TIDMJLEN

RNS Number : 4611B

JLEN Environmental Assets Group Ltd

10 June 2021

10 June 2021

JLEN Environmental Assets Group Limited

Announcement of results for the year ended 31 March 2021

The Directors of JLEN Environmental Assets Group Limited (the "Company" or "JLEN"), the listed environmental infrastructure fund, are pleased to announce the Company's results for the year ended 31 March 2021.

Financial highlights

   --      Portfolio valuation as at 31 March 2021 of GBP571.4m (31 March 2020: GBP537.1m) 

-- NAV per ordinary share of 92.2 pence as at 31 March 2021 (31 March 2020: 97.5 pence), reflecting the impact of an increase in UK corporation tax rates from 19% to 25% from April 2023, which has been applied for the remainder of the life of the portfolio, and a downward revision to electricity and gas price forecasts

-- Total dividends declared of 6.76 pence per ordinary share for the year to 31 March 2021 (2020: 6.66 pence per ordinary share), in line with the target set out in the 2020 Annual Report. Dividend cover of 1.07 times for the financial year

   --      Target dividend for the year to 31 March 2022 of 6.80 pence per ordinary share 
   --      Share price total return for the period since IPO of 65.3% (7.4% annualised) 

Portfolio highlights

   --      Six acquisitions completed during the year increasing the portfolio to a total of 36 assets 

-- First acquisitions in the standalone battery and low carbon transport sectors, increasing the Company's diversification

-- Diversified portfolio now 32% wind, 26% AD, 21% solar, 17% waste and wastewater, 2% low carbon & energy efficiency and 2% hydro by value

-- Solid performance from the portfolio, which generated 0.4% above target with the AD and solar portfolios both outperforming against generation targets and wind performing marginally below its generation target

Other highlights

-- Changes to investment policy approved by shareholders, recognising a broader definition of environmental infrastructure to reflect the growth of the market since the Company's IPO in 2014, allowing the Company access to a wider pool of investment opportunities

   --      Strong pipeline of diversified assets for further growth 

-- Post the year end in May 2021 the Company raised GBP56.9 million in an oversubscribed placing

-- Post the year end in May 2021, JLEN agreed a new ESG-linked GBP170 million revolving credit facility expiring in May 2024

   --      Appointment of Alan Bates and Jo Harrison to the Board of Directors, effective 10 June 2021 

Richard Morse, Chairman of JLEN, said:

"JLEN's portfolio has been resilient throughout the Covid-19 period and is well placed for the recovery. There has been continued diversification into new sectors and shareholders recently approved an updated investment policy that emphasises JLEN's aim of investing in environmental infrastructure that supports the transition to a low carbon economy or which mitigates the effects of climate change."

Annual report

A copy of the annual report has been submitted to the National Storage Mechanism and will shortly be available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The annual report will also be available on the Company's website at www.jlen.com where further information on JLEN can be found.

Details of the conference call for analysts and investors

A webinar for the annual results will be held at 10:00 a.m. (UK time) on 10 June, hosted by Chris Holmes and Chris Tanner, Co-lead Investment Advisers to JLEN. To register for the webinar, please contact SEC Newgate UK on +44 (0)20 3757 6882 or by email at JLEN@secnewgate.co.uk.

Presentation materials will be posted on the Company's website, www.jlen.com, from 9.00 a.m.

For further information, please contact:

 
Foresight Group                 +44(0)20 3667 8100 
Chris Tanner 
Chris Holmes 
Winterflood Investment Trusts   +44(0)20 3100 0000 
Neil Langford 
Chris Mills 
SEC Newgate UK                  +44(0) 20 3757 6882 
Elisabeth Cowell 
Megan Kovach 
 

OUR PURPOSE

JLEN aims to invest in a diversified portfolio of environmental infrastructure projects that support more environmentally friendly approaches to economic activity whilst generating a sustainable financial return. It seeks to integrate consideration of sustainability and environmental, social and governance ("ESG") management into its activities, which help to manage risks and identify opportunities.

ABOUT US

JLEN Environmental Assets Group Limited ("JLEN" or the "Company") is an environmental infrastructure investment fund which aims to provide shareholders with a sustainable, progressive dividend, paid quarterly, and to preserve the capital value of its portfolio on a real basis over the long term through the reinvestment of cash flows not required for the payment of dividends.

Investment policy

JLEN's investment policy is to invest in a diversified portfolio of Environmental Infrastructure. Environmental Infrastructure is defined by the Company as infrastructure assets, projects and asset-backed businesses that utilise natural or waste resources or support more environmentally friendly approaches to economic activity, support the transition to a low carbon economy or which mitigate the effects of climate change. Such investments will typically feature one or more of the following characteristics:

-- long-term, predictable cash flows, which may be wholly or partially inflation--linked cash flows;

   --     long-term contracts or stable and well-proven regulatory and legal frameworks; or 
   --     well-established technologies, and demonstrable operational performance. 

AT A GLANCE

Our results for the full year ended 31 March 2021.

 
                                   2021       2020  Change 
----------------------------  ---------  ---------  ------ 
Market capitalisation GBPm    GBP612.3m  GBP606.9m   +0.9% 
Share price p                    112.0p     111.0p   +0.9% 
Annual dividend per share p       6.76p      6.66p   +1.5% 
Net Asset Value GBPm          GBP504.2m  GBP533.0m   -5.4% 
Net Asset Value per share p       92.2p      97.5p   -5.4% 
Portfolio value GBPm          GBP571.4m  GBP537.1m   +6.4% 
----------------------------  ---------  ---------  ------ 
 

-- Dividends of 6.76 pence per share declared for the year to 31 March 2021 (2020: 6.66 pence per share). Dividend cover of 1.07x

   --     Six acquisitions completed during the year, giving a total of 36 assets 

-- NAV per share of 92.2 pence reduced from 97.5 pence at 31 March 2020, due to the impact of increased UK corporation tax rates from 19% to 25% from April 2023 for the remainder of the life of the portfolio and a downward revision to electricity and gas price forecasts

-- Positive performance of the portfolio, which performed 0.4% above budget with the anaerobic digestion ("AD") and solar portfolios both outperforming against budget and wind performing 1% below its generation budget

   --     Share price total return since IPO of 65.3% (7.43% annualised) 
   --     Change to investment policy approved by the shareholders, recognises a broader definition of environmental infrastructure to reflect the growth of the market since the Company's IPO in 2014 and allowing the Company access to a wider pool of investment opportunities 
   --     Strong pipeline of diversified assets for further growth 
   --     In May 2021 the Fund raised GBP56.9 million in an oversubscribed placing 

-- In May 2021, JLEN announced a new ESG-linked GBP170 million revolving credit facility expiring in May 2024

PORTFOLIO AT A GLANCE

At 31 March 2021, the portfolio included onshore wind, PV solar, anaerobic digestion, hydro, battery storage and waste & wastewater processing projects and low carbon transport.

36(1) assets

310.7(1) MW capacity

See our website for more information:

www.jlen.com/portfolio

   (1)   Does not include investment into FEIP. 
 
Wind                                                                    Ownership interest 
----------------------------------------------------------------------  ------------------ 
Bilsthorpe 10.2MW 1.0 ROC wind farm. Five MM82 Senvion turbines.                      100% 
Burton Wold Extension 14.4MW 0.9 ROC wind farm. Nine General Electric 
 1.6MW--100 turbine                                                                   100% 
Carscreugh 15.3MW 0.9 ROC wind farm. 18 Gamesa G52 turbines.                          100% 
Castle Pill 3.2MW 1.0 ROC wind farm. Three 900kW EWT and one 0.5MW 
 Nordtank turbines.                                                                   100% 
Dungavel 26MW 0.9 ROC wind farm. 13 Vestas 2MW V80 turbines.                          100% 
Ferndale 6.4MW 1.0 ROC wind farm. Eight 800kW Enercon turbines.                       100% 
Hall Farm 24.6MW 1.0 ROC wind farm. 18 MM82 Senvion turbines.                         100% 
Le Placis Vert 4MW FiT accredited wind farm. Five Enercon E-53 
 turbines.                                                                            100% 
Llynfi Afan 24MW 0.9 ROC wind farm. 12 Gamesa 2MW G80 turbines.                       100% 
Moel Moelogan 14.3MW wind farm. Nine Siemens SWT-62-1.3MW and two 
 Bonus-1.3MW turbines. 1.0 ROC on both turbine types.                                 100% 
New Albion 14.4MW 0.9 ROC wind farm. Seven MM92 Senvion turbines.                     100% 
Plouguernével 4MW FiT accredited wind farm. Five Enercon E-53 
 turbines.                                                                            100% 
Wear Point 8.2MW 0.9 ROC wind farm. Four Senvion MM82 turbines.                       100% 
----------------------------------------------------------------------  ------------------ 
 
 
Anaerobic digestion                                                                             Ownership interest 
----------------------------------------------------------------------------------------------  ------------------ 
Biogas Meden Biogas--to--grid anaerobic digestion plant. Accredited under both the Renewable 
 Heat Incentive ("RHI") and FiT, c.5MWth and 0.4MWe.                                                          100% 
Egmere Energy Agricultural biogas--to--grid anaerobic digestion plant. Accredited under both 
 the RHI and FiT, c.5MWth and 0.5MWe.                                                                         100% 
Grange Farm Agricultural biogas--to--grid anaerobic digestion plant. Accredited under both 
 the RHI and FiT, c.5MWth and 0.5MWe                                                                          100% 
Icknield Farm(1) Agricultural biogas--to--grid anaerobic digestion plant. Accredited under 
 both the RHI and FiT, c.5MWth and 0.4MWe.                                                                     53% 
Merlin Renewables Agricultural biogas--to--grid anaerobic digestion plant. Accredited under 
 both the RHI and FiT, c.5MWth and 0.5MWe.                                                                    100% 
Peacehill Farm Agricultural biogas--to--grid anaerobic digestion plant. Accredited under both 
 the RHI and FiT, c.5MWth and 0.25MWe.                                                                         49% 
Rainworth Energy Agricultural biogas--to--grid anaerobic digestion plant. Accredited under 
 both the RHI and FiT, c.2.2MWe.                                                                              100% 
Vulcan Renewables Agricultural biogas--to--grid anaerobic digestion plant. Accredited under 
 both the RHI and FiT, c.5MWth and 0.5MWe.                                                                    100% 
Warren Energy Agricultural biogas--to--grid anaerobic digestion plant. Accredited under both 
 the RHI and FiT, c.5MWth and 0.5MWe.                                                                         100% 
----------------------------------------------------------------------------------------------  ------------------ 
 
 
Solar                                                                                               Ownership interest 
--------------------------------------------------------------------------------------------------  ------------------ 
Amber 9.8MW comprising two separate sites: Five Oaks (4.8MW) and Fryingdown (5MW). Both accredited 
 under the pre--August 2011 UK Feed--in Tariff ("FiT") regime.                                                    100% 
Branden 14.7MW comprising two separate sites: Luxulyan & Tredinnick (8.9MW) and Victoria (5.8MW), 
 both accredited for two ROCs.                                                                                    100% 
CSGH 33.5MW combined capacity comprising four sites: Higher Tregarne (4.9MW) accredited for 
 1.6 ROCs, Crug Mawr (7.5MW), Golden Hill (6.3MW) and Shoals Hook (14.8MW) accredited for 1.4 
 ROCs.                                                                                                            100% 
Monksham Total generating capacity of 10.7MW. Accredited for 1.6 ROCs.                                            100% 
Panther - small-scale solar portfolio 6.5MW portfolio of 1,099 systems of domestic rooftop, 
 commercial rooftop and ground mount solar installations, distributed across England, Scotland 
 and Wales. Accredited under the UK FiT regime.                                                                   100% 
Pylle Southern Total generating capacity of 5MW. Accredited under the UK FiT regime.                              100% 
--------------------------------------------------------------------------------------------------  ------------------ 
 
 
Waste & wastewater                                                                                Ownership interest 
------------------------------------------------------------------------------------------------  ------------------ 
Bio Collectors The Bio Collectors food waste anaerobic digestion plant processes around 100,000 
 tonnes of food waste each year. The Bio Collectors waste collection business collects food 
 waste from in and around Greater London.                                                                        70% 
Codford Biogas Codford Biogas is a 100,000 tonnes per annum food waste permitted plant based 
 in Wiltshire, UK.                                                                                              100% 
ELWA The ELWA project processes around 440,000 tonnes of household waste each year from four 
 London boroughs.                                                                                                80% 
Tay The Tay wastewater treatment project services the equivalent of around 250,000 people 
 from the Dundee and Arbroath areas                                                                              33% 
------------------------------------------------------------------------------------------------  ------------------ 
 
 
Hydro                                                                                             Ownership interest 
------------------------------------------------------------------------------------------------  ------------------ 
Northern Hydropower Two run-of--river hydro plants and an operational battery storage system. 
 Both hydro plants accredited under FiT; combined capacity between both hydro plants and the 
 battery storage system is 1.8MW.                                                                               100% 
Yorkshire Hydropower Two run--of--river hydro plants and an operational battery storage system. 
 Both hydro plants accredited under FiT; combined capacity between both hydro plants and the 
 battery storage system is 2MW.                                                                                 100% 
------------------------------------------------------------------------------------------------  ------------------ 
 
 
Low carbon & energy efficiency                                                                Ownership interest 
--------------------------------------------------------------------------------------------  ------------------ 
CNG Foresight Portfolio of CNG refuelling stations located in the UK.                                     25%(3) 
West Gourdie Construction stage battery storage asset with a 50MW storage capacity, located 
 in Scotland.                                                                                               100% 
--------------------------------------------------------------------------------------------  ------------------ 
 
 
FEIP 
------------------------------------------------------------------------- 
FEIP Skaftåsen Vindkraft AB 35-turbine wind farm under construction. 
FEIP Torozos 94MW wind farm, which comprises 27 SGRE 132m, 3.5MW 
 wind turbines spread across two sites. 
------------------------------------------------------------------------- 
 
 
Total assets(2)                  36 
------------------------------- 
Wind                             13 
Anaerobic digestion               9 
Solar                             6 
Waste & wastewater                4 
Hydro                             2 
Low carbon & energy efficiency    2 
------------------------------- 
 
 
Total MW(2)                      310.7 
-------------------------------  ----- 
Wind                             169.0 
Anaerobic digestion               42.2 
Solar                             80.2 
Waste & wastewater                15.5 
Hydro                              3.8 
Low carbon & energy efficiency     n/a 
-------------------------------  ----- 
 
   (1)   JLEN also provides a senior secured loan facility to the project. 
   (2)   Does not include investment into FEIP. 

(3) JLEN holds 25% of the "A" shares. "A" shares have a different economic entitlement than "B" shares, including a priority return.

MARKET AND OPPORTUNITIES

The benefits of diversification have been clear throughout JLEN's lifetime as the portfolio has grown both in size and technology sub-sectors. Where climatic conditions are variable and often unpredictable, a portfolio that comprises assets that are exposed to many different aspects can be a resilient one in reducing the impact of any one of them.

What can be considered as environmental infrastructure over recent years has grown as markets evolve and the themes of sustainability and decarbonisation present further opportunities for JLEN. Future investments may not always follow the model of subsidised wind and solar investments as these become less prevalent and more expensive, but JLEN will continue to look for characteristics of good infrastructure investments such as inflation linkage and revenue visibility.

 
Investment policy                  Market developments                Investment outlook 
---------------------------------  ---------------------------------  -------------------------------- 
The Company invests in             As markets have evolved 
 environmental infrastructure       and the themes of sustainability 
 projects, such as infrastructure   and decarbonisation are 
 assets, projects and               prioritised by governments 
 asset-backed businesses            as areas for future investment 
 that utilise natural               and support, further 
 or waste resources or              opportunities in environmental 
 support more environmentally       infrastructure have presented 
 friendly approaches to             themselves. 
 economic activity, support 
 the transition to a low 
 carbon economy or which 
 mitigate the effects 
 of climate change. 
---------------------------------  ---------------------------------  -------------------------------- 
Generation of renewable            Within the UK, the electricity     Opportunities in bioenergy 
 energy                             sector has decarbonised            as a form of renewable 
                                    the fastest and will               energy offer attractive 
                                    be the foundation for              return profiles compared 
                                    decarbonising the economy.         to core renewables. Combined 
                                    Plans for a doubling               with carbon capture and 
                                    of electricity demand              storage, the biomass 
                                    as transport and heat              sector can deliver negative 
                                    switch from petrol/diesel          emissions, making it 
                                    and gas respectively               a key sector in the road 
                                    to electricity are set             to net zero. 
                                    out in the UK Government's 
                                    recent White Paper. It 
                                    further predicts a fourfold 
                                    increase in low carbon 
                                    generation. 
---------------------------------  ---------------------------------  -------------------------------- 
Low carbon and energy              Energy efficiency is               Transport contributes 
 efficiency                         an integral part of addressing     28% of domestic GHG emissions 
                                    climate change. The UK's           in the UK, with 90% of 
                                    Ten Point Plan provides            this coming from our 
                                    for 600,000 new electric           roads. Electric vehicle 
                                    heat pumps to be installed         and low carbon transport 
                                    each year by 2028. By              infrastructure such as 
                                    2030 all newly installed           the use of biofuels can 
                                    heating systems should             help to decarbonise this 
                                    be low carbon or appliances        sector. 
                                    that can be converted              Battery storage opportunities, 
                                    to a clean fuel supply.            including co-locating 
                                    Electric heat pumps and            with existing renewable 
                                    hydrogen, green gas and            generating assets, are 
                                    shared heat networks               likely to be prevalent 
                                    all have their part to             to offset intermittency 
                                    play in decarbonising              in the grid. Developing 
                                    heat. Decarbonising the            sectors such as vertical 
                                    transport sector beyond            farming and glasshouses 
                                    the electrification of             could offer attractive 
                                    consumer vehicles has              investments. 
                                    also become a key focus. 
---------------------------------  ---------------------------------  -------------------------------- 
Supply and treatment               The management of scarce           Further build out of 
 of water and processing            resources and reduction            Energy from Waste ("EfW") 
 of waste                           in waste remains a focus           facilities in the UK 
                                    for governments in limiting        may present investment 
                                    the environmental impact           opportunities in the 
                                    of economic activity.              short term once operational. 
                                    The Resources and Waste            In other jurisdictions 
                                    Strategy published by              with established EfW 
                                    Defra includes ambitions           plants, owners may seek 
                                    to eliminate food and              to exit partially or 
                                    biodegradable waste to             fully. 
                                    landfill by 2030. The              The increase in food 
                                    UK Environment Bill sets           waste material in the 
                                    out new measures for               UK over the coming years 
                                    food waste collection              will increase demand 
                                    and prevention of this             for processing capacity 
                                    material going to landfill         at anaerobic digestion 
                                    or incineration from               facilities. Opportunities 
                                    2023.                              to acquire or expand 
                                                                       existing sites will be 
                                                                       considered. 
---------------------------------  ---------------------------------  -------------------------------- 
Geographic spread of               Over the last year, governments    Seeking investment opportunities 
 investments                        around the world have              outside of the UK in 
                                    started to address the             order to reduce exposure 
                                    scale of the climate               to local power markets 
                                    challenge. Statements              and climatic conditions 
                                    of their intentions to             continues to be a key 
                                    assist in decarbonising            activity of the Investment 
                                    a variety of sectors               Adviser - Foresight Group, 
                                    bring into focus the               as demonstrated by the 
                                    opportunities present              recent acquisition of 
                                    not only in the UK but             the Energie Tecnologie 
                                    in other geographies               Ambiente S.r.l. Energy 
                                    as well. The scope of              from Waste plant in Italy. 
                                    environmental infrastructure 
                                    is truly a global one. 
---------------------------------  ---------------------------------  -------------------------------- 
 

YEAR AT A GLANCE

The Company has continued to progress and investments have been made to add to our existing portfolios in agricultural anaerobic digestion, food waste processing and hydro, while new investments have been made into low carbon transport and standalone battery storage projects.

Our response to Covid-19

The Covid-19 pandemic is an unprecedented crisis in our time, one which could not be predicted, and the changes to our business have been rapid and unplanned. However, the combination of JLEN's risk averse investment strategy and robust management practices have allowed the Company to continue to operate with minimal disruptions.

March 20

-- Paid a dividend of 1.665 pence per share (relating to the three-month period ended 31 December 2019)

April 20

-- Investment into Peacehill Farm AD plant for an aggregate amount of c.GBP11 million. The plant is located in Wormit, Fife, Scotland and has a thermal capacity of c.5MWth and predominantly produces biomethane which is exported to the national gas grid

June 20

-- Paid a dividend of 1.665 pence per share (relating to the three-month period ended 31 March 2020)

   --     Announced target dividend of 6.76 pence for 2020/21, increased from 6.66 pence for 2019/20 
   --     Announced the appointment of Stephanie Coxon as a non-executive Director of the Company 
   --     JLEN joins FTSE 250 

September 20

   --     JLEN annual general meeting 
   --     Announced the resignation of Denise Mileham as non-executive Director 

-- Paid a dividend of 1.69 pence per share (relating to the three-month period ended 30 June 2020)

-- Acquisition of Northern Hydropower - two operational hydropower stations and a battery storage system

December 20

-- Acquired a minority stake in CNG Foresight which owns a portfolio of compressed natural gas ("CNG") refuelling stations in the UK

-- Paid a dividend of 1.69 pence per share (relating to the three-month period ended 30 September 2020)

February 21

   --     Acquired Codford Biogas, an electrical exporting food waste AD plant in Wiltshire, England 

March 21

-- Acquired West Gourdie - a fully consented and construction-ready 50MW battery project located in Dundee, Scotland

-- JLEN Extraordinary General Meeting - shareholders approved changes to the JLEN investment policy

   --     JLEN Capital Markets Day outlining JLEN's view on the areas of opportunity for environmental infrastructure and adding insight into some of the recent JLEN acquisitions 

-- Acquired Rainworth Energy Limited - an electrical exporting AD plant in Nottinghamshire, England

Post the financial year end

May 21

   --     The Fund raised GBP56.9 million in an oversubscribed placing 
   --     Announced a new ESG-linked GBP170 million revolving credit facility expiring in May 2024 

-- Acquired a 50% equity stake in Sandridge Battery Storage Limited that holds the development rights to construct the Sandridge Battery Storage project, a 50MW lithium-ion battery energy storage plant based in Melksham in Wiltshire, UK

-- Acquisition of a 45% equity stake in Energie Tecnologie Ambiente S.r.l., a 16.8MW Energy from Waste power plant which processes refuse derived fuel, located in the municipality of Manfredonia in the Apulia region of southern Italy

CHAIRMAN'S STATEMENT

JLEN's portfolio has been resilient throughout the Covid-19 period and is well placed for the recovery. There has been continued diversification into new sectors and shareholders recently approved an updated investment policy that emphasises JLEN's aim of investing in infrastructure that supports the transition to a low carbon economy or which mitigates the effects of climate change.

On behalf of the Board, I am pleased to present the Annual Report of the Company for the year ended 31 March 2021.

Results

The 2020/21 year has borne the brunt of the Covid-19 pandemic. We recognise the difficult and, for some, tragic time that this has been and we express our sympathy for all those affected and our gratitude for all involved in addressing the challenges that the pandemic has posed. My Board colleagues and I thank the many people and organisations that have contributed to JLEN over the course of the past year for their significant efforts in challenging circumstances. It is truly appreciated.

The year started with exceptionally low power prices resulting from the collapse in demand that the initial Covid-19 lockdown precipitated. To illustrate, energy prices achieved by JLEN's wind farms in April and May 2020 were less than half the prices achieved in the same period for the previous year. The Company has a relatively low level of exposure to wholesale electricity prices compared to a typical UK wind or solar portfolio, but this still impacted upon revenues amidst a backdrop of uncertainty about how long these conditions would persist.

Despite the Covid-19 lockdowns, the portfolio has continued to generate cash, enabling the Company to pay a fully covered dividend once again.

The Company has continued to progress even against this backdrop of uncertainty. Investments have been made to add to our existing portfolios in agricultural anaerobic digestion, food waste processing, and hydro. The Company has also made steps into new areas such as standalone grid-scale batteries and low carbon transport, in the last case with a stake in a portfolio of refuelling stations providing a biomethane product for heavy goods vehicles.

In March 2021, shareholders approved an update to the Company's investment policy, allowing the Company to benefit from emerging opportunities in environmental infrastructure, as global themes of sustainability and decarbonisation gain pace. A well attended Capital Markets Day presented by the Investment Adviser gave investors and analysts the opportunity to see what this might mean in more detail. The presentation materials are available on our website www.jlen.com.

As of the year end, JLEN has a diversified portfolio of 36 operational solar, onshore wind, waste & wastewater, hydro, battery, anaerobic digestion and low carbon transport projects based in the UK and France, representing a total of 310.7MW, which are substantially backed by long-term contracts and/or stable regulatory-backed subsidy arrangements.

The Net Asset Value ("NAV") per share at 31 March 2021 was 92.2 pence, compared with 97.5 pence at 31 March 2020. The main driver for the NAV per share reduction has been the impact of a UK corporation tax increase announced by the UK Government in response to the extraordinary level of public spending to alleviate the financial impact of the Covid-19 pandemic. In considering the impact of the tax increase on the portfolio, the Board has been prudent in assuming that the prevailing rate of 25% will apply from 2023 for the remainder of the portfolio life. Any future reduction in the rate of corporation tax would increase the NAV.

JLEN's profit after tax for the year was GBP8.1 million (2020: loss after tax GBP10.7 million) resulting in earnings per share of 1.5 pence (2020: loss per share of 2.1 pence). Removing unrealised movements on investments at fair value, the adjusted profit before tax is GBP37.0 million (2020: GBP32.8 million), equivalent to 6.8 pence per share (2020: 6.5 pence).

Cash received from the portfolio assets by way of distributions, which includes interest, loan repayments and dividends, was GBP48.2 million during the year. After operating and finance costs, cash flow from operations of the Group was GBP39.5 million, covering the cash dividends paid during the year of 6.735 pence per share by 1.07x.

The Company's efforts to communicate its approach to environmental, social and governance ("ESG") matters have been recognised by the investment community, with the Company's ESG report winning the IR Society's Best Practice Award for Best Communication of ESG in the FTSE 250 category. We are very aware, however, that commitment to ESG principles is an ongoing process and there is no room for complacency when considering how to build on these solid foundations into the future. This year, for the first time, we disclose the Company's key ESG performance indicators, intended to give investors more information about what we are doing. We do this not because we think we excel in all areas - we know that we do not - but because without a clear understanding of the state of things now and a means of measurement, we cannot be clear where we are making progress and where more effort is required.

Dividends

The Company has delivered a covered dividend for the year of 1.07x (2020: 1.1x), in line with our progressive dividend policy, despite project revenues received from the sale of wholesale electricity and gas being significantly affected by the Covid-19 pandemic, particularly during the first part of the year when Covid-19 related lockdowns impacted demand for electricity.

During the year, the Company paid a final dividend for the period ended 31 March 2020 of 1.665 pence per share (GBP9.1 million). Interim dividends of 1.69 pence per share were paid in September 2020 (GBP9.2 million), of 1.69 pence per share in December 2020 (GBP9.2 million) and of 1.69 pence per share in March 2021 (GBP9.2 million).

The Board is pleased to confirm the quarterly dividend in respect of the quarter to 31 March 2021 of 1.69 pence per share, which was approved on 29 April 2021 and will be paid on 25 June 2021, bringing the total to the target of 6.76 pence per share for the full year. Those shareholders that joined the register in May 2021, post the period end, are also eligible for this dividend, explaining the difference between paid and declared dividend cover of 1.07x and 1.04x respectively.

The Board has decided to increase the Company's dividend target to 6.80 pence per share for the year to 31 March 2022, in line with the Company's progressive dividend policy. We announced on 11 June 2020 that following 31 March 2021 the explicit link with inflation would cease to form part of this policy and thereafter the Company would follow a progressive dividend policy. This approach was taken after careful consideration of the outlook for power prices and the UK Government's published inflation statistics, this represents an increase of 0.6% at a time of low inflation and general pressure on company earnings brought about by the Covid-19 pandemic. Whilst the risks and constraints to meeting our target dividend continue to remain sensitive to asset-level operational issues, resource volume based impacts, and reduced electricity prices, the Board is pleased to have been able to deliver yield to investors in line with target through the pandemic and recognises the importance to investors of maintaining a sustainable and growing dividend. We will aim to deliver that in the coming years.

Portfolio performance

During the year, overall generation from the renewable energy portfolio was 977GWh, in line with generation targets.

The wind assets generated 44% of JLEN's total generation for the period (2020: 51%). Wind generation was about 1.4% below budget at 432GWh, due to lower than expected wind speeds, particularly during December and January. Operational availability was generally in line with budget, with a marked improvement in the availability of the legacy Senvion sites, now serviced by Siemens Gamesa. Operational data also validated an uplift in generation for two wind farms that had installed upgrade packages, in one case demonstrating an increased generation of over 4% against the pre-upgrade budget.

Electricity generation from the solar assets was 79GWh, comprising 8% of JLEN's energy generated (2020: 8%), which was 1.8% above budget. The portfolio was unaffected by recurrences of historical performance issues, with the most significant detractor from performance being network operator constraints applied to the Shoals Hook site during a period of extended network maintenance. Adjusting for this, generation would have been 3.7% over budget. At the Amber Fryingdown site, a long-term technical upgrade was trialled and found to deliver a significant benefit; this will now be rolled out to the remainder of the Amber sites.

Gas generation from the agricultural AD portfolio of 461GWh, 47% of JLEN's energy generated (2020: 39%), was 2.1% above budget on a MWh basis. Several plants performed strongly during the year in terms of gas production, and the Vulcan plant also completed its second major upgrade during the period ahead of schedule, enabling it to flow gas at a rate of 1200m3 hour compared to an initial investment case of 450m3 hour. While a minority of plants experienced some negative variance on feedstock costs, generally the year was a strong one, with value enhancements such as the disruptors (a piece of equipment that breaks feedstock into smaller pieces, increasing gas production) adding value and contributing to increased resilience of the portfolio.

The results from our renewable energy assets are dependent in part on the level of energy prices and the Covid-19 pandemic had a material impact on these. The first part of the year under review, coinciding with the first Covid-19 lockdown, was impacted by very low power prices. However, by the end of the calendar year power prices had rebounded strongly, helped in part by a cold winter. The wind, solar and AD projects took advantage of strong market sentiment to fix prices ahead during this period, and as a result 87% of the renewable energy portfolio's electricity price exposure is fixed for the current summer 2021 season and 78% for the upcoming winter 2021/22 season. For gas, the position is 73% and 75% fixed for summer 2021 and winter 2021/22 seasons, respectively.

The waste & wastewater assets represent 17% of the portfolio in terms of Net Asset Value, following the acquisition of the Codford food waste business. The PFI-backed ELWA waste and Tay wastewater projects have both operated well in the period, meeting or exceeding their key contractual targets. ELWA was able to make sufficient progress towards implementing fire defence improvements at its major facilities to satisfy the insurance market, with works starting later in 2021. Both projects have coped well with the challenges of the Covid-19 pandemic, being essential infrastructure and benefiting from large, experienced operators well able to manage the Covid-19 related changes to the work practices.

The Bio Collectors food waste processing business with an associated collections business was JLEN's investment most affected by Covid-19 throughout the period. Historically sourcing its food waste from municipal waste and hospitality and catering, the national lockdowns severely reduced the waste coming from these latter categories. Although later in the year gas production improved as alternative feedstocks were found, including some energy crops, these feedstocks were typically more expensive than food waste and so impacted the business's profitability. Management have developed a recovery plan that shows a steady recovery in gas volumes from Covid-19 levels.

The Codford food waste processing business was added to the portfolio in February 2021, shortly before the year end. Codford is less reliant upon hospitality and catering for feedstock, drawing more upon waste from food manufacturers, and so has been relatively resilient throughout the pandemic. The Investment Adviser and the Board remain positive about the longer-term prospects for well-located food waste plants in England such as Bio Collectors and Codford, with regulatory changes mandating the collection of source-segregated food waste coming into force in 2023.

Investment performance

There has been a reduction in NAV in the financial year, resulting principally from the change in corporation tax rates and a reduction in power price forecasts; factors that are outside the Company's control and which the Board chooses to reflect conservatively in the portfolio valuation. These are long-term assumptions, and it is very likely that the current assumed levels will change - positively or negatively - over time. Notwithstanding this, the premium to NAV present in the share price has held up well during the year under review, influenced by the reliable dividend that JLEN provides to shareholders. Over the 12-month period to 31 March 2021, shareholders saw a share price total return of 7.4%.

Operations

The Investment Adviser's asset management team has identified a number of value-enhancing initiatives during the year that have contributed GBP13.6 million to the portfolio valuation, and work continues on further plans that the Board expects to contribute positively in the years ahead. The biggest gains came from recognition of asset upgrades improving generation (GBP4.7 million) and enhancements to the AD portfolio such as the successful delivery of the second Vulcan AD upgrade and increased revenues from sale of green gas certificates (GBP4.5 million).

Acquisitions

During the year under review, the Company announced the following six acquisitions:

Peacehill Farm anaerobic digestion plant

On 2 April 2020, the Company announced an investment into Peacehill Farm AD plant, located in Wormit, Fife in Scotland, for an aggregate amount of c.GBP11 million. The investment comprises the provision of a debt facility and subscription for a minority equity stake in JLEAG AD Limited which holds, through its wholly owned subsidiary Peacehill Gas Limited, the rights and operational assets at the Peacehill Farm AD plant. The plant has a thermal capacity of c.5MWth and predominantly produces biomethane to be injected into the national gas grid. In addition, the plant also has a 0.25MWe CHP engine and is accredited under the Renewable Heat Incentive ("RHI") and Feed--in Tariff ("FiT") schemes.

Northern Hydropower portfolio

On 17 September 2020, the Company acquired two operational hydropower assets for GBP4.74 million, including working capital. The plants are located in Yorkshire and Cornwall and the Yorkshire-based asset includes a co--located battery storage system. The assets acquired are:

-- De Lank hydro, a 99kW hydro project located on the De Lank River, commissioned in October 2011;

-- Knottingley hydro, a 500kW dual turbine hydro project located on the River Aire, which was commissioned in October 2017; and

   --     a 1.2MW battery co-located at Knottingley, commissioned in January 2018. 

Both hydro projects are accredited under the 20-year FiT scheme.

CNG Foresight portfolio

In December 2020, JLEN acquired a minority stake in a portfolio of five compressed natural gas ("CNG") refuelling stations for heavy goods vehicles, located in the UK. JLEN will also contribute to a funding line for the construction of a further pipeline of CNG refuelling stations as part of a national network. In February, the acquisition of a construction stage asset in Glasgow was completed and post the period end a further construction stage asset was added to the portfolio, bringing the total number of stations to seven.

The investment has been made alongside other funds managed by Foresight Group and the developer and operator of the stations, CNG Fuels Limited.

Codford Biogas

In February 2021, JLEN acquired a 100% equity stake in Codford Biogas Limited ("CBL"). CBL holds the rights and operational assets that make up the Codford anaerobic digestion plant based in Wiltshire, UK.

The plant has been operational since 2014 and has a current electrical capacity of 3.8MWe which is generated by processing up to 100,000 tonnes per annum of both liquid and solid food waste from the commercial and industrial sector.

The plant is accredited under the Feed-in Tariff ("FiT") and the Renewable Heat Incentive ("RHI") schemes.

West Gourdie battery storage

In March 2021, JLEN acquired a 100% equity stake in FS West Gourdie Limited. The company owns the development rights to a fully consented 50MW battery energy storage system project in Dundee, Scotland.

Negotiations on a fully wrapped EPC contract are being finalised, with construction expected to begin in summer 2021.

Energisation and commercial operations are anticipated to begin in spring 2022.

Rainworth Energy

In March 2021, JLEN acquired a 100% equity stake in Rainworth Energy Limited. The AD plant is a 2.2MW electrical plant based in Nottinghamshire. The plant has been operational since 2016 and supplies heat and power to Center Parcs' Sherwood Forest resort.

The plant is permitted to accept up to 42,400 tonnes of feedstock per year and is accredited under the FiT and the RHI schemes.

These acquisitions bring the total capacity of the renewable energy assets in the JLEN portfolio to 310.7MW at the period end.

Acquisitions post the period end

Post the year end, JLEN has made two further acquisitions:

Sandridge Battery Storage

In May 2021, JLEN acquired a 50% equity stake in Sandridge Battery Storage Limited which holds the development rights to construct the Sandridge Battery Storage project, a 50MW lithium-ion battery energy storage plant based in Melksham in Wiltshire, UK. The Sandridge project is fully consented and construction ready. Negotiations on a fully wrapped EPC contract are being finalised. The project is expected to reach energisation and start commercial operations in October 2022.

Energie Tecnologie Ambiente

In May 2021, JLEN acquired a 45% equity stake in Energie Tecnologie Ambiente S.r.l ("ETA"), a 16.8MW Energy from Waste power plant which processes refuse derived fuel, located in the municipality of Manfredonia in the Apulia region of southern Italy. The investment has been made alongside FEIP, which also acquired a 45% equity stake. ETA is owned by Marcegaglia Investments S.r.l. which will retain a 10% equity stake in the EfW plant.

Foresight Energy Infrastructure Partners ("FEIP")

In January 2020, JLEN announced a commitment of EUR25 million to Foresight Energy Infrastructure Partners SCSp ("FEIP"), a Luxembourg limited partnership investment vehicle. In addition to the EUR1.6 million investment made in the previous reporting period, a further investment of EUR3.7 million has been provided to the vehicle for investment into a construction stage Swedish wind farm - Skaftåsen Vindkraft AB - and Torozos, an operational 94MW wind farm in Spain.

These investments are included in the portfolio sector analysis analysis of JLEN's portfolio on a look-through basis.

Debt facilities

In May 2021, post the year end, the Fund renewed its revolving credit facility ("RCF") that had been due to reach maturity in June 2022. The new facility remains at a committed level of GBP170 million for three years, expiring in May 2024. National Australia Bank and Royal Bank of Scotland International have joined incumbent lenders ING, HSBC and NIBC, broadening JLEN's banking relationships. The headline margin is 200 bps over SONIA, with an adjustment of +/- 5 bps depending on performance against ESG metrics including quantity of renewable energy produced and contributions to community funds.

The RCF gives JLEN a committed source of flexible funding outside of equity raisings at a low cost. The facility is periodically paid down from the proceeds of equity issuance which then allows JLEN to make new investments with the certainty of funding and on a timely basis, reducing the performance drag associated with holding excess cash.

Share capital

In May 2021, post the year end, the Company successfully raised GBP56.9 million via an institutional placing, making full use of its tap issuance facility of 10% of issued share capital. This was at a price of 104 pence per share, a 12.8% premium to NAV, achieved via a book-building process co-ordinated by the Company's brokers, Winterflood. The placing was substantially oversubscribed. Funds raised were used to repay drawings under the RCF providing available capital for investment in a pipeline of opportunities.

The Directors anticipate seeking authority to refresh the Company's 10% tap issuance authority at the annual general meeting in September 2021, which would provide the Company with the ability to issue up to 60.1 million shares on a non-pre-emptive basis at a price not dilutive to existing shareholders. At the September 2020 AGM, the Company applied to shareholders for authority to issue an additional 10% of issued share capital on a non-pre-emptive basis (providing authority to issue up to a total of 20% of issued share capital on a non-pre-emptive basis). This resolution proposing an additional 10% authority was not passed by shareholders. While the Board considers that this means of raising new capital is efficient and cost-effective and does not feel that the interests of shareholders are compromised given that it only issues shares at a premium to its NAV, the Board is not proposing a resolution for approval of an additional 10% authority at the 2021 AGM reflecting the feedback from shareholders on this matter.

Valuation

The Net Asset Value at 31 March 2021 was GBP504.2 million, comprising GBP571.4 million portfolio valuation, GBP13.5 million of cash held by the Group, less GBP82.0 million drawn on the Company's (immediate subsidiary's) revolving credit facility, together with positive working capital balances of GBP1.3 million.

The Investment Adviser has prepared a fair market valuation of the portfolio as at 31 March 2021. This valuation is based on a discounted cash flow analysis of the future expected equity and loan note cash flows accruing to the Group from each portfolio investment. This valuation uses key assumptions which are recommended by the Investment Adviser using its experience and judgement, having taken into account available comparable market transactions and financial market data in order to arrive at a fair market value.

To provide assurance to the Board with respect to the valuation, an independent verification exercise of the methodology and assumptions applied by Foresight is performed by a leading accountancy firm and an opinion is provided to the Directors. The Directors have satisfied themselves as to the methodology used and the assumptions adopted and have approved the valuation of GBP571.4 million for the portfolio of 36 investments as at 31 March 2021. This equates to a Net Asset Value of 92.2 pence per share.

Risks and uncertainties

While it is the Investment Adviser that manages the risks facing the Company on a day-to-day basis, it is the Board of the Company, as a self-managed fund, which retains ultimate responsibility. The Company's Risk and Audit Committees, which report to the Board, regularly review the effectiveness of the Company's internal control policies and procedures for the identification, assessment and reporting of risks (as well as those of the Investment Adviser, the Fund Administrator and certain other critical third-party service providers).

As with my last Chairman's statement, it is still the case that the dominant risk facing the world at large is Covid-19 and the many far-reaching implications for the way we live, travel and work. While it is reassuring to see the resilience of the portfolio over the last year and also to see positive signs of a return to some kind of normality in the UK, it would be wrong to assume that there are no consequences still to be felt by the Company and the environmental infrastructure sector. The Risk Committee continues to pay close attention to emerging Covid-19 related risks in the portfolio and the Investment Adviser remains in close contact with asset service providers, particularly those like Bio Collectors where we anticipate some level of recovery.

Beyond Covid-19, the Board considers that the principal risks and uncertainties for JLEN have not materially altered from those set out in the last published Annual Report of the Company and an updated risk register can be found on pages 35 to 48 of the Annual Report 2021. As we have seen with the increase to UK corporation tax and the near-term slowing of the rate of inflation, the pandemic has changed the outlook for existing risks in ways that may not have been contemplated 18 months ago. While it is to be hoped that the increase to UK corporation tax is the most significant change for the Company flowing from the need for governments to bolster their finances, the risk remains that government explores other revenue raising avenues that may impact the Company.

A summary of the principal risks and uncertainties is included on pages 35 to 48 of the Annual Report 2021. The Directors do not consider that Brexit represents a significant risk for the Fund, as more than 98% of the portfolio by value is located in Great Britain and should not be affected directly by matters that are currently the subject of negotiation between the UK Government and the EU, such as customs arrangements and trade deals.

The Board notes investors' recent appetite for the Company's shares and the relative resilience of the renewables sector in terms of valuations and the ability to maintain dividends compared to other investment sectors. The consequences of the Covid-19 pandemic will take time to crystallise, but the Board is confident that the themes of sustainability, cash generation and resilience are solid and that environmental infrastructure is one of the sectors that will prosper in the 21st century, giving the Company an optimistic long-term outlook.

Outlook

As governments look to "build back better" following the significant level of uncertainty introduced by the Covid-19 pandemic, the outlook is favourable for companies involved in environmental infrastructure. Instead of maintaining the status quo, there has been a measurable increase in ambition from countries around the globe to tackle climate change and set out their individual roadmaps to net zero.

This year the UK hosts the 26th UN Climate Change Conference of the Parties (COP26) who has set out four key goals: to limit global warming to 1.5 degrees celcius; enable communities and habitats to adapt to climate change; mobilise climate finance; and to collaborate to deliver action. This is an opportunity for major nations to debate and agree upon measures that will achieve these goals and, through this, a vision of what level of investment is required, in what sectors and with what technologies will become more tangible.

As an environmental infrastructure fund, JLEN is excited by this outlook as it considers itself well placed to capture investment opportunities across a variety of sectors, technologies and geographies. Indeed, recognising that the investment horizon has significantly broadened since its IPO in 2014, the Board received shareholder approval in March of this year to update its investment policy.

The new policy wording better describes the type of infrastructure assets the Fund is seeking to invest in given these new market dynamics. Importantly, there is no intention on the part of the Board or the Investment Adviser to shift the investment focus significantly to change the nature of the Fund. Indeed, one of JLEN's most recent investments (the Codford food waste AD asset) has a very strong contracted revenue stream. However, future investments may not always follow the model of subsidised wind and solar investments as these become less prevalent and more expensive, but the Investment Adviser will continue to look for characteristics of good infrastructure investments such as inflation linkage and revenue visibility.

Where climatic conditions are variable and often unpredictable, a portfolio that comprises assets that are exposed to many different aspects can be resilient in reducing the impact of any one of them. The benefits of diversification have been clear to the Board and the Investment Adviser throughout JLEN's lifetime as it has grown the portfolio in size and technology sub-sectors. Given our portfolio mix, JLEN has one of the lowest exposures to wholesale power prices compared to a typical UK wind or solar portfolio and we have been able to contract with a wider variety of companies, technology partners and stakeholders.

This last year has seen JLEN invest in a new sector, biomethane refuelling stations, which is a clear demonstration of its success in seeking out non-mainstream investment opportunities which can provide higher returns, less market competition and a way to contribute to a low carbon economy that hasn't been fully developed. It provides a good example of where the Investment Adviser is focusing its efforts in building an attractive investment pipeline.

JLEN remains a UK-focused fund and the present restriction of at least 50% of the portfolio being in the UK remains in force. However, particularly with Foresight's presence in other European countries, we would expect the non-UK element to grow over time. To date, our overseas assets include two onshore wind farms in France and our EUR25 million commitment to the FEIP fund which has invested in a construction stage wind farm in Sweden and an operational wind farm in Spain. Post the financial year end, we have added to our overseas assets by way of a EUR26.75 million investment into an Italian Energy from Waste facility. The bioenergy sector continues to be an attractive asset class within which to seek investments given the strong market dynamics, positive contribution to environmental measures and attractive returns relative to core renewables that often are available. These investments may take the form of biomass to heat and power or further investments into Energy from Waste, whether from food waste anaerobic digestion or combustion of refuse derived fuel.

Annual general meeting

The annual general meeting will be held on 2 September 2021 at 10.00am at the Company's registered office in Guernsey. The Board recognises the ongoing public health advice in relation to travel at this time and notes the latest update from the States of Guernsey Civil Contingencies Authority which confirmed that it is expected that, from 1 July 2021, individuals with a full personal vaccination history arriving into the Bailiwick of Guernsey from a country within the Common Travel Area or a UK Green List Country will not be required to undergo a Covid-19 test or complete any period of self-isolation upon arrival. Whilst it remains the Board's intention that the annual general meeting will take place as scheduled on 2 September 2021, it should be noted that global developments ahead of, and following, 1 July 2021 may impact current guidance, and travel restrictions and regulations for those arriving into the Bailiwick of Guernsey could change at short notice. Shareholders are encouraged to submit their votes by proxy in advance of the meeting, and may provide details of any questions they may have to the Company Secretary in advance of the meeting. Responses to any queries will be made available on the Company's website, following the meeting.

Board matters

As part of our succession planning arrangements, we have recently announced two new directorial appointments. We are delighted to welcome Jo Harrison and Alan Bates to our Board. Jo is Director of Environment, Planning and Innovation at United Utilities and will bring a wealth of knowledge and leadership on environmental, social and governance ("ESG") issues to JLEN. Alan is Chief Executive of Guernsey Electricity and will bring significant skills and experience of planning and operations in the context of the energy industry. Both Jo and Alan will bring more general knowledge of relevant utility sectors to JLEN. Their appointments will help to ensure that the future leadership needs of the Company continue to be provided by a highly effective and diverse Board.

We have decided to establish a sub-committee of the Board focused on ESG issues, which Jo Harrison will chair. This will establish JLEN's leadership in putting ESG issues at the heart of its Board structure.

Peter Neville, who has provided sterling service to JLEN as a Board member since our IPO, as well as serving as Chair successively of the Risk and Audit Committees, will stand down from the Board following the AGM in September 2021. Peter has been a highly valued Board member and we shall miss his wisdom and diligence when he steps down. He will be succeeded as Chair of the Audit Committee by Stephanie Coxon.

Richard Morse

Chairman

9 June 2021

STRATEGIC REPORT

INVESTMENT OBJECTIVES

Our key objectives are set out below.

The Company aims to provide its investors with a sustainable, progressive dividend per share, paid quarterly. It aims to preserve, and where possible enhance, the capital value of its portfolio on a real basis through the reinvestment of cash flows not required for the payment of dividends.

The dividend for the year ended 31 March 2021 is 6.76 pence per share. Over the longer term, the Company targets an IRR of 7.5% to 8.5% (net of fees and expenses) on the IPO issue price of 100 pence per share, through investment in a diversified portfolio of environmental infrastructure projects.(1)

The Company seeks to maintain strong relationships with all its stakeholders and those of its investments, including investors, funders, key contractors, strategic partners, national and local government, and local communities.

 
Our key objectives 
---------------------------------------------------  ---------------------------------------------------------- 
Financial objectives                                 ESG objectives 
---------------------------------------------------  ---------------------------------------------------------- 
 
  *    Predictable income growth for shareholders      *    Promote the efficient use of resources 
 
 
  *    Preservation of capital over the longer term    *    Develop positive relationships with the communities 
                                                            in which JLEN works 
 
  *    Investment, growth and diversification 
                                                       *    Ensure effective, ethical governance across the 
                                                            portfolio 
---------------------------------------------------  ---------------------------------------------------------- 
 

(1) These are targets only and not profit forecasts. There can be no assurance that these targets will be met.

FUND OBJECTIVES

The Fund's key objectives and the measures against which they are assessed are summarised below:

 
Financial 
---------------  ---------------------------------------------------------    --------------------------------------------------------  ----------------------------------------------------------- 
Objectives       Principal risks                                            KPIs                                                        Outlook for 
                                                                                                                                         2022 
---------------  ---------------------------------------------------------  ----------------------------------------------------------  ----------------------------------------------------------- 
Predictable                                                                 6.76p 
income            *    Volume of resources available                         dividend declared for                                        *    Recovery in near-term power prices provides support 
growth for                                                                   the year, in line with                                            for dividend target 
shareholders                                                                 target 
Provide           *    Power prices 
investors                                                                     *    Target dividend for the next financial year 6.80       *    Fixed price arrangements covering 87% of the 
with a dividend                                                                    pence(1) , up from 2020                                     portfolio by generation also removes volatility 
of 6.80 pence     *    Inflation 
per 
share for the 
year              *    Changes in the legislative and regulatory framework 
to 31 March            that affect renewables and PPP projects 
2022. 
 
                  *    Operational risks in the portfolio 
---------------  ---------------------------------------------------------  ----------------------------------------------------------  ----------------------------------------------------------- 
Preservation of                                                             GBP504.2m 
capital over      *    Valuation risks (volume/energy                       Net Asset Value                                               *    Construction stage assets have potential for capital 
the                    prices/inflation/feedstock costs/operational         92.2p                                                              growth as they become operational 
longer term            performance)                                         Net Asset Value per share 
To preserve the 
capital value                                                                *    NAV GBP504.2 million, down from GBP533.0 million at     *    Higher out-turn inflation beneficial to portfolio 
of                *    Lack of future pipeline and/or funding                     31 March 2020                                                valuation 
the portfolio 
over 
the long term     *    Increased competition                                 *    Net Asset Value per share 92.2 pence, down 5.3 pence 
on                                                                                against 97.5 pence at 31 March 2020 
a real basis 
through           *    Changes in the legislative and regulatory framework 
active                 that affect renewables and PPP projects 
management 
of the 
portfolio 
and the 
reinvestment 
of cash flows 
not 
required for 
the 
payment of 
dividends. 
---------------  ---------------------------------------------------------  ----------------------------------------------------------  ----------------------------------------------------------- 
Investment,                                                                 36 
growth            *    Lack of future pipeline and/or funding                project investments                                         *    Potential for further opportunities to co-invest with 
and                                                                          GBP57.4m                                                         other investors in larger deals 
diversification                                                              portfolio value 
To invest in      *    Increased competition                                 310.7MW 
infrastructure                                                               total diversified capacity                                  *    Likely continued emphasis on less competitive areas 
assets,                                                                                                                                       of environmental infrastructure 
projects          *    Changes in the legislative and regulatory framework    *    Portfolio value GBP571.4 million, up 6.4% from 
and                    that affect renewables and PPP projects                     GBP537.1 million at 31 March 2020 
asset-backed                                                                                                                             *    Further scope to invest in other jurisdictions 
businesses that 
utilise natural                                                               *    Predominantly UK portfolio balanced by sector: 32% 
or waste                                                                           wind, 26% AD, 21% solar, 17% waste & wastewater, 2% 
resources                                                                          hydro and 2% low carbon & energy efficiency 
or support more 
environmentally 
friendly 
approaches 
to economic 
activity, 
support the 
transition 
to a low carbon 
economy or 
which 
mitigate the 
effects 
of climate 
change. 
---------------  ---------------------------------------------------------  ----------------------------------------------------------  ----------------------------------------------------------- 
 

(1) These are targets only and not profit forecasts. There can be no assurance that these targets will be met

JLEN has developed ESG KPIs to measure their performance over time against their stated ESG objectives.

 
Environmental, social and governance           ESG KPIs 
---------------------------------------------  ----------------------------------------------------------- 
Promote the efficient use of resources 
 To invest into projects that manage             *    Renewable energy generated 
 the availability of natural resources, 
 whether through utilisation of renewable 
 resources, increasing resource or               *    GHG emissions avoided 
 energy efficiency, or reusing or 
 recovering waste. 
                                                 *    Volume of waste treatment 
 
 
                                                 *    Volume of water treatment 
 
 
                                                 *    Environmental incidents 
 
 
                                                 *    Purchased energy originating from renewable sources 
 
 
                                                 *    Management of biodiversity 
 
 
                                                 *    Assessment of major contractors against ESG criteria 
---------------------------------------------  ----------------------------------------------------------- 
Develop positive relationships with 
 the communities in which JLEN works             *    Community funding 
 To encourage positive relationship--building 
 between portfolio assets and the 
 communities in which they sit.                  *    Health and safety incidents 
 
 
                                                 *    Community engagement procedures 
 
 
                                                 *    FTE jobs supported 
 
 
                                                 *    Accessibility of community fund documents 
 
 
                                                 *    Assessment of major contractors against ESG criteria 
---------------------------------------------  ----------------------------------------------------------- 
Ensure effective, ethical governance 
 across the portfolio                            *    Portfolio audits of health and safety practices 
 To manage portfolio assets in a 
 way that promotes ethical, effective 
 governance.                                     *    Diversity of SPV directors 
 
 
                                                 *    Portfolio audits of tax and financial practices 
 
 
                                                 *    Inclusion of ESG in SPV board agendas 
 
 
                                                 *    Assessment of major contractors against ESG criteria 
---------------------------------------------  ----------------------------------------------------------- 
 

Over the year we have agreed a set of ESG KPIs against which we intend to track the ESG performance of our investments over time. Metrics against these KPIs will be reported in full in the Annual Report 2022.

BUSINESS MODEL

JLEN invests in a diversified portfolio of environmental infrastructure projects that support environmentally friendly approaches to economic activity whilst generating a sustainable financial return.

Objectives

The Company seeks to acquire infrastructure assets with attractive characteristics through the extensive origination network of its Investment Adviser.

The Company seeks to maintain the assets to a high standard over their lifetime to support the long-term investment outlook of the Company and its investors.

The Company seeks to enhance returns, where possible, through active management that identifies opportunities to increase revenues and decrease costs.

The Company's approach to raising new equity capital is consistent with JLEN's business model objectives. New equity is raised periodically to repay drawings under JLEN's RCF used to acquire assets. The Company does not seek to raise more cash than drawings under the RCF and so will not face pressure to deploy capital or suffer a reduction in returns. This assists the Company in maintaining discipline and targeting attractive assets.

Competitive advantage

Investment Adviser - Foresight has a strong track record of managing assets in the sector and has access to an extensive pipeline of new projects.

Broad investment mandate/policy - allows for investment across a diversified range of technology sub-sectors and geographies, helping to reduce risks within the portfolio and providing a broader base of assets to consider at the acquisition stage.

Existing portfolio - well-established portfolio of assets which have the benefit of strong operational track records and predictable, wholly or partially inflation-linked cash flows supported by long-term contracts.

Sustainability - investment mandate is limited to investment in projects and assets which support a more environmentally friendly approach to economic activity and JLEN invests in assets with long project lives of up to 35 years.

Operating model

1 Acquire

The Investment Adviser uses its network of relationships to originate environmental infrastructure opportunities. These are screened for suitability and attractive opportunities are subject to a full due diligence process to assess risks, valuation assumptions and ESG considerations. Investment approval is multi-level and culminates in a decision of the Company's Investment Committee.

ESG criteria are an integral element of the investment assessment at the acquisition stage. The Investment Adviser undertakes a thorough rating analysis against a pre-determined minimum threshold for that asset class.

2 Maintain

Active asset management is employed by the Investment Adviser to maintain consistent performance and asset condition across the portfolio, identifying and, where possible, mitigating risks. Strong communications between the JLEN Board, the Investment Adviser and external asset managers and other operational and corporate counterparties aid in the management of the assets.

Third-party service providers, sometimes with the assistance of technical advisers, monitor and manage the ongoing performance of each asset in the JLEN portfolio and these third parties are regularly assessed by Foresight.

3 Enhance

All assets are included in a programme of enhancement initiatives to increase operational and financial performance and to better meet ESG objectives. Where appropriate, the Investment Adviser identifies where value can be realised to enhance the valuation of the portfolio to the benefit of all stakeholders

The Investment Adviser continually seeks to improve all areas of ESG across the portfolio and new assets are assessed to see where improvements to ESG matters can be made over the tenure of ownership.

Our business activities result in

Income for shareholders

6.76p

Dividends of 6.76p declared for year to 31 March 2021

Environmental benefits

977GWh

of green energy produced during the period

Enough energy to power 262,000 homes

Social benefits

Over GBP380,000

provided to local communities

Supporting government net zero carbon emissions targets with a portfolio of 36 assets that support environmentally friendly approaches to economic activity

Underpinned by

Risk management

Strong governance

Financial management

Portfolio sectors

Wind

Anaerobic digestion

Solar

Waste & wastewater

Hydro

Low carbon & energy efficiency

FUND STRUCTURE

Guernsey--registered investment company with a premium listing on the London Stock Exchange.

Introduction

The Company is a Guernsey--registered investment company with a premium listing on the London Stock Exchange. The Company makes its investments via a Group structure involving JLEN Environmental Assets Group (UK) Limited ("UK HoldCo"), an English limited company and wholly owned subsidiary of the Company, and additional intermediate holding companies for certain projects (the Company and UK HoldCo, together with their wholly owned intermediate holding companies, the "Group"). Through the Group structure, at 31 March 2021 the Company owns a portfolio of 36 environmental infrastructure investments in the UK, France, Spain and Sweden. The Company has a 31 March financial year end, announces half--year results in November and full-year results in June. The Company pays dividends quarterly, targeting payments in June, September, December and March each year.

The Company is a self--managed Alternative Investment Fund under the European Union's Alternative Investment Fund Managers Directive.

The Company has a Board of five independent non--executive Directors whose role is to manage the governance of the Company in the interests of shareholders and other stakeholders.

In particular, the Board scrutinises the performance of the Investment Adviser, approves and monitors adherence to the investment policy, determines the risk appetite of the Group, and sets Group policies. The Board meets a minimum of four times per year for regular Board meetings and there are a number of ad hoc meetings dependent upon business needs. In addition, the Board has three committees covering Audit, Risk and Nomination. Investment decisions are delegated to an Investment Committee comprising all members of the Board. The Board fulfils the responsibilities typically undertaken by a remuneration committee.

The Board as a whole also fulfils the functions of an investment advisory engagement committee. The Board will review and make recommendations on any proposed amendment to the Investment Advisory Agreement, keep under review the performance of the Investment Adviser and will manage the risks of the delegation of certain activities to the Investment Adviser. The Board also performs a review of the performance of the other key service providers to the Fund and meets to conduct these reviews at least once a year.

The key tasks of Foresight Group under the Investment Advisory Agreement are as follows:

   --     monitoring financial performance against Group targets and forecasts; 

-- advising the Board on investment strategy and portfolio composition to achieve the desired target returns within the agreed risk appetite;

   --     sourcing, evaluating and implementing the pipeline of new investments for the portfolio; 

-- monitoring the operational management of, and managing the investment cash flows from, the Group's investments;

-- minimising cash drag (having uninvested cash on the balance sheet) and improving cash efficiency generally;

-- managing the process and analysis for semi--annual valuations of the Group's portfolio submitted to the Board for approval;

-- ensuring good financial management of the Group, having regard to accounting, tax and debt covenants;

   --     hedging non--sterling investments; and 
   --     managing the Company's investor reporting and investor relations activities. 

The Board takes advice from the Investment Adviser, Foresight Group LLP on matters concerning the market, the portfolio and new investment opportunities. Day--to--day management of the Group's portfolio is delegated to the Investment Adviser. The Company has an Investment Advisory Agreement in place with Foresight Group LLP which can be terminated with 12 months' notice.

Praxis Fund Services Limited is Company Secretary and Administrator to the Fund. Other key service providers to the JLEN Group include Winterflood Securities as corporate broker, SEC Newgate as financial public relations advisers, Mourant Ozannes as legal advisers as to Guernsey law, Hogan Lovells as legal advisers as to English law, Link Registrars as registrars, Deloitte LLP as auditor, and NIBC, NAB, ING, RBSI and HSBC as lenders to the Group via the new GBP170 million revolving credit facility.

The Board formally reviews the performance of all key service providers on an annual basis.

Acquisitions

The Fund will seek to acquire further investments going forward sourced via the Investment Adviser's extensive deal-sourcing capabilities across the geographies in which the Fund is permitted to invest. In selecting the projects to acquire, the Investment Adviser and the Directors will be obliged to ensure that these projects meet the Company's investment policy.

The Investment Adviser will be subject to the overall supervision of the Board and all decisions on the acquisition of new investments and the disposal of existing investments will be subject to the approval of the Directors, all of whom are independent of Foresight.

Potential disposal of investments

Whilst the Directors may elect to retain investment interests in the portfolio of investments that the Fund acquires and any other further investments made by the Fund over the long term, the Investment Adviser will regularly monitor the valuations of such investments and any secondary market opportunities to dispose of investment interests and report to the Directors accordingly. The Directors only intend to dispose of investments where they consider that appropriate value can be realised for the Fund or where they otherwise believe that it is appropriate to do so. Proceeds from the disposal of investment interests may be reinvested or distributed at the discretion of the Directors.

STAKEHOLDER ENGAGEMENT

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

Whilst directly applicable to companies incorporated in the UK, the Board recognises the intention of the AIC Code that matters set out in Section 172 of the Companies Act 2006 are reported. The Board strives to understand the views of the Company's key stakeholders and to take these into consideration as part of its discussions and decision--making process.

As an investment company, the Company does not have any employees and conducts its core activities through third-party service providers. Each 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 Company strongly believes that fostering healthy and constructive relationships with its broad range of stakeholders should result in increased shareholder value over the long term.

The following table sets out how the Company has communicated and engaged with its key stakeholder groups over the last year, highlighting key strategic decisions taken which have had direct impact on these groups.

JLEN recognises that community engagement at our sites is an ongoing dialogue and that at times problems can arise before we can address them; however, it is our stated objective to develop positive relationships with the communities in which we work. We are working at improving our communications, complaints handling processes and access to relevant information for local residents, and these goals have formed part of our ESG KPIs.

Opposition to AGM resolution

As reported in our 2020 interim report, at the Company's AGM on 3 September 2020 opposition was received to the enlarged general authority for the Board to issue shares representing an additional 10% of the Company's issued share capital on a non-pre-emptive basis (over and above the 10% issuance which was approved by shareholders at the AGM).

Representatives of the Company meet regularly with key shareholders as part of the Company's ongoing engagement programme and during the discussions held since the date of the 2020 AGM no concerns have been raised regarding the proposal to increase the limit to the issuance authority, or to the Company's practices to date when issuing new shares without pre-emption.

The Board believes that the benefits of permitting conditional share issuances by investment companies without pre-emption are considered to be well understood by shareholders as it enhances the Board's ability for effective capital management as the proceeds are used to repay amounts drawn on the revolving credit facility, a low-cost form of capital and avoiding the detrimental performance impact from holding excess cash, prior to re-drawing on the facility for deployment into the Company's business development pipeline.

It is understood that the substantial portion of the votes received against the resolution were cast by investors subscribing to the guidance of proxy voting agencies who followed rigid internal guidelines when issuing recommendations to their clients and that the result of this resolution is not directly relevant to the activities of the Company itself. Accordingly, no further action was taken in this regard.

Stakeholder engagement and Covid-19

The pandemic and subsequent lockdowns have impacted the way that we live and work. Meetings which would usually take place face-to-face have been moved to an almost entirely virtual model. During the period, the Investment Adviser hosted a Capital Markets Day and presented the full-year 2020 results and half-year 2020/21 results via well attended virtual meetings in a webinar format. Subsequent roadshows associated with the results and a fundraise roadshow were also hosted virtually. A telephone facility was provided for the Company AGM in September 2020.

One of our operators on an AD site also hosted a series of meetings for the parish councils local to the plant in an online format with sessions for questions and answers from local residents.

Where virtual engagement has not been possible - for example when operators and workers need to access sites in the portfolio to perform necessary works - this has been conducted in line with government advice, adhering to Covid-19 safe guidelines. While not an ideal scenario, the stakeholder engagement practices of the Company have not been unduly negatively affected by the pandemic.

Engagement with the community near AD plant

One of JLEN's operating partners has responded to concerns raised by local councils and residents close to one of the AD sites regarding the impact of harvest traffic to the site. One of the Company's ESG objectives is to develop positive relationships with the communities in which it works and so it is in support of the site's management exploring reasonable operational adjustments to address these concerns.

Response

The operator of the plant arranged a series of open (virtual) meetings so local stakeholders could communicate their concerns directly with the site and farming team. The meetings also provided an opportunity for the farming team to provide information as to how the facility operates and to put forward practical options to address the concerns raised.

Outcome

Work towards fostering improved relationships within the community is ongoing. To date, changes to farming operations are being implemented for the upcoming harvest season and, if successful in alleviating the concerns of the community, will be adopted on a long-term basis. Channels of communication have been put in place, with an emphasis on engagement around the harvest time activities of the plant. The site team is also easier to contact and lessons learned have been implemented at further sites in the portfolio.

 
Shareholders 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                      How has JLEN communicated                                      Key strategic decisions 
Providers of      *    Institutional shareholders                      and engaged?                                                   impacting stakeholder 
equity finance                                                          *    Annual general meeting                                   group during period 
and recipients                                                                                                                         *    Declared an increased dividend target of 6.80 pence 
of income         *    Retail shareholders                                                                                                  in line with investment objective, continuing to 
distributions.                                                          *    Regular market announcements                                   position JLEN as an attractive proposition for 
                                                                                                                                            investors seeking income 
                  *    Proxy voting organisations 
                                                                        *    Investor communications including quarterly 
                                                                             factsheets                                                *    Made six portfolio acquisitions which further 
                                                                                                                                            diversified the portfolio and should prove accretive 
                                                                                                                                            to NAV in the long term 
                                                                        *    Dedicated JLEN website 
 
                                                                                                                                       *    Development of the roadmap for orderly succession to 
                                                                        *    Investor roadshows hosted via video conference                 underline the commitment of the Board to broadening 
                                                                                                                                            its diversity 
 
                                                                        *    Annual and interim reports 
                                                                                                                                       *    Change to the Company's investment policy to allow 
                                                                                                                                            the Company to access a wider pool of environmental 
                                                                        *    Market events and conferences - hosted a JLEN Capital          infrastructure investments 
                                                                             Markets Day 
 
 
                                                                        *    Views and feedback sought from institutional 
                                                                             shareholders via corporate broker 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Investment 
Adviser 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                          How has JLEN communicated                                  Key strategic decisions 
Key               *    Foresight Group                                    and engaged?                                               impacting stakeholder 
counterparty                                                               *    Regular Board meetings in Guernsey via video         group during period 
responsible                                                                     conference during the period attended by key          *    Determination that the Investment Adviser maintains a 
for delivering    *    Foresight Group employees                                investment personnel                                       robust internal control environment, and that the 
the Board's                                                                                                                                continued appointment of the Investment Adviser is in 
strategy.                                                                                                                                  the best interests of shareholders as a whole 
                                                                           *    Meetings to discuss and approve investment 
                                                                                recommendations 
                                                                                                                                      *    Proposing changes to the investment policy to enable 
                                                                                                                                           the Company to access a wider pool of environmental 
                                                                           *    Comprehensive assessment of the contractual                infrastructure investments, both by sub-sector and 
                                                                                relationship with the Investment Adviser and their         geography 
                                                                                performance 
 
 
                                                                           *    Consulting on the scope of the independent controls 
                                                                                effectiveness report received by the Investment 
                                                                                Adviser 
 
 
                                                                           *    Monitoring and assessing JLEN's strategic position 
                                                                                against the growing environmental infrastructure 
                                                                                market and the expected future development of the 
                                                                                market 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Commercial service providers 
-----------------------------------------------------------------------------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                      How has JLEN communicated                                      Key strategic decisions 
Providers of      *    Administration agent                            and engaged?                                                  impacting stakeholder 
essential                                                               *    Regular scheduled update calls as well as specific      group during period 
business                                                                     interactions on corporate actions and new portfolio      *    Key service providers retained, providing continuity 
support           *    Corporate broker                                      acquisitions                                                  of service and familiarity with the objectives of the 
services.                                                                                                                                  Company 
 
                  *    Legal advisers                                   *    Collaboration with multiple service providers in 
                                                                             publication of annual and interim reports 
 
                  *    Public relations agency 
                                                                        *    Annual service provider questionnaire 
 
                  *    Auditor and tax advisers 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Asset-level counterparties 
-----------------------------------------------------------------------------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                      How has JLEN communicated                                      Key strategic decisions 
Asset-level      *    Operations & Maintenance ("O&M") contractors     and engaged?                                                  impacting stakeholder 
technical and                                                           *    Regular update calls with O&M and MSA providers to      group during period 
operational                                                                  ensure adequate oversight of portfolio operations        *    Consolidation of insurance services at SPV level 
management       *    External management services ("MSA") providers                                                                       across parts of the portfolio 
service 
providers.                                                              *    Focused engagement on value enhancement opportunities, 
                 *    Supply chain counterparties                            including rationalisation of service provision for       *    Acquired six new assets during the period, increasing 
                                                                             cost savings and/or improved services                         ongoing servicing requirements from O&M 
                                                                                                                                           counterparties 
                 *    Landowners 
                                                                        *    Increased scrutiny of, and resource allocation to, 
                                                                             emerging risks identified                                *    Entered a number of new technology types over the 
                                                                                                                                           period, including standalone battery storage and low 
                                                                                                                                           carbon transport 
 
 
                                                                                                                                      *    Successful further upgrade of capacity at Vulcan AD 
                                                                                                                                           site resulted in increased revenue for partners 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Local 
communities 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                      How has JLEN communicated                                      Key strategic decisions 
Members of        *    Local authorities and agencies                  and engaged?                                                   impacting stakeholder 
society                                                                 *    Frequent engagement with local authorities to ensure     group during period 
living within                                                                safe and compliant operation of our assets                *    JLEN donated over GBP380k to local community funds 
a proximity       *    Community funds                                                                                                      over the period, helping to address local needs and 
of assets                                                                                                                                   promote long-term sustainable and prosperous 
where                                                                   *    Actively engage with local authorities on                      communities 
the Company's     *    Landowners                                            construction planning and obtaining necessary 
operations may                                                               planning permissions 
have an                                                                                                                                *    Implemented a programme of engagement with a local 
impact,           *    Local environment                                                                                                    community, in response to concerns raised by local 
whether                                                                 *    Regular interaction between the owners of land on              residents near to one of our sites 
positive                                                                     which our assets operate and the Investment Adviser's 
or negative.      *    Local residents                                       asset management team 
 
 
                                                                        *    Conduct educational site visits for local community 
                                                                             schools and colleges 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Debt providers 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Rationale       Key stakeholders                                      How has JLEN communicated                                      Key strategic decisions 
Providers of      *    Banks                                           and engaged?                                                  impacting stakeholder 
long-term debt                                                          *    Regular updates provided on covenant compliance and     group during period 
to finance the                                                               current positioning                                      *    Debt remained a key component of funding strategy 
acquisition                                                                                                                                during the period and the portfolio has utilised debt 
of investment                                                                                                                              facilities throughout 
opportunities. 
 
                                                                                                                                      *    New debt facilities were arranged post the period end 
                                                                                                                                           that included an element of sustainability linkage 
--------------  ----------------------------------------------------  -------------------------------------------------------------  ----------------------------------------------------------- 
 

RISKS AND RISK MANAGEMENT

JLEN has a comprehensive risk management framework overseen by the Risk Committee, comprising independent non--executive Directors.

Risk is the potential for events to occur that may result in damage, liability or loss. Such occurrences could adversely impact the Company's business model, reputation or financial standing. Alternatively, under a well--formed risk management framework, potential risks can be identified in advance and can either be mitigated or possibly even converted into opportunities.

Pages 36 to 48 of the Annual Report 2021 detail the potential risks that the Directors consider are material which could occur in an environmental infrastructure project and in particular those in relation to renewable energy generation and PPP/PFI projects.

Given that the Company delegates certain activities to the Investment Adviser and Administrator, reliance is also placed on the controls of the Group's service providers.

In the normal course of business, each project will have developed a rigorous risk management framework including a comprehensive risk register that is reviewed and updated regularly and approved by its Board. The purpose of JLEN's risk management policies and procedures is not to eliminate risk completely, as this is neither possible nor commercially viable. Rather, it is to reduce the likelihood of occurrence and to ensure that JLEN is adequately prepared to deal with risks so as to minimise their impact should they materialise.

Risk identification and monitoring

JLEN has a separate Risk Committee, comprising three non--executive Directors, which is responsible for overseeing and advising the Board on the current and potential risk exposures of the Fund, with particular focus on the Group's principal risks, being those with the greatest potential to influence shareholders' economic decisions, and the controls in place to mitigate those risks.

The identification, assessment and management of risk are integral aspects of the Investment Adviser's and Administrator's work in both managing the existing portfolio on a day--to--day basis and pursuing new investment opportunities (though the Board has ultimate responsibility for the risk management activities of the Group).

The Investment Adviser and Administrator have established internal controls to manage these risks and they review and consider the Group's key risks with the Risk Committee on a quarterly basis, including new risks arising and/or changes in the likelihood of any particular risk occurring. In the case of unusual and significant risks such as Covid-19, assessment occurs outside of the quarterly cycle. These systems of internal control were in place for the year under review and continue to be in operation.

The Board's investment advisory engagement committee reviews the performance of the Investment Adviser and Administrator, as well as other key service providers, annually.

JLEN has a comprehensive risk management framework and risk register that assesses: a) the probability of each identified risk materialising; and b) the impact it may have on JLEN.

Mitigation actions have been developed with respect to each risk so as first to reduce the likelihood of such risk occurring and secondly to minimise the severity of its impact in the case that it does occur.

The risk register is a "live" document that is reviewed and updated regularly by the Risk Committee as new risks emerge and existing risks change. The principal risks faced by the Group are formally reviewed by the Risk Committee at each quarterly meeting and a report from the Committee is presented to the Board for consideration and approval. Each of the underlying projects is overseen by an experienced general or contracts manager who reports to their individual project board. The general and contract managers maintain strong relationships between clients, sub--contractors and other stakeholders. This ensures effective management of potential risks.

Covid-19 - Power prices

With the start of the first Covid-19 lockdown in March 2020, the Company has had over a year of operating against the backdrop of the pandemic and with a changing set of restrictions applying to society as a whole. During the first part of the year under review, the most serious financial consequence of the pandemic was the reduction in demand for electricity and gas brought about by reduced economic activity, leading to significantly lower power prices received by the Company's renewable generation projects.

While power prices have rebounded strongly since the lows of spring 2020, there remains a risk that economic recovery from the pandemic is muted and power prices do not remain at their current attractive levels. Beyond Covid-19, the long--term build-out of renewable energy infrastructure may change the balance between supply and demand in energy markets, which may result in low power prices at times of high generation due, for example, to favourable wind conditions or solar irradiation.

Covid-19 - Other risks

The longer-term macro risks associated with Covid-19 are not yet clear but could include measures such as higher taxes and/or higher inflation to deal with increased government borrowing incurred to counter the pandemic. In the UK, legislation to increase the rate of corporation tax from 19% to 25% in 2023 is in the process of being passed. This change has been factored into the portfolio valuation and removes a large part of the risk. However, corporation tax is not the only means of raising public revenues and other tax-raising initiatives by the government that may impact the Company cannot be ruled out.

The portfolio has thus far proved to be relatively unaffected by Covid-19 operationally, with the large majority of sites experiencing no or only temporary interruptions to normal operating conditions. The Bio Collectors food waste business has been the most materially impacted asset in the portfolio with a reduction in food waste from catering and hospitality sources, although the latest business plan anticipates a recovery over the coming months. Beyond this, risks remain that supply chains will be affected by the longer-term fallout from the pandemic, although as time passes and the virus recedes in the UK, these risks reduce.

Political risk - Brexit

On 31 December 2020, the transition period for the UK to leave the European Union ended and the UK formally became "a third country" from the perspective of the EU and its rules and regulations. While the UK has ceased to be subject to EU regulation and to have the same degree of market access, no immediate material consequences have been felt within the Company's portfolio. The UK Government remains committed to UK infrastructure development and whilst the UK Government may not in future be bound by EU-set renewable obligations, the UK is still bound by national and international renewable obligations, including the commitment to "net zero" carbon emissions by 2050.

While Brexit is a short-term to medium--term risk that must be considered, more than 98% of the portfolio by value is located in the UK, and should not be directly affected by the transition. The Investment Adviser continues to monitor possible disruptions to European supply chains, although at this stage it is hard to distinguish between disruption that has Brexit as its root cause or Covid-19. There is some emerging anecdotal evidence that Brexit may be contributing to a shortage of appropriately skilled personnel, but this is more an issue for service providers to the portfolio than the Company itself.

Climate risk and Task Force on Climate --related Financial Disclosures ("TCFD") reporting

In December 2020, the FCA published a policy statement confirming a new rule for companies with a UK premium listing requiring them to make disclosures consistent with the recommendations of the TCFD in their annual reports or to explain why they have not done so. The rule comes into force for those with accounting periods starting after 1 January 2021. While the Company is a closed-ended investment company and therefore not in scope of this regulation, the Company intends to provide full climate-related disclosures in its Annual Report published in June 2022. The Company's Investment Adviser is working towards reporting climate risk and considerations that will satisfy the TCFD requirements, and partial disclosure is included in the Annual Report 2021, together with a roadmap of the activities that are being undertaken to prepare for full adoption.

As a long-term investor, JLEN is able to manage risk with a long-term perspective. This means it can take long-term views on climate risk in its portfolio. With altering weather patterns brought on by climate change, resource availability and security of the assets is a key area of focus for the Fund. The diversification of the technologies that the Fund invests in means that the Fund is not wholly reliant on any one weather resource, which spreads the climate risk across the portfolio and helps to mitigate unpredictable weather patterns in both the short and long term.

TCFD and climate analysis

The below consideration of the four fundamental pillars of the TCFD reporting framework reflects JLEN's progress towards full TCFD reporting and the full roadmap to TCFD disclosure can be seen overleaf.

Aligning with the recommendations of the Task Force on Climate-related Financial Disclosures

In considering the TCFD recommendations, JLEN is largely driven by organisation-level strategic approaches taken by Foresight. It is important, however, to consider how those approaches apply at the Fund level. JLEN's approach can be summarised as follows:

1: Governance

Board

JLEN has a comprehensive risk management framework overseen by the Risk Committee, comprising independent non-executive Directors, which is responsible for overseeing and advising the Board on the current and potential risk exposures of the Fund, with particular focus on the Group's principal risks, being those with the greatest potential to influence shareholders' economic decisions, and the controls in place to mitigate those risks; including climate risk.

The Risk Committee meets on a quarterly basis and the duties of the Risk Committee include the identification, measurement, management and monitoring appropriately and regularly of all risks relevant to the Company's investment strategy and to which the Company is, or may be, exposed.

It is the responsibility of the Risk Committee to advise the Board on the overall risk appetite, tolerance and strategy of the Company, and to oversee the Company's current risk exposures and the controls in place to mitigate those risks, including climate risk.

While the underlying JLEN portfolio of environmental infrastructure assets is not immune to the effects of climate change, the Company's purpose and investment policy are aligned to reducing further climate change.

Investment Adviser

The identification, assessment and management of risk are integral aspects of the Investment Adviser's and Administrator's work in both managing the existing portfolio on a day-to-day basis and pursuing new investment opportunities (though the Board has ultimate responsibility for the risk management activities of the Group). The Investment Adviser and Administrator have established internal controls to manage risks and they review and consider the Group's key risks, with the Risk Committee, on a quarterly basis, including climate risks, new risks arising and/or changes in the likelihood of any particular risk occurring.

At an investment level, the consideration of the sustainability credentials of environmental infrastructure opportunities and their physical resilience to climate-related risks is undertaken in accordance with a set of sector-specific assessment parameters underlying the five key areas of Foresight's proprietary Sustainability Evaluation Criteria Further details of Foresight's approach to sustainability and how this is carried through practically to assessing climate-related risks and opportunities is set out on its website.

2: Strategy

The Company's strategic focus is on environmental infrastructure. This is intrinsically linked to matters of climate change; the recently updated investment policy refers to environmental infrastructure being those assets which "support the transition to a low carbon economy or which mitigate the effects of climate change".

The Board and the Investment Adviser are of the view that the imperative to take steps to mitigate climate change felt by governments and societies around the world has provided and will continue to provide a rich environment for investment for the Company. In recent times the focus has been primarily on the adoption of renewable energy technologies such as wind and solar as governments seek to decarbonise their power sectors. The near future is likely to feature more investment opportunities prompted by the need to address other major carbon-emitting sectors of the economy such as transport, agriculture and manufacturing and construction. Longer term, opportunities will depend in part upon the path that the world finds itself on in terms of the extent of global warming and the nature of the technical solutions required to cope with that path.

In the short term, the immediate effects of climate change on the asset portfolio are well understood. Monthly variability in weather resources and the associated seasonality in production expected in a portfolio of intermittent renewables projects are reduced by the overall technology diversification in JLEN's portfolio. Although agricultural AD plants have some indirect exposure to weather patterns through the yield of harvests (feedstock), it is very unlikely to impact on their gas volumes. The environmental processing assets, apart from Tay, have revenues independent of weather and all have revenues that vary little with changes in volume of waste and wastewater processed. The Company now separates the sensitivities illustrating the effect of different levels of wind and solar resource on the portfolio valuation as there is no indication that these weather resources are correlated.

Longer term, the risks to the asset portfolio derive from climatic conditions changing significantly and permanently from those assessed at the time of acquiring an asset, making the original expectations of the performance of that asset invalid. Such changes may not always be negative; hotter, drier conditions in the UK may be detrimental to wastewater and hydro plants for example, but are generally beneficial for solar plants. JLEN's strategy of portfolio diversification gives some protection against such long-term changes.

3: Risk management

JLEN has a comprehensive risk management framework and risk register that assesses:

   --     the probability of each identified risk materialising; and 

-- the impact it may have on JLEN. Mitigation actions have been developed with respect to each risk so as first to reduce the likelihood of such risk occurring and secondly to minimise the severity of its impact in the case that it does occur.

By the very nature of environmental infrastructure projects, their financial performance is dependent on the volume of resource available, be it solar irradiation, wind, feedstock yields, waste or water. These are factors outside the control of JLEN or the projects themselves, with the risk of a significant effect on performance if the outcome is significantly different from the assumptions made in forecasting revenue and costs and hence returns to JLEN.

-- For renewable energy projects there is a degree of protection from this variability in weather resource from portfolio diversification, as solar is more productive in the summer and wind more productive in the winter, with the absolute level of resource being weakly negatively correlated.

-- In addition, the waste & wastewater projects benefit from "banded" volumetric payment arrangements that mean the projects are relatively insensitive to falling volumes. The projects also benefit from contractual exclusivity over the available waste or water stream and, in the case of the waste projects, minimum guaranteed volumes, further mitigating this risk.

-- On all projects, technical consultants are employed to advise on the assumptions which should be made regarding volume and its impact on performance for each individual asset.

-- For anaerobic digestion sites, it is common to agree feedstock contracts that adjust for the dry matter content in the biomaterial and relate pricing to that energy content and volume which is delivered. Should a shortfall be likely, for instance due to a poor harvest, substitute feedstocks are widely available.

4: Metrics and targets

JLEN will disclose scope 1, 2 and, if appropriate, scope 3 emissions in line with the timetable for adopting TCFD for the Annual Report 2022.

JLEN also records a range of other metrics that help to develop an understanding of the direct and indirect environmental characteristics of the portfolio. These include waste diverted from landfill, wastewater treated, fertiliser produced and green energy generated by the portfolio. More information can be found in the Sustainability and ESG section of the Annual Report 2021.

The portfolio also generates a substantial amount of green energy through its wind, solar, AD and hydro facilities.

Our roadmap to full disclosure in 2021/22

Ongoing progress

Governance

Increased oversight of the JLEN Risk Committee on climate-related risks.

Strategy and metrics

JLEN relies on the Investment Adviser, and Foresight are in the process of developing their approach to climate analysis. Foresight have been developing their in-house capabilities and are in the process of appointing a consultant to assist with TCFD reporting requirements.

2021/22

Governance

Ongoing monitoring by the JLEN Risk Committee.

Strategy and metrics

Over the coming year, Foresight will continue to develop their in-house approach to climate analysis. JLEN aims to make a full TCFD disclosure in their 2021/22 Annual Report.

JLEN's risk register covers five main areas of risk:

   --     Strategic, economic and political 
   --     Operational, business, processes and resourcing 
   --     Financial and taxation 
   --     Compliance and legal 
   --     Asset specific 

Each of these areas, together with the principal risks within that category, are summarised in the table overleaf, followed by a detailed discussion of the mitigating factors.

 
Strategic, economic and political 
------------------------------------------------------------------------------------------------------------------------------------------ 
Risk             Potential impact                                              Mitigation 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
1 Inflation and 
interest           *    The underlying assets in the portfolio, and therefore   *    Returns from the assets in the portfolio are highly 
rates                   the returns expected from them, have some exposure to        correlated with inflation due to revenues from PFI 
Link to Fund            inflation.                                                   assets, green benefits for renewable energy assets 
objectives                                                                           and most operational costs being directly linked to 
Predictable                                                                          an inflation index. This results in a "natural hedge" 
income             *    The Company has some interest rate exposure, through   , 
growth for              its own cash deposits and bank funding (UK HoldCo            removing the need for the use of derivatives to 
shareholders            revolving credit facility) and deposits and funding          mitigate inflation risk. 
Change in year          within the projects themselves. 
No change 
                                                                                *    Through the use of interest rate swaps and fixed rate 
                   *    While the Covid-19 pandemic reduced demand for goods         loans, finance costs are fixed at the time of the 
                        and services in the economy in the short term with a         contract being signed, substantially reducing 
                        deflationary effect, financial markets are currently         interest rate risk. 
                        more concerned about the prospects of high inflation 
                        in the aftermath of the pandemic. 
                                                                                *    The revolving credit facility has a floating interest 
                                                                                     charge over SONIA but this is mitigated as the 
                                                                                     facility provides short-term finance prior to being 
                                                                                     repaid with capital raise proceeds. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
2 Acquisitions 
and                *    JLEN's intention is to grow the portfolio through the   *    JLEN continually receives and seeks opportunities 
pipeline                acquisition of further environmental infrastructure          from the wider secondary market and developers, both 
Link to Fund            projects. However, there is a risk that a pipeline of        in the UK and overseas. JLEN benefits from 
objectives              acquisitions does not materialise                            Foresight's well-established pipeline of renewable 
Investment,                                                                          infrastructure assets and presence within the market. 
growth 
and                *    There is a risk that due diligence carried out on 
diversification         acquisition targets is insufficient and does not        *    JLEN's broad environmental infrastructure mandate 
Change in year          reveal all the facts that are relevant to the                captures a wider range of potential investments. 
No change               acquisition, leading to JLEN overpaying.                     JLEN's investment policy was updated during the year 
                                                                                     to emphasise that its investment focus reached beyond 
                                                                                     renewable energy to include assets that support the 
                                                                                     transition to a low carbon economy or which mitigate 
                                                                                     the effects of climate change. 
 
 
                                                                                *    The Investment Adviser commissions a suite of due 
                                                                                     diligence from suitable consultants that are experts 
                                                                                     in their fields for every acquisition. The Investment 
                                                                                     Adviser has significant experience of environmental 
                                                                                     infrastructure assets and the risk areas to address 
                                                                                     through due diligence. In the event that a consultant 
                                                                                     fails to identify a risk item within their scope, 
                                                                                     JLEN can seek to recover any loss it has suffered up 
                                                                                     to the consultant's liability cap. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
3 Funding of 
acquisitions       *    There is a risk that JLEN is unable to achieve its       *    JLEN entered into a new three--year GBP170 million 
and future              stated ambition of growing the portfolio by acquiring         revolving credit facility with a further GBP30 
equity                  new assets due to a lack of funding, both from                million uncommitted accordion post the year end, 
fundraising             corporate debt and equity capital from investors.             providing flexible short--term finance to pursue 
Link to Fund                                                                          acquisitions. This is used to finance acquisitions 
objectives                                                                            prior to raising capital, mitigating the risk of 
Investment,                                                                           inadequate funding affecting growth. 
growth 
and 
diversification                                                                  *    Investors have been supportive of the infrastructure 
Change in year                                                                        class in general. A number of economic factors, 
Decreased                                                                             including weak power prices and the consequences of 
                                                                                      the Covid-19 pandemic, could reduce investors' 
                                                                                      appetite in future equity fundraising, although 
                                                                                      environmental infrastructure offers a partial 
                                                                                      inflation hedge which is a desirable characteristic 
                                                                                      in the post-Covid-19 world. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
4 Competition 
Link to Fund      *    JLEN, in pursuing investment opportunities and in         *    JLEN differentiates itself from its peer group in a 
objectives             seeking to raise further capital, competes against a           number of ways, including its investment policy of 
Investment,            number of other listed and private infrastructure              investing in a diversified range of environmental 
growth                 funds. There is a risk that such competition could             infrastructure technologies and revenue streams and 
and                    limit growth of the Company                                    its aim to only raise capital against committed 
diversification                                                                       investments. JLEN updated its investment policy to 
Change in year                                                                        emphasise this diversification and has made 
Decreased         *    Competition is strong for infrastructure assets that           investments into non-generation assets during the 
                       have demonstrated resilience to the Covid-19 pandemic,         year, including battery storage and low carbon 
                       such as wind and solar assets with high levels of              transport. 
                       contracted or subsidised revenues. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
5 Future of UK 
capital            *    Under its investment policy, JLEN is required to hold   *    The UK Government's adoption of a legally binding 
spending                at least 50% of its portfolio by value in UK assets.         commitment to "net zero" carbon emissions by 2050 
Link to Fund            JLEN therefore has a significant interest in the             underpins its support for environmental 
objectives              future of UK infrastructure spending. Government             infrastructure. The recovery from the Covid-19 
Investment,             financial support for new renewable energy and               pandemic and the sectors that government will 
growth                  environmental processing assets has reduced                  prioritise is currently uncertain, but prospects for 
and                     significantly in recent years and there is a risk            environmental infrastructure appear positive. 
diversification         that spending is either reduced or stopped altogether 
Change in year          or that the model used to procure environmental 
Decreased               infrastructure and/or renewable energy projects         *    In addition, JLEN has the ability to mitigate the 
                        carries a risk profile that would not allow JLEN to          impact of a slowdown in UK deal flow through overseas 
                        invest under its investment policy.                          acquisitions in order to diversify the portfolio and 
                                                                                     reduce its reliance on the UK for investment 
                                                                                     opportunities. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
6 Brexit and 
Scottish           *    On 31 December 2020, the limited transition period      *    At this stage it is not clear what the precise impact 
independence            ended for the UK to become "a third country"                 on the UK environmental infrastructure industry will 
Link to Fund            following its decision to leave the European Union.          be once the UK ceases to be subject to EU regulation 
objectives              The UK is no longer bound by EU rules and no longer          and to have market access. The mitigation measures 
Investment,             has unfettered access to UK markets. The precise             for the principal macroeconomic risks are those 
growth                  model that the relationship between the UK and the EU        described above in relation to inflation and interest 
and                     will follow in the future is not certain.                    rates. Given the current level of investment in 
diversification                                                                      non-UK assets, JLEN has a non-significant exposure to 
Change in year                                                                       changes in exchange rates. And whilst the UK 
Decreased          *    Thus far, JLEN has suffered no material effects from         Government may not in future be bound by EU-set 
                        the UK leaving the European Union. While the details         renewable obligations, the UK is still bound by 
                        of future trade arrangements are negotiated between          national and international renewable obligations, 
                        the UK Government and the rest of the EU, general            including the commitment to "net zero" carbon 
                        risks associated with market disruption remain,              emissions by 2050. As such, JLEN believes that a low 
                        including volatility in macroeconomic indicators such        carbon and renewable energy generation agenda will 
                        as inflation and interest rates and changes in               remain a key part of UK policy. 
                        regulations. 
 
                                                                                *    Regarding a Scottish referendum, JLEN will continue 
                   *    In Scotland, the Scottish National Party continue to         to monitor the situation as it develops and will 
                        press for a second independence referendum in the            identify potential risks when the likely course of 
                        wake of leaving the EU, buoyed by a strong showing in        events becomes clearer and it is possible to assess 
                        recent elections. Scottish independence might impact         their nature and extent. 
                        its renewable market and its currency, should it 
                        leave its current sterling currency. This may affect 
                        JLEN's Scottish interests in wind, AD, battery 
                        storage and wastewater treatment. 
---------------  ------------------------------------------------------------  ----------------------------------------------------------- 
 
   --     -- 

-- -- -- -- -- --

 
Operational, business, processes and resourcing 
----------------------------------------------------------------------------  ----------------------------------------------------------- 
Risk             Potential impact                                             Mitigation 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
7 Volume of 
resource          *    By the very nature of environmental infrastructure      *    For renewable energy projects there is a degree of 
Link to Fund           projects, their financial performance is dependent on        protection from this variability in weather resource 
objectives             the volume of resource available, be it solar                from portfolio diversification, as solar is more 
Predictable            irradiation, wind, feedstock yields, waste or water.         productive in the summer and wind more productive in 
income                 These are factors outside the control of JLEN or the         the winter, with the absolute level of resource being 
growth for             projects themselves, with the risk of a significant          weakly negatively correlated. 
shareholders           effect on performance if the outcome is significantly 
Preservation of        different from the assumptions made in forecasting 
capital                revenue and costs and hence returns to JLEN.            *    In addition, the waste & wastewater projects benefit 
over the long                                                                       from "banded" volumetric payment arrangements that 
term                                                                                mean the projects are relatively insensitive to 
Change in year                                                                      falling volumes. The projects also benefit from 
No change                                                                           contractual exclusivity over the available waste or 
                                                                                    water stream and, in the case of the waste projects, 
                                                                                    minimum guaranteed volumes, further mitigating this 
                                                                                    risk. 
 
 
                                                                               *    On all projects, technical consultants are employed 
                                                                                    to advise on the assumptions which should be made 
                                                                                    regarding volume and its impact on performance for 
                                                                                    each individual asset. Risks in this area diminish 
                                                                                    over time as operational track record provides a 
                                                                                    stronger base for forecasts than consultants' 
                                                                                    estimates. 
 
 
                                                                               *    For anaerobic digestion sites, it is common to agree 
                                                                                    feedstock contracts that adjust for the dry matter 
                                                                                    content in the biomaterial and relate pricing to that 
                                                                                    energy content and volume which is delivered. Should 
                                                                                    a shortfall be likely, for instance due to a poor 
                                                                                    harvest, substitute feedstocks are widely available. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
8 Power prices 
Link to Fund      *    The revenues of the renewable energy solar, anaerobic   *    The risk of exposure to variations in electricity and 
objectives             digestion, wind and hydro assets are dependent to            gas prices from assumptions made is mitigated by JLEN 
Predictable            some extent on the market price of electricity and           in the following ways: i) short-term PPAs are used to 
income                 natural gas, which is out of the control of JLEN.            fix electricity and gas prices for between one and 
growth for             There is a risk that the actual prices received vary         three years depending on market conditions and many 
shareholders           significantly from the model assumptions, leading to         have floor prices; ii) forward prices based on market 
Preservation of        a shortfall in anticipated revenues to JLEN.                 rates are used for the first two years where no fix 
capital                                                                             is in place; and iii) quarterly reports from 
over the long                                                                       independent established market consultants are used 
term                                                                                to inform the electricity prices over the longer term 
Change in year                                                                      used in the financial models. JLEN blends forecasts 
No change                                                                           from three consultants to reduce volatility in 
                                                                                    assumed prices from period to period. 
 
 
                                                                               *    JLEN invests in a diversified portfolio of 
                                                                                    environmental infrastructure assets that earn 
                                                                                    revenues that do not depend on merchant power sales. 
                                                                                    At the year end, 73% of the portfolio's underlying 
                                                                                    revenues were not related to merchant sales. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
9 Reliance on 
Investment         *    The Company is heavily reliant on the Investment       *    Foresight is a leading listed infrastructure fund 
Adviser                 Adviser to identify, acquire and manage JLEN's              manager, with considerable depth of resource and 
Link to Fund            investments. A performance deterioration by the             experience in environmental infrastructure from 
objectives              Investment Adviser could have an impact on the              managing over 200 assets in sectors including wind, 
Preservation of         Company's performance and there is a risk that the          solar, bioenergy and flexible generation. During the 
capital                 Company may not be able to find an appropriate              year, Foresight listed on the London Stock Exchange, 
over the long           replacement Investment Adviser should the engagement        raising its profile and providing access to liquidity 
term                    with the Investment Adviser be terminated.                  to fund further growth. Ultimately, in the event of 
Investment,                                                                         ongoing under-performance by the Investment Adviser, 
growth                                                                              JLEN has the ability to serve notice and to engage a 
and                                                                                 replacement 
diversification 
Change in year 
No change 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
10 Cyber risk 
Link to Fund      *    There exists a threat of cyber--attack in which a        *    JLEN has no dedicated IT systems and it relies on 
objectives             hacker or computer virus may attempt to access the IT         those of its service providers, principally the 
Predictable            systems of the Group, the Investment Adviser, the             Investment Adviser and Administrator, which have 
income                 Administrator or one of the project companies and             procedures in place to mitigate cyber-attacks and 
growth for             attempt to destroy or use the data for malicious              have robust business continuity plans in place. 
shareholders           purposes. While JLEN considers that it is unlikely to 
Change in year         be the deliberate target of a cyber-attack, there is 
No change              the possibility that it could be targeted as part of 
                       a random or general act. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
11 ESG - 
Reputational       *    JLEN aims to conduct its business in accordance with   *    JLEN has stated its ESG objectives publicly and has 
Link to Fund            environmental, social and governance ("ESG")                developed further metrics to try to measure objective 
objectives              principles. There is a risk that, notwithstanding           performance towards these objectives. 
Predictable             these aims, JLEN is found to fall short of these 
income                  principles and suffers reputational damage, leading 
growth for              to investors avoiding the Company's shares.            *    JLEN and its Investment Adviser engage with a wide 
shareholders                                                                        range of organisations to keep abreast of best 
Preservation of                                                                     practice in this area. The Investment Adviser is a 
capital            *    The ESG landscape is changing rapidly, prompted by          signatory to the United Nations-backed Principles for 
over the long           increased awareness at all levels of society of the         Responsible Investment and has incorporated ESG 
term                    climate crisis and an expectation that businesses           assessments into its investment processes that also 
Investment,             complement the communities they sit alongside. There        help to assess investments' compatibility with JLEN's 
growth                  is a risk that past behaviour is judged to be               ESG objectives. 
and                     unacceptable against current standards. 
diversification 
Change in year 
Increased 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
 
Financial and 
taxation 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
Risk             Potential impact                                             Mitigation 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
12 Portfolio 
valuation         *    The discount rates used in the valuation exercise       *    The discount rates are reviewed on a regular basis 
Link to Fund           represent the Investment Adviser's and the Board's           and updated, where appropriate, to reflect changes in 
objectives             assessment of the rate of return in the market for           the market and in the project risk characteristics. 
Preservation of        assets with similar characteristics and risk profile. 
capital                Increased underlying gilt rates may lead to increased 
over the long          discount rates being applied by the market and a        *    Recent market transactions have supported the view 
term                   consequential decrease in the portfolio value.               that attractive infrastructure assets remain in high 
Change in year                                                                      demand with institutional investors. 
Decreased 
                  *    Asset values may not run in parallel to evolving 
                       forecasts for future electricity and gas prices and     *    To provide additional assurance to both the Board and 
                       investors should expect some variation in asset              JLEN's shareholders with respect to the valuation, an 
                       valuation from period to period, as and when a               independent verification exercise of the methodology 
                       material movement from prior expectations is                 and assumptions applied by Foresight is performed by 
                       identified.                                                  a leading accountancy firm and an opinion provided to 
                                                                                    the Directors on a semi-annual basis. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
 
Compliance and 
legal 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
Risk             Potential impact                                             Mitigation 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
13 Changes to 
tax               *    JLEN values its portfolio based on current enacted      *    JLEN continues to monitor and participate in any 
legislation and        corporation tax rates and tax rules in the                   relevant consultation processes with UK HMRC and to 
rates                  jurisdictions in which it operates. Changes to these         assess the impact of any additional changes which may 
Link to Fund           rates or rules in the future could impact the                result from the introduction of differing legislation 
objectives             valuation of the portfolio and the level of 
Predictable            distributions received from the portfolio. 
income                                                                         *    The increase in the UK corporation tax rate from 19% 
growth for                                                                          to 25% from 2023, assumed to remain at that level for 
shareholders      *    JLEN works closely with expert tax advisers and              the remaining portfolio life, is factored into the 
Preservation of        adopts tax positions which are based on industry             valuation. While this risk has now crystallised, 
capital                practice and in line with the wider Group strategy.          there are other possible avenues for government to 
over the long          However, other than participating in industry                increase revenues, and so the general risk remains 
term                   consultation processes, there is little within the           elevated while government deficits remain large. 
Change in year         power of the Company that is able to mitigate changes 
Increased              in corporation tax rates and tax legislation. The 
                       Covid-19 pandemic and the resultant pressure on 
                       government finances has increased the risk of future 
                       tax rises. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
14 Regulatory - 
general            *    JLEN is required to comply with certain regulations,   *    Through a comprehensive compliance monitoring 
Link to Fund            being a Guernsey company listed on the London Stock         programme, JLEN ensures that it remains well informed 
objectives              Exchange, including those under the Alternative             as to the legislation, regulation and guidance 
Preservation of         Investment Fund Managers Directive ("AIFMD") and the        relevant to both the Company itself as well as the 
capital                 Foreign Account Tax Compliance Act ("FATCA"). There         project entities in which it invests. The Board 
over the long           is a risk that failure to comply with any of the            monitors compliance information provided by the 
term                    relevant rules could result in a negative                   Administrator, Company Secretary, Investment Adviser 
Investment,             reputational or financial impact on the Company.            and legal counsel and monitors ongoing compliance 
growth                                                                              developments relevant to a Guernsey company listed on 
and                                                                                 the London Stock Exchange. 
diversification 
Change in year 
No change 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
 
15 Regulatory - 
support 
for renewables 
Link to Fund 
objectives 
Predictable 
income 
growth for 
shareholders 
Preservation of 
capital 
over the long 
term 
Change in year 
No change 
--------------- 
 
 
 
 
 
 
 
                                                                               *    The UK Government has evolved the regulatory 
                                                                                    framework for new projects being developed but has 
                                                                                    consistently stood behind the framework that supports 
                  *    Changes to government policy for new renewable energy        operating projects as it understands the need to 
                       have resulted in changes to, and in some cases early         ensure investors can trust regulation. This principle 
                       closure of, the Renewables Obligation, the Renewable         of "grandfathering" was confirmed in the Energy Act 
                       Heat Incentive and Feed--in Tariff regimes. If these         2013. 
                       were applied retrospectively to current operating 
                       projects, including those in the Group's portfolio, 
                       this could adversely impact the market price for        *    The Company aims to hold a diversified portfolio of 
                       renewable energy or the value of the green benefits          environmental infrastructure projects so that it is 
                       earned from generating renewable energy.                     unlikely that all assets will be affected equally by 
                                                                                    a change in regulation. In the case of changes to the 
                                                                                    network, the Investment Adviser remains in close 
                  *    The UK electricity system is also changing as                contact with specialist advisers and trade bodies to 
                       renewables make up an increasing proportion of the           advise and lobby on proposals. 
                       energy mix as old fossil fuel generators are shut 
                       down. Changes such as the Targeted Charging Review 
                       have reduced ancillary revenues earned by many          *    Public sentiment has moved firmly towards action to 
                       renewable generators, including wind and solar assets        alleviate the climate emergency. Recent government 
                       in the JLEN portfolio. Future changes such as the            announcements, such as the extension of the CfD 
                       Significant Code Review of network access and                regime to onshore wind and solar and new support for 
                       forward-looking charge arrangements may negatively           green gas, show support increasing rather than 
                       impact the portfolio.                                        decreasing. 
---------------  -----------------------------------------------------------  ----------------------------------------------------------- 
 
 
Asset 
specific 
------------  ----------------------------------------------------------  ----------------------------------------------------------- 
Risk          Potential impact                                            Mitigation 
------------  ----------------------------------------------------------  ----------------------------------------------------------- 
16 
Operational    *    There is a risk that a health and safety event at a    *    The portfolio is constantly monitored by the 
risks               site that JLEN invests in could lead to increased           Investment Adviser to address risks as they are 
Link to Fund        costs at the site to prevent further occurrences.           identified. 
objectives          JLEN's reputation could be adversely affected by 
Predictable         publicity generated by a health and safety event. 
income                                                                     *    The use of a diverse range of service providers 
growth for                                                                      supplying management, operational and maintenance 
shareholders   *    There is a risk that poor performance by                    services ensures any failure of a single service 
Preservation        sub-contractors or, in the event of having to replac        provider has a minimal impact on the portfolio as a 
of capital    e                                                                 whole. 
over the            a sub-contractor, that a replacement may only be 
long term           found at a higher cost, could adversely affect 
Change in           project cash flows.                                    *    This risk is mitigated in part by the diversification 
year                                                                            represented by JLEN's portfolio of assets. 
No change 
               *    In the event of a single project suffering from a 
                    material issue, distributions to the Fund could        *    The portfolio has material damage and business 
                    possibly be impacted absolutely or for a period of          interruption insurance policies in place to cover 
                    time whilst the issue is resolved. This includes gri        against potential losses, although these do not 
              d                                                                 typically cover grid outages. Asset managers mitigate 
                    outages and constraints resulting in a project being        the impact of this by maintaining a dialogue with 
                    unable to export power and earn associated revenues.        network operators and influencing when such outages 
                                                                                occur. 
 
 
                                                                           *    The Board has in place a regime, overseen by the 
                                                                                Audit Committee, which provides the necessary comfort 
                                                                                that the internal control systems at the Investment 
                                                                                Adviser, the Administrator and the operating 
                                                                                companies are effective. This has included addressing 
                                                                                the challenges presented by the Covid-19 pandemic. 
 
 
                                                                           *    Each of the project assets have health and safety 
                                                                                policies that are adopted and monitored by the 
                                                                                project board of directors. Health and safety is a 
                                                                                standing item on board agendas, and reporting on 
                                                                                accidents and RIDDORs is received at every board 
                                                                                meeting. Regular health and safety audits on the 
                                                                                projects are carried out by independent specialists. 
------------  ----------------------------------------------------------  ----------------------------------------------------------- 
 

THE INVESTMENT ADVISER

JLEN is advised by Foresight Group LLP. Foresight Group is a listed infrastructure and private equity investment manager with over GBP7.0 billion of assets under management and employing over 235 people worldwide.

Chris Tanner

Co-lead Investment Adviser

Chris has been the co-lead Investment Adviser to JLEN since IPO.

He joined Foresight in 2019 as a Partner and currently works in the London office. He has over 20 years of industry experience.

Chris is a Member of the Institute of Chartered Accountants in England and Wales and has an MA in Politics, Philosophy and Economics from Oxford University.

Chris Holmes

Co-lead Investment Adviser

Chris has been co-lead Investment Adviser to JLEN since January 2018.

He joined Foresight in 2019 as a Partner in the London office. He has over 23 years' experience in infrastructure investment and financing in PFI/PPP and renewable energy projects.

Chris has a BA (Hons) in Business Economics from the University of Durham.

About Foresight Group

Foresight is a listed infrastructure and private equity investment manager which has been managing funds on behalf of institutions and retail clients for more than 35 years. Foresight has over GBP7.0 billion of assets under management across a number of funds, including listed vehicles, Limited Partnerships, Enterprise Investment Schemes, Venture Capital Trusts, Inheritance Tax Solutions and Open-Ended Investment Companies.

Funds managed by Foresight include the ownership of 162 solar projects around the world, 31 onshore wind projects, 43 bioenergy and waste facilities in the UK and Europe and 26 reserve power assets. Foresight also invests in the wider infrastructure sector including hydro, battery storage and waste management and wastewater treatment projects.

Together, the projects have a potential generating capacity of over 2.7GW, enough clean renewable electricity to power more than one million UK homes every year. Foresight is headquartered in Guernsey with its principal office in London and international offices in Luxembourg, Rome, Madrid and Sydney.

Updates over the period

On 4 February 2021, Foresight Group Holdings Limited successfully listed on the London Stock Exchange, with a market capitalisation of approximately GBP455 million. Foresight believes that the listing will enhance the company's profile. The listing will not lead to any changes in Foresight's senior management or in the team responsible for JLEN's management.

Having undertaken a comprehensive review of the contractual relationship with the Investment Adviser and the performance of the Investment Adviser, the Board remains satisfied that the continuing appointment of the Investment Adviser on the current terms is in the interests of shareholders as a whole. Any change to the existing arrangements would be disruptive, would divert resources away from pursuing the Company's investment objective, and would be potentially risk long-term shareholder value.

Q&A with the Investment Adviser

What are some of the highlights of the period?

Despite over a year of Covid-19 related lockdowns and the shift to home working, it has been a busy and productive year for JLEN. While, on a personal level, I miss working in the office, one of the highlights of the year for me has been the seamless way that my colleagues at Foresight and our external partners have adapted to overcome the challenges the year has presented.

During this time, we have acquired six new assets and two more post the period end and ventured into new technology sub-sectors with our investment into CNG Foresight which is a portfolio of CNG refuelling stations in the UK. We have also made our first investment into standalone battery storage facilities with the acquisition of a construction stage project located in Scotland. These assets fall into a new technology sub-sector for the Fund: Low carbon & and energy efficiency.

Another highlight from the year has been the development of the JLEN ESG KPIs. Their development was primarily driven out of a desire to provide more tangible evidence of progress against our ESG objectives but we found that the process helped us to think about our asset management procedures from a different perspective. Ultimately, I think the development process has driven real change in some of our processes; being able to report on our KPIs has also meant working to embed ESG considerations alongside the more traditional asset management activities.

How have JLEN and Foresight maintained their culture while working from home?

While JLEN does not have direct employees, there are Foresight employees (myself included) who spend the large majority of their time working on JLEN. The core team has been together for several years and of the team that transferred from the previous Investment Adviser in 2019, almost everyone is still with us. The Directors too are very engaged in their roles on the Board and are typically in touch with us at least once a week. This makes for a very cohesive culture. Obviously working from home hasn't made things easier, but that cohesiveness has stayed with us and I'm very grateful to my colleagues for their dedication and good humour over the course of the last year. We've also tried to have a little fun when we can - online quizzes, competitions and activities have been good stop-gaps until we can do things in person together.

I think that the objective of the Fund and the nature of the assets help too. Everyone is aware of the wider climate emergency and working on something that is part of the solution rather than part of the problem helps people to feel positive about their work life even as the Covid-19 pandemic has sometimes made matters difficult. We are aware that the assets are not perfect and that as understanding of the complex interfaces that make something sustainable progress, some aspects of what we do may well need to be improved. Nevertheless, we feel that we are playing a part in the journey to a more sustainable future, and we hope that we are open to meeting any criticism to the extent that we can.

You recently updated your investment policy - what were the changes and why were these important to make?

We have always stressed that the Company's "environmental infrastructure" mandate encompassed more than renewable energy generation projects. We feel that the changes approved by shareholders in March 2021 are best considered as an update to the existing policy rather than a significant change. While the previous policy was adequate, the updated policy better emphasises that we will consider a broader universe of infrastructure assets that support the transition to a low carbon economy or which mitigate the effects of climate change - assets that may not generate energy at all. There is no intention to shift the investment focus of the Fund dramatically, and these changes allow us to continue to move into new areas of environmental infrastructure in a measured way.

How does JLEN's investment mandate and portfolio of assets align with Britain's goals of building back better and becoming net zero?

JLEN's broad investment mandate fits well with the government's policy of net zero. Net zero will not be achieved simply by continuing to build more wind farms and solar parks. A wide range of technologies applied across sectors as varied as transport, heating, agriculture, construction and manufacturing will be needed as well as societal acceptance of some of the trade-offs that will need to be made. Through this, we are strongly of the view that attractive investment opportunities in environmental infrastructure will continue to emerge. This view is supported by initiatives such as "build back better" and President Biden's infrastructure plan. We believe that we are in a position to assist in the allocation of capital to projects that fulfil several policy objectives simultaneously - a fortunate position to be in.

INVESTMENT POLICY

The Company seeks to achieve its objectives by investing in a diversified portfolio of environmental infrastructure.

Investment policy

JLEN defines environmental infrastructure as infrastructure assets, projects and asset-backed businesses that utilise natural or waste resources or support more environmentally friendly approaches to economic activity, support the transition to a low carbon economy or which mitigate the effects of climate change.

Environmental infrastructure that the Company invests in typically has one or more of the following characteristics:

-- the benefit of long-term, predictable cash flows, which may be wholly or partially inflation-linked;

-- supported by long-term contracts or stable and well-proven regulatory and legal frameworks; or

   --     feature well-established technologies, and demonstrable operational performance. 

The Company will invest in environmental infrastructure either directly or through holding structures that give the Company an investment exposure to environmental infrastructure. The Company's investment interests in environmental infrastructure may include partnership equity, partnership loans, membership interests, share capital, trust units, shareholder loans and/or debt interests in or to project entities or any other entities or undertakings in which the Company invests or may invest.

Whilst there are no restrictions on the amount of the Company's assets that may be invested in any individual type of environmental infrastructure, the Company will, over the long term, seek to invest in a diversified spread of investments both geographically (although the UK will always represent a minimum of 50% of the portfolio by value) and across different types of environmental infrastructure in order to achieve a broad spread of risk in the Company's portfolio.

The Company will also ensure that its investment portfolio comprises a minimum of five investments at any given time, save that this requirement shall not apply when the Company is being wound up or dissolved.

As technologies and the markets in which they contract into develop and become established, future investments may differ from those currently within the portfolio. These assets may incorporate new technologies that have a demonstrable track record or traditional infrastructure projects with features such as greater exposure to merchant markets in feedstock or by-products.

Investment restrictions

With the objective of achieving a spread of risk, the following investment restrictions will apply to the acquisition of investment interests in the portfolio:

-- the substantial majority of investments in the portfolio by value and number will be operational. The Company will not acquire investment interests in any investment if, as a result of such investment, 25% or more of the NAV is attributable to projects that are in construction and are not yet fully operational;

-- at least 50% of the portfolio (by value) will be based in the UK and the Company will only invest in environmental infrastructure located in the UK, member states of the European Union or OECD countries and, accordingly, the Company will not make any investment if, as a result of such investment, more than 50% of the Net Asset Value immediately post-acquisition would be attributable to investments that are not based in the UK; and

-- it is intended that interests in any single investment acquired will not have an acquisition price (aggregated with the value of any existing investment in the relevant project, asset or business if relevant) greater than 25% of the Net Asset Value immediately post--acquisition.

In no circumstances will a new acquisition exceed a maximum limit of 30% of the Net Asset Value immediately post-acquisition.

Borrowing and gearing

The Company intends to make use of short--term debt financing to facilitate the acquisition of investments (either itself or by one of its subsidiaries). Borrowing may be secured against the assets comprising the portfolio. It is intended that such debt will be repaid periodically by the raising of new equity finance by the Company. The level of such debt is limited to 30% of the Company's Net Asset Value immediately after the acquisition of any further investment. Such debt will not include (and will be subordinate to) any project-level gearing or borrowings by assets or businesses in which the Company may invest which shall be in addition to any borrowing at Company level.

The Company may acquire investment interests in respect of projects that have non-recourse project finance in place at the project entity level. The Company will target aggregate non-recourse financing attributable to renewable energy generation projects not exceeding 65% of the aggregate gross project value of such projects. The Company will target aggregate non-recourse financing attributable to projects structured as PFI/PPP projects not exceeding 85% of the aggregate gross project value of such projects. The Company will not invest in any project that would cause the Company to be in breach of the targeted limits set out in this paragraph if the Directors do not reasonably believe that the relevant target leverage limit can be achieved within six months of the date of investment in that project. It is therefore possible that the Company may exceed the targeted gearing limits set out in this paragraph, but only in circumstances where the Directors reasonably believe that such breach can be cured (by achieving the relevant target leverage limit) within six months of the date of investment in the relevant project.

Hedging

Where investments are made in currencies other than pounds sterling, the Company will consider whether to hedge currency risk in accordance with the Company's currency and hedging policy as determined from time to time by the Directors. Interest rate hedging may be carried out to provide protection against increasing costs of servicing debt drawn down by the Company to finance investments.

This may involve the use of interest rate derivatives and similar derivative instruments. Hedging against inflation may also be carried out where appropriate and this may involve the use of RPI swaps and similar derivative instruments. The currency, interest rate and any inflationary hedging policies will be reviewed by the Directors on a regular basis to ensure that the risks associated with movements in foreign exchange rates, interest rates and inflation are being appropriately managed.

Any hedging transactions (if carried out) will only be undertaken for the purpose of efficient portfolio management to enhance returns from the portfolio and will not be carried out for speculative purposes. The execution of hedging transactions is at the discretion of the Investment Adviser, subject to the policies set by and the overall supervision of the Directors.

Cash balances

Pending reinvestment or distribution of cash receipts or repayments of any outstanding indebtedness, cash received by the Company will be invested in cash, cash equivalents, near-cash instruments, money market instruments and money market funds and cash funds. The Company may also hold derivative or other financial instruments designed for efficient portfolio management or to hedge interest, inflation or currency rate risks. The Company and any other member of the Group may also lend cash which it holds as part of its cash management policy.

Origination of further investments

Each of the investments comprising the portfolio comply with the Company's investment policy and further investments will only be acquired if they comply with the Company's investment policy.

Subject to due diligence and agreement on price, the Fund will seek to acquire those investments that fit the investment objectives and investment policy of the Company. If, in the opinion of the Directors, the risk characteristics, valuation and price of the prospective investment are acceptable and consistent with the Company's investment objective and investment policy, then (subject to the Fund having sufficient sources of capital) an offer will be made (without seeking the prior approval of shareholders) and, if successful, the investment will be acquired by the Fund.

The Investment Adviser will be subject to the overall supervision of the Board and all decisions on the acquisition of new investments and the disposal of existing investments will be subject to the approval of the Directors, all of whom are independent of the Investment Adviser.

Potential disposal of investments

Whilst the Directors may elect to retain investment interests in the portfolio of investments that the Company acquires, and any other further investments made by the Company over the long term, the Investment Adviser will regularly monitor the valuations of such investments and any secondary market opportunities to dispose of investments and report to the Directors accordingly. The Directors only intend to dispose of investments where they consider that appropriate value can be realised for the Company or where they otherwise believe that it is appropriate to do so. Proceeds from the disposal of investments may be reinvested or distributed at the discretion of the Directors.

Amendments to and compliance with the investment policy

Material changes to the investment policy of the Company may only be made in accordance with the approval of the shareholders by way of ordinary resolution and (for so long as the ordinary shares are listed on the official list maintained by the Financial Conduct Authority) in accordance with the Listing Rules. Minor changes to the investment policy must be approved by the Directors.

The investment restrictions detailed above apply at the time of the acquisition of investment interests and the values of existing investment interests shall be as at the date of the most recently published NAV of the Company, unless the Directors believe that such valuation materially misrepresents the value of the Fund's investment interests at the time of the relevant acquisition. The Fund will not be required to dispose of investment interests and to rebalance its portfolio as a result of a change in the respective valuations of investment interests.

Key financial performance measures

The key performance measures used by the financial Company to assess its performance over time against the objectives and strategy set out previously are as follows:

   --     market capitalisation; 
   --     dividend per share (declared); 
   --     share price; 
   --     total shareholder return for the year (share price basis); 
   --     Net Asset Value; 
   --     Net Asset Value per share; 
   --     Net Asset Value per share growth; 
   --     portfolio value; 
   --     number of investments; and 
   --     total megawatt capacity. 

INVESTMENT PORTFOLIO AND VALUATION

Portfolio value increased to GBP571.4 million at 31 March 2021 from GBP537.1 million at 31 March 2020.

Investment portfolio

At 31 March 2021, the Group's investment portfolio comprised of interests in 36 project vehicles and investments into two wind farms through its investment into FEIP:

 
Asset                                Location                   Type  Ownership  Capacity  Commercial operations date 
                                                                                     (MW) 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
Bilsthorpe                           UK (Eng)                   Wind       100%      10.2                    Mar 2013 
Burton Wold Extension                UK (Eng)                   Wind       100%      14.4                   Sept 2014 
Carscreugh                          UK (Scot)                   Wind       100%      15.3                    Jun 2014 
Castle Pill                          UK (Wal)                   Wind       100%       3.2                    Oct 2009 
Dungavel                            UK (Scot)                   Wind       100%      26.0                    Oct 2015 
Ferndale                             UK (Wal)                   Wind       100%       6.4                    Sep 2011 
Hall Farm                            UK (Eng)                   Wind       100%      24.6                    Apr 2013 
Le Placis Vert                         France                   Wind       100%       4.0                    Jan 2016 
Llynfi Afan                          UK (Wal)                   Wind       100%      24.0                    Mar 2017 
Moel Moelogan                        UK (Wal)                   Wind       100%      14.3                   2003 & 08 
New Albion                           UK (Eng)                   Wind       100%      14.4                    Jan 2016 
Plouguernével                     France                   Wind       100%       4.0                    May 2016 
Wear Point                           UK (Wal)                   Wind       100%       8.2                    Jun 2014 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
Biogas Meden                         UK (Eng)    Anaerobic digestion       100%    5.0(1)                    Mar 2016 
Egmere                               UK (Eng)    Anaerobic digestion       100%    5.0(2)                    Nov 2014 
Grange                               UK (Eng)    Anaerobic digestion       100%    5.0(2)                   Sept 2014 
Icknield                             UK (Eng)    Anaerobic digestion        53%    5.0(1)                    Dec 2014 
Merlin                               UK (Eng)    Anaerobic digestion       100%    5.0(2)                    Dec 2013 
Peacehill                            UK (Eng)    Anaerobic digestion        49%    5.0(3)                    Dec 2015 
Rainworth Energy                     UK (Eng)    Anaerobic digestion       100%    2.2(4)                    Sep 2016 
Vulcan                               UK (Eng)    Anaerobic digestion       100%    5.0(2)                    Oct 2013 
Warren Energy                        UK (Eng)    Anaerobic digestion       100%    5.0(2)                    Dec 2015 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
Amber                                UK (Eng)                  Solar       100%       9.8                    Jul 2012 
Branden                              UK (Eng)                  Solar       100%      14.7                    Jun 2013 
CSGH                                 UK (Eng)                  Solar       100%      33.5               Mar 2014 & 15 
Monksham                             UK (Eng)                  Solar       100%      10.7                    Mar 2014 
Panther                              UK (Eng)                  Solar       100%       6.5                   2011-2014 
Pylle Southern                       UK (Eng)                  Solar       100%       5.0                    Dec 2015 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
Bio Collectors                       UK (Eng)       Waste management        70%      11.7                    Dec 2013 
Codford Biogas                       UK (Eng)       Waste management       100%    3.8(4)                        2014 
ELWA                                 UK (Eng)       Waste management        80%       n/a                        2006 
Tay                                 UK (Scot)             Wastewater        33%       n/a                    Nov 2001 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
Northern Hydropower                  UK (Eng)             Hydropower       100%    1.8(5)         Oct 2011 & Oct 2017 
Yorkshire Hydropower                 UK (Eng)             Hydropower       100%    2.0(5)         Oct 2015 & Nov 2016 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
CNG Foresight                        UK (Eng)   Low carbon transport        25%       n/a                     Various 
West Gourdie                         UK (Eng)        Battery storage       100%       n/a          Under construction 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
FEIP Skaftåsen Vindkraft AB       Sweden                   Wind        n/a       n/a          Under construction 
FEIP Torozos                            Spain                   Wind        n/a       n/a                    Dec 2019 
---------------------------------  ----------  ---------------------  ---------  --------  -------------------------- 
                                                                          Total     310.7 
  ------------------------------------------------------------------  ---------  --------  -------------------------- 
 
   (1)   MWth (thermal) and an additional 0.4MWe CHP engine for on-site power provision. 
   (2)   MWth (thermal) and an additional 0.5MWe CHP engine for on-site power provision. 
   (3)   MWth (thermal) and an additional 0.25MWe CHP engine for on-site power provision. 
   (4)   Electrical exporting plant measured as MWe. 
   (5)   Includes 1.2MW battery storage. 

The JLEN portfolio comprises a diversified range of assets across different geographies, sectors, technologies and revenue types, as illustrated in the analysis below as at 31 March 2021 (by portfolio value and distributions from projects):

Portfolio value split by sector

Wind 32%

Anaerobic digestion 26%

Solar 21%

Waste & wastewater 17%

Hydro 2%

Low carbon & energy efficiency 2%

Portfolio value split by geography

UK 99%

Rest of Europe 1%

Portfolio value split by remaining asset life

Up to 10 years 9%

11 to 20 years 53%

More than 20 years 38%

Weighted average remaining asset life of the portfolio is 18.1 years.

Portfolio distributions split by inflation linkage(1)

Inflation linked 73%

Non-inflation linked 27%

Portfolio distributions split by revenue type(1)

Merchant power 27%

Green benefits 60%

PFI 13%

Portfolio operator exposure (percentage of portfolio value)

Future Biogas 21%

Siemens Gamesa 21%

ROC Energy 10%

In house 8%

Renewi 7%

Other 33%

(1) Based on project revenues from volumes/generation during the year and assumes project cash flow distributions reflect revenue split at each project.

Portfolio valuation

The Investment Adviser is responsible for carrying out the fair market valuation of the Company's investments, which is presented to the Directors for their approval and adoption. The valuation is carried out on a quarterly basis as at 30 June, 30 September, 31 December and 31 March each year.

The Directors' valuation of the portfolio at 31 March 2021 was GBP571.4 million, compared to GBP537.1 million at 31 March 2020. The increase of GBP34.3 million is the net impact of new acquisitions, cash received from investments, changes in macroeconomic (including corporation tax rate), power price and discount rate assumptions, and underlying growth in the portfolio. A reconciliation of the factors contributing to the growth in the portfolio during the year is shown in the chart below.

The movement in value of investments during the year ended 31 March 2021 is shown in the table below:

 
                                                                                                 2021    2020 
                                                                                                 GBPm    GBPm 
---------------------------------------------------------------------------------------------  ------  ------ 
Valuation of portfolio at opening balance                                                       537.1   523.6 
Acquisitions in the year (including post-acquisition adjustments and deferred consideration)     62.9    57.9 
Cash distributions from portfolio                                                              (48.2)  (45.0) 
---------------------------------------------------------------------------------------------  ------  ------ 
Rebased opening valuation of portfolio                                                          551.8   536.5 
Changes in forecast power prices                                                               (15.2)  (56.9) 
Changes in economic assumptions                                                                (26.0)  (13.1) 
Changes in discount rates                                                                        11.0    19.6 
Changes in exchange rates                                                                       (0.1)     0.1 
Balance of portfolio return                                                                      49.9    50.9 
---------------------------------------------------------------------------------------------  ------  ------ 
Valuation of portfolio at 31 March                                                              571.4   537.1 
Fair value of intermediate holding companies                                                   (67.3)   (4.2) 
---------------------------------------------------------------------------------------------  ------  ------ 
Investments at fair value through profit or loss                                                504.1   532.9 
---------------------------------------------------------------------------------------------  ------  ------ 
 

Allowing for investments of GBP62.9 million (including post-acquisition adjustments and deferred consideration) and cash receipts from investments of GBP48.2 million, the rebased valuation is GBP551.8 million. The portfolio valuation at 31 March 2021 is GBP571.4 million (2020: GBP537.1 million), representing an increase over the rebased valuation of 3.5% over the year (2020: 3%).

Valuation assumptions

The investments in JLEN's portfolio are valued by discounting the future cash flows forecast by the underlying assets' financial models.

Each movement between the rebased valuation and the 31 March 2021 valuation is considered below:

Forecast power prices

The project cash flows used in the portfolio valuation at 31 March 2021 reflect contractual fixed price arrangements under PPAs, where they exist, and short--term market forward prices for the next two years where they do not. The Company maintains a programme of rolling price fixes for its wind and solar projects, typically having the majority of projects on fixed price arrangements for the next six to 12 months in order to reduce the revenue risk from price volatility.

Where generating projects in the portfolio do not have a fixed price under their PPAs, JLEN has reflected the prices in the table below (gross of PPA discounts):

 
Avg. GBP/MWh    Summer   Winter 
-------------  -------  ------- 
Electricity    52 (44)  61 (51) 
Gas            14 (12)  17 (14) 
-------------  -------  ------- 
 

At 31 March 2021, 87% of the renewable energy portfolio's electricity price exposure was subject to a fixed price for the summer 2021 season and 70% for the winter season 2021/22.

After the initial two-year period, the project cash flows assume future electricity and gas prices in line with a blended curve informed by the central forecasts from three established market consultants, adjusted by the Investment Adviser for project-specific arrangements and price cannibalisation as required. The Company believes the addition of a third market consultant's curve into the blended curve provides a more robust forecast that reduces volatility arising from short--term changes in any individual consultant's projections.

Compared to the assumptions used in the valuation at 31 March 2020, on a time-weighted average basis, the net decrease in the electricity price assumptions is approximately 4.4% over the period to 2050 (being an average increase of 21% over the next three years offset by a 10% reduction thereafter).

The overall change in forecasts for future electricity and gas prices compared to forecasts at 31 March 2020 has decreased the valuation of the portfolio by GBP15.2 million.

The graph overleaf represents the blended weighted power curve used by the Company, reflecting the forecast of three leading market consultants, adjusted by the Investment Adviser to reflect its judgement of capture discounts and a normalised view across the portfolio of expectations of future price cannibalisation resulting from increased penetration of low marginal cost, intermittent generators on the GB network.

Revenue analysis

On an NPV basis (using the discount rate applicable to each project), the relative significance of each revenue category (including PFI) is as follows:

 
                      Contribution 
                                to 
Revenue type             portfolio 
                             value 
--------------------  ------------ 
Subsidy                        61% 
Long-term contracts             9% 
Merchant power                 24% 
Other                           6% 
--------------------  ------------ 
 

The proportion of Fund revenues that come from the sale of wholesale electricity and gas is 20% and 4% respectively. This is a low proportion of merchant power revenue relative to peers and reflects the broader diversification of JLEN's portfolio.

Economic assumptions

The 31 March 2021 valuation reflects an overall reduction in inflation assumptions based on a combination of actual historic inflation and recent independent economic forecasts. RPI inflation rates assumed in the valuation at 31 March 2021 are 3% until 2030, reducing to 2.25% from 2031 onwards (31 March 2020: 2.17%, stepping to 2.75% from 2025 onwards), whilst CPI inflation rates assumed in the valuation at 31 March 2021 are 2.25% across all years (31 March 2020: 2%) and 1.5% for the French assets (31 March 2020: 1.5%).

Following the UK Budget statement on 3 March 2021, the long-term corporation tax rate assumed in the valuations at 31 March 2021 reflects the impact of increased UK corporation tax rates from 19% to 25% from April 2023 for the remainder of the life of the portfolio (31 March 2020: long-term rate of 19%), reducing NAV by 3.7 pence per share. Corporation tax rates reverting to 19% from 2030 would reverse the reduction in NAV by 1.5 pence per share. The equivalent rate for the French assets is 28% (31 March 2020: 28%), stepping down to 26.5% in 2021 and 25% from 2022 (31 March 2020: step-down to 26.5% in 2021 and 25% in 2022).

Deposit rates assumed in the valuation are 0.25% to 2024 and 1% thereafter in the UK (31 March 2020: 0.5% to 2023 and 1.5% thereafter) and a long-term rate of 0.5% for the French assets (31 March 2020: 0.5%).

The euro/sterling exchange rate used to value the euro--denominated investments in France was EUR1.17/GBP1 at 31 March 2021 (EUR1.12/GBP1 at 31 March 2020).

The overall reduction in value resulting from changes to economic assumptions in the year is GBP26.0 million.

Discount rates

The discount rates used in the valuation exercise represent the Investment Adviser's and Board's 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 to reflect changes in the market and in the project risk characteristics.

During the year, there has continued to be strong demand for income--producing infrastructure assets. The Investment Adviser, based on its experience of bidding in the secondary market and as flagged within the half-year Investment Adviser report, has proposed a reduction in the discount rate used for valuing UK solar and wind assets as well as availability-based PPP infrastructure projects, which has been adopted by the Board. This reduction reflects market discount rate observations and the reduction in risk driven by lower forecast merchant power prices described above.

The discount rate used for asset cash flows which have received lease extensions beyond the initial investment period of 25 years retains a premium of 1% for subsequent years, reflecting the merchant risk of the expected cash flows beyond the initial 25-year period.

The overall increase in value resulting from changes to discount rates in the year is GBP11.0 million.

Taking the above into account and reflecting the change in mix of the portfolio during the year, the overall weighted average discount rate ("WADR") of the portfolio was 7.3% at 31 March 2021 (31 March 2020: 7.4%).

Balance of portfolio return

This represents the balance of valuation movements in the year excluding the factors noted above. The balance of the portfolio return mostly reflects the impact on the rebased portfolio value, all other measures remaining constant, of the effect of the discount rate unwinding and also some additional valuation adjustments from updates to individual project revenue assumptions. The total represents an uplift of GBP49.9 million.

Of this, the key valuation adjustments include an uplift of GBP4.9 million (0.9 pence per share) from the installation of upgrade packages across part of the UK wind, solar and AD portfolio - with further upgrade potential being researched on the remainder of the portfolio, an uplift of GBP4.0 million (0.7 pence per share) from a review of Green Certificates revenues across the portfolio and an uplift of GBP3.3 million (0.6 pence per share) from the recognition of savings across the portfolio driven primarily by recent insurance and other operational running cost reductions.

Valuation sensitivities

The Net Asset Value of the Company is the sum of the discounted value of the future cash flows of the underlying asset financial models, the cash balances of the Company and UK HoldCo, and the other assets and liabilities of the Group less Group debt.

The portfolio valuation is the largest component of the Net Asset Value and the key sensitivities are considered to be the discount rate applied in the valuation of future cash flows and the principal assumptions used in respect of future revenues and costs.

A broad range of assumptions is used in our valuation models. These assumptions are based on long--term forecasts and are not affected by short--term fluctuations in inputs, whether economic or technical. The Investment Adviser exercises its judgement in assessing both the expected future cash flows from each investment based on the project's life and the financial models produced by each project company and the appropriate discount rate to apply.

The key assumptions are as follows:

Discount rate

The WADR of the portfolio at 31 March 2021 was 7.3% (31 March 2020: 7.4%). A variance of plus or minus 0.5% is considered to be a reasonable range of alternative assumptions for discount rates.

Volumes

Base case forecasts for intermittent renewable energy projects assume a "P50" level of electricity output based on reports by technical consultants. The P50 output is the estimated annual amount of electricity generation (in MWh) that has a 50% probability of being exceeded - both in any single year and over the long term - and a 50% probability of being underachieved. Hence the P50 is the expected level of generation over the long term.

The P90 (90% probability of exceedance over a 10--year period) and P10 (10% probability of exceedance over a 10--year period) sensitivities reflect the future variability of wind and solar irradiation and the uncertainty associated with the long--term data source being representative of the long--term mean.

Separate P10 and P90 sensitivities are determined for each asset and historically the results presented on the basis they are applied in full to all wind and solar assets. This implies individual project uncertainties are completely dependent on one another; however, a recent Portfolio Uncertainty Benefit analysis performed in the year by a third-party technical adviser identified a positive portfolio effect from investing in a diversified asset base. That is to say that the lack of correlation between wind and solar variability means P10 and P90 sensitivity results should be considered independent. Therefore, whilst the overall P90 sensitivity decreases NAV by 5.7 pence per share, the impact from solar and wind separately is only 1.2 pence per share and 4.5 pence per share respectively.

Agricultural anaerobic digestion facilities do not suffer from similar deviations as their feedstock input volumes (and consequently biogas production) are controlled by the site operator.

For the waste & wastewater processing projects, forecasts are based on projections of future flows and are informed by both the client authorities' own business plans and forecasts and independent studies where appropriate. Revenues in the PPP projects are generally not very sensitive to changes in volumes due to the nature of their payment mechanisms.

Electricity and gas prices

Electricity and gas price assumptions are based on the following: for the first two years, cash flows for each project use forward electricity and gas prices based on market rates unless a contractual fixed price exists, in which case the model reflects the fixed price followed by the forward price for the remainder of the two--year period. For the remainder of the project life, a long--term blend of central case forecasts from three established market consultants and other relevant information is used, and adjusted by the Investment Adviser for project-specific arrangements and price cannibalisation. The sensitivity assumes a 10% increase or decrease in power prices relative to the base case for each year of the asset life after the first two--year period. While power markets can experience movements in excess of +/-10% on a short-term basis, the sensitivity is intended to provide insight into the effect on the NAV of persistently higher or lower power prices over the whole life of the portfolio. The Directors feel that +/-10% remains a realistic range of outcomes over this very long time horizon, notwithstanding that shocks will occur from time to time.

Feedstock prices

Feedstock accounts for over half of the operating costs of running an AD plant. As feedstocks used for AD are predominantly crops grown within existing farming rotation, they are exposed to the same growing risks as any agricultural product. The sensitivity assumes a 10% increase or decrease in feedstock prices relative to the base case for each year of the asset life.

Inflation

Each project in the portfolio receives a revenue stream which is either fully or partially inflation--linked. The inflation assumptions are described in the macroeconomic section on above. The sensitivity assumes a 0.5% increase or decrease in inflation relative to the base case for each year of the asset life.

Euro/sterling exchange rates

As the proportion of the portfolio assets with cash flows denominated in euros represented approximately less than 2% of the portfolio value at 31 March 2021, the Directors consider the sensitivity to changes in euro/sterling exchange rates to be insignificant.

Corporation tax

The UK corporation tax assumptions applied in the portfolio valuation are outlined in the notes to the accounts on page 157 of the Annual Report 2021. The sensitivity below assumes a 2% increase or decrease in the rate of UK corporation tax relative to the base case for each year of the asset life.

OPERATIONAL REVIEW

The portfolio has generally performed well over the period and overall performance of the portfolio has been in line with generation targets.

Operational overview

The key statistics for the year ended 31 March 2021 are summarised below:

 
                                                                    Year ended   Year ended 
                                                                   31 Mar 2021  31 Mar 2020 
-----------------------------------------------------------------  -----------  ----------- 
Market capitalisation                                                GBP612.3m    GBP606.9m 
Dividend per share (declared)                                            6.76p        6.66p 
Share price                                                             112.0p       111.0p 
Total shareholder return for the year (share price basis)                 7.4%         6.3% 
Net Asset Value                                                      GBP504.2m    GBP533.0m 
Net Asset Value per share                                                92.2p        97.5p 
Net Asset Value per share growth (after adjusting for dividends)          1.5%       (1.1)% 
Portfolio value                                                      GBP571.4m    GBP537.1m 
Number of investments                                                       36           30 
Largest single investment as % of portfolio value                         7.6%         7.9% 
-----------------------------------------------------------------  -----------  ----------- 
 

Portfolio performance

Operating performance of the environmental infrastructure portfolio during the year ended 31 March 2021 was generally good and the portfolio performed 0.4%(1) above budget over the year. This is excluding the assets acquired in Q4 and the Bio Collectors food waste processing plant which, as previously reported, has experienced a reduction in the volume of waste tonnages delivered due to the ongoing pandemic. The renewables segment of the portfolio produced 977GWh(1) (2020: 904GWh) of green energy. The AD portfolio continued to outperform, with gas generation 2.1% above budget (2020: 3.6% above budget). Wind generation was 1.4% below budget (2020: 3.9% above budget), mostly due to low wind speeds over the winter period. Solar also performed well, with generation 1.8% above budget (2020: 3.3% below budget).

   (1)   Not including Bio Collectors. 

Anaerobic digestion

The AD portfolio is now the largest producer of energy on a GWh basis and generated 44% of GWh energy produced by the JLEN portfolio. Gas generation (measured in GWh energy generated) was 461GWh, 2.1% ahead of budget (2020 variance was 3.6% favourable). Notable strong performances came from the Icknield, Peacehill and Grange Farm plants.

The portfolio performance showed strong resilience through the Covid-19 period, both in terms of feedstock availability and operational performance from its operating partners. Notwithstanding minor disruptions as a result of Covid-19, the performance remained relatively unaffected. During the year, feedstock buffers were replenished where required following a challenging 2019 in terms of feedstock yields. The stock buffers create an improved resilience for future years.

The second expansion of Vulcan Renewables was completed during the period and the plant is successfully operating at its new budgeted output. The expansion project was undertaken by one of our key partners, Future Biogas Limited, the current O&M operator of the plant. The facility now operates in excess of 1000m3/hr injection into the grid.

Two assets (Biogas Meden and Warren) continue to be closely monitored and several initiatives are underway to optimise feedstock diversification and subsequent financial performance of the assets.

Wholesale gas price fixing has been achieved for over 70% of the gas volumes across the AD portfolio for summer 2021 and winter 2021 respectively. Given the volatility of the wholesale gas market and the more recent negative gas pricing, the hedging volumes and prices are partially mitigating this volatility.

Wind

The wind portfolio generated 432GWh over the year ended 31 March 2021 (42% by GWh energy generated), 1.4% below budget. The marginal negative variance in production was primarily the result of lower wind resource than long-term averages. Site performance was largely in line with expectations, with overall site availability 1% below budget, while O&M contractual availability was 1% above. The Senvion assets' performance improved notably over the previous year, with overall availability and contractual availability improving 2.4% and 2.8% respectively.

Three areas of value enhancement were realised for the wind assets in the period. The validation exercise for the aftermarket software and hardware upgrades installed at Llynfi was finalised, demonstrating a significant improvement in performance. The same process is ongoing at Carscreugh, but initial analysis suggests a similarly positive outcome. Capitalising on a rebound in the REGO market, agreements were reached with PPA counterparties whereby nine investee companies have been allowed to sell the certificates to a third party at a premium and a 10th will now receive consideration for the certificates where it previously had not. Lastly, technical asset management agreements were finalised at a reduced cost and expanded scope.

Solar

Generation from the solar assets (which represent 8% of the portfolio energy generation for the year) at 79GWh was 1.8% above budget and overall the portfolio performed well.

Irradiation for the solar portfolio was 3.0% higher than the long-term average forecast for the portfolio. The discrepancy between the irradiation and generation was mainly due to grid constraints at the Shoals Hook site in Wales. Excluding these constrains, performance would have been 3.7% above budget.

The Branden assets had notably strong performances over the year, both sites outperforming their budgets by around 8%; while the insurance payments from events in 2018/19 were also received during the period. The Amber Fryingdown site successfully trialled a long-term technical solution which will be rolled out to the Amber Five Oaks site and this is expected to yield a c.4% uplift in performance.

Performance on the solar rooftop portfolio was significantly impacted by Covid-19 restrictions, not allowing timely access to sites and as a result of increased pressure on O&M resources. This was partly mitigated by lower than expected O&M ad hoc costs.

Hydro

The hydro assets have performed 15% below budget over the course of the year. The negative variance is primarily attributable to extreme river levels over the period. Generation was negatively impacted at the start of the year by the driest spring in recorded history for the Yorkshire area, while winter brought extended periods of heavy rain which raised river levels above the maximum for generation. Operationally, the plants continue to perform well with no material downtime suffered.

Waste & wastewater concessions

For the ELWA waste project and the Tay wastewater project, financial performance has been in line with expectations. Operational performance and compliance with contractual targets has also been stable.

For the ELWA waste project, financial performance has been better than expected. Operational performance and compliance with contractual targets were also good, with only marginal impact from the Covid-19 related downturn, and no material breaches occurring. Waste tonnages at the East London waste project have also continued to be stable. Operational performance targets were again exceeded with diversion from landfill at 99.97%, substantially ahead of the 67% contract target, and recycling at 26%, also ahead of the 22% contract target, and ELWA was able to pay distributions better than budgeted. Good progress has been made on enhancing fire defences to meet the expectations of the insurance market.

The Tay wastewater project has had another solid year operationally, with flows slightly lower than the previous year. As a result, distributions from the project were also slightly lower than budget.

Waste processing

The Bio Collectors waste collection and processing business collects and treats commercial and residential food waste from around London. As a result of Covid-19, the business has seen a material reduction in commercial food waste collections, whilst residential food waste collection has remained stable. Commercial food waste forms up to half of the anticipated tonnages for the plant. The performance downturn was partly mitigated by supplementing the asset with crops and residues, noting that these feedstocks are more expensive compared to food waste.

Codford Biogas (JLEN's most recent food waste treatment acquisition) did not experience a material level of feedstock shortfall as it relies on food waste from commercial and industrial sectors that have not been impacted by the pandemic and the site has been broadly on budget since acquisition.

Battery storage assets

Operational assets

Revenues were down 43% against budget despite good availability and asset performance. The negative variance was primarily due to the Covid-19 impact on electricity demand that meant the National Grid did not procure the anticipated volume of balancing services. Despite this, Fast Frequency Response ("FFR") still represented the highest value revenue option throughout the year. Both assets traded exclusively in this service, securing contracts in the month ahead or weekly auctions and monthly FFR pricing has steadily increased as restrictions continue to ease.

Development assets

In March 2021, JLEAG UK acquired 100% equity stake in FS West Gourdie Limited (formerly Gigabox South Road Limited). The acquired company owns the development rights to a fully consented 50MW Battery Energy Storage System project in Dundee, Scotland. Negotiations on a fully wrapped engineering, procurement and construction contract is being finalised, with construction expected to begin in summer 2021. Energisation and commercial operations are anticipated to begin in spring 2022.

Low carbon transport

In December 2020, JLEN acquired a minority stake in a portfolio of compressed natural gas ("CNG") refuelling stations for heavy goods vehicles and provided a funding line for the construction of a further pipeline of stations.

In February 2021, the acquisition of a construction stage asset in Glasgow was completed and post the period end a further construction stage asset was added to the portfolio, bringing the total number of stations to seven.

A positive variance of 38% against budget for fuel dispensed has been reported in Q4 2020/21 for the operational sites in the portfolio.

 
                                                                                                            Total 
                                                                                                            since 
Portfolio generation                        2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21     IPO 
------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------ 
Wind portfolio actual generation (GWhe)          82      184      217      399      406      458      432   2,178 
Variation from budget(1)                        +7%     +11%     -15%       0%      -9%      +4%      -1%     -2% 
------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------ 
AD portfolio actual generation (GWhth)            -        -        -       51      262      352      461   1,126 
Variation from budget                             -        -        -      +8%      +4%      +4%      +2%     +3% 
------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------ 
Solar portfolio actual generation (GWhe)         10       30       40       64       79       75       79     377 
Variation from budget(1)                        -1%     --2%     -12%      -9%      +2%      -3%      +2%     -3% 
------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------ 
Hydro portfolio actual generation (GWhth)         -        -        -        -        -        3        5       8 
Variation from budget                             -        -        -        -        -     -17%     -15%    -16% 
------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------ 
 

The average all-in price received by the differing technology classes in the UK for their energy volumes generated in the year ended 31 March 2021 was GBP84.26 per MWhe for onshore wind (31 March 2020: GBP87.63 per MWhe), GBP196.8 per MWhe for solar (31 March 2020: GBP186.0 per MWhe(2) ), GBP101 per MWhth for AD (31 March 2020: GBP96 per MWhth) and GBP222.56 per MWhe for hydro.

The effects of monthly variability and seasonality in production expected in a portfolio of intermittent renewables projects are reduced by the overall technology diversification in JLEN's portfolio. Although agricultural AD plants have some indirect exposure to weather patterns through the yield of harvests (feedstock), it is very unlikely to impact on their gas volumes. The environmental processing assets, apart from Tay, have revenues independent of weather and all have revenues that vary little with changes in volume of waste and wastewater processed. The Company now separates the sensitivities illustrating the effect of different levels of wind and solar resource on the portfolio valuation as there is no indication that these weather resources are positively correlated.

(1) Budgets adjusted to reflect operational energy yield assessments carried out under contracted true-up mechanisms post IPO.

   (2)   Does not include the Panther rooftop portfolio. 

Acquisitions

During the reporting year, the Company acquired six new projects, bringing the total energy generation capacity of the portfolio to 310.7MW, provided additional funding against its EUR25 million commitment as a limited partner in the FEIP fund and provided further funding for projects' value enhancements. The total cash consideration was GBP62.8 million. The aggregate investment amount was funded through cash available and drawdowns under the Company's revolving credit facility. The assets were as follows:

Peacehill Farm anaerobic digestion plant

On 2 April 2020, the Company announced an investment into Peacehill Farm AD plant, located in Wormit, Fife in Scotland, for an aggregate amount of c.GBP11 million. The investment comprises the provision of a debt facility and subscription for a minority equity stake in JLEAG AD Limited which holds, through its wholly owned subsidiary Peacehill Gas Limited, the rights and operational assets at the Peacehill Farm AD plant. The plant has a thermal capacity of c.5MWth and predominantly produces biomethane to be injected into the national gas grid. In addition, the plant also has a 0.25MWe CHP engine and is accredited under the Renewable Heat Incentive ("RHI") and Feed--in Tariff ("FiT") schemes.

Peacehill is JLEN's eighth investment into agricultural gas--to--grid AD plants and continues to build upon the Company's considerable presence in this part of the market.

Northern Hydropower portfolio

On 17 September 2020, the Company acquired two operational hydropower assets for GBP4.74 million, including working capital. The plants are located in Yorkshire and Cornwall and the Yorkshire-based asset includes a co--located battery storage system. The assets acquired are:

-- De Lank hydro, a 99kW hydro project located on the De Lank River, commissioned in October 2011;

-- Knottingley hydro, a 500kW dual turbine hydro project located on the River Aire, which was commissioned in October 2017; and

   --     a 1.2MW battery co-located at Knottingley, commissioned in January 2018. 

Both hydro projects are accredited under the 20-year FiT scheme. The battery storage project at Knottingley is trading under a dispatch agreement with Limejump Ltd. This is the Company's second investment into hydro projects with co-located battery storage, further increasing the diversification profile of the portfolio.

CNG Foresight portfolio

In December 2020, JLEN acquired a minority stake in a portfolio of five CNG refuelling stations for heavy goods vehicles, located in the UK. JLEN will also contribute to a funding line for the construction of a further pipeline of CNG refuelling stations as part of a national network. In February, the acquisition of a construction stage asset in Glasgow was completed and post the period end a further construction stage asset was added to the portfolio, bringing the total number of stations to seven.

The investment has been made alongside other funds managed by Foresight Group and the developer and operator of the stations, CNG Fuels Limited.

Codford Biogas

JLEN acquired a 100% equity stake in Codford Biogas Limited ("CBL") in February 2021. CBL holds the rights and operational assets that make up the Codford anaerobic digestion ("AD") plant, a 100,000 tonnes per annum food waste permitted plant based in Wiltshire, UK.

The Codford AD plant has been operational since 2014 and has a current electrical capacity of 3.8MWe which is generated by processing up to 100,000 tonnes per annum of both liquid and solid food waste from the commercial and industrial sector.

As a result of its electricity generation, the plant is able to supply up to 4,000 homes via the UK power grid. In addition to the core electricity export, the plant is accredited under the Feed-in Tariff ("FiT") and the Renewable Heat Incentive ("RHI") schemes.

West Gourdie battery storage

In March 2021, JLEN acquired a 100% equity stake in FS West Gourdie Limited. The acquired company owns the development rights to a fully consented 50MW battery energy storage system project in Dundee, Scotland.

Negotiations on a fully wrapped EPC contract are being finalised, with construction expected to begin in summer 2021.

Energisation and commercial operations are anticipated to begin in spring 2022. This acquisition represents JLEN's third investment into battery storage systems, adding to the two co-located batteries that the Company owns as part of its run-of-river hydro portfolio.

Rainworth Energy

In March 2021, JLEN acquired a 100% equity stake in Rainworth Energy Limited. The Rainworth AD plant is a 2.2MW electrical plant based in Nottinghamshire, close to the JLEN-owned Biogas Meden AD plant. The plant has been operational since 2016 and supplies both heat and power to Center Parcs' Sherwood Forest resort.

The plant is permitted to accept up to 42,400 tonnes per annum of feedstock and is accredited under both the Feed-in Tariff ("FiT") and the Renewable Heat Incentive ("RHI") schemes.

Other investments

FEIP

In January 2020, JLEN announced a commitment of EUR25 million to Foresight Energy Infrastructure Partners SCSp ("FEIP"), a Luxembourg limited partnership investment vehicle. In addition to the EUR1.6 million investment made in the previous reporting period, a further investment of EUR3.7 million has been provided to the vehicle for investment into a construction stage Swedish wind farm - Skaftåsen Vindkraft AB. This investment will see the construction of a 35 turbine wind farm in Central Sweden. The investment will also be allocated to Torozos - an operational 94MW wind farm, which comprises 27 SGRE 132m, 3.5MW wind turbines spread across two sites in the Castile and León region of Spain.

Financing

During the year, the Group benefited from a three-year GBP170 million facilities agreement with HSBC, NIBC, ING and Santander. The facility has been extended twice, in June 2018 and May 2019, and was due to expire in June 2022. The facility margin was 200 to 225 bps (depending on the loan-to-value ratio for the Fund) over LIBOR.

On 21 May 2021, JLEN announced that it had signed a new revolving credit facility with a three-year facility agreement which provides for a committed multi-currency revolving credit facility of GBP170 million and an uncommitted accordion facility of up to GBP30 million.

The RCF provides an increased source of flexible funding outside of equity raisings, with both sterling and euro drawdowns available at lower rates than the existing facility. The agreement includes an uncommitted option to extent for a further year and will be used to make future acquisitions of environmental infrastructure projects to add to its current portfolio, as well as covering any working capital requirements.

The interest charged in respect of the renewed RCF is linked to the Company's ESG performance, with JLEN incurring a premium or discount to its margin and commitment fee based on performance against defined targets. Those targets include:

   --     environmental: increase in the volume of clean energy produced; 
   --     social: the value of contributions to community funds; and 

-- governance: maintaining a low number of work-related accidents, as defined under the Reporting of Injuries, Diseases and Dangerous Occurrences ("RIDDOR") by the Health and Safety Executive.

Performance against these targets will be measured annually with the cost of the RCF being amended in the following financial year.

Lenders to the facility include three of the four previous lenders (HSBC, ING and NIBC) plus two new participants (National Australia Bank and Royal Bank of Scotland International). The margin can vary between 195 bps and 205 bps over SONIA ("Sterling Overnight Index Average") for sterling drawings and EURIBOR for euro drawings, depending on performance against the ESG targets.

In addition to the revolving credit facility, several of the projects have underlying project-level debt which is not reflected in these financial statements. There is an additional gearing limit in respect of such debt of 85% of the aggregate gross project value (being the fair market value of such portfolio companies increased by the amount of any financing held within the projects) for PFI/PPP projects and 65% for renewable energy generation projects.

The project-level gearing at 31 March 2021 across the portfolio was 28.4% (31 March 2020: 31.9%) being 25.1% (31 March 2020: 26.7%) for the renewable energy assets and 51.2% (31 March 2020: 52.4%) for the PFI processing assets. Taking into account the amount drawn down under the revolving credit facility of GBP82.0 million, the overall fund gearing at 31 March 2021 was 36.1% (31 March 2020: 35.3%).

As at 31 March 2021, the Group, which comprises the Company and the intermediate holding companies, had cash balances of GBP13.5 million (31 March 2020: GBP22.0 million).

VALUE ENHANCEMENT

The Investment Adviser has achieved various operational and financial enhancements to projects over the period.

Vulcan AD plant second expansion

Following the successful completion of Vulcan's first upgrade project, the plant was expanded further during the financial year. The expansion work was carried out through an EPC contract with one of JLEN's key partners, Future Biogas Limited. The expansion involved increasing the throughput of the plant through several physical modifications. The project was on budget and ahead of schedule, whilst not impacting the existing operational performance.

Technical improvements on the solar portfolio

A technical string DC/DC converter solution combined with string reconfiguration was trialled successfully on 200 strings in Amber and will be extended to both Amber sites, resulting in an expected long-term 3.9% performance uplift. Retrofit is expected to take place in October 2021.

General AD upgrades/improvements

During the financial year, the Investment Adviser, along with its key operating partners, have integrated a number of value enhancement measures across the AD portfolio. One of these value enhancements includes the installation of a technology called Disruptor, which has been installed across five AD facilities. These units provide increased digestion efficiency, resulting in a higher energy output per tonne of feedstock processed. The installations were carried out by Future Biogas and are operating successfully.

Other initiatives have included the installation of further biogas upgrading membranes across three of JLEN's AD assets. This investment has allowed those plants to be able to operate at a higher throughput compared to the original investment case. Not only does this improve overall revenues but it also allows the assets to recover any lost downtime more quickly by being able to operate at a higher throughput.

CASE STUDY

CNG Foresight

Low carbon transport

In December 2020, JLEN acquired a minority stake in a portfolio of five compressed natural gas ("CNG") refuelling stations for heavy goods vehicles, located in the UK.

JLEN will also contribute to a funding line to finance the construction of a further pipeline of CNG refuelling stations as part of a national network. In February, the acquisition of a construction stage asset in Glasgow was completed and post the period end a further construction stage asset was added to the portfolio, bringing the total number of stations to seven.

The investment has been made alongside other funds managed by the Investment Adviser to JLEN - Foresight Group - and the developer and operator of the stations, CNG Fuels Limited.

 
CNG Foresight 
-------------------  --------------------------- 
Project description  Portfolio of CNG refuelling 
                      stations 
Acquisition date     December 2020 
Location             Various UK 
Ownership            Minority stake 
-------------------  --------------------------- 
 

Low carbon transport market drivers

   --     There are c.130,000 HGVs over 31 tonnes, with numbers increasing to meet consumer demands. 

-- The transport sector is the largest source of carbon dioxide emissions in the UK, accounting for 34% in 2019(1) . Within the transport sector HGVs produce 17% of road transport emissions and 4.5% of total UK greenhouse gases ("GHGs").

-- HGVs fuelled by biomethane (as generated by anaerobic digestion plants) are the only commercially available, at-scale solution to substantially reduce these emissions.

CO(2) reduction compared to diesel fuel(1)

Bio-CNG 84%

Fossil-based CNG 29%

Sector benefits

-- HGVs fuelled with 100% biomethane offer a saving in GHG emissions of over 80% on a "well-to-wheel" basis when compared to a similar diesel vehicle. They also offer further environmental benefits such as lower noise and lower particulate emissions(2) .

-- The take-up of CNG HGVs fuelled by biomethane offers fleet operators the opportunity to lower their emissions substantially.

-- CNG HGVs are cheaper to run over a typical five-to-seven year duty cycle, due in part to a favourable fuel duty position compared to comparable diesel vehicles.

-- The Government has committed to maintaining a clear advantage for gas-powered vehicles until 2032, as part of measures supporting the UK's target of net zero emissions by 2050.

JLEN benefits

-- Revenues are earned from sales of biomethane fuel to customers under contract, which include several of the largest fleet operators in the UK. The commodity price of gas is passed through to the customer, meaning that JLEN has no exposure to underlying merchant gas prices.

(1) This comparator uses the EU data generated by EUCAR/Concawe/JRC in their report: Well-to-wheels Analysis of Future Automotive Fuels and Powertrains in the European Context - WTT APPIX.

(2) Description and detailed energy and GHG balance of individual pathways - version 3c, July 2011.

CASE STUDY

West Gourdie

Battery storage

In March 2021, JLEN acquired a 100% equity stake in FS West Gourdie Limited. The acquired company owns the development rights to a fully consented 50MW battery energy storage system project in Dundee, Scotland. The West Gourdie project is fully consented and construction ready. The project is expected to reach energisation and start commercial operations in spring 2022. This acquisition represents JLEN's third investment into battery storage systems, adding to the two co-located batteries that the Company owns as part of its run--of-river hydro portfolio.

 
West Gourdie 
 Battery 
-------------------  ---------------- 
Project description  Construction 
                      stage battery 
                      storage 
Acquisition          March 2021 
 date 
Location             Dundee, Scotland 
Ownership            Minority 
                      stake 
-------------------  ---------------- 
 

Battery Energy Storage Systems market drivers

-- In order to meet its UK "net zero" targets by 2050, renewables are expected to comprise a growing proportion of the overall capacity mix.

   --     Intermittency of generation is expected to increase as a result of: 

-- increasing deployment of primary renewable technologies (i.e. wind and solar) and existing thermal generation being retired from the system; and

   --     electrification of transport and heating is also expected to increase demand. 

-- This will likely put a significant strain on the system, making it harder for National Grid to balance supply and demand on the network, with increasing system volatility.

   --     Storage assets provide much-needed support to the network to help resolve imbalances. 

Sector benefits

   --     Investment cases typically indicate higher returns versus renewable generation projects. 

-- Possible diversification benefits for portfolios with a high concentration of renewable assets.

-- High renewable penetration depresses capture prices for renewable assets whilst improving spreads for battery projects.

   --     Supports decarbonisation agenda. 
   --     Low construction risk as containerised batteries are delivered to site "installation ready". 
   --     Small footprint introduces potential for co-location with existing renewable assets. 

SUSTAINABILITY AND ESG

CHAIRMAN'S FOREWORD

Last year, for the first time, we articulated a set of ESG objectives which were integrated into the Fund's objectives, with the stated intention that we would use 2020 to develop and test a range of key performance indicators ("KPIs") to inform them.

This year, JLEN contracted an ESG consultant to help identify performance metrics that aligned with best practice standards and ESG guidance from a number of industry bodies. The consultant facilitated a workshop with the JLEN team to identify a range of ESG metrics that apply to the Fund's investments, from which a list of ESG KPIs was identified.

This report articulates our agreed ESG KPIs, which will provide a consistent framework against which we can track the ESG performance of our portfolio over time. During 2021 we will benchmark performance of our investments against these KPIs and will use this to help us set targets for improvement in future.

In the run-up to COP26 there is more scrutiny than ever on investors, with increasing calls for investment mandates to align with the Paris Climate Change Agreement. JLEN's Fund is well aligned with the objectives of the Paris Agreement and we are proud of JLEN's ESG approach, which we will continue to refine and improve over time.

This year JLEN was recognised for its ESG efforts to date through the IR Society Best Practice Awards and the Investment Week Sustainability and ESG Investment Awards. This includes negotiation of a sustainability-linked loan in 2021.

We continue to see ESG criteria as essential to maintaining and understanding the resilience of our investments to significant risks, as well as being crucial to addressing the recommendations of the Task Force on Climate-related Financial Disclosures. We also continue to see ESG as a journey for JLEN - we expect to continually evolve and improve our processes and we welcome stakeholder engagement as we develop our KPIs and performance monitoring going forward.

Richard Morse

Chairman

9 June 2021

AT A GLANCE

Environmental performance 2020/21

>970,000 MWh energy generated

>445,000 GHG emissions avoided (tCO(2) e)

>37.5 wastewater treated (billion litres)

>500,000 waste diverted from landfill (tonnes)

>140,000 waste recycled (tonnes)

>370,000 organic fertiliser produced (tonnes)

Social performance 2020/21

>GBP380,000 community funding

35 health and safety audits

Awards

   --     IR Society Best Practice Award 2020 for "Best communication of ESG" in the FTSE 250 category 

-- Investment Week Sustainability and ESG Investment Awards for "Best Sustainable & ESG Alternative Asset Fund"

PROGRESSING JLEN'S APPROACH TO ESG

JLEN's approach to ESG is based on three core principles: Assess, Monitor and Engage. Since the publication of the Fund's first ESG report, JLEN has been focused on progressing each of these principles in order to maintain a robust ESG framework. Over 2020/21 JLEN has focused on advancing its approach to "Monitor" by developing KPIs to inform the objectives that were published in last year's report.

ESG objectives

   --     Promote the efficient use of resources 
   --     Develop positive relationships with the communities in which JLEN works 
   --     Ensure effective, ethical governance across the portfolio 

ESG KPIs

Driven by its environmental focus, JLEN's reporting to date has been dominated by environmental metrics. This year's work has aimed at redressing the balance of metrics that are reported to enhance the visibility of social and governance performance of JLEN's investments.

The list of agreed KPIs is set out below, with new KPIs highlighted. Some of the indicators are ones that were tracked already by Foresight's internal governance processes, while others have been identified as relevant to the performance of JLEN's investments and which JLEN now intends to track more closely with the aim of monitoring performance over time.

Each KPI has a direct or indirect link to performance of the investment and the Investment Adviser considers these to be important metrics in understanding the resilience of the portfolio going forward. Each KPI feeds back to the ESG objectives, allowing JLEN to quantify, where practicable, the ESG performance of its investments. The table below sets out the full list of KPIs.

 
Environmental                                      Social                                              Governance 
-------------------------------------------------  --------------------------------------------------  -------------------------------------------------------- 
 
 *    Renewable energy generated                    *    Community funding                              *    Portfolio audits of health and safety practices 
 
 
 *    GHG emissions avoided                         *    Health and safety incidents                    *    Diversity of SPV directors(1) 
 
 
 *    Tonnes of waste treatment                     *    Community engagement procedures(1)             *    Portfolio audits of tax and financial practices(1) 
 
 
 *    Litres of wastewater treatment                *    FTE jobs supported(1)                          *    Inclusion of ESG in SPV board agendas(1) 
 
 
 *    Environmental incidents                       *    Accessibility of community fund documents(1)   *    Governance oversight(1) 
 
 
 *    Purchased energy originating from renewable   *    Assessment of major contractors against ESG    *    Assessment of major contractors against ESG 
      sources(1)                                         criteria(1)                                         criteria(1) 
 
 
 *    Management of biodiversity(1) 
 
 
 *    Assessment of major contractors against ESG 
      criteria(1) 
-------------------------------------------------  --------------------------------------------------  -------------------------------------------------------- 
 

Over 2021/22 the Investment Adviser intends to collect baseline data to inform these KPIs, to help with tracking and reporting going forward.

   (1)   New KPI for 2021. 

Mapping JLEN's portfolio against the United Nations Sustainable Development Goals

The United Nations Sustainable Development Goals ("SDGs") are a set of 17 goals for sustainable development.

To be achieved by 2030, they recognise that ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs including education, health, social protection and job opportunities, while tackling climate change and environmental protection. JLEN has mapped its portfolio against the SDGs and the results of this analysis are set out below:

 
SDG                           Target                                      JLEN's performance 
----------------------------  ------------------------------------------  -------------------------------- 
6 Clean water and sanitation  6.3 Improve water quality by                >37.5 billion litres of 
                               reducing pollution, eliminating             wastewater treated in 
                               dumping and minimising release              2020/21. 
                               of hazardous chemicals and 
                               materials, halving the proportion 
                               of untreated wastewater and 
                               substantially increasing recycling 
                               and safe reuse globally. 
----------------------------  ------------------------------------------  -------------------------------- 
7 Affordable and clean        7.2 Increase substantially                  310.7MW capacity renewable 
 energy                        the share of renewable energy               energy assets 
                               in the global energy mix. 
----------------------------  ------------------------------------------  -------------------------------- 
8 Decent work and economic    8.4 Improve progressively global            JLEN's portfolio is optimised 
 growth                        resource efficiency in consumption          to make the most of naturally 
                               and production and endeavour                available resources such 
                               to decouple economic growth                 as wind power. By maximising 
                               from environmental degradation,             the power produced by 
                               in accordance with the 10-year              each turbine, JLEN ensures 
                               framework of programmes on                  that its assets are operating 
                               sustainable consumption and                 as efficiently as they 
                               production, with developed                  can. 
                               countries taking the lead. 
                              8.5 Achieve full and productive             JLEN's KPI tracking jobs 
                               employment and decent work                  in the portfolio as full 
                               for all women and men, including            time equivalent ("FTE") 
                               for young people and persons                will inform this target 
                               with disabilities, and equal                going forward. 
                               pay for work of equal value. 
----------------------------  ------------------------------------------  -------------------------------- 
9 Industry, innovation        9.1 Develop quality, reliable,              310.7MW capacity contributing 
 and infrastructure            sustainable and resilient infrastructure,   renewable energy to the 
                               including regional and transborder          local grid. 
                               infrastructure, to support 
                               economic development and human 
                               wellbeing, with a focus on 
                               affordable and equitable access 
                               for all. 
----------------------------  ------------------------------------------  -------------------------------- 
15 Life on land               15.5 Take urgent and significant            JLEN's KPI tracking biodiversity 
                               action to reduce the degradation            management plans across 
                               of natural habitats, halt the               its portfolio will inform 
                               loss of biodiversity and, by                this target going forward. 
                               2020, protect and prevent the 
                               extinction of threatened species. 
----------------------------  ------------------------------------------  -------------------------------- 
 

Summary of JLEN's ESG approach

Sustainability considerations are embedded throughout the JLEN investment process and asset management procedures, from initial investment screening through due diligence and into ongoing monitoring and reporting. Overall responsibility for ESG resides with the Board of JLEN, with analysis and reporting against ESG criteria provided by the Fund's Investment Adviser, Foresight.

 
Assess                        Monitor                       Engage 
----------------------------  ----------------------------  ---------------------------------------------------------- 
JLEN undertakes due           Third-party service           Stakeholder engagement 
diligence                     providers,                    is an important part 
on each of its asset          sometimes with the            of JLEN's approach. Engagement 
acquisitions, including       assistance                    with stakeholders occurs 
assessing a range of          of technical advisers,        through a combination 
ESG criteria. These criteria  monitor and manage the        of formal (e.g. contractual 
will now incorporate          ongoing performance of        obligations or industry 
the ESG KPIs as set out       each asset in the JLEN        events) and informal 
in this report.               portfolio. Site visits        channels (e.g. ongoing 
Each asset is assessed        are undertaken to ensure      meetings and discussions). 
against a range of            that the asset's day-to-day   This year, JLEN won two 
sustainability                running and ESG performance   awards in recognition 
evaluation criteria.          is as expected, and there     of their ESG credentials 
Assets are scored against     are a range of                and communications: 
these criteria, providing     environmental, 
an overall picture of         governance and health          *    IR Society Best Practice Award 2020 for "Best 
ESG performance. Foresight    and safety audits undertaken        communication of ESG" in the FTSE 250 category; and 
has minimum thresholds        by third parties to maintain 
for ESG performance,          visibility over ESG 
ensuring that, where          performance                    *    Investment Week Sustainability and ESG Investment 
necessary, post-investment    in the portfolio.                   Awards for "Best Sustainable & ESG Alternative Asset 
improvement plans are         During Covid-19, health             Fund". 
implemented.                  and safety audits and 
                              third-party visits were 
                              not disrupted. Site visits 
                              were undertaken in 
                              accordance 
                              with the government guidance 
                              in effect at the time 
                              of each visit. 
                              This year, JLEN has 
                              developed 
                              a series of ESG KPIs 
                              to help inform this 
                              principle 
                              and help to track the 
                              performance of individual 
                              assets, investment sectors 
                              and the entire portfolio 
                              over time. 
----------------------------  ----------------------------  ---------------------------------------------------------- 
 

JLEN's ESG approach is also articulated in their Sustainable Finance Disclosure Regulation document, which can be found on their website www.jlen.com.

Aligning with the recommendations of the Task Force on Climate-related Financial Disclosures

In considering the TCFD recommendations, JLEN is affected by organisation-level strategic approaches taken by Foresight. It is important, however, to consider how those approaches apply at the Fund level. JLEN's approach can be found earlier in this report.

Going forward

Over the next year JLEN will work with Foresight to implement the ESG KPIs and create a comprehensive baseline of performance across the investment portfolio. The Investment Adviser will also use this time to test the relevance and robustness of the proposed KPIs. Where a KPI doesn't provide the anticipated support in understanding the ESG performance of the Fund, that KPI will be reconsidered and, if appropriate, revised.

Also in 2021/22, JLEN's focus is on aligning with the reporting requirements of the TCFD. Further information, including JLEN's roadmap to disclosure, can be found earlier in the report.

Case studies

Developing JLEN's ESG KPIs

This year JLEN contracted an ESG consultant to help identify performance metrics that aligned with best practice standards and ESG guidance from a number of industry ESG bodies.

In developing the KPIs, the JLEN team considered the principal issues that arise in investment and asset management activities, such as:

   --     the top issues that frequently arise; 
   --     the principal drivers of performance; 
   --     which issues typically take the most time to resolve; 

-- the material risks that the team is seeing more frequently now than they have in the past; and

-- the key opportunities that the team is seeing more frequently now than they have in the past.

Alongside this, the consultant analysed the recommended indicators associated with a broad range of global, regional and national standards including, but not limited to:

   --     UN Principles for Responsible Investment; 
   --     UN Sustainable Development Goals; 
   --     TCFD recommendations; 
   --     Global Compact; 
   --     Climate Disclosure Standards Board ("CDSB"); 
   --     CDP (formerly known as Carbon Disclosure Project); 
   --     Global Reporting Initiative; 
   --     Sustainability Accounting Standards Board ("SASB"); 
   --     EU Sustainable Finance package of Regulations; 
   --     EU Guidelines on Non-Financial Reporting; and 
   --     UK Stewardship Code. 

This analysis identified over 500 indicators that could be considered. The Fund was mapped against the indicators and it was determined that over 200 of the indicators had either direct or indirect applicability to the Fund's investment activities. These indicators fell into the following categories:

 
Environmental    Social                Governance 
---------------  --------------------  --------------- 
Carbon           Diversity             Risk management 
Water            Skills                Policies and 
                                        procedures 
Natural capital  Health, safety 
                  and wellbeing 
Energy           Community engagement 
Other emissions  Employment and 
                  work practices 
Waste            Supply chain 
---------------  --------------------  --------------- 
 

The consultant hosted a workshop with the JLEN team to ascertain which of the indicators would be most relevant to the Fund and its stated ESG objectives and a longlist of indicators was developed following the workshop.

The JLEN team reviewed the longlist and narrowed it down by considering a range of factors, including the time and resources needed to track them versus the benefit of that particular metric to providing better oversight of the portfolio.

ENVIRONMENTAL

Objective: Promote the efficient use of resources

Environmental criteria are embedded in the structure of JLEN's investment and portfolio management activities. With its Investment Adviser, Foresight, JLEN considers the following key environmental criteria during due diligence of a potential acquisition and thereafter the ongoing monitoring of its assets:

   --     resource management; 
   --     life on land/below water; and 
   --     climate change and resilience. 

In order to inform its environmental objective, JLEN intends to consider the following environmental KPIs and associated measurements.

 
Environmental KPI                Measurement 
-------------------------------  ----------------------------------------------------------- 
Renewable energy generated 
                                   *    MWh renewable electricity 
 
 
                                   *    MWh renewable heat 
-------------------------------  ----------------------------------------------------------- 
GHG emissions avoided 
                                   *    tCO(2) e avoided for each investment 
-------------------------------  ----------------------------------------------------------- 
Waste treatment 
                                   *    (t) waste recycled 
 
 
                                   *    (t) waste diverted from landfill 
-------------------------------  ----------------------------------------------------------- 
Water treatment                   *    (l) wastewater treated 
 
-------------------------------  ----------------------------------------------------------- 
Environmental incidents 
                                   *    Reportable environmental incidents 
-------------------------------  ----------------------------------------------------------- 
Purchased energy originating 
 from renewable sources(1)         *    % of total purchased energy in the portfolio 
                                        originating from renewable sources 
-------------------------------  ----------------------------------------------------------- 
Management of biodiversity(1) 
                                   *    % of assets with biodiversity plans 
 
 
                                   *    number of assets engaged with on biodiversity issues 
-------------------------------  ----------------------------------------------------------- 
Assessment of major contractors 
 against ESG criteria(1)           *    % of major new and existing suppliers assessed 
                                        against environmental criteria 
-------------------------------  ----------------------------------------------------------- 
 
   (1)   New KPI for 2021. 

Impact

Figures for JLEN's 2020/21 environmental performance are set out on earlier in this report. In order to quantify some of the benefits being delivered by its portfolio, JLEN works with Aardvark Certification Ltd to undertake an independent, third-party assessment of the carbon impact of its assets. Individual reports for each asset, as well as a portfolio summary report, are published on the Fund's website.

This year JLEN has articulated three new KPIs, in addition to the four that have been reported since 2019, that the Investment Adviser will be monitoring on behalf of the Fund. JLEN considers that, in order to align with the goals of the Paris Agreement on Climate Change, its assets should be minimising the carbon footprint of their purchased energy. From 2021 JLEN will be monitoring the % of total purchased energy in its portfolio originating from renewable sources.

Biodiversity, or habitat management, plans have always been implemented as part of JLEN's asset management activities where required by planning, however the Investment Adviser recognises that more can be done to promote the protection and enhancement of life on land and below water. As such, JLEN will be monitoring the percentage of assets with biodiversity plans and will be engaging with assets on biodiversity issues, taking a more proactive approach to biodiversity enhancement.

Finally, a significant mechanism by which JLEN is able to influence environmental performance of the portfolio is through engagement with, and expectations of, service providers to the portfolio. From 2021, the Investment Adviser will step up that engagement to communicate the levels of environmental performance that are expected and over time as contracts are renewed it is anticipated that these standards will become more formal obligations.

Portfolio electricity and carbon performance(1)

In 2020/21, the wind, solar and hydro assets generated over 515.9 GWhe, which equates to the average annual electricity usage of over 138,000 households.

A summary of the greenhouse gas benefits delivered by the portfolio is provided in the table below.

 
                                 Greenhouse gas emissions reduction (tCO(2) 
                                                      e) 
                            ----------------------------------------------------- 
                                  Emissions     Average annual           Lifetime 
Asset portfolio by sector   avoided to date  emissions avoided  emissions avoided 
--------------------------  ---------------  -----------------  ----------------- 
Wind assets                         720,350            119,390          2,946,000 
Solar assets                        147,480             21,630            476,820 
AD assets                           314,460             50,350            998,130 
--------------------------  ---------------  -----------------  ----------------- 
 

(1) Greenhouse gas emissions calculations, household and car equivalents are aggregated from the Aardvark reports, accessed on JLEN's website.

JLEN's portfolio is forecast to deliver, per year >580,000 MWh electricity

And >345,000 MWh biomethane

And avoid emissions of >445,000 tCO(2) e avoided

Equivalent to >200,000 cars off the road

Case study

Bio-CNG

HGVs account for 1.3% of vehicles on the road yet produce 17% of transport emissions and are therefore a key sector for decarbonisation. CNG Foresight owns and operates CNG refuelling infrastructure and sources a 100% renewable biomethane product for dispensing at its stations. The associated biomethane is typically sourced from food waste or animal slurry and is independently verified and approved by the Department for Transport's Renewable Transport Fuel Obligation ("RTFO").

Biomethane can result in up to 84% reduction in well-to-wheel GHG emissions, and has low NOx and particulate emissions compared with diesel. Vehicles fuelled with biomethane are up to 50% quieter than diesel vehicles.

CNG Foresight currently has four public access CNG fuel stations, with three under construction and a further 10 planned. A number of private sector organisations use CNG Foresight stations to help reduce the impact of their HGV fleets, including companies like Waitrose and John Lewis Partnership.

Further information on this can be found at https://cngfuels.com/learn-more/

SOCIAL

Objective: Develop positive relationships with the communities in which JLEN works

The following social criteria are typically considered during due diligence and ongoing monitoring of assets:

   --     health and wellbeing; 
   --     local economic impact - job creation; 
   --     local social impact; and 
   --     community engagement and benefit. 

In order to inform its social objective, JLEN has identified a number of new indicators and metrics that it is starting to track. The Fund's investments are often situated in rural areas where there is potential for both community benefit as well as community disruption during construction and asset operation activities. This year, JLEN has started to formalise many of its existing community engagement processes so that each investment has a recognisable, consistent approach to relationship management which promotes visibility of engagement procedures and makes it simple for communities to find information and connect with the asset managers when they need to.

 
Social KPI                       Measurement 
-------------------------------  ---------------------------------------------------------- 
Community funding 
                                   *    GBP provided to community projects 
-------------------------------  ---------------------------------------------------------- 
Health and safety incidents 
                                   *    RIDDOR reportable accidents 
-------------------------------  ---------------------------------------------------------- 
Community engagement 
 procedures(1)                     *    % of assets with formal stakeholder/community 
                                        engagement policies and processes 
 
 
                                   *    % of assets with a clear, easily accessible 
                                        complaints handling mechanism in place 
-------------------------------  ---------------------------------------------------------- 
Jobs supported(1) 
                                   *    number of "full time equivalent" ("FTE") jobs 
                                        supported 
-------------------------------  ---------------------------------------------------------- 
Accessibility of community 
 fund documents(1)                 *    % of community funds that are easily accessible and 
                                        signposted for local communities 
-------------------------------  ---------------------------------------------------------- 
Assessment of major contractors 
 against ESG criteria(1)           *    % of major new and existing suppliers assessed 
                                        against social criteria 
-------------------------------  ---------------------------------------------------------- 
 
   (1)   New KPI for 2021. 

Skilled labour

Many of JLEN's assets are situated in rural areas, providing vital skilled roles in smaller rural communities. A strong base of qualified engineers is required in order to run the Fund's environmental assets in the long term and to support increased capacity for environmental assets, both in the UK and abroad. As a specialist investor into environmental assets, JLEN is committed to ensuring that those assets are managed and maintained by skilled teams.

In order to support this, JLEN has identified a new KPI to gain a better understanding of the number of jobs directly supported by the investment portfolio through its third-party asset managers and other major contractors.

Community relationships

This year JLEN has developed new KPIs related to developing positive relationships with the communities in which it works. These KPIs relate to engagement procedures - ensuring that clear, formal stakeholder engagement processes are in place for each investment. If problems do arise during construction and operation of the projects that impact the local community, JLEN is committed to ensuring that local communities have access to a clear, easily accessible complaints handling mechanism so that complaints can be addressed as soon as possible.

Most of JLEN's assets have a community fund associated with them. Some of these are triggered by planning conditions, while others have been put in place by JLEN in order to drive good practice in community engagement. Community funds are often managed by local bodies such as parish councils, with funds allocated to projects designed to benefit the local community - with a preference for projects which promote sustainability.

This year JLEN has been working to make information about these community funds more accessible, and this work is continuing over the coming year. Further information on how this is being achieved is described later in this section.

Covid-19 has hit communities hard, making support from local community funds even more important than we have seen in previous years. This year, JLEN's assets responded in a range of ways to the pandemic, including:

   --     tailoring grant support to help those directly impacted by Covid-19; 

-- increasing the amount that could be awarded for individual projects to achieve higher impact; and

-- directing funds to support the ongoing existence of local sports clubs to ensure their continued existence.

Projects supported by JLEN's community funds include:

-- ongoing support for a local village shop including maintenance and refurbishment of the facility to provide a vital service for a rural community;

-- supporting interpretation signage, accessible paths, outdoor furniture and other resources in a local community woodland;

   --     purchase of a community woodland; 
   --     purchase of sports equipment and play equipment for local communities and schools; 

-- purchase of equipment to reduce incidents of rural crime and associated damage to farmland, livestock and wildlife;

   --     support to Scout and Girl Guide groups; and 
   --     a memorial for RAF servicemen. 

Case studies

Making information more accessible

https://www.biogasmeden.com/

Contribution to ESG indicators:

   --     community engagement procedures; and 
   --     accessibility of community fund documents. 

In order to support JLEN's stated objective of developing positive relationships with the communities in which JLEN operates, this year a number of changes have been made to increase the availability of information online and to make it easier for communities to contact the asset managers to address questions or concerns. So far, JLEN's AD portfolio now has a series of project websites that local communities can view to see more about the project itself as well as contact details and information on available community funding.

Next steps

JLEN is working to ensure that each project has an online presence to help it connect with the local community. JLEN intends to host information about each of these projects centrally through its own website, making it easier for communities to access grievance procedures, contact the asset managers and apply for community funding for local projects.

Mawnan Parish/Higher Tregarne Solar Grant Fund

The Higher Tregarne solar plant contributes an annual sum to the Mawnan Parish community fund. Due to Covid-19, the Higher Tregarne Solar Grant Fund received minimal grant applications prior to autumn 2020, resulting in larger grants being allocated which will deliver larger community benefit.

The two main projects supported in 2020/21 were:

Clean Ocean Sailing

GBP5,000

Clearing an area of the Upper Helford River of non--organic abandoned boats such as kayaks and tenders. All of the retrieved boats will be recycled in Newham in Truro. This grant achieved match funding, allowing new marine-based signage, information boards, CCTV and monitoring to be installed to prevent future problems arising.

New play equipment

GBP6,580

Replacement of ageing play equipment with a bespoke piece designed by a local company and consulted on with parents, the local school, Brownies and other younger users. The Parish will provide additional funds separately to provide new fencing, and mending and restoring gates and surfaces.

ENVIRONMENTAL AND HEALTH AND SAFETY INCIDENTS

JLEN takes its environmental and health and safety responsibilities very seriously and seeks to ensure effective management of these issues in both its own operations and in its investment portfolio. JLEN aims to manage risks and incidents in a fair and transparent manner with appropriate action to reduce risk wherever possible.

This report identifies the material environmental and health and safety incidents in the JLEN portfolio in 2020/21.

Reportable environmental and health and safety incidents

 
                          2020/21 
------------------------  ------- 
H&S incidents                   3 
Environmental incidents         1 
------------------------  ------- 
 

The following reportable incidents were recorded for JLEN's portfolio during 2020/21:

   --     waste plant reportable injuries: 
   --     a sub-contractor tripped while on site and sustained broken bones to his hand; 
   --     an operator fell, resulting in a swollen knee and requiring a short period off work; and 

-- during a delivery, a piece of equipment fell from the delivery vehicle onto an operative's foot, resulting in broken bones.

   --     AD plant environmental incident: 

-- a small digestate spillage was recorded and reported to the Environment Agency. The operator took immediate steps to clean up the spillage and undertook a root cause analysis to prevent it from occurring again.

In July 2019, a member of the public accessed the site at Kirkthorpe Hydro (a site included in the Company's Yorkshire Hydropower portfolio), having crossed the adjacent weir from land on the far side of the river. Once on site, the individual circumvented safety features and barriers associated with an outlet pool and then slipped and tragically drowned. A Coroner's Inquest in April 2021 reached the conclusion of "death by misadventure". The JLEN Board would like to take this opportunity to express its deepest sympathy to the family of the deceased and confirms its support of the actions being taken by the management of Yorkshire Hydropower to minimise the risk of further unauthorised access and to prevent further accidents being suffered by members of the public.

Health, safety and environmental incident recording and reporting

Third-party asset managers are responsible for the day--to--day management of HSE issues and are required to report incidents to Foresight, which are recorded through their portfolio management software. Depending on the requirement, the software can deliver either a high degree of granularity on individual assets or an aggregated snapshot of the portfolio's performance as a whole. This allows the Investment Adviser to monitor and report individual asset performance as well as sector and portfolio level performance to a range of internal stakeholders.

Foresight periodically contracts third parties to conduct comprehensive audits of each site. This serves both to encourage best possible working practices and acts as a means of highlighting areas for development. Foresight staff also perform spot auditing and reporting functions on selected assets on an ongoing basis. Any recommendations from the audits are allocated to the Investment Adviser's asset management team, which then becomes responsible for ensuring the recommendations are actioned as necessary. These tasks are tracked through Foresight's portfolio management software and monitored to ensure they have been resolved in a timely manner. All audit results, shortfalls and recommendations are included on the agenda of the asset's board meetings.

GOVERNANCE

Objective: Ensure effective, ethical governance across the portfolio

Good governance is essential for JLEN's portfolio to achieve its targeted returns.

JLEN holds Board positions for each of its assets, which are fulfilled by Foresight on its behalf. The Board members work to promote good governance as part of the Fund's active engagement with projects.

JLEN typically considers the following governance criteria during due diligence and ongoing monitoring of assets:

   --     anti-bribery and corruption; 
   --     modern slavery; 
   --     audit and tax practices; and 
   --     Board composition. 

In order to inform its governance objective, JLEN is formalising the reporting of a number of governance indicators and has added some further indicators to help promote improved performance over time.

 
Governance KPI                   Measurement 
-------------------------------  ------------------------------------------------------------ 
Portfolio audits of health        *    % of assets audited 
 and safety practices 
-------------------------------  ------------------------------------------------------------ 
Portfolio audits of tax           *    % of assets audited 
 and financial practices(1) 
-------------------------------  ------------------------------------------------------------ 
Diversity of SPV directors(1) 
                                   *    Female board members/directors as a % of total board 
                                        members, per investment 
-------------------------------  ------------------------------------------------------------ 
Inclusion of ESG in SPV 
 board agendas(1)                  *    % of assets with ESG embedded into board agendas 
-------------------------------  ------------------------------------------------------------ 
Governance oversight(1) 
                                   *    % of assets which comply with a governance policy and 
                                        associated documents, that are reviewed on a periodic 
                                        basis 
-------------------------------  ------------------------------------------------------------ 
Assessment of major contractors 
 against ESG criteria(1)           *    % of major new and existing suppliers assessed 
                                        against governance criteria 
-------------------------------  ------------------------------------------------------------ 
 
   (1)   New KPI for 2021. 

Diversity of SPV directors

JLEN recognises that lack of gender diversity is a known issue in the financial services industry. In order to drive progress and increase gender diversity, JLEN will be tracking gender diversity of SPV directors across all of its investments with the intention of proactively increasing the proportion of female board members over time.

Inclusion of ESG in SPV board agendas

While HSE reporting has been formally included in all board agendas for some time, and wider ESG issues have been regularly included, this has largely been driven by incident reporting and has therefore been principally a reactive mechanism. In order to support its stated ESG objectives, JLEN is now mandating that all board agendas routinely include discussions around ESG matters across each of its investments as a way to drive proactive approaches to ESG going forward.

Modern slavery and human trafficking

As part of Foresight Group, JLEN's policy and practices in relation to modern slavery and human trafficking are included in the Group's Modern Slavery Act statement. The statement sets out Foresight's approach to matters such as services and supply chain due diligence and training of employees, recruitment and welfare.

Case studies

Engaging on ESG with contractors

Many of JLEN's assets are managed by third parties. As a result, in order to deliver on its ESG commitments, JLEN's Investment Adviser needs to work closely with its third-party asset managers. During the KPI workshop held this year JLEN identified a need to formally engage with asset managers on ESG performance and has drafted a letter, to be sent to existing managers, which sets out JLEN's commitments and expectations with regard to management of ESG performance across its investments.

The letter formalises existing approaches taken by JLEN and its third-party asset managers. It identifies key metrics that the Investment Adviser requires its asset managers to consider and report on going forward, including the frequency of reporting. These include:

   --     environmental metrics: 
   --     reporting approaches to management of biodiversity and actions taken over the period; and 
   --     reporting purchase and usage of renewable energy. 
   --     social metrics: 

-- providing copies of diversity and equality policies and community engagement policies and reviewing annually;

-- providing information on procedures and website links and reporting complaints immediately; and

-- reporting the number of full time equivalent jobs supported and number of part-time roles supported.

   --     governance metrics: 

-- providing copies of health and safety, sustainability, whistleblowing, modern slavery, Bribery Act and anti-money laundering policies and reviewing annually; and

   --     reporting breaches of regulations and permits as part of standard reporting packs. 

In addition to the above metrics, the letter also sets out a number of "desirable behaviours" including, but not limited to, commitments to Living Wage, Working Time Regulations, employment of local contractors, reduction of fuel use, recycling and waste management efforts, reduction of water use and reduction of herbicide use.

This letter is being issued to third-party asset managers over the 2021/22 financial year and will promote engagement on ESG issues across JLEN's investments.

CORPORATE SOCIAL RESPONSIBILITY

While JLEN does not have direct employees, it does have a corporate culture which is guided by JLEN's Board of Directors and the Investment Adviser, Foresight. As Investment Adviser to JLEN, Foresight believes an engaged and empowered workforce supports the Company's purpose. Foresight seeks to co-ordinate and manage its corporate practices to maximise positive social and economic contributions and minimise the environmental impact of its business operations. The JLEN Board and Foresight typically meet informally on a weekly basis and this ensures good communication between these two key stakeholders. Engagement with key clients, employees, community, environmental stakeholders, regulators, business partners and suppliers is central to Foresight's approach.

Foresight divides its commitment to CSR into four segments:

   1.   marketplace - how they work with their customers and counterparties; 
   2.   workplace - where they work, how they recruit and how they work with their staff; 
   3.   environment - how they reduce their environmental impact; and 
   4.   community - how they engage with the community. 

Raising money for charity during lockdown

Foresight supports Beam, a charity that crowdfunds new career opportunities for homeless men and women. The charity provides them with a support network, from support specialists to funding. Foresight Group has supported Beam since February 2019 and in that time has supported 113 people. You can read more about the people that Foresight has supported here: https://beam.org/foresightgroup

Over the last year, fundraising for Beam has been harder than usual due to Covid-19 restrictions. Last May, Foresight undertook the Most Miles in May Challenge, challenging staff to build teams and use their daily exercise to run or cycle the most miles to win a small cash prize. Each person paid an entry fee directly to Beam in order to participate. The decision was taken to exclude miles undertaken on running machines, turbo trainers and other indoor equipment as a way to make the competition more fair, more fun, and to help staff to take their daily exercise outdoors instead of indoors.

By the end of the month the 15 teams competing had walked or cycled close to 15,000 miles and raised over GBP1,000 for Beam.

Charitable giving days

In 2019, Foresight launched an initiative that means employees can use a working day to volunteer for their chosen charity. They encourage all employees to utilise this day to give back to their communities and give their time to causes that are close to their heart.

This year, Jen, Institutional Investor Relations Associate in the JLEN team, used her charitable giving day to search for a missing man with London Search and Rescue.

FINANCIAL REVIEW

Analysis of financial results

The financial statements of the Company for the year ended 31 March 2021 are found later in this report.

The Company prepared the financial statements for the year ended 31 March 2021 in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and IFRS as issued by the International Accounting Standards Board. In order to continue providing useful and relevant information to its investors, the financial statements also refer to the "Group", which comprises the Company, its wholly owned subsidiary (JLEN Environmental Assets Group (UK) Limited ("UK HoldCo")) and the indirectly held wholly owned subsidiary HWT Limited (which holds the investment interest in the Tay project).

Basis of accounting

The Company applies IFRS 10 and Investment Entities: Amendments to IFRS 10, IFRS 12 and IAS 28, which states that investment entities should measure all their subsidiaries that are themselves investment entities at fair value. The Company accounts for its interest in its wholly owned direct subsidiary JLEN Environmental Assets Group (UK) Limited as an investment at fair value through profit or loss.

The primary impact of this application, in comparison to consolidating subsidiaries, is that the cash balances, the working capital balances and borrowings in the intermediate holding companies are presented as part of the Company's fair value of investments.

The Company's intermediate holding companies provide services that relate to the Company's investment activities on behalf of the parent which are incidental to the management of the portfolio. These companies are recognised in the financial statements at their fair value, which is equivalent to their net assets.

The Group holds investments in the 36 portfolio assets which make distributions comprising returns on investments (interest on loans and dividends on equity) together with repayments of investments (loan repayments and equity redemptions).

Results for the year ended 31 March 2021

 
                                                                   Year ended  Year ended 
                                                                       31 Mar      31 Mar 
All amounts presented in GBPmillion (except as noted)                    2021        2020 
-----------------------------------------------------------------  ----------  ---------- 
Net assets(1)                                                           504.2       533.0 
Portfolio value(2)                                                      571.4       537.1 
Operating income and gains/(losses) on fair value of investments         14.8       (4.2) 
Net assets per share                                                    92.2p       97.5p 
Distributions, repayments and fees from portfolio                        48.2        45.0 
Profit/(loss) before tax                                                  8.1      (10.7) 
-----------------------------------------------------------------  ----------  ---------- 
 
   (1)   Also referred to as Net Asset Value or "NAV". 

(2) Classified as investments at fair value through profit or loss on the statement of financial position.

Net assets

Net assets decreased from GBP533.0 million at 31 March 2020 to GBP504.2 million at 31 March 2021, primarily driven by the effect of the long-term power price forecast and increase of the long-term corporation tax rate on the portfolio value.

The net assets of GBP504.2 million comprise GBP571.4 million portfolio value of environmental infrastructure investments and the Company's cash balances of GBP1.9 million, partially offset by GBP67.3 million of intermediate holding companies' net liabilities and other net liabilities of GBP1.8 million.

The intermediate holding companies' net liabilities of GBP67.3 million comprises an GBP82.0 million credit facility loan, partially offset by cash balances of GBP11.6 million and other net assets of GBP3.1 million.

Analysis of the Group's net assets at 31 March 2021

 
                                                              At 31 Mar    At 31 Mar 
All amounts presented in GBPmillion (except as noted)              2021         2020 
----------------------------------------------------------  -----------  ----------- 
Portfolio value                                                   571.4        537.1 
Intermediate holding companies' cash                               11.6         20.2 
Intermediate holding companies' revolving credit facility        (82.0)       (29.3) 
Intermediate holding companies' other assets                        3.1          4.9 
----------------------------------------------------------  -----------  ----------- 
Fair value of the Company's investment in UK HoldCo               504.1        532.9 
----------------------------------------------------------  -----------  ----------- 
Company's cash                                                      1.9          1.8 
Company's other liabilities                                       (1.8)        (1.7) 
----------------------------------------------------------  -----------  ----------- 
Net Asset Value at 31 March                                       504.2        533.0 
----------------------------------------------------------  -----------  ----------- 
Number of shares                                            546,720,025  546,720,025 
Net Asset Value per share                                         92.2p        97.5p 
----------------------------------------------------------  -----------  ----------- 
 

At 31 March 2021, the Group (the Company plus intermediate holding companies) had a total cash balance of GBP13.5 million (31 March 2020: GBP22.0 million), including GBP1.9 million in the Company's balance sheet (31 March 2020: GBP1.8 million) and GBP11.6 million in the intermediate holding companies (31 March 2020: GBP20.2 million), which is included in the Company's balance sheet within "investments at fair value through profit or loss".

At 31 March 2021, UK HoldCo had drawn GBP82.0 million of its revolving credit facility (31 March 2020: GBP29.3 million), which is included in the Company's balance sheet within "investments at fair value through profit or loss".

The movement in the portfolio value from 31 March 2020 to 31 March 2021 is summarised as follows:

 
                                                                                  Year ended  Year ended 
                                                                                      31 Mar      31 Mar 
--------------------------------------------------------------------------------  ----------  ---------- 
All amounts presented in GBPmillion (except as noted)                                   2021        2020 
Portfolio value at start of the year                                                   537.1       523.6 
Acquisitions and further investment (net of post-acquisition price adjustments)         62.9        57.9 
Distributions received from investments                                               (48.2)      (45.0) 
Growth in value of portfolio                                                            19.6         0.6 
--------------------------------------------------------------------------------  ----------  ---------- 
Portfolio value at 31 March                                                            571.4       537.1 
--------------------------------------------------------------------------------  ----------  ---------- 
 

Income

The Company's profit before tax for the year ended 31 March 2021 is GBP8.1 million, generating earnings of 1.5 pence per share.

 
                                                                   Year ended  Year ended 
                                                                       31 Mar      31 Mar 
-----------------------------------------------------------------  ----------  ---------- 
All amounts presented in GBPmillion (except as noted)                    2021        2020 
Interest received on UK HoldCo loan notes                                28.7        28.7 
Dividend received from UK HoldCo                                         14.9        10.6 
Net losses on investments at fair value                                (28.8)      (43.5) 
-----------------------------------------------------------------  ----------  ---------- 
Operating income and gains/(losses) on fair value of investments         14.8       (4.2) 
-----------------------------------------------------------------  ----------  ---------- 
Operating expenses                                                      (6.7)       (6.5) 
-----------------------------------------------------------------  ----------  ---------- 
Profit/(loss) before tax                                                  8.1      (10.7) 
-----------------------------------------------------------------  ----------  ---------- 
Earnings/(loss) per share                                                1.5p      (2.1)p 
-----------------------------------------------------------------  ----------  ---------- 
 

In the year to 31 March 2021, the operating income and gains/(losses) on fair value of investments was GBP14.8 million, including the receipt of GBP28.7 million of interest on the UK HoldCo loan notes, GBP14.9 million of dividends also received from UK HoldCo and net losses incurred on investments at fair value of GBP28.8 million.

The operating expenses included in the income statement for the year were GBP6.7 million, in line with expectations. These comprise GBP5.6 million Investment Adviser fees and GBP1.0 million operating expenses. The details on how the Investment Adviser fees are charged are as set out in note 15 to the financial statements.

Ongoing charges

The "ongoing charges" ratio is an indicator of the costs incurred in the day--to--day management of the Fund. JLEN uses the AIC-recommended methodology for calculating this ratio, which is an annual figure.

The ongoing charges percentage for the year to 31 March 2021 was 1.24% (year ended 31 March 2020: 1.22%). The ongoing charges have been calculated, in accordance with AIC guidance, as annualised ongoing charges (i.e. excluding acquisition costs and other non--recurring items) divided by the average published undiluted Net Asset Value in the period. The ongoing charges percentage has been calculated on the consolidated basis and therefore takes into consideration the expenses of UK HoldCo as well as the Company. Adjusting for the impact of the drawdown amount under the revolving credit facility, the ongoing charges ratio would have been 1.13% (31 March 2020: 1.14%). Foresight believes this to be competitive for the market in which JLEN operates and the stage of development and size of the Fund, demonstrating that management of the Fund is efficient with minimal expenses incurred in its ordinary operation.

Cash flow

The Company had a total cash balance at 31 March 2021 of GBP1.9 million (31 March 2020: GBP1.8 million). The breakdown of the movements in cash during the year is shown below.

Cash flows of the Company for the year (GBPmillion):

 
                                                                 Year ended  Year ended 
                                                                     31 Mar      31 Mar 
                                                                       2021        2020 
---------------------------------------------------------------  ----------  ---------- 
Cash balance at 1 April                                                 1.8         1.9 
(Expenses from previous issues)/net proceeds from share issues        (0.2)        56.4 
Investment in UK HoldCo (equity and loan notes)                         0.0      (56.4) 
Interest on loan notes received from UK HoldCo                         28.7        28.7 
Dividends received from UK HoldCo                                      14.9        10.6 
Directors' fees and expenses                                          (0.3)       (0.3) 
Investment Adviser fees                                               (5.5)       (5.5) 
Administrative expenses                                               (0.7)       (0.7) 
Dividends paid in cash to shareholders                               (36.8)      (32.9) 
---------------------------------------------------------------  ----------  ---------- 
Company cash balance at 31 March                                        1.9         1.8 
---------------------------------------------------------------  ----------  ---------- 
 

The Group had a total cash balance at 31 March 2021 of GBP13.5 million (31 March 2020: GBP22.0 million) and borrowings under the revolving credit facility of GBP82.0 million (31 March 2020: GBP29.3 million). The breakdown of the movements in cash during the year is shown below.

Cash flows of the Group for the year (GBPmillion):

 
                                                                   Year ended  Year ended 
                                                                       31 Mar      31 Mar 
                                                                         2021        2020 
-----------------------------------------------------------------  ----------  ---------- 
Cash distributions from environmental infrastructure investments         48.2        45.0 
Administrative expenses                                                 (1.1)       (1.0) 
Directors' fees and expenses                                            (0.3)       (0.3) 
Investment Adviser fees                                                 (5.5)       (5.5) 
Financing costs (net of interest income)                                (1.8)       (2.0) 
-----------------------------------------------------------------  ----------  ---------- 
Cash flow from operations                                                39.5        36.2 
(Expenses from previous issues)/net proceeds from share issues          (0.2)        56.4 
Acquisition of investment assets and further investment                (63.0)      (61.0) 
Post-acquisition price adjustment                                           -         2.4 
Acquisition costs (including stamp duty)                                (1.4)       (2.4) 
Debt arrangement fee cost                                                   -       (0.8) 
Short-term projects debtors                                               0.4           - 
Drawdowns from borrowings under the revolving credit facility            53.0        12.7 
Dividends paid in cash to shareholders                                 (36.8)      (32.9) 
-----------------------------------------------------------------  ----------  ---------- 
Cash movement in the year                                               (8.5)        10.6 
Opening cash balance                                                     22.0        11.4 
-----------------------------------------------------------------  ----------  ---------- 
Group cash balance at 31 March                                           13.5        22.0 
-----------------------------------------------------------------  ----------  ---------- 
 

During the year, the Group received cash distributions of GBP48.2 million from its environmental infrastructure investments, an increase of 7.1% compared to 2020.

Cash received from investments in the year covers the operating and administrative expenses and financing costs, as well as the dividends declared to shareholders in respect of the year ended 31 March 2021. Cash flow from operations of the Group of GBP39.5 million covers dividends paid in the year to 31 March 2021 of GBP36.8 million by 1.07x. The dividend cover based on dividends declared in respect of the year to 31 March 2021 was 1.07x.

The Group anticipates that future revenues from its environmental infrastructure investments will continue to be in line with expectations and therefore will continue to cover fully future costs as well as planned dividends payable to its shareholders.(1)

Dividends

During the year, the Company paid a final dividend of 1.665 pence per share in June 2020 (GBP9.1 million) in respect of the quarter to 31 March 2020.

Interim dividends of 1.69 pence per share were paid in September 2020 (GBP9.2 million) in respect of the quarter to 30 June 2020, of 1.69 pence per share in December 2020 (GBP9.2 million) in respect of the quarter to 30 September 2020, and of 1.69 pence per share in March 2021 (GBP9.2 million) in respect of the quarter to 31 December 2020. On 30 April 2021, the Company declared a final dividend of 1.69 pence per share in respect of the quarter ended 31 March 2021 (GBP10.2 million), which is payable on 25 June 2021.

The target dividend for the year to 31 March 2022 is 6.8 pence per share, a 0.6% increase from the dividend declared in respect of the year to 31 March 2021.(1)

(1) These are targets only and not profit forecasts. There can be no assurance that these targets will be met.

GOVERNANCE

CHAIRMAN'S INTRODUCTION

The Board recognises the importance of a strong corporate governance culture and has put in place a framework for corporate governance that reflects the scale, nature and complexity of the Company and its operations.

Introduction

The Listing Rules and the Disclosure Guidance and Transparency Rules ("Disclosure Rules") of the FCA require listed companies to disclose how they have applied the principles and complied with the provisions of the Corporate Governance Code to which the issuer is subject. The provisions of the UK Corporate Governance Code ("UK Code"), as issued by the Financial Reporting Council ("FRC") in July 2018, are applicable to the year under review and can be viewed at www.frc.org.uk.

The related Code of Corporate Governance (the "AIC Code"), issued by the Association of Investment Companies ("AIC") provides specific corporate governance guidelines to investment companies. The AIC issued their revised code for member companies in February 2019 and this applies to accounting periods beginning on or after 1 January 2019. The FRC has confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the UK Code and the associated disclosure requirements of the Disclosure Rules. The AIC Code can be viewed at www.theaic.co.uk.

The Guernsey Financial Services Commission ("GFSC") has issued a Finance Sector Code of Corporate Governance. The Code comprises Principles and Guidance and provides a formal expression of good corporate practice against which shareholders, boards and the GFSC can better assess the governance exercised over companies in Guernsey's finance sector. Companies which report against the UK Code or the AIC Code are also deemed to meet the Guernsey Code.

Statement of compliance with the AIC Code and Guide

The Board recognises the importance of a strong corporate governance culture that meets the Listing Rules of the FCA. The Board has put in place a framework for corporate governance that reflects the scale, nature and complexity of the Company and its operations. All Directors contribute in a meaningful way to Board discussions and debates. The Board believes in providing as much transparency on the Company's activities for shareholders as is reasonably possible. It should be noted that most of the Company's day--to--day responsibilities are delegated to third parties and the Company has no employees.

The Company is a member of the AIC and is classified within the renewable energy infrastructure sector. The Company currently complies (except as set out in the next paragraph) with the principles and provisions of good governance contained in the AIC Code (which complements the UK Code and provides a framework of best practice for listed investment companies) and in accordance with the AIC Code, the Company will be meeting its obligations in relation to the UK Code and associated disclosure requirements of the Listing Rules.

The UK Code includes provisions relating to the role of the Chief Executive, executive Directors' remuneration and the need for an internal audit function. The Board considers these provisions are not relevant to the position of the Company, as all of the Company's day-to-day management and administrative functions are outsourced to third parties and it has no executive Directors, employees or internal operations. Therefore, no further reporting has been provided in respect of these provisions.

The functions which would typically be carried out by a management engagement committee are performed by the Company's investment advisory engagement committee (comprising all Directors), and the Board has not considered it necessary to appoint a separate remuneration committee.

BOARD OF DIRECTORS

Members of JLEN's Board of Directors, all of whom are non-executive and independent of the Investment Adviser, are listed below.

Richard Morse

Chairman

Richard has more than 33 years' experience in energy and infrastructure, including environmental energy. He is a partner at Opus Corporate Finance, where he is a leader in the environmental energy practice. His current boardroom experience includes Bazalgette Tunnel Limited (Deputy Chairman and Chairman of the Audit & Treasury Committee), Woodard Corporation (Chairman), and Heathrow Southern Railway Limited (non--executive director).

Past experience

Richard trained as an investment banker, becoming Deputy Head of Corporate Finance and head of the utilities and energy team at Dresdner Kleinwort Wasserstein, before taking up senior roles in the energy and utilities practices at Goldman Sachs and Greenhill International, and a Senior Adviser role at Matrix Corporate Capital.

Committee memberships

NC chair

Richard Ramsay

Senior Independent Director

Richard is a chartered accountant with considerable experience of the energy sector and the closed-end fund industry. He is currently Chairman of Momentum Multi Asset Value Trust plc, an investment trust.

Past experience

Richard's previous energy sector experience includes: leading the Barclays de Zoete Wedd team that privatised the Scottish electricity industry; a period at Ofgem as Managing Director Finance and Regulation; working as director of the Shareholder Executive, principally involved with government businesses in the nuclear sector, and chairman of Northcourt Ltd, a provider globally of nuclear insurance. At Ivory & Sime, Barclays de Zoete Wedd and latterly at Intelli Corporate Finance, he has worked as a corporate adviser in the closed-end funds sector, completing over GBP2.5 billion of transactions. He has also previously been a director of two investment trusts and one venture capital trust.

Committee memberships

AC

Stephanie Coxon

Director

Stephanie has 15 years' experience within audit and advisory with PwC in the asset management sector, specialising in listed investment funds in a multitude of asset classes. She has a wealth of knowledge, having advised numerous investment managers throughout the UK, US and Europe on initial public offerings and secondary offerings. Stephanie is a fellow of the Institute of Chartered Accountants in England and Wales. Stephanie is a director of Apax Global Alpha Limited, PPHE Hotels Group Limited and PraxisIFM Group Limited.

Past experience

Prior to joining the JLEN Board and over the past nine years, Stephanie led the PwC capital markets team responsible for advising on the listing process for UK, Guernsey and Jersey investment funds.

Committee memberships

AC, RC

Peter Neville

Director

Peter has more than 36 years' experience in the financial services and financial services regulatory sectors in the UK and overseas, including as Director General of the Guernsey Financial Services Commission from 2001 until 2009.

Past experience

Peter's boardroom experience has included the Chairmanship of Kleinwort Benson (Channel Islands) Limited. He has worked in merchant banking and corporate finance in the UK and the Far East, mainly within the HSBC group. At Malta's financial services regulator, he established the Maltese regulatory regime for funds and investment management firms. He currently holds a number of non-executive directorships, including on the Board of Network Rail Insurance Limited. Peter is a Fellow of the Institute of Chartered Accountants in England and Wales.

Committee memberships

AC chair, NC, RC

Hans Joern Rieks

Director

Hans has over 25 years' experience within the global wind industry and has previously worked for Siemens Gamesa and Vestas Central Europe. He is highly regarded in the energy sector and has successfully led growth agendas and international strategies. An engineer by background, Hans has a strong technical grounding and excellent operational experience of how to manage the constantly evolving renewables landscape.

Past experience

Hans formerly led the Siemens wind business in EMEA, crafting and implementing a growth strategy, as well as being directly involved in the merger with Gamesa. Prior to this, he was President and CEO of Vestas Central Europe and member of the Group Management of Vestas Wind Systems A/S.

Committee memberships

RC chair, NC

Alan Bates

Director (with effect from 10 June 2021)

Alan has over 30 years' experience in the energy and infrastructure sectors including electricity, gas and water utilities. He has extensive experience in infrastructure operations and has excellent strategic and commercial skills. He has developed a broad understanding of the dynamics behind the energy transition and has assisted the Government of Guernsey in developing its energy policy. Alan has been the CEO of Guernsey Electricity since 2010 and is a Director of the Channel Islands Electricity Grid.

Alan is a Chartered Engineer, Fellow of the Institute of Mechanical Engineers and a Member of the Institute of Engineering Technology.

Past experience

Alan commenced his career with P&O and Princess Cruises as a Marine Engineering Officer, followed by 19 years in the oil and gas industry working for Mobil Oil/BP Oil and then International Energy Group before becoming the Managing Director of Manx Gas in the Isle of Man.

Jo Harrison

Director (with effect from 10 June 2021)

Jo has over 20 years' experience working in the water industry and is the Director of Environment, Planning and Innovation at United Utilities, where she is accountable for leading the approach to environmental and long-term planning; including developing and strengthening the approach to all aspects of the environment, climate change and carbon, asset management, risk and resilience. Jo is a chartered member of the Institute of Water and Environmental Managers and is a Chartered Environmentalist. Jo is also a trustee of the Community Forest Trust and a trustee of the Rivers Trust.

Past experience

Jo has worked for United Utilities since 1998 and has a BSc in Geography and Ecology from the University of Sheffield and an MSc in Pollution and Environmental Control from Manchester University.

GOVERNANCE AT A GLANCE

The corporate governance and Board structure is outlined below.

Corporate governance framework

 
Chairman 
 Richard Morse 
------------------------------------------------------------------------------------------- 
Directors                     Investment Adviser 
  *    Stephanie Coxon          *    Foresight Group led by Chris Holmes and Chris Tanner 
                                     as co-lead Investment Advisers 
 
  *    Hans Rieks 
 
 
  *    Peter Neville 
 
 
  *    Richard Ramsay 
----------------------------  ------------------------------------------------------------- 
Audit Committee               Risk Committee                Nomination Committee 
  *    Peter Neville (Chair)    *    Hans Rieks (Chair)       *    Richard Morse (Chair) 
 
 
  *    Stephanie Coxon          *    Stephanie Coxon          *    Peter Neville 
 
 
  *    Richard Ramsay           *    Peter Neville            *    Hans Rieks 
----------------------------  ----------------------------  ------------------------------- 
 

Board structure as at 31 March 2021

Board tenure

0-5 years = 2

6-8 years = 3

Board composition

Chairman = 1

Senior Independent Director = 1

Directors = 3

Gender diversity

Male = 4

Female = 1

Board structure as at 10 June 2021

Board tenure

0-5 years = 4

6-8 years = 3

Board composition

Chairman = 1

Senior Independent Director = 1

Directors = 5

Gender diversity

Male = 5

Female = 2

Board activities in 2021

Strategy

Review of the Company's investment policy and changes proposed to shareholders allowing the Company to access a wider pool of environmental infrastructure investments, both by sub-sector and geography, approved in March 2021.

Evolution of the Company's power price forecasting methodology with the addition of a third market consultant into the Company's blended curve.

Renewal of the Company's revolving credit facility for a further three years from May 2021, with total funds available to JLEN of GBP170 million on a fully committed basis and additional GBP30 million uncommitted accordion, and incorporating clear ESG targets that change the cost of funds by +/- 5 basis points depending on performance.

Ongoing assessment of the appropriateness of overseas markets and opportunities to gain exposure through co-investment with other Foresight-managed products.

Governance

Comprehensive review of Board succession plan and roadmap for orderly succession, including diversity objectives, in the context of the expected future leadership needs of the Company.

Monitoring the integration of the investment advisory team into the Foresight Group, particularly any changes to the Group's internal control environment, and overseeing the implementation of an independent internal controls assurance programme.

In-depth review of the performance and contractual relationship with all key service providers, ensuring their duties remain aligned with the objectives of the Company and that each remained adequately incentivised to perform their duties to a high standard.

Risk management

Careful monitoring of the impact to the Company's ability to maintain its target dividend as the effect to distributions from projects continued to be affected by market electricity prices.

Thorough assessment of changes to portfolio risk anticipated from the Company's entry into new sub-sectors or geographies, particularly in the case of the CNG refuelling stations and battery storage assets.

Operational

Achieving material cost reductions from a restructuring of the technical asset management contracts for substantially all of the wind portfolio.

Strong progress made with the Group's value enhancement programme, particularly increasing the throughput for the Vulcan AD plant following the successful completion of the second expansion project.

Several projects designed to mitigate project cash flow variability and achieve operational synergies, including alternate feedstock supply and digestate disposal arrangements.

BOARD LEADERSHIP AND COMPANY PURPOSE

The Board places a high degree of importance on ensuring that high standards of corporate governance are maintained throughout the Group.

Duties and responsibilities

The Board meets at least four times a year and, should the nature of the activity of the Company require it, additional meetings may be scheduled, some at short notice. Between meetings there is regular contact with the Investment Adviser and the Administrator and the Board requires information to be supplied in a timely manner by the Investment Adviser, the Company Secretary and other advisers in a form and of a quality appropriate to enable it to discharge its duties, and in a timely manner to enable full and proper consideration to be given to the relevant issues.

The Board has overall responsibility for the management of the Company's affairs. The Board has adopted a set of reserved powers which set out the particular areas where the Board wishes to retain control. Such reserved powers include decisions relating to the determination of investment policy and approval of investments, strategy, capital raising, statutory obligations and public disclosure, financial reporting, entering into any material contracts by the Company and overseeing the Company's sustainability strategy.

The Board actively promotes a culture of openness, constructive challenge and debate in the boardroom, underpinned by robust internal controls and governance frameworks. Assessment of the personality types of Board Directors and their cognitive and interpersonal skills forms part of the Board's consideration of the expected future leadership needs of the Company. In considering these needs, the Board seeks to ensure that the practices and behaviour throughout the Company's operations remain aligned with the Company's purpose, values and strategy. No corrective actions were taken during the year in response to matters arising which did not meet the Board's expected standards.

An Investment Advisory Agreement between the Company and the Investment Adviser sets out the matters over which the Investment Adviser has delegated authority, including monitoring and managing the existing investment portfolio, and also the limits on cost and expenditure above which Board approval must be sought. All other matters are reserved for approval by the Board of Directors. In contributing to the delivery of the Company's strategy, the Board maintains a high level of engagement with the Investment Adviser and seeks to work in a collegiate and co-operative manner, whilst encouraging open discussion, challenge and debate of all significant matters relevant to the Investment Adviser's delegated authority. In addition to the Board's cycle of scheduled meetings, members of the Board regularly attend weekly operational update meetings hosted by the investment advisory team.

The Directors are expected to devote such time as is necessary to enable them to discharge their duties. Where necessary, in carrying out their duties, the Directors may seek independent professional advice at the expense of the Company. The Company maintains appropriate Directors' and Officers' liability insurance in respect of legal action against its Directors on an ongoing basis.

The Board has responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable it to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008, as amended. It is the Board's responsibility to present a fair, balanced and understandable assessment, which extends to interim and other price--sensitive public reports.

Board operation

The overall management of the Company is the responsibility of the Board, who exercise all the powers of the Company subject to the relevant statutes, the Company's Articles of Incorporation, and any directions given by resolutions passed by shareholders. The Articles empower the Board to allot, grant options, warrants or other rights over or otherwise dispose of the Company's shares as the Board determines. The law permits the Company to make market purchases of its own shares if the purchase has first been authorised by a resolution of the Company.

Shareholders authorised the renewal of the Board's authority to allot ordinary shares at the 2020 AGM and, subject to certain terms and conditions, to repurchase ordinary shares on behalf of the Company. Similar authorities are being sought at the forthcoming AGM and details are set out in the notice of AGM.

The Board's annual cycle includes quarterly meetings where the Directors follow a formal agenda which is fixed in advance and standing agenda items at each quarterly meeting cover each area where the Board has reserved decision-making power, in addition to receiving reports from key service providers on portfolio performance, asset valuations and enhancements, operational matters, business development and capital allocation, ESG matters, risk management, peer group information, regulatory and industry developments. The Board actively monitors the environment in which the Company operates to ensure any developments which may affect the Company are considered. Strategy sessions are held at least annually and are co-ordinated by the Investment Adviser, which include site visits and technical briefings. The Board's annual cycle also includes a dividend policy review session and setting the target for the next financial year.

In order to discharge their duties and to operate effectively as a Board, the Directors have full and timely access to all relevant information concerning the Company.

The principal matters considered by the Board during the year (including attending to matters formally reserved for its decision making) included:

   --     the strategic direction of the Company and the effect of emerging technologies; 
   --     composition of the Board and succession planning; 
   --     the Annual Report and audited financial statements and the Half-year Report; 
   --     the dividend policy; 
   --     periodic reports from committees of the Board; 
   --     the ongoing impact to markets from the Covid-19 pandemic; and 
   --     the risk management framework and the principal risks facing the Company. 

Committees of the Board

The Board has not deemed it necessary to appoint a separate remuneration committee as, being comprised of five Directors, it considers that such matters may be considered by the Board as a whole. At the launch of the Fund, the remuneration of the Board was fixed after consultation with independent external advisers. During subsequent years, the Board has reviewed the remuneration levels for the Company and received industry comparison information from advisers in respect of Directors' remuneration. The Company's remuneration policy was last subject to a full independent review during 2017. As noted in the Directors' remuneration report, remuneration levels were reviewed internally by the Directors during the year and recommendations for fee levels to apply from the financial year commencing April 2021 will be proposed to shareholders as part of the remuneration policy at the 2021 annual general meeting.

The Board as a whole performs the functions typically undertaken by an investment committee. The Board ensures compliance with the terms of the investment policy of the Company and will consider and decide on any changes to the investment policy (subject to obtaining the relevant shareholder approvals), including geographical and sectorial spread of investments, risk profile, investment restrictions and the approach to project selection.

The Board also makes discretionary management decisions in respect of the investment portfolio (with reference as necessary to advice provided by the Investment Adviser), but may appoint sub--committees to meet on an ad hoc basis to consider potential acquisitions and disposals of particular investments.

The Board as a whole also fulfils the functions of an investment advisory engagement committee. The Board reviews and makes recommendations on any proposed amendment to the Investment Advisory Agreement and keeps under review the performance of the Investment Adviser. The investment advisory engagement committee also performs a review of the performance of other key service providers to the Fund and meets at least once a year. In the case of each service provider, the review seeks to ensure that:

-- the terms of engagement remain fair and reasonable in the context of the Company and the market;

   --     their objectives remain aligned with those of the Company; 

-- they have not been subject to any adverse event which may present additional risk to the Company;

   --     they remain appropriately incentivised to perform their duties to a high standard; and 
   --     that their continued engagement remains in the best interests of the Company as a whole. 

The Board notes the supporting guidance provided under provision 17 of the 2019 edition of the AIC Code on means by which investment companies may assess the relationship with the adviser. During 2020, the Board reviewed the Company's position against each of the suggested considerations and concluded that the relationship was operating effectively, that the duties of the Investment Adviser remained aligned with the objectives of the Company and that the continued retention of the Investment Adviser's services remained in the best interests of the Company.

Audit Committee

The Company has established an Audit Committee, chaired by Peter Neville, which operates within clearly defined terms of reference and comprises three non--executive Directors: Peter Neville, Stephanie Coxon and Richard Ramsay. All members of the Audit Committee are independent Directors and have no connections with the external auditor. The Audit Committee meets at least three times a year, at times appropriate to the financial reporting calendar.

During the financial year and until 3 September 2020, the Board determined that it would be appropriate for the Chairman of the Company to be a member of the Audit Committee as the breadth of his financial experience and his knowledge of the Company provided value and continuity to the work of the Committee in the discharge of its responsibilities. Richard Morse resigned from his position on the Audit Committee on 3 September 2020, and was succeeded by Stephanie Coxon.

Further details of the membership and activities of the Audit Committee are described in this report.

Audit Committee performance evaluation

For the financial year ended 31 March 2021, the Audit Committee undertook an internal evaluation of the performance of the Audit Committee. The evaluation process was comprehensive and received feedback from all Committee members on the Committee's discharge of the duties delegated under its terms of reference, and on the performance and effectiveness of the Audit Committee Chair.

External audit

The Audit Committee is satisfied with the effectiveness and independence of the audit process and the effectiveness of the recent audit and the performance of the external auditor is reviewed annually. The review process includes receiving feedback from all key personnel involved in the audit process and in the production of the annual financial statements. Any findings from the audit effectiveness review are communicated to the external auditor in advance of their next engagement and considered as part

of the subsequent audit planning process. The Directors are not aware of any circumstances which would affect the recommendation that Deloitte be reappointed as external auditor for the year ending 31 March 2022, expected to be confirmed by the Board in the notice of the 2021 annual general meeting. The Audit Committee also recommends the role of the external auditor is retendered every 10 years, with the audit partner changing every five years.

Risk Committee

The Company has also established a Risk Committee, which is chaired by Hans Rieks and comprises three non--executive Directors: Hans Rieks, Peter Neville and Stephanie Coxon. The duties of the Risk Committee include the identification, measurement, management and monitoring of all risks relevant to the Company's investment strategy and to which the Company is or may be exposed. Drawing from this, the Risk Committee is responsible for determining the principal risks to which the Company is exposed, being those most likely to threaten the business model, future performance, solvency or liquidity. It is the responsibility of the Risk Committee to advise the Board on the overall risk appetite, tolerance and strategy of the Company, and to oversee the Company's current risk exposures and the controls in place to mitigate those risks. The Risk Committee meets at least four times per year.

Nomination Committee

The Nomination Committee, chaired by Richard Morse, comprises three non--executive Directors: Richard Morse, Hans Rieks and Peter Neville. The Nomination Committee's main function is to regularly review the structure, size and composition of the Board and to consider succession planning for Directors. The Nomination Committee meets at least twice per year.

Separate reports from the Audit, Risk and Nomination Committees on their activities for the year are set out later in this report. The terms of reference for each of the Committees are available on the Company's website or upon request from the Company Secretary.

Directors' attendance

The attendance record of Directors for the year to 31 March 2021 is set out below.

 
                                                  Board      Audit       Risk  Nomination 
                                                meeting  Committee  Committee   Committee 
----------------------------------------------  -------  ---------  ---------  ---------- 
Number of meetings held                               4          4          4           4 
----------------------------------------------  -------  ---------  ---------  ---------- 
Richard Morse                                         3       1(1)        n/a           4 
Stephanie Coxon                                    3(2)       2(3)       2(3)         n/a 
Denise Mileham (resigned on 3 September 2020)         2          1          2        1(4) 
Peter Neville                                         4          4          4           4 
Richard Ramsay                                        3          3        n/a         n/a 
Hans Joern Rieks                                      4        n/a          4        3(5) 
----------------------------------------------  -------  ---------  ---------  ---------- 
 
   (1)   Richard Morse resigned from the Audit Committee on 3 September 2020. 

(2) Stephanie Coxon was appointed immediately after the first quarterly meeting of the 2020/21 financial year.

(3) Stephanie Coxon was a member of the Risk Committee and the Audit Committee from 3 September 2020.

(4) Denise Mileham was Chair of the Nomination Committee until her resignation on 3 September 2020.

   (5)   Hans Joern Rieks was a member of the Nomination Committee from 3 September 2020. 

A total of 14 other unscheduled Board meetings were held during the year for specific purposes, which were attended by some, but not all, of the Directors.

RELATIONS WITH SHAREHOLDERS

The Company welcomes engagement with shareholders and the investment community.

Dialogue with shareholders

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. The Investment Adviser produces a regular factsheet which is available on the Company's website. The Chairman and senior members of the Investment Adviser make themselves available, as practicable, to meet with principal shareholders, key sector analysts or other key stakeholders.

Feedback from these meetings is provided to the Board on a regular basis. The Board is also kept fully informed of all relevant market commentary on the Company by the Company's financial PR agency, as well as receiving relevant updates from the Investment Adviser and the Company's broker.

Investor publications

All shareholders can address their individual concerns to the Company in writing at its registered address.

The Chairman or the Senior Independent Director are willing to meet with major shareholders to discuss any particular items of concern or to understand their views on governance and the performance of the Company, and the annual general meeting of the Company provides a forum for shareholders to meet and discuss issues with the Directors and the Investment Adviser.

Company website

The Company's website, www.jlen.com, is regularly updated with new information, research and quarterly publications. The Company's Prospectus, Key Information Document and Investor Disclosure Document are all available for download. The Company also maintains an issuer services page with the London Stock Exchange, providing details of key contacts and corporate events over the financial year.

Stakeholders, business relationships and socially responsible investment

Section 172 statement

Whilst directly applicable to companies incorporated in the UK, the Board recognises the intention of the AIC Code that matters set out in Section 172 of the Companies Act 2006 are reported.

The Board strives to understand the views of the Company's key stakeholders and to take these into consideration as part of its discussions and decision--making process. Additionally, the Board promotes the success of the Company for the benefit of our members as a whole as well as a broad range of stakeholders that we recognise are material to the long--term success of the business. We set out below the detail of how the Board has complied with its duty under Section 172.

As an investment company, the Company does not have any employees and conducts its core activities through third-party service providers. Each 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 stakeholders which the Board has identified as being key are the Company's shareholders, the Investment Adviser, commercial service providers, asset-level counterparties, local communities, and debt providers. Understanding the needs of each stakeholder group and ensuring the Company's operations are conducted in a manner which recognises their interests is crucial for ensuring the Company's long-term sustainable success.

The Board's commitment to maintaining high standards of corporate governance, combined with the Directors' duties enshrined in company law, the constitutive documents, the Disclosure Guidance and Transparency Rules, and the UK version of the Market Abuse Regulation, provides shareholders with regular and detailed announcements concerning the Company and its activities sufficient for investors to make informed decisions concerning their shareholding. A significant amount of time is dedicated at each scheduled meeting to risk management and how effectively the Company can preserve value for shareholders over the long term through mitigating downside risk. Regular dialogue with the Investment Adviser and the corporate broker ensures the Board is aware of the investment strategy and the views of major shareholders and for these to be taken into consideration as part of the Board's decision-making process.

Representatives of the Investment Adviser are involved in the governance framework of each project. This reinforces the effective flow of relevant information to the Board on the activities of the Company's significant counterparty exposures involved in operating each project, and provides a communication channel through which community stakeholders' views can be shared, to be considered at each scheduled meeting of the Directors, and to ensure their interests remain aligned with the objectives of the Company.

DIVISION OF RESPONSIBILITIES

The Board has overall responsibility for the management of the Company's affairs.

Chairman

As Chairman, Richard Morse is responsible for leading the Board and for ensuring its effectiveness in all aspects of its role. Specific duties of the Chairman include demonstrating ethical leadership, objective judgement, promoting the highest standards of integrity, probity and a culture of openness and debate. The Chairman sets the Board's agenda and ensures the Board has a clear understanding of the views of those who provide the Company's capital and that effective decision-making processes are in place, supported by high quality information, that take into consideration the interests of all the Company's key stakeholders.

The Chairman leads the annual performance evaluation of the Board, with support from the Senior Independent Director, and acts as appropriate on the results. One--on--one meetings are held between the Chairman and the Directors each year, which provides an additional forum through which any potential training needs or other relevant Board matters are addressed.

Senior Independent Director

Richard Ramsay is the Senior Independent Director and provides support to the Chairman on matters of Board effectiveness, governance, and acting as an intermediary for the Directors, shareholders and other key stakeholders. The Senior Independent Director also provides an additional channel of communication through which stakeholders may voice concerns, works annually with the other Directors on reviewing the performance of the Chairman, and is responsible for leading the succession planning arrangements for the Chairman.

Non-executive Directors

Including the Chairman and the Senior Independent Director, the Company currently has five independent non-executive Directors.

The Company Secretary

The Directors have access to the advice and services of Praxis Fund Services Limited, the Company Secretary and Administrator, which is responsible to the Board for ensuring that Board procedures are followed and that it complies with Guernsey law and applicable rules and regulations of the Guernsey Financial Services Commission and the London Stock Exchange. The Company Secretary is also responsible for the timely delivery of information to the Board and ensuring that statutory obligations are met.

Market Abuse Regulation

The Board has formally adopted procedures in relation to the Company's obligations under the UK version of the Market Abuse Regulation ("MAR"), including procedures for the identification, management and disclosure of price sensitive information, share dealing by persons discharging managerial responsibility and their persons closely associated. The Board is responsible for overseeing the Company's compliance with MAR, and ensuring compliance with MAR by the Directors.

AIFM Directive

The Company is categorised as an internally managed non--EEA AIF for the purposes of the Alternative Investment Fund Managers Regulation 2013 and the AIFM Directive and, as such, neither it nor the Investment Adviser is required to seek authorisation under the AIFM Directive. The Board retains responsibility for the majority of the Company's risk management and portfolio management functions and performs a number of its management functions through the various committees described earlier in this report.

The Board delegates certain activities to the Investment Adviser, but actively and continuously supervises the Investment Adviser in the performance of its functions and reserves the right to take decisions in relation to the investment policies and strategies of the Company or to change the Investment Adviser (subject to the terms of the Investment Advisory Agreement). The Board retains the right to override any advice given by the Investment Adviser if acting on that advice would cause the Company not to be acting in the best interests of investors, and more generally to provide overriding instructions to the Investment Adviser on any matter within the scope of the Investment Adviser's mandate. The Board also has the right to request additional information or updates from the Investment Adviser in respect of all delegated matters, including in relation to the identity of any sub--delegates and their sphere of operation.

AIFM Directive disclosures

The Company is required, pursuant to Regulation 59(2) of the Alternative Investment Fund Managers Regulations 2013 and Article 42(1)(a) of the AIFM Directive, to make certain specified disclosures to prospective investors prior to their investment in the Company, in accordance with the FCA's Investment Funds sourcebook and Article 23 of the AIFM Directive (the "Article 23 Disclosures"). The Company has published an investor disclosure document on its website (www.jlen.com) for the purposes of making the Article 23 Disclosures available to prospective investors prior to their investment in the Company.

During the financial year ended 31 March 2021, there was one material change to the Article 23 Disclosures made available on the Company's website, when the Company adopted its updated investment policy on 8 March 2021, as detailed further in this report.

Non-mainstream pooled investments

The Board notes the rules of the UK FCA on the promotion of non-mainstream pooled investments.

The Board confirms that it conducts the Company's affairs, and intends to continue to do so, in order that the Company's shares will be excluded securities under the FCA's rules. This is on the basis that the Company, which is resident outside the EEA, would qualify for approval as an investment trust by the Commissioners for HM Revenue and Customs under Sections 1158 and 1159 of the Corporation Tax Act 2010 if resident and listed in the United Kingdom. Therefore, the Company's shares will not amount to non--mainstream pooled investments. Accordingly, promotion of the Company's shares will not be subject to the FCA's restriction on the promotion of non-mainstream pooled investments.

Significant voting rights

Details of shareholders with notifiable interests in the voting rights of the Company can be found later in this report.

Share repurchase

Subject to the provisions of the law and the Company's Articles of Incorporation, the Company may purchase all or any of its shares of any class, including any redeemable shares, and may hold such shares as treasury shares or cancel them. During the year no shares were acquired by the Company.

Amendment to the Company's Articles of Incorporation

Subject to the provisions of the law and the Company's Articles of Incorporation, the Company's Articles can be amended by special resolution.

COMPOSITION, SUCCESSION AND EVALUATION

NOMINATION COMMITTEE REPORT

The Board ensures it has the appropriate balance of skills, experience, diversity and knowledge to operate effectively.

Richard Morse

Chair of the Nomination Committee

Committee members

Richard Morse

Chair of the Nomination Committee

Hans Rieks

Director

Peter Neville

Director

The Board of Directors has established a Nomination Committee from the non--executive Directors of the Company. The Nomination Committee, chaired by Richard Morse, operates within clearly defined terms of reference which are considered and are then referred to the Board for approval. A copy of the terms of reference is available on the Company's website or upon request from the Company Secretary.

The main roles and responsibilities of the Nomination Committee are to:

-- regularly review the structure, size and composition of the Board and make recommendations to the Board with regard to any changes, based on merit and objective criteria (including skills, knowledge and experience, and promoting diversity of gender, social and ethnic backgrounds, cognitive and personal strengths);

-- give full consideration to succession planning for Directors, ensuring effective plans are in place for orderly succession to the Board and to oversee the development of a diverse pipeline for succession, taking into account the challenges and opportunities facing the Company; and

-- lead the process for appointments and be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise.

The Nomination Committee reports formally to the Board on its proceedings on all matters within its duties and responsibilities and how it has discharged its responsibilities. The Committee meets at least twice a year and at such other times as the Nomination Committee Chair shall require. Other Directors and third parties may be invited by the Nomination Committee to attend meetings as and when appropriate.

The initial members of the Board were selected following a comprehensive recruitment exercise with the aim of establishing a Board with the skills, knowledge and experience necessary for the proposed listing of the Company and its subsequent management and operation.

The Nomination Committee met four times during the year. Matters considered at these meetings included, but were not limited to:

-- the findings of the Board evaluation concerning the size, structure and composition of the Board and the appropriateness of the current mix of skills, knowledge and experience for its current activities;

   --     how effectively members of the Board work together to achieve their objectives; 

-- the Company's policy on diversity, ensuring this remained aligned with the Company's strategy and objectives;

   --     Director succession planning; 
   --     Director training; 
   --     the time requirements and independence of Directors; and 

-- consideration and agreement of the terms of reference of the Nomination Committee for approval by the Board.

The Nomination Committee is pleased with the progress made to date in implementing the Board's succession plans, noting the most recent appointment of Stephanie Coxon in June 2020, broadening the corporate finance and capital markets skillsets represented on the Board whilst also broadening its diversity.

During 2021, the Nomination Committee reviewed in detail the Board's succession planning arrangements and the feedback from the Board performance evaluation. Recognising the continued growth of the Company and considering the future leadership needs of the Company, a comprehensive recruitment process was undertaken through the Company's broad network of contacts and in conjunction with Savannah Partners Limited to identify candidates suitable for appointment to the Board. Following an extensive selection process, the Nomination Committee was pleased to recommend the appointment of both Alan Bates and Jo Harrison to the Board, who join with effect from 10 June 2021.

The Nomination Committee continues to maintain and develop the Board's succession planning arrangements to ensure the arrangements remain effective, and that a diverse pipeline for succession is maintained which remains aligned with the Company's strategy and future leadership needs. The Board is committed to maintaining not less than one-third female representation.

Board succession timeline 2021

 
31 March 2021                    10 June 2021               2 September 2021 
-------------------------------  -------------------------  --------------------------- 
At the year end, the             On 10 June 2021, JLEN      At the Company's AGM 
 Board consisted of five          will appoint two more      on 2 September 2021, 
 non-executive Directors:         non-executive Directors    Peter Neville will retire 
                                  - Jo Harrison and Alan     from the Board, and will 
  *    Chairman - Richard Morse   Bates - to bring more      not stand for re-election. 
                                  knowledge of relevant      All other Directors will 
                                  utility sectors to JLEN.   stand for re-election 
  *    SID - Richard Ramsay                                  at the AGM. 
 
 
  *    Stephanie Coxon 
 
 
  *    Peter Neville 
 
 
  *    Hans Joern Rieks 
 

Board independence and composition

The Board consists of seven Directors (during the financial year ended 31 March 2021, five), all of whom are non--executive and independent of the Company's Investment Adviser and other key service providers. Board independence is formally reviewed annually against the factors suggested in the AIC Code as likely to impair, or could appear to impair, independence, in addition to any other relevant considerations. The Board considers all of the Directors, including the Chairman, to be independent. The Directors' details are contained on earlier in this report and set out the range of investment, financial and business skills and experience represented. Richard Morse has been appointed Chairman and Richard Ramsay Senior Independent Director.

The Board believes that the Directors provide the appropriate balance of skills, knowledge and diversity necessary to manage the affairs of the Company and to operate effectively as a Board. The composition of the Board is formally reviewed annually by the Nomination Committee with the objective of ensuring that it meets the current and expected future leadership needs of the Company. The Board's formal performance evaluation also provides feedback from the Directors on aspects of the Board's operation where greater effectiveness may be achieved.

Tenure, succession planning and induction

The tenure of all Directors, including the Chairman, is expected not to exceed nine years unless exceptional circumstances warrant, such as to allow for phased Board appointments and retirements and to ensure that the Board remains well balanced and that the skills, knowledge and experience of the Board is refreshed at appropriate intervals.

In 2019 the Board began the implementation of its succession plan which involved a staged process of rotating the Directors first appointed at the Company's launch. In accordance with corporate governance best practice as set out in the AIC Code, each Director will be subject to annual re--election by shareholders at the annual general meeting. The Board maintains a succession roadmap which documents the plans in place for a gradual phasing of the Board and to avoid any undue disruption which may arise if more than one Director were to retire within a short space of time.

On appointment to the Board, new Directors will be provided with an induction pack by the Company Secretary containing all relevant information regarding the Company, its history, operations, key relationships, and their duties and responsibilities as Directors. New appointees meet with each of the Directors and with representatives of the Investment Adviser. The Chairman is responsible for agreeing the programme of induction training with new appointees, and that any training needs of the existing Directors are addressed.

The Nomination Committee is responsible for ensuring that a diverse pipeline for succession is maintained, relevant to the future leadership needs of the Company.

Board diversity

The Board supports the recommendations of the Davies Report and notes the recommendations of the Parker review into ethnic diversity and the Hampton-Alexander review on gender balance in FTSE leadership. The Board is mindful and supportive of the principle of widening the diversity of its composition. It is also committed to appointing the most appropriate available candidate based on merit, taking into account the skills and attributes of both existing members and potential new recruits and thereby the balance of skills, experience and approach of the Board as a whole which will lead to optimal Board effectiveness. Acting on the findings from the Nomination Committee's review of the size, structure and composition of the Board, the Directors were pleased to announce the appointment of Stephanie Coxon in June 2020. Following the appointments of Alan Bates and Jo Harrison in June 2021, the Board is expected to be comprised of seven Directors until the Company's 2021 annual general meeting, due to be held on 2 September 2021, at which Peter Neville has indicated his intention to retire without seeking re-election by shareholders.

No Director has a service contract with the Company and the terms and conditions of appointment for each of the Directors are set out in writing between each individual and the Company. Copies of the relevant appointment letters are available for inspection at the Company's registered office.

Conflicts of interest

The Directors have undertaken to notify the Company Secretary as soon as they become aware of any actual or potential new conflict of interest. Only Directors who have no material interest in the matter being considered will be able to participate in the Board approval process. Other business relationships, including those that conflict or may potentially conflict with the interests of the Company, are taken into account when appointing Board members and are monitored on a regular basis. The terms of each Director's appointment letter with the Company requires that they seek prior approval from the Board before taking up any additional external appointments. The Board recognises the holdings of ordinary shares in the Company held by each of Richard Morse, Richard Ramsay and Peter Neville. The Board considers these interests at each scheduled meeting and remains satisfied that they do not affect the ability of the Directors to exercise independent judgement or their objectivity.

Performance and evaluation

The JLEN Board has adopted a process to review its performance on a regular basis and such reviews are carried out internally on an annual basis, with external facilitation expected to take place every three years. The annual evaluation of the Board and the performance of its committees has taken the form of questionnaires and discussion to assess Board effectiveness and individual Director performance in various areas. The review of the Chairman's performance is led by the Senior Independent Director.

For the financial year ended 31 March 2020, the Board engaged Aspida Advisory Services Limited ("Aspida") to undertake an externally facilitated assessment of its effectiveness and performance. Aspida (formerly Optimus Group) also undertook the Company's first external Board effectiveness review in 2017. The findings from the external performance review were generally satisfactory and no material deficiencies or issues were raised.

For the financial year ended 31 March 2021, the Directors undertook an internal evaluation of the Board. The evaluation process covered the composition of the Board and meeting process, Board information, training and development, Board dynamics, accountability and effectiveness.

Additional reviews were undertaken in respect of the performance and effectiveness of the Chairman, and of the Audit Committee. Certain points identified during the assessment which we have agreed to take forward in the coming year include:

-- broadening the skill base of the Board to include individuals with greater ESG and technical knowledge;

reviewing the matters which the Board has reserved for its decision making and the extent of delegation to third parties; and

-- enhancing the Board's training programme to include a greater focus on emerging technologies and asset classes.

Internal control

The Board is responsible for the Company's system of internal control and for reviewing its effectiveness, and the Board has therefore established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed.

The process is based on a risk--based approach to internal control through a matrix which identifies the key functions carried out by the Investment Adviser, Administrator and other key service providers, the various activities undertaken within those functions, the risks associated with each activity and the controls employed to minimise and mitigate those risks and the risks at the operating companies. The Audit Committee works in close co--operation with the Risk Committee, with the prime responsibility of the Audit Committee being the review of internal controls and processes, and of the Risk Committee being the principal risks and uncertainties facing the Company.

AUDIT, RISK AND INTERNAL CONTROL

AUDIT COMMITTEE REPORT

Peter Neville, Chair of the Audit Committee is pleased to present the Audit Committee report for the year ended 31 March 2021.

Committee members

Peter Neville

Chair of the Audit Committee

Stephanie Coxon

Director

Richard Ramsay

Director

The Audit Committee is appointed by the Board from the non--executive Directors of the Company. The Audit Committee, chaired by Peter Neville, operates within clearly defined terms of reference and includes all matters indicated by Disclosure Guidance and Transparency Rule 7.1 and the UK Corporate Governance Code. The terms of reference are considered by the Audit Committee at each meeting and any changes are then referred to the Board for approval. A copy of the terms of reference is available on the Company's website or upon request from the Company Secretary.

Summary of the roles and responsibilities of the Audit Committee

The main roles and responsibilities of the Audit Committee are:

-- monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company's financial performance and reporting to the Board on significant financial reporting issues and judgements contained therein;

-- reviewing the content of the Half--year and Annual Reports and financial statements and advising the Board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy;

-- agreeing with the external auditor the audit plan and reviewing the auditor's report related to the Half--year Report and the Annual Report and financial statements;

-- maintaining the Company's policy on the provision of non-audit services by the external auditor;

   --     Summary of the roles and responsibilities 
   --     of the Audit Committee continued 

-- reviewing and recommending for approval the audit, audit-related and non-audit fees payable to the external auditor and the terms of their engagement;

-- reviewing the long-term viability and going concern statements, including the underlying documentation prepared by the Investment Adviser;

-- reviewing, in conjunction with the Risk Committee, the adequacy and effectiveness of the Company's internal financial controls and internal control and risk management systems;

   --     reviewing the adequacy and security of the Company's arrangements for regulatory compliance, whistleblowing and fraud, recognising that responsibilities for whistleblowing arrangements reside with the Board as a whole; 

-- making recommendations to the Board, to be put to shareholders for approval at the annual general meeting, in relation to the appointment, re--appointment and removal of the Company's external auditor; and

-- assessing annually the external auditor's independence and objectivity taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non--audit services and the effectiveness of the audit process.

The Audit Committee reports formally to the Board on its proceedings on all matters within its duties and responsibilities and how it has discharged its responsibilities.

Meetings

The Audit Committee meets at least three times a year and at such other times as the Audit Committee Chair shall require.

Any member of the Audit Committee may request that a meeting be convened by the Secretary of the Audit Committee. The external auditor may request that a meeting be convened if it is deemed necessary.

Other Directors and third parties may be invited by the Audit Committee to attend meetings as and when appropriate.

Annual general meeting

The Audit Committee Chair attends the annual general meeting to answer shareholder questions on the Committee's activities.

Significant issues

The Audit Committee considered the following significant issues during the year and in relation to the financial statements:

Valuation of investments

The Company is required to calculate the fair value of its investments. Whilst there is a relatively active market for investments of this nature, there is not a suitable listed or other public market in these investments against which their value can be benchmarked. As a result, a valuation is performed based on a discounted cash flow methodology in line with IFRS 13 Fair Value Measurement.

The calculation of the fair value of the investments carries elements of risk, mainly in relation to the assumptions and factors such as:

-- the determination of the appropriate macroeconomic assumptions underlying the forecast investment cash flows;

-- the determination of the appropriate assumptions regarding future power prices, energy generation and volumes underlying the forecast investment cash flows;

   --     the determination of appropriate sensitivities to apply to meet the required disclosures; 
   --     the impact of project-specific matters on the forecast cash flows for each investment; 

-- the determination of the appropriate discount rate for each investment that is reflective of current market conditions;

-- the tax deductibility of interest expense under the Base Erosion and Profit Shifting ("BEPS") legislation;

-- the underlying project financial models may not reflect the underlying performance of the investment;

   --     terms and costs of the future refinancing of senior debt on certain projects; 

-- the cash flows from the underlying financial models may not take into account current known issues; and

-- the updates performed on the underlying financial models may result in errors in forecasting.

The Audit Committee is satisfied that the Administrator and Investment Adviser's assumptions have been reviewed and challenged for:

-- the macroeconomic assumptions, including the comparison of these assumptions to observable market data, actual results and prior year comparatives;

-- the electricity price, gas price, energy generation and volume assumptions, including the comparison of these assumptions to observable market data, actual results and prior year comparatives, including in the context of the effects and implications of the Covid-19 pandemic; and

-- the build--up of the discount rates for consistency and reasonableness, benchmarking against market data and peers and project-specific items.

The Audit Committee is also satisfied that the portfolio valuation and associated disclosures have been audited for mechanical accuracy, ensuring that the investments are brought on balance sheet at fair value and that the independent valuation carried out by an independent firm has been reviewed and challenged by the auditor.

Internal audit

The Audit Committee considers at least once a year whether or not there is a need for an internal audit function. Currently, the Audit Committee does not consider there to be a need for an internal audit function specific to the Company, given that there are no employees in the Company and the systems and procedures employed by the Administrator and Investment Adviser, including their own internal controls and procedures in place in relation to the Company and its subsidiaries, provide sufficient assurance that a sound system of internal control, which safeguards the Company's assets, is maintained.

External audit

Deloitte LLP has been the Company's auditor since incorporation on 12 December 2013 and this is the seventh set of financial statements on which it has expressed an audit opinion.

The Audit Committee has assessed the quality and the effectiveness of the audit process. To draw its conclusions, the Audit Committee reviewed:

-- the scope of the audit, the audit fee and the external auditor's fulfilment of the agreed audit plan;

-- the degree of diligence demonstrated by them in the course of their interaction with the Board, the Audit Committee and the Administrator and Investment Adviser;

   --     the external auditor's assessment of the Group's principal risks; and 

-- the report highlighting the matters that arose during the course of the audit and the recommendations made by the external auditor.

The Audit Committee has noted the revisions to the UK Code and the AIC Code, and in particular the recommendation, in each, to put the external audit out to tender every five to 10 years. The Audit Committee has also noted the requirements of the Competition and Markets Authority with respect to external auditor services and retendering. This is the seventh year of Deloitte's appointment as the Company's auditor.

The Audit Committee is satisfied with the effectiveness and independence of the audit process and, as such, based on the audit effectiveness review carried out in June 2021, it is recommended to the Board that Deloitte LLP be reappointed as external auditor for the year ending 31 March 2022. The Audit Committee also recommended the audit appointment is retendered every 10 years, with the audit partner changing every five years.

Non --audit services

The Audit Committee considered the extent of non--audit services provided by the external auditor. The Company has adopted a formal policy in relation to the provision of non-audit services, pursuant to which the external auditor's objectivity and independence is safeguarded through limiting non--audit services to their role as reporting accountants for capital raising services and in relation to the half--year interim review, subject to a cap.

The Company paid GBP30,100 during the year for non--audit services to Deloitte LLP, all in relation to the half--year interim review.

Activities of the Audit Committee

The Audit Committee met on four occasions during the year ended 31 March 2021. Matters considered at these meetings included, but were not limited to:

-- reviewing the independent internal controls assurance process put in place by the Investment Adviser;

-- meeting with the independent valuation agents and with the external auditor without representatives of the Investment Adviser present to receive their views in relation to the half-year and year-end valuation and the appropriateness and implementation of the Company's asset valuation methodology;

-- considering the impact on cash flow forecasts ofthe addition of a third market consultant's power price curve and inclusion of price cannibalisation;

   --     reviewing the reappointment of the external auditor; 
   --     reviewing the effectiveness of the external auditor and the external audit process; 

-- reviewing the long-term viability and going concern statements, including the underlying documentation;

   --     approving the external audit fees; 

-- considering and agreeing the terms of reference of the Audit Committee for approval by the Board;

   --     reviewing the proposed accounting policies and format of the financial statements; 

-- reviewing the audit plan and timetable for the preparation of the Annual Report and financial statements;

   --     reviewing the Company's asset valuation methodology; 
   --     reviewing the independent valuation report; and 
   --     reviewing the 2021 Annual Report and financial statements and the 2020 Half--year Report. 

No areas of significant disagreement or concern were highlighted during the Audit Committee's activities during the year which necessitated further action being taken outside of the Committee's routine duties.

As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference.

Approval

On behalf of the Audit Committee:

Peter Neville

Chair of the Audit Committee

9 June 2021

RISK COMMITTEE REPORT

We are pleased to present the Risk Committee report for the year ended 31 March 2021.

Hans Rieks

Chair of the Risk Committee

Committee members

Hans Rieks

Chair of the Risk Committee

Stephanie Coxon

Director

Peter Neville

Director

The Board of Directors has established a Risk Committee from the non--executive Directors of the Company. The Risk Committee, chaired by Hans Rieks, operates within clearly defined terms of reference and works closely with the Audit Committee in monitoring the internal controls and risk management of the Company.

The terms of reference are considered at least annually by the Risk Committee and are then referred to the Board for approval. A copy of the terms of reference is available on the Company's website or upon request from the Company Secretary.

The main roles and responsibilities of the Risk Committee are to:

-- when requested to do so, advise the Board on the overall risk appetite, tolerance and strategy of the Fund, taking account of the extent to which the risk profile of the Company corresponds to the size, structure and objectives of the Company, in addition to the current and prospective macroeconomic, financial and regulatory environment, including relevant stakeholder issues;

-- oversee and advise the Board on the current risk exposures of the Fund with particular focus on the Fund's principal risks, being those which could influence shareholders' economic decisions, and the controls in place to mitigate those risks;

-- keep under review the Fund's overall risk identification and assessment processes and, in conjunction with the Audit Committee, review the adequacy and effectiveness of the risk management systems;

-- in conjunction with the Audit Committee, ensure that a framework of strong corporate governance and best practice is in place, which enables the Company to comply with the main requirements of the Guernsey Code, UK Code or the AIC Code where considered appropriate;

-- when requested to do so, advise the Board on proposed strategic transactions including acquisitions or disposals, ensuring that a due diligence appraisal of the proposition is undertaken, focusing in particular on risk aspects and implications for the risk appetite and tolerance of the Fund, and taking independent external advice where appropriate and available; and

-- oversee the remit of the risk management function, its resources, access to information and independence.

The Risk Committee reports formally to the Board on its proceedings on all matters within its duties and responsibilities and how it has discharged its responsibilities. The Committee must meet at least four times a year and at such other times as the Risk Committee Chair shall require. Other Directors and third parties may be invited by the Risk Committee to attend meetings as and when appropriate. The Risk Committee met four times in the year.

In order to assist it in fulfilling its role on behalf of the Board, the Committee has established, in conjunction with the Investment Adviser, an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed. This is a risk--based approach through the maintenance of a register which identifies the key risk areas faced by the Company and the controls employed to minimise and mitigate those risks. Scoring based on a traffic light system for likelihood and impact is used to assess the significance to the Fund of each individual risk. The register is updated quarterly and the Committee considers all material changes to the risk ratings and the action which has been, or is being, taken. By their nature, these procedures will provide a reasonable, but not absolute, assurance against material misstatement or loss.

REMUNERATION

DIRECTORS' REMUNERATION REPORT

Introduction

The Board has established separate Risk, Audit and Nomination Committees to effectively oversee the activities of the Group.

The Board has not deemed it necessary to appoint a remuneration committee as, being comprised of five Directors, it considers that such matters may be considered by the whole Board, provided that no Director is involved in deciding their own remuneration.

The Board determines and agrees the policy for the remuneration of the Directors of the Company, including the approval of any ad hoc payments in respect of exceptional work required (e.g. for the work involved with the issue of prospectuses and equity fundraises). No Director is involved in determining his or her own remuneration.

As all Directors of the Company are non--executive, they receive an annual fee appropriate for their responsibilities and time commitment, but no other incentive programmes or performance-related emoluments.

At IPO, the remuneration of the Board was fixed after consultation with independent external advisers. The remuneration policy is reviewed annually by the Directors to ensure it remains appropriate in the context of the activities of the Company, that the practices continue to support strategy and promote the Company's long-term sustainable success, and that they reflect the time commitment and responsibility of the role.

The last external review of the Company's remuneration policy was carried out in 2017 by Trust Associates and several of their recommendations formed part of the policy which applied to the financial year commencing 1 April 2018. Internal policy reviews have been undertaken by the Directors in each subsequent year and the current policy has remained unchanged since 1 April 2019.

The internal review of the remuneration policy undertaken in 2021 benchmarked the Company's position against listed peer funds in the renewable energy infrastructure sector, the time commitment of the Directors during the year under review and the additional responsibilities placed on certain Board members. The findings identified certain aspects of the Company's policy where changes would be appropriate, particularly to reflect the additional responsibilities placed on the Audit Committee Chair.

Accordingly, and with effect from 1 April 2021, the Board are recommending that shareholders approve the remuneration levels proposed in the comparative table set out later in this report.

Remuneration policy

Each Director receives a xed fee per annum based on their role and responsibility within the Company and the time commitment required. It is not considered appropriate that Directors' remuneration should be performance related and none of the Directors are eligible for pension bene ts, share options, long-term incentive schemes or other bene ts in respect of their services as non--executive Directors of the Company. Shares held by the Directors are disclosed in the report of the Directors. The total remuneration of non--executive Directors has not exceeded the GBP300,000 per annum limit set out in the Articles of Incorporation of the Company (subsequently increased to GBP400,000 at the EGM held on 8 March 2021).

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

All of the Directors have been provided with letters of appointment which stipulate that their initial term shall be for three years, subject to annual re--election. The Articles of Incorporation provide that Directors retire and offer themselves for re--election at the rst annual general meeting after their appointment and at least every three years thereafter. Pursuant to the AIC Code, each Director

retires and offers themselves for re-election at each annual general meeting. A Director's appointment may at any time be terminated by, and at the discretion of, either party upon three months' written notice.

A Director's appointment will automatically end without any right to compensation whatsoever if they are not re--elected by the shareholders. A Director's appointment may also be terminated with immediate effect and without compensation in certain other circumstances.

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

Details of individual remuneration

During the year, the Board, with assistance from the Investment Adviser and the Administrator and acting on the findings of the internal remuneration policy review, recommended certain changes to the levels of individual remuneration paid to the Directors, as set out in the below table.

For comparative purposes, the table below sets out the Directors' remuneration approved and actually paid for the year to 31 March 2021, as well as that proposed for the year ending 31 March 2022.

 
                                                                                     Annual base 
                                                                                        proposed        Paid 
                                                                                             for 
Director                                                                       Role      2021/22     2020/21 
------------------------------------------  ---------------------------------------  -----------  ---------- 
Richard Morse                               Chairman and Nomination Committee Chair    GBP67,250   GBP66,500 
Richard Ramsay                                          Senior Independent Director    GBP49,000   GBP48,400 
Peter Neville                                                 Audit Committee Chair    GBP50,000   GBP46,100 
Denise Mileham (resigned 3 September 2020)                                                     -   GBP17,959 
Hans Rieks                                                     Risk Committee Chair    GBP42,500   GBP42,000 
Stephanie Coxon                                                                        GBP42,500   GBP33,795 
Jo Harrison                                                                            GBP42,500           - 
Alan Bates                                                                             GBP42,500           - 
------------------------------------------  ---------------------------------------  -----------  ---------- 
Total                                                                                             GBP254,754 
------------------------------------------  ---------------------------------------  -----------  ---------- 
 

Where the Company requires Directors to work on specific corporate actions such as further equity raisings, an additional fee will be appropriately determined. No additional fees were paid to the Directors for the year ended 31 March 2021.

Directors are entitled to claim reasonable expenses which they incur attending meetings or otherwise in performance of their duties relating to the Company. The total amount of Directors' expenses paid for the year ended 31 March 2021 was GBP356 (31 March 2020: GBP7,844).

Approval of report

The Board will seek approval at the annual general meeting on 2 September 2021 for both the remuneration policy and the annual Directors' fees for routine business for the year ended 31 March 2022, as set out above.

REPORT OF THE DIRECTORS

The Directors are pleased to submit their report and the audited financial statements of the Company for the year ended 31 March 2021.

Principal activities

JLEN Environmental Assets Group Limited is a company incorporated and registered in Guernsey under the Companies (Guernsey) Law, 2008. The Company was incorporated on 12 December 2013 with the Company registered number 57682.

At 31 March 2021, the total number of ordinary shares of the Company in issue was 546,720,025, including 49,701,820 shares issued in March 2020 in an oversubscribed placing.

The Company is a registered fund under the Registered Collective Investment Scheme Rules 2015 and is regulated by the Guernsey Financial Services Commission and, during the year, its principal activity was as an investor in environmental infrastructure projects that utilise natural or waste resources or support more environmentally friendly approaches to economic activity.

Business review

The Company is required to present a fair review of its business during the year ended 31 March 2021, its position at the year end and a description of the principal risks and uncertainties it faces.

Disclosure of information under Listing Rule 9.8.4

The Company is required to disclose information on any contract of significance subsisting during the period under review:

-- to which the Company, or one of its subsidiary undertakings, is a party and in which a Director of the Company is or was materially interested; and

   --     between the Company, or one of its subsidiary undertakings, and a controlling shareholder. 

Details can be found in note 15 to the financial statements.

The Directors note that no shareholder has waived or agreed to waive any dividends.

Results and dividends

The results for the year are set out in the financial statements. On 30 April 2021, the Directors declared a dividend in respect of the period 1 January 2021 to 31 March 2021 of 1.69 pence per share to shareholders on the register as at the close of business on 4 June 2021, payable on 25 June 2021.

Going concern

The Company's business activities, together with the factors likely to affect its future development, performance and prospects, are set out in the strategic report. The financial position of the Company, its cash flows and its liquidity position are also described in the strategic report. In particular, the current economic conditions, including the impact of Covid--19 on electricity and gas prices, have created a number of risks and uncertainties for the Company and these are set out in the risks and risk management section. As part of the going concern assessment, the Directors have also reviewed the results of the reverse stress test and downside case which includes significant reduction in projects' cash flows under severe negative power price and generation volume assumptions. The financial risk management objectives and policies of the Company and the exposure of the Company to credit risk, market risk and liquidity risk are discussed in note 16 to the financial statements.

The Company continues to meet its requirements and day--to--day liquidity needs through both its own cash resources and those of its investment entities, to which it has full recourse.

As a result, the Company forecasts to meet all loan covenants requirements.

At 31 March 2021, the Company had net current assets of GBP0.1 million (31 March 2020: GBP0.1 million), including a cash balance of GBP1.9 million (31 March 2020: GBP1.8 million). At UK HoldCo level, the GBP170 million revolving credit facility was drawn to a level of GBP82.0 million (31 March 2020: GBP29.3 million), with the balance available for future acquisitions and working capital. JLEN has sufficient cash balances to meet other current obligations as they fall due, while all key financial covenants are forecast to continue to be complied with.

Since 21 May 2021, JLEN has benefited from a new GBP170 million multi--currency revolving credit facility with accordion facility of up to GBP30 million with ING, HSBC, NIBC, RBSI and NAB. This revolving credit facility expires in May 2024. In addition, the Company raised GBP56.9 million equity in May 2021.

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

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 the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Long-term viability statement

The Directors have assessed the viability of the Group over the three--year period to June 2024, taking account of the Group's current position and the potential impact of the principal risks documented in the strategic report. Based on this robust assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to June 2024.

In making this statement, the Directors have considered and challenged the reports of the Investment Adviser in relation to the resilience of the Group, taking account of its current position, the principal risks faced (including those related to Covid-19) in severe but reasonable scenarios, including a stressed scenario, the effectiveness of any mitigating actions and the Group's risk appetite. Sensitivity analysis has been undertaken to consider the potential impacts of such risks on the business model, future performance, solvency and liquidity over the period, both on an individual and combined basis. In particular, this has considered the achievement of budgeted energy yields, the level of future electricity and gas prices, continued government support for renewable energy subsidy payments and the impact of a downside scenario which includes significant reduction of projects' yields under severe power price and generation volume assumptions.

The Directors have determined that a three--year look forward to June 2024 is an appropriate period over which to provide its viability statement. This is consistent with the outlook period used in economic and other medium--term forecasts regularly prepared for the Board by the Investment Adviser and the discussion of any new strategies undertaken by the Board in its normal course of business. These reviews consider both the market opportunity and the associated risks, principally the ability to raise third-party funds and invest capital, or mitigating actions taken, such as a reduction of dividends paid to shareholders or utilisation of additional borrowings available under the RCF.

Internal controls review

Taking into account the information on principal risks and uncertainties of the strategic report and the ongoing work of the Audit and Risk Committees in monitoring the risk management and internal control systems on behalf of the Board, the Directors:

-- are satisfied that they have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity; and

-- have reviewed the effectiveness of the risk management and internal control systems and no significant failings or weaknesses were identified.

Share capital

The Company has one class of ordinary shares which carry no rights to fixed income. On a show of hands, each member present in person or by proxy has the right to one vote at general meetings. On a poll, each member is entitled to one vote for every share held.

The issued nominal value of the ordinary shares represents 100% of the total issued nominal value of all share capital. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Incorporation and prevailing legislation. The Directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

The Company's Memorandum and Articles of Incorporation contain details relating to the rules that the Company has about the appointment and removal of Directors or amendment to the Company's Articles of Incorporation, which are incorporated into this report by reference.

Authority to purchase own shares

A resolution to provide the Company with authority to purchase its own shares will be tabled at the annual general meeting on 2 September 2021. This shareholder authority was last renewed at the 2020 annual general meeting.

Major interests in shares and voting rights

As at 31 March 2021, the Company had been notified, in accordance with Chapter 5 of the Disclosure Guidance and Transparency Rules, of the following interests in 5% or more of the voting rights as a shareholder in the Company.

 
                                           Percentage 
                                            of voting   Number of 
                                               rights 
                                           and issued    ordinary 
Shareholder                             share capital      shares 
--------------------------------------  -------------  ---------- 
Newton Investment Management Limited            8.54%  46,703,139 
Gravis Capital Management                       8.02%  43,836,399 
Legal & General Investment Management           5.47%  29,912,526 
--------------------------------------  -------------  ---------- 
 

Board of Directors

The Board members that served during the year and up until the date of this report, all of whom are non--executive Directors and independent of the Investment Adviser, are listed below.

 
Name                                                           Function 
------------------------------------------  --------------------------- 
Richard Morse                                                  Chairman 
Denise Mileham (resigned 3 September 2020)                     Director 
Peter Neville                                                  Director 
Richard Ramsay                              Senior Independent Director 
Hans Rieks                                                     Director 
Stephanie Coxon (appointed 11 June 2020)                       Director 
------------------------------------------  --------------------------- 
 

Re --election of Directors

At the first annual general meeting of the Company on 14 August 2014, all of the Directors offered themselves for re--election and were duly re-elected. In compliance with the provisions of the AIC Code of Corporate Governance, all of the Directors will stand for re-election at each annual general meeting. Having considered the results of the internal performance evaluation for the year ended 31 March 2021, the Directors are satisfied that the Board continues to perform effectively, and that each Director continues to demonstrate commitment to their roles. Each of the Directors has a letter of appointment rather than a service contract.

Directors' interests

Directors who held office during the year and had interests in the shares of the Company as at 31 March 2021 were:

 
                                                    Ordinary      Ordinary 
                                                   shares of     shares of 
                                                no par value  no par value 
                                                   each held     each held 
                                                          at            at 
                                                 31 Mar 2021   31 Mar 2020 
----------------------------------------------  ------------  ------------ 
Richard Morse                                        103,535       103,535 
Stephanie Coxon (appointed 11 June 2020)                   -             - 
Denise Mileham (resigned on 3 September 2020)            n/a        32,340 
Peter Neville                                         29,896        29,896 
Richard Ramsay                                        53,813        53,813 
Hans Rieks                                                 -             - 
----------------------------------------------  ------------  ------------ 
 

There have been no changes in the Directors' interests from 31 March 2021 to the date of this report.

Annual general meeting

The Company's annual general meeting will be held at 10.00am on 2 September 2021 at Sarnia House, Le Truchot, St Peter Port, Guernsey, Channel Islands. Details of the business to be conducted are contained in the notice of annual general meeting. As explained in the Chairman's statement, due to the Covid-19 pandemic the Board advises shareholders against attending the meeting in person and instead voting by proxy.

Appointment of the Investment Adviser

On 1 July 2019, the Company changed Investment Adviser from John Laing Capital Management Limited to Foresight Group. The existing team that had been providing investment advice since JLEN's launch in 2014 transferred to Foresight to continue working with the Company. The material terms, fees and provisions of the Investment Advisory Agreement with Foresight Group are the same as the previous Investment Advisory Agreement with John Laing Capital Management Limited, as set out in note 15 to the financial statements. It is the Directors' opinion that the appointment of Foresight Group on the agreed terms is in the best interests of the shareholders as a whole.

Auditor

The Audit Committee reviews the appointment of the external auditor, its effectiveness and its relationship with the Company and its subsidiaries and joint ventures, which includes monitoring use of the auditor for non--audit services and the balance of audit and non--audit fees paid. Following a review of the independence and effectiveness of the auditor, a resolution will be proposed at the 2021 annual general meeting to reappoint Deloitte LLP.

So far as the Directors are aware, there is no relevant audit information of which the Company's auditor is unaware. Each has taken all the steps necessary, as a Director, to be aware of any relevant audit information and to establish that Deloitte LLP is made aware of any pertinent information. This confirmation is given, and should be interpreted in accordance with, the provisions of Section 249 of the Companies (Guernsey) Law, 2008.

By order of the Board

Richard Morse

Chairman

9 June 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Directors' report and financial statements in accordance with applicable laws and regulations. The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and IFRS as issued by the International Accounting Standards Board, and the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year.

In preparing these financial statements, International Accounting Standard 1 requires that Directors:

   --     properly select and apply accounting policies; 

-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-- provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the European Union and IFRS as issued by the International Accounting Standards Board are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

   --     make an assessment of the Company's ability to continue as a going concern. 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey and the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement

We confirm that to the best of our knowledge:

-- the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

-- the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings taken as a whole, together with a description of the principal risks and uncertainties that we face; and

-- the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

By order of the Board

Richard Morse

Chairman

9 June 2021

INCOME STATEMENT

for the year ended 31 March 2021

 
                                                                              2021      2020 
                                                                   Notes  GBP'000s  GBP'000s 
-----------------------------------------------------------------  -----  --------  -------- 
Operating income and gains/(losses) on fair value of investments       9    14,753   (4,190) 
Operating expenses                                                     5   (6,649)   (6,493) 
-----------------------------------------------------------------  -----  --------  -------- 
Operating profit/(loss)                                                      8,104  (10,683) 
-----------------------------------------------------------------  -----  --------  -------- 
Profit/(loss) before tax                                                     8,104  (10,683) 
Tax                                                                    6         -         - 
-----------------------------------------------------------------  -----  --------  -------- 
Profit/(loss) for the year                                                   8,104  (10,683) 
-----------------------------------------------------------------  -----  --------  -------- 
Earnings/(loss) per share 
Basic and diluted (pence)                                              8       1.5     (2.1) 
-----------------------------------------------------------------  -----  --------  -------- 
 

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

All results are derived from continuing operations.

There is no other comprehensive income in either the current year or the preceding year, other than the profit/(loss) for the year, and therefore no separate statement of comprehensive income has been presented.

STATEMENT OF FINANCIAL POSITION

as at 31 March 2021

 
                                                              2021      2020 
                                                   Notes  GBP'000s  GBP'000s 
-------------------------------------------------  -----  --------  -------- 
Non-current assets 
Investments at fair value through profit or loss       9   504,093   532,941 
-------------------------------------------------  -----  --------  -------- 
Total non -current assets                                  504,093   532,941 
-------------------------------------------------  -----  --------  -------- 
Current assets 
Trade and other receivables                           10        14        31 
Cash and cash equivalents                                    1,874     1,762 
-------------------------------------------------  -----  --------  -------- 
Total current assets                                         1,888     1,793 
-------------------------------------------------  -----  --------  -------- 
Total assets                                               505,981   534,734 
-------------------------------------------------  -----  --------  -------- 
Current liabilities 
Trade and other payables                              11   (1,780)   (1,720) 
-------------------------------------------------  -----  --------  -------- 
Total current liabilities                                  (1,780)   (1,720) 
-------------------------------------------------  -----  --------  -------- 
Total liabilities                                          (1,780)   (1,720) 
-------------------------------------------------  -----  --------  -------- 
Net assets                                                 504,201   533,014 
-------------------------------------------------  -----  --------  -------- 
Equity 
Share capital account                                 13   548,848   548,943 
Retained earnings                                     14  (44,647)  (15,929) 
-------------------------------------------------  -----  --------  -------- 
Equity attributable to owners of the Company               504,201   533,014 
-------------------------------------------------  -----  --------  -------- 
Net assets per share (pence per share)                        92.2      97.5 
-------------------------------------------------  -----  --------  -------- 
 

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

The financial statements were approved by the Board of Directors and authorised for issue on 9 June 2021.

They were signed on its behalf by:

Richard Morse

Chairman

Peter Neville

Director

STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2021

 
                                                                 Year ended 31 Mar 2021 
                                                            --------------------------------- 
                                                            Share capital  Retained 
                                                                  account  earnings     Total 
                                                     Notes       GBP'000s  GBP'000s  GBP'000s 
---------------------------------------------------  -----  -------------  --------  -------- 
Balance at 1 April 2020                                           548,943  (15,929)   533,014 
Profit for the year                                                     -     8,104     8,104 
---------------------------------------------------  -----  -------------  --------  -------- 
Profit and total comprehensive income for the year                      -     8,104     8,104 
Expenses of issue of equity shares                      13           (95)         -      (95) 
Dividends paid                                           7              -  (36,822)  (36,822) 
---------------------------------------------------  -----  -------------  --------  -------- 
Balance at 31 March 2021                                          548,848  (44,647)   504,201 
---------------------------------------------------  -----  -------------  --------  -------- 
 
 
                                                                Year ended 31 Mar 2020 
                                                           --------------------------------- 
                                                           Share capital  Retained 
                                                                 account  earnings     Total 
                                                    Notes       GBP'000s  GBP'000s  GBP'000s 
--------------------------------------------------  -----  -------------  --------  -------- 
Balance at 1 April 2019                                          492,670    27,669   520,339 
Loss for the year                                                      -  (10,683)  (10,683) 
--------------------------------------------------  -----  -------------  --------  -------- 
Loss and total comprehensive expense for the year                      -  (10,683)  (10,683) 
Issue of share capital                                 13         57,157         -    57,157 
Expenses of issue of equity shares                     13          (884)         -     (884) 
Dividends paid                                          7              -  (32,915)  (32,915) 
--------------------------------------------------  -----  -------------  --------  -------- 
Balance at 31 March 2020                                         548,943  (15,929)   533,014 
--------------------------------------------------  -----  -------------  --------  -------- 
 

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

CASH FLOW STATEMENT

for the year ended 31 March 2021

 
                                                                          2021      2020 
                                                               Notes  GBP'000s  GBP'000s 
-------------------------------------------------------------  -----  --------  -------- 
Profit/(loss) from operations                                            8,104  (10,683) 
Adjustments for: 
Investment interest                                                   (28,701)  (28,701) 
Dividends received                                                    (14,900)  (10,600) 
Net loss on investments at fair value through profit or loss            28,848    43,491 
-------------------------------------------------------------  -----  --------  -------- 
Operating cash flows before movements in working capital               (6,649)   (6,493) 
Decrease/(increase) in receivables                                          17      (10) 
Increase in payables                                                        60       157 
-------------------------------------------------------------  -----  --------  -------- 
Net cash outflow used in operating activities                          (6,572)   (6,346) 
-------------------------------------------------------------  -----  --------  -------- 
 
Investing activities 
Investments in subsidiaries                                                  -  (56,400) 
Investment interest                                                     28,701    28,701 
Dividends received                                                      14,900    10,600 
-------------------------------------------------------------  -----  --------  -------- 
Net cash from/(used in) investing activities                            43,601  (17,099) 
-------------------------------------------------------------  -----  --------  -------- 
 
Financing activities 
Proceeds on issue of share capital                                13         -    57,157 
Expenses relating to issue of shares                              13      (95)     (884) 
Dividends paid                                                     7  (36,822)  (32,915) 
Net cash (used in)/from financing activities                          (36,917)    23,358 
 
Net increase/(decrease) in cash and cash equivalents                       112      (87) 
Cash and cash equivalents at beginning of the year                       1,762     1,849 
-------------------------------------------------------------  -----  --------  -------- 
Cash and cash equivalents at end of the year                             1,874     1,762 
-------------------------------------------------------------  -----  --------  -------- 
 

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

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 March 2021

1. General information

JLEN Environmental Assets Group Limited (the "Company" or "JLEN") is a closed--ended investment company domiciled and incorporated in Guernsey, Channel Islands, under Section 20 of the Companies (Guernsey) Law, 2008. The shares are publicly traded on the London Stock Exchange under a premium listing. The audited financial statements of the Company are for the year ended 31 March 2021 and have been prepared on the basis of the accounting policies set out below. The financial statements comprise only the results of the Company, as its investment in JLEN Environmental Assets Group (UK) Limited ("UK HoldCo") is measured at fair value as detailed in the key accounting policies below. The Company and its subsidiaries invest in environmental infrastructure projects that utilise natural or waste resources or support more environmentally friendly approaches to economic activity.

2. Significant accounting policies

(a) Basis of preparation

The financial statements were approved and authorised for issue by the Board of Directors on 9 June 2021. The set of financial statements included in this financial report has been prepared in compliance with the Companies (Guernsey) Law, 2008 and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and IFRS as issued by the International Accounting Standards Board ("IASB") using the historical cost basis, except that the financial instruments classified at fair value through profit or loss are stated at their fair value.

As a result of adopting the amendments to IFRS 10, IFRS 12 and IAS 28 first adopted in the Company's Annual Report to 31 March 2015, the Company is required to hold its subsidiaries that provide investment services at fair value, in accordance with IFRS 9 Financial Instruments: Recognition and Measurement, and IFRS 13 Fair Value Measurement. The Company accounts for its investment in its wholly owned direct subsidiary UK HoldCo at fair value. The Company, together with its wholly owned direct subsidiary UK HoldCo and the intermediate holding subsidiary HWT Limited, comprise the Group (the "Group") investing in environmental infrastructure assets.

The net assets of the intermediate holding companies (comprising UK HoldCo and HWT Limited), which at 31 March 2021 principally comprise working capital balances, the revolving credit facility and investments in projects, are required to be included at fair value in the carrying value of investments.

Consequently, the Company does not consolidate its subsidiaries or apply IFRS 3 Business Combinations when it obtains control of another entity as it is considered to be an investment entity under IFRS. Instead, the Company measures its investment in its subsidiary at fair value through profit or loss.

The financial statements incorporate the financial statements of the Company only.

UK HoldCo is itself an investment entity. Consequently, the Company need not have an exit strategy for its investment in UK HoldCo.

Each investment indirectly held has a finite life. For the PPP assets, the shareholder debt will mature towards the end of the concession, and at the end of the concession the investment will be dissolved. In the case of renewable energy assets, the life of the project is based on the expected asset life and the land lease term, after which the investment will also be dissolved. The exit strategy is that investments will normally be held to the end of the concession, unless the Company sees an opportunity in the market to dispose of investments. Foresight Group, the Company's Investment Adviser, and the Company's Board regularly consider whether any disposals should be made.

The Directors continue to consider that the Company demonstrates the characteristics and meets the requirements to be considered as an investment entity.

The following standards which have not been applied in these financial statements were in issue but not yet effective:

-- Covid-19-Related Rent Concessions - Amendment to IFRS 16 (applicable for annual periods beginning on or after 1 June 2020);

-- Covid-19-Related Rent Concessions beyond 30 June 2021 - Amendment to IFRS 16 (applicable for annual periods beginning on or after 1 April 2021);

-- Interest Rate Benchmark Reform - Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (applicable for annual periods beginning on or after 1 January 2021);

-- Reference to the Conceptual Framework - Amendments to IFRS 3 (applicable for annual periods beginning on or after 1 January 2022);

-- Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16 (applicable for annual periods beginning on or after 1 January 2022);

-- Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37 (applicable for annual periods beginning on or after 1 January 2022);

-- AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a First-time Adopter (applicable for annual periods beginning on or after 1 January 2022);

-- AIP IFRS 9 Financial Instruments - Fees in the '10 per cent' Test for Derecognition of Financial Liabilities (applicable for annual periods beginning on or after 1 January 2022);

-- AIP IAS 41 Agriculture - Taxation in Fair Value Measurements (applicable for annual periods beginning on or after 1 January 2022);

-- IFRS 17 Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023);

-- Classification of Liabilities as Current or Non-current - Amendments to IAS 1 (applicable for annual periods beginning on or after 1 January 2023);

-- Definition of Accounting Estimates - Amendments to IAS 8 (applicable for annual periods beginning on or after 1 January 2023);

-- Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 (applicable for annual periods beginning on or after 1 January 2023); and

-- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 (applicable for annual periods beginning on or after 1 January 2023).

The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Company in future periods.

The following standards became effective during the year and did not have a material impact on the Company's reported results:

-- amendments to IAS 1 and IAS 8 - Definition of Material (applicable for annual periods beginning on or after 1 January 2020);

-- amendments to References to the Conceptual Framework in IFRS Standards (applicable for annual periods beginning on or after 1 January 2020);

-- amendments to IFRS 3 Business Combinations (applicable for annual periods beginning on or after 1 January 2020); and

-- amendments to IFRS 9, IAS 39 and IFRS 17 - Interest Rate Benchmark Reform (applicable for annual periods beginning on or after 1 January 2020).

(b) Going concern

The Directors, in their consideration of going concern, have reviewed comprehensive cash flow forecasts prepared by the Company's Investment Adviser, which includes the result of the reverse stress test and a downside case with significant reduction of projects' yields under severe power price and generation volume assumptions, and believe, based on those forecasts, the assessment of the Company's subsidiary's banking facilities and the assessment of the principal risks described in this report, including those related to Covid-19, that it is appropriate to prepare the financial statements of the Company on the going concern basis. In arriving at their conclusion that the Company has adequate financial resources, the Directors were mindful that the Group had unrestricted cash of GBP13.5 million (including GBP1.9 million in the Company) as at 31 March 2021 and a renewed RCF (available for investment in new or existing projects and working capital) of GBP170 million and an uncommitted accordion facility of up to GBP30 million expiring in May 2024.

As at 31 March 2021, the Company's wholly owned subsidiary UK HoldCo had borrowed GBP82.0 million under the facility. At the date of signing this Annual Report and financial statements, the Group had borrowed GBP110.6 million under the new RCF and had an additional borrowing capacity of GBP59.4 million.

All key financial covenants are forecast to continue to be complied with throughout the next year.

The Directors are satisfied that the Company has sufficient resources to continue to operate for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

Refer to the report of the Directors for further information.

(c) Revenue recognition - Operating income and gains/(losses) on fair value of investments

Operating income and gains/(losses) on fair value of investments in the income statement represents gains or losses that arise from the movement in the fair value of the Company's investment in UK HoldCo, dividend income and interest received from UK HoldCo. Dividends from UK HoldCo are recognised when the Company's right to receive payment has been established. Interest income is accrued by reference to the loan principal outstanding, applicable interest rate, and in accordance with the loan note agreement. Refer to note 9 for details.

(d) Taxation

Under the current system of taxation in Guernsey, the Company itself is exempt from paying taxes on income, profits or capital gains. Dividend income and interest income received by the Company may be subject to withholding tax imposed in the country of origin of such income. The underlying intermediate holding companies and project companies in which the Company invests provide for and pay taxation at the appropriate rates in the countries in which they operate. This is taken into account when assessing the fair value of the Company's investments.

(e) 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. Bank overdrafts that are repayable on demand are included as a component of cash and cash equivalents for the purpose of the cash flow statements. Deposits held with original maturities of greater than three months are included in other financial assets.

(f) 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 derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred and the transfer qualifies for derecognition in accordance with IFRS 9 Financial Instruments.

I) 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 results of the 'solely payments of principal and interest' and the business model test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including how the performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these are managed and how management are compensated. Monitoring is part of the Company's continuous assessment of whether the business model for which the remaining financial assets are held continues to be appropriate and if it is not appropriate whether there has been a change in business model and so a prospective change to the classification of those assets..

i) Investments at fair value through profit or loss

Investments at fair value through profit or loss are recognised upon initial recognition as financial assets at fair value through profit or loss in accordance with IFRS 10. In these financial statements, investments at fair value through profit or loss is the fair value of the Company's subsidiary, UK HoldCo, which comprises the fair value of UK HoldCo and HWT Limited and the environmental infrastructure investments.

The intermediate holding companies' net assets (UK HoldCo and HWT Limited) are mainly composed of cash, working capital balances and borrowings under the Company's wholly owned direct subsidiary's revolving credit facility, and are recognised at fair value, which is equivalent to their net assets. Although the working capital and the revolving credit facility outstanding balance are measured at amortised costs, their fair values do not materially differ from their amortised costs.

The Company's investment in UK HoldCo comprises both equity and loan notes. Both elements are exposed to the same primary risk, being performance risk. This performance risk is taken into consideration when determining the discount rate applied to the forecast cash flows. In determining fair value, the Board considered observable market transactions and has measured fair value using assumptions that market participants would use when pricing the asset, including assumptions regarding risk. The loan notes and equity are considered to have the same risk characteristics. As such, the debt and equity form a single class of financial instrument for the purposes of disclosure. The Company measures its investment as a single class of financial asset at fair value in accordance with IFRS 13 Fair Value Measurement.

ii) 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 "loans and other 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 classified as non--current assets. The Company's loans and receivables comprise "trade and other receivables" and "cash and cash equivalents" in the statement of financial position.

The loan notes issued by the Company's wholly owned subsidiary UK HoldCo are held at fair value, which is included in the balance of the investments at fair value through profit or loss in the statement of financial position.

II) 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.

i) Equity instruments

Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares that would otherwise have been avoided are written off against the balance of the share capital account as permitted by Companies (Guernsey) Law, 2008.

ii) Financial liabilities

Financial liabilities are classified as other financial liabilities, comprising:

-- loans and borrowings which are recognised initially at the fair value of the consideration received, less transaction costs. Subsequent to initial recognition, loans and borrowings are stated at amortised cost, with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis; and

-- other non--derivative financial instruments, including trade and other payables, which are measured at amortised cost using the effective interest method less any impairment losses.

Financial guarantee contracts are only recognised as a financial liability when it becomes probable that the guarantee will be called upon in the future. The liability is measured at fair value and subsequently in accordance with the expected credit loss model under IFRS 9. The fair value of financial guarantees is determined based on the present value of the difference in cash flows between contracted payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.

III) 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.

IV) Fair value estimation for investments at fair value

The Company's investments at fair value are not traded in active markets.

Fair value is calculated by discounting at an appropriate discount rate future cash flows expected to be received by the Company's intermediate holdings, from investments in both equity (dividends and equity redemptions), shareholder and inter-company loans (interest and repayments). The discount rates used in the valuation exercise represent the Investment Adviser's and the Board's 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. The discount rates that have been applied to the financial assets at 31 March 2021 were in the range 5.5% to 13% (31 March 2020: 6.0% to 9.2%). Refer to note 9 for details of the areas of estimation in the calculation of the fair value.

For subsidiaries which provide management/investment--related services, the fair value is estimated to be the net assets of the relevant companies, which principally comprise cash, loans and working capital balances.

(g) Segmental reporting

The Board is of the opinion that the Company is engaged in a single segment of business, being investment in environmental infrastructure to generate investment returns while preserving capital. The financial information used by the Board to allocate resources and manage the Company presents the business as a single segment comprising a homogeneous portfolio.

(h) Statement of compliance

Pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987 the Company is a registered closed--ended investment scheme. As a registered scheme, the Company is subject to certain ongoing obligations to the Guernsey Financial Services Commission, and is governed by the Companies (Guernsey) Law, 2008 as amended.

3. Critical accounting judgements, estimates 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. Actual results may differ from these estimates.

Key sources of estimation uncertainty

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Investments at fair value through profit or loss

The fair value of environmental infrastructure investments is calculated by discounting at an appropriate discount rate future cash flows expected to be received by the Company's intermediate holdings, from investments in both equity (dividends and equity redemptions), shareholder and inter-company loans (interest and repayments). Estimates such as the cash flows are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the fair value of assets not readily available from other sources. Actual results may differ from these estimates.

Discount rates used in the valuation represent the Investment Adviser's and the Board's assessment of the rate of return in the market for assets with similar characteristics and risk profile. The discount rate is deemed to be one of the most significant unobservable inputs and any change could have a material impact on the fair value of investments. Underlying assumptions and discount rates are disclosed in note 9 and sensitivity analysis is disclosed in note 16.

The forward-looking power price forecasts are also a source of key estimation uncertainty. During the year the Board agreed to add a third market consultant's curve into the blended forward curve, and also introduced an adjustment for price cannibalisation, to provide a more robust forecast. Information on the sensitivity of the portfolio valuation to movements in power price is disclosed in note 16.

Critical accounting judgements

Equity and debt investment in UK HoldCo

In applying their judgement, the Directors have satisfied themselves that the equity and debt investments in UK HoldCo share the same investment characteristics and, as such, constitute a single asset class for IFRS 7 disclosure purposes. Please refer to the accounting policies in note 2 for further detail.

Investment entities

The Directors consider that the Company demonstrates the characteristics and meets the requirements to be considered as an investment entity. Please refer to the accounting policies in note 2 for further detail.

4. Seasonality

Neither operating income nor profit are impacted significantly by seasonality. While meteorological conditions resulting in fluctuation in the levels of wind and sunlight can affect revenues of the Company's environmental infrastructure projects, due to the diversified mix of projects, these fluctuations do not materially affect the Company's operating income or profit.

5. Operating expenses

 
                                 Year ended    Year ended 
                                31 Mar 2021   31 Mar 2020 
                                   GBP'000s      GBP'000s 
-----------------------------  ------------  ------------ 
Investment advisory fees              5,563         5,500 
Directors' fees and expenses            264           253 
Administration fee                      112           122 
Other expenses                          710           618 
-----------------------------  ------------  ------------ 
                                      6,649         6,493 
-----------------------------  ------------  ------------ 
 

The Company had no employees during the year (31 March 2020: nil). There was no Directors' remuneration for the year other than Directors' fees as detailed in note 15 (31 March 2020: nil).

Included within other expenses is an amount of GBP105,000 to Deloitte LLP for the audit of the Company for the year ended 31 March 2021 (year ended 31 March 2020: GBP84,600).

The Company paid GBP30,100 during the year for non--audit services to Deloitte LLP, all in relation to the half-year interim review (year ended 31 March 2020: GBP27,400 paid to Deloitte LLP).

6. Tax

Income tax expense

The Company has obtained exempt status from income tax in Guernsey under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. JLEN is charged an annual exemption fee of GBP1,200.

The income from its investments is therefore not subject to any further tax in Guernsey, although the investments provide for and pay taxation at the appropriate rates in the countries in which they operate. The underlying tax within the subsidiaries and environmental infrastructure assets, which are held as investments at fair value through profit or loss, are included in the estimate of the fair value of these investments.

7. Dividends

 
                                                                                              Year ended    Year ended 
                                                                                             31 Mar 2021   31 Mar 2020 
                                                                                                GBP'000s      GBP'000s 
------------------------------------------------------------------------------------------  ------------  ------------ 
Amounts recognised as distributions to equity holders during the year (pence per share): 
Final dividend for the year ended 31 March 2020 of 1.665 (31 March 2019: 1.6275)                   9,103         8,090 
Interim dividend for the quarter ended 30 June 2020 of 1.69 (30 June 2019: 1.6650)                 9,240         8,275 
Interim dividend for the quarter ended 30 September 2020 of 1.69 (30 September 2019: 
 1.6650)                                                                                           9,240         8,275 
Interim dividend for the quarter ended 31 December 2020 of 1.69 (31 December 2019: 1.6650)         9,240         8,275 
------------------------------------------------------------------------------------------  ------------  ------------ 
                                                                                               36,822(1)        32,915 
------------------------------------------------------------------------------------------  ------------  ------------ 
 
   (1)   Total may not cast due to rounding. 

A dividend for the quarter ended 31 March 2021 of 1.69 pence per share was approved by the Board on 29 April 2021 and is payable on 25 June 2021. Following the issuance of 54.6 million shares on 17 May 2021, the dividend payable amounts to GBP10.2 million. The dividend has not been included as a liability at 31 March 2021.

8. Earnings/(loss) per share

Earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the time weighted average number of ordinary shares in issue during the year:

 
                                                                                              Year ended    Year ended 
                                                                                             31 Mar 2021   31 Mar 2020 
                                                                                                GBP'000s      GBP'000s 
------------------------------------------------------------------------------------------  ------------  ------------ 
Earnings/(loss) 
Earnings/(loss) for the purposes of basic and diluted earnings per share, 
being net profit/(loss) attributable to owners of the Company                                      8,104      (10,683) 
Number of shares 
Time weighted average number of ordinary shares for the purposes of basic and diluted 
 earnings 
 per share                                                                                   546,720,025   500,820,530 
------------------------------------------------------------------------------------------  ------------  ------------ 
 

The denominator for the purposes of calculating both basic and diluted earnings per share is the same, as the Company has not issued any share options or other instruments that would cause dilution.

 
                                              Pence  Pence 
--------------------------------------------  -----  ----- 
Basic and diluted earnings/(loss) per share     1.5  (2.1) 
--------------------------------------------  -----  ----- 
 

9. Investments at fair value through profit or loss

As set out in note 2, the Company accounts for its interest in its 100% owned subsidiary UK HoldCo as an investment at fair value through profit or loss. UK HoldCo in turn owns investments in intermediate holding companies and environmental infrastructure projects.

The table below shows the movement in the Company's investment in UK HoldCo as recorded on the Company's statement of financial position:

 
                                                         31 Mar 2021   31 Mar 2020 
                                                            GBP'000s      GBP'000s 
-------------------------------------------------------  -----------  ------------ 
Fair value of environmental infrastructure investments       571,414       537,094 
Fair value of intermediate holding companies                (67,321)       (4,153) 
-------------------------------------------------------  -----------  ------------ 
Total fair value of investments                              504,093       532,941 
-------------------------------------------------------  -----------  ------------ 
 

Reconciliation of movement in fair value of portfolio of assets

The table below shows the movement in the fair value of the Company's portfolio of environmental infrastructure assets. These assets are held through other intermediate holding companies. The table also presents a reconciliation of the fair value of the asset portfolio to the Company's statement of financial position as at 31 March 2021, by incorporating the fair value of these intermediate holding companies.

 
                                                Cash, working                               Cash, working 
                                             capital and debt                            capital and debt 
                                  Portfolio   in intermediate                 Portfolio   in intermediate 
                                      value          holdings        Total        value          holdings        Total 
                                31 Mar 2021       31 Mar 2021  31 Mar 2021  31 Mar 2020       31 Mar 2020  31 Mar 2020 
                                   GBP'000s          GBP'000s     GBP'000s     GBP'000s          GBP'000s     GBP'000s 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
Opening balance                     537,094           (4,153)      532,941      523,558           (3,526)      520,032 
Acquisitions 
Portfolio of assets acquired         62,962                 -       62,962       60,276                 -       60,276 
Post-acquisition price 
 adjustments                              -                 -            -      (2,407)                 -      (2,407) 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
                                     62,962                 -       62,962       57,869                 -       57,869 
Growth in portfolio(1)               19,588                 -       19,588          629                 -          629 
Yields from portfolio to 
 intermediate holding 
 companies                         (48,230)            48,230            -     (44,962)            44,962            - 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
Yields from intermediate 
holding companies 
Interest on loan notes(1)                 -          (28,701)     (28,701)            -          (28,701)     (28,701) 
Dividend payments from UK 
 HoldCo to the Company(1)                 -          (14,900)     (14,900)            -          (10,600)     (10,600) 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
                                          -          (43,601)     (43,601)            -          (39,301)     (39,301) 
Other movements 
Investment in working capital 
 in UK HoldCo                             -          (10,327)     (10,327)            -            11,189       11,189 
Expenses borne by intermediate 
 holding companies(1)                     -           (4,835)      (4,835)            -           (4,819)      (4,819) 
Drawdown of UK HoldCo 
 revolving credit facility 
 borrowings                               -          (52,635)     (52,635)            -          (12,658)     (12,658) 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
Fair value of the Company's 
 investment in UK HoldCo            571,414          (67,321)      504,093      537,094           (4,153)      532,941 
------------------------------  -----------  ----------------  -----------  -----------  ----------------  ----------- 
 

(1) The net loss on investments at fair value through profit or loss for the year ended 31 March 2021 is GBP28,848,000 (31 March 2020: net loss of GBP43,491,000). This, together with interest received on loan notes of GBP28,701,000 (31 March 2020: GBP28,701,000) and dividend income of GBP14,900,000 (31 March 2020: GBP10,600,000) comprises operating income and gains/(losses) on fair value of investments in the income statement.

The balances in the table above represent the total net movement in the fair value of the Company's investment. The "cash, working capital and debt in intermediate holding companies" balances reflect investment in, distributions from or movements in working capital and are not value generating.

Fair value of portfolio of assets

The Investment Adviser has carried out fair market valuations of the investments as at 31 March 2021. The Directors have satisfied themselves as to the methodology used and the discount rates applied for the valuation. Investments are all investments in environmental infrastructure projects and are valued using a discounted cash flow methodology, being the most relevant and most commonly used method in the market to value similar assets to the Company's. The Company's holding of its investment in UK HoldCo represents its interest in both the equity and debt instruments. The equity and debt instruments are valued as a whole using a blended discount rate and the value attributed to the equity instruments represents the fair value of future dividends and equity redemptions in addition to any value enhancements arising from the timing of loan principal and interest receipts from the debt instruments, while the value attributed to the debt instruments represents the principal outstanding and interest due on the loan at the valuation date.

The valuation techniques and methodologies have been applied consistently with the valuations performed since the launch of the Fund in March 2014.

Discount rates applied to the portfolio of assets range from 5.5% to 13.0% (31 March 2020: 6.0% to 9.2%). The weighted average discount rate of the portfolio at 31 March 2021 is 7.3% (31 March 2020: 7.4%).

The following economic assumptions have been used in the discounted cash flow valuations:

 
                                               31 Mar 2021                           31 Mar 2020 
----------------------------  ----------------------------  ------------------------------------ 
UK - inflation rates            3% for 2021, decreasing to  2.17% for 2020, gradually increasing 
                                           2.25% from 2031                    to 2.75% from 2025 
France - inflation rates                              1.5%                                  1.5% 
UK - deposit interest rates   0.25% for 2021, rising to 1%      1.75% for 2020, gradually rising 
                                                 from 2025                     to 2.5% from 2021 
France - deposit rates                                0.5%                                  0.5% 
Euro/sterling exchange rate                           1.17                                  1.12 
----------------------------  ----------------------------  ------------------------------------ 
 

The UK corporation tax rate assumed in the 31 March 2021 portfolio valuation is 19% (31 March 2020: 19%), increasing to 25% from April 2023 for the remainder of the life of the portfolio. The equivalent rate for the French assets is 28%, stepping down to 25% from 2022.

Refer to note 16 for details of the sensitivity of the portfolio to movements in the discount rate and economic assumptions.

The assets in the intermediate holding companies substantially comprise working capital, cash balances and the outstanding revolving credit facility debt; therefore, the Directors consider the fair value to be equal to the amortised cost.

Details of environmental infrastructure project investments were as follows:

 
                         % holding at 31 Mar    % holding at 31 Mar 
                                 2021                   2020 
                        ---------------------  --------------------- 
                                  Shareholder            Shareholder 
Project name             Equity          loan   Equity          loan 
----------------------  -------  ------------  -------  ------------ 
Amber                      100%          100%     100%          100% 
Bilsthorpe                 100%          100%     100%          100% 
Bio Collectors              70%          100%      70%          100% 
Branden                    100%          100%     100%          100% 
Burton Wold Extension      100%          100%     100%          100% 
Carscreugh                 100%          100%     100%          100% 
Castle Pill                100%          100%     100%          100% 
CNG Foresight               25%           25%        -             - 
Codford                    100%           n/a        -             - 
CSGH                       100%          100%     100%          100% 
Dungavel                   100%          100%     100%          100% 
Egmere Energy              100%          100%     100%          100% 
ELWA                        80%           80%      80%           80% 
Ferndale                   100%          100%     100%          100% 
Grange Farm                100%          100%     100%          100% 
Hall Farm                  100%          100%     100%          100% 
Icknield                    53%          100%      53%          100% 
Le Placis Vert             100%          100%     100%          100% 
Llynfi                     100%          100%     100%          100% 
Biogas Meden               100%          100%     100%          100% 
Merlin Renewables          100%          100%     100%          100% 
Moel Moelogan              100%          100%     100%          100% 
Monksham                   100%          100%     100%          100% 
New Albion Wind Farm       100%          100%     100%          100% 
Northern Hydro             100%           n/a        -             - 
Panther                    100%          100%     100%          100% 
Peacehill                   49%          100%        -             - 
Plouguernével         100%          100%     100%          100% 
Pylle Southern             100%          100%     100%          100% 
Rainworth                  100%          100%        -             - 
Tay                         33%           33%      33%           33% 
Vulcan                     100%          100%     100%          100% 
Warren                     100%          100%     100%          100% 
Wear Point                 100%          100%     100%          100% 
West Gourdie               100%           n/a        -             - 
Yorkshire Hydro            100%           n/a     100%           n/a 
----------------------  -------  ------------  -------  ------------ 
 

Additionally, the fair value of the portfolio of assets includes the Fund's investment into FEIP.

Details of investments made during the year

On 2 April 2020, the Group acquired a 49% stake in Peacehill Gas Limited, an anaerobic digestion plant, for a total of GBP11 million.

On 18 September 2020, the Group acquired Northern Hydropower Limited, which holds the rights to two operational hydro projects and an operational battery storage system. The total consideration was GBP4.7 million.

On 4 December 2020, the Group acquired a 25% stake in a portfolio of five CNG refuelling stations, located in the UK. The total commitment over the next two to five years is expected to be up to GBP20 million.

On 4 February 2021, the Group acquired Codford Biogas Limited, an anaerobic digestion plant based in Wiltshire, for GBP19.8 million

.

On 3 March 2021, the Group acquired a 100% equity stake in Gigabox South Road Limited. The project holds the development rights to construct a 50MW lithium-ion battery energy storage plant, based in Dundee, UK. The Group will invest up to GBP21.2 million over a 12 to 15-month period.

On 23 March 2021, the Group acquired Rainworth Energy Limited, an anaerobic digestion plant based in Nottinghamshire, UK, for a consideration of GBP5.8 million.

During the year, the Group also invested a further EUR3.7 million towards its commitment to FEIP and a further GBP2.5 million towards its commitment to the Vulcan Renewables project expansion.

10. Trade and other receivables

 
                       31 Mar 2021   31 Mar 2020 
                          GBP'000s      GBP'000s 
--------------------  ------------  ------------ 
Prepayments                     14            31 
--------------------  ------------  ------------ 
Balance at 31 March             14            31 
--------------------  ------------  ------------ 
 

11. Trade and other payables

 
                       31 Mar 2021   31 Mar 2020 
                          GBP'000s      GBP'000s 
--------------------  ------------  ------------ 
Accruals                     1,780         1,720 
--------------------  ------------  ------------ 
Balance at 31 March          1,780         1,720 
--------------------  ------------  ------------ 
 

12. Loans and borrowings

The Company had no outstanding loans or borrowings at 31 March 2021 (31 March 2020: GBPnil), as shown in the Company's statement of financial position.

At the balance sheet date, the Company's immediate subsidiary, UK HoldCo, as Borrower, and the Company, as Guarantor, benefit from a three--year revolving credit facility with HSBC, ING, NIBC and Santander which provides for a committed revolving credit facility of GBP130 million and an accordion facility of up to GBP60 million, of which GBP40 million has been exercised. The facility margin is 200 to 225 bps (depending on the loan-to-value ratio for the Fund) over LIBOR. The facility will be used to finance the acquisitions of environmental infrastructure projects and to cover working capital requirements.

As at 31 March 2021, UK HoldCo had an outstanding balance of GBP82.0 million under the facility (31 March 2020: GBP29.3 million). The loan bears interest of LIBOR + 200 to 225 bps and is intended to be repaid by proceeds from future capital raises.

As at 31 March 2021, the Company held loan notes of GBP318.9 million which were issued by UK HoldCo (31 March 2020: outstanding amount of GBP318.9 million).

On 21 May 2021, JLEN refinanced its revolving credit facility with a new three-year facilities agreement which provides for a committed multi-currency revolving credit facility of GBP170 million and an uncommitted accordion facility of up to GBP30 million.

The interest charged in respect of the renewed RCF is linked to the Company's ESG performance, with JLEN incurring a premium or discount to its margin and commitment fee based on performance against defined targets. Those targets include:

   --     environmental: increase in the volume of clean energy produced; 
   --     social: the value of contributions to community funds; and 

-- governance: maintaining a low number of work-related accidents, as defined under the Reporting of Injuries, Diseases and Dangerous Occurrences ("RIDDOR") by the Health and Safety Executive.

Performance against these targets will be measured annually with the cost of the RCF being amended in the following financial year.

Lenders to the facility include three of the four previous lenders (HSBC, ING and NIBC) plus two new participants (National Australia Bank and Royal Bank of Scotland International). The margin can vary between 195 bps and 205 bps over SONIA ("Sterling Overnight Index Average") for sterling drawings and EURIBOR for euro drawings, depending on performance against the ESG targets.

As at the date of signing this report, UK Holdco had an outstanding balance of GBP110.6 million under the new facility.

There were no other outstanding loans and borrowings in either the Company, UK HoldCo or HWT at 31 March 2021.

13. Share capital account

 
                                                     Number of  31 Mar 2021  31 Mar 2020 
                                                        shares     GBP'000s     GBP'000s 
-------------------------------------------------  -----------  -----------  ----------- 
Opening balance at 1 April 2020                    546,720,025      548,943      492,670 
Shares issued in the year                                    -            -       57,157 
Expenses of February 2020 issue of equity shares             -         (95)        (884) 
-------------------------------------------------  -----------  -----------  ----------- 
Balance at 31 March 2021                           546,720,025      548,848      548,943 
-------------------------------------------------  -----------  -----------  ----------- 
 

After the balance sheet date, on 17 May 2021, the Company issued 54,672,002 new ordinary shares. The total number of ordinary shares at the date of signing this report is 601,392,027 ordinary shares.

14. Retained earnings

 
                              31 Mar 2021   31 Mar 2020 
                                 GBP'000s      GBP'000s 
---------------------------  ------------  ------------ 
Opening balance                  (15,929)        27,669 
Profit/(loss) for the year          8,104      (10,683) 
Dividends paid                   (36,822)      (32,915) 
---------------------------  ------------  ------------ 
Balance at 31 March              (44,647)      (15,929) 
---------------------------  ------------  ------------ 
 

15. Transactions with the Investment Adviser and related parties

Transactions between the Company and its subsidiaries, which are related parties of the Company, are fair valued and are disclosed within note 9. Details of transactions between the Company and related parties are disclosed below. This note also details the terms of the Company's engagement with Foresight Group as Investment Adviser.

Transactions with the Investment Adviser

Foresight Group is the Company's Investment Adviser. Foresight's appointment as Investment Adviser is governed by an Investment Advisory Agreement.

Foresight Group is entitled to a base fee equal to:

a) 1.0% per annum of the Adjusted Portfolio Value(1) of the Fund(2) up to and including GBP500 million; and

   b)   0.8% per annum of the Adjusted Portfolio Value of the Fund in excess of GBP500 million. 

The total Investment Adviser fee charged to the income statement for the year ended 31 March 2021 was GBP5,563,054 (31 March 2020: GBP5,499,712), of which GBP1,440,832 remained payable as at 31 March 2021 (31 March 2020: GBP1,367,079).

   (1)   "Adjusted Portfolio Value" is defined in the Investment Advisory Agreement as: 
   a)    the fair value of the investment portfolio; plus 
   b)    any cash owned by or held to the order of the Fund; plus 

c) the aggregate amount of payments made to shareholders by way of dividend in the quarterly period ending on the relevant valuation day, less

   i.     any other liabilities of the Fund (excluding borrowings); and 
   ii.    any uninvested cash. 

(2) "Fund" means the Company and JLEN Environmental Assets Group (UK) Limited together with their wholly owned subsidiaries or subsidiary undertakings (including companies or other entities wholly owned by them together, individually or in any combination, as appropriate) but excluding project entities.

Transactions with related parties

During the year, the Directors of the Company, who are considered to be key management, received fees of GBP263,754 (31 March 2020: GBP244,698) for their services. The Directors of the Company were also paid GBP355 of expenses (31 March 2020: GBP7,844).

The Directors held the following shares:

 
                   Ordinary shares  Ordinary shares 
                   of no par value  of no par value 
                      each held at     each held at 
                       31 Mar 2021      31 Mar 2020 
-----------------  ---------------  --------------- 
Richard Morse              103,535          103,535 
Denise Mileham                 n/a           32,340 
Peter Neville               29,896           29,896 
Richard Ramsay              53,813           53,813 
Hans Joern Rieks                 -                - 
Stephanie Coxon                  -                - 
-----------------  ---------------  --------------- 
 

All of the above transactions were undertaken on an arm's length basis.

The Directors were paid dividends in the year of GBP13,696 (31 March 2020: GBP16,522).

16. Financial instruments

Financial instruments by category

The Company held the following financial instruments at fair value at 31 March 2021. There have been no transfers of financial instruments between levels of the fair value hierarchy. There are no non--recurring fair value measurements.

 
                                                                             31 Mar 2021 
                                               ----------------------------------------------------------------------- 
                                                                                   Financial       Financial 
                                                                   Financial  assets at fair  liabilities at 
                                                    Cash and  assets held at   value through       amortised 
                                               bank balances  amortised cost  profit or loss            cost     Total 
                                                    GBP'000s        GBP'000s        GBP'000s        GBP'000s  GBP'000s 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Non --current assets 
Investments at fair value through profit or 
 loss (Level 3)                                            -               -         504,093               -   504,093 
Current assets 
Trade and other receivables                                -              14               -               -        14 
Cash and cash equivalents                              1,874               -               -               -     1,874 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Total financial assets                                 1,874              14         504,093               -   505,981 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Current liabilities 
Trade and other payables                                   -               -               -         (1,780)   (1,780) 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Total financial liabilities                                -               -               -         (1,780)   (1,780) 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Net financial instruments                              1,874              14         504,093         (1,780)   504,201 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
 
 
                                                                             31 Mar 2020 
                                               ----------------------------------------------------------------------- 
                                                                                   Financial       Financial 
                                                                   Financial  assets at fair  liabilities at 
                                                    Cash and  assets held at   value through       amortised 
                                               bank balances  amortised cost  profit or loss            cost     Total 
                                                    GBP'000s        GBP'000s        GBP'000s        GBP'000s  GBP'000s 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Non --current assets 
Investments at fair value through profit or 
 loss (Level 3)                                            -               -         532,941               -   532,941 
Current assets 
Trade and other receivables                                -              31               -               -        31 
Cash and cash equivalents                              1,762               -               -               -     1,762 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Total financial assets                                 1,762              31         532,941               -   534,734 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Current liabilities 
Trade and other payables                                   -               -               -         (1,720)   (1,720) 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Total financial liabilities                                -               -               -         (1,720)   (1,720) 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
Net financial instruments                              1,762              31         532,941         (1,720)   533,014 
---------------------------------------------  -------------  --------------  --------------  --------------  -------- 
 

The Company's investments at fair value through profit or loss are classified at Level 3 within the IFRS fair value hierarchy.

The Level 3 fair value measurements derive from valuation techniques that include inputs to the asset or liability that are not based on observable market data (unobservable inputs).

In the tables above, financial instruments are held at carrying value as an approximation to fair value unless stated otherwise.

Reconciliation of Level 3 fair value measurement of financial assets and liabilities

An analysis of the movement between opening and closing balances of the investments at fair value through profit or loss is given in note 9.

The fair value of the investments at fair value through profit or loss includes the use of Level 3 inputs. Please refer to note 9 for details of the valuation methodology.

Sensitivity analysis of the portfolio

The discount rate is considered the most significant unobservable input through which an increase or decrease would have a material impact on the fair value of the investments at fair value through profit or loss.

The sensitivity of the portfolio to movements in the discount rate is as follows:

 
31 March 2021 
-----------------------------  ------------------  ---------  ------------------ 
Discount rate                          Minus 0.5%  Base 7.3%           Plus 0.5% 
Change in portfolio valuation  Increases GBP18.8m  GBP571.4m  Decreases GBP17.8m 
Change in NAV per share            Increases 3.4p      92.2p      Decreases 3.3p 
-----------------------------  ------------------  ---------  ------------------ 
 
 
31 March 2020 
-----------------------------  ------------------  ---------  ------------------ 
Discount rate                          Minus 0.5%  Base 7.4%           Plus 0.5% 
Change in portfolio valuation  Increases GBP19.6m  GBP537.1m  Decreases GBP18.5m 
Change in NAV per share            Increases 3.6p      97.5p      Decreases 3.4p 
-----------------------------  ------------------  ---------  ------------------ 
 

The sensitivity of the portfolio to movements in long-term inflation rates is as follows:

 
31 March 2021 
-----------------------------  ------------------  ------------------  ------------------ 
Inflation rates                        Minus 0.5%  Base 3% then 2.25%           Plus 0.5% 
Change in portfolio valuation  Decreases GBP19.0m           GBP571.4m  Increases GBP19.7m 
Change in NAV per share            Decreases 3.5p               92.2p      Increases 3.6p 
-----------------------------  ------------------  ------------------  ------------------ 
 
 
31 March 2020 
-----------------------------  ------------------  ----------  ------------------ 
Inflation rates                        Minus 0.5%  Base 2.75%           Plus 0.5% 
Change in portfolio valuation  Decreases GBP21.4m   GBP537.1m  Increases GBP22.3m 
Change in NAV per share            Decreases 3.9p       97.5p      Increases 4.1p 
-----------------------------  ------------------  ----------  ------------------ 
 

Wind and solar assets are subject to electricity price and electricity generation risks. The sensitivities of the investments to movements in the level of electricity output and electricity price are as follows:

The fair value of the investments is based on a "P50" level of electricity generation for the renewable energy assets, being the expected level of generation over the long term.

The sensitivity of the portfolio to movements in energy yields based on an assumed "P90" level of electricity generation (i.e. a level of generation that is below the "P50", with a 90% probability of being exceeded) and an assumed "P10" level of electricity generation (i.e. a level of generation that is above the "P50", with a 10% probability of being achieved) is as follows:

 
31 March 2021 
-----------------------------  ------------------  ---------  ------------------ 
Energy yield: wind                  P90 (10 year)   Base P50       P10 (10 year) 
Change in portfolio valuation  Decreases GBP24.4m  GBP571.4m  Increases GBP25.0m 
Change in NAV per share            Decreases 4.5p      92.2p      Increases 4.6p 
-----------------------------  ------------------  ---------  ------------------ 
 
 
Energy yield: solar                P90 (10 year)   Base P50      P10 (10 year) 
Change in portfolio valuation  Decreases GBP6.4m  GBP571.4m  Increases GBP7.1m 
Change in NAV per share           Decreases 1.2p      92.2p     Increases 1.3p 
-----------------------------  -----------------  ---------  ----------------- 
 
 
31 March 2020 
-----------------------------  ------------------  ---------  ------------------ 
Energy yield: wind                  P90 (10 year)   Base P50       P10 (10 year) 
Change in portfolio valuation  Decreases GBP28.7m  GBP537.1m  Increases GBP29.0m 
Change in NAV per share            Decreases 5.2p      97.5p      Increases 5.3p 
-----------------------------  ------------------  ---------  ------------------ 
 
Energy yield: solar                 P90 (10 year)   Base P50       P10 (10 year) 
Change in portfolio valuation   Decreases GBP8.0m  GBP537.1m   Increases GBP8.3m 
Change in NAV per share            Decreases 1.5p      97.5p      Increases 1.5p 
-----------------------------  ------------------  ---------  ------------------ 
 

The sensitivity of the portfolio to movements in electricity and gas prices is as follows:

 
31 March 2021 
-----------------------------  ------------------  ---------  ------------------ 
Energy prices                           Minus 10%       Base            Plus 10% 
Change in portfolio valuation  Decreases GBP24.8m  GBP571.4m  Increases GBP25.0m 
Change in NAV per share            Decreases 4.5p      92.2p      Increases 4.6p 
-----------------------------  ------------------  ---------  ------------------ 
 
 
31 March 2020 
-----------------------------  ------------------  ---------  ------------------ 
Energy prices                           Minus 10%       Base            Plus 10% 
Change in portfolio valuation  Decreases GBP26.8m  GBP537.1m  Increases GBP26.7m 
Change in NAV per share            Decreases 4.9p      97.5p      Increases 4.9p 
-----------------------------  ------------------  ---------  ------------------ 
 

Waste & wastewater assets do not have significant volume and price risks.

The sensitivity of the portfolio to movements in corporation tax rate is as follows:

 
31 March 2021 
-----------------------------  -----------------  -----------------  ----------------- 
Corporation tax                         Minus 2%  Base 19% then 25%            Plus 2% 
Change in portfolio valuation  Increases GBP8.4m          GBP571.4m  Decreases GBP8.3m 
Change in NAV per share           Increases 1.5p              92.2p     Decreases 1.5p 
-----------------------------  -----------------  -----------------  ----------------- 
 
 
31 March 2020 
-----------------------------  -----------------  ---------  ----------------- 
Corporation tax                         Minus 2%   Base 19%            Plus 2% 
Change in portfolio valuation  Increases GBP7.4m  GBP537.1m  Decreases GBP7.6m 
Change in NAV per share           Increases 1.4p      97.5p     Decreases 1.4p 
-----------------------------  -----------------  ---------  ----------------- 
 

The sensitivity of the portfolio to movements in AD feedstock prices is as follows:

 
31 March 2021 
-----------------------------  -----------------  ---------  ----------------- 
Feedstock prices                       Minus 10%       Base           Plus 10% 
Change in portfolio valuation  Increases GBP8.9m  GBP571.4m  Decreases GBP9.3m 
Change in NAV per share           Increases 1.6p      92.2p     Decreases 1.7p 
-----------------------------  -----------------  ---------  ----------------- 
 
 
31 March 2020 
-----------------------------  -----------------  ---------  ----------------- 
Feedstock prices                       Minus 10%       Base           Plus 10% 
Change in portfolio valuation  Increases GBP6.8m  GBP537.1m  Decreases GBP7.6m 
Change in NAV per share           Increases 1.2p      97.5p     Decreases 1.4p 
-----------------------------  -----------------  ---------  ----------------- 
 

Euro/sterling exchange rate sensitivity

As the proportion of the portfolio assets with cash flows denominated in euros represented less than 2% of the portfolio value at 31 March 2021, the Directors consider the sensitivity to changes in the euro/sterling exchange rate to be insignificant.

The Directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements are approximately equal to their fair values.

Capital risk management

Capital management

The Group, which comprises the Company and its non--consolidated subsidiaries, manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The capital structure of the Group principally consists of the share capital account and retained earnings as detailed in notes 13 and 14 and debt as detailed in note 12. The Group aims to deliver its objective by investing available cash and using leverage whilst maintaining sufficient liquidity to meet ongoing expenses and dividend payments.

Gearing ratio

The Company's Investment Adviser reviews the capital structure of the Company and the Group on a semi--annual basis. The Company and its subsidiaries intend to make prudent use of leverage for financing acquisitions of investments and working capital purposes. Under the Company's Articles, and in accordance with the Company's investment policy, the Company's outstanding borrowings, excluding the debts of underlying assets, will be limited to 30% of the Company's Net Asset Value.

As at 31 March 2021, the Company had no outstanding debt. However, as set out in note 12, the Company's subsidiary UK HoldCo has a GBP170 million revolving credit facility, which was drawn by GBP82.0 million at 31 March 2021.

Financial risk management

The Group's activities expose it to a variety of financial risks: capital risk, liquidity risk, market risk (including interest rate risk, inflation risk and power price risk) and credit risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

For the Company and the intermediate holding companies, financial risks are managed by the Investment Adviser, which operates within the Board-approved policies. For the environmental infrastructure investments, due to the nature of the investments, certain financial risks (typically interest rate and inflation risks) are hedged at the inception of a project. All risks continue to be managed by the Investment Adviser. The various types of financial risk are managed as follows:

Financial risk management - Company only

The Company accounts for its investments in its subsidiaries at fair value. Accordingly, to the extent there are changes as a result of the risks set out below, these may impact the fair value of the Company's investments.

Capital risk

The Company has implemented an efficient financing structure that enables it to manage its capital effectively. The Company's capital structure comprises equity only (refer to the statement of changes in equity). As at 31 March 2021, the Company had no recourse debt, although as set out in note 12, the Company is a guarantor for the revolving credit facility of UK HoldCo.

Liquidity risk

The Directors monitor the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.

The Company's liquidity management policy involves projecting cash flows and forecasting the level of liquid assets necessary to meet these. Due to the nature of its investments, the timing of cash outflows is reasonably predictable and, therefore, is not a major risk to the Company.

The Company was in a net cash position and had no outstanding debt at the balance sheet date. At the balance sheet date, the Group had debt of GBP82.0 million, being the amount drawn on the revolving credit facility.

Market risk - foreign currency exchange rate risk

As the proportion of the portfolio assets with cash flows denominated in euros represented less than 2% of the portfolio value at 31 March 2021, the Directors consider the sensitivity to changes in the euro/sterling exchange rate to be insignificant.

Where investments are made in currencies other than pounds sterling, the Company will consider whether to hedge currency risk in accordance with the Company's currency and hedging policy as determined from time to time by the Directors. A portion of the Company's underlying investments may be denominated in currencies other than pounds sterling. However, any dividends or distributions in respect of the ordinary shares will be made in pounds sterling and the market prices and Net Asset Value of the ordinary shares will be reported in pounds sterling.

Currency hedging may be carried out to seek to provide some protection for the level of pounds sterling dividends and other distributions that the Company aims to pay on the ordinary shares, and in order to reduce the risk of currency fluctuations and the volatility of returns that may result from such currency exposure. Such currency hedging may include the use of foreign currency borrowings to finance foreign currency assets and forward foreign exchange contracts.

Financial risk management - Company and non --consolidated subsidiaries

The following risks impact the Company's subsidiaries and in turn may impact the fair value of investments held by the Company.

Market risk - interest rate risk

Interest rate risk arises in the Company's subsidiaries on the revolving credit facility borrowings and floating rate deposits. Borrowings issued at variable rates expose those entities to variability of interest payment cash flows. Interest rate hedging may be carried out to seek to provide protection against increasing costs of servicing debt drawn down by the UK HoldCo as part of its revolving credit facility. This may involve the use of interest rate derivatives and similar derivative instruments.

Each infrastructure investment hedges their interest rate risk at the inception of a project. This will either be done by issuing fixed rate debt or variable rate debt which will be swapped into fixed rate by the use of interest rate swaps.

Market risk - inflation risk

Some of the Company's investments will have part of their revenue and some of their costs linked to a specific inflation index at inception of the project. In most cases this creates a natural hedge, meaning a derivative does not need to be entered into in order to mitigate inflation risk.

Market risk - power price risk

The wholesale market price of electricity and gas is volatile and is affected by a variety of factors, including market demand for electricity and gas, 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. Whilst some of the Company's renewable energy projects benefit from fixed prices, others have revenue which is in part based on wholesale electricity and gas prices.

A decrease and/or prolonged deterioration in economic activity in the UK, for any reason, could result in a decrease in demand for electricity and gas in the market. Short--term and seasonal fluctuations in electricity and gas demand will also impact the price at which the investments can sell electricity and gas. The supply of electricity and gas also impacts wholesale electricity and gas prices. Supply of electricity and gas can be affected by new entrants to the wholesale power market, the generation mix of power plants in the UK, government support for various generation technologies, as well as the market price for fuel commodities.

Volume risk - electricity generation risk

Meteorological conditions poorer than forecast can result in generation of lower electricity volumes and lower revenues than anticipated.

Credit risk

Credit risk is the risk that a counterparty of the Company or its subsidiaries will default on its contractual obligations it entered into with the Company or its subsidiaries. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers. The Company and its subsidiaries 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's infrastructure investments receive regular, long--term, partly or wholly index--linked revenue from government departments, local authorities or clients under the Renewables Obligation and Feed--in Tariff regimes. The Directors believe that the Group is not significantly exposed to the risk that the customers of its investments do not fulfil their regular payment obligations because of the Company's policy to invest in jurisdictions with satisfactory credit ratings.

Given the above factors, the Board does not consider it appropriate to present a detailed analysis of credit risk.

The Company's maximum exposure to credit risk is the GBP318.9 million owed by UK Holdco detailed in note 12.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group adopts a prudent approach to liquidity management by ensuring it maintains adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Directors monitor the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.

The Company's liquidity management policy involves projecting cash flows and forecasting the level of liquid assets required to meet its obligations. Due to the nature of its investments, the timing of cash outflows is reasonably predictable and, therefore, is not a major risk to the Group.

Debt raised by asset investments from third parties is without recourse to the Group.

17. Guarantees and other commitments

As at 31 March 2021, the Company has provided a guarantee under the Company's wholly owned subsidiary UK HoldCo's GBP170 million RCF. This was replaced on 21 May 2021 with a new guarantee under UK Holdco's new RCF.

On 28 January 2020, the Group committed EUR25 million to Foresight Energy Infrastructure Partners SCSp ("FEIP"), a Luxembourg limited partnership investment vehicle, of which EUR5.3 million has been invested at the balance sheet date (equivalent to GBP4.5 million at the 31 March 2021 prevailing exchange rate).

On 4 December 2020, the Group committed up to GBP20 million to CNG Foresight Limited, to fund the construction of a further pipeline of CNG refuelling stations as part of a national network. A total of GBP6.6 million has been invested at the balance sheet date.

The Company had no other commitments or guarantees.

18. Subsidiaries

The following subsidiaries have not been consolidated in these financial statements as a result of applying the requirements of "Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 27)":

 
                                                                              Place of   Registered  Ownership  Voting 
Name                                                               Category   business       office   interest  rights 
------------------------------------------  -------------------------------  ---------  -----------  ---------  ------ 
JLEN Environmental Assets Group (UK) 
 Limited(1)                                            Intermediate holding         UK            A       100%    100% 
HWT Limited                                            Intermediate holding         UK            B       100%    100% 
JLEAG Solar 1 Limited                                  Operating subsidiary         UK            C       100%    100% 
Croft Solar PV Limited                       Operating subsidiary (dormant)         UK            C       100%    100% 
Cross Solar PV Limited                       Operating subsidiary (dormant)         UK            C       100%    100% 
Domestic Solar Limited                       Operating subsidiary (dormant)         UK            C       100%    100% 
Ecossol Limited                              Operating subsidiary (dormant)         UK            C       100%    100% 
Hill Solar PV Limited                        Operating subsidiary (dormant)         UK            C       100%    100% 
Share Solar PV Limited                       Operating subsidiary (dormant)         UK            C       100%    100% 
Tor Solar PV Limited                         Operating subsidiary (dormant)         UK            C       100%    100% 
Residential PV Trading Limited               Operating subsidiary (dormant)         UK            C       100%    100% 
South-Western Farms Solar Limited            Operating subsidiary (dormant)         UK            C       100%    100% 
Angel Solar Limited                          Operating subsidiary (dormant)         UK            C       100%    100% 
Easton PV Limited                                   Project holding company         UK            D       100%    100% 
Pylle Solar Limited                                 Project holding company         UK            D       100%    100% 
Second Energy Limited                                  Operating subsidiary         UK            D       100%    100% 
ELWA Holdings Limited                               Project holding company         UK            E        80%     80% 
ELWA Limited(2)                                        Operating subsidiary         UK            E        80%  81%(2) 
JLEAG Wind Holdings Limited                         Project holding company         UK            A       100%    100% 
JLEAG Wind Limited                                  Project holding company         UK            A       100%    100% 
Amber Solar Parks (Holdings) Limited                Project holding company         UK            D       100%    100% 
Amber Solar Park Limited                               Operating subsidiary         UK            D       100%    100% 
Fryingdown Solar Park Limited                Operating subsidiary (dormant)         UK            D       100%    100% 
Five Oaks Solar Parks Limited                Operating subsidiary (dormant)         UK            D       100%    100% 
Bilsthorpe Wind Farm Limited                           Operating subsidiary         UK            F       100%    100% 
Ferndale Wind Limited                               Project holding company         UK            F       100%    100% 
Castle Pill Wind Limited                            Project holding company         UK            F       100%    100% 
Wind Assets LLP                                        Operating subsidiary         UK            F       100%    100% 
Hall Farm Wind Farm Limited                            Operating subsidiary         UK            F       100%    100% 
Branden Solar Parks (Holdings) Limited              Project holding company         UK            D       100%    100% 
Branden Solar Parks Limited                            Operating subsidiary         UK            D       100%    100% 
KS SPV 3 Limited                                       Operating subsidiary         UK            D       100%    100% 
KS SPV 4 Limited                                       Operating subsidiary         UK            D       100%    100% 
Carscreugh Renewable Energy Park Limited               Operating subsidiary         UK            F       100%    100% 
Wear Point Wind Limited                                Operating subsidiary         UK            F       100%    100% 
Monksham Power Ltd                                  Project holding company         UK            D       100%    100% 
Frome Solar Limited                                    Operating subsidiary         UK            D       100%    100% 
BL Wind Limited                                        Operating subsidiary         UK            F       100%    100% 
Burton Wold Extension Limited                          Operating subsidiary         UK            F       100%    100% 
------------------------------------------  -------------------------------  ---------  -----------  ---------  ------ 
 
   (1)   JLEN Environmental Assets Group (UK) Limited is the only entity directly held by the Company. 

(2) ELWA Holdings Limited holds 81% of the voting rights and a 100% share of the economic benefits in ELWA Limited.

 
                                                                              Place of   Registered  Ownership  Voting 
Name                                                               Category   business       office   interest  rights 
-------------------------------------------------  ------------------------  ---------  -----------  ---------  ------ 
New Albion Wind Farm (Holdings) Limited             Project holding company         UK            F       100%    100% 
New Albion Wind Limited                                Operating subsidiary         UK            F       100%    100% 
Dreachmhor Wind Farm Limited                           Operating subsidiary         UK            F       100%    100% 
France Wind GP Germany GmbH                         Project holding company         DE            I       100%    100% 
France Wind Germany GmbH & Co. KG                   Project holding company         DE            I       100%    100% 
Parc Eolien Le Placis Vert SAS                         Operating subsidiary         FR            G       100%    100% 
Energie Eolienne de Plouguernével SAS             Operating subsidiary         FR            H       100%    100% 
CSGH Solar Limited                                  Project holding company         UK            A       100%    100% 
CSGH Solar (1) Limited                              Project holding company         UK            A       100%    100% 
sPower Holdco 1 (UK) Limited                        Project holding company         UK            D       100%    100% 
sPower Finco 1 (UK) Limited                         Project holding company         UK            D       100%    100% 
Higher Tregarne Solar (UK) Limited                     Operating subsidiary         UK            D       100%    100% 
Crug Mawr Solar Farm Limited                           Operating subsidiary         UK            D       100%    100% 
Golden Hill Solar (UK) Limited                      Project holding company         UK            D       100%    100% 
Golden Hill Solar Limited                              Operating subsidiary         UK            D       100%    100% 
Shoals Hook Solar (UK) Limited                         Operating subsidiary         UK            D       100%    100% 
CGT Investment Limited                              Project holding company         UK            J       100%    100% 
CWMNI GWYNT TEG CYF                                    Operating subsidiary         UK            J       100%    100% 
Moelogan 2 (Holdings) Cyfyngedig                    Project holding company         UK            J       100%    100% 
Moelogan 2 C.C.C.                                      Operating subsidiary         UK            J       100%    100% 
Vulcan Renewables Limited                              Operating subsidiary         UK            K       100%    100% 
Llynfi Afan Renewable Energy Park (Holdings) 
 Limited                                            Project holding company         UK            A       100%    100% 
Llynfi Afan Renewable Energy Park Limited              Operating subsidiary         UK            A       100%    100% 
Green Gas Oxon Limited                              Project holding company         UK            L      52.6%   52.6% 
Icknield Gas Limited                                   Operating subsidiary         UK            L      52.6%   52.6% 
Egmere Energy Limited                                  Operating subsidiary         UK            K       100%    100% 
Grange Farm Energy Limited                             Operating subsidiary         UK            K       100%    100% 
Merlin Renewables Limited                              Operating subsidiary         UK            K       100%    100% 
Biogas Meden Limited                                   Operating subsidiary         UK            K       100%    100% 
Yorkshire Hydropower Holdings Limited               Project holding company         UK            F       100%    100% 
Yorkshire Hydropower Limited                           Operating subsidiary         UK            F       100%    100% 
Warren Power Limited                                Project holding company         UK            K       100%    100% 
Warren Energy Limited                                  Operating subsidiary         UK            K       100%    100% 
Northern Hydropower Holdings Limited                Project holding company         UK            F       100%    100% 
Northern Hydropower Limited                            Operating subsidiary         UK            F       100%    100% 
Codford Biogas Limited                                 Operating subsidiary         UK            M       100%    100% 
FS West Gourdie Limited                                Operating subsidiary         UK            D       100%    100% 
Rainworth Energy Limited                               Operating subsidiary         UK            N       100%    100% 
Bio Collectors Holdings Limited                     Project holding company         UK            O        70%     70% 
Bio Collectors Limited                               Operating subsidiary                        UK  O 70%         70% 
Riverside Bio Limited                                  Operating subsidiary                      UK  O 70%         70% 
Riverside AD Limited                                   Operating subsidiary                      UK  O 70%         70% 
-------------------------------------------------  ------------------------  ----------------------  ---------  ------ 
 

Registered offices

   A.   The Shard, 32 London Bridge Street, London SE1 9SG 
   B.   50 Lothian Road, Festival Square, Edinburgh, Midlothian EH3 9WJ 
   C.   1 Filament Walk, Suite 203, Wandsworth, London SW18 
   D.   Long Barn, Manor Farm, Stratton-on-the-Fosse, Radstock BA3 4QF 
   E.   Dunedin House, Auckland Park, Mount Farm, Milton Keynes MK1 1BU 
   F.   C/O Res White Limited, Beaufort Court, Egg Farm Lane, Kings Langley, Hertfordshire WD4 8LR 

G. Parc Eolien le Placis Vert, Rue du Pre Long 35770 Vern Sur Seiche, France

   H.   3 Rue Benjamin Delessert, 56104 Lorient Cedex 04, France 
   I.    Steinweg 3-5, Frankfurt am Main, 60313, Germany 
   J.   Cae Sgubor Ffordd Pennant, Eglwysbach, Colwyn Bay, Conwy LL28 5UN 
   K.   10-12 Frederick Sanger Road, Guildford, Surrey GU2 7YD 
   L.   Friars Ford, Manor Road, Goring, Reading RG8 9EL 

M. Upton Wold, Moreton-in-Marsh, Gloucestershire GL56 9TR

   N.   C/O Material Change, The Watering Farm, Creeting St. Mary, Ipswich, Suffolk IP6 8ND 
   O   10 Osier Way, Mitcham, Surrey CR4 4NF 

19. Events after balance sheet date

After the balance sheet date, the Group acquired a 50% stake in Sandridge Battery Storage Limited. The project is located in Melksham in Wiltshire and holds the development rights to construct a 50MW lithium-ion battery energy storage plant. The project is expected to reach energisation and start commercial operations in October 2022.

On 21 May 2021, the Fund successfully refinanced its revolving credit facility with a three-year agreement with ING, HSBC, RBSI, NAB and NIBC which provides for a committed facility of GBP170 million (of which GBP110.6 million has been drawn at the date of this report).

The consortium of lenders includes three existing lenders (ING, HSBC and NIBC) and two new participants (RBSI and NAB). The margin can vary between 195 bps and 205 bps over SONIA ("Sterling Overnight Index Average") for sterling drawings, and over EURIBOR for euro drawings, depending on the Company's performance against pre-defined ESG targets.

On 17 May 2021, the Company raised gross proceeds of GBP56.9 million by way of issuing a total of 54,672,002 new ordinary shares at 104 pence per share. Following this issue, the Company's share capital is comprised of 601,392,027 fully paid-up ordinary shares of no par value.

On 17 May 2021, JLEN acquired a 45% equity stake in Energie Tecnologie Ambiente S.r.l, a 16.8MW Energy from Waste power plant which processes refuse derived fuel, located in the municipality of Manfredonia in the Apulia region of southern Italy. The total consideration was EUR26.75 million financed by drawdown under the new revolving credit facility.

A dividend for the quarter ended 31 March 2021 of 1.69 pence per share, amounting to GBP10.2 million, was approved by the Board on 29 April 2021 for payment on 25 June 2021.

GLOSSARY OF KEY TERMS

AD

anaerobic digestion

AIFM Directive

the EU Alternative Investment Fund Managers Directive (No. 2011/61/EU)

bps

basis points

Brexit

the UK referendum on 23 June 2016 in which a majority of voters voted to exit the EU

CfD

Contracts for Difference

the Company or JLEN or the Fund

JLEN Environmental Assets Group Limited

EU

European Union

FiT

the Feed--in Tariff

gross project value

the fair market value of the investment interests held in a project as increased by the amount of any financing in the relevant project entity

Group

JLEN Environmental Assets Group Limited and its intermediate holding companies UK HoldCo and HWT Limited

GWh

gigawatt hour

intermediate holding companies

companies within the Group which are used as pass-through vehicles to invest in underlying environmental infrastructure assets, namely UK HoldCo, HWT Limited and JLEAG Solar 1 Limited

Investment Adviser or Foresight

Foresight Group LLP

IPO

Initial Public Offering

IRR

internal rate of return

MWe

megawatt electric

MWh

megawatt hour

MWth

megawatt thermal

NAV

Net Asset Value

OECD

Organisation for Economic Co--operation and Development

portfolio

the 36 assets in which JLEN had a shareholding as at 31 March 2021

portfolio valuation

the sum of all the individual investments' net present values

PPAs

Power Purchase Agreements

PPP/PFI

the Public Private Partnership procurement model

price cannibalisation

the depressive influence on the wholesale power price at timings of high output from intermittent weather-driven generation such as solar and wind

PV

Photovoltaic

RHI

Renewable Heat Incentive

ROCs

Renewables Obligation Certificates

total shareholder return

total shareholder return combines the share price movement and dividends since IPO expressed as an annualised percentage

UK HoldCo

JLEN Environmental Assets Group (UK) Limited, wholly owned subsidiary of JLEN Environmental Assets Group Limited

WADR

the weighted average discount rate

COMPANY SUMMARY

Below are the Company key facts, advisers and other information.

 
Company information                  JLEN Environmental Assets Group Limited 
                                      is a Guernsey--registered closed--ended 
                                      investment company (registered number 57682) 
                                      with a premium listing on the London Stock 
                                      Exchange 
-----------------------------------  ------------------------------------------------- 
Registered address                   Sarnia House, Le Truchot, St Peter Port, 
                                      Guernsey GY1 1GR 
-----------------------------------  ------------------------------------------------- 
Ticker/SEDOL                         JLEN/BJL5FH8 
-----------------------------------  ------------------------------------------------- 
Company year end                     31 March 
-----------------------------------  ------------------------------------------------- 
Dividend payments                    Quarterly in March, June, September and 
                                      December 
-----------------------------------  ------------------------------------------------- 
Investment Adviser                   Foresight Group LLP, No OC300878, registered 
                                      in England and Wales and authorised and 
                                      regulated by the Financial Conduct Authority 
-----------------------------------  ------------------------------------------------- 
Company Secretary and Administrator  Praxis Fund Services Limited, a company 
                                      incorporated in Guernsey on 13 April 2005 
                                      (registered number 43046) 
-----------------------------------  ------------------------------------------------- 
Market capitalisation                GBP612.3 million at 31 March 2021 
-----------------------------------  ------------------------------------------------- 
Investment Adviser fees              1.0% per annum of the Adjusted Portfolio 
                                      Value of the investments up to GBP0.5 billion, 
                                      falling to 0.8% per annum for investments 
                                      above GBP0.5 billion. 
                                      No performance or acquisitions fees 
-----------------------------------  ------------------------------------------------- 
Investment Adviser term              Rolling one-year notice 
-----------------------------------  ------------------------------------------------- 
ISA, PEP and SIPP status             The ordinary shares are eligible for inclusion 
                                      in PEPs and ISAs (subject to applicable 
                                      subscription limits) provided that they 
                                      have been acquired in the market, and they 
                                      are permissible assets for SIPPs 
-----------------------------------  ------------------------------------------------- 
AIFMD status                         The Company is classed as an internally 
                                      managed Alternative Investment Fund under 
                                      the Alternative Investment Fund Managers 
                                      Regulations 2013 and the European Union's 
                                      Alternative Investment Fund Managers Directive 
-----------------------------------  ------------------------------------------------- 
Non-mainstream pooled investment     The Board conducts the Company's affairs, 
 status                               and intends to continue to conduct the 
                                      Company's affairs, such that the Company 
                                      would qualify for approval as an investment 
                                      trust if it were resident in the United 
                                      Kingdom. It is the Board's intention that 
                                      the Company will continue to conduct its 
                                      affairs in such a manner and that independent 
                                      financial advisers should therefore be 
                                      able to recommend its ordinary shares to 
                                      ordinary retail investors in accordance 
                                      with the FCA's rules relating to non--mainstream 
                                      investment products 
-----------------------------------  ------------------------------------------------- 
FATCA                                The Company has registered for FATCA and 
                                      has a GIIN number 2BN95W.99999.SL.831 
-----------------------------------  ------------------------------------------------- 
Investment policy                    The Company's investment policy can be 
                                      found on the Company website 
Website                              www.jlen.com 
-----------------------------------  ------------------------------------------------- 
 

DIRECTORS AND ADVISERS

Directors

Richard Morse (Chairman)

Stephanie Coxon

Peter Neville

Richard Ramsay

Hans Joern Rieks

Administrator to the Company, Company Secretary and registered office

Praxis Fund Services Limited

Sarnia House

Le Truchot

St Peter Port

Guernsey GY1 1GR

Channel Islands

Registrar

Link Registrars (Guernsey) Limited (formerly Capita Asset Services)

Mont Crevelt House

Bulwer Avenue

St Sampson

Guernsey GY2 4LH

Channel Islands

UK transfer agent

Link Asset Services

(formerly Capita Asset Services)

The Registry

34 Beckenham Road

Beckenham

Kent B43 4TU

United Kingdom

Auditor

Deloitte LLP

Regency Court

Glategny Esplanade

St Peter Port

Guernsey GY1 3HW

Channel Islands

Investment Adviser

Foresight Group LLP

The Shard

32 London Bridge Street

London SE1 9SG

United Kingdom

Public relations

Newgate Communications

Sky Light City Tower

50 Basinghall Street

London EC2V 5DE

United Kingdom

Corporate broker

Winterflood Securities Limited

The Atrium Building

Cannon Bridge House

25 Dowgate Hill

London EC4R 2GA

United Kingdom

Corporate bankers

HSBC

PO Box 31

St Peter Port

Guernsey GY1 3AT

Channel Islands

Public company directorships

Richard Morse

JLEN Environmental Assets Group Limited

Stephanie Coxon

JLEN Environmental Assets Group Limited

Apax Global Alpha Limited

PPHE Hotels Group Limited

PraxisIFM Group Limited

Peter Neville

JLEN Environmental Assets Group Limited

Richard Ramsay

JLEN Environmental Assets Group Limited

Momentum Multi Asset Value Trust plc

Hans Joern Rieks

JLEN Environmental Assets Group Limited

CAUTIONARY STATEMENT

The review section of this report, including our purpose, about us, at a glance, portfolio at a glance, market opportunities, year at a glance, the Chairman's statement, investment objectives, fund objectives, business model, fund structure, stakeholder engagement, risks and risk management, the Investment Adviser, investment policy, investment portfolio and valuation, operational review, value enhancement, case studies, sustainability and ESG and financial review (together, the review section) have been prepared solely to provide additional information to shareholders to assess JLEN's strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose.

The review section may include statements that are, or may be deemed to be, "forward-looking statements". These forward--looking statements can be identified by the use of forward--looking terminology, including the terms "believes", "estimates", "anticipates", "forecasts", "projects", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.

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

These forward--looking statements reflect current expectations regarding future events and performance and speak only as at the date of this report. By their nature, forward--looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

Forward--looking statements are not guarantees of future performance or results and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. The Company's actual investment performance, results of operations, financial condition, liquidity, prospects, opportunities, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward--looking statements contained in this report.

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

In addition, the review section may include target figures for future financial periods. Any such figures are targets only and are not forecasts.

This Annual Report has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to JLEN Environmental Assets Group Limited and its subsidiary undertakings when viewed as a whole.

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June 10, 2021 02:02 ET (06:02 GMT)

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