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FSFL Foresight Solar Fund Limited

84.40
0.00 (0.00%)
Last Updated: 09:27:20
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Foresight Solar Fund Limited LSE:FSFL London Ordinary Share JE00BD3QJR55 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 84.40 84.00 84.70 84.40 84.20 84.20 351,505 09:27:20
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Finance Services 162.99M 154.47M 0.2610 3.23 498.25M

Foresight Solar Fund Limited Interim Results and Dividend Announcement (8511J)

22/08/2019 7:01am

UK Regulatory


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TIDMFSFL

RNS Number : 8511J

Foresight Solar Fund Limited

22 August 2019

22 August 2019

Foresight Solar Fund Limited

('Foresight Solar' or 'the Company')

Interim Results to 30 June 2019 and Dividend Announcement

Foresight Solar, a fund investing in a diversified portfolio of ground-based solar PV assets in the UK and internationally, is pleased to announce its Interim Results for the six-month period ended 30 June 2019.

Highlights

 
 --   Continued solid operational performance of the portfolio, with production for the period 2.9% 
       above base case, generating over 400GWh of clean energy 
 --   NAV decreased to GBP601.5m (31 Dec 2018: GBP610.3m), being 109.6p per share (31 Dec 2018: 
       111.2p). This was predominantly driven by a downward revision of UK power price forecasts 
       but partially offset by a 0.25% reduction in the discount rate applied to the UK portfolio 
       and improved financing terms 
 --   Declared total dividend of 3.38p per share during the period and on track to deliver 2019 
       target dividend of 6.76p per share* 
 --   Positive progress on delivering value enhancing initiatives across the portfolio, including 
       a successful PPA re-tender for 22 UK assets in April 2019, resulting in improved commercial 
       terms for the sale of electricity and ROCs 
 --   Successful GBP245m refinancing closed post period end, negotiated on attractive terms delivering 
       significant value and capital structure flexibility. Due to the material impact of the new 
       terms, this has been taken into consideration for the NAV as at 30 June 2019 
 --   The Company's operating portfolio produced enough clean electricity to power c.130,000 UK 
       homes and avoid the equivalent of over 309,283 tonnes of C0(2) production 
 

* Target returns are not a profit forecast. There can be no assurance that target returns will be met and it should not be seen as an indication of the Company's expected or actual results or returns.

Key Metrics

 
                                          As at               As at 
                                       30 June 2019        30 June 2018 
 Gross Asset Value ("GAV")          GBP1,100.6 million   GBP749.0 million 
                                   -------------------  ----------------- 
 Net Asset Value ("NAV")             GBP601.5 million    GBP473.1 million 
                                   -------------------  ----------------- 
 NAV per Share                         109.6 pence         105.2 pence 
                                   -------------------  ----------------- 
 Profit after Tax for the Year        GBP9.4 million      GBP6.0 million 
                                   -------------------  ----------------- 
 Total Dividend per Share for           3.38 pence          3.28 pence 
  the period 
                                   -------------------  ----------------- 
 Annual Total Shareholder Return 
  since IPO**                             8.78%               7.03% 
                                   -------------------  ----------------- 
 

** Annualised from IPO on 29 October 2013.

Commenting on the Company's results, Alex Ohlsson, Chairman of Foresight Solar Fund Limited said:

"As expected, the first half of 2019 has been a successful period of portfolio consolidation and performance optimisation for the Company. I am particularly pleased with the work of the Asset Management team in delivering substantial improvements to the operational performance of the portfolio, with production continuing to be above budget.

"We remain confident that, with the positive operational performance of our assets, the delivery of value enhancing initiatives and the successful refinancing of 28 UK assets post-period, Foresight Solar continues to be well-positioned to deliver further growth in the second half of the year.

"We remain on track to deliver the target total dividend of 6.76 pence per share for the year."

Results presentation

A presentation for analysts will take place at 09:00 today at Foresight Group's offices, The Shard, 32 London Bridge Street, London SE1 9SG. Analysts wishing to attend or dial in should contact foresightsolar@citigatedewerogerson.com to register.

Dividend Declaration

Foresight Solar is also pleased to announce a second interim dividend, in respect of the period 1 April 2019 to 30 June 2019, of 1.69 pence per ordinary share ("the Dividend"). The shares will go ex-dividend on 24 October 2019 and the Dividend will be paid on 29 November 2019 to shareholders on the register as at the close of business on 25 October 2019.

Full details of the scrip dividend alternative that is being offered in respect of the Dividend (the "Scrip Offer") and the Scrip Dividend Scheme can be found in the Scrip Dividend Alternative Offer Document (the "Scrip Document") available on the Company's website at https://fsfl.foresightgroup.eu/investor-relations/dividend-history/. The Scrip Document is also available on the National Storage Mechanism website at www.morningstar.co.uk/uk/NSM and copies are also available for inspection at JTC House, 28 Esplanade, St. Helier, Jersey JE2 3QA.

The reference price of the new shares issued under the Scrip Offer will be calculated and published on or around 31 October 2019.

Shareholders will receive the Dividend in cash, unless they have previously completed a standing election (a "Form of Election") to receive new shares pursuant to the Scrip Offer. Shareholders who would like to receive such new shares rather than cash, and who have not previously submitted a Form of Election, should complete the Form of Election at the back of the Scrip Document and return it to the Company's Receiving Agent, Computershare Investors Service (Jersey) Limited by no later than 5.00pm on 11 November 2019.

The expected timetable in relation to the Dividend will be as follows:

 
 Ex-Dividend Date                    24 October 2019 
 Record Date                         25 October 2019 
                                    -------------------- 
 Scrip Price Announcement            31 October 2019 
                                    -------------------- 
 Last Date for Submission of         11 November 2019 at 
  Forms of Election                   17h00 
                                    -------------------- 
 Last Date Crest Elections           11 November 2019 at 
                                      17h00 
                                    -------------------- 
 Anticipated Listing of New Shares   29 November 2019 
                                    -------------------- 
 Dividend Payment Date               29 November 2019 
                                    -------------------- 
 

For further information, please contact:

Foresight Group

+44 (0)20 3763 6932

Louise Chesworth

InstitutionalIR@ForesightGroup.eu

Stifel Nicolaus Europe Limited

+44 (0)20 7710 7600

Mark Bloomfield

Neil Winward

Gaudi Le Roux

Citigate Dewe Rogerson

+44 (0)20 7638 9571

Nick Hayns

Elizabeth Kittle

Lucy Eyles

LEI: 213800VO4O83JVSSOX33

Notes to Editors

About Foresight Solar Fund Limited

Foresight Solar is a Jersey registered, closed-end investment company investing in a diversified portfolio of ground-based solar PV assets in the UK and internationally.

Since its IPO in October 2013, the Company has more than tripled in size and raised more than GBP569 million through share placings. The Company targets an index-linked annualised dividend inflated by RPI and has paid all target dividends to date. The target dividend for 2019 is 6.76 pence per share.

Foresight Solar Fund Limited is managed by Foresight Group, a leading independent global infrastructure and private equity manager, which provides the Company with depth of experience in fund management, deal origination and execution. The Company has a fully independent Board of Directors and is chaired by Alex Ohlsson. The lead Investment Manager for the Company is Ricardo Piñeiro, Head of UK Solar at Foresight Group.

Chairman's Statement

On behalf of the Board, I am pleased to present the Unaudited Interim Report and Financial Statements for Foresight Solar Fund Limited (the "Company" or the "Fund") for the six months ended 30 June 2019.

The Company has had an encouraging start to the year delivering on a number of portfolio and capital structure optimisation initiatives and benefiting from continued positive operational performance, despite the decrease in UK wholesale power prices during the period.

The portfolio continued to perform above base case. Electricity production for the six-month period was 2.9% above expectations, driven by high levels of irradiation for the period and the continued work of the asset management team, including optimising asset performance and portfolio consolidation. Post period end, the Company successfully closed the refinancing of 28 UK assets, adding significant value and flexibility to the Company's capital structure.

KEY FINANCIALS

In the six months to 30 June 2019, the NAV per Ordinary Share decreased to 109.6 pence (31 December 2018: 111.2 pence). The key driver behind the decrease was a material downward revision of UK power price forecasts obtained from independent third-party consultants.

During the period, the Investment Manager undertook a review of the discount rates applied to UK asset valuations. As a result of this analysis, discount rates for the UK assets have been reduced by 0.25% to reflect the current market valuation of operational solar assets.

Profit for the period was GBP9.4 million (six months to June 2018: GBP6.0 million) and Earnings per Share increased to 1.71 pence, up from 1.34 pence in June 2018.

CAPITAL STRUCTURE OPTIMISATION

At 30 June 2019, the total outstanding debt of the Company and its subsidiaries amounted to GBP499.1 million (31 December 2018: GBP504.4 million), with long term debt representing GBP394.1 million (December 2018: GBP399.4 million). The total gearing level remained flat at 45% of GAV (December 2018: 45%). Long-term gearing represents 36% of GAV (2018: 36%), which remains within the 40% long-term debt target set by the Board.

The Company's Revolving Credit Facilities ("RCFs") totalled GBP105 million at 30 June 2019, granting the Company the flexibility to adjust its gearing position in the short term. The RCFs were fully utilised at 30 June 2019.

Post period end, on 2 August 2019, the Investment Manager successfully completed the refinancing of 28 of its UK assets (321MW). The Company secured a GBP245 million debt refinancing comprising a GBP170 million long-term loan facility, a GBP65 million RCF and a GBP10 million debt service reserve facility. The facilities were secured on attractive terms and overall at a lower interest cost compared to the previous facilities. Due to the material impact of the new terms, this has been taken into consideration for the NAV as at 30 June 2019.

OPERATIONAL PERFORMANCE

Electricity generation from the Company's portfolio during the first half of the year was 2.9% above base case. In the UK, irradiation levels were 3.1% above base case assumptions, whilst UK asset performance, when adjusted for compensation received, outperformed base case by 2.9%. Asset outperformance during the period was driven by the strong performance of the majority of our UK assets, as we continue to experience a reduction in the number of operational incidents compared to previous periods. The Board is pleased with the continued stable performance of the Company's UK portfolio and is confident that the Asset Manager has remedied certain historic issues, evidenced by recent sustained periods of outperformance.

In Australia, three of the four assets are now operational and exporting at full capacity with the remaining asset due to be commissioned during the second half of 2019. Whilst there have been delays in the construction and commissioning of the Australian assets, the Investment Manager does not expect these to have a material adverse financial impact as the Company is contractually protected.

During the period, the Asset Manager delivered further operational improvements. A successful PPA re-tender for 22 of our UK assets was completed in April 2019. The outcome of the retender has resulted in an improvement to the commercial terms on which Renewables Obligation Certificates ("ROCs") and power are sold by the relevant assets, resulting in an average increase in expected revenue generation of approximately 2% for a period of 10 years. The Asset Manager continues to explore operational optimisation initiatives that are expected to secure long-term value for the Company.

DIVID

The Company has declared a dividend of 3.38 pence per share in the first half and is on track to deliver its target of 6.76 pence per share for the year. The second 2019 interim dividend of 1.69 pence will be paid on 30 August 2019.

Dividend cover for the period on a cash basis was 1.12 times, down from 1.14 times for the prior year on a like-for-like basis as a result of the decrease in UK wholesale power prices experienced in the period.

The target dividend for 2019 is 6.76 pence, which has grown in line with the UK's RPI 2019.

Following shareholder approval at the AGM on 11 July 2019, the Company is now offering shareholders a Scrip Dividend alternative to the Dividend. The Scrip Dividend Scheme provides shareholders with the opportunity to receive dividends in the form of new ordinary shares rather than cash and applies to any subsequent interim or final Dividends in respect of which a Scrip Dividend alternative is offered.

Since IPO, the Company has met all target dividends and has maintained dividend growth in line with UK inflation rates. As previously noted, the Board reviews the dividend policy on an ongoing basis to ensure it remains reflective of the ongoing correlation between power prices and inflation levels as well as the expected evolution of the investment portfolio as the Company continues to explore investment opportunities in non-UK and subsidy free markets. In a scenario where the Company experiences a decrease in the proportion of its revenues which are linked to UK inflation it may become prudent to adopt a "progressive" dividend policy. Under such a policy, the Board would intend to target a positive progression of dividend levels, but not necessarily linked to UK inflation.

CORPORATE GOVERNANCE

At the beginning of June 2019, we were pleased to announce the appointment of Monique O'Keefe to the Board as an Independent Non-Executive Director. Monique provides additional breadth of expertise with over 20 years' experience in law and finance which will be invaluable to the Company in its next phase of growth.

OUTLOOK

Following the various optimisation initiatives we undertook during the first half of the year, and the post-period refinancing, we expect our UK portfolio to enter more of a steady state. We are extremely pleased with the progress made to date by the Investment Manager and Asset Management team in delivering value-enhancing initiatives and optimising performance across the portfolio and we will continue to explore new opportunities and initiatives to optimise performance further. The fourth Australian asset, which is currently under construction, is expected to become operational before year end. We also remain active in exploring opportunities to further optimise the Company's capital structure.

The Investment Manager continues to review international investment opportunities in markets that benefit from regulatory support, however European markets are showing signs of increased consolidation and inflated asset valuations at present. We maintain a disciplined approach to acquisitions, only acquiring assets that meet return requirements on a risk adjusted basis, and, as previously noted, the subsidised market in the UK remains highly competitive with limited investment opportunities based on current market valuations.

We are closely monitoring the development of subsidy-free markets in Southern Europe and the UK. In Southern Europe, this market has developed rapidly and a number of relevant transactions have recently been announced in Spain and Portugal with attractive PPA structures. In the UK, whilst this market has progressed, we remain of the view that the current market economics are not yet in-line with the Company's return requirements. However, we expect this will present significant opportunity for the Company in the future.

Alexander Ohlsson

Chairman

22 August 2019

Corporate Summary and Investment Objective

CORPORATE SUMMARY

The Company is a closed-ended company with an indefinite life and was incorporated in Jersey under the Companies (Jersey) Law 1991, as amended on 13 August 2013, with registration number 113721.

As at 30 June 2019, the Company has 548,941,550 ordinary shares in issue which are listed on the premium segment of the Official List and traded on the London Stock Exchange's Main Market.

The Company makes its investments through intermediate holding companies and underlying Project Vehicles/Special Purpose Vehicles ("SPVs").

INVESTMENT OBJECTIVE

The Company's objective is to provide investors with a sustainable, inflation-linked quarterly dividend and enhanced capital value, through investment in ground-based solar assets predominantly located in the UK.

THE COMPANY

The Company's Initial Public Offering on 24 October 2013 raised GBP150 million, creating the largest dedicated solar investment company listed in the UK at the time. To date, the Company has raised a total of GBP569 million through equity issuance and reached a gross asset value of GBP1,100.6 million as at 30 June 2019. It is the largest UK-listed dedicated solar energy investment company by installed capacity.

As at 30 June 2019, the Company's portfolio consisted of 54 assets with a net installed capacity of 869MW, including four Australian assets representing 146MW, one of which remains under construction.

INVESTMENT POLICY

The Company will pursue its investment objective by acquiring ground-based, operational solar power plants predominantly located in the UK. Investments outside the UK and assets which are, when acquired, still under construction will be limited to 25 per cent of the GAV of the Company and subsidiaries, calculated at the time of investment.

The Company will seek to acquire majority or minority stakes in individual ground-based solar assets. When investing in a stake of less than 100 per cent in a solar power plant SPV, the Company will secure its shareholder rights through shareholders' agreements and other legal transaction documents.

Power Purchase Agreements ("PPAs") will be entered into between each of the individual solar power plant SPVs in the portfolio and creditworthy offtakers. Under the PPAs, the SPVs will sell solar generated electricity and green benefits to the designated offtaker. The Company may retain exposure to power prices through PPAs that do not include mechanisms such as fixed prices or price floors.

Investment may be made in equity or debt or intermediate instruments but not in any instruments traded on any investment exchange.

The Company is permitted to invest cash held for working capital purposes and awaiting investment in cash deposits, gilts and money market funds.

In order to spread risk and diversify its portfolio, at the time of investment no single asset shall exceed in value (or, if it is an additional stake in an existing investment, the combined value of both the existing stake and the additional stake acquired) 30 per cent of the Company's GAV post-acquisition. The GAV of the Company will be calculated based on the last published gross investment valuation of the Company's portfolio, including cash, plus acquisitions made since the date of such valuation at their cost of acquisition. The Company will seek to diversify risk by ensuring that a significant proportion of its expected income stream is derived from regulatory support (which will consist of, for example, without limitation, ROCs and FiTs for UK assets). Diversification will also be achieved by the Company using a number of different third-party providers such as project developers, EPC contractors, O&M contractors, panel manufacturers and PPA providers.

The Articles provide that gearing, calculated as Group Borrowing (including any asset level gearing) as a percentage of the Company's GAV, will not exceed 50 per cent at the time of drawdown. It is the Board's current intention that long-term gearing (including long-term, asset level gearing), calculated as Group borrowings (excluding intra-group borrowings (i.e. borrowings between members of the Group) and revolving credit facilities) as a percentage of the Company's GAV will not exceed 40 per cent at the time of drawdown.

Any material change to the investment policy will require the prior approval of shareholders by way of an ordinary resolution (for so long as the Ordinary Shares are listed on the Official List) in accordance with the Listing Rules.

SIGNIFICANT SHAREHOLDERS

The Company's shareholders include a substantial number of blue-chip institutional investors.

Shareholders in the Company with more than a 5% holding as at 30 June 2019 are as follows:

 
Investor                              % Shareholding in Fund 
                                      ---------------------- 
BlackRock Investment Management Ltd                    15.27 
------------------------------------  ---------------------- 
Baillie Gifford & Co Ltd                                7.73 
------------------------------------  ---------------------- 
Newton Investment Management Ltd                        7.32 
------------------------------------  ---------------------- 
Legal & General Investment Mgmt Ltd                     7.29 
------------------------------------  ---------------------- 
Schroders Plc                                           6.76 
------------------------------------  ---------------------- 
Tredje AP Fonden                                        5.25 
------------------------------------  ---------------------- 
Total                                                 49.62% 
------------------------------------  ---------------------- 
 

ALTERNATIVE INVESTMENT FUND MANAGEMENT DIRECTIVE ("AIFMD")

The AIFMD, which was implemented across the EU on 22 July 2013 with the transition period ending on 22 July 2014, aims to harmonise the regulation of Alternative Investment Fund Managers ("AIFMs") and imposes obligations on managers who manage or distribute Alternative Investment Funds ("AIFs") in the EU or who market shares in such funds to EU investors. Under the AIFMD, the Company is self-managed and acts as its own Alternative Investment Fund Manager.

Both the Company and the Investment Manager are located outside the European Economic Area ("EEA") but the Company's marketing activities in the UK are subject to regulation under the AIFMD.

PACKAGED RETAIL AND INSURANCE-BASED INVESTMENT PRODUCTS REGULATION

The EU Packaged Retail and Insurance-based Investment Products Regulation ("PRIIPs Regulation") took effect on 1 January 2018. The PRIIPs regulation requires the Company to publish a Key Information Document ("KID") that must be accurate, fair, clear and not misleading. It is the Company's policy to review the KID on an annual basis and every time there is a change that significantly affects or is likely to significantly affect the information in the KID. The KID is available on the Company's website under Publications and can be found at the following website address: www.fsfl.foresightgroup.eu.

Board of Directors

The Directors, who are Non-Executive and independent of the Investment Manager, are responsible for the determination of the investment policy of the Company, have overall responsibility for the Company including its investment activities and for reviewing the performance of the Company's portfolio. The Directors are as follows:

Alex Ohlsson (Chairman)

Mr Ohlsson is Managing Partner of the law firm Carey Olsen in Jersey. He is recognised as a leading expert in corporate and finance law in Jersey and is regularly instructed by leading global law firms and financial institutions. He sits on the boards of a number of companies and is also Chairman of the listed company GCP Asset Backed Income Fund Limited. He is an Advisory Board member of Jersey Finance, Jersey's promotional body and Treasurer of the Jersey Law Society. He has recently retired as the independent Chairman of the States of Jersey's Audit Committee. He was educated at Victoria College, Jersey and at Queens' College, Cambridge, where he obtained an MA (Hons) in Law. He has also been an Advocate of the Royal Court of Jersey since 1995.

Mr Ohlsson was appointed as a Non-Executive Director and Chairman on 16 August 2013 and was reappointed on 25 June 2019.

Chris Ambler

Mr Ambler has been the Chief Executive of Jersey Electricity Plc since 1 October 2008. He has experience in a number of senior positions in the global industrial, energy and materials sectors working for major corporations including ICI/Zeneca, The BOC Group and Centrica/British Gas, as well as in strategic consulting roles. He is a Director on other boards including a Non-Executive Director of Apax Global Alpha Limited, a listed fund which launched on the London Stock Exchange on 15 June 2015. Mr Ambler is a Chartered Director, a Chartered Engineer and a Member of the Institution of Mechanical Engineers. He holds a First-Class Honours Degree from Queens' College, Cambridge and an MBA from INSEAD.

Mr Ambler was appointed as a Non-Executive Director on 16 August 2013 and was reappointed on 25 June 2019.

Peter Dicks

Mr Dicks is currently a Director of a number of quoted and unquoted companies. He is also on the Board of Mercia Fund 1 General Partnership Limited and Miton UK Microcap Trust plc and Chairman of Unicorn AIM VCT plc and SVM Emerging Fund plc.

Mr Dicks was appointed as a Non-Executive Director on 16 August 2013 and was reappointed on 25 June 2019.

Monique O'Keefe

Mrs O'Keefe is the co-founder of investment consultancy business, Kairos Wealth Limited. She also serves on a number of boards, including Phoenix Spree Deutschland Limited which is a London Stock Exchange listed property fund, a private equity fund, a European hedge fund and an oil and gas financing fund. Mrs O'Keefe also sits on the Board of Commissioners at the Jersey Financial Services Commission.

Mrs O'Keefe was appointed as a Non-Executive Director on 1 June 2019 and was reappointed on 25 June 2019.

Investment Manager

The Company's Investment Manager, Foresight Group CI Limited, is responsible for the acquisition and management of the Company's portfolio, including the sourcing and structuring of new acquisitions and advising on the Company's borrowing strategy. The Investment Manager is a Guernsey registered company, incorporated under Guernsey Law with registered number 51471. The Investment Manager is licensed and regulated by the Guernsey Financial Services Commission.

The Manager and its adviser, Foresight Group, are together referred to as "Foresight Group". Foresight Group was founded in 1984 and is a leading independent infrastructure and private equity investment company managing GBP4.0 billion of assets on behalf of institutions and retail clients with offices in Australia, Italy, South Korea, Spain and the UK.

On 5 June 2019, Foresight Group announced the acquisition of the John Laing Environmental Assets Group Limited ("JLEN") advisory mandate from John Laing Group, effective from 1 July 2019. Foresight Group maintains a formal allocation policy for investments across its funds. Following the acquisition, Foresight Group's global infrastructure investments increased to GBP3.1 billion, with a cumulative generating capacity of 1.9GW. Currently Foresight Group's infrastructure team manages 103 solar projects internationally, representing GBP1.7 billion with a total generating capacity of 1.3GW. The remaining generation capacity under management includes bioenergy projects, onshore wind, battery storage facilities and reserve power generation assets.

Foresight Group's 89 strong infrastructure team includes 39 investment professionals, with an average of 12 years industry experience.

Foresight Group's Investment Management team is led by three experienced UK-based managers, supported by a team of seven people of investment managers located in the UK and internationally. The Investment Management team based in Australia compromises three investment professionals, three portfolio managers and one member of support staff. This team is instrumental in the management of the Company's four Australian assets.

Foresight Group is overseen by an Executive Committee of which Gary Fraser is a member. Foresight Group's Executive Committee provides strategic investment advice to the management team and the Board.

 
RICARDO PINEIRO, PARTNER, HEAD OF UK SOLAR 
 Ricardo has led Foresight Group's UK solar investments team since 2011 and has been part of 
 the Fund's advisory team since its IPO, remaining primarily focused on identifying and acquiring 
 new renewable energy transactions across the UK and international markets. Prior to joining 
 Foresight, Ricardo worked at Espirito Santo Investment where he focused on lending and advisory 
 for the energy infrastructure and transportation sectors. 
 
Gary Fraser, Partner, Chief Financial Officer 
 Gary is a Chartered Accountant and Chartered Fellow of the Securities Institute. He worked 
 with Ernst & Young between 1993 and 1999, predominantly in the audit and risk assurance and 
 corporate finance areas and joined ISIS Asset Management plc in 1999 where he was responsible 
 for the provision of similar services to several investment companies. He joined Foresight 
 Group in 2004 and is a member of the Executive Committee. 
 
MATT HAMMOND, Partner 
 Matt is a Partner in Foresight Group's infrastructure team having joined Foresight in 2015. 
 Prior to joining Foresight, Matt was a Managing Director at Macquarie where he worked in various 
 roles for fifteen years. There he focused on infrastructure and renewable energy advisory, 
 principal investing and lending. He has also worked at Henderson, BT Alex Brown and the WHEB 
 Group where he raised and invested two renewable energy funds investing across Europe. 
 

Portfolio Assets

Current Portfolio

 
          Asset           Installed     Net MW   Connection      Acquisition      Current Fair 
                         Peak Capacity               Date       Cost(1) (GBPm)   Value (2) (GBPm) 
                             (MW) 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
                                               UK 
------------------------------------------------------------------------------------------------- 
1      Wymeswold(3)           34          34     March 2013         45.0              49.3 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
2      Castle Eaton           18          18     March 2014         22.6              21.3 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
3       Highfields            12          12     March 2014         15.4              13.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
4       High Penn             10          10     March 2014         12.7              10.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
5       Pitworthy             16          16     March 2014         19.3              16.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
6      Hunters Race           10          10      July 2014         13.3              13.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
7      Spriggs Farm           12          12     March 2014         14.6              14.3 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
                                                  September 
8      Bournemouth            37          37         2014           47.9              52.2 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
9        Landmead             46          46    December 2014       52.4              49.6 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
                                                  September 
10        Kencot              37          37         2014           49.5              45.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
11        Copley              30          30    December 2015       32.7              37.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
12      Atherstone            15          15     March 2015         16.2              15.3 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
13     Paddock Wood           9           9      March 2015         10.7              10.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
14       Southam              10          10     March 2015         11.1              11.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
15      Port Farm             35          35     March 2015         44.5              45.4 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
16       Membury              16          16     March 2015         22.2              21.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
17       Shotwick             72          72     March 2016         75.5              84.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
18      Sandridge             50          50     March 2016         57.3              58.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
19     Wally Corner           5           5      March 2017          5.7               5.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
20     Coombeshead            10          10    December 2014       36.6              39.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
21      Park Farm             13          13     March 2015 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
22       Sawmills              7           7     March 2015 
    ------------------  --------------  ------  ------------- 
23       Verwood              21          21    February 2015 
    ------------------  --------------  ------  ------------- 
24       Yardwall             3           3       June 2015 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
25      Abergelli             8           8      March 2015          3.7               4.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
26      Crow Trees            5           5     February 2016        1.8               2.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
27     Cuckoo Grove           6           6      March 2015          2.5               3.3 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
28     Field House            6           6      March 2015          3.1               3.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
29     Fields Farm            5           5      March 2016          1.7               2.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
30       Gedling              6           6      March 2015          1.9               2.8 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
31       Homeland             13          13     March 2014          5.2               7.8 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
32      Marsh Farm            9           9      March 2015          4.0               4.8 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
33     Sheepbridge            5           5     December 2015        1.9               2.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
34      Steventon             10          10      June 2014          4.2               5.4 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
35       Tengore              4           4     February 2015        1.3               1.8 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
36       Trehawke             11          11     March 2014          4.7               6.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
37  Upper Huntingford         8           8     October 2015         3.1               4.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
38       Welbeck              11          11      July 2014          4.4               5.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
39       Yarburgh             8           8     November 2015        3.4               4.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
40     Abbey Fields           5           5      March 2016          1.5               3.2 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
41        SV Ash              8           8      March 2015          3.4               4.2 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
42      Bilsthorpe            6           6     November 2014        1.9               2.7 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
                                                  September 
43      Bulls Head            6           6          2014            2.2               3.0 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
44      Lindridge             5           5     January 2016         1.7               2.6 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
49      Manor Farm            14          14    October 2015         6.1               6.8 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
45        Misson              5           5      March 2016          2.0               2.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
46       Nowhere              8           8      March 2015          3.7               4.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
47      Pen Y Cae             7           7      March 2015          2.9               3.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
48       Playters             9           9     October 2015         4.0               4.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
50       Roskrow              9           9      March 2015          3.7               4.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
       UK Subtotal           723         723                        685.1             723.1 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
                                            AUSTRALIA 
------------------------------------------------------------------------------------------------- 
1       Bannerton            110        53(4)     July 2018         22.9             20.0(6) 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
2       Longreach             17         8(4)    March 2018          2.7               2.9 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
3        Oakey 1              30        15(4)   February 2019        4.4             4.8(6) 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
4        Oakey 2              70          70     Q4 2019(5)         34.0             32.7(6) 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
    Australia Subtotal       227         146                        63.9              60.4 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
          Total              950         869                        749.0             783.5 
    ------------------  --------------  ------  -------------  ---------------  ----------------- 
 
   1   Original cost at time of acquisition, including transaction costs. 

2 UK investments valued using an unlevered discount rate of 6.50% or a levered discount rate between 7.25% and 7.50% depending on the debt structure. Australian operational assets use a levered discount rate of 8.5%.

   3   Includes the 2MW extension acquired in March 2015. 
   4   Accounts for the 49% stake the Company holds of this asset 
   5   Expected connection date. 

6 Held at cost incurred to date. This does not represent expected final cost and assumes an AUD/GBP exchange rate of 0.55 as at 30 June 2019.

Investment Manager's Report

For the period ended 30 June 2019

KEY INVESTMENT METRICS

 
                                                   30 June 2019    31 December 2018      30 June 2018 
                                             ------------------  ------------------  ---------------- 
Market Capitalisation                          GBP659.8 million    GBP592.9 million  GBP489.5 million 
-------------------------------------------  ------------------  ------------------  ---------------- 
Share Price                                         120.2 pence         108.0 pence       108.8 pence 
-------------------------------------------  ------------------  ------------------  ---------------- 
Dividend Declared per Share for the period           3.38 pence          6.58 pence        3.28 pence 
-------------------------------------------  ------------------  ------------------  ---------------- 
GAV                                          GBP1,100.6 million  GBP1,114.7 million  GBP749.0 million 
-------------------------------------------  ------------------  ------------------  ---------------- 
NAV                                            GBP601.5 million    GBP610.3 million  GBP473.1 million 
-------------------------------------------  ------------------  ------------------  ---------------- 
NAV per Share                                       109.6 pence         111.2 pence       105.2 pence 
-------------------------------------------  ------------------  ------------------  ---------------- 
Annual Total Return (NAV) since IPO                       7.61%               7.36%             6.89% 
-------------------------------------------  ------------------  ------------------  ---------------- 
Annual Total Shareholder Return since IPO                 8.78%               6.83%             7.03% 
-------------------------------------------  ------------------  ------------------  ---------------- 
Profit after Tax for the Period                  GBP9.4 million     GBP56.0 million    GBP6.0 million 
-------------------------------------------  ------------------  ------------------  ---------------- 
 

PORTFOLIO SUMMARY

As at 30 June 2019, the Company's portfolio consisted of 54 assets with a total net peak capacity of 869MW. Of the 54 assets, 50 assets are located in the UK and represent 723MW of total installed capacity. The remaining four assets are located in Australia and account for 146MW of total installed capacity.

All of the Company's assets benefit from government-backed subsidies. The UK assets are accredited under the Renewable Obligation scheme, except for Yardwall which is a Feed-in Tariff accredited asset (representing less than 1% of the UK portfolio). In Australia, the assets benefit from subsidies in the form of Large-Scale Generation Certificates. During the six-month period, approximately 60% of total revenue was derived from subsidies and 40% from the sale of electricity.

The ROC buy-out price for the annual compliance period which commenced in April 2019 increased to GBP48.78 (2018-19 compliance period: GBP47.22), reflecting the average monthly percentage change in RPI during 2018. On average, the Company received 1.42 ROC/MWh during the period across the UK portfolio at an average price of GBP46.24/ROC (30 June 2018: GBP44.50/ROC).

During the period the Company sold the 0.5MW onshore wind asset included in the 53.3MW solar portfolio acquired in April 2018.

Further details on the portfolio as at 30 June 2019 is shown in the charts on pages 14-15. The analysis provided illustrates the diversification of the portfolio across inverter and panel manufacturers and O&M counterparties. The level of diversification achieved allows for efficiencies of scale through reducing ongoing operational costs.

Market Developments

UNITED KINGDOM

In June 2019, Prime Minister Theresa May announced the UK's intention to introduce new legislation which would commit the UK to eradicating its net contribution to climate change by 2050. This announcement further strengthens the UK's role in leading climate change initiatives. The target is expected to be achieved through a combination of initiatives including balancing carbon emissions with carbon removal (e.g. carbon capture and storage technologies) and the adoption of low-carbon technologies. Whilst the announcement does not address the solar industry directly, it reinforces the UK's long-term commitment to renewable generation sources.

There has been no update on the UK's capacity market, which continues to be in a "standstill" period following its suspension in November 2018. An update is expected at the end of September 2019 in relation to the potential approval of new state aid. The Company has no revenues directly linked to the capacity market mechanism.

In July 2018, Ofgem initiated a consultation into residual network charging arrangements. Amongst the reforms is a change to the Balancing Services Use of System ("BSUoS"), BSUoS being the means through which the cost to National Grid of balancing the network is recovered. Currently, generators connecting into the distribution network receive BSUoS as a credit, in light of the positive effect this capacity had on alleviating constraint on the transmission network. This was in response to changes in the use of the network due to growing volumes of renewable and distribution connected generation. In May 2019, Ofgem published an update on timing and next steps. Ofgem ruled out making any changes to embedded benefits before April 2021 and similarly the possibility of new arrangements for residual charging will not be implemented before April 2023. The Investment Manager continues to actively monitor the situation and engage with Ofgem. Embedded benefits revenue represents less than 2% of lifetime revenues for the portfolio and any expected impact on valuations is expected to be limited.

In March 2019, the UK's deadline to exit the European Union was extended. As Brexit negotiations continue the Investment Manager remains of the view that Brexit is unlikely to have a significant impact on the Company's prospects, from both a financial and operational perspective.

AUSTRALIA

On 18 May 2019, the Federal Government elections took place in Australia. The incumbent minority Coalition Government, consisting of the Liberal and National parties, was elected for a third three-year term. The elected Coalition Government will be led by Scott Morrison who replaced former Prime Minister Malcolm Turnbull on 31 August 2018 following an internal leadership vote.

The Coalition Government has confirmed the emissions reduction target at 26%-28% by 2030 (against 2005 levels) and proposed no replacement to the existing Renewable Energy Target for which the target gigawatt hours from renewable generation does not increase beyond 2020. Support in the form of Large-Scale Generation Certificates ("LGCs") remained unchanged and is expected to end in 2030. Following the election result, the Investment Manager does not expect any relevant energy policy updates in the immediate future.

In May 2019, Marginal Loss Factors ("MLFs") for FY2019 were published by the Australian Energy Market Operator ("AEMO"). MLFs reflect the amount of energy assumed to be lost in the transmission network and are assigned to each individual renewable asset. The MLFs published indicated a decrease in MLFs of up to 5% which will have an adverse impact on generators in 2019-20. The change was based on the expected increase in the number of new generators coming online and an ageing transmission network. The Bannerton asset was the most affected asset in our Australian portfolio with the annual MLF for 2019-20 decreasing by more than 10%.

It is the Investment Manager's view the MLF methodology is not fit for purpose and it is working alongside other industry participants to recommend amendments to the existing MLF methodology to reflect a more accurate transmission loss factor based on regional local consumption. The Investment Manager will reflect the results of its assessment relative to the MLF methodology in due course.

Whilst the country adapts to new technologies and greater demand and the associated challenges, the market does continue to benefit from significant electricity demand and an irradiation profile well suited to solar development.

HISTORIC POWER PRICES

UNITED KINGDOM

Wholesale power prices decreased throughout the reported period to approximately GBP40/MWh in June 2019 following a period of relatively high prices during the second half of 2018. This reduction was driven by declining natural gas prices globally as a result of new supplies from the US and Australia entering the market. In addition to this, historically high gas storage levels in Western Europe following one of the mildest winters on record had a downward effect on spot and forward prices for natural gas resulting in further downward pressure on wholesale power prices.

The average power price achieved across the UK portfolio during the period, including fixed price arrangements was GBP47.25/MWh, versus GBP46.54/MWh in the first half of 2018, an increase of 1.5%. The proportion of current revenues subject to fixed price arrangements across the UK portfolio as at 30 June 2019 was 45%, at a weighted average price of GBP53.38/MWh.

The existing fixed price arrangements have differing tenures. The contract with the longest tenure expires in March 2021. The percentage of fixed price arrangements will gradually decrease between 30 June 2019 and March 2021. These arrangements provide greater visibility over future cash flows and limit potential price volatility in the short and medium term. The Company will continue to monitor forward electricity prices and, where appropriate, will enter into new fixed price arrangements.

The Investment Manager regularly reassesses conditions in the electricity market and updates its view on likely future movements. The Company retains the option to fix the PPAs for its assets at any time. The Investment Manager is satisfied that the current proportion of fixed price arrangements provides the appropriate level of price certainty.

PPA tenders

As announced in the 2018 Annual Report, in Q3 2018 the Company launched a tender for the supply of PPAs to 22 UK sites representing 179MW. On 1 April 2019, the new PPA contracts were entered into for a period of 10 years resulting in an average increase in pass-through rates at which ROCs and power are paid of 1.43% and 0.5%, respectively, against the previous agreements. The new PPA agreements had a positive impact on the Company's NAV of GBP3.7m.

AUSTRALIA

Gas peaking power plants remain a key price setter for the Australian electricity markets.

Wholesale power prices in Victoria increased dramatically during the Australian summer months. On 25 January 2019, spot prices reached the maximum level of A$14,500/MWh. This was driven by extremely high temperatures as well as impacted by three of out six generation units being offline.

During the period, the weighted average spot price in Queensland was A$83.50/MWh, versus A$72.00/MWh in the first half of 2018, an increase of 16%.

Prices were higher in Victoria with a weighted average spot price of A$157.00/MWh, versus A$103.00/MWh in the first half of 2018, an increase of 52%.

POWER PRICE FORECASTS

The Investment Manager uses forward looking power price assumptions to assess the likely future income of the portfolio assets for valuation purposes. The Company's assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis for each market.

UNITED KINGDOM

During the period, power price forecasts decreased by 3.8% mainly due to movements in the short and medium term. The main driver of this reduction was the stronger pound assumptions forecast by one of the third-party consultants. In the longer term the deployment of more low-cost generation, notably onshore wind, is expected to help offset the upward pressure from an increase in demand.

The Company's forecasts assume an increase in power prices in real terms over the medium to long-term of 0.4% per annum (31 December 2018: 0.6%).

Where the assumed asset life extends beyond 2050, the Investment Manager has assumed no real growth in forecast power prices.

Australia

During the period, Queensland and Victoria power price forecasts increased by 3.15% and 7.23% respectively,

mainly due to assumptions around the retirement of coal plants in the medium to long term. This is not only driven by increasing maintenance costs, but also by future decarbonisation ambitions, which are expected to require the retirement of coal capacity to reach current policy targets.

The Company's forecasts assume an increase in Queensland and Victoria power prices in real terms over the medium to long-term of 1.16% and 0.79% respectively, per annum.

THIRD PARTY DEBT ARRANGEMENTS AND GEARING POSITION

As at 30 June 2019, total outstanding long-term debt was GBP394.1 million, representing 36% of the GAV (calculated as NAV plus outstanding debt) of the Company and its Subsidiaries (31 December 2018: GBP399.4 million or 36% of GAV).

At period end, total outstanding debt including RCFs was GBP499.1 million, representing 45% of GAV (31 December 2018: GBP504.4 million or 45% of GAV.)

Long-Term Facilities

As at 30 June 2019, GBP394.1 million of long-term debt facilities were outstanding (including GBP4.8m of nominal revaluation of the inflation-linked facilities).

Inflation linked debt facilities represented GBP89.1 million of the total long-term debt outstanding as at 30 June 2019.

At 30 June 2019, the average cost of long-term debt, was 2.9% per annum (2018: 2.8%), including the cost of the interest inflation linked facilities of 1.29% per annum.

Revolving Credit Facilities

The Company currently holds two separate RCF facilities totalling GBP105 million. The RCFs remained fully drawn during the period.

The GBP40 million RCF facility in place for FS Holdco 1 has been extended for three years and is now due to expire in March 2022. The terms of the new facility offer a more favourable margin, resulting in an ongoing interest expense saving for the Company.

At 30 June 2019, the total annualised cost of the RCFs was 2.8% (2018: 1.7%). The increase in costs compared to 2018 is due to the facilities being fully drawn following the acquisitions completion in 2018.

The Investment Manager expects to refinance the remaining balance either through future equity raisings or other long-term refinancing arrangements.

Debt Facilities

The following table summarises the debt position of the Fund as at 30 June 2019.

 
          Borrower     Holding    Provider                  Facility         Amount   Maturity         Applicable Rate 
                       Vehicle                                  Type    Outstanding 
                                                                                (m) 
                    ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
                     FS Holdco                           Fixed rate, 
FS Holdco                    1       MIDIS          fully-amortising        GBP62.3     Mar-24                   3.78% 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
                                     MIDIS                 Inflation        GBP62.1     Mar-34            RPI Index1 + 
                                            linked, fully-amortising                                             1.08% 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
                                 Santander                Term loan,        GBP23.9     Mar-34           LIBOR + 1.70% 
                                                    fully-amortising 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
Project SPVs         FS Holdco         RBS                 Term loan       GBP159.2     Sep-19           LIBOR + 1.75% 
 (25 vehicles)               2 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
Second Generation    FS Holdco                           Fixed rate, 
 Portfolio 1                 3       MIDIS          fully-amortising         GBP4.2     Aug-34                   4.40% 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
                  Inflation        GBP27.0                                              Aug-34            RPI Index1 + 
                    linked,                                                                                      1.70% 
           fully-amortising 
   ------------------------  -------------  --------------------------------------------------  ---------------------- 
Foresight Solar      FS Holdco        CEFC                 Term loan         A$62.0     Jun-27       Base rate (2.95%) 
 Australia Pty              42                                                                         + margin (2.55% 
 Ltd                                                                                                         to 2.80%) 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
Longreach Finco                        CEFC                 Term loan         A$12.0    Mar-22   Base rate    + margin 
 Pty Ltd                                                                                           (2.57%)     (constr 
                                                                                                 Base rate    - 1.55%; 
                                                                                                  (3.28%)3   operation 
                                                                                                 Base rate    - 1.40%) 
                                                                                                   (2.58%) 
                                                                                                 Base rate 
                                                                                                  (3.14%)3 
------------------------------   ----------  ------------------------  -------------  --------  ----------  ---------- 
Longreach Finco                        MUFG                 Term loan         A$12.0    Mar-22 
 Pty Ltd 
------------------------------   ----------  ------------------------  -------------  --------  ----------  ---------- 
Oakey 1 Finco                          CEFC                 Term loan         A$16.1    Mar-22 
 Pty Ltd 
------------------------------   ----------  ------------------------  -------------  -------- 
Oakey 1 Finco                          MUFG                 Term loan         A$16.1    Mar-22 
 Pty Ltd 
------------------------------   ----------  ------------------------  -------------  --------  ----------  ---------- 
Oakey 2 Finco                          CEFC                 Term loan         A$42.5    Oct-22       Base rate (2.48%) 
 Pty Ltd                                                                                                       + 2.25% 
------------------------------   ----------  ------------------------  -------------  --------  ---------------------- 
TOTAL LONG-TERM                                                                          GBP427.4 
 DEBT 
--------------------------------------------------------------------     ------------------------  ---------------------- 
FS Holdco            FS Holdco   Santander                 Revolving        GBP40.0     Mar-22           LIBOR + 1.75% 
                             1                                credit 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
FS Debtco            FS Holdco   Santander                 Revolving        GBP65.0     Feb-20           LIBOR + 2.00% 
                             2                                credit 
------------------  ----------  ----------  ------------------------  -------------  ---------  ---------------------- 
TOTAL REVOLVING                                                                          GBP105.0 
 DEBT 
--------------------------------------------------------------------     ------------------------  ---------------------- 
TOTAL DEBT                                                                               GBP532.4 
--------------------------------------------------------------------     ------------------------  ---------------------- 
 
   1   RPI-linked facilities have a long-term inflation assumption of 2.75% 
   2   Australian debt presented in full and not prorated for Foresight ownership proportion 

3 Interest rate swap for 100% of the outstanding debt during the initial 5 years, 75% from years six to ten and 50% thereafter

During the period the Company repaid total debt of GBP6.3 million.

The Company continues to have limited exposure to benchmark rate movements in the UK and Australia as a result of the long-term interest rate swaps in place to protect the Company from underlying interest rate movements. Sterling denominated debt facilities priced over LIBOR benefit from interest rate swaps hedging 80% of the outstanding debt during the terms of the loans. In Australia, debt facilities entered into with the CEFC have no exposure to the Bank Bill Swap Bid Rate ("BBSY") as the rate was fixed at financial close. Debt facilities provided by MUFG have in place interest rate swaps on a decreasing nominal amount for a notional tenor of 20 years.

Refinancing of UK debt facilities

Post period end, on 2 August 2019, the Investment Manager successfully completed the refinancing of 28 of the Company's UK assets (321 MW). The debt refinancing totalled GBP245 million, compromising a GBP170 million term loan facility, a GBP65 million RCF and a GBP10 million debt service reserve facility. The refinancing was secured on attractive terms. Although the refinancing was not completed until after the end of the period, due to the material impact of the new terms this has been taken into consideration for the NAV as at 30 June 2019, resulting in an increase in the Company's NAV of GBP17.0 million.

The GBP170 million fully amortising term loan facility will expire in March 2036 and will be provided jointly by Landesbank Hessen-Thüringen Girozentrale ("Helaba") and Sumitomo Mitsui Banking Corporation ("SMBC"). The term loan facility all-in annual cost of debt is approximately 230bps and includes interest rate swaps hedging 100% of the outstanding debt during the term of the loan. The proceeds of the loan facility will be used partially to refinance the asset-level debt facilities expiring in September 2019.

The GBP65 million RCF has a three-year term and will be provided by National Westminster Bank plc ("NatWest"). This facility replaces the existing GBP65 million RCF entered into in 2017.

Based on the Company's 30 June 2019 GAV and following the refinancing, the total outstanding long-term debt of GBP404.9 million represents gearing of approximately 37%. The total outstanding debt including revolving credit facilities of GBP509.9 million represents approximately 46% of GAV.

DIVIDS

The Company is targeting a full year dividend for the year ending 31 December 2019 of 6.76 pence, representing a 2.70% increase against the dividend declared for the 2018 financial year. The Company has met all target dividends since IPO.

DIVID TIMETABLE FOR FY2019

 
 Dividend      Amount    Status      Payment Date 
           ----------  --------  ---------------- 
Interim 1  1.69 pence  Approved    30 August 2019 
---------  ----------  --------  ---------------- 
Interim 2  1.69 pence  Approved  29 November 2019 
---------  ----------  --------  ---------------- 
Interim 3  1.69 pence  Targeted           Q1 2020 
---------  ----------  --------  ---------------- 
Interim 4  1.69 pence  Targeted           Q2 2020 
---------  ----------  --------  ---------------- 
TOTAL      6.76 pence 
---------  ----------  --------  ---------------- 
 

The first interim dividend of 1.69 pence for the year ending 31 December 2019 will be paid on 30 August 2019.

On 19 August 2019 the Board approved the second interim dividend relating to FY2019 of 1.69 pence per share.

 
Dividend Timetable - Interim 2 
                                ---------------- 
Ex-dividend Date                 24 October 2019 
------------------------------  ---------------- 
Record Date                      25 October 2019 
------------------------------  ---------------- 
Payment Date                    29 November 2019 
------------------------------  ---------------- 
 

Full details of the scrip dividend alternative that is being offered in respect of the Dividend (the "Scrip Offer"), its timetable and the Scrip Dividend Scheme can be found in the Scrip Dividend Alternative Offer Document (the "Scrip Document") available on the Company's website to view and/or download at fsfl.foresightgroup.eu/investor-relations/. The Scrip Document is also available on the National Storage Mechanism website at www.morningstar.co.uk/uk/NSM and copies are also available for inspection at JTC House, 28 Esplanade, St. Helier, Jersey JE2 3QA.

DIVID COVER

Total dividends of GBP18.1 million were paid during the period to 30 June 2019 with GBP35.2 million paid during the 12 months to 30 June 2019. Compared with the relevant net cash flows of the Company and underlying investments, these dividends were covered 1.12 times (30 June 2018: 1.14 times).

FOREIGN EXCHANGE

The Company is exposed to foreign exchange movements in respect of its investments in Australia. As such, the Company continues to implement a hedging strategy in order to reduce the possible impact of currency fluctuations and to minimise the volatility of equity returns and cash flow distributions. The Company has entered into forward contracts for up to two years for an amount equivalent to approximately 75% of its expected distributable foreign currency cash flows at project level. Due to the predictable nature of solar irradiation in Australia and the known dividend payment dates, the Investment Manager believes this hedging strategy will protect the cash yields from the Australian assets.

Foreign exchange hedging will not be applied to the cost of the equity investments, considering the long-term investment strategy of the Company.

The Company reviews its foreign exchange strategy on a regular basis with the objective of limiting the short-term volatility in sterling distributable cash flows caused by foreign exchange fluctuations and of optimising the costs of the hedging instruments.

ONGOING CHARGES

The ongoing charges ratio for the period to 30 June 2019 was 1.18% (31 December 2018: 1.18%). This has been calculated using methodology as recommended by the Association of Investment Companies ("AIC"). Asset management fees charged by Foresight Group LLP on an arm's length basis at project level are excluded from the ongoing charge ratio.

INVESTMENT PERFORMANCE

The NAV per share as at 30 June 2019 decreased to 109.6 pence compared to 111.2 pence as at 31 December 2018.

MOVEMENTS IN NAV

A breakdown in the movement of the Company's NAV during the reporting period is shown in the table below.

 
                                                     NAV  NAV per share 
                                             -----------  ------------- 
NAV as at December 2018                        GBP610.3m         111.2p 
-------------------------------------------  -----------  ------------- 
Dividend paid                                 GBP(18.1)m         (3.3)p 
-------------------------------------------  -----------  ------------- 
Interest earned                                 GBP22.9m           4.2p 
-------------------------------------------  -----------  ------------- 
Management fee                                 GBP(3.1)m         (0.6)p 
-------------------------------------------  -----------  ------------- 
Finance costs                                  GBP(1.3)m         (0.2)p 
-------------------------------------------  -----------  ------------- 
Other costs (incl. Corporation Tax)            GBP(2.2)m         (0.4)p 
-------------------------------------------  -----------  ------------- 
Inflation*                                     GBP(2.3)m         (0.4)p 
-------------------------------------------  -----------  ------------- 
Refinancing Terms*                              GBP17.0m           3.0p 
-------------------------------------------  -----------  ------------- 
PPA Terms*                                       GBP3.7m           0.7p 
-------------------------------------------  -----------  ------------- 
Discount Rate*                                  GBP14.7m           2.7p 
-------------------------------------------  -----------  ------------- 
Valuation Date*                                GBP(3.0)m         (0.5)p 
-------------------------------------------  -----------  ------------- 
Power Curve*                                  GBP(32.4)m         (5.9)p 
-------------------------------------------  -----------  ------------- 
Large-Scale Generation Certificate ("LGC") 
 Curve*                                        GBP(3.7)m         (0.7)p 
-------------------------------------------  -----------  ------------- 
Other (incl. FX)*                              GBP(1.0)m         (0.2)p 
-------------------------------------------  -----------  ------------- 
NAV as at June 2019                            GBP601.5m         109.6p 
-------------------------------------------  -----------  ------------- 
 
   *    Movement in the valuation of underlying solar assets 

VALUATION OF THE PORTFOLIO

The Investment Manager is responsible for providing fair market valuations of the Company's underlying assets to the Board of Directors. The Directors review and approve these valuations following appropriate challenge and examination. Valuations are undertaken quarterly. A broad range of assumptions are used in the valuation models. These assumptions are based on long-term forecasts and are not affected by short-term fluctuations, be it economic or technical.

It is the policy of the Investment Manager to value with reference to Discounted Cash Flows ("DCF") from the later of commissioning or transaction completion. This is partly due to the long periods between agreeing an acquisition price and financial completion of the acquisition. Occasionally this delay reflects construction. Revenues accrued do not form part of the DCF calculation in making a fair valuation.

The current portfolio consists of non-market traded investments and valuations are based on a DCF methodology or held at cost where the assets have not yet reached commissioning. This methodology adheres to both IAS 39 and IFRS 13 accounting standards as well as the International Private Equity and Venture Capital ("IPEV") Valuation Guidelines.

The Company's Directors review and challenge the operating and financial assumptions, including the discount rates, used in the valuation of the Company's portfolio and approve them based on the recommendation of the Investment Manager.

METHODOLOGY

During the period, the Investment Manager undertook a review of the discount rates applied to the valuation of the portfolio. As a result of this analysis, discount rates for the UK portfolio have been reduced by 0.25% in order to bring valuations in line with the expected market pricing for operational assets.

The unlevered discount rate has been reduced from 6.75% to 6.50%. This applies to assets that have been acquired using the RCF facilities of the Company, being Shotwick, Sandridge and Wally Corner.

Assets that have debt in place at portfolio level continue to be valued using a premium to the unlevered rate of 0.75%, at a discount rate of 7.25%. Assets that have debt at SPV level, and are therefore not cross-collateralised, are considered to carry a higher premium of 1.00% and as such are valued using a discount rate of 7.50%.

The discount rate used for UK asset cashflows which have received lease extensions beyond the initial investment period of 25 years is 8.50% for years subsequent, reflecting the merchant risk of the expected cash flows beyond the initial 25-year period.

For the Australian portfolio, operational assets with PPAs in place are valued using an 8.50% discount rate. Assets under construction are valued at cost and will continue to be held at cost until the assets are connected to the grid and fully operational. These asset valuations are updated quarterly to reflect movements related to exchange rates.

The weighted average discount rate across the portfolio is 7.15% compared to 7.30% as at 31 December 2018.

Asset life

The weighted life of the UK portfolio as at 30 June 2019 is 28.4 years (31 December 2018: 28.4 years) from the date of commissioning.

The average useful economic life across 37 of the 50 UK assets goes beyond 25 years, averaging 30.5 years from the date of commissioning. Additional conservative operational and lifecycle costs are incorporated into the extended useful life period.

Assets located in Australia currently assume a useful economic life of 25 years. This assumption is currently under review by the Investment Manager.

DIVIDS PAID

The Company paid dividends of GBP18.1m during the six-month period to 30 June 2019 or 3.38p per share.

INTEREST EARNED

The Company and its subsidiaries accrued GBP22.9 million of investment income during the period. This is the interest accrued on shareholder loans.

COSTS

Total costs of GBP6.6 million, which include corporation tax, management fees, finance and other costs, were incurred by the Company and its subsidiaries on a consolidated basis during the period.

INFLATION

The Company continues to use 2.75% as its medium/long-term inflation assumption. As at 30 June 2019, the valuation models reflect Office for Budget Responsibility ("OBR") RPI forecasts for the periods 2019, 2020 and 2021 of 2.95%, 2.77% and 3.02% respectively. The Company's RPI assumption adopted for subsequent years has remained unchanged at 2.75%.

REFINANCING TERMS

This movement reflects the updated debt terms secured in the post-period refinancing of UK debt facilities. The positive movement results from the margins and LIBOR swap rates of the new facilities being lower than the refinancing assumptions made at the time of acquisition.

PPA TERMS

On 1 April 2019, new PPA contracts across 22 assets representing 179MW were entered for a period of 10 years. The new contracts resulted in an average increase in pass-through rates at which ROCs and power are sold of 1.43% and 0.5%, respectively, against the previous PPAs.

DISCOUNT RATE

As reported above, the Company's UK discount rates have been reduced by 0.25% for unlevered and levered assets.

During the period, Oakey 1 and Bannerton have reached full export and have been revalued using a discount rate methodology, applying an 8.5.% discount rate for operational assets with PPA arrangements in place.

The Investment Manager regularly reviews the discount rate to ensure it remains in line with any changes to the market and risk profile of the Company.

VALUATION DATE

This movement represents the impact of moving from one valuation date to another. Over the life of an asset this movement will reduce the valuation to nil. Short-term increases arise from moving towards higher cash yields (and therefore discounting them less).

POWER CURVE

The Company uses forward looking power price assumptions to assess the likely future income of the portfolio assets for valuation purposes. The Company's assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis.

During the period there was a downward movement of 3.8% in the medium to long-term power price forecast for the UK market. The Company's forecasts continue to assume an increase in power prices in real terms over the medium to long-term of 0.4% per annum (31 December 2018: 0.6%).

Movements during the period also include the impact of revaluing Bannerton using a discount rate methodology and consequent update of the Victoria power price curve against the assumption made at the time of acquisition, resulting in a negative impact on the asset valuation. The impact for Oakey 1 was negligible.

Large-scale Generation Certificates ("LGC") CURVE

The Company uses forward looking LGC price assumptions to assess the likely future income of the certificates generated by the Australian portfolio assets for valuation purposes. The Company's assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis.

OTHER MOVEMENTS

This includes other factors behind the valuation movements, including long term O&M cost assumptions, insurance premiums and changes in exchange rate assumptions.

VALUATION SENSITIVITIES

Where possible, assumptions are based on observable market and technical data. In many cases, such as forward power prices, independent advisors are used to provide evidenced information enabling the Investment Manager to adopt a prudent approach. The Investment Manager has set out the inputs which it has ascertained would have a material effect upon the NAV in note 17 of the Financial Statements. All sensitivities are calculated independently of each other.

OUTLOOK

The UK has more than 13GW of solar PV installed capacity however the market has demonstrated only marginal growth since the closure of the RO Scheme in 2016. As a result, investment opportunities in the UK subsidised market continue to be limited as the ongoing consolidation in the secondary market is compressing returns to levels that do not meet the minimum requirements of the Company.

We continue to review international investment opportunities in markets that benefit from regulatory support. However, European markets are also showing signs of increased consolidation and inflated asset valuations at present. This trend is expected to continue in European markets as competition for assets increase as a result of new entrants with lower target yield requirements and as the introduction of new subsidies is expected to be limited over time.

The announcement of the UK's intention to commit to a net zero emissions target by 2050 was a positive development for the renewable industry and although it did not address the solar industry directly it is expected to create a supportive environment for the future growth of installed capacity, at a time when the solar levelised cost of energy continues on a downwards trajectory. This is expected to act as a catalyst for subsidy-free investment opportunities.

We continue to review the Australian market and are closely monitoring the development of subsidy-free markets in Southern Europe and the UK. In Southern Europe, this market has developed rapidly and a number of relevant transactions have recently been announced in Spain and Portugal with attractive PPA structures. In the UK, whilst this market has progressed, we remain of the view that the current market economics are not yet in-line with the Company's return requirements. However, we expect this market to develop rapidly and it therefore could present significant opportunity in the future.

Foresight Group's experience in the aforementioned markets provides the Investment Manager with a solid understanding of the value-accretive potential of these investment opportunities.

In recent periods we have identified and delivered on a significant number of optimisation initiatives that have created additional value for the Company, including the post-period completion of the GBP245 million refinancing and the PPA re-tender finalised in April 2019. We will continue to explore value enhancement initiatives across the portfolio, including the Australian assets, as the consolidation of the existing portfolio progresses and new technical, commercial and financial solutions are identified.

Asset Manager's Report

The Asset Management services provided ensure the day to day operation of the sites is robust with sound operational and commercial decisions. The comprehensive list of services includes:

 
    --      Technical and financial performance monitoring 
    --      Contractual compliance of all operational agreements 
    --      Portfolio optimisation including renegotiation of project 
             contracts, spare parts management and equipment replacement 
             strategy and technology improvements 
    --      Liaising with and oversight of O&M counterparties 
    --      Debt reporting and other debt compliance services 
    --      Accounting, bookkeeping, tax compliance and statutory 
             reporting of all SPVs 
    --      Corporate governance activities including health and 
             safety compliance. 
 

Portfolio Performance

The operational performance during the period has been robust with electricity generation 2.9% above base case, when adjusted for compensation received. Performance has been driven by irradiation 3.1% above base case.

The portfolio has benefited from previous remedial works to specific sites and optimisation initiatives to improve the reliability of the assets in general. In addition, the Asset Manager has continued to pro-actively engage with service providers including Distribution Network Operators ("DNOs") and Operation and Maintenance ("O&M") contractors and sub-contractors. The Asset Manager believes this will result in improved optimisation of 'planned' outages and a reduction in unplanned outages.

The use of real-time data at asset level, together with closely working with O&M providers, is expected to reduce downtime, improve efficiency in the short term and build a greater understanding of the replacement of key components. It is also expected to help with warranty management down to string, solar panel level or inverter performance level thereby optimising output while minimising the total operating cost base.

Incidents affecting the UK portfolio during the period were mainly caused by grid outages (Fields Farm, Welbeck) and equipment failures that have been promptly rectified during the period, as was the case with Wymeswold which was affected by faults on string cables and inverter issues.

During the period, in Australia, two additional assets reached full export capacity, Bannerton and Oakey 1. The projects have previously experienced construction and commissioning delays due to the new grid commissioning requirements introduced by AEMO in 2018 and as a result of EPC contractor RCR Tomlinson ("RCR") going into administration in November 2018, particularly in the case of Oakey 1. The delays in commissioning are not expected to have a material impact on overall financial performance as the Company is contractually and financially protected and the Company will continue to enforce all its contractual rights.

Longreach continues to experience some limited levels of grid curtailment caused by export constraints at one of the local substations. A solution to the curtailment issue is being discussed with the local DNO and is expected to be implemented in 2020.

ASSETS UNDER CONSTRUCTION

Oakey 2 achieved initial export in April 2019 as part of staged commissioning process in the Australian market. The project is expected to begin full commissioning in the second half of 2019.

PRODUCTION

The production figures below have been adjusted, where relevant, for events where compensation has been, or will be, received.

 
                       MW  Total Production  Production  Irradiation 
                                      (kWh)    Variance     Variance 
                    -----  ----------------  ----------  ----------- 
Abbey Fields          4.9         2,858,791        5.5%         5.3% 
------------------  -----  ----------------  ----------  ----------- 
Abergelli             7.7         3,958,282       -1.6%        -2.2% 
------------------  -----  ----------------  ----------  ----------- 
Atherstone           14.8         7,665,666        5.9%         6.6% 
------------------  -----  ----------------  ----------  ----------- 
Bilsthorpe            5.7         3,051,355        6.0%         8.8% 
------------------  -----  ----------------  ----------  ----------- 
Bournemouth          37.3        21,618,620        3.2%        -2.4% 
------------------  -----  ----------------  ----------  ----------- 
Bulls Head            5.5         2,972,019        8.5%         7.7% 
------------------  -----  ----------------  ----------  ----------- 
Castle Eaton         17.8         9,474,475        9.7%         4.4% 
------------------  -----  ----------------  ----------  ----------- 
Coombeshead           9.8         5,470,793        0.3%         1.0% 
------------------  -----  ----------------  ----------  ----------- 
Copley               30.0        16,345,528        9.4%         5.8% 
------------------  -----  ----------------  ----------  ----------- 
Crow Trees            4.7         2,517,206        9.6%         8.6% 
------------------  -----  ----------------  ----------  ----------- 
Cuckoo Grove          6.1         3,395,399       -9.7%        -5.7% 
------------------  -----  ----------------  ----------  ----------- 
Field House           6.4         3,467,484        1.0%         0.7% 
------------------  -----  ----------------  ----------  ----------- 
Fields Farm           5.0         2,005,628      -20.1%         5.1% 
------------------  -----  ----------------  ----------  ----------- 
Gedling               5.7         3,038,120        8.0%         8.6% 
------------------  -----  ----------------  ----------  ----------- 
High Penn             9.6         5,094,344        4.0%        -4.2% 
------------------  -----  ----------------  ----------  ----------- 
Highfields           12.2         5,991,541        0.2%         3.6% 
------------------  -----  ----------------  ----------  ----------- 
Homeland             13.2         7,225,856       -4.3%        -4.9% 
------------------  -----  ----------------  ----------  ----------- 
Hunters Race         10.3         5,917,826        4.0%         1.9% 
------------------  -----  ----------------  ----------  ----------- 
Kencot Hill          37.2        20,204,496        6.3%         4.7% 
------------------  -----  ----------------  ----------  ----------- 
Landmead             45.9        23,869,171        5.1%         8.2% 
------------------  -----  ----------------  ----------  ----------- 
Lindridge             4.9         2,694,682        7.1%         3.2% 
------------------  -----  ----------------  ----------  ----------- 
Longreach            17.3        16,810,431       -7.1%         3.4% 
------------------  -----  ----------------  ----------  ----------- 
Manor Farm           14.2         7,275,845        9.7%         7.3% 
------------------  -----  ----------------  ----------  ----------- 
Marsh Farm            9.1         4,964,413       -0.1%         0.9% 
------------------  -----  ----------------  ----------  ----------- 
Membury              16.5         8,690,608        2.8%         1.0% 
------------------  -----  ----------------  ----------  ----------- 
Misson                5.0         2,724,775        6.8%         3.2% 
------------------  -----  ----------------  ----------  ----------- 
Nowhere               8.1         4,685,693       10.3%        10.1% 
------------------  -----  ----------------  ----------  ----------- 
Paddock Wood          9.2         5,115,386        5.0%         1.8% 
------------------  -----  ----------------  ----------  ----------- 
Park Farm            13.2         7,116,383       12.4%         6.1% 
------------------  -----  ----------------  ----------  ----------- 
Pen Y Cae             6.8         3,417,142       -2.7%        -1.6% 
------------------  -----  ----------------  ----------  ----------- 
Pitworthy            15.6         7,736,037       -0.4%        -0.9% 
------------------  -----  ----------------  ----------  ----------- 
Playters              8.6         4,711,475        1.6%         4.4% 
------------------  -----  ----------------  ----------  ----------- 
Port Farm            34.7        18,838,830        6.1%         2.6% 
------------------  -----  ----------------  ----------  ----------- 
Roskrow               8.9         4,672,968       -5.7%        -2.6% 
------------------  -----  ----------------  ----------  ----------- 
Sandridge            49.6        25,691,297       -0.4%         1.5% 
------------------  -----  ----------------  ----------  ----------- 
Sawmills              6.6         3,548,373       -1.3%        -2.0% 
------------------  -----  ----------------  ----------  ----------- 
Sheepbridge           5.0         2,755,980       11.1%        11.2% 
------------------  -----  ----------------  ----------  ----------- 
Shotwick             72.2        36,378,464        3.1%         2.8% 
------------------  -----  ----------------  ----------  ----------- 
Southam              10.3         5,433,151        5.3%         4.1% 
------------------  -----  ----------------  ----------  ----------- 
Spriggs              12.0         6,596,490        6.8%         0.5% 
------------------  -----  ----------------  ----------  ----------- 
Steventon            10.0         5,380,741        1.5%         5.5% 
------------------  -----  ----------------  ----------  ----------- 
SV Ash                8.4         4,464,156        7.1%         4.0% 
------------------  -----  ----------------  ----------  ----------- 
Tengore               3.6         1,931,979        2.0%         0.7% 
------------------  -----  ----------------  ----------  ----------- 
Trehawke             10.6         5,997,694        2.4%         2.4% 
------------------  -----  ----------------  ----------  ----------- 
Upper Huntingford     7.7         3,929,512       -0.1%         0.3% 
------------------  -----  ----------------  ----------  ----------- 
Verwood              20.7        11,351,409        1.8%         0.8% 
------------------  -----  ----------------  ----------  ----------- 
Wally Corner          5.0         2,819,692        6.9%         5.0% 
------------------  -----  ----------------  ----------  ----------- 
Welbeck              11.3         5,653,498       -1.1%         8.8% 
------------------  -----  ----------------  ----------  ----------- 
Wymeswold            34.5        16,852,756        0.6%         7.9% 
------------------  -----  ----------------  ----------  ----------- 
Yarburgh              8.1         4,524,994        6.3%         8.0% 
------------------  -----  ----------------  ----------  ----------- 
Yardwall              3.0         1,718,255        0.9%         0.1% 
------------------  -----  ----------------  ----------  ----------- 
Total               740.4       400,625,711 
------------------  -----  ----------------  ----------  ----------- 
Weighted Total                                     2.9%         3.1% 
------------------  -----  ----------------  ----------  ----------- 
 

Sustainability and ESG

Sustainability and Environmental, Social and Governance ("ESG") considerations are at the core of the Company's strategy, helping to inform its investment process and its asset management operations. The following is a review of recent activities undertaken by the Company in terms of environmental stewardship, social engagement and good governance.

As mentioned in the Company's 2018 Annual Report, Foresight Group's Infrastructure team has refined its sustainability tracking and reporting to further improve its investment processes, enhance the sustainability performance of existing assets and demonstrate more comprehensively the environmental benefits and social contribution of the Group's activities. This resulted in the implementation of its Sustainable Investing in Infrastructure strategy, which focuses on ensuring all assets are evaluated prior to acquisition and throughout their ownership, in accordance with Foresight Group's Sustainability Evaluation Criteria. Based on the key metrics this exercise provides, the Company is able to report against the United Nations Sustainable Development Goals ("SDGs"). The SDGs represent a call to action for all UN member states to promote prosperity while protecting the environment. Of the SDGs, the Company contributes most significantly to the following:

 
               CONTRIBUTION TO SUSTAINABLE DEVELOPMENT GOALS 
--------------------------------------------------------------------------- 
Goal 3: "Good Health and Well-Being. Ensure healthy lives and 
 promote well-being for all at all ages." Achieved through the 
 reduction of pollution and emitted greenhouse gases ("GHGs") 
 by the installation and management of clean, low-carbon energy 
 generation assets. 
--------------------------------------------------------------------------- 
Goal 7: "Affordable and Clean Energy. Ensure access to affordable, 
 reliable, sustainable and modern energy." Achieved by driving 
 a reduced reliance on fossil fuels by investment in utility-scale, 
 renewable energy generation assets. 
--------------------------------------------------------------------------- 
Goal 9: "Industry, Innovation and Infrastructure. Build resilient 
 infrastructure, promote inclusive and sustainable industrialization 
 and foster innovation." Achieved by future-proofing energy systems 
 through investment in de-centralised, interconnected generation 
 assets, using the latest technologies to maximise electrical 
 output. 
--------------------------------------------------------------------------- 
Goal 13: "Climate Action. Take urgent action to combat climate 
 change and its impacts." Achieved by demonstrating commitment 
 to the 2015 Paris Agreement and contributing to the globally 
 supported decarbonisation agenda through investment in low-carbon, 
 renewable energy assets. 
--------------------------------------------------------------------------- 
Goal 15: "Life on Land. Sustainably manage forests, combat desertification, 
 halt and reverse land degradation, halt biodiversity loss." 
 Achieved by preserving the integrity of land through investment 
 in low-impact and low-polluting technologies and introducing 
 environmental initiatives through active asset management, supporting 
 biodiversity and the ecosystem. 
 

There are five central themes to Foresight Group's Sustainability Evaluation Criteria. The Company's adherence, and contribution, to these themes is assessed below.

   1.        SUSTAINABLE DEVELOPMENT CONTRIBUTION 

This theme supports reporting on the development of affordable and clean energy, improved resource and energy efficiency and contributions to the fight against climate change. In H1 2019, the Company's 740MW operational portfolio produced over 400GWh of renewable energy. Furthermore, using Ofgem's assessment that the average UK household consumes 3.1 MWh per year, it can be inferred that the Company's portfolio generated enough clean electricity to power c. 130,000 UK homes during the period.

   2.        ENVIRONMENTAL FOOTPRINT 

Each asset is closely monitored for its localised environmental impact. As such, this criterion assesses potential environmental impacts such as emissions to air, land and water, effects on biodiversity and noise and light pollution. The Asset Manager ensures that solar power plants are managed in a manner that maximises the agricultural, landscape, biodiversity and wildlife potential, which can also contribute to lowering maintenance costs and enhancing security.

As a working partner of the Solar Trade Association, the Asset Manager recently helped to co-author the organisation's report, The Natural Capital Value of Solar (June 2019), which is available to download at:

https://www.solar-trade.org.uk/wp-content/uploads/2019/06/The-Natural-Capital-Value-of-Solar.pdf. In this report, Foresight Group highlights the importance of wetlands, drainage and on-site water management at solar sites, and the associated benefits such as the reduction of both nitrogen loads and intermittent pesticide fluxes on surrounding land, with the added positive effect of enhanced ease of access for O&M contractors and a resultant lower susceptibility to long-term land damage.

Furthermore, the Asset Manager's Environment and Sustainability Manager, James Jenkison, has continued to pursue a number of initiatives to ensure the solar power plants are being effectively managed for biodiversity. Such schemes include:

 
    --      Hedgerow and tree planting - To date, more than 35km 
             of hedgerows have been planted across the portfolio. 
             With the majority of hedgerow planting now complete, 
             the hedgerows are managed to ensure they develop into 
             dense species-rich habitats. Hedgerows help to promote 
             biodiversity, absorb carbon, improve both drainage and 
             soil quality and reduce site exposure to extreme weather 
             conditions. 
 --      Hedgerows are managed in the winter months every second 
          year to ensure that hedges and trees can flower and produce 
          berries as forage for insects, birds and other wildlife, 
          whilst also being managed to maintain good structure 
          and diversity in accordance with best practice guidance. 
    --      Building of animal refuges - Hibernacula and log piles 
             are built at most sites to provide natural shelter as 
             well as to help improve natural drainage. 
    --      Bat and bird boxes - The Asset Manager regularly installs 
             bird and bat boxes to attract local species to the sites. 
    --      Sheep grazing - Numerous sites have been either built 
             or adapted through the installation of barriers and the 
             protection of cabling, to ensure their suitability for 
             continued sheep grazing. 
    --      Beehive installation - The Asset Manager continues to 
             work with local bee keepers to install hives as a means 
             of helping to restore the native bee population and support 
             crop pollination and honey production. The Asset Manager 
             also encourages the productivity of these hives through 
             the planting of nectar rich wildflower species. 
    --      Climate change risk - Flood risk assessments have been 
             carried out for all sites. Panels are installed above 
             the 'worst-case scenario' water level and land drains, 
             swales and ponds are also maintained to ensure safe working 
             conditions and good soil condition which further promotes 
             diverse grass and wildflower growth. 
    --      Grassland management - A grassland cutting timetable 
             is being implemented to limit cutting in the Summer so 
             as to promote the growth, flowering and seed spreading 
             of wildflowers to encourage biodiversity and forage for 
             insects and birds. 
 
   3.        SOCIAL ENGAGEMENT 

During the acquisition process, and throughout an asset's lifecycle, the Company engages with contractors, local residents, community organisations, landowners and local authorities to promote public support for the project, maximise the local benefit and minimise any actual or perceived negative effects. This has been achieved through a number of initiatives:

 
 --      Community engagement - The Asset Manager regularly attends 
          parish council and local community meetings, conducts 
          visits with O&M providers, landowners and construction 
          companies to encourage community engagement and ensure 
          that local stakeholders understand the Asset Manager's 
          expectations of site management and to discuss areas 
          of improvement in management techniques. To date, over 
          67 site visits have been conducted by the Environment 
          and Sustainability Manager. 
 --      Community investment - The Company supports community 
          benefit schemes which assist local authorities in developing 
          and maintaining community assets and organisations. In 
          the six-month period to 30 June 2019, over GBP80k worth 
          of grants were provided to local communities throughout 
          the UK, bringing the total grants provided to date to 
          GBP225k. Further details of the community projects that 
          have benefitted from these funds will be provided in 
          the 2019 Annual Report. 
 --      Educational initiatives - A large part of generating 
          public support comes as a result of educational initiatives, 
          which help to promote an understanding, and appreciation 
          of, the benefit of solar power generation. To date in 
          2019, college tours have been undertaken at Gedling, 
          Southam and Wymeswold where students and staff were able 
          to witness first-hand the operational aspects of a solar 
          farm and the steps taken to maximise operational efficiency 
          and environmental stewardship. 
 --      Health and well-being - The management and monitoring 
          of Health and Safety ("H&S") onsite is a top priority 
          for the O&M contractor, which is responsible for recording 
          and reporting all H&S related incidents to the Asset 
          Manager on an ongoing basis. In addition to this, to 
          improve the management of SHEQ (Safety, Health, Environmental 
          and Quality), reinforce best practice and ensure regulatory 
          compliance, the Asset Manager appoints independent professionally 
          accredited H&S consultants. Consultants ensure that contractors 
          are appointed on the basis of their health and safety 
          competence and regularly visit the sites to ensure they 
          are meeting industry and legal standards. 
 
   4.        GOVERNANCE 

The Asset Manager actively reviews the regulatory and property consents of every solar asset to ensure compliance with the permissions and conditions attached and actively engages with local government organisations to ensure ongoing compliance. In addition to ensuring the Company is protected from potential legal action, this promotes trust with the sites' local communities.

Compliance

Integral to the maintenance of the Company's reputation is its regulatory compliance and adherence to relevant laws. The Company is committed to carrying out business fairly, honestly and openly and the Investment Manager has established policies and procedures to prevent bribery within its organisation. The Company has also committed to a policy to conduct all its business in an honest and ethical manner, taking a zero-tolerance approach to facilitation of tax evasion, whether under UK law or under the law of any foreign country.

As a means of ensuring that sustainability considerations are at the forefront of the investment process, the Investment Manager delivers Best Practice sessions to its staff. These sessions focus on how the sustainability performance of a given asset can be assessed, measured and improved, whilst also demonstrating how good ESG management can result in a financial upside.

   5.        Third Party Interactions 

Counterparty due diligence forms an essential part of ensuring that key counterparties are reputable, that they have a robust and sustainable supply chain and have a similarly aligned approach to governance, compliance and ESG as the Company, which must be evidenced by appropriate policies. Consequently, two initiatives are being undertaken by the Company to further enhance these processes with a view to improving overall asset performance and protecting the Company against reputational risk.

 
 --      Enhanced supplier and counterparty checks - The Company 
          now contracts out due diligence to an expert third party. 
          Using this highly specialised legal advisory and consultancy 
          firm allows for a greater depth of analysis to be conducted 
          in a shorter space of time, thus speeding up the acquisition 
          process and giving a higher degree of assurance that 
          the counterparties involved are both legally and financially 
          sound. 
 --      Active Supplier Engagement - A more formalised approach 
          to supplier engagement on the topic of ESG is being 
          developed, with the aim of encouraging more sustainable 
          practices in the operation and maintenance of the solar 
          sites. 
 

While the Company actively tracks data pertaining to the above criteria on an internal basis, it also seeks external validation of its performance through third party organisations:

 
 --      GRESB (Global Real Estate Sustainability Benchmark) 
          - The Company submitted the Southam Solar Farm to the 
          GRESB Infrastructure ESG Assessment in 2018, believing 
          this particular asset was representative of the portfolio 
          as a whole. For consistency it has also been resubmitted 
          for the 2019 assessment year. As a means of further 
          demonstrating our commitment to external validation, 
          the Investment Manager is currently reviewing options 
          for assessing the Company as a whole, one of which is 
          the GRESB Infrastructure ESG Fund Assessment. The results 
          of our 2018 GRESB Infrastructure ESG Assessment are 
          below. The results of the 2019 submission are due to 
          be released in September 2019 and will be published 
          in the 2019 Annual report: 
 
 
      Module  2018 Score  Peer Average 
              ----------  ------------ 
Environment       61/100        52/100 
------------  ----------  ------------ 
Social            71/100        60/100 
------------  ----------  ------------ 
Governance        47/100        46/100 
------------  ----------  ------------ 
 
 
 --      PRI (Principles for Responsible Investment) - The Investment 
          Manager has been a signatory to the United Nations-backed 
          PRI since 2013. The PRI is a globally recognised voluntary 
          framework concerned with the incorporation of ESG considerations 
          into the investment decision making process. As a signatory, 
          the Investment Manager reports annually on its responsible 
          investment activities by responding to asset-specific 
          modules in the PRI's Reporting Framework. In its recent 
          2019 assessment, the Investment Manager achieved an 
          A+ level rating for 'Strategy and Governance', the highest 
          possible rating, surpassing the peer average (A). An 
          A rating was achieved in the 'Infrastructure' module, 
          with scoring improving by four points to 27 out of 30, 
          up from 23 points awarded in 2018. The Investment Manager's 
          approach to post-investment monitoring and active ownership 
          of ESG within the asset class contributed to the higher 
          score. 
 
 --      PRI (Principles for Responsible Investment) - The Investment 
          Manager has been a signatory to the United Nations-backed 
          PRI since 2013. The PRI is a globally recognised voluntary 
          framework concerned with the incorporation of ESG considerations 
          into the investment decision making process. As a signatory, 
          the Investment Manager reports annually on its responsible 
          investment activities by responding to asset-specific 
          modules in the PRI's Reporting Framework. In its recent 
          2019 assessment, the Investment Manager achieved an 
          A+ level rating for 'Strategy and Governance', the highest 
          possible rating, surpassing the peer average (A). An 
          A rating was achieved in the 'Infrastructure' module, 
          with scoring improving by four points to 27 out of 30, 
          up from 23 points awarded in 2018. The Investment Manager's 
          approach to post-investment monitoring and active ownership 
          of ESG within the asset class contributed to the higher 
          score. 
 
 
                 Module  2019 Score  Peer Average 
                         ----------  ------------ 
Strategy and Governance  29/30 (A+)             A 
-----------------------  ----------  ------------ 
Infrastructure            27/30 (A)             A 
-----------------------  ----------  ------------ 
 

Principal Risks

Reliance is placed on the internal systems and controls of the Investment Manager and external service providers such as the Administrator to effectively manage risk across the portfolio. Foresight Group has a comprehensive Risk Management Framework in place which is reviewed on a regular basis by the Company's Directors.

The Directors consider the following as the principal risks and uncertainties to the Company at this time:

 
    --      Risks relating to the sale of electricity 
    --      Risks relating to regulatory changes to subsidy schemes 
    --      Risks relating to gearing 
    --      Risks relating to RPI 
    --      Risks relating to marginal loss factors applicable to 
             the Australian assets 
    --      Risks relating to the construction of solar PV assets 
    --      Risks relating to exchange rate 
 

More detailed information on the risks and uncertainties affecting the Company can be found on pages 19-37 of the Company's most recent Prospectus issued on 3 March 2017 and the Risk Management section in the Company's latest Full Year Results Report for the year ended 31 December 2018.

Statement of Directors' Responsibilities

For the period 1 January 2019 to 30 June 2019

The Disclosure Guidance and Transparency Rules ("DTR") of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Unaudited Half-Yearly Financial Report for the six months ended 30 June 2019.

The Directors confirm to the best of their knowledge that:

(a) the summarised set of financial statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board;

(b) the Unaudited Half-Yearly Financial Report for the six months ended 30 June 2019 includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year and a description of principal risks and uncertainties that the Company faces for the remaining six months of the year);

(c) the summarised set of financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R; and

(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Alexander Ohlsson

Chairman

For and on behalf of Foresight Solar Fund Limited

22 August 2019

Asset Summaries

UNITED KINGDOM

 
Wymeswold, Leicestershire             Castle Eaton, Wiltshire 
ROCs 2.0/1.4                          ROCs 1.6 
 Acquisition Date                      Acquisition Date 
 November '13 / March '15              June '14 
Highfields, Essex                     High Penn, Wiltshire 
ROCs 1.6                              ROCs 1.6 
 Acquisition Date                      Acquisition Date 
 June '14                              June '14 
Pitworthy, North Devon                Hunters Race, West Sussex 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 June '14                              September '14 
Spriggs Farm, Essex                   Bournemouth, Dorset 
ROCs 1.6                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 November '14                          December '14 
Landmead, Oxfordshire                 Kencot, Oxfordshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 December '14                          March '15 
Copley, Lincolnshire                  Atherstone, Warwickshire 
ROCs 1.3                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 June '15                              July '15 
Paddock Wood, Kent                    Southam, Warwickshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 July '15                              July '15 
Port Farm, Wiltshire                  Membury, Berkshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '15                            September '15 
Shotwick, Flintshire                  Sandridge, Wiltshire 
ROCs 1.3                              ROCs 1.3 
 Acquisition Date                      Acquisition Date 
 February '17                          February '17 
Wally Corner, South Oxfordshire       Coombeshead, Devon 
ROCs 1.2                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 July '17                              April '18 
Park Farm, Leicestershire             Sawmills, Devon 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 April '18                             April '18 
Verwood, Dorset                       Yardwall, Somerset 
ROCs 1.4                              FiT 
 Acquisition Date                      Acquisition Date 
 April '18                             April '18 
Abergelli, Swansea                    Crow Trees, Nottinghamshire 
ROCs 1.4                              ROCs 1.3 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Cuckoo Grove, Pembrokeshire           Field House, Hampshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Fields Farm, Warwickshire             Gedling, Nottinghamshire 
ROCs 1.3                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Homeland, Dorset                      Marsh Farm, Wiltshire 
ROCs 1.6                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Sheepbridge, Berkshire                Steventon, Oxfordshire 
ROCs 1.3                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Tengore, Somerset                     Trehawke, Cornwall 
ROCs 1.4                              ROCs 1.6 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Upper Huntingford, Gloucestershire    Welbeck, Nottinghamshire 
ROCs 1.3                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 August '18                            August '18 
Yarburgh, Lincolnshire                Abbey Fields, Kent 
ROCs 1.3                              ROCs 1.3 
 Acquisition Date                      Acquisition Date 
 August '18                            November '18 
SV Ash, Shropshire                    Bilsthorpe, Nottinghamshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 November '18                          November '18 
Bulls Head, Buckinghamshire           Lindridge, Leicestershire 
ROCs 1.4                              ROCs 1.3 
 Acquisition Date                      Acquisition Date 
 November '18                          November '18 
Manor Farm, Bedfordshire              Misson, Nottinghamshire 
ROCs 1.3                              ROCs 1.3 
 Acquisition Date                      Acquisition Date 
 November '18                          November '18 
Nowhere, Lincolnshire                 Pen Y Cae, Camarthenshire 
ROCs 1.4                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 November '18                          November '18 
Playters, Suffolk                     Roskrow, Cornwall 
ROCs 1.3                              ROCs 1.4 
 Acquisition Date                      Acquisition Date 
 November '18                          November '18 
 

AUSTRALIA

 
Bannerton, Victoria    Longreach, Queenstand 
LGC accredited         LGC accredited 
 Acquisition Date       Acquisition Date 
 September '17          October '17 
Oakey 1, Queensland    Oakey 2, Queensland 
LGC eligible           LGC eligible 
 Acquisition Date       Acquisition Date 
 October '17            October '17 
 

Statement of Comprehensive Income

For the period 1 January 2019 to 30 June 2019

 
                                                      Unaudited         Unaudited 
                                                         Period            Period 
                                                 1 January 2019    1 January 2018    Audited year 1 January 2018 to 31 
                                                to 30 June 2019   to 30 June 2018                        December 2018 
                                        Notes           GBP'000           GBP'000                              GBP'000 
 
Revenue 
Interest income                             4            19,698            18,322                               36,817 
(Loss) / Gain on investments at fair 
 value through profit or loss              14           (6,972)           (9,542)                               25,311 
                                               ----------------  ----------------  ----------------------------------- 
                                                         12,726             8,780                               62,128 
                                               ----------------  ----------------  ----------------------------------- 
 
Expenditure 
Management fees                             5           (2,972)           (2,299)                              (5,106) 
Administration and accountancy 
 expenses                                   6              (83)              (84)                                (203) 
Directors' fees                             7              (85)              (85)                                (170) 
Other expenses                              8             (189)             (267)                                (643) 
                                               ----------------  ----------------  ----------------------------------- 
Total expenditure                                       (3,329)           (2,735)                              (6,122) 
                                               ----------------  ----------------  ----------------------------------- 
 
Profit before tax for the 
 period/year                                              9,397             6,045                               56,006 
Taxation                                                      -                 -                                    - 
                                               ----------------  ----------------  ----------------------------------- 
 
Profit for the period/year                                9,397             6,045                               56,006 
Other comprehensive income                                    -                 -                                    - 
                                               ----------------  ----------------  ----------------------------------- 
 
      Profit and total comprehensive 
          income for the period/year                      9,397             6,045                               56,006 
                                               ----------------  ----------------  ----------------------------------- 
 
  Earnings per Ordinary Share (pence 
                          per Share)        9              1.71              1.34                                11.60 
 
 

All items above arise from continuing operations, there have been no discontinued operations during the period.

The accompanying notes on pages 46 to 80 form an integral part of these Financial Statements.

Statement of Financial Position

As at 30 June 2019

 
                                        Unaudited  Unaudited       Audited 
                                          30 June    30 June   31 December 
                                             2019       2018          2018 
                                 Notes    GBP'000    GBP'000       GBP'000 
Assets 
 
Non-current assets 
Investments held at fair 
 value through profit or 
 loss                               14    523,215    403,422       530,187 
                                        ---------  ---------  ------------ 
Total non-current assets                  523,215    403,422       530,187 
 
Current assets 
Interest receivable                 10     74,190     68,948        69,338 
Trade and other receivables         11        258      1,926           265 
Cash and cash equivalents           12      5,710        180        12,282 
                                        ---------  ---------  ------------ 
Total current assets                       80,158     71,054        81,885 
                                        ---------  ---------  ------------ 
Total assets                              603,373    474,476       612,072 
                                        ---------  ---------  ------------ 
 
Equity 
Retained earnings                          42,742     18,619        51,460 
Stated capital                      18    558,798    454,515       558,798 
                                        ---------  ---------  ------------ 
Total equity                              601,540    473,134       610,258 
                                        ---------  ---------  ------------ 
 
Liabilities 
 
Current liabilities 
Trade and other payables            13      1,833      1,342         1,814 
                                        ---------  ---------  ------------ 
 
Total current liabilities                   1,833      1,342         1,814 
 
Total liabilities                           1,833      1,342         1,814 
                                        ---------  ---------  ------------ 
 
Total equity and liabilities              603,373    474,476       612,072 
                                        ---------  ---------  ------------ 
 
Net Asset Value per Ordinary 
 Share                              19      109.6      105.2         111.2 
 

The Financial Statements on pages 42 to 80 were approved by the Board of Directors and signed on its behalf on 21 August 2019 by:

Chairman

The accompanying notes on pages 46 to 80 form an integral part of these Financial Statements.

Statement of Changes in Equity

For the period 1 January 2019 to 30 June 2019

 
                                       Stated Capital  Retained Earnings     Total 
                                Notes         GBP'000            GBP'000   GBP'000 
Balance as at 1 January 
 2019 (unaudited)                             558,798             51,460   610,258 
 
Total comprehensive income for the 
 period: 
Profit for the period                               -              9,397     9,397 
 
Transactions with owners, 
 recognised directly in 
 equity: 
Dividends paid in the 
 period                            22               -           (18,115)  (18,115) 
                                       --------------  -----------------  -------- 
Balance as at 30 June 
 2019                                         558,798             42,742   601,540 
                                       --------------  -----------------  -------- 
 

For the period 1 January 2018 to 30 June 2018 (unaudited)

 
                                              Stated Capital  Retained Earnings     Total 
                                       Notes         GBP'000            GBP'000   GBP'000 
Balance as at 1 January 2018:                        454,515             26,793   481,308 
Total comprehensive income for the 
 period: 
Profit for the period                                      -              6,045     6,045 
 
Transactions with owners, recognised 
 directly in equity: 
Dividends paid in the period              22               -           (14,219)  (14,219) 
                                              --------------  -----------------  -------- 
Balance as at 30 June 2018                           454,515             18,619   473,134 
                                              --------------  -----------------  -------- 
 

For the period 1 January 2018 to 31 December 2018 (audited)

 
                                              Stated Capital  Retained Earnings     Total 
                                       Notes         GBP'000            GBP'000   GBP'000 
               Balance as at 1 January 2018:         454,515             26,793   481,308 
              Total comprehensive income for 
                                   the year: 
Profit for the year                                        -             56,006    56,006 
 
Transactions with owners, recognised 
 directly in equity: 
Dividends paid in the year                22               -           (31,339)  (31,339) 
Issue of Ordinary Shares                  18         106,189                  -   106,189 
Issue costs                               18         (1,906)                  -   (1,906) 
                                              --------------  -----------------  -------- 
Balance as at 31 December 2018                       558,798             51,460   610,258 
                                              --------------  -----------------  -------- 
 

The accompanying notes on pages 46 to 80 form an integral part of these Financial Statements.

Statement of Cash Flows

For the period 1 January 2019 to 30 June 2019

 
                                              Unaudited 
                                                 Period        Unaudited          Audited 
                                              1 January           Period             year 
                                                   2019   1 January 2018   1 January 2018 
                                             to 30 June       to 30 June   to 31 December 
                                                   2019             2018             2018 
                                                GBP'000          GBP'000          GBP'000 
 
Profit for the period after tax 
 from continuing operations                       9,397            6,045           56,006 
Adjustments for: 
Unrealised loss/(gain) on investments             6,972            9,542         (25,311) 
Investment income                              (19,698)         (18,322)         (36,817) 
Finance costs                                         -                -                1 
                                            -----------  ---------------  --------------- 
 
Operating cash flows                            (3,329)          (2,735)          (6,121) 
 
Decrease in trade and other receivables               7                7            1,668 
(Decrease)/Increase in trade and 
 other payables                                      19             (42)              430 
                                            -----------  ---------------  --------------- 
 
Net cash outflow from operating 
 activities                                     (3,303)          (2,770)          (4,023) 
                                            -----------  ---------------  --------------- 
 
Investing activities 
Increase in shareholder loan to/from 
 subsidiary                                           -          (4,500)         (95,206) 
Investment income received                       14,846            7,000           23,898 
                                            -----------  ---------------  --------------- 
 
Net cash inflow/(outflow) from investing 
 activities                                      14,846            2,500         (71,308) 
                                            -----------  ---------------  --------------- 
 
Financing activities 
Dividends paid                                 (18,115)         (14,219)         (31,339) 
Issue costs paid                                      -                -          (1,906) 
Proceeds from issue of shares                         -                -          106,189 
                                            -----------  ---------------  --------------- 
 
Net cash (outflow)/inflow from financing 
 activities                                    (18,115)         (14,219)           72,944 
                                            -----------  ---------------  --------------- 
 
Net decrease in cash and cash equivalents       (6,572)         (14,489)          (2,387) 
Cash and cash equivalents at the 
 beginning of the period                         12,282           14,669           14,669 
                                            -----------  ---------------  --------------- 
 
Cash and cash equivalents at the 
 end of the period                                5,710              180           12,282 
                                            -----------  ---------------  --------------- 
 

The accompanying notes on pages 46 to 80 form an integral part of these Financial Statements.

Notes to the Financial Statements

For the year ended 30 June 2019

   1.        Company information 

Foresight Solar Fund Limited (the "Company") is a closed-ended company with an indefinite life and was incorporated in Jersey under the Companies Law (Jersey) 1991, as amended, on 13 August 2013, with registered number 113721. The address of the registered office is: 28 Esplanade, St Helier, Jersey, JE4 2QP.

The Company has one investment, Foresight Solar (UK Hold Co) Limited ("UK Hold Co"). UK Holdco has investments in four subsidiaries: FS Holdco Limited ("FS Holdco"), FS Holdco 2 Limited ("FS Holdco 2"), FS Holdco 3 Limited ("FS Holdco 3") and FS Holdco 4 Limited ("FS Holdco 4") and FS Holdco 2 also has an investment in a subsidiary, FS Debtco Limited ("FS Debtco"). FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4 invest in further holding companies (the "SPVs") which then invest in the underlying solar investments.

The principal activity of the Company, UK Hold Co, FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and the SPVs (together "the Group") is investing in operational UK and Australian ground based solar power plants.

   2.        Summary of significant accounting policies 
   2.1      Basis of presentation 

The Unaudited Interim Financial Statements (the "Interim Financial Statements") for the period 1 January 2019 to 30 June 2019 have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ("IAS 34").

The Interim Financial Statements do not include all the information and disclosures required in the annual Financial Statements and should be read in conjunction with the annual Financial Statements as at 31 December 2018.

These are not statutory accounts in accordance with Article 105 of the Companies Law (Jersey) 1991, as amended and the financial information for the period ended 30 June 2019 and 30 June 2018 has been neither audited nor formally reviewed. Statutory accounts in respect of the period to 31 December 2018 have been audited and reported on by the Company's auditors and delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Article 113B (3) or 113B (6) of the Companies Law (Jersey) 1991. No statutory accounts in respect of any period after 31 December 2018 have been reported on by the Company's auditors or delivered to the Registrar of Companies.

   2.2      Going concern 

The Directors have considered the Company's cash flow projections for a period of no less than twelve months from the date of approval of these Interim Financial Statements together with the Company's borrowing facilities. These projections show that the Company will be able to meet its liabilities as they fall due.

The Directors have therefore prepared the Interim Financial Statements on a going concern basis.

   2.3      Changes in accounting policies and disclosures 

New and revised IFRSs adopted by the Company

Management have assessed all new standards and amendments to standards and interpretations are effective for annual periods after 1 January 2019 and have deemed none of them to be applicable to the Fund.

New and revised IFRSs in issue but not yet effective

There are no standards, amendments or interpretations in issue at the reporting date which are effective after 1 January 2019 that are deemed to be material to the Fund.

   2.4      Consolidation 

Associates

Associates are entities over which the Company has significant influence, being the power to participate in the financial and operating policy decisions of the investee (but not control or joint control).

Subsidiaries

All subsidiaries are entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Investment Entity

Qualifying entities that meet the definition of an investment entity are not required to produce a consolidated set of Financial Statements and instead account for subsidiaries at fair value through profit or loss.

The defined criteria of an 'investment entity' are as follows:

 
                         --                           It holds more than one investment; 
                         --                           It has more than one investor; 
                         --                           It has investors that are not related parties 
                                                       to the entity; and 
                         --                           It has ownership interests in the form of equity 
                                                       or similar interests. 
 

However, the absence of one or more of these characteristics does not prevent the entity from qualifying as an 'investment entity', provided all other characteristics are met and the entity otherwise meets the definition of an 'investment entity':

 
                         --                           It obtains funds from one or more investors 
                                                       for the purpose of providing those investor(s) 
                                                       with professional investment management services; 
                         --                           It commits to its investor(s) that its business 
                                                       purpose is to invest funds solely for returns 
                                                       from capital appreciation, investment income 
                                                       or both; and 
                         --                           It measures and evaluates the performance of 
                                                       substantially all of its investments on a fair 
                                                       value basis. 
 

As discussed in note 1, the Company has one direct subsidiary, a 100% controlling interest in UK Hold Co and a number of indirect subsidiaries and associates.

Under IFRS 10 "Consolidated Financial Statements", the directors deem that the Company is an investment entity and therefore the Company does not consolidate its subsidiary but carries it at fair value through profit or loss. The Company does not meet all the defined criteria of an 'investment entity' as the Company only has one investment. However, the Directors deem that the Company is nevertheless an 'investment entity' as the remaining requirements have been met and, through the Group, there is a diverse investment portfolio which will fill the criteria of having more than one investment. Therefore, the Company qualifies as an 'investment entity'.

As UK Hold Co is not consolidated, its subsidiaries (plus their underlying investments) are not separately presented at fair value through profit or loss in the Company's accounts. However accounting standards require that if an investment entity is the parent of another investment entity, the parent shall also provide the additional disclosures required by IFRS 12 Interest in unconsolidated subsidiaries. These disclosures are set out in notes 16 and 17.

   3.        Critical accounting estimates and judgements 

The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.

The Board considers that the only areas where management make critical estimates and judgements that may have a significant effect on the financial statements are in relation to the valuation of investments at fair value through profit and loss, significant judgements and key sources of estimation uncertainty related to the determination that the Company meets the definition of an investment entity.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and underlying assumptions are reviewed on an ongoing basis.

The Board considers that the determination that the Company meets the definition of an investment entity involves significant judgement because the entity does not possess all the typical characteristics of an investment entity. While the absence of one or more of the typical characteristics of an investment entity described in IFRS 10 Consolidated Financial Statements does not immediately disqualify an entity from being classified as an investment entity. The entity is required to disclose its reasons for concluding that it is nevertheless an investment entity if one or more of these characteristics are not met. In order to reach that conclusion of whether the Company meets the definition of an investment entity the Board had to make significant judgements.

The Board considers that the fair value of Investments not quoted in an active market involves critical accounting estimates and judgements because it is determined by the Directors using their own models, which are usually based on valuation methods and techniques generally recognised as standard within the industry. Models use observable data, to the extent practicable. However, they also rely on significant unobservable inputs about the output of the asset (including assumptions such as solar irradiation and technological performance of the asset), power prices, operating costs, discount and inflation rates applied to the cash flows, and the duration of the useful economic life of the asset. Furthermore, changes in these inputs and assumptions could affect the reported fair value of financial instruments. The determination of what constitutes 'observable' requires significant judgement by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

   4.        Interest income 
 
                           30 June   30 June  31 December 
                              2019      2018         2018 
                           GBP'000   GBP'000      GBP'000 
Bank interest income             -         -            1 
Interest on loan notes      17,203    16,751       33,172 
Interest on shareholder 
 loans                       2,495     1,571        3,644 
                          --------  --------  ----------- 
                            19,698    18,322       36,817 
                          --------  --------  ----------- 
 

Loan notes were issued by the Company to UK Hold Co for the purchase of investments. Interest is payable at 9% per annum in arrears on each Interest Payment Date (28 / 29 February and 31 August each year). Where interest is not paid on the payment date, it will compound and future interest shall accrue at 11% per annum from the due date up to the date of actual payment, compounding on each Interest Payment Date. The loan notes balance at period end on which interest is charged is GBP250,000,000 (30 June 2018: GBP250,000,000, 31 December 2018: GBP250,000,000). These loans form part of the fair value of the investments as per note 14.

A Shareholder loan is created when the total amount paid by the Company on behalf of UK Hold Co to acquire the underlying investments is more than the total loan notes issued by the Company to UK Hold Co. Interest is accrued at 2% per annum and is repayable in full on demand. The shareholder loan balance at period end is GBP158,609,725 (30 June 2018: GBP158,609,725, 31 December 2018: GBP158,609,725). These loans form part of the fair value of the investments as per note 14.

During the prior year, four additional shareholder loans were issued to UK Holdco - GBP45,000,000 on 2 August 2018, GBP9,106,725 on 27 November 2018, GBP33,100,000 on 28 November 2018 and GBP3,500,000 on 18 December 2018. Loan interest on all four new shareholder loans is charged at a fixed rate of 2% per annum. These loans form part of the fair value of the investments as per note 14.

   5.        Management fees 

The Investment Manager of the Company, Foresight Group CI Limited, receives an annual fee of 1% of the Net Asset Value ("NAV") of the Company up to GBP500m - NAV in excess to this is charged at 0.9% per annum. This is payable quarterly in arrears and is calculated based on the published quarterly NAV. For the period ended 30 June 2019, the Investment Manager was entitled to a management fee of GBP2,971,549 (1 January 2018 to 30 June 2018: GBP2,299,044, 1 January 2018 to 31 December 2018: GBP5,106,080) of which GBP1,506,292 was outstanding as at 30 June 2019 (30 June 2018: GBP1,341,858, 31 December 2018: GBP1,537,638).

   6.        Administration and Accountancy fees 

Under an Administration Agreement, the Administrator of the Company, JTC (Jersey) Limited, is entitled to receive minimum annual administration and accountancy fees of GBP156,000 (2018: GBP156,000) payable quarterly in arrears. For the period ended 30 June 2018, total administration and accountancy fees were GBP82,557 (1 January 2018 to 30 June 2018: GBP84,105, 1 January 2018 to 31 December 2018: GBP203,220) of which GBP39,000 was outstanding as at 30 June 2019 (1 January 2018 to 30 June 2018: GBP39,000, 1 January 2018 to 31 December 2018: GBP39,000).

   7.        Directors' fees 

No members of staff were employed during the period (period ended 30 June 2018: nil, year ended 31 December 2018: nil).

Total directors' fees were GBP85,000 (1 January 2018 to 30 June 2018: GBP85,000, 1 January 2018 to 31 December 2018: GBP170,000).

   8.        Other Expenses 
 
                          30 June   30 June  31 December 
                             2019      2018         2018 
                          GBP'000   GBP'000      GBP'000 
Legal and professional 
 fees                         187       120          607 
Other expenses                  2       147           36 
                         --------  --------  ----------- 
                              189       267          643 
                         --------  --------  ----------- 
 

Included within legal and professional fees is GBP11,250 (1 January 2018 to 30 June 2018: GBP19,750, 1 January 2018 to 31 December 2018: GBP22,500) relating to the accrual of the 2019 audit fees. There were no other fees paid to the auditors for non-audit services (1 January 2018 to 30 June 2018: GBPnil, 1 January 2018 to 31 December 2018: GBPnil).

   9.        Earnings per Ordinary share - basic and diluted 

The basic and diluted loss per Ordinary Share for the Company is 1.71 pence per share (period ended 30 June 2018: 1.34 profit, year ended 31 December 2018: 11.60 profit). This is based on the profit for the period of GBP9,397,313 (1 January 2018 to 30 June 2018: GBP6,044,557, 1 January 2018 to 31 December 2018: GBP56,005,471) and on 548,941,550 (1 January 2018 to 30 June 2018: 449,952,091, 1 January 2018 to 31 December 2018: 482,619,846) Ordinary Shares, being the weighted average number of shares in issue during the period.

There is no difference between the weighted average ordinary or diluted number of shares.

   10.     Interest receivable 
 
                          30 June   30 June  31 December 
                             2019      2018         2018 
                          GBP'000   GBP'000      GBP'000 
Interest receivable on 
 loan notes                61,017    65,497       56,814 
Interest receivable on 
 shareholder loan          13,173     3,451       12,524 
                         --------  --------  ----------- 
                           74,190    68,948       69,338 
                         --------  --------  ----------- 
 

Information about the Company's exposure to credit and market risk and impairment losses for interest receivable is included in note 20.

Interest receivable at 31 December 2018 has been updated for the reclassification (GBP1,206,000) as explained in note 14.

   11.     Trade and other receivables 
 
                                  30 June   30 June  31 December 
                                     2019      2018         2018 
                                  GBP'000   GBP'000      GBP'000 
Prepaid expenses                        8         4           17 
Amounts due from subsidiaries*          -     1,146            - 
Other receivables                     250       776          248 
                                 --------  --------  ----------- 
                                      258     1,926          265 
                                 --------  --------  ----------- 
 

*Amounts due from subsidiaries are unsecured, interest free and repayable on demand.

Information about the Company's exposure to credit and market risk and impairment losses for trade and other receivables is included in note 20.

   12.     Cash and cash equivalents 
 
                30 June   30 June  31 December 
                   2019      2018         2018 
                GBP'000   GBP'000      GBP'000 
Cash at bank      5,710       180       12,282 
               --------  --------  ----------- 
                  5,710       180       12,282 
               --------  --------  ----------- 
 

Information about the Company's exposure to credit and market risk and impairment losses for cash and cash equivalents is included in note 20.

   13.     Trade and other payables 
 
                                30 June   30 June  31 December 
                                   2019      2018         2018 
                                GBP'000   GBP'000      GBP'000 
Accrued expenses                  1,646     1,342        1,630 
Amounts due to subsidiaries*        187         -          184 
                               --------  --------  ----------- 
                                  1,833     1,342        1,814 
                               --------  --------  ----------- 
 

*Amounts due to subsidiaries are unsecured, interest free and repayable on demand.

   14.     Investments at fair value through profit or loss 

The following table presents the Company's investments at fair value through profit or loss:

 
                                  30 June   30 June  31 December 
                                     2019      2018         2018 
                                  GBP'000   GBP'000      GBP'000 
Investment in UK 
 Hold Co                 Equity         -         -            - 
                          Loans   523,215   403,422      530,187 
                                 --------  --------  ----------- 
                                  523,215   403,422      530,187 
                                 --------  --------  ----------- 
 
Book cost as at 
 1 January                        499,315   404,109      404,109 
Opening investment 
 holding gains                     30,872     4,355        4,355 
                                 --------  --------  ----------- 
Valuation as at 
 1 January                        530,187   408,464      408,464 
 
Movements during 
 the period 
   Purchase at cost                     -     4,500       95,206 
   Reclassification 
    - see below                         -         -        1,206 
   Investment holding 
    (losses)/gains                (6,972)   (9,542)       25,311 
                                 --------  --------  ----------- 
Valuation as at 
 30 June/ 31 December             523,215   403,422      530,187 
                                 --------  --------  ----------- 
Book cost as at 
 30 June/ 31 December             499,315   408,609      499,315 
Closing investment 
 holding gains                     23,900   (5,187)       30,872 
                                 --------  --------  ----------- 
                                  523,215   403,422      530,187 
                                 --------  --------  ----------- 
 

The Company has one investment in Foresight Solar (UK Hold Co) Limited ("UK Hold Co"). This investment consists of both debt and equity (Share Capital of GBP100) and is not quoted in an active market. Accordingly, the investment in UK Hold Co has been valued using its net assets.

These investments also consist of both debt and equity and are not quoted in an active market. FS Holdco is fair valued using its net asset value as reported at year end, with adjustments to its long term external debt to reflect the fact that the carrying value at amortised cost is not considered to be the best approximation of its fair value. FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4 are fair valued using their net asset value as reported at period end.

In turn, FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4's investment portfolios consist of unquoted investments in solar projects, the valuations of which are based on a discounted cash flow methodology (as set out in note 17) for solar projects that are operational. One investment held by FS Holdco 4 is not yet operational at period end and is therefore valued at cost.

In turn, UK Hold Co has four investments in FS Holdco Limited ("FS Holdco"), FS Holdco 2 Limited ("FS Holdco 2"), FS Holdco 3 Limited ("FS Holdco 3") and FS Holdco 4 Limited ("FS Holdco 4"), and FS Holdco 2 has one investment in FS Debtco Limited ("FS Debtco").

During the prior year the Company identified a historical misallocation between the fair value of investments and the interest receivable on loan notes to the subsidiary. This has been reclassified in the prior year.

Fair value hierarchy

IFRS 13 "Fair Value Measurement" requires disclosures relating to fair value measurements using a three-level fair value hierarchy. The level within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. Assessing the significance of a particular input requires judgement, considering factors specific to the asset or liability. The following table shows investments recognised at fair value, categorised between those whose fair value is based on:

(a) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(b) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

(c) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

All investments held at fair value through profit or loss are classified as level 3 within the fair value hierarchy.

As UK Hold Co's net asset value is not considered observable market data the investment in UK Hold Co has been classified as level 3. There were no movements between levels during the period.

As at 30 June 2019:

 
                       Level 1   Level 2   Level 3     Total 
                       GBP'000   GBP'000   GBP'000   GBP'000 
Unquoted investment          -         -   523,215   523,215 
                      --------  --------  --------  -------- 
                             -         -   523,215   523,215 
                      --------  --------  --------  -------- 
 

As at 30 June 2018:

 
                       Level 1   Level 2   Level 3     Total 
                       GBP'000   GBP'000   GBP'000   GBP'000 
Unquoted investment          -         -   403,422   403,422 
                      --------  --------  --------  -------- 
                             -         -   403,422   403,422 
                      --------  --------  --------  -------- 
 

As at 31 December 2018:

 
                       Level 1   Level 2   Level 3     Total 
                       GBP'000   GBP'000   GBP'000   GBP'000 
Unquoted investment          -         -   530,187   530,187 
                      --------  --------  --------  -------- 
                             -         -   530,187   530,187 
                      --------  --------  --------  -------- 
 

Sensitivity Analysis

Due to the nature of the Group structure and the underlying valuation basis of UK Hold Co, FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and the underlying solar project investments, the valuation of the Company's investment at fair value through profit or loss is directly linked to the valuation of the underlying solar investments. Therefore, the unobservable inputs driving the valuation of the Company's investments in UK Hold Co are directly attributable to the valuation of the unquoted investments in FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4 which are discussed further in note 17.

   15.     Subsidiaries and associates 

Investments in subsidiaries

 
                                                                                                            Proportion 
                             Direct or indirect               Country of                          of shares and voting 
                  Name                  holding            incorporation    Principal activity             rights held 
Foresight Solar (UK 
 Hold Co) Limited ("UK 
 Hold Co")                               Direct                       UK       Holding Company                    100% 
FS Holdco Limited ("FS 
 Holdco")                              Indirect                       UK       Holding Company                    100% 
FS Holdco 2 Limited 
 ("FS Holdco 2")                       Indirect                       UK       Holding Company                    100% 
FS Debtco Limited ("FS 
 Debtco")                              Indirect                       UK       Holding Company                    100% 
FS Holdco 3 Limited 
 ("FS Holdco 3")                       Indirect                       UK       Holding Company                    100% 
FS Holdco 4 Limited 
 ("FS Holdco 4")                       Indirect                       UK       Holding Company                    100% 
FS Wymeswold Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Castle Eaton 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Pitworthy Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Highfields Limited                  Indirect                       UK   SPV Holding Company                    100% 
FS High Penn Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Hunter's Race 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Spriggs Limited                     Indirect                       UK   SPV Holding Company                    100% 
FS Bournemouth Limited                 Indirect                       UK   SPV Holding Company                    100% 
FS Landmead Limited                    Indirect                       UK   SPV Holding Company                    100% 
FS Kencot Limited                      Indirect                       UK   SPV Holding Company                    100% 
FS Copley Limited                      Indirect                       UK   SPV Holding Company                    100% 
FS Port Farms Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Membury Limited                     Indirect                       UK   SPV Holding Company                    100% 
FS Southam Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Atherstone Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Paddock Wood Solar 
 Farm Limited                          Indirect                       UK   SPV Holding Company                    100% 
Atherstone Hold Co 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
Southam Hold Co 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
Paddock Wood Hold Co 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Shotwick Limited                    Indirect                       UK   SPV Holding Company                    100% 
FS Sandridge Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Wally Corner 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
Acquisition Co 4 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Welbeck Limited                     Indirect                       UK   SPV Holding Company                    100% 
FS Trehawke Limited                    Indirect                       UK   SPV Holding Company                    100% 
FS Homeland Limited                    Indirect                       UK   SPV Holding Company                    100% 
FS Marsh Farm Limited                  Indirect                       UK   SPV Holding Company                    100% 
FS Steventon Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Fields Farm Limited                 Indirect                       UK   SPV Holding Company                    100% 
FS Gedling Limited                     Indirect                       UK   SPV Holding Company                    100% 
FS Sheepbridge Limited                 Indirect                       UK   SPV Holding Company                    100% 
FS Tengore Limited                     Indirect                       UK   SPV Holding Company                    100% 
FS Cuckoo Limited                      Indirect                       UK   SPV Holding Company                    100% 
FS Field House Limited                 Indirect                       UK   SPV Holding Company                    100% 
FS Upper Huntingford 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Abergelli Limited                   Indirect                       UK   SPV Holding Company                    100% 
FS Crow Trees Limited                  Indirect                       UK   SPV Holding Company                    100% 
FS Yarburgh Limited                    Indirect                       UK   SPV Holding Company                    100% 
FS Nowhere Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Bilsthorpe Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Bulls Head Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Roskrow Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Abbeyfields Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Lindridge Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Misson Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Pentre Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Playters Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS PS Manor Farm Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS SV Ash Solar Park 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
FS Pen Y Cae Solar 
 Limited                               Indirect                       UK   SPV Holding Company                    100% 
Second Generation 
 Portfolio Holdings 1                  Indirect                       UK   SPV Holding Company                    100% 
Second Generation 
 Portfolio 1                           Indirect                       UK   SPV Holding Company                    100% 
Oakey 2 Asset Company 
 Pty Limited                           Indirect                Australia   SPV Holding Company                    100% 
Wymeswold Solar Farm 
 Limited ("Wymeswold")                 Indirect                       UK            Investment                    100% 
Castle Eaton Solar 
 Farm Limited ("Castle 
 Eaton")                               Indirect                       UK            Investment                    100% 
Pitworthy Solar Farm 
 Limited ("Pitworthy 
 ")                                    Indirect                       UK            Investment                    100% 
Highfields Solar Farm 
 Limited 
 ("Highfields")                        Indirect                       UK            Investment                    100% 
High Penn Solar Farm 
 Limited ("High Penn 
 ")                                    Indirect                       UK            Investment                    100% 
Hunter's Race Solar 
 Farm Limited 
 ("Hunter's Race")                     Indirect                       UK            Investment                    100% 
Spriggs Solar Farm 
 Limited ("Spriggs ")                  Indirect                       UK            Investment                    100% 
Bournemouth Solar Farm 
 Limited 
 ("Bournemouth")                       Indirect                       UK            Investment                    100% 
Landmead Solar Farm 
 Limited ("Landmead")                  Indirect                       UK            Investment                    100% 
Kencot Hill Solar Farm 
 Limited ("Kencot")                    Indirect                       UK            Investment                    100% 
Copley Solar Limited 
 ("Copley")                            Indirect                       UK            Investment                    100% 
Port Farms Solar 
 Limited (Port Farm")                  Indirect                       UK            Investment                    100% 
Membury Solar Limited 
 ("Membury")                           Indirect                       UK            Investment                    100% 
Atherstone Solar Farm 
 Ltd ("Atherstone")                    Indirect                       UK            Investment                    100% 
Southam Solar Farm Ltd 
 ("Southam")                           Indirect                       UK            Investment                    100% 
Paddock Wood Solar 
 Farm Ltd ("Paddock 
 Wood")                                Indirect                       UK            Investment                    100% 
Shotwick Solar Limited 
 ("Shotwick Solar")                    Indirect                       UK            Investment                    100% 
Sandridge Solar Power 
 Limited ("Sandridge")                 Indirect                       UK            Investment                    100% 
SSR Wally Corner 
 Limited ("SSR Wally")                 Indirect                       UK            Investment                    100% 
Foresight Solar 
 Australia Pty Limited                 Indirect                Australia            Investment                    100% 
RE Oakey Pty Limited                   Indirect                Australia            Investment                    100% 
Oakey Network Pty 
 Limited                               Indirect                Australia            Investment                    100% 
Longreach Asset 
 Company Pty Limited                   Indirect                Australia            Investment                    100% 
Second Generation 
 Yardwall Limited 
 ("Yardwall")                          Indirect                       UK            Investment                    100% 
Second Generation 
 Verwood Limited 
 ("Verwood")                           Indirect                       UK            Investment                    100% 
Second Generation Park 
 Farm Limited ("Park 
 Farm")                                Indirect                       UK            Investment                    100% 
Second Generation 
 Coombeshead Limited 
 ("Coombeshead")                       Indirect                       UK            Investment                    100% 
Second Generation 
 Sawmills Limited 
 ("Sawmills")                          Indirect                       UK            Investment                    100% 
Welbeck Limited 
 ("Welbeck")                           Indirect                       UK            Investment                    100% 
Trehawke Limited 
 ("Trehawke")                          Indirect                       UK            Investment                    100% 
Homeland Limited 
 "(Homeland")                          Indirect                       UK            Investment                    100% 
Marsh Farm Limited 
 ("Marsh Farm")                        Indirect                       UK            Investment                    100% 
Steventon Limited 
 ("Steventon")                         Indirect                       UK            Investment                    100% 
Fields Farm Limited 
 ("Fields Farm")                       Indirect                       UK            Investment                    100% 
Gedling Limited 
 ("Gedling")                           Indirect                       UK            Investment                    100% 
Sheepbridge Limited 
 ("Sheepbridge")                       Indirect                       UK            Investment                    100% 
Tengore Limited 
 ("Tengore")                           Indirect                       UK            Investment                    100% 
Cuckoo Limited 
 ("Cuckoo")                            Indirect                       UK            Investment                    100% 
Field House Limited 
 ("Field House")                       Indirect                       UK            Investment                    100% 
Upper Huntingford 
 Limited ("Upper 
 Huntingford")                         Indirect                       UK            Investment                    100% 
Abergelli Limited 
 ("Abergelli")                         Indirect                       UK            Investment                    100% 
Crow Trees Limited 
 ("Crow Trees")                        Indirect                       UK            Investment                    100% 
Yarburgh Limited 
 ("Yarburgh")                          Indirect                       UK            Investment                    100% 
Nowhere Solar Limited 
 ("Nowhere Solar")                     Indirect                       UK            Investment                    100% 
Bilsthorpe Solar 
 Limited ("Bilsthorpe 
 Solar")                               Indirect                       UK            Investment                    100% 
Bulls Head Solar 
 Limited ("Bulls Head 
 Solar")                               Indirect                       UK            Investment                    100% 
Roskrow Solar Limited 
 ("Roskrow Solar")                     Indirect                       UK            Investment                    100% 
Abbeyfields Solar 
 Limited ("Abbeyfields 
 Solar")                               Indirect                       UK            Investment                    100% 
Lindridge Solar 
 Limited ("Lindridge 
 Solar")                               Indirect                       UK            Investment                    100% 
Misson Solar Limited 
 ("Misson Solar")                      Indirect                       UK            Investment                    100% 
Pentre Solar Limited 
 ("Pentre Solar)                       Indirect                       UK            Investment                    100% 
Playters Solar Limited 
 ("Playters Solar")                    Indirect                       UK            Investment                    100% 
PS Manor Farm Solar 
 Limited ("PS Manor 
 Farm Solar")                          Indirect                       UK            Investment                    100% 
SV Ash Solar Park 
 Limited ("SV Ash 
 Solar Park")                          Indirect                       UK            Investment                    100% 
Pen Y Cae Solar 
 Limited ("Pen Y Cae 
 Solar")                               Indirect                       UK            Investment                    100% 
 

Investments in associates

 
                                                                                      Proportion 
                                                                                       of shares 
                                           Direct                                     and voting 
                                      or indirect             Country     Principal       rights 
Name                                      holding    of incorporation      activity         held 
Kiamco Hanwha Foresight Bannerton                                       SPV Holding 
 Pty Limited                             Indirect                  UK       Company       48.50% 
Longreach New Holdco Pty Limited         Indirect           Australia    Investment          49% 
Oakey 1 New Holdco Pty Limited           Indirect           Australia    Investment          49% 
 
   16.     Interests in unconsolidated structured entities 

Period ended 30 June 2019

 
                                                                Unrealised                      Unrealised  Fair value 
                                                 Cost as at    gain/(loss)     Movement on  gain/(loss) as       as at 
                        Cost at     Additions /     30 June        as at 1      unrealised      at 30 June     30 June 
                 1 January 2019     (Disposals)        2019   January 2019     gain/(loss)            2019        2019 
                        GBP'000         GBP'000     GBP'000        GBP'000         GBP'000         GBP'000     GBP'000 
FS Wymeswold 
 Limited                 48,590               -      48,590          1,230           (564)             666      49,256 
FS Castle Eaton 
 Limited                 21,630               -      21,630          (160)           (199)           (359)      21,271 
FS Pitworthy 
 Limited                 18,210               -      18,210        (1,087)           (445)         (1,532)      16,678 
FS Highfields 
 Limited                 14,300               -      14,300          (457)           (356)           (813)      13,487 
FS High Penn 
 Limited                 11,310               -      11,310          (681)           (151)           (832)      10,478 
FS Hunter's 
 Race Limited            13,160               -      13,160          1,132           (399)             733      13,893 
FS Spriggs 
 Limited                 14,580               -      14,580            129           (393)           (264)      14,316 
FS Bournemouth 
 Limited                 50,060               -      50,060          2,363           (240)           2,123      52,183 
FS Landmead 
 Limited                 51,580               -      51,580        (1,026)           (960)         (1,986)      49,594 
FS Kencot 
 Limited                 47,210               -      47,210        (1,329)              47         (1,282)      45,928 
FS Copley 
 Limited                 35,670               -      35,670          2,678           (654)           2,024      37,694 
FS Paddock Wood 
 Limited 
 Limited                 11,145               -      11,145            406           (422)            (16)      11,129 
FS Atherstone 
 Limited                 16,004               -      16,004          (404)           (268)           (672)      15,332 
FS Southam 
 Limited                 10,621               -      10,621            102            (39)              63      10,684 
FS Port Farms 
 Limited                 44,215               -      44,215          1,534           (390)           1,144      45,359 
FS Membury 
 Limited             21,160            -           21,160         154           (250)            (96)         21,064 
                 --------------  --------------  ----------  -------------  --------------  --------------  ---------- 
                    429,445            -          429,445        4,584         (5,683)         (1,099)       428,346 
                 --------------  --------------  ----------  -------------  --------------  --------------  ---------- 
 

The cost and valuation of the indirect investments in solar farms directly correlate to the cost and valuation of the direct SPV investments as presented in the table above.

Period ended 30 June 2018

The following table represents the fair values of the investments held by FS Holdco Limited as required by IFRS12.

 
                                                             Unrealised                    Unrealised 
                                                  Cost as   gain/(loss)                   gain/(loss)  Fair value 
                        Cost at                        at       as at 1        Movement         as at       as at 
                      1 January       Additions   30 June       January   on unrealised       30 June     30 June 
                           2018   / (Disposals)      2018          2018     gain/(loss)          2018        2018 
                        GBP'000         GBP'000   GBP'000       GBP'000         GBP'000       GBP'000     GBP'000 
FS Wymeswold 
 Limited                 48,590               -    48,590         (272)             433           161      48,751 
FS Castle Eaton 
 Limited                 21,630               -    21,630         (835)              28         (807)      20,823 
FS Pitworthy 
 Limited                 18,210               -    18,210       (1,582)           (117)       (1,699)      16,511 
FS Highfields 
 Limited                 14,300               -    14,300         (726)            (91)         (817)      13,483 
FS High Penn 
 Limited                 11,310               -    11,310         (804)           (145)         (949)      10,361 
FS Hunter's 
 Race Limited            13,160               -    13,160           389             135           524      13,684 
FS Spriggs Limited       14,580               -    14,580         (699)              52         (647)      13,933 
FS Bournemouth 
 Limited                 50,060               -    50,060           364             112           476      50,536 
FS Landmead 
 Limited                 51,580               -    51,580       (3,096)            (77)       (3,173)      48,407 
FS Kencot Limited        47,210               -    47,210       (2,151)              74       (2,077)      45,133 
FS Copley Limited        35,670               -    35,670         1,390              92         1,482      37,152 
FS Paddock Wood 
 Limited                 10,621               -    10,621           553            (71)           482      11,103 
FS Atherstone 
 Limited                 16,004               -    16,004         (321)           (113)         (434)      15,570 
FS Southam Limited       11,145               -    11,145           115            (63)            52      11,197 
FS Port Farms 
 Limited                 44,215               -    44,215            92            (14)            78      44,293 
FS Membury Limited       21,160               -    21,160         (460)             (9)         (469)      20,691 
                     ----------  --------------  --------  ------------  --------------  ------------  ---------- 
                        429,445               -   429,445       (8,043)             226       (7,817)     421,628 
                     ----------  --------------  --------  ------------  --------------  ------------  ---------- 
 

The above individual project valuations do not include a (GBP6,200,517) adjustment relating to future tax payments which will be settled at the Fund level.

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Holdco Limited as required by IFRS 12.

 
 
                                                                Unrealised                    Unrealised 
                                                               gain/(loss)                   gain/(loss)    Fair value 
                    Cost at                         Cost as        as at 1        Movement         as at         as at 
                  1 January       Additions  at 31 December        January   on unrealised   31 December   31 December 
                       2018   / (Disposals)            2018           2018     gain/(loss)          2018          2018 
                    GBP'000         GBP'000         GBP'000        GBP'000         GBP'000       GBP'000       GBP'000 
FS Wymeswold 
 Limited             48,590               -          48,590          (272)           1,502         1,230        49,820 
FS Castle Eaton 
 Limited             21,630               -          21,630          (835)             675         (160)        21,470 
FS Pitworthy 
 Limited             18,210               -          18,210        (1,582)             495       (1,087)        17,123 
FS Highfields 
 Limited             14,300               -          14,300          (726)             269         (457)        13,843 
FS High Penn 
 Limited             11,310               -          11,310          (804)             123         (681)        10,629 
FS Hunter's 
 Race Limited        13,160               -          13,160            389             743         1,132        14,292 
FS Spriggs 
 Limited             14,580               -          14,580          (699)             828           129        14,709 
FS Bournemouth 
 Limited             50,060               -          50,060            364           1,999         2,363        52,423 
FS Landmead 
 Limited             51,580               -          51,580        (3,096)           2,070       (1,026)        50,554 
FS Kencot 
 Limited             47,210               -          47,210        (2,151)             822       (1,329)        45,881 
FS Copley 
 Limited             35,670               -          35,670          1,390           1,288         2,678        38,348 
FS Paddock Wood 
 Limited 
 Limited             10,621               -          10,621            553           (147)           406        11,027 
FS Atherstone 
 Limited             16,004               -          16,004          (321)            (83)         (404)        15,600 
FS Southam 
 Limited             11,145               -          11,145            115            (13)           102        11,247 
FS Port Farms 
 Limited             44,215               -          44,215             92           1,442         1,534        45,749 
FS Membury 
 Limited             21,160               -          21,160          (460)             614           154        21,314 
                 ----------  --------------  --------------  -------------  --------------  ------------  ------------ 
                    429,445               -         429,445        (8,043)          12,627         4,584       434,029 
                 ----------  --------------  --------------  -------------  --------------  ------------  ------------ 
 

The cost and valuation of the indirect investments in solar farms directly correlate to the cost and valuation of the direct SPV investments as presented in the table above.

Period ended 30 June 2019

The following table represents the fair values of the investments held by FS Holdco 2 Limited as required by IFRS 12.

 
                                                               Unrealised                     Unrealised 
                                                    Cost as   gain/(loss)                    gain/(loss)  Fair value 
                          Cost at                        at       as at 1         Movement         as at       as at 
                        1 January       Additions   30 June       January    on unrealised       30 June     30 June 
                             2019   / (Disposals)      2019          2019      gain/(loss)          2019        2019 
                          GBP'000         GBP'000   GBP'000       GBP'000          GBP'000       GBP'000     GBP'000 
FS Debtco Limited 
 - Equity                       -               -         -        14,911            (486)        14,425      14,425 
FS Debtco Limited 
 - Loan                    74,894               -    74,894             -                -             -      74,894 
FS Welbeck Limited          4,350               -     4,350           561              584         1,145       5,495 
FS Trehawke 
 Limited                    4,670               -     4,670         1,069              809         1,878       6,548 
FS Homeland 
 Limited                    5,190               -     5,190         1,686              954         2,640       7,830 
FS Marsh Farm 
 Limited                    3,960               -     3,960           267              571           838       4,798 
FS Steventon 
 Limited                    4,210               -     4,210           579              570         1,149       5,359 
FS Fields Farm 
 Limited                    1,670               -     1,670           589              276           865       2,535 
FS Gedling Limited          1,930               -     1,930           557              353           910       2,840 
FS Sheepbridge 
 Limited                    1,890               -     1,890           492              305           797       2,687 
FS Tengore Limited          1,330               -     1,330           267              222           489       1,819 
FS Cuckoo Limited           2,500               -     2,500           248              542           790       3,290 
FS Field House 
 Limited                    3,120               -     3,120            96              495           591       3,711 
FS Upper Huntingford 
 Limited                    3,110               -     3,110           362              627           989       4,099 
FS Abergelli 
 Limited                    3,650               -     3,650           772              455         1,227       4,877 
FS Crow Trees 
 Limited                    1,810               -     1,810            93              166           259       2,069 
FS Yarburgh 
 Limited                    3,420               -     3,420           579              538         1,117       4,537 
FS Nowhere Solar 
 Limited                    3,672               -     3,672           211              613           824       4,496 
FS Bilsthorpe 
 Solar Limited              1,893               -     1,893           437              402           839       2,732 
FS Bulls Head 
 Solar Limited                  -               -     2,203           371              475           846       3,049 
FS Roskrow Solar 
 Limited                        -               -     3,674           748              470         1,218       4,892 
FS Abbeyfields 
 Solar Limited                  -               -     1,526           743              978         1,721       3,247 
FS Lindridge 
 Solar Limited                  -               -     1,721           561              296           857       2,578 
FS Misson Solar 
 Limited                        -               -     2,012           550              309           859       2,871 
FS Playters 
 Solar Limited                  -               -     3,963           428              536           964       4,927 
FS PS Manor 
 Farm Solar Limited             -               -     6,116           558               99           657       6,773 
FS SV Ash Solar 
 Park Limited                   -               -     3,387           317              496           813       4,200 
FS Pen Y Cae 
 Solar Limited                  -               -     2,927           599              356           955       3,882 
                       ----------  --------------  --------  ------------  ---------------  ------------  ---------- 
                          127,269               -   154,798        28,651           12,011        40,662     195,460 
                       ----------  --------------  --------  ------------  ---------------  ------------  ---------- 
 

Period ended 30 June 2018

The following table represents the fair values of the investments held by FS Holdco 2 Limited as required by IFRS 12.

 
 
                                                             Unrealised                     Unrealised 
                                                 Cost as    gain/(loss)                    gain/(loss)  Fair value 
                       Cost at                        at        as at 1         Movement         as at       as at 
                     1 January       Additions   30 June        January    on unrealised       30 June     30 June 
                          2018   / (Disposals)      2018           2018      gain/(loss)          2018        2018 
                       GBP'000         GBP'000   GBP'000        GBP'000          GBP'000       GBP'000     GBP'000 
FS Debtco Limited 
 - Equity                    -               -         -         10,269            (873)         9,756       9,756 
FS Debtco Limited 
 - Loan                 74,894          74,894    74,894              -                -             -      74,894 
                    ----------  --------------  --------  -------------  ---------------  ------------  ---------- 
                        74,894          74,894    74,894         10,269            (873)         9,756      84,650 
                    ----------  --------------  --------  -------------  ---------------  ------------  ---------- 
 

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Holdco 2 Limited as required by IFRS 12.

 
 
                                                                Unrealised                    Unrealised 
                                                               gain/(loss)                   gain/(loss)    Fair value 
                    Cost at                         Cost as        as at 1        Movement         as at         as at 
                  1 January       Additions  at 31 December        January   on unrealised   31 December   31 December 
                       2018   / (Disposals)            2018           2018     gain/(loss)          2018          2018 
                    GBP'000         GBP'000         GBP'000        GBP'000         GBP'000       GBP'000       GBP'000 
FS Debtco 
 Limited 
 - Equity                 -               -               -         10,269           4,642        14,911        14,911 
FS Debtco 
 Limited 
 - Loan              74,894               -          74,894              -               -             -        74,894 
FS Welbeck 
 Limited                  -           4,350           4,350              -             561           561         4,911 
FS Trehawke 
 Limited                  -           4,670           4,670              -           1,069         1,069         5,739 
FS Homeland 
 Limited                  -           5,190           5,190              -           1,686         1,686         6,876 
FS Marsh Farm 
 Limited                  -           3,960           3,960              -             267           267         4,227 
FS Steventon 
 Limited                  -           4,210           4,210              -             579           579         4,789 
FS Fields Farm 
 Limited                  -           1,670           1,670              -             589           589         2,259 
FS Gedling 
 Limited                  -           1,930           1,930              -             557           557         2,487 
FS Sheepbridge 
 Limited                  -           1,890           1,890              -             492           492         2,382 
FS Tengore 
 Limited                  -           1,330           1,330              -             267           267         1,597 
FS Cuckoo 
 Limited                  -           2,500           2,500              -             248           248         2,748 
FS Field House 
 Limited                  -           3,120           3,120              -              96            96         3,216 
FS Upper 
 Huntingford 
 Limited                  -           3,110           3,110              -             362           362         3,472 
FS Abergelli 
 Limited                  -           3,650           3,650              -             772           772         4,422 
FS Crow Trees 
 Limited                  -           1,810           1,810              -              93            93         1,903 
FS Yarburgh 
 Limited                  -           3,420           3,420              -             579           579         3,999 
FS Nowhere 
 Solar 
 Limited                  -           3,672           3,672              -             211           211         3,883 
FS Bilsthorpe 
 Solar Limited            -           1,893           1,893              -             437           437         2,330 
                 ----------  --------------  --------------  -------------  --------------  ------------  ------------ 
Sub-total 
 carried 
 forward             74,894          52,375         127,269         10,269          13,507        23,776       151,045 
                 ----------  --------------  --------------  -------------  --------------  ------------  ------------ 
 

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Holdco 2 Limited as required by IFRS 12 (continued).

 
 
                                                                Unrealised                   Unrealised 
                                                    Cost as    gain/(loss)       Movement   gain/(loss)     Fair value 
                       Cost at                        at 31        as at 1             on         as at          as at 
                     1 January      Additions      December        January     unrealised   31 December    31 December 
                          2018  / (Disposals)          2018           2018    gain/(loss)          2018           2018 
                       GBP'000        GBP'000       GBP'000        GBP'000        GBP'000       GBP'000        GBP'000 
Sub-total brought 
 forward                74,894         52,375       127,269         10,269         13,507        23,776        151,045 
 FS Bulls Head 
  Solar Limited              -          2,203         2,203              -            371           371          2,574 
FS Roskrow Solar 
 Limited                     -          3,674         3,674              -            748           748          4,422 
FS Abbeyfields 
 Solar Limited               -          1,526         1,526              -            743           743          2,269 
FS Lindridge 
 Solar Limited               -          1,721         1,721              -            561           561          2,282 
FS Misson Solar 
 Limited                     -          2,012         2,012              -            550           550          2,562 
FS Playters 
 Solar Limited               -          3,963         3,963              -            428           428          4,391 
FS PS Manor 
 Farm Solar 
 Limited                     -          6,116         6,116              -            558           558          6,674 
FS SV Ash Solar 
 Park Limited                -          3,387         3,387              -            317           317          3,704 
FS Pen Y Cae 
 Solar Limited               -          2,927         2,927              -            599           599          3,526 
                    ----------  -------------  ------------  -------------  -------------  ------------  ------------- 
                        74,894         79,904       154,798         10,269         18,382        28,651        183,449 
                    ----------  -------------  ------------  -------------  -------------  ------------  ------------- 
 

Period ended 30 June 2019

The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS 12.

 
 
                                                           Unrealised                     Unrealised 
                                               Cost as    gain/(loss)                    gain/(loss)    Fair value 
                     Cost at                        at        as at 1         Movement         as at         as at 
                   1 January       Additions   30 June        January    on unrealised       30 June       30 June 
                        2019   / (Disposals)      2019           2019      gain/(loss)          2019          2019 
                     GBP'000         GBP'000   GBP'000        GBP'000          GBP'000       GBP'000       GBP'000 
FS Shotwick 
 Solar Limited        74,894               -    74,894         11,889          (1,844)        10,045        84,939 
FS Sandridge 
 Solar Power 
 Limited              57,046               -    57,046          2,322          (1,306)         1,016        58,062 
FS SSR Wally 
 Corner Limited        5,718               -     5,718            236             (57)           179         5,897 
                  ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
                     137,658               -   137,658         14,447          (3,207)        11,240       148,898 
                  ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
 

Period ended 30 June 2018

The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS12.

 
 
                                                           Unrealised                     Unrealised 
                                               Cost as    gain/(loss)                    gain/(loss)    Fair value 
                     Cost at                        at        as at 1         Movement         as at         as at 
                   1 January       Additions   30 June        January    on unrealised       30 June       30 June 
                        2018   / (Disposals)      2018           2018      gain/(loss)          2018          2018 
                     GBP'000         GBP'000   GBP'000        GBP'000          GBP'000       GBP'000       GBP'000 
FS Shotwick 
 Solar Limited        74,894               -    74,894          9,696            (429)         9,267        84,161 
FS Sandridge 
 Solar Power 
 Limited              57,046               -    57,046            959            (415)           544        57,590 
FS SSR Wally 
 Corner Limited        5,718               -     5,718             41             (26)            15         5,733 
                  ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
                     137,658               -   137,658         10,696            (870)         9,826       147,484 
                  ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
 

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS 12.

 
 
                                                               Unrealised                    Unrealised 
                                                              gain/(loss)                   gain/(loss)     Fair value 
                   Cost at                         Cost as        as at 1        Movement         as at          as at 
                 1 January       Additions  at 31 December        January   on unrealised   31 December    31 December 
                      2018   / (Disposals)            2018           2018     gain/(loss)          2018           2018 
                   GBP'000         GBP'000         GBP'000        GBP'000         GBP'000       GBP'000        GBP'000 
FS Shotwick 
 Solar Limited      74,894               -          74,894          9,696           2,193        11,889         86,783 
FS Sandridge 
 Solar Power 
 Limited            57,046               -          57,046            959           1,363         2,322         59,368 
FS SSR Wally 
 Corner 
 Limited             5,718               -           5,718             41             195           236          5,954 
                ----------  --------------  --------------  -------------  --------------  ------------  ------------- 
                   137,658               -         137,658         10,696           3,751        14,447        152,105 
                ----------  --------------  --------------  -------------  --------------  ------------  ------------- 
 

Period ended 30 June 2019

The following table represents the fair values of the investments held by FS Holdco 3 Limited as required by IFRS 12.

 
 
                                                              Unrealised                     Unrealised 
                                                  Cost as    gain/(loss)                    gain/(loss)    Fair value 
                        Cost at                        at        as at 1         Movement         as at         as at 
                      1 January       Additions   30 June        January    on unrealised       30 June       30 June 
                           2019   / (Disposals)      2019           2019      gain/(loss)          2019          2019 
                        GBP'000         GBP'000   GBP'000        GBP'000          GBP'000       GBP'000       GBP'000 
FS Yardwall 
 Limited                  2,474               -     2,474            165             (70)            95         2,569 
FS Verwood Limited       13,955               -    13,955          1,933            (424)         1,509        15,464 
FS Park Farm 
 Limited                  8,116               -     8,116            995            (243)           752         8,868 
FS Coombeshead 
 Limited                  7,126               -     7,126            904            (214)           690         7,816 
FS Sawmills 
 Limited                  4,453               -     4,453            637            (136)           501         4,954 
                     ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
                         36,124               -    36,124          4,634          (1,087)         3,547        39,671 
                     ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
 

Period ended 30 June 2018

The following table represents the fair values of the investments held by FS Holdco 3 Limited as required by IFRS12.

 
 
                                                              Unrealised                     Unrealised 
                                                  Cost as    gain/(loss)                    gain/(loss)    Fair value 
                        Cost at                        at        as at 1         Movement         as at         as at 
                      1 January       Additions   30 June        January    on unrealised       30 June       30 June 
                           2018   / (Disposals)      2018           2018      gain/(loss)          2018          2018 
                        GBP'000         GBP'000   GBP'000        GBP'000          GBP'000       GBP'000       GBP'000 
FS Yardwall 
 Limited                      -           2,530     2,530              -               35            35         2,565 
FS Verwood Limited            -          14,110    14,110              -            (122)         (122)        13,988 
FS Park Farm 
 Limited                      -           8,180     8,180              -            (111)         (111)         8,069 
FS Coombeshead 
 Limited                      -           7,240     7,240              -             (98)          (98)         7,142 
FS Sawmills 
 Limited                      -           4,530     4,530              -             (61)          (61)         4,469 
                     ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
                              -          36,590    36,590              -            (357)         (357)        36,233 
                     ----------  --------------  --------  -------------  ---------------  ------------  ------------ 
 

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Holdco 3 Limited as required by IFRS 12.

 
 
                                                               Unrealised                    Unrealised 
                                                              gain/(loss)                   gain/(loss)     Fair value 
                   Cost at                         Cost as        as at 1        Movement         as at          as at 
                 1 January       Additions  at 31 December        January   on unrealised   31 December    31 December 
                      2018   / (Disposals)            2018           2018     gain/(loss)          2018           2018 
                   GBP'000         GBP'000         GBP'000        GBP'000         GBP'000       GBP'000        GBP'000 
FS Yardwall 
 Limited                 -           2,474           2,474              -             165           165          2,639 
FS Verwood 
 Limited                 -          13,955          13,955              -           1,933         1,933         15,888 
FS Park Farm 
 Limited                 -           8,116           8,116              -             995           995          9,111 
FS Coombeshead 
 Limited                 -           7,126           7,126              -             904           904          8,030 
FS Sawmills 
 Limited                 -           4,453           4,453              -             637           637          5,090 
                ----------  --------------  --------------  -------------  --------------  ------------  ------------- 
                         -          36,124          36,124              -           4,634         4,634         40,758 
                ----------  --------------  --------------  -------------  --------------  ------------  ------------- 
 

Perid ended 30 June 2019

The following table represents the fair values of the investments held by FS Holdco 4 Limited as required by IFRS 12.

 
                                                               Unrealised                     Unrealised 
                                                    Cost as   gain/(loss)                    gain/(loss)    Fair value 
                          Cost at                        at       as at 1         Movement         as at         as at 
                        1 January       Additions   30 June       January    on unrealised       30 June       30 June 
                             2019   / (Disposals)      2019          2019      gain/(loss)          2019          2019 
                          GBP'000         GBP'000   GBP'000       GBP'000          GBP'000       GBP'000       GBP'000 
 
  Bannerton Solar 
  Farm                     22,882               -    22,882        (450)*          (2,472)       (2,922)        19,960 
Longreach New 
 Holdco Pty Limited         2,650             295     2,945           431            (524)          (93)         2,852 
Oakey 1 New 
 Holdco Pty Limited         4,367             479     4,846         (85)*               37          (48)         4,798 
FS Oakey 2 Pty 
 Limited                   33,988               -    33,988        (681)*           (625)*      (1,306)*        32,682 
                      -----------  --------------  --------  ------------  ---------------  ------------  ------------ 
                           63,887             774    64,661         (785)          (3,584)       (4,369)        60,292 
                      -----------  --------------  --------  ------------  ---------------  ------------  ------------ 
 

*This relates to FX gain on translation from AUD to GBP at 30 June 2019 and 31 December 2018.

Period ended 30 June 2018

The following table represents the fair values of the investments held by FS Holdco 4 Limited as required by IFRS12.

 
                                                                   Unrealised                   Unrealised 
                              Adjusted                  Cost as   gain/(loss)       Movement   gain/(loss)  Fair value 
                   Cost at     Cost at                       at         as at             on         as at       as at 
                 1 January   1 January      Additions   30 June     1 January     unrealised       30 June     30 June 
                      2018        2018  / (Disposals)      2018          2018    gain/(loss)          2018        2018 
                   GBP'000     GBP'000        GBP'000   GBP'000       GBP'000        GBP'000       GBP'000     GBP'000 
 
  Bannerton 
  Solar 
  Farm              12,482      12,482         10,400    22,882             -              -             -      22,882 
Longreach New 
 Holdco Pty 
 Limited             5,218       2,613             37     2,650             -            370           370       3,020 
Oakey 1 New 
 Holdco Pty 
 Limited             7,842       4,306             61     4,367           80*           (80)             -       4,367 
FS Oakey 2 
 Pty Limited        15,910      22,051          3,552    25,603          120*          (120)             -      25,603 
                ----------  ----------  -------------  --------  ------------  -------------  ------------  ---------- 
                    41,452      41,452         14,050    55,502           200            170           370      55,872 
                ----------  ----------  -------------  --------  ------------  -------------  ------------  ---------- 
 

Year ended 31 December 2018

The following table represents the fair values of the investments held by FS Holdco 4 Limited as required by IFRS 12.

 
 
                                                               Unrealised                    Unrealised 
                   Adjusted                        Cost as    gain/(loss)       Movement    gain/(loss)     Fair value 
                    Cost at                          at 31        as at 1             on          as at          as at 
                  1 January       Additions       December        January     unrealised    31 December    31 December 
                     2018**   / (Disposals)           2018           2018    gain/(loss)           2018           2018 
                    GBP'000         GBP'000        GBP'000        GBP'000        GBP'000        GBP'000        GBP'000 
 
  Bannerton 
  Solar 
  Farm               12,482          10,400         22,882              -         (450)*         (450)*         22,432 
Longreach New 
 Holdco Pty 
 Limited              2,650               -          2,650              -            431            431          3,081 
Oakey 1 New 
 Holdco Pty 
 Limited              4,367               -          4,367              -          (85)*          (85)*          4,282 
FS Oakey 2 Pty 
 Limited             22,153          11,835         33,988           200*         (881)*         (681)*         33,307 
                -----------  --------------  -------------  -------------  -------------  -------------  ------------- 
                     41,652          22,235         63,887            200          (985)          (785)         63,102 
                -----------  --------------  -------------  -------------  -------------  -------------  ------------- 
 

*This relates to FX gain on translation from AUD to GBP at 31 December 2018 and 31 December 2017.

** In the prior year the cost was reflected as per the Share Purchase Agreement. In the current year it is split per the production outpout of each investment.

   17.     Fair value of the investments in unconsolidated entities 

Valuation process

Valuations are the responsibility of the Board of Directors. The Investment Manager is responsible for submitting fair market valuations of Group assets to the Directors. The Directors review and approve these valuations following appropriate challenge and examination. Valuations are carried out quarterly. The current portfolio consists of non-market traded investments and valuations are based on a discounted cash flow methodology. The Investment Manager's assessment of fair value of investments is determined in accordance with the International Private Equity and Venture Capital ("IPEV") Valuation Guidelines, using levered and unlevered Discounted Cash Flow principles. The Investment Manager and Directors consider that the discounted cash flow methodology used in deriving a fair value is in accordance with the fair value requirements of IFRS 13. Certain investments held by FS Holdco 4 were valued at cost as at 30 June 2019, 30 June 2018 and 31 December 2018 as these projects were not yet operational, and are therefore not included in the sensitivity analysis on the following pages.

Useful economic lives ("UELs")

The valuation of the Company's investments is determined based on the discounted value of future cash flows of those investments over their UELs.

The UEL of individual assets is determined by reference to a fixed contractual lease term, and therefore, the Board and Manager do not consider that the UEL can have a significant impact on the valuation of the investments.

However, the Board notes that if extended contractual lease terms were negotiated for individual assets, this would increase the value of those assets. Similarly, if the assets did not operate for the duration of the fixed contractual period, this would reduce the value of those assets.

Sensitivity analysis of significant changes in unobservable inputs within Level hierarchy of underlying Investments

The majority of the Company's underlying investments (indirectly held through its unconsolidated subsidiaries FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4) are valued with reference to the discounted value of future cash flows. The Directors consider the valuation methodology used, including the key assumptions and discount rate applied, to be appropriate. The Board review, at least annually, the valuation inputs and where possible, make use of observable market data to ensure valuations reflect the fair value of the investments. A broad range of assumptions are used in the valuation models. These assumptions are based on long-term forecasts and are not affected by short term fluctuations in inputs, be it economic or technical.

The Directors consider the following to be significant inputs to the discounted cash flows ("DCF") calculation.

Discount rate

The weighted average discount rate used is 7.15% (2018: 7.30%). The Directors do not expect to see a significant change in the discount rates applied within the Solar Infrastructure sector. Therefore a variance of +/- 0.5% is considered reasonable.

 
                -0.50%  -0.25%   Base  +0.25%  +0.50% 
                ------  ------  -----  ------  ------ 
Directors' 
 valuation 
 (GBPm)          835.8   819.8  804.3   789.3   774.7 
--------------  ------  ------  -----  ------  ------ 
NAV per share 
 (pence)         115.3   112.4  109.6   106.8   104.2 
--------------  ------  ------  -----  ------  ------ 
Change vs 
 Base Case 
 (%)              3.92    1.93   0.00  (1.87)  (3.68) 
--------------  ------  ------  -----  ------  ------ 
 

Production

Base case production is a function of a number of separate assumptions including irradiation levels, availability of the sites and technical performance of the equipment. A sensitivity of +/-10% is considered reasonable given stable levels of irradiation, contractual availability guarantees and understanding of future performance levels of the equipment.

 
                                 -10%   Base   +10% 
                              -------  -----  ----- 
Directors' valuation (GBPm)     694.7  804.3  913.2 
----------------------------  -------  -----  ----- 
NAV per share (pence)            89.6  109.6  129.4 
----------------------------  -------  -----  ----- 
Change vs Base Case (%)       (13.62)   0.00  13.54 
----------------------------  -------  -----  ----- 
 

Power Price

DCF models assume power prices that are consistent with the Power Purchase Agreements ("PPA") currently in place. At the PPA end date, the model reverts to the power price forecast.

The power price forecasts are updated quarterly and based on power price forecasts from leading independent sources. The Investment Manager adjusts where more conservative assumptions are considered appropriate and applies expected PPA sales discounts. The forecast assumes an average annual increase in power prices in real terms of approximately 1.3%.

During the year, c.60% of the Company's operational performance came from the sale of renewable obligation certificates ("ROCs"). These revenues are directly and explicitly linked to inflation for 20 years from the accreditation date under the ROC regime and therefore are not considered for sensitivity analysis. The remaining c.40% of revenue is derived from electricity sales which are subject to power price movements.

 
                 -20.0%  -10.0%   Base  +10.0%  +20.0% 
                -------  ------  -----  ------  ------ 
Directors' 
 valuation 
 (GBPm)           697.3   751.0  804.3   857.4   910.4 
--------------  -------  ------  -----  ------  ------ 
NAV per share 
 (pence)           90.1    99.9  109.6   119.3   128.9 
--------------  -------  ------  -----  ------  ------ 
Change vs 
 Base Case 
 (%)            (13.30)  (6.63)   0.00    6.60   13.19 
--------------  -------  ------  -----  ------  ------ 
 

Inflation

A variable of 1.5% is considered reasonable given historic fluctuations. A long term inflation rate of 2.75% (2018: 2.75%) has been used.

 
                 -1.50%  -0.75%   Base  +0.75%  +1.50% 
                -------  ------  -----  ------  ------ 
Directors' 
 valuation 
 (GBPm)           710.4   755.6  804.3   856.9   913.9 
--------------  -------  ------  -----  ------  ------ 
NAV per share 
 (pence)           92.5   100.7  109.6   119.2   129.5 
--------------  -------  ------  -----  ------  ------ 
Change vs 
 Base Case 
 (%)            (11.67)  (6.06)   0.00    6.54   13.62 
--------------  -------  ------  -----  ------  ------ 
 

Operating costs (investment level)

Operating costs include operating and maintenance ("O&M"), insurance and lease costs. Other costs are fixed and are therefore not considered to be sensitive to changes in unobservable inputs. Base case costs are based on current commercial agreements. We would not expect these costs to fluctuate widely over the life of the assets and are comfortable that the base case is prudent. A variance of +/- 5.0% is considered reasonable, a variable of 10.0% is shown for information purposes.

 
                -10.0%  -5.0%   Base   +5.0%  +10.0% 
                ------  -----  -----  ------  ------ 
Directors' 
 valuation 
 (GBPm)          820.1  812.2  804.3   796.4   788.4 
--------------  ------  -----  -----  ------  ------ 
NAV per share 
 (pence)         112.5  111.0  109.6   108.1   106.7 
--------------  ------  -----  -----  ------  ------ 
Change vs 
 Base Case 
 (%)              1.97   0.98   0.00  (0.99)  (1.97) 
--------------  ------  -----  -----  ------  ------ 
 
   17.     Fair value of the investments in unconsolidated entities (continued) 

AUD/GBP Exchange Rate

The Fund is directly exposed to fluctuations in foreign currency due to its investments in Australian dollar denominated assets. Whilst the Group mitigates its exposure to fluctuations in AUD through the use of forward contracts, the valuations of these assets will be directly impacted. Whilst we would not expect to see fluctuations quite this large, a variable of 20% is considered appropriate.

 
                -20.0%  -10.0%   Base  +10.0%  +20.0% 
                ------  ------  -----  ------  ------ 
Directors' 
 valuation 
 (GBPm)          792.0   798.2  804.3   810.4   816.5 
--------------  ------  ------  -----  ------  ------ 
NAV per share 
 (pence)         107.3   108.5  109.6   110.7   111.8 
--------------  ------  ------  -----  ------  ------ 
Change vs 
 Base Case 
 (%)            (1.52)  (0.76)   0.00    0.76    1.52 
--------------  ------  ------  -----  ------  ------ 
 
   18.     Stated Capital and Share Premium 

The share capital and share premium of the Company consists solely of Ordinary Shares of nil par value and therefore the value of the stated capital relates only to share premium. At any General Meeting of the Company each Shareholder will have, on a show of hands, one vote and on a poll one vote in respect of each Ordinary Share held. Stated capital is the net proceeds received from the issue of Ordinary Shares (net of issue costs capitalised). The holders of the Ordinary Shares are entitled to receive dividends from time to time.

Ordinary Shares

 
                               30 June      30 June  31 December 
                                  2019         2018         2018 
                                Shares       Shares       Shares 
Opening balance            548,941,550  449,952,091  449,952,091 
Issued during the period             -            -   98,989,459 
                           -----------  -----------  ----------- 
Closing balance            548,941,550  449,952,091  548,941,550 
                           -----------  -----------  ----------- 
 
 
                             30 June   30 June  31 December 
                                2019      2018         2018 
                             GBP'000   GBP'000      GBP'000 
Opening balance              588,798   454,515      454,515 
Proceeds from share issue          -         -      106,189 
Less: issue costs                  -         -      (1,906) 
                            --------  --------  ----------- 
Closing balance              588,798   454,515      558,798 
                            --------  --------  ----------- 
 
   19.     NAV per Ordinary Share 

The Net Asset Value ("NAV") per redeemable Ordinary Share for the Company 109.6 pence per ordinary share (period ended 30 June 2018: 105.2, year ended 31 December 2018: 111.2) This is based on the Net Asset Value at the reporting date of GBP601,540,008 (30 June 2018: GBP473,133,573, 31 December 2018: GBP610,257,766) and on 548,941,550 (30 June 2018: 449,952,091, 31 December 2018: 548,941,550) redeemable Ordinary Shares, being the number of Ordinary Shares in issue at the end of the period.

   20.     Financial instruments and risk profile 

The Company holds cash and liquid resources as well as having receivables and payables that arise directly from its operations. The underlying investments of the Company's investment activities indirectly expose it to various types of risk associated with solar power. The main risks arising from the Company's financial instruments are market risk, liquidity risk, credit risk and interest rate risk. The Directors regulatory review and agree policies for managing each of these risks and these are summarised below:

   20.1   Market risk 
              (a)      Foreign exchange risk 

Foreign currency risk, as defined in IFRS 7, arises as the values of recognised monetary assets and monetary liabilities denominated in other currencies fluctuate due to changes in foreign exchange rates. Transactions in foreign currency are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to pounds sterling at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in income.

The Company has no direct exposure to foreign currency risk, however through its underlying investment in FS Holdco 4 it has indirect exposure. FS Holdco 4 is directly exposed to fluctuations in foreign currency due to its investments in Australian dollar denominated assets. The Group mitigates its exposure to fluctuations in foreign currency through the use of forward exchange contracts.

The carrying amount of FS Holdco 4's foreign currency exposure at the reporting date is as follows:

 
       30 June   30 June  31 December 
          2019      2018         2018 
       GBP'000   GBP'000      GBP'000 
AUD     60,292    55,872       63,102 
      --------  --------  ----------- 
 

The FX rate applied at 30 June 2019 0.55 (30 June 2018: 0.56, 31 December 2018: 0.55). A 10% weakening or strengthening of the FX rate would have a GBP6,028,200 impact on the valuation of assets denominated in AUD.

              (b)         Price risk 

The Company's investments are susceptible to market price risk arising from uncertainties about future values of the instruments. The Board's Investment Manager provides the Company with investment recommendations. The Board's Investment Manager's recommendations are reviewed and approved by the Investment Manager before the investment decisions are implemented. To manage the market price risk, the Board's Investment Manager reviews the performance of the investments on a regular basis and is in regular contact with the management of the non current investments for business and operational matters.

Price risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. At 30 June 2019, the Company's only investment was valued at net assets excluding the outstanding loans issued by the Company. Were this value to increase by 10%, the increase in net assets attributable to shareholders for the period would have been GBP52,321,494 (30 June 2018: GBP40,342,170, 31 December 2018: GBP53,018,750). The impact of changes in unobservable inputs to the underlying investments is considered in note 17.

              (c)         Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term borrowing to its subsidiary. At period end the Company had no long term borrowings with third parties (1 January 2018 to 30 June 2018: GBPNil, 1 January 2018 to 31 December 2018: GBPNil).

 
                                     Weighted average 
                                                       Weighted average 
                                                         time for which 
                    Total portfolio     interest rate     rate is fixed 
                            30 June           30 June           30 June 
                               2019              2019              2019 
                            GBP'000                 %              Days 
Loan notes                  250,000            11.00%               961 
Shareholder loans           249,316             2.00%             1,652 
Cash                          5,710             0.05%                 - 
                    --------------- 
                            505,026 
                    --------------- 
 
 
                                     Weighted average 
                                                       Weighted average 
                                                         time for which 
                    Total portfolio     interest rate     rate is fixed 
                            30 June           30 June           30 June 
                               2018              2018              2018 
                            GBP'000                 %              Days 
Loan notes                  250,000            11.00%               234 
Shareholder loans           158,610             2.00%               741 
Cash                            180                 -                 - 
                    --------------- 
                            408,790 
                    --------------- 
 
 
                                                        Weighted average 
                                     Weighted average     time for which 
                    Total portfolio     interest rate      rate is fixed 
                        31 December       31 December        31 December 
                               2018              2018               2018 
                            GBP'000                 %               Days 
Loan notes                  250,000            11.00%                780 
Shareholder loans           249,316             2.00%              1,287 
Cash                    12,282                  0.05%                  - 
                    --------------- 
                        511,598 
                    --------------- 
 
   20.2   Liquidity risk 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due as a result of the maturity of assets and liabilities not matching. An unmatched position potentially enhances profitability, but can also increase the risk of losses. Liquidity could be impaired by an inability to access secured and/or unsecured sources of financing to meet financial commitments. The Board monitors the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.

30 June 2019

 
                      Carrying  Contractual  Less than   6 to 12  Greater than 
                        amount        Total   6 months    Months     12 months 
                       GBP'000      GBP'000    GBP'000   GBP'000       GBP'000 
Financial Assets 
Investments            523,215      523,215          -         -       523,215 
Trade and other 
 Receivables               258          258        258         -             - 
Interest receivable     74,190       74,190     74,190         -             - 
Cash and cash 
 equivalents             5,710        5,710      5,710         -             - 
                      --------  -----------  ---------  --------  ------------ 
 
Total Financial 
 assets                603,373      603,373     80,158         -       523,215 
Trade and other 
 payables              (1,833)      (1,833)    (1,833)         -             - 
                      --------  -----------  ---------  --------  ------------ 
Total financial 
 liabilities           (1,833)      (1,833)    (1,833)         -             - 
                      --------  -----------  ---------  --------  ------------ 
Net position           601,540      601,540     78,325         -       523,215 
                      --------  -----------  ---------  --------  ------------ 
 

30 June 2018

 
                      Carrying  Contractual  Less than        6 to  Greater than 
                        amount        Total   6 months   12 Months     12 months 
                       GBP'000      GBP'000    GBP'000     GBP'000       GBP'000 
Financial Assets 
Investments            403,422      403,422          -           -       403,422 
Trade and other 
 Receivables             1,926        1,926      1,926           -             - 
Interest receivable     68,948       68,948     68,948           -             - 
Cash and cash 
 equivalents               180          180        180           -             - 
                      --------  -----------  ---------  ----------  ------------ 
 
Total Financial 
 assets                474,476      474,476     71,054           -       403,422 
Trade and other 
 payables              (1,342)      (1,342)    (1,342)           -             - 
                      --------  -----------  ---------  ----------  ------------ 
Total financial 
 liabilities           (1,342)      (1,342)    (1,342)           -             - 
                      --------  -----------  ---------  ----------  ------------ 
Net position           473,134      473,134     69,712           -       403,422 
                      --------  -----------  ---------  ----------  ------------ 
 

31 December 2018

 
                      Carrying  Contractual  Less than        6 to  Greater than 
                        amount        Total   6 months   12 Months     12 months 
                       GBP'000      GBP'000    GBP'000     GBP'000       GBP'000 
Financial Assets 
Investments            530,187      530,187          -           -       530,187 
Trade and other 
 Receivables               265          265        265           -             - 
Interest receivable     69,338       69,338     69,338           -             - 
Cash and cash 
 equivalents            12,282       12,282     12,282           -             - 
                      --------  -----------  ---------  ----------  ------------ 
 
Total Financial 
 assets                612,072      612,072     81,885           -       530,187 
 
  Trade and other 
  payables             (1,814)      (1,814)    (1,814)           -             - 
                      --------  -----------  ---------  ----------  ------------ 
Total financial 
 liabilities           (1,814)      (1,814)    (1,814)           -             - 
                      --------  -----------  ---------  ----------  ------------ 
Net position           610,258      610,258     80,071           -       530,187 
                      --------  -----------  ---------  ----------  ------------ 
 
   20.3   Credit risk 

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

The Company places cash with authorised deposit takers and is therefore potentially at risk from the failure of such institutions.

In respect of credit risk arising from other financial assets and liabilities, which mainly comprise of cash and cash equivalents, exposure to credit risk arises from default of the counterparty with a maximum exposure equal to the carrying amounts of these instruments. In order to mitigate such risks, cash is maintained with major international financial institutions. During the period and at the reporting date, the Company maintained relationships with the following financial institutions:

 
                                           Moody's Credit  30 June 2019 
                                                   Rating       GBP'000 
Cash in hand: 
   Royal Bank of Scotland International 
    Limited                                            P2         5,708 
   Lloyds Bank International Limited                   P1             2 
                                                           ------------ 
                        Total cash balances held by banks         5,710 
                                                           ------------ 
 
 
                                                  Moody's  30 June 2018 
                                            Credit Rating       GBP'000 
Cash in hand: 
   Royal Bank of Scotland International 
    Limited                                            P2            10 
   Lloyds Bank International Limited                   P1           170 
                                                           ------------ 
Total cash balances held by banks                                   180 
                                                           ------------ 
 
 
                                           Moody's Credit  31 December 2018 
                                                   Rating           GBP'000 
Cash in hand: 
   Royal Bank of Scotland International 
    Limited                                            P2            12,280 
   Lloyds Bank International Limited                   P1                 2 
                                                           ---------------- 
Total cash balances held by banks                                    12,282 
                                                           ---------------- 
 

The Company is also indirectly exposed to credit risk through its investment in UK Hold Co. The Board of UK Hold Co has determined that the maximum exposure to credit risk in relation to investments is GBP610,239,946, being the portion of UK Hold Co investments that are made up of loans as at 30 June 2019 (30 June 2018: GBP582,019,152, 31 December 2018: GBP610,239,946). Included within this are the related party loans as disclosed within note 23 as well as an external long term debt facility entered into by FS Holdco and FS Debtco and Santander. The balance of the external debt facility as at period end amounted to GBP251,057,609 (30 June 2018: GBP251,057,609, 31 December 2018: GBP251,057,609).

              b)        Expected credit loss assessment 

Investments held at fair value through profit or loss are not subject to IFRS 9 impairment requirements.

The Company applies the simplified approach to measuring expected credit losses, as permitted by IFRS 9, which uses a 12 month expected loss allowance for all trade receivables. The expected credit loss on trade receivables and the balance at year end was deemed by management to be not material and therefore no impairment adjustments were accounted for.

   20.4   Other risks 

Political and economic risk

The value of Ordinary Shares may be affected by uncertainties such as political or diplomatic developments, social and religious instability, changes in government policies, taxation or interest rates, currency repatriation and other political and economic developments in law or regulations and, in particular, the risk of expropriation, nationalisation, and confiscation of assets and changes in legislation relating to the level of foreign ownership.

Governmental authorities at all levels are actively involved in the promulgation and enforcement of regulations relating to taxation, land use and zoning and planning restrictions, environmental protection, safety and other matters. The introduction and enforcement of such regulations could have the effect of increasing the expense and lowering the income or rate of return from, as well as adversely affecting the value of, the Company's assets.

For the Company's UK solar sites the main risks from Brexit that the Company is currently considering are the stability of the operating and maintenance (O&M) companies that are employed across the portfolio and the supply chain of components as part of either corrective or preventative maintenance work.

In relation to the O&M companies themselves, all of the primary O&M companies across a majority of the UK portfolio are UK based operations who are wholly owned by UK entities.

The supply chain for spare parts is the other main risk that Management foresees due to Brexit in terms of getting spare parts to sites promptly from other parts of the EU, especially in the event of a no deal Brexit.

Whilst Brexit presents certain risks in relation to the operation of the UK solar portfolio the Asset Manager shall be working to ensure that there are robust spare parts provision in the UK and continue to work with the O&M providers and their downstream suppliers to ensure down time is minimised across the portfolio as much as possible.

   21.     Capital Management 

The Company's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares (up to its authorised number of shares) or sell assets to reduce debt.

   22.     Dividends 
 
           30 June  2019 Pence/   30 June  2018 Pence/  31 December  2018 Pence/ 
              2019     Ordinary      2018     Ordinary         2018     Ordinary 
           GBP'000        share   GBP'000        share      GBP'000        share 
Quarter 
 1           9,057         1.64     7,110         1.58        7,109         1.58 
Quarter 
 2           9,058         1.64     7,109         1.58        7,109         1.58 
Quarter 
 3             N/A          N/A       N/A          N/A        8,118         1.64 
Quarter 
 4             N/A          N/A       N/A          N/A        9,003         1.64 
          --------               --------               ----------- 
            18,115                 14,219                    31,339 
          --------               --------               ----------- 
 
   23.     Related party disclosures 

For the purposes of these Financial Statements, a related party is an entity or entities who are able to exercise significant influence directly or indirectly on the Company's operations.

As noted in Note 2, the Company does not consolidate its subsidiary. However, the Company and its subsidiaries (direct and indirect) are a Group and therefore, are considered to be related parties.

Transactions with UK Hold Co

For the period ended 30 June 2019:

 
                          Opening Balance        Increase       Repayment 
                                    as at              in              of  Closing Balance 
                                1 January   loan/Interest   loan/Interest            as at 
                                     2019         charged          repaid     30 June 2019 
                                  GBP'000         GBP'000         GBP'000          GBP'000 
Loan Notes                        250,000               -               -          250,000 
Interest on Loan Notes             56,814          17,203        (13,000)           61,017 
Shareholder Loan 1                249,316               -               -          249,316 
Interest on Shareholder 
 Loan 1                            12,524           2,495         (1,846)           13,173 
Non interest bearing 
 loan included in trade 
 and other payables                   183               4               -              187 
 

For the period ended 30 June 2018:

 
                          Opening Balance        Increase       Repayment 
                                    as at              in              of  Closing Balance 
                                1 January   loan/Interest   loan/Interest            as at 
                                     2018         charged          repaid     30 June 2018 
                                  GBP'000         GBP'000         GBP'000          GBP'000 
Loan Notes                        250,000               -               -          250,000 
Interest on Loan Notes             48,746          16,751               -           65,497 
Shareholder Loan 1                154,110           4,500               -          158,610 
Interest on Shareholder 
 Loan 1                             8,880           1,571         (6,920)            3,531 
Non interest bearing 
 loan included in trade 
 and other receivables              1,116               -               -            1,116 
 

For the period ended 31 December 2018:

 
                                                 Increase       Repayment 
                          Opening Balance              in              of     Closing Balance 
                                    as at   loan/Interest   loan/Interest   as at 31 December 
                           1 January 2018         charged          repaid                2018 
                                  GBP'000         GBP'000         GBP'000             GBP'000 
Loan Notes                        250,000               -               -             250,000 
Interest on Loan 
 Notes                             48,746          33,172        (25,104)              56,814 
Shareholder Loan 
 1                                154,110          95,206               -             249,316 
Interest on Shareholder 
 Loan 1                             8,880           3,644               -              12,524 
Non interest bearing 
 loan included in 
 trade and other 
 receivables                        1,116               -         (1,116)                   - 
Non interest bearing 
 loan included in 
 trade and other 
 payables                               -             183               -                 183 
 

The increases in the shareholder loan of GBP95,206,725 were funded through 2 separate placing proceeds during 2018.

Transactions between UK Hold Co and its underlying subsidiaries

Transactions with FS Holdco

For the period ended 30 June 2019:

 
                              Opening Balance 
                                        as at           Increase          Repayment  Closing Balance 
                                    1 January   in loan/Interest   of loan/Interest            as at 
                                         2019            charged             repaid     30 June 2019 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                               343,731                  -                  -          343,731 
Interest on investment 
 loan 1                                47,053             13,636           (10,532)           50,157 
Interest bearing Investment 
 loan 2                              (40,000)                  -                  -         (40,000) 
Interest on investment 
 loan 2                               (1,253)              (992)                  -          (2,245) 
Non interest bearing 
 loan                               (143,504)                  -                  -        (143,504) 
Non interest bearing 
 loan included in trade 
 and other receivables                    875                  -                  -              875 
 

For the period ended 30 June 2018:

 
                              Opening Balance 
                                        as at           Increase          Repayment  Closing Balance 
                                    1 January   in loan/Interest   of loan/Interest            as at 
                                         2018            charged             repaid     30 June 2018 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                               343,731                  -                  -          343,731 
Interest on investment 
 loan 1                                37,711             13,636                  -           51,347 
Interest bearing Investment 
 loan 2                                     -           (40,000)                  -         (40,000) 
Interest on investment 
 loan 2                                     -              (395)                  -            (395) 
Non interest bearing 
 loan                               (143,504)                  -                  -        (143,504) 
Non interest bearing 
 loan included in trade 
 and other receivables                    715                160                  -              875 
 

For the period ended 31 December 2018:

 
                              Opening Balance                                        Closing Balance 
                                        as at           Increase          Repayment            as at 
                                    1 January   in loan/Interest   of loan/Interest      31 December 
                                         2018            charged             repaid             2018 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                               343,731                  -                  -          343,731 
Interest on investment 
 loan 1                                37,711             27,499           (18,157)           47,053 
Interest bearing Investment 
 loan 2                                     -           (40,000)                  -         (40,000) 
Interest on investment 
 loan 2                                     -            (1,403)                150          (1,253) 
Non interest bearing 
 loan                               (143,504)                  -                  -        (143,504) 
Non interest bearing 
 loan included in trade 
 and other receivables                    715                160                  -              875 
 

Transactions with FS Holdco 2

For the period ended 30 June 2019:

 
                               Opening Balance           Increase          Repayment  Closing Balance 
                                       as at 1   in loan/Interest   of loan/Interest    as at 30 June 
                                  January 2019            charged             repaid             2019 
                                       GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                                 74,894                  -                  -           79,894 
Interest on investment 
 loan 1                                  3,745              1,857                  -            5,602 
Interest bearing Investment 
 loan 2                                  9,107                  -                  -            9,107 
Interest on investment 
 loan 2                                     42                226                  -              268 
Interest bearing Investment 
 loan 3                                 33,094                  -                  -           33,094 
Interest on investment 
 loan 3                                    150                820                  -              970 
Interest bearing Investment 
 loan 4                                  3,432                  -                  -            3,432 
Interest on investment 
 loan 4                                      6                 85                  -               91 
Interest bearing Investment 
 loan 5                                 46,500                  -                  -           46,500 
Interest on investment 
 loan 5                                    962              1,153                  -            2,115 
Interest bearing loan 
 payable 1                            (28,970)                  -                  -         (28,970) 
Interest on loan payable 
 1                                     (1,449)              (718)                  -          (2,167) 
Interest bearing loan 
 payable 2                            (13,000)                  -                  -         (13,000) 
Interest on interest bearing 
 loan payable 2                          (819)              (322)                  -          (1,141) 
Interest bearing loan 
 payable 3                             (7,082)                  -                  -          (7,082) 
Interest on loan payable 
 3                                       (263)              (176)                  -            (439) 
Interest bearing loan 
 payable 4                             (8,386)                  -                  -          (8,386) 
Interest on loan payable 
 4                                       (208)              (208)                  -            (416) 
Non interest bearing loan 
 1                                     (2,604)               (63)                  -          (2,667) 
Non interest bearing loan 
 2                                       (875)                  -                  -            (875) 
 

For the period ended 30 June 2018:

 
                               Opening Balance           Increase          Repayment  Closing Balance 
                                       as at 1   in loan/Interest   of loan/Interest    as at 30 June 
                                  January 2018            charged             repaid             2018 
                                       GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                                 74,894                  -                  -           74,894 
Interest on investment 
 loan 1                                      -              1,857                  -            1,857 
Interest bearing loan 
 payable 1                            (28,970)                  -                  -         (28,970) 
Interest on loan payable 
 1                                           -              (718)                  -            (718) 
Interest bearing loan 
 payable 2                            (13,000)                  -                  -         (13,000) 
Interest on interest bearing 
 loan payable 2                          (169)              (322)                  -            (491) 
Interest bearing loan 
 payable 3                                   -            (7,082)                  -          (7,082) 
Interest on loan payable 
 3                                           -                  -                  -                - 
Non interest bearing loan 
 1                                     (3,734)                  -                102          (3,632) 
Non interest bearing loan 
 2                                       (715)              (160)                  -            (875) 
 

For the year ended 31 December 2018:

 
                               Opening Balance           Increase          Repayment     Closing Balance 
                                       as at 1   in loan/Interest   of loan/Interest   as at 31 December 
                                  January 2018            charged             repaid                2018 
                                       GBP'000            GBP'000            GBP'000             GBP'000 
Interest bearing Investment 
 loan 1                                 74,894                  -                  -              74,894 
Interest on investment 
 loan 1                                      -              3,745                  -               3,745 
Interest bearing Investment 
 loan 2                                      -              9,107                  -               9,107 
Interest on investment 
 loan 2                                      -                 42                  -                  42 
Interest bearing Investment 
 loan 3                                      -             33,094                  -              33,094 
Interest on investment 
 loan 3                                      -                150                  -                 150 
Interest bearing Investment 
 loan 4                                      -              3,432                  -               3,432 
Interest on investment 
 loan 4                                      -                  6                  -                   6 
Interest bearing Investment 
 loan 5                                      -             46,500                  -              46,500 
Interest on investment 
 loan 5                                      -                962                  -                 962 
Interest bearing loan 
 payable 1                            (28,970)                  -                  -            (28,970) 
Interest on loan payable 
 1                                           -            (1,449)                  -             (1,449) 
Interest bearing loan 
 payable 2                            (13,000)                  -                  -            (13,000) 
Interest on interest bearing 
 loan payable 2                          (169)              (650)                  -               (819) 
Interest bearing loan 
 payable 3                                   -            (7,082)                  -             (7,082) 
Interest on loan payable 
 3                                           -              (263)                  -               (263) 
Interest bearing loan 
 payable 4                                   -            (8,386)                  -             (8,386) 
Interest on loan payable 
 4                                           -              (208)                  -               (208) 
Non interest bearing loan 
 1                                     (3,734)                  -              1,130             (2,604) 
Non interest bearing loan 
 2                                       (715)              (160)                  -               (875) 
 

Transactions with FS Debtco

For the period ended 30 June 2019:

 
                            Opening Balance           Increase          Repayment  Closing Balance 
                                    as at 1   in loan/Interest   of loan/Interest    as at 30 June 
                               January 2019            charged             repaid             2019 
                                    GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing loan 
 1                                   55,000                  -                  -           55,000 
Interest on loan 1                    4,769              1,364                  -            6,133 
Non interest bearing loan               140                  -                  -              140 
 

For the period ended 30 June 2018:

 
                            Opening Balance           Increase          Repayment  Closing Balance 
                                    as at 1   in loan/Interest   of loan/Interest         as at 30 
                               January 2018            charged             repaid        June 2018 
                                    GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing loan 
 1                                   55,000                  -                  -           55,000 
Interest on loan 1                    2,019              1,364                  -            3,383 
Non interest bearing loan                 -                140                  -              140 
 

For the year ended 31 December 2018:

 
                            Opening Balance           Increase          Repayment  Closing Balance 
                                    as at 1   in loan/Interest   of loan/Interest         as at 31 
                               January 2018            charged             repaid    December 2018 
                                    GBP'000            GBP'000            GBP'000          GBP'000 
     Interest bearing loan 
                         1           55,000                  -                  -           55,000 
        Interest on loan 1            2,019              2,750                  -            4,769 
 Non interest bearing loan                -                140                  -              140 
 

Transactions with FS Holdco 3

For the period ended 30 June 2019:

 
                              Opening Balance           Increase          Repayment  Closing Balance 
                                      as at 1   in loan/Interest   of loan/Interest         as at 30 
                                 January 2019            charged             repaid        June 2019 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                                36,124                  -                  -           36,124 
Interest on investment 
 loan 1                                     -                450              (450)                - 
Non interest bearing loan 
 payable                                  317              3,259              (981)            2,595 
 

For the period ended 30 June 2018:

 
                                                                                     Closing Balance 
                              Opening Balance           Increase          Repayment            as at 
                                      as at 1   in loan/Interest   of loan/Interest      31 December 
                                 January 2018            charged             repaid             2018 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                                     -             36,124                  -           36,124 
Interest on investment 
 loan 1                                     -                144              (500)            (356) 
 

For the period year 31 December 2018:

 
                              Opening Balance           Increase          Repayment     Closing Balance 
                                      as at 1   in loan/Interest   of loan/Interest   as at 31 December 
                                 January 2018            charged             repaid                2018 
                                      GBP'000            GBP'000            GBP'000             GBP'000 
Interest bearing Investment 
 loan 1                                     -             36,124                  -              36,124 
Interest on investment 
 loan 1                                     -              1,267            (1,267)                   - 
Non interest bearing loan 
 payable                                    -                317                  -                 317 
 

Transactions with FS Holdco 4

For the period ended 30 June 2019:

 
                              Opening Balance           Increase          Repayment     Closing Balance 
                                      as at 1   in loan/Interest   of loan/Interest   as at 31 December 
                                 January 2019            charged             repaid                2019 
                                      GBP'000            GBP'000            GBP'000             GBP'000 
Interest bearing Investment 
 loan 1                                28,970                  -                  -              28,970 
Interest on investment 
 loan 1                                 1,449                718                  -               2,167 
Interest bearing Investment 
 loan 2                                12,482                  -                  -              12,482 
Interest on investment 
 loan 2                                   786                310                  -               1,096 
Interest bearing Investment 
 loan 3                                10,380                  -                  -              10,380 
Interest on investment 
 loan 3                                   385                258                  -                 643 
Interest bearing Investment 
 loan 4                                 8,386                  -                  -               8,386 
Interest on investment 
 loan 4                                   208                208                  -                 416 
Interest bearing Investment 
 loan 5                                 3,141                  -                  -               3,141 
Interest on investment 
 loan 5                                   107                 78                  -                 185 
Non interest bearing loan                 353                788                  -               1,141 
 

For the period ended 30 June 2018:

 
                              Opening Balance           Increase          Repayment  Closing Balance 
                                      as at 1   in loan/Interest   of loan/Interest    as at 30 June 
                                 January 2018            charged             repaid             2018 
                                      GBP'000            GBP'000            GBP'000          GBP'000 
Interest bearing Investment 
 loan 1                                28,970                  -                  -           28,970 
Interest on investment 
 loan 1                                     -                718                  -              718 
Interest bearing Investment 
 loan 2                                12,482                  -                  -           12,482 
Interest on investment 
 loan 2                                   162                310                  -              472 
Interest bearing Investment 
 loan 3                                     -             10,380                  -           10,380 
Interest on investment 
 loan 3                                     -                124                  -              124 
Interest bearing Investment 
 loan 5                                     -              3,141                  -            3,141 
Interest on investment 
 loan 5                                     -                  -                  -                - 
Non interest bearing loan                   -                353                  -              353 
 

For the year ended 31 December 2018:

 
                              Opening Balance           Increase          Repayment     Closing Balance 
                                      as at 1   in loan/Interest   of loan/Interest   as at 31 December 
                                 January 2018            charged             repaid                2018 
                                      GBP'000            GBP'000            GBP'000             GBP'000 
Interest bearing Investment 
 loan 1                                28,970                  -                  -              28,970 
Interest on investment 
 loan 1                                     -              1,449                  -               1,449 
Interest bearing Investment 
 loan 2                                12,482                  -                  -              12,482 
Interest on investment 
 loan 2                                   162                624                  -                 786 
Interest bearing Investment 
 loan 3                                     -             10,380                  -              10,380 
Interest on investment 
 loan 3                                     -                385                  -                 385 
Interest bearing Investment 
 loan 4                                     -              8,386                  -               8,386 
Interest on investment 
 loan 4                                     -                208                  -                 208 
Interest bearing Investment 
 loan 5                                     -              3,141                  -               3,141 
Interest on investment 
 loan 5                                     -                107                  -                 107 
Non interest bearing loan                   -                353                  -                 353 
 

Transactions between FS Holdco, FS Debtco, FS Holdco 3, FS Holdco 4 and their SPVs

All of the SPVs are cash generating solar farms (except for the non-operational Australian investments). On occasion revenues received and expenses are paid on their behalf by FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4. All of these transactions are related party transactions.

For the period ended 30 June 2019:

 
                           Opening Balance 
                               receivable/  Amounts paid                        Net amount 
                                 (payable)     on behalf  Amounts received      (payable)/ 
                                     as at            of              from      receivable 
                                 1 January           SPV               SPV   as at 30 June 
                                      2019          2019              2019            2019 
                                   GBP'000       GBP'000           GBP'000         GBP'000 
FS Holdco and its SPVs            (15,594)        11,225           (8,888)        (13,257) 
FS Holdco 2 and its SPVs           (2,689)         1,819             (689)         (1,559) 
FS Debtco and its SPVs             (2,763)         4,799           (3,353)         (1,317) 
 

For the period ended 30 June 2018:

 
                           Opening Balance 
                               receivable/  Amounts paid                        Net amount 
                                 (payable)     on behalf  Amounts received      (payable)/ 
                                     as at            of              from      receivable 
                                 1 January           SPV               SPV   as at 30 June 
                                      2018          2018              2018            2018 
                                   GBP'000       GBP'000           GBP'000         GBP'000 
FS Holdco and its SPVs            (11,437)        15,154          (13,749)        (10,032) 
FS Holdco 2 and its SPVs                 -         3,054             (621)           2,433 
FS Debtco and its SPVs             (6,968)         7,885           (1,697)           (780) 
 

For the year ended 31 December 2018:

 
                           Opening Balance 
                               receivable/  Amounts paid                            Net amount 
                                 (payable)     on behalf  Amounts received          (payable)/ 
                                     as at            of              from          receivable 
                                 1 January           SPV               SPV   as at 31 December 
                                      2018          2018              2018                2018 
                                   GBP'000       GBP'000           GBP'000             GBP'000 
FS Holdco and its SPVs            (11,437)        33,009          (37,166)            (15,594) 
FS Holdco 2 and its SPVs                 -         1,501           (4,190)             (2,689) 
FS Debtco and its SPVs             (6,968)        12,231           (8,026)             (2,763) 
 

Transactions with the manager

Foresight Group LLP, a related party of Foresight Group CI, charged asset management fees to the underlying projects of GBP792,182 during the period (1 January 2018 to 30 June 2018: GBP304,000, 1 January 2018 to 31 December 2018: GBP1,002,002).

   24.     Commitments and contingent liabilities 

There are no commitments nor contingent liabilities.

   25.     Controlling party 

In the opinion of the Directors, there is no controlling party as no one party has the ability to direct the financial and operating policies of the Company with a view to gaining economic benefits from its direction.

   26.     Post balance sheet events 

Post period end, on 2 August 2019, the Investment Manager successfully completed the refinancing of 28 of its UK assets (321MW) under FS Holdco 2, an indirect subsidiary of the Company.

AIFMD Disclosures (unaudited)

Alternative Investments Fund Manager Directive Report

In accordance with the Alternative Investments Fund Manager Directive Report (the "Directive"), the Company is required in its capacity as the Alternative Investment Fund Manager ("AIFM") and the Alternative Investment Fund ("AIF") to disclose specific information in relation to the following aspects of the Company's management:

OVERVIEW OF INVESTMENT ACTIVITIES

The Company's investment activities during the year is disclosed in full in the Investment Manager's Report on page 20 of the Annual Report.

The Company's portfolio's performance during the year is disclosed in full in the Asset Manager's Report on page 36 of the Annual Report.

A list of the Company's portfolio holdings is included on page 16 of the Annual Report.

LEVERAGE AND BORROWING

Leverage is defined as any method by which the Company increases its exposure through debt, borrowed capital or the use of derivatives.

The Company and its subsidiaries' leverage position and third-party debt arrangements are disclosed in full in the Investment Manager's Report on page 20 of the Annual Report.

'Exposure' is defined in two ways - 'Gross method' and 'Commitment method' - and the Company must not exceed maximum exposures under both methods.

The Directors are required to calculate and monitor the level of leverage of the Company, expressed as a ratio between the exposure of the Company and its Net Asset Value (Exposure/NAV), under both the Gross method and the Commitment method.

'Gross method' exposure is calculated as the sum of all positions of the Company (both positive and negative), that is, all eligible assets, liabilities and derivatives, including derivatives held for risk reduction purposes.

'Commitment method' exposure is also calculated as the sum of all positions of the Company (both positive and negative), but after netting off derivative and security positions as specified by the Directive.

For the "Gross method", the following has been excluded:

- the value of any cash and cash equivalents which are highly liquid investments held in the local currency of the Company that are readily convertible to a known amount of cash, subject to an insignificant risk of changes in value and which provide a return no greater than the rate of the 3-month high quality government bond;

- cash borrowings that remain in cash or cash equivalents as defined above and where the amounts of that payable are known.

The total amount of leverage calculated as at 30 June 2019 is as follows:

Gross method: 24%

Commitment method: 30%

LIQUIDITY

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due as a result of the maturity of assets and liabilities not matching. An unmatched position potentially enhances profitability but can also increase the risk of losses. Liquidity could be impaired by an inability to access secured and/or unsecured sources of financing to meet financial commitments. The Board monitors the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.

The financial position of the Company, its cash flows, liquidity position and borrowing facilities are referred to in the Chairman's Statement, Strategic Report and Notes to the Accounts. In addition, the financial statements include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.

The Company has sufficient financial resources together with investments and income generated. As a consequence, the Directors believe that the Company is able to manage its business risks.

RISK MANAGEMENT POLICY NOTE

Please refer to Principal Risks report on page 43 of the Annual Report.

REMUNERATION

As an AIFM, the Company is subject to a remuneration code which is consistent with the requirements of the FCA that apply to the AIFM. The remuneration policy is designed to ensure that any relevant conflicts of interest can be managed appropriately at all times and that the remuneration of the Directors and senior management is in line with the risk policies and objectives of the funds managed by the AIFM.

The Company does not directly employ any staff members. The Investment Management services in this regard are provided by staff members of Foresight Group LLPCI Limited with the support of staff members of Foresight Group LLP.

In accordance with the AIFMD, information in relation to the remuneration of the Company's AIFM is required to be made available to investors. In accordance with the Directive, the AIFM's remuneration policy and the numerical remuneration disclosures in respect of the AIFM's relevant reporting period (year ending December 20178) are available from the AIFM on request.

Advisors

ADMINISTRATOR & COMPANY SECRETARY

JTC (Jersey) Limited

JTC House

28 Esplanade

St. Helier Jersey

JE4 2QP

REGISTRAR

Computershare Investor Services (Jersey)

Queensway House

Hilgrove Street

St. Helier Jersey

JE1 1ES

CORPORATE BROKER

Stifel Nicolaus Europe Limited (formerly Oriel Securities)

150 Cheapside

London

EC2V 6ET

INVESTMENT MANAGER

Foresight Group CI Limited

PO Box 156

Dorey Court

St. Peter Port

Guernsey

GY1 4EU

LEGAL ADVISORS TO THE COMPANY AS TO ENGLISH LAW

Dickson Minto W.S.

Broadgate Tower

20 Primrose Street

London

EC2A 2EW

LEGAL ADVISORS TO THE COMPANY AS TO JERSEY LAW

Ogier

Ogier House

The Esplanade

St. Helier

Jersey

JE4 9WG

LEGAL ADVISORS TO THE COMPANY AS TO THE ACQUISITION OF SOLAR ASSETS

Osborne Clarke

One London Wall

London

EC2Y 5EB

INDEPENDENT AUDITOR

KPMG LLP

15 Canada Square

London

E14 5GL

Glossary of Terms

 
AEMO                       Australian Energy Market Operator 
AIC                        The Association of Investment Companies 
AIC Code                   The Association of Investment Companies Code of Corporate 
                            Governance 
AIC Guide                  The Association of Investment Companies Corporate 
                            Governance Guide for Investment Companies 
AIFs                       Alternative Investment Funds 
AIFMs                      Alternative Investment Fund Managers 
AIFMD                      The Alternative Investment Fund Management Directive 
Asset Manager              The Company's underlying investments have appointed 
                            Foresight Group LLP, a subsidiary of Foresight Group 
                            CI, to act as Asset Manager 
BSUoS                      Balancing Services Use of System 
BBSY                       Bank Bill Swap Bid Rate 
Company                    Foresight Solar Fund Limited 
CEFC                       The Clean Energy Finance Corporation 
DCF                        Discounted Cash Flow 
DNO                        Distribution Network Operator 
EEA                        European Economic Area 
EPC                        Engineering, Procurement & Construction 
ESG                        Environmental, Social and Governance 
EUA                        European Emission Allowances 
FiT                        Feed-in Tariff. The Feed-in-Tariff scheme is the 
                            financial mechanism introduced on 1 April 2010 by 
                            which the UK Government incentivises the deployment 
                            of renewable and low-carbon electricity generation 
                            of up to 5MW of installed capacity. 
GAV                        Gross Asset Value on Investment Basis including debt 
                            held at SPV level 
GFSC                       Guernsey Financial Services Commission 
Group Borrowing            Group Borrowing refers to all third-party debt by 
                            the Company and its subsidiaries. 
GRESB                      Global Real Estate Sustainability Benchmark 
GWh                        Gigawatt hour 
Hibernacula                A shelter occupied during the winter by a dormant 
                            animal 
IAS                        International Accounting Standard 
IFRS                       International Financial Reporting Standards as adopted 
                            by the EU 
Investment Manager         Foresight Group CI Limited 
IPEV Valuation Guidelines  International Private Equity and Venture Capital 
                            Valuation Guidelines 
IPO                        Initial Public Offering 
KID                        Key Information Document 
KPMG LLP                   KPMG is the Company's Auditor 
LGC                        Large-Scale Generation Certificate 
LIBOR                      London Interbank Offered Rate 
Listing Rules              The set of FCA rules which must be followed by all 
                            companies listed in the UK 
LRET                       Large-Scale Renewable Energy Target. The LRET creates 
                            a financial incentive in Australia for the establishment 
                            and growth of renewable energy power stations, such 
                            as wind and solar farms, or hydroelectric power stations 
Main Market                The main securities market of the London Stock Exchange 
MIDIS                      Macquarie Infrastructure Debt Investment Solutions 
MLF                        Marginal Loss Factor 
MUFG                       Bank of Tokyo-Mitsubishi UFJ 
MWh                        Megawatt hour 
NAV                        Net Asset Value 
NEG                        National Energy Guarantee 
OBR                        Office for Budget Responsibility 
Official List              The Premium Segment of the UK Listing Authority's 
                            Official List 
Ofgem                      Office of Gas and Electricity Markets (UK Government 
                            regulator) 
O&M                        Operation and Maintenance contractors 
PPA                        Power Purchase Agreements 
PR                         Performance Ratio 
PRI                        Principles for Responsible Investment 
PRIIPS                     Packaged Retail and Insurance-Based Investment Products 
PV                         Photovoltaic 
RET                        Renewable Energy Target 
RO Scheme                  The financial mechanism by which the UK Government 
                            incentivises the deployment of large-scale renewable 
                            electricity generation by placing a mandatory requirement 
                            on licensed UK electricity suppliers to source a 
                            specified and annually increasing proportion of electricity 
                            they supply to customers from eligible renewable 
                            sources or pay a penalty. 
ROC                        Renewable Obligation Certificates 
RPI                        The Retail Price Index 
SCR                        Significant Code Review 
SDG                        United Nations Sustainable Development Goal 
SPV                        The Special Purpose Vehicles which hold the Company's 
                            investment portfolio of underlying operating assets 
TCR                        Targeted Charging Review 
UK                         The United Kingdom of Great Britain and Northern 
                            Ireland 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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