ACTIVE ENERGY GROUP PLC
ANNUAL REPORT & ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company Registration Number: 03148295
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
CONTENTS
PAGE
Strategic Report
Active Energy Group Strategy
2
Board Statement
3
Finance Review for the Year Ended 31 December 2023
7
Principal Risks & Uncertainties
9
Corporate Social Responsibility Report
11
Corporate Governance
Directors, Senior Management & Company Information
13
Corporate Governance Statement
16
Report of the Directors
21
Directors’ Remuneration Report
23
Statement of Directors’ Responsibilities
26
Financial Statements
Independent Auditor’s Report to the Members of Active Energy Group plc
27
Consolidated Statement of Income and Other Comprehensive Income
36
Consolidated and Company Statement of Financial Position
37
Consolidated and Company Statement of Changes in Equity
38
Consolidated and Company Statement of Cash Flows
40
Notes to the Consolidated Financial Statements
41
Frequently used abbreviations/definitions
Active Energy Group plc
“Active Energy”, the “Group” or the “Company”
CoalSwitch®, the registered trademark
“CoalSwitch®”
1885 Alamac Road, Lumberton, North Carolina, USA
“Lumberton” or the “Lumberton Site”
CoalSwitch® US reference production facilities, namely:
Lumberton, North Carolina, United States
the “Lumberton Facility”
Ashland, Maine, United States
the “Ashland Reference Facility”
United States Dollar
“USD” or ‘$”
Active Energy Group’s CoalSwitch® Test Program. the “CoalSwitch® Program”
ACTIVE ENERGY GROUP PLC
1
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Active Energy Group plc is a London quoted (AIM: AEG) renewable energy company.
The Company has developed a proprietary technology which transforms waste biomass material into
high-value renewable fuels. Its patented product, CoalSwitch®, is a leading drop-in renewable fuel that
can be co-fired with coal, completely replace coal as an alternative feedstock without requiring
significant plant modifications or replace current biomass feedstock sources.
Operational Highlights:
Early in 2023, our production and engineering partner Player Design Inc.(“PDI”) was awarded the
requisite permits to complete a full-scale construction and the installation of the requisite equipment
to allow first production at the Ashland Reference Facility in Maine.
As the end of the calendar year approached, various deadlines and goals for production of fuel had not
been achieved. PDI informed Active Energy that further delays in the commencement of production
from the Reference Facility were inevitable and indicative production deadlines would extend further
into H1 2024. Further, PDI indicated that it was unwilling to continue with the existing commercial terms
between the parties and wished to terminate its relationship with Active Energy.
Construction of the Reference Facility commenced mid-2023.
Expansion of the Company’s sales and engineering function in USA and Europe with the hiring of Steve
Schaar (COO) and Barron Hewetson (CTO). Both had significant biomass industry expertise.
During 2023, the intellectual property portfolio was extended with new patents granted in the US and
Canada and relevant trademarks granted in North America and worldwide. Project delays were regularly
notified to AEG from PDI ranging from design issues, component delivery delays and subsequent
construction delays.
Despite the delays AEG continued to secure future customer requests both in the US and internally to
visit the site at the earliest opportunity.
Financial Highlights:
Operating Loss for the year of US$15,517,696 (2022: US$1,343,745).
Cash at bank as at 31 December 2023 US$319,137 (2022: US$2,614,472).
Basic and diluted loss per share from continuing operations of $2.37 cents (2022: earnings per share of
$0.69 cents).
Activities post the year end:
PDI indicated that it was unwilling to continue with existing commercial terms and wanted to terminate
its obligations toward AEG.
An operational compromise could not be reached with PDI as PDI was unwilling to agree a workable
formula for this, so a compromise agreement was agreed between the parties in February 2024 which
saw $1.6m of cash returned to AEG
With limited financial resources post the settlement with PDI, in April 2024 the company
wound down its current business operations to examine alternative options to continue to
monetise the CoalSwitch® IP in other forms.
In October 2024 the Company raised £200,000 ($260,878) from Zen Ventures Limited through
the issue of loan notes, of which £27,616 ($36,022) are convertible loan notes that will convert
to new ordinary shares representing 29.9% of the Company’s issued share capital on 31
December 2024 (subject to shareholder approval).
On the 1st of November 2024 Jason Zimmerman and Max Aitken resigned as directors of the Company.
ACTIVE ENERGY GROUP PLC
2
STRATEGIC REPORT
GROUP STRATEGY
Following the termination of the Group’s relationship with Player Design, Inc the Group’s strategy is now to
realise the maximum value of the CoalSwitch® intellectual property. In light of this the board does not consider
that the Group’s existing KPIs have any continuing relevance. The Group’s established KPIs for 2023 are
summarised below and naturally, given the circumstances, none of these were met.
WHAT ARE THE COMPANY’S KEY PERFORMANCE INDICATORS?
Establish production capacity through the commencement of the first CoalSwitch® production operations
in Ashland Reference Plant.
Replicate these production facilities and construct additional production facilities for CoalSwitch® at
alternate sites in North America and internationally.
Complete off-take agreements, through trial orders, with industrial partners, heating pellet suppliers or
power generators in North America and the rest of the world.
Establish feedstock supply agreements with established forestry product providers for the long-term
supply of low-value residual and waste materials, which meet established sustainability criteria, to
produce CoalSwitch®.
Develop CoalSwitch® production technologies to further improve the fuel performance and introduce
new production technologies to increase production efficiency and maximise economics.
Increased shareholder returns.
HOW HAVE WE PERFORMED IN 2023?
Working with our production partner PDI the focus was to establish an operation production platform for
the first CoalSwitch® production at Ashland, Maine. PDI did complete some commercial milestones
toward construction of the production facility during 2023, including acquiring permits to complete design
work. However, many of the key agreed milestones were not achieved and constant delays caused
additional financial and commercial pressures for AEG.
While PDI focused on the production targets, AEG continued driving commercial leads and customer
interest for CoalSwitch® fuel both in North America and internationally and continued to secure
prospective customer orders for initial CoalSwitch® production volumes.
During H1 2023 AEG invested in new management expertise with the hire of a COO & CTO based in the
US, to complement the existing sales activities in the US and worldwide.
During H2 2023 AEG expanded its territorial horizons, commencing sales activities in Southeast Asia to
look for additional production and sales opportunities for CoalSwitch®.
During H2 2023 AEG was awarded the relevant CoalSwitch® trademark patents for the EU. CoalSwitch® is
now a registered and approved trademark in all territories including US, Canda, Europe (including the UK)
and currently additional trademark applications have commenced throughout Asia and Japan.
Further key risks and uncertainties faced by the Group are disclosed on pages 9 to 10.
ACTIVE ENERGY GROUP PLC
3
BOARD STATEMENT
Executive Summary
Active Energy Group plc (“Active Energy” or the “Company”) spent most of 2023 focused on trying to ensure
that the vital business components for its commercial success were established and that the Company could
successfully move towards a production facility for CoalSwitch® fuel. Given the Company’s constrained access
to capital throughout the year, the Company had to continuously balance the strategic goals with economic
realities. As events post the year end demonstrated and despite all the positive contributions made by all
members of Active Energy’ team during the last 18 months, the Company had to sadly succumb to these
economic realities in 2024.
The beginning of 2023 presented a series of challenges and opportunities for Active Energy. The team’s focus
was upon three components to drive Active Energy toward commercial success, and these included: -
Production Development at the Ashland Reference Facility in Maine (the “Reference Facility”): Working with
our production partner Player Design, Inc. (“PDI”), the Company’s focus was to establish an operating production
platform to accommodate customer’s requests for CoalSwitch® fuel and to have CoalSwitch® fuel samples
available to potential customers. In 2023, PDI did complete certain commercial milestones toward construction
of the Reference Facility, including the award of the requisite permits to complete full scale construction and
the installation of the requisite equipment to allow first production operations to commence. However, these
processes were always behind schedule and as the year progressed, these delays compounded additional
commercial pressures for Active Energy
Market and Product Development for CoalSwitch® fuel: While PDI focused on the production challenges, Active
Energy continued to drive toward commercial leads and gather prospective customer interest. In the first half
of 2023, Active Energy invested in new management expertise to complement the existing sales activities in the
U.S. and worldwide. During 2023, there was the active promotion of both the environmental and economic
benefits of the fuel, including developing strategies to obtain carbon credits and additional renewable energy
incentives in the US. In Q3 2023, the Company expanded its territorial horizons, commencing work in Southeast
Asia to look for additional production and sales opportunities for the fuel.
Strengthen the Corporate Infrastructure with key management hires: We added depth and breadth to the team
with the hire of a US based Chief Operating Officer and US based Chief Technology Officer during H1 2023. Both
these individuals had significant biomass industry expertise and were excited at the commercial opportunities
that CoalSwitch® could present for the existing biomass industry. Later in 2023, we worked toward additional
expansion of these sales and production activities in South-East Asia with new team members hired to develop
their local networks in the region.
1. Production Development at the Ashland Reference Facility, Maine
Working with PDI, the Company spent 2023 working on engineering and design, permits, certifications and other
regulatory requirements needed to manufacture and sell CoalSwitch®.
Construction and Operational Permit for the Reference Facility
Construction of the Reference Facility finally commenced in mid-2023 when Active Energy announced that the
appropriate permit had been awarded to PDI and its associates by the Department of Environmental Protection
in the State of Maine on 24th May 2023. During the first half of 2023, PDI regularly informed Active Energy of the
various delays for the project ranging from design issues, component delivery delays, permit delays and
subsequent construction delays. The Board made every effort to provide shareholders with the clearest
timetable toward production. However, it was recognised that the timelines extended beyond the expectations
that had been initially set. Despite the delays, Active Energy continued to receive interest from prospective
customers, both in the US and internationally, and requests to visit the operations at the Reference Facility. This
provided important encouragement to all parties that once the Reference Facility was operational, the project
could be successful.
ACTIVE ENERGY GROUP PLC
4
However, project delays continued into H2 2023, with PDI unable to provide updates on the status of the
Reference Facility. The delays resulted in more expense and PDI became increasingly concerned on the project
viability. Active Energy offered the new management resources at its disposal to assist PDI in completing the
project. These offers were declined by PDI as it chose to seek its own resolution to the construction and
operational issues at the Reference Facility.
One key concern for PDI was the funding required to complete the construction of the Reference Facility. PDI
had initially agreed to meet all the costs of construction through its own resources, but it became quickly
apparent that, owing to the project delays, this was becoming problematic for PDI to complete alone. Active
Energy was unable to assist given its own limited access to capital at that time. Active Energy did have
conversations with various investors; however, all were hesitant to commit additional funding until production
of CoalSwitch® fuel at the Reference Facility had commenced.
2. Market and Product Development for CoalSwitch® fuel
In July 2022, the Company announced that, while PDI would focus on the engineering development activities for
the CoalSwitch® program focussing on activities at Ashland, Active Energy would focus its efforts on market
development opportunities, both in the US and internationally. The commercial goals between the parties were
clear. PDI would focus on the completion of the Reference Facility and Active Energy would establish the
customer base and the first markets for CoalSwitch® fuel. Upon first deliveries of CoalSwitch® fuel, the strategy
would then be finalised between the parties to work toward the development of new production plants and
product deliveries.
Sales and Promotional Activities during H1 2023
Since that announcement, Active Energy had forged its way to create a market presence both for black pellet
fuels and to secure a future pipeline of fuel orders ahead of first production volumes from the Reference Facility.
The Company’s experienced sales personnel faced regular challenges given the flow of announcements around
future production delays from the Reference Facility during 2023 and yet, in spite of this, the team managed to
preserve and increase market interest.
The team presented at the Advanced Bioeconomy Leadership Conference in March 2023 in Washington DC to
demonstrate the CoalSwitch® fuel merits to an audience of Environmental, Social and Governance leaders, US
Government officials and, more importantly, prospective commercial partners. In addition, in September 2023,
Active Energy was elected to become a member of the International Biomass Torrefaction and Carbonisation
Council (“IBTC”). The IBTC promotes the sustainable production of various torrefied or carbonised technology
products and considers all forms of fuels including the steam treated pellets which CoalSwitch® fuels
demonstrate.
Marketing activities in North America
Throughout the year, Active Energy also continued in its efforts to sell CoalSwitch® fuel, and to create new
market opportunities aligned to the current consumption of fossil fuels in North America. The focus had been
to develop two distinct markets, the first for co-firing CoalSwitch® with coal and the second to create new
markets for these improved biomass fuels.
The focus of the sales activities and potential customer interest moved beyond the conventional power
generation industry and extended to include various heavy industries including cement, pulp and paper
industries, where local and national emissions regulations continue to expand. The reception from the
prospective customers was highly encouraging.
The key to unlock each of these future sales opportunities had been for CoalSwitch® fuel to be in production, in
any amount of volume, at the Reference Facility. Active Energy received the definitive feedback from prospective
ACTIVE ENERGY GROUP PLC
5
customers that with delivered CoalSwitch® fuel, appropriate testing at specific industrial facilities could
commence and commercial discussions on fuel supplies under long term contract could begin.
Continuing investment in IP
Throughout the year, Active Energy continued to extend its CoalSwitch® intellectual property portfolio. In
February 2023, the US patent office granted two patents, and in Canada, one patent was granted for the
treatment and preparation of biomass to be used as a fuel. This was quickly followed by the issuance of the
relevant trademark registrations in both the US, Canada and the UK. In June 2023, the Company was also
awarded the relevant CoalSwitch® trademark patents for the EU.
Relevant applications (both for patents and trademarks) continued throughout the year and continued in these
territories during 2024. Most importantly, the CoalSwitch® trademark is now registered and approved in all
territories including US, Canada, Europe (including the UK) and additional trademark applications have
commenced throughout Asia, notably Japan.
The Board believed that securing the relevant trademarks and patents would be a significant milestone for the
Company as production volumes commenced. Strengthening the intellectual property portfolio would not only
support the ongoing advancement of its CoalSwitch® technology, but also enhance brand recognition
positioning Active Energy well for the future sales and development of black pellet fuels.
3. Strengthen the Corporate Infrastructure with key hires
The Company also took several key steps to prepare for future growth and scale expected after commencement
of first commercial production (including relevant technology and ‘know-how’ developments) and to that end,
during H1 2023, Active Energy hired senior management team members to build the execution capability.
Strengthened management team during 2023
In November 2022, Michelle Fagan had been appointed as the Company’s Chief Financial Officer. Michelle has
been working with the Company's management team since October 2020 and has 24 years' experience as a
finance professional. Her careful oversight during 2023 proved invaluable in the strategic expansion of the
executive team.
In March 2023, the Company appointed Steve Schaar as Chief Operating Officer to focus on the development of
CoalSwitch® production and operations in the United States. Steve had more than 25 years' experience of
operations, project development, program management, and new product launches from a broad range of
industries. As new production centres would be added to the production portfolio, Steve’s experience would be
invaluable.
In July 2023, the Company appointed Barron Hewetson as the Chief Technology Officer to focus on the future
development of CoalSwitch® products and new production methods. Barron has over 20 years biomass industry
experience, most recently holding senior management positions at Enviva Biomass Inc. including Director of
Innovation and Product Management.
These individuals had the proven track record of producing and selling millions of tons of biomass fuels. Each of
these talented and experienced individuals had joined Active Energy looking to assist in the future success of
CoalSwitch® and in a short time, they each made significant contributions toward the organisation. The Board
was wholly supportive of these hires and believed that such hires would readily complement PDI’s activities in
completing the Reference Facility.
Post period end and outlook
As the end of the calendar year approached, various deadlines and goals for production of fuel had not been
achieved. PDI informed Active Energy toward the end of 2023 that further delays in the commencement of
ACTIVE ENERGY GROUP PLC
6
production from the Reference Facility were inevitable and indicative production deadlines would extend
further into H1 2024. Further, PDI indicated that it was unwilling to continue with the existing commercial terms
between the parties and wanted to end its relationship with Active Energy. The Group’s activities in Ashland
ceased and management commenced the process of disposing of its plant and equipment located in Ashland.
At that point, Active Energy had limited cash resources available to it and the Board was wholly aware that to
commence on a new project with a new commercial partner would be extremely challenging both in financial
and operational terms. The Board attempted to seek an operational compromise with PDI to create even limited
first production volumes of fuel from the Reference Facility and thereby allowing Active Energy the opportunity
to progress. No such terms were agreed, and a settlement agreement was entered into with PDI in March 2024
under which PDI returned funds advanced by Active Energy towards development of the Ashland facility and
PDI purchased the Group’s plant and equipment located in Ashland. All existing intellectual property relating to
CoalSwitch® was returned to Active Energy.
Active Energy became a listed corporate vehicle, with intellectual property to produce a next generation black
pellet fuel but with no project to demonstrate nor commercialize this. In addition, Active Energy did not have
the financial resources to be able to commence a new project over a realistic project timeframe and at that
same time maintain the management team that the Board had worked hard to build. During Q1 2024, the Board
and the executive management team attempted to find resolutions and examine all commercial opportunities.
These challenges were heightened with the public failure of Enviva Biomass Inc., which fell into Chapter 11
during H1 2024. These circumstances, together with the industry track record meant that Active Energy could
simply not attract any additional shareholder or outside investor support to rebuild the business in sufficient
time.
In the light of these circumstances, the Board made the decision on 9th April 2024, to make cost cuts on the day
to day running of the PLC and examine alternative options to continue to monetise the CoalSwitch® intellectual
property in other forms. The operational team were released from their obligations to Active Energy to look for
alternate opportunities. The Board remains extremely grateful for each team member’s dedication and loyalty
through these difficult circumstances.
The Board would also like to thank all of their colleagues and commercial partners for all their work and
commitment toward the CoalSwitch® program in 2023 and 2024. Active Energy had built a team of biomass
industry experience, which the Board considered to be ‘world leading’ in its track record, each of whom had the
vision to progress an industry toward vastly improved environmental standards within sensible economic goals.
Unfortunately, Active Energy was unable to access sufficient capital to prove these goals to its shareholders and
the industry as a whole.
Jason Zimmermann and Max Aitken resigned as directors of the Company on 1 November 2024.
Going concern
The Directors have given careful consideration to the appropriateness of the going concern basis in the
preparation of the Annual Report and Financial Statements for the year ended 31 December 2023. Further
details of the Company’s current financial position and ability to continue as a going concern are to be found in
the Financial Review and in Note 1 of the Financial Statements. The Directors are confident that the funding
required for the Group to continue as a going concern for the next twelve months will be available and have
therefore prepared the Financial Statements on a going concern basis.
Michael Rowan
James Leahy
CEO
Chairman
Signed
Date 3rd December 2024
Signed
ACTIVE ENERGY GROUP PLC
7
FINANCE REVIEW FOR THE YEAR ENDED 31 DECEMBER 2023
The Consolidated Financial Statements for the year ended 31 December 2023 (“Current Year”) is compared to
the year ended 31 December 2022 (“Prior Year”).
Financing
The Group did not raise debt or equity finance during the year. The Group had net cash of US$0.3m at the end
of the year (2022: US$2.6m).
Subsequent events
On 4 March 2024 the Group agreed a settlement with Player Design, Inc. and its connected parties (“PDI”) in
relation to the Group’s aborted operations in Ashland, Maine. Under this settlement the Group received cash of
$1,650,000 which represented consideration for the transfer of certain property, plant and equipment to PDI,
the return of certain cash advances made by the Group to PDI for the development of the Ashland facility and
the settlement of all claims between the Group and PDI. The Group has been unable to secure a new commercial
partner with whom to commercialise its CoalSwitch® technology but continues to own the intellectual property
to produce a black pellet fuel. In April 2024 the board decided to scale back the operations of the Group and
focus its efforts on trying to monetise its CoalSwitch® Technology.
Fundraising activities through 2023
There were no fundraising activities, either of equity or debt, during 2023.
Performance
During 2023 while PDI focused on the production challenges, AEG continued to drive toward commercial leads
and gather prospective customer interest. In the first half of 2023 AEG invested in new management expertise
to complement the existing sales activities in the US and worldwide. During 2023, there was the active
promotion of both the environmental and economic benefits of the fuel, including developing strategies to
obtain carbon credits and additional renewable energy incentives in the US. In Q3 2023, the Company expanded
its territorial horizons, commencing work in Southeast Asia to look for additional production and sales
opportunities for the fuel.
The Company continued its tight financial controls and treasury management within its finance department
during 2023 to ensure use of funds is kept in line with enhancing shareholder’s investment and this has
continued to date. Given the current situation the company finds itself in the company continues to try find
ways of enhancing shareholders return on investment in the most efficient and effective way it possibly can.
Continuing/discontinued operations
The overall loss for the year was US$15,517,696 (2022: US$1,343,745) with a basic and diluted loss per share of
$9.59 cents (2022: $0.83 cents).
Administrative costs decreased year on year due to cost cutting measures at US$3,338,410 (2022: US$3,191,376).
The net finance income of US$23,802 (2022: $24,173) represents interest received on deposited funds less
interest payable on borrowings.
Non-current assets
The CoalSwitch® Equipment and other plant and equipment held at the Ashland Reference facility were held for
sale at year end and were included in the PDI settlement agreement post year end.
IP was held at an estimated sales proceeds value based on the IP assessment report.
Current assets
Trade and other receivables of US$845,714 (2022: US$905,924) consist mainly of US$774,669 of project
advances to Player Design Inc. for the development of the Ashland facility. These advances were repaid post
year end as part of the settlement agreement with PDI.
ACTIVE ENERGY GROUP PLC
8
Current liabilities
Trade and other payables were US$665,564 (2022: US$1,199,796). The largest reduction is due to stringent cost
management reducing the trade payables due at year end significantly. Trade payables was $381,926 in 2023
and $428,106 in 2022.
Non-current liabilities
Loans and borrowings, related to COVID 19 Government loans, decreased slightly to US$120,846 (2022:
US$133,940) due to repayments on the UK government guaranteed loan, which is repayable over 5 years.
Repayments on the US government loan commenced in December 2022 and continued throughout 2023.
Cashflow
Operating cash outflows were US$2,245,340 (2022: US$2,554,563). The reduced outflow results from the
reductions in working capital and cost management measures.
There was no net cash flows from investing activities (2022: US$3,037,258 cash inflow comprising proceeds of
US$3,767,471 from the disposal of the Lumberton Site less cash of US$730,713 expended on the creation of
intellectual property and know how in relation to the new Ashland Reference Facility).
Cash and cash equivalents of US$319,137 were on hand at December 2023 year end (2022: US$2,614,472).
Going concern
The Financial Statements have been prepared on a going concern basis. In October 2024 the Company received
loan note finance of £200,000 from, a new investor, Zen Ventures Limited and it has subsequently received a
commitment to provide additional future funding from Zen Ventures Limited and parties connected to Zen
Ventures Limited. The facility provided is up to £500,000 and is secured by a debenture. The Board, having
reviewed the cash flow forecasts, consider that this funding will be sufficient to enable the Company to settle
its liabilities as they fall due for at least one year from the date of approval of these financial statements.
However, the loan notes, and by extension the future funding from Zen Ventures Limited and its connected
parties, are subject to approval by the Company’s shareholders at its next general meeting. The Board consider
that this represents a material uncertainty that may cast significant doubt on the Company’s ability to continue
as a going concern (see note 1 to the financial statements).
Section 172 Statement
The Directors are well aware of their duty under Section 172 of the Companies Act 2006 to act in the way which
they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its
members as a whole and, in doing so, to have regard (amongst other matters) to:
The likely consequences of any decision in the long term;
The interests of the Company’s employees;
The need to foster the Company’s business relationships with suppliers, customers and others;
The impact of the Company’s operations on the community and the environment;
The desirability of the company maintaining a reputation for high standards of business conduct; and
The need to act fairly between members of the Company.
The Board recognises that the long-term success of the Group requires positive interaction with its stakeholders,
including shareholders, customers, suppliers, governmental and regulatory authorities. The Directors seek to
actively identify and positively engage with key stakeholders in an open and constructive manner. The Board
believes that this strategy enables our stakeholders to better understand the activities, needs and challenges of
the business and enables the Board to better understand and address relevant stakeholder views which will
assist the Board in its decision making and to discharge its duties under Section 172 of the Companies Act 2006.
Further corporate governance matters related to this Section 172 Statement can be found on page 19.
ACTIVE ENERGY GROUP PLC
9
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is subject to a number of potential risks and uncertainties, which could have a material impact on the
short-term and long-term performance of the Group. This could cause actual results to differ materially from
the Board’s expectations.
The management of risk is the collective responsibility of the Board of Directors. To mitigate this risk the Group
has developed a range of internal controls and procedures. The controls, procedures and identified risks are
discussed and reviewed annually by the Audit Committee and their findings and recommendations are reported
to the Board. The principal risks and uncertainties inherent in the Group’s business model have been grouped
into three categories: strategic, financial and regulatory. The risk items and the planned actions to mitigate these
risks are listed below:
Risk (Board’s view of the change in
status since 2022)
2023 Outcome and Mitigation Action
STRATEGIC
Governmental development of
policies to support an environmental
improvement agenda
(Better)
Whilst limited in the resources to affect global or US federal
policy change, the Group will utilise the resources at its disposal
to positively affect policy direction.
Risk (Board’s view of the change in
status since 2022)
2023 Outcome and Mitigation Action
FINANCIAL
Growth and expansion are reliant on access to capital
(1) Insufficient cash resources to
maintain as a going concern
(Unchanged)
Cash management remains critical at this vital point in our
expansion. Management has and continues to maintain a tight
control over the Group’s cash resources and is frugal in capital
allocation, most notably ensuring all company liabilities and
debts are settled.
The Group’s ability to access funding
to meet commitments and
development plans
(Worse)
There is no guarantee that current market conditions will
permit the raising of necessary funds, by way of debt financing
or the issue of new equity, as and when the Group requires in
the coming months.
The Board is consistently monitoring the timing and nature of
additional funding requirements to bring the company’s
accounts up to date, have the company relisted and continue
with working capital requirements.
Given current equity capital market conditions, the Company
remains at risk regarding its ability to raise sufficient capital to
accelerate and increase production activities and increase
production volumes. During 2024 the Company received loan
note finance of £200,000 from Zen Ventures Limited and it has
subsequently received a commitment to provide additional
future funding from Zen Ventures Limited and parties
connected to Zen Ventures Limited
ACTIVE ENERGY GROUP PLC
10
The Group’s ability to access local
government or local regulatory
support in each jurisdiction we
operate within
(Unchanged)
Engagement with local government or regulatory authorities is
key to the Group’s future success. The Group will use all the
tools it has available to ensure this engagement is productive
and that all requisite support is obtained both for initial
approvals and on an on-going operational basis.
Inflationary pressure on capital and
operating costs
(Worse)
Current global inflationary and supply pressures continue and
may result in the group being unable to deliver capital projects
on time and on budget.
Additionally, inflation impacts operating costs, transport and
logistics costs and feedstock pricing, all of which remain under
immense pressure and difficult to confirm. It is also uncertain
whether any or all of these costs may be passed on to
customers in the contract pricing for CoalSwitch®. Price
escalations may impact the operational profitability for the
Company.
Risk (Board’s view of the change in
status since 2022)
2023 Outcome and Mitigation Action
REGULATORY
The company is listed on the AIM market of the London Stock
Exchange and subject to the associated regulatory regime
Failure to comply with law and
regulations in the jurisdictions in
which we operate
(Unchanged)
The Group employs advisers with the requisite experience and
skill sets to manage the Group’s business within all applicable
laws and regulations.
Suspension of the company’s shares
trading on AIM
(New)
On 1st of July 2024 the company’s shares were suspended from
trading on AIM. In order to reinstate trading the company must
publish its annual report for the year ended 31 December 2023
and interim report for the six months ended 30 June 2024. This
must be done before the 31st of December 2024 to avoid
permanent delisting. The directors have taken steps to ensure
that these reports are published before the end of the year.
ACTIVE ENERGY GROUP PLC
11
CORPORATE SOCIAL RESPONSIBILITY REPORT
At its core Active Energy is seeking to improve the quality of the environment. CoalSwitch® is a next generation
biomass fuel utilising low value forestry residual. The production of CoalSwitch®, whether by Active Energy or
by a third party acquiring the intellectual property, remains the core purpose of the Company. A biomass fuel
capable of co-firing with coal which can result in significantly reduced emissions represents an important
sustainable power source during the transitionary period as the world moves away from consumption of fossil
fuels. The requirement is to increase power generation whilst reducing all emissions and consumption of existing
natural resources. We believe CoalSwitch® is uniquely positioned to contribute towards those sustainability
goals for the biomass fuel sector, the associated sectors of coal consuming industries and the lumber industry.
Corporate Responsibility
The Board takes regular account of the significance of social, environmental, and ethical matters affecting the
Group wherever it operates. It is developing a specific set of policies on corporate social responsibility, which
seek to protect the interests of all its stakeholders through ethical and transparent actions and include an anti-
corruption policy and code of conduct.
Environment
The Board recognises that its activities have the potential to impact the environment and is committed to
working with states and other bodies in each of the territories in which it may operate to establish and follow
international principles of environmental sustainability and renewability.
At the Ashland Reference Facility, Maine, USA, the Company worked closely with Player Design Inc., the owner
of the site, to ensure it complied with all environmental related requirements in the State of Maine.
Likewise, the Company will comply with all environmental related requirements arising from any future
CoalSwitch® operations in any applicable states.
Suppliers and Contractors
The Group recognises that the goodwill of its contractors, consultants and suppliers is crucial to the success of
its business and seeks to build and maintain this goodwill through fair and transparent business practices. The
Group aims to settle genuine liabilities in accordance with contractual obligations.
Health and Safety
The Board recognises that it has a responsibility to provide strategic leadership and direction in the development
and maintenance of the Group’s health and safety strategy, in order to protect all of its stakeholders. The Group
will always remain vigilant in this regard to ensure the health and safety of all stakeholders.
Community relations
Active Energy seeks to engage with the local communities, in which the Company operates, on issues as they
arise, and more generally in everyday matters. The Group employs locally to provide opportunities for those in
the communities within which we operate, will support local initiatives, and will pay local taxes and other fiscal
contributions as they become due.
Gender and diversity
As the Company executes its growth strategy and requires additional board representation, the question of
gender and sexual equality will be included in the nominations committee brief for consideration.
The Company hires local representatives on a non-discriminatory basis, cognisant of gender and diversity.
ACTIVE ENERGY GROUP PLC
12
Enhanced governance
Governance processes are discussed in the Corporate Governance Statement. The Board remains committed to
improving the governance of the Company and encourages stakeholders who identify opportunities for
improvement to notify the Board.
The Strategic Report has been approved by the Board of Directors and signed on behalf of the Board.
James Leahy
Non-Executive Chairman
3rd December 2024
ACTIVE ENERGY GROUP PLC
13
CORPORATE GOVERNANCE
DIRECTORS & SENIOR MANAGEMENT INFORMATION
James Leahy
Non-Executive Chairman
Beginning his career at the London
Metal Exchange, James has spent
the subsequent 35 years involved in
stockbroking and commodities in a
variety of roles, including research
analyst,
equity
salesman
and
specialist corporate broker, which
covered mining finance, origination,
and distribution. He has worked on
a wide range of projects worldwide,
ranging from industrial minerals,
coal, iron ore, precious metals,
copper,
diamonds,
lithium,
uranium, plantations, forestry, and
palm oil. Lately, he has employed
his corporate governance skills,
having
gained
substantial
experience as an independent
director on the boards of several
quoted and unquoted companies.
In addition, Mr Leahy has direct
experience in capital markets,
having worked at James Capel,
Credit
Lyonnais,
Nedbank,
Canaccord and Mirabaud, where he
gained invaluable experience with
international
institutional
fund
managers, hedge funds, private
equity
and
sector
specialist
investors. Additionally, Mr Leahy
has been involved in many IPOs, as
well as primary and secondary
placings, and the development of
junior mining companies through to
production.
He is currently a director of the
listed fund Geiger Counter Ltd,
Savannah Resources Plc and Capital
Metals Plc.
Michael Rowan
Chief Executive Officer
Michael was appointed Chief
Executive officer in July 2018 after
a 3-year tenure as a non-executive
director of the Group. Michael is a
qualified
solicitor,
qualified
corporate financier with a broad
range of banking, commercial and
legal experience.
After
graduating
from
the
University
of
Cambridge,
he
practised
as
a
solicitor
at
Linklaters in London, Hong Kong,
and New York. He then moved to
Merrill Lynch International in
London and New York, and over a
10-year period, he worked in
Equity
Capital
Markets
and
Investment Banking division, with
responsibility
for
origination,
execution
and
commercial
negotiation of equity and equity-
linked
transactions,
including
major
privatisations
and
demutualisation’s in the UK and
EMEA regions.
Since
leaving
Merrill
Lynch,
Michael has been involved in the
management of various start up
and microcap companies over the
last decade. His focus has been on
technology and renewable energy
sectors. The companies have been
based in London, the US and
Canada and have included both
private companies and companies
listed on the junior stock markets,
including AIM and OTC.
ACTIVE ENERGY GROUP PLC
14
Jason Zimmermann
Non-Executive Director
Resigned 01 November 2024
Jason Zimmermann has over 20
years’ experience in the timber
resource sector. He is currently the
President of Zimmfor Management
Services
Ltd
(“Zimmfor”),
an
industry leading consulting firm
focused on sustainable forestry
management
and
Managing
Partner at GreenRaise Consulting
GmbH and Global Forest Support
GmbH – both businesses focus on
carbon
offset
project
implementation. Jason has field and
technical
expertise
relating
to
timberland assets worldwide and
Zimmfor has worked with Active
Energy in previous projects in
Canada and Ukraine. He is a
Registered Professional Forester
and a graduate of the University of
British Columbia with a Bachelor of
Science in Forestry
Max Aitken
Non-Executive Director
Resigned 01 November 2024
Max Aitken has founded and been
instrumental in the financing of
several businesses in the energy
industry. He founded and is CEO of
Estover Energy, a leader in the UK
biomass industry which built
wood-fuelled biomass CHP plants
using over 700,000 tonnes of fuel
annually, financed with £350m of
capital. He is a trustee of the
Beaverbrook
Foundation
in
London, and President of the
Beaverbrook
Canadian
Foundation in Montreal. He is
Chairman of 3ti, a fast-growing
solar EV charging business.
ACTIVE ENERGY GROUP PLC
15
Country of Incorporation
England and Wales
Company number: 03148295
Directors
J Leahy
T M S Rowan
M Aitken (Resigned 01 November 2024)
J Zimmermann (Resigned 01 November 2024)
Secretary
Cargill Management Services Limited
27- 28Eastcastle Street
London
W1W 8DH
Registered Office
27- 28Eastcastle Street
London
W1W 8DH
Auditors
Gravita Audit Limited
Chartered Accountants and Registered Auditors
Aldgate Tower
2 Leman Street
London E1 8FA
Bankers
HSBC Bank Plc
69 Pall Mall
London
SW1Y 5EY
Solicitors
Knights Limited
400 Dashwood, Lang Road
Weybridge, Surrey
KT15 2HJ
Nominated Advisor& Broker
Allenby Capital Limited
5 St Helen’s Place
London
EC3A 6AB
Nominated Joint Broker
Zeus Capital Limited
125 Old Broad Street
12th Floor, London
EC2N 1AR
Registrars
Share Registrars
The Courtyard, 17 West Street
Farnham
GU9 7DR
ACTIVE ENERGY GROUP PLC
16
CORPORATE GOVERNANCE STATEMENT
The Group is committed to high standards of corporate governance and seeks to continually evaluate its policies,
procedures, and structures to ensure that they are fit for purpose. It is the responsibility of the Board to ensure
that the Group is managed in an efficient, effective, and entrepreneurial manner for the benefit of all
shareholders over the longer term. Corporate governance is an important aspect of this, reducing risk and adding
value to our business.
As a Company whose shares are traded on the AIM market of the London Stock Exchange, the Company complies
with the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) as the basis of the Group’s
Governance framework and its Statement of Compliance can be found on the Company website:
https://www.aegplc.com/investors/corporate-governance/
Board
The Board is collectively responsible for the governance of the Company and is accountable to the Company’s
shareholders for the long-term success of the Group. The Board sets the Company’s strategic objectives and
ensures that they are properly pursued within a sound framework of internal controls and risk management. It
is ultimately responsible for the management, governance, controls, risk management, direction, and
performance of the Group.
At the date of this report the Board of Directors currently has two members, comprising the Non-Executive
Chairman and Chief Executive Officer. James Leahy was appointed Non-Executive Chairman on 1 February 2021,
replacing Michael Rowan, who moved to the role of Chief Executive Officer.
The Chairman is responsible for leadership of the Board. He is assisted by other Board members in formulating
strategy and, once agreed by the Board, the Executive Directors are responsible for its delivery. The structure of
the Board ensures that no one individual dominates the decision-making process and the Chairman facilitates
and ensures that there is effective contribution from other Executive and Non-Executive Directors. The Board
provides effective leadership and overall management of the Group’s affairs. The Board approves the Group’s
strategy and investment plans and regularly reviews operational and financial performance and risk
management matters. This includes the approval of business plans, the annual budget, major capital
expenditure, acquisitions and disposals, allocation and raising of funds, risk management policies and the
approval of the Financial Statements.
The Board currently represents an effective balance of skills and experience in the renewable energy and
biofuels industries, finance, corporate and business development as well as entrepreneurial and country
background. The Directors are individually responsible for maintaining their respective continuous professional
development. The experience and knowledge of each of the Directors gives them the ability to constructively
challenge the strategy and to scrutinise performance. The Board is committed to ensuring diversity of skill and
experience. Biographical details of the Directors as at the date of the Annual Report and Accounts are available
in the section ‘Directors and Other Information’ and on the Company’s website.
The Board is aware of other commitments and interests of its directors and changes to these commitments and
interests are reported to and, where appropriate, agreed with the rest of the Board. Executive directors are
employed on a full-time basis, whereas non-executive directors provide a minimum of two days per month, plus
additional time as required.
The Board holds a minimum of four scheduled meetings each year. Additional meetings are held where
necessary to consider matters of importance which cannot be held over until the next scheduled meeting. During
the current year, the Board held four scheduled meetings and met a further fifteen times. The Board may, when
required, approve matters by written resolutions and/or appointed a committee to approve specific matters.
Details of the attendance of the Directors at eligible meetings, together with meetings of the Audit and
Remuneration Committees are set out below.
ACTIVE ENERGY GROUP PLC
17
ATTENDANCE RECORD during 2023
Directors
Board
(Scheduled)
Board
(Additional)
Audit
Committee
Remuneration
Committee
James Leahy
9 of 9
6 of 6
3 of 3
1 of 1
Michael Rowan
9 of 9
6 of 6
3 of 3
1 of 1
Max Aitken
9 of 9
6 of 6
3 of 3
1 of 1
Jason Zimmermann
9 of 9
6 of 6
3 of 3
1 of 1
The Company has engaged an external company, Cargill Management Services Limited, to perform company
secretarial services. The company secretary is responsible for all corporate filings, compliance, preparation of
board materials and attendance of the AGM.
Board Committees
Audit Committee
The Audit Committee is chaired by James Leahy. The Chief Executive Officer and other members of the Board
attend the Audit Committee meetings by invitation. The Committee meets at least twice a year. Meetings are
held in compliance with the QCA Code regarding the composition of Audit Committees.
During 2023, the Committee met twice. Additional meetings are held where necessary to consider matters
referred by the Board. It is responsible for ensuring that the financial activities of the Group are properly
monitored, controlled, and reported on, complying with relevant legal requirements. The Committee receives
and reviews reports from management and the Group’s auditors relating to the Group’s Report and Accounts,
the interim results and review of the accounting policies.
The Committee aims to meet with the auditors at least twice a year, once at the audit planning stage to consider
the scope of the audit and thereafter at the reporting stage to receive post-audit findings. The ultimate
responsibility for reviewing and approving the annual report remains with the Board of Directors. The
Committee is also responsible for reviewing the relationship with the external auditors, making
recommendations to the Board on their appointment and remuneration, monitoring their independence, as well
as assessing scope and results of their work, including any non-audit work. The Committee authorises any non-
audit work to be carried out by the external auditors and ensures that the objectivity and independence of the
external auditor has not been impaired in anyway by the nature of the non-audit work undertaken, the level of
non-audit fees charged for such work or any other factors.
The Committee, with management, reviews the effectiveness of internal controls.
ACTIVE ENERGY GROUP PLC
18
Remuneration Committee
The Remuneration Committee is chaired by James Leahy. The Committee recommends to the Board the scale
and structure of the Executive Directors’ remuneration and that of senior management and the basis of their
service agreements with due regard to the interests of shareholders. In determining the remuneration of the
Executive Directors and senior management, the Committee seeks to ensure that the Company will be able to
attract and retain executives of the highest calibre. It makes recommendations to the Board concerning bonuses
and share awards. No Director participates in discussions or decisions concerning his own remuneration. Further
details regarding matters considered by the Remuneration Committee during the year are outlined in the
Remuneration Report. The Chairman of the Committee will attend the AGM and respond to any shareholder
questions on the Committee’s activities.
Nomination Committee
The Company does not currently have a nomination committee as the Board does not consider it appropriate
to establish such a committee at this stage of the Company's development. Decisions which would usually be
taken by the nomination committee, including recruitment and senior appointments are be taken by the Board
as a whole. A review of the composition of the board (including skills, knowledge, and experience) is performed
annually by the Board.
Board Evaluation
Internal evaluation of the Board, the committees and individual Directors is seen as an important next step in
the development of the Board. The Directors are currently reviewing the timing and process through which this
evaluation will be undertaken, including peer appraisal, questionnaires, and discussions to determine the
effectiveness and performance in various areas as well as continued independence.
No external evaluation of the Board took place during the year.
ACTIVE ENERGY GROUP PLC
19
Other Corporate governance Matters
The matters below relate to the Section 172 statement on page 8.
Environment
The Board recognises that its principal activities have the potential to impact the environment and is committed
to working with states and other bodies in all the territories in which it operates to establish and follow
international principles of environmental sustainability and renewability. The Company’s strategy is intended to
have a positive impact on the environment and the Board seeks to ensure that all activities consider the potential
impact upon the environment.
Employees
The Group engages its employees in all aspects of the business and seeks to remunerate them fairly. The Group
gives full and fair consideration to applications for employment regardless of age, gender, colour, ethnicity,
disability, nationality, religious beliefs, or sexual orientation. The Board takes employees’ interest into account
when making decisions. Any suggestions from employees aimed at improving the Group’s performance or
practices are welcomed.
Suppliers and Contractors
The Group recognises that the goodwill of its contractors, consultants and suppliers is important to the success
of its business and seeks to build and maintain this goodwill through fair and transparent business practices. The
Group aims to settle genuine liabilities in accordance with contractual obligations.
Health and Safety
The Board recognises that it has a responsibility to provide strategic leadership and direction in the development
and maintenance of the Group’s health and safety strategy, to protect all its stakeholders.
Shareholders
The Board is active in communicating with all its shareholders and encourages two-way communication with
both its institutional and private investors, subject to compliance with the AIM Rules and the Market Abuse
Regulations. The Executive Directors talk regularly with the Company’s major shareholders to ensure a mutual
understanding of objectives and to further explain the Group’s strategy and ensure that their views are
communicated fully to the Board.
The Board recognises the AGM as an important opportunity to meet with private shareholders. In normal
circumstances, the Non-Executive Directors attend the shareholders’ meetings and are available to answer any
relevant questions.
Extensive information about the Group’s activities is included in the Annual Report and the Interim Report. The
Group also issues regular updates to shareholders. Market sensitive information is regularly released to all
shareholders in accordance with London Stock Exchange rules for AIM-listed companies. The Company
maintains a corporate website where information on the Company is regularly updated, including Annual and
Interim Reports, presentations, and announcements.
ACTIVE ENERGY GROUP PLC
20
Internal Controls and Risk Management
The Directors are responsible for the Group’s internal financial controls. Although no system of internal financial
control can provide absolute assurance against material misstatement or loss, the Group’s systems and
processes are designed to provide reasonable assurance that issues are identified in a timely basis and dealt
with appropriately.
The Board acknowledges that it is responsible for establishing and maintaining the Group’s system of internal
controls and reviewing its effectiveness. The procedures that include, inter alia, financial, operational, health
and safety, compliance matters and risk management (as detailed in the Principal Risks and Uncertainties
section) are reviewed on an ongoing basis.
The Group’s internal control procedures include Board approval for all significant projects, including corporate
transactions and major capital projects. The Board receives and reviews regular reports covering both the
technical progress of its projects and the Group’s financial affairs to facilitate its control.
The Group has in place internal control and risk management systems in relation to the Group’s financial
reporting process and the Group’s process for preparing consolidated accounts, which the Board considers
adequate in view of the size and nature of the Group’s operations. The Audit Committee reviews draft Annual
and Interim Reports before recommending them for approval to the Board.
The Board acknowledges that it is responsible for managing and preventing fraud, corruption or any other
malfeasance which comes to its attention, and to implementing control systems to ensure that knowledge of
such events is communicated to the Board in a timely and accurate manner. The internal control system can
only provide reasonable, rather than absolute, assurance against material misstatement or loss. The Board has
considered the need for a separate internal audit function but, bearing in mind the present size and composition
of the Group, does not consider it necessary for the time being.
ACTIVE ENERGY GROUP PLC
21
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal Activities, Business Review & Strategies
The Company has developed a proprietary technology which transforms low-cost biomass material into high-
value sustainable fuel. Its patented product CoalSwitch® is a leading drop-in renewable fuel that can be co-fired
with coal, or completely replace coal as an alternative feedstock without requiring significant power plant
modifications or the need to replace existing biomass feedstock resources.
A detailed review of the significant developments and operating activities of the Group, as well as the business
environment, future prospects and the main trends and factors that are likely to affect the future development,
performance and position of the Group’s business are contained in the Strategic Report.
Directors
The Directors during the year under review and appointed post year end were:
James Leahy (Non-Executive Chairman)
Michael Rowan (Chief Executive Officer)
Max Aitken (Non-Executive Director – resigned 01 November 2024)
Jason Zimmermann (Non-Executive Director – resigned 01 November 2024)
In accordance with the Company’s Articles of Association, at the Annual General Meeting (“AGM”) held on 11th
of July 2023, Jason Zimmerman retired by rotation and was duly re-elected. Jazon Zimmerman retired as a non-
executive director on the 1st of November 2024.
Dividends
No dividend is proposed for the year ended 31 December 2023 (2022: $nil).
Directors’ Indemnities
The Company maintained directors’ and officers’ liability insurance during the year, and it remains in force at
the date of this report.
Research and Development
Working with PDI, the Company continued to work on the technology for CoalSwitch® production and the
planning toward completion of the reference plant in Ashland, Maine during the year. However, given its current
situation the Company is not currently undertaking any further development work.
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 Group’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 they
auditors are unaware.
Auditors’ appointment
A resolution to re-appoint Gravita Audit Limited as the company’s auditors will be proposed at the
forthcoming Annual General Meeting.
ACTIVE ENERGY GROUP PLC
22
Significant Shareholders
As at 3rd December 2024, the Company had no shares held in treasury and has 161,863,136 Ordinary Shares in
Issue (“OSI”). The Company had received notification from the following shareholders of interests in excess of
3% of the Company’s OSI:
Shareholder
Number of shares
Percentage of OSI
Hargreaves Landsdown Stockbrokers
21,525,307
13.30%
Gravendonck Private Foundation
20,484,065
12.66%
Halifax Share Dealing Limited
15,763,616
9.74%
Interactive Investor Services Limited
13,309,311
8.22%
Peel Hunt LLP
12,543,673
7.75%
Tyler Player
10,741,142
6.64%
Barclays Stockbrokers Limited
6,658,834
4.11%
Aj Bell Securities Limited
6,149,417
3.80%
Share Capital
Details of the Company’s share capital are set out in Note 19.
Information set out in the Strategic Report
The Directors have chosen to disclose likely future developments in the Strategic Report which would otherwise
be required to be contained in the Directors’ Report.
Capital and financial risk management
Details of the Group’s capital and financial risks and the management thereof is set out in Note 24.
Going Concern
The Financial Statements have been prepared on a going concern basis. In October 2024 the Company received
loan note finance of £200,000 from Zen Ventures Limited and it has subsequently received a commitment to
provide additional future funding from Zen Ventures Limited and parties connected to Zen Ventures Limited.
The Board, having reviewed the cash flow forecasts, consider that this funding will be sufficient to enable the
Company to settle its liabilities as they fall due for at least one year from the date of approval of these financial
statements.
However, the loan notes, and by extension the future funding from Zen Ventures Limited and its connected
parties, are subject to approval by the Company’s shareholders at its next general meeting. The Board consider
that this represents a material uncertainty that may cast significant doubt on the Company’s ability to continue
as a going concern (see note 1 to the financial statements).
Annual General Meeting
The date for the Annual General Meeting (“AGM”) will be agreed and publicised after the publication of the
interims which is expected to be 10th December 2024. The notice for the AGM and proxy voting form would be
put to the Board for approval at a later date.
The Notice of Meeting and Report and Accounts will be available on the Company’s website:
https://www.aegplc.com/investors/corporate-documents/
By Order of the Board
James Leahy
Non-Executive Chairman
3rd December 2024
ACTIVE ENERGY GROUP PLC
23
DIRECTORS’ REMUNERATION REPORT
As an AIM quoted company, Active Energy is not obliged to implement the remuneration reporting requirement
for premium listed companies set out in The Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013. However, the Remuneration Committee (“the Committee”) has
chosen to disclose the following information in the interests of greater transparency:
An overview of the remuneration policy for the Group’s executives endorsed by the Committee following
a review of the existing remuneration arrangements.
Remuneration Policy
The Company’s policy is to maintain levels of remuneration sufficient to recruit and retain senior executives of
the required calibre who can deliver growth in shareholder value. The Committee desires to create a strong
alignment of interest between executives and shareholders. Consequently, the Committee seeks to strike an
appropriate balance between fixed and performance-related reward, with a clear link between pay and
performance.
Aligned with the position and performance of the Company, senior executives did not receive performance
related pay during 2022 or 2023. The Company’s remuneration policy during the financial year consisted only of
salary. There were no annual bonuses awarded in the current financial year. The Committee recognises that the
salary component is below market related benchmarks but believes this is appropriate in the Company’s position.
In 2021 and 2022 and 2023 the Committee indicated that it would seek to ensure salaries and performance pay
are market-related to attract and retain the right calibre executive, including the introduction of pension,
medical insurance and life insurance benefits for Executive Directors. With the exception of medical insurance
benefits to Steve Schaar (COO) and Barron Hewetson (CTO), the Company’s position did not permit initiation of
these benefits during 2022 or 2023, nor for any salary benchmark adjustments. The Committee will re-evaluate
these benefits when the company is on a stronger footing.
Long Term Incentive Plan
In early 2021, following a recommendation from the Remuneration Committee, the Board approved a new Long
Term Incentive Plan (“LTIP”). The LTIP is intended to align the interests of the Executive Directors and senior
management with the shareholders and includes malus and clawback clauses.
On 4 July 2022 the Company’s Ordinary shares were consolidated on a 1 for 35 basis and corresponding
adjustments have been made to the number and exercise price of the LTIP options.
During 2021 the Board approved the granting of 2,470,556 share options under the LTIP to Executive Directors
and senior management (RNS 26/02/21), equal to 2.2% of the Ordinary shares in issue at that date. The share
options have a 3-year vesting period and a duration of 10 years. The first exercise price of these share options
(on 50% of each participants award) is 70.44 pence which represented a 75% premium to the Company’s mid-
market price on 25 February 2021. The second exercise price is set at a further 75% premium over the first
exercise price, 123.27 pence, for the remainder of the participant’s awards. Share options were granted to
Directors as follows:
During 2023 the Board approved the granting of 8,283,840 share options under the LTIP to Executive Directors
and Senior Management (RNS 19/07/23), equal to 12% of the Ordinary shares in issue at that date. The Options
have been granted in three tranches, with each tranche having a different vesting period and exercise prose as
follows:
3,594,470 Options have an exercise price of 8.3 pence per Ordinary Share (which represents a circa 35%
premium to the closing mid-market price of an Ordinary Share on 18 July 2023, the date prior to grant)
and vest immediately ("Tranche 1");
2,344,685 Options have an exercise price of 10 pence per Ordinary Share (which represents a circa 20%
premium over the Tranche 1 exercise price) and vest on 18 July 2024 ("Tranche 2"); and
ACTIVE ENERGY GROUP PLC
24
2,344,685 Options have an exercise price of 12 pence per Ordinary share (which represents a circa 20%
premium over the Tranche 2 exercise price) and vest on 18 July 2025 ("Tranche 3").
All of the Options expire ten years from the date of grant and are subject to additional performance related
vesting criteria. In total, the Options represent 5.12% of the Company's current issued Ordinary Shares and,
when taken with the existing options and warrants over Ordinary Shares, the Company will have options and
warrants outstanding over 8.26% of the Company's issued share capital.
2023 2022
Michael Rowan
4,909,570 1,672,308
James Leahy
400,000 -
Max Aitken
239,360 139,359
Jason Zimmermann
239,360 139,359
Andrew Diamond (a)
-
390,205
Total
5,788,290 2,341,231
(a)Andrew Diamond resigned on 22 November 2022.
Directors’ Service Contracts
Executive Directors
Executive Directors are employed under service contracts with notice periods as follows:
Michael Rowan
12 months(a)
(a) Michael Rowan and James Leahy have indicated their intention to resign from the board of directors once
suitable replacements have been appointed.
Non-Executive Directors
The Non-Executive Directors are appointed under letters of appointment for an initial term of approximately
three years with a notice period of one month from the Company or Non- Executive Director. At the reporting
date the expiry of the term of each Non - Executive Director was as follows;
James Leahy
To be re-elected at 2025 AGM if a suitable replacement has not been found
Max Aitken
Resigned 01 November 2024
Jason Zimmermann
Resigned 01 November 2024
Directors’ Remuneration
Remuneration and benefits for Directors were as follows:
12-months to 31 December 2023
Gross Fees
& Salary
US$
Benefits
US$
Bonus
US$
TOTAL
US$
Directors at 31 December 2023
T M Rowan
279,860
-
-
279,860
J Leahy
87,067
-
-
87,067
M Aitken
43,534
-
-
43,534
J Zimmermann
43,534
-
-
43,534
453,995
-
-
453,995
ACTIVE ENERGY GROUP PLC
25
12-months to 31 December 2022
Gross Fees
& Salary
US$
Benefits
US$
Bonus
US$
TOTAL
US$
Directors at 31 December 2022
T M Rowan
221,661
-
-
221,661
J Leahy
86,602
-
-
86,602
M Aitken
43,301
-
-
43,301
J Zimmermann
43,301
-
-
43,301
394,865
-
-
394,865
Other Directors during the year
Andrew Diamond (a)
205,966
6,341
-
212,307
600,831
6,341
-
607,172
(a) Andrew Diamond resigned on 22 November 2022.
Directors’ Interests in Share Capital of the Company
The interests of Directors who held office at 31 December 2023 are set out in the table below:
Ordinary Shares held
Ordinary Share Options &
LTIPs
1 January
2023
31 December
2023
27 Nov
2024
31 December
2023
Weighted
Exercise
price (p)
T M Rowan
1,785,321
1,785,321
1,785,321
4,909,570
39.53
J Leahy
686,428
686,428
686,428
400,000
9.38
M Aitken(a)
114,285
114,285
114,285
239,360
60.30
J Zimmermann(a)
127,471
127,471
127,471
239,360
60.30
(a) Max Aitken and Jason Zimmerman resigned on 01 November 2024.
James Leahy
Non-Executive Chairman
3rd December 2024
ACTIVE ENERGY GROUP PLC
26
STATEMENT OF DIRECTORS’ RESPONSIBILITY
Responsibility Statement
The Directors are responsible for preparing the Annual Report and the Group and parent Company 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 and Company financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the United Kingdom in conformity with the requirements of
the Companies Act 2006.
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 for that period and of the profit or loss
of the Group for that period. In preparing these financial statements, the Directors are required to:
properly select and apply suitable accounting policies;
make judgements and accounting estimates that are reasonable and prudent, and which result in relevant,
reliable, comparable, and understandable information;
provide additional disclosures when compliance with the specific accounting standards is insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the
Group’s financial position and financial performance; and
make an assessment of the Group’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Group and the Company and enable them to ensure that the financial statements comply with
the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 Group’s website at www.aegplc.com 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 Group’s website is the
responsibility of the Directors. The Directors' responsibility also extends to the on-going integrity of the financial
statements contained therein.
Each of the Directors, whose names and functions are listed in the Report of Directors confirm that, to the best
of their knowledge:
the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the
United Kingdom, give a true and fair view of the assets, liabilities and financial position and profit or loss
of the Group and parent Company taken as a whole; and
the Strategic Report and the Directors’ Report include a fair review of the development and performance
of the business and the position of the Company, and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and uncertainties that they face.
This confirmation is given in accordance with Section 418 of the Companies Act 2006.
By order of the Board
James Leahy
Non-Executive Chairman
3rd December 2024
ACTIVE ENERGY GROUP PLC
27
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC
Opinion
We have audited the financial statements of Active Energy Group PLC (the “Parent Company”) and its
subsidiaries (the “Group”) for the year ended 31 December 2023 which comprise the consolidated statement of
income and other comprehensive income, the consolidated and Parent Company statement of financial position,
the consolidated and Parent Company statements of changes in equity, the consolidated and Parent Company
statement of cash flows and the 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 United Kingdom adopted International Accounting Standards (IFRSs). The financial reporting
framework that has been applied in the preparation of the Parent Company financial statements is applicable
law and United Kingdom adopted International Accounting Standards, as applied in accordance with the
provisions of the Companies Act 2006.
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 December 2023 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with United Kingdom
adopted International Accounting Standards;
the Parent company financial statements have been properly prepared in accordance with United
Kingdom adopted International Accounting Standards as applied in accordance with the provisions of
the Companies Act 2006; 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 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.
Material uncertainty related to going concern
We draw attention to Note 1 in the Financial Statements, which explains that following the termination of the
Group’s relationship with Player Design, Inc., the Parent Company is now principally a holding company and its
projected future cash requirements comprise its ongoing compliance and management costs and the funding
for these costs will be met by way of additional future funding from parties connected to Zen Ventures Limited.
The company has received a signed support letter providing intent that this financial support will be available
for at least 12 months from the date these financial statements are signed. The Parent Company has already
received loan note finance of £200,000 from Zen Ventures Limited and it has subsequently received a
commitment to provide additional future funding from Zen Ventures Limited and parties connected to Zen
Ventures Limited.
ACTIVE ENERGY GROUP PLC
28
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC (Continued)
The loan note finance provided includes £27,616 of convertible loan notes that will convert to new ordinary
shares representing 29.9% of the Parent Company’s issued share capital on 31 December 2024, contingent upon,
inter alia, the suspension in trading in the Parent Company’s shares on AIM having been lifted by this date. To
achieve this the Parent Company must, inter alia, publish its annual report and financial statements for the year
ended 31 December 2023 and its interim results for the six months ended 30 June 2024. The loan notes, and by
extension the future funding from Zen Ventures Limited and its connected parties, are also subject to approval
by the Parent Company’s shareholders at its next general meeting.
As at the date of signing these financial statements this support, whilst believed to continue into the foreseeable
future by the directors and for at least 12 months from the date of signing these financial statements, is not
guaranteed as the conversion of loan notes is subject to shareholder approval. If the approval is not granted and
the support is withdrawn, the company would not be considered a going concern. As detailed within note 1, the
company's ability to continue as a going concern is reliant on the continuing financial support from Zen Ventures
Limited and its connected parties. These events or conditions, along with the other matters as set out in Note 1,
indicate that a material uncertainty exists that may cast significant doubt on the Group’s and Parent Company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our evaluation of the Directors’ assessment of the entity’s ability to continue to adopt the going concern basis
of accounting included a detailed review of future forecasts and assessing the assumptions utilised by
management in preparing the forecast. These assumptions were further assessed based on expected costs
incurred based on our understanding of the Parent Company’s future plans. We have reviewed the cash held at
year end up to the date of signing of this report and the commitment of funding from parties connected to Zen
Ventures Limited to support the Company and the availability and adequacy of their funds.
We have performed the following audit procedures in relation to going concern:
Evaluated the suitability of management’s model for the forecast;
Reviewed evidence of funds and assets of the parties connected to Zen Ventures Ltd who have committed
to support the Company;
Reviewed the cash balances held by the Parent Company and cash injections from parties connected to Zen
Ventures Ltd;
Reviewed the loan note finance terms and heads of terms between the Parent Company and Zen Ventures
Ltd; and
Considered whether the likelihood of the Parent Company defaulting on the loan note finance.
The forecast includes a number of assumptions related to future cash flows and associated risks. Our audit work
has focused on evaluating and challenging the reasonableness of these assumptions during the forecast period.
Due to the going concern status of the company being contingent on a number of factors, we ensured that these
have been appropriately disclosed in Note 1. Based on the work we have performed, there is an uncertainty due
to the reliance on the support from Zen Ventures Limited and its connected parties to enable the company to
meet liabilities as they fall due. We note that this support is not guaranteed as the conversion of loan notes is
subject to shareholder approval and if not approved could mean that the company is not a going concern.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate, on the premise that the Parent
Company shareholders approve the conversion of the loan notes at its next general meeting.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to
the Group’s and Parent’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
ACTIVE ENERGY GROUP PLC
29
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC (Continued)
Our audit approach
Overview
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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. In addition to the matter
described in the material uncertainty paragraph relating to the going concern, we have determined the matters
described below to be the key audit matters to be communicated in our report. This is not a complete list of all
risks identified by our audit.
Carrying value of intangible assets
Carrying value of property, plant and equipment and reclassification as non-current asset held for sale
Carrying value of investments in subsidiaries and intercompany loans (Company only risk)
Carrying value of other financial assets
These are explained in more detail below.
Audit scope
We conducted audits of the Group and Parent Company financial information. We performed specified
procedures over certain account balances and transaction classes at other Group companies.
Taken together, the Group companies over which we performed our audit procedures accounted for 100% of
the absolute profit before tax (i.e. the sum of the numerical values without regard to whether they were profits
or losses for the relevant reporting units) and 100% of revenue.
Key audit matters
Key audit matter
How our audit addressed the key audit matter
Carrying value of intangible assets
The Group had intangibles of US$63,670 at the year-
end (2022: US$8,064,585).
The intangibles relate to intellectual property costs
incurred to secure the rights and knowledge
associated with the CoalSwitch® and PeatSwitch
technology.
The Directors have a duty to confirm that all
intangibles are correctly recognised.
IAS 36 Impairment of assets (“IAS 36”) states that
assets must be assessed for indicators of impairment
at each reporting period, for all cash-generating
units (“CGUs”). Should such indicators exist the
recoverable amount of the asset will be compared to
the carrying value, and if the carrying value exceeds
the recoverable amount, the difference is recorded
as an impairment loss.
We have performed the following audit procedures:
We determined that there were Indicators of
impairment considering the liquidation of
Advanced Biomass Solutions Limited (“ABSL”)
which held the intangible assets of the Group.
We challenged management’s assessment of
the recoverable amounts calculated.
We reviewed correspondences with ABSL’s
liquidator and supporting evidence for the
liquidator’s broker on the intangible assets fair
value less costs to sell.
Based on the audit work performed, we are satisfied
with management’s valuation of the recoverable
amount of intangible assets as recognised in the
financial statements.
ACTIVE ENERGY GROUP PLC
30
As explained by the directors’ in the critical
accounting
judgements and key sources of
estimation uncertainty section, the intangible assets
have been impaired to their recoverable amount,
which has been determined to be their fair value less
costs to sell. Management have estimated fair value
through consultation with brokers and other market
participants and consider these to be Level 3 inputs
as defined by IFRS 13.
Carrying value of property, plant and equipment
and reclassification as non-current asset held for
sale
The Group had property, plant, and equipment of
US$154 at the year-end (2022: US$4,772,530).
The carrying amount in property, plant, and
equipment of US$154 is solely made up of furniture
and office equipment.
The directors determined that plant and equipment
fit the definition of non-current assets held for sale
per IFRS 5 and these were impaired down to their
recoverable amount of $875,330 and reclassified as
non-current asset held for sale.
The directors are satisfied that the carrying value of
the non-current asset held for sale as at the year end
is correct.
We have performed the following audit procedures:
We reviewed managements application of IFRS
5.
We challenged management’s premise of the
plant and equipment being available for
immediate sale in its present condition subject
only to terms that are usual and customary for
sales of such assets and that such sale is highly
probable, in order to reclassify these as non-
current asset held for sale.
We reviewed board minutes, papers and
documentation of negotiation between the
eventual buyer which corroborate
management’s position.
We reviewed the finalised settlement
agreement with the buyer, which was signed
post year end, and payments received to
confirm the recoverable value of the non-
current asset held for sale.
Based on the audit work performed, we are
satisfied with management’s valuation of the
recoverable amount of plant and equipment and its
reclassification as non-current asset held for sale in
the financial statements.
The carrying value of investments and inter-
company loans to subsidiaries (Company-only risk)
As at the year end, the Company had investments in
subsidiaries of US$nil (2022: US$5,732,103) and
amounts
due
from
group
companies
of
US$2,129,033 (2021: US$21,444,342).
We have performed the following audit procedures:
We reviewed the statutory filings to confirm
the status of each subsidiary to establish
management’s basis for impairment.
ACTIVE ENERGY GROUP PLC
31
As all of the parent’s subsidiaries were dissolved in
the year or following the year end or is undergoing
liquidation,
the
directors
have
recognised
impairments to investments in subsidiaries and
inter-company loans to their respective recoverable
amounts.
We reviewed the payments received by the
company following the year end to confirm
the recoverable amount of intercompany
loans.
Based on the audit work performed, we are satisfied
with management’s valuation of the recoverable
amount of inter-company loans.
Carrying value of other financial assets
The Group had other financial assets of US$870,047
at the year-end (2022: US$823,744).
These assets consist of an unquoted equity
instrument which is valued at fair value through
other comprehensive income and classified as a non-
current asset.
This asset is valued according to Level 3 inputs as
defined by IFRS 13 and is therefore subject to
management’s judgement of unobservable inputs.
The asset is currently held at its cost which
represents management’s best estimate of its fair
value.
There is a risk that the carrying value of other
financial assets is not reflective of its fair value.
We have performed the following audit procedures:
We obtained management’s valuation for
the estimate of fair value and tested the
clerical accuracy of the valuation.
We reviewed and challenged management
on the methodology used.
We ensured that disclosures of the key
judgements
and
assumptions
were
appropriately disclosed.
Based on the audit work performed, we are satisfied
with management’s valuation of the carrying
amount of other financial assets at cost which
represents the best estimate of the fair value.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of misstatements, both individually and in
aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as
follows:
Group financial statements
Company financial statements
Overall materiality
US$59,000 (2022: US$170,000).
US$47,000 (2022: US$92,100).
How we determined it
Based on 2% of Gross Assets
(2022: Based on 1% of Gross
Assets).
Based on 2% of Gross Assets,
limited to a percentage of Group
materiality (2022: Based on 1% of
Gross Assets).
Rationale for
benchmark applied.
We believe that gross assets is a
primary
measure
used
by
shareholders in assessing the
performance of the Group.
We believe that gross assets is a
primary
measure
used
by
shareholders in assessing the
performance of the Group.
ACTIVE ENERGY GROUP PLC
32
Performance Materiality
70% of overall materiality
70% of overall materiality
In setting the level of performance materiality we considered a number
of factors including likelihood of misstatements based on our past
experience of auditing the Group and heightened inherent risk of
management bias due to uncertainties surrounding going concern.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall
Group materiality. The range of materiality allocated across components is ranged from US$28,900 and
US$47,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above US$2,900 (2022: US$8,200) for the Group audit and US$2,300 (2022: US$5,000) for Company audit, as
well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for example
in respect of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence of bias by the directors that represented a
risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on
the financial statements as a whole, taking into account the structure of the Group and the Company, the
accounting processes and controls, and the industry in which they operate.
The Group financial statements are a consolidation of 5 reporting units, comprising the Group’s operating
businesses and holding companies.
We performed audits of the complete financial information of the Group and Parent Company of Active Energy
Group Plc reporting units, which were individually financially significant and accounted for 100% of the Group’s
revenue and 100% of the Group’s absolute profit before tax (i.e. the sum of the numerical values without regard
to whether they were profits or losses for the relevant reporting units). We also performed specified audit
procedures over other intangible assets, as well as certain account balances and transaction classes that we
regarded as material to the Group at the 5 reporting units.
The Group engagement team performed all audit procedures.
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.
ACTIVE ENERGY GROUP PLC
33
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC (Continued)
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 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 set out on page 26, 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 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 the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below. However the primary responsibility for the prevention and detection of fraud rests with both
those charged with governance of the entity and management.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, was as follows:
the senior statutory auditor ensured the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
we identified the laws and regulations applicable to the company through discussions with directors and
other management, and from our knowledge and experience of the entity’s activities:
-
ACTIVE ENERGY GROUP PLC
34
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC (Continued)
-
The Companies Act 2006 and IFRS in respect of the preparation and presentation of the financial
statements and;
-
AIM regulations and Market Abuse Regulations
we focused on specific laws and regulations which we considered may have a direct material effect on
the financial statements or the operations of the company, including taxation legislation, data
protection, anti-bribery, employment, environmental, health and safety legislation and anti-money
laundering regulations.
we assessed the extent of compliance with the laws and regulations identified above through making
enquiries of management and inspecting legal correspondence.
identified laws and regulations were communicated within the audit team regularly and the team
remained alert to instances of non-compliance throughout the audit; and
we assessed the susceptibility of the company’s financial statements to material misstatement,
including obtaining an understanding of how fraud might occur, by:
-
making enquiries of management as to where they considered there was susceptibility to fraud,
their knowledge of actual, suspected and alleged fraud; and
-
considering the internal controls in place to mitigate risks of fraud and non-compliance with
laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out
in note 1 of the Group financial statements were indicative of potential bias;
investigated the rationale behind significant or unusual transactions; and
in response to the risk of irregularities and non-compliance with laws and regulations, we designed
procedures which included, but were not limited to:
o agreeing financial statement disclosures to underlying supporting documentation;
o reading the minutes of meetings of those charged with governance;
o enquiring of management as to actual and potential litigation and claims; and
o reviewing correspondence with HMRC and the Group’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and
regulations are from financial transactions, the less likely it is that we would become aware of noncompliance.
Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations
to enquiry of the directors and other management and the inspection of regulatory and legal correspondence,
if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment by for example forgery, or intentional misrepresentation or through
collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and
regulations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
Other matters which we are required to address
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent
company and we remain independent of the Group and the Parent company in conducting our audit. Our audit
opinion is consistent with the additional report to the audit committee.
ACTIVE ENERGY GROUP PLC
35
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ACTIVE ENERGY GROUP PLC (Continued)
Use of this report
This report is made solely to the 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 Company's members
those matters that 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 Company,
or the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jan Charlesworth (Senior Statutory Auditor)
For and on behalf of,
Gravita Audit Limited (Statutory Auditor)
Aldgate Tower
2 Leman Street
London E1 8FA
3 December 2024
ACTIVE ENERGY GROUP PLC
36
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
restated
2023
2022
CONTINUING OPERATIONS
Note
US$
US$
Administrative expenses
(2,521,981)
(2,178,118)
OPERATING LOSS
4
(2,521,981)
(2,178,118)
Net finance income
Foreign exchange (loss)/gains
5
23,802
(1,335,635)
24,173
3,268,157
(LOSS)/PROFIT BEFORE TAXATION
(3,833,814)
1,114,212
Taxation
6
-
-
(LOSS)/PROFIT FROM CONTINUING OPERATIONS
(3,833,814)
1,114,212
LOSS FROM DISCONTINUED OPERATIONS
7
(11,683,882)
(2,457,957)
LOSS FOR THE YEAR - ATTRIBUTABLE TO THE
PARENT COMPANY
(15,517,696)
(1,343,745)
Basic and diluted (loss)profit per share (US cents) –
continuing operations
8
(2.37)
0.69
Basic and diluted (loss) per share (US cents) –
discontinued operations
8
(7.22)
(1.52)
Basic and diluted (loss) per share (US cents) – all
operations
8
(9.59)
(0.83)
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be subsequently reclassified to profit or
loss
Exchange differences on translation of operations
1,381,325
(3,426,765)
Total other comprehensive Income/(loss)
1,381,325
(3,426,765)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(14,136,371)
(4,770,510)
The notes on pages 41 to 75 form part of these financial statements.
ACTIVE ENERGY GROUP PLC
37
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Group
Group
Company
Company
2023
2022
2023
2022
NON-CURRENT ASSETS
Note
US$
US$
US$
US$
Intangible assets
9
63,670
8,064,585
-
-
Property, plant & equipment
10
154
4,772,530
154
1,015
Investment in subsidiaries
11
-
-
-
5,732,103
Intercompany Receivables
12
-
-
-
21,444,342
Other financial assets
13
870,047
823,744
870,047
823,744
933,871
13,660,859
870,201
28,001,204
CURRENT ASSETS
Trade and other receivables
14
845,714
905,924
59,023
131,197
Intercompany Receivables
12
-
-
2,129,033
-
Cash and cash equivalents
15
319,137
2,614,472
38,445
2,545,913
1,164,851
3,520,396
2,226,501
2,677,110
Non-current assets held for sale
16
875,330
-
-
-
2,040,181
3,520,396
2,226,501
2,677,110
TOTAL ASSETS
2,974,052
17,181,255
3,096,702
30,678,314
CURRENT LIABILITIES
Trade and other payables
17
665,564
1,199,796
487,601
351,255
Loans and borrowings
18
14,781
13,724
12,908
11,920
680,345
1,213,520
500,509
363,175
NON-CURRENT LIABILITIES
Loans and borrowings
18
120,846
133,940
18,864
30,085
120,846
133,940
18,864
30,085
TOTAL LIABILITIES
801,191
1,347,460
519,373
393,260
NET ASSETS
2,172,861
15,833,795
2,577,329
30,285,054
EQUITY
Share capital – Ordinary Shares
19
786,867
786,867
786,867
786,867
Share capital – Deferred Shares
19
18,148,898
18,148,898
18,148,898
18,148,898
Share premium
55,349,883
55,349,883
55,349,883
55,349,883
Merger reserve
2,350,175
2,350,175
2,350,175
2,350,175
Foreign exchange reserve
(4,469,769)
(5,851,094)
(4,725,115)
(5,744,107)
Own shares held reserve
(268,442)
(268,442)
(268,442)
(268,442)
Convertible debt/warrant reserve
690,937
690,937
690,937
690,937
Retained earnings
(70,415,688)
(55,373,429)
(69,755,874)
(41,029,157)
TOTAL EQUITY
2,172,861
15,833,795
2,577,329
30,285,054
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
parent company’s income statement. The parent company’s loss after tax for the year was $29,202,154 (2022:
$740,114).
The financial statements were approved and authorised for issue by the Directors on 2024 and
were signed on their behalf by:
Michael Rowan
Chief Executive Officer
Company Number 03148295
The notes on pages 41 to 75 form part of these financial statements.
ACTIVE ENERGY GROUP PLC
38
GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share
capital
Share
premium
Merger
reserve
Foreign
exchange
reserve
Own
shares
held
reserve
Convertible
debt and
warrant
reserve
R
US$
US$
US$
US$
US$
US$
At 31 December 2021
18,935,765 55,349,883
2,350,175
(2,424,329) (268,442)
1,165,911
(55,4
Loss for the year
-
-
-
-
-
-
(1,3
Other comprehensive loss
-
-
-
(3,426,765)
-
-
Total comprehensive loss
-
-
-
(3,426,765)
-
-
(1,3
Realisation of revaluation reserve
-
-
-
-
-
-
5
Share based payments and warrants
-
-
-
-
-
(474,974)
9
At 31 December 2022
18,935,765 55,349,883 2,350,175
(5,851,094) (268,442)
690,937
(55,3
Loss for the year
-
-
-
-
-
-
(15,5
Other comprehensive income
-
-
-
1,381,325
-
-
Total comprehensive income/(loss)
-
-
-
1,381,325
-
-
(15,5
Share based payments and warrants
-
-
-
-
-
-
4
At 31 December 2023
18,935,765 55,349,883 2,350,175
(4,469,769) (268,442)
690,937
(70,4
The purpose and nature of each of the above reserves is described in Note 22.
The notes on pages 41 to 75 form part of these financial statements.
ACTIVE ENERGY GROUP PLC
39
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital
Share premium
Merger
reserve
Foreign exchange
reserve
Own
shares
held
reserve
Convertibl
debt an
warran
reserv
US$
US$
US$
US$
US$
US
At 31 December 2021
18,935,765
55,349,883
2,350,175
(2,004,424)
(268,442)
1,165,91
Loss for the year
-
-
-
-
-
Other comprehensive loss
-
-
-
(3,739,683)
-
Total comprehensive loss
-
-
-
(3,739,683)
-
Share based payments and warrants
-
-
-
-
-
(474,974
At 31 December 2022
18,935,765
55,349,883
2,350,175
(5,744,107)
(268,442)
690,93
Loss for the year
-
-
-
-
-
Other comprehensive income
-
-
-
1,018,992
-
Total comprehensive income/(loss)
-
-
-
1,018,992
-
Share based payments and warrants
-
-
-
-
-
At 31 December 2023
18,935,765
55,349,883
2,350,175
(4,725,115)
(268,442)
690,93
The purpose and nature of each of the above reserves is described in Note 22.
The notes on pages 41 to 75 form part of these financial statements.
ACTIVE ENERGY GROUP PLC
40
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Group
Group
Company
Company
Note
2023
2022
2023
2022
US$
US$
US$
US$
Cash (outflow) from
operations
23
(2,879,469)
(2,554,563)
(2,463,338)
(711,370)
Income tax received
634,129
-
-
-
Net cash (outflow) from
operating activities
(2,245,340)
(2,554,563)
(2,463,338)
(711,370)
Cash flows from investing
activities
Purchase of intangible assets
-
(730,213)
-
-
Sale of property, plant and
equipment
-
3,767,471
-
-
Net cash inflow/(outflow)
from investing activities
-
3,037,258
-
-
Cash flows from financing
activities
Intercompany loans received
-
-
-
1,150,373
Unsecured debt repaid
(18,981)
(13,652)
(13,245)
(13,174)
Net cash (outflow)/inflow
from financing activities
(18,981)
(13,652)
(13,245)
1,137,199
Net (decrease)/increase in
cash and cash equivalents
(2,264,321)
469,043
(2,476,583)
425,829
Cash and cash equivalents at
beginning of the year
2,614,472
1,940,871
2,545,913
1,915,571
Exchange gains/(losses) on
cash and cash equivalents
(31,014)
204,558
(30,885)
204,513
Cash and cash equivalents at
end of the year
15
319,137
2,614,472
38,445
2,545,913
The notes on pages 41 to 75 form part of these financial statements.
ACTIVE ENERGY GROUP PLC
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES
General information
Active Energy Group plc is a public limited company, limited by shares, incorporated in England and Wales,
and quoted on the AIM market of the London Stock Exchange. Its registered office address is 27/28
Eastcastle Street, London, W1W 8DH. The principal activity of the Group is described in the Strategic
Report. On 1st July 2024 the company’s shares were suspended from trading on the AIM market.
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 years presented, unless otherwise stated. Certain
prior year disclosures have been restated to account for discontinued operations in accordance with the
requirements of IFRS 5.
Both the Company financial statements and the Group financial statements (collectively the “Financial
Statements”) have been prepared and approved by the Directors in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the UK, and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
The Financial Statements have been prepared on the historical cost basis, as modified by the revaluation
of property, plant and equipment, available for sale financial assets and certain financial assets and
liabilities, including derivative financial instruments, held at fair value through profit and loss.
The preparation of financial statements in compliance with IFRS requires the use of accounting estimates.
It also requires management to exercise judgement in the most appropriate application of the Group's
accounting policies. The areas where significant judgements and estimates have been made in preparing
the financial statements and their effects are disclosed at the end of this note.
Basis of consolidation
The financial information incorporates the results of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved when the Group has power over relevant activities, is exposed, 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. The consolidated financial statements present the financial
results of the Company and its subsidiaries (the Group) as if they formed a single entity.
Where necessary, adjustments are made to the results of subsidiaries to bring the accounting policies
used into line with those used by the Group. All intra-Group transactions, balances, income and expenses
are eliminated on consolidation.
In the Company's statement of financial position, investments in subsidiaries are stated at cost less
provisions for any permanent diminution in value. Total comprehensive income of non-wholly owned
subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to
their relative ownership interests, except when cumulative losses of the subsidiary result in negative
equity, whereafter total comprehensive income is attributed to the Group.
ACTIVE ENERGY GROUP PLC
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Going concern
In preparing the financial statements the Directors are required to make an assessment of the Company’s
ability to continue as a going concern and whether it is appropriate to prepare the financial statements
on a going concern basis.
Following the termination of the Group’s relationship with Player Design, Inc. the Company is now
principally a holding company and its projected future cash requirements comprise its ongoing
compliance and management costs. The Company has prepared cash flow forecasts to estimate these
future cash requirements, and the resources available to it, and these indicate that the Company should
have sufficient cash resources to continue in operation for at least one year from the date of approval of
these financial statements.
In October 2024 the Company received loan note finance of £200,000 from Zen Ventures Limited and it
has subsequently received a commitment to provide additional future funding from Zen Ventures Limited
and parties connected to Zen Ventures Limited. The Board, having reviewed the cash flow forecasts,
consider that this funding commitment will be sufficient to enable the Company to settle its liabilities as
they fall due for at least one year from the date of approval of these financial statements.
The financial statements have therefore been prepared on a going concern basis.
The Zen Ventures Limited loan note finance includes £27,616 of convertible loan notes that will convert
to new ordinary shares representing 29.9% of the Company’s issued share capital on 31 December 2024,
contingent upon, inter alia, the suspension in trading in the Company’s shares on AIM, a market operated
by the London Stock Exchange plc, having been lifted by this date. To achieve this the Company must,
inter alia, publish its annual report and financial statements for the year ended 31 December 2023 and its
interim results for the six months ended 30 June 2024 and the Board are very confident of meeting these
requirements before 31 December 2024.
However, the loan notes, and by extension the future funding from Zen Ventures Limited and its
connected parties, are also subject to approval by the Company’s shareholders at its next general meeting.
The Board consider that this represents a material uncertainty that may cast significant doubt on the
Company’s ability to continue as a going concern.
The financial statements do not include any of the adjustments that would be required if they were not
prepared on a going concern basis.
Restatement of prior period
The statement of comprehensive income for the year ended 31 December 2022 has been restated to
report the 2022 loss from operations discontinued during 2023 within the loss from discontinued
operations line (see note 7). The overall loss for the year ended 31 December 2022, the total
comprehensive loss for the year and net assets at 31 December 2022 are unaffected.
New and amended standards which are effective for these Financial Statements
A number of amended standards became mandatory and are effective for annual periods beginning on or
after 1 January 2023. These have not had a material impact on the financial statements.
ACTIVE ENERGY GROUP PLC
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
New and amended standards which are not yet effective for these Financial Statements
There are a number of new and amended standards and interpretations that are not mandatory for the
year ended 31 December 2023 and have not been early adopted in these financial statements.
These are summarised in the following table and will be adopted in the period when they became
mandatory unless otherwise indicated.
Ref
Title
Summary
Application date
(accounting
periods
commencing)
IAS1
Presentation of
Financial Statements
Amendments: classification of liabilities as
current or non-current
Amendments: classification of debt with
covenants
1 January 2024
1 January 2024
IFRS 7
Financial Instruments:
Disclosures
Amendments: classification and
measurement of financial instruments
1 January 2026
IFRS 7
Financial Instruments:
Disclosures
Amendments: supplier finance
arrangements
1 January 2024
IFRS 9
Financial Instruments
Amendments: classification and
measurement of financial instruments
1 January 2026
IFRS 16
Leases
Amendments: clarification of the
measurement of sale and leaseback
transactions that qualify as sales
transactions under IFRS15
1 January 2024
IFRS 18
Presentation and
Disclosures
Presentation and Disclosures in Financial
Statements
1 January 2027
IAS7
Supplier Finance
arrangements
Amendments: additional disclosures about
supplier finance arrangements
1 January 2024
The impact of the initial application of these amendments and new standards on the Group’s financial
statements is not yet known.
Discontinued operations
An operational business unit is classified as a discontinued operation when it has been either disposed of
or classified as held for sale in accordance with IFRS 5 at the reporting date. The results of discontinued
operations are shown separately in the income statement.
Revenue recognition
Revenue is recognised in accordance with the requirements of IFRS 15 'Revenue from Contracts with
Customers'. The Company recognises revenue to depict the transfer of promised goods and services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. This core principle is delivered in a five-step model framework: 1.
Identify the contract(s) with the customer; 2. Identify the performance obligations in the contract; 3.
Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the
contract; and 5. Recognise revenue when (or as) the entity satisfies a performance obligation.
ACTIVE ENERGY GROUP PLC
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Revenue is recognised when control of the products has been transferred to the customer. Control is
considered to have transferred once products have been received by the customer unless shipping terms
dictate otherwise. Revenues exclude intra-group sales and value added taxes and represent net invoice
value less estimated rebates, returns and settlement discounts. The net invoice value is measured by
reference to the fair value of the consideration received or receivable by the Group for goods supplied. In
the case of income from licencing activities, revenue is recognised as and when the relevant performance
obligations defined by the licence agreement have been satisfied. This may be on initial grant of the
licence if the grant is itself the performance obligation. Alternatively, the performance obligation may be
dependent on certain further events, such as production under the terms of the licence, in which case
revenue will be recognised as this occurs.
Impairment of non-financial assets (excluding inventories, investment properties and deferred tax)
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are
undertaken annually at the financial year end. Other 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.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is
carried out on the smallest group of assets to which it belongs for which there are separately identifiable
cash flows; its cash generating units (“CGUs”). Goodwill is allocated on initial recognition to each of the
Group's CGUs that are expected to benefit from the synergies of the combination giving rise to the
goodwill. 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.
Intangible assets
Externally acquired intangible assets with a finite useful life are initially recognised at cost and
subsequently amortised on a straight-line basis over their useful economic lives and tested for impairment
annually. Externally acquired intangible assets with an infinite life are not amortised but are tested for
impairment annually.
Intangible assets are recognised on business combinations if they are separable from the acquired entity
or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by
using appropriate valuation techniques.
ACTIVE ENERGY GROUP PLC
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Intangible assets (continued)
Internally generated intangible fixed assets are recognised if they meet the requirements set out by
International Accounting Standards. Specifically,
the asset must be separately identifiable that is to say that either it is capable of being separated or
divided from the entity and sold, transferred, licensed, rented or exchanged; or it arises from
contractual or other legal rights, regardless of whether those rights are transferable or separable from
the entity or from other rights and obligations;
the cost of the asset can be measured reliably;
the technical feasibility of completing the intangible asset;
the Group intends and is able to complete the intangible asset and use or sell it;
the intangible asset will generate probable future economic benefits;
there are available and adequate technical, financial, and other resources to complete and to use or
sell the intangible asset; and
Expenditure attributable to the intangible asset is measurable.
Property, plant and equipment
Property, plant and equipment is stated at cost, or deemed cost, less accumulated depreciation and any
recognised impairment loss. Cost includes the purchase price and all directly attributable costs.
Depreciation is provided once assets are available for use at the following annual rates in order to write
off each asset over its estimated useful life:
Plant and equipment
–
2 to 10 years straight line
Furniture and office equipment
–
2 to 5 years straight line
Buildings
–
25 to 50 years straight line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. Property is depreciated and is reviewed by means of an independent property valuer on
a three-year basis, unless indicators of impairment exist, in which case an independent valuation will be
performed. Land is not depreciated.
Non-current assets held for sale
A non-current asset (or disposal group) is classified as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use, it is available for immediate sale
in its present condition subject only to terms that are usual and customary for sales of such assets (or
disposal groups) and its sale is considered highly probable.
Non-current assets (or disposal groups) classified as held for sale are measured at the lower of their
carrying amount immediately before their classification as held for sale and their fair value less costs to
sell. Immediately before the initial classification of an asset (or disposal group) as held for sale, the carrying
amount of the asset (or all the assets and liabilities in the disposal group) shall be measured in accordance
with accounting standard applicable to the asset (or the standards applicable to the respective assets and
liabilities in the disposal group).
Non-current assets (or disposal groups) classified as held for sale are presented separately from other
assets in the statement of financial position.
ACTIVE ENERGY GROUP PLC
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Segment reporting
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 Executive Directors.
Financial assets and liabilities
The Group classifies its financial assets at inception into three measurement categories; 'amortised cost',
'fair value through other comprehensive income' (“FVOCI”) and 'fair value through profit and loss'
(“FVTPL”). The Group classifies its financial liabilities, other than financial guarantees and loan
commitments, as measured at amortised cost. Management determines the classification of its
investments at initial recognition. A financial asset or financial liability is measured initially at fair value.
At inception transaction costs that are directly attributable to its acquisition or issue, for an item not at
fair value through profit or loss, are added to the fair value of the financial asset and deducted from the
fair value of the financial liability.
Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or
liability is measured at initial recognition, minus principal payments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initial amount recognised
and maturity amount, minus any reduction for impairment
Fair value measurement
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction on the measurement date. The fair value of
assets and liabilities in active markets are based on current bid and offer prices respectively. If the market
is not active the group establishes fair value by using appropriate valuation techniques. These include the
use of recent arm’s length transactions, reference to other instruments that are substantially the same
for which market observable prices exist, net present value and discounted cash flow analysis.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where the group has transferred substantially all of the risks and rewards of ownership. In a
transaction in which the group neither retains nor transfers substantially all the risks and rewards of
ownership of a financial asset and it retains control over the asset, the group continues to recognise the
asset to the extent of its continuing involvement, determined by the extent to which it is exposed to
changes in the value of the transferred asset. There have not been any instances where assets have only
been partly derecognised. The group derecognises a financial liability when its contractual obligations are
discharged, cancelled or expire.
Impairment
The Group assesses at each financial position date whether there is objective evidence that a financial
asset or group of financial assets is impaired. If there is objective evidence (such as significant financial
difficulty of the obligor, breach of contract, or it becomes probable that debtor will enter bankruptcy), the
asset is tested for impairment. The amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of the estimated future cash flows (excluding future expected
credit losses that have not been incurred) discounted at the financial asset’s original effective interest
rate (that is, the effective interest rate computed at initial recognition). The carrying amount of the asset
is reduced through use of an allowance account.
ACTIVE ENERGY GROUP PLC
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Taxation
Current taxes are based on the results shown in the Financial Statements and are calculated according to
local tax rules, using tax rates enacted or substantively enacted by the year-end date.
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 goodwill;
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 to utilise the difference. The amount of the asset or liability is determined using tax rates
that have been enacted or substantively enacted by the reporting date and are expected to apply when
the deferred tax liabilities/assets are settled/recovered.
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 Group entities which intend either to settle current tax assets/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 or liabilities are expected to be settled/recovered.
Foreign currencies
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which they operate (their "functional currency"). The Company
and Consolidated financial statements are presented in United States Dollar (“US Dollar”, “US$”), which
is the Group’s presentation currency as the Group’s activities are ultimately linked to the US Dollar. The
Company’s functional currency is Pounds Sterling.
Transactions entered into by Group entities in a currency other than their functional currency are
recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities
are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation
of unsettled monetary assets and liabilities are recognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into the Group’s presentation
currency, US Dollars, at rates approximating to those ruling when the transactions took place. All assets
and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are
translated at the rate ruling at the reporting date. Differences arising on translating the opening net assets
at opening rate and the results of overseas operations at actual rate are recognised in other
comprehensive income and accumulated in the foreign exchange reserve. Exchange differences
recognised in the statement of comprehensive income of Group entities' separate financial statements
on the translation of long-term monetary items forming part of the Group's net investment in the overseas
operation concerned are reclassified to the foreign exchange reserve on consolidation.
ACTIVE ENERGY GROUP PLC
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Foreign currencies (continued)
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign
exchange reserve relating to that operation up to the date of disposal are transferred to the consolidated
statement of comprehensive income as part of the profit or loss on disposal. The key US$/GBP exchange
rates used to prepare the accounts were as follows: rate at 31 December 2023: 1.2734; average for year-
ended 31 December 2023: 1.2438; rate at 31 December 2022: 1.2056.
Share-based payments
Where employees receive remuneration in the form of shares or share options, the fair value of the share-
based employee compensation arrangement at the date of the grant is recognised as an employee benefit
expense in the consolidated income statement. The total expense to be apportioned over the vesting
period of the benefit is determined by reference to the fair value (excluding the effect of non-market-
based vesting conditions) at the date of the grant. The assumptions underlying the number of awards
expected to vest are subsequently adjusted for the effects of non-market-based vesting to reflect the
conditions prevailing at the year-end date. Fair value is measured using a valuation tool (Monte Carlo or
Black Scholes). The expected life used in the model has been adjusted, based on management's best
estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations.
Where equity instruments are granted to persons other than employees, the consolidated income
statement is charged with the fair value of goods and services received; except where that fair value
cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the entity obtains the goods or the counterparty renders the service.
Own shares held
Consideration paid/received for the purchase/sale of shares held in escrow or in trust for the benefit of
employees is recognised directly in equity. The nominal value of such shares held is presented within the
“own shares held” reserve. Any excess of the consideration received on the sale of the shares over the
weighted average cost of the shares sold is credited to retained earnings.
Neither the purchase nor sale of own shares leads to a gain or loss being recognised in the Group
consolidated income statement.
Investment in subsidiaries
Investments in subsidiaries are stated at cost less provision for impairment in the Company financial
statements.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in conformity with UK-adopted International Accounting
Standards requires management to make estimates and judgements that affect the reported amounts of
assets and liabilities as well as the disclosure of contingent assets and liabilities at the year-end date and
the reported amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances. Management’s consideration of going concern is discussed elsewhere in the accounting
policies note. The other significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were as follows:
ACTIVE ENERGY GROUP PLC
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
ACCOUNTING POLICIES (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Impairment of intangible fixed assets.
Intangible assets relate solely to CoalSwitch® and PeatSwitch patents, trademarks, and know-how. These
have been impaired to their recoverable amount, which has been determined to be their fair value less
costs to sell. Management have estimated fair value through consultation with brokers and other market
participants and consider these to be Level 3 inputs as defined by IFRS 13 (and that the assets are
therefore subject to management’s judgement of unobservable inputs).
Share-based payments
In determining the fair value of LTIP awards and other equity settled share-based payments, and the
related charge to the income statement, the Group makes assumptions about future events and market
conditions. In particular, judgements must be made as to the fair value of each award granted. The fair
value is determined using a valuation model which is dependent on further estimates, including the
Group's future dividend policy, the timing with which options will be exercised and the future volatility in
the price of the Group' shares. Such assumptions are based on publicly available information and reflect
market expectations and advice taken from qualified personnel. Different assumptions about these
factors could materially affect the reported value of share-based payments.
Valuation of unquoted equity investment
The other financial assets included in the Group and Company statement of financial position comprise
an investment in an unquoted private company which itself holds certain illiquid, difficult to value
investments that have yet to generate any return. The information available with which to estimate the
fair value of this investment is limited and includes primarily the company’s financial statements and the
prices at which the company has raised recent equity finance. Additionally, judgement is required to
estimate the discount that would be applied by a market participant to the value of the company’s
investment on account of it being a minority, non-controlling interest. The fair values implied by the
limited information that is available are inconsistent, and highly variable, and management have
therefore concluded that the most reliable estimate of the investment’s value is its cost price. The
investment is therefore carried at its cost price being management’s best estimate of fair value.
2.
SEGMENTAL INFORMATION
The Group reports two business segments:
"CoalSwitch®” denotes the Group’s renewable wood pellet business. Production activities have
ceased and are reported as discontinued operations.
"Corporate and other" denotes the Group’s corporate and other costs.
The business segments are aligned to the Group’s strategy as disclosed in the Strategic Report.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products or services.
Measurement of operating segment profit or loss
The Group evaluates segmental performance on the basis of profit or loss from operations calculated in
accordance with IFRS but excluding the results from discontinued operations in accordance with IFRS 5.
ACTIVE ENERGY GROUP PLC
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2. SEGMENTAL INFORMATION (continued)
2023
2023
2023
CoalSwitch®
Corporate
& Other
Total
US$
US$
US$
Revenue
-
-
-
Operating loss
-
(2,521,981)
(2,521,981)
Loss before tax
-
(3,833,814)
(3,833,814)
Loss for the year
-
(3,833,814)
(3,833,814)
Total Assets
1,975,897
998,155
2,974,052
Total Liabilities
153,548
647,643
801,191
Other segmental information:
Adjustment to prior year
additions to intangibles
300,000
-
300,000
Adjustment to prior year
additions to PPE
100,000
-
100,000
Depreciation and amortisation
-
898
898
Impairment of intangibles
7,700,914
-
7,700,914
Impairment of PPE
3,796,184
-
3,796,184
2022
Restated
2022
Restated
2022
CoalSwitch®
Corporate
& Other
Total
US$
US$
US$
Revenue
-
-
-
Operating loss
-
(2,178,118)
(2,178,118)
Profit before tax
-
1,114,212
1,114,212
Profit for the year
-
1,114,212
1,114,212
Total Assets
13,649,225
3,532,030
17,181,255
Total Liabilities
640,768
706,692
1,347,460
Other segmental information:
Additions to Intangibles
730,213
-
730,213
Additions to PPE
231,087
-
231,087
Depreciation and amortisation
-
1,318
1,318
Impairment charges
1,000,000
-
1,000,000
The remaining assets and liabilities derived from the “Wood Processing” segment that ceased activity in
2021 have been transferred into the “Corporate and Other” segment and the 2022 segmental analysis
has been restated to reflect this.
ACTIVE ENERGY GROUP PLC
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.
SEGMENTAL INFORMATION (continued)
Non-current assets are located as follows:
2023
2022
US$
US$
United Kingdom
870,201
824,759
United States
63,670
12,836,100
933,871
13,660,859
3.
EMPLOYEE COSTS AND DIRECTORS
The following table analyses group wages and salaries before any allocations to property, plant and
equipment or intangible assets.
2023
2022
Group
US$
US$
Continuing operations
Wages and salaries
508,723
607,172
Social security costs
57,501
77,421
566,224
684,593
Share based payments – directors
319,636
339,375
Share based payments – others
155,801
18,746
1,041,661
1,042,714
Discontinued operations
Wages and salaries
365,697
106,699
Social security costs
27,463
9,323
393,160
116,022
1,434,821
1,158,736
The average monthly number of employees during the year was as follows:
2023
2022
Continuing operations
Directors
4
5
Administration
1
2
Discontinued operations
Management
2
-
Administration
1
-
Production
-
1
8
8
ACTIVE ENERGY GROUP PLC
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3.
EMPLOYEE COSTS AND DIRECTORS (continued)
Directors’ and key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the Group. These are considered to be the directors of the Company.
2023
2022
US$
US$
Directors' emoluments
453,995
607,172
Termination benefits
-
48,726
Share based payments
319,636
339,375
773,631
995,273
The emoluments of the highest paid Director for the year, excluding non-cash share-based payments,
were $279,860 (2022: $230,104).
4. OPERATING LOSS
2023
2022
Group
US$
US$
The operating loss is stated after charging:
Continuing operations
Depreciation
898
1,318
Auditor’s remuneration - parent company and consolidation
99,504
68,663
Auditor’s remuneration – subsidiaries
-
34,610
Auditor’s remuneration - taxation services
2,488
6,495
Auditor’s remuneration - other services
5,099
2,023
Share based payments
475,437
358,121
Discontinued operations
Impairment charges intangibles
7,573,575
-
Impairment charges PPE
3,796,184
1,000,000
Loss on disposal of fixed assets
-
455,140
Depreciation
-
18,556
ACTIVE ENERGY GROUP PLC
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
5.
NET FINANCE INCOME/(COSTS)
2023
2022
Group
US$
US$
Continuing operations
Finance income
Interest income
24,745
28,412
24,745
28,412
Finance costs
Other loan interest and charges
(943)
(4,239)
(943)
(4,239)
23,802
24,173
Discontinued operations
Finance income
Interest income
3,981
-
3,981
-
Finance costs
Other loan interest and charges
(4,425)
(6,662)
(4,425)
(6,662)
(444)
(6,662)
ACTIVE ENERGY GROUP PLC
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
6.
TAXATION
2023
2022
Group
US$
US$
Continuing operations
Current tax
-
-
Deferred tax
-
-
Total income tax expense
-
-
Discontinued operations
Total income tax (credit)
(634,129)
(1,395)
Factors affecting the tax charge
The tax on the Group assessed for the year is higher than the standard rate of corporation tax in the UK.
The difference is explained below:
Restated
2023
2022
US$
US$
Loss before taxation
(16,151,825)
(1,343,745)
Standard rate of corporation tax
23.50%
19%
Loss before tax multiplied by standard rate of corporation tax
(3,795,679)
(255,312)
Effects of:
Non-deductible expenses
2,809,395
353,486
Different tax rates in overseas jurisdictions
-
(7,519)
Tax credit included within loss from discontinued operations
634,129
1,395
Losses (used)/not recognised
352,155
(92,050)
Tax expense
-
-
The Group’s tax loss position can be summarised as follows:
2023
2022
US$
US$
Tax losses brought forward at 1 January
40,289,937
43,437,711
Taxable (profit)/loss for the year
4,196,953
(517,596)
Losses expired during year
(6,129,757)
-
Adjustment in respect of prior periods
1,506,849
(2,630,178)
Tax losses carried forward at 31 December
39,863,982
40,289,937
A deferred tax asset has not been recognised in respect of the Group’s tax losses due to uncertainties
around the Group’s ability to utilise the losses.
ACTIVE ENERGY GROUP PLC
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
7.
DISCONTINUED OPERATIONS
During 2023 the Group discontinued its CoalSwitch® operations in Ashland, Maine. During 2022 the Group
sold the Lumberton property that was used for its wood processing operations. The results of these
businesses are disclosed as a single line item in the Consolidated Statement of Income in accordance with
IFRS5. The analysis between continuing and discontinued operations is as follows:
Year ended 31 December
2023
Continuing operations
Discontinued
operations
Total
US$
US$
US$
Revenue
-
-
-
Impairment charges
-
(11,497,099)
(11,497,099)
Administrative expenses
(2,521,981)
(816,429)
(3,338,410)
Loss on disposal of PPE
-
-
-
Other income
-
-
-
Operating loss
(2,521,981)
(12,313,528)
(14,835,509)
Finance income/(costs)
(1,311,833)
(4,483)
(1,316,316)
Loss before taxation
(3,833,814)
(12,318,011)
(16,151,825)
Taxation
-
634,129
634,129
Loss for the year
(3,833,814)
(11,683,882)
(15,517,696)
Cash outflows from
operating activities
(2,463,338)
217,998
(2,245,340)
Cash inflows from
investing activities
-
-
-
Cash outflows from
financing activities
(13,245)
(5,736)
(18,981)
Year ended 31 December
2022
Restated
Continuing
operations
Restated
Discontinued
operations
Total
US$
US$
US$
Impairment charges
-
(1,000,000)
(1,000,000)
Administrative expenses
(2,178,118)
(1,013,258)
(3,191,376)
Loss on disposal of PPE
-
(455,140)
(455,140)
Other income
-
14,689
14,689
Operating loss
(2,178,118)
(2,453,709)
(4,631,827)
Finance income/(costs)
3,292,330
(5,643)
3,286,687
Profit/(Loss) before
taxation
1,114,212
(2,459,352)
(1,345,140)
Taxation
-
1,395
1,395
Profit/Loss for the year
1,114,212
(2,457,957)
(1,343,745)
Cash outflows from
operating activities
(711,370)
(1,843,193)
(2,554,563)
Cash outflows from
investing activities
-
3,037,257
3,037,257
Cash inflows from
financing activities
(13,174)
(478)
(13,652)
ACTIVE ENERGY GROUP PLC
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
8.
(LOSS)/PROFIT PER SHARE
2023
Restated
2022
US$
US$
(Loss)/profit for the year:
Continuing operations
(3,833,814)
1,114,212
Discontinued operations
(11,683,882)
(2,457,957)
Total operations
(15,517,696)
(1,343,745)
Weighted number of Ordinary Shares in issue
161,863,136
161,863,136
Basic and diluted (loss)/profit per share (US cents):
Continuing operations
(2.37)
0.69
Discontinued operations
(7.22)
(1.52)
Total operations
(9.59)
(0.83)
The share options set out in note 21 are not dilutive in relation to the restated profit per share on continuing
operations for the year ended 31 December 2022 because the Company’s average share price for the year
did not exceed the exercise price of any of the share options in issue. The share options are anti-dilutive in
relation to all the loss per share measures presented for the years ended 31 December 2023 and 31
December 2022 because their inclusion would decrease the loss per share in each case.
On 4 July 2022 the Company’s Ordinary Shares were consolidated on a 1 for 35 basis and the weighted
average number of shares in issue in 2022 has been adjusted to reflect this. Loss per share for 2022 has
been restated to reflect the 2023 split of continued/discontinued operations.
9. INTANGIBLE ASSETS
Group
Intellectual
property
Total
US$
US$
Cost
At 31 December 2021
5,659,386
5,659,386
Additions
730,213
730,213
Transferred from PPE
1,675,348
1,675,348
At 31 December 2022
8,064,947
8,064,947
Adjustment to prior year additions
(300,000)
(300,000)
At 31 December 2023
7,764,947
7,764,947
Accumulated amortisation
At 31 December 2021
362
362
At 31 December 2022
362
362
Impairment of intangibles
7,700,915
7,700,915
At 31 December 2023
7,701,277
7,701,277
Net book value
At 31 December 2023
63,670
63,670
At 31 December 2022
8,064,585
8,064,585
ACTIVE ENERGY GROUP PLC
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9. INTANGIBLE ASSETS (continued)
The adjustment to additions in 2023 results from further information becoming available in relation to
the cost of the 2022 additions, subsequent to the approval of the 2022 financial statements.
Intellectual property
Intellectual property comprises costs incurred to secure the rights and knowledge associated with the
CoalSwitch® and PeatSwitch technologies. These assets are accounted for as indefinite life assets and
assessed for impairment at each balance sheet date. These have been impaired to their recoverable
amount, which has been determined to be their fair value less costs to sell. The key assumption in
estimating the recoverable amount is considered to be the estimated selling price of the intellectual
property assets.
10. PROPERTY, PLANT AND EQUIPMENT
Group
Land and
buildings
Plant and
equipment
Furniture
and office
equipment
Total
US$
US$
US$
US$
Cost
At 31 December 2021
4,492,049
9,318,697
13,170
13,823,916
Additions
-
375,357
-
375,357
Disposals
(4,492,049)
(247,192)
-
(4,739,241)
Transferred to intangible assets
-
(1,675,348)
-
(1,675,348)
Foreign exchange movements
-
-
(1,405)
(1,405)
At 31 December 2022
-
7,771,514
11,765
7,783,279
Adjustment to prior year additions
-
(100,000)
-
(100,000)
Transfer to non- current asset held for
sale
(7,671,514)
-
(7,671,514)
Foreign exchange movements
-
-
660
660
At 31 December 2023
-
-
12,425
12,425
ACTIVE ENERGY GROUP PLC
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10. PROPERTY, PLANT AND EQUIPMENT (continued)
Group
Land and
Buildings
Plant and
equipment
Furniture
and office
equipment
Total
US$
US$
US$
US$
Accumulated depreciation
At 31 December 2021
198,000
2,102,366
10,597
2,310,963
Depreciation for the year
18,000
556
1,318
19,874
Impairment charge
-
1,000,000
-
1,000,000
Disposals
(216,000)
(102,922)
-
(318,922)
Foreign exchange movements
-
-
(1,166)
(1,166)
At 31 December 2022
-
3,000,000
10,749
3,010,749
Charge for the year
-
-
898
898
Impairment charge
-
3,796,184
-
3,796,184
Transfer to non-current asset held for
sale
(6,796,184)
-
(6,796,184)
Foreign exchange movements
-
-
624
624
At 31 December 2023
-
-
12,271
12,271
Net book value
At 31 December 2023
-
-
154
154
At 31 December 2022
-
4,771,514
1,016
4,772,530
The additions to plant and equipment in 2022 represent expenditure on assets under construction. The
adjustment to additions in 2023 results from further information becoming available in relation to the
cost of the 2022 additions, subsequent to the approval of the 2022 financial statements.
The plant and equipment has been impaired to its recoverable amount which has been determined to
be its fair value less costs to sell. This valuation has been based on the amounts realised for these assets
subsequent to the end of the accounting period. The 2022 impairment charge of $1,000,000 related to
a reactor that has been taken out of service and was being used for research and development purposes.
Company – office equipment
2023
2022
US$
US$
Cost
At 1 January
11,763
13,170
Foreign exchange movements
660
(1,407)
At 31 December
12,423
11,763
Accumulated depreciation
At 1 January
10,748
10,597
Charge for the year
898
1,318
Foreign exchange movements
623
(1,167)
At 31 December
12,269
10,748
Net book value
154
1,015
ACTIVE ENERGY GROUP PLC
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11. INVESTMENTS IN SUBSIDIARIES
2023
2022
US$
US$
Cost
At 1 January
10,319,729
11,554,112
Disposals
(4,732,881)
-
Foreign exchange movements
467,464
(1,234,383)
At 31 December
6,054,312
10,319,729
Impairment provision
At 1 January
4,587,626
5,136,371
Charge for the year
5,913,580
-
On disposals
(4,732,881)
-
Foreign exchange movements
285,987
(548,745)
At 31 December
6,054,312
4,587,626
Net book value
-
5,732,103
At the balance sheet date the Group held share capital and had a controlling interest in each of the following
companies:
Subsidiary undertaking
Country of
incorporation
Nature of business
Percentage
Holding
Dissolution
Date
2023
2022
Advanced Biomass Solutions
Limited
United
Kingdom
Biomass for energy
development
100
100
-
Lumberton Energy Holdings LLC
United States
Property Holding
Company
100
100
19 April
2024
Active Energy Renewable Power
LLC
United States
Biomass for energy
development
100
100
22 April
2024
CSW2Maine LLC
United States
Biomass for energy
development
-
100
21 August
2023
AEG Trading Limited
United
Kingdom
Wood chip distribution
-
100
24 January
2023
Timberlands International
Limited
United
Kingdom
Biomass for energy
development
-
100
24 January
2023
Advanced Biomass Solutions Limited was placed into a members’ voluntary liquidation on 22 July 2024.
The following companies, which were all wholly owned by the group, were dissolved during 2022:
Timberlands Newfoundland & Labrador, Inc. (United States)
Nikofeso Holdings Limited (Cyprus)
Renewable Energy Systems (United States)
Active Energy Services UK Limited (United Kingdom)
ACTIVE ENERGY GROUP PLC
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12. INTERCOMPANY LOANS
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Carrying value at beginning of the
year
-
-
21,444,342
25,296,460
Impairment of investments in
subsidiaries
-
-
(19,454,760)
-
Loans received during the year
-
-
-
(1,150,373)
Foreign exchange movements
-
-
139,451
(2,701,745)
Carrying value at end of the year
-
-
2,129,033
21,444,342
Intercompany loans are loans made to subsidiaries of the Company and are repayable on demand. In 2023
they have been classified as current asset as they were expected to be paid within the next 12 months
(2022: classified as non-current asset as they were expected to be paid after 12 months).
13. OTHER FINANCIAL ASSETS
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Fair value at beginning of the year
823,744
922,275
823,744
922,275
Foreign exchange movements
46,303
(98,531)
46,303
(98,531)
Fair value at end of the year
870,047
823,744
870,047
823,744
Other financial assets consist of an unquoted equity instrument which is valued at fair value through other
comprehensive income and classified as a non-current asset. The instrument is denominated in Pounds
Sterling.
This asset is valued according to Level 3 inputs as defined by IFRS 13 and is therefore subject to
management’s judgement of unobservable inputs. The asset is currently held at its historic cost which
represents management’s best estimate of its fair value.
ACTIVE ENERGY GROUP PLC
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
14. TRADE AND OTHER RECEIVABLES
The carrying value of trade and other receivables, after deduction of appropriate allowances for
irrecoverable amounts, approximates to their fair value. These assets are not interest bearing and are
received over a short period of time with an insignificant risk of changes in fair value.
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Project advances
774,669
774,669
-
-
Prepayments
38,041
73,461
38,041
73,461
Other receivables
33,004
57,794
20,982
57,736
Total
845,714
905,924
59,023
131,197
Trade and other receivables that have not been received within the payment terms are classified as
overdue. There were no trade and other receivables overdue at 31 December 2023 or 31 December 2022
and accordingly there were no impairment provisions at either date. An analysis of the Group's trade and
other receivables by currency is provided in note 24.
15. CASH AND CASH EQUIVALENTS
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Cash at bank
319,137
2,614,472
38,445
2,545,913
Cash and cash equivalents are defined as cash at bank, demand deposits and other short-term highly
liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
16. NON-CURRENT ASSETS HELD FOR SALE
The non-current assets classified as held for sale during the year comprise plant and equipment at the
CoalSwitch® production facility that was under construction in Ashland, Maine following the termination
of the Group’s relationship with Player Design, Inc. (see note 27).
These assets were previously held as property, plant and equipment and were impaired to their fair value
less costs to sell immediately before reclassification as non-current assets held for sale, with an
impairment charge of $3,796,184 recognised in the income statement within the loss from discontinued
operations. The assets were sold in March 2024 for consideration that was approximately equal to their
carrying values at the balance sheet date.
These non-current assets are presented within the CoalSwitch® operating segment.
ACTIVE ENERGY GROUP PLC
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
17. TRADE AND OTHER PAYABLES
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Trade payables
381,926
428,106
238,385
170,975
Accruals and deferred income
268,727
587,106
234,305
145,696
Social security and other taxes
14,911
34,584
14,911
34,584
Other payables
-
150,000
-
-
665,564
1,199,796
487,601
351,255
The carrying value of trade and other payables approximates to their fair value. Payments occur over a
short period and the risk of changes in value is insignificant. The full balance of the trade and other
payables becomes due and payable within three months of the reporting date. These are classified as
financial liabilities on the balance sheet and are measured at amortised cost.
The amounts shown are undiscounted and represent the contractual cash flows. An analysis of the
Group's trade and other payables classified as financial liabilities by currency is provided in note 24.
ACTIVE ENERGY GROUP PLC
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
18. LOANS AND BORROWINGS
The book value and fair value of loans and borrowings are as follows:
Group
Book value
Fair value
Book value
Fair value
2023
2023
2022
2022
US$
US$
US$
US$
Non-Current
Other loans
120,846
120,846
133,940
133,940
Current
Other loans
14,781
14,781
13,724
13,724
Total loans and
borrowings
135,627
135,627
147,664
147,664
Company
Book value
Fair value
Book value
Fair value
2023
2023
2022
2022
US$
US$
US$
US$
Non-Current
Other loans
18,864
18,864
30,085
30,085
Current
Other loans
12,908
12,908
11,920
11,920
Total loans and
borrowings
31,772
31,772
42,005
42,005
Other loans
Other loans comprise a bank loan to the Company guaranteed by the UK government and a loan to a
subsidiary from the US government. The loans are repayable over 5 and 30 years respectively, with
interest rates of 2.5% p.a. and 3.75% p.a. respectively. The US government loan is secured against the
assets of the subsidiary by way of a floating charge.
ACTIVE ENERGY GROUP PLC
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
19. CALLED UP SHARE CAPITAL
2023
2023
2022
2022
Number
US$
Number
US$
Ordinary shares
At 1 January
161,863,136
786,867
5,665,209,745
786,867
Issue of shares
-
-
15
-
Share consolidation
-
-
(5,503,346,624)
-
31 December
161,863,136
786,867
161,863,136
786,867
Deferred shares of
£0.0099 each
At 1 January
1,287,536,163
18,148,898
1,287,536,163
18,148,898
At 31 December
1,287,536,163
18,148,898
1,287,536,163
18,148,898
Total share capital
18,935,765
18,935,765
All shares have been allotted, called up and fully paid. The Ordinary Shares of £0.0001 each were
consolidated into Ordinary Shares of £0.0035 each on 4 July 2022 (see below).
At the Company’s Annual General Meeting on 4 July 2022, shareholders approved a 1 for 35 share
consolidation of the Company’s Ordinary Shares. Following the share consolidation, the Company had
161,863,136 Ordinary Shares of £0.0035 each.
The Deferred Shares have not been admitted to trading on the Alternative Investment Market, carry no
voting rights and are purchasable for an aggregate sum of £1.
The Ordinary Shares were suspended from trading on AIM on 1 July 2024 and will remain suspended,
pursuant to AIM Rule 19, until the Company has published its annual report and accounts for the year
ended 31 December 2023 and its interim report and accounts for the six months ended 30 June 2024.
20. CONTINGENT LIABILITIES
The Group has received legal claims from former subcontractors in the USA in respect of alleged unpaid
remuneration. The Group disputes these claims and is advised that they are unlikely to be successful, and
the Board therefore does not consider it likely that any payment will be required to settle the claims. The
Board’s best estimate of the cost to the Group, were these claims to be successful, is $360,653. No
provision has been made for this sum in these financial statements.
ACTIVE ENERGY GROUP PLC
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21. SHARE OPTIONS AND WARRANTS
On 4 July 2022 the Company’s Ordinary Shares were consolidated on a 1 for 35 basis and corresponding
adjustments have been made to the number and exercise price of the share options and warrants in issue
to reflect this.
From time to time the Company has entered into share option and warrant arrangements under which
the holders are entitled to subscribe for a percentage of the Company's Ordinary Share capital. Options
under the LTIP and JSOP are detailed below. All other options and warrants vest immediately. The number
of warrants and share options exercisable at 31 December 2023 was 2,699,336 (2022: 5,768,463). During
the year 598,571 (2022: 714,286) options and warrants expired.
The movements of warrants and share options during the year was as follows:
2023
2023
2022
2022
Weighted
Average
Exercise
Price
(British pence)
Number of
Warrants
and Share
Options
Weighted
Average
Exercise
Price
(British pence)
Number of
Warrants
and Share
Options
At 1 January
112.68
5,768,463
103.95
6,482,749
Expired
86.21
(598,571)
35.00
(714,286)
Granted
9.83
8,283,840
-
-
At 31 December
50.53
13,453,732
112.68
5,768,463
At 31 December 2023, the weighted average remaining contractual life of warrants and share options
exercisable was 7.42 years (2022: 4.95 years). There were 8,283,840 share options issued under the LTIP
during 2023 (2022: none issued). No warrants were issued in 2023 or 2022. The weighted average exercise
price of the options and warrants granted in 2023 was 9.83 pence (none issued in 2022).
A charge of $475,437 (2022: $358,121) has been recognised in the Statement of Comprehensive Income
in respect of equity settled share based payments.
ACTIVE ENERGY GROUP PLC
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21. SHARE OPTIONS AND WARRANTS (continued)
Options and warrants outstanding at 31 December 2023 and 2022 were exercisable as follows:
Exercise price (British pence)
2023
2022
Number
Number
8.30p
3,594,470
-
10.00p
2,344,685
-
12.00p
2,344,685
-
17.50p
428,571
428,571
45.15p
609,081
609,081
52.50p
-
214,286
67.73p
304,540
304,540
70.44p
1,235,278
1,235,278
105.00p
-
384,287
123.27p
1,235,278
1,235,278
157.50p
585,714
585,714
175.00p
57,143
57,143
210.00p
128,571
128,571
297.50p
585,714
585,714
At 31 December
13,453,730
5,768,463
The above disclosures relate to both the Company and the Group.
LTIP awards
In February 2021, the Company implemented its Long Term Incentive Plan (“LTIP”) to incentivise the
Company’s Executive Directors, certain other Directors, and members of the Senior Management team.
Awards under the LTIP take the form of premium priced options over the Company's Ordinary Shares
which are exercisable on various dates up to the third anniversary of the date of grant (subject to several
market standard specific exceptions). LTIP options have an expiry date of ten years from the award date.
The Group measures the fair value of LTIP awards using the Black Scholes valuation model. The share-
based payment expense is recorded over the vesting period of the option if the option is expected to vest.
Share based payment expenses are recognised in the income statement in accordance with the provisions
of IFRS2.
The inputs to the Black Scholes model for the valuation of the options issued during 2023 were:
Share price on date of grant:
6.15p
Exercise price:
8.30p, 10.00p and 12.00p
Expected volatility (of share price):
99.66%
Option life:
10 years
Risk free interest rate:
4.55%
Expected volatility was determined based on historic volatility over the three year period prior to the
grant date of the option.
ACTIVE ENERGY GROUP PLC
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21. SHARE OPTIONS AND WARRANTS (continued)
At the inception of the plan, options over 2,470,556 shares were granted to directors and other
participants. Further options were granted in July 2023 over 8,283,840 shares.
JSOP awards
Under the Joint Share Ownership Plan (“JSOP”), shares in the Company were jointly purchased at fair
market value by the sole participating employee and the trustees of the JSOP Trust, with such shares held
in the JSOP Trust. For accounting purposes, the awards are valued as employee share options. There is
only one participant in the JSOP and the Company no longer utilises the JSOP to incentivise employees.
The company awarded JSOP shares in 2013 and has made no further awards since. The JSOP share based
payment charge was expensed during the vesting period and there was no associated share based
payment charge in 2023 or 2022. At 31 December 2023 and 31 December 2022 there were 400,000 fully
vested shares held in the JSOP Trust. No JSOP shares were sold during either year.
The JSOP trust holds the shares of the JSOP until such time as the JSOP shares are vested and the
participating employee exercises their rights under the JSOP. The JSOP trust is granted an interest bearing
loan by the Company in order to fund the purchase of its interest in the JSOP shares. The loan held by the
trust is eliminated on consolidation in the financial statements of the Group. The Company funded portion
of the share purchase price is deemed to be held in treasury until such time as the shares are transferred
to the employee and is recorded as a reduction in equity in both the Group and Company financial
statements.
22. RESERVES
The following describes the nature and purpose of each reserve within equity:
Reserve
Description and purpose
Share premium
Amounts subscribed for share capital in excess of nominal value.
Merger reserve
Difference between fair value and nominal value of shares issued to acquire
interests of more than 90% in subsidiaries.
Foreign exchange reserve
Gains and losses arising from retranslating the net assets of overseas
operations into US Dollars.
Own shares held reserve
Cost of own shares held by the employee benefit trust, the JSOP trust or
the company as shares held in escrow.
Convertible debt/warrant
reserve
Equity component of the convertible loan and warrants issued that do not
form part of a share based payment.
Retained earnings
Cumulative net gains and losses recognised in the consolidated statement
of comprehensive income.
ACTIVE ENERGY GROUP PLC
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23. NOTE SUPPORTING THE STATEMENT OF CASH FLOWS
Reconciliation of loss before taxation to cash outflows from operating activities:
Group
2023
2022
US$
US$
Loss for the year
(15,517,696)
(1,343,745)
Adjustments for:
Share based payment expense
475,437
358,121
Depreciation
898
19,874
Impairment of PPE and intangible assets
11,497,099
1,000,000
Adjustments to PPE and intangible asset additions
400,000
-
Loss on disposal of PPE
-
212,626
Foreign currency translations
1,368,070
(3,456,479)
Finance expenses
4,874
9,473
Income tax
(634,129)
(1,395)
(2,405,447)
(3,201,525)
Decrease in inventories
-
27,250
Decrease in trade and other receivables
60,210
641,946
(Decrease) in trade and other payables
(534,232)
(22,234)
Net cash (outflow) from operating activities
(2,879,469)
(2,554,563)
ACTIVE ENERGY GROUP PLC
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23. NOTE SUPPORTING THE STATEMENT OF CASH FLOWS (continued)
Company
2023
2022
US$
US$
Loss for the year
(29,202,154)
(740,114)
Adjustments for:
Share based payment expense
475,437
358,121
Depreciation
898
1,318
Impairment of investments
5,913,580
-
Impairment of intercompany loans
19,454,760
-
Foreign currency translations
684,678
(381,967)
Finance expenses
943
5,474
(2,671,858)
(757,168)
Decrease in trade and other receivables
72,174
300,844
Increase/(decrease) in trade and other payables
136,346
(255,046)
Net cash (outflow) from operating activities
(2,463,338)
(711,370)
Cash to net debt reconciliation:
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
Cash and cash equivalents
319,137
2,614,472
38,445
2,545,913
Borrowings
(135,627)
(147,664)
(31,772)
(42,005)
Net Cash/(debt)
183,510
2,466,808
6,673
2,503,908
Cash and liquid investments
319,137
2,614,472
38,445
2,545,913
Fixed rate instruments
(135,627)
(147,664)
(31,772)
(42,005)
Net Cash/(debt)
183,510
2,466,808
6,673
2,503,908
Net Debt Reconciliation:
Group
Cash and
cash
equivalents
Unsecured
loans
Total Debt
Net Cash
US$
US$
US$
US$
Net cash/(debt) at 1 January 2023
2,614,472
(147,664)
(147,664)
2,466,808
Cash flows
(2,264,321)
18,981
18,981
(2,245,340)
Foreign exchange movements
(31,014)
(6,944)
(6,944)
(37,958)
Net cash/(debt) at 31 December 2023
319,137
(135,627)
(135,627)
183,510
ACTIVE ENERGY GROUP PLC
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23. NOTE SUPPORTING THE STATEMENT OF CASH FLOWS (continued)
Net Debt Reconciliation:
Company
Cash and
cash
equivalents
Unsecured
loans
Total Debt
Net Cash
US$
US$
US$
US$
Net cash/(debt) at 1 January 2023
2,545,913
(42,005)
(42,005)
2,503,908
Cashflows
(2,476,583)
12,302
12,302
(2,464,281)
Foreign exchange movements
(30,885)
(2,069)
(2,069)
(32,954)
Net cash/(debt) at 31 December 2023
38,445
(31,772)
(31,772)
6,673
24. FINANCIAL INSTRUMENTS
The Group's treasury policy is to avoid transactions of a speculative nature. In the course of trading the
Group is exposed to a number of financial risks that can be categorised as market, credit, and liquidity
risks. The board reviews these risks and their impact on the activities of the Group on an ongoing basis.
The principal financial instruments used by the Group, from which financial instrument risk arises, are:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Equity investments
Loans and borrowings
A summary of the financial instruments held is provided below.
Financial assets
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
At amortised cost:
Cash and cash equivalents
319,137
2,614,472
38,445
2,545,913
Amounts due from group companies
-
-
2,129,033
21,444,342
Other receivables
-
38,366
-
38,308
319,137
2,652,838
2,167,478
24,028,563
At fair value:
Financial investments
870,047
823,744
870,047
823,744
Total financial assets
1,189,184
3,476,582
3,037,525
24,852,307
ACTIVE ENERGY GROUP PLC
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
24. FINANCIAL INSTRUMENTS (continued)
Financial liabilities
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
At amortised cost:
Trade payables
381,926
428,106
238,385
170,975
Other current liabilities
268,727
737,107
234,305
145,696
Loans and Borrowings
135,627
147,664
31,772
42,005
Total financial liabilities
786,280
1,312,877
504,462
358,676
Fair value measurement
The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market
observable inputs and data as far as possible. Inputs used in determining fair value measurements are
categorised into different levels based on how observable the inputs used in the valuation technique
utilised are (the ‘fair value hierarchy’):
Level 1: Quoted prices in active markets for identical items (unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1 inputs
Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has
a significant effect on the fair value measurement of the item.
Transfers of items between levels are recognised in the period they occur.
Market Risk
Currency risk
The Group’s financial risk management objective is broadly to seek to make neither profit nor loss from
exposure to currency or interest rate risks. The Group is exposed to transactional foreign exchange risk
and takes profits and losses as they arise as, in the opinion of the directors, the cost of hedging against
fluctuations would be greater than the potential benefits.
The Group’s cash and cash equivalents are denominated in the following currencies:
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
US Dollars
62,134
2,062,984
31,242
1,996,724
UK Pounds Sterling
257,003
551,456
7,203
549,157
Euros
-
32
-
32
319,137
2,614,472
38,445
2,545,913
The Group’s trade and other receivables are denominated in the following currencies:
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
US Dollars
786,691
774,727
-
-
UK Pounds Sterling
59,023
131,197
59,023
131,197
845,714
905,924
59,023
131,197
ACTIVE ENERGY GROUP PLC
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
24. FINANCIAL INSTRUMENTS (continued)
The Group’s trade and other payables are denominated in the following currencies:
Group
Group
Company
Company
2023
2022
2023
2022
US$
US$
US$
US$
US Dollars
177,965
848,541
-
-
UK Pounds Sterling
487,601
351,255
487,601
351,255
665,566
1,199,796
487,601
351,255
The effect of a 5 per cent strengthening of the US Dollar at the reporting date on the foreign currency
denominated net financial instruments carried at that date would, all other variables held constant, have
been an increase in net assets of $8,171 (2022: $15,782 reduction in net assets). A 5 per cent weakening
of the US Dollar would, on the same basis, have decreased net assets by the same amount.
Interest rate risk
The Group and Company finance their operations through a mixture of equity and loans. The remaining
debt consists of government issued or guaranteed debt with fixed rates of interest.
Credit risk
Operational
The Group did not generate any revenue during the period and its exposure to credit risk is therefore
limited. The Group does not enter into derivative contracts to manage credit risk. Further information on
trade and other receivables is presented in note 14.
Financial
Financial risk relates to non-performance by banks in respect of cash deposits and is mitigated by the
selection of institutions with a strong credit rating.
Liquidity risk
Liquidity risk arises from the Group's management of working capital and payments to its suppliers.
Without revenue generating activities the Group has inherent liquidity risk and there is a risk that the
Group will encounter difficulties during this period in meeting its financial obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when
they fall due. The Group finances itself through a mix of equity and debt instruments. The Group’s
objective is to ensure sufficient liquidity is available to meet foreseeable needs through the preparation
of short and long term forecasts. Further details of the Directors’ going concern assessment are set out in
note 1.
The Group had loans of $135,627 at 31 December 2023 (2022: $147,664). No personal guarantees were
in place.
Capital risk management
The Group's objective when managing capital is to establish and maintain a capital structure that
safeguards the Group as a going concern and provides a return to shareholders.
ACTIVE ENERGY GROUP PLC
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
25. RELATED PARTY DISCLOSURES
As at 31 December 2023 all fees complied with directors’ contractual obligations and were paid up to
date. Details of directors’ remuneration are set out in the Directors’ report.
In 2023 there were related party transactions with Zimmfor Management Services Limited and Jason
Zimmermann for $43,533 in respect of directors’ fees. (2022: $nil)
The Group paid $nil (2022: $53,539) to INJ London Limited for sales and marketing services. This company
is owned by Max Aitken, who was a director of the Company.
Transactions between the Company and its subsidiaries have been eliminated on consolidation. These
transactions, which were incurred in the ordinary course of business and under normal commercial terms,
were as follows:
2023
2022
US$
US$
Allocation of management time and expenses
-
65,826
The Company’s intercompany receivable balances at the year end were as follows:
2023
2022
US$
US$
Amounts due from Group companies
2,129,033
21,444,342
26. CAPITAL COMMITMENTS
The Group had no capital commitments at 31 December 2023 or 31 December 2022.
27. SUBSEQUENT EVENTS
On 4 March 2024 the Group agreed a settlement with Player Design, Inc. and its connected parties (“PDI”)
in relation to the Group’s aborted operations in Ashland, Maine. Under this settlement the Group received
cash of $1,650,000 which represented consideration for the transfer of certain property, plant and
equipment to PDI (classified as non-current assets held for sale in these financial statements), the return
of certain cash advances made by the Group to PDI for the development of the Ashland facility and the
settlement of all claims between the Group and PDI. The 31 December 2023 fair value of the non-current
assets held for sale has been determined based on the consideration ultimately received for them under
the settlement with PDI.
The Company’s shares were suspended from trading on AIM on 1 July 2024 and will remain suspended,
pursuant to AIM Rule 19, until the Company has published its annual report and accounts for the year
ended 31 December 2023 and its interim report and accounts for the six months ended 30 June 2024.
On 22 July 2024 the Group placed its subsidiary Advanced Biomass Solutions Limited into a members’
voluntary liquidation. The Group expects the company to realise its assets and settle its liabilities at
amounts approximate to their carrying values.
ACTIVE ENERGY GROUP PLC
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
27. SUBSEQUENT EVENTS (continued)
In October 2024 the Company raised £200,000 ($260,878) through the issue of loan notes, of which
£27,616 ($36,022) are convertible loan notes that will convert to new ordinary shares representing 29.9%
of the Company’s issued share capital on 31 December 2024 (subject to shareholder approval). The loan
notes are secured by way of a fixed and floating charge over the assets of the Company.
On 1 November 2024 Jason Zimmermann and Max Aitken resigned as directors of the Company.
28. ULTIMATE CONTROLLING PARTY
The company has no overall controlling party.