Final Results

RNS Number : 7312O

Camco Clean Energy PLC

01 June 2015

 

1 June 2015

Camco Clean Energy plc

("Camco" or "the Company")

2014 Final Results

"Significant progress across all three business units"

Camco Clean Energy plc (AIM: CCE), the clean energy and energy storage company, today announces its final results for the 12 months ended 31 December 2014.

Financial

·      Comprehensive loss for the year halved to €1.9m (2013: loss €3.8m).

·      Total revenue for the year €9.9m (2013: €12.3m).

·      Increased revenue from US Operations following a full years' activity at the Twin Falls Facility.

·      Decreased revenue from Africa Activities following realignment and investment towards higher margin activities.

·      Successful hibernation of the Company's major carbon activities in 2013 resulting in a decrease in related income in 2014.

·      Overall administration expenses reduced by 24%, or €2.2m, from €9.3m to €7.1m, notwithstanding the inclusion of a full year of expenses in 2014 from the Twin Falls Facility.

·      Cash and cash equivalents of €4.1m (2013: €4.5m), inclusive of cash held in debt reserve in relation to the Jerome Facility of (€0.8m) (2013: (€1.0m)).

·      Secured loans and borrowings of €12.1m (2013: €10.4m) denominated in US$ and unsecured loans and borrowings of €Nil (2012: €Nil). The majority of this increase was due to foreign exchange movements (offset by corresponding increase in carrying value of associated US biogas assets) and a new finance facility attained during the year and secured against Twin Falls Facility (€0.6m).

Operational

In 2014 we consolidated the reorganisation of the business with the objective of building profitable business units in Africa and the US, and developing production units of REDT's energy storage system ready for market deployment in 2015. 

US Clean Energy business

·      Acquisition and successful integration of the Twin Falls Facility into wider US biogas operations and this facility, alongside the Jerome Facility, performed well throughout the year.

·      The US team was awarded 2014 Project Developer of the year by the Climate Action Reserve for its activities in California's cap-and-trade program (the "California Program"), a testimony to our strength and expertise across this market.

Africa Clean Energy business

·      Awarded a mandate to act as joint investment advisers to Green Africa Power LLP ("GAP") using our long established consulting business in the region as a platform.

·      Well positioned to win further similar mandates and build a profitable business unit with high margins.

REDT Clean Energy Storage

·     Signed a manufacturing agreement (the "Jabil Agreement") with Jabil Circuit, Inc. ("Jabil"), one of the world's leading manufacturing solutions companies, providing a scalable manufacturing capability enabling REDT to accelerate its market deployment plans.

·     Jabil conducted detailed technical due diligence, patent rights protection and market demand research on REDT's product prior to entering into the Agreement. 

·     Since signing the Jabil Agreement, REDT has developed containerised, modular energy storage solutions.

·     Production is now focused on completing the build, certification and electrical testing for delivery during 2015 of ten 5kW-40kWhe units to selected customers across a range of customer applications and delivery of seven 15kW-240kWhe units to the Isle of Gigha.

Commenting, Scott McGregor, Chief Executive Officer said:

"2014 saw considerable progress as anticipated across all three of these business units.  As a result we are building long term equity value for our shareholders, which is our core focus.

"Our task in 2015 is clear and the outlook very promising. We must focus on bringing REDT's energy storage system to market and establishing the areas where product deployment makes the most economic sense. In our Africa Clean Energy business we aim to further strengthen our presence and reputation in the region by delivering on GAP and other mandates, as well as becoming sufficient in our own right. Our Africa teams will work closely with REDT, acting as a channel to market in what is a key region for energy storage. In the US, we will continue to explore strategic alternatives for this business to bring value to the Company."

"Finally, I would like to personally thank our staff for their extraordinary efforts and focused work over the past few years building out our new business lines as we have now moved forward successfully following the collapse of the legacy carbon credit core business."

The management team will be hosting a presentation for analysts at 9:30 a.m. today, at the offices of Newgate: Sky Light City Tower, 50 Basinghall Street, London, EC2V 5DE. Analysts who wish to attend should register with Ed Treadwell or Helena Bogle at [e-mail] or on 020 7653 9840.

For investors, the management team will be hosting an investor conference call at 2:00 p.m. on 2^nd June 2015. Investors who wish to register for the call should email: [e-mail].

Enquiries:
Camco Clean Energy plc	[phone]
Scott McGregor, Chief Executive Officer
Jonathan Marren, Chief Financial Officer
finnCap (Nominated Adviser and Broker)	[phone]
Julian Blunt
Tony Quirke
Newgate
Tim Thompson, Helena Bogle, Ed Treadwell	[phone]

About Camco Clean Energy

Camco Clean Energy plc (AIM: CCE) is a clean energy development company which combines technical and commercial expertise to finance, develop, and operate renewable energy projects and storage technology.

With 25 years of experience and an outstanding track record throughout Asia, North America, Africa and Europe, Camco works with local developers, governments, development banks, and private investors to implement clean energy projects, policies and technologies, and reduce emissions.

In the past year, Camco has brought an advanced energy storage technology to market (REDT energy), secured an investment advisory fund mandate for African renewables, and has developed utility scale biogas plants in the US.

Chairman's Report

Camco has always been at the leading edge of changes in the energy markets and 2014 was no exception.   We have products and services in three growing markets.   There is a huge latent demand for storage in the electricity sector as markets shift to distributed generation.   Clean energy and storage demand specifically in Africa is growing exponentially with significant capital flowing into sub Saharan Africa - around 1.8 GW of new capacity was installed in 2014.  

As the market for carbon credits collapsed in 2012, the Board's primary concern was to ensure that we have the funds necessary to grow the business and the 2014 placing and the prior sale of the UK Consulting business in 2012 and South East Asia Joint Venture in 2013 has enabled us to do this.  It was therefore refreshing that our Board meetings in 2014 could focus on growth in our business.    Early in 2014 we adopted a strategy of developing each of our 3 business units and the management team were tasked with key performance indicators to ensure that each unit was delivering shareholder value by the year end - either through the provision of new services such as the funds management in Africa or through product development such as the manufacturing agreement with Jabil Circuit Inc. 

The creation of long term shareholder value is the fundamental role of the Board and has been central to our discussions at Board meetings.   Delivering on KPIs is one thing but this needs to be translated into increases in share price.   We recognise that the business units are disparate and at some stage there will need to be a reorganisation so that there is a very clear focus.   Businesses succeed by focussing and it gives investors greater confidence and ultimately this gets reflected in share price.

2015 is already showing great promise and the early orders received by REDT are encouraging.   There is no doubt that electricity storage is going to be a technology that is commonplace on our electricity networks just as the coal powered generation was.   The recent announcement by Tesla Motors Inc., in which they launched their home battery product on cost effective pricing, is evidence of this.    Different technologies will be suitable for different end uses and REDT shines in applications where life expectancy and long duration are required.  

Once again, I would like to thank my fellow non-executive directors, management and staff for the contributions that they have made to the Group in the past year.   I look forward to reporting a successful 2015.

Jeffrey Kenna

Chairman

Chief Executive Officer's Report

Summary and Outlook

2014 will stand out as a defining year for Camco Clean Energy.

In the outlook section in our 2013 report and accounts we said that we had started 2014 with some exciting opportunities with 3 clearly defined business units having demonstrable growth strategies and an operational cost base that had been reduced to the absolute minimum whilst retaining the necessary functionality.

I am pleased to report that 2014 saw great progress as anticipated across all three of these business units and we continue to be focused on building long term equity value for our shareholders.

In the US Clean Energy business, we integrated the acquisition of the Twin Falls Facility successfully into our wider US biogas operations and this facility, alongside the Jerome Facility, performed well in the year. The US team was also awarded 2014 Project Developer of the year by the Climate Action Reserve for its activities in the California's cap-and-trade program (the "California Program") which is a testimony to our strength across this market.

In the Africa Clean Energy business, we were privileged to be awarded a mandate to act as joint investment advisers to Green Africa Power LLP ("GAP") using our long established consulting business in the region as a platform. We are also well positioned to win further similar mandates and build on this success.

The area which perhaps attracts the most interest currently is our energy storage business - REDT. The ability to store energy on a cost effective basis is one of the key challenges facing the world today and the opportunity for any company working in this area is vast. We have always believed in the strength of REDT's technology but partnering with an organisation to bring it to market would likely be necessary. We were therefore extremely pleased to enter into a manufacturing agreement with Jabil Circuit, Inc. ("Jabil"), one of the world's leading manufacturing solutions companies. This agreement has enabled us to accelerate product development at a pace much faster than originally anticipated and we are poised to deliver our first products later this year, an event which is eagerly anticipated and will be a defining moment for this business.

Our task in 2015 is clear and the outlook very promising. We must focus on bringing REDT to market and establishing the areas where deployment of product makes the most economic sense. In our Africa Clean Energy business we aim to further strengthen our presence and reputation in the region by delivering on GAP and other mandates, and becoming sufficient in its own right.  This needs to be achieved whilst working closely with REDT to act as a channel to market in what is key region for energy storage as it has done already with the contract to develop and install a hybrid energy storage solution in South Africa. In the US, we will continue to explore strategic alternatives for this business to bring value to the group from the first class team we have in the region.

Operational review

To reflect the change in focus of the business since the completion of the restructuring at the end of 2013, the Group now reports its results in new segments being US, Africa Clean Energy, REDH (CCE) and Group (Other). The segments are described in more detail in the relevant sections below.

US business

The US Activities include our two operating biogas facilities, being the 4.5MW Jerome Facility and the 2.1MW Twin Falls Facility and our US Carbon business.

Camco has owned and operated the Jerome Facility since commissioning in July 2012. The facility is situated on a dairy farm in Idaho comprising in excess of 17,000 dairy cows and is integral to the logistical operation of the dairy, significantly reducing the cost otherwise incurred in dealing with the vast amounts of cow manure generated and crucially reducing emissions for the dairy owner. Key for this facility is to match or exceed its monthly minimum forecast power production targets so as to ensure it receives its full power price available to it under the power purchase agreement which it did so for the whole of the year. The facility also generates a significant number of US carbon credits eligible for the Californian market, which generates good cash flow when they are issued as Californian Carbon Offsets.

The majority of the construction capital for the Jerome Facility was sourced from project debt secured on the facility and a mezzanine facility which was repaid in 2012 upon receipt of the US grant of c$6.0m. As a result, the accounting treatment for the net value of the Jerome Facility represented within the Group's 7net asset position is nominal as the gross depreciated value of the assets is approximately offset by the value of the debt and the deferred income balance (relating to the 2012 US grant receipt). As anticipated, interest on and repayment of the debt does account for significant portion of the cash flow generated by the asset and therefore we were pleased in January 2014 to be able to refinance this debt on better terms thereby decreasing this cash outflow over the next two years.

Camco acquired the Twin Falls Facility in December 2013 which is situated close to the Jerome Facility on a dairy farm in Idaho comprising in excess of 10,000 dairy cows and, like the Jerome Facility, is crucial to the operation of the dairy overall. The integration of the facility into our operations was successfully concluded and during 2014 the facility performed well meeting its monthly minimum forecast power production targets. The facility was originally acquired debt free but during the year a new finance facility of €0.6m secured against assets of the facility was obtained.

As anticipated 2014 saw continuing issuances of California Carbon Offsets ("CCOs")  from our portfolio of Agricultural Methane projects that are managed on behalf of our dairy partners where we receive a revenue share under California's cap-and-trade program (the "California Program"). Our policy to sell CCOs when they are issued and where possible lock-in in advance prices to mitigate potential CCO price risk continued to be successful meaning this activity generated good income and positive cash flow.

Post the year end we concluded a structured transaction with a major multinational corporation to assign rights to the future stream of certain CCOs generated between 2015 and 2020 from the majority of Agricultural Methane projects that we manage.

As part of the structure, Camco received an initial cash payment of $1.74m. Additionally Camco may receive a deferred and conditional payment of up to $0.5m by 31 December 2015.

The structured transaction provides price security to Camco's dairy partners for the credits generated by their projects and thereby significantly de-risks the cash and returns to be generated. This includes the Jerome and Twin Falls facilities owned by Camco.

The transaction supports Camco's ongoing origination of new emissions reduction projects through demonstrating the value to project owners of Camco's track record of managing and delivering California eligible offsets and its ability to aggregate deliveries from multiple projects to secure long-term offtakes from credit-worthy buyers.

Camco retains the rights to the CCOs from projects not included in the above sale and its rights to credits generated after 2020 from all the projects included in the portfolio transaction.

Africa Clean Energy business

The Group's heritage can be traced back to East Africa in 1989 where it initially focused on environmental and energy projects. Today, it has a well-developed presence across Africa serviced from 5 regional offices across East and West Africa and South Africa.

This track record and expertise, together with the Group's wider experience in clean energy, led to the Group being awarded the joint mandate for the provision of investment advice and related services to Green Africa Power LLP ("GAP"). The award of this contract is a very major step forward for our business in Africa and we anticipate acting as a platform and catalyst to expand further in the region over the coming years with strategic aim of becoming a major player in the deployment of capital in clean energy assets in Africa.

GAP, an initiative of the Private Infrastructure Development Group Trust ("PIDG"), offers mezzanine debt and contingent lines of credit, to privately-owned renewable power generation projects in the most under-developed countries in Africa.  GAP will invest alongside commercial lenders and other investors in order to stimulate private investment in renewable energy. Initially £95m of funding has been committed to GAP by the UK Departments for International Development ("DFID") and Energy and Climate Change ("DECC") and in early 2015 this was augmented by additional funding of £26m from The Norwegian Government. Camco earns a base fee over the duration of the contract with additional fees payable on an incentive basis

There is also a growing pipeline of similar complementary activities giving confidence that alongside GAP, the business can be transitioned towards higher margin activity validating the Groups extensive experience in the African renewables sector.

During the latter part of 2013, the team submitted, alongside its development partner MW1, a 5MW solar project into the first round of the Small IPP Procurement Program in South Africa and we were pleased to be notified in March 2014 that it had been shortlisted for the next round. The project was submitted to the final round in 2014 and we await to hear the results of that submission.

Throughout the year the wider advisory business continued to be involved in consulting on environmental, energy and climate change projects albeit with lower levels of activity than previous years as we focus on higher margin activity. During 2015 and beyond we expect this trend to continue and in particular as we focus more on the above Africa finance activities and on assisting with developing channels to market for REDT in what is one of the key markets for energy storage. Already this has been seen through the contract to develop and install a hybrid energy storage solution in South Africa announced in 2015 and discussed in more detail below.

REDT Clean Energy Storage

REDT (Camco's Energy Storage Business) is our joint venture in which we have a 49% economic interest.

After over 15 years of research and development, REDT has developed a new and proprietary energy storage technology which enables the efficient and sustainable storage of electrical energy in liquid form.  The multi-valent properties of the Vanadium Redox electrolyte are used to provide a storage medium of virtually unlimited life with a system able to last more than 10,000 deep charge/discharge cycles. Combined with its very low maintenance requirements, REDT systems are able to deliver some of the lowest Total Cost of Ownership ("TCO") results in the industry. Long discharge durations are achieved by the simple addition of extra electrolyte capacity at a relatively low marginal cost.

The key benefits of the REDT energy storage are:

·    Low Levelised Cost of Storage -	LCOS calculates cost of energy stored over a battery's life and accounts for all operating and maintenance costs, together with efficiency.
·    100% Depth of Discharge -	Charge and discharge the REDT energy storage fully from 0-100% without significant degradation to the system, unlike other conventional batteries which suffer drastic capacity losses if discharged below 50%, leading to need for frequent replacement.
·    Long Lasting -	Vanadium Redox Flow Battery can last for 10,000 cycles with no significant degradation, equivalent to 25 years of storage, matching the life of solar panels and wind turbines.
·    Low Maintenance -	The batteries can be remotely monitored and require minimal maintenance, reducing the need for frequent site visits.
·    Safe -	Unlike lead acid and lithium batteries, the REDT Energy Storage System does not go into thermal runaway in warm climates. REDT Energy storage is non-explosive and non-flammable.
·    Environmentally Friendly -	REDT energy storage systems contain no heavy metals and are emission free.

During the year REDT signed a manufacturing agreement (the "Jabil Agreement") with Jabil Circuit, Inc. ("Jabil"), one of the world's leading manufacturing solutions companies which provides a scale manufacturing capability enabling REDT to accelerate its market deployment plans. Jabil contracted detailed technical due diligence, patent rights protection and market demand research on REDT's product prior to entering into the Agreement.

Since signing the Jabil Agreement, REDT has developed containerised, modular energy storage solutions. The standardised modular design has allowed the size and cost of the energy storage systems to be significantly reduced whilst increasing the functionality and usability of the batteries. Modular systems are easier to install, transport, decommission and maintain.

Detailed design has been completed for the small and large product range (including 5kW-40kWhe, 10kW-40kWhe, 15kW-240kWhe, 30kW-240kWhe, 45kW-240kWhe and 60kW-240kWhe) and the team have successfully addressed many anticipated engineering production issues expected when moving from prototype design to a commoditised manufactured product in parallel with Jabil's quality control reviews.

Production has commenced at the Jabil manufacturing facility in Scotland and manufacturing of internal stacks (the core technology of the battery) has been completed and these have been tested successfully at the Jabil facility.

Production is now focused on completing the build, certification and electrical testing for delivery during 2015 of ten 5kW-40kWhe units to selected customers across a range of customer applications and delivery of seven 15kW-240kWhe units to the Isle of Gigha

Shortly after the year end, REDT was awarded €400,000 by the Energy and Environmental Partnership for Southern and East Africa ("EEP") to develop and install a hybrid energy storage solution in South Africa. This project proposes to install an innovative hybrid energy system consisting of a solar PV and REDT storage system at Thaba Eco Hotel (formerly known as Thaba Ya Batswana) which currently has a weak grid connection and a back-up diesel generator.

The 240 kWh REDT system will be used alongside a 100kW photovoltaic installation and an existing diesel generator. It is anticipated that the hybrid system will enable the Eco lodge to save up to 175 MWh of electricity every year, thereby displacing an equivalent amount of power that would otherwise be generated by the diesel generator or consumed from the main grid.  With the addition of energy storage renewable penetration can reach up to 100% and the use of gensets and grid purchases can be significantly reduced, saving money and avoiding noise disturbance and CO2 emissions. This system forms part of the initial unit orders announced on 30 January 2015.

The successful demonstration of the hybrid system has the potential to assist in unlocking affordable, clean and reliable access to energy across the African continent supporting sustainable social and economic growth. Sub-Saharan Africa is home to roughly 580 million people without access to electricity. In order to meet future demand, an estimated 374 GW of power generation capacity is needed by 2030 - 12 times current levels.

Given the region's significant renewable resource base, renewables coupled with storage are expected to play a major role in meeting future energy access goals and stabilising weak grid systems. Through time shifting energy surplus, the addition of an REDT system allows the integration of higher levels of renewables; supporting greater distributed generation; increasing energy access and reducing CO2 emissions.

REDT's ability to win this award relied heavily on the expertise and presence of the Groups operations in South Africa and we expect to continue to leverage and benefit from our Africa operations as we look to grow REDT's activities in the region.

EU ETS compliance services and CDM carbon business

The EU ETS compliance services team works with installations covered by the ETS to help them manage their regulatory position. This consists of providing market updates and supplying the requisite number of allowances and offsets for them to meet their emissions obligations, or selling their surplus. Where possible offsets are sourced from the Groups portfolio, from which these installations have historically been buyers. The team also manages the legacy CDM carbon business associated with this portfolio which generated some useful revenue and cash flow in 2014 but expected to continue to a lesser extent in 2015.

Scott McGregor

Chief Executive Officer

Chief Financial Officer's Report

Overall Group result

During 2014 the Group continued to operate within its reduced and tightly controlled operating expenditure base.  This has given the Group a solid and cost effective platform to focus on its three main business segments; US, Africa, and REDH.  This clear strategic focus resulted in the continued reduction in overall trading losses, however within the context of a fall in revenue and gross margin as a result of the reduced CDM carbon activity which we had anticipated following the hibernation of that business in 2013.  

The Group continued the trend of reducing the level of losses since 2012, and reported a further reduced total comprehensive loss of (€1.9m) compared to a loss of (€3.8m) in 2013.

Gross profit reported in the year was €5.0m compared to a gross profit of €7.0m in 2013.  Gross profit for US was €2.8m (2013: €1.7m), Africa €1.2m (2013: €1.3m), REDH (CCE) €0.2m (2013: €0.06m) and Group (Other) €0.8m (2013: €3.8m).

Revenue fell to €9.9m compared to revenue in 2013 of €12.3m. Revenue for US was €5.3m (2013: €3.3m), Africa €1.8m (2013: €2.9m), REDH (CCE) €0.2m (2013: €0.06m) and Group (Other) €2.6m (2013: €6.1m).

Cost of sales reduced to €4.9m compared to €5.3m in 2013. Cost of sales for US was €2.5m (2013: €1.5m), Africa €0.7m (2013: €1.6m) and Group (Other) €1.7m (2013: €2.2m).

US business

The US business is made up of two areas - US Carbon and Operating Assets (being the Jerome and Twin Falls facilities).  The overall US business recorded revenue of €5.3m (2013: €3.3m), gross margin €2.8m (2013: €1.7m) and segmental profit €0.3m (2013: (€0.7m) loss).

US Carbon recorded revenues of €1.9m (2013: €0.8m) generating gross profit of €0.6m (2013: €0.2m), as a result of the sale of credits delivered from the agricultural methane projects for which CCOs had been issued under the California Program. 

Operating Assets generated revenues of €3.3m (2013: €2.3m), with the increase owing much to the full year utilisation of the Twin Falls facility (acquired December 2013).  Gross margin steadily increased in line with revenue, closing at €1.9m (2013: €1.5m).  As was the case in 2013, and expected to continue going forward, the facilities experienced seasonality in the revenues produced, with the second half of 2014 reporting stronger numbers off the back of higher prices set out in the power purchase agreement.

With the US business held locally in its functional currency of US Dollars, the consolidation into the Camco Group generated Balance Sheet wide FX movements of the Euro against the Dollar.  The US business continues to hold the only debt finance facilities within the Group; existing loan secured in 2013 against the Jerome facility (€11.5m - 2019 maturity), and a new finance facility attained during the year and secured against Twin Falls (€0.6m - 2020 maturity). The loan facilities recorded a net increase in outstanding balance at the end of the year due to €1.4m FX movement, with a P&L interest charge of €0.8m for the year (2013: €0.9m).  The P&L amortisation charge for the Deferred Income (Government Grant) balance held on the Balance Sheet was €0.3m in the year.  The retranslated amount on the Balance Sheet actually increased to €4.6m from €4.3m at 31 December 2013 due to FX movement.  Plant & Equipment also reported an increase due to FX - increasing to €18.6m (2013: €17.7m) despite a depreciation charge of €1.0m (2013: €0.9m).    

Africa Clean Energy business

The Africa Clean Energy business includes the 5 offices in Africa, the principle ones being Dar es Salaam (Tanzania), Johannesburg (South Africa) and Nairobi (Kenya). The overall Africa business recorded revenue of €1.8m (2013: €2.9m), gross margin €1.2m (2013: €1.3m) and segmental loss (€0.2m) (2013: (€0.1m)).

Whilst the Africa business reported a year on year reduction in revenue, the gross margin level was effectively maintained at prior year levels by strategically shifting focus towards higher margin activity.  The year also saw Camco awarded a mandate to act as joint investment advisers to Green Africa Power LLP ("GAP") using our long established consulting business in the region as a platform.  The GAP project will progress further in 2015 and help supplement the offering and revenue generated by the consulting business.  The network of Camco offices throughout Africa is key to being able to fully service the GAP mandate and also to be positioned to win further similar mandates and build on this success.

REDH (CCE)

The REDH (CCE) activity reflects the portion of the Group's overhead spent on managing the REDH business.

During the 2013 financial year the Group did not directly allocate internal cost to this activity and the prior year comparative numbers reflect limited external costs incurred and typically recovered from REDH.

Revenue in the year reflects the recovery of certain costs passed to the REDH business; €0.2m (2013: €0.1m).  Taking into consideration the allocated Administrative expenses incurred on behalf of REDH, the segmental result reported a loss of (€0.5m) (2013: (€0.02m)).

This segment also includes the Group's JV interest in REDH (53.8% holding; 49.8% on a fully diluted basis) from which 2014 yielded a share of loss of €0.13m (2013: €0.06m loss).

Group (Other)

Group (Other) comprises the CDM Carbon and EU ETS Compliance Services businesses.

The CDM Carbon business recorded; revenue €0.8m (2013: €1.0m) / gross profit €0.7m (2013: €0.9m), the majority of which was represented by cash receipts that were not anticipated.  The margin contribution to the business was much better than expected, but as previously communicated with regards to the nature of the wider CER/VER market, we are not expecting meaningful revenues in this business to continue.

The following table sets out the value of the net CER/VER carbon balances included within the Group assets as at 2014 and for prior years 2010-2013:

	2014	2013	2012	2011	2010
	€'000	€'000	€'000	€'000	€'000
Accrued Income	133	265	516	15,939	40,907
Intangible Assets - CER carbon in specie	-	-	-	644	2,030
Work in Progress - Carbon Development Contracts	-	-	-	3,199	6,053
Other CDC accruals	(599)	(1,245)	(3,175)	(7,668)	(9,207)
Payment on account received	-	-	(2,550)	(6,426)	(10,200)
Total net asset/(liability)	(466)	(980)	(5,209)	5,688	29,583

At the end of 2014, the CDM Carbon business had an effective net liability of €0.5m, reduced from €1.0m in 2013 and €5.2m in 2012.  As indicated in 2013, the Directors will continue to work diligently in reducing the remaining net liability.

EU ETS Compliance Services business provided a positive net margin to the group in the year; revenue €1.8m (2013: €3.3m) / gross profit €0.3m (2013: €0.5m).As we have set out at length previously, the nature of the wider carbon market means that we are not expecting meaningful revenues in this business to be repeated beyond the short term.

Group operating expenses

Overall administration expenses fell for the second year running, with the full impact of the changes implemented in 2013 and continued into 2014 now being realised.  Administration expenses fell during the year by €2.2m, from €9.3m to €7.1m, a fall of 24% (2013: 25% reduction) following a sustained and concentrated effort to reduce operational costs, providing Camco Group with a lean operating cost base to focus on its core business segments.

Noticeable reductions came from; personnel and contractors 26% - €3.9m (2013: €5.3m), office costs 30% - €0.7m (2013: €1.0m), professional costs (including non-executive director fees) 27% - €0.8m (2013: €1.1m), and travel and marketing 50% - €0.2m (2013: €0.4m), share based payment charge 75% - €0.1m (2013: €0.4m).

The effort to reduce operational costs have been focused on rationalising combined Group (Other) & REDH costs; €2.9m (2013: €5.4m), which encompassed concluding operations in China - €0.02m (2013: €1.1m) yielding a material saving within Group costs.  Both US and Africa operating expenses remained stable throughout the year; US €2.8m (2013: €2.7m), Africa €1.3m (2013: €1.3m), notwithstanding the US business absorbing a full year of Twin Falls expenditure (€0.2m) - thus an effective overall like for like reduction.

The Group is now centred on maintaining tight expenditure control whilst achieving greater customer focus   from the re-aligned cost base in supporting the strategic business segments.

Cash and cash equivalents

At 31 December 2014, the Group held cash and cash equivalents of €4.1m (2013: €4.5m), inclusive of cash held in debt reserve in relation to the Jerome Facility of (€0.8m) (2013: (€1.0m)) which is not available to the Group for general working capital purposes.

Camco Group has two secured loan facilities; existing loan secured in 2013 against Jerome (€11.5m - 2019 maturity), and a new finance facility attained during the year and secured against Twin Falls (€0.6m - 2020 maturity).  There are no un-secured loans held (2013: Nil).

The key movements in cash during 2014 were: capital repayment of borrowings (€0.3m); interest paid (€0.8m); proceeds from new secured loan facility €0.6m; proceeds from the issue of share capital €1.7m and cash absorbed from operations (€1.8m).

Jonathan Marren

Chief Financial Officer

Consolidated Statement of Financial Position

at 31 December 2014  

		2014	2013
		€'000	€'000
Non-current assets
Property, plant and equipment		16,613	15,581
Investments in associates and joint ventures		2,533	2,576
Other investments		-	-
Deferred tax assets		109	32
		19,255	18,189
Current assets
Prepayments and accrued income		1,896	1,452
Trade and other receivables		1,591	1,368
Cash and cash equivalents		4,057	4,472
		7,544	7,292
Total assets		26,799	25,481
Current liabilities
Loans and borrowings		(384)	(492)
Trade and other payables		(3,711)	(4,162)
Deferred income		(357)	(434)
Tax payable		(186)	(239)
		(4,638)	(5,327)
Non-current liabilities
Loans and borrowings		(11,747)	(9,884)
Deferred income		(4,251)	(4,024)
		(15,998)	(13,908)
Total liabilities		(20,636)	(19,235)
Net assets		6,163	6,246

Equity attributable to equity holders of the parent		2014 €'000	2013 €'000
Share capital		2,461	2,081
Share premium		76,917	75,640
Share-based payment reserve		756	646
Retained earnings		(74,513)	(72,330)
Translation reserve		542	209
Total equity		6,163	6,246

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2014

		2014	2013
Continuing operations		€'000	€'000
Revenue		9,948	12,305
Cost of sales		(4,908)	(5,336)
Gross profit		5,040	6,969
Other income		84	1,377
Other income - government grant income		289	276
Administrative expenses		(7,099)	(9,347)
Impairment of Investment in associates and joint ventures		-	(3)
Impairment of development costs		-	(90)
Impairment of receivables		-	(109)
Restructuring charges		-	(783)
Loss from operating activities		(1,686)	(1,710)
Financial income		26	11
Financial expenses Foreign exchange movement		(771) 250	(850) (439)
Net financing expense		(495)	(1,278)
Share of loss of equity-accounted investees		(126)	(603)
Loss before tax		(2,307)	(3,591)
Income tax credit / (expense)		124	(84)
Loss from continuing operations		(2,183)	(3,675)
Discontinued operation
Loss from discontinued operation (net of tax)		-	(72)
Loss for the year		(2,183)	(3,747)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		333	(95)
Total comprehensive income for the year		(1,850)	(3,842)
Loss for the year attributable to:
Equity holders of the parent		(2,183)	(3,747)
Total comprehensive income for the year attributable to:
Equity holders of the parent		(1,850)	(3,842)

Basic loss per share in € cents		2014	2013
From continuing operations		(0.97)	(1.89)
From continuing and discontinued operations		(0.97)	(1.93)
Diluted  loss per share in € cents
From continuing operations		(0.97)	(1.89)
From continuing and discontinued operations		(0.97)	(1.93)

Consolidated Statement of Changes in Equity

for year ended 31 December 2014      

		2014	2014	2014	2014	2014	2014	2014	2014
		Share capital	Share premium	Share-based payment reserve	Retained earnings	Translation reserve	Own shares	Total equity attributable to shareholders of the Company	Total equity
		€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance as at 1 January 2014		2,081	75,640	646	(72,330)	209	-	6,246	6,246
Total comprehensive income for the year
Loss for the year		-	-	-	(2,183)	-	-	(2,183)	(2,183)
Other comprehensive income
Foreign currency transaction differences		-	-	-	-	333	-	333	333
Total comprehensive income for the year		-	-	-	(2,183)	333	-	(1,850)	(1,850)
Transactions with owners, recorded  directly in equity
Contributions by and distributions to owners
Share-based payments		-	-	110	-	-	-	110	110
Issuance of shares		380	1,277	-	-	-	-	1,657	1,657
Total contributions by and distributions to owners		380	1,277	110	-	-	-	1,767	1,767
Balance at 31 December 2014		2,461	76,917	756	(74,513)	542	-	6,163	6,163

Consolidated Statement of Changes in Equity

for year ended 31 December 2013

		2013	2013	2013	2013	2013	2013	2013	2013
		Share capital	Share premium	Share-based payment reserve	Retained earnings	Translation reserve	Own shares	Total equity attributable to shareholders of the Company	Total equity
		€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance as at 1 January 2013		1,897	75,565	301	(68,583)	304	(14)	9,470	9,470
Total comprehensive income for the year
Loss for the year		-	-	-	(3,747)	-	-	(3,747)	(3,747)
Other comprehensive income
Foreign currency transaction differences		-	-	-	-	(95)	-	(95)	(95)
Total comprehensive income for the year		-	-	-	(3,747)	(95)	-	(3,842)	(3,842)
Transactions with owners, recorded  directly in equity
Contributions by and distributions to owners
Share-based payments		-	-	359	-	-	-	359	359
Issuance of shares		184	75	-	-	-	-	259	259
Own shares		-	-	(14)	-	-	14	-	-
Total contributions by and distributions to owners		184	75	345	-	-	14	618	618
Balance at 31 December 2013		2,081	75,640	646	(72,330)	209	-	6,246	6,246

Consolidated Statement of Cash Flow

for year ended 31 December 2014

		2014	2013
		€'000	€'000
Cash flows from operating activities
Cash absorbed by operations		(1,780)	(4,487)
Income tax paid		-	-
Net cash outflow from operating activities		(1,780)	(4,487)
Cash flows from investing activities
Disposal of discontinued operations, net of cash disposed of		-	(72)
Proceed from sales of investments		-	4,357
Acquisition of property, plant and equipment		(31)	(1,973)
Disposal of property, plant and equipment		84	1,241
Loan to joint venture		-	(200)
Net cash inflow from investing activities		53	3,353
Cash flows from financing activities
Proceeds from the issue of share capital		1,657	259
Proceeds from new loan		625	-
Repayment of borrowings		(260)	(4,711)
Interest received		26	11
Interest paid		(771)	(850)
Net cash inflow / (outflow) from financing activities		1,277	(5,291)
Net (decrease) in net cash and cash equivalents		(450)	(6,425)
Net cash and cash equivalents at 1 January		4,472	11,087
Effect of foreign exchange rate fluctuations on cash held		35	(190)
Net cash and cash equivalents at 31 December		4,057	4,472

Consolidated Statement of Cash Flow

for year ended 31 December 2014

			2014		2013
			€'000		€'000
(a) Cash flows from operating activities
Loss for the period			(2,183)		(3,747)
Adjustments for:
Depreciation			1,063		1,097
Gain on sale of fixed assets			(84)		(68)
Amortisation of deferred income			(313)		(276)
Impairment of investments in associates and joint ventures			-		3
Impairment of receivables - bad debt write-off			60		109
Share of loss of equity accounted investees			126		603
Loss on sale of discontinued operation, net of tax			-		72
Gain on sale of investment			-		(547)
Gain on sale of subsidiary			-		(762)
Share-based payment transactions			110		359
Income tax			(124)		56
Finance cost			745		839
Foreign exchange loss on translation			113		229
Restructuring costs			-		783
Impairment loss on development costs			-		90
Operating cash outflow before movements in working capital			(487)		(1,160)
Changes in working capital
Decrease in intangible assets			-		313
(Increase) / decrease in prepayments			(302)		103
(Increase) in trade and other receivables			(284)		(154)
Change in CDC accruals and CDC accrued income			(514)		(5,733)
(Increase) in accrued income-Non CDC			(274)		(447)
Increase in trade and other payables-Non CDC			81		2,591
Cash generated by operations			(1,780)		(4,487)

Notes

1        Accounting policies

Camco Clean Energy plc (the "Company") is a public company incorporated in Jersey under the Companies (Jersey) Law 1991.   The address of its registered office is 3rd floor, Standard Bank House, 47-49 La Motte Street, St Helier Jersey, JE2 4SZ.  The consolidated financial statements of the Company for the year ended 31 December 2014 comprise of the Company, its subsidiaries and associates and jointly controlled entities (together the "Group").  The Company is admitted to the AIM, a market operated by London Stock Exchange Plc.

A  Statement of compliance

These consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ("adopted IFRS").

These consolidated financial statements have been prepared in accordance with and in compliance with the Companies (Jersey) Law 1991 an amendment to which means separate parent company financial statements are not required.

B  Basis of preparation

The financial statements are presented in Euros, the functional currency of the Company, rounded to the nearest thousand Euros.

The preparation of financial statements in conformity with adopted IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

The accounting policies set out below have been applied consistently in the year and presented in these consolidated financial statements.  The accounting policies have been consistently applied across all Group entities for the purposes of producing these consolidated financial statements.

The financial statements have been prepared on the historical cost basis and on a going concern basis. 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Financial Officer's report.  The financial position of the Group, its cash flows and liquidity position are described in the same review.

The Group has sufficient financial resources together with long-term relationships with a number of customers across different geographical areas and industries.  As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

The Directors are satisfied that the Group has adequate resources to continue to operate for the foreseeable future. For this reason, they consider it appropriate for the financial statements to be prepared on a going concern basis.

C  Accounting for Carbon Development Contracts ("CDCs")

The Group enters into CDCs with clients from which carbon credits are received.  Carbon credits under the Kyoto Protocol, also known as Certified Emission Reductions ("CERs") or Emission Reduction Units ("ERUs") are generated through the highly regulated Carbon Development Mechanism ("CDM") and Joint Implementation ("JI") processes respectively.  These follow a number of steps including the approval of the project methodology and monitoring procedures, project design, project approval by the Designated National Authority ("DNA"), project validation by a Designated Operational Entity or equivalent ("DOE"), project acceptance by the host country, registration, verification and certification by a DOE.  Verification of carbon credit production normally takes place at least once a year during the crediting period.  The Group works with the client at all stages of the process using proprietary knowledge and experience to negotiate this complex process.  Carbon credits are also generated outside the Kyoto Protocol under voluntary or regional emission reduction schemes.

Revenue recognition on CDC consultancy services

The Group derives revenue from the provision of consultancy services to carbon project clients under CDCs. The Group receives payment for the services by either cash commission or non-cash carbon credit.  Revenue from CDCs is only recognised once the Group's services to secure the production of carbon credits are significantly complete and receipt of the consideration, be it cash or carbon credits, can be forecast reliably.  Revenue is recognised once a CDC is registered by a DOE (where payment is due to Camco irrespective of a CDC's registration this criteria will not apply) and Camco has provided significantly all of its services.

The timing of revenue collection is uncertain as carbon credits may be generated over subsequent years as they are issued.  The amount and timing of commission or carbon credits to be received may be dependent upon the number of carbon credits received by the customers, which is determined by assessing the specific technical, contract and economic risks identified on the project.

Revenue is recognised at the fair value of the consideration receivable from the contracts, at which point accrued income is recognised. If a CDC will result in a probable net outflow of economic benefit from the Group then this amount will be recognised in accrued expenses.  The fair value is the estimated net value of the carbon credits to be received, which is dependent upon the expected number to be delivered and the intrinsic value.  If the expected number or value of the carbon credits subsequently changes an adjustment is made to the accrued income balance with an associated credit or debit taken to revenue.  The unwinding of any financing element of accrued income is recognised as finance income or expense.

The CDCs are scheduled to deliver of carbon credits under Clean Development Mechanism and other regional schemes until at least 2020. The Group and Company has taken advantage of the own use exemption in relation to carbon credits and as such does not account for the contract under IAS 39 and 32.

Treatment of CDC costs

CDC costs are presented under current assets as work in progress.  CDCs acquired by the Group are recorded initially at cost (or fair value if through business combination).

Subsequently, the directly attributable costs are added to the carrying amount of CDCs. These costs are only carried forward to the extent that they are expected to be recouped through the successful completion of the contracts.  The costs comprise consultancy fees, license costs, technical work and directly attributable administrative costs.  All other costs are expensed as incurred.  CDC costs carried as work in progress are stated at the lower of cost and net realisable value.     

Once the revenue recognition criteria on these contracts are met the CDC costs incurred on them are expensed in full. Accrued income is derecognised when cash is received either as commission or in respect of sales of carbon credits or rights to carbon credits receivable under the CDC consultancy contracts.

D  Revenue recognition on US carbon credits

The Group derives revenue from (CCOs) California Carbon Offset Credits that are generated through its US Biogas Operations. The policy is to recognise value for the credits generated during the period once a project has been registered and issued its first offsets under a California Air Resources Board (ARB) approved offsets protocol. To be registered and issued offsets the project must go through a process of being verified by an approved body and only once this has been carried out successfully does the Group have reasonable certainty that credits generated during each year will be issued at the end of that year in relation to the project. The value placed on the credits is based on the contracted price Camco will receive, or if the credits are not sold, the prevailing market rate.

E  Revenue recognition on other consultancy services

Advisory revenue from consultancy services provided is recognised in the income statement in proportion to the stage of completion of the consultancy contract.  The stage of completion is assessed by reference to the overall contract value.

Project revenue consists of development fees, management service fees and revenue derived directly from projects where Camco holds an ownership interest.

F  Revenue Recognition on project related income

The Group derives revenue from its US clean energy projects from the sale of electricity, fibre and renewable energy certificates ("RECs"). Electricity is sold under a long-term Power Purchase Agreement ("PPA") and the revenue recognised when electricity is delivered to the transmission point for distribution. Fiber revenue is recognised upon production and delivery of the fibre and RECs are recognised when the renewable energy is generated.  The fiber and REC's are sold under the terms of existing contracts.

G Revenue Recognition on EU ETS compliance services

The Group derives revenue from its EU ETS compliance services activities from the sale of emissions allowances and offsets to its clients.  The revenue recorded is based on the sale price per emission allowance or offset, with the associated cost based upon the purchase price per emission allowance or offset subsequently sold.  Both the revenue and cost are booked simultaneously as per the transaction date.

H  Intangible assets

Carbon in specie The Group has a number of carbon credit registry accounts used to receive carbon credits from its projects.  These carbon credits are either transferred to buyers under existing sales contracts or, in the case of in specie consideration to the Group, sold for cash.  Carbon credits held at the balance sheet date are recognised as an intangible asset and valued at the relevant market price or contract price.

I  Property, plant and equipment

Computer and office equipment Computer and office equipment is held at historical cost less accumulated depreciation and impairment losses.  Depreciation is charged to the income statement on a straight line basis over the estimated useful life of three years.

Leasehold improvements Leasehold improvements are held at historical cost less accumulated depreciation and impairment losses.  Depreciation is charged to the income statement on a straight line basis over the remaining life of the lease.

Construction in Progress items are held at historical cost and are depreciated from the date the asset is completed and ready for use.

Project plant and equipment Project plant and equipment is held at historical cost less accumulated depreciation and impairment losses.  Depreciation is charged to the income statement on a straight line basis over the estimated useful life of the asset.

J  Investments in subsidiaries 

Investments in subsidiaries are carried at cost less provision for impairment.

K  Impairment 

The carrying amounts of the Group's property, plant and equipment, goodwill and other intangibles are reviewed at least annually to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.  For assets that have an indefinite useful life the recoverable amount is estimated at each balance sheet date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised immediately in the income statement.  The recoverable amount is the greater of the fair value less cost to sell and the value in use.  Value in use is calculated as the present value of estimated future cash flows discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.  A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

An impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net of depreciation and amortisation, if no impairment loss had been recognised.  An impairment loss in respect of goodwill on acquisition is not reversed.

L  Foreign exchange

Foreign currency transactions  

Transactions in currencies different from the functional currency of the Group entity entering into the transaction are translated at the exchange rate ruling at the date of the transaction.  Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date.  Foreign exchange differences arising on translation are recognised in the income statement.  Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rate at the date of transaction.

FX rates (Euro) as applied in the year-end financial statements: GBP 0.7816, USD 1.2165, CNY 7.5439, KES 110.2329, TZS 2121.3407, ZAR 14.0701

M  Available-for-sale financial assets

The Group's investments in equity securities are classified as available-for-sale financial assets.  Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, and foreign exchange gains and losses on available-for-sale monetary items, are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.  For the purposes of the cash flow statement, cash and cash equivalents comprise cash and short-term deposits as defined above and other short-term highly liquid investments that are readily convertible into cash and are subject to insignificant risk of changes in value, net of bank overdrafts.

N  Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to a business combinations, or items recognised directly in equity, or in comprehensive income.

Current tax is the expected tax payable or recoverable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to the tax payable in respect of previous years.

O  Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets corporate expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

P  Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

Q  Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

R  Government Grant

In August 2012, a federal grant was received from the United States in connection with a project asset.  The grant was recognised as deferred income at fair value as there was reasonable assurance that all conditions associated with the grant would be complied with.  The revenue is then recognised in the profit and loss as project revenue on a systematic basis over the useful life of the asset.

The grant is reimbursable to the United States Department of Treasury if the asset is disposed of to a disqualified person or ceases to qualify as a specified energy project within five years from the date the property is placed in service.

S  Leased assets

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group's incremental borrowing rate.

T  Finance income and expense

Finance income comprises interest income on surplus funds, unwinding of the discount on provisions and accrued costs. Interest income is recognised as it accrues in profit or loss using the effective interest method.

Finance expenses comprise interest expense on borrowings, finance leases and unwinding of the discount on provisions and accrued costs.  All borrowing costs are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses arising from a group of similar transactions are reported on a net basis.

U  Non-derivative financial liabilities

The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, trade and other payables and payments on account.  Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

2          Segmental reporting

Operating segments

To reflect the change in focus of the business since the completion of the restructuring at the end of 2013, the Group reports these results in line with the following main reporting segments:

1.    US: In America, the Group develops and designs and also builds, owns and operates (BOO) biogas projects generating energy from organic waste. CCE currently owns the Jerome and Twin Falls facilities which produce sustainable energy generated by using agricultural methane from dairy farms. The Group also develops Californian offset projects.

2.    Africa Clean Energy: Africa manages investment of public and private finance into clean energy projects.  CCE has five offices across Africa and an office in London which provides consulting services and the development of clean energy projects across Africa.  Currently this segment operates an investment advisory mandate to manage a debt facility for Green Africa Power (GAP).

3.      REDH (CCE): The REDH (CCE) segment comprises aspects of the Group's overheads allocated to the management and development of the REDT energy storage business, with revenue reflective of the recovery of an apportionment of the costs incurred and passed directly to the REDH business.  The operating segment also includes the share of profit / loss on an equity accounted basis from REDT, as well as the value of the investment held within the Camco Group.

4.      Group (Other): This segment contains all remaining Group costs in addition to the Group's remaining non US carbon business - comprising CDM Carbon and EU ETS Compliance Services.

Inter segment transactions are carried out at arm's length.

Group also views its business geographically:  EMEA (including Europe, Middle East and Africa), ASIA (China and South East Asia), and North America (mainly USA)

Operating segments	US		Africa		REDH (CCE)		Group (Other)		Consolidated
		Restated		Restated		Restated		Restated		Restated
	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Segment revenue	5,317	3,263	1,820	2,929	237	61	2,574	6,052	9,948	12,305
Segment gross margin	2,793	1,748	1,170	1,348	237	61	840	3,812	5,040	6,969
Other income - gain on disposal	84	68	-	-	-	-	-	-	84	68
Other income - deferred income	289	276	-	-	-	-	-	-	289	276
Segment administrative expenses	(2,827)	(2,672)	(1,330)	(1,275)	(703)	(46)	(2,129)	(4,995)	(6,989)	(8,988)
Restructuring charges	-	-	-	-	-	-	-	(783)	-	(783)
Impairment of development costs	-	(90)	-	-	-	-	-	-	-	(90)
Impairment of investment	-	-	-	-	-	-	-	(3)	-	(3)
Segment result	339	(670)	(160)	73	(466)	15	(1,289)	(1,969)	(1,576)	(2,551)
Unallocated income - gain on disposal									-	1,309
Share-based payments									(110)	(359)
Impairment of receivables									-	(109)
Results from operating activities									(1,686)	(1,710)
Finance income									26	11
Finance expense									(771)	(850)
Foreign exchange movement									250	(439)
Share of loss of equity accounted investees					(126)	(56)			(126)	(603)
Taxation									124	(84)
(Loss) from discontinued operation (net of income tax)									-	(72)
Loss for the year					(592)	(41)			(2,183)	(3,747)
Segment assets	18,643	17,728	2,467	2,630	-	-	3,156	2,547	24,266	22,905
Other investments	-	-	-	-	2,533	2,576	-	-	2,533	2,576
Total assets	18,643	17,728	2,467	2,630	2,533	2,576	3,156	2,547	26,799	25,481
Segment liabilities	(17,358)	(15,045)	(599)	(839)	-	-	(2,679)	(3,351)	(20,636)	(19,235)
Total liabilities	(17,358)	(15,045)	(599)	(839)	-	-	(2,679)	(3,351)	(20,636)	(19,235)
Capital expenditure	16	-	15	-	-	-	-	14	31	14
Depreciation	1,009	864	15	29	-	-	39	204	1,063	1,097

 

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of its customers, segment assets are based on the geographical location of the asset.

Geographical information

Revenue by geographical region of projects:	2014	2013
	€'000	€'000
EMEA	3,857	5,479
USA	5,317	3,354
ASIA	774	3,472
Total revenue	9,948	12,305

Revenue by domicile of Group entity that owns the projects:	2014	2013
	€'000	€'000
EMEA	3,857	8,128
USA	5,317	3,267
ASIA	774	910
Total revenue	9,948	12,305

The Group derives carbon revenue from the provision of consultancy services to carbon clients under CDCs as well as EU ETS compliance services, where the Group works with clients covered by the ETS to help them manage their regulatory position. With respect to this carbon revenue, the geographic analysis has been prepared based on the geographic location of the project that will generate the carbon credits. This location is not the geographic location of the carbon credit buyer and not necessarily where the services were performed.

Non-current assets by geographical region:	2014	2013
	€'000	€'000
EMEA	2,681	1,817
USA	16,574	15,507
ASIA	-	865
Non-current assets	19,255	18,189

3    Revenue

By reporting segments:	2014	Restated 2013
	€'000	€'000
US Africa REDH (CCE)	5,317 1,820 237	3,263 2,929 61
Group (Other)	2,574	6,052
Total revenue	9,948	12,305

4    Other income

	2014	2013
	€'000	€'000
Net gain on disposal of investment	-	547
Net gain on disposal of subsidiary	-	762
Net gain on disposal of fixed asset	84	68
Total other income	84	1,377

5    Expenses and auditor's remuneration

Included in comprehensive income are the following:

	2014	2013
	€'000	€'000
Depreciation of property, plant and equipment - owned assets	1,063	1,097
Operating lease rental - land and buildings Share-based payments	215 110	328 359
Impairment of investment	-	3
Impairment of development costs	-	90
Impairment of receivables	-	109
Other expenses - restructuring charges	-	783

Services provided by the Group's auditor:

During the year the Group obtained the following services from the Company's auditor, KPMG LLP:

	2014	2013
	€'000	€'000
Audit of these financial statements	89	97
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation	16	17
Total services	105	114

Non-audit services- there were no non-audit services provided in the year.

6     Staff numbers and costs

The average number of persons employed by the Group (including Directors) during the year, analysed by category, was as follows:

			Number of employees
			2014	2013
US			8	10
Africa			42	44
Group (Other)			15	24
			65	78

The aggregate payroll costs of continuing operations were as follows:

			2014	2013
			€'000	€'000
Wages and salaries*			3,523	4,603
Share-based payments			110	359
Social security costs			323	348
			3,956	5,310
Wages and salaries shown above include salaries paid in the year and bonuses relating to the year.  These costs are charged within administration expenses. *Included within wages and salaries is €14,114 of redundancy payments (2013:€163,764).

7    Net finance expense

	2014	2013
	€'000	€'000
Finance income
Interest on bank deposits	24	6
Unwinding of discount on accrued revenue	2	5
	26	11
Finance expense
Interest on borrowings	(767)	(777)
Other interest	(4)	(73)
Foreign exchange movements	(771) ________ 250	(850) ________ (439)
Net finance expense	(495)	(1,278)

8    Loss per share

Loss per share attributable to equity holders of the Company is calculated as follows:

	2014	2013
	€ cents per share	€ cents per share
Basic loss per share
From continuing operations	(0.97)	(1.89)
From continuing and discontinued operations	(0.97)	(1.93)
Diluted loss per share
From continuing operations	(0.97)	(1.89)
From continuing and discontinued operations	(0.97)	(1.93)
Loss used in calculation of basic and diluted loss per share	€'000	€'000
From continuing operations	(2,183)	(3,675)
From continuing and discontinued operations	(2,183)	(3,747)
Weighted average number of shares used in calculation
Basic	224,996,447	194,316,128
Diluted	224,996,447	194,316,128
Weighted average number of shares used in calculation - basic and diluted
		2014	2013
		Number	Number
Number in issue at 1 January		208,127,166	189,678,093
Effect of own shares held		-	-
Effect of share options exercised		-	-
Effect of shares issued in the year		16,869,281	4,638,035
Weighted average number of basic shares at 31 December		224,996,447	194,316,128

9    Property, plant and equipment

Computer and office equipment
				2014	2013
				€'000	€'000
Cost at 1 January				351	1,312
Additions				15	44
Disposals				(21)	(780)
Reclassification				-	(219)
Effect of movements in foreign exchange				19	(6)
Cost at 31 December				364	351
Accumulated depreciation at 1 January				(276)	(1,027)
Charge for the year				(54)	(152)
Disposals				21	899
Effect of movements in foreign exchange				(16)	4
Accumulated depreciation at 31 December				(325)	(276)
Net book value at 1 January				75	285
Net book value at 31 December				39	75
Leasehold improvements
			2014		2013
			€'000		€'000
Cost at 1 January			-		688
Additions			-		3
Disposals			-		(689)
Effect of movements in foreign exchange			-		(2)
Cost at 31 December			-		-
Accumulated depreciation at 1 January			-		(504)
Charge for the year			-		(93)
Disposals			-		595
Effect of movements in foreign exchange			-		2
Accumulated depreciation at 31 December			-		-
Net book value at 1 January			-		184
Net book value at 31 December			-		-

 

Construction in Progress
		2014	2013
		€'000	€'000
Cost at 1 January		-	1,752
Disposals		-	(1,752)
Cost at 31 December		-	-
Accumulated depreciation and impairment losses at 1 January		-	(528)
Disposal		-	528
Accumulated depreciation and impairment losses at 31 December		-	-
Net book value at 1 January		-	1,224
Net book value at 31 December		-	-

Project plant and equipment
		2014	2013
		€'000	€'000
Cost at 1 January		16,608	15,228
Acquired through business combination		-	1,907
Additions		16	-
Reclassification		-	148
Effect of movements in foreign exchange		2,286	(675)
Cost at 31 December		18,910	16,608
Accumulated depreciation at 1 January		(1,102)	(363)
Charge for the year		(1,009)	(852)
Reclassification		-	71
Effect of movements in foreign exchange		(225)	42
Accumulated depreciation at 31 December		(2,336)	(1,102)
Net book value at 1 January		15,506	14,865
Net book value at 31 December		16,574	15,506

Total property, plant and equipment
				2014	2013
				€'000	€'000
Cost at 1 January				16,959	18,980
Acquired through business combination				-	1,907
Additions				31	47
Disposals				(21)	(3,221)
Reclassification				-	(71)
Effect of movements in foreign exchange				2,305	(683)
Cost at 31 December				19,274	16,959
Accumulated depreciation and impairment losses at 1 January				(1,378)	(2,422)
Charge for the year				(1,063)	(1,097)
Disposals				21	2,022
Reclassification				-	71
Effect of movements in foreign exchange				(241)	48
Accumulated depreciation and impairment losses at 31 December				(2,661)	(1,378)
Net book value at 1 January				15,581	16,558
Net book value at 31 December				16,613	15,581

 

10   Investments in Associates and Joint Ventures

Investments in Associates and Joint ventures held on Balance Sheet are as follows;

			REDH
			€'000
Balance at 1 January 2014			2,576
Share of loss			(126)
Foreign exchange  movement			83
			-
Balance as 31 December 2014			2,533
			-

11   Prepayments and accrued income

		2014	2013
		€'000	€'000
Prepayments		466	164
Accrued income - CDC accruals		133	265
Accrued income - US		942	568
Accrued income - Africa		355	455
			______
		1,896	1,452
			______

12   Trade and other receivables

		2014	2013
		€'000	€'000
Trade receivables		968	611
Other receivables		623	535
Cash on deposit against bank guarantee		-	222
		1,591	1,368

 

13   Cash and cash equivalents

		2014	2013
		€'000	€'000
Cash on deposit		3,290	3,492
Cash held for restricted use*		767	980
		4,057	4,472

 

* Included within cash and cash equivalents is a debt reserve balance of €767,000 (2013: €980,000) in relation to the Jerome Facility (US).

 

14   Trade and other payables

		2014	2013
		€'000	€'000
Trade payables and non CDC accruals		3,112	2,917
Other accruals - CDC accruals		599	1,245
		3,711	4,162

15   Deferred Income

	2014	2013
	€'000	€'000
Non-current liabilities
Deferred income - grant	4,251	4,024
	4,251	4,024
Current liabilities
Deferred income - grant	313	276
Deferred income - other	44	158
	357	434

During 2014, the Group recognised $380,496 (€288,545) (2013: $380,496 (€275,846)) of government grant income in the Statement of Comprehensive Income.

16   Loans and borrowings

			Nominal		2014	2013
		Currency	Rate	Maturity	€'000	€'000
Non-current liabilities
Secured loan - Jerome Secured loan - Twin Falls		USD USD	7.05% 5.75%	2019 2020	11,243 504	9,884 -
					11,747	9,884
Current liabilities					€'000	€'000
Secured loan - Jerome Secured loan - Twin Falls		USD USD	7.05% 5.75%	2015 2015	287 97	492 -
					384	492

The secured loans are secured against the related US biogas facilities

17   Related parties

The Group has various related parties stemming from relationships with founding shareholders, a related business partner and key management personnel.

Shareholders and related business partners

The Group's related business partner is Consortia Partnership Limited ("Consortia") who has been appointed Company Secretary.  Michael Farrow, a non-executive Director of the Company, is a Director of Consortia.  Consortia also provide accounting services to the Company.  The amounts charged to administration expenses in respect of these services are shown in the table below.

Income statement
		2014	2013
		€'000	€'000
Administrative expenses:
Consortia Partnership Limited		48	36

Balance sheet
		2014	2013
Trade and other payables:		€'000	€'000
Consortia  Partnership Limited		-	-

18   Post balance sheet events

Post the year end, the Group concluded a structured transaction which assigned rights to the future stream of certain CCOs generated between 2015 and 2020 from the majority of Agricultural Methane projects that it manages.  As part of the structure, Camco received an initial cash payment of $1.74 million. Additionally Camco may receive a deferred and conditional payment of up to $0.5 million by 31 December 2015.

19   Posting of 2014 Annual Report and Accounts and availability on website

The 2014 Annual Report and Accounts will be posted to shareholders on 1 June 2015 and will be available on the Company's website www.camcocleanenergy.com shortly.

 

END

 

 

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