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Greencoat Renewables PLC Final Results Announcement

04/03/2019 7:00am

UK Regulatory (RNS & others)


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Greencoat Renewables PLC

04 March 2019

Greencoat Renewables announces full year results 2018

   ISE: GRP     LSE:GRP 

Dublin, London | 4 March 2019: Greencoat Renewables PLC ("Greencoat Renewables" or the "Company"), the renewable infrastructure company invested in euro-denominated assets, today announces its results for the year ended 31 December 2018.

Separate to this set of results, the Company has also today announced its intention to issue further new ordinary shares as part of the share issuance programme announced in July 2018.

2018 Highlights

-- Acquisition of ten wind generation assets during 2018, increasing the portfolio to twelve wind farms in total, and increasing net generating capacity from 137MW to 384MW (EUR883.5 million of GAV as at 31 December 2018)

   --    NAV at year-end of EUR392.8 million. NAV per share increased from 96.6 cent to 103.4 cent 

-- Assets generated 440.5GWh of electricity in 2018; 9% below budget primarily due to low wind speeds; Asset availability was on budget

Strong Cashflow; Consistent Returns

   --     Net cash generation of EUR23.1 million(1) 
   --     Dividend cover for 2018 of 1.3x(1) 
   --     2018 total dividend per share of 6 cent 

-- Consistent with progressive dividend policy, dividend per share of 6.03 cent targeted for 2019

Capital Structure

   --    Issued 110 million shares during 2018 in an oversubscribed placing at EUR1.01 per share 

-- Increased revolving credit facility to EUR380 million with a syndicate of five domestic and international banks

-- EUR490.7 million outstanding borrowings as at 31 December 2018, equivalent to 56% of GAV (2018 average gearing of 30%)

1. Net cash generation and dividend cover includes EUR3.2m of REFIT revenue accrued in November that was received post Dec 31 2018 in early January 2019

Ronan Murphy, Non-Executive Chairman of Greencoat Renewables, said:

"We are delighted to present our first set of results for a full year following Greencoat Renewable's listing in July of 2017. The past 12 months have been transformational for the Company, delivering on all of our strategic goals and diversifying the portfolio, whilst continuing to achieve operational excellence.

The secondary market for wind assets in Ireland has been very active with a number of value accretive opportunities sought and executed, growing our asset base from 2 to 12 wind farms and our capacity from 137MW to 384MW. We continue to see a significant aggregation opportunity for the business.

We have also increased our target 2019 dividend to 6.03 cent consistent with our commitment to a progressive dividend policy."

Key Metrics at 31 December 2018

 
 Market capitalisation                           EUR391.4 million 
 Share price                                           103.0 cent 
 Dividends with respect to the year               EUR17.9 million 
 Dividends with respect to the year per share           6.00 cent 
 GAV                                             EUR883.5 million 
 NAV                                             EUR392.8 million 
 NAV per share                                         103.4 cent 
  Shares in issue at year-end                         380 million 
 

Details of the conference call for analysts and investors:

A conference call for analysts and investors will be held at 10.00 am GMT today, 4 March 2019. To register for the call please contact FTI Consulting, either by email Greencoat@fticonsulting.com or by telephone on +353 1 765 0883.

Presentation materials will be posted on the Company's website, www.greencoat-renewables.com from 7.00 am.

2018 Annual Report

A copy of the 2018 Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The annual report will also shortly be available on the Company's website at www.greencoat-renewables.com where further information on the Company can also be found.

---S ---

For further details contact:

 
Greencoat Capital LLP (Investment Manager) 
Bertrand Gautier 
 Paul O' Donnell 
 Tom Rayner                                                                +44 20 7832 9400 
 
 
 
  FTI Consulting (Investor Relations & Media) 
Jonathan Neilan                                                            +353 1 765 0883 
Melanie Farrell                                                            greencoat@fticonsulting.com 
 
  Davy Corporate Finance (Broker, NOMAD and Euronext Growth Advisor) 
  Fergal Meegan 
  Barry Murphy 
  Ronan Veale                                                              +353 1 679 6363 
 
  RBC Capital Markets (Joint Broker) 
  Matthew Coakes 
  Jonathan Hardy                                                           +44 20 7653 4000 
 

About Greencoat Renewables PLC

Greencoat Renewables PLC is an investor in euro denominated renewable energy infrastructure assets and is focused on the acquisition and management of operating wind farms in Ireland. It is managed by Greencoat Capital LLP, an experienced investment manager in the listed renewable energy infrastructure sector.

At a Glance

Summary

Greencoat Renewables PLC is a sector-focused listed renewable infrastructure company, investing in renewable electricity generation assets, with an initial focus on wind assets in Ireland. The Company's aim is to provide investors with an annual dividend that increases progressively whilst growing the capital value of its investment portfolio in the long term through reinvestment of excess cash flow and the prudent use of portfolio leverage.

Highlights

-- The Group's investments generated 440.5GWh of electricity, 9 per cent. below budget owing to low wind resource.

   --   Net cash generation (Group and wind farm SPVs) was EUR23.1 million. 

-- Acquisition of 7 new wind farms in addition to interests in 3 wind farms acquired from Coillte increased the portfolio to 12 wind farm investments, net generating capacity to 384MW and GAV to EUR883.5 million as at 31 December 2018.

   --   Issuance of 110 million ordinary shares in an oversubscribed placing at EUR1.01 per share. 
   --   NAV growth of 7.9 cent per share (adjusting for dividends). 

-- The Company has declared total dividends of 6 cent per share with respect to the year and is targeting a dividend of 6.03 cent per share for 2019.

   --   EUR490.7 million Aggregate Group Debt at 31 December 2018, equivalent to 56 per cent. of GAV. 

Key Metrics

 
                                                        As at 31 December 2018   As at 31 December 2017 
-----------------------------------------------------  -----------------------  ----------------------- 
 
 Market capitalisation                                        EUR391.4 million         EUR288.9 million 
 Share price                                                        103.0 cent               107.0 cent 
 Dividends with respect to the year/period                     EUR19.5 million           EUR7.1 million 
 Dividends with respect to the year/period per share 
                                                                     6.00 cent                2.61 cent 
 GAV                                                          EUR883.5 million         EUR332.1 million 
 NAV                                                          EUR392.8 million         EUR260.9 million 
 NAV per share                                                      103.4 cent                96.6 cent 
-----------------------------------------------------  -----------------------  ----------------------- 
 

Defining Characteristics

Greencoat Renewables PLC was designed for investors from first principles to be simple, transparent and low risk.

   1.   The Group is initially focused on investing solely in operating Irish wind assets. 
   2.   Wind is the most mature and largest scale renewable technology. 

3. Ireland has a long-established regulatory regime, high wind resource and in excess of EUR8 billion of wind farms expected to be in operation in the short to medium term.

4. The Group is wholly independent and thus avoids conflicts of interests in its investment decisions.

5. The Irish-based, independent Board governs the Group, actively monitors the efficient operation of the assets and works in conjunction with an experienced investment management team.

6. The Group generally invests in wind farms that have an appropriate operational track record (or price adjustment mechanism).

7. Low leverage is important to ensure a high level of cash flow stability and higher tolerance to downside sensitivities.

   8.   The Group invests only in euro assets and thus does not incur material currency risk. 

Chairman's Statement

I am very pleased to deliver the second annual report for Greencoat Renewables PLC, covering the year ended 31 December 2018. This past year has been one of significant growth for the Company, with a substantial increase in the portfolio and deepening of our position in the Irish onshore wind market. The strong performance against our goals, in combination with the ongoing support from shareholders, has positioned the Company very well to continue to deliver expected returns to investors.

Performance

The portfolio generated 440.5GWh in the year, which was 9 per cent. below budget, due to lower wind speeds during the summer period, with operational availability in line with budget. There were no material unplanned outages or issues affecting any of the assets in the year. As a result, the portfolio generated operating cashflow of EUR23.1 million and dividend cover was 1.3x.

Dividends and Returns

Declared dividends for the year total 6 cent per share, with the final quarterly dividend of 1.5 cent per share paid on 28 February 2019.

With our continued strong cashflow and robust dividend cover, we have decided to increase the dividend for 2019 to a target of 6.03 cent per share. Given that the CPI increase in Ireland for 2018 was 0.7%, the increase of 0.03 cent per share is in line with the previously communicated strategy to grow the dividend on a progressive basis.

NAV per share increased in the year from 96.6 cent per share on 31 December 2017 to 103.4 cent per share on 31 December 2018, an increase of 6.8 cent (7.0 per cent.) during the year.

At the end of 2018, we commissioned a report from a leading technical consultancy firm to advise us on the expected life of our assets. Given their findings and also given that the substantial majority of wind farms in our portfolio have access to land leases beyond 25 years, we have increased our asset life assumption from 25 to 30 years, having made appropriate assumptions in relation to continued good management of the assets, operating costs and other factors.

Acquisitions and Equity Raising

2018 was an active year in the Irish secondary wind market with a number of value accretive opportunities arising. In aggregate, the Group acquired 10 new wind farms through 7 transactions and from 8 different vendors. As a result, we have invested EUR518m increasing our net generating capacity from 137MW to 384MW.

We continued to execute on our strategy to acquire both small and larger assets, with the net generating capacity of individual acquisitions varying from 9.2MW up to 54MW. Of particular note was the acquisition of the majority of Coillte's shareholdings in its portfolio of 3 operating wind generation assets. The 87.6MW portfolio was co-developed with SSE, ESB and Bord Na Mona, who will remain as joint venture partners.

We are pleased to have been able to acquire from such a wide range of vendors. This underpins our ability to acquire and consolidate assets in the secondary wind market where we continue to see opportunity for further value accretive investments.

The profile of new investments in 2018 continued the focus on long term contracted revenues with the overall average portfolio age now at 3 years old. The portfolio now benefits from more than 11 years of secured pricing contracted under the REFIT regime.

In August, the Company issued 110 million new shares in line with its continuing growth strategy, raising gross proceeds of EUR111 million in an oversubscribed and NAV-accretive share placing. This was the first tranche of the Company's shareholder-approved programme to issue 250 million new shares. The Board was pleased with investor appetite for this placing, and with the ongoing support from our shareholders.

Gearing

During the year, average gearing was 30 per cent. of GAV, which was below our target of 40 per cent., albeit the lower gearing allowed the Group to scale the business and take advantage of the acquisition opportunities. Given the anticipated growth of the Company, we would expect average gearing for future years to be much closer to the 40 per cent. target.

The total gearing at year end was EUR490.7 million, 55.5 per cent. of GAV. In November 2018, the Group increased the size of its revolving credit facility to EUR380 million to facilitate acquisition dealflow at the end of the year. The EUR490.7 million gearing includes EUR128.7 million of long-term project finance debt that was retained within Cloosh Valley, Raheenleagh and Sliabh Bawn when acquired from Coillte and Bord na Mona.

Outlook

The Irish wind market remains very attractive with a stable and supportive regulatory regime. Irish wind farms benefit from up to 15 years of inflation-linked floor prices under the REFIT regime, while allowing wind farms to capture prices above the floor. Wind remains the dominant renewable technology and the Group is in an excellent position to benefit as wind becomes an increasing proportion of Ireland's generation mix.

Furthermore, the announcement of RESS, a successor scheme to REFIT, has underpinned the further growth opportunity in the Irish renewables market from 2020 onwards. It is expected that over 13,500GWh per annum of additional renewables (which would represent a doubling of the Irish market) will be auctioned between 2020 and 2026. In addition, Ireland is experiencing a substantial growth in the demand for electricity, particularly from the development of a substantial number of data centres. We expect to see a growing number of large corporate entities seeking to enter into long term PPA arrangements to meet their energy needs.

The Group's investment activity in the year has played a key role in positioning itself as a major player in Irish renewables market. The Company continues to benefit from the unique relationships and local expertise of the Investment Manager in terms of acquiring further assets. We continue to see a large number of attractive secondary market opportunities and are maintaining focus on only the most value accretive.

In line with the investment policy, the Group will have the ability to consider investment opportunities in other EU jurisdictions from July 2019. Such prospective investment opportunities would be limited to countries with robust renewable energy policy frameworks such as Belgium, France, Germany, Finland, and the Netherlands.

The Board is supportive of value-accretive growth through further renewable energy infrastructure investments, and such acquisitions will be in the shareholders' interest as they:

   --           Provide additional economies of scale at Group level; 
   --           Increase market power with service providers and asset sellers; and 
   --           Increase liquidity in our shares. 

The Board remains confident in the Company's outlook for the future, and in the disciplined approach of the Investment Manager towards possible future acquisitions and the continued careful management of the existing portfolio.

Board and Governance

The Board intends to appoint an additional non-executive Director to enhance the skill and experience base of the existing Board. The search is now underway, and we are hoping to announce the appointment of a new non-executive Director in 2019.

Annual General Meeting

Our AGM will take place on 25 April 2019 at 2:00 pm at the offices of J&E Davy, Davy House, 49 Dawson Street, Dublin 2, Ireland. Details of the formal business of the meeting are set out in the notice of AGM, which is sent to shareholders with the Annual Report. We look forward to meeting shareholders on that occasion.

Conclusion

In conclusion, I am very pleased with the progress that the Company has achieved in 2018. I would like to thank my fellow Directors, Emer Gilvarry and Kevin McNamara, for their continued stewardship and advice during the year. Finally, I would like to acknowledge the substantial role of the Investment Manager, which contributed significantly to all of our successes in 2018.

Rónán Murphy

Chairman

3 March 2019

Investment Manager's Report

The Investment Manager

The Investment Manager's experience covers wind farm investment, ownership, finance and operation. All the skills and experience required to manage the Group's investments lie within a single investment manager. The Investment Manager is authorised and regulated by the Financial Conduct Authority and is a full scope UK AIFM.

The team is led by Bertrand Gautier and Paul O'Donnell.

Bertrand has over 26 years of operational, financial and investment experience, of which the last 9 years have been focussed solely on renewables. He has been a Partner of Greencoat Capital since joining in 2010, and specialises in investments across the renewable energy space.

Bertrand joined from Terra Firma Capital Partners where he managed a variety of LBO and re-financing transactions and oversaw the management of portfolio businesses, focusing on asset-backed companies. Before joining Terra Firma in 2007, Bertrand spent 5 years at Merrill Lynch as part of the M&A Advisory Group in the Infrastructure and Industrials team. Prior to that, he gained extensive operational experience over eight years at Procter & Gamble in supply chain and purchasing management, as well as in several French engineering SMEs.

Bertrand holds an MSc in General Engineering from ICAM (France) and an MBA from Harvard Business School (USA).

Paul has over 16 years of renewables and investment experience, of which the last 12 have been focussed solely on renewables. He joined Greencoat Capital in 2009 and has specialised in managing investments in the wind and solar generation sectors, working across development, operations, technology, and financing. In that time, Paul oversaw Airvolution Energy, a UK based wind developer, which has developed and constructed over 60MW of wind assets as well as Lumicity, a UK solar developer which developed over 60MW of solar assets.

Paul has been a Partner of Greencoat Capital since 2016, and has been based in Dublin since 2013.

Paul holds a BBS (Hons) in Finance from Trinity College Dublin.

Overview

The Investment Manager is very pleased with the milestones achieved in 2018 which have significantly transformed the business. In the past 12 months, Greencoat Renewables has demonstrated the strength of all aspects of its business model through acquiring value accretive assets in the secondary market, ensuring the portfolio performed to target availability, raising further equity in an oversubscribed issuance, and increasing its available debt financing.

The addition of 247MW of high-quality generating capacity to our 137MW seed portfolio has diversified and brought economies of scale to the business, continued to deliver strong cashflows, and demonstrated the resilience of the dividend cover, even in a low wind year with below average gearing.

Investment Portfolio

The Group's investment portfolio as at 31 December 2018 consisted of interests in SPVs which held the following underlying operating wind farms:

 
 
 Wind Farms       Turbines    Operator         PPA               Total   Ownership   Net MW 
                                                                    MW       Stake 
---------------  ----------  ---------------  ----------------  ------  ----------  ------- 
 Ballybane        Enercon     MOS Group        Energia            48.3        100%     48.3 
 Cloosh Valley    Siemens     SSE              SSE               108.0         50%     54.0 
 Garranereagh     Enercon     Statkraft        Bord Gáis      9.2        100%      9.2 
 Glanaruddery 
  (1)             Vestas      EnergyPro        Supplier Lite      36.3        100%     36.3 
 Killhills        Enercon     SSE              Brookfield         36.8        100%     36.8 
 Knockacummer     Nordex      SSE              Brookfield        100.0        100%    100.0 
                                               Naturgy / 
 Knocknalour      Enercon     Wind Prospect     Energia            9.2        100%      9.2 
 Lisdowney        Enercon     EnergyPro        Naturgy             9.2        100%      9.2 
 Monaincha        Nordex      Statkraft        Bord Gáis     36.0        100%     36.0 
 Raheenleagh      Siemens     ESB              ESB                35.2         50%     17.6 
 Sliabh Bawn      Siemens     Wind Prospect    Supplier Lite      64.0         25%     16.0 
 Tullynamoyle 
  II              Enercon     Cabragh          Bord Gáis     11.5        100%     11.5 
---------------  ----------  ---------------  ----------------  ------  ----------  ------- 
 Total                                                                                384.1 
--------------------------------------------------------------  ------  ----------  ------- 
 

(1) Dromadda More has been renamed Glanaruddery.

Portfolio Performance

The portfolio generated 440.5GWh in the year, 9 per cent. below budget, due to lower wind speeds during the summer period, with portfolio availability in line with budget.

The following table provides a breakdown of generation by wind farm:

 
 Wind Farm (1)                             Period      2018            2018   Variance 
                      Ownership Stake                Budget    Actual (GWh) 
                                                      (GWh) 
 Ballybane                       100%   Nov - Dec      24.7            27.0         9% 
 Glanaruddery                    100%   May - Dec      67.9            56.2       -17% 
 Lisdowney                       100%   Mar - Dec      25.0            22.5       -10% 
 Killhills                       100%   Jan - Dec      88.5            85.7        -3% 
 Knockacummer                    100%   Jan - Dec     253.9           231.3       - 9% 
 Knocknalour                     100%   Oct - Dec       6.3             5.4       -14% 
 Tullynamoyle II                 100%   Apr - Dec      16.6            12.4       -25% 
-----------------  ------------------  ----------  --------  --------------  --------- 
 Total (2)                                            482.9           440.5        -9% 
-----------------  ------------------  ----------  --------  --------------  --------- 
 

(1) Acquisitions of Garranereagh and Monaincha, as well as interests in Cloosh Valley, Raheenleagh, and Sliabh Bawn did not complete until late December 2018 so their performance is not included for 2018.

(2) Numbers do not cast by 0.1GWh due to rounding.

Knockacummer was successfully transferred to its permanent 110kV transmission connection in October 2018. In total, the grid upgrade works resulted in the wind farm being offline for 28 days in 2018.

Separately, Glanaruddery was offline for 10 days caused by a fault with the substation transformers, that required testing and repair works to be carried out.

The I-SEM market went live on 1 October 2018 as anticipated. The portfolio's wind farms entered into contracts with either the incumbent PPA offtakers or third parties to fix the I-SEM balancing costs in line with expectation. As a result, the portfolio's revenues are insulated from the potential volatility of I-SEM balancing costs.

Health and Safety

There were no major incidents in the year to 31 December 2018. A health and safety audit was conducted across 2 sites by an independent consultant. No material areas of concern were identified.

Acquisitions

2018 was a busy year in the Irish secondary wind sector and the opportunity for aggregation is clearly evidenced. We continued to see many opportunities for value-accretive acquisitions, and priced and assessed 32 different wind farms during the year.

We were delighted to be successful in acquiring 10 new wind farms during the year in 7 separate transactions. In line with our expectations we were able to find value at both ends of the market, transacting with international and large scale developers as well as smaller scale local vendors.

Of specific note, was the acquisition of a majority of Coillte's shareholdings in 3 operating wind farms with net generation capacity of 79.6MW. The Coillte portfolio was co-developed with Bord Na Mona, ESB, and SSE who remain joint venture partners in the assets, and we look forward to further developing our relationship with them.

The following table lists investments in the year (including acquisition costs, and excluding acquired cash):

 
                              EURm 
 Lisdowney                    22.9 
                       ----------- 
 Tullynamoyle II              18.5 
                       ----------- 
 Glanaruddery                 83.4 
                       ----------- 
 Knocknalour                  11.2 
                       ----------- 
 Ballybane                    61.9 
                       ----------- 
 Monaincha 
  Garranereagh                85.9 
                       ----------- 
 Cloosh Valley (50%) 
  Raheenleagh (50%) 
  Sliabh Bawn (25%)     234.1([1]) 
                       ----------- 
 Total                       517.9 
                       ----------- 
 

[1] The acquisition value of interests in these wind farms includes EUR128.7m of the Group's proportionate share of the project level debt.

Equity Issuance

In August, the Company issued 110 million new shares in line with its continuing growth strategy, raising gross proceeds of EUR111 million in an oversubscribed and NAV-accretive share placing. This was the first tranche of the Company's programme to issue 250 million new shares.

Gearing

As at 31 December 2018, the Group and wind farm SPVs had EUR490.7 million of outstanding debt, equating to 56 per cent. of GAV. This includes the Group's proportionate share of long-term project finance debt (including the fair value of associated interest rate swaps) that was retained within Cloosh Valley, Raheenleagh and Sliabh Bawn when acquired from Coillte and Bord Na Mona.

In November 2018, the Group increased the capacity of its revolving credit facility to EUR380 million from EUR250 million to fund the acquisitions executed towards the end of the year and was EUR362.0 million drawn at year end.

Financial Performance

Dividend cover for the year was 1.3x.

Cash balances (Group and wind farm SPVs) increased by EUR18.1 million from EUR23.2 million to EUR41.3 million over the year.

 
 
                                                    For the year ended 
 Group and wind farm SPV cashflows                    31 December 2018 
-------------------------------------------------  ------------------- 
                                                               EUR'000 
 
 Net cash generation (1)                                        23,142 
 
   Dividends paid                                             (20,847) 
 
 PSO working capital and other movements (2)                      (31) 
 
 Acquisitions (3)                                            (381,556) 
 
   Acquisition costs                                           (1,933) 
 
 Equity issuance                                               111,100 
 
   Equity issuance costs                                       (2,051) 
 
 Net drawdown under debt facilities                            290,861 
 
   Upfront finance costs                                         (612) 
 
 Movement in cash (Group and wind farm SPVs) (1)                18,073 
 Opening cash balance (Group and wind farm SPVs)                23,202 
-------------------------------------------------  ------------------- 
 Closing cash balance (Group and wind farm SPVs)                41,275 
 
 Net cash generation (1)                                        23,142 
 Dividends (4)                                                  17,850 
 Dividend cover                                                    1.3   x 
-------------------------------------------------  ------------------- 
 

(1) Net cash generation has been adjusted to include EUR3.2m of REFIT revenue accrued in November that was received later than contracted (i.e. after the year end).

(2) Cashflows reflect residual capital expenditure from acquired SPVs (covered by the vendor of the SPVs) plus REFIT working capital movements with the PSO relating to wind farm SPVs less EUR3.2m of REFIT revenue outstanding at year end.

(3) Acquisition consideration is net of the acquired cash.

(4) The February 2018 dividend has been adjusted for the dividend cover calculation as it related to a period longer than 3 months.

The following 2 tables provide further detail in relation to net cash generation of EUR23.1m million:

 
                                    For the year ended 
 Net Cash Generation - Breakdown      31 December 2018 
---------------------------------  ------------------- 
                                               EUR'000 
 
 Revenue (1)                                    38,956 
 Operating expenses                            (8,902) 
 VAT and Tax                                     (647) 
 Wind farm cashflow                             29,407 
 
 Management fee                                (2,766) 
 Operating expenses                            (1,095) 
 Ongoing finance costs                         (2,887) 
 VAT                                               484 
 Other                                             (1) 
---------------------------------  ------------------- 
 Group cashflow                                (6,265) 
 
 Net cash generation                            23,142 
---------------------------------  ------------------- 
 

(1) Cash revenue has been adjusted to include EUR3.2m of REFIT revenue that was received after the year end that relates to 2018.

 
                                                                                     For the year ended 
 Net Cash Generation - Reconciliation to Net Cash Flows from Operating Activities      31 December 2018 
----------------------------------------------------------------------------------  ------------------- 
                                                                                                EUR'000 
 
 Net cash flows from operating activities (1)                                                     3,298 
 Movement in cash balances of wind farm SPVs (2)                                                  (753) 
 Repayment of shareholder loan investment (1)                                                    22,624 
 Finance costs (1)                                                                              (3,499) 
 Upfront finance costs (cash) (3)                                                                 1,472 
----------------------------------------------------------------------------------  ------------------- 
 Net cash generation                                                                             23,142 
----------------------------------------------------------------------------------  ------------------- 
 

(1) Consolidated Statement of Cash Flows.

(2) EUR(753k) movement in cash balances of wind farm SPVs plus EUR864k other working capital at wind farm SPV level.

(3) EUR656k professional fees plus EUR140k facility arrangement fees (note 13 to the Financial Statements) plus EUR864k other upfront finance costs less EUR188k other finance costs payable (note 12 to the Financial Statements).

Investment Performance

NAV at 31 December 2018 was EUR392.8 million (103.4 cent per share):

   --    NAV at 31 December 2017 was EUR260.9 million (96.6 cent per share); 

-- EUR517.9 million of investments were made in the year (which includes the Group's proportionate share of project level debt of EUR128.7 million in Cloosh Valley, Raheenleagh and Sliabh Bawn) as further described under Acquisitions above;

   --    Cash balances (Group and wind farm SPVs) increased by EUR18.1 million as noted above; 

-- Net liabilities at Group and wind farm SPV level decreased by EUR15.6 million from a net asset position EUR0.4 million at 31 December 2017; and

-- Aggregate Group Debt increased by EUR419.5 million, which includes the Group's proportionate share of acquired project level debt (including associated interest rate swap fair values of EUR6.9 million) at Cloosh Valley, Raheenleagh and Sliabh Bawn.

Declared dividends with respect to the year total 6 cent per share, with the final quarterly dividend of 1.5 cent per share paid on 28 February 2019. The target dividend with respect to 2019 is 6.03 cent per share. The increase of 0.03c is in line with the stated investment objective to increase the dividend on a progressive basis. Given that the CPI increase in Ireland for 2018 was 0.7 per cent., it was decided to increase the dividend by half of CPI, representing 0.03c.

 
 
                                          cent per share   per cent. 
---------------------------------------  ---------------  ---------- 
 
 NAV at 31 December 2017                            96.6 
 Less February 2018 dividend                       (2.6) 
 NAV at 31 December 2017 (ex dividend)              94.0 
 
 NAV at 31 December 2018                           103.4 
 Less February 2019 dividend                       (1.5) 
 NAV at 31 December 2018 (ex dividend)             101.9 
 
 Movement in NAV (ex dividend)                       7.9         8.4 
 Dividends with respect to the year                  6.0         6.4 
---------------------------------------  ---------------  ---------- 
 Total return on NAV                                13.9        14.8 
---------------------------------------  ---------------  ---------- 
 

Reconciliation of Statutory Net Assets to Reported NAV

 
                                                                       As at               As at 
                                                            31 December 2018    31 December 2017 
--------------------------------------------------------  ------------------  ------------------ 
                                                                     EUR'000             EUR'000 
 
 DCF valuation                                                       852,940             306,095 
 Shareholder loan interest receivable                                  3,993               1,855 
 Other relevant (liabilities) / assets (wind farm SPVs)              (9,109)                 437 
 Cash (wind farm SPVs)                                                38,239               8,409 
--------------------------------------------------------  ------------------  ------------------ 
 Fair value of investments (1)                                       886,063             316,796 
 Cash (Group)                                                          3,036              14,794 
 Other relevant (liabilities) / assets                               (5,621)                 428 
--------------------------------------------------------  ------------------  ------------------ 
 GAV                                                                 883,478             332,018 
 Aggregate Group Debt (2)                                          (490,695)            (71,169) 
--------------------------------------------------------  ------------------  ------------------ 
 NAV                                                                 392,783             260,849 
 
 Reconciling items(3)                                                  1,171               1,237 
--------------------------------------------------------  ------------------  ------------------ 
 Statutory net assets                                                393,954             262,086 
 
 Shares in issue                                                 380,000,000         270,000,000 
 NAV per share (cent)                                                  103.4                96.6 
--------------------------------------------------------  ------------------  ------------------ 
 

(1) The fair value of investments are shown gross of EUR128.7 million debt and swap fair values held at wind farm SPV level that are not included in the equivalent figure in the Consolidated Statement of Financial Position.

(2) Aggregate Group debt reflects EUR362.0 million relating to amounts drawn under the Group's revolving credit facility, consistent with the consolidated Statement of Financial Position, and EUR128.7 million of debt and swap fair values held at wind farm SPV level.

(3) The other reconciling item reflects a deferred tax asset in Holdco (EUR1,237k) and other liabilities of the Group (EUR-66k).

NAV Sensitivities

NAV is equal to GAV less Aggregate Group Debt.

GAV is the sum of:

   --    DCF valuations of the Group's investments; 
   --    Cash (at Group and wind farm SPV level); and 
   --    Other relevant assets and liabilities of the Group and wind farm SPVs. 

The DCF valuation of the Group's investments represents the largest component of GAV and the key sensitivities are considered to be the discount rate used in the DCF valuation and long-term assumptions in relation to energy yield, power prices, inflation, and asset life.

For the year end DCF valuation, we have applied an upgraded discounting methodology. Previously, each wind farm's cashflows were discounted at a single discount rate, irrespective of their nature. We now apply different discount rates, tailored to the nature of the underlying cashflows; for example, one discount rate for fixed REFIT cashflows and a higher discount rate for merchant power cashflows.

In addition to (but separate from) the upgraded discounting methodology, we have increased the asset life assumption used in the year end DCF valuation to 30 years, following a third party technical assessment of the portfolio. The technical asset life for many wind farms exceeds 30 years. Furthermore, the vast majority of the wind farm SPVs benefit from lease arrangements that are significantly in excess of 30 years. We have made appropriate assumptions in relation to the continued good management of the assets, operating costs and other factors. We consider that the 30 year asset life assumption is a more appropriate assumption to be used to determine the fair value of the portfolio.

Amending the asset life and associated assumptions increased NAV per share by 6.0 cent. It also means that the blended portfolio discount rate has increased as a result of including a higher proportion of higher discount rate merchant power cashflows in years 26-30.

A variance of +/- 0.25 per cent. is considered to be a reasonable range of alternative assumptions for discount rate.

The base case long term CPI assumption is 2.00 per cent..

Base case energy yield assumptions are P50 (50 per cent. probability of exceedance over a 10 year period) forecasts produced by expert consultants based on long term wind data and operational history. The P90 (90 per cent. probability of exceedance over a 10 year period) and P10 (10 per cent. probability of exceedance over a 10 year period) sensitivities reflect the future variability of wind and the uncertainty associated with the long term data source being representative of the long term mean. Given their basis on long term operating data, it is not anticipated that base case energy yield assumptions will be adjusted (other than any wind energy true-ups with compensating purchase price adjustments).

Long term power price forecasts are provided by a leading market consultant, updated quarterly and adjusted by the Investment Manager where more conservative assumptions are considered appropriate. The independent forecasts are never adjusted upwards. Base case real power prices increase from approximately EUR59/MWh (2030) to approximately EUR67/MWh (2040). The sensitivity analysis below assumes a 10 per cent. increase or decrease in power prices relative to the base case for every year of the asset life, which is relatively extreme (a 10 per cent. variation in short term power prices, as reflected by the forward curve, would have a much lesser effect).

Corporate Social Responsibility and Community Benefit

There has been a focus within the Group to strengthen relationships with the local communities that the wind farms are located in. Many of our acquired wind farms have existing community benefits schemes in place, which we will continue to support. New schemes were set up in 2018 at Lisdowney and Tullynamoyle II wind farms. The community benefit programme will be expanded in 2019 and is a very important part of the Group's objective of supporting local communities.

Outlook

The Group has now successfully executed against all facets of its business plan to date and is well positioned for future growth. The outlook for the Group remains positive with a growing secondary wind market in Ireland, a stable policy backdrop for Irish wind assets underpinned by the REFIT contracts, and an opportunity for further growth into attractive jurisdictions in Europe.

Irish wind market

The Irish onshore wind market continues to expand rapidly, with installed capacity set to grow to over 4.0GW by the end of 2019, representing a market size in excess of EUR8 billion.

The announcement of RESS, a successor scheme to REFIT, has reinforced this further growth opportunity in the Irish renewables market from 2020 onwards. It is expected that over 13,500GWh per year of additional generation from renewables will be contracted between 2020 and 2026, which would represent c.4GW of onshore wind capacity if all 13,500GWh per annum was converted to onshore wind. It is expected that RESS will support a broader range of technology solutions, including offshore wind and solar.

Ireland is seeing a substantial growth in the demand for electricity, particularly from the development of a substantial number of data centres. The Group expects to see a growing number of large corporate entities seeking to enter into long term PPA arrangements to meet their energy obligations.

Executing growth plan in Ireland

The Group's investment activity in the year has played a key role in positioning itself as a major player in Irish renewables market, with a portfolio of 384MW. The Group continues to benefit from our unique relationships and local expertise in the market in terms of acquiring further assets. We continue to see a large number of attractive secondary market opportunities and are maintaining focus on only the most value accretive.

Potential market entry into continental Europe

In line with the Company's investment policy, from July 2019 the Group will have the ability to consider investment opportunities in certain Northern European countries such as Belgium, France, Germany, Finland, and the Netherlands. Any such investments would be limited to countries with robust renewable energy policy frameworks.

Capital Structure Strategy

As part of our medium term funding strategy, our aim would be to either refinance and potentially raise an additional long-term debt instrument in the course of 2019. Given the increased GAV, the Group can sustain its gearing more consistently in line with its medium term target of c.40% of GAV whilst having adequate headroom to fund further acquisitions.

Board of Directors

The Directors are of the opinion that the Board, as a whole, comprises an appropriate balance of skills, experience and diversity. The Board is comprised of individuals from relevant and complementary backgrounds offering experience in investment, financial, and business skills, as well as in the energy sector, from both investment and a commercial perspective.

Rónán Murphy, Chairman

Rónán Murphy, aged 61, was previously Senior Partner of PwC Ireland, a position he was elected to in 2007 and was re-elected to for a further 4 year term in July 2011. Rónán joined PwC in 1980, qualifying in 1982, and was admitted to the partnership in 1992. Rónán was a member of the PwC EMEA Leadership Board from 2010 to 2015. Rónán is also a non-executive director of Icon Plc, Davy and Liberty Insurance.

Rónán holds a Bachelor of Commerce degree and Masters in Business Studies from University College Dublin and is a Fellow of the Institute of Chartered Accountants.

Kevin McNamara, Chairman of the Audit Committee

Kevin McNamara, aged 64, has more than 25 years' experience in the energy sector. Kevin enjoyed a long career with ESB International, including leading the investment division of ESB International Investments. More recently Kevin was CFO of Amarenco Solar, a solar business focused on the Irish and French markets and prior to this CEO of Airvolution Energy, a UK wind development business.

Kevin holds a Bachelor of Commerce degree from University College Dublin and is a Fellow of the Institute of Chartered Accountants.

Emer Gilvarry

Emer Gilvarry, aged 61, is a consultant with Mason Hayes & Curran. Prior to taking up this position, Emer was the Managing Partner for two consecutive terms from 2008 to 2014. From 2014 until 2018, Emer took over the role of Chair of the firm. She is also a former Head of the firm's Litigation Group (2001 to 2008). Emer is a former Board member of Aer Lingus. She is currently a board member of The Economic and Social Research Institute and the Ireland Funds.

Emer holds a Bachelor of Law degree from University College Dublin (BCL).

Other Irish Public Company Directorships

In addition to their directorships of the Company, the below Directors currently hold the following Irish public company directorships:

   Rónán Murphy        Icon plc 

The Directors have all offered themselves for re-election and resolutions concerning this will be proposed at the AGM.

Conflicts of Interest

The Directors have declared any conflicts or potential conflicts of interest to the Board of Directors which has the authority to approve such situations. The Company Secretary maintains the Register of Directors' Conflicts of Interests which is reviewed quarterly by the Board and when changes are notified. The Directors advise the Company Secretary and the Board as soon as they become aware of any conflicts of interest. Directors who have conflicts of interest do not take part in discussions which relate to any of their conflicts.

Directors' Report

The Directors present their Annual Report, together with the consolidated financial statements of Greencoat Renewables PLC for the year ended 31 December 2018.

Principal Activity and Business Review

A detailed discussion of the individual project performance and a review of the business in the period are covered in the Investment Manager's Report.

Results for the Year

The consolidated financial statements for the financial year ended 31 December 2018 are set out in the financial statements including the results for the year which are set out in the Consolidated Statement of Comprehensive Income.

Future Developments

The Group's future outlook is discussed in the Investment Manager's Report.

Investment Objective

The Company's aim is to provide attractive risk-adjusted returns to shareholders through an annual dividend (6 cent per share for 2018) that increases progressively whilst growing the capital value of its investment portfolio. The Company is targeting an IRR of 7 to 8 per cent. (net of expenses and fees) on the issue price of the ordinary shares to be achieved over the longer term via active management of the investment portfolio, reinvestment of excess cash flows and the prudent use of leverage. The Company intends to hold assets in its investment portfolio for the long term.

Investment Policy

The Group intends to increase its portfolio of renewable energy generation assets within the Eurozone with a focus on Ireland. Key investment criteria include:

-- During the first 24 months from listing, the Group will be invested in operational wind energy assets in Ireland.

-- Thereafter, Ireland will remain a key country of focus for the Group as no less than 60 per cent. of GAV will be invested in Ireland.

-- The Group can also invest, in aggregate, up to 40 per cent. of GAV in operational wind energy or solar assets in other relevant countries (being Belgium, Finland, France, Germany and the Netherlands).

The Group has used debt facilities to make additional investments in the year. This has enhanced the Group's attractiveness to sellers since execution risk is greatly diminished, with the Group effectively being a cash buyer. The Group will continue to use debt facilities to make further investments.

The Group will look to repay its drawn debt facilities by refinancing them in the equity markets at appropriate times in order to refresh its debt capacity. While debt facilities are drawn, the Group benefits from an increase in investor returns because borrowing costs are below the underlying return on investments.

Group Structure and Share Capital

The Company is incorporated in the Republic of Ireland. The Group is wholly independent and is not tied to any particular utility or developer. All of the ordinary shares in the Company are quoted on the Euronext Growth Market of Euronext Dublin and on AIM of the London Stock Exchange. The Group comprises of the Company, Holdco and Holdco 2. Holdco and Holdco 2 invest in the underlying portfolio companies.

The Company has one class of ordinary shares which carry no rights to fixed income. Shareholders are entitled to all dividends paid by the Company and, on a winding up, provided the Company has satisfied all of its liabilities, the Shareholders are entitled to all of the surplus assets of the Company.

All shareholders have the same voting rights in respect of the share capital of the Company.

Shareholders are entitled to attend and vote at general meetings of the Company and, on a poll, to one vote for each ordinary share held.

The rights and obligations to the ordinary shares are set out in the Company's articles of association which are available on the Company's website: www.greencoat-renewables.com.

Authority to Purchase Own Shares

The current authority of the Company to make market purchases of up to 14.99 per cent. of its issued share capital expires at the conclusion of every AGM. A special resolution will be proposed at the forthcoming AGM seeking renewal of such authority until the next AGM (or 30 June 2019, whichever is earlier). The purchases will only be made for cash at prices below the estimated prevailing NAV per share and where the Board believes such purchases will result in an increase of the NAV per share. Any shares repurchased under this authority will either be cancelled or held in treasury at the discretion of the Board for future resale in appropriate market conditions.

The Directors believe that the renewal of the Company's authority to purchase shares, as detailed above, is in the best interests of shareholders as a whole and therefore recommend shareholders to vote in favour of the special resolution.

Discount Control

As part of the Company's discount control policies, the Board intends to propose a continuation vote by shareholders if the share price trades at a significant discount to NAV. If in any financial year, the shares have traded on average, at a discount in excess of 10 per cent. or more to the NAV per share in any financial year, the Board will propose a special resolution at the Company's next annual general meeting that the Company cease to continue in its present form. Notwithstanding this, the Board could consider buying back its own shares in the market if the share price is trading at a material discount to NAV, providing it is in the interests of the shareholders to do so.

Major Interests in Shares

Significant shareholdings as at 31 December 2018 are detailed below.

 
 Shareholder                        Ordinary shares held % 
--------------------------------- 
                                          31 December 2018 
---------------------------------  ----------------------- 
 
 Irish Strategic Investment Fund                     20.00 
 Newton Investment Management                         9.07 
 Investec Wealth & Investment                         5.35 
 Tilman Brewin Dolphin                                4.86 
 FIL Investment International                         4.74 
 M&G Investment Management                            4.66 
 Irish Life Investment Managers                       4.10 
 Allied Irish Bank                                    3.95 
 Close Asset Management                               3.87 
 

Companies Act 2014 Disclosures

The Directors disclose the following information:

-- The Company's capital structure is detailed in note 15 of the consolidated financial statements and all shareholders have the same voting rights in respect of the share capital of the Company. There are no restrictions on voting rights that the Company is aware of, nor any agreement between holders of securities that result in restrictions on the transfer of securities or on voting rights;

   --    There exist no securities carrying special rights with regard to the control of the Company; 
   --    The Company does not have an employees' share scheme; 

-- The rules concerning the appointment and replacement of Directors are contained in the Company's Articles of Association and the Companies Act 2014;

-- There exist no agreements to which the Company is party that may affect its control following a takeover bid; and

-- There exist no agreements between the Company and its Directors providing for compensation for loss of office that may occur because of a takeover bid.

Key Performance Indicators

The Board believes that the key metrics detailed within the At a Glance section, which are typical for renewables infrastructure investment funds, will provide shareholders with sufficient information to assess how effectively the Group is meeting its objectives.

Ongoing Charges

 
                           31 December 2018     31 December 2017 
----------------------  -------------------  ------------------- 
                           EUR 000        %     EUR 000    % (2) 
 Management fee              3,035    1.00%       1,147     0.44 
 Directors' fees               200    0.07%         108     0.04 
 Ongoing expenses (1)        1,054    0.34%         899     0.34 
----------------------  ----------  -------  ----------  ------- 
 Total                       4,289    1.41%       2,154     0.82 
----------------------  ----------  -------  ----------  ------- 
 
 Weighted Average NAV      309,667              260,849 
 

(1) Ongoing expenses do not include EUR244k (2017: EURnil) of broken deal costs.

(2) The 2017 ongoing charges ratio represents the period from IPO to 31 December 2017. If the costs were annualised, 2017 ongoing charges ratio would have been 1.87%

Based on the 31 December 2018 NAV of EUR392.8 million, the ongoing total management fee is 1.00 per cent. of NAV. Assuming no change in NAV, the 2019 ongoing charges ratio is expected to be 1.38 per cent..

The Investment Manager is not paid any performance or acquisition fees.

Directors' Indemnity

Directors' and Officers' liability insurance cover is in place in respect of the Directors. The Company's Articles of Association provide, subject to the provisions of Ireland and UK legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted or judgement is given in their favour by the Court.

Except for such indemnity provisions in the Company's Articles of Association and in the Directors' letters of appointment, there are no qualifying third party indemnity provisions in force.

Environmental, Social and Governance Matters

The Group currently invests in wind farms and the environmental benefits of renewable energy are widely known.

The Group relies on the Investment Manager to apply appropriate policies to the investments the Group makes. The policies in place at the Investment Manager outline the Group's approach to responsible investing, as well as the environmental standards which it aims to meet. Responsible investing principles have been applied to each of the investments made.

These policies require the Group to make reasonable endeavours to procure the ongoing compliance of its portfolio companies with its policies on responsible investment. Further details on these policies may be found on the Company's website: www.greencoat-renewables.com.

The Investment Manager monitors compliance at the investment phase and reports on an ongoing basis to the Board.

Global Greenhouse Gas Emissions

As the Group has outsourced operations to third parties, there are no significant greenhouse gas emissions to report from the operations of the Group.

In relation to the Group's investee companies, the level of greenhouse gas emissions arising from the low volume of electricity imports and from operation and maintenance activity is not considered material for disclosure purposes. Further, as the assets are renewable energy generators, they reduce carbon dioxide emissions on a net basis (at a rate of approximately 0.4tn CO2 per MWh).

Employees and Officers of the Company

The Company does not have any employees but instead engages experienced third parties to operate the assets that it owns, therefore employee policies are not required. The Directors of the Company are listed in the Board of Directors section. The Group's policy on diversity is detailed in the Corporate Governance Report.

Principal Risks and Risk Management

In the normal course of business, each investee company has a rigorous risk management framework with a comprehensive risk register that is reviewed and updated regularly and approved by its board. The key risks to the performance of the Group, identified by the Board, are detailed below.

The Board maintains a risk matrix considering the risks affecting both the Group and the investee companies. This risk matrix is updated annually to ensure that procedures are in place to identify, mitigate and minimise the impact of risks should they crystallise. This enables the Board to carry out a robust assessment of the risks facing the Group, including those principal risks that would threaten its business model, future performance, solvency or liquidity.

As it is not possible to eliminate risks completely, the purpose of the Group's risk management policies and procedures is not to eliminate risks, but to reduce them and to ensure that the Group is adequately prepared to respond to such risks and to minimise any impact if the risk develops.

The spread of assets within the portfolio ensures that the portfolio benefits from a diversified wind resource and spreads the exposure to a number of potential technical risks associated with grid connections and with local distribution and national transmission networks. In addition, the portfolio includes 4 different turbine manufacturers, which diversifies technology and maintenance risks. Finally, each site contains a number of individual turbines, the performance of which is largely independent of other turbines.

Risks Affecting the Group

Investment Manager

The ability of the Group to achieve its investment objective depends heavily on the experience of the management team within the Investment Manager and more generally on the Investment Manager's ability to attract and retain suitable staff. The sustained growth of the Group depends upon the ability of the Investment Manager to identify, select and execute further investments which offer the potential for satisfactory returns.

The Investment Management Agreement includes key man provisions which would require the Investment Manager to employ alternative staff with similar experience relating to investment, ownership, financing and management of renewable energy projects should, for any reason, any key man cease to be employed by the Investment Manager. The Investment Management Agreement ensures that no investments are made following the loss of key men until suitable replacements are found and there are provisions for a reduction in the investment management fee during the loss period. It also outlines the process for their replacement with the Board's approval. The key men are also shareholders in the Company.

Brexit Risk

The Investment Manager is the UK-authorised AIFM of the Company, an Irish AIF. The Company has put in place contingency planning to cover different Brexit scenarios. Following recent guidance from the CBI and legal advice, the Company believes that even in the event of a no-deal Brexit the AIFM will be able to continue to manage the AIF as a non-EU AIFM, although the AIFM will no longer be able to avail of the marketing passport under AIFMD and will need to rely on national private placement regimes.

Regulatory Risk

The Board regularly discusses regulatory risks and the Investment Manager reports to it on AIFMD compliance matters. The Investment Manager also consults with its own, and the Company's, legal adviser as well as the Company's NOMAD in relation to its plans to ensure that the Company can continue to be AIFMD compliant after Brexit.

Financing Risk

The Group will finance further investments either by borrowing or by issuing further shares. The ability of the Group to deliver enhanced returns and consequently to realise expected NAV growth is dependent on access to debt facilities and equity capital markets. There can be no assurance that the Group will be able to borrow additional amounts or refinance on reasonable terms or that there will be a market for further shares.

Investment Returns Become Unattractive

A significantly strengthening economy may lead to higher future interest rates which could make the listed infrastructure asset class relatively less attractive to investors. A rise in real interest rates could have a material impact on the share price. As most of the revenues and costs of the investee companies are either indexed or significantly correlated to CPI inflation, the Investment Manager believes this provides a degree of mitigation against a rise in interest rates due to inflation.

Risks Affecting Investee Companies

Regulation

As the renewable energy market has matured and costs of new capacity have reduced, member states have generally revised their supports for the sector to reduce the benefits available to new renewable power generation projects. However, in order to maintain investor confidence, Ireland (and other relevant countries) have to date largely ensured that benefits already granted to operating renewable energy generation projects (which the Group is invested in) are exempt from future regulatory change adversely affecting those benefits.

If these policies were to change, such that subsidy supports presently available to the renewable energy sector were to be reduced or discontinued, it could have a material adverse effect on the business, financial position, results of operations and future growth prospects of the Group, as well as returns to investors.

Electricity Prices

A number of factors could cause a decline in the market price of electricity which could adversely affect the portfolio companies' revenue and financial condition. Similarly, a decline in the costs of other sources of electricity generation, such as fossil fuels or nuclear power, could reduce the wholesale price of electricity and thus the price achieved for electricity generated by wind farms. At present, the Group does not hedge its sales of electricity generated.

Since 1995, Ireland has provided operating wind farms with a supportive regulatory framework (REFIT 1 and REFIT 2) offering an inflation-linked floor price up to 15 years, while allowing wind farms to capture prices above the floor. Under REFIT, wind farms are provided with pricing certainty and no downside exposure to electricity price as the REFIT price is c.EUR80/MWh whereas the 2018 Irish wholesale electricity price was c.EUR62/MWh.

When operating outside of REFIT (at the latest December 2027 for REFIT 1 or December 2030 for REFIT 2 contracted wind farms), the Group may trade in the relevant electricity market on a merchant basis and its financial performance would be therefore subject to the wholesale power price prevalent at the time. In general, independent forecasters expect Irish wholesale power prices to rise in real terms from current levels, driven by higher gas and carbon prices. A difference in the achieved wholesale price of electricity to that which is expected could have a material adverse effect on the business, financial position, results of operation and future growth prospects of the Group, as well as returns to investors.

Wind Resource

The investee companies' revenues are dependent upon wind conditions, which will vary across seasons and years within statistical parameters. The standard deviation of energy production is 10 per cent. over a 12 month period (2 per cent. over 25 years). Since long term variability is low, there is no significant diversification benefit to be gained from geographical diversification across weather systems.

The Group does not have any control over the wind resource and has designed its dividend policy such that it can withstand significant short-term variability in production relating to wind. Before investment, the Group carries out extensive due diligence and relevant historical wind data is available over a substantial period of time. The other component of wind energy generation, a wind farm's ability to turn wind into energy, is mitigated by generally purchasing wind farms with a proven operating track record.

When acquiring wind farms that have only recently entered into operation, only limited operational data is available. In these instances, the acquisition agreements with the vendors of these wind farms may include a "wind energy true-up" which would apply once at least one year's operational data has become available or the acquisition price would be adjusted to reflect wind uncertainty. Under this true-up, the net load factor will be reforecast based on all available data and the purchase price will be adjusted, subject to de minimis thresholds and caps.

Asset Life

Wind turbines may have shorter lives than their expected lifespan of 30 years. In the event that the wind turbines do not operate for the period of time assumed by the Group in its business model or require higher than expected maintenance expenditure to do so, it could have a material adverse effect on investment returns.

The Group invests in companies that own operating wind farms with an appropriate track record. The Group performs regular reviews and ensures that maintenance is performed on all turbines across the wind farm portfolio. Regular maintenance ensures the wind turbines are in good working order, consistent with their expected life-spans.

Market Structure Change (I-SEM)

The island of Ireland previously had a wholesale electricity market, the SEM, which was a gross mandatory pool market, centrally dispatched, where the licensed transmission system operators were responsible for forecasting wind and demand. As a consequence, wind generators were not "balance responsible". The regulatory authorities in Ireland and Northern Ireland have developed a new integrated single electricity market, I-SEM, which aligns SEM with electricity markets across Europe. This market went live in October 2018 with one of the material changes that it introduces "balance responsibility" for wind generators. The implication of being balanced responsible is that it introduces a potential cost to the wind operators. The Group has contracted a third party service provider with relevant experience to manage this risk.

Health and Safety and the Environment

The physical location, operation and maintenance of wind farms may, if inappropriately assessed and managed, pose health and safety risks to those involved. Wind farm operation and maintenance may result in physical injury or industrial accidents, particularly if an individual were to fall from height or be electrocuted. If an accident were to occur in relation to one or more of the Group's investments and if the Group were deemed to be at fault, the Group could be liable for damages or compensation to the extent such loss is not covered by insurance policies. In addition, adverse publicity or reputational damage could ensue.

The Board reviews health and safety at each of its scheduled Board meetings and Kevin McNamara serves as the appointed Health and Safety Director. The Group engages an independent health and safety consultant to ensure the ongoing appropriateness of its health and safety policies.

Wind farms have the potential to cause environmental hazards or nuisances to their local human populations, flora and fauna and the surrounding natural environment. Wind farms can receive complaints relating to specific environmental issues, or compliance with planning consents and other relevant permits. Separately, the planning regulations in Ireland historically included a planning exemption for underground grid connections. There have been challenges to the basis on which this exemption has been determined and there is currently uncertainty around how the industry will resolve this challenge. The Group continues to monitor any development, taking legal advice where necessary, and addresses these as and when required.

Going Concern and Financial Risk

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Investment Manager's Report. The Group faces a number of risks and uncertainties, as set out above. Details of the financial instruments used, along with the financial risk management objectives and policies of the Group, including exposure to price risk, interest rate risk, credit risk and liquidity risk are discussed in note 18 to the consolidated financial statements.

The Group continues to meet day-to-day liquidity needs through its cash resources.

As at 31 December 2018, the Group had net current liabilities of EUR1.4 million (2017: net assets of EUR16.5 million) and had cash balances of EUR3.0 million (2017: EUR14.8 million). This excludes cash balances within investee companies of EUR38.2 million (2017: EUR8.4 million), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Group are payment of dividends and costs relating to the acquisition of new assets, both of which are discretionary.

The Group had EUR362.0 million (2017: EUR71.2 million) of outstanding debt as at 31 December 2018. The Group has and is expected to continue to comply with the covenants of its banking facilities going forward.

The Directors have reviewed Group forecasts and projections which cover a period of not less than 12 months from the date of this report, taking into account foreseeable changes in investment and trading performance, which show that the Group has sufficient financial resources.

On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the consolidated financial statements.

Disclosure of Information to Independent Auditor

The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information and have established that the Group's statutory auditors are aware of that information. In so far as they are aware at the time that this report was approved, there is no relevant audit information of which the Group's statutory auditors are unaware.

Auditor

BDO, Statutory Audit Firm, have expressed their willingness to continue in office in accordance with Section 383 (2) of the Companies Act, 2014.

The Directors will propose the reappointment of BDO as the Company's auditor and resolutions concerning this and the remuneration of the Company's auditor will be proposed at the AGM.

Audit Committee

Pursuant to the Company's Articles of Association the Board had established an Audit Committee that in all material respects meets the requirements of Section 167 of the Companies Act 2014. The Audit Committee was fully constituted and active during the year ended 31 December 2018. For more information, see the Audit Committee Report.

Annual Accounts

The Board is of the opinion that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the performance, strategy and business model of the Company.

The Directors recommend that the Annual Report, the Directors' Report and the Independent Auditor's Report for the year ended 31 December 2018 are received and adopted by the shareholders and a resolution concerning this will be proposed at the AGM.

Accounting Records

The Directors believe they have complied with the requirements of Section 281 to Section 285 of the Companies Act, 2014 with regard to accounting records by employing accounting personnel with the appropriate expertise and by providing adequate resources to the financial function. The accounting records of the Company are maintained by Northern Trust International Fund Administration Services (Ireland) Limited at Georges Court, 54-62 Townsend Street, Dublin 2, Ireland.

Subsequent Events

Significant subsequent events have been disclosed in note 21 to the consolidated financial statements.

Corporate Governance

The Corporate Governance Report form part of this report.

Directors and Company Secretary

The following Directors held office as at 31 December 2018:

Directors

Rónán Murphy (non-executive Chairman)

Emer Gilvarry (non-executive Director)

Kevin McNamara (non-executive Director)

Company Secretary

Andrea Finegan

The biographical details of the Directors are set out in the Board of Directors section.

Changes in Directors during the Year

There were no changes to directors during the year.

Directors' and Company Secretary Interests in shares in the Company

Directors' and Company Secretary's interests in Company shares as at 31 December 2018 are detailed below.

 
 Shareholder               Ordinary shares of EUR0.01 each held as at   Ordinary shares of EUR0.01 each held as at 
------------------------ 
                                                     31 December 2018                             31 December 2017 
------------------------  -------------------------------------------  ------------------------------------------- 
 
 Rónán Murphy                                       124,752                                      100,000 
 Kevin McNamara                                                50,000                                       50,000 
 Emer Gilvarry                                                 49,505                                          Nil 
 Andrea Finegan                                                   Nil                                          Nil 
------------------------  -------------------------------------------  ------------------------------------------- 
 

The Company does not have any share option schemes in place.

Dividend

The Board has recommended a total aggregate dividend of EUR5,700,000, equivalent to 1.50 cent per share with respect to the 3 month period ended 31 December 2018.

Political Donations

No political donations were made during the year ended 31 December 2018.

Longer Term Viability

As further disclosed in the Corporate Governance Report the Company is a member of the AIC and complies with the AIC Code. In accordance with the AIC Code, the Directors are required to assess the prospects of the Group over a period longer than the 12 months associated with going concern. The Directors conducted this review for a period of 10 years, which it deemed appropriate, given the long-term nature of the Group's investments, which are modelled over 30 years, coupled with its long-term strategic planning horizon.

In considering the prospects of the Group, the Directors looked at the key risks facing both the Group and the investee companies, focusing on the likelihood and impact of each risk as well as any key contracts, future events or timescales that may be assigned to each key risk.

As a sector-focused infrastructure fund, the Group aims to produce stable and progressive dividends while preserving the capital value of its investment portfolio on a real basis. The Directors believe that the Group is well placed to manage its business risks successfully over both the short and long term and accordingly, the Board has a reasonable expectation that the Group will be able to continue in operation and to meet its liabilities as they fall due for a period of at least 10 years.

While the Directors have no reason to believe that the Group will not be viable over a longer period, they are conscious that it would be difficult to foresee the economic viability of any company with any degree of certainty for a period of time greater than 10 years.

Directors' Compliance Statement

The Directors, in accordance with Section 225(2)(a) of the Companies Act 2014, acknowledge that they are responsible for securing the Company's compliance with its "relevant obligations". "Relevant obligations" in the context for the Company, are the Company's obligations under:

-- The Companies Act 2014, where a breach of the obligations would be a category 1 or category 2 offence.

-- The Companies Act 2014, where a breach of the obligations would be a serious Market Abuse or Prospectus offence.

   --    Tax law. 

Pursuant to Section 225(2)(b) of the Companies Act 2014, the Directors confirm that:

-- A compliance policy statement has been drawn up by the Company in accordance with Section 225(3)(a) of the Companies Act 2014 setting out the Company's policies (that, in the directors' opinion, are appropriate to the Company) regarding compliance by the Company with its relevant obligations.

-- Appropriate arrangements and structures that in their opinion, are designed to secure material compliance with the Company's relevant obligations, have been put in place; and

-- A review has been conducted, during the financial year, of the arrangements and structures referred to above.

By order of the Board

Rónán Murphy Kevin McNamara

Director Director

3 March 2019 3 March 2019

Directors' Remuneration Report

This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2014. A resolution to consider the Directors' Remuneration Report will be proposed at the AGM.

The Company's Auditor is required to give their opinion on the information provided on Directors' remuneration and this is explained further in its report to shareholders within the Independent Auditor's Report. The remainder of this report is outside the scope of the external audit.

Annual Statement from the Chairman of the Board

The Board which is profiled on the Board of Direcors section, consists solely of non-executive Directors and is considered to be entirely independent. The Board considers at least annually the level of the Board's fees, in accordance with the AIC Code.

Remuneration Policy

As at the date of this report, the Board comprised 3 Directors, all of whom are non-executive. The Company has established a Remuneration Committee which comprises all of the Directors and the Chair is Emer Gilvarry.

Each of the Directors was appointed to the Remuneration Committee with effect from 25 June 2017, the date of listing on ESM of the Irish Stock Exchange (now Euronext Growth Market of Euronext Dublin) and AIM of the London Stock Exchange. The Committee shall meet at such times as the Committee Chairman shall require.

Each Director receives a fixed fee per annum based on their roles and responsibility within the Company and the time commitment required. It is not considered appropriate that Directors' remuneration should be performance related and none of the Directors are eligible for pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as non-executive Directors of the Company. The total remuneration of non-executive Directors has not exceeded the limit set out in the Articles of Association of the Company.

The Company's Articles of Association empower the Board to award a discretionary bonus where any Director has been engaged in exceptional work on a time spent basis to compensate for the additional time spent over their expected time commitment.

The Articles of Association provide that Directors retire and offer themselves for re-election at the first AGM after their appointment and at least every 3 years thereafter. In accordance with corporate governance best practice, all of the Directors have opted to offer themselves for re-election on an annual basis.

All of the Directors have been provided with letters of appointment which stipulate that their initial term shall be for 3 years, subject to re-election.

A Director's appointment may at any time be terminated by and at the discretion of either party upon 6 months' written notice. A Director's appointment will automatically end without any right to compensation whatsoever if they are not re-elected by the Shareholders. A Director's appointment may also be terminated with immediate effect and without compensation in certain other circumstances.

The terms and conditions of appointment of non-executive Directors are available for inspection from the Company's registered office.

The Directors do not envisage any changes to the remuneration policy in the next accounting period.

Annual Report on Remuneration

The table below (audited information) shows all remuneration earned by each individual Director during the year/period:

 
                           Date of Appointment     Directors' fees per   Paid in year ended 31   Paid from appointment 
                                                                 annum                December     to 31 December 2017 
                                                                                          2018 
-----------------------  ---------------------  ----------------------  ----------------------  ---------------------- 
 Rónán Murphy 
  (chairman)                      16 June 2017              EUR100,000              EUR100,000               EUR54,231 
 Kevin McNamara                   16 June 2017               EUR50,000               EUR50,000               EUR27,115 
 Emer Gilvarry                    16 June 2017               EUR50,000               EUR50,000               EUR27,115 
-----------------------  ---------------------  ----------------------  ----------------------  ---------------------- 
 Total                                                                              EUR200,000              EUR108,461 
----------------------------------------------  ----------------------  ----------------------  ---------------------- 
 

None of the Directors received any other remuneration or additional discretionary payments during the year from the Company.

On behalf of the Board,

Emer Gilvarry

Chair of the Remuneration Committee

3 March 2019

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the consolidated financial statements in accordance with applicable law and regulations.

Irish company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements and have elected to prepare the Company financial statements in accordance with IFRS as adopted by the EU. Under company law the Directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.

In preparing these consolidated financial statements, the Directors are required to:

   --    Select suitable accounting policies and then apply them consistently; 
   --    Make judgements and accounting estimates that are reasonable and prudent; 

-- State whether they have been prepared in accordance with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the consolidated financial statements;

-- Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business;

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the consolidated financial statements comply with the Companies Act 2014 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report, taken as a whole, is fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group's performance, business model and strategy.

Website Publication

The Directors are responsible for ensuring the Annual Report and the consolidated financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in Ireland and the UK governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibilities also extend to the ongoing integrity of the consolidated financial statements contained therein.

On behalf of the Board,

Rónán Murphy Kevin McNamara

   Director                                                                                  Director 

3 March 2019 3 March 2019

Corporate Governance Report

This Corporate Governance Report forms part of the Report of the Directors disclosed in the Directors' Report.

Corporate Governance Framework

The Company is committed to high standards of corporate governance and the Board is responsible for ensuring those high standards are achieved. From 28 September 2018, companies trading on AIM are required to report on their application of a recognised corporate governance code. For year ended 31 December 2018, the Company was a member of the AIC and the Board continued to apply the AIC Code. The AIC Code provides boards with a framework of best practice in respect of the governance of investment companies in the UK. While the Company is not an "investment company" under the Companies Act, the Company shares key important characteristics with such companies e.g. it has no employees and the tasks of portfolio management and risk management are delegated to the Investment Manager. The FRC has confirmed that investment companies who report against the AIC Code and follow its requirements will also be meeting their obligations under the UK Code and the Irish Corporate Governance Annex. The Board considers that reporting against the principles and recommendations of the AIC Code, by reference to the AIC Guide, provides better information to Shareholders. The Board reviews the Company's compliance with the AIC code annually and a summary is provided on the Company's website.

The text of the AIC Code and the AIC Guide are available on the AIC's website, www.theaic.co.uk. The UK Code is available on the FRC's website, www.frc.org.uk.

Statement of Compliance

The Board confirms that the Company has complied with the AIC Code during the year ended 31 December 2018.

The Board

As at the date of this report, the Board comprises of 3 non-executive Directors, all of whom are considered to be independent of the Investment Manager and free from any business or other relationship that could materially interfere with the exercise of their independent judgement. Directors' details in the Board of Directors section, sets out the range of investment, financial and business skills and experience represented.

The current Directors, detailed in the Board of Directors section, were appointed on 16 June 2017.

Director Re-election and Appointment

The Articles of Association provide that Directors shall retire and offer themselves for re-election at the first AGM after their appointment and at least every 3 years thereafter. However, all of the Directors, in accordance with best practice, have opted to offer themselves for re-election on an annual basis. Having considered their effectiveness, demonstration of commitment to the role, attendance at meetings and contribution to the Board's deliberations, the Board approves the nomination for re-election of all Directors.

Any Director, who has held office with the Company for three consecutive 3 year terms shall retire from office. This will allow for phased Board appointments and retirements and enable the Board to consider whether there is any risk that such Director might reasonably be deemed to have lost independence through such long service.

The terms and conditions of appointment of non-executive Directors are available for inspection from the Company's registered office.

The Chairman

The Chairman's primary responsibility is to lead the Board and to ensure its effectiveness both collectively and individually. The Chairman of the Board is Rónán Murphy. In considering the independence of the Chairman, the Board took note of the provisions of the AIC Code relating to independence and has determined that Mr. Murphy is an Independent Director. The Company has no employees and therefore there is no requirement for a chief executive.

Diversity Policy and Independence

The Board has a policy to base appointments on merit and against objective criteria, with due regard for the benefits of diversity, including gender diversity. Its objective is to attract and maintain a Board that, as a whole, comprises an appropriate balance of skills and experience.

The Board consists of individuals from relevant and complementary backgrounds offering experience on the Board of listed companies, in financial and legal services as well as in the energy sector. As at the date of this report, the Board comprised 2 men and 1 woman, all non-executive Directors who are considered to be independent of the Investment Manager and free from any business or other relationship that could materially interfere with the exercise of their independent judgement.

The Investment Manager operates an equal opportunities policy and its partners and employees comprise 29 men and 10 women.

Board Responsibilities

The Board will meet, on average, 4 times in each calendar year for scheduled quarterly Board meetings and on an ad hoc basis where necessary. At each meeting, the Board follows a formal agenda that will cover the business to be discussed including, but not limited to, strategy, performance and the framework of internal controls, as well as review its own performance and composition. Between meetings there is regular contact with the Investment Manager. The Board requires to be supplied, in a timely manner, with information by the Investment Manager, the Administrator, the Depositary and other advisers in a form and of a quality appropriate to enable it to discharge its duties.

The Board is responsible for the determination of the Company's investment objective and policy and has overall responsibility for the Company's activities. The Company has entered into the Investment Management Agreement with the Investment Manager pursuant to which the Investment Manager is responsible for the day-to-day management of the Company.

The Board has established procedures which provide a reasonable basis for the Directors to make proper judgement on an ongoing basis as to the financial position and prospects of the Company.

The Investment Manager will at all times act within the parameters set out in the investment policy. The Investment Manager reports to the Board and keeps the Board appraised of material developments on an ongoing basis.

The Investment Manager is responsible for, among other things:

   --    management of the portfolio and further investments; 
   --    identifying, evaluating and executing possible further investments; 
   --    risk management; 
   --    reporting to the Board; 
   --    calculating and publishing NAV, with the assistance of the Administrator; 

-- assisting the Company in complying with its ongoing obligations as a company whose shares are admitted to trading on AIM and Euronext Growth Market; and

-- directing, managing, supervising and co-ordinating the Company's third-party service providers, including the Depositary and the Administrator, in accordance with prudent industry practice.

The Board has the ability to specify from time to time specific matters that require prior Board approval ("Reserved Matters") or specific matters that it believes ought to be brought to the Board's attention as part of the general reporting process between the Investment Manager and the Board. The initial list of Reserved Matters specified by the Board includes entry into markets other than those located in the Republic of Ireland, entry into transactions other than those involving operational onshore wind assets, entry into any acquisitions increasing GAV by more than 50 per cent. and entry into material new financing facilities.

The Investment Manager shall, once every calendar quarter, submit to the Board a report of activities, investments and performance of the Company, including progress of all investments, details of the pipeline of acquisitions and any disposals and, in addition, shall promptly report to the Board any other information which could reasonably be considered to be material.

Committees of the Board

The Company's Audit Committee is chaired by Kevin McNamara, and consists of a minimum of 2 members. Emer Gilvarry is the second member of the Audit Committee. In accordance with best practice, the Company's Chairman is not a member of the Audit Committee, however he does attend Audit Committee meetings as and when deemed appropriate. The Audit Committee Report, included in the Audit Committee Report, describes the work of the Audit Committee.

The Company has established a Management Engagement Committee, which comprises all the Directors and the Chair is Rónán Murphy. The Management Engagement Committee's main function is to keep under review the performance of the Investment Manager and review and make recommendations on any proposed amendment to the Investment Management Agreement. The Management Engagement Committee will also perform a review of the performance of other key service providers to the Group. The Management Engagement Committee will meet at least once a year.

In accordance with the AIC Code, the Company has also set up Remuneration and Nomination Committees. The Remuneration Committee comprises of all the Directors and the Chair is Emer Gilvarry. The Remuneration Committee's main functions are to determine and agree the Board policy for the remuneration of the Directors and review and consider any additional ad hoc payments in relation to duties undertaken over and above normal business. The Remuneration Committee will meet at least once a year.

The Nomination Committee comprises all of the Directors and the Chair is Rónán Murphy. The Nomination Committee's main function is to review the structure, size and composition of the Board regularly and to consider succession planning for Directors. The Nomination Committee will meet at least once a year.

Board Meetings, Committee Meetings and Directors' Attendance

A schedule of Board and Audit Committee meetings is circulated to the Board one year ahead including the key agenda items for each meeting. For other Committees, meetings are arranged as and when required. The number of meetings of the full Board of the Company attended in the year to 31 December 2018 by each Director is set out below:

 
 
 2018                      Scheduled Board Meetings (Total of 6)   Additional Board Meetings (Total of 10) 
------------------------  --------------------------------------  ---------------------------------------- 
 
 Rónán Murphy                                        6                                         9 
 Emer Gilvarry                                                 6                                         9 
 Kevin McNamara                                                6                                        10 
------------------------  --------------------------------------  ---------------------------------------- 
 

During the year, there were also 7 meetings of sub-committees of the Board. The number of meetings of the Committees attended in the year by each Committee member is set out below.

 
 2018                           Audit Committee             Management    Nomination Committee            Remuneration 
                          Meetings (Total of 3)   Engagement Committee   Meetings (Total of 1)      Committee Meetings 
                                                    Meetings (Total of                                    (Total of 1) 
                                                                    2) 
-----------------------  ----------------------  ---------------------  ----------------------  ---------------------- 
 
 Rónán Murphy                       3                      2                       1                       1 
 Emer Gilvarry                                3                      2                       1                       1 
 Kevin McNamara                               3                      2                       1                       1 
-----------------------  ----------------------  ---------------------  ----------------------  ---------------------- 
 

Board Performance and Evaluation

Performance and evaluation pursuant to Principle 7 of the AIC Code, the Board undertakes a formal and rigorous evaluation of its performance each financial year.

Each individual Directors' training and development needs are reviewed annually. All new Directors receive an induction, including being provided with information about the Company and their responsibilities and meetings with the Investment Manager. In addition, each Director will visit operational sites and specific Board training days are arranged involving presentations on relevant topics.

Directors' Indemnity

Directors' and Officers' liability insurance cover is in place in respect of the Directors. The Company's articles of association provide, subject to the provisions of Ireland and UK legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted or judgement is given in their favour by the Court.

Except for such indemnity provisions in the Company's Articles of Association and in the Directors' letters of appointment, there are no qualifying third party indemnity provisions in force.

The Investment Manager

The Board has entered into the Investment Management Agreement with the Investment Manager under which the Investment Manager is responsible for developing strategy and the day-to-day management of the Group's investment portfolio, in accordance with the Group's investment objective and policy, subject to the overall supervision of the Board. A summary of the fees paid to the Investment Manager are given in note 3 to the financial statements.

The Investment Manager's appointment is for an initial term of 5 years from the admission date (25 July 2017). The Investment Management Agreement may be terminated by either party on the conclusion of the initial term provided the party purporting to terminate provides not less than 12 months prior written notice of its intention to terminate the agreement. The Investment Management Agreement may be terminated with immediate effect and without compensation, by either the Investment Manager or the Company if the other party has gone into liquidation, administration or receivership or has committed a material breach of the Investment Management Agreement.

Risk Management and Internal Control

The Board is responsible for the Company's system of internal control and for reviewing its effectiveness. The Board confirms that it has an ongoing process for identifying, evaluating and managing the significant risks faced by the Company.

The Company's principal risks and uncertainties are detailed on below. As further explained in the Directors' Report, the risks of the Company are outlined in a risk matrix which was reviewed and updated during the year. The Board continually reviews its policy setting and updates the risk matrix annually to ensure that procedures are in place with the intention of identifying, mitigating and minimising the impact of risks should they crystallise. The Board relies on reports periodically provided by the Investment Manager, the Depositary and the Administrator regarding risks that the Company faces. When required, experts are employed to gather information, including tax and legal advisers. The Board also regularly monitors the investment environment and the management of the Company's investment portfolio, and applies the principles detailed in the internal control guidance issued by the FRC.

The principal features of the internal control systems which the Investment Manager and the Administrator have in place in respect of the Group's financial reporting include:

   --    internal reviews of all financial reports; 
   --    review by the Board of financial information prior to its publication; and 
   --    authorisation limits over expenditure incurred by the Group. 

Information and Support

The Board can seek independent professional advice on a matter, at the Company's expense, where they judge it necessary to discharge their responsibilities as Directors. The Committees of the Board are provided with sufficient resources to undertake their duties. The Directors have access to the services of the Company Secretary and Assistant Company Secretary, who are responsible for ensuring that Board procedures are followed.

Whistleblowing

The Board has considered the AIC Code recommendations in respect of arrangements by which staff of the Investment Manager or Administrator may, in confidence, raise concerns within their respective organisations about possible improprieties in matters of financial reporting or other matters. It has concluded that adequate arrangements are in place for the proportionate and independent investigation of such matters and, where necessary, for appropriate follow-up action to be taken within their organisation.

Amendment of Articles of Association

The Company's Articles of Association may be amended by the members of the Company by special resolution (requiring a majority of at least 75 per cent. of the persons voting on the relevant resolution).

General Meetings

The Company shall hold in each year a general meeting as its annual general meeting in addition to any other meeting in that year and shall specify the meeting as such in the notice calling it. All general meetings other than annual general meetings shall be called extraordinary general meetings. The Directors may convene general meetings. Extraordinary general meetings may also be convened on such requisition, or in default, may be convened by such requisitionists as provided by the Companies Act 2014.

All business shall be deemed special that is transacted at an extraordinary general meeting. All business that is transacted at an annual general meeting shall also be deemed special, with the exception of the consideration of the Company's statutory financial statements and reports of the Directors and auditors, the review by the members of the Company's affairs, the appointment of Directors in the place of those retiring (whether by rotation or otherwise), the fixing of the remuneration of the Directors subject to sections 380 and 382 to 385 of the Companies Act, the appointment and re-appointment of the auditors and the fixing of the remuneration of the auditors.

Every member entitled to attend and vote at a general meeting may appoint a proxy to attend, speak and vote on his or her behalf provided, however, that a member may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to shares held in different securities accounts. The holders of ordinary shares have the right to receive notice of and attend and vote at all general meetings of the Company and they are entitled, on a poll or a show of hands, to one vote for every ordinary share they hold.

Votes may be given either personally or by proxy. Subject to any rights or restrictions for the time being attached to any class or classes of shares and subject to any suspension or abrogation of rights pursuant to the Articles, on a show of hands every member present in person and every proxy shall have one vote, so, however, that no individual shall have more than one vote, and on a poll every member shall have one vote for every share carrying rights of which he is the holder. On a poll a member entitled to more than one vote need not cast all his votes or cast all the votes he uses in the same way.

Relations with Shareholders

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. Senior members of the Investment Manager make themselves available at all reasonable times to meet with principal shareholders and key sector analysts. The Chairman and other Directors are also available to meet with shareholders if required.

All shareholders have the opportunity to put questions to the Company at the registered address. The AGM of the Company will provide a forum for shareholders to meet and discuss issues with the Directors and Investment Manager.

The Board receives shareholder reports at all quarterly Board meetings and regularly monitors the views of shareholders and the shareholder profile of the Company. The Board is also kept fully informed of all relevant market commentary on the Company by the Investment Manager.

Shareholders may also find Company information or contact the Company through its website: www.greencoat-renewables.com.

Audit Committee Report

During the year ended 31 December 2018, the Audit Committee comprised of Kevin McNamara (Chairman), and Emer Gilvarry. The AIC Code has a requirement that at least one member of the Audit Committee should have recent and relevant financial experience and the Audit Committee as a whole shall have competence relevant to the sector. The Board is satisfied that the Audit Committee is properly constituted in these respects. The qualifications and experience of all Audit Committee members are disclosed in the Board of Directors section.

The Audit Committee operates within clearly defined terms of reference which were reviewed during the financial year. The revised terms have been approved by the Board, and include all matters indicated by the AIC Code and are available for inspection on the Company's website: www.greencoat-renewables.com.

Audit Committee meetings are scheduled at appropriate times in the reporting and auditing cycle. The Chairman, other Directors and third parties may be invited to attend meetings as and when deemed appropriate.

Meetings

The Audit Committee met 3 times up to 31 December 2018. A breakdown of Director attendance is set out in the Corporate Governance Report. BDO attended 2 of the 3 formal Audit Committee meetings held during the year ended 31 December 2018.

Summary of the Role and Responsibilities of the Audit Committee

The duties of the Audit Committee include reviewing the Interim report, Annual Report and financial statements and any formal announcements relating to the Company's financial performance.

The Audit Committee is the forum through which the external auditor reports to the Board and is responsible for reviewing the terms of appointment of the Auditor, together with their remuneration. On an ongoing basis, the Audit Committee is responsible for reviewing the objectivity of the Auditor along with the effectiveness of the audit and the terms under which the Auditor is engaged to perform non-audit services. The Audit Committee is also responsible for reviewing the Company's corporate governance framework, system of internal controls and risk management, ensuring they are suitable for an investment company.

The Audit Committee reports its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken.

Overview

During the year, the Audit Committee's discussions have been broad ranging. In addition to the 3 formally convened Audit Committee meetings from incorporation to the date of this report, the Audit Committee has had regular contact and meetings with the Investment Manager, and the Administrator. These meetings and discussions focused on, but were not limited to:

   --    reviewing the updated risk matrix of the Company; 
   --    reviewing the Company's corporate governance framework; 

-- reviewing the internal controls framework for the Company, the Administrator and the Investment Manager, considering the need for a separate internal audit function;

   --    considering potential incidents of fraud and the Company's response thereto; 
   --    considering the ongoing assessment of the Company as a going concern; 

-- considering the principal risks and period of assessment for the longer term viability of the Company;

-- monitoring the ongoing appropriateness of the Company's status as an investment entity under IFRS 10, in particular following an acquisition;

-- monitoring compliance with AIFMD, the AIC code and other regulatory and governance frameworks;

-- reviewing and approving the audit plan in relation to the audit of the Company's Annual Report and financial statements;

-- monitoring compliance with the Company's policy on the provision of non-audit services by the Auditor; and

   --    reviewing the effectiveness, resources, qualifications and independence of the Auditor. 

Financial Reporting

The primary role of the Audit Committee in relation to financial reporting is to review, with the Investment Manager, the Administrator and the Auditor, the appropriateness of the Interim Report and Annual Report and financial statements, concentrating on, amongst other matters:

   --    the quality and acceptability of accounting policies and practices; 

-- the clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements;

-- amendments to legislation and corporate governance reporting requirements and accounting treatment of new transactions in the period;

   --    the impact of new and amended accounting standards on the Company's financial statements; 

-- whether the Audit Committee believes that proper and appropriate processes and procedures have been followed in the preparation of the Interim and Annual Report and financial statements;

-- consideration and recommending to the Board for approval of the contents of the annual financial statements and reviewing the Auditors' report thereon including consideration of whether the consolidated financial statements are overall fair, balanced and understandable;

-- material areas in which significant judgements have been applied or there has been discussion with the Auditor; and

   --    any correspondence from regulators in relation to the Company's financial reporting. 

Matters typically discussed include the Auditor's assessment of the transparency and openness of interactions with the Investment Manager and the Administrator, confirmation that there has been no restriction in scope placed on them, the independence of their audit and how they have exercised professional scepticism.

Significant Issues

The Audit Committee discussed the planning, conduct and conclusions of the external audit as it proceeded. At the Audit Committee meeting in advance of the year end, the Audit Committee discussed and approved the Auditor's audit plan. The Audit Committee identified the fair value of investments as a key area of risk of misstatement in the Company's financial statements.

Assessment of the Fair Value of Investments

The Group's accounting policy is to designate investments at fair value through profit or loss. Therefore, the most significant risk in the Group's accounts is whether its investments are fairly valued due to the uncertainty involved in determining the investment valuations. There is also an inherent risk of management override as the Investment Manager's fee is calculated based on NAV as disclosed in note 3 to the consolidated financial statements. The Investment Manager is responsible for calculating the NAV with the assistance of the Administrator, in accordance with its valuation policy and is subject to the approval of its independent valuation committee.

On a quarterly basis, the Investment Manager provides a detailed analysis of the NAV highlighting any movements and assumption changes from the previous quarter's NAV. The Audit Committee considers and challenges this analysis and the rationale of any changes made. The Committee has satisfied itself that the key estimates and assumptions used in the valuation model, which are disclosed in note 2 to the consolidated financial statements, are appropriate and that the investments have been fairly valued.

The key estimates and assumptions include the useful life of the assets, the discount factors, the level of wind resource, the rate of inflation, the price at which the power and associated benefits can be sold and the amount of electricity the assets are expected to produce. In particular, the Audit Committee carefully considered external technical advice in relation to the change in the asset life assumption from 25 years to 30 years and associated assumptions in relation to the continued good management of the assets, lease extensions and other factors, that has been included in the 31 December 2018 valuation.

Internal Control

The Audit Committee has established a set of ongoing processes designed to meet the particular needs of the Company in managing the risks to which it is exposed.

The process is one whereby the Investment Manager has identified the key risks to which the Company is exposed, and recorded them on a risk matrix together with the controls employed to mitigate these risks. A residual risk rating has been applied to each risk. The Audit Committee is responsible for reviewing the risk matrix and associated controls before recommending to the Board for consideration and approval, challenging the Investment Manager's assumptions to ensure a robust internal risk management process.

The Audit Committee formally reviewed the updated risk matrix during the year and will continue to do so on, an annual basis. By their nature, these procedures provide a reasonable, but not absolute, assurance against material misstatement or loss. Regular reports will be provided to the Audit Committee highlighting material changes to risk ratings.

During the year, the Audit Committee also discussed and reviewed the internal controls framework in place at the Investment Manager and the Administrator in depth. Discussions focused on 3 lines of defence: assurances at operational level; internal oversight; and independent objective assurance. The Audit Committee concluded that these frameworks were appropriate for the identification, assessment, management and monitoring of financial and regulatory risks, with particular regard to the protection of the interests of the Company's shareholders.

Internal Audit

The Audit Committee continues to review the need for an internal audit function and has decided that the systems, processes and procedures employed by the Company, Investment Manager and Administrator, including their own internal controls and procedures, provide sufficient assurance that an appropriate level of risk management and internal control is maintained. In addition to this, the Company's external Depositary provides cash monitoring, asset verification and oversight services to the Company.

The Audit Committee has therefore concluded that Shareholders' investments and the Company's assets are adequately safeguarded and an internal audit function specific to the Company is considered unnecessary.

The Audit Committee shall meet investors in relation to the Company's financial reporting and internal controls, should it be deemed appropriate.

External Auditor

Effectiveness of the Audit Process

The Audit Committee assessed the effectiveness of the audit process by considering BDO's fulfilment of the agreed audit plan through the reporting presented to the Audit Committee by BDO and the discussions at the Audit Committee meeting, which highlighted the major issues that arose during the course of the audit. In addition, the Audit Committee also sought feedback from the Investment Manager and the Administrator on the effectiveness of the audit process. For this financial year, the Audit Committee was satisfied that there had been appropriate focus and challenge on the primary areas of audit risk and assessed the quality of the audit process to be good.

Non-Audit Services

Details of fees paid to BDO during the year are disclosed in note 5 to the consolidated financial statements. The Audit Committee approved these fees after a review of the level and nature of work to be performed, and are satisfied that they are appropriate for the scope of the work required. The Audit Committee seeks to ensure that any non-audit services provided by the external auditor do not conflict with their statutory and regulatory responsibilities, as well as their independence, before giving written approval prior to their engagement. The Audit Committee was satisfied that BDO had adequate safeguards in place and that provision of these non-audit services did not provide threats to the Auditor's independence.

The Audit Committee has a policy regarding the provision of non-audit services by the external auditor which precludes the external auditor from providing any of the prohibited non-audit services as listed in Article 5 of the EU Directive Regulation (EU) No 537/2014. The Audit Committee monitors the Group's expenditure on non-audit services provided by the Company's auditor who should only be engaged for non-audit services where they are deemed to be the most commercially viable supplier and prior approval of the Audit Committee has been sought.

Independence

The Audit Committee is required to consider the independence of the external auditor. In fulfilling this requirement, the Audit Committee has considered a report from BDO describing its arrangements to identify, report and manage any conflict of interest and the extent of non-audit services provided by them.

The Audit Committee has concluded that it considers BDO to be independent of the Company and that the provision of the non-audit services described above is not a threat to the objectivity and independence of the conduct of the audit.

Re-appointment

BDO has been the Company's Auditor from its incorporation on 15 February 2017. The Auditor is required to rotate the audit partner responsible for the Group audit every 5 years. Therefore, the lead partner will be required to rotate after the completion of the 2022 year end audit.

The external audit contract is intended to be put to tender at least every 10 years. The Audit Committee shall give advance notice of any retendering plans within the Annual Report. The Audit Committee has considered the re-appointment of the Auditor and decided not to put the provision of the external audit out to tender at this time. As described above, the Audit Committee reviewed the effectiveness and independence of the Auditor and remain satisfied that the Auditor provides effective independent challenge to the Board, the Investment Manager and the Administrator. The Audit Committee will continue to monitor the performance of the Auditor on an annual basis and will consider their independence and objectivity, taking account of appropriate guidelines.

The Audit Committee has therefore recommended to the Board that BDO be proposed for re-appointment as the Company's Auditor at the AGM of the Company.

Annual General Meeting

The Chairman of the Audit Committee will be present at the Company's AGM to answer questions on the Audit Committee's activity and matters within the scope of the Audit Committee's responsibilities.

On behalf of the board,

Kevin McNamara

Chairman of the Audit Committee

3 March 2019

Independent Auditor's Report

To the members of Greencoat Renewables PLC

Opinion

We have audited the financial statements of Greencoat Renewables PLC ("Company") and its subsidiaries ("Group") for the financial year ended 31 December 2018, which comprise the Consolidated Statement of Comprehensive Income, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Changes in Equity, Consolidated and Company Statement of Cash Flows, and the related notes including the summary of significant accounting policies set out in note 1. The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting Standards ("IFRS") as adopted by the European Union and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2014.

In our opinion:

-- the Group financial statements give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2018 and of its profit for the financial year then ended;

-- the Company Statement of Financial Position gives a true and fair view of the assets, liabilities and financial position of the Company as at 31 December 2018;

-- the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;

-- the Company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2014; and

-- the Group financial statements and Company financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) ("ISAs (Ireland)") and applicable law. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard as applied to public interest entities issued by the Irish Auditing and Accounting Supervisory Authority ("IAASA"), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

The valuation of investments is a subjective accounting estimate where there is an inherent risk of management override arising from the investment valuations being prepared by the Investment Manager, who is remunerated based on the Net Asset Value ("NAV") of the Company.

The entire investment portfolio is represented by unquoted equity and loan investments and all investments are individually material to the financial statements.

Related disclosures

Refer to:

   --    Note 1 - Significant accounting policies; 
   --    Note 2 - critical accounting judgments, estimates and assumptions; 
   --    Note 4 - return on investments; and 
   --    Note 9 - investments at fair value through profit or loss; 

of the accompanying financial statements.

Audit Response

For investments valued using a discounted cash flow model we performed the following procedures:

-- challenged the appropriateness of the selection and application of key assumptions in the discounted cash flow model including discount rate, energy yield, power price, inflation rate and asset life by benchmarking to available industry data and consulting with our internal valuation specialists;

-- agreed energy yield, power price, inflation rate and asset life used in the model to independent reports;

-- for new investments we obtained and reviewed all key agreements and contracts and considered if they were accurately reflected in the valuation model;

-- for existing investments we analysed changes in significant assumptions compared with assumptions audited in previous periods and vouched these to independent evidence including available industry data;

-- used spreadsheet analysis tools to assess the integrity of the valuation models and track changes to inputs or structure;

   --    agreed cash and other net assets to bank statements and investee company management accounts; 
   --    considered the accuracy of forecasting by comparing previous forecasts to actual results; 

-- we critically evaluated and challenged management's assessment as to the recoverability of the loan investments;

   --    we vouched to loan agreements and verified the terms of the loan; and 

-- we have reviewed the performance of the loan investments during the financial year under review.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

-- for the purpose of our audit we used overall materiality of EUR7.9m, which represents approximately 2% of the Group and Company's NAV.

-- we applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the Financial Statements as a whole.

-- we chose NAV as the benchmark because of the Group and Company's asset based structure. We selected 2% based on our professional judgment, noting that it is also within the range of commonly accepted asset-related benchmarks.

-- in addition, we used a specific materiality for the purpose of testing transactions and balances which impact on the Group's realised return. Specific materiality of EUR1.2m, which represents approximately 10% of the return on investment, excluding the unrealised valuation movements.

We agreed with the Audit Committee that we would report to the Audit Committee all audit differences in excess of EUR0.4m, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us to report to you where;

-- the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-- the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group and the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2014

Based solely on the work undertaken in the course of the audit, we report that:

-- in our opinion, the information given in the Directors' report is consistent with the financial statements; and

-- in our opinion, the Directors' report has been prepared in accordance with the Companies Act 2014.

We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the Company Statement of Financial Position is in agreement with the accounting records.

Matters on which we are required to report by exception

Based on the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.

We are also required to review:

   --    the Directors' statement in relation to going concern and longer-term viability; 

-- the part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the AIC Code specified for our review; and

-- certain elements of disclosures in the report to shareholders by the Board of Directors' remuneration committee.

In addition, the Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions required by sections 305 to 312 of the Act are not made.

We have nothing to report in this regard.

Respective responsibilities

Responsibilities of directors for the financial statements

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and Company's ability to continue as going concerns, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the IAASA's website at: http://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsiblities_for_audit.pdf

This description forms part of our auditor's report.

The purpose of our audit work and to whom we owe our responsibilities

Our report is made solely to the Company's members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Brian Hughes

For and on behalf of BDO,

Dublin,

Ireland

Statutory Audit Firm

AI223876

3 March 2019

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2018

 
                                                                             For the year ended   For the period ended 
                                                                      Note     31 December 2018       31 December 2017 
                                                                                        EUR'000                EUR'000 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 
 Return on investments                                                 4                 56,429                 13,157 
 Other income                                                                             2,004                  1,413 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 Total income and gains                                                                  58,433                 14,570 
 
 Operating expenses                                                    5                (4,533)                (2,154) 
 Investment acquisition costs                                                           (6,170)                (2,524) 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 Operating profit                                                                        47,730                  9,892 
 
 Finance expense                                                       13               (4,166)               (12,464) 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 
 Profit/(loss) for the year/period before tax                                            43,564                (2,572) 
 
 Taxation                                                              6                      -                      - 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 
 Profit/(loss) for the year/period after tax                                             43,564                (2,572) 
 
 Profit/(loss) and total comprehensive income attributable to: 
 Equity holders of the Company                                                           43,564                (2,572) 
 
 Earnings per share 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 Basic and diluted earnings from continuing operations in the 
  year/period (cent)                                                   7                  13.81                 (1.91) 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated Statement of Financial Position

As at 31 December 2018

 
                                                     Note   31 December 2018   31 December 2017 
                                                                     EUR'000            EUR'000 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 Non current assets 
 Investments at fair value through profit or loss     9              757,399            316,796 
--------------------------------------------------  -----  -----------------  ----------------- 
                                                                     757,399            316,796 
 Current assets 
 Receivables                                          11               3,486              2,977 
 Cash and cash equivalents                                             3,036             14,794 
--------------------------------------------------  -----  -----------------  ----------------- 
                                                                       6,522             17,771 
 Current liabilities 
 Payables                                             12             (7,936)            (1,312) 
--------------------------------------------------  -----  -----------------  ----------------- 
 Net current (liabilities)/assets                                    (1,414)             16,459 
 
 Non current liabilities 
 Loans and borrowings                                 13           (362,031)           (71,169) 
 
 Net assets                                                          393,954            262,086 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 Capital and reserves 
 Called up share capital                              15               3,800              2,700 
 Share premium account                                15             120,009             11,958 
 Other distributable reserves                                        229,153            250,000 
 Retained earnings                                                    40,992            (2,572) 
--------------------------------------------------  -----  -----------------  ----------------- 
 Total shareholders' funds                                           393,954            262,086 
--------------------------------------------------  -----  -----------------  ----------------- 
 Net assets per share (cent)                          16               103.7               97.1 
--------------------------------------------------  -----  -----------------  ----------------- 
 

Authorised for issue by the Board on 3 March 2019 and signed on its behalf by:

   Rónán Murphy                                             Kevin McNamara 
   Chairman                                                      Director 

The accompanying notes form an integral part of the consolidated financial statements.

Company Statement of Financial Position

As at 31 December 2018

 
                                                     Note   31 December 2018   31 December 2017 
                                                                     EUR'000            EUR'000 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 Non current assets 
 Investments at fair value through profit or loss    9               392,534            243,324 
--------------------------------------------------  -----  -----------------  ----------------- 
                                                                     392,534            243,324 
 Current assets 
 Receivables                                          11               2,025              5,220 
 Cash and cash equivalents                                               759             14,514 
--------------------------------------------------  -----  -----------------  ----------------- 
                                                                       2,784             19,734 
 
 Current liabilities 
 Payables                                             12             (1,364)              (972) 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 Net current assets                                                    1,420             18,762 
 
 
 Net assets                                                          393,954            262,086 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 Capital and reserves 
 Called up share capital                              15               3,800              2,700 
 Share premium account                                15             120,009             11,958 
 Other distributable reserves                                        229,153            250,000 
 Retained earnings                                                    40,992            (2,572) 
--------------------------------------------------  -----  -----------------  ----------------- 
 Total shareholders' funds                                           393,954            262,086 
--------------------------------------------------  -----  -----------------  ----------------- 
 Net assets per share (cent)                          16               103.7               97.1 
--------------------------------------------------  -----  -----------------  ----------------- 
 
 

The Company has taken advantage of the exemption under section 304 of the Companies Act 2014 and accordingly has not presented a Statement of Comprehensive Income for the Company alone. The profit after tax of the Company for the year was EUR43,563,872 (2017 loss: EUR2,571,891).

Authorised for issue by the Board on 3 March 2019 and signed on its behalf by:

   Rónán Murphy                                             Kevin McNamara 
   Chairman                                                      Director 

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated and Company Statement of Changes in Equity

For the year ended 31 December 2018

 
                                                                            Other 
                                                                    Distributable          Retained 
                              Share capital      Share premium           Reserves          earnings      Total 
                     Note           EUR'000            EUR'000            EUR'000           EUR'000    EUR'000 
------------------  -----  ----------------  -----------------  -----------------  ----------------  --------- 
 Opening net 
  assets 
  attributable to 
  shareholders (1 
  January 2018)                  2,700             11,958            250,000            (2,572)        262,086 
 Issue of share 
  capital             15         1,100               -                  -                  -             1,100 
 Issue of share 
  premium             15           -              110,000               -                  -           110,000 
 Share issue costs    15           -              (1,949)               -                  -           (1,949) 
 Dividends            8            -                 -               (20,847)              -          (20,847) 
 Profit and total 
  comprehensive 
  income for the 
  year                             -                 -                  -               43,564          43,564 
 
 Closing net 
  assets 
  attributable to 
  shareholders                   3,800            120,009            229,153            40,992         393,954 
------------------  -----  ----------------  -----------------  -----------------  ----------------  --------- 
 
 

After taking account of cumulative unrealised gains of EUR54,465,313, the total reserves distributable by way of a dividend as at 31 December 2018 were EUR215,679,690.

For the period ended 31 December 2017

 
                                                                            Other 
                                                                    Distributable         Retained 
                                Share capital     Share premium          Reserves         earnings       Total 
                       Note            EUR000            EUR000           EUR'000          EUR'000     EUR'000 
--------------------  -----  ----------------  ----------------  ----------------  ---------------  ---------- 
 Opening net assets 
 attributable to                      -                 -                 -                -              - 
 shareholders (15 
 February 2017) 
 Issue of share 
  capital               15         2,700               -                 -                -            2,700 
 Issue of share 
  premium               15           -              267,300              -                -           267,300 
 Share issue costs      15           -              (5,342)              -                -           (5,342) 
 Capital reduction                   -             (250,000)          250,000             -              - 
 Loss and total 
  comprehensive 
  income for the 
  period                              -                 -                 -             (2,572)        (2,572) 
 
 Closing net assets 
  attributable to 
  shareholders                     2,700            11,958            250,000          (2,572)        262,086 
--------------------  -----  ----------------  ----------------  ----------------  ---------------  ---------- 
 
 

Other distributable reserves were created through the capital reduction process undertaken during the prior year. This amount was capable of being applied in any manner in which the Company's profits available for distribution, as determined in accordance with the Companies Act 2014, were able to be applied.

After taking account of cumulative unrealised gains of EUR7,701,703, the total reserves distributable by way of a dividend as at 31 December 2017 were EUR239,726,406.

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated Statement of Cash Flows

For the year ended 31 December 2018

 
                                                                           For the year ended   For the period ended 
                                                                    Note     31 December 2018       31 December 2017 
                                                                                      EUR'000                EUR'000 
-----------------------------------------------------------------  -----  -------------------  --------------------- 
 
 Net cash flows from operating activities                            17                 3,298                  3,817 
 
 Cash flows from investing activities 
 Acquisition of investments                                                         (411,312)              (147,401) 
 Investment acquisition costs                                                         (1,933)                (2,524) 
 Repayment of shareholder loan investments                           9                 22,624                  4,076 
-----------------------------------------------------------------  -----  -------------------  --------------------- 
 Net cash flows from investing activities                                           (390,621)              (145,849) 
 
 Cash flows from financing activities 
 Issue of share capital                                              15               111,100                270,000 
 Payment of issue costs                                                               (2,051)                (5,230) 
 Dividends paid                                                      8               (20,847)                      - 
 Amounts drawn down on loan facilities                               13               400,292                223,169 
 Amounts repaid on loan facilities                                   13             (109,430)              (152,000) 
 Finance costs                                                                        (3,499)               (13,174) 
 Repayment of project finance loan                                                          -              (165,939) 
-----------------------------------------------------------------  -----  -------------------  --------------------- 
 Net cash flows from financing activities                                             375,565                156,826 
 
 Net (decrease) / increase in cash and cash equivalents during 
  the year/period                                                                    (11,758)                 14,794 
 
 Cash and cash equivalents at the beginning of the year/period                         14,794                      - 
 
 Cash and cash equivalents at the end of the year/period                                3,036                 14,794 
-----------------------------------------------------------------  -----  -------------------  --------------------- 
 
 

The accompanying notes form an integral part of the consolidated financial statements.

Company Statement of Cash Flows

For the year ended 31 December 2018

 
                                                                             For the year ended   For the period ended 
                                                                      Note     31 December 2018       31 December 2017 
                                                                                        EUR'000                EUR'000 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 
 Net cash flows from operating activities                              17                 1,460                (3,058) 
 
 Cash flows from investing activities 
 Acquisition of investments                                                                   -              (147,401) 
 Loans advanced to Group companies                                     9              (109,384)               (92,223) 
 
 Repayment of loans advanced to Group companies                        9                  6,700                      - 
 Investment acquisition costs                                                             (324)                (2,524) 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 Net cash flows from investing activities                                             (103,008)              (242,148) 
 
 Cash flows from financing activities 
 Issue of share capital                                                15               111,100                270,000 
 Payment of issue costs                                                                 (2,051)                (5,230) 
 Dividends paid                                                        8               (20,847)                      - 
 Amounts drawn down on loan facilities                                                        -                152,000 
 Amounts repaid on loan facilities                                                            -              (152,000) 
 Finance costs                                                                            (409)                (5,050) 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 Net cash flows from financing activities                                                87,793                259,720 
 
 Net (decrease)/increase in cash and cash equivalents during the 
  year/period                                                                          (13,755)                 14,514 
 
 Cash and cash equivalents at the beginning of the year/period                           14,514                      - 
 
 Cash and cash equivalents at the end of the year/period                                    759                 14,514 
-------------------------------------------------------------------  -----  -------------------  --------------------- 
 

The accompanying notes form an integral part of the consolidated financial statements.

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

   1.    Significant accounting policies 

Basis of accounting

The consolidated nancial statements have been prepared in accordance with IFRS to the extent that they have been adopted by the EU and with those parts of the Companies Act 2014 applicable to companies reporting under IFRS.

These consolidated nancial statements are presented in Euro ("EUR") which is the currency of the primary economic environment in which the Group operates and are rounded to the nearest thousand, unless otherwise stated.

The consolidated nancial statements have been prepared on the historical cost basis, as modi ed for the measurement of certain nancial instruments at fair value through pro t or loss. The nancial statements have been prepared on the going concern basis. The principal accounting policies are set out below.

New and amended standards and interpretations applied

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 January 2018 that had a significant effect on the Group or Company's financial statements. Furthermore, none of the amendments to standards that are effective from that date had a significant effect on the financial statements.

IFRS 9 "Financial Instruments" was issued to replace IAS 39 "Financial Instruments: Recognition and Measurement" and became effective for accounting periods beginning on or after 1 January 2018 and has been first adopted in these financial statements. The Group's financial instruments predominantly comprise equity investments held at fair value and financial liabilities held at amortised cost. The accounting treatment for these financial instruments is consistent under both IAS 39 and IFRS 9; therefore the introduction of IFRS 9 has had no impact on the reported results and financial position of the Group.

IFRS 15 'Revenue from Contracts with Customers' was issued and became effective for accounting period beginning on or after 1 January 2018. As the Group's investments are held at fair value through profit or loss and the revenue contracts are held at SPV level, the introduction of IFRS 15 has had no impact on the reported results and financial position of the Group.

New and amended standards and interpretations not applied

At the date of authorisation of these financial statements, IFRS 16 'Leases' was issued but will not become effective until accounting periods beginning on or after 1 January 2019. As the Group's investments are held at fair value through profit or loss and leases are held at SPV level, the introduction of IFRS 16 is not expected to have a material impact on the reported results and financial position of the Group.

Other accounting standard and interpretations have been published and will be mandatory for the Group's accounting periods beginning on or after 1 January 2019 or later periods. The impact of these standards is not expected to be material to the reported results and financial position of the Group.

Accounting for subsidiaries

The Directors have concluded that the Group has all the elements of control as prescribed by IFRS 10 "Consolidated Financial Statements" in relation to all its subsidiaries and that the Company satis es the criteria to be regarded as an investment entity as de ned in IFRS 10, IFRS 12 "Disclosure of Interests in Other Entities" and IAS 27 "Consolidated and Separate Financial Statements". The three essential criteria are such that the entity must:

1. Obtain funds from one or more investors for the purpose of providing these investors with professional investment management services;

2. Commit to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment income or both; and

3. Measure and evaluate the performance of substantially all of its investments on a fair value basis.

In satisfying the second essential criteria, the notion of an investment time frame is critical. An investment entity should not hold its investments indefinitely but should have an exit strategy for their realisation. Although the Company has invested in equity interests in wind farms that have an indefinite life, the underlying wind farm assets that it invests in have an expected life of 30 years. The Company intends to hold these wind farms for the remainder of their useful life to preserve the capital value of the portfolio. However, as the wind farms are expected to have no residual value after their 30 year life, the Directors consider that this demonstrates a clear exit strategy from these investments.

Notwithstanding this, IFRS 10 requires subsidiaries that provide services that relate to the investment entity's investment activities but are not themselves investment entities to be consolidated. Accordingly, the annual financial statements include the consolidated financial statements of the Company and the Holdcos. In respect of these entities, intra-Group balances and any unrealised gains arising from intra-Group transactions are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated unless the costs cannot be recovered. The consolidated financial statements of subsidiaries that are included in the consolidated financial statements are included from the date that control commences until the dates that control ceases.

Subsidiaries are therefore measured at fair value through pro t or loss, in accordance with IFRS 13 "Fair Value Measurement" and IFRS 9 as permitted by IAS 27. The nancial support provided by the Group to its unconsolidated subsidiaries is disclosed in note 9.

Consolidation

Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls an entity when the Company has power over the entity, is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are derecognised from the date that control ceases.

The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary (for accounting purposes) is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Company recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets.

The following table outlines the consolidated entities.

 
 
                                                      Registered   Owner-ship %       Country of 
 Investment                 Date of Control               Office                   Incorporation   Place of Business 
------------------------  -----------------  -------------------  -------------  ---------------  ------------------ 
 GR Wind Farms 1 Limited       9 March 2017   Riverside One, Sir           100%          Ireland             Ireland 
                                                 John Rogerson's 
                                                  Quay, Dublin 2 
 
 GR Wind Farms 2 Limited   30 November 2017   Riverside One, Sir           100%          Ireland             Ireland 
                                                 John Rogerson's 
                                                  Quay, Dublin 2 
------------------------  -----------------  -------------------  -------------  ---------------  ------------------ 
 

Based on control, the results of the Holdcos are consolidated into the Consolidated Financial Statements.

Acquisition-related costs are expensed as incurred.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Company's accounting policies. During the year, no such adjustments have been made, given all subsidiaries have uniform accounting policies.

Acquisition method

The acquisition method is used for all business combinations.

Steps in applying the acquisition method are:

   --    Identification of the acquirer. 
   --    Determination of the acquisition date. 

-- Recognition and measurement of the identifiable assets acquired, the liabilities assumed and any non-controlling interest (NCI, formerly called minority interest) in the acquiree.

   --    Recognition and measurement of goodwill or a gain from a bargain purchase. 

The guidance in IFRS 10 "Consolidated Financial Statements" is used to identify an acquirer in a business combination, i.e. the entity that obtains control of the acquiree. An acquirer considers all pertinent facts and circumstances when determining the acquisition date, i.e. the date on which it obtains control of the acquiree. The acquisition date may be a date that is earlier or later than the closing date

Financial instruments

Financial assets and nancial liabilities are recognised in the Group's Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and nancial liabilities are only offset and the net amount reported in the Consolidated Statement of Financial Position when there is a currently enforceable legal right to offset the recognised amounts and the Group intends to settle on a net basis or realise the asset and liability simultaneously.

At 31 December 2018 and 2017, the carrying amounts of cash and cash equivalents, receivables, payables and borrowings re ected in the nancial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the original instruments and their expected realisation. The fair value of advances and other balances with related parties which are short-term or repayable on demand is equivalent to their carrying amount.

Financial assets

The classi cation of nancial assets at initial recognition depends on the purpose for which the nancial asset was acquired and its characteristics.

All nancial assets are initially recognised at fair value. All purchases of nancial assets are recorded at the date on which the Group and the Company became party to the contractual requirements of the nancial asset.

The Group's and Company's nancial assets comprise of investments held at fair value through pro t or loss and loans and receivables. The Group and Company holds its investments at fair value which had previously been designated at fair value through profit or loss in accordance with IAS 39 as they were managed on a fair value basis and their performance was monitored on this basis. On adoption of IFRS 9 on 1 January 2018, these investments are mandatorily classified as fair value through profit or loss, as the contractual cash flows are not solely principal and interest and therefore, are measured at fair value through profit or loss.

Loans and receivables (2017)

These assets are non-derivative nancial assets with xed or determinable payments that are not quoted in an active market. They principally comprise cash and trade and other receivables and they are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Transaction costs are recognised in the Consolidated Statement of Comprehensive Income as incurred.

The Group and Company assesses whether there is any objective evidence that nancial assets are impaired at the end of each reporting period. If any such evidence exists, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash ows, discounted at the original effective interest rate. The amount of any impairment is recognised in the Consolidated Statement of Comprehensive Income.

Loans and receivables at amortised cost (2018)

Impairment provisions for loans and receivables are recognised based on a forward looking expected credit loss model. All financial assets assessed under this model are immaterial to the financial statements.

Investments at Fair Value Through Pro t or Loss

Investments are designated upon initial recognition as held at fair value through pro t or loss. Movements in fair value are recognised in the Consolidated Statement of Comprehensive Income during the reporting period. As shareholder loan investments form part of a managed portfolio of assets whose performance is evaluated on a fair value basis, loan investments are designated at fair value in line with equity investments.

The Company's loan and equity investments in Holdcos are held at fair value through pro t or loss. Gains or losses resulting from the movement in fair value are recognised in the Company's Statement of Comprehensive Income at each valuation point.

Investments are initially recognised at cost, being the fair value of consideration given. Transaction costs are recognised in the Consolidated Statement of Comprehensive Income as incurred.

Financial assets are recognised/derecognised at the date of the purchase/disposal.

Fair value is de ned as the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. Fair value is calculated on an unlevered, discounted cash ow basis in accordance with IFRS 13 and IFRS 9. Gains or losses resulting from the revaluation of investments are recognised in the Consolidated Statement of Comprehensive Income.

De-recognition of financial assets

A financial asset (in whole or in part) is derecognised either:

   --    When the Group has transferred substantially all the risks and rewards of ownership; or 

-- When it has neither transferred or retained substantially all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or

   --    When the contractual right to receive cash flow has expired. 

Financial liabilities

Financial liabilities are classi ed according to the substance of the contractual agreements entered into.

All nancial liabilities are initially recognised at fair value net of transaction costs incurred. All nancial liabilities are recorded on the date on which the Group becomes party to the contractual requirements of the nancial liability.

All loans and borrowings are initially recognised at cost, being fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Loan balances as at the year end have not been discounted to re ect amortised cost, as the amounts are not materially different from the outstanding balances.

The Group's other nancial liabilities measured at amortised cost include trade and other payables and other short term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

A nancial liability (in whole or in part) is derecognised when the Group has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on de-recognition is taken to the Consolidated Statement of Comprehensive Income.

Finance expenses

Borrowing costs are recognised in the Consolidated Statement of Comprehensive Income in the period to which they relate on an accruals basis using the effective interest rate method.

Share capital

Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the Company after the deduction of all liabilities. The Company's ordinary shares are classi ed as equity instruments.

Share issue costs of the Company directly attributable to the issue and listing of shares are charged to the share premium account. Share issue costs include those incurred in connection with the placing and admission which include fees payable under a placing agreement, legal costs and any other applicable expenses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, deposits held on call with banks and other short-term highly liquid deposits with original maturities of 3 months or less, that are readily convertible to a known amount of cash and are subject to an insigni cant risk of changes in value.

Foreign currencies

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Consolidated Statement of Comprehensive Income.

Dividends

Dividends payable are recognised as distributions in the consolidated financial statements when the Company's obligation to make payment has been established.

Income recognition

Interest income on shareholder loan investments is recognised when the Group's entitlement to receive payment is established.

Other income is accounted for on an accruals basis.

Gains or losses resulting from the movement in fair value of the Group's and Company's investments held at fair value through pro t and loss are recognised in the Consolidated Statement of Comprehensive Income at each valuation point.

Expenses

Expenses are accounted for on an accruals basis.

Taxation

Under the current system of taxation in Ireland, the Company is liable to taxation on its operations in Ireland.

Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively enacted at the date of the Consolidated Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the nancial statements and the corresponding tax bases used in the computation of taxable pro t. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable pro ts will be available against which deductible temporary differences can be utilised.

Deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax pro t nor the accounting pro t. Deferred tax liabilities are recognised for taxable temporary differences arising on investments, except where the Company is able to control the timing of the reversal of the difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off tax assets against tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. Deferred tax assets and liabilities are not discounted.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, as a whole.

The key measure of performance used by the Board to assess the Group's performance and to allocate resources is the total return on the Group's net assets, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the consolidated financial statements.

For management purposes, the Group is organised into one main operating segment, which invests in wind farm assets.

All of the Group's income is generated within Ireland. All of the Group's non-current assets are located in Ireland.

   2.    Critical accounting judgements, estimates and assumptions 

The preparation of the nancial statements requires the application of estimates and assumptions which may affect the results reported in the nancial statements. Estimates, by their nature, are based on judgement and available information.

Classification of an investment entity

One area of judgement relates to the Company's classi cation as an investment entity as de ned in IFRS 10, IFRS 12 and IAS 27. IFRS 10 requires that a Company has to ful l 3 criteria to be an investment entity:

-- Obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;

-- Commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

-- Measures and evaluates the performance of substantially all of its investments on a fair value basis.

IFRS 10 also determines that an investment entity would have the following typical characteristics:

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

An entity that does not display all of the above characteristics could, nevertheless, meet the de nition of an investment entity.

The Directors have concluded that the Company meets the de nition of an investment entity.

Fair value of investments

The key assumptions that have a signi cant impact on the carrying value of investments that are valued by reference to the discounted value of future cash ows are the useful life of the assets, the discount factors, the level of wind resource, the rate of in ation, the price at which the power and associated bene ts can be sold and the amount of electricity the assets are expected to produce. A sensitivity analysis of these assumptions is included in note 9.

Useful lives are based on the Investment Manager's estimates of the period over which the assets will generate revenue which are periodically reviewed for continued appropriateness. The standard assumption used for the useful life of a wind farm is 30 years (2017: 25 years). The actual useful life may be a shorter or longer period depending on the actual operating conditions experienced by the asset.

The discount factors are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different value. The discount factors applied to the cash ows are reviewed annually by the Investment Manager to ensure they are at the appropriate level. The Investment Manager will take into consideration market transactions, where of similar nature, when considering changes to the discount factors used.

The revenues and expenditure of the investee companies are frequently, partly or wholly subject to indexation and an assumption is made that in ation will increase at a long-term rate.

The price at which the output from the revenue generating assets is sold is a factor of both wholesale electricity prices and the revenue received from the Government support regime. Future power prices are estimated using external third party forecasts which take the form of specialist consultancy reports. The future power price assumptions are reviewed as and when these forecasts are updated. There is an inherent uncertainty in future wholesale electricity price projection.

Speci cally commissioned external reports are used to estimate the expected electrical output from the wind farm assets taking into account the expected average wind speed at each location and generation data from historical operation. The actual electrical output may differ considerably from that estimated in such a report mainly due to the variability of actual wind to that modelled in any one period. Assumptions around electrical output will be reviewed only if there is good reason to suggest there has been a material change in this expectation.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the Consolidated Financial Statements.

   3.    Investment management fees 

Under the terms of the Investment Management Agreement, the Investment Manager is entitled to a management fee from the Company, which is calculated quarterly in arrears in accordance with the Investment Management Agreement.

The Fee shall be calculated in respect of each quarter and in each case based upon the NAV:

-- On that part of the NAV up to and including EUR1 billion, an amount equal to 0.25 per cent. of such part of the NAV; and

-- On that part of the NAV in excess of EUR1 billion, an amount equal to 0.2 per cent. of such part of the NAV.

Investment management fees paid or accrued in the year ended 31 December 2018 and the period to 31 December 2017 were as follows:

 
                               For the year ended   For the period ended 
                                 31 December 2018       31 December 2017 
                                          EUR'000                EUR'000 
----------------------------  -------------------  --------------------- 
 Investment management fees                 3,035                  1,147 
----------------------------  -------------------  --------------------- 
                                            3,035                  1,147 
----------------------------  -------------------  --------------------- 
 

As at 31 December 2018, EUR928,073 is payable in relation to investment management fees (2017: EUR659,478).

   4.    Return on investments 
 
                                                              For the year ended   For the period ended 
                                                                31 December 2018       31 December 2017 
                                                                         EUR'000                EUR'000 
-----------------------------------------------------------  -------------------  --------------------- 
 
 Interest on shareholder loan investment (1)                               9,665                  5,455 
 Unrealised movement in fair value of investments (note 9)                46,764                  7,702 
-----------------------------------------------------------  -------------------  --------------------- 
                                                                          56,429                 13,157 
-----------------------------------------------------------  -------------------  --------------------- 
 

(1) Includes EUR3,992k (2017: EUR1,855k) of unrealised Shareholder loan interest.

   5.    Operating expenses 
 
                                                       For the year ended   For the period ended 
                                                         31 December 2018       31 December 2017 
                                                                  EUR'000                EUR'000 
----------------------------------------------------  -------------------  --------------------- 
 
 Investment management fees (note 3)                                3,035                  1,147 
 Other expenses                                                     1,035                    792 
 Non-executive Directors' remuneration                                200                    108 
 Group and SPV administration fees                                    194                     66 
 Fees to the Company's Auditor: 
 
    for audit of the statutory financial statements                    66                     35 
    for other services                                                  3                      6 
----------------------------------------------------  -------------------  --------------------- 
                                                                    4,533                  2,154 
----------------------------------------------------  -------------------  --------------------- 
 

The fees to the Company's auditor include EUR3,000 payable in relation to a limited review of the Interim Report during the year.

   6.    Taxation 
 
             For the year ended   For the period ended 
               31 December 2018       31 December 2017 
                        EUR'000                EUR'000 
----------  -------------------  --------------------- 
 Taxation                     -                      - 
----------  -------------------  --------------------- 
                              -                      - 
----------  -------------------  --------------------- 
 
 
 
 

The tax reconciliation is explained below.

 
                                                                             For the year ended   For the period ended 
                                                                               31 December 2018       31 December 2017 
                                                                                        EUR'000                EUR'000 
--------------------------------------------------------------------------  -------------------  --------------------- 
 
 Profit/(loss) for the year/period before taxation                                       43,564                (2,572) 
--------------------------------------------------------------------------  -------------------  --------------------- 
 
 Profit/(loss) for the year/period multiplied by the standard rate of 
  corporation tax of 12.5 
  per cent.                                                                               5,446                  (322) 
 
 Fair value movements (not subject to taxation)                                         (5,846)                  (963) 
 Expenditure not deductible for tax purposes                                                812                    921 
 
 (Payment)/receipt of tax losses from unconsolidated subsidiaries                         (412)                    364 
--------------------------------------------------------------------------  -------------------  --------------------- 
                                                                                              -                      - 
--------------------------------------------------------------------------  -------------------  --------------------- 
 
   7.    Earnings per share 
 
                                                                             For the year ended   For the period ended 
                                                                               31 December 2018       31 December 2017 
--------------------------------------------------------------------------  -------------------  --------------------- 
 
 Profit/(loss) attributable to equity holders of the Company - EUR'000                   43,564                (2,572) 
 Weighted average number of ordinary shares in issue                                315,506,849            134,581,270 
--------------------------------------------------------------------------  -------------------  --------------------- 
 Basic and diluted earnings from continuing operations in the year/period 
  (cent)                                                                                  13.81                 (1.91) 
--------------------------------------------------------------------------  -------------------  --------------------- 
 
   8.   Dividends declared with respect to the year 
 
 Interim dividends paid during the year ended 31 December 2018    Dividend per       Total 
                                                                    Share cent    Dividend 
---------------------------------------------------------------  -------------  ---------- 
 With respect to the period from IPO to 31 December 2017                  2.61       7,047 
 With respect to the quarter ended 31 March 2018                          1.50       4,050 
 With respect to the quarter ended 30 June 2018                           1.50       4,050 
 With respect to the quarter ended 30 September 2018                      1.50       5,700 
---------------------------------------------------------------  -------------  ---------- 
                                                                          7.11      20,847 
---------------------------------------------------------------  -------------  ---------- 
 
 
 Interim dividends declared after 31 December 2018 and not accrued in the year    Dividend per       Total 
                                                                                    Share cent    Dividend 
-------------------------------------------------------------------------------  -------------  ---------- 
 With respect to the quarter ended 31 December 2018                                       1.50       5,700 
-------------------------------------------------------------------------------  -------------  ---------- 
                                                                                          1.50       5,700 
-------------------------------------------------------------------------------  -------------  ---------- 
 

On 31 January 2019, the Company announced a dividend of 1.50 cent per share with respect to the quarter ended 31 December 2018, bringing the total dividend declared with respect to the year to 31 December 2018 to 6.00 cent per share. The record date for the dividend was 8 February 2019 and the payment date was 28 February 2019.

   9.    Investments at fair value through profit or loss 
 
 Group as at 31 December 2018                                    Loans   Equity interest      Total 
                                                               EUR'000           EUR'000    EUR'000 
-----------------------------------------------------------  ---------  ----------------  --------- 
 
 Opening balance                                               171,651           145,145    316,796 
 Additions                                                     265,997           146,474    412,471 
 Repayment of shareholder loan investments                    (22,624)                 -   (22,624) 
 
 Unrealised movement in fair value of investments (note 4)       3,992            46,764     50,756 
-----------------------------------------------------------  ---------  ----------------  --------- 
                                                               419,016           338,383    757,399 
-----------------------------------------------------------  ---------  ----------------  --------- 
 
 
 Group as at 31 December 2017                                   Loans   Equity interest     Total 
                                                              EUR'000           EUR'000   EUR'000 
-----------------------------------------------------------  --------  ----------------  -------- 
 
 Opening balance                                                    -                 -         - 
 Additions                                                    173,872           144,270   318,142 
 Adjustment on consolidation                                        -           (6,827)   (6,827) 
 Repayment of shareholder loan investments                    (4,076)                 -   (4,076) 
 Unrealised movement in fair value of investments (note 4)      1,855             7,702     9,557 
-----------------------------------------------------------  --------  ----------------  -------- 
                                                              171,651           145,145   316,796 
-----------------------------------------------------------  --------  ----------------  -------- 
 

The unrealised movement in fair value of investments of the Group during the year/period were made up as follows:

 
                                                             For the year ended   For the period ended 
                                                               31 December 2018       31 December 2017 
                                                                        EUR'000                EUR'000 
----------------------------------------------------------  -------------------  --------------------- 
 
 Increase/(decrease) in DCF valuation of investments and 
  other movements                                                        22,715                (5,452) 
 
 Repayment of shareholder loan investments                               22,624                  4,076 
 Movement in cash balances of SPVs                                        (753)                  8,409 
  Investment acquisition costs                                            6,170                  2,524 
----------------------------------------------------------  -------------------  --------------------- 
                                                                         50,756                  9,557 
----------------------------------------------------------  -------------------  --------------------- 
 Company as at 31 December 2018                                           Loans        Equity interest     Total 
                                                                        EUR'000                EUR'000   EUR'000 
----------------------------------------------------------  -------------------  ---------------------  -------- 
 
 Opening balance                                                        213,581                 29,743   243,324 
 Loans advanced to Holdco (note 19)                                     109,384                      -   109,384 
 Loans repaid by Holdco (note 19)                                       (6,700)                      -   (6,700) 
 Unrealised movement in fair value of investments                             -                 46,526    46,526 
----------------------------------------------------------  -------------------  ---------------------  -------- 
                                                                        316,265                 76,269   392,534 
----------------------------------------------------------  -------------------  ---------------------  -------- 
 Company as at 31 December 2017                                           Loans        Equity interest     Total 
                                                                        EUR'000                EUR'000   EUR'000 
----------------------------------------------------------  -------------------  ---------------------  -------- 
 
 Opening balance                                                              -                      -         - 
 Additions                                                              121,358                 26,043   147,401 
 Loans advanced to Holdco (note 19)                                      92,223                      -    92,223 
 Unrealised movement in fair value of investments                             -                  3,700     3,700 
----------------------------------------------------------  -------------------  ---------------------  -------- 
                                                                        213,581                 29,743   243,324 
----------------------------------------------------------  -------------------  ---------------------  -------- 
 
 

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy which the financial assets or financial liabilities are recognised is on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following 3 levels:

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

-- Level 2 - inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

-- Level 3 - inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

The determination of what constitutes 'observable' requires significant judgement by the Group. The Group 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.

The only financial instruments held at fair value are the investments held by the Group in the SPVs, which are fair valued at each reporting date. The Group's investments have been classified within level 3 as the investments are not traded and contain unobservable inputs. The Company's investments are all considered to be level 3 assets. As the fair value of the Company's equity and loan investments in the Holdcos is ultimately determined by the underlying fair values of the SPV investments, the Company's sensitivity analysis of reasonably possible alternative input assumptions is the same as for the Group.

Due to the nature of the investments, they are always expected to be classified as level 3. There have been no transfers between levels during the year ended 31 December 2018.

Any transfers between the levels would be accounted for on the last day of each financial period.

The Investment Manager carries out the asset valuations, which form part of the NAV calculation. These asset valuations are based on discounted cash flow methodology in line with IPEV Valuation Guidelines and adjusted where appropriate, given the special nature of wind farm investments.

Valuations are derived using a discounted cashflow methodology in line with IPEV Valuation Guidelines and take into account, inter alia, the following:

   --    due diligence findings where relevant; 
   --    the terms of any material contracts including PPAs; 
   --    asset performance; 
   --    power price forecast from a leading market consultant; and 
   --    the economic, taxation or regulatory environment. 

The DCF valuation of the Group's investments represents the largest component of GAV and the key sensitivities are considered to be the discount rate used in the DCF valuation and long-term assumptions in relation to inflation, energy yield, power prices, and asset life.

The DCF valuation is produced by discounting the individual wind farm cashflows on an unlevered basis. The equivalent levered discount rate would be approximately 2 per cent. higher than the blended portfolio discount rate.

For the year end DCF valuation, an upgraded discounting methodology has been applied. Previously, each wind farm's cashflows were discounted at a single discount rate, irrespective of their nature. Different discount rates are now applied, tailored to the nature of the underlying cashflows; for example, one discount rate for fixed REFIT cashflows and a higher discount rate for merchant power cashflows.

In addition to (but separate from) the upgraded discounting methodology, the asset life assumption used in the year end DCF valuation has been increased from 25 to 30 years, following a third party technical assessment of the portfolio. The technical asset life for many wind farms exceeds 30 years. Furthermore, the vast majority of wind farm SPVs benefit from lease arrangements which are significantly in excess of 30 years. Appropriate assumptions have been made in relation to the continued good management of the assets, operating costs and other factors. A 30 year asset life assumption is a more appropriate assumption to be used to determine the fair value of the portfolio.

Amending the asset life and associated assumptions increased NAV per share by 6.0 cent. It also means that the blended portfolio discount rate has increased as a result of including a higher proportion of higher discount rate merchant power cashflows in years 26-30.

A variance of +/- 0.25 per cent. is considered to be a reasonable range of alternative assumptions for discount rate.

The base case long-term CPI assumption is 2.00 per cent.

Base case energy yield assumptions are P50 (50 per cent. probability of exceedance over a 10 year period) forecasts produced by expert consultants based on long-term wind data and operational history. The P90 (90 per cent. probability of exceedance over a 10 year period) and P10 (10 per cent. probability of exceedance over a 10 year period) sensitivities reflect the future variability of wind and the uncertainty associated with the long-term data source being representative of the long-term mean. Given their basis on long-term operating data, it is not anticipated that base case energy yield assumptions will be adjusted (other than any wind energy true-ups with compensating purchase price adjustments).

Long-term power price forecasts are provided by a leading market consultant, updated quarterly and adjusted by the Investment Manager where more conservative assumptions are considered appropriate. Base case real power prices increase from approximately EUR59/MWh (2030) to approximately EUR67/MWh (2040). The sensitivity analysis assumes a 10 per cent. increase or decrease in power prices relative to the base case for every year of the asset life, which is relatively extreme. The sensitivity analysis reflects the period beyond the initial REFIT period whereby the portfolio benefits from an inflation-linked floor price under the REFIT regime.

Sensitivity analysis

The fair value of the Group's investments is EUR757,398,839 (2017: EUR316,796,436). The following analysis is provided to illustrate the sensitivity of the fair value of investments to a change in an individual input, while all other variables remain constant. The Board considers these changes in inputs to be within reasonable expected ranges. This is not intended to imply the likelihood of change or that possible changes in value would be restricted to this range.

 
                                                                     Change in fair value of 
 Input             Base case                      Change in input                investments   Change in NAV per share 
----------------  ---------------------------  ------------------  -------------------------  ------------------------ 
                                                                                     EUR'000                      cent 
 
 Discount rate     6 - 7 per cent.               + 0.25 per cent.                   (17,647)                     (4.6) 
                                                 - 0.25 per cent.                     18,269                       4.8 
 
 Energy yield      P50                                10 year P90                   (47,092)                    (12.4) 
                                                      10 year P10                     46,835                      12.3 
 
                   Forecast by leading 
 Power price        consultant                     - 10 per cent.                   (32,050)                     (8.4) 
                                                   + 10 per cent.                     31,987                       8.4 
 
 Inflation rate    2.00 per cent.                 - 0.5 per cent.                   (25,247)                     (6.6) 
                                                  + 0.5 per cent.                     26,960                       7.1 
  ---------------------------------------------------------------  -------------------------  ------------------------ 
 

The sensitivities above are assumed to be independent of each other. Combined sensitivities are not presented.

The base case asset life assumption is 30 years. An asset life sensitivity is not presented owing to the difficulty in accurately quantifying various associated valuation drivers, including: ability to extend the lease term; ability to extend planning permission; commercial terms attaching to any lease extension; operating and maintenance costs associated with longer life; decommissioning costs; and scrap value.

   10.    Unconsolidated subsidiaries, associates and joint ventures 

The following table shows subsidiaries of the Group. As the Company is regarded as an Investment Entity as referred to in note 1, these subsidiaries have not been consolidated in the preparation of the consolidated financial statements:

 
 
                                                                                 Registered   Ownership Interest as at 
 Investment                           Place of Business                              Office           31 December 2018 
----------------------------------  -------------------  ----------------------------------  ------------------------- 
 
                                                                    Riverside One, Sir John 
 Ballybane Windfarms Limited                    Ireland           Rogerson's Quay, Dublin 2                       100% 
 
 Cloosh Valley Wind Farm Holdings                            6(th) Floor, South Bank House, 
  DAC                                           Ireland             Barrow Street, Dublin 4                        50% 
 
                                                                    Riverside One, Sir John 
 Lisdowney Wind Farm Limited                    Ireland           Rogerson's Quay, Dublin 2                       100% 
 
                                                                    Riverside One, Sir John 
 Killhills Windfarm Limited                     Ireland           Rogerson's Quay, Dublin 2                       100% 
 
                                                                    Riverside One, Sir John 
 Knockacummer Wind Farm Limited                 Ireland           Rogerson's Quay, Dublin 2                       100% 
 
 Knockalour Wind Farm Holdings                                      Riverside One, Sir John 
  Limited                                       Ireland           Rogerson's Quay, Dublin 2                       100% 
 
                                                                    Riverside One, Sir John 
 Kostroma Holdings Limited (1)                  Ireland           Rogerson's Quay, Dublin 2                       100% 
 
 Monaincha Sigatoka Wind Holdings                                   Riverside One, Sir John 
  DAC (2)                                       Ireland           Rogerson's Quay, Dublin 2                       100% 
 
                                                               Two Gateway, East Wall Road, 
 Raheenleagh Power DAC                          Ireland                            Dublin 3                        50% 
 
                                                                       Dublin Road, Newtown 
 Sliabh Bawn Wind Holdings DAC                  Ireland           mountkennedy, Co. Wicklow                        25% 
 
                                                                    Riverside One, Sir John 
 Tullynamoyle Wind Farm II Limited              Ireland           Rogerson's Quay, Dublin 2                       100% 
 

(1) The Group's investment in Glanaruddery is held through Kostroma Holdings Limited

(2) The Group's investments in Monaincha and Garrenereagh are held through Monaincha Sigatoka Wind Holdings DAC.

Security deposits and guarantees provided by the Group on behalf of its investments are as follows:

 
 
 Provider of security     Investment    Beneficiary    Nature     Purpose    Amount 
                                                                            EUR'000 
    ---------------------------------------------------------------------  -------- 
 The Company               Killhills            AIB      Cash    Planning       100 
----------------------  ------------  -------------  --------  ----------  -------- 
                                                                                100 
    ---------------------------------------------------------------------  -------- 
 
 

The fair value of cash security deposits are as disclosed in the table above.

   11.    Receivables 
 
                                   31 December 2018   31 December 2017 
 Group                                      EUR'000            EUR'000 
--------------------------------  -----------------  ----------------- 
 
 Accrued income                               1,980              1,133 
 Deferred tax asset                           1,237              1,237 
 VAT receivable                                 190                547 
 Sundry receivables                              47                  - 
 Prepayments                                     32                 60 
                                              3,486              2,977 
--------------------------------  -----------------  ----------------- 
                                   31 December 2018   31 December 2017 
 Company                                    EUR'000            EUR'000 
--------------------------------  -----------------  ----------------- 
 
 Due from other group companies               1,955              1,678 
 Prepayments                                     32                 60 
 Accrued income                                  25              3,077 
 VAT receivable                                  13                405 
                                              2,025              5,220 
--------------------------------  -----------------  ----------------- 
 
   12.    Payables 
 
                                       31 December 2018   31 December 2017 
 Group                                          EUR'000            EUR'000 
------------------------------------  -----------------  ----------------- 
 
 Acquisition costs                                5,421                  - 
 Investment management fees payable                 928                659 
 Other payables                                     849                455 
 Loan interest payable                              536                 80 
 Other finance costs payable                        188                  5 
 Share issue costs payable                           14                113 
                                                  7,936              1,312 
------------------------------------  -----------------  ----------------- 
 
 
                                       31 December 2018   31 December 2017 
 Company                                        EUR'000            EUR'000 
------------------------------------  -----------------  ----------------- 
 
 Investment management fees payable                 928                659 
 Other payables                                     422                195 
 Share issue costs payable                           14                113 
 Other finance costs payable                          -                  5 
------------------------------------  -----------------  ----------------- 
                                                  1,364                972 
------------------------------------  -----------------  ----------------- 
 
   13.    Loans and borrowings 
 
                                     Loan       Total 
  Group at 31 December 2018       EUR'000     EUR'000 
----------------------------  -----------  ---------- 
 
 Opening balance                   71,169      71,169 
 Revolving Credit Facility 
   Drawdowns                      400,292     400,292 
   Repayments                   (109,430)   (109,430) 
 Closing balance                  362,031     362,031 
----------------------------  -----------  ---------- 
 

The Company did not hold any loans or borrowings at 31 December 2018 (2017: EURnil).

 
                                                                 Loan       Swaps        Total 
  Group at 31 December 2017                                   EUR'000     EUR'000      EUR'000 
------------------------------------------------  -------------------  ----------  ----------- 
 
 Opening balance                                                    -           -            - 
 Loans acquired on acquisition                                165,939       4,802      170,741 
 Project Finance Facility 
   Repayments                                               (165,939)           -    (165,939) 
   Break of swap                                                    -     (4,802)      (4,802) 
 Fixed rate and profit participating loan notes 
   Drawdowns                                                  152,000           -      152,000 
   Repayments                                               (152,000)           -    (152,000) 
 Revolving Credit Facility 
   Drawdowns                                                   71,169           -       71,169 
 Closing balance                                               71,169           -       71,169 
------------------------------------------------  -------------------  ----------  ----------- 
 
                                                   For the year ended     For the period ended 
                                                     31 December 2018         31 December 2017 
                                                              EUR'000                  EUR'000 
------------------------------------------------  -------------------  ----------------------- 
 
 Loan interest                                                  2,551                    1,927 
 Commitment fees                                                  819                       34 
  Professional fees                                               656                       20 
 Facility arrangement fees                                        140                    1,224 
 Swap break costs                                                   -                    3,585 
 Fixed rate loan note interest                                      -                    3,353 
 Other finance costs                                                -                    2,321 
------------------------------------------------  -------------------  ----------------------- 
 Finance expense                                                4,166                   12,464 
------------------------------------------------  -------------------  ----------------------- 
 
 

The loan balance as at 31 December 2018 and 31 December 2017 has not been adjusted to reflect amortised cost, as the amount is not materially different from the outstanding balances.

In relation to non-current loans and borrowings, the Directors are of the view that the current market interest rate is not significantly different to the respective instrument's contractual interest rates, therefore the fair value of the non-current loans and borrowings at the end of the reporting periods is not significantly different from their carrying amounts.

As at 31 December 2018, the Group had a revolving credit facility with AIB, BNP Paribas, Commerzbank, RBC and Santander. In November 2018, the Group increased the capacity of the facility from EUR250,000,000 to EUR380,000,000. The facility has a margin of 1.8 per cent. plus EURIBOR (at zero per cent. floor) per annum with a final maturity date of 19 December 2020. The Group is obliged to pay a quarterly commitment fee of 0.63 per cent. per annum of the undrawn commitment available under the facility. Lenders' security consists of comprehensive debentures incorporating a fixed and floating charge over the Group including a charge over the Group's bank accounts and shares in the underlying investments.

As at 31 December 2018, the principal balance of the facility was EUR362,030,526 (2017: EUR71,169,498), accrued interest was EUR536,179 (2017: EUR38,607) and the outstanding commitment fee was EUR28,135 (2017: EUR33,953).

   14.       Contingencies & Commitments 

At the time of acquisition, wind farms which had less than 12 months' operational data may have a wind energy true-up applied, whereby the purchase price for these wind farms may be adjusted so that it is based on a 2 year operational record, once operational data has become available.

The following 3 wind energy true-ups remain outstanding and the maximum adjustment under each are as follows: Glanaruddery EUR2,600,000; Lisdowney EUR1,583,000; and Knocknalour EUR489,000.

   15.       Share capital - ordinary shares 

At 31 December 2018, the Company had authorised share capital of 1,000,000,000 ordinary shares of EUR0.01 each.

 
                                                        Number of shares 
 Date                     Issued and fully paid                   issued   Share capital   Share premium     Total 
                                                                                 EUR'000         EUR'000   EUR'000 
 ------------------------                          ---------------------  --------------  --------------  -------- 
 
 1 January 2018            Opening balance                   270,000,000           2,700          11,958    14,658 
 
                           2017 IPO share issue 
 Period to 30 June 2018     costs                                      -               -             (7)       (7) 
 
 2 August 2018            Issued and paid                    110,000,000           1,100         110,000   111,100 
 
 2 August 2018            Less share issue costs                       -               -         (1,942)   (1,942) 
 
 31 December 2018                                            380,000,000           3,800         120,009   123,809 
-------------------------------------------------  ---------------------  --------------  --------------  -------- 
 
 
 
 Date                Issued and fully paid         Number of shares issued   Share capital   Share premium       Total 
                                                                                   EUR'000         EUR'000     EUR'000 
 -----------------------------------------------  ------------------------  --------------  --------------  ---------- 
 
 15 February 2017    Initial share capital (1)                           2               -               -           - 
 
 29 May 2017         Further issue of shares(1)                     24,998              25               -          25 
 25 July 2017        Redeemed at IPO(2)                           (25,000)            (25)               -        (25) 
 25 July 2017        Issued and paid(3)                        270,000,000           2,700         267,300     270,000 
 25 July 2017        Less share issue costs                              -               -         (5,342)     (5,342) 
 10 November 2017    Capital reduction                                   -               -       (250,000)   (250,000) 
 31 December 2017                                              270,000,000           2,700          11,958      14,658 
------------------------------------------------  ------------------------  --------------  --------------  ---------- 
 

(1) Ordinary shares of EUR1 each

(2) Ordinary shares of EUR1 each were converted into redeemable shares and then redeemed at par out of the proceeds of the issue of the ordinary shares of EUR0.01 each and cancelled

(3) Ordinary shares of EUR0.01 each

Shareholders are entitled to all dividends paid by the Company and, on a winding up, provided the Company has satisfied all of its liabilities, the Shareholders are entitled to all of the residual assets of the Company.

   16.       Net assets per share 
 
 Group and Company                  31 December 2018  31 December 2017 
---------------------------------  ----------------- 
 
Net assets - EUR'000                         393,954           262,086 
Number of ordinary shares issued         380,000,000       270,000,000 
Total net assets - cent                        103.7              97.1 
 

17. Reconciliation of operating profit for the year/period to net cash from operating activities

 
                                                 For the year ended  For the period ended 
Group                                              31 December 2018      31 December 2017 
                                                            EUR'000               EUR'000 
 
Operating profit for the year/period                         47,730                 9,892 
Adjustments for: 
Movement in fair value of investments (note 9)             (46,764)               (7,702) 
Investment acquisition costs                                  6,170                 2,524 
Increase in receivables                                     (4,501)               (1,739) 
Increase in payables                                            663                   842 
Net cash flows from operating activities                      3,298                 3,817 
 
 
                                                 For the year ended  For the period ended 
Company                                            31 December 2018      31 December 2017 
                                                            EUR'000               EUR'000 
 
Operating profit for the year/period                         43,971                 2,478 
Adjustments for: 
Movement in fair value of investments (note 9)             (46,526)               (3,700) 
Investment acquisition costs                                    324                 2,524 
Decrease/(increase) in receivables                            3,195               (5,220) 
Increase in payables                                            496                   860 
Net cash flows from operating activities                      1,460               (3,058) 
 
   18.       Financial risk management 

The Investment Manager and the Administrator report to the Board on a quarterly basis and provide information to the Board which allows it to monitor and manage financial risks relating to its operations. The Group's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk.

The Group's market risk is managed by the Investment Manager in accordance with the policies and procedures in place. The Group's overall market positions are monitored on a quarterly basis by the Board of Directors.

Price risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Group will fluctuate. Investments are measured at fair value through profit or loss and are valued on an unlevered, discounted cash flow basis. Therefore, the value of these investments will be (amongst other risk factors) a function of the discounted value of their expected cash flows and, as such, will vary with movements in interest rates and competition for such assets. Note 9 details sensitivity analysis on the impact of changes to the inputs used on the fair value of the investments.

Interest rate risk

The Group's most significant exposure to interest rate risk is due to floating interest rates required to service external borrowings through the revolving credit facility. An increase of 0.5 per cent. represents the Investment Manager's assessment of a reasonably possible change in interest rates. Should the EURIBOR rate increase from 0 per cent. to 0.5 per cent., the annual interest due on the facility would increase by EUR1,810,153. The Investment Manager regularly monitors interest rates to ensure the Group has adequate provisions in place in the event of significant fluctuations.

In accordance with the Company's investment policy, it may enter into hedging transactions in relation to interest rates for the purposes of efficient financial risk management. The Company will not enter into derivative transactions for speculative purposes.

The Directors consider shareholder loan investments to be similar in nature to equity investments and, as these loans bear interest at a fixed rate, they do not carry an interest rate risk.

The Group's interest and non-interest bearing assets and liabilities as at 31 December 2018 are summarised below:

 
                                          Interest bearing  Non-interest 
Group                            Fixed rate  floating rate       bearing      Total 
                                    EUR'000        EUR'000       EUR'000    EUR'000 
Assets 
Cash at bank                              -          3,036             -      3,036 
Other receivables (note 11)               -              -         2,217      2,217 
Investments (note 9)                328,758              -       428,641    757,399 
                                    328,758          3,036       430,858    762,652 
 
Liabilities 
Other payables (note 12)                  -              -       (7,936)    (7,936) 
Loans and borrowings (note 13)            -      (362,031)             -  (362,031) 
                                          -      (362,031)       (7,936)  (369,967) 
 

The Group's interest and non-interest bearing assets and liabilities as at 31 December 2017 are summarised below:

 
                                          Interest bearing  Non-interest 
Group                            Fixed rate  floating rate       bearing     Total 
                                    EUR'000        EUR'000       EUR'000   EUR'000 
Assets 
Cash at bank                              -         14,794             -    14,794 
Other receivables (note 11)               -              -         1,680     1,680 
Investments (note 9)                 79,752              -       237,044   316,796 
                                     79,752         14,794       238,724   333,270 
 
Liabilities 
Other payables (note 12)                  -              -       (1,312)   (1,312) 
Loans and borrowings (note 13)            -       (71,169)             -  (71,169) 
                                          -       (71,169)       (1,312)  (72,481) 
 

The Company's interest and non-interest bearing assets and liabilities as at 31 December 2018 are summarised below:

 
                                       Interest bearing 
Company                       Fixed rate  floating rate   Non - interest bearing    Total 
                                 EUR'000        EUR'000                  EUR'000  EUR'000 
Assets 
Cash at bank                           -            759                        -      759 
Other receivables (note 11)            -              -                    1,993    1,993 
Investments (note 9)                   -              -                  392,534  392,534 
                                       -            759                  394,527  395,286 
Liabilities 
Other payables (note 12)               -              -                  (1,364)  (1,364) 
                                       -              -                  (1,364)  (1,364) 
 

The Company's interest and non-interest bearing assets and liabilities as at 31 December 2017 are summarised below:

 
                                       Interest bearing 
Company                       Fixed rate  floating rate   Non - interest bearing    Total 
                                 EUR'000        EUR'000                  EUR'000  EUR'000 
Assets 
Cash at bank                           -         14,514                        -   14,514 
Other receivables (note 11)            -              -                    5,160    5,160 
Investments (note 9)                   -              -                  243,324  243,324 
                                       -         14,514                  248,484  262,998 
Liabilities 
Other payables (note 12)               -              -                    (972)    (972) 
                                       -              -                    (972)    (972) 
 

Foreign currency risk

Foreign currency risk is defined as the risk that the fair values of future cash flows will fluctuate because of changes in foreign exchange rates. The Group's financial assets and liabilities are denominated in EUR and substantially all of its revenues and expenses are in EUR. The Group is not considered to be materially exposed to foreign currency risk.

Credit risk

Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Group is exposed to credit risk in respect of other receivables and cash at bank. The Group minimises its credit risk exposure by dealing with financial institutions with investment grade credit ratings. The Company has advanced loans to Holdco, however does not consider these loans a risk as they are intra-group.

The table below details the Group's maximum exposure to credit risk:

 
                              31 December 2018  31 December 2017 
 Group                                 EUR'000           EUR'000 
 
Other receivables (note 11)              2,217             1,680 
Cash at bank                             3,036            14,794 
Loan investments (note 9)              419,016           171,651 
                                       424,269           188,125 
 

The table below details the Company's maximum exposure to credit risk:

 
                              31 December 2018  31 December 2017 
Company                                EUR'000           EUR'000 
 
Other receivables (note 11)              1,993             5,160 
Cash at bank                               759            14,514 
Loan investments (note 9)              316,265           213,581 
                                       319,017           233,255 
 

The tables below shows the cash balances of the Group and the Standard & Poor's credit rating for each counterparty as at 31 December 2018 and 31 December 2017:

 
                  Rating  31 December 2018 
Group                              EUR'000 
Northern Trust        A+                63 
AIB                 BBB+             2,973 
                                     3,036 
                  Rating  31 December 2017 
Group                              EUR'000 
Northern Trust        A+             8,775 
AIB                 BBB-             5,739 
HSBC                 AA-               280 
                                    14,794 
 

The table below shows the cash balances of the Company and the Standard & Poor's credit rating for each counterparty as at 31 December 2018 and 31 December 2017:

 
                  Rating  31 December 2018 
Company                            EUR'000 
Northern Trust        A+                63 
AIB                 BBB+               696 
                                       759 
                  Rating  31 December 2017 
Company                            EUR'000 
Northern Trust        A+             8,775 
AIB                 BBB-             5,739 
                                    14,514 
 

Liquidity risk

Liquidity risk is the risk that the Group and the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Manager and the Board continuously monitor forecast and actual cash flows from operating, financing and investing activities to consider payment of dividends, repayment of the Company's outstanding debt or further investing activities.

As disclosed in note 14, the purchase price of wind farms acquired with less than 12 months' operational data may be adjusted subject to a wind energy true-up based on a 2 years' operational record once the operational data has become available.

The following tables detail the Group's expected maturity for its financial assets (excluding equity) and liabilities together with the contractual undiscounted cash flow amounts as at 31 December 2018 and 31 December 2017:

 
Group - 
 31 December 2018             Less than 1 year  1 - 5 years  5+ years      Total 
                                       EUR'000      EUR'000   EUR'000    EUR'000 
Assets 
Other receivables (note 11)              2,217            -         -      2,217 
Cash at bank                             3,036            -         -      3,036 
Loan investments                        16,201       48,418   419,016    483,635 
 
Liabilities 
Other payables (note 12)               (7,936)            -         -    (7,936) 
Loan and borrowings                    (6,517)    (375,064)         -  (381,581) 
                                         7,001    (326,646)   419,016     99,371 
 
 
Group - 
 31 December 2017             Less than 1 year  1 - 5 years  5+ years     Total 
                                       EUR'000      EUR'000   EUR'000   EUR'000 
Assets 
Other receivables (note 11)              1,680            -         -     1,680 
Cash at bank                            14,794            -         -    14,794 
Loan investments                        12,874       51,495   171,651   236,020 
 
Liabilities 
Other payables (note 12)               (1,312)            -         -   (1,312) 
Loan and borrowings                    (1,281)     (73,731)         -  (75,012) 
                                        26,755     (22,236)   171,651   176,170 
 

The following tables detail the Company's expected maturity for its financial assets (excluding equity) and liabilities together with the contractual undiscounted cash flow amounts as at 31 December 2018 and 31 December 2017:

 
Company - 31 December 2018   Less than 1 year  1 - 5 years  5+ years    Total 
                                      EUR'000      EUR'000   EUR'000  EUR'000 
Assets 
Other receivables                       1,993            -         -    1,993 
Cash at bank                              759            -         -      759 
Loan investments                            -            -   316,265  316,265 
 
Liabilities 
Other payables                        (1,364)            -         -  (1,364) 
                                        1,388            -   316,265  317,653 
Company - 31 December 2017   Less than 1 year  1 - 5 years  5+ years    Total 
                                      EUR'000      EUR'000   EUR'000  EUR'000 
Assets 
Other receivables                       5,160            -         -    5,160 
Cash at bank                           14,514            -         -   14,514 
Loan investments                            -            -   213,581  213,581 
 
Liabilities 
Other payables                          (972)            -         -    (972) 
                                       18,702            -   213,581  232,283 
 

The Group and Company will use cash flow generation, equity raisings, debt refinancing or disposal of assets to manage liabilities as they fall due in the longer term.

Capital risk management

The Company considers its capital to comprise ordinary share capital, distributable reserves and retained earnings. The Company is not subject to any externally imposed capital requirements.

The Group's and the Company's primary capital management objectives are to ensure the sustainability of its capital to support continuing operations, meet its financial obligations and allow for growth opportunities. Generally, acquisitions are anticipated to be funded by a combination of current cash, debt and equity.

   19.       Related party transactions 

On 3 August 2018, the Company advanced an interest-free loan to Holdco of EUR109,383,821 (2017: EUR123,320,730) and Holdco made repayments of EUR6,700,000 (2017: EURnil).

Holdco has a Management and Operating Agreement with Knockacummer, Killhills and Ballybane in relation to the management, operation and maintenance of the SPV. Holdco receives a fee of EUR20,000 per annum from each SPV. Amounts due to Holdco in respect to these fees at 31 December 2018 is EUR32,843 (2017: EURnil).

During the year, the Company received management fees of EUR829,096 from Knockacummer and EUR304,278 from Killhills. These fees were in relation to the additional portfolio management costs incurred in the period 9 March 2017 to 31 December 2017 by the Company as well as additional third party fees for in relation to consultancy of the budgeting and performance reviews of both SPVs.

The table below shows the Group's shareholder loans with the wind farm investments.

 
 
Entity             Loans at  Loans advanced  Loan repayments      Loans at          Accrued        Total 
                  1 January     in the year                    31 December         interest 
                       2018                                           2018   at 31 December 
                                                                                       2018 
Knockacummer    137,325,706               -     (10,155,393)   127,170,313        1,693,770  128,864,083 
Monaincha                 -      73,376,121                -    73,376,121           79,490   73,455,611 
Glanaruddery              -      54,978,938      (2,850,000)    52,128,938          570,824   52,699,762 
Ballybane                 -      48,250,131                -    48,250,131          287,490   48,537,621 
Killhills        34,325,452               -      (6,168,626)    28,156,826          574,345   28,731,171 
Tullynamoyle 
 II                       -      17,613,693        (650,000)    16,963,693          219,850   17,183,543 
Kostroma                  -      16,472,547                -    16,472,547          277,551   16,750,098 
Garranereagh              -      14,797,669                -    14,797,669           16,031   14,813,700 
Lisdowney                 -      14,276,291      (1,550,000)    12,726,291          174,774   12,901,065 
Sliabh Bawn               -       9,824,432                -     9,824,432                -    9,824,432 
Knocknalour               -       8,597,710      (1,250,000)     7,347,710           98,295    7,446,005 
Cloosh Valley             -       5,790,667                -     5,790,667                -    5,790,667 
Raheenleagh               -       2,018,536                -     2,018,536                -    2,018,536 
                171,651,158     265,996,735     (22,624,019)   415,023,874        3,992,420  419,016,294 
 

During the year, there were no dividends receivable from the Group's investments.

   20.       Ultimate controlling party 

In the opinion of the Directors, on the basis of the shareholdings advised to them, the Company has no ultimate controlling party.

   21.       Subsequent events 

On 31 January 2019, the Company announced a dividend of EUR5.7 million, equivalent to 1.5 cent per share with respect to the quarter ended 31 December 2018, bringing total dividend declared with respect to the year to 31 December 2018 to 6.00 cent per share.

Company Information

 
 
  Directors (all non executive)             Registered Company Number 
Rónán Murphy                      598470 
Emer Gilvarry 
Kevin McNamara 
                                            Registered Office 
                                            Riverside One 
Investment Manager                          Sir John Rogerson's Quay 
Greencoat Capital LLP                       Dublin 2 
3(rd) Floor, Burdett House 
15-16 Buckingham Street 
London WC2N 6DU                             Registered Auditor 
                                            BDO 
                                            Beaux Lane House 
Company Secretary                           Mercer Street Lower 
Andrea Finegan                              Dublin 2 
3(rd) Floor, Burdett House 
15-16 Buckingham Street 
London WC2N 6DU                             Legal Advisers 
                                            McCann Fitzgerald 
                                            Riverside One 
Administrator                               Sir John Rogerson's Quay 
Northern Trust International Fund           Dublin 2 
Administration Services (Ireland) Limited 
Georges Court 
54-62 Townsend Street                       Euronext Growth Advisor, NOMAD and Broker 
Dublin 2                                    J&E Davy 
                                            Davy House 
                                            49 Dawson Street 
Depositary                                  Dublin 2 
Northern Trust International Fiduciary 
Services (Ireland) Limited 
Georges Court                               Account Banks 
54-62 Townsend Street                       Allied Irish Banks plc. 
Dublin 2                                    40/41 Westmoreland Street 
                                            Dublin 2 
 
Registrar                                   Northern Trust International Fiduciary 
Computershare Investor Services             Services (Ireland) Limited 
(Ireland) Limited                           Georges Court 
Heron House, Corrig Road                    56-62 Townsend Street 
Sandyford Industrial Estate                 Dublin 2 
Dublin 18 
 
 
 

Supplementary Information (unaudited)

Disclosure required under the Alternative Investment Fund Managers Directive ("AIFMD") for annual reports of alternative investment funds ("AIFs")

Alternative Investment Fund Manager's Directive

Under the Alternative Investment Fund Manager Regulations 2013 (as amended) the Company is an Irish AIF and the Investment Manager is a full scope UK AIFM.

Northern Trust International Fiduciary Services (Ireland) Limited provide depositary services under the AIFMD. Northern Trust International Fund Administration Services (Ireland) Limited provide accounting and administration services to the Company.

The AIFMD outlines the required information which has to be made available to investors prior to investing in an AIF and directs that material changes to this information be disclosed in the Annual Report of the AIF. There were no material changes in the year.

All information required to be disclosed under the AIFMD is either disclosed in this Annual Report or within a schedule of disclosures on the Company's website at www.greencoat-renewables.com.

The information in this paragraph relates to the Investment Manager, the AIFM, and its subsidiary company providing services to the AIFM and it does not relate to the Company. The total amount of remuneration paid by the Investment Manager, in its capacity as AIFM, to its 39 staff for the financial year ending 31 December 2018 was GBP6.3m, consisting of GBP5.2m fixed and GBP1.1m variable remuneration. The aggregate amount of remuneration for the 6 staff members of the Investment Manager constituting senior management and those staff whose actions have a material impact on the risk profile of the Company was GBP0.9m.

The Investment Manager covers the potential professional liability risks resulting from its activities by holding professional indemnity insurance in accordance with Article 9(7)(b) of AIFMD.

Defined Terms

Admission Document means the Admission Document of the Company published on 25 July 2017

Aggregate Group Debt means the Group's proportionate share of outstanding third party debt.

AIB means Allied Irish Bank plc

AIC means the Association of Investment Companies

AIC Code of Corporate Governance sets out a framework of best practice in respect of the governance of investment companies. It has been endorsed by the Financial Reporting Council as an alternative means for our members to meet their obligations in relation to the UK Corporate Governance Code

AIC Guide means the AIC's Corporate Governance Guide for Investment Companies

AIF means Alternative Investment Funds (as defined in AIFMD)

AIFM means Alternative Investment Fund Manager (as defined in AIFMD)

AIFMD means Alternative Investment Fund Managers Directive

AGM means Annual General Meeting of the Company

Ballybane means Ballybane Windfarms Limited

BDO means the Company's Auditor as at the reporting date

Brexit mean the withdrawal of the United Kingdom from the European Union

BNP Paribas means BNP Paribas Fortis N.V / S.A

Board means the Directors of the Company

Cloosh Valley means Cloosh Valley Wind Farm Holdings DAC and Cloosh Valley Wind Farm DAC

Company means Greencoat Renewables PLC

CBI means the Central Bank of Ireland

CPI means Consumer Price Index

DCF means Discounted Cash Flow

DNB means DNB Bank ASA

ESM means Enterprise Securities Market of the Irish Stock Exchange

EU means the European Union

Euronext means the Euronext Dublin, formerly the Irish Stock Exchange

EURIBOR means the Euro Interbank Offered Rate

Eurozone means the area comprising 19 of the 28 Member States which have adopted the euro as their common currency and sole legal tender

FRC means Financial Reporting Council

GAV means Gross Asset Value as defined in the Admission Document

Garranereagh means Sigatoka Limited

Glanaruddery means Glanaruddery Windfarms Limited and Glanaruddery Energy Supply Limited

Group means Greencoat Renewables PLC, GR Wind Farms 1 Limited and GR Wind Farms 2 Limited

Holdco means GR Wind Farms 1 Limited

Holdco2 means GR Wind Farms 2 Limited

Holdcos means Holdco and Holdco2

IAS means International Accounting Standards

IFRS means International Financial Reporting Standards

Investment Management Agreement means the agreement between the Company and the Investment Manager

Investment Manager means Greencoat Capital LLP

IPEV means the International Private Equity and Venture Capital Valuation Guidelines

IPO means Initial Public Offering

Irish Corporate Governance Annex is a corporate governance annex addressed to companies with a primary equity listing on the Main Securities Market of Euronext

IRR means internal rate of return

I-SEM means the Integrated Single Electricity Market, which is a new wholesale electricity market arrangement for Ireland and Northern Ireland

Killhills means Killhills WindFarm Limited

Knockacummer means Knockacummer Wind Farm Limited

Knockalour means Knockalour Wind Farm Holdings Limited and Knockalour Wind Farm Limited

Kostroma Holdings means Kostroma Holdings Limited

Lisdowney means Lisdowney Wind Farm Limited

Monaincha means Monaincha Wind Farm Limited

NAV means Net Asset Value as defined in the Admission Document

NAV per Share means the Net Asset Value per Ordinary Share

NOMAD means a company that has been approved as a nominated advisor for the Alternative Investment Market (AIM), by Euronext Dublin and London Stock Exchange

PPA means Power Purchase Agreement entered into by the Group's wind farms

PSO means Public Support Obligation

Raheenleagh means Raheenleagh Power DAC

RBC means Royal Bank of Canada

REFIT means Renewable Energy Feed-In Tariff

RESS means Renewable Energy Support Scheme

Review Section means the front end review section of this report (including but not limited to the Chairman's Statement and the Investment Manager's Report)

Santander means Abbey National Treasury Services Plc (trading as Santander Global Corporate Banking)

SEM means the Single Electricity Market, which is the wholesale electricity market operating in the Republic of Ireland and Northern Ireland

Sliabh Bawn means Sliabh Bawn Holding DAC, Sliabh Bawn Supply DAC and Sliabh Bawn Power DAC

Société Générale means Société Générale, London Branch

Solar PV means a solar photovoltaic system, which is a power system designed to supply usable solar power by means of photovoltaics.

SPVs means the Special Purpose Vehicles, which hold the Group's investment portfolio of underlying operating wind farms

TSR means Total Shareholder Return

Tullynamoyle II means Tullynamoyle Wind Farm II Limited

UK means United Kingdom of Great Britain and Northern Ireland

UK Code means UK Corporate Governance Code issued by the FRC

Forward Looking Statements and other Important Information

This document may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "plans", "projects", "will", "explore" or "should" or, in each case, their negative or other variations or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions.

These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this document and may include, but are not limited to, statements regarding the intentions, beliefs or current expectations of the Company, the Directors and/or the Investment Manager concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.

By their nature, forward-looking statements involve risks and uncertainties because they relate to future events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by, or described in or suggested by, the forward-looking statements contained in this document.

In addition, even if actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies, are consistent with any forward looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments of the Company to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, global renewable energy market conditions, industry trends, competition, changes in law or regulation, changes in taxation regimes, the availability and cost of capital, currency fluctuations, changes in its business strategy, political and economic uncertainty. Any forward-looking statements herein speak only at the date of this document.

As a result, you are cautioned not to place any reliance on any such forward-looking statements and neither the Company nor any other person accepts responsibility for the accuracy of such statements.

Subject to their legal and regulatory obligations, the Company, the Directors and the Investment Manager expressly disclaim any obligations to update or revise any forward- looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

In addition, this document may include target figures for future financial periods. Any such figures are targets only and are not forecasts. Nothing in this document should be construed as a profit forecast or a profit estimate.

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

FR GMGGFLFDGLZM

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P: V:gb D:20190424 06:08:32