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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| PowerHouse Energy Group Plc | AQSE:PHE.GB | Aquis Stock Exchange | Ordinary Share | GB00B4WQVY43 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.975 | 0.80 | 1.00 | 0.975 | 0.90 | 0.975 | 0.00 | 15:29:31 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMPHE
PowerHouse Energy Group plc
("PowerHouse" or the "Company")
Final Results
PowerHouse is pleased announce its audited results for the year ended 31
December 2015. A copy of the annual report and accounts will be posted to
shareholders today and will be available shortly from the Company's website,
www.powerhouseenergy.net . A notice of the Company's annual general meeting
will be sent in due course.
Contacts:
PowerHouse Energy Group plc +1 352 359 0911
Keith Allaun, Executive Chairman
WH Ireland Limited (Nominated Adviser) +44 (0) 207 220 1666
James Joyce / James Bavister
Vicarage Capital Limited (Joint Broker) +44 (0) 203 651 2910
Jeremy Woodgate
Chairman's Report
Dear Shareholders
Thank you for supporting PowerHouse for another year. As you are well aware,
2015 was a year of continued challenge as the Company has driven the
development of an entirely new ultra-high temperature gasification technology.
Our decision to begin the design of a newly engineered technology, from first
principals, was not taken lightly. It was, however, the only way for the
company to move forward with a commercially robust technology and begin to
deliver on the next phase for PowerHouse.
I realise that at times it has felt like the company was operating in
"suspended animation" or was "hibernating" and in many regards we were. All
resources were being diverted to the development of on a replacement for the
previous technology. Commercial discussions have all been contingent upon the
successful completion of the G3-UHt.
The technical challenges inherent in developing the PowerHouse G3-UHt system,
from scratch, were, at times, significant, however the engineering team
persevered and has now completed a fully functional, nominal 2-5 tonne per day
(tpd), system which is being demonstrated in Brisbane, Australia.
Developing the G3 System in approximately eighteen months, while longer than
originally anticipated, was a tremendous improvement on the time for
development of previous technologies embraced by the company.
2015 also saw the first infusion of capital to the Company since the Hillgrove
Convertible Note. The Company was able to raise approximately GBP230,000 in
private investment in December 2015, and has subsequently raised another GBP
250,000 in March of 2016. This money has ensured that PowerHouse can operate
independently for the foreseeable future and begin the building of its
commercial team.
We anticipate that we will be basing a portion of our business development
activities in Brisbane to liaise with the engineering team, and to provide
specific feedstock testing for potential clients.
The Company is in active discussion with a number of potential clients who have
been awaiting the completion of the G3-UHt. These client operations range in
size from 5 tpd to 1000 tpd and include interest from Sydney, the UK, the
middle East, Thailand and California among others. The Directors remain
enthusiastic about the technology regardless of the delays we have faced, and
recognize that the PHE G3-UHt System has the potential to be one of the most
robust, cost-effective, operationally efficient, and flexible Gasification
System on the market.
The Waste-to-Energy landscape continues to be an evolving and growing market.
Demand in the market for alternatives to incineration and to landfill is
increasing significantly. Landfill taxes are at an all time high and are
expected to continue to grow, making alternatives like Ultra High Temperature
Gasification very attractive. While incinerator are still being approved in
some geographies, deployment of this technology is slowing as more
environmentally friendly alternatives (like the PHE G3-UHt System) are coming
to market.
The advantages of gasification are multiple. In addition to a reduced carbon
dioxide footprint compared to incineration, Ultra High Temperature Gasification
results in no leachable residue or ash- a significant problem faced by other
pyrolysis and lower temperature gasification systems. Low temperature
alternatives produce significant levels of highly toxic and potentially
carcinogenic cyclic molecules. These toxins are imbued in the residues and
ashes of lower temperature systems and require that the ash and residue be
land-filled for hygiene and safety. This is not the case with the PHE approach.
Our Ultra High Temperature Gasification is designed to completely
demolecularise the waste-stream, detoxifies the residue, and allows us to
capture and recycle components of the waste-stream like Sulfur, Zinc, and other
minerals.
Another advantage to the PHE approach to Gasification is our ability to
integrate a pressure swing absorber (PSA) into the gas recovery system and to
generate a 99.99% pure stream of Hydrogen. The creation of this pure Hydrogen
allows PHE to participate in the burgeoning Hydrogen economy. California is
building a string of service stations between Los Angeles and San Francisco to
provide alternative fuels, like Hydrogen, for automobiles along this "Hydrogen
Corridor."
Additionally, Hydrogen can be compressed and transported to other sites where
it may be used. The Hydrogen will also be able to feed fuel cells and generate
electricity at improved efficiencies to other alternatives in the market.
The PowerHouse Energy Group has been engaged in commercial explorations
regarding longer-term opportunities to own and operate entire tip and transfer
operations. These opportunities represent legitimate "infrastructure" for
larger communities whereby our vision is to manage the collection of waste, the
recycling and transfer of components of the waste-stream, gasification of
appropriate components of the waste-stream, and finally the generation of
electricity back to the community grid for use by consumers.
We continue to investigate alternative methods to finance and acquire some of
these larger operations throughout South East Asia and Australia. We continue
to build and develop third-party representative relationships to market and
sell PHE technology and equipment throughout the EU, the United States,
Australia, Africa, and Asia. We have inquiries from almost every continent
regarding the G3-UHt System.
Specialized waste markets represent very large, and potentially very lucrative,
markets for the use of the G3 System. Our ability to deal with medical,
biological, and pharma waste is unparalleled. Our system's complete
demolecularization capabilities allows us to manage very expensive and toxic
waste-streams and to capture the energy value and completely detoxify the
waste. Any resultant residue is completely non-toxic, non-leachable, and
requires no specialized disposal. It has the consistency of talc.
Auto Shredder Residue (ASR) is another niche market that is extremely
interesting due to the cost of eliminating the non-recyclable components of
Automobile dismantling. Our ability to gasify the non-recyclable organic
components of the ASR allows us to convert those organics into Synthesis Gas
and fuel electrical generation for the operation of the dismantling operations,
and send the excess electricity back to the grid.
Our commercial foci in 2016 will consist of opportunities in all of the above
markets, both directly, and in support of partner relationships to successfully
deploy the PHE G3 technology.
We're confident that construction of the first commercial facilities utilizing
the PHE G3-UHt System will occur within the next 12 months. It has been a long
and arduous journey for the Company, and for the shareholders. We're hopeful
that the finalization of the technology will begin to lead to the commercial
results of which we've been confident since the advent of the Company.
Hillgrove Investments Pty Ltd
Hillgrove Investments Pty Ltd (Hillgrove) support has been important to the
Company throughout 2015. The Hillgrove Convertible Note (the Note) funded the
engineering efforts that have resulted in the G3, and have provided additional
resources for Company operations. This support has been provided by advances
under a convertible loan note facility dated 19 June 2012. As at 31 December
2014, the amount owing to Hillgrove under the convertible loan note was GBP
2,181,004. As at 31 December 2015, the amount owing under the convertible loan
note is GBP2,938,636 Additionally, Hillgrove has made a commitment not to call
the note for a period of at least one year from the publication of these
financial statements.
Current trading
The beginning of 2016 has been an active and tumultuous time. Testing has been
completed on the G3 and third party engineering verification is underway. The
Company appointed a new Nominated Advisor, WH Ireland. Additionally we were
able to finalise a deal with RenewMe which made them an active partner in the
Company's success. We have also appointed a 3rd non-executive Director in
Cliver Carver, whose experience in financial markets will be of tremendous
value to the Company as we move forward to the next phase of our growth.
The Company is on firm footing for the foreseeable future. Cash-on-hand balance
at the date of this report is approximately GBP320,000, representing
approximately 17 months of company operations without requiring additional
cash.
Outlook
PowerHouse is poised to begin its recommencement. We have a technology that we
believe is unparalleled in its capability, its efficiency, its economy, its
environmental contribution, and of which we can feel proud. The Company has
been steered through a very rough 4 years with the support of Hillgrove, and
the conscientious advice of both Brent Fitzpatrick and James Greenstreet our
non-executive directors. We are confident that PowerHouse can finally meet the
promise that was envisioned when the Company was founded.
As always, we are continually grateful for your support.
Keith Allaun
Chairman
30 June 2016
Directors' Report
The Directors present their annual report along with the Company's financial
statements and the consolidated financial statements for the year ended 31
December 2015. The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and will be laid before the
shareholders of the Company at the Annual General Meeting to be held on 08
September 2016.
The subsidiary companies are currently in the process of being liquidated with
the relevant authorities. While the subsidiary was closed in 2014 the
consolidated accounts have been required to be prepared as the company still
owns them at the year end. All assets and liabilities have been impaired in
these accounts and there is no financial recourse to the company as a result of
the liquidation.
Principal activities
The principal activities of the Group are to maintain minimal expenditures
whilst it begins to fully exploit and commercially roll-out our newly developed
PHE G3-UHt Waste-to-Energy System. Our Ultra-high temperature gasification
reactor converts waste materials such as non-recyclable plastic, bio-mass, and
other waste streams into a high-quality, clean, synthesis gas composed
primarily of hydrogen and carbon monoxide.
The newly engineered, designed, and constructed PHE G3-UHt system is completed
and in final testing. Demand for our new technology is increasing, with
Australia, Asia, and the UK being principal drivers.
Review of developments and future prospects
A more thorough review of the development of the business together with an
indication of future proposed developments is included in the Chairman's Report
set out on pages 4 to 6.
The Company financial statements for the year ended 31 December 2015 are set
out on pages 13 to 22. The Company loss for the year after taxation amounted to
GBP781,647 (2014: Loss of GBP2,549,999). The Group financial statements are set out
on pages 25 to 36. The Group profit for the year after taxation amounted to
$479,542 (Loss42014: $5,047,975). The net liabilities of the Company are GBP
2,960,219 (2014: GBP2,409,972) with the movement in the year set out on page 13.
The net liabilities of the Group are $4,376,979 (2014: $5,422,734) with the
movement in the year set out on page 26.
The Directors do not recommend the payment of a dividend (2014: GBPnil).
Principal risks and uncertainties are discussed in note 13 to the Company
financial statements.
There have been no significant events since the balance sheet date other than
those discussed in this Directors' Report and the Strategic Report.
Research and development
The Group and Company incurred no research and development related costs during
the year (2014: GBPnil).
Substantial shareholdings
Shareholders holding in excess of 3 per cent of the issued share capital of the
Company, which the Company was aware of as at 31 December 2015 were as follows:
Number of
ordinary Percentage of
shares of 0.5p voting rights
each
Hargreaves Landsdown (Nominees) Limited 104,203,648 21.78
Pershing Nominees Limited 102,271,069 21.37
Renewme 90,932,961 15.96
SVS (Nominees) Limited Des: Pool 29,344,830 6.13
Roy Nominees Limited 25,284,508 6.51
TD Direct Investing Nominees (Europe) Limited 24,989,765 6.43
Hillgrove Investments Pty Limited 20,000,000 5.15
Directors
The Directors, who served during the year, and subsequently, were as follows:
Robert Keith Allaun Executive Chairman
Nigel Brent Fitzpatrick Non-Executive Director
James John Pryn Greenstreet Non-Executive Director
Clive Nathan Carver Non-Executive Director (appointed 17 May
2016)
Corporate Governance
As AIM companies are not required to provide corporate governance disclosures,
the Directors have chosen not to do so.
Payment to suppliers
The Group does not have a standard or code which deals specifically with the
payment of suppliers. Total creditor days for the Company for the year ended 31
December 2015 were 82 days (2014: 121 days) and for the Group 82 days (2014:
120 days).
Going concern basis
The Directors have considered all available information about the future events
when considering going concern. The Directors have reviewed cash flow forecasts
for 12 months following the date of these Financial Statements.
The cash balance held at 31 December 2015 of GBP175,750 is sufficient to ensure
the company can pay its debts as they fall due. A further fundraise has been
completed post year end increasing cash reserves. Based on this, the Directors
believe it is appropriate to continue to adopt the going concern basis of
accounting for the preparation of the annual financial statements.
Additionally Hillgrove Investments Pty Limited, as the holder of Convertible
Loan Agreement, confirms that it will not seek repayment of any amounts due
under the Note or Convertible Loan Agreements until at least 12 months beyond
publication of the Company's 2015 annual financial statements.
The Directors continue to adopt the going concern basis of accounting for the
preparation of the annual financial statements, further explanation is
available in note 1.3 of the Company financial statements.
Auditor
Each of the persons being a Director at the date of approval of this report
confirms that:
- So far as the director is aware there is no relevant audit information of
which the Company's auditor is unaware; and
- The Director has taken all the steps that he ought to have taken as a
Director in order to make himself aware of any relevant audit information and
to establish that the Company's auditor is aware of that information.
This confirmation is given, and should be interpreted, in accordance with the
provisions of s.418 of the Companies Act 2006.
Approved by the Board of Directors and signed on behalf of the Board on 30 June
2016.
Keith Allaun
Director
Strategic Report
Business review
The principal activity for PowerHouse was the engineering and redevelopment of
the PHE G3-UHt System from first principles. During decommissioning of the
former Pyromex Eiting facilities, major flaws were discovered in the previous
designs which would lead, in our estimation, to a commercial failure were they
to be perpetuated. Hence the redesign and rebuilding of the G3 System from the
ground up. We have been very encouraged by early testing and commissioning
results, and final testing should be completed in the near future.
Our continued enhancement and modeling of the processes have increased the
efficiencies of the system and have allowed us to begin the pre-feasibility
design and process flow of 1000+ tonne per day systems for infrastructure
applications.
It is anticipated that the Company will begin to actively pursue commercial
opportunities upon completion of the testing program. A significant number of
potential customers have expressed interest in entering negotiations with the
Company when we deem the System complete.
Corporate Governance:
The Company raised GBP250,000 in December 2015 for operating capital. The Company
raised an additional GBP250,000 in February to expand its operating capital.
The Company has replaced its Nominated Advisor with WH Ireland.
The Directors were granted immediately vesting options by vote of the
Shareholders at the Annual General Meeting held, 3rd December, 2015 as follows:
Keith Allaun, 6 Million Options at 0.75p
Brent Fitzpatrick, 5 Million Options at 0.75p
James Greenstreet, 4 Million Options at 0.75p
The Company established an AIM Rule Compliance Committee in early 2016 to
ensure Compliance with AIM regulation.
The Company appointed Clive Carver as an additional Non-Executive Director in
May of 2016. His appointment will be voted upon and confirmed at the upcoming
Annual General Meeting, September 8, 2016.
The Company loss for the year is GBP781,647, (2014: loss of GBP2,549,999). Further
details regarding financial performance are included in the Directors' Report
on page 7.
The Company has no employees and has a board of 3 male directors.
Principal activities and review of developments
The Directors' Report contains details of the Company's principal activities
and a review of significant developments.
Principal risks and uncertainties
The availability of funding remains a principal risk for the company. The
company is dependent on continued financial support from Hillgrove Investments
Pty Limited to maintain its minimal operational costs.
Further information on the Company's principal risks is detailed in note 13 on
page 22.
Approved by the Board of Directors and signed on behalf of the Board on 30 June
2016..
Keith Allaun
Director
Directors' Responsibilities Statement
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors are required to prepare the group
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union (EU) and have also chosen to
prepare the parent company financial statements under IFRSs as adopted by the
EU. Under company law the directors must not approve the accounts 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 period. 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 IFRSs 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
enable them to ensure that the financial statements comply with 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 responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in 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 International
Financial Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the company and the
undertakings included in the consolidation taken as a whole;
· the strategic report includes a fair review of the development and
performance of the business and the position of the company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they 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 performance, business model and
strategy.
BY ORDER OF THE BOARD
Keith Allaun
Director
30 June 2016
Independent Auditor's Report to the Members of PowerHouse Energy Group PLC
We have audited the parent company financial statements of Powerhouse Energy
Group plc for the year ended 31 December 2015 which comprise the Statement of
Comprehensive Income, the Statement of Changes in Equity, the Statement of
Financial position, the Statement of Cash Flows and the related notes 1 to 16.
The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. 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 auditor
As explained more fully in the Directors' Responsibilities Statement, the
directors are responsible for the preparation of the parent company financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the parent company
financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the parent company's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of the financial
statements. In addition, we read all the financial and non-financial
information in the annual report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications
for our report.
Opinion on financial statements
In our opinion the parent company financial statements:
· give a true and fair view of the state of the company's affairs as at 31
December 2015 and of its loss for the year then ended;
· have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
· have been prepared in accordance with the requirements of the Companies
Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors'
Report for the financial year for which the financial statements are prepared
is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not visited
by us; or
· the parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not
made; or
· we have not received all the information and explanations we require for
our audit.
Other matter
We have reported separately on the group financial statements of Powerhouse
Energy Group plc for the year ended 31 December 2015. That report includes a
disclaimer of opinion in respect of the audit evidence available to us and, as
a result of this, we have been unable to express an opinion on the Group
financial statements.
Simon Manning (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Leeds, United Kingdom
30 June 2016
Company Statement of Comprehensive Income
For the year ended 31 December 2015
31 December 31 December
Note 2015 2014
GBP GBP
Revenue - -
Administrative expenses 0 (397,022) (1,182,488)
Restructuring costs 7 - (1,038,026)
Operating loss (397,022) (2,220,514)
Finance costs 0 (384,625) (329,485)
Loss before taxation (781,647) (2,549,999)
Income tax expense 0 - -
Total comprehensive loss (781,647) (2,549,999)
Loss per share (pence) 0 (0.20) (0.65)
Diluted loss per share (pence) 0 (0.20) (0.65)
Company Statement of Changes in Equity
Deferred Deferred Deferred
Share Share shares shares shares Retained
capital premium (0.5p) (4.0p) (4.5p) earnings Total
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January 3,483,079 46,030,203 781,808 389,494 (51,814,353) (1,129,769)
2014
Transactions with equity
participants:
- Shares issued to 183,319 365,459 - - - 548,778
settle liabilities
- Shares issued to 115,000 288,898 403,898
settle liabilities
- Shares issued to 79,567 183,553 - - - 263,120
settle liabilities
- Shares issued to 4,000 - 4,000
settle liabilities
- Shares issued to 20,000 30,000 - - 50,000
settle liabilities
- Total comprehensive (2,549,999) (2,549,999)
loss
Balance at 31 December 3,884,965 46,898,113 - 781,808 389,494 (54,364,352) (2,409,972)
2014
Transactions with equity
participants:
- - Share (1,942,483) 1,942,483
reorganisation
-
- - Shares issue 208,333 23,067 231,400
- Total comprehensive (781,647) (781,647)
loss
Balance at 31 December 2,150,815 46,921,180 1,942,483 781,808 389,494 (55,145,999) (2,960,219)
2015
The notes 1 to 16 are an integral part of the financial information.
Company Statement of Financial Position
As at 31 December 2015
Note 2015 2014
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 0 - -
Investments 7 - -
Total non-current assets - -
Current Assets
Trade and other receivables 0 1,451 5,841
Cash and cash equivalents 175,750 25
Total current assets 177,201 5,866
Total assets 177,201 5,866
LIABILITIES
Non-current liabilities
Loans 10 (2,938,636) -
Current liabilities
Trade and other payables 0 (198,784) (234,834)
Loans 0 - (2,181,004)
Total current liabilities (198,784) (2,415,838)
Net liabilities (2,960,219) (2,409,972)
EQUITY
Share capital 0 2,150,815 3,884,965
Share premium 46,921,180 46,898,113
Deferred shares 3,113,785 1,171,302
Accumulated losses (55,145,999) (54,364,352)
Total deficit (2,960,219) (2,409,972)
The financial statements of PowerHouse Energy Group Plc, Company number
03934451, were approved by the board of Directors and authorised for issue on
30 June 2016 and signed on its behalf by:
Keith Allaun
Director
The notes numbered 1 to 16 are an integral part of the financial information.
Company Statement of Cash Flows
For the year ended 31 December 2015
2015 2014
GBP GBP
Cash flows from operating activities
Loss after taxation (781,647) (2,549,999)
Adjustments for:
- Depreciation of property, plant and equipment - 114
- Waiver of loan due from subsidiary - 937,682
- Impairment of non-current assets - 1,038,026
Changes in working capital:
- Decrease in trade and other receivables 4,390 3,582
- (Decrease) in trade and other payables (36,050) (612,229)
- Increase in loan to subsidiary - (778,019)
Net cash used in operations (813,307) (1,960,843)
Cash flows from financing activities
Proceeds on issue of shares 231,400 1,224,691
Finance costs (384,625) (329,485)
New loans raised 1,142,257 1,380,041
Repayment of borrowings - (358,794)
Net cash flows from financing activities 989,032 1,919,453
Net increase/(decrease) in cash and cash equivalents 175,725 (41,390)
Cash and cash equivalents at beginning of year 25 41,415
Cash and cash equivalents at end of year 175,750 25
The notes numbered 1 to 16 are an integral part of the financial information.
Notes to the Company Accounts
1. accounting policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the financial
information.
1.1. Basis of preparation
This financial information is for the year ended 31 December 2015 and has been
prepared in accordance with International Financial Reporting Standards
("IFRS") adopted for use by the European Union and the Companies Act 2006.
These accounting policies and methods of computation are consistent with the
prior year.
1.2. Judgements and estimates
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements. The
areas involving a higher degree of judgements or complexity, or areas where
assumptions or estimates are significant to the financial statements such as
the impairment of investments and going concern are disclosed within the
relevant notes.
1.3. Going concern
The Directors have considered all available information about the future events
when considering going concern. The Directors have reviewed cash flow forecasts
for 12 months following the date of these Financial Statements.
The cash balance of GBP175,750 at 31 December 2015 is sufficient to ensure the
company can pay its debts as they fall due. A further fundraise has been
completed post year end increasing cash reserves. Based on this, the Directors
believe it is appropriate to continue to adopt the going concern basis of
accounting for the preparation of the annual financial statements.
Additionally Hillgrove Investments Pty Limited, as the holder of Convertible
Loan Agreement, confirms that it will not seek repayment of any amounts due
under the Note or Convertible Loan Agreements until at least 12 months beyond
publication of the Company's 2015 annual financial statements.
1.4. Foreign currency translation
The financial information is presented in sterling which is the Company's
functional currency.
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Monetary assets
and liabilities denominated in foreign currencies are revalued to the exchange
rate at date of settlement or at reporting dates (as appropriate). Exchange
gains and losses resulting from such revaluations are recognised in the
Statement of Comprehensive Income statement.
Foreign exchange gains and losses are presented in the statement of
comprehensive income within 'administrative expenses'.
1.5. Revenue
Revenue represents the amounts (excluding VAT) derived from the supply of
management and administration services to the Company's subsidiary, PowerHouse
Energy, Inc. Revenue is recognised when amounts fall due under the formalised
contract.
1.6. Employee costs
The Company has no employees (2014: nil).
1.7. Operating Leases
The Company has no operating leases (2014: nil).
1.8. Finance income and expenses
Finance income and expenses are recognised as they are incurred or as a result
of financial assets or liabilities being measured at amortised cost using the
effective interest method. No finance expenses were incurred in the production
of a qualifying asset (2014: nil).
1.9. Income tax expense
The tax expense for the period comprises current and deferred tax.
UK corporation tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Temporary
differences are differences between the company's taxable profits and its
results as stated in the financial statements that arise from the inclusion of
gains and losses in tax assessments in periods different from those in which
they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only to the extent that, on the basis of all available evidence, it can be
regarded as more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying temporary differences can be
deducted.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the temporary differences are expected to reverse, based
on tax rates and laws that have been enacted or substantively enacted by the
balance sheet date. Deferred tax is measured on a non-discounted basis.
1.10. Plant, property and equipment
Plant, property and equipment is stated at cost less accumulated depreciation.
Cost represents the cost of acquisition or construction, including the direct
cost of financing the acquisition or construction until the asset comes into
use.
Depreciation on plant, property and equipment is provided to allocate the cost
less the residual value by equal instalments over their estimated useful
economic lives of 3 years.
The expected useful lives and residual values of plant, property and equipment
are reviewed on an annual basis and, if necessary, changes in useful life or
residual value are accounted for prospectively.
1.11. Other non-current assets
Other non-current assets represent the investment in PowerHouse Energy, Inc.
The investment is carried at cost less accumulated impairment. Cost was
determined using the fair value of shares issued to acquire the investment.
1.12. Trade and other receivables
Trade receivables are recognised at fair value. Subsequently they are carried
at their initial recognition value less any impairment losses.
1.13. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits and are
recognised and subsequently carried at fair value.
1.14. Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Trade and other
payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
1.15. Loans
Loans are financial obligations arising from funding received and used to
support the operational costs of the Company. These are initially recognised at
fair value. Loans are subsequently carried at amortised cost using the
effective interest method.
1.16. Adoption of new and revised standards
New and revised standards adopted during the year and those standards and
interpretations in issue but not yet effective are shown in note 1.21 to the
Group financial statements.
1.17. Impairment
(i) Impairment review
At each balance sheet date, the carrying amounts of assets are reviewed to
determine whether there is any indication that those assets have suffered an
impairment loss. An impairment loss is recognised whenever the carrying amount
of an asset or its cash generating unit exceeds its recoverable amount.
Impairment losses recognised in respect of cash generating units are allocated
first to reduce the carrying amount of any goodwill allocated to cash
generating units and then to reduce the carrying amount of the other assets in
the unit on a pro-rata basis. A cash generating unit is the group of assets
identified on acquisition that generate cash inflows that are largely
independent of the cash inflows from other assets or groups of assets. The
recoverable amount of assets or cash generating units is the greater of their
fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined
for the cash generating unit to which the asset belongs.
(ii) Reversals of impairments
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
2. Administrative expenses
Included in administrative expenses are:
2015 2014
GBP GBP
Directors' fees 66,928 100,000
Operating leases - -
Net foreign exchange profit/(loss) - (148)
Auditor's remuneration - Company's audit 10,000 10,000
Impairment loss recognised on loans receivable - 937,682
carried at amortised cost (note 10)
3. Finance costs
2015 2014
GBP GBP
Other loan interest - 75,159
Shareholder loan interest 384,625 254,326
384,625 329,485
4. Income tax expense
As the Company incurred a loss, no current tax is payable (2014: GBPnil). In
addition, there is no certainty about future profits from which accumulated tax
losses could be utilised and accordingly no deferred tax asset has been
recognised. Tax losses amount to GBP5,960,134 (2014: GBP5,178,487). The tax charge
is lower (2014: lower) than the standard rate of tax. Differences are explained
below.
2015 2014
GBP GBP
Current tax
Loss before taxation 781,647 2,549,999
Tax credit at standard UK corporation tax rate of 21% 164,146 535,500
(2014 - 21%)
Effects of:
Expenses not deductible for tax purposes (164,146) (414,938)
Deferred tax not recognised - (120,562)
Income tax expense - -
5. Loss per share
2015 2014
Total comprehensive loss (GBP) (781,647) (2,549,999)
Weighted average number of shares 390,094,921 376,628,030
Weighted average number of dilutive shares 2,732,739 2,732,739
Loss per share in pence (0.20) (0.68)
Diluted loss per share in pence (0.20) (0.68)
6. Property, plant and equipment
Office
equipment
GBP
Opening carrying value -
- Depreciation -
- Net carrying value -
The cost value of fixed assets is GBP3,202 (2014: GBP3,202; 2013: GBP3,202 and 2012:
GBP3,431).
Accumulated depreciation is GBP3,202 (2014: GBP3,202; 2013: GBP3,088 and 2012: GBP
3,317).
7. Investments
Other non-current assets consist of the investment in PowerHouse Energy, Inc
and Pyromex AG. PowerHouse Energy, Inc. is incorporated in California in the
United States of America and the Company holds 100 per cent of the common stock
and voting rights of the subsidiary. Pyromex AG is based in Zug, Switzerland
and the Company holds 100 per cent of the shares and voting rights of the
subsidiary.
2015 2014
GBP GBP
Investment - Cost 48,947,154 48,947,154
Accumulated impairment (48,947,154) (47,909,128)
Impairment recognised in the year - ( 1,038,026)
- -
The cost of the PowerHouse Energy Inc investment was determined using an issue
price of 17.5 pence (the price of the Company's shares on re-listing after the
reverse takeover) for the 273,766,456 shares issued to acquire PowerHouse
Energy, Inc. During the year ended 31 December 2014 the investment in Pyromex
AG was impaired to a nil carrying value due to the wind down of operations that
commenced after this date. The investment in Powerhouse Energy Inc was already
impaired to nil value at 1 January 2014.
8. Trade and other receivables
2015 2014
GBP GBP
Other receivables 1,451 5,841
1,451 5,841
9. Trade and other payables
2015 2014
GBP GBP
Trade payables 28,182 32,567
RenewMe Limited 155,513 171,447
Other accruals 15,089 30,820
198,784 234,834
RenewMe Limited had been granted exclusive rights by Pyromex to use, own,
assemble and install and operate Pyromex AG systems in territories also
licensed to the Company's subsidiary PowerHouse Energy, Inc. The Company
entered into a settlement agreement with RenewMe whereby the parties agreed to
change the respective exclusive rights pertaining to the Pyromex technology.
Under the original settlement agreement Powerhouse Energy, Inc. had the
obligation to pay five instalments of EUR 200,000 annually beginning 30 June
2011. The Company guaranteed the obligations under the agreement of PowerHouse
Energy, Inc. As PowerHouse Energy, Inc is unable to meets its obligations, all
remaining amounts (EUR 800,000) due under the original settlement agreement
have been recognised as a liability.
On 3 March 2014 the Company announced that a settlement had been reached with
RenewMe to release its claimed geographical licenses to use our technology
under a disputed royalty agreement with Pyromex and other claims against the
company in return for EUR211,000 and the issue of 18,331,996 new Ordinary Shares
in the Company. While the equity portion of that settlement has been satisfied,
the cash payment has not been settled and the agreement has not been completed
at the year end.
On 29 April 2016 the Company announced that a full and final settlement had
been reached with Renewme to settle the remaining balance in exchange for the
issue of 90,932,961 new Ordinary shares. This will release the Company from any
and all previously disputed issues with Renewme. Upon issue of these shares
Renewme will own 15.96% of the share capital.
Capital commitments not accrued for at the year end amounted to GBP100,000 (2014:
GBP100,000) and related to plant and machinery that had not yet been received.
10. Loans
2015 2014
GBP GBP
Shareholder loan 2,938,636 2,181,004
2,938,636 2,181,004
Classified as:
- Current - 2,181,004
- Non-current 2,938,636
On 2 April 2014 the Company negotiated a settlement to repay the other loan in
full by way of issue and allotment for 11,500,000 1 pence shares in the Company
to Aspermont Limited.
Hillgrove Investments Pty Limited ("Hillgrove") has provided the Company with a
convertible loan agreement amounting to GBP2,938,636 - which can be increased at
Hillgrove's option. On 24 February 2014 the Company announced that it had
entered into a debenture with Hillgrove. The loan is secured by a debenture
over the assets of the company, and carries interest of 15 per cent per annum.
Hillgrove has the option at any time to convert the loan in part or whole at a
conversion price of 1p per share. Hillgrove have provided a letter of support
indicating they are willing to increase the loan amount pending any
unforeseeable or material changes to the Company's current circumstances.
11. Share capital
1.0 p 0.5 p 0.5 p 4.5 p 4.0 p
Ordinary Ordinary Deferred Deferred Deferred
shares shares shares shares shares
Shares at 1 January 2014 348,307,926 17,373,523 9,737,353
- Issue of shares to 40,188,668 - -
settle liabilities
Shares at 31 December 388,496,594 17,373,523 9,737,353
2014
Share reorganisation (388,496,594) 388,496,594 388,496,594
- Issue of shares - 41,666,667
-
Shares at 31 December - 430,163,261 388,496,594 17,373,523 9,737,353
2015
At 31 December 2015 (GBP) - 2,150,815 1,942,483 781,808 389,494
At 31 December 2014 (GBP) 3,884,965 - - 781,808 389,494
On 3 December 2015 the company approved a share reorganisation, whereby each of
the ordinary 1p shares would be subdivided into one new Ordinary 0.5p share and
one Deferred share of 0.5p. The new ordinary shares will have the same rights
as are attached to the previous ordinary shares.
On 14 December the company issued 41,666,667 new ordinary 0.5p shares for a
consideration of 0.6p per share.
12. Convertible instruments
Average Exercisable
exercise
price Currently Within 1 1 to 5 Total
Notes year years
Driftwood 12.3 GBP0.120 2,956,929 - - 2,956,929
2,956,929 - - 2,956,929
12.1. Warrants
No warrants are held (2014:nil).
12.2. Hillgrove
Hillgrove has the option at any time to convert its loan of GBP2,938,636 in part
or whole at a conversion price of 1p per share.
12.3. Driftwood
On 13 July 2011, PowerHouse Energy Group plc granted 2,956,929 options over
ordinary shares to Driftwood Capital Pty Limited (as trustee for Driftwood
Capital Unit Trust) exercisable as follows:
· 535,500 after 1 October 2013 at an exercise price of US$0.12 (GBP0.074) per
share; and
· 2,421,429 after 1 April 2014 at an exercise price of US$0.21 (GBP0.130) per
share.
12.4. Directors
On 8 December 2014, PowerHouse Energy Group plc granted 11,000,000 options over
ordinary shares to the Board, under the PowerHouse Energy Group plc Unapproved
Share Option Plan 2011. The options may be exercised between the Grant date and
the tenth anniversary of the grant date and will lapse if not exercised during
that period. No charge has been included in the Statement of Comprehensive
Income as it is not currently foreseen that the options will vest.
The options have an exercise price of 2.5p per share.
The options were granted as follows:
Mr Keith Allaun - 5,000,000
Mr Brent Fitzpatrick - 3,000,000
Mr James Greenstreet - 3,000,000
13. Material risks
13.1. Requirement for further funds
In assessing the going concern, the Directors have reviewed cash flow forecasts
for 12 months following the date of these accounts. The cash flow forecasts
assumed no further funding of PowerHouse Energy, Inc. and Pyromex. The current
cash reserves are considered sufficient to maintain the Company's reduced
overhead and other planned events.
In the event the Company requires other equity financing, or the conversion
option in the Hillgrove loan is exercised, remaining shareholders will be
diluted.
14. Directors' Remuneration
The Directors who held office at 31 December 2015 had the following interests,
including any interests of a connected person in the ordinary shares of the
Company:
Number of Percentage of
ordinary voting rights
shares of 1.0p
each
Nigel Brent Fitzpatrick 103,459 <0.1
The remuneration of the Directors of the Company paid for the year or since
date of appointment, if later, to 31 December 2015 is:
2015 2015 2015 2015 2014
GBP GBP GBP GBP GBP
Salary/Fee Pension Benefits Total Total
Nigel Brent Fitzpatrick 8,250 - - 8,250 -
James John Pryn - - - - -
Greenstreet
Robert Keith Allaun 58,678 - - 58,678 100,000
Service contracts
Brent Fitzpatrick and James Greenstreet have service contracts which can be
terminated by providing three months' written notice.
15. Related Parties
Hillgrove Investments Pty Limited is a related party by virtue of its
shareholding in the Company.
During the year Hillgrove Investments Pty Limited loaned the company a further
GBP373,007 and charged GBP384,625 interest. The balance outstanding at the year-end
was GBP2,938,636 (2014: GBP2,181,004).
Transactions with other related parties were conducted on an arms' length basis
and totalled GBPNIL (2014: GBP15,074).
16. Post balance sheet event
On 29 April 2016 the Company announced that a full and final settlement had
been reached with Renewme to settle the remaining balance in exchange for the
issue of 90,932,961 new Ordinary shares of 0.5p each. This will release the
Company from any and all previously disputed issues with Renewme. Upon issue of
these shares Renewme will own 15.96% of the share capital.
On 29 April 2016 the Company also announced that it was in receipt of a letter
from Hillgrove Investments Pty Limited stating that it would not seek repayment
of its loan for a period of 12 months from the date of these financial
statements.
Independent Auditor's Report to the Members of PowerHouse Energy Group plc
We were engaged to audit the Group financial statements of PowerHouse Energy
Group plc for the year ended 31 December 2015 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Financial Position, the Consolidated
Statement of Cash Flow and the related notes 1 to 16. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. 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 auditor
As explained more fully in the Directors' Responsibilities Statement, the
Directors are responsible for the preparation of the Group financial statements
and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the Group financial statements in
accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors. Because of the matter described in the
basis for disclaimer of opinion on financial statements paragraph, however, we
were not able to obtain sufficient appropriate audit evidence to provide a
basis for an audit opinion.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the parent company's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of the financial
statements. In addition, we read all the financial and non-financial
information in the annual report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications
for our report.
Basis for disclaimer of opinion on financial statements
The audit evidence available to us was limited because we were unable to obtain
accounting records in respect of PowerHouse Energy, Inc. and Pyromex Holding
AG. As a result of this we have been unable to obtain sufficient appropriate
audit evidence concerning the state of the Group's affairs as at 31 December
2015 and of its loss of the year then ended.
Disclaimer of opinion on financial statements
Because of the significance of the matter described in the basis for disclaimer
of opinion on financial statements paragraph, we have not been able to obtain
sufficient appropriate audit evidence to provide a basis for an audit opinion.
Accordingly we do not express an opinion on the Group financial statements.
Opinion on other matter prescribed by the Companies Act 2006
Notwithstanding our disclaimer of an opinion on the financial statements, in
our opinion the information given in the Strategic Report and the Directors'
Report for the financial year for which the Group financial statements are
prepared is consistent with the Group financial statements.
Matters on which we are required to report by exception
Arising from the limitation of our work referred to above:
· we have not obtained all the information and explanations that we
considered necessary for the purpose of our audit; and
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
· certain disclosures of Directors' remuneration specified by law are not
made.
Other matter
We have reported separately on the parent Company financial statements of
PowerHouse Energy Group plc for the year ended 31 December 2015. The opinion in
that report is unmodified.
Simon Manning (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Leeds, United Kingdom
30 June 2016
Consolidated Statement of Comprehensive Income
For the year ended 31 december 2015
Note Year ended Year ended
31 December 31 December
2015 2014
US$ US$
Revenue - -
Cost of sales - -
Gross loss - -
Administrative expenses 0 (602,918) (4,517,504)
Impairment of subsidiary 1,666,552 -
Operating Profit/(Loss) 1,063,634 (4,517,504)
Finance income - -
Finance expenses 0 (584,092) (530,471)
Profit/(Loss) before taxation 479,542 (5,047,975)
Income tax credit 0 - -
Profit/(Loss) after taxation 479,542 (5,047,975)
Foreign exchange gain arising on consolidation 224,065 142,995
Total comprehensive Profit/(Loss) 703,607 (4,904,980)
Total comprehensive Profit/(Loss) attributable
to:
Owners of the Company 703,607 (4,904,980)
Non-controlling interests - -
Loss per share (US$) 0 <0.01 <(0.01)
The notes numbered 1 to 16 are an integral part of the financial information.
Consolidated Statement of Changes in Equity
Non-control-ling
Shares and Accumulated Other interests
stock losses reserves US$ Total
US$ US$ US$ US$
Balance at 1 January 81,188,059 (20,901,510) (62,927,381) - (2,640,832)
2014
Transactions with
equity participants:
- Shares issued to 285,978 - 570,116 - 856,094
settle liabilities
- Shares issues to 179,400 - 450,681 - 630,081
settle liabilities
- Shares issues to 124,125 - 286,343 - 410,468
settle liabilities
- Shares issues to 6,240 - - - 6,240
settle liabilities
- Shares issues to 31,200 - 46,800 - 78,000
settle liabilities
-
- Total comprehensive
income:
- Loss after - (4,904,980) - - (4,904,980)
taxation
- Foreign exchange - - 142,195 - 142,195
arising on
consolidation
Balance at 31 December 81,815,002 (25,806,490) (61,431,246) - (5,422,734)
2014
Transactions with
equity participants:
- Share issue 308,041 - 34,107 - 342,148
Total comprehensive
income:
- Profit after 479,542 479,542
taxation
- Foreign exchange - 224,065 - 224,065
arising on
consolidation
Balance at 31 December 82,123,043 (25,326,948) (61,173,074) - (4,376,979)
2015
The notes numbered 1 to 16 are an integral part of the financial information.
Consolidated Statement of Financial Position
As at 31 December 2015
Note 31 December 31
2015 December
US$ 2014
US$
ASSETS
Non-current assets
Intangible assets 0 - -
Property, plant and equipment 0 - 2,455
Total non-current assets - 2,455
Current Assets
Trade and other receivables 0 2,146 43,846
Cash and cash equivalents 0 259,864 816
Total current assets 262,010 44,662
Total assets 262,010 47,117
LIABILITIES
Non-current liabilities
Loans 0 (4,345,067) -
Total non-current liabilities (4,345,067) -
Current liabilities
Loans 0 - (3,402,366)
Trade and other payables 0 (293,922) (2,067,485)
Total current liabilities (293,922) (5,469,851)
Total liabilities (4,638,989) (5,469,851)
Net liabilities (4,376,979) (5,422,734)
EQUITY
Shares and stocks 82,123,043 81,815,002
Other reserves (61,173,074) (61,431,246)
Accumulated losses (25,326,948) (25,806,490)
Non-controlling interests - -
Total deficit (4,376,979) (5,422,734)
The financial statements were approved by the board of Directors and authorised
for issue on 30 June 2016 and signed on its behalf by:
03934451
Keith Allaun
Director
The notes numbered 1 to 16 are an integral part of the financial information.
Consolidated Statement of Cash Flows
For the year ended 31 december 2015
Note Year ended Year ended
31 December 31 December
2015 2014
US$ US$
Cash flows from operating activities
Proft/(Loss) before taxation 479,542 (4,904,980)
Adjustments for:
- Impairment of non-current assets - 2,087,081
- Depreciation and amortisation - 662,705
- Foreign exchange revaluations 224,065 142,195
Changes in working capital:
- (Decrease)/Increase in trade and other 41,700 10,465
receivables
- (Decrease)/Increase in trade and other (1,773,563) (907,478)
payables
- Taxation paid - -
Net cash used in operations (1,028,256) (2,910,012)
Cash flows from investing activities
Disposal (purchase) of tangible and intangible - -
assets
Net cash flows used in investing activities - -
Cash flows from financing activities
Common stock issue (net of issue costs) 342,148 1,980,883
Finance income - -
Finance costs (584,092) (530,471)
Loans received/(repaid) 1,529,290 1,392,954
Net cash flows from financing activities 1,287,346 2,843,366
Net (decrease) / increase in cash and cash equivalents 259,090 (66,646)
Cash and cash equivalents at beginning of period 816 69,617
Foreign exchange on cash balances (42) (2,155)
Cash and cash equivalents at end of period 259,864 816
The notes numbered 1 to 16 are an integral part of the financial information.
Notes to the Consolidated financial statements
1. Accounting policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Group financial
information.
1.1. Basis of preparation
This consolidated financial information is for the year ended 31 December 2015
and has been prepared in accordance with International Financial Reporting
Standards ("IFRS") adopted for use by the European Union and the Companies Act
2006. These accounting policies and methods of computation are consistent with
those used in prior years.
1.2. Consolidation and goodwill
Pyromex
On 8 August 2013, the Company acquired the remaining 70% interest in Pyromex.
Pyromex is accounted as a wholly owned subsidiary of the Group. The original 30
per cent was held as an investment which had been impaired to nil due to the
uncertainties surrounding the technology.
During the year Pyromex AG has been formally liquidated and as such the balance
sheet values held at 31 December 2014 have been impaired to nil.
1.3. Judgements and estimates
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements. The
areas involving a higher degree of judgements or complexity, or areas where
assumptions or estimates are significant to the financial statements such as
the impairment of assets and going concern are disclosed with the notes
1.4. Foreign currency translation
The financial information is presented in US dollars which is the Group's
functional currency.
1.4.1. Transactions and balances in foreign currency
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Monetary assets
and liabilities denominated in foreign currencies are revalued to the exchange
rate at date of settlement or at reporting dates (as appropriate). Exchange
gains and losses resulting from such revaluations are recognised in the
Statement of Comprehensive Income.
Foreign exchange gains and losses are presented in the income statement within
'administration expenses'.
1.4.2. Consolidation
The results and financial position of Group entities with a different
functional currency to the presentation currency are translated into the
presentation currency as follows:
· Assets and liabilities are translated at the closing rate of 31 December
2015;
· Income and expenses for each income statement are translated at average
exchange rates over the period of consolidation; and
· the resulting exchange differences are recognised in other comprehensive
income.
The principal rates used for translation are: 2015 2015
Closing Average
British Pounds 1.4786 1.5186
1.5. Going concern
The Directors have considered all available information about the future events
when considering going concern. The Directors have reviewed cash flow forecasts
for 12 months following the date of these Financial Statements.
The current cash balance of GBP175,750 is sufficient to ensure the company can
pay its debts as they fall due. A further fundraise has been completed post
year end increasing cash reserves. Based on this, the Directors believe it is
appropriate to continue to adopt the going concern basis of accounting for the
preparation of the annual financial statements.
Additionally Hillgrove, as the holder of Convertible Loan Agreement, confirms
that it will not seek repayment of any amounts due under the Note or
Convertible Loan Agreements until at least 12 months beyond publication of the
Company's 2015 annual accounts.
1.6. Employee costs
The group has no employees (2014: nil).
1.7. Operating Leases
The Group has no operating leases (2014: nil).
1.8. Finance income and expenses
Finance income and expenses are recognised as they are incurred or as a result
of financial assets or liabilities being measured at amortised cost using the
effective interest method. No finance expenses were incurred in the production
of a qualifying asset.
1.9. Income tax expense
The tax expense for the period comprises current and deferred tax.
UK corporation tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Temporary
differences are differences between the company's taxable profits and its
results as stated in the financial statements that arise from the inclusion of
gains and losses in tax assessments in periods different from those in which
they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only to the extent that, on the basis of all available evidence, it can be
regarded as more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying timing differences can be
deducted.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the temporary differences are expected to reverse, based
on tax rates and laws that have been enacted or substantively enacted by the
balance sheet date. Deferred tax is measured on a non-discounted basis.
1.10. Goodwill
Goodwill arose on the acquisition of Pyromex and represents the excess of the
consideration transferred over the fair value of the net identifiable assets,
liabilities and contingent liabilities acquired. Goodwill is stated at cost
less any impairment losses recognised.
1.11. Intangible assets
Intangible assets arose on the acquisition of Pyromex and include trademarks
and intellectual property related to the Pyromex technology. These were
recognised at fair value at the acquisition date and are carried at cost less
accumulated amortisation and impairment. Amortisation is calculated using the
straight-line method to allocate the fair value of the intangible assets over
their estimated useful lives of 3 years. During the year the investment in
Pyromex AG was impaired to a nil carrying value due to the wind down of
operations that commenced after the balance sheet date.
1.12. Property, plant and equipment
Plant, property and equipment are stated at cost less accumulated depreciation.
Cost represents the cost of acquisition or construction, including the direct
cost of financing the acquisition or construction until the asset comes into
use.
Depreciation on plant, property and equipment is provided to allocate the cost
less the residual value by equal instalments over their estimated useful
economic lives of 3 to 7 years.
An item of plant, property and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of the
asset. Any gain or loss is included in the Statement of Comprehensive Income.
1.13. Inventories
Inventories are stated at the lower of cost and net realisable value. The cost
of finished goods and work in progress comprises design costs, raw materials,
direct labour, other direct costs and related production overheads. It excludes
borrowing costs.
1.14. Trade and other receivables
Trade receivables are recognised at fair value. Subsequently they are carried
at their initial recognition value less any impairment losses.
1.15. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
1.16. Deferred taxation
Deferred tax is recognised without discounting, in respect of all timing
differences between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date except as
otherwise required by IAS 12.
A deferred tax asset is recognised where, having regard to all available
evidence, it can be regarded as more likely than not that there will be
suitable taxable profits from which the future reversal of the underlying
timing differences can be deducted.
Deferred income tax is recognised on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in these
financial statements.
Deferred tax assets or liabilities are not recognised if they arise from the
initial recognition of goodwill or from initial recognition of an asset or
liability that at the time of the transaction affects neither accounting nor
taxable profit nor loss. Except, however, where an asset or a liability is
initially recognised from a business combination a deferred tax asset or
liability is recognised as appropriate.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
1.17. Loans
Loans are financial obligations arising from funding received from financiers
and the founding stockholders. These were recognised at fair value, net of any
transaction costs incurred. Loans are subsequently carried at amortised cost
using the effective interest method.
1.18. Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Trade payables and
other payables are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method.
1.19. Share capital and share premium
Proceeds from the issue of common stock or ordinary and deferred shares have
been classified as equity. Costs directly attributable to the issue of these
equity instruments are shown as a deduction, net of tax, from the proceeds.
1.20. Share based payments
The Group has used share-based compensation, whereby the Group receives
services from employees or service providers in exchange for consideration for
options in the share capital or shares of the Group. The fair value of the
services received in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed is determined by reference to the fair
value of the services received, unless that fair value cannot be reliably
measured, in which case the fair value of the of the stock and shares issued is
used.
Non-market performance and service conditions are included in assumptions about
the number of options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied.
1.21. Adoption of new and revised standards
There have been no standards or interpretations that have been adopted that
have affected the amounts reported in these financial statements. As at the
date of approval of the financial information, the following standards and
interpretations were in issue but not yet effective:
IFRS 9 Financial Instruments
IFRS 10 (amended) Consolidated Financial Statements
IFRS 11 (amended) Joint Arrangements
IFRS 12 (amended) Disclosure of Interests in Other Entities
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from Contracts with
Customers
IAS 1 (amended) Presentation of Items of Other
Comprehensive Income
IAS 16 (amended) Property, Plant and Equipment
IAS 19 (revised) Employee Benefits
IAS 27 (amended) Separate Financial Statements
IAS 28 (amended) Investments in Associates and Joint
Ventures
IAS 38 (amended) Intangible assets
In addition, there are certain requirements of Improvements to IFRSs which are
not yet effective.
The Directors are still assessing the impact of the adoption of these standards
on the Group's results but do not anticipate that there will be a material
impact on the Group's results.
2. Administrative expenses
Included in administrative expenses are;
2015 2014
US$ US$
Directors' fees 101,637 160,750
Auditor's remuneration - Company's audit 15,186 16,075
Impairment of Goodwill - 1,874,735
Depreciation and amortisation - 595,159
At 31 December 2015, the Group had no employees (2014: nil).
3. Employee benefits
2015 2014
US$ US$
Wages and salaries - -
Total employee benefits - -
4. Finance expenses
2015 2014
US$ US$
Shareholder loan interest 584,092 409,465
Other loan interest - 121,006
Total finance expenses 584,092 530,471
5. Income tax credit
2015 2014
US$ US$
Current taxation - -
Deferred taxation - -
Total taxation credit - -
The tax charge is lower (2014: lower) than the standard rate of tax.
Differences are explained below.
2015 2014
US $ US $
Current tax
Profit/(Loss) before taxation 479,542 (5,047,975)
Tax (charge)/credit at standard UK corporation tax rate (100,704) 1,060,075
of 21% (2014 - 21%)
Effects of:
Expenses not deductible for tax purposes 349,976 (646,661)
Losses relieved (249,272)
Deferred tax not recognised - (413,414)
Income tax expense - -
6. Proft/(Loss) per share
2015 2014
Profit/(Loss) after taxation-attributable to 703,607 (4,904,980)
owners of the Company (US$)
Weighted average number of shares 285,425,948 285,425,948
Loss per share (US$) <(0.01) <(0.01)
7. Intangible assets
Goodwill Pyromex Licence Total
technology agreements
At 1 January 2014
Cost 4,035,356 2,087,081 990,840 7,113,277
Accumulated amortisation and (4,035,356) (2,087,081) (990,840) (7,113,277)
impairment
Net carrying value - - - -
- - - -
Closing carrying value
At 31 December 2014
Cost 4,035,356 2,087,081 990,840 7,113,277
Accumulated amortisation and (4,035,356) (2,087,081) (990,840) (7,113,277)
impairment
At 1 January 2015 - - - -
Closing carrying value
At 31 December 2015
Cost - - - -
Accumulated amortisation and - - - -
impairment
- - - -
Goodwill was recognised as the excess of the fair value of the consideration
determined in accordance with IFRS 3 accounting for reverse acquisitions over
the fair value of the net liabilities acquired. Following the decision to wind
down the Pyromex operation as discussed in the Directors' Report, the Goodwill
has been impaired to a carrying value of nil.
Licence agreements represented the capitalised licence fees paid by PowerHouse
Energy, Inc. to Pyromex and RenewMe for rights associated with the Pyromex
technology.
8. Property, plant and equipment
Pyromex Office Total
equipment equipment
At 1 January 2014
Cost 662,272 2,888 665,160
Accumulated depreciation (662,272) (433) (662,705)
Opening carrying value - 2,455 2,455
-
- Depreciation - - -
- Pyromex loss of control - - -
- Closing carrying value - 2,455
2,455
At 31 December 2014
Cost - 2,888 2,888
Accumulated depreciation - (433) (433)
Net carrying value - 2,455 2,455
Impairment - (2,455) (2,455)
Foreign exchange fluctuations - - -
At 31 December 2015 - - -
9. Inventories
The Group has no inventories (2014: nil).
10. Trade and other receivables
2015 2014
US$ US$
Other receivables - 34,734
VAT receivable 2,146 9,112
Total trade and other receivables 2,146 43,846
11. Cash and cash equivalents
Cash and cash equivalents consist solely of cash balances in bank accounts.
12. Deferred taxation
Deferred income tax assets are recognised for tax loss carry-forwards to the
extent that the realisation of the related tax benefit through future taxable
profits is probable. The Group did not recognise deferred income tax assets in
respect of losses.
13. Loans
Notes 2015 2014
US$ US$
Shareholder loan 13.1 4,345,067 3,402,366
Total loans 4,345,067 3,402,366
Classified as:
- Current - 3,402,366
- Non-current 4,345,067 -
13.1. Shareholder Loan
Hillgrove Investments Pty Limited ("Hillgrove") has provided the PowerHouse
Energy Group plc with a convertible loan agreement amounting to $4,345,067 -
which can be increased at Hillgrove's option. The loan is secured by a
debenture over the assets of the company, repayable on 8 October 2014 and
carries interest of 15 per cent per annum.
Hillgrove have provided a letter of support indicating they are willing to
increase the loan amount pending any unforeseeable or material changes to the
Group's current circumstances.
14. Trade and other payables
2015 2014
US$ US$
Trade creditors 41,670 1,701,144
RenewMe 229,942 316,721
Other accruals 22,310 49,620
Total trade and other payables 293,922 2,067,485
Trade and other payables are classified as:
- Current 293,922 2,067,485
- Non-current - -
14.1. RenewMe
RenewMe Limited had been granted exclusive rights by Pyromex to use, own,
assemble and install and operate Pyromex systems in territories also licensed
to the Group's subsidiary PowerHouse Energy, Inc. The Group entered into a
settlement agreement with RenewMe whereby the parties agreed to change the
respective exclusive rights pertaining to the Pyromex technology. Under the
original settlement agreement Powerhouse Energy, Inc. had the obligation to pay
five instalments of EUR 200,000 annually beginning 30 June 2011. The Group
guaranteed the obligations under the agreement of PowerHouse Energy, Inc. As
PowerHouse Energy, Inc is unable to meets its obligations, all remaining
amounts (EUR 800,000) due under the original settlement agreement have been
recognised as a liability.
On 3 March 2014 the Group announced that a settlement had been reached with
RenewMe to release its claimed geographical licenses to use our technology
under a disputed royalty agreement with Pyromex and other claims against the
company in return for EUR211,000 and the issue of 18,331,996 new Ordinary Shares
in the Group. While the equity portion of that settlement has been satisfied,
the cash payment has not been settled and the agreement has not been completed
at the year end.
On 29 April 2016 the Company announced that a full and final settlement had
been reached with Renewme to settle the remaining balance in exchange for the
issue of 90,932,961 new Ordinary shares. This will release the Company from any
and all previously disputed issues with Renewme. Upon issue of these shares
Renewme will own 15.96% of the share capital.
.
Capital commitments not accrued for at the year end amounted to GBP100,000 (2014:
GBP100,000) and related to plant and machinery that had not yet been received.
15. Seasonality
The Group's business is not subject to any consistent seasonal fluctuations.
16. Directors' Remuneration and share interests
The Directors who held office at 31 December 2015 had the following interests,
including any interests of a connected person in the ordinary shares of the
Company:
Number of Percentage of
ordinary voting rights
shares of 1.0p
each
Nigel Brent Fitzpatrick 103,459 <0.1
The remuneration of the Directors of the Company paid for the year or since
date of appointment, if later, to 31 December 2015 is:
2015 2015 2015 2015 2014
$ $ $ $ $
Salary/Fee Pension Benefits Total Total
Nigel Brent Fitzpatrick - - - - -
James John Pryn - - - - -
Greenstreet
Robert Keith Allaun 161,000 - - 161,000 161,000
Service contracts
Brent Fitzpatrick and James Greenstreet have service contracts which can be
terminated by providing three months' written notice.
END
(END) Dow Jones Newswires
June 30, 2016 02:00 ET (06:00 GMT)
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