TIDMALR
RNS Number : 5673Z
Alternative Energy Limited
12 December 2014
12 December 2014
ALTERNATIVE ENERGY LIMITED
("Alternative Energy" or "the Company")
Interim Results for the six month period to 30 June 2014
The Board of Alternative Energy Limited (AIM: ARL.L) announces
its Unaudited Interim Condensed Consolidated Financial Information
for the six month period from 1 January 2014 to 30 June 2014.
Chairman's Statement
The financial statements presented in this review are being
published at the same time as the delayed audited results for the
year ended 31 December 2013. As the Chairman's statement which I
prepared for those statements already deals with most of the issues
relating to the Company's business and prospects and the issues
which have given rise to the delayed publication of results I am
not proposing to repeat them here, but to focus on those matters
relevant specifically to the interim results.
The Board naturally regrets the delay in publishing the Annual
Results to 31 December 2013 and the Interim Results to 30 June
2014. The principle reason for the delay has been the valuation of
the Group's intellectual property. Our approach has been to model
the anticipated cashflows to arrive at an impairment in our
December 2013 Accounts of US$ 11.57 million (in addition to the
US$1.43 million amortisation principally of our US patents). The
resultant carrying value is also carried forward into these Interim
Results for the period ended 30 June 2014 less an additional
amortisation of US$0.72 million. However, due to the lack of sales
and demonstrable sales orders and in our view the impracticality
and lack of meaningfulness of commissioning a third party valuation
report, we have not been able to satisfy our auditors that there is
sufficient back-up for the ongoing carrying value of our
intellectual property. The Financial Statements are therefore
qualified solely as to the uncertainty of this issue.
The six months to 30 June 2014 was the period when the Company
had to formulate a fresh business plan following the delay of its
contracted Indonesian projects. For much of this time the Company's
shares were suspended whilst the Board reviewed the Company's
finances and options. This led to the Company signing its GBP 10
million convertible note program with Advance Capital Partners,
which was announced in March and revised in May.
The interim results themselves were due to be published by 30
September 2014, but the delays in the preparation of the 2013 year
end results meant that work on the interim results could not be
commenced until the year end results were finalised, and the
decision was taken to publish both sets of results at the same
time.
The Company is taking steps to avoid a repetition of the delays
experienced this year in publishing both its full year and interim
results. We are planning to augment our financial and accounting
team and we will be looking for a new financial controller and
finance director to ensure that the Company's next results, which
are to be published on or before 30 June next year, are published
in good time.
Notwithstanding that the Group showed little revenue in the six
month period, this does not mean that the team were not active, in
fact they were working very hard. Several surveys and a substantial
amount of work was done on the proposed Indonesian projects with Dr
Tay and Dr Goh travelling to remote potential solar farm sites and
then preparing feasibility studies for projects which are still
awaiting consent. In respect of the lighting, several tenders were
prepared and the Company sold its first street lights to our
Indonesian distributor - having developed a new and very
competitive Chip on Board (COB) streetlight for the Jakarta street
light tender. The huge effort by the team is in no way reflected by
the results, and the main benefit was to develop competitive
products in commercial situations which we are now in a position to
market on a wider basis.
With the benefit of this experience the team will be pressing to
complete the arrangements currently being negotiated in several new
jurisdictions, including the UK, and we hope to make announcements
of our progress following resumption of trading of the Company's
shares. The Company is also actively exploring whether revenues can
also be accelerated by acquisitive as well as organic growth.
Notwithstanding the very difficult period through which we have
just come through, for the first time in the Company's history the
Company has viable products both solar and lighting, for which
there appears to be a demand. Whilst the market remains very
competitive, by focus and innovation the Company hopes to earn
itself a place in the global green energy market.
It is now for the Company to push hard on the marketing of the
products it has started to sell. The benefit of the platform we
have established is that it is quickly scalable with little further
major capital spend required. Once the Company is able consistently
to sell three containers of street lights per month the Board
believes that these sales levels will underpin the valuation of the
Company and justify its years of research and development.
As I stated for the 2013 year end results the next few months
will be a critical period for the Company in order to survive and
move forward, but with the commencement of sales of products which
have succeeded in the face of international competition in a very
competitive market, we finally have something concrete to
promote.
We are also happy to report that we have now appointed Beaufort
Securities Limited as the Company's joint Broker (alongside
Beaumont Cornish our existing Nominated Adviser and joint Broker)
to help the Company in building a new profile in London.
For further information, please
contact:
Dr Eric Goh, Alternative Energy Tel: +65 6873 7782
Limited
Richard Lascelles, Alternative Tel: +44 (0) 20 7408 1067
Energy Limited
Roland Cornish / Emily Staples, Tel: +44 (0) 20 7628 3396
Beaumont Cornish Limited
REPORT ON REVIEW OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION OF ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARIES
FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2014
Introduction
We have reviewed the accompanying interim condensed consolidated
statement of financial position of Alternative Energy Limited (the
"Company") and its subsidiaries (the "Group") as of
30 June 2014 and the related interim condensed consolidated
statements of comprehensive income, changes in equity and cash
flows for the six-month period then ended, and explanatory notes.
Management is responsible for the preparation and presentation of
this interim condensed consolidated financial information in
accordance with IAS 34 Interim Financial Reporting. Our
responsibility is to express a conclusion on this interim condensed
consolidated financial information based on our review.
This report is made solely to the Board of Directors and we do
not accept or assume responsibility to any party other than the
Board of Directors, for our works, for this report, or for the
conclusion we have formed.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and, consequently, does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Basis for Qualified Conclusion
As at 30 June 2014, included in the consolidated statement of
financial position of the Group are intangible assets of
US$15,946,676. For the purpose of assessing impairment of the
Group's intangible assets, management has prepared a discounted
cash flow to determine the value in use of these assets based on
the discounted cash flow method disclosed in Note 9 to the
financial information. Management have prepared the discounted cash
flow method based on various assumptions including the ability to
secure various significant projects which are in preliminary stage
of discussion.
We are unable to obtain sufficient appropriate audit evidence
regarding the reasonableness and appropriateness of these
assumptions made (including the estimated amount of cash inflows
that would be generated from certain significant projects) in the
discounted cash flow method. Consequently, we are unable to
determine whether any adjustments to these amounts were necessary
and whether the asset values referred to above are therefore
supportable.
Qualified Conclusion
Based on our review, with the exception of the matter described
in the preceding paragraph, nothing has come to our attention that
causes us to believe that the accompanying interim financial
information does not give a true and fair view of the financial
position of the entity as at 30 June 2014, and of its financial
performance and its cash flows for the six-month period then ended
in accordance with IAS 34.
Material Uncertainty Regarding Continuation as a Going
Concern
We draw your attention to Note 4 to the financial information
which indicates the Group incurred a net loss of US$1,659,439
during the six-month period ended 30 June 2014 and, as of that
date, the Group's current liabilities exceed its current assets by
US$7,959,336. The Group has taken measures as described in Note 4
to secure the necessary funding to meet its daily operation needs
and repay its obligation. If these measures described in Note 4
fail to materialise, this could indicate an existence of a material
uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. Our conclusion is not
qualified in respect of this matter.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
5 December 2014
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2014
30 June 2014 30 June 2013
Unaudited Unaudited
Note US$ US$
Revenue 187,464 5,661
Cost of sales (118,203) (3,924)
Gross profit 69,261 1,737
Other income 3,367 3,178
Administrative expenses (407,440) (406,379)
Other expenses (1,033,105) (662,353)
Finance cost (291,522) -
Loss before income tax 5 (1,659,439) (1,063,817)
Income tax 6 - -
Loss for the financial period, representing
total comprehensive loss for the
financial period (1,659,439) (1,063,817)
------------ ------------
Loss per share (US$ cents)
Basic and diluted loss per share 7 (0.073) (0.053)
============ ============
The accompanying notes form an integral part of this financial
information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE 2014
Unaudited Audited
Note 30.6.2014 31.12.2013
US$ US$
ASSETS
Non-current assets
Plant and equipment - 460
Investment in joint venture 8 - -
Intangible assets 9 15,946,676 16,661,676
------------
15,946,676 16,662,136
------------ ------------
Current assets
Cash and cash equivalents 2,611 1,850
Trade and other receivables 10 2,201,858 2,188,224
2,204,469 2,190,074
------------ ------------
Total assets 18,151,145 18,852,210
============ ============
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 11 40,398,514 39,738,311
Treasury shares (56,400) (56,400)
Share options reserve 1,480,000 1,480,000
Convertible loans reserve 252,794 252,794
Accumulated losses (34,087,568) (32,428,129)
------------ ------------
7,987,340 8,986,576
------------ ------------
Current liabilities
Trade and other payables 12 6,184,443 5,926,156
Convertible loans 13 3,946,409 3,906,525
Provisions 32,953 32,953
------------
10,163,805 9,865,634
------------ ------------
Total equity and liabilities 18,151,145 18,852,210
============ ============
The accompanying notes form an integral part of this financial
information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Share Convertible
Issued Treasury options loans Accumulated
capital shares reserve reserve losses Total
US$ US$ US$ US$ US$ US$
Unaudited
Balance at 1 January 2014 39,738,311 (56,400) 1,480,000 252,794 (32,428,129) 8,986,576
Loss for the period, representing
total comprehensive loss for the financial
period - - - - (1,659,439) (1,659,439)
Shares issued during the financial
period 660,203 - - - - 660,203
Balance at 30 June 2014 40,398,514 (56,400) 1,480,000 252,794 (34,087,568) 7,987,340
========== ======== ========= =========== ============ ===========
The accompanying notes form an integral part of this financial
information.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Foreign
Share Convertible currency
Issued Capital Treasury options loans Accumulated translation
Capital reserve shares reserve reserve losses reserve Total
US$ US$ US$ US$ US$ US$ US$ US$
Unaudited
Balance at 1 January
2013 37,472,123 - (56,400) 1,480,000 252,794 (16,631,910) - 22,516,607
Loss for the period,
representing
total comprehensive
loss
for the financial
period - - - - - (1,063,817) - (1,063,817)
Shares issued during
the
financial period 1,943,766 - - - - - - 1,943,766
Balance at 30 June
2013 39,415,889 - (56,400) 1,480,000 252,794 (17,695,727) - 23,396,556
========== ======== ======== ========= =========== ============ ============ ===========
The accompanying notes form an integral part of this financial
information.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
30.6.2014 30.6.2013
Unaudited Unaudited
US$ US$
Operating activities
Loss before income tax (1,659,439) (1,063,817)
Adjustments for:
Amortisation of intangible assets 715,000 398
Gain on disposal of plant and equipment - (81)
Depreciation of plant and equipment 460 1,066
Interest expenses 291,522 -
----------- -----------
Operating cash flows before movements in
working capital (652,457) (1,062,434)
Trade and other receivables (13,634) 886,002
Trade and other payables 310,454 (1,693,064)
----------- -----------
Net cash used in operating activities (355,637) (1,869,496)
----------- -----------
Investing activities
Additions of intangible assets - (1,191)
Withdrawal in pledged fixed deposits - 14,204
Proceeds from disposal of property and
equipment - 81
Net cash from investing activities - 13,094
----------- -----------
Financing activities
Net proceeds from issue of shares 115,570 1,943,766
Proceeds from Equity Linked Notes 198,915 -
Net proceeds from convertible loans 95,313 257,508
Repayment of convertible loans (53,400) (224,935)
Net cash from financing activities 356,398 1,976,339
----------- -----------
Net change in cash and cash equivalents 761 119,937
Cash and cash equivalents at beginning
of period 1,850 738
----------- -----------
Cash and cash equivalents at end of period 2,611 120,675
=========== ===========
The accompanying notes form an integral part of this financial
information.
NOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL
INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2014
1. General
The Company was incorporated in Singapore on 26 December 2006
under the name of Alternative Energy Pte. Ltd. On 11 July 2007 the
Company was converted into a public limited company and changed its
name to Alternative Energy Limited (the "Company"). The Company is
domiciled in Singapore. The registered office of the Company is at
1 Science Park Road, #02-09, The Capricorn, Singapore Science Park
II, Singapore 117528.
On 12 October 2007, the Company was successfully admitted to
trading on AIM, a market operated by the London Stock Exchange.
The principal activity of the Company is the provision of
technology, hardware and equipment for renewable energy and green
energy solutions. It also develops and makes investments or
acquisitions in energy technologies, businesses and companies which
offer an alternative to conventional fossil fuel and nuclear
methods of generating household and industrial energy, as well as
performing management services (including marketing and other
necessary services) to its subsidiaries. The principal activities
of the subsidiaries are that of research and development of
renewable energies for household consumers and holding of
trademarks and intellectual properties. The Group's operation is
not subject to any seasonality or cyclicality.
The interim condensed consolidated financial information of
Alternative Energy Limited and its subsidiaries (collectively, the
Group) for the six months ended 30 June 2014 were authorised for
issue in accordance with a resolution of the directors on 5
December 2014.
2. Basis of preparation
The interim condensed consolidated financial information for the
six months ended 30 June 2014 have been prepared in accordance with
IAS 34, Interim Financial Reporting.
The interim condensed consolidated financial information does
not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with
the Group's annual financial statements as at 31 December 2013 and
any public announcements made by the Group during the interim
reporting period.
3. Significant accounting policies
The interim condensed consolidated financial information has
been prepared under the historical cost convention.
Except as described below, the accounting policies and methods
of computation used in the condensed consolidated financial
information for the six months ended 30 June 2014 are the same as
those followed in the preparation of the Group's annual financial
statements for the year ended
31 December 2013.
In the current interim period, the Group has adopted the
following interpretation and amendments to International Financial
Reporting Standards ("IFRSs") issued by the IASB and the IFRS
Interpretations Committee of IASB that are relevant for the
preparation of the Group's condensed consolidated financial
information.
Effective date
(annual periods
beginning on
or
after)
Amendments to IFRS
10, Investment Entities 1 January 2014
IFRS 12 and IAS 27
Offsetting Financial Assets and
Amendments to IAS 32 Financial Liabilities 1 January 2014
Recoverable Amount Disclosures
Amendments to IAS 36 for Non-Financial 1 January 2014
Assets
Novation of Derivatives and Continuation
Amendments to IAS 39 of 1 January 2014
Hedge Accounting
IFRIC - Int 21 Levies 1 January 2014
The application of the above interpretation and amendments to
IFRSs in the current interim period has had no material effect on
the amounts reported in these interim condensed consolidated
financial information and/or disclosures set out in these interim
condensed consolidated financial information.
4. Going concern
The Group incurred a net loss of US$1,659,439 for the six month
period ended 30 June 2014 and as of that date, the Group's
current's liabilities exceeded its current assets by US$7,959,336.
This condition indicates the existence of a material uncertainty
that may cast significant doubt about the Group's ability to
continue as a going concern.
In order to ensure that the Group and the Company remains a
going concern, the Group and the Company have taken the following
steps in order to strengthen their working capital position:
i) The Chairman has indicated his ongoing financial support for
the Group and Company to ensure that the Group and the Company can
continue their operation and meet their liabilities as and when
they fall due. The continuing Convertible loan facility from the
Chairman, Christopher Nightingale of up to US$7 million of which
US$3.91 million has now been drawn. Although a further US$3.09
million remains to be drawn under the Convertible Loan, the
Chairman has indicated that his ability to allow the Company to
draw further funds under this Convertible Loan will depend upon the
circumstances and the realisation by him of further cash from his
own sources. On 26 June 2014, the Chairman agreed to extend the
Convertible Loans (Note 13) until 31 October 2015.
ii) The Group has entered into a GBP10,000,000 5% Equity Linked
Note Program ("ELN") with Advance Capital Partners Pte Ltd ("ACP").
The gradual drawing down by the Company of the GBP10 million Equity
Linked Note facility which is providing the Company on a rolling
basis with the operational working capital it will need in order to
roll out its products. To date the Company has drawn GBP250,000 of
this facility since its execution in April, representing 10
sub-tranches, of which 5 sub-tranches have been the subject of a
conversion notice. The Company is required to comply with certain
conditions in respect of the ELN Program and certain conditions
have been breached due to the suspension of shares trading.
Management has obtained written confirmation from ACP that it will
continue to provide financing to the Company and waived all
conditions included in the agreement that could result in the
termination of the agreement until 31 December 2015. Over the past
couple of years a major challenge for the Company has been the
amount of management time which has had to be devoted to
fundraising away from the core business of rolling out and
marketing the Company's products.
iii) The Group is in discussions with several parties with a
view to such potentially taking a significant stake in the
Company.
iv) The Group has renegotiated with certain of its major
creditors to revise the repayment schedule. Management is in
discussions with certain creditors to settle certain portions of
the liabilities with shares of the Company.
v) On the operational side, the Company has continued to develop
its business in various jurisdictions. The Company is currently in
discussions with new partners in the Ukraine, Democratic Republic
of Congo, UK, Morocco and Cote D'Ivoire which support the Board's
view of potential business for 2015.
vi) Whilst it is expected that any 2014 revenues will be
anchored by the street lighting contracts, the Company is currently
in discussions with other potential buyers of the Groups products
in Africa, the Bahamas, the Philippines and the Middle East which
may lead to additional contracts for the Group's products. These
potential contracts are not incorporated in the projections
prepared by the Group but can be followed up once the Group has
secured regular revenues from its existing projects.
vii) The overall business market relating to both our Solar
products and streetlights are now maturing and stabilizing after a
time of considerable turmoil. In the Director's opinion, AEL's
technologies are still ahead of the general panel market which make
up 90% of the current solar industry and if the Group can get these
deployed we will be able to demonstrate the superiority of this
technology over existing variants. The mature market means that
buyers and institutions now clearly recognize the role and
advantages of solar power and LED lights and no longer need to be
educated on the intrinsic merits. The issue now becomes one of cost
and delivery, in respect of which the Board is expecting the
Group's assembly plants to make the Company more competitive.
Given the accumulation of the above, the Group is actively
trading and is seeking to achieve revenue growth during the 2015
financial year, and the Board believe the Company will have
adequate working capital for its requirements for the foreseeable
future, on the basis that the Company's shares resume trading in
the near future and permit the continued draw down of the ELN
facility.
Hence the management is of the view that the going concern
assumption remains valid for the Group.
If the Group and the Company are unable to continue in
operational existence for the foreseeable future, the Group and the
Company may be unable to discharge their liabilities in the normal
course of business and adjustments may have to be made to reflect
the situation that assets may need to be realised other than in the
normal course of business and at amounts which could differ
significantly from the amounts at which they are currently recorded
in the statements of financial position. In addition, the Group and
the Company may have to reclassify non-current assets. No such
adjustments have been made to these financial information.
5. Loss before income tax
In addition to the information disclosed elsewhere in the
unaudited financial information, the Group's loss before income tax
is arrived at after charging/(crediting) the following:
30.6.2014 30.6.2013
Unaudited Unaudited
US$ US$
Administrative expenses
Employee benefits expense:
* Salaries and related costs 323,113 382,630
* Contributions to defined contributions plans 20,572 9,972
========= =========
Other expenses
Amortisation of intangible assets 715,000 398
Depreciation of plant and equipment 460 1,066
Gain on disposal of plant and equipment - (81)
Exchange loss/(gain) (5,366) 5,315
Operating lease expense - rental of office
premises and equipment 65,346 158,957
Professional fees 189,431 208,688
Research expense (25) 20,854
Finance expense
Interest expense on convertible loans due
to Chairman 80,235 -
Commitment fees 211,287 -
========= =========
Employee benefits expense includes key management personnel
compensation which are disclosed in Note 14 to the financial
information.
6. Income tax
The Group has no chargeable income for the six months period
ended 30 June 2014 and 30 June 2013. Accordingly, no provision for
income tax has been provided.
7. Loss per share
The calculation of the basic earnings per share and diluted
earnings per share is based on the Group's loss attributable to
equity holders divided by the weighted average number of ordinary
shares in issue during the period.
For the purpose of calculating diluted loss per share, the
Group's net loss attributable to equity holders and the weighted
average number of ordinary shares in issue are adjusted for the
effects of all dilutive potential ordinary shares. The outstanding
are adjusted for the effects of all dilutive potential ordinary
shares. A total of 90 million (2013: 263 million) issuable shares
that could potentially dilute basic earnings per ordinary share in
the future were not included in the calculation of diluted earnings
per ordinary share because they are anti-dilutive for the years
presented.
The basic and diluted loss per share are calculated as
follows:
Group
30.6.2014 30.6.2013
US$ US$
Loss for the period attributable to equity
holders of the Company (1,659,439) (1,063,817)
============== =============
Weighted average number of ordinary shares 2,283,311,960 2,017,916,568
Basic and dilutive earnings per share (cents
per share) (0.073) (0.053)
============== =============
8. Investment in joint venture
The Group has not recognised losses relating to the joint
venture as its share of losses exceeded the Group's carrying amount
of its investment in the joint venture. The Group has no obligation
in respect of these losses.
The details of the joint venture are as follows:
Country of
incorporation/ Effective
Joint venture Principal activities operation equity interest
30 June 31 December
2014 2013
Held by Alternative Energy Holdings
Limited % %
Manufacture light
fittings, street The People's
The Green Light lights and other Republic
Company lighting equipment of China 50 50
9. Intangible assets
Computer
Goodwill software Patents Trademarks Total
US$ US$ US$ US$ US$
Unaudited
30 June 2014
Cost
Balance at 1 January 2014 464,726 54,486 28,596,602 600,348 29,716,162
Additions - - - - -
Balance at 30 June 2014 464,726 54,486 28,596,602 600,348 29,716,162
-------- --------- ---------- ---------- ----------
Accumulated amortisation
Balance at 1 January 2014 - 54,486 1,430,000 - 1,484,486
Amortisation for the period - - 715,000 - 715,000
Balance at 30 June 2014 - 54,486 2,145,000 - 2,199,486
-------- --------- ---------- ---------- ----------
Impairment
Balance at 1 January 2014 464,726 - 11,105,274 - 11,570,000
Impairment loss recognised
during the year - - - - -
Balance at 30 June 2014 464,726 - 11,105,274 - 11,570,000
-------- --------- ---------- ---------- ----------
Net carrying amount
Balance at 30 June 2014 - - 15,346,328 600,348 15,946,676
======== ========= ========== ========== ==========
Unaudited
30 June 2013
Cost
Balance at 1 January 2013 464,726 54,486 28,335,326 415,247 29,269,785
Additions - - - 1,191 1,191
Balance at 30 June 2013 464,726 54,486 28,335,326 416,438 29,270,976
------- ------ ---------- ------- ----------
Accumulated amortisation
Balance at 1 January 2013 - 54,088 - - 54,088
Amortisation for the period - 398 - - 398
Balance at 30 June 2013 - 54,486 - - 54,486
------- ------ ---------- ------- ----------
Net carrying amount
Balance at 30 June 2013 464,726 - 28,335,326 416,438 29,216,490
======= ====== ========== ======= ==========
Computer
Goodwill software Patents Trademarks Total
US$ US$ US$ US$ US$
Audited
31 December 2013
Cost
Balance at 1 January
2013 464,726 54,486 28,335,326 415,247 29,269,785
Additions - - 261,276 185,101 446,377
Balance at 31 December
2013 464,726 54,486 28,596,602 600,348 29,716,162
-------- --------- ---------- ---------- ----------
Accumulated amortisation
Balance at 1 January
2013 - 54,088 - - 54,088
Amortisation for the
year - 398 1,430,000 - 1,430,398
Balance at 31 December
2013 - 54,486 1,430,000 1,484,486
-------- --------- ---------- ---------- ----------
Impairment
Balance at 1 January
2013 - - - - -
Impairment loss recognised
during the year 464,726 - 11,105,274 - 11,570,000
Balance at 31 December
2013 464,726 - 11,105,274 - 11,570,000
-------- --------- ---------- ---------- ----------
Net carrying amount
Balance at 31 December
2013 - - 16,061,328 600,348 16,661,676
======== ========= ========== ========== ==========
As at 30 June 2014, the management has assessed and determined
that the intangible assets is not impaired. Management has carried
out a review of the recoverable amount of the intangible assets.
The recoverable amount of the intangible assets is determined on
the basis of value in use. The calculation of the value in use is
based on discounted cash flow method using the financial forecasts
approved by the management covering of a five-year period. The cash
flow projections are estimated based on management expectation of
securing certain key projects over the next five years. The pre-tax
discount rate applied to the cash flow projection is 8% per
annum.
10. Trade and other receivables
Unaudited Audited
30.6.2014 31.12.2013
US$ US$
Trade receivables 74,609 10,058
Other receivables 2,033 -
Deposits 77,737 77,737
Prepayments 5,117 5,117
Amounts due from a related party 2,042,362 2,095,312
Amounts due from a joint venture 172,249 172,249
Less: Allowance for doubtful debts- amounts
due from a joint venture (172,249) (172,249)
2,201,858 2,118,224
========= ==========
10. Trade and other receivables (Continued)
Amounts due from a related party is substantially denominated in
Euro dollar and are unsecured, non-interest bearing and are
repayable on demand. The related party is Real Capital
International Limited ("RCI"), which is an investment company
controlled by the Chairman. The transaction originated during the
execution of a sales project of solar panels trading to a European
customer. RCI was used as the recipient company for the payment
made by the customer to facilitate the sale project during that
time when AEL did not have Euro denominated bank accounts. The
Chairman has undertaken to indemnity the Company for the amount due
from RCI and to allow set off of this receivable amount with the
convertible loans due to him (Note 13).
The carrying value for trade and other receivables approximates
their fair values due to their short-term maturities.
Allowances made in respect of estimated irrecoverable amounts
are determined by reference to past default experience.
Movement in the allowance for doubtful debts are as follows:
Unaudited Audited
30.6.2014 31.12.2013
US$ US$
Balance at beginning of the financial year/period (172,249) -
Allowance made to profit or loss - (172,249)
Balance at end of the financial year/period (172,249) (172,249)
========= ==========
11. Issued capital
Unaudited Audited Unaudited Audited
1.1.2014 1.1.2013 1.1.2014 1.1.2013
to 30.6.2014 to 31.12.2013 to 30.6.2014 to 31.12.2013
No. of share No. of share US$ US$
Issued and fully-paid:
Balance at beginning of financial
period/year 2,253,455,410 1,937,839,230 39,738,311 37,472,123
Issue of new ordinary shares 85,633,684 315,616,180 660,203 2,266,188
------------- -------------- ------------- --------------
Balance at end of financial
period/year 2,339,089,094 2,253,455,410 40,398,514 39,738,311
============= ============== ============= ==============
On 31 March 2014, the Company issued 50,000,000 new ordinary
shares. These ordinary shares we issued at US$0.005. Cash amounting
to US$250,000 was raised from this exercise for working capital
purpose.
On 7 May 2014, the Company entered into a conditional
subscription agreement ("Original Subscription Agreement") with
advance Opportunities Fund ("Subscriber") and Advance Capital
Partners Pte Ltd ("ACP") as the investment manager of the
Subscriber, pursuant to which the Company proposes to issue and
sell to the Subscriber, 5.0% equity-linked redeemable structured
convertible notes due 2017 ("Notes") with an aggregate principal
amount of up to GBP10,000,000 comprising four (4) tranches of a
principal amount of GBP2,500,000 each (collectively, the Note shall
be referred to as the "Notes" and individually, the four tranches
of the Note shall be referred to as "Tranche 1 Notes". "Tranche 2
Notes", "Tranche 3 Notes" and "Tranche 4 Notes" respectively).
Tranche 1 Notes shall comprise a further 100 equal sub-tranches of
GBP25,000 each, Tranche 2 Notes shall comprise a further 100 equal
sub-tranches of GBP25,000 each, Tranche 3 Note shall comprise a
further 50 equal sub-tranches of GBP50,000 each and Tranche 4 Notes
shall comprise a further 50 equal sub-tranches of GBP50,000 each
("Proposed Issue").
As at 30 June 2014, the Company has drawn down 6 sub-tranches of
the Tranche 1 Notes amounted to GBP150,000 of which 5 tranches have
been converted to shares, as stated below:
(i) On 27 May 2014, 15,368,852 ordinary shares of the Company be
allotted and issued to the Subscriber at an issue price of
GBP0.00488 per share through conversion of GBP75,000 (USD119,417)
of the equity linked notes.
(ii) On 16 June 2014, 10,264,832 ordinary shares of the Company
be allotted and issued to the Subscriber at an issue price of
GBP0.004871 per share through conversion of GBP50,000 (USD79,498)
of the equity linked notes.
On 27 May 2014, 10,000,000 New Shares at issue price of
GBP0.0125 amounted to GBP125,000 (USD211,288) as payment for the
First Commitment Fee for the equity linked notes by the Company.
This amount is to be paid by way of shares in the Company based on
the latest closing price of 23 May 2014.
12. Trade and other payables
Unaudited Audited
30.6.2014 31.12.2013
US$ US$
Trade payable 3,381,291 3,405,476
Other payables 1,682,609 1,632,102
Interest payable to Chairman 236,456 156,221
Accruals 287,768 248,784
Amount due to directors 556,483 483,573
Loan from third party 39,836 -
6,184,443 5,926,156
========= ==========
Trade payables are non-interest bearing with a credit terms of
90 days.
No interest is charged on the other payables.
The amount owing to directors are unsecured, interest-free and
repayable on demand.
Loan from third party pertains to the equity-linked redeemable
structured convertible notes owing to Advance Opportunities Fund,
which can be converted to shares.
13. Convertible loans
Unaudited Audited
30.6.2014 31.12.2013
US$ US$
Convertible loans due to a Chairman 3,946,409 3,906,525
========= ==========
The convertible loans are denominated in United States dollar.
Convertible loans due to Chairman represents the residual amount of
convertible loans due to Christopher Nightingale after deducting
the fair value of the equity component and is made up as
follows:
Unaudited Audited
30.6.2014 31.12.2013
US$ US$
Net proceeds of convertible loans issued 6,819,350 6,819,350
Less: Liability components at date of issue (6,566,556) (6,566,556)
----------- -----------
Equity components 252,794 252,794
Liability components at date of issue 6,566,556 6,566,556
Add: Proceed from convertible loans 95,313 -
Less: Repayment* (2,715,460) (2,660,031)
----------- -----------
Liability components at end of financial
period 3,946,409 3,906,525
=========== ===========
*The repayment figure reflected in the table represents the
accumulative repayment made by the Company on behalf of the
Chairman since 2009. The bulk of the repayment were repayment of
third party loans taken by the Chairman on behalf of the Company,
plus commissions and broking fees payable for the loans secured.
The minor part of the repayments was ad-hoc payments that were
outside official business scope such as air-tickets booking for his
family members and other personal expenses.
14. Related parties transactions
For the purposes of these unaudited condensed consolidated
financial information, parties are considered to be related to the
Group if the Group has the ability, directly or indirectly, to
control the party or exercise significant influence over the party
in making financial and operating decisions, or vice versa, or
where the Group and the party are subject to common control or
common significant influence. Related parties may be individuals or
other entities.
In addition to the information disclosed elsewhere in the
unaudited condensed consolidated financial information, related
party transactions between the Group and the Company and its
related parties during the financial year were as follows:
Unaudited Unaudited
30.6.2014 30.6.2013
US$ US$
Proceeds from convertible loans 95,313 257,508
Payment on behalf of the Chairman - 224,935
Advances from a director 23,976 39,605
Interest expense arising from convertible
loan from Chairman 80,235 -
Advances to a joint venture - 93,479
========= =========
Key management compensation
Total
Fees/
Salary and
related Defined contribution Unaudited Unaudited
costs plans 30.6.2014 30.6.2013
US$ US$ US$ US$
Executive Director
Christopher Nightingale 120,000 - 120,000 120,000
Dr Goh Swee Ming 73,908 2,153 76,061 78,878
Total Key Management
1.1.2014 to 30.6.2014 193,908 2,153 196,061
----------- -------------------- ==========
Total Key Management
1.1.2013 to 30.6.2013 197,556 1,322 198,878
==========
The remuneration of Directors is determined by the Remuneration
Committee having regard to the performance of individuals and
market trends. The remuneration disclosed above includes only the
Directors as there is no personnel other than Directors who are
considered to be a member of key management of the Group.
15. Segment reporting
Management has determined the operating segments based on the
reports reviewed by chief operating decision-maker.
The chief operating decision-maker considers the business from
only a business segment perspective, as geographical, management
manages and monitors the business only from Singapore. Most of the
assets and liabilities are located in Singapore.
The principal operations of the Group relates the provision of
technology, hardware and equipment for renewable energy and green
energy solutions product in Asia Pacific.
In presenting information on the basis of geographical segments,
segment revenue is based on the geographical markets where the
customer resides.
Distribution of total revenue by geographical markets:
30.6.2014 30.6.2013
Unaudited Unaudited
US$ US$
China 65,620 -
Indonesia 121,844 5,661
--------- ---------
187,464 5,661
========= =========
16. Events subsequent to the reporting period
(a) On 7 July 14, the Company entered into a senior loan note
instrument agreement with Darwin Strategic Limited ("Darwin") for
general working purposes. The Company has issued a senior loan note
to Darwin for a principal amount of GBP225,000 with a subscription
price of GPB180,000 repayable by the Company on 7 November 2014
("Initial Maturity Date"). If the Note is not repaid in full by the
Initial Maturity Date, the principal amount owed by the Company
shall be automatically increased to GBP270,000 and the maturity
date shall be extended to 7 May 2016.
(b) As at the date of this financial information, USD 157,973
had been drawn down from the ELN Note Program, consisting of four
sub-tranches in the month of August, September, October 2014 and
November 2014 respectively.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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