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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Alternative E. | LSE:ALR | London | Ordinary Share | SG9999004659 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0125 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMALR
RNS Number : 5689Z
Alternative Energy Limited
12 December 2014
12 December 2014
ALTERNATIVE ENERGY LIMITED
("Alternative Energy" or "the Company")
Final Results and Report and Accounts
The Company today announces that it has published the Report and Accounts for the year ended 31 December 2013 ("the Accounts"), and they are being posted to shareholders today. The Accounts will shortly be available on the Company website, www.alternativeenergy.com.sg and extracts are set out below:
Chairman's Statement
The financial statements presented in this review follow the delayed interim results to 30 June 2013, and reflect the period of turmoil through which the Company was passing at the end of 2013. Their publication has been considerably delayed as the Company and its advisers have been seeking to reflect in the financial statements the effect of the delays and uncertainties of the plans which it announced in 2012 on the Company's business and assets - and in particular on the valuation of its Intellectual property.
The Board naturally regrets the delay in publishing the Annual Results to 31 December 2013 and the Interim Results to 30 June 2014. Our approach has been to model the anticipated cashflows to arrive at an impairment in our December 2013 Accounts of US$ 11.57 million (in addition to the US$1.43 million amortisation principally of our US patents). The resultant carrying value is also carried forward into the Interim Results to 30 June 2014 less an additional amortisation of US$0.72 million. However, due to the lack of sales and demonstrable sales orders and in our view the impracticality and lack of meaningfulness of commissioning a third party valuation report, we have not been able to satisfy our auditors that there is sufficient back-up for the ongoing carrying value of our intellectual property. The Financial Statements are therefore qualified solely as to the uncertainty of this issue.
During this period the Company was wrestling with the delays in its anticipated Indonesian business arrangements with MUP, which had engaged the majority of the Company's resources in 2013. The Company's shares were suspended from trading between October 2013 and April 2014 pending release of the Company's interim results which required resolution of the Company's future by the Board. Revenues anticipated from the Indonesian contracts signed by the Company totally failed to materialise as our partner, MUP, was unable to obtain the expected off take agreements with the Indonesian energy monopoly, PLN, in respect of the projects surveyed by our team. This required the Company to refocus its business, but this in turn has been hampered by the suspension of the Company's shares and the delays and frustrations in finalising its financial statements.
Clearly many lessons have been learned and many shortcomings, both internal and external are being addressed. First, the Company is currently considering what action to take in respect of its arrangements with MUP, which have cost the Company both time and money. Steps will be taken to see how this can be made up. Secondly, the Company is changing its business focus and direction to ensure that it does not depend on one jurisdiction and that it develops sales of goods which are ready for market and for which there is an established need, such as LED street lights, whilst also seeking revenue generating projects for its next generation solar technologies. Thirdly, the Company will be seeking profitable and revenue generating businesses which it can acquire to augment the organic growth of revenues from its own products, which has been disappointingly slow. Finally the Company will be carrying out a total review of both internal and external auditing teams to ensure that it does not face a situation in the future where its shares are suspended as a result of late filing of accounts.
In respect of the financial statements themselves, apart from the lack of revenue and losses associated with the delay of the Indonesian business, the major issue has been a significant impairment of the Company's intellectual property portfolio. Whilst it is recognized that the Company's eRoof technologies, on which the Company has spent significant sums by way of patent protection, and which is currently the subject of several patents, still have a significant value as next generation solar technology, there has been some difficulty in assessing the precise value of this as it is based on future projected earnings. Whilst the Company has several potential projects and orders in view, the Company needs to be cautious in its valuation until revenues are actually generated. As a result the Company has impaired its intellectual property significantly, despite the fact that it has been increasing the number of granted patents, and this impaired valuation could go up or further down depending on the realisation of revenues based on its technologies. Whilst the board and I believe that the time has now come for eRoof technologies to be commercially exploited as a realistic alternative roofing material in place of the current system of solar panels, we have acceded to the auditors caution in respect of our intellectual property valuation and therefore taken the resulting impairment into the December 2013 accounts.
As can be seen the combination of the delay of the planned Indonesian business and impairment of our intellectual property portfolio has put the Company under considerable pressure, and measures have had to be taken to ensure the Company's continued survival until we have had a chance to grow new revenue streams. In this respect it was announced in March (and revised in May), that the Company entered into a GBP 10 million convertible note program to provide it with working capital as it builds its revenues. To date, the Company has drawn 10 sub-tranches of this facility, representing GBP 250,000 of which 5 sub-tranches have been converted into shares. It is this facility, together with such support as I have been able to bring to the Company which has enabled the Company to survive. The Company anticipates continuing to draw on this facility but hopes to reduce drawings as greater operational revenues are generated. In addition I am continuing to support the Company with my convertible loan agreement in respect of which approximately 4 million US dollars has been drawn and which has been extended by one year from its original expiry date of October 2014. Although a further circa US$3 million remains to be drawn under the Convertible Loan, the Chairman has indicated that his ability to allow the Company to draw further funds under this Convertible Loan will depend upon the circumstances and the realisation by him of further cash from his own sources.
The existence of our ELN program has enabled us to work with our lawyers (who are our principal creditors apart from LDK Solar and myself) to establish a program to address outstanding fees. In the case of LDK, which is still owed a large amount by one of our operating subsidiaries, we are also discussing a means of regulating our arrangements and may have a further announcement in this regard shortly.
Whilst a large part of the team's energies have been expended over the past four months on the process of publishing the delayed accounts, operationally the Group has refocused its activities so as not to be so reliant on any one market. Orders are beginning to arrive from our Indonesian distributors but management is now active on a much broader geographical front. With the financial statements published and the resumption of the trading of the Company's shares, the team will be pressing to complete the arrangements currently being negotiated in several new jurisdictions, including the UK, and we hope to make announcements of our progress following resumption of trading of the Company's shares. The Company is also actively exploring whether revenues can also be accelerated by acquisition as well as organic growth.
Notwithstanding the very difficult period through which we have just come, for the first time in the Company's history the Company has viable products, both solar and lighting, for which there is a demand. Whilst the market remains very competitive, by focus and innovation the Company hopes to earn itself a place in the global green energy market.
It is now for the Company to push hard on the marketing of the products it has started to sell. The benefit of the platform we have established is that it is quickly scalable with little further major capital spend required. Once the Company is able consistently to sell three containers of street lights per month the Board believes that these sales levels will underpin the valuation of the Company and justify its years of research and development.
In respect of product development and research I have little to add to my last statement, issued in March, but it is encouraging to see that buyers are beginning to appreciate the advantages of our technologies, whilst we continue to work with suppliers and partners such as LDK Solar to bring down costs and make our products more competitive.
We are also continuing to explore ways to grow the Company strategically as well as by operational growth while watching the Company's costs in order to ensure that there is no waste in the Group.
We are also happy to report that we have now appointed Beaufort Securities Limited as the Company's joint Broker (alongside Beaumont Cornish our existing Nominated Adviser and joint Broker) to help the Company in building a new profile in London.
The next few months will be a critical period for the Company in order to survive and move forward, but with the commencement of sales of products which have succeeded in the face of international competition in a very competitive market, we finally have something concrete to promote.
For further information, please contact: Dr Eric Goh, Alternative Energy Tel: +65 6873 7782 Limited Richard Lascelles, Alternative Tel: +44 (0) 20 7408 1067 Energy Limited Roland Cornish / Emily Staples, Tel: +44 (0) 20 7628 3396 Beaumont Cornish Limited
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
ALTERNATIVE ENERGY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Alternative Energy Limited (the "Company") and its subsidiaries (the "Group") which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2013, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group and statement of changes in equity of the Company for the financial year ended 31 December 2013, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the "Act") and International Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion on financial statements
As at 31 December 2013, included in the consolidated statement of financial position of the Group are intangible assets of US$16,661,676 and included in the statement of financial position of the Company are intangible assets, investments in subsidiaries and amount due from subsidiaries of US$15,995,872, US$4,848,072, and US$5,634,205 respectively. For the financial year ended 31 December 2013, an impairment loss on intangible assets of US$11,570,000 is charged to the Group's consolidated statement of comprehensive income and the Company's statement of comprehensive income. No provision for impairment has been made for the investments in subsidiaries and amount due from subsidiaries included in the Company's statement of financial position as at 31 December 2013. For the purpose of assessing impairment of the Group's and the Company's intangible assets, investments in subsidiaries and amount due from subsidiaries, the management has prepared a discounted cash flow to determine the value in use of these assets based on the discounted cash flow method as disclosed in Note 11 to the financial statements. Management have prepared the discounted cash flow based on various assumptions including the ability to secure various significant projects which are in preliminary stage of discussion.
We are unable to obtain sufficient appropriate audit evidence regarding the reasonableness and appropriateness of these assumptions made (including the estimated amount of cash inflows that would be generated from certain significant projects) in the discounted cash flow. Consequently, we are unable to determine whether any adjustments to these amounts were necessary and whether the asset values referred to above are therefore supportable.
Qualified Opinion on financial statements
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the consolidated financial statements of the Group, the statement of financial position of the Company and the statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013 and the results, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year ended on that date.
Emphasis of Matter - Material Uncertainty Regarding Continuation as a Going Concern
We draw attention to Note 2.3 to the financial statements which indicates that the Group incurred a net loss of US$15,796,219 during the financial year ended 31 December 2013 and, as of that date, the Group's and the Company's current liabilities exceeded their current assets by US$7,675,560 and US$6,275,377 respectively. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Group's and the Company's ability to continue as a going concern. Our audit opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditor have been properly kept in accordance with the provisions of the Act.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
5 December 2014
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December Notes 2013 2012 US$ US$ Revenue 4 12,736 12,324,954 Cost of sales (9,257) (12,575,636) Gross profit/(loss) 3,479 (250,682) Other income 3,507 10,869 Administrative expenses (881,717) (1,686,457) Other expenses (14,765,267) (3,326,528) Finance expense (156,221) - Share of loss from equity-accounted joint venture 10 - (118,675) Loss before income tax 5 (15,796,219) (5,371,473) Income tax 6 - - Loss for the financial year/period (15,796,219) (5,371,473) ------------ ------------ Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operation - (15) Other comprehensive income for the financial year/period, net of tax (15,796,219) (15) ------------ ------------ Total comprehensive loss for the financial year/period (15,796,219) (5,371,488) ============ ============ Loss per share (cents per share) Basic and diluted loss per share 7 (0.75) (0.33) ============ ============
The accompanying notes form an integral part of these financial statements.
STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2013
Group Company Note 2013 2012 2013 2012 US$ US$ US$ US$ ASSETS Non-current assets Plant and equipment 8 460 2,565 - 157 Investments in subsidiaries 9 - - 4,848,072 4,848,072 Investment in joint venture 10 - - - - Intangible assets 11 16,661,676 29,215,697 15,995,872 28,311,631 Other receivables 12 - - 5,634,205 3,894,859 16,662,136 29,218,262 26,478,149 37,054,719 ------------ ------------ ------------ ----------- Current assets Trade and other receivables 12 2,188,224 3,146,340 44,259 571,370 Cash and cash equivalents 13 1,850 14,942 566 600 2,190,074 3,161,282 44,825 571,970 ------------ ------------ ------------ ----------- Total assets 18,852,210 32,379,544 26,522,974 37,626,689 ============ ============ ============ =========== EQUITY AND LIABILITIES Capital and reserves Issued capital 14 39,738,311 37,472,123 39,738,311 37,472,123 Treasury shares 15 (56,400) (56,400) (56,400) (56,400) Share options reserve 16 1,480,000 1,480,000 1,480,000 1,480,000 Convertible loans reserve 17 252,794 252,794 252,794 252,794 Accumulated losses (32,428,129) (16,631,910) (21,211,933) (7,607,448) Foreign currency translation reserve 17 - - - - 8,986,576 22,516,607 20,202,772 31,541,069 ------------ ------------ ------------ ----------- Current liabilities Trade and other payables 18 5,926,156 6,148,986 2,413,677 2,405,304 Convertible loans 19 3,906,525 3,680,316 3,906,525 3,680,316 Provisions 20 32,953 33,635 - - 9,865,634 9,862,937 6,320,202 6,085,620 Total equity and liabilities 18,852,210 32,379,544 26,522,974 37,626,689 ============ ============ ============ ===========
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Equity attributable to owners of the parent Share Convertible Issued Treasury options loans Accumulated 2013 capital shares reserve reserve losses Total Group US$ US$ US$ US$ US$ US$ (Note 14) (Note 15) (Note 16) (Note 17) Balance at 1 January 2013 37,472,123 (56,400) 1,480,000 252,794 (16,631,910) 22,516,607 Loss for the year, representing total comprehensive loss for the financial year - - - - (15,796,219) (15,796,219) Shares issued during the financial year 2,266,188 - - - - 2,266,188 Balance at 31 December 2013 39,738,311 (56,400) 1,480,000 252,794 (32,428,129) 8,986,576 ========== ========= ========= =========== ============ ============
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Equity attributable to owners of the parent Foreign Share Convertible currency Issued Capital Treasury options loans Accumulated translation 2012 capital reserve shares reserve reserve losses reserve Total Group US$ US$ US$ US$ US$ US$ US$ US$ (Note 14) (Note 14) (Note 15) (Note 16) (Note 17) Balance at 1 September 2011 19,400,355 3,505,104 (56,400) 981,260 201,162 (11,260,437) 15 12,771,059 Total comprehensive loss for the financial period: ----------------- ---------- ----------- --------- --------- ----------- ------------ ------------ ----------- Loss for the financial period - - - - - (5,371,473) - (5,371,473) Other comprehensive loss: Exchange differences on translating foreign joint venture - - - - - - (15) (15) ----------------- ---------- ----------- --------- --------- ----------- ------------ ------------ ----------- Total comprehensive loss for the financial period - - - - - (5,371,473) (15) (5,371,488) Shares issued during the financial period 18,071,768 (3,505,104) - - - - - 14,566,664 Equity-settled share options granted to employees - - - 498,740 - - - 498,740 Reserve attributable to equity components of convertible loans - - - - 51,632 - - 51,632 Balance at 31 December 2012 37,472,123 - (56,400) 1,480,000 252,794 (16,631,910) - 22,516,607 ========== =========== ========= ========= =========== ============ ============ ===========
The accompanying notes form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Share Convertible Issued Treasury Options loans Accumulated 2013 capital shares reserve reserve losses Total Company US$ US$ US$ US$ US$ US$ (Note 14) (Note 15) (Note 16) (Note 17) Balance at 1 January 2013 37,472,123 (56,400) 1,480,000 252,794 (7,607,448) 31,541,069 Total comprehensive loss for the financial year - - - - (13,604,485) (13,604,485) Shares issued during the financial year 2,266,188 - - - - 2,266,188 Balance at 31 December 2013 39,738,311 (56,400) 1,480,000 252,794 (21,211,933) 20,202,772 ========== ========= ========= =========== ============ ============
The accompanying notes form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Share Convertible Issued Capital Treasury Options loans Accumulated 2012 capital reserve shares reserve reserve losses Total Company US$ US$ US$ US$ US$ US$ US$ (Note 14) (Note 14) (Note 15) (Note 16) (Note 17) Balance at 1 September 2011 19,400,355 3,505,104 (56,400) 981,260 201,162 (4,823,060) 19,208,421 Total comprehensive loss for the financial period - - - - - (2,784,388) (2,784,388) Shares issued during the financial period 18,071,768 (3,505,104) - - - - 14,566,664 Equity-settled share options granted to employees - - - 498,740 - - 498,740 Reserve attributable to equity components of convertible loans - - - - 51,632 - 51,632 Balance at 31 December 2012 37,472,123 - (56,400) 1,480,000 252,794 (7,607,448) 31,541,069 ========== =========== ========= ========= =========== =========== ===========
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Operating activities Loss before income tax (15,796,219) (5,371,473) Adjustments for: Depreciation of plant and equipment (Note 8) 2,105 22,730 Impairment loss on intangible assets (Note 11) 11,570,000 - Gain on disposal of plant and equipment (81) (77) Amortisation of intangible assets (Note 11) 1,430,398 7,071 Allowance for doubtful debts (Note 12) 172,249 - Reversal for unutilised leave (Note 20) (682) (38,305) Share options expense (Note 5) - 498,740 Interest income - (346) Interest expense (Note 5) 156,221 - Share of loss from equity-accounted joint venture (Note 10) - 118,675 ------------ ------------ Operating cash flows before movements in working capital (2,466,009) (4,762,985) Trade and other receivables 785,867 (2,553,118) Trade and other payables (379,051) 5,454,459 ------------ ------------ Net cash used in operating activities (2,059,193) (1,861,644) ------------ ------------ Investing activities Interest received - 346 Proceeds from disposal of plant and equipment 81 77 Decrease in fixed deposits pledged 14,204 85,058 Additions of intangible assets (Note 11) (446,377) (58,286) ------------ ------------ Net cash (used in)/ from investing activities (432,092) 27,195 ------------ ------------ Financing activities Proceeds from convertible loans 477,815 1,254,482 Repayment of convertible loans (251,606) (244,897) Net proceeds from issue of shares 2,266,188 - Net cash from financing activities 2,492,397 1,009,585 ------------ ------------ Net increase/(decrease) in cash and cash equivalents 1,112 (824,864) Cash and cash equivalents at beginning of financial year/period 738 825,602 Cash and cash equivalents at end of financial year/period (Note 13) 1,850 738 ============ ============
The accompanying notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1. General corporate information
Alternative Energy Limited (the "Company") (Registration Number 200619290H) is incorporated and domiciled in Singapore with its principal place of business and registered office at 1 Science Park Road, #02-09, The Capricorn, Singapore Science Park II, Singapore 117528.
On 12 October 2007, the Company was successfully admitted to the AIM, a market operated by the London Stock Exchange Plc in the United Kingdom.
The principal activity of the Company is the provision of technology, hardware and equipment for renewable energy and green energy solutions. It also makes investments and/or acquisitions in and to develop energy technologies, businesses and companies which offer an alternative to conventional fossil fuel and nuclear methods of generating household and industrial energy, as well as providing management services (including marketing and other necessary services) to its subsidiaries.
The principal activities of the subsidiaries are set out in Note 9 to the financial statements.
The controlling shareholder of the Company is Christopher Nightingale.
The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company for the financial year ended 31 December 2013 were authorised for issue by the Board of Directors on 5 December 2014.
2. Summary of significant accounting policies 2.1 Statement of compliance
The financial statements have been prepared in accordance with the provisions of the Singapore Companies Act, Chapter 50 and the International Financial Reporting Standards (IFRS), IFRS Interpretations Committee (collectively IFRSs) issued by the International Accounting Standards Board (IASB).
2.2 Basis of preparation
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.
These financial statements have been prepared on historical cost basis except as disclosed in the accounting policies below.
The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are presented in United States dollar ("US$") which is the functional currency of the Company and the presentation currency for the consolidated financial statements.
2.2 Basis of preparation (Continued)
The preparation of financial statements in compliance with IFRS requires management to make judgements, estimates and assumptions that affect the Group's application of accounting policies and reported amounts of assets, liabilities, revenue and expenses. Although these estimates are based on management's best knowledge of current events and actions, actual results may differ from those estimates. The areas where such judgements or estimates have the most significant effect on the financial statements are disclosed in Note 3.
In the current financial year, the Group has adopted all the new and revised IFRSs that are relevant to its operations and effective for the current financial year. The adoption of these new/revised IFRSs did not result in changes to the Group's accounting policies and had no material effect on the amounts reported for the current or prior years, except as detailed below.
Amendments to IAS 1 Presentation of Items of Other Comprehensive Income
The amendments to IAS 1 require that items presented in other comprehensive income must be grouped separately into those that may be reclassified subsequently to profit or loss and those that will never be reclassified. As the amendments only affect the presentation of items recognised in other comprehensive income, there is no impact on the Group's financial position or financial performance on initial adoption of this standard on 1 January 2013.
IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements
IFRS 10 replaces the control assessment criteria and consolidation requirements currently in IAS 27 and INT FRS 12 Consolidation - Special Purpose Entities.
IFRS 10 introduces a single new control model, as the basis for determining which entities are consolidated in the Group's financial statements. Under IFRS 10 control exists when the Group has:
- Power over an investee; - Exposure, or rights, to variable returns from the investee; and
- The ability to use its power over an investee to affect the Group's returns from the investee.
IAS 27 remains as a standard applicable only to separate financial statements.
The Group has applied IFRS 10 retrospectively, in accordance with the transitional provisions of IFRS 10 and changed its accounting policy for determining whether it has control over an entity and whether it is required to consolidate that interest. The adoption of IFRS 10 has not resulted in any changes to the control conclusions reached by the Group in respect of its involvement with other entities as at 1 January 2013.
IFRS 11 Joint Arrangements and IAS 28 Investments in Associate and Joint Ventures
IFRS 11 classifies a joint arrangement as either a joint operation or a joint venture based on the parties' rights and obligations under the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets.
The joint venture should use equity method under the revised IAS 28 Investments in Associate and Joint Ventures to account for the joint venture. The option to use the proportionate consolidation method has been removed.
The application of the IFRS 11 did not have any significant impact to the financial statements as the Group has used equity method to account for its investment in its joint venture.
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 prescribes comprehensive disclosure requirements for all types of interests in other entities. It requires an entity to disclose information that helps users to assess the nature and financial effects of relationships with subsidiaries, associates, joint arrangements and unconsolidated structured entities. As the new standard affects only disclosure, there is no effect on the Group's financial position or performance of the Group.
IFRS 13 Fair Value Measurement
IFRS 13 provides a single source of guidance on fair value measurement and fair value disclosure requirements when fair value measurement and/or disclosure is required by other IFRSs. It also provides a common fair value definition and hierarchy applicable to the fair value measurement of assets, liabilities, and an entity's own equity instruments within its scope.
IFRS 13 did not materially affect any fair value measurements of the Group's assets or liabilities, with changes being limited to presentation and disclosure, and therefore has no effect on the Group's financial position or performance.
IAS 36 (Amendments) - Recoverable Amount Disclosure for Non-financial Assets
The consequential amendments of IFRS 13 include amendments to IAS 36 that require the disclosure of information about the recoverable amount of any CGU for which the carrying amount of intangible assets with an indefinite useful life is significant compared to the total carrying amount of intangible assets with an indefinite useful life. As this was an unintended consequence, Amendments to IAS 36, effective for annual periods beginning on or after 1 January 2014, was issued to remove this requirement and instead require disclosure about recoverable amount only when there is a significant impairment or reversal of an impairment, as well as additional disclosure when recoverable amount is based on fair value less costs of disposal.
The Group has early adopted the amendments to IAS 36 from 1 January 2013, and reflected the relevant amended disclosure requirements in these financial statements. There is no impact on the Group's financial position or financial performance.
New or amended IFRSs that have been issued but are not yet effective
The following new or amended IFRSs, which are potentially relevant to the Group's financial statements, have been issued, but are not yet effective and have not been early adopted by the Group:
IFRS 9 Financial Instruments IFRS 11 Joint Arrangements Employee Benefits: Defined Benefit Plans: IAS 19 (Amendments) Employee Contributions(2) Offsetting Financial Assets and Financial IAS 32 (Amendments) Liabilities(1) Improvements to IFRSs Annual Improvements 2010-2012 Cycle(2) Improvements to IFRSs Annual Improvements 2011-2013 Cycle(3) (1) Effective for annual periods beginning on or after 1 January 2014 (2) Effective for annual periods beginning on or after 1 July 2014 (3) Effective for annual periods beginning, or transactions occurring on or after 1 July 2014
The Group and the Company expect that the adoption of the above IFRS and amendment to IFRS, if applicable, will have no material impact on the financial statements in the periods of initial adoption, except as described below:
IFRS 9 - Financial Instruments
Under IFRS 9, financial assets are classified into financial assets measured at fair value or at amortised cost depending on the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Fair value gains or losses will be recognised in profit or loss except for those non-trade equity investments, which entity will have a choice to recognise the gains and lossess in the other comprehensive income. IFRS 9 carries forward the recognition, classification and measurement requirements for financial liabilities from IAS 39, except for financial liabilities that are designated at fair value through profit or loss, where the amount of change in fair value attributable to change in credit risk of that liability is recognised in other comprehensive income unless that would create or enlarge an accounting mismatch. In addition, IFRS 9 retains the requirements in IAS 39 for derecognition of financial assets and financial liabilities. The Group is yet to assess IFRS 9's full impact. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
This standard is effective for accounting periods beginning on or after 1 January 2014. The amendment has clarified and expanded the application guidance in relation to the offsetting of financial assets and financial liabilities in respect of (1) the meaning of 'currently has a legally enforceable right of set-off'; (2) the application of simultaneous realisation and settlement; (3) the offsetting of collateral amounts and (4) the unit of account for applying the offsetting requirements. When this amendment is first adopted for 1 January 2014 year end, there will be no material impact is anticipated in respect of the accounting treatment for offsetting the Group's financial assets and financial liabilities.
2.3 Going concern
The Group incurred a net loss of US$15,796,219 for the financial year ended 31 December 2013 and as of that date, the Group's and the Company's current's liabilities exceeded its current assets by US$7,675,560 and US$6,275,377 respectively. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Group's and the Company's ability to continue as a going concern.
In order to ensure that the Group and the Company remains a going concern, the Group and the Company have taken the following steps in order to strengthen their working capital position:
i) The Chairman has indicated his ongoing financial support for the Group and Company to ensure that the Group and the Company can continue their operation and meet their liabilities as and when they fall due. The continuing Convertible loan facility from the Chairman, Christopher Nightingale of up to US$7 million of which US$3.91 million has now been drawn. Although a further US$3.09 million remains to be drawn under the Convertible Loan, the Chairman has indicated that his ability to allow the Company to draw further funds under this Convertible Loan will depend upon the circumstances and the realisation by him of further cash from his own sources. On 26 June 2014, the Chairman agreed to extend the Convertible Loan (Note 19) until 31 October 2015.
ii) The Group has entered into a GBP10,000,000 5% Equity Linked Note Program ("ELN") with Advance Capital Partners Pte Ltd ("ACP"). The gradual drawing down by the Company of the GBP10 million Equity Linked Note facility which is providing the Company on a rolling basis with the operational working capital it will need in order to roll out its products. To date the Company has drawn GBP250,000 of this facility since its execution in April, representing 10 sub-tranches, of which 5 sub-tranches have been the subject of a conversion notice. The Company is required to comply with certain conditions in respect of the ELN Program and certain conditions have been breached due to the suspension of shares trading. Management has obtained written confirmation from ACP that it will continue to provide financing to the Company and waived all conditions included in the agreement that could result in the termination of the agreement until 31 December 2015. Over the past couple of years a major challenge for the Company has been the amount of management time which has had to be devoted to fundraising away from the core business of rolling out and marketing the Company's products.
iii) The completion of the issue of a further 50 million shares for cash which raised the sum of US$250,000.
iv) The Group is in discussions with several parties with a view to such potentially taking a significant stake in the Company.
v) The Group has renegotiated with certain of its major creditors to revise the repayment schedule. Management is in discussions with certain creditors to settle certain portions of the liabilities with shares in the Company.
vi) On the operational side, the Company has continued to develop its business in various jurisdictions. The Company is currently in discussions with new partners in the Ukraine, Democratic Republic of Congo, UK, Morocco and Cote D'Ivoire which support the Board's view of potential business for 2015.
vii) Whilst it is expected that any 2014 revenues will be anchored by the street lighting contracts, the Company is currently in discussions with other potential buyers of the Groups products in Africa, the Bahamas, the Philippines and the Middle East which may lead to additional contracts for the Group's products. These potential contracts are not incorporated in the projections prepared by the Group but can be followed up once the Group has secured regular revenues from its existing projects.
viii) The overall business market relating to both the Group's solar products and streetlights are now maturing and stabilizing after a time of considerable turmoil. In the Director's opinion, AEL's technologies are still ahead of the general panel market which make up 90% of the current solar industry and if the Group can get these deployed it will be able to demonstrate the superiority of this technology over existing variants. The mature market means that buyers and institutions now clearly recognize the role and advantages of solar power and LED lights and no longer need to be educated on the intrinsic merits. The issue now becomes one of cost and delivery, in respect of which the Board is expecting the Group's assembly plants to make the Company more competitive.
Given the accumulation of the above, the Group is actively trading and is seeking to achieve revenue growth during the 2015 financial year, and the Board believes the Company will have adequate working capital for its requirements for the foreseeable future, on the basis that the Company's shares resume trading in the near future and permit the continued draw down of the ELN facility.
Hence the management is of the view that the going concern assumption remains valid for the Group.
If the Group and the Company are unable to continue in operational existence for the foreseeable future, the Group and the Company may be unable to discharge their liabilities in the normal course of business and adjustments may have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the statements of financial position. In addition, the Group and the Company may have to reclassify non-current assets. No such adjustments have been made to these financial statements.
2.4 Basis of consolidation
Where the company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the company considers all relevant facts and circumstances, including:
- The size of the Company's voting rights relative to both the size and dispersion of other parties who hold voting rights.
- Substantive potential voting rights held by the company and other parties
- Other contractual arrangements
- Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identified assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.
Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
When the Group losses control of a subsidiary it derecognises the assets and liabilities of the subsidiary. The profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary.
Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.
In the separate financial statements of the Company, investments in subsidiaries and joint venture are carried at cost, less any impairment losses that has been recognised in profit or loss.
2.5 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is presented net of estimated customer returns, rebates, other similar allowances and sales related taxes.
Sale of goods
Revenue from the sale of solar panels and light bulbs is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods and it is probable that the agreed consideration will be received. Normally these criteria are considered to be met when the goods are delivered to and accepted by the buyer.
2.6 Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit reported as profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group's liabilities for current tax is recognised at the amount expected to be paid or recoverable from tax authorities and is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and subsidiaries operate by the end of the financial year.
Current income taxes are recognised in profit or loss, except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.
Deferred tax
Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each financial year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the financial year.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the group expects to recover or settle its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax is recognised in profit or loss, except when it relates to items recognised outside profit or loss, in which case the tax is also recognised either in other comprehensive income or directly in equity.
Sales tax
Revenue, expenses and assets are recognised net of the amount of sales tax except:
-- when the sales tax that is incurred on purchase of assets or services in not recoverable from the tax authorities, in which case the sales tax is recognised as part of cost of acquisition of the asset or as part of the expense item as applicable; and
-- receivables and payables that are stated with the amount of sales tax included. 2.7 Employee benefits
Retirement benefit costs
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group's obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated undiscounted liability for annual leave expected to be settled wholly within 12 months from the reporting date as a result of services rendered by employees up to the end of the financial year.
Share-based payments
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period with a corresponding credit to the share-based payment reserve, based on the Group's estimate of the number of equity instruments that will eventually vest and adjusted for the effect of non market-based vesting conditions. At each balance sheet, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in the profit or loss, with a corresponding adjustment to the share option reserve over the remaining period.
Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
The proceeds received, net of any directly attributable transaction costs are credited to issued capital when the options are exercised.
2.8 Share based payment policy on shares to subsidiaries employees
The grant by the Company of its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.
2.9 Foreign currency transactions and translation
In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each financial year/period, monetary items denominated in foreign currencies are retranslated at the rates prevailing as of the end of the financial year/period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including comparatives) are expressed in United States dollars using exchange rates prevailing at the end of the financial year/period. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised initially in other comprehensive income and accumulated in the Group's foreign exchange translation reserve.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign currency translation reserve.
On disposal of a foreign operation, the accumulated foreign exchange translation reserve relating to that operation is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
2.10 Operating leases
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
2.11 Joint arrangements
The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control over the relevant activities of the arrangement to the group and at least one other party. Joint control is assessed under the same principles as control over subsidiaries.
The Group's investments in joint venture is accounted for using the equity method. Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted to recognise changes in the Group's share of net assets of the joint venture since the acquisition date.
The statement of profit or loss reflects the Group's share of the results of operations of the joint venture. Any change in other comprehensive income of those investees is presented as part of the Group's other comprehensive income. When the group's share of losses in a joint venture equals or exceeds its interests in the joint ventures, the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent of the group's interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
When the Group's share of losses exceeds its interest in the joint venture, the Group's interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the investee. For this purpose, the Group'slong-term interests in substance form part of the Group's net investment in the joint venture.
2.12 Intangible assets
(i) Goodwill
Goodwill arising on acquisition of a subsidiary represents the excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired.
Goodwill for a subsidiary is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Goodwill acquired in a business combination is included in intangible assets.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on disposal.
(ii) Patents and trademarks
Patents are initially stated at cost less accumulated amortisation and accumulated impairment losses. Patents with finite useful lives are amortised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each financial year, with the effect of any changes in estimate being accounted for on a prospective basis.
These costs are amortised to profit or loss using the straight-line method over their estimated useful lives of 20 years.
Trademarks with indefinite useful lives are not amortised. At the end of each financial year, the useful lives of such assets are reviewed to determine whether events and circumstances continue to support the indefinite useful life assessment for the asset.
Such assets are tested for impairment in accordance with the accounting policy for impairment stated in Note 2.14 to the financial statements.
(iii) Computer software
Acquired computer software licences are initially capitalised at cost which includes purchase price (net of any discounts and rebates) and other directly attributable costs of preparing the software for its intended use. Direct expenditure, which enhances or extends the performance of computer software beyond its specifications and which can be reliably measured is added to the original cost of the software. Costs associated with maintaining computer software are recognised as an expense as incurred.
Computer software licences are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over their estimated useful lives of 3 years.
(iv) Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised, if, any only if, all the following have been demonstrated:
-- the technical feasibility of completing the intangible asset so that it will be available for use or sale;
-- the intention to complete the intangible asset and use or sell it; -- the ability to use or sell the intangible asset; -- how the intangible asset will generate probable future economic benefits;
-- the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible assets; and
-- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The amortisation period and amortisation method for intangible assets other than goodwill and trademark with indefinite life are reviewed at least at end of each financial year. The effects of any revision are recognised in profit or loss when the changes arise.
2.13 Plant and equipment
All items of plant and equipment are initially recognised at cost. The cost includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Dismantlement, removal or restoration costs are included as part of the cost if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the plant and equipment.
Plant and equipment are subsequently stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged over their estimated useful lives, using the straight-line method, on the following bases:
Office renovation 33%
Computers 33%
Machinery, office equipment, furniture and fittings 33%
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The estimated useful lives, residual values and depreciation methods are reviewed, and adjusted as appropriate, at the end of each financial year.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
2.14 Impairment of non-financial assets excluding goodwill
At the end of each financial year, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
2.15 Financial instruments
Financial assets and financial liabilities are recognised on the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Financial assets are classified into loans and receivables. The classification depends on the nature and purpose for which these financial assets were acquired and is determined at the time of initial recognition.
Loans and receivables
Non-derivative financial assets which have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost, using the effective interest method, less impairment. Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The Group's loans and receivables in the statement of financial position comprise trade and other receivables excluding prepayments, and cash and bank balances.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each financial year. Financial assets are impaired where there is objective evidence that the estimated future cash flows of the investment have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amounts of all financial assets are reduced by the impairment loss directly with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition, any difference between the carrying amount and the sum of proceeds received and amounts previously recognised in other comprehensive income is recognised in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and allocating the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period, to the net carrying amount of the financial instrument. Income and expense are recognised on an effective interest basis for debt instruments other than those financial instruments at fair value through profit or loss.
Classification as debt or equity
Financial liabilities and equity instruments issued by Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. The Group classifies ordinary shares as equity instruments.
When shares recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale issue or cancellation of treasury shares.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital account if the shares are purchased out of capital of the Company, or against the retained deficit of the Company if the shares are purchased out of earnings of the Company.
When treasury shares are subsequently sold or reissued the cost of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or reissue, net of any directly attributable incremental transaction costs and related income tax, is recognised in the capital reserve of the Company.
Financial liabilities
Financial liabilities are classified as other financial liabilities.
Other financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method.
Convertible loan notes
Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability, on an amortised cost basis until extinguished upon conversion or at the instruments maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently re-measured.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount and the consideration paid is recognised in profit or loss.
2.16 Cash and cash equivalents
Cash and bank balances in the statement of financial position comprise cash on hand and demand deposits which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. For the purposes of the statement of cash flows, cash and cash equivalents excludes any pledged deposits.
2.17 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the financial year/period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise.
2.18 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group of executive directors and the chief executive officer who make strategic decisions.
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are described in Note 2, management made judgements, estimates and assumptions about the carrying amounts of assets and liabilities that were not readily apparent from other sources. The estimates and associated assumptions were based on historical experience and other factors that were considered to be reasonable under the circumstances. Actual results may differ from these estimates.
These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
3.1 Critical judgements made in applying the entity's accounting policies
The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the Group's accounting policies and which have the significant effect on the amounts recognised in the financial statements.
(i) Impairment of goodwill, patents and trademarks
The management determines whether goodwill, patents and trademarks are impaired at least on an annual basis and as and when there is an indication that goodwill and patents and trademarks may be impaired. Such assessment and determination require the management to make judgements, on whether there are changes in circumstances or objective evidence indicate the carrying amount may not be recoverable. These judgement are continually evaluated and are based on historical experience and other factors including expectations of future events or changes in circumstances.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial year/period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
(i) Amortisation of patents
The Group amortises the patents, using the straight-line method, over their estimated useful lives after taking into account of their estimated residual values. The estimated useful life reflects management's estimate of the period that the Group intends to derive future economic benefits from the use of the Group's patents.
The residual value reflects management's estimated amount that the Group would currently obtain from the disposal of the asset, after deducting the estimated costs of disposal, as if the asset were already of the age and in the condition expected at the end of its useful life. Changes in the expected level of usage and technological developments could affect the economics, useful lives and the residual values of these assets which could then consequentially impact future amortisation charges. The carrying amounts of the Group's and the Company's patents at 31 December 2013 were $16,061,328 (2012: $28,335,326) and $15,995,872 (2012: $28,311,631) respectively (Note 11).
(ii) Impairment of investments in subsidiaries
At the end of each financial year, an assessment is made on whether there is objective evidence that the investments in subsidiaries are impaired. The management's assessment is based on the estimation of the value-in-use of the cash-generating unit ("CGU") by forecasting the expected future cash flows for a period up to 5 years, using a suitable discount rate in order to calculate the present value of those cash flows. The Company's carrying amount of investments in subsidiaries as at 31 December 2013 was US$4,848,072 (2012: US$4,848,072).
(iii) Impairment of amounts due from subsidiaries and due from a related party
The provision policy for doubtful debts of the Company is based on the ageing analysis and management's ongoing evaluation of the recoverability of the outstanding receivables. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables. If the financial conditions of these subsidiaries were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The carrying amounts of the Group's amounts due from a related party and the Company's amounts due from subsidiaries as at 31 December 2013 are disclosed in Note 12 to the financial statements.
(iv) Convertible loans
The fair values of the liability components of the convertible loans, at their initial recognition, estimated by an independent valuer based on the present value of the contractual stream of cash flows using the average effective interest rate of 5.2% (2012: 6.25%) which generally represents the best estimate of the market value of similar instrument without the conversion feature. The fair values of the equity components are determined as the residual amount by deducting the fair values of the liability components from the fair values of the convertible loans.
(v) Fair value measurement
A number of assets and liabilities included in the Group's financial statements require measurement at, and/or disclosure of, fair value.
The fair value measurement of the Group's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures financial assets and financial liabilities (Note 25) at fair value on recurring basis.
4. Revenue
Revenue represents invoiced value earned from sale of goods to third parties.
5. Loss before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the statement of comprehensive income, the above includes the following charges/(credits):
Group Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Administrative expenses Employee benefits expense: * Salaries and related costs 800,754 1,068,085 * Directors' fee - 40,000 * Contributions to defined contributions plans 42,735 63,232 * Share options expense - 498,740 ============ ============ Other expenses Allowance for doubtful debts (Note 12) 172,249 - Depreciation of plant and equipment (Note 8) 2,105 22,730 Amortisation of intangible assets (Note 11) 1,430,398 7,071 Impairment loss on intangible assets 11,570,000 - Exchange loss 18,126 41,787 Operating lease expense * rental of office premises and equipment 174,351 384,777 Feasibility study expense - 1,000,000 Research expense 42,185 51,202 Professional fees 888,369 837,389 Travelling and accommodation 129,896 222,438 ============ ============ Finance expense Interest expense on convertible loans due to Chairman 156,221 - ============ ============
Employee benefits expense includes key management personnel compensation which is disclosed in Note 22.2 to the financial statements.
6. Income tax
There is no current tax charge for the current financial year as the Group has no chargeable income.
Group Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Reconciliation of effective tax rate Loss before income tax (15,796,219) (5,371,473) ============ ============ Tax calculated at statutory rate of 17% (2012:17%) (2,685,357) (913,150) Effect of different tax rates of overseas operations - 1,668 Expenses not deductible for tax purposes 2,438,414 342,062 Deferred tax assets not recognised 246,943 569,420 - - ============ ============
Deferred tax assets not recognised are related to the following:
2013 2012 US$ US$ Tax losses 2,210,316 1,963,373 Plant and equipment 84,486 84,486 Provision 2,115 2,115 Enhance productivity and innovation credit 279,836 279,836 --------- --------- 2,576,753 2,329,810 ========= =========
Subject to the agreement by relevant tax authorities, at the end of the financial year/period, the Group has unutilised tax losses of approximately US$13,000,000 (2012: US$11,549,000) available for offset against future profits. No deferred tax asset has been recognised due to the unpredictability of profit streams. These losses may be carried indefinitely subject to the conditions imposed by law.
7. Basic and diluted loss per share
Basic loss per share is calculated by dividing the Group's loss attributable to equity holders by the weighted average number of ordinary shares in issue during the financial year.
A total of 263 million (2012: 408 million) issuable shares that could potentially dilute basic earnings per ordinary share in the future were not included in the calculation of diluted earnings per ordinary share because they are anti-dilutive for the years presented.
The basic and diluted loss per share are calculated as follows:
Group Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Loss for the financial year/period attributable to equity holders of the Company (15,796,219) (5,371,473) ============= ============= Weighted average number of ordinary shares 2,115,290,828 1,610,613,978 Basic and dilutive earnings per share (cents per share) (0.75) (0.33) ============= ============= 8. Plant and equipment Machinery, office equipment, Office furniture renovation Computers and fittings Total US$ US$ US$ US$ Group 2013 Cost Balance at 1 January 2013 117,788 60,530 233,143 411,461 Disposals - (1,581) - (1,581) ----------- --------- ------------- ------- Balance at 31 December 2013 117,788 58,949 233,143 409,880 ----------- --------- ------------- ------- Accumulated depreciation Balance at 1 January 2013 117,788 58,996 232,112 408,896 Depreciation (Note 5) - 1,199 906 2,105 Disposals - (1,581) - (1,581) ----------- --------- ------------- ------- Balance at 31 December 2013 117,788 58,614 233,018 409,420 ----------- --------- ------------- ------- Carrying amount At 31 December 2013 - 335 125 460 =========== ========= ============= ======= Machinery, office equipment, Office furniture renovation Computers and fittings Total US$ US$ US$ US$ 2012 Cost Balance at 1 September 2011 117,788 62,026 233,143 412,957 Disposals - (1,496) - (1,496) ----------- --------- ------------- ------- Balance at 31 December 2012 117,788 60,530 233,143 411,461 ----------- --------- ------------- ------- Accumulated depreciation Balance at 1 September 2011 117,788 54,698 215,176 387,662 Depreciation (Note 5) - 5,794 16,936 22,730 Disposals - (1,496) - (1,496) ----------- --------- ------------- ------- Balance at 31 December 2012 117,788 58,996 232,112 408,896 ----------- --------- ------------- ------- Carrying amount At 31 December 2012 - 1,534 1,031 2,565 =========== ========= ============= ======= At 1 September 2011 - 7,328 17,967 25,295 =========== ========= ============= ======= Furniture and fittings Computers Total US$ US$ US$ Company 2013 Cost Balance at 1 January 2013 and 31 December 2013 29,725 7,247 36,972 ------------- --------- ------ Accumulated depreciation Balance at 1 January 2013 29,568 7,247 36,815 Depreciation 157 - 157 ------------- --------- ------ Balance at 31 December 2013 29,725 7,247 36,972 ------------- --------- ------ Carrying amount At 31 December 2013 - - - ============= ========= ====== Furniture and fittings Computers Total US$ US$ US$ Company 2012 Cost Balance at 1 September 2011 and 31 December 2012 29,725 7,247 36,972 ------------- --------- ------ Accumulated depreciation Balance at 1 September 2011 17,160 7,247 24,407 Depreciation 12,408 - 12,408 ------------- --------- ------ Balance at 31 December 2012 29,568 7,247 36,815 ------------- --------- ------ Carrying amount At 31 December 2012 157 - 157 ============= ========= ====== At 1 September 2011 12,565 - 12,565 ============= ========= ====== 9. Investments in subsidiaries Company 2013 2012 US$ US$ Unquoted equity shares, at cost: Beginning of financial year/period 4,848,072 1,118,921 Add: Increase in investment in a subsidiary - 3,500,000 Add: Share option granted to Group's employee - 229,151 --------- --------- End of financial year/period 4,848,072 4,848,072 ========= =========
In prior financial period, the Company has increased the investment in a subsidiary, Renewable Power Pte Ltd ("RPPL") through capitalisation of US$3,500,000 loan to the subsidiary for the purpose of increasing the paid up capital, in response to RPPL's need to participate in sales project that require a high paid-up capital.
The details of the subsidiaries are as follows:
Name of subsidiaries Effective (Country of incorporation/operation) Principal activities equity interest 2013 2012 % % Held by the Company Research and development renewable energies for household Renewable Power Pte Ltd consumers and trading in (Singapore) lighting products 100 100 Alternative Energy Technology Pte Ltd Holding of trademarks and (Singapore) intellectual properties 100 100 Alternative Energy Limited (BVI) Holding of operational subsidiaries (British Virgin Islands) but is currently dormant 100 100 Name of subsidiaries Effective (Country of incorporation/operation) Principal activities equity interest 2013 2012 % % Held by the Company (Continued) Alternative Energy Worldwide Limited Holding of operational subsidiaries (British Virgin Islands) but is currently dormant 100 100 Alternative Energy Holdings Limited Holding of operational subsidiaries (Hong Kong) and trading 100 100 Held by Alternative Energy Limited (BVI) Alternative Energy (Africa) Limited (British Virgin Islands) Dormant 100 100 Alternative Energy (Middle East) Limited (British Virgin Islands) Dormant 100 100 Alternative Energy (Asia) Limited (British Virgin Islands) Dormant 100 100 Alternative Energy(Caribbean) Limited (British Virgin Islands) Dormant 100 100 Alternative Energy (Europe) Limited (British Virgin Islands) Dormant 100 100 10. Investment in joint venture Group 2013 2012 US$ US$ Unquoted equity shares Balance at beginning of financial year/period - 118,690 Share of loss - (118,675) Exchange differences - (15) ---- --------- Balance at end of financial year/period - - ==== =========
The details of the joint venture are as follows:
Name of joint venture Effective (Country of incorporation/operation) Principal activities equity interest 2013 2012 % % Held by Alternative Energy Holdings Limited Manufacture light fittings, street lights The Green Light Company and other lighting (China) equipment 50 50
Summarised financial information in relation to the joint venture is presented below:
Group 2013 2012 US$ US$ As at 31 December Assets and liabilities: Total assets 266,862 226,490 Total liabilities (591,749) (347,470) --------- --------- Net liabilities (324,887) (120,980) --------- --------- Group share of joint venture's net liabilities (162,444) (60,940) ========= ========= Group Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Results Revenue 87,556 95,432 Loss for the year/period (191,062) (343,498) Group's share of joint venture's loss for the year/period - (118,675) ============ ============
The Group has not recognised losses relating to the joint venture as its share of losses exceeded the Group's carrying amount of its investment in the joint venture. The Group's cumulative share of unrecognised losses were US$148,605 (2012: US$53,074) of which US$95,531(2012: US$53,074) was the share of the current year's losses. The Group has no obligation in respect of those losses.
11. Intangible assets Computer Goodwill software Patents Trademarks Total US$ US$ US$ US$ US$ Group 2013 Cost Balance at 1 January 2013 464,726 54,486 28,335,326 415,247 29,269,785 Additions - - 261,276 185,101 446,377 Balance at 31 December 2013 464,726 54,486 28,596,602 600,348 29,716,162 -------- --------- ---------- ------------ ---------- Accumulated amortisation Balance at 1 January 2013 - 54,088 - - 54,088 Amortisation for the year (Note 5) - 398 1,430,000 - 1,430,398 -------- --------- ---------- ------------ ---------- Balance at 31 December 2013 - 54,486 1,430,000 - 1,484,486 -------- --------- ---------- ------------ ---------- Impairment Balance at 1 January 2013 - - - - - Impairment loss recognised during the year (Note 5) 464,726 - 11,105,274 - 11,570,000 -------- --------- ---------- ------------ ---------- Balance at 31 December 2013 464,726 - 11,105,274 - 11,570,000 -------- --------- ---------- ------------ ---------- Carrying amount At 31 December 2013 - - 16,061,328 600,348 16,661,676 ======== ========= ========== ============ ========== 2012 Cost Balance at 1 September 2011 464,726 54,486 14,131,128 394,495 15,044,835 Additions - - 14,204,198 20,752 14,224,950 Balance at 31 December 2012 464,726 54,486 28,335,326 415,247 29,269,785 -------- --------- ---------- ------------ ---------- Accumulated amortisation Balance at 1 September 2011 - 47,017 - - 47,017 Amortisation for the period (Note 5) - 7,071 - - 7,071 -------- --------- ---------- ------------ ---------- Balance at 31 December 2012 - 54,088 - - 54,088 -------- --------- ---------- ------------ ---------- Carrying amount At 31 December 2012 464,726 398 28,335,326 415,247 29,215,697 ======== ========= ========== ============ ========== At 1 September 2011 464,726 7,469 14,131,128 394,495 14,997,818 ======== ========= ========== ============ ========== Total US$ Company 2013 Cost Balance at 1 January 2013 28,311,631 Additions 219,515 Balance at 31 December 2013 28,531,146 ---------------- Impairment and amortisation Balance at 1 January 2013 - Amortisation for the year 1,430,000 Impairment loss recognised during the year 11,105,274 ---------------- Balance at 31 December 2013 12,535,274 ---------------- Carrying amount At 31 December 2013 15,995,872 ================ 2012 Cost Balance at 1 September 2011 14,107,433 Additions 14,204,198 ---------------- Balance at 31 December 2012 28,311,631 ---------------- Carrying amount At 31 December 2012 28,311,631 ================ At 1 September 2011 14,107,433 ================
For the purpose of the consolidated statement of cash flows, the Group's additions to intangible assets in cash during the financial year/period comprise of the following:
Group 2013 2012 US$ US$ Additions to intangible assets 446,377 14,224,950 Non-cash transaction settlement by issuance of new ordinary shares (Note 14) - *(14,166,664) ------- ------------- Purchase of intangible assets by cash payment 446,377 58,286 ======= =============
*This represents a fair value based on the Company's share price as at relevant date.
Impairment testing for intangible assets
During the year, the management carried out a review of the recoverable amount of the intangible assets. The review led to the recognition of an impairment loss of US$11,570,000, which has been recognised in the consolidated statement of comprehensive income. The recoverable amount of the intangible assets is determined on the basis of value in use. The calculation of value in use is based on discounted cash flow method using the financial forecasts approved by the management covering a five-year period. The cash flow projections are estimated based on the management expectation of securing certain key projects over the next five years. The pre-tax discount rate applied to the cash flow projections is 8% (2012: 10%) per annum.
12. Trade and other receivables Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Current Trade receivables 10,058 4,505 - - Other receivables - 56,088 - 56,088 Deposits 77,737 124,758 39,142 86,163 Prepayments 5,117 5,117 5,117 5,117 Amounts due from a related party 2,095,312 2,555,872 - - Amounts due from Chairman - 400,000 - 400,000 Amounts due from a joint venture - non trade 172,249 - - - Amounts due from subsidiaries - - - 24,002 Less: Allowance for doubtful debts * amount due from a joint venture (172,249) - - - --------- --------- --------- --------- 2,188,224 3,146,340 44,259 571,370 Non-current Amount due from subsidiaries - - 5,634,205 3,894,859 --------- --------- --------- --------- Total trade and other receivables 2,188,224 3,146,340 5,678,464 4,466,229 Add: Cash and cash equivalents 1,850 14,942 566 600 Less: Prepayments (5,117) (5,117) (5,117) (5,117) --------- --------- --------- --------- Total loan and receivables 2,184,957 3,156,165 5,673,913 4,461,712 ========= ========= ========= =========
Trade receivables are not past due, non-interest bearing and are generally on 30 days' credit term.
Other receivables, amounts due from subsidiaries (current) and amounts due from a joint venture are not past due, non-interest bearing and are repayable on demand.
Amounts due from a related party are unsecured, non-interest bearing and are repayable on demand. The related party is Real Capital International Limited ("RCI"), which is an investment company controlled by the Chairman. The transaction originated during the execution of a sales project of solar panels trading to a European customer. RCI was used as the recipient company for the payment made by the customer to facilitate the sale project during that time when AEL did not have Euro denominated bank accounts. The Chairman has undertaken to indemnify the Company for the amount due from Real Capital International Limited and to allow set off of this receivable amount with the Convertible Loan due to him when necessary (Note 19).
Amounts due from Chairman relates to proceed from new ordinary shares issued in November 2012 (Note 14) received by Chairman and were unsecured, non-interest bearing and were repayable on demand. During the year, the amount has been recovered when the Chairman repaid a Company creditor on its behalf.
Amount due from subsidiaries (non-current) are non-trade in nature, unsecured, non-interest bearing and repayable on demand from 12 months after the financial year. As a result, the timing of the future cash flows in relation to this balance cannot be estimate reliably. Consequently, it is not practicable to determine with sufficient reliability its fair value and the amount is stated at cost.
Allowances made in respect of estimated irrecoverable amounts are determined by reference to past default experience.
Movement in the allowance for doubtful debts are as follows:
Group 2013 2012 $ $ Balance at beginning of the financial year/period - - Allowance made to profit or loss (172,249) - Balance at end of the financial year/period (172,249) - ========= ====
Trade and other receivables (excluding prepayments) are denominated in the following currencies:
Group Company 2013 2012 2013 2012 US$ US$ US$ US$ United States dollar 26,252 446,617 5,653,247 4,343,861 Singapore dollar 59,304 155,207 17,861 114,828 British pound 2,239 2,423 2,239 2,423 Euro 2,095,312 2,536,976 - - --------- --------- --------- --------- 2,183,107 3,141,223 5,673,347 4,461,112 ========= ========= ========= ========= 13. Cash and cash equivalents Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Cash on hand and bank balances 1,850 738 566 600 Fixed deposits - 14,204 - - ----- -------- ---- ---- Cash and cash equivalents 1,850 14,942 566 600 ==== ==== Less: fixed deposits pledged to banks - (14,204) ----- -------- Cash and cash equivalents as per consolidated statement of cash flows 1,850 738 ===== ========
Fixed deposits pledged to banks were deposits that were placed with banks, with original maturing periods of not more than 365 days. The fixed deposits earn interests at rates ranging from 0.45% to 0.55% per annum.
The Group's fixed deposits of US$Nil (2012: US$14,204) were pledged to banks for credit card facilities granted to the Company and a subsidiary.
Cash and cash equivalents are denominated in the following currencies:
Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Singapore dollar 1,279 14,766 151 538 United States dollar 557 109 415 62 Euro 3 56 - - Hong Kong dollar 11 11 - - ----- ------ ---- ---- 1,850 14,942 566 600 ===== ====== ==== ==== 14. Share capital Group and Company 2013 2012 2013 2012 Number of ordinary shares US$ US$ Issued and paid-up: At beginning of year/period 1,937,839,230 1,493,547,563 37,472,123 19,400,355 Issued during the year/period 315,616,180 444,291,667 2,266,188 18,071,768 ------------- ------------- ---------- ---------- At end of year/period 2,253,455,410 1,937,839,230 39,738,311 37,472,123 ============= ============= ========== ==========
The ordinary shares have no par value, carry one vote per share without restrictions and their holders are entitled to receive dividends when declared by the Company.
During the financial year, the Company issued 315,616,180 new ordinary shares for total consideration of US$2,266,188 for working capital purpose. The newly issued shares rank pari passu in all respects with the previously issued shares.
In prior financial period, the 2(nd) tranche which represent fair value of US$3,505,104 (to be settled by way of issuing 60,958,333 new ordinary shares) which previously included in capital reserve (due to the shares has yet to be issued as at 31 August 2011) has been transferred to share capital. In addition, the Company purchased patents from a related party for a contractual purchase consideration of US$10 million (which represents a fair value of US$14,166,664 based on the Company's share price at the relevant date) by issuing 333,333,334 ordinary shares of the Company to the related party.
In November 2012, the Company issued 50,000,000 new ordinary shares at US$0.008 each for cash consideration of US$400,000.
15. Treasury shares Group and Company 2013 2012 2013 2012 Number of ordinary shares US$ US$ Issued and paid-up: At beginning and end of year/period 1,922,966 1,922,966 56,400 56,400 ========= ========= ====== ======
In September 2008, the Company acquired 40,042,966 of its own shares from its shareholders through off-market purchases at an average price of US$0.03 per share. The Company paid US$1,200,000 in cash to acquire the said shares. This amount was deducted from issued share capital within the shareholders' equity. These bought back shares are held as treasury shares.
In November 2009, the Company re-issued 19,370,000 treasury shares to shareholders. These shares were issued at US$0.03. Cash amounting to US$581,100 was raised from this exercise. There is no gain or loss arising from this transaction.
In August 2010, the Company re-issued 18,750,000 treasury shares to shareholders. These shares were issued at US$0.04. Cash amounting to US$750,000 was raised from this exercise. Gain arising from this transaction US$187,500 is recognised directly in statement of changes in equity.
16. Share options reserve
Share options reserve represents equity-settled share options granted to Directors of the Company and employees of the Group. The reserve is made up of cumulative value of services received from share options holders recorded on grant of equity-settled share options.
The movement of this account is disclosed in the statement of changes in equity.
17. Convertible loans reserve
The convertible loans reserve represents the residual amount of convertible loans after deducting the fair values of the liability components. The movement in convertible loan is disclosed in the statement of changes equity.
18. Trade and other payables Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Trade payable 3,405,476 3,239,649 - - Other payables 1,632,102 2,096,212 1,302,049 1,775,071 Interest payable to Chairman 156,221 - 156,221 - Accruals 248,784 215,954 127,864 100,000 Amount due to Directors 483,573 597,171 188,956 359,220 Amount due to a subsidiary - - 638,587 171,013 --------- --------- --------- --------- Total financial liabilities carried at amortised cost 5,926,156 6,148,986 2,413,677 2,405,304 ========= ========= ========= =========
Trade payables are non-interest bearing with a credit terms of 90 days.
No interest is charged on the other payables.
The amounts owing to Directors and subsidiary are unsecured, interest-free and repayable on demand.
Trade and other payables are denominated in the following currencies:
Group Company 2013 2012 2013 2012 US$ US$ US$ US$ British pound 90,093 304,230 90,093 304,230 Singapore dollar 1,473,011 1,088,295 1,030,435 417,518 United States dollar 957,576 1,512,050 1,293,149 1,678,793 Euro 3,405,476 3,239,648 - - Chinese renminbi - 4,763 - 4,763 --------- --------- --------- --------- 5,926,156 6,148,986 2,413,677 2,405,304 ========= ========= ========= ========= 19. Convertible loans Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Convertible loans due to Chairman 3,906,525 3,680,316 3,906,525 3,680,316 ========= ========= ========= =========
The convertible loans are denominated in United States dollar. Convertible loans due to a Chairman represents the fair values of the liability components after deducting equity components from the fair values of the convertible loans and is made up as follows:
Group 2013 2012 US$ US$ Proceeds of convertible loans issued 6,819,350 6,341,535 Amount classified as equity (252,794) (252,794) Carrying amount of liability at the date of issue 6,566,556 6,088,741 Less: Repayment* (2,660,031) (2,408,425) ----------- ----------- Liability components at end of financial year/period 3,906,525 3,680,316 =========== ===========
*The repayment figure reflected in the table represents the accumulative repayment made by the Company on behalf of the Chairman since 2009. The bulk of the repayment were repayment of third party loans taken by the Chairman on behalf of the Company, plus commissions and broking fees payable for the loans secured. The minor part of the repayments was ad-hoc payments that were outside official business scope such as air-tickets booking for his family members and other personal expenses.
On 11 January 2013, the shareholders of the Company approved the Company entered into the revised convertible loan agreement dated 3 October 2012 with Christopher Nightingale (Chairman). Pursuant to the Revised Convertible Loan Agreement, the parties have determined to increase the total facility to the Company to an aggregate amount of US$7,000,000.
The salient terms and conditions of the Revised Convertible loan agreement are summarised as follow:
- In the event of redemption by the Company of all or any of the Revised Convertible Loan during its term, Christopher Nightingale shall have the option to require the Company to draw the amount of the Revised Convertible Loan in order to enable him to exercise his Conversion Rights.
- The repayment period has extended from 9 January 2013 to 3 October 2014. On 26 June 2014, this loan has been further extended to 31 October 2015.
- An interest of 4% per annum be imposed.
- The lender shall have the right at any time during the term of the loans to convert any part of the loans into ordinary shares of the Company at US$0.008 share.
- In the event that the conversion of the Loan into Conversion Shares does not take place either fully or partially, the Borrower shall on the Repayment Date repay all outstanding sums of the Loan, including the interest on Loan, in United States dollars.
- The Company may also set off any expenses or amount owing from the Lender to the Company from time to time against the Loan.
20. Provisions Group 2013 2012 US$ US$ Provision for unutilised leave 11,758 12,440 Provision for reinstatement cost 21,195 21,195 ------ ------ 32,953 33,635 ====== ======
Movements of provisions during the financial year/period are as follows:
Group 2013 2012 US$ US$ Balance at beginning of financial year/period 33,635 71,940 Reversal during the financial year/period (682) (38,305) ------ -------- Balance at end of financial year/period 32,953 33,635 ====== ========
Provision for unutilised leave represents employee entitlements to annual leave as a result of services rendered by employees up to the end of the financial year/period.
Provision for reinstatement cost is relation to the obligation for dismantlement, removal or restoration of office premises.
21. Share-based payments
The Employee Share Option Scheme (ESOS) enables Directors and employees of the Company and its subsidiaries to subscribe for ordinary shares in the capital of the Company, exercisable at varying periods from the date of grant depending whether the exercise price is set at market price in respect of that offer.
The ESOS Committee has on 5 May 2010 resolved to grant Incentive Options to the employees of the Group under the existing Alternative Energy Limited (AEL) ESOS scheme exercisable at US$0.03 per ordinary share.
Information in respect of the share options granted under the Company's ESOS was as follows:
Group and Company 2013 2012 '000 '000 Balance at beginning and end of financial year/period 81,000 81,000 ========= ========
81,000,000 share options were granted on 5 May 2010. The estimated fair value of the share options granted is US$1,480,000.
The fair value of share options as at the date of grant is estimated by an external valuer using the Black-Scholes-Merton model, taking into account the terms and conditions upon which the options were granted. The options have the vesting period of 2 years and the inputs to the model used are shown below.
Share price Risk-free Expected at date Expected interest life of Exercise of Date of grant volatility rate options price grant (%) (%) (years) (US$) (US$) 5 May 2010 21.5 2.72-3.72 5-10 0.03 0.04 22. Related parties transactions
For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
22.1 During the year, in addition to the information disclosed elsewhere in these financial statements, the Group entities entered into the following transactions with related parties at rates and terms agreed between the parties:
Group Company Financial Financial Financial Financial year from period from year from period from 1 January 1 September 1 January 1 September 2013 to 2011 to 2013 to 2011 to 31 December 31 December 31 December 31 December 2013 2012 2013 2012 US$ US$ US$ US$ With a related party Purchase of patents from a company with a common Director (Note 11) - 14,166,664 - 14,166,664 Payment on behalf for a Director 77,795 244,897 41,358 32,803 Advances from a Director 59,525 97,854 - - Payment on behalf by Chairman 477,815 1,254,482 477,815 1,254,482 Receipt on behalf by Chairman - 400,000 - 400,000 Interest expense arising from convertible loan from Chairman 156,221 - 156,221 - ============ ============ ============ ============ With subsidiaries Advance to subsidiaries - - 964,260 736,397 Management fee income - - 360,000 480,000 Payment on behalf of subsidiaries - - 92,327 201,493 ============ ============ ============ ============
22.2 Key management personnel compensation
Fees/ salary and Defined Share related contribution option costs Bonus plans expense Total US$ US$ US$ US$ 2013 2012 Executive Directors Christopher Nightingale 240,000 - - - 240,000 320,000 Dr Goh Swee Ming 152,443 12,419 7,116 - 171,978 360,651 Non-Executive Directors Richard Lascelles - - - - - 144,685 Bay Yew Chuan - - - - - 144,685 * Noel Meaney - - - - - 124,685 -------- ------ ------------- -------- ------- --------- Total Key Management 2013 392,443 12,419 7,116 - 411,978 ------ ------------- -------- ------- Total Key Management 2012 556,746 24,186 15,034 498,740 1,094,706 ======== ====== ============= ======== ======= =========
* Resigned on 29 November 2012.
The Non-Executive Directors\' consultancy fees of US$Nil (2012: US$40,000) were accrued and have not been paid as at 31 December 2013 along with US$147,125 (2012: US$326,416) and US$172,544 (2012: US$172,902) of Christopher Nightingale's and Dr Goh Swee Ming's salary respectively.
The remuneration of Directors is determined by the Remuneration Committee having regard to the performance of individuals and market trends. The remuneration disclosed above includes only the Directors as there is no personnel other than Directors who are considered to be a member of key management of the Group.
23. Operating lease commitments
At the end of the financial year/period, the commitments in respect of non-cancellable operating leases of office premises and equipment were as follows:
Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Future minimum lease payments payable: Within one year 167,974 190,670 - 38,423 After one year but within five years 3,000 136,219 - - ------- ------- ---- ------ 170,974 326,889 - 38,423 ======= ======= ==== ======
The above operating lease commitments are based on existing rates. The lease agreements provide for a periodic revision of such rates in the future. The Group has an option to renew the leases for another 1 year after the expiry of the current lease terms.
24. Financial instruments and financial risks
The Group's activities are exposed to a variety of financial risks: credit risk, market risk (including foreign exchange risk and interest risk) and liquidity risk. The Group's overall risk management programme focuses on the predictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group does not use derivatives financial instruments to hedge any risk exposures.
The Group has established risk management policies and guidelines, which set out its overall risk management strategies.
24.1 Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group performs ongoing credit evaluation of its counterparties' financial condition and generally do not require collateral.
The carrying amounts of cash and bank balances and trade and other receivables represent the Group's and the Company's maximum exposure to credit risk in relation to financial assets.
The Group and Company has a significant concentration of credit risk in the form of outstanding balances due from 1 (2012: 1) a related party, Real Capital International Ltd and 2 (2012: 2) subsidiaries representing 96% (2012: 81%) and 99% (2012: 88%) respectively, of total trade and other receivables (Note 12).
As at the end of the financial year, the Group's and the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.
Bank balances are placed with high credit-ratings assigned by international credit rating agencies. Management is not expecting any counterparty to fail to meet its obligations.
24.2 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group's income or value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
Foreign currency risk
The Group is exposed to currency risk arising from various currency exposures. The currencies giving rise to this risk are primarily Singapore dollar, British pound and Euro. Exposure to foreign currency risk is monitored on an ongoing basis by the Group to ensure that the net exposure is at an acceptable level, as the Group manages its transactional exposure by a policy of matching, as far as possible, receipts and payments in each individual currency.
The carrying amounts of the Group's and the Company's foreign currency denominated monetary assets and liabilities as at the end of the financial year/period are as follows:
Group Company 2013 2012 2013 2012 US$ US$ US$ US$ Monetary assets Singapore dollar 60,583 169,973 18,012 115,366 Euro 2,095,315 2,537,032 - - British pound 2,239 2,423 2,239 2,423 Monetary liabilities Singapore dollar 1,473,011 1,088,295 1,030,435 417,518 Euro 3,405,476 3,239,648 - - British pound 90,093 304,230 90,093 304,230 ========= ========= ========= =======
Foreign currency sensitivity analysis
The Group is mainly exposed to Singapore dollar (SGD), British pound (GBP) and Euro (EUR).
The following table details the Group's sensitivity to a 10% change in SGD, GBP and EUR against United States dollar. The sensitivity analysis assumes instantaneous 10% change in the foreign currency exchange rates from the end of the financial year, with all variables held constant.
Increase/(Decrease) Profit or Loss Group Company 2013 2012 2013 2012 US$ US$ US$ US$ SGD Strengthens against US$ (141,243) (91,832) (101,242) (30,215) Weakens against US$ 141,243 91,832 101,242 30,215 EUR Strengthens against US$ (131,016) (70,262) - - Weakens against US$ 131,016 70,262 - - GBP Strengthens against US$ (8,785) (30,181) (8,785) (30,181) Weakens against US$ 8,785 30,181 8,785 30,181
Interest rate risk
Interest rate risk is the risk that the fair value future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk arises primarily from their fixed deposits with financial institution which is not significant.
The Company has no exposure to market risk for changes in interest rates.
24.3 Liquidity risks
Liquidity risks refer to the risks in which the Group encounters difficulties in meeting its short-term obligations. Liquidity risks are managed by matching the payment and receipt cycle.
The Group's operations are financed mainly through right issues, private placements, convertible loans, other equity or equity-related exercise.
The following table details the Group's remaining contractual maturity for its financial liabilities. The table has been drawn up based on undiscounted cash flows of financial liabilities based on the earlier of the contractual date or when the Group is expected to pay. The table includes both interest and principal cash flows.
Effective Within two interest Less than to rate one year five years Total % $ $ $ The Group Financial liabilities 2013 Trade and other payables - 5,926,156 - 5,926,156 Convertible loans 4 4,062,786 - 4,062,786 --------- ----------- --------- As at 31 December 2013 9,988,942 - 9,988,942 ========= =========== ========= 2012 Trade and other payables - 6,148,986 - 6,148,986 Convertible loans - 3,680,316 - 3,680,316 --------- ----------- --------- As at 31 December 2012 9,829,302 - 9,829,302 ========= =========== ========= 25. Fair value of financial assets and financial liabilities
The Directors consider that the carrying amounts of the financial assets and financial liabilities approximate their fair values due to the relative short term maturity of these financial instruments.
Management has classified convertible loan as Level 3 (inputs for the assets or liability that are not based on observable market date - unobservable inputs) of the fair value measurement hierarchy. Management estimates the carrying amounts of the convertible loan is approximate to the fair values due to the relative short term maturity of this financial instruments. The fair values of the convertible loans are based on the best estimate of the market value of similar instrument without the conversion feature.
26. Capital management policies and objectives
The management's policy is to achieve a strong capital base so as to sustain future development of the business. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. The Group regards the equity attributable to shareholders and convertible loans as capital. The Group's overall strategy remains unchanged from the financial period 2012.
The Group manages its capital structure by various means such as deciding on the amount of dividends paid to shareholders, return of capital to shareholders, issue of new shares to reduce debts, as it deems beneficial to the interest of its shareholders.
In financial year 2009, the Company purchased its own shares from the market and the timing of these purchases depends on market prices. Primarily, such actions are intended to enhance the return to the Group's shareholders and to be used for issuing shares under the Group's share option scheme. Buy and sell decision are made on a specific transaction basis by the management. The Group does not have a defined share buy-back plan.
The management believes that employees' participations in the capital of the Group will increase the shareholders' value and therefore will implement the Group's share option scheme, which is extended to both key management personnel and certain classes of employees of the Group.
There are no changes in the Group's approach to capital management during the financial year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
27. Segment reporting
Management has determined the operating segments based on the reports reviewed by chief operating decision-maker (Note 2.18).
The chief operating decision-maker considers the business from only a business segment perspective, as geographical, management manages and monitors the business only from Singapore. Most of the assets and liabilities are located in Singapore.
The principal operations of the Group relates the provision of technology, hardware and equipment for renewable energy and green energy solutions product in Singapore and Europe region.
In presenting information on the basis of geographical segments, segment revenue is based on the geographical markets.
Distribution of total revenue by geographical markets:
Group Financial Financial year from period from 1 January 1 September 2013 to 2011 to 31 December 31 December 2013 2012 US$ US$ Singapore 12,736 154,072 Europe - 12,170,882 ------------ ------------ 12,736 12,324,954 ============ ============
The Group has one (2012: one) major customer in which represent approximately 100% (2012: 99%) of the Group's total revenue.
28. Comparative figures
The current financial year covers a period of 12 months from 1 January 2013 to 31 December 2013.
The comparative figures presented in the financial statements are not comparable as those financial statements cover a period of 16 months from 1 September 2011 to 31 December 2012 as the Group changed its financial year end from 31 August to 31 December.
29. Events subsequent to the reporting period
Subsequent to 31 December 2013, the following events have taken place:
(a) On 31 March 2014 a further 50,000,000 Ordinary Shares were placed at a price of US$0.005 per share, by the Company, with Logarajah Subramaniam and the shares were allocated to his nominee Indra Devi Ratnasingam, for a consideration of US$250,000.
(b) On 15 May 2014, the Company updated on Equity Linked Note Program ("ELN") that was announced on 1 April 2014 in the Interim Results. The Board of Alternative Energy Limited announced that it had re-executed the subscription agreement for up to GBP10 million as opposed to US$10 million. Consequently, the Company proposes to issue to the Advance Capital Partners Pte Ltd ("Subscriber") 5.0% equity-linked redeemable structured notes due 2017 with an aggregate principal amount of up to GBP10 million. The Notes shall entitle the holder thereof to 5.0% interest per annum, and, on the terms and conditions herein, be convertible into ordinary shares in the capital of the Company which are listed on AIM.
The Company has drawn down 10 sub-tranches of the Tranche 1 Notes amounting to GBP250,000 of which 5 sub-tranches have been converted to ordinary share as stated below:
(i) On 27 May 2014, 15,368,852 ordinary shares of the Company be allotted and issued to the Subscriber at an issue price of GBP$0.00488 per share through conversion of GBP 75,000 (US$119,417) of the equity linked notes.
(ii) On 16 June 2014, 10,264,832 ordinary shares of the Company be allotted and issued to the Subscriber at an issue price of GBP0.004871 per share through conversion of GBP 50,000 (US$79,498) of the equity linked notes.
On 27 May 2014, 10,000,000 new shares at issue price of GBP0.0125 amounted to GBP125,000 (US$211,288) as payment for the First Commitment Fee for the equity linked notes by the Company. This amount is to be paid by way of shares in the Company based on the latest closing price of 23 May 2014.
(c ) On 7 July 14, the Company entered into a senior loan note instrument agreement with Darwin Strategic Limited ("Darwin") for general working purposes. The Company has issued a senior loan note to Darwin for a principal amount of GBP225,000 with a subscription price of GBP180,000 repayable by the Company on 7 November 2014 ("Initial Maturity Date"). If the Note is not repaid in full by the Initial Maturity Date, the principal amount owed by the Company shall be automatically increased to GBP270,000 and the maturity date shall be extended to 7 May 2016 .
This information is provided by RNS
The company news service from the London Stock Exchange
END
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