Triodos Organic Growth Fund A sub-fund of Triodos SICAV II

Transcription

1 Triodos Organic Growth Fund A sub-fund of Triodos SICAV II Semi-annual report June 2017 TLIM

2 Organic food and agriculture Organic agriculture recognises the relationship between our environment, our health and the food we eat. The use of pesticides and chemical fertilisers is avoided and high standards of animal welfare maintained.

3 Triodos SICAV II - Triodos Organic Growth Fund Semi-annual report June 2017 Triodos Organic Growth Fund is a sub-fund of Triodos SICAV II (Société d Investissement à Capital Variable which is established in the Grand Duchy of Luxembourg. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF). Triodos Investment Management BV is the external alternative investment fund manager of Triodos SICAV II - Triodos Organic Growth Fund. Triodos Investment Management BV is incorporated under the laws of the Netherlands and is wholly-owned subsidiary of Triodos Bank NV. Triodos Investment Management BV is supervised by the Dutch regulator, Autoriteit Financiële Markten. The value of investments may fluctuate. Past performance is no guarantee of future results. No subscription can be accepted on the basis of financial reports. Subscriptions are only valid if they are made on the basis of the latest published prospectus accompanied by the latest annual report and the most recent semi-annual report, if published thereafter. The prospectus is available free of charge at the registered office of Triodos SICAV II in Luxembourg and from Triodos Bank: 3

4 Key figures (amounts in EUR) 1st half st half Net assets (end of reporting period) 45,732,938 35,521,788 37,435,533 30,086,325 28,424,863 Income 238, , , , ,790 Expenses 622, ,272 1,081, , ,591 Net operating income (384,487) 41,078 (203,515) (112,380) (286,801) Realised and unrealised results on investments and foreign exchange contracts 3,003,849 1,133,635 2,495,294 1,011,644 75,836 Net result 2,619,362 1,174,713 2,291, ,264 (210,965) Ongoing charges per share class* Q-dis (EUR) 2.97% 2.95% 3.00% 3.01% 2.87% Net asset value (NAV) per share (amounts in EUR) June 30, 2017 June 30, 2016 Dec. 30, 2016 Dec.31, 2015 Dec. 31, 2014 Q-dis (EUR) Return based on NAV per share** 6-month return 1-year return 3-year return p.a. Return p.a. since inception Q-dis 6.2% 9.6% 5.2% 4.4% * The ongoing charges reflect the total normalised expenses charged to the result, divided by the average net asset value. For the calculation of the average net asset value, each computation and publication of the net asset value is taken into account. The ongoing charges are calculated over the twelve-month period ending at the end of the reporting period. ** NAV per share is based on share prices as per June 30, 2017, i.e. the last price at which shares were traded in the reporting period. 4

5 General information Legal structure Triodos Organic Growth Fund (the fund) was launched in January 2014 as a sub-fund of Triodos SICAV II. The fund has a semi open-end fund structure and is not quoted on any stock market. Triodos Organic Growth Fund has a euro-denominated share class for professional and certain qualified private investors. Triodos SICAV II was incorporated under the laws of the Grand Duchy of Luxembourg as a société d investissement à capital variable (SICAV) in the form of a société anonyme on April 10, 2006, for an unlimited period. Triodos SICAV II is governed by Part II of the Luxembourg Law of December 17, 2010, as amended. Triodos SICAV II is an alternative investment fund (AIF) subject to the requirements of Directive 2011/61/EU of June 8, 2011 on Alternative Investment Fund Managers (AIFMD), as implemented in Luxembourg through the law of July 12, 2013 on alternative investment fund managers. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF). The registered office of Triodos SICAV II is established at 11-13, Boulevard de la Foire, L-1528 Luxembourg. Investment policy The fund invests primarily in mature and profitable, privately-owned organic and sustainable consumer lifestyle businesses in Europe. It aims to offer investors a unique opportunity to invest in the long-term development of the organic and sustainable consumer sector in Europe and to contribute to positive social and environmental impact. equity positions, is represented on the board of directors and/or at annual shareholders meetings and adds value through a strategic, professional ownership approach. Alternative Investment Fund Manager The Board of Directors of Triodos SICAV II has appointed Triodos Investment Management BV (Triodos Investment Management) as the Alternative Investment Fund Manager (AIFM) of Triodos SICAV II. Triodos Investment Management is incorporated under the laws of the Netherlands and is a wholly-owned subsidiary of Triodos Bank NV. Triodos Investment Management is supervised by the Dutch regulator, Autoriteit Financiële Markten (AFM). The Management Board of Triodos Investment Management consists of: Marilou van Golstein Brouwers (Chair) Jacco Minnaar (as of June 1, 2017) Dick van Ommeren Laura Pool Depositary and Paying Agent, Domiciliary, Corporate and Administrative Agent, Registrar and Transfer Agent RBC Investor Services Bank SA (RBC Investor Services Bank) has been appointed as depositary for Triodos SICAV II. Furthermore, RBC Investor Services Bank acts as Paying Agent, Domiciliary, Corporate and Administrative Agent, and Registrar and Transfer agent for Triodos SICAV II. The investment focus is on selected values-based businesses with a track record of successful trading and profitability. Through an evergreen approach, not driven by exits, the fund invests as an aligned co-owner, by providing succession and/or growth capital. As a long-term investment partner, the fund typically takes significant minority or majority 5

6 Fund report In the first six months of 2017, the fund s net assets grew by 22.2% (EUR 8.3 million). During the first six months of 2017, the net asset value per share (Q-dis share class) rose by 6.2%, from EUR per share on December 31, 2016 to EUR on June 30, This increase exceeded expectations and is mainly related to strong earnings growth at the fund s portfolio companies and to a lesser extent to higher valuation multiples in financial and mergers and acquisitions (M&A) markets. Since inception, the fund s net assets have increased by 80.8%, from EUR 25.3 million to EUR 45.7 million as per the end of June 2017, of which EUR 14.8 million is attributed to net inflow in the fund and EUR 5.6 million is attributed to the performance of the fund EUR million Market developments fund s net assets by the end of June 2017 Triodos Organic Growth Fund invests in sustainable consumer businesses in Europe. The fund targets organic food, natural personal care, natural textiles and other sustainable lifestyle companies across the supply chain. The market for sustainable consumer products continues to grow rapidly. An ever-larger range of organic products, new sales channels and strong customer loyalty lead to sustainable growth in sales. The food sector is still leading this market, with European sales of organic food reaching over EUR 30 billion in Growing consumer awareness of the negative social and environmental effect caused by the personal care and textile industries, drives these markets to double digit growth numbers. The market for organic personal care is growing globally at an annual rate of 10%, with Germany, France and the UK as frontrunners in Europe. The market for Eco-fibres has a global annual growth rate of 11%. As organic food represents the vast majority of the total sustainable consumer sector targeted by the fund, the following analysis focuses on the European organic food market. Although not all numbers for the European organic food market for 2016 are available yet, several individual countries have already published their data on organic food sales, showing growth across European countries. Germany continues to be the largest market for organic products in Europe. In 2016, the organic food market in this country grew by 9.8% (2015: 11%) to EUR 9.5 billion. The organic market share as a percentage of the total food market is the highest in Denmark (9.6%), followed by Sweden (9.0%) and Switzerland (8.4%). With total sales of EUR 9.5 billion, the German organic food market grew by 9.8% (2015: 11%). Germany remains the largest European market for organic products, accounting for almost one-third of total organic food sales in Europe. Organic food represents 5.1% of the entire food market in Germany according to AMI (Agricultural Market Information Company). Natural food stores are facing stronger competition from conventional retailers that are increasing their organic product offering. The organic food market in France has been growing steadily for several years now and remained the second-largest organic food market in Europe in According to Agence Bio, the organic food market reached a size of EUR 7 billion in 2016, which implies 20% growth compared to the year before. In 2016, 15% of the French population consumed organic produce on a daily basis, compared to 10% in In 2016, the Swedish organic food market registered spectacular growth for the third year in 6

7 a row, expanding at a rate of 27% (2015: 39% and 2014: 45%) according to Organic Trade. This brings the size of the Swedish organic food market to over EUR 2.5 billion. Online sales represent a remarkably large share of the total Swedish food market and account for 25% of total organic food sales. The organic food market has been growing for twenty consecutive years and is expected to double in the next ten-year period. According to the organic market report of the Soil Association, the organic food market in the United Kingdom (UK) was worth EUR 2.2 billion in 2015 and grew to EUR 2.4 billion in The organic food market as a whole grew by 7.1% in 2016, while non-organic sales continued to decline. The sales of organic food at retailers increased by 6.1% and those through home delivery by 11%. The Swiss organic food market is small in absolute figures but is growing rapidly. Organic food sales grew by 21%, from EUR 1.9 billion in 2015 to EUR 2.3 billion in The market share of organic food in Switzerland, as a percentage of the total food market, is currently 8.4%. Swiss consumers are buying more and more organic products: half of them buy them every day or several times a week. In 2016, they spent EUR 272 (2015: EUR 255) per capita on organic food. The Dutch organic food market grew by an estimated 12% to a total size of EUR 1.3 billion in According to Bionext, supermarket revenues of organic products grew by 19% in In the first half of 2016 alone, supermarkets recorded a continued growth of 17%. The total market share of organic food products in the Netherlands amounted to 3.1% in With a size of just over EUR 1.2 billion, the Danish organic food market is relatively small. Despite its size Denmark is an important market for Triodos Organic Growth Fund. Of the fund s current five investments, two are in Danish companies (Aarstiderne and Naturfrisk). The Danish organic food market scores high on many fronts when it comes to relative numbers. According to Organic Denmark, the organic food market grew by 14% in Per capita spending in 2016 amounted to EUR 269. Denmark not only boasts a 14% growth rate and high consumer spending, but at 9.6% also has the highest share of organic food relative to the total food market. Aiming to continue boosting the growth of organic consumption, the Danish government has set up a programme for certifying organic out-of-home consumption. Over 1,000 hotels, restaurants and canteens in the country have already been certified and serve meals with at least 25% (bronze), 60% (silver) or 80% (gold) organic ingredients. The positive trend in the market for organic consumer goods is expected to continue in the years to come. According to market research company Technavio the organic food market in Europe will continue to grow at an annual rate of around 7% until The main drivers for this growth are strong consumer demand for organic and health food products, increasing distribution through mainstream retailers also offering organic (private label) products and rising demand in the out-of-home market. Fund data, June 30, 2017 Net assets EUR 45,732,938 Portfolio value EUR 33,416,922 Number of equity investments 5 Number of countries 3 Asset allocation (% of fund s net assets), June 30, 2017 Equity investments 73.1% Other assets and liabilities 26.9% 7

8 8

9 DO-IT, THE NETHERLANDS DO-IT was founded in 1991 by Poppe Braam, driven by a strong commitment to stimulate organic farming and build up sustainable trade relations with farmers in developing countries and buyers in Europe. The company works very closely with local farmers and cooperatives and shares knowledge about organic farming practices. 9

10 Investments As per June 30, 2017, Triodos Organic Growth Fund has completed six equity investments and one exit, resulting in five portfolio companies. In total, the portfolio represents 73.1% of the fund s net assets. The investments were made in different countries, in both food and non-food companies, thus contributing to the fund s objective of building a diversified portfolio across various sub-sectors and countries. Aarstiderne AS in Denmark, February 2014 Aarstiderne (Danish for the Seasons ) is an organic Danish meal box company, delivering a variety of healthy organic meal options and fruit and vegetable boxes to households weekly. The company is a truly inspiring frontrunner in the European organic food sector. Due to its long investment horizon, Triodos Organic Growth Fund will help Aarstiderne to realise healthy growth in the coming years. Naturfrisk Group Holding AS in Denmark, April 2016 Naturfrisk Group Holding is a Danish producer of organic soft drinks, juices, beers and distilled spirits. The company is among the first in the beverage industry to offer an organic alternative to consumers. The investment supports Naturfrisk in its aim to remain independent, while helping to realise the company s growth plans and ambitions. Naty AB in Sweden, July 2016 Naty was founded in 1994 to offer an alternative for disposable diapers and the vast amounts of waste that they produce. The company successfully launched a biodegradable disposable diaper, followed by lines of complementary baby care products, female care products and eco clothing. The investment supported Naty in consolidating its shareholder base. Organic Assistance BV in the Netherlands, September 2016 Organic Assistance is 100% owner of Dutch company DO-IT BV, a company that buys organic products from farmers predominantly in developing countries and sells them throughout Europe. The investment supports DO-IT in its ambition to considerably increase the offer of organic products and improve the position of local farmers. Marqt Holding BV in the Netherlands, April 2017 Marqt is a Dutch sustainable food and groceries retailer that sells healthy food produced with respect for animals, consumers and the environment, and sells these products at a fair price. In addition to buying out a previous investor, Triodos Organic Growth Fund has provided growth capital to enable the company to take further steps in realising its sustainability mission. Given the amount of capital needed, the fund has made this investment in cooperation with mission-aligned partner Social Impact Ventures. Results Financial results The fund s total income over the first half of 2017 amounted to EUR 0.2 million (first half of 2016: EUR 0.5 million), mainly consisting of dividend income from its equity investments. Total expenses, the majority of which consist of management fees, amounted to EUR 0.6 million in the first half of 2017 (first half of 2016: EUR 0.5 million). Realised value gains amounted to EUR 0.3 million, while unrealised value gains in the portfolio amounted to EUR 2.7 million. The net result of Triodos Organic Growth Fund for the first half of 2017 therefore amounts to EUR 2.6 million (first half of 2016: EUR 1.2 million). Return During the first half of 2017, the net asset value per share (Q-dis share class) rose by 6.2%, from EUR per share on December 31, 2016, to EUR on June 30, Since inception, the average return per annum is 4.4%. The long-term net target return is 8.0% per annum, which Triodos Organic Growth Fund aims to achieve through a combination of dividend income and value gains in the portfolio. 10

11 Return based on net asset value (NAV) per share* 6-month return 1-year return 3-year return p.a. Return p.a. since inception Q-dis (EUR)* 6.2% 9.6% 5.2% 4.4% * NAV per share is based on share prices as per June 30, 2017, i.e. the last price at which shares were traded in the reporting period. Liquidity The liquidity (cash and cash equivalents) of Triodos Organic Growth Fund represented 26.9% of the fund s net assets as per June 30, 2017 (December 31, 2016: 30.0%). During the first half of 2017, fundraising activities resulted in capital inflows amounting to EUR 5.7 million while no redemptions occurred, resulting in a net inflow of EUR 5.7 million (first half of 2016: EUR 4.3 million). Fundraising activities will be continued in the second half of Costs The main recurring item in the cost structure of Triodos Organic Growth Fund is the management fee paid to the AIFM, Triodos Investment Management. The AIFM uses this fee primarily to cover staffrelated costs and travel expenses incurred in connection with investments. The investment process is labour intensive. A new investment on average takes at least six months to be put into effect, from the initial meeting to the signing of contracts and other documentation. As the fund focuses on investment opportunities across a number of European countries (with the initial focus on north-west Europe), relatively frequent travelling is required. Other costs include the fees paid to RBC Investor Services Bank for their depositary and administrative services. information about management fees and ongoing charges can be found on pages 22 and 23. Outlook The outlook for the second half of 2017 is cautiously positive. Since closing the investment in Marqt in April 2017, the fund team has been engaged in talks with several potential investee companies in various sectors across Europe. The fund team aims to invest an additional EUR 9 million during the second half of However, given the composition of the current pipeline, achieving this will be challenging. Luxembourg, August 31, 2017 The Board of Directors of Triodos SICAV II Garry Pieters (Chair) Monique Bachner Marilou van Golstein Brouwers Patrick Goodman Jeroen Smakman The ongoing charges, including the management fee, represented 2.97% of the fund s net assets on an annual basis as per June 30, 2017 (June 30, 2016: 2.95%). This is well below the upper limit of 3.50% set for the annual ongoing charges. More detailed 11

12 Statement of net assets as per June 30, 2017 (amounts in EUR) Notes June 30, 2017 December 31, 2016 June 30, 2016 Assets Fixed assets Investment in financial assets 2 33,416,922 28,956,793 18,862,761 (Historic cost: EUR 27,169,874 as at June 30, 2017; EUR 25,433,158 as at December 31, 2016; EUR 16,625,982 as at June 30, 2016) Formation expenses 3 198, , ,731 Current assets Cash and cash equivalents 12,300,718 11,242,302 19,727,748 Net unrealised gain on forward foreign exchange contracts 9 83,201 85,235 Other current assets 62, ,110 82,078 Total assets 46,061,206 40,639,031 38,963,318 Liabilities Liabilities due within one year Net unrealised loss on forward foreign exchange contracts 9 5,970 Investment management, distribution and service fees payable 6 220, , ,696 Accounts payable and accrued expenses 8 108,243 2,830,147 3,262,864 Total liabilities 328,268 3,203,498 3,441,530 Net assets 45,732,938 37,435,533 35,521,788 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 12

13 Statement of operations for the period ended June 30, 2017 (amounts in EUR) Notes 1st half year, st half year, 2016 Income Dividend income 2 238, , ,891 Bank interest 3,332 2,459 Total income 238, , ,350 Expenses Amortisation of formation expenses 3 52,354 78,886 38,746 Investment management, distribution and service fees 6 432, , ,244 Administrative and depositary fees 5 61, ,479 50,612 Audit and reporting expenses 8,390 27,538 8,390 Subscription tax 4 10,530 17,979 8,226 Interest paid 8,346 14,738 9,061 Other tax 2,140 8,210 6,605 Other expenses 7 46, ,603 44,388 Total expenses 622,769 1,081, ,272 Net operating income (384,487) (203,515) 41,078 Realised gain on investments 282,977 Realised loss on forward foreign exchange contracts (6,919) (8,294) (8,294) Realised gain on foreign exchange 16,404 1,315 1,315 Realised loss on foreign exchange (9,992) (21,525) (5,123) Change in net unrealised appreciation on investments 2,723,413 2,443,304 1,156,448 Change in net unrealised appreciation on forward foreign exchange contracts 80,494 Change in net unrealised depreciation on forward foreign exchange contracts (2,034) (10,711) Net increase in net assets resulting from operations 2,619,362 2,291,779 1,174,713 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 13

14 Statement of changes in net assets for the period ended June 30, 2017 (amounts in EUR) 1st half year, st half year, 2016 Operations Net operating income (384,487) (203,515) 41,078 Realised gain on investments 282,977 Realised loss on forward foreign exchange contracts (6,919) (8,294) (8,294) Realised gain on foreign exchange 16,404 1,315 1,315 Realised loss on foreign exchange (9,992) (21,525) (5,123) Change in net unrealised appreciation on investments 2,723,413 2,443,304 1,156,448 Change in net unrealised appreciation on forward foreign exchange contracts 80,494 Change in net unrealised depreciation on forward foreign exchange contracts (2,034) (10,711) Net increase in net assets resulting from operations 2,619,362 2,291,779 1,174,713 Capital transactions Capital subscriptions Q Share Class 5,678,043 6,372,213 5,296,850 P Share Class Total subscriptions 5,678,043 6,372,213 5,296,850 Capital redemptions Q Share Class (1,314,784) (1,036,100) P Share Class Total redemptions (1,314,784) (1,036,100) Net increase in net assets resulting from capital transactions 5,678,043 5,057,429 4,260,750 Net assets Net assets at the beginning of year 37,435,533 30,086,325 30,086,325 Total increase in net assets 8,297,405 7,349,208 5,435,463 Net assets at the end of the period/year 45,732,938 37,435,533 35,521,788 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 14

15 Cash flow statement for the period ended June 30, 2017 (amounts in EUR) Cash provided by operating activities 1st half year, st half year, 2016 Profit after taxation 2,619,362 2,291,779 1,174,713 (-) increase in unrealised gains and losses on investments and forward foreign exchange contracts (2,723,413) (2,523,798) (1,145,737) (+) increase/(-) decrease in receivables and other assets 96,371 79,847 61,739 (+) increase in payables (2,875,231) 721, ,902 Net cash provided by operating activities (2,882,911) 569,668 1,044,617 Cash provided by financing activities (+) proceeds from shares issued 5,678, ,213 5,296,850 (-) decrease from shares redeemed (1,314,784) (1,036,100) Net cash provided by financing activities 5,678,043 5,057,429 4,260,750 Cash provided from investing activities (-) acquisitions of financial assets (1,736,716) (14,239,646) (5,432,470) Net cash used by investing activities (1,736,716) (14,239,646) (5,432,470) Cash Net increase/(decrease) in cash and cash equivalents 1,058,416 (8,612,549) (127,103) Cash at the beginning of the year 11,242,302 19,854,851 19,854,851 Cash at the end of the period/year 12,300,718 11,242,302 19,727,748 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 15

16 Statement of changes in the number of shares outstanding for the period ended June 30, st half year, st half year, 2016 Number of Shares outstanding at the beginning of the year Q Share Class 342, , , P Share Class Subscriptions over the period/year Q Share Class 51, , , P Share Class Redemptions over the period/year Q Share Class 12, , P Share Class Number of Shares outstanding at the end of the period/year Q Share Class 393, , , P Share Class

17 Statistics (amounts in EUR) June 30, 2017 December 31, 2016 June 30, 2016 Total net asset value at the end of the period/year Q Share Class 45,732,822 37,435,424 35,521,682 P Share Class ,732,938 37,435,533 35,521,788 Net asset value per share at the end of the period/year Q Share Class P Share Class The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 17

18 Notes to the financial statements 1. General Triodos SICAV II (the SICAV ) has been incorporated under the laws of the Grand Duchy of Luxembourg as a société d investissement à capital variable (SICAV) under the form of a société anonyme on April 10, 2006 for an unlimited period. Triodos SICAV II is governed by Part II of the Luxembourg Law of December 17, 2010, as amended from time to time. The SICAV is an alternative investment fund ( AIF ) subject to the require ments of the Directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Manager s Directive ( AIFMD ) as implemented in Luxembourg through the law of 12 July 2013 on alternative investment fund managers (the Law of 2013 ). The Registered Office of the SICAV is established at 11/13, Boulevard de la Foire, L-1528 Luxembourg. The Articles have been deposited with the Chancery of the District Court of Luxembourg on April 27, 2006 and published in the Mémorial C, Recueil des Sociétés et Associations (the Mémorial ). The SICAV has been registered with the Companies Register of the District Court of Luxembourg under number B The Articles were last amended at the extraordinary general meeting of shareholders held on October 16, 2014 and published in the Mémorial. The SICAV is structured as an umbrella fund, which provides both institutional and retail investors with a variety of sub-funds, each of which relates to a separate portfolio of assets permitted by law and managed within specific investment objectives. As at June 30, 2017, the SICAV has three sub-funds: Triodos Renewables Europe Fund, Triodos Microfinance Fund and Triodos Organic Growth Fund. The objective of the sub-fund is to invest primarily in mature and profitable privately-owned organic and sustainable lifestyle businesses in Europe. It aims to offer investors a unique investment opportunity in the long-term development of organic and sustainable consumer sector in Europe and to contribute to a positive social and environmental impact. The investment focus will be on selected values-based businesses with a track record of successful trading and profitability. Through an evergreen approach that is not driven by exits, the sub-fund will invest as an aligned co-owner, by providing succession and/or growth capital. As a long-term investment partner, the sub-fund will typically take significant minority or majority equity positions, be represented at the board of directors of investees and add value through a strategic, professional ownership approach. The Initial Offering Period ended on January 13, 2014, and the first net asset value of Triodos Organic Growth Fund was calculated on March 31, Shares may be subscribed once a quarter, on each Valuation Date, subject to a 15 days subscription notice period. The sub-fund is semi open-ended, i.e. Shares may be redeemed in principle once a quarter on the Valuation Date, subject to a 45 days redemption notice period and subject to available liquidity. However, the SICAV is entitled to (temporarily) stop trading and thus the execution of the redemption applications received, if trading is not possible, in accordance with the stipulations of the Prospectus. The sub-fund may offer Shares of the following Classes: Euro-denominated Class Q Shares Distribution, Euro-denominated Class P Shares Capitalisation. Class Q Shares are open to Institutional Investors, professional investors and certain qualified private investors, such as clients of private banks and/or high net worth individuals, depending on their country of residence. Class P Shares are open to entities of Triodos Group. Class P Shares give the right, in accordance with the Articles, to propose to the general meeting of shareholders a list containing the names of candidates for the position of director of the Company 18

19 out of which a majority of the Board of Directors of the Company must be appointed. Shares are issued in registered form. For the Classes of Shares which are of the Capitalisation type, there are no distributions of dividends. Income earned in these Classes of Shares is reinvested. For the Classes of Shares which are of the Distribution type, there are distributions of dividends. The sub-fund Triodos Organic Growth Fund incorporated Triodos OGF Luxco S.à r.l. ( the holding company ) in June As a wholly-owned subsidiary of the sub-fund, all assets and liabilities, income and expenses of the holding company are consolidated in the statement of net assets, the statement of operations and the statement of changes in net assets of the sub-fund. All investments held by the holding company are disclosed in the financial statements of the sub-fund. The financial year end of the SICAV is end of December each year. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF). Triodos SICAV II, including its sub-funds, is also registered with the Dutch Supervisory authorities, the Autoriteit Financiële Markten (AFM). 2. Summary of significant accounting principles Investments are valued at their fair value. The fair value is determined as follows: (a) The valuation of private equity investments (such as equity, subordinated debt and other types of mezzanine finance) are based on the International Private Equity and Venture Capital Valuation Guidelines, as published from time to time by the European Venture Capital Association (EVCA), and is conducted with prudence and in good faith. In Triodos Organic Growth Fund, the private equity investments are valued based on the application of an earnings multiple valuation methodology. Other assets are valued according to the following rules: (b) Senior debt instruments, invested in/granted to companies not listed or dealt in on any stock exchange or any other Regulated Market, are valued at fair market value, deemed to be the nominal value, increased by any interest accrued thereon; such value is adjusted, if appropriate, to reflect the appraisal of the Advisor of the relevant sub-fund on the creditworthiness of the relevant debtor. The Board of Directors uses its best endeavors to continually assess this method of valuation and recommend changes, where necessary, to ensure that debt instruments are valued at their fair value as determined in good faith by the Board of Directors. (c) The value of money market instruments not listed on any stock exchange or dealt in on any other Regulated Market and with a remaining maturity of less than 12 months is deemed to be the nominal value thereof, increased by any interest accrued thereon. (d) The value of securities which are admitted to official listing on any stock exchange is based on the latest available price or, if appropriate, on the average price on the stock exchange which is normally the principal market of such securities, and each security dealt on any other Regulated Market is based on the last available price. In the event that this price is, in the opinion of the Board of Directors, not representative of the fair market value of such securities, for example in the case of illiquid securities 19

20 and/or stale prices, the directors value the securities at fair market value according to their best judgment and information available to them at that time. (e) Units or shares of open-end UCIs are valued at their last official net asset values, as reported or provided by such UCI or their agents, or at their last unofficial net asset values (i.e. estimates of net asset values) if more recent than their last official net asset values, provided that due diligence has been carried out by the relevant Advisor, in accordance with instructions and under the overall control and responsibility of the Board of Directors, as to the reliability of such unofficial net asset values. (f) The liquidating value of futures, forward or options contracts not admitted to official listing on any stock exchange or dealt on any other Regulated Market means their net liquidating value determined, pursuant to the policies established prudently and in good faith by the Board of Directors, on a basis consistently applied for each different variety of contracts. (g) The value of any cash at hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends declared and interest accrued, and not yet received are deemed to be the full amount thereof, unless, however, the same is unlikely to be paid or received in full, in which case the value thereof is determined after making such discounts as the Board of Directors may consider appropriate to reflect the true value thereof. (h) Swaps, as far as credit swaps are concerned, are valued at fair market values as determined prudently and in good faith by the Board of Directors. Cross-currency interest rate swaps are valued on the basis of the prices provided by the counterparty. (i) All other securities and assets are valued at fair market value as determined in good faith pursuant to procedures established by the Board of Directors. (j) Placements in foreign currency are quoted in euro s with due observance of the currency exchange rates most recently known. (k) Realised and non-realised changes in the value of investments are incorporated in the profit and loss account. (l) The principle for determination of profit is based on the attribution of income and expenses to the relevant period. The income from payments of profit on equity participations is accounted for in the year in which they are made payable. Prepaid costs and costs still to be paid are taken into account in determining the expenses. (m) Other assets and liabilities are recorded at nominal value after deduction of any provision in respect of anticipated non-recovery. (n) The costs of investments expressed in currencies other than EUR are translated into EUR at the exchange rate prevailing at purchase date. (o) Interest income is accrued pursuant to the terms of the underlying investment. Income is recorded net of respective withholding taxes, if any. (p) Gain and losses arising from un-matured forward foreign exchange contracts are determined on the basis of the applicable forward exchange rates at the valuation date and are booked in the profit and loss accounts. (q) Dividend income is recognised on cash basis, net of any withholding taxes. 20

21 (r) Equity investments of Triodos SICAV II are excluded from consolidation due to exemptions by temporary holding, size and time window. 3. Formation expenses The total formation expenses of the sub-fund amount to EUR 377,200 of which EUR 350,000 is related to the initial formation of the sub-fund. The formation expenses of Triodos OGF Luxco S.à r.l. amount to EUR 27,200. These formation expenses are amortised over a period of five years. 4. Taxation According to the law in force and current practice, the SICAV is not subject to any Luxembourg tax on income and capital gains nor are dividends paid by the SICAV subject to any Luxembourg withholding tax. However, each of the SICAV s sub-funds is subject to a subscription tax (taxe d abonnement) at an annual rate of 0.05% p.a. Such rate may be decreased to 0.01% p.a. for certain sub-funds or classes of shares which are restricted to Institutional Investors as specified in the relevant sub-fund particulars. This tax is calculated and payable quarterly on the basis of the net asset value of each sub-fund at the end of each quarter. This tax is not due on that portion of the SICAV s assets invested in other Luxembourg UCIs. In addition, the issue of Shares in the SICAV is not subject to any registration duties or other taxes in Luxembourg. 5. Administrative and depositary fees The Depositary and Paying Agent, the Administrative Agent, the Domiciliary and Corporate Agent and the Registrar and Transfer Agent are entitled to receive fees in accordance with usual practice in Luxembourg and payable quarterly. The administrative and depositary fees comprise the following: (amounts in EUR) 1st half year, st half year, 2016 Domiciliary agency fee 8,831 17,987 8,950 Administrative fee 28,615 51,147 21,550 Transfer agency fee 3,632 10,118 5,196 Depositary fee 20,269 38,227 14,916 Total 61, ,479 50,612 21

22 6. Investment management, distribution and service fees For the services it provides, the Alternative Investment Fund Manager is entitled to an annual fee payable quarterly and calculated as described in the relevant sub-fund s particulars. The sub-fund pays for the provision of investment management services and supporting services an annual fee of 2.00% for Class Q Shares and Class P Shares, calculated on the relevant Class net assets, accrued and payable quarterly. The costs for marketing activities may amount to maximum 0.20% (on an annual basis) of the net assets of the sub-fund. 7. Other expenses The other expenses comprise the following: (amounts in EUR) 1st half year, st half year, 2016 Supervisory fee (CSSF) 2,000 2,000 2,000 Remuneration of the Board of Directors/Managers* 11,749 23,497 11,749 Legal fees 14,056 34,236 19,445 Consulting fees 1,828 (2,011) (14,777) Bank fees Portfolio transaction costs 13,627 31,464 23,561 Other expenses 3,181 23,167 2,409 Total 46, ,603 44,388 * Amounts include the remuneration of the Board of Managers of the sub-fund s holding company Triodos OGF Luxco S.à r.l. 8. Accounts payable and accrued expenses As per June 30, 2017, the accounts payable and accrued expenses mainly include the following expenses: administrative fees, audit fees, expected earn-out amounts, depositary fees, domiciliary agency fees, legal fees and transfer agency fees. 9. Forward foreign exchange contract The sub-fund achieved an unrealised appreciation of EUR 83,201 on four forward foreign exchange contracts (DKK against EUR, and SEK against EUR) with counterparty Triodos Bank NV. 22

23 10. Ongoing charges cost ratios 12 months ending June 30, months ending December 31, months ending June 30, 2016 Share Class Q 2.97% 3.00% 2.95% Share Class P 2.87% 2.91% 2.84% The ongoing charges reflect the total normalised expenses charged to the result, divided by the average net asset value. For the calculation of the average net asset value, each computation and publication of the net asset value is taken into account. The ongoing charges are calculated over the twelve month period ending at the end of the reporting period. 11. Exchange rate The exchange rate used as per June 30, 2017, is: 1 EUR = DDK 1 EUR = SEK 12. Other information: Belgian savings tax In scope of Belgian Savings Tax No Method used to determine the status Prospectus Result Belgian asset testing Not applicable Period of validity of the status 1 May April

24 Management and administration Registered office 11-13, Boulevard de la Foire L-1528 Luxembourg Grand-Duchy of Luxembourg Board of Directors G.R. Pieters (1958) Chair Independent, Partner of the Directors Office Luxembourg Garry Pieters is an ILA (Institut Luxembourgeois des Administrateurs)-certified director. He is Money Laundering Reporting Officer (MLRO) of Triodos SICAV II and oversees the handling of complaints. Garry Pieters is a Board Member of several other Luxembourg investment entities, including Fundsmith LLP, Astellon Capital Partners LLP and Sustainability Finance Real Economies fund (SFRE, initiated by the Global Alliance for Banking on Values). He is also a Conducting Officer for the Luxembourg entities of Columbia Threadneedle and Nikko Asset Management. He has over 30 years of experience in the field of finance, in particular with ING Group NV. He was fund manager for a number of ING Group s Luxembourg money market and fixed income funds and was Chief Executive Officer of NN Investment Partners Luxembourg SA and of its Singapore joint venture, as well as Executive Vice President of its Korean joint venture. He is also Chair of the Board of Triodos SICAV I. As per June 30, 2017, Garry Pieters did not hold any shares in Triodos Organic Growth Fund. P.H. Aeby (1956) (until April 26, 2017) Chief Financial Officer and member of the Executive Board of Triodos Bank NV M.D. Bachner (1972) Independent, Founder Bachner Legal Monique Bachner is lawyer and an ILA-certified director. She started her legal career in London, at Freshfields Bruckhaus Deringer, and later moved to Debevoise & Plimpton. She currently has her own law firm, Bachner Legal. Monique Bachner focuses her practice on corporate and funds law, as well as on corporate governance advisory services for Board of Directors. She has served as Member of the Board of several investment funds and charitable institutions and is a Member of both the Board and the Management Committee of ILA (Institut Luxembourgeois des Administrateurs), as well as Chair of ILA s Education Committee and Member of ILA s Investment Funds Committee. Monique Bachner is also a Member of the Board of Triodos SICAV I. As per June 30, 2017, Monique Bachner did not hold any shares in Triodos Organic Growth Fund. M.H.G.E. van Golstein Brouwers (1958) Chair of the Management Board of Triodos Investment Management Marilou van Golstein Brouwers is Chair of the Management Board of Triodos Investment Management and Triodos Investment Advisory Services BV. In addition, she is a Member of the Board of Stichting Triodos Sustainable Trade Fund and Stichting Triodos Renewable Energy for Development Fund. Furthermore, Marilou van Golstein Brouwers is a Member of the Board of the Global Impact Investing Network (GIIN), Member of the Advisory Committee of the Fund for Rural Prosperity of the MasterCard Foundation, Member of the Advisory Council on International Affairs Committee for Development Cooperation (AIV/COS) and Member of the Supervisory Board of B Corps Europe. She is also a Member of the Board of Triodos SICAV I. As per June 30, 2017, Marilou van Golstein Brouwers did not hold any shares in Triodos Organic Growth Fund. P.M. Goodman (1963) Independent, Partner of Innpact S.à r.l. Patrick Goodman is co-founder of Innpact S.à r.l., which provides expert consulting services for the establishment and management support of impact finance vehicles. He has an in-depth understanding of all operational, financial and legal processes of investment vehicles, backed by almost thirty years experience in the banking and fund industry. Previous employers include JP Morgan in Brussels 24

25 and Citibank in Belgium and Luxembourg. Since early 2003, Patrick Goodman has dedicated his career to responsible finance and impact finance, providing structuring and management support for MIVs (Microfinance Investment Vehicles) and other impact finance vehicles. He is also a Board Member of a number of other impact finance investment funds. As per June 30, 2017, Patrick Goodman did not hold any shares in Triodos Organic Growth Fund. J.C. Smakman (1969) (as of April 26, 2017) Director Retail Banking Triodos Bank NV Jeroen Smakman is director Retail Banking for Triodos Bank NV at its head office, and in that role responsible for the strategy, support and coordination of all retail activities within Triodos Bank and its branches. He has a long-standing experience in the financial sector. Jeroen Smakman previously worked at ING Group NV in product management, marketing and HR. He has held several management positions in the Netherlands, Italy, Canada and the Czech Republic. As per June 30, 2017, Jeroen Smakman did not hold any shares in Triodos Organic Growth Fund. Alternative Investment Fund Manager Triodos Investment Management BV Registered office: Nieuweroordweg EC Zeist The Netherlands Postal address: P.O. Box AB Zeist The Netherlands Triodos Investment Management is the alternative investment fund manager of Triodos SICAV II. The Management Board of Triodos Investment Management has the following members: & Services BV. In addition, she is Member of the Board of Triodos SICAV I, Triodos SICAV II, Stichting Triodos Sustainable Trade Fund and Stichting Triodos Renewable Energy for Development Fund. Marilou van Golstein Brouwers is also Member of the Board of Global Impact Investing Network (GIIN), Member of the Advisory Committee of the Fund for Rural Prosperity launched by the Mastercard Foundation, Member of the Advisory Council on International Affairs Committee for Development Cooperation (AIV/COS) and Member of the Supervisory Board of B Corps Europe. As per June 30, 2017, Marilou van Golstein Brouwers did not hold any shares in Triodos Organic Growth Fund. J.J. Minnaar (1971) (as of June 1, 2017) Jacco Minnaar is Managing Director at Triodos Investment Management and Triodos Investment Advisory & Services BV. As per June 30, 2017, Jacco Minnaar did not hold any shares in Triodos Organic Growth Fund. D.J. van Ommeren (1967) Dick van Ommeren is Managing Director at Triodos Investment Management and Triodos Investment Advisory & Services B.V. He is a Member of the Board of Triodos SICAV I and a Member of the Board of the Dutch Fund and Asset Management Association (DUFAS). As per June 30, 2017, Dick van Ommeren did not hold any shares in Triodos Organic Growth Fund. L.L. Pool (1968) Laura Pool is Managing Director Risk and Finance at Triodos Investment Management and Triodos Investment Advisory & Services BV. She is also Member of the Supervisory Board of ECN (Energy Research Centre of the Netherlands) and Member of the Supervisory Board of housing cooperative De Woonplaats. As per June 30, 2017, Laura Pool did not hold any shares in Triodos Organic Growth Fund. M.H.G.E. van Golstein Brouwers (1958) Marilou van Golstein Brouwers is Chair of the Management Board of Triodos Investment Management and Triodos Investment Advisory 25

26 Fund Manager H.J.M. Hollander-van de Vondervoort (1970) Riëlla Hollander joined Triodos Investment Management as fund manager for Triodos Organic Growth Fund in May She is also head of Sustainable Food and Agriculture. Riella Hollander has over fifteen years of acquisition finance experience, having headed the Acquisition Finance team for Lloyds Bank in the Benelux and Nordics, working alongside private equity houses on mid- and large-end management buy outs in a wide range of sectors. Prior to working at Lloyds, Riëlla Hollander was active in M&A advisory (three years) and general corporate banking (four years). She holds an MBA degree from Leuven University. As at June 30, 2017, Riëlla Hollander did not hold any shares in the sub-funds of Triodos SICAV II. Legal Advisor in Luxembourg Arendt & Medernach SA 41A, Avenue John F. Kennedy L-2082 Luxembourg Grand Duchy of Luxembourg Distributor Triodos Investment Management BV Registered office: Nieuweroordweg EC Zeist The Netherlands Postal address: P.O. Box AB Zeist The Netherlands Depositary, Custodian, Paying Agent, Domiciliary, Corporate and Administrative Agent, Registrar and Transfer Agent RBC Investor Services Bank SA 14, Porte de France L-4360 Esch-sur-Alzette Grand Duchy of Luxembourg Independent Auditors PriceWaterhouseCoopers Société Coopérative 2, rue Gerhard Mercator L-2182 Luxembourg Grand Duchy of Luxembourg 26

27 Colophon Triodos SICAV II - Triodos Organic Growth Fund semi-annual report June 2017 Published August 2017 Text Triodos Investment Management, Zeist, The Netherlands Design Michael Nash Associates, London, United Kingdom Layout Via Bertha, Utrecht, The Netherlands Photography Photos in this semi-annual report haven been provided by companies in which Triodos SICAV II - Triodos Organic Growth Fund invests. If you have comments or questions about this report, please contact Triodos Investment Management. This document can be downloaded from: TLIM 27

28