AMPH.L Regulatory News (AMPH)

Aggregated Micro Power Holdings plc

("AMP", the "Group" or the "Company")

Audited Results for the year ended 31 March 2018

Aggregated Micro Power Holdings plc (AIM: AMPH), the specialist provider of distributed heat, power and renewable fuels, is pleased to announce its Audited Results for the year ended 31 March 2018.

Financial Highlights

· Group revenues increased to £43.2m (£19.7m for the year to 31 March 2017)

· Gross profit increased to £9.5m (£5.5m for the year to 31 March 2017)

· Profit from operations increased to £3.0m (£1.85m for the year to 31 March 2017)

· Profit after tax increased to £1.9m (£1.0m for the year to 31 March 2017)

· Net assets as at 31 March 2018 increased to £18.0m (£10.4m as at 31 March 2017)

· Net assets do not include any recognition for future deferred development fees that may be due from AMPIL(a)

Operational Highlights

· Wood fuels business delivered over 220,000 tonnes of RHI compliant wood pellet and wood chip to nearly 4,000 customers and provides service and maintenance to around 900 boilers

· On 25 May 2017, AMP assisted AMPIL(a) to raise £29.5m of new cash to finance AMP's pipeline of clean energy projects

· AMP's projects business developed 70MWs of new grid balancing sites and successfully operated a 21MW and a 3MW peaking plant, which provide flexible electricity in times of peak demand

· AMP participated in two fundraisings for Incubex(b) investing US$2.08m taking its shareholding to 29.08%. Ørsted has recently joined AMP as a co-investor in Incubex and the value of AMP's holding in Incubex is £11.4m as shown in the balance sheet as at 31 March 2018

· AMP is considering opportunities in the evolving energy market and is looking at EV charging, infrared heating, battery storage, renewable electricity supply, green gas and CNG

Post Period End

· Resolution passed on 11 April 2018 and approved by the High Court on 2 May 2018 for a Capital Reduction of the share premium account which will enable dividends to be paid in due course

Richard Burrell, Chief Executive of Aggregated Micro Power Holdings plc, said:

"Our company continues to develop at a frenetic pace. The highlights of the year were the completion of two further acquisitions and an increase of circa 100% in both turnover and net profit. We are exceptionally busy and 2018 promises to be an equally exciting year."

(a) Aggregated Micro Power Infrastructure 2 Limited ("AMPIL") is a special purpose vehicle which is wholly owned by Law Debenture Intermediary Corporation plc as trustee for general charitable purposes. AMPIL can issue listed loan notes to fund renewable energy projects acquired from AMP and/or other developers. AMPIL has to date raised £52m from institutional and other investors.

(b) IncubEx is an incubator for exchange traded products, services, and technology solutions. At its core, IncubEx is a product and business development firm. The company works in conjunction with its global exchange partner, European Energy Exchange (EEX) and other leading service providers and stakeholders to design and develop new financial products in global environmental, reinsurance, and related commodity markets. The company has a specific focus on innovation and continuous improvement of products and services, including technology, trading solutions, and operational efficiencies. The IncubEx team is comprised of former key Climate Exchange executives and is uniquely positioned to capture these opportunities with its partners. The company was founded in 2016 and currently has offices in Chicago and London. www.theincubex.com 

Contacts

Aggregated Micro Power Holdings plc 020 7382 7800

Neil Eckert, Executive Chairman

Richard Burrell, CEO

Izzy Deterding, Investor Relations

Haggie Partners LLP 020 7562 4444

Peter Rigby

finnCap Ltd 020 7220 0500

Ed Frisby/Simon Hicks (Corporate Finance)

Stephen Norcross (Corporate Broking)

Whitman Howard Ltd 020 7659 1234

Mark Murphy

Nick Lovering/Francis North

About Aggregated Micro Power Holdings plc

The AMP Group was established to develop, own and operate renewable energy generating facilities. It specialises in the sale of wood fuels and in the installation of distributed energy projects. AMP's wholly owned subsidiary Forest Fuels sells high quality wood chip and wood pellet to end customers throughout the UK, while its projects division installs biomass boiler and biomass CHP systems for a wide range of applications and customers. AMP is also active in developing projects for stand-by power generation which aim to balance the transmission grid at times of peak demand.

www.ampplc.co.uk

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Audited Report and Financial Statements, and Annual General Meeting

The financial information above does not constitute the Financial Statements. The Group's statutory Audited Report which includes an unqualified audit report and Financial Statements for the year ended 31 March 2018 are available to view on the Company's website: www.ampplc.co.uk/investors/ and will be sent in July to shareholders, together with a notice of AGM which will also be available on the Company's website. The Company's Annual General Meeting is due to take place at 10.00am at 1 Dover Street, London W1S 4LD on 10 September 2018.

Executive Chairman's Statement

Our company continues to develop at a frenetic pace. The highlights of the year were the completion of two further acquisitions in the fuels business and an increase of circa 100% in both turnover and gross profit. We also announced that Aggregated Micro Power Infrastructure 2 plc ("AMPIL") secured further funding of £29.5m to allow it to purchase more of our biomass boiler portfolio and future grid balancing project pipeline.

The immediate job following these acquisitions was to get through the winter heating season. This was to be one of the most challenging for many years exemplified by the impact of the "Beast from the East" and colder weather compared to previous winters.

At the same time, we started to address integration and restructuring, streamlining our management team in wood fuels and bringing in service and maintenance expertise to run boiler systems and grid balancing assets on behalf of clients. We have also further strengthened our project development and investments team.

What this demonstrates is a business that now spans the small scale renewable heat and power sector, a business that can cross sell products and services to a customer base of nearly 4,000 customers, a business that is vertically integrated in the biomass space covering fuel supply, operation & maintenance and installation and financing. It is a business with a "project development" division that covers renewable heat, grid balancing and is considering investments in infrared heating, electric vehicle charging and batteries.

In addition to the future deferred development fees, that may be due from AMPIL as a result of the projects they have acquired, is the upside valuation of AMP's 29.08% interest in IncubEx. IncubEx is an incubator for exchange traded products, services and technology solutions. It works in conjunction with its global exchange partner European Energy Exchange (EEX) to design and develop new financial products in the global environmental, reinsurance and related commodity markets. The company is growing rapidly in Europe and IncubEx has recently announced the roll out of a suite of North America products in partnership with Nodal, EEX's US Power Exchange.

This year promises to be another exceptionally busy one for AMP. We have a major integration program under way in our wood fuels business following the acquisition of a number of UK wood fuels suppliers over the last 2 years into the Forest Fuels Group. This project will cover operational systems and other synergistic initiatives. Separately, we are also consolidating into a single AMP Group brand over the next 12 months.

With regard to integration, the attitude of the staff involved has been incredibly positive and deserves a "thank you". People have a natural aversion to change and people also become sentimentally attached to existing organisational structures and identities. The amount of change that has already been achieved is extremely positive. I know that this will lead to a vibrant and well organised business that can bring all the requisite skill sets to bear that are required to drive our business forward.

We will not be paying a dividend for the year ended 31 March 2018, but would draw your attention to the recently amended share premium reduction which paves the way for future dividends once appropriate levels of profitability are obtained.

It only remains for me to thank our hardworking non-executive directors and executive management team. I look forward to reporting further progress due course.

Neil Eckert

Executive Chairman

3rd July 2018 

Strategic Report

I am delighted to report a positive set of results for AMP in respect of the 12 month period to 31 March 2018. Group revenues increased to £43.2m (2017: £19.7m), gross profit increased to £9.5m (2017: £5.5m), profit from operations increased to £3m (2017: £1.85m) and profit after tax was £1.9m (2017: £1m). Cash flow from operations were £2.9m (2017: -£4m)

Net assets as at 31 March 2018 increased to £18.0m (2017: £10.4m) and the balance sheet does not include any recognition for future deferred development fees that may be due from Aggregated Micro Power Infrastructure 2 plc ("AMPIL").

AMP Group strategy

AMP's strategy is to be a specialist provider of distributed heat, power and renewable fuels to help UK businesses unlock the potential of decentralized, low carbon energy.

AMP operates through three business divisions: Wood Fuels; Project Development; and HQ & Investments.

Wood Fuels

AMP's wholly owned subsidiary Forest Fuels sells high quality wood pellet and wood chip to customers throughout the UK in the form of fuel only contracts, heat contracts and/or fuels plus operation and maintenance (via AMP's majority interest in HW Energy). Forest Fuels is the leading supplier of premium grade, RHI compliant wood pellet and wood chip with almost 4,000 customers and HW Energy provides service and maintenance to around 900 boilers. AMP's strategy is to grow its wood fuels and service and maintenance customer bases by a combination of organic growth and further acquisitions in strategic locations.

The results for Wood Fuels includes AMP's majority interest in Highland Wood Energy Limited ('HWE') and 5 months of results from Billington Bio-Energy Limited which was acquired from Drax Smart Supply Holdco Limited, a wholly owned subsidiary of Drax PLC, in October 2017.

Revenues from this segment increased to £40.0m (2017: £15.8m), gross profit increased to £7.9m (2017: £3.0m) and adjusted EBITDA, including the costs of fleet depreciation increased to £1.9m (2017: £0.75m).

The recent acquisitions have accelerated AMP's growth by strengthening our market leading supply chain and distribution capability in wood fuels and related services. This has been especially important during the last six months of the financial year which has been characterized by colder weather compared to previous years.

The Directors believe that by enhancing the business development and marketing expertise of the Group, together with offering market leading customer service and maintenance, there are significant opportunities to increase revenues and long term profitability from this segment.

Project Development

AMP aims to deliver cost and carbon savings to high intensity heat and power users through its specialist industrial renewables development team. Our strategy is to develop, manage and facilitate financing of distributed energy projects focusing on biomass heat and power, biomass process steam and in due course, waste heat recovery to reduce on-site electricity costs. AMP's strategy is to work with project developers and third party infrastructure vehicles to generate a wide range of development fees from different projects. AMP sources projects from various introducers and installers and works with the customer account managers in Forest Fuels to offer all wood fuels customers with a commercial boiler, buy back scheme to allow them to sell their biomass installations at any time.

AMP also develops and procures finance for gas-fired peaking plants which provide flexible generation at times of peak demand. We believe that the cost effective flexibility that these plants provide will help with the UK's transition to a lower carbon economy by supporting the continued expansion of intermittent renewables such as wind and solar.

Over the course of 2017 AMP managed to deliver two peaking plants in Kingsnorth, Kent, (21MW) and in Roydon, Essex (3MW), and is now responsible for the operational and commercial management of these sites. AMP has a carried interest in both projects, subject to each project meeting minimum financial performance criteria. AMP also developed two new projects during the financial year (totaling 70MW) and sold the development rights to a third party. AMP's development focus is increasingly on smaller sites in areas of high electricity demand such as urban areas, which can be connected to the distribution network at lower voltage levels. These smaller, more localised projects sited in areas of grid constraint offer significant system benefits in terms of avoided grid reinforcement costs and will potentially help support the anticipated growth in electric vehicles and the electrification of heat.

Revenues from Project Development for the 12 months to 31 March 2018 were £3.2m (2017: £3.9m), gross profit was £2.4m (2017: £2.5m) and adjusted EBITDA was £1.2m (2017: £1.7m).

In May 2017, AMP announced that it had facilitated AMPIL in securing further funding of £29.5m for the financing of its biomass boiler portfolio and future grid balancing projects. AMPIL is a special purpose vehicle which is wholly owned by Law Debenture Intermediary Corporation plc as trustee for general charitable purposes. AMPIL can issue 8% listed loan notes to fund renewable energy projects acquired from AMP and/or other developers. Under the terms of its contract with AMPIL, AMP receives an upfront 10% development fee on financial close of each project and when AMPIL Loan Notes are repaid, AMP is entitled to receive 100% of the excess returns in the form of deferred development fees.

Investments

The Investments division takes non-controlling interests in equity investments in companies aligned to our corporate strategy. Within this segment are head office costs and the costs of undertaking research and development into new distributed energy opportunities where we analysing various opportunities in electric vehicle ("EV") charging, infrared heating, battery storage, renewable electricity supply, green gas and Compressed Natural Gas ("CNG").

In May 2017, AMP invested US$ 778,718 in IncubEx LLC and in March 2018, AMP invested a further US$ 2,049,285 providing it with a 29.08% shareholding. IncubEx works in conjunction with its global exchange partner, European Energy Exchange and other leading service providers and stakeholders to design and develop new financial products in global environmental, reinsurance, and related commodity markets (e.g. wood pellet). The company has a specific focus on innovation and continuous improvement of products and services, including technology, trading solutions and operational efficiencies.

Other significant investors in IncubEx include Ørsted (one of Northern Europe's leading energy groups) as well as the founders of IncubEx and a number of AMP Directors.

AMP's 29.08% shareholding in Incubex LLC has resulted in a positive fair value adjustment of £7.45m taking the investment holding value to £11.4m in AMP's Balance Sheet as at 31 March 2018. This positve fair value movement is a significant contribution to profit before tax for the year and covers a number of the exceptional and non-recurring expenses from other operating segments noted above.

As budgeted, there were no revenues generated from the Investments Division during the 12 months to 31 March 2018. Administrative expenses which include the Board, PLC and related head office costs amounted to £1.7m (2017: £1.8m).

Segment Reporting

The Directors have taken the decision to report segment performance on an adjusted basis disclosed in Note 3. The Company has engaged in multiple acquisitions over the course of the financial years ending 2017 and 2018 which has resulted in significant exceptional and non-recurring expenses incurred or provisioned during the natural process of integrating and restructuring the wood fuel business segment. In addition there was further non-recurring expenses incurred due to macro events such as Brexit, partial write off in respect of a biomass development investment site and unanticipated expenditure relating to certain wood chip activities. Further disclosure of these expenses have been made in Note 6.

These exceptional and non-recurring expenses are disclosed below EBITDA in order to give the users of these financial statements a clearer understanding of normalised, operational performance as well as provide relevant comparatives for the forthcoming financial year.

Issuance of Ordinary Shares

In October 2017, the Company issued 1,624,365 Ordinary Shares to Drax Smart Supply Holdco Limited ("Drax") in connection with the Acquisition of Billington Bio-energy Limited and in November 2017, 3,756,356 new Ordinary Shares were issued to existing and new investors pursuant to a £3.7m placing for cash. Both share issues were completed at a placing price of 98.5 pence per share.

Industry and policy background

There is increasing pressure on businesses to reduce energy costs, cut carbon and achieve greater energy security and cost certainty. Clean Growth is at the heart of the future vision for the UK economy. Through the Climate Change Act, the UK Government has set a target to significantly reduce UK greenhouse gas emissions by at least 80% by 2050.

It is widely acknowledged that UK industry must decarbonise to remain competitive and exploit opportunities to meet the fast-growing demand for low carbon goods and services.

The Renewable Heat Incentive (RHI) remains the main Government policy mechanism for stimulating the decarbonisation of the heat sector. The Government have confirmed that funding for new projects utilising the RHI will remain open until March 2021. The government are working to a target of 12% of heat being generated from renewable sources by 2020 and the latest figures suggest that around 6.2% of heat was generated renewably during 2016 - this emphasises that there remains a requirement to stimulate the uptake of renewable heat. Projects financed and completed before March 2021 will benefit from

20 years of ongoing RHI revenue payments based on the amount of useful heat that they produce which provides long term revenue certainty for the projects we arrange finance for. Over the past 12 months there have been two significant policy changes in relation to the RHI which are important for shaping our approach to future projects. First, the payments associated with the RHI have been standardised across all sizes of project - the effect of this is to make large scale biomass and biomass CHP projects more attractive and we have therefore taken steps to develop a pipeline of projects in this area. Second, there has been a tightening of the rules on what type of heat is eligible for the RHI which should mean that there is more budget available for the types of projects in which AMP specialise which always have a credible counterparty who use heat for constructive purposes.

Looking beyond 2021 the Government are developing their Policy thinking as to how the uptake of renewable and low carbon heat can continue to be stimulated. The Clean Growth Strategy published in October 2017 highlighted that the government need to "drive significant acceleration in the pace of decarbonisation". There are a range of actions outlined in the Clean Growth Strategy to increase the use of renewable heat and to support the roll out of energy efficiency in businesses including the "phasing out of high carbon fossil fuel heating for new and existing businesses in off gas areas during the 2020s". The Government have also recently published a Consultation paper on a Future Framework for Heat in Buildings which outlines a range of potential measures to support the decarbonisation of heat after 2021. AMP are engaged with the Renewable Energy Association and will take an active role in shaping future policy that helps to unlock the potential of low carbon decentralised energy for UK businesses.

We believe that there are a number of features of the renewable heat market which are highly beneficial for the AMP Group:

• The UK Government is committed to phasing out the installation of high carbon fossil fuel heating in new and existing buildings off the gas grid, during the 2020s;

• Government policy is increasingly focused on the decarbonisation of large industrial heat users where onsite biomass CHP systems can deliver value for money and CO2 savings for both the government and end customers;

• The market for wood pellet and wood chip is strongly supported by the RHI scheme which will remain in place for new installations until March 2021;

• Accredited installations receive the RHI for 20 years providing long term demand for wood fuel;

• RHI payments are linked to inflation which should help support and mitigate the inflationary growth in wood fuel prices;

• The UK's success in decarbonising electricity generation has not been matched in the heating sector;

• Approximately 6.2% of total heat capacity (Dukes 2016), renewable heat lags behind the government's 2020 target of 12%;

• The Medium Plant Combustion Directive (MPCD) became law in the UK in December 2017. This introduces tougher emissions standards on large boilers and will drive an increase in the installation of new large boilers for volume users of heat and steam. From December 2018 onwards, new installations >1MW must be compliant with the MPCD and by 2029 almost all large boilers in the UK will need to have been replaced (2025 for those that are above 5MW). The AMP fully funded energy centre model represents a significant opportunity for companies who do not want to invest in energy plant to benefit from our clean energy solutions and will provide a further stimulus to the growth of AMP; and

• Beyond 2021 the direction of travel for biomass heating is likely to be focused on areas off the gas grid. This is outlined in both the call for Evidence on Heat and the Clean Air Consultation. AMP is well placed to provide ongoing services and solutions to customers who are off the gas grid.

We believe that there are a number of features of the modern day power market which are highly beneficial for the AMP Group:

• Intermittency from solar and wind combined with demand from electric vehicles at times of peak demand is driving growth in stand-by, flexible power generation;

• Distribution Network Operators (DNOs) have already begun to procure flexibility services in specific areas where the grid is most constrained at peak times and where flexible generation, demand side response or storage are potentially cost-effective alternatives to grid reinforcement;

• Urban areas are likely to see the biggest demand for electric vehicles but face the greatest grid constraints and limits to import capacity;

• The prospect of a low capacity market price in the forthcoming auctions (driven in large part by the inclusion of interconnectors and their high derating factors) will require projects to maximize the locational and revenue benefits;

• Ofgem's review of grid access and use of system charges may result in more dynamic charging and crediting structures, favoring flexible generators in constrained parts of the network that can quickly respond to shifting patterns of demand;

• The UK's drive to decarbonise (the Government has a legally binding target of reducing the UK's greenhouse gas emissions by 80% by 2050 against 1990 levels) is expected to require significant structural changes to the power market, with 8GW of coal fired generating capacity already decommissioned since 2012 due to the Large Combustion Plant Directive and a further 10GW is expected to close by 2025, most of which will happen by 2020. In addition 2GW of gas fired CCGT is expected to close by 2020. Taken together this represents approximately 25% of Great Britain's generating capacity. This reduction in thermal generating capacity is expected to increase power price volatility and reduce system inertia.

AMP Group objectives and KPIs for 2018 are as follows:

• Aim to be a market leader in the supply of wood fuels retailing (wood pellet and wood chip) to end customers via a combination of organic growth and targeted acquisitions;

• Grow pipeline of biomass boiler, biomass CHP and existing boiler acquisitions generating development fees and future carried interest from AMPIL Loan Note issuance;

• Generate development fees and future carried interest from natural gas peaking plants;

• Continue research and development into the evolving energy market and consider opportunities in EV charging, infrared heating, battery storage, renewable electricity supply, green gas and CNG

• Continue to invest in businesses aligned to our corporate strategy and objectives; and

• Supplement AMP's cash resources with additional new funding from one or a combination of: the issue of new Ordinary Shares for cash; the issue of new Convertible Notes; the refinancing of existing assets; raising project finance from third party providers; asset financing of core items of equipment; or any other compelling financing mechanism where the Directors consider doing so to be in the best interests of the company and its Shareholders.

Risk factors

The principal risks of the business are documented below:

This Strategic Report was approved by the Board of Directors of the company on 3rd July 2018 and signed on their behalf by

Richard Burrell

Chief Executive Officer

3rd July 2018

Director's Report

For the period ended 31 March 2018

Strategic report

A review of the business and future developments of the Group are included within the strategic report on page 4.

Results

Results for the year are set out in the Consolidated Statement of Comprehensive Income on page 20 and in the Consolidated Statement of Changes in Equity on page 22.

Directors

Neil Eckert (Executive Chairman)

Richard Burrell (Chief Executive Officer)

Mark Tarry (Chief Financial Officer and Head of Projects)

Sir Laurence Magnus (Senior Non-Executive Director, Chair of the Audit and Remuneration Committees)

Sir Brian Williamson (Non-Executive Director)

The Rt. Hon. Sir Nicholas Soames (Non-Executive Director)

Robert Bland DL (Non-Executive Director)

Auditors

All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the company's auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.

BDO LLP have expressed their willingness to continue in office. Under the Companies Act 2006 section 487(2) they will be automatically re-appointed as auditors 28 days after these accounts are sent to the members, unless the members exercise their rights under the Companies Act 2006 to prevent their re-appointment.

Directors' responsibilities

The Directors are responsible for preparing the Strategic report and Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and company and of the profit or loss of the Group for that period.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state for the Group financial statements whether they have been prepared in accordance with IFRS as adopted by the European Union subject to any material departures disclosed and explained in the financial statements;

· state for the company financial statements whether applicable UK Accounting Standards have been followed subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Going concern

As at 31 March 2018 the group had £4.1m in cash and net current assets of £2.3m. The directors and management have prepared a cash flow forecast to June 2019, 12 months from the date this report has been approved, which shows the group will remain cash positive. The directors and management note that given the seasonality of the fuels division revenues and the unpredictability of earning revenues on development fees, the first 6 months of cash flow forecast contains sensitivity. The directors and management manage this sensitivity by:

- Risk weighting the development fee revenues based on prudent chance of success of completion;

- Managing working capital through enhanced debtor collection, constant communication with key suppliers and

managing costs in line with movements in revenues;

- In May 2018 the company drew down on a short term working capital facility which has provided £1.4m in

further funding. This facility is secured on inventory;

- Monitoring other short term credit lines available to the group.

We note that the short term facility drawn in May is repayable in 6 months' time. The directors and management are confident that either the funds will be repaid through cash generated, the term extended or the sale of the secured assets will cover the amounts owed. The directors and management are confident that the group will trade in line with the forecasts prepared and have therefore prepared the accounts on a going concern basis.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Remuneration

The company remunerates the Directors in line with their experience, the size of the company and its growth objectives. All remuneration is reviewed and approved by the remuneration committee. Details of Directors' salaries and benefits are set out below and in Note 7.

*In addition to the above, consultancy services to the Group under a consultancy agreement between AMP Energy Services Limited and Mathieson Capital Investment Management Limited were also provided during the year. Mr Burrell has a significant interest in Mathieson Capital Investment Management Limited. The fee for these services was £104,550

(2017: £102,500).

Directors' interests

The following Directors held shares in the company as at 31 March 2018

1 Neil Eckert also owns £950,000 nominal of Convertible Notes as at 31 March 2018 following the acquisition of Forest Fuels

2 30,000 shares held by Mathieson Capital Fund Management LLP an entity owned by Richard Burrell. Richard Burrell also owns 400,000 Convertible Notes held via his SIPP with Platform Securities Nominees Limited as Nominee issued on 19 December 2016

3 Sir Laurence Magnus also owns £46,250 nominal of Convertible Notes as at 31 March 2018 following the acquisition of Forest Fuels

4 Sir Brian Williamson also owns £20,000 nominal of Convertible Notes as at 31 March 2018 following the acquisition of Forest Fuels

5 Robert Bland also owns £290,613 nominal of Convertible Notes as at 31 March 2018 following the acquisition of Forest Fuels

Dividend

No dividend is recommended to be paid in respect of the 2018 period (2017: nil).

Events after the reporting period

Refer to Note 31 to the accounts for details of events after the reporting date.

Financial instruments

Note 24 to the accounts sets out details of the Group's exposure to financial instruments.

Directors and their disclosures

Details of the composition of the Board of Directors are set out on page 10.

Each of the persons who were Directors at the date the report was approved have confirmed that:

(a) so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

(b) he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This Directors' Report was approved by the Board of Directors of the company on 3 July 2018 and signed on their behalf by:

Richard Burrell

Chief Executive Officer

Corporate Governance

The Directors support high standards of corporate governance and confirm that they pay due regard to the UK Corporate Governance Code insofar as is practicable given its size and nature.

Constitution of the board

During the period there were nine full board meetings. The Audit Committee met twice during the period. The Remuneration Committee met once and the Nomination Committee did not meet.

The board was comprised of the following:

Committees of the board

The Audit Committee is made up of Sir Laurence Magnus (Chairman), Sir Brian Williamson, Robert Bland DL and The Rt. Hon. Sir Nicholas Soames, with the company secretary serving as secretary.

The Audit Committee's terms of reference requires the committee to meet at least 2 times per year to coincide with key dates in the company's financial reporting cycle and at such other times as the Committee Chairman shall require. The Committee is responsible for monitoring the integrity of the financial statements of the company including those which are relied upon by the Board. The Committee reviews the company's corporate reporting, risk management, financial statements and internal financial controls, considers the need for internal audits and the scope and planning of external audits and the findings of the audits and keeps under review the company's relationship with the external auditor.

The Remuneration Committee is made up of Sir Laurence Magnus (Chairman), Sir Brian Williamson, Robert Bland DL and The Rt Hon. Sir Nicholas Soames, with the company secretary serving as secretary.

The Remuneration Committee shall meet at such times as the Chairman of the Committee shall require. The purpose of the Committee is to recommend to the Board the company's general policy on remuneration and in particular to determine the remuneration packages for the Executive Chairman and the Executive Directors.

The Nomination Committee is made up of Sir Laurence Magnus (Chairman), Sir Brian Williamson, Robert Bland DL and The Rt. Hon. Sir Nicholas Soames, with the company secretary serving as secretary.

The Committee shall meet at such times as the Chairman of the Committee shall require. The purpose of the Committee is to review the structure, size and composition (including the skills, knowledge, experience and diversity) required of the Board and make recommendations to the Board with regard to any changes.

Attendance at meetings

During the period there were nine board meetings and the details of attendees are set out below.

Bribery Act compliance

In 2014 the company adopted an Anti-Bribery and Corruption Policy. This is kept under review by the Audit Committee under its terms of reference.

Matters reserved for the Board

In June 2014 the company adopted a schedule of Matters Reserved for the Board. This includes the approval of Group strategy and policies, major acquisitions and disposals, major capital projects and financing, Group budgets and material contracts entered into other than in the ordinary course of business, reviewing the functioning of the internal control environment and reviewing corporate governance arrangements. The Board is responsible for determining the nature and extent of the principal risks it is willing to take in achieving its strategic objectives. It also retains oversight of the risk management and internal control systems with the aim that these are sound and protect shareholders' interests. This is kept under review by the Audit Committee under its terms of reference.

Relations with shareholders

The company endeavours to maintain communication with shareholders through regulatory announcements, via the company's website and by direct contact with its major shareholders. The Board values the views of its shareholders and fosters continuing dialogue with investment and fund managers, other investors and equity analysts to ensure that the investing community receives an informed view of the Group's prospects, plans and progress.

Independent auditor's report to the members of Aggregated Micro Power Holdings Plc

Opinion

We have audited the financial statements of Aggregated Micro Power Holdings Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2018 which comprise the Consolidated Statement of Comprehensive income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, the Company Statement of Financial Position and the Company Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 the Financial Reporting Standard in the United Kingdom and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

• the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2018 and of the group's profit for the year then ended;

• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. 

We have determined a profit based measure is appropriate as the group is currently growing in revenues from the acquisitions made of Patchwork Energy Limited, and Midlands Wood Fuels Limited in the prior period and Highland Wood Energy Limited and Billington Bioenergy Limited in the current period.

Whilst materiality for the financial statements as a whole was £300,000, each significant component of the group was audited to a lower level of materiality of £270,000. Performance materiality has been set at 75% of materiality, this percentage has been selected by assessing criteria such as historic judgement levels, complexity, history of errors found, and the control environment in the group. The performance materiality is used to determine the financial statement areas that are included within the scope of our audit and the extent of sample sizes during the audit.

We agreed with the Audit Committee that we would report to the Committee all individual audit differences identified during the course of our audit in excess of £8,000 (2017:£5,500).

An overview of the scope of our audit

Our group audit was scoped by obtaining an understanding of the group and its environment, including the group's system of internal control, and assessing the risks of material misstatement in the financial statements at the group level.

Our group audit scope focused on the group's largest trading entity Forest Fuels and the new acquisitions Highlands Wood Energy Limited and Billington Bioenergy Limited, which were subject to a full scope audit. Forest Fuels Limited, Highlands Wood Energy Limited and Billington Bioenergy Limited all form part of the wood fuels operating segment, these components provide pellet, woodchip and heat fuel sales. Highlands Wood Energy has incorporated operations and maintenance services of Boilers into the group. Together with the parent company and its group consolidation, which was also subject to a full scope audit, these represent all the trading components of the group. All of the components including the group were audited by BDO London.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the parent company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Marc Reinecke (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London,United Kingdom

3rd July 2018

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

The financial statements were approved by the Directors on 3rd July 2018 and signed on their behalf by:

Richard Burrell, 

Chief Executive Officer

Consolidated Statement of Changes in Equity

For year ended 31 March 2018

Share capital: Nominal value of shares issued.

Share premium: Amount subscribed for share capital in excess of the nominal value.

Capital contribution: Relates to funding from the shareholders for which no share capital was issued and that funding meets the definition of an equity instrument.

Retained deficit: All other net losses and transactions with owners (e.g. dividends) not recognised elsewhere.

Merger reserve: Created on the issue of shares on acquisition of its subsidiary accounted for in line with the Company's Act 2006 provisions.

Other reserve: Amount raised through the use of a cashbox structure and applying merger relief on business combination where the consideration for shares in another company includes issued shares and on completion of the transaction, the company issuing the shares will have secured at least a 90% equity holding in the other company

Convertible debt option reserve: Amount recorded as equity on the initial fair value measurement of issued convertible loan notes

Consolidated Statement of Cash Flows

For year ended 31 March 2018

 1 Accounting policies

Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the periods presented, unless otherwise stated.

Comparative figures in the financial statements are in respect of the audited twelve month period to 31 March 2018.

These financial statements have been prepared under the historical cost convention (except for items measured at fair value through profit and loss) and in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").

The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed in Note 2. The financial statements are drawn up in Pound Sterling, the presentational currency of the Group.

Restatement

The Cash Flow Statement has been restated for non-cash movements between operating, investing and financing cash flows. As part of this, the invoice discounting movement has been removed from the movement in trade and other payables, and included in financing activities.

Changes in accounting policies

a) New standards, interpretations and amendments effective from 1 January 2017

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 January 2017 that had a significant effect on the Group's financial statements.

b) New standards, interpretations and amendments not yet effective

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective in future accounting periods that the Group has decided not to adopt early. The most significant of these are:

· IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers (both mandatorily effective for periods beginning on or after 1 January 2018); and

· IFRS 16 Leases (mandatorily effective for periods beginning on or after 1 January 2019).

IFRS 9 Financial Instruments

The Group has identified that the adoption IFRS 9, which replaces IAS 39 Financial Instruments:

Recognition and Measurement from 1 January 2018, could impact its consolidated financial statements in that the Group will need to apply an expected credit loss model when calculating impairment losses on its trade and other

receivables (both current and non-current). This will result in an immaterial increase in the impairment provision with the requirement to factor in forward looking information when estimating the appropriate amount of provision, as the existing level of historic bad debt write off in comparison to debtors is low.

IFRS 15 Revenue from Contracts with Customers

The Group derives revenue from the sale of wood fuels, sale of heat contracts, operation and maintenance services and development fees. IFRS 15 will impact revenue derived from the sale of heat contracts, operations and maintenance , however this counts for a small portion of revenue in relation to the Group as the Group continues to work through the and Restructure the Operations and Maintenance Division, we are finalising the Impact of IFRS 15 of the operations and maintenance contracts.

IFRS 16 Leases

Adoption of IFRS 16 will result in the Group recognising right of use assets and lease liabilities for all contracts that are, or contain, a lease. This treatment would result in discounting future lease payments and recognising the right of use of assets as a fixed asset and long-term liability in the financial statements. For leases currently classified as operating leases, under current accounting requirements the Group does not recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis over the lease term, disclosing in its annual financial statements the total commitment. The impact of future periods is being considered and Management are in the process of quantifying the impact.

Basis of consolidation

Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquirer's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Business combinations

The purchase method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange. Where equity instruments are issued in a business combination, the fair value of the instruments is their published price at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuations methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Except for non-current assets or disposal Groups classified as held for sale (which are measured at fair value less costs to sell), all identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The excess of the cost of the business combination over the net fair value of the Group's share of the identifiable net assets acquired is recognised as goodwill. If the cost of acquisition is less than the Group's share of the net fair value of the identifiable net assets of the subsidiary, the difference is recognised as a gain in the Statement of Comprehensive Income, but only after a reassessment of the identification and measurement of the net assets required.

Where settlement of any part of the consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the Group's incremental borrowing rate, being the rate at which similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, re measured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised. As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination's synergies. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the Statement of Comprehensive Income. An impairment loss recognised for goodwill is not reversed.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Intangibles acquired in a business combination

Intangible assets acquired separately are capitalised at cost and subsequently amortised on a straight-line basis over their useful economic lives.

Intangibles recognised on business combinations, if they are separately identifiable from the acquired entity or arise from other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see critical estimates and judgements section). Intangibles acquired through a business combination are recognised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied.

The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost of intangibles acquired in a business combination are as follows:

Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indefinite life intangibles annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Comprehensive Income when the net asset is derecognised.

Going concern

As at 31 March 2018 the group had £4.1m in cash and net current assets of £2.3m. The directors and management have prepared a cash flow forecast to June 2019, 12 months from the date this report has been approved, which shows the group will remain cash positive. The directors and management note that given the seasonality of the fuels division revenues and the unpredictability of earning revenues on development fees, the first 6 months of cash flow forecast contains sensitivity. The directors and management manage this sensitivity by:

We note that the short term facility drawn in May is repayable in 6 months time. The directors and management are confident that either the funds will be repaid through cash generated, the term extended or the sale of the secured assets will cover the amounts owed. The directors and management are confident that the group will trade in line with the forecasts prepared and have therefore prepared the accounts on a going concern basis.

Revenue recognition

Revenue for the Group is measured at the fair value of the consideration received or receivable. The Group recognises revenue for services provided it is probable that future economic benefits will flow to the entity. Development, management and consultancy fees are recognised in the period that the service is rendered.

In circumstances where biomass boiler projects are sold at financial close (development stage) and where the majority of installation costs are funded by the buyer, revenues from the sale of a project are recognised as development fees and development costs which are directly attributable to the development of biomass boiler projects and any costs which are recharged at cost are recorded in work in progress and subsequently transferred to cost of sales at financial close. Financial close is typically defined as the point at which projects have a full suite of documentation (which may include a license to occupy, lease, heat off take agreement) acceptable to the buyer.

AMP has also acted as agent for other developers introducing projects to AMPIL. In such circumstances development fees have been shared and the fees have been recognised net of any commissions payable to third parties, and are recognized as the services are delivered. Deferred development fees are only recognised when it is probable that future economic benefits will flow to the entity.

Revenues from electricity and RHI (Heat contracts) are recognised at the point of generation and are based on the combination of sales prices achieved, the average market prices observed for ROC sales, published tariff levels and metered generation.

Fuel sales are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.

Revenue from operations and maintenance and consulting services is recognised by reference to the stage of completion and agreed contractual milestones. When the contract outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered.

Retirement Benefits: Defined contribution schemes

Contributions to defined contribution schemes are charged to the profit and loss in the year to which they relate.

Property, plant and equipment

All property, plant and equipment are stated at cost less depreciation. Such costs include costs directly attributable to making the asset capable of operating as intended. Costs attributable to assets under construction are included within

the capitalised costs of those assets and include refurbishment and commissioning costs.

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

Depreciation on assets under construction does not commence until they are complete and available for use.

Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over the expected useful economic lives. It is provided at the following rates:

Impairment

Non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.

Financial instruments

The Group classifies its financial assets and liabilities as receivables and loans, discussed below, due to the purpose for which the asset or liability was acquired.

Financial assets

The Group's financial assets mainly comprise of cash, trade and other receivables, and investments in associates. Cash comprises cash in hand and deposits held at call with banks.

Financial assets are classified as loans and receivables, and financial assets at fair value through profit or loss (FVPL).

Trade and other receivables are not interest bearing and are stated at their nominal value as reduced by appropriate impairments for irrecoverable amounts or additional costs required to effect recovery.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable.

Financial assets and liabilities at FVPL

Financial instruments designated as at FVPL upon initial recognition, this includes an investment in associate. This financial asset is designated upon initial recognition on the basis that it is the first of a Group of financial assets that are managed and have their performance evaluated on a fair value basis, in accordance with risk management and investment strategies of the Group.

In accordance with the exemption within IAS 28 Investments in Associates and Joint Ventures, the Group does not account for its investments in associates using the equity method. Instead, the Group has elected to measure its investments in associates at FVPL.

This investment in associate has initially been recognised in the statement of financial position at fair value.

After initial measurement, the Group measures its financial instruments which are classified as at FVPL, at fair value.

Interest and dividends earned or paid on these instruments are recorded separately in interest revenue or expense and dividend revenue or expense in the statement of comprehensive income.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The accounting policy for each category is as follows:

Financial liabilities at fair value through profit and loss

This category comprises the deferred contingent consideration on acquisitions which is discussed in more detail in note 24. This consideration is revalued at each reporting date. It is adjusted against goodwill within 12 months following the acquisition and through the income statement thereafter.

Fair value measurement

The Group measures its investment in associate at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

For all other financial instruments not traded in an active market, the fair value is determined by using valuation techniques deemed to be appropriate in the circumstances. Valuation techniques include the market approach (i.e., using recent arm's length market transactions adjusted as necessary and reference to the current market value of another instrument that is substantially the same).

The Group has classified the investment in associate as Level 3.

Other financial liabilities

Other financial liabilities include the following items:

Loans and borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Loans and borrowings include an invoice discounting facility.

Liability components of convertible loan notes are measured as described further below.

Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Convertible debt

The proceeds received from the issue of the convertible debt are allocated between their financial liability and equity components. The financial liability is initially recognised at fair value (being the discounted cash flows using a market rate of interest that would be payable on a similar instrument that does not include an option to convert). Subsequently, the financial liability is measured at amortised cost.

The equity component is assigned to the residual amount after deducting this fair value liability from the fair value of the financial instrument as a whole. It is recognised in the 'Convertible debt option reserve' within shareholders' equity, net of income tax effects. More information is provided in note 18.

Foreign currency

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.

Share Capital

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability. The Group's Ordinary Shares are classified as equity instruments.

Leased Assets

Where substantively all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group (a "finance lease"), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the lower of the fair value of the leased property and the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed between capital and interest. The interest element is charged to the consolidated statement of comprehensive income over the period of the lease and is calculated so that it represents a constant proportion of the lease liability. The capital element reduces the balance owed to the lessor.

Where substantively all of the risks and rewards incidental to ownership are not transferred to the Group (an 'operating lease'), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight line basis.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on:

- the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

- investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the consolidated statement of financial position date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: the same taxable Group company; or different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered.

Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the management team including the Chairman, Chief Executive Officer, and Chief Financial Officer.

Management monitors the operating results of business segments separately for the purpose of making decisions about resources to be allocated and of assessing performance. Segment performance is evaluated based on operating profit or loss. Finance costs, finance income and income taxes are managed on a Group basis (note 3).

Inventories

Raw materials and consumables are initially recognised at cost, and subsequently at the lower of the cost and net realisable value. Cost comprises all costs incurred in bringing the inventories to their present location and condition.

Raw materials and consumables are used on a first in, first out basis. Work In Progress relates to expenditure on biomass boiler, Combined Heat and Power ('CHP') and grid balancing projects, which are recognised at cost until they are sold.

Costs which are directly attributable to the development of biomass boiler, CHP and grid balancing projects, and which have a reasonable expectation of obtaining the consents required for further development, and to the extent that those costs do not exceed expected recoverable amounts, are treated as Work In Progress and not expensed.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

Invoice Discounting

Invoice discounting is a short term working capital facility provided by the Royal Bank of Scotland to be used for the designated purpose of remitting sales invoices in the fuels segment where customers have been granted long credit terms over 30 days. The facility has a total available drawn down value as at 31 March 2018 of £5.4m.

The facility has been recognised as trade and other payables per note 16. The Group is committed to underwrite any invoices that are not presented for payment by the customer to the bank.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less and for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of financial position.

Restructuring Provisions

The group has recognised a provision liability of uncertain timing or amount for costs which relate to restructuring, involving dilapidations, closing of depots and onerous contracts. The provision is measured at the best estimate of the expenditure required to settle the obligation at reporting date.

2 Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Property, plant and equipment

Property, plant and equipment is depreciated over the useful lives of the assets. Useful lives are based on management's estimates of the period that the assets will generate revenue, which are reviewed annually for continued appropriateness. The carrying values are tested for impairment when there is an indication that the value of the assets might be impaired. Impairment tests are based upon future cash flow forecasts and these forecasts are based upon management judgement. Future events could cause the assumptions to change, therefore this could have an adverse effect on the future results of the Group.

(b) Fair value of deferred contingent consideration

The fair value of Neil Eckert's and Richard Burrell's deferred contingent consideration relating to the Group's merger and acquisition of AMP Energy Services Limited (formerly Environova Consulting Limited) and Mathieson Biomass Limited respectively has been valued to market and recognised in the statements of comprehensive income and financial position. For details of the estimates and judgements see note 28.

The fair value of the deferred contingent consideration relating to the Group's acquisition of Forest Fuels Holdings Limited and its controlled subsidiaries has been valued to market and recognised in the statements of comprehensive income and financial position. For details of the estimates and judgements see note 28.

(c) Impairment of assets

All assets, excluding goodwill, are reviewed for indicators of impairment. Impairment tests are carried out when there is a trigger event. Goodwill is tested for impairment on an annual basis. The recoverable amount of the fixed assets is calculated using a discounted cash flow ('DCF') model where an appropriate, or market based, discount rate is applied to future cash flows expected to be generated by the assets. Under IAS 36 an asset is impaired if its carrying value is greater than its recoverable amount or fair value.  For details of the estimates and judgements see note 10.

(d) Loan receivables

The Real Ventures loan receivables was repaid in part with the balance being written off during the financial year ended 31 March 2018 nil (2017: £528,000). These loans were previously included in trade and other receivables.

(e) Taxes

Deferred tax assets are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, as well as for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. Refer to note 9 for further information on deferred tax assets on carried forward losses. Deferred taxes are recognised at the substantively enacted rate, being the rate they are expected to be utilised.

(g) Valuation of intangible assets

A valuation exercise on intangibles has been performed as part of a Purchase Price Allocation exercise. The values of these intangibles and of the balance sheet acquired are provisional and within one year of the date of acquisition may be adjusted as a result of the finalisation of valuations. Please refer to note 11 for further information on the key assumptions used in this exercise. Impairment of intangible assets including goodwill is calculated using estimated future cash flows and a judgemental discount rate.

(h) Useful lives of intangible assets

The useful life used to amortise intangible assets relates to the expected future performance of the assets acquired and management's estimate of the period over which economic benefit will be derived from the asset. The basis for determining the useful life for the most significant categories of intangible assets is as follows:

· The useful life of long term contracts and customer relationships principally reflects management's view of the average economic life of the customer base and is assessed by reference to customer churn rates. An increase in churn rates may lead to a reduction in the estimated useful life and an increase in the amortisation charge.

(i) Investment in associate - financial asset at fair value through profit or loss

In accordance with the exemption within IAS 28 Investments in Associates and Joint Ventures, the Group does not account for its investments in associates using the equity method. Instead, the Group has elected to measure its investments in associates at FVPL. The Directors have assessed that the Group meets the definition of a "venture capital organisation". Such characteristics of a venture capital organisation may include, but are not limited to:

· investments are held for the short- to medium-term rather than for the long-term;

· the most appropriate point for exit is actively monitored; and

· investments form part of a portfolio, Incubex being the first investment of such nature, which is monitored and managed separately from the core operational business and without distinguishing between investments that qualify as associates or joint ventures and those that do not.

The Group's intention is to hold investments in associates for up to 5 years. The strategy of the Group is to hold significant interest in the companies within the same sector of operation and subsequently engage in an exit strategy.

(j) Interest in other entities

In accordance with IFRS 12, the Group considers Aggregated Micro Power Infrastructure 2 Plc ("AMPIL") to be an unconsolidated structured entity. The Group considers it has neither control nor significant influence. There are no Group directors on the board of AMPIL. There is no equity interest ownership held by the Group in AMPIL. AMPIL is owned and governed by a third party in The Law Debenture Corporation Plc. (see further disclosures in Note 32)

(k) Call Option to purchase remaining shares in Highland Wood Energy

Management has considered the option to acquire the remaining 49.9% shareholding in Highlands Wood Energy Limited, has an immaterial value at 31 March 2018. Management reassess the value of this option at each reporting date.

3 Segmental information

For management purposes, the Group is organised into business units based on its products and services. During the period, the Group's three main operating segments were: Project Development, Wood Fuels and Investments & HQ.

· AMP's project development division develops, finances and manages distributed energy projects focusing on biomass heat and biomass CHP for a wide range of applications and customers. We also develop and finance gas-fired peaking plants to provide reserve power at times of peak demand.

· Wood Fuels sells high quality wood chip and wood pellet to end customers throughout the UK and Scotland in the form of fuel only contracts, heat contracts and/or fuels plus operation and maintenance.

· AMP Investments and HQ aim to grow funds under management. It includes the overhead costs of the Board and related PLC expenses.

The directors have taken the decision to report segment performance on an "adjusted" earnings before interest, taxation, depreciation and amortization ("EBITDA") basis disclosed. The Company has engaged in multiple acquisitions over the course of financial years ending 2017 and 2018, which has resulted in significant exceptional and non-recurring expenses incurred or provisioned during the natural process of integrating and restructuring the wood fuel business segment. In addition there was further non-recurring expenses incurred due to macro events, partial write off of a biomass development investment site and unanticipated expenditure relating to wood chip activities.

These exceptional and non-recurring expenses are disclosed below EBITDA in order to give the users of these financial statements a clearer understanding of normalised operational performance as well as provide relevant comparatives for the forthcoming financial year. Further disclosure of these expenses have been made in note 6.

The Group was exclusively focused on UK operations, and all non-current assets are located in the UK.

The performance of each segment is reported below.

* Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation.