RED.L Regulatory News (RED)

26 April 2016

redT energy plc

("redT" or the "Company")

2015 Final Results

"Successful transition to a pure play energy storage business"

redT energy plc (AIM: RED), ("redT energy" or the "Company"), the energy storage technology company, today announces its final results for the 12 months ended 31 December 2015.

Financial

· Profit for the year €0.7m (2014: loss €2.2m)

· Net gain on disposal of US biogas assets €2.0m

· Acquisition of the REDH business resulting in net €2.0m gain on original investment

· Revenue for the year €11.1m (2014: €5.6m) (includes carbon-related activity)

· €7.5m in available cash held as at 31 March 2016

· Loans and borrowings €Nil (2014: €12.1m)

Operational

Successful shift towards a pure play energy storage business, reflected by; disposal of US assets, acquisition of the REDH business and the continued development of the redT energy storage system, all culminating in the change of Company name to redT energy plc.

redT Energy Storage business:

· Successful roll-in of minority interests in REDH, with the Company now owning 99.7%.

· Commissioning and installation of the first Generation One manufactured market seeding unit at our Wokingham R&D facility. 

· Progression of market seeding programme, with seven unit placements announced to the market in locations from the UK to Africa. 

· Parallel development of Generation Two systems, driven by our design and engineering team, based at new Livingston office.

Africa Clean Energy business:

· Awarded joint mandate as manager to Renewable Energy Performance Platform (REPP) which provides support to African renewable energy projects smaller than 25MW.

· Successful transition from low margin consultancy services towards a dedicated investment advisory business.

US business:

· Disposal of US Biogas assets; Jerome and Twin Falls facilities.

· Sale of US carbon credit portfolio to a major multinational corporation.

Commenting, Scott McGregor, Chief Executive Officer said:

"2015 saw redT successfully execute strategic transactions to transform into a pure play energy storage business and accelerate the development of its flow battery technology, which has been under development for 15 years. Operationally, redT has transitioned from building its own systems in house to outsourced contract manufacturing, an important but difficult stage for an early stage technology company. The result was that redT delivered and installed its first Generation One manufactured product.

Customer demand for long duration industrial energy storage is clear. The key to our ongoing success will be delivering a strong product at the right price. The focus for 2016 is to work with our market seeding partners and integrate our units into their energy networks, delivering advanced long duration energy storage functionality which until now has not been available. The experience of our Generation One rollout will further shape our Generation Two product, which will be highly durable and lower cost. Conservatively working through this critical stage of development will ensure redT unlocks the pent up demand for long duration industrial energy storage, and build long term value for all stakeholders in the process."

Enquiries:

About redT energy

redT develops and supplies durable and robust energy storage systems based on proprietary vanadium redox flow technology for on and off-grid applications. The liquid storage medium affords an exceptionally long life of over 10,000 full charge/discharge cycles and a 100% usable depth of discharge. Combined with low maintenance requirements this delivers industry leading "levelised cost of storage" (LCOS) and "total cost of ownership" (TCO) results. The modular approach allows the power and energy components of systems to be independently sized to meet customer requirements.

Until now it has not been possible to directly compare variable renewable energy generation sources with firm diesel or fossil fuel generation. PV + Storage is now reaching 'grid parity' in many countries, a paradigm shift in energy production, which will ultimately enable a distributed energy network optimising conventional and renewable generation. The redT system has applications in remote power, smart grids, power quality, and all aspects of renewable energy management.

Chairman's Report

Last year I reported that the Board had adopted a strategy of developing each of the three business units; redT Energy Storage business, Africa Clean Energy business, and our US business, and that it was our intention to reorganise in order to give the business a clear focus. By far the greatest shareholder value is in energy storage so our activities in 2015 centred around this business unit, culminating with the acquisition of the balance of shares in REDH, for which we welcome our new shareholders who have been our joint venture partners in REDH for the past five years. The sale of our US biogas assets at the end of the year and the recent share placement post year end have given us the funds we need for our redT Energy Storage business to complete the market seeding installations and roll out sales of the Generation Two design. Given the new focus, it was appropriate to reflect this in the name of the Group Company, so in November we became redT energy plc.

There is no doubt that the energy storage market is poised for rapid growth. Last year saw record investment in renewable energy despite low fossil fuel prices. The international agreement at the Paris Conference of the Parties (COP) to the UNFCCC in December means that this investment will not stop, and by their nature renewable energy technologies need storage. In a market that has been dominated by the lead acid battery, new technologies will need to prove themselves in terms of operational reliability, longevity and financial viability. It is encouraging that lithium ion batteries are already showing financial viability for short term storage at utility scale, opening up a new application where the lead acid battery has been unable to meet the market requirements.

Our task now is to make the redT energy system the preferred choice for longer term energy storage. From the enquiries that we receive, it is clear there is a latent demand for a storage system that performs reliably and economically. However, we need to take the commercialisation step by step and not fall into the trap of selling a product that is not market ready. Proving the performance of the market seeding units this year will be a major step forward, as will sales of the Generation Two lower cost system. These are our primary objectives for 2016 as we set redT energy on course for an exciting future.

Our hard working team have had another busy year and succeeded in delivering the targets that were set by the Board. Separately, I would also like to thank Jonathan Marren who stepped down as Chief Financial Officer on 29 February 2016. Jonathan joined the Group in 2012 and helped oversee the successful transition of the business from a CDM Carbon project developer to where we are today. On behalf of the Board, I would like to thank him for his commitment and dedication throughout this period. We are pleased that we have retained Jonathan's considerable knowledge and wisdom in his new role with redT energy as a Non-executive Director. Additionally, we are pleased that Scott Laird, previously the Group Financial Controller, agreed to become the Finance Director (non-Board Director). Scott has been with the Group for over a year, during which time he played a key role in the running of the Group finance function, and we are extremely confident that Scott will continue to make a significant contribution to the Group as Finance Director. Finally, the Board was pleased to announce on 15 February 2016, the appointment of John Ward as Non-executive Director. John has been an investor in the REDH business since 2009 and his 13 years' experience in the renewable energy sector is an invaluable addition to the Board.

Once again, I would like to thank the entire team together with my fellow Non-executive Directors for the contributions that they have made to the Company and look forward to a successful 2016.

Jeffrey Kenna

Chairman

Chief Executive Officer's Report

Summary and Outlook

2015 was a major landmark in the evolution of the Camco Clean Energy group of businesses, and marked the beginning of an exciting new era for the Group.

In 2014, I highlighted the importance of the further development and commercialisation of our energy storage technology, redT energy. I am now pleased to report that the past year has been defined by the successful shift in our focus towards a pure play energy storage business. 2015 also saw key developments to our Group structure which are critical to our future growth; the consolidation of our redT minority shareholding to increase our business' stake in redT to 99.7% and the sale of our US assets, namely our biogas assets and carbon offset portfolio. Our commitment to the future was further underlined by the change in company name from Camco Clean Energy plc to redT energy plc, which was approved at an Extraordinary General Meeting in November 2015.

Having previously signed an agreement with one of the world's leading manufacturing companies, we were able to accelerate the product development phase throughout the year and made significant progress towards the commercialisation of the redT energy storage system. This culminated in the delivery of the first manufactured unit in October, followed by additional unit orders in the months that followed. Our aim is to prove the Generation One manufactured products in multiple applications as market seeding units, with seven of these units having already been announced. A further five customer applications will be announced in due course, having been carefully selected to demonstrate product functionality.

After 15 years of research and development, we were pleased to announce in April that redT had won the prestigious Irish Times Innovation Award within the category of "Energy and Environment". The Awards showcase and reward excellence in innovation across a range of products and services, with redT being selected on the strength of its energy storage system and its ability to address the storage needs of a very broad range of medium and large applications. External recognition of the redT system as a leading innovation within the energy storage industry is a major accolade, and serves to further underline the robust nature of our technology and the product's versatility for use in multiple markets.

Elements of the Group's residual business interests remain as subsidiary activities of redT energy. The Africa Clean Energy business, as one of these entities, developed strongly throughout the year, resulting in the business segment reporting a profit for the period. In addition to this, we also consider Africa to have strong potential in becoming a key redT energy storage market in the future. Lastly, in the US we successfully converted our existing carbon and biogas assets into cash that will be used for the further development of the redT energy storage system.

Clearly, 2015 was an important milestone in the development of the Group, and the path we will take in 2016 is now well defined as a result. Our primary focus will remain on the commercialisation of the redT energy storage systems as we continue to implement our Generation One manufactured product, in multiple applications through our market seeding program. This education process will be a key priority for us in 2016, learning even more about how our customers integrate the systems into their own applications. This is not only a learning process for us, but also for our customers and the market as a whole.

In short, our achievements in 2015 mean that redT is now a fully focused and consolidated pure play energy storage business, and with the pending release of our Generation Two product, we are firmly on track towards unlocking the door to the commercial market in 2016.

Operational review

The Group reports its results in the following segments; US business, Africa Clean Energy business, redT Energy Storage business and Group (Other). Each individual segment is addressed in further detail in the sections below.

redT Energy Storage business

Following the successful roll-in of minority interests in REDH, which was completed in December, redT energy plc now owns 99.7% of REDH. This marked an important milestone for the business with energy storage becoming the primary focus for the Group, a move which was reflected by the change of company name from 'Camco Clean Energy' to 'redT energy'.

redT's partnership with a major global manufacturing company continued to grow positively throughout the year and strong progress has been made with regards to development of the manufactured product. To date, a total of seven suitable locations, from the UK to Africa, which fit a range of applications for the market seeding units, have been announced to the market. In October, redT took delivery of the first of its Generation One manufactured market seeding units, which was commissioned and installed at the company's research and development facility in Wokingham. After implementation at the site, the unit became grid tied in December, charging from and discharging into the distribution network. The successful delivery and continued operation of this initial unit was a very positive step and has paved the way for redT to move the business towards the next commercial phase. redT's patented vanadium flow battery energy system has one of the lowest available levelised costs of storage over the lifetime of the system, and coupled with its suitability for a wide range of applications, from utility scale to off-grid or weak-grid locations, this is expected to lead to strong future customer demand for the system in the years to come.

These market seeding units are a vital element in the further development of the business and form part of an important educational process, not only for redT, but also for the market as a whole, in terms of proving the benefits and reliability of the technology. This was underlined in December when we announced that one of Europe's largest utility companies, operating throughout the UK, would take delivery of a market seeding unit to a warehousing and logistics company in South West England. The utility intends to use the system to demonstrate improved payback on the customer's existing PV installation and we will work closely alongside them throughout this process.

In parallel to the market seeding programme discussed above, the business has also progressed strongly with the development of the Generation Two systems. In early 2016, the business opened a new office in Livingston, Scotland. This office, in close proximity to the manufacturing facility where the units are assembled, will act as a focal point for the design and engineering team, and will play an important role in supporting and accelerating the next phase in the product's further development and manufacture.

Now that redT has been set up structurally for growth, we are set to build the business into its commercial stage of product deployment.

US business

Within our US business, we successfully converted our assets into cash that will be used to progress the further development of our redT energy storage system.

In June, we announced the sale of our US carbon credit portfolio to a major multinational corporation. This transaction provided price security to our dairy partners for the credits generated by their projects and was the first of its kind in the US and California Carbon Offset market.

In December, we also completed the sale of our US Biogas assets, the Jerome biogas facility and the Twin Falls facility. This transaction removed debt from the Group balance sheet and completed the restructure of the business. redT still retains service contracts from legacy business regarding these assets, thereby ensuring asset purchasers are effectively serviced and also providing useful cash flow into the business.

I'd like to thank our US team for building such market leading businesses in the biogas and carbon offset project sectors.

Africa Clean Energy business

The Africa Clean Energy business saw further strong development throughout 2015 and is set to continue its positive growth in 2016. The business successfully shifted its focus away from consultancy services and towards investment advisory services, utilising its proven track record in Africa and with 'boots on the ground' through our ongoing network of regional offices, to provide advice and support for a wide range of renewable energy projects and donors seeking to support them.

Within this scope, the business continues to provide ongoing advisory services to Green Africa Power LLP (GAP) through our partner EISER Infrastructure Partners LLP, and was able to add the management of an additional mandate, the Renewable Energy Performance Platform (REPP). Within the context of REPP, the business provides technical assistance and facilitates access to debt providers for a range of renewable energy projects in sub-Saharan Africa. This exciting new initiative breaks down the current finance and structuring barriers faced by smaller scale projects in the region and represents another positive step forward in the development of the Africa Clean Energy business.

Our African Clean Energy business now has a solid base from which to grow its activities in a region attracting significant global capital to invest in clean, distributed energy.

Group (Other)

Our EU ETS compliance services specialist continues to work with installations covered by the ETS to help them manage their regulatory position, whilst also managing the legacy carbon business associated with the Group's portfolio. This activity has created useful revenues and cash flow through to the business in the year, however it should not be seen as a core activity of the Group, or with a continuation period beyond the short term.

I would like to personally thank all our staff, business partners and shareholders who have been most supportive throughout this transition of the Group to focus on the development of redT. We look forward to the next few years delivering redT energy storage systems to satisfy the growing global demand for long duration, stationary energy storage.

Scott McGregor

Chief Executive Officer

Financial Review

Overall Group result

As explained in the Chairman's and Chief Executive Officer's reports, during 2015 the Group underwent significant changes to the structure of the business; acquiring additional REDH shareholding in order to fully consolidate the subsidiary within the Group; disposal of the US biogas assets, providing cash resources for the Group, as well as removing debt burden from the balance sheet; completing the strategic refocus of the Africa Clean Energy business away from the historic low margin consultancy business, towards the growing investment advisory business.

The Group recorded a profit for the year of €0.7m compared to a loss of €2.2m in 2014, primarily as a result of the structural changes to the business producing one off gains in the period. Revenue increased from €5.6m to €11.1m off the back of carbon related activity in the US and EU, with gross margin achieved maintaining year-on-year margin percentages and increasing from €2.4m to €4.8m. Underlying administrative expenses remain tightly controlled, with an increase year-on-year directly as a result of the changes implemented, from €5.2m to €6.3m. The result was the recording of a loss from operating activities of €1.5m (2014: loss €2.7m).

A net one off gain of €2.0m as a result of the acquisition of the REDH business, offset by the share of loss relating to pre-acquisition trading of the investment €1.4m, contributed towards a loss from continuing operations of €0.7m (2014: loss €2.5m). A one off net gain of €1.4m from the disposal of discontinued operations, turned the continuing operations loss for the year into an overall Group recorded profit of €0.7m (2014: loss €2.2m). Positive exchange differences on translation of foreign operations produced a total comprehensive income for the year of €1.0m (2014: loss €1.9m).

redT Energy Storage business

The redT business is focused on the on-going development of its energy storage system, with the results for the period being reflective of an operating cost centric business, on the threshold of producing a full commercial offering. As such, a minor gross margin loss of €0.1m and an overall segmental loss of €0.5m was recorded.

The financials for 2015 equate to three months (October - December 2015) following the roll-in acquisition during the year, which took the business from being an investment to a fully consolidated subsidiary.

US business

Following the sale of the US biogas business, and subsequent classification to discontinued operations, US revenue and activity from continuing operations during the year was centred on the management and sale of Californian Carbon Offsets (CCOs). The year also included a major transaction with a multinational corporation to assign to them the rights for the remaining CCOs from the Agricultural Methane projects that the US business managed, generating revenue and cash in the period of €2.3m.

The outlook for the US business is now focused on the management of the biogas facilities for which it was awarded the contract to manage following their sale. Any revenues generated from carbon activity will be very limited compared with previous years.

The US business recorded revenue of €4.8m (2014: €2.0m), gross margin €3.3m (2014: €0.7m) and segmental profit €1.4m (2014: loss €0.7m).

Africa Clean Energy business

Through 2015 the Africa Clean Energy business continued to build its business with the successful award of the mandate to manage the Renewable Energy Performance Partnership (REPP) in partnership with Greenstream Network Ltd. In addition to the existing co-advisory mandate to Green Africa Power LLP (GAP), this marks the successful transition away from low margin consultancy services towards a dedicated investment advisory business.

The business continues to benefit from its wide range of local and international contacts and expertise in African clean energy, whilst also continuing to maintain offices in Kenya, Ghana, South Africa and the UK. These strengths, combined with the shift to an investment advisory business, provides a more sustainable African business that is well positioned to exceed the expectations of its clients.

The Africa business recorded revenue of €1.2m (2014: €0.8m), gross margin €1.1m (2014: €0.6m) and segmental profit €0.1m (2014: loss €0.1m).

Group (Other)

Group (Other) comprises the historic CDM Carbon and EU ETS Compliance Services businesses.

The CDM Carbon business recorded revenue of €0.15m (2014: €0.8m) / gross profit €0.05m (2014: €0.7m). The limited margin made in this area goes directly towards the management and reduction of the historic CER/VER carbon balances position.

The following table sets out the value of the net CER/VER carbon balances included within the Group assets as of 2015 and for prior years 2010-2014:

At the end of 2015, the CDM Carbon business had an effective net liability of €0.4m, reduced from €0.5m in 2014. As indicated in 2014, the Directors will continue to work diligently in reducing the remaining net liability.

The EU ETS Compliance Services business provided a positive net margin to the group in the year - revenue €4.7m (2014: €1.8m) / gross profit €0.2m (2014: €0.3m). As has been communicated in previous years at length, the nature of the wider carbon market means that the Group is not projecting or reliant upon meaningful revenues and margin being generated beyond the short term, and is not a core activity of the Group.

Group operating expenses

Overall administration expenses from continuing operations increased for the first time in three years, directly as a result of the major structural changes that the Group underwent during the year. Administration expenses rose by €1.1m, from €5.2m to €6.3m, an increase of 21% (2014: 24% reduction).

The increased administration expenses were in the main as a result of; fees in connection with the sale of the US biogas business €0.3m, fees incurred as a result of the REDH roll-in acquisition €0.15m, operating expenses for the REDH business as now a fully consolidated subsidiary €0.4m, and the continued development of the Africa Clean Energy business away from consultancy to an investment advisory model €0.2m.

Taking into account the above additional expenditure items, which resulted in the year-on-year increase, Group administration expenses across each of the operating segments were; US €1.9m (2014: €1.5m), Africa €1.0m (2014: €0.7m), redT €0.45m (2014: €Nil), Group (Other) €3.0m (2014: €2.8m).

The Group continues to maintain tight expenditure control and operate from a lean cost base. Following the successful structural changes that took place, the focus is now on efficient, planned and structured cash utilisation, as the Group looks to continue the development and growth of the redT energy storage system.

Acquisition of equity accounted investee

During the year the Group acquired additional shareholdings in Renewable Energy Dynamics Holdings Limited (REDH - the holding company for the redT Energy Storage business), resulting in effective voting control over 100% shares in REDH, and by the end of 2015, an economic interest of 99.7% (Note 6).

REDH ceased being classed as an investment at the end of September, becoming a fully consolidated subsidiary from October onwards. For the period January - September 2015, the Group share of loss for the equity-accounted investee was €1.4m (2014: €0.1m), with the increased loss as a result of the nearing completion of the Gigha project, and the increased development costs that the business has committed to as it strides towards producing a fully commercialised product.

As part of the business acquisition, the original investment held by the Group in REDH was revalued, creating an income statement gain of €2.0m.

The overall net impact in the 2015 Income Statement for the equity accounted investee, in relation to accounting for the share of loss and gain on disposal, was a profit of €0.6m (2014: loss €0.1m).

Discontinued operations

In line with previous announcements that the Board was exploring strategic alternatives to realise additional value from its US business activities, the Group sold its US biogas business in December for €4.1m, resulting in a net gain from disposal of €2.0m. As a result of the disposal during the year, all income statement activity for 2015 and 2014 in relation to the biogas facilities were re-classed to Discontinued Operations; loss €0.4m (2014: profit €0.3m).

With regards to the Africa Clean Energy business, Group strategy is to focus on the growth of the investment advisory business, moving away from the historic consultancy advisory business. As a result, the current Kenya and Tanzania consulting businesses are deemed non-core to the business strategy, and thus were both reclassified at year end as Assets Held for Sale, and are being held at nil value within the Group accounts. The resulting re-classification to Discontinued Operations for income statement activity recorded the following for both entities; Kenya loss €0.2m (2014: profit €0.05m), Tanzania loss €0.1m (2014: profit €0.01m).

The overall net impact to the 2015 Income Statement for Discontinued Operations was a profit €1.4m (2014: €0.3m) (Note 5).

Cash and cash equivalents

At 31 December 2015, the Group held cash and cash equivalents of €2.9m (2014: €4.1m), with all cash available to the Group for general working capital purposes (2014: restricted €0.8m).

The Group's outstanding loans and borrowings were extinguished as part of the disposal of the US biogas business, having been secured against the biogas plants (2014: €12.1m). There are no un-secured loans held (2014: €Nil).

The key movements in cash during 2015 were: net proceeds received from the disposal of discontinued operations €0.7m; net cash acquired from the roll-in acquisition of the REDH business €0.6m, and cash outflow from operating activities €2.5m.

Two significant post balance sheet events (Note 22) resulted in the Group held cash and cash equivalents rising to €7.5m in available cash as at 31 March 2016; payment was received in full settlement of the outstanding Loan Note €2.4m from the sale and disposal of the US biogas business, and the Group raised £3.5m (before expenses) following a successful share issue of 51,851,852 Ordinary Shares on 10 February 2016.

Scott Laird

Finance Director

Consolidated Statement of Financial Position

at 31 December 2015

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2015

Consolidated Statement of Changes in Equity

for year ended 31 December 2015

Consolidated Statement of Changes in Equity

for year ended 31 December 2014

Consolidated Statement of Cash Flow

for year ended 31 December 2015

Notes

1 Accounting policies

redT energy plc (the "Company") is a public company incorporated in Jersey under the Companies (Jersey) Law 1991. The address of its registered office is 3rd floor, Standard Bank House, 47-49 La Motte Street, St Helier Jersey, JE2 4SZ. The consolidated financial statements of the Company for the year ended 31 December 2015 comprise of the Company, its subsidiaries and associates and jointly controlled entities (together the "Group"). The Company is admitted to the AIM, a market operated by London Stock Exchange Plc.

A Statement of compliance

These consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ("adopted IFRS").

These consolidated financial statements have been prepared in accordance with and in compliance with the Companies (Jersey) Law 1991 an amendment to which means separate parent company financial statements are not required.

These consolidated financial statements were approved by the Board on 26 April 2016.

B Basis of preparation

The financial statements are presented in Euros, the functional currency of the Company, rounded to the nearest thousand Euros.

The preparation of financial statements in conformity with adopted IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years. The most significant techniques for estimation are described in the accounting policies below and Notes 6 and 7.

The accounting policies set out below have been applied consistently in the year and presented in these consolidated financial statements. The accounting policies have been consistently applied across all Group entities for the purposes of producing these consolidated financial statements.

The financial statements have been prepared on the historical cost basis and on a going concern basis.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Financial review. The financial position of the Group, its cash flows and liquidity position are described in the same review.

The Group has sufficient financial resources together with long-term relationships with a number of customers and suppliers. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

The Directors are satisfied that the Group has adequate resources to continue to operate for the foreseeable future. For this reason, they consider it appropriate for the financial statements to be prepared on a going concern basis.

Basis of consolidation

Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Associates and jointly controlled entities Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 per cent. of the voting power of another entity and the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Associates and jointly controlled entities are accounted for using the equity method and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group's share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee

Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Business Combinations

The Group adopted IFRS 3 Business Combinations (2008) and IAS 27 Consolidated and Separate Financial Statements (2008) for all business combinations occurring in the financial year starting 1 January 2009. All business combinations occurring on or after 1 January 2009 are accounted for by applying the acquisition method. The Group adopted IFRS 3 Business Combinations (2008) and IAS 27 Consolidated and Separate Financial Statements (2008) for acquisitions of non-controlling interests occurring in the financial year starting 1 January 2009. The Group also applied IAS 27 (2008) for the disposal and acquisition of non-controlling interests that do not result in loss of control.

Acquisitions and disposals of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions. Previously, goodwill was recognised arising on the acquisition of a non-controlling interest in a subsidiary; and that represented the excess of the cost of the additional investment over the fair value of the interest in the net assets acquired at the date of exchange. The change in accounting policy was applied prospectively and had no material impact on earnings per share.

The Group applied IAS 27 (2008) in accounting for transactions which result in the loss of control of subsidiaries. Under the accounting policy transactions that result in loss of control are accounted for by derecognising the previously consolidated assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests in the former subsidiary and recognising the retained investment at its fair value at the date when control is lost and any consideration received. The resulting difference, including any related gains or losses previously recognised in other comprehensive income that qualify to be recycled to profit or loss, is recognised in profit or loss as a gain or loss on the disposal.

C Revenue recognition

US business

Revenue recognition on US carbon credits

The Group derives revenue from (CCOs) California Carbon Offset Credits that are generated through its US Biogas Operations. The policy is to recognise value for the credits generated during the period once a project has been registered and issued its first offsets under a California Air Resources Board (ARB) approved offsets protocol. To register and issue offsets the project must go through a process of being verified by an approved body and only once this has been carried out successfully does the Group have reasonable certainty that credits generated during each year will be issued at the end of that year in relation to the project. The value placed on the credits is based on the contracted price that will be received, or if the credits are not sold, the prevailing market rate.

Africa Clean Energy business

Revenue recognition on investment advisory services

The investment advisory business derives revenue from the two mandates which it is currently acting as investment advisers; joint advisor to Green Africa Power LLP ("GAP") and lead advisor to the Renewable Energy Performance Platform ("REPP"). Revenue is recognised monthly based upon pre-agreed contractual monthly management fees.

Revenue recognition on other consultancy services

Advisory revenue from consultancy services provided is recognised in the income statement in proportion to the stage of completion of the consultancy contract. The stage of completion is assessed by reference to the overall contract value.

Project revenue consists of development fees, management service fees and revenue derived directly from projects where ownership interest is held.

redT Energy Storage business

Revenue recognition on contract project work

Revenue is recognised in the income statement in proportion to the stage of completion of the contracted project work. The stage of completion is assessed by reference to the overall contract value, with revenue invoiced monthly accordingly.

Revenue recognition on energy storage system sales

Revenue from system sales is recognised when the system has been delivered, installed, and fully commissioned (system fully operating). Only once successfully commissioned can revenue be recognised in line with standard sale of goods recognition criteria. Where the customer has been billed in advance, revenue will be deferred and recognised as Deferred Income on the balance sheet until such time as the system has been fully commissioned.

Group (Other)

Revenue recognition on CDM carbon and EU ETS compliance services

The Group derives revenue from the sale of emissions allowances and offsets to its clients. The revenue recorded is based on the sale price per emission allowance or offset, with the associated cost based upon the purchase price per emission allowance or offset subsequently sold. The Group is acting as principle in both separate transactions, the purchase and sale of emission allowances and offsets, with revenue and cost booked simultaneously as per the transaction date.

D Goodwill

Subsidiary Acquisition since 1 January 2009 the Group measures goodwill as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration.

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably.

The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.

Transaction costs that the Group incurs in connection with a business combination, such as finder's fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

Acquisitions of non-controlling interests Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions.

Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment.

E Intangible assets

Intangible assets recognised within the balance sheet relate exclusively to 'In-process research and development (IPR&D)' as part of the acquisition of the REDH business (September 2015). The IPR&D related to expenditure incurred within two main categories; Technical Expertise (Personnel Costs) & Other Administration Expenses, incurred by the REDH business since 2010 until the date of acquisition. At date of acquisition, IPR&D was capitalised as an intangible asset.

Amortisation of the intangible assets will begin once the redT energy storage system becomes fully commercialised - for the year ended 31 December 2015 this criteria had not been fully achieved. A review will be undertaken in 2016 to confirm the amortisation status of the intangible asset, as well as to determine the effective useful life.

F Property, plant and equipment

Computer and office equipment Computer and office equipment is held at historical cost less accumulated depreciation and impairment losses. Depreciation is charged to the income statement on a straight line basis over the estimated useful life of three years.

Leasehold improvements Leasehold improvements are held at historical cost less accumulated depreciation and impairment losses. Depreciation is charged to the income statement on a straight line basis over the remaining life of the lease.

Project plant and equipment Project plant and equipment is held at historical cost less accumulated depreciation and impairment losses. Depreciation is charged to the income statement on a straight line basis over the estimated useful life of the assets (3 to 25 years).

G Impairment

The carrying amounts of the Group's property, plant and equipment, goodwill and other intangibles are reviewed at least annually to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For assets that have an indefinite useful life the recoverable amount is estimated at each balance sheet date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised immediately in the income statement. The recoverable amount is the greater of the fair value less cost to sell and the value in use. Value in use is calculated as the present value of estimated future cash flows discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

An impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net of depreciation and amortisation, if no impairment loss had been recognised. An impairment loss in respect of goodwill on acquisition is not reversed.

H Non-current assets held for sale and discontinued operations

A non-current asset or a group of assets containing a non-current asset (a disposal group) is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use, it is available for immediate sale and sale is highly probable within one year.

On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of previous carrying amount and fair value less costs to sell with any adjustments taken to profit or loss. The same applies to gains and losses on subsequent re-measurement although gains are not recognised in excess of any cumulative impairment loss. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordance with the Company's accounting policies. Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or depreciated.

A discontinued operation is a component of the Company's business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation has been discontinued from the start of the comparative period.

I Foreign exchange

Foreign currency transactions  

Transactions in currencies different from the functional currency of the Group entity entering into the transaction are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rate at the date of transaction.

FX rates (Euro) as applied in the year-end financial statements: GBP 0.7375 (2014: 0.7816), USD 1.0931 (2014: 1.2165), CNY 7.0973 (2014: 7.5439), KES 111.8906 (2014: 110.2329), TZS 2357.3786 (2014: 2121.3407), ZAR 16.9982 (2014: 14.0701)

J Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to a business combinations, or items recognised directly in equity, or in comprehensive income.

Current tax is the expected tax payable or recoverable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to the tax payable in respect of previous years.

K Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets corporate expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

L Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

M Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

N Leased assets

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying assets.

At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group's incremental borrowing rate.

O Finance income and expense

Finance income comprises interest income on surplus funds, unwinding of the discount on provisions and accrued costs. Interest income is recognised as it accrues in profit or loss using the effective interest method.

Finance expenses comprise interest expense on borrowings, finance leases and unwinding of the discount on provisions and accrued costs. All borrowing costs are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses arising from a group of similar transactions are reported on a net basis.

P Non-derivative financial assets

The Group has the following non-derivative financial assets: cash and cash equivalents, trade and other receivables, loan note receivable and assets held for sale. Such financial assets are recognised initially at fair value, and subsequently assessed for impairment at the end of each financial period.

Q Non-derivative financial liabilities

The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, trade and other payables and payments on account. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

R New accounting standards and interpretations

Newly issued standards adopted in these financial statements

In these financial statements no newly issued standards have been adopted by the Group as none of the standards required to be adopted in the period are relevant to the Group with the exception of the following:

· Annual Improvements to IFRSs - 2010-2012 Cycle (EU effective date 1 February 2015)

Adopted IFRS not yet applied

Certain IFRSs have been issued but have not been applied by the Group in these financial statements as their effective date has not yet been reached. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated with the exception of the following:

· IFRS 9 'Financial Instruments' (not yet effective)

· Annual Improvements to IFRS 2012-2014 Cycle (endorsed 15 December 2015)

· IFRS 15 'Revenue from Contracts with customers' (not yet effective)

2 Segmental reporting

Operating segments

The Group reports these results in line with the following main reporting segments:

1. US: The US is comprised of the company's management and development of its biogas projects, and revenues generated through the management and sale of the Californian Carbon Offsets (CCOs). During the year US disposed of its biogas projects - Jerome and Twin Falls facilities - which have been included as gain from discontinued operation within the operating segment.

2. Africa Clean Energy: The Africa business segment provides investment advisory services to Green Africa Power LLP (GAP) through our partner EISER Infrastructure Partners LLP, and was also able to add the management of an additional mandate, the Renewable Energy Performance Platform (REPP). The business also provided consulting services and the development of clean energy projects across Africa from offices located within the continent. As at year end, the Group classified its Kenya and Tanzania consulting operations as Assets Held for Sale, with the associate financial results recorded within the segment as loss from discontinued operation.

3. redT: redT develops and supplies durable and robust energy storage systems based on proprietary vanadium redox flow technology for on and off-grid applications. The business was held as an investment in prior years, but became a full subsidiary of the Group during the year following a share issue acquisition. The redT segment for the year comprises the post-acquisition financials (October to December) for the business.

4. Group (Other): This segment contains all remaining Group costs in addition to the Group's remaining non US carbon business - comprising CDM Carbon and EU ETS Compliance Services.

Inter segment transactions are carried out at arm's length.

Group also views its business geographically: EMEA (including Europe, Middle East and Africa), ASIA (China and South East Asia), and USA.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of its customers, segment assets are based on the geographical location of the asset.

Geographical information

3 Revenue

4 Other income

5 Assets held for sale and discontinued operations

Discontinued operations

The Group sold its US biogas business on 23 December 2015 following previous announcements that the Board was exploring strategic alternatives to realise additional value from its US business activities. Due to the timing of the transaction, there was no requirement to classify the related assets and liabilities as held for sale. The US biogas business was sold for €4.1m, with €1.7m received in cash immediately and the remaining €2.4m being received in full post 31 December 2015. Outstanding loans and borrowings were transferred to the buyer as part of the sale (loans were secured against the related US biogas facilities). Tax on disposal was €0.1m. The Group incurred disposal costs of €0.3m in relation to advisor and legal fees. These costs have been included in administration expenses in the statement of comprehensive income.

Assets held for sale

As at the 31 December 2015 the Group had entered into two separate Sale and Purchase Agreements (SPA) to sell its Camco Advisory Services (Kenya) Ltd and Camco Advisory Services (Tanzania) Ltd businesses, both of which operated under the Africa Clean Energy reporting segment. The Group strategy for the Africa reporting segment involves the growth of its funds advisory business. The current Kenya and Tanzania consulting businesses focuses on adaption and land use policy consulting and is therefore non-core to the business strategy.

Given the limited asset value, recent trading history, and the geographical challenges of both businesses, management has agreed to the sale of both entities to existing entity Directors, which allows the Group to exit both businesses efficiently and effectively. The SPA's record the consideration amounts for each entity to be - Kenya $1 / Tanzania TZS 100,000,000 (€40,000). Although set at an initial consideration of TZS 100,000,000 for the Tanzania entity, this is in order to comply with local law, and it is the consensus and agreement of all parties that only the equivalent of $1 will be settled. The SPA's are subject to the completion and filing of the 2015 Audited Financial Statements for the local entities, and the local revenue authorities sanctioning the share transfers.

In view of the market value that can be attributed to be entities, and using this as the recognised basis for measurement of the carrying value of the assets and liabilities, a fair value write down of the assets was recorded at 31 December 2015, with both entities holding an assets held for sale at a nominal value of $1.

6 Acquisitions of business

Acquisitions in the current period

redT energy has developed a new and proprietary energy storage technology which enables the efficient and sustainable storage of electrical energy in liquid form. The redT system has applications in remote power, smart grids, power quality, and all aspects of renewable energy management. Following completion of the step acquisition, the redT Energy Storage business became the primary focus for the Group, and as a direct result, facilitated in the change of name of the Group Company from Camco Clean Energy to redT energy.

On 30 September 2015 the Group acquired (through what is known as a "Step-acquisition" process) an additional shareholding in Renewable Energy Dynamics Holdings Limited (REDH - holding company for the redT Energy Storage business), resulting in the Group having effective voting control over 100% of the shares in REDH and an economic interest of 90%. As recorded in the previous financial statements, the Group previously held REDH as an investment with a 53.8% holding (49.8% on a fully diluted basis). The consideration for the controlling shareholding was the issue of 125,681,940 new redT energy plc ("redT") ordinary shares of €0.01 each, at a consideration price of €0.06398 (share price at date of acquisition), equating to a total value of shares of €8,041,131.

redT energy undertook to acquire the remaining economic interest in REDH, resulting in a further three separate transactions prior to year-end, acquiring an additional 9.7% stake holding for the consideration of 31,016,174 new redT ordinary shares of €0.01 each. At 31 December 2015 redT held an economic interest of 99.7% in REDH and continues to have effective voting control over 100% of the shares.

In the three months to 31 December 2015 the REDH business contributed €21,000* to Group revenue for the year, and a net loss of €580,000 to Group profit for the year. If the acquisition had occurred on 1 January 2015, revenue would have been €1,289,000* and net loss would have been €3,214,000. The Group incurred acquisition costs of €150,000 in relation to legal fees and stamp duty. These costs have been included in administrative expenses in the statement of comprehensive income.

*Revenue for 2015 relates to the recognition of funding received from the Department of Energy and Climate Change (DECC) in relation to the ongoing development of the market seeding unit, which upon completion of the full commercialisation of the system, will be installed on the island of Gigha, Scotland.

Effect of acquisition

The acquisition had the following effect on the Group's assets and liabilities