2nd Quarter 2011 Report to Shareholders

September 2011 Dear Fellow Shareholder, Ascendant Group Limited’s Six-Month Report as of 30 June 2011 is enclosed.Our group of companies continues to weather the Island’s economic downturn and to navigate uncertain industry and regulatory environments. Reduced sales in electricity at Bermuda Electric Light Company Limited (BELCO) and decreased propane usage at Bermuda Gas & Utility Company Limited are clear indicators of fewer residents on the Island, as well as reduced commercial activities in both our international business and hospitality sectors. These challenges have had a direct impact on our bottom line. The recently released 2011 Bermuda Energy White Paper, which sets out Government’s proposed direction and policy, is also being considered as we contemplate further investment in the energy sector. All of these matters will influence our future investment decisions, but they have also served as catalysts for change in our operating companies. Like other organisations in Bermuda and across the world, we are focused on developing what is sustainable in each of our operating companies, as we prepare for protracted economic instability. We are pursuing new business opportunities and developing the capabilities and talent that are embedded across our companies and at the same time identifying areas for further cost reductions, whilst reviewing our pricing and rate structures, product and service offerings, existing practices, policies and procedures. inVenture Limited was established to pursue new public-private infrastructure projects in Bermuda. Two critical components to position our group for emerging business opportunity in Bermuda are engineering and facilities management functions. We are, accordingly, realigning our engineering group and have moved to establish a facilities management capability in our group of companies. We have incorporated iFM Limited, which is a joint venture with Canadian firm Black & McDonald, and are now poised to participate in public-private ventures in facilities management, and with similar partnerships we will also be positioned to pursue new infrastructure developments in Bermuda. Continuity in leadership is fundamental to the future of Ascendant Group. To ensure that we have the right people in place to maintain momentum, we are developing and promoting talented Bermudians. Each of our companies is led by a Bermudian and, in 2011, we have promoted and appointed a number of individuals to new positions, giving them greater responsibility to enhance their leadership development. We continue to support professional developmentthrough work-related training, apprenticeship, internship and scholarship programmes, as well as management training and engineer-in-training programmes. Each of Ascendant Group’s operating companies share certain similar challenges, such as legacy costs related to salaries and benefits, but each also has unique priorities that are being addressed by management. At the Ascendant Group level, a key priority is ensuring that the each of our operating companies pursue certain business opportunities together, thereby leveraging our collective strengths. BELCO has a long list of priorities, but our requirement to invest in new plant that can be justified by a sustainable rate structure is perhaps the most important. As important as this is, management is also investigating and analysing alternative fuels and other options that address fuel oil price volatility and the consequential impact on the fuel adjustment rate. The Government’s White Paper clearly outlines some very aggressive carbon targets over the next 10 years and it is critical that BELCO consider how these targets can be met by its current and future plant. On the alternative energy front, Bermuda Gas’ management is building on a healthy base by growing the product line, emphasising energy efficiency and introducing new technologies to expand the range of uses for liquid propane gas, which is a clean fuel. PureNERGY Renewables, Ltd. remains positioned to participate in Bermuda’s small-scale renewables market, as this market develops. Sigma Corporate Services Company Limited is focused internally on identifying opportunities for greater efficiency and synergy. By year end, Sigma will have expanded to include Ascendant Group’s human resources, corporate communications, legal, investor relations, finance and IT service functions. Collectively, the Ascendant Group of companies is committed to building a viable, sustainable future. The economic downturn has created what we believe will be a “new norm” for us and for Bermuda, in which growth is no longer taken for granted. We believe that we can support the building of the new foundation for Bermuda, not just in the area of energy supply, but also in the design and construction of modern infrastructure and facilities that will support our tourism and international business sectors. While we will certainly feel the effects of the weak economy through 2012, we are optimistic about our group of companies’ potential, which we all realise and accept is inextricably linked to Bermuda’s long-range wellbeing. Sincerely, A.L.Vincent InghamPresident & Chief Executive Officer