PowerHouse Energy Group Plc Annual Report 2012

FY2012 Annual Report · PowerHouse Energy Group Plc

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POWERHOUSE ENERGY GROUP PLC

COMPANY NUMBER 03934451

ANNUAL REPORT AND CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

CONTENTS

Contents ......................................................................................................................................... 2
Company Infomation ....................................................................................................................... 3
Chairman's Report .......................................................................................................................... 4
Directors’ Report ............................................................................................................................. 6
Directors’ Responsibilities Statements ............................................................................................ 8
Independent Auditor’s Report to the Members of PowerHouse Energy Group plc .......................... 9
Company Statement of Comprehensive Income ........................................................................... 11
Company Statement of Changes in Equity .................................................................................... 11
Company Statement of Financial Position ..................................................................................... 12
Company Statement of Cash Flows .............................................................................................. 13
Notes to the Company Accounts ................................................................................................... 14
Independent Auditor’s Report to the Members of PowerHouse Energy Group plc ........................ 21
Consolidated Statement of Comprehensive Income ...................................................................... 23
Consolidated Statement of Changes in Equity .............................................................................. 24
Consolidated Statement of Financial Position ............................................................................... 25
Consolidated Statement of Cash Flows ........................................................................................ 26
Notes to the Consolidated Accounts ............................................................................................. 27
Notice to the Annual General Meeting ........................................................................................... 37

2 | Page

COMPANY INFOMATION

Directors

Robert Keith Allaun (Executive Chairman)
Nigel Brent Fitzpatrick (Non-executive director)
James John Pryn Greenstreet (Non-executive director)

Company secretary

Nigel Brent Fitzpatrick

Company number

03934451

Registered office

Website

Bankers

Nominated Adviser and
Broker

Registrar

Auditor

16 Great Queen Street
London
WC2B 5DG, United Kingdom

www.powerhouseenergy.net

HSBC
79 Piccadilly
London
W1J 8EU, United Kingdom

Sanlam Securities UK Limited
10 King William Street
London
EC4N 7TW, United Kingdom

Neville Registrars Limited
Neville House, 18 Laurel Lane
Halesowen
B63 3DA, United Kingdom

Deloitte LLP
1 City Square
Leeds
LS1 2AL, United Kingdom

3 | Page

CHAIRMAN'S REPORT

2012 has been a challenging and difficult year for the Group, for the directors and for the shareholders of
PowerHouse Energy Group plc (“PowerHouse”). However, as we close the books on the 2012 financial year
we also can see several positive outcomes and encouraging signs emerging.

On 10 October 2012 AIM agreed to a lifting of the suspension in the trading of the Company’s shares. Re-
establishing ourselves as a viably listed company on the AIM was a significant accomplishment. However, it
was only a single step toward our longer-term goals. Our intention is to establish PowerHouse as a pre-
eminent provider of commercial, community-scale, Waste to Energy solutions globally.

A rapidly growing market opportunity exists to recover energy, in a fully sustainable manner, from the
existing commercial and residential waste stream. Projects are continuing to be developed, worldwide, on a
massive scale to leverage this renewable source of energy. We have committed ourselves to the
development of a best-of-breed commercial platform on which to base projects of both small and large
magnitude.

To that end, working in conjunction with industry experts, we have engaged in a broad evaluation of both
existing and emerging technologies and products that would serve as the cornerstone to a commercial
platform. We have evaluated and conducted due diligence on a number of companies. While we have
decided against pursuing relationships with most of our targets, our explorations have underscored that
there is still potential value in our 30% ownership stake in Pyromex Holdings, A.G. (“Pyromex”) and that its
patented Ultra-High Temperature (UHT) gasification process may hold a unique opportunity for us to work in
parallel with their efforts and develop a fully executed, and commercially viable, suite of offerings.
PowerHouse has a license in place with Pyromex and has the rights to manufacture the UHT reactor and
integrate it into our commercial offerings. Having recently worked very closely with the Pyromex team, it has
become clear where the stumbling blocks of the past lay, and we are now prepared to work around those.

Significant, recent, advances in engineering, by a number of resources, including the Powerhouse Energy
team, have resulted in an extremely promising near-term prospect for a commercial system that can deliver
syngas which can readily, efficiently, and economically be converted into electricity. We’re confident that
based upon the added process engineering, project management, and commercial expertise that we are
building into Powerhouse, we finally will be able to drive forward and move the “science experiment”
aggressively into the commercial realm. Renewable energy is the future. Even as additional stores of fossil
fuels are discovered, the mandate of mankind is clear: Energy must become cleaner and it must be
sustainable. The UHT reactor can become a key component in this process. Generating only Syngas and a
minute amount of non-leachable, non-toxic “sand”, the effectively emission free (no smoke, no NOx, no
odour, no noxious waste at all) unit represents a key building-block to delivering low cost, clean electricity;
ultra-pure synthetic fuels; pure hydrogen streams for the use in Hydrogen Fuel Cell applications. Syngas is
created efficiently, in a cost-effective manner and in abundance- all from waste. By diverting and gasifying
only 5% of the plastic material that goes to landfill after recycle sorting, thousands of homes can be
provided with clean electricity. The opportunity is growing. Awareness is growing. The market is growing.
And we, and our partners, are poised to take advantage of it.

To get there still requires tremendous effort. However, measures have been taken to ensure that we are on
our way.

During the latter half of the year we have managed to settle a number of outstanding liabilities that had
previously put the Company at risk. We have subsequently progressed additional settlement negotiations
and are confident in reaching reasonable outcomes for the Company and its shareholders - in fact turning
once adversarial relationships into productive partnerships.

In line with our annual accounts of 2011, the annual accounts for the year ended 31 December 2012 show
separate statements for both the Company and the Group. The Company financial statements have been
presented prior to the Group financial statements as the Board of Directors believes the Company accounts
more accurately represent the on-going position of the Group.

4 | Page

The Company accounts reflect a decrease in net liabilities of £625,579, mainly as a result of a waiver of the
loan with its subsidiary to £nil. Administrative costs have been reduced from £2,045,178 in 2011 to £354,571
as a result of focused management and only incurring absolutely necessary costs. The Group accounts show
the expiry of the Pyromex option (see 2012 interim Chairman report for further details) and the result of
Pyromex no longer being consolidated. Additionally, the Group accounts show the settlement agreements
with former employees.

The financial support received from Hillgrove Investments Pty Limited (“Hillgrove”) has been a lifeline to the
Company that has afforded us the opportunity to emerge from our trading suspension and allowed
Powerhouse to continue to develop our business, which we have been doing pro-actively. Hillgrove
continues to provide financial support for the Company under the terms of the Convertible Loan Agreement
dated 8 October 2012. On 28 June 2013, Hillgrove agreed to amend the repayment date of the previous
Convertible Loan note, provided to the Company on 19 June 2012, to 8 October 2014. Details of the loan are
included in note 10 to the Company accounts. This additional support from Hillgrove is sufficient for the
Company to meets its operational obligations for the next 12 months.

The most pressing challenges facing the Company include resolution to the existing licensing agreement with
RenewMe (see note 9 of the Company accounts), resolution to the Aspermont loan (see note 10 of the
Company accounts.) and final resolution to any issues outstanding regarding Powerhouse Energy, Inc.
Active and productive negotiations are underway to resolve any issues these challenges may represent.

Having regard for the uncertainties to the above challenges, the Directors have a reasonable expectation
that the Company and Group will have adequate resources to continue as a going concern for the
foreseeable future (refer to note 1.3 in the Company accounts). Thus we continue to adopt the going
concern basis of accounting for the preparation of the annual financial statements. However, there remain
risks to which shareholders should be aware and we have highlighted them in note 13 of the Company
accounts.

The outlook for the Waste to Energy industry is a glowing one. Seven European countries no longer allow
landfill of municipal solid waste. In addition to the EU Landfill Directive requires an additional reduction of
35% of the current biodegradable municipal waste sent to landfill by 2016, 18 countries are implementing
stringent landfill taxes immediately, driving tremendous demand for realistic, commercially viable solutions to
recover the energy value represented in the waste stream. We believe that we are building one such
solution.

As we continue to build our new team and our commercial platform continues to develop we are confident
that PowerHouse Energy Group will turn the corner to replicable success. We appreciate that this has been
a difficult year for all stakeholders of the Company and thank you for continuing to support the Company
while it prepares for the next phase of its growth.

Keith Allaun
Chairman
28 June 2013

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DIRECTORS’ REPORT

The Directors present their report along with the Company’s financial statements and the consolidated
financial statements for the year ended 31 December 2012. The financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and will be laid before the shareholders
of the Company at the Annual General Meeting to be held on 6 September 2013.

Principal activities
The principal activities of the Group will be to maintain minimal expenditure whilst it develops the Pyromex
technology.

Review of developments and future prospects
A review of the development of the business together with an indication of future developments is included
in the Chairman’s Report set out on pages 4 to 5.

The Company financial statements for the year ended 31 December 2012 are set out on pages 11 to 20. The
Company profit for the year after taxation amounted to £554,528 (2011: Loss of £49,853,783), after
accounting for a credit for waiver of its £1,109,068 intercompany loan with its subsidiary, Powerhouse
Energy, Inc. Included in last year’s loss was the impairment of the interest in Powerhouse Energy Inc of
£47,830,451. The Group financial statements are set out on pages 23 to 36. The Group loss for the year
after taxation amounted to $2,206,710 (2011: $32,259,560). The net liabilities of the Company are
£1,125,229 (2011: £1,750,808) with the movement in the year set out on page 11. The net liabilities of the
Group are $2,302,034 (2011: $156,188) with the movement in the year set out on page 24.

The Directors do not recommend the payment of a dividend (2011: £nil).

Principal risks and uncertainties are discussed in note 13 to the Company financial statements.

Details of significant events since the balance sheet date are contained in note 16 to the Company financial
statements.

Charitable and political donations
During the year, the Company and Group made no charitable or political donations (2011: £nil).

Research and development
During the year, no research and development expenditure was incurred by the Company.
The Group incurred no research and development related costs during the year (2011: £177,237).

Substantial shareholdings
Shareholders holding in excess of 3 per cent. of the issued share capital of the Company, which the
Company was aware of as at 31 December 2012 were as follows:

David Mitchell Moard
Credal Trust Management Limited
Linc Energy Limited
Thomas McMahon
Credit First Holding Limited
Credit First Asset Management Limited

Number of
ordinary
shares of 1.0p
each

Percentage of
voting rights

58,031,989
28,473,967
28,350,000
26,340,017
18,340,017
9,681,529

20.4
10.0
10.0
9.3
6.4
3.4

6 | Page

Directors
The Directors, who served during the year, and subsequently, were as follows:

Robert Keith Allaun
Nigel Brent Fitzpatrick
James John Pryn Greenstreet

Executive Chairman
Non-Executive
Non-Executive

Corporate Governance
As AIM companies are not required to provide corporate governance disclosures, the Directors have chosen
not to do so.

Payment to suppliers
The Group does not have a standard or code which deals specifically with the payment of suppliers. Total
creditor days for the Company the year ended 31 December 2012 were 131 days (2011: 38 days) and for
the Group 189 days (2011: 127 days).

Going concern basis
The Directors continue to adopt the going concern basis of accounting for the preparation of the annual
financial statements, further explanation is available in to note 1.3 of the Company accounts.

Auditor
Each of the persons who is a director at the date of approval of this report confirms that:

So far as the director is aware there is no relevant audit information of which the Company’s auditor
is unaware; and

- The director has taken all the steps that he ought to have taken as a director in order to make
himself aware of any relevant audit information and to establish that the Company’s auditor is aware
of that information.

This confirmation is given, and should be interpreted, in accordance with the provisions of s.418 of the
Companies Act 2012.

Approved by the Board of Directors and signed on behalf of the Board on 28 June 2013.

Keith Allaun
Director

7 | Page

DIRECTORS’ RESPONSIBILITIES STATEMENTS

The Directors are responsible for preparing the Annual Report and the financial statements in accordance
with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors are required to prepare the Group financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and have also chosen to
prepare the parent Company financial statements under IFRSs as adopted by the EU. Under Company law
the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing
these financial statements, International Accounting Standard 1 requires that Directors:

properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are
insufficient to enable users to understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial performance; and
make an assessment of the Company'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 Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Company and enable them to ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement
We confirm that to the best of our knowledge:

the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
the management report, which is incorporated into the Directors' report, includes 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.

BY ORDER OF THE BOARD

Keith Allaun
Director
28 June 2013

8 | Page

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
POWERHOUSE ENERGY GROUP PLC

We have audited the parent Company financial statements of PowerHouse Energy Group plc for the year
ended 31 December 2012 which comprise the Company Statement of Comprehensive Income, the Company
Statement of Changes in Equity the Company Statement of Financial Position, the Company Statement of
Cash Flows and the related notes 1 to 16. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union.

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 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 and the Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.

Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the
preparation of the parent Company financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the parent Company financial statements in
accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate
to the parent Company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of
the financial statements. In addition, we read all the financial and non-financial information in the annual
report to identify material inconsistencies with the audited financial statements. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements
In our opinion the parent Company financial statements:

give a true and fair view of the state of the Company’s affairs as at 31 December 2012 and of its

profit for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the parent Company financial statements.

9 | Page

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 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.

Other matters
We have reported separately on the Group financial statements of PowerHouse Energy Group plc for the
year ended 31 December 2012. That report includes disclaimer of opinion in respect of the audit evidence
available to us and, as a result of this, we have been unable to express an opinion on the Group financial
statements.

Simon Manning (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Leeds, United Kingdom
28 June 2013

10 | Page

COMPANY STATEMENT OF COMPREHENSIVE INCOME

Revenue
Administrative expenses

Operating loss

Finance income
Finance costs
Impairment of investment
Loan waivers

Profit/(loss) before taxation

Income tax expense

Total comprehensive income/(expense)

Earnings/(loss) per share (pence)

Diluted profit (loss) per share (pence)

Note

31 December 31 December
2011
£

2012
£

3
7
10

45,000
(354,571)

25,000
(2,045,178)

(309,571)

(2,020,178)

2
(124,972)
(119,999)
1,109,068

77
(3,231)
(47,830,451)
-

554,528

(49,853,783)

554,528

(49,853,783)

0.19

<0.01

(33.39)

COMPANY STATEMENT OF CHANGES IN EQUITY

Share
capital
£

Share
premium
£

Deferred
shares

(4.0p)

Deferred
shares
(4.5p)
£

Retained
earnings
£

Total
£

Balance at 1 January 2011
Transactions with equity participants:

486,868

714,948

781,808

(1,892,636)

90,988

- Consolidation and subdivision
- Equity issued for acquisition
- Shares issued for services received
- Shares issue to settle subsidiary’s

liability

- Conversion of warrants

(389,494)
-
2,737,665 45,171,464
28,333

1,666

6,000
7

66,737
115

- Total comprehensive expense

-
-
-

-
-

389,494
-
-

-
-

-
-
-

-
-

-
47,909,129
29,999

72,737
122

(49,853,783)

2,842,712 45,981,597

781,808

389,494 (51,746,419) (1,750,808)

Balance at 31 December 2011
Transactions with equity participants:
- Shares issued to settle liabilities
- Conversion of warrants

- Total comprehensive income

20,200
2,432

7,070
41,349

-
-

27,270
43,781

554,528

Balance at 31 December 2012

2,865,344 46,030,016

781,808

389,494 (51,191,891) (1,125,229)

The notes numbered 1 to 16 are an integral part of the financial information.

11 | Page

COMPANY STATEMENT OF FINANCIAL POSITION

ASSETS
Non-current assets
Property, plant and equipment
Other non-current assets

Total non-current assets

Current Assets
Trade and other receivables
Cash and cash equivalents

Total current assets

Total assets

LIABILITIES
Non-current liabilities
Loans

Current liabilities
Trade and other payables
Loans

Total current liabilities

Net liabilities

EQUITY
Share capital
Share premium
Deferred shares
Accumulated losses

Total deficit

Note

2012
£

2011
£

6
7

343
1

344

2,843
120,000

122,843

2,310
7,125

9,435

116,820
74,522

191,342

9,779

314,185

(194,308)

9
10

(728,978)
(211,722)

(202,510)
(1,862,483)

(940,700)

(2,064,993)

(1,125,229)

(1,750,808)

2,865,344
46,030,016
1,171,302

2,842,712
45,981,597
1,171,302
(51,191,891) (51,746,419)

(1,125,229)

(1,750,808)

The financial statements of PowerHouse Energy Group Plc, Company number 03934451, were approved by
the board of Directors and authorised for issue on 28 June 2013 and signed on its behalf by:

Keith Allaun
Director

The notes numbered 1 to 16 are an integral part of the financial information.

12 | Page

COMPANY STATEMENT OF CASH FLOWS

Cash flows from operating activities
Profit/(Loss) after taxation
Adjustments for:
- Shares issued for services
- Depreciation and amortisation
- Finance costs
- Finance income
- Waiver of loan by PowerHouse Energy, Inc.
-
Changes in working capital:
- Decrease in trade and other receivables
-
- Movement in loans - intercompany

Impairment of non-current assets

(Decrease)/ increase in trade and other payables

2012
£

2011
£

554,528

(49,853,783)

-
729
124,972
(2)
(1,109,068)
119,999

29,999
359
(77)
3,231
-
47,830,451

114,510
(100,188)
(99,519)

191,530
159,338
1,598,936

Net cash used in operations

(394,039)

(40,016)

Cash flows from investing activities
Disposal/ (purchase) of tangible assets

Net cash flows generated from/(used in) investing
activities

Cash flows from financing activities
Share issue
Finance income
Finance costs
Loans

1,771

(3,202)

1,771

(3,202)

43,791
2
(124,972)
406,030

122
77
(3,231)
-

Net cash flows from/(used in) financing activities

324,841

(3,032)

Net decrease in cash and cash equivalents

(67,427)

(98,546)

Cash and cash equivalents at beginning of period

74,552

120,772

Cash and cash equivalents at end of period

7,125

74,522

The notes numbered 1 to 16 are an integral part of this financial information.

13 | Page

NOTES TO THE COMPANY ACCOUNTS

1. ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to the financial information.

Basis of preparation

1.1.
This financial information is for the year ended 31 December 2012 and has been prepared in accordance
with International Financial Reporting Standards (“IFRS”) adopted for use by the European Union and the
Companies Act 2006. These accounting policies and methods of computation are consistent with the prior
year.

Judgements and estimates

1.2.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts in the financial
statements. The areas involving a higher degree of judgements or complexity, or areas where assumptions
or estimates are significant to the financial statements such as the impairment of investments and going
concern are disclosed within the relevant notes.

1.3. Going concern
The Directors have considered all available information about the future events when considering going
concern. The Directors have reviewed cash flow forecasts for twelve months following the date of these
accounts. The cash flow forecast assumes no further funding of PowerHouse Energy, Inc. and Pyromex by
the Company and a favourable settlement outcome to RenewMe liability (see note 9) and the Aspermont
loan (see note 10).

The convertible loan obtained from Hillgrove Investments Pty Limited (see note 10) is considered sufficient
to settle outstanding creditors, maintain the Company’s reduced overhead and other planned events for at
least the next 12 months. In addition, the Company is in receipt of a letter of intention of financial support
from Hillgrove Investments Pty Limited to ensure the Company continues to meet its obligations as they fall
due and to ensure it operates as a going concern for a period of at least 12 months. Based on this, the
Directors continue to adopt the going concern basis of accounting for the preparation of the annual financial
statements.

1.4.
The financial information is presented in sterling which is the Company’s functional currency.

Foreign currency translation

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are
revalued to the exchange at date of settlement or at reporting dates (as appropriate). Exchange gains and
losses resulting from such revaluations are recognised in the income statement.

Foreign exchange gains and losses are presented in the income statement within ‘administrative expenses’.

1.5. Revenue
Revenue represents the amounts (excluding VAT) derived from the supply of management and
administration services to the Company’s subsidiary, PowerHouse Energy, Inc. Revenue is recognised when
amounts fall due under the formalised contract.

1.6. Employee costs
The Company only has defined contribution pension plans and pays contributions to separately administered
pension or healthcare insurance entity on a contractual basis. The Company has no further payment
obligations once the contributions have been paid. The contributions are recognised as employee benefit
expense when they are due.

1.7. Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Operating lease rentals are charged to the income statement on a straight line
basis over the period of the lease. The Company has no finance leases.

14 | Page

1.8. Finance income and expenses
Finance income and expenses are recognised as they are incurred or as a result of financial assets or
liabilities being measured at amortised cost using the effective interest method. No finance expenses were
incurred in the production of a qualifying asset.

1.9. Income tax expense
The tax expense for the period comprises current and deferred tax.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in these financial statements.

1.10. Plant, property and equipment
Plant, property and equipment is stated at cost less accumulated depreciation. Cost represents the cost of
acquisition or construction, including the direct cost of financing the acquisition or construction until the
asset comes into use.

Depreciation on plant, property and equipment is provided to allocate the cost less the residual value by
equal instalments over their estimated useful economic lives of 3 years.

The expected useful lives and residual values of plant, property and equipment are reviewed on an annual
basis and, if necessary, changes in useful life or residual value are accounted for prospectively.

1.11. Other non-current assets
Other non-current assets represent the investment in PowerHouse Energy, Inc. The investment is carried at
cost less accumulated impairment. Cost was determined using the fair value of shares issued to acquire the
investment.

During the year the Company’s investment in PowerHouse Energy, Inc. was impaired to £1. The recoverable
amount was determined by taking the fair value of its investment in Pyromex less the fair value of known
liabilities and obligations of PowerHouse Energy, Inc. The fair value of Pyromex assumes no sales of the
Pyromex gasification units and assumes the liabilities and obligations of Pyromex exceed the value of its
assets.

1.12. Trade and other receivables
Trade receivables are recognised at fair value. Subsequently they are carried at their initial recognition value
less any impairment losses.

1.13. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits and are recognised and subsequently
carried at fair value.

1.14. Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers. Trade and other payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.

1.15. Loans
Loans are financial obligations arising from funding received and used to support the operational costs of the
Company. These are initially recognised at fair value. Loans are subsequently carried at amortised cost using
the effective interest method.

1.16. Adoption of new and revised standards
New and revised standards adopted during the year and those standards and interpretations in issue but not
yet effective are shown in note 1.22 to the Group financial statements.

15 | Page

1.17. Impairment testing
Assets not subsequently carried at fair value are reviewed periodically for indications of impairment. On
recognition of an impairment event, the book values of the assets are compared to their recoverable
amount. In the event the recoverable amount is less that the book value, asset is reduced to the recoverable
amount and the difference recognised as an expense. The investment in PowerHouse Energy, Inc. was
reduced to £1 by recognising a further impairment in the current year.

2. Administrative expenses

Included in administrative expenses are:

Employee expenses and Directors’ fees
Depreciation and amortisation
Operating leases
Net foreign exchange loss
Auditor’s remuneration – Company’s audit
Auditor’s remuneration – taxation advisory services

3. Finance costs

Aspermont loan
Hillgrove Investments Pty Limited
Other – Trade creditors

4. Income tax expense

2012
£

85,506
729
27,200
1,414
10,000
-

2012
£

118,442
6,530
-
124,972

2011
£

477,471
359
44,973
4,276
16,000
23,000

2011
£

-
-
3,231
3,231

As the Company incurred a loss, no current tax is payable (2011: £nil). In addition, there is no certainty
about future profits from which accumulated tax losses could be utilised and accordingly no deferred tax
asset has been recognised. Tax losses amount to £1,678,673 (2011: £2,939,787).

5. Earnings/(loss) per share

Total comprehensive profit/(loss) (£)

2012

2011

554,528

(49,853,783)

Weighted average number of shares
Weighted average number of dilutive shares

285,085,115
139,500,000

149,285,334
-

Earnings/(loss) per share (pence)
Diluted profit (loss) per share (pence)

6. Property, plant and equipment

Opening carrying value

- Disposals
- Depreciation
- Net carrying value

At 31 December 2012

Cost
Accumulated amortisation

Net carrying value

0.19
<0.01

(33.39)
(33.39)

Office
equipment
£

2,843
(1,771)
(729)
343

685
(342)

343

16 | Page

7. Other non-current assets

Other non-current asset consists solely of the investment in PowerHouse Energy, Inc. PowerHouse Energy,
Inc. (“the subsidiary”) is incorporated in California in the United States of America and the Company holds
100% of the common stock and voting rights of the subsidiary.

Investment - Cost
Accumulated impairment

2012
£

2011
£

47,909,129
(47,909,128)

47,909,129
(47,789,129)

120,000

The cost of the subsidiary was determined using an issue price of 17.5 pence (the price of the Company’s
shares on re-listing after the reverse takeover) for the 273,766,456 shares issued to acquire PowerHouse
Energy, Inc.

The impairment of the subsidiary was determined by taking into account the fair value of all known assets
(including a 30% investment in Pyromex Holdings AG (“Pyromex”), and liabilities of the subsidiary. The
impairment test assumed no cash flows from the sale of the Pyromex systems by the subsidiary. An
impairment of £119,999 was recognised during the year.

8. Trade and other receivables

Other receivables
Prepayments
VAT receivable
Pyromex

2012
£

-
-
2,310
-

2011
£

122
16,745
99,952
1

2,310

116,820

The receivable from Pyromex of £41,321 is repayable on demand, is unsecured and attracts interest at a
rate of 10 per cent. per annum. This receivable has been impaired to nil value due to the inherent
uncertainty of its recoverability.

9. Trade and other payables

Trade payables
Salary and wages accrual
RenewMe
Other accruals

2012
£

38,792
-
653,896
36,290

2011
£

62,841
57,855
-
81,814

728,978

202,510

RenewMe Limited had been granted exclusive rights by Pyromex to use, own, assemble and install and
operate Pyromex systems in territories also licensed to the Company’s subsidiary PowerHouse Energy, Inc.
The Company entered into a settlement agreement with RenewMe whereby the parties agreed to change
the respective exclusive rights pertaining to the Pyromex technology. Under the original settlement
agreement Powerhouse Energy, Inc. had the obligation to pay five instalments of Euro 200,000 annually
beginning 30 June 2011. The Company guaranteed the obligations under the agreement of PowerHouse
Energy, Inc. As PowerHouse Energy, Inc is unable to meets its obligations, all remaining amounts (Euro
800,000) due under the original settlement agreement have been recognised as a liability. The Directors are
currently in negotiations with RenewMe to enter into a new settlement agreement, which they anticipate will
reduce the financial burden to the Company.

17 | Page

10.

Loans

PowerHouse Energy, Inc.
Aspermont loan (Shown as current)
Hillgrove Investments Pty Limited (Shown as non-current)

2012
£

2011
£

-
211,722
194,308
406,030

1,862,483
-
-

The loan from PowerHouse Energy, Inc. was extinguighed by the Company recognising the RenewMe
liability, settling the dispute with the US employees and other liabilities with the balance of £1,109,068 being
waived.

The Aspermont loan consists of Aspermont Ltd, Dilato Holdings Pty Ltd and Tesla Nominees Pty Ltd. These
parties collectively provided a facility of £100,000 to the Company repayable by 18 May 2012, which incurs
interest at a default rate of 7 per cent. per month. The Company is currently in productive negotiations to
revise the terms of the loan.

Hillgrove Investments Pty Limited (“Hillgrove”) has provided the Company with a convertible loan agreement
amounting to £465,000 – which can be increased at Hillgrove’s option. The loan is unsecured, repayable on
8 October 2014 and carries interest of 15 per cent. per annum. Hillgrove has the option at any time to
convert the loan in part or whole at a conversion price of 1p per share. Hillgrove have provided a letter of
support indicating they are willing to increase the loan amount pending any unforeseeable or material
changes to the Company’s current circumstances.

11. Share capital

0.5 p Ordinary
shares

1.0 p Ordinary
shares

4.5 p Deferred
shares

4.0 p Deferred
shares

Balance at 1 January 2011

97,373,523

- Allotment of shares
- Consolidation and subdivision of ten
0.5p ordinary shares into one 1.0p
ordinary share and one 4p deferred
share

- Consideration shares to acquire 100%

of PowerHouse Energy, Inc.
Issue of shares for services received
Issue of shares to settle Inc. liability

-
-
- Exercise of Warrants

(97,373,530)

9,737,353

-
-
-
-

273,766,453
166,667
600,048
676

17,373,523

-
-
-
-

9,737,353

-
-
-
-

Balance at 31 December 2011

- 284,271,197

17,373,523

9,737,353

Issue of shares to settle liabilities

-
- Exercise of Warrants

Balance at 31 December 2012

12. Convertible instruments

2,020,000
-
-
243,229
- 286,534,426

-
-
17,373,523

-
-

9,737,353

Warrant holders
Linc Energy
Hillgrove
Driftwood
Other

Average
exercise
price

Notes

Currently

Exercisable
Within 1
year

1 to 5
years

Total

12.1 £0.180
9,493,448
12.2 £0.008 465,000,000
12.3 £0.008 232,500,000
-
12.4 £0.120
2,499,999
12.5 £0.186
709,493,447

-
-
-
535,500
-
535,500

-
9,493,448
- 465,000,000
- 232,500,000
2,956,929
2,499,999
2,421,429 712,450,376

2,421,429
-

18 | Page

12.1. Warrants
Warrant holders hold 9,493,448 warrant instruments to subscribe ordinary shares at an exercise price of
£0.180 per share convertible on or before 29 June 2013.

12.2. Linc Energy
Linc Energy Limited holds options to acquire ordinary shares as follows up to a value of US$6,000,000
(£3,882,741), exercisable at any time in the 30 month period following Admission (29 June 2011) at a price
equal to a 20 per cent discount to the previous 60 day volume weighted price of an ordinary share.

12.3. Hillgrove
Hillgrove Investments Pty Limited holds an option to acquire ordinary shares up to a value of US$3,000,000
(£1,941,371), exercisable at any time in the 30 month period following Admission (29 June 2011 at a price
equal to a 20 per cent discount to the previous 60 day volume weighted price of an ordinary share.

In addition, Hillgrove has the option at any time to convert its loan of £194,308 in part or whole at a
conversion price of 1p per share.

12.4. Driftwood
On 13 July 2011, PowerHouse Energy Group plc granted 2,956,929 options over ordinary shares to
Driftwood Capital Pty Limited (as trustee for Driftwood Capital Unit Trust) exercisable as follows:
535,500 after 1 October 2013 at an exercise price of US$0.12 (£0.074) per share; and
2,421,429 after 1 April 2014 at an exercise price of US$0.21 (£0.130) per share.

12.5. Other
Kailing Wang, John Carter Brookhart and Andrew Forbes each held 833,333 options over ordinary shares at
an exercise price of US$0.30 (£0.186) per share exercisable at any time up to 10 June 2013. These options
have expired after balance sheet date.

13. Material risks
13.1. Requirement for further funds
In assessing the going concern, the Directors have reviewed cash flow forecasts for 12 months following the
date of these accounts. The cash flow forecasts assumed no further funding of PowerHouse Energy, Inc. and
Pyromex. The financial support provided by Hillgrove Investments Pty Limited is considered sufficient to
maintain the Company’s reduced overhead and other planned events. The Company is dependent on this
continued support to maintain its minimal operational costs.

In the event the Company requires other equity financing, or the conversion option in the Hillgrove loan is
exercised, remaining shareholders will be diluted.

13.2. Reliance on the Pyromex technology
As a result of technical issues identified since the Group’s investment in Pyromex technology, there has been
material reductions to the carrying values of assets previously recognised. This highlights the Company’s
dependency on its exploitation of the Pyromex technology. In the event the Pyromex technology continues
to be unproven competing technologies may capture the market targeted by the Pyromex technology
resulting in reduced returns for shareholders.

13.3. Resolution to Aspermont and RenewMe obligations
In assessing the going concern, the Directors have assumed that the obligation to Aspermont loan (see note
10) and the RenewMe settlement (see note 9) are resolved with minimal impact on cash flows. Discussions
with these parties are on-going and the parties seem willing to support the Company. However, there is no
absolute certainty that these liabilities will be settled as anticipated.

19 | Page

14. Directors’ Remuneration
The Directors who held office at 31 December 2012 had the following interests, including any interests of a
connected person in the ordinary shares of the Company:

Number of
ordinary
shares of 1.0p
each

Percentage of
voting rights

Nigel Brent Fitzpatrick

103,459

>0.1

The Directors who held office at 31 December 2012 had the following options over ordinary shares, including
those of a connected person:

Number of
instruments

Exercise price

Date
exercisable

Expiry date

Nigel Brent Fitzpatrick

103,459

£0.18

29 June 2012

29 June 2013

The remuneration of the Directors of the Company paid for the year or since date of appointment, if later, to
31 December 2012 is:

2012
£
Salary/Fee

2012
£
Pension

2012
£
Benefits

Nigel Brent Fitzpatrick
James John Pryn Greenstreet
Robert Keith Allaun

-
-
64,409

-
-
-

2012
£
Total

-
-
64,409

2011
£
Total

12,167
12,000
-

Service contracts
Brent Fitzpatrick and James Greenstreet have service contracts which can be terminated by providing three
months’ written notice.

15. Post balance sheet events and contingent liabilities

On 28 June 2013 Hillgrove Investments Pty Limited, provided a letter of intent indicating that pursuant to
the terms of the convertible loan agreement (see note 10) which allows for an increase of the amount
loaned at Hillgrove’s sole discretion, to continue to provide adequate financial support to the Company to
ensure the Company may meet its obligations as they fall due and to ensure it operates as a going concern
for a period of at least twelve months from the date of the letter pending any unforeseeable or material
changes to the Company’s current circumstances.

Additionally, Hillgrove extended the repayment date of the note from it’s originally scheduled repayment
date of 17 June 2014 to 8 October 2014.

16. Related Parties

Hillgrove Investments Pty Limited is a related party.

20 | Page

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
POWERHOUSE ENERGY GROUP PLC

We were engaged to audit the Group financial statements of PowerHouse Energy Group plc for the year
ended 31 December 2012 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Changes in Equity, the Consolidated Statement of Financial Position, the
Consolidated Statement of Cash Flow and the related notes 1 to 16. The financial reporting framework that
has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.

Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the
preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the Group financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board’s Ethical Standards for Auditors. Because of the matter described in
the basis for disclaimer of opinion on financial statements paragraph, however, we were not able to obtain
sufficient appropriate audit evidence to provide a basis for an audit opinion.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate
to the Group’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of
the financial statements. In addition, we read all the financial and non-financial information in the annual
report to identify material inconsistencies with the audited financial statements. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications for our report.

Basis for disclaimer of opinion on financial statements
The audit evidence available to us was limited because we were unable to obtain accounting records in
respect of PowerHouse Energy, Inc. and Pyromex Holding AG. As a result of this we have been unable to
obtain sufficient appropriate audit evidence concerning the state of the Group’s affairs as at 31 December
2012 and of its loss of the year then ended.

Disclaimer of opinion on financial statements
Because of the significance of the matter described in the basis for disclaimer of opinion on financial
statements paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a
basis for an audit opinion. Accordingly we do not express an opinion on the financial statements.

Opinion on other matter prescribed by the Companies Act 2006
Notwithstanding our disclaimer of an opinion on the financial statements, in our opinion the information
given in the Directors’ Report for the financial year for which the Group financial statements are prepared is
consistent with the Group financial statements.

Matters on which we are required to report by exception
Arising from the limitation of our work referred to above:

we have not obtained all the information and explanations that we considered necessary for the

purpose of our audit; and

we were unable to determine whether adequate accounting records have been kept.

21 | Page

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

certain disclosures of Directors’ remuneration specified by law are not made.

Other matters
We have reported separately on the parent Company financial statements of PowerHouse Energy Group plc
for the year ended 31 December 2012. The opinion in that report is unqualified.

Simon Manning (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Leeds, United Kingdom
28 June 2013

22 | Page

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Revenue
Cost of sales

Gross profit/(loss)

Administrative expenses

Operating loss

Finance income
Loan waivers
(Loss of control) / Fair value gain on step acquisition
Equity accounted loss
Finance expenses
Impairment of non-current assets

Loss before taxation

Income tax credit

Loss after taxation

Foreign exchange arising on consolidation
Foreign exchange included in profit and loss arising from loss
of control

Note

Year ended
31 December
2012
US$

Year ended
31 December

2011
US$

19,756
-

62,379
(73,416)

19,756

(11,037)

(594,520)

(7,790,179)

1.2
1.2
4

(574,764)

(7,801,216)

4
352,322
(1,309,296)
(475,646)
(210,272)
-

848
-
6,209,876
-
(310,231)
(33,387,720)

(2,217,652)

(35,288,443)

10,942

3,028,883

(2,206,710)

(32,259,560)

(36,462)

(3,621,791)

1,095,440

Total comprehensive expense

(1,147,732)

(35,881,351)

Total comprehensive expense attributable to:
Owners of the Company
Non-controlling interests

(592,078)
(555,654)

(13,588,143)
(22,293,208)

Loss per share (US$)

<(0.01)

(0.05)

The notes numbered 1 to 16 are an integral part of the financial information.

23 | Page

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Shares and
stock
US$

Accumulated
losses
US$

Other
reserves
US$

Non-control-
ling interests

US$

6,218,365

(5,516,668)

-
2,019,736

(64,780,459)

-
-

Total
US$

701,697

10,199,941

(1,521,802)

206,250
2,019,736

-
-
-

-
23,951,661
-

167,492
23,951,661
188

-
-

-
-
-

Balance at 31 January 2011
Transactions with equity
participants:
- Issue of common stock
- Costs related to issue of

10,199,941

common stock

(1,521,802)

- Common stock issued for

services received

- Equity issued for acquisition
- Equity reclassification arising

from reverse takeover
- Shares issued for services

received

- Acquisition of Pyromex
- Exercise of warrants

206,250
-

64,780,459

167,492
-
188

Total comprehensive income:
- Loss after taxation
- Foreign exchange arising on

consolidation

Balance at 31 December
2011

Transactions with equity
participants:
- Shares issued to settle

liabilities

- Exercise of warrants
- Pyromex, loss of control

Total comprehensive income:
- Loss after taxation
- Foreign exchange included in
profit and loss arising from
loss of control

- Foreign exchange arising on

consolidation

Balance at 31 December
2012

(12,574,238)

(19,685,322)

(32,259,560)

(1,020,946)

(2,600,845)

(3,621,791)

80,050,893

(18,090,906) (63,781,669) 1,665,494

(156,188)

43,850
67,876
-

-
-
-

(1,606,239)

-
-
-

-
-
(1,109,840)

43,850
67,876
(1,109,840)

(600,471)

(2,206,710)

1,095,440

(81,279)

44,817

(36,462)

80,162,619

(19,697,145) (62,767,508)

(2,302,034)

The notes numbered 1 to 16 are an integral part of the financial information.

24 | Page

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS
Non-current assets
Intangible assets
Property, plant and equipment

Total non-current assets

Current Assets
Inventories
Trade and other receivables
Cash and cash equivalents

Total current assets

Total assets

LIABILITIES
Non-current liabilities
Deferred taxation
Loans
Trade and other payables

Total non-current liabilities

Current liabilities
Loans
Trade and other payables

Total current liabilities

Total liabilities

Net liabilities

EQUITY
Shares and stocks
Other Reserves
Accumulated losses
Non-controlling interests

Total deficit

Note

31
December
2012
US$

31
December
2011
US$

7
8

9
10
11

12
13
14

-
957

957

2,062,838
1,825,636

3,888,474

-
3,790
11,492

15,282

637,601
278,384
382,455

1,298,440

16,239

5,186,914

-
(313,399)
-

(372,277)
(376,973)
(777,000)

(313,399)

(1,526,250)

13
14

(401,400)
(1,603,474)

(57,996)
(3,758,856)

(2,004,874)

(3,816,852)

(2,318,273)

(5,343,102)

(2,302,034)

(156,188)

80,162,619
(62,767,508)
(19,697,145)
-

80,050,893
(63,781,669)
(18,090,906)
1,665,494

(2,302,034)

(156,188)

The financial statements were approved by the board of Directors and authorised for issue on 28 June 2012
and signed on its behalf by:

Keith Allaun
Director

The notes numbered 1 to 16 are an integral part of the financial information.

25 | Page

CONSOLIDATED STATEMENT OF CASH FLOWS

(Loss of control) / Fair value gain on step acquisition

Cash flows from operating activities
Loss before taxation
Adjustments for:
- Finance income
- Finance costs
-
- Equity accounted loss
- Loan waivers
-
- Depreciation and amortisation
- Common stock and shares issued for services
- Foreign exchange revaluations
Changes in working capital:
- Decrease/ (Increase) in trade and other receivables
-
(Decrease)/ Increase in trade and other payables
- Taxation paid

Impairment of non-current assets

Note

Year ended
31 December
2012
US$

Year ended
31 December

2011
US$

(2,217,652)

(35,288,443)

(4)
210,272
1,309,296
475,646
(352,322)
-
124,049
-
(99,327)

(11,761)
138,028
(6,209,876)

-
-
33,387,720
1,824,241
373,742
140,581

226,580
(569,617)
(800)

(178,542)
1,588,261
(800)

Net cash used in operations

(893,876)

(4,053,733)

Cash flows from investing activities
Purchase of other non-current assets
Disposal (purchase) of tangible and intangible assets
Loss of control / reverse acquisition

-
2,846
(11,010)

(85,000)
(494,429)
(949,660)

1.2

Net cash flows used in investing activities

(8,164)

(1,529,089)

Cash flows from financing activities
Common stock issue (net of issue costs)
Finance income
Finance costs
Loans received/(repaid)

111,726
4
(210,272)
627,197

8,678,326
848
(310,231)
(2,596,592)

Net cash flows from financing activities

528,655

5,772,351

Net (decrease)/increase in cash and cash equivalents

(373,385)

210,950

Cash and cash equivalents at beginning of period
Foreign exchange on cash balances

382,445
2,432

197,170
(4,244)

Cash and cash equivalents at end of period

11,492

382,455

The notes numbered 1 to 16 are an integral part of the financial information.

26 | Page

NOTES TO THE CONSOLIDATED ACCOUNTS

1. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to the Group financial information.

1.1. Basis of preparation
This consolidated financial information is for the year ended 31 December 2012 and has been prepared in
accordance with International Financial Reporting Standards (“IFRS”) adopted for use by the European
Union and the Companies Act 2006. These accounting policies and methods of computation are consistent
with those used in prior years.

1.2.

Consolidation and goodwill

Reverse takeover
On 29 June 2012, PowerHouse Energy Group plc acquired 100 per cent of the common stock holding of
PowerHouse Energy, Inc. by issuing 273,766,453 PowerHouse Energy Group plc shares to the common
stockholders of PowerHouse Energy, Inc. (“the Reverse Takeover”).

The Reverse Takeover has been treated as a reverse acquisition under IFRS3 (2008) “Business
combinations” whereby PowerHouse Energy, Inc. has been treated as the acquirer PowerHouse Energy
Group plc.

A reverse takeover reserve (included with other reserves) has been created to account for the fair value of
the consideration for the reverse acquisition and to account for the change in the equity structure from that
of PowerHouse Energy, Inc. to that of the legal holding Company, PowerHouse Energy Group plc.

Pyromex loss of control
On 8 May 2012, the Company’s option to acquire the remaining 70% interest in Pyromex lapsed. Due to the
expiry of the option, Pyromex is no longer accounted for as a subsidiary of the Group. These results show
the impact of the “loss of control” of Pyromex.

Intangible assets
Property, plant and equipment
Inventory
Trade and other receivables
Cash
Trade and other payables
Intercompany payables
Deferred taxation

Net assets disposed

Attributable to:
- Non-controlling interests – 70%
- Owners of the Company – 30%, recognised as investment in
associate

Investment in associate consists of:
- Initial amount recognised after loss of control
- Equity accounted losses

US$

2,005,446
1,869,044
656,418
55,642
11,010
(2,424,114)
(216,524)
(371,437)

1,585,485

1,109,839
475,646

475,646
(475,646)

27 | Page

Judgements and estimates

1.3.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts in the financial
statements. The areas involving a higher degree of judgements or complexity, or areas where assumptions
or estimates are significant to the financial statements such as the impairment of assets and going concern
are disclosed with the notes

1.4.
The financial information is presented in US dollars which is the Group’s functional currency.

Foreign currency translation

1.4.1. Transactions and balances in foreign currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are
revalued to the exchange at date of settlement or at reporting dates (as appropriate). Exchange gains and
losses resulting from such revaluations are recognised in the Statement of Comprehensive Income.

Foreign exchange gains and losses are presented in the income statement within ‘administration expenses’.

1.4.2. Consolidation
The results and financial position of Group entities with a different functional currency to the presentation
currency are translated into the presentation currency as follows:

Assets and liabilities are translated at the closing rate of 31 December 2012;

Income and expenses for each income statement are translated at average exchange rates over the
period of consolidation; and
the resulting exchange differences are recognised in other comprehensive income.

The principal rates used for translation are:

British Pounds

2012
Closing

2012
Average

1.613

1.585

1.5. Going concern
The Directors have considered all available information about the future events when considering going
concern. The Directors have reviewed cash flow forecasts for twelve months following the date of these
accounts. The cash flow forecast assumes no further funding of PowerHouse Energy, Inc. and Pyromex by
the Company and a favourable settlement outcome to RenewMe liability (see note 9) and the Aspermont
loan (see note 10).

1.6. Revenue
Revenue represents the amounts (excluding sales tax) derived from sales of power generation plus
associated services.

Revenue from the sale of goods is recognised when the risk and rewards associated with the goods has
been transferred to the purchaser. Revenue from services is recognised over the period of performance of
the services.

Employee costs

1.7.
The Group only has defined contribution plans and the Group pays contributions to separately administered
pension or healthcare insurance entity on a contractual basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as employee benefit expense when
they are due.

28 | Page

1.8. Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Operating lease rentals are charged to the income statement on a straight line
basis over the period of the lease. The Group has no finance leases.

Finance income and expenses

1.9.
Finance income and expenses are recognised as they are incurred or as a result of financial assets or
liabilities being measured at amortised cost using the effective interest method. No finance expenses were
incurred in the production of a qualifying asset.

1.10. Income tax expense
The tax expense for the period comprises current and deferred tax.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the balance sheet date in the countries where the Group operates. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to
the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in these financial statements.

1.11. Goodwill
Goodwill arose on the Reverse listing and the acquisition of Pyromex and represents the excess of the
consideration transferred over the in net fair value of the net identifiable assets, liabilities and contingent
liabilities acquired. Goodwill is stated at cost less any impairment losses recognised.

1.12. Intangible assets
Intangible assets arose on the acquisition of Pyromex and include trademarks and intellectual property
related to the Pyromex technology. These were recognised at fair value at the acquisition date and are
carried at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-
line method to allocate the fair value of the intangible assets over their estimated useful lives of 3 years.

1.13. Plant, property and equipment
Plant, property and equipment are stated at cost less accumulated depreciation. Cost represents the cost of
acquisition or construction, including the direct cost of financing the acquisition or construction until the
asset comes into use.

Depreciation on plant, property and equipment is provided to allocate the cost less the residual value by
equal instalments over their estimated useful economic lives of 3 to 7 years.

An item of plant, property and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss is included in the
Statement of Comprehensive Income.

1.14. Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of finished goods and work in
progress comprises design costs, raw materials, direct labour, other direct costs and related production
overheads. It excludes borrowing costs.

1.15. Trade and other receivables
Trade receivables are recognised at fair value. Subsequently they are carried at their initial recognition value
less any impairment losses.

1.16. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.

29 | Page

1.17. Deferred taxation
Deferred tax is recognised without discounting, in respect of all timing differences between the treatment of
certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet
date except as otherwise required by IAS 12.

A deferred tax asset is recognised where, having regard to all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the future reversal of the underlying
timing differences can be deducted.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in these financial statements.

Deferred tax assets or liabilities are not recognised if they arise from the initial recognition of goodwill or
from initial recognition of an asset or liability that at the time of the transaction affects neither accounting
nor taxable profit nor loss. Except, however, where an asset or a liability is initially recognised from a
business combination a deferred tax asset or liability is recognised as appropriate.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively
enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.

1.18. Loans
Loans are financial obligations arising from funding received from financiers and the founding stockholders.
These were recognised at fair value, net of any transaction costs incurred. Loans are subsequently carried at
amortised cost using the effective interest method.

1.19. Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers. Trade payables and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.

1.20. Common stock, share capital and share premium
Proceeds from the issue of common stock or ordinary and deferred shares have been classified as equity.
Costs directly attributable to the issue of these equity instruments are shown as a deduction, net of tax,
from the proceeds.

1.21. Share based payments
The Group has used share-based compensation, whereby the Group receives services from employees or
service providers in exchange for consideration for options in the share capital or shares of the Group. The
fair value of the services received in exchange for the grant of the options is recognised as an expense. The
total amount to be expensed is determined by reference to the fair value of the services received, unless
that fair value cannot be reliably measured, in which case the fair value of the of the stock and shares issued
is used.

Non-market performance and service conditions are included in assumptions about the number of options
that are expected to vest. The total expense is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied.

30 | Page

1.22. Adoption of new and revised standards
There have been no standards or interpretations that have been adopted that have affected the amounts
reported in these financial statements. As at the date of approval of the financial information, the following
standards and interpretations were in issue but not yet effective:

IFRS 1 (amended)
IFRS 7 (amended)
IFRS 9
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IAS 1 (amended)
IAS 12 (amended)
IAS 19 (revised)
IAS 27 (revised)
IAS 28 (revised)
IAS 32 (amended)

Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters
Disclosures – Transfers of Financial Assets
Financial Instruments
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
Presentation of Items of Other Comprehensive Income
Deferred Tax: Recovery of Underlying Assets
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
Offsetting Financial Assets and Financial Liabilities

In addition, there are certain requirements of Improvements to IFRSs which are not yet effective.

The Directors do not anticipate that the adoption of these standards and interpretations in future reporting
periods will have a material impact on the Group’s results.

2. Administrative expenses

Employee expenses
Depreciation and amortisation
Professional fees

2012
US$

2011
US$

(577,628)
124,049
169,375

1,429,608
1,824,241
174,853

Included in employee expenses are the release of the obligation to pay accrued wages as part of the
agreements reached with various employees. At 31 December 2012, the Group had no employees.

3. Employee benefits

Wages and salaries
Employer’s taxes and social security costs
Pension costs
Healthcare and other

Total employee benefits

2012
US$

2011
US$

(598,462)
24,075
12,849
3,910

1,078,322
264,054
11,153
76,079

(577,628)

1,429,608

31 | Page

4. Finance expenses

Credal Trust Management
Preference stock dividends
Citi bank business loan
Management loans
Other
Hillgrove Investments Pty Limited
Aspermont

Total finance expenses

5. Income tax credit

Current taxation
Deferred taxation

Total taxation credit

6. Loss per share

2012
US$

-
-
2,476
2,437
3,841
10,482
191,036

2011
US$

242,275
41,250
4,140
14,541
8,025
-
-

210,272

310,231

2012
US$

2011
US$

(800)
11,742

(800)
3,029,683

10,942

3,028,883

2012

2011

Loss after taxation–attributable to owners of the Company (US$)

(592,078)

(12,581,950)

Weighted average number of shares

285,085,135

245,331,092

Loss per share (US$)

<(0.01)

(0.05)

As the Group incurred a loss, potential ordinary shares are anti-dilutive and accordingly no diluted earnings
per share has been presented.

32 | Page

7. Intangible assets

At 1 January 2011

Cost
Accumulated amortisation

Opening carrying value

- Pyromex acquisition
- Reverse acquisition
- Purchases
- Amortisation
-
Impairments
- Foreign exchange fluctuations
- Closing carrying value

At 31 December 2011

Goodwill

Pyromex
technology

Licence
agreements

Total

-
-
-

-
-

500,000
(45,833)
454,167

-
4,035,356
-

(4,035,356)

30,389,655
-
1,961
(1,448,642)
(23,537,175)
(3,342,961)
2,062,838

30,389,655
-
4,035,356
-
492,801
490,840
(344,652)
(1,793,294)
(600,355) (28,172,886)
(3,342,961)
2,062,838

Cost
Accumulated amortisation and impairment

4,035,356
(4,035,356)

27,931,414
(25,868,576)

990,840
(990,840)

32,957,610
(30,894,772)

Net carrying value

Amortisation
Pyromex loss of control
Foreign exchange fluctuations

Closing carrying value
At 31 December 2011

Cost
Accumulated amortisation and impairment

-
-
-
-

2,062,838

(117,421)
(2,005,446)
60,029
-

-
-
-
-

2,062,838

(117,421)
(2,005,446)
60,029

4,035,356
(4,035,356)

-
-

990,840
(990,840)

5,026,196
(5,026,196)

Goodwill was recognised as the excess of the fair value of the consideration determined in accordance with
IFRS 3 accounting for reverse acquisitions over the fair value of the net liabilities acquired.

Due to the impairment of the Group’s primary intangible asset, the Pyromex technology, the entire amount
of goodwill recognised from the reverse acquisition has been impaired.

Licence agreements represent the capitalised licence fees paid by PowerHouse Energy, Inc. to Pyromex and
RenewMe for rights associated with the Pyromex technology.

33 | Page

8. Property, plant and equipment

At 1 January 2011

Cost
Accumulated amortisation

Opening carrying value

-
- Pyromex acquisition
Reverse acquisition
Purchases
- Disposals
- Depreciation
Impairments
-
- Foreign exchange fluctuations
- Closing carrying value

At 31 December 2012

Cost
Accumulated amortisation

Net carrying value

Depreciation
Pyromex loss of control
Disposals
Foreign exchange fluctuations

Pyromex
equipment

Energy service
equipment

Office
equipment

Total

-
-
-

7,840,150
-
-
-
-
(5,160,586)
(890,288)
1,789,276

6,949,862
(5,160,586)
1,789,276

-
(1,842,079)
-
52,803
-

531,257
(489,998)
41,259

-
-
-
(19,249)
(22,010)

-
-

-
-
-

-
-
-
-
-

2,721
(1,227)
1,494

43,156
3,453
1,629
-
(8,937)

(4,435)
36,360

533,979
(491,225)
42,753

7,883,306
3,453
1,629
(19,249)
(30,947)
(5,160,586)
(894,723)
1,825,636

45,926
(9,566)
36,360

6,995,788
(5,170,152)
1,825,636

(6,628)
(26,965)
(2,767)
957
957

(6,628)
(1,869,044)
(2,767)
53,761
957

9. Inventories
Inventories consist solely of work in progress. No expense for the cost of inventories sold has been
recognised (2011: nil). There were no write downs or reversal of write downs in the current or prior period.

10. Trade and other receivables

Other receivables
Prepayments
VAT receivable

2012
US$

-
-
3,790

2011
US$

69,235
54,693
154,456

Total trade and other receivables

3,790

278,384

11. Cash and cash equivalents

Cash and cash equivalents consist solely of cash balances in bank accounts.

34 | Page

12. Deferred taxation

- At 1 January 2011

- Pyromex acquisition
- Credit to Statement of Comprehensive Income
- Foreign exchange fluctuations
-

At 31 December 2011
Credit to Statement of Comprehensive Income
Foreign exchange fluctuations
Pyromex loss of control

US$

3,822,980
(3,029,683)
(421,020)

372,277
(11,742)
10,902
(371,437)
-

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of
the related tax benefit through future taxable profits is probable. The Group did not recognise deferred
income tax assets in respect of losses.

13. Loans

Accrued dividends on preferred stock
Management loans
Citibank business loan
Aspermont loan
Hillgrove Investments Pty Limited

Total loans

Classified as:

- Current
- Non-current

Notes

13.1
13.2
13.3
13.4
13.5

2012
US$

33,000
-
26,913
341,487
313,399

2011
US$

33,000
349,885
52,084
-
-

714,799

434,969

401,400
313,399

57,996
376,973

13.1. Preferred stock
The accrued dividends on the preferred stock became due on 31 March 2012. The preferred stock holders
exchanged their stock holding in PowerHouse Energy, Inc. for shares in PowerHouse Energy Group plc.

13.2. Management loans
Loans from management were waived as part of the settlement agreement entered into with employees.

13.3. Citibank business loan
Loan from Citibank incurs interest at the prime rate as published by The Wall Street Journal plus 3% and is
repayable in equal monthly installments on $2,083.

13.4. Aspermont loan
The Aspermont loans consist of Aspermont Ltd, Dilato Holdings Pty Ltd and Tesla Nominees Pty Ltd. These
parties collectively provided a facility of £100,000 to the Group repayable by 18 May 2012, which incurs
interest at a default rate of 7 per cent. per month. The Group is currently in productive negotiations to revise
the terms of the loan.

13.5. Hillgrove Loan
Hillgrove Investments Pty Limited (“Hillgrove”) has provided the PowerHouse Energy Group plc with a
convertible loan agreement amounting to $707,000 – which can be increased at Hillgrove’s option. The loan
is unsecured, repayable on 8 October 2014 and carries interest of 15 per cent. per annum. Hillgrove has the
option at any time to convert the loan in part or whole at a conversion price of 1p per share. Hillgrove have
provided a letter of support indicating they are willing to increase the loan amount pending any
unforeseeable or material changes to the Group’s current circumstances.

35 | Page

14. Trade and other payables

Trade creditors
Salary and wage accruals
RenewMe
Customer deposits
Other accruals

2012
US$

2011
US$

227,104
-
1,036,000
150,000
190,370

856,924
1,445,926
1,036,000
939,236
257,770

Total trade and other payables

1,603,474

4,535,856

Classified as:
- Current
- Non-current

1,603,474
-

3,758,856
777,000

14.1. RenewMe
RenewMe Limited had been granted exclusive rights by Pyromex to use, own, assemble and install and
operate Pyromex systems in territories also licensed to the Company’s subsidiary PowerHouse Energy, Inc.
The Company entered into a settlement agreement with RenewMe whereby the parties agreed to change
the respective exclusive rights pertaining to the Pyromex technology. Under the original settlement
agreement Powerhouse Energy, Inc. had the obligation to pay five instalments of Euro 200,000 annually
beginning 30 June 2011. The Company guaranteed the obligations under the agreement of PowerHouse
Energy, Inc. As PowerHouse Energy, Inc is unable to meets its obligations, all remaining amounts (Euro
800,000) due under the original settlement agreement have been recognised as a liability. The Directors are
currently in negotiations with RenewMe to enter into a new settlement agreement, which they anticipate will
reduce the financial burden to the Company.

15. Seasonality
The Group’s business is not subject to any consistent seasonal fluctuations.

16. Post balance sheet events and contingent liabilities
On 28 June 2013 Hillgrove Investments Pty Limited, provided a letter of intent indicating that pursuant to
the terms of the convertible loan agreement (see note 10) which allows for an increase of the amount
loaned at Hillgrove’s sole discretion, to continue to provide adequate financial support to the Company to
ensure the Company may meet its obligations as they fall due and to ensure it operates as a going concern
for a period of at least twelve months from the date of the letter pending any unforeseeable or material
changes to the Company’s current circumstances.

Additionally, Hillgrove extended the repayment date of the note from its originally scheduled repayment date
of 17 June 2014 to 8 October 2014.

36 | Page

NOTICE TO THE ANNUAL GENERAL MEETING

Notice is given that the annual general meeting of the members of the Company will be held at 10.00 a.m.
on 6 September 2013 at the offices of Sanlam Securities UK Limited at 10 King William Street, London, EC4N
7TW. The meeting will consider and, if thought fit, pass the following resolutions:

Ordinary business
The following resolutions will be proposed as ordinary resolutions:

1. That the Accounts and the Reports of the Directors and of the Auditors for the year ended 31

December 2012 be received.

2. That Brent Fitzpatrick, who is retiring by rotation, be reappointed as a Director.

3. That Deloitte LLP be appointed as auditor of the Company from the conclusion of this meeting until
the conclusion of the next Annual General Meeting at which accounts are laid and that the Board of
Directors be authorised to set the level of their remuneration for the ensuing year.

Special business

The following resolution will be proposed as an ordinary resolution:

4. That, in accordance with section 551 CA 2006, the Directors are generally and unconditionally
authorised, and in substitution for any previous authority, to allot the equity securities, as defined in
section 560 CA 2006, up to an aggregate nominal amount of £450,000, such authority, unless
previously revoked or varied by the Company in general meeting, to expire on 5 September 2014 or,
if earlier, the date of the Company's next annual general meeting, except that the Directors may
allot relevant securities pursuant to an offer or agreement made before the expiry of the authority.

The following resolution will be proposed as a special resolution:

5. That, subject to the passing of Resolution 5, under section 570 CA 2006, the Directors are
authorised, in substitution for any previous authority, to allot equity securities, as defined in section
560 CA 2006, wholly for cash for the period commencing on the date of this resolution and expiring
on 5 September 2014 or, if earlier, the date of the Company's next annual general meeting, as if
section 561 CA 2006 did not apply to such allotment, except that the Directors may allot relevant
securities following an offer or agreement made before the expiry of the authority and provided that
the authority is limited to:

the allotment of equity securities in connection with a rights issue in favour of ordinary
shareholders where their holdings are proportionate, as nearly as possible, to the respective
number of ordinary shares held, or deemed to be held, by them, but subject to any
exclusions or arrangements the Directors think necessary or expedient for the purpose of
dealing with fractional entitlements or legal or practical problems under the laws of any
territory or the requirements of any recognised regulatory body or stock exchange in any
territory; and

the allotment of equity securities, otherwise than in accordance with paragraph 6(a), up to a
maximum nominal value of £450,000.

Serious loss of capital

To consider whether any, and if so what, steps should be taken to address the serious loss of capital within the
Company, pursuant to section 656(1) of the Companies Act 2006.

By order of the Board

Keith Allaun

PowerHouse Energy Group plc

Registered in England and Wales No. 3934451

Registered Office:

16 Great Queen Street

London

WC2B 5DG

37 | Page

Notes to the notice of AGM

Form of proxy

A form of proxy with proxy notes has been included with these accounts.

Total voting rights

2.
As at noon on today’s date, the Company’s issued share capital comprised 286,534,426 ordinary
shares of 1p each, 17,373,523 deferred shares of 4.5p each and 9,737,353 deferred shares of 4p each. Each
ordinary share carries the right to one vote at a general meeting of the Company and the deferred shares
carry no voting rights. Therefore, the total number of voting rights in the Company as at noon on today’s
date is 284,514,426.

Communication

Members who have general queries about voting by proxy should contact the Company’s registrar,

3.
Neville Registrars Limited at Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA.

38 | Page

NOTICE OF AVAILABILITY

The Notice of Annual General Meeting to which this Proxy Form relates and the Report and Accounts are available on the Company’s website at www.powerhouseenergy.net

NOTES TO THE PROXY FORM
1

As a member of the company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the
procedures set out in these notes.
Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will
automatically be terminated.
A proxy does not need to be a member of the company but must attend the meeting to represent you. To appoint as your proxy a person other than the chairman of the meeting, insert their full name in
the box. If you sign and return this proxy form with no name inserted in the box, the chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the
chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish your proxy to make any comments on your behalf, you will need to appoint
someone other than the chairman and give them the relevant instructions directly.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to diﬀerent shares. You may not appoint more than one proxy to exercise rights attached to any one
share. To appoint more than one proxy, you must complete a separate proxy form for each proxy and specify against the proxy's name the number of shares over which the proxy has rights. If you are in
any doubt as to the procedure to be followed for the purpose of appointing more than one proxy you must contact the Company's registrars, Neville Registrars Limited at Neville House, 18 Laurel Lane,
Halesowen, West Midlands, B63 3DA. If you fail to specify the number of shares to which each proxy relates, or specify a number of shares greater than that held by you on the record date, proxy
appointments will be invalid.
To direct your proxy how to vote on the resolutions mark the approximate box with an “X”. If no voting indication is given, your proxy will vote or abstain from voting at his discretion. Your proxy will vote
(or abstain from voting) as he thinks ﬁt in relation to any other matter which is put before the meeting.
To appoint a proxy using this form, the form must be: completed and signed; sent or delivered to the Company's registrars, Neville Registrars Limited at Neville House, 18 Laurel Lane, Halesowen, West
Midlands, B63 3DA and received by the Company's registrars no later than 10.00 a.m. on 4 September 2013.
In the case of a member which is a company, this proxy form must be executed under its common seal or signed on its behalf by an oﬃcer of the company or an attorney 7 for the company.
Any power of attorney or any other authority under which this proxy form is signed (or a duly certiﬁed copy of such power or authority) must be included with the proxy form.
In the case of joint holders of shares, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder (being the ﬁrst named holder in
respect of the shares in the company's register of members) will be accepted.
CREST members who wish to appoint a proxy or proxies by using the CREST electronic appointment service may do so by using the procedures described in the CREST Manual. To be valid, the appropriate
CREST message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instructions given to a previously appointed proxy, must be transmitted so as to be received by
our agent (ID: 7RA11) by 10.00 a.m. on 4 September 2013. See the notes to the notice of meeting for further information on proxy appointment through CREST.
All shareholders who wish to attend and vote at the meeting must be entered on the Company's register of members no later than 48 hours before the time ﬁxed for the meeting. Changes to entries on the
relevant register of securities after that time will be disregarded in determining the rights of any person to attend or vote at the meeting.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting.
Please complete and return to: Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA.

7
8
9

12
13
14

If you prefer, you may return the Form of Proxy to the Registrar in an envelope addressed to FREEPOST BM 3865, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, B63 3DA

Powerhouse Energy Group PLC
(Incorporated and Registered in England and Wales under the Companies Act 1985 with Registered Number 3934451)

FORM OF PROXY

I/We .............................................................................................................................. being (a) member(s) of the Company and entitled to vote at the Annual General
Meeting, hereby appoint
(Please only complete if appointing someone other than the Chairman of the meeting)

or failing him/her, the Chairman of the Meeting as my/our proxy, to attend, speak and vote for me/us and on my/our behalf at the Annual General Meeting
of the Company, to be held on 6 September 2013 at Sanlam Securities UK Limited, 10 King William Street , London, EC4N 7TW at 10:00 a.m. and at any
adjournment thereof.

T
S
N
A
G
A

R
O
F

D
L
E
H
H
T
I
W

Resolutions (*Special Resolution)

To receive the Accounts and the Reports of the Directors and of
the Auditors for the year ended 31 December 2012

To reappoint Brent Fitzpatrick as a Director

To reappoint Deloitte LLP as auditor of the Company

To authorise the Directors to allot equity securities under section
551 CA 2006

5* To authorise the Directors to allot equity securities under section

570 CA 2006

Mark this box with an "X" if you are appointing more than one proxy :

Signed

Leave blank to authorise your proxy to act in relation to your full entitlement or
enter the number of shares in relation to which your proxy is authorised to vote :

Date:

D D

M M

Y Y

>123-0

(cid:1)>(cid:3)(cid:4)(cid:5)|(cid:7)

Powerhouse Energy Group PLC
Attendance Card

(cid:7) Name

3
2
1
>

|
(cid:5)
(cid:4)
(cid:3)
>
(cid:1)

Address 1
Address 2
Address 3
Address 4
Address 5
Address 6

The Annual General Meeting will start at
10:00 a.m. and
is being held on 6
September 2013 at Sanlam Securities UK
Limited, 10 King William Street , London,
EC4N 7TW.
If you plan to attend the Annual General
Meeting please bring this card with you
to ensure you gain admission as quickly
as possible.
Please present this card at a registration
desk. It will be used to show that you have
the right to attend and speak at the
meeting and participate in any poll.

Business Reply Plus
Licence Number
RSTY-SAKX-RZSL

Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
B63 3DA