TIDMAEG
RNS Number : 2828S
Active Energy Group PLC
29 September 2017
The following amendments have been made to the 'Interim Results'
announcement released on 29 September 2017 at 7am under RNS No
1696S.
RNS No 1696S contained two typographical errors.
The reported figure for Loss Before Taxation for the 6 month
period ended 30 June 2017 has been corrected to US$1,959,664.
The total figure for the Current Assets for the 6 month period
ended 30 June 2017 has been corrected to US$5,100,186.
All other details remain unchanged.
The full amended text is shown below.
Active Energy Group Plc / EPIC: AEG / Sector: Alternative
Energy
29 September 2017
Active Energy Group Plc ('Active Energy', 'AEG' or 'the
Group')
Interims
Active Energy, the AIM quoted international timber processing,
forestry management and renewable energy business, announces its
interim results for the six months to 30 June 2017.
OVERVIEW
-- Successfully completed a fund raising of GBP11.57 million (or
US$14.15 million) (before expenses) through the issue of
convertible loan notes to new and existing investors in March 2017
to fund the Group's growth strategy
-- Commenced the reorganisation of the Group to focus on the
principal growth areas being the global commercial roll out and
development of AEG's biomass coal replacement fuel product and
development of a forestry management business
-- Established two separate affiliate companies to hold AEG's
current and future CoalSwitch(TM) and Timberlands assets, namely
Advanced Biomass Solutions Plc ('ABS') and Timberlands
International Limited ('Timberlands')
-- Timberlands has progressed the development of forestry
operations in various international territories:
o Advance stages of ratification with government with regards to
a Crown Timber Licence and rolling 20-year Forestry Management
Agreements for an initial two forestry management districts in
Canada
o Working with Canadian forestry consultancy company, Zimmfor
Management Services Ltd, to ensure full compliance with current
regulatory and environmental regulations relating to all forestry
environmental and land resources in Canada
-- Progressing ABS and the global commercial roll-out of direct
drop-in coal replacement biomass fuel:
o Commenced construction of a five-tonne-per-hour CoalSwitch(TM)
plant in Utah
o Commenced discussions, which remain ongoing, with other Asian
partners for the construction of CoalSwitch(TM) plants
-- Announced intention to reduce the Group's operating exposure
and ultimately exit Ukraine, where trading conditions have
significantly deteriorated
POST PERIOD HIGHLIGHTS
-- ABS announced agreement with Lumino Capital LLC for the
financing, development and operation of eight 20 to 30-tonnes per
hour CoalSwitch(TM) plants across South East Asia, producing an
estimated 1.5 million tonnes of CoalSwitch(TM) per annum
-- ABS has made encouraging progress in developing future
feedstock arrangements for CoalSwitch(TM)
-- Robust outlook with strong market opportunities being
presented to both ABS and Timberlands in North America and Asia
CHAIRMAN'S STATEMENT
The focussing of our business activities through ABS for the
further development and global commercial roll-out of our direct
drop-in coal replacement biomass fuel and Timberlands for the
development of forestry operations in various international
territories, is beginning to gather real momentum. By reorganising
the Group, the respective management teams have made considerable
progress building the platforms needed to fully capitalise on the
global opportunities available in both the forestry and biomass
sectors.
Update on ABS activities
The recently announced agreement between ABS and California
based Lumino Capital LLC ('Lumino') for the financing, development
and operation of eight 20 to 30-tonnes per hour CoalSwitch(TM)
plants across South East Asia, producing an estimated 1.5 million
tonnes of CoalSwitch(TM) per annum, is a huge commercial step
forward for AEG. This agreement is a tremendous endorsement of our
revolutionary biomass pellet, which is the world's only drop in
biomass fuel that can completely replace coal in existing coal
fired power stations, negating the need for expensive retrofitting
and allowing coal-fired power utilities and other coal users to
avoid plant closure. Importantly, the University of Utah
demonstrated that CoalSwitch(TM) outperforms other products, which
are currently being utilised by biomass power plants.
Lumino is a subsidiary of global financial institution Solariant
Capital LLC and has a proven track record of developing,
constructing, financing and generating utility-style renewable
energy projects. Lumino has recognised the potential of
CoalSwitch(TM) and will raise finance and source the supply of
woody biomass feedstock and appropriate offtake agreements with
customers and end-users throughout Asia. ABS, which will supply the
CoalSwitch(TM) technology and operational capability, will have
equity participation in each plant and a significant profit share
in the forthcoming offtake arrangements. The agreement represents
the first commercial endorsement of CoalSwitch(TM) and we believe
it will transform the use of this type of biomass in the energy
sector, especially once the first plant is operational in Asia in
H1 2018.
ABS is currently constructing a five-tonne-per-hour
CoalSwitch(TM) plant at its premises in Utah, USA which will be
completed in Q4 2017. Once construction has been completed, the
plant will be tested for a minimum of 30 days before being shipped
to its operating destination. The plant will provide sufficient
CoalSwitch(TM) to satisfy existing early-stage demand in Utah and
elsewhere. ABS has commercial interest from utilities, corporates,
government agencies and major coal fired power stations to test the
CoalSwitch(TM) fuel and to view the first commercial plant. Our
strategy to roll-out CoalSwitch(TM) globally is on track and we
have made excellent progress in developing future feedstock
arrangements, not just from traditional forestry owners but also
from the likes of international palm companies in Asia. This is a
particularly exciting market for us as it allows us to uniquely use
palm trunks and empty fruit bunches as feedstock for
CoalSwitch(TM), thereby creating a new market for the palm industry
and improving the environmental credentials of both companies and
countries with whom we partner as all damaging pollutants are
removed in our proprietary process. Discussions with several other
Asian parties for the construction of CoalSwitch(TM) plants are
ongoing.
Update on Timberlands activities
There has been much activity in Newfoundland since the beginning
of the year. Timberlands has an established team, which continues
to work closely with the relevant ministries in the Province of
Newfoundland and Labrador (the "Province"), Canada. Our aim is to
gain a Crown Timber Licence ('CTL') and rolling 20-year Forestry
Management Agreements (the 'FMAs') for an initial two forestry
management districts with a total land area of 1,211,000 hectares
on the Northern Peninsula. We are in advanced stages of
ratification with government in this regard.
To expedite this process and engage fully with the Province and
ministry teams, Timberlands has been working closely with the
Canadian forestry consultancy company, Zimmfor Management Services
Ltd, to ensure full compliance with current regulatory and
environmental regulations relating to all forestry environmental
and land resources in Canada.
The grants of the CTL and FMAs will be pivotal to allow
Timberlands to commence harvesting and utilising up to 140,000
solid cubic metres of wood annually from the Forestry Management
Districts 17 and 18. The agreement includes saw milling and biomass
fuel production facilities. Notably, the Port Authority and
municipal government of St. Anthony, Newfoundland, are currently
making improvements to the port, proximate to the wharf, which can
accommodate Timberlands' commercial plans, resulting in direct
access to the shortest shipping routes to Europe from the North
American continent.
Update on Ukraine operations
We remain committed to reducing our exposure to and ultimately
exiting our wood fibre processing operation in Ukraine. Following
the announcement of our intention to reorganise AEG in May 2017,
the Group's Directors began negotiations with its former COO,
Matteo Girlanda regarding a possible transaction for the Group's
Ukrainian assets. These negotiations have now ceased and the Board
continues to evaluate the optimal path in terms of value for
shareholders. Additionally, AEG is examining equipment requirements
for ABS and Timberlands as each affiliate achieves its commercial
milestones. This will result in existing equipment based in Ukraine
being re-assigned to our new operations in Canada and USA. We
anticipate the closure of all our Ukrainian activities before the
end of Q4 2017.
Financial Review
During the period under review, the Company raised of US$14.15
million (before expenses) through the issue of convertible loan
notes, which is funding the construction of the first
CoalSwitch(TM) plant and enacting Timberlands' growth strategy. We
received support from new institutional investors as well as
existing shareholders, which I believe is an endorsement of our
strategy and the recognition of the opportunity we have.
The disruption of business activity in Turkey caused by
political events in that country, which impacted trading during the
second half of 2016, continued to significantly disrupt trade in
the first half of 2017. As a result, the Group shipped only two
partial loads of woodchip for a sales value of US$1,312,764 (H1
2016 sales of US$13,409,486) resulting in a gross loss of
US$462,877 (H1 2016 profit of US$1,840,436). Discussions regarding
the disposal of the business in Ukraine to allow the Group to focus
on its biomass-for-energy and timberlands operations commenced
during the period under review and resulted in the scaling down of
all Ukrainian activity.
Administrative expenses, including costs associated with
fundraising activity and share-based payments, were US$2,029,786
(H1 2016 US$1,321,808) but the Group reported a profit on the
reclassification of its investments in its forestry and its
revolutionary biomass-for-energy businesses as a result of the
reclassification of the investment undertaken into those ventures
by the Group as debts to be recovered from its affiliate companies
when those businesses are fully developed. Overall, the Group is
reporting a loss for the period of US$1,959,366 (H1 2016 loss of
US$956,267).
Outlook
AEG is uniquely positioned to give investors exposure to both
forestry assets and biomass fuels. We are entering a highly active
period that we hope will witness significant value triggers that
will assist investors and commercial partners to appreciate the
true value of both components of our business. The market
opportunities being presented to both affiliate companies in North
America and Asia show strong commercial potential, which the Board
is excited to pursue. The journey for shareholders has been long,
but I believe the revised corporate structure, our internal
expertise, proven product offerings and lower risk profile will
lift us to the next stage in our development and should deliver a
re-rating of our stock.
Finally, I would like to thank all those involved with AEG for
their efforts and hard work and I look forward to the future as our
commercial goals are realised.
Michael Rowan
29(th) September 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND OTHER
COMPREHENSIVE INCOME FOR THE SIX MONTHSED 30 JUNE 2017
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
Note 2017 2016 2016
(Unaudited) (Unaudited) (Audited)
US$ US$ US$
REVENUE 2 1,312,764 13,409,486 19,196,559
Cost of sales (1,775,641) (11,569,050) (16,344,727)
-------------- ------------- --------------
GROSS (LOSS)/PROFIT (462,877) 1,840,436 2,851,832
Administrative expenses (2,029,786) (1,321,808) (3,089,105)
-------------- ------------- --------------
OPERATING (LOSS)/PROFIT
BEFORE SHARE BASED PAYMENTS (2,192,526) 1,080,740 394,212
Share based payments in
administrative expenses (300,137) (562,112) (631,465)
---------------------------------------- ------- -------------- ------------- --------------
OPERATING (LOSS)/PROFIT (2,492,663) 518,628 (237,253)
Finance income 277,936 9,683 18,152
Finance costs (795,497) (1,196,741) (1,844,255)
Profit on reclassification
of assets relating to associates
and joint venture 1,050,560 - -
Share of profits/(loss)
of associate - (171,305) (305,151)
-------------- ------------- --------------
LOSS BEFORE TAXATION (1,959,664) (839,735) (2,368,497)
Income tax 298 (116,532) (122,143)
-------------- ------------- --------------
LOSS FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT (1,959,366) (956,267) (2,490,640)
OTHER COMPREHENSIVE INCOME/(EXPENSE):
Items that may be subsequently
reclassified to
profit or loss
Exchange differences on
translation of foreign
Operations (146,730) 101,015 (106,675)
Exchange differences on
translation of associate - 100,471 189,450
-------------- ------------- --------------
Total other comprehensive
income/(expense) (146,730) 201,486 82,775
-------------- ------------- --------------
TOTAL COMPREHENSIVE LOSS
FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT (2,106,096) (754,781) (2,407,865)
============== ============= ==============
Loss per share (US cent)
- Basic and diluted 6 (0.24) (0.17) (0.38)
-------------- ------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE
2017
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
US$ US$ US$
NON-CURRENT ASSETS
Intangible assets 4,156,195 4,397,910 6,925,002
Property, plant and equipment 2,298,127 2,643,883 2,562,145
Investment in associates - 1,229,180 1,282,627
Loan to joint venture partner - 1,312,471 1,911,121
Available for sale financial
assets 105,595 90,583 83,455
Other financial assets 7 9,564,292 - -
16,124,209 9,674,027 12,764,350
------------- ------------- -------------
CURRENT ASSETS
Inventory 92,328 293,734 424,998
Trade and other receivables 2,888,608 1,783,154 2,650,332
Cash and cash equivalents 2,119,250 1,537,479 2,121,841
------------- ------------- -------------
5,100,186 3,614,367 5,197,171
------------- ------------- -------------
TOTAL ASSETS 21,224,395 13,288,394 17,961,521
============= ============= =============
CURRENT LIABILITIES
Trade and other payables 372,240 3,264,384 3,021,152
Loans and borrowings 104,592 5,968,109 7,062,730
Income tax liabilities 1,439 10,960 2,488
------------- ------------- -------------
478,271 9,243,453 10,086,370
------------- ------------- -------------
NON-CURRENT LIABILITIES
Deferred income tax liabilities 388,653 397,622 393,137
Loans and borrowings 14,980,876 3,000,000 580,000
------------- ------------- -------------
15,369,529 3,397,622 973,137
------------- ------------- -------------
TOTAL LIABILITIES 15,847,800 12,641,075 11,059,507
------------- ------------- -------------
NET ASSETS 5,376,595 647,319 6,902,014
============= ============= =============
EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT
Share capital 5 12,845,566 10,099,329 12,621,134
Share premium 13,526,024 8,603,703 13,469,916
Merger reserve 2,350,175 2,350,175 2,350,175
Foreign exchange reserve (176,384) 89,057 (29,654)
Own shares held reserve (779,222) (1,229,630) (779,222)
Convertible debt and warrant
reserve 1,075,301 1,075,301 1,075,301
Retained earnings (23,464,865) (20,340,616) (21,805,636)
------------- ------------- -------------
TOTAL EQUITY 5,376,595 647,319 6,902,014
============= ============= =============
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS TO 30
JUNE 2017
30 June 30 June 31 December
2017 2016 2016
Note (Unaudited) (Unaudited) (Audited)
US$ US$ US$
Cash (outflow)/ inflow
from operations 4 (2,903,956) 1,765,653 (982,318)
Income tax paid (5,235) (266,995) (285,563)
------------- -------------- --------------
Net cash (outflow)/inflow
from operating activities (2,909,191) 1,498,658 (1,267,881)
------------- -------------- --------------
Cash flows from investing
activities
Purchase of intangible
assets - (93,108) (163,257)
Contribution to associate (408,805) (157,409) (255,714)
Loan to joint venture partner (2,164,794) (620,723) (1,351,904)
Purchase of property, plant
and equipment (202) (192,132) (285,113)
Proceeds from disposal
of property, plant and
equipment 840 - 58,020
Finance income 277,936 9,683 18,152
------------- -------------- --------------
Net cash outflow from investing
activities (2,295,025) (1,053,689) (1,979,816)
------------- -------------- --------------
Cash flows from financing
activities
Issue of equity share capital,
net of share issue costs 280,540 - 2,921,762
Unsecured loans raised 5,485,293 534,210 837,667
Finance expenses (598,725) (1,196,741) (97,095)
------------- -------------- --------------
Net cash (outflow)/inflow
from financing activities 5,167,108 (662,531) 3,662,334
------------- -------------- --------------
Net (decrease)/increase
in cash and cash equivalents (37,108) (217,562) 414,637
Cash and cash equivalents
at beginning of the year 2,121,841 1,643,855 1,643,855
Exchange gains on cash
and cash equivalents 34,517 111,186 63,349
------------- -------------- --------------
Cash and cash equivalents
at end of the period 2,119,250 1,537,479 2,121,841
============= ============== ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS
TO 30 June 2017
Foreign Own Convertible
Share Share Merger exchange shares debt and Retained Total
capital premium reserve reserve held warrant earnings equity
reserve reserve
US$ US$ US$ US$ US$ US$ US$ US$
At 31 December 2015 10,099,329 8,603,703 2,350,175 (112,429) (1,229,630) 1,075,301 (19,946,461) 839,988
Loss for the period - - - - - - (956,267) (956,267)
Other comprehensive
income - - - 201,486 - - - 201,486
Share based payments - - - - - - 562,112 562,112
----------------- --------------- ------------- ------------ --------------- ----------------- ------------------ -----------------
At 30 June 2016 10,099,329 8,603,703 2,350,175 89,057 (1,229,630) 1,075,301 (20,340,616) 647,319
================= =============== ============= ============ =============== ================= ================== =================
At 31 December 2015 10,099,329 8,603,703 2,350,175 (112,429) (1,229,630) 1,075,301 (19,946,461) 839,988
Loss for the year - - - - - - (2,490,640) (2,490,640)
Other comprehensive
income - - - 82,775 - - - 82,775
Issue of share capital 2,521,805 4,866,213 - - - - - 7,388,018
Own shares reserve - - - - 450,408 - - 450,408
Share based payments - - - - - - 631,465 631,465
----------------- --------------- ------------- ------------ --------------- ----------------- ------------------ -----------------
At 31 December 2016 12,621,134 13,469,916 2,350,175 (29,654) (779,222) 1,075,301 (21,805,636) 6,902,014
Loss for the year - - - - - - (1,959,366) (1,959,366)
Other comprehensive
income - - - (146,730) - - - (146,730)
Issue of share capital 224,432 56,108 - - - - - 280,540
Share based payments - - - - - - 300,137 300,137
Share based payments - - - - - - 300,137 300,137
----------------- --------------- ------------- ------------ --------------- ----------------- ------------------ -----------------
At 30 June 2017 12,845,566 13,526,024 2,350,175 (176,384) (779,222) 1,075,301 (23,464,865) 5,376,595
================= =============== ============= ============ =============== ================= ================== =================
NOTES FORMING PART OF THE INTERIM REPORT
1. GENERAL INFORMATION AND BASIS OF PRESENTATION
Active Energy Group Plc is a public limited company incorporated
in the United Kingdom (Registration number 03148295). The address
of the registered office is 27 - 28 Eastcastle Street, London, W1W
8DH and corporate head office is Mwldan Business Park, Bath House
Road, Cardigan, Ceredigion, SA43 1JY.
The Group's principal activity continues to be that of a
business focused on global forestry and natural resources
development services and Biomass for Energy (BFE) power generation
and second-generation Biomass for Energy (BFE) for fuel solutions
and systems.
The financial information in these interim results is that of
the holding company and all of its subsidiaries. It has been
prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs). The accounting policies applied
by the Group in this financial information are the same as those
applied by the Group in its financial statements for the year ended
31 December 2016 and which will form the basis of the 2017
financial statements except for a number of new and amended
standards which have become effective since the beginning of the
previous financial year. These new and amended standards are not
expected to materially affect the Group with the exception of IFRS
15 "Revenue from contracts with customers" and IFRS 16 "Leases".
The Group is continuing to review the potential effect of these
standards.
The financial information presented herein does not constitute
full statutory accounts under Section 434 of the Companies Act 2006
and was not subject to a formal review by the auditors. The
financial information in respect of the year ended 31 December 2016
has been extracted from the statutory accounts which have been
delivered to the Registrar of Companies. The Group's Independent
Auditor's report on those accounts was unqualified, did not include
references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or 498(3) of the Companies Act
2006. The financial information for the half years ended 30 June
2017 and 30 June 2016 is unaudited and the twelve months to 31
December 2016 is audited.
These interim accounts have not been prepared in accordance with
IAS 34.
2. ACCOUNTING POLICIES
Going Concern
The directors have reviewed the going concern basis of
preparation of this report and accounts. Given the current cash
reserves of the company and the anticipated future inflow of funds
from the operation of the business and other associated activities
they have concluded that the company will be able to meet its
liabilities as they fall due for a period of 12 months from the
date of the approval of these financial statements and have
therefore prepared the accounts on a going concern basis.
Basis of consolidation
The financial information incorporates the results of the
Company and entities controlled by the Company (its subsidiaries).
Control is achieved when the Group has power over relevant
activities, is exposed, or has rights, to variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity. The consolidated
financial statements present the financial results of the Company
and its subsidiaries (the Group) as if they formed a single entity.
Where necessary, adjustments are made to the results of
subsidiaries to bring the accounting policies used into line with
those used by the Group. All intra-Group transactions, balances,
income and expenses are eliminated on consolidation.
In the Company's statement of financial position, investments in
subsidiaries are stated at cost less provisions for any permanent
diminution in value.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable, and represents amounts receivable for goods
supplied, stated net of discounts and value added taxes. The Group
recognises revenue when the following conditions have been
satisfied:
-- the Group has transferred to the buyer the significant risks and rewards of ownership;
-- the Group does not retain either the continuing managerial
involvement normally associated with ownership or effective control
over the goods;
-- the amount of revenue can be reliably measured;
-- it is probable that the economic benefits associated with the
transaction will flow to the Group; and
-- the costs to be incurred in respect of the transaction can be reliably measured.
Goodwill and business combinations
On acquisition, the assets and liabilities and contingent
liabilities of subsidiaries are measured at their fair values at
the date of acquisition. Any excess of cost of acquisition over the
fair values of the identifiable net assets acquired is recognised
as goodwill. Any deficiency of the cost of acquisition below the
fair values of the identifiable net assets acquired (i.e. discount
on acquisition) is credited to the income statement in the period
of acquisition.
When the consideration transferred by the Group in a business
combination includes assets or liabilities from a contingent
consideration arrangement, the contingent consideration is measured
at its acquisition date fair value and included as part of the
consideration paid. Changes in the fair value of the consideration
that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against
goodwill.
Goodwill arising on consolidation is recognised as an intangible
asset and reviewed for impairment at least annually by comparing
the carrying value of the asset to the recoverable amount. Any
impairment is recognised immediately in profit or loss and is not
subsequently reversed.
Associates
Where the Group has the power to participate in (but not
control) the financial and operating policy decisions of another
entity, it is classified as an associate. Associates are initially
recognised in the consolidated statement of financial position at
cost. Subsequently, associates are accounted for using the equity
method, where the Group's share of post-acquisition profits and
losses and other comprehensive income is recognised in the
consolidated statement of profit and loss and other comprehensive
income (except for losses in excess of the Group's investment in
the associate unless there is an obligation to make good those
losses).
Profits and losses arising on transactions between the Group and
its associates are recognised only to the extent of unrelated
investors' interests in the associate. The investor's share in the
associate's profits and losses resulting from these transactions is
eliminated against the carrying value of the associate.
Any premium paid for an associate above the fair value of the
Group's share of the identifiable assets, liabilities and
contingent liabilities acquired is capitalised and included in the
carrying amount of the associate. Where there is objective evidence
that the investment in an associate has been impaired the carrying
amount of the investment is tested for impairment in the same way
as other non-financial assets.
Joint arrangements
Profits and losses arising on transactions between the Group and
its joint ventures are recognised only to the extent of unrelated
investors' interests in the joint venture. The investor's share in
the associate's profits and losses resulting from these
transactions is eliminated against the carrying value of the
associate. Any premium paid for an investment in a joint venture
above the fair value of the Group's share of the identifiable
assets, liabilities and contingent liabilities acquired is
capitalised and included in the carrying amount of the investment
in joint venture. Where there is objective evidence that the
investment in a joint venture has been impaired the carrying amount
of the investment is tested for impairment in the same way as other
non-financial assets.
The Group accounts for its interests' joint operations by
recognising its share of assets, liabilities, revenues and expenses
in accordance with its contractually conferred rights and
obligations.
Impairment of non-financial assets (excluding inventories,
investment properties and deferred tax assets)
Impairment tests on goodwill and other intangible assets with
indefinite useful economic lives are undertaken annually at the
financial year end. Other non-financial assets are subject to
impairment tests whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where
the carrying value of an asset exceeds its recoverable amount (i.e.
the higher of value in use and fair value less costs to sell), the
asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there are
separately identifiable cash flows; its cash generating units
("CGUs"). Goodwill is allocated on initial recognition to each of
the Group's CGUs that are expected to benefit from the synergies of
the combination giving rise to the goodwill.
Impairment charges are included in profit or loss, except to the
extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is
not reversed.
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised
at cost and subsequently amortised on a straight-line basis over
their useful economic lives.
Intangible assets are recognised on business combinations if
they are separable from the acquired entity or give rise to other
contractual/legal rights. The amounts ascribed to such intangibles
are arrived at by using appropriate valuation techniques.
The significant intangibles recognised by the Group, their
useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible asset Useful economic life Valuation method
Contractual relationships Term of contract (49 years)
Discounted future cash flow
Intellectual property rights Over the term of the patents life
Discounted future cash flow
Property, plant and equipment
Property, plant and equipment is stated at cost or deemed cost
less accumulated depreciation and any recognised impairment loss.
Cost includes the purchase price and all directly attributable
costs.
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life.
Plant and equipment - 2 to 10 years straight line
Furniture and office equipment - 2 to 5 years straight line
The assets residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost and net realisable value. Cost is determined
using the first-in, first-out (FIFO) method. Cost comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary
course of business, less applicable selling expenses.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including executive Directors.
Financial instruments
The Group classifies its financial instruments into one of the
categories discussed below, depending on the purpose for which the
asset was acquired. The Group has not classified any of its
financial assets as held to maturity, or at fair value through
profit or loss.
The accounting policy for each category is as follows:
Loans and receivables
The Group's loans and receivables comprise trade and other
receivables, loan to joint venture partner and cash and cash
equivalents in the statement of financial position. These assets
are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise
principally through the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other
types of contractual monetary assets. They are initially recognised
at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less
provision for impairment.
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, other short term highly liquid investments with
original maturities of three months or less, and for the purpose of
the statement of cash flows, bank overdrafts.
Available for sale financial assets
Available for sale financial assets are non-derivatives that are
either designated in this category or not classified in any of the
other categories. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at fair value
with changes in fair value recognised in other comprehensive
income. When available for sale financial assets are sold or
impaired, the accumulated fair value adjustments recognised in
equity are transferred to the income statement. Dividends on
available for sale equity instruments are recognised in the income
statement as part of other income when the Group's right to receive
payments is established.
Other financial liabilities
Other financial liabilities include the following items:
-- Borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the
instrument. These are subsequently measured at amortised cost using
the effective interest rate method, which ensures that any interest
expense over the period to repayment is at a constant rate on the
balance of the liability carried in the statement of financial
position. The interest expense includes initial transaction costs
and premiums payable on redemption, as well as any interest or
coupon payable while the liability is outstanding.
-- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Taxation
Current taxes are based on the results shown in the financial
statements and are calculated according to local tax rules, using
tax rates enacted or substantively enacted by the year-end
date.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the consolidated
statement of financial position differs from its tax base, except
for differences arising on:
-- the initial recognition of goodwill;
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised. The amount
of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities/assets are
settled/recovered.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable group company; or
-- different Group entities which intend either to settle
current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax assets
or liabilities are expected to be settled or recovered.
Foreign currencies
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which they operate (their "functional
currency"). The Company and Consolidated financial statements are
presented in United States Dollar ("US Dollar", "US$"), which is
the Group's presentation currency as the Group's products are
ultimately linked to the US Dollar. The Company's functional
currency is Pound Sterling.
Transactions entered into by Group entities in a currency other
than their functional currency are recorded at the rates ruling
when the transactions occur. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the reporting
date. Exchange differences arising on the retranslation of
unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
On consolidation, the results of overseas operations are
translated into the Group's presentation currency, US Dollars, at
rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations, including
goodwill arising on the acquisition of those operations, are
translated at the rate ruling at the reporting date. Differences
arising on translating the opening net assets at opening rate and
the results of overseas operations at actual rate are recognised in
other comprehensive income and accumulated in the foreign exchange
reserve.
Exchange differences recognised in the statement of
comprehensive income of Group entities' separate financial
statements on the translation of long-term monetary items forming
part of the Group's net investment in the overseas operation
concerned are reclassified to the foreign exchange reserve on
consolidation.
On disposal of a foreign operation, the cumulative exchange
differences recognised in the foreign exchange reserve relating to
that operation up to the date of disposal are transferred to the
consolidated statement of comprehensive income as part of the
profit or loss on disposal.
Convertible debt
The proceeds received on issue of the Group's convertible debt
are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the bond. The remainder
of the proceeds is allocated to the conversion option and is
recognised in the "Convertible debt reserve" within shareholders'
equity, net of income tax effects.
Leased assets
Where substantially all of the risks and rewards incidental to
ownership of a leased asset have been transferred to the Group (a
"finance lease"), the asset is treated as if it had been purchased
outright. The amount initially recognised as an asset is the lower
of the fair value of the leased property and the present value of
the minimum lease payments payable over the term of the lease. The
corresponding lease commitment is shown as a liability. Lease
payments are analysed between capital and interest. The interest
element is charged to the consolidated income statement over the
period of the lease and is calculated so that it represents a
constant proportion of the lease liability. The capital element
reduces the balance owed to the lessor.
Where substantially all of the risks and rewards incidental to
ownership are not transferred to the Group (an "operating lease"),
the total rentals payable under the lease are charged to the
consolidated income statement on a straight-line basis over the
lease term.
Share based payments
Where employees receive remuneration in the form of shares or
share options, the fair value of the share-based employee
compensation arrangement at the date of the grant is recognised as
an employee benefit expense in the consolidated income
statement.
The total expense to be apportioned over the vesting period of
the benefit is determined by reference to the fair value (excluding
the effect of non-market-based vesting conditions) at the date of
the grant. The assumptions underlying the number of awards expected
to vest are subsequently adjusted for the effects of
non-market-based vesting to reflect the conditions prevailing at
the year-end date. Fair value is measured by the use of a
Black-Scholes and Monte Carlo model. The expected life used in the
model has been adjusted, based on management's best estimate, for
the effects of the non-transferability, exercise restrictions and
behavioural considerations.
Where equity instruments are granted to persons other than
employees, the consolidated income statement is charged with the
fair value of goods and services received, except where that fair
value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods or the counterparty renders
the service.
Own shares held
Consideration paid/received for the purchase/sale of shares held
in escrow or in trust for the benefit of employees is recognised
directly in equity. The nominal value of such shares held is
presented within the "own shares held" reserve. Any excess of the
consideration received on the sale of the shares over the weighted
average cost of the shares sold is credited to retained
earnings.
Neither the purchase nor sale of own shares leads to a gain or
loss being recognised in the Group consolidated income
statement.
Investment in subsidiaries
Investments in subsidiaries are stated at cost less provision
for impairment in the Company financial statements.
3. SEGMENTAL INFORMATION
The Group reports the following operating segments:
-- 'MDF Wood Chip' denotes the Group's Medium-Density Fibreboard
(MDF) wood chip processing and supply business division.
-- 'Forestry & Natural Resources' denotes the Group's
initiatives to secure ownership of the entire timber supply chain -
from forest to finished product
-- 'BFE Fuel Solutions' denotes the Group's renewable Biomass
for Energy fuel division, which engages in development of
second-generation BFE fuel solutions and systems.
For the 6 months to 30
June 2017 (unaudited)
Forestry
MDF Wood & Natural BFE Fuel
chip Resources Solutions Total
US$ US$ US$ US$
Revenue from external customers 1,312,764 - - 1,312,764
Operating segment profit(loss) (1,438,228) 1,028,138 - (410,090)
Finance costs (167,977) - - (167,977)
--------------- -------------- -------------- --------------
Segment profit/(loss) before
tax (1,606,205) 1,028,138 - (578,067)
Tax credit / (charge) (4,186) 4,484 - 298
--------------- -------------- -------------- --------------
Segment loss for the period (1,610,391) 1,032,622 - (577,769)
=============== ============== ============== ==============
For the 6 months to 30
June 2016 (unaudited)
Forestry
MDF Wood & Natural BFE Fuel
chip Resources Solutions Total
US$ US$ US$ US$
Revenue from external customers 13,409,486 - - 13,409,486
Operating segment profit(loss) 1,577,089 (193,727) - 1,383,362
Finance costs (157,753) - - (157,753)
--------------- -------------- -------------- --------------
Segment loss for the period 1,419,336 (193,727) - 1,225,609
Tax credit (121,016) 4,484 - (116,532)
--------------- -------------- -------------- --------------
Segment loss for the period 1,298,320 (189,243) - 1,109,077
=============== ============== ============== ==============
For the 12 months to 31
December 2016 (Audited)
Forestry
MDF Wood & Natural BFE Fuel
chip Resources Solutions Total
US$ US$ US$ US$
Revenue from external customers 19,196,559 - - 19,196,559
Operating segment profit(loss) 1,719,522 (349,989) - 1,369,533
Finance costs (60,055) - - (60,055)
------------ ------------ ------------------- --------------
Segment profit/(loss) before
tax 1,659,467 (349,989) - 1,309,478
Tax credit (131,112) 8,969 - (122,143)
------------ ------------ ------------------- --------------
Segment profit/(loss) for
the period 1,528,355 (341,020) - (1,187,355)
============ ============ =================== ==============
All assets and liabilities and capital expenditure for the
period are inter-changeable between the divisions and therefore no
segmental analysis has been presented.
Reconciliation of reportable segment profit or loss, assets and
liabilities to the Group's corresponding amounts are as
follows:
6 months
ended 30
June 2017 Year ended
6 months
ended 30
June 2016 31 December
(unaudited) (unaudited) 2016 (audited)
US$ US$ US$
Total profit/(loss) from
reportable segments (577,769) 1,109,077 1,187,335
Unallocated amount -
corporate expenses (731,876) (473,927) (1,280,492)
Unallocated amount -
finance income 277,936 9,683 18,152
Unallocated amount -
finance expense (627,520) (1,038,988) (1,784,170)
Share based payments (300,137) (562,112) (631,465)
-------------- -------------- -----------------
Loss for the period (1,959,366) (956,267) (2,490,640)
============== ============== =================
4. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH OUTFLOWS FROM OPERATING ACTIVITIES
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Group US$ US$ US$
Loss for the period (1,959,366) (956,267) (2,490,640)
Adjustments for:
Share of loss of associate - 171,305 305,151
Profit on reclassification
of assets relating to associates
and joint venture (1,050,560) - -
Share based payment expense 300,137 562,112 631,465
Depreciation 178,275 169,264 344,495
Amortization of intangibles 22,422 22,422 44,845
Profit on disposal of PPE - - (58,020)
Foreign currency translations (126,321) (899,328)
Finance income (277,936) (9,683) (18,152)
Finance expenses 795,497 1,196,741 1,844,225
Income tax (298) 116,532 122,143
-------------- ------------ -------------
(2,118,150) 1,272,426 (173,816)
Decrease/(Increase) in inventories 332,670 12,475 (118,789)
(Increase)/Decrease in trade
and other receivables (238,276) 790,934 (76,244)
Decrease in trade and other
payables (880,200) (310,182) (613,469)
-------------- ------------ -------------
Net cash (outflow)/inflow
from operating activities (2,903,956) 1,765,653 (982,318)
============== ============ =============
5. SHARE CAPITAL
Number US$
Allotted, called up and fully paid
Ordinary shares of 1p each
(Unaudited)
At 1 January 2017 840,381,500 12,621,134
Shares issued for cash 17,623,110 224,430
------------- ------------
At 30 June 2017 858,004,610 12,845,564
============= ============
Number US$
(Unaudited)
At 1 January 2016 642,158,903 10,099,329
Shares issued for cash - -
------------- ------------
At 30 June 2016 642,158,903 10,099,329
============= ============
Number US$
(Audited)
At 1 January 2016 642,158,903 10,099,329
Shares issued for cash 198,222,597 2,521,805
------------- ------------
As at 31 December 2016 840,381,500 12,621,134
============= ============
6. LOSS PER SHARE
6 months 6 months 12 months
to to to 31 December
30 June 30 June
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
US$ US$ US$
Weighted average ordinary
shares in issue 807,344,890 564,658,903 651,515,665
----------- ----------- ---------------
Loss after taxation (1,959,366) (956,267) (2,490,640)
----------- ----------- ---------------
Loss per share (pence)
- basic and fully diluted (0.24) (0.17) (0.38)
----------- ----------- ---------------
7. Reclassification of assets relating to investments in associates and joint venture
The Group reported a profit of $1,050,560 on the
reclassification of its investments in its forestry and its
revolutionary biomass-for-energy businesses. The reclassification
of those investments means they are now reported as debts totalling
$9,564,292 to be recovered from its affiliate companies when those
businesses are fully developed.
The reclassified debts are subject to formal loan agreements
between AEG plc and both its affiliate companies. The loan
agreements have a term of 3 years and an interest rate of 5%.
8. COPIES OF THE INTERIM REPORT
Copies of the interim report will be made available on the
Company's website at www.active-energy.com.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
Enquiries & Further Information:
Website LinkedIn
---------------------- --------------------------------------
www.active-energy.com www.linkedin.com/company/activeenergy
www.abs-plc.com
---------------------- --------------------------------------
Enquiries
-----------------------------------------------------------------------------
Active Energy Michael Rowan michael.rowan@aegplc.com
Group Plc Non-Executive Chairman
------------------- ------------------------- -----------------------------
Richard Spinks richard.spinks@aegplc.com
Chief Executive Officer
------------------- ------------------------- -----------------------------
Brian Evans-Jones brian.evans-jones@aegplc.com
Chief Financial Officer
------------------- ------------------------- -----------------------------
Northland Capital Patrick Claridge/David Office: +44 (0)20
Partners Limited Hignell/Gerry Beaney 3861 6625
Nominated Adviser (Corporate Finance)
& Broker John Howes/Rob Rees
(Sales & Broking)
------------------- ------------------------- -----------------------------
St Brides Partners Isabel de Salis/Megan info@stbridespartners.co.uk
Financial PR Dennison Office: +44 (0)
Adviser 20 7236 1177
------------------- ------------------------- -----------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUBABUPMGPB
(END) Dow Jones Newswires
September 29, 2017 09:25 ET (13:25 GMT)
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