ENABLING THE ENERGY TRANSITION

VH Global Sustainable Energy Opportunities plc

Annual Report and Accounts

For the period ended 31 December 2021

VH Global Sustainable Energy Opportunities plc Annual Report and Accounts For the period ended 31 December 2021

Our investment objective is

to generate stable returns,

principally in the form of

income distributions, by

investing in a diversiﬁ ed

portfolio of global

sustainable energy

infrastructure assets

OUR PURPOSE

CONTENTS

Overview

1 Highlights

Strategic Report

2 Chair’s Statement

6 At a glance

8 Business model and strategy

12 Investment Adviser’s Report

26 Key Performance Indicators

Sustainability

28 Our approach to ESG

Finance Stability Board Task Force on

Climate Related Financial Disclosures

(TCFD)

41 ESG performance

47 Section 172 & stakeholders

48 Principal risks and uncertainties

53 Going concern and viability statement

Governance

54 Governance at a glance

56 Meet the Board

57 Meet the Investment Adviser

58 Corporate governance statement

62 Remuneration Policy

63 Directors’ Remuneration Report

65 Report of the Nomination Committee

66 Report of the Audit Committee

Report of the Management Engagement

Committee

71 Directors’ Report

74 Statement of Directors’ Responsibilities

Financial Statements

Independent Auditors’ Report to the members

of VH Global Sustainable Energy Opportunities plc

82 Statement of Comprehensive Income

83 Statement of Financial Position

84 Statement of Changes in Shareholders’ Equity

85 Statement of Cash Flows

86 Notes to the Financial Statements

101 Alternative Performance Measures

Additional Information

102 Glossary

103 Key Company Information

104 Notice of Annual General Meeting

109 Appendix - Application of AIC Code Principles

Annual Report and Accounts 2021

Strategic Report

About the Company

ESG metrics

HIGHLIGHTS

VH Global Sustainable Energy Opportunities plc

(‘GSEO’ or ‘the Company’) is a closed-ended

investment company.

The Company’s investment objective is to seek to

generate stable returns, principally in the form of

income distributions, by investing in a diversifi ed

portfolio of global sustainable energy infrastructure

assets, predominantly in countries that are

members of the EU, OECD, OECD Key Partner

Countries or OECD Accession Countries.

The Company’s investment policy states that it aims

to achieve diversifi cation principally by making a

range of sustainable energy infrastructure

investments across a number of distinct

geographies and a mix of proven technologies that

align with the UN Sustainable Development Goals

(‘SDGs’) where the investments are a direct

contributor to the acceleration of the energy

transition towards a net-zero carbon world.

The Company’s investment in proven technologies

will include exposure to power generation

(renewable and conventional), biomass,

transmission, distribution, storage and waste-to-

energy. These investments will be operational, in

construction or ‘ready-to-build’ but will not include

assets that are under development or in pre-

consent stage.

No investment will be made in extraction projects

involving either fossil fuels or minerals.

26,328t

Estimated tonnes of carbon avoided

224,570 MWh

Forecast clean energy generation

Financial

£242.6m

Capital raised at IPO

£70.0m

Further fundraising on 3 December 2021

104.0p

Net Asset Value per share

1.42%

Ongoing Charges Ratio

£323.9m

Net Asset Value on an IFRS basis

8.3%

Total shareholder return

1.25p

Dividend declared and paid on 10 December 2021

Number of assets globally

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

As at 31 December 2021.

Alternative Performance Measures are defined on page 101.

Sustainability metrics are described in pages 38 to 45.

Annual Report and Accounts 2021

Strategic Report

CHAIR’S STATEMENT

Enabling

theEner gy

Transition

n behalf of the Board I

am pleased to present

this fi rst annual report

for VH Global

Sustainable Energy

Opportunities plc

(“GSEO” or “the Company”) for the period

from incorporation on 30 October 2020

to 31 December 2021 (the “Annual

Report”).

Following the Company’s successful IPO

on 2 February 2021, GSEO represents the

fi rst publicly listed investment trust in

the UK with a global focus on the energy

transition. The Board has appointed

Victory Hill Capital Advisors LLP (“Victory

Hill”) as Investment Adviser to the

Company.

Since IPO, the Investment Adviser has

substantially deployed or committed to

the ‘enhanced pipeline’ of assets as

showcased in the Prospectus and was

able to go back to market to raise

additional funds within ten months of

listing. We were delighted to welcome

such a broad range of shareholders to

the register on both occasions.

Since launch, we have been busy

implementing the strategy by identifying

and investing in energy transition assets

that comply with our return targets and

Sustainable Development Goals strategy,

but in doing this, contributing towards

the low carbon transition and assisting in

the acceleration of net zero targets

around the world.

Th e Company has had a busy fi rst year. Th e Board

has been pleased to see the funds deployed quickly

and with rigorous assessment into a very diverse

set of technologies and geographies, but always

with a fi rm focus on improving lives through the

UN Sustainable Development Goals.”

BERNARD BULKIN, PHD, OBE

CHAIR

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

COVID-19

Despite the coronavirus pandemic

continuing to disrupt the global economy

throughout the period, there has been a

very limited impact on the Company’s

assets. While supply chains have been

materially aff ected, close cooperation

with construction partners and suppliers

has ensured that our construction assets

have continued to proceed broadly

in-line with expectations. In parallel, the

Company has continued to deploy capital

whilst originating a new pipeline.

During the COVID-19 pandemic, we have

taken comprehensive steps to support

and protect employees, contractors and

project stakeholders. We are privileged

in that the nature of our work has

allowed those assets that are operating

to continue uninterrupted. During the

pandemic, lockdowns have led to large

changes in the way businesses function.

In spite of this, the Board has been able

to meet virtually to consider investments

and corporate governance, while the

Investment Adviser, AIFM, Administrator

and other key service providers have

been able to operate eff ectively with

staff working from home using secure IT

systems.

Financial performance

This was the Company’s fi rst fi nancial

period. Following incorporation on

30 October 2020, the Company

commenced its operations on 2 February

2021 when the Company listed. Profi t for

the period before tax was £20.3m and

earnings per share were 10.5p. The

Company’s net asset value (“NAV”) as at

31 December was £323.9m or equivalent

to 104p per ordinary share. This NAV per

Ordinary Share represents a 4.2%

increase from the previous quarter’s

NAV. This increase was predominantly

due to an uplift in the portfolio

revaluation of the US terminals.

Given the global nature of the portfolio,

the forex movement in the fi nal quarter

of 2021 was negligible.

The Company’s ongoing charges ratio

(“OCR”) reduced to 1.42%, refl ecting the

increased size of the investment

portfolio. The Board will continue to

monitor the OCR closely as we seek to

grow the Company and deliver value to

our shareholders. Further detail on the

Company’s fi nancial performance

including portfolio valuation and OCR

can be found in the Financial Statements,

from page 82.

Dividends and returns

We were pleased to announce an interim

dividend on 1 November 2021 of 1.25p

per Ordinary Share with respect to the

period from IPO to 30 September 2021.

Given the strength of the assets and

underlying cashfl ows, this dividend

exceeded the dividend target as set out

at IPO to pay a minimum total dividend

of 1p per Ordinary Share for the fi nancial

period ending 31 December 2021.

Additionally, we reaffi rmed the annual

dividend target of 5p per Ordinary Share

for the year beginning 1 January 2022.

Going forward, the Board anticipates

paying quarterly dividends of 1.25p per

share, in line with guidance provided to

investors in the January 2021 Prospectus.

Deployment

Our investment strategy seeks to take

advantage of the energy transition by

investing in a diverse portfolio of energy

assets. Diversifi cation is a key part of the

strategy. The Company’s ability to invest

in EU, OECD countries and Accession and

Key Partner countries allows us to take

advantage of reduced correlation in

energy and power prices. Alongside the

ability to invest in a range of

technologies, this broad geographical

scope also diversifi es the infl uence of

weather patterns and prevents reliance

on any single regulatory regime. We also

aim to minimise concentration risk via

investing across a large number of

projects.

The Company has continued to convert

its global pipeline of investments that

were highlighted as ‘Enhanced Pipeline’

assets in the IPO Prospectus. Since the

interim results, the Company has

continued to commit and deploy funds

including the acquisition of its fi rst UK

combined heat and power with carbon

capture and re-use plant, a second solar

PV site in Australia and a further four

solar PV projects in Brazil. The Company

has also committed a further $35m to

the expansion of the US terminals.

• On 6 April 2021, circa two months post

IPO, the Company committed $61m to

purchase two operating terminal

storage sites on the Texas Gulf Coast

to support Mexico’s greenhouse gas

emissions reduction plans by

displacing pollutive fuels. The

Company closed this transaction a

couple of weeks later.

• On 28 May 2021, the Company

committed $63m to a Brazilian solar

programme consisting of 18 remote

distribution solar generation projects

across ten Brazilian states with a total

capacity of 75MW. Brazil is a key

partner of the OECD and one of the

world’s fastest growing energy

markets.

• On 2 August 2021, the Company

committed £50m to the Australian

energy transition by acquiring a

portfolio of distributed solar

generation assets with plans to build

embedded battery storage capacity.

• On 9 September 2021, the Company

committed £78m to fund two net zero

fl exible power generation projects in

the UK, which support the energy

transition towards more renewable

power generation. This investment

will fund the construction of two

combined heat and power plants

which bring together high-effi ciency,

gas-fi red engine technology with a

carbon capture and reuse system to

provide a clean, net zero, fl exible and

dependable electricity solution to the

UK. The combined capacity will be

45MW.

1 See dividend cover calculation in the Alternative Performance Measures section on page 101

Annual Report and Accounts 2021

Strategic Report

Deployment (continued)

As at 31 December 2021, the Company’s

portfolio spans 24 assets across four

countries – US, UK, Australia, Brazil – and

includes technologies such as liquid

storage, solar PV, Solar PV + Battery and

Flexible Power + Carbon Capture and

reuse. As at the end of the reporting

period, the cashfl ows on operating

assets are contracted and infl ation-

linked.

Corporate governance

I am pleased to be joined on the Board

by Louise Kingham, Margaret Stephens

and Richard Horlick, who bring a wealth

of relevant skills and experience with

them. The Board recognises the

importance of a strong corporate

governance culture that meets the

requirements of the Listing Rules of the

Financial Conduct Authority and the

Association of Investment Companies

(‘AIC’) Code of Corporate Governance.

The Company aims to communicate

through all available mediums and

maintain an open dialogue with investors

regarding its strategic objectives, both

fi nancial and operational, and how they

are executed.

During the period since IPO, the

Company engaged, via its Investment

Adviser and Corporate Broker, with

shareholders through meetings, market

announcements and diverse written

materials. Where applicable, we have

had feedback directly from shareholders.

The Board plans to engage actively with

shareholders going forward and are

available to meet shareholders when

required.

The Board will be available to answer

shareholders’ questions directly at the

Annual General Meeting which will be

held on 27 April 2022.

Sustainability / ESG

Sustainability is central to all activities

undertaken by the Company and the

Investment Adviser, and we recognise

that investing responsibly is critical to

our performance and growth over the

longer term. Therefore, I am delighted to

announce that Louise Kingham is the

board member with responsibility

for Environmental, Social and

Governance (‘ESG’) and sustainability

matters for the Company.

Our goal is to make a positive impact as

we deploy capital into sustainable energy

projects around the world, and ensure

that ESG criteria are incorporated into all

of our investment decisions. This is

refl ected across our investment

philosophy and approach, including the

selection of our Investment Adviser,

Victory Hill, which is dedicated to the

energy transition and in doing so has

developed a sustainable development

culture at the Company level. As a

signatory to the UN Principles for

Responsible Investment, Victory Hill has

integrated ESG risks as well as

opportunity assessments across every

CHAIR’S STATEMENT CONTINUED

single stage of its investment process in

sustainable assets around the world,

refl ecting the sustainable culture of both

Victory Hill and the Company.

The Board recognises that impact

investing is also becoming increasingly

important for investors so we will be

aiming to report in a transparent way,

making it easier for investors to assess

and quantify the positive impact that

GSEO is having on communities around

the world and the environment more

broadly. Furthermore, we intend to

adopt reporting standards as they are

developed and adopted by the industry,

such as those being developed by the

Task Force on Climate-related Financial

Disclosures (‘TCFD’) and the Sustainable

Finance Disclosure Regulation (‘SFDR’).

Ukraine

The Company condemns the actions

taken by the Russian Government

against the people of Ukraine in violation

of international law. The Russian

aggression goes against everything the

Company stands for. The Board and the

Investment Adviser have undertaken a

review to ascertain if there is any

exposure, direct or indirect, to Russia in

the underlying assets of the Company.

This included, but was not limited to,

reviewing inventory, supply chain,

logistics, impact on revenue, and any

corporates or individuals targeted by

sanctions. The Company has no

exposure to Russia.

Overview Strategic Report Sustainability Governance Financial Statements Additional InformationOverview Strategic Report Sustainability Governance Financial Statements Additional Information

We believe the current uncertainty

around Russian sources of energy will

precipitate a greater focus on ensuring

overall resilience and security of supply

in global energy systems. In particular,

we believe this will accelerate the use of

alternative sources of transition fuels

and the development of renewable

power generation to meet Net Zero

goals.

The human impact of this confl ict is

devastating, and our hope is that peace

will prevail quickly.

Equity issuance

We were pleased to announce that the

Company raised a further £70 million in

December 2021 through a placing of

Ordinary Shares which we intend to use

to invest in a pipeline of assets which are

of high quality and diversifi ed by

geography and technology. Going back to

market within ten months of the IPO

highlights the Investment Adviser’s

strength in executing on the pipeline it

had shown to investors but also its

origination capabilities.

Taking the £70 million raised by the

Placing means that we have successfully

raised over £312 million since the

Company was launched in February

2021. The capital raised, coupled with the

strong pipeline of opportunities that the

Investment Adviser has already

identifi ed, should allow us to maintain

our strong investment momentum

into 2022.

As economies around the world reassess

their approaches towards a net zero

carbon future following COP26

(Conference of the Parties), the Company

is both well positioned, and well

capitalised, to continue its leadership

role, driving the energy transition while

making a positive impact on the

environment and the local communities

in which we invest.

Pipeline and Outlook

GSEO is uniquely positioned to

contribute strongly to global

decarbonisation, whilst providing a

compelling investment opportunity and

stable, predictable long-term yield.

The Board is pleased with the Company’s

acquisitions completed since IPO.

Furthermore, the Board looks forward to

further opportunities to acquire assets

which complement and provide

enhanced value to the existing portfolio,

while still maintaining a disciplined

investment approach. The Board

believes the Company is on track to

deliver for shareholders the returns and

yield as set out in the Company’s

Prospectus. The Board and the

Investment Adviser regularly review the

existing portfolio to fi nd ways in which to

create additional value and to optimise

the portfolio, through active portfolio

management for example. The

investments made and pipeline

generated are notable examples of the

Investment Adviser’s capabilities and

discipline in that regard.

With the additional funds raised in

December 2021, the portfolio is c.80%

committed or deployed. The Board,

together with the Investment Adviser, is

confi dent that the remaining proceeds

will be deployed within a relatively short

time frame, and the Company will

continue to invest in and maintain a

portfolio that is both geographically and

technologically diversifi ed.

On behalf of the Board, I would like to

thank shareholders for their support

since the IPO and we look forward to

delivering yield and growth whilst driving

a high positive impact on the

environment and society.

BERNARD BULKIN, PHD, OBE

CHAIR

18 March 2022

Annual Report and Accounts 2021

Strategic Report

We Start With

Sustainability

and Look For

Investments

The Company’s investment policy states that

it aims to achieve diversifi cation principally

by making a range of sustainable energy

infrastructure investments across a number

of distinct geographies and a mix of proven

technologies that align with the UN Sustainable

Development Goals (‘SDGs’) where the

investments are a direct contributor to the

acceleration of the energy transition towards

a net-zero carbon world.

The Company’s investment in proven

technologies will include exposure to power

generation (renewable and conventional),

biomass, transmission, distribution, storage

and waste-to-energy. These investments will be

operational, in construction or ‘ready-to-build’

but will not include assets that are under

development or in pre-consent stage.

No investment will be made in extraction

projects involving either fossil fuels or minerals.

Investment Adviser’s Report

Page 12

Overview

AT A GLANCE

Victory Hill is proud to have demonstrated that the

unique and diff erentiated GSEO investment model

is eff ective and works as intended. Our mission to

‘Accelerate the Energy Transition’ is proving to be

the right approach when targeting strategic

developers and assets around the globe.”

ANTHONY CATACHANAS

CHIEF EXECUTIVE OFFICER, VICTORY HILL

Overview Strategic Report Sustainability Governance Financial Statements Additional InformationOverview Strategic Report Sustainability Governance Financial Statements Additional Information

We don’t aim to

tie investments

to sustainability,

we start with

sustainability and

look for investments.

Our Approach to ESG

Page 28

Opportunity-Specific UN SDGS

Opportunity-Specific

Investment Pathways

Climate

Change

Energy

Access

Energy

Effi ciency

Market

Liberalisation

Investment Pathways

Investment Decision Gates

GATE 1

Assessment of

opportunity and

relevance to

the Company’s

Investment Pathways

GATE 2

Assessment of whether

there is any material

breach of non-core

UN SDGs

GATE 3

Assessment of the

investment itself

Investment Decision Process

Th e Company Group Structure

The Company is a United Kingdom

registered investment company and its

Ordinary Shares trade on the Premium

Segment of the Main Market of the

London Stock Exchange. The Company’s

investments are held indirectly via its

sole direct subsidiary and main

investment vehicle, VH GSEO UK

Holdings Limited (“GSEO Holdings” or

“HoldCo”), a limited company

incorporated in England and wholly-

owned by the Company, (the Company

and GSEO Holdings, together, the

“Group”). GSEO Holdings is, itself, an

investment entity and is therefore

measured at fair value.

The Company has an independent Board

of Directors, has no employees and has

appointed Victory Hill to advise on

investments and G10 Capital Limited

(“AIFM”) to manage investments on

its behalf.

Apex Fund and Corporate Services (UK)

Limited (“Apex”, “Administrator” or

“Company Secretary”) has been

appointed by the Company as a third-

party service provider via an

administration agreement.

• In order for the Company to achieve

its investment objective, it makes its

investments via its sole investment

vehicle, GSEO Holdings and its direct

and indirect subsidiaries.

> GSEO Holdings typically invests in

project SPEs (Special Purpose

Entities) around the world. The

SPEs normally provide local energy

transition solutions to

counterparties globally, often

through long-term contracts. The

SPE, and by implication the

portfolio of investments as a

whole, therefore has a lifetime over

which it provides target returns to

GSEO Holdings and ultimately the

Company. These SPEs are typically

structured in a way where the

Company has a majority stake and

the partner operator has a minority

stake or profi t share.

Th e Board is

responsible for the

Company’s Investment

Policy

and has overall responsibility for the

Company’s activities.

BUSINESS MODEL & STRATEGY

> The Company has a 31 December

fi nancial year end, expects to

announce its full year results in

March and half year results in

September.

> The Company intends to pay

dividends quarterly.

Annual Report and Accounts 2021

Strategic Report

SHAREHOLDERS

Independent Board of Directors

VH Global Sustainable Energy

Opportunities plc*

VH GSEO UK

Holdings Limited

VH GSEO UK

Holdings Limited

Project SPEs

Holdings Limited

Project SPEs

Holdings Limited

Project SPEs

Australia

Project SPEs

Brazil

Operator Operator Operator Operator

Company Service

Providers

• Admin & CoSec

• AIFM

• Broker

• Depositary

• Auditors

• Legal

• Registrar

Investment

Adviser

Victory Hill

Capital Advisors

LLP

*listed on the Main Market of the London Stock Exchange

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Investment Objective

The Company’s investment objective is

to seek to generate stable returns,

principally in the form of income

distributions, by investing in a diversified

portfolio of global sustainable energy

infrastructure assets, predominantly in

countries that are members of the EU,

OECD, OECD Key Partner Countries or

OECD Accession Countries.

Investment Policy

Overview

The Company seeks to achieve its

investment objective by making

Sustainable Energy Infrastructure

Investments across the EU and OECD

group of nations predominantly,

including but not limited to OECD Key

Partner Countries and OECD Accession

Countries. The Company’s investments

in global sustainable energy

infrastructure must be:

(i) investments in sustainable energy

infrastructure that support the

attainment and pursuit of the United

Nations Sustainable Development

Goals (the “SDGs”) where energy and

energy infrastructure investments

are a direct contributor to the

acceleration of the Energy Transition

towards a net zero carbon world;

and

(ii) investments that can be categorised

into one or more of the four

Investment Pathways that guide the

Company’s investment strategy.

These Investment Pathways are (1)

Addressing Climate Change, (2)

Energy Access, (3) Energy Efficiency,

and (4) Market Liberalisation,

and must also fall into one or a

combination of the following categories:

(i) power, heat and green gas producing

assets reliant on, but not limited to,

wind, solar, biomass, natural gas and

hydropower technologies;

(ii) production and refinement of fuels

derived from biomass sources;

(iii) energy storage infrastructure such

as containment and non-processing

facilities for liquid and gas fuel

sources, power storage utilising

battery or gravity-based

technologies;

(iv) energy transportation infrastructure

such as pipelines, interconnectors

and micro-distribution grids;

BUSINESS MODEL & STRATEGY CONTINUED

(v) distributed energy sources (heat,

power, gas and steam) which are

produced close to where it will be

used, rather than at a large

centralised plant elsewhere,

delivered through a centralised grid

infrastructure; and/or

(vi) equipment that is installed at the

premises or on site, directly

connected to the premises including,

but not limited to, CHP units, CCHP

plant schemes, HVAC units, lighting

equipment, biomass boilers and

steam raising boilers (including

intermediate pressure (IP) steam

processors),

in each case, either already operating or

in construction/development

(‘‘Sustainable Energy Infrastructure

Investments’’).

The Company looks to achieve NAV

growth by investing in higher yielding

Sustainable Energy Infrastructure

Investments that are operational, in

construction or “ready-to-build” but will

not invest in assets that are under

development (that is assets that do not

have in place required grid access rights,

land consents, planning and regulatory

consents and commercial arrangements).

The Company acquires a mix of

controlling and non-controlling interests

in Sustainable Energy Infrastructure

Investments that are held within Special

Purpose Entities (each, an “SPE”) into

which the Company invests through

equity and/or shareholder loan

instruments. In certain instances, the

SPE may hold one or more Sustainable

Energy Infrastructure Investments of a

similar type.

The Company may invest in SPEs

structured as joint venture investments

(“JVs”) or co-investments, including

through minority stakes, where this

approach is the only viable approach.

Where the Company participates in a JV

or a co-investment, it will seek to secure

its rights through obtaining protective

provisions in shareholders’ agreements,

joint venture agreements, co-investment

agreements or other transactional

documents, as well as board

representation for the Investment

Adviser, and with the aim of trying to

ensure that the investment is managed

in a manner that is consistent with the

Investment Policy.

Diversification

The Company aims to achieve

diversification principally by making a

range of Sustainable Energy

Infrastructure Investments across a

number of distinct geographies and a

mix of proven technologies that facilitate

the achievement of the SDGs by way of

Sustainable Energy Infrastructure

Investments.

Investment Restrictions

The Company can invest (calculated at

the time of investment) up to:

• 25 per cent. of Gross Asset Value in

any one Sustainable Energy

Infrastructure Investment;

• 40 per cent. of Gross Asset Value in a

single technology;

• 35 per cent. of Gross Asset Value in

assets that are in construction or

“ready-to-build”;

• 40 per cent. of Gross Asset Value in

assets that are located in any one

country;

• 30 per cent. of Gross Asset Value in

assets that are owned or operated by

a single developer;

• 10 per cent. of Gross Asset Value in

assets that are located in countries

that are not members of the EU,

OECD, OECD Key Partner Countries or

OECD Accession Countries; and

• 10 per cent. of Gross Asset Value in

other closed-ended investment funds

which are listed on the Official List.

No investments will be made in fossil

fuel or mineral extraction projects.

Non-compliance resulting from changes

in the price or value of Sustainable

Energy Infrastructure Investments

following investment will not be

considered as a breach of the investment

restrictions.

The Company holds its investments

through one or more SPEs and the

investment restrictions are applied on a

look-through basis.

In the event of any breach of the

investment restrictions applicable to the

Company, Shareholders will be informed

of the remedial actions to be taken by

the Company through an RIS

announcement.

Annual Report and Accounts 2021

Strategic Report

Cash Management

Whilst it is the intention of the Company

to be fully or near fully invested in

normal market conditions, uninvested

cash or surplus capital or assets may be

invested on a temporary basis in:

• cash or cash equivalents, namely

money market funds (as defined in the

‘Guidelines on a Common Definition of

European Money Market Funds’

published by the Committee of

European Securities Regulators (CESR)

and adopted by the European

Securities and Markets Authority

(ESMA)) and other money market

instruments (including certificates of

deposit, floating rate notes and fixed

rate commercial paper of banks or

other counterparties having a “single

A” or higher credit rating as

determined by any internationally

recognised rating agency selected by

the Board which, may or may not be

registered in the EU); and

• any “government and public

securities” as defined for the purposes

of the FCA Rules,

provided that not more than 20 per cent.

of the Gross Asset Value, calculated at

the time of investment, may be so

invested, following the deployment of

the Net Proceeds.

Borrowing Policy

The Company may make use of long-

term limited recourse debt for

Sustainable Energy Infrastructure

Investments to provide leverage for

those specific Sustainable Energy

Infrastructure Investments. Such

long-term limited recourse debt will not,

in aggregate (calculated at the time of

entering into or acquiring any new

long-term limited recourse debt), exceed

60 per cent. of the prevailing Gross Asset

Value.

In addition, the Company may make use

of short-term debt, such as a revolving

credit facility, to assist with the

acquisition of suitable opportunities as

and when they become available. Such

short-term debt will be subject to a

separate gearing limit so as not to exceed

30 per cent. of the Gross Asset Value at

the time of entering into (or acquiring)

any such short-term debt. In

circumstances where these

aforementioned limits are exceeded as a

result of gearing of one or more

Sustainable Energy Infrastructure

Investments in which the Company has a

non-controlling interest, the borrowing

restrictions will not be deemed to be

breached. However, in such

circumstances, the matter will be

brought to the attention of the Board

who will determine the appropriate

course of action.

Use of Derivatives

The Company may enter into hedging

transactions for the purposes of efficient

portfolio management, which may

include (as relevant) short-term currency

hedging (as described in the last

published prospectus of the Company) ,

interest rate hedging and power price

hedging. The Company does not intend

to use hedging or derivatives for

investment purposes but may from time

to time use risk management

instruments such as forward contracts

and swaps (collectively ‘‘Derivatives’’) to

protect the Company from any

fluctuations in the relative value of

currencies against Pound Sterling, as well

as to hedge against interest rates and

power prices. The Derivatives must be

traded by private agreements entered

into with financial institutions or

reputable entities specialising in this type

of transaction and will be limited to

maturities no longer than 12 months.

The Company will target investments

that provide sufficient asset-level returns

to compensate for longer term

fluctuations in exchange rates.

Furthermore, asset level returns where

possible will be linked to local inflation

rates.

Derivatives may be employed either at

the level of the Company, at the level of

the relevant SPE or at the level of any

intermediate wholly owned subsidiary of

the Company.

All hedging policies of the Company will

be reviewed by the Board and the AIFM

on a regular basis to ensure that the risks

associated with the Company’s

investments are being appropriately

managed. Any derivative transactions

carried out will only be for the purpose

of efficient portfolio management and

will not be carried out for speculative

purposes.

Amendment to Investment Policy

As required by the Listing Rules, any

material change to the investment policy

of the Company will be made only with

the approval of the FCA and

Shareholders, by ordinary resolution and

will be notified to HMRC. If a change to

the investment policy is material for the

purposes of the AIFM Rules, the consent

of the FCA will also be required prior to

implementation of such change.

Sustainable Development Goals

GSEO seeks to deliver investments in the

energy sector that support the global

sustainability agenda as interpreted by

the UN and recognised by the

International Energy Agency.

The SDGs are the blueprint for the

Company’s sustainability-focused

investment strategy. The 17 SDGs were

adopted by all UN Member States in

2015, and together they address the

global challenges we face, including

those related to poverty, inequality,

climate change, environmental

degradation, peace and justice.

According to the International Energy

Agency (the ‘IEA’), the SDGs that are

directly impacted by energy are: the

achievement of universal access to

energy (SDG 7), the reduction of the

severe health impacts of air pollution

(part of SDG 3) and tackling climate

change (SDG 13).

Three further SDGs have been identified

by Victory Hill as having a connection

with the impact of capital investment in

developing sustainable energy globally.

These are related to the promotion of

decent working environments and

economic growth, industry, innovation

and infrastructure as well as

partnerships for the goals (SDGs 8, 9

and 17).

Together, these goals translate to the

need for the global community to invest

its attention, talent, and resources to

help solve the challenges posed by

sustainability. An important way to

achieve this is to harness private capital

participation with the support of public

policy. These are the six ‘core’ SDGs of

the GSEO investment strategy.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Annual Report and Accounts 2021

Strategic Report

INVESTMENT ADVISER’S REPORT

Q&A

Th e Investment Adviser’s co-CIOs, Eduardo Monteiro

and Richard Lum, share their thinking for the year in

review and look ahead to the positive outlook for global

sustainable energy infrastructure investment.

What was the focus in 2021?

2021 was the year we set out on our

path to realise our sustainable

energy investment mission. We

completed a landmark fundraise for a

fi rst time Investment Adviser, and this

allowed us to implement our plan to

build the platform and grow it. The year

saw us setting our fi rst investment

programmes in place as we continued to

seek new opportunities. We have hired

exceptional staff to join us on our

mission and have built a global

investment programme which will

produce sustainability impacts.

What is your outlook for the

Company and for global energy

infrastructure investment?

In our view the need for large scale

investments in sustainable energy

infrastructure globally is clear and

pressing. We designed our investment

strategy by drawing on years of collective

experience in advising energy market

participants as the sector began its

generational pivot towards achieving net

zero, as well as referencing a range of

publicly available reports from sources

such as the International Energy Agency

(“IEA”) and McKinsey.

Each source re-affi rmed our own

conclusion that the scale of investment

in sustainable energy infrastructure

would be signifi cant and sustained in the

medium term. Studies suggest that

energy investment from 2020 to 2040

will total US$40 trillion with an annual

amount of US$1.8 trillion to US$1.9

trillion in the initial years, growing in the

later years to excess of US$2.0 trillion,

due to the growth in population and

energy demand. Of this amount, the IEA

has reported that approximately half

would go towards funding the build out

of sustainable energy infrastructure and

of this amount, the majority would be

underwritten by private sources. This

outlook encouraged us to pursue the IPO

of GSEO.

COP26 clearly demonstrated the need for private capital to

bear the greatest responsibility for investing in the energy

transition to net zero. It confi rmed our view that, regardless of

where governments position themselves on climate change,

there is an enormous amount of investment that can, and

must, be made today within current regulatory frameworks

and technologies.”

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

The task ahead to achieve sustainability

in the global energy system has grown

again in significance since the Company’s

IPO in February 2021. In the second half

of 2021, the IPCC pointed out that the

potential damage from climate change

will be a lot worse than initially thought

and that more urgent action would be

required. This presaged the release of

the IEA World Energy Outlook 2021

which highlighted that the world would

require US$4 trillion per year of

investments in sustainable energy up to

2030 alone in order for the targeted net

zero scenario to be achieved. Of this

amount, 75% was estimated by the IEA

as having to originate from the private

sector and 70% would have to be

directed to developing economies. This

represents an opportunity set that is

four times larger than what we could

estimate when we were formulating

GSEO for the IPO.

Given these factors, the outlook for the

Company and for global energy

infrastructure investment is extremely

encouraging. Our strategy is to invest

alongside middle market companies or

to work with middle market developers

in our infrastructure projects. We firmly

believe that this approach will be the key

to achieving the IEA Net Zero scenario

and will translate into an ample set of

investment opportunities, as

demonstrated by the GSEO investment

pipeline.

How is GSEO addressing the global

threat of climate change?

The focus of the Company’s

investment activities is sustainable

energy which means accelerating the

energy transition to net zero. We

identified early on that combating

climate change would require the

deployment of private capital in energy

infrastructure that is being developed by

middle market participants. This is a

unique approach but also a challenging

one for an Investment Adviser like us.

Small projects require the same level of

attention and diligence as large-scale

ones. This means that we have to work

on a large number of smaller projects,

which in aggregate have a significant

impact towards meeting the global

sustainability agenda. As we grow the

Company and continue to scale up our

unique approach, our contribution to the

climate change agenda will become more

and more pronounced. That is our focus

and our motivation.

What differentiates the Company

from its peer group?

Unlike our peer group, we believe the

need for a build out of sustainable

energy systems is a global phenomenon,

and not one based solely in the UK or

Continental Europe. As such, we

approach our investment activity on a

truly global scale. Our partnership model

allows us to work on projects in multiple

jurisdictions and in different

technologies. Working on a larger

canvass means that we are able to

identify more attractive and

differentiated infrastructure investment

opportunities, and we can focus on

assets that are in high demand in certain

jurisdictions. For example, in the UK, we

have focussed on an investment in a

flexible power solution where the need

for balancing energy supply and demand

is compelling. In Brazil, we are rolling out

more solar PV projects as the country has

an enormous untapped potential with no

balancing issues. In Australia, the

demand is for balancing at very specific

hours of the day so requires a solution

that can be implemented with great

levels of planning.

Where do you see opportunities?

As a globally active investor, we have

identified opportunities in energy

markets throughout each major

continent in the world.

In Western Europe, we believe the focus

for market participants will continue to

be to displace coal as a source of flexible

power, and to provide grid stability

through the use of energy storage

systems.

In Eastern Europe, we would like to see

coal being displaced as a baseload,

through the reallocation of capital to

renewable and biomass feedstock

generation.

In the US, opportunities are more

localised but follow similar patterns of

displacing coal, adding renewable

energy, and further developing the

market for renewable biomethane and

biofuels.

The topic of hydrogen has become

increasingly prominent in investor and

developer forums of late. Whilst we

believe the potential of hydrogen to

reshape our energy landscape and

systems will be significant and profound,

at present the opportunities for

investment is limited, and primarily

linked to large scale industrial initiatives

requiring significant development

capital, driven by integrated energy

groups. We believe that once this

technology is commercially proven (with

commercial revenue incentives

sufficiently developed to de-risk projects

for investment), market dynamics will

ensure a steady stream of middle market

opportunities for investment.

How does Victory Hill add value to

investments / for the Company’s

shareholders?

The starting point in all of our

investments is to ensure that the

operations that we oversee are

administered with strong governance

and the highest standards of industry

practice, sustainability practices, ethics,

health and safety policies, monitoring,

and reporting. It is only through ensuring

the implementation of this behaviour

can the Company’s assets become

eligible to act as counterparties to major

institutional players, such as

international energy groups, banks and

service providers. Once this is

implemented, we can then tap into

Victory Hill’s network of energy market

participants to add value to the projects

via increased commercialisation

opportunities. For example, through

implementing improved revenue

contracts or supply and offtake

arrangements with international energy

and industrial complexes. We also work

with our operating partners on strategic

plans for the asset, such as expansions

or new contracts or revenue streams.

The way we add value varies by asset and

is bespoke to the asset and the energy

market in which it operates.

What are your thoughts following

COP26, and what does this mean

for the strategy?

Outside of the inter-governmental

discussion in the Glasgow

Agreement on the need for the

collective meeting of set target to avoid

catastrophic climate change, COP26

clearly demonstrated the need for

private capital to bear the greatest

responsibility for investing in the energy

transition to net zero. It confirmed our

view that, regardless of where

governments position themselves on

climate change, there is an enormous

amount of investment that can, and

must, be made today within current

regulatory frameworks and

technologies. It is therefore incumbent

on Investment Advisers such as Victory

Hill to continue with our relentless focus

on building out the Company’s portfolio

of current and future sustainable

energy infrastructure projects.

Bottom up Analysis: Project Developer

Project

Developer

Top Down Global Portfolio Construction

Asset Management

Investment Committee

Due DiligenceOrigination

UN SDGs related to energy

Country/Energy market selection

Technology selection

Developer

selection

Site visit

Downside risk

assessment

Due diligence

Impact theme analysis

Screen against six UN SDGs/Assess breaches

against other 11 UN SDGs

USP

competitive

advantage

Long-term performance

Own capitalisation

Institutional calibre

Exclusive engagement agreement

Annual Report and Accounts 2021

Strategic Report

A private equity

discipline applied

to sustainable

infrastructure

INVESTMENT ADVISER’S REPORT CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

he topic of climate change

and the centrality of

energy in our society again

took centre stage in the

media and public

consciousness in 2021. This

was driven by issues around energy

security and cost in the UK and other

countries given the rise in natural gas

prices, the pronouncements of a return

to focus on energy infrastructure

spending by the incoming Biden

Administration in the US, as well as the

coming together of international

governments at the COP26 summit in

Glasgow.

The diplomatic negotiations and

resolutions proffered by governments of

the developing and developed world

resulted in the publication of the

Glasgow Climate Impact (GCI), which

many agreed did not go far enough in

delivering a knockout punch to achieving

targets of reducing global warming to 1.5

degrees above the average from the

pre-industrial levels. In particular, the

backing down on coal, proposing that it

will remain a substantive part of the

energy value chain for the short to

medium term. The GCI nevertheless, in a

more prosaic way delivered a way

forward in the overall transition.

Most significantly, COP26 demonstrated

that while governments focused on the

wider debate, it was clear that the

burden of providing financial support for

the transition to net zero would fall on

the private capital world. The estimation

of funding required over the next three

decades by the Glasgow Financial

Alliance for Net Zero (GFANZ), was put at

US$100 trillion, clearly outside the reach

of governments around the globe which

already face stretched balance sheets.

We believe that this is a conservative

estimate and only points to the funding

required for works in renewable and

decarbonisation technologies, without

also factoring in investment required in

conventional energy infrastructure,

which will also be required in a net zero

world, and which needs consistent

investment.

There is no clearer demonstration of the

need for consistent investment

throughout the energy value chain, both

renewable and conventional, than two

key events during the year.

Firstly, President Joe Biden signed a US$1

trillion infrastructure bill in November

2021, a large part of which addresses

climate change issues. On closer

inspection, the bill seems to not only

favour renewables, but also commits a

portion of its US$65 billion for clean

energy to grid related investments, and a

further US$21 billion to clean up

brownfield sites, and cap orphaned oil

and gas wells. Taken together, it is clear

that the US views the transition in more

holistic terms. Investments in the

electricity grid network acknowledges

the need to make the grid more resilient

and to promote energy efficiency

through co-locating power generation

sources closer to demand centres,

through so-called distributed energy

systems, one of the core focuses of

the Company.

Secondly, the need for a truly diversified

and resilient energy mix has never been

more evident for the UK, and other

countries, as population and power

demand grows and governments

contemplate the need to offer energy

security, whilst tackling climate change.

In the context of the UK, greater reliance

on renewable energy to tackle climate

change has led to increased reliance on

fossil fuel generation (including coal) in

the periods when the wind did not blow

and the sun did not shine. This

intermittency issue has caused demand

for natural gas to spike and, combined

with supply constraints in natural gas,

has caused energy prices in the UK to

increase substantially. It has been clear

to Victory Hill for some time that the

intermittency issues related to

renewable power sources is the key

sustainability issue in the UK, not the

need for capital for more renewables

investments per se. The UK needs to

pursue a more diversified strategy for

overall power supply, including natural

gas generation with carbon capture,

together with medium and longer

duration energy storage solutions to

supplement the growth in renewable

supply.

The Government should also better

manage the knock-on effects of needing

to use coal, which drives up carbon costs

and therefore the cost of delivered

power.

Over the course of the year, the

Company’s investments have sought to

tackle these issues head on. We have not

been satisfied with simply investing in

further renewable power generation, as

we do not see this as compatible with

our mission for the attainment of

sustainable energy globally.

In the US, we have implemented a

programme to help in the desulfurisation

of the Mexican fuels value chain, thereby

making a substantial impact in mitigating

the ecological disaster of burning

untreated high sulfur fuels.

In Brazil, our investments contribute to

meeting the sustainability objectives of

addressing, climate change, as well as

offering energy security to thousands of

households, as well as grid security.

In Australia, our investments in hybrid

solar and battery storage projects will

help create greater efficiency on the grid

and stimulate further investments in

renewable power generation in the

country.

The investment in the UK is unique in

tackling the issue of energy security, by

offering a highly efficient flexible natural

gas combined heat and power (“CHP”)

unit to offer baseload power, and also

respond to periods of intermittency on

the grid, whilst also capturing fully the

carbon emissions to offer a purified C02

product to the food and beverage

industry, where shortages of the product

have been well documented during the

course of 2021. It is only through

acknowledging that sustainable energy is

a global phenomenon and needs tackling

head on, that we can make an impact,

and also offer our shareholders a truly

differentiated yield.

237.9

68.6

323.9

23.6

(3.4) (3.0)

0.1

100.0

50.0

150.0

200.0

250.0

300.0

350.0

Net proceeds

raised on IPO on

2nd Feb 2021

Net placing

proceeds on

3 Dec 2021

Valuation uplift

from portfolio

assets

Company

costs

Forex

movement

Dividend

paid on

10 Dec 2021

Audited NAV

as at

31 Dec 2021

Increase Decrease Total

Annual Report and Accounts 2021

Strategic Report

NAV Bridge (£’m)

Pipeline

We continue to originate sustainable

energy opportunities globally, as was set

out in the announcements we made for

the follow-on capital raise in early

December 2021. Our focus on deploying

capital from the fi rst two raises and from

future raises will be on hydroelectric,

geothermal, wind and battery

opportunities in a broad range of

geographies, including Brazil, UK, Mexico

and US.

We see great potential to continue to

deliver on a portfolio that is diversifi ed

by geography and by technology. Thanks

to a very robust pipeline, we are able to

prioritise opportunities according to the

shape of the portfolio.

Investment Update

At the end of 2021, we saw another uplift

in the Company’s NAV, driven by the

strong performance of our US terminals.

Our programmes in Brazil and the UK are

under construction so will not impact

NAV until they reach Commercial

Operational Date (“COD”) and they

will continue to be valued at cost in

this period.

The Australian solar PV plus battery

programme has started with the

acquisition of two assets at the end of Q4

2021 which will be measured at fair

value, based on the highest and best use

of the assets. This includes the

acquisition price and upgrade with the

Battery Energy Storage System (“BESS”)

implementation, which is the main driver

of the value creation for this programme.

The strong performance of the US

terminals has been driven by a more

focused management of the assets,

which identifi ed further revenues

streams and with a commercial team on

the ground originating more contracts

for the use of the terminals.

With the expansion of the terminals, we

expect further improvements in cash

fl ows, as we take advantage of available

land and infrastructure and continue to

monetise on the high demand for this

type of asset in that strategic location.

INVESTMENT ADVISER’S REPORT CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Since completion of the acquisition of the two

terminals in South Texas, we have seen a great level

of improvement in the operations and commercial

arrangements. On the operating side, we have

maintained the existing teams and have added

capabilities by switching to 24/7 operation,

increasing the volumes we had been handling.

On the commercial front, we have extended existing

contracts at higher rates and optimised ancillary

services revenues.

The fi nancial performance of this asset has greatly

exceeded our expectations in 2021 and the prospects

ahead are for even greater potential, as we embark

on the expansion of the storage capacity.

A fi nal development on this project was that, thanks

to the profi le of the contracts in place, we have

managed to raise non-recourse debt from

specialised local banks. The leverage for this asset

as of 31 December 2021 is 16% (defi ned as debt over

total capitalisation).

Our Approach to ESG

Page 28

Case study Update:

US Terminal

Storage Assets

Market Outlook

The transformation in the energy market

will continue to aff ect people across the

globe on macro and micro levels and a

reversal to the old norm can now be

completely discarded. Countries’

commitments to tackling climate change

and sustainability head on, technological

advancements and intelligent solutions

will continue to shape the way we power

our economies for years to come. At

Victory Hill, we fi rmly believe that we

have only just started on the energy

transition journey.

Sustainable energy investments will

continue to be supported by favourable

market conditions.

The ‘old’ energy industry is grappling

with the increase in the cost of capital for

extraction of fossil fuels by signifi cantly

reducing investments despite improved

commodity prices. This paradox is

creating a unique situation for a

prolonged high commodity price cycle

which is consistent with an energy

transition landscape. Higher commodity

prices will make their way into energy

prices for end consumers, counter-

balancing the downward pressure on

energy prices caused by greater

renewable energy penetration. In the

meantime, governments will continue to

implement initiatives to try to mitigate

energy infl ation’s impact on end users’

lives which will favour sustainable assets.

Commitments to tackling climate change

are getting more and more robust. While

governments are fl uctuating around

greater levels of commitment to lower

levels, the private initiative remains

relentlessly focused on developing

solutions and capturing opportunities as

they become available.

Annual Report and Accounts 2021

Strategic Report

INVESTMENT ADVISER’S REPORT CONTINUED

GSEO is at the forefront of the private

capital participation in the energy

transition with a global focus to enable

sustainable energy projects with

long-term equity capital. Our global

approach means that our attention will

be centred around diff erent themes

depending on the geography, as the

energy transition means diff erent

approaches required in each market.

“Think global, act local” is our approach.

In the UK, we will continue to focus on

grid balancing initiatives. Through the

autumn and winter of 2021 we have seen

very low wind resources resulting in the

UK network having to dispatch an

unwanted amount of coal-fi red power

plants. This is a major setback with so

much capacity being built for renewable

sources. We will therefore continue to

direct our investments in the UK towards

addressing the unreliability of solar and

wind with net zero fl exible power

solutions using high effi ciency natural

gas power plants. High effi ciency means

less natural gas as feedstock for each

MWh to be produced. This will be crucial

at a time when natural gas prices are

expected to be high due to a

combination of supply and demand

factors and geopolitical tensions.

On the US and Mexico border, the need

to keep the fl ow to clean up Mexican fuel

will remain as strong as ever. The

Mexican government will continue to

push on the agenda to support state

owned enterprises which control the fuel

value chain and the power generation

segment. These entities depend greatly

on the ability to clean the domestic fuel

to avoid environmental disaster of

burning the indigenous fuel untreated.

In Brazil, the commitment to renewable

energy penetration will continue to go

from strength to strength. While the

country goes into the usual political year

paralysis, both sides of the political

spectrum will continue to see favourably

the great benefi ts of distributed

generation solar PV plants. These plants

will play a crucial role in supplying the

Brazilian economy with clean and

aff ordable energy at a time when

electricity prices will continue to cause a

lot of pain on Brazilian households. Like

in all economies, infl ation in Brazil will

continue to be high, putting some

pressure on the currency although also

contributing to the infl ation-linked

revenues for our projects there.

In Australia, where power generation has

a disproportionally high reliance on coal,

power prices are expected to remain

very volatile. High commodity prices,

including coal, will make their way into

power prices at peak hours, making the

case for trading strategies using energy

storage even more compelling.

In terms of currencies, as part of our

investment criteria we always embed

some cushion to absorb negative shocks

on the exchange rates versus GBP.

Having said that, we do not anticipate

major movements in the currencies we

are exposed to, even under the current

extreme geopolitical tensions. Of those

currencies, the BRL is the most volatile

and remains at historical lows, although

this has been mostly a result of higher

infl ation in the last 10 years versus US

and UK.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Case study Update:

Brazil Solar PV Programme

Brazil off ers great potential for solar PV

developments, given the role that renewable

energy can play in the energy mix. This

potential has been almost completely untapped

to date. Under this programme, we continue to

complete the onboarding of the projects

identifi ed as part of the original pipeline and to

progress on the construction of the projects

already acquired. The fi nal batch of projects to

be onboarded is expected in Q2 2022.

With multiple sites under construction, this

programme has faced the supply-chain hurdles

that impacted the global economy in 2021 and

equipment has taken longer than expected to

arrive on the sites, causing a few weeks delay in

the projects reaching COD. However, thanks to

the Engineering, Procurement and Construction

(EPC) arrangement in place, these delays will be

off set by contractual compensation provisions.

We are at the fi nal stages of the construction of

the fi rst two batches which involves 11 sites

with a total capacity of 30 MW. First COD for

some projects in this programme is occurring in

March and April 2022 with the remainder

occurring in subsequent months. The third

batch, which was approved in December 2021,

remains on track for COD in Q3 2022 with one

project expected to be completed in Q2 2022.

The whole investment programme should reach

COD in 2022, including the last remaining

projects that are yet to be constructed.

In terms of the regulatory framework, a new law

(PL 5829/2019) was implemented in January

2022 that secured the prevailing taxes and

tariff s on the projects until 2045.

Our Approach to ESG

Page 28

Layout of one of the fi rst of 18 greenfi eld sites invested in by GSEO in Brazil. Above photo represents the design of a

typical distributed generation project.

United States 29%

United Kingdom 32%

Geographic Split

as % of Total Committed Capital

Australia 20%

Brazil 19%

Annual Report and Accounts 2021

Strategic Report

INVESTMENT ADVISER’S REPORT CONTINUED

Our Portfolio

Update

Terminal storage

assets on the

Texas gulf coast

Brazilian solar

PV assets

Case study

Page 17

Case study

Page 19

Availability 29%

Fixed-Price PPA 61%

Revenue Mix as % of

Total Committed Capital

Merchant 10%

Liquid storage 29%

Flexible power + CCR

32%

Technology Split

as % of Total Committed Capital

Solar PV & Battery Storage 20%

Solar PV 19%

Operational 49%

Construction 51%

Operational vs Construction as %

of Total Committed Capital

1 Carbon Capture and Reuse

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

UK fl exible power

with carbon capture

and reuse

Case study

Page 24

Australian renewable

power generation

and battery storage

investment

Case study

Page 22

Annual Report and Accounts 2021

Strategic Report

INVESTMENT ADVISER’S REPORT CONTINUED

Enhancing

Australia’sGrid System

by Addressing Market

Shortfalls

Sustainability

GSEO’s investments in renewable power generation

in Australia aim to reduce the climate impact by

displacing fossil fuel derived electricity and

optimising its use in the grid through deployment of

BESS. In addition, the investment looks at the

broader sustainability impact. For example, solar

panel manufactures have been vetted for

environmental actions such as recyclability, and

partner ESG policies and processes reviewed to

ensure sustainability-focused management

practices.

The Australian market is very unique in that it has

one of the greatest renewable resources potential

(land availability, wind and solar resources) but is

starting from the opposite end of the spectrum,

which is to have the majority of its energy needs

generated by coal. This makes the transition one of

the most challenging tasks around the world.

Australia continues to see a very rapid penetration

of renewable energy that cannot be absorbed by the

energy system because coal plants provide the

baseload power to the economy. In the peak hours

of the day for electricity demand, solar availability

tends to be very low so almost all the power is

provided from coal plants. This means that power

prices at peak hours are high. During the day, when

the sun is available, supply from solar PV sources is

extremely high compared to levels of demand. As a

result, power prices are low and at times even

negative. Solar PV curtailment and negative prices

make solar PV power generation a very challenging

proposition.

Timeline

Early-stage negotiation

DD completion

Partnership agreement signed

Capital committed Asset management

Phase 1 Phase 2 Phase 3 Phase 4

Capital deployed

Completed

In process

Next steps

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Australia calls for battery storage to shift the supply

of electricity to the optimal times of the day. Battery

storage not only off ers a solution to decarbonise

the Australian power sector but it is also a great

source of value creation via a trading strategy.

Because the power price patterns during the day

are so pronounced and predictable, Australia off ers

an opportunity to do intra-day power trading and to

capture an attractive margin in the process.

We have chosen this programme for Australia which

involves the construction or acquisition of solar PV

plants and addition of BESS. The BESS addition to

solar PV improves the unlevered investment

returns.

Project details

• Initial acquisition of two operating solar PV

generation assets totalling 17MW (Phase I)

and construction of battery storage systems

of 9MWh (Phase II)

• Acquisition of a further 21 MW solar PV

generation assets (Phase III) and an associated

build of 25MWh BESS (Phase IV)

• The operating partner is Birdwood Energy

Investments Pty Ltd, a team of energy

entrepreneurs with a successful development

track record of power generation and battery

projects globally

• Building BESS allows the project to capture

positive power price movements and prevent

over exposure to negative power prices

• Working with the operating partner to optimize

the output and availability of plants and improve

existing commercial terms

• Capture enhanced revenues by providing

frequency stabilisation services

Timeline

Early-stage negotiation

DD completion

Partnership agreement signed

Capital committed Asset management

Phase 1 Phase 2

Capital deployed

Completed

In process

Next steps

Annual Report and Accounts 2021

Strategic Report

INVESTMENT ADVISER’S REPORT CONTINUED

Sustainable solution

for problems in

intermittencyand

stabilisation of the grid

Sustainability

This UK-based investment helps provide energy

access through grid stabilisation while addressing

greenhouse gas emissions by not only using

effi cient technology but also capturing carbon

dioxide as a product for the food and beverage

sector. This creates an economic carbon cycle.

Active engagement through the value chain ensures

ESG impacts are managed, whether it’s to identify

opportunities to recycle waste products or improve

effi ciency.

In line with our strategy to focus on grid-balancing

opportunities for the UK we are proud to be

supporting this very innovative fl exible power

generation solution. It is undeniable that renewable

energy is highly desirable as a cheap and carbon-

neutral energy source. However, without an

infrastructure in place to deal with the intermittency

of renewable sources such as solar and wind, the

logic of adding renewable energy becomes less

strong or the task itself simply becomes

problematic due to the challenges imposed on the

grid operator. Last year, during periods of very cold

weather and low wind resources, we witnessed the

UK network operator having to call on coal-fi red

power plants to keep the market supplied. That is a

major setback and should be avoided.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Sustainable solution

for problems in

intermittencyand

stabilisation of the grid

Our fl exible power and carbon capture programme

in the UK is the way we have chosen to participate in

the UK energy market, which is to supply reliable

baseload power without adding to carbon

emissions. By combining a range of existing and

proven technologies, this programme off ers a very

compelling solution to enable further renewable

energy penetration in the UK energy mix. The way

this programme contributes to de-carbonising the

UK energy market is multi-faceted:

Firstly, by displacing coal as the source to call on

when renewable resources are not available.

According to the International Energy Agency,

natural gas emits at least 50-60% less C0

than coal

when burned, and a 10th of the pollutants which

comes from burning coal. This displacement has

been traditionally done via the construction of gas

peaker plants with the rationale that using natural

gas is much less harmful than coal. This is a starting

point for this programme but not the end game.

Secondly, increasing effi ciency of the gas-fi red

power engines with the addition of Organic Rankine

Cycle (ORC) technology. Essentially, adding heat

exchangers to generate additional power from the

temperature diff erentials and exhaust gases of the

power production and cooling systems. This has the

impact of delivering a unit of power with a much

lower consumption of natural gas. With this process,

we have increased effi ciency of our gas-fi red power

engines from a typical low 30% to close to 50%. This

is almost double the effi ciency or almost half the

natural gas consumption.

Thirdly, and the most important contribution, by

capturing the exhaust gases at the end of the cycle,

“scrubbing” it and turning it into purifi ed food-grade

. This has the impact of displacing imports of

industrial CO

(which have been in shortage in the

UK) as well as displacing domestic CO

originated

from ammonia plants.

The end result is a fl exible and reliable power

source that does not add to CO

emissions.

In terms of the execution of this programme, the

fi rst project has a full-wrap turnkey lumpsum EPC

contract in place and broke ground at the end of

2021. We expect to see power production starting in

the beginning of 2023 with the full CO

capture

completed in mid 2023.

Project details

• The construction of two fl exible power projects

that are uniquely combined with carbon capture

and reuse technology (Phase I) 10 MW &

(Phase II) 35 MW.

• The programme involves global industrial groups

participating in its development, such as Rolls

Royce MTU, Climeon, Mitsubishi Turboden and

ASCO Carbon Dioxide Ltd.

• The operating partner is Landmark Power

Holdings Ltd, which is led by a group of

UK energy entrepreneurs.

• Secured a 15 year PPA with a 5 year rolling

“spark spread”

• Opportunity to improve the commercial

terms with CO

off takers

• Additional revenues from grid ancillary services

such as balancing and capacity markets

• Additional capacity to be sold private

wire power supply agreement with a leading

UK supermarket group which intends to use

the energy for its onsite electric vehicle

charging stations

Annual Report and Accounts 2021

Strategic Report

KEY PERFORMANCE INDICATORS

Growing

Sustainably

Financial

The Company sets out below its fi nancial,

operational and climate-related KPIs

which it uses to track the performance of

the Company over time against the

objectives, as described in the Strategic

Report. Although the Company is not

required to report under the

recommendations of the TCFD, many of

those recommendations are followed in

order to enhance the Company’s

disclosures. The Board believes that the

KPIs detailed below provide

shareholders with suffi cient information

to assess how eff ectively the Company is

meeting its objectives. The Board

monitors these KPIs on an ongoing basis.

NAV per Share (pence)

+4.0%

Share Price (pence)

+7.0%

D e ﬁ n i t i o n

NAV divided by number of shares

outstanding as at 31 December 2021

Commentary

The NAV has increased to 104.0p since IPO.

D e ﬁ n i t i o n

Closing share price as at 31 December 2021

Commentary

The share price has increased to 107.0p

since IPO.

Total Shareholder Return (%)

8.3%

Ongoing Charges Ratio (%)

1.42%

Dividend Per Share (pence)

1.25p

D e ﬁ n i t i o n

A measure of performance that includes

both income and capital returns. This takes

into account capital gains and reinvestment

of any dividends paid out by the Company,

with reinvestment on ex-dividend date.

Commentary

Total return combines the increase in share

price and dividend distributions, and

refl ects continued underlying delivery to

shareholders.

Alternative performance measures are

defi ned on page 101.

D e ﬁ n i t i o n

Annualised ongoing charges (i.e. excluding

investment costs and other irregular costs)

divided by the average published undiluted

NAV in the period, calculated in accordance

with AIC guidelines.

Commentary

The Company has incurred less ongoing

charges than disclosed within the Key

Information Disclosures.

Alternative performance measures are

defi ned on page 101.

D e ﬁ n i t i o n

Aggregate dividends declared per share in

respect of the fi nancial year

Performance

Performance: 1.25p per share dividend in

respect of 2 February 2021 to 31 December

2021

Commentary

The Company declared an interim dividend

of 1.25p per Ordinary Share in November

2021 with respect to the period from IPO to

30 September 2021. This exceeded its

dividend target as set out at IPO to pay a

minimum of 1p per Ordinary Share for the

fi nancial period ending 31 December 2021.

Furthermore, the Company reaffi rmed its

annual dividend target of 5p per Ordinary

Share for the year beginning 1 January 2022.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Operational KPIs

Weighted average project life (years)

Largest investment as a % of GAV

31.1%

Largest 3 investments as a % of NAV

47.4%

D e ﬁ n i t i o n

Weighted average number of year which is

assumed to be the remaining project life of

operational assets in the Company’s

investment portfolio.

Commentary

Useful life is applied as an assumption in

determining the investment valuation of

the US terminal assets.

D e ﬁ n i t i o n

Value of largest investment divided by the

sum of all investments held in the Portfolio

together with any Cash and Cash

Equivalents, calculated at period end.

Commentary

The largest investment within the

Company’s portfolio is the US terminal

assets. At the time of investment, the

investment was less than 25% of GAV,

however, this has increased to 32.2% at

period end due to a fair value uplift on the

asset valuation.

D e ﬁ n i t i o n

Value of the three largest investments

divided by the NAV at period end.

Commentary

The three largest investments are the US

terminal assets, Brazilian solar PV and

Australian renewable power generation

and battery storage investment.

Climate-related KPIs

Total forecast renewable energy

generated (MWh)

224,570

D e ﬁ n i t i o n

Underlying portfolio energy generated

forecasts from renewable assets in KWh.

Commentary

The portfolio’s forecast generation for the

fi rst full year in MWh, equivalent of the

annual electricity use of 64,000 UK homes.

Total avoided carbon emissions

(tonnes CO

26,328

D e ﬁ n i t i o n

A measure of our success in investing in

projects that have a positive environmental

impact and reduce energy usage.

Commentary

The portfolio’s forecast of total avoided

emissions in tCO

e from fossil fuel derived

electricity removed from the grid is

equivalent of 61 hectares reforestation in

the UK.

Weighted Average Carbon Intensity

per $1m invested (tonnes CO

e / $m)

55.5

D e ﬁ n i t i o n

Portfolio’s exposure to carbon-intensive

companies, expressed in tonnes CO

e/$m

revenue.

Commentary

The calculation covers operational scope 1

and 2 emissions which includes imported

electricity to solar farms. Emissions from

assets under construction are not factored

into the calculations.

1 c.6,000 cars calculated based on the UK emission factor of 0.26kgCo2e/mile. Car emission factor is defi ned in the website https://www.gov.uk/

government/publications/greenhouse-gas-reporting-conversion-factors-2021. https://www.gov.uk/government/publications/greenhouse-gas-

reporting-conversion-factors-2021

2 Equivalent to c. 6,000 cars taken off the road in the UK

At Victory Hill,

we believe in high

impact investments

that resolve fundamental local needs for

societies and the environment by addressing

imbalances and structural gaps in energy

markets around the world

OUR APPROACH TO ESG

192t

Carbon monoxide

941t

PM10

Total annual savings for terminal storage assets on the Texas gulf coast.

18,492t

Sulphur oxides (SOX)

26,328t

Predicted Portfolio Annual CO

avoidance, equivalent

of c.6,000 cars taken off the road in the UK

244,570MWh

Portfolio estimated power generation, equivalent of

61 hectares reforestation in the UK

1 Annual savings estimated from HSFO throughout of the terminal and calculated by the third party sustainability expert.

2 Particulate matter (“PM”) is emitted as a product of combustion but also formed as a result of atmospheric reactions of chemicals such as NOx and SOx. PM is particularly damaging

to the human health as the particles are inhaled deep into the lungs and can enter the bloodstream aff ecting heart and lung performance, which itself can lead to premature death.

3 Air with a high concentration of carbon monoxide reduces the amount of oxygen that can be transported around the body to critical organs such as the brain and the heart.

4 SOx emissions are harmful to both the environment and human health. Gaseous SOx emissions also harm trees by damaging foliage and decreasing growth. Eff ects on human health

are largely on the respiratory system and can be lethal.

At Victory Hill, we understand that many investors value

the counsel of their advisors for their impact investment

decisions. We’re delighted that GSEO can continue playing

an essential role in driving the energy transition across

global markets and supporting long-lasting improvements

to energy infrastructure.”

ELEANOR FRASER-SMITH

HEAD OF SUSTAINABILITY, VICTORY HILL

Annual Report and Accounts 2021

Sustainability

UN Sustainable

Development Goals

(“SDGs”)

The Blueprint for driving the Company’s

investment strategy.

The SDGs focus directs investment into

solutions and technologies that address

the world’s biggest energy challenges

and provide opportunities to maximise

positive environmental and social

impacts.

Please refer to the Investment Policy

on page 10 for more information on

the SDGs.

Sustainability Strategy

A new global energy economy is

emerging according to the IEA World

Energy Outlook. However, for the world

to achieve net zero carbon emissions by

2050, there needs to be an ‘unparalleled

increase in clean energy projects and

infrastructure

.’ The IEA estimates this

investment to be nearly USD 4 trillion by

2030 with 70% of this investment needed

in developing economies. Most of this

transition related energy investment will

be carried out by the private sector.

The Company is capitalising on this new

economy and aims to facilitate an orderly

energy transition to a net zero carbon

future through targeting direct

investments in global energy

infrastructure.

The Company’s investment decision

process focuses on the energy sector

relevant SDGs as interpreted by the IEA

and those that relate to capital

investment in infrastructure.

These are distilled into four investment

pathways

1. Addressing Climate Change

2. Energy Access

3. Energy Effi ciency

4. Market Liberalisation

If a project does not meet one or more of

these four ‘Investment Pathways’, then

the Company does not invest. An

external assurance fi rm is used to

determine this compliance as well as

whether the project also “does harm” to

other 11 SDGs.

This is the way the Company does

business. The Investment Adviser has an

embedded sustainable development

culture that informs how the Company

and its assets are managed, funds are

invested, and stakeholders engaged.

This sustainable development culture is

implemented through a transparent

governance structure with clear roles

and responsibilities supported by

policies and practices as described

below.

1 Net Zero by 2050 - A Roadmap for the

Global Energy Sector

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

OUR APPROACH TO ESG CONTINUED:

Policies underpin the

commitment to

sustainable

investments

The Investor Adviser’s sustainability

policy and investment decision process

as described on page 7 underpin the

Company’s commitments to sustainable

investments and incorporate ESG issues

into the Company’s assets and partners’

business practices through a continuous

improvement management cycle. Taking

ownership and responsibility is critical to

the Company’s success. The policy sets

out commitments to track environmental

and social performance of investments.

All staff are sustainability investors, and

this is refl ected in the remuneration

policy and performance assessments, as

well as the professional development

and training provided to continually

enhance ESG capabilities.

Roles and Responsibilities

The Board

• Board member with responsibility for overseeing ESG and sustainability issues

• Board feedback on investments following due diligence

• Board review and feedback on principal risks including ESG risks

The Investment Adviser

• Oversight of the investment strategy, policies and ensuring due diligence

• Oversight of the Company risk register including material ESG risks

• Oversight of sustainability policy and ensuring a sustainable development culture

Investment Adviser Committees

• Investment committee ensures inclusion of SDG and ESG due diligence in

the investment process

• Risk, Operations and Compliance committee ensures principal ESG risks are

identifi ed and controls implemented

• Sustainability working group advises on the Investment Adviser ESG

strategy including targets. Monitors and tracks ESG performance of the

Company and investments

Investment Adviser Employees

• Supporting ESG management and metric reporting on assets

• Implementing the Company’s investment strategy as sustainability investors

• Training and knowledge sharing on sustainability investments and impacts

Investments

• ESG management systems to ensure continuous improvement

• Local stakeholder engagement

ESG Governance

Annual Report and Accounts 2021

Sustainability

Investors

• Invest capital to deliver projects

that facilitate the energy

transition to net zero while

managing ESG impacts.

Our partners

• Collaborate closely with delivery

partners and suppliers to ensure

quality, reliable and sustainable

assets that deliver on the energy

transition to net zero.

Communities and customers

• Provision of energy

infrastructure to enable

affordable energy access.

• Measure and manage project

economic, environmental and

social impact.

• Act with cultural and local

awareness and integrity.

Staff

• The commitment, quality and

integrity of staff of the

Investment Adviser drives the

Company’s success.

• The Investment Adviser’s

sustainable development culture

ensures a diverse and inclusive

workplace focused on health

and wellbeing with continual

investment in capabilities

through training, learning

and development.

Environment

• Responsible business practices

beyond commercial objectives

across geographic footprint and

focused on the SDGs.

• Measure the carbon and

environmental footprint.

• Make a positive contribution in

operating regions.

The Investment Adviser and operator

polices include commitments on health

and safety, anti-bribery and anti-

corruption, antibullying and harassment,

equality, diversity and inclusion,

whistleblowing, and anti-modern slavery

and trafficking, including responsible

procurement and codes of conduct.

The health and safety policies cover

expectations for risk-based management

systems for asset partners as well as

company occupational health.

The Investment Adviser’s stewardship

policy commits the Company to the

responsible allocation, management and

oversight of capital to create long-term

value for clients and beneficiaries leading

to sustainable benefits for the economy,

the environment and society. The

Investment Adviser’s objectives and

overall governance enable the Company

to comply with this approach. The

investment approach is long-term,

as is the ongoing assessment of the

stewardship activities.

Stakeholder Engagement

SDG 17, ‘Partnership for the Goals’

recognises that the SDGs can only be

met if all stakeholders work together to

mobilise financial resources globally.

This is the Company’s approach to

investments. The values of honesty and

integrity, transparency and partnership

are integral to stakeholder engagements.

Applying a value chain view to

investment impacts on the Company’s

stakeholders is an important element of

the Investment Adviser’s ESG risk

identification and management process.

ESG opportunities, risks and impacts on

both the company and from company

activities on stakeholders are in scope.

ESG policies

Sustainable development culture

Investment

Sustainability

Health &

Safety

People

Stewardship

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

ESG Risk Identification and Management Process

The Company identifi es and manages material ESG risks, impacts and opportunities and integrates these into investment

decisions and asset management to deliver sustainability aligned outcomes.

Values & Purpose

Company and Investment

Adviser values underpin the

business approach including

creativity, innovation, honesty,

and integrity.

The Investment Adviser’s

sustainable development

culture defi nes priorities within

the operating context and

guides Company strategy.

Investment Strategy

ESG issues are integrally

identifi ed by the investment

strategy.

All investments are

sustainability orientated.

Energy infrastructure

investments must align with the

SDGs and accelerate the energy

transition towards a net zero

carbon world and follow the

four investment pathways.

SDG driven due diligence

Investments must pass

sustainability eligibility criteria

- part of project due diligence.

An external assurance fi rm

assesses the investment

against the SDGs.

This is informed by the type of

investment; impact

assessments; and a review of

policies, practices and historical

performance.

Opportunities, risks and

impacts are identifi ed for

the business.

ESG Alignment Risk & Impact

Identiﬁ cation

Material risks and impacts at

the asset level are identifi ed,

informed by the SDG external

assurance, impact assessments,

engagement with partners, and

external benchmarks and

regulatory frameworks (UN PRI,

UNGC, TCFD, SFDR).

Engagement with operating

partners ensures ESG

alignment which may include

audits.

Measuring, Monitoring

& Assurance

Sustainability improvements are

monitored and tracked across the

portfolio by actively engaging

with partners and operators.

This includes regular calls to

partners and monthly reporting

requirements on key

performance indicators

to track progress.

Baseline data gathered in the fi rst

period will inform asset targets

and Company wide goals.

This data will be externally

verifi ed.

Action Planning

The Company engages with

partners via the Investment

Adviser to ensure mitigating

actions are in place addressing

ESG risks and impacts and to

maximise opportunities.

Values &

Purpose

ESG Alignment Risk

& Impact

Identification

SDG driven

due diligence

Action

Planning

Investment

Strategy

Measuring,

Monitoring

& Assurance

ESG Risk

Identification and

Management

Process

OUR APPROACH TO ESG CONTINUED:

Annual Report and Accounts 2021

Sustainability

Governance

An orderly energy transition towards climate change goals is the key opportunity for the Company. The Company’s strategy is to

target direct investments in energy infrastructure assets that support the SDGs, specifically those that address themes that

include climate change, energy access, energy efficiency and market liberalisation. Climate change issues are therefore

intrinsically considered by both the Board and the Investment Adviser. Although the Company is not required to report under the

recommendations of the TCFD, many of those recommendations are followed in order to enhance the Company’s climate-related

disclosures, which is mentioned in page 26.

The management of climate related risks and opportunities is integrated into the Company’s risk management framework. This

looks at the likelihood of a risk and the severity of impact with and without controls. This enables the Board and the Investment

Adviser to prioritise material risks for additional mitigation (see principal risk section on page 48).

The GSEO Board has oversight

of the business model and strategy.

It meets at least four times a year and is

responsible for the ongoing process of

identifying, carrying out a robust

assessment of, and managing and

mitigating the principal risks faced by

the Company.

The Board’s Audit Committee, which is comprised of three independent Directors,

meet at least twice a year and has responsibility for reviewing the Company’s risk

management systems. The committee reviews and updates the Company’s risk

Louise Kingham CBE, is the Board member with responsibility for ESG and

sustainability matters for the Company.

The Board has oversight of the Investment Adviser and the AIFM.

The Investment Adviser with the AIFM has

responsibility for implementing the

Company’s investment strategy, managing

the Company investments and reporting to

the Board.

There are three relevant subcommittees at

the Investment Adviser level which address

climate related issues.

The Risk, operations and compliance committee ensures risks are identified and

control measures are put in place to mitigate the risk

The Sustainability working group gives recommendations on ESG integration into

the investment strategy and asset management throughout an asset’s life. This

includes appropriate ESG target setting, monitoring and reporting.

The Investment Adviser and AIFM investment committees evaluate investment

opportunities aligned with the SDGs with the purpose of accelerating the energy

transition towards a net zero carbon world. An external assurance consultant is used

to advise on this project selection following a robust due diligence process.

The Investment Adviser works closely with

operating partners through regular

meetings and monthly reports covering

climate related issues.

Operational carbon footprints are calculated including life cycle analysis of energy

generation projects to understand their contribution to the Company net zero target.

Actions are put in place to reduce operation emissions and other environmental

impacts, including understanding supply chain and value chain impacts. Joint venture

agreements stipulate compliance with relevant policies.

For construction assets, partners are engaged to ensure ESG management practices

are aligned with the Investment Adviser’s sustainable development culture.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

FINANCE STABILITY BOARD TASK FORCE ON CLIMATE RELATED

FINANCIAL DISCLOSURES (TCFD)

Strategy

The Company’s investment policy is to

deploy the Company’s funds into a

diversified portfolio of global sustainable

energy infrastructure assets that

support the attainment and pursuit of

the SDGs where energy and energy

infrastructure investments are either a

direct contributor to the acceleration of

the Energy Transition towards a net zero

carbon world; or can be categorised into

one or more of the four “Investment

Pathways” that constitute its investment

themes. These Investment Pathways are:

Pathway I – Addressing Climate

Change

The objective is to reduce the impact of

greenhouse gases (“GHGs”) through

investing in renewable energy

technologies and fuel sources.

As such, the Company will invest a large

portion of its deployable capital into

renewable energy infrastructure assets

involved in power generation, energy

storage, and alternative fuel sources.

Pathway II – Energy Access

Energy is vital for our quality of life but

globally there is not universal access.

According to the UN, 800 million people

are without electricity or power, and

2.6bn people have no access to clean

fuels for cooking.

Growth in access to energy, which also

adheres to other SDGs such as Climate

Change, is a key challenge for

governments, investors and businesses

alike. There is an acknowledgement that

a level of pragmatism is required in

meeting SDG policies. Traditional

non- renewable energy sources are likely

to continue playing a role in the energy

mix of world economies. Investment in

distributed technologies that generate

electricity at or near where it is used

such as solar panels or combined heat

and power with carbon capture

technology will enable this access.

Pathway III – Energy Efficiency

Energy efficiency reduces GHGs and

reduces demand for energy imports into

domestic markets, thereby lowering the

cost of energy to households, businesses

and the economy overall.

Energy efficiency may also be achieved

at the grid and national levels through

investment in some of the following

areas, which the Company may consider

as part of its investment focus:

1. Power interconnectors

2. Grid resilience and

frequency response

3. Investment in ageing grid systems

which were developed as one-way

transmission systems.

Pathway IV – Market Liberalisation

Market Liberalisation, SDG 7, speaks of

ensuring universal access to affordable,

reliable and modern energy supply. The

liberalisation of energy markets is the

first stage in the development and

modernisation process of an energy

market.

Broadly speaking, energy market

liberalisation aims to:

i. facilitate the reduction of state-

ownership of key energy

infrastructure and sources of

energy production and supply,

ii. allow for competition and choice

across the energy value chain,

iii. facilitate the participation of private

investors and capital,

iv. favour consumers as competition

helps drive down household

energy costs, and

v. attract new investment into the

energy sector which improves

resilience, efficiency and access.

These energy markets typically also

experience high growth from the point

of liberalisation, and this helps create

new domestic energy market

participants that have the potential to

capture significant market share. The

Investment Adviser believes that market

liberalisation may occur in both

developed and developing economies.

The Company’s investments inherently

improve environmental performance, for

example, in Brazil, investment in a

portfolio of solar PV projects will

accelerate the growth of a sustainable

energy system by improving and

securing localised access to clean energy

and helping to lower Brazilian energy

prices. The flexible power project in the

UK will use a less pollutive fuel in natural

gas, as well as reduce emissions through

efficient carbon capture and reuse

technologies.

The Company’s energy infrastructure

assets are long term in nature. The

Company has aligned its time horizons

with the Net Zero Asset Managers

Initiative which supports the goal of net

zero GHG emission by 2050 or sooner

but it is recognised that the investments

have longer term potential where:

• Long term time horizon 2050

(25-30 years)

• Mid term time horizon 2030

(10–15 years)

• Short term time horizon 2025

(3-5 years).

FINANCE STABILITY BOARD TASK FORCE ON CLIMATE RELATED

FINANCIAL DISCLOSURES (TCFD) CONTINUED

Annual Report and Accounts 2021

Sustainability

Risk Management

The Company’s principal risk management process, as well as the ESG risk identification and management process described on

page 32, is how the relevant climate risks and opportunities are identified. This is considered within the selection and screening

of energy infrastructure investments. The risk management process considers type of infrastructure and geographic risks; as well

as engaging local partners on environmental management practices and processes; and understanding other stakeholder

perspectives.

There is uncertainty in terms of how climate change will impact individual operations as well as the impact of global efforts to

achieve an orderly energy transition. Initially the company has taken a qualitative approach to identifying climate related physical

and transition risks and opportunities. As the Company matures, it aims to develop understanding of the potential financial

impacts under different transition scenarios from these physical and transition risks on global assets. Generally the Company’s

financial materiality threshold for climate related risks and opportunities is 3% NAV after considering risk mitigation. However,

the unpredictability of climate related weather events means that the Company take a more cautious approach to asset

management and insurance to mitigate this in the longer term.

For physical climate risk the Company considers the geographical footprint and whether a project is in an area with high risk of

climate related hazard such as hurricanes, flooding, heat stress etc. The Company also considers the type of asset and whether

it will be impacted by changes in weather (e.g., wind and solar power), supply chain disruption (e.g., energy supply), and

market demands.

For transition risks, the Company’s investment process selects projects that align to the energy transition to net zero. The country

context in terms of policy support for energy transition projects is considered, as well as potential for (i) policy shift and

increased regulation, and (ii) market shifts away from the current trend to a low carbon future.

These risks are outlined below.

Risk Potential Impact Mitigation

Physical risks

Longer term changes in climate

patterns, e.g., reduction or increase

in wind levels, decrease in solar

optimal days impacting renewable

output and associated earnings.

Increased occurrence of extreme

weather events such as cyclones,

storms, flooding and heatwaves

causing damage to assets, disruption

to feedstocks, value chain, outputs

and associated earnings.

Reduction in output from assets

leading to reduced income stream.

This risk may increase over the

long term in the absence of climate

mitigation

The Company invests in a portfolio of energy transition

infrastructure assets, diversified by geography, technology

and capability. These investments are targeted at the

energy transition to net zero. This will provide a buffer

against variable weather patterns across the portfolio.

The Company also mitigates risk through project revenues

being contracted for the medium- and long-term.

At the asset level weather conditions are monitored

and many of the renewable projects have battery

storage capabilities to optimise energy input to the grid.

Meteorology and feedback due diligence is undertaken

before investment and reviewed regularly.

All assets have crisis management and business continuity

plans to respond to disruptions. The assets are required

to have continuous improvement management systems

to build capability and capacity in the local teams

and operations.

Increased insurance premium for

assets in high-risk locations.

Increased cost of doing business. When making investments the due diligence process

accounts for climate change risk and impacts.

The Investment Adviser employs an insurance specialist

when making investments and seeks to have appropriate

contractual warranties, indemnities and insurance

provisions in place to mitigate any costs relating to delays or

operation disruption. Insurance requirements are reviewed

on an ongoing basis.

IPCC Fifth Assessment Report

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Risk Management continued

Risk Potential Impact Mitigation

Transition risks

Market shifts may dampen ability

to engage investors on a broader

portfolio of energy transition

projects than a traditional European

renewable focus including different

geographies and new technologies

e.g., carbon capture and reuse.

Reduction in the availability

of capital to invest in energy

transition projects.

There is strong public demand for support of the renewable

energy market towards net zero carbon emission targets.

The Company is expected to hold most of its investments on

a long-term basis and the Board and the Investment Adviser

monitor the position on a regular basis.

The senior management team of the Investment Adviser has

extensive experience in executing strategies similar to that

of the Company.

Policy shift may introduce regulation

around climate change e.g.,

increased disclosure, taxes etc.

Increased cost of doing business. The Company is supportive of the policy aims of the

Disclosure Regulation and will comply with it and monitor

changes.

Reduction in the availability

of capital to invest in energy

transition projects.

The Company, via the Investment Adviser, engages with

partners and stakeholders to gather data and drive action

to improve ESG management and support disclosure

and policy requirements. This includes monthly metric

reporting on climate related KPIs including energy used

and generated, mitigation actions for risks and impacts,

as well as any energy reduction projects. IFC performance

standards are used to guide these interactions.

The Company investment strategy targeting the energy

transition is aligned with global policy movements on

climate change which would limit impact.

Transition opportunities

Decarbonisation policy and market

shifts will drive new renewable

energy, new fuels and energy

storage opportunities. This is

aligned with the Company’s strategy

to invest in energy transition

infrastructure.

Increased need for global energy

access from a mix of sources as

developing countries expand grid

access to populations.

Increased availability and deal

origination as well as capital

directed towards energy transition

opportunities in support of the

Company’s investment strategy.

A pipeline of investments is constantly being identified and

refreshed, with the Investment Adviser regularly reporting

to the Board on this pipeline.

Increased investment in energy

efficiency grid infrastructure leading

to increase in opportunities for

investment.

Reinforcement of intangible

benefits such as reputation,

brand and goodwill, together

with employee, partner and

stakeholder engagement.

The Investment Adviser uses the extensive experience of its

senior management team in executing strategies similar to

the Company to raise funds and successfully invest.

Market liberalisation in developed

and developing economies is

creating opportunity for market

share in renewable and alternative

energy opportunities in new

geographies.

Access to new markets leading to

an enhanced competitive position

and improved resource efficiency

reducing operating costs.

The Investment Adviser has engaged globally with

various companies and investors to support expansion

of the Company and sustainable energy infrastructure

investments.

Decentralisation of energy

generation creating new

opportunities for investment in

renewable and other sustainable

energy infrastructure.

Enhanced competitive position

reflecting shifting preferences and

increased revenues through new

solutions, access to new markets,

diversification, resilience planning,

relationships.

A pipeline of investments is constantly being identified, with

the Investment Adviser regularly reporting to the Board on

this pipeline.

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Annual Report and Accounts 2021

Sustainability

The risks and opportunities to a project’s underlying strategy have been considered qualitatively under diff erent transition

scenarios over a longer-term time horizon of 25-30 years to understand the resilience of the Company’s position. The diagram

shows the risk to investment opportunities in diff erent energy transition scenarios and the link to physical climate risk to those

investments under diff erent future states.

The analysis of the Company’s business strategy under diff erent scenarios took into consideration the current geographic

locations of assets and critical Tier 1 supply chain companies such as solar panel manufacturers. The Company’s business

strategy supports a transition scenario. Commitments

made at COP26 demonstrate policy and market momentum, towards

energy transition and in support of the Company’s investment policy.

The fi nancial impact and resilience of the Company’s investment business strategy to diff erent climate scenarios is inherent in

the Investment Adviser’s fi nancial modelling processes. The energy transition is the focus of the Company’s investment

strategy and the macro focus on the four investment pathways means that the fi nancial impact of an orderly transition is

considered. It is the Company’s objective to accelerate an orderly transition via its investments. It is also expected that the

investments would be resilient in case of a failure to achieve the energy transition. The Investment Adviser’s fi nancial and

valuation models include the impact of diff erent variables such as energy demand and future mix, key commodity prices, and

demographic shifts such as population growth. The models are also geographically tailored, as the national mandated targets

for renewable and other energy source penetration in the energy mix, as well as carbon reduction policies of the investment

country and region are critical in understanding investment impact and suitability.

Business as usual

C Scenario

Business as usual scenario:

emissions from countries continue

to rise and there is little eff ort to

avert the resulting economic and

social damage such as that

described in the IEA World Energy

Outlook Current Policies Scenario.

Physical Risk

In this scenario physical risk from

longer term change in weather

patterns is high leading to ﬁ nancial

losses from potential supply chain

and business interruption and shut

down of operations. Access to

capital and investment

opportunities to implement the

Company’s strategy aligned with

the energy transition may be more

diffi cult and therefore investment

risk is also high.

Physical Risk

In this scenario physical risk from

longer term changes in weather

patterns is lower but disruption to

supply chains and operations may

still occur due to the late

implementation of climate goals.

Access to capital and investment

opportunities to implement the

Company strategy aligned with the

energy transition may be limited in

the short term but has the potential

to increase in the mid to long-term

reducing the investment risk.

Physical Risk

In this scenario physical risk from

longer terms changes in weather

patterns is low as global climate

goals are achieved. Access to

investment opportunities and

capital to implement the Company

strategy aligned with the energy

transition is high as country policies

and investors support energy

transition goals.

Disruptive transition

Disruptive transition scenario:

there is a sudden change of policy

towards climate goals which results

in a disruptive response. This

happens because global emissions

are not meeting net zero goals and

governments will abruptly try and

implement them.

Orderly transition

Orderly transition scenario:

where countries reduce emissions

in line with Paris Agreement in a

consistent and measured way.

Investment/Capital

opportunity risk

Low

High

Low Low Low

High High High

Amount of fi nance committed to achieving 1.5°C now at scale needed to deliver the transition, Glasgow Financial Alliance for Net Zero

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Metrics and Targets

The Company’s goal is to align with the SDGs and focus on sustainable energy infrastructure assets that enable the transition to

net zero. To align with the Paris Agreement commitments the portfolio target is to achieve net zero carbon emissions by 2030.

The first year of investments achieved a mix of operational and construction assets. As the Company matures through 2022,

with more operational assets, baseline data will be collected to inform local and global targets. It is not yet possible to perform a

portfolio trend analysis on climate related metrics. However, a life cycle analysis (‘LCA’) of the energy production assets has been

completed to understand the carbon impact and footprint of each of the renewable power generation investments and the

future carbon sequestration project (figure 1). This analysis was completed by a third party sustainability expert with the

methodology described below.

The data was calculated on a 25-year life cycle and includes import and export data that is indicative of full life emissions avoided.

The LCA process for each asset was completed using actual and predicted asset data as far as possible supported with data

derived from the EcoInvent 3.8 database. This approach enabled the embodied CO

e emissions within each asset to be calculated.

These include emissions associated with raw material extraction, manufacture, transport, construction, operations and

decommissioning and recycling. The objective was to understand the true avoided emissions for each asset and account for

emissions associated with the development of each asset.

The avoided emissions calculations take in to account local factors such as carbon intensity of the energy type being replaced at a

local level and local irradiance levels. The expected decarbonisation of traditional baseload energy supply aligned with country

commitments towards net zero by 2050 was also factored in. The calculations therefore accounted for expected decarbonisation

trajectory of grid supplied energy and the CO

e avoided figures at all phases of the assets lifecycle for each country in which

assets are located. However, a declining grid carbon intensity has not been carried through for Brazil as the grid has established

low carbon intensity and Brazil is not considered aligned to net zero by 2050. The Brazilian calculations therefore do not account

for the type and carbon intensity of electricity generation being displaced, nor the benefits of distributed power generation.

A reduction in electricity losses along transmission and distribution lines means the remote assets in Brazil will provide a more

efficient and cleaner source of energy locally, supporting future growth and energy access.

Figure 1: Energy Production Assets Carbon Life Cycle Analysis

Units Australia Brazil UK

Embodied Emissions kg CO

e 79,655,870 114,276,353 1,321,045

Operational Emissions kg CO

e 1,133,373 12,867,804 93,210,017

Total Lifecycle Emissions kg CO

e 80,789,243 127,14 4,157 94,531,062

Emissions Avoided kg CO

e 321,997,694 197,048,974 246,557,717

Net Emissions Avoided kg CO

e 241,208,451 69,904,817 152,026,655

Average Saving per Annum kg CO

e 12,879,908 7,881,959 9,862,309

Saving per kWp kg CO

e 71,555 3,885 24,656

Payback years 6 16.1

9.6

The portfolio renewable and carbon sequestration assets have an average CO

payback of 10 years putting the Company on a net

zero trajectory. Total net CO

e emissions avoided per year is 26,328,037 the equivalent of taking almost 6,000

UK passenger

vehicles off the road.

Based on current hydro power, low carbon grid displacement rather than fossil fuel power generation

This equivalent was calculated using the UK Government 2021 conversion factor for an average car.

https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021

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FINANCIAL DISCLOSURES (TCFD) CONTINUED

Annual Report and Accounts 2021

Sustainability

As a non energy production asset, operational scope 1, 2 and 3 emissions were calculated and reported below for the US

Terminals. This accounts for natural gas and electricity usage at the site, as well as fuel supply chain calculations. Scope 1, 2 and 3

emissions are defined below.

Scope 1 2,771,262 kg CO

Scope 2

758,505 kg CO

Scope 3 766,371 kg CO

Total 4,296,138 kg CO

*US Grid sub region for Texas (ECRT) emission factor used

GHG Emissions Scope Levels

• Scope 1 refers to all direct GHG emissions (e.g., heating from natural gas boilers; business owned vehicles).

• Scope 2 refers to indirect GHG emissions from consumption of purchased electricity, heat, or steam.

• Scope 3 refers to other indirect emissions not covered in Scope 2 that occur in the value chain, including both upstream and

downstream emissions. Scope 3 emissions can include transport-related activities in vehicles not owned or controlled by the

reporting entity such as business travel and transportation of product, electricity-related activities (e.g., transmission and

distribution losses), outsourced activities, and waste disposal.

Case Study: Displacing Polluting Fuels

Reducing the impact of air pollution (SDG3.9) is a priority of the energy industry and an important element of the energy

transition. A material opportunity for the US Terminals is the annual savings from reduction of harmful pollutive fuels. Air

pollution poses a major risk to health and economies globally. Reducing pollution from vehicles is a priority for Mexican

metropolitan areas. In Mexico vehicles burn fuel oil with a very high sulfur content which exacerbates air quality issues caused by

increasing urbanisation and motorisation trends. The displacement of high sulfur fuel oil reduces PM2.5, PM10, SOX, NOX and CO

emissions. The US Terminal assets provide an aggregation point and facilitate the transfer of high sulfur oil currently produced at

a surplus in the Mexican fuel market. The fuel is, as a result of the terminals’ proximity, north bound and destined for greater and

more efficient refining capacity in the United States. Once refined, the PM2.5 contribution of the fuels is cut materially to levels

experienced in Europe and the United States. The terminals also serve a southbound export of cleaner fuels back into the

Mexican fuel market in order to displace usage of highly emitting fuels. The asset also provides infrastructure opportunities for

future fuels such as hydrogen and biofuels storage and transport as technology advances.

The annual avoided air emissions are estimated below from the terminal storage throughput of heavy sulfur fuel oil calculated by

third party sustainability experts.

Avoided Air Emissions

PM10

941t

Carbon Monoxide

192t

Sulfur Oxides

18,492t

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Carbon intensity calculations for the portfolio as recommended by TCFD for 2021 are provided below. These calculations are

limited as they do not consider emissions from construction assets or any avoided emissions from operational renewable assets.

The calculation covers operational scope 1 and 2 emissions which includes any imported electricity to the solar farms. The

numbers are anticipated to change next year as the Company grows and new assets come online.

Weighted Average Carbon Intensity (WACI)

55.5 t CO

e/$M

Total Carbon Emissions

51.2 t CO

Carbon Footprint

0.12 t CO

e/$M

The WACI has been compared to various MSCI indices

to give context to the Company’s carbon exposure. The Company’s

ambition is to keep this exposure low in line with its strategy and commitments to sustainable development and energy transition

goals.

Fund/Index Name WACI

VH GSEO

55.5

MSCI ACWI Low Carbon

66.7

MSCI ESG Leaders

MSCI ACWI Index

154

MSCI World Index

132

MSCI Emerging Markets

322

MSCI Emerging Markets ESG Leaders

225.4

All Investment Adviser employees have sustainability goals linked to the overarching strategy. These goals form part of staff

performance metrics and associated remuneration which is communicated in the Investment Adviser’s remuneration policy.

Remuneration is fundamentally linked to climate related issues and specifically the energy transition to net zero.

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FINANCIAL DISCLOSURES (TCFD) CONTINUED

1 WACI: Portfolio’s exposure to carbon-intensive companies, expressed in tons CO

e/$M revenue.

2 The absolute greenhouse gas emissions associated with a portfolio, expressed in tons CO

3 Total carbon emissions for a portfolio normalized by the market value of the portfolio, expressed in tons CO

e / $M invested.

4 Index Carbon Footprint Metrics. Carbon footprint of flagship MSCI Indexes as of October 29, 2021.

Annual Report and Accounts 2021

Sustainability

The Investment Adviser’s sustainable development culture informs the Company’s actions and priorities. As participants to the

UN Global Compact, they are aligned with the principles. The Company has assessed the material environmental, social and

governance (ESG) risks, opportunities and impacts of the Investment Adviser and the Company’s investments. The portfolio is a

mix of operating and construction assets; consequently data reported reflects a snapshot of operating asset data and a

combination of qualitative and quantitative discussion.

Baseline data will be collected through 2022 to support target setting.

Environmental

Environmental performance is at the core of the Company’s investment strategy to enable the energy transition to net zero

through energy infrastructure investment. Material issues include portfolio and Investment Adviser GHG emissions.

Investment Adviser employees worked remotely from home in 2021. Using the EcoAct

methodology for calculating carbon

emissions of homeworking, the Company has estimated the impact result from office equipment and gas heating. This does not

account for use of different market instruments such as installed heat source pumps and renewable energy contracts. Below are

the carbon emissions in 2021.

589 kg/CO

Scope 1

37 kg/CO

Scope 2

The Investment Adviser opened an office in January 2022 and will calculate baseline energy use and emissions associated through

the first year. Emissions data for the portfolio can be found on pages 38 to 39 which includes forecast avoided emissions.

Biodiversity

Construction investments are targeted on brownfield industrial sites and low quality, unused agricultural land avoiding

environmental damage to pristine greenfield sites, native forests, carbon sinks or land use change away from food crops. The

Company, through its screening process during the investment phase, avoids activities that negatively affect biodiversity in

sensitive areas. All investments have had environmental impact studies and/or assessments completed as regulated by the local

authority to identify any significant impact on the environment and ensure mitigating action.

Environmental impact assessments/studies completed

100%

Case study: Offsetting land clearance in Solar Projects

In Brazil 32ha of land has been or will be cleared for the solar generation projects. These sites are located on greenfield unused

agricultural land avoiding damage to native forests, carbon sinks or land use change from productive food crops. All sites are

required an environmental impact assessment and any vegetation removed is offset by planting of higher quality trees, vegetable

crops or through payments to the local authorities to plant trees elsewhere.

Water

Volume of water used in the US Terminals facility is primarily used for steam generation. Water used at solar farms for panel

cleaning will be collected in 2022. There were no emissions to water in 2021.

Volume of water used 20,709,810 litres

Waste

Effective waste management helps reduce energy use and conserves natural resources. An important aspect of asset

management is to encourage reduction, recycling and reuse. The Company is committed to reporting waste generation and

disposal from investments. There was limited waste produced on operating solar farms asset in 2021. The Company will collect

information on waste from maintenance and construction work through 2022.

Waste (non-hazardous) produced 13.5 tonnes

Hazardous Waste (tonnes) 0

In Texas large waste items such as palettes and synthetic bags are reused. A new recycling waste contractor in 2022 will ensure

more of the waste is recycled.

1 The reported data was collected directly from assets unless otherwise indicated. Reporting is required monthly. It is the company’s objective to be transparent with ESG practices

and data disclosure and aims to enhance reporting in subsequent years.

2 Homeworking Emissions Whitepaper, EcoAct, an atos company.

3 As per national or local regulatory authority requirements.

4 Primarily relates to US Terminals assets. The remainder of the portfolio was in construction during period.

ESG PERFORMANCE

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Case study: Reusing Carbon

Circular economy activities are important in achieving waste reduction by providing products for other sectors. The UK

Flexible Power with carbon capture and reuse project aims to demonstrate how to decarbonise combined heat and power

(CHP) using proven technology to create a low carbon circular economy. The operating partners consider all waste products as

potential resources and focus on eliminating inefficiencies. The carbon captured in this plant will be supplied to the food and

beverage sector.

The Company will be identifying key resource consumption for the construction assets through 2022 to identify efficiencies.

Health and Safety

Health and safety of asset employees is a priority for the Company. The Company expects all sites to have policies and

management systems in place to drive continuous improvement in health, safety and environmental management. The

Investment Adviser aims to engage sites in management system certification and internal audits in 2022 and will create

targets for this. The Investment Adviser monitors performance of investments through monthly reporting. Due to the diverse

businesses and technologies in the Company, material health and safety hazards and actions will vary.

% of assets with health and safety policies in place – 100%

2021 Health and Safety data

Brazil solar sites under construction

In January 2022 there was a fault at the Mobilong Solar Farm which was quickly rectified by the site representative. Faulty parts were replaced and a full root cause

investigation completed.

UK investment not started construction in 2021

An event not causing harm but has the potential to cause injury of ill health - dangerous occurrences

An event that results in injury or ill health

Incident includes near misses and accidents

Average across solar generation sites

Accident number / no of hours worked

Usual hours worked per week/average hours usually worked per week by FTE

USA Brazil

Australia

Number of near misses

0 0 0 N/A

Number of accidents

0 0

0 N/A

Number of incidents

(#) 0 0 0 N/A

Incident-free-days

(#) 275 138

0 N/A

Total accident rate

0 0 0 N/A

Total lost time

0 0 0 N/A

Number of fatalities (Employees & Contractors) 0 0 0 N/A

The data reflects the short life span of projects so far, low employment requirements for the project, and the focus of partners on

health and safety practices.

ESG PERFORMANCE CONTINUED

Annual Report and Accounts 2021

Sustainability

Health and Safety continued

Case study: Actively promoting health and safety at the US Terminals Asset.

Health & Safety actions include:

• Quarterly emergency response tabletop exercises to test preparedness for incidents working closely with relevant authorities

such as the maritime and coastguard agency.

• All staff received safety training including Occupational Safety and Heath Administration (OSHA), HAZMAT, transportation tank

car offloading and incident response.

• Facility upgrade including dike walls to improve the containment infrastructure of the site in the event of a spill.

• Routine maintenance and inspection of facilities.

Governance

The Company expects the employees of its service providers and partners to work with honesty and integrity, aligned to the

Company values and sustainable development culture. This will be incorporated into an Investment Adviser code of conduct and

ethics in 2022.

The Investment Adviser and 100% of assets have policies, procedures and training in place covering:

• Anti-bribery and anti-corruption

• Whistleblowing

The Company respects internationally recognised labour rights, including the elimination of all forms of forced and compulsory

labour, the effective abolition of child labour, and the elimination of discrimination in respect of employment and occupation.

The Investment Adviser’s due diligence process involves third-party review of relevant project contractor and technology

providers policy documents and reports. To date, third-party assessments have concluded that all parties meet the required

threshold scores. The company intends through 2022 to continue to work with assets to ensure they have policies in place that

align with the Investor Adviser’s sustainability policy, the SDGs and UN Global Compact.

There were no reports recorded through the whistleblowing process in 2021.

For more information the Investment Adviser statement on the UK Modern Slavery Act can be found on the Victory Hill Capital

Group website. The Investment Adviser has high recruitment standards and background checks, and operating partners are

expected to have the same to mitigate against human and labour rights risks. These risks are assessed low due to the nature of

the regulated asset management business. Due diligence is included in the investment decision process as described.

Supply Chain engagement

Risks in the supply chain are mitigated by selecting reputable suppliers and using appropriate contract language in service and

supplier contracts. For potentially high-risk suppliers, for example, PV panel manufacturers operating in China, the Investment

Adviser has engaged with operators and suppliers to understand any exposure to human rights issues such as child labour.

The Investment Adviser will engage with operating partners through 2022 to support roll out of a supplier code of conduct that

addresses ESG expectation where one does not currently exist. The Company will also collect local economic expenditure data on

supply chain and local communities to understand broader impact.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

People

Diversity & Inclusion

SDG 5 on gender equality recognises the importance of equal female participation in decision making to achieve sustainable

development goals. The Company recognises the benefits of a diverse workforce to drive creativity, innovation and

for cultural sensitivity across the global portfolio. The Company, through its investments, is committed to providing equal

opportunities for all employees irrespective of race, colour, religion or belief, ethnic or national origins, gender, age, family status,

sexual orientation, disability, or political opinion.

The Investment Adviser has an equality and diversity and inclusion policy which applies to all aspects of employment, including

recruitment and selection, appraisal, training and promotion, pay and conditions and to any dealings with customers and clients.

Selection for employment, promotion, training or any other benefit will be based on aptitude and ability.

All assets are required to have a comparable policy that addresses equal opportunities and anti-discrimination. The Company

intends to collect gender pay gap information across the portfolio as the workforce and sample data set increases, and more

reliable data is available.

50% gender split in the Company’s board.

38% female employees at the Investment Adviser.

Partner Employment Summary

Community engagement

Through its investment strategy the Company is committed to creating positive impacts for local communities. This may be

through enabling local access to affordable and reliable energy, improved air quality and associated health benefits, direct

employment, indirect economic benefits such as local procurement or through environmental improvement for example, tree

planting programmes. The Company aims to quantify these impacts in 2022.

All partners are required to report monthly metrics on community engagement including employment and spend with local

suppliers. They are also required to have grievance procedures or similar processes so communities can feedback on concerns

that may arise during operation or construction.

Charitable Donations

Bottletop

The Investment Adviser has created a charitable partnership with the Bottletop Foundation. Victory Hill donates 2% of its annual

investment management fee earned for the provision of investment advice to the Company, to supporting the BottleTop

Foundation, #TOGETHERBAND Campaign and the various initiatives and causes that it supports.

To date this donation has supported eight grassroots beneficiaries across the world through two associate programmes Power

for the People and Renewable World. These organisations are focussed on delivering the Sustainable Development Goals

including to provide clean, reliable and renewable energy to remote and undeserved communities.

The funding also enabled the #TOGETHERBRAND campaign to further global engagement around the Sustainable Development

Goals enabling it to generate over 6 billion impressions.

USA Brazil Australia

Total

Total Number of employees 27 29 10 10 76

% of Female employees 7 35 10 30 82

Staff turnover 15% 3% 0 0 0

Australia employee number include those structured as contractors as standard practice in Australia.

Construction asset. Local employment to start in 2022.

ESG PERFORMANCE CONTINUED

Annual Report and Accounts 2021

Sustainability

Sustainable Finance Disclosure Regulation SFDR Statement

The Company has sustainable investment as its objective. Article 9 funds under the SFDR are products that have a sustainable

investment objective. As of 31 December 2021, 71% of the Company’s investments were aligned with EU Taxonomy economic

activities. The remaining 29% were invested in economic activities with a different environmental objective.

Sector Activity Environmental objective Allocation

Energy Electricity generation using solar photovoltaic* Climate change mitigation (a) 19%

Energy Storage of electricity* Climate Change mitigation (a) 20%

Energy Flexible Power & Carbon Capture & Reuse* Climate change mitigation (a) 32%

Energy Liquid Storage Pollution prevention and control (e) 29%

* EU taxonomy aligned

The Company’s core objective is to generate stable returns, principally in the form of income distributions, by originating,

structuring, and facilitating the deployment of the Company’s equity into a diversified portfolio of global sustainable energy

infrastructure assets. The Company’s investments in Sustainable Energy Infrastructure must either:

1. Support the attainment of the UN sustainable Development Goals where energy and energy infrastructure investments are a

direct contributor to the acceleration of the Energy Transition towards a net zero carbon world; or

2. Can be categorised into one or more of the four “Investment Pathways” that guide the Company’s investment strategy

informed by SDGs 3,7,8,9,13 and 17. These Investment Pathways are:

1. Addressing Climate Change

2. Energy Access

3. Energy Efficiency

4. Market Liberalisation

For further details on the investment strategy see page 10.

Initial investments were made through 2021 in a mix of operating and construction assets. To date, the Company had committed

£247 million in a portfolio spanning 24 assets across 4 countries – US, UK, Australia, Brazil – and includes technologies such as

liquid storage, solar PV, solar PV and BESS and flexible power and carbon capture and reuse. The year ending 31 December 2022

will be the baseline year for data collection on the indicators listed below.

The Company will report on the following indicators:

- Capital investment into energy transition focused assets (£)

- Return on embodied carbon through renewable energy generation (tCO

- MWh of renewable energy produced

- Carbon dioxide equivalent avoided (TCO

- Tonnes of carbon monoxide avoided

- Tonnes of particulate matter (PM10) avoided

- Tonnes of sulphur oxides (SOX) avoided

- Tonnes of carbon dioxide sequestered

During the investment decision process external assurance opinions are obtained on whether the investment aligns with the six

Sustainable Development Goals focused on in the strategy and whether it does no harm to the remaining eleven. If the

investment does not align with the strategy or is considered to do harm then the investment does not proceed.

This initial assessment considers a number of data points including the type of investment, the geographical location, previous

environmental and social impact assessments and, partners or operators’ practices and processes on Environmental, Social and

Governance (ESG) factors. The due diligence process includes third-party review of relevant project contractor and technology

providers policy documents and reports. To date, our independent third-party assessment has concluded that all investments

meet the required threshold scores.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Percentage total commitment in GBP

ESG PERFORMANCE CONTINUED

Indicators for adverse impacts on sustainability factors

The ESG risk identification and management process is discussed on page 32. Data on these material environmental and social

impacts identified by the Company are reported in the sustainability section on page 28.

The Investment Adviser requires all assets to have policies aligned to relevant SDGs as explained in the investment strategy and

the UN Global Compact therefore recognising the UN Guiding Principles on Business and Human Rights as well as the OECD

Guidelines for Multinational Enterprises.

Sustainability Benchmark

Currently no index is designated as a benchmark for determining the attainment of the sustainability for the Company. This will

be considered once baseline data is collated.

Annual Report and Accounts 2021

Sustainability

SECTION 172 & STAKEHOLDERS

Engaging

withour

Stakeholders

The Investment Adviser along with the

Company’s Corporate Broker regularly

meets with the Company’s shareholders.

Feedback from shareholders is reported

to the Board.

Investment Adviser

The Investment Adviser has a

fundamental role in promoting the

long-term success of the Company. The

Board regularly reviews the performance

of the investment portfolio at quarterly

board meetings and performs a formal

annual evaluation of the performance of

the Investment Adviser. This contact

enables constructive dialogue between

the Investment Adviser and the Board.

Other key service providers

The Board believes that strong

relationships with its other key service

providers (Company Secretary,

Administrator, AIFM, Depositary and

Registrar) are also important for the

long-term success of the Company. There

is regular contact between the Board

and the Company’s other key service

providers. The Management Engagement

Committee performs an annual review of

the services provided by the AIFM,

Company Secretary, Administrator,

Depositary and Registrar to ensure that

these are in line with the Company’s

requirements.

his section of the Annual

report covers the Board’s

considerations and

activities in discharging

their duties under section

172 of the Companies Act

2006, in promoting the success of the

Company for the benefi t of the members

as a whole.

This statement includes consideration of

the likely consequences of the decisions

of the Board in the longer term and how

the Board has taken wider stakeholders’

needs into account.

Stakeholder identiﬁ cation

and management

The Board has identifi ed the major

stakeholders in the Company’s business.

On an ongoing basis the Board monitors

both potential and actual impacts of the

decisions it makes in respect of the

Company upon those major stakeholders

identifi ed.

Shareholders

The Board believes that transparent

communication with shareholders is

important.

As a public company listed on the

London Stock Exchange, the Company is

subject to the Listing Rules and the

Disclosure Guidance and Transparency

Rules. The Listing Rules include a listing

principle that a listed company must

ensure that it treats all holders of the

same class of shares that are in the same

position equally in respect of the rights

attaching to such shares.

Employees

As an investment trust, the Company

does not have any employees as all of

its day-to-day functions are carried out

by third party service providers.

However, the Company has a Board of

Directors who are non-executive. The

Company’s Board is comprised of two

male and two female directors. The

Company has a policy on diversity

which is disclosed in the Governance

section of this report.

Lenders

The Company does not make use of

structural debt in order to achieve its

yield and total return targets. To date

the portfolio has been fully equity

funded allowing for effi cient asset

acquisition. Once assets have been

acquired and are operational, Victory

Hill, through its extensive international

network of funding partners, seeks the

most effi cient debt funding on a

non-recourse basis. The leverage is

therefore currently held at asset level

only.

Society and the environment

As an investor in sustainable energy,

the Company’s assets have an impact

on the environment. The Company has

a Sustainability Framework which is

published on the Company’s website

and our approach to ESG is set out on

page 28 of the Sustainability Report.

Key decisions made during

the period

Placing of Ordinary Shares

The Investment Adviser has identifi ed a

strong pipeline of investment

opportunities. The Company

successfully raised £242.6 million at its

initial public off ering in February 2021

and in November 2021, the Board

announced a proposed placing of

Ordinary Shares pursuant to which £70

million was raised through the issuance

of 68,965,518 New Ordinary Shares at a

price of 101.5p per share.

Declaration of ﬁ rst dividend

On 1 November 2021, the Board

announced the Company’s fi rst interim

dividend which was paid at a rate of

1.25p per Ordinary Share to

shareholders on the register as at close

of business on 12 November 2021.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Risk Description of Risk Risk Impact Mitigation

1. Risks relating to the Company

Reliance on

Investment

Adviser

The Company relies on

the Investment Adviser

for the achievement of its

investment objective.

The departure of some key

individuals or all of Victory Hill’s

investment professionals could

prevent the Company from

achieving its investment objective.

There can be no assurance that

the Directors will be able to find a

replacement adviser if Victory Hill

resigns.

The Investment Adviser consists of five

managing partners supported by three

investment professionals. A collegiate

approach is taken to Investment Advisory

activities with the team having a broad

range of skills to support the pursuit of the

Company’s investment objective.

The performance of the Company’s

Investment Adviser is closely monitored by

the Board.

In addition, at least once a year the

Management Engagement Committee

performs a formal review process to

consider the ongoing performance of

the Investment Adviser and makes a

recommendation on the continuing

appointment of the Investment Adviser

to the Board.

The initial term of the Investment Advisory

agreement is five years

Reliance on

third party

service

providers

The Company has no

employees and the Directors

have all been appointed

on a non-executive basis.

Therefore, the Company is

reliant upon its third party

service providers for the

performance of certain

functions.

Service provider control failures

may result in operational and/or

reputational problems and may

have an adverse effect on the

Company’s NAV, revenues and

returns to shareholders.

The Board oversees and keeps under review

the provision of services by each of the

Company’s service providers on an ongoing

basis.

The Management Engagement Committee

performs a formal review process to

consider the ongoing performance of its

service providers.

Currency

risks

The Company will make

investments which are based

in countries whose local

currency may not be Sterling

and the Company may make

and/ or receive payments

that are denominated

in currencies other than

Sterling.

When foreign currencies are

translated into Sterling there could

be a material adverse effect on the

Company’s profitability, the NAV

and the price of shares.

Investments are held for the long term.

The Company intends to enter into

hedging arrangements for periods of up

to 12 months to hedge against short-term

currency movements.

Currency risk is taken into consideration

at the time of investment and is included

in the Investment Adviser’s assessment of

minimum hurdle rate from investments.

2. Risks relating to the portfolio investment strategy

Illiquidity of

investments

The Company’s investments

in sustainable energy

infrastructure investments

are illiquid and may be

difficult to realise at a

particular time and/or at the

prevailing valuation.

Shareholder returns could be

materially negatively impacted

should the Company be required

to realise them in the near term

(requirement for early liquidity).

The Company is expected to hold most

of its investments on a long-term basis.

The Investment Adviser and the Board will

monitor the position on a regular basis.

Cash flow forecasts of the Company are

also monitored on a regular basis to ensure

sufficient liquidity buffer at the Company

level.

3. Risks relating to investments

Construction

risks

Construction project risks

associated with the risk of

inaccurate assessment of a

construction opportunity,

delays or disruptions which

are outside the Company’s

control, changes in market

conditions, and the

inability of contractors to

perform their contractual

commitment.

Failure to complete projects in

accordance with expectations could

adversely impact the Company’s

performance and shareholder

returns.

The Investment Adviser monitors

construction carefully and reports

frequently to the Board and AIFM.

The Investment Adviser undertakes

extensive due diligence on construction

opportunities and seeks to have appropriate

insurances in place to mitigate any

costs relating to delays. In addition, the

Investment Adviser seeks to utilise EPC

contractors that can provide single point,

lump sum turnkey arrangements wherever

possible.

PRINCIPAL RISKS AND UNCERTAINTIES

The Prospectus issued in January 2021 includes details of risks faced by the business. The Board considers that the principal risks

and uncertainties faced by the Group are as follows:

Annual Report and Accounts 2021

Sustainability

Risk Description of Risk Risk Impact Mitigation

3. Risks relating to investments continued

Due diligence

Due diligence may not

identify all risks and liabilities

in respect of an investment.

Failure to identify risks and

liabilities may impact the

profitability or valuation of the

investment.

The senior management team at the

Investment Adviser have extensive

experience in executing strategies similar to

that of the Company.

Where appropriate, in accordance with a

disciplined process, due diligence conducted

by the Investment Adviser may be

supplemented, for example, by independent

legal, tax and technical advisers.

Demand, usage

and throughput

risks

Residual demand, usage

and throughput risk can

affect the performance of

infrastructure investments.

The actual return to shareholders

may be materially lower than the

target total return.

The Investment Adviser performs extensive

due diligence on the project economics

vs. alternative energy options before

entering into a project. Furthermore, project

revenues are largely contracted for the

medium to long term.

The Investment Adviser constantly reviews

assumptions made regarding the demand,

usage and throughput vs. actual results.

Meteorology

risks

Dependency on meteorology,

meteorology forecasts

and other feedstocks may

have a negative impact on

the performance of the

Company’s investments.

The actual return to shareholders

may be materially lower than the

total target return.

The Investment Adviser performs extensive

due diligence on meteorology and other

feedstocks before entering into a project.

The Investment Adviser regularly reviews

meteorology and feedstock factors and will

action any potential remedies.

Counterparty

risks

Counterparties defaulting on

their contractual obligations

or suffering an insolvency

event.

The failure by a counterparty

to make contractual payments

or perform other contractual

obligations or the early termination

of the relevant contract due to the

insolvency.

Due diligence on counterparty risk is

performed before entering into projects and

counterparty risk is monitored on a regular

basis.

Uninsured loss

and damage

The risk that an investment

may be destroyed or suffer

material damage, and the

existing insurances may not

be sufficient to cover all the

losses and damages.

The actual return to shareholders

may be materially lower than the

target total return.

An independent insurance adviser is

appointed for each project to review project

risks in conjunction with the Investment

Adviser and to ensure that appropriate

insurance arrangements are in place.

Insurance requirements are reviewed on an

ongoing basis.

Curtailment

risks

Investments may be subject

to the risk of interruption

in grid connection or

irregularities in overall power

supply.

In such cases, affected investments

may not receive any compensation

or only limited compensation.

Extensive due diligence is performed on

each project before investment.

The Investment Adviser constantly reviews

curtailment risks.

Commodity

price risks

The operation and cash flows

of certain investments may

depend upon prevailing

market prices for electricity

and fuel, and particularly

natural gas.

The actual return to shareholders

may be materially lower than the

target total return.

The Company intends to mitigate these risks

by entering into (i) hedging arrangements;

(ii) extendable short, medium and long-

term contracts; (iii) fixed price or availability

based asset-level commercial contracts.

4. Risks relating to the Company’s shares

Discount

to NAV

The share price may not

reflect the underlying NAV.

Discount management

provisions being unable

to be satisfied may result

in a significant share price

discount to NAV.

Lack of liquidity in the Company’s

shares could negatively impact on

shareholder returns.

The Board, Corporate Broker and

Investment Adviser monitor discount or

premium to NAV at which the shares trade.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Risk Description of Risk Risk Impact Mitigation

5. Risks relating to regulation

Regulation

The Company is exposed to

the risk that the competent

authorities may pass

legislation that might hinder

or invalidate rights under

existing contracts as well

as hinder or impair the

obtaining of the necessary

permits or licenses necessary

for sustainable energy

infrastructure investments in

the construction phase.

The actual return to shareholders

may be materially lower than the

target total return.

The Company aims to hold a diversified

portfolio of sustainable energy

infrastructure investments and so it is

unlikely that all assets will be impacted

equally by a single change in legislation.

The Investment Adviser ensures that

contracts are not exposed to government

subsidies, thus mitigating exposure to policy

risks linked to contract pricing.

There is also strong public demand for

support of the renewables market to hit net

zero carbon emission targets.

The Investment Adviser monitors the

position and provides regular reports to the

Board on the wider macro environment.

6. Operational risks

Operation and

management

risks of the

portfolio of

assets

Poor management or

operational performance of

an asset by the Company’s

operating partners and

selected operations and

maintenance providers.

The actual return from single

portfolio assets may be lower than

the target total return for the asset.

Operating partners operate to an annual

budget and a series of key performance

indicators to ensure contractual alignment

between the relevant parties.

Valuation risks

Valuation of the portfolio of

assets is based on financial

projections and estimations

of future results.

Actual results may vary significantly

from the projections, which may

reduce the profitability of the

Company leading to reduced

returns to Shareholders and a fall

in the Company’s NAV.

The Company has adopted a valuation

policy which was disclosed in the Company’s

prospectus.

Fair value for each investment is calculated

by the Investment Adviser. However, if

considered necessary and appropriate, the

Board may appoint an independent valuer.

The Investment Adviser has significant

experience in the valuation of energy assets.

The Investment Adviser has an independent

valuation committee to perform and

challenge valuations. In addition, the

Investment Adviser partnership committee

reviews and challenges valuations.

The Board and AIFM review the valuations

provided quarterly by the Investment

Adviser.

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Annual Report and Accounts 2021

Sustainability

Risk Description of Risk Risk Impact Mitigation

7. Climate related risks

Physical risks

Longer term changes in

climate patterns, e.g.,

reduction or increase in wind

levels, decrease solar optimal

days impacting renewable

output and associated

earnings.

Increased occurrence of

extreme weather events such

as cyclones, storms, flooding

and heatwaves causing

damage to assets, disruption

to feedstocks, value chain,

outputs and associated

earnings.

Reduction in output from assets

leading to reduced income stream.

This risk may increase over the

long term in the absence of climate

mitigation

GSEO is investing in a diversified portfolio

of energy transition infrastructure by

geography, technology and capability. These

investments are targeted at the energy

transition to net zero. This will provide a

buffer against variable weather patterns

across the portfolio.

The Company also mitigates risk through

project revenues being contracted for the

medium- and long-term.

At the asset level weather conditions are

monitored and many of the renewable

projects have battery storage capabilities

to optimise energy input to the grid.

Meteorology and feedback due diligence

is undertaken before investment and

reviewed regularly.

All assets have crisis management and

business continuity plans to respond to

disruptions. The assets are also required to

have continuous improvement management

systems to build capability and capacity in

the local teams and operations.

Increased insurance

premium for assets in high-

risk locations

Increased cost of doing business When making investments the due diligence

process accounts for climate change risk

and impacts.

The Investment Adviser employs an

insurance specialist when making

investments and seeks to have appropriate

contractual indemnities and insurance

provisions in place to mitigate any costs

relating to delays or operation disruption.

Insurance requirements are reviewed on an

ongoing basis.

Transition

risks

Market shifts may dampen

ability to engage investors

on a broader portfolio of

energy transition projects

than a traditional European

renewable focus including

different geographies and

new technologies e.g., carbon

capture and reuse

Reduced access to capital There is strong public demand for support

of the renewables market towards net zero

carbon emission targets.

The Company is expected to hold most of

its investments on a long-term basis and the

Board and Investment Adviser monitors the

position on a regular basis.

The senior management team at the

Investment Adviser have extensive

experience in executing strategies similar to

that of the Company.

Policy shift may introduce

regulation around climate

change e.g., increased

disclosure, taxes etc

Increased cost of doing business

Reduced access to capital

The Company is supportive of the policy

aims of the Disclosure Regulation and will

comply and monitor changes.

The Company engages with partners and

stakeholders to gather data and drive

action to improve ESG management and

support disclosure and policy requirements.

This includes monthly metric reporting on

climate related KPIs including energy used

and generated, mitigation actions for risks

and impacts, as well as any energy reduction

projects. IFC performance standards are

used to guide these interactions.

The Company’s investment strategy

targeting the energy transition is aligned

with global policy movements on climate

change which would limit impact.

1 IPCC Fifth Assessment Report

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Risk management

The risk management framework established by the Board has been designed to identify, evaluate and mitigate the significant

risks faced by the Company. A risk management framework can only provide reasonable, not absolute, assurance. The Board has

contractually delegated the management of the investment portfolio, the registration services, administrative services and other

services to third party service providers and reliance is therefore placed on the internal controls of those service providers. Risk

assessments are performed on a regular basis and this is facilitated through the use of a detailed risk assessment programme

which categorises the risks identified and the controls in place to mitigate those risks.

Risk appetite

The Board’s risk appetite is aligned with the Company’s investment objective and policy for which the Board has ultimate

responsibility. The investment objective and policy is included in the Strategic Report in this Annual Report. Identification and

management of risks is integrated into the Investment Adviser’s investment process.

Emerging risks

As part of its risk assessment, the Board considers emerging risks and any such risks identified are included in the detailed risk

assessment programme.

Climate risk and TCFD

Climate risk and TCFD disclosures are included on pages 33 to 40 of this document.

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Annual Report and Accounts 2021

Sustainability

Going concern

The Directors have reviewed the fi nancial

position of the Company and its future

cash fl ow requirements, taking into

consideration current and potential

funding sources, investment into existing

and near-term projects and the

Company’s working capital

requirements.

The Directors, in their consideration of

going concern, have reviewed the

fi nancial position and comprehensive

future cash fl ow models for the Company

prepared by the Company’s Investment

Adviser, taking into consideration current

and potential funding sources,

investment into existing and near-term

projects and the Company’s working

capital requirements. Based on these

forecasts and the assessment of

principal risks described in this report,

that it is appropriate to prepare the

fi nancial statements of the Company on

the going concern basis.

The Directors believe that there are

currently no material uncertainties in

relation to the Company’s ability to

continue for a period of at least 12

months from the date of the approval of

the fi nancial statements and, therefore,

has adopted the going concern basis in

the preparation of the fi nancial

statements.

Viability Statement

In accordance with Principle 21 of the AIC

Code, the Directors has assessed the

prospects of the Company over a period

longer than 12 months required by the

relevant “Going Concern” provisions. The

Directors have considered the nature of

the Company’s assets and liabilities, and

associated cash fl ows, and has

determined that fi ve years, up to

31 December 2026, is the timescale over

which the performance of the Company

can be forecast with a material degree of

accuracy and therefore is the

appropriate period over which to

consider the viability.

The Investment Adviser has considered

the sensitivity of the fi nancial projections

to a range of key assumptions, such as a

reduction in cash fl ows from portfolio

companies, restriction in debt

availability, and an inability for the

Company to raise additional equity. The

results of this stress testing showed that

the Company would be able to withstand

the impact of these scenarios occurring

over the fi ve-year period.

The Directors confi rm they have carried

out a robust assessment of the emerging

and principal risks facing the Company,

including those that would threaten its

business model, future performance,

solvency, liquidity, and dividend cover for

a 5-year period. The Directors’

assessment has been made with

reference to the principal risks and

uncertainties and emerging risks

summarised on pages 48 to 52 and how

they could impact the prospects of the

Company.

As an Investment Company, part of the

Company’s objective is to produce stable

dividends while preserving the capital

value of its investment portfolio.

Following regular pipeline updates from

the Investment Adviser, the Directors

believe that the Company is well placed

to manage its business risks successfully

over both the short and long term, the

Directors have a reasonable expectation

that the Company will be able to

continue in operation and to meet its

liabilities as they fall due for a period of

at least fi ve years.

Approval of the Strategic Report

The Strategic report was approved by

the Board of Directors.

BERNARD BULKIN, PHD, OBE

Chair of the Board of Directors

18 March 2022

GOING CONCERN AND VIABILITY STATEMENT

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Annual Report and Accounts 2021

Governance

Chair’s Introduction

am pleased to present to you the

corporate governance section of

this Annual Report. The Company

is an externally managed

investment company with its

day-to-day activities outsourced

to the Investment Adviser, AIFM and

other key service providers. The Board

consists of four non-executive directors,

two of whom are male and two are

female.

The Board is committed to high

standards of corporate governance and

has put in place a robust framework to

enable it to perform proper oversight of

the Company’s service providers and to

fulfi l its role in promoting the long-term

success of the Company.

This section of the Annual Report

provides details of the corporate

governance framework which has been

implemented and the work of the Board

and its committees during the period

under review.

Statement of Compliance

The Board has considered the

Principles and Provisions of the AIC

Code of Corporate Governance (the

‘AIC Code’). The AIC Code addresses

the Principles and Provisions set out

in the UK Corporate Governance Code

2018 (the ‘UK Code’), as well as setting

out additional Provisions on issues

that are of specifi c relevance to the

Company.

The Board considers that reporting

against the Principles and Provisions

of the AIC Code, which has been

endorsed by the Financial Reporting

Council, provides more relevant

information to shareholders.

The Company has complied with the

Principles and Provisions of the AIC

Code since its listing on the London

Stock Exchange on 2 February 2021

other than as otherwise disclosed in

this report. The AIC Code is available

on the AIC website (www.theaic.co.

uk). It includes an explanation of how

the AIC Code adapts the Principles

and Provisions set out in the UK Code

to make them relevant for investment

companies.

Bernard Bulkin

Chairman of the Board of Directors

As this was the fi rst year of the Company,

the Board put in place all the governance

mechanisms to run the Company at a

high standard, and at the end of the year

conducted a self-evaluation to see how we

can continuously improve our corporate

operations. We are always happy to

discuss any aspect of the Company with

our shareholders, whose ongoing support

is much appreciated.”

BERNARD BULKIN

CHAIRMAN OF THE BOARD OF DIRECTORS

Chair’s

Introduction

GOVERNANCE AT A GLANCE

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

MEET THE BOARD

Providing

Experienced

and Focused

Leadership

MARGARET STEPHENS

CHAIR OF THE AUDIT AND RISK

COMMITTEE AND INDEPENDENT

NON-EXECUTIVE DIRECTOR

LOUISE KINGHAM, CBE

INDEPENDENT

NON-EXECUTIVE DIRECTOR

RICHARD HORLICK

CHAIR OF THE MANAGEMENT

ENGAGEMENT COMMITTEE

AND INDEPENDENT

NON-EXECUTIVE DIRECTOR

Skills and experience

28 year career with KPMG, 16 years as

a partner focused on infrastructure and

international M&A. Currently Chair of

Audit of the Nuclear Liabilities Fund,

member of advisory committee for The

Infrastructure Forum and NED of AVI

Japan Opportunity Trust plc. Previously

a non-executive board member and

Chair of the audit and risk committee

at the Department for Exiting the EU.

Skills and experience

Over 28 years in the energy industry.

She is currently BP’s UK head of country

and senior vice president for Europe.

Prior to this, Louise was CEO of the

Energy Institute. She is current non-

executive board member of the Energy

Saving Trust and Chair of its charitable

Foundation. She is also an Ambassador

for the POWERful Women initiative

and chair of BITC’s Climate Action

leadership team.

Skills and experience

Over 35 years in the investment

management industry. Chair of CCLA

Investment Management and Chair of

BH Macro plc. Former roles at Newton

Investment Management, Fidelity

International, including CEO of Fidelity

Management Trust Company and board

member, global head of investments at

Schroders, and co-founder of Spencer

House Capital Management.

BERNARD BULKIN,

PHD, OBE

CHAIR AND INDEPENDENT

NON-EXECUTIVE DIRECTOR

Skills and experience

Over 35 years in the energy industry.

Experienced Board Member and

Chairman. Currently board director of

ATN International, a NASDAQ-listed

company, and member of the board

of energy group ARQ Ltd. Business

and commercial roles including chief

scientist of BP, former member of the

UK Sustainable Development

Commission and Chair of The Offi ce of

Renewable Energy of UK Government.

Annual Report and Accounts 2021

Governance

RICHARD LUM

CO-CHIEF INVESTMENT OFFICER,

VICTORY HILL CAPITAL ADVISORS LLP

EDUARDO MONTEIRO

CO-CHIEF INVESTMENT OFFICER,

VICTORY HILL CAPITAL ADVISORS LLP

LAWRENCE BUCKNELL

GENERAL COUNSEL.

VICTORY HILL CAPITAL ADVISORS LLP

Skills and experience

27 years in natural resource structured

fi nance and banking. Worked at Mizuho

Financial Group, Standard Chartered

Bank, West LB Markets and Bayern LB.

Skills and experience

21 years in M&A and corporate fi nance

advisory. Worked for Mizuho Financial

Group, Société Générale, ABN Amro

Bank and JP Morgan CIB.

Skills and experience

26 years as legal counsel in investment

banking, structured fi nance and asset

management. Worked for Mizuho

Financial Group, Henderson Global,

F&C and Fladgate Fielder LLP.

ANTHONY CATACHANAS

CHIEF EXECUTIVE OFFICER,

VICTORY HILL CAPITAL ADVISORS LLP

MICHAEL EGAN, CA, CFA

CHIEF FINANCIAL OFFICER,

VICTORY HILL CAPITAL ADVISORS LLP

Skills and experience

17 years in private equity and

investment banking. Worked for Mizuho

Financial Group, Goldman Sachs, Credit

Suisse Securities, ABN Amro Bank, the

European Central Bank and the

European Parliament.

Skills and experience

21 years of principal M&A, investment

banking, restructuring and structured

fi nance. Worked for Steinhoff

International, Lehman Brothers

and KPMG.

MEET THE INVESTMENT ADVISERS

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

CORPORATE GOVERNANCE STATEMENT

Board committees

The Company has established an Audit

Committee which is chaired by Margaret

Stephens and consists of Richard Horlick

and Louise Kingham. The Board

considers that the members of the Audit

Committee have the requisite skills and

experience to fulfil the responsibilities of

the Audit Committee. A report of the

Audit Committee is included on page 66

of this Annual Report.

The Company has established a

Management Engagement Committee

which is chaired by Richard Horlick and

consists of Bernard Bulkin and Louise

Kingham. The principal duties of the

Management Engagement Committee

are to consider the terms of appointment

of the Investment Adviser and AIFM, and

annually reviews those appointments

and the main terms of the Investment

Management Agreement and the

Investment Advisory Agreement.

A report of the Management Engagement

Committee is included on page 69 of this

Annual Report.

The Company has established a

Nomination Committee which is chaired

by Bernard Bulkin and consists of all of

the Directors. The Nomination

Committee has been established for the

purpose of reviewing the Company’s

succession plan and identifying and

nominating candidates for the office of

director of the Company. A report of the

Nomination Committee is included on

page 65 of this Annual Report.

The Company has established a

Remuneration Committee which is

chaired by Bernard Bulkin and consists

of all of the Directors. The Remuneration

Committee’s principal duties are to

consider the Directors’ fees, and to make

various recommendations in respect of

the Directors’ remuneration policy and

implementation thereof. A Remuneration

Report is included on page 63 of this

Annual Report.

Each Committee has adopted formal

terms of reference, which are reviewed

at least annually, and copies of these are

available on request from the Company

Secretary.

Composition of the Board

At the date of this report, the Board

consists of four non-executive Directors

including the Chairman, of whom two are

male and two are female. Margaret

Stephens has served since her

appointment on 6 November 2020. All

other Directors have served since their

appointment on 30 October 2020.

The Board believes that during the

period ended 31 December 2021 its

composition was appropriate for an

investment company of the Company’s

nature and size. All of the Directors are

independent of the Investment Adviser

and AIFM. All of the Directors 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. The Board has

adopted a policy restricting the tenure of

Directors, including the Chairman, to

nine years. This was agreed on so as to

align with corporate governance best

practices. The Board is in the process of

developing a succession plan.

In accordance with the AIC Code, all the

Directors will retire and offer themselves

for re-election at the AGM of the

Company to be held on 27 April 2022.

The Board recommends all the Directors

for re-election for the reasons

highlighted above and in the

performance appraisal section of this

report.

The Directors have appointment letters

which do not provide for any specific

term. Upon joining the Board, any new

Director receives an induction and

relevant training is available to Directors

on an ongoing basis.

A procedure has been adopted for

Directors, in the furtherance of their

duties, to take independent professional

advice at the expense of the Company. All

Directors have access to the advice of the

Company Secretary on an ongoing basis.

A policy of insurance against Directors’

and officers’ liabilities is maintained by

the Company.

he Company has complied

with the recommendations

of the AIC Code and the

relevant provisions of the

UK Code, except as set out

below.

The Company is an externally managed

investment company. All the Company’s

day-to-day management and

administrative functions are outsourced

to third parties. For the reasons set out

in the AIC Code, the Board considers the

provisions of the UK Code set out on

page 59 are not relevant to the position

of the Company, being an externally

managed investment company and the

Company does not therefore comply

with them. In addition, as the Board

consists of four non-executive directors

who work collaboratively in their

decision making process, it does not

consider it necessary to appoint a senior

independent director. The Board also

considers it appropriate for the

Chairman to be a member and to act as

Chairman of the Remuneration

Committee as he was independent on

appointment and remains so and due to

the fact that the Board consists solely of

non-executive directors.

Leadership

The Board of Directors

The Board is responsible for the effective

stewardship of the Company’s affairs.

Investment policy and strategy are

determined by the Board. It is also

responsible for the borrowing policy,

dividend policy, public documents such

as the annual report and financial

statements and corporate governance

matters. In order to enable the Directors

to discharge their responsibilities, the

Board has full and timely access to

relevant information. A formal schedule

of matters reserved for the Board has

been adopted.

The biographies of the Directors are set

out on page 56.

Annual Report and Accounts 2021

Governance

The UK Corporate Governance Code includes provisions relating to:

UK Code provision Explanation

Remuneration of executive directors As an externally managed investment

company, the Board does not include any

executive Directors. As such, the UK Code’s

principles in respect of executive Directors’

remuneration are not applicable.

The role of the chief executive As an externally managed investment

company, the Board does not include any

executive Directors. As such, the UK

Corporate Governance Code’s principles in

respect of the role of the chief executive

are not applicable.

The need for an internal audit function As explained in the Report of the Audit

Committee, this is not considered to be

appropriate given the nature and

circumstances of the Company. The Audit

Committee keeps the need for an internal

function under periodic review.

Meeting Attendance

During the period from the Company’s listing on 2 February 2021 to 31 December

2021, the Directors attended the following meetings:

Total Board

Audit

Committee

Management

Engagement

Committee

Nomination

Committee

Remuneration

Committee

Number of formal

meetings held 13 7 3 1 1 1

Bernard Bulkin* 10 7 – 1 1 1

Louise Kingham 13 7 3 1 1 1

Margaret Stephens** 12 7 3 - 1 1

Richard Horlick 13 7 3 1 1 1

In addition to the above there was 1 ad hoc committee meeting to deal with approval

of documentation and administrative matters.

* not a member of the Audit Committee

** not a member of the Management Engagement Committee

Conicts of Interest

Directors’ interests are reviewed at each

quarterly board meeting. The Directors

must advise the Company Secretary and

Board as soon as they become aware of

any conflicts of interest. Directors who

have conflicts of interest will not take

part in discussions where they are

conflicted.

It is the responsibility of each individual

Director to avoid an unauthorised

conflict arising. Directors must request

authorisation from the Board as soon as

they become aware of the possibility that

a conflict may arise. The Board is

responsible for considering Directors’

requests for authorisation of conflicts

and for deciding whether or not the

relevant conflict should be authorised.

When the Board is deciding whether to

authorise a conflict or potential conflict,

only Directors who have no interest in

the matter being considered are able to

participate in the relevant decision, and

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 Board are able

to impose limits or conditions when

giving authorisation if they think this is

appropriate in the circumstances. The

Directors must also comply with the

statutory rules requiring company

directors to declare any interest in an

actual or proposed transaction or

arrangement with the Company.

Board diversity and inclusion policy

The Board’s policy is based on its belief

that the Board should have a diverse

range of experience, skills and

backgrounds. When making

recommendations for new appointments

to the Board and planning for Board

succession, the Nomination Committee

will take into consideration the

recommendations of the AIC Code and

other guidance on boardroom diversity

and inclusion.

Tenure Policy

The Board’s policy on tenure is that

continuity and experience are

considered to add significantly to the

strength of the Board. The Board’s policy

for Directors, including the Chairman, is

that they serve for no more than nine

years. This ensures the regular

refreshment of the Board and its

Committees and forms an integral part

of the Board’s succession planning.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

CORPORATE GOVERNANCE STATEMENT CONTINUED

Effectiveness

Performance evaluation

A formal annual performance evaluation

is performed on the Board, the

committees, the individual Directors and

the Company’s main service providers on

an annual basis. The results of the

evaluation are detailed in the Report of

the Nomination Committee on page 65

of this document.

A review of the Company’s key service

providers has been undertaken. The

review comprised open and closed

ended questions. Following the review

process, the Board agreed that the

performance and fees of each service

provider was satisfactory and that it was

in the Company’s best interest that the

engagement of each service provider

continues for the foreseeable future.

Internal control

Overview

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 Company’s internal controls

framework. The Board believes that the

existing arrangements present an

appropriate framework to meet the

internal control requirements. By these

procedures the Directors have kept

under review the effectiveness of the

internal control system throughout the

period under review and up to the date

of this report.

Financial aspects of internal control

The Directors are responsible for the

internal financial control systems of the

Company and for reviewing their

effectiveness.

These controls aim to ensure the

maintenance of proper accounting

records, the reliability of the financial

information upon which business

decisions are taken, reports are

published and the assets of the Company

are safeguarded. As stated above, the

Board has contractually delegated to

external agencies the services the

Company requires, but it is fully

informed of the internal control

framework established by the AIFM, the

Investment Adviser and the

Administrator to provide reasonable

assurance on the effectiveness of

internal financial controls.

The key procedures include review of

management accounts, monitoring of

performance at quarterly Board

meetings, segregation of the

administrative function from investment

management, maintenance of

appropriate insurance and adherence to

physical and computer security

procedures.

Other aspects of internal control

The Board holds quarterly meetings,

plus additional meetings as required.

Between these meetings there is regular

contact with the AIFM, the Investment

Adviser, the Company Secretary and the

Administrator.

The Company’s key service providers

report to the Board on operational and

compliance issues. The AIFM provides

reports to the Board, which are reviewed

at the quarterly Board meetings.

The Administrator provides management

accounts to the Board, which enables the

Board to assess the financial position of

the Company. 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.

This contact with the key service

providers enables the Board to monitor

the Company’s progress towards its

objectives and encompasses an analysis

of the risks involved. The effectiveness of

the Company’s risk management and

internal controls systems is monitored

and a formal review, utilising a detailed

risk assessment programme, has been

completed. This has included

consideration of the Administrator’s and

the Registrar’s internal controls report.

There are no significant findings to

report from the review.

Principal and emerging risks

The Directors confirm that they have

carried out a robust assessment of the

principal and emerging 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 is set out in the Strategic

Report. As part of its risk process, the

Board seeks to identify emerging risks to

ensure that they are effectively managed

as they develop and recorded in the

Company’s risk register.

Annual Report and Accounts 2021

Governance

Relationships with

shareholders and

stakeholders

Shareholder relations

The Board and the Investment Adviser

continue to develop relationships with

shareholders through regular updates to

the market, including the publication of

quarterly fact sheets. At Board meetings,

regular investor feedback is provided by

the Investment Adviser and the Broker

and the views of existing or potential

shareholders about the Company are

discussed.

If any shareholder wishes to contact the

Chairman directly, they should contact

the Company Secretary whose details

are given in the Company Information.

Annual General Meeting

At least twenty-one days’ notice of the

AGM shall be given to all the members

and to the Independent Auditor. All other

general meetings shall also be convened

by not less than twenty-one days’ notice

unless the Company offers members an

electronic voting facility and a special

resolution reducing the period of notice

to not less than fourteen days has been

passed, in which case a general meeting

may be convened by not less than

fourteen days’ notice in writing.

A special resolution will be proposed at

the AGM to reduce the period of notice

for general meetings other than the

Annual General Meeting to not less than

fourteen days. Reduced notice will only

be used in circumstances that the

Directors consider to be appropriate.

The Notice of AGM sets out the business

of the AGM and any item not of an

entirely routine nature is explained in

this Annual Report.

Separate resolutions are proposed for

each substantive issue. The Company’s

AGM will be held on 27 April 2022.

Relations with other stakeholders are

described in the s.172 statement on

page 47.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

REMUNERATION POLICY

n 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”), it is

proposed to table an ordinary resolution

to approve the Directors’ remuneration

policy at the Company’s AGM to be held on

27 April 2022. The provisions set out in this

policy shall continue until they are next put

forward for shareholder approval. The

remuneration policy must be put forward

for shareholder approval at a maximum

interval of three years. In the event of any

proposed material variation to the policy,

shareholder approval will be sought for

the proposed new policy prior to its

implementation. If approved by

shareholders, the remuneration policy will

remain in force until the Annual General

Meeting of the Company in 2025, at which

time a further resolution will be proposed.

The proposed remuneration policy

is set out below:

Fees

The Directors’ fees are determined

within the limits set out in the Company’s

Articles of Association and they are not

eligible for bonuses, pension benefits,

share benefits, share options, long-term

incentive schemes or other benefits.

The Directors’ fees are paid at annual

rates and do not have any variable or

performance related elements. The

Board may determine that additional

remuneration may be paid, from time to

time, to any one or more Directors in the

event such Director or Directors are

requested by the Board to perform extra or

special services on behalf of the Company.

The Directors shall be entitled to fees at

such rates as determined by the Board

subject to the maximum aggregate fee

limit of £500,000 set out in the

Company’s Articles of Association.

The Directors shall also be entitled to be

reimbursed for all expenses incurred in

performance of their duties. These

expenses are unlikely to be of a

significant amount. Fees are payable

from the date of appointment as a

Director of the Company and cease on

date of termination of appointment.

The Board will not pay any incentive fees

to any person to encourage them to

become a Director of the Company. The

Board may, however, pay fees to external

agencies to assist the Board in the search

and selection of Directors.

Statement of consideration of

conditions elsewhere in the Company

The Company has no employees.

Therefore, the process of consulting with

employees on the setting of the

remuneration policy is not applicable.

Review

The Directors’ remuneration will be

reviewed on an annual basis by the

Board and any changes are subject to

approval by the Board.

The remuneration payable to the

Directors will take into account a number

of factors, inter alia, the experience of

the Directors, the complexity of the

Company and prevailing market rates.

Directors’ service contracts

The Directors do not have service

contracts with the Company.

The Directors are not entitled to

compensation on loss of office. The

Directors have appointment letters

which do not provide for any specific

term. However, in accordance with the

AIC Code, they are subject to annual

re-election.

Statement of consideration

of shareholders’ views

The Company is committed to ongoing

shareholder dialogue and takes an active

interest in voting outcomes. If there are

substantial votes against resolutions in

relation to Directors’ remuneration, the

Company will seek the reasons for any

such vote and will detail any resulting

actions in the next Directors’

remuneration report.

Effective date

The above remuneration policy will be

put to shareholders at the forthcoming

Annual General Meeting and, if passed,

shall be effective from that date.

Current and future policy

Component Director Purpose of reward Operation

Annual fee Chairman of Board Fees for services as

chairman of a plc

Determined by the Board

Annual fee Other Directors Fees for services as non-

executive directors of a plc

Determined by the Board

Expenses All Directors Reimbursement of expenses

incurred in the performance

of duties

Submission of appropriate

supporting documentation

Annual Report and Accounts 2021

Governance

100

110

105

120

115

Feb Mar April May June July Aug Sept Oct Nov Dec

Pence

2021

VH GSEO PLC Total Return nruteRerahSllAESTF

Bloomberg Sterling Corporate Bond Index Total Return

DIRECTORS’ REMUNERATION REPORT

Remuneration policy

The remuneration policy is set out on

page 62 of this Annual Report.

Voting on Remuneration Matters

As this will be the fi rst AGM at which the

remuneration policy and report will be

put forward for shareholder approval,

there is nothing to report in this Annual

Report in respect of voting on

remuneration matters.

Annual statement on

policy implementation

The Company’s Remuneration

Committee consists of all of the Directors

and is chaired by Bernard Bulkin.

The Remuneration Committee makes

recommendations to the Board of

Directors on matters in connection with

the remuneration of the Directors.

Remuneration

The Company currently has four non-

executive Directors.

The rates of Directors’ remuneration can

be found below:

Role Remuneration per annum (£)

Chair 70,000

Director 50,000

This year, the Remuneration Committee

made the following recommendations

concerning the remuneration guidelines

for the coming years, which were adopted

and approved by the Board of Directors:

i. Directors’ fees will remained

unchanged until 1 January 2023; and

ii. remuneration will be linked to

infl ation by reference to the change

in the UK retail price index (“UK RPI”).

With eff ect from 1 January 2023,

remuneration will be adjusted for

infl ation in the period between

1 January 2021 to 31 December

2022. Thereafter, remuneration will

be adjusted by UK RPI on a yearly

basis as at the end of December in

each year.

Performance

Due to the positioning of the Company in the market as a listed investment

trust that invests in sustainable energy infrastructure to produce stable and

infl ating dividends for investors while aiming to preserve capital value, the

Directors consider that the Company has characteristics of both an equity

index and a bond index. The graph below compares the total shareholder

return of the Company relative to a return on a hypothetical holding over the

same period in the FTSE All-share index and the Bloomberg Barclays Sterling

Corporate Bond Index, starting from the date of the IPO on 2 February 2021 to

31 December 2021.

Total shareholder return is the measure of returns provided by a company to

shareholders refl ecting share price movements and assuming reinvestment of

dividends.

There are no other taxable benefi ts payable by the Company other than

certain expenses which may be deemed to be taxable. None of the above fees

was paid to third parties.

A non-binding ordinary resolution to approve the Directors’ Remuneration

Report contained in the Annual Report for the period ended 31 December

2021 will be put forward for approval at the Company’s AGM to be held on

27 April 2022.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

The law requires the Company’s

Independent Auditor to audit certain

disclosures provided in the annual report

on remuneration. Where disclosures are

audited they are indicated as such. The

Independent Auditor’s opinion is given in

the Independent Auditor’s Report.

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 confi rm that the above

Directors’ Remuneration Report

summarises, as applicable, for the fi nancial

period to 31 December 2021:

a. the major decisions on

Directors’ remuneration;

b. any substantial changes relating

to Directors’ remuneration

made during the period ended

31 December 2021; and

c. the context in which the changes

occurred and decisions have

been taken.

Bernard Bulkin

Remuneration Committee Chairman and

Chair of the Board of Directors

18 March 2022

Single total ﬁ gure of remuneration audited

Directors

Date of appointment to the

board

Fees for the period ended 31 December 2021*

£’000

Bernard Bulkin 30 October 2020 64

Richard Horlick 30 October 2020 46

Louise Kingham 30 October 2020 46

Margaret Stephens 6 November 2020 46

* Fees accrued with eff ect from Initial Admission on 2 February 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 investment adviser’s fees

and other expenses incurred by the Company.

Period ended 31 December 2021

£’000

Directors’ fees 202

Investment Adviser’s fee 2,218

Other expenses 1,136

Dividends paid and proposed 3,033

irectors shareholdings audited

The Directors had the following shareholdings in the Company as at 31 December

2021 all of which are benefi cially owned. There has been no change in the below

shareholdings in the period between 31 December 2021 and the date of this report.

Directors Ordinary Shares as at 31 December 2021

Bernard Bulkin 20,000

Richard Horlick 200,000

Louise Kingham 10,000

Margaret Stephens 10,000

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

Governance

REPORT OF THE NOMINATION COMMITTEE

Role of the Nomination Committee

The Nomination Committee meets

formally at least once a year for the

purpose, amongst other things, of leading

the process for appointments, ensuring

plans are in place for orderly succession

to the Board, overseeing the development

of a diverse pipeline for succession and

any other matters as specified under the

committee’s terms of reference. This

includes ensuring that any appointments

and succession plans are based on merit

and objective criteria, and, within this

context, promotes diversity of gender,

social and ethnic backgrounds, cognitive

and personal strengths.

The Nomination Committee has been

in operation throughout the period and

operates within clearly defined terms

of reference.

Meetings

There has been one Nomination

Committee meeting in the period.

Attendance is included in the Corporate

Governance Statement on page 59.

Activities

During the course of the period to

31 December 2021 the Nomination

Committee has undertaken a review of the

policies on tenure, diversity and inclusion.

Discussions were also held surrounding

the board evaluation process which would

take place during the financial period

ending 31 December 2022.

Performance Evaluation

A Board evaluation has been completed

prior to the publication of this Annual

Report. The evaluation was performed

by the Nomination Committee. The

results of the evaluation were reviewed

by the Chairman and discussed with the

Board. An evaluation of the Chairman

was also performed. The results of the

evaluation of the Chairman were

reviewed by the Chairman of the

Management Engagement Committee

and discussed with the Chairman. The

conclusions from the Board evaluation

demonstrated that the Directors and the

Chairman showed the necessary

commitment for effective fulfilment of

their duties.

Re-election of Directors

The Nomination Committee and the

Board consider that the performance of

each Director continues to be effective

and demonstrates the commitment

required to continue in their present

roles, and that each Director’s

contribution continues to be important

to the Company’s long-term sustainable

success. This consideration is based on,

amongst other things, the business skills

and industry experience of each of the

Directors, as well as their knowledge and

understanding of the Company’s

business model. The directors’

biographical details are set out on page

56 of this document.

The Nomination Committee and the

Board have also considered the other

contributions which individual Directors

may make to the work of the Board, with

a view to ensuring that:

i. the Board maintains a diverse

balance of skills, knowledge,

backgrounds and capabilities leading

to effective decision-making;

ii. each Director is able to commit the

appropriate time necessary to

fulfilling their roles; and

iii. each Director provides constructive

challenge, strategic guidance, offers

specialist advice and holds third

party service providers to account.

All Directors will submit themselves for

re-election on an annual basis.

Therefore, all Directors in office as at the

date of this report are to be proposed for

re-election at the 2022 AGM.

Tenure Policy

The Board’s Tenure Policy is included

within the Corporate Governance

statement on page 59 of this document.

Board Diversity and Inclusion Policy

The Board’s Diversity and Inclusion

Policy is included within the Corporate

Governance statement on page 59 of this

document.

External Search Consultancy

In identifying suitable candidates for

an appointment to the Board, the

Nomination Committee may use open

advertising or the services of external

advisers to facilitate the search. There

were no appointments during the

period and therefore an external search

consultancy was not required during

the period.

Company’s Succession Plans

The Nomination Committee will give

full consideration to the succession

planning of the Board to ensure

progressive refreshing of the Board,

taking into account the challenges and

opportunities facing the Board and the

balance of skills and expertise that are

required in the future.

Bernard Bulkin

Nomination Committee Chairman and

Chair of the Board of Directors

18 March 2022

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

REPORT OF THE AUDIT COMMITT EE

Role of the Audit Committee

The AIC Code recommends that Boards

should establish Audit Committees

consisting of at least three, or in the case

of smaller companies, two independent

non-executive directors. The Board is

required to satisfy itself that the Audit

Committee has recent and relevant

experience.

The Audit Committee seeks to ensure

that the Company maintains the highest

standards of integrity in fi nancial

reporting, risk management and internal

controls. The role and responsibility of

the Audit Committee is set out in formal,

written terms of reference covering

certain matters in line with the AIC Code.

Copies of the terms of reference are

available from the Company Secretary.

The Audit Committee meets formally at

least twice a year for the purposes of,

inter alia, considering the appointment,

independence and objectivity, and

remuneration of the Independent

Auditor and reviewing the annual

accounts, half-yearly fi nancial report and

the audit plan for the fi nancial period.

The Audit Committee also reviews the

Company’s internal fi nancial controls and

its internal control and risk management

systems.

Where non-audit services are provided

by the Independent Auditor, full

consideration of the fi nancial and other

implications on the independence of the

Independent Auditor arising from any

such engagement are considered before

proceeding. The Audit Committee has

considered the non-audit work of the

Independent Auditor during the period

and does not consider that this

compromises its independence.

The Company complies with the AIC Code.

The following points apply to the

particular circumstances of the Company:

The Audit Committee periodically reviews

the need for an internal audit function

and considers that this is not appropriate

given the nature and circumstances of the

Company. The Audit Committee keeps the

need for an internal audit function under

periodic review.

To safeguard the independence of its

members and the integrity of its

recommendations to the Board, the

Chairman of the Company is not a

member of the Audit Committee.

Th e Audit Committee has considered

the subjectivity and appropriateness

of the assumptions used to determine

the valuation of investments, held

through GSEO Holdings, which

could aff ect the NAV and share price

of the Company. Th ese were

discussed with the Investment

Adviser and the external auditor

MARGARET STEPHENS

CHAIR OF THE AUDIT AND RISK COMMITTEE AND

INDEPENDENT NON-EXECUTIVE DIRECTOR

Annual Report and Accounts 2021

Governance

Composition

Richard Horlick, Louise Kingham and

Margaret Stephens are members of the

Audit Committee. The Chairperson is

Margaret Stephens.

Relevant skills and experience

The members of the Audit Committee

have recent and relevant financial

experience. The Audit Committee

membership includes individuals with

substantial experience of the financial

matters of listed companies and/or

business activities similar to those

undertaken by the Company. This blend

of skills and experience enables the

Audit Committee to fulfil its

responsibilities effectively.

Meetings

During the period under review three

Audit Committee meetings were held.

Attendance is included in the Corporate

Governance Statement on page 59.

Activities of the Audit Committee

During the period, the Audit Committee

carried out its responsibilities in

accordance with the terms of reference.

inancial statements and signiﬁcant

accounting matters

The Audit Committee monitors the

integrity of the financial information

published in the Interim and Annual

Report and considers whether suitable

and appropriate judgements in respect

of areas which could have a material

impact on the financial statements, have

been made. It actively engages with the

Investment Adviser and Administrator to

assess these significant judgements and

the systems and processes in place to

form these judgements. The Audit

Committee considered the valuation of

investments to be a significant area of

judgement which could materially impact

the financial statements for the period

ended December 2021.

Assumptions applied to derive the

valuation of investments are selected

and recommended by the Investment

Adviser. These include discounts rates,

power prices, energy yield, inflation

rates, asset life, operating expenses,

taxation rates and capital expenditure.

Valuation methodology and assumptions

are discussed in detail within Note 7

(page 92). The Audit Committee has

considered the subjectivity and

appropriateness of the assumptions

used to determine the valuation of

investments, held through GSEO

Holdings, which could affect the NAV of

the Company. These were discussed with

the Investment Adviser and the external

auditor.

Independent Auditor

BDO LLP was selected as the Company’s

Independent Auditor at the time of the

Company’s launch following a formal

tender process and review of the

Independent Auditor’s credentials. The

appointment of the Independent Auditor is

reviewed annually by the Audit Committee

and the Board and is subject to approval

by shareholders. In accordance with the

FRC guidance, the audit will be put out to

tender within ten years of the initial

appointment of BDO LLP.

Effectiveness of Independent Auditor

The Audit Committee is responsible for

reviewing the effectiveness of the

external audit process. The Audit

Committee received a presentation of

the audit plan from the Independent

auditor in respect of the period under

review and a presentation of the results

of the audit following completion of the

main audit testing.

The Audit Committee performed a review

of the Independent Auditor following the

presentation of the results of the audit.

The review included a discussion of the

audit process and the ability of the

Independent Auditor to fulfil its role.

Following the above review, the Audit

Committee has agreed that the re-

appointment of the Independent Auditor

should be recommended to the Board

and the shareholders of the Company.

During the year, the Audit Committee met

key members of the senior audit team

and BDO LLP formally confirmed its

independence, as part of the annual

reporting process. The Audit Committee

liaises regularly with the lead audit

partner, to discuss any issues arising from

the audit as well as its cost effectiveness.

Activities of the Audit Committee

During the period, the Audit Committee carried out its responsibilities in accordance

with the terms of reference.

Item Activities

Financial Statements The Audit Committee has met with the Independent Auditor

and reviewed the Annual Report in order to advise the Board

on the contents. In particular the Audit Committee has advised

the Board that taken as a whole, the Annual Report is fair,

balanced and understandable and provides the information

necessary for shareholders to assess the Company’s

performance and position, business model and strategy. The

Audit Committee has recommended the approval of the Annual

Report and Accounts to the Board.

Valuations The Audit Committee has reviewed both the interim and full

year valuation reports prepared by the Investment Adviser and

recommended to the Board that the valuations be adopted in

both the Interim and Annual Report. In doing so, the Audit

Committee has monitored the effectiveness of the Company’s

valuation policies and methods.

Internal control The Audit Committee has reviewed the Company’s internal

control framework and identified the significant risks faced by

the Company and reviewed the controls in place to mitigate

those risks.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

REPORT OF THE AUDIT COMMITT EE CONTINUED

Provision of non-audit services

The Audit Committee has put a policy in

place on the supply of any non-audit

services provided by the Independent

Auditor.

The Board has adopted a formal policy

for non-audit services, whereby any

proposed services are considered on a

case-by-case basis and may only be

provided to the Company if the provision

of such services is at a reasonable and

competitive cost and does not constitute

a confl ict of interest or potential confl ict

of interest which would prevent the

Independent Auditor from remaining

objective and independent.

BDO LLP was paid fees in respect of the

following non-audit services in the year:

Non-audit service provided Rationale for using the independent Auditor Fee

Review of fi nancial information

in interim report

Detailed knowledge and understanding

of the business is required to

adequately perform an interim review

of the half-yearly report. It is standard

market practice to use the Independent

Auditor for this service.

£5,000

Audit of Initial Accounts prepared

in accordance with section 839 of

the Companies Act 2006

Detailed knowledge and understanding

of the business is required to

adequately perform an audit of Initial

Accounts prepared in accordance with

section 839 of the Companies Act 2006.

It is standard market practice to use the

Independent Auditor for this service.

£60,000

The independence of the Independent

Auditor was considered prior to the

provision of these services. The

Committee periodically monitors the

ratio of non-audit to audit services to

ensure that any fees for permissible

non-audit services do not exceed 70 per

cent. of the average audit fees paid in the

last three years.

The Audit Committee does not believe

that the provision of the above services

aff ects the independence of BDO LLP.

Fair, balanced and understandable

ﬁ nancial statements

The Audit Committee has concluded that

the Annual Report for the period ended

31 December 2021, taken as a whole, is

fair, balanced and understandable and

provides the information necessary for

shareholders to assess the Company’s

position and performance, business

model and strategy. The Audit

Committee has reported its conclusions

to the Board of Directors. The Audit

Committee reached this conclusion

through a process of review of the

document and enquiries to the various

parties involved in the production of the

Annual Report.

Margaret Stephens

Chair of the Audit Committee

18 March 2022

Annual Report and Accounts 2021

Governance

REPORT OF THE MANAGEMENT ENGAGEMENT COMMITT EE

Role of the Management

Engagement Committee

The Management Engagement

Committee meets formally at least once

a year for the purpose, amongst other

things, of reviewing the performance of

the Investment Adviser, the AIFM and

the Company’s other key service

providers over the year and to make

appropriate recommendations to the

Board. The Chairman of the Committee

is Richard Horlick.

The Management Engagement

Committee has conducted a

comprehensive review of the

performance of the AIFM, the Investment

Adviser and the Company’s other key

service providers. This has included an

assessment of the services provided as

well as the fees paid for the provision of

such services.

Meetings

There has been one Management

Engagement Committee meeting in the

year. Attendance is included in the

Corporate Governance Statement on

page 59.

AIFM

The Company has appointed G10 Capital

Limited as the Alternative Investment

Fund Manager (the “AIFM”).

Investment Adviser

The Company and the AIFM have

appointed Victory Hill as investment

adviser to the Company (the “Investment

Adviser”).

Under the terms of the Investment

Advisory Agreement, the Investment

Adviser amongst other things, is

responsible for sourcing investment

opportunities in line with the Company’s

Investment Policy and the monitoring and

management of the Company’s portfolio.

Details of the Investment Adviser’s

activity and the Company’s performance

in the period under review have been

included in the Strategic Report.

Investment Management fees

Under the Investment Management

Agreement, the AIFM receives a fi xed

monthly fee of £5,000 per month and

£1,000 in respect of any investment

committee meeting G10 was required to

attend in excess of 5 investment

committee meetings where the AIFM was

required to attend.

No performance fee is payable to the

AIFM.

Th e Company’s future success

will be driven by the

investment adviser and

complemented by the key

service providers involved. Th e

Board take this very seriously

and continuously monitors all

relationships ”

RICHARD HORLICK

CHAIRMAN OF THE MANAGEMENT

ENGAGEMENT COMMITTEE

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

REPORT OF THE MANAGEMENT ENGAGEMENT COMMITTEE CONTINUED

Investment Advisory fees

Under the terms of the Investment

Advisory Agreement the Investment

Adviser is entitled to a fee payable

monthly in arrears calculated as below.

The investment advisory fees shall be an

amount calculated at the rate of:

a. 1 per cent. on the first £250 million

of net asset value;

b. 0.9 per cent. on net asset value in

excess of £250 million and up to and

including £500 million; and

c. 0.8 per cent. on net asset value in

excess of £500 million.

Furthermore, if, in any fee period, the

annual fee paid to the Investment

Adviser exceeds:

a. £3.5 million, the Investment Adviser

shall apply 8 per cent. of the annual

fee, subject to a maximum amount

of £400,000 to subscribe for or

acquire Ordinary Shares of £0.01

each in the capital of the Company.

b. £2.5 million, the Investment Adviser

shall apply 2 per cent. of the annual

fee to be paid as a charitable

donation to O&C Limited, or other

suitable registered charity aimed at

promoting sustainable energy, as

selected by the Investment Adviser,

provided that if, following the

Investment Adviser’s reasonable

endeavours, a suitable charity

cannot be found, this 2 per cent.

portion of the annual fee (net of any

applicable taxes) will be applied to

the subscription for, or acquisition of

Ordinary Shares.

No performance fee is payable to the

Investment Adviser.

Review

The Management Engagement

Committee reviews the performance and

appointment of the Investment Adviser

and the AIFM on at least an annual basis

to ensure that their continuing

appointments are in the best interest of

the Company’s shareholders.

Following our review, we are satisfied that

the Investment Adviser and the AIFM

have the suitable skills and experience to

manage the Company’s investments and

believe that the continuing appointment

of the Investment Adviser and the AIFM

are in the best interests of shareholders

as a whole.

A review of the Company’s key service

providers has been undertaken. The

review comprised open and closed

ended questions and included a review

of the quality of their services and fees

to ensure they remained competitive

and a review of each service provider’s

policies and procedures to ensure that

each service provider had adequate

controls and procedures in place.

Following the review process we have

agreed that the performance and fees

of each service provider are satisfactory.

Richard Horlick

Chairman of the Management

Engagement Committee

18 March 2022

Annual Report and Accounts 2021

Governance

DIRECTORS’ REPORT

The Directors present their report for the

period from incorporation on 30 October

2020 to 31 December 2021. The Company

commenced its operations on 2 February

2021 when its Ordinary Shares were

admitted to trading on the London Stock

Exchange.

The Company carries on its business

activities as an investment trust with

an investment objective of seeking to

generate stable returns, principally in

the form of income distributions, by

investing in a diversified portfolio of

global sustainable energy infrastructure

assets, predominantly in countries that

are members of the EU, OECD, OECD

Key Partner Countries or OECD Accession

Countries.

Dividends

On 1 November 2021, the Company

declared a dividend of 1.25p per

Ordinary Share, which was paid on

10 December 2021 to shareholders on

the register as at 12 November 2021. The

dividend was paid as an ordinary

dividend.

Dividend Policy

The Board expects that distribution of

dividends and interest will constitute the

principal element of the return to the

holders of Ordinary Shares. The

Company targeted a minimum dividend

payment of not less than 1p in respect of

the financial period ended 31 December

2021 and targets dividend payments of

5p per Ordinary Share on an annualised

basis in respect of the financial year

ending 31 December 2022. The Board

intends to adopt a progressive

distribution policy thereafter.* Subject to

market conditions and the level of the

Company’s net income, it is intended that

dividends on the Shares will be payable

quarterly, all in the form of interim

dividends (the Company does not intend

to pay any final dividends). Subject to

satisfying the requirements for

investment trust status, the Board

reserves the right to retain within a

revenue reserve a proportion of the

Company’s net income in any financial

year, such reserve then being available at

the Board’s absolute discretion for

subsequent distribution to Shareholders,

subject to the requirements of the IT

Regulations. The dividend policy is

subject to an annual vote at each AGM.

The Company may, at the discretion of

the Board, and to the extent possible,

pay all or part of any future dividend out

of capital reserves.

The Company may offer with the prior

authority of Shareholders and subject to

such terms and conditions as the Board

may determine, Shareholders (excluding

any holder of treasury shares) the

opportunity to elect to receive Ordinary

Shares, credited as fully paid, instead of

the whole, or some part, of any dividend.

The ability to issue Ordinary Shares in

lieu of cash would provide the Company

with the flexibility to retain cash where

to do so would benefit the Company.

Distributions made by the Company may

either take the form of dividend income,

or of “qualifying interest income” which

may be designated as interest

distributions for UK tax purposes. A

proportion of the Company’s

distributions may take the form of

qualifying interest income. Prospective

investors should note that the UK tax

treatment of the Company’s distributions

may vary for a Shareholder depending

upon the classification of such

distributions. Prospective investors who

are unsure about the tax treatment that

will apply in respect of any distributions

made by the Company should consult

their own tax advisers .

* This is a target and is based on current

market conditions as at the date of this

document only and is not a profit

forecast. There can be no assurance that

this target will be met or that the

Company will make any distributions at

all. This target return should not be

taken as an indication of the Company’s

expected or actual current or future

results. The Company’s actual return will

depend upon a number of factors,

including but not limited to the

Company’s net income and the

Company’s ongoing charges figure.

Potential investors should decide for

themselves whether or not the return is

reasonable and achievable in deciding

whether to invest in the Company.

Directors

The names of the Directors are set out

on page 56, together with their

biographical details and other

information. Other than Margaret

Stephens, who was appointed on

6 November 2020, all the Directors were

appointed on 30 October 2020.

The Company maintains Directors’ and

Officers’ liability insurance cover at its

expense and on the Directors’ behalf.

AIFM

G10 Capital Limited is the Company’s

AIFM. The AIFM is regulated in the

conduct of investment business by the

FCA. The AIFM is, for the purposes of the

AIFMD and the rules of the FCA, a ‘full

scope’ UK alternative investment fund

manager with a Part 4A permission for

managing AIFs, such as the Company.

Investment Adviser

The Company and the AIFM have

appointed Victory Hill Capital Advisors

LLP as Investment Adviser to provide

certain services in relation to the

Company and its portfolio.

The Management Engagement

Committee report includes details of the

remuneration of the AIFM and the

Investment Adviser.

Investment Trust Status

The Company has been approved as an

Investment Trust Company (“ITC”) under

sections 1158 and 1159 of the

Corporation Taxes Act 2010. The

Company had to meet relevant eligibility

conditions to obtain approval as an ITC

and must adhere to ongoing

requirements to maintain its ITC status,

including, but not limited to, retaining no

more than 15% of its annual income.

During the financial period, the Company

has conducted and monitored its affairs

to enable it to comply with these

requirements. The Board continues to

monitor compliance with the ITC

conditions on a regular basis.

Depositary

Apex Depositary (UK) Limited has been

appointed as Depositary to provide cash

monitoring, safekeeping and asset

verification and oversight functions as

prescribed by the AIFMD.

Company Secretary

and Administrator

Apex Fund and Corporate Services (UK)

Limited has been appointed as the

Company Secretary of the Company and

provides company secretarial and

administration services to the Company.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

DIRECTORS’ REPORT CONTINUED

Share Capital

As at 31 December 2021, the Company’s

issued share capital comprised

311,589,799 Ordinary Shares, each of 1p

nominal value. Each ordinary share held

entitles the holder to one vote and there

are no restrictions on those voting rights.

Voting deadlines are stated in the Notice

of Annual General Meeting and Form of

Proxy and are in accordance with the

Companies Act 2006.

There are no restrictions on the transfer

of Ordinary Shares, nor are there any

limitations or special rights associated

with the Ordinary Shares.

The Company did not purchase any of its

Ordinary Shares during the year, nor did

any nominee or third-party with the

Company’s assistance acquire any shares

on behalf of the Company.

Premium management and

share issuance

At a General Meeting held on 5 January

2021, shareholders approved resolutions

to authorise the allotment of shares

pursuant to the Initial Placing, Offer for

Subscription, Intermediaries Offer and the

Placing Programme and to dis-apply

pre-emption rights when allotting those

shares. The authority granted under these

resolutions expired on 5 January 2022.

A prospectus was issued by the Company

on 6 January 2021 in respect of an Initial

Placing, Offer for Subscription,

Intermediaries Offer and the Placing

Programme. The Placing Programme was

available for use for a period of 12

months from the date of issuance of the

prospectus, providing that the number of

Ordinary Shares and/or C Shares did not

exceed a maximum of 600 million shares

in aggregate.

The Company issued 242,624,281

Ordinary Shares at a placing price of 100

pence per Ordinary Share on 2 February

2021. The Company issued a further

68,965,518 New Ordinary Shares on

3 December 2021 at a placing price of

101.5 pence per New Ordinary Share.

The New Ordinary Shares were issued at

a premium to net asset value.

General authority to issue shares

The issuance of new Ordinary Shares is

entirely at the discretion of the Board,

and no expectation or reliance should be

placed on such discretion being

exercised on any one or more occasions.

The maximum number of Ordinary

Shares which can be admitted to trading

on the London Stock Exchange without

the publication of a prospectus is 20 per

cent of the ordinary share capital on a

rolling previous 12-month basis at the

time of admission of the shares.

Any new Ordinary Share issues would be

issued at a premium to net asset value.

The Board believes that there are

benefits in the Company having general

authority to issue new shares. Ordinary

resolutions seeking shareholders’

authority to issue new Ordinary Shares

together with special resolutions to

disapply pre-emption rights when

issuing those shares will be put forward

for approval at the Company’s

forthcoming Annual General Meeting

(“AGM”).

Treasury shares &

Discount Management

The Companies Act 2006 allows

companies to hold shares acquired by

way of market purchase as treasury

shares, rather than having to cancel

them. This gives the Company the ability

to re-sell Ordinary Shares quickly and

effectively thereby improving liquidity

and providing the Company with

additional flexibility in the management

of its capital base.

No Ordinary Shares have been bought

back since the Company’s launch. No

Ordinary Shares will be sold from

treasury at a price less than the net asset

value per existing Ordinary Share at the

time of their sale.

The Company may seek to address any

significant discount to net asset value at

which its Ordinary Shares may be trading

by purchasing its own Ordinary Shares in

the market on an ad hoc basis.

The Directors currently have the

authority to make market purchases of

up to 36,369,379 Ordinary Shares. The

maximum price (exclusive of expenses)

which may be paid for an ordinary share

must not be more than the higher of:

i. 105 per cent. of the average of the

mid-market quotations of the

Ordinary Shares for the five

business days before the purchase

is made; or

ii. the higher of the price of the last

independent trade and the highest

then current independent bid for

the Ordinary Shares.

Ordinary Shares will only be

repurchased at prices below the

prevailing net asset value per ordinary

share, which should have the effect of

increasing the net asset value per

ordinary share for other shareholders.

It is intended that a renewal of the

authority to make market purchases will

be sought from shareholders at each

AGM of the Company and a resolution to

provide authority for the Company to

make market purchases of up to 14.99

per cent. of the Company’s issued

ordinary share capital will be put

forward at the Company’s forthcoming

AGM. Purchases of Ordinary Shares will

be made within guidelines established

from time to time by the Board. Any

purchase of Ordinary Shares would be

made only out of the available

uncommitted cash resources of the

Company.

Ordinary Shares repurchased by the

Company may be held in treasury or

cancelled.

The Directors will have regard to the

Company’s investment trust status

when making any repurchase, and

purchases of Ordinary Shares may be

made only in accordance with the

Companies Act 2006, the Listing Rules

and the Disclosure Guidance and

Transparency Rules.

Investors should note that the

repurchase of Ordinary Shares is

entirely at the discretion of the Board

and no expectation or reliance should

be placed on such discretion being

exercised on any one or more occasions

or as to the proportion of Ordinary

Shares that may be repurchased.

Settlement of Ordinary Share

transactions

Ordinary Share transactions may be

settled through the CREST share

settlement system.

Annual Report and Accounts 2021

Governance

Going concern

Please refer to page 53 in the report for consideration of going concern.

Signiﬁcant shareholders

As at 31 December 2021, the Directors had been notified of the following shareholdings comprising 3 per cent. or more of the

issued share capital of the Company:

Name

Holding at date

of notification

Percentage as at date

of notification

Date of

notification

Quilter Plc 48,198,710 19.87 12/02/2021

Sarasin & Partners LLP 31,158,978 10.00 07/12/2021

Newton Investment Management Limited 24,262,428 10.00 03/02/2021

Courtiers Asset Management Limited 20,045,000 8.26 17/02/2021

Witan Investment Trust plc 15,250,000 6.29 02/02/2021

Since 31 December 2021, the Directors had been notified that Sarasin & Partners LLP have decreased their holding to 31,152,484

Ordinary Shares (9.99%) as at 14 January 2022.

Employees

The Company has no employees and no share schemes.

Modern Slavery Act 2015, Bribery Act 2010 and Criminal Finances Act 2017

The Directors are satisfied that, to the best of their knowledge, the Company’s principal suppliers comply with the provisions of

the Modern Slavery Act 2015 and maintain adequate safeguards in keeping with the provisions of the Bribery Act 2010 and

Criminal Finances Act 2017.

Streamlined Energy & Carbon Reporting framework

As an externally managed investment company, the Company’s energy use during the year is below 40MWh, therefore the

Company is exempt from reporting under the Streamlined Energy & Carbon Reporting framework.

Financial instruments

The Company’s financial risk management objectives and policies are included in the notes to the financial statements.

Annual General Meeting

The Company will hold an Annual General Meeting on 27 April 2022 to consider the resolutions laid out in the Notice of Meeting.

Shareholders are strongly encouraged to vote by proxy. Full details of the Annual General Meeting, the resolutions proposed and

information on how to vote by proxy are described in the Notice of Meeting and supporting explanatory notes.

Independent Auditor

BDO LLP has expressed its willingness to continue in office as Independent Auditor. In accordance with Section 489 of the

Companies Act 2006, a resolution to re-appoint BDO LLP as the Company’s Independent Auditor will be put forward at the

forthcoming AGM.

isclosure of information to the Independent Auditor

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 Independent Auditor are

unaware; and

ii. the Director has taken all steps that he ought to have taken as Director to make himself aware of any relevant information

and to establish that the Company’s Independent Auditor 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.

By order of the Board

Apex Fund and Corporate Services (UK) Limited

18 March 2022

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

he Directors are

responsible for preparing

the annual report and the

financial statements in

accordance with applicable

law and regulations.

Company law requires the Directors to

prepare financial statements for each

financial year. Under that law, the

Directors are required to prepare the

Company financial statements in

accordance with international accounting

standards in conformity with the

requirements of the Companies Act

2006. In preparing the Company’s

financial statements, the Directors have

also elected to comply with International

Financial Reporting Standards (‘IFRS’)

adopted pursuant to Regulation (EC) No

1606/2002 as it applies to the European

Union. Pursuant to the Companies Act

2006, the Directors must not approve

the financial statements unless they are

satisfied that they give a true and fair

view of the state of affairs of the

Company and of the profit or loss for the

Company for that period.

In preparing these financial statements,

the Directors are required to:

• select suitable accounting policies

and then apply them consistently;

• make judgements and accounting

estimates that are reasonable and

prudent;

• state whether they have been

prepared in accordance with

international accounting standards

in conformity with the requirements

of the Companies Act 2006 and with

International Financial Reporting

Standards (‘IFRS’) adopted pursuant

to Regulation (EC) No 1606/2002 as it

applies to the European Union, give

a true and fair view of the assets,

liabilities, financial position and

profit or loss of the Company,

subject to any material departures

disclosed and explained in the

financial statements;

• prepare a Directors’ report, a

Strategic report and Directors’

Remuneration report which comply

with the requirements of the

Companies Act 2006.

The Directors are responsible for keeping

adequate accounting records that are

sufficient to show and explain the

Company’s transactions and disclose

with reasonable accuracy at any time the

financial position of the Company and

enable them to ensure that the financial

statements comply with the Companies

Act 2006. They are also responsible for

safeguarding the assets of the Company

and hence for taking reasonable steps

for the prevention and detection of fraud

and other irregularities.

The Directors are responsible for

ensuring that the annual report and

accounts, taken as a whole, are fair,

balanced, and understandable and

provides the information necessary for

shareholders to assess the Company’s

position and performance, business

model and strategy.

Website publication

The Directors are responsible for

ensuring the annual report and the

financial statements are made available

on a website. Financial statements are

published on the Company’s website in

accordance with legislation in the United

Kingdom governing the preparation and

dissemination of financial statements,

which may vary from legislation in other

jurisdictions. The maintenance and

integrity of the Company’s website is the

responsibility of the Directors. The

Directors’ responsibility also extends to

the ongoing integrity of the financial

statements contained therein.

Directors’ responsibilities pursuant

to Disclosure Guidance and

Transparency Rules Chapter 4 (DTR4)

The Directors confirm to the best of

their knowledge:

• The Company’s financial statements

have been prepared in accordance

with international accounting

standards in conformity with the

requirements of the Companies Act

2006 and in accordance with

international financial reporting

standards adopted pursuant to

Regulation (EC) No 1606/2002 as it

applies in the European Union and

give a true and fair view of the

assets, liabilities, financial position

and profit and loss of the Company.

• The annual report includes a fair

review of the development and

performance of the business and the

financial position of the Company

and the parent company, together

with a description of the principal

risks and uncertainties that

they face.

Having taken advice from the Audit

Committee, the Directors consider that

the Annual Report and financial

statements taken as a whole are fair,

balanced and understandable and

provides the information necessary for

shareholders to assess the Company’s

position and performance, business

model and strategy.

Approval

This Directors’ responsibilities statement

was approved by the Board of Directors

and signed on its behalf by:

Bernard Bulkin

Chair of the Board of Directors

18 March 2022

Annual Report and Accounts 2021

Governance

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VH GLOBAL

SUSTAINABLE ENERGY OPPORTUNITIES PLC

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Company’s affairs as at 31 December 2021 and of its profit for the period from

30 October 2020 to 31 December 2021;

• have been properly prepared in accordance with international accounting standards in conformity with the requirements of

the Companies Act 2006; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of VH Global Sustainable Energy Opportunities Plc (the ‘Company’) for the period ended

31 December 2021 which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of

changes in equity, the Statement of cash flows and notes to the financial statements, including a summary of significant

accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and

international accounting standards in conformity with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial

statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion. Our audit opinion is consistent with the additional report to the Audit Committee.

Independence

Following the recommendation of the Audit Committee, we were appointed by the Directors on 4 November 2020 to audit the

financial statements for the period ended 31 December 2021 and subsequent financial periods. The period of total uninterrupted

engagement is one year covering the year ended 31 December 2021. We remain independent of the Company in accordance with

the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard

as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by that standard were not provided to the Company.

Conclusions relating to 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 Company’s ability to

continue to adopt the going concern basis of accounting included:

• Assessing and challenging the inputs in the cashflow forecast prepared by the Directors against actuals and contractual

commitments, including performing stress testing considering downside scenarios and assessing the impact on the Company’s

liquidity position;

• Agreeing assumptions used within the valuation models to supporting documentation per the Key audit matter noted below;

• Reviewing the future commitments of the Company and checking they have been appropriately incorporated into the forecast;

• Considering the Company’s assessment of the potential impact of Russian aggression in Ukraine on projected future cash

flows; and

• Reviewing the amount of headroom in the forecasts of both base case and downside scenarios (e.g. loan facility or viability of

future placements)

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at

least twelve months from when the financial statements are authorised for issue.

In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, 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.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections

of this report.

Overview

Key audit matters Valuation of investments

Materiality Company financial statements as a whole

£4.858 million based on 1.5% of net assets

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of

internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of

management override of internal controls, including assessing whether there was evidence of bias by the Directors or Investment

Adviser that may have represented a risk of material misstatement.

Annual Report and Accounts 2021

Financial Statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VH GLOBAL

SUSTAINABLE ENERGY OPPORTUNITIES PLC CONTINUED

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to

fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in

the audit, and directing the efforts of the engagement team. This matter was 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 this matter.

Key audit matter How the scope of our audit addressed the key audit matter

aluation of Investments

See note 7 and accounting policy

on page 86.

The valuation of unquoted

investments is calculated using

discounted cash flow models or

by the market approach

referencing the recent price of

transaction. This is a highly

subjective accounting estimate

where there is an inherent risk of

bias The valuation of unquoted

investments is calculated using

discounted cash flow models or

by the market approach

referencing the recent price of

transaction. This is a highly

subjective accounting estimate

where there is an inherent risk of

bias arising from the investment

valuations being prepared by the

Investment Adviser, who is

remunerated based on the net

asset value of the Company.

These estimates include

judgements including discount

rates, useful economic life of

assets, tax and inflation.

Assets in construction were

acquired during the period and

are valued using the cost

approach.

Investments held at fair value

through profit or loss is the most

significant balance in the financial

statements and is the key driver

of performance therefore we

determined this to be a key audit

matter.

In respect of the investments held at fair value through

profit or loss, the valuation was determined by either a

discounted cash flow model or by the market approach

referencing the recent price of transaction. We performed

the following specific procedures where assets were valued

through a discounted cash flow model:

• Obtained and reviewed purchase agreements and

contracts and considered whether inputs were

accurately reflected in the valuation model

• Used spreadsheet analysis tools to assess the integrity of

the valuation model

• Assessed the reasonableness of forecasted cashflows

against supporting documentation such as contracts

• Challenged the appropriateness of the selection and

application of key assumptions in the model including

the discount rate, inflation and asset life applied by

benchmarking to available industry data and consulting

with our internal valuations experts

• Reviewed the corporation tax workings within the

valuation model and considered whether these had been

modelled accurately in the context of current

corporation tax legislation and rates

• Agreed a sample of cash and other net assets to bank

statements and investee company management

accounts

• Considered the accuracy of forecasting by comparing

forecasts from acquisition date to period end against

actual results

• Vouched shareholder loans to loan agreements, verified

the terms of the loan and recalculated interest income.

Where fair value was determined through the market

approach (recent transaction technique), we compared fair

value to acquisition price per purchase agreements. We

assessed the appropriateness of applying this method of

valuation.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Key audit matter How the scope of our audit addressed the key audit matter

aluation of Investments

continued

For investments valued using the cost approach, we

performed the following specific procedures:

• Obtained and reviewed the purchase agreements for

acquisition of the portfolio investments and vouched the

proceeds paid to bank statements.

• Verified the progress reports of a sample of investments

for any indicators of changes in fair value.

For each of the key assumptions in the valuation models, we

considered the appropriateness of the assumption and

whether alternative reasonable assumptions could have

been applied. We considered each assumption in isolation

as well as in conjunction with other assumptions and the

valuation as a whole. Where appropriate, we sensitised the

valuations where other reasonable alternative assumptions

could have been applied. We also considered the

completeness and clarity of disclosures regarding the range

of reasonable alternative assumptions in the financial

statements.

Key oservations

Based on our procedures performed considered the

estimates and judgements made in the valuation of the

investment portfolio to be acceptable.

Annual Report and Accounts 2021

Financial Statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VH GLOBAL

SUSTAINABLE ENERGY OPPORTUNITIES PLC CONTINUED

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.

We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic

decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower

materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these

levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the

particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

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

materiality as follows:

2021

ateriality £4.858 million

asis for determining materiality 1.5% net assets

ationale for the enchmark applied Net Asset Value is a key indicator of performance and as such the

most relevant benchmark on which to base materiality for the

users of the financial statements.

Performance materiality 70% materiality (£3.4 million)

asis for determining performance materiality Risk assessment of control environment and consideration of

potential errors due to this being a first year audit and the first

year in which financial statements have been produced.

Lower testing threshold

We also determined that for items impacting realised return, a misstatement of less than materiality for the financial statements

as a whole could influence the economic decisions of users. As a result, we determined a lower testing threshold for these items

to be 10% of gross expenditure being £335,000.

Reporting threshold

We also determined that for items impacting realised return, a misstatement of less than materiality for the financial statements

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £97,000. We also

agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Annual

Report and Accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial

statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not

express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of

the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact.

We have nothing to report in this regard.

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Corporate governance statement

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of

the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance

Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.

oing concern and longerterm

viaility

• The Directors’ statement with regards to the appropriateness of adopting the going concern

basis of accounting and any material uncertainties identified set out on page 53; and

• The Directors’ explanation as to their assessment of the Company’s prospects, the period this

assessment covers and why the period is appropriate set out on page 53.

Other Code provisions • Directors’ statement on fair, balanced and understandable set out on page 74;

• Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks set out on page 60;

• The section of the annual report that describes the review of effectiveness of risk

management and internal control systems set out on page 60; and

• The section describing the work of the Audit Committee set out on page 66.

Other Companies Act 006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the

Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and irectors

report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial period

for which the financial statements are prepared is consistent with the financial statements;

and

• the Strategic report and the Directors’ report have been prepared in accordance with

applicable legal requirements.

In the light of the knowledge and understanding of the Company and its environment obtained

in the course of the audit, we have not identified material misstatements in the strategic report

or the Directors’ report.

irectors 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 In our opinion, based on the work undertaken in the course of the audit the information about

internal control and risk management systems in relation to financial reporting processes and

about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure

Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA

Rules), is consistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In the light of the knowledge and understanding of Company and its environment obtained in

the course of the audit, we have not identified material misstatements in this information.

In our opinion, based on the work undertaken in the course of the audit information about the

Company’s corporate governance code and practices and about its administrative, management

and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA

Rules.

We have nothing to report arising from our responsibility to report if a corporate governance

statement has not been prepared by the Company.

atters on which we are reuired

to report y eception

We have nothing to report in respect of the following matters in relation to which the Companies

Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not

been received from branches not visited by us; or

• the financial statements and the part of the Directors’ remuneration report to be audited are

not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Annual Report and Accounts 2021

Financial Statements

Responsibilities of Directors

As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the

financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors

determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due

to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is

a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which

our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it

operates, and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

We considered the significant laws and regulations to be compliance with Companies Act 2006, the FCA listing and DTR rules, the

principles of the UK Corporate Governance Code, requirements of s.1158 of the Corporation Tax Act, and applicable accounting

standards.

Our procedures included:

• agreement of the financial statement disclosures to underlying supporting documentation;

• enquiries of the board and relevant Service Organisations regarding known or suspected instances of non-compliance with

laws and regulation and fraud. We corroborated our enquiries through our review of board meeting minutes for the year and

other evidence gathered during the course of the audit;

• obtaining an understanding of the control environment in monitoring compliance with laws and regulations

We assessed the susceptibility of the financial statements to material misstatement, including fraud and considered the fraud risk

areas to be the valuation of investments and management override of controls.

Our procedures included:

• The procedures set out in the Key audit matters section above; and

• Testing a sample of journal entries to supporting documentation and evaluating whether there was evidence of bias by the

Directors that represented a risk of material misstatement due to fraud.

The engagement team was deemed to collectively have the appropriate competence and capabilities to identify or recognise

non-compliance with laws and regulations. We communicated relevant identified laws and regulations and potential fraud risks to

all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations

throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that

the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as

fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent

limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the

events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/

auditorsresponsibilities. This description forms part of our auditor’s report.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VH GLOBAL

SUSTAINABLE ENERGY OPPORTUNITIES PLC CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to

state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or

for the opinions we have formed.

PETER SMITH

(SENIOR STATUTORY AUDITOR)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

18 March 2022

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Annual Report and Accounts 2021

Financial Statements

Note

Revenue

£’000

Capital

£’000

Total

000

Gains/(losses) on investments 7 - 22,046 ,06

Investment income 4 1,674 - 1,6

Total income and gains 1,674 22,046 ,0

Investment advisory fees 16 (2,218) - ,1

Operating expenses 5 (1,136) - 1,16

ossproﬁt for the period efore taation (1,680) 22,046 0,66

Taxation 6 - - 

ossproﬁt for the period after taation  (1,680) 22,046 0,66

Proﬁt and total comprehensive income attriutale to:

Euity holders of the company (1,680) 22,046 0,66

ossearnings per share – asic and diluted pence

 18 (0.87) 11.39 10.

Based on the weighted average number of ordinary shares in issue since the Company’s incorporation on 30 October 2020 to 31 December 2021.

The total column of the Statement of Comprehensive Income is the profit and loss account of the Company. The supplementary

revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement

of Recommended Practice (AIC SORP).

All revenue and capital items in the above statement derive from continuing operations.

The above Statement of Comprehensive Income includes all recognised gains and losses.

The notes on pages 86 to 100 form part of these financial statements.

STATEMENT OF COMPREHENSIVE INCOME

For the period 30 October 2020 to 31 December 2021

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

 Note 000

oncurrent assets  

Investments at fair value through profit or loss 7 1,61

Total noncurrent assets 1,61

Current assets  

Cash and cash equivalents 10 16,10

Other receivables 9 11

Total current assets 16,61

Total assets  ,

Current liailities  

Accounts payable and accrued expenses 11 1

Total current liailities  1

Total liailities  1

et assets 19 ,

Capital and reserves  

Share capital 13 ,116

Share premium 6,

Special distributable reserve 14,15 ,6

Capital reserve  ,06

Revenue reserve  1,60

Total capital and reserves attriutale to euity holders of the Company  ,

et asset value per Ordinary Share  10.

The financial statements were approved and authorised for issue by the Board of Directors on 18 March 2022 and signed on their

behalf by:

BERNARD BULKIN

CHAIRMAN

Company Registration Number 12986255

The notes on pages 86 to 100 form part of these financial statements.

STATEMENT OF FINANCIAL POSITION

As at 31 December 2021

Annual Report and Accounts 2021

Financial Statements

 Note

capital

£’000

premium

£’000

Special

distributable

reserve

£’000

Capital

reserve

£’000

Revenue

reserve

£’000

Total

000

Opening alance  - - - - - 

Issue of share capital 13,14 3,116 309,508 - - - 1,6

Cost of issue of shares 14 - (6,059) - - - 6,0

Transfer to special distributable reserve 14,15 - (235,500) 235,500 - - 

Total comprehensive incomeloss for the period - - - 22,046 (1,680) 0,66

Interim dividends paid during the period (3,033) ,0

Balance at 31 December 2021 3,116 67,949 232,467 22,046 (1,680) ,

A total of 311,589,799 ordinary shares were issued in the period to 31 December 2021.

The capital reserve represents the unrealised gains or losses on the revaluation of investments. The unrealised element of the

capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium

account. The revenue, special distributable and realised capital reserves are distributable by way of dividend. The total

distributable reserves as at 31 December 2021 was £230,787,289, after accounting for the cumulative unrealised gains of

£22,045,723.

The notes on pages 86 to 100 form part of these financial statements.

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

As at 31 December 2021

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

 Note 000

Cash ows from operating activities   

Profit before tax  0,66

Less: Change in fair value of investments  7 ,

Operating result efore working capital changes  ,

Increase in prepayments and other receivables  0

Increase in interest receivables  

Increase in accounts payable and accrued expenses  1

et cash ow used in operating activities  ,6

Cash ows from investing activities 

Purchase of investments  7 16,0

et cash used in investing activities  16,0

Cash ows from ﬁnancing activities 

Proceeds from issue of shares  1,6

Payment of share issue costs  6,0

Dividends paid in the year  ,0

et cash generated from ﬁnancing activities  0,

et increase in cash and cash euivalents  16,10

Cash and cash equivalents at beginning of the period  

Cash and cash euivalents at end of the period  10 16,10

The notes on pages 86 to 100 form part of these financial statements.

STATEMENT OF CASH FLOWS

For the period 30 October 2020 to 31 December 2021

Annual Report and Accounts 2021

Financial Statements

1. General information

VH Global Sustainable Energy Opportunities plc (the “Company”) is a closed-ended investment company, incorporated in England

and Wales on 30 October 2020 and registered as a public company limited under the Companies Act 2006 with registered number

12986255. The Company commenced operations on 2 February 2021 when its shares commenced trading on the London Stock

Exchange.

The financial statements comprise only the results of the Company, as its investment in VH GESO UK Holdings Limited (“GESO

Holdings”) is included at fair value through profit or loss as detailed in the key accounting policies below.

The Company and the AIFM has appointed Victory Hill Capital Advisors LLP as its Investment Adviser pursuant to the Investment

Advisory Agreement dated 5 January 2021.

The Company has registered, and intends to carry on business, as an investment trust with an investment objective to seek to

generate stable returns, principally in the form of income distributions, by investing in a diversified portfolio of global sustainable

energy infrastructure assets, predominantly in countries that are members of the EU, OECD, OECD Key Partner Countries or

OECD Accession Countries.

2. Significant accounting policies

2.1 Basis of preparation of financial statements

As this is the Company’s first accounting period, annual statutory financial statements will be filed with the Registrar of

Companies. The Company has prepared its first statutory financial statements in accordance with international accounting

standards in conformity with the requirements of the Companies Act 2006. These financial statements are also prepared in

accordance with International Financial Reporting Standards (‘IFRS’) adopted pursuant to Regulation (EC) No 1606/2002 as it

applies to the European Union.

The financial statements have been prepared on the historical cost basis, as modified for the measurement of certain financial

instruments at fair value through profit or loss. The principal accounting policies are set out in note 3.

The financial statements have also been prepared, as far as is consistent with IFRS and relevant and applicable to the Company in

accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture

Capital Trusts (“SORP”) issued in October 2019 by the Association of Investment Companies (“AIC”).

The financial statements incorporate the financial statements of the Company only. The primary objective of the Company is to

generate returns in Sterling. The Company’s performance is measured in Sterling terms and its ordinary shares are issued in

Sterling. Therefore, the Company has adopted Sterling as the presentation and functional currency for its financial statements.

These financial statements are presented in pounds sterling and are rounded to the nearest thousand, unless otherwise stated.

The current year financial information is from the period of incorporation on 30 October 2020 to 31 December 2021. Comparative

information is not required as this is the first period of operations.

2.2 Investment entity and basis of non-consolidation of subsidiaries

The Directors have concluded that the Company has all the elements of control as prescribed by IFRS 10 “Consolidated Financial

Statements” in relation to all its subsidiaries and that the Company satisfies the three essential criteria to be regarded as an

investment entity as defined in IFRS 10.

There are three key conditions to be met by the Company for it to meet the definition of an investment entity. The three essential

criteria are that the entity must:

1. Obtain funds from one or more investors for the purpose of providing these investors with professional investment

management services;

2. Commit to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment

income or both; and

3. Measure and evaluate the performance of substantially all of its investments on a fair value basis.

In satisfying the second criteria, the notion of an investment time frame is critical. An investment entity should not hold its

investments indefinitely but should have an exit strategy for their realisation.

In this regard, GSEO Holdings is itself an investment entity. Consequently, the Company need not have an exit strategy for its

investment in GSEO Holdings.

As for investments in subsidiaries, the Company intends to hold each investment until the end of its life, at which point the assets

are expected to have no residual value. The Directors consider that this demonstrates a clear exit strategy from these

investments. The Company may choose to sell its interest in an investment before the end of its project life if an attractive offer is

received from a potential purchaser and the Directors consider that this demonstrates a clear exit strategy from these

investments.

NOTES TO THE FINANCIAL STATEMENTS

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Subsidiaries are therefore measured at fair value through profit or loss, in accordance with IFRS 13 “Fair Value Measurement”,

IFRS 10 “Consolidated Financial Statements” and IFRS 9 “Financial Instruments”.

Further detail on the significant judgements in valuing the Company’s investments is disclosed in note 3.

2.3 Going concern

The Directors have reviewed the financial position of the Company and its future cash flow requirements, taking into

consideration current and potential funding sources, investment into existing and near-term projects and the Company’s working

capital requirements.

The Company faces a number of risks and uncertainties, as set out in the Strategic Report on pages 48 to 52. The financial risk

management objectives and policies of the Company, including exposure to price risk, interest rate risk, credit risk and liquidity

risk are discussed in Note 12 to the financial statements.

Following the successful IPO of the Company on 2 February 2021 and additional share issuance on 3 December 2021, the

Company continues to meet day-to-day liquidity needs through its cash resources. As at 31 December 2021, the Company had

cash balances of £163.8 million, which are sufficient to meet current obligations as they fall due.

The major cash outflows of the Company are the payment of dividends and costs relating to the acquisition of new assets, both of

which are discretionary, and the Company’s ongoing operating costs.

The Directors have reviewed Company forecasts and pipeline projections which cover a period of at least 12 months from the

date of approval of this report, considering foreseeable changes in investment and the wider pipeline, which show that the

Company has sufficient financial resources to continue in operation for at least the next 12 months from the date of approval of

this report. Based on this review, the Directors have a reasonable expectation that the Company has adequate resources to

continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to

adopt the going concern basis in preparing the financial statements.

In considering the above key potential impacts of COVID-19 on the Company and its subsidiaries operations, the Directors have

assessed these with reference to the mitigation measures in place. The key personnel at the Investment Adviser, the AIFM and

Administrator have successfully implemented business continuity plans to ensure business disruption is minimised, including

remote working, and all staff are continuing to assume their day-to-day responsibilities.

Based on its assessment above, the Directors have a reasonable expectation that the Company has sufficient resources to

continue in operation for at least 12 months from the date of the approval of these financial statements. The Directors are not

aware of any material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern.

Therefore, the financial statements have been prepared on the going concern basis.

The Board has considered the impact of Brexit on the Company’s operations and does not consider that either has a material

uncertainty over the Company’s ability to continue as a going concern.

2.4 Financial Instruments

Financial assets and financial liabilities are recognised in the Company’s statement of financial position when the Company

becomes a party to the contractual provisions of the instrument.

Financial assets

The classification of financial assets at initial recognition depends on the purpose for which the financial asset was acquired and

its characteristics.

All financial assets are initially recognised at recognised at fair value plus transaction cost except for those designated as fair

value through profit or loss, which are recognised at fair value only. All purchases of financial assets are recorded at the date on

which the Company became party to the contractual requirements of the financial asset.

The Company’s financial assets principally comprise of investments held at fair value through profit or loss and at amortised cost.

Annual Report and Accounts 2021

Financial Statements

2. Significant accounting policies continued

Investments held at fair value through profit or loss

The Company accounts for its investment in its wholly owned direct subsidiary GSEO Holdings at fair value. At initial recognition,

investments in sustainable energy infrastructure projects in GSEO Holdings are measured at fair value through profit or loss.

Subsequently, gains or losses resulting from the movement in fair value are recognised in the Statement of Comprehensive

Income at each valuation point. As both the Company and GSEO Holdings are investment entities under IFRS, the Company

includes its investment in GSEO Holdings at fair value through profit or loss.

As shareholder loan investments form part of a managed portfolio of assets whose performance is evaluated on a fair value

basis, loan investments are designated at fair value in line with equity investments. The Company measures its investment as a

single class of financial asset at fair value in accordance with IFRS 13 Fair Value Measurement.

Gains or losses resulting from the movement in fair value are recognised in profit or loss at each valuation point and are allocated

to the capital column of the profit or loss.

Financial assets are recognised/derecognised at the date of the purchase/disposal. Investments are initially recognised at cost,

being the fair value of consideration given.

Transaction costs are recognised as incurred and allocated to the capital column of the profit or loss.

Fair value is defined as the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s

length transaction. The Board will consider any observable market transactions and will measure fair value using assumptions

that market participants would use when pricing the asset, including any assumptions regarding risk surrounding the transaction.

A financial asset (in whole or in part) is derecognised either:

• when the Company has transferred substantially all the risks and rewards of ownership; or

• when it has neither transferred or retained substantially all the risks and rewards and when it no longer has control over the

assets or a portion of the asset; or

• when the contractual right to receive cashflow has expired.

Financial assets at amortised cost

Loans and other receivables that are non-derivative financial assets and that have fixed or determinable payments that are not

quoted in an active market are classified as financial assets at amortised cost. Financial assets are measured at amortised cost

using the effective interest rate method, less any impairment. Impairment provisions for loans and receivables are recognised

based on a forward-looking expected credit loss model. All financial assets assessed under this model are immaterial to the

financial statements.

The Company’s financial assets held at amortised cost comprise of cash and cash equivalents and other receivables in the

Statement of Financial Position.

Financial liabilities

Financial liabilities are classified according to the substance of the contractual agreements entered into and are recorded on the

date on which the Company becomes party to the contractual requirements of the financial liability.

The Company’s other financial liabilities measured at amortised cost 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 rate method.

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires

or is cancelled. Any gain or loss on derecognition is taken to the statement of comprehensive income.

2.5 Cash and cash equivalents

Cash and cash equivalents comprise cash balances, deposits held on call with banks and other short-term highly liquid deposits

with original maturities of 3 months or less, that are readily convertible to a known amount of cash and are subject to an

insignificant risk of changes in value.

2.6 Foreign currencies

Transactions entered into by the Company in a currency other than its functional currency are recorded at the rates ruling when

the transactions occur.

Foreign currency monetary assets and liabilities are translated to the functional

currency at the exchange rate ruling at the

balance sheet date. Foreign exchange differences arising on translation to the functional currency are recognised in the

Statement of Comprehensive Income. Foreign exchange differences relating to investments held at fair value through profit or

loss are shown within the line Gains/(losses) on investments.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

2.7 Dividends

Dividends payable are recognised as distributions in the financial statements when the Company’s obligation to make payment

has been established.

2.8 Income recognition

Investment income comprises interest income and dividend income received from the Company’s subsidiaries. Interest income is

recognised in the Income Statement using the effective interest method. Investment income and interest income are allocated to

the revenue column of the Company’s statement of comprehensive income unless such income is of a capital nature.

Other income is accounted for on an accruals basis using the effective interest rate method.

Gains or losses resulting from the movement in fair value of the Company’s investments held at fair value through profit or loss

are allocated to the capital column of the Company’s statement of comprehensive income at each valuation point.

2.9 Expenses

Expenses are accounted for on an accruals basis. All expenses other than those directly attributable to investments and share

issue expenses are allocated to the revenue column of the statement of comprehensive income.

Share issue expenses of the Company directly attributable to the issue and listing of shares are charged to the share premium

account.

2.10 Share capital

Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the

Company after the deduction of all liabilities. The Company’s ordinary shares are classified as equity instruments.

Costs associated or directly attributable to the issue of new equity shares are recognised as a deduction in equity and are

charged from the share premium account. Incremental costs include those incurred in connection with the placing and admission

which include fees payable under a placing agreement, legal costs, and any other applicable expenses.

The costs incurred in relation to the Company’s IPO and for the additional raise in December 2021 were charged to the share

premium account.

2.11 Taxation

Under the current system of taxation in the UK, the Company is liable to taxation on its operations in the UK.

Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or

substantively enacted at the date of the statement of financial position.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets

and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax

liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that

it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial

recognition of other assets and liabilities in a transaction that affects neither the tax profit or the accounting profit. Deferred tax

liabilities are recognised for taxable temporary differences arising on investments, except where the Company is able to control

the timing of the reversal of the difference and it is probable that the temporary difference will not reverse in the foreseeable

future. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset

is realised. Deferred tax is charged or credited to the profit or loss except when it relates to items charged or credited directly to

equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off tax assets against tax liabilities and

when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets

and liabilities on a net basis. Deferred tax assets and liabilities are not discounted.

2.12 Segmental reporting

The Board of Directors, being the Chief Operating Decision Maker (the “CODM”), is of the opinion that the Company is engaged in

a single segment of business, being investment in Global Sustainable Energy Opportunities.

The Company has no single major customer. The internal financial information to be used by the CODM on a quarterly basis to

allocate resources, assess performance and manage the Company will present the business as a single segment comprising the

portfolio of investments in energy efficiency assets.

Annual Report and Accounts 2021

Financial Statements

. Signiﬁcant accounting policies continued

The financial information used by the Board to manage the Company presents the business as a single segment.

2.13 Changes to accounting standards and interpretations

At the date of authorisation of the financial statements, there were a number of standards and interpretations which were in

issue but not yet effective. The Company has assessed the impact of these amendments and has determined that the application

of these amendments and interpretations in current and future periods will not have a significant impact on its financial

statements.

Description Effective Date

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark

Reform – Phase 2  Periods beginning on or after 1 January 2021

Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment;

IAS 37 Provisions, Contingent Liabilities and Contingent Assets Periods beginning on or after 1 January 2022

Annual Improvements to IFRSs (2018-2020 Cycle) - IFRS 1, IFRS 9, Illustrative Examples

accompanying IFRS 16, IAS 41 Periods beginning on or after 1 January 2022

Amendments to IAS 1: Classification of Liabilities as Current or Non-current Periods beginning on or after 1 January 2023

. Critical accounting estimates, judgements, and assumptions

The preparation of financial statements requires the Directors of the Company to make judgements, estimates and assumptions

that affect the reported amounts recognised in the financial statements. However, uncertainty about these assumptions and

estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability in the

future.

The estimates and underlying assumptions underpinning our investments are reviewed on an ongoing basis by both the Board

and the Investment Adviser. Revisions to accounting estimates are recognised in the period in which the estimates are revised

and in any future periods affected.

The estimates and associated assumptions that have a significant risk of causing a material adjustment to the carrying amounts

of assets and liabilities are outlined below:

Investment Entity

As detailed in Note 2.2 above, the Directors have concluded that the Company meets the definition of an investment entity by

satisfying the three key conditions as set out in IFRS 10. This assessment involves an element of judgement as to whether the

Company continues to meet the criteria outlined in the accounting standards.

nvestents eld at fair vale tro roﬁt or loss

Fair value for each investment is calculated by the Investment Adviser. Fair value for operational sustainable energy

infrastructure investments will typically be derived from a discounted cash flow (‘DCF’) methodology and the results will be

benchmarked against appropriate multiples and key performance indicators, where available for the relevant sector/industry.

For sustainable energy infrastructure investments that are not yet operational at the time of valuation, the price of recent

investment may be used as an appropriate estimate of fair value initially, but it is likely that a DCF will provide a better estimate of

fair value as the asset moves closer to operation.

In a DCF analysis the fair value is derived from the present value of the investment’s expected future cash flows to the Company,

using reasonable assumptions and forecasts for revenues, operating costs, macro-level factors, project specific factors and an

appropriate discount rate. The sensitivity analysis of these key assumptions is outlined in note 7 to the financial statements on

page 94. The AIFM and the Investment Adviser exercise their judgement in assessing the discount rate for each investment. This

is based on knowledge of the market, taking into account market intelligence gained from publicly available information, bidding

activities, discussions with financial advisers, consultants, accountants and lawyers. The risk of climate change has been

considered in the valuation of investments, where applicable. Future power prices are estimated using forecast data from

third-party specialist consultancy reports, which reflect various factors including gas prices, carbon prices and renewables

deployment.

Equity and debt investment in VH GSEO Holdings Limited

In applying their judgement, the Directors have satisfied themselves that the equity and debt investments into its direct wholly

owned subsidiary, GSEO Holdings, share the same investment characteristics and, as such, constitute a single asset class for IFRS

7 disclosure purposes.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

. Investment Income

For the Period From 30 October 2020

to 31 December 2021

Revenue

£’000

Capital

£’000

Total

000

Interest on cash deposits 132 1

Interest income from investments 1,542 - 1,

Investment income 1,674 - 1,6

. Operating epenses

0 Octoer

00 to

1 ecemer

01

000

Fees payable to the Company’s auditor (exclusive of VAT) for the:

Statutory audit of the period-end financial statements 110

Assurance related services relating to the Initial Accounts for the period to 30 June 2021 60

Other non-audit services 

Tax Advisory fees 

AIFM fees 66

Director’s fee 0

Other expenses 60

Total other epenses 1,16

Fees with respect to the Investment Adviser and the AIFM are set out in note 16, related parties transactions.

The Company had no employees during the period. Full detail on Directors’ fees is provided in the Directors’ Remuneration

Report. There were no other emoluments during the period.

6. Taation

a. Analysis of charge in the period

For the period ended 31 December 2021

Revenue

£’000

Capital

£’000

Total

000

Corporation tax - - 

. actors affecting total ta charge for the period

The effective UK corporation tax rate applicable to the Company for the period is 19%. 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 period ended 31 December 2021

Revenue

£’000

Capital

£’000

Total

000

Profit/(losses) for the period before taxation (1,680) 22,046 0,66

Corporation tax at 19% (319) 4,189 ,0

Effect of:

Capital (gains) / losses not taxable - (4,189) ,1

Expenditure not deductible 13 - 1

Management expenses not utilised/recognised 306 - 06

Total ta charge for the period - - 

Investment companies which have been approved by HM Revenue & Customs under section 1158 of the Corporation Tax Act 2010

are exempt from tax on capital gains. The Directors are of the opinion that the Company has complied with the requirements for

maintaining investment trust status for the purposes of section 1158 of the Corporation Tax Act 2010.

Additionally, the Company may utilise the interest streaming election which allows the Company to designate dividends wholly or

partly as interest distributions for UK tax purposes. Interest distributions are treated as tax deductions against taxable income of

the Company so that investors do not suffer double taxation on their returns.

The financial statements do not directly include the tax charges for the Company’s intermediate holding company, as GSEO

Holdings is held at fair value. GSEO Holdings is subject to taxation in the United Kingdom.

Annual Report and Accounts 2021

Financial Statements

c. eferred taation

The Company has unutilised excess management expenses of £1,612,479. No deferred tax asset has been recognised in respect

of these expenses. The March 2021 Budget announced a further increase to the main rate of corporation tax to 25% from 1 April

2023. This rate has been substantively enacted at the balance sheet date. The unrecognised deferred tax asset at 31 December

2021 of £403,120 has been calculated using the current corporation tax rate of 25%.

The Company has not provided for deferred tax on any capital gains or losses arising on the revaluation of investments.

. Investments at fair value through proﬁt or loss

As set out in Note 2.2, the Company designates its interest in its wholly owned direct subsidiary GSEO Holdings as an investment

at fair value through profit or loss at each balance sheet date in accordance with IFRS 13, which recognises a variety of fair value

inputs depending upon the nature of the investment. Specifically:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable.

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether

transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period.

The Company classifies all assets measured at fair value as below:

air value hierarchy

As at 31 December 2021

Total

£’000

Quoted

prices

in active

markets

(level 1)

£’000

Significant

observable

inputs

(level 2)

£’000

Significant

unobservable

inputs

(level 3)

£’000

Assets measured at fair value:

oncurrent assets    

Investments held at fair value through profit or loss 159,618 - - 159,618

All of the Company’s investments have been classified as Level 3 and there have been no transfers between levels during the

period ended 31 December 2021.

The movement on the level 3 unquoted investment during the period is shown below:



As at

1 ecemer

01

000

Opening balance on Incorporation -

Additions during the period at cost

 136,023

136,023

air value movement on investments: 

Change in fair value of equity investments 22,046

Interest on loan investments

1,549

Total fair value movement on investments 23,595

Closing alance 159,618

1 The Additions during the period at cost include acquisition costs associated with the purchase of the portfolio of assets totalling £2.64 million, which have been expensed to the

profit and loss in these companies

2 Interest on loan investments here includes £7,000 of foreign exchange movement. Total investment income on the Statement of Comprehensive Income is £1.68 million including

interest on cash deposits of £131,830

Further information on the basis of valuation is detailed in note 3 to the financial statements.

aluation methodology

As set out in note 2.2, the Company meets the definition of an investment entity as described by IFRS 10, as such the Company’s

investment in the GSEO Holdings is valued at fair value.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

The Company acquired underlying investments in special purpose entities (“SPEs”) through its investment in GSEO Holdings, as

detailed in note 8. The Investment Adviser has carried out fair market valuations of the SPE investments, where applicable, as at

31 December 2021, reviewed by the AIFM.

The Company records the net asset value of GSEO Holdings by calculating and aggregating the fair value of each of the individual

investments in which the Company holds an indirect investment. As mentioned in note 3, fair value of underlying investments is

determined by the DCF methodology. The total change in the value of the investment in GSEO Holdings is recorded through profit

and loss in the Statement of Comprehensive Income Statement of the Company.

The Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the

valuation. Investments in the US terminals and the Australia renewable power generation and battery storage assets are at fair

value through profit or loss and are valued using the IFRS 13 framework for fair value measurement. The following economic

assumptions were used in the valuation.

aluation Assumptions

iscount 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 construction.

Power price Power prices will be based on power price forecasts from leading market consultants. During the period

under review, there were no operating power generation assets.

Energy yield Estimated based on energy yield assessments from leading technical consultants as well as operational

performance data (where applicable). During the period under review there were no operating power

generation assets.

Ination rates Long-term inflation is based on central bank targets for the respective jurisdiction.

Asset life In general, an operating life of 30 years for terminals is assumed. In individual cases a longer operating life

may be assumed where the contractual set-up supports such assumption.

Operating epenses The operating expenses are primarily based on the respective contracts and budgets. Operating expenses

are primarily fixed expenses.

Taation rates The underlying country-specific tax rates are derived from leading tax consulting firms.

Capital ependiture Based on the contractual arrangements (e.g. EPC agreement), where applicable.

Key Assumptions

  31 December 2021

Discount rate Weighted Average 6.8%

Long-term inflation United States 2.0%

Remaining Asset Life Terminals 30 years

Exchange rates GBP:USD 1:1.353

GBP:BRL 1:7.539

 GBP:AUD 1:1.861

aluation sensitivity

The key sensitivities in the DCF valuation are considered to be the discount rate used in the DCF valuation and long-term

assumptions in relation to inflation, operating expenses and asset life.

The discount rate applied in the valuation of the US terminals as at 31 December 2021 is 6.8%, which is considered to be an

appropriate base case for sensitivity analysis. A variance of /- 0.5% is considered to be a reasonable range of alternative

assumptions for discount rate.

The base case long term inflation rate assumption is 2% for the United States Assets. A variance of /- 0.5% is considered to be a

reasonable range of alternative assumptions for inflation.

As at 31 December 2021, only the US terminals are operating. Therefore, the expected future cash flows investment based on the

project’s expected life, key external macro-economic assumptions and specific operating assumptions have been considered for

the fair value of these assets. The base case asset life for the terminals is 30 years. The sensitivity below assumes that asset life

may be one year shorter or longer than the base case.

Annual Report and Accounts 2021

Financial Statements

In line with IFRS 13, the fair value of the Australian Renewable power generation and Battery storage assets is calculated based on

the highest and best use of the assets, from the point of view of market participants, which would be when the battery

technology has been fully integrated with the solar plants. Furthermore, the transaction price of the acquisition would be a

reasonable approximation of the fair value, due to the recency of the transaction (November 2021) from period end and that little

have changed with the asset. Therefore, the fair value of the Australian assets at 31 December 2021 is calculated as the

acquisition price of the solar plants and the cash flows associated with the installation and operation of the batteries.

The expansion of the US terminals, Brazil Solar PV assets, and the UK Flexible Power, Carbon Capture & Reuse are in construction

as at period end. Therefore, until commencement of operations, the cost basis is considered to be the most appropriate measure

of valuation. There are no indications at 31 December 2021 that the cost basis should be impaired. As a result, only GBP:BRL and

GBP:AUD sensitivity is shown in the table below for these assets.



Base

case

Change

in input

Change in

fair value of

Investments

(£’000)

Change in

NAV per

(pence)

Discount Rate

6.8% -0.50% 3,841 1.23

0.50% (3,526) (1.13)

Inflation

2.0% -0.50% (5,540) (1.78)

0.50% 5,979 1.92

Asset life

30 years -1 year (1,127) (0.36)

1 year 1,034 0.33

Operating expenses

- -5% 2,518 0.81

5% (2,493) (0.80)

FX (GBP:USD)

1.353 -10% 11,196 3.59

10% (9,160) (2.94)

FX (GBP:BRL)

7.539 -10% 4,108 1.32

10% (3,361) (1.08)

FX (GBP:AUD)

1.861 -10% 1,753 0.56

10% (1,434) (0.46)

The sensitivities above are assumed to be independent of each other. Combined sensitivities are not presented.

. Unconsolidated susidiaries

The following table shows subsidiaries of the company. As the company is regarded as an investment entity as referred to in Note

2.1, these subsidiaries have not been consolidated in the preparation of the financial statements.

Investment Place of Business

Ownership interests

as at 31 December 2021

VH GSEO UK Holdings Limited United Kingdom 100%

Victory Hill Distributed Energy Investments Limited United Kingdom 100%

Victory Hill Flexible Power Limited United Kingdom 100%

Rhodesia Power Limited United Kingdom 100%

Wellcape Land Limited United Kingdom 100%

Victory Hill USA Holdings LLC United States 100%

Victory Hill Midstream Investments LLC United States 100%

Victory Hill Midstream Energy LLC United States 100%

Motus T1 LLC United States 100%

Motus T2 LLC United States 100%

Victory Hill Australia Investments Pty Ltd Australia 100%

Victory Hill Distributed Power Pty Ltd Australia 100%

Port Pirie Solar Pty Ltd Australia 100%

Dunblane Solar Pty Ltd Australia 100%

Victory Hill Holdings Brasil S.A. Brazil  99.99%

Energea Itagua I Aluguel De Equipamentos E Manutenao LTDA Brazil  100%

Energea Itagua II Aluguel De Equipamentos E Manutenao LTDA Brazil  100%

Energea Itagua III Aluguel De Equipamentos E Manutenao LTDA Brazil  100%

Energea Nova Friburgo LTDA Brazil  100%

Gera Solar SE LTDA Brazil 100%

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Investment Place of Business

Ownership interests

as at 31 December 2021

Gera Solar RN LTDA Brazil  100%

Gera Solar PA LTDA Brazil 100%

Gera Solar PB Energia LTDA Brazil  100%

Gera Solar MS LTDA Brazil 100%

Energea Palmas Geracao S.A Brazil 100%

Energea Geracao de Projetos Minas Gerais LTDA Brazil  100%

Energea Geracao de Projetos RJ LTDA Brazil  100%

Energea Geracao de Projetos RJ II LTDA Brazil  100%

Energea Vassouras VH Geracao LTDA Brazil 100%

CGS Sao Paulo Locacoes LTDA Brazil 100%

At 31 December 2021 the Company has one direct subsidiary and owns 100% of GSEO Holdings. The Company owns investments

in the other entities per the table above through its ownership of GSEO Holdings. GSEO Holdings owns 100% of Victory Hill USA

Holdings LLC, Victory Hill Australia Investments Pty Ltd, Victory Hill Distributed Energy Investments Limited and Victory Hill

Flexible Power Limited.

The Company’s investments in Victory Hill Midstream Investments LLC, Victory Hill Midstream Energy LLC, Motus T1 LLC and

Motus T2 LLC are held through Victory Hill USA Holdings LLC. These relate to the US terminals.

The Company’s investments in the Brazilian entities are held through Victory Hill Distributed Energy Investments Limited, which

holds 99.99% of Victory Hill Holdings Brasil S.A. These relate to the Brazil Solar PV assets.

The Company’s investments in Victory Hill Distributed Power Pty Ltd, Port Pirie Solar Pty Ltd and Dunblane Solar Pty Ltd are held

through Victory Hill Australia Investments Pty Ltd. These relate to the Australia Renewable power generation and Battery storage

assets.

The Company’s investments in Rhodesia Power Limited and Wellcape Land Limited are held through Victory Hill Flexible Power

Limited. These relate to the UK Flexible Power, Carbon Capture & Reuse assets.

. Other receivales



As at

1 ecemer

01

000

Other receivables 11

The Directors have analysed the expected credit loss in respect of receivables and concluded there was no material exposure for

the period ended 31 December 2021.

10. Cash and cash euivalents



As at

1 ecemer

01

000

Cash at bank ,0

Cash on deposit 1,16

Total cash at ank 16,10

Cash on deposit consists of funds held in a 32 day notice deposit account with Barclays Bank plc.

11. Accounts payale and accrued epenses



As at

1 ecemer

01

000

Accrued expenses 1

Other payables 1

Accounts payale and accrued epenses 1

The Directors consider that the carrying amount of trade and other payables matches their fair value.

Annual Report and Accounts 2021

Financial Statements

1. inancial risk management

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price

risk), credit risk and liquidity risk.

The AIFM and the Investment Adviser have risk management procedures and processes in place which enable them to monitor

the risks of the Company. The objective in managing risk is the creation and protection of shareholder income and value. Risk is

inherent in the Company’s activities, but it is managed through a process of ongoing identification, impact assessment, and

monitoring and subject to risk limits and other controls.

The principal financial risks facing the Company in the management of its portfolio are as follows:

Currency risk

The Company make investments which are based in countries whose local currency may not be Sterling and the Company and its

investments may make and/or receive payments that are denominated in currencies other than Sterling. Therefore, when foreign

currencies are translated into Sterling there could be a material adverse effect on the Company’s profitability and its net asset

value.

The Company’s investments are held for the long-term and the Company may enter into hedging arrangements for periods less

than 12 months to hedge against short-term currency movements. Currency risk is taken into consideration at time of investment

and included in the Investment Adviser’s assessment of minimum hurdle rate from investments. Hedging policies of the Company

will be reviewed on a regular basis to ensure that the risks associated with the Company’s investments are being appropriately

managed.

Note 7 details sensitivity analysis on the impact of changes to the inputs on the fair value of the Company’s investments.

Interest rate risk

The Company’s interest rate risk on its financial assets is limited to interest earned on cash or cash equivalents and any

shareholder loan investments, which yield interest at fixed rates. The Board considers that, shareholder loan investments bear

interest at a fixed rate, they do not carry any interest rate risk.

The Company may use borrowings for multiple purposes, including for investment purposes. At the period end the Company held

no borrowings. Interest rate risk will be taken into consideration when taking out any such borrowings.

The Company’s interest and non-interest bearing assets and liabilities as at 31 December 2021 are summarised as below:

Assets

Interest

bearing

£’000

Non-interest

bearing

£’000

Total

000

Cash and cash equivalents 163,810 - 16,10

Prepayments and other receivables - 802 0

Interest receivable 9 - 

Investments at fair value through profit or loss 56,717 102,901 1,61

Total assets 220,536 103,703 ,

iailities   

Accounts payable and accrued expenses - (341) 1

Total liailities - (341) 1

Price risk

The operation and cash flows of certain investments will depend, in substantial part, upon prevailing market prices for electricity

and fuel, and particularly natural gas. The Company intends to mitigate these risks by entering into (i) hedging arrangements; (ii)

extendable short, medium and long-term contracts; and (iii) fixed price or availability based asset-level commercial contracts, and

ensuring that market risk is combined with non-market risk exposures.

Note 7 details sensitivity analysis on the impact of changes to the inputs on the fair value of the Company’s investments.

Credit risk

Credit risk is the risk that a counterparty will cause financial loss to the Company by failing to meet a commitment it has entered

into with the Company. The Group is exposed to credit risk in respect of other receivables, cash at bank and loan investments. It

is the Company’s policy to enter into banking arrangements with reputable financial institutions. The Investment Adviser

monitors the credit ratings of banks used by the Company on a regular basis.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

The table below shows the Company’s maximum exposure to credit risk:



As at

31 December

2021

£’000

Cash and cash equivalents 163,840

Investments at fair value through profit or loss 56,717

Other receivables (Note 9) 811

221,368

The substantial majority of cash held at the period end was held with Barclays Bank plc which has a current Standard & Poor’s

short-term credit rating of A-1.

The Company had no derivatives during the period.

iuidity risk

The Company manages its liquidity and funding risks by considering cash flow forecasts and ensuring sufficient cash balances are

held within the Company to meet future needs. Prudent liquidity risk management implies maintaining sufficient cash and

marketable securities, the availability of financing through appropriate and adequate credit lines, and the ability of

counterparties to settle obligations. The Company ensures, through forecasting of capital requirements, that adequate cash is

available.

The following table details the Company’s liquidity analysis in respect of its financial liabilities on contractual undiscounted

payments:

As at 31 December 2021

 3

months

£’000

3-12

months

£’000

1-5

years

£’000

 5

years

£’000

Total

000

Accounts payable and accrued expenses 311 30 - - 1

311 30 - - 1

The Board of Directors monitors key risks faced by the Company and has agreed policies for managing the above risks with the

AIFM and/or the Investment Adviser.

Capital management

The Company considers its capital to comprise ordinary share capital, distributable reserves and retained earnings.

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

with a combination of cash, debt and equity.

1. Share Capital

Date Issued and fully paid

Number

of shares

Capital

£’000

Share premium

£’000

Special

Distributable

Reserve

£’000

As at

31 December

2021

£’000

30 October 2020 Ordinary shares 1 - - - -

2 February 2021 Ordinary shares 242,624,280 2,426 240,198 - 242,624

2 February 2021 Share issue costs (4,698) (4,698)

13 April 2021 Transfer to special distributable reserve - - (235,500) 235,500 -

3 December 2021 Ordinary shares 68,965,518 690 69,310 - 70,000

3 December 2021 Share issue costs - (1,361) (1,361)

1 ecemer 01 11,, ,116 6, ,00 06,6

The Company was incorporated on 30 October 2020 when the issued share capital of the Company was £0.01 represented by one

Ordinary Share and £50,000 represented by 50,000 management shares of nominal value of £1.00 each, which were subscribed

for by Victory Hill Capital Advisors LLP. On 2 February 2021, the Company issued a further 242,624,280 ordinary shares and on

that date 242,624,281 ordinary shares were admitted to trading on the London Stock exchange. The management shares were

redeemed at par on 2 February 2021.

On 1 December 2021, the Board announced the Company would be issuing a further 68,965,518 ordinary shares and on

3 December 2021 68,965,518 ordinary shares were admitted to trading on the London Stock exchange. The 68,965,518 New

Ordinary Shares were issued at the placing price of 101.5 pence per New Ordinary Share.

Annual Report and Accounts 2021

Financial Statements

1. Share Capital continued

The holders of the ordinary shares shall be entitled to receive, and to participate in, any dividends which the Company has

declared, from time to time proportionate to the amounts paid or credited as paid in relation to the ordinary shares that they

hold.

The ordinary shares carry the right to receive notice of, attend and vote at General Meetings and on a poll, with one vote for

each Ordinary Share held.

On a winding-up, provided the Company has satisfied all its liabilities and subject to the rights conferred on any other class of

shares in issue at that time to participate in the winding-up, the holders of ordinary shares shall be entitled to all the surplus

assets of the Company.

There are no restrictions on the free transferability of the ordinary shares, subject to compliance with applicable securities laws.

1. Special distriutale reserve



As at

31 December

2021

£’000

Balance at beginning of period -

Transfer from share premium account 235,500

Dividends paid in the period (3,033)

Balance at end of period 232,467

In order to increase distributable reserves available for the payment of future dividends, the Company resolved on

5 January 2021 that, conditional upon admission and the approval of the Court, the amount standing to the credit of the share

premium account of the Company immediately following completion of the issue be cancelled and transferred to a special

distributable reserve.

As stated by the Institute of Chartered Accountants in England and Wales (“ICAEW”) and the Institute of Chartered Accountants in

Scotland (“ICAS”) in the technical release TECH 02/17BL, The Companies (Reduction of Share Capital) Order 2008 SI 2008/1915

(“the Order”) specifies the cases in which a reserve arising from a reduction in a company’s capital (i.e., share capital, share

premium account, capital redemption reserve or redenomination reserve) is to be treated as a realised profit as a matter of law.

The Order also disapplies the general prohibition in section 654 on the distribution of a reserve arising from a reduction of

capital. The Order provides that if a limited company having a share capital reduces its capital and the reduction is confirmed by

order of court, the reserve arising from the reduction is treated as a realised profit unless the court orders otherwise.

Subsequently, following approval by the Court and registration of the cancellation with the Registrar of Companies, an amount of

£235,499,532 was transferred to a special distributable reserve with effect from 13 April 2021, which can be utilised to fund

distributions by way of dividends to the Company’s shareholders.

1. ividends

The Board of directors of VH Global Sustainable Energy Opportunities plc (the “Company”) announced an interim dividend of

1.25p per Ordinary Share with respect to the period 2 February 2021 to 30 September 2021, which was paid on 10 December

2021.

16. Transactions with AI, Investment Adviser and elated Parties

AI

On 5 January 2021, the Company entered into the AIFM Agreement with G10 Capital Limited (the ‘AIFM’) under which the AIFM has

been appointed to act as the Company’s alternative investment fund manager with overall responsibility for the risk management

and portfolio management of the Company, providing alternative investment fund manager services and ensuring compliance

with the requirements of the AIFM Rules, subject to the overall supervision of the Directors in accordance with the policies laid

down by the Directors from time to time and the investment restrictions referred to in the AIFM Agreement.

The AIFM Agreement provides that the Company will pay to the AIFM a fixed monthly fee of £5,000, exclusive of VAT. The

Company will also reimburse the AIFM for reasonable expenses properly incurred by the AIFM in the performance of its

obligations under the AIFM Agreement.

The AIFM Agreement may be terminated by the Company or the AIFM giving not less than four months’ written notice. The AIFM

Agreement may be terminated with immediate effect on the occurrence of certain events, including insolvency or in the event of

a material and continuing breach.

The AIFM fees for the period amounted to £66,000 and no amount was outstanding at the period end.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Investment Adviser

On 5 January 2021, the Company and the AIFM entered into an Investment Advisory Agreement with Victory Hill Capital Advisors

LLP. Under the Investment Advisory Agreement, the AIFM and the Company have appointed Victory Hill as investment adviser to

the Company and the AIFM.

Under the terms of the Investment Advisory Agreement, the Investment Adviser will (i) seek out and evaluate investment

opportunities: (ii) recommend the manner in which investments should be made, retained and realised; (iii) advise the Company

and the AIFM in relation to acquisitions and disposals of assets; (iv) provide asset valuations to assist the Administrator in the

calculation of; the quarterly Net Asset Value; and (v) provide operational, monitoring and asset management services.

The Investment Adviser is entitled to receive from the Company an annual fee to be calculated as percentages of the Company’s

net assets, 1% on the first £250m of NAV, 0.9% on NAV in excess of £250m and up to and including £500m and 0.8% on NAV in

excess of £500m exclusive of VAT.

The Investment Advisory Agreement may be terminated on 12 months’ written notice, provided that such notice may not be

served before 2 February 2025. The Investment Advisory Agreement may be terminated with immediate effect on the occurrence

of certain events, including insolvency or in the event of a material and continuing breach.

The Investment advisory fees for the period amounted to £2,217,992 of which none was outstanding and included in accounts

payable and accrued expenses at the end of the period.

irectors

With effect from the admission of the Company’s shares to trading on the London Stock Exchange on 2 February 2021, the

Directors have been entitled to aggregate annual remuneration (excluding expenses) payable and benefits in kind granted as

follows:



ees

000

Bernard Bulkin OBE 64

Margaret Stephens 46

Richard Horlick 46

Louise Kingham CBE 46

 202

The Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits. There

is no amount set aside or accrued by the Company in respect of contingent or deferred compensation payments or any benefits

in kind payable to the Directors. During the period ended 31 December 2021, Directors fees of £202,000 were paid, of which none

was payable at the period end.

The Directors held the following beneficial interests in the ordinary shares of the Company as at 31 December 2021.



Number of

ordinary

shares held

% of ordinary

shares in issue

Bernard Bulkin OBE 20,000 0.006

Margaret Stephens 10,000 0.003

Richard Horlick 200,000 0.064

Louise Kingham CBE 10,000 0.003

The above Directors were appointed on 30 October 2020 and 6 November 2020. Bernard Bulkin, Richard Horlick and Louise

Kingham were appointed as Directors on incorporation of the Company, and Margaret Stephens appointed as Director on

6 November 2020.

Other alances with related parties

The Company entered into intercompany loan agreements with GSEO Holdings, which entered into further intercompany loan

agreements with the following subsidiary companies.

• Victory Hill USA Holdings LLC (USD 61,565,000)

• Victory Hill Australia Investments Pty Ltd (AUD 18,000,000)

No dividends have been paid to the Company during the reporting period up to 31 December 2021.

Annual Report and Accounts 2021

Financial Statements

1. Contingent liailities and commitments

At 31 December 2021 the Company had no contingent liabilities.

In Brazil, the Company has a remaining commitment of US$13m in the construction of remote distributed solar generation

projects across ten Brazilian states with a total capacity of 75MW.

In Australia, the Company has a remaining commitment of £34m to acquire a portfolio of distributed solar generation assets with

plans to build battery storage capacity in Australia in two tranches.

In the UK, the Company has a remaining commitment £71.9m to fund two Flexible Power plants which bring together high-

efficiency gas-fired turbine technology with carbon capture systems to provide a clean and flexible electricity solution for the

United Kingdom, with a combined capacity of 45MW.

There are no remaining commitments to fulfill as at period end relating to the US terminals.

1. Earnings per share

Earnings per share (“EPS”) is calculated by dividing profit for the period attributable to ordinary equity holders of the Company by

the weighted average number of ordinary shares in issue since the Company’s incorporation on 30 October 2020 to 31 December

2021. Amounts shown below are both basic and diluted measures as there were no dilutive instruments in issue throughout the

current period.

 Revenue Capital Total

Earnings 000 (1,680) 22,046 0,66

Weighted average number of ordinary shares 193,505,110 193,505,110 1,0,110

EPS p (0.87) 11.39 10.

1. et asset value per share

Net asset value per share is calculated by dividing the net assets attributable to ordinary equity holders of the Company by the

number of ordinary shares outstanding at the reporting date. Amounts shown below are both basic and diluted measures as

there were no dilutive instruments in issue throughout the current period.



Period ended

31 December

2021

A 000 ,

Number of ordinary shares 11,,

A per share p 10.

0. Post alance sheet events

There are no post balance sheet events between period end and the issue date of this report.

1. Controlling parties

There is no ultimate controlling party of the Company.

Alternative Performance Measures (“APMs”) are often used to describe the performance of investment companies although they

are not specifically defined under IFRS. Calculations for APMs used by the Company are shown below.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

100

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Earnings per share

In addition to Note 18, the Board considers it appropriate to disclose an additional earnings per share figure calculated by dividing

profit for the period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares

in issue since the Company commenced its operations on 2 February 2021 to 31 December 2021. The Board believes this provides

a relevant measure of the Company’s performance.

 Revenue Capital Total

Earnings 000 (1,680) 22,046 0,66

Weighted average number of ordinary shares 248,458,222 248,458,222 ,,

EPS p (0.68) 8.87 .0

Ongoing charges

A measure expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment

company, calculated in accordance with the AIC methodology.

Period ended 31 December 2021 Page

Average undiluted NAV (in £’m) n/a 259.4

Recurring costs in period from commencement of operations on 2 February 2021 to 31 December 2021(in £’m) n/a 3.38

Recurring costs (annualised, in £’m) n/a 3.68

Ongoing charges 1 1.42%

Premium

The amount, expressed as a percentage, by which the share price is more than the NAV per share.

As at 31 December 2021  Page 

NAV per ordinary share  1 103.95p

Ordinary share price  26 107.00p

Premiumto NAV as at 31 December 2021  n/a 2.93%

Total return

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment

of any dividends paid out by the Company, with reinvestment on ex-dividend date.

Period ended 31 December 2021 Page NAV

price

Opening as at commencement of operations on 2 February 2021 a 26 100.00p 100.00p

Closing as at 31 December 2021 b 26 103.95p 107.00p

Dividends paid in the period 1 1.25p 1.25p

Dividend adjustment factor c n/a 1.0123 1.0123

Adjusted closing d  b x c n/a 105.22 108.31p

Total return(%) (d - a)/a 1 5.22% 8.31%

n/a  not applicable

ividend cover

Dividend cover ratio calculation is based on net cash flows generated at the SPEs adjusted for the Company level expenses and

dividends paid by the Company.

Period ended 31 December 2021 Page 

Net cash flow generated at the SPEsin (£’000) n/a 3,054

Dividend cover 1 1.01x

ALTERNATIVE PERFORMANCE MEASURES

101

Annual Report and Accounts 2021

Additional information

AIC Association of Investment Companies

AI Alternative Investment Fund Manager,

G10 Capital Limited

Annual eneral

eeting or A

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

CO Commercial Operational Date

Company VH Global Sustainable Energy

Opportunities plc

ecentralised energy Energy which is produced close to

where it will be used, rather than at a

large centralised plant elsewhere,

delivered through a centralised grid

infrastructure

iscount The amount, expressed as a

percentage, by which the share price

is less than the net asset value

per share

ividend Income receivable from an investment

in shares

EPC Engineering, procurement and

construction

ES Environmental, social and governance

EU European Union

Edividend date The date from which you are entitled

to receive a dividend which has been

declared and is due to be paid to

shareholders

inancial Conduct

Authority

or CA

The independent body that regulates

the financial services industry in

the UK

iT Feed-in Tariff

A Gross Asset Value

earing A way to magnify income and capital

returns, but which can also magnify

losses

 Green House Gases

Investment Adviser 

ictory ill

Victory Hill Capital Advisors LLP

Investment Company A company formed to invest in a

diversified portfolio of assets

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

IPO Initial Public Offering

 Megawatt

h Megawatt Hour

A per ordinary

share

NAV divided by the number of

ordinary shares in issue (excluding

any shares held in treasury)

et asset value or

A

An investment company’s assets less

its liabilities

OEC Organisation for Economic Co-

operation and Development

Ongoing charge The ‘ongoing charges’ ratio is an

indicator of the costs incurred in the

day-to-day management of the

Company, expressed as a percentage

of average net assets. This ratio

calculation is based on Association of

Investment Companies (‘AIC’)

recommended methodology

Ordinary Shares The Company’s ordinary shares

in issue

O Operation and Maintenance

PPA Power Purchase Agreement

Premium The amount, expressed as a

percentage, by which the share price

is more than the net asset value per

share

P Photovoltaic

OC Renewable Obligation Certificates

S UN Sustainable Development Goals

S Sustainable Finance Disclosure

Regulation

Share price The price of a share as determined by

a relevant stock market

SPE Special Purpose Entity

TC Task Force on Climate-Related

Financial Disclosures

Total return Total return statistics enable the

investor to make performance

comparisons between investment

trusts with different dividend policies.

The total return measures the

combined effect of any dividends

paid, together with the rise or fall in

the share price or NAV. This is

calculated by the movement in the

share price or NAV plus the dividends

paid by the Company assuming these

are reinvested in the Company at the

prevailing NAV/share price

ACC Weighted Average Cost of Capital

GLOSSARY

102

Overview Strategic Report Sustainability Governance Financial Statements Additional Information

Company number: 12986255

Country of incorporation: England and Wales

Directors, Management and Advisers

Non-Executive Directors

Bernard Bulkin OBE

Richard Horlick

Louise Kingham CBE

Margaret Stephens

Registered Office

6th Floor

Bastion House

140 London Wall

London

EC2Y 5DN

AIFM

G10 Capital Limited

4th Floor

3 More London Riverside

London

SE1 2AQ

Investment Adviser

Victory Hill Capital Advisors LLP

4 Albemarle Street

London

W1S 4GA

Corporate Broker

Numis

45 Gresham Street

London

EC2V 7WS

Legal Adviser to the Company

Eversheds Sutherland (International) LLP

One Wood Street

London

EC2V 7WS

Administrator and Company Secretary

Apex Fund and Corporate Services (UK) Limited

6th Floor

Bastion House

140 London Wall

London

EC2Y 5DN

Depositary

Apex Depositary (UK) Limited

6th Floor

Bastion House

140 London Wall

London

EC2Y 5DN

Registrar

Computershare Limited

The Pavilions

Bridgewater Road

Bristol

BS13 8AE

Auditor

BDO LLP

55 Baker Street

London

W1U 7EU