Untitled

Atrato Onsite Energy plc Annual Report 2022

The solar

energy

solution

Atrato Onsite Energy plc

4th Floor, 36 Queen Street,

London EC4R 1BN

Atrato Onsite Energy plc Annual Report 2022

Contents

Strategic Report

1 Highlights for the year

2 Chair’s Statement

4 Business model

5 The process

6 Highlights

7 Our projects

10 Investment Adviser’s Report

20 Our market

21 Sustainability

26 Section 172(1) Statement

27 Our Key Stakeholder Relationships

30 Risks and Risk Management

Corporate Governance

35 Board of Directors

36 The Investment Adviser

38 Leadership and Purpose

42 Key Board Statements

44 Management Engagement

Committee Report

45 Audit Committee Report

48 Directors’ Remuneration Report

51 Directors’ Report

54 Statement of Directors’

Responsibilities in Respect

of the Financial Statements

55 Alternative Investment Fund

Manager’s Report

Financial Statements

57 Independent Auditors’ Report to

The Members of Atrato Onsite

Energy Plc

62 Statement of Comprehensive Income

63 Statement of Financial Position

64 Statement of Changes in Equity

65 Statement of Cash Flows

66 Notes to the Financial Statements

84 Glossary

86 Contacts and Company Details

This product

is made of

FSC®-certified

Evolution 100%

Recycled.

Design and

production:

theteam.co.uk

Print:

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Atrato Onsite Energy plc Annual Report 2022

Atrato Onsite Energy plc (LSE: ROOF) is an investment

company focused on onsite clean energy generation,

providing new renewable energy capacity with 100%

carbon traceability to industrial and commercial

counterparties. The Company focuses on UK

commercial rooftop and onsite solar, helping its

corporate clients achieve net zero and reduce

their energy bills.

Annual Report 2022 1

Strategic Report Highlights for the year

Annual Report 2022 1

37sites

8 off-takers

across 63MWp

Revenue

contracted

under PPA

or subsidy

49m

Invested

in solar PV

systems

19yrs

Weighted

average

unexpired

PPA term

Q2-23

IPO proceeds

committed

Revenue with

inﬂation or

fixed uplifts

Strategic Report Chair’s statement

49m

Deployed into

a diversified

portfolio

2 Atrato Onsite Energy plc2 Atrato Onsite Energy plc

“

Our business

model has

stability of

income at

its core.

”

Juliet Davenport

Chair

Annual Report 2022 3 Annual Report 2022 3

Dear Shareholder

I am pleased to present the Company’s maiden results

forthe period from the Company’s incorporation on

16 September 2021 to 30 September 2022.

Since our IPO in November 2021, we have made solid

progress on our strategy of building an investment

portfolio of onsite clean energy generation systems.

Our investments support the UK’s net zero agenda

whilst delivering progressive dividend income and

opportunities for capital growth.

During the Period, the Company invested £49 million

into a diversified portfolio of solar PV systems, totalling

63MW of generation capacity. These assets are all

commercialised through private wire connections

secured under long term PPAs.

Our business model has stability of income at its core.

We have a secure and growing revenue stream with 91%

of revenue contracted under long-term PPA or subsidy,

and 82% receiving contracted inﬂation or fixed annual

uplifts. This is underpinned by the very long weighted

average PPA term of 19 years.

Dividends

In May 2022, the Board of Directors (“the Board”)

declared a maiden quarterly dividend of 1.76 pence

per ordinary share in respect of the period IPO to

31 March 2022. This was followed by a further dividend

of 1.25 pence per ordinary share for the quarter ended

30 June 2022 and 1.26 pence per ordinary share for the

quarter ended 30 September 2022, declared on 11th

November 2022. This annualised dividend of 5 pence per

ordinary share for the Period ending 30 September 2022

is in line with our IPO target.

Outlook

The security of energy supply has become one of

the critical social and political issues of our time.

Extraordinary highs in energy prices have necessitated

unprecedented intervention by the UK Government to

protect both businesses and consumers from these

extreme cost increases.

The current crisis in the energy market heightens the

interest of companies to transition to an independent

private wire supply of clean energy, providing long term

price certainty at an affordable cost. In the corporate

boardroom, renewable energy systems have moved

from being a ‘net zero’ agenda item to now being an

economic necessity.

Set against this, several factors have slowed the pace of

companies committing to long term PPAs. This includes

the significant volatility in wholesale prices, which

increased by 587% to its peak before subsequently falling

by 58% by the end of the financial period, and other

factors such as the company’s own cost of capital,

together with regulatory uncertainty. Corporate decision

making has been slow, particularly since the financial

period end, and this has in turn slowed our initial pace

of deployment. We appreciate that this means the IPO

proceeds will not be fully deployed as originally planned.

However, there are encouraging signs of stability. Energy

and financial markets have calmed in recent weeks and

our customers are looking to accelerate their decision

making with respect to long term commitments to

renewable energy PPAs. This means the remaining

capital can now be invested factoring in the higher

cost of capital environment.

We recently revised our deployment timeline to CY

Q22023. We also published an increase in our selected

near-term pipeline from £86 million to £100 million and

the overall pipeline of opportunities to over £360 million.

We have also been focused on building our brand with

an ambition to be the renewables partner of choice for

both corporates and landlords. In our first year we have

demonstrated an ability to execute private solar PV

projects with some of the largest companies in the world.

This has allowed us to broaden our footprint into new

sectors and develop new customer relationships. Atrato

Onsite Energy is rapidly becoming a prominent player in

the UK renewables sector.

We are encouraged and feel confident in the position

we have built for onsite solar in the UK. The Company’s

strategy sits neatly at the conﬂuence of two major

global macroeconomic investment thematics. That is,

structurally higher energy prices and commitments by

corporates and governments to reach net zero. The

investment case underpinning these two long-term

themes continues to strengthen and hence we believe

the Company is well positioned for the future.

Juliet Davenport

Chair

28 November 2022

Chair’s statement

4 Atrato Onsite Energy plc

The Benefits of Atrato Onsite Energy

Atrato Onsite Energy plc designs, finances, installs and maintains

rooftop and ground mounted solar PV systems on commercial sites

in the UK and Ireland. The Company offers a zero capex, fully funded

renewables solution, handling everything from planning and grid

connection to installation and lifetime maintenance. The Company

is a long-term investor in solar PV systems.

Strategic Report At a Glance

Business model

Improve your building’s

EPC rating

Our solar energy solutions immediately

improve your building’s EPC rating and

offers a material reduction in your carbon

footprint with real time data that you can

both quantify and report.

One-Stop-Shop

We offer a complete

renewables

solution.

We handle planning,

grid connection, installation,

and lifetime maintenance.

8-12 weeks,

installation time

Installation time for a typical rooftop

site is 8-12 weeks, with minimal

disruption to the building occupier.

Economic savings

Our power purchase agreement

(PPA) rates lock in a low cost of

electricity for the long term,

offering significant savings

versus buying electricity from

the grid.

Annual Report 2022 5

The Company offers a comprehensive design, installation and

maintenance service, which is fully funded and requires zero capex

investment from the client.

The process begins with a technical assessment to evaluate energy

usage, the irradiation at the site and the suitability of the building

(where applicable). The Company then designs a fully bespoke solar array

and handles all planning permissions and grid connection applications.

The process

Overview

A Power Purchase Agreement (“PPA”) and a

lease for the space are drafted by solicitors

and executed. The solar photovoltaics (“PV”)

systems are ethically sourced via a module

procurement policy, and the Company works

with local contractors that meet our robust

health and safety standards. Atrato Onsite

Energy is responsible for the operations and

maintenance of the system over the lifetime of

the PPA and will manage any surplus energy

generation, often supplying it back to the grid.

6 Atrato Onsite Energy plc

Strategic Report At a Glance

Highlights

As at

30 September

2022

(audited)

As at

31 March 2022

(unaudited)

Net Asset Value (“NAV”) £139.1m £146.1m

NAV per ordinary share (p) 92.8p 97.4p

Ordinary share price (p) 99.5p 112.5p

Ordinary share price premium to NAV 7.2% 15.5%

Dividends declared per ordinary share (p) 3.01p Nil

Ongoing charges ratio 1.4% 1.5%

Highlights in the Period

• Raised £150 million in the Company’s Initial

Public Offering (“IPO”)

•

Deployed £49 million into a diversified

portfolio of solar photovoltaic (“PV”) systems

– 91% of revenue contracted under Power

Purchase Agreement (“PPA”) or subsidy

– 82% of revenue has contracted annual

inﬂation or fixed uplifts

– 19 years, weighted average unexpired PPA

term and assumed asset life

•

3.01 pence dividend declared for the Period, in

line with the target set out at IPO

•

Portfolio valuation based on an unlevered

discount rate of 6.6%. The rate reﬂects the

elevated macro-economic volatility and

the increase in UK government bond

yields observed at the end of the financial

reporting period

•

The increase in the discount rate equated to a

reduction in the NAV of 6.5 pence per share

•

Awarded the LSE Green Economy Mark

• Supporter of the Task Force on Climate

Related Financial Disclosures (“TCFD”)

•

Signatory of the UN Principals for Responsible

Investment (“UNPRI”)

•

The Portfolio has achieved a 6,000t CO

equivalent saving to date

Key metrics

1 The Net Asset Value per ordinary share, ordinary share price premium to NAV and ongoing charges ratio

as alternative performance measure (“APMs”). The APMs within the accounts are defined on page 83

2 Projection based on first full year of operations

“ I am pleased to be reporting the solid

progress on our strategy of building an

investment portfolio of onsite clean energy

generation systems. During the Period, the

Company invested over £49 million into a

diversified portfolio of solar PV systems,

totalling 63MW of generation capacity.

Our business model has stability of income

at its core. We have a secure and growing

revenue stream with 91% of revenue

contracted under long-term PPA or

subsidy, and 82% receiving contracted

inﬂation or fixed annual uplifts. This is

underpinned by the very long weighted

average PPA term of 19 years. There have

been some delays in deployment, driven

in the main by external factors, but we

are confident in the proposition delivering

going forward.

Our investments support the UK’s net

zero agenda whilst delivering progressive

dividend income and long-term

opportunities for capital growth. We are

encouraged and feel confident in the

position we have built for onsite solar

in the UK.”

Juliet Davenport

Chair

Annual Report 2022 7

Our projects

The Portfolio now spans 19 counties, ensuring geographic diversification,

split across 8 off-takers across multiple industries

individual

projects

8 Atrato Onsite Energy plc

Strategic Report Our Strategy

8 Atrato Onsite Energy plc

The

responsible

environmental

solution

Our goal is to help our customers meet their

sustainability targets whilst delivering material

cost savings for their businesses.

The current energy climate has reinforced

our belief that the right financial choice

is inextricably bound to the responsible

environmental solution.

Annual Report 2022 9

Locations

across

the UK

“

Atrato Onsite Energy

is proud to be helping

corporates to achieve

their Net Zero

ambitions.

”

Juliet Davenport

Chair

10 Atrato Onsite Energy plc

Strategic Report Investment Adviser’s Report

Atrato Partners Limited is the Investment Adviser to

Atrato Onsite Energy plc and is pleased to report on

the operations of the Company for the Period.

Overview

The Company’s first Period of operations has seen the

energy sector thrown into the limelight. Record highs in

power prices have galvanised businesses to search for

solutions to their rising costs.

The Company’s goal is to advance its clients’

sustainability targets by decarbonising their energy

supply whilst also delivering material energy cost savings.

The current climate has reinforced our belief that the

right financial choice is also inextricably bound to the

responsible environmental choice. This produces a

virtuous circle that will increasingly drive our investment

opportunities.

World Leaders recently gathered once again for the

COP27 Summit in Sharm El-Sheikh, Egypt, to restate and

possibly define their commitments to the 1.5 degree

temperature rise target. This is despite a new United

Nations report that states current commitments will

achieve a 2.8 degree rise in temperature. This re-iterates

how important investment vehicles such as Atrato Onsite

Energy are to decarbonising the UK economy and the

immediate need to invest in decarbonising all aspects

of the UK economy.

The Company has deployed £49 million into high quality

onsite solar projects whilst also growing our pipeline of

opportunities to more than £360 million. Over 90% of

revenue is contracted under long-term PPA or subsidy,

and 82% has contracted annual inﬂation or fixed uplifts.

In addition, the Portfolio has a very long weighted

average unexpired PPA term of 19 years.

The Company acknowledges that it has not achieved the

IPO target of fully deploying the equity within twelve

months. The pace of deployment at the start of the year

was slower than anticipated because of specific findings

in the due diligence process on certain transactions. The

Company delayed closing until contractual remedies

were put in place to protect our exposure. We then

experienced one of the most turbulent energy markets

in history. The volatility and uncertainty in energy

markets caused many of our customers to pause their

own decision-making processes to avoid locking in to

PPAs at the top of the market. The more recent outlook

for energy markets is one of relative stability and the level

of government support now appears to be a known

quantity. We have consequently experienced an

acceleration in the decision making of our clients and

are confident that our equity deployment will be

complete by Q2 of 2023.

The Investment Adviser has significantly invested in

their renewables team, which now totals nine dedicated

professionals, hiring the right skills and experience to

expedite the execution of the pipeline. They have hired

resource across engineering, sustainability, project

delivery, business development and financial analysis.

At the end of the Period, three projects originated by the

team were undergoing installation and are expected to

be commissioned in the coming months. This will add

over 22MW to our operational portfolio. During the Period

we also completed two strategic transactions. First, the

purchase of a 6MW project on the rooftop of a Marks and

Spencer distribution warehouse in the East Midlands.

Second, the acquisition of a portfolio of 32 projects at

sites across the UK occupied by Amazon, Tesco and

Anglian Water.

The Company enters its second year with a strong

pipeline of well progressed and diversified projects

inwhich to invest the remainder of the IPO proceeds.

Thecurrent market backdrop has made our offering

even more compelling, promising both stable and

affordable clean energy for our clients. We fully expect

the Company to become the leading dedicated investor

in the UK renewables sector in 2023.

Portfolio

As at 30 September 2022, the Company’s £49 million

investment portfolio at cost comprised 37 individual

projects with a total capacity of 62.6MW.

The Portfolio was weighted towards operating assets

with 64% invested in operating assets and 36% invested

in installation assets. The remaining capital committed

to completion of the installation assets is expected to be

£1.4 million. The Portfolio now spans 19 counties, ensuring

geographic diversification, split across eight off-takers

across multiple industries.

Investment Adviser’s report

63MW

Diversified portfolio

Annual Report 2022 11

“

We are confident

that the Company

will become the

leading dedicated

investor in the

renewables

sector.

”

Gurpreet Gujral

Managing

Director

12 Atrato Onsite Energy plc

Strategic Report Investment Adviser’s Report continued

Off-taker Location Sector

Capacity

(MWp) Status

Remaining

term

Nissan Motor Manufacturing UK Limited County Durham Manufacturing 20.0 Installation 19.9

Anglian Water Services Limited Cambridgeshire Utility 11.7 Operational 22.9

Marks & Spencer Plc Leicestershire Grocery 1 Operational 12.2

Amazon UK Services Ltd. Essex Distribution 3.1 Operational 17.9

Amazon UK Services Ltd. Leicestershire Distribution 2.2 Operational 19.1

Amazon UK Services Ltd. Fife Distribution 1.6 Operational 18.2

Amazon UK Services Ltd. Warwickshire Distribution 1.6 Operational 18.0

Amazon UK Services Ltd. Cheshire Distribution 1.5 Operational 18.2

Amazon UK Services Ltd. Luton Distribution 1.5 Operational 18.3

Gardner Group Limited Derbyshire Manufacturing 1.3 Installation 25.2

Recipharm HC Ltd Cheshire Pharmaceuticals 1.0 Installation 25.2

Vale of Mowbray North Yorkshire Food production 1.0 Operational 24.3

Anglian Water Services Limited Essex Utility 0.9 Operational 21.9

Tesco Stores Limited Greater Manchester Grocery 0.7 Operational 17.8

Tesco Stores Limited Nottinghamshire Grocery 0.7 Operational 19.1

Anglian Water Services Limited Northamptonshire Utility 0.6 Operational 21.5

Tesco Stores Limited Lincolnshire Grocery 0.6 Operational 19.2

Amazon UK Services Ltd. Northamptonshire Distribution 0.6 Operational 17.2

Tesco Stores Limited North Yorkshire Grocery 0.5 Operational 19.3

Tesco Stores Limited Greater London Grocery 0.5 Operational 17.7

Anglian Water Services Limited Essex Utility 0.5 Operational 20.8

Tesco Stores Limited Lincolnshire Grocery 0.5 Operational 17.4

Tesco Stores Limited Kent Grocery 0.4 Operational 17.4

Tesco Stores Limited Suffolk Grocery 0.4 Operational 17.6

Tesco Stores Limited Essex Grocery 0.4 Operational 17.2

Tesco Stores Limited Kent Grocery 0.3 Operational 17.3

Tesco Stores Limited Somerset Grocery 0.3 Operational 17.5

Tesco Stores Limited Wiltshire Grocery 0.3 Operational 17.3

Tesco Stores Limited Kent Grocery 0.3 Operational 17.7

Tesco Stores Limited Kent Grocery 0.3 Operational 18.7

Tesco Stores Limited Essex Grocery 0.3 Operational 17.1

Anglian Water Services Limited Cambridgeshire Utility 0.2 Operational 21.0

Anglian Water Services Limited Lincolnshire Utility 0.2 Operational 21.5

Anglian Water Services Limited Cambridgeshire Utility 0.2 Operational 21.0

Tesco Stores Limited Greater Manchester Grocery 0.2 Operational 17.5

Tesco Stores Limited Kent Grocery 0.1 Operational 17.1

Tesco Stores Limited Essex Grocery 0.1 Operational 17.2

Total 62.6

19.0

average

Invested Portfolio summary as at 30 September 2022

Acquisitions and investments timeline

FEB MAR APR MAY JUN JUL AUG SEP

Investment Portfolio performance

The Portfolio of operational assets has performed above

expectations. In the Period ended 30 September 2022,

the Portfolio generated 28,816 GWh of clean energy.

The underlying operating portfolio generated revenues

of £2.9 million for the Company.

Net production variance vs. expected (GWh)

for the Period to 30 September 2022, from the

operating portfolio

Actual

(GWh)

Budget

(GWh)

GWh above

expectation

% above

expectation

Total 28,816.65 27,886.69 929.96 3.33

A key objective of the Company’s investment strategy is

to produce a stable and resilient cash ﬂow through

investment in renewable energy assets that benefit

from a high degree of contracted revenues.

Portfolio Valuation

The valuation of the Portfolio as at 30 September 2022

was £47 million. The table below shows a breakdown of

the portfolio valuation during the period.

£m

Portfolio valuation as at 16 September 2021 –

Portfolio acquisition cost 48.3

Capitalised acquisition costs 0.6

Portfolio Fair value movement (1.8)

Portfolio valuation as at 30 September 2022 47.1

Annual Report 2022 13

Acquisition of

6MW operating

project

East Midlands

Acquisition of

20MW installation

project

Sunderland

Entry into

PPA for 1.2MW

installation

project

Derby

Acquisition of

1MW installation

project

Yorkshire

First

installation

project enters

operations

Yorkshire

Entry into

PPA for

1MW installation

project

Cheshire

Acquisition

of 33.3MW

operating project

UK wide

MARKS & SPENCER: DONINGTON

TYPE: Rooftop solar PV

PPA LENGTH: 12 years

SIZE: 6MWp

STATUS: Operational

A 6MWp rooftop solar PV system for

Marks & Spencer plc (“M&S”) located in

Leicestershire. The system benefits from

Renewables Obligation Certificates (ROCs)

at a rate of 1.6 ROCs per megawatt hour of

generation. The system is operational and

immediately income producing for the

Company. At the time of completion, it was

the largest rooftop solar array in the UK

and was expected to lower M&S’s carbon

footprint by 48,000 tonnes over 20 years.

M&S intends to become a net zero business

by 2035 and net zero across their entire

value chain by 2040. They have joined the

UN’s Race to Zero campaign and have

aligned their targets with the Paris Climate

Agreement to limit global warming.

14 Atrato Onsite Energy plc

Valuation of the Company’s Portfolio is performed on a

semi-annual basis at 31 March and 30 September. The

Investment Adviser is responsible for advising the Board

in determining the valuation of the Portfolio and, when

required, carrying out the fair market valuation of the

Company’s investments.

A discounted cash ﬂow (“DCF”) valuation methodology

is applied to determine the fair value of each investment

which is customary for valuing privately owned

renewable energy assets and considered consistent

with the requirements of compliance with International

Financial Reporting Standard (“IFRS”) 9 and IFRS 13.

Using the DCF methodology, the fair value is derived

from the present value of each investment’s expected

future cash ﬂows, using reasonable assumptions and

forecasts for revenues and operating costs and an

appropriate discount rate.

Assumptions impacting the valuation include discount

rates, annual energy production, merchant power prices,

various operating expenses and associated annual

escalation rates. These are often tied to inﬂation,

including asset management, balance of plant, land

leases, insurance, and relevant taxes. The discount rate

applied on the post-tax levered project cash ﬂows is the

weighted average discount rate and the valuation is

benchmarked against comparable market multiples.

Asset life on the current Portfolio is assumed to be the

length of the PPA and lease term as the assets are

handed over to the off-taker at the end of this term,

with no extension options included in the contracts.

Weighted average discount rate for valuation

The valuation of the Portfolio at 30 September 2022 reﬂects

an underlying blended weighted average post-tax

discount rate of 6.6%. The reduction in the Portfolio

valuation is due to the increase in the discount rate

as at 30 September 2022 valuation date.

Elevated macro-economic volatility, higher inﬂation

expectations and UK political uncertainty drove both

a rapid and a significant increase in long-term UK

government bond yields as at 30 September 2022. Given

the scale of the movements, the Investment Adviser and

the Board have valued the portfolio based on a weighted

average unlevered discount rate of 6.6%. This is based on

a spread over the 10-year UK gilt yield, which rose

substantially at the financial period end.

This discount rate is higher than the average unlevered

discount rates observed in the UK renewables market

pre-September 2022. The increase in the discount rate

equated to a reduction in the NAV of 6.5 pence per share.

The Company’s future pipeline will be underwritten

based on this increased discount rate. As a result, the

Company expects to deliver a higher unlevered return

onfuture projects.

Portfolio Valuation Sensitivities

The figure below shows the impact on the portfolio

valuation of changes to the key input assumptions

(“Sensitivities”). The Sensitivities are based on the Portfolio

as at 30 September 2022. For each sensitivity illustrated, it

is assumed that potential changes occur independently

with no effect on any other assumption. The low sensitivity

to changes in merchant power prices reﬂects the long-

term contracted revenues in the Company’s Portfolio.

Similarly, the moderate impacts due to variations in

operational expenses, reﬂects the Company’s assets

having a majority of fixed price, long-term operating

expenses including operations and maintenance

(“O&M”), property leases and payments in lieu of taxes.

-6% -4% -2% 0 2% 4% 6%

Energy Generation ±8%

Discount Rates ±50bps

Merchant price ±10%

Operating Expenses ±10%

Inﬂation ±50bps

-4.18

-3.63

-0.24%

-2.55

-3.43

3.60

3.86

0.24

2.50

3.44

-6.00% -4.00% -2.00% – 2.00% 4.00% 6.00%

Merchant power prices ±10%

Cost of debt ±50bps

Energy production P75/P25

Discount rates ±50bps

Inﬂation ±50bps

Operating expenses ±10%

-2.88%

-3.43%

-0.26%

-0.00%

-4.17%

2.79%

3.40%

-3.63% 3.87%

0.26%

0.00%

3.59%

Our Portfolio

We provide below further details of our Invested Portfolio

in case studies of individual projects which have either

been acquired or developed during the period.

As at 30 September

2022

Number of

renewable

energy assets

Off-takers

supplied

Invested Portfolio

generating

capacity

37 8 62.6MW

Clean electricity

generated

since IPO

Tonnes of

e avoided

Weighted average

unexpired

PPA term

28,817GWh 6,000 19 years

Strategic Report Investment Adviser’s Report continued

UK 10yr Gilt YTM (%)

ROOF discount

rate set at peak

of UK Gilt yields

Balance

sheet

reporting

date

Yield to maturity (%)

Nov 21 Jan 22Dec 21 Sept 22 Oct 22 Nov 22Aug 22Jul 22Jun 22May 22Apr 22Mar 22Feb 22

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

6.6%

discount

rate

91%

contracted

revenue

19yr

unexpired

term

6.6% discount rate 91% contracted revenue 19yr unexpired term

Status %

Operational

Installation

Weighted by capacity (MWp)

Portfolio off-takers %

Nissan

Anglian Water

Amazon

Tesco Stores

Marks & Spencer

Gardner Group

Recipham

Vale of Mowbray

Weighted by capacity (MWp)

Status %

Operational

Installation

Weighted by capacity (MWp)

Portfolio off-takers %

Nissan

Anglian Water

Amazon

Tesco Stores

Marks & Spencer

Gardner Group

Recipham

Vale of Mowbray

Weighted by capacity (MWp)

Key financials and NAV

NAV as at 30 September 2022 was announced on

31 October 2022 as 92.8 pence per share. The NAV reﬂects

the valuation of the Company’s portfolio and incorporates

the costs associated with the IPO, ongoing running costs

and dividend distributions.

At IPO on 23 November 2021, the Company raised gross

issue proceeds of £150.0 million by issuing 150,000,000

Shares. As set out in the table below, the Company’s NAV

as at 30 September 2022 was £139 million, predominantly

reﬂecting the movement in the valuation of investments

and dividends paid.

NAV Bridge from IPO to 30 September 2022

Movement in Net Asset Value

from IPO to 30 September 2022 £m

Pence per

NAV following IPO £147.1 98.1

Dividends paid £(4.5) (3.0)

Rerate on yield compression £5.0 3.3

Operating cash ﬂow £2.8 1.9

Increase in unlevered discount rate £(9.7) (6.5)

Net operating expenses £(1.6) (1.0)

NAV as at 30 September 2022 £139.1 92.8

Dividends paid: Dividends of £4.5 million (3.01 pence

per share) were paid during the Period in respect of the

period to 30 June 2022. In addition, after the Period end,

the Company declared a further dividend of 1.26 pence

per share in respect of the quarter ended 30 September

2022. Furthermore, the annualised dividend is 50% cash

covered by the current Portfolio.

Rerate on yield: Represents the difference between the

invested capital and the discounted future cash ﬂows

for development sites prior to reﬂecting an increase in

discount rates resulting from risk-free rate increases at

year end. This would have resulted in a NAV increase of

£5.0 million, since the IPO on 23 November 2021 (“IPO”),

but has been offset by an increase in the discount rate,

detailed below.

NISSAN: SUNDERLAND TYNE & WEAR

TYPE: Ground mount solar PV

PPA LENGTH: 20 years

SIZE: 20MWp

STATUS: Commissioning expected Jan 23

A 20MW ground mount solar PV system for

Nissan Motor Manufacturing UK Limited

(“Nissan”). The installation is located at Nissan’s

Sunderland manufacturing plant which is the

subject of a £1 billion investment plan to

transform the site into an electric vehicle hub,

including the UK’s first large-scale battery factory.

Nissan’s Sunderland plant forms the centerpiece

of NissanEV360, a £1billion electric vehicle hub

which aims to create a sustainable blueprint for

vehicle manufacturing by incorporating electric

vehicles, renewable energy and battery

production. In 2021 Nissan became the first

Japanese carmaker to join the United Nations

backed Race to Zero campaign which accelerates

the company’s full electrification and carbon

neutrality goals.

Annual Report 2022 15

Operating cash ﬂow: Represents the net cashﬂows

generated by each project.

Increase in unlevered discount rate: Represents the

impact on the fair value from changes to the discount

rate due to recent movements in the risk-free rate.

Elevated macro-economic volatility, higher inﬂation

expectations and UK political uncertainty over recent

weeks has led to an increase in long-term UK

government bond yields.

Net operating expenses: Represents the net movement

in Company administration expenses.

The assumptions set out in this section remain subject

to continuous review by the Investment Adviser and

the Board.

The Company’s total loss before tax for the Period was

£(3.4) million (revenue loss of £1.2m and capital loss of

£2.2m) and earnings per share, based on distributions

received from the Company’s unconsolidated subsidiary,

Atrato Onsite Energy Holdco Limited (“Holdco”) (which

indirectly holds the Company’s assets through

underlying subsidiaries), were (2.7) pence per share

(revenue of (0.92) pence and capital of (1.75) pence).

As at 30 September 2022, of the 37 total assets, 34 were

in operation and three were in installation and scheduled

to become operational during Q4 2022 and Q1 2023.

Financing

The Company has not sought any external financing in

the Period as its immediate priority is the investment of

the IPO proceeds. However, the Company engages

regularly with debt providers to maintain up-to-date

assumptions about the prospects and pricing of secured

senior debt against appropriate parts of its portfolio in

future, in line with its stated investment policy. The

Investment Adviser constantly monitors the appropriate

source, whether debt or equity, and the timing of such

funding required to execute on the pipeline of acquisition

opportunities secured by the Company.

Dividends

In May 2022, in line with the timeframe set out in the

IPO, the Board declared a maiden quarterly dividend of

1.76 pence per share in respect of the period from IPO to

31 March 2022. This was followed by further dividends of

1.25 pence per share for the quarter ended 30 June 2022,

and in November 2022 a further 1.26 pence per Share for

the quarter ended 30 September 2022.

As a result, on an annualised basis, the Company

achieved its 5 pence per share IPO target for the dividend

in respect of the initial period to 30 September 2022.

Aligned with the target set out at IPO, the Company

will target an annualized dividend target of 5 pence

per ordinary share for the financial period ending

30 September 2023.

Annual General Meeting

We look forward to welcoming Shareholders in the

Company (“Shareholders”) to the Company’s Annual

General Meeting (“AGM”) to be held in March 2023.

More details will be provided via an RNS announcement

in due course.

Strategic Report Investment Adviser’s Report continued

16 Atrato Onsite Energy plc

SONNE SOLAR PORTFOLIO:

TYPE: GROUND MOUNT AND ROOFTOP SOLAR PV

PPA LENGTH: 20 year average remaining

SIZE: 33MWp

STATUS: Operational

A 33MW mixed ground mount and rooftop portfolio of

operational behind-the-meter solar PV systems. The

portfolio, held within Sonne Solar Limited, consists of

assets at 32 sites in England and Scotland which are

occupied by Amazon, Tesco or Anglian Water. Electricity

from the assets is sold to the relevant site occupier

under a long-term PPA, with excess generation being

exported to the grid. The sites were commissioned

between 2018 and 2022, and several of the earlier sites

also benefit from government-backed feed-in-tariffs

linked to RPI. Sonne Solar Limited is the counterparty to

a framework agreement with a FTSE 100 business

through which it has access to a development pipeline

of 33 further behind-the-meter sites in the UK.

This is one of the largest operational behind-the-meter

portfolios in the UK and generates an annual CO

saving of c. 6,500t relative to grid imports. The deal

provided an accelerated route to scale for the

Company’s portfolio, delivering immediate revenues

and securing relationships with key off-takers.

Annual Report 2022 17

Post balance sheet events

Portfolio management

The Company has a PPA with Vale of Mowbray Limited

(“Vale of Mowbray”) under which the Company supplies

behind-the-meter (“BTM”) green energy generated

through its rooftop solar installation. This asset is the

smallest project in the Company’s Portfolio and

represents less than 0.6% of the Company’s NAV.

Vale of Mowbray entered voluntary administration the

day before the Period end. The Company has confirmed

with the administrators that it will continue to sell energy

to the site during the administration process, with any

excess sold to the grid under an existing spill PPA at a

premium of 84% above the Vale of Mowbray’s contractual

PPA price. When the site is vacated, all energy generated

by the Company’s solar installation will be sold to the grid

under the higher spill PPA price.

The Company does not expect any material adverse

consequences because of this administration, illustrating

the value of the credit protections that the Company

typically benefits from in its contracts.

Recent government legislation

A multitude of factors has driven UK wholesale electricity

prices to historic highs. Daily prices reached almost

£600/MWh in August 2022. For August as a whole, the

average auction price exceeded £370/MWh, compared

to £107/MWh last year and £37/MWh in August 2020.

This triggered new UK legislation that provided

financial support for businesses struggling with

higher energy costs.

The Electricity Generator Levy

As part of the Autumn Statement, the UK Government

outlined an Electricity Generator Levy (“the Levy”). The

Levy is a temporary windfall tax of 45% that will be

applied to wholesale market revenues above £75/MWh

on UK low-carbon electricity generation. The Levy will

beapplied from 1 January 2023 until 31 March 2028.

The Company’s focus on long-term highly contracted

solar PV systems results in a low sensitivity to wholesale

power prices. Based on the current portfolio and pipeline,

the Levy is not expected to impact the Company’s target

returns or net asset value.

Pipeline

At the time of the interim results, the Company

published a selected pipeline of near-term projects to be

completed by September 2022 (worth £39 million), and a

further batch of projects that were due to be completed

by December 2022 (worth £86 million, the “December

Selected Pipeline”). The initial target was met in

September with the Company successfully committing

a total of £49 million, amassing a portfolio with a total

capacity of 63MWp.

The December Selected Pipeline remains broadly intact.

However, the recent market backdrop of economic and

political instability has led, in some cases the Company

and, in other cases the off-taker, to delay the decision to

execute on those deals. The Company has revised its

deployment timeline and now expects to have 100% of

IPO proceeds committed by CY Q2 2023. The Investment

Adviser has also increased its selected near-term pipeline

from £86 million to £100 million, out of a total pipeline of

over £360 million.

We have two opportunities in our pipeline that are under

exclusivity totalling >£40m of capital value, including a

c.30MW ground mounted installation. Advanced

discussions are currently ongoing with several corporates

to enter into a long term sleeved or “virtual” PPA on this

asset. Investment in these systems can deliver attractive

returns with a comparable risk profile where the

sponsoring corporate undertakes to pay for the energy

generated via a long-term off-take agreement.

We have observed an increase in corporates seeking to

achieve scale in renewable energy generation through

increased investment in ground mounted installations.

Inmany cases, like our Nissan and Anglian Water assets,

these are behind the meter installations. However,

corporates are also sponsoring new front of meter

developments through long term PPAs as an option

toadvance net zero targets.

Sustainability

During the reporting period, the Company has continued

todevelop its sustainability strategy, with a focus on

defining the Company’s investment impact. This includes

environmental, social and governance risk management,

as well as quantifying positive and negative impacts from

its investment activities. These actions are designed to

ensure that investments are made having assessed all

aspects of risks and opportunities to preserve and grow

capital for the long term.

ESG Impact Long-term investing

Sustainability

We have identified our key sustainability related priorities

based on an in-depth materiality assessment which

highlighted six key elements. These cover the mitigation

of environmental impact and social risks within the solar

industry, high standards of governance and reporting

frameworks, engagement with tenants and responsible

citizenship and support for communities. These are

covered in more detail in the Sustainability section on

pages 21 to 23

Outlook

The Company finds itself in a position of significant

competitive strength given the amount of undeployed

‘dry powder’ capital on its balance sheet, especially at this

point in the cycle when many in the industry are capital

constrained. We are currently able to achieve materially

higher unlevered returns on new projects.

The Company now expects to have committed 100% of

the £150 million IPO proceeds in Q2 2023. Once all capital

is deployed, the portfolio will provide an estimated 50,000

tonnes of carbon emissions savings per annum.

18 Atrato Onsite Energy plc

Strategic Report Our strategy

Our

renewable

experts

Atrato Onsite Energy leverages a significant

understanding of the commercial property

market with renewable energy development

expertise.

18 Atrato Onsite Energy plc

Annual Report 2022 19

“

We’re

empowering

businesses

to reach net

zero goals.

”

Juliet Davenport

Chair

Annual Report 2022 19

2.5bn

square meters

of south facing

commercial roof

space in the UK

20 Atrato Onsite Energy plc

Power prices

A conﬂuence of factors including the war in Ukraine,

weather, market structures and demand patterns has

driven wholesale electricity prices during the Period to

historic highs in Great Britain, with daily prices on the

N2EX day ahead auction reaching almost £600/MWh in

August 2022. For the month, the average auction price

topped £370/MWh, an increase from £107/MWh in

the same month of 2021 and a ten-fold increase from

August 2020.

Such dramatic increases in the wholesale electricity

price naturally impact consumers, both at home and

in business, and the Government is introducing a raft

of measures to provide support and protect against

rocketing energy costs. In September 2022, a temporary

price cap for businesses was announced, limiting the unit

price paid to £211/MWh for electricity and removing green

levies from the bills of non-domestic clients. This price

cap will be in force for six months from October 2022,

with expectations of some continued targeted support

for vulnerable sectors thereafter.

The capped unit price is in line with the monthly average

grid import price at the time of the Company’s IPO in

November 2021. As the PPA price for onsite generation

is typically lower than this, the Government support

measures therefore support the case for businesses to

commit to onsite solutions. Indeed, the relatively short-

term nature of the support and continued uncertainty

from March 2023 are expected to highlight to businesses

the advantages of taking control of their energy costs by

securing long term price certainty such as that which can

be delivered through onsite PPAs. The commercial case

for onsite PPAs is further underpinned by predictions of

sustained high prices. Analysis from some market

forecasters suggest that wholesale electricity prices will

remain above the pre-2021 historic average until at least

the end of this decade.

The investment opportunity

Elevated grid power prices are an important factor for

businesses in evaluating alternative supply options, with

77% of businesses surveyed in the nPower 2022 Business

Energy Tracker reporting that energy costs were seen

as the top business risk. Sustainability and net zero

measures remained an important consideration for most

businesses surveyed, but an overwhelming majority of

more than 90% had concerns about the costs of funding

the energy transition and so a PPA solution may be

attractive to those evaluating the potential for onsite

generation. This is supported by research from the CBI in

August 2022, which reported that 30% of firms consider

that energy price rises were likely to negatively impact

current or planned investment in net zero measures.

For these businesses, a fully funded PPA solution for

onsite generation could provide an attractive route to

attain sustainability goals whilst also reducing costs.

Corporate PPAs, which provide direct agreements

between generators and business consumers for grid

connected, offsite assets, are also garnering more

attention as an option for aiding price certainty whilst

simultaneously achieving corporate sustainability targets.

Inﬂation in power prices and the economy more generally

is feeding through into increases in equipment and labour

costs for delivery of projects, resulting in some rises in the

PPA rate which we need to achieve for new installations.

However, these rises are outstripped by the increases in

the grid import prices described above, ensuring that

the economic rationale for clients is preserved.

We expect that the backdrop of elevated and volatile

wholesale electricity prices should prove favourable

for the Company’s investment proposition, driving

corporates to focus on alternative solutions such as

onsite generation and thus facilitating the realisation

of the potential market.

Our Market

Strategic Report Our Market

p/kWh

Price volatility delayed deployment

Nov 21 Jan 22Dec 21 Sept 22 Oct 22 Nov 22Aug 22Jul 22Jun 22May 22Apr 22Mar 22Feb 22

ROOF discount

rate set at peak

of UK Gilt yields

Russia invades

Ukraine

European gas

shortages

Energy prices

stabilise

Speculation on

government

intervention

UK wholesale electricity prices

Annual Report 2022 21

Strategic Report Sustainability

Introduction

During the reporting period, the Company has continued

to develop its sustainability strategy.

As part of the implementation of this strategy the

Investment Adviser has recruited a Head of Sustainability,

Christoph Scaife. Christoph took up this role in February

2022 and will take the lead in further developing and

implementing the Company’s sustainability strategy

with the Company’s investment team.

A key element of the Company’s ESG strategy focuses on

defining the Company’s investment impact. This includes

environmental, social and governance risk management,

as well as quantifying positive and negative impacts from

its investment activities. These actions are designed to

ensure that investments are made having assessed all

aspects of risks and opportunities to preserve and grow

capital for the long term.

Since IPO, sustainability related priorities have been

identified as key to delivering value for the Company’s

stakeholders. These were based on an in-depth

materiality assessment which highlighted six key

elements as detailed below:

Market supply chain developments

In May 2021 the University of Hallam, Sheffield, published

a report that was widely regarded as the tipping point to

exposing forced labour practices in the Xinjiang Uyghur

Autonomous Region (“XUAR”) of China, and in particular

within the solar sector. Over the past two years various

reports have emerged and investigation have been

launched, however, the true scale of forced labour

practices is still not fully understood. Investigations are not

comprehensive enough and the degree to which these

practices occur varies. Investors and project developers are

required to evaluate and mitigate this risk through their

own procurement practices until such a time as the

industry has fully addressed these issues. Dame Sara

Thornton DBE QPM has stated in December 2021:

“Forced labour is a global problem, hidden in farms,

factories, mines, and construction sites around the

world. No sector is immune from exploitation and no

business can afford to be complacent. Audits can help

unearth the indicators of forced labour as defined by

the International Labour Organization (ILO). Tracking

these indicators is important for building a nuanced

picture of risks in the workplace.

However, audits alone are not sufficient for addressing

forced labour risk or finding modern slavery. They should

be part of a wider portfolio of engagement, including

worker voice tools, to deepen understanding of the

complex commercial ecosystems in which businesses

operate. Admitting that all businesses are at risk is an

important development as this sector matures. The next

steps should be the identification and remediation of

victims. Ultimately all stakeholders – businesses,

government, investors, NGOs and society – should work

collaboratively to prevent forced labour from entering

supply chains in the first place. These are not easy steps

for any organisation, but those businesses that show

leadership will be rewarded by more resilient business

models and competitive advantage as scrutiny from

investors, consumers, legislators and NGOs intensifies in

this space.”

As the Company is an active participant in the sector,

procuring and installing solar panels that will most likely

have originated in China, whether through the extraction

of raw materials, manufacturing of silicon ingots or the

assembly of photovoltaic panels, the risk of the

Company’s supply chain having forced labour is material.

The Company’s investment adviser has recognised this

risk and has developed various mitigation measures to

address these. Whilst the ability to fully exclude the

companies that have exposure to forced labour practices

remains challenging, the Company does have control

over its own procurement processes. The Investment

Adviser has developed a set of criteria for ensuring that

panels and equipment are not procured from any

supplier associated with forced labour. Ensuring its own

supply chain is considered “clean” is the first step to

ensuring that shareholders in the Company are

Sustainability

Developed frameworks

for tracking positive

impact and contributions

to the transition to

renewable energy

Mitigation of

environmental impact

Engagement with

tenants and wider

stakeholders

Introducing the highest

standards of governance

and reporting

Mitigation of social risks

within the solar industry

Responsible citizenship

and support for

communities

22 Atrato Onsite Energy plc

protected from this social risk Additionally, increasing

demand for ethically produced panels contributes to

the industry incentive that good operational and labour

practices are rewarded.

Procurement policy

The Investment Adviser has developed a procurement

policy that attempts to mitigate the exposure to forced

labour issues that are present in the solar PV industry.

The Module Procurement Policy will be reviewed

semi-annually and signed off by a Company Director

in collaboration with the Investment Adviser’s Head

of Sustainability, on behalf of the Company’s Board.

The Board’s obligations and commitments relating to

equipment procurement are documented in the

modern slavery and human trafficking statement

and are included in the Company’s prospectus dated

1 November 2021 (Part 4 ESG and Sustainability).

Application of the Supplier Criteria

The availability of independent and corroborated

information regarding modern slavery in the Chinese

region of Xinjiang and the involvement (whether directly

or indirectly) of individual manufacturers is limited. This

situation has been exacerbated in the last two years by a

lack of access attributable to the coronavirus pandemic.

However, the supplier criteria (“Supplier Criteria”) is

updated to reﬂect industry best practice as it evolves with

the improving availability of standardised and audited

information. Suppliers are excluded if they are unable to

meet our Supplier Criteria, these include:

The supplier has a clear and publicly stated policy

which prohibits the use of any form of forced labour

or modern slavery.

A supplier code of conduct to which its suppliers

must subscribe and which requires adherence

to the manufacturer’s forced labour and modern

slavery policy.

The manufacturer has satisfactory evidence that it

monitors and enforces suppliers’ adherence to the

code of conduct in practice. The manufacturer must

be able to present a fully segregated supply chain

which can be certified that no raw materials or

processing originates or is undertaken in the

XUAR province.

The manufacturer has processes in place that enable

it to trace the supply chain for individual modules or

shipments back to the supply of raw materials.

The Module Procurement Policy was approved by the

Company’s Board of Directors in June 2022 and the

Investment Adviser is responsible for maintaining the

Module Procurement Policy.

The Improvement List (“Improvement List”) is a list

whereby the Company acquires a project that already

has panels installed/purchased where the manufacturer

has not met the Supplier Criteria, and/or the origin and

manufacture of the panels have not been adequately

documented. The Improvement List is an identification

process for steps that need to be taken and is not an

investment exclusion list. The Improvement List requires

a retrospective approach with those assets to bring them

into alignment with best procurement practices.

Where an asset has been added to the Improvement List,

the Investment Advisor will:

a. Determine the manufacturer of the panels installed, on

a best-efforts basis and obtain the certificates of origin

or details of raw material sources, processing and

manufacturing.

b. Determine if the panels manufacturer has exposure to

the Xinjian province, and/or no evidence provided that

the panels have been procured through a segregated

supply chain that excludes the Xinjiang province.

c. Request certificates of origin for any post transactions

panels that are procured, in accordance with the

Supplier Criteria, and link these to the original

screening and investment paper.

d. Clearly communicate to the Investment Committee,

Board and Head of Sustainability what actions are still

required to satisfy compliance criteria, and seek to

agree an improvement plan,

e. Develop an improvement plan, which should be signed

off by the Head of Sustainability and registered in the

Panels Compliance register.

Contractual commitments

In all contracts which relate to the procurement of

modules, the Investment Adviser will require the

inclusion of a commitment from its counterparty to the

eradication of all forms of forced labour in the supply

chain for those modules.

As part of the Company’s supplier selection process for

possible installers and operators, due diligence activities

will also consider local procurement content as well as

equal opportunities. The Company believes that its

investments should benefit local stakeholders at every

level including opportunities to work in developing local

infrastructure. The Investment Adviser will track local

content involvement as transactions are developed.

Strategic Report Sustainability continued

Annual Report 2022 23

Carbon emissions

As this is the first year of operation with investments

being completed in the latter part of the reporting

period, noting that the Company did not emit emissions

that have exceeded 40,000kWh during the year and is

not required to disclose carbon emissions related to its

operations. It should be noted that the Investment

Adviser will be publishing its full carbon related

emissions at the end of the reporting year where the

emissions associated with the fund and operations for

2022 will be reported.

Corporate Social Responsibility

The Company has made a commitment to donate

oneper cent of its profits to charitable causes through

anindependent foundation. 2022 is the first year of

operations for the Company, and no profit has been

achieved in this operating year.

The Investment Adviser is establishing The Atrato

Foundation (the “Foundation”) as a UK charity.

The Investment Adviser will develop a selection

policy to evaluate charities that help in the growth

and acceptance of sustainable energy generation.

The Foundation will support charities promoting

education, training and personal development with

respect to skills relevant to the clean energy sector.

It will also support the Board’s agenda of diversity, equal

opportunity and social mobility. It will achieve this by

working with the Investment Adviser to provide training

and education and the development of a diverse and

stable workforce.

The Investment Adviser has also committed to make

donations to the Foundation of 3% of profits. The

minimum funding level for donation is set at £5,000.

In addition, employees at the Investment Adviser

currently volunteer on several charitable initiatives

including mentoring young people in schools and select

students through IntoUniversity. Steve Windsor, Principal,

and the Head of Human Resources mentor through

STEM Learning. STEM and IntoUniversity are aimed at

supporting students from underprivileged and diverse

backgrounds into work and higher/further education.

24 Atrato Onsite Energy plc

Atrato Onsite Energy is at the

forefront of the UK’s renewable

energy transition.

24 Atrato Onsite Energy plc

Traceable,

renewable

and affordable

energy for all

Strategic Report Our strategy

Annual Report 2022 25 Annual Report 2022 25

“

Rooftop solar

installations can

unlock the vast

untapped potential of

commercial property

in the UK.

”

Francisca Wiggins

Assistant Fund Manager

50,000

tonnes

of carbon emissions

savings per annum

* post £150m deployment

26 Atrato Onsite Energy plc

Strategic Report Board developments and activities as per Section 172(1) Statement

The Board considers that in conducting the business of the

Company over the course of the year ended 30 September

2022, they have acted to promote the long-term success of

the Company for the benefit of Shareholders, whilst having

regard to the matters set out in section 172(1)(a-f) of the

Companies Act 2006 (“the Act”).

Details of our key stakeholders and how the Board engages

with them can be found on pages 27 to 29.

Other disclosures relating to our consideration of the

matters set out in s172(1)(a-f) of the Act have been noted

as follows:

s172 Factor Our approach Relevant disclosures

A. The likely

consequences of

any decision in

the long-term

The Board has regard to its wider obligations under

Section 172 of the Act. As such strategic discussions involve

careful considerations of the longer-term consequences of

any decisions and their implications on Shareholders and

other stakeholders and the risk to the longer-term success

of the business. Any recommendation is supported by

detailed cash ﬂow projections based on various scenarios,

which include availability of funding; borrowing; as well as

the wider economic conditions and market performance.

Our Key Stakeholder relationships on

pages 27 to 29.

Board activities during the year on

pages 38 and 41.

B. The interests of

the Company’s

employees

The Company does not have any employees because of

its external management structure.

The Board’s main working relationship is with the

Investment Adviser. Consequently, the Directors have

regard to the interests of the individuals who are

responsible for delivery of the investment advisory

services to the Company to the extent that they can do

so. Secondary to the Investment Adviser, the consider the

interests of individuals in other service providers to the

Company.

Our Key stakeholders on pages

27 to 29.

Culture on page 39

C. The need to

foster the

Company’s

business

relationships

with suppliers,

customers and

others

The Board believes that building effective business

relationships with suppliers, customers and other

key counterparties is crucial to preserving long-term

shareholder value. Excluding the Investment Adviser,

at the corporate level, these stakeholders include the

Administrator and Company Secretary, Corporate Broker,

Legal Counsel, public relations agency and the Auditor

and tax advisers. At the operational level, this includes

asset-level counterparties, local communities and debt

providers.

Our Key stakeholders on pages

27 to 29.

D. The impact of

the Company’s

operations on

the community

and the

environment

As an owner of assets located in communities across the

UK, we aim to ensure that our solar assets provide safe

and comfortable environments and contribute to the

reduction of fossil fuels.

The impact on the community is covered in the

Company’s Sustainability section of this Report.

Our Key stakeholders on pages

27 to 29.

Details of the ESG policy and strategy

are included on pages 21 to 23.

The Board’s approach to sustainability

is explained on pages 21 to 23.

E. The desirability

of the Company

maintaining a

reputation for

high standards

of business

conduct

The Board is mindful that the ability of the Company

to continue to conduct its investment business and to

finance its activities depends in part on the reputation

of the Board, the Investment Adviser and Investment

Advisory Team.

The risk of falling short of the high standards expected

and thereby risking business reputation is included in the

Audit and Risk Committee’s review of the Company’s risk

Chair’s letter on corporate governance

on pages 51 and 53.

Principal risks and uncertainties on

pages 30 to 34.

Our culture on page 39.

F. The need to act

fairly as between

members of the

Company

The Board recognises the importance of treating all

members fairly and oversees investor relations initiatives

to ensure that views and opinions of Shareholders can be

considered when setting strategy.

Chair’s letter on corporate governance

on pages 51 and 53.

Our Key stakeholders on pages

27 to 29.

Section 172(1) Statement

Annual Report 2022 27

Strategic Report Our Key Stakeholder Relationships

Building strong relationships with our key stakeholders

isa critical element to our success. The Board recognises

that the foundation underpinning effective corporate

governance is determined on how it aligns the strategic

decisions of the Company with the views of its various

stakeholders. We aim to build long-lasting relationships

with all our key stakeholders based on professionalism

and integrity.

The Board regularly consults with the Investment

Adviser, who in turn manage and foster the relationships

with our clients, supply chain, key partners and advisers.

Investor engagement

The Company’s Shareholders are an incredibly important

stakeholder group and the ultimate owners of the

business. To deliver our strategy, it is vital that

Shareholders continue to understand and support the

Company’s performance, investment thesis as well as the

wider market in which we operate. The Board oversees

the Investment Adviser’s formal investor relations

programme which is supported by the Company’s

brokers and public relations consultants, providing

Shareholders with frequent business updates as well as

facilitating regular meetings both in person and on-line.

The Board aims to be open with Shareholders and

available to them, subject to compliance with relevant

securities laws.

How did we engage?

•

The 2023 AGM will be held as a physical meeting

inLondon and will be attended by all the Board.

Themeeting details will be announced by RNS and

open to all Shareholders.

•

Because the Company had no formal analyst coverage

in March 2022, there was no FY22 interim results

presentation to analysts. The Company’s broker

arranged a roadshow for institutional Shareholders.

•

The Board approves all resolutions and related

documentation to be put to Shareholders at the AGM,

together with circulars, prospectuses, listing particulars

and regulatory announcements concerning the

Company.

•

Our website contains comprehensive information

about our business, regulatory news and press

releases alongside information about our approach

to ESG issues.

•

The formal investor relations programme is designed

to promote engagement with major investors,

generally defined as those holding more than

approximately 1% of the shares in the Company.

Major investors are offered meetings after each results

announcement or other significant announcements.

The Investment Adviser also held multiple virtual

meetings with prospective and new investors.

Topics discussed

•

Financial performance of the Company and disclosures

contained within the interim report

•

The impact on the Company because of Vale of

Mowbray administration.

•

Macroeconomic themes including the impact of

inﬂation, merchant power prices and government

decisions in relation to energy prices.

How did we respond?

•

Investor feedback has helped shape our disclosures,

with additional supplementary information provided in

these annual results.

•

Positive feedback using virtual meetings has improved

accessibility to our international and regional based

Shareholders. We anticipate that on-line engagement

will continue to play an important part in engagement

with our Shareholders in addition to helping to reduce

associated carbon emissions in line with our

sustainability strategy. Further details of our

sustainability strategy can be found on pages 21 to 23.

EPC contractors

We recognise the importance of EPC contractors to our

business, not only to develop and build the solar projects

for us and our clients, but also to recognise us as

experienced partner to fund their projects and to deliver

a constant stream of pipeline work for us. We currently

have a strong relationship with selected EPC contractors,

and regularly interact with them during the design and

installation process of a project. Our EPC contractors on

site are currently performing in line with our

expectations. No major H&S incidents have been

reported at the time of writing this report.

How did we engage?

•

Regular meetings held with EPC contractors to discuss

development pipeline and performance on current

projects in construction.

•

We carried out site visits, both internally and using

third party technical advisers, to assess construction

quality and verify construction is in line with

contractual timelines.

Topics discussed

•

Issues on sites, particularly related to timelines and

safety on site.

•

New PPA projects on the horizon, contractors’ ability

to deliver such sites, and potential PPA pricing.

•

Design issues pre-construction, to ensure that the

solar PV plants are in line with our specifications.

•

Topics related to commissioning, acceptance and

handover documentation.

Our Key Stakeholder Relationships

28 Atrato Onsite Energy plc

Strategic Report Our Key Stakeholder Relationships continued

How did we respond?

•

We provide PPA prices to EPC contractors for projects

that meet our investment criteria.

•

We translate contractor’s reports to report to the

off-takers as required under the PPA.

•

We manage the EPC contractors to ensure that

projects are built on time and budget, and that all

acceptance criteria are being met.

Operations and maintenance contractors

The Company recognises the importance of the

operations and maintenance contractors to ensure the

ongoing operation of the projects. The relationship with

these providers is managed via the asset manager who

has regular interaction with the providers to ensure the

ongoing performance of the sites. The Investment

Adviser overlooks this interaction and is regularly

updated on performance and health and safety

relatedsituations.

The Investment Adviser

The Board’s main working relationship is with the

Investment Adviser. The Investment Adviser brings a

depth of experience in the renewable energy sector.

This gives the Company a competitive advantage

through its knowledge, specialist focus and network

of industry contacts. The Investment Adviser has a

crucial role in the performance and long-term success

of the Company.

Whilst the Company has no employees, other than the

Directors, the Board has regard to the interests of the

individuals who are responsible for delivery of investment

advisory services to the Company to the extent that

they are able to do so. The Board does not have direct

responsibility for any employees.

The Board and the Investment Adviser maintain

a positive and transparent relationship to ensure

alignment of values and business objectives.

How did we engage?

•

The Board engages with the Investment Adviser at

a minimum on a quarterly basis which follows the

Company corporate calendar. In addition to the

scheduled quarterly meetings, the Board will also

have separate unscheduled Board meetings to

approve recommendations for all acquisitions, approval

of asset management opportunities, and appointment

of advisers.

•

The Management Engagement Committee met after

year end and have performed a detailed review of the

Investment Adviser’s performance.

•

The Independent Directors will seek to obtain and

assess feedback from investors, advisers and other

market participants, where appropriate, in order to

monitor standards of conduct, including the conduct

and reputation of the Investment Adviser and the

reputation of the business.

•

The Board will also engage with the Investment

Adviser through the annual strategy day in addition

to informal meetings as and when required.

Topics discussed

•

The process for operating the delegated authorities

and related controls at the Investment Adviser.

•

Deployment speed and pipeline updates.

How did we respond?

•

Inclusion of a section on activities undertaken pursuant

to the delegated authorities within the quarterly

Investment Advisers report.

•

Establishment of monthly meetings to update the

Board on the pipeline and deployment progress.

Asset Manager

We recognise that the success of the Company relies on

the continued success of the asset manager, appointed

by Holdco and managed by the IA, to provide financial

and technical services on the projects. The asset

manager relies on the quality of the operations and

maintenance contractors to succeed. Therefore, we place

particular emphasis on having a strong relationship with

the asset manager to better understand the challenges

and opportunities facing their business.

How did we engage?

Regular meetings held between the Investment Adviser

and the Asset Manager to understand current and future

needs. Any potential opportunities or risks facing the

Company are fed back to the Board to inform future

strategy. The Investment Adviser will visit sites on a

periodic basis and feedback on material issues reported

back to the Board.

Topics discussed

•

Issues on sites, particularly in connection with the Asset

Manager’s ability to monitor the meters and operation

and maintenance contractors remotely.

• Performance of the solar assets and their generation

during the relevant period.

•

Performance of the operations and maintenance

service providers.

•

Financial issues that have arisen on any of the assets

in the portfolio.

How did we respond?

•

The Asset Manager’s monitoring software will be

connected to all sites.

•

Monthly and quarterly reports are reviewed provided

by the Asset Manager are reviewed and discussed at

informal weekly meetings with the Investment Adviser

and the formal quarterly meetings.

Annual Report 2022 29

Our Suppliers

The Company’s key suppliers include professional firms

such as accounting and law firms and transaction

counterparties, which can vary in size and sophistication.

Whilst most engagements are subject to a tender

process to ensure the Company continues to obtain

value for money, we aim to partner with suppliers who

share our values and ethos and work to secure the best

people with an established track record and, where

possible, retain key partners on successive transactions

and workstreams.

Where material counterparties are new to the business,

checks, including anti money laundering checks, are

conducted prior to transacting any business to ensure

that no reputational or legal issues would arise from

engaging with that counterparty. The Company also

reviews the compliance of all material counterparties

with relevant laws and regulations such as the Criminal

Finances Act 2017.

The Company and its subsidiary entities have a policy of

paying suppliers in accordance with pre-agreed terms

as reported in the Supplier Payment Policies:

How did we engage?

•

Key suppliers such as our Company’s corporate

broker, Alvarium Securities, are invited to attend

the quarterly Board meetings in order for the Board

to be kept informed of the current market within

which we operate.

•

The Board and Committees are able to speak with

accounting and law firms on an informal or one-to-one

basis to discuss specific issues relating to the Company.

Topics discussed

•

Service levels and annual performance.

• Fees charged during the year for key suppliers

engaged during the year.

•

Relationship management.

How did we respond?

•

There is direct engagement between the Investment

Adviser and the Board in respect of suppliers engaged

during the year. Feedback has continued to be positive

on all our key supplier arrangements.

•

The Board has established a Management

Engagement Committee, where the supplier

performance and fees are reviewed on an annual basis

to ensure that the Company continues to obtain best

value for money on services procured.

•

Face-to-face meetings with key service providers

will be arranged in order to discuss the ongoing

relationship with the company, these will be held

without the Investment Adviser present.

•

The Company has implemented a procurement

policy, which aims to eliminate the practices of modern

slavery in the supply chain of module suppliers. Our

procurement policy states that the purchasing of

panels should include a guarantee that the raw

materials and manufacturing will exclude any forced

labour and should be procured outside of the known

regions where these practices are known to be

happening. The policy has been developed with the

UK’s Modern Slavery Act 2015 as set out below and is

reviewed annually. Suppliers are reviewed at least

semi-annually to ensure that procurement procedures

are up to date.

Supplier payment policies

Neither the Company nor any of its subsidiary

undertakings exceeds the thresholds for reporting

payment practices and performance.

The following voluntary disclosures relate to

the Company:

•

the Company does not have standard or maximum

payment terms but seeks to settle supplier invoices

in accordance with pre-agreed terms.

•

invoices may be submitted electronically but as the

volume of payments is relatively low, the Company

does not operate electronic tracking for suppliers.

•

the Company does not offer supply chain finance.

• there are no arrangements for participation on

supplier lists and no charges for being on such a list.

•

the Company is not a member of a payment code

of conduct.

Modern slavery and human trafficking policy

The Company is committed to maintaining the highest

standards of ethical behaviour and expects the same of

its business partners. Slavery and human trafficking are

entirely incompatible with the Company’s business

ethics. We believe that every effort should be made

to eliminate slavery and human trafficking in the

Company’s supply chain. The Board has considered

and approved our Modern Slavery Statement, which

demonstrates our commitment to seeking to ensure

that there is no slavery, forced labour or human

trafficking within any part of our business or suppliers.

A copy of our Modern Slavery Statement is available at

https://atratoroof.com/regulatory-documents/.

30 Atrato Onsite Energy plc

Strategic Report Risks and Risk Management

The Board and JTC Global AIFM Solutions Limited, the

Company’s Alternative Investment Fund Manager (the

“AIFM”), together have joint overall responsibility for the

Company’s risk management and internal controls, with

the Audit Committee reviewing the effectiveness of the

Board’s risk management processes on its behalf.

To ensure that risks are recognised and appropriately

managed, the Board has agreed a formal risk

management framework. This framework sets out the

mechanisms through which the Board identifies,

evaluates and monitors its principal risks and the

effectiveness of the controls in place to mitigate them.

The Board and the AIFM recognise that effective risk

management is key to the Company’s success. Risk

management ensures a defined approach to decision

making that seeks to decrease the uncertainty

surrounding anticipated outcomes, balanced against

the objective of creating value for Shareholders.

The Board determines the level of risk it will accept in

achieving its business objectives, and this has not

changed throughout the period. We have no appetite

for risk in relation to regulatory compliance or the

health, safety and welfare of our contractors, service

providers and the wider community in which we work.

We continue to have a moderate appetite for risk in

relation to activities which drive revenues and increase

financial returns for our investors.

There are a number of potential risks and uncertainties

which could have a material impact on the Company’s

performance over the forthcoming financial year and

could cause actual results to differ materially from

expected and historical results.

The risk management process includes the Board’s

identification, consideration and assessment of those

emerging risks which may impact the Company.

Emerging risks are specifically covered in the risk

framework, with assessments made both during the

regular quarterly risk review and as potentially significant

risks arise. The quarterly assessment includes input from

the Investment Adviser and review of information by the

AIFM, prior to consideration by the Audit Committee.

The matrix below illustrates our assessment of the

impact and the probability of the principal risks

identified after the application of mitigating measures.

The rationale for the perceived increases and decreases

in the risks identified is contained in the commentary

for each risk category.

Risks and Risk Management

1. Deployment of capital and pipeline

2. Performance of third-party service providers

3. Investment performance and measurement

4. Changes in cost of finance

5. Project counterparty risk

6. Power Price risk

7. Operational, climate and ESG risk

8. Economic and regulatory conditions, locally and globally

9. ITC tax status and changes in tax legislation

10. Local and global political risk and impact of pandemic

High

Moderate

Low

Moderate

Rare

IMPACT

PROBABILITY

This risk map shows our assessment of each area of principal risk after mitigation

Annual Report 2022 31

Risk category Potential impact Mitigation

1. Deployment of

capital and pipeline

Probability: Moderate

Impact: High

The Company’s intention is to deploy the capital

raised into Clean Energy Assets. However, there is a

risk that the pipeline of opportunities does not

crystalise or that the Company is uncompetitive and

fails to secure the assets that meet the investment

objectives in a timely manner to provide the target

return to the investors.

Delays in deployment will impact returns.

There is a risk that due diligence carried out on

acquisition of or investment in any Clean Energy

Asset is insufficient and does not reveal all the facts

that are relevant to the opportunity, leading to the

Company overpaying.

The Investment Adviser has multiple routes to

sourceassets allowing us to benefit from off market

transactions through: (i) an extensive network of

contacts providing access to operational assets and

development opportunities, (ii) a developed network

of EPC contractors with their own dedicated sales

teams to source new opportunities, and (iii) contacts

with material landlords. The Investment Adviser

hasidentified a pipeline of opportunities with an

estimated investment value of is 2.4 times the capital

raised. Delays in capital deployment have been a

result of a turbulent market, however several

exclusivity agreements have been secured in

relationto this pipeline.

The Company will engage with reputable and

knowledgeable service providers to provide due

diligence and appropriate contractual protection

forliabilities is sought.

2. Performance of

third-party service

providers

Probability: Low

Impact: High

The Company has no employees and is reliant on

third party services providers to perform services that

are integral to the operation of the Company, and on

non-executive directors to oversee the performance

of these service providers and the Company.

Contractual performance is measured through

performance metrics and fee structures are

established to align the incentive of the service

providers of the Company. This is achieved by

contract fees linked to shares and the Company’s

NAV. The Board regularly reviews the appropriateness

of these service providers and their performance.

3. Investment

performance and

measurement

Probability: Moderate

Impact: High

Investment valuation and decisions are based on

financial projections and assumptions captured in

a financial model. These assumptions may change

from time to time and the actual performance may

vary significantly from the assumptions.

Assumptions are reliant on various factors, including

environmental conditions, which are not guaranteed.

Historical trends are only an indication of future

conditions.

The financial model may contain errors that will

impact the forecast returns.

The Investment Adviser bases assumptions on

industry data and reputable solar irradiance

databases. The P50 irradiance scenario is used as a

base case and sensitivity to changes in irradiation

are assessed. Assumptions are updated and

benchmarked frequently and the model itself is

regularly reviewed.

4. Changes in cost of

finance

Probability: High

Impact: Moderate

The discount rates used in the valuation represents

the Investment Adviser’s and the Board’s assessment

of the rate of return in the market for assets with

similar characteristics and risk profile. Increased

underlying interest rates or expectations of

prolonged high inﬂation may lead to increased

discount rates being applied by the market and a

consequential decrease in the portfolio value.

The Company’s use of debt financing in future may

also be affected by changes in the cost and availability

of finance. While the use of borrowings should

enhance the total return on the ordinary shares, it is

possible that borrowing costs will exceed income and

therefore returns will be negatively impacted.

The discounts rates are reviewed on a regular basis

and updated, where appropriate, to reﬂect changes

in the market and in project risk characteristics.

The Company currently has no debt. Any future debt

would be subject to the 40% cap set out in the

investment policy. The Company will enter interest

rate caps and swaps where appropriate to mitigate

the risk of interest rate rises.

5. Project

counterparty risk

Probability: Moderate

Impact: Low

Each revenue generation agreement is subject to

the credit worthiness of the counterparty and in the

event of non-payment or insolvency of the off-taker,

the revenue will be lost and there is no guarantee

that an alternative user is found.

Service providers are engaged to install, operate and

manage Clean Energy Assets. If these providers fail to

perform or have financial difficulties, the financial

performance and reputation of the Company could

be adversely affected.

The portfolio of off-takers is diversified to alleviate

concentration risk. Credit assessments are conducted

prior to and during the PPA term to identify default

risk. Each property is assessed for suitability for

alternative occupiers and the availability of an export

connection to the grid to allow for sale of generation

via the public grid to a licensed supplier.

Service providers are subject to credit assessments

and appropriate security is sought where advance

payments are required. Performance levels are

stipulated in the contracts and performance is

monitored during the period of contract performance.

Principal Risk

32 Atrato Onsite Energy plc

Risk category Potential impact Mitigation

6. Power price risk

Probability: Moderate

Impact: Low

Investments in Clean Energy Assets may have

exposure to power prices. Where the counterparty

does not use all of the electricity generated the rate at

which the excess can be sold will be determined by

market prices, which may be lower than the

contracted rates.

If market rates are very low, users may not be

willing to enter into an agreement for supply

from the Company.

The Company’s strategy is to seek to enter long term

fixed price PPAs for at least 80% of the energy

generated from its Onsite Solar Assets. Any excess

generation is exported to the grid under shorter term

arrangements. The sensitivity of the NAV to a change

in wholesale power prices is monitored by the

Investment Adviser and the impact of any new asset

on the portfolio sensitivity is reported during the

investment approval process.

Third party wholesale power price forecasts are

monitored by the Investment Adviser relative to the

prices available under PPAs for Onsite Solar Assets to

confirm that PPAs remain attractive.

7. Operational,

climate and ESG risk

Probability: Moderate

Impact: Moderate

The Company’s indirect subsidiaries owns assets

on third party property and assumes obligations

under the contracts and could be liable for

non-performance. In some instances, parent

company guarantees are required in respect of a

portfolio company’s obligations under its contracts.

Assets can fail due to technical faults, lifespan and

theft of components and there is a risk of an absence

of direct connection to the grid. Where a connection

exists, there is a risk the connection fails.

Clean Energy Assets can cause environmental hazards

and nuisance.

In addition, assets profitability is dependent upon

weather conditions over which the Company has no

control.

Insurances may not cover specific risks and changes

in environmental laws may have an impact on the

Company’s activities.

When conducting due diligence on potential

investments, the Investment Adviser considers the

potential impact of asset failures and provides for

appropriate contractual and insurance protections.

Security around assets is reviewed regularly and assets

are inspected regularly for damage or signs of decay.

Technical due diligence is undertaken prior to

acquisition or development of an asset to identify risks

and appropriate mitigating measures. Installation

contracts include taking over provisions and defects

liability periods, and major equipment is supplied with

long-term warranties.

Environmental surveys are undertaken, where

appropriate.

Energy generation is based on P50 forecasts which

are deemed appropriate for long-term assets.

Insurance brokers advise on appropriate insurance

coverage.

8. Economic and

regulatory

conditions, locally

and globally

Probability: Moderate

Impact: Moderate

The Company and its portfolio may be materially

affected by conditions in the global financial markets

and economic conditions, including inﬂation and

deﬂation, business and consumer confidence,

currency exchange rates and controls, trade barriers

and commodity prices. These factors are outside the

Company’s control and may affect the valuation of its

investments.

There is a risk of loss of supply licence or similar

exemptions. Any government subsidies and incentives

to which the portfolio is entitled may reduce over

time. Regulations around renewable energy may

change without significant notice, invalidating the

operating model of the Company. Network charges

are subject to change.

The Investment Adviser will continually monitor the

macro environment and ensure that it adopts

appropriate mitigating strategies, including hedging,

entering long term contracts and linking pricing to

inﬂation.

The Investment Adviser will engage with industry

specialists to ensure it is up to date with any

potential changes and will where possible feed

into consultations.

9. ITC tax status

and changes in tax

legislation

Probability: Low

Impact: High

The Company may breach the conditions of an

Investment Trust leading to it being subject to UK tax

on gains.

Tax legislation is subject to change in both the UK and

any other jurisdiction in which the Company invests.

There is a risk that corporation or other tax rates may

increase as governments seek to finance deficits

arising from, amongst other things, the consequences

of the COVID-19 pandemic.

The Investment Adviser has engaged specialist tax

advisers for compliance and is monitoring compliance

with the Investment Trust Company conditions

referencing the tax structuring advice received at IPO.

The Investment Adviser with the appointed tax

adviser monitor potential changes in tax legislation

and rates and assess their impact on the investment

portfolio.

10. Local and global

political risk and

impact of pandemics

Probability: Low

Impact: Moderate

The ongoing uncertainty around Brexit continues to

cause significant volatility in financial markets and

may necessitate further changes to the regulatory

environment.

The ongoing conﬂict in Ukraine has led to higher

power prices, leading to energy price caps for

domestic and commercial users. This may reduce

appetite for PPAs in the near term.

A pandemic, like COVID-19, could create operational

challenges for the assets incurring failures, as service

providers may not be able to attend to the failures.

Additionally, energy demand at certain sites may be

reduced.

The Investment Adviser will monitor industry and

national news to ensure that any proposed changes

are anticipated, and appropriate mitigations are taken.

The price cap for commercial users is set at a rate

which is significantly above typical PPA rates, and

is only in force until March 2023, meaning that

long-term PPAs can still be attractive.

Asset performance can be monitored remotely

and regular contact with the service providers is

maintained to ensure ongoing service.

Assets, where practicable, benefit from the ability

to export excess generation to the grid.

Strategic Report Our Principal risks continued

Annual Report 2022 33

Emerging Risks

The Directors have identified the following emerging risks:

Power prices – impact on customers

With the ending of the strict Covid-19 lockdowns and the

associated reduction in economic activity that drove down

power prices, wholesale electricity and gas prices have

rebounded extremely strongly. Existing high prices at the

start of 2022 were then pushed even higher by Russia’s

invasion of Ukraine and the sanctions on Russian fossil

fuels that followed.

The Company’s exposure to wholesale power prices is

limited, although these prices have an overall impact

on our clients’ price sensitivity in PPA negotiations,

and uncertainty around regulatory interventions for

commercial energy bills can cause customers to

delay decisions around long-term PPAs.

Brexit – legal and regulatory risk

On 31 January 2020, the UK ceased to be a member of the

European Union, entering a limited transition period until

31 December 2020. 100% of the Portfolio is located in the

UK and none of the existing assets have experienced legal

or regulatory issues stemming from Brexit. Regulation

changes as a fall out of Brexit continue to be monitored

including the impact on the availability of resources, prices

and taxation.

Power prices – impact on generators

In the recent Autumn Statement, the UK Government

announced its plans to recover, and limit perceived excess

profits from generators whose cost of generation is not

linked to the price of gas.

The Electricity Generator Levy (“the Levy”) is a temporary

windfall tax of 45% that will be applied to wholesale

market revenues above £75/MWh on UK low-carbon

electricity generation. The Levy will be applied from

1January 2023 until 31 March 2028. The Company’s focus

on long-term highly contracted solar PV systems results in

a low sensitivity to wholesale power prices. Based on the

current portfolio and pipeline, the Levy is not expected to

impact the Company’s target returns or net asset value.

Debt financing covenants

The Company’s primary intention is to deploy the capital

raised in the IPO and then review the markets for

additional funding, potentially through debt financing.

This finance will contain covenants, which if breached will

lead to forced sale of assets or significant cash injections.

The Board, through the AIFM and Investment Adviser will

monitor compliance with covenants to ensure sufficient

headroom and provide early warning of any issues that

may arise.

Going concern

In light of the current macroeconomic backdrop, the

Directors have continued to place significant focus on the

appropriateness of adopting the going concern basis in

preparing the Company’s financial statements for the

period ended 30 September 2022. In assessing the going

concern basis of accounting the Directors have had regard

to the guidance issued by the Financial Reporting Council.

The Board regularly monitors the Company’s ability

to continue as a going concern. Included in the

information reviewed at quarterly Board meetings are

summaries of the Company’s liquidity position, cash

ﬂow forecasts, scenarios and sensitivities, operational

and market impact, and the financial strength of its

customers. Based on this information, the Directors are

satisfied that the Company is able to continue in

business for the foreseeable future, being a period of

at least twelve months from the date of approval of the

financial statements, and therefore have adopted the

going concern basis in the preparation of these

financial statements.

In light of the Company’s current position and principal

risks, the Board has assessed the prospects of the

Company for the period to 29 November 2023, reviewing

the Company’s liquidity position, and the financial

strength of its counterparties, together with forecasts

of the Company’s future performance under various

scenarios. The Board has concluded there is a

reasonable expectation that the Company will be able

to continue in operation and meet its liabilities over that

period. The Board has also assessed the prospects of the

Company over a longer period than the going concern

review and has a reasonable expectation that the

Company will be able to continue in business over

the five-year period examined in that assessment.

The Company generated a net cash outﬂow from

operating activities in the period of £5.0 million, with its

cash balances at 30 September 2022 totalling £69 million

and fixed deposits greater than three months, at

inception, of £20 million. The Company had £1.4 million

in capital commitments as at the balance sheet date.

98% of contractual income for the period has been

collected in full.

All clients’ credit risk is assessed at engagement with an

annual review to highlight any risk arising subsequent to

engagement. During the year Vale of Mowbray entered

into administration resulting in generation being

exported the grid under the spill agreement.

As a result, the Directors believe that the Company is

well placed to manage its financing and other business

risks and will remain viable, continuing to operate and

meeting its liabilities as they fall due over the assessment

period. The Directors are therefore of the opinion that the

going concern basis adopted in the preparation of the

financial statements is appropriate.

34 Atrato Onsite Energy plc

Strategic Report Our Principal risks continued

Viability Statement

The Board has assessed the prospects of the Company

over the five years from the balance sheet date to

30 September 2027, which is the period covered by the

Company’s longer term financial projections. The Board

considers five years to be an appropriate forecast period,

although the Company’s contractual income extends

beyond five years, since the availability of most finance

and market uncertainty reduces the overall reliability of

forecast performance over a longer period.

The assumptions underpinning these forecast cash ﬂows

forecasts were sensitised to explore the resilience of the

Company to the potential impact of the Company’s

significant risks, or a combination of those risks. The

principal risks on pages 30 to 32 summarise those

matters that could prevent the Company from delivering

on its strategy. A number of these principal risks, because

of their nature or potential impact, could also threaten

the Company’s ability to continue in business in its

current form if they were to occur. The Directors paid

particular attention to the risk of a deterioration in

economic outlook which could impact solar assets,

including taxes on power generation companies, which

would have a negative impact on valuations. In assessing

the resilience of the Company, consideration was given

to operations, the geographical diversification and

availability of alternative service providers who could take

over existing contracts or provide additional services to

ensure business continuity.

The sensitivities performed were designed to be severe

but plausible; and to take full account of the availability of

mitigating actions that could be taken to avoid or reduce

the impact or occurrence of the underlying risks. Based

on the sensitivity results on the Portfolio, a combination

of generation, inﬂation and operating cost increases were

applied to assess the Company’s resilience. The outcome

of these results supported the Company’s resilience. In

addition, the Board considered the strength of services

providers and the availability of alternative options to

replace underperforming providers.

The Board considers the resilience of projected liquidity,

as well as compliance with the ITC rules, under a range

of RPI and valuation assumptions.

The principal risks and the key assumptions that were

relevant to this assessment are as follows:

Risk Assumption

Inﬂation risk The increase in inﬂationary costs are

managed by capping the inﬂation

applicable to main supplier contracts

in line with inﬂation caps applied to

PPA revenues.

Liquidity risk The Company continues to generate

sufficient cash to cover its costs

while retaining the ability to make

distributions.

Off-taker risk Off-takers comply with their

obligations over the term of the

Power Purchase Agreement (“PPA”)

and no key off-taker suffers an

insolvency event over the term of

the review.

Based on the work performed, the Board has a reasonable

expectation that the Company will be able to continue in

business over the five-year period of its assessment.

Other disclosures

Disclosures in relation to the Company’s business model

and strategy have been included within the Investment

Adviser’s report on pages 10 to 17. Disclosures in relation

to the main industry trends and factors that are likely to

affect the future performance and position of the

business have been included within Market outlook on

pages 20. Disclosures in relation to environmental and

social issues have been included within the ESG section

on pages 21 to 23. Employee diversity disclosures have not

been included as the Directors’ do not consider these to

be relevant to the Company.

Key Performance Indicators (KPIs)

The Company’s Board of Directors meets regularly and

at each meeting reviews performance against a number

of key performance indicators, which include:

•

Portfolio yield – the Company’s objective is to seek

toprovide Shareholders with an attractive level of

distributions with modest capital growth over the

longterm. In alignment with the IPO, an annualised

dividend of five pence per share has been declared out

ofNAV, while the deployment of capital has secured a

portfolio yield of 7.7%. The Portfolio yield is the average

yield of the next five years for the existing portfolio,

where the yield is net cash generated in each year

fromthe Portfolio over the cost of investment.

•

Dividend cover forecast – dividends form a key

component of the total return to Shareholders. With

the deployment of a third of the capital raised, the fully

operational portfolio will provide 50% cover of dividend

target in future years before funding operating

expenses of the Company. While long term dividend

cover will be the ratio of net cash ﬂows generated from

the investments and all costs incurred by the Company

to the dividend paid in the period. This 50% dividend

cover reﬂects the portion of a 5 pence per share

dividend, covered by the cash generated by the

existing portfolio once fully commissioned.

•

Ongoing charges ratio – the expenses of managing

the Company are carefully monitored by the Board.

The standard performance measure of these is the

ongoing charges ratio (“OCR”), which is calculated by

dividing the sum of such expenses over the course of

the year by the average NAV over the year. This ratio

provides a guide to the effect on this performance of

annual operating costs. The Company’s OCR for the

Period was 1.38% against a target of 1.5%.

•

Premium/discount of share price to NAV per share –

The Board monitors the price of the Company shares

in relation to their NAV and the premium/discount at

which the shares trade. The level of discount or

premium is mostly a function of investor sentiment

and demand for the shares, over which the Board

may have limited inﬂuence. The share price stood

at a 7.2% premium as at 30 September 2022.

Annual Report 2022 35

Corporate Governance Board of directors

The Board of Directors Relevant Skills and experience: Career Highlights:

Juliet Davenport

Chair

 Over 23 years’ experience

 Founded Good Energy plc

 NED Connected Kerb, Ombudsman

Services and The Crown Estate

 Juliet has had various appointments with

academic organisations and think tanks

focusing on sustainability and innovation,

including the Bath University, Bristol

University, University of Wales, Grantham

Institute at Imperial College and London

School of Economics, and the Smith School

of Enterprise and the Environment at the

University of Oxford.

 In 1998, Juliet founded the AIM-listed

company Good Energy plc, a 100%

renewable energy utility specialising in

decentralised small-scale renewables.

 In her role as CEO she oversaw its growth to

a £130 million turnover business, including

developing over 100MW of renewable assets

and supporting a portfolio of over 100,000

small scale roof top solar sites. Juliet stepped

down as CEO in 2021, moving to a non-

executive board director role for 12 months.

 Juliet has a wealth of non-executive and

advisory experience. She serves on the board

of the Crown Estate and supports its

integration of sustainability across the

organisation together with the development

of renewables on Crown property and more

recently has been appointed as the

President of the Energy Institute.

Marlene Wood

Chair of Audit Committee

 Chartered accountant with extensive

experience in investment trust governance

 Held senior board positions across a broad

range of both private and public companies

 Non-executive director and chair of the

audit committee for RM Infrastructure

Income PLC, Home REIT PLC and formerly

chair of the audit committee for GCP

Student Living PLC.

 Formerly Deputy Chair and Finance

Committee Chair for the Scottish Funding

Council for Further and Higher Education.

 She spent 20 years with the Miller Group,

a major UK property business,

predominantly as Finance Director for

Miller Developments, the property

development and investment arm,

and latterly as Group Accounting and

Treasury Director.

Faye Goss

Chair of Management

Engagement Committee

 Extensive experience as a property lawyer

and senior business adviser

 General Counsel for Lendlease Europe

 Spent over 11 years at Tesco PLC where she

led Tesco’s group property legal function

with responsibility across its international

and domestic property portfolio and

responsibilities included oversight of

elements of Tesco’s carbon reduction

commitments such as the roll-out of solar

panels across the estate and the associated

offtake arrangements.

 Faye trained as a real estate solicitor and

worked for both CMS and Brian Cave

Leighton Paisner LLP (previously Berwin

Leighton Paisner LLP).

 Prior to leaving Tesco, Faye held the role

of Group Corporate and Property Legal

Director with accountability encompassing

legal oversight of group finance, M&A and

group procurement.

36 Atrato Onsite Energy plc

Corporate Governance The Investment Adviser

Investment Advisers Relevant Skills and experience: Career Highlights:

Ben Green

Principal

Ben is a principal at Atrato and is responsible for

leading the development and execution of the firm’s

long-term strategy. Ben is a member of the Atrato

Group Leadership Team and a member of the firm’s

Investment Committee.

 Over 20 years’ experience structuring and executing

real estate transactions

 Completed more than £3.5 billion of sale and

leaseback transactions, with major occupiers including

Tesco, Barclays and the BBC

 Expert in executing transactions for grocery real estate

and real estate corporate finance

 Qualified Lawyer

 Co-founded Atrato and led the IPO of

Supermarket Income REIT and Atrato

Onsite Energy plc

 Managing Director Lloyds Bank

Commercial Banking, where he ran

the team providing corporate finance

services to corporates, infrastructure

and real estate clients

 Managing Director and Head of

European Structured Finance at

Goldman Sachs from 2007 to 2013

 Director Barclays Capital

Steve Windsor

Principal

Steve is a principal at Atrato and is responsible for

leading the development and execution of the firm’s

long-term strategy. Steve is a member of the Atrato

Group Leadership Team and a member of the firm’s

Investment Committee.

 Over 20 years’ experience specialising in finance and

risk management

 Expert in capital markets, risk management and

financing

 Highly experienced in senior management positions

 Co-founded Atrato and led the IPO of

Supermarket Income REIT and Atrato

Onsite Energy plc

 Partner and Head of EMEA Debt

Capital Markets and Risk Solutions at

Goldman Sachs

 Held various roles across both Trading

and Banking divisions at Goldman

Sachs from 2000 to 2016

 Member of Goldman Sachs Investment

Banking Risk Committee

 Advised numerous FTSE 100 firms on

managing risk and financing their

business

Steven Noble

Chief Investment Officer

Steven is the Chief Investment Officer and responsible

for overseeing all investments for the Group. Steven is

a member of the Atrato Group Leadership Team and a

member of the firm’s Investment Committee.

 Over 20 years’ experience specialising in finance, risk

management and real estate

 Extensive supermarket property transaction

experience

 Specialist in corporate finance, with a primary focus on

commercial real estate

 Chartered Financial Analyst and Chartered Accountant

 Co-founded Atrato and led the IPO of

Supermarket Income REIT

 Transacted over 30 supermarket

property transactions, growing

Supermarket Income REIT’s portfolio

to £1.2 billion

 Senior Manager at Lloyds Bank in

Corporate Finance

Natalie Markham

Chief Financial Officer,

Director of Holdco and member

of the Investment Committee

Natalie is the Chief Financial Officer for the Atrato

Group and is responsible for the management of its

finance and investor relations functions. Natalie is a

member of the Atrato Group leadership team and

Chair of the Investment Committee.

 Over 20 years’ experience in finance, specialising in

real estate investment funds

 Experienced in senior management positions and

financial management positions of real estate

investment companies

 Assisting with the sustainability strategy with the

Atrato COO

 Qualified Chartered Accountant and Fellow of the

Chartered Institute of Accountants

• European CFO of Macquarie Global

Property Advisors, member of MGPA

European Management Team and

Director of the MGPA European

advisory business

• Manager RSM Robson Rhodes,

audit and assurance

Lara Townsend

COO, MD Origination,

Director of Holdco and member

of the Investment Committee

Lara is the Chief Operating Officer for the Atrato

Group and is responsible for corporate development

and the group’s operations. Lara is a member of the

Atrato Group leadership team and the Investment

Committee.

• More than 20 years’ experience of infrastructure and

asset finance

• Responsible for the establishment and integration of

the Atrato Group’s sustainability strategy alongside the

CFO

• Manages the team’s compliance and legal function

• Previously a Director within Lloyds

Bank’s capital markets division,

where she focused on the provision

of funding for real estate and

infrastructure projects.

• Lara studied Economics and

Business Studies at the University

of Edinburgh.

The Atrato Group is an alternatives investment management platform founded by Ben Green and Steve Windsor in 2016.

The Group has £2.2 billion under advisement as at 30 September with over 50 employees, headquartered in London.

Atrato Capital Limited, an Atrato Group company is the investment adviser to Supermarket Income REIT, a FTSE 250

company. Atrato Partners Limited, an Atrato Group company, is the Investment Adviser to Atrato Onsite Energy.

Annual Report 2022 37

Investment Advisers Relevant Skills and experience: Career Highlights:

Gurpreet Gujral CFA

Managing Director

Gurpreet is the co-fund manager of Atrato Onsite

Energy plc and is responsible for leading the

Renewable Energy investment strategy for the Atrato

Group.

• Over 15 years of renewable energy experience

• Specialist knowledge of the development and

commercialisation of rooftop solar PV on industrial

and commercial sites

• Worked across the full spectrum of renewable energy

• Masters in Sustainable Urban Development

• 7 years with the Macquarie Group in

the Green Investment Group (GIG)

and in the equities business as the

lead renewable energy analyst

 Coordinated and structured the sale

of infrastructure assets including a

fibre-to-the-home network

connected to one million building

units in Spain

• Responsible for the sale of a £300

million industrial and commercial

energy meter portfolio to a leading

infrastructure investor in the UK

Francisca Wiggins

Director

Francisca is the co-fund manager of Atrato Onsite

Energy plc and is responsible for commercial

negotiations with our PPA off-takers and EPC/O&M

counterparties.

• More than 10 years’ experience in project development

in the renewable energy sector

 Particular focus on new technologies

 Extensive transaction experience in development and

acquisition of energy assets

• Masters in Mechanical Engineering with Renewable

Energy

• Instrumental in the financing and

build of the world’s largest tidal

stream energy array, MeyGen

• Commercial Director for an AIM-listed

renewable energy project developer

Gustaf Schuler

Technical Director

Gus is the Technical Director in the renewable energy

team, responsible for all technical aspects of a system’s

design, installation and operations.

• Over 10 years’ experience in the energy industry

• Primary focus on renewables and solar PVs

• Masters in Renewable Energy and Sustainability

• Diploma in Electrical Engineering

 Senior Delivery Manager at Cero

Generation where he managed the

development and construction of c.

80MWp of BHM C&I solar projects

and has vast experience in advising

lenders, investors and developers in

PV projects

Jon Ashford

Head of Engineering

John is the Head of Engineering in the renewable

energy team, and works closely with Gustaf to ensure

the technical aspects of the system operate to the

standard that is expected.

• Over 25 years’ experience in the property sector,

focusing on operations and engineering

• 9 years as the Head of Engineering, Energy and

Sustainability at Sainsbury’s

• Responsible for carbon reduction planning and the

application of renewable energy across the Sainsbury’s

portfolio

• 7 years at Tesco, latterly as the Head of Engineering

and Energy

• Director of Operations at Engenie UK,

an electric vehicle rapid charging

start-up

• Owner, Director and Company

Secretary for Sustainable Design

Solutions

• Head of Engineering and Energy at

Tesco Property Services

Brett Pieterse

Finance Director

Brett is the Finance Director for Atrato Onsite Energy

plc, responsible for finance, tax and operations.

• Over 20 years’ experience in finance and infrastructure

investment

• 5 years as Finance Director at Vercity, an award-

winning infrastructure and real estate project

leadership group

• Chartered Accountant and member of the South

African Institute of Chartered Accountants

• Established the financial framework

for investing and managing

renewable energy projects at Vercity

and John Laing

• Over 10 years at John Laing, latterly as

Divisional Finance Director

responsible for asset management,

renewable energy and primary

investments

38 Atrato Onsite Energy plc

Corporate Governance Leadership and purpose

Role of the Board

The Board has a duty to promote the long-term

sustainable success of the Company for its

Shareholders. The Board is responsible for the

overall leadership of the Company, setting its

values and standards, including approval of the

Company’s strategic aims and objectives and

oversight of its operations.

The Board currently comprises the Chair and two

independent Non-Executive Directors and is

supported by Apex Limited who act as the Company

Secretary. Juliet Davenport is the Chair of the

Company and is responsible for leading the Board

and for setting the tone in respect of the Company’s

purpose, values and culture. As part of her role in

leading the Board, she ensures that the Board provides

constructive input into the development of strategy,

understands the views of the Company’s key

stakeholders and provides appropriate oversight,

challenge and support.

The Board fulfils the responsibilities typically

undertaken by a nomination committee and a

remuneration committee. The Company has not

appointed a senior independent director. Accordingly,

the Audit Committee Chair, in combination with the

other Directors, fulfils the duties of the senior

independent director, acting as a sounding board for

the Chair and acting as an intermediary for other

Directors, as applicable.

The Board is well balanced and possesses a sufficient

breadth of skills, variety of backgrounds, relevant

experience and knowledge to ensure it functions

effectively and promotes the long-term sustainable

success of the Company. All Directors have access to

the advice and services of External Counsel and the

Company Secretary, who are responsible to the Chair

on matters of corporate governance. Further details

of each Director’s experience can be found in the

biographies on page 35.

The Directors consider the evaluation of the Board, its

Committees and members to be an important aspect

of corporate governance and as such the Board has a

formal policy to evaluate its own performance

annually. The Chair leads the assessment which covers:

• The performance of the Board and its committees,

including how the Directors work together as a

whole;

• The balance of skills, experience, independence and

knowledge of the Directors; and

• Individual performance, particularly considering

whether each Director continues to make an

effective contribution. The assessment involves

the completion of anonymous questionnaires

followed by a discussion with all Directors, as a

group and individually.

Following the completion of this years’ evaluation

process during October 2022, the Chair held one to

one discussions with the Board members to consider

the feedback on the performance of the individuals

and of the Chair.

The results of the evaluation process were presented to

and discussed by the Board and it was concluded that

the Board was functioning effectively. An externally

run evaluation will be undertaken during the next

financial year and every three years thereafter.

The Board will regularly consider the balance of skills,

experience, diversity and independence of the Board,

as well as the strategy and likely future developments

in order to assess the current composition of the Board

and its suitability, or likely needed changes, in the

longer term. In the coming year the Board will consider

and formulate succession plans. The Company does

not have any employees, other than the Board. In

respect of appointments to the Board, we consider

that each candidate should be appointed on merit to

make sure that the best candidate for the role is

appointed every time. The Board supports diversity

and inclusion at Board level and encourage candidates

from all educational backgrounds and walks of life.

What is important is professional achievement and

the ability to be a successful Director based on the

individual’s skill set and experience. Qualifications are

considered when necessary to ensure compliance with

regulation such as in relation to appointments to the

Audit Committee.

The Board supports the recommendations set out in

the Hampton-Alexander Review on gender diversity

and the Parker Review on ethnic diversity and recognise

the value and importance of cognitive diversity in the

boardroom. As at the date of this report the Board

consisted of all female members. The Board recognises

that diversity extends beyond gender and will continue

to drive and oversee our progress in these areas.

How we operate

The Company’s business model and strategy were

established at the time of the IPO in October 2021.

The business seeks to support the net zero agenda

whilst delivering capital growth and progressive

dividend income to its shareholders; integrate ESG

best practice with a focus on investing in new

renewable energy capacity and onsite clean energy

solutions; and target long-term secure income with

limited exposure to wholesale power prices. The

Company will seek to achieve its investment objective

by investing in Onsite Solar Assets.

To facilitate timely execution of the business strategy

the Board and the AIFM have delegated certain

pre-agreed authorities to the Board of its wholly

owned subsidiary Atrato Onsite Energy Holdco

Limited, whose directors are provided by the

Investment Adviser. The Investment Adviser will adopt

a formalised review process, incorporating ESG factors

at all stages of the asset lifecycle, and the delegated

authorities to be granted by the Company and the

AIFM to the Holdco Board are conditional upon

adherence to this review process.

The Investment Adviser will conduct a review of its

approach to delivery of the investment strategy on

a half-yearly basis. Any resulting revisions to the

investment strategy are subject to agreement by

Annual Report 2022 39

the Board and the AIFM, at which time the Board

and the AIFM will also either confirm or amend any

delegated authorities granted to the Holdco Board.

The sustainability of returns is absolutely

fundamental to the Company’s strategy, as

summarised in the outline of the Company’s business

model on pages 4 to 5 and on the Company’s website:

www.atratoroof.com, and the Company’s investment

strategy is described in the Strategic Report on pages

1 to 34.

The Company has an outsourced operating model.

JTC Global AIFM Solutions Limited has been appointed

by the Company, pursuant to the AIFM Agreement, to

be the Company’s Alternative Investment Fund

Manager, under which it is responsible for overall

portfolio management and compliance with the

Company’s investment policy, ensuring compliance

with the requirements of the Alternative Investment

Fund Manager Directive (‘AIFMD’) that apply to the

Company and undertaking risk management. The

AIFM has delegated certain services in relation to

the Company and its Portfolio, which include advising

in relation to financing and asset management

opportunities to the Investment Adviser. The

Investment Adviser advises the Company and the

AIFM on the acquisition of its investment portfolio and

on the development, management and disposal of

clean energy assets in its portfolio pursuant to the

Investment Advisory Agreement.

The Management Engagement Committee keeps

the appropriateness of the Investment Adviser’s

appointment under review. In doing so the Committee

considers the past investment performance of the

Company and the capability and resources of the

Investment Adviser to deliver satisfactory investment

performance in the future. It also reviews the fees

payable to the Investment Adviser, together with the

standard of services provided by key service providers

to the Company, including the AIFM, Company

secretary, registrar and broker.

Conﬂicts of interest

All the Directors are considered by the Board to

be independent of the AIFM and of the Investment

Adviser. As such they are considered to be free from

any business or other relationships that could interfere

with the exercise of their judgements.

Each Director has a duty to avoid a situation in

which he or she has a direct or indirect interest that

may conﬂict with the interests of the Company. The

Board may authorise any potential conﬂicts, where

appropriate, in accordance with the Articles of

Association. Where a potential conﬂict of interest

arises, a Director will declare their interest at the

relevant Board meeting and not participate in the

decision making in respect of the relevant business.

Culture

The culture and ethos of the Company are integral to

its success. The Board promotes open dialogue and

frequent, honest and open communication between

the Investment Adviser and other key advisors to the

Company. Whilst the Company has no employees, the

Board pays close attention to culture of the Investment

Adviser and its employees and believes that its forward

thinking and entrepreneurial approach, combined

with its rigour and discipline, is the right fit for

delivering our strategy and purpose.

The Board believes that its positive engagement and

working relationship with the Investment Adviser

helps the business achieve its objectives by creating

an open and collaborative culture, whilst allowing for

constructive challenge. The Non-Executive Directors

speak regularly with members of the Investment

Adviser outside of Board meetings to discuss various

key issues relating to Company matters. The Company’s

success is based upon the effective implementation of

its strategy by the Investment Adviser and third-party

providers under the leadership of the Board. The

Board’s culture provides a forum for constructive and

robust debate, and the Board believes that this will be

fundamental to the success of the Company.

Investment Advisory Agreement

In reviewing the terms of the Investment Advisory

Agreement (material terms of which are summarised

in note 6 to the financial statements) and the fee

arrangements within it, the Board has considered the

extent to which the outcome for Shareholders and

management is consistent with the provisions of the

Code. Specifically:

• Clarity and transparency are achieved by way of the

structure of the Investment Advisory Agreement

which compensates the Investment Adviser through

the advisory fee to cover all overheads and running

costs relating to the Company and which provides

strong shareholder alignment through the payment

of the semi-annual fees, which are to be used to

purchase further shares in the Company, at the

Board’s discretion.

• The structure of and rationale behind the Investment

Adviser’s fees are explained in note 6 to the financial

statements and are designed to be simple and not to

require subjectivity in their calculation.

• Given the simple arithmetic underlying the fee

calculations, the range of potential outcomes is

straightforward to calculate and not subject to

discretion.

While the Code recommends oversight of the level

of reward to individual team members, this is not

appropriate in the case of an externally managed

structure where the Independent Directors do not

control the workforce.

40 Atrato Onsite Energy plc

Corporate Governance Leadership and purpose continued

The Board has sought and received confirmation from the Investment Adviser that it complies with all governance

requirements relevant to it. Such confirmation will be sought at least annually.

Audit

Committee

Management

Engagement Committee

Monitors the effectiveness of the

audit process

Monitors Group’s risk

management processes.

Reviews integrity of the Group’s

financial statements

Overseeing new tenders and appointments

Reviewing performance of key suppliers

including the Investment Adviser.

Atrato Partners (The ‘Investment Adviser’)

The investment Adviser’s activities comprise of sourcing opportunities, conducting due

diligence, providing investment recommendations, assisting with carrying out transactions

and reporting on the management of the investments. The Investment Adviser will also

make recommendations on financing decisions and strategy which is approved by the

Investment Manager and Board.

Delegated responsibilities

Acquisitions & Disposals

Marketing Fund Management

Funding

JTC Global AIFM Solutions Limited (The “AIFM”)

The AIFM, together with the Board, makes investment decisions following

recommendations from the Investment Adviser. The AIFM is responsible for the oversight

of the portfolio management activities and undertakes the risk management function of

the Company. The AIFM is responsible for the running of the fund.

Responsibilities

Portfolio

Marketing

Risk Management

The Atrato Onsite Energy plc Board (The ‘Board’)

The Board is responsible for promoting the long-term sustainable success of the

Company, working towards strategic objectives and generating value for Shareholders

and other stakeholders.

Annual Report 2022 41

The Board’s attendance in 2021/2022

All Directors are expected to devote sufficient time to the Company’s affairs to fulfil their duties as Directors and

to attend all scheduled meetings of the Board and of the Committees on which they serve. Where Directors are

unable to attend a meeting, they will provide their comments on the Board papers received in advance of the

meeting to the Chair, who will share such input with the rest of the Board and the AIFM.

Attendance at scheduled Board and Committee meetings during the year was as follows:

Quarterly Board meetings Audit Committee

Management

Engagement Committee

4 Scheduled meetings

100% attendance

3 Scheduled meetings

100% attendance

0 Scheduled meetings

n/a

Juliet Davenport 100% attendance 100% attendance n/a

Marlene Wood 100% attendance 100% attendance n/a

Faye Goss 100% attendance 100% attendance n/a

The first scheduled meeting of the Management Engagement Committee was held post year end on

10th November 2022.

42 Atrato Onsite Energy plc

Corporate Governance Key Board Statements

Statement of Compliance

The Board has considered the Principles and

Provisions of the AIC Code of Corporate Governance

(February 2019) (‘AIC Code’) and that these provide the

most appropriate framework for the Company’s

governance and reporting to Shareholders.

The AIC Code addresses the Principles and Provisions

set out in the UK Corporate Governance Code (July 2018)

(the ‘UK Code’), as well as setting out additional

Provisions on issues that are of specific relevance

to the Company.

The Board considers that reporting against the

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 throughout the year, except

for the three provisions set out below:

• The role of the chief executive

• Executive directors’ remuneration

• The need for an internal audit function

The Board considers that these provisions are not

relevant, being an externally managed investment

company. All the Company’s day-to-day management

and administrative functions are outsourced to third

parties. As a result, the Company has no executive

directors, employees or internal operations. The

Company has therefore not reported further in

respect of these provisions.

The Company does not have an internal audit function.

The need for this is reviewed annually by the Audit

Committee. Due to the relative lack of complexity

and the outsourcing of the majority of the day to-day

operational functions, the Audit Committee continues

to be satisfied that there is no requirement for such

a function.

A copy of the AIC Code can be obtained via the AIC’s

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 to investment companies.

This Corporate Governance Statement forms part

of the Directors’ Report.

AIC Code Principle

Evidence of compliance/

explanation of departure from the AIC Code

A A successful company is led by an effective board, whose role is to

promote the long-term sustainable success of the Company,

generating value for shareholders and contributing to wider society.

Section 172(1) Statement on page 26.

Leadership and Purpose on pages 38 to 41.

Strategic report on pages 1 to 34.

B The Board should establish the Company’s purpose, values and

strategy, and satisfy itself that these and its culture are aligned.

All Directors must act with integrity, lead by example and promote

the desired culture.

Strategic report on pages 1 to 34.

Leadership and Purpose on pages 38 to 41.

C The Board should ensure that the necessary resources are in place

for the Company to meet its objectives and measure performance

against them. The Board should also establish a framework of

prudent and effective controls, which enable risk to be assessed

and managed.

Our Principal Risks on pages 31 to 32.

Audit Committee report on pages 45 to 47.

Directors’ report on pages 51 to 53.

D For the Company to meet its responsibilities to Shareholders and

stakeholders, the Board should ensure effective engagement with,

and encourage participation from, these parties.

Section 172(1) Statement on page 26.

Our Key stakeholders on pages 27 to 29.

F The Chair leads the Board and is responsible for its overall

effectiveness in directing the Company. They should demonstrate

objective judgement throughout their tenure and promote a

culture of openness and debate. In addition, the Chair facilitates

constructive board relations and the effective contribution of all

Non-Executive Directors, and ensures that Directors receive

accurate, timely and clear information.

Board activities during the year on page 41.

G The Board should consist of an appropriate combination of directors

(and, in particular, independent Non-Executive Directors) such that

no one individual or small group of individuals dominates the

Board’s decision making.

Leadership and Purpose on pages 38 to 41.

H Non-Executive Directors should have sufficient time to meet their

Board responsibilities. They should provide constructive challenge,

strategic guidance, offer specialist advice and hold third party

service providers to account.

Leadership and Purpose on pages 38 to 41.

Management Engagement Committee

report on page 44.

I The Board, supported by the Company Secretary, should ensure

that it has the policies, processes, information, time and resources it

needs in order to function effectively and efficiently.

Board Activities during the year on page 41.

Leadership and Purpose on pages 38 to 41.

Annual Report 2022 43

AIC Code Principle

Evidence of compliance/

explanation of departure from the AIC Code

J Appointments to the Board should be subject to a formal, rigorous

and transparent procedure, and an effective succession plan should

be maintained. Both appointments and succession plans should be

based on merit and objective criteria and, within this context, should

promote diversity of gender, social and ethnic backgrounds,

cognitive and personal strengths.

Leadership and Purpose on pages 38 to 41.

K The Board and its committees should have a combination of skills,

experience and knowledge. Consideration should be given to the

length of service of the Board as a whole and membership

regularly refreshed.

Board of Directors’ Biographies on page 35.

Leadership and Purpose on pages 38 to 41.

L Annual evaluation of the Board should consider its composition,

diversity and how effectively members work together to achieve

objectives. Individual evaluation should demonstrate whether each

Director continues to contribute effectively.

Leadership and Purpose on pages 38 to 41.

M The Board should establish formal and transparent policies and

procedures to ensure the independence and effectiveness of

external audit functions and satisfy itself on the integrity of financial

and narrative statements.

Audit Committee report on pages 45 to 47.

N The Board should present a fair, balanced and understandable

assessment of the Company’s position and prospects.

Audit Committee report on pages 45 to 47.

O The Board should establish procedures to manage risk, oversee the

internal control framework, and determine the nature and extent of

the principal risks the Company is willing to take in order to achieve

its long-term strategic objectives.

Audit Committee report on pages 45 to 47.

Alternative Investment Fund Manager’s

report on pages 55 to 56.

P Remuneration policies and practices should be designed to support

strategy and promote long-term sustainable success.

Directors’ Remuneration report on pages

48 to 50.

Q A formal and transparent procedure for developing a remuneration

policy should be established. No Director should be involved in

deciding their own remuneration outcome.

Directors’ Remuneration report on pages

48 to 50.

R Directors should exercise independent judgement and discretion

when authorising remuneration outcomes, taking account of

company and individual performance, and wider circumstances.

Directors’ Remuneration report on pages

48 to 50.

Requirement Board statement Where to find further information

Going concern basis The Board is of the opinion that the going concern

basis adopted in the preparation of the Annual

Report is appropriate.

Further details are set out on

page 33 of the Strategic Report.

Viability Statement The Board is of the opinion that the viability

statement made in the Annual Report is appropriate.

Further details are set out on

page 34 of the Strategic Report.

Annual review of systems of risk

management and internal control

A continuing process for identifying, evaluating and

managing the risks the Company faces has been

established and the Board has reviewed the

effectiveness of the internal control systems.

Further details are set out in the

Audit Committee Report on

page 47 of this Governance

Report

Robust assessment of the

Company’s emerging and principal

risks to the business model, future

performance, solvency and liquidity

of the Company

The Audit and Risk Committee and the Board

undertake a full risk review annually where all the

emerging, principal risks and uncertainties facing

the Company and the Portfolio are considered.

Further details can be found in

Our Principal Risks on pages 31

to 34 of the Strategic Report.

Fair, balanced and understandable The Directors confirm that to the best of their

knowledge the Annual Report and Accounts taken

as a whole is fair, balanced and understandable and

provides the information necessary for Shareholders

to assess the Company’s position, performance,

business model and strategy.

Further details of the fair,

balanced and understandable

statement can be found in the

Audit Committee Report on

page 46.

Appointment of the Investment

Adviser

The Directors consider the continuing appointment

of the Investment Adviser on the terms agreed in the

Investment Advisory Agreement dated 1 November

2021 to be in the best interests of the Company.

Further details are set out in

Note 6 to the Financial

Statements.

s172 The Directors have considered the requirements of

s172 when making strategic decisions.

Section 172 Statement on

page 26.

44 Atrato Onsite Energy plc

Corporate Governance Management Engagement Committee Report

Dear Shareholders,

I am pleased to present the first Management

Engagement Committee Report of the Company

for the period ended 30 September 2022. The

Management Engagement Committee’s role is to

monitor and evaluate performance of the Investment

Adviser and the AIFM and to review the basis for the

fees charged by the Investment Adviser.

The Committee shall ensure that processes have

been put in place to review the Company’s risk

management and internal control systems designed

to safeguard Shareholders’ investment and the

company’s assets.

The Committee shall also monitor and evaluate other

key service providers (such as the Company Secretary,

Registrar and Broker) to ensure their continued

competitiveness and effectiveness.

How the Committee operates

The Management Engagement Committee Terms of

Reference are available on the Company’s website and

on request from the Company’s registered office.

All three board members are committee members.

All the Committee members served for the full period.

The Committee believes that its members have the

right balance of skills and experience to be able to

function effectively.

This report covers the Company’s first operating period

of less than 12 months and in recognition of the short

reporting period no Committee meeting was held.

The inaugural meeting was held post year end, on

10November 2022.

Activities during the period

As set out above the Committee did not meet in

the period to 30 September 2022 and held its first

meeting post year end.

The business of the first meeting was to review

feedback on key service providers, including the

Investment Adviser, AIFM, Broker and Company

Secretary. The meeting was attended in part by the

AIFM and Investment Adviser, however both parties

were asked to leave for the Committee to have a closed

session to discuss their performance.

The Committee has scheduled face to face meetings

with representatives of key service providers to be

heldprior to the publication of the Interim results to

31March 2023. These meetings will include feedback

on supplier questionnaires completed by the service

providers.

As a result of the Management Engagement

Committee (“the MEC”) meeting held on 10th

November 2022, the MEC confirmed the ongoing

appointment of the Investment Adviser, AIFM and

the other key service providers, given satisfactory

performance for the Period ended 30 September 2022.

Committee effectiveness

I believe that the quality of discussion and level of

challenge by the Committee with the Investment

Adviser, the AIFM, the Broker and Company

secretary, ensures the Committee can perform

its role effectively.

Faye Goss

Management Engagement Committee Chair

28 November 2022

Annual Report 2022 45

Corporate Governance Audit Committee Report

Dear Shareholders,

I am pleased to present the first Audit Committee

Report of the Company for the period ended

30September 2022. The Audit Committee’s role is

to oversee the Company’s financial reporting process,

including the risk management and internal financial

controls in place within the AIFM and the Investment

Adviser, the valuation of the asset portfolio, the

Company’s compliance with accepted accounting

standards and other regulatory requirements as

well as the activities of the Company’s Auditor.

How the Committee operates

The Audit Committee Terms of Reference are available

on the Company’s website and on request from the

Company’s registered office.

All three board members are committee members.

Having regard to the number of Directors of the

Company and in line with recommended best practice

that the audit committee should comprise the Chair and

at least two other directors, all Directors are members of

the audit committee. However, in accordance with the

terms of reference of the audit committee the Chair of

the Board may be a member of the Committee but may

not act as the Committee’s Chair.

All the Committee members served for the full period.

The Committee believes that its members have the

right balance of skills and experience within the real

estate sector to be able to function effectively.

The Board considers that I have recent and relevant

financial expertise to chair the Audit Committee.

Further details of each Director’s experience can

be found in the biographies on page 35.

During the year the Audit Committee held three

formal meetings following the Company’s corporate

calendar, which ensures that the meetings are aligned

to the Company’s financial reporting timetable. The

Company Secretary and I ensure that the meetings are

of sufficient length to allow the Committee to consider

all important matters and the Committee is satisfied

that it receives full information in a timely manner to

allow it to fulfil its obligations.

Members of the Investment Adviser and the

Company’s Auditor were invited to attend the

Committee meetings. JTC (UK) Limited as Company

Secretary acts as secretary to the Committee.

As the Committee’s Chair, I have had regular

communications with the Auditor and senior members

of the Investment Adviser. In addition, the Committee

has discussions throughout the year outside of the

formal Committee meetings.

Activities during the period

Relationship with the Auditor

The Committee has primary responsibility for

managing the relationship with the Auditor, including

assessing their performance, effectiveness and

independence annually and recommending to the

Board their reappointment or removal.

BDO LLP (“BDO”) issued an intention to act letter at

the time of the IPO and were subsequently appointed

as the Company’s Auditor during April 2022 and we

are recommending that they be re-appointed at

the forthcoming AGM. Under the Company’s

interpretation of the transitional arrangements for

mandatory audit rotation, the Company will be

required to put the external audit out for tender in

the financial year ended 30 September 2032.

Eran Wieder continues to remain as audit lead and,

in line with the policy on lead partner rotation, he is

expected to rotate off the audit ahead of the 2027 audit.

The Committee has met with the key members of

the audit team over the course of the year and BDO

has formally confirmed its independence as part of

the reporting process. As Chair of the Committee,

I regularly speak with the external audit lead without

the Investment Adviser present to ascertain if there

are any concerns, to discuss the audit reports and to

ensure that the Auditor has received the support and

information requested from management. There have

been no concerns identified to date.

Effectiveness and independence

We meet with the Auditor and the Investment Adviser

before the preparation of each of the Annual and

Interim results, to plan and discuss the scope of the

audit or review as appropriate, and challenge where

necessary to ensure its rigour. At these meetings the

Auditor prepares a detailed audit or review plan which

is discussed and questioned by us and the Investment

Adviser to ensure that all areas of the business are

adequately reviewed and that the materiality

thresholds are set at the appropriate level, which varies

depending on the matter in question. We also discuss

with the Auditor its views over significant risk areas

and why it considers these to be risk areas.

The Audit Committee, where appropriate, continues

to challenge and seek comfort from the Auditor over

those areas which drive audit quality. The timescale for

the delivery of the audit or review is also set at these

meetings. We meet with the Auditor again just prior

to the conclusion of the audit or review to consider,

challenge and evaluate findings in depth.

We have considered the objectivity and effectiveness

of the Auditor and we consider that the audit team

assigned to the Company by BDO has the necessary

experience, qualifications and understanding of the

business to enable it to produce a detailed, high-

quality, in-depth audit and permits the team to

scrutinise and challenge the Company’s financial

procedures and significant judgements. We ask the

Auditor to explain the key audit risks and how these

have been addressed. We also considered BDO’s

internal quality control procedures and transparency

report and found them to be sufficient. Overall, the

Committee is satisfied that the audit process is

transparent and of good quality and that the Auditor

has met the agreed audit plan.

46 Atrato Onsite Energy plc

Corporate Governance Audit Committee Report continued

Audit and non-audit fees

We continue to believe that, in some circumstances,

the external Auditor’s understanding of the Company’s

business can be beneficial in improving the efficiency

and effectiveness of advisory work. For this reason, we

will continue to engage BDO as reporting accountants

on the Company’s issues of equity and debt capital in

the normal course of the Company’s business. Other

reputable firms have been engaged during the year to

assist with financial and tax due diligence on corporate

acquisitions as well as general tax compliance advice.

The Non-Audit Services Policy requires approval by

the Committee above a certain threshold before the

external Auditor is engaged to provide any permitted

non-audit services. The Company engaged BDO to

audit the initial accounts, which is considered to be

a non-audit service.

In addition to ensuring compliance with the

Company’s policy in respect of non-audit services, the

Committee also receives confirmation from BDO that

it remains independent and has maintained internal

safeguards to ensure its objectivity.

Financial reporting and significant judgements

We monitor the integrity of the financial information

published in the Interim and Annual Reports and any

Internal audit function

The Company does not have an internal audit

function. The need for this is reviewed annually by the

Committee. Due to the relative lack of complexity and

the outsourcing of the majority of the day to-day

operational functions, the Committee continues to be

satisfied that there is no requirement for such a function.

Fair, balanced and understandable

financial statements

The production and audit of the Company’s Annual

Report is a comprehensive process, requiring input

from a number of contributors. To reach a conclusion

on whether the Annual Report is fair, balanced and

understandable, as required under the AIC Code, the

other formal announcement relating to financial

performance. We consider whether suitable and

appropriate estimates and judgements have been

made in respect of areas which could have a material

impact on the financial statements.

A variety of financial information and reports were

prepared by the Investment Adviser and provided to

the Board and to the Committee over the course of the

year. These included budgets, periodic re-forecasting

following acquisitions or corporate activity, an updated

risk register and general compliance.

All financial information was fully reviewed and

debated both at Committee and Board level across a

number of meetings. The Investment Adviser and the

Auditor update us on changes to accounting policies,

legislation and best practice and areas of significant

judgement by the Investment Adviser. They pay

particular attention to transactions which they deem

important due to size or complexity.

The significant issue considered by the Committee

in respect of the period ended 30 September 2022,

which contained a significant degree of estimation

uncertainty, is set out in the table below.

Board has requested that the Committee advise on

whether it considers that the Annual Report fulfils

these requirements. In outlining our advice, we have

considered the following:

• The comprehensive documentation that outlines

the controls in place to produce the Annual Report,

including the verification processes to confirm the

factual content.

• The detailed reviews undertaken at various stages of

the production process by the Investment Adviser,

AIFM, Company Secretary, Financial Advisers, Auditor

and the Committee, which are intended to ensure

consistency and overall balance.

Significant issue How the issue was addressed

Valuation of portfolio

The Investment Adviser is responsible pursuant to the

Investment Advisory Agreement for the preparation of

the valuation of the Company’s assets, on a bi-annual basis.

The Company’s Portfolio value as at 30 September 2022 was

£139.1 million.

The valuation of the Company’s property portfolio is a key

determinant of the Company’s net asset value as well as

directly impacting the fee payable to the Investment Adviser.

The nature of the valuation process is inherently subjective

due to the assumptions made in determining market

comparable discount rates and estimated generation levels.

The Audit Committee met with the Investment Adviser and

external auditor in October to review the valuation included

within the year-end financial statements. This review

included the valuation process undertaken, changes in

market conditions, recent transactions in the market and

how these impacted our Portfolio and reference to the

discount rates used by our peer group. The Committee

challenged the assumptions used and verified the external

evidence used for the valuation process to ensure a robust

valuation had taken place.

The Auditor, BDO, reviewed the underlying assumptions

using its renewable energy experts and provided the Audit

Committee with a summary of its work as part of its report

on the half-year and year-end results.

As a result of these reviews, the Committee concluded that

the valuation had been carried out appropriately. The Board

approved the valuation in October 2022 for the year-end

financial statements.

Annual Report 2022 47

Risk register

During the year, the Audit Committee reviewed the

Company’s risk register, which is maintained by the

AIFM in conjunction with the Investment Adviser and

is subject to the supervision and oversight of the

Committee. A summary of the risk register is also

reviewed at least annually by the Board.

We have reviewed and approved all statements

included in the Annual Report concerning internal

controls and risk management taking into

consideration the review of the risk register and

our assessment of the Company’s internal controls

and knowledge of the business.

We have also reviewed the adequacy of the Company’s

arrangements for any relevant party to raise concerns,

in confidence, about possible wrongdoing in financial

reporting, regulatory or other relevant matters and

the procedures of both the Company’s AIFM and

Investment Adviser for detecting fraud and preventing

bribery. We consider that they are appropriate.

Committee effectiveness

I believe that the quality of discussion and level of

challenge by the Committee with the Investment

Adviser and the external audit teams, together with

the timeliness and quality of papers received by the

Committee, ensures the Committee is able to perform

its role effectively.

The Board undertakes an annual evaluation of its

composition and that of its committees taking into

account the requirements of the AIC Code. This takes

the form of a written assessment of the effectiveness

of the Board using a formal evaluation questionnaire.

The Directors also undertake a formal evaluation of

the performance of the chair. If appropriate,

recommendations are made to refresh the composition

of the Board and its committees. The first evaluation

was undertaken during November 2022. The first

evaluation was undertaken during November 2022.

Theevaluation process concluded that the Committee

was operating effectively and had the appropriate

balance of skills and experience.

Signed on behalf of the Audit Committee on

28November 2022.

Marlene Wood

Audit Committee Chair

28 November 2022

• Controls enforced by the Investment Adviser,

Company Secretary and other third-party service

providers, to ensure complete and accurate financial

records and security of the Company’s assets.

• The satisfactory ISAE 3402 control report produced

by JTC (UK) Limited, who are engaged to undertake

payment processing for the Company, for the year

ended 30 March 2022. This report has been reviewed

and reported upon by their external auditor, to

verify the effectiveness of their internal controls

over cash management.

• The Investment Adviser have a highly experienced

team who have a strong proficiency in producing

financial statements.

As a result of the work performed, we have concluded

and reported to the Board that the Annual Report for

the period ended 30 September 2022, taken as a whole,

is fair, balanced and understandable and provides the

information necessary for Shareholders to assess the

Company’s performance, business model and strategy.

Risk management and internal controls

The Board oversees the Company’s risk management

and internal controls and determines the Company’s

risk appetite. The Board has, however, delegated

responsibility for review of the risk management

methodology and the effectiveness of internal controls

to the Audit Committee. The Company’s system of

internal controls includes financial, operational and

compliance controls and risk management. Policies

and procedures, including clearly defined levels of

delegated authority, have been communicated

throughout the Company.

Internal controls are implemented by the Investment

Adviser in respect of the key operational and financial

processes of the business. These policies are designed

to ensure the accuracy and reliability of financial

reporting and govern the preparation of the financial

statements.

At the time of the IPO, a Board Memorandum was

prepared that documented the financial position and

prospects procedures (FPPP) of the Company. This

Memorandum was independently reviewed by an

external accountancy firm and no major deficiencies

were identified, which provided the Committee with

additional comfort that the Company’s system of

internal controls remained fit for purpose and robust.

Post period end, I also performed a review and walk

through of the key systems and controls in place at the

Investment Adviser which I found to be suitable for a

Company of our size and complexity. I will conduct this

review on at least an annual basis going forward.

48 Atrato Onsite Energy plc

Corporate Governance Directors’ Remuneration Report

Annual Statement

The Board comprises only independent non-executive

Directors. The Company has no executive Directors or

employees. For these reasons, it is not considered

necessary to have a separate Remuneration Committee.

The full Board determines the level of Directors’ fees.

Full details of the Company’s policy with regards to

Directors’ fees and fees paid during the period ended

30September 2022 are shown below.

Directors’ remuneration policy

The Board considers the level of Directors’ fees at least

annually. Reviews of Directors’ fees take place in each

financial year with any changes being applicable from

the start of the next financial year. The remuneration

of the Directors was benchmarked at the time of the

Company’s listing in November 2021. The Directors’

remuneration has remained unchanged.

Remuneration Policy

The Company’s policy is to determine the level of

Directors’ fixed annual fees in accordance with its

Articles of Association.

When setting the level of Directors’ fees, the Company

will have due regard to the experience of the board

as a whole, the time commitment required, the

responsibilities of the role and to be fair and comparable

to non-executive directors of similar companies.

Furthermore, the level of remuneration should be

sufficient to attract and retain the Directors needed

to oversee the Company properly and to reﬂect its

specific circumstances. The Company may also

periodically choose to benchmark Directors’ fees

with an independent review, to ensure they remain

fair and reasonable.

Directors’ fees are reviewed annually and will be

adjusted from time to time, as may be determined by

the Board under the Articles of Association and this

policy. In terms of the Company’s Articles of Association,

the aggregate remuneration of all the Directors shall

not exceed £500,000 per annum but this may be

changed by way of ordinary resolution.

The Directors are also entitled to be paid their reasonable

expenses incurred in undertaking their duties.

Additional Directors’ fees may be paid by the Company

where Directors are involved in duties beyond those

normally expected as part of the Directors’ appointment.

In such instances, where additional remuneration is

paid, the Board will provide details of the events, duties

and responsibilities that gave rise to any additional

Directors’ fees in the Company’s annual report.

No element of the Directors’ remuneration is

performance related, nor does any director have any

entitlement to pensions, share options or any long-term

incentive plans from the Company. Directors’ fees are

payable in cash, monthly in arrears.

The Directors hold their office in accordance with the

Articles of Association and their appointment letters.

The Directors’ appointments can be terminated in

accordance with the Articles of Association and

without compensation.

The Company is committed to engagement with

Shareholders and will seek major Shareholders’

views in advance of making significant changes to

its remuneration policy and how it is implemented.

The Board will attend the AGM to hear the views

of Shareholders on remuneration and to answer

any questions.

It is the Board’s policy that Directors do not have service

contracts, but each new Director is provided with a

letter of appointment, and these are available for

inspection at the Company’s registered office. Each

Director is appointed for an initial three-year term

subject to annual re-election at the Company’s AGM.

Directors are typically expected to serve two three-year

terms but may be invited by the Board to serve for an

additional period. The Directors’ appointments can be

terminated at no notice in accordance with the terms

of the letters of Appointment, without compensation

for loss of office.

In determining Remuneration Policy, the Board

considers all factors which it deems necessary,

including the Company’s strategy and the risk

environment in which it operates, relevant legal

and regulatory requirements, the provisions and

recommendations of the Code considered to be relevant,

and associated guidance. In order to obtain reliable,

up-to-date information about remuneration in other

companies of comparable scale and complexity, the

Remuneration Committee may appoint remuneration

consultants and commission or purchase any reports,

surveys or information which it deems necessary, at the

expense of the Company but within any budgetary

constraints imposed by the Board.

The Board as a whole is responsible for appropriately

managing Directors’ conﬂicts of interests. Directors’

other interests have been disclosed. No conﬂicts have

been identified during the year. If a conﬂict were to be

identified, the Board would take the appropriate steps

to resolve and manage such conﬂicts appropriately.

The Directors’ Remuneration Policy will be tabled

for Shareholder approval at the inaugural AGM in

March 2023. The Remuneration Policy is subject to

a binding vote at the 2025 AGM.

Annual Report 2022 49

Annual Report on Remuneration

Directors’ emoluments – single total figure table

(audited)

The Directors who served during the year received the

following emoluments, all of which was in the form of

fees, which are fixed and no discretionary remuneration.

All expenses in relation to travel and accommodation for

meetings are reimbursed.

understanding of the relative importance of spend

on pay

c) Distributions to Shareholders by way of dividend to

provide a comparison of the Shareholders returns

against Directors’ remuneration.

Directors’ Fees

The Board considers the level of Directors’ fees at least

annually. Reviews of Directors’ fees take place in each

financial year, with any changes being applicable from

the start of the next financial year. The Board does not

consider that any change in fee levels is required for

the year to 30 September 2023.

Relative importance of spend on pay

The table below sets out, in respect of the period ended

30 September 2022:

a) The remuneration paid to the Directors

b) The management fee and expenses which have

been included to give Shareholders a greater

Most recent Latest due

Date of original date of date of

Director appointment election re-election

Juliet Davenport 13 October 2021 13 October 2021 16 March 2023

Marlene Wood 13 October 2021 13 October 2021 16 March 2023

Faye Goss 13 October 2021 13 October 2021 16 March 2023

Period ended

30 September Fixed

2022 Remuneration

£000 %

Juliet Davenport 48 100

Faye Goss 37 100

Marlene Wood 41 100

Total 126 100

Period ended

30 September

2022

£000

Directors’ fees 126

Management fee and expenses 1,224

Dividends paid 4,515

Period ended

30 September

2022

Directors’ fees as a percentage of %

Management fee and expenses 10.29

Dividends paid 2.79

Directors’ shareholdings (audited)

The Directors of the Company had the following beneficial interests in the issued ordinary share capital of the

Company as at 30 June 2022 and at the date of this report:

As at

As at the date 30 September

Directors of this report 2022

Juliet Davenport 20,000 20,000

Marlene Wood 20,000 20,000

Faye Goss 20,000 20,000

Total 60,000 60,000

The Company does not oblige the Directors to hold shares in the Company, but this is encouraged to ensure the

appropriate alignment of interests.

50 Atrato Onsite Energy plc

Corporate Governance Directors’ Remuneration Report continued

Company performance – Total Shareholder Return

The Board is responsible for the Company’s investment strategy and performance, whilst the management of the

investment portfolio is delegated to the AIFM. The AIFM has, in turn, delegated certain services, including but not

limited to advice on acquisitions and financing, to the Investment Adviser. The graph below compares, for the

period from our IPO in November 2021 to 30 September 2022, the total return (assuming all dividends are

reinvested) to ordinary Shareholders compared to the FTSE All-Share Index. This index was chosen as it is

considered an indicative measure of the expected return from an equity stock. An explanation of the performance

of the Company for the period ended 30 September 2022 is given in the Strategic Report.

It is a company law requirement to compare the performance of the Company’s share price to a single broad equity

market index on a total return basis. However, it should be noted that constituents of the comparative index used

above are larger in size than the Company. The Company does not have a benchmark index.

Voting at Annual General Meeting

An Ordinary Resolution to approve the Director’s Remuneration Report will be put to Shareholders at the

Company’s AGM and Shareholders will have the opportunity to express their views and raise any queries in

respect of the Director’s Remuneration Report at this meeting.

This Directors’ Remuneration Report is approved on behalf of the Board by:

Juliet Davenport

Chair of the Board

28 November 2022

Atrato Onsite Energy FTSE All Share Total Return

FTSE All Share vs The Company

Nov 21 Jan 22Dec 21 Sept 22Aug 22Jul 22Jun 22May 22Apr 22Mar 22Feb 22

100

110

120

Annual Report 2022 51

The Directors present their report together with the audited financial statements for the period ended

30September 2022. The Corporate Governance Statement pages 35 to 56 forms part of this report.

Principal activities and status

The Company is registered as a UK public limited company under the Companies Act 2006. It is an Investment

Company as defined by Section 833 of the Companies Act 2006 and has been established as a closed-ended

investment company with an indefinite life. The Company has a single class of shares in issue which are traded on

the Premium List of the London Stock Exchange’s Main Market. The Company has been approved as an Investment

Trust pursuant to Sections 1158 and 1159 of the Corporation Taxes Act 2010 and Part 2 Chapter 1 Statutory Instrument

2011/2999 for the purposes of UK taxation.

The Company is a member of the Association of Investment Companies (the “AIC”).

Results and dividends

The results for the Period are set out in the attached financial statements. It is the policy of the Board to declare and

pay dividends as quarterly interim dividends.

In respect of the 30 September 2022 financial period, the Company has declared interim dividends amounting to

aggregate 4.26 pence per share. The following dividends were declared during the year and subsequently:

Date declared Amount per share (pence) Payment date

21 April 2022 1.76 27 May 2022

28 July 2022 1.25 26 August 2022

11 November 2022 1.26 16 December 2022

Dividend policy

Subject to market conditions and performance, financial position and outlook, it is the Directors’ intention to pay an

attractive level of dividend income to Shareholders on a quarterly basis.

Directors

The Directors who served throughout the period unless otherwise stated, are detailed below:

Director Service in the period to 30 September 2022

Juliet Davenport Served throughout the period

Marlene Wood Served throughout the period

Faye Goss Served throughout the period

Biographical details of the current Directors of the Company are shown on page 35.

Powers of Directors

The Board will manage the Company’s business and may exercise all the Company’s powers, subject to the Articles,

the Companies Act and any directions given by the Company by special resolution.

The Board’s role is to provide entrepreneurial leadership of the Company within a framework of prudent and

effective controls which enables risk to be assessed and managed. It also sets up the Company’s strategic aims,

ensuring that the necessary resources are in place for the Company to meet its objectives and review investment

performance. The Board also sets the Company’s values, standards and culture. Further details on the Board’s role

can be found in the Corporate Governance Report on page 38.

Directors’ interests

The beneficial interests of the Directors and their closely connected persons in the ordinary shares of the Company

as at 30 September 2022 were as follows:

Percentage of

Number of issued share

shares capital

Juliet Davenport 20,000 0.01%

Faye Goss 20,000 0.01%

Marlene Wood 20,000 0.01%

Corporate Governance Directors’ Report

52 Atrato Onsite Energy plc

Corporate Governance Directors’ Report continued

Appointment and replacement of Directors

All Directors were appointed during October 2021. In accordance with the AIC Corporate Governance Code, all the

Directors will retire and those who wish to continue to serve will offer themselves for election at the forthcoming

Annual General Meeting.

Directors’ indemnification and insurance

The Company maintains £15 million of Directors’ and Officers’ Liability Insurance cover for the benefit of the

Directors, which was in place throughout the period.

Political contributions

The Company made no political contributions during the period.

Significant shareholdings

The table below shows the interests in shares notified to the Company in accordance with Chapter 5 of the

Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority who have a disclosable

interest of 3% or more in the ordinary shares of the Company as at 30 September 2022.

Percentage of

Number of issued share

shares capital

Close Brothers Asset Management 21,315,375 14.2

Schroder Investment Management 13,893,020 9.3

Liontrust Sustainable Investments 11,396,108 7.6

Sarasin & Partners 9,011,977 6.0

River and Mercantile Asset Management 6,878,000 4.6

Charles Stanley 6,416,858 4.3

Newton Investment Management 5,761,798 3.8

Since the year end, and up to 25 November 2022, the Company has been notified of the following interests in its

ordinary shares in accordance with DTR 5. The information provided is correct as at the date of notification:

Percentage of

Number of issued share

shares capital

Close Asset Management Limited 19,466,585 12.98

Schroders PLC 15,486,714 10.3

Branches outside the UK

The Company has no branches outside the UK.

Financial instruments

The Company’s exposure to, and management of, capital risk, market risk and liquidity risk is set out in note 19 to

the Company’s financial statements.

Employees

The Company has no employees and therefore no employee share scheme or policies for the employment of

disabled persons or employee engagement.

Greenhouse gas emissions

The Company is considered to be a low energy user due to the fact it has no Scope 1 or Scope 2 emissions and

therefore is not required to make any disclosures under the Streamlined Energy and Carbon Reporting Framework.

Other disclosures

Disclosures of financial risk management objectives and policies and exposure to financial risks are included in

note 19 to the financial statements. Details of future developments are included in the Strategic Report.

No additional disclosures are required in accordance with Listing Rule (LR) 9.8.4C R.

Annual Report 2022 53

Disclosure of information to auditor

All of the Directors have taken all the steps that they ought to have taken to make themselves aware of any

information needed by the auditor for the purposes of their audit and to establish that the auditor is aware of

that information. The Directors are not aware of any relevant audit information of which the auditor is unaware.

Auditor

BDO LLP was appointed as auditor by the Directors in April 2022. BDO LLP have expressed their willingness to

continue as auditor for the financial year ending 30 September 2023. A resolution to appoint BDO LLP as auditor

of the Company will be proposed at the forthcoming AGM.

Share capital structure

As at 30 September 2022, the Company’s issued share capital consisted of 150,000,000 ordinary shares of one penny

each, all fully paid and listed on the Premium List of the London Stock Exchange’s Main Market. Further details of

the share capital are summarised in note 14 of the financial statements.

Subject to authorisation by Shareholder resolution, the Company may purchase its own shares in accordance with

the Companies Act 2006. The Company has not repurchased any of its ordinary shares.

There are no restrictions on transfer or limitations on the holding of the ordinary shares. None of the shares carry

any special rights regarding the control of the Company. There are no known arrangements under which financial

rights are held by a person other than the holder of the shares and no known agreements on restrictions on share

transfers and voting rights.

Post balance sheet events

For details of events since the year-end date, please refer to note 23 of the financial statements.

Corporate Governance

The Company’s statement on corporate governance can be found in the Corporate Governance Report on

pages 35 to 56 of this Annual Report. The Corporate Governance Report forms part of this Directors’ report

and is incorporated into it by cross-reference.

Signed by order of the Board on 28 November 2022.

Juliet Davenport

Chair of the Board

28 November 2022

54 Atrato Onsite Energy plc

Directors’ responsibilities

The Directors are responsible for preparing the annual report and the financial statements in accordance with UK

adopted international accounting standards and 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 UK adopted international

accounting standards. Under company law the Directors must not approve the financial statements unless they

are satisfied that they give a true and fair view of the state of affairs of the 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 judgments and accounting estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with UK adopted international accounting standards,

subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Company will continue in business;

• prepare a Directors’ report, a strategic report and Directors’ remuneration report which comply with the

requirements of the Act.

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 Act.

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 performance, business model and strategy.

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.

The Directors have delegated the hosting and maintenance of the Company’s website content to Squibble Design

and its materials are published on www.atratoroof.com. Legislation in the United Kingdom governing the

preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Pursuant TO DTR4

The Directors confirm to the best of their knowledge:

The financial statements have been prepared in accordance with the applicable set of accounting standards, 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, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, 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.

Approval

This Directors’ responsibilities statement was approved by the Board of Directors and signed on its behalf by:

Juliet Davenport

Chair of the Board

28 November 2022

Corporate Governance Statement of Directors’ Responsibilities

in Respect of the Financial Statements

Annual Report 2022 55

Background

The Alternative Investment Fund Manager’s Directive

came into force on 22 July 2013. The objective of the

AIFMD was to ensure a common regulatory regime for

funds marketed in or into the EU which are not

regulated under the UCITS regime. This was primarily

for investors’ protection and also to enable European

regulators to obtain adequate information in relation

to funds being marketed in or into the EU to assist

their monitoring and control of systemic risk issues.

JTC Global AIFM Solutions Limited is a non-EU

Alternative Investment Fund Manager (a “Non-EU

AIFM”), the Company is a non-EU Alternative

Investment Fund (a “Non-EU AIF”) and the Company

is currently marketed only into the UK. Although the

AIFM is a Non-EU AIFM, so the depositary rules in

Article 21 of the AIFMD do not apply, the transparency

requirements of Articles 22 (Annual report) and 23

(Disclosure to investors) of the AIFMD do apply to the

AIFM and therefore to the Company. In compliance

with those articles, the following information is

provided to the Company’s shareholders by the AIFM.

1. Material Changes in the Disclosures to

Investors

During the financial year under review, there were no

material changes to the information required to be

made available to investors before they invest in the

Company under Article 23 of the AIFMD from that

information set out in the Company’s prospectus

dated 1 November, 2021, save as disclosed below and

in certain sections of the annual financial report,

those being the Chair’s Statement, Investment

Adviser’s Report, the sections headed “Our Market”,

“Sustainability” and “Our Principal Risks” and the

Directors’ Report.

2. Risks and Risk Management Policy

The current principal risks facing the Company and

the main features of the risk management systems

employed by AIFM and the Company to manage those

risks are set out in the section headed “Our Principal

Risks”, the Directors’ Report and in note 17 to the

financial statements.

3. Leverage and borrowing

The Company is entitled to employ leverage in

accordance with its investment policy and as set out in

the Company’s prospectus. However, as at the balance

sheet date and the date of this report, the Company

had not drawn down any debt. There were no changes

in the Company’s borrowing powers and policies.

4. Environmental, Social and Governance

(“ESG”) Issues

Because the AIFM is a non-EU AIFM and the Company

is not marketed into the EEA, the AIFM is not required

to comply with Regulation (EU) 2019/2099 on

Sustainability-Related Disclosures in the Financial

Services Sector (the “SFDR”).

As a member of the JTC group of Companies, the

AIFM’s ultimate beneficial owner and controlling party

is JTC Plc, a Jersey-incorporated company whose

shares have been admitted to the Official List of the

UK’s Financial Conduct Authority and to trading on the

London Stock Exchange’s Main Market for Listed

Securities (mnemonic JTC LN, LEI

213800DVUG4KLF2ASK33). In the conduct of its own

affairs, the AIFM is committed to best practice in

relation to ESG matters and has therefore adopted

JTC Plc’s ESG framework (the “ESG Framework”)

and a copy of the ESG Framework can be viewed on

the AIFM’s website at https://www.jtcgroup.com/

wp-content/themes/jtcgroup/dist/img/review-2019/

pdfs/esg.pdf. During 2021 JTC achieved its goal of

becoming carbon neutral through a partnership with

Carbon Footprint Limited, a leading independent

accreditation firm. Working with Carbon Footprint, JTC

makes a demonstrable difference through a series of

carbon offsetting projects, including helping to fund

projects that offset carbon emissions, including a UK

tree planting scheme which also supports emission

reductions in the Brazilian rainforest by helping

preserve parts of the forest and supporting local

communities there, the installation and operation of a

solar power project in two villages in India, which feeds

in to the power generated to the state grid in India and

native tree planting in the Great Rift Valley In Kenya,

which is also linked to further support for emission

reductions in the Brazilian rainforest. In 2022 JTC

extended UN PRI signatory status to the whole group,

covering over 1,400 people in 30 offices spanning 20

jurisdictions. JTC also reports under TCFD and under

the SASB framework.

The AIFM and Atrato Partners Limited as the Company’s

alternative investment fund manager and investment

adviser respectively do consider ESG matters in their

respective capacities, as explained in the Company’s

prospectus dated 1 November, 2021, a copy of which

can be found at Key documents – Atrato Onsite Energy

(atratoroof.com).

Since the publication of those documents, the AIFM,

Investment Adviser and the Company have continued

to enhance their collective approach to ESG matters

and detailed reporting on (a) enhancements made to

each party’s policies, procedures and operational

practices and (b) our collective future intentions and

aspirations is included in the Investment Advisor’s

Report, the section headed “Sustainability”, the Section

172 Statement and the section entitled “Our Key

Stakeholder Relationships.”

Corporate Governance Alternative Investment Fund Manager’s Report

56 Atrato Onsite Energy plc

The AIFM also has a comprehensive risk matrix (the

“Matrix”), which is used to identify, monitor and

manage material risks to which the Company is

exposed, including ESG and sustainability risks, the

latter being an environmental, social or governance

event or condition that, if it occurred, could cause an

actual or a potential material negative impact on the

value of an investment. We also consider sustainability

factors, those being environmental, social and

employee matters, respect for human rights, anti-

corruption and anti-bribery matters.

The AIFM is also cognisant of the announcement

published by H.M. Treasury in the UK of its intention

to make mandatory by 2025 disclosures aligned with

the recommendations of the Task Force on Climate-

Related Disclosures, with a significant proportion of

disclosures mandatory by 2023. The AIFM also notes

the roadmap and interim report of the UK’s Joint

Government-Regulator TCFD Taskforce published

by H.M. Treasury on 9 November 2020. The AIFM

continues to monitor developments and intends to

comply with the UK’s regime to the extent either

mandatory or desirable as a matter of best practice.

5. Remuneration of the AIFM’s Directors

and Employees

During the financial year under review, no separate

remuneration was paid by the AIFM to its executive

directors, Graham Taylor, Gregory Kok, James Tracey

and Kobus Cronje, because they were all employees of

the JTC group of companies, of which the AIFM forms

part. During the Company’s financial year, Messrs Kok

and Tracey resigned as directors of the AIFM and Mr

Kobus Cronje was appointed as a director. Matthew

Tostevin is a non-executive director and is paid a fixed

fee of £10,000 for acting as a director, attendance at all

quarterly Board meetings and work performed as a

director of the Company in the ordinary course of

business. Subject to the prior approval of the Board of

directors on each occasion, Mr Tostevin is paid

additional remuneration on a time spent basis for

services rendered to the Company which are not in the

ordinary course of business. Other than the directors,

the AIFM has no employees. The Company has no

agreement to pay any carried interest to the AIFM.

During the year under review, the Company paid

£10,000 in fixed fees and £54,794.54 in variable

remuneration to its directors.

6. Remuneration of the AIFM Payable by the

Company

The AIFM was during the year under review until

30September 2022 paid a fee of 0.04% per annum

of the net asset value of the Company, subject to a

minimum of £50,000 per annum, such fee being

payable quarterly in arrears. The total fees paid to the

AIFM during the year under review were £53,907.05.

JTC Global AIFM Solutions Limited

Alternative Investment Fund Manager

28 November 2022

Corporate Governance Alternative Investment Fund Manager’s Report continued

Annual Report 2022 57

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 30 September 2022 and of its

loss for the period then ended;

• have been properly prepared in accordance with UK

adopted international accounting standards; and

• have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the financial statements of Atrato

Onsite Energy Plc for the period from 16 September

2021 (date of incorporation) to 30September 2022

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 UK adopted international accounting standards.

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 Board of Directors

on 21 October 2021 to audit the financial statements for

the period ending 30 September 2022 and subsequent

financial periods. The period of total uninterrupted

engagement is one year being the period from

16September 2021 to 30 September 2022. 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:

• agreeing the inputs and assumptions within the

forecast that forms the basis of the board’s

assessment of the going concern status of the

Company to supporting documentation and our

own understanding of the Company.

• Performing stress testing of downside scenarios and

cash ﬂow forecasts, as well as conducting a robust

review of the Company’s liquidity position.

• Assessing the appropriateness of the Directors’

assumptions and judgements made in their base

case and stress tested forecasts including the

consideration of the available cash resources relative

to forecast expenditure and commitments; and

• Calculating financial ratios to consider the financial

health of the Company.

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 2022

Yes

Materiality Company financial statements as

a whole

£2,086,000 being 1.5% of the net

asset value.

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding

of the Company and its environment, including the

Company’s system of internal control, and assessing

the risks of material misstatement in the financial

statements. We also addressed the risk of

management override of internal controls, including

assessing whether there was evidence of bias by the

Directors that may have represented a risk of material

misstatement.

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.

Financial Statements Independent Auditors’ Report

to the Members of Atrato Onsite Energy Plc

58 Atrato Onsite Energy plc

Financial Statements Independent Auditors’ Report

to the Members of Atrato Onsite Energy 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:

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

Valuation of

Investments

See note 4 and

accounting policy

on pages 72 to 74.

The Company holds an investment through

Atrato Onsite Energy Holdco Limited. As

the Company meets the definition of an

investment entity it measures this

investment at fair value through profit

and loss rather than consolidating it.

The fair value of the Company’s investment is

determined in reference to the fair values of

the underlying investments held by Atrato

Onsite Energy Holdco Limited, which

comprise of various solar asset investments.

These investments are not traded, and their

valuation is derived from discounted cash

ﬂow models (“DCFs”) which incorporate

unobservable inputs and management

judgements. As such there is a high level of

estimation uncertainty involved in

determining the investment valuations.

The Investment Adviser’s fee is based on

the value of the net assets of the Company.

The investment adviser is responsible for

preparing the valuation of investments which

are reviewed and approved by the Board.

Notwithstanding this review, there is a

potential risk of misstatement in the

investment valuations.

We, therefore, have determined the valuation

of investments to be a key audit matter.

In respect of the unquoted investments in the solar

assets held by Atrato Onsite Energy Holdco Limited as at

30 September 2022, which are valued using discounted

cash ﬂow models with net asset adjustments, we

performed the following procedures:

• Challenged the appropriateness of the selection and

application of key assumptions in the discounted cash

ﬂow model including the discount rate, energy yield,

power price, inﬂation rate and asset life by

benchmarking to available industry data and

consulting with our internal valuation experts on the

appropriateness of the assumptions, including the

discount rate, inﬂation, power price, and asset life;

• Agreed energy yields, non-contracted future power

prices, inﬂation rates and asset lives used in the model

to independent reports;

• Considered whether all agreements and contracts,

such as sales & purchases agreements, power price

agreements, leases agreements etc, were accurately

reﬂected in the valuation model;

• Used spreadsheet analysis tools to assess the integrity

of the models;

• Agreed cash and other net assets to bank statements

and investee company management accounts to

support the net asset adjustments from underlying

investments to Atrato Onsite Energy Holdco Limited;

• Performed sensitivity analysis by adjusting certain

key inputs in order to calculate a reasonable range of

possible valuations where appropriate; and

• Considered the accuracy of forecasting by comparing

previous forecasts to actual results.

For loan investments to Atrato Onsite Energy Holdco

Limited, we performed the following:

• Agreed to loan agreements and confirmed the terms

of the loan;

• Agreed the cash outﬂow associated with making the

loan investment to the bank statements

Key Observations:

Based on the procedures performed, consider the

estimates and judgements made in the valuation of

investments to be appropriate.

Annual Report 2022 59

Lower testing threshold

We determined that for items impacting realised

returns, 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

based on 5% of the total expenditure, being £118,000.

Reporting threshold

We agreed with the Audit Committee that we would

report to them all individual audit differences in excess

of £41,000. 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 other than the financial

statements and our Auditor’s report thereon. Our

opinion on the financial statements does not cover the

other information and, except to the extent otherwise

explicitly stated in our report, we do not express any

form of assurance conclusion thereon. Our

responsibility is to read the other information and, in

doing so, consider whether the other information is

materially inconsistent with the financial statements

or our knowledge obtained in the course of the audit,

or otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent

material misstatements, we are required to determine

whether this gives rise to a material misstatement in

the financial statements themselves. If, based on the

work we have performed, we conclude that there is a

material misstatement of this other information, we

are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The 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.

2022

£m

Materiality £2,086,000

Basis for determining materiality 1.5% of net asset value

Rationale for the benchmark

applied

Net Asset Value is a key indicator of performance and as such was considered to

be the most relevant benchmark on which to base materiality for the users of the

financial statements.

Performance materiality £1,460,000

Basis for determining

performance materiality

We set the performance materiality at 70% of Materiality based on our risk assessment

of the control environment and consideration of potential errors due to this being a first

period audit and the first period in which financial statements have been produced.

Going concern

and longer-

term viability

• 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 33; 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 34.

Other Code

provisions

• The Directors’ statement on fair, balanced and understandable set out on page 46;

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

set out on page 47;

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

internal control systems set out on page 47; and

• The section describing the work of the audit committee set out on page 45.

60 Atrato Onsite Energy plc

Financial Statements Independent Auditors’ Report

to the Members of Atrato Onsite Energy Plc

continued

Responsibilities of Directors

As explained more fully in the Statement of Directors’

Responsibilities in Respect of the Financial

Statements, the Directors are responsible for the

preparation of the financial statements 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 through our audit

planning procedures and various client meetings 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 the Companies Act 2006, the

FCA listing and DTR rules, the principles of the AIC

Code of Corporate Governance, industry practice

Strategic report

and Directors’

report

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

• the information given in the Strategic report and 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.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared

in accordance with the Companies Act 2006.

Corporate

governance

statement

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 the 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.

Matters on

which we are

required to

report by

exception

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

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

• 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.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our

work performed during the course of the audit, we are

required by the Companies Act 2006 and ISAs (UK) to

report on certain opinions and matters as described

below.

Annual Report 2022 61

represented by the Association of Investment

Companies’ Statement of Recommended Practice

(SORP), the applicable accounting framework, and

qualification as an Investment Trust under UK tax

legislation as any non-compliance of this would lead

to the Company losing various deductions and

exemptions from corporation tax.

We focused on laws and regulations that could give

rise to a material misstatement in the Company

financial statements. Our tests included, but were

not limited to:

• agreement of the financial statement disclosures

to underlying supporting documentation;

• enquiries of management and those charged with

governance relating to the existence of any non-

compliance with laws and regulations;

• review of minutes of board meetings throughout

the period to identify any non-compliance with laws

and regulations;

• obtaining an understanding of the control

environment in monitoring compliance with laws

and regulations; and

• reviewing the calculation in relation to Investment

Trust compliance to verify that the Company was

meeting its requirements to retain its Investment

Trust Status.

We assessed the susceptibility of the financial

statement to material misstatement including fraud

and considered the fraud risk areas to be the valuation

of unquoted investments and management override

of controls.

Our tests included, but were not limited to:

• The procedures set out in the Key Audit Matters

section above;

• Obtaining independent evidence to support the

ownership of investments;

• Recalculating investment advisory fees in total to

ensure the existence and accuracy of the expenses;

• Obtaining independent confirmation of bank

balances to ensure existence and accuracy to the

bank record with independent party directly; and

• Testing journals which met a defined risk criteria

by agreeing to supporting documentation and

evaluating whether there was evidence of bias

by the Investment Advisor and Directors that

represented a risk of material misstatement

due to fraud.

We also 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.

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.

Eran Wieder (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

28 November 2022

BDO LLP is a limited liability partnership registered

in England and Wales (with registered number

OC305127).

62 Atrato Onsite Energy plc

Revenue Capital Total

Notes £000 £000 £000

Loss arising on the revaluation of

investments at the period end 4 – (1,850) (1,850)

Investment Income 5 781 – 781

Investment advisory fees 6 (1,285) – (1,285)

Other expenses 7 (684) (401) (1,085)

Loss on ordinary activities before taxation (1,188) (2,251) (3,439)

Taxation 9 – – –

Loss on ordinary activities after taxation (1,188) (2,251) (3,439)

Earnings per share (pence) – basic and diluted 8 (0.92p) (1.75p) (2.67p)

The “total” column of the Statement of Comprehensive Income is the profit and loss account of the Company

prepared in accordance with the requirements of the Act and in accordance with international accounting

standards adopted by the UK. 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. No operations were

acquired or discontinued during the period.

Loss on ordinary activities after taxation is also the total comprehensive income for the period.

The accompanying Notes on pages 66 to 83 are an integral part of these financial statements.

Statement of Comprehensive Income

Period from Incorporation on 16 September 2021 to 30 September 2022

Annual Report 2022 63

Notes £000

Non-current assets

Investments at fair value through profit or loss 4 47,105

Current assets

Fixed deposits 10 20,000

Cash and cash equivalents 11 69,361

Other receivables and prepayments 12 3,215

92,576

Current liabilities

Trade and other payables 13 (555)

Net current assets 92,021

Net assets 139,126

Capital and reserves

Share capital 14 1,500

Capital reduction reserve 16 141,065

Revenue and capital reserve (3,439)

Total Shareholders’ funds 139,126

Net assets per share (pence) 17 92.8

Approved and authorised by the Board of Directors for issue on 28 November 2022.

Juliet Davenport

Chair of the Board

28 November 2022

Atrato Onsite Energy Plc was incorporated in England and Wales with registered number 13624999.

The accompanying Notes on pages 66 to 83 are an integral part of these financial statements.

Statement of Financial Position

As at 30 September 2022

64 Atrato Onsite Energy plc

Capital

Share Share reduction Capital Revenue

capital premium reserve Reserve reserve Total

Notes £000 £000 £000 £000 £000 £000

Opening equity as at 16 September 2021 – – – – – –

Transactions with Shareholders

Shares issued at IPO 14 1,500 148,500 – – – 150,000

Share issue costs – (2,920) – – – (2,920)

Transfer to capital reduction reserve 14 – (145,580) 145,580 – – –

Dividend distribution 15 – – (4,515) – – (4,515)

Total transactions with Shareholders 1,500 – 141,065 – – 142,565

Loss and total comprehensive income for the period – – – (2,251) (1,188) (3,439)

Closing equity as at 30 September 2022 1,500 – 141,065 (2,251) (1,188) 139,126

The Company’s distributable reserves consist of the capital reduction reserve, capital reserve attributable to realised

gains and revenue reserve. Total distributable reserves as of 30 September 2022 were £137.6 million.

The Company may use its distributable reserves to fund dividends, redemptions of shares and share buy backs.

The accompanying Notes on pages 66 to 83 are an integral part of these financial statements.

Statement of Changes in Equity

Period from Incorporation on 16 September 2021 to 30 September 2022

Annual Report 2022 65

As at

30 September

2022

Notes £000

Operating activities

Loss on ordinary activities before taxation (3,439)

Adjustment for unrealised losses arising on the

revaluation of investments at the period end 1,850

Interest income (781)

Increase in other receivables and prepayments (3,215)

Increase in trade and other payables 555

Net cash ﬂow used in operating activities (5,030)

Investing activities

Purchase of investments 4 (48,955)

Increase in fixed deposit (20,000)

Increase in interest receivable 614

Interest income received 167

Net cash ﬂow used in investing (68,174)

Financing activities

Proceeds of share issues 14 150,000

Share issue costs (2,920)

Dividends paid 15 (4,515)

Net cash ﬂow from financing 142,565

Increase in cash 69,361

Cash and cash equivalents at start of the Period –

Cash and cash equivalents at end of the Period 69,361

As at

30 September

2022

£000

Cash and cash equivalents

Cash at bank 49,361

Fixed deposits with original maturity less than 3 months 20,000

Total cash and cash equivalents at end of the Period 69,361

The accompanying Notes on pages 66 to 83 are an integral part of these financial statements.

Statement of Cash Flows

Period from Incorporation on 16 September 2021 to 30 September 2022

66 Atrato Onsite Energy plc

Notes to the Financial Statements

Period from incorporation on 16 September 2021 to 30 September 2022

1. General Information

Atrato Onsite Energy Plc is a closed-ended investment company domiciled and incorporated in the United Kingdom

on 16 September 2021 with registered number 13624999. The registered office of the Company is 6th Floor, Bastion

House, 140 London Wall, London, EC2Y 5DN. Its share capital is denominated in Pounds Sterling (GBP) and currently

consists of one class of ordinary shares. The shares are publicly traded on the London Stock Exchange under a

premium listing. The Directors intend, at all times, to conduct the affairs of the Company so as to enable it to qualify

as an investment trust for the purposes of section 1158 of the Corporation Tax Act 2010, as amended.

The financial statements of the Company are for the Period from incorporation on 16 September 2021 to

30September 2022 and have been prepared on the basis of the accounting policies set out below.

At the Company’s IPO, 150,000,000 shares were admitted to the premium segment of the LSE on 23 November 2021,

upon raising gross proceeds of £150.0 million.

The Company’s investment objective is to: support the net zero agenda whilst delivering capital growth and

progressive dividend income to its shareholders; integrate ESG best practice with a focus on investing in new

renewable energy capacity and onsite clean energy solutions; and target long-term secure income with limited

exposure to wholesale power prices.

The financial statements comprise only the results of the Company, as its investment in Atrato Onsite Energy

Holdco Limited (“Holdco”) is included at fair value through profit or loss as detailed in the significant accounting

policies below. The Company and its subsidiary invest in a diversified portfolio of onsite energy assets generally on

the rooftops of UK commercial buildings, which benefit from long-term growing income streams with limited

exposure to wholesale power prices.

Atrato Partners Limited provides investment advisory services and JTC Global AIFM Solution Limited as the AIFM

provides investment management services to the Company, each under the terms of the agreement between it

and the Company.

2. Basis of Preparation

The financial statements, which aim to give a true and fair view, have been prepared in accordance with UK

adopted international accounting standards and the applicable legal requirements of the Companies Act 2006.

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

accordance with the Statement of Recommended Practice (“SORP”) “Financial Statements of Investment Trust

Companies and Venture Capital Trusts” issued by the Association of Investment Companies in April 2021 where

the SORP is not inconsistent with IFRS.

The financial statements are prepared on the historical cost basis, except for the revaluation of certain financial

instruments at Fair Value through Profit and Loss (“FVTPL”). The principal accounting policies adopted are set

out below. These policies have been consistently applied throughout the Period to 30 September 2022.

The financial statements are prepared on the going concern basis.

The currency of the primary economic environment in which the Company operates and where its investments are

located (the functional currency) is Pounds Sterling. The financial statements are presented in Pounds Sterling and

rounded to the nearest thousand.

Estimates and underlying assumptions are reviewed regularly on an on-going basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Thesignificant estimates, judgments or assumptions for the Period are set out below under “Critical accounting

judgements, estimates and assumptions”.

There is no comparative as this is the Company’s first accounting period.

Basis of consolidation

The Company has adopted the amendments to IFRS 10, which states that investment entities should measure

all of their subsidiaries that are themselves investment entities at fair value.

The Company owns 100% of its subsidiary, HoldCo. The Company invests in special purpose vehicles through its

investment in HoldCo. The Company and HoldCo meet the definition of an investment entity as described by IFRS 10.

Under IFRS 10 investment entities measure subsidiaries at fair value rather than being consolidated on a line-by-line

basis, meaning HoldCo’s cash, debt and working capital balances are included in the fair value of the investment

rather than in the Company’s current assets. HoldCo has one investor, which is the Company, who has outsourced

some investor related services to a third party relating to the operational and financial management of the underlying

Special Purpose Vehicles (“SPV”). However, in substance, HoldCo is investing the funds of the investors of the Company

on its behalf and is effectively performing investing activity on behalf of many unrelated beneficiary investors.

Annual Report 2022 67

2. Basis of Preparation continued

Characteristics of an investment entity

Under the definition of an investment entity, the Company should satisfy all three of the following tests:

a) the Company obtains funds from one or more investors for the purpose of providing those investors with

investment management services;

b) the Company commits to its investors that its business purpose is to invest funds solely for returns from capital

appreciation, investment income, or both (including having an exit strategy for investments); and

c) the Company measures and evaluates the performance of substantially all of its investments on a fair value basis.

In assessing whether the Company meets the definition of an investment entity set out in IFRS 10, the Directors

note that:

a) the Company has multiple investors and obtains funds from a diverse group of shareholders who would

otherwise not have access individually to investing in renewable energy and infrastructure assets;

b) the Company’s purpose is to invest funds for both investment income and capital appreciation. HoldCo and SPVs

will have indefinite lives. However, the underlying assets do not have unlimited life and have minimal residual

value at the end of that life, meaning they will not be held indefinitely. The Company intends to hold the

renewable assets on a long-term basis to achieve its investment objectives and hand the assets over to the lessor

at the end of the PPA; and

c) the Company measures and evaluates the performance of all of its investments on a fair value basis which is the

most relevant for investors in the Company. Management uses fair value information as a primary measurement

to evaluate the performance of all of the investments and in decision making.

The Directors are of the opinion that the Company meets all the typical characteristics of an investment entity and

therefore meets the definition set out in IFRS 10.

The Directors agree that investment entity accounting treatment reﬂects the Company’s activities as an

investment trust.

The Directors have considered the potential impact on the income statement and the statement of financial position

were Holdco to be consolidated and assessed the changes not to be significant to the net asset value and loss for the

year. The Directors believe the treatment outlined above provides the most relevant information to investors.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements. The following is a

summary of the Directors’ assessment of the going concern status of the Company, which considered the

adequacy of the Company’s resources, the impacts of the COVID-19 pandemic and the continued unrest in Ukraine.

In reaching their conclusion, the Directors considered the Company’s cash ﬂow forecasts, cash position, income

and expense ﬂows. The Company’s net assets at 30 September 2022 were £139.1 million. As at 30 September 2022,

the Company held £69.4 million in cash and cash equivalents of £20 million in a fixed deposit account due to mature

in December 2022. The Company continues to meet its day-to-day liquidity needs through its cash resources. The

total ongoing expenses for the Period ended 30 September 2022 was £1.98 million, which represented approximately

1.4% of average net assets during the Period. At the date of approval of this Annual Report, based on the aggregate

of investments and cash held, the Company had substantial cover for its operating expenses.

The major cash outﬂows of the Company are the costs relating to the acquisition of new investments and the

payment of dividends. The Directors review financing reporting at the quarterly Board meeting, which includes

reporting related fund investment limits. The Directors are confident that the Company has sufficient cash balances

and access to equity markets, in order to fund commitments to acquisitions detailed in note 22 to the financial

statements, should they become payable. The Company has provided a £125 million loan facility, of which £48.8million

had been drawn by 30 September 2022, to its immediate subsidiary repayable on 31 December 2028. Thefacility has

been provided out of the £150 million raised in the initial public offering. As at 30 September 2022, the Company had

capital commitments of £1.4 million.

In light of the COVID-19 pandemic and the macro-economic situation brought about by the Russian invasion of

Ukraine, the Directors have fully considered each of the Company’s investments and the sourcing of supplies.

The Directors do not foresee any immediate material risk to the Company’s investment portfolio and income from

underlying SPVs. A prolonged and deep market decline could lead to falling values in the underlying investments

or interruptions to cashﬂow, however the Company currently has sufficient liquidity available to meet its future

obligations. The Directors are also satisfied that the Company would continue to remain viable under downside

scenarios, including increasing inﬂation scenarios.

Underlying SPV revenues are derived primarily from the sale of electricity by project companies through PPAs

in place with creditworthy corporations. Most of these PPAs are contracted over a long period with a weighted

average remaining term as at 30 September 2022 of 19 years.

68 Atrato Onsite Energy plc

2. Basis of Preparation continued

During the Period and up to the date of this report, there has been no significant impact on revenue and cash

ﬂows of the SPVs. The SPVs have contractual operating and maintenance agreements in place with appropriately

qualified service providers. Therefore, the Directors and the Investment Adviser do not anticipate a material threat

to SPV revenues.

The market and operational risks and financial impact as a result of the ongoing COVID-19 pandemic, and

measures introduced to combat its spread, were discussed by the Board, with updates on operational resilience

received from the Investment Adviser and other key service providers. The Investment Adviser actively monitors

risks (including those related to COVID-19) with the potential to impact the Company’s investments through its

recurring engagement with service providers including operators, installation contractors, and project asset

managers. The Board was satisfied that the Company’s key service providers have the ability to continue to operate.

Over the past year inﬂation has increased above the forecasts. Having considered these increases, the Board does

not anticipate a material adverse effect on the portfolio.

The Company’s ability to continue as a going concern has been assessed by the Directors for a period of at least

12months from the date these financial statements were authorised for issue.

Critical accounting judgements, estimates and assumptions

Preparation of the financial statements requires management to make judgments, estimates and assumptions

that affect the application of accounting policies and the reported amount of assets, liabilities, income and

expenses. Estimates, by their nature, are based on judgment and available information; hence actual results may

differ from these judgments, estimates and assumptions. The estimates and assumptions that have a significant

risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the

fair value of the investments as disclosed in note 4 to the financial statements.

Key sources of estimation uncertainty: investments at fair value through profit or loss

The Company’s investments in unquoted investments are valued by reference to valuation techniques approved

by the Directors and in accordance with the International Private Equity and Venture Capital Valuation Guidelines.

The Company’s investment in Holdco has been made through equity and loans, providing Holdco with funds to

invest in the Portfolio through equity and loans. The Company used discounted cash ﬂow (“DCF”) models to

determine the fair value of the underlying assets in HoldCo. The value of HoldCo not apportioned to the investment

in the underlying entities includes any working capital not accounted for in the DCF models, such as cash or entity

level payables and receivables. The fair value of each asset is derived by projecting the future cash ﬂows of an asset,

based on a range of operating assumptions for revenues and expenses, and discounting those future cash ﬂows to

the present with a discount rate appropriately calibrated to the risk profile of the asset and market dynamics. The

key estimates and assumptions used within the DCF include the discount rates, annual energy production, future

power prices and various operating expenses and associated annual escalation rates often tied to inﬂation,

including operations and maintenance, asset management, land leases and insurance. A change in the key

valuation assumptions would lead to a corresponding change in the fair value of the investments as described in

note 4 to the financial statements. The Company’s investments at fair value are not traded in active markets.

The estimates and assumptions are those used to determine the fair value of the investments as disclosed in note 4

to the financial statements. As noted above, the Board has concluded that the Company meets the definition of an

investments entity as defined in IFRS10. This conclusion involved a degree of judgement and assessment as to

whether the Company meets the criteria outlined in the accounting standards.

As disclosed in note 21, the Company provided parent company guarantees to some investments from which the

expected economic or cash outﬂows are expected to be £nil.

Segmental reporting

The Board is of the opinion that the Company is engaged in a single segment of business, being investment in

renewable energy infrastructure assets to generate investment returns whilst preserving capital. The financial

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

All the Company’s income is generated within the UK.

All the Company’s non-current assets are located in the UK.

Adoption of new and revised standards

The Company has adopted all the applicable and effective IFRSs since incorporation. The relevant new and

amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of

the Company’s financial statements, are disclosed below. These standards are not expected to have a material

impact on the entity in future reporting periods and on foreseeable future transactions.

Notes to the Financial Statements continued

Annual Report 2022 69

2. Basis of Preparation continued

− Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for

classifying liabilities as current or non-current. The amendments are effective for annual reporting periods

beginning on or after 1 January 2024.

− Definition of Accounting Estimates - Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting

estimates’. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

− Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality

Judgements. The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023.

3. Significant accounting policies

a) Statement of compliance

The financial statements have been prepared in accordance with UK-adopted International Accounting

Standards (“IAS”).

The principal accounting policies of the Company are set out below.

IFRS 9 Classification of Financial Assets and Financial Liabilities

Financial Assets and Financial Liabilities

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 and financial liabilities

are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of

financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit

or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on

initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities

at FVTPL are recognised immediately in profit or loss.

The Company holds both a debt instrument and a controlling interest in equity shares in Holdco. The Company

measures the fair value of its investments in Holdco on an aggregate basis as this is how the instruments are

managed, potentially divested and how the fair value would be maximised.

Classification of investments

Fair value through profit or loss

The Company classifies its investments based on both the Company’s business model for managing those

financial assets and the contractual cash ﬂow characteristics of the financial assets. The portfolio of financial assets

is managed, and performance is evaluated on a fair value basis. The Company is primarily focused on fair value

information and uses that information to assess the assets’ performance to make decisions. The Company has not

taken the option to irrevocably designate any equity securities as fair value through other comprehensive income.

The collection of contractual cash ﬂows is only incidental to achieving the Company business model’s objective.

Consequently, all investments are measured at FVTPL. Once invested, the Company’s indirect investments in SPVs

will be designated at FVTPL, as SPVs are themselves considered to be investment entities and exist only to hold

underlying assets in line with the overarching AIFM agreement, and therefore will

not be consolidated but held at FVTPL in line with IFRS 10.

Financial instruments and equity

Financial assets such as cash at bank, fixed deposits at bank, trade receivables, 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 loans and other receivables measured at amortised cost.

Debts and equity instruments are classified as either financial liabilities or as equity in accordance with the

substance of the contractual arrangement.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all

its liabilities. Equity instruments issued by the Company are recognised at the point proceeds are received, net of

direct issue costs.

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss

is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

70 Atrato Onsite Energy plc

3. Significant accounting policies continued

Recognition, derecognition and measurement

Purchases and sales of investments are recognised on the trade date – the date on which the Company commits

to purchase or sell the investment and the contract to purchase or sell is wholly unconditional. Financial assets

at FVTPL are initially recognised at fair value. Transaction costs are expensed as incurred in the Statement of

Comprehensive Income. Financial assets are derecognised when the rights to receive cash ﬂows from the

investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Loans, trade, and other receivables are measured at amortised cost using the effective interest method, less any

impairment. They are included in current assets, except where maturities are greater than 12 months after the

period end date in which case they are classified as non-current assets.

Subsequent to initial recognition, all financial assets and financial liabilities at FVTPL are measured at fair value.

Gains and losses arising from changes in the fair value of the ‘financial assets or financial liabilities at FVTPL’

category are presented in the Statement of Comprehensive Income.

Income from financial assets at FVTPL is recognised in the Statement of Comprehensive Income within “income”

when the Company’s right to receive payments is established.

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Financial

liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense

recognised on an effective yield basis.

Gains and losses on fair value of investments in the Statement of Comprehensive Income represent gains or losses

that arise from the movement in the fair value of the Company investment in HoldCo.

Dividends, if any from HoldCo are recognised when the Company’s right to receive payment has been established.

Investment income comprises interest income received from the Company’s subsidiary and interest income on

fixed deposits. Interest income from fixed deposits is recognised in the Statement of Comprehensive Income using

the effective interest method.

b) Expenses

All expenses are accounted for on an accrual’s basis. In respect of the analysis between revenue and capital items

presented within the Statement of Comprehensive Income, all expenses, including investment advisory fees, are

presented in the revenue column of the Statement of Comprehensive Income as they are directly attributable to

the operations of the Company with the exception of costs incurred in the initial public offering that were not off-set

against the share premium, which have been charged as a capital item in the Statement of Comprehensive Income.

Details of the Company’s fee payments to the Investment Adviser are disclosed in note 6 to the financial

statements.

c) Taxation

Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation

on capital gains. Shortly after listing the Company received approval as an Investment Trust by HMRC.

Taxation on the profit or loss for the period comprises current and deferred tax. Taxation is recognised in the

income statement except to the extent that it relates to items recognised as direct movements in equity, in which

case it is also recognised as a direct movement in equity.

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

substantively enacted at the reporting date, and any adjustment to the tax payable in respect of previous years.

Deferred taxation

Deferred tax is the tax expected to be payable or recoverable on 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 and is accounted for using the statement of financial position liability method. Deferred tax liabilities

are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is

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

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 Statement of Comprehensive Income 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.

Notes to the Financial Statements continued

Annual Report 2022 71

3. Significant accounting policies continued

d) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in deposits held at call with banks and other short-term

deposits with original maturities of three months or less and subject to an insignificant risk of changes in value.

Short-term investments that are not held for the purpose of meeting short-term cash commitments and restricted

accounts are not considered as cash and cash equivalents. For the purpose of the statement of cash ﬂows, cash and

cash equivalents consist of cash and cash equivalents as defined above.

e) Fixed deposits

Cash that is placed on fixed deposits for longer than three months at the inception of the deposit is disclosed in

fixed deposits.

f) Other receivables and prepayments

Other receivables and prepayments are recognised initially at fair value and subsequently measured using the

effective interest method.

g) Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured using the effective

interest method.

h) Dividends

Subject to the provisions of company law, the Company may by resolution declare dividends in accordance with

the respective rights of the shareholders, but no dividend shall exceed the amount recommended by the Board

of Directors. Dividends payable are recognised as distributions in the financial statements when the Company’s

obligation to make payment has been established.

i) Equity

Share capital

Share capital consists of ordinary shares and is classified as equity.

j) Share premium account

The surplus of net proceeds received from the issuance of new shares over their par value is credited to this account

and the related issue costs are deducted from this account. This is a non-distributable reserve.

k) Capital reserve

The net profit or loss arising in the Statement of Comprehensive Income during the period is added to or deducted

from this reserve where they are capital in nature. The realised element of the capital reserve forms part of

distributable reserves and may be distributed.

l) Revenue reserve

The net profit or loss arising in the Statement of Comprehensive Income during the period is added to or deducted

from this reserve where they are revenue in nature. This is a distributable reserve.

m) Capital reduction reserve

On 28 January 2022, the Company lodged with the Registrar of Companies its statement of capital and successful

court application which permitted the transfer of £145,579,902 from its share premium account to the capital

reduction reserve (refer to note 4). This is a distributable reserve.

n) Capital management

The Company’s capital is represented by the ordinary shares, share premium account, profit and loss account

and capital reduction reserve. The Company is not subject to any externally imposed capital requirements.

The capital of the Company is managed in accordance with its investment policy, in pursuit of its investment

objective. Capital management activities may include the allotment of new shares and the buy back or re-issuance

of shares from treasury.

o) Foreign currencies

Items included in the financial statements are presented in Pounds Sterling because that is the currency of the

primary economic environment in which the Company operates and is the Company’s functional currency.

Transactions and balances

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the foreign

exchange rate ruling at that date.

Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income.

72 Atrato Onsite Energy plc

4. Investment held at fair value through profit or loss

The Company owns 100% of its subsidiary Holdco through which the Company has acquired all its underlying

investments in SPVs. As at 30 September 2022, the cost of the equity investment in Holdco is £1, while the debt

investment in Holdco is £48.9m.

Total

£000

(a) Summary of valuation

Analysis of closing balance:

Investment at fair value through profit or loss 47,105

Total investment as at 30 September 2022 47,105

(b) Movements during the Period:

Opening balance of investment, at cost –

Additions, at cost 48,955

Cost of investment as at 30 September 2022 48,955

Revaluation of investments to fair value:

Unrealised movement in fair value of investment (1,850)

Fair value of investment as at 30 September 2022 47,105

Unrealised movement in fair value of investment (1,850)

Loss on investment (1,850)

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial

assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value

measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following

3levels:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the

measurement date.

Level 2

Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for

the asset or liability, either directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

30 September 2022

Level 1 Level 2 Level 3 Total

£000 £000 £000 £000

Investment at fair value through profit or loss

Equity investment in Holdco – – – –

Debt investment in Holdco – – 47,105 47,105

Total investment as at 30 September 2022 – – 47,105 47,105

The financial instruments held at fair value are the instruments held by the Company in the SPVs indirectly via

Holdco, which are fair valued at each reporting date. The investments have been classified within level 3 as the

investments are not traded and contained certain unobservable inputs. The Company’s investment in Holdco is

also considered to be level 3 assets. There have been no transfers between levels during the period. As the fair value

of the Company’s equity and loan investments in Holdco is ultimately determined by the underlying fair values of

the equity and loan investments, made by Holdco, the Company’s sensitivity analysis of reasonably possible

alternative input assumptions is the same as for those investments. Except for the availability of cash in the

relevant entity, there are no restrictions in relation to the loans.

Notes to the Financial Statements continued

Annual Report 2022 73

4. Investment held at fair value through profit or loss continued

The movement on the Level 3 unquoted investment during the Period is shown below:

As at

30 September

2022

£000

Opening balance –

Additions during the Period 48,955

Unrealised movement in fair value of investment (1,850)

Total investment as at 30 September 2022 47,105

Valuation methodology

The Company owns 100% of its subsidiary Holdco through which the Company has acquired all its underlying

investments in SPVs. As discussed in Note 2, the Company meets the definition of an investment entity as

described by IFRS 10, and as such the Company’s investment in Holdco is valued at fair value.

Fair value of operating assets is derived using a DCF methodology, which follows International Private Equity

Valuation and Venture Capital Valuation Guidelines. DCF is deemed the most appropriate methodology when a

detailed projection of future cash ﬂows is possible. The fair value of each asset is derived by projecting the future

cash ﬂows of an asset, based on a range of operating assumptions for revenues and expenses, and discounting

those future cash ﬂows to the present day with a post-tax discount rate appropriately calibrated to the risk profile

of the asset and market dynamics. Due to the asset class and available market data over the forecast horizon, a DCF

valuation is typically the basis upon which renewable assets are traded in the market.

The Company measures the total fair value of Holdco by its net asset value, which is made up of cash at bank

(£2.7million), other receivables (£0.2million), trade payables and accruals (£0.4million) and other payables

(£2.6million) and the aforementioned fair value of the underlying investments (£47.2million) as derived from the

DCF of each asset. As at 30 September 2022, Holdco net current liability is offset by the fair value of the underlying

investments, resulting in a reduction in the fair value of the Portfolio.

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

applied and the valuation.

Valuation analysis

An analysis of the key assumptions is produced to show the impact on NAV of changes to key assumptions. For

each of the scenarios, it is assumed that potential changes occur independently of each other with no effect on any

other key assumption, and that the number of investments in the portfolio remains static throughout the modelled

life. Accordingly, the NAV per share impacts are discussed below.

(i) Discount rates

Post-tax unlevered discount rates applied in the DCF valuation are determined by the Investments Adviser using a

multitude of factors, including post-tax discount rates disclosed by the Company’s peers in the renewable energy

sector, phase at which the project is, credit risk of key counterparties, exposure to merchant power risk, adjustment

due to the portfolio being unlevered as well as the internal rate of return inherent in the original purchase price

when underwriting the asset. The DCF valuations uses one post-tax discount rate applied to cash generated by

each asset over the contract term.

The post-tax discount rates used in the DCF valuation of the investments are considered the most significant

unobservable input through which an increase or decrease would have a material impact on the fair value of the

investments at FVTPL. As of 30 September 2022, the blended post-tax discount rates applied to the portfolio

ranged from 6.5% to 7.5% with the overall weighted average of 6.6%.

An increase of 50bps and decreases of 50bps, 100bps and 200bps in the discount rates would have the following

impact on NAV:

Discount Rate + 50 bps - 50 bps -100bps -200bps

Increase/(decrease) in NAV (£000) (1,612) 1,706 3,531 7,541

NAV per share 91.7p 93.9p 95.1 97.8

NAV per share change (1.1p) 1.1p 2.4p 5.0p

Change (1.2)% 1.2% 2.5% 5.4%

74 Atrato Onsite Energy plc

4. Investment held at fair value through profit or loss continued

(ii) Energy Production

Energy production, as measured in MWh per annum, assumed in the DCF valuations is based on a P50 energy yield profile,

representing a 50% probability that the energy production estimate will be met or exceeded over time. An independent

engineer has derived this energy yield estimate for each asset by considering a range of irradiation, weather data,

ground-based measurements and design/site-specific loss factors including module performance, module mismatch,

inverter losses, and transformer losses, among others. The P50 energy yield case includes a 0.5% annual degradation

through the entirety of the useful life. In addition, the P50 energy yield case includes an assumption of availability, which

ranges from 99% to 100%, as determined reasonable by an independent engineer at the time of underwriting the asset.

Solar assets are subject to variation in energy production over time. An assumed “P75” level of energy yield (i.e. a

level of energy production that is below the “P50”, with a 75% probability of being exceeded) would cause a decrease

in the total portfolio valuation, while an assumed “P25” level of power output (i.e. a level of energy production that is

above the “P50”, with a 25% probability of being achieved) would cause an increase in the total portfolio valuation.

The application of a P75 and a P25 energy yield case would have the following impact on NAV:

Energy Production P75 P25

Increase/(decrease) in NAV (£000) (1,849) 1,694

NAV per share 91.5p 93.9p

NAV per share change (1.2p) 1.1p

Change (1.3)% 1.2%

(iii) Merchant Power Prices

The Company’s assets have long term PPAs at fixed or index linked uplifts and some incentive contracts with credit

worthy energy purchasers. Excess generation not consumed under the PPA agreement in place sell to the network,

which is 8.7% of the portfolio based on current market prices for 2024. Thus, PPA prices are not materially impacted

by ﬂuctuations in market prices. Excess generation that is exported to the network is priced on the solar PV curtailed

capture price forecast, that are derived from the forecast power price curves provided by an independent third

parties. Power price forecasts are updated quarterly and the prices used ranges from £68/MW to £395/MW over the

next five years, with an average of £179/MW.

An increase or decrease of 10% in the forecast merchant power price curves would have the following impact on NAV:

Merchant power prices –10% +10%

Increase/(decrease) in NAV (£000) (6) 227

NAV per share 92.8p 92.9p

NAV per share change (0.0)p 0.2p

Change (0.0)% 0.2%

(iv) Operating Expenses

Operating expenses include operations and maintenance, asset management, leases, rates, insurance,

decommissioning and other costs. Most operating expenses are contracted with annual escalation as per available

market forecasts of the inﬂation indices (RPI and CPI, where applicable) and capped where a cap exists in the

contract. As such there is typically little variation in annual operating expenses, however inﬂationary pressures in

the short and long-term could affect future operating expenses. Expenses subject to uncapped inﬂation has been

inﬂated in the short-term peaking at 12.3%, reducing to 3.92% by September 2027 and a long-term average of 3.3%.

An increase or decrease of 10% in operating expenses would have the following impact on NAV:

Operating expenses +10% –10%

Increase/(decrease) in NAV (£000) (1,165) 1,339

NAV per share 92.0p 93.6p

NAV per share change (0.8)p 0.9p

Change (0.8)% 1.0%

5. Income

For the Period ended

30 September 2022

£000

Interest from Holdco 483

Deposit interest 298

Total Income 781

Notes to the Financial Statements continued

Annual Report 2022 75

6. Investment advisory fees

For the Period ended

30 September 2022

Revenue Capital Total

£000 £000 £000

Investment advisory fees 1,285 – 1,285

The Investment Advisory Agreement (“IAA”) dated 1 November 2021 between the Company and Atrato Partners

Limited as the Investment Adviser and JTC Global AIFM Solutions Limited as the AIFM, appointed the Investment

Adviser to act as the Company’s investment adviser. The AIFM has been appointed pursuant to the AIFM

agreement dated 1 November 2021 between the AIFM and the Company as the alternative investment fund

manager for the purposes of the AIFM Directive. Accordingly, the AIFM is responsible for providing portfolio

management and risk management services to the Company.

Under the IAA, the Investment Adviser receives a per annum management fee of 0.7125% of the adjusted NAV

up to and including £500 million; and 0.5625% of the adjusted NAV above £500 million, invoiced monthly in arrears.

The Investment Adviser also receives a management fee of 0.2375% of the last published NAV up to and including

£500 million; and 0.1875% of the last published NAV above £500 million, each invoiced semi-annually in arrears.

With the agreement of the Company, Holdco and the Adviser, this semi-annual fee shall be applied by the Adviser

in acquiring ordinary Shares at the absolute discretion of the Board by any combination of methods as set out in

the IAA.

The Investment Adviser receives an accounting and administration fee of £50,000 per annum plus 0.02% of the

adjusted NAV in excess of £200 million up to and including £500 million plus 0.015% of adjusted NAV in excess of

£500 million. An accounting and administration fee of £800 per Clean Energy Asset held by Holdco up to 100 Clean

Energy Assets and £650 per Clean Energy Asset above 100.

No performance fee or asset level fees are payable to the IA under the IAA.

Unless otherwise agreed by the Company and the Investment Adviser, the IAA may be terminated by the Company

or the Investment Adviser on not less than 12 months’ notice to the other parties, not to be given prior to the fifth

anniversary of initial admission.

The Company has not issued or the Company’s Broker has not purchased any shares to settle investment advisory

fees in respect of the Period under review.

7. Other Expenses

For the Period ended

30 September 2022

Revenue Capital Total

£000 £000 £000

Secretary and Administrator fees 111 – 111

Directors’ fees 126 – 126

Directors’ other employment costs 25 – 25

Brokers’ retainer 51 – 51

Auditor’s fees

– Fees payable to the Company’s auditor for audit services 118 – 118

– Fees payable to the Company’s auditor for non-audit related

assurance services 18 – 18

Regulatory and Registrar’s fees 38 – 38

Marketing fees 121 – 121

Tax compliance 36 – 36

Other expenses 40 – 40

684 – 684

Expenses charged to capital

Initial listing costs – 401 401

Total expenses 684 401 1,085

The Auditor’s fee for the statutory audit of the period is £117,600 (including VAT of £19,600). BDO also reviewed the

Company’s initial accounts as at 31 January 2022 for a fee of £18,000 (including VAT of £3,000). In addition, BDO

provided services in relation to the IPO for a fee of £104,550 (including VAT of £17,425), which has been set off

against the share premium along with other IPO costs.

76 Atrato Onsite Energy plc

8. Earnings Per Share

Earnings per share is based on the loss in the period from incorporation on 16 September 2021 to 30 September

2022 of £3,439,000 attributable to the weighted average number of shares in issue of 128,750,000 in the Period.

Revenue and capital loss are £1,188,000 and £2,251,000 respectively.

9. Taxation

(a) Analysis of charge in the Period

For the Period ended

30 September 2022

Revenue Capital Total

£000 £000 £000

Corporation tax – – –

Taxation – – –

(b) Factors affecting total tax charge for the Period:

The effective UK corporation tax rate applicable to the Company for the Period is 19.00%. 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:

Revenue Capital Total

£000 £000 £000

Profit/(loss) on ordinary activities before taxation (1,188) (2,251) (3,439)

Corporation tax at 19% (226) (428) (654)

Effects of:

Profit/(loss) on investments held at fair value not allowable – 352 352

Expenses not deductible for tax purposes 10 76 86

Unutilised management expenses 216 – 216

Total tax charge for the Period – – –

Investment companies which have been approved by the HMRC under section 1158 of the Corporation Tax Act 2010

are exempt from tax on UK capital gains and capital profits/losses on loan relationships. Due to the Company’s

status as an Investment Trust, and the intention to continue meeting the conditions required to retain approval in

the foreseeable future, the Company has not provided for deferred tax on any capital gains or losses arising on the

revaluation of investments.

The March 2021 Budget announced an increase to the main rate of UK corporation tax to 25% effective from 1 April

2023. This increase in the standard rate of corporation tax was enacted on 24 May 2021.

10. Fixed deposits

As at

30 September

2022

£000

Fixed deposits 20,000

Total 20,000

A fixed deposit for six months was placed on 27th June 2022 with HSBC, at a fixed interest rate of 1.61%, maturing on

28th December 2022.

Notes to the Financial Statements continued

Annual Report 2022 77

11. Cash and cash equivalents

As at

30 September

2022

£000

Cash at bank 49,361

Money market fixed deposits 20,000

Total 69,361

Cash was placed on a money market fixed deposit for three months on 2nd August 2022 with HSBC, at a fixed

interest rate of 1.48%, maturing on 1st November 2022.

The Company has placed surplus cash in an account earning interest at a ﬂoating rate.

12. Trade receivables and prepayments

As at

30 September

2022

£000

Amounts receivable from related parties 20 3,049

Other receivables and prepayments 166

Total 3,215

13. Trade and other payables

As at

30 September

2022

£000

Accounts payable 59

Amounts payable to related parties 20 271

Accrued expenses and other taxes 225

Total 555

14. Share Capital

Nominal value of

No. of shares £

Allotted, issued and fully paid:

Opening balance as at 16 September 2021 – –

Allotted upon incorporation

Shares of £0.01 each (ordinary shares) 1 0.01

Issue of redeemable preference shares 50,000 50,000

Allotted/redeemed following admission to LSE

Shares issued 149,999,999 1,5000,000

Initial redeemable preference shares redeemed (50,000) (50,000)

Shares issued for the investment advisory fee

Share issued

Closing balance as at 30 September 2022 150,000,000 1,500,000

On incorporation the Company issued 1 ordinary share of £0.01, which was fully paid up, and 50,000 redeemable

preference shares of £1 each, which were paid up to one quarter of their nominal value. Both of these share classes

were issued to Atrato Group Limited. On 23 November 2021 the Board of Directors resolved to redeem the 50,000

redeemable preference shares.

On 23 November 2021, the Board of Directors approved the proposed placing and offer for subscription (together

the “Placing”) of up to 150 million ordinary shares of £0.01 each in the capital of the Company at a price of £1.00 per

ordinary share. It was intended that the ordinary shares of the Company would be admitted to trade on the Main

Market of the London Stock Exchange.

78 Atrato Onsite Energy plc

14. Share Capital continued

The consideration received in excess of nominal value of the ordinary shares issued, being £145,579,902, net of

total capitalised issue costs, was credited to the share premium account.

The share issue costs incurred comprise brokerage costs, third-party adviser fees and other costs directly

attributable to the issuance of shares.

The Company’s issued share capital immediately following initial admission comprised 150,000,000 ordinary shares,

and this is the total number of ordinary Shares with voting rights in the Company.

Following a successful application to the High Court and lodgement of the Company’s statement of capital with

the Registrar of Companies, the Company was permitted to reduce the capital of the Company by an amount

of £145,579,902. This was affected on 28 January 2022 by a transfer of that amount from the share premium

account to the capital reduction reserve, which can be used to fund dividends or other distributions to the

Company’s shareholders.

Ordinary shareholders are entitled to all dividends declared by the Company and to all of the Company’s assets

after repayment of its borrowings and ordinary creditors. Ordinary shareholders have the right to vote at meetings

of the Company. All ordinary shares carry equal voting rights.

15. Dividends

(a) Dividends paid in the Period

The Company paid the following interim dividends during the Period:

For the Period ended 30 September 2022

Capital

reduction Revenue

Pence per reserve reserve Total

share £000 £000 £000

Period ended 31 March 2022 1.76p 2,640 – 2,640

Quarter ended 30 June 2022 1.25p 1,875 – 1,875

Total 3.01p 4,515 – 4,515

(b) Dividends paid and payable in respect of the financial period

The dividends paid and payable in respect of the financial period are the basis on which the requirements of

s1158-s1159 of the Corporation Tax Act 2010 are considered.

For the Period ended 30 September 2022

Capital

reduction Revenue

Pence per reserve reserve Total

share £000 £000 £000

Period ended 31 March 2022 1.76p 2,640 – 2,640

Quarter ended 30 June 2022 1.25p 1,875 – 1,875

Quarter ended 30 September 2022 1.26p 1,890 – 1,890

Total 4.27p 6,405 – 6,405

After the Period end, the Company declared an interim dividend of 1.26 pence per share for the period 1 July 2022 to

30 September 2022, to be paid on 16 December 2022 to Shareholders on the register at 25 November 2022.

16. Capital Reduction Reserve

As indicated in the Prospectus, following admission of the Company’s Shares to trading on the LSE, the Directors

applied to the Court and obtained a judgement on 28 January 2022 to cancel the amount standing to the credit of

the share premium account of the Company. The amount of the share premium account cancelled and credited to

the Company’s Capital reduction reserve was £145,579,902, which can be utilised to fund distributions to the

Company’s Shareholders.

17. Net Assets Per Share

Net asset value per ordinary share is based on the £139,126,000 of net assets of the Company attributable to the

150,000,000 ordinary shares as at 30 September 2022.

Notes to the Financial Statements continued

Annual Report 2022 79

18. Financial instruments

Financial instruments by category

The Company held the following financial instruments at 30 September 2022. There have been no transfers of

financial instruments between levels of the fair value hierarchy. There are no non-recurring fair value measurements.

Financial

assets at Financial

fair value Financial liabilities

through asset at at

profit & amortised amortised

loss cost cost Total

At 30 September 2022 £000 £000 £000 £000

Non-current assets

Investment at fair value through profit or loss (Level 3) 47,105 – – 47,105

Current assets

Other receivables and prepayments – 3,215 – 3,215

Fixed deposits – 20,000 – 20,000

Cash and cash equivalents – 69,361 – 69,361

Total financial assets 47,105 92,576 – 139,681

Current liabilities

Trade and other payables – – (555) (555)

Total financial liabilities – – (555) (555)

Net financial instruments 47,105 92,576 (555) 139,126

The Company’s financial assets and liabilities as summarised above are expected to be realised within 12 months of

the reporting date, excluding those held in FVTPL. The financial assets and financial liabilities measured at amortised

cost’s carrying amount is approximated to its fair value which is classified at level 3 at the fair value hierarchy.

The Level 3 fair value measurements derive from valuation techniques that include inputs to the asset or liability

that are not based on observable market data (unobservable inputs).

In the tables above, financial instruments are held at carrying value as an approximation to fair value unless

stated otherwise.

Reconciliation of Level 3 fair value measurement of financial assets and liabilities

An analysis of the movement between opening and closing balances of the investments at fair value through

profit or loss is given in note 4.

The fair value of the investments at fair value through profit or loss includes the use of Level 3 inputs. Please refer to

note 4 for details of the valuation methodology and sensitivities.

19. Financial Risk Management

The Investment Adviser, AIFM and the Administrator report to the Board on a quarterly basis and provide

information to the Board which allows it to monitor and manage financial risks relating to the Company’s

operations. The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk, and market

risk (including price risk and interest rate risk). These risks are monitored by the AIFM. Each risk and its

management are summarised below.

a) Credit risk

Credit risk is the risk that financial loss arises from the failure of a customer or counterparty to meet its obligations

under a contract.

The Company’s credit risk exposure in relation to cash holdings is minimised by dealing with financial institutions

with investment grade credit ratings. The Company has no significant credit exposure at the current time.

Exposure in relation to clients, at the project company level will be mitigated by a combination of due diligence

procedures performed at inception of a PPA, ability to export to the national grid and diversity of counterparties in

the portfolio. While credit risk in relation to contractors employed is mitigated through due diligence procedures

performed at inception, the length of contract and available alternative parties to assume the contracts. Where the

strength of an asset vendor is insufficient, warranty and indemnity insurance are purchased. Shareholder loans

provided to Holdco and ﬂowed down to project companies, is secured through the procedures performed in

monitoring the credit risk of PPA counterparties.

80 Atrato Onsite Energy plc

19. Financial Risk Management continued

As at 30 September 2022, the Company’s maximum exposure is the cash and cash equivalents and fixed rate

deposits, with initial terms greater than three months, stated on the Statement of Financial Position. Appropriate

credit checks are required to be made on all counterparties to the Company. Cash and all fixed deposits are held in

accounts with HSBC Bank Plc, which has a credit rating as per Moody’s Investor Services of A1. During the Period

ended 30 September 2022, there are no balances past due or impaired.

b) Liquidity risk

The objective of liquidity management is to ensure that all commitments which are required to be funded can be

met out of readily available and secure sources of funding.

The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient

liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring

unacceptable losses or risking damage to the Company’s reputation.

The Company’s trade and other payables with third parties at the reporting date are considered operational in

nature and are due and payable within 12 months of the reporting date. As at 30 September 2022, the Company

has financial assets of cash and cash equivalents without contractual maturity that can meet the current expected

financial liabilities.

c) Market risk

Market risk is the risk that changes in market prices, such as interest and foreign currency rates, will affect the

Company’s financial performance or the value of its holdings of financial instruments. The objective is to minimise

market risk through managing and controlling these risks within acceptable parameters, whilst optimising returns.

The Company uses financial instruments in the ordinary course of business, and also incurs financial liabilities, to

manage market risks. At the Period end the Company does not have any financial instruments which are exposed

to market risk.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will ﬂuctuate due to changes in market

interest rates.

The Company’s interest rate risk on interest bearing financial assets is limited to interest earned on fixed cash

deposits. The Interest Rate Benchmark Reform – Phase 2 did not have a material impact on the Company’s

reported results as the exposure to interest rates is limited to interest earned on fixed deposits.

The Company’s interest and non-interest-bearing assets and liabilities as at 30 September 2022 are

summarised below:

Interest Non-interest

bearing -bearing Total

£000 £000 £000

Assets

Cash and cash equivalents 40,002 29,359 69,361

Fixed deposits 20,000 – 20,000

Other receivables and prepayments – 3,215 3,215

Investment at fair value through profit or loss 47,105 – 47,105

Total assets 107,107 32,574 139,681

Liabilities

Trade and other payables – (555) (555)

Total liabilities – (555) (555)

The short-term money market deposits and bank accounts included within cash and cash equivalents bear interest

at low or zero interest rates and therefore movements in interest rates will not materially affect the Company’s

income and as such a sensitivity analysis is not necessary.

Price risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Company will ﬂuctuate. As of

30 September 2022, the Company held one investment, being its shareholding in and loans provided to Holdco,

which is measured at fair value. The repayment is dependent on the performance of the underlying renewable

energy investments that Holdco holds. This value varies according to a number of factors, including discount rate,

asset performance, solar irradiation, operating expenses and to a limited extent forecast power prices. The

sensitivity of the investment valuation due to price risk is shown in note 4.

Notes to the Financial Statements continued

Annual Report 2022 81

19. Financial Risk Management continued

Currency risk

Currency risk is the risk that the value of a financial instrument will ﬂuctuate due to changes in foreign

exchange rates. All transactions during the current period were denominated in GBP, thus no foreign exchange

differences arose.

Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising

the return to its shareholders through the optimisation of the debt and equity balances. The Company is not

subject to any externally imposed capital requirements.

Equity includes all capital and reserves of the Company that are managed as capital.

20. Related Party Transactions with the Investment Adviser and Directors

Following admission of the ordinary shares (refer to note 14), the Company and the Directors are not aware of

any person who, directly or indirectly, jointly or severally, exercises or could exercise control over the Company.

The Company does not have an ultimate controlling party.

Details of related parties are set out below.

a) Accounting, secretarial and directors

Atrato Partners Limited has been appointed to act as an administrator for the Company under the terms of the IAA;

more details are set out below under b.

Apex Secretaries LLP is currently the secretary of the Company.

Juliet Davenport, Chair of the Board of Directors of the Company, is paid director’s remuneration of £50,000 per

annum, Faye Goss is paid director’s remuneration of £37,500 per annum and Marlene Wood is paid director’s

remuneration of £37,500 with an additional £5,000 per annum for responsibilities as Audit Committee Chair.

Total directors’ remuneration of £150,570 was incurred in respect to the Period. Any expenses incurred by

Directors which are related to business are also reimbursed.

The interests (all of which are or will be beneficial unless otherwise stated) of the current Directors in the ordinary

share capital of the Company as at 30 September 2022 were as follows:

Shares held at

30 September

Director 2022

Juliet Davenport 20,000

Faye Goss 20,000

Marlene Wood 20,000

There have been no changes to the above holdings since the Period end.

b) Investment Adviser

Fees payable to the Investment Adviser by the Company under the IAA are shown in the Statement of

Comprehensive Income and detailed in note 6.

During the Period, investment advisory fees amounted to £1,284,824 with the £257,910 outstanding and payable as

at 30 September 2022. A further amount payable to the Investment Adviser includes expenses paid on behalf of the

Company and amounted to £12,685 at the Period end.

Details of the direct and indirect interests of the Directors of the Investment Adviser and their close families in the

ordinary shares of one pence each in the Company at 30 September 2022 were as follows:

• Benedict Luke Green, a director of the Investment Adviser: 113,076 shares (0.08% of issued share capital).

• Steve Peter Windsor, a director of the Investment Adviser: 1,101,419 shares (0.73% of issued share capital).

• Gurpreet Gujral, Fund manager of the Investment Adviser: 43,324 shares (0.03% of issued share capital).

• Natalie Markham, a director of Holdco and SPVs: 18,250 shares (0.01% of issued share capital)

• Lara Townsend, a director of Holdco and SPVs: 8,664 shares (0.01% of issued share capital)

c) Acquisitions from related parties

During the period, the Company acquired an 100% investment in Atrato Rooftop Solar 1 Limited directly from Atrato

Group Limited for £1. At the time of acquisition, Atrato Rooftop Solar 1 Limited had entered into one investment, Vale

of Mowbray, a development site. Development of the site commenced prior to the acquisition and commissioning

occurred soon after completion of the acquisition. Post year-end the client entered administration resulting in lower

consumption from October by the client and higher export to the national grid.

82 Atrato Onsite Energy plc

20. Related Party Transactions with the Investment Adviser and Directors continued

d) Amounts receivable from related parties

During the period the Company entered into a loan agreement with Holdco for £125 million at 7% interest, of which

£48.9 million was drawn during the year and is outstanding as at year end. Interest outstanding and included in

amounts receivable from related parties at year end was £483,232 and was received during November 2022.

The Company additionally provided funding to Holdco for working capital and VAT. The balance outstanding at

year end was £2,565,305, which was repaid in November 2022.

21. Unconsolidated Subsidiaries, Associates and Other Entity

The following table shows subsidiaries of the Company. As the Company is regarded as an Investment Entity as

referred to in note 2, these subsidiaries have not been consolidated in the preparation of the financial statements.

The Company is the ultimate parent undertaking of these entities.

Ownership Country of

Name Interest Investment Category incorporation Registered address

Atrato Onsite Energy Holdco Ltd 100% Holdco subsidiary entity UK 6th Floor, Bastion House,

140 London Wall,

London, EC2Y 5DN

Atrato Rooftop Solar 1 Ltd 100% Operating Subsidiary UK 6th Floor, Bastion House,

entity, owned by Holdco 140 London Wall,

London, EC2Y 5DN

EMDC Solar Ltd 100% Operating Subsidiary UK 6th Floor, Bastion House,

entity, owned by Holdco 140 London Wall,

London, EC2Y 5DN

Hylton Plantation Solar Farm Ltd 100% Operating Subsidiary UK 6th Floor, Bastion House,

entity, owned by Holdco 140 London Wall,

London, EC2Y 5DN

Sonne Solar Ltd 100% Operating Subsidiary UK 6th Floor, Bastion House,

entity, owned by Holdco 140 London Wall,

London, EC2Y 5DN

Guarantees provided by the Company in relation to liabilities that may arise in Hylton Plantation Solar Farm Ltd or

Sonne Solar Ltd have been provided in the table below. The expected economic or cash outﬂow from the Company

is expected to be nil.

Amount

Provider Investment Beneficiary Nature Purpose £000

The Company Hylton Nissan Guarantee PPA 10,000

The Company Sonne Solar Tesco Guarantee Framework PPAs 10,000

The Company Sonne Solar Tesco Guarantee PPA 6,000 to 10,000

The Company Sonne – LCY2 Amazon Guarantee PPA 30,000

The Company Sonne – LTN4 Amazon Guarantee PPA 30,000

The Company Sonne – EDI1 Amazon Guarantee PPA 30,000

The Company Sonne -MAN2 Amazon Guarantee PPA 30,000

The Company Sonne -BHX2 Amazon Guarantee PPA 30,000

The Company Sonne -BHX3 Amazon Guarantee PPA 30,000

The Company Sonne -BHX4 Amazon Guarantee PPA 30,000

22. Commitments and Contingencies

As at 30 September 2022 the Company had the following future investment obligations:

£0.8 million to Atrato Rooftop Solar 1 Limited, in relation to Recipharm and Gardner projects.

£0.6 million Hylton Plantation Solar Farm Limited, in relation to the Nissan project in Sunderland. These amounts are

capital commitments within the portfolio to be funded by fund ﬂows from the Company.

Notes to the Financial Statements continued

Annual Report 2022 83

23. Post Balance Sheet Events

On the penultimate day of the financial year, a customer, Vale of Mowbray, of Atrato Rooftop Solar 1 Ltd entered

voluntary administration. The administrators continued to consume energy generated during October 2022, which

has been fully settled. The generation not consumed has been sold to the network under the existing spill PPA.

Since November, generation has been sold to the grid and will continue to be until a new owner of the site is

secured by the administrators.

Since year end the market has stabilised particularly following the Autumn Statement on 17 November 2022, which

has resulted in reductions in the risk-free rate from the levels seen during September and October. This stability has

provided more certainty to investors and companies to make decisions. Analysis of the impact on the fair value of

the investments can be seen is note 4.

No other significant events have occurred between 30 September 2022 and the date when the financial statements

were authorised by the Board of Directors, which would require adjustments to, or disclosure in, the Company’s

accounts.

Alternative Performance Measures

In reporting financial information, the Company presents alternative performance measures (“APMs”) which are

not defined or specified under the requirements of IFRS. The Company believes that these APMs, which are not

considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful

information on the performance of the Company. The APMs presented in this report are shown below:

Premium/Discount

The amount, expressed as a percentage, by which the share price at 30 September 2022, is greater or less the

NAV per share.

As at

30 September

2022

NAV per share (pence) a 92.8

Share price (pence) b 99.5

Premium (b÷a)-1 7.2%

Total return

Total return is a measure of performance that includes both income and capital returns. It considers capital gains

and the assumed reinvestment of dividends paid out by the Company into its shares on the ex-dividend date.

Thetotal return is shown below, calculated on both a share price and NAV basis.

Share price NAV

For the period from IPO to 30 September 2022 (pence) (pence)

Opening at IPO a 100.0 98.1

Closing at 30 September 2022 b 99.5 92.8

Dividends paid during the period c 3.0 3.0

Adjusted closing (d=b + c) d 102.5 95.8

Total return (d÷a)-1 2.5% (2.3)%

Ongoing charges ratio

A measure, expressed as a percentage of average NAV, of the regular, recurring annual costs of running an

investment company.

For the period

from IPO to

30 September

2022

Average NAV (£000) a 143,037

Ongoing fees* (£000) b 1,969

Ongoing charges ratio (b÷a) 1.4%

* Ongoing fees from IPO on 23 November 2021 to 30 September 2022. Consisting of investment management fees

and other recurring expenses.

84 Atrato Onsite Energy plc

Glossary

Act The Companies Act 2006

AGM or Annual General Meeting 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.

AIC The Association of Investment Companies

AIFM Alternative Investment Fund Manager

AIFMD Alternative Investment Fund Managers Directive

BTM Behind the Meter energy generation fed directly to the off-taker and not via

the national grid

COD Commercial Operation Date

Construction phase,

in construction or

implementation phase

In relation to projects, means those projects which are in, or about to

commence the installation.

Company Atrato Onsite Energy Plc

DCF Discounted cash ﬂow

DTR Disclosure Guidance and Transparency Rules

EPC Engineering, procurement and construction obligations in respect of the

asset

EPS Earnings per share, calculated as the profit for the period after tax attributable

to members of the parent company divided by the weighted average number

of shares in issue in the period

ESG Environmental, Social and Governance

ESG Risk Assessment Investment Advisers proprietary ESG due diligence risk assessment

framework

FCA Financial Conduct Authority

FMV Fair market value

FRC Financial Reporting Council

GHG Greenhouse Gas

GW Unit of power abbreviation for Gigawatt

GWh Unit of energy usage abbreviation for Gigawatt-hour

HMRC His Majesty’s Revenue and Customs

Holdco Atrato Onsite Energy Holdco Limited

IAA Investment Advisory Agreement

Investment Adviser The appointed Investment Adviser as per the Investment Advisory Agreement

Portfolio The portfolio of assets in which the Company through Holdco and the

underlying SPVs have invested in solar generation assets.

IPO An initial public offering (IPO) refers to the process of offering shares of a

corporation to the public in a new stock issuance

IFRS International accounting standards in conformity with the requirements of

the Companies Act 2006

Annual Report 2022 85

ITC Investment Trust Company is a company that obtained HMRC clearance as

an Investment Trust.

MW Unit of power abbreviation for Megawatt

MWh Unit of energy usage abbreviation for Megawatt-hour

NAV Net Asset Value

O&M Operations and Maintenance

OCR Ongoing charges ratio

P10 Annual power production level that is predicted to be exceeded 10% of

the time

P50 Annual power production level that is predicted to be exceeded 50% of

the time

P75 Annual power production level that is predicted to be exceeded 75% of

the time

P90 Annual power production level that is predicted to be exceeded 90% of

the time

PPA Power purchase agreement

Shares Ordinary shares of the Company

Solar assets Solar energy assets

Solar PV Solar photovoltaic

SPV Special Purpose Vehicle

TCFD Task Force on Climate-Related Financial Disclosures

UK Code UK Corporation Governance Code

Total Shareholder Return The movement in share price over a period plus dividends declared for

the same period expressed as a percentage of the share price at the start

of the Period

86 Atrato Onsite Energy plc

Contacts and Company Details

Directors Juliet Davenport (Non-Executive Chair)

Marlene Wood (Chair of Audit Committee)

Faye Goss (Chair of Management Engagement Committee)

Company Secretary Apex Securities LLP

6th Floor

140 London Wall

London

EC2Y 5DN

Registrar Link Market Services Limited

10th Floor

Central Square

29 Wellington Street

Leeds, LS1 4DL

AIFM JTC Global AIFM Solutions Limited

Ground ﬂoor

Dorey Court

Admiral Park

St Peter Port

Guernsey

Channel Islands

GY1 2HT

Investment Adviser Atrato Partners Limited

36 Queen Street

London

EC4R 1BN

Corporate Broker Alvarium Securities Limited

10 Old Burlington Street

London

W1S 3AG

Auditors BDO LLP

55 Baker Street

London

W1U 7EU

Financial PR Advisers KL Communications

40 Queen Street

London

EC4R 1DD

Website www.atratoroof.com

Registered Office Bastion House

6th Floor

140 London Wall

London

EC2Y 5DN

Stock exchange ticker

ISIN

ROOF

GB00BN497V39

This report will be available on the Company’s website.

Contents

Strategic Report

1 Highlights for the year

2 Chair’s Statement

4 Business model

5 The process

6 Highlights

7 Our projects

10 Investment Adviser’s Report

20 Our market

21 Sustainability

26 Section 172(1) Statement

27 Our Key Stakeholder Relationships

30 Risks and Risk Management

Corporate Governance

35 Board of Directors

36 The Investment Adviser

38 Leadership and Purpose

42 Key Board Statements

44 Management Engagement

Committee Report

45 Audit Committee Report

48 Directors’ Remuneration Report

51 Directors’ Report

54 Statement of Directors’

Responsibilities in Respect

of the Financial Statements

55 Alternative Investment Fund

Manager’s Report

Financial Statements

57 Independent Auditors’ Report to

The Members of Atrato Onsite

Energy Plc

62 Statement of Comprehensive Income

63 Statement of Financial Position

64 Statement of Changes in Equity

65 Statement of Cash Flows

66 Notes to the Financial Statements

84 Glossary

86 Contacts and Company Details

This product

is made of

FSC®-certified

Evolution 100%

Recycled.

Design and

production:

theteam.co.uk

Print:

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Atrato Onsite Energy plc Annual Report 2022

Atrato Onsite Energy plc (LSE: ROOF) is an investment

company focused on onsite clean energy generation,

providing new renewable energy capacity with 100%

carbon traceability to industrial and commercial

counterparties. The Company focuses on UK

commercial rooftop and onsite solar, helping its

corporate clients achieve net zero and reduce

their energy bills.

Atrato Onsite Energy plc Annual Report 2022

The solar

energy

solution

Atrato Onsite Energy plc

4th Floor, 36 Queen Street,

London EC4R 1BN

Atrato Onsite Energy plc Annual Report 2022