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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Renewable Energy Holdings Plc       GB00B063PD00

RENEWABLE ENERGY HOLDINGS PLC

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Renewable Energy : 2013 Results and Notice of AGM

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06/27/2014 | 02:42am EST
Renewable Energy Holdings plc



25 June 2014

Renewable Energy Holdings plc

("the Company" or, together with its subsidiaries "the Group")

2013 Results and Notice of AGM

The Company is pleased to announce its results for the year ended 31 December 2013, which are set out below. The full Report and Financial Statements for the year to 31 December 2013 will be posted to shareholders on Friday 27th June and is available to download now on the Company's website, www.reh-plc.com.

The notice of the Annual General Meeting of the Company ("AGM") will be posted to shareholders on Friday 27th June. The AGM will be held at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP on Wednesday 6th August at 12:00 p.m. BST.

For further information, please contact:

Renewable Energy Holdings plc

David Weir, Non-Executive Chairman

Clive Callister, Chief Operating Officer

Tel: +44 (0) 1624 641199

Strand Hanson Limited

Rory Murphy / James Spinney

Tel: +44 (0) 20 7409 3494



Chairman's statement

for the year ended 31 December 2013

In this report we comment on the financial performance of the Group, explain the funding position and give the current situation as regards the assets held. Despite the changes in personnel the Board remains committed to the previously declared strategy, whereby assets will be developed to improve the prospect of sale of value being obtained for shareholders. Following any sale of assets the net funds will be returned to shareholders.

Financial Performance

The loss for the year was £1.6m compared to a loss of £6.9m in 2012 which included a write down and losses in respect of Carnegie Wave Energy Limited amounting to £4.8m. The reduced loss in 2013 was also due to a fall in 'Administrative expenses' of £0.7m, the running rate of which reduced significantly in the second half of the year although this was offset by higher interest costs of £0.25m.

Funding

As previously reported the Group has two loan facilities with Utilico Investments Limited ("Utilico", its largest shareholder with 28.7% of the equity). The initial facility of £2.5m is fully utilised and bears interest at 15% per annum. The total amount of interest owed is currently approximately £ 1.323 million.  The second facility of £3.25m is being used to finance expenditure incurred in completing the Welsh wind farm project, maintaining the status of the Polish wind farm project and corporate overhead. Interest is at 10% per annum with a success fee linked to the value achieved from the Welsh project.  £2.453 million has been drawn from this facility to date. As announced in December last year Utilico have waived their conversion rights which were granted under the terms of the initial facility. It was agreed with Utilico on 24 June 2014 that the maturity date for the initial facility be extended to 31st July 2015 from 31 December 2014. Utilico is deemed to be a related party under the Aim Rules for Companies.  Clive Callister, the independent director on the board of the Company, considers, having consulted with Strand Hanson that this extension of the repayment date is fair and reasonable so far as shareholders are concerned.   Given the likely timescale of the Welsh wind farm planning process (possibly 15 months from acceptance of the application) a further extension will be requested at the appropriate time.

Wales

During 2013 work continued on the 'Application for an Order granting Development Consent' (Planning Application) for an 81MW wind farm in mid Wales. Most of the year was taken up satisfying requests for extra work and information by some of the Statutory Consultees. The final application is the culmination of several years of detailed work and now covers more than 2000 pages. That work has been completed and the application for development consent was formally submitted on 24 April 2014. However following the Planning Inspectorate's (PINS) advice the application has been withdrawn to make some procedural and technical changes to the draft Development Consent Order and to re-arrange the information presented in the consultation report (amongst other minor changes). The revised application will be resubmitted within weeks, following which the Authority will decide within 28 days whether the application will be accepted for examination. At that stage we will be making a formal announcement. Whilst there is a degree of frustration, we are encouraged that the issues raised are mainly procedural in nature. For more information on the process and the latest status of the project see the Planning Inspectorate website http://infrastructure.planningportal.gov.uk/

Poland

The Group has planning consent for a 30MW wind farm at Kobylany, Poland. As previously reported the Group is looking for a buyer or joint developer, but the long running uncertainty over the Polish government's policy towards "green" energy has meant there has been no progress. Recent announcements by the Polish Energy Minister appear to have temporarily rekindled the Polish market, albeit likely for a brief period. Attempts to achieve a sale will continue, but in the meanwhile ongoing expenditure is severely restricted given the overall uncertainty in this market and the limited cash resources available.

Carnegie Wave Energy Limited (Carnegie)

The Group's holding of 101,241,613 shares in Carnegie is unchanged from December 2012 but following Carnegie Wave Energy Limited (Carnegie)

The Group's holding of 101,241,613 shares in Carnegie is unchanged from December 2012 but following rounds of capital raising it is now 5.9% of their equity assuming conversion of outstanding loans. The equivalent percentage at December 2012 was 6.8%. Carnegie is currently trialling a fifth version of the technology (CETO 5) and fund raising for a further model (CETO 6) is well advanced.

A recent Carnegie presentation gave 2018 as being the earliest date for commercial exploitation of the technology. Previously the Board had indicated that it will consider "in specie" distribution of the Carnegie shares. At the present time the shares form part of the security held by Utilico for the loans extended to the Group so any distribution would only be possible once repayment has been made.

Board Changes

On 15th November Roger Harper stepped down from the Board and was replaced as Chairman by David Weir. We would like to thank Roger for his 3 years of service and for his help during a period of considerable change for the Group.      

David Weir

Chairman

25 June 2014

Consolidated income statement

for the year ended 31 December 2013



Consolidated statement of comprehensive income

for the year ended 31 December 2013


Note

2013

2012



£

£



(000s)

(000s)





Loss for the year


(1,595)

(6,907)





Other comprehensive income/(expense)




Exchange differences on


43

30

translating foreign operations


Consolidated statement of changes in equity

for the year ended 31 December 2013



Attributable to owners of the parent










Share capital

Share premium reserve

Foreign exchange reserve

Share based payment reserve

Merger reserve


Available for sale reserve

Retained earnings

Total

Non-controlling interest

Total equity


£

£



Consolidated statement of changes in equity

for the year ended 31 December 2012



Attributable to owners of the parent










Share capital

Share premium reserve

Foreign exchange reserve

Share based payment reserve

Merger reserve


Available for sale reserve

Retained earnings

Total

Non-controlling interest

Total equity


£

£

£

£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)












Balance at 1 January 2012

696

26,740

(416)

1,134

4,410


             -

(21,095)

11,469

(532)

10,937












Comprehensive expense











Loss for the year

-

-

-

-

-

-

(6,907)

(6,907)

-

(6,907)

Other comprehensive income:











Exchange differences on translating foreign operations

-

-

30

-

-

-

-

30

-

30

Gain arising on revaluation of Available for sale Investment

-

-

-

-

-



Company statement of changes in equity

for the year ended 31 December 2013


Share capital

Share premium reserve

Share based payment reserve

Merger reserve

Available for sale reserve

Retained earnings

Total equity


£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)









Balance at 1 January 2013


696


26,740

1,134

4,410

134

(28,540)

4,574









Comprehensive income/(expense)








Loss for the year

-

-

-

-

-

(1,526)

(1,526)

Other Comprehensive expense








Gain arising on revaluation of available for sale investment

-

-

-

-

(79)

-

(79)

Total comprehensive expense

____

-

_______

-

_______

-

_______

-

_______

(79)

_______

(1,526)

_______

(1,605)

















Transactions with owners


`






Share based payment charge

-

-

-

-

-

-

-


___

______

_____

_____

_____

_______

______

Balance at 31 December 2013


696


26,740

1,134

4,410

55

(30,066)

2,959



Company statement of changes in equity

for the year ended 31 December 2012


Share capital

Share premium reserve

Share based payment reserve

Merger reserve

Available for sale reserve

Retained earnings

Total equity


£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)









Balance at 1 January 2012


696


26,740

1,134

4,410

-

(21,338)

11,642









Comprehensive expense








Loss for the year

-

-

-

-

-

(7,202)

(7,202)

Other Comprehensive income








Gain arising on revaluation of available for sale investment

-

-

-

-

134

-

134

Total comprehensive income / (expense)

____

-

_______

-

_______

-

_______

-

_______

134

_______

(7,202)

_______

(7,068)







Consolidated balance sheet at 31 December 2013



2013

2012


Note

£

£



(000s)

(000s)

Non-current assets




Property, plant & equipment

12

1,505

1,087

Total non-current assets


1,505

1,087





Current assets




Cash and cash equivalents

24

332

160

Trade and other receivables

17

853

937

Available for sale financial asset

15(c)

2,618

2,733

Assets classified as held for sale

26

4,393

4,318





Total current assets


8,196

8,148





Total assets


9,701

9,235





Current liabilities




Trade and other payables

18

1,499

736

Liabilities directly associated with assets classified as held for sale

26

562

495

Borrowings

19(a),27

4,553

3,250

Total current liabilities


6,614

4,481





Non-current liabilities




Borrowings

1,19(a)

500

500

Total non-current liabilities


500

500

Total liabilities


7,114

4,981





NET ASSETS


2,587

4,254





Capital and reserves attributable to equity holders of the parent




Share capital

21

696

696

Share premium reserve


26,740

26,740

Foreign exchange reserve


(343)

(386)

Share based payment reserve


1,134

1,134

Merger reserve


4,410

4,410

Available for Sale reserve


79

194

Retained earnings


(29,597)

(28,002)



3,119

4,786

Non-controlling interests

1

(532)

(532)





TOTAL EQUITY


2,587

4,254







Company balance sheet at 31 December 2013



2013

2012


Note

£

£



(000s)

(000s)

Non-current assets




Property, plant & equipment

12

1,157

882

Investment in subsidiaries

14

6

6

Investment in associate

15

-

-

Total non-current assets


1,163

888





Current assets




Cash and cash equivalents

24

325

94

Trade and other receivables

17

849

932

Available for sale financial asset


1,811

1,890

Assets classified as held for sale


2,906

2,876

Amounts due from subsidiaries

16

1,926

1,880

Total current assets


7,817

7,672





Total assets


8,980

8,560





Current liabilities




Trade and other payables

18

1,458

736

Borrowings

27, 19(a)

4,553

3,250

Total current liabilities


6,011

3,986





NET ASSETS


2,969

4,574





Capital and reserves attributable to equity holders of the company




Share capital

21

696

696

Share premium reserve


26,740

26,740

Share based payment reserve


1,134

1,134

Merger reserve


4,410

4,410

Available for sale reserve


55

134

Retained earnings


(30,066)

(28,540)





TOTAL EQUITY


2,969

4,574



Consolidated and company cash flow statements

for the year ended 31 December 2013


2013

2013

2012

2012

Group

Company

Group

Company


£

£

£

£


(000s)

(000s)

(000s)

(000s)

Operating activities





Loss after tax including discontinued operations

(1,595)

(1,526)

(6,907)

(7,201)

Adjustments for :





Depreciation

2

1

15

2

Foreign exchange gain

-

-

(92)

-

Finance income

(1)

(1)

(10)

(10)

Finance expense

677

677

427

427

Share of loss in associate

-

-

305

261

Loss on partial disposal of associate

-

-

185

185

Loss on disposal in associate

-

-

4,333

4,008

Non cash income

-

(360)

-

(360)

Impairment of Property, plant & equipment

-

-

6

6

Write down of intercompany loan

-

478

-

1,307






Cash flows from operating activities before changes in working capital

(917)

(731)

(1,738)

(1,375)


Decrease in trade and other receivables

188


83

124


320

Increase/(decrease) in trade and other payables

186

49

193

(175)






Cash used in operations

(543)

(599)

(1,421)

(1,230)







Consolidated and company cash flow statements

for the year ended 31 December 2013 (continued)



2013

2013

2012

2012


Note

Group

Company

Group

Company



£

£

£

£



(000s)

(000s)

(000s)

(000s)







Cash flows from operating activities (brought forward)


(543 )

(599)

(1,421 )

(1,230)







Investing activities






Acquisition of property, plant & equipment


(591)

(306)

(1,170)

(232)

Proceeds from disposal of shares in associate


-

-

1,216

1,216

Advances to subsidiaries


-

(221)

-

(1,109)

Receipts from subsidiaries


-

57

-

545

Finance income received


1

1

8

8







Cash flows from investing activities


(590)

(469)

54

428







Financing activities






Repayment of borrowings


(750)

(750)


-

Draw down of borrowings


2,053

2,053

750

750

Finance costs paid


(4)

(4)

(13)

(13)







Cash flows from financing activities


1,299


 1,299

737


     737







Increase/(decrease) in cash and cash equivalents


166

231

(630)

(65)







Cash and cash equivalents at 1 January

24

176

94

746

159







Exchange gains/(losses) on cash and cash equivalents


(4)

-

60

-







Cash and cash equivalents at 31 December

24

338

325

176

94



Notes forming part of the financial statements

for the year ended 31 December 2013

1 Acquisition of Mynydd Y Gwynt Limited

During 2011, the Group paid £2,000 for 2,000 "A" preference shares of Mynydd Y Gwynt Limited ("MYG"). MYG has the right to the land leases at the proposed 81 MW Mynydd y Gwynt wind farm and is responsible for the related planning application. MYG also has 1,000 ordinary shares in issue owned by its founders.

The Group controls MYG due to it owning over 50% of the voting rights and having the power to appoint the majority of the board of directors. In addition, an "A" preference shareholder has to be present for quorum to exist. The "A" preference shares are not entitled to participate in the profits of MYG and therefore the "A" preference shares are not classified as equity resulting in the non-controlling interest being 100% of MYG. MYG has been consolidated from 24 November 2011, the date the Group achieved control.

MYG's assets and liabilities have been recognised in the Group's Consolidated Balance Sheet at fair value. The non-controlling interest in MYG has been recognised at the fair value of the non-controlling interests proportionate share of identifiable net assets. As all expenditure of MYG has been capitalised into property, plant and equipment, there is no profit or loss attributable to the non-controlling interest. 

Under the terms of an existing agreement between the Group and the ordinary shareholders of MYG for which the Group paid £750,000 included in "other receivables and prepayments", the Group has the option to acquire the ordinary shares of MYG once MYG achieves planning permission.

Upon exercising the option, £225,000 per MW is payable to the ordinary shareholders of MYG. Under the terms of the agreement, these ordinary shares will be acquired by the Group on payment of the consideration. This amount is included within "Trade and other receivables" on the Consolidated Balance Sheet.

Prior to the Group gaining control over Mynydd Y Gwynt, Mynydd Y Gwynt's working capital requirements of up to £500,000 were funded by Howard Evans, an original shareholder. This amount is repayable and contingent on receiving planning consent for the Mynydd Y Gwynt wind farm (and will be settled from the consideration paid to the original shareholders).  The board expects this to occur in 2015 and therefore this is classified within non-current liabilities.

2    Loss for the year from continuing operations


2013

2012

The following items of expense have been charged in arriving at the profit or loss before taxation from continuing operations:

£

(000s)

£

(000s)




Staff costs

302

692

Exchange differences

-

25

Depreciation charge

1

2

Operating lease expense

11

26

Audit fees - Renewable Energy Holdings - Company

32

26

Audit fees - Renewable Energy Holdings - Subsidiaries

-

2

Fees paid to the Company's auditor for non-audit services provided to the Company and subsidiaries



-    Tax advice

-

8

-    Review of Interim Financial Statements

2

8

3    Staff costs


2013

2012


£

£


(000s)

(000s)

Staff costs (including Directors) comprise:






Wages and salaries

281

618

Defined contribution pension cost

3

26

Employer's national insurance contributions and similar taxes

18

48


302

692



4 Directors' remuneration


2013

2012


£

£


(000s)

(000s)

Directors' emoluments

247

382

Employer's national insurance

15

34

Defined contribution pension cost

-

17

Key management compensation

268

433

Director's emoluments

2013

2013

2012

2012



£

£

£

£



(000s)

(000s)

(000s)

(000s)



Salaries, bonus' and Directors' fees

Employer pension contributions

Salaries, bonus' and Directors' fees

Employer pension contributions







Sir John Baker

(resigned 30 September 2013)

33

-

60

-

Mr Michael Proffitt

(resigned 31 March 2013)

78

-

250

17

Mr James Smith

(resigned 12 July 2012)

-

-

19

-

Mr Roger Harper

(resigned 15 November 2013)

49


35

-

Mr David Weir

(appointed 12 July 2012)

37


18

-

Mr Clive Callister

(appointed 19 August 2013)

50

6

-

-

Only 50% of David Weir's Directors' fees have been paid the remainder is contingent on returning funds to shareholders.



5 Segment information

The Group had four main reportable segments during the year ended 31 December 2013. The segments at 31 December 2013 were:

·      Head office - this segment represents the operation of the Group's head office facility in the Isle of Man.

·      CETO development - this segment represents the Group's investment in CETO technology development operations in Perth, Western Australia. This technology was sold in 2009 and the amounts in this segment relate to costs associated with the Group's Australian subsidiary and its shareholding in Carnegie Wave Energy Limited.

·      Polish wind farms - this segment represents the wind farm under development at Kobylany.

·      Welsh wind farms - this segment represents the wind farm development project at Sweetlamb.

Year ended 31 December 2013


CETO





Head office

development

Wind farms

Wind farms



Isle of Man

Australia

Poland

Wales

Total


£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)







Total revenue

360

-

-

-

360

Inter-segmental revenue

(360)

-

-

-

(360)

Revenue from external customers

-

-

-

-

-







Administration expenses

(693)

-

-

(1)

(694)

Development expenditure

(38)

-

-

-

(38)

Finance income

1

-

-

-

1

Finance costs

(677)

-

-

-

(677)

Depreciation

(1)

-

-

-

(1)

Loss from discontinued operations

-

-

(186)

-

(186)







Segment loss before tax

(1,408)

-

(186)

(1)

(1,595)







Additions to non-current assets

1

-

144

321

1,198







Investment in wind farms

-

-

4,289

2,255

6,544

Available for sale financial asset

Other assets

-

428

2,618

-

-

104

-

7

2,618

539

Reportable segment assets

428

2,618

4,393

2,262

9,701

Reportable segment liabilities

(6,013)

-

(562)

(539)

(7,114)


5   Segment information (continued)

Year ended 31 December 2012


CETO





Head office

development

Wind farms

Wind farms



Isle of Man

Australia

Poland

Wales

Total


£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)







Total revenue

360

-

-

-

360

Inter-segmental revenue

(360)

-

-

-

(360)

Revenue from external customers

-

-

-

-

-







Administration expenses

(1,387)

-

-

-

(1,387)

Development expenditure

(20)

-

-

-

(20)

Finance income

10

-

-

-

10

Finance costs

(427)

-

-

-

(427)

Other income

24

-

-

-

24

Depreciation

(2)

-

-

-

(2)

Loss from discontinued operations

-

-

(282)

-

(282)

Loss on disposal of interest in associate

-

(4,333)

-

-

(4,333)

Loss on partial disposal of associate

-

(185)

-

-

(185)

Share of losses in associate

-

(305)

-

-

(305)







Segment loss before tax

(1,802)

(4,823)

(282)

-

(6,907)







Additions to non-current assets

1

-

920

277

1,198







Investment in wind farms

-

-

4,097

1,836

5,933

Available for sale financial asset

Other assets

-

339

2,733

-

-

221

-

9

2,733

569

Reportable segment assets

339

2,733

4,318

1,845

9,235

Reportable segment liabilities

(3,986)

-

(495)

(500)

(4,981)

Reconciliation of reportable segment loss, assets and liabilities to the Group's corresponding amounts:

Loss after income tax expense

2013

2012


£

£


(000s)

(000s)

Total loss for reportable segments

(1,595)

(6,907)

Income tax credit/(expense)

-

-

Loss for the year

(1,595)

(6,907)



6   Finance costs


2013

2012


£

£


(000s)

(000s)

Loan arrangement fees

35

25

Loan interest

642

402


677

427

Loan interest includes interest charged under the Utilico loan agreement (see note 27) and the EDF loan facility (see note 20).

7   Income tax credit/(expense)


2013

2012


£

£


(000s)

(000s)

Current tax expense



Income tax on Loss for the year

-

-

Adjustment in respect of prior years

-

-

Total tax

-

-

The reasons for the difference between the actual tax charge/(credit) for the year and the standard rate of income tax in the Isle of Man applied to the loss for the year are as follows:


2013

2012


£

£


(000s)

(000s)

Loss before tax from continuing operations

(1,595)

(6,907)




Expected tax charge based on the standard rate of income tax in the Isle of Man of 0% (2012: 0%)

-

-

Adjustment in respect of prior years

-

-


-

-



8  Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method.

The movement on the deferred tax accounts are as shown below:

Deferred tax asset

2013

2012


£

£


(000s)

(000s)




At 1 January

-

-




Origination and reversal of temporary differences

-

-

At 31 December

-

-

Deferred tax liability

2013

2012


£

£


(000s)

(000s)




At 1 January

-

-




Origination and reversal of temporary differences

-

-

At 31 December

-

-

All of the above temporary differences related to accelerated and decelerated capital allowances.

9      Lossper share


Continuing operations

Discontinued operations

Total operations

Continuing operations

Discontinued operations

Total

operations


2013

2013

2013

2012

2012

2012


£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

Numerator







Loss used in basic and diluted EPS

(1,409)

(186)

(1,595)

(6,625)

(282)

(6,907)








Denominator







Weighted average number of shares used in basic EPS

69,609,501

69,609,501

69,609,501

69,609,501

69,609,501

69,609,501








Weighted average number of shares used in diluted EPS

69,609,501

69,609,501

69,609,501

69,609,501

69,609,501

69,609,501


2013

2012




Total share options in issue (see note 22)

385,700

3,123,200

The share options and convertible debt (see note 19) in issue have not been included in the calculation of diluted EPS because their exercise price is greater than the weighted average share price during the year and therefore their effect would be anti-dilutive. As a result there is no difference between the basic and the diluted loss per share for the periods presented.



10 Parent company results for the year

The Company has taken advantage of the exemption allowed under Part 1 section 3(5) of the Isle of Man Companies Act 1982 and has not presented its own Income Statement in these Consolidated Financial Statements.  The Group loss for the year includes a loss for the Company of £1,526,000 (2012: loss £7,202,000).

11  Operating lease commitments

The total of future minimum lease payments is due as follows:

Group






Land & property rental:

2013

2012


Total

Total


£

£


(000s)

(000s)

Within one year

145

140

Within two to five years

625

603

Over five years

3,278

3,417


4,048

4,160

Land and property rental operating lease commitments at 31 December 2013 together with the majority of the commitments at 31 December 2012 relate to the costs of the land leases at the Kobylany wind farm.

Company






Land & property rental:

2013

2012


£

£


(000s)

(000s)

Within one year

-

-

Within two to five years

-

-


-

-



12   Property, plant and equipment

Group


Plant, machinery & motor vehicles

Assets under construction

Total



£

£

£


(000s)

(000s)

(000s)

Cost





1 January 2012


62

2,363

2,425

Additions


2

1,196

1,198

Disposals


(6)

-

(6)

Reclassification


(28)

(2,530)

(2,558)

Exchange differences


-

57

57






31 December 2012


30

1,086

1,116






1 January 2013


30

1,086

1,116

Additions


-

419

419






31 December 2013


30

1,505

1,535






Accumulated Depreciation






1 January 2012



       (39)


          -


       (39)

Charge for the year


(13)

-

(13)

Elimination on reclassification


26

-

26

Exchange differences


(3)

-

(3)


31 December 2012



       (29)


          -


       (29)




The property, plant and equipment associated with the Polish wind farm project has been classified as assets classified as held for sale, (see note 26).



Property, plant and equipment (continued)

Company

Plant, machinery & motor vehicles

Assets under construction

Total


£

£

£


(000s)

(000s)

(000s)

Cost




1 January 2012

35

1,664

1,699

Additions

1

232

233

Disposals

(6)

-

(6)

Reclassification

-

(1,015)

(1,015)

31 December 2012

30

881

911





1 January 2013

30

881

911

Additions

-

276

276

31 December 2013

30

1,157

1,187





Accumulated Depreciation




1 January 2012

(27)

-

(27)

Charge for the year

(2)

-

(2)

31 December 2012

(29)

-

(29)





1 January 2013

(29)

-

(29)

Charge for the year

(1)

-

(1)

31 December 2013

(30)

-

(30)





Net Book Value




31 December 2012

1

881

882





31 December 2013

0

1,157

1,157

Certain costs eligible for capitalisation with respect to the Group's wind farm projects in Wales and Poland are included above within Assets under Construction.



13     Intangible assets

During the year ending 31 December 2010 the Kobylany permissions and permits were acquired upon the Group's acquisition of the Polish wind development company GAMAR GHL. The amount recognised in the Consolidated Balance Sheet in Intangible Assets for these permissions and permits at 31 December 2011 was £1,565,000. No accumulated depreciation has been recognised at any period as the asset has not yet been brought into use. During 2012 the Intangible asset were reclassified as part of a Disposal Group classified as held for sale, (see note 26).

14   Subsidiaries

The principal subsidiaries of Renewable Energy Holdings plc, all of which have been included in these Consolidated Financial Statements, are as follows:


Country of incorporation

Proportion of ownership interest

Proportion of ownership interest


____________                          

2013

2012

GAMAR GHL Sp. Z o.o.

Poland

100%

100%

REH Intellectual Property Limited

Isle of Man

100%

100%

REH Landfill Gas (Wales) Limited

Isle of Man

100%

100%

REH Verwaltung GmbH

Germany

100%

100%

REH Global Limited

Mynydd Y Gwynt Limited

Isle of Man

United Kingdom

100%

0%

100%

0%

Unless otherwise stated, the shareholders as listed below have share capital consisting solely of ordinary shares, which are held directly by the Group and the proportion of ownership interests held equals the voting rights held by the Group.

GAMAR GHL Sp. Z o.o. is developing a wind farm at Kobylany in Poland.

REH Intellectual Property Limited currently holds a proportion of the Group's investment in Carnegie Wave Energy Limited.

REH Landfill Gas (Wales) Ltd, REH Verwaltung GmbH and REH Global Limited are intermediate
holding companies.

Investment in subsidiary undertakings

2013

2012


£

£


(000s)

(000s)

1 January

6

1,867

Additions (note 2)

-

-

Reclassification

-

(1,861)

31 December

6

6

During 2012 the investment in GAMAR GHL was reclassified as assets classified as held for sale, (see note 26).



15(a) Investment in Associate

Group



2013


2012



£


£



(000's)


(000's)






Carrying amount of Associate brought forward


-


8,578

Impairment of investment in Associate


-


-

Group's share of losses


-


(305)



-


8,273






Proceeds from partial disposal


-


(466)

Loss on partial disposal


-


(185)

Reclassification as Available for Sale Investment (note 15(b))


-


(7,622)






Carrying amount of Associate carried forward


-


-

In 2009 the Group sold its CETO intellectual property for consideration of 232,600,000 shares in Carnegie Wave Energy Limited ("CWE"), a company incorporated in Australia.

The principal activity of CWE is the development of the CETO wave technology. Further details can be found on CWE's website, www.carnegiewave.com.

The 100% owned subsidiary, REH Intellectual Property Limited, held 31,240,613 of CWE shares with the remaining 201,359,387 shares being held by Renewable Energy Holdings plc. The shares were issued on 23 December 2009 and under Australian Stock Exchange rules the shares were restricted for 12 months from the date of issue. The restriction was reflected in the fair value of the consideration by valuing a put option to sell the Carnegie shares in twelve months and deducting this value from the market price of the shares at the date of sale. The fair value of the shares at acquisition was deemed to be approximately 10p.

During the year, the Group's combined holding in CWE was diluted as a result of equity raising exercise by CWE in which the Group did not participate and certain sales of CWE shares undertaken by the Group.

Following a disposal of 113,639,808 shares on 9th July 2012, the Group's combined holding represented less than a 20% interest in CWE, and the Directors considered that the investment no longer met the criteria of an Associate under IAS 28 (see note 15(b)).

During 2011, in accordance with IAS 36 "Impairment of Assets", the Group's investment in associate was impaired to its market value at 31 December 2011 of £8,578,000, based on a share price of AUD$.056.


15(a) Prior year Investment in Associate (continued)

On 9th July 2012 the Group disposed of 113,639,808 shares, being a 15.28% interest, for proceeds of £750,000. Prior to 9th July 2012 the investment in CWE was classified as an associate.

Summarised financial information in respect of the Group's Associate is set out below.


2012


AUD$


(000's)



Total assets

78,581

Total liabilities

964

Net assets

77,617




2012


AUD$


(000's)



Total revenue

107



Total loss for the period

1,819




2012


£


(000's)

Group's share of losses

(305)

15(b) Derecognition of investment in Associate

In 2011, the Group held a 25.8% interest in CWE and accounted for the investment as an associate. Between January and July 2013 the Group disposed of 17,630,000 shares in CWE in a series of transactions and reduced its interest to 23.8%, recognising a loss on disposal of £185,000.

On 9th July 2012, the Group disposed of 113,639,808 shares for proceeds of £750,000. The Group retained the remaining interest as an Available-for-Sale Investment (note 15(c)). This transaction resulted in the recognition of a loss in profit or loss in 2012, calculated as follows:-





£(000's)






Proceeds of disposal




750

Plus: fair value of investment retained (8.52%)




2,539

Less: carrying amount of investment on the date of loss of




(7,622)

significant influence (note 15(a))










Loss recognised




(4,333)

The loss recognised in 2012 comprised a realised loss of £3,135,000 (being the proceeds of £750,000 less £3,885,000 carrying value of the interest disposed of) and an unrealised loss of £1,198,000 (being the fair value less the carrying amount of the 8.52% interest retained).



15(c)       Available for sale Investments carried at fair value


2013

2012


£

£


(000's)

(000's)




Fair value on recognition (note 15(b))

2,733

2,539

Increase/(decrease) in fair value

(115)

194


-

-

Fair value at 31st December

2,618

2,733

At 31st December 2013 the Group continues to hold 101,330,192 shares, being a 5.89% interest in CWE, a former associate (see note 15(b)). The 100% owned subsidiary, REH Intellectual Property Limited, held 31,240,613 of CWE shares with the remaining 70,089,579 shares being held by Renewable Energy Holdings plc.

16     Amounts due from subsidiaries


Company

Company


2013

2012


£

£


(000s)

(000s)

REH Verwaltung GmbH

96

96

REH Global Limited

-

57

Mynydd Y Gwynt

352

249

GAMAR GHL Sp. Z o.o.

1,428

1,478


1,926

1,880

At the 31 December 2013 the Board reviewed the recoverability of the amounts due from subsidiaries and impaired the amount due from GAMAR GHL Sp. Z o.o. by £478,000 (2012: £1,307,000)

17     Trade and other receivables


Group

Company

Group

Company


2013

2013

2012

2012


£

£

£

£


(000s)

(000s)

(000s)

(000s)

Sales tax

38

34

42

37

Accounts receivable

-

-

7

7

Other receivables and prepayments

815

815

888

18     Trade and other payables


Group

Company

Group

Company


2013

2013

2012

2012


£

£

£

£


(000s)

(000s)

(000s)

(000s)

Accounts payable

205

166

71

71

Sales and social security taxes

-

-

-

-

Accruals and other payables

1,294

1,292

655

655


1,499

1,458

736

736



19   Financial assets and liabilities-numerical information

a) Maturity of borrowings

The carrying amounts of borrowings, all of which are exposed to cash flow or fair value interest rate risk, are undiscounted and repayable as follows:

Group

2013

2013

2013

2012

2012

2012


Principal

Interest

Total

Principal

Interest

Total


£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

In less than one year

4,553

673

5,226

3,250

413

3,663

In more than one year but not more than two years

500

-

500

500

-

500








In more than two years but not more than five years

-

-

-

-

-

-








In more than five years

-

-

-

-

-

-


5,053

673

5,726

3,750

413

4,163

Mynydd Y Gwynt Limited holds a £500,000 loan with Howard Evans, founder, Director and Shareholder of Mynydd Y Gwynt Limited. The loan is unsecured, interest free and repayable three months from the date Mynydd Y Gwynt receives planning consent for the wind farm at Sweetlamb. It is the Directors judgement this is likely to fall due for payment in 2015.



19   Financial assets and liabilities-numerical information (continued)

a) Maturity of borrowings (continued)

Company

2013

2013

2013

2012

2012

2012


Principal

Interest

Total

Principal

Interest

Total


£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

In less than one year

4,553

673

5,226

3,250

413

3,663

In more than one year but not more than two years

-

-

-

-

-

-








In more than two years but not more than five years

-

-

-

-

-

-








In more than five years

-

-

-

-

-

-


4,553

673

5,226

3,250

413

3,663

On the 5 February 2013 the Company entered into a loan agreement with Utilico Limited providing a loan facility of up to £1.75 million. On 30 September 2013 REH entered into a further agreement with Utilico Limited to increase the loan facility by  £1.5m to cover the expenditure that is, in the view of the directors, necessary to progress both the Welsh and Polish projects and to provide general working capital. This brings the total facility to £3.25m. The loan facility is subject to an interest rate of 10%.

The original corporate loan of £2,500,000 is subject to an interest rate of 10%, in addition to a commitment fee of 2.5% per annum in the first twelve months, rising to an additional commitment fee of 5% per annum thereafter. The repayment date of the loan is 31 July 2015 and has been included within current liabilities. The lender had the option to convert the loan into shares of the Company at 30.25p at any time until the repayment date. During the year all loan conversion terms have been waived by Utilico Investments Limited.

The Group's loan facility of £750,000 from EDF Energies Nouvelles SA was repaid in the year(see note 20).

b) Currency and interest profile

The currency and interest profile of the Group's and Company's financial assets and liabilities is as follows:

2013

Interest free assets

Floating rate assets

Interest rate

Fixed rate assets

Interest rate

Total assets


£

£


£


£


(000s)

(000s)


(000s)


(000s)

Group







Sterling

1,120

-

-

-


1,120

Australian Dollars

2,618

-

-

-


2,618

Zloty

103

-

-

-


103

Total

3,841

-


-


3,841










19         Financial assets and liabilities-numerical information (continued)

2013

Interest free liabilities

Floating rate liabilities

Interest rate

Fixed rate liabilities

Interest rate

Total Liabilities 


£

£


£


£


(000s)

(000s)


(000s)


(000s)

Group







Sterling

1,837

-

-

4,553

11%

6,390

Zloty

562

-

-

-


562

Total

2,399

-


4,553


6,952















Company







Sterling

1,296



4,553

11%

5,849

2012

Interest Free Assets

Floating Rate Assets

Interest rate

Fixed rate Assets

Interest rate

Total Assets


£

£


£


£


(000s)

(000s)


(000s)


(000s)

Group







Sterling

1,030

-

-

-

-

1,030

Euros

57

-

-

-

-

57

Australian Dollars

2,743

-

-

-

-

2,743

Zloty

221

-

-

-

-

221

Total

4,051

-


-


4,051








Company







Sterling

2,627

-

-

-

-

2,627

Euros

153

-

-

-

-

153

Australian dollars

1,900

-


-


1,900

Total

4,680

-


-


4,680








19   Financial assets and liabilities-numerical information (continued)

c) Fair value

The fair value of the Group's and Company's financial assets and fixed rate liabilities is not materially different to the values shown above.

d) Security and restrictions

At the 31 December 2013 there were no restrictions over the cash balance.

20  Financial Instruments - Risk Management

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

·                              Available for sale financial asset

·                             Trade and other receivables

·                             Cash and cash equivalents

·                             Financial liabilities

·                             Trade and other payables

All financial assets are designated as cash and cash equivalents or loans and receivables and all financial liabilities are measured at amortised cost.

Group

Loans and receivables

Financial liabilities measured at amortised cost


2013

2012

2013

2012


£

£

£

£


(000s)

(000s)

(000s)

(000s)

Current financial assets





Available for sale financial asset

2,618

2,733


-

Trade and other receivables

853

937


-

Cash at bank

332

160


-






Non-current financial liabilities





Borrowings

-

-

500

500

Current financial liabilities





Liabilities directly associated with assets classified as held for sale

-

-

562

495

Trade and other payables

Borrowings

-

-

-

-

1,499
4,553

736

3,250

Total

3,803

3,830

7,114

4,981        



20  Financial Instruments - Risk Management (continued)

Company

Loans and receivables

Financial liabilities measured at amortised cost


2013

2012

2013

2012


£

£

£

£


(000s)

(000s)

(000s)

(000s)

Current financial assets





Intercompany accounts

2,404

2,876

-

-

Available for sale financial asset

1,881

1,890

-

-

Trade and other receivables

849

932

-

-

Cash and cash equivalents

325

94

-

-






Current financial liabilities





Borrowings

-

-

4,553

3,250

Trade and other payables

-

-

1,458

736

Total

5,459

5,792

6,011

3,986

General objectives, policies and procedures

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit Risk

Credit risk arises principally from the Group's cash holdings and other receivables.

The Group's exposure to credit risk arising from other financial assets of the Group, which comprise cash and cash equivalents and other receivables, arises from default of the counterparty. The maximum exposure is equal to the carrying amount of these assets.

The Group's cash holdings are held only with reputable financial institutions. The Group's principal bankers are Barclays Private Clients International Limited. The Group also has deposits with Barclay's Group plc, HSBC plc and ING Bank.

These Banks have the following credit ratings at 31 December 2013 (Standard & Poor's):

Entity

Rating

Barclays Private Clients International

A+

Barclays Group plc

A+

HSBC plc

A+

ING

AA-

The Group trades only with reputable third parties . For this reason the Group does not formally credit check customers before it enters into business with them. Receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant. The Group does not have any overdue debts.



20  Financial Instruments - Risk Management (continued)

Liquidity Risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. See maturity table in note 19a. The Group has structured the repayment of its loans in such a manner that it should generate sufficient cash flows from the sale of the Group's assets to service the debt as repayment falls due.

The Group's financial liabilities comprise trade and other payables, which all fall due within one year. The Directors expect to settle the loan with Utilico Limited in 2015.  The Group's payment policy is to settle trade and other payables in accordance with agreed terms which is typically 30 days .

Interest Rate Risk

The Group does not have any financial instruments with any interest rate risk as the Group has no borrowings at a variable rate of interest.

Currency Risk

Foreign exchange risk arises because the Group has operations located in various parts of the world whose functional currency is not the same as the Company's functional currency.  Although its geographic spread arguably reduces the Group's risk in that it has diversified into several markets, the net assets from such overseas operations are exposed to currency risk giving rise to gains or losses on translation into sterling.  Only in exceptional circumstances will the Company consider hedging its net investments in overseas operations as generally it does not consider that the cash flow risk created from such hedging techniques warrants the reduction in volatility in consolidated net assets.

The table below shows the Group's currency exposures that give rise to the net currency gains and losses recognised in the Consolidated Income Statement.  Such exposures comprise the financial assets and financial liabilities of the Group that are not denominated in the operating ('functional') currency of the operating unit involved. 



20  Financial Instruments - Risk Management (continued)

Currency Risk (continued)

As at 31 December 2013 and 2012, these exposures were as follows:

Foreign currency financial assets and liabilities



Financial assets


Financial liabilities


2013

2012


2013

2012


£

£


£

£


(000s)

(000s)


(000s)

(000s)







Australian dollar

2,618

2,743


-

-

Euro

-

57


-

-

Zloty

103

221


562

495

As at 31 December

2,721

3,021


562

495

Through the financial assets and liabilities that the Group holds in foreign currencies the Group is subject to foreign exchange risk. If Sterling was to fall in value by 5% with all other variables held constant the value of financial assets and liabilities in the Consolidated Balance Sheet would have fallen by £136,000 and £28,000 respectively (2012: £151,000 and £25,000).

The Company is not exposed to any significant foreign currency risks.

The Group's overseas subsidiaries' and former associate's functional currencies are Polish Zlotys, and Euros. The Group has no significant exposure to other currencies.

Capital

The Group considers its capital to comprise its ordinary share capital, share premium, accumulated retained earnings and long term debt. In managing its capital, the Group's primary objective is to provide a return for its equity shareholders through a strategy of realising the Group's assets as explained in the Chairman's report. The Group has historically considered equity and long term debt funding as the most appropriate form of financing the Group's activities but keeps this under review bearing in mind the risks, costs and benefits to equity shareholders of introducing debt finance.

21     Share capital


Authorised


Authorised



2013

2013

2012

2012


Number

£

Number

£

Ordinary shares of 1p each










At the end of the year

300,000,000

3,000,000

300,000,000

3,000,000







Issued and fully paid up


Issued and fully paid up



2013

2013

2012

2012


Number

£

Number

£

Ordinary shares of 1p each





At the beginning of the year

69,609,501

696,094

69,609,501

696,094






Issues for cash during the year

nil

nil

nil

nil






At the end of the year

69,609,501

696,094

69,609,501

696,094



22   Share-based payment

The Company operates a share option scheme for employees.  The only vesting condition being that the individual remains an employee as at the vesting date.

Options granted during the year

There were no options granted during the year (2012: nil).


2013

2013

2012

2012


Number

Weighted average exercise price (pps)

Number

Weighted average exercise price (pps)






Outstanding at the beginning of the year

3,123,000

72.16

3,123,000

61.41

Outstanding at the end of the year

385,700

90.00

3,123,200

72.16

Exercisable at the end of the year

385,700

90.00

2,923,200

76.04





2013

Number of options
1 January 2013

Options granted/

(expired) in the year

Number of options
31 December 2013

Grant date

Exercise price (pps)

Vesting period (yrs)

Option period (yrs)

Founder options(Exercise price increasing by 10% of original price each year)

2,125,700

(1,740,000)

385,700

11/02/05

90.0  

-

10

Staff options (2005)

30,000

(30,000)

-

10/05/05

56.5

3

10

Staff options (2006)

280,000

(280,000)

-

28/03/06

56.0  

3

10

Staff options (2007)

325,000

(325,000)

-

21/08/07

49.5  

3

10

Staff options (2008)

162,500

(162,500)

-

17/12/08

50.0   

3

10

Staff options (2011)

200,000

(200,000)

-

14/02/11

15.5

3

10

Total options 

3,123,200


385,700





2012

Number of options
1 January 2012

Options granted/

(expired) in the year

Number of options
31 December 2012

Grant date

Exercise price (pps)

Vesting period (yrs)

Option period (yrs)

Founder options(Exercise price increasing by 10% of original price each year)

2,125,700


2,125,700

11/02/05

85.0  

-

10

Staff options (2005)

30,000


30,000

10/05/05

56.5

3

10

Advisor options (2006)

-


-

06/04/06

50.0

-

5

Staff options (2006)

280,000


280,000

28/03/06

56.0  

3

10

Staff options (2007)

325,000


325,000

21/08/07

49.5  

3

10

Staff options (2008)

162,500


162,500

17/12/08

50.0   

3

10

Staff options (2011)

200,000


200,000

14/02/11

15.5

3

10

Total options 

3,123,200


3,123,200







23     Reserves

The following describes the nature and purpose of each reserve within owner's equity.

Share capital

Amount subscribed for share capital at nominal value.

Share premium reserve

Amount subscribed for share capital in excess of nominal value

Foreign exchange reserve           

Gains/ losses arising on retranslating the net assets of overseas operations into sterling

Available for sale reserve

Accumulated gains/losses arising on revaluation of available-for-sale financial assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

Share based payment reserve           

Cumulative charge for share options issued.

Merger reserve  

Share premium arising on share for share acquisition.

Retained earnings

Cumulative net gains/ losses recognised in the Consolidated Income Statement.

sterling.

etained earnings                               

24     Notes supporting the Cash Flow Statements

Group

2013

2012


£

£


(000s)

(000s)

Cash and cash equivalents comprises:



Cash available on demand

332

160

Cash classified as Assets of a disposal group classified as held for sale

6

16


338

176

Company

2013

2012


£

£

Cash and cash equivalents comprises:

(000s)

(000s)

Cash available on demand

325

94



25   Discontinued operations

Plan to dispose of wind farm project

On 30 April 2012 the Group announced the orderly sale of its assets and the return of cash to shareholders. The Group is actively seeking a buyer for its Polish wind farm project. It is the Director's judgement that the Polish wind farm project meets the criteria under IFRS 5 "Non Current Assets and Discontinue Operations" to be classified as held for sale.  Accordingly the Group's Polish operations have been presented as discontinued operations.

Analysis of loss for the year from discontinued operations

The results of the discontinued operations (i.e. the Polish wind farm project) included in the consolidated income statements are set out below. The comparative loss and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued in the current year.

Loss from discontinued operations


2013


2012



£


£



(000s)


(000's)






Cost of sales*


(92)


(134)

Expenses other than finance costs


(94)


(148)

Finance costs


-


-

Loss before tax from discontinued operations


(186)


(282)

Tax


-


-

Loss after tax from discontinued operations


(186)


* "Cost of Sales" represents the cost of the land leases at the site of the Kobylany wind farm.

Cash flows from discontinued operations


2013


2012



£


£



(000s)


(000's)






Net cash inflows from operating activities


(372)


1,672

Net cash outflows from investing activities


(114)


-

Net cash in/outflows from financing activities


-


(2,707)

Net cash flows from discontinued operations


(486)


1,035



26  Assets classified as held for sale

The major classes of assets and liabilities of the Polish wind farm project are as follows:-

Loss from discontinued operations


2013


2012



£


£



(000's)


(000's)






Intangible assets - permissions and permits


1,565


1,565

Property, plant & equipment


2,725


2,532

Cash and cash equivalents


6


16

Trade and other receivables


97


205

Assets classified as held for sale


4,393


4,318






Trade and other payables


27     Related party transactions

Mr Michael Proffitt

At 31 December 2013 Mr Michael Proffitt owed the Company £nil, (2012: £12,862).

Utilico Limited

Utilico Limited owns 28.71% of the shares in the Company. Until 12 July 2012 James Smith represented Utilico Limited on the Company's Board and received a Director's fee of £nil (2012: £18,610 per annum). From 12 July 2012 David Weir was appointed as Utilico Limited's representative on the Board and has been awarded £37,000(2012: £14,583) in Director's fees during the year. On 31 July 2010 the company signed a loan agreement with Utilico Limited. The loan amount was for £2,500,000 and subject to an interest rate of 10% per annum. The repayment date of the loan was 31 July 2011 where upon the lender has the option to convert the loan into shares at 30.25p.

On 31 July 2011 the Company renewed the loan agreement with Utilico Limited for an arrangement fee of £50,000. The loan amount is £2,500,000 and is subject to an interest rate of 10% per annum, in addition to a commitment fee of 2.5% per annum in the first twelve months, rising to an additional commitment fee of 5% per annum thereafter. The repayment date of the loan is 31 July 2015 and the lender has the option to convert the loan into shares of the Company at 30.25p at any time until the repayment date.During the year all loan conversion terms have been waived by Utilico Investments Limited

On the 5 February 2013 the Company entered into a loan agreement with Utilico Limited providing a loan facility of up to £1.75 million. To support the Loan, the Company granted to Utilico Limited security over substantially all of its assets, subject to (in the case of certain shares held by the Company in Carnegie Wave Energy Limited and Przedxiebiorstwo GAMAR GHL Sp. Zo.o) security previously granted in favour of EDF Energies Nouvelles SA ("EDF") pursuant to a loan agreement dated 7 February 2013.

The purpose of the Loan was restricted to:

1. Repay £750,000 outstanding under the EDF Loan (following such repayment, the security granted in favour of EDF pursuant to the EDF Loan will be released);

2. Reimburse the Company's cash investment made since 1 May 2013 in the 81MW wind farm development known as Mynydd Y Gwynt ( "MYG");

3. Fund the Company's continued investment in MYG, in particular costs arising in connection with the National Infrastructure Planning application.

27     Related party transactions (continued)

Under the terms of the Loan, the Company will pay a £50,000 arrangement fee and 10% interest per annum on the outstanding balance, such interest to be capitalised and paid on repayment of the Loan.  In addition a success fee will be payable to Utilico as follows:

1.   £4.75 million if the Company receives final planning permission to develop MYG and

i. disposes of its entire interest in MYG;

ii. enters into a joint venture agreement with any party other than Utilico Limited to construct the wind farm;

iii. incurs financial indebtedness owing to any party other than Utilico Limited to construct the wind farm; or

iv. enters into any amalgamation, demerger or merger,

2.              In the event that disposal proceeds exceed £37,500,000 a further fee is levied. The further fee is capped at an additional £5,000,000 and is calculated using the following formula.

Further fee = (A - 37,500,000)/4) + 1,000,000

(Where A is the gross consideration payable to the Company pursuant to a disposal of the Company's interest in MYG.)

In addition, if the Company receives final planning permission to develop MYG and does not dispose of the asset within 12 months of the date of the planning permission being obtained (or such later time as agreed between the Company and Utilico Limited), then Utilico Limited has the right to recall the Loan. In these circumstances, a fee of £4.75 million will be paid to Utilico Limited upon the recall of the Loan. Following a recall of the Loan and the payment of the £4.75 million fee, the Company will remain liable to Utilico Limited for a further fee, payable upon a subsequent disposal of the Company's interest in MYG, such that the total fee (including the fee payable upon the recall of the loan) payable by the Company to Utilico Limited is the greater of the aforementioned £4.75 million and an amount calculated using the formula set out in point 2 above.

On 30 September 2013 REH entered into a further agreement with Utilico Limited to increase the loan facility by  £1.5m to cover the expenditure that is, in the view of the directors, necessary to progress both the Welsh and Polish projects and to provide general working capital. This brings the total facility to £3.25m. The loan facility is subject to an interest rate of 10%.

BDP Orbita Limited

During the year Mr Benjamin Proffitt and Mr Daniel Proffitt were Directors of BDP Orbita Limited. BDP Orbita Limited provided Management Accounting and Financial Consultancy services to Renewable Energy Holdings plc. Mr Michael Proffitt is a close relative of Mr Benjamin Proffitt and Mr Daniel Proffitt. During 2013 professional fees of £42,000 (2012: £180,285) were invoiced to the Company.

Intergroup Balances

The Company has intercompany accounts with subsidiaries as shown in note 16.

(Increase) /decrease of funding in subsidiaries

2013

2012


£

£


(000s)

(000s)

REH Verwaltung GmbH

-

1

REH Global Limited

57

488

Mynydd Y Gwynt

(103)

(136)

GAMAR GHL Sp. z o.o

(478)

(1,275)


(524)

(922)


This information is provided by RNS
The company news service from the London Stock Exchange
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David Thomas Weir Non-Executive Chairman
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