We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Helius Eng | LSE:HEGY | London | Ordinary Share | GB00B1GF9F36 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 4.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMHEGY
RNS Number : 5285B
Helius Energy Plc
05 March 2014
5 March 2014
Helius Energy plc
("Helius" or the "Company")
2013 Full Year Results
Helius Energy plc ("Helius"), the company established to identify, develop, own and operate biomass fired renewable electricity generation plants today issued its annual report and accounts for the twelve months ended 30 September 2013.
Highlights:
Hot Features
Premium
-- Construction of the 7.2MWe CoRDe biomass power facility at Rothes
was completed on time and within budget and was successfully
handed over to CoRDe for commercial operation
-- The CoRDe facility is currently operating in-line with Company
expectations and is exporting around 6.8MWe of electricity
to the grid
-- Significant progress made with the 100MWe Avonmouth biomass
energy project which is at a very advanced stage
-- The Company is working with a club of banks in respect of
the senior project debt and has continued to progress discussions
with a number of potential project equity partners. The project
has been named by HM Treasury as prequalified and eligible
for support under the UK Guarantees Scheme.
-- Construction contracts in respect of the project have been
substantially negotiated. A robust fuel strategy has been
developed and fuel supply contracts with suppliers have been
substantially negotiated. The Company has also negotiated
terms for the off-take of energy and related products generated
by the plant.
-- The Board now expects to reach financial close and commence
construction of the Avonmouth project in the first half of
2014.
-- The initial statutory consultation process in respect of the
100MWe Southampton project has been completed and an application
for a Development Consent Order is being prepared.
-- Operating loss of GBP1.3 million (2012: GBP11.6 million)
-- Administrative costs reduced significantly to GBP1.3 million
(2012: GBP1.8 million)
John Seed, Chairman of Helius Energy said:
"I am pleased with the progress we made during 2013 advancing our portfolio of biomass energy projects. The start of commercial operation of the CoRDe biomass power plant in Rothes was an important milestone for the Company and one which demonstrates our strategy of delivering projects to financial close and then managing the on-going operation of those projects. Despite market uncertainty created in part by the Government's Electricity Market Reform programme we have continued to advance towards finalising the financing of our Avonmouth project. This project is now at a very advanced stage and I am confident that we are well placed to reach financial close and begin construction of the plant during the first half of 2014."
For more information please contact:
Helius Energy plc Tel: +44 (0) 20 7723 6272 Adrian Bowles, Chief Executive Officer Alan Lyons, Chief Financial Officer Numis Securities Limited Jamie Lillywhite (as Nominated Adviser) Tel: +44 (0) 20 7260 1000 James Black (as Corporate Broker) Citigate Dewe Rogerson Tel: +44 (0) 20 7282 2867 Chris Gardner Malcolm Robertson
Chairman's update
The priorities for the Company over the past financial year have been
-- completing the construction and handover of Helius CoRDe Limited's 7.2 MW(e) biomass power project at Rothes, Morayshire, and bringing the plant into full commercial operation;
-- progressing the financing of the Company's 100 MW(e) project at Avonmouth; and -- continuing the work required to obtain a planning consent for our project in Southampton.
CoRDe project
I am delighted to report that construction of the CoRDe project was completed on time and within budget. The plant entered commercial operation in July 2013 following an opening ceremony in April 2013 where we had the pleasure of hosting HRH Prince Charles, Duke of Rothesay. The project is operating in line with the expectations set out in our original business plan, including revenue received from a long term management service agreement, and we look forward to receiving our share of future profits.
Avonmouth
We have made significant progress with our Avonmouth project. The construction contracts in respect of the project have been substantially negotiated. A robust fuel strategy has been developed and fuel supply contracts with suppliers from the United States of America, the United Kingdom and the European Union have been substantially negotiated pursuant to that strategy. The Company has negotiated terms for the off-take of energy and related products, including Renewables Obligation Certificates (ROCs), and is in the process of appointing a preferred party to take 100 per cent of the plant's output. This project is expected to achieve an annual emission factor of less than the 200kgCO(2eq) /MWh as will be required by legislation.
We continue to work with a club of banks, including the Royal Bank of Scotland and the UK Green Investment Bank, to secure the senior project debt. HM Treasury announced in October 2013 that the project had been pre-qualified to receive support under the Infrastructure Guarantee Scheme, which will provide further senior debt support.
The Company has progressed discussions with a number of potential project equity partners. Negotiations are no longer progressing with the equity partner with whom non-binding heads of terms were agreed and referenced in the 2011/2012 annual report and discussions with other equity partners have taken longer than previously expected due, in part, to delays in Government announcements on the detail of the support to be provided under the Renewables Obligation (RO) and uncertainty about the impact of the Government's Electricity Market Reform (EMR) programme on the future UK energy market.
The Company is currently engaged in advanced discussions with a number of potential equity investors, both financial and industrial, in respect of the Avonmouth project, and is working towards financial close and the start of construction of the Avonmouth project in the first half of 2014.
Southampton
We have now completed the initial statutory consultation on our Southampton project and the next steps on that project include the identification of heat customers that will allow the final preparation and submission to the Infrastructure Planning Directorate of an application for a Development Consent Order (DCO). The Company is awaiting further announcements from the Government on the new EMR regime which will govern the operation of the Southampton plant, once constructed.
General
The Company continues to explore further opportunities in the market and to work towards identifying a pipeline of future projects. We remain well positioned to build upon our previous successes and have the expertise and flexibility to deliver the Avonmouth and Southampton projects and to adapt as required to any changes in the market. We look forward to finalising the financing of the Avonmouth project during 2014 and to reporting on further progress at CoRDe.
Finally, on behalf of myself and the Board, I would like to thank all of our employees for their continuing hard work and tenacity.
John Seed
Chairman
Our Strategy
Helius was established to develop biomass energy projects using sustainably sourced fuel to help reduce climate change, by cutting the greenhouse gas emissions of energy production.
Our strategy is to identify, develop, own and operate biomass projects using established technologies and sustainably sourced fuels. The Helius team has extensive knowledge of the UK renewable energy market, technologies and the consenting process and uses this knowledge and experience to identify and realise opportunities for new projects.
Our goal for all projects is to ensure that a competitive design is achieved for each plant with a sustainable and competitive fuel source, which will maximise project returns while mitigating operational and performance risk and minimizing emissions.
Since the Company's inception in 2005, and admission to AIM in 2007, the Helius team has secured consent for 170MW(e) of biomass capacity in the UK, successfully sold a 65MW(e) project to RWE and secured financing for a 7.2MW(e) project in Scotland which was built on time and within the expected budget and is now in commercial operation. The Company is now focused on delivering value from its consented 100MW(e) site in Avonmouth, as well as securing additional consents for Southampton and possibly other sites.
Our business model
-- Secure sites for the development of biomass energy projects;
-- develop projects to the point of financial close at our own risk and using our own capital;
-- recruit third party debt and equity to fund construction of projects;
-- at financial close of each project, recover our development costs plus a margin (to provide cash for further development and corporate overheads) and negotiate a 'retained or carried interest' in each project to provide future dividend income to the Company; and
-- deliver ongoing income from management services agreements with each project company.
Political and legislative environment
The Renewables Obligation Order (RO) has provided underpinning support for renewable electricity projects since 2002. Whilst support under the RO will remain in place until 2037 for accredited plant, it will not be available for new project accreditations after 31 March 2017. During 2013, changes in the level of support, for dedicated biomass projects were confirmed, with a reduction in support from 1.5 Renewable Obligation Certificates (ROCs) /MWh to 1.4ROCs/MWh from 1 April 2016. The Department of Energy and Climate Change (DECC) also announced that deployment of new dedicated biomass power stations, without Combined Heat & Power (CHP), would be subject to a non legislative cap of 400MW(e) capacity.
DECC has continued to develop its new approach to support for low carbon electricity, known as "Electricity Market Reform" (EMR). This will introduce a new form of price support in the form of a feed in tariff delivered by a "Contract for Difference" (CFD), which will replace the RO as the support mechanism for renewable electricity technologies. As part of the EMR, DECC has announced a level of support, in the form of a CFD, for dedicated biomass plants, but only if they involve a heat offtake and qualify as a CHP plant.
The Avonmouth project will be supported under the Renewables Obligation and is expected to fall within the cap of 400MW on new biomass capacity without CHP. The Southampton project is planned as a CHP project and will be eligible to seek support under the new CFD regime. Future projects will also need to qualify as CHP projects if they are to secure support under the CFD regime.
The Company plays an active role in the Government's consultations on changes to legislation, and carefully considers any impacts on its strategy and business model.
Business review
CoRDe Project
The construction of the CoRDe plant is complete and the project entered commercial operation in July 2013. The project is operating in line with the expectations set out in our original business plan and is exporting around 6.8MW(e) of electricity to the grid. Each month the plant processes around 47,000 tonnes of distillery residues producing around 2,200 tonnes of pot ale syrup for distribution into the animal feed market. All of these activities allow the plant to generate revenues of around GBP1m per month depending on electricity and animal feed prices.
During the period, the Company received management service income of GBP0.3m from the project and will continue to receive income of GBP0.2m per annum, with adjustments for RPI. In the short amount of time that the plant has been in operation, no profits were recognised as production has been ramping up and start up costs have been incurred. Subject to profits being generated and available for distribution, the Company expects to receive income from its shareholding in the future.
The plant is operating in line with the original plan, generating revenues of c. GBP1m per month. Operating costs during December and January were slightly higher than planned due to additional fuel costs as a consequence of distillery shut downs, meaning the plant had to procure additional wood fuel. February performance was generally in line with plan, and the outlook for March 2014 onwards is generally in line with expectations.
Avonmouth Project
The Avonmouth project is sited within the Avonmouth dock area of Bristol port. The site has excellent transport links that will enable the delivery of fuel to the power station and it is envisaged a large proportion of these supplies will be delivered by ship across the quay. The plant could use up to 850,000 tonnes of sustainably sourced, solid, biomass fuel per annum to generate at 100MW(e) export capacity, delivering over 0.76TWh per year of electricity, enough to power approximately 200,000 homes. The Company has agreed commercial terms for materials handling with Bristol Port, and has secured a grid connection.
In March 2010, the project was granted consent and deemed planning permission by the Secretary of State for Energy pursuant to Section 36 of the Electricity Act 1989 (as amended by the Utilities Act 2000). The Company has negotiated contracts for the construction and long term fuel supply requirements of the plant. The company has received a number of offers for the long term off-take of electricity, ROCs and other products generated by the plant and is working to appoint a preferred equity partner. The Company is working with a club of lenders on a senior project finance facility and lender due diligence is at an advanced stage.
At the end of the reporting period, the Company had incurred costs of GBP8.3m on the project, and it is confident that it will secure a development fee to recover these costs, and any future development costs incurred to achieve financial close, as well as retaining some form of long term interest in the profits generated by the project. The Company also expects to sign management service agreements with the project at the point of financial close that will provide income during both the construction and operational phases.
It has taken longer than expected to complete the financing of the Avonmouth project. However, the Company is currently engaged in advanced discussions with a number of potential equity investors and is working towards financial close and the start of construction on the project in the first half of 2014.
Southampton Project
The Southampton project is based in an industrial area within Southampton port. The project is designed to achieve around 100MW(e) export capacity and investigations are underway for the possible use of heat supply to local industrial, commercial and residential developments.
The majority of the fuel will be delivered to the plant by sea through the Port of Southampton with some locally sourced fuel being delivered to the site by road.
Public consultation in respect of this project commenced in February 2011. There was a high level of local interest in the proposed scheme. Taking account of the feedback from the local community we prepared an amended scheme which was the subject of a second public consultation during 2012. The Company is awaiting confirmation of further detail in respect of the Government's Electricity Market Reform regime, which will govern the project. It is expected that a full application to the Infrastructure Planning Directorate for a Development Consent Order will be made once the detail of that regime is better understood.
Project Portfolio
The Company is currently in discussions with a number of UK site owners regarding future sites for the development of biomass projects. The intention is to secure sites that will enable the commencement of development of capacity within the next two years. The Company intends to avoid making significant cost commitments to new sites until the Avonmouth project is financed and a development fee generated and received. The Directors have reviewed the recoverability of costs in respect of all projects and made adjustments to carrying values where necessary.
Financial Position and Key Performance Indicators
During the financial year the Company expended GBP5.1 million of cash through its operating and investing activities (2012 GBP4.8m). This was made up of GBP2.1 million (2012 GBP1.6m) of corporate and administration costs (operating activities including movements in working capital) and GBP3.0 million (2012 GBP3.2m) of project development costs (investing activities). The primary focus for this expenditure was the progression of the Avonmouth and Southampton projects. Cash and short-term deposits held by the Company as at 30 September 2013 were GBP2.4 million. Future working capital is expected to be provided from development fees secured from the Avonmouth project at financial close.
The nature of the Group's development programme means that the timing of funds generated from developments is difficult to predict. Management have prepared financial forecasts to estimate the likely cash requirements of the Company over the next twelve months. The forecasts include certain assumptions with regard to the costs of ongoing development projects, overheads and the timing and amount of any funds generated from development fees on the Avonmouth project reaching financial close.
The Directors expect that additional funds will be generated in the form of development fees from the Avonmouth project at the point of financial close and that the funds from those development fees will provide sufficient working capital to the Group for the foreseeable future.
The Company is working towards financial close and the start of construction of the Avonmouth project in the first half of the calendar year 2014. In the event that it becomes apparent that the Avonmouth project will not reach financial close, or will reach financial close later than expected during the period, the Group will need to seek to secure additional funding from other sources in order to meet its ongoing working capital requirements. For these reasons the directors have prepared the financial statements on a going concern basis.
The Directors continue to review sources of finance although at the time of the approval of the financial statements there are no agreements in place. Should financial close not be achieved and if the Group is unable to secure additional funding, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that may be required if the Company was unable to continue as a going concern.
Key financial highlights
Income statement 2013 2012
GBP'000 GBP'000
--------------------------------------------- --------- ----------
Revenue (management service agreements) 277 310
Cost of sales (246) (269)
Administrative costs including share based
payments (1,349) (1,753)
Impairment of the earn out asset - (8,800)
Project impairments - (1,087)
Operating loss (1,318) (11,599)
Net finance (expense)/ income (14) 762
Share of post tax loss from joint venture (105) (4)
--------------------------------------------- --------- ----------
Loss for the period (1,437) (10,841)
--------------------------------------------- --------- ----------
As a requirement of the project finance facility, the CoRDe joint venture company entered into hedging agreements for foreign currency and interest rates in order to mitigate any risk associated with volatility in those rates. The Group has recognised its share of the movement in the fair value of the hedging agreements in the period to 30 September 2013 which was a gain of GBP1.2m (2012: a loss of GBP0.8m) in the consolidated statement of total comprehensive income. The loss from the Joint Venture of GBP105k shown above reflects the costs associated with start up of the plant, a delay in the receipt of initial distiller residues, caused by the distillery industry summer shutdown, and the ramp-up of the plant to full commercial operation.
The following milestones were achieved during the year:
-- Construction of the CoRDe project completed on time and on budget -- Management service income of GBP277k arising from services provided to the CoRDe project -- CoRDe plant entered commercial operation
-- Material progress on the detailed negotiations for Avonmouth equipment supply, construction and fuel supply contracts
-- Administrative cost reductions delivered
-- Her Majesty's Treasury announced that the Avonmouth project has been pre-qualified for an Infrastructure Guarantee
-- A secondary placing of GBP5.6m providing additional working capital for the group
Principal risks and uncertainties
The Company is exposed to a number of risks and uncertainties:
1. Those risks associated with delivery of the business model
1.1 Project development risks
Site evaluation and procurement
Securing sites for the development of Biomass power plants is a key requirement in further developing the business. This relies upon the ability of the Company to locate, evaluate, select, develop and realise appropriate opportunities, and to be able to negotiate and complete land agreements and related access and connection agreements at a cost that allows profitable projects to be developed. The Company manages these risks by continually reviewing a large number of sites in the UK such that it is not focused on any one particular landowner or location. It also maintains relationships with land agents and large port organisations, both of which give access to potential sites.
Planning and development consent
Once a site is secured, a planning and development consent is sought, together with any other necessary permits to allow a biomass power station to be constructed and operated. During this stage of the process the Company is exposed to the following specific risks:
-- consents may be subject to delays beyond the Company's control, which may subsequently cause the project to be delayed or aborted. There are no guarantees that any or all of the necessary consents will be granted;
-- consents granted may be subject to conditions that affect the economic or operational viability of the proposed project. These could in turn impact the Company's ability to raise project finance, or reduce the value of a project in the case of a sale;
-- delays or onerous planning conditions may lead to additional unforeseen costs which the Company may need to raise finance for;
-- consenting costs incurred are capitalised as development projects in progress in the financial statements. In the event that a project fails to secure consent, or consent is successfully appealed there is a risk that the carrying value would be subject to impairment; and
-- legislative changes may influence the acceptability of the site or the economic viability of the project.
The Company manages these risks through securing sites on which it believes it can secure planning and development consent, employing suitably qualified and significantly experienced staff to manage the consenting process and ensure compliance with latest legislation, as well as ensuring maximum engagement of local authorities and interested stakeholders from a very early stage.
The Company has significant experience of securing planning consents for Power Stations and knowledge of the important criteria involved and, at the reporting date, has a 100% success rate of securing consents where applications have been submitted. The Company uses this experience when selecting sites for development.
Contract negotiation
This stage of the development process involves the negotiation of contracts for the construction of the plant, the sale of electricity and related products produced by the plant, the procurement of fuel for the plant and the operation of the plant. This stage begins during the early stages of planning and development and concludes at the point of financial close. During this stage the Company is exposed to the following specific risks in addition to those outlined above:
-- the ability to secure fixed price contracts for the construction of each power plant with the required level of guarantees that allow project finance to be secured;
-- the availability of feedstock for each project is affected by various factors, including carbon footprint, sustainability, water usage, pests (and related phytosanitary restrictions), shipping availability and labour shortages;
-- significant changes to inflation impacting the costs of building and operating biomass plants and therefore the profitability of plants;
-- foreign sourced supplies are subject to additional risks that may disrupt markets, including the risk of war, terrorism, civil disturbances, embargo and political risks; and
-- The ability to secure long term Power Purchase Agreements with minimum price guarantees required by project finance providers in order to secure senior debt for projects.
The Company manages these risks through soliciting bids from a number of different suppliers for the equipment required to construct the plant, the feedstock required to fuel the plant and any other materials or equipment required to ensure the plant can operate profitably. This approach ensures that the project is not unnecessarily exposed to any one supplier, geographical location, currency, shipping route or political regime and also ensures competitive tension is maintained throughout the negotiation phase, thus providing risk mitigation against price and contract terms in the event that one supplier cannot meet the conditions required by the project and ensures a final contract structure which can attract project finance in the financial close stage.
Financial close
This stage relates to the crystallisation of the project into the construction stage. This may involve either the sale of the project, in whole or part, or securing project financing enabling the project to be constructed. During this stage the Company is exposed to the following additional risks:
-- changes to the subsidy regime for renewable electricity, currently the Renewables Obligation legislation, if such a change caused uncertainty that prevented project finance from being secured, or significantly reduced the amount of debt that could be secured;
-- the general availability of finance to fund the construction of power plants, and the levels of lending that can be secured;
-- changes to interest rates which may impact the cost of financing biomass power projects;
-- the ability to secure equity on acceptable terms for the construction of projects once debt is in place;
-- depressed market for the sale of projects, leading to low prices or no willing buyers; and
-- the recovery of any retained equity or contractual interests outside of the control of the Company.
1.2 Construction risks
This stage is reached once financing, both debt and equity, is secure and all project contracts are entered into.
During this stage the Company is exposed to the following specific risks:
-- cost overruns by contractors or claims made may result in a need for additional equity or debt funding;
-- delays to the construction programme leading to higher than planned interest charges during the construction programme and may delay the commencement of operating cash flows to fund the Company's ongoing activities;
-- failure of the completed plant to operate as planned; and
-- supplier insolvency.
The Company seeks to mitigate these risks through the negotiation of fixed price contracts with reputable contractors and by ensuring that financing plans include adequate levels of contingency to accommodate cost overruns. Additionally, the Company seeks to appoint an owner's engineer with significant experience to oversee the project programme once construction commences.
The Company does not currently have any projects in construction.
1.3 Operational risks
The CoRDe Project entered into commercial operation in 2013. It represents the Group's first ongoing revenue and cash generating asset. During operation, the CoRDe Project will be exposed to a number of risks which could impact on the revenue from the project, including (without limitation):
-- unplanned outages due to break-down or force majeure;
-- the completed plant failing to perform to the required levels;
-- supplier default or insolvency; and
-- failure of the plant to comply with EU, UK and/or local environmental and health and safety laws and regulations which could result in civil or criminal liability, the limitation, suspension or termination of operations, the imposition of clean-up costs, fines or penalties or large expenditures, which may adversely affect the Group's business, results from operations or financial condition.
These risks will be mitigated through the application by the CoRDe Project of good operational practices and procedures, through the appointment and retention of appropriately qualified staff and management to oversee the operation and maintenance of the plant, and through arrangements with the distillers to mitigate events that may lead to a reduced processing capability.
2. General risks
Liquidity
The cash requirements of the Company are forecast by the Board annually in advance and reviewed monthly by management, enabling the Company's cash requirements to be anticipated. The cash forecast includes assumptions with respect to the timing of planning consents and financial close of projects. Significant delays in these expected timings may lead to a requirement for additional cash. Additional funding will be sought, either directly or through partners for the construction of power stations.
Electricity and biomass market
The Company's plans are exposed to electricity and biomass market price risk through variations in the wholesale price of electricity and biomass material. Currently the Company has not entered into any forward contracts to fix prices of these commodities. The directors will continue to monitor the benefit of entering into such contracts.
Political and legislative risk
The Company is exposed to adverse changes in legislation that may affect the income for a biomass power plant. The directors monitor possible changes to legislation and where possible engage in the Government's consultation processes to safeguard the Company's interests. Projected project revenues could be affected by changes to the renewable electricity legislation including, for example: the number of Renewable Obligation Certificates awarded per MWh of generation under the Renewable Obligation; or the value of contracts for difference as proposed under Electricity Market Reform legislation. Any negative changes to these projected revenues could affect the ability of the Company to secure debt and equity for projects. So too could the method chosen by the Government to allocate Contracts for Difference within the limits set by the "Levy Control Framework", which limits the amount to be spent in subsidies for low carbon electricity. The change to the legislative regime, confining future support for dedicated biomass plant to those with associated CHP, has been noted above.
Sustainability
The Company is a responsible and ethical company and is totally committed to being a sustainable business but is exposed to legislative risks associated with sustainability regulations and related compliance. The directors monitor possible changes to legislation and where possible engage in the consultation process to safeguard the Company's interests. The company's sustainability strategy is designed to ensure ecological, social and climate change impacts are minimised, particularly in its feedstock procurement, to ensure the business exceeds UK and EU targets associated with these areas.
Staff retention
The Company believes that its future success will greatly depend upon the expertise and continued services of certain key executives and technical personnel including, in particular, the executive directors and key senior managers. To ensure key staff are retained the Company benchmarks remuneration levels of key staff against similar positions in other listed companies and has put in place share option and long term incentive plan (LTIP) schemes linked to project performance
Consolidated income statement
As at 30 September 2013
Year ended Year ended
30 September 30 September
2013 2012
Note GBP GBP
-------------------------------------------------------- ------- -------------- --------------
Revenue [4] 276,949 309,713
Cost of sales (246,355) (269,104)
----------------------------------------------------------------- -------------- --------------
Gross profit 30,594 40,609
----------------------------------------------------------------- -------------- --------------
Other administrative expenses (1,348,791) (1,753,215)
Impairment of property, plant and equipment [11] - (1,086,491)
Total administrative expenses (1,348,791) (2,839,706)
Impairment of the earn-out receivable [13] - (8,800,000)
Operating loss [5] (1,318,197) (11,599,097)
Net Finance (expense)/income [7] (14,108) 761,830
Share of post-tax loss from joint venture [15] (105,036) (3,875)
-------------------------------------------------------- ------- -------------- --------------
Loss before tax (1,437,341) (10,841,142)
Tax expense [8] - -
-------------------------------------------------------- ------- -------------- --------------
Loss for the year attributable to equity holders
of the parent company (1,437,341) (10,841,142)
----------------------------------------------------------------- -------------- --------------
Basic loss per share attributable to equity holders
of the parent company (pence) [9] (0.89) (8.34)
Diluted loss per share attributable to equity holders
of the parent company (pence) [9] (0.89) (8.34)
-------------------------------------------------------- ------- -------------- --------------
Consolidated statement of total comprehensive income
As at 30 September 2013 Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
----------------------------------------------------- ------- --------------- ----------------
Loss for the year attributable to equity
holders of the parent company (1,437,341) (10,841,142)
Other comprehensive income net of tax - -
Share of other comprehensive income, net
of tax, from Joint Venture [15] 1,216,801 (818,862)
----------------------------------------------------- ------- --------------- ----------------
Total comprehensive loss for the year attributable
to equity holders of the parent company (220,540) (11,660,004)
-------------------------------------------------------------- --------------- ----------------
The other comprehensive income from Joint Venture which relates to the share of movements in cash flow hedges in Helius CoRDe Limited may be reclassified to the profit or loss section of the income statement in the future.
Consolidated statement of financial position
As at 30 September 2013
Year ended Year ended
30 September 30 September
2013 2012
Note GBP GBP
--------------------------------------------- ------- -------------- --------------
Non-current assets
Property, plant and equipment [11] 12,274,890 9,292,890
Investment in joint venture [15] 8,154,972 7,043,207
--------------------------------------------- ------- -------------- --------------
Total non-current assets 20,429,862 16,336,097
------------------------------------------------------ -------------- --------------
Current assets
Trade and other receivables [16] 1,076,462 662,360
Cash and cash equivalents 2,431,174 1,969,784
------------------------------------------------------ -------------- --------------
Total current assets 3,507,636 2,632,144
------------------------------------------------------ -------------- --------------
Total assets 23,937,498 18,968,241
------------------------------------------------------ -------------- --------------
Current liabilities
Trade and other payables [17] (538,543) (996,392)
--------------------------------------------- ------- -------------- --------------
Total current liabilities (538,543) (996,392)
------------------------------------------------------ -------------- --------------
Total liabilities (538,543) (996,392)
------------------------------------------------------ -------------- --------------
Total net assets 23,398,955 17,971,849
------------------------------------------------------ -------------- --------------
Total capital and reserves attributable to
equity holders of the parent company
Share capital [18] 1,828,100 1,328,537
Share premium reserve [18] 16,681,756 11,563,076
Capital redemption reserve [18] 10,130 10,130
Merger reserve [18] 410,833 410,833
Cash flow hedge reserve [18] (2,119,649) (3,336,450)
Retained earnings [18] 6,587,785 7,995,723
--------------------------------------------- ------- -------------- --------------
Total equity 23,398,955 17,971,849
------------------------------------------------------ -------------- --------------
Consolidated statement of cash flows
For the year ended 30 September 2013 Year ended Year ended
30 September 30 September
2013 2012
Note GBP GBP
------------------------------------------------------ ------- -------------- --------------
Operating activities
Loss for the year (1,437,341) (10,841,142)
Impairment of property, plant and equipment [11] - 1,086,491
Depreciation 29,377 36,349
Finance income [7] (3,341) (761,830)
Finance expense [7] 17,449 -
Share of post-tax loss from joint venture [15] 105,036 3,875
Share option costs 29,403 108,410
Impairment of the earn-out receivable [13] - 8,800,000
Cash flow from operations before changes in working
capital (1,259,417) (1,567,847)
Increase in trade and other receivables (414,102) (304,806)
(Decrease)/Increase in trade and other payables (457,849) 262,314
--------------------------------------------------------------- -------------- --------------
Total changes in working capital (871,951) (42,492)
--------------------------------------------------------------- -------------- --------------
Net cash used in operating activities (2,131,368) (1,610,339)
Investing activities
Investment in development projects in progress [11] (3,011,377) (3,642,801)
Cash received from earn-out deed of amendment [13] - 400,000
Interest received [7] 3,341 22,395
------------------------------------------------------ ------- -------------- --------------
Net cash used in investing activities (3,008,036) (3,220,406)
Financing activities
Interest paid and finance expenses (17,449) -
Share issue 5,618,243 6,245,656
Net cash from financing activities 5,600,794 6,245,656
--------------------------------------------------------------- -------------- --------------
Net increase in cash and cash equivalents 461,390 1,414,911
Cash and cash equivalents at the beginning of the
year 1,969,784 554,873
--------------------------------------------------------------- -------------- --------------
Cash and cash equivalents at the end of the year 2,431,174 1,969,784
--------------------------------------------------------------- -------------- --------------
Consolidated statement of changes in equity
For the year ended 30 September 2013
Capital
redemption Share Share Merger Cash flow Retained
hedge
reserve capital premium reserve reserve earnings Total
2012 GBP GBP GBP GBP GBP GBP GBP
------------------- ------------ ----------- ------------ --------- ------------- -------------- --------------
Changes in equity
At 1 October 2011 10,130 915,742 5,730,215 410,833 (2,517,588) 18,728,455 23,277,787
Loss for the year - - - - - (10,841,142) (10,841,142)
Other
comprehensive
income - - - - (818,862) - (818,862)
------------------- ------------ ----------- ------------ --------- ------------- -------------- --------------
Total
comprehensive
loss for the
year - - - - (818,862) (10,841,142) (11,660,004)
------------------- ------------ ----------- ------------ --------- ------------- -------------- --------------
Issue of share
capital - 412,795 6,141,921 - - - 6,554,716
Capital raised
costs - - (309,060) - - - (309,060)
Share-based
payments - - - - - 108,410 108,410
At 30 September
2012 10,130 1,328,537 11,563,076 410,833 (3,336,450) 7,995,723 17,971,849
------------------- ------------ ----------- ------------ --------- ------------- -------------- --------------
Capital
redemption Share Share Merger Cash flow Retained
hedge
reserve capital premium reserve reserve earnings Total
2013 GBP GBP GBP GBP GBP GBP GBP
--------------------- ------------ ----------- ------------ --------- ------------- ------------- -------------
Changes in equity
At 1 October 2012 10,130 1,328,537 11,563,076 410,833 (3,336,450) 7,995,723 17,971,849
Loss for the year - - - - - (1,437,341) (1,437,341)
Other comprehensive
income - - - - 1,216,801 - 1,216,801
--------------------- ------------ ----------- ------------ --------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - - 1,216,801 (1,437,341) (220,540)
--------------------- ------------ ----------- ------------ --------- ------------- ------------- -------------
Issue of share
capital - 499,563 5,495,199 - - - 5,994,762
Capital raised
costs - - (376,519) - - - (376,519)
Share-based
payments - - - - - 29,403 29,403
At 30 September
2013 10,130 1,828,100 16,681,756 410,833 (2,119,649) 6,587,785 23,398,955
--------------------- ------------ ----------- ------------ --------- ------------- ------------- -------------
The cash flow hedge reserve relates to the share of the movements of the cash flow hedges in the Helius CoRDe Ltd, a joint venture. Further details are provided in note 15.
1. Accounting policies
Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC Interpretations issued by the International Accounting Standards Board ("IASB") as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS. The Group has elected to prepare its parent company financial statements in accordance with UK GAAP.
The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 30 September 2012 or 30 September 2013 within the meaning of section 435 of the Companies Act 2006, but is derived from those accounts. Statutory accounts for the year ended 30 September 2012 have been delivered to the Registrar of Companies and those for 30 September 2013 will be delivered following the Company's Annual General Meeting. The reports of the auditors for the years ended 30 September 2012 and 30 September 2013 did not contain statements under s498(2) or (3) of the Companies Act 2006. Their report for the year ended 30 September 2013 includes reference to the material uncertainty in respect of the Group requiring additional funds to continue with its activities and its planned development program which the auditors drew attention to by way of emphasis of matter without qualifying their report.
Going concern
The financial statements have been prepared on the going concern basis which assumes that the Group will have sufficient funds available to enable it to continue to trade for the foreseeable future.
The nature of the Group's development programme means that the timing of funds generated from developments is difficult to predict. Management have prepared financial forecasts to estimate the likely cash requirements of the Company over the next twelve months. The forecasts include certain assumptions with regard to the costs of ongoing development projects, overheads and the timing and amount of any funds generated from development fees on the Avonmouth project reaching financial close.
The Directors expect that additional funds will be generated in the form of development fees from the Avonmouth project at the point of financial close and that the funds from those development fees will provide sufficient working capital to the Group for the foreseeable future.
The Company is working towards financial close and the start of construction of the Avonmouth project in the first half of the calendar year 2014. In the event that it becomes apparent that the Avonmouth project will not reach financial close, or will reach financial close later than expected during the period, the Group will need to seek to secure additional funding from other sources in order to meet its ongoing working capital requirements. For these reasons the directors have prepared the financial statements on a going concern basis.
The Directors continue to review sources of finance although at the time of the approval of the financial statements there are no agreements in place. Should financial close not be achieved and if the Group is unable to secure additional funding, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that may be required if the Company was unable to continue as a going concern.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. Intercompany transactions and balances between Group companies are therefore eliminated in full as at 30 September 2013.
The consolidated financial statements incorporate the results of Helius Energy plc and all of its subsidiary undertakings as at 30 September 2013, using the acquisition or merger method of accounting as required. Where the acquisition method is used, the results of the subsidiary undertakings are included from the date of acquisition.
On 9 June 2006 Helius Energy plc entered into a share for share exchange agreements with the shareholders of Helius Power Limited, whereby Helius Energy plc acquired the entire share capital of Helius Power Limited, the consideration being satisfied by the allotment of ordinary shares in Helius Energy plc to the shareholders of Helius Power Limited.
As this transaction is outside the scope of IFRS 3 and in the absence of any relevant guidance under International Financial Reporting Standards, the acquisition has been accounted for as a Company reconstruction as permitted under UK Financial Reporting Standard 6, the most relevant accounting treatment that can be applied to the situation.
Under merger accounting the acquisition has been accounted for as though the Company, as currently constituted, has been in place for the whole of the period covered by these financial statements. As such, the results have been presented as though Helius Power Limited and its subsidiary company had always been part of Helius Energy plc.
Joint ventures are those entities over whose activities the Company has joint control established by contractual agreement. Interests in joint ventures through which the Company carries on its business are classified as jointly controlled entities and accounted for using the equity method. This involves recording the investment initially at cost and then in subsequent periods adjusting the carrying amount of the investment to reflect the Company's share of the joint venture's results.
Gains and losses on transactions between the Company and its joint ventures are eliminated to the extent of the Company's interest in the joint venture.
Changes in accounting policies
(a) New standards, amendments to published standards and interpretations to existing standards effective in the year ended 30 September 2013 adopted by the Company:
-- Amendments to IAS 1.This amendment requires companies to group together items within Other Comprehensive Income that may be reclassified to the profit or loss section of the income statement. This is a disclosure amendment and has no impact on the results or net assets of the Company
(b) Standards, interpretations and amendments to published standards that are effective but not relevant:
The following standards, amendments and interpretations to published standards are mandatory for accounting periods beginning on or after 1 January 2013 or later periods but are currently not relevant to the Company's operations:
-- IAS 19 Employee Benefits.
-- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine.
-- IFRS 1 Government Loans.
-- IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters
-- IFRS 7 Disclosures-Offsetting Financial Assets & Liabilities
-- IFRIC 21 This is an Interpretation of IAS 37 Provisions
(c) Standards, amendments and interpretations to published standards not yet effective and not adopted early by the Company
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Company's accounting periods beginning on or after 1 January 2013 or later periods and which the Company has decided not to adopt early. Management are currently assessing the impact of these standards, amendments and interpretations.
-- IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. The new standard replaces the consolidation requirements in SIC-12 Consolidation - Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements.
-- IFRS 11 Joint Arrangements. The principle in IFRS 11 is that a party to a joint arrangement recognises its rights and obligations arising from the arrangement rather than focussing on the legal form. There will no longer be an option to use proportionate consolidation. The new standard supersedes IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities - Non-monetary Contributions by Venturers.
-- IFRS 12 Disclosure of Interests in Other Entities includes the disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. The standard requires a reporting entity to disclose information that helps users to assess the nature and financial effects of the reporting entity's relationship with other entities.
-- IFRS 13 defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. The standard applies, except in some specified cases (e.g. share-based payments) when other IFRSs require or permit fair value measurements.
-- Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets. This Amendment provides a presumption that recovery of the carrying amount of the asset will, normally be, through sale.
-- IAS27 contains accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. The Standard requires an entity preparing separate financial statements to account for those investments at cost or in accordance with the applicable financial instruments standard (i.e. IAS 39 or IFRS 9).
-- IAS 28 now includes the required accounting for joint ventures as well as the definition and required accounting for associates. Equity accounting is required in consolidated or individual financial statements for both of these types of investment unless the investing group is a venture capital organisation, mutual fund, unit trust or similar entity in which case the entity may account for those investments in accordance with the applicable financial instruments standard. Proportionate consolidation is no longer an option for joint ventures.
-- Annual improvements to IFRS. Improvements in this amendment clarify the requirements of IFRS and eliminate inconsistencies within and between standards. The changes include amendments to:
o IFRS 1 'First-time Adoption of International Financial Reporting Standards'.
o IAS 1 'Presentation of Financial Statements'
o IAS 16 'Property, plant and equipment'.
o IAS 32 'Presentation of Financial Statements'.
-- Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12). The amendments clarify the transition guidance in IFRS10, IFRS11 and IFRS12, limiting the requirement to provide adjusted comparative information to only preceding comparative period.
Changes in accounting policies continued
-- Amendment to IAS 32 which seeks to clarify rather than to change the off-setting requirements to financial assets & financial liabilities previously set out in IAS 32 .
-- Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). The exception means that investment entities will be able to measure all of their investments at fair value using the requirements in IFRS.
-- IFRS 9: Financial Instruments. IFRS9 will eventually replace IAS 39 in its entirety.
-- Amendment to IAS 36. This narrow-scope amendment addresses the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.
-- Amendments to IAS 39 This narrow-scope amendment to IAS 39 will allow hedge accounting to continue, if specific conditions are met.
Revenue recognition
Revenue for the Group is measured at the fair value of the consideration received or receivable. Revenue comprises the amounts receivable for management services provided net of value added tax.
Management services are provided for monthly contracted amounts with any additional services resulting in additional charges.
Impairment of non-financial assets
Intangible and other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit (the lowest group of assets in which the asset belongs for which there are separately identifiable cash flows).
Impairment charges are included in the administrative expenses line item in the consolidated income statement, except to the extent they reverse gains previously recognised in the consolidated statement of recognised income and expense.
Foreign currencies
Transactions entered into by Company entities in a currency other than the currency of the primary economic environment in which they operate (their "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated income statement.
On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the balance sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in equity (the "foreign exchange reserve").
Financial assets
The Company classifies all of its financial assets as loans and receivables as discussed below. The Company has not classified any of its financial assets as held to maturity.
Loans and receivables: these assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method.
The Company's receivables comprise and other receivables in the Consolidated Statement of Financial Position.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of six months or less and bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the balance sheet.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Company will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
1. Accounting policies continued
Financial liabilities
The Company classifies its financial liabilities as other financial liabilities which include the following items:
-- bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding; and
-- trade payables, other borrowings and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
Hedge accounting
Hedge accounting is only applicable for transactions undertaken in Helius CoRDe Limited, the joint venture entity. No additional hedging transactions have been undertaken in the Group in the year ended 30 September 2013. Hedge accounting is applied to financial assets and financial liabilities where all of the following criteria are met:
-- At the inception of the hedge there is formal designation and documentation of the hedging relationship and the Group's risk management objective and strategy for undertaking the hedge.
-- For cash flow hedges, the hedged item in a forecast transaction is highly probable and presents an exposure to variations in cash flows that could ultimately affect profit or loss.
-- The cumulative change in the fair value of the hedging instrument is expected to be between 80-125% of the cumulative change in the fair value or cash flows of the hedged item attributable to the risk hedged (i.e. it is expected to be highly effective).
-- The effectiveness of the hedge can be reliably measured.
-- The hedge remains highly effective on each date tested. Effectiveness is tested quarterly.
Cash flow hedges
The effective part of forward contracts designated as a hedge of the variability in cash flows of foreign currency risk arising from firm commitments, and highly probable forecast transactions, are measured at fair value with changes in fair value recognised in other comprehensive income and accumulated in the cash flow hedge reserve. The effective portion of gains and losses on derivatives used to manage cash flow interest rate risk (such as floating to fixed interest rate swaps) are also recognised in other comprehensive income and accumulated in the cash flow hedge reserve.
The joint venture has adopted the basis adjustment where the hedge of a forecast transaction results in a non-financial asset, whereby associated gains and losses recognised directly inequity are included in the initial cost of the non-financial asset.
Under the equity method of accounting for the joint venture in Helius CoRDe Limited, the share of the changes in fair values recognised in other comprehensive income in relation to cash flow hedges are reflected in the consolidated statement of comprehensive income.
Where the hedging designation is revoked the cumulative gain or loss on the hedging instrument recognised directly in equity when the hedge was effective remains in equity until the forecast transaction occurs.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future costs of dismantling and removing items. The corresponding liability is recognised within provisions.
Office equipment - 25% per annum straight-line Computer equipment - 25% per annum straight-line
Development projects in progress (included within Property, plant and equipment)
Development projects in progress are assets arising from the project development phase of internal projects. The project development phase covers costs incurred from the point at which the Company secures a site, or an agreement for the purchase or lease of a site, through to the point at which the project can either be sold, or finance is secured for construction of the project and the construction phase starts. During this phase costs are incurred in securing planning consent and negotiating the suite of contracts required that will enable project finance to be secured, and allow the Company to build, own and operate a power plant.
These costs are treated as development projects in progress and capitalised if the Group can demonstrate all of the following:
a) there is a strong probability that any planning application for the site will be successful;
b) the technical feasibility of completing the asset so that it will be available for use or sale;
c) its intention and ability to obtain economic benefit through its use or sale;
d) the extent and nature of the future economic benefits. Among other things the Company must demonstrate the existence of a market for the output of the asset and a fuel supply that will deliver an appropriate financial return;
e) the availability and probability of obtaining appropriate technical and other resources to complete the development and to use or sell the asset;
f) the availability of project finance, or the existence of a market for the project to be sold; and
g) its ability to measure reliably the expenditure attributable to the asset during the development phase.
Development projects in progress continued
In accordance with IAS 36, the Company is required to test these assets for impairment by comparing their recoverable amount with their carrying amount, annually and whenever there is an indication that the asset may be impaired.
The Company tests these assets for impairment by reference to a project model which takes all of the expected income streams and costs of both building and operating a plant and calculates the expected profitability of the plant through its lifetime operation. Based on this measure, the Company is able to make an assessment of the ability to secure finance to construct the plant or, alternatively can make an assessment as to its potential sale value prior to construction. In the event and to the extent that the Company believes the project will be unable to attract finance or, sold to a third party the costs will be impaired.
Development projects in progress are not depreciated until they have been completed and have been commissioned for use within the Company.
Leased assets
Where substantially all of the risks and rewards incidental to ownership of a leased asset are not transferred to the Group (an "operating lease"), the total rentals payable under the lease are charged to the consolidated income statement on a straight-line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.
Retirement benefits: defined contribution schemes
Contributions to defined contribution pension schemes are charged to the income statement in the year to which they relate.
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of the grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored in to the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for the failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the income statement is charged with the fair value of goods and services received.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs to its tax base, except for differences arising on:
-- the initial recognition of goodwill;
-- goodwill for which amortisation is not tax deductible;
-- the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and
-- investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
-- the same taxable company; or
-- different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.
Business segments
The Chief Operating Decision Maker is defined as the executive directors.
The Board considers that the Company's project activity constitutes one operating and reporting segment, as defined under IFRS 8. The Board reviews the performance of the Company by reference to total results against budget.
The total profit measures are operating loss and loss for the year, both disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by the Board and the figures in the Company financial statements.
All of the revenues generated relate to management service agreements and are wholly generated within the UK. Accordingly there are no additional disclosures provided to the primary statements.
2. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions 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.
(a) Earn-out receivable (see note 13)
The Company was notified by RWE Innogy in September 2012 that RWE Innogy wished to revert to the original earn-out provisions of the 2008 sale and purchase agreement in respect of the Stallingborough project. The board considered carefully the valuation of the earn out entitlement and consider that there is such uncertainty in the key assumptions used in the original terms of contract that currently the present value of estimated future cash flows is considered to be GBPnil for the purposes of valuation at 30(th) September 2012, hence an impairement of GBP8.8m has been booked, see note 13. There have been no further developments with respect to this project in the reporting period.
(b) Development projects in progress
Development projects in progress are assets arising from the development phase of internal projects. These are recognised if the Company can demonstrate all of the following:
a) there is a strong probability that any planning application for the site will be successful;
b) the technical feasibility of completing the asset so that it will be available for use or sale;
c) its intention and ability to complete the asset and obtain economic benefit through its use or sale;
d) the extent and nature of the future economic benefits. Among other things the Company must demonstrate the existence of a market for the output of the asset and the availability of fuel that will deliver an appropriate financial return;
e) the availability and probability of obtaining appropriate technical and other resources to complete the development and to use or sell the asset;
f) the availability of project finance, or the existence of a market for the project if sold; and
g) its ability to measure reliably the expenditure attributable to the asset during the development phase.
In accordance with IAS 36, the Company is required to test these assets for impairment by comparing their recoverable amount with their carrying amount, annually and whenever there is an indication that the asset may be impaired.
Development projects in progress are not depreciated until they have been completed and have been commissioned for use within the Company.
There is a risk that if the market conditions or underlying project assumptions change, such that the forecast project returns are no longer deemed to be sufficient either in part or in total to justify the continued development of the project, then the carrying value of the asset may be written down, or written off in the future. The risks associated with the development projects in progress as at 30 September 2013 are detailed further in note 11.
(c) Share-based payment
The Company has two equity-settled share-based schemes for employees and an LTIP scheme. Employee services received, and the corresponding increase in equity, are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options and LTIPs are estimated by using the Black-Scholes model on the date of grant based on certain assumptions. Those assumptions are described in note 20 and include, among others, expected volatility, expected life of the options and number of options expected to vest. Should different assumptions be used then the fair value of the options would be different. Where vesting conditions exist for share options, the Board reviews progress against these vesting conditions annually and reviews the estimated date of financial close of projects which will impact the financial statements. In the event that milestones conditions are not met it is anticipated that certain options will lapse.
(d) Deferred tax assets
Deferred tax assets are only recognised when there is a reasonable anticipation that the Company will make profits in the foreseeable future against which the accumulated tax losses can be utilised.
3. Financial instruments - risk management
Financial instruments
The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows:
-- Financial assets
-- Trade and other receivables
-- Cash and cash equivalents
-- Financial liabilities
o Trade and other payables
To the extent financial instruments are not carried at fair value in the consolidated balance sheet, book value approximates to fair value at 30 September 2012 and 30 September 2013.
Loans and receivables are stated on an amortised cost basis with any changes to valuation being charged/credited to the consolidated statement of comprehensive income in the relevant period.
Trade and other receivables are measured at book value. Book values are reviewed by the Board and any impairment charged to the consolidated statement of comprehensive income in the relevant period.
Cash and cash equivalents are held in sterling and placed on deposit with UK banks.
Trade and other payables are measured at book value.
Capital management
The Company's capital is made up of share capital, share premium, capital redemption reserve, merger reserve, cash flow hedge reserve and retained earnings totalling GBP23.4 million at 30 September 2013 (2012: GBP18.0 million).
The Company's objectives when maintaining capital are:
-- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and
-- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
The Company is reporting a GBP1,437,341 loss for the period ended 30 September 2013. The directors have recommended that no dividends will be payable for the period (2012: nil).
At a General meeting on 6 March 2013 a resolution was passed to raise approximately GBP6.0 million (gross), GBP5.6m (net) by way of a firm placing and open offer of New Ordinary Shares at 12 pence per share. Admission of the 49,956,349 new ordinary shares to trading on AIM occurred on 7 March 2013.
At a General meeting on 21 October 2011 a resolution was passed to raise approximately GBP6.55 million (gross), GBP6.24million (net) by way of a placing of New Ordinary Shares at 16 pence per share. Admission of the 40,946,142 new ordinary shares to trading on AIM occurred on 26 October 2011. All other shares issued in the year ended 2012 were for share options exercised.
3. Financial instruments - risk management continued
The Company is exposed through its operations to the following key risks:
Market price risk
The Company is exposed to risk of variations in the wholesale price of electricity and biofuel material when assessing the financial viability of planned projects. Currently the Company has not entered into any forward contracts to fix prices of these commodities. The directors will continue to monitor the benefit of entering into such contracts.
Foreign currency risk
Foreign currency fluctuations will impact both the cost of construction and potentially fuel for biomass plants.
Credit risk
Credit risk is the risk of financial loss to the Company when a financial instrument due under contract is not received.
At 30 September 2013the Company is exposed to credit risk associated with the earn-out entitlement included within the Sale and Purchase Agreement for the sale of the Stallingborough project. In the year ending September 2012 the earn-out asset was impaired to GBPnil due to objective evidence of the significant delay in payments under the agreement. While the earn-out is valued at GBPnil in the financial statements, the Company is still entitled to receive payments under the terms of the original earn out provisions in the event the plant is built. The payment is guaranteed by the parent company of RWE in the UK. As such, management considers this to be a low credit risk to the Company.
In addition to the financial instruments used by the Company as outlined above, the Company's Joint Venture investment also uses foreign currency and interest rate hedging instruments in order to mitigate foreign currency and interest rate risk in the construction of assets as required under the project finance facility.
The instruments are designated as fair value through profit and loss, measured at fair value and are categorised at Level 1 in the fair value hierarchy. Further details are provided in Note 15.
4. Revenue recognition
Revenue in 2013 represents income arising from the Management Services Agreements with The Combination of Rothes Distillers' (CORD) and Helius CoRDe Ltd a joint venture in which the Company holds 50% plus 1 share. The revenue recognised in 2013 from the joint venture was GBP208,755 (2012: GBP219,416) and GBP68,194(2012: GBP90,297) from The Combination of Rothes Distillers'.
5. Loss from operations
This has been arrived at after charging: Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
------------------------------------------- -------------- --------------
Staff costs 1,791,721 1,882,780
Depreciation 29,377 36,349
Auditors
Audit fees 37,000 37,500
Other taxation services 6,250 9,100
All other services 2,515 6,817
Operating lease expense - property 115,909 115,909
------------------------------------------- -------------- --------------
6. Staff costs
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
---------------------------------------------- -------------- --------------
Staff costs (including directors) comprise:
Wages and salaries 1,447,894 1,552,012
Social security costs 182,705 195,995
Defined contribution pension costs 86,055 94,081
Health scheme 35,067 30,692
Bonus 40,000 10,000
---------------------------------------------- -------------- --------------
1,791,721 1,882,780
---------------------------------------------- -------------- --------------
2012 - the average number of employees (including directors) during the period was 21.
2013 - the average number of employees (including directors) during the period was 20.
Included in other creditors at 30 September 2013 is GBP10,977 (30 September 2012: GBP12,502) of pension contributions unpaid at that date.
6. Staff costs continued
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
--------------------------------------------------- -------------- --------------
Directors' remuneration, included in staff
costs
Salaries 726,500 740,874
Company contributions to private pension schemes 44,000 45,639
Bonus - -
Health scheme 9,240 7,691
--------------------------------------------------- -------------- --------------
779,740 794,204
--------------------------------------------------- -------------- --------------
Details of all directors' remuneration, including the remuneration of the highest paid director, for the year ended 30 September 2013 are listed in the directors' report.
7. Finance income and expenses
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
------------------------------------------------------------- -------------- --------------
Finance income
Bank interest receivable 3,341 22,395
Unwinding of discount from the sale of the Stallingborough
project - 739,435
------------------------------------------------------------- -------------- --------------
finance income recognised in profit or loss 3,341 761,830
------------------------------------------------------------- -------------- --------------
Finance expenses
------------------------------------------------------------- -------------- --------------
Loan interest payable (2,449) -
------------------------------------------------------------- -------------- --------------
Finance fee (15,000) -
------------------------------------------------------------- -------------- --------------
finance expenses recognised in profit or loss (17,449) -
------------------------------------------------------------- -------------- --------------
8. Tax expense
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
--------------------------------------------------- -------------- --------------
Current tax expense
UK corporation tax - -
--------------------------------------------------- -------------- --------------
- -
--------------------------------------------------- -------------- --------------
Deferred tax expense
Origination and reversal of temporary differences - -
--------------------------------------------------- -------------- --------------
Total tax charge - -
--------------------------------------------------- -------------- --------------
The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the UK applied to losses for the period are as follows:
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
--------------------------------------------------- -------------- --------------
(Loss)/profit before tax (1,437,341) (10,841,142)
Expected tax charge based on the standard rate
of corporation tax in the UK of 23.5%
(prior year 25%) (337,775) (2,710,286)
Expenses not allowable for tax 25,452 2,078,724
Other tax differences 4,292 8,682
(Utilisation)/increase in losses 308,031 634,130
Allowable deduction on exercise of share options - (11,250)
--------------------------------------------------- -------------- --------------
Total tax charge for the period - -
--------------------------------------------------- -------------- --------------
The Group has tax losses carried forward of approximately GBP12,729,000 for the year ended 30 September 2013 and approximately GBP12,108,000 for 30 September 2012. These can be set off against future trading profits. No deferred tax asset has been recognised in the accounts in respect of these losses as there is not likely, in the foreseeable future, taxable profits available against which the unused tax loss can be utilised.
9. Loss per share
The calculation of the earnings per share is based on the following data:
Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
----------------------------------------------------- -------------- --------------
Loss
Loss used in calculating basic and diluted loss (1,437,341) (10,841,142)
----------------------------------------------------- -------------- --------------
Number of shares
Weighted average number of ordinary shares for the
purpose of basic loss per share 161,321,909 129,958,110
Effect of employee share options - -
Weighted average number of ordinary shares for the
purpose of diluted loss per share 161,321,909 129,958,110
----------------------------------------------------- -------------- --------------
The bonus effect of options was excluded from the number of shares used in the diluted EPS calculation for 2013 and 2012 as those options were antidilutive.
10. Dividends
No dividends were declared in the period.
11. Property, plant and equipment
Computer Development
and office Projects
equipment in progress Total
GBP GBP GBP
----------------------------------- ------------ ------------- -------------
Cost or valuation
Balance at 1 October 2011 158,917 6,700,263 6,859,180
Additions 2,155 3,640,646 3,642,801
Disposals (21,611) - (21,611)
Impairment - (1,086,491) (1,086,491)
Balance at 30 September 2012 139,461 9,254,418 9,393,879
----------------------------------- ------------ ------------- -------------
Balance at 1 October 2012 139,461 9,254,418 9,393,879
Additions 6,213 3,005,164 3,011,377
Disposals (31,061) - (31,061)
Impairment - - -
Balance at 30 September 2013 114,613 12,259,582 12,374,195
----------------------------------- ------------ ------------- -------------
Accumulated depreciation
Balance at 1 October 2011 86,251 - 86,251
Depreciation charge for the year 36,349 - 36,349
Depreciation on disposals (21,611) - (21,611)
----------------------------------- ------------ ------------- -------------
Balance at 30 September 2012 100,989 - 100,989
----------------------------------- ------------ ------------- -------------
Balance at 1 October 2012 100,989 - 100,989
Depreciation charge for the year 29,377 - 29,377
Depreciation on disposals (31,061) - (31,061)
----------------------------------- ------------ ------------- -------------
Balance at 30 September 2013 99,305 - 99,305
----------------------------------- ------------ ------------- -------------
Net book value
At 30 September 2013 15,308 12,259,582 12,274,890
----------------------------------- ------------ ------------- -------------
At 30 September 2012 38,472 9,254,418 9,292,890
----------------------------------- ------------ ------------- -------------
The impairment of development projects in progress in 2012 relates to costs ofequipment for the Veolia agreement signed in 2008. The Company had been working with Veolia on securing projects that would facilitate the recovery of these costs through agreements with third parties to process liquid bi-products. Unfortunately these activities failed to lead to any firm contracts. In arriving at the impaired value it was assumed that there was no value recoverable.
11. Property, plant and equipment continued
The GBP12.3 million balance of development projects in progress at 30 September 2013 can be further analysed as follows:
2013 2012
GBP GBP
------------------------------------------------------- ------------ -----------
Projects in the "planning and development consent"
stage 3,981,438 3,320,211
Projects in the "contract negotiation" or "financial
close" stage 8,278,144 5,934,207
------------------------------------------------------- ------------ -----------
12,259,582 9,254,418
------------------------------------------------------- ------------ -----------
The projects in the planning and development consent stage are:
-- The Southampton project where the Company expects to make a planning application in 2014; and
Projects in the contract negotiation or financial close stage are:
-- The Avonmouth project. In March 2010, the Avonmouth project which was awarded deemed planning consent pursuant to the Electricity Act 1989 (as amended by the Utilities Act 2000) and is currently in the development phase. Bids have been obtained for the equipment required to build the plant and negotiations are underway to secure the fuel required for the plant. The Company expect to achieve financial close in 2014 and secure a development fee in excess of development costs incurred.
12. Intangible fixed assets
Patents
GBP
------------------------------ ---------
Cost
At 1 October 2012 900,000
Additions during the period -
------------------------------ ---------
At 30 September 2013 900,000
------------------------------ ---------
Provision for impairment
At 1 October 2012 900,000
Provision -
------------------------------ ---------
At 30 September 2013 900,000
------------------------------ ---------
Net book value
At 30 September 2013 -
------------------------------ ---------
At 30 September 2012 -
------------------------------ ---------
Due to the management time required for the development of further projects the Board, during 2007, anticipated that no time would be allocated to the application of certain patents held. As a result no revenue streams are expected to be generated from these patents for the foreseeable future therefore the carrying value of GBP900,000 was fully impaired during 2007. The Board considers the treatment to be appropriate at 30 September 2013.
13. Loans and receivables
Sale of the Stallingborough project
During the year ending 30 September 2008, Helius Energy plc disposed of the Stallingborough project, otherwise referred to as Helius Energy Alpha Ltd ("Alpha") to RWE Innogy (UK) Ltd ("RWE"). Alpha contains the rights to planning permission and IP associated with the construction of a 65MWe biomass powered energy generation plant at a site in Stallingborough in the north of England. The transaction included a cash payment of GBP28.1 million and a deferred amount of consideration, payable through an earn-out arrangement equal to 13% of the post-tax profits generated by the project during its first 24 years of commercial operation.
13. Loans and receivables continued
At 30 September 2009 the directors reviewed the carrying value of the earn-out in light of expected changes in cash flows relating to the long-term forecast for electricity prices, the latest 20 year forecast for LIBOR, exchange rate impact on construction costs and a delayed date for commercial start up of the power plant and payments under the earn-out agreement. This review was carried out by Helius Energy plc and was not formally agreed with RWE. This review gave a revised carrying value of GBP12,298,000.
Deed of amendment to earn-out arrangement
During the September 2010 financial year, the Company was involved in extensive negotiations with RWE for a Deed of Amendment to the original earn-out arrangement. The Deed outlined that in the event that construction contracts were awarded later than September 2011, additional payments of GBP100,000 would become due for each quarter of delay.
The Board made the assumption that a total payment of GBP9,300,000 would be received from the Deed of Amendment, based on contracts being awarded by RWE in September 2012. This revised valuation was therefore made up of the GBP100,000 initial payment, GBP8,800,000 at the point of contracts being awarded and GBP400,000 of delay payments. The original effective interest rate for the transaction of 9% had been applied to the payments.
The Company was notified by RWE Innogy in September 2012 that RWE Innogy wished to revert to the original earn-out provisions of the 2008 sale and purchase agreement in respect of the Stallingborough project. This was prior to the contracted reversion date of January 2013. The board considered that the revision provided objective evidence of significant delay of receipt of cash under the agreement and carried out an impairment review. Management considered that there was such uncertainty in the key assumptions used in the original terms of contract, in particular on the date of construction, that the present value of estimated future cash flows was considered to be GBPnil at 30(th) September 2012. The Board still considers the treatment to be appropriate at 30 September 2013.
GBP
--------------------------------------------------------------- -------------
Earn-out valuation as at 30 September 2011 8,460,565
Cash received from earn-out deed of amendment (400,000)
Unwinding of discount on September 2011 calculation (finance
income) 739,435
Impairment of the earn-out receivable (8,800,000)
--------------------------------------------------------------- -------------
Earn-out as at 30 September 2012 -
--------------------------------------------------------------- -------------
Earn-out as at 30 September 2013 -
--------------------------------------------------------------- -------------
14. Subsidiaries
The principal subsidiaries of the Company, all of which have been included in these consolidated financial statements, are as follows:
Ownership Ownership
as at as at
30 September 30 September
Name Country of incorporation 2013 2012
-------------------------- --------------------------- -------------- --------------
Helius Power Limited United Kingdom 100% 100%
Helius Energy Gamma
Ltd United Kingdom 100% 100%
Southampton Biomass
Power Ltd United Kingdom 100% 100%
Liverpool Biomass Power
Ltd United Kingdom 100% 100%
-------------------------- --------------------------- -------------- --------------
15. Investment in Joint Venture
As at 30 September 2010 Helius CoRDe Limited was accounted for as a subsidiary. On the 13 April 2011 the Company reached financial close on the CoRDe project securing GBP42.5million of debt funding from Lloyds Banking Group and the Royal Bank of Scotland plc, along with an equity investment for new shares in Helius CoRDe Limited of GBP9.3 million at project level by Rabo Project Equity BV. The result of the funding and introduction of a contractual arrangement between Helius Energy plc, Rabo Project Equity BV and The Combination of Rothes Distillers' Ltd was a loss of control and Helius Energy plc now holds 50% + 1 non-controlling share in a Joint Venture at an investment cost of GBP7.9 million. All strategic financial and operating decisions in Helius CoRDe Ltd require a super majority between the Company and Rabo Project Equity BV.
On consolidation the interest in the Joint Venture was initially measured at fair value, being GBP10.4 million. The fair value was calculated from the amounts paid by the joint venture partners for their stake in the CoRDe project. The difference between the cost of investment, being the net assets of the subsidiary prior to it becoming a joint venture and the fair value of the retained interest in the joint venture, was taken to the income statement as a gain of GBP2.5m on effective loss of control of a subsidiary during the year ended 30 September 2011.
The cost of investment in the joint venture was made up of a GBP4,947,981 cash payment and GBP2,904,648 development costs incurred which comprised the net assets of the subsidiary prior to loss of control.
Helius Energy plc values its shareholding in the joint venture initially at fair value, and then in subsequent periods, adjusts the carrying amount of the investment to reflect the company's share of the joint venture's results which include any comprehensive income relating to cashflow hedges.
2012
GBP
----------------------------------------------- -----------
Investment at 30 September 2011 7,865,944
Share of other comprehensive income in joint
ventures relating to cash flow hedges (818,862)
----------------------------------------------- -----------
Share of Loss (3,875)
----------------------------------------------- -----------
Investment at 30 September 2012 7,043,207
----------------------------------------------- -----------
2013
GBP
----------------------------------------------- -----------
Investment at 30 September 2012 7,043,207
Share of other comprehensive income in joint
ventures relating to cash flow hedges 1,216,801
----------------------------------------------- -----------
Share of Loss (105,036)
----------------------------------------------- -----------
Investment at 30 September 2013 8,154,972
----------------------------------------------- -----------
The Joint Venture, which is unlisted, results and assets/liabilities,are as follows:
Helius Helius PLC Helius CoRDe Helius PLC share
CoRDe Ltd share Ltd
30 Setember2013 30 September 30 September2012 30 September
2013 2012
------------------------- ----------------- -------------- ------------------ ------------------
Property, plant and
equipment 56,850,251 50% 45,639,956 50%
Other current assets 10,588,897 50% 2,534,984 50%
Long term assets - 50% - 50%
Current liabilities (8,660,865) 50% (5,826,119) 50%
Long term liabilities (41,033,840) 50% (24,394,307) 50%
Financial instruments
relating to cash flow
hedges (4,239,297) 50% (6,672,899) 50%
------------------------- ----------------- -------------- ------------------ ------------------
Loss (210,071) (105,036) (7,750) (3,875)
Other comprehensive
income relating to
cash flow hedges 2,433,602 1,216,801 (1,637,723) (818,862)
------------------------- ----------------- -------------- ------------------ ------------------
15. Investment in Joint Venture continued
As a requirement of the project finance facility, the CoRDe joint venture company entered into hedging agreements for foreign currency and interest rates in order to mitigate any risk associated with volatility in those rates. Hedge accounting has been applied to the instruments, with changes in the fair values of the effective portion of the instruments between reporting periods being taken through other comprehensive income statement of the Joint Venture. The Group has recognised its share of the movement in the period to 30 September 2013 of GBP1,216,801.
The hedging policy adopted by the project company is as follows:
Foreign currency
In order to ensure no variability in construction costs the project company entered a forward contract for 36,793,500 Euros on the 13 April 2011 at a rate of 1.1238. On the 30 September 2013 the bank provided a fair value of the outstanding portion of the forward contract and this analysis resulted in a total liability of GBP42k.This liability is recognised as a derivative financial liability in the balance sheet of the joint venture with the change in value in other comprehensive and will reduce to nil through the construction period with the benefit being recognised in the future reporting periods.
Interest rates
In order to mitigate changes in interest rates the project company entered a forward contract for 100% of interest charges through the construction period and 75% of the interest costs through the 12 year repayment period on the 13 April 2011 based on the forward LIBOR rate . The fixed rate leg of the swap is 4.26% against the floating LIBOR rate. On the 30 September 2013 the bank provided a fair value valuation on the outstanding portion of the forward contracts and this analysis resulted in a total liability of GBP4.2m.
During the year ended 30 September 2013 the construction and commissioning of the Combined Heat and Power plant and Evaporator plant was completed, and the plants were taken over by Helius CoRDe, having successfully passed their performance tests. The business is now in full operational and commercial operation. Forecasts for the input supply of distillery by-products are above expectations and output electricity and pot ale syrup sales volumes are being maximized around this. The directors are optimistic about the future performance of the business.
16. Trade and other receivables
2013 2012
GBP GBP
------------------------------ ----------- ---------
Trade and other receivables 70,201 105,141
Prepayments 1,006,261 557,219
------------------------------ ----------- ---------
1,076,462 662,360
------------------------------ ----------- ---------
No trade and other receivable balances are past due or impaired (2012: none).
17. Trade and other payables
2013 2012
GBP GBP
---------------------------------- --------- ---------
Trade creditors 89,295 553,671
Other taxes and social security 52,145 80,259
Accruals 397,103 362,462
---------------------------------- --------- ---------
538,543 996,392
---------------------------------- --------- ---------
In September 2012 the Company secured a GBP1,000,000 loan facility with Angus MacDonald a non-executive Director of Helius Energy plc. The Facility was subject to a one off arrangement fee of 1.5% and interest payments of 6% per annum on amounts drawn down. The Facility was available from 1st October 2012 and GBP500,000 was drawn-down against it. The facility was repaid in full and cancelled on 7th March 2013.
18. Share capital
Issued and fully paid
--------------------------
2013 2013
Number GBP
---------------------------------- ------------- -----------
Ordinary shares of GBP0.01 each
At 1 October 2012 132,853,633 1,328,537
Shares issued 49,956,349 499,563
---------------------------------- ------------- -----------
At 30 September 2013 182,809,982 1,828,100
---------------------------------- ------------- -----------
Issued and fully paid
--------------------------
2012 2012
Number GBP
---------------------------------- ------------- -----------
Ordinary shares of GBP0.01 each
At 1 October 2011 91,574,157 915,742
Shares issued 41,279,476 412,795
---------------------------------- ------------- -----------
At 30 September 2012 132,853,633 1,328,537
---------------------------------- ------------- -----------
At a General meeting on 6 March 2013 a resolution was passed to raise approximately GBP6.0 million (gross), GBP5.6m (net) by way of a firm placing and open offer of New Ordinary Shares at 12 pence per share. Admission of the 49,956,349 new ordinary shares to trading on AIM occurred on 7 March 2013.
At a General meeting on 21 October 2011 a resolution was passed to raise approximately GBP6.55 million (gross), GBP6.24million (net) by way of a placing of New Ordinary Shares at 16 pence per share. Admission of the 40,946,142 new ordinary shares to trading on AIM occurred on 26 October 2011. All other shares issued in the year ended 2012 were for share options exercised.
The following describes the nature and purpose of each reserve:
Reserve Description and purpose
---------------------------- -------------------------------------------------------
Share capital Amount subscribed for share capital at nominal
value
Share premium Amount subscribed for share in excess of nominal
value
Capital redemption reserve A reserve created for unissued shares as a result
of a buyback
Merger reserve A reserve created on the combinations of companies
within the Group
Cash flow hedge reserve A reserve created on recognition of the company's
share of the cash flow hedge movements from joint
ventures
Retained earnings Cumulative net profits recognised in the consolidated
income statement
---------------------------- -------------------------------------------------------
19. Leases
Operating leases - lessee
The Group leases its property. The total future value of minimum lease payments due as follows:
2013 2012
GBP GBP
---------------------------------------------------- --------- ---------
Not later than one year 127,500 127,500
Later than one year and not later than five years 510,000 510,000
Later than five years 223,125 350,625
---------------------------------------------------- --------- ---------
20. Share-based payment
Total share options and LTIPs granted under the Company's EMI, Unapproved and LTIP schemes are set out in the table below:
2013 2012
Weighted Weighted
Average 2013 average 2012
exercise Number exercise Number
price price
-------------------------------- ---------- ------------ ---------- ------------
Outstanding at beginning of
the year 14.8p 10,119,216 14.4p 10,501,550
Granted during the year - - - -
Exercised during the year - - 1.0p (333,334)
Expired during the year - - - -
Forfeited during the year 15.5p (661,000) 21.8p (49,000)
-------------------------------- ---------- ------------ ---------- ------------
Outstanding at the end of the
year 14.7p 9,458,216 14.8p 10,119,216
-------------------------------- ---------- ------------ ---------- ------------
These are made up of:
Exercisable at the end of the
year 13.9p 5,250,123 13.9p 5,501,123
Outstanding and subject to
vesting conditions
at the end of the year 15.6p 4,208,093 15.8p 4,618,093
-------------------------------- ---------- ------------ ---------- ------------
The weighted average share price when options were exercised during 2012 was 13.4 pence .
Equity settled share option schemes
EMI scheme
The Company operates an EMI approved scheme for executive directors and certain senior management. Under the EMI approved scheme, options vest if the market value of the shares is greater than 10% above the floatation price for a period of twelve months since admission to AIM. All of these options have vested.
The number of EMI shares exercisable, and outstanding, at the end of the year 30 September 2013 is 2,893,385, with a weighted average price of 14.5 pence.
The range of exercise prices of share options outstanding at 30 September 2013 are 2,498,748 with exercise price of 12.0 pence which must be exercised by November 2016 and 394,637 with an exercise price range of 30.0 pence to 34.0 pence which must be exercised by May 2017. When these shares will be exercised will depend upon the individuals' circumstances and market price of the shares.
2013 2012
Weighted Weighted
Average 2013 Average 2012
Total EMI share options exercise Number exercise Number
price price
-------------------------------- ---------- ----------- ---------- -----------
Outstanding at beginning of
the year 14.5p 2,893,385 14.5p 2,893,385
Granted during the year - - - -
Exercised during the year - - - -
Expired during the year - - - -
Forfeited during the year - - - -
-------------------------------- ---------- ----------- ---------- -----------
Outstanding at the end of the
year 14.5p 2,893,385 14.5p 2,893,385
-------------------------------- ---------- ----------- ---------- -----------
Exercisable at the end of the
year 14.5p 2,893,385 14.5p 2,893,385
-------------------------------- ---------- ----------- ---------- -----------
20. Share-based payment continued
Equity settled share option schemes continued
Unapproved scheme
The Company operates an unapproved scheme for non-executive directors' and retained consultants. Under the unapproved scheme, options vest if the market value of the shares is greater than 10% above the floatation price for a period of twelve months.
The number of unapproved shares exercisable, at the end of the year 30 September 2013 is 1,272,383, with a weighted average price of 21.2 pence.
The range of exercise prices of share options outstanding at 30 September 2012 are 629,166 with an exercise price of 12.0 pence which must be exercised by June 2016 and 643,217 with an exercise price range of 26.0 pence to 31.0 pence which must be exercised by April 2018. When these shares will be exercised will depend upon the individuals' circumstances and market price of the shares.
2013 2012
Weighted Weighted
Average 2013 Average 2012
Total unapproved share options exercise Number exercise Number
price price
------------------------------------- ---------- ------------ ---------- ------------
Outstanding at beginning of the
year 24.2p 4,317,831 24.2p 4,357,831
Granted during the year - - - -
Exercised during the year - - - -
Expired during the year - - - -
Forfeited during the year 20.0p (505,000) 26.5p (40,000)
------------------------------------- ---------- ------------ ---------- ------------
Outstanding at the end of the year 24.7p 3,812,831 24.2p 4,317,831
------------------------------------- ---------- ------------ ---------- ------------
These are made up of:
Exercisable at the end of the year 21.6p 1,399,405 20.4p 1,638,405
Outstanding and subject to vesting
conditions
at the end of the year 26.5p 2,413,426 26.5p 2,679,426
------------------------------------- ---------- ------------ ---------- ------------
There were 2,980,448 unapproved options granted to directors and employees as part of a performance incentive scheme in 2009; these vest and are exercisable upon achieving defined objectives. To 30 September 2013 440,000 of these shares have been forfeited and 127,022 remain of the shares vested in April 2011 upon reaching financial close of the CoRDe project. The exercise price of these shares is 26.5 pence which must be exercised by April 2019. When these shares will be exercised will depend upon the individuals' circumstances and market price of the shares.
The outstanding options vest as follows:
Vest on Vest on Vest on Vest on
financial financial financial financial
close of close of close of close of
large large small
Total outstanding options Avonmouth project project project
project 2 3 2
--------------------------- ------------ ------------ ------------ ------------
2,413,426 762,134 762,134 762,134 127,024
--------------------------- ------------ ------------ ------------ ------------
The Board assess progress against the above objectives on an annual basis and, when necessary, as a result of the difficulties in accurately predicting the timing of planning awards, makes changes to expected delivery dates for vesting and subsequent charge to the financial statements. In the event that the Board take the view that any of the above objectives cannot be delivered within the option period they will be removed with a corresponding adjustment to the share-based payment charge in the year of removal.
20. Share-based payment continued
Equity settled share option schemes continued
Long-term Incentive Plan
The Company implemented a Long-term Incentive Plan in June 2010. The shares awarded under this plan vest over a five year period and are subject to achievement of specific targets agreed with the Remuneration Committee on an annual basis.
There were 3,950,000 shares granted with an exercise price of 1.0 pence to directors' and employees as part of a Long-term Incentive Plan in 2010.As at 30 September 2013 1,794,667 remain not vested. These shares are all expected to be vested during 2014.
There were 957,333 LTIPs exercisable at 30 September 2013 which must be exercised by June 2015. When these shares will be exercised will depend upon the individuals' circumstances and market price of the shares.
2013 2012
Weighted Weighted
Average 2013 Average 2012
Total LTIPs exercise Number exercise Number
price price
------------------------------------- ---------- ------------ ---------- ------------
Outstanding at beginning of the
year 1.0p 2,908,000 1.0p 3,250,334
Granted during the year - - - -
Exercised during the year - - 1.0p (333,334)
Forfeited during the year 1.0p (156,000) 1.0p (9,000)
------------------------------------- ---------- ------------ ---------- ------------
Outstanding at the end of the year 1.0p 2,752,000 1.0p 2,908,000
------------------------------------- ---------- ------------ ---------- ------------
These are made up of:
------------------------------------- ---------- ------------ ---------- ------------
Exercisable at the end of the year 1.0p 957,333 1.0p 969,333
------------------------------------- ---------- ------------ ---------- ------------
Outstanding and subject to vesting
conditions
at the end of the year 1.0p 1,794,667 1.0p 1,938,667
------------------------------------- ---------- ------------ ---------- ------------
The outstanding LTIPs vest as follows:
Total outstanding LTIPs granted Vest 2014 --------------------------------- ----------- 1,938,667 1,794,667 --------------------------------- -----------
21. Related party transactions
Key management remuneration Year ended Year ended
30 September 30 September
2013 2012
GBP GBP
----------------------------------------------------- -------------- --------------
Short-term employee benefits (excluding employers
National Insurance contributions) 735,740 748,565
Payments into defined contribution pension schemes 44,000 45,639
Employers National Insurance contributions 90,558 97,178
----------------------------------------------------- -------------- --------------
Subtotal 870,298 891,382
----------------------------------------------------- -------------- --------------
Share-based payments 26,595 80,906
Total 896,893 972,288
----------------------------------------------------- -------------- --------------
In addition to the above related party transactions, revenue of GBP208,755 (2012: GBP219,416) is included in the consolidated statement of comprehensive income in relation to a management services agreement with the joint venture Helius CoRDe Ltd. Amounts owing by Helius CoRDe Ltd to Helius Energy plc at the 30 September 2013 were GBP24,396(2012: GBP19,174).
Alan Lyons, Director Helius Energy plc, is also the Chairman of Helius CoRDe Ltd.
In September 2012 the Company secured a GBP1,000,000 loan facility with Angus MacDonald a non-executive Director of Helius Energy plc. The Facility was subject to a one off arrangement fee of 1.5% and interest payments of 6% per annum on amounts drawn down. The Facility was available from 1st October 2012 and GBP500,000 was drawn down in January and February 2013. On the 7 March 2013 4,166,666 New Ordinary Shares at 12 pence per share were issued to the Director in repayment of the loan.
22. Control
There is no one controlling party. The Company is quoted on the London Alternative Investment Market
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFLTVTISIIS
1 Year Helius Eng Chart |
1 Month Helius Eng Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
