REG - Active Energy Group - Final Results <Origin Href="QuoteRef">AEGR.L</Origin> - Part 2
15/06/2016 07:06
- Part 2: For the preceding part double click ID:nRSO2055Ba
Issue of equity share capital, net of share issue costs 1,584,441 7,619
Convertible loan from shareholder - -
Unsecured loans raised 2,386,000 4,739,130
Finance expenses (137,619) (193,091)
Net cash inflow from financing activities 3,832,822 4,553,658
Net increase in cash and cash equivalents (1,294,120) 1,913,426
Cash and cash equivalents at beginning of the year 3,227,414 1,563,428
Exchange (losses)/gains on cash and cash equivalents (289,439) (249,440)
Cash and cash equivalents at end of the year 17 1,643,855 3,227,414
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
Share capital Share premium Merger reserve Foreign exchange reserve Own shares held reserve Convertible debt and warrant reserve Retained earnings
Total equity
US$ US$ US$ US$ US$ US$ US$ US$
At 31 December 2013 9,726,034 7,284,397 2,350,175 (73,571) (1,376,822) 956,348 (12,961,396) 5,905,165
-
Loss for the year - - - - - - (2,783,393) (2,783,393)
Other comprehensive income - - - (776) - - - (776)
Issue of share capital 48,293 59,867 - - - - - 108,160
Transfer of own shares held - - - - 147,192 - (147,192) -
Issue of convertible loan - - - - - 118,953 - 118,953
Share based payments - - - - - - 266,557 266,557
At 31 December 2014 9,774,327 7,344,264 2,350,175 (74,347) (1,229,630) 1,075,301 (15,625,424) 3,614,666
Loss for the year - - - - - - (5,701,819) (5,701,819)
Other comprehensive income - - - (38,082) - - - (38,082)
Issue of share capital 325,002 1,259,439 - - - - - 1,584,441
Share based payments - - - - - - 1,380,782 1,380,782
At 31 December 2015 10,099,329 8,603,703 2,350,175 (112,429) (1,229,630) 1,075,301 (19,946,461) 839,988
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Note 2015 2014
US$ US$
NON-CURRENT ASSETS
Intangible assets 9 103,762 -
Property, plant and equipment 10 943 1,650
Investment in subsidiaries 11 4,204,863 4,412,237
Investment in associate 12 2,077,463 797,767
Loan to joint venture partner 13 691,748 -
Available for sale financial assets 14 100,137 93,191
7,178,916 5,304,845
CURRENT ASSETS
Trade and other receivables 16 3,883,349 4,527,122
Cash and cash equivalents 17 43,335 136,993
3,926,684 4,664,115
TOTAL ASSETS 11,105,600 9,968,960
CURRENT LIABILITIES
Trade and other payables 18 795,079 542,982
Loans and borrowings 20 2,628,172 -
3,423,251 542,982
NON-CURRENT LIABILITIES
Loans and borrowings 20 2,866,597 4,353,462
2,866,597 4,353,462
TOTAL LIABILITIES 6,289,848 4,896,444
NET ASSETS 4,815,752 5,072,516
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital 21 10,099,329 9,774,327
Share premium 23 8,603,703 7,344,264
Merger reserve 23 2,350,175 2,350,175
Foreign exchange reserve 23 (399,473) (118,002)
Own shares held reserve 23 (1,229,630) (1,229,630)
Convertible debt and warrant reserve 23 1,075,301 1,075,301
Retained earnings 23 (15,683,653) (14,123,919)
TOTAL EQUITY 4,815,752 5,072,516
The financial statements were approved and authorised for issue by the Directors on 14 June 2016 and were signed on their
behalf by:
Director
Director
.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
Note 2015 2014
US$ US$
Cash outflow from operations 24 (574,288) (3,104,513)
Net cash outflow from operating activities (574,288) (3,104,513)
Cash flows from investing activities
Additions to intangible assets (103,762) -
Contribution to associate (1,279,696) (797,767)
Loan to joint venture partner (691,748) -
Purchase of property, plant and equipment - (2,100)
Finance income - 5,896
Net cash outflow from investing activities (2,075,206) (793,971)
Cash flows from financing activities
Issue of equity share capital, net of share issue costs 1,584,441 7,619
Convertible loan from shareholder - -
Unsecured loans raised 1,190,000 3,000,000
Finance expenses (137,619) (193,091)
Net cash inflow from financing activities 2,636,822 2,814,528
Net increase/(decrease) in cash and cash equivalents (12,672) (1,083,956)
Cash and cash equivalents at beginning of the year 136,993 1,226,951
Exchange (losses)/gains on cash and cash equivalents (80,986) (6,002)
Cash and cash equivalents at end of the year 17 43,335 136,993
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
Share capital Share premium Merger reserve Foreign exchange reserve Own shares held reserve Convertible debt and warrant reserve Retained earnings
Total equity
US$ US$ US$ US$ US$ US$ US$ US$
At 31 December 2013 9,726,034 7,284,397 2,350,175 175,722 (1,229,630) 956,348 (11,558,613) 7,704,433
-
Loss for the year - - - - - - (2,831,863) (2,831,863)
Other comprehensive income - - - (293,724) - - - (293,724)
Issue of share capital 48,293 59,867 - - - - - 108,160
Issue of convertible loan - - - - - 118,953 - 118,953
Share based payments - - - - - - 266,557 266,557
At 31 December 2014 9,774,327 7,344,264 2,350,175 (118,002) (1,229,630) 1,075,301 (14,123,919) 5,072,516
Loss for the year - - - - - - (2,940,516) (2,940,516)
Other comprehensive income - - - (281,471) - - - (281,471)
Issue of share capital 325,002 1,259,439 - - - - - 1,584,441
Share based payments - - - - - - 1,380,782 1,380,782
At 31 December 2015 10,099,329 8,603,703 2,350,175 (399,473) (1,229,630) 1,075,301 (15,683,653) 4,815,752
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1. ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted in preparation of the financial statements are set out below. The policies have
been consistently applied to all the years presented, unless otherwise stated.
Both the Company financial statements and the Group financial statements have been prepared and approved by the Directors
in accordance with International Financial Reporting Standards, International Accounting Standards and IFRIC
interpretations (collectively IFRS) as adopted by the European Union, and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial statements have been prepared on the historical
cost basis, as modified by the revaluation of property, plant and equipment, available for sale financial assets, and
financial assets and liabilities, including derivative financial instruments, at fair value through profit or loss.
The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates.
It also requires Group management to exercise judgment in the most appropriate application in applying the Group's
accounting policies. The areas where significant judgments and estimates have been made in preparing the financial
statements and their effect are disclosed in note 27.
Going concern
Based on the latest trading expectations and associated cash flow forecasts of the Group headed by Active Energy Group plc,
the Directors have considered the cash requirement for both the Group and the Company. In respect of the loans at the
year-end that fall due for repayment, the directors have either obtained confirmation from the lender that they will not
seek repayment until such time as the Group and Company are in a position to do so or are in advanced discussions to extend
the repayment date. In the event that the loans are not extended or if trading is at the low end of expectations there
could be a requirement for additional funding, but the directors are confident that they would be able to raise this as and
when required, particularly given the successful raising of finance to date. On this basis, the Directors believe that the
Group and Company will be able to meet their liabilities as they fall due for a period of at least 12 months from the date
of approval of these financial statements, and have therefore prepared the accounts on a going concern basis, however, the
directors recognise that obtaining adequate additional funding cannot be guaranteed and this is considered to be a material
uncertainty that may cast significant doubt over the Group's and Company's ability to continue as a going concern.
Standards, interpretations and amendments to existing standards
Interpretations and revised standards that are not yet effective and have not been early adopted by the Group
The following interpretations to existing standards have been published that are mandatory for the Group's future
accounting but which the Group has not adopted early. Management has not yet fully assessed the impact of these new
standards but does not believe they will have any material impact on the financial statements.
· IFRS 9: Financial Instruments - Replace IAS 39 in its entirety (from 1 January 2018)
· IFRS 14: Regulatory Deferral Accounts (from 1 January 2016)
· IFRS 15: Revenue from Contracts with Customers (from 1 January 2018)
· IFRS 16: Leases - Replace IAS 17 in its entirety (from 1 January 2019)
· IAS 1 (Amendment) - Presentation of financial statements - disclosure initiative amendments (from 1 January 2016)
· IAS 7 (Amendment) : Statement of cash flows - disclosure initiative amendments (from 1 January 2017)
· IAS 12 (Amendment) - Income taxes - Statement of cash flows - Recognition of Deferred Tax assets for unrealized
losses (from 1 January 2017)
· Annual improvements 2012 - 2014 cycles (from 1 January 2016)
Basis of consolidation
The financial information incorporates the results of the Company and entities controlled by the Company (its
subsidiaries). Control is achieved when the Group has power over relevant activities, is exposed, or has rights, to
variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. The consolidated financial statements present the financial results of the Company and its subsidiaries (the
Group) as if they formed a single entity. Where necessary, adjustments are made to the results of subsidiaries to bring the
accounting policies used into line with those used by the Group. All intra-Group transactions, balances, income and
expenses are eliminated on consolidation.
In the Company's statement of financial position, investments in subsidiaries are stated at cost less provisions for any
permanent diminution in value.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for
goods supplied, stated net of discounts and value added taxes. The Group recognises revenue when the following conditions
have been satisfied:
· the Group has transferred to the buyer the significant risks and rewards of ownership;
· the Group does not retain either the continuing managerial involvement normally associated with ownership or effective
control over the goods;
· the amount of revenue can be reliably measured;
· it is probable that the economic benefits associated with the transaction will flow to the Group; and
· the costs to be incurred in respect of the transaction can be reliably measured.
Goodwill and business combinations
On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair values at
the date of acquisition. Any excess of cost of acquisition over the fair values of the identifiable net assets acquired is
recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets
acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition.
When the consideration transferred by the Group in a business combination includes assets or liabilities from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part
of the consideration paid. Changes in the fair value of the consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments against goodwill.
Goodwill arising on consolidation is recognised as an intangible asset and reviewed for impairment at least annually by
comparing the carrying value of the asset to the recoverable amount. Any impairment is recognised immediately in profit or
loss and is not subsequently reversed.
Associates
Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another
entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial
position at cost. Subsequently associates are accounted for using the equity method, where the Group's share of
post-acquisition profits and losses and other comprehensive income is recognised in the consolidated statement of profit
and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless
there is an obligation to make good those losses).
Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of
unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from
these transactions is eliminated against the carrying value of the associate.
Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and
contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is
objective evidence that the investment in an associate has been impaired the carrying amount of the investment is tested
for impairment in the same way as other non-financial assets.
Joint arrangements
Profits and losses arising on transactions between the Group and its joint ventures are recognised only to the extent of
unrelated investors' interests in the joint venture. The investor's share in the associate's profits and losses resulting
from these transactions is eliminated against the carrying value of the associate. Any premium paid for an investment in a
joint venture above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities
acquired is capitalised and included in the carrying amount of the investment in joint venture. Where there is objective
evidence that the investment in a joint venture has been impaired the carrying amount of the investment is tested for
impairment in the same way as other non-financial assets.
The Group accounts for its interests joint operations by recognising its share of assets, liabilities, revenues and
expenses in accordance with its contractually conferred rights and obligations.
Impairment of non-financial assets (excluding inventories, investment properties and deferred tax
assets)
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at
the financial year end. 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 smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash
generating units ("CGUs"). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to
benefit from the synergies of the combination giving rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis
over their useful economic lives.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to
other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation
techniques (see note 27 related to critical estimates and judgements below).
The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost
of intangibles acquired in a business combination are as follows:
Intangible asset Useful economic life Valuation
method
Contractual relationships Term of contract Estimated
discounted
(49 years) cash flow
Property, plant and equipment
Property, plant and equipment is stated at cost or deemed cost less accumulated depreciation and any recognised impairment
loss. Cost includes the purchase price and all directly attributable costs.
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Plant and equipment - 2 to 10 years straight line
Furniture and office equipment - 2 to 5 years straight line
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost is
determined using the first-in, first-out (FIFO) method. Cost comprises all costs of purchase, costs of conversion and other
costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated
selling price in the ordinary course of business, less applicable selling expenses.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision maker has been identified as the management team including executive
Directors.
Financial instruments
The Group classifies its financial instruments into one of the categories discussed below, depending on the purpose for
which the asset was acquired. The Group has not classified any of its financial assets as held to maturity, or at fair
value through profit or loss.
The accounting policy for each category is as follows:
Loans and receivables
The Group's loans and receivables comprise trade and other receivables, loan to joint venture partner and cash and cash
equivalents in the statement of financial position. 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 assets. 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, less provision for impairment.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid
investments with original maturities of three months or less, and for the purpose of the statement of cash flows, bank
overdrafts.
Available for sale financial assets
Available for sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at fair value with changes in fair value
recognised in other comprehensive income. When available for sale financial assets are sold or impaired, the accumulated
fair value adjustments recognised in equity are transferred to the income statement. Dividends on available for sale equity
instruments are recognised in the income statement as part of other income when the Group's right to receive payments is
established.
Other financial liabilities
Other financial liabilities include the following items:
· Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of
the instrument. These 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
statement of financial position. The interest expense includes initial transaction costs and premiums payable on
redemption, as well as any interest or coupon payable while the liability is outstanding.
· Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules,
using tax rates enacted or substantively enacted by the year-end date.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated
statement of financial position differs from its tax base, except for differences arising on:
· the initial recognition of goodwill;
· 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 substantively enacted by the reporting date and are expected to apply when the deferred tax
liabilities/assets are settled/recovered.
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 group company; or
· different Group 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.
Foreign currencies
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary
economic environment in which they operate (their "functional currency"). The Company and Consolidated financial statements
are presented in United States Dollar ("US Dollar", "US$"), which is the Group's presentation currency as the Group's
products are ultimately linked to the US Dollar. The Company's functional currency is Pound Sterling.
Transactions entered into by Group entities in a currency other than 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 reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are
recognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into the Group's presentation currency, US Dollars, 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 reporting date.
Differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual
rate are recognised
Exchange differences recognised in the statement of comprehensive income of Group entities' separate financial statements
on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation
concerned are reclassified to the foreign exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating
to that operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part
of the profit or loss on disposal.
Convertible debt
The proceeds received on issue of the Group's convertible debt are allocated into their liability and equity components.
The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that
would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component
is accounted for as a financial liability measured at amortised cost until extinguished on conversion or maturity of the
bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt
reserve" within shareholders' equity, net of income tax effects.
Leased assets
Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the
Group (a "finance lease"), the asset is treated as if it had been purchased outright. The amount initially recognised as
an asset is the lower of the fair value of the leased property and the present value of the minimum lease payments payable
over the term of the lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed
between capital and interest. The interest element is charged to the consolidated income statement over the period of the
lease and is calculated so that it represents a constant proportion of the lease liability. The capital element reduces
the balance owed to the lessor.
Where substantially all of the risks and rewards incidental to ownership 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.
Share based payments
Where employees receive remuneration in the form of shares or share options, the fair value of the share-based employee
compensation arrangement at the date of the grant is recognised as an employee benefit expense in the consolidated income
statement.
The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value
(excluding the effect of non-market-based vesting conditions) at the date of the grant. The assumptions underlying the
number of awards expected to vest are subsequently adjusted for the effects of non-market-based vesting to reflect the
conditions prevailing at the year-end date. Fair value is measured by the use of a Black-Scholes and Monte Carlo model.
The expected life used in the model has been adjusted, based on management's best estimate, for the effects of the
non-transferability, exercise restrictions and behavioural considerations.
Where equity instruments are granted to persons other than employees, the consolidated income statement is charged with the
fair value of goods and services received, except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the
counterparty renders the service.
Own shares held
Consideration paid/received for the purchase/sale of shares held in escrow or in trust for the benefit of employees is
recognised directly in equity. The nominal value of such shares held is presented within the "own shares held" reserve. Any
excess of the consideration received on the sale of the shares over the weighted average cost of the shares sold is
credited to retained earnings.
Neither the purchase nor sale of own shares leads to a gain or loss being recognised in the Group consolidated income
statement.
Investment in subsidiaries
Investments in subsidiaries are stated at cost less provision for impairment in the Company financial statements.
2. SEGMENTAL INFORMATION
The Group reports three operating segments:
· 'MDF Wood Chip' denotes the Group's Medium---Density Fibreboard (MDF) wood chip processing and supply business
division.
· 'Forestry & Natural Resources' denotes the Group's initiatives to secure ownership of the entire timber supply chain
--- from forest to finished product
· 'BFE Fuel Solutions' denotes the Group's renewable Biomass for Energy fuel division, which engages in development of
second-generation BFE fuel solutions and systems
In line with the Group's strategy no revenue in relation BFE Wood Chip has been derived in the current year.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products. They are managed separately
because each business operates in different markets and locations.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive
Officer and the Group Finance Director.
Measurement of operating segment profit or loss
The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS
but excluding corporate overheads, non-recurring losses, such as goodwill impairment, the effects of share-based payments,
and joint venture profit and losses.
All assets and liabilities as at 31 December 2014 and 2015 and capital expenditure for the periods are inter-changeable
between the divisions of company and therefore are not reported to the chief decision maker. Accordingly no segmental
analysis has been presented in this regard.
This policy was applied consistently throughout the current and prior period.
2015 2015 2015
MDF Wood Chip Forestry & Natural Resources BFE Fuel Solutions Total
US$ US$ US$ US$
Total Revenue 24,377,516 - - 24,377,516
Operating segment profit(loss) (1,793,999) (664,107) - (2,458,106)
Finance costs (407,227) - - (407,227)
Segment loss before tax (2,201,226) (664,107) - (2,865,333)
Tax charge/ (credit) (241,721) 8,969 - (232,752)
-
Segment loss for the period (2,442,947) (655,138) - (3,098,085)
2014 2014 2014 2014 2014
MDF Wood Chip Biomass Wood Chip Forestry & Natural Resources BFE Fuel Solutions Total
US$ US$ US$ US$ US$
Total Revenue 17,395,499 5,929,464 - - 23,324,963
Operating segment profit(loss) 2,058,270 (367,694) (666,609) (300,535) 723,432
Finance costs (161,965) - - - (161,965)
Segment profit/(loss) before tax 1,896,305 (367,694) (666,609) (300,535) 561,467
Tax charge/ (credit) (91,851) (21,545) 35,235 - (78,161)
Segment profit/(loss) for the period 1,804,454 (389,239) (631,374) (300,535) 483,306
All Finance costs associated with the trading loan in AEG Trading limited are included within the MDF Wood Chip
reconciliation. All other finance cots relate to Group funding and are not allocated to an individual segment.
Reconciliation of reportable segment profit or loss, assets and liabilities to the Group's corresponding amounts are as
follows:
2015 2014
US$ US$
Total (loss)/profit from reportable segments (3,098,085) 483,306
Unallocated amount - corporate expenses (193,167) (2,098,564)
Unallocated amount - other income 150 7,981
Unallocated amount - finance income - 5,896
Unallocated amount - finance expense (1,029,935) (915,455)
Share based payments (1,380,782) (266,557)
Loss for the period (5,701,819) (2,783,393)
An analysis of external revenue (by location of customer) is given below:
2015 2014
US$ US$
Turkey 24,364,016 17,395,499
Italy - 5,929,464
Romania 13,500 -
24,377,516 23,324,963
An analysis of non-current assets by location of assets is given below:
2015 2014
US$ US$
United Kingdom 896,590 143,660
Ukraine 6,844,151 4,947,946
Canada 1,142,605 446,156
8,883,346 5,537,762
Revenue derived from a single external customer amounted to US$24,368,643 (2014: two external customers of US$10,972,729
and US$5,078,003 respectively), which were attributed to the MDF segment. In 2014, a further two external customers
generated revenue of US$3,489,158 and US$2,308,172 respectively, which were attributed to the Biomass segment.
3. REVENUE
The Group's revenue comprises:
2015 2014
Group US$ US$
Sale of goods 24,377,516 23,324,963
4. EMPLOYEE COSTS AND DIRECTORS
2015 2014
US$ US$
Group
Wages and salaries 1,159,606 1,116,681
Social security costs 109,802 129,783
1,269,408 1,246,464
Share based payments 1,380,782 266,557
2,650,190 1,513,021
The average monthly number of employees during the year was as follows:
2015 2014
Directors 4 4
Administration 15 15
Production 25 29
44 48
Directors' and key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Group. During the period these were considered to be the Directors of the Company.
2015 2014
US$ US$
Directors' emoluments 792,968 669,954
Compensation for the loss of office - 24,714
792,968 694,668
Social security costs - 2,427
Share based payments 1,323,982 266,557
2,116,950 963,652
The emoluments of the highest paid Director for the year, including non-cash share based payments,
5. OPERATING LOSS
Group 2015 2014
The loss before income tax is stated after charging/(crediting): US$ US$
Operating leases - premises 50,145 61,497
Operating leases - vehicles - 810
Operating leases - equipment 54,024 18,487
Amortisation of intangible assets 44,845 293,743
Depreciation - owned assets 277,035 127,778
Profit on disposal of fixed assets - (171)
Auditors' remuneration - parent company and consolidation 79,250 102,977
Auditors' remuneration - subsidiaries 9,250 -
Auditors' remuneration - taxation services 10,000 23,067
Share based payments 1,380,782 266,557
Foreign exchange (gains) (109,996) (192,191)
6. FINANCE INCOME AND COSTS
2015 2014
Group US$ US$
Finance income
Bank interest - 5,896
Finance costs
Bank interest 72 1,166
Imputed interest on convertible loan 137,547 220,638
Unsecured loan interest 312,484 298,525
Unsecured loan participation fee 407,227 161,965
Foreign exchange losses 579,832 395,126
1,437,162 1,077,420
7. INCOME TAX
2015 2014
Group US$ US$
Current tax
Overseas tax charge 241,721 113,396
Deferred tax
Reversal of temporary differences (8,969) (58,725)
Effect of tax rate change - 23,490
(8,969) (35,235)
Total income tax charge 232,752 78,161
Factors affecting the tax charge
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained
below:
2015 2014
US$ US$
Loss on ordinary activities before tax (5,469,067) (2,705,232)
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20% (2014: 21.5%) (1,093,813) (581,625)
Effects of:
Expenses non-deductible for tax purposes 1,299,707 518,243
Current year tax losses - 119,494
Overseas tax rate difference from UK rate 26,858 22,049
Total income tax charge 232,752 78,161
8. EARNINGS PER SHARE
Basic and diluted earnings per share is calculated by dividing the loss attributable to equity holders of the company of
US$5,701,819 (2014: US$2,783,393) by the weighted average number of ordinary shares in issue during the year, excluding own
shares held, of 554,421,785 (2014: 542,037,570).
At 31 December 2015, own shares held amounted to 77,500,000 (2014:77,500,000) ordinary shares. The weighted average number
of own shares held by the company during the year are not included in the weighted average ordinary shares in issue during
the financial year.
9. INTANGIBLE ASSETS
Group Goodwill Contractual Other intellectual property Total
relationships
US$ US$ US$ US$
Cost
At 31 December 2013, 2014 2,212,930 2,936,252 362 5,149,544
Additions - - 103,762 103,762
At 31 December 2015 2,212,930 2,936,252 104,124 5,253,306
Accumulated amortisation
At 31 December 2013 - 587,250 244 587,494
Charge for year - 293,625 118 293,743
At 31 December 2014 - 880,875 362 881,237
Charge for year - 44,845 - 44,845
At 31 December 2015 - 925,720 362 926,082
Net book value
At 31 December 2015 2,212,930 2,010,532 103,762 4,327,224
At 31 December 2014 2,212,930 2,055,377 - 4,268,307
Company Other intellectual property
US$
Cost
At 31 December 2013, 2014 -
Additions 103,762
At 31 December 2015 103,762
Accumulated amortisation
At 31 December 2013, 2014 and 2015 -
Net book value
At 31 December 2015 103,762
At 31 December 2014 -
Goodwill
Goodwill arose from the acquisition of Nikofeso and was considered to relate solely to the underlying business acquired
which is a single cash generating unit ("CGU"). The asset has been reviewed to ascertain if it has been impaired. The
review was based upon future income growth projections including further capital expenditure and the resultant cash
generated was discounted. The review used management's forecasts for years one to five and no growth thereafter and a
weighted cost of capital ("WACC") of 30%. No impairment was required. The projections were sensitised by both reducing
the revenue growth rate to 10% and increasing the WACC to 35% and this would still not result in an impairment to the
carrying value of the asset.
Contractual relationships
Contractual relationships comprise a supply contract granted by the Lyubomi Forestry, which is the administrator of the
Lyubomi Forest in the Ukraine. The remaining useful life on contractual relationships is assessed to be 49 years following
the extension of the contract term during the prior year.
Other intellectual property
The additions to other intellectual property during the year relates to an interest in intellectual property with Biomass
Energy Enhancement LLC as detailed in note 13.
10. PROPERTY, PLANT AND EQUIPMENT
Group Plant and Furniture and Total
equipment office equipment
US$ US$ US$
Cost
At 31 December 2013 226,481 24,759 251,240
Additions 702,655 25,741 728,396
Disposals (149,327) (388) (149,715)
Foreign exchange difference - (633) (633)
At 31 December 2014 779,809 49,479 829,288
Additions
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