LEAF.L Regulatory News (LEAF)

Results for the period ended 31 December 2010

The board of Leaf Clean Energy Company ("Leaf" or "the Company") are pleased to announce the Company's interim results for the period ended 31 December 2010

Highlights of the period are:

·; Leaf made an additional US$25 million of direct equity and debt investments into existing portfolio businesses.

·; The Company earned US$2.0 million of interest income from debt investments in the portfolio companies. This income has been recorded in the intermediate holding companies and included in the assessment of valuations for the relevant subsidiaries.

·; The Company repurchased 5.9 million shares at an average price of 70.64p, taking advantage of the weakness in the Company's share price to deliver value to shareholders.

·; NAV per share for the Leaf portfolio was 169.11 cents or 108.0 pence at US$1.5657 to the £1. This was an increase of 0.9% for the six month period from 30 June 2010 and 6.9% for the one year period from 31 December 2009.

For further information, please contact: 

Ivonne Cantu / Elizabeth Bowman +44 (0) 207 397 8900 

Cenkos Securities plc CHAIRMAN'S STATEMENT

I am pleased to report on the progress made by Leaf Clean Energy Company ("Leaf" or the "Company") in the six months ended 31 December 2010. During the period your Company focused on building an in-house team capable of actively managing our portfolio companies. An important element of our strategy was to ensure that additional operational expertise was brought to bear in order to manage the portfolio in the most effective manner and drive further value from our investments. This focus has delivered greater stability and has served the Company and its investee companies well. I am encouraged by Leaf's performance and continue to believe that we are well positioned to deliver on our goals.

Portfolio performance

I would like to take this opportunity to recognize the extraordinary accomplishments of the new Leaf management team over the past nine months. Under the leadership of executive director, Bran Keogh, they have established a Washington, DC, office; identified and recruited an excellent team of investment professionals; and implemented new controls and procedures appropriate for the business. At the same time, they completed a review of the Leaf portfolio to identify and implement additional opportunities at our investee companies to maximize their value. All of this has been achieved with a significant reduction in cost compared to that of the former asset advisor.

I would also like to thank my fellow non-executive board members for their increased involvement, keen insights and tireless efforts in overseeing the transition from the former asset advisor to the new in-house team.

Performance across Leaf's portfolio continues to be satisfactory. The economic slowdown and sharp contraction in credit markets has diminished lending activity and thereby impaired the pace of project development and consequently growth. In particular, companies that relied on project finance were adversely affected, since the flow of debt and equity investments into renewable energy projects was disrupted. Nevertheless, the development of our portfolio continues apace and our investee companies have by and large continued to make progress, contending well with the pressure of this challenging environment.  As the Leaf portfolio starts to mature, we will continue to explore potential opportunities to realise financial rewards for our shareholders.

Several of our portfolio companies have recently achieved critical milestones:

§ Vital Renewable Energy Company (VREC) consummated the acquisition of an operating ethanol production facility in Goias, Brazil. This is VREC's first acquisition of an operational asset and offers significant expansion potential that will be aggressively pursued by the company, complementing organically its envisioned growth via follow-on acquisitions;

§ SkyFuel has secured independent verification and validation of product performance, industry peer recognition of the innovativeness of its technology, and successful completion of certain testing programs. As a result, the company expects to begin commercial sales of its equipment this year;

§ Miasolé has maintained its recent strong momentum by attaining UL certification on its 13.0 per cent efficiency CIGS solar panels, the highest level to date for commercial-size CIGS modules. The company expects to commence shipment of these higher-efficiency modules in the second quarter of 2011.

Economic and political background

The business environment in which Leaf operates continues to improve. The U.S. economy is showing renewed signs of strength, driven primarily by near-record-low interest rates, as well as substantial fiscal stimulus programs undertaken by federal and state governments to reinvigorate economic activity. Additionally, there has been an improvement across credit and equity markets over the first half of the financial year, with the latter appreciably above their lows of early 2009. These positive signs offer the prospect that momentum will build in our markets through the second half of our fiscal year.

Another positive development has been the improvement in the environment for realisations. The U.S. clean tech sector saw eight successful public offerings, raising more than $1.2 billion during the period covered by this report - well above last year's equivalents. Merger & acquisition activity has remained steady. Looking forward, economic fundamentals in the markets of focus for your Company continue to rally and this creates a positive medium-term outlook. Your Company is well placed to take advantage of the rebound in economic activity and business sentiment, to generate value from its portfolio.

Despite the positive market developments, the recent congressional elections in the U.S. have heralded movements which some commentators expect will lead to significant political change in the coming months. As a result, there is some uncertainty about the regulatory and policy framework in the short term. It is too soon to judge the implications, if any, for our business of these political developments. However, it is our expectation that the medium- to long-term outlook will remain supportive of our industry and businesses.

Net assets

During the year ended 31 December 2010, Leaf's net asset value (NAV) per share rose by 6.9 per cent, from 158.23 cents to 169.11 cents, with 0.9 per cent of this increase occurring during the six month period of this interim report. The one-year increase resulted mainly from share repurchases, more than offsetting the impact of the buyout of the former asset advisor. Of our US$232 million of net assets, US$52 million was held in cash, of which US$3 million is committed to portfolio companies. The Board is of the view that the balance of US$49 million provides sufficient liquidity to meet the needs of the portfolio.

Outlook

Leaf continues to perform well and is strongly positioned to grow and develop. The broader outlook for markets continues to be positive. Our priorities for the second half of the year are to continue to commit significant resources to managing the investments we have made in our portfolio companies. Our intention remains to deliver growth and value for our shareholders and your Board believes that there are grounds for confidence in both the short- and medium term. I look forward to reporting further progress at the end of the fiscal year.

The Interim Report and Accounts set out below incorporate both financial statements for the Company and consolidated financial statements for the wider Leaf Group. References to NAV in my report and the Management Report reflect the Company's NAV.

Peter Tom

Chairman

28 March 2011

(1) Based on US$/£ exchange rate of 1.5657 on 31 December2010

MANAGEMENT REPORT

During this interim period the Leaf management team continued Leaf's strategy of focusing on its existing portfolio of investee companies and on building its in-house capabilities, while keeping a careful eye out for potential new investment opportunities. While the operating environment faced by Leaf and its investee companies continues to be challenging, the macro environment shows continuing signs of improvement, and Leaf management remains confident that its work with the portfolio and its internal organization will produce satisfactory results for the Company.

Leaf management and the Leaf Board reviewed a number of new opportunities during the six months period ending 31 December 2010 but Leaf decided not to make any new investments. Leaf will continue to actively seek new, high-quality investment opportunities. Additionally, management has ensured that Leaf has adequately reserved capital to meet the needs of its portfolio. For the period under review, Leaf has made additional investments in several of its current investee companies and has continued to provide significant operational support to these companies as well. Leaf management would like to highlight several noteworthy events:

·; Leaf made an additional US$25 million of direct equity and debt investments into existing portfolio businesses.

·; The Company earned US$2.0 million of interest income from debt investments in the portfolio companies. This income has been recorded in the intermediate holding companies and included in the assessment of valuations for the relevant subsidiaries.

·; The Company repurchased 5.9 million shares at an average price of 70.64p, taking advantage of the weakness in the Company's share price to deliver value to shareholders.

·; Leaf achieved significant cost reductions during the interim period versus the prior period as a result of replacing the former asset advisor with an in house management team (see Notes 8 and 9 to the Company financial statements).

Financial Performance

Leaf's total NAV on 31 December 2010 was US$232 million, US$7.9 million lower than the NAV at 30 June 2010. The change in NAV over the interim period resulted mainly from a US$6.7 million share repurchase, with the balance being the Company's US$1.2 million comprehensive loss for the period. US$52 million of the Company's NAV was held in cash and US$185 million in investments.

NAV per share for the Leaf portfolio was 169.11 cents or 108.0 pence at US$1.5657 to the £1. This was an increase of 0.9% for the six month period from 30 June 2010 and 6.9% for the one year period from 31 December 2009. The increase for the one year period was due primarily to share repurchases (+13.9%), offset by termination costs of the former asset advisor (-3.1%), the comprehensive loss for the period (-3.0%), and exchange rate losses (-1.0%). The increase for the six month period to 31 December 2010 was due primarily to share repurchases (+1.4%) offset by the comprehensive loss for the period (-0.6%).

Some key performance milestones achieved by Leaf Clean Energy and its portfolio companies during the past year included:

·; MiaSolé announced that the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) had independently confirmed the 15.7% efficiency of its large area production modules. This new world record for highest efficiency of commercial scale thin-film solar modules beats MiaSolé's own previous record and will allow MiaSolé to offer solar modules with the efficiency of polysilicon and the lower manufacturing costs of thin-film modules.

·; VREC closed its acquisition of an operating ethanol production facility in Goias, Brazil.

·; SkyFuel won the "CSP Commercialized Technology Innovation of the Year" award, relocated and consolidated its headquarters to Colorado in preparation for an anticipated commercial expansion, and surpassed the 25 year weathering mark in the National Renewable Energy Lab (NREL) testing at NREL's Ultra‐Accelerated Weathering Station (UAWS)for its ReflecTech® Mirror Film, demonstrating long term durability against ultraviolet (UV) radiation.

Market Environment

Leaf's fiscal first half ended 31 December 2010 saw continued strengthening of the U.S. economy and the public stock markets along with growing signs of a thaw in the credit markets. The U.S. elections in November brought Republican control of the House of Representatives, which will have implications for renewable energy in the short term, although it remains unclear exactly what those implications are. On the positive side, the lame duck U.S. Congress passed a one year extension of the section 1603 federal tax grant program. In another positive development, President Obama's budget proposal to the new Congress demonstrated his administration's continued commitment with respect to federal spending and policies promoting renewable energy projects and programs in the U.S., including US$8 billion (a one-third increase) for clean energy projects, even in the face of spending freezes and cuts affecting a broad swath of the federal budget. Another positive note was the resounding defeat in California of Proposition 23, the passage of which would have repealed a key California law that has created the most supportive environment in the US for renewable energy standards. Significantly, Californians defeated this measure despite a very troubled local economy.

Venture Capital and private equity investment in the clean energy industry declined in dollar terms during the second half of calendar 2010, mainly due to fewer big deals occurring as compared to the first half of 2010. However, the number of deals remained flat and was up for the year versus calendar 2009. For the calendar year, the top investment sector for clean energy was solar, with 24% of total investment dollars invested in solar related companies. The M&A market for 2010 was up slightly in terms of the number of deals but showed significant growth (43%) over 2009 in total dollar value terms.

In the public markets, prices of renewable energy companies, as measured by the NEX index, have continued their modest recovery and appear to be picking up steam. The NEX index underperformed the S&P 500 by more than 20% for 2010. However, growth in the NEX accelerated and outpaced the S&P 500 during the second half of 2010, increasing by 26.5% as compared to 21.9% for the S&P 500. The NEX price remains less than half of its 2007 high, however and continued high growth will be necessary before public market valuations for renewable energy companies ease their pressure on private company valuations.

Outlook

Leaf's management believes that the diversity and balance of the Leaf portfolio together with its focus on management attention and support for the existing investee companies will position the Company to benefit from the continuing improvements in the current economic environment. Management is focused on building upon the progress made over the past six months to deliver growth.

28 March 2011

INDEPENDENT REVIEW REPORT TO LEAF CLEAN ENERGY COMPANY

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 December 2010, which comprises the consolidated and company statements of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of changes in equity, the consolidated and company statements of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in notes 2, the annual financial statements of the Group and Company are prepared in accordance with IFRSs. The condensed set of financial statements included in this half-yearly report have been prepared in accordance with IAS 34 Interim Financial Reporting.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed sets of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion in respect of condensed parent company financial statements

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of parent company financial statements in the half-yearly report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.

Conclusion in respect of condensed consolidated financial statements

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.

KPMG Audit LLC

Chartered Accountants Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

28 March 2011

Parent company statement of comprehensive income

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements 

Parent company statement of financial position

as at 31 December 2010

The accompanying notes form an integral part of these interim financial statements

The interim financial statements were approved by the Board of Directors on 28 March 2011 and signed on their behalf by:

Parent company statement of changes in equity

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements

Parent company statement of cash flows

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements

Notes to the interim financial statements

for the six months ended 31 December 2010

1 The Company

Leaf Clean Energy Company ("Leaf" or the "Company") was incorporated and registered in the Cayman Islands on 14 May 2007. The Company was established to invest in clean energy projects, predominantly in North America. Clean energy includes activities such as the production of alternative fuels, renewable power generation and the use of technologies to reduce the environmental impact of traditional energy. The Company seeks to achieve long term capital appreciation primarily through making privately negotiated acquisitions of interest (principally equity but also equity-related and subordinated or mezzanine debt securities) in both projects and companies which own assets or which participate in the clean energy sector and through the generation and commercialisation of carbon credits derived from these projects.

The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 28 June 2007 when dealings also commenced.

The Company's agents and the inhouse management team perform all significant functions.

The financial statements of the Company as at and for the year ended 30 June 2010 are available upon request from the Company's registered office at PO Box 309GT, Ugland House, George Town, Grand Cayman, Cayman Islands or at www.leafcleanenergy.com.

2 Statement of compliance

These condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Company as at and for the year ended 30 June 2010.

Leaf is an investment company. However, because it holds majority stakes and therefore has the power to control, it is required to prepare group financial statements that consolidate the results of such investments. In order to present information that is comparable with other investment companies, Leaf also publishes financial statements of the Company, which include investments in subsidiaries regarded as part of the Company's investing business at fair value.

These condensed interim financial statements were approved by the Board of Directors on 28 March 2011.

3 Accounting policies

The accounting policies applied by the Company in these interim financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 30 June 2010.

4 Use of estimates and judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the year ended 30 June 2010.

During the period ended 31 December 2010, management reassessed its estimates in respect of the valuation of unquoted investments in subsidiaries (See note 12.2).

5 Financial risk management policies

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 30 June 2010.

6 Net Asset Value per Share

7 Management Fees

In May 2010, Leaf Clean Energy Company terminated its Asset Advisory Agreement with EEA Fund Management Limited, and established its own subsidiary, Leaf Clean Energy USA, LLC ("Leaf USA"), in Washington, DC, from which the subsidiary provides assets advisory, portfolio management and certain administrative services to the Company. Leaf USA is entitled to management fees which are calculated based on 20% mark up on the costs of the asset advisory and portfolio management services provided to Leaf Clean Energy Company. The administrative services provided to Leaf Clean Energy Company are at cost base with nil mark up.

Management fees for the six months ended 31 December 2010 payable to Leaf USA were US$1,650,564 (period ended 31 December 2009: US$nil) and the amount accrued but not paid at the period end was US$168,518 (30 June 2010: US$nil).

Management fees for the six months ended 31 December 2010 payable to EEA Fund Management Limited is US$nil (period ended 31 December 2009: US$3,126,530) and the amount accrued but not paid at the period end was US$nil (30 June 2010: US$nil).

8 Other administration expenses

9 Legal and professional fees

Legal and professional fees represent legal, advisory and consultancy fees incurred during and after the implementation of investment acquisitions, as well as work on group and portfolio structuring.

10 Administration fees

With effect from November 2009, the Company administrator is entitled to an administration fee, payable quarterly in arrears and calculated in respect of each quarter or other period with a minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum where the total assets of the parent company less borrowings is less than US$100,000,000; 0.09% where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$100,000,000 but less than US$200,000,000; and at the rate of 0.08% per annum where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$200,000,000.

Administration fees for the period amounted to US$221,615 including additional quarterly administration fees of US$25,000 with effect from July 2010, (period ended 31 December 2009: US$119,376) and US$94,371 was outstanding as at 31 December 2009 (30 June 2010: US$56,620)

11 Directors' remuneration

Details of the Directors' basic annual remuneration are as follows:

The Directors are also entitled to receive reimbursement of any expenses in relation to their appointment. Total fees and expenses paid to the Directors for the six months ended 31 December 2010 amounted to US$565,865 (period ended 31 December 2009: US$328,632) of which US$225,000 was outstanding at 31December 2010 (June 2010: US$225,000). The Directors engaged Mercer Limited to review Leaf Clean's remuneration for its Directors as compared to companies similar to Leaf Clean in the United States and the United Kingdom. The Directors have adopted the recommendations of Mercer effective 1 April 2011.

12 Investments

12.1 The Subsidiaries

Since incorporation, for efficient portfolio management purposes, the Company has established the following subsidiary companies:

*Indirect subsidiaries

The Company has also control over the following underlying investee companies:

(1) Voting rights 60.9%

(2) Voting rights 81.9%

(3) Voting rights 66.25%

12.2 Investments in subsidiaries at fair value through profit or loss

12.3 Portfolio valuation methodology

Unquoted investments are valued by applying an appropriate valuation technique, which makes maximum use of market-based information, is consistent with models generally used by market participants and is applied consistently from period to period, except where a change would result in a better estimation of fair value. The Company primarily invests in unquoted direct investments. Unquoted direct investments have characteristics similar to private equity investments, in that the value is generally determined through the sale or flotation of the entire business, rather than the sale of an individual instrument. Valuations of such investments are based upon the "International Private Equity and Venture Capital Valuation Guidelines."

The in house management conducted a valuation analysis of the Company's investment portfolio based upon standard valuation approaches compatible with the "International Private Equity and Venture Capital Valuation Guidelines." Given the uncertainties inherent in estimating the fair value of unquoted direct investments, a degree of caution was applied by the inhouse management in exercising judgements and making the necessary estimate.

13 Share Capital

14 Basic and Diluted Loss per Share

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year:

There is no difference between the basic and diluted loss per share for the year as there are no potential dilutive ordinary shares.

15 Related Party Transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

The Company administrator and the Directorsare considered related parties due to the significance of the contracts with these parties. Details of the fee arrangements with these parties are given in notes 7, 10 and 11.

16 Subsequent Events

There were no material subsequent events after the reporting date.

Consolidated statement of comprehensive income

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements.

Consolidated statement of financial position

as at 31December 2010

The accompanying notes form an integral part of these interim financial statements.

The interim financial statements were approved by the Board of Directors on 28 March 2011 and signed on their behalf by:

Consolidated statements of changes in equity

for the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements.

Consolidated statement of cash flows

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements

Consolidated statements of cash flows (continued)

For the six months ended 31 December 2010

The accompanying notes form an integral part of these interim financial statements

Notes to the consolidated interim financial statements

For the six months ended 31 December 2010

1 The Company

Leaf Clean Energy Company ("Leaf" or the "Company") was incorporated and registered in the Cayman Islands on 14 May 2007. The Company was established to invest in clean energy projects, predominantly in North America. Clean energy includes activities such as the production of alternative fuels, renewable power generation and the use of technologies to reduce the environmental impact of traditional energy. The Company seeks to achieve long term capital appreciation primarily through making privately negotiated acquisitions of interest (principally equity but also equity-related and subordinated or mezzanine debt securities) in both projects and companies which own assets or which participate in the clean energy sector and through the generation and commercialisation of carbon credits derived from these projects.

The Shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 28 June 2007 when dealings also commenced.

The Company's agents and the management team perform all significant functions. Accordingly, the Company itself has no employees.

The consolidated financial statements of the Group as at and for the year ended 30 June 2010 are available upon request from the Company's registered office at PO Box 309GT, Ugland House, George Town, Grand Cayman, Cayman Islands or at www.leafcleanenergy.com.

2 Statement of compliance

These condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting .They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2010.

 The condensed consolidated financial statements were authorised for issue by the Board of Directors on 28 March 2011.

3 Significant accounting policies

The accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2010.

4 Use of estimates and judgements

The preparation of consolidatedfinancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 30 June 2010.

During the period ended 31 December 2010 management reassessed its estimates in respect of:

·; the valuation of unquoted investments (see note 13); and

·; impairment of goodwill and other intangible assets (see note 15)

5 Financial risk management

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 30 June 2010.

6 Management Fees

In May 2010, Leaf Clean Energy Company terminated its Asset Advisory Agreement with EEA Fund Management Limited, and established its own subsidiary, Leaf Clean Energy USA, LLC ("Leaf USA"), in Washington, DC, from which the subsidiary provides assets advisory, portfolio management and certain administrative services to the Company.

7 Other administration expenses

7.1 Legal and professional fees

Legal and professional fees represent legal, advisory and consultancy fees incurred during and after the implementation of investment acquisitions, as well as work on group and portfolio structuring.

7.2 Administration fees

With effect from November 2009, the Company administrator is entitled to an administration fee, payable quarterly in arrears and calculated in respect of each quarter or other period with a minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum where the total assets of the parent company less borrowings is less than US$100,000,000; 0.09% where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$100,000,000 but less than US$200,000,000; and at the rate of 0.08% per annum where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$200,000,000.

Administration fees for the period amounted to US$221,615 including additional quarterly administration fees of US$25,000 with effect from July 2010, (period ended 31 December 2009: US$119,376) and US$94,371 was outstanding as at 31 December 2009 (30 June 2010: US$56,620)

8 Directors' remuneration

Details of the Directors' basic annual remuneration are as follows:

The Directors are also entitled to receive reimbursement of any expenses in relation to their appointment. Total fees and expenses paid to the Directors for the six months ended 31 December 2010 amounted to US$565,865 (period ended 31 December 2009: US$328,632) of which US$225,000 was outstanding at 31December 2010 (June 2010: US$225,000). The Directors engaged Mercer Limited to review Leaf Clean's remuneration for its Directors as compared to companies similar to Leaf Clean in the United States and the United Kingdom. The Directors have adopted the recommendations of Mercer effective 1 April 2011.

9 Interest income on investments at fair value through profit or loss

The Group had US$1,976,505 of interest income from loans made by the parent company to its portfolio companies. Of this, US$817,816 was from non-subsidiaries and is recognised in profit or loss. US$1,158,689 was from Leaf's investment in subsidiaries and was eliminated on consolidation.

10 Impairment of non-financial assets

Non-financial assets are assessed for impairment at each reporting period end. This review is undertaken in conjunction with the review of the Company's investment in each subsidiary.

11 Loss per share

Basic and Diluted

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period:

There is no difference between the basic and diluted loss per share for the period.

12 The Subsidiaries

Since incorporation, for efficient portfolio management purposes, the Company has established the following subsidiary companies:-

*Indirect subsidiaries

The Company has also control over the following underlying investee companies:

(1) Voting rights 60.9%

(2) Voting rights 81.9%

(3) Voting rights 66.25%

13 Investments

Investments comprise ordinary stock, loans and preferred stock carrying a cumulative preferred dividend, preferential return of capital and capped rights to share in profits. The Directors, with advice from the inhouse management team, Leaf Clean Energy USA, LLC, have reviewed the carrying value of each investment and calculated the aggregate value of the Company's portfolio. Investments are measured at the Directors' estimate of fair value at the reporting date, in accordance with IAS 39 'Financial Instruments: Recognition and measurement'.

13.1 Investments at fair value through profit or loss

Investments are stated at fair value through profit or loss on initial recognition. Loans are stated at fair value in conjunction with the related equity investment in the investee company. All investee companies are unquoted.

13.2 Portfolio valuation methodology

Unquoted investments are valued by applying an appropriate valuation technique, which makes maximum use of market-based information, is consistent with models generally used by market participants and is applied consistently from period to period, except where a change would result in a better estimation of fair value. The Company primarily invests in unquoted direct investments. Unquoted direct investments have characteristics similar to private equity investments, in that the value is generally determined through the sale or flotation of the entire business, rather than the sale of an individual instrument. Valuations of such investments are based upon the "International Private Equity and Venture Capital Valuation Guidelines."

The in-house management team conducted a valuation analysis of the Company's investment portfolio based upon standard valuation approaches compatible with the "International Private Equity and Venture Capital Valuation Guidelines." Given the uncertainties inherent in estimating the fair value of unquoted direct investments, a degree of caution was applied by the Asset Advisor in exercising judgements and making the necessary estimates.

14 Property, plant and equipment

As of 31 December 2010, the Group was of a view that the deferred infrastructure grant of one of its subsidiaries should be reclassified from noncurrent liability to property, plant and equipment. The reclassification contributed nil impact to the net profits and the net assets of the Group.

15 Intangible assets

Other intangible asset

Other intangible assets comprise an Electric Power Purchase and Sale agreement with Seminole Electric Cooperative with a Group subsidiary, Multitrade Telogia LLC. The subsidiary agreed to sell and Seminole Electric Cooperative agreed to buy power upon commencement of commercial operations. The contract ends in November 2023.

16 Share capital

17 Loans and borrowings

Long term debt comprises:

(i) a promissory note of US$8,200,000 executed by a Group subsidiary to finance the construction of a methane recovery project secured by a mortgage and security interest in all the assets of that project and the note is payable over 180 months, which began in October 2006. The note bears interest at a rate of 8.11% per year; and

(ii) the first tranche of a promissory note of US$20,701,000 through the Rural Utilities Service (RUS), an agency of the U.S. Department of Agriculture, executed by a Group subsidiary as long term financing for its biomass power plant, the construction of which had been previously financed on a short term basis by the Company. While the total available principal is US$20,701,000, with a maturity of 31 December 2029, advances to 30 June 2010 were US$14,211,653, and to 31 December 2010 were US$20,701,000, which are included in the above balances. Repayment is scheduled to begin on 31 December 2010. Interest is payable quarterly at a rate of 3.247%. The loan places certain restrictions on the Group subsidiary along with the pledge of most of the assets and income.

18 Related Party Transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

The Company administrator and the Directors are considered related parties due to the significance of the contracts with these parties. Details of the fee arrangements with these parties are given in notes 7.2 and 8.

19 Subsequent Events

There were no material subsequent events after the reporting date.