TIDMLCA
RNS Number : 7240F
Low Carbon Accelerator Limited
28 May 2013
28 May 2013
Low Carbon Accelerator Limited
Financial Results for the year ended 30 November 2012
Low Carbon Accelerator Limited ("LCA" or "the Company"), the AIM
quoted specialist low-carbon investment company, announces its
financial results for the year ended 30 November 2012.
In summary:
-- The NAV of the Group as at 30 November 2012 was GBP3.707
million, equivalent to 4.3 pence per Ordinary Share. This equates
to an 84.75% decrease on the 30 November 2011 NAV of 28.2 pence per
Ordinary Share.
-- The Company has agreed to sell substantially all of its
assets to Sterling Planet Inc. under terms of a Sale and Purchase
Agreement (SPA) announced on 15 January 2013.
-- The Company will shortly issue a Circular to shareholders
that will set out proposals for de-listing, a members voluntary
winding-up and the distribution of capital.
Enquiries:
Company Advisor Steve Mahon Tel: +44 (0)20 7631 2630
Grant Thornton Corporate Finance Colin Aaronson, Tel: +44 (0) 20 7383 5100
Melanie Frean
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 NOVEMBER 2012
30 November 30 November
2012 2011 Change
NET ASSET VALUE (GBP'000) 3,707 24,269 (84.7%)
Net asset value per ordinary
share (pence) 4.3 28.2 (84.8%)
Ordinary share price (pence) 3.8 9.0 (57.8%)
Loss per share (pence) (23.9) (19.7) (21.3%)
------------------------------ ------------ ------------ --------
CHAIRMAN'S STATEMENT
I hereby present the sixth and final Annual Report and Accounts
in respect of Low Carbon Accelerator Limited ("LCA") and its
subsidiaries (together the "Group") for the year ended 30 November
2012.
The NAV of the Group as at 30 November 2012 was GBP3.707
million, equivalent to 4.3 pence per Ordinary Share. This equates
to an 84.75% decrease on the 30 November 2011 NAV of 28.2 pence per
Ordinary Share.
After consultation with major shareholders, and in view of the
length of time which LCA has already held its investments and the
current sub-scale nature of the fund, the Board, with the support
of the Investment Manager, has implemented a programme of
realisations to return funds to shareholders. The Company appointed
a specialist secondary market advisor, Cogent Partners, to manage
the process. The Company signed a contract on 21st December 2012 to
sell its principal asset to Sterling Planet Inc.. It is the
expectation of the Board that all remaining funds will be
distributed to shareholders before the end of Q3 2013.
Share Price Performance
During the year ended 30 November 2012, the LCA closing
mid-market share price decreased by 57.8% from 9.00 pence to 3.75
pence. The share price represents a discount of 12.8% to the NAV
per share as at 30 November 2012. Since the year-end the share
price has weakened and at close of trading 22 May 2013 stood at
3.70 pence, which represents a 14.1% discount to the NAV per
share.
A review of the Group's remaining investments can be found in
the Investment Manager's Review, which follows this statement.
Winding up of the Company
The Company has appointed Grant Thornton to undertake a
pre-liquidation review and to prepare a Circular to shareholders.
This Circular, which will set out proposals for de-listing and a
members voluntary winding-up, will be issued shortly. Accordingly,
these financial statements have not been prepared on the going
concern basis.
John Hawkins
Chairman
INVESTMENT MANAGERS REPORT
The period has been dominated by activities relating to the sale
of the assets of LCA. LCA took the decision in April 2012 to sell
its assets and return any realised capital to shareholders. To this
end LCA appointed Cogent Partners on 27 April 2012 as its advisor
to assist with the marketing and sale of the LCA portfolio. LCA and
its advisors undertook a marketing exercise involving approaching a
number of prospective buyers. This exercise concluded on 21st
December 2012 when LCA signed a Sale and Purchase Agreement (SPA)
with Sterling Planet for it to buyback its shares, whilst also
purchasing the Lumenergi and Vigor Renewables shares owned by
LCA.
Whilst LCA has agreed the sale of its principal assets, it has
also taken action to realise any value from the balance of the
portfolio not covered by the SPA. On 3rd January 2013, LCA received
a payment of GBP150,000 from Aldwych2011 Limited, formerly
QuantaSol Limited, as part repayment of the outstanding loan note
to LCA. On 16th January 2013, LCA received a final payment of
GBP88,952 from the sale of Vaperma. The Company also sold its
holdings in Black Mountain Insulation Limited, ResponsiveLoad and
Vykson Limited for nominal amounts. LCA is in the process of
disposing of its remaining assets, namely Saddlehorn LLC and
Aldwych2011 both of which are already fully provisioned. It is
expected that any proceeds from such disposals will be for a
nominal amount.
Low Carbon Investors Limited
CONSOLIDATED INCOME STATEMENT
For the year ended 30 November 2012
Year ended Year ended
30 November 30 November
2012 2011
Note GBP'000 GBP'000
Income
Interest income 36 88
Gain on sale of investment - 230
36 318
Expenses
Investment management fees (420) (1,099)
Net decrease in fair value of financial
assets and financial liabilities at
fair value through profit or loss 11 (19,532) (4,236)
Custodian, secretarial, brokers, Nomad
and administration fees (132) (183)
Provisions made against loan receivables 7 (40) (2,395)
Other operating expenses (474) (157)
Total operating expenses (20,598) (8,070)
Operating loss (20,562) (7,752)
Write-down of non-current financial
assets classified as held for sale 13 - (9,250)
Total comprehensive loss (20,562) (17,002)
Basic loss per share (pence) 10 (23.9) (19.7)
Diluted loss per share (pence) 10 (23.9) (19.7)
All comprehensive loss is attributable to the equity holders of
the Company. There are no minority interests.
All activities are derived from discontinuing activities.
The Group has no recognised gains or losses other than the
comprehensive loss for the year.
The accompanying notes form an integral part of these financial
statements.
2012 2011
Note GBP'000 GBP'000
NON-CURRENT ASSETS
Financial assets at fair value
through profit or loss 11 - 21,500
Long-term loans 12 - 200
- 21,700
CURRENT ASSETS
Cash and cash equivalents 902 2,040
Financial assets classified as
held for sale 13 2,741 -
Other receivables 14 230 593
TOTAL CURRENT ASSETS 3,873 2,633
TOTAL ASSETS 3,873 24,333
CURRENT LIABILITIES
Other payables 15 (166) (64)
NET ASSETS 3,707 24,269
EQUITY
Share capital 16 - -
Share premium 17 52,720 52,720
Reserves 18 (49,013) (28,451)
TOTAL EQUITY 3,707 24,269
Number of ordinary shares ('000) 86,100 86,100
Net asset value (basic and diluted)
per share 4.3 28.2
The accompanying notes form an integral part of these financial
statements.
These financial statements were authorised for issue and
approved by the board of Directors on 24 May 2013.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Retained
GBP'000 Share premium losses Total
GBP'000 GBP'000 GBP'000
As at 30 November 2010 - 52,720 (11,449) 41,271
Total comprehensive loss for
the year - - (17,002) (17,002)
As at 30 November 2011 - 52,720 (28,451) 24,269
Total comprehensive loss for
the year - - (20,562) (20,562)
As at 30 November 2012 - 52,720 (49,013) 3,707
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED CASHFLOW STATEMENT
for the year ended 30 November 2012
Year ended Year ended
30 November 30 November
2012 2011
Notes GBP'000 GBP'000
CASHFLOWS FROM OPERATING ACTIVITIES
Operating loss for the period (20,562) (7,752)
Net changes in fair value of financial
assets and financial liabilities at
fair value through profit or loss 11 19,532 4,236
Gain on sale of investment 11 - (230)
Provisions made against loan receivables 7 400 2,395
Increase in short-term loan receivables (100) -
Decrease/(increase) in other receivables
excluding short-term loans 14 33 (161)
Increase in other payables 15 102 3
NET CASH OUTFLOWS FROM OPERATING ACTIVITIES (595) (1,509)
CASHFLOWS FROM INVESTING ACTIVITIES
Purchase of investments 11 (773) (350)
Sale of investments 11 - 1,230
Short-term loans 14 - (1,800)
Repayment of short-term loans 14 230 500
Long-term loans 12 - (200)
NET CASH OUTFLOWS FROM INVESTING ACTIVITIES (543) (620)
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,138) (2,129)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 2,040 4,169
CASH AND CASH EQUIVALENTS AT END OF
YEAR 902 2,040
The accompanying notes form an integral part of these financial
statements.
1. GENERAL INFORMATION
Low Carbon Accelerator Limited ("LCA" or "the Company") is a
company incorporated and registered in Guernsey on 26 September
2006. LCA is a closed-end investment company with limited liability
under the Companies (Guernsey) Law, 2008, and its shares are
admitted to trading on the AIM market of the London Stock Exchange.
The directors will recommend at the next proposed Extraordinary
General Meeting of the Company that the Company delists from the
London Stock Exchange.
The nature of LCA's operations and its principal activities are
set out in the Directors' report. The address of the LCA's
Registered Office is set out on page 1.
These financial statements are presented in Pounds Sterling
because that is the currency of the primary economic environment in
which the Company and its subsidiaries operate.
2. BASIS OF PREPARATION
The consolidated financial statements incorporate the financial
statements LCA and entities (including special purpose entities)
controlled by LCA (its subsidiaries) (together known as "the
Group"). Control is achieved where the Company has the power to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the
Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
The Company holds two investments via a wholly owned
intermediate holding group structure. The acquisition of equity in
the underlying investments was funded by a long term loan account
through the intermediate holding companies.
3. GOING CONCERN
The directors have proposed to convene an Extraordinary General
Meeting at which it will be proposed to shareholders that the
Company is placed in to voluntary liquidation. Accordingly these
financial statements are not prepared on the going concern basis
and non-current assets have been reclassified as current assets
available for sale.
4. SIGNIFICANT ACCOUNTING POLICIES
The financial statements are made up for the year ended 30
November 2012, and have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union.
The following is a description of the significant accounting
policies of the Group. The accounting policies are consistent with
those applied in the year ended 30 November 2011 and amended to
reflect the adoption of the new standards, amendments to standards
or interpretations which are mandatory for the first time for the
financial year ended 30 November 2012.
Standards, amendments and interpretations to published standards
not yet effective, not early adopted
-- IAS 19 (amended), "Employee Benefits" (effective for periods
commencing on or after 1 January 2013)
-- IAS 28 (amended), "Investments in Associates" (effective for
periods commencing on or after 1 January 2013)
-- IAS 27 (amended), "Consolidated and Separate Financial
Statements" (effective for periods commencing on or after 1 January
2013)
-- IFRS 11, "Joint arrangements" (effective for periods commencing on or after 1 January 2013)
-- IFRS 9, "Financial Instruments - Classification and
Measurement" (effective for periods commencing on or after 1
January 2013)
-- IFRS 12, "Disclosures of interests in other entities" -
(effective for periods commencing on or after 1 January 2013)
-- IFRS 13, "Fair Value Measurement" (effective for periods
commencing on or after 1 January 2013)
-- IFRS 10, "Consolidated Financial Statements" (effective for
periods commencing on or after 1 January 2013)
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the financial statements of the Group.
The financial statements have been prepared under the historical
cost convention as modified by the revaluation of financial assets
and financial liabilities at fair value through profit or loss and
foreign currency derivatives.
The preparation of the financial statements requires the
Directors to make estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and
the disclosure of contingent liabilities at the date of the
financial statements. If in the future such estimates and
assumptions, which are based on the Directors' best judgement at
the date of the financial statements, deviate from actual
circumstances, the original estimates and assumptions will be
modified as appropriate in the period in the which the
circumstances change.
The principal accounting policies adopted are set out below.
(a) Financial assets at fair value through profit or loss
Classification
In prior years, the Group classified its equity investments as
financial assets at fair value through profit and loss and all such
investments were designated as such on acquisition. This included
investments in associated undertakings that were held by the Group
with a view to the ultimate realisation of capital gains.
Financial assets and financial liabilities designated at fair
value through profit or loss at inception were those that are
managed and their performance evaluated on a fair value basis in
accordance with the Group's documented investment strategy. The
Group's policy was for the Investment Manager and the Board of
Directors to evaluate the information about these financial assets
on a fair value basis together with other related financial
information. As explained in policy (b), all financial assets are
classified as financial assets held for sale in the current
year.
Recognition / De-recognition
Purchases and sales of investments are recognised on the date on
which the Group commits to purchase or sell the investment.
Investments are derecognised when the rights to receive cash flows
from the investments have expired or the Group has transferred
substantially all risks and rewards of ownership.
Measurement
Financial assets at fair value through profit or loss are
initially recognised at fair value. Transaction costs are expensed
as incurred in the income statement. Subsequent to initial
recognition, all financial assets at fair value through profit or
loss are measured at fair value.
Gains and losses arising from changes in the fair value of the
financial assets at fair value through profit or loss are presented
in the income statement in the period in which they arise. The net
gain or loss recognised in profit or loss incorporates any dividend
or interest earned on the financial asset.
Fair value estimation
The fair values of unlisted securities are established using
International Private Equity and Venture Capital ("IPEV") valuation
guidelines. The valuation methodology used most commonly by the
Group is the 'price of recent investment' contained in the IPEV
valuation guidelines. Where the investment being valued was itself
made recently, its cost will generally provide a good indication of
fair value. Where there has been any recent investment by third
parties, the price of that investment will provide a basis of the
valuation.
Where there has been a reasonable period of time since the time
of the most recent investment, and it is the Group's view that the
'price of the recent investment' no longer represents the true fair
value of the investment, the Group considers alternative
methodologies in the IPEV guidelines, being principally discounted
cash flows and price-earnings multiples. These methodologies
require management to make assumptions over the timing and nature
of future earnings and cash flows when calculating fair value.
Where the Directors do not believe there has been a material
change (positive or negative) in the fair value of an investment,
the investment is reported at the carrying value at the previous
reporting date.
All recorded values of investments are reviewed quarterly for
any indication of impairment and adjusted accordingly.
Classification of fair value measurements
The Company classifies fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used
in making the measurements. The fair value hierarchy has the
following levels:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
-- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (level
2); and
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level
3).
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement in its entirety. For this purpose, the
significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses
observable inputs that require significant adjustment based on
unobservable inputs, the measurement is a level 3 measurement.
Assessing the significance of a particular input to the fair value
measurement in its entirety requires judgement considering factors
specific to the asset or liability. The determination of what
constitutes "observable" requires significant judgement by the
Company. The Company considers observable data to be that market
data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary, and provided by
independent sources that are actively involved in the relevant
market.
(b) Current financial assets classified as held for sale
Recognition / De-recognition
Investments held as "financial assets at fair value through
profit or loss" are reclassified as "current financial assets
classified as held for sale" on the date when the Group decides to
dispose of the shareholding in full within the next 12 months, or
where there is a pre-agreed sale programme which has been actively
marketed and can be measured at a reasonable price.
Investments held as "financial assets classified as held for
sale" are derecognised when the rights to receive cash flows from
the investments have expired or the Group has transferred
substantially all risks and rewards of ownership.
Measurement
Financial assets classified as held for sale are valued at fair
value in accordance with the measurement provisions of IAS 39:
"Financial Instruments: Recognition and Measurement'.
(c) Revenue recognition
Interest income is accrued on a time basis, by reference to the
principal outstanding and the effective interest rates
applicable.
Dividend income is recognised in the income statement when the
Group's right to receive payment is established.
(d) Expenses
Expenses are accounted for on an accruals basis. Expenses are
charged through the income statement except where they relate to
the raising of capital.
(e) Foreign currency translation
Functional and presentation currency
The performance of the Group is measured in Pounds Sterling
(GBP). The Board of Directors considers GBP as the currency that
most faithfully represents the economic effects of the underlying
transactions, events and conditions, and thus is the functional
currency.
The financial statements are presented in GBP.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement. Translation differences on non-monetary financial assets
and liabilities such as equities at fair value through profit or
loss are recognised in the income statement within the fair value
net gain or loss.
(f) Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangement entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the company after deducting all
of its liabilities.
(g) Loans receivable
Loans receivable that have fixed or determinable payments that
are not quoted in an
active market are classified as 'loans and receivables'. Loans
and receivables are measured at amortised cost using the effective
interest method less any impairment. Interest income is recognised
by applying the effective interest rate, except for short-term
receivables where the recognition of interest would be
immaterial.
(h) Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes party to the
contractual provisions of the instrument.
The Group shall offset financial assets and financial
liabilities if the Group has a legally enforceable right to set off
the recognised amounts and interests and intends to settle on a net
basis.
(i) Cash and cash equivalents
Cash at bank and short term deposits are carried at cost. Cash
and cash equivalents consist of cash in hand, short term deposits
in banks and money market instruments with an original maturity of
three months or less.
(j) Trade and other receivables.
Other receivables do not carry any interest and are short-term
in nature and are accordingly stated at their nominal value as
reduced by appropriate allowances for estimated irrecoverable
amounts.
(k) Trade and other payables
Trade and other payables are not interest-bearing and are stated
at their nominal value.
(l) Investments in associates
An associate is an entity over which the Group has significant
influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is
not control or joint control over those policies.
Investments which fall within the definition of an associate
under IAS 28 (Investments in Associates) are accounted for as
investments held at fair value through profit and loss, as
permitted by that standard. IAS 28 requires certain disclosures to
be made about associates, including summary historical financial
information, even where these associates have been accounted for in
accordance with IAS 39 and held at fair value. The Group has a
number of investments which fall within the definition of an
associate, all of which are held at fair value.
The disclosures required by IAS 28 have not been made. It is
considered that, in the context of the current investment
portfolio, such information would not be useful to users of the
accounts. Information is considered useful if it helps users assess
the net asset value of the Group or the future growth therein. Many
factors are taken into account in determining the fair value of
individual investments, of which historical financial information
is only one. Taken alone, this information would not be useful in
making such an assessment and may even be misleading in some
instances.
5. MATERIAL AGREEMENTS
(a) Under the terms of the Investment Management Agreement dated
6 October 2006, a management fee is payable to Low Carbon Investors
Limited ("LCI") for investment management services. These are paid
quarterly in advance and are equal to 0.625% per quarter of the net
asset value ("NAV") of the Group, as at the last day of the
preceding quarter. On 13 April 2012, but with effect from 1 June
2012, this fee was reduced to 0.5% per quarter of the NAV of the
Group.
In addition, LCI will be paid an annual performance fee equal to
20% of any amount by which the Adjusted NAV of the Group at the
relevant year end exceeds the previous high watermark subject to
performance exceeding the previous high watermark plus a hurdle
rate of 7.5%.
On 30 June 2009 the Investment Management Agreement was amended
to reset the Hurdle Base, on a weighted average basis, following
the issue by the Group of any new Ordinary Shares pursuant to a
placing for cash.
The Company served notice on the Investment Manager on 13 April
2012 terminating the Investment Management Agreement. The Agreement
is therefore due to terminate on 12 April 2013.
(b) Under the terms of the Broker Agreement dated 1 March 2012,
between Jefferies International Limited ("Jefferies") and the
Company, Jefferies is entitled to a retainer fee as appointed
broker of the Company. The retainer fee is at a rate of not less
than GBP25,000 per annum and increasing at a rate of GBP1,000 per
annum for each GBP1 million by which the net assets of the Group
exceeds GBP50 million subject to a maximum fee of GBP75,000 per
annum where the net assets of the Group are equal to, or exceed,
GBP100 million.
(c) Under the Terms of Engagement dated 18 December 2006, the
Company is liable to pay a retainer's fee to Grant Thornton for its
services as nominated adviser. The retainer fee is at a rate of
GBP25,000 per annum payable quarterly in advance.
(d) On 12 April 2012 the Company announced the appointment of
Cogent Partners to assist in the marketing and sale of the LCA
portfolio. Cogent Partners are a leading secondary sell-side
advisor with strong trans-Atlantic presence. Under the terms of
engagement Cogent are due a retainer fee and a success fee. The
success fee of $100,000 has been agreed with Cogent Partners from
the sale of assets to Sterling Planet Holdings, Inc. and is payable
according to the receipt of proceeds under the Sale and Purchase
Agreement with Sterling Planet (note 13).
(e) On 21 January 2013 the Company appointed Grant Thornton to
act in relation to advising the Company on the proposed members'
voluntary liquidation, dividend distribution and delisting of the
Company. Grant Thornton will coordinate the production of a
circular to be sent to Company's shareholders. The Company has
agreed a fee of GBP20,000 for these services.
6. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors of the
Group.
For management purposes, the Group is organised into one
business segment which focuses on achieving medium term capital
growth by investing in early stage low carbon companies.
The Group operates in two main geographical areas. The
geographic split of financial assets as at 30 November 2012
was:
2012 2011
GBP'000 GBP'000
UK 1,645 5,111
USA 1,096 16,389
2,741 21,500
7. PROVISIONS MADE AGAINST LOAN RECEIVABLES
2012 2011
GBP'000 GBP'000
Provision against other receivable
from Low Carbon Accelerator Luxembourg
Limited s.a.r.l. - 20
Provision against other receivable
from Low Carbon Accelerator (Barbados)
ISRL - 49
Provision against short-term loan
to QuantaSol Limited - 500
Provision against interest receivable
on short-term loan to Proven Energy
Limited - 76
Provision against short-term loan
to Proven Energy Limited 1,750
Provision against Vigor loan notes 400 -
Recovery of provision against Vaperma (330) -
Recovery of provision against QuantaSol (30) -
40 2,395
8. TAXATION
The Company has been granted exemption from income tax in
Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of
Guernsey) Ordinance, 1989. As such it will not be liable to income
tax in Guernsey other than on Guernsey source income (excluding
deposit interest on funds deposited with a Guernsey bank). No
withholding tax is applicable to distributions to shareholders by
the Company.
The companies in which the Group has made an investment are
subject to taxation in their relevant jurisdiction.
9. DIVIDENDS
In accordance with the strategy set out in the Company's AIM
Admission Document, no dividend has been declared for the year to
30 November 2012 (2011 - GBPnil).
10. BASIC AND DILUTED EARNINGS PER SHARE
The calculation of basic and diluted return per share is based
on the return on ordinary activities for the year ending 30
November 2012 and on 86,100,000 (2011 - 86,100,000) Ordinary
Shares, being the weighted average number of shares in issue during
the period.
11. INVESTMENTS - DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
2012 2011
GBP'000 GBP'000
Total financial assets at fair value
through profit or loss at beginning
of year 21,500 26,386
Additions during the year
* acquired for cash 773 350
* disposed for cash - (1,230)
* gain on sale of investment - 230
Net changes in fair value through
profit or loss (19,532) (4,236)
Reclassified as current financial
assets classified as held for sale (2,741) -
Total financial assets at fair value
through profit or loss at end of
year - 21,500
The net changes in fair value through profit or loss represents
amounts relating to the revaluation of investments. During the year
the Group made the following provisions and write-downs against
investments:
-- ResponsiveLoad Limited ("RLtec")
On 6 June 2011, LCA announced that it had sold 175,747
Preference B shares in RLtec to Ombu Limited ("Ombu") for a cash
consideration of GBP1.23 million. The previous carrying value of
this stake, GBP4,461,000 was based on the valuation set at the June
2011 investment by Ombu. Subsequent to that investment round, RLtec
failed to make the progress expected and required further funding.
This funding round saw the Company's shareholding in RLtec
significantly diluted, to the extent that it is considered that
these shares no longer have any value. Subsequent to the year end
the Company sold its remaining shares in RLtec to Ombu for
GBP5,000.
-- Sterling Planet Holdings Inc. ("Sterling Planet")
On 9 January 2013 the Company concluded an agreement with
Sterling Planet to sell its entire shareholding in Sterling Planet
back to Sterling Planet for a total consideration of USD 1.76
million, payable in four tranches between January and June 2013
(see note 13). As a consequence, the Company reclassified its
investment in Sterling Planet as 'Current financial assets held for
sale', and an impairment of GBP11,670,560 has been recognised
against the carrying value.
-- Lumenergi Inc. ("Lumenergi")
On 30 January 2012 the Company announced that it had invested a
further USD 200,000 (GBP129,247) into Lumenergi Inc in the form of
a convertible loan. This was followed on
13 March 2012 by an investment of a further USD 1 million
(GBP642,833) into Lumenergi Inc, at which point the convertible
loan note of 30 January 2012 was converted into equity.
On 9 January 2013 the Company concluded an agreement with
Sterling Planet to sell its entire shareholding in Lumenergi to
Sterling Planet for a total consideration of USD 1.76 million,
payable in four tranches between January and June 2013 (see note
13). As a consequence, the Company reclassified its investment in
Lumenergi as 'Current financial assets held for sale', and an
impairment of GBP2,130,102 has been recognised against the carrying
value.
On 8 March 2013 the directors of Lumenergi determined that it
can no longer continue operations and approved an assignment of all
of the Company's assets for the benefit of its creditors and the
subsequent winding up and dissolution of the Company. The directors
and shareholders in Lumenergi approved the assignment of all of the
Company's assets to Development Specialists, Inc. (the "Assignee"),
who will proceed to sell such assets for the benefits of
Lumenergi's creditors. If the Assignee is able to sell Lumenergi's
assets for an amount that exceeds the amount owed by Lumenergi to
its creditors, any excess funds will be distributed to shareholders
in Lumenergi.
The Company's shareholding in Lumenergi is one of the assets
being sold by the Company to Sterling Planet. This assignment of
Lumenergi's assets does not impact the consideration payable by
Sterling Planet to the Company.
-- Vigor Renewables Limited ("Vigor")
On 9 January 2013 the Company concluded an agreement with
Sterling Planet to sell its entire shareholding in Vigor to
Sterling Planet for a total consideration of USD 880,000, payable
in four tranches between January and June 2013 (See note 13). As a
consequence, the Company reclassified its investment in Vigor as
'Current financial assets held for sale', and an impairment of
GBP101,833 has been recognised against the carrying value.
The table below summarises the underlying investments of the
Group. All of the investments are in unquoted companies.
2012 2011
Cost of Cost of
investment investment
in original Value of in original Value of
Currency currency investment currency investment
of investment '000 GBP'000 '000 GBP'000
Sterling Planet,
Inc. USD * - 7,000 13,541
ResponsiveLoad
Limited GBP 2,354 - 2,354 4,461
Lumenergi Inc USD * - 5,973 2,848
Vigor Renewables
Limited GBP * - 650 650
Group total - 21,500
* As explained in note 13, all of the investments of the Group
have been reclassified as 'Current financial assets held for sale'
in the current year.
12. LONG-TERM LOANS
2012 2011
GBP'000 GBP'000
Vigor Renewables Limited ("Vigor") - 200
13. CURRENT FINANCIAL ASSETS CLASSIFIED AS HELD FOR SALE
On 25 April 2012 it was resolved to appoint Cogent Partners to
market the Group's portfolio of investments for sale. After
significant marketing, the best offer received for the portfolio
was from Sterling Planet Holdings Inc. On 9 January 2013 the
Company concluded an agreement with Sterling Planet Holdings Inc
("Sterling Planet") to sell its entire share capital in Sterling
Planet, Lumenergi Inc and Vigor Renewables Limited to Sterling
Planet for total consideration of USD 4.4 million payable in four
tranches between January and June 2013. As a consequence, the
Company has reclassified these investments as 'Current financial
assets classified as held for sale'.
Two tranches of USD 1 million were received on 7 March 2013 and
7 May 2013 with a further USD 1.2 million received on 17 May 2013.
A final payment of USD 1.2 million is due to be received on 17 July
2013. This remaining payment is dependent on Sterling Planet
receiving proceeds from the sale of core assets, the timing of
which is uncertain.
The table below summarises the breakdown of the total
consideration of USD 4.4 million between the relevant underlying
assets. All of the investments are in unquoted companies.
2012 2011
Cost of Price being
investment paid by
in original Sterling Value of Value of
Currency currency Planet investment investment
of investment '000 '000 GBP'000 GBP'000
Sterling Planet,
Inc. USD 7,000 1,760 1,096 -
Lumenergi Inc USD 7,173 1,760 1,096 -
Vigor Renewables
Limited GBP 650 880 549 -
Group total 2,741 -
In the prior year Proven Energy was classified as 'Non-current
financial assets held for resale' on the basis that it was the
Board's intention to seek to reduce the Company's interest to a
minority shareholding. On this basis, and in accordance with FRS5,
the Group did not consolidate the results of Proven Energy and this
investment was treated as held for resale. Proven Energy was
subsequently placed into receivership on 16 September 2011. During
the year ended 30 November 2011 a full provision was made of
GBP9.25 million was made against the carrying value of the
Company's investment in Proven Energy. The investment was
subsequently sold for a nominal consideration by the receiver, and
as such realised no shareholder value.
14. OTHER RECEIVABLES
2012 2011
GBP'000 GBP'000
QuantaSol Limited 150 350
Vaperma 70 -
Vigor - 200
Prepayments 10 15
Other receivables - 28
230 593
On 7 July 2011, the Company announced that Quantasol Limited
("Quantasol") had completed an agreement to sell its core assets,
including intellectual property rights, to JDS Uniphase in a cash
transaction. The final tranche of deferred consideration on this
transaction was received by the Company in January 2013.
The amount due from Vaperma is a final amount receivable from
the liquidator of Vaperma. This amount was received in January
2013.
The loan to Vigor is secured and accrues interest at a rate of
8% per annum and were repayable in two tranches of GBP200,000 on 31
March 2012 and 26 April 2013. Vigor was unable to repay the tranche
due on its due date, and this balance remains outstanding. The
Company has therefore made a full provision against all amounts due
from Vigor.
15. OTHER PAYABLES
2012 2011
GBP'000 GBP'000
Trade creditors - 54
Accruals 166 10
166 64
16. SHARE CAPITAL
Authorised No. GBP'000
Ordinary shares of no par value Unlimited -
Issued and fully paid
Ordinary shares of no par value 86,100,000 -
No.
Balance as at 30 November 2011 86,100,000
Issued (ordinary shares of no
par value) -
Balance as at 30 November 2012 86,100,000
The Company has one class of ordinary shares which carry no
right to fixed income.
17. SHARE PREMIUM
GBP'000
Balance as at 30 November 2011
and 2012 52,720
18. RECONCILIATION OF MOVEMENT IN RESERVES
GBP'000
Balance as at 30 November 2011 (28,451)
Total comprehensive loss (20,562)
Balance as at 30 November 2012 (49,013)
19. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial
risks: market price risk, credit risk, interest rate risk, currency
risk and liquidity risk. The Group's overall risk management
programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Group's
financial performance. The risk management policies employed by the
Group to manage these risks are discussed below:
Market price risk
All of the Group's "Financial assets at fair value through
profit or loss" and "Current financial assets classified as held
for sale" on the balance sheet are classified as Level 2 in the
fair value hierarchy.
Credit risk
Subsequent to the year end, the Group became exposed to credit
risk in respect of its cash and cash equivalents, arising from
possible default of the relevant counterparty, with a maximum
exposure equal to the carrying value of those assets. The credit
risk on liquid funds is limited because the counterparties are
banks with high credit-ratings assigned by international
credit-rating agencies. The Group monitors the placement of cash
balances on an ongoing basis.
The Group is exposed to the credit risk of Sterling Planet as
prospective purchaser of the portfolio. The maximum exposure to
this risk is equal to the carrying value of the Group's 'Current
financial assets held for sale'.
The Group is also exposed to credit risk in respect of the loans
granted to its investments and subsidiaries, with a maximum
exposure equal to the value of the loans advanced. The Group
manages the credit risk of third party borrowers by regularly
reviewing their underlying financial performance.
Interest rate risk
A significant proportion of the Group's financial assets and
liabilities are non-interest bearing. As such, the Group is not
subject to significant amounts of risk due to fluctuations in the
prevailing levels of market interest rates.
The following table summarises the Group's exposure to interest
rate risks.
Interest Non-interest
bearing bearing Total
As at 30 November 2012 GBP'000 GBP'000 GBP'000
Assets
Cash and cash equivalents 902 - 902
Financial assets classified
as held for sale - 2,741 2,741
Trade and other receivables - 230 230
902 2,971 3,873
Liabilities
Trade and other payables - (166) (166)
Total interest gap 902 2,805 3,707
As at 30 November 2012, if interest rates had been 200 basis
points higher with all other variables held constant, profit after
tax for the year and net assets would have been GBP18,000 higher,
mainly as a result of higher interest income on floating rate
deposits.
Interest Non-interest
bearing bearing Total
As at 30 November 2011 GBP'000 GBP'000 GBP'000
Assets
Financial assets at fair
value through profit or
loss - 21,500 21,500
Long-term loans 200 - 200
Cash and cash equivalents 2,040 - 2,040
Trade and other receivables 550 43 593
2,790 21,543 24,333
Liabilities
Trade and other payables - (64) (64)
Total interest gap 2,790 21,479 24,269
Currency risk
The Group has assets denominated in currencies other than GBP,
the functional currency. The Group is therefore exposed to currency
risk, as the value of the assets and liabilities denominated in
other currencies will fluctuate due to changes in exchange rates.
The Group does not enter into hedging contracts in relation to such
investments.
The table below summarises the Group's exposure to currency
risks at the period end.
2012 2011
Amount Amount
in currency in currency
Currency '000 GBP'000 '000 GBP'000
Assets
Financial assets
at
fair value
through profit
or loss USD - - 25,780 16,389
Financial assets
classified
as held for
sale USD 4,400 2,741 - -
As at 30 November 2012, if foreign currency rates against the
value of GBP had been 30% higher or 30% lower with all other
variables held constant, profit after tax for the year and net
assets would have been GBP822,000 lower or GBP822,000 higher
respectively, as a result of higher/lower exchange rates on assets
denominated in currencies other than GBP.
Liquidity risk
The Group's financial instruments include investments in
unlisted securities, which are not traded in an organised public
market and may generally be illiquid. As a result, the Group may
not be able to liquidate quickly its investments in these
instruments at an amount close to fair value in order to respond to
its liquidity requirements or to specific events.
As at 30 November 2012 the Group had a cash balance of
GBP902,000, and total liabilities of GBP166,000. The Group has no
gearing.
Capital Management
The Group monitors capital which comprises all components of
equity (i.e. share premium and revenue reserves). The Group's
objective when maintaining capital is to safeguard the Group's
ability to continue as a going concern, so that it can continue to
provide returns for shareholders
The Group is not subject to any external capital requirements.
As at 30 November 2012 the Group had no borrowings.
20. POST BALANCE SHEET EVENTS
a. On 9 January 2013 the Company entered into a stock purchase
agreement with Sterling Planet Holdings Inc. to sell its entire
shareholding in Sterling Planet, Lumenergi and Vigor to Sterling
Planet for a total consideration of USD 4.4 million, payable in
four tranches between January and July 2013. These amounts have
been reflected in the carrying valuation of the respective
investments. The first three tranches of this payment have been
received by the date of these financial statements (see note
13).
b. On 15 January 2013 the Company announced that it had received
GBP150,000 as a deferred receipt from its sale of QuantaSol Limited
to JDS Uniphase in July 2011.
21. FINANCIAL COMMITMENTS
As at 24 May 2013, the Group has no commitments to companies in
its portfolio.
22. RELATED PARTY TRANSACTIONS
a. The Company has appointed Low Carbon Investors Limited, a
company in which David Nussbaum has a minority shareholding and
provides advisory services, to provide investment management
services. During the year the Group paid a management fee to Low
Carbon Investors Limited of GBP420,000 (2011 - GBP1,099,000).
b. Andrew Neil Munro, a director of the Company, is an employee
and director of Ogier Fiduciary Services (Guernsey) Limited. Ogier
Fund Administration (Guernsey) Limited provides administration
services to LCA. During the period the LCA paid fees of GBP80,000
(2011 - GBP134,000) to Ogier Fund Administration (Guernsey)
Limited.
The financial information set out in this announcement does not
constitute the LCA's statutory accounts for the year ended 30
November 2012 but is derived from those accounts. A copy of the
annual report and accounts will be made available on the Company's
website www.lowcarbonaccelerator.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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