Results for the year ended 31 March 2022

RNS Number : 0460Q

Triple Point Energy Efficiency

24 June 2022

 

THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION FOR THE PURPOSES OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 March 2021, prepared in accordance with section 435 of the Companies Act 2006, but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies in due course. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.

24 June 2022

Triple Point Energy Efficiency Infrastructure Company plc

("TEEC" or the "Company" or, together with its subsidiaries, the "Group")

RESULTS FOR THE YEAR ENDED 31 MARCH 2022

The Board of Triple Point Energy Efficiency Infrastructure Company plc (ticker: TEEC) is pleased to announce the Company's audited results for the year ended 31 March 2022.

	31 March 2022	31 March 2021*
Net Asset Value ("NAV")	£96.1m	£97.49m
NAV per share	96.12p	97.49p
Value of the portfolio	£78.8m	£20.88m
Ongoing charges ratio (annualised)	1.38%	1.07%
Dividend declared per share	5.50p	2.0p

* The results for the period 31 March 2021 were not for a full 12 months and, therefore, are not directly comparable to the results for the year ended 31 March 2022

Highlights

· The Company made significant progress in the deployment of capital:

o  Capital committed during the year ended 31 March 2022 amounted to £100.2 million (2021: £21 million)

o  June 2021: £8.0 million fixed rate debt investment in Spark Steam Limited, a company which owns and operates a combined heat and power asset

o  November 2021: £26.6 million acquisition of six operational, Feed in Tariff accredited, "run of the river" hydroelectric power projects in Scotland

o  December 2021: £19.6 million acquisition of a further three operational, Feed in Tariff accredited, "run of the river" hydroelectric power projects in Scotland

o  March 2022: signed contracts to provide a £45.6 million fixed rate debt facility to a subsidiary of Virmati Energy Ltd (trading as "Field"), for the purposes of building a 110MW portfolio of four geographically diverse Battery Energy Storage System (" BESS ") assets in the UK

· The portfolio valuation as at 31 March 2022 was £78.8 million (2021: £20.88 million)

o  Adjusting for commitments, at the year ended 31 March 2022, the portfolio valuation would amount to £124 million

· In March 2022, the Company entered into a loan facility agreement for a £40 million Revolving Credit Facility ("RCF") from TP Leasing Limited

· Dividends declared in respect of the year ended 31 March 2022 totalled 5.5p per share, in line with the Company's target for the year

· Net Asset Value as at 31 March 202 2 was £96.1 million (2021: £97.49 million ) , equal to a NAV per share of 96.12 pence (2021: 97.49 pence ) , largely reflecting the impact of uncovered dividends paid as a result of slower than expected deployment offsetting the uplift in valuation

· The Group's activities resulted in:

o  Energy saved: 7,113 MWh

o  CO ₂ avoided: 17,074 tonnes of CO ₂ avoided through lower emissions

o  Renewable energy generated: 9,425 MWh

· Post period-end, in June 2022, the Company committed £1 million to a lighting solutions provider to fund the installation of efficient lighting and control at a leading logistics company

· Looking towards the future, today, the Company also announced:

o  J.P. Morgan Cazenove has been appointed as the Company's sole broker with immediate effect

o  The Investment Manager will be consulting key shareholders regarding proposed amendments to the Company's Investment Policy, evolving to an "energy transition" mandate to reflect better the nature of the current portfolio and the pipeline of investment opportunities

o  Conditional on the amendment of the Investment Policy, a proposed change of name to "Triple Point Energy Transition plc"

o  Both the proposed amended Investment Policy and the new name will be put to shareholders for approval at the Annual General Meeting due to take place in August 2022

John Roberts, the Company's Chair, commented:

" In the last 12 months the Board has been pleased with the depth and breadth of the investment opportunities that have been sourced across a range of technologies and from a variety of partners. The diversity of our portfolio of lower carbon and energy efficient projects has enabled us to achieve our objective of contributing towards the transition to a lower carbon economy and assisting in the acceleration of the UK achieving its Net Zero targets.

With the IPO proceeds fully committed, as well as the majority of the RCF, and the strong performance of our existing portfolio, we look ahead with optimism as the Company maintains its focus on delivering a dividend fully covered by cash earnings and a total NAV return target of 7-8% for investors comprising sustainable and growing income and capital growth.

We thank our shareholders for their continued support and look forward to consulting with them regarding the amendments to our existing Investment Policy which we believe better reflects the nature of our existing portfolio and the exciting pipeline of opportunities ."

For further information, please contact:

Triple Point Investment Management LLP Jonathan Hick Ben Beaton	[phone]
J.P. Morgan Cazenove (Corporate Broker William Simmonds / Jérémie Birnbaum (Corporate Finance) James Bouverat / Liam MacDonald-Raggett (Sales)	[phone]
Akur Limited (Financial Adviser) Tom Frost Anthony Richardson Siobhan Sergeant	[phone]

LEI: 213800UDP142E67X9X28

Further information on the Company can be found on its website: www.tpenergyefficiency.com

NOTES:

The Company is an investment trust which aims to have a positive environmental impact by investing in assets that support the transition to a lower carbon, more efficient energy system and help the UK achieve Net Zero.

Since its IPO in October 2020, the Company has made the following investments and commitments:

· Harvest and Glasshouse : provision of £21m of senior debt finance to two established combined heat and power ("CHP") assets, located on the Isle of Wight, supplying heat, electricity and carbon dioxide to the UK's largest tomato grower, APS Salads ("APS") - March 2021

· Spark Steam : provision of £8m of senior debt finance to an established CHP asset in Teesside supplying APS, as well as a further power purchase agreement through a private wire arrangement with another food manufacturer - June 2021

· Hydroelectric Portfolio (1) : acquisition of six operational, Feed in Tariff ("FiT") accredited, "run of the river" hydroelectric power projects in Scotland, with total installed capacity of 4.1MW, for an aggregate consideration of £26.6m (excluding costs) - November 2021

· Hydroelectric Portfolio (2) : acquisition of a further three operational, FiT accredited, "run of the river" hydroelectric power projects in Scotland, with total installed capacity of 2.5MW, for an aggregate consideration of £19.6m (excluding costs) - December 2021

· BESS Portfolio : provision of a debt facility of £45.6m to a subsidiary of Virmati Energy Ltd (trading as "Field"), for the purposes of building a portfolio of four geographically diverse Battery Energy Storage System ("BESS") assets in the UK with a total capacity of 110MW - March 2022

The Investment Manager is Triple Point Investment Management LLP ("Triple Point") which is authorised and regulated by the Financial Conduct Authority. Triple Point manages private, institutional, and public capital, and has a proven track record of investment in Energy Efficiency and decentralised energy projects.

The Company was admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 19 October 2020 and was awarded the London Stock Exchange's Green Economy Mark.

CHAIR'S STATEMENT

Dear Shareholder,

I am pleased to present the results for Triple Point Energy Efficiency Infrastructure Company plc ("TEEC" or the "Company") for the year ended 31 March 2022. The past year has been one of significant events. COP26 in November 2021 brought together global leaders to address the challenges of climate change and the move to a low carbon economy. The devastating war in Ukraine has called attention to the need for greater energy security, whilst the volatile energy markets have underlined the need for energy efficiency to assist in cutting escalating energy costs. In April 2022, the UK Government's British Energy Security Strategy laid out ambitious plans to achieve Net Zero and secure clean, green and UK-made energy. For TEEC, each of these events provides a significant opportunity to contribute to the energy transition through the deployment of capital in a diversified portfolio of assets which are targeted to generate a long-term and consistent return profile for investors.

Investment Activity

There has been significant deployment and increasing diversification for the Company over the last year. The Company has now fully committed the proceeds from its IPO, as well as most of a new £40 million Revolving Credit Facility ("RCF") made available to the Company's sole wholly owned subsidiary TEEC Holdings Limited ("TEEC Holdings").

We have remained focused on maintaining strong investment discipline to ensure the portfolio is robust, diverse, and provides a good risk-adjusted return for our shareholders. Commitments during the year have been made into assets that support the transition to a low carbon, more efficient energy system: an £8 million senior debt investment into a combined heat and power plant ("Spark Steam"); a £47 million equity investment into nine hydro assets (the "Hydroelectric Portfolio"); and a £45.6 million debt facility to a subsidiary of Virmati Energy Ltd (trading as Field), to fund a 110MW portfolio of four BESS assets (the "BESS Portfolio"). The weighted average contract length of the operational assets in the portfolio is 31.6 years.

The Hydroelectric Portfolio brings recurring revenues with 96% of them underpinned by Government supported long-term Feed in Tariffs which are index linked, and PPAs with utility-grade counterparties. This was an important investment bringing diversification to the portfolio, inflation protection, and the security of revenues underpinned by long-term Government contracts - we are pleased to have such assets in our portfolio, particularly in the volatile markets that we are currently experiencing.

The Hydroelectric Portfolio was owned by entities advised by the Investment Manager and, as a result, a potential conflict of interest existed. In accordance with the provisions set out in the IPO Prospectus, the Board were required to approve the transaction and we were given comfort by the steps taken to manage and mitigate the conflict, which included separate dedicated buy and sell side teams within the Investment Manager and third-party valuations.

At the end of the period, we made a significant investment commitment into energy storage assets, a key growth area in the energy sector which efficiently manages the generation of power from renewables. TEEC has committed to provide £45.6 million to Field and has obtained exclusivity over a further 390MW/470MWh of energy storage opportunities. 

Portfolio Performance

The existing portfolio has performed well, notably with the profitability of the CHP Portfolio significantly exceeding budget driven by the higher-than-expected power prices.  The offtaker, APS, like many other agricultural producers, experienced a challenging year but remains well positioned, it being a leading supplier of British tomatoes to major UK food retailers including Aldi, Iceland, Lidl, M&S, Morrisons, Ocado, Sainsbury's, Tesco and Waitrose.

For the Hydroelectric Portfolio, in the period from 1 October to 31 March 2022, generation was 10% ahead of budget. In the final quarter of the year ended 31 March 2022, revenues were 8% below expectations given some technical issues, which have been resolved, and the uncharacteristically dry period in March.

The Investment Manager is exploring portfolio optimisation opportunities, including for instance in the Hydroelectric Portfolio to optimise the flow from the catchment area from an initial three sites to provide a better generation profile.

Please see the Investment Manager's Report for further details.

Gearing

As announced to the market on the 30 March 2022, the Group, via TEEC Holdings, has entered into a loan facility agreement for a £40 million Revolving Credit Facility (RCF) with TP Leasing Limited.

TP Leasing Ltd is an established private credit and asset leasing business which is managed by the Investment Manager and, as a result, is deemed to be a related party as defined in the Listing Rules. The RCF is deemed to be a "smaller related party transaction" for the purposes of LR11.1.10R. As set out in the IPO Prospectus, the Company has adopted a related party policy pursuant to which, prior to entering into the facility agreement, (i) the RCF was approved by the Directors and (ii) the Company obtained a fair and reasonable opinion from a qualified, independent adviser. The Board was satisfied with the conflict management procedures put in place, including team segregation within the Investment Manager and obtaining independent third-party pricing validation.

The RCF has a two-year term, with the possibility to be extended. The interest rate on the RCF is 4.5%¹ based on the Sterling Overnight Index Average ("SONIA") 2-year fixed rate of 2% and a margin of 2.5%.

The Group will make use of the RCF to fund the BESS portfolio and some of its growing pipeline of high-quality investment opportunities. The Group will follow a prudent approach to gearing with a target medium-term gearing of up to 40% of Gross Asset Value ("GAV") and a maximum gearing that will not exceed 45% of GAV at the time of drawdown.

As at 31 March 2022, the RCF had not been drawn. It is expected that the RCF will be substantially utilised during the financial year ending 31 March 2023.

Notes:

¹ Excluding fees

Pipeline

Our Investment Manager has built up an attractive pipeline of circa £500 million of opportunities across a variety of technologies and sectors with strong counterparties.

The pipeline includes a range of technologies including energy storage, solar, combined heat and power, EV charging, lighting, heat networks and other technologies. The projects are at different development stages and are a mixture of equity and debt, as well as public and private sector opportunities.

Given the large market opportunity to invest into energy storage, and the compatibility with other technologies such as solar photovoltaic panels, we believe that energy storage presents an attractive asset class to add to the TEEC portfolio which can help unlock the true potential of renewable energy and will play a fundamental role in the move to a clean energy future.

Please see the Investment Manager's Report for further details.

  Financial Results

This was the Company's first full financial year. The NAV per share was 96.12 pence per share as at 31 March 2022 (31 March 2021: 97.49 pence per share). The NAV includes an uplift in valuation as a result of the Hydroelectric Portfolio being valued upwards by £4.1 million, largely due to the heightened inflationary environment we are now operating within and the increased forecast power prices which have been exacerbated by the Russian invasion of Ukraine. This offsets the negative impact of the dividend payments which have, to date, largely been paid out of capital while the Company has ramped up its deployment.

The portfolio, consisting of 12 funded assets (and four unfunded but committed assets) held via the Company's subsidiary TEEC Holdings, was valued at £78.8 million as at 31 March 2022 (31 March 2021: £21.0 million) and the Company held cash of £17.1 million as at 31 March 2022 (31 March 2021: £76.6 million). The Company made a profit before tax of £4.8 million for the year (31 March 2021: loss of £0.5 million), equal to 4.76 pence per share (31 March 2021: 0.01p loss).

The Company's annualised operating cost ratio ("OCR") was 1.38% (31 March 2021: 1.07%). The increase in the OCR is predominately driven by the increase in management fees payable to the Investment Manager. In accordance with the Investment Management Agreement, upon reaching 75% deployment of the IPO proceeds, the management fee is calculated by reference to the Company's NAV. This point was reached in December 2021, whereas it was previously charged on deployed proceeds only. The Board will continue to monitor the OCR closely as we seek to grow the Company and achieve economies of scale on fixed costs, delivering value to our shareholders.

Share Price and Distributions

Our share price has experienced a volatile period, as has much of the market due to macro-economic market conditions.

In February 2022, the Investment Manager purchased 158,882 Ordinary Shares at an average price of 94.4 pence per share.

For the year ended 31 March 2022, we declared a total dividend of 5.50 pence per share, in line with our target. 

The Board anticipates paying quarterly interim dividends, targeting total dividends of 5.50 pence per share for the year ending March 2023². We remain focused on delivering a dividend fully covered by cash earnings as soon as practicable and to that end, notes that in the year ending 31 March 2023, the Company will benefit from a full year of income from the CHP Portfolio and Hydroelectric portfolio, as well as income from the BESS Portfolio.

Notes:

² The dividend and return targets stated are Pounds Sterling denominated returns targets only and not a profit forecast. There can be no assurance that these targets will be met, and they should not be taken as an indication of the Company's expected future results.

Environmental, Social and Governance ("ESG")

The Company has adopted an approach to ESG which reflects the importance of sustainability to the investment policy and to maximise the potential for our ESG integration to add value to the strategy.

A current key focus is ensuring the Investment Manager continues to refine its approach to the integration of climate change into investment decision making. Accounting for the risks and opportunities associated with our changing climate is important for protecting the Company's assets and maximising their potential. We will continue to hold the Investment Manager to account on this issue and expect continued progression in the maturity of climate analysis for TEEC. Details on the Investment Manager's approach to ESG integration, including climate analysis and the Task Force on Climate-related Financial Disclosure (TCFD), are shared in the Sustainability Report.

Proposed amendments to the Group's Investment Policy

Since the Company's IPO in October 2020, we have seen a rapid evolution in clean energy policy, the commitment to addressing the global climate emergency, concerns regarding energy security and the opportunities that exist for investments which both contribute to energy transition and deliver returns to our shareholders. Therefore, as we have announced today, the Investment Manager is undertaking a consultation with key shareholders regarding amending our existing Investment Policy to reflect better the nature of our existing portfolio and pipeline of opportunities.

The key aspects of the proposed amendments include: confirming the scope of the Company's investment mandate to reflect the wider energy transition sector; expanding our geographical reach to enable the Company to make appropriate investments in Europe, albeit the United Kingdom will remain the core focus of the Company; clarify the structures that the Company is able to invest into, including both debt and equity; and including a definition of "Adjusted Gross Asset Value" in place of "Gross Asset Value" for the purposes of applying the Investment Policy restrictions.

In conjunction with (and dependent on approval of) the proposed changes to the Investment Policy, the Company's name will change to "Triple Point Energy Transition plc" (ticker: TENT) to reflect the revised mandate.

Subject to the outcome of the consultation and Board decision, the proposals to amend the Investment Policy and name of the Company (the " Proposals") will be put to the vote of all shareholders at the Company's Annual General Meeting to be held in August 2022.

Full details of the Proposals will be notified via a further announcement to the market and set out in the circular accompanying the Notice of AGM to be sent to shareholders in due course.

Appointment of Sole Corporate Broker

Today, the Board was pleased to announce the appointment of J.P. Morgan Securities plc (which conducts its UK investment banking activities as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove") as sole corporate broker to the Company with immediate effect. We look forward to working with J.P. Morgan Cazenove as the Company embarks on the next phase of its growth,

Outlook

The Board is pleased to have fully committed the IPO proceeds, as well as the majority of the RCF, in the Company's first full year of operation. The investments made to date into hydroelectric power, energy storage and onsite heat and power generation exemplify the Company's strategy of investing into lower carbon, efficient energy systems. We are also satisfied by the total NAV return of 4.9% achieved in the year and are well positioned to achieve our objective of a 7-8% total NAV return, as the Company is now fully committed. 

In 2021, Jonathan Hick joined Triple Point with the intention that he would assume the position as the TEEC Fund Manager, following a comprehensive induction period. The Board are pleased that following a successful transition he will become the Company's fund manager effective immediately, replacing Jonathan Parr who will assume a new role at Triple Point focused on the Investment Manager's wider product strategy. The Board would like to thank Jonathan Parr for his management during the launch and throughout TEEC's first full financial year.

The recent record high energy prices, as well as higher expectations for power prices over the next few years, provide significant tailwinds for the Company, both with respect to its existing assets as well as its pipeline. Energy is increasingly becoming too valuable to waste, and whether that means storing it more effectively to better match demand, producing it onsite, or reducing demand, we are seeing businesses and government organisations prioritising the efficient use of energy. The Company's pipeline of circa £500 million, spread across a diverse range of technologies, demonstrates this increased focus.

The devastating events in Ukraine have also highlighted the importance of a low carbon, efficient energy system to energy security. This is partly achieved through reducing our exposure to fossil fuels through increased renewable generation, and through reducing energy usage, making the energy generated go further and optimising energy generation locally. TEEC's portfolio and pipeline illustrate how this can be achieved in practice.

In addition to the beneficial tailwinds from the energy pricing and the focus on energy security, a significant proportion of the Company's investments also benefit from a rising inflationary environment. This can be through the explicit contractual linkage to inflation, for example the Feed in Tariff contracts that the Hydroelectric Portfolio benefit from RPI indexation, or through the broader correlation between inflation and wholesale energy prices.

COP26 signaled the intention to transition to a new energy system, one that the Company is well positioned to take advantage of.

I would like to thank shareholders for their continued support of the Company, and I look forward to reporting on the achievement of our objectives in the year ending 31 March 2023. 

John Roberts

Chair

23 June 2022

STRATEGY AND BUSINESS MODEL

The Board is responsible for the Company's Investment Objective and Investment Policy and has overall responsibility for ensuring the Company's activities are in line with such overall strategy. The Group's Investment Objective and Investment Policy are published below.

As noted in the Chair's statement, the Investment Manager is undertaking a consultation with key shareholders regarding the proposed amendment of the Company's investment policy, following which a resolution will be proposed at the upcoming AGM. The Company's existing investment policy is set out below.

Investment Objective

The Company's Investment Objective is to generate a total return for investors comprising sustainable and growing income and capital growth. The Company intends to achieve its Investment Objective by investing in a diversified portfolio of energy efficiency investments in the United Kingdom.

Investment Policy

The Company intends to achieve its Investment Objective by investing in a diversified portfolio of energy efficiency investments in the United Kingdom. The term energy efficiency refers to assets or processes which reduce primary energy input for a given output, thereby reducing or eliminating energy waste. Energy efficiency is one of the cornerstones of the global drive to addressing the climate emergency. The cleanest or greenest energy is the energy that is never used - the projects and assets which deliver such savings are the focus of the Company.

The Group will invest in a range of assets which will contribute or are already contributing to energy efficiency in sub-sectors including electricity and heat generation, distribution and end user consumption, and which meet the following criteria:

· contribute towards demonstrable energy (and financial) savings over a "business as usual" scenario;

· are established technologies (the Group will not invest in unproven technologies);

· provide long-term contracts based predominantly on availability, government subsidy or savings-based contracts with high quality industrial, governmental, and corporate Counterparties, including Counterparties which represent multiple end-users; and

· entitle the Company to receive stable, predictable Sterling cash flows over the medium to long-term.

The Group's returns will typically take the form of contractual payments by Counterparties in respect of equipment, usually installed at their premises (and which may provide index-linked, rental payments), as well as payments under off-take agreements in respect of energy generated and, where available, the Group will capitalise on government incentive programmes.

Contractual payments by Counterparties are expected to be predominantly availability, government subsidy or savings based. Availability payments will be receivable on the basis that the equipment is available and in suitable working order to deliver the applicable outputs; savings-based payments work by setting an agreed baseline for savings in kWhs up-front and are then ascribed a monetary value by applying the prevailing energy cost, with annual increases based on an agreed energy price index insulating the Company from any changes in the cost of energy.

The Group will invest predominantly in operational energy efficiency projects. It will invest in either single assets or portfolios of multiple assets, via debt and/or equity structures. The Group may, under certain circumstances, invest in energy efficiency projects that are in the Development Phase, the Construction Phase or the Stabilisation Phase, either directly or through funding of a third-party developer, where such investments will deliver an attractive risk adjusted return. In addition, the Group may invest in or acquire minority interests in companies with a strategy that aligns with the Company's overarching Investment Objective, such as developers, operators or managers of energy efficiency projects, subject to the restrictions set out below.

In respect of each type of investment, the Group will seek to diversify its commercial exposure by contracting, where practicable, with a range of different equipment manufacturers, project developers and other service providers, as well as off-takers.

Investments may be acquired from a single or a range of vendors and the Group may also enter into joint venture arrangements alongside one or more co-investors, where the Group retains control or has strong minority protections.

Investment Restrictions

The Company will invest and manage its assets with the objective of spreading risk and, in doing so, will maintain the following investment restrictions:

· no single Energy Efficiency Project investment by the Group will represent more than 20% of Gross Asset Value;

· the aggregate maximum exposure to any Counterparty will not exceed 20% of Gross Asset Value (and where an energy efficiency project derives revenues from more than one source, the relevant Counterparty exposure in each case shall be calculated by reference to the proportion of revenues derived from payments received from the Counterparty, rather than any other source);

· the aggregate maximum exposure to energy efficiency projects in the development phase and the construction phase will not exceed, in aggregate, 25% of Gross Asset Value, provided that, the aggregate maximum exposure to projects in the development phase will not exceed 5% of Gross Asset Value, and the aggregate exposure to any one developer will not exceed 10% of Gross Asset Value;

· the Group will not invest more than 5% of Gross Asset Value, in aggregate, in the acquisition of minority stakes in other related companies, and at all times such investments will only be made with appropriate minority protections in place;

· neither the Company nor any of its subsidiaries will invest in any UK listed closed-ended investment companies; and

· the Company will not conduct any trading activities which are significant in the context of the Group as a whole.

The investment limits set out above apply following full investment of the Net Proceeds and following the Group becoming substantially geared (meaning for this purpose borrowings by way of long-term structural debt of 20% of Gross Asset Value being put in place).

Compliance with the above investment limits will be measured at the time of investment and non-compliance resulting from changes in the price or value of assets following investment will not be considered as a breach of the investment limits.

Gearing

The Directors intend to use gearing to enhance the potential for income returns and long-term capital growth, and to provide capital flexibility. However, the Company will always follow a prudent approach for the asset class with regards to gearing, and the Group will maintain a conservative level of aggregate borrowings.

Gearing will be employed at the level of the Company, at the level of any intermediate wholly owned subsidiary of the Company or at the level of the relevant Project SPV, and any limits shall apply on a look-through basis. The Company's target medium term gearing for the Group will be up to 40% of Gross Asset Value, calculated at the time of drawdown.

The Group may enter into borrowing facilities at a higher level of gearing at the intermediate subsidiary level or at the Project SPV level, provided that the aggregate borrowing of the Group shall not exceed a maximum of 45% of Gross Asset Value, calculated at the time of drawdown.

Debt may be secured with or without a charge over some or all the Group's assets, depending on the optimal structure for the Group and having consideration to key metrics including lender diversity, cost of debt, debt type and maturity profiles. Intra-group debt between the Company and subsidiaries will not be included in the definition of borrowings for these purposes.

Use of Derivatives

The Group may use Derivatives for efficient portfolio management. The Group will only enter into hedging contracts (in particular, in respect of inflation, interest rate, electricity price and commodity price hedging) and other derivative contracts when they are available in a timely manner and on acceptable terms. The Company reserves the right to terminate any hedging arrangement in its absolute discretion. Any such hedging transactions will not be undertaken for speculative purposes. The Company will not employ derivatives for investment purposes.

Cash Management

Whilst it is the intention of the Company to be fully or near fully invested in normal market conditions, the Company may hold cash on deposit and may invest in cash equivalent investments, which may include government issued treasury bills, money market collective investment schemes, other money market instruments and short-term investments in money market type funds ("Cash and Cash Equivalents").

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalent position instead of being fully or near fully invested.

Changes to and compliance with the Investment Policy

Any material changes to the Company's Investment Policy set out above will require the approval of Shareholders by way of an ordinary resolution at a general meeting.

In the event of a breach of the investment guidelines and/or the investment restrictions set out above, the Investment Manager shall inform the Board as soon as practicable upon becoming aware of any breach. If the Board considers the breach to be material, notification will be made through an announcement via a Regulatory Information Service.

Business Model

TEEC sources opportunities to deploy investors' capital into energy efficiency and distributed energy projects that support the transition to a sustainable energy future. We interact with a wide variety of energy market participants, from individual project developers with a single-technology solution, to large corporations with multi-technology opportunities. The energy transition to a more sustainable future is a huge challenge and at the same time it is a great opportunity. It is dependent on multiple parties working together to design, finance, install and maintain energy infrastructure to more efficiently generate, store, distribute and use energy with equipment that does so as efficiently as possible. This will reduce the amount of wastage of energy and other resources and help to protect the environment from further damage.

TEEC is well positioned to make a significant contribution to the energy transition as it is focused on investing into onsite energy generation and efficient consumption, distributed energy generation and energy storage and distribution. It is the deployment of capital to fund technological solutions such as energy storage, hydroelectric power, CHP plants, lighting, building management systems, solar, wind or other energy efficient technologies, that enables the transition to a sustainable energy future.

TEEC focuses on investment opportunities that contribute to our total NAV return for investors of between 7-8%. The investments made by the Group fund technologies which provide solutions for counterparties who contract through TEEC investee companies to pay for these solutions. The payments are, for instance, through interest and principal debt repayments from a counterparty that is borrowing money from the Group, or through returns from an equity investment that is providing a solution for a counterparty, or for example through generating energy supplied to the grid. Contractual structures include power purchase agreements, energy services agreements or other such structures, which in some cases may provide index-linked payments. The cash flows generated from the contracts with the counterparties pay for the investment made by the Group and enable TEEC to pay dividends to its shareholders.

To reduce risks involved with the investments made by the Group, we seek strong counterparties and diversify the portfolio by counterparty, technology, location, type of investment as well as other measures dependent on the specificities of each investment. In addition, we carry out due diligence as required for each investment to properly understand the risks and opportunities of the project. We particularly focus on the ESG aspects of the investment opportunity and go through a risk and opportunities assessment from an ESG perspective. The due diligence process, dependent on the requirements of each investment, can involve ESG, legal, technological, financial, accounting, tax, or other types of due diligence, involving both internal Triple Point employees as well as third party specialist firms.

The combination of the need to transition to sustainable energy generation and usage, along with TEEC's ability to fund this transition, make for a great opportunity to be optimised.

KEY PERFORMANCE INDICATORS

The Company sets out below its KPIs which it uses to track the performance of the Company over time against the objectives , as described in the Strategic Report.

The Board believes that the KPIs detailed below provide shareholders with sufficient information to assess how effectively the Company is meeting its objectives. The Board monitors these KPIs on an ongoing basis .

KPI AND DEFINITION	RELEVANCE TO STRATEGY	PERFORMANCE	EXPLANATION
Dividends per share 3
Dividends paid to shareholders and declared in relation to the year.	The dividend reflects the Company's ability to deliver a low -risk income stream from the portfolio	The Company is paying a 5.50 pence per share dividend in respect of the year ended 31 March 2022 (2.00 pence per share for the period to 31 March 2021 ).	The Company's target was to pay a dividend of 5.50 pence per share in respect of the year to 31 March 2022, which it achieved.
Total NAV return 4
NAV growth and dividends paid per share in the year.	The total NAV return measure highlights the gross return to investors including dividends paid.	4.9% (Negative 2.5% for the year to 31 March 2021)	Dividends paid in the year contributed 6.3% to total NAV return which was partially offset by a 1.4% reduction in NAV. The target total NAV return is 7% - 8% per annum. Underperformance was attributable to dividends paid in the year, being substantially uncovered. During the year, the proceeds from the IPO and a majority of the RCF have been committed, which on an annualised basis will be accretive to NAV.
NAV per share
NAV divided by number of shares outstanding as at the period end.	The NAV per share shows our ability to grow the portfolio and to add value to it throughout the life cycle of our assets	96.12 pence per share. (97.49 pence per share for the year to 31 March 2021)	£96.1 million/ 96.12 pence per share as at 31 March 2022
Cash dividend cover 3 4
Operational cash flow divided by dividends paid to shareholders during the year.	Reflects the Company's ability to cover its dividends from the income received from its portfolio.	0.14x.The Company will monitor dividend cover as the Company continues to deploy funds. (N/A for the year to 31 March 2021)	The Company maintained its dividend target, despite slower than originally anticipated commitment of IPO proceeds. Now the Company is substantially committed on a levered basis, cash dividend cover is forecast to improve significantly. The Company will be fully dividend covered by cash flows generated in the underlying investments as soon as practicable and to that end, note that in the year ending 31 March 2023, the Company will benefit from a full year of income from the CHP Portfolio and Hydroelectric portfolio, as well as income from the BESS Portfolio.
Weighted average project life ("WAL") 4
Weighted average number of years assumed to be remaining in project contracts.	The weighted average project life is a key measure of the quality of our portfolio. Long lease or loan terms help underpin the security of our income stream.	31.6 years (10.0 years for the year to 31 March 2021)	The Portfolio WAL is driven by the long project life of the Hydroelectric Portfolio and debt investments providing long term cash flows. Growth in the WAL has been largely delivered through deployment into the Hydroelectric portfolio which have attractive long term cash flows.
Ongoing Charges Ratio ("OCR") 4
Annualised ongoing charges (i.e., excluding acquisition costs and other non-recurring items) divided by the average published undiluted NAV in the period, calculated in accordance with Association of Investment Companies guidelines.	Ongoing charges shows the effect of the operational expenses incurred by the Company.	1.38% annualised (1.07% for the year to 31 March 2021)	Company level budgets are approved annually by the Board and actual spend is reviewed quarterly. This is a key measure of our operational performance. Keeping costs low supports our ability to pay dividends. The increase in OCR has been driven by the management fee being measured in reference to NAV, as IPO proceeds were substantially deployed in the year, prior to this they were charged in reference to deployment.
Avoided emissions 4
The carbon emissions avoided by the Company's investments.	A measure of our success in investing in projects that have a positive environmental impact through a decrease in CO 2 emissions compared to an equivalent asset.	17,074 tonnes CO 2  avoided in the year ended 31 March 2022 (0 tonnes CO 2 avoided for the year to 31 March 2021)	The t CO 2 avoided has increased compared to end of year 2021 as expected, given the Company's continued deployment.

Gross loan to value ("LTV") 4
The proportion of our GAV that is funded by borrowings.	The LTV measures the prudence of our financing strategy, balancing the potential amplification of returns and portfolio diversification that come with using debt against the need to successfully manage risk.	0% (0% for the year to 31 March 2021)	The Group will follow a prudent approach to gearing with a target medium-term gearing of up to 40% of GAV and a maximum gearing that will not exceed 45% of GAV at the time of drawdown. On full drawdown of the RCF Gross LTV is expected to be around 30% based on prevailing NAV and future funding of the BESS Portfolio.

Notes:

³  Investors should note that references to "dividends" and "distributions" are intended to cover both dividend income and income which is designated as an interest distribution for UK tax purposes and therefore subject to the interest streaming regime applicable to investment trusts.

⁴ Alternative Performance Measure.

INVESTMENT MANAGER'S REPORT

Review of the Period

Late last year, COP26 in Glasgow closed with a renewed commitment to limiting global warming to 1.5 degrees above pre-industrial levels. The UK has committed to Net Zero emissions by 2050. That is an ambitious target that will require a "historic surge" in clean energy investment. The adoption of renewable energy will be key to our Net Zero ambitions, but for any push to Net Zero it is crucial we make better use of the energy we produce. We need to be more energy efficient. The government has a large part to play, of course, by committing to long-term policies that encourage investment in clean energy infrastructure, but private capital is also a key component to driving decarbonisation and supporting the Net Zero mission.

We have now fully committed the IPO proceeds, in addition to the majority of the proceeds from the RCF that were put in place at the end of the year. Proceeds have been committed while maintaining strong investment discipline to ensure the portfolio construct is robust, diverse and provides a good risk adjusted return for our shareholders. As a result of being committed on a levered basis, the portfolio is well positioned to deliver financial returns on an annualised basis. Harvest & Glasshouse and Spark Steam have shown their ability to perform and deliver strong returns despite high gas prices, as a result of the even higher electricity prices and benefitting from the spark spread. The Hydroelectric Portfolio has demonstrated the attractiveness of stable long-term revenues from government supported Feed in Tariffs. The BESS Portfolio will be able to store energy and supply it when needed rather than energy and revenues being wasted when there is a surplus of production.

The war in the Ukraine and the embargo on Russian oil and gas have raised the importance of energy security. Energy prices have significantly increased, due to geopolitical risk, as well as the strong demand for natural gas. Gas supply is limited and there is strong demand from many countries given low existing stocks as well as a strong internal demand. TEEC's portfolio contributes to strengthening the UK's energy infrastructure through efficient energy generation and energy storage, providing greater energy security.

From a technology perspective, we are seeing a number of technologies where prices have been increasing as a result of supply and demand imbalances and the shortage of semiconductors. An example is solar photovoltaic prices, which have seen price increases in solar panel costs from China. Where we are investing in such projects, TEEC will sign fixed price contracts to ensure it is protected from further price volatility at the point of investment. From a longer-term perspective, however, we have seen price decreases as efficiencies in production and economies of scale have worked to reduce costs.

What is clearly not in debate is the need to deploy energy efficiency measures on a massive scale in order to be able to transition to a sustainable energy infrastructure and to improve energy security. TEEC is well positioned to assist in that transition and we have an attractive pipeline of opportunities in which to invest.

Investments

Spark Steam

In May 2021, and building on the previous year's debt investments in Harvest and Glasshouse, TEEC invested £8 million of senior debt finance into Spark Steam, a CHP providing heat, power and carbon dioxide to APS which is the UK's leading supplier of British tomatoes and has over 65 years of operational experience. APS owns and operates over six million sq. ft. of glasshouses and distributes to all major UK food retailers including Aldi, Iceland, Lidl, M&S, Morrisons, Ocado, Sainsbury's, Tesco and Waitrose. CHPs ensure an efficient use of energy to provide on-site power generation with use of heat and carbon dioxide to enhance crop yields rather than being vented into the atmosphere.

In addition, there is a Power Purchase Agreement ("PPA") with a well-known, large food manufacturer through a private wire arrangement. This arrangement benefits the food manufacturer by providing it with savings against its electricity costs, whilst enabling Spark Steam to benefit from a greater level of contractual cash flows at more attractive rates. Based on National Grid Electricity Transmission data avoidance of the electricity transmission system (or grid) is likely to result in approximately 2.25% efficiency increase. Reducing transmission traffic also helps to bring marginal benefits of reduced congestion on the grid which increases its energy efficiency. 

Hydroelectric Portfolio

In November 2021, TEEC invested £27 million in the purchase of six operational hydroelectric assets. This was followed in December 2021 with a second investment into a further three operational hydroelectric assets for £20 million. The Hydroelectric Portfolio brings recurring revenues with 96% of them underpinned by Government supported long-term Feed in Tariffs which are index linked, and PPAs with utility counterparties. This was an important investment bringing diversification to the portfolio from an attractive asset class.

The Hydroelectric Portfolio consists of run-of-the-river hydroelectric schemes located across the Scottish Highlands. The schemes were developed by Green Highland Renewables, who continue to provide operations and maintenance services. The schemes were commissioned during 2015 and 2016 and range from 0.4MW to 1.35MW output. The performance of a hydroelectric scheme is primarily driven by the availability of a scheme and the flow of water available.

BESS Portfolio

In March 2022, TEEC committed £45.6 million to fund a portfolio of four geographically diverse BESS assets in the UK. The portfolio has a total capacity of 110MW. The first BESS asset, which is a one-hour duration battery, is expected to become operational in Q2 of the financial year ending 31 March 2023. It is located in the North of England and has a total capacity of 20MW. The other three BESS assets are located in Scotland (two-hour duration battery; total capacity 50MW), Wales (two-hour duration battery; total capacity 20MW), and the South-East of England (one-hour duration battery; total capacity 20MW). These are expected to become operational during 2023.

Portfolio Overview

Credit Counterparty

As at 31 March 2022

Non-Investment Grade - Unrated	29.3%
Investment Grade - Rated	52.8%
Cash	17.9%

Investment Type

As at 31 March 2022

Debt	29.3%
Equity	52.8%
Cash	17.9%

Lifecycle Stage

As at 31 March 2022

Operating	81.4%
Construction	0.7%
Cash	17.9%

Technology Exposure

As at 31 March 2022

CHP	28.6%
Hydro	52.8%
BESS	0.7%
Cash	17.9%

Asset Exposure

As at 31 March 2022

Harvest	10.7%
Glasshouse	10.1%
Spark Steam	7.8%
Green Highland Allt Choire A Bhalachain (255) Limited	4.2%
Elementary Energy Limited	3.0%
Green Highland Allt Ladaidh (1148) Limited	7.8%
Green Highland Allt Luaidhe (228) Limited	4.5%
Green Highland Allt Phocachain (1015) Limited	9.1%
Achnacarry Hydro Limited	24.2%
BESS	0.7%
Cash	17.9%

Portfolio performance

Harvest and Glasshouse

Harvest and Glasshouse revenues and EBITDA significantly exceeded budget driven by the higher-than-expected power prices . The primary off-taker is APS which is the UK's leading supplier of British tomatoes and, like other businesses in the agricultural and food production sectors, it has experienced a challenging year, citing labour shortages and lower than expected crop yields. It is, however, well-positioned for future growth, producing approximately one third of the UK's tomato production with distribution to the major UK food retailers.

Spark Steam

Spark Steam revenue and EBITDA exceeded budget driven by the higher-than-expected power prices . The off-takers include APS, the leading supplier of British tomatoes and a well-known large food manufacturer. Both companies are well-positioned as suppliers of food items to leading UK supermarkets. This year Spark Steam has avoided 1,891 t CO ₂ carbon emissions.

Hydroelectric Portfolio

TEEC completed the acquisition of the Hydroelectric Portfolio at the end of 2021, but with economic ownership effective from 1 October 2021. In the period from 1 October to 31 March 2022, generation was 10% ahead of budget. In the final quarter of the year ended 31 March 2022, revenues were 8% below expectations given some technical issues, which have been resolved, and the uncharacteristically dry period in March. Prior to acquisition, we commissioned new hydrology studies to give confidence in the long-term generation capability. The operations and maintenance team remain confident that variance in rainfall over a long period (e.g., 10 years) is generally low and therefore the 40-year average rainfall is expected to be achieved. Extreme weather with exceptionally high rainfall can result in not all the water being utilised, which provides improvement opportunities.

In the coming year, attention will be focused on how to boost performance through asset management and working with the operations and maintenance team at Green Highland Renewables. Work has commenced to establish the cost/benefit of enhancing the performance of the Hydroelectric Portfolio further, which includes the reinstatement of peatland, that has associated environmental benefits.

96% of revenues for the Hydroelectric Portfolio are underpinned by Government supported Feed in Tariffs with a remaining period of c.14 years.

All Feed in Tariff revenues enjoy annual indexation to UK RPI. With the current high level of UK RPI, this has resulted in Feed in Tariff rates being adjusted upwards by RPI of 7.5%, effective from 1 April 2022, which has given an uplift to revenues and underpins the highly defensive and attractive nature of this portfolio.

Portfolio Valuation

The Investment Manager is responsible for carrying out the fair market valuation of the Group's investments. The Company engages Mazars as an external, independent, and qualified valuer to assess the validity of the discount rates used by the Investment Manager in determination of fair value. Portfolio valuations are carried out on a semi-annual basis as at 31 March and 30 September each year.

For non-market traded investments (being all the investments in the current portfolio), the valuation is based on a discounted cash flow methodology and adjusted in accordance with the International Private Equity Valuation Guidelines where appropriate to comply with IFRS 13 and IFRS 10, given the special nature of portfolio investments.

The valuation for each investment in the portfolio is derived from the application of an appropriate discount rate to reflect the perceived risk to the investment's future cash flows to give the present value of those cash flows. The Investment Manager exercises its judgement in assessing the expected future cash flows from each investment based on the project's expected life and the financial model produced by each project entity. In determining the appropriate discount rate to apply to a given investment the Investment Manager takes into account the relative risks associated with the revenues. For the year ending 31 March 2022, the discount rates range from 5% to 8% (31 March 2021: 8%).

The valuation of the portfolio by the Investment Manager and reviewed and supported by the Directors as at 31 March 2022 was £78.8 million (31 March 2021: £21.0 million).

Valuation movements

The CHP Portfolio has been held at par, while there is scope for a discount rate that are lower than the interest rates on the CHP Portfolio which derive a par valuation, this is offset by relatively limited prepayment protections supporting a par valuation. The small initial loan to the BESS Portfolio has been valued at par as the initial drawdown took place on 31 March 2022 with fair value being equal to the upfront costs. As a result of the loan investments, being valued at par, the fair value movements in the year are attributable, in its entirety, to revised cash flows in relation to the Hydroelectric portfolio. The discount rate on the Hydroelectric Portfolio has remained equal to the discount rate at acquisition. 

The breakdown of the movement in the Directors' valuation can be found in the Annual Report.

The opening valuation as at 31 March 2021 was £21.0 million. Allowing for, in year cash investments comprising a debt investment in Spark Steam of £8.0 million, £46.5 million into the Hydroelectric Portfolio, £0.7 million into the BESS Portfolio and £1.6 million of principal repayments from the CHP Portfolio, the rebased valuation at 31 March 2022 was £74.7 million.

Each movement between the rebased valuation of £74.7 million and the 31 March 2022 valuation of £78.8 million is considered in turn below:

Inflation

Over 2021, as the initial impacts of the pandemic fall out of the inflation figures, and supply constraints take hold, inflation has increased markedly. Feed in Tariff rates, for example, were adjusted upwards by RPI of 7.5%, effective from 1 April 2022. In February 2022, the Russian invasion of Ukraine, in addition to the multiple primary impacts felt in Ukraine itself, has placed significant upward pressure on inflation, in part due to the sharply higher cost of energy and some commodities.

Given the quantum of the increase, consensus amongst the forecasters and broad increases across prices in multiple sectors, portfolio inflation assumptions have been updated. Our assumption for long-term RPI has moved to 3.00% for 2023, through to 2030, before falling to 2.40%. Our assumption for CPI has moved to 2.25%, for 2023 and stays flat thereafter. We also model a power curve indexation assumption, as wholesale power prices are not intrinsically linked to consumers' prices, of 2.75% for 2023 staying flat thereafter.  The updated inflation assumptions have been accretive to the valuation of the Hydroelectric Portfolio by £5.1 million.

Power Prices

The valuation as at 31 March 2022 applies long-term, forward looking power prices from a leading third -party consultant. A blend of the last three quarters central case forecasts is taken. Where fixed price arrangements are in place, the financial model will reflect this price for the relevant time and subsequently revert to the power price using the methodology described. The updated power price forecast has been accretive to the valuation of the Hydroelectric Portfolio by £0.3 million.

Energy Yields

For the Hydroelectric Portfolio, the energy yield assumption is predicated on a P50 level of electricity output based on reports prepared by technical advisers prior to acquisition. Since acquisition, TEEC has made a prudent adjustment (5%) to that energy yield, primarily to enable it to obtain further comfort as to the appropriate ongoing assumption with respect to curtailment across the portfolio. The P50 output is the estimated annual amount of electricity generation that has a 50% probability of being exceeded and a 50% probability of being underachieved over the life of the asset .

Balance of Portfolio Return 

This refers to the balance of valuation movements in the year ending 31 March 2022 (excluding the above) which has been accretive to valuations of £2.0 million. The balance of portfolio return is calculated as the expected return, reflecting the net present value of future cash flows brought forward to the valuation date at the prevailing discount rate.

The main drivers of the portfolio return have been updated cost forecasts reflecting agreements entered into in relation to the Hydroelectric Portfolio post acquisition and the impact of an optimised capital structure which includes shareholder loans.

Investment Obligations

At 31 March 2022, the Company had outstanding investment commitments , in relation to the BESS Portfolio which has a total capacity of 110 MW.

BESS asset	Battery hour duration	Location	Size in MW	Expected operational date
1st BESS asset	One hour	North of England	20 MW	Q2 FY2023
2nd BESS asset	Two hours	Scotland	50 MW	2023
3rd BESS asset	Two hours	Wales	20 MW	2023
4th BESS asset	One hour	South-East England	20 MW	2023

The investment into the BESS Portfolio amounts to £45.6 million via a fixed rate debt facility.

Key terms of the debt facility include:

· funding will only occur once key Engineering, Procurement and Construction ("EPC") milestones have been approved . It is expected that draw down will take place substantially over the financial year ending 31 March 2023;

· committed amortising term of 18.25 years following an initial 1-year period;

· increased yield in the event of inflation (consumer price index) exceeding base case expectations, subject to a cap;

· security including, amongst other rights, charges over the assets of the Borrower;

· TEEC Holdings will receive an arrangement fee, annual monitoring fees, and a non-utilisation fee on undrawn amounts of the facility; and

· Field benefits from an ESG margin ratchet which delivers a potential reduction in the rate payable if ambitious avoided carbon targets are met during trading.

Fully Invested Portfolio Valuation

The valuation of the portfolio on a fully invested basis can be derived by adding the valuation at 31 March 2022 and the expected outstanding commitments are as follows:

			£'000
Portfolio valuation as at 31 March 2022			78,787
Future investment commitments at cost			44,941
Portfolio valuation once fully invested			123,728

Key Sensitivities

The following table illustrates the sensitivity of the Company's NAV per share to changes in key input assumptions (with labels indicating the impact on the NAV in pence per share of the sensitivities):

Discount rate	+0.5%	-0.5%
NAV sensitivity	(3.0p)	3.3p

Energy Yields	+10%	-10%
NAV sensitivity	3.1p	(3.2p)

Power prices	+10%	-10%
NAV sensitivity	2.6p	(2.2p)

Inflation	+0.5%	-0.5%
NAV sensitivity	2.5p	(2.3p)

For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case assumption, and that the number of investments in the portfolio remains static throughout the modelled life.

Financial Review

The Company applies IFRS 10 and qualifies as an investment entity. IFRS 10 requires that investment entities measure investments, including subsidiaries that are themselves investment entities, at fair value except for subsidiaries that provide investment services which are required to be consolidated.

The Company's single, direct subsidiary, TEEC Holdings, is the ultimate holding company for all the Company's investments.

It is, itself, an investment entity and is therefore measured at fair value.

NAV

The Company's NAV as well as the valuation of the investment portfolio are calculated semi-annually on 30 September and 31 March each year. Valuations are provided by the Investment Manager and are subject to review by Mazars with the other assets and liabilities of the Company calculated by the Administrator. The NAV is reviewed and approved by the Board. All variables relating to the performance of the underlying assets are reviewed and incorporated in the process of identifying relevant drivers of the discounted cash flow valuation. 

NAV Bridge for the year ended 31 March 2022

The NAV bridge can be found in the Annual Report.

The movement in NAV was driven by the following factors:

Investment income of £2.5 million representing interest income to TEEC , via TEEC Holdings, from the interest on the CHP Portfolio and the shareholder loans to the Hydroelectric Portfolio.

Fund expenses of £1.3 million and dividends paid in the year of £6.1 million.

The net impact of investment income, fund expenses and dividends paid led to a reduction in NAV of £4.9 million. This was partially offset by upward revaluation of £3.6 million of the Company's, sole, wholly owned subsidiary TEEC Holdings, the entity through which investments are purchased and measured at fair value.

The Company's NAV also benefitted from a relatively immaterial £13,000 uplift through the issuance of new shares to the Investment Manager in accordance with the Investment Management Agreement under which 20% of the management fee is applied to the purchase of shares in the Company. During periods where the Company's shares trade at a premium to NAV, the Company issues new shares at the prevailing NAV. During periods where the Company's trade at a discount to NAV, the Investment Manager purchases shares in the secondary market.

Operating Results

The Company was incorporated on 23 June 2020. The comparative figures cover the period from 23 June 2020 to 31 March 2021, therefore are not comparable with the amounts presented for the full year ended 31 March 2022.

Profit before tax was £4.8 million (31 March 2021: £0.5 million loss), with earnings per share of 4.76 pence (31 March 2021: 0.01 pence loss).

Operating Expense and Ongoing Charges

The operating expenses for the year ended 31 March 2022 amounted to £1.3 million (31 March 2021: £0.5m). The Company's ongoing charges ratio ("OCR") is 1.38% (31 March 2021: 1.07%) and reflects a full year's operating expenses. With the exception of the management fee, fund operating expenses are predominantly fixed and known, accordingly via scale the OCR will decline. Absent of further fundraising, the OCR is expected to increase, on a constant NAV basis, in the year ending 31 Mach 2023 as the management fee on the IPO proceeds is now charged on full NAV.

Cash Dividend Cover

		31 March 2022 £'000
Cash income		2,165
Total expenses as per Statement of Comprehensive Income		(1,324)
Dividends paid per Statement of Changes in Equity		6,125
Cash dividend cover		0.14x

The Company's dividends paid in the year of £6.1 million (6.125 pence per share) have been predominately paid from capital.

During the financial year ending 31 March 2022, deployment of £55.3 million has been achieved, on which the Company will benefit from an annualised return going forward, along with contribution from a further deployment on the £44.9 million of commitments at 31 March 2022. The Company remains focused on being fully dividend covered by cash flows generated in the underlying investments, as soon as practicable and to that end, note that in the year ending 31 March 2023, the Company will benefit from a full year of income from the CHP Portfolio and Hydroelectric portfolio, as well as income from the BESS Portfolio.

Gearing and Liquidity

At the year ending 31 March 2022, the Group had cash balances of £17.4 million (31 March 2021: £76.6 million).

As announced on the 30 March 2022, the Group, via TEEC Holdings, has entered into a loan facility agreement for a £40 million Revolving Credit Facility ("RCF") with TP Leasing Limited.

The RCF has a two-year term, with the possibility to be extended. The interest rate on the RCF is 4.5%⁵ based on the Sterling Overnight Index Average ("SONIA") 2-year fixed rate of 2% and a margin of 2.5%.

The Group will make use of the RCF to fund the BESS Portfolio and some of its growing pipeline of high-quality investment opportunities. The Group will follow a prudent approach to gearing with a target medium-term gearing of up to 40% of GAV and a maximum gearing that will not exceed 45% of GAV at time of drawdown.

As at the end of March 2022, the RCF had not been drawn. It is expected that the RCF will be substantially utilised during the financial year ending 31 March 2023.

Notes:

⁵ Excluding fees

Pipeline

We have continued to build our pipeline and have established a variety of investment opportunities across different technologies, counterparties, structures and locations to create an attractive diversified portfolio of opportunities. The Company has circa £500 million of pipeline of opportunities across a variety of technologies including energy storage, solar lighting, EV charging, district heating, energy from waste, hydrogen production, and CHP.

These investment opportunities are from a variety of sources including from off-market and competitive processes as well as through the Triple Point Group network of contacts. Several opportunities include further deal flow that will follow as a result of longer-term relations.

The distributed energy segment has experienced a significant increase in both the volume and average deal size per opportunity. Solar photovoltaic projects, as well as biomass and energy from waste projects are notable components of the opportunity set. Through working with its developer, corporate and construction partners, TEEC is well placed to achieve attractive rates of returns in these sectors.

The onsite consumption and demand segment pipeline has seen notable recent growth as energy prices have increased in recent months. Businesses are looking both to reduce the amount of energy they consume, and to generate more of it on site, materially reducing the bill they pay for that energy through avoided levies and transmission costs. As well as enhancing energy security and reducing costs for businesses, these opportunities both drive decarbonisation and improve energy efficiency.

The energy storage segment has also grown significantly, with the maturing of the storage business case and attractive returns driving new developments and investments in this space. The electrification of transportation is creating new investment opportunities while also adding pressure to grow renewable generation and use the energy generated more efficiently. The rise in the adoption of EV, is creating the opportunity to fund EV charging networks. There is also greater usage of heating, ventilation and air conditioning ("HVAC"), which companies have sought to improve in part to protect against the spread of Covid-19 through better ventilation. Other technologies are also being highlighted for future growth such as heat pumps. These technologies present opportunities for TEEC to finance the installation of new energy efficient equipment which could use the increasing supply of renewable energy thus reducing the carbon footprint and improving the environment.

Environmental, Social and Governance

Triple Point is committed to promoting ESG when assessing investment opportunities and has been a signatory to the United Nations' Principles for Responsible Investing ("PRI") since 2019.

In addition, Triple Point has applied to become a B Corp which formalises Triple Point's consideration of social and environmental impact.

In addition, TEEC is considering the climate change strategy of its portfolio including a review of its climate risks and opportunities. The initial TCFD report is set out in the Sustainability Report of the Annual Report.

A disclosure for TEEC in line with the European Union's Sustainable Financial Disclosure Regulation ("SFDR") requirements for Article 6 and Article 8, is publicly available on our website https://www.tpenergyefficiency.com/. Although not required to do so, we think it is important to provide transparency on our sustainability approach wherever possible. Data points for TEEC, aligned with the SFDR, are also provided in the Sustainability Report.

We have continued to focus on our ESG impact through the TEEC portfolio and in 2021 we enhanced the portfolio from an ESG perspective through the acquisition of the Hydroelectric Portfolio which has 6.6 MW of hydroelectric power generation from nine operational run of river generators in Scotland. We are exploring further ESG improvements such as using peat restoration to improve income through optimisation of the flow rate at an initial three sites whilst acting as a carbon-sink - a natural capital solution for a better environment and financial performance. 

The overall TEEC portfolio generated 9,425 MWh of renewable energy and avoided 17,074 tonnes of CO ₂ in the year ended 31 March 2022.

We continue to develop our ESG processes to ensure we select the highest quality and sustainable energy efficient assets.

Outlook

We are pleased with the progress that the Company has achieved and we look forward to the further deployment of capital in the pipeline that has been built up. The depth and breadth of the investment opportunities that have been sourced from a variety of partners and for different technologies ensures confidence in the ability to build on and diversify the existing TEEC portfolio of lower carbon and efficient energy projects.

The UK Government has committed to getting to Net Zero by 2050 and many companies have made more aggressive deadlines. There are a vast number of green initiatives and a greater demand for reporting on ESG. This all helps to focus minds on implementing sustainability projects.

TEEC can make a significant contribution to the energy transition as it is focused on investing into onsite energy generation and consumption, distributed energy generation and energy storage and distribution. We are well positioned to execute on these types of opportunities and to drive the implementation of energy efficiency which will help reduce costs, save carbon and to make our infrastructure more resilient and provide better energy security.

Jonathan Hick

TEEC Fund Manager

Jonathan Parr

Partner

23 June 2022

SUSTAINABILITY REPORT

A Committed Investment Manager

Triple Point's mission statement is: "Through our people, and the partnerships we build, Triple Point unlocks investment opportunities that have purpose, while generating profits for investors".

In line with this business mission and the commitment to responsible investment, the Investment Manager has applied to become a B Corporation (status pending) and became a signatory to the Principles for Responsible Investing ("PRI") in 2019, to demonstrate best practice in investor ESG integration and guide continued improvement.

Sustainability Table 1: Triple Point's adoption of the six Principles for Responsible Investment

Signatory of PRI: Principles for Responsible Investment		PRI Principle	How Triple Point adopts the principles for TEEC
PRI is recognised as the leading global network for investors who are committed to integrating ESG considerations into their investment practices and ownership policies. The principles demonstrate best practice in ESG integration, guide signatories in improvements and promote closer alignment between the objectives of institutional investors and those of society at large. Triple Point became a member of PRI in 2019. The first Assessment Report period of 2020-2021 was a fallow reporting year for PRI to accommodate the launch of a new reporting and scoring system. Triple Point's first assessment report will be published in 2023.	1	We will incorporate ESG issues into investment analysis and decision-making processes.	ESG analysis is considered by the investment team and shared in Investment Committee papers to inform the final investment decision.
	2	We will be active owners and incorporate ESG issues into our ownership policies and practices.	Tripe Point acts as asset manager on behalf of the Company and uses initial ESG analysis to understand how operational control of the asset can be improved to enhance ESG behaviours and/or outcomes.
	3	We will seek appropriate disclosure on ESG issues by the entities in which we invest.	ESG topics are investigated in all due diligence of acquisitions/investments. ESG topics are monitored through Board meetings and the ESG engagement programme and reported on annually.
	4	We will promote acceptance and implementation of the principles within the investment community	The value of the principles and importance of the role of ESG factors in good decision making are proactively promoted.
	5	We will work together to enhance the effectiveness in implementing the principles.	TEEC uses the best practice promoted by the principles to inform asset optimisation recommendations.
	6	We will each report on our activities towards implementing the principles.	The Company has committed to reporting annually on ESG activities. The Investment Manager reports on responsible investments activities annually through the PRI assessment process. The next and first published assessment report for Triple Point will be in 2023.

The importance of sustainability to TEEC

The level of commitment the Investment Manager has to sustainability extends to each of the strategies it manages. As a result, the Investment Manager has implemented a robust approach to the integration of sustainability for the Company, which is based on the following four pillars:

1.  Energy Efficiency and a sustainable energy transition

2.  ESG research, analysis and integration

3.  Asset optimisation and sustainable outcomes

4.  Transparency and Governance

1. Energy Efficiency and a sustainable energy transition

Energy Efficiency, the bigger picture

The Company seeks to provide financial backing to projects and technologies which deliver reductions in generated emissions.

Succeeding in carbon reduction targets requires midterm solutions which reduce carbon consumption through more efficient energy usage, and the application of energy utilising technologies which minimise carbon emissions. This transition pathway to Net Zero recognises that carbon intensive industries require immediate solutions to reduce their footprint through energy use, whilst renewable energy generation and resource recycling technologies scales. The Company takes a holistic approach to energy transition and how energy efficiency solutions can contribute to the UK energy system. Assets offering solutions across the chain are sought, from distributed energy generation, and energy storage to onsite generation and consumption.

By investing in all aspects of the transition pathway, we seek to contribute to the longer-term commitment for a UK economy which can half its carbon emissions by 2030, compared to pre-industrial levels, and reduce them to Net Zero by 2050.

The carbon crisis is a complex challenge, which requires immediate attention across the economy. Latest analysis from the Intergovernmental Panel on Climate Change ("IPCC") indicates remaining within the 1.5^oC target is increasingly challenging. To hold within 1.6^oC and even 2^oC degrees will require significant efforts, and Part III of the IPCC's 6^th Assessment Report refers to the important role of low emission energy sources, energy efficiency solutions and electrification.

There is a clear and current geopolitical threat to continued emission reductions with pricing pressure bringing into question the pace of the energy transition in the face of energy shortages and rising prices. The strength of policy and change and technology implemented will determine how successful we will be at remaining within the 1.5^oC target, but all scenarios demonstrate a need for rapid emissions reduction.

The pressure for energy security has never been more pressing. Public and political support for energy solutions which offer competitive pricing, sound environmental solutions and energy security will increasingly be favoured.

Energy Efficiency Alignment

A key aspect of TEEC's ESG Analysis, irrespective of the investment type, is if the asset saves Carbon Dioxide equivalents (" CO ₂ e") emissions against the appropriate counterfactual.

CO ₂ e savings (also known as CO ₂ e avoidance), are a crucial part of our strategy, offering a useful metric to show how TEEC has helped counterparties to avoid emitting greenhouse gases.

TEEC measures these in accordance with the GHG Protocol and Partnership for Carbon Accounting Financials ("PCAF"), which provide an industry-standard approach to accounting for financed emissions, ensuring a robust, transparent, and comparable approach. PCAF stress this is crucial because measuring financed emissions is an important step to assess climate-related risks and opportunities, set targets in line with the Paris Agreement, and develop effective strategies to support the decarbonisation of society.

The Investment Manager is aware that for certain asset types, such as hydroelectric schemes or solar power, the majority of CO ₂ e emissions that can be associated with that investment might be generated, and locked up in the materials used, during the construction phase. When investing into the construction and ongoing life of an asset, TEEC will endeavour to capture the emissions associated with this phase where possible and will work with the chosen technical adviser to achieve the most in depth analysis that is practically possible. How the Company approaches accounting for construction emissions will continue to be reviewed and improved.

TEEC's approach to carbon is to reduce absolute emissions through its selection of investments and to collect and report on the required data to demonstrate this, but that we do not currently intend to offset any outstanding carbon emissions, in line with industry expectation. If possible and appropriate TEEC may seek to offset at the project level, but not the fund level.

Energy Efficiency Evidence

To demonstrate the energy efficiency of assets, the Company has committed to tracking and reporting on a selection of energy data points.

Sustainability Table 4: TEEC investments operating energy efficiency performance from point of investment to the reporting year end 31 March 2022.

Asset type	CO 2 Avoided (t CO 2 )	Renewable Energy Generated (MWh)	Energy Saved (MWh)
Hydroelectric	3,578	9,425	-
CHP	13,496	-	7,113
Energy Storage	*	-	-
TOTAL	17,074	9,425	7,113

* this is currently an investment commitment and no assets are yet operational

Based on average annual UK household electricity consumption, the combined MWh of renewable energy generated and MWh of energy saved would be enough to power 5,335 homes.

Based on the average UK petrol car travelling the average annual mileage the avoided carbon dioxide is the equivalent to taking 8,951 cars off the road for a year.

For more detail on the avoided emission and energy calculations please refer to the Methodology Principles provided in Annex 1 of the Annual Report. 

Contributing to a Sustainable Energy Transition

The provision of energy efficiency solutions contributes to the energy transition, a critical contributor in tackling climate change and providing cleaner, safer and more secure sustainable sources of energy for use throughout society and the economy. Such benefits, if realised, also align with a number of the UN Sustainable Development Goals ("SDGs").

In 2015, world leaders gathered at the UN to adopt 17 SDGs to achieve several objectives by 2030 including to: end poverty, promote prosperity and well-being for all, and protect the planet. The UN SDGs have been adapted by 193 countries. TEEC's asset selection helps to address SDGs 7, 9, 11, 12 and 13. The below table details how TEEC assets can contribute.

Sustainability Table 2: TEEC asset's SDG alignment opportunity

UN SDG	UN SDG	UN SDG Target	UN SDG Target	How TEEC contributes to this Goal and Target	TEEC assets that can align
7	Affordable & Clean Energy: Ensure access to affordable, reliable, sustainable and modern energy for all	7.2	By 2030, increase substantially the share of renewable energy in the global energy mix	Investing in renewable energy assets which feed into the electricity grid contributes to the renewable energy mix. Investing in energy storage technology provides greater supply consistency, acts as an enabler to grid decarbonisation and can contribute to reduced wasted renewable electricity in the event of overproduction.	Hydroelectric Portfolio BESS Portfolio
		7.3	By 2030, double the global rate of improvement in energy efficiency	Our combined Heat and Power plants provide a route for the efficient use of the fuel burnt, to provide usable heating solutions alongside the electricity production	CHP Portfolio
		7.a	By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology	The investment strategy of TEEC has been conceived with the express purpose of contributing to energy efficiency and transition solutions.	All assets
9	Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation	9.4	By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities	The investment strategy of TEEC has been conceived with the express purpose of contributing to energy efficiency and transition solutions, which can be applied to existing industry and infrastructure to reduce their reliance and use of carbon-based fuels.	All assets
11	Sustainable Cities & Communities: Make cities and human settlements inclusive, safe, resilient and sustainable	11.6	By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management	Clean energy solutions such as the Company's hydroelectric assets, reduce the need for more polluting energy sources. Energy efficiency solutions such as our CHPs, reduce the amount of energy used for industrial processes reducing pollution created energy storage contributes to the efficiency of a decarbonised grid and creates resiliency in the energy system	All assets
12	Responsible Consumption & Production: Ensure sustainable consumption and production patterns	12.2	By 2030, achieve the sustainable management and efficient use of natural resources	Investing in responsibly managed and sustainable assets that enable other manufacturers to improve their production efficiency contributes to a reduction in natural resource use. Seeking best practice in circular economy production and end of life in our assets.	All assets
13	Take urgent action to combat climate change and its impacts	13.2	Integrate climate change measures into national policies, strategies and planning		Investing in assets which support national ambitions to reduce GHGs in economic activity contributes to action on climate change	All assets

2. ESG integration and the investment process

ESG integration delivers value during the initial investment decision-making process and on an ongoing basis.

The Investment Manager's approach to ESG integration is to ensure it is embedded at each stage of the investment process. Each step of the investment process represents an opportunity to consider how ESG factors may influence the short and long-term success of a project.

Topics of assessment

While the approach to ESG must take into account the individual nature of the target asset, for example, its size and type, region, operational environment and stage of project cycle, there are common measures that can be systematically applied to calculate the longevity of an infrastructure asset's value. For responsible infrastructure investments, the following areas are considered relevant:

Environmental

We consider use, generation type, and intensity of energy, along with water use and its pollution. We also look at levels of waste generated, avoided and disposed of approach to raw material sourcing and supply chain sustainability, and build in impacts on biodiversity and habitat by understanding management and protection measures. Carbon analysis is also carried out to ensure the asset will save emissions compared to an appropriate counterfactual.

Social

We consider the asset quality and fit with a more sustainable economy, including relevance/appropriateness to the locality. We seek reassurance of good customer and stakeholder relations, including management of land rights, accessibility, and social inclusion of access to the asset. We expect strong management and reporting of health and safety (during and after build) as well as good labour management. This includes staff wellbeing, good diversity and inclusion practices, appropriate training, and presence of fair pay, including reassurance of the absence of modern slavery.

Governance

We scrutinise management's approach to responsibility and ability to promote a corporate governance structure that is accountable and responsive to stakeholders by addressing issues such as Boards & Trustees, pay structure, ownership and accounting practices. Examination of governance also reveals important information on a company's business ethics, and we look for evidence of best practice in approaches to tax policy, management of bribery and corruption, conflicts of interest and appropriate senior level ownership of ESG issues.

Climate analysis

Within initial deal scanning and on-going pre acquisition due diligence, the Investment Manager considers the implications of climate change on the long-term value of the company.

Possible impacts of climate change on the strategy's assets are accounted for through scenario analysis, which combines the investment team's carbon analysis work with the ESG integration work to test the resilience of a project based on potential changes to the physical and regulatory environment they operate within. This process looks to quantify how future climate change could impact an assets performance over the short, medium and long term.

Details on our approach to date in the management of climate risk and opportunity are captured in our Task Force on Climate-related Financial Disclosure ("TCFD") report in the Annual Report.

3. Asset Optimisation and Sustainability Outcomes

Continued improvements in the sustainability credentials of the Company's assets are an important aspect of portfolio management undertaken by the Investment Manager. Any improvement in assets is driven through the Operations and Management ("O&M") provider, as the assets commonly have no employees.

Asset optimisation requires long-term commitments and outcomes are not typically quick. The assets within the portfolio are currently undergoing a review to establish where we can implement optimisation. To date, opportunities have emerged within our BESS Portfolio and Hydroelectric Portfolio; we have detailed this potential and how the action would create further alignment to the SDGs.

Optimisation potential

Integrating sustainable behaviours in the BESS Portfolio.

Energy Storage plays a crucial role in enabling the decarbonisation of the electricity grid. The supply of renewable energy is intermittent and weather dependent and as traditional synchronous generation sources go offline, the resiliency of the grid to changes in frequency is reduced.

Batteries can respond to these challenges by storing energy generated when supply is high and demand is low - on nights experiencing high volumes of wind, for example. The carbon saving credentials of an energy storage system, however, are dependent on the way the system is run. To encourage the most sustainable behaviours in the borrower and set clear expectations on carbon saving requirements, in the BESS Portfolio, the Investment Manager negotiated a carbon-ratchet mechanism in the debt facility. This financially incentivises carbon avoidance through responsible use of the assets. We believe this to be a market-first.

The borrower will only receive interest rate reductions if they perform well on the carbon arbitrage metric - a maximum reduction of up to 25bps can be achieved. Maximum reductions are only awarded, for example, if the average Field trade is within 17% of the maximum available carbon arbitrage.

Optimisation potential

Peat Restoration at three sites in the Hydroelectric Portfolio: Cheanna Mhuir, Ladaidh and Choire a Bhalachain

Sustainability outcomes linked to SDG 13 (Climate action: take urgent action to combat climate change and its impacts) and SDG 15 (Life on Land: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss). Following the acquisition of the hydro sites we are exploring the potential to optimise the flow from the catchment area through the implementation of natural capital solutions to provide a better generation profile for the assets. A particular solution being explored for viability being the re-instatement of peatland which has associated environmental benefits related to biodiversity and carbon sequestration.

5.  Transparency and Governance

There is a strong approach to information sharing and oversight for sustainability across Triple Point and TEEC.

The Investment Manager as AIFM has determined that TEEC is subject to Article 8 of the EU Sustainable Finance Disclosure Regulation. Article 8 applies where a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices. We continue to monitor the portfolio and the emerging details of this regulation to determine if we will amend our disclosure to Article 9. Our full disclosure is on our website: https://www.tpenergyefficiency.com/ .

Responsibility for the ESG integration strategy across Triple Point sits with the Head of Sustainability, Lindsay Smart, who leads the Triple Point Sustainability Team. There are a number of oversight functions in place to ensure the effective implementation of ESG by Investment Teams with the support of the Sustainability Team.

Triple Point operates a Sustainability Group which consists of senior partners and managers from across the Investment Manager. This Group meets monthly to discuss Sustainability initiatives and concerns from across the company. The Group is chaired by Triple Point's Co-Managing Partner; and both Managing Partners sit on the Group. The Sustainable Investment Subgroup reports to this Group. The subgroup consists of senior investment team members from across Triple Point's investment strategies. This Group meets every eight weeks to share best practice, latest industry activity and ESG ideas from across the business. This Group can also be called to review a deal which has received a critical level of ESG flag at the due diligence stage, or to act as a sounding board for critical debate should a deal present a complex sustainability profile.

The Sustainability Team conducts an annual ESG monitoring programme to assess the effectiveness of ESG integration across each of Triple Point's strategies, including TEEC. Each strategy is subject to a review of their adherence to their strategy's ESG integration policy, and opportunity for development and evolution. The findings of this audit are presented to the Sustainability Group for discussion and further action if appropriate.

The Sustainability Team are also subject to quarterly risk reviews by the risk team, and any identified sustainability risks are recorded on the Triple Point Group risk register, which is reviewed quarterly by the Group's Risk Committee.

The Head of Sustainability also sits on the Risk Committee to ensure that the Group outlook for risk appropriately considers sustainability issues.

The Board are also kept informed of sustainability risks and opportunities facing portfolio companies through updates provided by the investment team and Triple Point's Head of Sustainability, including deep dives into sustainability integration, engagement, target setting and performance.

For further details on Governance please refer to the Corporate Governance Report in the Annual Report.

The transparency of TEEC's sustainability activities is an important aspect of the Investment Manager's commitment. The data provided reflects energy efficiency commitments and the disclosure expectations the Investment Manager responds to in relation to EU Taxonomy requirements and those associated with being subject to Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR). The SFDR has set out a series of KPIs which it expects aligning entities to disclose against. The list of KPIs is set and to conform with the disclosure we present the list in the exact way the disclosure prescribes. 

Sustainability Table 3. SFDR-aligned KPIs. Where investments were made during the reporting year,  data presented is for TEEC assets from the point of investment to 31 March 2022. Where investments were made during previous reporting years, data presented is for the full reporting year. All energy use and emissions occur within the UK.

Climate and other environment-related indicators
Greenhouse gas emissions	Avoided emissions 6		17,074	t CO 2
	Total Energy Consumption		206,634	MWh
	GHG emissions 7	Scope 1 GHG	37,855	t CO 2 e
		Scope 2 GHG (location-based)	79	t CO 2 e
		Scope 2 GHG (market-based)	117	t CO 2
		Total GHG	37,933	t CO 2 e
		Emissions intensity	215	g CO 2 e/kWh generated
	Exposure to companies active in the fossil fuel sector	Share of investments in companies active in the fossil fuel sector	0%
	Share of non-renewable energy consumption and production8		96%
Biodiversity	Activities negatively affecting biodiversity-sensitive areas		0%9
Water	Emissions to water		0%
Waste	Hazardous Waste		0%

⁶ Avoided emissions for this reporting period are as a result of the operating activities of the Hydroelectric Portfolio and CHP Portfolio

⁷ GHG emissions for this reporting period are as a result of 3.34 tonnes of scope 2 (location-based) emissions from the imported energy for the Hydroelectric Portfolio, and the remainder from the CHP Portfolio. As the BESS Portfolio that we have committed to fund is not yet operational, no emissions are currently tracked.

⁸ The Hydroelectric Portfolio is located within or close to a number of biodiversity sensitive areas, notably: Easter Ness Forest SSSI, West Inverness-shire Lochs SPA and Drimnin to Kilundine Woods SSSI. Strict protections from the Scottish Environmental Protection Agency (SEPA) ensure that the activities of these sites do not negatively affect the local ecology.  

⁹ Percentage of total energy production and consumption that is from non-renewable sources.  Energy consumption is defined as the energy in the natural gas burned by the CHP assets, and the electricity drawn from the grid as parasitic load by the CHP and hydroelectric assets. Both of these sources are assumed to be 100% non-renewable. Energy production is defined as the energy produced by hydroelectric generation and exported to the grid, which is 100% renewable. Heat and electrical energy generated by the CHPs are excluded to avoid double-counting.

For further details on assumptions associated with the reporting of these indicators please refer to Reporting Principles and Methodologies detail in Annex 1 of the Annual Report.

In accordance with the TCFD we also collate and report our approach to climate risk management. Our TCFD disclosure is contained within the Annual Report.

SECTION 172(1) STATEMENT

The Board is committed to promoting the long-term success of the Company whilst conducting business in a fair, ethical, and transparent manner.  

The Board makes   every effort to understand the views of the Company's key stakeholders   and to take   into consideration   these views  as part of its   decision -making process .  

As an investment company, the Company does not have any employees and conducts its core activities through third-party service providers.   The Board seeks to ensure   each   service   provider has an established track record and,   through regulatory oversight is required to have in place suitable policies and procedures to ensure they maintain high standards of business conduct, treat shareholders fairly, and employ corporate governance best practice.  

The following disclosure describes how the  Directors  have had regard to the matters set out in section 172(1) (a) to (f) when performing their duty under s172 and forms the  Directors' statement required under section 414CZA of the Act.  

Section 172(1)	Description
a.  The likely consequences of any decision in the long term	The aim of the Board and of the Investment Manager is to ensure the long-term sustainable success of the Company. As a result, the likely long-term consequences are also a key consideration in decision making.
b.  The interests of the Company's employees	As a closed-ended investment company, the Company does not have any employees and so this matter is not applicable.
c.  the need to foster the company's business relationships with suppliers, customers and others	The Company's primary suppliers are our service providers, principally the Investment Manager and Administrator. The Board engaged regularly with both, including at its Board meetings. Further detail on the Board's approach is described under 'Stakeholder Engagement' below.
d.  The impact of the company's operations on the community and the environment	Having a positive environmental impact is central to the Company's operations, given that it its strategy is to invest in assets support the transition to a lower carbon economy and help the UK achieve Net Zero. Please refer to the Sustainability Report for further information.
e.  the desirability of the company maintaining a reputation for high standards of business conduct	The Directors have a duty to promote the success of the Company for the benefit of shareholders. As such they are dedicated to ensuring the maintenance of high standards of business conduct and corporate governance.
f.  the need to act fairly as between members of the company	During the period, the Investment Manager conducted a roadshow offering to meet with investors. Further detail on the Board's approach is described under 'Stakeholder Engagement' below.

Stakeholder Engagement

Stakeholder	Shareholders
Why is it important to engage?	Shareholders and their continued support is critical to the continuing existence of the business and delivery of our long-term strategy.
How have the Investment Manager/Directors engaged?	The way in which we engage with our shareholders is set out on in the Corporate Governance Report of the Annual Report.
What were the key topics of engagement?	During the year, the Investment Manager met with the majority of existing shareholders as well as prospective investors to discuss Company's investment thesis and forward looking strategy.
What was the feedback obtained and the outcome of the engagement?	During those meetings, discussions were held to establish whether there was appetite for TEEC investing in BESS assets. The feedback was positive. Subsequently, the Group completed its first investment into BESS assets in March 2022.

Stakeholder	Investment Manager
Why is it important to engage?	The Investment Manager is responsible for executing the Investment Objective within the Investment Policy of the Company.
How have the Investment Manager/Directors engaged?	The Board maintains regular and open dialogue with the Investment Manager at Board meetings and has regular contact on operational and investment matters outside of meetings.
What were the key topics of engagement?	During the year there were a number of additional meetings held to consider various matters, including Spark Steam, the Hydroelectric Portfolio and the RCF which were all transactions where other parts of the Triple Point Group were involved. As a result, the Board considered the conflict management procedures and approved the transactions to ensure the fairness and reasonableness to TEEC shareholders.
What was the feedback obtained and the outcome of the engagement?	Following feedback from the Board, various pieces of work were undertaken by third-party advisers to provide additional assurances that the transactions were priced fairly and ultimately in the best interests of TEEC shareholders.

Stakeholder	Service Providers
Why is it important to engage?	As an externally managed Company, we are reliant on our service providers to conduct our core activities. We believe that fostering constructive and collaborative relationships with our service providers will assist in the promotion of the success of the Company.
How have the Investment Manager/Directors engaged?	The Board maintains regular contact with its service providers, both through Board and Committee meetings, as well as outside the regular meeting cycle.  The Management Engagement Committee is responsible for conducting periodic reviews of service providers.
What were the key topics of engagement?	The Board and Investment Manager engaged with the Company's brokers and financial advisers in respect of the Company's share price discount to NAV and proposed strategies to increase the share price.
What was the feedback obtained and the outcome of the engagement?	Following advice from the brokers and financial advisers, the Investment Manager met with the majority of existing shareholders as well as prospective investors to discuss Company's investment thesis and forward looking strategy.

Stakeholder	Asset-level counterparties
Why is it important to engage?	Asset-level counterparties are an essential stakeholder   group and engagement with them is important to ensure assets are operating safely and effectively.
How have the Investment Manager/Directors engaged?	The Investment Manager has developed strong working relationships with the asset-level counterparties and has regular communication with them to ensure the assets are being managed appropriately.
What were the key topics of engagement?	A 100-day asset management integration plan has been implemented for the Hydroelectric Portfolio which will seek to make improvements based on recommendations from the due diligence process.
What was the feedback obtained and the outcome of the engagement?	The 100-day asset management integration plan has raised the need to carry out further investigation into the potential to optimise the flow from the catchment area through the natural capital solutions to provide a better generation profile for the assets. A particular solution being explored for viability being the re-instatement of peatland which has associated environmental benefits related to biodiversity and carbon sequestration.

Stakeholder	Investee Companies/Borrowers
Why is it important to engage?	Investee companies and borrowers are companies in which TEEC Holdings has invested either by debt or equity. They are an essential stakeholder and engagement with them, particularly the individuals responsible for their operations, is important to ensure the maintenance and performance of each investee company.
How have the Investment Manager/Directors engaged?	The Investment Manager holds a Board observer position on Harvest and Glasshouse and holds Board positions on the Hydroelectric Portfolio. Each investee company and borrower has certain reporting obligations to the Group.
What were the key topics of engagement?	The Investment Manager engaged with the boards and management of the investee companies to discuss the relationship going forward, including frequency of reporting.
What was the feedback obtained and the outcome of the engagement?	During the year the Board have provided feedback on what portfolio reporting they expected to see and the investee companies have worked to fulfil those expectations.

Principal   Decisions  

Principal decisions have been defined as those that have a material impact to the Group and its key stakeholders. In taking these decisions, the  Directors  considered their duties under section 172 of the Act.  

Conflicted transactions

During the year the Group acquired Spark Steam and the Hydroelectric Portfolio. In both circumstances the transactions involved other Triple Point managed entities and as such the Board had to consider the conflict of interest that existed and whether the measures put in place by the Investment Manager were sufficient to mitigate the conflict of interest.

The Group entered into a loan facility agreement for a £40 million RCF with TP Leasing Limited. The RCF was deemed to be a "smaller related party transaction" for the purposes of LR11.1.10R of the Listing Rules. The Company obtained a fair and reasonable opinion from a qualified, independent adviser and the Board satisfied itself that the conflict management procedures in place were effective.

The engagement from the Board on these matters (supported by third party advice as appropriate) provided assurance that the Investment Manager acted appropriately and that the transactions terms were fair and reasonable and were in the best interests of shareholders. 

Investment into BESS Portfolio

As has been discussed throughout the Report, there is significant opportunity to invest in energy storage assets and this was something the Company were keen to embrace. The Board and Investment Manager held extensive discussions as to whether energy storage was an appropriate investment for TEEC as it was not a sector specifically referenced within the Company's Investment Policy. The Investment Manager held investor meetings, during which shareholder appetite for the Company investing into BESS assets was discussed. The feedback was positive and in March 2022 the Group committed £45.6 million to four projects.

RISK MANAGEMENT

Risk is   described as   the potential for events to occur that may result in damage, liability or loss.   Should   these events   occur,   the Company may well be   adversely impacted,   potentially leading to   the   disruption of the Company's business   model,   as well as potential damage to  the  reputation or financial standing   of the Company.  

The benefit of a   risk management framework   is that it allows for   potential risks   to   be identified in advance and   may enable these risks to either be   mitigated or possibly even converted into opportunities. The Directors have identified below what they consider to be the current top risks to the Company and the mitigations in place.  

As an externally managed Investment Company the   Company   delegates   portfolio management   and risk monitoring   activities to the Investment  Manager   and Administrator,   therefore the Company places   reliance   on the controls of service providers. In the normal course of business, each   individual   investment   will have developed a rigorous risk management framework including a comprehensive risk register that is reviewed and updated regularly and approved by   the investee   company   board.  

Risk   appetite  

The   Board is responsible for setting the Company's risk appetite supplementing on the Investment Policy   and investment restrictions . During the period, the Board focused on clarifying its views on technology risk. An initial articulation of broader   risk   appetite was then discussed and agreed at the Board meeting in May 2021. It   sets the amount of risk the Company is willing to take, and the upper and lower limits which the Board determines that the Investment Manager must operate within.  

Identification, assessment and management of risk are integral aspects of  the Investment Manager's  and  the Administrator's work in both managing the existing portfolio on a   day-to-day basis and pursuing new investment opportunities.   The   Board approved   risk appetite, together   with the   Investment   Policy   and restrictions   provides   the framework for the Company and how   the Investment Manager   deploys   the available funds   in order to   meet the Company's   Investment   Objectives.   Adherence to the risk limits is reported regularly to the Board through   the quarterly AIFM risk management report.  

As a full scope UK AIFM, the Investment Manager has established a Risk   and Valuation   Committee that meets on a quarterly basis to discuss, amongst other matters, the risk framework of the Group and investee companies including processes for identifying, assessing and managing risks.  

Principal   Risks and Uncertainties  

It is not possible to eliminate all risks   that may be   faced by the Company. The   objective   of the   Company's   risk   management framework and policies   adopted by the Company is   to identify risks and enable   the Board to respond to risks with mitigating actions to reduce   the potential impacts should any of the   risks   materialise.  

The Board regularly reviews the Company's risk   register, with a focus on ensuring appropriate   controls are in place to mitigate each risk.   Taking considered risk is the essence of all business and investment activity. The Board is ultimately responsible for setting the risk appetite and for the oversight of the Company's system of internal control and for reviewing the effectiveness of the Company's system of internal control in the light of the risks identified.  

Procedures to identify principal or emerging risks:  

In order for   the Company to capture new and emerging risks and their potential implications the Administrator, Company Secretary and   Investment Manager   consider risk   as a matter of good practice; and report these to the Board at the quarterly Board meetings. The AIFM has responsibility for   identifying potential risks at an early stage, escalating risks or changes to risks and any other relevant considerations to the Board for recording in the Company's risk register. Where relevant the financial model will be stress tested against the likelihood of occurrence and graded suitably. The Board regularly reviews the risk register to ensure grading and mitigations remain appropriate and it reflects all relevant risks.  

The AIFM undertakes risk management functions for the Company as defined under the AIFM Directive, including but not limited to the provision of the following risk management services to the Company:  

· implementing adequate risk management systems to identify, measure, manage and monitor risks relevant to the Company's investment strategy and to which the Company may be   exposed;  

· reviewing the performance of the portfolio management function and reporting to the Board of the Company in respect of the   performance;  

· ensuring that the risks of each investment of the Company and its effect on the portfolio can be identified, measured, managed and monitored on an on-going basis, including the appropriate stress test   modelling;  

· implementing an appropriate, documented and routinely updated due diligence policy and procedure which is followed by all relevant parties in the making of investment decisions relating to or on behalf of the Company according to the investment strategy, the objectives and risk profile of the   Company;  

· regularly monitoring the compliance by the portfolio management function with the Investment Objective and limitations and restrictions   and the Board approved risk appetite   and reporting any instances of non-compliance promptly to the   Board;  

· identifying and proposing qualitative risk limits for the Company appropriate for all relevant risks and subject to Board approval, establishing and implementing such limits; and  

· periodically reviewing the risk management systems described above to ensure that any modifications necessary are implemented.  

The Board considers the following to be the principal risks faced by the Company along with   the potential impact of these risks and the steps taken to mitigate them.

Risk Identified	Risk Description		Risk Impact		Mitigation	Post Mitigation
Exposure to power prices and risk to hedging power   prices	The Group   makes   investments in projects and concessions with revenue exposure to   power prices. The market price of electricity is volatile and is affected by a variety of factors,   including market demand for electricity, the generation mix of power plants, government support for   various forms of power generation, as well as   fluctuations in the market prices of commodities and   foreign exchange.		Changes in market demand for electricity, including changes in consumer demand patterns, could have a material adverse effect on the Company's profitability,   the Net Asset Value, the   Company's earnings and returns to  shareholders.  To the extent that the Group   enters into   contracts to fix the price that it receives on the   electricity generated or   enters into   derivatives with a view to hedging against fluctuations in power   prices, the Group will be exposed to risk related to delivering an amount of electricity over a   specific period. If there are periods of non-production the Group may need to pay the difference   between the price it has sold the power at and the market price at that time.		The majority of the Company's investments should benefit from fixed price arrangements.   In addition, the Group believe that the transition to a low carbon economy, increased usage of smart grids   and residential participation in renewable energy generation   should   all   positively   impact demand levels   and patterns for electricity.   The Group aims to spread credit risk by putting in place PPAs with a range of counterparties.	Impact Moderate Likelihood Moderate Change in year Stable
Ability to raise additional finance	Ability to raise additional finance, either debt or equity, may limit the Group's ability to grow and achieve a fully covered dividend.		Without sufficient funding, the Group will be unable to pursue suitable investments in line with its Investment Policy. This would significantly impair the Group's ability to pay dividends to shareholders.		The Board keeps liquidity under constant review to ensure that we have a level of protection in the event of adverse fundraising conditions and dividend cover is also closely monitored.  When raising debt finance, the Group adopted a flexible approach involving speaking to multiple funders offering various rates, structures and tenors.   This   allowed the Group to maintain maximum competitive tension between funders and obtain the best debt possible.	Impact Moderate Likelihood Moderate to High   Change in year Increase
Reliance on the Investment Manager	The Group relies on the Investment Manager's services and its reputation in the   energy and infrastructure   market. As a result, the Group's performance will, to a large extent, depend on the Investment Manager's abilities in the   energy efficiency   market.		The performance of the Group depends, in part, on the ability of the Investment Manager to provide competent   and efficient services to the Group.   The departure of any of the   key personnel of the   Investment   Manager   without adequate   replacement may also have a material adverse effect on the Group's performance.   In addition, if any such personnel were to do anything or were alleged to have   done something that may be the subject of public criticism or other negative publicity or may   lead   to investigation, litigation or sanction, this may have an adverse impact on the Group and its   reputation by association.   Termination of the Investment Management Agreement would severely affect the Group's ability to effectively manage its operations and may have a negative impact on the share price of the Company.		Unless there is a default, either party may terminate the Investment Management Agreement by giving not less than 12 months' written notice, such notice not being served before the fourth anniversary of the date of Admission (which was October 2020).   The Board regularly reviews and monitors the Investment Manager's performance. In addition, the Board meets regularly with the   Investment   Manager to ensure that we maintain a positive working relationship. The key personnel of the Investment Manager are subject to  a six -month notice period which would provide sufficient time for the Investment Manager to find a suitable replacement with relevant industry experience.	Impact High   Likelihood Moderate Change in year Stable
Introduction   of,   or amendment to laws, regulations, or technology (especially in relation to climate change)	A technological or regulatory change could occur which could have the effect of rendering an  investment  in which the Group has invested obsolete or materially change the way in   which a service or product is   delivered or alter the return profile of an investment.  In addition, environmental   regulators may seek to impose injunctions or other sanctions on an  investment's  operation due to changes in laws or regulations that may have a material adverse effect on its   financial condition.  Carbon pricing is a particular risk.		The future legislative prohibition or tax of   particular fuels   (such as natural gas) or   as a result of   technological innovation or otherwise by changes to law and regulation that renders an  investment  obsolete could threaten the profitability of such an  investment,  in particular due   to the financing projections that are dependent on an extended project life. If such a change were to occur, these assets would have very few alternative uses should they become obsolete.		As part of the Group's acquisition process, the Investment Manager conducts a thorough due diligence process on all   projects   that takes account of the   technology, regulatory environment, potential future regulatory changes and the robustness of any Government subsidy.  In particular, the Group considers how to manage the risk of carbon pricing through using carbon price forecasts and offsetting carbon cost risk to off-takers where possible. The Group monitors government guidance and is looking to build the portfolio in line with this guidance. The Group's Investment Strategy  focuses on a diverse   range of assets across various energy efficiency   sub-sectors, which reduces the impact   on the Group should   any such changes impact any one sector.	Impact Moderate Likelihood Moderate to High Change in Year Stable
Counterparties'  ability to make contractual   payments	The   Group's revenue derives from the  investments  in the portfolio, and the   Group is exposed to the financial strength of the   counterparties to such projects and their   ability to meet their contractual payment obligations.		The failure by a   counterparty to pay the contractual payments due, or the early termination of   an investment due to insolvency, may materially affect the value of the portfolio and   could have a material adverse effect on the performance of the Group, the Net Asset Value, the   Group's earnings and returns to  s hareholders.		The Investment Manager will look   to   build in suitable mechanisms to protect the Group's income stream from the relevant   investment, which may include parent guarantees and liquidated damages payments on   termination.   The Group's exposure to defaults may be further mitigated by contracting with   counterparties who are public sector or quasi-public sector bodies or who   are able to   draw upon   government subsidies to partly fund contractual payments.   As part of the Group's acquisition process, the Investment Manager conducts a thorough due diligence process on all projects that   includes a credit check on counterparties.  Following asset acquisitions, the Investment Manager puts in place, and follows, an ongoing management plan tailored to the specific asset.	Impact Moderate Likelihood Moderate Change in year Stable
Geopolitical changes causing economic disruption	Geopolitical changes - including the war in Ukraine - could affect economies worldwide, including the UK economy, by, for example, pushing up energy prices and causing inflation.		Rising energy costs and inflation could result in the deterioration of the credit quality of the Group's counterparties through increasing their input prices, which increases the risk of underperformance or the financial difficulty of the Group's counterparties.		High gas prices have been accompanied by high electricity prices, resulting in some of the Group's assets trading ahead of budget. In addition, the Ukraine war is putting greater focus on the need for energy cost reduction and energy security which has raised the need for implementation of energy efficiency and distributed energy solutions.	Impact Moderate Likelihood Moderate Change in year New
Investments are concentrated in a particular technology	The Group's performance may be negatively impacted if its portfolio is overly concentrated in any one technology type.		Different technologies are at risk of poor operational and financial performance in the event of a change in legislation or regulation, or mechanical breakdown, or obsolescence caused by disruptive technologies. This would affect their ability to perform as well as expected, causing detriment to the revenues and Net Asset Value of the Group.		The Group's portfolio is being built up in phases with technology exposure being monitored and a variety of technologies in its investment pipeline.	Impact Moderate Likelihood Moderate Change in year New
Significant abortive costs in terms of financial cost and time	The Group may spend significant time and money on assets that are ultimately not acquired.		If the Group expends time and money on assets which are not acquired, this affects the Group's returns to investors as well as distracting the Group from acquiring other assets.		All due diligence expenditure must be approved by the Investment Committee. The risk of aborts is monitored as part of transaction sourcing and the due diligence process. Internal due diligence is completed before external advisers are paid to conduct due diligence.	Impact Moderate Likelihood Moderate Change in year New
Target returns are not met	The Group's targeted returns are targets only, based on estimates and assumptions which are subject to significant uncertainties, including competitive market pricing being lower than targeted returns, and actual returns may be materially lower than targeted returns.		Paying returns which are lower than the targeted returns will reduce the income due to investors, and could affect the share price of the Company, which would affect its ability to raise further finance.		There are regular reviews of the investment environment, competition, the pipeline, the portfolio, and future cash flow focused on enabling the Group to meet its targeted returns. The Group has the flexibility to structure investments to be as competitive as possible through the overall terms of a funding solution rather than just on price. In addition, the Group's Revolving Credit Facility has given the Group access to funding with a cheaper cost of capital which will help the Group achieve its target returns.	Impact Moderate Likelihood Moderate Change in year New
The valuation of investments is subject to uncertainties	The valuation of assets is inherently subjective leading to uncertainty about how projects are valued from period to period. These uncertainties arise from project valuation assumptions and as well as macro-economic factors, such as inflation and interest rates, which feed into operating assumptions and discount rates, with higher discount rates leading to lower Net Asset Values.		Changes in values attributed to investments during each six-month period may result in volatility in the Net Asset Values that the Group reports from period to period.		The Investment Manager is responsible for carrying out the fair market valuation of the Group's investments, but the Group engages external independent valuers to assess the validity of these valuations, with six-monthly reviews and annual audits. Valuations are prepared using external market benchmarks and externally-sourced power market curves from reputable providers or a blend from more than one. The fair valuation of investments is calculated in accordance with IPEV (International Private Equity and Venture Capital) valuation guidelines.	Impact Moderate Likelihood Moderate Change in year New

Since the last Annual Report, the following risks have been removed from the Principal Risks table:

· Portfolio of new assets acquired which may include risks not fully identified in due diligence process; 

· Risks relating to installing, operating, and decommissioning energy efficiency equipment;

· Lack of availability of suitable investments; and

· Cyber and other security risks.

Each of these risks are still being actively managed through our risk management process.

Emerging risks    

Emerging risks are characterised by a degree of uncertainty and the Investment   Manager   and the Board consider new and emerging risks   every six months,   the risk register   is   then updated to include these considerations.  

Physical effects of climate change  

While efforts to mitigate climate change continue   to progress, the physical impacts are emerging in the form of changing weather patterns. Extreme weather events can result in flooding, drought, fires and storm damage,   which may   potentially impair the operations of   borrowers and future   portfolio companies   at a certain   location or   impacting locations of companies within their supply chain.  

Growth of green hydrogen and the potential impact on business cases

Once green hydrogen reaches a substantial supply level, it could displace other green energy sources that are intermittent and so reduce the demand for them. The emergence of this technology will be monitored with the portfolio adapted as necessary.

Changes to energy market regulation and policies

As part the of transition to Net Zero, government policy is likely to evolve to accelerate the transition whilst mitigating costs to consumers. A number of potential options are under discussion including regional or nodal pricing, windfall taxes and the current approach to price setting in the market through marginal pricing. Many of these potential changes are at very initial stages of policy development and the Group will monitor how these evolve, as well as position the Group to adapt to these risks.

For example, if regional or nodal grid pricing is introduced, it will impact power prices for generation assets depending on the geographic location of those assets. This could increase or decrease income.  The Group will continue to invest in a geographically diversified portfolio to mitigate this risk and put in place appropriate offtake agreements.

GOING CONCERN AND VIABILITY STATEMENT

Going Concern  

The Directors have adopted the going concern basis in preparing the Annual report. In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income and expense flows.

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 in the Strategic Report. The financial risk management objectives and policies of the Group, including exposure to credit risk, price risk and market risk are disclosed in note 17 to the financial statements.

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

As at 31 March 2022, the Company had net assets of £96.1 million including cash balances of £17.1 million.  The Company's sole, wholly owned, subsidiary TEEC Holdings has a £40 million RCF which is undrawn and a £0.3 million cash balance which, on a Group basis, are sufficient to meet current obligations, including the £44.9 million investment commitments, as they fall due. The covenants on the RCF are limited to gearing and interest cover and the Group is expecting to comply with these covenants on drawdown and in future periods.

The Groups investments comprise fixed rate debt investments with contractual maturities between 2031 and 2035, together with a portfolio of hydroelectric assets which are fully operational and have remaining  economic lives well in excess of thirty years. As a result, the Group benefits from long-term cash flows and a set of risks that can be identified and assessed. The loan investments contribute a fixed return, and the Hydroelectric Portfolio benefits from an upward only RPI linked revenue flow under a UK government subsidy. The Hydroelectric Portfolio also benefits from fixed price PPAs, with institutional counterparties, for the next two years. Forecast revenues thereafter are subject to wholesale power prices which are based upon qualified independent forecasts.

The major cash outflows of the Group, aside from non-discretionary operating expenses, are the payment of dividends and costs relating to the acquisition of new assets, both of which are entirely discretionary.

The Directors do not consider that the effects of Covid-19 have created a material uncertainty over the assessment of the Company as a going concern.

In late February 2022, Russia began an invasion of Ukraine with devastating consequences for the country's citizens and major implications for wider humanity, the global economy and capital markets. The Company does not have any direct exposure to Russia, however, the Company is monitoring the potential wider macroeconomic consequences on the Company and its investment portfolio closely, including energy price volatility and further sanctions. Please refer to the Investment Manager's review, which illustrates the wider effects of the Russia Ukraine conflict on the Company and its investments. The Directors do not consider that the effects of the conflict have created a material uncertainty over the assessment of the Company as a going concern.

On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Viability Statement  

The Directors have assessed the viability of the Group over a five-year period to March 2027.

In making this statement the Directors have considered the resilience of the Group, taking account of its current position, the principal risks facing the business (especially the level of future energy prices and our counterparties' ability to make contractual payments), in severe but plausible downside scenarios and the effectiveness of any mitigating actions.

The Directors have determined that the five-year period to March 2027 is an appropriate period over which to provide this viability statement as this period accords with the Group's business planning exercises and is appropriate for the investments owned by the Group. The Group's risk management processes, described in the Risk Management section, consider the key risks during this five-year period and beyond. These include sustainability-related risks that take into account ESG considerations, including the physical and transition risks of climate change (in line with the recommendations of the Task Force on Climate-related Financial Disclosures ("TCFD")).

The viability analysis has been prepared on the assumption that the revolving credit facility, available to TEEC Holdings, which has a contractual maturity of March 2024, is refinanced for the remainder of the forecast period at the same rate. Supporting the assumption are the Groups investments comprising fixed rate debt investments and a portfolio of hydroelectric assets which are fully operational with economic lives well in excess of the period being considered. As a result, the Group benefits from long-term cash flows and a set of risks that can be identified and assessed. Over the next five years, the loan investments contribute a fixed return, and the Hydroelectric Portfolio contributes returns based on its upward only RPI linked revenue flow under a UK government subsidy. The Hydroelectric Portfolio also benefits from fixed price PPAs, with institutional counterparties, for the next two years. Forecast revenues thereafter are subject to wholesale power prices which are based upon qualified independent forecasts. The projects are each supported by detailed financial models. The Directors believe that portfolio diversification with fixed rate debt in different energy efficiency technologies and equity investments in hydroelectric assets helps to withstand and mitigate risks it is most likely to meet.

The Investment Manager prepares and considers, and the Board reviews, summary cash flow projections each year as part of management reporting, business planning and dividend approval processes. The projections consider cash balances, key covenants and limits, dividend cover, investment policy compliance and other key financial indicators over the five-year period. Sensitivity analysis considers the potential impact of the Group's principal risks occurring. These projections are based on the Investment Manager's expectations of future asset performance, income and costs, and are consistent with the methodology applied to produce the valuation of the investments.

The Directors consider the risk to the value of the Company's investments, its ability to operate its projects and generate revenue, presented by the Covid-19 pandemic, there has been minor disruption to the business to date and the risk-mitigating activities have served to reduce the impact.

The Directors continue to encourage the Investment Manager to ensure that the portfolio of investments is able to operate as effectively as possible. The Investment Manager has performed downside risk scenario planning encompassing a range of potential outcomes and these demonstrate that whilst profitability may be adversely affected, the Company and its investments are expected to remain viable.

Based on this review, the Directors confirm that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period to March 2027.

Board Approval of the Strategic Report  

The Strategic Report has been approved by the Board   of Directors   and signed on   its   behalf by the Chair.  

John Roberts  

Chair  

23 June 2022

  FINANCIAL STATEMENTS

INCOME STATEMENT

For the period ended 31 March 2022

		Year Ended 31 March 2022			Year Ended 31 March 2021
	Note	Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Investment income	5	2,451	-	2,451	57	-	57
Profit/(Loss) arising on the revaluation of investments at the period end	12	-	3,634	3,634	-	(113)	(113)
Investment return		2,451	3,634	6,085	57	(113)	(56)
Investment management fees	4	327	109	436	5	1	6
Other expenses	6	867	21	888	388	71	459
		1,194	130	1,324	393	72	465
Profit/(Loss) before taxation		1,257	3,504	4,761	(336)	(185)	(521)
Taxation	8	-	-	-	-	-	-
Profit/(Loss) Loss after taxation		1,257	3,504	4,761	(336)	(185)	(521)
Other comprehensive income		-	-	-	-	-	-
Total comprehensive income/(loss)		1,257	3,504	4,761	(336)	(185)	(521)
Basic & diluted earnings per share (pence)	9	1.26p	3.50p	4.76p	(0.58p)	(0.32p)	(0.90p)

The total column of this statement is the  Income  Statement   of the Company prepared in   accordance   with the requirements of the Act and in accordance with the UK adopted international accounting standards. The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice   (AIC SORP).  

All revenue and capital items in the above statement derive from continuing operations.  

This Income  Statement   includes all recognised gains and losses.  

The accompanying Notes are an integral part of this statement.

BALANCE SHEET

At 31 March 2022

Company Number: 12693305

		31 March 2022		31 March 2021
	Note	£'000		£'000
Non-current assets
Investments at fair value through profit or loss	12	78,952		20,883
Current assets
Trade and other receivables	13	453		201
Cash and cash equivalents		17,144		76,553
		17,597		76,754
Total assets		96,549		97,637
Current liabilities
Trade and other payables	14	(412)		(149)
		(412)		(149)
Net assets		96,137		97,488
Equity attributable to equity holders
Share capital	15	1,000		1,000
Share premium		13		-
Special distributable reserve		91,444		97,009
Capital reserve		3,319		(185)
Revenue reserve		361		(336)
Total Equity		96,137		97,488
Shareholders' funds
Net asset value per Ordinary Share	11	96.12p		97.49p

The statements were approved by the Directors and authorised for issue on 23 June 2022 and are signed on behalf of the Board by:

Dr John Roberts

Chair 

23 June 2022

The accompanying Notes are an integral part of this statement.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended 31 March 2022

		Issued capital	Share premium	Special distributable reserve	Capital reserve	Revenue reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
For year ended 31 March 2022
Opening balance		1,000		97,009	(185)	(336)	97,488
Issue of share capital	15	-	13	-	-	-	13
Total comprehensive income/(loss) for the period		-	-	-	3,504	1,257	4,761
Dividends Paid	10	-	-	(5,565)	-	(560)	(6,125)
Balance at 31 March 2022		1,000	13	91,444	3,319	361	96,137

		Issued capital	Share premium	Special distributable reserve	Capital reserve	Revenue reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
For period ended 31 March 2021
Opening balance		-	-	-	-	-	-
Issue of share capital	15	1,000	99,000	-	-	-	100,000
Cost of issue of shares		-	(1,991)	-	-	-	(1,991)
Transfer to special distributable reserve		-	(97,009)	97,009	-	-	-
Total comprehensive income/(loss) for the period		-	-	-	(185)	(336)	(521)
Balance at 31 March 2021		1,000	-	97,009	(185)	(336)	97,488

The capital reserve represents the proportion of Investment Management fees  and other expenses, where applicable,  charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised element of the capital reserve is not distributable.   The   special distributable   reserve was created on court cancellation of the share   premium account. The revenue,   special distributable   and realised capital   reserves are distributable by way of dividend and total £91,603,000 (31 March 21: £96,601,000).  

The accompanying Notes are an integral part of this statement.

STATEMENT OF CASH FLOWS

For the year ended 31 March 2022

		Year ended 31 March 2022		Period ended 31 March 2021
	Note	£'000		£'000
Cash flows from operating activities
Profit/(Loss) before taxation		4,761		(521)
Profit/(Loss) arising on the revaluation of investments at the period end	12	(3,634)		113
Cash flow generated by/(used in) operations		1,127		(408)
Interest income	5	(2,451)		(57)
Interest received		1,646		4
Decrease/(Increase) in receivables	13	34		(148)
Increase in payables	14	263		149
Net cash flow from/(used in) operating activities		619		(460)
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss	12	(56,019)		(20,996)
Loan principal repaid	12	2,103		-
Net cash flow used in investing activities		(53,916)		(20,996)
Cash flows from financing activities
Issue of shares	15	13		100,000
Costs of share issue				(1,991)
Dividends paid		(6,125)		-
Net cash flow generated from financing activities		(6,112)		98,009
Net (decrease)/increase in cash and cash equivalents		(59,409)		76,553
Reconciliation of net cash flow to movements in cash and cash equivalents
Cash and cash equivalents at beginning of year/period		76,553		-
Net (decrease)/increase in cash and cash equivalents		(59,409)		76,553
Cash and cash equivalents at end of period		17,144		76,553

The accompanying Notes are an integral part of this statement.

NOTES TO THE FINANCIAL STATEMENTS

1.  CORPORATE INFORMATION

The Company is incorporated and domiciled in the United Kingdom and registered in England and Wales under number 12693305 pursuant to the Act. The address of its registered office, which is also its principal place of business, is 1 King William Street, London EC4N 7AF. 

The Company's ordinary shares were first admitted to the premium segment of the UK Listing Authority's Official List and to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange under the ticker TEEC on 19 October 2020.

The financial statements comprise only the results of the Company, as its investment in TEEC Holdings is included at fair value through profit or loss as detailed in the key accounting policies below. 

The Company has appointed Triple Point Investment Management LLP as its Investment Manager (the "Investment Manager") pursuant to the Investment Management Agreement dated 25 August 2020. The Investment Manager is registered in England and Wales under number OC321250 pursuant to the Act. The Investment Manager is regulated by the FCA, number 456597. 

The Company intends to achieve its Investment Objective by investing in a diversified portfolio of energy efficiency investments in the United Kingdom. The Company, through TEEC Holdings, will invest in a range of energy efficiency assets which will contribute, or are already contributing, to energy efficiency in sub-sectors including electricity and heat generation, distribution, and end user consumption.   

2.  SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

2. 

The financial statements, which aim to give a true and fair view, have been prepared in accordance with UK-adopted international accounting standards and the applicable legal requirements of the Companies Act 2006.

On 31 December 2020, IFRS as adopted by the European Union as adopted at that date was brought into UK law and became UK-adopted International Accounting Standards in its Company Financial Statements on 1 January 2021. The change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework.

The financial statements have also been prepared as far as is relevant and applicable to the Company in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued in April 2021 by the Association of Investment Companies ("AIC").

The financial statements are prepared on the historical cost basis, except for revaluation of certain financial investments at fair value through profit or loss. The principal accounting policies adopted are set out below and consistently applied, subject to changes in accordance with any amendments in IFRS. 

The Company was incorporated on 23 June 2020. The comparative amounts, presented in the financial statements and the related note disclosures, cover the period from 23 June 2020 to 31 March 2021, therefore are not comparable with the amounts presented for the year ended 31 March 2022.

Estimates and underlying assumptions are reviewed regularly on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future period affected. The significant estimates, judgement or assumptions for the period are set out below.

Basis of  Consolidation

The sole objective of the Company, through its subsidiary TEEC Holdings, is to make investments, via individual corporate entities. The Company typically will subscribe for equity in or issue loans to TEEC Holdings in order for it to finance its investments.

The Directors have concluded that in accordance with IFRS 10, the Company meets the definition of an investment entity having evaluated the criteria that needs to be met (see below). Under IFRS 10, investment entities are required to hold subsidiaries at fair value through the Income Statement rather than consolidate them on a line-by-line basis, meaning TEEC Holdings' cash, debt and working capital balances are included in the fair value of the investment rather than in the Company's assets and liabilities. However, in substance, TEEC Holdings is investing the funds of the investors of the Company on its behalf and is effectively performing investment management services on behalf of many unrelated beneficiary investors.

Characteristics of an investment entity

There are three key conditions to be met by the Company for it to meet the definition of an investment entity. For each reporting period, the Directors will continue to assess whether the Company continues to meet these conditions: 

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

2.  It commits to its investors that its business purpose is to invest its funds solely for returns (including having an exit strategy for investments) from capital appreciation, investment income or both; and 

3.  It measures and evaluates the performance of substantially all its investments on a fair value basis. 

In satisfying the second 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. The Company intends to hold these for the remainder of their useful life to preserve the capital value of the portfolio. However, as the energy efficiency assets are expected to have no residual value after their life, the Directors consider that this demonstrates a clear exit strategy from these investments. 

Subsidiaries are therefore measured at fair value through profit or loss, in accordance with IFRS 13 "Fair Value Measurement", IFRS 10 "Consolidated Financial Statements" and IFRS 9 "Financial Instruments".

The Directors believe the treatment outlined above provides the most relevant information to investors.  

Going Concern  

The Directors have adopted the going concern basis in preparing the Annual report. In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income and expense flows.

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 in the Strategic Report. The financial risk management objectives and policies of the Group, including exposure to credit risk, price risk and market risk are disclosed in note 17 to the financial statements.

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

As at 31 March 2022, the Company had net assets of £96.1 million including cash balances of £17.1.  The Company's sole, wholly owned, subsidiary TEEC Holdings has a £40 million RCF which is undrawn and a £0.3 million cash balance which, on a Group basis, are sufficient to meet current obligations, including the £44.9 million investment commitments, as they fall due. The covenants on the RCF are limited to gearing and interest cover and the Group is expecting to comply with these covenants on drawdown and in future periods.

The Group's investments comprise fixed rate debt investments with contractual maturities between 2031 and 2035, together with a portfolio of hydroelectric assets which are fully operational and have remaining economic lives well in excess of thirty years. As a result, the Group benefits from long-term cash flows and a set of risks that can be identified and assessed. The loan investments contribute a fixed return, and the Hydroelectric Portfolio benefits from upward only RPI linked revenue flow under a UK government subsidy. The Hydroelectric Portfolio also benefits from fixed price PPAs, with institutional counterparties, for the next two years. Forecast revenues thereafter are subject to wholesale power prices which are based upon qualified independent forecasts.

The major cash outflows of the Group are the payment of dividends and costs relating to the acquisition of new assets, both of which are entirely discretionary.

The Directors do not consider that the effects of Covid-19 have created a material uncertainty over the assessment of the Company as a going concern.

In late February 2022, Russia began an invasion of Ukraine with devastating consequences for the country's citizens and major implications for wider humanity, the global economy and capital markets. The Company does not have any direct exposure to Russia, however, the Company is monitoring the potential wider macroeconomic consequences on the Company and its investment portfolio closely, including energy price volatility and further sanctions. Please refer to the Investment Manager's review, which illustrates the wider effects of the Russia Ukraine conflict on the Company and its investments. The Directors do not consider that the effects of the conflict have created a material uncertainty over the assessment of the Company as a going concern.

On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Financial Instruments  

Financial assets and financial liabilities are recognised on the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument. Financial assets are to be de-recognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred, and the transfer qualifies for de-recognition in accordance with IFRS 9 Financial Instruments.

Financial assets   

The Company classifies its financial assets as either investments at fair value through profit or loss or financial assets at amortised cost. The classification depends on the purpose for which the financial assets are acquired. Management determines the classification of its financial assets at initial recognition. 

Investments at fair value through profit or loss  

At initial recognition, the Company measures its investments, through its investment in TEEC Holdings, at fair value through profit or loss and any transaction costs are expensed to profit or loss. The Company will subsequently, through its investment in TEEC Holdings, continue to measure all investments at fair value and any changes in the fair value are to be recognized as gains or losses on investments at fair value through profit or loss within investment income. 

Investments at fair value through profit or loss are recognized upon initial recognition as financial assets at fair value through profit or loss in accordance with IFRS 9. Investments held at fair value through profit or loss consist of the Company's subsidiary, TEEC Holdings. 

The Company's investment in TEEC Holdings comprises both equity and loan notes. The Company measures its investment as a single class of financial asset at fair value in accordance with IFRS 13 Fair Value Measurement. 

In determining the fair value, the Board will consider any observable market transactions and will measure fair value using assumptions that market participants would use when pricing the asset, including any assumptions regarding risk surrounding the transaction. 

Financial assets at amortised cost   

Trade receivables, loans and other receivables that are non-derivative financial assets and that have fixed or determinable payments that are not quoted in an active market are classified as "financial assets at amortised cost". Trade receivables, loans and other receivables are measured at amortised cost using the effective interest method, less any impairment. They are included in current assets, except where maturities are greater than 12 months after the reporting date, in which case they are to be classified as non-current assets. The Company's financial assets held at amortised cost comprise "trade and other receivables" and "cash and cash equivalents" in the statement of financial position. 

Financial liabilities and equity  

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. 

Financial liabilities   

Financial liabilities are classified as other financial liabilities, comprising: 

· other non-derivative financial instruments, including trade and other payables, which are to be measured at amortised cost using the effective interest method. 

Effective interest method   

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the relevant asset's carrying amount. 

Fair value estimation for investments at fair value   

The Group's investments are not typically traded in active markets. Fair value is calculated by discounting at an appropriate discount rate future cash flows expected to be received, by TEEC Holdings, from the investment portfolio. The underlying cash flows are from investments in both equity (dividends and equity redemptions), shareholder, inter-company and third-party loans (interest and repayments). The valuations are based on the expected future cash flows, using reasonable assumptions and forecasts for revenues, operating costs, macro-level factors and an appropriate discount rate.

The discount rates used in the valuation exercise represent the Investment Manager's best assessment of the rate of return in the market for assets with similar characteristics and risk profile. The discount rates are reviewed on a regular basis and updated, where appropriate, to reflect changes in the market and in the project risk characteristics. 

Investments, which are entered into by TEEC Holdings, are designated upon initial recognition as held at fair value through profit or loss. Gains or losses resulting from the movement in fair value of the investments are reflected in the valuation of TEEC Holdings and recognised in the Statement of Comprehensive Income at each semi-annual valuation point.

The Company's loan and equity investment in TEEC Holdings is held at fair value through profit or loss which is measured by reference to the net asset value of TEEC Holdings. Gains or losses resulting from the movement in fair value are recognised in the Company's Statement of Comprehensive Income at each semi-annual valuation point.

For the year end and half-year accounts the Company engages external, independent and qualified valuers to assess the validity of the forecast cash flow assumptions and discount rates used by the Investment Manager in determination of fair value. The Board reviews and approves the valuations following appropriate challenge and examination

Revenue Recognition  

Gains and losses on fair value of investments in the income statement represent gains or losses that arise from the movement in the fair value of the Company's investment in TEEC Holdings. 

Dividends from TEEC Holdings are recognised when the Company's right to receive payment has been established. 

Investment income comprises interest income and dividend income received from the Company's subsidiary. Interest income is recognised in the Income Statement using the effective interest method. 

Share capital and share  premium 

The Company's Ordinary Shares are classified as equity and are not redeemable. Costs associated or directly attributable to the issue of new equity shares are recognised as a deduction in equity and are charged from the share premium account. 

The costs incurred in relation to the Company's IPO were charged to the share premium account. 

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 three months or less. At 31 March 2022, the Company's cash balances were held in the Company's bank current account.

There are no expected credit losses as the bank institutions have high credit ratings assigned by international credit rating agencies.

Foreign currencies  

Items included in the financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the Company operates and is the Company's functional currency. 

Transactions and balances 

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 Income Statement. 

Dividends  

Dividends to the Company's shareholders are   recognised   when they become legally payable. In the case of interim dividends, this is when they are paid. In the case of final dividends, this is when they are approved by the shareholders at the Annual General Meeting.  

Fund Expenses    

Expenses are accounted for on an   accruals   basis. Share issue expenses of the Company directly attributable to the issue and listing of shares are   charged to the share premium account. The Company's investment management fee, administration fees and all other expenses are charged through the Income Statement.  

Investment Management Fees  

As per the Company's   Investment   Objective, it is expected that income returns will make up   the majority   of   the Company's long-term   return. Therefore, based on the estimated split of future returns (which cannot be   guaranteed),   25%   of the investment management fee is charged as a capital item within the  Income  Statement . 

Taxation  

Under the current system of taxation in the UK, the Company  is  liable to taxation on its operations in the UK. 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 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 financial statements and the corresponding tax bases used in the computation of taxable profit. 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 profits 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 profit   or   the accounting profit.  

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  Income  Statement 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.  

New, revised and amended standards applicable to future reporting periods

There were no new standards or interpretations effective for the first time in the year that have had a significant impact on the Company's financial statements. Furthermore, none of the amendments to the standards summarised below have had a significant effect on the financial statements.

New and revised standards not applied

At the date of authorisation of these financial statements, the following amendments had been published and will be mandatory for future accounting periods beginning on or after 1 January 2022:

· A number of narrow-scope amendments to IFRS 3 "Business Combinations", IAS 16 "Property, plant and equipment", IAS 37 Provisions, contingent liabilities and contingent assets" and annual improvements on IFRS 1 "First-time Adoption of IFRS", IFRS 9 "Financial instruments, IAS 41 "Agriculture" and illustrative examples accompanying IFRS 16 "Leases".

Effective for accounting periods beginning on or after 1 January 2023:

· Narrow-scope amendments to IAS 1 "Presentation of Financial Statements", practise statement 2 and IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors".

· Amendments to IAS 12 "Income Taxes" - deferred tax related to assets and liabilities arising from a single transaction.

· Amendments to IFRS 17, "Insurance contracts" - this standard replaced IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts.

Effective for accounting periods beginning on or after 1 January 2024:

· Amendments to IAS 1 on classification of liabilities clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period.

The impact of these standards is not expected to be material to the reported results of the Company.

Segmental Reporting  

The Chief Operating Decision Maker (the "CODM") being the Board of Directors, is of the opinion that the Company is engaged in a single segment of business, being investment. All the investments are based in the UK.  

The Company has no single major customer. The internal financial information to be used by the CODM on a quarterly basis to allocate resources, assess performance and manage the Company will present the business as a single segment comprising the portfolio of investments in energy efficiency assets. 

3.  CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

  In the application of the Company's accounting policies, which are described in  Note  2, the Directors are required to make judgements, estimates and assumptions about the fair value of assets and liabilities that affect reported amounts.   It is possible that actual results may differ from these estimates.  

The preparation of the financial statements requires the Board to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates, by their nature, are based on judgement and available information, hence actual results may differ from these judgements, estimates and assumptions.

The key estimates that have a significant impact on the carrying values of underlying investments that are valued by reference to the discounted value of future cash flows are the useful life of the assets, the discount rates, 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. The sensitivity analysis of these key assumptions is outlined in note 12 to the financial statements. 

For equity investments, entered into by TEEC Holdings, useful lives are based on the Investment Manger's estimates of the period over which the assets will generate revenue which are periodically reviewed for continued appropriateness. Where land is leased from an external landlord, the operational life assumed for the purposed of the asset valuations is valued at lease expiry or end of contractual extension options. For the loan investments the future cash flows are as per contractual maturity of the facility.

The discount rates are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different value. The discount rates applied to cash flows are reviewed regularly by the Investment Manager to ensure they are at an appropriate level. The Investment Manager will take into consideration market transactions, of similar nature, when considering changes to the discount rates used. For the year end and half-year accounts the Company engages external, independent and qualified valuers to assess the validity of the discount rates used by the Investment Manager in determination of fair value.  

For equity investments, by TEEC Holdings, the revenues and expenditure of the investee companies are frequently or wholly subject to indexation and an assumption is made as to near term and long-term rates. For debt investments, by TEEC Holdings, the cash flows are determined by reference to contractual arrangements.

The price at which the output from the generating equity assets is sold is a factor of both wholesale electricity prices and the revenue received from the Government support regimes such as the Feed in Tariffs. Future power prices are estimated using external third-party forecasts which take the form of special consultancy reports, which reflect various factors including gas prices, carbon prices and renewables deployment.

TEEC Holdings' investments in unquoted investments are valued by reference to valuation techniques approved by the Directors and in accordance with the International Private Equity and Venture Capital ("IPEV") Guidelines.

As noted above, the Board has concluded that the Company meets the definition of an investment entity as defined in IFRS 10. This conclusion involved a degree of judgement and assessment as to whether the Company meets the criteria outlined in the accounting standards.  

4.  INVESTMENT MANAGEMENT FEES

The Company and the Investment Manager entered into an Investment Management Agreement   on  25 August  2020.  

Following the IPO of the Company,   no Annual Management Fee   was accrued or charged on the undeployed cash funds arising from   the IPO   until such time as 75 % or more of the net proceeds were   deployed. The 75% threshold was reached on 10 December 2021, following completion of the £19.6 million acquisition of the final three hydro assets acquired in the year.

Under the terms of the agreement, the Investment Manager must use 20 % of the   management fee   received to acquire shares in the Company.   On a semi-annual basis, following the announcement of the Net Asset Value for the   semi-annual   periods ending 31 March and 30 September in each year, the Investment Manager shall procure that the Wider Triple Point Group shall apply an amount, in aggregate, equal to 20 % of the Annual Management Fee for the relevant   six-month   period as follows:  

(a) where the Ordinary Shares are trading at, or at a premium to, the latest published Net Asset Value per Ordinary Share; the Investment Manager shall procure that the Wider Triple Point Group shall use the relevant amount to subscribe for new Ordinary Shares issued at the latest published Net Asset Value per Ordinary Share applicable at the date of issuance; or  

(b) where the Ordinary Shares are trading at a discount to the latest published Net Asset Value per Ordinary Share; the Investment Manager shall procure that the Wider Triple Point Group shall, as soon as reasonably practicable use the relevant amount to make market purchases of Ordinary Shares within four months of the relevant Net Asset Value publication   date;  

Even though the Annual Management Fee is payable   on a monthly basis, Ordinary Shares are only acquired by the Wider Triple Point Group on a half-yearly basis. In addition, any such Ordinary Shares acquired by the Wider Triple Point Group are subject to a minimum lock-in period of 12 months.  

Investment management fees paid or accrued during the year were as follows:  

	For the year ended  31 March 2022				For the period ended 31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Cash element	317	106	423		5	1	6
Equity element	10	3	13		-	-	-
	327	109	436		5	1	6

5.  INVESTMENT INCOME

	For the year ended  31 March 2022				For the period ended    31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Interest on cash deposits	5	-	5		4	-	4
Interest income from investments	2,446	-	2,446		53	-	53
	2,451	-	2,451		57	-	57

6.  OPERATING EXPENSES

	For the year ended  31 March 2022				For the period ended   31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Investment Management fees	327	109	436		5	1	6
Directors' fees*	200	-	200		91	-	91
Company's audit fees:
-  In respect of audit services	70	-	70		60	-	60
-  In respect of non-audit services	25	-	25		-	-	-
Other operating expenses	549	21	570		225	71	296
Irrecoverable VAT on Administration & Management fees	23	-	23		12	-	12
	1,194	130	1,324		393	72	465

*Directors' fees exclude employer's national insurance contributions and travel expenses which are included as appropriate in other operating expenses. Travel expenses for the year ended 31 March 2022 totaled £643 (31 March 2021: nil). 

7.  EMPLOYEES

The Company had no employees during the period.  

Full detail on Directors' fees is provided in Note 19. The Directors' fees exclude   employer's national insurance contribution which is included as appropriate in other operating expenses. There   were no other emoluments during the period.  

8.  TAXATION

Analysis of charge in the period.

	For the year ended  31 March 2022				For the period ended 31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Corporation tax	-	-	-		-	-	-

The effective UK corporation tax rate applicable to the Company for the period is   19 % The tax charge differs   from the charge resulting from applying the standard rate of UK corporation tax for an investment trust   company. The differences are explained below:  

	For the year ended 31 March 2022				For the period ended   31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Profit/(Loss) before taxation	1,257	3,504	4,761		(336)	(185)	(521)
Corporation tax at 19%	239	666	905		(64)	(35)	(99)
Effect of:
Capital (gain)/loss not deductible	-	(690)	(690)		-	22	22
Interest deductions	(239)	-	(239)		-	-	-
Disallowed expenditure					-	12	12
Surrendering of Tax losses to unconsolidated subsidiaries	-	24	24		64	1	65
Tax charge for the period	-	-	-		-	-	-

The Directors are of the opinion that the Company has complied with the requirements for maintaining   investment trust status for the purposes of section 1158 of the Corporation Tax Act 2010. This allows certain   capital profits of the Company to be exempt from UK tax.  

Additionally,   the   Company has in the financial year   utilised   the interest streaming election which allows the Company to   designate dividends   wholly or partly as interest distributions for UK tax purposes. Interest distributions are treated as tax deductions   against taxable income of the Company so that investors do not suffer double taxation on their returns.  

The financial statements do not directly include the tax charges for the Company's intermediate   holding company, as   TEEC   Holdings is   held at fair value.   TEEC   Holdings   is subject to taxation   in the   United Kingdom at the current main rate of 19%.

9.  EARNINGS PER SHARE

	For the year ended 31 March 2022				For the period ended   31 March 2021
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Profit / (Loss) attributable to the equity holders of the Company (£'000)	1,257	3,504	4,761		(336)	(185)	(521)
Weighted average number of Ordinary Shares in issue (000)	100,004	100,004	100,004		58,156	58,156	58,156
Profit / (Loss) per Ordinary share (pence) - basic and   diluted	1.26p	3.50p	4.76p		(0.58p)	(0.32p)	(0.90p)

Dilution of the earnings per share   as a result of   the equity element of the investment management fee as disclosed in  Note  4, is not expected to have a material impact on the basic earnings per share.  

There is no difference between the weighted average Ordinary and diluted number of Shares.  

10.  DIVIDENDS AND INTEREST DISTRIBUTIONS

Interim dividends paid during year ended 31 March 2022	Dividend per share pence	Interest distribution per share pence	Total dividend £'000
Interim dividend for the period ended 31 March 2021	2.00	-	2,000
First quarter interim dividend for year ended 31 March 2022	1.375	-	1,375
Second quarter interim dividend for year ended 31 March 2022	1.375	-	1,375
Third quarter interim dividend for year ended 31 March 2022	0.815	0.560	1,375
	5.565	0.560	6,125

Interim dividends declared after 31 March 2022 and not accrued in the year	Dividend per share pence	Interest distribution per share pence	Total dividend £'000
Fourth quarter interim dividend for the year ended 31 March 2022	0.678	0.697	1,375
	0.678	0.697	1,375

On 14 June 2022, the Board declared a fourth quarter interim dividend of 1.375 pence per share with respect to the period ended 31 March 2022. The dividend is expected to be paid on or around 8 July 2022 to shareholders on the register on 24 June 2022. The ex-dividend date is 23 June 2022.  The Company has chosen to designate part of this interim dividend as an interest distribution. 0.697 pence per share will be paid as an interest payment and 0.678 as an ordinary dividend.

Shareholders in receipt of an interest distribution will be treated for UK tax purposed as though they received a payment of interest. This will result in a reduction in the corporation tax payable by the Company.

11.  NET ASSETS PER ORDINARY SHARE

	31 March 2022		31 March 2021
	£'000		£'000
Total shareholders' equity (£'000)	96,137		97,488
Number of Ordinary Shares in issue ('000)	100,014		100,000
Net asset value per Ordinary Share (pence)	96.12p		97.49p

12.  INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

As set out in Note 2, the Company designates its interest in its wholly owned direct subsidiary as an investment at fair value through profit or loss.

Summary of the Company's valuation is below:

	31 March 2022		31 March 2021
	£'000		£'000
Fair value at the start of the period	20,883		-
Loans advanced to TEEC Holdings Limited	32,704		20,996
Shareholding in TEEC Holdings Limited	23,315		-
Capitalised interest	519		-
Loan principal repaid	(2,103)		-
Movement in fair value of investments	3,634		(113)
Total investments as at end of the period	78,952		20,883

Reconciliation of movement in fair value

	31 March 2022		31 March 2021
	£'000		£'000
Fair value at start of the period	20,883		-
Loan advanced to TEEC Holdings Limited	32,704		20,996
Shareholding in TEEC Holdings Limited	23,315		-
Capitalised interest	519		-
Loan principal repaid	(2,103)		-
Fair value of portfolio at end of the period	75,318		20,996
Cash held in intermediate holding company	293		80
Fair value of other net assets in intermediate holding company	3,341		(193)
Fair Value of Company's investments as at end of the period	78,952		20,883

Loans advanced to TEEC Holdings in the year totalled £32,704,000, £200,000 was advanced as a working capital loan at a 0% interest rate.  £8,032,000, was advanced at an interest rate of 7.375% to enable TEEC Holdings to complete the loan investment in Spark Steam Limited on commensurate terms. £24,473,000 was advanced to enable TEEC Holdings to advance shareholder loans into the Hydroelectric portfolio of £24,473,000, on which TEEC Holdings charges interest of 5.00% and the Company charges interest of 4.75%.

The Company owns three shares in TEEC Holdings Limited, representing 100% of issued share capital,  allotted for a consideration of £23,315,000. The fair value of the Company's equity in TEEC Holdings Limited on 31 March 2022 is £26,836,000 (31 March 21: minus £113,000) and the fair value of the Company's debt interest in TEEC Holdings Limited at 31 March 2022 is £52,116,000 (31 March 21: £20,996,000),

Capitalised interest represents interest recognised in the income statement but not paid. This is instead added to the loan balance on which interest for future periods is computed. The loan from the Company to TEEC Holdings, which enabled TEEC Holdings to complete investments into Harvest, Glasshouse and Spark Steam, carry commensurate terms and repayment profiles. All payments from the borrower and capitalised interest are in accordance and in line with the contractual repayments with the respective underlying facility agreements with Harvest, Glasshouse and Spark Steam as agreed at inception

Reconciliation of Portfolio Valuation

	31 March 2022		31 March 2021
	£'000		£'000
Portfolio Valuation	78,787		20,996
Intermediate holding company cash	293		80
Intermediate holding company debt*	454		-
Intermediate holding company net working capital	(582)		(193)
Fair Value of Company's investments as at end of the period	78,952		20,883

*Debt arrangement costs of £454,000 (31 March 2021: nil) which are capitalised and expensed to profit or loss under amortised cost. At 31 March 2022 nil debt was drawn (31 March 2022: nil). 

Fair Value measurements  

As set out in Note 2, the Company accounts for its interest in its wholly owned direct subsidiary, TEEC Holdings, as an   investment at fair value through profit or loss.  

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within   the financial   assets or financial liabilities is determined   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 Company. Observable data is considered 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 financial instruments held at fair value are the instruments held by the Group in the SPVs, which are fair valued at each reporting date. The investments have been classified within level 3 as the investments are not traded and contain certain unobservable inputs. The Company's investments in TEEC Holdings are also considered to be level 3 assets.

As the fair value of the Company's equity and loan investments in TEEC Holdings is ultimately determined by the underlying fair values of the equity and loan investments, made by TEEC Holdings, the Company's sensitivity analysis of reasonably possible alternative input assumptions is the same as for those investments.

There have been no transfers between levels during the period.

Valuations are derived using a discounted cash flow methodology in line with IPEV Valuation Guidelines and consider, inter alia, the following:

i.  due diligence findings where relevant;

ii.  the terms of any material contracts including PPAs;

iii.  asset performance

iv.  power pirce forecasts from leading consultants; and

v.  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 assumptions relating to inflation, energy yield and power prices.

The shareholder loan and equity investments, in TEEC Holdings, are valued as a single asset class at fair value in accordance with IFRS 13 Fair Value Measurement.

Sensitivity

Sensitivity analysis is produced to show the impact of changes in key assumptions adopted to arrive at the valuation. For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case assumption, and that the number of investments in the portfolio remains static throughout the modelled life.

The analysis below shows the sensitivity of the portfolio value (and its impact on NAV) to changes in key assumptions as follows:

Discount rate

The weighted average valuation discount rate applied to calculate the portfolio valuation is 6.11% (31 March 21: 7.98%).

An increase or decrease in this rate by 0.5% points has the following effect on valuation

Discount Rate	NAV per share impact	-0.5% change	Total portfolio value	+0.5% change	NAV per share impact
	pence	£'000	£'000	£'000	pence
Valuation - March 2022	3.33	3,330	78,952	(3,042)	(3.04)

Energy yield

The table below shows the sensitivity of the Hydroelectric Portfolio valuation to a sustained decrease or increase of energy generation by minus or plus 5% on the valuation, with all other variables held constant. The fair value of the Hydroelectric Portfolio is assessed on a "P50" level of electricity generation, representing the expected level of generation over the long term.

A change in the forecast energy yield assumptions by plus or minus 5% has the following effect.

Energy Yield	NAV per share impact	-5%  change	Total portfolio value	+5% change	NAV per share impact
	pence	£'000	£'000	£'000	pence
Valuation - March 2022	(3.16)	(3,164)	78,952	3,150	3.15

Power Prices

The sensitivity considers a flat 10% movement in power prices for all years, i.e. the effect of adjusting the forecast electricity price assumptions applicable to the Hydroelectric Portfolio down by 10% and up by 10% from the base case assumptions for each year throughout the operating life of the Hydroelectric Portfolio.

A change in the forecast electricity price assumptions by plus or minus 10% has the following effect.

Power Prices	NAV per share impact	-10% change	Total portfolio value	+10% change	NAV per share impact
	pence	£'000	£'000	£'000	pence
Valuation - March 2022	(2.16)	(2,157)	78,952	2,638	2.64

Inflation

The Hydroelectric Portfolio's income streams are principally subsidy based, which is amended each year with inflation and power prices, which the sensitivity assumes will move with inflation. Operating expenses relating to the Hydroelectric Portfolio, typically move with inflation, but debt payments on the shareholder loans are fixed. This results in the portfolio returns and valuations being positively correlated to inflation. The average long-term inflation assumption across the portfolio are 3.00% for RPI from 2023 to 2030 and 2.40% thereafter, 2.25% for CPI from 2023. The Company also models a Power Curve Indexation set at 2.75% from 2023, as wholesale power prices are not intrinsically linked to consumer prices, unlike costs of sales and labour. 

The sensitivity illustrates the effect of a 0.5% decrease and a 0.5% increase from he assumed annual inflation rates in the financial model throughout the operating life of the portfolio.

Inflation	NAV per share impact	-0.5% change	Total portfolio value	+0.5% change	NAV per share impact
	pence	£'000	£'000	£'000	pence
Valuation - March 2022	(2.31)	(2,309)	78,952	2,549	2.55

13.  TRADE AND OTHER RECEIVABLES

	For the year ended 31 March 2022		For the period ended 31 March 2021
	£'000		£'000
Prepayments	114		148
Other receivables	339		53
	453		201

14.  TRADE AND OTHER PAYABLES

	For the year ended 31 March 2022		For the period ended 31 March 2021
	£'000		£'000
Accrued expenses	125		72
Other payables	287		77
	412		149

15.  SHARE CAPITAL AND RESERVES

For the year ended 31 March 2022
Allotted, issued and fully paid:	Number of shares	Nominal value of shares (£)
Opening balance as at 1 April 2021	100,000,000	1,000,000.00
Ordinary Shares of 1p each	14,079	140.79
Closing balance of Ordinary Shares at 31 March 2022	100,014,079	1,000,140.79

For the period ended 31 March 2021
Allotted, issued and fully paid:	Number of shares	Nominal value of shares (£)
Opening balance as at 23 June 2020	-	-
Allotted upon incorporation
Ordinary Shares of 1p each	1	0.01
Management shares	50,000	50,000.00
Allotted/redeemed following admission to Specialist Fund Segment of the LSE
Ordinary Shares of 1p each	99,999,999	999,999.99
Management shares	(50,000)	(50,000.00)
Closing balance of Ordinary Shares at 31 March 2021	100,000,000	1,000,000.00

The initial placing of 100,000,000 ordinary shares of £0.01, took place on 19 October 2020, raising gross proceeds of £100,000,000.

The Company issued 14,079 shares of £0.01 each to the Investment Manager in year ending March 2022 raising proceeds of £13,325 creating share premium of £13,184 (see note 19).

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

16.  SPECIAL DISTRIBUTABLE RESERVE

Following admission of the Company's   Ordinary Shares to trading on the Specialist Fund Segment of the London Stock Exchange, the Directors applied to the Court and obtained a   judgement on   12 January   2021   to cancel the amount standing to the credit   of the share premium account of   the Company.  

As stated by the Institute of Chartered Accountants in England and Wales ("ICAEW") and the Institute of   Chartered Accountants in Scotland ("ICAS") in the technical release TECH 02/17BL, The Companies (Reduction   of Share Capital) Order 2008 SI 2008/1915 ("the Order") specifies the cases in   which a reserve arising from a   reduction in a company's capital (i.e., share capital, share premium account, capital redemption reserve or   redenomination reserve) is to be treated as a realised profit as a matter of law.  

The Order also disapplies the   general prohibition in section 654 on the distribution of   a reserve arising from a   reduction of capital. The Order   provides that if a limited company   having a share capital reduces   its capital   and the reduction is confirmed   by order of court, the reserve arising from the reduction is treated as a realised profit unless the court orders   otherwise.  

The amount of the share premium account cancelled and credited to the Company's Special reserve was £97 .0  million   which can be utilised to fund distributions by way of dividends to the Company's shareholders.  As at year ending 31 March 2022, the special distributable reserve balance is £91.4m.

17.  FINANCIAL RISK MANAGEMENT

The Company's   investment   activities expose it to a variety of financial   risks;   including, interest rate risk, power price risk, credit risk and liquidity risk. The Board of Directors has overall responsibility for overseeing the management of financial risks, however the review and management of financial risks are delegated to the AIFM.

Each risk and its management are summarised below.  

Interest rate risk  

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The Company is exposed to interest rate risk on its cash balances held with counterparties, bank deposits, advances to counterparties through loans to its subsidiaries. The Company may be exposed to changes in variable market rates of interest of interest as this could impact the discount rate and therefore the valuation of the investments as well as the fair value of the loan receivable. The Company is not considered to be materially exposed to interest rate risk so no sensitivity has been performed. Sensitivity analysis is disclosed in note 12 to show the impact of changes in key assumptions adopted to arrive at the valuation of investments.

The Company's interest and non-interest-bearing assets and liabilities are summarised below:

	Interest bearing	Non-interest bearing	Total value
	£'000	£'000	£'000
For the year ended 31 March 2022
Assets:
Investments at fair value through profit or loss	52,116	26,836	78,952
Other receivables		339	339
Cash and cash equivalents	17,144	-	17,144
Total Assets	69,260	27,175	96,435
Liabilities:
Trade and other payables	-	412	412
Total Liabilities	-	412	412

	Interest bearing	Non-interest bearing	Total value
	£'000	£'000	£'000
For the period ended 31 March 2021
Assets:
Investments at fair value through profit or loss	20,883	-	20,883
Other receivables	-	201	201
Cash and cash equivalents	76,553	-	76,553
Total Assets	97,436	201	97,637
Liabilities:
Trade and other payables	-	149	149
Total Liabilities	-	149	149

Liquidity risk  

Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they fall due. The   AIFM and the Board continuously monitor forecast and actual cash flows from operating, financing, and investing activities to consider payment of dividends, repayment of trade and other payables or funding further investing activities.

The Company   ensures it maintains adequate   reserves and   has through TEEC Holdings put in place   a revolving credit facility. The Company will   continuously monitor forecast and actual cash flows   to seek to   match the maturity profiles of financial assets and liabilities.  

At the period end, the   Company's   investments, through TEEC Holdings,   were in equity and secured loan investments in private companies, in which there is no listed market and therefore such investments would take time to realise, and there is no assurance that the valuations placed on the investments would be achieved from any such sale process.   The Company's direct subsidiary TEEC Holdings, is   the entity  through  which the Company holds its investments, the liquidity of TEEC Holdings is reflective of the investments which it holds.  

Financial assets and liabilities by maturity at the period end are shown below:  

For year ended March 2022	Less than 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Assets:
Investments at fair value through profit or loss	-	-	78,952	78,952
Receivables	339	-	-	339
Cash and cash equivalents	17,144	-	-	17,144
Liabilities:
Trade and other Payables	(412)	-	-	(412)
	17,071	-	78,952	96,023

For period ended March 2021	Less than 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Assets:
Investments at fair value through profit or loss	-	-	20,883	20,883
Receivables	201	-	-	201
Cash and cash equivalents	76,553	-	-	76,553
Liabilities:
Trade and other Payables	( 149 )	-	-	( 149 )
	76,605	-	20,883	97,488

Credit Risk  

Credit risk is the risk that a counterparty of the   Group   will be unable or unwilling to meet a commitment that   it has   entered into   with the   Group.   It is a key part of the pre-investment due diligence.   The credit standing   of   the companies which the Group intends to lend to   or invest in   is reviewed, and the risk of default estimated for each significant counterparty position. Monitoring is on-going, and   period   end positions are reported to the Board on a quarterly basis.  

Credit risk also arises from cash and cash equivalents, derivative financial instruments, loan investments held through TEEC Holdings and deposits with   banks and financial institutions. The Company and its subsidiaries   may   mitigate their risk on cash   investments   and derivative transactions by only transacting with major international financial institutions with high credit   ratings assigned by international credit rating agencies.  

The Company had  no derivatives during the period and the Company's cash balances were held in the Company's current account.  

The carrying value of the investments, trade and other receivables and cash represent the Company's maximum exposure to credit risk. 

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 and loss. As at the 31 March 2022, the Company held nine indirect investments through its intermediary holding company, TEEC Holdings. The value of the investments held by TEEC Holdings will vary according to a number of factors including: discount rate used, asset performance and forecast power prices. Sensitivity analysis is disclosed in note 12.

Capital Risk Management

The capital structure of the Company at the year-end consists of equity attributable to equity holders of the Company, comprising issued capital and reserves. The Board continues to monitor the balance of the overall capital structure so as to maintain investor and market confidence. The Company is not subject to any external capital requirements.

Market Risk

Returns from the Company's indirect investments are affected by the price at which the investments are acquired. The value of these investments will be a function of the discounted value of their expected future cash flows, and as such will vary with, inter-alia, movements in interest rates, market prices and competition for such assets. The Investment Manager carries out a full valuation semi-annually and this valuation exercise takes into account such changes.

18.  SUBSIDIARIES

The following table shows subsidiaries of the   Group. As the Company is regarded as an Investment Entity as referred to in  Note  2, the   subsidiaries have   not been consolidated in the preparation of the financial statements.  

Investment	Place of Business	Ownership interest as   at   31 March 2022
TEEC   Holdings  *	UK	100.00%
Achnacarry Hydro Limited**	UK	100.00%
Elementary Energy Limited**	UK	99.32%
Green Highland ALLT Choire A Bhalachain (255) Limited**	UK	100.00%
Green Highland ALLT Ladaidh (1148) Limited**	UK	100.00%
Green Highland ALLT Luaidhe (228) Limited**	UK	100.00%
Green Highland ALLT Phocachain (1015) Limited**	UK	100.00%

Investment	Place of Business	Ownership interest as   at   31 March 2021
TEEC   Holdings*	UK	100.00%

*Direct shareholding in a financial services investment holding company.

** Indirect shareholding in an electricity production company.

19.  RELATED PARTY TRANSACTIONS

Directors Fees

The amounts incurred in respect of Directors fees during the period to 31 March 2022 was £200,000 (31 March 2021: £91,026). These amounts have been fully paid at 31 March 2022. The amounts paid to individual directors during the period were as follows:

	For the year ended 31 March 2022		For the period ended 31 March 2021
Dr John Roberts (Chair)	£75,000		£34,135
Rosemary Boot	£45,000		£20,481
Sonia McCorquodale	£40,000		£18,205
Dr Anthony White	£40,000		£18,205

Directors Expenses

The expenses claimed by the Directors during the period to 31 March 2022 was £643 (31 March 2021: nil). These amounts have been fully paid at 31 March 2022. The amounts paid to individual directors during the period were as follows:

	For the year ended 31 March 2022		For the period ended 31 March 2021
Dr John Roberts (Chair)	£551		-
Rosemary Boot	£51		-
Sonia McCorquodale	-		-
Dr Anthony White	£41		-

Directors' interests

Details of the direct and indirect interest of the Directors and their close families in the ordinary share of one pence each in the Company at 31 March 2022 were as follows:

	Number of Shares		% of Issued share Capital
Dr John Roberts (Chair)	40,000		0.04%
Rosemary Boot	40,000		0.04%
Sonia McCorquodale	10,000		0.01%
Dr Anthony White	40,000		0.04%

The AIFM and Investment Manager  

The Company and Triple Point Investment Management LLP have entered into the Investment Management Agreement pursuant to which the Investment Manager has been given responsibility, subject to the overall supervision of the Board, for active discretionary investment management of the Company's Portfolio in accordance with the Company's Investment Objective and Policy. 

As the entity appointed to be responsible for risk management and portfolio management, the Investment Manager is the Company's AIFM. The Investment Manager has full discretion under the Investment Management Agreement to make investments in accordance with the Company's Investment Policy from time to time. 

This discretion is, however, subject to: (i) the Board's ability to give instructions to the Investment Manager from time to time; and (ii) the requirement of the Board to approve certain investments where the Investment Manager has a conflict of interest in accordance with the terms of the Investment Management Agreement. 

Under the terms of the Investment Management Agreement, the Investment Manager is entitled to a fee calculated at the rate of: 

· 0.9% per annum of the adjusted NAV in respect of the Net Asset Value of up to, and including, £650 million; and 

· 0.8% per annum of the adjusted NAV in respect of the Net Asset Value in excess of 650 million. 

The management fee is calculated and accrues quarterly and is invoiced quarterly in arrears. During the period ended 31 March 2022, management fees of £436,478 (31 March 2021: £6,213) were incurred of which £207,765 (31 March 2021: £6,213) was payable at the period end. 

No annual management fee can accrue or be charged on any undeployed cash funds until such time as 75% or more of the IPO proceeds have been deployed. For these purposes, "Deployed" shall mean invested in the acquisition or development of assets. From 10 December 2021, following completion of the £19.6 million acquisition of the final three hydro assets acquired in the year, the Management fee has been charged by reference to the Company NAV.  

In June 2021, the Company completed a £8.0 million senior debt investment in Spark Steam Limited, a company that owns and operates a CHP asset which was part of the pipeline identified at IPO. The transaction followed on from similar investments made in March 2021 in Harvest Generation Services Limited and Glasshouse Generation Limited. The transaction refinanced debt previously provided in part by investees of other funds under the management of the Investment Manager and was approved by the Board in line with the Company's conflict of interest procedures.

In November 2021 and December 2021, the Company acquired a portfolio of operational, Feed in Tariff accredited, hydroelectric power project for a total consideration of £46.5 million. The acquisition included the purchase of the entire equity interest from Triple Point 2011 VCT plc and Triple Point Income VCT plc who are managed by Triple Point Investment Management. The transaction followed a full conflicts process, with two separate teams within the Investment Manager dealing with the sale and purchase, The two teams were segregated, with distinct independent reporting lines and separate access to the electronic files relevant to the transaction. The transaction was approved by the Board in line with the Company's conflict of interest procedures. 

Investment Managers Interest in shares of the Company

On the 18 June 2021, the Company issued 675 Ordinary Shares to the Investment Manager in accordance with the terms of the Investment Management Agreement pursuant to which 20%. Of the management fee paid is used to acquire new ordinary shares of £0.01 each in the capital of the Company. The issue price per Investment Management Ordinary Share was £0.9749 (being the prevailing Net Asset Value per share), in accordance with the terms of the Investment Management Agreement.

On the 16 December 2021, the Company issued 13,404 Ordinary Shares to the Investment Manager in accordance with the terms of the Investment Management Agreement pursuant to which 20%. Of the management fee paid is used to acquire new ordinary shares of £0.01 each in the capital of the Company. The issue price per Investment Management Ordinary Share was £0.9450 (being the prevailing Net Asset Value per share), in accordance with the terms of the Investment Management Agreement.

On the 7 February 2022, the Investment Manager purchased, on the secondary market, 158,882 ordinary shares of £0.01 each in the capital of the Company at an average price of £0.9440 pence per share.

Details of the interests of the Investment Manager, held by an entity within the Wider Triple Point Group, in the ordinary shares of one pence each in the Company as at 31 March 2022 were as follows:

	Number of Shares		% of Issued share Capital
Perihelion One Limited	672,962		0.67%

Perihelion One Limited is a company within the Wider Triple Point Group.

Guarantees and other commitments

The Company is the guarantor of the £40 million RCF between its sole wholly owned subsidiary TEEC Holdings Limited and TP Leasing Limited. The RCF was entered into on the 29 March 2022 and is undrawn.

TP Leasing Limited is an established private credit and asset leasing business which is managed by the Investment Manager and, as a result, is deemed to be a related party as defined in the Listing Rules. The RCF is deemed to be a "smaller related party transaction" for the purposes of LR11.1.10R. As set out in the IPO Prospectus, the Company has adopted a related party policy pursuant to which, prior to entering into the Facility Agreement, (i) the RCF was approved by the Directors and (ii) the Company obtained a fair and reasonable opinion from a qualified, independent adviser. The Board was satisfied with the conflict management procedures put in place, including team segregation within the Investment Manager and obtaining independent third-party pricing validation.

On the 31 March 2022, TEEC Holdings entered into a £45.6 million investment commitment, to fund the b uild of a portfolio of four geographically diverse BESS assets in the UK. £44.9 million of the commitment is outstanding and due to be deployed during the year ending 31 March 2023.  The commitment is expected to be funded via the undrawn £40 million RCF available to TEEC Holdings and cash reserves of the Company.

20.  EVENTS AFTER THE REPORTING PERIOD

On 9 June 2022, the Company's sole wholly owned subsidiary, TEEC Holdings Limited, entered into an agreement to fund its first energy efficient lighting opportunity. The Company has committed to fund £1 million to a lighting solutions provider who will install efficient lighting and controls at a logistics company.

Dividend  

On 14 June 2022, the Board declared a fourth quarter interim dividend of 1.375 pence per share with respect to the period ended 31 March 2022. The dividend is expected to be paid on or around 8 July 2022 to shareholders on the register on 24 June 2022. The ex-dividend date is 23 June 2022.  The Company has chosen to designate part of this interim dividend as an interest distribution. 0.697 pence per share will be paid as an interest payment and 0.678 as an ordinary dividend.

21.  ULTIMATE CONTROLLING PARTY

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

GLOSSARY AND DEFINITIONS

The Act	Companies Act 2006
AIC Code	The AIC Code of Corporate Governance produced by the Association of Investment Companies
AIFM	The alternative investment fund manager of the Company, Triple Point Investment Management LLP
AIFMD	The EU Alternative Investment Fund Managers Directive 2011/61/EU
BESS	Battery Energy Storage Systems
BESS Portfolio	£45.6 million debt facility to a subsidiary of Virmati Energy Ltd (trading as Field), to fund a portfolio of four Battery Energy Storage Systems assets
CCC	Climate Change Committee
CHP	Combined heat and power
CHP Portfolio	A total debt investment of £29 million into Harvest and Glasshouse and Spark Steam
The   Company	Triple Point Energy Efficiency Infrastructure Company plc (company number   12693305).
DCF	Discounted Cash Flow
ESG	Environmental, Social and Governance
EU	European Union
EV	Electric Vehicle
FCA	Financial Conduct Authority
FRC	Financial Reporting Council
GAV	Gross Asset Value
GHG	Green House Gas
Group	The Company and any subsidiary undertakings   from   time to time
Harvest and Glasshouse	Harvest Generation Services Limited and Glasshouse Generation Limited
HVAC	Heating, Ventilation and Air Conditioning
Hydroelectric Portfolio	Elementary Energy Limited Green Highland Allt Ladaidh (1148) Limited Green Highland Allt Choire A Bhalachain (255) Limited Green Highland Allt Phocachain (1015) Limited Green Highland Allt Luaidhe (228) Limited Achnacarry Hydro Limited
ITC	Investment Trust Company
Investment Manager	Triple Point Investment Management LLP
IPO	The admission by the Company of 100 million Ordinary Shares to trading on the Specialist Fund Segment of the Main Market, which were the subject of the Company's initial public offering on   19 October 2020
IPO Prospectus	The Company's Prospectus for its initial public offering, published on 25 August 2020.
kWh	Kilowatt-hour
LED	Light-emitting   Diode
Listing Rules	Financial Conduct Authority Listing Rules
MW	Megawatt
MWh	Megawatt-hour
NAV	The   net asset   value, as at any date, of the assets of the Company after deduction of all liabilities determined in accordance with the accounting policies adopted by the Company from time-to-time.
Net Zero	A target of completely negating the amount of greenhouse gases produced by human activity, to be achieved by reducing emissions and implementing methods of absorbing carbon dioxide from the atmosphere
OCR	Ongoing charges ratio.
PPA	Power Purchase Agreement.
PRI	Principals for Responsible Investing
Project SPV	Special Purpose Vehicle   in which energy efficiency assets are held.
RES	Renewable Energy Systems
SDG	Sustainable Development Goals.
SFDR	Sustainable Finance Disclosure Regulation
SONIA	Sterling Overnight Index Average
SORP	Statement of Recommended Practise.
Spark Steam	Spark Steam Limited
TCFD	Task Force on Climate-related Financial Disclosures.
TEEC Holdings	The wholly owned subsidiary of the Company:   TEEC Holdings Limited (company number   12695849).
Wider Triple Point Group	Triple Point LLP (company number OC310549) and any subsidiary undertakings from time to time.

 

END

 

 

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