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Leaf Clean Energy Co (LEAF)

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Monday 28 March, 2011

Leaf Clean Energy Co

Half Yearly Report

RNS Number : 6777D
Leaf Clean Energy Company
28 March 2011
 



 

 

 

 

28 March 2011

 

 

Leaf Clean Energy Company

Results for the period ended 31 December 2010

 

 

The board of Leaf Clean Energy Company ("Leaf" or "the Company") are pleased to announce the Company's interim results for the period ended 31 December 2010

 

Highlights of the period are:

 

·      Leaf made an additional US$25 million of direct equity and debt investments into existing portfolio businesses.

 

·      The Company earned US$2.0 million of interest income from debt investments in the portfolio companies.  This income has been recorded in the intermediate holding companies and included in the assessment of valuations for the relevant subsidiaries.

 

·      The Company repurchased 5.9 million shares at an average price of 70.64p, taking advantage of the weakness in the Company's share price to deliver value to shareholders.

 

·      NAV per share for the Leaf portfolio was 169.11 cents or 108.0 pence at US$1.5657 to the £1.  This was an increase of 0.9% for the six month period from 30 June 2010 and 6.9% for the one year period from 31 December 2009.

 

For further information, please contact: 

 

 

Ivonne Cantu / Elizabeth Bowman                                                   +44 (0) 207 397 8900 

Cenkos Securities plc 


CHAIRMAN'S STATEMENT


I am pleased to report on the progress made by Leaf Clean Energy Company ("Leaf" or the "Company") in the six months ended 31 December 2010.  During the period your Company focused on building an in-house team capable of actively managing our portfolio companies.  An important element of our strategy was to ensure that additional operational expertise was brought to bear in order to manage the portfolio in the most effective manner and drive further value from our investments.  This focus has delivered greater stability and has served the Company and its investee companies well.  I am encouraged by Leaf's performance and continue to believe that we are well positioned to deliver on our goals.

 

Portfolio performance

 

I would like to take this opportunity to recognize the extraordinary accomplishments of the new Leaf management team over the past nine months.  Under the leadership of executive director, Bran Keogh, they have established a Washington, DC, office; identified and recruited an excellent team of investment professionals; and implemented new controls and procedures appropriate for the business.  At the same time, they completed a review of the Leaf portfolio to identify and implement additional opportunities at our investee companies to maximize their value.  All of this has been achieved with a significant reduction in cost compared to that of the former asset advisor. 

 

I would also like to thank my fellow non-executive board members for their increased involvement, keen insights and tireless efforts in overseeing the transition from the former asset advisor to the new in-house team.

 

Performance across Leaf's portfolio continues to be satisfactory.  The economic slowdown and sharp contraction in credit markets has diminished lending activity and thereby impaired the pace of project development and consequently growth. In particular, companies that relied on project finance were adversely affected, since the flow of debt and equity investments into renewable energy projects was disrupted.  Nevertheless, the development of our portfolio continues apace and our investee companies have by and large continued to make progress, contending well with the pressure of this challenging environment.  As the Leaf portfolio starts to mature, we will continue to explore potential opportunities to realise financial rewards for our shareholders.

 

Several of our portfolio companies have recently achieved critical milestones:

 

§  Vital Renewable Energy Company (VREC) consummated the acquisition of an operating ethanol production facility in Goias, Brazil.  This is VREC's first acquisition of an operational asset and offers significant expansion potential that will be aggressively pursued by the company, complementing organically its envisioned growth via follow-on acquisitions;  

 

§  SkyFuel has secured independent verification and validation of product performance, industry peer recognition of the innovativeness of its technology, and successful completion of certain testing programs.  As a result, the company expects to begin commercial sales of its equipment this year;

 

§  Miasolé has maintained its recent strong momentum by attaining UL certification on its 13.0 per cent efficiency CIGS solar panels, the highest level to date for commercial-size CIGS modules.  The company expects to commence shipment of these higher-efficiency modules in the second quarter of 2011.

 

Economic and political background

 

The business environment in which Leaf operates continues to improve.  The U.S. economy is showing renewed signs of strength, driven primarily by near-record-low interest rates, as well as substantial fiscal stimulus programs undertaken by federal and state governments to reinvigorate economic activity.  Additionally, there has been an improvement across credit and equity markets over the first half of the financial year, with the latter appreciably above their lows of early 2009.  These positive signs offer the prospect that momentum will build in our markets through the second half of our fiscal year.

 

Another positive development has been the improvement in the environment for realisations.  The U.S. clean tech sector saw eight successful public offerings, raising more than $1.2 billion during the period covered by this report - well above last year's equivalents.  Merger & acquisition activity has remained steady.  Looking forward, economic fundamentals in the markets of focus for your Company continue to rally and this creates a positive medium-term outlook.  Your Company is well placed to take advantage of the rebound in economic activity and business sentiment, to generate value from its portfolio.

 

Despite the positive market developments, the recent congressional elections in the U.S. have heralded movements which some commentators expect will lead to significant political change in the coming months.  As a result, there is some uncertainty about the regulatory and policy framework in the short term.  It is too soon to judge the implications, if any, for our business of these political developments. However, it is our expectation that the medium- to long-term outlook will remain supportive of our industry and businesses.

 

Net assets

 

During the year ended 31 December 2010, Leaf's net asset value (NAV) per share rose by 6.9 per cent, from 158.23 cents to 169.11 cents, with 0.9 per cent of this increase occurring during the six month period of this interim report.  The one-year increase resulted mainly from share repurchases, more than offsetting the impact of the buyout of the former asset advisor.  Of our US$232 million of net assets, US$52 million was held in cash, of which US$3 million is committed to portfolio companies. The Board is of the view that the balance of US$49 million provides sufficient liquidity to meet the needs of the portfolio.

 

Outlook

 

Leaf continues to perform well and is strongly positioned to grow and develop.  The broader outlook for markets continues to be positive.  Our priorities for the second half of the year are to continue to commit significant resources to managing the investments we have made in our portfolio companies.  Our intention remains to deliver growth and value for our shareholders and your Board believes that there are grounds for confidence in both the short- and medium term.  I look forward to reporting further progress at the end of the fiscal year.

 

The Interim Report and Accounts set out below incorporate both financial statements for the Company and consolidated financial statements for the wider Leaf Group.  References to NAV in my report and the Management Report reflect the Company's NAV.

 

 

 

Peter Tom

Chairman

28 March 2011

 

 

 

(1) Based on US$/£ exchange rate of 1.5657 on 31 December2010

 

 

 

MANAGEMENT REPORT

 

During this interim period the Leaf management team continued Leaf's strategy of focusing on its existing portfolio of investee companies and on building its in-house capabilities, while keeping a careful eye out for potential new investment opportunities.  While the operating environment faced by Leaf and its investee companies continues to be challenging, the macro environment shows continuing signs of improvement, and Leaf management remains confident that its work with the portfolio and its internal organization will produce satisfactory results for the Company.

 

Leaf management and the Leaf Board reviewed a number of new opportunities during the six months period ending 31 December 2010 but Leaf decided not to make any new investments.  Leaf will continue to actively seek new, high-quality investment opportunities. Additionally, management has ensured that Leaf has adequately reserved capital to meet the needs of its portfolio. For the period under review, Leaf has made additional investments in several of its current investee companies and has continued to provide significant operational support to these companies as well.  Leaf management would like to highlight several noteworthy events:

 

·      Leaf made an additional US$25 million of direct equity and debt investments into existing portfolio businesses.

 

·      The Company earned US$2.0 million of interest income from debt investments in the portfolio companies.  This income has been recorded in the intermediate holding companies and included in the assessment of valuations for the relevant subsidiaries.

 

·      The Company repurchased 5.9 million shares at an average price of 70.64p, taking advantage of the weakness in the Company's share price to deliver value to shareholders.

 

·      Leaf achieved significant cost reductions during the interim period versus the prior period as a result of replacing the former asset advisor with an in house management team (see Notes 8 and 9 to the Company financial statements).

 

Financial Performance

 

Leaf's total NAV on 31 December 2010 was US$232 million, US$7.9 million lower than the NAV at 30 June 2010.  The change in NAV over the interim period resulted mainly from a US$6.7 million share repurchase, with the balance being the Company's US$1.2 million comprehensive loss for the period.  US$52 million of the Company's NAV was held in cash and US$185 million in investments.

 

NAV per share for the Leaf portfolio was 169.11 cents or 108.0 pence at US$1.5657 to the £1.  This was an increase of 0.9% for the six month period from 30 June 2010 and 6.9% for the one year period from 31 December 2009. The increase for the one year period was due primarily to share repurchases (+13.9%), offset by termination costs of the former asset advisor (-3.1%), the comprehensive loss for the period (-3.0%), and exchange rate losses (-1.0%).  The increase for the six month period to 31 December 2010 was due primarily to share repurchases (+1.4%) offset by the comprehensive loss for the period (-0.6%).

 

Some key performance milestones achieved by Leaf Clean Energy and its portfolio companies during the past year included:

·      MiaSolé announced that the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) had independently confirmed the 15.7% efficiency of its large area production modules. This new world record for highest efficiency of commercial scale thin-film solar modules beats MiaSolé's own previous record and will allow MiaSolé to offer solar modules with the efficiency of polysilicon and the lower manufacturing costs of thin-film modules. 

 

·      VREC closed its acquisition of an operating ethanol production facility in Goias, Brazil. 

 

·      SkyFuel won the "CSP Commercialized Technology Innovation of the Year" award, relocated and consolidated its headquarters to Colorado in preparation for an anticipated commercial expansion, and surpassed the 25 year weathering mark in the National Renewable Energy Lab (NREL) testing at NREL's UltraAccelerated Weathering Station (UAWS)for its ReflecTech® Mirror Film, demonstrating long term durability against ultraviolet (UV) radiation.

Market Environment

Leaf's fiscal first half ended 31 December 2010 saw continued strengthening of the U.S. economy and the public stock markets along with growing signs of a thaw in the credit markets.  The U.S. elections in November brought Republican control of the House of Representatives, which will have implications for renewable energy in the short term, although it remains unclear exactly what those implications are. On the positive side, the lame duck U.S. Congress passed a one year extension of the section 1603 federal tax grant program. In another positive development, President Obama's budget proposal to the new Congress demonstrated his administration's continued commitment with respect to federal spending and policies promoting renewable energy projects and programs in the U.S., including US$8 billion (a one-third increase) for clean energy projects, even in the face of spending freezes and cuts affecting a broad swath of the federal budget.  Another positive note was the resounding defeat in California of Proposition 23, the passage of which would have repealed a key California law that has created the most supportive environment in the US for renewable energy standards.  Significantly, Californians defeated this measure despite a very troubled local economy.

Venture Capital and private equity investment in the clean energy industry declined in dollar terms during the second half of calendar 2010, mainly due to fewer big deals occurring as compared to the first half of 2010.  However, the number of deals remained flat and was up for the year versus calendar 2009.  For the calendar year, the top investment sector for clean energy was solar, with 24% of total investment dollars invested in solar related companies. The M&A market for 2010 was up slightly in terms of the number of deals but showed significant growth (43%) over 2009 in total dollar value terms.

In the public markets, prices of renewable energy companies, as measured by the NEX index, have continued their modest recovery and appear to be picking up steam.  The NEX index underperformed the S&P 500 by more than 20% for 2010.  However, growth in the NEX accelerated and outpaced the S&P 500 during the second half of 2010, increasing by 26.5% as compared to 21.9% for the S&P 500.  The NEX price remains less than half of its 2007 high, however and continued high growth will be necessary before public market valuations for renewable energy companies ease their pressure on private company valuations.

Outlook

 

Leaf's management believes that the diversity and balance of the Leaf portfolio together with its focus on management attention and support for the existing investee companies will position the Company to benefit from the continuing improvements in the current economic environment. Management is focused on building upon the progress made over the past six months to deliver growth.

 

28 March 2011

 

 

INDEPENDENT REVIEW REPORT TO LEAF CLEAN ENERGY COMPANY

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 December 2010, which comprises the consolidated and company statements of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of changes in equity, the consolidated and company statements of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

 

Directors' responsibilities

 

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

 

As disclosed in notes 2, the annual financial statements of the Group and Company are prepared in accordance with IFRSs. The condensed set of financial statements included in this half-yearly report have been prepared in accordance with IAS 34 Interim Financial Reporting.

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed sets of financial statements in the half-yearly report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion in respect of condensed parent company financial statements

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of parent company financial statements in the half-yearly report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.

 

Conclusion in respect of condensed consolidated financial statements

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.

 

 

 

KPMG Audit LLC

Chartered Accountants 
Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

28 March 2011

 



Parent company statement of comprehensive income

For the six months ended 31 December 2010


Note

(Unaudited)

6 months ended

31December 2010

(Unaudited)

6 months ended

31 December 2009



US$'000

US$'000





Interest income on cash balances


36

121

Movement in fair value of investments at fair value through profit or loss

 

12.2

 

1,601

 

(14,415)

Net foreign exchange gain (loss)


106

(1,009)

Gross portfolio return


1,743

(15,303)





Investment management fees

7

(1,651)

(3,127)

Other administration expenses

8

(1,327)

(4,397)

Total expenses


(2,978)

(7,524)





Loss before taxation


(1,235)

(22,827)

Taxation


-

-

Loss for the period and comprehensive loss for the period


 

(1,235)

 

(22,827)





Basic and diluted loss per share (cents)

14

(0.88)

(12.43)

 

The accompanying notes form an integral part of these interim financial statements 

 

 

 


Parent company statement of financial position

        as at 31 December 2010

 



(Unaudited)

(Audited)


Note

31 December 2010

30 June 2010



US$'000

US$'000

Assets




Investments in subsidiaries at fair value through profit or loss

12.2

184,575

159,331

Total non-current assets


184,575

159,331

Trade and other receivables


1,116

358

Cash and cash equivalents

51,725

89,609

Total current assets

52,841

89,967

Total assets


237,416

249,298





Equity




Share capital

13

29

30

Share premium

13

316,460

323,115

Retained losses

(84,812)

(83,577)

Total equity


231,677

239,568





Trade and other payables


3,183

2,774

Unpaid capital contributions to subsidiaries


2,556

6,956

Total current liabilities


5,739

9,730

Total liabilities


5,739

9,730

Total equity and liabilities


237,416

249,298





Net asset value per share (cents)

6

169.11

167.65

 

 

The accompanying notes form an integral part of these interim financial statements

 

 

The interim financial statements were approved by the Board of Directors on 28 March 2011 and signed on their behalf by:

 

 

 

 

Peter Tom

J. Curtis Moffatt

Non-Executive Chairman

Non-Executive Director

 

 


Parent company statement of changes in equity

For the six months ended 31 December 2010


 

Share Capital

 

Share Premium

 

Retained losses

 

Total


US$'000

US$'000

US$'000

US$'000






Balance at 1 July 2010 (audited)

30

323,115

(83,577)

239,568

Total comprehensive loss

-

-

(1,235)

(1,235)






Transactions with owners,

recorded directly in equity





Contributions by and

distributions to owners





Repurchase of shares

(1)

(6,655)

-

(6,656)

Total contributions by and

distributions to owners

 

(1)

 

(6,655)

 

-

 

(6,656)

Balance at 31 December  2010 (unaudited)

29

316,460

(84,812)

231,677






Balance at 1 July 2009 (audited)

37

359,603

(46,241)

313,399

Total comprehensive loss

-

-

(22,827)

(22,827)






Balance at 31 December  2009 (unaudited)

37

359,603

(69,068)

290,572

 

The accompanying notes form an integral part of these interim financial statements

 

 

 



Parent company statement of cash flows

For the six months ended 31 December 2010


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009


US$'000

US$'000

Cash flows from operating activities



Interest received on cash balances

36

142

Operating expenses paid

(1,358)

(4,450)

Net cash used in operating activities

(1,322)

(4,308)




Cash flows from investing activities



Repayment of capital by subsidiaries at fair value through profit or loss

 

1,620

 

-

Cash received on behalf of subsidiaries

180

-

Payment of working capital advances to subsidiaries

(2,150)

-

Additional investments in subsidiaries at fair value through profit or loss

 

(23,012)

 

(26,239)

Payment of unpaid share capital to subsidiaries

(6,650)

-

Net cash used in investing activities

(30,012)

(26,239)




Cash flows from financing activities



Repurchase of shares

(6,656)

-

Net cash used in financing activities

(6,656)

-




Net decrease in cash and cash equivalents

(37,990)

(30,547)

Cash and cash equivalents at start of the period

89,609

167,075

Effect of exchange rate fluctuations on cash and cash equivalents

106

(1,009)

Cash and cash equivalents at end of period

 

51,725

 

135,519

 

 


(Unaudited)

(Unaudited)

Reconciliation of loss for the period to net cash used in operating activities

6 months ended

31 December 2010

6 months ended

31 December 2009


US$'000

US$'000




Loss for the period

(1,235)

(22,827)

Adjustments for:



Unrealised losses on revaluation of investments at fair value through profit or loss

 

(1,601)

 

14,415

Foreign exchange loss

(106)

1,009

Movement in trade and other receivables

(24)

18

Movement in trade and other payables

(7)

3,077

Movement in intercompany payables

1,651

-

Net cash used in operating activities

(1,322)

(4,308)

 

The accompanying notes form an integral part of these interim financial statements

 

 

 

 

 

 

Notes to the interim financial statements

for the six months ended 31 December 2010

 

 

1              The Company

 

Leaf Clean Energy Company ("Leaf" or the "Company") was incorporated and registered in the Cayman Islands on 14 May 2007. The Company was established to invest in clean energy projects, predominantly in North America. Clean energy includes activities such as the production of alternative fuels, renewable power generation and the use of technologies to reduce the environmental impact of traditional energy. The Company seeks to achieve long term capital appreciation primarily through making privately negotiated acquisitions of interest (principally equity but also equity-related and subordinated or mezzanine debt securities) in both projects and companies which own assets or which participate in the clean energy sector and through the generation and commercialisation of carbon credits derived from these projects.

 

The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 28 June 2007 when dealings also commenced.

 

The Company's agents and the inhouse management team perform all significant functions.

 

The financial statements of the Company as at and for the year ended 30 June 2010 are available upon request from the Company's registered office at PO Box 309GT, Ugland House, George Town, Grand Cayman, Cayman Islands or at www.leafcleanenergy.com.

 

2              Statement of compliance

 

These condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Company as at and for the year ended 30 June 2010.

 

Leaf is an investment company. However, because it holds majority stakes and therefore has the power to control, it is required to prepare group financial statements that consolidate the results of such investments. In order to present information that is comparable with other investment companies, Leaf also publishes financial statements of the Company, which include investments in subsidiaries regarded as part of the Company's investing business at fair value.

 

These condensed interim financial statements were approved by the Board of Directors on 28 March 2011.

 

3              Accounting policies

 

The accounting policies applied by the Company in these interim financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 30 June 2010.

 

4              Use of estimates and judgements

 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

The significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the year ended 30 June 2010.

 

During the period ended 31 December 2010, management reassessed its estimates in respect of the valuation of unquoted investments in subsidiaries (See note 12.2).

 

5              Financial risk management policies

 

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 30 June 2010.

 

 

 



 

6              Net Asset Value per Share

 


(Unaudited)

(Audited)


 31 December 2010

 30 June 2010

Company



Net assets attributable to shareholders of the Company (US$'000)

231,677

239,568

Number of ordinary shares in issue (thousands)

137,001

142,901

Net asset value per share (cents per share)

169.11

167.65

 

7              Management Fees

 

In May 2010, Leaf Clean Energy Company terminated its Asset Advisory Agreement with EEA Fund Management Limited, and established its own subsidiary, Leaf Clean Energy USA, LLC ("Leaf USA"), in Washington, DC, from which the subsidiary provides assets advisory, portfolio management and certain administrative services to the Company. Leaf USA is entitled to management fees which are calculated based on 20% mark up on the costs of the asset advisory and portfolio management services provided to Leaf Clean Energy Company. The administrative services provided to Leaf Clean Energy Company are at cost base with nil mark up. 

 

Management fees for the six months ended 31 December 2010 payable to Leaf USA were US$1,650,564 (period ended 31 December 2009: US$nil) and the amount accrued but not paid at the period end was US$168,518 (30 June 2010: US$nil).

 

Management fees for the six months ended 31 December 2010 payable to EEA Fund Management Limited is US$nil (period ended 31 December 2009: US$3,126,530) and the amount accrued but not paid at the period end was US$nil (30 June 2010: US$nil).

 

8              Other administration expenses

 


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009


US$'000

US$'000

Directors' remuneration (note 11)

450

484

Legal and professional fees (note 9 )

296

3,518

Administration fees (note 10)

222

119

Travel and subsistence expenses

135

5

Audit fees

71

30

Directors' and Officers' insurance expense

54

32

Other expenses

41

142

Printing and stationery expenses

29

46

Registrar fees and costs

29

21

Total

1,327

4,397

 

9              Legal and professional fees

 

Legal and professional fees represent legal, advisory and consultancy fees incurred during and after the implementation of investment acquisitions, as well as work on group and portfolio structuring.

 

 

 

 



 

10            Administration fees

 

With effect from November 2009, the Company administrator is entitled to an administration fee, payable quarterly in arrears and calculated in respect of each quarter or other period with a minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum where the total assets of the parent company less borrowings is less than US$100,000,000; 0.09% where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$100,000,000 but less than US$200,000,000; and at the rate of 0.08% per annum where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$200,000,000.

 

Administration fees for the period amounted to US$221,615 including additional quarterly administration fees of US$25,000 with effect from July 2010, (period ended 31 December 2009: US$119,376) and US$94,371 was outstanding as at 31 December 2009 (30 June 2010: US$56,620)

 

11            Directors' remuneration

 

Details of the Directors' basic annual remuneration are as follows:

 


 

Basic annual remuneration


US$

Peter Tom (Chairman)

200,000

Bran Keogh

400,000

J. Curtis Moffatt

150,000

Peter O'Keefe

150,000


900,000

 

The Directors are also entitled to receive reimbursement of any expenses in relation to their appointment.  Total fees and expenses paid to the Directors for the six months ended 31 December 2010 amounted to US$565,865 (period ended 31 December 2009: US$328,632) of which US$225,000 was outstanding at 31December 2010 (June 2010: US$225,000). The Directors engaged Mercer Limited to review Leaf Clean's remuneration for its Directors as compared to companies similar to Leaf Clean in the United States and the United Kingdom. The Directors have adopted the recommendations of Mercer effective 1 April 2011.

 

12            Investments

 

12.1                 The Subsidiaries

 

Since incorporation, for efficient portfolio management purposes, the Company has established the following subsidiary companies:


Country of
incorporation

Percentage of
shares held

Leaf Bioenergy Company

Cayman Islands

100%

Leaf Biomass Company

Cayman Islands

100%

Leaf Biomass Investments, Inc.*

USA (Delaware)

100%

Leaf Escalona Company*

Cayman Islands

100%

Leaf Finance Company

Cayman Islands

100%

Leaf Greenline Company*

Cayman Islands

100%

Leaf Hydro Company

Cayman Islands

100%

Leaf Invenergy Company*

Cayman Islands

100%

Leaf Invenergy US Investments, Inc*

USA (Delaware)

100%

Leaf LFG Company

Cayman Islands

100%

Leaf LFG US Investments, Inc.*

USA (Delaware)

100%

Leaf MaxWest Company*

USA (Delaware)

100%

Leaf Miasole*

Cayman Islands

100%

Leaf Range Fuels Company*

Cayman Islands

100%

Leaf Skyfuels Company*

Cayman Islands

100%

Leaf Solar Company

Cayman Islands

100%

Leaf VREC*

Cayman Islands

100%

Leaf Waste Energy

Cayman Islands

100%

Leaf Wind Company

Cayman Islands

100%

Leaf Clean Energy USA, LLC

USA (District of Columbia)

100%

 

*Indirect subsidiaries

 

The Company has also control over the following underlying investee companies:

 


Country of
incorporation

Principal activity

Effective interest held

Energia Escalona Coopertief U.A

Netherlands

Hydro Energy

87.5%

Escalona B.V

Netherlands

Hydro Energy

87.5%

Energia Escalona I S.A. de C.V

Mexico

Hydro Energy

87.5%

Energia Escalona s.r.l.

Mexico

Hydro Energy

87.5%

Energentum S.A. de C.V

Mexico

Hydro Energy

86.6%

Johnstown Regional Energy LLC

USA (Pennsylvania)

Landfill

100%

MaxWest Environmental Systems Inc

USA (Nevada)

Waste Energy

51.39%(1)

Multitrade Rabun Gap LLC

USA (Virginia)

Biomass

75%(2)

Multitrade Telogia LLC

USA (Virginia)

Biomass

61.25%(3)

Telogia Power LLC

USA (Virginia)

Biomass

61.25%(3)

 

(1) Voting rights 60.9%

(2)  Voting rights 81.9%

(3)  Voting rights 66.25%

 

12.2         Investments in subsidiaries at fair value through profit or loss

 


(Unaudited)

(Audited)


31 December 2010

30 June 2010


US$'000

US$'000

Balance brought forward

159,331

168,868

Additional investments in subsidiaries

25,263

38,944

Repayment of capital investment

(1,620)

(19,000)

Unpaid share capital reversed

-

(13,000)

Movement in fair value on investments in subsidiaries

1,601

(16,481)

Balance carried forward

184,575

159,331

 

12.3         Portfolio valuation methodology

 

Unquoted investments are valued by applying an appropriate valuation technique, which makes maximum use of market-based information, is consistent with models generally used by market participants and is applied consistently from period to period, except where a change would result in a better estimation of fair value.  The Company primarily invests in unquoted direct investments. Unquoted direct investments have characteristics similar to private equity investments, in that the value is generally determined through the sale or flotation of the entire business, rather than the sale of an individual instrument.  Valuations of such investments are based upon the "International Private Equity and Venture Capital Valuation Guidelines."

 

The in house management conducted a valuation analysis of the Company's investment portfolio based upon standard valuation approaches compatible with the "International Private Equity and Venture Capital Valuation Guidelines."  Given the uncertainties inherent in estimating the fair value of unquoted direct investments, a degree of caution was applied by the inhouse management in exercising judgements and making the necessary estimate.



 

13            Share Capital

 

Ordinary shares of GBP0.0001 each

Number of shares

Share capital

Share premium



US$'000

US$'000

At 30 June 2010

142,900,726

30

323,115

Repurchased during the period

(5,900,000)

(1)

(6,655)

At 31 December 2010

137,000,726

29

316,460

 

14            Basic and Diluted Loss per Share

 

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year:

 


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009




Loss attributable to equity holders of the Company (US$'000)

(1,235)

(22,827)

Weighted average number of ordinary shares in issue (thousands)

139,864

183,634

Basic and fully diluted loss per share (cents per share)

(0.88)

(12.43)

 

There is no difference between the basic and diluted loss per share for the year as there are no potential dilutive ordinary shares.

 

15            Related Party Transactions

 

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

 

The Company administrator and the Directorsare considered related parties due to the significance of the contracts with these parties. Details of the fee arrangements with these parties are given in notes 7, 10 and 11.

 

16            Subsequent Events

 

There were no material subsequent events after the reporting date.

 

 



Consolidated statement of comprehensive income

For the six months ended 31 December 2010

 






Note

(Unaudited)

6 months ended

31 December 2010

(Unaudited)

6 months ended

31 December 2009



US$'000

US$'000





Interest income on cash balances


37

206

Interest income on investments at fair value through profit or loss


 

818

 

-

Unrealised losses on revaluation of investments at fair value through profit or loss

 

13.1

 

(950)

 

(9,200)

Net foreign exchange gain (loss)


97

(1,020)

Gross portfolio return


2

(10,014)

Management fees

6

-

(3,127)

Other administration expenses

7

(1,327)

(4,397)

Net portfolio return


(1,325)

(17,538)

Sales revenue and other income


11,568

7,501

Profit on disposal of assets


1

75

Impairment of non-financial assets

10

(6,951)

(5,215)

Operating expenses


(18,965)

(10,288)

Loss before finance costs


(15,672)

(25,465)

Finance costs


(792)

(368)

Loss before taxation


(16,464)

(25,833)

Taxation


(106)

-

Loss for the period


(16,570)

(25,833)

Other comprehensive income




Exchange differences on translation of foreign operations


5

(22)

Total comprehensive income


(16,565)

(25,855)

Loss for the period attributable to




Equity holders of the parent


(11,789)

(25,286)

Non-controlling interests


(4,781)

(547)



(16,570)

(25,833)

Total comprehensive income attributable to




Equity holders of the parent


(11,784)

(25,263)

Non-controlling interests


(4,781)

(592)



(16,565)

(25,855)





Basic and diluted loss per share (cents)

11

(8.43)

(13.77)

 

The accompanying notes form an integral part of these interim financial statements.

 

 

 



 

Consolidated statement of financial position

as at 31December 2010

 



(Unaudited)

(Audited)


Note

31 December 2010

30 June 2010



US$'000

US$'000

Assets




Investments at fair value through profit or loss

13.1

105,881

80,676

Property, plant and equipment

14

51,315

57,470

Other non current assets


321

513

Intangible assets

15

24,961

28,095

Total non-current assets


182,478

166,754

Inventories


493

406

Trade and other receivables


5,538

3,355

Cash and cash equivalents


61,129

98,978

Total current assets


67,160

102,739

Total assets


249,638

269,493





Equity




Share capital

16

29

30

Share premium

16

316,460

323,115

Foreign currency translation reserve


(119)

(124)

Retained losses


(100,431)

(88,642)

Total equity attributable to equity holders of the parent


215,939

234,379

Non-controlling interests


(2,830)

1,951

Total equity


213,109

236,330





Liabilities




Loans and borrowings

17

29,201

21,908

Deferred infrastructure grants


-

1,830

Deferred revenue


1,381

1,381

Total non-current liabilities


30,582

25,119

Loans and borrowings

17

2,366

2,693

Trade and other payables


3,484

5,351

Income tax payable


97

-

Total current liabilities


5,947

8,044

Total liabilities


36,529

33,163

Total equity and liabilities


249,638

269,493





 

The accompanying notes form an integral part of these interim financial statements.

 

The interim financial statements were approved by the Board of Directors on 28 March 2011 and signed on their behalf by:

 

 

 

 

Peter Tom

J. Curtis Moffatt

Non-Executive Chairman

Non-Executive Director

 

 


Consolidated statements of changes in equity

for the six months ended 31 December 2010

 


Share Capital

Share Premium

Foreign currency translation reserve

Retained losses

Total

Non-controlling interests

Total equity


 

US$'000

 

US$'000

 

US$'000

 

US$'000

 

US$'000

 

US$'000

 

US$'000

Balance at 1 July 2010 (audited)

30

323,115

(124)

(88,642)

234,379

1,951

236,330

Total comprehensive loss

-

-

5

(11,789)

(11,784)

(4,781)

(16,565)









Transactions with owners, recorded directly in equity








Contributions by and distributions to owners








Repurchase of shares

(1)

(6,655)

-

-

(6,656)

-

(6,656)

Total contributions by and distributions to owners

 

(1)

 

(6,655)

 

-

 

-

 

(6,656)

 

-

 

(6,656)

Balance at 31 December 2010 (unaudited)

29

316,460

(119)

215,939

(2,830)

213,109









Balance at 1 July 2009 as reported previously

37

359,603

-

(45,684)

313,956

-

313,956

Effect of change in accounting policy


-

(112)

(1,924)

(2,036)

2,404

368

Balance at 1 July 2009 (restated)

37

359,603

(112)

(47,608)

311,920

2,404

314,324

Total comprehensive loss

-

-

24

(25,286)

(25,262)

(593)

(25,855)

Transactions with owners,

recorded directly in equity








Increase in non-controlling interests due to purchase of subsidiaries

 

-

 

-

 

-

 

-

 

-

 

3,120

 

3,120

Total changes in ownership interests in subsidiaries

 

-

 

-

 

-

 

-

 

-

 

3,120

 

3,120

Balance at 31 December  2009 (unaudited)

37

359,603

(88)

(72,894)

286,658

4,931

291,589









 

The accompanying notes form an integral part of these interim financial statements.

 



 

Consolidated statement of cash flows

For the six months ended 31 December 2010


 

(Unaudited)

 

(Unaudited)


6 months ended

 31 December 2010

6 months ended

 31 December 2009


US$'000

US$'000

Cash flows from operating activities



Interest received on cash balances

37

206

Cash received from customers

11,568

7,502

Operating expenses paid

(21,711)

(17,583)

Income tax paid

(9)

-

Net cash used in operating activities

(10,115)

(9,875)




Cash flows from investing activities



Purchase of financial assets at fair value through profit or loss

(26,155)

-

Acquisition of subsidiaries net of cash acquired

-

(10,139)

Net purchases of property, plant and equipment

(2,230)

(10,513)

Proceeds from disposal of property, plant and equipment

240

75

Net cash used in investing activities

(28,145)

(20,577)




Cash flows from financing activities



Repurchase of shares during the year

(6,656)

-

Net borrowings received

6,966

1,407

Net cash contributed by financing activities

310

1,407




Net decrease in cash and cash equivalents

(37,950)

(29,045)

Cash and cash equivalents at start of the period

98,978

171,852

Effect of exchange rate fluctuations on cash and cash equivalents

101

(1,029)

Cash and cash equivalents at end of the period

61,129

141,778

 

The accompanying notes form an integral part of these interim financial statements


Consolidated statements of cash flows (continued)

For the six months ended 31 December 2010


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009

 Reconciliation of loss for the period to net cash used in operating activities

US$'000

US$'000




Loss for the period

(16,570)

(25,833)

Adjustments for:



Unrealised losses on revaluation of investments at fair value through profit or loss

950

9,200

Impairment of non-financial assets

6,951

5,215

Depreciation expense

2,750

1,451

Foreign exchange (gain)/ loss

(97)

1,020

Profit on disposal of assets

(1)

(75)

Amortisation of intangible assets

67

-

Amortisation of deferred revenue in subsidiaries

(121)

-

Taxation

106

-

Operating loss before changes in working capital

(5,965)

(9,022)

Increase in inventory

(87)

-

Movement in trade and other receivables

(2,187)

85

Movement in trade and other payables

(1,867)

(938)

Income taxes paid

(9)

-

Net cash used in operating activities

(10,115)

(9,875)

 

The accompanying notes form an integral part of these interim financial statements



 


Notes to the consolidated interim financial statements

For the six months ended 31 December 2010

 

1              The Company

 

Leaf Clean Energy Company ("Leaf" or the "Company") was incorporated and registered in the Cayman Islands on 14 May 2007. The Company was established to invest in clean energy projects, predominantly in North America. Clean energy includes activities such as the production of alternative fuels, renewable power generation and the use of technologies to reduce the environmental impact of traditional energy. The Company seeks to achieve long term capital appreciation primarily through making privately negotiated acquisitions of interest (principally equity but also equity-related and subordinated or mezzanine debt securities) in both projects and companies which own assets or which participate in the clean energy sector and through the generation and commercialisation of carbon credits derived from these projects.

 

The Shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 28 June 2007 when dealings also commenced.

 

The Company's agents and the management team perform all significant functions. Accordingly, the Company itself has no employees.

 

The consolidated financial statements of the Group as at and for the year ended 30 June 2010 are available upon request from the Company's registered office at PO Box 309GT, Ugland House, George Town, Grand Cayman, Cayman Islands or at www.leafcleanenergy.com.

 

 

2              Statement of compliance

 

These condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting .They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2010.

 

 The condensed consolidated financial statements were authorised for issue by the Board of Directors on 28 March 2011.

 

3              Significant accounting policies

 

The accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2010.

 

4              Use of estimates and judgements

 

The preparation of consolidatedfinancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 30 June 2010.

 

During the period ended 31 December 2010 management reassessed its estimates in respect of:

·      the valuation of unquoted investments (see note 13); and

·      impairment of goodwill and other intangible assets (see note 15)

 

5              Financial risk management

 

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 30 June 2010.

 

6              Management Fees

 

In May 2010, Leaf Clean Energy Company terminated its Asset Advisory Agreement with EEA Fund Management Limited, and established its own subsidiary, Leaf Clean Energy USA, LLC ("Leaf USA"), in Washington, DC, from which the subsidiary provides assets advisory, portfolio management and certain administrative services to the Company.

 

7              Other administration expenses

 


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009


US$'000

US$'000

Directors' remuneration (note 8)

450

484

Legal and professional fees (note 7.1)

296

3,518

Administration fees (note 7.2)

222

119

Travel and subsistence expenses

135

5

Audit fees

71

30

Directors' and Officers' insurance expense

54

32

Other expenses

41

142

Printing and stationery expenses

29

46

Registrar fees and costs

29

21

Total

1,327

4,397

 

7.1           Legal and professional fees

Legal and professional fees represent legal, advisory and consultancy fees incurred during and after the implementation of investment acquisitions, as well as work on group and portfolio structuring.

 

7.2           Administration fees

With effect from November 2009, the Company administrator is entitled to an administration fee, payable quarterly in arrears and calculated in respect of each quarter or other period with a minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum where the total assets of the parent company less borrowings is less than US$100,000,000; 0.09% where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$100,000,000 but less than US$200,000,000; and at the rate of 0.08% per annum where the total assets of the Company less borrowings at the end of the relevant quarter is greater than or equal to US$200,000,000.

 

Administration fees for the period amounted to US$221,615 including additional quarterly administration fees of US$25,000 with effect from July 2010, (period ended 31 December 2009: US$119,376) and US$94,371 was outstanding as at 31 December 2009 (30 June 2010: US$56,620)

 

8              Directors' remuneration

 

Details of the Directors' basic annual remuneration are as follows:

 


 

Basic annual remuneration


US$

Peter Tom (Chairman)

200,000

Bran Keogh

400,000

J. Curtis Moffatt

150,000

Peter O'Keefe

150,000


900,000

 

The Directors are also entitled to receive reimbursement of any expenses in relation to their appointment.  Total fees and expenses paid to the Directors for the six months ended 31 December 2010 amounted to US$565,865 (period ended 31 December 2009: US$328,632) of which US$225,000 was outstanding at 31December 2010 (June 2010: US$225,000). The Directors engaged Mercer Limited to review Leaf Clean's remuneration for its Directors as compared to companies similar to Leaf Clean in the United States and the United Kingdom. The Directors have adopted the recommendations of Mercer effective 1 April 2011.

 

9              Interest income on investments at fair value through profit or loss

 

The Group had US$1,976,505 of interest income from loans made by the parent company to its portfolio companies. Of this, US$817,816 was from non-subsidiaries and is recognised in profit or loss. US$1,158,689 was from Leaf's investment in subsidiaries and was eliminated on consolidation.

 

10            Impairment of non-financial assets

 

Non-financial assets are assessed for impairment at each reporting period end. This review is undertaken in conjunction with the review of the Company's investment in each subsidiary.

 


(Unaudited)

(Unaudited)

 

 

6 months ended

31 December 2010

6 months ended

31 December 2009


US$'000

US$'000

Goodwill (note 15)

(3,314)

(721)

Other intangible assets (note 15)

-

(430)

Pre-operating expenses

-

(1,374)

Property, plant and equipment (note 14)

(3,637)

(2,690)

Total

(6,951)

(5,215)

 

11            Loss per share

 

Basic and Diluted

 

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period:

 


(Unaudited)

(Unaudited)


6 months ended

31 December 2010

6 months ended

31 December 2009




Loss attributable to equity holders of the parent (US$'000)

(11,789)

(25,286)

Weighted average number of ordinary shares in issue (thousands)

139,865

183,634

Basic and fully diluted loss  per share (cents per share)

(8.43)

(13.77)

 

There is no difference between the basic and diluted loss per share for the period.

 

12            The Subsidiaries

 

Since incorporation, for efficient portfolio management purposes, the Company has established the following subsidiary companies:-

 


Country of
incorporation

Percentage of
shares held

Leaf Bioenergy Company

Cayman Islands

100%

Leaf Biomass Company

Cayman Islands

100%

Leaf Biomass Investments, Inc.*

USA (Delaware)

100%

Leaf Escalona Company*

Cayman Islands

100%

Leaf Finance Company

Cayman Islands

100%

Leaf Greenline Company*

Cayman Islands

100%

Leaf Hydro Company

Cayman Islands

100%

Leaf Invenergy Company*

Cayman Islands

100%

Leaf Invenergy US Investments, Inc*

USA (Delaware)

100%

Leaf LFG Company

Cayman Islands

100%

Leaf LFG US Investments, Inc.*

USA (Delaware)

100%

Leaf MaxWest Company*

USA (Delaware)

100%

Leaf Miasole*

Cayman Islands

100%

Leaf Range Fuels Company*

Cayman Islands

100%

Leaf Skyfuels Company*

Cayman Islands

100%

Leaf Solar Company

Cayman Islands

100%

Leaf VREC*

Cayman Islands

100%

Leaf Waste Energy

Cayman Islands

100%

Leaf Wind Company

Cayman Islands

100%

Leaf Clean Energy USA, LLC

USA (District of Columbia)

100%

 

*Indirect subsidiaries

 

The Company has also control over the following underlying investee companies:

 


Country of
incorporation

Principal activity

Effective interest held

Energia Escalona Coopertief U.A

Netherlands

Hydro Energy

87.5%

Escalona B.V

Netherlands

Hydro Energy

87.5%

Energia Escalona I S.A. de C.V

Mexico

Hydro Energy

87.5%

Energia Escalona s.r.l.

Mexico

Hydro Energy

87.5%

Energentum S.A. de C.V

Mexico

Hydro Energy

86.6%

Johnstown Regional Energy LLC

USA (Pennsylvania)

Landfill

100%

MaxWest Environmental Systems Inc

USA (Nevada)

Waste Energy

51.39%(1)

Multitrade Rabun Gap LLC

USA (Virginia)

Biomass

75%(2)

Multitrade Telogia LLC

USA (Virginia)

Biomass

61.25%(3)

Telogia Power LLC

USA (Virginia)

Biomass

61.25%(3)

 

(1) Voting rights 60.9%

(2) Voting rights 81.9%

(3) Voting rights 66.25%

 

13            Investments

 

Investments comprise ordinary stock, loans and preferred stock carrying a cumulative preferred dividend, preferential return of capital and capped rights to share in profits. The Directors, with advice from the inhouse management team, Leaf Clean Energy USA, LLC, have reviewed the carrying value of each investment and calculated the aggregate value of the Company's portfolio. Investments are measured at the Directors' estimate of fair value at the reporting date, in accordance with IAS 39 'Financial Instruments: Recognition and measurement'.

 

13.1        Investments at fair value through profit or loss


 

(Unaudited)

 

(Audited)


31 December 2010

US$'000

30 June 2010

US$'000




Balance brought forward

80,676

85,826

Purchases at cost

26,155

3,500

Movement in fair value of investments

(950)

(8,650)

Balance carried forward

105,881

80,676

 

Investments are stated at fair value through profit or loss on initial recognition. Loans are stated at fair value in conjunction with the related equity investment in the investee company. All investee companies are unquoted.

 

13.2         Portfolio valuation methodology

 

Unquoted investments are valued by applying an appropriate valuation technique, which makes maximum use of market-based information, is consistent with models generally used by market participants and is applied consistently from period to period, except where a change would result in a better estimation of fair value. The Company primarily invests in unquoted direct investments. Unquoted direct investments have characteristics similar to private equity investments, in that the value is generally determined through the sale or flotation of the entire business, rather than the sale of an individual instrument. Valuations of such investments are based upon the "International Private Equity and Venture Capital Valuation Guidelines."

 

The in-house management team conducted a valuation analysis of the Company's investment portfolio based upon standard valuation approaches compatible with the "International Private Equity and Venture Capital Valuation Guidelines." Given the uncertainties inherent in estimating the fair value of unquoted direct investments, a degree of caution was applied by the Asset Advisor in exercising judgements and making the necessary estimates.

 

14            Property, plant and equipment

 


Total


 

US$'000

Cost


Balance at 1 July 2010

65,802

Additions

2,230

Impairment (note 10)

(3,637)

Disposals

(239)

Reclassification of deferred infrastructure grant

(1,759)

Balance at 31 December 2010

62,397



Depreciation


Balance at 1 July 2010

8,332

Charge for the period

2,750

Balance at 31 December 2010

11,082



Carrying amounts


30 June 2010

57,470

31 December 2010

51,315

 

 

As of 31 December 2010, the Group was of a view that the deferred infrastructure grant of one of its subsidiaries should be reclassified from noncurrent liability to property, plant and equipment. The reclassification contributed nil impact to the net profits and the net assets of the Group.

 

15            Intangible assets                                                                                                               

 


Goodwill

Other intangible assets

Total


US$'000

US$'000

US$'000

Cost




Balance as at 1 July 2010

27,698

2,006

29,704

Reclassification from noncurrent assets

-

247

247

Balance at 31 December 2010

27,698

2,253

29,951





Amortisation and impairment losses




Balance as at 1 July 2010

(1,481)

(128)

(1,609)

Amortisation

-

(67)

(67)

Impairment loss (note 10)

(3,314)

-

(3,314)

Balance at 31 December 2010

(4,795)

(195)

(4,990)





Carrying amounts




30 June 2010

26,217

1,878

28,095

31 December 2010

22,903

2,058

24,961





 

Other intangible asset

 

Other intangible assets comprise an Electric Power Purchase and Sale agreement with Seminole Electric Cooperative with a Group subsidiary, Multitrade Telogia LLC. The subsidiary agreed to sell and Seminole Electric Cooperative agreed to buy power upon commencement of commercial operations. The contract ends in November 2023.

 

16            Share capital

 

Ordinary shares of GBP.0001 each

Number of shares

Share capital

Share premium



US$'000

US$'000

At 30 June 2010

142,900,726

30

323,115

Repurchased during the period

(5,900,000)

(1)

(6,655)

At 31 December 2010

137,000,726

29

316,460

 

17            Loans and borrowings


(Unaudited)

31 December 2010

US$'000

(Audited)

30 June 2010

US$'000




Current loans

2,366

2,693

Non-current loans

29,201

21,908

Total

31,567

24,601

 

Long term debt comprises:

 

(i)             a promissory note of US$8,200,000 executed by a Group subsidiary to finance the construction of a methane recovery project secured by a mortgage and security interest in all the assets of that project and the note is payable over 180 months, which began in October 2006. The note bears interest at a rate of 8.11% per year; and

 

(ii)            the first tranche of a promissory note of US$20,701,000 through the Rural Utilities Service (RUS), an agency of the U.S. Department of Agriculture, executed by a Group subsidiary as long term financing for its biomass power plant, the construction of which had been previously financed on a short term basis by the Company.  While the total available principal is US$20,701,000, with a maturity of 31 December 2029, advances to 30 June 2010 were US$14,211,653, and to 31 December 2010 were US$20,701,000, which are included in the above balances.  Repayment is scheduled to begin on 31 December 2010. Interest is payable quarterly at a rate of 3.247%. The loan places certain restrictions on the Group subsidiary along with the pledge of most of the assets and income.

 

18            Related Party Transactions

 

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

 

The Company administrator and the Directors are considered related parties due to the significance of the contracts with these parties. Details of the fee arrangements with these parties are given in notes 7.2 and 8.

 

19            Subsequent Events

 

There were no material subsequent events after the reporting date.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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