Alternative Energy Limited Interim Results for the period to 30 June 2013 (7775D)

TIDMALR

RNS Number : 7775D

Alternative Energy Limited

01 April 2014

For immediate release 1 April 2014

ALTERNATIVE ENERGY LIMITED

("AEL" or "the Company")

Interim Results for the six month period to 30 June 2013

The Board of Alternative Energy Limited (AIM: ARL.L) announces its Unaudited Interim Condensed Consolidated Financial Information for the six month period from 1 January 2013 to 30 June 2013.

Highlights

- Distributorship agreements with both PT Graha Rajawali Pratama ("GRP") and the Jembo Cable Group for lighting products.

- A revenue producing pipeline is being developed in both lighting, next generation solar technology and consulting engineering.

- An agreement for up to US$10m worth of 5% Convertible Notes due in 2017 has been reached with Advance Capital Partners and the Advance Opportunities Fund.

- the Company may issue up to US $10million in up to four tranches of Notes, convertible into shares in the company.

- Each tranche of US$2.5 million is further sub divided into sub tranches of US$50,000 (in the case of the first two tranches) or $100,000 (in the case of the third and fourth tranche).

   -    Each of the Note issue bears interest at 5% per annum and matures 36 months after its issue.

- The Notes are convertible at either 135% of the average trading prices of the Company's shares for the forty five days prior to the issue of the relevant tranche, or 80% of the average trading price for any three consecutive trading days in the forty five days prior to conversion.

- New markets have been opened for the new generation of street lights from Thailand, Ukraine and Iraq.

   -     There is a pipeline of new technologies and patents being filed.

Chairman's Statement

The interim financial statements presented in this review are now released some time after the publication of the results for the financial period from 1 September 2011 to 31 December 2012, in which I reported on the situation as I saw it as at 28 June 2013. This delay was the result of the Company awaiting clarification in respect of a number of initiatives and discussions, in particular relating to its working capital and revenues. The extended suspension of the Company's shares is regretted, but was considered necessary as the Company has been engaged in a number of discussions about its future during the period of the last six months.

The majority of 2013, was spent securing, finalising and pursuing the Company's arrangements with PT Mega Urip Pesona ("MUP"), which were signed on 12 April 2013. Since that time the Company has been engaged in a number of projects and competitive bids in Indonesia and has also entered into distributorship arrangements with both PT Graha Rajawali Pratama ("GRP") and the Jembo Cable Group in respect of its lighting products. These arrangements are intended to ensure that the Group finally starts to develop a revenue producing pipeline both in lighting, next generation solar technology and consulting engineering. The Company has recently received its first order from GRP for street lights and is in discussions with Jembo Cable with a view to potentially establishing an assembly plant in Indonesia which will enable the Group to participate in larger street lighting contracts.

Whilst the initial solar farm projects with MUP have been delayed due to policy shifts inside Indonesia the Company is continuing to work with MUP on other projects which will utilize the Company's eRoof technologies and where the Company has an advantage. Both MUP and the Company are finding that the overall market for solar farm energy generation using conventional panels is growing very slowly and the Company's resources are best directed at projects where its technologies give it an advantage.

The Company did not complete in full its fund raising from the Preferential Offering and the commitment for US$1 million, as announced on 28 March 2013 never materialised, but the Company has partially made up for that by placing a further 50 million shares for cash at 0.5 cents per share. I am also continuing to support the Company with my convertible loan agreement in respect of which nearly four million US dollars has been drawn out of seven million.

Having adequate working capital in order to enable management to focus on revenue generation and operational matters will be critical in enabling the Company to capture the new opportunities which are currently being harvested. In this respect, the Company has agreed to engage in a program for the issue of up to US$10m worth of 5% convertible Notes due in 2017 ("Notes") with Advance Capital Partners and the Advance Opportunities Fund. Under this program the Company may issue up to four tranches of Notes, convertible into shares in the company. Each tranche of US$2.5 million is further sub divided into sub tranches of US$50,000 (in the case of the first two tranches) or $100,000 (in the case of the third and fourth tranches).

Each of the Notes issue bears interest at 5% per annum and matures 36 months after its issue. The Notes are convertible at either 135% of the average trading prices of the Company's shares for the forty five days prior to the issue of the relevant tranche, or 80% of the average trading price for three consecutive trading days in the forty five days prior to conversion. The Company may decide to decline to draw down Notes in tranches 2,3 or 4 and may also redeem the Notes rather than convert them in the event that the Conversion price is less than 65% of the average closing price of the shares in the forty five day prior to conversion. It is a condition of our ELN Programme that we enable the Company's shares to trade on the SETS system in London, which we hope will add liquidity to our shares and make it easier for overseas investors to trade.

It is fair to say that the success of the Company's strategies and its future will depend on the generation of adequate revenues from its current efforts in Indonesia and elsewhere, and on the management being able to turn their attention from fundraising to operational matters and sales. If these proceed as contemplated in our various arrangements, then the Company will be able to widen its markets and the scope of its activities. It is also fair to say that the Company has probably spent too much time focusing on Indonesia over the past couple of years and therefore strategically the Company is expecting to broaden its net and follow up on outstanding business opportunities and invitations from other markets during 2014.

The whole of the team at the Company has worked extremely hard to meet client requirements in a difficult and changing environment, which has seen us competing with much larger companies. We have good reason to be confident, but many decisions remain outside our control.

In terms of AEL's technology, Dr Tay and Dr Goh continue to advance and refine the Company's products, and new patents continue to be granted, including, most recently two patents in Japan. The Company has a pipeline of new technologies, in respect of which it is ready to file patents, including further versions of the eRoof and certain energy storage solutions, but we have been cautious in incurring further fees in respect of intellectual property matters until our working capital and revenue position is stronger. In this respect, we will probably take advantage of the availability of the ELN Programme to ensure we protect key technologies.

In terms of the actual deployment of our products and technology we are now receiving orders for our new generation of street lights from our Indonesian distributors and have opened new markets in Thailand, Ukraine and Iraq. We are also processing our first orders for our latest low cost "G" variant eRoof from Indonesia and have also begun to market this, together with the updated "eLive" housing and "eLive" system house power generation system, as an alternative to diesel gensets in the same markets. The fall in overall solar cell prices has, as reported in my last statement, made these products much more price competitive.

Myself and the AEL team will continue to do our utmost to ensure that our vision for the future of green energy is met, and there are signs across Asia, and particularly in Indonesia and China that green energy is now really emerging as an accepted and viable alternative to fossil fuels, our success will inevitably depend also on the performance by our local partners.

As I said in my last statement, the coming months will be a critical time for the Company but I continue to believe that our business sector offers more opportunities for sustainable business growth than almost any other, and I could not wish for a better team with whom to meet the current challenges.

Christopher Nightingale

A copy of the interims is available on the Company's website www.alternativeenergy.com.sg

For further information, please contact:

 
ALTERNATIVE ENERGY LIMITED 
 Richard Lascelles, Independent Non-executive Director  Tel: +44 (0) 20 7408 1067 
  Eric Goh, Executive Director                           Tel: +65 68737782 
 
BEAUMONT CORNISH LIMITED 
 Roland Cornish and Emily Staples                       Tel: +44 (0) 20 7628 3396

As published:

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARIES

STATEMENT BY DIRECTORS

In the opinion of Directors,

The unaudited interim condensed consolidated financial information of Alternative Energy Limited ("the Company") and its subsidiaries ("the Group") which comprise the statements of financial position of the Group as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group and the related notes for the financial period from 1 January 2013 to 30 June 2013 are drawn up in accordance with the provision of the Singapore Companies Act, Cap. 50 and International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group as at 30 June 2013 and of the results, changes in equity and cash flows of the Group for the financial period from 1 January 2013 to 30 June 2013.

As stated in Note 2, the management has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore, continue to adopt the going concern basis in preparing the financial information of the Group for the six months period ended 30 June 2013.

On behalf of the Board of Directors

   ______________________________                                    ______________________________ 
   Christopher Nightingale                                                          Dr Goh Swee Ming

Director Director

Singapore

31 March 2014

REPORT ON REVIEW OF THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARIES FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2013

Introduction

We have been engaged to review the accompanying unaudited interim condensed consolidated financial information of Alternative Energy Limited (the "Company") and its subsidiaries (the "Group"), which comprises the statement of financial position, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows and the related notes for the six months ended 30 June 2013. Our responsibility is to express a conclusion on the unaudited interim condensed consolidated financial information based on our review.

This report is made solely to the Board of Directors and we do not accept or assume responsibility to any party other than the Board of Directors, for our works, for this report, or for the conclusion we have formed.

Directors' Responsibilities

The interim financial report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with IAS 34 "Interim Financial Reporting", and the rules of the London Stock Exchange for companies trading securities on the AIM, a market operated by the London Stock Exchange which require that the interim financial report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial information in the interim financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of Review

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying unaudited interim condensed consolidated financial information are not presented fairly, in all material respects, in accordance with IAS 34.

Material Uncertainty Regarding Continuation as a Going Concern

We draw your attention to Note 2 which indicates the Group has been incurring losses for the current and past periods. The Group has taken measures as described in Note 2 to secure the necessary funding to meet its daily operation needs. If these measures described in Note 2 fail to materialise, this could indicate an existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. Our conclusion is not qualified in respect of this matter.

BDO LLP

Public Accountants and

Chartered Accountants

Singapore

31 March 2014

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                               1.1.2013     1.3.2012      1.9.2011 
                                                     to           to            to 
                                              30.6.2013    31.8.2012    31.12.2012 
                                              Unaudited    Unaudited       Audited 
                                      Note          US$          US$           US$ 
 
Revenue                                           5,661       11,290    12,324,954 
 
Cost of sales                                   (3,924)      (8,644)  (12,575,636) 
 
Gross profit/(loss)                               1,737        2,646     (250,682) 
 
Other income                                      3,178          748        10,869 
 
Administrative expenses                       (406,379)    (458,506)   (1,686,457) 
 
Other expenses                                (662,353)    (765,422)   (3,326,528) 
 
Finance cost                                          -      (2,679)             - 
 
Share of loss from equity-accounted 
 joint venture                         7              -     (44,790)     (118,675) 
 
Loss before income tax                 3    (1,063,817)  (1,268,003)   (5,371,473) 
 
Income tax                             4              -            -             - 
 
Loss for the financial 
 period                                     (1,063,817)  (1,268,003)   (5,371,473) 
                                            -----------  -----------  ------------ 
 
Other comprehensive loss 
Exchange differences on 
 translating foreign joint 
 venture                                              -            -          (15) 
Other comprehensive loss 
 for the financial period, 
 net of tax                                           -            -          (15) 
                                            -----------  -----------  ------------ 
 
Total comprehensive loss 
 for the financial period                   (1,063,817)  (1,268,003)   (5,371,488) 
                                            ===========  ===========  ============ 
 
Attributable to equity 
 holders of the Company: 
Loss for the financial 
 period                                     (1,063,817)  (1,268,003)   (5,371,473) 
Other comprehensive loss 
 for the financial period, 
 net of tax                                           -            -          (15) 
                                            -----------  -----------  ------------ 
                                            (1,063,817)  (1,268,003)   (5,371,488) 
                                            ===========  ===========  ============ 
 
Loss per share (US$ cents) 
Basic loss per share                   5        (0.053)      (0.082)       (0.334) 
Diluted loss per share                 5        (0.046)      (0.076)       (0.324) 
                                            ===========  ===========  ============