Important information

Half Yearly Report and Financial Statements for the period from 19 January 2018 (incorporation date) to 30 September 2018

Operational Highlights Chairman's Statement Investment Advisors Report Principal risk and uncertainties Directors' report Statement of directors' responsibilities Independent Auditors report Statement of Comprehensive Income Statement of Financial Position Statement Of Changes In Equity Statement of Cash Flow

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Operational Highlights

• On 25 May 2018, Gore Street successfully listed on the Premium segment of the London stock exchange, raising gross proceeds of £30.6m
• Approximately 50% of the IPO proceeds already invested or committed across four assets
• Gore Street's portfolio comprises:
  • Two assets fully operational and producing income with 8 MW of installed capacity
  • Two shovel-ready projects with 19 MW of installed capacity. These are expected to be operational in Q2 2019. Engineering, Procurement & Construction (EPC) contracts have been agreed on both assets

Pipeline

• A robust pipeline of significant investment opportunities with multiple partners:

  Exclusive Assets or in advanced stage of negotiations
  Project	Location	Type of project (FTM / BTM)[1]	Total Project Size (MW)
  Project 1	United Kingdom	FTM - Lithium-ion technology	30.0
  Project 2	Belgium	FTM - Lithium-ion technology	25.0
  Project 3	Germany	FTM - Flow technology	11.0
  Total 66.0 MW

  
  

  Additional Pipeline
  Project	Location	Type of project	Total Project Size (MW)
  Project 4	United Kingdom	FTM - Lithium-ion technology	49.0
  Project 5	United Kingdom	FTM - Lithium-ion technology	45.0
  Project 6	United States	FTM - Lithium-ion technology	30.0
  Project 7	United Kingdom	FTM - Lithium-ion technology	20.0
  Project 8	United Kingdom	FTM - Lithium-ion technology	7.5
  Total 151.5 MW

Financial Highlights

• NAV per ordinary share of 97.0 pence as at 30 September 2018
• Share price as of 28 September 2018[2] of 99.75 pence
• Portfolio[3] valuation of £8.0m as at 30 September 2018
• The Board has declared an initial interim quarterly dividend of 2.0 pence per ordinary share for the period to 30 September 2018, payable to shareholders on the register on 16 November 2018. As announced on 8 November 2018, the ex-dividend date will be 15 November 2018 with a target payment date of 30 November 2018
• This dividend is fully covered by cash to be distributed from the operating SPVs. The future dividend schedule for the year remains on track to deliver its announced 4.0 pence per share as per the target yield at IPO

CEO of Gore Street Capital, the investment manager to the Company, Alex O'Cinneide commented:

"This has been an exciting time for Gore Street in executing our London listing and successfully raising proceeds to meet the demand for our considerable pipeline. Deployment of proceeds has been swift with over 50% of funds already invested in four attractive assets. We are keen to continue this rapid progress, increasing the scale and diversification of the committed proceeds of the Company and its asset base. We continue to see highly favourable developments within our asset class as demand for energy storage projects continues to grow. We continue to negotiate with multiple partners for a significant number of projects under exclusivity that we look forward to funding in due course."

The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.

 

For further information:

Gore Street Capital Limited
Alex O'Cinneide	Tel: +44 (0) 20 3826 0290
Stockdale Securities Limited
Daniel Harris / Rose Ramsden (Corporate Finance)	Tel: +44 (0) 20 7601 6000
Henry Willcocks / Fiona Conroy (Corporate Broking)
Media enquiries:
Buchanan
Charles Ryland / Steph Watson / Henry Wilson	Tel: +44 (0) 20 7466 5000
	Email:[email protected]

A copy of the Half Yearly Report and the Audited Financial Statements has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Half Yearly Report and Audited Financial Statements will be available on the Company's website where further information on the Company can also be found http://www.gsenergystoragefund.com/content/news/corporate-news.

 

 

Notes to Editors

About Gore Street Energy Storage Fund plc

Gore Street is London's first listed energy storage fund and seeks to provide shareholders with a significant opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its shareholders.

 

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Chairman's Statement
For the period from 19 January 2018 (incorporation date) to 30 September 2018

I am pleased to present Gore Street Energy Storage Fund PLC first interim report (including initial accounts) since listing on the Premium Segment of the London Stock Exchange in May 2018, for the period ended 30 September 2018.

Performance and returns
GSF portfolio is performing in line with expectation. Our operating assets continue to benefit from secured revenue contracts and multiple revenue stacking strategy.

Dividends
The first quarterly dividend of 2 pence per share is to be paid on 30 November 2018. We are targeting a dividend of 4 pence per share with respect to period end 31 March 2019.

Acquisitions
The last six months have been strong on the acquisition front. We completed the acquisition of interests in 4 new facilities during the year, through 3 transactions. These acquisitions demonstrated our ability to source and execute transactions across the market but only when we consider the terms to be advantageous to shareholders. As a result, we invested a total of £8 million, with our net storage capacity increasing to 29 Megawatt ("MW").

Gearing
The Company and its subsidiaries (the "Group") will generally avoid using non-recourse debt at the SPV level and aims to keep the Group level borrowings at a prudent level (the maximum presently is 15 % of GAV) to reduce risk. We ended the half year with no external borrowings.

Outlook
The energy storage systems market globally was valued at approximately cUSD$194.3 billion. in 2017 and is expected to generate revenue of around $296.0 billion by the end of 2024, an annual increase of around 6.2% from 2018 till 2024. The industry expects a possible 2,000 MW of additional energy storage by 2020 in the UK. The Department of Energy and Climate Change had put forward that there is potential growth in the industry of up to 20 GW by 2050, whilst various Government and European Commission documents continue to identify the importance of energy storage for future energy systems. 

The Company therefore is working in a growing market and we continue to see a significant number of interesting projects with different business models attached to them. We note that several of the key revenue services which our projects participate in, Frequency Response and Capacity Market, have had lower clearing prices and contracts becoming shorter in length in the recent auctions than we saw at the start of the year; however, these results have been matched by a continued dramatic fall in systems costs. We therefore believe that the return range stated at IPO is still achievable. With our strong cash flow, we continue to have confidence in meeting our objectives.

Governance
The Board is working well in the discharge of its responsibilities and during the year several Board committees were established, with Directors being appointed to those committees.

Conclusion
The Company first listed nearly 6 months ago in May 2018. Since listing, we have executed our investment objectives. That is down to the excellent work of the investment adviser and pushing forward the Company's investment strategy. The market is maturing in line with our expectations here in the UK and abroad and an increasing range of services these assets can provide will yield a robust and diversified revenue profile.

 

Patrick Cox
Chairman
Date: 8 November 2018

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Investment Advisors Report
For the period from 19 January 2018 (incorporation date) to 30 September 2018

About Gore Street Capital ("Investment Adviser")
The Investment Adviser was formed in 2013 as a platform to acquire, develop and manage global renewable energy assets. It is headquartered in the UK and comprises a strong team of investment professionals with significant experience in sourcing, structuring and managing large renewable energy projects globally. The Investment Adviser was the first to deploy privately owned large scale battery projects in Britain.

Structure
Gore Street Energy Storage Fund PLC (the "Company") holds and manages its investments through UK limited companies which are effectively 100% wholly-owned by the Company, GSES 1 Limited, NK Energy Storage Solutions Ltd. and GSC LR POT Limited.

Investment Objective
The Company seeks to provide investors with a sustainable and attractive dividend over the long term by investing in a diversified portfolio of utility scale energy storage projects primarily located in the UK, although the Company will also consider projects in North America and Western Europe. In addition, the Company seeks to provide investors with an element of capital growth through the re-investment of net cash generated in excess of the target dividend in accordance with the Company's investment policy.

Strategic Partners
As the Company's cornerstone investors, NEC Energy Storage Inc. ("NEC ES") and Nippon Koei ("NK") have remained the Company's strategic partners and major shareholders since the IPO of the Company on 25 May 2018.

NEC ES is a wholly-owned subsidiary of NEC Corporation, a global information and communications technology leader listed on the Tokyo Stock Exchange. NEC ES is widely recognised as a pioneer and leader in the market for utility scale energy storage.

NK is the longest-standing engineering consulting firm in Japan listed on the Tokyo Stock Exchange.

The Company through the support from Investment Adviser would benefit from exclusive right of first offer in relation to their energy storage projects pipeline.

Investment Portfolio Summary
The Company's portfolio currently has 4 assets with a total installed capacity of 29.0 MW or 27.06 MW (proportionately to the Company's ownership). All of the assets within the GSF's portfolio are situated in the UK. Operating assets represent 10.0 MW or 8.0 MW (proportionately to the Company's shareholding portion).

The Investment Adviser has selected assets that deliver portfolio diversification by multiple revenue streams, geographical location, EPC contractors, O&M counterparties and developers.

Portfolio Assets
As of September 2018, the Company's portfolio consisted of four assets as detailed below:

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Market Update

Increasing Intermittent Capacity
The installation of renewable capacity has been encouraged by the GB Government through various renewable incentive schemes. This has led to the rapid deployment of intermittent wind and solar generation capacity. As their output can vary considerably from one period to the next, this has increased the variability and uncertainty in the output. Flexibility assets- including storage assets - are critical to manage this variability.

Increasing wind penetration is a critical value driver for flexible assets due to both increasing intermittent generation's impact on wholesale electricity price volatility, as well as the increasing volume of Balancing Services that the system operators will need to procure to manage wind variability. In GB, wind output is highly correlated across the country, so small errors in wind forecasting will put considerable pressure on system stability, which the system operators will need to manage through increasing capacity provisions within Balancing Services markets. As wind penetration increases, existing plants will be required to run more aggressive operating patterns than originally planned to manage volatile renewable output, potentially starting and ramping up multiple times per day.

The impact of solar intermittency on system stability is not as pronounced. Nonetheless, the National Grid would still need to procure Balancing Services to manage solar forecasting error, creating demand for flexible assets.

Decreasing Firm Thermal Capacity
In parallel with the deployment of renewables, there has been a corresponding decrease in thermal capacity, in particular with the decommissioning of coal plants, to meet emissions targets. Over the past five years, close to 10 GW of coal plants have been decommissioned. This trend is expected to continue over the next decade with the remaining 11 GW of transmission connected coal plants expected to close by 2025. In addition, several gas plants were mothballed in recent years due to challenging economics and commercial setbacks.

A key uncertainty in the electricity market in the coming years is the pace of decommissioning of the remaining coal plants. Indeed, this will put pressure on capacity margins and create challenges for the National Grid in balancing the system. These large thermal plants provide Mandatory Balancing Services to the system operators. When these plants retire, this will increase volatility on the wholesale electricity market and the system operator's reserve requirements, thus creating opportunities for Distributed Energy and Flexibility providers.

A Strong Case for Battery Storage
As the share of renewables - especially wind at night - in the UK electricity mix increases, thus creating uncertainty, and thermal power capacity is decommissioned, which reduces the network's ability to self-stabilise and avoid black-outs, the need for flexibility increases. A number of services are increasingly needed, that batteries, and in some cases competing technologies, will need to provide:  

• The need for frequency response has increased due to the decommissioning of thermal plants. Unlike wind and solar power plants, thermal plants could absorb any short-term mismatch between supply and demand. In the event of a spike in demand or power plants shut down unexpectedly, this capacity gives the National Grid time to adjust power production and avoid a black-out. As wind and solar capacity which are the intermittent generation capacity increases and thermal capacity increases, the network's ability to avoid black-outs is reduced dramatically. Batteries are now needed to provide dynamic, sub-30 second, frequency response to immediate absorb any difference between consumption and generation, while the National Grid dispatches other power production assets to take over to avoid black-outs. Another factor is the increased concentration of baseload power, which will require the National Grid to ensure that there is enough flexibility capacity to offset a drop in power if the largest power generation system shuts down unexpectedly.
• Wholesale arbitrage and balancing market: the reduced capacity margin resulting from the decommissioning of thermal capacity and the deployment of renewables increases price volatility thus creating an opportunity for wholesale arbitrage. The growing share of intermittent capacity makes power generation forecasts more uncertain. This forces the National Grid to increasingly resort to the Balancing Services market to balance the network after gate closure, which drives Balancing Mechanism ("BM") price spreads higher. This creates another opportunity for arbitrage.
• A series of complementary revenues can be generated, such as Capacity Market payments and distribution and transmission charges avoidance - when the asset is co-located with a large commercial or industrial off-taker.
• Driven by electric vehicle deployment and increasing Lithium-Ion manufacturing capacity worldwide, the price of Lithium-Ion cells has been decreasing steadily, enabling developers and investors to absorb the impact of decreasing frequency response prices, whilst still meeting their target returns.

Increasing Competition and Evolving Revenue Strategy
Competition in the UK storage market is intensifying: As more storage capacity comes online, FFR prices have decreased steadily and contract durations are being shortened by the National Grid. 

In this context, while the industry is aided by decreasing battery prices, it must also turn in increasingly complex revenue stacking strategies to maximise battery utilisation and revenue. Such strategies need to be combined with equally complex EPC and O&M contracts with highly tailored warranty constructs precisely matching the applications of the battery.

Investment Performance
The NAV per share for the Company as at 30 September 2018 was 97.0 pence compared to 97.6 pence as at 30 June 2018.

The difference from IPO predominantly reflected the costs and expenses of the IPO of 2 pence per shares. The seed assets acquired on 22 June 2018 were valued in line with purchase price, thus, did not affect NAV as of 30 June 2018, and the NAV was, therefore, 97.6 pence per share on 30 June 2018.

The decrease in NAV from 97.6 pence per share to 97.0 pence per share in the period from 1 July 2018 to 30 September 2018 is attributable to decline in frequency response price forecasts provided by third party and fund operating expenses.

This decline in frequency price forecasts was partially offset by operating cost reductions and was further mitigated by the planned implementation of alternative revenue strategies, including energy arbitrage. As a result, NAV of portfolio SPVs decreased to £8.0 m from acquisition and capital expenditure value of £8.1 m.

To manage the Company's operating expense, the Investment Adviser has agreed to reduce its management fee for this half year period from its contracted rate of 1% of NAV.

A gradual decrease in the NAV is otherwise to be anticipated until the IPO proceeds are largely invested.

The NAV changes are summarized in below table. Since the IPO, the Company has invested £8.1 m in cash through acquisitions of SPVs and related capital expenditures, and it has committed to deploy c. 50% of its capital.

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NAV Bridge (IPO 25 May 2018 to 30 September 2018)

NAV Bridge	NAV	NAV/Share
	£ Million	pence
IPO Proceeds	30.6	100.0
IPO expense	(0.6)	(1.8)
Investment Manager Fee	(0.0)	(0.1)
Other operational expense	(0.3)	(0.8)
Interest earned	0.0	0.1
Acquisition and Capex	(8.1)	(26.4)
NAV of Portfolio SPVs (30 Sep 2018)	8.0	26.1
Total NAV (30 September)	29.7	97.0

Valuation of the Investment Portfolio
The Investment Adviser is responsible for providing a fair market valuation of the Company's underlying assets. The results of fair market value of the Company's investment portfolio are presented to the Company's Board of Directors for their review and approval. Investments are reported at the Directors' estimate of fair value at the reporting date. Investment Valuations are calculated by Management quarterly and reviewed by a third party in the mid-year and end of year reports.

The Investment Adviser uses a Discounted Cash Flow ("DCF") method for the projects that are commercially operational, while projects in pre-construction or under construction are held at cost or at the acquisition cost as this is an appropriate estimate of fair value. The methodology adheres to IFRS 13 as well as the International Valuation Standards Council ("IVSC").

The Investment Adviser applies multiple assumptions in the valuation models as detailed below:

General

• Discount rate: For the assets currently in operation, the Investment Adviser applied a discount rate from 6.0% to 8.0%. The 6.0% discount rate is applied only for revenue contracted periods, reflecting the lower risk associated with National Grid as a counterparty.
• Movement in working capital: Change in working capital (period-on-period current assets less current liabilities) is incorporated into project cash flows through an assessment of relevant balance sheet operating line items (e.g.: changes in receivables, payables and VAT balance).
• Inflation: Cash flow models include long-term inflationary uplift of income and expenses at 2.5%. In light of government targets (in particular the UK government's long-term target), the Investment Adviser considers this to be the most appropriate.

Revenue

• Contracted revenues based on the actual contracted prices and estimated availability.
• Uncontracted revenues based on the unit price forecast from third party research house(s).
• Future optimum mix of various revenue contracts based on advice from industry experts (third party consultants).

Valuation of the Investment Portfolio
Operating Expenses

• Expenses based on (a) contracted prices under long term agreement (e.g. machinery maintenance and lease contract) or (b) most recent actuals/quotes with inflation adjustments.
• Energy cost based on system efficiency from EPC's technical specifications, published transmission/distribution network tariff and third party electricity price forecast.

Portfolio Summary

1. Boulby (6 MW)
   From July to September 2018, Boulby's average availability was 88.0%. During the period there was a one-off inverter incident which negatively affected Boulby's performance (as detailed below), therefore, after adjustment of this incident, availability for the period would be 99.9%.

    

   In August 2018, Boulby was operating with 33% of its capacity (2 MW) for 2 weeks due to capacitor issue and, consequently, an inverter failure. Technical support was presented on site during the period and the issue was rectified by replacing the capacitor.

   In September 2018, Boulby as secured a Capacity Market T-1 contract delivery from 1 October 2018 to 30 September 2019.

2. Cenin (4 MW[4])
   From July to September 2018, Cenin's average availability was 96.1%. During the period there were two incidents which negatively affected Cenin's performance (as detailed below), therefore, after adjustment of these incidents, availability for the period is 97.7%

    

   In August 2018, there were two incidents occurred which negatively affected Cenin's performance. First, there was a loss in connectivity and the system went offline for 28 hours. The EPC reacted quickly to resolve the issue and it was fully rectified. Second, there was a loss in connectivity and the system went offline for 8 hours but the issue was rectified by the EPC within the same day. This was a result the cellular connectivity issue and, thus, a new site master controller was installed.

3. Lower Road (10 MW)
   The Company finalised its investment in Lower Road in September 2018 by acquiring an SPV owning the rights to the project. The Engineering, Procurement and Construction ("EPC") and Operating and Maintenance ("O&M") contracts have been signed.

    

   Under the EPC contract, the asset owner has the option to upgrade and increase capacity from. 5 MWh to 10 MWh within the first 6 years after the start of operations. 

4. Port of Tilbury (9 MW)
   The Company finalised its investment in Port of Tilbury in September 2018 by acquiring an SPV owning the rights to the project. The EPC and O&M contracts have now been signed.

    

   Under the EPC contract, the asset owner has the option to upgrade and increase capacity from 4.5 MWh to 9 MWh within the first 3.5 years after the start of operations.

Governance
Investment Adviser regularly reviews all energy storage assets to ensure they are compliance with planning consent and conditions set by the relevant local councils.

Investment Pipeline
The Company and Investment Adviser have identified 8 investment opportunities. Three out of eight projects have already secured exclusivity with the partners or in advanced stage of negotiations[5] as detailed below:

Exclusive Assets or in advanced stage of negotiations
Project	Location	Type of project (Front-of-the-Meter / Behind-the-Meter)	Total Project Size (MW)
Project 1	United Kingdom	Front-of-the-Meter - Lithium-ion technology	30.0
Project 2	Belgium	Front-of-the-Meter - Lithium-ion technology	25.0
Project 3	Germany	Front-of-the-Meter - Flow technology	11.0
Total 56.0 MW

Additional Pipeline
Project	Location	Type of project (Front-of-the-Meter / Behind-the-Meter)	Total Project Size (MW)
Project 4	United Kingdom	Front-of-the-Meter - Lithium-ion technology	49.0
Project 5	United Kingdom	Front-of-the-Meter - Lithium-ion technology	45.0
Project 6	United States	Front-of-the-Meter - Lithium-ion technology	30.0
Project 7	United Kingdom	Front-of-the-Meter - Lithium-ion technology	20.0
Project 8	United Kingdom	Front-of-the-Meter - Lithium-ion technology	7.5
Total 151.5 MW

 

Gore Street Capital
Investment Adviser
Date: 8 November 2018

 

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Principal risk and uncertainties
For the period from 19 January 2018 (incorporation date) to 30 September 2018

The Directors consider the following principal risks and uncertainties to the Company for the remainder of the period to 31 March 2019:

A. Risk relating to the Company

1. The Company and its subsidiaries have no employees and is reliant on the performance of third party service providers
2. The Company's targeted returns are based on estimates and assumptions that are inherently subject to significant uncertainties and contingencies
3. Changes in laws or regulations governing the Company's operations may adversely affect the Company's business
4. UK's exit from the European Union

B. Risk relating to portfolio and investment strategy

1. Macro level risks:

1.1 Energy market regulations
1.2 New energy storage technologies

2. Acquisition of energy storage projects risks:

2.1 Competition for acquisitions
2.2 Due diligence may fail to uncover all material risks

3. Others risk:

3.1 Valuation process

C. Risks relating to operation of the Company's portfolio

1. Inability to control operating expenses and investments
2. Changes in method to procure balancing services, length of contracts and pricing, including frequency response and failure to secure new contracts
3. Volatility of the price of electricity
4. Counterparty risk which includes demand aggregator, electricity supplier and other counterparties
5. Technological and operational risks may rise which may not be covered by warranties or insurance

D. Risks relating to taxation

More detailed information on the risks and uncertainties affecting the Company can be found on pages 19 - 35 of the Company's most recent Prospectus issued on 9 March 2018.

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Directors' report
For the period from 19 January 2018 (incorporation date) to 30 September 2018

The directors present their report together with the audited financial statements for the period from 19 January 2018 (incorporation date) to 30 September 2018 in accordance with section 839 (4) of the Companies Act 2006. This is also the first set of financial information prepared by Gore Street Energy Storage Fund Plc (the "Company") and therefore no comparatives are provided.

Principal activity and status
The Company was incorporated in England and Wales on 19 January 2018 with company number 11160422 and registered as an investment company limited by shares under Section 833 of the Companies Act 2006. On 25 May 2018, the Company's ordinary shares were admitted a Premium Listing and commenced dealings on the Main Market of the London Stock Exchange ("LSE"). The Company has subsequent to its launch, entered the Investment Trust Company ("ITC") regime for the purposes of UK taxation. The Company is a Member of the Association of Investment Companies ("AIC").

Business review
During the period the Company invested £1 in GSES 1 Limited, a newly incorporated company in the United Kingdom. Since the IPO in 25 May 2018, the Company, through GSES 1 Limited, has successfully acquired 4 facilities of which 3 facilities are wholly owned by the Company. The Chairman's statement and Investment advisors report expands on the business activity and acquisitions in the period.

Results and dividends
The financial statements of the Company for the period appear pages on 18 to 21. Total Comprehensive loss for the period was £377,812. The Directors recommend that an interim dividend of 2 pence per share be paid in respect of the period ended 30 September 2018.

Dividend policy
Subject to market conditions and performance, financial position and financial outlook, it is the Directors' intention to pay an attractive level of dividend income to shareholders on a quarterly basis. The targeted annual dividend for 31 March 2019 is 4p per Ordinary share and thereafter 7 pence per share as per the supplemental prospectus. The Company intends to grow the dividend progressively, through investment in upward-only, inflation-protected, long-term lease agreements.

Share capital
As at 30 September 2018, 30,600,000 ordinary shares were in issue and no other classes of shares were in issue at that date.

Risk management and internal control
The Board is responsible for financial reporting and controls, including the approval of the Annual Report and Accounts, the dividend policy, any significant changes in accounting policies or practices, and treasury policies including the use of derivative financial instruments. During the period the Board has carried out a robust assessment of the principal risks and uncertainties facing the Company and how they are being mitigated, as described on pages 11.

In light of the Company's current position and principal risks and uncertainties, the Board has assessed the prospects of the Company for a period of 12 months from the date of this report, reviewing the Company's liquidity position, compliance with any loan covenants and the financial strength of its energy contracts, together with forecasts of the Company's future performance under various scenarios. The Board has concluded there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities over that period. The Board has also assessed the prospects of the Company over a longer period than the going concern review and has a reasonable expectation that the Company will be able to continue in business over the five year period examined in that assessment.

The Board is also responsible for the internal controls of the Company, including operational and compliance controls and risk management systems, which are documented in a Board memorandum. As with any risk management system, the Company's internal control framework is designed to manage risk but cannot give absolute assurance that there will never be any material misstatement or loss. The Board has reviewed the risk management and internal control framework in the period and believes it to be working effectively. The Board has considered the appropriateness of establishing an internal audit function and, having regard to the relatively simple nature of the Company's operations and the likely cost of such a function, has concluded that it is not necessary at this stage.

Risk management and internal control continued
The Board meets at least every quarter to review the Company's performance against its strategic aims, objectives, business plans and budgets and ensures that any corrective action considered necessary is taken. Additional meetings are held as required to deal with the business of the Company in a timely manner. Directors are expected to attend all meetings of the Board and all meetings of those committees on which they sit, as well as the Annual General Meeting ("AGM"). Meetings called outside the scheduled quarterly Board meetings may need to be convened at relatively short notice and therefore at times when not every director is available. Every meeting during the period has however been correctly convened with an appropriate quorum and with the directors independent of the Investment Adviser.

Directors
All directors are non-executive directors. In accordance with the Articles of Association, all directors are required to retire and seek re-election at the AGM following their initial appointment to the Board. All four directors will therefore retire and seek re-election at the next AGM having been appointed during 2018.

The Company maintains £10 million of directors' and Officers' Liability Insurance cover for the benefit of the directors, which was in place throughout the period and which continues in effect at the date of this report.

Details of the fees paid to directors in the period are set out below.

Director	Annual fee (£)	Received in period ended 30 September 2018 (£)
Patrick Cox	33,000	11,635
Caroline Banzsky	21,000	7,404
Malcolm King	18,000	6,346
Thomas Murley	18,000	6,346

In accordance with FCA Listing Rules 9.8.6(R)(1), Directors' interest in the shares of the Company (in respect of which transactions are notifiable to the Company under FCA Disclosure and Transparency Rule 3.1.2(R)) as at 30 September 2018 are shown below:

Directors' interest and beneficial interest	Number of ordinary shares	Percentage of issued share capital
Patrick Cox	49,996	0.02%
Caroline Banzsky	35,000	0.01%
Malcolm King	25,000	0.01%

Significant shareholdings
As at 30 September 2018 the directors have been notified that the following shareholders have a disclosable interest of 3% or more in the ordinary shares of the Company:

Shareholder	Number of ordinary shares	Percentage of issued share capital
AJ Bell	877,692	3%
Nigel Lindsay-Fynn	800,000	3%
Interactive Investor	872,585	3%
Hargreaves Lansdown	902,118	3%
Stockdale Securities connected	937,681	3%
Premier Asset Management	1,100,000	4%
First Avenue LLC	1,850,000	6%
Herald IM	2,000,000	7%
Nippon Koei Co. Ltd	6,000,000	20%
NEC Energy Solutions Inc	8,000,000	26%

Political contributions
The Company made no political contributions during the period.

Greenhouse gas emissions reporting
The Board has considered the requirement to disclose the Company's measured carbon emissions sources under the Companies Act 2006 (Strategic report and Director's report) Regulations 2013.

During the period ended 30 September 2018:

• any emissions from the Company's projects have been the subsidiaries responsibility rather than the Company's, so the principle of operational control has been applied;
• any emissions that are either produced from the Company's registered office or from offices used to provide administrative support are deemed to fall under the Adviser and Manager's responsibility; and
• the Company has not leased or owned any vehicles which fall under the requirements of Mandatory Emissions Reporting.

As such, the Board believes that the Company has no reportable emissions for the period ended 30 September 2018.

Employees
The Company has no employees and therefore no employees share scheme or policies for the employment of disabled persons or employee engagement.

Other disclosures
Disclosures of financial risk management objectives and policies and exposure to financial risks are included in note17 to the financial statements.

Disclosures in relation to the Company's business model and strategy have been included within the Investment Adviser's report on page 3. Disclosures in relation to the main industry trends and factors that are likely to affect the future performance and position of the business have been included within the Investment Advisers report. Disclosures in relation to environmental matters, employees, social and human rights issues, employee diversity have not been included as the directors' do not consider these to be relevant to the Company.

Disclosure of information to auditors
All of the Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.

Independent Auditors
Ernst & Young LLP were appointed as auditors by the directors during the period and have expressed their willingness to continue as auditor for Company.

 

Signed by order of the Board,

Patrick Cox
Chairman
Date: 8 November 2018

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Statement of directors' responsibilities

The directors are responsible for preparing the half yearly report and financial statements in accordance with applicable law and regulations.

As a company listed on the London Stock Exchange, Gore Street Energy Storage Fund Plc is subject to the FCA's Listing Rules and Disclosure and Transparency Rules, as well as to all applicable laws and regulations in England and Wales where it is registered.

The half yearly report and financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. Under company law, the directors must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the Company and of the profit or loss for the period. In preparing these financial statements, the directors should:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable;
• specify which generally accepted accounting principles have been adopted in their preparation; and
• prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping proper accounting records which are sufficient to show and explain the Company's transactions and are to disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. 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 also responsible for preparing the Half yearly report and financial statements and the directors confirm that they consider that, taken as a whole, the half yearly report and financial statements is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy. In accordance with the FCA's Disclosure and Transparency Rules, the directors confirm to the best of their knowledge that:

a) the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company taken as a whole; and
b) The half year report and accounts include an indication of important events that have occurred during the first period of the financial period, and their impact on the set of financial statements, and description of the principal risks and uncertainties for the remaining six months of the financial year.
c) The half year report and accounts include the related parties' transactions that have taken place in the first period of the financial period and that have materially affected the financial position or the performance of the enterprise during that period.

The directors have acknowledged their responsibilities in relation to the financial statements for the period to 30 September 2018.

Going concern
The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the financial statements and related notes. In addition, note17 to the financial statements includes the policies and processes for managing its capital, its financial risk management, details of its financial instruments and its exposure to credit risk and liquidity risk. The Company has sufficient financial resources and expectation of growth in the medium-term to meet its financial obligations. As such the directors believe that the Company will continue into the foreseeable future and have adopted the going concern basis of preparation in preparing these financial statements.

 

Signed by order of the Board,

Patrick Cox
Chairman
Date: 8 November 2018

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Independent Auditors report to the members of Gore Street Energy Storage Fund Plc

We have examined the initial accounts of Gore Street Energy Storage Fund Plc for the period from 19 January 2018 (incorporation date) to 30 September 2018 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flow and the related notes 1 to 23. The initial accounts have been prepared under the accounting policies set out therein.

This report is made solely to the company's members, as a body, in accordance with Section 839(5) of the Companies Act 2006 and for no other purpose. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As described in the statement of directors' responsibilities the directors are responsible for the preparation of the initial accounts in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
Our responsibility is to report to you our opinion as to whether the initial accounts have been properly prepared within the meaning of section 839(4) of the Companies Act 2006.
Opinion

In our opinion the initial accounts for the period from 19 January 2018 (incorporation date) to 30 September 2018 have been properly prepared within the meaning of section 839(4) of the Companies Act 2006.

 

Caroline Mercer (Senior Statutory Auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
London
8 November 2018

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Statement of Comprehensive Income
For the period from 19 January 2018 (incorporation date) to 30 September 2018

	Notes	19 January 2018 to 30 September 2018 (£)
Net gain /(loss) on investments at fair value through the profit and loss	6	(110,380)
Revenue	7	18,863
Administrative and other expenses	8	(286,295)
Loss before tax		(377,812)
Taxation	9	-
Loss after tax and loss for the period		(377,812)
Total comprehensive loss for the period		(377,812)
Loss per share (basic and diluted) - pence per share	10	(1.23)

All items dealt with in arriving at the result for the period relate to continuing operations.

The notes on pages 21 to 35 form an integral part of these financial statements

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Statement of Financial Position
As at 30 September 2018

Company number 11160422

	Notes	30 September 2018 (£)
Assets
Investments at fair value through the profit or loss:
Investment in subsidiary	11	7,981,451
		7,981,451
Current assets
Cash and cash equivalents	12	17,171,647
Trade and other receivables	13	4,695,294
		21,866,941
Total assets		29,848,392
Current liabilities
Trade and other payables	14	(177,663)
		(177,663)
Total net assets		29,670,729
Shareholders equity
Share capital	19	306,000
Share premium	19	47,708
Special reserve	19	186,656
Capital reduction reserve	19	29,508,177
Retained earnings	20	(377,812)
		29,670,729
Total shareholders equity		29,670,729
Net asset value per share	18	0.97

The half yearly financial statements were approved and authorised for issue by the Board of directors and is signed on its behalf by;

Patrick Cox
Chairman
Date: 8 November 2018

 

The notes on pages 21 to 35 form an integral part of these financial statements.

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Statement of Changes in Equity
For the period from 19 January 2018 (incorporation date) to 30 September 2018

	Share capital (£)	Share premium reserve (£)	Special reserve (£)	Capital reduction reserve (£)	Retained earnings (£)	Total shareholders equity (£)
As at 19 January 2018	-	-	-	-	-	-
Comprehensive loss for the period	-	-	-	-	-	-
Loss for the period	-	-	-	-	(377,812)	(377,812)
Total comprehensive loss for the period	-	-	-	-	(377,812)	(377,812)
Transactions with owners
Ordinary shares issued at a premium during the period	306,000	30,294,000	-	-	-	30,600,000
Share issue costs	-	(551,459)	-	-	-	(551,459)
Issue of redeemable preference shares	12,500	-	-	-	-	12,500
Redemption of redeemable preference shares	(12,500)	-	-	-	-	(12,500)
Transfer to special reserve	-	(186,656)	186,656	-	-	-
Transfer to capital reduction reserve	-	(29,508,177)	-	29,508,177	-	-
As at 30 September 2018	306,000	47,708	186,656	29,508,177	(377,812)	29,670,729

The notes on pages 21 to 35 form an integral part of these financial statements.

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Statement of Cash Flow
For the period from 19 January 2018 (incorporation date) to 30 September 2018

	19 January 2018 to 30 September 2018 £
Cash flows used in operating activities
Loss for the period	(377,812)
Net gain /(loss) on investments at fair value through the profit and loss	110,380
(Increase) in trade and other receivables	(4,695,294)
Increase in trade and other payables	177,663
Net cash generated/ (used )in operating activities	(4,785,063)
Cash flows used in investing activities
Purchase of investments	(8,091,831)
Net cash generated/ (used) in investing activities	(8,091,831)
Cash flows used in financing activities
Proceeds from issue of ordinary shares at a premium	30,600,000
Share issue costs	(551,459)
Issue of redeemable preference shares	12,500
Redemption of redeemable preference shares	(12,500)
Net cash inflow from financing activities	30,048,541
Net increase in cash and cash equivalents for the period	17,171,647
Cash and cash equivalents at the beginning of the period	-
Cash and cash equivalents at the end of the period	17,171,647