TIDMRUR
RNS Number : 6260Q
Rurelec PLC
19 June 2015
Rurelec PLC
("Rurelec" or "the Company")
Audited results for the year ended 31st December 2014
Rurelec PLC (AIM: RUR), the electricity utility focused on
ownership and operation of power generation plants in Latin
America, announces its audited results for the year ended 31
December 2014. The annual report will be posted to shareholders on
19 June 2015.
Highlights
-- Continued improvement in operations in Argentina
-- Gross energy output 14 per cent. higher at Energia del Sur ("EdS") 958 GWh (2013: 840GWh)
-- EdS return to profitability in US$ terms, pre-tax $1.9 million (2013: loss US$ 7.3 million)
-- Change of accounting rules affects joint venture reporting for 2014, 2013 restated
-- Strategic refocussing on thermal plants, disposal of Peruvian small river hydros
-- Successful capital restructuring paves way for return to dividends
-- Chilean projects progressing towards financial close
-- Loss before tax GBP2.9 million (2013 restated: GBP36.4 million)
-- Loss per share 0.52p (2013 restated: loss 7.23p)
-- Net asset Value per share 10.1p (2013 restated 11.0p)
-- Group borrowings fall to GBP3.2 million (2013 restated: GBP20.9 million)
-- Loan facility in place to fund expansion
Commenting on the results Peter Earl, Rurelec's Chief Executive,
said:
"Our performance during 2014 was hugely influenced by the result
of the Bolivian arbitration award from which the Company is still
suffering. The Argentinian joint venture continues to perform well
contributing a positive cashflow to the Group and we successfully
completed our first run-of-river hydro plant in Peru. However due
to the lack of available capital we have had to sell our Peruvian
assets and concentrate on our core business of clean tech gas
projects in Argentina and expansion in Chile."
For further information please contact:
Rurelec PLC W.H.Ireland CNC Communications
-------------------- ------------------ -------------------
Peter Earl, CEO Paul Shackleton Ana Ribeiro
www.rurelec.com & James Bavister
-------------------- ------------------ -------------------
Tel: +44 (0)20 7793 Tel: +44(0) Tel: +44 (0)20
5610 20 7220 1666 3219 8818
-------------------- ------------------ -------------------
Non-Executive Chairman's Statement
Dear Shareholder
It falls to me to present the results of Rurelec PLC ("Rurelec")
for the financial year ended 31 December 2014, which proved to be a
difficult year for the Company following the announcement in
February of the disappointing result of the Permanent Court of
Arbitration ("PCA") ruling in The Hague which found against Bolivia
but which awarded Rurelec less than half the book value of its
historical 2006 investment in Empresa Guaracachi. This in turn was
followed by the further discounted settlement for $31.5 million
grudgingly paid by Bolivia in June 2014, which resulted in an
additional loss against the sum awarded by the PCA. It should be
noted that the Board of Rurelec had expected to receive not less
than US $75 million being the book value of the Bolivian investment
and declared but unpaid dividends. The proceeds of the settlement
were used to repay a loan which had been taken to fund both the
cost of the arbitration and the Group's expansion into Peru and
Chile.
During the year Larry Coben stepped down from the Board of the
Company due to other commitments and we thank him for his incisive
input during his three years on the Board. In April 2015 the board
welcomed Pablo Galante as a new director who brings to the Board
extensive experience in the energy sector both in Latin America and
internationally, with particular insight into the business of fuel
supply.
Outlook
In spite of the serious setback from the quantum of the PCA
award and the considerable write-off against reserves which this
entailed, the Board of Rurelec remains optimistic for the future of
the Company. There are continuing projects in Peru and Chile as
well as the potential to expand our presence in Argentina where the
country's need for power encourages new plant development under US
dollar denominated contracts.
The result of the Arbitration means that the Company has
considerably less funding available to direct towards new projects,
and this has slowed our expansion. In the light of our straightened
circumstance, the Board has decided to concentrate Group funds in
areas of faster growth, involving thermal plants which have the
advantage of shorter lead times in construction. It is therefore
intended to divest the small hydro development business in Peru
which trades under the Cascade Hydro Power brand. Funds realised
from the disposal of this business will be used to repay loans in
connection with development activities and to bring into
construction Rurelec's thermal developments in Chile and Peru.
Activities in Chile were slowed by the change in government
which led to all projects being called in for review. This had an
impact on the Company's power project developments in northern
Chile including those with already permitted sites. The process to
select a long term equity partner for projects in Chile has been
caught up in these delays and by the complex transmission system in
the region. These issues have now been largely overcome and the
Company expects to make more rapid progress for the future.
The Company has recently signed a bridging loan facility of $12
million against the anticipated sales of the Peru hydro projects.
The Company has also agreed terms but has not yet been
contracted,for an alternative one year secured loan from a large
organisation within the South American power industry which will
allow the Group to settle the deferred payment to IPSA Group PLC
and repay outstanding loans. This facility is the first stage of an
intended larger cooperation with this South American company, a
power generation company operating in the same field as Rurelec in
Central and Latin America. The Group expects to repay all loans
from the proceeds of the sale of its Peruvian hydro portfolio, but
with contingency plans for repayment from other sources if the
sales are delayed.
In anticipation of a planned closer co-operation with the South
American group, the Board has agreed that the project development
activities under Independent Power Corporation PLC ("IPC") should
be spun out of Rurelec now that its task in Latin America has been
completed. IPC was acquired for GBP4 million in June 2013 to
consolidate the replacement of capacity through greenfield
development of projects led by IPC during the arbitration process.
The business separation will be achieved by Peter Earl acquiring
outright ownership of IPC in a transaction whereby the principal
assets of IPC will be transferred up to Rurelec leaving IPC with
only nominal assets and fixed overheads of some GBP500,000 per
annum. Peter Earl will step down as both a director and CEO of
Rurelec and will purchase IPC and its development team for nominal
consideration. Former Chairman, Andrew Morris, has agreed to take
over as CEO of the Company. Both Peter Earl and IPC are entering
into consultancy agreements with the Company so as to maintain
continuity and a smooth handover for the next stage of Rurelec's
planned return to a dividend paying company. The net effect will be
to reduce overhead within Rurelec and re-establish the core
business of the Group as ownership of cash-producing power plants
in Latin America to be valued on the basis of income.
I look forward to the future with optimism.
Colin Emson
Chairman
18 June, 2015
Review of Financial Performance
Group Results
The Group loss after tax for the financial year under review is
GBP2.9 million (2013 restated: GBP35.8 million loss). The majority
of the loss is due to operational costs and the net effect of
foreign exchange gains and losses on our assets. The results for
the operations in Argentina, Peru, Chile and for IPC are shown
below.
Group revenue was GBP0.3 million (2013 restated: GBP5.4
million). Administrative expenses amounted to GBP7.1 million (2013
restated GBP3.7 million). Operating loss was GBP6.9 million (2013
restated GBP0.1m gain. The loss before tax is GBP3 million (2013
restated: GBP35.7 million loss). The basic loss per share is 0.52p
(2013: 7.23p loss). In the balance sheet the restatement of the
2013 financial statements under IFRS11 has resulted in a decrease
in total assets to GBP91.0 million compared with the audited
figures of GBP94.2 million. In 2014, the total assets of GBP74.8
million (2013 restated: GBP91.0 million) includes assets of GBP18.2
million (2013: GBP0), which are held for sale. In December 2014
Rurelec PLC reorganised its reserves by moving GBP45.0 million from
the share premium account to a special reserve that can be
designated as distributable once all creditors at the year end have
been paid. Total equity stands at GBP56.5 million, or 10.1pence per
share.
A more detailed analysis of the business entities is given
below.
Energia del Sur S.A. Results
At the operating level the plant in Comodoro Rivadavia and
therefore based on 100% of Energia del Sur S.A.'s ("EdS's")
activities the gross operating profit for the year was GBP14.99
million (2013: GBP10.9 million) on revenues of GBP17.2 million
(2013: GBP19.3 million). In local currency terms the revenues
increased to AR$220 million (2013: AR$ 167 million) whilst the
gross operating profit was AR$ 191 million (2013: AR$ 113 million).
The reduction in the net loss for the year in EdS to GBP0.2 million
(2013: GBP4.2 million loss) was due to change in the revenue
structure with significantly more contracted energy revenue where
we have no fuel costs compared to 2013 where there was
significantly more spot energy sales with corresponding increase in
fuel costs, which led to the increase in the operating profits for
the year in 2014.
It should be noted that the results of EdS are no longer shown
proportionately within the accounts in this annual report. This is
because of a change in the reporting rules under the international
accounting convention of the International Financial Reporting
Standards ("IFRS") which requires us to report the EdS joint
venture as a single line in the Consolidated Statement of Financial
Position and in the Consolidated Income Statement. Further
information on this can be seen in the note 28 to the accounts and
in the Review of Operations.
Independent Power Corporation PLC
IPC has made a loss for the year of GBP4.2 million (2013: GBP2.1
million profit) which was partly attributable to the Group's
administration costs being charged to IPC in 2014 after the group
overheads were reorganised. Previously Rurelec's administration
costs were charged in to Rurelec PLC itself. The activities of the
company involve development work for new projects, the supply of
engineering services to group and other companies and also the
administration of the London office. Administration expenses for
the year were GBP1.2 million (2013: GBP1.1 million). The additional
cost this year relates to the writing back of accrued income for
the success fee from the financial close of the Illapa project in
Chile. The measurement of this accrued income was based on
management estimates of the amount of work that had been completed
and the proximity to achieving finance of the project. Selecting
the equity partner has been affected by the change in Government
and the slowdown of power projects in the country. This along with
the need to be certain about accrued income has led to a one-off
write back which has increased the accounting loss for the period
by GBP3.1 million.
Rurelec Chile
The development operations in Chile have expensed limited direct
costs in the year of GBP82k (2013: GBP111k). Capitalised
development costs have accumulated to GBP0.9 million (2013: GBP1.0
million) on both the Central Illapa and Arica projects.
Cascade Hydro Power
In Peru, the Canchayllo run-of-river hydro plant was completed
in the final days of 2014 and the value of the plant at the
year-end is GBP8.8 million (2013 GBP5.7 million).
Rurelec has outstanding loans of GBP9.5 million (2013: GBP5.8
million) to the Cascade group at the period end, whilst there is a
bank loan relating to the Canchayllo operating plant with the
Corporacion Interamericana de Inversion ("IIC") of GBP4.6 million
(2013: GBP4.2 million) and other loans of GBP2.8 million (2013:
GBP0.9 million). The other assets of the Cascade group include
GBP3.2 million (2013: GBP3.5 million) of bonds held by IIC and the
Ministry of Minerals and Energy in connection with development
projects.
During 2014 the Board took the decision to sell the Peruvian
assets and has therefore reported these assets in accordance with
IFRS standards as assets held for sale. The equity sale of the
Canchayllo plant has been agreed for a total of GBP4.4 million with
the IIC debt of GBP4.6 million remaining with the plant.
Review of Operations
The first half of the year was devoted to the recovery of the
sum - disappointingly low - awarded by the Arbitration Tribunal,
reduced even further by the Bolivian Government's threats not to
pay unless Rurelec accepted a further cash discount. All the same,
the Group was able to emerge from the four year nationalisation
nightmare with a number of projects under development in Peru and
Chile. In the second half of the year your executives were able to
concentrate on developing the business, even in the straitened
circumstances arising from the pitiful award. The main source of
cashflow for the Group during this period has arisen from its joint
venture operations in Argentina.
Argentina
Operations at the power plant continue to allow EdS to show an
excellent availability record. Gross energy output was 14per cent.
higher at approximately 958 GWh (2013: 840 GWh), since no
maintenance outage was experienced. The average heat rate of the
plant was 8.33 MMBTU/MWh (2013: 8.43), a slight drop due to normal
degradation following the outage in 2013. The Ministry of Energy
has enacted further changes in the electricity sector, largely
driven by the weak performance of the distribution sector, the
increase in demand and the widening gap between the official and
unofficial exchange rates.
The major impact of the changes for EdS has been the deduction
of a maintenance reserve payment each month, which we have
negotiated to recover starting May 2015, thus increasing cashflow
in the coming year. The average notional cost of gas per MWh
generated was AR$176.67 (2013: AR$118.36), in US$ terms the gas
cost has moved to US$21.46 per MWh from US$21.5 in 2013. The
average price of electricity in peso terms increased by 43 per
cent. to AR$378.73 (2013: AR$265.17) however it has decreased by
4.5 per cent. in dollar terms, US$46.00 (2013: US$48.17) as a
result of the weakening of the peso. The Resolution 220 contract is
the main driver of the strengthening performance at the EBITDA
level, as the proportion of US$ based revenue is boosted by the
exchange rate as well as the removal of gas (a US$ expense) from
the revenue line and the increased proportion of peso based
expense. Turnover at EdS during 2014 was AR$220 million from AR$
AR$166.5 in 2013. No CERs were registered in 2014 as the low CER
prices currently do not cover the cost of registration. Gross
margin increased in peso terms to AR$191 million from AR$115
million. Large foreign exchange losses due to the impact of the
revaluation of US$ borrowings arising from the weakening peso
exchange rate once again increased the after tax loss. Even with
the foreign exchange loss of AR$52.5 million (2013: AR$46 million)
the loss for the year was AR$2.4 million (2013: loss of AR$36
million). This improvement was significantly due to the change in
the structure of the energy sales now more reliant on the
Resolution 220 Contract rather than spot sales, which incur fuel
costs. Cashflow was strong, allowing EdS to remit US$5.4 million to
the UK during the year, however, the electricity sector is still
held back by cashflow restrictions imposed as a result of the low
tariffs of the two largest electricity distribution companies.
CAMMESA has struggled to maintain timely payment of invoices to
generators since the middle of the year.
Exchange rates in Q1 2014 saw the biggest correction as the
Government finally allowed the official peso exchange rate to move
towards the unofficial exchange rate. At the start of the year it
was AR$6.2 to the US$, by year end it was AR$8.23 with most of the
fall during January 2014 after a 17per cent devaluation in that
month alone. The deterioration in the exchange rate was having an
impact on our receivables, until a new directive was brought in to
compensate generators for the impact for the late payment of their
invoices.
The following table sets out the Group's share of its interest
in the joint venture in Argentina following the changes in the
accounting for joint ventures to the equity accounting method:
Year ended Year ended
=========================
31.12.14 31.12.13
=========================
GBP'000 GBP'000
========================= =========== ===========
Revenue attributable
to the Group 8,611 9,652
------------------------- ----------- -----------
Expenses (5,579) (8,465)
------------------------- ----------- -----------
Non-current assets 9,736 11,906
------------------------- ----------- -----------
Current assets 4,408 3,103
------------------------- ----------- -----------
Non-current liabilities (14,865) (16,682)
------------------------- ----------- -----------
Current liabilities (8,518) (2,800)
------------------------- ----------- -----------
Chile
Arica
Final approval for the use of the gas turbine was received in
May 2014. However, as a result of further objections made locally
during the latter half of 2014, we have decided to relinquish the
approval for the GT and revert to the original diesel engine-based
technology of the initial approval. Limited construction worked has
commenced and the environmental approval has been secured. On this
revised basis, dispatch levels for the plant, when constructed, are
expected to be higher than originally envisaged when using high
efficiency engines. With little new generation other than solar
plants planned for the northern part of the SING system, we expect
the project to be an important contributor to securing electricity
supply in the local area.
Central Illapa
Development of the Illapa project has progressed slower than
anticipated, principally due to the definition of the transmission
interconnection taking longer than expected. This issue has now
been resolved and selection of a joint venture partner and
financing for the project is underway and will be pursued with
financial completion expected during 2015.
Peru
During 2014 the construction of the 5.3 MW Canchayllo project
continued and the plant was successfully commissioned on 31
December 2014 after much hard work on the part of our Cascade Hydro
staff in Peru and Harbin, the original equipment manufacturer. The
cost of the plant was approximately 20 per cent more than
originally budgeted but with a higher installed capacity than
originally projected. The Canchayllo plant was financed with equity
from Rurelec and debt from the IIC. In addition, the Cascade team
was successful in winning PPAs for a further 30 MW of new projects,
although we elected to fund only one project to close a power
purchase agreement in the 2014 PPA round. The two other projects
have had to be held back for the next round which planned for later
this year.
With significant funding required for bonding and construction
of hydro plants in the tender process, we expect to reduce exposure
to this sector by selling Canchayllo and our development company
Cascade Hydro Power SAC. This still leaves us with the opportunity
to develop large hydro in the form of Rurelec's 255 MW Santa Rita
project and thermal generation in Peru. The Proinversion tender for
awarding large hydro PPAs was announced in February 2015 and
Rurelec is active now in preparing a qualifying bid in partnership
with a strong financial partner currently being selected.
Independent Power Corporation
During 2014 IPC directed much of its activities to projects
under development by clients in Ghana having received the
disappointing news that it was unsuccessful in the Gibraltar tender
for which it had qualified. IPC is also in advanced negotiations
for a similar third party project in Ivory Coast.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group, apart
from the construction risks involved in building the hydro plant in
Peru and possible changes in demand and pricing for electricity in
the markets in South America in which the Group operates, relate to
political risk and uncertainties in the financial markets.
a) Political risk - As evidenced by the decision in May 2010 by
the Government of Bolivia to nationalise the Group's interest in
Guaracachi, there exists significant political risk in areas in
which the Group operates. The Group has sort to mitigate this risk
by diversifying the countries in which it operates.
b) Financial markets - Whilst project finance may be available
in the markets in which the Group operates, the Group's expansion
plans remain dependent on raising project finance from a
combination of local partners and lending institutions. The Group
is seeking to broaden its base of potential partners and lending
institutions.
c) Exposure to foreign currency - The Group's activities are in
South America and therefore the Group's results will be affected by
exchange rate movements and local inflation rates. Furthermore,
past experience has shown that exchange controls restrictions can
sometimes be applied and these may have an impact on the Group's
ability to repatriate funds to the parent company. The Group seeks
to limit these risks by raising funds in the currency of the
operating units.
d) Efficient operation - The Group has an effective maintenance
programme and has entered into long term service agreements to
reduce these risks as appropriate.
The Strategic Report was approved by the Board of Directors on
18th June, 2015 and were signed on its behalf by PRS Earl (Chief
Executive).
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2014
Year Year
Notes ended ended
31.12.14 31.12.13
Restated
GBP'000 GBP'000
================================ ========= ========= =========
Revenue 4 303 5,442
-------------------------------- --------- --------- ---------
Write off of accrued
income 15 (3,219) -
-------------------------------- --------- --------- ---------
Cost of sales 6 (231) (1,619)
-------------------------------- --------- --------- ---------
Gross profit (3,147) 3,823
-------------------------------- --------- --------- ---------
Administrative expenses 7 (3,832) (3,741)
-------------------------------- --------- --------- ---------
Operating (loss)/profit (6,979) 82
-------------------------------- --------- --------- ---------
Other expense 9,b,c,15 (392) (38,314)
-------------------------------- --------- --------- ---------
Other income/(expense)
- exchange gain/(loss) 9a 2,180 (561)
-------------------------------- --------- --------- ---------
Other expense - From
share of joint venture 28 - (319)
-------------------------------- --------- --------- ---------
Finance income 10 2,567 2,767
-------------------------------- --------- --------- ---------
Finance expense 10 (312) (20)
-------------------------------- --------- --------- ---------
Loss before tax (2,936) (36,365)
-------------------------------- --------- --------- ---------
Tax expense 11 (8) (29)
-------------------------------- --------- --------- ---------
Loss for the year attributable
to owner of the company (2,944) (36,394)
-------------------------------- --------- --------- ---------
Earnings per share 12
-------------------------------- --------- --------- ---------
Basic loss per share (0.52p) (7.23p)
-------------------------------- --------- --------- ---------
Diluted loss per share (0.52p) (7.23p)
-------------------------------- --------- --------- ---------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2014
Year Year
ended ended
------------------------------------ -------
Notes 31.12.14 31.12.13
------------------------------------ ------- --------- ----------
Restated
------------------------------------ ------- --------- ----------
GBP'000 GBP'000
------------------------------------ ------- --------- ----------
Loss for the year (2,944) (36,394)
--------------------------------------------- --------- ----------
Other comprehensive income/(loss)
for the year
------------------------------------ ------- --------- ----------
Items that will be subsequently
Reclassified to Profit or
Loss:
------------------------------------ ------- --------- ----------
Exchange differences on
translation of foreign operations (2,249) (364)
--------------------------------------------- --------- ----------
Total other comprehensive
loss (2,249) (364)
--------------------------------------------- --------- ----------
Total comprehensive loss
for year attributable to
owners of the company (5,193) (36,758)
--------------------------------------------- --------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION company number:
4812855
for the year ended 31 December 2014
Notes 31.12.14 31.12.13 1.1.13
Restated Restated
GBP'000 GBP'000 GBP'000
============================== ====== ========= ========= =========
Assets
------------------------------ ------ --------- --------- ---------
Non-current assets
------------------------------ ------ --------- --------- ---------
Property, plant and
equipment 14 22,169 27,788 3,082
------------------------------ ------ --------- --------- ---------
Intangible assets 15 1,321 1,792 -
------------------------------ ------ --------- --------- ---------
Investment in Argentinian
Joint Venture - - 319
------------------------------ ------ --------- --------- ---------
Trade and other receivables 16a 23,212 23,649 32,833
------------------------------ ------ --------- --------- ---------
Deferred tax assets 17 - - -
------------------------------ ------ --------- --------- ---------
46,702 53,229 36,234
------------------------------ ------ --------- --------- ---------
Current assets
------------------------------ ------ --------- --------- ---------
Inventories 18 - - 188
------------------------------ ------ --------- --------- ---------
Trade and other receivables 16b 9,600 14,591 1,189
------------------------------ ------ --------- --------- ---------
Compensation claim,
Interest & Dividends
Receivable on Award 19 - 19,126 51,473
------------------------------ ------ --------- --------- ---------
Cash and cash equivalents 20 283 3,730 6,042
------------------------------ ------ --------- --------- ---------
9,883 37,447 58,892
------------------------------ ------ --------- --------- ---------
Assets classified
as held for sale 34 18,178 - -
------------------------------ ------ --------- --------- ---------
Total assets 74,763 90,676 95,126
------------------------------ ------ --------- --------- ---------
Equity and liabilities
------------------------------ ------ --------- --------- ---------
Shareholders' equity
------------------------------ ------ --------- --------- ---------
Share capital 21 11,228 11,145 8,413
------------------------------ ------ --------- --------- ---------
Share premium account 22,754 67,369 53,012
------------------------------ ------ --------- --------- ---------
Foreign currency reserve (3,211) (962) (598)
------------------------------ ------ --------- --------- ---------
Share option reserve 22 146 107 46
------------------------------ ------ --------- --------- ---------
Plant reserve 1,050 1,050 1,050
------------------------------ ------ --------- --------- ---------
Other Reserve 23 45,000 - -
------------------------------ ------ --------- --------- ---------
Retained earnings (20,426) (17,199) 19,195
------------------------------ ------ --------- --------- ---------
Total equity attributable
to shareholders of
Rurelec PLC 56,541 61,510 81,118
------------------------------ ------ --------- --------- ---------
Non-controlling interests 283 142 224
------------------------------ ------ --------- --------- ---------
Total equity 56,824 61,652 81,342
------------------------------ ------ --------- --------- ---------
Non-current liabilities
------------------------------ ------ --------- --------- ---------
Tax liabilities 25 - 18 -
------------------------------ ------ --------- --------- ---------
Deferred tax liabilities 17 - - -
------------------------------ ------ --------- --------- ---------
Borrowings 26a - 622 -
------------------------------ ------ --------- --------- ---------
- 640 -
------------------------------ ------ --------- --------- ---------
Current liabilities
------------------------------ ------ --------- --------- ---------
Trade and other payables 24b 4,423 8,051 1,787
------------------------------ ------ --------- --------- ---------
Current tax liabilities 25b 70 65 -
------------------------------ ------ --------- --------- ---------
Borrowings 26b 3,164 20,268 11,997
------------------------------ ------ --------- --------- ---------
7,657 28,384 13,784
------------------------------ ------ --------- --------- ---------
Liabilities classified
as held for sale 34 10,282 - -
------------------------------ ------ --------- --------- ---------
Total liabilities 17,939 29,024 13,784
------------------------------ ------ --------- --------- ---------
Total equity and liabilities 74,763 90,676 95,126
============================== ====== ========= ========= =========
The financial statements were approved by the Board of Directors
on 18th June, 2015 and were signed on its behalf by P.R.S. Earl
(Chief Executive) and A.J.S. Morris (Group Finance Director).
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2014
Notes 31.12.14 31.12.13
GBP'000 GBP'000
============================ ======= =============== ==============
Assets
---------------------------- ------- --------------- --------------
Non-current assets
---------------------------- ------- --------------- --------------
Investments 27 9,755 16,743
---------------------------- ------- --------------- --------------
Trade and other
receivables 16c 50,599 42,287
---------------------------- ------- --------------- --------------
60,354 59,030
---------------------------- ------- --------------- --------------
Current assets
---------------------------- ------- --------------- --------------
Inventories 18b 16,195 16,195
---------------------------- ------- --------------- --------------
Trade and other
receivables 16d 38 34
---------------------------- ------- --------------- --------------
Cash and cash equivalents 20 1 21
---------------------------- ------- --------------- --------------
16,234 16,250
---------------------------- ------- --------------- --------------
Total assets 76,588 75,280
---------------------------- ------- --------------- --------------
Equity and liabilities
---------------------------- ------- --------------- --------------
Shareholders' equity
---------------------------- ------- --------------- --------------
Share capital 21 11,228 11,145
---------------------------- ------- --------------- --------------
Share premium account 23 22,754 67,369
---------------------------- ------- --------------- --------------
Share option reserve 22 146 107
---------------------------- ------- --------------- --------------
Other Reserves 23 45,000 -
---------------------------- ------- --------------- --------------
Retained earnings (7,521) (8,486)
---------------------------- ------- --------------- --------------
Total equity 71,607 70,135
---------------------------- ------- --------------- --------------
Current liabilities
---------------------------- ------- --------------- --------------
Trade and other
payables 24c 4,981 5,145
---------------------------- ------- --------------- --------------
4,981 5,145
---------------------------- ------- --------------- --------------
Total equity and
liabilities 76,588 75,280
============================ ======= =============== ==============
The financial statements were approved by the Board of Directors
on 18th June, 2015 and were signed on its behalf by P. Earl (Chief
Executive) and A. Morris (Group Finance Director).
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2014
Notes Year Year
ended ended
=============================== ======
31.12.14 31.12.13
=============================== ======
Restated
GBP'000 GBP'000
=============================== ====== ====================== =====================
Cash flows from operating
activities
------------------------------- ------ ---------------------- ---------------------
Cash used in operations 29 (4,890) (3,980)
------------------------------- ------ ---------------------- ---------------------
Interest paid (312) 547
------------------------------- ------ ---------------------- ---------------------
Taxation paid (8) (29)
------------------------------- ------ ---------------------- ---------------------
Net cash used in operating
activities (5,210) (3,462)
------------------------------- ------ ---------------------- ---------------------
Cash flows from investing
activities
------------------------------- ------ ---------------------- ---------------------
Purchase of plant and
equipment 14 (5,135) (7,523)
------------------------------- ------ ---------------------- ---------------------
Settlement for expropriated 18,863 -
assets
------------------------------- ------ ---------------------- ---------------------
Repayments from joint
venture company 3,381 3,840
------------------------------- ------ ---------------------- ---------------------
Net cash generated from/(used
in) investing activities 17,109 (3,683)
------------------------------- ------ ---------------------- ---------------------
Net cash inflow/(outflow)
before financing activities 11,899 (7,145)
------------------------------- ------ ---------------------- ---------------------
Cash flows from financing
activities
------------------------------- ------ ---------------------- ---------------------
Issue of shares (net 468 -
of costs)
------------------------------- ------ ---------------------- ---------------------
Deferred Consideration (125) -
------------------------------- ------ ---------------------- ---------------------
Loan drawdowns 3,170 4,753
------------------------------- ------ ---------------------- ---------------------
Loan repayments (18,859) -
------------------------------- ------ ---------------------- ---------------------
Net cash (used in)/generated
from financing activities (15,346) 4,753
------------------------------- ------ ---------------------- ---------------------
Decrease in cash and
cash equivalents (3,447) (2,392)
------------------------------- ------ ---------------------- ---------------------
Cash and cash equivalents
at start of year 3,730 6,122
------------------------------- ------ ---------------------- ---------------------
Cash and cash equivalents
at end of year 283 3,730
------------------------------- ------ ---------------------- ---------------------
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2014
Notes Year Year
ended ended
================================ ======
31.12.14 31.12.13
================================ ======
GBP'000 GBP'000
================================ ====== ======================= =======================
Cash flows from operating
activities
-------------------------------- ------ ----------------------- -----------------------
Cash (used in)/generated
from operations 29 (4,397) 5,783
-------------------------------- ------ ----------------------- -----------------------
Net cash (used in)/generated
from operations (4,397) 5,783
-------------------------------- ------ ----------------------- -----------------------
Cash flows from investing
activities
-------------------------------- ------ ----------------------- -----------------------
Investment in and loans
to subsidiaries and joint
venture company (2,919) (14,104)
-------------------------------- ------ ----------------------- -----------------------
Loan repayments by joint
venture company 3,382 3,840
-------------------------------- ------ ----------------------- -----------------------
Loan repayment from subsidiary 3,323 -
-------------------------------- ------ ----------------------- -----------------------
Net cash generated from/(used
in) investing activities 3,786 (10,264)
-------------------------------- ------ ----------------------- -----------------------
Net cash outflow before
financing activities (611) (4,481)
-------------------------------- ------ ----------------------- -----------------------
Cash flows from financing
activities
-------------------------------- ------ ----------------------- -----------------------
Issue of shares (net of 468
costs) -
-------------------------------- ------ ----------------------- -----------------------
Loan drawdowns 278
-------------------------------- ------ ----------------------- -----------------------
Loan repayments (155) -
-------------------------------- ------ ----------------------- -----------------------
Net cash generated from 591 -
financing activities
-------------------------------- ------ ----------------------- -----------------------
Decrease in cash and cash
equivalents (20) (4,481)
-------------------------------- ------ ----------------------- -----------------------
Cash and cash equivalents
at start of year 21 4,502
-------------------------------- ------ ----------------------- -----------------------
Cash and cash equivalents
at end of year 1 21
================================ ====== ----------------------- -----------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2014
Share Share Foreign Share Retained Other Plant Total Non-controlling Total
=================
capital premium currency option earnings reserve reserve GBP'000 interest equity
=================
note GBP'000 GBP'000 reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000 GBP'000
Original
Balance
at 1.1.13 8,413 53,012 (598) 46 19,389 - 1,050 81,312 224 81,536
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Effect
of restatement
due to
change
in accounting
policy - - - - (194) - - (194) - (194)
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Restated
Balance
at 1.1.13 8,413 53,012 (598) 46 19,195 - 1,050 81,118 224 81,342
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ----------------
Transactions
with
owners
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Issue
of share 2,732 14,357 - - - - - 17,089 - 17,089
----------------- ----------- ------------ ------------ ---------- --------- ------------- ---------------- -------------
Charge
for share
options - - - 61 - - - 61 - 61
----------------- ------------ ---------- --------- ------------- ---------------- -------------
Non-controlling
interest - - - - - - - - (82) (82)
----------------- ------------ ---------- --------- ------------- ---------------- -------------
Total
transactions
with
owners 2,732 14,357 - 61 - - - 17,150 (82) 17,068
------------ ---------- ---------
Loss
for year - - - - (36,394) - - (36,394) - (36,394)
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Exchange
differences - - (364) - - - - (364) - (364)
----------- ------------ ---------- --------- ------------- ---------------- -------------
Total
comprehensive
loss - - (364) (36,394) - - (36,758) - (36,758)
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Balance
at 31.12.13 11,145 67,369 (962) 107 (17,199) - 1,050 61,510 142 61,652
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ----------------
Transactions
with
owners
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Issue
of share 21 83 467 - - - - - 550 - 550
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Share
issue
costs - (82) - - - - - (82) - (82)
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Charge
for share
options - - 39 - - - 39 - 39
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Transfer
to Other
reserve 23 - (45,000) - - - 45,000 - - - -
----------------- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Non-controlling
interest - - - - - - - - 141 141
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Total
transactions
with
owners 83 (44,615) - 39 - 45,000 - 507 141 648
------------ ------------ ---------
Loss
for year
including
Minority
Loss (3,227) (3,227) (3,227)
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Exchange
differences (2,249) (2,249) (2,249)
Total
comprehensive
loss
for the
year - - (2,249) - (3,227) - - (5,476) - (5,476)
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
Balance
at 31.12.14 11,228 22,754 (3,211) 146 (20,426) 45,000 1,050 56,541 283 56,824
----------------- ----- ----------- ------------ ------------ ----------- ------------ ---------- --------- ------------- ---------------- -------------
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2014
Share Share Share Retained Other Total
=================
capital premium option earnings reserve GBP'000
=================
note GBP'000 GBP'000 reserve GBP'000 GBP'000
GBP'000
Balance at
1.1.13 8,413 53,012 46 1,879 - 63,350
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Transactions
with owners
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Issue of share 2,732 14,357 - - - 17,089
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Charge for share
options - - 61 - - 61
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Non-controlling - - - - - -
interest
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
transactions
with owners 2,732 14,357 61 - - 17,150
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Loss for year - - - (10,365) - (10,365)
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
loss - - (10,365) - (10,365)
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Balance at
31.12.13 11,145 67,369 107 (8,486) - 70,135
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Transactions
with owners
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Issue of share 21 83 467 550
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Issue costs (82) (82)
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Charge for share
options 39 39
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Transfer to
Other
Reserve 23 (45,000) 45,000 -
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
transactions
with owners 83 (44,615) 39 - 45,000 507
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Profit for year - - - 965 - 965
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
profit - - - 965 - 965
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Balance at
31.12.14 11,228 22,754 146 (7,521) 45,000 71,607
----------------- ----- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2014
1 General information, basis of preparation and new accounting
standards
1a General information
Rurelec PLC is the Group's ultimate parent company. It is
incorporated and domiciled in England and Wales. Rurelec's shares
are traded on the AIM market of the London Stock Exchange PLC.
The nature of the Group's operations and its principal
activities are the generation of electricity in South America.
1b Basis of preparation, including going concern
The Company and the consolidated financial statements have been
prepared in compliance with International Financial Reporting
Standards ("IFRSs") and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations as adopted by
the European Union and company law applicable to companies
reporting year ended 31 December 2014. The Directors have continued
to adopt the going concern basis for the preparation of these
financial statements, having received settlement from the Bolivian
Government in 2014 allowing the repayment of the Birdsong loan in
June 2014. During 2015 the Group continues to receive funds from
Argentina in service of the loans to the Joint Venture, whilst also
selling the assets of the Group in Peru.
The Group has agreed but not contracted a bridging loan facility
of $12 million that will be drawn down in the event that the
arrangements for an alternative one year secured loan from a large
organisation within the South American power industry is not signed
within the time limits required by the company's creditors. It is
expected that the Group will reach satisfactory agreement with this
large organisation such that the proceeds of this loan will be used
to meet current obligations and provide working capital for the
Group. The Group expects to repay the loan from the proceeds of the
sale of its Peruvian assets. On the basis of these loan facilities
the Directors have assessed that the Group has sufficient working
capital based on their review of cashflow forecasts for a period of
at least 12 months from the signing of the financial
statements.
Restatement of 2013 accounts
The 2013 financial results have been restated for the
application of IFRS 11 Joint Arrangements. In previous years the
group has accounted for interests in joint ventures under the
proportionate consolidation approach. Under IFRS 11 the Group's
interest needs to be included in the consolidated accounts by
equity accounting. This change in accounting policy has had the
effect of increasing the net assets of the Group by GBP3.3 million
at 31 December 2013 and GBP0.2 million as at 1 January 2013 and
also has reduced the loss by GBP3.3 million in the Consolidated
Statement of Comprehensive Income for the year ended 31 December
2013. The investment in the Joint Venture is held at nil as the
Group is not recognising additional losses over and above that
investment. More information on the effect of IFRS 11 can be seen
in note 28.
1c New accounting standards
At the date of authorisation of these financial statements
certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective. The Group
has not early adopted any of these pronouncements. The new
Standards, amendments and Interpretations that are expected to be
relevant to the Group's financial statements are as follows:
Applicable for financial
Standard/interpretation Content years beginning on/after
IFRS 9 (2014) Financial instruments: 01/01/2018
Standards and amendments to existing standards effective 1
January 2014
The following standards, amendments and interpretations became
effective in 2014:
Standard/ interpretation Content Applicable for financial years
beginning on or after
Amendments to IAS 36* Recoverable Amount Disclosures for
Non-Financial Assets 01/01/2014
IFRS 10* Consolidated Financial Statements 01/01/2014
IFRS 11 Joint Arrangements 01/01/2014
IFRS 12* Disclosure of Interests in Other Entities
01/01/2014
IAS 27* (Revised) Separate Financial Statements 01/01/2014
IAS 28* (Revised) Investments in Associates and Joint Ventures
01/01/2014
Amendment to IFRS 10, Transition Guidance 01/01/2014
IFRS 11 and IFRS 12*
Amendment to IFRS 10* Investment Entities 01/01/2014
Amendments to IAS 32* Offsetting Financial Assets and Financial Liabilities
01/01/2014
IFRIC Interpretation 21* Levies 01/01/2014
* The adoption of these Standards and Interpretations has had no
material impact on the financial statements of the Group other than
for the disclosure of joint venture.
IFRS 9, 'Financial instruments: Classification and
measurement'
The Directors do not anticipate that the adoption of these
standards and interpretations in future periods will have any
material impact on the financial statements of the Group.
2 Summary of significant accounting policies
2.1 Basis of consolidation
The Group financial statements consolidate the results of the
Company, the equity accounting under IFRS 11 in the Argentina joint
venture, the Group's 100 per cent. interest in the Chilean entity
and the Peruvian assets held for sale.
Subsidiaries are entities over which the Group has the power to
control the financial and operating policies so as to obtain
benefits from its activities. The Group obtains and exercises
control through voting rights. Management has reviewed its control
assessments in accordance with IFRS 10 and has concluded that there
is no effect on the classification as subsidiaries or joint
ventures of any of the Group's investees held during the period or
comparative periods covered by these financial statements.
The consolidated financial statements comprise the financial
statements of the Group and its subsidiaries as at 31 December
2014. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee. Generally there is a presumption that a majority of
voting rights result in control. To support this presumption and
when the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an
investee.
Consolidation of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
A joint arrangement is a contractual arrangement whereby the
Group and other parties undertake an economic activity that is
subject to joint control that is when the strategic financial and
operating policy decisions relating to the activities of the joint
venture require the unanimous consent of the parties sharing
control.
The Group reports its interests in joint venture using the
equity method of accounting, except when the investment is
classified as held for sale.
Under the equity method, investments in joint ventures are
carried in the consolidated statement of financial position at cost
as adjusted for post-acquisition changes in the Group's share of
the net assets of the joint venture, less any impairment in the
value of individual investments. Losses of a joint venture in
excess of the Group's interest in that joint venture are not
recognised, unless the Group has incurred legal or constructive
obligations or made payments on behalf of the joint venture.
Any excess of the cost of acquisition over the Group's share of
the net fair value of the identifiable assets, liabilities and
contingent liabilities of the joint venture recognised at the date
of acquisition is recognised as goodwill.
The goodwill, if any is included within the carrying amount of
the investment and is assessed annually for impairment as part of
the investment. Any excess of the Group's share of the net fair
value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition, after reassessment, is
recognised immediately as a profit or loss.
Unrealised gains on transactions between the Group and its joint
venture are eliminated to the extent of the Group's interest in the
joint venture. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Unrealised gains on transactions between the Group and
subsidiary entities are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the
financial statements of subsidiary and joint venture entities have
been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the acquisition
method. This method involves the recognition at fair value of all
identifiable assets and liabilities, including contingent
liabilities of the acquired company, at the acquisition date,
regardless of whether or not they were recorded in the financial
statements of the entity prior to acquisition. On initial
recognition, the assets and liabilities of the acquired entity are
included in the consolidated statement of financial position at
their fair values, which are also used as the bases for subsequent
measurement in accordance with the Group's accounting policies.
Investments in subsidiaries are stated at cost in the statement of
financial position of the Company.
2.2 Goodwill
Goodwill representing the excess of the cost of acquisition over
the fair value of the Group's share of the identifiable net assets
acquired is capitalised and reviewed annually for impairment.
Goodwill is stated after separating out identifiable assets and
liabilities. Goodwill is carried at cost less accumulated
impairment losses. Any excess of interest in acquired assets,
liabilities and contingent liabilities over fair value is
recognised immediately after acquisition through the income
statement.
2.3 Foreign currency translation
The financial information is presented in pounds sterling, which
is also the functional currency of the parent company.
In the separate financial statements of the consolidated
entities, foreign currency transactions are translated into the
functional currency of the individual entity using the exchange
rates prevailing at the dates of the transactions ("spot exchange
rate"). Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of
remaining balances at year-end exchange rates are recognised in the
income statement within 'other expense'.
In the consolidated financial statements, all separate financial
statements of subsidiary and joint venture, originally presented in
a currency different from the Group's presentation currency, have
been converted into sterling. Assets and liabilities have been
translated into sterling at the closing rate at the reporting date.
Income and expenses have been converted into sterling at the
average rates over the reporting period. Any differences arising
from this procedure have been recognised in other comprehensive
income and accumulated in the Foreign Currency Reserve.
2.4 Income and expense recognition
Revenue represents amounts receivable for goods or services
provided in the normal course of business, net of trade discounts,
VAT and other sales-related taxes, and excluding transactions with
or between Group companies. Revenues from the sale of electricity
are recorded based upon output delivered at rates specified under
contract terms or prevailing market rates as applicable. Revenue is
recognised on the supply of electricity when a contract exists and
supply has taken place. Revenue received for keeping power plants
operating and available for despatch into the grid as required is
recognised on a straight-line basis over the contractual period.
During the year under review and the prior year, no revenues were
derived from the sale of equipment purchased with a view to
subsequent resale
Operating expenses are recognised in the income statement upon
utilisation of the service or at the date of their origin. All
other income and expenses are reported on an accrual basis.
Independent Power Corporation PLC a 100 per cent. subsidiary of
Rurelec PLC undertakes engineering and development exercises for
the Group and third parties. Income and expenses are recognised as
they occur, however there are accrued income amounts which relate
to success fees on completing the engineering and development of
projects that are paid on financial close of the project. The
amounts of accrued income are subjective and are determined by
management dependent on the level of completion of the relevant
project and the expected timing of financial close.
2.5 Dividends
Dividends, other than those from investments in associates and
joint ventures, are recognised at the time the right to receive
payment is established. No dividends were paid or received during
the year (2013: nil).
2.6 Borrowing costs
All borrowing costs are expensed as incurred except where the
costs are directly attributable to specific construction projects,
in which case the interest cost is capitalised as part of those
assets.
2.7 Property, plant and equipment
Property, plant and equipment are stated at cost, net of
depreciation and any provision for impairment. No depreciation is
charged during the period of construction.
All operational buildings and plant and equipment in the course
of construction are recorded as plant under construction until such
time as they are brought into use by the Group. Plant under
construction includes all direct expenditure and may include
capitalised interest in accordance with the accounting policy on
that subject. On completion, such assets are transferred to the
appropriate asset category.
Repairs and maintenance are charged to the income statement
during the financial period in which they are incurred. The cost of
major renovations and overhauls is included in the carrying amount
of the assets where it is probable that the economic life of the
asset is significantly enhanced as a consequence of the work. Major
renovations and overhauls are depreciated over the expected
remaining useful life of the work.
Depreciation is calculated to write down the cost less estimated
residual value of all property, plant and equipment other than
freehold land which is not depreciated by equal annual instalments
over their estimated useful economic lives. The periods generally
applicable are:
Buildings 25 to 50 years
Plant and equipment 3 to 15 years
Material residual values are updated as required, but at least
annually. Where the carrying amount of an asset is greater than its
estimated recoverable amount, it is written down immediately to its
recoverable amount.
2.8 Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amount of
its property, plant and equipment and intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
the income statement. The Group recognises a cash-generating unit
by its ability to independently earn income. The Group carries each
cash-generating unit in an individual special purpose company so
they are easily recognised.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in the
income statement.
2.9 Non-current Assets Held for Sale and Discontinued
Operations
In general IFRS 5 outlines how to account for non-current assets
held for sale such that assets (or disposal groups) held for sale
are not depreciated, are measured at the lower of carrying amount
and fair value less costs to sell, and are presented separately in
the statement of financial position.
The following conditions must be met for an asset (or 'disposal
group') to be classified as held for sale: IFRS 5.6-8
-- management is committed to a plan to sell
-- the asset is available for immediate sale
-- an active program to locate a buyer is initiated
-- the sale is highly probable, within 12 months of
classification as held for sale (subject to limited exceptions)
-- the asset is being actively marketed for sale at a sales
price reasonable in relation to its fair value
-- actions required to complete the plan indicate that it is
unlikely that plan will be significantly changed or withdrawn
The assets need to be disposed of through sale. When the Group
is committed to a sale involving loss of control of a subsidiary
that qualifies for held-for-sale classification under IFRS 5 the
Group classifies all of the assets and liabilities of that
subsidiary as held for sale, even if the entity will retain a
non-controlling interest in its former subsidiary after the sale.
Non-current assets or disposal groups that are classified as held
for sale are measured at the lower of carrying amount and fair
value less costs to sell. Assets classified as held for sale, and
the assets and liabilities included within a disposal group
classified as held for sale, are presented separately on the face
of the statement of financial position. The sum of the post-tax
profit or loss of the discontinued operation and the post-tax gain
or loss recognised on the measurement to fair value less cost to
sell or fair value adjustments on the disposal of the assets (or
disposal group) is presented as a single amount on the face of
the
statement of comprehensive income.
2.10 Taxation
Current income tax assets and liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting period, that are unpaid at the reporting
date. They are calculated according to the tax rates and tax laws
applicable to the fiscal periods to which they relate, based on the
taxable profit for the period. All changes to current tax assets or
liabilities are recognised as a component of tax expense in the
income statement or through the statement of changes in equity.
Deferred income taxes are calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the consolidated
financial statements with their respective tax bases. However, in
accordance with the rules set out in IAS 12, no deferred taxes are
recognised in respect of non-tax deductible goodwill. In addition,
tax losses available to be carried forward as well as other income
tax credits to the Group are assessed for recognition as deferred
tax assets.
Deferred tax liabilities are provided for in full with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided that they are enacted or substantially
enacted at the reporting date.
Deferred tax is provided on differences between the fair value
of assets and liabilities acquired in an acquisition and the
carrying value of the assets and liabilities of the acquired entity
and on the differences relating to investments in subsidiary and
joint venture companies if the difference is a temporary difference
and is expected to reverse in the foreseeable future.
Changes in deferred tax assets and liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
2.11 Financial assets
The Group's financial assets include cash and cash equivalents,
loans and receivables.
Cash and cash equivalents include cash at bank and in hand as
well as short term highly liquid investments such as bank
deposits.
Loans and receivables are non-derivative financial assets with
fixed or determinable payment dates that are not quoted in an
active market. They arise when the Group provides money, goods or
services directly to a debtor with no intention of trading the
receivable. Receivables are measured initially at fair value and
subsequently re-measured at amortised cost using the effective
interest method, less provision for impairment. Any impairment is
recognised in the income statement.
Trade receivables are provided against when objective evidence
is received that the Group will not be able to collect all amounts
due to it in accordance with the original terms of the receivables.
The amount of the write-down is determined as the difference
between the assets carrying amount and the present value of
estimated cash flows.
2.12 Financial liabilities
Financial liabilities are obligations to pay cash or other
financial instruments and are recognised when the Group becomes a
party to the contractual provisions of the instrument. All
transaction costs are recognised immediately in the income
statement.
A financial liability is derecognised only when the obligation
is extinguished, that is when the obligation is discharged,
cancelled or expires.
Bank and other loans are raised for support of long-term funding
of the Group's operations. They are recognised initially at fair
value, net of transaction costs and are subsequently measured at
amortised cost using the effective interest method. Finance
charges, including premiums payable on settlement or redemption,
and direct issue costs are charged to the income statement on an
accruals basis 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.
2.13 Inventories
Inventories comprise spare parts and similar items for use in
the Group's plant and equipment. Inventories are valued at the
lower of cost and net realisable value on a first in, first out
basis.
2.14 Shareholders' equity
Equity attributable to the shareholders of the parent company
comprises the following:
"Share capital" represents the nominal value of equity
shares.
"Share premium" represents the excess over nominal value of the
fair value of consideration received for equity shares, net of
expenses of the share issue.
"Foreign currency reserve" represents the differences arising
from translation of investments in overseas subsidiaries.
"Share option reserve" represents the fair value of options
granted and outstanding at the year-end.
"Retained earnings" represents retained profits.
"Other reserves" comprises the reduction of the share premium
account.
2.15 Pensions
During the year under review, the Group did not operate or
contribute to any pension schemes (2013: nil).
2.16 Segment reporting
In identifying its operating segments, management follows the
Group's geographic locations and are reported in a manner
consistent with the Chief Operating Decision Maker. The activities
undertaken by segments are the generation of electricity in their
country of incorporation within South America.
Each of the operating segments is managed separately as the
rules and regulations vary from country to country.
The measurement policies used by the Group for segment reporting
under IFRS 8 are the same as those used in the financial
statements.
3 Key assumptions and estimates
When preparing the financial statement, management make a number
of judgements, estimates and assumptions about the recognition and
measurement of assets, liabilities income and expenses. The actual
results may differ from the judgements, estimates and assumptions
made and will seldom equal the estimated results. The areas which
management consider are likely to be most affected by the
significant judgements, estimates and assumptions on recognition
and measurement of assets, liabilities, income and expenses
are:
a) Useful lives of depreciable assets - management review, with
the assistance of external expert valuers, the useful lives of
depreciable assets at each reporting date. This review includes
consideration of the book value of plant under construction which
at the year-end amounted to GBP3.7 million. Actual results,
however, may vary due to changes in technology and industry
practices.
b) Impairment - management review tangible and intangible assets
at each balance sheet date to determine whether there is any
indication that those assets have suffered an impairment loss. This
review process includes making assumptions about future events,
circumstances and operating results. The actual results may vary
from those expected and could therefore cause significant
adjustments to the carrying value of the Group's assets. Details of
the assumptions underlying management's forecasts for the Group's
main Cash Generating Unit ("CGU") are set out in note 15.
c) Deferred tax assets and liabilities - there exists an element
of uncertainty regarding both the timing of the reversing of timing
differences and the tax rate which will be applicable when the
reversing of the asset or liability occurs.
d) Asset acquisitions - where the Group acquires assets or a
company which is not considered to be a business as defined by IFRS
3, the transaction is accounted for as an asset acquisition and not
a business combination.
e) Management have assessed that we do not control the Argentine
Joint Venture and therefore have treated the joint venture in
accordance with IFRS 11 (see note 28). This assessment is based on
the lack of power over the investee and due to the exposure to
variable returns from its involvement with the investee.
f) Accrued Income - Management makes assessments as to the
amounts of accrued income that is recognised in the Group's
accounts. The amounts recognised are based on what is expected to
be received in total and relate to success fees from projects
developed by the Group. These amounts are then reviewed with
adjustments for the level of completion of the project and the
likelihood of reaching financial close when the amounts will become
due. These are judgements made by management of the Group and the
actual results may differ from these judgemental assessments.
4 Segment Analysis
Management currently identifies the Group's four geographic
operating segments; Argentina, Chile, Peru and the head office in
the UK, as operating segments as further described in the
accounting policy note. These operating segments are monitored and
strategic decisions are made on the basis of segment operating
results. However even though the Argentine operation has been
accounted for under the equity accounting method as a Joint Venture
under IFRS 11 the segmental analysis is shown in this note 4 but
then removed in consolidation adjustments to provide the results in
accordance with IFRS 11. More details on the effect of this has
been shown in note 28.
The following tables provide an analysis of the operating
results, total assets and liabilities, capital expenditure and
depreciation for 2014 and 2013 for each geographic segment.
a) 12 months Argentina Chile Peru UK Bolivia Consolidation Total
to 31.12.2014
==================
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 adjustments
==================
GBP'000 GBP'000
Revenue 8,611 - - 423 - (8,731) 303
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Write off of
accrued income - - - (3,219) - - (3,219)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Cost of sales (5,579) - - (231) - 5,579 (231)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Gross
profit/(loss) 3,032 - - (3,027) - (3,152) (3,147)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Administrative
expenses (293) (83) (661) (3,208) - 413 (3,832)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Profit/(loss)
from operations 2,739 (83) (661) (6,235) - (2,739) (6,979)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Other
(expense)/income - - - (574) 299 (117) (392)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Foreign exchange
(losses)/gains (2,175) 51 (631) 2,760 - 2,175 2,180
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Finance income - - 18 3,780 - (1,230) 2,568
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Finance expense (674) - (742) (918) - 2,022 (312)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
(Loss)/profit
before tax (110) (32) (2,016) (1,187) 299 110 (2,936)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Tax expense (105) - (8) - - 105 (8)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Loss for the
year (215) (32) (2,024) (1,187) 299 215 (2,944)
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Total assets 11,545 6,458 18,528 78,626 - (40,394) 74,763
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Total liabilities 23,383 7,321 22,697 6,865 - (42,327) 17,939
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Capital
expenditure - - 5,087 48 - - 5,135
------------------ ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
Depreciation 293 - 2 10 - (293) 12
================== ----------------- ---------- --------------- --------------- ------------ ---------------------------- --------------------
The impairment relating to the IPC goodwill recognised on
consolidation is regarded as relating to the UK operating segment.
This is due to the Chief Operating Decision Maker reviewing the
results of IPC within the UK operating segment.
a) 12 months Argentina Chile Peru UK Bolivia Consolidation Total
to 31.12.2013
- restated
==================
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 adjustments GBP'000
==================
GBP'000
Revenue 9,651 - - 5,442 - (9,651) 5,442
------------------ ---------------- ----------- --------------- ------------- ------------------------ ----------------
Cost of sales (4,186) - - (1,619) - 4,186 (1,619)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Gross profit 5,465 - - 3,823 - (5,465) 3,823
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Administrative
expenses (4,278) (55) (475) (3,211) - 4,278 (3,741)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Profit/(loss)
from operations 1,187 (55) (475) 612 - (1,187) 82
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Other expense - - - - (38,314) - (38,314)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Other expense
From share of
JV - - - - - (319) (319)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Foreign exchange
losses (3,761) (55) 197 (504) - 3,562 (561)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Finance income - - 186 3,857 (198) (1,078) 2,767
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Finance expense (1,819) (3) (219) (12,218) - 14,239 (20)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Loss before
tax (4,393) (113) (311) (8,253) (38,512) 15,217 (36,365)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Tax
credit/(expense) 218 - (29) - - (218) (29)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Loss for the
year (4,175) (113) (340) (8,253) (38,512) 14,999 (36,394)
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
-
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Total assets 15,741 944 6,499 78,441 (1,729) (9,220) 90,676
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Total liabilities 22,169 1,701 6,869 6,199 - (7,914) 29,024
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Capital
expenditure 221 1,786 5,934 16,195 - 32 24,168
------------------ ---------------- ----------- --------------- ------------- ------------ ------------------------ ----------------
Depreciation 435 - 4 5 - (435) 9
================== ================ =========== =============== ============= ============ ======================== ----------------
5 Exchange rate sensitivity analysis
The key exchange rates applicable to the results were as
follows:
31.12.14 31.12.13
====================== ========= =========
i) Closing rate
---------------------- --------- ---------
AR$ (Argentine Peso)
to GBP 13.2814 10.7073
---------------------- --------- ---------
US$ to GBP 1.5532 1.6488
---------------------- --------- ---------
CLP (Chilean Peso)
to GBP 940.964 866
---------------------- --------- ---------
PEN (Peruvian Sol)
to GBP 4.5744 4.55
---------------------- --------- ---------
ii) Average rate
---------------------- --------- ---------
AR$ (Argentine Peso)
to GBP 12.7777 8.6676
---------------------- --------- ---------
US$ to GBP 1.6445 1.5652
---------------------- --------- ---------
CLP (Chilean Peso)
to GBP 940.528 863
---------------------- --------- ---------
PEN (Peruvian Sol)
to GBP 4.6084 4.51
====================== ========= =========
If the exchange rate of sterling at 31 December 2014 had been
stronger or weaker by 10 per cent with all other variables held
constant, shareholder equity at 31 December 2014 would have been
GBP3.3 million (2013: GBP0.9 million, restated 2013 GBP0.2 million)
lower or higher than reported.
If the average exchange rate of sterling during 2014 had been
stronger or weaker by 10 per cent with all other variables held
constant, the profit for the year would have been GBP0.1 million
(2013: GBP0.4 million, restated 2013: GBP0.05 million) higher or
lower than reported.
6 Cost of sales
Year Year
ended ended
==================================
31.12.14 31.12.13
==================================
Restated
GBP'000 GBP'000
================================== ----------------- --------------
Expenditure incurred in cost
of sales is as follows:
---------------------------------- ----------------- --------------
Cost of Equipment and ancillary
costs 2 1,475
---------------------------------- ----------------- --------------
Other 229 144
---------------------------------- ----------------- --------------
231 1,619
================================== ================= ==============
7 Administrative expenses
Year ended Year Year
ended ended
========================================
31.12.14 31.12.13 31.12.13
========================================
Restated Originally
stated
GBP'000 GBP'000 GBP'000
======================================== ================ ================ ================
Expenditure incurred in administrative
expenses is as follows:
---------------------------------------- ---------------- ---------------- ----------------
Payroll and social security 1,754 1,324 3,370
---------------------------------------- ---------------- ---------------- ----------------
Services, legal and professional 678 416 497
---------------------------------------- ---------------- ---------------- ----------------
Office costs and general overheads 1,326 1,914 4,065
---------------------------------------- ---------------- ---------------- ----------------
Audit services(1) 74 87 87
---------------------------------------- ---------------- ---------------- ----------------
3,832 3,741 8,019
---------------------------------------- ---------------- ---------------- ----------------
(1) Audit services include GBP74k paid to the auditors for the
audit of the Company and the Group financial statements and GBPnil
paid to the Company's auditors for non-audit professional services
provided to the Company in connection with the review of overseas
activities (2013 GBP75.5k). Fees paid to other auditors, in respect
of the audit of joint venture companies, amounted to GBP35k (2013:
GBP11.5k).
8 Employee costs
a) Group Year Year Year
ended ended ended
===========================================
31.12.14 31.12.13 31.12.13
===========================================
Restated Originally
stated
GBP'000 GBP'000 GBP'000
=========================================== ========= ========= ===========
Aggregate remuneration of all employees
and Directors, including social security
costs 1,754 1,324 3,370
=========================================== ========= =========
The average number of employees in the Group,
including Directors, during the year was as
follows:
Number Number Number
=========================================== ========= ========= -----------
Management 5 6 12
------------------------------------------- --------- --------- -----------
Operations - 10 17
------------------------------------------- --------- --------- -----------
Development 18 4 7
=========================================== --------- --------- -----------
Administration 22 14 24
=========================================== --------- --------- -----------
Total 45 34 60
------------------------------------------- --------- --------- -----------
b) Company GBP'000 GBP'000 GBP'000
=========================================== --------- --------- -----------
Aggregate remuneration of all employees
and Directors, including social security
costs 62 409 409
------------------------------------------- --------- --------- -----------
The average number of employees in the Company,
including Directors, during year was as follows:
Number Number Number
=========================================== --------- ========= -----------
Management 5 6 6
------------------------------------------- --------- --------- -----------
c) Directors' remuneration, including social security costs
The total remuneration paid to the Directors was GBP717,000
(2013: GBP615,000). The total remuneration of the highest paid
Director was GBP226,000 (2013: GBP230,000). Other emoluments paid
were health insurance costs, there were no bonuses, pension costs
or share based payments paid during the year (2013: nil)
Year ended Year ended Year
31.12.14 31.12.14 ended Year ended
GBP'000 GBP'000 31.12.14 31.12.13
GBP'000 GBP'000
============= =============== ================ ========= ==========
Base Salary/Fee Other Emoluments
Inc. Social
Security Total Total
------------- --------------- ---------------- --------- ----------
P. Earl 226 4 230 230
------------- --------------- ---------------- --------- ----------
E. Shaw 174 3 177 160
------------- --------------- ---------------- --------- ----------
A. Morris 209 3 212 88
------------- --------------- ---------------- --------- ----------
M. Blanco 24 - 24 95
------------- --------------- ---------------- --------- ----------
L. Coben 15 - 15 30
------------- --------------- ---------------- --------- ----------
C Emson 29 - 29 6
------------- --------------- ---------------- --------- ----------
B Rowbotham 30 - 30 6
------------- --------------- ---------------- --------- ----------
Total 707 10 717 615
============= =============== ================ ========= ==========
9 (a) OTHER EXPENSE
Year ended Restated Originally
Year ended Stated
Year
ended
========================
31.12.14 31.12.13 31.12.13
========================
GBP'000 GBP'000 GBP'000
======================== ============================== ===================== ===========
Foreign exchange Gains
/ (losses)(3) 2,180 (561) (3,268)
------------------------ ------------------------------ --------------------- -----------
Total 2,180 (561) (3,268)
------------------------ ------------------------------ --------------------- -----------
(3) Foreign exchange Gains / (losses) have arisen in Argentina
on US$ denominated loans and in the UK on US$ denominated
receivables.
9 (b) OTHER expense
Loss on Bolivia settlement Year ended Originally
stated
Year ended
----------------------------
31.12.14 31.12.13
----------------------------
GBP'000 GBP'000
---------------------------- --------------------------- --------------------------
Loss on settlement of
Claim - Bolivia(1) (376) (29,455)
---------------------------- --------------------------- --------------------------
Arbitration Costs / Cost
Reduction(2) 259 (4,929)
---------------------------- --------------------------- --------------------------
Impairment charge on (691) -
intangible in IPC(3)
---------------------------- --------------------------- --------------------------
Total (808) (34,384)
---------------------------- --------------------------- --------------------------
(1) The loss on the settlement with the Plurinational Government
of Bolivia has been arrived at further to the agreement in April
2014 from meetings held between the senior management of Rurelec
plc and the Attorney General of Bolivia. The agreed settlement is
$31.5m or GBP19.1m which is made up of GBP17.5m compensation claim
and interest of GBP1.6m. The carrying value of the claim, excluding
interest and reimbursement of costs, as at 31 December 2012 was
GBP47.0m and therefore the loss was GBP29.5m. The amount shown for
2014 of GBP376k loss was the adjustment of what was accrued in 2013
and paid in 2014.
(2) The arbitration costs were not awarded to Rurelec and so
GBP4.9m has been taken as a charge in 2013, in 2014 these costs
were reduced by GBP259k in agreement with the suppliers.
(3) Following goodwill impairment testing for IPC an impairment
of GBP691k has been charged in the year, see note 15 for further
details.
9 (c) OTHER expense
Birdsong Loan Expense Year ended Originally
stated
Year ended
-----------------------------
31.12.14 31.12.13
-----------------------------
GBP'000 GBP'000
----------------------------- ----------- -----------------------------
Interest Payable on
Birdsong Loan - (2,328)
----------------------------- ----------- -----------------------------
Birdsong loan participation
expense - CVR costs(1) 416 (1,299)
----------------------------- ----------- -----------------------------
Accrued lender costs - (303)
----------------------------- ----------- -----------------------------
Total 416 (3,930)
----------------------------- ----------- -----------------------------
(1) The Birdsong loan included a contingent value right which
amounted to 15% of the Bolivian claim plus interest. In 2014 there
was a GBP416k write back of CVR costs these are included in other
income.
(2) The Birdsong lender charges for extending the loan past
31(st) December 2013 have been accrued in 2013.
10 FINANCE INCOME & expense
Year Year ended
Year ended 31.12.13
ended 31.12.13 Originally
31.12.14 Restated stated
GBP'000 GBP'000 GBP'000
============================================= ========= ========= ============
Inter-group interest received/receivable(1) 2,450 2,966 2,399
--------------------------------------------- --------- --------- ------------
Interest accrued on Bolivian claim - (199) (199)
--------------------------------------------- --------- --------- ------------
Withholding Tax write back 117 - -
--------------------------------------------- --------- --------- ------------
Total interest income 2,567 2,767 2,200
--------------------------------------------- --------- --------- ------------
Interest paid/payable on bank
borrowings and loans(2) (312) (20) (1,272)
--------------------------------------------- ========= --------- ------------
(1) Inter-group interest arises on loans by the Company to its
50 per cent owned joint venture companies (PEL and EdS). The loans
by the Company to PEL and EdS exceed the loans of the other 50 per
cent shareholder by GBP27.6 million (2013: GBP26.9 million).
Interest on inter-group loans has been charged at rates of between
8 per cent and 19 per cent.
(2) Interest paid/payable includes interest on bank borrowings
and other loans in Peru and Argentina. The details of the amounts
due under the loans are shown in note 26.
Sensitivity analysis arising from changes in borrowing costs is
set out in note 26.
11 Tax expense
The relationship between the expected tax expense at basic rate
of 21.50 per cnt. per cent (31 December 2013: 23.25 per cent.) and
the tax expense actually recognised in the income statement can be
reconciled as follows:
Year Year ended Year
ended ended
================================
31.12.14 31.12.13 31.12.13
================================
Restated Originally
stated
GBP'000 GBP'000 GBP'000
================================ =============
Result for the year before
tax (2,936) (36,365) (39,384)
-------------------------------- ------------- -------------- -----------
Standard rate of corporation
tax in UK 21.50% 23.25% 23.25%
-------------------------------- ------------- -------------- -----------
Expected tax credit 632 8,455 9,157
-------------------------------- -------------
Adjustment for non-taxable
expense - (8,166) (8,166)
-------------------------------- ------------- -------------- -----------
Group relief surrender
by joint venture company - - -
-------------------------------- ------------- -------------- -----------
Adjustment for different
basis of calculating overseas
tax - - (997)
-------------------------------- ------------- -------------- -----------
Actual tax (expense)/credit (8) (29) 189
-------------------------------- ------------- -------------- -----------
Comprising:
-------------------------------- ------------- -------------- -----------
Current tax (expense)/credit (8) (29) 136
-------------------------------- ------------- -------------- -----------
Deferred tax / (net credit) - - 53
-------------------------------- ------------- -------------- -----------
Total credit (expense) (8) (29) 189
================================ ------------- -------------- ===========
12 Earnings per share
Basic loss per share is calculated by dividing the loss for the
period attributable to shareholders by the weighted average number
of shares in issue during the period.
Year ended Year ended
Year ended Originally
Restated stated
============================
31.12.14 31.12.13 31.12.13
============================ ============ ============= ============
Average number of shares
in issue 561,181,121 494,993,260 494,993,260
---------------------------- ------------ ------------- ------------
Effect of dilution -
share options outstanding 19,525,000 19,525,000 19,525,000
---------------------------- ------------ ------------- ------------
Result for the year
---------------------------- ------------ ------------- ------------
Loss attributable to GBP(2.9)m GBP(35.8)m GBP(39.2)m
equity holders of the
parent
---------------------------- ------------ ------------- ------------
Basic loss per share (0.52p) (7.23p) (7.92p)
---------------------------- ------------ ------------- ------------
Diluted loss per share (0.52p) (7.23p) (7.92p)
---------------------------- ------------ ------------- ------------
There is no difference between the Basic and Diluted loss per
share as there was a loss in the year and therefore the outstanding
options were anti-dilutive.
13 Holding company's result for the year
As permitted by Section 408 of the Companies Act 2006, the
holding company's income statement is not shown separately in the
financial statements. The profit for the year was GBP1.0 million
(2013: loss GBP10.4 million).
14 Property, plant and equipment
Land Plant Plant Total
and under
=============================
equipment construction
=============================
GBP'000 GBP'000 GBP'000 GBP'000
============================= ======== ========== ============= ========
a) Group
----------------------------- -------- ---------- ------------- --------
Cost at 1.1.13 - Restated - - 3,082 3,082
----------------------------- -------- ---------- ------------- --------
Exchange adjustments - - 546 537
----------------------------- -------- ---------- ------------- --------
Additions 72 16,195 7,901 24,168
----------------------------- -------- ---------- ------------- --------
Cost at 31.12.13 - Restated 72 16,195 11,530 27,797
----------------------------- -------- ---------- ------------- --------
Exchange adjustments - - (1,184) (1,184)
----------------------------- -------- ---------- ------------- --------
Transfer of Assets Held
for Sale - - (9,558) (9,558)
----------------------------- -------- ---------- ------------- --------
Additions - 60 5,075 5,135
----------------------------- -------- ---------- ------------- --------
Cost at 31.12.14 72 16,255 5,863 17,055
----------------------------- -------- ---------- ------------- --------
Depreciation at 1.1.13 - - - -
----------------------------- -------- ---------- ------------- --------
Exchange adjustments - - -
----------------------------- -------- ---------- ------------- --------
Charge for the year - 9 - 9
----------------------------- -------- ---------- ------------- --------
Depreciation at 31.12.13 - 9 - 9
----------------------------- -------- ---------- ------------- --------
Exchange adjustments - - -
----------------------------- -------- ---------- ------------- --------
Charge for the year - 12 - 12
----------------------------- -------- ---------- ------------- --------
Transfer of Assets Held - - - -
for Sale
----------------------------- -------- ---------- ------------- --------
Depreciation at 31.12.14 - 21 - 21
----------------------------- -------- ---------- ------------- --------
Net book value - 31.12.14 72 16,234 5,853 22,169
----------------------------- -------- ---------- ------------- --------
Net book value - 31.12.13 72 16,186 11,530 27,788
============================= -------- ---------- ------------- --------
Operating property, plant and equipment located in Argentina is
removed in accordance with IFRS 11. The Property, plant and
equipment of GBP16.24 million mainly relates to two turbines valued
at GBP16.20 million. Plant under construction comprises of plant in
Chile (GBP5.8 million) and Peru (GBP67k). The plant at Canchayllo
was completed in December 2014, and transferred to plant and
equipment. It was commissioned in January 2015.
b) Company - The Company had no property, plant and
equipment.
15 Intangible assets
Goodwill
GBP'000
=================================== ========
At 1 January 2014 1,792
----------------------------------- ========
Additions 220
----------------------------------- --------
Impairment (691)
----------------------------------- --------
At 31 December 2014 1,321
----------------------------------- --------
At 31 December 2013 RESTATED 1,792
----------------------------------- --------
At 1 January 2013 as originally
stated 3,168
----------------------------------- --------
Effect of restatement due
to change in accounting policy (3,168)
----------------------------------- --------
At 1 January 2013 RESTATED Nil
----------------------------------- --------
Fair value adjustment on Goodwill
and intangibles 1,792
----------------------------------- --------
At 31 December 2013 RESTATED 1,792
----------------------------------- --------
Goodwill represents the difference between the Group's share of
the fair value of the net identifiable assets acquired and the
consideration transferred on the acquisition of 100 per cent of IPC
in June 2013, the acquisition of Central Illapa SA in March 2013
and the acquisition of SEA Energy SA in October 2014.
The Group tests goodwill annually or more frequently if there
are indications that the intangible asset might be impaired. The
recoverable amounts are determined from value in use calculations.
The key assumptions for the value in use calculations are those
regarding the future cash flows (for a period of 5 years) which are
based on the most recent financial projections prepared for each
Cash Generating Unit ("CGU"). The projections incorporate
management's assumptions regarding revenue volumes, revenue prices,
operating costs, including gas and forecast growth and are based on
historical experience and current information. A long term discount
rate, derived from market data on comparable interest rates in the
local markets in which the Group operates, is then applied to the
projected future cash flows. The equity discount rate applied is 13
per cent. (2013 - 13 per cent.).
In the year ended 31 December 2014 management have concluded
that there is uncertainty relating to certain elements of accrued
income previously recognised in relation to operations conducted in
Central Illapa. This has resulted in approximately GBP3.2 million
of accrued revenue being written off in the year. This has led to
management performing an impairment review on the IPC CGU as
detailed below. This CGU predominately operates in South America
and is focussed on the development of projects in the power
generation industry there. The project in question was situated in
Chile, which is one of the operating segments used to monitor
business performance. The recoverable amount of the CGU has been
based on the value in use of IPC. The discount rate used in the
value in use calculation was 13 per cent..
The assumptions in respect of the IPC CGU include the financial
close and payment of development fees to IPC from the development
company for developments in Chile, whilst also including
engineering fees and recharge of expenses. The costs and revenue of
the group that are charged into IPC are well known and are shown to
rise at a reasonable inflationary rate of 3 per cent. and
expansionary rate of an additional 7 per cent. per annum. The
goodwill impairment test has been completed and shows the need for
an impairment of GBP691k, which is included in other expenses. An
increase in the discount rate by 1 per cent. to 14 per cent. would
increase the impairment by GBP167k. The brand value of IPC and its
experience over 20 years in the South American market supports the
remaining intangible assets shown within the Rurelec financial
statements.
The amount of goodwill that has been included in the intangible
asset is GBP1,101k in respect of IPC.
IPC has been active in markets which Rurelec did not have prior
to this business combination. The Group can ascribe separate
identifiable intangible assets in some of these markets where
Rurelec has not been active over the past years. The direct
cashflow basis has been used as the methodology to assess the value
of the separate markets from Rurelec's established market in South
America.
The main addition to the revenue streams are the engineering
fees and costs reimbursement plus development fees outside South
America. The effect is that the NPV of the separate markets can be
valued at least at GBP1.1 million which ensure that the value of
the Goodwill in IPC remains at GBP1,101k.
Full year Revenues for IPC were GBP431k (2013: GBP5,604k) and
(Losses)/Profits were (GBP4,167k) (2013: GBP2,108k).
SEA Energy SA is a wholly owned subsidiary of Rurelec PLC with a
small operating wind farm in Buenos Aires province in Argentina.
The Company was purchased in October 2014 for GBP245k spread over
two years. The company had net assets at the time of purchase of
GBP51k, with revenues for the full year of 2014 of GBP5k. The
intention of the purchase is to increase the size of the windfarm
in Argentina from 250kW to 3MW as well as purchase and own a gas
turbine that would operate on the site of the EdS plant in Comodoro
Rivadavia in Chubut Province of Argentina. The goodwill on
acquisition was GBP195k.
Central Illapa SA is a wholly owned subsidiary of Rurelec PLC,
the goodwill on acquisition was GBP25k.
16 Trade and other receivables
a) Group - non-current 31.12.14 31.12.13 31.12.13
===================================
Restated Originally
stated
===================================
GBP'000 GBP'000 GBP'000
=================================== ================== ================ ==============
Trade receivables 100 513 535
----------------------------------- ------------------ ---------------- --------------
Amounts due from joint venture
companies(1) 23,093 23,101 15,399
----------------------------------- ------------------ ---------------- --------------
Other receivables and prepayments 19 34 875
----------------------------------- ------------------ ---------------- --------------
23,212 23,648 16,809
=================================== ================== ================ ==============
(1) Amounts due from joint venture companies represent the
amounts lent by the Company to PEL and EdS, including credit
support provided to suppliers of EdS. Interest on these amounts has
been accrued at rates of between 8 per cent. and 18 per cent. per
annum.
.
b) Group - current 31.12.14 31.12.13 31.12.13
===================================
Restated Originally
stated
===================================
GBP'000 GBP'000 GBP'000
=================================== ========= ========= ===========
Trade receivables 38 160 3,043
----------------------------------- --------- --------- -----------
Other receivables and prepayments 9,562 14,431 6,788
----------------------------------- --------- --------- -----------
9,600 14,591 9,831
=================================== ========= ========= ===========
Other receivables and prepayments include GBP8.6 million RPFL
loan Rurelec Plc Re: (EdS).
c) Company - non-current 31.12.14 31.12.13
=========================================
Originally
stated
=========================================
GBP'000 GBP'000
========================================= ============ ==============
Amounts owed by subsidiary companies(1) 27,505 16,851
----------------------------------------- ------------ --------------
Amounts owed by joint venture
companies(2) 23,094 25,436
----------------------------------------- ------------ --------------
50,599 42,287
========================================= ============ ==============
The amounts owed by subsidiary companies include:
(1) Loans to subsidiaries in Chile (GBP6.6 million) and Peru
(GBP11.1 million) are repayable on demand. The loans to Chile are
currently non-interest bearing. The loans to Chile and Peru bear
Zero per cent interest at rates. The loans Peru are expected to be
recovered once the assets have been sold, which management expect
to occur during 2015. The loans to Chile are considered recoverable
once the projects reach financial close and therefore no provision
has been made against these loans.
(2) The amounts owed by joint venture companies are interest
bearing at rates of between 8 per cent and 18 per cent and are
repayable on demand but are not expected to be fully received
within the next twelve months. During the period the Group received
$5.4 million from EdS in service of the amounts due. GBP8.6 million
(2013 - GBP7.7 million) is secured by a first charge against the
assets of EdS.
d) Company - current 31.12.14 31.12.13
=======================
Originally
stated
=======================
GBP'000 GBP'000
======================= ========== ============
Other receivables and
prepayments 38 34
----------------------- ---------- ------------
38 34
======================= ========== ============
All trade and other receivables are unsecured and are not past
their due by dates. The fair values of receivables are not
materially different to the carrying values shown above.
17 Deferred tax
31.12.14 31.12.13 31.12.13
============================
Restated Originally
stated
============================
GBP'000 GBP'000 GBP'000
============================ ==================== ================ =============
a) Asset at 1 January 2014 - - 389
---------------------------- -------------------- ---------------- -------------
Exchange translation - - (101)
---------------------------- -------------------- ---------------- -------------
Credited to tax expense - - 53
---------------------------- -------------------- ---------------- -------------
Asset at 31 December 2014 - - 341
============================ ==================== ================ =============
The Group deferred tax asset arises principally from tax losses
carried forward in Argentina.
31.12.14 31.12.13 31.12.13
===========================
Restated Originally
stated
===========================
GBP'000 GBP'000 GBP'000
=========================== ==================== ================ =============
b) Liability at 1 January
2014 - - 568
--------------------------- -------------------- ---------------- -------------
Exchange translation - - (148)
--------------------------- -------------------- ---------------- -------------
Credited/(Debited) to tax - - -
expense
--------------------------- -------------------- ---------------- -------------
Asset at 31 December 2014 - - 420
=========================== ==================== ================ =============
The Group deferred tax liability arose from deferred tax
provisions on the fair value adjustments arising on the acquisition
of 50 per cent. of PEL.
18 Inventories
a) Group - Inventories 31.12.14 31.12.13 31.12.13
=============================
Restated Originally
stated
=============================
GBP'000 GBP'000 GBP'000
============================= ======================= =============== =============
Spare parts and consumables - - 227
============================= ======================= =============== =============
Spare parts and consumables are valued at cost.
b) Parent Company - Inventories 31.12.14 31.12.13 31.12.13
=================================
Restated Originally
stated
=================================
GBP'000 GBP'000 GBP'000
================================= =================== =========== ===========
Inventories 16,195 16,195 16,195
================================= =================== =========== ===========
Inventories comprises of two Siemens 701DU Turbines acquired
from IPSA Group plc in June 2013, these will be sold to Central
Illapa SA for use in Chile during 2015.
19 Compensation claim
31.12.14 31.12.13
=========== ====================================================== =================================================
GBP'000 GBP'000
=========== ====================================================== =================================================
Book value
of claim - 19,126
=========== ====================================================== =================================================
As detailed in the 2010 Report and Accounts, on 1 May 2010 the
Bolivian Government nationalised by force Rurelec's controlling
interest in Guaracachi. The Bolivian book value of the net assets
of Guaracachi, together with declared but unpaid dividend for 2009,
was not less than GBP47.0 million and was reported in the 2012
Report and Accounts. The amount of the investment claimed under
Bilateral Investment Treaties as submitted to the Permanent Court
of Arbitration in The Hague, was $142.3 million and the Arbitration
proceedings were held in April 2013. The award amount was for $28.9
million plus interest from 1(st) May 2010 to the date when the
award is paid. As at the 31(st) January the interest amounted to
$6.6 million making the total amount due to Rurelec in settlement
of the claim $35.5 million or GBP21.5 million. The Tribunal
representing the Permanent Court of Arbitration decided not to
award costs to either side. The costs of the Arbitration to Rurelec
were GBP4.6 million.
After further negotiations with the Plurinational State of
Bolivia at the end of April 2014 the total payment to be received
by Rurelec would be $31.5 million or GBP19.1 million. This is a
total loss of GBP34.6 million on the carrying value of the assets
as at 31(st) December 2013 being a loss of GBP29.5 million on the
underlying assets and GBP5.1 million on the legal fees and accrued
interest.
20 Cash and cash equivalents
31.12.14 31.12.13 31.12.13
===================================
Restated Originally
stated
===================================
GBP'000 GBP'000 GBP'000
=================================== ================== ========= ===========
a) Group
----------------------------------- ------------------ --------- -----------
Cash and short-term bank deposits 283 3,730 3,750
----------------------------------- ------------------ --------- -----------
b) Company
----------------------------------- ------------------ --------- -----------
Cash and short-term bank deposits 1 n/a 21
=================================== ================== ========= ===========
Cash and short-term bank deposits are held, where the balance is
material, in interest bearing bank accounts, accessible at between
1 and 30 days' notice. The effective average interest rate is less
than 1 per cent. The Group holds cash balances to meet its
day-to-day requirements.
21 Share capital
31.12.14 31.12.13
GBP'000 GBP'000
In issue, called up and fully paid
======================================== ======== ========
561,387,586 ordinary shares of 2p each
(2013: 557,387,586) 11,228 11,145
======================================== ======== ========
Reconciliation of movement in share capital
Number GBP'000
============================= ============ ========
Balance at 1 January 2014 557,236,492 11,145
----------------------------- ============ ========
Allotment in January 2014 4,151,094 83
----------------------------- ============ --------
Balance at 31 December 2014 561,387,586 11,228
============================= ============ ========
The allotment in January 2014 was at 13.25 pence per share. The
difference between the total consideration arising from shares
issued and the nominal value of the shares issued has been credited
to the share premium account. Costs associated with allotments are
debited to the share premium account.
22 SHARE OPTION RESERVE
31.12.14 31.12.13
GBP'000 GBP'000
============================= ======== ========
Balance at 1 January 2014 107 46
----------------------------- -------- --------
Change for the Year 39 61
----------------------------- -------- --------
Balance at 31 December 2014 146 107
----------------------------- -------- --------
In March 2012, the Company introduced a share option plan and
granted options over 19,525,000 shares at 9.5p per share. Of these
options, 3,875,000 were exercisable from the date of grant.
5,216,667 options vested in 2013, 5,216,666 vested in 2014, the
remuneration committee approved 50 per cent. vesting of these, the
remaining 50 per cent. are dependent of performance targets being
met or being waived at a future date. The remaining 5,216,667
shares vest in March 2015 and are subject to performance
targets.
The Black-Scholes option pricing model has been used to
calculate the fair value of options granted during the year.
Expected volatility in the share price has been based on 20 per
cent..
All of the options granted to directors vest in the three equal
tranches and are subject to performance criteria, as referred to
above.
Options granted to the directors which were outstanding at the
year-end:
31.12.14 31.12.13
---------- ---------- ----------
Number Number
of shares of shares
---------- ---------- ----------
A Morris 1,000,000 1,000,000
---------- ---------- ----------
P Earl 5,000,000 5,000,000
---------- ---------- ----------
E Shaw 4,000,000 4,000,000
---------- ---------- ----------
M Blanco 2,000,000 2,000,000
---------- ---------- ----------
L Coben 650,000 650,000
========== ========== ==========
No options were exercised during the year and the total number
of options outstanding at the year-end was 19,525,000.
23 OTHER RESERVE
On 17(th) December 2014 The High Court approved the reduction in
the share premium account of the company of GBP45,000,000 and the
creation of a special reserve in the accounts of the Group. The
Group had accumulated losses on its profit and loss account of
GBP7,371,683. The existence of these losses prevents the Company
from paying dividends to its shareholders out of future profits
until these losses have been eliminated. The Board considered that
the accumulated losses represented a permanent loss and given the
size of the accumulated losses, there was in the opinion of the
Board no reasonable prospect of the losses being eliminated in the
short term. It was proposed that the permanent loss should be
recognised by eliminating the deficit on the profit and loss
account. This would be achieved by the reduction in the balance on
the Share Premium Account of the Company.
The Company had built up a substantial Share Premium Account
through the issue of shares for cash at values in excess of the
nominal value of those shares. At the time of the High Court
hearing, the balance standing to the credit of the share premium
account was GBP67,835,921. A resolution was proposed and
successfully passed at a General Meeting on 25(th) November 2014 to
reduce the amount standing to the credit of the share premium
account of the Company by GBP45,000,000 from GBP67,835,921 to
GBP22,835,921.
The resolution was subsequently confirmed by the High Court in
the terms proposed at the time by your Board, the effect of the
Capital Reduction was to release part of the amount standing to the
credit of the Share Premium Account of the Company so that
GBP45,000,000 (i) may be used by the Company to eliminate the
deficit on the profit and loss account and (ii) the balance
credited to the distributable reserves of the Company to allow the
Company to pay dividends in due course.
Share issue costs of GBP82,233 have been offset against the
Share Premium account, which is now shown at GBP22,753,689.
The implementation of the Capital Reduction is subject to a
number of criteria which are explained further below.
Capital Reduction - Share Premium Account
Share premium is treated as part of the capital of the Company
and arises on the issue by the Company of shares at a premium to
their nominal value. The premium element is credited to the Share
Premium Account. The Company is generally precluded from the
payment of any dividends or other distributions or the redemption
or buy back of its issued shares in the absence of sufficient
distributable reserves, and the Share Premium Account can be
applied by the Company only for limited purposes.
In particular, the Share Premium Account is a non-distributable
capital reserve and the Company's ability to use any amount
credited to that reserve is limited by the Companies Act. However,
with the confirmed approval of our shareholders by way of a special
resolution and subsequent confirmation by the High Court, the
Company has reduced our Company's share premium account and
credited it to the profit and loss account.
To the extent that the release of such a sum from the Share
Premium Account creates or increases a credit on the profit and
loss account, that sum represents distributable reserves of the
Company subject to the restrictions set out below.
Capital Reduction - Procedure
In order to approve the Capital Reduction, the High Court was
required to be satisfied that the interests of the Company's
creditors will not be prejudiced by the Capital Reduction. The
Company was not required to seek written consent to the Capital
Reduction from its creditors. However, for the benefit of those of
its creditors from whom consent is not required, the Company will
not be capable of making a distribution to shareholders until any
such outstanding obligations have been discharged, and the Company
has given an undertaking to that effect to the High Court. At the
date of the audit report there are some GBP3.4 million of creditors
to be settled. The Board of Directors consider that these amounts
will be settled in the short term and therefore the GBP45 million
remains within a Special Reserve which is non-distributable until
these settlements have occurred.
The Capital Reduction does not affect the number of Shares in
issue, the nominal value per Share or the voting or dividend rights
of any Shareholder.
24 Trade and other payables
31.12.14 31.12.13 31.12.13
========================
Restated Originally
stated
========================
GBP'000 GBP'000 GBP'000
======================== =========== =========== ===========
a) Group - non-current
------------------------ ----------- ----------- -----------
- - -
------------------------ ----------- ----------- -----------
b) Group - current
------------------------ ----------- ----------- -----------
Trade payables 4,046 7,360 8,417
------------------------ ----------- ----------- -----------
Accruals 377 691 466
------------------------ ----------- ----------- -----------
4,423 8,051 8,883
------------------------ ----------- ----------- -----------
c) Company - current
------------------------ ----------- ----------- -----------
Trade payables 4,193 n/a 5,084
------------------------ ----------- ----------- -----------
Accruals 788 n/a 61
------------------------ ----------- ----------- -----------
4,981 n/a 5,145
======================== =========== =========== ===========
25 Tax liabilities
a) Group - non-current 31.12.14 31.12.13 31.12.13
==============================
Restated Originally
stated
==============================
GBP'000 GBP'000 GBP'000
============================== ============================ ============= =============
Tax due in UK - 18 18
------------------------------ ============================ ============= =============
b) Group - current 31.12.14 31.12.13 31.12.13
==============================
Restated Originally
stated
==============================
GBP'000 GBP'000 GBP'000
============================== ============================ ============= =============
UK corporation tax - - -
============================== ---------------------------- ------------- -------------
P.A.Y.E. in UK 28 38 29
------------------------------ ---------------------------- ------------- -------------
VAT in UK (14) - 11
------------------------------ ---------------------------- ------------- -------------
Tax due in Argentina - - 56
============================== ============================ ============= =============
Other taxes due in Argentina
principally VAT - - 343
============================== ============================ ============= =============
P.A.Y.E in Peru 56 27 27
============================== ============================ ============= =============
70 65 466
============================== ============================ ============= =============
This net liability for tax due in the UK is GBP14k relates to UK
PAYE and VAT refund. A PAYE tax liability of GBP56k is also due in
Peru.
26 Borrowings
31.12.14 31.12.13 31.12.13
============================
Restated Originally
stated
============================
GBP'000 GBP'000 GBP'000
============================ ===================== ================ ==============
a) Group - non-current
---------------------------- --------------------- ---------------- --------------
Loan from CAMMESA - - 877
---------------------------- --------------------- ---------------- --------------
Other loans - 622 622
---------------------------- --------------------- ---------------- --------------
- 622 1,499
---------------------------- --------------------- ---------------- --------------
b) Group - current
---------------------------- --------------------- ---------------- --------------
Loan from CAMMESA - - 1,516
---------------------------- --------------------- ---------------- --------------
Other loans 3,164 20,268 23,067
---------------------------- --------------------- ---------------- --------------
3,164 20,268 24,583
---------------------------- --------------------- ---------------- --------------
Group - total borrowings 3,164 20,890 26,082
---------------------------- --------------------- ---------------- --------------
The Group's borrowings are
repayable as follows:
---------------------------- --------------------- ---------------- --------------
Within 1 year 3,164 20,268 24,583
---------------------------- --------------------- ---------------- --------------
In more than 1 year, but
less than 2 years - 311 311
---------------------------- --------------------- ---------------- --------------
In more than 2 years, but
less than 3 years - 311 311
---------------------------- --------------------- ---------------- --------------
In more than 3 years - - 877
---------------------------- --------------------- ---------------- --------------
3,164 20,890 26,082
---------------------------- --------------------- ---------------- --------------
Other loans of GBP3.2 million including accrued interest are
made up of GBP2.9 million loans to Cascade Hydro Limited and
Cascade Hydro Power S.A.C and a further loan of GBP250k to Rurelec
Plc.
Sensitivity analysis to changes in interest rates:
If interest rates on the Group's borrowings during the year had
been 0.5 per cent. higher or lower with all other variables held
constant, the interest expense and pre-tax profits would have been
GBP15,000 lower or higher than reported.
Sensitivity analysis to changes in exchange rates:
Only $205,000 of these loans are denominated in US$. As a
result, the liability to the Group's lenders will change as
exchange rates change. The overall effect on the Group's net equity
which would arise from changes in exchange rates is set out in note
5 above.
The effect on borrowings alone if exchange rates weakened or
strengthened by 10 per cent. with all other variables held constant
would be to reduce or increase the value of the Group's borrowings
and equity by GBP12,000 (2013: GBP1.2 million).
The Group's Joint Venture borrowings are denominated in AR$ and
US$ and are substantially related to specific electricity
generating assets and therefore the effect on the net equity of the
Group is limited.
27 Investments
31.12.13
=================================
GBP'000
================================= =========
Cost at 1 January 2013 18,998
--------------------------------- ---------
Additions during the year
--------------------------------- ---------
Investment in Cascade Hydro
Limited 269
--------------------------------- ---------
Investment in Termoelectrica
del Norte SA 4,190
--------------------------------- ---------
Investment in Central Illapa
SA 33
--------------------------------- ---------
Investment in Independent
Power Corp PLC 4,000
--------------------------------- ---------
Reduction in Investment in
Birdsong (10,455)
--------------------------------- ---------
Reduction in Investment in
Energia para Sistemas Aislados
SA (292)
--------------------------------- ---------
Balance at 31 December 2013 16,743
31.12.14
=================================
GBP'000
================================= =========
Cost at 1 January 2014 16,743
--------------------------------- ---------
Additions during the year
--------------------------------- ---------
Investment in Termoelectrica
del Norte SA - Disposal by
Entity (4,190)
--------------------------------- ---------
Investment in Central Illapa
SA - Disposal by Entity (33)
--------------------------------- ---------
Investment in Electricidad
Andina - Disposal by Entity (63)
--------------------------------- ---------
Cost at 31 December 2014 12,457
--------------------------------- ---------
Impairment Loss in IPC (2,702)
--------------------------------- ---------
Balance at 31 December 2014 9,755
--------------------------------- ---------
The impairment loss relates to the write down of the accrued
income in IPC triggered by the impairment review, which has
resulted in the impairment loss in the year.
At the year-end the Company held the following investments:
1. 50 per cent. (2013: 50 per cent) of the issued share capital
of Patagonia Energy Limited ("PEL"), a company registered in the
British Virgin Islands under registration number 620522. PEL owns
100 per cent of the issued share capital of Energia del Sur S.A.
("EdS"), a company registered in Argentina. EdS is a generator and
supplier of electricity to the national grid in Argentina.
2. 100 per cent. (2013: 100 per cent.) of the issued share
capital of Birdsong Overseas Ltd ("BOL"), a company registered in
the British Virgin Islands, under registration number 688032. BOL
owns 100 per cent of Bolivia Integrated Energy Limited ("BIE"), a
company registered in the British Virgin Islands, under
registration number 510247. Until 1 May 2010, BIE owned, through an
intermediary holding company, 50.00125 per cent. of the issued
share capital of Empresa Electrica Guaracachi S.A. ("Guaracachi"),
a company registered in Bolivia. During 2013 BOL made a loss of
GBP6.8 million due to the accounting for the Bolivian Arbitration
Award received in January 2014.
3. 100 per cent. (2013 - 100 per cent.) of the issued share
capital of Cascade Hydro Limited ("CHL"), a company registered in
England and Wales under registration number 7640689. CHL owns,
through intermediate holding companies, 100 per cent. interest in
Electricidad Andina S.A. and 93 per cent. of Empresa de Generacion
Electrica Canchayllo S.A.C., both being companies registered in
Peru. During 2013 CHL acquired the remaining 30 per cent. minority
stake by way of an exchange of shares. The minority shareholders
received 1,737,116 new Rurelec shares for their holdings in CHL,
issued at a price of 12.5 pence per share, an aggregate
consideration of GBP217,139.
4. 100 per cent. (2013 - 100 per cent.) of Cochrane Power
Limited, a company registered in England and Wales under
registration number 8220905. Cochrane Power Limited owned at the
year-end, through intermediate holding companies, 100 per cent.
interest in Central Illapa S.A. and 100 per cent. interest in
Termoelectrica del Norte S.A., both being companies registered in
Chile.
5. 100 per cent. (2013 -100 per cent.) of Central Illapa SA a
company registered in Chile under registration number 76.14535-9
and owner of the Illapa 255 MW project.
6. 100 per cent. (2013 - 100 per cent.) Termoelectrica del Norte
SA a company registered in Chile under registration number
76.043.067-6 and owner of the Arica project. The investment during
the year has been in the turbine and a transformer during the year
plus development costs of the project totalling GBP4.2 million.
7. 100 per cent. (2013 - 100 per cent.) of Energia para Sistemas
Aislados SA a company registered in Bolivia under registration
number 107782. The investment in this company in Bolivia of
GBP292,000 was written down to zero in 2013 because the assets were
incorporated within the overall settlement with the Plurinational
State of Bolivia with the nationalisation of the assets of Empresa
Electrica Guaracachi SA.
8. 100 per cent. (2013 - 100 per cent.) of the issued share
capital of Independent Power Corporation plc ("IPC"), a company
registered in England and Wales under registration number 3097552.
The investment in IPC was acquired in June 2013. IPC is one of the
United Kingdom's leading power developers and power plant
operators. Since 1995 it has developed and operated thermal and
hydro plants in North America, Latin America, South Africa, Asia
and Europe. In consideration for the acquisition of the entire
issued share capital of IPC, 32,000,000 new Ordinary Shares in
Rurelec PLC were issued to the shareholders of IPC which, at the
Placing Price, represents an implied value for IPC of GBP4
million.
28 JOINT VENTURE
Under IFRS 11 the reporting of jointly controlled entities has
changed such that the use of proportionate consolidation for
arrangements classified as jointly controlled require the use of
the equity method of accounting. The Group's only joint arrangement
within the scope of IFRS 11 is its 50 per cent. investment in
Patagonia Energy Limited ("PEL"), which directly owns Energia del
Sur SA ("EdS") in Argentina. This was previously accounted for
using the proportionate consolidation method under IAS 31.
Management has reviewed the classification of PEL in accordance
with IFRS11 and has concluded that it is a joint venture and
therefore we have accounted for our interest in the PEL joint
venture using the equity accounting method.
IFRS11 has been applied retrospectively in accordance with the
transitional provisions set out in IFRS11. Consequently the
investment in PEL has been restated by aggregating the carrying
amounts of the assets and liabilities that the Group had previously
proportionately consolidated with effect from 1 January 2013. The
group has assessed the carrying amount of the investment for
impairment as at 31 December 2013 and 31 December 2014 and has
concluded that no impairment loss is required. (See also note
29)
The effects on the statements of financial position at 31
December 2013 and 31 December 2014 show an increase in the net
assets of the Group due to the fact that the Joint Venture was
previously proportionately consolidated and so included its share
of the losses in the joint venture whilst under the equity method
it has not included losses in excess of the Group's interest in the
joint venture as detailed in note 2.1.
The investment held by the group in the Argentine Joint Venture
is held at GBP0.3 million at 1 January 2013 and at nil value at 31
December 2013 and 31 December 2014. Although negative net assets
arise when combining the carrying amount of assets and liabilities
of the joint venture management note that as this is caused by the
amounts loaned to the joint venture by the group that therefore the
group do not have an obligation in relation to those negative net
assets and as such the investment is held at a nil value. At the
end of the year accumulated losses in relation to the group's share
of the results of the joint venture total GBP5,490k (2013,
GBP3,320k).
The effects on the statements of financial position at 31
December 2013 and 31 December 2014 were:
Year Year Ended
Ended 31.12.13
31.12.14 GBP'000
GBP'000
----------------------------------- --------------------------- -----------------------
Increase in investments accounted Nil Nil
for using the equity method
----------------------------------- --------------------------- -----------------------
Increase in:
----------------------------------- --------------------------- -----------------------
Rurelec Loans to EdS 4,487 5,739
----------------------------------- --------------------------- -----------------------
Rurelec Loans to PEL 11,338 9,682
----------------------------------- --------------------------- -----------------------
Decrease in:
----------------------------------- --------------------------- -----------------------
Property, plant and equipment (9,065) (11,370)
----------------------------------- --------------------------- -----------------------
Intangible assets (3,168) (3,168)
----------------------------------- --------------------------- -----------------------
Inventories - (227)
----------------------------------- --------------------------- -----------------------
Trade and other receivables (3,812) (3,820)
----------------------------------- --------------------------- -----------------------
Cash and cash equivalents (569) (20)
----------------------------------- --------------------------- -----------------------
Deferred tax liabilities
re Plant 339 79
----------------------------------- --------------------------- -----------------------
Trade and other payables 2,245 832
----------------------------------- --------------------------- -----------------------
Borrowings 1,933 4,315
----------------------------------- --------------------------- -----------------------
Borrowings - non-current 2,032 877
----------------------------------- --------------------------- -----------------------
Current tax liabilities 398 401
----------------------------------- --------------------------- -----------------------
Change in net assets 6,157 3,320
----------------------------------- --------------------------- -----------------------
The effects on the statement of comprehensive income for the
years ended 31 December 2013 and 31 December 2014:
Year Year
Ended Ended
31.12.14 31.12.13
GBP'000 GBP'000
------------------------------------- --------------------------- -------------------------
Decrease in share of profit
from equity accounted investments Nil (319)
------------------------------------- --------------------------- -------------------------
Decrease in:
------------------------------------- --------------------------- -------------------------
Revenue (8,611) (9,651)
------------------------------------- --------------------------- -------------------------
Changes in inventories
------------------------------------- --------------------------- -------------------------
Costs of material 1,118 4,186
------------------------------------- --------------------------- -------------------------
Operating & maintenance expenses 4,461 3,750
------------------------------------- --------------------------- -------------------------
Depreciation, amortisation
and impairment of non-financial
assets 293 528
------------------------------------- --------------------------- -------------------------
Other interest expense and
exchange losses 3,924 4,474
------------------------------------- --------------------------- -------------------------
Tax expense 105 (218)
------------------------------------- --------------------------- -------------------------
Current Year translation difference 880 570
------------------------------------- --------------------------- -------------------------
Change in comprehensive loss
for the year 2,170 3,320
------------------------------------- --------------------------- -------------------------
The application of IFRS 11 did not have a material impact on the
cash flows of the Group and on the earnings per share for the year
ended 31 December 2014.
The following table sets out the effect of restatement on
Rurelec's investment in the joint venture:
Investment in Restated
Joint Venture as at
1.1.13
GBP'000
--------------------- ----------
Rurelec Loans
to EdS (7,549)
--------------------- ----------
Rurelec Loans
to PEL (8,845)
--------------------- ----------
Assets
--------------------- ----------
Non-current
assets
--------------------- ----------
Property, plant
and equipment 15,405
--------------------- ----------
Intangible
assets 3,168
--------------------- ----------
Trade and other
receivables 935
--------------------- ----------
Deferred tax
assets 389
--------------------- ----------
Current assets
--------------------- ----------
Inventories 306
--------------------- ----------
Trade and other
receivables 3,662
--------------------- ----------
Cash and cash
equivalents 79
--------------------- ----------
Non-current
liabilities
--------------------- ----------
Trade and other
payables (210)
--------------------- ----------
Deferred tax
liabilities (568)
--------------------- ----------
Borrowings (1,301)
--------------------- ----------
Current liabilities
--------------------- ----------
Trade and other
payables (2,830)
--------------------- ----------
Current tax
liabilities (53)
--------------------- ----------
Borrowings (2,269)
--------------------- ----------
Investment as
1.1.13 319
--------------------- ----------
The following table sets out the results of the joint venture
operation in Argentina of which the Group has a 50 per cent.
share.
Year Year
ended ended
============================
31.12.14 31.12.13
============================
GBP'000 GBP'000
============================ ========= =========
Revenue 17,222 19,304
---------------------------- --------- ---------
Expenses (11,158) (16,930)
---------------------------- --------- ---------
Non-current assets 19,472 23,812
---------------------------- --------- ---------
Current assets 8,815 6,206
---------------------------- --------- ---------
Non-current liabilities(1) (29,726) (33,364)
---------------------------- --------- ---------
Current liabilities(2) (17,036) (5,600)
---------------------------- --------- ---------
(1) Non-current liabilities includes GBP11.3 million (2013 -
GBP15.4 million) of loans advanced by the Company (see note
16).
(2) Current liabilities includes GBP4.5 million (2013: Nil) of
loans advanced by the Company which have become current (see note
16).
29 Reconciliation of profit before tax to cash generated from
operations
Year Year Year
ended ended ended
===============================
31.12.14 31.12.13 31.12.13
===============================
Restated
GBP'000 GBP'000 GBP'000
=============================== ------------------------- --------------------------- ------------------------
a) Group
------------------------------- ------------------------- --------------------------- ------------------------
Loss for the year before
tax (2,936) (35,726) (39,384)
------------------------------- ------------------------- --------------------------- ------------------------
Net finance income (2,255) (2,747) 928
------------------------------- ------------------------- --------------------------- ------------------------
Adjustments for: depreciation 12 9 444
------------------------------- ------------------------- --------------------------- ------------------------
Unrealised exchange
gains (2,180) (494) 3,267
------------------------------- ------------------------- --------------------------- ------------------------
Movement in share
option reserve 39 61 61
------------------------------- ------------------------- --------------------------- ------------------------
Impairment of goodwill 691 - -
------------------------------- ------------------------- --------------------------- ------------------------
Deferred Consideration - 3,025 -
------------------------------- ------------------------- --------------------------- ------------------------
Adjustment for loss
in Bolivia - 34,384 34,384
------------------------------- ------------------------- --------------------------- ------------------------
Movement in working
capital:
------------------------------- ------------------------- --------------------------- ------------------------
Change in inventories - - 267
------------------------------- ------------------------- --------------------------- ------------------------
Change in trade and
other receivables 5,426 (6,208) (6,467)
------------------------------- ------------------------- --------------------------- ------------------------
Change in trade and
other payables (3,687) 3,716 4,558
------------------------------- ------------------------- --------------------------- ------------------------
Cash used in operations (4,890) (3,980) (1,942)
=============================== ------------------------- --------------------------- ------------------------
Year Year
ended ended
===============================
31.12.14 31.12.13
===============================
GBP'000 GBP'000
=============================== ========================= ===========================
b) Company
------------------------------- ------------------------- ---------------------------
Profit/(loss) for the
year before tax 965 (10,364)
------------------------------- ------------------------- ---------------------------
Net finance income (3,380) 2,276
------------------------------- ------------------------- ---------------------------
Adjustments for:
------------------------------- ------------------------- ---------------------------
Unrealised exchange
(gains)/losses on loans (2,057) 437
------------------------------- ------------------------- ---------------------------
Movement in share
option reserve 39 61
------------------------------- ------------------------- ---------------------------
Write down of investments 2,703 -
------------------------------- ------------------------- ---------------------------
Reclassification of 5,881 -
investment to receivables
------------------------------- ------------------------- ---------------------------
Adjustment for loss
in Birdsong - 10,689
------------------------------- ------------------------- ---------------------------
Movement in working
capital:
------------------------------- ------------------------- ---------------------------
Change in trade and
other receivables (8,384) (1,762)
------------------------------- ------------------------- ---------------------------
Change in trade and
other payables (164) 4,446
------------------------------- ------------------------- ---------------------------
Cash used in operations (4,397) 5,783
=============================== ------------------------- ===========================
30 Financial risk management
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Group's risk management is coordinated to secure the Group's short
to medium-term cash flows by minimising its exposure to financial
markets. The Group does not actively engage in the trading of
financial assets for speculative purposes nor does it write
options. The most significant risks to which the Group is exposed
are described below:
Year Year Year
ended ended ended
================================
31.12.14 31.12.13 31.12.13
================================
Restated Originally
stated
GBP'000 GBP'000 GBP'000
================================ ========= ========= ===========
Current - due within 1 year:
-------------------------------- --------- --------- -----------
Trade payables 4,557 8,117 8,883
-------------------------------- --------- --------- -----------
Borrowings 3,262 20,268 25,049
-------------------------------- --------- --------- -----------
Total due within 1 year: 7,722 28,385 33,932
-------------------------------- --------- --------- -----------
Non-current - due in more than
1 year but less than 5 years
-------------------------------- --------- --------- -----------
Borrowings - 622 1,499
-------------------------------- --------- --------- -----------
a) Foreign currency risk
The Group is exposed to translation and transaction foreign
exchange risk. Foreign exchange differences on retranslation of
these assets and liabilities are taken to the profit and loss
account of the Group. The Group's principal trading operations are
based in South America and as a result the Group has exposure to
currency exchange rate fluctuations in the principal currencies
used in South America. The Group also has exposure to the US$ as a
result of borrowings denominated in these currencies.
b) Interest rate risk
Group funds are invested in short-term deposit accounts, with a
maturity of less than three months, with the objective of
maintaining a balance between accessibility of funds and
competitive rates of return.
c) Capital management policies and liquidity risk
The Group considers its capital to comprise its ordinary share
capital, share premium, accumulated retained earnings and other
reserves.
The Group's objective when maintaining capital is to safeguard
the entity's ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other
stakeholders.
The Company meets its capital needs primarily by equity
financing. The Group sets the amount of capital it requires to fund
the Group's project evaluation costs and administration expenses.
The Group manages its capital structure and makes adjustments to it
in the light of changes in economic conditions and the risk
characteristics of the underlying assets.
The Company and Group do not have any derivative instruments or
hedging instruments. It has been determined that a sensitivity
analysis will not be representative of the Company's and Group's
position in relation to market risk and therefore, such analysis
has not been undertaken.
As set out in note 26, the Group has GBP3.2 million of loans
falling due within 12 months. The directors consider that the Group
will be able to raise sufficient funds from the sale of assets and
from other sources to repay the loans.
The following table sets out when the Group's financial
obligations fall due:
Year ended Year ended
31.12.14 31.12.13
GBP'000 GBP'000
================================== ========== ==========
Current - due within 1 year:
---------------------------------- ---------- ----------
Trade payables 4,557 8,117
---------------------------------- ---------- ----------
Borrowings 3,164 20,268
---------------------------------- ---------- ----------
Total due within 1 year: 7,721 28,385
---------------------------------- ---------- ----------
Non-current - due in more than 1
year but less than 5 years
---------------------------------- ---------- ----------
Borrowings Nil 622
---------------------------------- ---------- ----------
d) Credit risk
Generally, the maximum credit risk exposure of financial assets
is the carrying amount of the financial assets as shown on the face
of the balance sheet (or in the detailed analysis provided in the
notes to the financial statements). Credit risk, therefore, is only
disclosed in circumstances where the maximum potential loss differs
significantly from the financial asset's carrying value. The
Group's trade and other receivables are actively monitored to avoid
significant concentrations of credit risk.
e) Fair values
In the opinion of the Directors, there is no significant
difference between the fair values of the Group's and the Company's
assets and liabilities and their carrying values and none of
Group's and the Company's trade and other receivables are
considered to be impaired.
The financial assets and liabilities of the Group and the
Company are classified as follows:
Loans Borrowings Loans Borrowings
and and and and
payables payables
31 December 2014 receivables at amortised receivables at amortised
GBP'000 cost GBP'000 cost
GBP'000 GBP'000
==================== ============ ============= ============ =============
Trade and other
receivables >
1 year 16,809 - 35,771 -
-------------------- ------------ ------------- ------------ -------------
Trade and other
receivables <
1 year 9,831 - 6,075 -
-------------------- ------------ ------------- ------------ -------------
Cash and cash
equivalents 3,750 - 21 -
-------------------- ------------ ------------- ------------ -------------
Trade and other - - - -
payables > 1 year
-------------------- ------------ ------------- ------------ -------------
Trade and other
payables < 1 year - (8,883) - (5,144)
-------------------- ------------ ------------- ------------ -------------
Borrowings > 1 - (1,499) - -
year
-------------------- ------------ ------------- ------------ -------------
Borrowings < 1 - (24,583) - -
year
-------------------- ------------ ------------- ------------ -------------
Total 30,390 (34,965) 41,867 (5,144)
-------------------- ------------ ------------- ------------ -------------
Loans Borrowings Loans Borrowings
and and and and
payables payables
31 December 2013 receivables at amortised receivables at amortised
GBP'000 cost GBP'000 cost
GBP'000 GBP'000
==================== ============ ============= ============ =============
Trade and other
receivables >
1 year 15,376 - 40,397 -
-------------------- ------------ ------------- ------------ -------------
Trade and other
receivables <
1 year 4,797 - 162 -
-------------------- ------------ ------------- ------------ -------------
Cash and cash
equivalents 6,122 - 4,502 -
-------------------- ------------ ------------- ------------ -------------
Trade and other - - - -
payables > 1 year
-------------------- ------------ ------------- ------------ -------------
Trade and other
payables < 1 year - (4,325) - (699)
-------------------- ------------ ------------- ------------ -------------
Borrowings > 1 - (1,301) - -
year
-------------------- ------------ ------------- ------------ -------------
Borrowings < 1 - (12,313) - -
year
-------------------- ------------ ------------- ------------ -------------
Total 26,295 (17,949) 45,061 (699)
-------------------- ------------ ------------- ------------ -------------
31 Capital commitments
The Group had outstanding capital commitments of GBPNil (2013:
GBP0.7 million) in respect of plant ordered but not delivered at
the year-end.
32 Contingent liabilities
EdS has entered into a long-term maintenance agreement with a
third party who provides for the regular service and replacement of
parts of two turbines. The agreement runs until 2022. The Group's
50 per cent share of the total payable under the agreement until
the year 2022 amounts to US$5.6 million/GBP3.6 million (2013:
US$6.3 million/GBP3.8 million). In the event that EdS wish to
terminate the agreement before 2022, a default payment would become
payable. The Group does not anticipate early termination and
therefore no provision has been made in this regard.
33 Related party transactions
During the year the Company and the Group entered into material
transactions with related parties as follows:
a) Company
i) Paid salaries to key management amounting to GBP0.6 million
(2013 GBP0.6 million)
ii) Paid, to its 100 per cent. subsidiary Independent Power
Corporation PLC ("IPC") a) GBP0.1 million under a "Shared Service
Agreement" b) Provided loans of GBP2.3 million. The loan balance
outstanding at the year end was GBP1.4 million. P.R.S. Earl, A.J.S.
Morris and E.R. Shaw are Directors of IPC.
iii) A.J.S. Morris purchased 50,000 shares for GBP3k on June
16(th) in an open market transaction. He made variousloans to the
Company during the year. At 31.12.2014 there was a balance of
GBP17k due to him, this loan has been repaid after the year
end.
iv) P.R.S. Earl purchased 100,000 shares for GBP6k on June
16(th) in an open market transaction.
v) E.R. Shaw purchased 50,000 shares for GBP3k on June 16(th) in
an open market transaction. She made variousloans to the Company
during the year. At 31.12.2014 there was a balance of GBP11k due to
her, this loan has been repaid after the year end.
vi) Charged interest on loans to its 100% subsidiary Rurelec
Project Finance Ltd ("RPFL") totalling GBP918k. The loan balance
outstanding at the year end was GBP8.6 million.
vii) Charged interest on loans to its 50% owned joint venture
company, Patagonia Energy Ltd ("PEL") amounting to GBP2.0 million.
The loan balances at the year end totalled GBP24.7 million.
Interest on these loans has been accrued at 11.1%.
viii) Received from its joint venture company Energia del Sur
S.A. ("EdS") repayments totalling GBP3.4 million of support
previously given to creditors of EdS. GBP0.4 million of credit
support remains outstanding at the year end.
ix) a) Charged IPSA Group PLC ("IPSA") GBP60k under a "Shared
Service Agreement". b) Repaid GBP125k of deferred consideration on
the 2013 turbine purchase, GBP3.1 million remains outstanding at
the year end. .P.R.S. Earl and E.R. Shaw are Directors of IPSA.
x) Provided loans to its 100 per cent. subsidiary Cochrane Power
Ltd of GBP125k. The total outstanding at the year end was GBP6.6
million.
xi) Provided loans to its 100 per cent. subsidiary Cascade Hydro
Ltd ("CHL") of GBP2.8 million and charged CHL interest of GBP436k.
The interest rate was 0.5 per cent. per month. The total
outstanding at the year end was GBP9.5 million.
b) Group
i) A.J.S. Morris loaned CHL GBP50k and charged interest of
GBP5.1k. The total outstanding at the year end was GBP55.1k.
ii) E. R. Shaw loaned CHL GBP94.4k and charged interest of
GBP3.1k. The total outstanding at the year end was GBP97.5k.
iii) P.R.S. Earl was repaid GBP10k by IPC, the loan was made in
2013.
iv) RPFL accrued interest on amounts due from EdS of GBP0.4
million, the interest rate on the principal was 18.5 per cent., the
effective interest rate (on principal and accrued interest) was
4.4per cent.. The total outstanding at the year end was GBP8.6
million.
34 ASSETS HELD FOR SALE
Assets held for sale relate to all legal entities within Peru
except for Electricidad Andina. These business segments were
reclassified to assets held for sale following the commitment of
the Group's management on 16.09.2014 to restructure its Peruvian
operations by means of sale. Two disposal groups have been
identified, one of which comprises the Canchayllo run of the river
plant with the rest of the assets included in the second group. At
the end of the year the assets were being actively marketed and a
sale is expected by the end of 2015.
2014 2013
GBP'000 GBP'000
------------------------------- -------- --------
Cost:
At 1 January - -
Transfer to assets held
for sale 7,896 -
Carrying amount at 31 December 7,896 -
=============================== ======== ========
Assets classified as held
for sale 2014
GBP'000
Property, plant and equipment 9,558
Inventories 55
Trade and other receivables 8,565
18,178
-----------
Liabilities classified as
held for sale 2014
GBP'000
Trade and other payables 10,158
Deferred tax liabilities 124
10,282
-----------
35 Post balance sheet date events
Since the year-end the Group has continued to develop the
generation projects in Chile whilst seeking local partners for the
two projects under development.
The Group has successfully operated the 5.6MW Canchayllo
run-of-river hydro plant in the Junin province of Peru some 250km
East of Lima, whilst also developing the Colca 12MW run-of-river
hydro plant in the same province as Canchayllo, which has a
Peruvian Government backed power purchase agreement.
On the 15(th) May 2015 the Group entered into a replacement
agreement to sell the run-of-river hydro plant in Peru for GBP4.4
million.
The Group has entered into additional loan facilities during
March and May 2015 amounting to GBP590,000.
The Group has agreed but not contracted a bridging loan facility
of $12 million that will be drawn down in the event that the
arrangements for an alternative one year secured loan from a large
organisation within the South American power industry is not signed
within the time limits required by the company's creditors. It is
expected that the Group will reach satisfactory agreement with this
large organisation such that the proceeds of this loanwill be used
to meet current obligations. The Group expects to repay the loan
from the proceeds of the sale of its Peruvian assets. The loan is
the first stage of a potential cooperation with the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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