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