed

semi-annually by the Investment Adviser to ensure they are at the

appropriate level. The Investment Adviser will take into consideration

market transactions, where they are of similar nature, when considering

changes to the discount factors used.

2. BASIS OF PREPARATION CONTINUED

The operating costs of the operating companies are frequently partly

or wholly subject to indexation and an assumption is made that

inflation will increase at a long-term rate.

The values of Energy Efficiency investments are not significantly

sensitive to fluctuations in future revenues if a fixed indexation clause

is applied to its cash flow schedule.

Expected credit loss (‘‘ECL’’) allowance for financial assets

measured at amortised cost

The calculation of the Group’s ECL allowances and provisions against

receivable purchase agreements under IFRS 9 is complex and involves

the use of significant judgement and estimation. Loan impairment

provisions represent an estimate of the losses incurred in the loan

portfolios at the balance sheet date. The calculation involves the

formulation and incorporation of multiple conditions into ECL to

meet the measurement objective of IFRS 9. Further details are given

in note 4 to the financial statement below.

New Standards, Interpretations and Amendments Adopted

from 1 January 2024

A number of new standards and amendments to standards are

effective for the annual periods beginning after 1 January 2024.

None of these have a significant effect on the measurement of the

amounts recognised in the financial statements of the Company .

New Standards and Amendments Issued but not yet Effective

The relevant new and amended standards and interpretations that

are issued, but not yet effective, up to the date of issuance of the

Group’s and Company’s financial statements are disclosed below.

Amendments to IAS 21 – Lack of Exchangeability (effective

for annual periods beginning on or after 1 January 2025)

In August 2023, the IASB amended IAS 21 to help entities to determine

whether a currency is exchangeable into another currency, and which

spot exchange rate to use when it is not. The Group does not expect

these amendments to have a material impact on its operations or

financial statements.

Amendments to the Classification and Measurement of Financial

Instruments – Amendments to IFRS 9 and IFRS 7 (effective for

annual periods beginning on or after 1 January 2026)

On 30 May 2024, the IASB issued targeted amendments to IFRS 9

and IFRS 7 to respond to recent questions arising in practice, and to

include new requirements not only for financial institutions but also

for corporate entities. These amendments:

• clarify the date of recognition and derecognition of some financial

assets and liabilities, with a new exception for some financial

liabilities settled through an electronic cash transfer system;

• clarify and add further guidance for assessing whether a financial

asset meets the solely payments of principal and interest (SPPI)

criterion;

• add new disclosures for certain instruments with contractual

terms that can change cash flows (such as some financial

instruments with features linked to the achievement of environment,

social and governance targets); and

• update the disclosures for equity instruments designated at fair

value through other comprehensive income (‘FVOCI’).

The Group does not expect these amendments to have a material

impact on its operations or financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements (effective

for annual periods beginning on or after 1 January 2027)

IFRS 18 will replace IAS 1 Presentation of financial statements, introducing

new requirements that will help to achieve comparability of the financial

performance of similar entities and provide more relevant information and

transparency to users. Even though IFRS 18 will not impact the recognition

or measurement of items in the financial statements, its impacts on

presentation and disclosure are expected to be pervasive, in particular those

related to the statement of comprehensive income and providing management-

defined performance measures within the financial statements.

Management is currently assessing the detailed implications of applying

the new standard on the Group’s and Company’s financial statements.

From the high-level preliminary assessment performed, the following

potential impacts have been identified:

• Although the adoption of IFRS 18 will have no impact on the

Group’s and Company’s net profit, the Group and Company

expects that grouping items of income and expenses in the

statement of comprehensive income into the new categories will

impact how operating profit is calculated and reported. From the

high-level impact assessment that the Group and Company has

performed, the following might potentially impact operating profit:

– Foreign exchange differences currently aggregated in the line

item ‘Net foreign exchange loss/gain’ in operating profit might

need to be disaggregated, with some foreign exchange gains

or losses presented below operating profit.

– The line items presented on the primary financial statements

might change as a result of the application of the concept of

‘useful structured summary’ and the enhanced principles on

aggregation and disaggregation.

• The Company does not expect there to be a significant change in

the information that is currently disclosed in the notes because

the requirement to disclose material information remains unchanged;

however, the way in which the information is grouped might

change as a result of the aggregation/disaggregation principles.

In addition, there will be significant new disclosures required for:

– management-defined performance measures;

– a break-down of the nature of expenses for line items presented

by function in the operating category of the statement of

comprehensive income – this break-down is only required for

certain nature expenses; and

– for the first annual period of application of IFRS 18, a reconciliation

for each line item in the statement of comprehensive income

between the restated amounts presented by applying IFRS 18

and the amounts previously presented applying IAS 1.

• From a cash flow statement perspective, there will be changes to

how interest received and interest paid are presented. Interest

paid will be presented as financing cash flows and interest received

as investing cash flows, which is a change from current presentation

as part of operating cash flows.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The Group and Company will apply the new standard from its mandatory

effective date of 1 January 2027. Retrospective application is required,

and so the comparative information for the financial year ending 31

December 2026 will be restated in accordance with IFRS 18.

3. MATERIAL ACCOUNTING POLICIES

Financial instruments

Financial assets

The Group’s and Company’s financial assets principally comprise

cash and cash equivalents, investments held at fair value through

profit and loss, investments held at amortised cost, derivative financial

instruments, interest income receivables, Shareholder loan receivables

and prepayments and other receivables.

Interest income receivables, prepayments and other receivables are

initially recognised at fair value and subsequently measured at

amortised cost using the effective interest method.

The Group’s investments are debt instruments held at fair value

through profit or loss and debt instruments at amortised cost. Gains

or losses resulting from the movements in the fair value are recognised

in the Group’s Consolidated Statement of Profit or Loss and

Comprehensive income under the capital column. Debt instruments

at amortised cost are revalued with the functional currency exchange

rate at each valuation point and recognised in the Group’s Consolidated

Statement of Profit or Loss and Comprehensive income and are

subject to ECL.

Derivatives comprise forward currency transactions used to hedge the

Group’s foreign currency exposure. The fair value of the currency forward

transactions is the difference between the spot rate and the forward

rate at the date of the Consolidated Statement of Financial Position.

Investment in Subsidiaries

The Company’s investment in its subsidiary AHL comprises equity

shares and a Shareholder loan. The Company’s equity investment in

its subsidiary AHL, is held at cost less impairment in the Company’s

Statement of Financial Position.

The Company’s investment in SPV is held at fair value through profit

or loss. The fair value of SPV as at 31 December 2024 has been

determined through an aggregation of the fair value of SPV’s individual

investments adjusted for the cash and liabilities of SPV as at

31 December 2024. Where returns are not fixed, the fair value of SPV’s

individual investments take account of forecast power production and

power price curves provided by independent research companies.

Discount rates take account of the risk profile of the counterparty and

other areas of judgment.

Financial liabilities

The Group’s financial liabilities include trade and other payables and

other short-term monetary liabilities which are initially recognised

at fair value and subsequently measured at amortised cost using the

effective interest method. The Group’s financial liabilities also include

derivative financial instruments.

Recognition and derecognition

Financial assets and financial liabilities are recognised in the Group’s

Consolidated Statement of Financial Position when the Group becomes

a party to the contractual provisions of the instrument. Financial

assets and financial liabilities are initially measured at fair value.

At initial recognition, financial instruments classified at fair value

through profit or loss are measured at fair value which is normally

the transaction price. Other financial instruments not classified at

fair value through profit or loss are measured initially at fair value

but are adjusted for incremental and directly attributable transaction costs.

Transaction costs that are directly attributable to the acquisition or

issue of financial assets and financial liabilities (other than financial

assets and financial liabilities at fair value through profit or loss) are

added to or deducted from the value of the financial assets or financial

liabilities, as appropriate, on initial recognition. Transaction costs

directly attributable to the acquisition of financial assets or financial

liabilities at fair value through profit or loss are recognised immediately

in profit or loss.

A financial liability (in whole or in part) is derecognised when the

Group has extinguished its contractual obligations, it expires or is

cancelled. Financial assets are derecognised when the rights to receive

cash flows from the investments have expired or the Group has

transferred substantially all risks and rewards of ownership.

Classification and measurement of financial assets

IFRS 9 contains a classification and measurement approach for debt

instruments that reflects the business model in which assets are

managed and their cash flow characteristics. For debt instruments

two criteria are used to determine how financial assets should be

classified and measured:

• The entity’s business model (i.e. how an entity manages its debt

Instruments in order to generate cash flows by collecting

contractual cash flows, selling financial assets or both); and

• The contractual cash flow characteristics of the financial asset

(i.e. whether the contractual cash flows are solely payments of

principal and interest).

A debt instrument is measured at amortised cost if it meets both of

the following conditions and is not designated as at fair value through

profit and loss (“FVTPL”):

(a) it is held within a business model whose objective is to hold

assets to collect contractual cash flows; and

(b) its contractual terms give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal

amount outstanding.

3. MATERIAL ACCOUNTING POLICIES CONTINUED

A debt instrument is measured at fair value through other comprehensive

income (“FVOCI”) if it meets both of the following conditions and

is not designated as at FVTPL:

(a) it is held within a business model whose objective is achieved

by both collecting contractual cash flows and selling financial

assets; and

(b) its contractual terms give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal

amount outstanding.

In assessing whether the contractual cash flows are solely payments

of principal and interest, the contractual terms of the instrument are

considered. This includes assessing whether the financial asset contains

a contractual term that could change the timing or amount of

contractual cash flows such that it would not meet this condition.

Subsequent to initial recognition, financial assets that are classified

as measured at fair value through profit or loss are measured at fair

value in the Consolidated Statement of Financial Position (with no

deduction for sale or disposal costs). Gains and losses resulting from

the movement in fair value are recognised in the Consolidated

Statement of Profit or Loss and Comprehensive Income.

Subsequent to initial recognition, financial assets that are measured

at amortised cost require the use of the effective interest method

and are subject to expected credit loss.

Taxation

The tax charge for the year is based on amounts expected to be

received or paid.

Deferred tax is provided on all timing differences that have originated

but not reversed by the accounting date.

Deferred tax liabilities are recognised for all taxable timing differences

but deferred tax assets are only recognised to the extent that it is

probable that taxable profits will be available against which those

timing differences can be utilised.

Deferred tax is measured at the tax rate which is expected to apply

in the periods in which the timing differences are expected to reverse,

based on tax rates that have been enacted or substantively enacted

at the balance sheet date and is measured on an undiscounted basis.

Segmental reporting

The Chief Operating Decision Maker (“CODM”), which is the Board, is

of the opinion that the Group is engaged in a single segment of business,

being investment in energy efficiency assets to generate investment

returns whilst preserving capital. The financial information used by the

CODM to manage the Group presents the business as a single segment.

Income

Income includes interest and dividends receiveable from investments

held at fair value and at amortised cost, and bank interest.

Investment interest income for the year is recognised in the Consolidated

Statement of Profit or Loss and Comprehensive income using effective

interest method calculation.

Interest and dividends receivable are recognised when the right to

receive them is established and is reflected in the Consolidated

Statement of Profit or Loss and Comprehensive Income as Investment

Income.

Bank interest income is recognised for the year in the Consolidated

Statement of Profit or Loss and Comprehensive income on an accruals basis.

Expenses

All expenses are accounted for on an accruals basis. In respect of

the analysis between revenue and capital items presented within the

Consolidated Statement of Profit or Loss and Comprehensive Income,

all expenses are presented as revenue as it is directly attributable to

the operations of the Group.

Details of the Group’s fee payments to the Investment Adviser are

disclosed in note 6 to the consolidated financial statements. Details of

the Group’s other expenses are disclosed in note 7 to the consolidated

financial statements. These fees are presented under the revenue column

in the Consolidated Statement of Profit or Loss and Comprehensive Income.

Foreign currency

Transactions denominated in foreign currencies are translated into

sterling at actual exchange rates as at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at

year-end are reported at the rates of exchange prevailing at the year-

end. Any gain or loss arising from a change in exchange rates subsequent

to the date of the transaction is included as an exchange gain or loss

to capital or revenue in the Consolidated Statement of Profit or Loss

and Comprehensive Income as appropriate. Foreign exchange movements

on investments are included in the Capital account of the Consolidated

Statement of Profit or Loss and Comprehensive Income.

Cash and cash equivalents

Cash and cash equivalents include deposits held at call with banks

and other short-term deposits with original maturities of three months

or less.

Trade and other payables

Trade and other payables are initially recognised at fair value, and

subsequently re-measured at amortised cost using the effective

interest method where necessary.

Share capital and share premium

Ordinary Shares are classified as equity. Costs directly attributable

to the issue of new shares (that would have been avoided if there

had not been a new issue of new shares) are recognised against the

value of the ordinary share premium account.

Repurchase of the Company’s own shares are recognised and deducted

directly in equity. No gain or loss is recognised in profit or loss on

the purchase, sale, issue or cancellation of the Company’s own equity

instruments.

Realised gains and losses on investments

Realised gains and losses comprise the difference between the sale

proceeds of an investment and its fair value, and are deemed to be

realised when the proceeds have settled.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

ECL allowance for financial assets measured at amortised cost

Many of the Group’s investments are financial assets measured at amortised cost. These investments are structured as purchases of receivables

or purchases of notes which have the right to receivables. The purchased receivables derive from energy services agreements for the provision

of energy efficiency and/or renewable energy solutions provided by Energy Service Companies (“ESCOs”) to their corporate clients and these

receivables provide a fixed return for the Group. ESCOs are businesses that provide energy-related services to end-users, often focusing on energy

efficiency projects. The receivables are due to be received over a range of maturities from less than 12 months to more than fifteen years. Individual

agreements provide for the receivables to be paid mostly on a monthly or quarterly basis.

In addition to past events and current conditions, reasonable and supportable forecasts affecting collectability are also considered when

determining the amount of impairment in accordance with IFRS 9. Under the IFRS 9 expected credit loss model, expected credit losses are

recognised at each reporting period, even if no actual loss events have taken place. In addition to past events and current conditions, reasonable

and supportable forward-looking information that is available without undue cost or effort is considered in determining impairment, with the

model applied to all financial instruments subject to impairment testing.

At initial recognition, allowance is made for ECL resulting from default events that are possible within the next 12 months (12-month expected

ECL). In the event of a significant increase in credit risk, allowance (or provision) is made for ECL resulting from all possible default events over

the expected life of the financial instrument (lifetime ECL).

Financial assets where 12-month ECL is recognised are Stage 1; financial assets which are considered to have experienced a significant increase

in credit risk are in Stage 2; and financial assets which have defaulted or are otherwise considered to be credit-impaired are allocated to Stage

3. Stage 2 and Stage 3 are based on lifetime ECL.

The measurement of ECL, is primarily based on the product of the instrument’s probability of default (“PD”), loss given default (“LGD”), and

exposure at default (“EAD”), taking into account the value of any collateral held or other mitigants of loss and including the impact of

discounting using the EIR.

• The PD represents the likelihood of a borrower defaulting on its financial obligation, either over the next 12 months (“12M PD”), or over

the remaining lifetime (“Lifetime PD”) of the obligation. This has been calculated by an external third party credit rating agency using a

wide range of parameters such as the company’s financial statements and the macro economic environment. The external credit rating

company have also designed a downside and upside scenario based on historic data. Company financials are modified to reflect various

factors leading to a deterioration in performance.

• In each of the scenarios, various macro and financial variables are flexed and applied in the calculation. The macros variables are GDP

growth, inflation, unemployment rate and interest rate. The financial variables are turnover, net debt, Shareholder equity, working capital,

tangible assets, interest expense, EBITDA, EBIT and net income. A base, optimistic and pessimistic scenario is applied for each of these

above variables to calculate the corresponding expected credit loss.

The probability weighting of the scenarios was based an analysis of the level of severity. It was determined that a weighting of 50% for the

base case and 25% for each of the other scenarios was appropriate. The resulting forecasts are thus neither overly optimistic nor unduly

conservative for IFRS9 purposes.

	Optimistic	Base Case	Mild Pessimistic
IFRS 9 Probability Weighting	25%	50%	25%

• The EAD represents the amounts the Group is owed at the reporting date.

• LGD represents the Group’s expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of

claim and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of EAD. LGD is calculated on a 12-month

or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and lifetime

LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan (“Lifetime LGD”).

The ECL is determined by estimating the PD, LGD, and EAD for each individual exposure or collective segment. These three components are

multiplied together and adjusted for the likelihood of survival (i.e., the exposure has not prepaid or defaulted in an earlier month). This effectively

calculates an ECL.

Management is aware that there is a high level of judgement in calculating the scenarios and the inputs given the assets are relatively recent

with limited historic data.

The main difference between Stage 1 and Stage 2 is the respective PD horizon. Stage 1 estimates use a maximum of a 12-month PD, while

Stage 2 estimates use a lifetime PD. The main difference between Stage 2 and Stage 3 is that Stage 3 is effectively the point at which there

has been a default event or the investment can be considered to be credit-impaired.

3. MATERIAL ACCOUNTING POLICIES CONTINUED

Movements between Stage 1 and Stage 2 are based on whether an instrument’s credit risk as at the reporting date has increased significantly

relative to the date it was initially recognised. Where the credit risk subsequently improves such that it no longer represents a significant

increase in credit risk since origination, the asset is transferred back to Stage 1.

In assessing whether a counterparty has had a significant increase in credit risk the following indicators are considered:

1. Early signs of cashflow/liquidity problems such as an ongoing delay in servicing of payables.

2. Significant increase in PD.

3. Actual or expected late payments or restructuring of payments due.

4. Actual or expected significant adverse change in operating results of the borrower, where this information is available.

5. Significant adverse changes in business, financial and/or economic conditions in which the counterparty operates.

Movements between Stage 2 and Stage 3 are based on whether financial assets are credit-impaired as at the reporting date. The Group uses

a rebuttable presumption that a credit deterioration (i.e. stage 1 to stage 2) occurs no later than when a payment is 90 days past due. The

Group uses this 90-day backstop for all its assets. Assets can move in both directions through the stages of the impairment model. The

Directors do not believe that being 30 days overdue is considered a credit deterioration given the nature and payment profile of some of its

small counterparties. Payments are different from consumer loan payments and often comprise a very large number of payments, each of a

very small amount. There is also significant evidence of catch-up payments, where a counterparty has just past the 30 days, and very rarely

have these counterparties missed the payment completely.

We recognise that individual credit exposures, which define the Group’s investments, are different from, for example, consumer mortgage or

consumer car loan portfolios. Late payments can arise due to the corporate counterparties refusing to utilise direct debit or standing order

payment processes with the result that payment chasing can be required for relatively small amounts, eg lighting service contracts. Accordingly,

we do expect that in certain cases 90 days late payments may not lead to movements through the ECL stages.

4. INVESTMENTS

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities

is determined on the basis of the lowest level input that is significant to the fair value measurement.

Financial assets and financial liabilities are classified in their entirety into only one of the following three levels:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2

Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either

directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

The classification of the Group’s investments held at fair value are detailed in the table below:

			31 December 2024				31 December 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Group	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Investments at fair value through profit and loss	–	–	10,022	10,022	–	–	10,492	10,492
Derivative financial instruments	–	(24)	–	(24)	–	122	–	122
		(24)	10,022	9,998	–	122	10,492	10,614

There are no transfers between investment levels for the Group during the year.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The classification of the Company’s investments held is detailed in the table below:

			31 December 2024				31 December 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Company	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Investment in SPV at fair value through profit
or loss	–	–	29,351	29,351	–	–	35,683	35,683

There are no transfers between investment levels for the Company during the year.

The movement on the Level 3 unquoted investments of the Group during the year is shown below:

	31 December	31 December
	2024	2023
	Group	Group
	£‘000	£‘000
Opening balance	10,492	11,742
Additions during the year	3,683	1,675
Disposals during the year	(1,564)	(1,551)
Realised losses	(17)	–
Urealised losses	(2,060)	(1,374)
Net FX losses	(512)	–
Closing balance	10,022	10,492

The movement on investments at amortised cost of the Group during the year is shown below:

	31 December
	2024
	Group
	£‘000
Opening balance	54,990
Additions during the year	541
Receipts during the year	(8,330)
Income accrued in the year	4,008
Net FX losses	(2,346)
Impairment	(2,554)
Closing balance	46,309

4. INVESTMENTS CONTINUED

The movement on the Level 3 unquoted investments of the Company during the year is shown below:

	31 December	31 December
	2024	2023
	Company	Company
	£‘000	£‘000
Opening balance	35,683	31,220
Additions during the year	294	4,808
Repayments during the year	(3,724)	(1,306)
Net FX losses	(1,603)	–
Unrealised (losses)/gains	(1,299)	961
Closing balance	29,351	35,683

Assets and liabilities not carried at fair value but for which are fair value is disclosed

The following table presents the fair value of the Group’s assets and liabilities not measured at fair value through profit and loss at

31 December 2024 but for which fair value is disclosed:

		31 December 2024		31 December 2023
		Fair market		Fair market
	Carrying value	value	Carrying value	value
	£‘000	£‘000	£‘000	£‘000
Assets
Investments at amortised cost	46,309	46,543	54,990	57,221

For all other assets and liabilities not carried at fair value, the carrying value is a reasonable approximation of fair value.

Valuation methodology

Debt instruments at fair value through profit or loss

The Group through its subsidiary (AHL) and its notes in the Italian SPV has acquired debt instruments at fair value through profit or loss. The

Investment Adviser has determined the fair value of debt investments as at 31 December 2024. The Directors have satisfied themselves as to

the fair value of the debt instrument investments as at 31 December 2024.

Valuation Assumptions and Inputs

The determination of what qualifies as ‘observable’ data requires significant judgment. Observable data is defined as market information that

is readily available, regularly updated, reliable, verifiable, non-proprietary, and sourced from independent entities actively participating in the

relevant market.

The investments fall under Level 3 classification, as they are not publicly traded and rely on inputs that cannot be directly observed. The

discount rate, power price and energy yield are the key unobservable inputs that significantly influence the fair value of investments. Any

increase or decrease in these factors would have an impact on valuation as can be seen in our sensitivities below.

Valuation assumptions and Inputs

Discount rates The discount rate used in the valuations is derived according to internationally recognised methods. Typical

components of the discount rate are risk free rates, country-specific and asset-specific risk premia.

The latter comprise the risks inherent to the respective asset class as well as specific premia for other risks such

as development and construction.

Power price Power prices are based on power price forecasts from leading market analysts. The forecasts are independently

sourced from a provider with coverage in almost all European markets as well as providers with regional expertise.

Energy yield Estimated based on third party energy yield assessments as well as operational performance data (where

applicable).

Inflation rates Long-term inflation is based on central bank targets for the respective jurisdiction.

Capital expenditure Based on the contractual position (e.g. engineering, procurement and construction agreement), where applicable.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Valuation sensitivities

For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case

assumption, and that the number of investments remains static throughout the modelled life.

The Net Asset Value impacts from each sensitivity is shown below.

Discount rates

The Discounted Cash Flow (‘‘DCF’’) valuation of the investments which are held at fair value represents one component of the Net Asset Value

of the Group and the key sensitivities are considered to be the discount rate used in the DCF valuation and assumptions.

The weighted average valuation discount rate applied to calculate the investment valuation is 9.2% (2023: 7.7%). An increase or decrease in

this rate by 0.5% at investment level has the following effect on valuation.

	31 December 2024		31 December 2023
	+0.5%	-0.5%	-0.5%	+0.5%
	Change	Change	Change	Change
Discount rate	£‘000	£‘000	£‘000	£‘000
Valuation	(59)	61	(242)	250

Power price

Long term power price forecasts are provided by leading market consultants and are updated quarterly. The sensitivity below assumes a 10% increase

or decrease in merchant power prices relative to the base case for every year of the asset life. The sensitivity considers a flat 10% movement in

power prices for all years, i.e. the effect of adjusting the forecast electricity price assumptions in each of the jurisdictions applicable to the

investments down by 10% and up by 10% from the base case assumptions for each year throughout the operating life of the investment.

A change in the forecast electricity price assumptions by plus or minus 10% has the following effect on valuation, as shown below.

	31 December 2024		31 December 2023
	-10.0%	+10.0%	-10.0%	+10.0%
	Change	Change	Change	Change
Power price	£‘000	£‘000	£‘000	£‘000
Valuation	(48)	51	(64)	66

Energy yield

The base case assumes a (‘‘P50’’) level of output. The P50 output is the estimated annual amount of electricity generation (in MWh) that has a

50% probability of being exceeded both in any single year and over the long term and a 50% probability of being under achieved. Hence the

P50 is the expected level of generation over the long term. The sensitivity illustrates the effect of a 10% lower annual production (a downside

case) and a 10% higher annual production (upside case). The sensitivity is applied throughout the whole term of the projects.

The table below shows the sensitivity of the project values to changes in the energy yield applied to cash flows from project as explained above.

	31 December 2024		31 December 2023
	-10.0%	+10.0%	-10.0%	+10.0%
	Change	Change	Change	Change
Energy yield	£‘000	£‘000	£‘000	£‘000
Valuation	(296)	297	(555)	533

Inflation rates

As most payments are fixed and not linked to the inflation rate, a sensitivity of the inflation rate has only a negligible impact on the NAV.

Capital expenditure

The Group has contractual protections if capex is delayed (i.e. reduce the capex or increase receivables due) and the Group is not obliged to

fund cost overruns. Therefore, capex sensitivities are not appropriate for the Group’s type of investments.

4. INVESTMENTS CONTINUED

Investments at Amortised Cost

a) Investments at amortised cost

The disclosure below presents the gross carrying value of financial instruments to which the impairment requirements in IFRS 9 are applied

and the associated allowance for ECL. Please see Note 3 for more detail on the allowance for ECL where the Group has classified the investment

portfolio according to stages.

The following table analyses loans by staging for the Group as at 31 December 2024:

	31 December 2024			31 December 2023
	Gross		Net	Gross		Net
	Carrying	Allowance	Carrying	Carrying	Allowance	carrying
	Amount	for ECL	Amount	Amount	for ECL	amount
Group	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Fixed Value Investments at amortised cost
Stage 1	21,194	(118)	21,076	54,399	(259)	54,140
Stage 2	27,156	(1,923)	25,233	156	(24)	132
Stage 3	2,384	(2,384)	–	2,306	(1,588)	718
Total Assets	50,734	(4,425)	46,309	56,861	(1,871)	54,990

b) Expected Credit Loss allowance for IFRS 9

Impairment Provisions are driven by changes in credit risk of instruments, with a provision for lifetime ECL recognised where the risk of default

of an instrument has increased significantly since initial recognition.

The following table analyses Group ECL by stage.

Group

	31 December	31 December
	2024	2023
	£‘000	£‘000
At 1 January	1,871	136
Charge for the year – Stage 1	(141)	182
Charge for the year – Stage 2	1,899	(35)
Charge for the year – Stage 3	796	1,588
Allowance for ECL at 31 December	4,425	1,871

Stage 2 losses

The stage 2 ECL provision increased because certain investments were deemed to be in arrears of more than 90 days as at 31 December 2024

and because the credit risk of Superbonus investments was deemed to have changed to the ESCOs themselves rather than the purchasers of

the tax credits generated by these investments.

Stage 3 losses

The Stage 3 losses relate to full impairments against three investments, which were partially provided against as at 31 December 2023: a CHP

investment in the United Kingdom, the sub-metering investment in Germany and a Solar PV investment in Spain where the prospects of

significant recoveries were deemed remote.

Measurement uncertainty and sensitivity analysis of ECL

The recognition and measurement of ECL is complex and involves the use of judgement and estimation. This includes the formulation and

incorporation of multiple forward-looking economic conditions into ECL to meet the measurement objective of IFRS 9.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The ECL recognised in the financial statements reflects the effect on expected credit losses of a range of three possible outcomes, calculated

on a probability-weighted basis, based on the economic scenarios described in Note 3 to the financial statements, including management

overlays where required. The probability-weighted amount is typically a higher number than would result from using only the base (most

likely) economic scenario. ECLs typically have a non-linear relationship to the many factors which influence credit losses, such that more

favourable macroeconomic factors do not reduce defaults as much as less favourable macroeconomic factors increase defaults. The ECL

calculated for each of the scenarios represents three outcomes that have been evaluated to estimate ECL. As a result, the ECL calculated for

the upside and downside scenarios should not be taken to represent the upper and lower limits of possible actual ECL outcomes. There is a

high degree of estimation uncertainty in numbers representing tail risk scenarios when assigned a 100% weight. A wider range of possible

ECL outcomes reflects uncertainty about the distribution of economic conditions and does not necessarily mean that credit risk on the associated

loans is higher than for loans where the distribution of possible future economic conditions is narrower.

The PD ratios ranged from 0.02% to 8.27% for Stage 1 investments and 1.41% to 27.62% for Stage 2 investments. On a weighted basis the

PD ratios for Stage 1 investments were 1.32% and for Stage 2 investments 9.03%. The PD ratios for Stage 3 investments were 100%. The

LGD ratios ranged from 12.0% to 100.0% for Stage 1 investments and 16.9% to 82.3% for Stage 2 investments. On a weighted basis the

LGD ratios for Stage 1 investments were 31.0% and for Stage 2 investments 80.5%. The LGD ratios for Stage 3 investments were 100%.

Two downside scenarios were provided as follows: the first scenario is LGD% assumed increased to 100%, in which event we calculate that

this would result in an ECL provision of £5,159,000. A further second, harsher scenario would be to assume that in addition to an LGD% of

100%, the PD% is also increased by 50%. In this case the ECL provision would be £6,544,000.

Investments held by the Company

The Company holds 100% of the equity shares of its subsidiary, AHL, which are held at cost less impairment in the Company’s Statement of

Financial Position. The Company also holds the loan notes in the Italian SPV, which are held at fair value through profit or loss in the Company’s

Statement of Financial Position.

The Company’s investments in subsidiaries comprise the following:

Company

	As at 31 December	As at 31 December
	2024	2023
	£‘000	£‘000
Investment in the Italian SPV, held at fair value through profit or loss	29,351	35,683
Investment in AHL, held at cost less impairment	9,048	9,971
Total investments	38,399	45,654

The movement in the Company’s investment in AHL was as follows:

Gross carrying amount

	For the year	For the year
	ended	ended
	31 December	31 December
	2024	2023
	£‘000	£‘000
Opening balance	11,791	–
Additions during the year	–	11,791
Closing balance	11,791	11,791
Accumulated impairment
Opening balance	(1,820)	–
Impairment loss recognised in the year	(923)	(1,820)
Closing carrying amount	9,048	9,971

5. INVESTMENT INCOME

	For the year	For the year
	ended	ended
	31 December	31 December
	2024	2023
Group	£‘000	£‘000
Investment interest income	4,679	5,027
Bank interest income	718	921
Total investment income	5,397	5,948

Company

	For the year	For the year
	ended	ended
	31 December	31 December
	2024	2023
	£‘000	£‘000
Investment interest income	3,797	3,426
Bank interest income	406	654
Total investment income	4,203	4,080

6. INVESTMENT ADVISORY FEES

		For the year ended			For the year ended
		31 December 2024			31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Group	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Investment advisory fees	647	–	647	808	–	808

		For the year ended			For the year ended
		31 December 2024			31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Company	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Investment advisory fees	647	–	647	808	–	808

Under the Investment Advisory Agreement, the following fee is payable to the Investment Adviser:

(i) 0.95 per cent. per annum of Committed Capital of the Company up to and including £500 million; and

(ii) 0.75 per cent. per annum of Committed Capital of the Company above £500 million.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

7. OTHER EXPENSES

			For the year ended			For the year ended
			31 December 2024			31 December 2023
		Revenue	Capital	Total	Revenue	Capital	Total
Group		£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Secretary and administrator fees		297	–	297	281	–	281
Tax compliance		37	–	37	62	–	62
Directors' fees		326	–	326	281	–	281
Broker’s fees		320	–	320	182	–	182
Auditors’ fees*
-	Fees payable to the Company’s auditors for
	the audit of the Company’s annual accounts	506	–	506	590	–	590
-	Fees payable to the Company’s auditors
	and its associates for other services:
	audit of the accounts of subsidiaries	27	–	27	26	–	26
AIFM fees		112	–	112	91	–	91
Registrar's fees		52	–	52	23	–	23
Marketing fees		93	–	93	104	–	104
FCA and listing fees		29	–	29	26	–	26
Investment expenses		169	–	169	332	–	332
Legal fees		169	–	169	235	–	235
Other expenses		237	–	237	259	–	259
Total other expenses		2,374	–	2,374	2,492	–	2,492

			For the year ended			For the year ended
			31 December 2024			31 December 2023
		Revenue	Capital	Total	Revenue	Capital	Total
Company		£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Secretary and administrator fees		219	–	219	199	–	199
Tax compliance		26	–	26	41	–	41
Directors' fees		228	–	228	203	–	203
Broker’s fees		320	–	320	182	–	182
Auditor's fees*
-	Fees payable to the Company’s auditors for
	the audit of the Company’s annual accounts	506	–	506	590	–	590
-	Fees payable to the Company’s auditors
	and its associates for other services:	27	–	27	26	–	26
AIFM fees		112	–	112	91	–	91
Registrar's fees		52	–	52	23	–	23
Marketing fees		93	–	93	104	–	104
FCA and listing fees		29	–	29	26	–	26
Legal fees		169	–	169	235	–	235
Other expenses		158	–	158	192	–	192
Total other expenses		1,939	–	1,939	1,912	–	1,912

* For the year to 31 December 2024, the statutory audit fees payable to the Company’s auditors and its associates for the audit of the Company and consolidated financial

statements were £325k (2023: £309k), excluding VAT. Further fees of £97k were also included in the year in relation to the statutory audit of the Company and consolidated

financial statements for the year to 31 December 2023, excluding VAT (2023: £178k in relation to the statutory audit of the Company and consolidated financial statements for

the year to 31 December 2022, excluding VAT). The audit fees payable to the Company’s auditors and its associates for the audit of the Company’s subsidiaries are £23k

(2023: £22k) excluding VAT, which was paid by the Parent entity.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

8. TAXATION

(a) Analysis of charge in the year

		For the year ended			For the year ended
		31 December 2024			31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Group	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Corporation tax	–	–	–	–	–	–
Taxation	–	–	–	–	–	–

		For the year ended			For the year ended
		31 December 2024			31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Company	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Corporation tax	–	–	–	–	–	–
Taxation	–	–	–	–	–	–

(b) Factors affecting total tax charge for the year

The tax assessed for the year is higher (2023: lower) than the Company’s applicable rate of corporation tax for the year of 25% (2023: 23.5%).

The factors affecting the current tax charge for the year are as follows

The effective UK corporation tax rate applicable to the Company for the period is 25% (2023: 23.5%). The tax charge differs from the charge

resulting from applying the standard rate of UK corporation tax for an investment trust company.

The differences are explained below:

	For the year ended 31 December 2024			For the year ended 31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Group	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
(Loss)/profit on ordinary activities before taxation	(178)	(1,849)	(2,027)	913	(609)	304
Corporation tax at 25% (2023: 23.5%)	(45)	(462)	(507)	215	(143)	72
Effects of:
Excess management expenses brought
forward	(30)	–	(30)	(320)	(35)	(355)
Deemed interest payment under income
streaming rules	(52)	–	(52)	–	–	–
Non deductible expenses	162	–	162	415	–	415
Movements on investments not allowable/
taxable	(35)	462	427	(310)	178	(132)
Tax charge for the year	–	–	–	–	–	–

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

	For the year ended 31 December 2024			For the year ended 31 December 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Company	£‘000	£‘000	£‘000	£‘000	£‘000	£‘000
Profit/(loss) on ordinary activities before taxation	694	(3,027)	(2,333)	(681)	924	243
Corporation tax at 25% (2023: 23.5%)	174	(757)	(583)	(160)	217	57
Effects of:
Excess management expenses brought
forward	(30)	–	(30)	(320)	–	(320)
Group relief	(460)	–	(460)
Deemed interest payment under income
streaming rules	(77)	–	(77)	–	–	–
Non deductible expenses	393	–	393	480	–	480
Movements on investments not allowable/
taxable	–	757	757	–	(217)	(217)
Tax charge for the year	–	–	–	–	–	–

The Company has an unrecognised deferred tax asset of £nil (2023: £89,000) based on a main rate of corporation tax of 25% (2023: 25%).

In its 2021 budget, the UK government announced that the main rate of corporation tax would increase to 25% for the fiscal year beginning

on 1 April 2023. The deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the

composition of the Company’s portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been

recognised in the financial statements.

Given the Company’s intention to meet the conditions required to retain its status as an Investment Trust Company, no provision has been

made for deferred UK capital gains tax on any capital gains or losses arising on the revaluation or disposal of investments.

9. RETURN/(LOSS) PER ORDINARY SHARE

Group

Return per share is based on the consolidated loss for the year of £2,027,000 (2023: profit of £304,000) and the weighted average number

of Ordinary Shares in issue of 88,335,524 (2023: 100,000,000) during the year. Consolidated revenue loss amounts to £178,000 (2023: profit

of £913,000) and consolidated capital loss amounts to £1,849,000 (2023: loss of £609,000).

Company

Return per share is based on the Company loss for the year of £2,333,000 (2023: profit of £243,000) and the weighted average number of

Ordinary Shares in issue of 88,335,524 (2023: 100,000,000) during the year. Company revenue profit amounts to £694,000 (2023: loss of

£681,000) and Company capital loss amounts to £3,027,000 (2023: profit of £924,000).

10. CURRENT ASSETS

		As at 31 December 2024		As at 31 December 2023
	Group	Company	Group	Company
Trade and other receivables	£‘000	£‘000	£‘000	£‘000
Trade receivables	80	56	652	255
Shareholder loan receivable	–	27,292	–	27,293
Total	80	27,348	652	27,548

At 31 December 2024, the Company had a Shareholder loan receivable from AHL in the amount of £27,292,000 (2023: £27,293,000). The

interest rate is 7.90% per annum which is then being adjusted every fourth quarter of the financial year in order for AHL to earn a gross

margin of at least 50bps from its financing activities. The loan is repayable in full on 31 December 2046.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

10. CURRENT ASSETS CONTINUED

Derivative financial instruments

		As at 31 December 2024		As at 31 December 2023
	Group	Company	Group	Company
	£‘000	£‘000	£‘000	£‘000
Forward currency contracts	–	–	122	–

The forward currency contracts outstanding at 31 December 2023 comprised the following:

Sale of euro 37,198,000 for £32,431,000 for settlement on 9 January 2024; and Sale of euro 34,834,000 for £30,362,000 for settlement on

23 February 2024.

Cash and cash equivalents

Cash and cash equivalents comprises bank balances held by the Group and Company, including short-term deposits.

The carrying amount of these represents their fair value. Cash balances in excess of a predetermined amount are placed on short-term deposit

at market rates of interest.

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Payables

		As at 31 December 2024		As at 31 December 2023
	Group	Company	Group	Company
	£‘000	£‘000	£‘000	£‘000
Intercompany balance with Attika Holdings Limited	–	2,443	–	–
Accrued expenses	1,094	968	1,016	874
Unsettled trades	43	–	41	–
Total	1,137	3,411	1,057	874

Derivative financial instruments

		As at 31 December 2024		As at 31 December 2023
	Group	Company	Group	Company
	£‘000	£‘000	£‘000	£‘000
Forward currency contracts	24	–	–	–

The forward currency contracts outstanding at the year end comprised the following:

Sale of euro 38,000,000 for £31,411,000 for settlement on 21 January 2025; and Sale of euro 28,900,000 for £24,212,000 for settlement

on 28 February 2025.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

12. SHARE CAPITAL

	As at	As at
	31 December	31 December
	2024	2023
	£‘000	£‘000
Allotted, issued and fully paid:
Ordinary Shares of 1p each Opening balance of 100,000,000 Ordinary Shares	1,000	1,000
Repurchase and cancellation of 18,561,732 (2023: nil) Ordinary Shares following a Tender Offer	(186)	–
Closing balance of 81,438,268 (2023: 100,000,000) Ordinary Shares	814	1,000

The Ordinary Shares rank pari passu and each share carries one vote in the event of a poll at a general meeting.

Following a Tender Offer during the year, the Company repurchased and cancelled 18,561,732 of its own Ordinary Shares, nominal value

£185,617 for a total consideration of £17,500,000, representing 18.6% of the Ordinary Shares outstanding at the beginning of the year.

13. RESERVES

Group

	Capital
	redemption	Special	Capital	Revenue
	reserve	reserve	reserve	reserve
	£‘000	£‘000	£‘000	£‘000
At 1 January 2024	–	93,500	(178)	(41)
Repurchase and cancellation of Ordinary Shares following a Tender Offer	186	(17,5 00)	–	–
Expenses of Tender Offer	–	(88)	–	–
Dividends paid	–	(4,999)	–	–
Loss on ordinary activities after taxation	–	–	(1,849)	(178)
At 31 December 2024	186	70,913	(2,027)	(219)

	Capital
	redemption	Special	Capital	Revenue
	reserve 1	reserve 2	reserve 3	reserve 4
Company	£‘000	£‘000	£‘000	£‘000
At 1 January 2024	–	93,500	2,923	(2,547)
Repurchase and cancellation of Ordinary Shares following a Tender Offer	186	(17,5 00)	–	–
Expenses of Tender Offer	–	(88)	–	–
Dividends paid	–	(4,999)	–	–
(Loss)/profit on ordinary activities after taxation	–	–	(3,027)	694
At 31 December 2024	186	70,913	(104)	(1,853)

The Company’s Articles of Association permit dividend distributions out of realised capital profits.

The capital redemption reserve represents the accumulated nominal value of shares repurchased for cancellation. This reserve is not distributable.

The special reserve arose following the cancellation of the share premium account in 2021. As a result, this became a distributable reserve

and may be used to repurchase the Company’s own Ordinary Shares or distributed as dividends.

The capital reserve comprises realised and unrealised gains and losses on investments and foreign currency. An analysis has not been made

between those that are realised (and may be distributed as dividends or used to repurchase the Company’s own Ordinary Shares) and those

that are unrealised.

The revenue reserve may be distributed as dividends or used to repurchase the Company’s own Ordinary Shares. The balance on the Company’s

revenue reserve is currently negative and therefore no distribution can be made.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

14. NET ASSET VALUE PER ORDINARY SHARE

The Group’s net asset value per Ordinary Share as at 31 December 2024 is based on the £69,667,000 (2023: £94,281,000) net assets of the

Group attributable to the 81,438,268 (2023: 100,000,000) Ordinary Shares in issue as at 31 December 2024.

The Company’s net asset value per Ordinary Share as at 31 December 2024 is based on the £69,956,000 (2023: £94,876,000) net assets of

the Company attributable to the 81,438,268 (2023: 100,000,000) Ordinary Shares in issue as at 31 December 2024.

15. DIVIDENDS

The Company has paid the following interim dividend in respect of the year under review:

	For the year ended		For the year ended
	31 December 2024		31 December 2023
	Pence per	Total	Pence per	Total
Dividend paid in the year	Ordinary Share	£‘000	Ordinary Share	£‘000
Interim – paid 1 November 2024	6.139p	4,999	–	–
Total	6. 1 39p	4,999	–	–

The Company is not required to pay a dividend in respect of the current or prior year in order to satisfy the requirements of Section 1159 of

the Corporation Tax Act 2010, as it has a negative balance on its revenue reserve. The above dividend was paid out of the special reserve.

The Company paid an of 1.25p per share, amounting to £1,250,000 on 20 March 2023, in respect of the year ended 31 December 2022.

16. FINANCIAL RISK MANAGEMENT

The Investment Adviser, AIFM and the Administrator report to the Board on a quarterly basis and provide information to the Board which

allows it to monitor and manage financial risks relating to the Group’s operations. The Group’s activities expose it to a variety of financial

risks: market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. These risks are monitored by the

AIFM. Each risk and its management are summarised below.

(i) Currency risk

Foreign currency risk is defined as the risk that the fair values of future cashflows will fluctuate because of changes in foreign exchange rates.

The Group’s and the Company’s financial assets and liabilities are denominated in sterling and the euro and substantially all of its revenues

and expenses are in sterling and the euro. The Group and the Company are therefore exposed to foreign currency risk.

For any non-base currency assets, the Investment Adviser can use forward foreign exchange contracts to seek to hedge up to 100% of

non-sterling exposure.

The Company does not intend to use hedging or derivatives for investment purposes but may use derivative instruments such as forwards,

options, future contracts and swaps to hedge currency, inflation, interest rates, commodity prices and/or electricity prices.

With many of its investment assets denominated in the euro, the Group uses a series of regular forward foreign exchange contracts to provide

a level of protection against movement in the sterling exchange rate. Under these arrangements the Group is required to provide £2.5 million

in cash as collateral for these forward foreign exchange contracts. Following the failure of the Continuation vote, the Group is currently

reviewing the strategic options for realising value for Shareholders. The Board will consider the appropriateness of the current hedging

arrangements and the cash collateral as part of the review of strategic options and in light of the cash requirements of the Group.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The currency profile of the Group as at 31 December 2024 is as follows:

		31 December 2024			31 December 2023
	GBP	EUR	Total	GBP	EUR	Total
Assets	£’000	£’000	£’000	£’000	£’000	£’000
Cash and cash equivalents	7,358	7,059	14,417	23,547	5,535	29,082
Trade and other receivables	56	24	80	159	493	652
Derivative financial	–	–	–	122	–	122
instruments
Investments	3,021	53,310	56,331	3,566	61,916	65,482
Total assets	10,435	60,393	70,828	27,394	67,944	95,338
Liabilities
Creditors	(986)	(151)	(1,137)	(901)	(156)	(1,057)
Derivative financial	(24)	–	(24)	–	–	–
instruments
Total liabilities	(1,010)	(151)	(1,161)	(901)	(156)	(1,057)

If the value of sterling against euro increased or decreased by 10% (2023: 10%), if all other variables remained constant, the NAV of the Group

would increase or decrease by £6,039,000 (2023: £6,794,000) without taking account of the Group’s forward foreign exchange contracts.

The currency profile of the Company as at 31 December 2024 is as follows:

		31 December 2024			31 December 2023
	GBP	EUR	Total	GBP	EUR	Total
Assets	£’000	£’000	£’000	£’000	£’000	£’000
Cash and cash equivalents	3,957	3,663	7,620	19,884	2,664	22,548
Shareholder loan receivable	27, 292	–	27,292	27, 293	–	27,293
Trade and other receivables	56	–	56	255	–	255
Investments in subsidiaries	9,048	29,351	38,399	9,971	35,683	45,654
Total assets	40,353	33,014	73,367	57,403	38,347	95,750
Liabilities
Intercompany balance with Attika Holdings Limited	(2,443)	–	(2,443)	–	–	–
Accrued expenses	(968)	–	(968)	(874)	–	(874)
Total liabilities	(3,411)	–	(3,411)	(874)	–	(874)

If the value of the sterling against euro increased or decreased by 10% (2023: 10%), if all other variables remained constant, the NAV of the

Group would increase or decrease by £3,301,000 (2023: £3,835,000).

(ii) Interest rate risk

The Group’s interest rate risk on interest bearing financial assets is limited to interest earned on cash and investments. The interest rates of

investments held at amortised cost are fixed therefore the interest rate risk is minimal. Investments held at fair value through profit or loss

have variable returns based on e.g. power production levels and not on variability in interest rates.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

16. FINANCIAL RISK MANAGEMENT CONTINUED

The Group’s interest and non-interest bearing assets and liabilities as at 31 December 2024 are summarised below:

		31 December 2024			31 December 2023
	Interest	Non-interest		Interest	Non-interest
	bearing	bearing	Total	bearing	bearing	Total
Assets	£’000	£’000	£’000	£’000	£’000	£’000
Cash and cash equivalents	9,121	5,296	14,417	27,817	1,265	29,082
Trade and other receivables	–	80	80	–	652	652
Derivative financial	–	–	–	–	122	122
instruments
Investments	46,309	10,022	56,331	54,990	10,492	65,482
Total assets	55,430	15,398	70,828	82,807	12,531	95,338
Liabilities
Creditors	–	(1,137)	(1,137)	–	(1,057)	(1,057)
Derivative financial	–	(24)	(24)	–	–	–
Instruments
Total liabilities	–	(1,161)	(1,161)	–	(1,057)	(1,057)

The Company’s interest and non-interest-bearing assets and liabilities as at 31 December in each reporting year are summarised below:

		31 December 2024			31 December 2023
	Interest	Non-interest		Interest	Non-interest
	bearing	bearing	Total	bearing	bearing	Total
Assets	£’000	£’000	£’000	£’000	£’000	£’000
Cash and cash equivalents	3,971	3,649	7,620	21,606	942	22,548
Trade and other receivables	–	56	56	–	255	255
Shareholder loan receivable	27,292	–	27,292	27,293	–	27, 293
Investments in subsidiaries	29,351	9,048	38,399	35,683	9,971	45,654
Total assets	60,614	12,753	73,367	84,582	11,168	95,750
Liabilities
Intercompany balance with Attika Holdings Limited	–	(2,443)	(2,443)	–	–	–
Accrued expenses	–	(968)	(968)	–	(874)	(874)
Total liabilities	–	(3,411)	(3,411)	–	(874)	(874)

(iii) Price risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Group will fluctuate. As of 31 December 2024 the Group

held investments at fair value through profit or loss with an aggregate fair value of £10,022,000 (2023: £10,492,000). All other things being

equal, the effect of a 10% increase or decrease in the prices of the investments held at the year-end would have been an increase or decrease

of £1,002,000 (2023: £1,049,000) in the profit after taxation for the year ended 31 December 2024 and the Group’s net assets at 31 December

2024. The sensitivity of the investment valuation due to price risk is shown further in note 4.

As of 31 December 2024 the Company held investments at fair value through profit or loss with an aggregate fair value of £29,351,000 (2023:

£35,683,000). All other things being equal, the effect of a 10% increase or decrease in the prices of the investments held at the year-end

would have been an increase or decrease of £2,935,000 (2023: £3,568,000) in the profit after taxation for the year ended 31 December 2024

and the Company’s net assets at 31 December 2024.

(iv) Credit risk

Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Group and the Company

is exposed to credit risk in respect of the investments valued at amortised cost, interest income receivable and other receivables and cash at

bank. The Group and the Company’s credit risk exposure is minimised by dealing with financial institutions with investment grade credit ratings.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Continued monitoring of the investments and the counterparties/service providers, including the use of credit rating data providers, allows

the Investment Adviser to identify and address these risks early. Where possible, the Investment Adviser seeks to mitigate credit risks by the

counterparty having the opportunity to sell electricity to the grid or other customers. The Investment Adviser also seeks to structure investments

whereby contracts can be adapted/extended to accommodate periods of payment defaults. Diversification of counterparties and service

providers ensures any impact is limited. In addition, a diversified portfolio provides further mitigation.

The table below shows the cash balances of the Group and the Company as well as the credit rating for each counterparty:

			As at 31 December 2024		As at 31 December 2023
		Company	Group	Company	Group
	Rating	£’000	£’000	£’000	£’000
Goldman Sachs-Liquid Reserves Fund	AAAmmf (Fitch	249	249	6,632	6,632
	Rating)
EFG Deposit account	A (Fitch Rating)	7,333	9,000	15,858	19,248
Royal Bank of Scotland International	A+ (Fitch Rating)	38	5,013	58	2,998
Bank of New York Mellon	AA (Fitch Rating)	–	155	–	204
		7,620	14,417	22,548	29,082

The table below shows the amortised cost investment balances of the Group as well as the credit rating for each counterparty:

	As at	As at
	31 December	31 December
	2024	2023
Group	£‘000	£‘000
A	4,346	5,871
B	33,865	31,890
C	8,098	16,509
D	–	720
	46,309	54,990

The Group and the Company classified each project using a certain credit risk band. Listed below are the conversion methodology used:

	Corresponding
Credit risk band	S&P rating range
A	AAA to A-
B	BBB+ to BBB-
C BB to CC- D Default

(v) Liquidity risks

Liquidity risk is the risk that the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Adviser,

AIFM and the Board continuously monitor forecast and actual cashflows from operating, financing and investing activities to consider payment

of dividends or further investing activities.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

16. FINANCIAL RISK MANAGEMENT CONTINUED

The financial liabilities by maturity of the Group at the year-end are shown below:

	31 December	31 December
	2024	2023
	Less than 1 year	Less than 1 year
	£’000	£’000
Liabilities
Payables	(1,137)	(1,057)
Derivative financial instruments	(24)	–
	(1,161)	(1,057)

The financial liabilities by maturity of the Company at the year-end are shown below:

	31 December	31 December
	2024	2023
	Less than 1 year	Less than 1 year
	£’000	£’000
Liabilities
Payables	(3, 411)	(874)
	(3,411)	(874)

As at 31 December 2024, the Group has total commitments of £0.04 million (31 December 2023: £5.26 million) to its investments which

are unfunded.

Capital management

The Company considers its capital to comprise ordinary share capital, distributable reserves and retained earnings. The Company is not subject

to any externally imposed capital requirements.

The Company’s primary capital management objectives are to ensure the sustainability of its capital to support continuing operations, meet

its financial obligations and allow for growth opportunities. Generally, acquisitions are anticipated to be funded by a combination of current

cash and equity.

17. TRANSACTIONS WITH THE INVESTMENT ADVISER

Aquila Capital Investmentgesellchaft has been appointed as the Investment Adviser to the Company and full details of the Investment Advisory

Agreement are given in the Directors’ Report on page 29. Investment advisory fees payable in respect of the year ended 31 December 2024

amounted to £647,000 (2023: £808,000), of which £319,000 (2023: £361,000) was outstanding at the year end.

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

18. RELATED PARTY TRANSACTIONS

Directors

Details of the remuneration payable to Directors and details of Directors’ shareholdings are given in the Directors’ Remuneration Report on

page 45 and page 46 respectively.

Subsidiary and wholly owned entity

The following table includes details of the subsidiary and other wholly owned entity of the Company. Further details of these are given in

notes 1 and 2 to the accounts. Transactions with these entities have been carried out at arm’s length. The Company has prepared consolidated

accounts, which incorporate these two entities.

Entity name and registered address	Effective ownership	Investment	Country of incorporation
Attika Holdings Limited	100%	HoldCo Subsidiary entity,	United Kingdom
Leaf B, 20th Floor, Tower 42, Old Broad Street,		which owns underlying
London, England, EC2N 1HQ		investments
Compartment 2 of SPV Project 2013 S.r.l.	100% of the notes of one	Special purpose entity,	Italy
Via Vittorio Betteloni, 2 20131, Milan, Italy	compartment	which owns underlying
		investments.

Transaction with the subsidiary

At 31 December 2024, the Company had a Shareholder loan receiveble from its subsidiary, Attika Holdings Limited (“AHL”), amounting to

£27,292,000 (2023: £27,293,000). Under the terms of the loan agreement, the initial interest rate is is 7.9% per annum, which is then adjusted

every fourth quarter of the financial year in order for AHL to earn a gross margin of at least 50 basis points from its financing activities. The

loan is repayable in full on 31 December 2046.

At 31 December 2024, the Company had an intercompany balance payable to AHL, amounting to £2,443,000 (2023: nil).

19. EVENTS AFTER THE ACCOUNTING DATE

The following events occurred after the accounting date, and for which no adjustments have been made in the financial statements:

On 28 February 2025, the Group received £7.0 million from the disposal of its investment in Bio-LNG, in addition to a quarterly receipt of £0.5

million in January 2025.

In February and March 2025, the Board entered agreements for the repayment of three of the Group’s five Superbonus investments, for a

total consideration of £19.3 million, of which £16.3 million had been received by 31 March 2025.

OTHER INFORMATION (UNAUDITED)

In reporting financial information, the Company presents alternative performance measures, “APMs”, which are not defined or specified under the

requirements of IFRS. These APM’s are commonly used by investment companies to assess values, investment performance and operating costs.

There have been no changes in these APMs from the prior year. The APMs presented in this report are shown below, together with supporting

numerical calculations.

(Discount)/premium

The amount by which the share price of an investment trust is lower (discount) or higher (premium) than the NAV per share. The discount or

premium is expressed as a percentage of the NAV per share.

Page

As at

31 December

2024

As at

31 December

2023

NAV per Ordinary Share (pence) a

3 85.55 94.28

Share price (pence)

3 52.00 57.25

Discount (%) (b÷a) -1 (39.2) (39.3)

Ongoing charges

A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company. Theaverage

net assets has been computed as the average of the published NAV for 31 December 2023, 30 June 2024 and 31 December 2024.

Page

As at

31 December

2024

As at

31 December

2023

Average NAV (£‘000) a

n/a 80,459 94,349

Annualised expenses (£’000)

n/a

3,021

3,300

Ongoing charges (%) (b÷a) 3.8 3.5

Figure includes Investment Advisory fees and Other expenses as disclosed in the Consolidated Statement of Profit or Loss and Comprehensive

Income.

Total return

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends

paid out by the Company into the Ordinary Shares of the Company on the ex- dividend date.

Year ended 31 December 2024 Page NAV per share Share price

Opening at 1 January 2024 (pence) a

n/a 94.28 57.25

Dividend adjustment (pence) b

n/a 6.14 6.14

Closing at 31 December 2024 (pence)

85.55

52.00

Total (loss)/return (%) ((c+b)÷a)-1 (2.7) 1.6

Year ended 31 December 2023 Page NAV per share Share price

Opening at 1 January 2023 (pence) a

n/a 95.23 71.00

Dividend adjustment (pence) b

n/a

1.25 1.25

Closing at 31 December 2023 (pence)

94.28

57.25

Total return/(loss) (%) ((c+b)÷a)-1 0.3 (17.6)

ALTERNATIVE PERFORMANCE MEASURES OF THE GROUP

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

AIC

Association of Investment Companies.

Alternative Investment Fund or “AIF”

An investment vehicle under AIFMD. Under AIFMD (see below) Aquila

Energy Efficiency Trust Plc is classified as an AIF.

Alternative Investment Fund Managers Directive or “AIFMD”

A European Union directive which came into force on 22 July 2013 and

has been implemented in the UK.

Annual General Meeting or “AGM”

A meeting held once a year which Shareholders can attend and where

they can vote on resolutions to be put forward at the meeting and ask

directors questions about the company in which they are invested.

the Company

Aquila Energy Efficiency Trust Plc.

(Discount)/Premium

The amount by which the share price of an investment trust is lower

(discount) or higher (premium) than the NAV per share. The discount

or premium is expressed as a percentage of the NAV per share.

Dividend

Income receivable from an investment in shares.

Ex-dividend date

The date from which you are not entitled to receive a dividend which

has been declared and is due to be paid to Shareholders.

ECL

Expected Credit Loss

EMEA

Europe, the Middle East and Africa.

ESCO

Energy Service Company.

European Union.

Financial Conduct Authority or “FCA”

The independent body that regulates the financial services industry in

the UK.

Gearing

A way to magnify income and capital returns, but which can also magnify

losses. A bank loan is a common method of gearing. See also “leverage”

below.

Gearing effect

The effect of borrowing on a company’s returns.

General Meeting ‘‘GM’’

A meeting which Shareholders can attend and where they can vote on

resolutions to be put forward at the meeting and ask directors questions

about the company in which they are invested.

Gross Asset Value

The sum of the value of the assets a company owns.

the Group

Aquila Energy Efficiency Trust Plc and its subsidiaries, Attika Holdings

Limited and SPV Project 2013 S.r.l.

GWh

Gigawatt hour.

The Holdco

Attika Holdings Limited (“AHL” or “Attika”).

IEA

International Energy Agency.

Index

A basket of stocks which is considered to replicate a particular stock

market or sector.

Investment company

A company formed to invest in a diversified portfolio of assets.

IPO

Initial Public Offering.

Investment Trust

An investment company which is based in the UK and which meets

certain tax conditions which enables it to be exempt from UK corporation

tax on its capital gains. The Company is an investment trust.

IRR

Internal rate of return.

GLOSSARY

Leverage

An alternative word for “Gearing”.

Under AIFMD, leverage is any method by which the exposure of an AIF

is increased through borrowing of cash or securities or leverage embedded

in derivative positions.

Under AIFMD, leverage is broadly similar to gearing, but is expressed

as a ratio between the assets (excluding borrowings) and the net assets

(after taking account of borrowing). Under the gross method, exposure

represents the sum of a company’s positions after deduction of cash

balances, without taking account of any hedging or netting arrangements.

Under the commitment method, exposure is calculated without the

deduction of cash balances and after certain hedging and netting

positions are offset against each other.

Liquidity

The extent to which investments can be sold at short notice.

Net assets or net asset value (‘NAV’)

An investment company’s assets less its liabilities.

NAV per Ordinary Share

Net assets divided by the number of Ordinary Shares in issue (excluding

any shares held in treasury).

Ongoing charges

A measure of the regular, recurring annual costs of running an investment

company, expressed as a percentage of average net assets.

Ordinary Shares

The Company’s ordinary shares in issue.

Portfolio

A collection of different investments held in order to deliver returns to

Shareholders and to spread risk.

Share buyback

A purchase of a company’s own shares. Shares can either be bought

back for cancellation or held in treasury.

Share price

The price of a share as determined by a relevant stock market.

Total return

A measure of performance that takes into account both income and

capital returns. This may take into account capital gains, dividends,

interests and other realised variables over a given period of time.

GLOSSARY

CONTINUED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Corinne Sayers

From: Sinead Van Duuren <sinead.vanduuren@apexgroup.com>

Sent: 28 March 2025 13:15

To: Corinne Sayers; Typesetting; aeetcosecmbx@sannegroup.com; Jeremy Jones;

Sylvanus Cofie; Grace Goudar; Phil Austen; Tania Austen

Subject: RE: 270403 AEET

Attachments: AEET- Annual Report 2024 Draft 5 Blackline 28 March - sent to Perivan.docx; SFDR

Periodic Disclosure Template_Article 8_ENG-AEET-2025-03-31_v4.pdf

Dear Perivan,

We have been tracking the Word document that we sent to you for production of proof 1 with updates

(as we needed to record further updates before we received Proof 1). Would it be possible to make

these updates to the ﬁrst proof this afternoon and send us a Blackline and Clean Proof 2 today?

I am also expecting to be able to send you some minor updates to the back half this afternoon. These

will be provided as manuscript updates to the ﬁrst proof that you provided yesterday.

I also attach an SFDR Periodic Disclosure document, which is required to be included as an Annex to

the Annual Report. Please can you add at the end of the Annual Report, before the Company

Information Page. Please add the below heading at the top of the ﬁrst Annex page:

I am available on 07941 948145 if you have any questions at all.

With thanks in advance.

Kind regards,

Sinead

Van

Duuren

Company Secretary, Listed Funds Team

+44 20 8078 0534

sinead.vanduuren@apexgroup.com

From: Corinne Sayers <csayers@perivan.com>

Sent: Thursday, March 27, 2025 2:46 PM

To: Sinead Van Duuren <sinead.vanduuren@apexgroup.com>; Typesetting <typesetting@perivan.com>;

aeetcosecmbx@sannegroup.com <aeetcosecmbx@apexgroup.com>; Jeremy Jones

<jeremy.jones@apexgroup.com>; Sylvanus Cofie <sylvanus.cofie@apexgroup.com>; Grace Goudar

<Grace.Goudar@apexgroup.com>; Phil Austen <PAusten@perivan.com>; Tania Austen <tausten@perivan.com>

Subject: RE: 270403 AEET

CAUTION: This email originated from outside of the organisation. Do not click links or open attachments unless you recognise

the sender and know the content is safe.

ANNEX IV

Template periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and

2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852

Product name: Aquila Energy Efficiency Trust PLC Legal entity identifier: 213800AJ3TY3OJCQQC53

Environmental and/or social characteristics

To what extent were the environmental and/or social characteristics promoted

by this financial product met?

During the reference period, the Fund was invested in multiple

energy efficiency projects, thereby promoting the environmental characteristics of the Fund - climate change

mitigation. The Fund has used derivatives for hedging purposes only and the promoted environmental

characteristics were not affected by the use of derivatives.

How did the sustainability indicators perform? The sustainability indicators that were

defined to measure the attainment of environmental characteristics are a) energy savings, and b) the

avoidance of GHG emissions in t of CO2eq. Over the course of the reference period, the Fund's assets

enabled energy savings of 19,581 MWh and avoided 5,285 t CO2 eq emissions.

Did this financial product have a sustainable investment objective?

Yes

It made

sustainable

investments with an

environmental objective: ___%

in economic activities that

qualify as environmentally

sustainable under the EU

Taxonomy

in economic activities that do

not qualify as environmentally

sustainable under the EU

Taxonomy

promoted Environmental/Social (E/S)

characteristics and

while it did not have as its objective a

sustainable investment, it had a proportion of

___% of sustainable investments

with an environmental objective in economic

activities that qualify as environmentally

sustainable under the EU Taxonomy

with an environmental objective in

economic activities that do not qualify as

environmentally sustainable under the EU

Taxonomy

with a social objective

It made sustainable investments

with a social objective: ___%

It promoted E/S characteristics, but did not

make any sustainable investments

Sustainable

investment means

an investment in an

economic activity

that contributes to

an environmental or

social objective,

provided that the

investment does not

significantly harm

any environmental or

social objective and

that the investee

companies follow

good governance

practices.

The EU Taxonomy is

a classification

system laid down in

Regulation (EU)

2020/852,

establishing a list of

environmentally

sustainable

economic activities.

That Regulation

does not include a

list of socially

sustainable

economic activities.

Sustainable

investments with an

environmental

objective might be

aligned with the

Taxonomy or not.

Sustainability

indicators measure

how the

environmental or

social

characteristics

promoted by the

financial product

are attained.

THIS DOES NOT FORM PART OF THE FINANCIAL STATEMENTS AND IS UNAUDITED

…and compared to previous periods? Over the course of the reference period, the Fund's

assets deployed into more energy efficiency investments, however enabled 4,058 MWh less of

energy savings and avoided 1,281t less CO2eq emissions.

This decrease is due to the failure of the sub-metering investment in Germany where it is assumed

that all savings were lost and due to excluding savings after certain other investments were fully

realised.

What were the top investments of this financial product?

What was the proportion of sustainability-related investments?

What was the asset allocation? At least 90% of the investments made during the reporting

period have been made in the category #1B. The investments under the category #2 Other only

included instruments used for liquidity and/or risk management purposes.

In which economic sectors were the investments made? The investments made under

#1B are part of the following sectors:

Energy efficiency

Largest investments Sector % Assets Country

Water

management services

Energy

15.8% Germany

Biogas

Energy

12.9% Germany

Building energy efficiency

-1

Energy

12.7% Italy

Building energy efficiency

-2

Energy

12.6% Italy

Building energy efficiency

-3

Energy

10.9% Italy

Building energy efficiency

-4

Energy

7.6% Italy

Solar PV

Energy

5.0% Spain

Building energy efficiency

-5

Energy

4.0% Spain

Asset allocation

describes the

share of

investments in

specific assets.

1 Aligned with E/S characteristics includes the investments of the financial product used to attain the

environmental or social characteristics promoted by the financial product.

#2Other includes the remaining investments of the financial product which are neither aligned with the

environmental or social characteristics, nor are qualified as sustainable investments.

Investments

#1 Aligned with E/S

characteristics

#1B Other E/S

characteristics

#2 Other

The list includes the

investments

constituting the

greatest proportion

of investments of

the financial product

during the reference

period which is:

1.1.2024-31.12.2024

APPENDIX

CONTINUED

THIS DOES NOT FORM PART OF THE FINANCIAL STATEMENTS AND IS UNAUDITED

STRATEGIC REPORT

GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

To what extent were the sustainable investments with an environmental

objective aligned with the EU Taxonomy?

The Fund did not make any Taxonomy-aligned

investments.

Did the financial product invest in fossil gas and/or nuclear energy related

activities complying with the EU Taxonomy

Yes:

fossil gas In nuclear energy

What was the share of investments made in transitional and enabling activities?

Since the fund did not make any sustainable investments, the minimum share of investments in

transitional activities is 0% and the minimum share of investments in enabling activities is 0% as well.

Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to

limiting climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective -

see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities

that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214.

The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy.

As there is no appropriate methodology to determine the taxonomy-alignment of sovereign bonds*, the

first graph shows the Taxonomy alignment in relation to all the investments of the financial product

including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the

investments of the financial product other than sovereign bonds.

* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

100%

OpEx

CapEx

Turnover

0% 50% 100%

1. Taxonomy-alignment of investments

including sovereign bonds*

Taxonomy-aligned (no gas and nuclear)

Non Taxonomy-aligned

Taxonomy-aligned

activities are

expressed as a share

of:

- turnover

reflecting the

share of revenue

from green

activities of

investee

companies.

- capital

expenditure

(CapEx) showing

the green

investments made

by investee

companies, e.g. for

a transition to a

green economy.

- operational

expenditure

(OpEx) reflecting

green operational

activities of

investee

companies.

100%

OpEx

CapEx

Turnover

0% 50% 100%

2. Taxonomy-alignment of investments

excluding sovereign bonds*

Taxonomy-aligned (no gas and nuclear)

Non Taxonomy-aligned

This graph represents 100% of the total investments.

How did the percentage of investments that were aligned with the EU Taxonomy

compare with previous reference periods?

No change

What investments were included under “other”, what was their purpose and

were there any minimum environmental or social safeguards?

Investments that fall under the category "Other" only included instruments used for liquidity and/or

risk management purposes and did not affect the promotion of environmental characteristics of the

Fund.

What actions have been taken to meet the environmental and/or social

characteristics during the reference period?

Since the Fund has invested in energy efficiency

projects during the reference period, thereby promoting the environmental characteristics of the Fund, no

further actions were required to meet the environmental characteristics.

APPENDIX

CONTINUED

THIS DOES NOT FORM PART OF THE FINANCIAL STATEMENTS AND IS UNAUDITED

INVESTING WITH IMPACT

ANNUAL REPORT 2024

Directors (all non-executive)

Miriam Greenwood OBE DL (Chair)

Nicholas Bliss

David Fletcher

Janine Freeman

Registered office

(Registered in England and Wales with

Company number. 13324616)

4th Floor

140 Aldersgate Street

London

England

EC1A 4HY

AIFM

FundRock Management Company (Guernsey) Limited

Sarnia House

Le Truchot

St Peter Port

Guernsey

GY1 1GR

Investment Adviser

Aquila Capital Investmentgesellschaft mbH

Valentinskamp 70

D-20335

Hamburg

Germany

Broker

Stifel Nicolaus Europe Limited

150 Cheapside

London

EC2V 6ET

Administrator and Company Secretary

Apex Listed Companies Services (UK) Limited

4th Floor, 140 Aldersgate Street

London

England

EC1A 4HY

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6AH

Independent Auditors

PricewaterhouseCoopers LLP

7 More London Riverside

London

SE1 2RT