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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 : 5673Z
Alternative Energy Limited
12 December 2014
12 December 2014
ALTERNATIVE ENERGY LIMITED
("Alternative Energy" or "the Company")
Interim Results for the six month period to 30 June 2014
The Board of Alternative Energy Limited (AIM: ARL.L) announces its Unaudited Interim Condensed Consolidated Financial Information for the six month period from 1 January 2014 to 30 June 2014.
Chairman's Statement
The financial statements presented in this review are being published at the same time as the delayed audited results for the year ended 31 December 2013. As the Chairman's statement which I prepared for those statements already deals with most of the issues relating to the Company's business and prospects and the issues which have given rise to the delayed publication of results I am not proposing to repeat them here, but to focus on those matters relevant specifically to the interim results.
The Board naturally regrets the delay in publishing the Annual Results to 31 December 2013 and the Interim Results to 30 June 2014. The principle reason for the delay has been the valuation of the Group's intellectual property. 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 these Interim Results for the period ended 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.
The six months to 30 June 2014 was the period when the Company had to formulate a fresh business plan following the delay of its contracted Indonesian projects. For much of this time the Company's shares were suspended whilst the Board reviewed the Company's finances and options. This led to the Company signing its GBP 10 million convertible note program with Advance Capital Partners, which was announced in March and revised in May.
The interim results themselves were due to be published by 30 September 2014, but the delays in the preparation of the 2013 year end results meant that work on the interim results could not be commenced until the year end results were finalised, and the decision was taken to publish both sets of results at the same time.
The Company is taking steps to avoid a repetition of the delays experienced this year in publishing both its full year and interim results. We are planning to augment our financial and accounting team and we will be looking for a new financial controller and finance director to ensure that the Company's next results, which are to be published on or before 30 June next year, are published in good time.
Notwithstanding that the Group showed little revenue in the six month period, this does not mean that the team were not active, in fact they were working very hard. Several surveys and a substantial amount of work was done on the proposed Indonesian projects with Dr Tay and Dr Goh travelling to remote potential solar farm sites and then preparing feasibility studies for projects which are still awaiting consent. In respect of the lighting, several tenders were prepared and the Company sold its first street lights to our Indonesian distributor - having developed a new and very competitive Chip on Board (COB) streetlight for the Jakarta street light tender. The huge effort by the team is in no way reflected by the results, and the main benefit was to develop competitive products in commercial situations which we are now in a position to market on a wider basis.
With the benefit of this experience 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 acquisitive as well as organic growth.
Notwithstanding the very difficult period through which we have just come through, for the first time in the Company's history the Company has viable products both solar and lighting, for which there appears to be 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.
As I stated for the 2013 year end results 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.
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.
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
REPORT ON REVIEW OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARIES
FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2014
Introduction
We have reviewed the accompanying interim condensed consolidated statement of financial position of Alternative Energy Limited (the "Company") and its subsidiaries (the "Group") as of
30 June 2014 and the related interim condensed consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, and explanatory notes. Management is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review.
This report is made solely to the Board of Directors and we do not accept or assume responsibility to any party other than the Board of Directors, for our works, for this report, or for the conclusion we have formed.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis for Qualified Conclusion
As at 30 June 2014, included in the consolidated statement of financial position of the Group are intangible assets of US$15,946,676. For the purpose of assessing impairment of the Group's intangible assets, management has prepared a discounted cash flow to determine the value in use of these assets based on the discounted cash flow method disclosed in Note 9 to the financial information. Management have prepared the discounted cash flow method 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 method. 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 Conclusion
Based on our review, with the exception of the matter described in the preceding paragraph, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not give a true and fair view of the financial position of the entity as at 30 June 2014, and of its financial performance and its cash flows for the six-month period then ended in accordance with IAS 34.
Material Uncertainty Regarding Continuation as a Going Concern
We draw your attention to Note 4 to the financial information which indicates the Group incurred a net loss of US$1,659,439 during the six-month period ended 30 June 2014 and, as of that date, the Group's current liabilities exceed its current assets by US$7,959,336. The Group has taken measures as described in Note 4 to secure the necessary funding to meet its daily operation needs and repay its obligation. If these measures described in Note 4 fail to materialise, this could indicate an existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. Our conclusion is not qualified in respect of this matter.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
5 December 2014
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2014
30 June 2014 30 June 2013 Unaudited Unaudited Note US$ US$ Revenue 187,464 5,661 Cost of sales (118,203) (3,924) Gross profit 69,261 1,737 Other income 3,367 3,178 Administrative expenses (407,440) (406,379) Other expenses (1,033,105) (662,353) Finance cost (291,522) - Loss before income tax 5 (1,659,439) (1,063,817) Income tax 6 - - Loss for the financial period, representing total comprehensive loss for the financial period (1,659,439) (1,063,817) ------------ ------------ Loss per share (US$ cents) Basic and diluted loss per share 7 (0.073) (0.053) ============ ============
The accompanying notes form an integral part of this financial information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Unaudited Audited Note 30.6.2014 31.12.2013 US$ US$ ASSETS Non-current assets Plant and equipment - 460 Investment in joint venture 8 - - Intangible assets 9 15,946,676 16,661,676 ------------ 15,946,676 16,662,136 ------------ ------------ Current assets Cash and cash equivalents 2,611 1,850 Trade and other receivables 10 2,201,858 2,188,224 2,204,469 2,190,074 ------------ ------------ Total assets 18,151,145 18,852,210 ============ ============ EQUITY AND LIABILITIES Capital and reserves Issued capital 11 40,398,514 39,738,311 Treasury shares (56,400) (56,400) Share options reserve 1,480,000 1,480,000 Convertible loans reserve 252,794 252,794 Accumulated losses (34,087,568) (32,428,129) ------------ ------------ 7,987,340 8,986,576 ------------ ------------ Current liabilities Trade and other payables 12 6,184,443 5,926,156 Convertible loans 13 3,946,409 3,906,525 Provisions 32,953 32,953 ------------ 10,163,805 9,865,634 ------------ ------------ Total equity and liabilities 18,151,145 18,852,210 ============ ============
The accompanying notes form an integral part of this financial information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Share Convertible Issued Treasury options loans Accumulated capital shares reserve reserve losses Total US$ US$ US$ US$ US$ US$ Unaudited Balance at 1 January 2014 39,738,311 (56,400) 1,480,000 252,794 (32,428,129) 8,986,576 Loss for the period, representing total comprehensive loss for the financial period - - - - (1,659,439) (1,659,439) Shares issued during the financial period 660,203 - - - - 660,203 Balance at 30 June 2014 40,398,514 (56,400) 1,480,000 252,794 (34,087,568) 7,987,340 ========== ======== ========= =========== ============ ===========
The accompanying notes form an integral part of this financial information.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Foreign Share Convertible currency Issued Capital Treasury options loans Accumulated translation Capital reserve shares reserve reserve losses reserve Total US$ US$ US$ US$ US$ US$ US$ US$ Unaudited Balance at 1 January 2013 37,472,123 - (56,400) 1,480,000 252,794 (16,631,910) - 22,516,607 Loss for the period, representing total comprehensive loss for the financial period - - - - - (1,063,817) - (1,063,817) Shares issued during the financial period 1,943,766 - - - - - - 1,943,766 Balance at 30 June 2013 39,415,889 - (56,400) 1,480,000 252,794 (17,695,727) - 23,396,556 ========== ======== ======== ========= =========== ============ ============ ===========
The accompanying notes form an integral part of this financial information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
30.6.2014 30.6.2013 Unaudited Unaudited US$ US$ Operating activities Loss before income tax (1,659,439) (1,063,817) Adjustments for: Amortisation of intangible assets 715,000 398 Gain on disposal of plant and equipment - (81) Depreciation of plant and equipment 460 1,066 Interest expenses 291,522 - ----------- ----------- Operating cash flows before movements in working capital (652,457) (1,062,434) Trade and other receivables (13,634) 886,002 Trade and other payables 310,454 (1,693,064) ----------- ----------- Net cash used in operating activities (355,637) (1,869,496) ----------- ----------- Investing activities Additions of intangible assets - (1,191) Withdrawal in pledged fixed deposits - 14,204 Proceeds from disposal of property and equipment - 81 Net cash from investing activities - 13,094 ----------- ----------- Financing activities Net proceeds from issue of shares 115,570 1,943,766 Proceeds from Equity Linked Notes 198,915 - Net proceeds from convertible loans 95,313 257,508 Repayment of convertible loans (53,400) (224,935) Net cash from financing activities 356,398 1,976,339 ----------- ----------- Net change in cash and cash equivalents 761 119,937 Cash and cash equivalents at beginning of period 1,850 738 ----------- ----------- Cash and cash equivalents at end of period 2,611 120,675 =========== ===========
The accompanying notes form an integral part of this financial information.
NOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2014
1. General
The Company was incorporated in Singapore on 26 December 2006 under the name of Alternative Energy Pte. Ltd. On 11 July 2007 the Company was converted into a public limited company and changed its name to Alternative Energy Limited (the "Company"). The Company is domiciled in Singapore. The registered office of the Company is 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 trading on AIM, a market operated by the London Stock Exchange.
The principal activity of the Company is the provision of technology, hardware and equipment for renewable energy and green energy solutions. It also develops and makes investments or acquisitions in 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 performing management services (including marketing and other necessary services) to its subsidiaries. The principal activities of the subsidiaries are that of research and development of renewable energies for household consumers and holding of trademarks and intellectual properties. The Group's operation is not subject to any seasonality or cyclicality.
The interim condensed consolidated financial information of Alternative Energy Limited and its subsidiaries (collectively, the Group) for the six months ended 30 June 2014 were authorised for issue in accordance with a resolution of the directors on 5 December 2014.
2. Basis of preparation
The interim condensed consolidated financial information for the six months ended 30 June 2014 have been prepared in accordance with IAS 34, Interim Financial Reporting.
The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2013 and any public announcements made by the Group during the interim reporting period.
3. Significant accounting policies
The interim condensed consolidated financial information has been prepared under the historical cost convention.
Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial information for the six months ended 30 June 2014 are the same as those followed in the preparation of the Group's annual financial statements for the year ended
31 December 2013.
In the current interim period, the Group has adopted the following interpretation and amendments to International Financial Reporting Standards ("IFRSs") issued by the IASB and the IFRS Interpretations Committee of IASB that are relevant for the preparation of the Group's condensed consolidated financial information.
Effective date (annual periods beginning on or after) Amendments to IFRS 10, Investment Entities 1 January 2014 IFRS 12 and IAS 27 Offsetting Financial Assets and Amendments to IAS 32 Financial Liabilities 1 January 2014 Recoverable Amount Disclosures Amendments to IAS 36 for Non-Financial 1 January 2014 Assets Novation of Derivatives and Continuation Amendments to IAS 39 of 1 January 2014 Hedge Accounting IFRIC - Int 21 Levies 1 January 2014
The application of the above interpretation and amendments to IFRSs in the current interim period has had no material effect on the amounts reported in these interim condensed consolidated financial information and/or disclosures set out in these interim condensed consolidated financial information.
4. Going concern
The Group incurred a net loss of US$1,659,439 for the six month period ended 30 June 2014 and as of that date, the Group's current's liabilities exceeded its current assets by US$7,959,336. This condition indicates the existence of a material uncertainty that may cast significant doubt about the Group'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 Loans (Note 13) 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 Group is in discussions with several parties with a view to such potentially taking a significant stake in the Company.
iv) 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 of the Company.
v) 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.
vi) 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.
vii) The overall business market relating to both our 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 we 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 believe 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 information.
5. Loss before income tax
In addition to the information disclosed elsewhere in the unaudited financial information, the Group's loss before income tax is arrived at after charging/(crediting) the following:
30.6.2014 30.6.2013 Unaudited Unaudited US$ US$ Administrative expenses Employee benefits expense: * Salaries and related costs 323,113 382,630 * Contributions to defined contributions plans 20,572 9,972 ========= ========= Other expenses Amortisation of intangible assets 715,000 398 Depreciation of plant and equipment 460 1,066 Gain on disposal of plant and equipment - (81) Exchange loss/(gain) (5,366) 5,315 Operating lease expense - rental of office premises and equipment 65,346 158,957 Professional fees 189,431 208,688 Research expense (25) 20,854 Finance expense Interest expense on convertible loans due to Chairman 80,235 - Commitment fees 211,287 - ========= =========
Employee benefits expense includes key management personnel compensation which are disclosed in Note 14 to the financial information.
6. Income tax
The Group has no chargeable income for the six months period ended 30 June 2014 and 30 June 2013. Accordingly, no provision for income tax has been provided.
7. Loss per share
The calculation of the basic earnings per share and diluted earnings per share is based on the Group's loss attributable to equity holders divided by the weighted average number of ordinary shares in issue during the period.
For the purpose of calculating diluted loss per share, the Group's net loss attributable to equity holders and the weighted average number of ordinary shares in issue are adjusted for the effects of all dilutive potential ordinary shares. The outstanding are adjusted for the effects of all dilutive potential ordinary shares. A total of 90 million (2013: 263 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 30.6.2014 30.6.2013 US$ US$ Loss for the period attributable to equity holders of the Company (1,659,439) (1,063,817) ============== ============= Weighted average number of ordinary shares 2,283,311,960 2,017,916,568 Basic and dilutive earnings per share (cents per share) (0.073) (0.053) ============== ============= 8. Investment in joint venture
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 has no obligation in respect of these losses.
The details of the joint venture are as follows:
Country of incorporation/ Effective Joint venture Principal activities operation equity interest 30 June 31 December 2014 2013 Held by Alternative Energy Holdings Limited % % Manufacture light fittings, street The People's The Green Light lights and other Republic Company lighting equipment of China 50 50 9. Intangible assets Computer Goodwill software Patents Trademarks Total US$ US$ US$ US$ US$ Unaudited 30 June 2014 Cost Balance at 1 January 2014 464,726 54,486 28,596,602 600,348 29,716,162 Additions - - - - - Balance at 30 June 2014 464,726 54,486 28,596,602 600,348 29,716,162 -------- --------- ---------- ---------- ---------- Accumulated amortisation Balance at 1 January 2014 - 54,486 1,430,000 - 1,484,486 Amortisation for the period - - 715,000 - 715,000 Balance at 30 June 2014 - 54,486 2,145,000 - 2,199,486 -------- --------- ---------- ---------- ---------- Impairment Balance at 1 January 2014 464,726 - 11,105,274 - 11,570,000 Impairment loss recognised during the year - - - - - Balance at 30 June 2014 464,726 - 11,105,274 - 11,570,000 -------- --------- ---------- ---------- ---------- Net carrying amount Balance at 30 June 2014 - - 15,346,328 600,348 15,946,676 ======== ========= ========== ========== ========== Unaudited 30 June 2013 Cost Balance at 1 January 2013 464,726 54,486 28,335,326 415,247 29,269,785 Additions - - - 1,191 1,191 Balance at 30 June 2013 464,726 54,486 28,335,326 416,438 29,270,976 ------- ------ ---------- ------- ---------- Accumulated amortisation Balance at 1 January 2013 - 54,088 - - 54,088 Amortisation for the period - 398 - - 398 Balance at 30 June 2013 - 54,486 - - 54,486 ------- ------ ---------- ------- ---------- Net carrying amount Balance at 30 June 2013 464,726 - 28,335,326 416,438 29,216,490 ======= ====== ========== ======= ========== Computer Goodwill software Patents Trademarks Total US$ US$ US$ US$ US$ Audited 31 December 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 - 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 464,726 - 11,105,274 - 11,570,000 Balance at 31 December 2013 464,726 - 11,105,274 - 11,570,000 -------- --------- ---------- ---------- ---------- Net carrying amount Balance at 31 December 2013 - - 16,061,328 600,348 16,661,676 ======== ========= ========== ========== ==========
As at 30 June 2014, the management has assessed and determined that the intangible assets is not impaired. Management has carried out a review of the recoverable amount of the intangible assets. The recoverable amount of the intangible assets is determined on the basis of value in use. The calculation of the value in use is based on discounted cash flow method using the financial forecasts approved by the management covering of a five-year period. The cash flow projections are estimated based on management expectation of securing certain key projects over the next five years. The pre-tax discount rate applied to the cash flow projection is 8% per annum.
10. Trade and other receivables Unaudited Audited 30.6.2014 31.12.2013 US$ US$ Trade receivables 74,609 10,058 Other receivables 2,033 - Deposits 77,737 77,737 Prepayments 5,117 5,117 Amounts due from a related party 2,042,362 2,095,312 Amounts due from a joint venture 172,249 172,249 Less: Allowance for doubtful debts- amounts due from a joint venture (172,249) (172,249) 2,201,858 2,118,224 ========= ========== 10. Trade and other receivables (Continued)
Amounts due from a related party is substantially denominated in Euro dollar and 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 indemnity the Company for the amount due from RCI and to allow set off of this receivable amount with the convertible loans due to him (Note 13).
The carrying value for trade and other receivables approximates their fair values due to their short-term maturities.
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:
Unaudited Audited 30.6.2014 31.12.2013 US$ US$ Balance at beginning of the financial year/period (172,249) - Allowance made to profit or loss - (172,249) Balance at end of the financial year/period (172,249) (172,249) ========= ========== 11. Issued capital Unaudited Audited Unaudited Audited 1.1.2014 1.1.2013 1.1.2014 1.1.2013 to 30.6.2014 to 31.12.2013 to 30.6.2014 to 31.12.2013 No. of share No. of share US$ US$ Issued and fully-paid: Balance at beginning of financial period/year 2,253,455,410 1,937,839,230 39,738,311 37,472,123 Issue of new ordinary shares 85,633,684 315,616,180 660,203 2,266,188 ------------- -------------- ------------- -------------- Balance at end of financial period/year 2,339,089,094 2,253,455,410 40,398,514 39,738,311 ============= ============== ============= ==============
On 31 March 2014, the Company issued 50,000,000 new ordinary shares. These ordinary shares we issued at US$0.005. Cash amounting to US$250,000 was raised from this exercise for working capital purpose.
On 7 May 2014, the Company entered into a conditional subscription agreement ("Original Subscription Agreement") with advance Opportunities Fund ("Subscriber") and Advance Capital Partners Pte Ltd ("ACP") as the investment manager of the Subscriber, pursuant to which the Company proposes to issue and sell to the Subscriber, 5.0% equity-linked redeemable structured convertible notes due 2017 ("Notes") with an aggregate principal amount of up to GBP10,000,000 comprising four (4) tranches of a principal amount of GBP2,500,000 each (collectively, the Note shall be referred to as the "Notes" and individually, the four tranches of the Note shall be referred to as "Tranche 1 Notes". "Tranche 2 Notes", "Tranche 3 Notes" and "Tranche 4 Notes" respectively). Tranche 1 Notes shall comprise a further 100 equal sub-tranches of GBP25,000 each, Tranche 2 Notes shall comprise a further 100 equal sub-tranches of GBP25,000 each, Tranche 3 Note shall comprise a further 50 equal sub-tranches of GBP50,000 each and Tranche 4 Notes shall comprise a further 50 equal sub-tranches of GBP50,000 each ("Proposed Issue").
As at 30 June 2014, the Company has drawn down 6 sub-tranches of the Tranche 1 Notes amounted to GBP150,000 of which 5 tranches have been converted to shares, 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 GBP0.00488 per share through conversion of GBP75,000 (USD119,417) 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 GBP50,000 (USD79,498) of the equity linked notes.
On 27 May 2014, 10,000,000 New Shares at issue price of GBP0.0125 amounted to GBP125,000 (USD211,288) 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.
12. Trade and other payables Unaudited Audited 30.6.2014 31.12.2013 US$ US$ Trade payable 3,381,291 3,405,476 Other payables 1,682,609 1,632,102 Interest payable to Chairman 236,456 156,221 Accruals 287,768 248,784 Amount due to directors 556,483 483,573 Loan from third party 39,836 - 6,184,443 5,926,156 ========= ==========
Trade payables are non-interest bearing with a credit terms of 90 days.
No interest is charged on the other payables.
The amount owing to directors are unsecured, interest-free and repayable on demand.
Loan from third party pertains to the equity-linked redeemable structured convertible notes owing to Advance Opportunities Fund, which can be converted to shares.
13. Convertible loans Unaudited Audited 30.6.2014 31.12.2013 US$ US$ Convertible loans due to a Chairman 3,946,409 3,906,525 ========= ==========
The convertible loans are denominated in United States dollar. Convertible loans due to Chairman represents the residual amount of convertible loans due to Christopher Nightingale after deducting the fair value of the equity component and is made up as follows:
Unaudited Audited 30.6.2014 31.12.2013 US$ US$ Net proceeds of convertible loans issued 6,819,350 6,819,350 Less: Liability components at date of issue (6,566,556) (6,566,556) ----------- ----------- Equity components 252,794 252,794 Liability components at date of issue 6,566,556 6,566,556 Add: Proceed from convertible loans 95,313 - Less: Repayment* (2,715,460) (2,660,031) ----------- ----------- Liability components at end of financial period 3,946,409 3,906,525 =========== ===========
*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.
14. Related parties transactions
For the purposes of these unaudited condensed consolidated financial information, 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.
In addition to the information disclosed elsewhere in the unaudited condensed consolidated financial information, related party transactions between the Group and the Company and its related parties during the financial year were as follows:
Unaudited Unaudited 30.6.2014 30.6.2013 US$ US$ Proceeds from convertible loans 95,313 257,508 Payment on behalf of the Chairman - 224,935 Advances from a director 23,976 39,605 Interest expense arising from convertible loan from Chairman 80,235 - Advances to a joint venture - 93,479 ========= =========
Key management compensation
Total Fees/ Salary and related Defined contribution Unaudited Unaudited costs plans 30.6.2014 30.6.2013 US$ US$ US$ US$ Executive Director Christopher Nightingale 120,000 - 120,000 120,000 Dr Goh Swee Ming 73,908 2,153 76,061 78,878 Total Key Management 1.1.2014 to 30.6.2014 193,908 2,153 196,061 ----------- -------------------- ========== Total Key Management 1.1.2013 to 30.6.2013 197,556 1,322 198,878 ==========
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.
15. Segment reporting
Management has determined the operating segments based on the reports reviewed by chief operating decision-maker.
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 Asia Pacific.
In presenting information on the basis of geographical segments, segment revenue is based on the geographical markets where the customer resides.
Distribution of total revenue by geographical markets:
30.6.2014 30.6.2013 Unaudited Unaudited US$ US$ China 65,620 - Indonesia 121,844 5,661 --------- --------- 187,464 5,661 ========= ========= 16. Events subsequent to the reporting period
(a) 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 GPB180,000 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.
(b) As at the date of this financial information, USD 157,973 had been drawn down from the ELN Note Program, consisting of four sub-tranches in the month of August, September, October 2014 and November 2014 respectively.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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