VEN.L Regulatory News (VEN)

Ventus VCT plc

Annual Report and Financial Statements

for the year ended 28 February 2011

Registered No: 05205442

Chairman's Statement

I present the Annual Report and Financial Statements of Ventus VCT plc (the "Company") for the year ended 28 February 2011.

Overview

2010 was a challenging year for the Company's portfolio of operational wind assets. Wind speeds across the UK were unusually low, and this has had an impact on the revenue generated by those projects during the year. Further details on this, as well as the process of reassessing the energy yield projections for some of the Company's wind investments, are set out in the Investment Manager's Report.

Net Asset Value, Results and Dividends - Ordinary Shares

At the year end, the net asset value of the ordinary share fund of the Company stood at £17,158,000 or 104.7p per ordinary share (2010: £16,611,000 or 101.4p per ordinary share). The revenue profit attributable to ordinary shareholders for the year was £508,000 or 3.10p per ordinary share. The capital gain attributable to ordinary shareholders for the year was £612,000 or 3.74p per ordinary share, resulting in a net gain to ordinary shareholders for the year of £1,120,000 or 6.84p per ordinary share (2010: net loss of £1,758,000 or 11.62p per ordinary share).

The value of investments held by the ordinary share fund at 28 February 2011 was £16,256,000 compared to £14,305,000 at 28 February 2010. The Investment Manager's Report gives details of investments made during the year, together with information about the valuation of all investee company holdings within the portfolio.

The income generated in the ordinary share fund during the year comprised dividend income and interest earned on loan stock and cash deposits. Total income for the year to 28 February 2011 was £848,000 compared to £728,000 for the year to 28 February 2010. The increase in income was attributable to an increase in dividends and loan stock interest income from investee companies.

The Company proposes to declare a final dividend of 1.60p per ordinary share to be paid on 15 July 2011 to all ordinary shareholders on the register as at the close of business on 10 August 2011. The Company paid an interim dividend of 1.50p per ordinary share on 12 January 2011. Therefore the total annual dividend will be 3.10p per ordinary share.

Net Asset Value and Results - "C" Shares

As reported in the Half-yearly Report, on 8 February 2010 the Company launched a second joint "C" share offer with Ventus 2 VCT plc. The offer closed on 31 May 2010, the Company having allotted 4,404,421 "C" shares, resulting in net proceeds of £4,162,000 after issue costs.

At the year end, the net asset value of the "C" share fund of the Company stood at £10,502,000 or 92.7p per "C" share (2010: £6,400,000 or 92.4p per "C" share). The revenue profit attributable to "C" shareholders for the year was £82,000 or 0.75p per "C" share. The capital loss attributable to "C" shareholders for the year was £142,000 or 1.29p per "C" share, resulting in a net loss to "C" shareholders for the year of £60,000 or 0.54p per "C" share (2010: net loss of £144,000 or 2.36p per "C" share).

The value of investments held by the "C" share fund at 28 February 2011 was £3,960,000 compared to £325,000 at 28 February 2010. The Investment Manager's Report gives details of investments made during the year, together with information about the valuation of all investee company holdings within the portfolio.

The income generated in the "C" share fund during the year comprised interest earned on loan stock, UK treasury bills and cash deposits. Total income for the year to28 February 2011 was £262,000, of which £227,000 was derived from loan stock. This compares with income generated by the "C" share fund of £31,000 in the year ended28 February 2010. The primary reason for the increase in income is the progress made in making investments over the year (as described in more detail below) which has allowed the "C" share fund to accrue interest income from its loan stock investments.

The Company has not declared a dividend in respect of the "C" shares because, although the share fund has made a net revenue profit for the year, it has yet to accumulate sufficient revenue reserves from which to make a significant distribution.

Investments

The Company's Investment Manager, Climate Change Capital Limited, continues to be actively engaged in managing the portfolio and in identifying and negotiating potential investment opportunities to invest the remaining "C" share capital that has been raised.

As at 28 February 2011, the ordinary share fund of the Company held investments in 13 companies (2010: 12 companies) with a total value of £16.3 million (2010: £14.3 million). The "C" share fund held an investment in seven companies (2010: one company) with a value of £4.0 million (2010: £0.3 million).

The Investment Manager's Report provides details of the investments held as at28 February 2011 and as at the date of this report. All investments are structured so as to be treated as qualifying holdings for the purposes of Venture Capital Trust ("VCT") regulations, unless otherwise stated.

Corporate Governance

The Board has been made aware by the Investment Manager of a breach of internal control within the Investment Manager relating to Ventus 2 VCT plc. This breach has had no financial impact on the Company, however the Board is investigating whether the matter involves a weakness in the internal control procedures of the Investment Manager that could apply to the Company. The Investment Manager is currently investigating the background to this matter, has confirmed to the Board no similar events have occurred in the past, and has made proposals to implement remedial actions for the future. The Board is taking steps to satisfy itself in respect of this matter, which is discussed further in the Corporate Governance Statement.

Investment Manager

The lead investment manager for the Company has recently tendered his resignation to Climate Change Capital Limited, the Investment Manager for the Company. This has led your Board and the Board of Ventus 2 VCT plc to enter discussions with Climate Change Capital Limited on the scale and nature of the staffing resources needed for the future. As at the time of this Report it is not possible to forecast the outcome of these discussions.

VCT Qualifying Status

The Company retains PricewaterhouseCoopers LLP to review its compliance with VCT regulations. The Directors are satisfied that the Company continues to fulfil the conditions for maintaining VCT status.

Outlook

The UK renewable energy market continues to be an attractive sector in which to make investments and the Company remains well positioned to support small to medium sized companies at a time when access to capital continues to be a challenge. The Investment Manager's Report provides further comment on the wider market outlook and the opportunities open to the Company.

The Company has substantially invested the ordinary share capital raised and the Investment Manager is progressing several opportunities for new investments to be made from the "C" share fund. Last year the Company reported operational difficulties with its investment in Redimo LFG Limited which resulted in the value of the investment being fully written down. The poor performance of this investment together with the low levels of generation across the wind energy portfolio due to low wind speeds have restricted the Company's ability to pay a dividend in line with its target this year. However, it remains the long term dividend objective of the Company to pay an average annual dividend of 8p per share in respect of each share class. The Company's ordinary share fund holds a portfolio of investments that is expected to yield long term stable income streams to support the dividend objective.

The Board of Directors would like to express its appreciation of the hard work demonstrated by the Investment Manager and all the Company's service providers throughout the year.

Shareholder Communications

In accordance with the Company's commitment to environmental sustainability and to minimise costs wherever appropriate, the financial statements will continue to be made available through regulated news service providers and on the Company website at www.ventusvct.com. Any shareholder who wishes to receive notification of reports by either email or post may request this by contacting the Registrar.

The Board

In order to deal with certain changes to the Listing Rules regarding the independence of directors who are also directors of other companies managed by the same investment manager, during the year Alan Moore, Paul Thomas and Colin Wood stood down as Directors of the Company. The Board wishes to express its appreciation to each in respect of his service to the Company over the period during which he was in office. On 13 July 2011, Charles Conner and David Williams were elected to serve as Directors of the Company. Alan Moore, Paul Thomas and Colin Wood have continued to serve as directors of Ventus 2 VCT plc.

David Pinckney

Chairman

21 June 2011

Investment Manager's Report

Climate Change Capital Limited, the Company's Investment Manager, presents its annual review of the Company's investments.

Ordinary Share portfolio

A summary of the valuations and unrealised gains and losses in the Company's ordinary share investments is given below.

Q - Investment complies with VCT regulations on qualifying holdings.

PQ - Part of the investment complies with VCT regulations on qualifying holdings.

* - A company in which Ventus 2 VCT plc's ordinary share fund has also invested. The Company and Ventus 2 VCT plc are managed by Climate Change Capital Limited.

Reassessment of energy yield projections for Fenpower Limited, Craig Wind Farm Limited, A7 Greendykeside Limited and A7 Lochhead Limited

Projected energy yield is a key driver of the valuation of the Company's operational wind assets. The Company has adopted a policy of reassessing the wind yield projections for each of its operational sites after a period of three years of operation. The collection of operational data over a sufficient period allows a more accurate analysis of the projected energy yield. The Company will also re-evaluate energy yield assumptions where it becomes aware of possible errors inherent in the methodology prevalent at the time that previous wind yield analyses were prepared.

The Company has identified that there was a potential issue in the original wind yield assessments for the four investee companies listed above and in line with its policy determined that it was appropriate to carry out new wind yield analyses for these sites using operational data.

An explanation of that issue and its impact is set out below. It is important to make clear that the issue described below is inherent to a certain degree in a significant proportion of wind yield analyses that were prepared before the wind resource assessment industry recognised the issue and corrected its methodologies to deal with it. It is an industry wide issue and is not specific to the projects in which the Company has invested. It is not a matter that was discoverable through due diligence; consideration of the impact of the data from the years in question was not part of the methodology prevalent in the industry at the time that the original energy yield reports were prepared. 

It is necessary to give some detail on the methodology behind pre-construction wind yield assessments in order to give the reader the context of the issue. The central aim of a wind resource assessment is to provide a robust long term estimation of the mean wind speed at a particular site. The projected mean wind speed is then applied to other site specific considerations to deliver an energy yield projection.

The starting point for understanding the wind climate at the site is usually data collected through on- site measuring equipment. A short period of on-site data is normally not sufficient to form a reliable estimation of the long term wind speed, and so it is common to refer to longer term data available from another reference point. This usually involves gathering wind speed data from a suitable meteorological station and, through a correlation exercise, applying it to the on-site data to provide a long term wind speed estimation for the site.

It is now understood that the inclusion of historic data from 1990 to 1995 in the long term modelling of future wind yield may lead to an overstatement of the projected long term wind speed. Where those years form a significant part of the data set used, this may result in the long term wind speed projection being overstated. We have identified that the wind yield reports for the projects listed above included data from this period and so it was appropriate to correct for this issue. It should be noted that the issue is not relevant to the wind yield assessments carried out for Greenfield Wind Farm Limited and Achairn Energy Limited as data from 1990 to 1995 was not included in the reference data set. Neither of the sites has been operational for three years and so it is not thought appropriate to reassess the energy yield projections at these sites at this time.

Firefly Energy derives a significant part of its revenues from power purchase agreements that it holds with a number of operational wind farms. A7 Greendykeside Limited, Fenpower Limited and Craig Wind Farm Limited are counterparties to Firefly Energy Limited power purchase agreements and the fall in expected energy yield from those projects has impacted the projected revenues to Firefly Energy Limited from the power purchase agreements.

The results of that review have led to a drop in projected long term energy yields compared to previous assumptions. The impact of the changes in value of these investments on the Company's ordinary share fund net asset value since 31 August 2010 is presented below:

The Company's investments in these projects are valued by discounting the expected returns from the equity and debt instruments that it holds in each investee company and expected returns are directly linked to projected electricity generation levels. The drop in projected energy yield has therefore had an impact on the Company's valuation of its holdings in these projects as set out in the table above. The analysis is also relevant to Firefly Energy Limited as its valuation in part depends upon the projected levels of generation from the projects with which it holds power purchase agreements (which include Fenpower Limited, Craig Wind Farm Limited and A7 Greendykeside Limited).

Wind conditions in 2010

Wind speeds across the United Kingdom in 2010 were significantly lower than the long term average. Wind speeds naturally vary from year to year but the past year represented a significant departure from the long term mean.

Low wind speeds equate to lower revenues from operational wind assets. In a typical project finance model a drop in revenues results in a levered fall in the cash available to pay dividends. This period of unusually low wind speeds has had a significant impact on budgeted cash receipts from the operational wind farm investments in the Company's portfolio. The same is true of Firefly Energy Limited, as its revenues in part depend on the number of megawatt hours generated by the projects with which it holds power purchase agreements. This has impacted the final dividend that the Company is able to pay to its shareholders for the financial year ended 28 February 2011. One year of unusually low wind speeds does not however indicate that there is a fundamental shift in the UK's wind climate. Reports of the performance of the Company's wind farms against projections for 2011 will be given in the Company's Half-yearly Report.

Dividend target

The stated dividend objective of the Company is to pay its ordinary shareholders an annual dividend of between 6p and 10p per ordinary share when the companies in which it invests are fully operational. All of the investee companies which were structured to deliver a yield to the Company are now operational, and whilst no revenues can presently be expected from Redimo LFG Limited, the Investment Manager is confident that the dividend objective can be met in the near term if the operational wind farm investments perform in line with current expectations, including expectations about projected wind yields, and the other investments that the Company holds become cash generative or are realised at a profit.

Valuation of Investments

It is the accounting policy of the Company to hold its investments at fair value. In this report, the Company's investments in investee companies which operate an asset and have passed an initial satisfactory operational period are valued using a discounted cash flow methodology. The key assumptions that have a significant impact on discounted cash flow valuations for these assets are the discount rate used, the price at which the power and associated benefits can be sold, the amount of electricity the investee companies' generating assets are expected to produce and operating costs.

The fair value of the Company's investments in project companies which have not passed an initial satisfactory operational period, or are engaged in seeking planning permission, are determined to be the investment cost subject to a periodic impairment review. The Company has resolved that it is appropriate to value its holding in Broadview Energy Limited on the basis of the price paid by investors in a recent capital raising round.

Summary of Investments

Details of the valuations of the investments held by the ordinary share fund are shown in the table above.

Operational wind farms

Set out below is a brief summary of the performance of the Company's operational wind assets. The general theme is that the projects are achieving sound availability figures, and so are making good use of the wind resource available to them. The comparisons of actual generation versus budgeted generation for Fenpower Limited, Craig Wind Farm Limited, A7 Greendykeside Limited and A7 Lochhead Limited are given against budget figures revised to take account of the recent wind yield analyses.

Fenpower Limited

Availability has improved significantly in the past year due to the resolution of technical issues with the phase one turbines. Despite that, generation for the year ended 28 February 2011 was 15% below the revised budget, due to unusually low wind speeds.

The Company received dividends and mezzanine interest cash payments totalling £283,000 from Fenpower Limited in the year ended 28 February 2011, representing a 13.7% cash yield on the original amount invested.

Craig Wind Farm Limited

In the year ended 28 February 2011 the project exceeded its target availability but, despite the improvement in availability against previous years, it generated 12% less electricity than its revised budget due to unusually low speeds throughout 2010. The company continues to pursue the possibility of adding further turbines to the site.

The Company received dividends and mezzanine interest cash payments totalling £196,000 from Craig Wind Farm Limited in the year ended 28 February 2011, representing a 9.4% cash yield on the original investment.

A7 Greendykeside Limited

In the year ended 28 February 2011 availability was above expected levels. Low wind speeds however impacted the total generation, which was 16% below the revised budget.

The Company received dividends and mezzanine interest cash payments totalling £142,500 from A7 Greendykeside Limited in the year ended 28 February 2011, representing a 9.3% cash yield on the original investment.

Achairn Energy Limited

The project experienced some technical difficulties with part of the grid connection system in late 2010 and was unable to export electricity for almost four weeks whilst a faulty component was removed and a temporary solution installed to allow the wind farm to generate and export. The component was successfully repaired and replaced during December 2010 and the wind farm restored to its normal configuration. This, in addition to lower than expected wind speeds, meant that generation was 29% below budget in the year ended 28 February 2011.

The Company received dividends and mezzanine interest cash payments totalling £47,000 from Achairn Energy Limited in the year ended 28 February 2011, representing a 10.3% cash yield on the original investment.

The carrying value of the Company's investment in Achairn Energy Limited increased by £76,000 during the year ended 28 February 2011. This was due to an increase in the forecast power prices assumed in the discounted cash flow analysis used to value the investment. The past performance issues experienced by the company are not relevant to its carrying value as the technical issues described above are not relevant to the valuation.

A7 Lochhead Limited

The project met its availability expectations during the year ended 28 February 2011. Low wind speeds meant that generation was 20% below the revised budget.

The Company received dividends and mezzanine interest cash payments totalling £87,000 from A7 Lochhead Limited in the year ended 28 February 2011, representing an 8.7% cash yield on the original investment.

Greenfield Wind Farm Limited (parent company of Muirhall Windfarm Limited)

Construction of this 12.3MW wind farm was substantially completed in February 2011 five weeks later than expected and the project has begun to export electricity at levels within the range of expectations. The Company will report in more detail on operations at this site in the Half-yearly Report.

Operational companies in the wind sector

Broadview Energy Limited

Broadview Energy Limited continues to expand its portfolio of wind farm sites and now has one fully operational three turbine site in Aberdeenshire. A four turbine site in Leicestershire is due to become fully operational this summer. It holds consent on two further projects which together have approval to erect eight turbines. It also has a portfolio of seven other sites at various stages in the planning process.

Broadview Energy Limited undertook a further capital raising round in June 2010, raising a further £880,000 by issuing 352,000 new ordinary shares at £2.50 per share. The Company did not participate in this funding round but it has adopted the price of this subscription to value its shareholding in Broadview Energy Limited.

Firefly Energy Limited

The value of the Company's investment in Firefly Energy Limited has fallen by £100,000 since February 2010 because, as explained above, the fall in expected energy yields from the projects with which it has power purchase agreements has impacted the company's projected revenues.

Firefly Energy Limited has had success in the past year rolling out the provision of power purchase agreement and management accounting services to renewable energy project operators. The management team will look to build on the achievements of the past year by generating further new business.

The Company received loan interest cash payments totalling £191,000 from Firefly Energy Limited in the year ended 28 February 2011, representing a 9.5% cash yield on the original investment.

Other operational investee companies

Redimo LFG Limited

The operating environment for the Redimo LFG Limited landfill gas generation portfolio continues to be challenging and whilst a great deal of effort has been made over the last two years to stabilise operational performance, the levels of contamination in the gas continue to cause problems for the generators at the two largest sites. This continues to impact the amount of power being generated. The investee company retains the support of its lending bank and has recently renewed its energy offtake agreements on marginally better terms. Rising forward projections for power prices give some scope for improved financial performance, but the outlook for the company remains uncertain. That being the case it has been resolved to maintain the carrying value of the Company's investment at zero. The Company did not receive cash proceeds from Redimo LFG Limited during the year.

Development and pre-planning investments

Shareholders should note that the following investments are not structured so as to be qualifying holdings for the purposes of the VCT regulations.

Redeven Energy Limited

Redeven Energy Limited continues to work on the development of its portfolio of wind farm sites in East Anglia. Planning permission is held on two schemes totalling seven turbines. Progress on the larger of these two schemes, which has permission to erect five turbines, has been delayed as a result of the need to vary one of the planning conditions to remove an unhelpful restriction on turbine features. The third planning application for a two turbine project was refused in January 2011 and it is likely that an appeal will be lodged.

Spurlens Rig Wind Limited

A planning application for this proposed six turbine site was submitted in December 2010. It is expected that the outcome will be determined by the end of September 2011.

Wind Power Renewables Limited

Planning determinations are expected shortly on a pair of two turbine schemes in the East Anglia region. An application for a third site was refused in December 2010 and is not being appealed. The company has three further sites secured under option but these will not be taken forward until, at the earliest, the time at which planning determinations have been made on the other two sites.

Given that progress with the sites for which applications have not been submitted is uncertain, and that one of the three submissions has been refused and will not be appealed, it was considered appropriate to reflect these matters in the value attributed to this investment. Accordingly it is resolved to write down the enterprise value of the company by one third, with resultant write down in the value of £77,000 of the equity held by the Company.

Olgrinmore Limited

A planning application for two wind turbines at Olgrinmore Moss, near Scotscalder in Caithness was submitted in December 2009 and subsequently refused planning permission in May 2010. A 'Notice of Review' appeal was filed with the Council in August 2010 to appeal against this decision, which was narrowly dismissed by three votes to two in December 2010. The development team is reviewing the options to re-apply for permission to build a smaller project on the same site which would address the previous reasons for refusal. The viability of the project is uncertain however and so it was felt appropriate to write down the value of the Company's holding from £46,000 to zero.

"C" share portfolio

A summary of the valuations and unrealised gains and losses in the Company's "C" share investments is given below.

There were no valuation movements recognised during the year in these investments.

PQ - Part of the investment complies with VCT regulations on qualifying holdings.

* - A company in which Ventus 2 VCT plc's "C" share fund has also invested. The Company and Ventus 2 VCT plc are managed by Climate Change Capital Limited.

The Investment Manager continues to source, appraise and progress suitable investment opportunities in which to deploy the balance of the "C" share funds. The Investment Manager has secured exclusivity to invest in two consented wind farm developments which together would comprise 24 MW of generating capacity. It is expected that long term investments will be made into those projects in the next few months. The Investment Manager expects the "C" share funds to be substantially invested by the end of 2012.

The near term strategy is to generate income from short term loan investments in development and operational companies whilst investments into suitable longer term opportunities are finalised. Those investments are typically secured over the investee's assets. The interest received or accrued on these loans helps to defray the "C" share fund's allocation of the Company's running costs. Other than short term loans, the remaining funds not yet deployed in long term investments have been held in government treasuries and cash deposits in line with the Company's stated policy for managing such funds. But with interest rates on cash at historic lows it has not been possible to generate sufficient income to support the payment of a dividend.

Summary of Investments

Details of the valuations of the investments held by the "C" share fund are shown in the table above.

Operational wind farms

Details of Greenfield Wind Farm Limited (parent company of Muirhall Windfarm Limited) are given above as both the Company's ordinary and "C" share funds have invested in the company.

Development, developers and pre-planning investments

Shareholders should note that the following investments are not structured so as to be qualifying holdings for the purposes of the VCT regulations.

Iceni Renewables Limited

Through Iceni Renewables Limited the Company has invested in and committed to provide further funding to two wind energy development projects in Scotland. The total investment and commitment is £400,000. Scoping and pre-planning work is underway on both sites. The first, named Craigannet, is likely to be submitted for planning permission this year as a six turbine scheme. The other site is known as Merkins and is likely to be submitted as a ten turbine scheme later this year. Lomond Energy Limited is the development manager of these sites.

Renewable Power Systems Limited

The Company's "C" share fund has provided a loan facility of £350,000 to Renewable Power Systems Limited, a company which specialises in the development and operation of energy from waste generating plants.

This facility is structured as a short term investment to provide Renewable Power Systems with development capital and is scheduled to be repaid by 30 June 2011.

BEGL 2 Limited and BEGL 3 Limited

The Company has provided medium term loan facilities of £500,000 to each of BEGL 2 Limited and BEGL 3 Limited.

These companies are subsidiaries of Broadview Energy Limited. BEGL 2 Limited is the development company for a fully consented four turbine wind farm in Teesside and BEGL 3 Limited is the development company for a fully consented five turbine wind farm in Leicestershire. The BEGL 3 Limited site is due to complete construction in summer 2011 and the BEGL 2 Limited site will commence construction in the second half of 2011 and is expected to become operational in the first half of 2012.

In each case the loans have been secured against the relevant development company and will be used to meet construction and post consent development costs alongside long term bank loan facilities.

The loans, together with accrued interest, are to be repaid in full no later than 30 June 2012.

Osspower Limited

To support the development of Allt Fionn Ghlinne, the first of Osspower Limited's schemes to begin construction, the Company provided Osspower Limited with a £300,000 short term loan facility from the "C" share fund which was extended to £900,000 in April 2011. Of the facility, £300,000 was drawn before the year end and a further draw down of £350,000 was made in April 2011. Osspower Limited secured debt finance facilities of £6.45 million from The Co-operative Bank plc in May 2011 and repaid £650,000 to the Company, being the total principal of the loan drawn down on the facility at that time, and paid the interest of £17,000 which had accrued to the date of repayment. The facility has now been cancelled.

EcoGen Limited

The Company has provided a medium term loan facility of £410,000 to EcoGen Limited.

The facility has been used to provide EcoGen Limited with working capital and to repay a loan note facility to certain lenders. The facility has also been used by EcoGen Limited to reorganise its share capital structure.

The loan, together with accrued interest, is to be repaid in full no later than 31 December 2012. It, together with the matching loan made by the "C" share fund of Ventus 2 VCT plc, is secured against EcoGen Limited's one third shareholding in Fenpower Limited, a company in which the Company's ordinary share fund holds an investment (please refer to the section in the ordinary share report above for further details).

Allt Dearg Wind Farmers LLP

This LLP has consent to develop a 12 turbine site near Lochgilphead, Scotland. The "C" share fund has provided a secured short term loan facility of £300,000 to fund pre-financial close project expenditure. The Company has secured exclusivity to make a long term investment in the project. This investment was made subsequent to 28 February 2011 and so does not appear in the table above.

Top Ten Investments

The details of the top ten investments held by the ordinary share fund and all the investments held by the "C" share fund at 28 February 2011, by value, are set out in the tables below:

Ordinary Share Fund

"C" Share Fund

ABB - Abbreviated accounts

Basis of valuation

DCFU - Discounted future cash flows from the underlying business excluding interest earned to date

PRI - Price of recent investment reviewed for impairment

* The ordinary share fund and "C" share fund have shareholdings in Greenfield Wind Farm Limited of 8.35% and 12.50% respectively, therefore the Company's aggregate shareholding is 20.85%. Greenfield Wind Farm Limited was incorporated on 14 December 2009. The accounts for Greenfield Wind Farm Limited's first accounting period have not been prepared as yet.

** BEGL 3 Limited was incorporated on 30 April 2010. The accounts for BEGL 3 Limited's first accounting period have not been prepared as yet.

Investment Policy

The Company is focused on investing in companies developing renewable energy projects with installed capacities of two to twelve megawatts, although larger projects may also be considered. Given the target investment size, investments will generally be in companies developing projects initiated by specialist small-scale developers and smaller projects which are not attractive to large development companies and utilities.

Asset Allocation

The Investment Manager seeks, primarily, to allocate the Company's investments in equity securities and loan stock of companies owning renewable energy projects with full planning consent, ready for construction of the project to commence or whose assets are already operational. Up to 10% of net proceeds raised from the initial share offer and the "C" share offer, respectively, may be allocated to development funding for early stage renewable energy projects prior to planning permissions being obtained.

The Company's policy is to maintain cash reserves of at least 5% of net proceeds raised from the initial share offer and the "C" share offer for the purpose of meeting operating expenses and purchasing its shares in the market. Circumstances may arise which would require the Company to hold less than 5% of net proceeds in cash for a limited period of time.

In order to comply with VCT requirements, at least 70% by value of the Company's investments are required to be comprised of qualifying investments.

The Company typically owns 25% to 50% of the equity share capital of each investee company and a portion of its investment in each investee company may be in the form of loan stock.

The Company's uninvested funds are placed on deposit or invested in short-term fixed income securities until suitable investment opportunities are found.

Risk Diversification

The geographical focus of the portfolio is the UK and the majority of investments made to date are in the wind sector. Funds are invested with a range of small-scale independent developers so project risk is not concentrated on only a few developers. The portfolio contains projects at different stages of the asset lifecycle, ranging from pre-planning to construction and then into operation. Investments are also made in technologies that have no inherent operational correlation with the performance of wind farms. Investments are made via subscriptions for new share capital or via loan stock instruments in order to secure a negotiated level of return from the project. The majority of investments are made in special purpose companies set up specifically to develop each project and bank debt financing is non-recourse to the Company.

The returns from projects depend on the UK Government's continued support for renewable energy, primarily under the Renewables Obligation and Feed-in Tariff mechanisms. The effects of any negative change to this policy are mitigated by the UK Government's historic practice of grandfathering financial support mechanisms for existing assets. This risk is further mitigated by the Company typically negotiating fixed and/or floor price mechanisms into the power purchase agreements entered into by project companies for the sale of their generated output.

Gearing

The Company does not intend to borrow funds for investment purposes. However the Company is exposed to gearing through its investee companies which typically fund the construction costs of each project through senior bank debt finance. The Investment Manager is involved in assisting investee companies in negotiating the terms of this finance to ensure competitive terms are achieved. The interest rate is typically fixed via an interest rate swap for the duration of the bank loan so that investee companies are not exposed to changes in market interest rates.

To the extent that borrowing should be required by the Company for any purpose, the Directors shall restrict the borrowings of the Company. The aggregate principal amount at any time outstanding in respect of money borrowed by the Company shall not without the previous sanction of an ordinary resolution of the Company exceed a sum equal to 10% of the adjusted share capital and reserves of the Company in accordance with its Articles.

Maximum Exposures

In order to gauge the maximum exposure of the funds to various risks, the following can be used as a guide:

i) Investments in qualifying holdings

70-95% of the funds will be invested in qualifying holdings no later than three years after the date that provisional approval by HM Revenue & Customs of the Company's status as a VCT becomes effective. The relevant compliance date for the initial share offer was 1 March 2009 and for the first "C" share offer and ordinary share "top-up" offer is 1 March 2012. The relevant compliance date for the second "C" share offer is 1 March 2013.

For the purposes of the 70% qualifying holdings requirement, disposals of qualifying investments for cash may be disregarded for a period of six months. Where a VCT breaches one or more of the requirements due to factors outside of its control, it may apply to HM Revenue & Customs for a determination that the breach will be disregarded for a period of 90 days while the breach is remedied.

ii) Concentration limits

Under VCT regulations no more than 15% of the Company's total assets should be in a single investee company at the time the investment is made in that investee company.

iii) Investments in pre-planning projects

In accordance with the Company's investment policy, a maximum of 10% of the net funds raised from each of the initial share offer and "C" share offer respectively may be invested in pre-planning projects.

Market outlook

In May 2011, the UK Government agreed to adopt some of the most ambitious carbon reduction targets in the world by setting a carbon budget of halving greenhouse gas emissions from 1990 levels by 2025. However, a series of Government policy announcements and initiatives over the last year have left the UK green energy market in a state of uncertainty as to the shape of its future. While the Government continues to confirm its commitment to the green agenda, its recent actions have, perhaps only in the short term, led to a degree of investment hiatus.

The most significant test for the sector remains Government's Electricity Market Reform ("EMR") proposals, which aim to provide a framework for decarbonisation, renewable energy, security of supply and affordability. The consultation document was wide in its scope and set challenging timescales that the market remains doubtful can be achieved. The intention is to support the green energy sector while providing best value, market based support for the consumer. At the date of this report the mechanisms that will support such an idea remain uncertain and consequently it cannot be determined exactly how this will support the renewable energy market. However, while the EMR framework is clearly an attempt to bring nuclear power into the subsidy mix, the industry does not feel that the intention is to limit the role that renewables can make in the future.

Initial consultation rounds for the EMR indicate that the Renewables Obligation will be grandfathered in a form that will sustain existing accredited generating plant, although there is a possibility that a rump market could develop. How grandfathering will work remains uncertain but early indications are that new projects will be eligible for accreditation until at least 2017 with grandfathering for project lives of 20 years.

The Localism Bill continues its passage through the Parliamentary process in an attempt to provide more control over housing and planning decisions at a local level. Clearly there is potential for local decisions to be made without regard to broader national policies and a consequent fall in the number of successful renewable energy planning applications. It is inevitable that there will be a refocus on local community engagement from developers. While it would be easy to be negative about the Bill, the alternative view could be that certain communities would welcome the installation of renewable energy assets, given they can provide a valuable local source of funding for communities struggling during difficult economic times.

The April 2011 budget announcement was mixed from the standpoint of the VCT industry. A proposed increase in the gross asset limit for qualifying investments to £15 million and the limit on the amount that an investee company can receive from a VCT to £10 million were well received. But at the same time the ability of VCTs to invest in Feed-in Tariff ("FiT") projects has been hampered by the announcement that investment in companies which derive a substantial part of their income from FiTs will not be classified as a qualifying investment for the purposes of the VCT regulations. This will not completely prohibit investment in FiT schemes but any such opportunity will have to be considered carefully against the requirement that at least 70% of the Company's investments are qualifying for the purposes of the VCT regulations.

The banking market for renewable energy projects can generally be described as relatively stable. No new entrants have been seen over the last year and lending margins and leverage packages remain consistent with the preceding couple of years. Although turbine prices continue to decline, fluctuations in the Sterling / Euro exchange rate make the timing of purchasing decisions challenging. On a more positive note, wholesale electricity prices have begun to rise for near term delivery and longer term projections are showing positive signs.

Climate Change Capital Limited

Investment Manager

21 June 2011

Directors' Report

The Directors present their Annual Report and the audited Financial Statements for the Company's financial year ended 28 February 2011.

Business review

The business review has been prepared in accordance with the requirements of Section 417 of the Companies Act 2006 and best practice. The purpose of the review is to provide shareholders with a summary of the business objectives of the Company, the Board's strategy to achieve those objectives, the risks faced, the regulatory environment, the key performance indicators ("KPIs") used to measure performance and the Company's status as a going concern.

The Company's business objectives are set out in the Investment Policy in the Investment Manager's Report above.

Principal activities and status

The Company is an investment company, as defined in Section 833 of the Companies Act 2006 and has received approval as a Venture Capital Trust from HM Revenue & Customs for the year ended 28 February 2010. The Directors consider that the Company has conducted its affairs in a manner to enable it to continue to comply with Section 274 of the Income Tax Act 2007. The Company is a public limited company, incorporated in England and listed on the London Stock Exchange. The registered address of the Company is The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

The Company has no employees other than the Directors.

The Company's business during the year and future developments are reviewed in the Chairman's Statement and the Investment Manager's Report.

Companies Act 2006 disclosures: environmental matters

The Board recognises the requirement under Section 417(5) of the Companies Act 2006 to detail information about environmental matters (including the impact of the Company's business on the environment). It is the specific purpose of the Company to invest in companies that develop and operate assets which generate energy from renewable sources. Through its investment policy, the Company is committed to mitigating the impact of climate change by contributing to the transition to a low carbon economy and a cleaner environment.

Key performance indicators

Results and dividends

1 The "per share" value is determined in respect of the weighted average number of shares in issue during the year, except in respect of the dividends paid in the year, which is determined on the basis of the number of shares eligible to receive dividends at the time the dividends were paid.

2 The total expense ratio represents the total operating expenditure during the year (excluding irrecoverable VAT) as a percentage of the net asset value of the Company at year end.

3 The "per share" value is determined in respect of the number of shares in issue at year end, except in respect of the dividends paid, which is determined on the basis of the number of shares eligible to receive dividends at the time the dividends were paid.

4 The total shareholder return represents the net asset value of the Company at year end plus the cumulative dividends paid by the Company since incorporation.

The performance of the Company is reviewed in the Investment Manager's Report, including the Company's compliance with HM Revenue & Customs VCT regulations. The Company's prospects are considered in the Outlook section of the Chairman's Statement.

Principal risks

Other than the inherent risks associated with investment activities, which are discussed in the Investment Manager's Report, the risks described below are those which the Directors consider to be material:

·; Failure to meet and maintain the investment requirements for compliance with HM Revenue & Customs VCT regulations.

The Board mitigates this risk by regularly reviewing investment management activity with appropriately qualified advisers and by obtaining pre-approval from HM Revenue & Customs for each qualifying investment.

·; Inadequate control environment at service providers.

The Board mitigates this risk by only appointing service providers of a high standing under agreements that set out their responsibilities and by obtaining assurances from them that all exceptions have been reported to the Board. See the Corporate Governance Statement for discussion of a breach of internal control within the Investment Manager relating to Ventus 2 VCT plc. The Board is currently reviewing the internal control procedures of the Investment Manager. Note that the breach has had no financial impact on the Company.

·; Non-compliance with the Listing Rules of the Financial Services Authority, Companies Act Legislation, HM Revenue & Customs VCT regulations and other applicable regulations.

The Board mitigates this risk by employing external advisers fully conversant with applicable statutory and regulatory requirements who report regularly to the Board on the Company's compliance.

Going concern

The Company has significant cash and liquid resources and the major cash flows are within the Company's control (namely investments and dividends) or are reasonably predictable (namely the operating expenses). The Company is able to forecast cash inflows comprising proceeds from investments to a reasonable degree. The Board has a reasonable expectation that the Company is able to continue in operational existence for a period of at least twelve months from the date of this report. The Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing the accounts.

The liquidity risks and details of the Company's policy for managing its financial risks are shown in note 16. The Company's investment activities are described in the Investment Manager's Report and its performance is reviewed in the Directors' Report.

Share capital

At a general meeting held on 2 March 2009, the Company passed several resolutions concerning the Company's share capital:

Authorised share capital

The authorised share capital was increased from £10,000,000 to £15,000,000 by the creation of 20,000,000 "C" shares of 25p each. At 28 February 2011, the Company had authorised share capital of £15,000,000 in total which was represented by 40 million ordinary shares of 25p each and 20 million "C" shares of 25p each being 67% and 33% of the Company's authorised share capital respectively.

Allotted, called and fully paid up shares

As at 28 February 2011, the Company had allotted, called and fully paid up shares in two share funds, of which 16,384,793 shares were ordinary shares of 25p each and 11,329,107 were "C" shares of 25p each. These shares represented 59% and 41% of the Company's issued share capital respectively.

Authority to allot

The Directors were authorised to allot relevant securities (in accordance with Section 551 of the Companies Act 2006) up to a maximum aggregate nominal amount of £6,250,015. This authority expires on 1 March 2014.

Disapplication of pre-emption rights

The Directors are empowered to allot equity securities for cash (further to the authority referred to above) without first offering such securities to existing shareholders in proportion to their shareholdings - such power being limited to the allotment of securities only in certain, defined circumstances. This power expires on 1 March 2014.

Authority to repurchase shares

At the Annual General Meeting ("AGM") held on 13 July 2010 the Company renewed its authority to repurchase up to 14.99% of its own issued ordinary share capital and up to 14.99% of its own issued "C" share capital. This authority will be renewed at the AGM to be held on 27 July 2011.

Issued share capital

During the year ended 28 February 2011, 4,404,421 "C" shares were allotted.

Rights and restrictions attaching to shares and powers of the Board of Directors

As set out in the Company's Articles of Association, subject to the provisions of the Companies Act 2006 and to any special rights conferred on the holders of any other shares, any share may be issued with or have attached to it such rights and restrictions as the Company may by ordinary resolution decide or, if no such resolution has been passed or so far as the resolution does not make specific

provision, as the Board may decide. The business of the Company shall be managed by the Board of Directors which may exercise all the powers of the Company, subject to the provisions of the Companies Act 2006, the Memorandum of Association of the Company, the Company's Articles of Association and any special resolution of the Company. Copies of the Articles of Association can be obtained from Companies House in the UK or by writing to the Company Secretary.

CREST

The Company's shares are available for trading in CREST, the settlement system for uncertified stocks and shares.

Dividends

The dividend for the half-year to 31 August 2010 of 1.50p per ordinary share was paid on 12 January 2011 to ordinary shareholders on the register on 10 December 2010. The Directors recommend a final dividend of 1.60p per ordinary share to be paid on 10 August 2011 to ordinary shareholders on the register on 15 July 2011. This gives a total dividend for the year of 3.10p per ordinary share. Note 7 of the Financial Statements gives details of the dividends declared and paid in the current year and prior financial year. No dividends have been declared or paid to "C" shareholders.

Directors and their interests

The Directors who held office during the year and their interests in the Company were as follows:

Alan Moore, Paul Thomas and Colin Wood resigned on 13 July 2010. David Williams and Charles Conner were appointed on 13 July 2010.

All the Directors are non-executive and all are independent, except Charles Conner who is a part-time employee of the Investment Manager. Paul Thomas was not considered to be independent as he was a member of the Investment Manager's Investment Committee.

From September 2010 a director of a VCT will not be considered independent with respect to that VCT if he or she is also a director of another VCT managed by the same investment manager. The reconstitution of the Board which took place at the AGM held on 13 July 2010 ensures that the Company complies with this rule.

As a part-time employee of the Investment Manager, Charles Conner is not considered independent.

In accordance with the Company's Articles of Association and the Financial Reporting Council's (FRC) 2008 Combined Code and the Listing Rules of the Financial Services Authority, Charles Conner and David Williams will retire at the AGM and being eligible, will offer themselves for re-election. As Mr Conner and Mr Williams have acted in the interests of the Company throughout the period of their appointment and demonstrated commitment to their roles, the Board recommends they be re-elected at the AGM.

Biographical information on the Directors is shown below. The terms of the Directors' appointment and replacement are set out in the Corporate Governance Statement.

Substantial interests

As at 28 February 2011 and the date of this report, the Company was aware that Heartwood Nominees held shareholdings and voting rights of 11.7% of the Company's ordinary share capital. The Company was not aware of any other individual shareholding exceeding 3% or more of the voting rights attached to the Company's ordinary or "C" share capital.

Investment management, administration and performance fees

Climate Change Capital Limited, whose ultimate parent undertaking is Climate Change Capital Group Limited, is the Investment Manager of the Company and provides management and other administrative services to the Company. Climate Change Capital Limited also provided similar services to Ventus 2 VCT plc and Ventus 3 VCT plc during the financial year. Ventus 3 VCT plc was placed into members' voluntary liquidation on 6 May 2010. The principal terms of the investment management agreement are set out in note 3 of the Financial Statements.

Investment Manager

As noted in the Chairman's Statement, in light of the recent resignation of the lead investment manager, the Board is in discussions with the Investment Manager on the scale and nature of future staffing resources. The Board is also in the process of investigating the background to and implications of the breach of internal control within the Investment Manager. As at the date of this Report, the Board's deliberations on these matters are at an early stage. Therefore the Board is unable at the present time to express a view as to whether the continuing appointment of the Investment Manager with the current resourcing and on the terms agreed is in the best interests of the shareholders. A further announcement will be made in due course; in the meantime, the Investment Manager will continue to manage the Company's investment programme. It should be noted that the breach of internal control within the Investment Manager has had no financial impact on the Company.

Company Secretary

The City Partnership (UK) Limited has been appointed to provide company secretarial services to the Company as set out in the company secretarial services agreement. For these services the Company Secretary receives an annual fee of £15,000 plus VAT. The company secretarial services agreement is for an initial period of three years from 1 February 2009, terminable thereafter by either party giving not less than six months notice in writing.

VCT monitoring status

The Company retains PricewaterhouseCoopers LLP to advise on its compliance with the taxation requirements relating to VCTs.

Financial instruments

The Company's financial instruments comprise investments in unquoted companies, government securities and cash, trade and other receivables and trade and other payables. Further details are set out in note 16 of the Financial Statements.

Supplier payment policy

The Company's payment policy is to agree terms of payment before business is transacted and to settle accounts in accordance with those terms. During the year, all suppliers were paid within the terms agreed. The creditor days as at 28 February 2011 were 5 days (2010: nil).

Directors' statement as to disclosure of information to the Auditor

The Directors who were in office on the date of approval of these Financial Statements have confirmed that, as far as they are aware, there is no relevant audit information of which the Auditor is unaware. Each of the Directors has confirmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the Auditor.

Auditor

A resolution to re-appoint PKF (UK) LLP as the Auditor of the Company will be proposed at the forthcoming AGM.

Details of the non-audit services provided to the Company by the Auditor, are set out in note 4 of the Financial Statements.

Annual General Meeting

Enclosed with this Annual Report and Financial Statements is the Notice of Annual General Meeting ("AGM") of the Company (or any adjournment thereof) to be convened for Wednesday,27 July 2011 at 12 noon. A copy of the Notice is set out at the end of this announcement (the "Notice"). A Form of Proxy for use in connection with the AGM has been issued with this document.

The business of the meeting is outlined below:

Resolution 1 - Annual Report and Financial Statements

The Directors are required to present to the AGM the Annual Report and Financial Statements for the financial year ended 28 February 2011.

Resolution 2 - To declare a final dividend

The final dividend cannot exceed the amount recommended by the Directors and can only be paid after the members at a general meeting have approved it. The Directors recommend a final dividend of 1.60p per ordinary share payable on 10 August 2011 to the holders of ordinary shares registered at the close of business on 15 July 2011, which will bring the total dividend for the year to 3.10p per share.

Resolution 3 - Directors' Remuneration Report

Under Regulation 11 and Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, the Company is required to produce a Directors' Remuneration Report for each relevant financial year and to seek shareholder approval for that report at the AGM. The Directors' Remuneration Report is set out below.

Resolution 4 - Re-election of Director

Mr Charles Conner retires in accordance with Listing Rule 15.2.13A and, being eligible, offers himself for re-election.

Resolution 5 - Re-election of Director

Mr David Williams retires as he is subject to re-election by shareholders at the first AGM after appointment in accordance with the Company's Articles of Association and, being eligible, offers himself for re-election.

Resolution 6 - Re-appointment of Auditor

This resolution proposes that PKF (UK) LLP be re-appointed as Auditor of the Company.

Resolution 7 - Remuneration of the Auditor

This resolution proposes that the Directors be authorised to set the Auditor's remuneration.

Resolution 8 - Renewal of authority for the Company to purchase its shares

This resolution which will be proposed as a special resolution, will, if passed, authorise the Company to purchase in the market up to 2,456,080 ordinary shares and 1,698,233 "C" shares, representing 14.99% of the current issued share capital of each class, at a minimum price of 25p per share and a maximum price, exclusive of any expenses, of not more than an amount equal to the higher of (a) 105% of the average of the middle market prices shown in the quotations for a share in The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that share is purchased; and (b) the amount stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation 2003. This authority will be effective until the earlier of the date of the AGM of the Company to be held in 2012 and the date which is 18 months after the date on which this resolution is passed (unless the authority is previously revoked, varied or extended by the Company in general meeting). The Board believes that it is beneficial to the Company for it to continue to have the flexibility to purchase in the market its own shares. However, the Board considers it in the best interests of all shareholders if the Directors use their authority to make share buy-backs sparingly. This resolution seeks authority from the shareholders for the Company to be authorised to do so when considered appropriate by the Directors. This resolution would renew the authority granted to the Directors at the last AGM of the Company. The minimum and maximum prices to be paid for the shares are stated in the Notice. Repurchases of shares will be made at the discretion of the Board and will only be made in the market at prices below the prevailing net asset value ("NAV") per share as and when market conditions are appropriate. Any shares which are repurchased in this way may be cancelled or held as treasury shares, which may then be cancelled or sold for cash, as determined by the Board. The Directors consider that this authority is in the interests of shareholders as a whole, as the repurchase of shares at a discount to the underlying NAV enhances the NAV of the remaining shares. The Directors are aware that the secondary market for the shares of VCT companies can be illiquid and that shares may trade at a discount to their NAV. The Company has established a special reserve out of which it may fund share buy-backs.

Action to be taken

Shareholders have been issued with a Form of Proxy for use in connection with the AGM. Shareholders are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it to the Company's Registrar, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU not less than 48 hours before the time of the AGM (excluding any time which is not part of a working day). Completion and return of a Form of Proxy will not preclude shareholders from attending and voting at the AGM in person should they subsequently decide to do so.

Recommendation

The Directors believe that all of the resolutions are in the best interests of the Company and its shareholders as a whole and, accordingly, unanimously recommend that you vote in favour of the resolutions, as they intend to do in respect of their own beneficial holdings of shares.

By order of the Board

The City Partnership (UK) Limited

Secretary

21 June 2011

Directors' Remuneration Report

This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2006 and the Large and Medium-sized Company and Groups (Accounts and Reports) Regulations 2008. An ordinary resolution to approve the report will be proposed at the AGM to be held on Wednesday, 27 July 2011.

Remuneration policy

The Board comprises three Directors, all of whom are non-executive. The Board does not have a separate Remuneration Committee as the Company has no employees, other than the non-executive Directors.

The Board considers that Directors' fees should reflect the time commitment required and the high level of responsibility borne by Directors and should be broadly comparable to those paid by similar companies. It is not considered appropriate that Directors' remuneration should be performance-related, and none of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as non-executive Directors of the Company.

The total remuneration of non-executive Directors has not exceeded the £100,000 per annum limit set out in the Articles of Association of the Company.

No Director has a contract of service with the Company. All of the Directors have been provided with letters of appointment. The Articles of Association provide that Directors shall retire and offer themselves for re-election at the first AGM after their appointment and at least every three years thereafter. A Director's appointment will continue unless terminated by the Company by giving three months written notice. A Director's appointment may also be terminated in certain other circumstances. No Director has been granted any options to acquire shares in the Company.

Directors' fees (audited information)

The following fees were paid to individual Directors in respect of the year ended 28 February 2011 with comparative figures for the year ended 28 February 2010:

Alan Moore, Paul Thomas and Colin Wood resigned on 13 July 2010.

Charles Conner and David Williams were appointed on 13 July 2010.None of the Directors received any other remuneration during the year.

Company performance

Due to the positioning of the Company in the market as a specialist VCT investing in companies that will develop, construct and operate small on-shore UK renewable energy projects, the Directors consider that, currently, there is no suitable company or index that can be identified for comparison. However in order to comply with the Directors' Remuneration Report Regulations 2002, the FTSE 100 Index has been used as a comparative.

Total shareholder return on ordinary shares

The graph demonstrates the change in value, in terms of Share Price Total Return1 and NAV Total Return2, based on £100 invested in ordinary shares on the date they were listed on the London Stock Exchange (15 March 2005) over the period to 28 February 2011 compared with the total return attributable to £100 invested in companies comprising the FTSE 100 Index over the same period. The graph shows there had been a net increase in shareholder value during the year in respect of the total shareholder return based on NAV, which is representative of the net upward revaluation of investments as detailed in the Investment Manager's Report and dividends paid. The graph also demonstrates the discount to NAV of the share price of the ordinary shares as the total shareholder return based on share price is lower than that based on NAV.

Total shareholder return on "C" shares

The graph demonstrates the change in value, in terms of Share Price Total Return1 and NAV Total Return2, based on £100 invested in "C" shares on the date they were listed on the London Stock Exchange (24 March 2009) over the period to 28 February 2011 compared with the total return attributable to £100 invested in companies comprising the FTSE 100 Index over the same period. There was slight increase in shareholder value during the year in respect of the total shareholder return based on NAV, which is attributable to the costs of the "C" share fund being shared over a larger capital base following the second "C" share offer. The graph also demonstrates the discount to NAV of the share price of the "C" shares as the total shareholder return based on share price is lower than that based on NAV.

1 Share Price Total Return is the return attributable to the share price of the shares held assuming that dividends paid in respect of those shares were immediately reinvested in shares at the market price as at the date the dividends were paid.

2 NAV Total Return is the net asset value of the shares held plus the cumulative dividends paid to those shares over the period in which they were held.

By order of the Board

The City Partnership (UK) Limited

Secretary

21 June 2011

Corporate Governance Statement

The Board of Ventus VCT plc has considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to member companies of the AIC.

The Company has reported against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the Combined Code), the Board considered that reporting against these principles and recommendations provides better information to shareholders.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except as set out below.

The UK Corporate Governance Code includes provisions relating to:

- the role of the chief executive

- executive directors' remuneration

- the need for an internal audit function.

For the reasons set out in the AIC Guide, and as explained in the UK Corporate Governance Code, the Board considers the first two provisions are not relevant to the position of the Company, being an externally managed investment company. The Company has therefore not reported further in respect of the first two provisions. However, in the light of the breach of internal controls within the Investment Manager relating to Ventus 2 VCT plc, the third provision is currently under review by the Board.

In addition to the provisions above, the Directors acknowledge that the Company did not comply with the AIC Code in its recommendation that the chairman of a company may not chair the Audit Committee. However, the Board considers that, in view of his extensive international auditing experience, it is appropriate and in the interests of shareholders that David Pinckney, as Chairman of the Company, should also chair the Audit Committee.

Board of Directors

For most of the year ended 28 February 2011 the Board consisted of three Directors, all of whom are non-executive. The Board ensures that it has the appropriate balance of skills, experience, length of service and knowledge of the Company amongst its Directors. Biographical information on the Directors, including the other significant commitments of the Chairman, is shown below.

Independence

In accordance with the Listing Rules of the Financial Services Authority, the Board has reviewed the independence of each Director and of the Board as a whole. Directors withdrew from discussions concerning their individual status. Mr Conner is an employee of the Investment Manager and, therefore, is not considered to be independent. In the last year Mr Pinckney has served as a Director of Ventus 2 VCT plc and Ventus 3 VCT plc. Ventus 3 VCT plc merged with Ventus 2 VCT under a scheme of reconstruction on 6 May 2010 and was placed into members' voluntary liquidation. Mr Pinckney resigned as a director of Ventus 2 VCT plc on 13 July 2010. Climate Change Capital Limited is also the Investment Manager of Ventus 2 VCT plc. No Directors of the Company are directors of another company managed by the Investment Manager. The Board believes that each Director, with the exception of Mr Conner, has demonstrated that he is independent in character and judgement and independent of the Investment Manager and therefore, that Mr Pinckney and Mr Williams are each considered independent.

Directors' responsibilities

The Board meets at least quarterly and is in regular contact with the Investment Manager between these meetings. In addition, there were a number of ad-hoc meetings, including meetings related to the approval of the Half-Yearly Report, the Interim Management Statements and the "C" share offer. The number of meetings of the Board and the Audit Committee held during the year and the attendance of the Directors is shown in the table below:

The figure in brackets indicates the total number of meetings at which the Director was expected

to attend. Alan Moore, Paul Thomas and Colin Wood retired on 13 July 2010. Charles Conner and David Williams were appointed on 13 July 2010.

All the Directors are equally responsible under the law for the proper conduct of the Company's affairs. In addition, the Directors are responsible for ensuring that the policies and operations are in the best interests of all the Company's shareholders and that the best interests of creditors and suppliers to the Company are properly considered.

The AIC Code states that the Board should have a formal schedule of matters specifically reserved to it for decision, to ensure that it has firm direction and control of the Company. The schedule of matters reserved to it includes the general investment strategy of the Company and the performance of the Company. The terms and conditions of appointment of non-executive Directors are available upon written application to the Company Secretary.

All Directors have direct access to the Company Secretary and independent advisers at the Company's expense provided prior clearance has been obtained from the Board. The Company Secretary is responsible to the Board for ensuring that Board and Committee procedures are followed and for compliance with applicable rules and regulations. The Company Secretary is also responsible to the Board for ensuring the timely delivery of information and reports and that the statutory obligations of the Company are met.

When Directors have concerns that cannot be resolved about the running of the Company or a proposed action, they are asked to ensure that their concerns are recorded in the Board minutes. On resignation, a Director who has any such concerns is encouraged to provide a written statement to the Chairman, for circulation to the Board.

Directors appointed by the Board to fill a vacancy are required to submit to election at the next annual general meeting. At each AGM of the Company one third of the Directors shall retire from office and, being eligible, be proposed for re-election. The Directors to retire will be those who have been longest in office or, in the case of those who were appointed or re-appointed on the same day, will be (unless they otherwise agree) determined by lot. The Company may by ordinary resolution remove any Director before his period of office has expired. In addition, as Mr Conner is an employee of the Investment Manager, he is subject to re-election under Listing Rule 15.2.13A, and will therefore offer himself for re-election annually at the AGM and thereafter.

In accordance with the AIC Code, the Company has in place directors' and officers' liability insurance.

Upon joining the Board, new Directors will receive a full, formal and tailored induction. As the Company has no major shareholders, it is considered unnecessary to provide shareholders with the opportunity to meet new non-executive Directors at a specific meeting other than the AGM.

The performance of the Board, Audit Committee and individual Directors has been evaluated through an assessment process led by the Chairman who also considered the independence of the Directors and concluded that it considered all Directors, with the exception of Charles Conner, to be independent.

The Directors seek to ensure that the Board has an appropriate balance of skills, experience and length of service. The biographies of the Directors shown below demonstrate the range of investment, commercial and professional experience that they contribute. The size and composition of the Board and Audit Committee is considered adequate for the effective governance of the Company.

Audit Committee

The Audit Committee comprises David Pinckney, Charles Conner and David Williams. Due to his extensive international auditing experience (detailed in the Directors' Information below), it is deemed appropriate that David Pinckney is Chairman of both the Audit Committee and the Board of the Company. The Committee meets twice a year to review the Annual and Half-yearly Financial Statements before submission to the Board. The roles and responsibilities of the Audit Committee, including reviewing the Company's internal controls, risk management systems and monitoring auditor independence, are set out in written terms of reference. These are available upon written application to the Company Secretary. The Audit Committee has primary responsibility for making recommendations on the appointment, reappointment and removal of the external Auditor.

The appointment of PKF (UK) LLP as the Company's Auditor was approved by shareholders at the AGM held on 13 July 2010. The Board recommended the services of PKF (UK) LLP to the shareholders in view of the firm's extensive experience in auditing Venture Capital Trusts.

The Audit Committee reviews the nature and extent of non-audit services provided by the Company's external Auditor and ensures that the Auditor's independence and objectivity is safeguarded. During the year under review, the Company's external Auditor provided tax compliance services and a review of the risk management reporting. The Board believes that the appointment of the Auditor to supply these services was in the interest of the Company due to their knowledge of the Company and the VCT sector. The Auditor was, therefore, in a position to provide a greater efficiency of service compared to other potential providers of these services. The Board is satisfied that the fees charged and work undertaken did not affect the Auditor's objectivity as the proportion of the fees earned from the Company for other services was relatively small in relation to the audit fees. Also, the other services were undertaken by partners other than the audit partner and did not involve undertaking any internal review or management role nor did these services create any self review conflict over the preparation of the information reported in the accounts.

Nomination and Remuneration Committees

To date, no Nomination or Remuneration Committees have been established. The establishment of a Nomination Committee is not considered necessary as the appointment of new Directors and recommendations for the re-election of Directors are matters considered by the Board. Matters relating to remuneration of Directors, all of whom are non-executive, are considered by the Board and any Director is excluded from meetings whose purpose is the setting of his own remuneration.

Internal control

In accordance with the AIC Code, the Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Company which accords with the Turnbull guidance. The Board acknowledges that it is responsible for the Company's systems of internal control and financial reporting. Internal control systems are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The Board has delegated, contractually to third parties, the investment management, the custodial services (which include safeguarding the Company's assets), the day-to-day accounting, company secretarial and administration requirements and the registration services. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of services offered.

There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company, which has been in place for the year under review and up to the date of approval of the accounts. This process is regularly reviewed by the Board. Currently the Board is reviewing the need for an internal audit function. The Board will continue to monitor and review the risk management process on a regular basis.

The Company has a clearly defined investment policy and process. Investment decisions are made by the Investment Manager after approval has been received from the Ventus funds' Investment Committee of the Investment Manager. In certain circumstances investment decisions are referred to the Board for approval after due consideration of the recommendations of the Ventus funds' Investment Committee of the Investment Manager. The Board performs regular reviews of the Company's performance in respect of the investments and other assets, liabilities, revenue and expenditure.

The Audit Committee reviews each of the Company's half-yearly and annual reports, interim management statements and associated announcements. The Audit Committee regularly reviews management accounts information to make comparisons to budget. The Audit Committee also regularly reviews the internal controls adopted and implements appropriate policies to deal with operational risks. The findings of the external Auditor in respect of internal controls and financial reporting are discussed at Audit Committee meetings and appropriate recommendations are made to the Board.

The principal features of the internal control systems which the Company has in place in respect of financial reporting include:

·; authorisation limits over expenditure incurred by the Company;

·; segregation of duties between the analysis of investment valuations, review of the assumptions made in valuing investments and the recording of these valuations in the accounting records;

·; bank reconciliations, carried out on a regular basis; and

·; review by the Audit Committee of financial information prior to its publication.

Performance of the Investment Manager

The primary focus of regular Board meetings is to review the investment performance against the Company's stated investment policy and objectives. In doing so, the Board assesses the performance of the Investment Manager and considers whether the arrangements made between the Company and the Investment Manager are appropriate and in the interests of shareholders.

The Board has been made aware by the Investment Manager of a breach of internal control within the Investment Manager relating to Ventus 2 VCT plc. This breach has had no financial impact on Company, however the Board is investigating whether the matter involves a weakness in the internal control procedures of the Investment Manager that could apply to the Company. The Investment Manager is currently investigating the background to this matter, has confirmed to the Board that no similar events have occurred in the past, and has made proposals to implement remedial actions for the future. The Board is taking steps to satisfy itself in respect of this matter. 

Going concern

The Directors are required to consider the going concern status of the Company and prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The going concern status of the Company is discussed in the Directors' Report.

Listing Rules disclosures: DTR 7.2.6

The Company has two classes of shares, ordinary and "C" shares, which carry no right to fixed income. Details of the Company's share capital, including the number of shares authorised and allotted, are set out in the Directors' Report.

At a general meeting of the Company, on a show of hands, every member who is present in person and entitled to vote shall have one vote and on a poll every member who is present in person or by proxy and entitled to vote shall have one vote for every share held.

Any profits of each share fund which the Company may determine to distribute in respect of any financial year shall be distributed among the shareholders pro rata according to the amounts paid up or credited as paid up on the shares held.

The capital and assets of the Company on a winding-up or other return of capital shall be applied in repaying to the shareholders the amounts paid up or credited as paid up on such shares and subject thereto shall belong to and be distributed according to the number of such shares held.

The identity of each of the shareholders with a significant holding as at the year end and the date of this report, including details of the size and nature of their holding, is disclosed in the Substantial Interests section of the Directors' Report.

As at the year end and date of this report the Company had no immediate or ultimate controlling parties and there were no shares in issue carrying special rights with regard to control of the Company.

In accordance with the Company's Articles of Association, subject to the provisions of the Companies Act 2006 and to any special rights conferred on the holders of any other shares, any shares may be issued with or have attached to them such rights and restrictions as the Company may by ordinary resolution decide or, if no such resolution has been passed or so far as the resolution does not make specific provision, as the Board may decide.

The Company may by ordinary resolution appoint any person who is willing to act as a Director, either to fill a vacancy or as an additional Director. Each Director is to be appointed by separate resolution.

The Company may by special resolution make amendment to the Company's Articles of Association.

The powers of the Company's Directors in relation to the Company issuing or buying back its own shares are set out in the Director's Report.

Relations with shareholders

The Company communicates with shareholders and solicits their views where it is appropriate to do so. All shareholders are welcome at the AGM, which provides a forum for shareholders to ask questions of the Directors and to discuss with them issues affecting the Company. The Board is also happy to respond to any written queries made by shareholders during the course of the year.

The Board as a whole approves the Chairman's Statement which forms part of the Annual and Half-yearly Reports to shareholders in order to ensure that they present a balanced and understandable assessment of the Company's position and future prospects. Notice of the AGM accompanies this Annual Report, which is sent to shareholders a minimum of 20 working days before the meeting.

A separate resolution is proposed at the AGM on each substantially separate issue. The Registrar collates the proxy votes, and the results (together with the proxy forms) are forwarded to the Company Secretary immediately prior to the AGM. In order to comply with the Combined Code, proxy votes are announced at the AGM, following each vote on a show of hands, except in the event of a poll being called. The notice of the next AGM can be found at the end of these Financial Statements. A proxy form in respect of this meeting has been issued to shareholders separately.

For and on behalf of the Board

David Pinckney

Chairman

21 June 2011

Directors' Information

The Company's Board comprises three Directors, two of whom are independent of the Manager. The Directors operate in a non-executive capacity and are responsible for overseeing the investment strategy of the Company. The Directors have wide experience of investment in both smaller growing companies and larger quoted companies. Information about the Directors is set out below.

David Pinckney - Chairman

David Pinckney was, from 1998 until December 2003, first chief operating officer for the Far East and then Vice Chairman of AXA Investment Managers SA, the investment management arm of the AXA Group with over US$500 billion under management. He was a member of the Executive and Audit Committees. From 1987 to 1997, he was Group Finance Director and Joint Managing Director of The Thornton Group (a subsidiary of Dresdner Bank), which specialized in equity investment management, in particular in the Asia/Pacific region. From 1984 to 1986, he was Managing Director of Wrightson Wood Financial Services Limited, a company specialising in international corporate finance and venture capital. From 1963 to 1983, he was with Peat, Marwick Mitchell (now KPMG), where, in his last six years, he was Senior Audit Partner for France and French speaking Africa. He was non-executive Chairman of Park Row Group PLC from 2002 to 2003, when the Group was successfully sold. He is a Director of Albion Development VCT PLC. He was Chairman of DP Property Europe Limited (formerly Rutley European Property Limited) until July 2010 and was Chairman of Syndicate Asset Management PLC until 31 March 2010. On 1 June 2011 he was appointed Chairman of KleenAir Systems International plc. He is a Chartered Accountant and an ''Expert Comptable'' (a French Accountant). He has been a member of the Board since October 2004.

Charles Conner

Charles Conner is Senior Adviser to Climate Change Capital Limited and serves as a member of the Ventus funds Investment Committee. He is a founding partner and the current Chief Investment Officer of Temporis Wind Limited, a developer of 100kW to 1.5MW wind energy projects in the UK. He was the lead investment manager of the Ventus funds from 2004 until 2007. He has 20 years of experience in corporate finance, property finance and private equity. He has substantial experience in the financing of various sectors of the energy industry, including exploration and development, pipelines, oilfield equipment, distributed generation and renewable energy. He has also originated and structured energy outsourcing transactions, with a particular emphasis on reduction of energy consumption and emissions. He holds a BS degree from Purdue University and an MBA from Harvard Business School. He has been a member of the Board since July 2011.

David Williams

David Williams is a graduate Chartered Electrical Engineer who also holds qualifications in Management, Accountancy and Finance. He has been involved in renewable energy for 20 years. Following 19 years with utility company SWALEC, he started Energy Power Resources Limited (EPRL) in 1996 and shortly afterwards undertook a £25 million private placement, the UK's largest private placement in renewable energy, which enabled the company to generate over 100MW of base load capacity. David Williams was Chief Executive of EPRL until February 2002. He co-founded Eco2 in November 2002 and led negotiations on a £100 million funding deal with Good Energies Investments Limited and Bank of Tokyo Mitsubishi UFJ to build a wind farm in Scotland, Wales' first commercial scale biomass project and a number of other wind farm projects. He now leads an ambitious business plan to develop over £1 billion of biomass projects throughout Europe. David Williams is a member of the British government's Renewables Advisory Board and was previously an Independent Grant Assessor for the DTI. He has also been a member of the DEFRA Biomass Implementation Advisory Group and is a non-executive adviser to New Zealand based CE3 renewable energy fund. He has been a member of the Board since July 2011.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Directors' Report, the Directors' Remuneration Report and the Financial Statements in accordance with applicable law and regulations. They are also responsible for ensuring that the Annual Report includes information required by the Listing Rules of the Financial Services Authority.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. 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 of the Company for that period. In preparing these Financial Statements the Directors are required to:

·; select suitable accounting policies and then apply them consistently;

·; make judgements and estimates that are reasonable and prudent;

·; state whether the Financial Statements have been prepared in accordance with IFRS as adopted by the European Union; and

·; prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial Statements and other information included in annual reports may differ from legislation in other jurisdictions.

The Directors confirm, to the best of their knowledge that:

·; the Financial Statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

·; the management report included within the Chairman's Statement, Investment Manager's Report and Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The names and functions of all the Directors are stated above.

For and on behalf of the Board

David Pinckney

Chairman

21 June 2011

Directors and Advisers

Independent Auditor's Report

to the members of Ventus VCT plc

We have audited the Financial Statements of Ventus VCT PLC for the year ended 28 February 2011 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

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.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the Financial Statements

An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the Financial Statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited Financial Statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on Financial Statements

In our opinion the Financial Statements:

·; give a true and fair view of the state of the Company's affairs as at 28 February 2011 and of its profit for the year then ended;

·; have been properly prepared in accordance with IFRSs as adopted by the European Union; and

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

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

·; the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006;

·; the information given in the Directors' Report for the financial year for which the Financial Statements are prepared is consistent with the Financial Statements; and

·; the information given in the Corporate Governance Statement in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook issued by the Financial Services Authority (information about internal control and risk management systems in relation to financial reporting processes and about share capital structures) is consistent with the Financial Statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required 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; or

·; a Corporate Governance Statement has not been prepared by the Company.

Under the Listing Rules we are required to review:

·; the Directors' statement, set out in the Directors' Report, in relation to going concern; and

·; the part of the Corporate Governance Statement relating to the Company's compliance with the nine provisions of the June 2008 Combined Code specified for our review; and

·; certain elements of the report to the shareholders by the Board on Directors' remuneration.

Rosemary Clarke (Senior statutory auditor)

for and on behalf of PKF (UK) LLP, Statutory auditor

London, UK

21 June 2011

Statement of Comprehensive Income

for the year ended 28 February 2011

The Company has only one class of business and derives its income from investments made in the UK.

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union. The revenue and capital columns shown above constitute supplementary information prepared under the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" 2009 ("SORP") published by the Association of Investment Companies.

The accompanying notes below form an integral part of these Financial Statements.

Statement of Comprehensive Income

for the year ended 28 February 2010

 The Company has only one class of business and derives its income from investments made in the UK.

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union. The revenue and capital columns shown above constitute supplementary information prepared under the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" 2009 ("SORP") published by the Association of Investment Companies.

The accompanying notes below form an integral part of these Financial Statements.

Balance Sheet

as at 28 February 2011

Approved by the Board and authorised for issue on 21 June 2011.

David Pinckney

Chairman

The accompanying notes below form an integral part of these Financial Statements.

Ventus VCT plc. Registered No: 05205442

Statement of Changes in Equity

for the year ended 28 February 2011

All amounts presented in the Statement of Changes in Equity are attributable to equity holders. The reserves available for distribution comprise the revenue reserve. The special reserve may be used to fund buy-backs of shares as and when it is considered by the Board to be in the interests of the shareholders.

The accompanying notes below form an integral part of these Financial Statements.

Statement of Changes in Equity

for the year ended 28 February 2010