TIDMLEAF
RNS Number : 3342I
Leaf Clean Energy Company
10 March 2010
?
Leaf Clean Energy Company
Interim Report
For the half year ended 31 December 2009
CONTENTS
+-----------------------------------------------------------+---------+
| Management and Administration | 1 |
+-----------------------------------------------------------+---------+
| Chairman's Interim Statement | 2 |
+-----------------------------------------------------------+---------+
| Report of the Asset Advisor | 3 |
+-----------------------------------------------------------+---------+
| Review report by Independent Auditors | 6 |
+-----------------------------------------------------------+---------+
| Unaudited financial statements of the Company: | |
+-----------------------------------------------------------+---------+
| - Condensed statements of comprehensive income | 7 |
+-----------------------------------------------------------+---------+
| - Condensed statements of financial position | 8 |
+-----------------------------------------------------------+---------+
| - Condensed statements of changes in equity | 9 |
+-----------------------------------------------------------+---------+
| - Condensed statements of cash flows | 12 |
+-----------------------------------------------------------+---------+
| - Notes to the condensed interim financial statements | 14-29 |
+-----------------------------------------------------------+---------+
MANAGEMENT AND ADMINISTRATION
+----------------------------------+----------------------------------+
| Directors | Peter Tom (Non-executive |
| | Chairman) * |
+----------------------------------+----------------------------------+
| | Bran Keogh (Non-executive |
| | Director) * |
+----------------------------------+----------------------------------+
| | J. Curtis Moffatt (Non-executive |
| | Director)* |
+----------------------------------+----------------------------------+
| | Peter O'Keefe (Non-executive |
| | Director) * |
+----------------------------------+----------------------------------+
| | * independent |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Registered Office | PO Box 309GT |
+----------------------------------+----------------------------------+
| | Ugland House |
+----------------------------------+----------------------------------+
| | George Town |
+----------------------------------+----------------------------------+
| | Grand Cayman |
+----------------------------------+----------------------------------+
| | Cayman Islands |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Asset Advisor | EEA Fund Management Limited |
+----------------------------------+----------------------------------+
| | 7th Floor |
+----------------------------------+----------------------------------+
| | 22 Billiter Street |
+----------------------------------+----------------------------------+
| | London EC3M 2RY |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Administrator | EHM International Limited |
+----------------------------------+----------------------------------+
| | 1 Liverpool Street |
+----------------------------------+----------------------------------+
| | London |
+----------------------------------+----------------------------------+
| | EC2M 7QD |
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| | |
+----------------------------------+----------------------------------+
| Nominated Advisor, Placing Agent | Cenkos Securities plc |
| and Broker | |
+----------------------------------+----------------------------------+
| | 6.7.8 Tokenhouse Yard |
+----------------------------------+----------------------------------+
| | London EC2R 7AS |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Registrar | Computershare Investor Services |
| | PLC |
+----------------------------------+----------------------------------+
| | The Pavilions |
+----------------------------------+----------------------------------+
| | Bridgewater Road |
+----------------------------------+----------------------------------+
| | Bristol BS99 6ZZ |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Depositary | Computershare Investor Services |
| | plc |
+----------------------------------+----------------------------------+
| | P.O. Box 82 |
+----------------------------------+----------------------------------+
| | The Pavilions |
+----------------------------------+----------------------------------+
| | Bridgewater Road |
+----------------------------------+----------------------------------+
| | Bristol BS99 6ZZ |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Auditors | KPMG Audit LLC |
| | Heritage Court |
| | 41 Athol Street |
| | Douglas |
| | Isle of Man IM99 1HN |
+----------------------------------+----------------------------------+
CHAIRMAN'S INTERIM STATEMENT
It gives me great pleasure to report to shareholders on the performance of Leaf
Clean Energy Company ("Leaf Clean" or the "Company"). The period covered in
this Interim Report continued to see the effects of a contracting global economy
and tightening credit markets. In addition, this period was marked by two
significant events for our company: the unsuccessful, proposed merger with
Trading Emissions plc ("TEP") and the consolidation of our asset management
agreement under EEA Fund Management ("EEA"). Although these circumstances posed
challenges, the Board, along with EEA, has taken measures to ensure that
shareholders' interests in the company are properly safeguarded.
To begin with, the failure to conclude the merger between Leaf Clean and TEP was
a disappointment as we believe it would have benefited our shareholders in
aligning two very synergistic businesses. With a combined market capitalization
of over GBP500 million, the merger would have created the world's largest
publicly traded low-carbon business. In December 2009, your Company agreed to
merge with TEP, and we take comfort in the fact that, of the Leaf shareholders
who voted, 94% voted affirmatively for the merger. Despite these efforts, the
transaction failed to obtain the requisite approval from TEP's shareholders.
Whilst the merger would have brought Leaf Clean a greater diversity of
environmental assets, I am confident of the Company's ability to continue to
execute its strategy on an independent basis. The Company is already
substantially invested in a well balanced portfolio of over US$200 million in
investments across a range of clean energy sectors including biomass,
waste-to-energy, solar and wind, with a balance between technology and
project-related investments.
This period also saw Leaf Clean investing an additional aggregate US$28.3
million in portfolio companies, disbursed mostly between a secured financing of
our wind business - Invenergy Wind - and an increase to a majority stake in
MaxWest Environmental Systems, a waste-to-energy business focused on the
conversion of municipal sewage to usable energy. The slower rate of investment
reflects a greater emphasis on active management of current assets and the late
stage of our investment cycle.
As part of this focus on our existing investments, I am pleased to announce that
the Board has asked our fellow Director, Bran Keogh, to take on an executive
role with the Company to assist EEA. This arrangement allows Leaf Clean and EEA
to make greater use of Bran's operational experience and deep knowledge of both
our portfolio companies and the energy market.
In addition to our emphasis on portfolio management, the Board has noted the
significant deterioration in its share price in the recent months and the deep
discount to net asset value at which the Company's shares are trading. Taking
account of the cash balances required for further strategic investment in
existing assets, the possibility of realisations from existing investments and
the income from interest bearing investment securities, your Board has decided
to pursue a share buyback programme. The Company will implement a buyback of up
to US$27 million of shares at a maximum price of 65p per share, which would
represent up to14.6% of Leaf Clean's issued share capital. The buyback will be
implemented by way of a reverse auction tender subject to shareholders approval.
A circular detailing the terms of the tender will be posted to shareholders
shortly. Following the tender, your Board will continue to keep the situation
under review and may consider a further buyback programme subject to asset
realisations and general market conditions.
The Board continues to support the investment objectives and recommendations of
its Asset Advisor, EEA. As such, with EEA's advice, Leaf Clean continued to
value investments conservatively to reflect the broader context of the past
year's severe economic dislocations. The net asset value of your Company as at
31 December 2009 is US$291 million of which US$136 million was held in cash. Of
this figure, $98 million is committed to portfolio companies and, as noted
above, the Company has committed a further US$27million to a share buyback. The
Company is of the view that the balance of US$11 million is sufficient to meet
the Company's working capital requirements for the foreseeable future. The net
asset value per share at year end was 158.23 cents (98.9 p) (1), reflecting net
losses on investments of US$14.4 million.
Whilst there have been challenges stemming from the current market environment,
Leaf Clean continues to represent a valuable and well diversified clean energy
portfolio. Jointly with our asset advisor, EEA, we remain committed to ensuring
the success of the Company's portfolio companies and optimistic about the
milestones that they achieved over the period and the improving market
conditions.
Peter Tom
Chairman
10 March 2010
(1) Based on US$/GBP exchange rate of 1.6 on 31 December 2009
REPORT OF THE ASSET ADVISOR
Noteworthy Events and Key Financial Data for 1 July - 31 December 2009
· The Company made an additional US$28.3 million in direct equity and debt
investments into existing portfolio businesses.
· The Company's total NAV is US$291 million, of which US$136 million was
held in cash and US$183 million in investments. The Company's NAV per share is
158.23 cents, 105.7p at $1.4972 to the GBP1.
· On 17 December 2009 the Company agreed to a merger with Trading Emissions
plc, which was not finalized despite in excess of 90% of Leaf shareholders
voting in favour.
Overview
Leaf Clean Energy Company's ("Leaf Clean" or "Company") 2009 Interim Report and
financial statements encompasses the period from 1 July to 31 December 2009.
This period was dominated by a widespread global recession as the banking crisis
of late 2008 rippled through almost every sector during 2009. The renewable
energy industry, in particular, lost momentum as credit markets dried up and
demand weakened during the recession. Another impact has been a significant
dampening of valuations across most asset classes, including many businesses
comparable to Leaf Clean's portfolio companies. In turn, the Leaf Board has
valued the Company's NAV at US$291 million, representing a reduction of 7% from
the June 2009 Annual Report and financial statements.
The Company's assets reflect a balanced and diverse portfolio of clean energy
investments principally in North America. There is both sectoral diversity as
well as of investment type. The Company invests in active operational assets
along with more growth-oriented corporate equity. The investments themselves
have been made across a broad range of financial instruments including equity,
senior preference equity, convertibles and debt. Current market conditions have
resulted in a number of the investments being structured to enhance downside
protection through an emphasis on debt-like instruments, including convertible
loan stock. It is the Asset Advisor's view that the breadth of the Company's
portfolio facilitate the generation of shareholder value as the global economy
normalizes and the drivers behind the growth in clean energy and climate change
continue apace. The current portfolio is made up of the following 10
investments:
MaxWest Environmental Systems, Inc. ("MaxWest") designs, builds, owns, and
operates waste-to-energy gasification facilities. MaxWest also seeks to deploy
proprietary waste-to-energy gasification technology using a variety of waste
streams, but specifically well-suited to municipal solid sludge. The MaxWest
system is uniquely modular and scalable, and its first build-own-operate project
has been successfully constructed in Sanford, Florida.
SkyFuel, Inc. ("SkyFuel") is emerging as a world leader in the design and
deployment of concentrating solar power (CSP) systems, designing low-cost, large
scale solar thermal plants that produce steam for power generation,
desalination, wastewater treatment, and other industrial applications. To this
end, SkyFuel is developing the parabolic SkyTrough and linear Fresnel technology
systems, which incorporate ReflecTech, a highly reflective, silver-metallised
outdoor weatherable film designed for solar energy concentrators. SkyFuel's
solar plants can be integrated into existing facilities using its proprietary
FuelSaver approach, or can be built as standalone solar power plants.
Johnstown Regional Energy, LLC. ("JRE") owns and operates three high-Btu
landfill gas-to-methane projects at Waste Management landfills located in
Pennsylvania. JRE extracts raw landfill gas that is subsequently cleaned in
advanced technology processing plants and sold via connecting pipelines. The
high quality "green" gas ultimately displaces the use of fossil fuelled-based
natural gas, making it eligible for renewable energy credits (RECs) and/or
carbon credits.
Multitrade Rabun Gap, LLC ("Rabun Gap") is a special purpose entity formed to
refurbish, construct and operate a 20 MW nameplate wood-fuelled biomass facility
in Rabun Gap, Georgia. The facility achieved commercial operations in January
2010. Rabun Gap will use native renewable fuel from the local forest industry
and will sell power to a Georgia co-operative under a long-term power purchase
agreement.
Multitrade Telogia, LLC ("Telogia") is a special purpose entity formed to
purchase, refurbish and operate an existing 14 MW capacity wood-fuelled biomass
facility in Telogia, Florida. The facility achieved commercial operations in
August 2009. Telogia will use native renewable fuel from the local forest
industry, as well as wood waste that would otherwise be put into landfills, to
generate renewable power that will be sold to a Florida co-op under a long
term-power purchase agreement executed in December 2008.
Energia Escalona ("Escalona") is a special purpose entity formed to construct
and operate a 9.3 MW capacity run-of-river hydroelectric facility on the Las
Minas River near Veracruz, Mexico. Escalona is designed to utilise constant
river flow from the upstream discharge of an already existing 15 MW plant. Power
from Escalona is to be sold to a large Mexican industrial business.
Invenergy Wind, LLC ("Invenergy") is one of the largest independently-owned wind
energy operators and developers in North America, having placed nearly 2,000 MW
into operation since 2004. In addition to its large portfolio of operating
assets, Invenergy also has a strong and diversified pipeline of wind power
projects in advanced stages of development across North America and Europe.
Miasolé develops and manufactures thin-film copper-indium-gallium-diselenide
(CIGS) solar photovoltaic cells. This is done by utilizing a differentiated
vacuum deposition process that is highly efficient and is designed to apply CIGS
material over large area substrates in a continuous fashion. Miasolé is
leveraging expertise in semiconductor manufacturing and a deep understanding of
CIGS material to manufacture new, versatile, and low-cost solar products.
Range Fuels, Inc. ("Range Fuels is a leading cellulosic technology and
production company, which utilises a proprietary two-step thermo-chemical
conversion process to produce ethanol, methanol, and other fuels that are
renewable, sustainable, and eco-friendly, from cellulose-based biomass,
including waste materials and non-food sources. Range Fuels' business model is
to design, build, own and operate its plants.
Vital Renewable Energy Company ("VREC") is a renewable energy company focused on
the development of sugar cane based ethanol facilities and electricity
generation in Brazil, as well as related infrastructure projects.
Over the relevant reporting period, the Company has executed a number of
transactions involving existing portfolio companies as noted above. This has
been in line with our previous reporting, where we had envisaged subsequent
investments into a number of current portfolio companies to ensure each is
appropriately capitalised to execute their respective business plans. The
specific investments made during the period are as follows:
· US$10.0 million working facility to Invenergy
· US$10.0 million preferred equity investment into MaxWest
· US$9.8 million in convertible notes to Rabun Gap
· US$1.5million capital repayment from Telogia.
As of 31 December 2009, the Company was not actively negotiating nor had it
entered into any Heads of Terms for investment. As noted, the Asset Advisor's
(EEA Fund Management) short-term focus has been on managing the Company's
existing portfolio of investments although EEA has continued to assess and
review investment opportunities.
On the whole, Leaf's investments are performing adequately against a difficult
background and we remain optimistic as to the value generation potential of the
investments. Some selected noteworthy events from the Company's portfolio over
the reporting period, are as follows:
· MaxWest's first of its kind biosolids gasification facility in Sanford,
Florida is progressing according to plan. The plant provides a cost-effective
means of disposing municipal biosolids for the town of Sanford. In addition,
MaxWest has also secured additional sources of biosolid waste from neighbouring
municipalities under merchant contracts executed in the period. MaxWest has also
executed a Heads of Terms for a subsequent plant in the northeastern U.S. and,
most recently, participated in a competitive bid process conducted by a large
U.S. municipality where they were selected as the solution provider. As a
result, exclusive negotiations for a facility in that municipality are now
underway.
· Miasolé's photovoltaic modules achieved Underwriters Laboratories, Inc
(UL) and International Electrotechnical Commission (IEC) milestones, becoming
the first CIGS thin-film producer to have its modules certified to the three
most critical certification standards (UL 1703 and IEC 61646 and 61730). In
addition, Miasolé has also commenced commercial shipment to selected customers.
· Rabun Gap achieved Commercial Operations Date on January 28, 2010. In
addition, Rural Utility Services, a division of the U.S. Department of
Agriculture, has earmarked a US$20.7 million long-term favourable fixed-rate
interest loan to the facility.
· Telogia has been completed on time and within budget. In addition, on
October 30, 2009, Telogia received an ITC cash grant of approximately US$3
million.
· SkyFuel completed its commercial demonstration facility at the SEGS-II
solar facility in California. Furthermore, SkyFuel also completed the optical
performance testing at NREL, a significant milestone.
Initially, it was not expected that the Company would generate significant
levels of income at this stage in the investment cycle, however where
investments have been structured on a debt or convertible basis, those
particular instruments are generating interest income for the Company over the
life of the investment. The Company received US$2.5 million of income
from investments during the year.
Prospective for 2010
The prospects for the environmental/clean energy market look considerably more
positive than six months ago, as the underlying drivers remain strong -
increasing focus on climate change and the environment more broadly and energy
security issues.
Furthermore, the US government has yet to disburse the bulk of US$200 billion in
stimulus money that has been earmarked for renewable energy programs. About
US$24 billion has been allocated to date, with US$57 billion projected in 2010
and US$56 billion in 2011. In fact, Leaf Clean has already benefited from
increased incentives for renewable energy and clean fuels, mostly in the
government backed low-cost financing and/or loan guarantees. This development
is in line with the overall investment thesis, which sees a combination of
public policy pressures and increasing commercial interest in North American
clean energy assets driving substantial long-term capital appreciation around
these assets. As a result, EEA continues to work closely with the senior
management teams of Leaf's portfolio companies to ensure that each is positioned
properly to take advantage of relevant government grants, guarantees, and
incentives.
The Asset Advisor also views the developing political and societal dynamics in
the United States around climate change as significant. Although the Copenhagen
summit on climate change this past December failed to produce an heir to the
Kyoto Protocol, we, nevertheless, are encouraged by the incremental progress
made. Achieving some level of commitment from the United States, China, and
India is a crucial and unprecedented step. Further stateside, California became
the first state in the U.S. to adopt comprehensive regulations to reduce
greenhouse gases from commercial systems and the U.S. Environmental Protection
Agency (EPA) announced this past December that greenhouse gases threaten the
public health and welfare of the nation's citizens. The finding was significant,
as it makes it possible for the Obama administration to begin regulating these,
even if a climate bill is not passed in the US Congress. These developments, in
our view, will see large corporations take a stronger interest in clean
technology and in ways to reduce emissions of greenhouse gases through clean
energy consumption and green products and services. The Company has positioned
itself to benefit from US government climate change and energy policy, in
whatever guise is pursued by policy makers. The portfolio's value would be
enhanced with an expanded Renewable Portfolio Standard, with initiatives to
support low carbon energy or as a result of a carbon pricing regime such as Cap
and Trade.
Encouragingly, there are some indications that an economic recovery is
gathering. The S&P 500, NASDAQ and Russell 2000 are up over 8% in the last 6
months. We are also seeing more activity in renewable energy IPO and merger and
acquisition markets as investors and companies return to the capital markets.
In this context, your Asset Advisor is actively planning for and evaluating
approaches for the realization of value at the portfolio company level.
EEA Fund Management Limited
Asset Advisors to Leaf Clean Energy Company
10 March 2010
Review report by KPMG Audit LLC 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 2009,
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 note 2(a) the annual financial statements are prepared in
accordance with IFRS. The condensed sets of financial statements included in
this half yearly report have been prepared in accordance with IAS 34 Interim
Financial Reporting.
The accounting policies that have been adopted in preparing the condensed set of
financial statements are consistent with those that the Directors currently
intend to use in the next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set 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
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly report for the
six months ended 31 December 2009 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
10 March 2010
Condensed statements of comprehensive income
for the six months ended 31 December 2009
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| | | Company | Group |
+--------------------+------+---------------------------------------+-------------------------------------------+
| | | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) |
| | | | | | | (Restated | (Restated |
| | | | | | | Note 2b) | Note 2b) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| |Note | 6 | 6 | Year | 6 | 6 | Year |
| | | months | months | ended | months | months | ended |
| | | ended | ended | 30 | ended | ended | 30 |
| | | 31 | 31 | June | 31 | 31 | June |
| | | December | December | 2009 | December | December | 2009 |
| | | 2009 | 2008 | | 2009 | 2008 | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| | | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Interest income on | | 121 | 3,941 | 4,430 | 206 | 3,961 | 4,438 |
| cash balances | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Unrealised losses | | | | | | | |
| on revaluation of | 11 | (14,415) | (14,000) | (30,400) | (9,200) | (14,000) | (30,400) |
| investments at | | | | | | | |
| fair value through | | | | | | | |
| profit or loss | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Net foreign | | (1,009) | (23,409) | (16,818) | (1,020) | (23,409) | (16,818) |
| exchange loss | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Gross portfolio | | (15,303) | (33,468) | (42,788) | (10,014) | (33,448) | (42,780) |
| return | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Management fees | 7.1 | (3,127) | (3,414) | (6,902) | (3,127) | (3,414) | (6,902) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Other | 7.2 | (4,397) | (2,624) | (4,169) | (4,397) | (2,624) | (4,169) |
| administration | | | | | | | |
| expenses | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Net portfolio | | (22,827) | (39,506) | (53,859) | (17,538) | (39,486) | (53,851) |
| return | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Sales revenue and | | - | - | - | 7,501 | 1,158 | 2,782 |
| other income | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Profit on disposal | | - | - | - | 75 | - | 57 |
| of assets | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Impairment of | 8 | - | - | - | (5,215) | - | - |
| non-financial | | | | | | | |
| assets | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Operating expenses | | - | - | - | (10,288) | (1,915) | (4,430) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Loss before | | (22,827) | (39,506) | (53,859) | (25,465) | (40,243) | (55,442) |
| finance costs | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Finance costs | | - | - | - | (368) | (115) | (119) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Loss before tax | | (22,827) | (39,506) | (53,859) | (25,833) | (40,358) | (55,561) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Taxation | | - | - | - | - | - | - |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Loss for the | | (22,827) | (39,506) | (53,859) | (25,833) | (40,358) | (55,561) |
| period/year | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Exchange | | - | - | - | (22) | (144) | (123) |
| differences on | | | | | | | |
| translation of | | | | | | | |
| foreign operations | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Total | | (22,827) | (39,506) | (53,859) | (25,855) | (40,502) | (55,684) |
| comprehensive | | | | | | | |
| income | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Loss for the | | | | | | | |
| period/year | | | | | | | |
| attributable to | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Equity holders of | | (22,827) | (39,506) | (53,859) | (25,286) | (40,221) | (55,226) |
| the parent | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Non-controlling | | - | - | - | (547) | (137) | (335) |
| interest | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| | | (22,827) | (39,506) | (53,859) | (25,833) | (40,358) | (55,561) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Total | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
| attributable to | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Equity holders of | | (22,827) | (39,506) | (53,859) | (25,263) | (40,329) | (55,338) |
| the parent | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Non-controlling | | - | - | - | (592) | (173) | (346) |
| interest | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| | | (22,827) | (39,506) | (53,859) | (25,855) | (40,502) | (55,684) |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
| Basic and diluted | | | | | | | |
| loss per share | 9 | (12.43) | (20.36) | (28.38) | (13.77 ) | (20.73) | (29.10) |
| (cents) | | | | | | | |
+--------------------+------+-------------+-------------+-----------+----------------+--------------+-----------+
The accompanying notes form an integral part of these financial statements
Condensed statements of financial position
as at 31 December 2009
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | Company | Group |
+--------------------+------+---------------------------------------+---------------------------------------+
| | | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) |
| | | | | | | (Restated | (Restated |
| | | | | | | Note 2b) | Note 2b) |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| |Note | 31 | 31 | 30 | 31 Dec | 31 | 30 |
| | | Dec | Dec | Jun | 2009 | Dec | Jun |
| | | 2009 | 2008 | 2009 | | 2008 | 2009 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Assets | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Investments at |11.1 | - | - | - | 76,626 | 92,226 | 85,826 |
| fair value through | | | | | | | |
| profit or loss | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Investments in |11.2 | 182,754 | 163,118 | 168,868 | - | - | - |
| subsidiaries at | | | | | | | |
| fair value through | | | | | | | |
| profit or loss | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Property, plant | 12 | - | - | - | 62,488 | 32,101 | 53,257 |
| and equipment | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Intangible assets | 13 | - | - | - | 28,521 | 15,931 | 18,137 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total non-current | | 182,754 | 163,118 | 168,868 | 167,635 | 140,258 | 157,220 |
| assets | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Inventories | | - | - | - | 219 | 3 | 128 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Trade and other | | 82 | 206 | 121 | 1,765 | 3,161 | 2,982 |
| receivables | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash and cash | | 135,519 | 199,549 | 167,075 | 141,778 | 202,762 | 171,852 |
| equivalents | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total current | | 135,601 | 199,755 | 167,196 | 143,762 | 205,926 | 174,962 |
| assets | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total assets | | 318,355 | 362,873 | 336,064 | 311,397 | 346,184 | 332,182 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Equity | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Share capital | 15 | 37 | 38 | 37 | 37 | 38 | 37 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Share premium | 15 | 359,603 | 364,208 | 359,603 | 359,603 | 364,208 | 359,603 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Foreign currency | | - | - | - | (88) | (108) | (112) |
| translation | | | | | | | |
| reserve | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Retained losses | | (69,068) | (31,888) | (46,241) | (72,894) | (32,603) | (47,608) |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total equity | | 290,572 | 332,358 | 313,399 | 286,658 | 331,535 | 311,920 |
| attributable to | | | | | | | |
| equity holders of | | | | | | | |
| the parent | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Non-controlling | | - | - | - | 4,931 | 1,027 | 2,404 |
| interest | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total equity | | 290,572 | 332,358 | 313,399 | 291,589 | 332,562 | 314,324 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Liabilities | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Unpaid capital | | | | | | | |
| contributions to | | 10,476 | 14,623 | 14,745 | - | - | - |
| subsidiaries | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Loans and | 16 | - | - | - | 7,899 | 8,241 | 7,689 |
| borrowings | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Deferred | 17 | - | - | - | 1,824 | 1,824 | 1,600 |
| infrastructure | | | | | | | |
| grants | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Deferred revenue | 18 | - | - | - | 1,381 | 1,381 | 1,381 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total non-current | | 10,476 | 14,623 | 14,745 | 11,104 | 11,446 | 10,670 |
| liabilities | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Loans and | 16 | - | - | - | 2,774 | 474 | 1,577 |
| borrowings | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Trade and other | | 3,492 | 345 | 844 | 5,930 | 1,702 | 5,611 |
| payables | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Unpaid capital | | | | | | | |
| contributions to | | 13,815 | 15,547 | 7,076 | - | - | - |
| subsidiaries | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total current | | 17,307 | 15,892 | 7,920 | 8,704 | 2,176 | 7,188 |
| liabilities | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total liabilities | | 27,783 | 30,515 | 22,665 | 19,808 | 13,622 | 17,858 |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Total equity and | | 318,355 | 362,873 | 336,064 | 311,397 | 346,184 | 332,182 |
| liabilities | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net asset value | 6 | 158.23 | 177.76 | 170.67 | 156.10 | 177.32 | 169.86 |
| per share (cents) | | | | | | | |
+--------------------+------+-------------+-------------+-----------+-------------+-------------+-----------+
The accompanying notes form an integral part of these financial statements
Condensed statements of changes in equity
for the six months ended 31 December 2009
+---------------+---------+----------+----------+----------+
| | | | | |
| | | | | |
| | Share | Share | Retained | Total |
| | Capital | Premium | earnings | |
+---------------+---------+----------+----------+----------+
| | | | | |
| | US$'000 | US$'000 | US$'000 | US$'000 |
+---------------+---------+----------+----------+----------+
| Company | | | | |
+---------------+---------+----------+----------+----------+
| Balance | 40 | 386,067 | 7,618 | 393,725 |
| at 1 | | | | |
| July | | | | |
| 2008 | | | | |
+---------------+---------+----------+----------+----------+
| Total | - | - | (53,859) | (53,859) |
| comprehensive | | | | |
| income | | | | |
+---------------+---------+----------+----------+----------+
| | | | | |
+---------------+---------+----------+----------+----------+
| Transactions | | | | |
| with owners, | | | | |
| recorded | | | | |
| directly in | | | | |
| equity | | | | |
+---------------+---------+----------+----------+----------+
| Contributions | | | | |
| by and | | | | |
| distributions | | | | |
| to owners | | | | |
+---------------+---------+----------+----------+----------+
| Repurchase | (3) | (26,464) | - | (26,467) |
| of shares | | | | |
+---------------+---------+----------+----------+----------+
| Total | | | | |
| contributions | (3) | (26,464) | - | (26,467) |
| by and | | | | |
| distributions | | | | |
| to owners | | | | |
+---------------+---------+----------+----------+----------+
| Balance | (37) | 359,603 | (46,241) | 313,399 |
| at 30 | | | | |
| June | | | | |
| 2009 | | | | |
| (audited) | | | | |
+---------------+---------+----------+----------+----------+
| Total | - | - | (22,827) | (22,827) |
| comprehensive | | | | |
| income | | | | |
+---------------+---------+----------+----------+----------+
| Balance | 37 | 359,603 | (69,068) | 290,572 |
| at 31 | | | | |
| December | | | | |
| 2009 | | | | |
| (unaudited) | | | | |
+---------------+---------+----------+----------+----------+
| | | | | |
+---------------+---------+----------+----------+----------+
| Balance | 40 | 386,067 | 7,618 | 393,725 |
| at 1 | | | | |
| July | | | | |
| 2008 | | | | |
+---------------+---------+----------+----------+----------+
| Total | - | - | (39,506) | (39,506) |
| comprehensive | | | | |
| income | | | | |
+---------------+---------+----------+----------+----------+
| | | | | |
+---------------+---------+----------+----------+----------+
| Transactions | | | | |
| with owners, | | | | |
| recorded | | | | |
| directly in | | | | |
| equity | | | | |
+---------------+---------+----------+----------+----------+
| Contributions | | | | |
| by and | | | | |
| distributions | | | | |
| to owners | | | | |
+---------------+---------+----------+----------+----------+
| Repurchase | (2) | (21,859) | - | (21,861) |
| of shares | | | | |
+---------------+---------+----------+----------+----------+
| Total | | | | |
| contributions | (2) | (21,859) | - | (21,861) |
| by and | | | | |
| distributions | | | | |
| to owners | | | | |
+---------------+---------+----------+----------+----------+
| Balance | 38 | 364,208 | (31,888) | 332,358 |
| at 31 | | | | |
| December | | | | |
| 2008 | | | | |
| (unaudited) | | | | |
+---------------+---------+----------+----------+----------+
| | | | | |
+---------------+---------+----------+----------+----------+
Condensed statements of changes in equity
for the six months ended 31 December 2009 (continued)
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | Foreign | | | | |
| | | | currency | | | Non-controlling | |
| | Share | Share | translation | Retained | | interest | Total |
| | Capital | Premium | reserve | earnings | Total | | equity |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Group | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 40 | 386,067 | - | 7,618 | 393,725 | - | 393,725 |
| at 1 | | | | | | | |
| July | | | | | | | |
| 2008 as | | | | | | | |
| reported | | | | | | | |
| previously | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Effect | | | | | | | |
| of | - | - | - | - | - | - | - |
| change | | | | | | | |
| in | | | | | | | |
| accounting | | | | | | | |
| policy | | | | | | | |
| (note 2b)* | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 40 | 386,067 | - | 7,618 | 393,725 | - | 393,725 |
| at 1 | | | | | | | |
| July | | | | | | | |
| 2008 | | | | | | | |
| (restated) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | - | - | (112) | (55,226) | (55,338) | (346) | (55,684) |
| comprehensive | | | | | | | |
| income for | | | | | | | |
| the period | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Transactions | | | | | | | |
| with owners, | | | | | | | |
| recorded | | | | | | | |
| directly in | | | | | | | |
| equity | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Contributions | | | | | | | |
| by and | | | | | | | |
| distributions | | | | | | | |
| to owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Repurchase | (3) | (26,464) | - | - | (26,467) | - | (26,467) |
| of shares | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | | | | - | | | |
| contributions | (3) | (26,464) | - | | (26,467) | - | (26,467) |
| by and | | | | | | | |
| distributions | | | | | | | |
| to owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Changes | | | | | | | |
| in | | | | | | | |
| ownership | | | | | | | |
| interest | | | | | | | |
| in | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Increase | | | | | | | |
| in | - | - | - | - | - | 2,750 | 2,750 |
| non-controlling | | | | | | | |
| interest | | | | | | | |
| due to | | | | | | | |
| acquisition of | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | | | | | | | |
| changes | - | - | - | - | - | 2,750 | 2,750 |
| in | | | | | | | |
| ownership | | | | | | | |
| interest | | | | | | | |
| in | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | (3) | (26,464) | - | - | (26,467) | 2,750 | (23,717) |
| transactions | | | | | | | |
| with owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 37 | 359,603 | (112) | (47,608) | 311,920 | 2,404 | 314,324 |
| at 30 | | | | | | | |
| June | | | | | | | |
| 2009 | | | | | | | |
| (audited) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 37 | 359,603 | - | (45,684) | 313,956 | - | 313,956 |
| at 1 | | | | | | | |
| July | | | | | | | |
| 2009 as | | | | | | | |
| reported | | | | | | | |
| previously | | | | | | | |
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Effect | | | | | | | |
| of | - | - | (112) | (1,924) | (2,036) | 2,404 | 368 |
| change | | | | | | | |
| in | | | | | | | |
| accounting | | | | | | | |
| policy | | | | | | | |
| (note 2b) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 37 | 359,603 | (112) | (47,608) | 311,920 | 2,404 | 314,324 |
| at 1 | | | | | | | |
| July | | | | | | | |
| 2009 | | | | | | | |
| (restated) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | - | - | 24 | (25,286) | (25,262) | (593) | (25,855) |
| comprehensive | | | | | | | |
| income | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Transactions | | | | | | | |
| with owners, | | | | | | | |
| Recorded | | | | | | | |
| directly in | | | | | | | |
| equity | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Changes | | | | | | | |
| in | | | | | | | |
| ownership | | | | | | | |
| interest | | | | | | | |
| in | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Increase | | | | | | | |
| in | - | - | - | - | - | 3,120 | 3,120 |
| non-controlling | | | | | | | |
| interest due to | | | | | | | |
| acquisition of | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | - | - | - | - | - | 3,120 | 3,120 |
| transactions | | | | | | | |
| with owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 37 | 359,603 | (88) | (72,894) | 286,658 | 4,931 | 291,589 |
| at 31 | | | | | | | |
| December | | | | | | | |
| 2009 | | | | | | | |
| (audited) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
* There is no effect on opening retained earnings as at 1 July 2008 as all
subsidiaries were acquired after that date.
The accompanying notes form an integral part of these financial statements
Condensed statements of changes in equity
for the six months ended 31 December 2009 (continued)
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | Foreign | | | | |
| | | | currency | | | Non-controlling | |
| | Share | Share | translation | Retained | | interest | Total |
| | Capital | Premium | reserve | earnings | Total | | equity |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Group | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | | | | | | | |
| at 1 | 40 | 386,067 | - | 7,618 | 393,725 | - | 393,725 |
| July | | | | | | | |
| 2008 as | | | | | | | |
| reported | | | | | | | |
| previously | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Effect | | | | | | | |
| of | - | - | - | - | - | - | - |
| change | | | | | | | |
| in | | | | | | | |
| accounting | | | | | | | |
| policy | | | | | | | |
| (note 2b)* | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 40 | 386,067 | - | 7,618 | 393,725 | - | 393,725 |
| at 1 | | | | | | | |
| July | | | | | | | |
| 2008 | | | | | | | |
| (restated) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | - | - | (108) | (40,221) | (40,329) | (173) | (40,502) |
| comprehensive | | | | | | | |
| income | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Transactions | | | | | | | |
| with owners, | | | | | | | |
| recorded | | | | | | | |
| directly in | | | | | | | |
| equity | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Contributions | | | | | | | |
| by and | | | | | | | |
| distributions | | | | | | | |
| to owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Repurchase | (2) | (21,859) | - | - | (21,861) | - | (21,861) |
| of shares | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | | | | | | | |
| contributions | (2) | (21,859) | - | - | (21,861) | - | (21,861) |
| by and | | | | | | | |
| distributions | | | | | | | |
| to owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Changes | | | | | | | |
| in | | | | | | | |
| ownership | | | | | | | |
| interest | | | | | | | |
| in | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Increase | | | | | | | |
| in | - | - | - | - | - | 1,200 | 1,200 |
| non-controlling | | | | | | | |
| interest | | | | | | | |
| due to | | | | | | | |
| acquisition of | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | | | | | | | |
| changes | - | - | - | - | - | 1,200 | 1,200 |
| in | | | | | | | |
| ownership | | | | | | | |
| interest | | | | | | | |
| in | | | | | | | |
| subsidiaries | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Total | (2) | (21,859) | - | - | (21,861) | 1,200 | (20,661) |
| transactions | | | | | | | |
| with owners | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | | | | | | | |
| at 31 | 38 | 364,208 | (108) | (32,603) | 331,535 | 1,027 | 332,562 |
| December | | | | | | | |
| 2008 | | | | | | | |
| (restated) | | | | | | | |
| (unaudited) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Reconciliation | | | | | | | |
| of balances as | | | | | | | |
| at | | | | | | | |
| 31 December | | | | | | | |
| 2008 | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | | | | | | | |
| at 31 | 38 | 364,208 | - | (31,771) | 332,475 | - | 332,475 |
| December | | | | | | | |
| 2008 as | | | | | | | |
| reported | | | | | | | |
| previously | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Effect | | | | | | | |
| of | - | - | (108) | (832) | (940) | 1,027 | 87 |
| change | | | | | | | |
| in | | | | | | | |
| accounting | | | | | | | |
| policy | | | | | | | |
| (noted 2b) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
| Balance | 38 | 364,208 | (108) | (32,603) | 331,535 | 1,027 | 332,562 |
| at 31 | | | | | | | |
| December | | | | | | | |
| 2008 | | | | | | | |
| (restated) | | | | | | | |
| (unaudited) | | | | | | | |
+-----------------+---------+----------+-------------+----------+----------+-----------------+----------+
* There is no effect on opening retained earnings as at 1 July 2008 as all
subsidiaries were acquired after that date.
The accompanying notes form an integral part of these financial statements
Condensed statements of cash flows
For the six months ended 31 December 2009
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | Company | Group |
+---------------------------+---------------------------------------+---------------------------------------+
| | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) |
| | | | | | (Restated | (Restated |
| | | | | | Note 2b) | Note 2b) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | 6 | 6 | Year | 6 | 6 | Year |
| | months | months | ended | months | months | ended |
| | ended | ended | 30 | ended | ended | 30 |
| | 31 | 31 | June | 31 | 31 | June |
| | December | December | 2009 | December | December | 2009 |
| | 2009 | 2008 | | 2009 | 2008 | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Interest received on cash | 142 | 4,019 | 4,598 | 206 | 4,179 | 4,605 |
| balances | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash received from | - | - | - | 7,502 | 1,153 | 2,834 |
| customers | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Operating expenses paid | (4,450) | (7,954) | (12,902) | (17,583) | (9,901) | (16,511) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net cash used in | (4,308) | (3,935) | (8,304) | (9,875) | (4,569) | (9,072) |
| operating activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Purchase of investments | | | | | | |
| in subsidiaries at fair | (26,239) | (91,998) | (122,088) | - | - | - |
| value through profit or | | | | | | |
| loss | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Purchase of financial | | | | | | |
| assets at fair value | - | - | - | - | (51,226) | (61,226) |
| through profit or loss | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Purchase of intangible | - | - | - | - | - | (2,000) |
| asset | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Proceeds from disposal of | | | | | | |
| property, plant and | - | - | - | 75 | - | - |
| equipment | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Acquisition of | - | - | - | (10,139) | (13,093) | (15,172) |
| subsidiaries net of cash | | | | | | |
| acquired | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net purchases of | - | - | - | (10,513) | (7,284) | (23,449) |
| property, plant and | | | | | | |
| equipment | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Payment of cash held in | - | - | - | - | (4,803) | (4,803) |
| escrow account | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net cash used in | (26,239) | (91,998) | (122,088) | (20,577) | (76,406) | (106,650) |
| investing activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Repurchase of shares | - | (21,861) | (26,467) | - | (21,861) | (26,467) |
| during the period | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net borrowings | - | - | - | 1,407 | (11,602) | (11,181) |
| received/(paid) | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Infrastructure grants | - | - | - | - | - | 1,445 |
| received | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net cash used in | - | (21,861) | (26,467) | 1,407 | (33,463) | (36,203) |
| financing activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net decrease in cash and | (30,547) | (117,794) | (156,859) | (29,045) | (114,638) | (151,925) |
| cash equivalents | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash and cash equivalents | 167,075 | 340,752 | 340,752 | 171,852 | 340,752 | 340,752 |
| at start of the period | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Effect of exchange rate | (1,009) | (23,409) | (16,818) | (1,029) | (23,352) | (16,975) |
| fluctuations on cash and | | | | | | |
| cash equivalents | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Cash and cash equivalents | | | | | | |
| at end of period/year | 135,519 | 199,549 | 167,075 | 141,778 | 202,762 | 171,852 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
The accompanying notes form an integral part of these financial statements
Condensed statements of cash flows (continued)
For the six months ended 31 December 2009
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | Company | Group |
+---------------------------+---------------------------------------+---------------------------------------+
| Reconciliation of loss | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) |
| before tax to net cash | | | | | (Restated | (Restated |
| used in operating | | | | | Note 2b) | Note 2b) |
| activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | 6 | 6 | Year | 6 | 6 | Year |
| | months | months | ended | months | months | ended |
| | ended | ended | 30 | ended | ended | 30 |
| | 31 | 31 | June | 31 | 31 | June |
| | December | December | 2009 | December | December | 2009 |
| | 2009 | 2008 | | 2009 | 2008 | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Loss before tax | (22,827) | (39,506) | (53,859) | (25,833) | (40,358) | (55,561) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Adjustments for: | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Unrealised losses on | | | | | | |
| revaluation of | 14,415 | 14,000 | 30,400 | 9,200 | 14,000 | 30,400 |
| investments at fair value | | | | | | |
| through profit or loss | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Impairment of assets | - | - | - | 5,215 | - | - |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Depreciation | - | - | - | 1,451 | 450 | 1,082 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Foreign exchange loss | 1,009 | 23,409 | 16,818 | 1,020 | 23,409 | 16,818 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Profit on disposal of | - | - | - | (75) | - | - |
| assets | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Movement in trade and | 18 | 109 | 194 | 85 | 271 | 944 |
| other receivables | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Movement in trade and | 3,077 | (1,947) | (1,857) | (938) | (2,341) | (2,755) |
| other payables | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
| Net cash used in | (4,308) | (3,935) | (8,304) | (9,875) | (4,569) | (9,072) |
| operating activities | | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+-----------+
The accompanying notes form an integral part of these financial statements
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE
SIX
MONTHS ENDED 31 DECEMBER 2009
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.
Pursuant to the Company's Admission Document dated 22 June 2007 there was an
original placing of up to 200,000,000 Ordinary Shares of GBGBP0.0001 each for
GBGBP1 each.
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 Asset Advisor 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 2009 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 Basis of preparation
(a) Statement of compliance
These condensed consolidated 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 consolidated financial statements of the Group as
at and for the year ended 30 June 2009.
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 consolidated interim financial statements were approved by the
Board of Directors on [date].
(b) Changes in accounting policies
(i) Overview
Starting as of 1 July 2009, the Group has changed its accounting policies in
the following areas:
· Accounting for business combinations; and
· Presentation of financial statements.
(ii) Accounting for business combinations
The Group did not previously include in the consolidated financial statements
the results of investee companies over which the Group has control because the
Directors were of the opinion that their inclusion would render the Group's
consolidated financial statements misleading as such investments are held for
capital gain as part of an investment portfolio that is measured and its
performance evaluated on a fair value basis. However, such non-inclusion
constituted a departure from the requirements of International Accounting
Standard 27 "Consolidated and Separate Financial Statements".
These interim consolidated financial statements now consolidate the results of
the controlled investee companies and the acquisition method has been applied
for business combinations that occurred during the interim period ended 31
December 2009, as disclosed in note 14. This change in accounting policy has
been applied retrospectively and the comparative amounts have been accordingly
restated.
2 Basis of preparation (continued)
(b) Changes in accounting policies (continued)
(ii) Accounting for business combinations
The effect of the change in accounting policy is a decrease of US$2,036,000 in
net assets attributable to equity holders of the parent and an increase of
US$2,404,000 in non-controlling interest as at 1 July 2009.
Control is the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that currently are
exercisable. The acquisition date is the date on which control is transferred to
the acquirer.
Judgement is applied in determining the acquisition date and determining whether
control is transferred from one party to another. The Group measures goodwill as
the fair value of the consideration transferred including the recognised amount
of any non-controlling interest in the acquiree, less the net recognised amount
(generally fair value) of the identifiable assets acquired and liabilities
assumed, all measured as of the acquisition date. Consideration transferred
includes the fair values of the assets transferred, liabilities incurred by the
Group to the previous owners of the acquiree, and equity interests issued by the
Group. Consideration transferred also includes the fair value of any contingent
consideration and share-based payment awards of the acquiree that are replaced
mandatorily in the business combination (see below). If a business combination
results in the termination of pre-existing relationships between the Group and
the acquiree, then the lower of the termination amount, as contained in the
agreement, and the value of the off-market element is deducted from the
consideration transferred and recognised in other expenses.
A contingent liability of the acquiree is assumed in a business combination only
if such a liability represents a present obligation and arises from a past
event, and its fair value can be measured reliably.
The Group measures any non-controlling interest at its proportionate interest in
the identifiable net assets of the acquiree.
Transaction costs that the Group incurs in connection with a business
combination, such as finder's fees, legal fees, due diligence fees, and other
professional and consulting fees are expensed as incurred. A contingent
liability of the acquiree is assumed in a business combination only if such a
liability represents a present obligation and arises from a past event, and its
fair value can be measured reliably.
(iii) Presentation of financial statements
The Group applies revised IAS 1 Presentation of Financial Statements (2007),
which became effective as of 1 January 2009. As a result, the Group presents in
the consolidated statement of changes in equity all owner changes in equity,
whereas all non-owner changes in equity are presented in the consolidated
statement of comprehensive income. This presentation has been applied in these
condensed interim financial statements as of and for the six months period ended
on 31 December 2009. Comparative information has been re-presented so that it
also is in conformity with the revised standard.
Since the change in accounting policy only impacts presentation aspects, there
is no impact on earnings per share.
(c) 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.
Except as described below, in preparing these condensed consolidated interim
financial statements, the significant judgements made by management in applying
the Group's accounting policies and the key sources of estimation uncertainty
are as follows:
2 Basis of preparation (continued)
(c) Use of estimates and judgements (continued)
During the six months ended 31 December 2009 management reassessed its estimates
in respect of:
· the valuation of unquoted investments (see note 11); and
· impairment of goodwill and other intangible assets (see note 8 and 13)
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in these financial statements, and have been applied
consistently by Group entities.
(a) Basis of consolidation
(i) Business combinations
The Group has changed its accounting policy with respect to accounting for
business combinations. See note 2(b)(ii) for further details.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of
subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases. The accounting
policies of subsidiaries have been changed when necessary to align them with the
policies adopted by the Group.
(iii) Associates
An associate is an entity over which the Group is in a position to exercise
significant influence, but not control or joint control, through the financial
and operating policy decisions of the investee entity. As Leaf is an investment
company, and its investments held in associates are designated as held at fair
value through profit or loss, the provisions of IAS 28 'Investments in
Associates' do not apply. Such investments are measured at fair value, with
changes in fair value recognised in profit or loss in the period in which they
occur.
(iv) Joint ventures
A joint venture is a contractual arrangement whereby two or more parties
undertake an economic activity that is subject to joint control. As the Company
is an investment company, and its interests held in joint ventures are
designated as held at fair value through profit or loss, the provisions of IAS
31 'Interests in Joint Ventures' do not apply. Such interests are measured at
fair value, with changes in fair value recognised in profit or loss in the
period in which they occur.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains arising from
intra-group transactions, are eliminated in preparing the consolidated financial
statements.
(b) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses. Cost includes expenditure that
is directly attributable to the acquisition of the asset. The cost of
self-constructed assets includes the cost of materials and direct labour, any
other costs directly attributable to bringing the assets to a working condition
for their intended use, the costs of dismantling and removing the items and
restoring the site on which they are located, and capitalised borrowing costs.
Cost also may include transfers from other comprehensive income of any gain or
loss on qualifying cash flow hedges of foreign currency purchases of property,
plant and equipment. Purchased software that is integral to the functionality of
the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of property,
plant and equipment.
3 Significant accounting policies (continued)
(i) Recognition and measurement
Gains and losses on disposal of an item of property, plant and equipment are
determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment, and are recognised net within other income in
profit or loss. When revalued assets are sold, the amounts included in the
revaluation reserve are transferred to retained earnings.
(ii) Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is
recognised in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group, and its cost
can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an
asset, or other amount substituted for cost, less its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and equipment,
since this most closely reflects the expected pattern of consumption of the
future economic benefits embodied in the asset.
Leased assets are depreciated over the shorter of the lease term and their
useful lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative periods are as
follows:
· buildings 39 years
· plant and equipment 5 to 20 years
· fixtures and fittings 5-7 years
· motor vehicles 5 years
Depreciation methods, useful lives and residual values are reviewed at each
financial year-end and adjusted if appropriate.
(c) Intangible assets
(i) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in
intangible assets. For measurement of goodwill at initial recognition, see note
3(a)(i).
Acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with
equity holders in their capacity as equity holders and therefore no goodwill is
recognised as a result of such transactions.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful
lives are measured at cost less accumulated amortisation and accumulated
impairment losses.
(d) Impairment of non-financial assets
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists, an
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount
if any. The recoverable amount is the higher of an asset's fair value less costs
to sell and value in use. For the purposes of assessing impairment, intangible
assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
3 Significant accounting policies (continued)
(e) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the inventories to their present
location and condition. Cost is calculated using the first-in, first-out method.
Net realisable value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing, selling and
distribution.
(f) Receivables
Receivables do not carry any interest and are stated at their nominal value as
reduced by appropriate allowances for estimated irrecoverable amounts.
(g) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short
term, highly liquid investments that are readily convertible to known amounts of
cash and that are subject to an insignificant risk of changes in value.
(h) Borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges, including premiums payable
on settlement or redemption and direct issue costs, are accounted for on an
accrual basis to the income statement using the effective interest method and
are added to the carrying amount of the instrument to the extent that they are
not settled in the period in which they arise. The effective interest method
allocates the interest expense over the life of the instrument so as to reflect
a constant return on the carrying amount of the liability.
Borrowings include a component of the company's deferred ordinary shares and
preference shares in subsidiaries held by third parties that fall under the
definition of financial liabilities under IAS 32.
(i) Government grants
Government grants are recognised initially as deferred income at fair value when
there is reasonable assurance that they will be received and the Group will
comply with the conditions associated with the grant. Grants that compensate the
Group for expenses incurred are recognised in profit or loss as other income on
a systematic basis in the same periods in which the expenses are recognised.
Grants that compensate the Group for the cost of an asset are recognised in
profit or loss on a systematic basis over the useful life of the asset.
(j) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share options are recognised as
a deduction from equity, net of any tax effects.
(k) Revenue and expense recognition
Interest income is recognised on a time-proportionate basis using the effective
interest rate method.
Dividends receivable on equity and non-equity shares, which carry significant
equity rights, are recognised as revenue when the shareholders' right to receive
payment has been established, normally ex-dividend date. When no ex-dividend
date is available, dividends receivable on or before the period end are treated
as revenue for the period. Provision is made for any dividends not expected to
be received.
Fixed returns on debt securities and loans are recognised on an effective
interest rate basis, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset's
net carrying amount.
Revenue from gas sales is recognised upon delivery and passage of title to the
customer based on production as measured in cubic feet.
Expenses are accounted for on an accrual basis. Expenses are charged to the
income statement. This includes expenses directly related to making an
investment which is held at fair value through profit or loss.
3 Significant accounting policies (continued)
(l) 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 period, adjusted for own shares
held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding, adjusted for own shares held, for the effects of
all dilutive potential ordinary shares, which comprise convertible notes and
share options granted to employees.
(m) Investments in subsidiaries
The Company designated its investments in subsidiaries, including equity, loan
and similar instruments, as at fair value through profit or loss on initial
recognition. Gains and losses arising from changes in fair value of investments
in subsidiaries, including foreign exchange movements, are recognised in the
statement of comprehensive income for the period. Investments in unquoted
subsidiaries are valued using recognised valuation methodologies, based on the
International Private Equity and Venture Capital Guidelines, which reflect the
amount for which an asset could be exchanged between knowledgeable, willing
parties on an arm's length basis. Fair value for this purpose is determined with
reference to the valuation of the underlying investee entities.
(n) Investments at fair value through profit or loss
The Group designated its investments, including equity, loan and similar
instruments, as at fair value through profit or loss on initial recognition.
Gains and losses arising from changes in fair value of investments, including
foreign exchange movements, are recognised in the profit or loss for the period.
Unquoted investments are valued using recognised valuation methodologies, based
on the International Private Equity and Venture Capital Guidelines, which
reflect the amount for which an asset could be exchanged between knowledgeable,
willing parties on an arm's length basis.
The Group holds a number of investments in entities over which it has
significant influence which meet the definition of associates in IAS 28
Investment in Associates. The Company has taken advantage of the exemption from
applying IAS 28 as these investments are held as part of the Group's portfolio
with a view to the ultimate realisation of capital gains. These investments are
accounted for at fair value through profit or loss
4 Segment information
The Group operates in one business and geographic segment, being investment in
clean energy projects predominantly in North America.
5 Financial risk management policies
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 2009.
6 Net Asset Value per share
+--------------+-------------+-------------+-----------+
| | (Unaudited) | (Unaudited) | (Audited) |
+--------------+-------------+-------------+-----------+
| | 31 | 31 | 30 |
| | December | December | June |
| | 2009 | 2008 | 2009 |
+--------------+-------------+-------------+-----------+
| Company | | | |
+--------------+-------------+-------------+-----------+
| Net | 290,572 | 332,358 | 313,399 |
| assets | | | |
| attributable | | | |
| to equity | | | |
| holders of | | | |
| the parent | | | |
| (US$'000) | | | |
+--------------+-------------+-------------+-----------+
| Number | 183,634 | 186,974 | 183,634 |
| of | | | |
| ordinary | | | |
| shares | | | |
| in issue | | | |
| (thousands) | | | |
+--------------+-------------+-------------+-----------+
| Net | 158.23 | 177.76 | 170.67 |
| asset | | | |
| value | | | |
| per | | | |
| share | | | |
| (cents | | | |
| per | | | |
| share) | | | |
+--------------+-------------+-------------+-----------+
6 Net Asset Value per share (continued)
+--------------+-------------+-------------+-----------+
| | (Unaudited) | (Unaudited) | (Audited) |
+--------------+-------------+-------------+-----------+
| | 31 | 31 | 30 |
| | December | December | June |
| | 2009 | 2008 | 2009 |
+--------------+-------------+-------------+-----------+
| Group | | | |
+--------------+-------------+-------------+-----------+
| Net | 286,658 | 331,535 | 311,920 |
| assets | | | |
| attributable | | | |
| to equity | | | |
| holders of | | | |
| the parent | | | |
| (US$'000) | | | |
+--------------+-------------+-------------+-----------+
| Number | 183,634 | 186,974 | 183,634 |
| of | | | |
| ordinary | | | |
| shares | | | |
| in issue | | | |
| (thousands) | | | |
+--------------+-------------+-------------+-----------+
| Net | 156.10 | 177.32 | 169.86 |
| asset | | | |
| value | | | |
| per | | | |
| share | | | |
| (cents | | | |
| per | | | |
| share) | | | |
+--------------+-------------+-------------+-----------+
7 Charges and fees
7.1 Management fees
Annual fees
On 25 September 2009, EEA Fund Management Limited ( the "Asset Advisor" or
"EEA"), the Company's asset advisor terminated the investment management
agreement with Energy & Climate Advisors, formerly a joint venture between EEA
and Shaw Capital Inc that was responsible for performing the asset advisor's
obligations under the Asset Advisory Agreement.
EEA continues to act as investment advisor to Leaf under the terms of the
existing Asset Advisory Agreement.
Under the Asset Advisory Agreement, the Asset Advisor receives an annual
management fee from the Company, payable quarterly in advance, equating to 0.5%
per quarter of the Net Asset Value of the Company as determined in accordance
with such agreement, as at the quarter end dates (being 31 March, 30 June, 30
September and 31 December).
Management fees for the period ended 31 December 2009 amounted to US$3,126,530
(period ended 31 December 2008: US$ US$3,414,101) and the amount accrued but not
paid at the period end is US$ nil (30 June 2009: US$nil).
7.2 Administration fees
Up to October 2009, the Administrator was 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 0.08% per
annum where the total assets of the Company less borrowings is less than
US$100,000,000; 0.07% 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 0.06% 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.
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$119,376 (period ended 31
December 2008: US$130,039) and
US$60,878 was outstanding as at 31 December 2009 (30 June 2009: US$233,712).
8 Impairment of non-financial assets
Non-financial assets are assessed for impairment at each reporting period end.
This review is undertaken in conjunction with the review of the Company's
investment in each subsidiary.
+------------------------------+-----------+-------------+-----------+
| | 6 months | 6 months | Year |
| Group | ended 31 | ended 31 | ended 30 |
| | December | December | June 2009 |
| | 2009 | 2008 | |
+------------------------------+-----------+-------------+-----------+
| | US$'000 | US$'000 | US$'000 |
+------------------------------+-----------+-------------+-----------+
| Goodwill ( note 13) | (721) | - | - |
+------------------------------+-----------+-------------+-----------+
| Other Intangible assets ( | (430) | - | - |
| note 13) | | | |
+------------------------------+-----------+-------------+-----------+
| Pre-operating expenses | (1,374) | - | - |
+------------------------------+-----------+-------------+-----------+
| Property, plant and | (2,690) | - | - |
| equipment (note 12) | | | |
+------------------------------+-----------+-------------+-----------+
| Total | (5,215) | - | - |
+------------------------------+-----------+-------------+-----------+
9 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) | (Audited) |
+--------------+-------------+-------------+-----------+
| | 6 | 6 | Year |
| | months | months | ended |
| | ended | ended | 30 |
| | 31 | 31 | June |
| | December | December | 2009 |
| | 2009 | 2008 | |
+--------------+-------------+-------------+-----------+
| | US$'000 | US$'000 | US$'000 |
+--------------+-------------+-------------+-----------+
| Company | | | |
+--------------+-------------+-------------+-----------+
| Loss | (22,827) | (39,506) | (53,859) |
| attributable | | | |
| to equity | | | |
| holders of | | | |
| the parent | | | |
| (US$'000) | | | |
+--------------+-------------+-------------+-----------+
| Weighted | 183,634 | 194,034 | 189,760 |
| average | | | |
| number | | | |
| of | | | |
| ordinary | | | |
| shares | | | |
| in issue | | | |
| (thousands) | | | |
+--------------+-------------+-------------+-----------+
| Basic | (12.43) | (20.36) | (28.38) |
| and | | | |
| fully | | | |
| diluted | | | |
| loss | | | |
| per | | | |
| share | | | |
| (cents | | | |
| per | | | |
| share) | | | |
+--------------+-------------+-------------+-----------+
| Group | | | |
+--------------+-------------+-------------+-----------+
| Loss | (25,286) | (40,221) | (55,226) |
| attributable | | | |
| to equity | | | |
| holders of | | | |
| the parent | | | |
| (US$'000) | | | |
+--------------+-------------+-------------+-----------+
| Weighted | 183,634 | 194,034 | 189,760 |
| average | | | |
| number | | | |
| of | | | |
| ordinary | | | |
| shares | | | |
| in issue | | | |
| (thousands) | | | |
+--------------+-------------+-------------+-----------+
| Basic | (13.77) | (20.73) | (29.10) |
| and | | | |
| fully | | | |
| diluted | | | |
| loss | | | |
| per | | | |
| share | | | |
| (cents | | | |
| per | | | |
| share) | | | |
+--------------+-------------+-------------+-----------+
There is no difference between the basic and diluted loss per share for the
period.
10 The Subsidiaries
Since incorporation, for efficient portfolio management purposes, the Company
has established the following subsidiary companies:-
+--------------+---------------+------------+
| | Country | Percentage |
| | of | of |
| | incorporation | shares |
| | | held |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Bioenergy | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Biomass | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | USA | 100% |
| Biomass | (Delaware) | |
| Investments, | | |
| Inc.* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Escalona | Islands | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Finance | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Greenline | Islands | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Hydro | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Invenergy | Islands | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | USA | 100% |
| Invenergy | (Delaware) | |
| US | | |
| Investments, | | |
| Inc* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| LFG | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | USA | 100% |
| LFG US | (Delaware) | |
| Investments, | | |
| Inc.* | | |
+--------------+---------------+------------+
| Leaf | USA | 100% |
| MaxWest | (Delaware) | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Miasole* | Islands | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Range | Islands | |
| Fuels | | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Skyfuels | Islands | |
| Company* | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Solar | Islands | |
| Company | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| VREC* | Islands | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Waste | Islands | |
| Energy | | |
+--------------+---------------+------------+
| Leaf | Cayman | 100% |
| Wind | Islands | |
| Company | | |
+--------------+---------------+------------+
*Indirect subsidiaries
The Company has also control over the following underlying investee companies:
+---------------+----------------+-----------+-----------+
| | Country | Principal | Effective |
| | of | activity | interest |
| | incorporation | | held |
+---------------+----------------+-----------+-----------+
| Energia | Netherlands | Hydro | 75% |
| Escalona | | Energy | |
| Coopertief | | | |
| U.A | | | |
+---------------+----------------+-----------+-----------+
| Escalona | Netherlands | Hydro | 75% |
| B.V | | Energy | |
+---------------+----------------+-----------+-----------+
| Energia | Mexico | Hydro | 74% |
| Escalona | | Energy | |
| I S.A. | | | |
| de C.V | | | |
+---------------+----------------+-----------+-----------+
| Energia | Mexico | Hydro | 74% |
| Escalona | | Energy | |
| s.r.l. | | | |
+---------------+----------------+-----------+-----------+
| Energentum | Mexico | Hydro | 73% |
| S.A. de | | Energy | |
| C.V | | | |
+---------------+----------------+-----------+-----------+
| Johnstown | USA | Landfill | 100% |
| Regional | (Pennsylvania) | | |
| Energy | | | |
| LLC | | | |
+---------------+----------------+-----------+-----------+
| MaxWest | USA | Waste | 42%** |
| Environmental | (Nevada) | Energy | |
| Systems Inc | | | |
+---------------+----------------+-----------+-----------+
| Multitrade | USA | Biomass | 75% |
| Rabun Gap | (Virginia) | | |
| LLC | | | |
+---------------+----------------+-----------+-----------+
| Multitrade | USA | Biomass | 61.25% |
| Telogia | (Virginia) | | |
| LLC | | | |
+---------------+----------------+-----------+-----------+
| Telogia | USA | Biomass | 61.25% |
| Power | (Virginia) | | |
| LLC | | | |
+---------------+----------------+-----------+-----------+
** Voting rights 50.5%
11 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 Asset Advisor, 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'.
11.1 Investments at fair value through profit or loss
+-------------+-------------+-------------+------------+
| | | | |
| | | | |
| Group | (Unaudited) | (Unaudited) | (Audited) |
+-------------+-------------+-------------+------------+
| | | (Restated) | (Restated) |
| | 31 | 31 | 30 June |
| | December | December | 2009 |
| | 2009 | 2008 | US$'000 |
| | US$'000 | US$'000 | |
+-------------+-------------+-------------+------------+
| | | | |
+-------------+-------------+-------------+------------+
| Balance | 85,826 | 55,000 | 55,000 |
| brought | | | |
| forward | | | |
+-------------+-------------+-------------+------------+
| Purchases | - | 51,226 | 61,226 |
| at cost | | | |
+-------------+-------------+-------------+------------+
| Unrealised | (9,200) | (14,000) | (30,400) |
| revaluation | | | |
| losses on | | | |
| investments | | | |
+-------------+-------------+-------------+------------+
| Balance | 76,626 | 92,226 | 85,826 |
| carried | | | |
| forward | | | |
+-------------+-------------+-------------+------------+
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.
11.2 Investments in subsidiaries at fair value through profit or loss
+-------------+-------------+-------------+------------+
| | | | |
| | | | |
| Company | (Unaudited) | (Unaudited) | (Audited) |
+-------------+-------------+-------------+------------+
| | | (Restated) | (Restated) |
| | 31 | 31 | 30 June |
| | December | December | 2009 |
| | 2009 | 2008 | US$'000 |
| | US$'000 | US$'000 | |
+-------------+-------------+-------------+------------+
| | | | |
+-------------+-------------+-------------+------------+
| Balance | 168,868 | 55,000 | 55,000 |
| brought | | | |
| forward | | | |
+-------------+-------------+-------------+------------+
| Purchases | 28,301 | 122,118 | 144,268 |
| at cost | | | |
+-------------+-------------+-------------+------------+
| Unrealised | (14,415) | (14,000) | (30,400) |
| revaluation | | | |
| losses on | | | |
| investments | | | |
+-------------+-------------+-------------+------------+
| Balance | 182,754 | 163,118 | 168,868 |
| carried | | | |
| forward | | | |
+-------------+-------------+-------------+------------+
11.3 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 Asset Advisor 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.
12 Property, plant and equipment
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| | Gas | Projects | Land | Machinery | Vehicles | Office | Total |
| | production | under | and | and plant | | equipment | |
| | plants | development | Buildings | equipment | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| | | | | | | | |
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Cost | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Balance at | 7,954 | 42,294 | 361 | 6,823 | 14 | 223 | 57,669 |
| 1 July 2009 | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Additions | 326 | 4,983 | 57 | 4,138 | - | 83 | 9,587 |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Acquisition | | | | | | | |
| through | 3,832 | 3 | - | - | 7 | 95 | 3,937 |
| business | | | | | | | |
| combination | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Impairment | - | (2,690) | - | - | - | - | (2,690) |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Disposals | - | - | - | - | - | (70) | (70) |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Balance at | | | | | | | |
| 31 December | 12,112 | 44,590 | 418 | 10,961 | 21 | 331 | 68,433 |
| 2009 | | | | | | | |
| (unaudited) | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Depreciation | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Balance at | 2,253 | 2,151 | 2 | 6 | - | - | 4,412 |
| 1 July 2009 | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Depreciation | | | | | | | |
| of assets | | | | | | | |
| acquired | 82 | - | - | - | - | - | 82 |
| through | | | | | | | |
| business | | | | | | | |
| combination | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Charge for | 419 | 634 | 2 | 250 | 3 | 143 | 1,451 |
| the period | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Balance at | | | | | | | |
| 31 December | 2,754 | 2,785 | 4 | 256 | 3 | 143 | 5,945 |
| 2009 | | | | | | | |
| (unaudited) | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| Carrying | | | | | | | |
| amounts | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| 30 June | | | | | | | |
| 2009 | 5,701 | 40,143 | 359 | 6,817 | 14 | 223 | 53,257 |
| (audited) | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
| 31 December | | | | | | | |
| 2009 | 9,358 | 41,805 | 414 | 10,705 | 18 | 188 | 62,488 |
| (unaudited) | | | | | | | |
+--------------+------------+-------------+-----------+-----------+----------+-----------+---------+
13 Intangible assets
+------------------------------+-------+----------+-------------+---------+
| | | Goodwill | Other | Total |
| | | | intangibles | |
+------------------------------+-------+----------+-------------+---------+
| | | US$'000 | US$'000 | US$'000 |
+------------------------------+-------+----------+-------------+---------+
| Cost | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance as at 1 July 2008 | | - | - | - |
+------------------------------+-------+----------+-------------+---------+
| Acquisitions through | | 15,931 | - | 15,931 |
| business combinations | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance at 31 December 2008 | | 15,931 | - | 15,931 |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance as at 1 July 2009 | | 16,131 | 2,006 | 18,137 |
+------------------------------+-------+----------+-------------+---------+
| Purchased goodwill of | | 100 | - | 100 |
| sub-subsidiary | | | | |
+------------------------------+-------+----------+-------------+---------+
| Acquisitions through | | 11,491 | - | 11,491 |
| business combinations | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance at 31 December 2009 | | 27,722 | 2,006 | 29,728 |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
| Amortisation and impairment | | | | |
| losses | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance as at 1 July 2008 | | - | - | - |
+------------------------------+-------+----------+-------------+---------+
| Amortisation and impairment | | - | - | - |
| loss | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance at 30 December 2008 | | - | - | - |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
| Balance as at 1 July 2009 | | - | - | - |
+------------------------------+-------+----------+-------------+---------+
| Amortisation | | - | (56) | (56) |
+------------------------------+-------+----------+-------------+---------+
| Impairment loss | | (721) | (430) | (1,151) |
+------------------------------+-------+----------+-------------+---------+
| Balance at 31 December 2009 | | (721) | (486) | (1,207) |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
| Carrying amounts | | | | |
+------------------------------+-------+----------+-------------+---------+
| 1 July 2008 | | - | - | - |
+------------------------------+-------+----------+-------------+---------+
| 31 December 2008 | | 15,931 | - | 15,931 |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
| 1 July 2009 | | 16,131 | 2,006 | 18,137 |
+------------------------------+-------+----------+-------------+---------+
| 31 December 2009 | | 27,001 | 1,520 | 28,521 |
+------------------------------+-------+----------+-------------+---------+
| | | | | |
+------------------------------+-------+----------+-------------+---------+
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.
14 Acquisition of subsidiaries
For the year ended 30 June 2009, the Group acquired the following subsidiaries:
In July 2008, the Group obtained control of Multitrade Rabun Gap LLC, a company
that operates a 20MW nameplate wood-fuelled biomass facility in Rabun Gap,
Georgia. The Group contributed US$4.1m capital to acquire 75 percent ownership
interest in the company.
On 4 August 2008, the Group committed US$20.9 million in equity and a
construction loan to Energentum S.A. de C.V, a company that is constructing a
9.3 MW capacity run-of river hydroelectric facility on the Las Minas River near
Veracruz, Mexico. The Group made the acquisition through a 75 percent ownership
in Energia Escalona Coopertief U.A, the intermediate parent company of
Energentum S.A. de C.V, registered in Netherlands.
On 19 November 2008, the Group invested US$28.4m to acquire 100 percent of
Johnstown Regional Energy LLC, a company that owns and operates three landfill
gas-to-methane projects that were placed in operation in 2006 and 2007 at Waste
Management landfills located in Pennsylvania.
14 Acquisition of subsidiaries (continued)
On 6 February 2009, the Group obtained control of Multitrade Teogia LLC, a
company that operates an existing 14 MW capacity wood-fuelled biomass facility
in Telogia, Florida by acquiring 61.25 percent ownership in the company. The
Group views Telogia as an opportunity to build upon its existing biomass
platform, while teaming up with the same operational partners from the Group's
Multitrade Rabun Gap investment.
The following summarises the major classes of consideration transferred and the
recognised amounts of assets acquired and liabilities assumed at the acquisition
dates:
+----------------------------+------------+------------+-----------+------------+----------+
| | Multitrade | Energentum | Johnstone | Multitrade | 30 June |
| | Rabun Gap | S.A. DE | Regional | Telogia | 2009 |
| | LLC | c.v | Energy | LLC | Total |
| | | | LLC | | |
+----------------------------+------------+------------+-----------+------------+----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------------------+------------+------------+-----------+------------+----------+
| Consideration transferred | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Purchase consideration | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Cash | - | - | 1,794 | - | 1,794 |
+----------------------------+------------+------------+-----------+------------+----------+
| Loan | - | - | 11,715 | - | 11,715 |
+----------------------------+------------+------------+-----------+------------+----------+
| Equity investment | 4,093 | 1,300 | 14,891 | 2,650 | 22,934 |
+----------------------------+------------+------------+-----------+------------+----------+
| Total | 4,093 | 1,300 | 28,400 | 2,650 | 36,443 |
+----------------------------+------------+------------+-----------+------------+----------+
| | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Identifiable assets | | | | | |
| acquired and liabilities | | | | | |
| assumed (100%) | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Property, plant and | 4,020 | 11 | 21,463 | 6,160 | 31,654 |
| equipment | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Cash and cash equivalents | 4,842 | - | 15,882 | 571 | 21,295 |
+----------------------------+------------+------------+-----------+------------+----------+
| Trade and other | 387 | 1,546 | 1,191 | 630 | 3,754 |
| receivables | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Trade and other payables | (5,706) | (333) | (497) | (3,227) | (9,763) |
+----------------------------+------------+------------+-----------+------------+----------+
| Deferred infrastructure | - | - | (2,051) | - | (2,051) |
| grants | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Deferred revenue | - | - | (1,386) | - | (1,386) |
+----------------------------+------------+------------+-----------+------------+----------+
| Loans and borrowings | - | - | (20,315) | (134) | (20,449) |
+----------------------------+------------+------------+-----------+------------+----------+
| Total net identifiable | 3,543 | 1,224 | 14,287 | 4,000 | 23,054 |
| assets | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Fair value of interest in | 2,658 | 917 | 14,287 | 2,450 | 20,312 |
| net asset acquired | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Goodwill | | | | | |
| Goodwill was recognised as | | | | | |
| a result of the | | | | | |
| acquisition as follows: | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Fair value of | 4,093 | 1,300 | 28,400 | 2,650 | 36,443 |
| consideration transferred | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Fair value of interest in | (2,658) | (917) | (14,287) | (2,450) | (20,312) |
| net assets acquired | | | | | |
+----------------------------+------------+------------+-----------+------------+----------+
| Goodwill on acquisition | 1,435 | 383 | 14,113 | 200 | 16,131 |
+----------------------------+------------+------------+-----------+------------+----------+
On 31 October 2009 the Group obtained control of Maxwest Environmental Systems
Inc, a company that operates a biosolids gasification facility in Sanford,
Florida by acquiring 50.5 percent voting interests in the company. The effective
Group's equity interest in the company is 42 percent.
14 Acquisition of subsidiaries (continued)
+-----------------------------------------------------+------+---------+
| Consideration transferred | | US$'000 |
+-----------------------------------------------------+------+---------+
| Purchase consideration | | |
+-----------------------------------------------------+------+---------+
| Investment in Series A preferred shares | | 10,000 |
+-----------------------------------------------------+------+---------+
| Investment in Series B preferred shares | | 3,750 |
+-----------------------------------------------------+------+---------+
| Total | | 13,750 |
+-----------------------------------------------------+------+---------+
| | | |
+-----------------------------------------------------+------+---------+
| Identifiable assets acquired and liabilities | | |
| assumed | | |
+-----------------------------------------------------+------+---------+
| | Note | US$'000 |
+-----------------------------------------------------+------+---------+
| | | |
+-----------------------------------------------------+------+---------+
| Property, plant and equipment | 12 | 3,855 |
+-----------------------------------------------------+------+---------+
| Intangible assets | 13 | 100 |
+-----------------------------------------------------+------+---------+
| Inventory | | 20 |
+-----------------------------------------------------+------+---------+
| Cash and cash equivalents | | 3,611 |
+-----------------------------------------------------+------+---------+
| Trade and other receivables | | 322 |
+-----------------------------------------------------+------+---------+
| Trade and other payables | | (2,530) |
+-----------------------------------------------------+------+---------+
| Total net identifiable assets | | 5,378 |
+-----------------------------------------------------+------+---------+
| Fair value of interest in net assets acquired | | 2,259 |
+-----------------------------------------------------+------+---------+
| | | |
+-----------------------------------------------------+------+---------+
| Goodwill | | |
| Goodwill was recognised as a result of the | | |
| acquisition as follows: | | |
+-----------------------------------------------------+------+---------+
| Fair value of consideration transferred | | 13,750 |
+-----------------------------------------------------+------+---------+
| Fair value of interest in net assets acquired | | (2,259) |
+-----------------------------------------------------+------+---------+
| Goodwill on acquisition | 13 | 11,491 |
+-----------------------------------------------------+------+---------+
| | | |
+-----------------------------------------------------+------+---------+
| Transactions separate from the acquisition | | |
+-----------------------------------------------------+------+---------+
The Group incurred acquisition-related costs of US$79,638 relating to external
legal fees. The legal fees costs have been included in administrative expenses
in the Group's consolidated statement of comprehensive income.
15 Share capital
+-------------------------------+--------------+-----------+------------+
| Ordinary shares of | Number of | Share | Share |
| GBGBP0.0001 each | shares | capital | premium |
| | | US$'000 | US$'000 |
+-------------------------------+--------------+-----------+------------+
| | | | |
+-------------------------------+--------------+-----------+------------+
| In issue at 1 July 2008 | 200,000,000 | 40 | 386,067 |
+-------------------------------+--------------+-----------+------------+
| Repurchased during the year | (16,366,227) | (3) | (26,464) |
+-------------------------------+--------------+-----------+------------+
| As at 30 June 2009 | 183,633,773 | 37 | 359,603 |
+-------------------------------+--------------+-----------+------------+
| Repurchased during the period | - | - | - |
+-------------------------------+--------------+-----------+------------+
| As at 31 December 2009 | 183,633,773 | 37 | 359,603 |
+-------------------------------+--------------+-----------+------------+
| | | | |
+-------------------------------+--------------+-----------+------------+
| In issue at 1 July 2008 | 200,000,000 | 40 | 386,067 |
+-------------------------------+--------------+-----------+------------+
| Repurchased during the year | (13,026,227) | (2) | (21,859) |
+-------------------------------+--------------+-----------+------------+
| As at 31 December 2008 | 186,973,773 | 38 | 364,208 |
+-------------------------------+--------------+-----------+------------+
16 Loans and borrowings
+-------------------------------+-----------+--------------+------------+
| | | (Restated) | (Restated) |
| | 31 | 31 December | 30 June |
| | December | 2008 | 2009 |
| | 2009 | US$'000 | US$'000 |
| | US$'000 | | |
+-------------------------------+-----------+--------------+------------+
| | | | |
+-------------------------------+-----------+--------------+------------+
| Current loans | 2,774 | 474 | 1,577 |
+-------------------------------+-----------+--------------+------------+
| Non-current loans | 7,899 | 8,241 | 7,689 |
+-------------------------------+-----------+--------------+------------+
| Total | 10,673 | 8,715 | 9,266 |
+-------------------------------+-----------+--------------+------------+
Long term debt comprises 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.
17 Deferred infrastructure grants
Government grants relating to construction of the Somerset Methane plant owned
by Johnston Regional Energy LLC ("JRE"), a Group subsidiary, are deferred and
recognised over the useful lives of the identifiable assets the grant funds were
used to construct. The amortisation of the grants is classified as a reduction
to depreciation and amortisation expenses in the consolidated statement of
comprehensive income.
18 Deferred revenue
On 20 December 2006, a subsidiary company, JRE, entered into a Gas Purchase and
Sale Agreement wherein $1,650,000 was advanced to JRE and will be satisfied by a
discounted selling price over seven years with no greater than 75% of the gas
production from the Somerset Methane Recovery Project being dedicated to the
counter party. The discounted price is subject to various floor and ceiling gas
prices as defined in the agreement. The Group has not recognised any revenue for
the six months ended 31 December 2009 (period ended 31 December 2008: US$nil).
19 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 Asset Advisor and the Company administrator 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 note 7.
The Directors are considered related parties as they have authority and
responsibility for planning, directing and controlling the activities of the
Company.
Details of the Directors' annual remuneration are as follows:
+---------------------------------------------------------+--------------+
| | Basic |
| | annual |
| | remuneration |
+---------------------------------------------------------+--------------+
| | US$ |
+---------------------------------------------------------+--------------+
| Peter Tom (Chairman) | 140,000 |
+---------------------------------------------------------+--------------+
| Bran Keogh | 100,000 |
+---------------------------------------------------------+--------------+
| J. Curtis Moffatt | 105,000 |
+---------------------------------------------------------+--------------+
| Peter O'Keefe | 105,000 |
+---------------------------------------------------------+--------------+
| Nora Mead Brownell | 105,000 |
+---------------------------------------------------------+--------------+
On 12 November 2009, Nora Mead Brownell resigned as a Director of the Company.
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 2009 amounted to US$328,632 (period ended
31 December 2008: US$148,389) of which US$130,000 was outstanding at 31 December
2009 (June 2009: US$135,000).
19 Related Party Transactions ( continued)
Due to the disestablishment of Energy and Climate Advisors ("E&CA"), formely the
investment advisor for the Group, the Directors were paid a total of US$178,394
to monitor the disestablishment process. E&CA contributed US$23,000 towards the
additional Directors' fees.
Mr J. Curtis Moffatt, the Chairman of the Audit Committee and one of the Board
members, is a partner at Van Ness Feldman. The Group engaged Van Ness Feldman
for providing services in US energy and environmental laws consultations. Total
fees for the six months to 31 December 2009 amounted to US$4,150 (period ended
31 December 2008: US$8,842) and the amount accrued but not paid at the period
end was US$ nil (2008: US$nil).
At the time Van Ness Feldman was engaged to assist in the due diligence matter
on behalf of Leaf, Mr. Moffatt recused himself from any consideration of the
proposed investment by Leaf since such consideration would rely, in part, upon
the advice and counsel of Van Ness Feldman.
Leaf Finance Company, a group subsidiary, entered into a construction loan
agreement of US$17.5 million with Multitrade Rabun Gap, a fellow subsidiary, at
acquisition to fund the construction of the biomass facility in Rabun Gap,
Georgia. The interest is compounded quarterly at the rate of 10 percent per
annum. The maturity date is the earlier of the date six months following the
commercial operations or 30 June 2010.
On 3 September 2009 and 9 November 2009, Leaf Finance Company entered into two
convertible note agreements of US$4 million and US$5.8 million with Multitrade
Rabun Gap to fund its existing construction. The terms of both loan agreements
is 5 years from the date of the convertible note and the interest is accrued at
the rate of 8 percent per annum.
On 6 February 2009, the Company also entered into a construction loan agreement
with Telogia Power LLC, to fund a total of US$9,500,000 for its refurbishment
and operations. The maturity date is the earlier of the date one year following
the commercial operation date or 30 June 2010. Interest is compounded quarterly
at a rate of 15 percent per annum.
20 Capital Commitments
As at 31 December 2009 the following capital commitments were outstanding in
relation to investments.
+-------------+------------+----------+------------+
| Investment | Initial | Drawn | Remaining |
| | commitment | down | commitment |
+-------------+------------+----------+------------+
| | US$\'000 | US$'000 | US$'000 |
+-------------+------------+----------+------------+
| | | | |
+-------------+------------+----------+------------+
| Vital | 50,000 | (6,226) | 43,774 |
| Renewable | | | |
| Energy, | | | |
| LLC | | | |
+-------------+------------+----------+------------+
| Multitrade | 31,393 | (27,167) | 4,226 |
| Rabun GAP, | | | |
| LLC | | | |
+-------------+------------+----------+------------+
| MaxWest | 25,000 | (13,750) | 16,250 |
| Environment | | | |
| Systems, | | | |
| Inc | | | |
+-------------+------------+----------+------------+
| Energia | 20,900 | (7,085) | 13,815 |
| Escalona | | | |
| SV | | | |
+-------------+------------+----------+------------+
| SkyFuels, | 10,000 | - | 10,000 |
| Inc | | | |
+-------------+------------+----------+------------+
| Invenergy | 10,000 | - | 10,000 |
| Wind, LLC | | | |
+-------------+------------+----------+------------+
| | 147,293 | (54,228) | 98,065 |
+-------------+------------+----------+------------+
21 Post balance sheet events
On 19 January 2010, the Company extended the second tranche of preferred shares
investment of US$6,250,000 to MaxWest Environmental Systems, Inc.
On 15 February 2010, the Company extended the first tranche of the bridge
facility of US$3,500,000 to SkyFuel, Inc.
In January 2010, 1,460,000 shares were repurchased by the Company leaving
182,173,773 shares in issue at January 2010. The Shares were purchased in 7
tranches at prices of between 67.5 pence to 70 pence per share for a total of
GBP997,523 (US$ 1,623,621).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGUAGWUPUGRB
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