Iona EnvIronmEntal vct PlC

Transcription

1 Iona EnvIronmEntal vct PlC HALF YEARLY REPORT & ACCOUNTS 31 MARCH 2012

2

3 Half Year Report Contents Half Yearly Review Investment Objectives and Strategy Financial Highlights Chairman s Statement Investment Manager s Review Business Review and Responsibility Statement Independent Review Report Accounts Income Statement Balance Sheet Cash Flow Statement Reconciliation of Movements In Shareholders Funds Notes to the Accounts Additional Information 14 Contact Details References in this Report to Iona Environmental VCT Plc have been abbreviated to the Company or the Fund. References to Iona Capital Limited have been abbreviated to Iona Capital. The unaudited half yearly financial statements for the six months ended 31 March 2012 do not constitute statutory accounts within the meaning Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended 30 September 2011 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies; the independent auditors report on those financial statements was unqualified, did not contain an emphasis of matter paragraph, and did not contain any statement under section 498(2) or 498(3) of the Companies Act Half Year Report 2012 Iona Environmental VCT Plc 1

4 Half Year Report Investment Objectives and Strategy Investment Objectives The Company s objective is to maximise tax free capital gains and income to Shareholders from dividends and capital distributions by investing the Company s funds in: a portfolio of Qualifying Investments, primarily in UK unquoted companies specialising in environmental infrastructure focusing on organic waste recycling in the UK; lower risk Qualifying Companies which utilise existing technologies and which are supported by commercial supply agreements; and in fixed income funds, securities and cash deposits within the requirements imposed on venture capital trusts. Investment Strategy The Company will seek to invest in investee companies that it believes are relatively de-risked and will provide shareholders with a reliable source of tax free income. Companies will generally reflect the following criteria: significant influence over investee companies the Company will ensure that it has significant influence over the management of the business of the investee companies, in particular, through rights contained in the relevant investment agreements and other shareholder and constitutional documents; and significant proportion of investments in fixed income funds, securities and cash deposits a significant proportion of funds will be invested by the Investment Manager in this way. After the initial three year period, the objective is to keep approximately 10% of the Company s funds in such investments to reduce the overall risk profile of each portfolio. Gearing It is not intended that the Company will borrow. However, the Company will retain the power to borrow up to 25% of its net asset value. a well-defined business plan and ability to demonstrate strong demand for its products and services; products or services which are cash generative; objectives of management and shareholders which are similarly aligned; adequate capital resources or access to further resources to achieve the targets set out in its business plan; access to high calibre management teams; and be companies where the Investment Manager believes there are reasonable prospects of an exit, either through a trade sale or flotation in the medium term. Risk Diversification The structure of the Company s fund and its investment strategy, have been designed to reduce risk as much as possible. The main risk management features include: portfolio of investee companies the Company will invest in at least 5 different companies, thereby reducing the potential impact of poor performance by any individual investment; establishment of relationships with operating partners the Company will establish such relationships to source a pipeline of IVC and AD and intermediary technology plants for investee companies; monitoring of investee companies the Investment Manager will closely monitor the performance of all the investments made by the Company in order to identify any issues and to enable necessary corrective action to be taken; 2 Iona Environmental VCT Plc Half Year Report 2012

5 Half Year Report Financial Highlights Six months ended Six months ended Year ended Period covered 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Net Assets 4.7m 4.9m 4.8m Net asset value per Ordinary share 85.6p 88.7p 87.7p Net asset value per A share 1.8p 1.8p 1.8p Dividend paid per Ordinary share 0.0p 0.0p 0.0p Dividend paid per A share 0.0p 0.0p 0.0p Cumulative return to shareholders since launch Dividends paid per Ordinary share 0.0p 0.0p 0.0p Dividends paid per A share 0.0p 0.0p 0.0p Net asset value plus dividends paid per Ordinary share 85.6p 88.7p 87.7p Net asset value plus dividends paid per A share 1.8p 1.8p 1.8p Total asset value per Ordinary and A Share 87.4p 90.5p 89.5p Half Year Report 2012 Iona Environmental VCT Plc 3

6 Half Year Report Chairman s Statement Overview Since my last statement in the 2011 Annual Report I can report progress towards fully investing the Company s funds in profitable projects which we anticipate will achieve a minimum return to the Company of 10%. In fact, at the point of writing this overview, we expect that our first investment in Rosewood Energy Limited will be paying an 11% running yield into the Company from August of this year. Other potential investments are now at advanced stages, the detail of which is covered in our Investment Manager s Review. David Eades Chairman 28 May 2012 We note with frustration that many of the projects we have looked to invest in have suffered from delays due to government procurement timetables stretching beyond what is, in our view, a reasonable period. When this is combined with local political issues and planning delays it is not only very frustrating as an investor but also for the local environmentally-aware resident, who would like to send food waste to an Anaerobic Digestion (AD) facility where it can become a fuel to produce electricity. Nevertheless, we are proud to be at the vanguard of these projects within the local authority market, working with various partners including of course BiogenGreenfinch. Despite our frustrations, the Board continues to be of the opinion that the energy from waste sector presents attractive investment opportunities. We are pleased to note from our Investment Manager that dealflow is increasing. We welcome the stimulus the sector has received from a number of different funding sources including most recently the announcement by Lord Rothschild s Investment Trust to commit as part of a number of high profile investors, 65m into a new AD energy venture. Many of you contributed to our B share offer which is now closed for the 2011/12 period. We thank both existing and new investors for your contribution. I am pleased to inform you that each Director has subscribed to the offer, as well as the senior management team from the Investment Manager. It is the Board s intention to ensure that the additional funding raised is applied pari passu with that from the Ordinary shares and that when the funds are fully invested, the Board will seek shareholder approval to merge the two classes of shares. Finally, we are seeking to appoint a third independent Director to the Company and hope to be in a position to make an announcement over the summer period. As a Board we would like to broaden our experience in capital markets, as well as provide sufficient flexibility with regard to appointments to the various Board committees that are necessary for best practice corporate governance. Specifically, the new Director will be expected to sit on the Remuneration and Audit committees. 4 Iona Environmental VCT Plc Half Year Report 2012

7 Half Year Report Investment Manager s Review Iona Capital continues to make progress with the investment pipeline and although many of the proposed investments have taken much longer to crystallize than originally envisaged, Iona Capital believes the Company is on track to be fully invested. This means the Company will invest in approximately 5 projects. Highlights to date have been the Company s first investment in Rosewood Energy Limited, a 50:50 Joint venture arrangement with the Company s partner BiogenGreenfinch Limited. The Company is eagerly anticipating the final installation of the Jenbacher Gas engines by June/July this year and electricity production will follow shortly afterwards. This means that the Company can expect to be receiving a dividend income from Rosewood this year, which will enable the Company to consider a dividend payment for the current year. The total monies committed to Rosewood to date are approximately 720,000. Iona Capital is also pleased to inform you that the Company s partnership with Biogen in the Welsh Government s AD procurement program has been more successful to date than that of any other bidder within this program. The Company has achieved preferred bidder status in both the North West and North East Hubs (announced 25 April 2012) which it hopes will be the first two projects to achieve a financial close in Wales as part of this program. mechanism which is designed to encourage the take-up of renewable electricity by the Regional Electricity Companies. They operate separately from FiTs and are not affected by the recent Government proposals. Whilst, as Iona Capital has already indicated, the main effect of the change in the FiT regime will be felt by the large solar power projects, the Government did emphasise that it was keen to see a step-up in the use of AD technology. Iona Capital does not believe that the change in the FiT regime will affect the Company s investment strategy. It should be noted that the Rosewood Energy investment will benefit from ROCs. The market is increasingly buoyant and the capital requirement from the market is significantly ahead of the Company s capital base, which should enable the Company to choose from a range of high quality projects. Iona Capital Limited 28 May 2012 Still in Wales, the Company is working with a management team to develop a project that will take commercially produced food waste and convert this into energy, both heat and electricity. With an initial investment of approximately 500,000, this project is expected to close in the summer. Iona Capital is not, however, entirely focussed on Biogen or Wales and it has a number of strategic partners with which it is working closely in the broader UK market. Whilst Iona Capital has established a close relationship with Biogen, as already mentioned it has been working with other industry operators and assessing other commercial projects. The current potential deal pipeline includes over 10 specific AD projects covering both commercial and municipal food waste. The majority of the focus to date has been on the waste to energy opportunity; however a number of agricultural schemes which use animal manure or a crop such as maize as the feedstock are currently seeking funding. The AD market is therefore expected not only to see significant growth from the utilisation of organic municipal and commercial waste but also from the agricultural market where it originally evolved. Shareholders may well be aware of the Department of Energy and Climate Change (DECC) consultation document which considers tariff changes to the Feed in Tariff (FiT) arrangements. However, the proposed banding reductions are targeted at solar and wind tariffs and the proposed changes to AD are minimal. It should of course be noted that the Company s investment commitment in Rosewood qualifies for the Renewable Obligation Certificates (ROCs) mechanism. ROCs are a market-based pricing Half Year Report 2012 Iona Environmental VCT Plc 5

8 Half Year Report Business Review and Responsibility Statement Current and Future Development A review of the main features for the six months to 31 March 2012 is contained in the Chairman s Statement and the Investment Manager s Review on pages 4 and 5. The Board regularly reviews the development and strategic direction of the Company. The Board s main focus continues to be on the Company s long-term investment return. Attention is paid to the integrity and success of an investment process and on factors which may have an impact on this approach. Due regard is given to the marketing and promotion of the Company, including effective communication with shareholders and other external parties. A detailed review of performance during the six months to 31 March 2012 is contained in the Investment Manager s Review on page 5. Risk Management Since the Company is seeking to invest in a particular industry sector, there is a significant level of in-built risk. There are also a number of specific risks associated with the investment strategy of the Company as set out in page 6 of the 2011 Prospectus which include site identification, acquisition and planning permission risk, construction risk, plant performance and technology risk, contract risk, electricity price risk, renewable obligation scheme risk and regulatory risk. These risks could have a materially negative impact on any investment made by the Company. However, to provide a level of diversification, the Company is restricted to investing no more than 15% of the value of its total assets at the time of investment in any one individual qualifying investment or non-qualifying investment. The key risks facing the Company include Market Risk, Interest Rate Risk, Credit Risk and Liquidity Risk as further detailed in Note 16 of the Notes to the Accounts for the period ended 30 September In addition the Company is also focused on the following key risks: Macroeconomic risks In addition to the specific risks set out above, the performance of the Company s underlying investment portfolio is also influenced by a combination of economic growth, interest rates, the availability of well-priced debt finance, the number of active trade and private equity buyers and the general level of merger and acquisition activity. All of these factors have an impact on the Company s ability to invest and on the Company s ability to exit from its underlying portfolio or on the levels of profitability achieved on exit. Long-term strategic risk The Company is subject to the risk that its long-term strategy and its level of performance fails to meet the expectations of its shareholders. The Company constantly monitors the level of discount of its Net Asset Value to the share prices of its Ordinary Shares and A Shares and considers the most effective methodologies to keep this at a minimum including a share buyback policy. In addition the Company regularly reviews its Objectives and Investment Strategy in light of prevailing investor sentiment to ensure the Company remains attractive to its shareholders. Government policy and regulation risk The Company carries on business as a VCT under section 274 of the Income Tax Act Continuation of this status is subject to the Company directing its affairs in line with the relevant requirements of the legislation. Anticipated and actual changes in government policy and related tax treatment of VCTs are closely monitored, as are other changes which could affect results of operations or financial position. Iona Capital Limited ( Iona Capital ) is an authorised person under the Financial Services and Markets Act 2000 and regulated by the FSA. Changes to the regulatory framework under which Iona Capital operates are closely monitored by Iona Capital and reported upon as necessary by Iona Capital to the Company. Investment risks The Company operates in a very competitive market. Changes in the number of market participants, the availability of funds within the market, the pricing of assets, or in the ability of Iona Capital to access deals on a proprietary basis could have a significant effect on the Company s competitive position and on the sustainability of returns. In order to source and execute good quality investments the Company is primarily dependent on Iona Capital having the ability to attract and retain people with the requisite investment experience and whose compensation is in line with the Company s objectives. Once invested, the performance of the Company s portfolio is dependent upon a range of factors. These include but are not limited to: (i) the quality of the initial investment decision described above; (ii) the ability of the investee company to execute successfully its business strategy; and (iii) actual outcomes against the key assumptions underlying the investee company s financial projections. Any one of these factors could have an impact on the valuation of an investee company and upon the Company s ability to make a profitable exit from the investment within the desired timeframe. A rigorous process is put in place by Iona Capital for managing the relationship with each investee company for the period to anticipated realisation. This includes regular asset reviews and, in many cases, board representation by one of Iona Capital s executives. The Company reviews both the performance of Iona Capital and its incentive arrangements on a regular basis to ensure that both are appropriate to the objectives of the Company. 6 Iona Environmental VCT Plc Half Year Report 2012

9 Half Year Report Business Review and Responsibility Statement Operational risks The Company s investment management, custody of assets and all administrative systems are provided or arranged for the Company by Iona Capital. Therefore, the Company is exposed to a range of operational risks at Iona Capital which can arise from inadequate or failed processes, people and systems or from external factors affecting these. The Company s system of internal control mainly comprises the monitoring of the services provided by Iona Capital, including the operational controls established by them to ensure they meet the Company s business objectives, as discussed further in the Corporate Governance Statement on page 14 of the financial statements for the period ended 30 September Responsibility Statement of the Directors in respect of the Half Yearly Financial Report We confirm to the best of our knowledge: The condensed set of financial statements has been prepared in accordance with the Statement Half Yearly Financial Reports issued by the UK Accounting Standards Board; The Half Yearly Business Review includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. By order of the Board of Directors D Eades Chairman 55 Grosvenor Street London W1K 3HY 28 May 2012 Half Year Report 2012 Iona Environmental VCT Plc 7

10 Half Year Report Independent Review Report Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2012, set out on pages 9 to 13. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with guidance contained in the International Standard on Review Engagements 2410 (UK and Ireland), Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume any responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2012 is not prepared, in all material respects, in accordance with the Accounting Standards Board Statement Half- Yearly Financial Reports and the Disclosure and Transparency Rules of the United Kingdom s Financial Services Authority. Moore Stephens LLP 150 Aldersgate Street, London, EC1A 4AB 28 May 2012 Directors Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom s Financial Services Authority. As disclosed in the accounting policies the annual financial statements of the company are prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Statement Half-Yearly Financial Reports issued by the Accounting Standards Board. Our Responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion. 8 Iona Environmental VCT Plc Half Year Report 2012

11 Half Year Report Income Statement For the six months ended For the six months ended For the year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes Income Investment administration fees 7 (32) - (32) Share based payment (145) (145) - (145) (145) Other expenses (90) - (90) (61) - (61) (110) - (110) (122) - (122) (61) (145) (206) (110) (145) (255) Loss on Ordinary Activities before interest and taxation (117) - (117) (58) (145) (203) (107) (145) (252) Interest Loss on Ordinary Activities before taxation (117) - (117) (58) (145) (203) (107) (145) (252) Tax on loss on ordinary activities Loss on Ordinary Activities after taxation (117) - (117) (58) (145) (203) (107) (145) (252) Basic and Diluted Return to Shareholders per Ordinary Share 2 (2.1p) - (2.1p) (1.1p) (2.7p) (3.8p) (1.9p) (2.6p) (4.5p) Basic and Diluted Return to Shareholders per A Share 2 (0.0p) - (0.0p) (0.0p) (0.1p) (0.1p) (0.0p) (0.1p) (0.1p) The total column of this statement represents the Company s Income Statement prepared in accordance with UK GAAP. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. The notes on page13form part of these financial statements. Half Year Report 2012 Iona Environmental VCT Plc 9

12 Half Year Report Balance Sheet As at As at As at 31 March March September 2011 Notes (Unaudited) (Unaudited) (Audited) Fixed Assets Investments held at fair value Current Assets Debtors Other Investments Cash at bank 5,067 4,898 4,798 5,163 4,939 4,898 Current Liabilities Creditors: amounts falling due within one year 8 (729) (42) (63) (729) (42) (63) Net Current Assets 4,434 4,897 4,835 Total Assets less current liabilities 4,718 4,897 4,835 Net Assets 4,718 4,897 4,835 Capital and Reserves Called up share capital Share Premium 4,989 4,989 4,989 Capital Reserve Revenue reserve (284) (118) (167) Total Equity Shareholders Funds 4,718 4,897 4,835 Net Asset Value per Ordinary Share 85.6p 88.7p 87.7p Net Asset Value per A Share 1.8p 1.8p 1.8p As at As at As at 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Number of Ordinary Shares in issue at end of period 5,345,499 5,345,497 5,345,499 Number of A Shares in issue at end of period 8,018,246 8,018,246 8,018, Iona Environmental VCT Plc Half Year Report 2012

13 Half Year Report Cash Flow Statement Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Net Cash Inflow/(Outflow) from Operating Activities 553 (107) (205) Taxation Corporation tax paid Investing Activities Purchase of investments (284) - - Sales of investments Net Cash Outflow from Investing Activities (284) - - Equity Dividends Paid Net Cash Inflow/(Outflow) before Financing and Management of Liquid Resources 269 (107) (205) Management of Liquid Resources Investment in Liquidity Funds - 4,500 4,500 Net Cash Outflow from Management of Liquid Resources - 4,500 4,500 Financing Issue of Shares Expenses from the issue of shares Redeemable preference shares amounts outstanding received Redeemable preference shares redeemed - - (50) Net Cash Inflow from Financing Increase in Cash for the Period 269 4,460 4,360 Reconciliation of Net Revenue on Ordinary Activities Before Taxation to Net Cash Outflow from Operating Activities Return on ordinary activities before finance costs and taxation (117) (203) (252) Share based payments Decrease/(increase) in debtors 4 (32) (91) Increase/(decrease) in creditors and accruals 666 (17) (7) Net cash inflow/(outflow) from operating activities 553 (107) (205) Analysis of Changes in Net Funds Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Cash Cash Liquidity Funds Total Cash Liquidity Funds At beginning of period 4, ,500 4, ,938 Net cash inflow/(outflow) 269 4,460 (4,500) (40) 4,360 (4,500) (140) At end of period 5,067 4,898-4,898 4,798-4,798 Total Half Year Report 2012 Iona Environmental VCT Plc 11

14 Half Year Report Reconciliation of Movements in Shareholders Funds Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Total Return on ordinary activities after taxation (117) (203) (252) Issue of new shares Share issue expenses Redeemable preference shares amounts outstanding received Redeemable preference shares redeemed - - (50) Share based payment Movement in Total Shareholders' Funds (117) 20 (42) Total Shareholders' Funds brought forward 4,835 4,877 4,877 Total Shareholders' Funds at the End of the Period 4,718 4,897 4, Iona Environmental VCT Plc Half Year Report 2012

15 Half Year Report Notes to the Accounts 1 Accounting Policies The principal accounting policies remain unchanged from the year ended 30 September Return per Share Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Ordinary Shares A Shares Ordinary Shares A Shares Ordinary Shares A Shares Revenue return per share based on: Net profit/(loss) after taxation ( 000) (113) (4) (56) (2) (104) (3) Weighted average number of shares in issue 5,345,499 8,018,246 5,319,929 7,554,198 5,333,845 7,806,726 Pence per Ordinary Share/A Share (2.1) (0.0) (1.1) (0.0) (1.9) (0.0) Capital return per share based on: Net capital gain/(loss) for the financial year ( 000) - - (141) (4) (141) (4) Weighted average number of shares in issue 5,345,499 8,018,246 5,319,929 7,554,198 5,333,845 7,806,726 Pence per Ordinary Share/A Share - - (2.7) (0.1) (2.6) (0.1) 3 Dividends No dividends have been proposed or paid in the period. 4 Going Concern After making enquires, and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. In arriving at this conclusion the Directors have considered the liquidity of the Company and its ability to meet its obligations as they fall due for a period of at least twelve months from the date that these financial statement were approved. As at the 31 March 2012 the Company held bank balances with a combined value of 5.1 million. 5 Incentive Scheme To give effect to a Performance Incentive, each investor received one Ordinary Share and one A Share at the subscription prices of 99.9p for each Ordinary share and 0.1p for each A Share. At the close of the Offer, the Management owned a third of all A Shares in issue, which vested on allocation. Subject to the achievement of the Hurdle, being a Performance Value of at least 120p per share and the payment of Shareholder Proceeds of at least 20p per share, the Management A Shareholders will receive 1% of the first 20p of Shareholder Proceeds and 20% of Shareholder Proceeds thereafter. The holders of A Shares will be entitled to distributions equivalent to three times the Performance Incentive. 2/3 of the distributions in respect of the A Shares will be allocated to Shareholders and 1/3 to the Management, which will result in Management receiving the level of Performance as described above. As no further A Shares have been issued to Management during the six months to 31 March 2012, there are no Share Based Payments. 6 Investments Held at Fair Value Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Rosewood Energy Limited - 15 'A' Ordinary shares of 1 each Rosewood Energy Limited - Loan Notes Rosewood Energy Limited - Loan to Biogen (UK) Limited The investment in Rosewood Energy 'A' Ordinary shares represents 50% of that company's issued share capital. The Company has a commitment to purchase additional 'A' Ordinary shares in Rosewood Energy. The Loan Notes issued by Rosewood Energy Limited bear interest at 11% and are repayable in full by 26 January 2019 at the latest. A second and final tranche of 271,944 is due to be issued to the Company on or after 16 May 2012 on the same terms, which will bring the total Loan Notes held by the Company to 450,000. The loan to Biogen (UK) Limited, the Company's partner in the Rosewood Energy investment, bears interest at 11% per annum and was used to part fund Biogen's purchase of initial B Shares issued by Rosewood Energy. The loan will be increased to 100,000 on or after 16 May 2012 and is repayable in full by 26 January 2019 at the latest. Biogen will use this increase to purchase further Rosewood shares. Once completed the Company will have invested a sum of approximately 720,000 in Rosewood Energy Limited. 7 Related Parties Six months ended Six months ended Year ended 31 March March September 2011 (Unaudited) (Unaudited) (Audited) Administration Fee paid to Iona Capital Limited Events Since 31 March 2012 On 4 April 2012, the Company issued and allotted 700,610 fully paid B Shares (of nominal value each) for 1 each and on 5 April 2012, the Company issued and allotted a further fully paid 10,000 B Shares (of nominal value each) for 1 each. Gross funds raised were 710, ,000 had been received from subscribers for B Shares as at 31 March 2012 and forms part of creditors in the balance sheet. Half Year Report 2012 Iona Environmental VCT Plc 13

16 Half Year Report Contact Details Board of Directors David Eades (Chairman) Michael Dunn Philip Ling Investment Manager and Administrator Iona Capital Limited 55 Grosvenor Street London W1K 3HY Telephone: +44 (0) Web: Enquiries: Secretary and Registered Office Iona Capital Limited 55 Grosvenor Street London W1K 3HY Telephone: +44 (0) Company Number Registered Independent Auditors Moore Stephens LLP 150 Aldersgate Street, London, EC1A 4AB Telephone: +44 (0) Registrar and Transfer Office The City Partnership (UK) Limited Thistle House 21 Thistle Street Edinburgh EH2 1DF Telephone (UK): Telephone (Overseas): Any change of address of a shareholder or other relevant amendment to shareholder details should be communicated to the Company s Registrar, The City Partnership (UK) Limited 14 Iona Environmental VCT Plc Half Year Report 2012

17 NOTES

18 NOTES

19

20 55 Grosvenor Street London W1K 3HY t: +44 (0) e: