VEN.L Regulatory News (VEN)

Ventus VCT plc

Half-yearly Financial Report

for the six month period ended 31 August 2014

Registered No: 5205442

Chairman's Statement

I am pleased to present the financial report of Ventus VCT plc (the "Company") for the six month period ended 31 August 2014.

The Investment Manager, Temporis Capital LLP, has continued its successful management of the portfolio with a focus on delivering predictable dividends to shareholders.

The Company's ordinary and "C" share funds now have an established portfolio of assets generating a steady, tax-free yield to investors characterised by stability in terms of net asset value ("NAV") and dividends. Both the ordinary and "C" share funds are substantially invested in fully-operational renewable energy assets. The "D" share fund made its first investment in the period and is expected to be fully invested by the end of 2014. As discussed in the Investment Manager's Report, the first investment of the "D" share fund, in a company building a wind farm, was made prior to Royal Assent of the Finance Act 2014, so is a qualifying investment for Venture Capital Trust ("VCT") purposes. The remaining investments of the "D" share fund will be in companies building hydroelectric projects, which are still qualifying investments for VCT purposes. The ordinary and "C" share funds also have cash available to invest in these companies building hydroelectric projects.

During the period, the Company met its investment and dividend goals. The Company's key objective going forward is to optimise the performance of portfolio company wind farms so as to continue generating consistent dividends.

During the period, the wind farms owned by investee companies at Eye Airfield, Weston Airfield and North Pickenham Airfield were all completed ahead of schedule and below budget. With these wind farms operational, 75% of the ordinary share fund's investments and 89% of the "C" share fund's investments by value as a percentage of the share funds' NAV are in operational companies. The ordinary share fund also earns interest at the rate of 8% per annum on deferred consideration from the sale of Craig Wind Farm Limited, which accounts for 12% of the NAV of the ordinary share fund.

Also during the period, the Company received a cash distribution of £1,765,000 from BEL Holdco Limited, the successor company to Broadview Energy Limited, into which the Company invested £750,000 in February 2008. This represents a 2.35 times multiple on the Company's original investment.

On 3 June 2014, the Company allotted a further 377,439 "D" shares, taking the total "D" shares issued under the "D" share offer, which is now closed, to 1,990,767. The net proceeds raised by the Company under the "D" share offer totalled £1.93 million.

Strategic Review

The Board regularly reviews the performance of the Investment Manager and the implementation of the Company's investment strategy. Since the Board appointed Temporis Capital LLP as Investment Manager in September 2011, the Company has been managed with the intention of achieving consistent, predictable dividends, along with growth in NAV.

The major developments and achievements during the past three years have been as follows:

· The Investment Manager has restructured development investments in the ordinary share fund to unlock planning value.

· Leverage on the underlying assets has been paid down as the assets have matured.

· The investee companies of the Company have added underlying generation capacity of 59 MW and now have 98 MW of underlying generation capacity.

· The Company's investment in Craig Wind Farm Limited was sold in 2012 at a price equal to 3.12 times the initial investment.

· Dividends have been stabilised and increased.

From 31 August 2011 to 31 August 2014, the performance of the share classes has been as follows:

The Directors intend to pay a minimum dividend of 6p per ordinary share per annum for the year ending 28 February 2015, with a realistic target range in the medium term beyond 28 February 2015 of 6p to 8p per ordinary share per annum. The Directors intend to pay a minimum dividend of 6.25p per "C" share per annum for the year ending 28 February 2015, with a realistic target range in the medium term is 6p to 8p per "C" share per annum. It should be stressed that these are intentions only, and no forecasts are intended or should be inferred.

Following the recent changes in legislation relating to VCTs, the Directors and Ventus 2 VCT plc held a special joint meeting with the Investment Manager in late September to decide what strategies should be adopted to preserve and enhance shareholder value. After considering in depth a variety of options including, inter alia, broadening the remit of the Funds to invest in non-renewables, progressive sell off of assets and merger of the two Funds, the Directors agreed that it was in the best interests of shareholders to maintain the status quo and maximise the performance of the assets, thus providing a stable and possibly increasing stream of tax free dividends. The Directors will continue to monitor this situation very carefully, in particular in light of any new legislation which may be enacted after the next General Election.

The Directors regularly review the question of when the "C" shares will be converted into ordinary shares and intend to effect the conversion of the "C" shares into ordinary shares when they deem it appropriate to do so.

Net Asset Value, Results and Dividend - Ordinary Shares

At the period end, the NAV of the ordinary share fund of the Company stood at £19,922,000 or 122.2p per ordinary share. The revenue profit attributable to ordinary shareholders for the period was £468,000 or 2.87p per ordinary share. The capital gain attributable to ordinary shareholders for the period was £216,000 or 1.32p per ordinary share, resulting in a net gain attributable to ordinary shareholders for the period of £684,000 or 4.19p per ordinary share.

The value of investments held at 31 August 2014 in the ordinary share fund was £15,237,000 compared to £17,016,000 at 28 February 2014. The Investment Manager's report gives details of investments made and proceeds received during the period, together with information about the valuation of all investee company holdings within the portfolio.

The Company has declared an interim dividend of 3.0p per ordinary share which will be paid on14 January 2015 to all ordinary shareholders on the register as at the close of business on 12 December 2014.

Net Asset Value, Results and Dividend - "C" Shares

At the period end, the NAV of the "C" share fund of the Company stood at £14,155,000 or 125.5p per "C" share. The revenue profit attributable to "C" shareholders for the period was £292,000 or 2.58p per "C" share. The capital gain attributable to "C" shareholders for the period was £420,000 or 3.71p per "C" share, resulting in a net gain attributable to "C" shareholders for the period of £712,000 or 6.29p per "C" share.

The value of investments held at 31 August 2014 in the "C" share fund was £12,939,000 compared to £12,941,000 at 28 February 2014.

The Company has declared an interim dividend of 3.0p per "C" share which will be paid on14 January 2015 to all "C" shareholders on the register as at the close of business on 12 December 2014.

Net Asset Value, Results and Dividend - "D" Shares

At the period end, the NAV of the "D" share fund of the Company stood at £1,905,000 or 95.7p per "D" share. The revenue loss attributable to "D" shareholders for the period was £11,000 or 0.74p per "D" share. The capital loss attributable to "D" shareholders for the period was £17,000 or 1.14p per "D" share, resulting in a net loss attributable to "D" shareholders for the period of £28,000 or 1.88p per "D" share.

The value of investments held at 31 August 2014 in the "D" share fund was £712,000.

VCT Qualifying Status

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

Key Performance Indicators

The Directors consider the following key performance indicators, which are typical for VCTs, to best measure the Company's performance and to provide shareholders with a summary of how the business' objectives are pursued:

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

2 The on-going charges ratio represents the total operating expenditure during the period (excluding investment costs and tender costs) as a percentage of the average NAV of the Company over the six month period.

The total annual running costs cap is set out in Note 3 to the financial statements.

3 The "per share" value is determined in respect of the number of shares in issue at the period 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.

4The total shareholder return represents the NAV of the Company at the period end plus the cumulative dividends paid by the Company since incorporation.

Temporis Capital LLP continues to be actively engaged in managing the portfolio of existing investments and in identifying and negotiating potential investment opportunities to invest the share capital that has been raised. The investments made constitute the important events of the period.

The performance of the Company is reviewed in the Investment Manager's Report, including the Company's compliance with HM Revenue & Customs ("HMRC") VCT regulations. The Company's prospects are considered in the UK Market Outlook section of the Investment Manager's Report.

David Pinckney

Chairman

29 October 2014

Principal Risks and Uncertainties 

Under the Financial Conduct Authority's Disclosure and Transparency Rules, the Directors are required to identify those material risks to which the Company is exposed and take appropriate steps to mitigate those 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. The Directors do not expect that the risks and uncertainties presented will change significantly over the current financial year.

· Failure to meet and maintain the investment requirements for compliance with HMRC VCT regulations may result in the Company losing its status as a VCT.

The Board mitigates this risk by regularly reviewing investment management activity and each new investment with appropriately qualified advisers and, typically, by obtaining pre-approval from HMRC for each qualifying investment.

· Inadequate control environment at service providers may lead to inaccurate reporting or misappropriation of assets.

This risk is mitigated 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. In addition, the Board has appointed an independent external party, Roffe Swayne, to report directly to the Board in respect of the Company's internal controls undertaken by the Investment Manager on behalf of the Company.

· Non-compliance with the Listing Rules of the Financial Conduct Authority, Companies Act Legislation and other applicable regulations may result in termination of the Company's Stock Exchange listing or other sanctions

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

· Reliance on the UK Government's continued support for the renewable energy sector and the risk of adverse changes in the application of government policies particularly in respect of the renewable energy sector and tax legislation. Changes in legislation may render future investment opportunities unviable and in the unlikely event that regulations are applied retrospectively, the impact may be detrimental to the value of the portfolio.

The future level of Government-mandated support for renewables has important implications for the industry and could impact the value of investments the Company has made in companies developing renewable projects. However, the Directors believe that any future reductions in renewable energy tariffs should not impact any existing investments in companies operating renewable energy assets, as the UK Government has a consistent history of grandfathering financial support mechanisms for existing projects and has a long term commitment to the renewable energy sector.

Going Concern

The Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing the accounts. The Company's 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. Having reviewed a cash flow forecast for the next 18 months, the Board has a reasonable expectation that the Company is able to continue in operational existence for a period of at least 12 months from the date of this report.

Responsibility Statement

The Directors acknowledge responsibility for the interim results and approve this half-yearly report. The Directors confirm that to the best of their knowledge:

a) the condensed financial statements have been prepared in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting and give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Company as required by Disclosure and Transparency Rule ("DTR") 4.2.4R;

b) the interim management report, included within the Chairman's Statement and Investment Manager's Report, includes a fair review of the information required by DTR 4.2.7R, being the important events of the first half of the year and the principal risks and uncertainties for the remaining six months of the year; and

c) the financial statements include a fair review of related party transactions and changes thereto, as required by DTR 4.2.8R.

The Responsibility Statement has been approved by the Board.

David Pinckney

Chairman

29 October 2014

Investment Manager's Report

In line with the strategic objectives set by the Board, the Investment Manager has continued to focus the Company's activities on renewable energy investments generating stable long-term income with the objective of providing predictable dividends to shareholders.

Ordinary share portfolio

A summary of the ordinary share fund's unaudited investment valuations as at 31 August 2014 and gains and losses during the six month period ended 31 August 2014 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 has also invested (or in which Ventus 2 VCT plc had invested prior to the investment being realised). 

** A company in which Temporis Capital Renewable Infrastructure EIS Fund and Ventus 2 VCT plc have also invested The Company, Ventus 2 VCT plc and Temporis Capital Renewable Infrastructure EIS Fund are managed byTemporis Capital LLP.

A discussion of each investment follows.

OPERATIONAL WIND

Each of the following investee companies owns and operates a single wind farm (or, in the case of Bernard Matthews Green Energy Weston Limited and Bernard Matthews Green Energy Pickenham Limited, owns an interest in a limited liability partnership that owns and operates a single wind farm):

Wind farm

capacity

(megawatts) Operational since Location

Fenpower Limited 10.0 May 2007 Cambridgeshire

A7 Greendykeside Limited 4.0 November 2007 Lanarkshire, Scotland

Achairn Energy Limited 6.0 May 2009 Caithness, Scotland

A7 Lochhead Limited 6.0 June 2009 Lanarkshire, Scotland

Greenfield Wind Farm Limited 12.3 March 2011 Lanarkshire, Scotland

Biggleswade Wind Farm Limited 20.0 December 2013 Bedfordshire

Eye Wind Power Limited 6.8 April 2014 Suffolk

Bernard Matthews Green Energy

Weston Limited 4.0 April 2014 Norfolk

Bernard Matthews Green Energy

Pickenham Limited 4.0 April 2014 Norfolk

The Company's investments in the above companies are valued using discounted cash flow models. The aggregate value of the above nine companies increased by 2.77% during the six month period ended 31 August 2014. This was due to the net effect of a variety of factors, including the effect of the unwinding of the discount, a decrease in theunderlying project debt in some companies, a decrease in the estimate of future electricity prices and adjustments to the projected long-term energy yields of two wind farms. Eye Wind Power Limited, Bernard Matthews Green Energy Weston Limited and Bernard Matthews Green Energy Pickenham Limited (all three of which were previously valued at cost) were revalued on a discounted cash flow basis in line with the Company's valuation policy for investments in companies with operating renewable energy assets.

During the six month period ended 31 August 2014, the electricity output as a percent of budget averaged 86% for the companies with wind farms in operation during the entire period. All investee companies' wind farms experienced satisfactory availability during the six month period ended 31 August 2014. Set out below is a brief summary of the financial performance of these investee companies.

Fenpower Limited

The Company received mezzanine interest cash payments of £125,000 from Fenpower Limited in the six month period ended 31 August 2014, representing a 6.5% cash yield on the average cost of the investment. Fenpower Limited also repaid £64,000 of mezzanine loan principal to the Company during the period. In addition to mezzanine interest income, the Company recognised a valuation gain of £239,000 on its investment in Fenpower Limited in the six month period ended 31 August 2014. The projected long-term mean annual energy yield of the wind farm was reassessed during the six month period and was revised upwards by 2.00%. This has been taken into account in the valuation of this investment.

A7 Greendykeside Limited

The Company received dividends and mezzanine interest cash payments totalling £79,000 from A7 Greendykeside Limited in the six month period ended 31 August 2014, representing a 5.1% cash yield on the cost of the investment. In addition to dividends and mezzanine interest income, the Company recognised a valuation gain of £49,000 on its investment in A7 Greendykeside Limited in the six month period ended 31 August 2014.

Achairn Energy Limited

The Company received mezzanine interest cash payments of £26,000 from Achairn Energy Limited in the six month period ended 31 August 2014, representing a 5.6% cash yield on the cost of investment. In addition to mezzanine interest income, the Company recognised a valuation gain of £16,000 on its investment in Achairn Energy Limited in the six month period ended 31 August 2014.

A7 Lochhead Limited

The Company received dividends and mezzanine interest cash payments totalling £246,000 from A7 Lochhead Limited in the six month period ended 31 August 2014, representing a 27.0% cash yield on the average cost of investment. A7 Lochhead Limited also repaid £180,000 of mezzanine loan principal to the Company during the period, reducing the balance of the mezzanine loan to nil. The value of the Company's investment in A7 Lochhead Limited decreased by £132,000 in the six month period ended 31 August 2014. This was a consequence of the large dividend paid by A7 Lochhead Limited during the period.

Greenfield Wind Farm Limited

The Company's ordinary share fund received dividends and mezzanine interest cash payments totalling £90,000 from Greenfield Wind Farm Limited in the six month period ended 31 August 2014, representing a 9.2% cash yield on the average cost of the investment. Greenfield Wind Farm Limited also repaid £13,000 of mezzanine loan principal to the Company's ordinary share fund during the period. In addition to dividend and mezzanine interest income, the Company's ordinary share fund recognised a valuation loss of £119,000 on its investment in Greenfield Wind Farm Limited in the six month period ended 31 August 2014. The projected long-term mean annual energy yield of the wind farm was reassessed during the six month period and was revised downwards by 4.59%. This has been taken into account in the valuation of this investment.

The Company's "C" share fund also holds an investment in Greenfield Wind Farm Limited as discussed below.

Biggleswade Wind Farm Limited

The Company's ordinary share fund recognised a valuation gain of £9,000 on its investment in Biggleswade Wind Farm Limited in the six month period ended 31 August 2014. The Company received no cash income from Biggleswade Wind Farm Limited in the six month period ended 31 August 2014.

The Company's "C" share fund also holds an investment in Biggleswade Wind Farm Limited as discussed below.

Eye Wind Power Limited

The Eye Airfield wind farm became fully operational in April 2014. The wind farm was completed ahead of schedule and under budget. The Company received mezzanine interest cash payments of £26,000 from Eye Wind Power Limited in the six month period ended 31 August 2014, representing a 1.5% cash yield on the average cost of the investment. Eye Wind Power Limited also repaid £203,000 of mezzanine loan principal to the Company's ordinary share fund during the period, reducing the balance of the mezzanine loan to nil. The Company's ordinary share fund recognised a valuation gain of £350,000 on its investment in Eye Wind Power Limited in the six month period ended 31 August 2014 because the investment, having been held at cost as at 28 February 2013, has been revalued on a discounted cash flow basis in line with the Company's accounting policy.

As discussed below, the Company's "C" share fund held a mezzanine debt investment in Eye Wind Power Limited which was repaid in full during the six month period ended 31 August 2014.

Bernard Matthews Green Energy Weston Limited

The Weston Airfield wind farm (in which Bernard Matthews Green Energy Weston Limited holds a partnership interest) became fully operational in April 2014. The wind farm was completed ahead of schedule and under budget.  The Company received no cash income from Bernard Matthews Green Energy Weston Limited in the six month period ended 31 August 2014. The Company recognised a valuation gain of £326,000 on its investment in Bernard Matthews Green Energy Weston Limited in the six month period ended 31 August 2014 because the investment, having been held at cost as at 28 February 2014, has been revalued on a discounted cash flow basis in line with the Company's accounting policy.

As discussed below, the Company's "C" share fund holds an investment in Weston Airfield Investments Limited, which is Bernard Matthews Green Energy Weston Limited's partner in the Weston Airfield wind farm.

Bernard Matthews Green Energy Pickenham Limited

The North Pickenham Airfield wind farm (in which Bernard Matthews Green Energy Pickenham Limited holds a partnership interest) became fully operational in April 2014. The wind farm was completed ahead of schedule and under budget. The Company received no cash income from Bernard Matthews Green Energy Pickenham Limited in the six month period ended 31 August 2014. The Company recognised a valuation gain of £105,000 on its investment in Bernard Matthews Green Energy Pickenham Limited in the six month period ended 31 August 2014 because the investment, having been held at cost as at 28 February 2014, has been revalued on a discounted cash flow basis in line with the Company's accounting policy.

As discussed below, the Company's "C" share fund holds an investment in North Pickenham Energy Limited, which is Bernard Matthews Green Energy Pickenham Limited's partner in the North Pickenham Airfield wind farm.

OPERATIONAL COMPANIES IN THE WIND SECTOR

Firefly Energy Limited

Firefly Energy Limited is the parent company of a group of trading subsidiaries that have entered into long-term power purchase agreements with customers for 41.7 megawatts of generating capacity across five wind farm developments. The five wind farm projects are fully operational and generating revenues. Each of the five power purchase agreements expires on 31 March 2016. Firefly Energy Limited earns a margin on the five long-term power purchase agreements. The Company recognised a valuation gain of £2,000 on its investment in Firefly Energy Limited in the six month period ended 31 August 2014.

The Company has a loan investment in Firefly Energy Limited which had a principal amount outstanding as at 31 August 2014 of £938,000. The loan is valued in the Company's accounts based on the discounted projected future cash flows from the five power purchase agreements on which the company earns a spread, net of projected administration costs. As at 31 August 2014, the value of the loan was £736,000. The loan, as valued, is projected to be paid off by the end of 2016. The Company also holds 50% of the ordinary shares of Firefly Energy Limited (cost of £200,000) which was written down to nil value in a prior year.

DEVELOPMENT AND PRE-PLANNING

BEL Holdco Limited

BEL Holdco Limited is the parent company of Broadview Energy Limited ("Broadview"), an independent renewable energy company that formerly developed, constructed and operated wind farms in the UK. Having disposed of its operating and consented wind projects, Broadview carried out a reorganisation in January 2014 with the objective of returning cash to its shareholders. In connection with this reorganisation, all the shareholders of Broadview, including the Company, exchanged their holdings in Broadview for identical holdings in BEL Holdco Limited. Subsequent to this exchange, BEL Holdco Limited sold Broadview to BEL Acquisition Limited (see below) in exchange for nominal cash plus deferred consideration. Broadview's assets consisted of five wind development projects (four of which had been rejected in planning and were being appealed and one of which had yet to be submitted for planning), along with a limited amount of working capital. Upon successful consent of any of the five wind development projects, BEL Acquisition Limited will pay deferred consideration to BEL Holdco Limited. As the final step in its reorganisation, BEL Holdco entered voluntary liquidation so that the cash in Broadview could be distributed to shareholders.

During the six month period ended 31 August 2014, BEL Holdco Limited distributed £1,765,000 to the Company. This return of cash represents a 2.35 times multiple on the Company's £750,000 investment in Broadview made in February 2008.

Since the acquisition of Broadview by BEL Holdco Limited, two of the wind development projects under appeal have been rejected by the Secretary of State for Communities and Local Government. As at 31 August 2014, the Company's remaining interest in BEL Holdco Limited is valued at £144,000, which is the Investment Manager's estimate of the market value.

BEL Acquisition Limited

BEL Acquisition Limited is a wind farm development company. It was incorporated in May 2014 for the purpose of acquiring Broadview from BEL Holdco Limited (see above). The assets held by Broadview consisted of five wind development projects, four of which had been rejected in planning and were being appealed and one of which had yet to be submitted for planning, along with a limited amount of working capital. As discussed above, two of these appeals have been rejected by the Secretary of State for Communities and Local Government. BEL Acquisition Limited also earns income from providing asset management services to wind farms.

During the six month period ended 31 August 2014, the Company acquired 11.4% of the ordinary shares of BEL Acquisition Limited at a cost of £58,000. The Company's investment in BEL Acquisition Limited is held at cost.

WIND UNDER CONSTRUCTION AS AT 31 AUGUST 2014

Bernard Matthews Green Energy Halesworth Limited

Bernard Matthews Green Energy Halesworth Limited is constructing a 10.25 megawatt wind farm at the Upper Holton Airfield near Halesworth, Suffolk. The wind farm will operate five Senvion (formerly REpower) MM82 2.05 megawatt turbines. The wind farm is scheduled to be operational in March 2015. The investment of the Company's ordinary share fund in Bernard Matthews Green Energy Halesworth Limited is held at £116,000, which represents the total cost of the investment incurred both in the investee company and through Redeven Energy Limited, which was the development company.

The Company's "C" and "D" share funds also hold an investment in Bernard Matthews Green Energy Halesworth Limited as discussed below.

REALISED INVESTMENTS

Redimo LFG Limited

Redimo LFG Limited operates four landfill gas electricity generation sites in the north of England. Redimo LFG Limited is not paying dividends to the Company and has been held in the accounts at a nil valuation since late 2010. Given the senior debt commitments of the Redimo LFG Limited's subsidiaries, there is no possibility that the Company will recover any part of its investment in Redimo LFG Limited. Therefore, the loss in value in respect of this investment is treated as a realised loss.

Redeven Energy Limited

Redeven Energy Limited is a wind farm development company through which the Company, jointly with Ventus 2 VCT plc, held investment rights in three successfully-consented wind farm developments at three sites in East Anglia: Weston Airfield, North Pickenham Airfield and Upper Holton Airfield. The development rights in these wind farms have been transferred to the relevant project companies into which the Company and Ventus 2 VCT plc have invested further funds, leaving Redeven Energy Limited with no remaining significant assets or liabilities as at 31 August 2014. The project companies that have built out or are building out the three wind farms are owned by the Company and by Ventus 2 VCT plc and are described elsewhere in this report.

"C" share portfolio

A summary of the "C" share fund's unaudited investment valuations as at 31 August 2014 and gains and losses during the six month period ended 31 August 2014 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 has also invested.

** A company in which Temporis Capital Renewable Infrastructure EIS Fund and Ventus 2 VCT plc have also invested (or in which Ventus 2 VCT plc had invested prior to the investment being realised). The Company, Ventus 2 VCT plc and Temporis Capital Renewable Infrastructure EIS Fund are managed byTemporis Capital LLP.

A discussion of each investment follows.

OPERATIONAL WIND

Each of the following investee companies owns and operates a single wind farm (or, in the case of AD Wind Farmers Limited, Weston Airfield Investments Limited and North Pickenham Energy Limited, owns an interest in a limited liability partnership that owns and operates a single wind farm):

Wind farm

capacity

(megawatts) Operational since Location

Greenfield Wind Farm Limited 12.3 March 2011 Lanarkshire, Scotland

White Mill Windfarm Limited 14.35 August 2012 Cambridgeshire

AD Wind Farmers Limited 10.2 December 2012 Argyll and Bute, Scotland

Biggleswade Wind Farm Limited 20.0 December 2013 Bedfordshire

Weston Airfield Investments Limited 4.0 April 2014 Norfolk

North Pickenham Energy Limited 4.0 April 2014 Norfolk

The Company's investments in the above companies are valued using discounted cash flow models. The aggregate value of the above six companies increased by 4.12% during the six month period ended 31 August 2014. This was due to the net effect of a variety of factors, including the effect of the unwinding of the discount, a decrease in the estimate of future electricity pricesand a decrease in theunderlying project debt of Greenfield Wind Farm Limited and a decrease in the projected long-term energy yield of its wind farm. Weston Airfield Investments Limited and North Pickenham Energy Limited (both of which were previously valued at cost) were revalued on a discounted cash flow basis in line with the Company's valuation policy for investments in companies with operating renewable energy assets.

During the six month period ended 31 August 2014, the electricity output as a percent of budget averaged 89% for the companies with wind farms in operation during the entire period. All investee companies' wind farms experienced satisfactory availability during the six month period ended 31 August 2014. Set out below is a brief summary of the financial performance of these investee companies.

Greenfield Wind Farm Limited

The Company's "C" share fund received dividends and mezzanine interest cash payments totalling £135,000 from Greenfield Wind Farm Limited in the six month period ended 31 August 2014, representing an 9.2% cash yield on the average cost of the investment. Greenfield Wind Farm Limited also repaid £20,000 of mezzanine loan principal to the Company's "C" share fund during the period. In addition to dividend and mezzanine interest, the Company's "C" share fund recognised a valuation loss of £176,000 on its investment in Greenfield Wind Farm Limited in the six month period ended 31 August 2014. The projected long-term mean annual energy yield of the wind farm was reassessed during the six month period and was revised downwards by 4.59%. This has been taken into account in the valuation of this investment.

The Company's ordinary share fund also holds an investment in Greenfield Wind Farm Limited as discussed above.

White Mill Windfarm Limited

The Company recognised a valuation gain of £15,000 on its investment in White Mill Windfarm Limited in the six month period ended 31 August 2014. The Company received no cash income from White Mill Windfarm Limited in the six month period ended 31 August 2014.

AD Wind Farmers Limited

The Company recognised a valuation loss of £7,000 on its investment in AD Wind Farmers Limited in the six month period ended 31 August 2014. The Company received no cash income from AD Wind Farmers Limited in the six month period ended 31 August 2014.

Biggleswade Wind Farm Limited

The Company's "C" share fund recognised a valuation gain of £51,000 on its investment in Biggleswade Wind Farm Limited in the six month period ended 31 August 2014. The Company received no cash income from Biggleswade Wind Farm Limited in the six month period ended 31 August 2014.

The Company's ordinary share fund also holds an investment in Biggleswade Wind Farm Limited as discussed above.

Weston Airfield Investments Limited

The Weston Airfield wind farm (in which Weston Airfield Investments Limited holds a partnership interest) became fully operational in April 2014. The wind farm was completed ahead of schedule and under budget. The Company received no cash income from Weston Airfield Investments Limited in the six month period ended 31 August 2014. The Company recognised a valuation gain of £481,000 on its investment in Weston Airfield Investments Limited in the six month period ended 31 August 2014 because the investment, having been held at cost as at 28 February 2014, has been revalued on a discounted cash flow basis in line with the Company's accounting policy.

As discussed above, the Company's ordinary share fund holds an investment in Bernard Matthews Green Energy Weston Limited, which is Weston Airfield Investments Limited's partner in the Weston Airfield wind farm.

North Pickenham Energy Limited

The North Pickenham Airfield wind farm (in which North Pickenham Energy Limited holds a partnership interest) became fully operational in April 2014. The wind farm was completed ahead of schedule and under budget. The Company received no cash income from North Pickenham Energy Limited in the six month period ended 31 August 2014. The Company recognised a valuation gain of £155,000 on its investment in North Pickenham Energy Limited in the six month period ended 31 August 2014 because the investment, having been held at cost as at 28 February 2014, has been revalued on a discounted cash flow basis in line with the Company's accounting policy.

As discussed above, the Company's ordinary share fund holds an investment in Bernard Matthews Green Energy Pickenham Limited, which is North Pickenham Energy Limited's partner in the North Pickenham Airfield wind farm.

WIND UNDER CONSTRUCTION

Bernard Matthews Green Energy Halesworth Limited

Bernard Matthews Green Energy Halesworth Limited is constructing a 10.25 megawatt wind farm at the Upper Holton Airfield near Halesworth, Suffolk. The wind farm will operate five Senvion (formerly REpower) MM82 2.05 megawatt turbines. The wind farm is scheduled to be operational in March 2015. Initially, the Company's "C" share fund made a loan investment of £301,000 in Bernard Matthews Green Energy Halesworth Limited. During the period ended 31 August 2014 this loan investment was converted to equity. The investment is held at £300,000, which represents the total cost of the equity investment.

The Company's ordinary and "D" share funds also hold an investment in Bernard Matthews Green Energy Halesworth Limited as discussed above and below.

DEVELOPMENT AND PRE-PLANNING

Blawearie Wind Limited

Blawearie Wind Limited is developing a wind farm in the Scottish Borders. The project is in the pre-planning phase. The investment is held at £30,000, which is the cost of the investment for the Company's "C" share fund.

REALISED INVESTMENTS

Eye Wind Power Limited

The Company's "C" share fund held a loan investment in Eye Wind Power Limited of £500,000 which was repaid in full during the six month period ended 31 August 2014. The Company received interest cash payments of £65,000 from Eye Wind Power Limited in the six month period ended 31 August 2014.

Iceni Renewables Limited

Iceni Renewables Limited is a company established to develop two potential wind farms in Scotland. The first project, Craigannet (up to six turbines), was submitted for planning in January 2012, appealed for non-determination in August 2012 and then refused by the Scottish Government in November 2012. The second site, Merkins (up to ten turbines), was submitted for planning in January 2012 and turned down by West Dunbartonshire Council in October 2013. The Investment Manager believes there is no prospect of Iceni Renewables Limited obtaining value from either site. As such, the Company's investment in Iceni Renewables Limited has been written down to nil value and is considered to be a realised loss.

"D" share portfolio

The "D" share offer closed on 30 May 2014 having raised net proceeds of £1.93 million. The "D" share fund made one investment during the six month period ended 31 August 2014 which is discussed below.

WIND UNDER CONSTRUCTION

Bernard Matthews Green Energy Halesworth Limited

Bernard Matthews Green Energy Halesworth Limited is constructing a 10.25 megawatt wind farm at the Upper Holton Airfield near Halesworth, Suffolk. The wind farm will operate five Senvion (formerly REpower) MM82 2.05 megawatt turbines. The wind farm is scheduled to be operational in March 2015. The Company's "D" share fund made an equity investment of £712,000. The investment is held at £712,000, which represents the total cost of the equity investment.

The Company's ordinary and "C" share funds also hold an investment in Bernard Matthews Green Energy Halesworth Limited as discussed above.

Valuation of Investments

It is the accounting policy of the Company to hold its investments at fair value. The Company's investments in investee companies which operate renewable energy assets 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, 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 price of investment subject to a periodic impairment review.

The Company's valuation of its holding in BEL Holdco Limited is discussed above.

Investment Policy

The Company is focused on investing in companies developing renewable energy projects with installed capacities of up to 20 megawatts, although investments in companies developing 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 to allocate the Company's investments in equity securities and loan stock of companies owning renewable energy projects, primarily wind energy and hydroelectric. Up to 10% of net proceeds raised from share offers may be allocated to companies developing early stage renewable energy projects prior to planning permissions being obtained.

The Company together with Ventus 2 VCT plc has an allocation agreement in place with the Investment Manager. The allocation agreement prescribes the allocation of investments between the two companies and their share funds in accordance with the ratio of available funds in each share fund, subject to adjustment in consideration of maintaining the VCT status of both companies, concentration risk, expected timing of realisations and projected dividend profiles.When there is a conflict or potential conflict of interest between the investment strategy of the Company and that of another fund managed by Temporis Capital LLP, the matter is referred to the Investment Manager's compliance officer who ensures any conflicts are dealt with fairly. Any investment made in a company in which another fund managed by the Investment Manager has invested or intends to invest will be approved by the Directors who are independent of the Investment Manager, unless the investment is made at the same time and on the same terms or in accordance with a specific pre-existing agreement between the Company and the Investment Manager.

The Company's policy is to maintain cash reserves of at least 5% of net proceeds raised from share offers 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 Company's 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 made via subscriptions for new share capital, acquiring existing 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.

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 debt which is non-recourse to the Company. 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 for the duration of the 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 will restrict the borrowings of the Company. The aggregate principal amount at any time outstanding in respect of money borrowed by the Company will 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 Company to various risks, the following can be used as a guide:

i) Investments in qualifying holdings

Under VCT regulations, at least 70% of the Company's funds should be invested in qualifying holdings. When there is an issue of new shares, the 70% requirement does not apply to the new funds raised for any accounting periods which end earlier than three years from the date of allotment of the new shares.

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 any requirement due to factors outside of its control, it may apply to HMRC 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 share offers may be invested in companies developing pre-planning projects.

VCT Regulations

The Finance Act 2014, which received Royal Assent on 17 July 2014, changed the definition of VCT qualifying investments to exclude new investments in companies in the renewable energy space benefitting from Renewable Obligation Certificates ("ROCs"). As such, the Company will no longer be able to make new qualifying investments in companies owning and operating wind farms. The new rules do not affect any of the Company's existing investments, including the investment in Bernard Matthews Green Energy Halesworth Limited which was made in July 2014 before Royal Assent of the Finance Act 2014.

Investments in companies holding hydroelectric projects which benefit from the Feed-in Tariff are still qualifying investments for VCT purposes.

Market Outlook

In light of the changes in the VCT regulations described above, the Company will have limited opportunities for making further new investments in renewable energy companies. Therefore, the discussion in this section relates primarily to the potential impact of market and policy developments on future income from current investments.

The Department of Energy and Climate Change ("DECC") estimates that, over the next 30 years, electricity demand in the UK will increase by between 30% and 60% from current levels and that electricity generation capacity may need to be doubled to deal with peak demand levels. This projected increase in generation capacity is set in the context of the Government's objective to almost completely decarbonise electricity supply by 2050, which will require significant changes in the mix of generation sources and in the electricity grid. In the near to medium term, DECC estimates that, due to plant closures and the need to replace and upgrade the UK's electricity infrastructure, the UK electricity sector will need around £110 billion of capital investment in the period to 2020.

In order to attract the investment needed to replace ageing energy infrastructure and meet the projected future increases in electricity demand with low-carbon generation, the Government is carrying out a comprehensive reform of the UK electricity market. This initiative, called Electricity Market Reform ("EMR"), is the centre-piece of the governing coalition's energy policy. The measures in EMR, which represent a fundamental transformation of the UK electricity market, are meant to encourage the development of a balanced portfolio of renewable, gas and nuclear generation capacity and to ensure that these technologies can compete in the market-place. The Energy Act 2013, which implements EMR, received Royal Assent on 18 December 2013. In the past year, the Government has made considerable progress on the implementation of EMR.

EMR is built around three pillars: (i) sustainability and decarbonisation, (ii) security of supply and (iii) affordability. The affordability question is a major issue, and a key feature of EMR is the Levy Control Framework which will serve as a cap on the amount of subsidy that will be available to newly-commissioned renewable energy generation plant.

Under EMR, the Renewables Obligation ("RO") is planned to be phased out and replaced by Contracts for Difference ("CfD") for all renewable energy generation capacity brought on line after 31 March 2017. Up until 31 March 2017, renewable energy generators will have a choice between the RO regime and the CfD regime, but no new generation will be accredited for ROCs after 31 March 2017. A renewable energy project is entitled to earn ROCs (or an equivalent subsidy) for 20 years, so the RO regime will not end completely until 31 March 2037. All existing wind farms operated by the Company's investee companies will continue to receive ROCs (or an equivalent subsidy) for 20 years from the date they commenced operations.

Wholesale electricity prices have been reasonably stable during the past year. The Company's exposure to short-term wholesale electricity prices is mitigated by the fact that investee companies generally sell their electricity output pursuant to power purchase agreements ("PPAs") with wholesale electricity prices that are fixed over the medium- to long-term. It has recently become more difficult to enter into PPAs with a fixed-price term of greater than three years, which could have an impact on the ability of investee companies to enter into long-term PPAs when the current PPAs expire. The Investment Manager works closely with investee companies to manage wholesale electricity price risk, and is actively investigating alternatives for certain PPAs of investee companies that are expiring within the next two years.

The banking market for renewable energy projects remains challenging. There is limited availability of senior bank debt for renewable energy projects of up to 20 megawatts, which is the typical size range for investee companies of the Company. Lending margins and arrangement fees remain high by historical standards, and banks are unwilling to lend over the same term as they did in the past. Although the reduced availability and increased cost of senior bank debt have made it more difficult to finance renewable energy projects, this has created an opportunity for the Company to invest greater amounts of equity in companies with lower leverage. Investments in portfolio companies with lower leverage should reduce the volatility in dividends from those companies compared to the dividends from portfolio companies with higher leverage. The Investment Manager has also worked successfully with investee companies to access non-bank sources of senior debt to finance projects.

It should be noted that existing investments of the Company are not impacted by the current lending environment for renewable energy projects.

Temporis Capital LLP

Investment Manager

29 October 2014

Directors and Advisers

Directors

David Pinckney (Chairman)

David Williams

Rick Abbott

Company Secretary

The City Partnership (UK) Limited

Thistle House

21 Thistle Street

Edinburgh

EH2 1DF

Auditor

BDO LLP55 Baker Street

London

W1U 7EU

Principal Banker

Barclays Bank plc

1 Churchill Place

London

E14 5HP

Investment Manager & Registered Office

Temporis Capital LLP

Berger House

36/38 Berkeley Square

London

W1J 5AE

Registrar

Capita Registrars

The Registry

34 Beckenham Road

Beckenham

Kent

BR3 4TU

Broker

Panmure Gordon (UK) Limited

One New Change

London

EC4M 9AF

VCT Taxation Adviser

PricewaterhouseCoopers LLP

1 Embankment Place

London

WC2N 6RH

Solicitors

Howard Kennedy LLP

No.1 London Bridge

London

SE1 9BG

Independent Review Report to Ventus VCT plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six month period ended 31 August 2014 which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Equity, the Condensed Statement of Cash Flows and the related explanatory notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting'', as adopted by the European Union.

Our responsibility

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

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of half-yearly financial reporting in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six month period ended 31 August 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

BDO LLP,

Chartered Accountants

London,

United Kingdom

29 October 2014

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

Condensed Statement of Comprehensive Income

for the six month period ended 31 August 2014 (unaudited)

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 Condensed 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.

Condensed Statement of Comprehensive Income

for the six month period ended 31 August 2013 (unaudited)

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 Condensed 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.

Condensed Statement of Financial Position

as at 31 August 2014 (unaudited)

Approved by the Board and authorised for issue on 29 October 2014.

David Pinckney

Director

Ventus VCT plc. Registered No: 05205442

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

Condensed Statement of Changes in Equity

for the six month period ended 31 August 2014 (unaudited)

The ordinary share fund's revenue reserve includes £248,000 of income which is considered to be unrealised.

All amounts presented in the statement of changes in equity are attributable to equity holders.The revenue reserve and realised capital reserve are distributable reserves. The special reserve may be used to fund buy-backs of ordinary shares and pay dividends if they are considered by the Board to be in the interests of the shareholders.

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

Condensed Statement of Changes in Equity

For the six month period ended 31 August 2013 (unaudited)

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

Condensed Statement of Cash Flows

For the six month period ended 31 August 2014 (unaudited)

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

Explanatory Notes to the Condensed Financial Statements

For the six month period ended 31 August 2014 (unaudited)

1. Accounting convention and policies

The unaudited half-yearly results which cover the six month period ended 31 August 2014 have been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 28 February 2014. The half-yearly financial statements have been prepared under IAS 34 Interim Financial Reporting.

The accounting policies are consistent with those of the previous financial year. The standards and interpretations applicable for the first time that have been adopted are IFRS 10, 11, 12 and amendments to IAS 27 & 28. The Directors do not expect the accounting policies to change over the current financial year.

2. Publication of non-statutory accounts

These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six month period ended 31 August 2014 and 31 August 2013 have not been audited but have been reviewed by the auditor.

Statutory accounts in respect of the year ended 28 February 2014 have been audited and reported on by the auditor and delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.

No statutory accounts in respect of any period after 28 February 2014 have been reported on by the auditor or delivered to the Registrar of Companies.

3. Investment management fees

The Company pays the Investment Manager an annual management fee equal to 2.5% of the Company's net assets. The fee is not subject to VAT and is payable quarterly in advance. The annual management fee is allocated 75% to capital and 25% to revenue. Total annual running costs are in aggregate capped at 3.6% of NAV (excluding the Investment Manager's performance fee, any irrecoverable VAT and investment costs), with any excess being borne by the Investment Manager.

The amount paid to the Investment Manager for the six month period ended 31 August 2014 in respect of net asset value attributable to ordinary shareholders was £248,000 (six month period ended 31 August 2013: £251,000). The amount paid to the Investment Manager for the six month period ended 31 August 2014 in respect of the net assets attributable to the "C" shareholders was £164,000 (six month period ended 31 August 2013: £151,000). The amount paid to the Investment Manager for the six month period ended 31 August 2014 in respect of the net assets attributable to the "D" shareholders was £19,000 (six month period ended 31 August 2013: £nil).

4. Taxation

The Company has accrued £nil tax charge in the ordinary share fund (six month period ended 31 August 2013: tax credit £15,000); £nil tax charge in the "C" share fund (six month period ended 31 August 2013: tax credit £1,000) and £nil tax charge in the "D" share fund. The tax charges are accrued using an effective tax rate of 23% for the 2013/14 tax year and 21% for the 2014/15 tax year, however dividends and capital gains are not subject to tax resulting in a lower effective tax rate than the standard applicable rate in the UK.

A deferred tax asset of £26,000 has been recognised in the ordinary share fund corresponding to a tax loss carried forward. The Directors expect the Company to make sufficient taxable profits in the future against which the tax loss may be offset.

No provision for deferred taxation has been made on potential capital gains due to the Company's current status as a VCT under section 274 of the ITA and the Directors' intention to maintain that status. The Company intends to continue to meet the conditions required to maintain its status as a VCT for the foreseeable future.

5. Basic and diluted return per share