Atlantis Resources Limited
Annual Report 2015
ONSHORE CONTROL CENTRE BUILDING COMPLETED AT NESS OF QUOYS, CAITHNESS
ALL DIRECTIONAL DRILLING COMPLETED AT THE ONSHORE SITE
STEEL FOUNDATIONS UNDER
CONSTRUCTION
AT NIGG, SCOTLAND
TURBINE HUB ASSEMBLED READY FOR
FITTING OF BLADES
TURBINE NACELLE MODULES ARE BOLTED TOGETHER READY FOR TESTING
TURBINE ASSEMBLY AND TESTING IS UNDERWAY AT THE OFFSHORE RENEWABLE
ENERGY CENTRE IN NORTHUMBERLAND
ALL OFFSHORE CABLE LAYING COMPLETED READY FOR POWER EXPORT
CONTENTS
Chairman’s Statement
Chief Executive Officer’s Statement
Corporate Governance Report
Board of Directors
Directors’ Statement
Audit Committee Report
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
Page
2
3
5
9
11
13
Directors’ Remuneration Report
Independent Auditors’ Report
Financial Statements
Notes to the Financial Statements
Company Information
Page
15
18
19
25
63
01
CHAIRMAN’S STATEMENT
UPDATE
2015 has been another year of firsts for the Atlantis Group and for the tidal industry
as a whole and we have seen this continue during the first months of 2016.
January 2015 marked the commencement of construction on our flagship MeyGen
project, for which we were successful in securing funding in 2014. This is the first
6MW phase in developing a site with the potential for almost 400MW of capacity –
enough to power an estimated 175,000 homes with predictable and emissions free
generation.
The initial construction works focused on MeyGen’s onshore site, close to John
o’ Groats in north eastern Scotland. From this site our team of contractors drilled a
set of four bores, each approximately half a kilometre in length, which pass under the
rocky coastline and emerge on the seabed. This paved the way for the first part of the
offshore construction works in September 2015, when four cables (with an aggregate
length of some 11 kilometres) were laid through these bore holes and along the
seabed to the turbine locations. Each of the four turbines will be connected to one of
the cables which will allow for the electricity generated to be exported to shore for connection into the distribution grid.
This connection will happen in the onshore control centre, construction of which is also close to completion.
We are now working hard with our team of contractors to prepare for installation of the remaining offshore project
infrastructure later this year. In northern Scotland fabrication continues apace on the huge steel foundation structures
and the two hundred tonne ballast blocks which together will hold the turbines in position on the seabed. Just south of
the border the Atlantis turbine is being readied for its onshore testing programme, whilst the first turbine from Andritz
Hydro Hammerfest nears completion at the Andritz factory in Germany.
We are always looking ahead to our next challenge, and it was with future project development in mind that we
announced in December 2015 our agreement with ScottishPower Renewables (UK) Limited (“SPR”) to bring the Sound
of Islay and Ness of Duncansby projects into our portfolio and to welcome SPR as our fellow shareholder in our Scottish
project vehicle, Tidal Power Scotland Limited (“TPSL”), which also owns the majority of MeyGen. Earlier this year we
announced that we had reached agreement with DEME Concessions NV, part of the giant DEME offshore construction
group, to sell a further minority stake in TPSL, thus gaining an important strategic shareholder, subject to achieving various
conditions and securing the necessary consents. As I write we are continuing to work hard in order to achieve those
conditions. We’ve also entered into an exciting partnership agreement with Equitix Limited in respect of future financing
of our Scottish project pipeline.
Due to its strong governance framework that aims to follow the principles embedded in the QCA Guidelines, Atlantis is
able to run its operations in a fair, transparent and sustainable way for the benefit of its shareholders, employees and the
general community as a whole. We are now on the cusp of realising our ambition of providing sustainable and predictable
green energy on a commercial scale, and when I write my statement this time next year I expect MeyGen Phase 1A to be
generating electricity for distribution to the Scottish grid.
Finally I would like to take this opportunity to thank the Atlantis staff and my fellow directors for all of their hard work in
delivering on our objectives, and to thank our shareholders and other key stakeholders whose continuing support we very
much appreciate.
ANNUAL GENERAL MEETING
Our Annual General Meeting will be held on 30 June 2016 and the notice of meeting accompanies this annual report. I
look forward to this opportunity to meet our shareholders and to discuss our performance and the opportunities which
lie ahead.
John Mitchell Neill
Chairman
26 May 2016
02
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
CHIEF EXECUTIVE OFFICER’S STATEMENT
PROFILE
Atlantis Resources Limited, a global leader in the tidal power sector, is focused on two
core business areas – the development of projects and the supply of turbines and
associated equipment, both to third parties and to our own projects. Following the
acquisition of the Marine Current Turbines (“MCT“) group in July 2015 we now have
the biggest portfolio of agreements for lease for UK project sites, and we’re actively
looking to build our pipeline in Asia, North America and Australasia. We’re working hard
to ensure we build relationships with the right project partners to help us deliver these
opportunities and replicate our success in bringing Phase 1A of the MeyGen project to
financial close and into construction.
During the first half of 2015, we reached agreement with Siemens AG for the acquisition
of the MCT group, which has long been at the forefront of the tidal sector. We
completed the acquisition in July, gaining a first class team of engineers and project
developers with the knowledge and experience derived from the long term operations
of the 1.2MW SeaGen system in Strangford Lough in Northern Ireland, and boosting
our portfolio of UK development sites by some 50%. In September we announced that
we had teamed up with DP Energy in a joint venture for development of our berth at the Fundy Ocean Research Centre for
Energy (“FORCE”) in Canada, whilst in the UK we completed the first major offshore works at the MeyGen project with the
successful installation of the power export cables.
In October we received confirmation from the European Commission that €17 million of grant funding from the NER300
clean energy scheme could be transferred to the next phase of the MeyGen project, and in December we reached agreement
with SPR for the acquisition of the Sound of Islay project, which has also been awarded €21 million of funding through the
same programme. We’re now working hard to achieve financial close on these two projects, which have grid connection
agreements and consents in place.
The turbine delivery team is preparing for the onshore testing programme for the 1.5MW AR1500 turbine, which will be
one of the four turbines installed at the MeyGen site in the first phase of project roll-out. In parallel, we continue to finalise
the design of the StreamTec foundation system for MeyGen Phase 1B, which we have been developing through our contract
with the Energy Technologies Institute (“ETI”) in pursuit of a shared goal to reduce the cost of energy for the future.
SUMMARY OF RESULTS
Atlantis recorded a profit for the year ended 31 December 2015 of S$4.3 million, an increase of S$20.5 million on the
prior year’s loss. The primary reasons for the increase are the gain resulting from the MCT acquisition and the gain on
disposal of the 50% stake in Atlantis Operations Canada Limited (“AOC”).
Revenue for the year ended 31 December 2015 was approximately S$2.9 million, lower than S$5.3 million last year. Both
were derived predominantly from the provision of consulting services in relation to the contract with ETI, which has the
objective of reducing capital cost for tidal energy projects.
The MCT acquisition resulted in a bargain purchase gain of S$19.3 million reflected in “Other gains”. The bargain purchase
gain arises mainly from the fair valuation of the MCT turbine technology and seabed options, details of which can be
found in Note 13 to the financial statements. The gain arising from the disposal of a 50% stake in AOC to DP Energy
Group and a re-measurement gain on the remaining 50% stake upon the formation of the joint venture partnership is
also included in “Other gains”.
Total expenses for the year were S$25.2 million, an increase from S$19.8 million in the prior year. The higher expense is
mainly due to the impairment of the AR1000 turbine, which is considered obsolete. Higher employee expenses as a result
of the acquisition of MCT and its group of subsidiaries from Siemens AG also contributed to the increase in expenses.
The Group’s assets stand at S$191.6 million, an increase of S$45.0 million from the previous year. This primarily results
from the fair valuation of MCT's assets upon acquisition and the capitalised development costs of Phase 1A of the MeyGen
project. Total liabilities also increased by S$22.3 million from 2014, mainly because of drawdowns of the MeyGen
financing, increased borrowings and provision for decommissioning costs acquired as a result of the MCT acquisition.
Total equity attributable to owners of the Company rose to S$120.7 million as at 31 December 2015 from S$98.0 million
as at 31 December 2014.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
03
CHIEF EXECUTIVE OFFICER’S STATEMENT continued
Net cash used in operating and investing activities was S$55.3 million, an increase of S$19.5 million on the previous year,
again largely driven by the investment in capital items for the MeyGen project. Net cash from financing activities was
S$53.2 million of which S$27.9 million was proceeds from grants, S$16.3 was from borrowings and S$5.5 million was
from issuance of shares. Total cash and cash equivalents as at 31 December 2015 stood at S$25.6 million, compared with
S$29.2 million as at 31 December 2014.
Timothy James Cornelius
Chief Executive Officer
26 May 2016
04
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
CORPORATE GOVERNANCE REPORT
The Company is listed on the Alternative Investment Market of the London Stock Exchange (“AIM”). The Board is
committed to high standards of corporate governance in line with an effective and efficient approach to management
and has continued to comply with the Corporate Governance Guidelines issued by the Quoted Companies Alliance
(the “QCA Code”) where considered relevant and appropriate for a company of its size, nature and stage of development.
This section explains in more detail how we have applied these guidelines.
THE BOARD OF DIRECTORS
Good governance is taken seriously throughout the Company and the Board sets the tone and takes the lead to ensure
that good practice flows throughout. The Board is collectively responsible for the effective oversight and long term success
of the Company. It agrees the strategic direction and governance structure to achieve the long-term success of the
Company and deliver shareholder value. In addition to setting the strategy, the Board takes the lead in areas such as
financial policy and making sure the Company maintains a sound system of internal control. The Board’s full responsibilities
are set out in a formal schedule of matters reserved for the Board.
The Board held seven scheduled meetings during the year and met on other occasions as the need arose. The Board
considers strategy in depth as well as reviewing the strategic objectives of the Company at each of its Board meetings. All
directors receive appropriate and timely information prior to each meeting on the matters to be discussed. A formal agenda
is produced for each meeting, and directors are given a sufficient period of time to review all papers prior to the meetings
taking place.
The Board delegates authority to its committees to carry out certain tasks on its behalf, so that it can operate efficiently
and give an appropriate level of attention and consideration to relevant matters. The composition and role of each
committee is summarised on pages 7 and 8.
The roles of the Chairman and the Chief Executive Officer (“CEO”) are separate with a distinct division of responsibilities.
The Chairman is responsible for maintaining an effective and efficient Board which appropriately focuses on strategy and
governance. The CEO is responsible for proposing strategic focus for Board review and its subsequent implementation.
The Board’s independent oversight is enhanced by the separation of authority which ensures that no one individual on
the Board has unfettered authority. The Board delegates authority to the CEO to manage the day-to-day operations and
implementation of the strategy of the Company. In turn, the CEO delegates a number of his duties to the Company’s
management team.
During 2015, Ian Cobban joined the Board as an independent non-executive director and Rune Nilsen resigned as a
director. In addition, Duncan Black stepped down as the Company’s Chief Financial Officer (“CFO”) but remained on the
Board as a non-executive director.
Following the recent changes, the Board now comprises an independent non-executive Chairman, three independent
non-executive directors, two non-executive directors and the CEO.
The Company’s largest shareholder is a subsidiary of Morgan Stanley and consequently John Woodley, a non-executive
director, of the Company is not considered independent because of his role as a senior adviser to Morgan Stanley. In
addition, Duncan Black, who stood down as the Company’s CFO in September 2015, has remained on the Board as a
non-executive director. As a result of his previous role with the Company, he is deemed to be non-independent. The Board
however, values Duncan’s knowledge and experience and is delighted that he continues to serve as a director. The profiles
of all the directors can be found on pages 9 and 10.
The non-executive directors, both independent and non-independent, contribute a wide range of skills and experience,
forming a strong element within the Board, and they have a key role in constructively challenging strategy and performance
in all areas. Each of the non-executive directors brings individual character and judgement to bear on strategic matters
and the performance of the Company.
The Board may appoint a director as it thinks fit. However, any director appointed by the Board must, in accordance with
the Company’s Constitution, offer themselves for re-election at the first Annual General Meeting (“AGM”) following their
appointment. Accordingly, Ian Cobban, having been appointed by the Board on 3 August 2015, will stand for re-election
at the forthcoming AGM.
In addition, the Company’s Constitution provides that all directors shall be subject to retirement by rotation at each AGM.
Michael Lloyd and Tim Cornelius will therefore be retiring by rotation and offering themselves for re-election at the 2016
AGM.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
05
CORPORATE GOVERNANCE REPORT continued
The Board is satisfied that it maintains an effective and appropriate balance of skills to reflect the Company’s business,
listing and stage of development. The Board is also satisfied that it has suitable levels of experience and independence to
allow the directors to discharge their duties and responsibilities effectively. With regard to those directors who are standing
for re-election at the next AGM, the Board believes that they continue to make effective and important contributions to
the Company’s success and that the Company and its shareholders should support their re-election.
The Board is aware of the other commitments and interests of its directors and effective procedures are in place to deal
with any conflicts of interest which may arise. Any changes to these commitments and interests are reported to the Board
at the earliest opportunity.
The Chairman is responsible for providing leadership for the Board and ensuring its effectiveness in all aspects of its role,
ensuring that directors have sufficient resources available to them to fulfil their statutory duties. The Chairman is responsible
for setting the Board’s agenda and ensuring that adequate time is available to discuss all items on the agenda with a
particular focus on strategic issues. The Chairman promotes a culture of openness and debate by facilitating the effective
contribution of non-executive directors in particular, and by encouraging a constructive relationship between executive
and non-executive directors. Board members are encouraged to openly and constructively challenge proposals made by
executive management.
As well as the support of the Company Secretary, there is a procedure in place for any director to take independent
professional advice at the Company’s expense in the furtherance of their duties, where considered necessary.
Directors’ attendance at Board and committee meetings held during 2015 is provided in the table below:
Board/Committee:
Board
Attended
Audit
Committee
Attended
Remuneration
Committee
Attended
Nomination
Committee
Attended
Technology
Committee
Attended
John Mitchell Neill
Timothy James Cornelius
Duncan Stuart Black(1)
Michael Robert Lloyd
John Anthony Clifford Woodley
Ian Anthony Macdonald
Rune Nilsen(2)
Ian George Cobban(3)
7/7
7/7
7/7
7/7
7/7
7/7
4/4
1/2
–
–
–
–
3/3
3/3
2/2
–
2/2
–
–
2/2
2/2
–
–
–
2/2
–
–
2/2
2/2
–
–
–
–
–
–
2/2
2/2
–
0/1
1/1
(1) Duncan Stuart Black stepped down as CFO on 7 September 2015 and became a non-executive director on 8 September 2015.
(2) Rune Nilsen resigned as director on 3 August 2015.
(3)
Ian Cobban appointed as a director on 3 August 2015.
BOARD COMMITTEES
During 2015, the Board maintained the following four committees to assist the Board by focusing on specialist areas,
which were ultimately accountable to it. These comprised:
•
•
•
•
the Audit Committee;
the Remuneration Committee;
the Nomination Committee; and
the Technology Committee.
These committees operate within a scope and remit defined by specific terms of reference, as determined by the Board.
The committees’ full terms of reference are available on the Company’s website, www.atlantisresourcesltd.com. Each
committee is responsible for reviewing the effectiveness of its own terms of reference and for making recommendations
to the Board for changes when necessary. The CEO is not a member of the Board committees, although he may be invited
to attend meetings and other senior members of management may also be invited to attend. Boardroom Corporate &
Advisory Service Pte Limited is Secretary to the Board and all of the committees.
06
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
CORPORATE GOVERNANCE REPORT continued
AUDIT COMMITTEE
Chairman:
Member:
Ian Anthony Macdonald
John Anthony Clifford Woodley
The chairman of the committee holds a senior management position in a listed financial institution, and the Board is
therefore satisfied that he has recent and relevant financial experience. Following the resignation of Mr Rune Nilsen as a
non-executive Director and a member of the Audit Committee with effect from 3 August 2015, the composition of the
Audit Committee has reduced to two members. The Audit Committee is looking to revert to three members during 2016.
The Audit Committee is required to meet not less than three times a year at appropriate times in the financial reporting
and audit cycle and at other times as necessary to fulfil its responsibilities. The Audit Committee’s role includes assisting
the Board in discharging its responsibilities with regard to monitoring the integrity of financial reporting, overseeing the
relationship with the external auditor, making recommendations to the Board regarding the appointment of the external
auditor, and reviewing the adequacy and effectiveness of the Company’s internal controls and risk management systems.
The ultimate responsibility for reviewing the Company’s key risks, agreeing the actions to mitigate these risks and for
reviewing and approving the audited financial statements and the half-yearly reports remains with the Board.
The Audit Committee met three times during the course of 2015 and has subsequently advised the Board that the audited
financial statements, taken as a whole, are fair, balanced and sufficiently comprehensive to enable shareholders to assess
the Company’s performance, strategy and business model.
The report from the Audit Committee is set out on pages 13 and 14.
REMUNERATION COMMITTEE
Chairman: John Mitchell Neill
Members: Michael Robert Lloyd, John Anthony Clifford Woodley
The Remuneration Committee is required to meet at least twice a year and whenever otherwise necessary to fulfil its
responsibilities. The role of the Remuneration Committee includes responsibility for setting the remuneration policy for
executive directors and the Chairman and recommending and monitoring the level and structure of senior management
remuneration. The objective of any remuneration policy determined by the committee is to attract, retain and motivate
executive management of suitable calibre without paying more than necessary, having regard to the views of shareholders
and stakeholders. The Remuneration Committee also approves targets and awards under performance related pay schemes
and reviews the design of share incentive plans.
The Remuneration Committee met twice during 2015.
The Directors’ Remuneration Report is set out on pages 15 to 17.
NOMINATION COMMITTEE
Chairman: John Mitchell Neill
Members: Michael Robert Lloyd, John Anthony Clifford Woodley
The Nomination Committee is required to meet at least twice a year. The role of the Nomination Committee includes
regularly reviewing the size, structure and composition of the Board and making recommendations to the Board with
regard to any changes that it considers are necessary. The committee is also responsible for identifying potential candidates
to be appointed as directors as the need arises and may engage executive search consultants for this purpose. The
Nomination Committee is responsible for evaluating the balance of skills, knowledge, experience and diversity of the
Board and keeps under review the leadership needs of the Company.
The Nomination Committee met twice during the year and was involved in recommending Ian Cobban’s appointment as
a director. As part of this process, the Company entered into a recruitment agreement with First Flight Non-Executive
Directors Limited, a specialist recruitment and head hunting agency, and also sourced potential candidate recommendations
from across the Company’s professional network.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
07
CORPORATE GOVERNANCE REPORT continued
TECHNOLOGY COMMITTEE
Chairman: Michael Robert Lloyd
Members:
John Anthony Clifford Woodley, Ian George Cobban
The Technology Committee is responsible for monitoring the integrity of the regular internal reporting on the status of
technology development within the Group and for sanctioning the external reporting of key technology milestones. The
committee also keeps under review the adequacy and effectiveness of the Group’s internal engineering, internal
management controls and risk management systems and ensures that core technology is being developed to plan and
within agreed risk parameters. The committee is required to meet at least three times a year. Two committee meetings
were held during the course of the year. A third meeting was not convened as the committee members had covered the
technology topics adequately during the scheduled board meetings.
INTERNAL CONTROLS AND RISK MANAGEMENT
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. It approves
all aspects of the overall risk management framework, including the strategic direction of the business, annual budgets
and business plans, the risk management policy and delegations of authority. There is an agreed risk tolerance which is
reflected in the Group’s strategy and risk management activities are geared towards achieving business plans whilst
safeguarding the Group’s assets.
This system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only
provide reasonable and not absolute assurance against material misstatement, loss and the prevention and detection of
fraud and other irregularities.
The Group’s system of internal control includes an on-going process of identifying, monitoring and managing risks by
executive management, who ensure that adequate systems, processes and controls are in place. Reports are provided by
management to the Audit Committee on internal control and risk management policies, and the Board monitors risk
exposures, risk management activities and the effectiveness of controls.
In addition, the Board carries out a robust assessment of the principal risks facing the Company.
BOARD AND COMMITTEE EVALUATION
An evaluation of the effectiveness and performance of the Board and committees was not carried out during 2015. It is
the Board’s intention that this exercise be conducted during the current financial year following changes made to Board’s
composition in the second half of 2015.
During 2015, all directors attended a workshop on the AIM Rules for Companies and the responsibilities of directors under
those Rules. The workshop also covered the QCA’s Corporate Governance Guidelines.
SHAREHOLDER ENGAGEMENT
The Company is committed to ensuring that there is effective communication with shareholders on matters such as
governance and strategy so that the Board understands the views of large shareholders on these issues and that
shareholders receive a balanced and consistent view of the Company’s performance. Communication is primarily through
the AGM which provides an opportunity for shareholders to meet and ask questions of directors and management. A
range of corporate information is also available to shareholders, investors and the public on the Company’s website
www.atlantisresourcesltd.com. All shareholders will receive a copy of the audited financial statements. The interim reports
are made available on the Company’s website.
As a part of a comprehensive investor relations programme, formal meetings with investors are scheduled to discuss the
Company’s interim and final results. In the periods between these reporting times, the Company continues its dialogue
with investors by periodical public correspondence between the management and the shareholders.
MAJOR SHAREHOLDER AND SHAREHOLDER ARRANGEMENT
In February 2014 the Company, N+1 Singer and Morgan Stanley Renewables Development 1 (Cayman) Limited (“Morgan
Stanley Renewables”), which on admission held 42.4% of the Company’s share capital, entered into a relationship
agreement, the principal purpose of which is to ensure that the Company is capable at all times of carrying on its business
independently of Morgan Stanley Renewables and its connected persons and to ensure all transactions and relationships
between them and the Group are conducted at arm’s length and on normal commercial terms. The terms of the
relationship agreement remain unchanged from the AIM admission document.
08
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
BOARD OF DIRECTORS
JOHN MITCHELL NEILL CBE
Non Executive Chairman
John joined the Unipart group of companies from General Motors in 1974 and set out to
establish a more independent and broadly based role for what was then British Leyland's
Parts Division. In 1987 he led the management buyout of the company, of which he
remains the CEO and Chairman. He has served as a non-executive director of Rolls-Royce
plc, a director of the Court of the Bank of England and a non-executive director of the
Royal Mail and Charter International plc. John became a director and non-executive
Chairman of the Company on 11 December 2013.
TIMOTHY JAMES CORNELIUS
Chief Executive Officer
Tim worked in the subsea, offshore construction and oil and gas sectors with Submarine
Escape and Rescue Service (Australia), Subsea Offshore, Halliburton Subsea and Subsea7,
before taking the role of CEO of Atlantis in 2006, and subsequently joining the Board on
11 December 2013. He remains a certified submersible engineer and subsea ROV pilot
and has experience in the power generation and shipping sectors.
DUNCAN STUART BLACK
Non Executive Director
Duncan joined the Board on 11 December 2013. He has some twenty years of experience
in the power generation and infrastructure sectors in senior operational and development
roles, and as a fund manager, investment banker and engineer. Duncan was the Group’s
CFO from 2012 to 2015, and prior to that had held positions as the CEO of Babcock &
Brown's Asia Infrastructure Fund LP, CFO of TRUenergy (now Energy Australia), and business
development and finance roles with CLP Holdings Ltd and InterGen, focused on power
projects in Asia and Australia. Duncan resigned from his position as CFO on 7 September
2015, but remains on the board as a non-executive director.
MICHAEL ROBERT LLOYD
Non Executive Director
Mike was appointed to the Board on 11 December 2013. He has more than forty years of
experience in engineering, manufacturing and supply chain roles in the electrical machinery
and power sectors. His senior leadership roles have included Group Manufacturing
Director, President of Rolls Royce Gas Turbines Operations, Technical Director of GEC Large
Machines and Managing Director of Alstom Transport. Mike is currently Chairman of
Magnomatics, a venture capital-backed technology company, specialising in the
development of innovative magnetic transmission drives for applications including wind
turbines and hybrid vehicles. Mike is also a non-executive director of Ceres Power Holdings
plc, Aerospace Tooling Ltd and RIMOR Ltd. He has a BSc in Electrical Engineering, a PhD
in Electrical Machines and is a Fellow of the Royal Academy of Engineering.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
09
BOARD OF DIRECTORS continued
JOHN ANTHONY CLIFFORD WOODLEY
Non Executive Director
John joined the Board on 22 September 2008. He was previously co-head of the power
and gas-related commodity business for Europe and Asia at Morgan Stanley. He founded
the very successful US electricity trading operations for Morgan Stanley in New York in
1994. After ten years with Morgan Stanley in New York, John moved to London to help
build the electricity and electricity related energy business outside the US. John is now
based in Switzerland and acts as a senior adviser to Morgan Stanley.
John has a BSc Eng (Elec) from Wits University, Johannesburg, an MBA from Valdosta State
University, Georgia and an MS Finance from Georgia State University.
IAN ANTHONY MACDONALD
Non Executive Director
Ian was appointed to the Board on 11 December 2013. He has been the President of Hong
Leong Finance Ltd since February 2002. Hong Leong Finance Ltd is Singapore’s largest
finance company with a network of 28 branches island-wide. Ian has been in the financial
industry for more than 30 years and brings with him a wealth of experience in all aspects
of financial services, particularly in the areas of business and consumer equipment
financing. Ian was formerly the National Manager of Business Finance at Australian
Guarantee Corporation Limited, a subsidiary of Australian financial giant Westpac Banking
Corporation.
IAN GEORGE COBBAN
Non Executive Director
Ian was appointed to the Board on 3 August 2015. He has over 30 years’ experience in the
subsea construction, operations and maintenance industry. He first joined Subsea Offshore
Ltd, a subsidiary of Subsea 7 S.A, a company listed on the Oslo Børs and a leading global
contractor in seabed-to-surface engineering, construction and services to the offshore energy
industry, as an Offshore Inspection Coordinator in 1985. Thereafter Ian held various positions
within the business, including General Manager with responsibility for the Asia Pacific and
the Middle East; Vice President for Global Projects and Operations in Aberdeen; Vice President
for the Gulf of Mexico, covering the USA, Mexico and Trinidad; and Vice President, Health,
Safety, Security, Environment and Quality at Subsea 7. Ian is currently Executive Vice President
of the Global Energy Group.
10
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
DIRECTORS’ STATEMENT
We are pleased to submit this annual report to the members of the Company together with the audited financial
statements for the financial year ended 31 December 2015.
In our opinion:
(a)
the financial statements set out on pages 19 to 62 are drawn up so as to give a true and fair view of the financial
position and changes in equity of the Group and of the Company as at 31 December 2015 and the financial
performance and cash flows of the Group for the year ended on that date in accordance with the provisions of the
Singapore Companies Act, Chapter 50 and International Financial Reporting Standards; and
(b)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they fall due.
The Board of directors has, on the date of this statement, authorised these financial statements for issue.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The Group is a vertically integrated turbine supplier and project developer in the tidal power industry. It also holds equity
positions in a diverse portfolio of tidal stream development projects. Further information on the Group’s activities is
contained in the Chief Executive Officer’s Statement on pages 3 to 4.
A review of the business during the financial year is contained in the Chairman’s Statement and Chief Executive Officer’s
Statement on pages 2 to 4.
DIRECTORS
The directors in office at the date of this report are as follows:
John Mitchell Neill – Independent Non- Executive Chairman
Timothy James Cornelius – Chief Executive Officer
Duncan Stuart Black – Non-Executive Director (formerly Chief Financial Officer until 7 September 2015)
Michael Robert Lloyd – Independent Non- Executive Director
Ian Anthony Macdonald – Independent Non -Executive Director
John Anthony Clifford Woodley – Non -Executive Director
Ian George Cobban – Independent Non-Executive Director (Appointed 3 August 2015)
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES
During and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement
whose purpose was to enable the directors to acquire benefits by acquiring shares in, or debentures of, the Company or
any other body corporate, except as disclosed in this Directors’ Statement.
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
The interests of directors in shares in or debentures of the Company are disclosed in the Directors’ Remuneration Report
on pages 15 to 17.
DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS
Details of directors’ interests in shares and directors’ contractual benefits are set out in the Directors’ Remuneration Report
on pages 15 to 17.
SHARE OPTIONS
(a) Company Share Option Plan (“CSOP”)
On admission of the Company’s shares to trading on AIM, the options outstanding over “B” shares issued under the
Company’s CSOP, exercisable at prices between S$0.155, and S$0.20 per share, became options over ordinary shares,
at exercise prices between S$4.659 and S$6.000 per share. The CSOP was terminated on Admission, without prejudice
to the rights conferred by the outstanding options. The outstanding options are fully vested and may be exercised at
any time within the exercisable period but no later than the expiry date. Ordinary shares resulting from the exercise
of the outstanding options will rank pari passu in all respects with the ordinary shares in issue. Options are not
pensionable, assignable or transferable.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
11
DIRECTORS ’ STATEMENT continued
Details of the options granted under the CSOP on unissued ordinary shares of the Company are as follows:
Date of grant/
modification
5 Jun 2010
5 Jun 2010
Total
Balance at
1 Jan 2015
Exercise price
per share
66,667
S$6.000
Cancelled/
lapsed
(66,667)
33,333
S$6.000
(33,333)
100,000
Balance at
31 Dec 2015
Exercise
period
–
5 Jun 2010 to
4 Jun 2015
– 10 Jun 2010 to
9 Jun 2015
Nil
(b)
Long Term Incentive Plan (“LTIP”)
Details of the options granted under the LTIP on unissued shares of the Company are as follows:
Date of grant/
modification
11 Dec 2013
Total
Balance at
1 Jan 2015
4,255,321
4,255,321
Granted
Exercised
Cancelled/
lapsed
Balance at
31 Dec 2015
Exercise price
per share
Exercise
period
–
–
–
–
(106,383)
4,148,938
£0.940 20 Feb 2014 to
20 Feb 2019
(106,383)
4,148,938
(c) Other than the above, no option to take up unissued shares of any corporation in the Group was granted and there
were no shares of any corporation in the Group issued by virtue of the exercise of an option to take up unissued
shares. At the end of the financial year, other than the above, there were no unissued shares of any corporation in
the Group under option.
AUDITORS
The auditor, KPMG LLP has indicated its willingness to accept reappointment at the Company’s AGM.
ANNUAL GENERAL MEETING
The company’s AGM will take place on 30June 2016 at 10.00 am at the offices of Ashurst LLP, Broadwalk House,
5 Appold Street, London EC2A 2HA.
On behalf of the Board of Directors
John Mitchell Neill
Chairman of the Board
26 May 2016
Timothy James Cornelius
Chief Executive Officer
12
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
AUDIT COMMITTEE REPORT
The Board has delegated responsibility to the Audit Committee to oversee the financial reporting, internal risk management
and the effectiveness of the audit process. The Audit Committee provides independent oversight of both management
and the external auditors and regularly reports to the Board on the execution of its duties and responsibilities.
The Committee consists of two non-executive directors (the “Members”), one of which is independent. The Board intends
to increase the number of members to three during 2016. Further details on the committee’s membership and attendance
records for the financial year can be found in the Corporate Governance Report.
The Audit Committee has three scheduled meetings a year and works closely with the CFO and senior management to
ensure that it is provided with the necessary information it requires to discharge its duties. The Audit Committee’s meeting
agendas are based on annual reporting requirements and other ad-hoc issues which arise during the course of the year.
The chairman works closely with the management team and the Company Secretary to ensure that all relevant information
is brought to the attention of the Members so that they can formulate an accurate assessment of the matters under
consideration. The Company’s CEO and CFO may attend meetings by invitation and other members of the senior
management team attend as required. The audit partner and audit manager from the Company’s external auditor are
invited to attend meetings of the Audit Committee on a regular basis.
The Audit Committee also engages with executive management to hear their views on a number of areas relating to the
audit conduct, including the auditor’s understanding of the business and their approach.
In accordance with its terms of reference, the Audit Committee, which reports its findings to the Board, is authorised to:
• Monitor the integrity of the Company’s financial reporting and significant financial accounting policies and
judgements to ensure that they portray an accurate and balanced view of the performance and prospects of the
Company;
Review the content of the audited financial statements where requested by the Board and advise on whether they
are fair, balanced, understandable and provide the information necessary for shareholders to assess the Company’s
performance, business model and strategy;
•
• Monitor the effectiveness of the Company’s internal controls and risk management framework;
•
Consider annually whether the Company should initiate an internal audit function and make a recommendation to
the Board accordingly;
Consider and make recommendations to the Board, to be put to shareholders for approval at the Company’s AGM,
in relation to the appointment, reappointment and removal of the Company’s external auditor;
Advise the Board on the appointment, terms of engagement and remuneration of the external auditor and monitor
the external auditor’s independence; and
Review the effectiveness of the Company’s systems for the detection of fraud and the prevention of bribery.
•
•
•
During 2015, the Audit Committee had three meetings, at which a number of matters were considered, including:
•
•
•
•
•
•
•
•
•
•
review of the Group’s risk registers;
internal controls and risk management;
financial statements and key assumptions;
assessing the need for an internal audit function;
policies and procedures;
external auditor’s report to the Audit Committee;
the effectiveness of the audit process;
external auditor reappointment;
review of audit plan and fees; and
composition of the Audit Committee.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
13
AUDIT COMMITTEE REPORT continued
INSIGHTS INTO THE AUDIT COMMITTEE’S ACTIVITIES DURING THE YEAR
During the course of the year, the Audit Committee has reviewed, analysed and challenged the significant assumptions
within the audited financial statements with an independent mind-set. The Audit Committee has considered the
application of materiality, the auditor’s assessment of risks of material misstatements and how management has been
responsive to the audit. No significant accounting issues have been identified during the reporting period.
The Audit Committee reviewed the risk registers of the Company and its subsidiaries, to enable it to effectively maintain
its oversight of the Group’s risk management policy and risk management framework. It has been agreed that these risk
registers would be reviewed by management, who would escalate any findings to the Audit Committee for consideration
and report to the Board where necessary.
The Audit Committee has also considered the need for an internal audit function and felt that it was not necessary for
the time being to establish one, given that the Group has a strong governance framework in place. However, it was agreed
that the need for an internal audit function would be assessed on an annual basis.
The Audit Committee has satisfied itself that safeguards were in place to protect the objectivity and independence of the
auditor. Generally, the Audit Committee’s approach is not to use the auditor for non-audit work unless there is a good
reason for not seeking an alternative supplier. The chairman of the Audit Committee reviews all requests for approval.
The Audit Committee has assessed the quality of the audit work with respect to the 2015 audit. The Audit Committee
has also reviewed the confirmation from the external auditor that they remained independent. Accordingly, the Audit
Committee has recommended that KPMG LLP be reappointed as the Company’s auditor. KPMG LLP has expressed its
willingness to be reappointed at the Company’s next AGM and a resolution to appoint KPMG LLP as auditors of the
Company will be put to the AGM.
TERMS OF REFERENCE
The Audit Committee keeps its terms of reference under review and makes recommendations for changes to the Board.
The full terms of reference are available on the Company’s website at www.atlantisresourcesltd.com.
Approved and signed on behalf of the Board.
Ian Anthony Macdonald
Chairman of the Audit Committee
26 May 2016
14
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
DIRECTORS’ REMUNERATION REPORT
This report sets out details of the directors’ remuneration in 2015. Shareholders will be asked to approve the Directors’
Remuneration Report at the forthcoming AGM.
REMUNERATION COMMITTEE
The members of the Remuneration Committee and the Remuneration Committee’s role are set out on page 7.
REMUNERATION FRAMEWORK
The primary objective of the remuneration framework is to ensure that it supports delivery of the strategy of the Group.
No changes are proposed to the directors’ remuneration policy this year.
It is the Group’s belief that its employees are key to the success of the Company and its business. As a consequence, the
remuneration policy seeks to provide the appropriate reward to attract, motivate and retain high calibre people within
the industry as it is these people who will help the directors to deliver the strategy and results. The Company’s remuneration
packages reflect legal and regulatory requirements and the Corporate Governance Guidelines published by the Quoted
Companies Alliance.
The Remuneration Committee is satisfied that this framework successfully aligns the interests of executive directors, senior
managers and other employees with the shareholders’ long-term interests, by ensuring that an appropriate proportion of
remuneration is directly linked to overall performance, in both the short and long term. The remuneration of the
non-executive directors is a matter for the Board subject to the constraints of the Company’s Constitution. No director or
manager is involved in any decision as to their own remuneration. In determining the practicalities of the approach, the
Remuneration Committee considers a range of internal and external factors and appropriate market comparisons against
other companies of a similar size, nature and stage of development. The Committee may also engage professional advisors
to assist.
The Remuneration Committee will determine the policy for and scope of service agreements, termination payments and
compensation commitments for the executive directors and the senior executive management team. It also ensures that
directors’ contractual terms on termination are observed, that failure is not rewarded and that the duty to mitigate loss is
fully recognised. The Remuneration Committee will also agree the policy for authorising claims for expenses from the
directors.
DIRECTORS’ INTERESTS IN SHARES
According to the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies
Act (the “Act”), none of the directors of the Company holding office at the end of the financial year had any interests in
the shares or debentures of the Company and its related corporations, except as follows:
Name of directors and corporation in Shareholdings registered Shareholdings in which director
which interests are held in the name of directors are deemed to have an interest
At beginning At end At beginning At end
The Company of the year of the year of the year of the year
Ordinary shares
John Mitchell Neill 377,501 377,501 – –
Timothy James Cornelius 84,041 84,041 992,065(1) 992,065(1)
Duncan Stuart Black 1,042,419 1,042,419 – –
Michael Robert Lloyd 188,287 188,287 – –
Ian Anthony Macdonald 125,020 125,020 – –
(1) Shares held by Languedoc Pte Limited, of which Timothy Cornelius is the sole shareholder. These shares are subject to a charge in favour of Morgan Stanley Capital
Group Inc. as security for a S$1,500,000 loan to Timothy Cornelius dated 12 November 2008.
DIRECTORS’ CONTRACTUAL BENEFITS
Since the end of the previous financial year, no director of the Company has received, or become entitled to receive, a
benefit which is required to be disclosed under Section 201(8) of the Act under a contract made by the Company or a
related corporation with the director, or with a firm of which he is a member, or with a company in which he has a
substantial financial interest, other than salaries, bonuses and other benefits as shown in these financial statements.
Certain directors received remuneration from a related corporation in their capacity as directors and/or executives of those
related corporations.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
15
DIRECTORS’ REMUNERATION REPORT continued
EXECUTIVE DIRECTOR’S SERVICE CONTRACTS AND PAYMENTS FOR LOSS OF OFFICE
The CEO is employed under a service contract with a fixed period of notice of termination. His services may be terminated
on a maximum of six months’ notice by either party.
NON-EXECUTIVE DIRECTORS’ LETTERS OF APPOINTMENT
The Company’s non-executive directors are not committed by service contracts to the Company and are engaged by letters
of appointment. These provide for a maximum of three months’ notice of termination by either party at any time, with
no pre-determined amounts of compensation.
PAYMENTS TO PAST DIRECTORS
There have been no payments to past directors in the year.
PAYMENTS FOR LOSS OF OFFICE
There have been no payments made to directors for loss of office during the year.
ANNUAL REMUNERATION OF DIRECTORS
The table below sets out the annual remuneration of the directors for the years ended 31 December 2015 and
31 December 2014.
Annual remuneration
2015 2014
Director S$’000 S$’000
John Mitchell Neill 157 157
Timothy James Cornelius(1) 646 685
Duncan Stuart Black(2) 388 545
Michael Robert Lloyd 76 75
Ian Anthony Macdonald 72 72
John Anthony Clifford Woodley 72 72
Rune Nilsen(3) – –
Ian George Cobban(4) 38 –
(1) Timothy James Cornelius is employed by Atlantis Operations (UK) Limited
(2) Was CFO until 7 September 2015. He became a non-executive director on 8 September 2015.
(3) Resigned as a director with effect from 3 August 2015
(4) Appointed as a director with effect from 3 August 2015
LONG TERM INCENTIVE PLAN (“LTIP”)
On 11 December 2013, it was agreed, contingent on admission, that the Company offered certain senior management
and directors options over shares through a LTIP. During the year, the Remuneration Committee recommended to the
Board that the rules of the LTIP should be amended to allow the Board to determine the date on which awards granted
under the LTIP can vest. As at the date of this Report, there has been no change to vesting dates.
The options granted to directors are shown below:
Name Date of grant Ordinary share Nature of award Exercise price Vesting period
Timothy Cornelius 11 December 2013 1,063,830 Option £0.94 1/3 on each of first, second and
third anniversary of grant
Duncan Black 11 December 2013 851,064 Option £0.94 1/3 on each of first, second and
third anniversary of grant
John Neill 11 December 2013 1,063,830 Option £0.94 1/3 on each of first, second and
third anniversary of grant
Michael Lloyd 11 December 2013 106,383 Option £0.94 1/3 on each of first, second and
third anniversary of grant
Ian Macdonald 11 December 2013 265,958 Option £0.94 1/3 on each of first, second and
third anniversary of grant
Vested awards are exercisable up until the fifth anniversary of the date of the grant.
16
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
DIRECTORS’ REMUNERATION REPORT continued
Until awards vest or options are exercised, participants have no voting or other rights in the shares subject to the award.
Ordinary shares issued or transferred pursuant to the LTIP rank pari passu in all respects with the ordinary shares then in
issue except that they will not rank for any dividend/distribution of the Company paid or made by reference to a record
date falling before the exercise date. The option is not assignable or transferable.
SHAREHOLDER VOTE AT THE ANNUAL GENERAL MEETING
The 2015 Directors’ Remuneration Report will be put to an advisory shareholder vote at the 2016 AGM. The remuneration
policy remains unchanged for 2015.
The 2014 Directors’ Remuneration Report was approved by shareholders with a vote of 57,617,834 votes in favour
(94.19%) at the 2015 AGM.
Approved and signed on behalf of the Board.
John Mitchell Neill
Chairman of the Remuneration Committee
26 May 2016
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
17
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
ATLANTIS RESOURCES LIMITED
(cid:3)(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
KPMG LLP
(cid:883)(cid:888)(cid:3)(cid:21)(cid:131)(cid:136)(cid:976)(cid:142)(cid:135)(cid:149)(cid:3)(cid:20)(cid:151)(cid:131)(cid:155)(cid:3)(cid:851)(cid:884)(cid:884)(cid:486)(cid:882)(cid:882)(cid:3)
(cid:11)(cid:145)(cid:144)(cid:137)(cid:3)(cid:15)(cid:135)(cid:145)(cid:144)(cid:137)(cid:3)(cid:5)(cid:151)(cid:139)(cid:142)(cid:134)(cid:139)(cid:144)(cid:137)(cid:3)
(cid:22)(cid:139)(cid:144)(cid:137)(cid:131)(cid:146)(cid:145)(cid:148)(cid:135)(cid:3)(cid:882)(cid:886)(cid:890)(cid:887)(cid:890)(cid:883)(cid:3)
(cid:23)(cid:135)(cid:142)(cid:135)(cid:146)(cid:138)(cid:145)(cid:144)(cid:135)(cid:3)
(cid:9)(cid:131)(cid:154)(cid:3)
(cid:12)(cid:144)(cid:150)(cid:135)(cid:148)(cid:144)(cid:135)(cid:150)(cid:3)
(cid:938)(cid:888)(cid:887)(cid:3)(cid:888)(cid:884)(cid:883)(cid:885)(cid:3)(cid:885)(cid:885)(cid:890)(cid:890)
(cid:938)(cid:888)(cid:887)(cid:3)(cid:888)(cid:884)(cid:884)(cid:887)(cid:3)(cid:882)(cid:891)(cid:890)(cid:886)(cid:3)(cid:3)
(cid:153)(cid:153)(cid:153)(cid:484)(cid:141)(cid:146)(cid:143)(cid:137)(cid:484)(cid:133)(cid:145)(cid:143)(cid:484)(cid:149)(cid:137)(cid:3)(cid:3)(cid:3)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Atlantis Resources Limited (the Company) and its subsidiaries
(the Group), which comprise the statements of financial position and statements of changes in equity of the Group and
the Company as at 31 December 2015, the statement of profit or loss and other comprehensive income and statement
of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory
information, as set out on pages 19 to 62.
Management’s responsibility for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and International Financial Reporting Standards,
and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance
that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised
and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain
accountability of assets.
Auditor's responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position and statement
of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and International
Financial Reporting Standards so as to give a true and fair view of the financial position of the Group and of the Company
as at 31 December 2015 and the changes in equity of the Group and Company and the financial performance and cash
flows of the Group for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary
corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
26 May 2016
(cid:14)(cid:19)(cid:16)(cid:10)(cid:3)(cid:15)(cid:15)(cid:19)(cid:3)(cid:523)(cid:21)(cid:135)(cid:137)(cid:139)(cid:149)(cid:150)(cid:148)(cid:131)(cid:150)(cid:139)(cid:145)(cid:144)(cid:3)(cid:17)(cid:145)(cid:484)(cid:3)(cid:23)(cid:882)(cid:890)(cid:15)(cid:15)(cid:883)(cid:884)(cid:888)(cid:889)(cid:15)(cid:524)(cid:481)(cid:3)(cid:131)(cid:144)(cid:3)(cid:131)(cid:133)(cid:133)(cid:145)(cid:151)(cid:144)(cid:150)(cid:139)(cid:144)(cid:137)(cid:3)(cid:142)(cid:139)(cid:143)(cid:139)(cid:150)(cid:135)(cid:134)(cid:3)
(cid:142)(cid:139)(cid:131)(cid:132)(cid:139)(cid:142)(cid:139)(cid:150)(cid:155)(cid:3)(cid:3)(cid:146)(cid:131)(cid:148)(cid:150)(cid:144)(cid:135)(cid:148)(cid:149)(cid:138)(cid:139)(cid:146)(cid:3)(cid:3)(cid:148)(cid:135)(cid:137)(cid:139)(cid:149)(cid:150)(cid:135)(cid:148)(cid:135)(cid:134)(cid:3)(cid:3)(cid:139)(cid:144)(cid:3)(cid:3)(cid:22)(cid:139)(cid:144)(cid:137)(cid:131)(cid:146)(cid:145)(cid:148)(cid:135)(cid:3)(cid:3)(cid:151)(cid:144)(cid:134)(cid:135)(cid:148)(cid:3)(cid:3)(cid:150)(cid:138)(cid:135)(cid:3)(cid:3)(cid:15)(cid:139)(cid:143)(cid:139)(cid:150)(cid:135)(cid:134)(cid:3)(cid:3)
(cid:15)(cid:139)(cid:131)(cid:132)(cid:139)(cid:142)(cid:139)(cid:150)(cid:155)(cid:3)(cid:3)(cid:19)(cid:131)(cid:148)(cid:150)(cid:144)(cid:135)(cid:148)(cid:149)(cid:138)(cid:139)(cid:146)(cid:3)(cid:3)(cid:4)(cid:133)(cid:150)(cid:3)(cid:3)(cid:523)(cid:6)(cid:138)(cid:131)(cid:146)(cid:150)(cid:135)(cid:148)(cid:3)(cid:3)(cid:883)(cid:888)(cid:885)(cid:4)(cid:524)(cid:3)(cid:3)(cid:131)(cid:144)(cid:134)(cid:3)(cid:3)(cid:131)(cid:3)(cid:3)(cid:143)(cid:135)(cid:143)(cid:132)(cid:135)(cid:148)(cid:3)(cid:3)(cid:976)(cid:139)(cid:148)(cid:143)(cid:3)(cid:3)(cid:145)(cid:136)
(cid:150)(cid:138)(cid:135)(cid:3)(cid:14)(cid:19)(cid:16)(cid:10)(cid:3)(cid:144)(cid:135)(cid:150)(cid:153)(cid:145)(cid:148)(cid:141)(cid:3)(cid:145)(cid:136)(cid:3)(cid:139)(cid:144)(cid:134)(cid:135)(cid:146)(cid:135)(cid:144)(cid:134)(cid:135)(cid:144)(cid:150)(cid:3)(cid:143)(cid:135)(cid:143)(cid:132)(cid:135)(cid:148)(cid:3)(cid:976)(cid:139)(cid:148)(cid:143)(cid:149)(cid:3)(cid:131)(cid:136)(cid:976)(cid:139)(cid:142)(cid:139)(cid:131)(cid:150)(cid:135)(cid:134)(cid:3)(cid:153)(cid:139)(cid:150)(cid:138)(cid:3)
(cid:14)(cid:19)(cid:16)(cid:10)(cid:3)(cid:12)(cid:144)(cid:150)(cid:135)(cid:148)(cid:144)(cid:131)(cid:150)(cid:139)(cid:145)(cid:144)(cid:131)(cid:142)(cid:3)(cid:6)(cid:145)(cid:145)(cid:146)(cid:135)(cid:148)(cid:131)(cid:150)(cid:139)(cid:152)(cid:135)(cid:3)(cid:523)(cid:498)(cid:14)(cid:19)(cid:16)(cid:10)(cid:3)(cid:12)(cid:144)(cid:150)(cid:135)(cid:148)(cid:144)(cid:131)(cid:150)(cid:139)(cid:145)(cid:144)(cid:131)(cid:142)(cid:499)(cid:524)(cid:481)(cid:3)(cid:131)(cid:3)(cid:22)(cid:153)(cid:139)(cid:149)(cid:149)(cid:3)
(cid:135)(cid:144)(cid:150)(cid:139)(cid:150)(cid:155)(cid:484)(cid:3)
18
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)(cid:3)
(cid:3)
(cid:3)
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2015
2015 2014
Note S$’000 S$’000
Revenue 4 2,889 5,279
Other gains 5 27,913 1,129
Employee benefits expenses 6 (9,734) (7,016)
Other operating expenses (5,573) (5,375)
Subcontractor costs (1,292) (3,363)
Depreciation and amortisation 11,12 (3,301) (3,185)
Impairment loss on property, plant and equipment 11 (3,951) –
Research and development costs (1,299) (840)
–––––––– ––––––––
Total expenses (25,150) (19,779)
–––––––– ––––––––
Results from operating activities 5,652 (13,371)
Finance costs 7 (1,290) (2,835)
–––––––– ––––––––
4,362 (16,206)
Share of results of equity-accounted investees 8 (103) –
–––––––– ––––––––
Profit/(loss) before tax 4,259 (16,206)
Tax credit 9 – 11
–––––––– ––––––––
Profit/(loss) for the year 10 4,259 (16,195)
–––––––– ––––––––
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 553 996
Related tax – –
–––––––– ––––––––
Other comprehensive income for the year, net of tax 553 996
–––––––– ––––––––
Total comprehensive income for the year 4,812 (15,199)
–––––––– ––––––––
Profit/(loss) attributable to:
Owners of the Group 4,413 (16,195)
Non-controlling interests (154) –
–––––––– ––––––––
Total comprehensive income attributable to:
Owners of the Group 5,096 (15,199)
Non-controlling interests (284) –
–––––––– ––––––––
Earnings/(loss) per share
Basic and diluted earnings/(loss) per share 26 0.04 (0.22)
–––––––– ––––––––
No dividends were proposed or declared in respect of any of the years presented above.
The accompanying notes form an integral part of these financial statements.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
19
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Group
Company
2015 2014 2015 2014
Notes S$’000 S$’000 S$’000 S$’000
Assets
Property, plant and equipment 11 85,947 70,508 43 28
Intangible assets 12 64,718 43,194 5,464 6,010
Investments in subsidiaries 13 – – 27,744 18,525
Loans to subsidiaries 14 – – 25,073 22,791
Investment in joint venture 8 442 – – –
Loan to joint venture 15 1,903 – 1,903 –
Trade and other receivables 16 – – 23,168 19,826
–––––––– –––––––– –––––––– ––––––––
Non-current assets 153,010 113,702 83,395 67,180
–––––––– –––––––– –––––––– ––––––––
Trade and other receivables 16 12,972 3,719 163 5,015
Cash and cash equivalents 17 25,645 29,247 322 392
–––––––– –––––––– –––––––– ––––––––
Current assets 38,617 32,966 485 5,407
–––––––– –––––––– –––––––– ––––––––
Total assets 191,627 146,668 83,880 72,587
–––––––– –––––––– –––––––– ––––––––
Trade and other payables 18 17,721 18,562 3,533 4,185
Provisions 19 4,257 795 – –
Loans and borrowings 20 4,448 – 437 494
–––––––– –––––––– –––––––– ––––––––
Current liabilities 26,426 19,357 3,970 4,679
–––––––– –––––––– –––––––– ––––––––
Liabilities
Loans and borrowings 20 36,479 21,375 690 650
Deferred tax liabilities 21 8,006 7,905 – –
–––––––– –––––––– –––––––– ––––––––
Non-current liabilities 44,485 29,280 690 650
–––––––– –––––––– –––––––– ––––––––
Total liabilities 70,911 48,637 4,660 5,329
–––––––– –––––––– –––––––– ––––––––
Net assets 120,716 98,031 79,220 67,258
–––––––– –––––––– –––––––– ––––––––
Equity
Share capital 22 199,659 185,500 199,659 185,500
Capital reserve 23 11,917 11,448 – –
Translation reserve 24 963 280 – –
Option fee 25 10 10 10 10
Share option reserve 25 6,763 4,932 6,763 4,932
Accumulated losses (108,354) (112,767) (127,212) (123,184)
–––––––– –––––––– –––––––– ––––––––
Total equity attributable to owners
of the Company 110,958 89,403 79,220 67,258
Non-controlling interests 13 9,758 8,628 – –
–––––––– –––––––– –––––––– ––––––––
Total equity 120,716 98,031 79,220 67,258
–––––––– –––––––– –––––––– ––––––––
The accompanying notes form an integral part of these financial statements.
20
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2015
Attributable to owners of the Company
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
Note S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Group
At 1 January 2014 114,906 – (716) 10 3,994 (96,572) 21,622 – 21,622
Total comprehensive
income for the year
Loss for the year – – – – – (16,195) (16,195) – (16,195)
Other comprehensive income – – 996 – – – 996 – 996
Total comprehensive income
for the year – – 996 – – (16,195) (15,199) – (15,199)
Transactions with
owners, recognised
directly in equity
Contributions by and
distributions to owners
Issue of ordinary shares 22 32,758 – – – – – 32,758 – 32,758
Conversion of convertible
loans into shares during
public offering 22 37,836 – – – – – 37,836 – 37,836
Recognition of share-based
payments 25 – – – – 938 – 938 – 938
Changes in ownership
interest in subsidiary
Dilution of interest in a
subsidiary without
change in control 13(b) – 11,448 – – – – 11,448 8,628 20,076
Total transactions with
owners 70,594 11,448 – – 938 – 82,980 8,628 91,608
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
At 31 December 2014 185,500 11,448 280 10 4,932 (112,767) 89,403 8,628 98,031
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
The accompanying notes form an integral part of these financial statements.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
21
STATEMENTS OF CHANGES IN EQUITY continued
YEAR ENDED 31 DECEMBER 2015
Attributable to owners of the Company
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
Note S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Group
At 1 January 2015 185,500 11,448 280 10 4,932 (112,767) 89,403 8,628 98,031
Total comprehensive
income for the year
Profit for the year – – – – – 4,413 4,413 (154) 4,259
Other comprehensive income – – 683 – – – 683 (130) 553
Total comprehensive income
for the year – – 683 – – 4,413 5,096 (284) 4,812
Transactions with
owners, recognised
directly in equity
Contributions by and
distributions to owners
Issue of ordinary shares 22 14,159 – – – – – 14,159 – 14,159
Recognition of share-based
payments 25 – – – – 1,831 – 1,831 – 1,831
Changes in ownership
interest in subsidiary
Dilution of interest in a
subsidiary without
change in control 13(b) – 469 – – – – 469 1,414 1,883
Total transactions
with owners 14,159 469 – – 1,831 – 16,459 1,414 17,873
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
At 31 December 2015 199,659 11,917 963 10 6,763 (108,354) 110,958 9,758 120,716
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
The accompanying notes form an integral part of these financial statements.
22
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY continued
YEAR ENDED 31 DECEMBER 2015
Share Option Share option Accumulated
capital fee reserve losses Total
Note S$’000 S$’000 S$’000 S$’000 S$’000
At 1 January 2014 114,906 10 3,994 (113,290) 5,620
Total comprehensive expense for the year
Loss for the year – – – (9,894) (9,894)
Total comprehensive income for the year – – – (9,894) (9,894)
––––––– ––––––– ––––––– ––––––– –––––––
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Issue of share capital 22 32,758 – – – 32,758
Conversion of convertible loans into shares during public offering 22 37,836 – – – 37,836
Recognition of share-based payments 25 – – 938 – 938
Total transactions with owners 70,594 – 938 – 71,532
––––––– ––––––– ––––––– ––––––– –––––––
At 31 December 2014 185,500 10 4,932 (123,184) 67,258
––––––– ––––––– ––––––– ––––––– –––––––
At 1 January 2015 185,500 10 4,932 (123,184) 67,258
Total comprehensive expense for the year
Loss for the year – – – (4,028) (4,028)
Total comprehensive income for the year – – – (4,028) (4,028)
––––––– ––––––– ––––––– ––––––– –––––––
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Issue of share capital 22 14,159 – – – 14,159
Recognition of share-based payments 25 – – 1,831 – 1,831
Total transactions with owners 14,159 – 1,831 – 15,990
––––––– ––––––– ––––––– ––––––– –––––––
At 31 December 2015 199,659 10 6,763 (127,212) 79,220
––––––– ––––––– ––––––– ––––––– –––––––
The accompanying notes form an integral part of these financial statements.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
23
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2015
2015 2014
Note S$’000 S$’000
Cash flows from operating activities
Profit/(loss) before tax 4,259 (16,206)
Adjustments for:
Bargain purchase arising from business combination 13 (19,270) –
Gain on disposal of subsidiary 5 (947) –
Remeasurement gain on investment retained in the former subsidiary 5 (947) –
Grant income 5 (5,953) (668)
Impairment loss on property, plant and equipment 11 3,951 –
Depreciation of property, plant and equipment 11 75 37
Amortisation of intangible asset 12 3,226 3,148
Interest expense 1,290 2,835
Share-based payments 6 1,831 938
Provisions reversed during the year 19 316 (309)
Share of loss of joint venture, net of tax 103 –
Net foreign exchange (548) 727
–––––––– ––––––––
Operating cash flows before movements in working capital (12,614) (9,498)
Movements in trade and other receivables 237 (2,411)
Movements in trade and other payables (2,784) 7,574
–––––––– ––––––––
Net cash used in operating activities (15,161) (4,335)
–––––––– ––––––––
Cash flows from investing activities
Purchase of property, plant and equipment (38,340) (27,361)
Expenditure on project development 12 (2,508) (4,080)
Cash received from disposal of subsidiary 13(d) 545 –
Acquisition of subsidiary, net of cash acquired 13(c) 117 –
–––––––– ––––––––
Net cash used in investing activities (40,186) (31,441)
–––––––– ––––––––
Cash flows from financing activities
Proceeds from grants received 27,922 4,990
Proceeds from issue of shares 22 5,541 35,558
Share issuance cost 22 (277) (2,800)
Proceeds from borrowings 16,290 7,293
Repayment of borrowings – (2,400)
Deposits released/(pledged) 1,798 (4,446)
Interest paid – (262)
Non-controlling interest 1,883 20,076
–––––––– ––––––––
Net cash from financing activities 53,157 58,009
–––––––– ––––––––
Net (decrease)/increase in cash and cash equivalents (2,190) 22,233
Cash and cash equivalents at 1 January 23,089 908
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies 386 (52)
–––––––– ––––––––
Cash and cash equivalents at 31 December 17 21,285 23,089
–––––––– ––––––––
The accompanying notes form an integral part of these financial statements.
24
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
31 DECEMBER 2015
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board on 26 May 2016.
1. DOMICILE AND ACTIVITIES
Atlantis Resources Limited is a company incorporated in Singapore. The address of the Company’s registered office is
65 Niven Road, Singapore 228414.
The principal activity of the Group is that of pioneering the development of tidal current power as a reliable, economic
and secure form of renewable energy. The Company is an inventor, developer, owner, marketer and licensor of technology,
intellectual property, trademarks, products and services.
The principal activities of the subsidiaries are disclosed in Note 13 to the financial statements.
The financial statements of the Group as at and for the year ended 31 December 2015 comprise the Company and
its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in an
equity-accounted investee.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the
accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The financial statements are presented in Singapore dollars (S$), rounded to the nearest thousand.
Adoption of IFRS and revised standards
The adoption of the new and revised International Accounting Standards (“IASs”) for the financial year beginning 1
January 2015 does not have a significant effect on the financial statements.
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements.
2.2 Basis of consolidation
The consolidated financial statements are prepared in conjunction with IFRS 10 Consolidated Financial Statements
and incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries).
Control is achieved where the Company has the power to govern the financial and operating policies of an entity so
as to obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
in line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly
in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest; and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling
interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted
for (i.e., reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be
required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former
subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under IFRS 7 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition
of an investment in an associate or jointly controlled entity.
In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net
recoverable value that has been recognised in profit or loss.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
25
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
2.3 Business combination
The acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration for
each acquisition is measured at the aggregate of the acquisition date fair values of assets given, liabilities incurred
by the Group to the former owners of the acquiree, and equity interests issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The
subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is
remeasured at subsequent reporting dates in accordance with IFRS 7 Financial Instruments: Recognition and
Measurement, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the
corresponding gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or
loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date
that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such
treatment would be appropriate if that interest were disposed of.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
the IFRS are recognised at their fair value at the acquisition date, except that:
•
•
•
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised
and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment
awards are measured in accordance with IAS 2 Share-based Payment; and
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities
are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete
information about facts and circumstances that existed as of the acquisition date and is subject to a maximum of
one year from acquisition date.
Goodwill
The Group measures goodwill at the acquisition date as:
•
•
•
the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing,
goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each
asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
26
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
On disposal of a subsidiary or the relevant cash generating unit, the attributable amount of goodwill is included in
the determination of the profit or loss on disposal.
Investment in joint venture (equity-accounted investee)
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets
of the arrangement, rather than rights to its assets and obligations for its liabilities.
Investments in joint ventures are accounted for using the equity method. They are recognised initially at cost, which
includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s
share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align
the accounting policies with those of the Group, from the date that significant influence or joint control commences
until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the
investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition of
further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s operations
or has made payments on behalf of the investee.
2.4 Financial instruments
Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of
the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial
instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest rate
basis for debt instruments other than those financial instruments classified as at fair value through profit or loss.
Financial assets
All financial assets are recognised and de-recognised on a trade date where the purchase or sale of an investment is
under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value plus transaction costs except for those financial assets classified
as at fair value through profit and loss which are initially measured at fair value.
Financial assets comprise loans and receivables.
Loans and receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are
classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest
method less impairment. Interest is recognised by applying the effective interest method, except for short-term
receivables when the recognition of interest would be immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, short-term bank deposits with an original maturity of three months
and cash on hand.
For the purposes of the consolidated statement of cashflows, pledged deposits are excluded.
Impairment of financial assets
Financial assets, other than those at fair value through profit and loss, are assessed for indicators of impairment at
the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of
one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows
of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment
is the difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
27
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
For available-for-sale equity instruments, a significant or prolonged decline in the fair value of the investment below
its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
•
•
•
significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade and other receivables where the carrying amount is reduced through the use of an allowance
account. When a receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against the allowance account. Changes in the carrying amount of
the allowance account are recognised in profit or loss.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously
recognised in other comprehensive income are reclassified to profit or loss. With the exception of available-for-sale
equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment loss was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date
the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been
recognised.
In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not
reversed through profit or loss. Any subsequent increase in fair value after an impairment loss is recognised in other
comprehensive income.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues
to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing
for the proceeds received.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all
of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Other financial liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured
at amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield
basis.
Loans and borrowings (except for financial guarantee contract liabilities) are initially measured at fair value, and are
subsequently measured at amortised cost, using the effective interest rate method. Any difference between the
proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of
the borrowings in accordance with the Group’s accounting policy for borrowing costs (see Note 2.16).
Financial guarantee contract liabilities are measured initially at their fair values and, if not designated as fair value
through profit and loss, subsequently at the higher of the amount of obligation under the contract recognised as a
provision in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and the amount initially
recognised less cumulative amortisation in accordance with IAS 18 Revenue.
28
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Convertible loan notes
Convertible loans are regarded as compound instruments, consisting of a liability component and an equity
component. The components of the compound instruments are classified separately as financial liabilities and equity
in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability
component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount
is recorded as a liability on an amortised cost basis until extinguished upon conversion or at the instrument’s maturity
date. The equity component is determined by deducting the amount of the liability component from the fair value
of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is
not subsequently remeasured.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.
2.5 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the
relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense
in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a
liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis,
except where another systematic basis is more representative of the time pattern in which economic benefits from
the leased asset are consumed.
2.6 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment
losses.
Freehold land is stated in the consolidated statement of financial position at cost, less any subsequent accumulated
impairment losses.
Property, plant and equipment in the course of construction for production, rental or administrative purposes, or for
purpose not yet determined, are carried at cost, less any recognised impairment loss. Cost includes expenditure that
is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes:
•
the cost of materials and direct labour;
•
•
•
any other costs directly attributable to bringing the assets to a working condition for their intended use;
when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling
and removing the items and restoring the site on which they are located; and
capitalised borrowing costs.
Depreciation of these assets, on the same basis as other assets, commences when the assets are ready for their
intended use.
Depreciation is charged so as to write off the cost of assets, other than freehold land and construction-in-progress,
over their estimated useful lives using the straight-line method, on the following basis:
–
20%
Leasehold improvements
25%
Furniture, fixtures and equipment
–
25%
Computer equipment and software –
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis.
The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference
between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
Fully depreciated assets still in use are retained in the financial statements.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
29
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
2.7 Intangible assets
Internally-generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Capitalisation of an internally generated asset is only permitted during the development phase.
Development activities must apply research findings for a business purpose, such as:
•
•
•
•
the design, construction and testing of pre-production or pre-use prototypes and models;
the design of tools, jigs, moulds and dies involving new technology;
the design, construction and operation of a pilot plant that is not of a scale economically feasible for commercial
production; and
the design, construction and testing of a chosen alternative for new or improved materials, devices, products.
The cost of capitalised development activities should include all directly attributable costs necessary to create, produce
and prepare an asset for a business purpose in the manner intended by management.
An internally-generated intangible asset arising from development (or from the development phase of an internal
project) is recognised if, and only if, all of the following have been demonstrated:
•
•
•
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset so that it will be available for use or sale;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful
lives.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is
incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.
Amortisation will begin when the asset is available for use, i.e. when it is in the location and condition necessary for
it to be capable of operating in the manner intended by management.
Intellectual property
Intellectual property is measured initially at purchase cost and is subsequently measured at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the asset’s
expected estimated useful life. Intellectual property is tested for impairment annually, or more frequently when there
is an indication that it may be impaired (see below for impairment testing).
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill. The
cost of such intangible assets is their fair value at the acquisition date.
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired
separately.
30
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
2.8 Impairment of tangible and intangible assets excluding goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if
any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment
annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated
as a revaluation increase.
2.9 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
2.10 Share-based payments
The Group issues equity-settled share-based payments to certain employees and directors.
Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect of
non market-based vesting conditions) at the date of grant. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in Note 25. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s
estimate of the number of equity instruments that will eventually vest. At the end of each reporting period, the
Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to the equity-settled employee benefits reserve.
Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral
considerations.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
31
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
2.11 Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attached to them and the grants will be received. Government grants whose primary condition is that
the Group should purchase, construct or otherwise acquire non-current assets are presented as a deduction from
the carrying amount of the related assets and recognised as income over the useful lives of the assets by way of a
reduced depreciation or amortisation charge.
Other government grants are recognised as income over the periods necessary to match them with the costs for
which they are intended to compensate, on a systematic basis. Government grants that are receivable as
compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to
the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.
2.12 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
Consulting fees and sale of equipment
Consulting fees are measured at the fair value of the consideration received or receivable and represent amounts
receivable for consulting services provided in the normal course of business, net of sales related taxes. Consulting
fees are recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date.
Revenue for the sale of equipment is recognised when the risk and rewards of the product are transferred to the
customer.
Licence and royalties
Licence and royalty revenue are recognised on an accrual basis in accordance with the substance of the relevant
agreement. Licence and royalties determined on a time basis are recognised on a straight-line basis over the period
of the agreement. Licence and royalty arrangements that are based on production, sales and other measures are
recognised by reference to the underlying arrangement.
2.13 Retirement benefit obligations
Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered
the services entitling them to the contributions. Payments made to state-managed retirement benefit schemes, such
as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s
obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.
2.14 Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
consolidated statement of profit or loss and other comprehensive income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax
deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or
substantively enacted in countries where the Company and its subsidiaries operate by the end of the reporting period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries, except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable that there will be
sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
32
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of
reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items
credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case
the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively),
or where they arise from the initial accounting for a business combination. In the case of a business combination,
the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the
net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.
2.15 Foreign currency transactions and translation
The individual financial statements of each Group entity are measured and presented in the currency of the primary
economic environment in which the entity operates (its functional currency). The consolidated financial statements
of the Group and the statement of financial position and statement of equity of the Company are presented in
Singapore dollars, which is the functional currency of the Company, and the presentation currency for the
consolidated financial statements.
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing
on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the end of reporting period. All exchange differences are
recognised in profit or loss.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations (including comparatives) are expressed in Singapore dollars using exchange rates prevailing at the end of
the reporting period. Income and expense items (including comparatives) are translated at the average exchange
rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange
rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in a separate component of equity.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a
disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly
controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a
foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group
are reclassified to profit or loss.
In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the
proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not
recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities not involving
a change of accounting basis), the proportionate share of the accumulated exchange differences is reclassified to
profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor
likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that
are considered to form part of a net investment in a foreign operation are recognised in other comprehensive income,
and are presented in the translation reserve in equity.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
33
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
2.16 Finance costs
Finance costs comprise interest expense on borrowings and changes in fair values of derivative liabilities. All borrowing
costs are recognised in the profit or loss using the effective interest method, except to the extent that they are
capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily
takes a substantial period of time to be prepared for its intended use or sale.
2.17 Segment reporting
The Group is currently focused on the development of tidal current power projects and in developing its turbines for
installation in those projects. It currently considers its business as two operating segments.
2.18 New standards and interpretations not adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
after 1 January 2015, and have not been applied in preparing these financial statements.
Except as otherwise indicated below, those new standards, amendments to standards, and interpretations are not
expected to have a significant effect on the financial statements of the Group. The Group does not plan to adopt
these standards early.
•
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers will replace IAS 18 Revenue, IAS 11 Construction Contracts and
related interpretations. The standard establishes the principle for companies to recognise revenue to depict the
transfer of goods or services to customers in amounts that reflect the consideration to which the company expects
to be entitled to in exchange for those goods or services. The new standard will also result in enhanced disclosures
about revenue, provide guidance for transactions that were not previously addressed (e.g. service revenue and
contract modifications) and improved guidance for multi-element arrangements. The Group is currently assessing
the impact upon adoption of this standard in the financial year ending 31 December 2018.
•
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces most of the existing guidance in IAS 39 Financial Instruments: Recognition and
Measurement. It includes revised guidance on classification and measurement of financial instruments, a new
expected credit loss model for calculating impairment on financial assets, and new general hedge accounting
requirements.
•
IAS 17 Leases
The new leases standard establishes the principles that entities would apply to report information to users of the
financial statements about the amount, timing and uncertainty of cash flows arising from a lease. The new standards
will require a lessee to recognise assets and liabilities arising from a lease on its balance sheet.
Management is currently evaluating the impact of the implementation of these standards, in view of the complexities
and the potential wide-ranging implications.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 2, management is required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the
revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies and key sources of estimation uncertainty
In the process of applying the Group’s accounting policies, which are described in Note 2, the critical accounting
judgements that will have a significant effect on the amounts recognised in the financial statements and the key sources
of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year, are discussed below:
34
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
continued
Recoverability of project-under-construction
The recoverable amount of the project-under-construction was derived based on the fair value less costs to sale. The fair value
is supported using both the proposed subscription price of the shares in TPSL byDEME and SPR’s acquisition and associated
investment in TPSL. The recoverable amount so determined was in excess of the carrying value recorded of S$85,610,000
(2014: S$66,458,000) as disclosed in Note 11, and accordingly, management has taken the view that no impairment loss on
the assets was required.
At the end of every year, management assesses the existing condition and performance of its assets to identify if there is any
evidence that project-under-construction may be impaired.
Useful lives of intangible assets
The useful lives are based on similar assets in the industry and taking into account anticipated technological changes.
Judgement is required to determine the period over which the proprietary technology (to which the intangible assets
relate) will continue to have economic value. Amortisation will commence upon the commercialisation of the assets. The
Group reviews the useful lives of the intangible assets at the end of each reporting period.
Recoverability of intangible assets
The recoverable amounts of the intangible assets related to the global technology licence, intellectual property and
development costs are estimated based on their value in use. When value in use calculations are undertaken, management
estimates the expected future cash flows from the cash-generating unit and chooses a suitable discount rate in order to
calculate the present value of those cash flows. Management is confident that the carrying amount of the assets will be
recovered in full, even if returns are reduced. This situation will be closely monitored, and adjustments will be made in
future periods if future market activity indicates that such adjustments are appropriate.
Provision for decommissioning costs
Provision for decommissioning costs is recognised as part of the construction-in-progress related to a turbine. The provision
is an amount equal to the directors’ best estimate of the expenditure required to settle the Group’s obligation.
Functional currency
In determining the functional currency of the Company, management has considered the primary economic environment
in which the Company operates. The Company, which is based in Singapore, provides corporate services to all subsidiaries
and supports the Company’s projects in Asia. The Company is involved in and provides support to development projects
globally. The sale prices on costs of developing the projects are subject to local competitive forces and regulations. As
such, the Company has determined that Singapore dollars is the currency that most faithfully represents the economic
effects of the underlying transactions of the Company.
Further to the announcement to move the corporate headquarters from Singapore to Edinburgh, management is in the
process of evaluating whether Singapore dollars should still remain as the Company’s functional currency going forward.
4. REVENUE
2015 2014
S$’000 S$’000
Consulting fees 2,889 5,279
–––––––– ––––––––
Group
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
35
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
5. OTHER GAINS
Group
2015 2014
S$’000 S$’000
Interest income 54 –
Bargain purchase arising from business combination (Note 13(c)) 19,270 –
Gain on disposal of subsidiary (Note 8, 13(d)) 947 –
Re-measurement gain on investment retained in the former subsidiary (Note 8, 13(d)) 947 –
Grant income 5,953 668
Other income 742 461
–––––––– ––––––––
27,913 1,129
–––––––– ––––––––
Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate
applicable.
Bargain purchase arising from business combination refers to negative goodwill arising from the acquisition of MCT
(see Note 13(c)).
6. EMPLOYEE BENEFITS EXPENSES
The average number of employees (including executive directors) was:
2015 2014
Number Number
Average number of employees (including executive directors) 48 35
–––––––– ––––––––
Group
Their aggregate remuneration comprised:
2015 2014
S$’000 S$’000
Wages, salaries and other short term benefits 6,348 4,901
Social security costs 1,009 797
Share-based payment (Note 25) 1,831 938
Other related costs 546 380
–––––––– ––––––––
9,734 7,016
–––––––– ––––––––
Group
7.
FINANCE COSTS
2015 2014
S$’000 S$’000
Interest expense arising from:
– loans from shareholders – 262
– loans from a related party 5 804
– long term loans 1,276 1,175
– others 9 –
Changes in fair value of derivative liability – 594
–––––––– ––––––––
1,290 2,835
–––––––– ––––––––
Group
36
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
JOINT VENTURE
8.
On 3 October 2015, the Company sold a 50% stake in AOC to DP Group Limited for a consideration of S$545,000
(£250,000), to form a partnership to develop a multi-turbine array at the FORCE facility in Bay of Fundy in Nova Scotia,
Canada. Accordingly, the Group has classified its remaining interest in AOC as a joint venture, which is equity-accounted.
The divestment and re-measurement to the fair value of the Group’s remaining 50% interest resulted in a gain of
S$1,894,000, which is reflected as “other gains” in the consolidated statement of profit and loss and other comprehensive
income (Note 5).
The following table summarises the financial information of AOC, based on its financial statements prepared in accordance
to IFRS, modified for fair value adjustments on acquisition.
01/10/2015 to
31/12/2015
S$’000
Loss for the period/Total comprehensive income (206)(1)
––––––––
Non-current assets 2,882
Current assets 76(2)
Non-current liabilities (2,063)
Current liabilities (11)
––––––––
Net assets 884
––––––––
Group’s interest in net assets of investee at the acquisition date 545
Share of total comprehensive income (103)
––––––––
Carrying amount of interest in investee at end of the year 442
––––––––
(1) Includes interest expense of S$4,000.
(2) Includes cash and cash equivalents of S$5,000.
9. TAX CREDIT
Group
2015 2014
S$’000 S$’000
Current tax credit
Over provision for prior year – (11)
–––––––– ––––––––
Domestic income tax is calculated at 17% (2014: 17%) of the estimated assessable loss for the year. Taxation for other
jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
Group
2015 2014
S$’000 S$’000
Reconciliation of effective tax rate
Profit/(loss) before tax 4,259 (16,206)
–––––––– ––––––––
Tax using the Singapore tax rate of 17% (2014: 17%) 724 (2,755)
Effect of tax rates in foreign jurisdictions (105) 369
Non-allowable items – 408
Non-taxable income (3,598) –
Tax effect of deferred tax asset not recognised 2,128 1,978
Over provision for prior year – (11)
–––––––– ––––––––
– (11)
–––––––– ––––––––
At the end of the reporting period, the Group has unutilised tax losses of S$132,547,000 (2014: S$91,548,000) available
for offset against future profits. The amount of the Company’s unutilised tax losses available for offset against future
profits is S$67,378,000 (2014: S$63,349,000). No deferred tax asset has been recognised due to the unpredictability of
future profit streams.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
37
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
10. PROFIT/(LOSS) FOR THE YEAR
The following items have been included in arriving at profit/(loss) for the year:
Group
2015 2014
Note S$’000 S$’000
Depreciation 11 75 37
Amortisation 12 3,226 3,148
Impairment loss on property, plant and equipment 11 3,951 –
Auditors’ remuneration
– Audit and audit-related fees 223 232
Share-based payments 25 1,831 938
Rental expenses 587 338
Net foreign exchange losses 392 132
IPO costs – 139
–––––––– ––––––––
11. PROPERTY, PLANT AND EQUIPMENT
Furniture Computer Project-
Freehold Leasehold fixture and equipment Construction- under-
land improvements equipment and software in-progress construction Total
Group S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Cost:
At 1 January 2014 42 – 113 899 2,904 – 3,958
Additions – 69 15 18 – 28,164 28,266
Reclassifications – – – – 1,031 37,639 38,670
Reimbursed by grants – – – – – (719) (719)
Disposals – – (66) (32) – – (98)
Exchange differences (1) – – – (37) 1,374 1,336
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 41 69 62 885 3,898 66,458 71,413
Additions – – 171 108 4 41,706 41,989
Reimbursed by grants – – – – – (23,119) (23,119)
Exchange differences 1 – – – 49 565 615
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 42 69 233 993 3,951 85,610 90,898
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Accumulated depreciation:
At 1 January 2014 – – 107 844 – – 951
Depreciation for the year – 12 3 22 – – 37
Disposals – – (66) (17) – – (83)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 – 12 44 849 – – 905
Depreciation for the year – 29 29 17 – – 75
Impairment loss – – – – 3,951 – 3,951
Exchange differences – – – 20 – – 20
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 – 41 73 886 3,951 – 4,951
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Carrying amounts:
At 1 January 2014 42 – 6 55 2,904 – 3,007
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 41 57 18 36 3,898 66,458 70,508
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 42 28 160 107 – 85,610 85,947
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
38
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
11. PROPERTY, PLANT AND EQUIPMENT continued
Furniture Computer
fixture and equipment
equipment and software Total
Company S$’000 S$’000 S$’000
Cost:
At 1 January 2014 112 849 961
Additions 16 1 17
Disposals (66) (61) (127)
–––––––– –––––––– ––––––––
At 31 December 2014 62 789 851
Additions – 33 33
–––––––– –––––––– ––––––––
At 31 December 2015 62 822 884
–––––––– –––––––– ––––––––
Accumulated depreciation:
At 1 January 2014 107 821 928
Depreciation for the year 3 19 22
Disposals (66) (61) (127)
–––––––– –––––––– ––––––––
At 31 December 2014 44 779 823
Depreciation for the year 6 12 18
–––––––– –––––––– ––––––––
At 31 December 2015 50 791 841
–––––––– –––––––– ––––––––
Carrying amounts:
At 1 January 2014 5 28 33
–––––––– –––––––– ––––––––
At 31 December 2014 18 10 28
–––––––– –––––––– ––––––––
At 31 December 2015 12 31 43
–––––––– –––––––– ––––––––
(a) Construction-in-progress
Included in construction-in-progress is the Group’s AR1000 turbine. At the reporting date, as a result of the continued
delay in obtaining the regulatory approval by a potential customer, management assessed the probability of the
approval being obtained in the future to be remote and with the increased rate in obsolescence of the AR1000
turbine technology, management concluded that an impairment is required on the carrying amount of the AR1000
turbine. Accordingly, a full impairment loss of S$3,951,000 was recognised in profit or loss.
In 2014, the reclassification refers to decommissioning expenses that were previously capitalised as intangible assets.
(b) Project-under-construction
In September 2014, the Group commenced construction of the MeyGen project and costs incurred in 2015 totalled
S$41,706,000 (2014: S$28,164,000). Included in this amount are capitalised borrowing costs amounting to
S$1,454,000 (2014: S$905,000), which amount corresponds to an average interest cost of borrowings of 5% per
annum.
Reclassification in 2014 represents option fees for a seabed lease and land at Ness of Quoys, Scotland, of
S$37,052,000 and development costs of S$587,000, which were reclassified from other assets and intangibles,
respectively, upon signing of the seabed lease.
Aggregate grants of S$27.7 million (£13.3 million), comprising a S$20.9 million (£10 million) grant from the United
Kingdom’s Department of Energy and Climate Change, and two grants from Scotland’s Highlands and Islands
Enterprise totalling S$6.8 million (£3.3 million), were awarded for MeyGen project in August 2014. Grants received
where the conditions attached to them have been complied with were recorded as a deduction from the carrying
amount of the project-under-construction in accordance with the accounting policy stated in Note 2.
(c)
Security
At 31 December 2015, assets of subsidiaries with carrying amounts of S$85,896,000 (2014: S$33,751,000) were
pledged as security to secure loans (Note 20(e)).
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
39
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
12. INTANGIBLE ASSETS
Global Development
technology Intellectual Development Seabed Tidal project in
licence property costs options data progress Total
Group S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000
Cost:
At 1 January 2014 17,190 1,199 31,541 – 2,908 747 53,585
Additions – – – – – 4,080 4,080
Reclassifications – – (1,618) – – – (1,618)
Exchange differences – – (312) – 116 (55) (251)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 17,190 1,199 29,611 – 3,024 4,772 55,796
Additions – – – – – 2,508 2,508
Acquisition through business combination – 5,423 – 20,734 – – 26,157
Reimbursed by grants – – – – – (3,900) (3,900)
Exchange differences – (72) 133 (273) 39 195 22
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 17,190 6,550 29,744 20,461 3,063 3,575 80,583
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Accumulated amortisation:
At 1 January 2014 3,438 240 5,867 – – – 9,545
Amortisation for the year 1,146 80 1,922 – – – 3,148
Exchange differences – – (91) – – – (91)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 4,584 320 7,698 – – – 12,602
Amortisation for the year 1,146 80 2,000 – – – 3,226
Exchange differences – – 37 – – – 37
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 5,730 400 9,735 – – – 15,865
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Carrying amounts:
At 1 January 2014 13,752 959 25,674 – 2,908 747 44,040
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2014 12,606 879 21,913 – 3,024 4,772 43,194
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 December 2015 11,460 6,150 20,009 20,461 3,063 3,575 64,718
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Intellectual Development
property costs Total
Company S$’000 S$’000 S$’000
Cost:
At 1 January 2014, 31 December 2014 and 31 December 2015 1,199 6,996 8,195
–––––––– –––––––– ––––––––
Accumulated amortisation:
At 1 January 2014 240 1,399 1,639
Amortisation for the year 80 466 546
–––––––– –––––––– ––––––––
At 31 December 2014 320 1,865 2,185
Amortisation for the year 80 466 546
–––––––– –––––––– ––––––––
At 31 December 2015 400 2,331 2,731
–––––––– –––––––– ––––––––
Carrying amounts:
At 1 January 2014 959 5,597 6,556
–––––––– –––––––– ––––––––
At 31 December 2014 879 5,131 6,010
–––––––– –––––––– ––––––––
At 31 December 2015 799 4,665 5,464
–––––––– –––––––– ––––––––
40
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
12. INTANGIBLE ASSETS continued
(a) Global technology licence
This licence grants the Group an exclusive, perpetual, world-wide licence of the rights to use, deploy and manufacture
certain proprietary technology in respect of turbines and related infrastructure used in tidal energy generation,
including the Aquanator technology.
The Group estimated that the technology has a useful life of approximately 15 years.
(b)
Intellectual property
Intellectual property includes technical know-how, seabed options, international patent applications and registered
trademarks of the Company.
During the year, the Group acquired intellectual property and seabed options upon the acquisition of the MCT group
(Note 13). The MCT group is engaged in the design and assembly of tidal turbines and the development of tidal
power generation projects.
The Group estimated that the intellectual property costs have a useful life of approximately 15 years.
(c) Development costs
Development costs include expenditure on planning or designing activities for the production of new or substantially
improved tidal turbine products and processes. The Group estimated that the development costs have a useful life
of approximately 15 years.
In 2014, reclassification refers to project development costs for MeyGen that were transferred to property, plant and
equipment upon signing of the seabed lease (Note 11).
(d) Seabed options
Seabed options relate to options that allow the Group to enter into a 25-year lease to use the seabed for development
and operation of the tidal stream energy projects. The seabed options will commence amortisation when leases are
entered into for these projects.
(e) Tidal data
Tidal data relates to key information on tidal flows which is crucial to the development of the MeyGen project and
little or no obsolescence is expected. The tidal data will be amortised over 15 years, upon commissioning of the
project.
(f) Development project-in-progress
Development project-in-progress relates to ongoing development of the Group’s AR1500 turbine. The Group has
obtained grant funding from the European Commission under the Commercial Energy Array for Widespread
Acceleration of Tidal European Resources grant. The development cost will commence amortisation upon successful
commercialisation of the turbine technology.
13. INVESTMENTS IN SUBSIDIARIES
Company
2015 2014
S$’000 S$’000
Unquoted equity shares, at cost 27,744 18,525
Less: Allowance for impairment
At 1 January – (283)
Realised on transfer to a subsidiary – 283
–––––––– ––––––––
At 31 December 27,744 18,525
–––––––– ––––––––
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
41
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
13. INVESTMENTS IN SUBSIDIARIES continued
Details of the subsidiaries are as follows:
Name of subsidiary
Atlantis Turbines Pte Ltd (previously known as
Atlantis Asset Management Pte Limited)(1)
Atlantis Energy Pte Limited(1)
Atlantis Licensing Pte Limited(1)
ARC Operations (Singapore) Pte Limited(1)
Atlantis Projects Pte Ltd(3)
Atlantis Resources International Pte Limited(1)
Atlantis Resources (Gujarat Tidal) Pte Limited(1)
ARC Operations Pty Limited(4)
Atlantis Operations (Canada) Limited(4)
Current Resources (Cayman) Limited(4)
Atlantis Resources (Scotland) Limited(5)
Name of subsidiary held by
Current Resources (Cayman) Limited
Atlantis Operations (UK) Limited(5)
Name of subsidiary held by
Atlantis Projects Pte Limited
MeyGen Holdings Limited (previously known as
Tidal Power Scotland Holdings Limited)(5)
Proportion of
ownership interest
Country of and voting
incorporation power held
Principal (or registration) 2015 2014
activities and operation % %
Investment holding Singapore 100 100
Dormant Singapore 100 100
Dormant Singapore 100 100
Dormant Singapore 100 100
Investment holding Singapore 100 100
Provision of operational services
to the Group Singapore 100 100
Dormant Singapore 50 50
Provision of operational services Australia 100 100
to the Group
Development of tidal power Canada – 100
generation project
Provision of operational and Cayman Islands 100 100
administrative services to the Group
Provision of project management United Kingdom 100 100
and consulting services
Provision of operational United Kingdom 100 100
services to the Group
Investment holding United Kingdom – 85.87
Tidal Power Scotland Limited(2)
Investment holding United Kingdom 100 –
Name of subsidiary held by
Tidal Power Scotland Limited
MeyGen Holdings Limited (previously known as
Tidal Power Scotland Holdings Limited)(5)
Investment holding United Kingdom 85 –
Islay Holdings Limited(2)
Development of tidal power United Kingdom 100 –
Duncansby Tidal Power Limited(2)
Development of tidal power United Kingdom 100 –
generation project
generation project
Name of subsidiary held by
MeyGen Holdings Limited
MeyGen Limited(5)(6)
Name of subsidiary held by
Islay Holdings Limited
Islay Tidal Power Limited(2)
Development of tidal power United Kingdom 100 100
generation project
Development of tidal power
––––––––––––––––––––––––––––––––––––––––––
generation project United Kingdom 100 –
––––––––––––––––––––––––– –––––––––––––– ––––––– ––––––
42
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
13. INVESTMENTS IN SUBSIDIARIES continued
Name of subsidiary
Name of subsidiary held by
Atlantis Turbines Pte Limited
Marine Current Turbines Limited(5)
Name of subsidiary held by
Marine Current Turbines Limited
Sea Generation Limited(5)
Proportion of
ownership interest
Country of and voting
incorporation power held
Principal (or registration) 2015 2014
activities and operation % %
Development of turbines and projects United Kingdom 100 –
Development of tidal power
generation project United Kingdom 100 –
Sea Generation (Wales) Limited(5)
Development of tidal power
generation project United Kingdom 100 –
Sea Generation (Kyle Rhea) Limited(5)
Development of tidal power
Sea Generation (Brough Ness) Limited(5)
Development of tidal power
––––––––––––––––––––––––––––––––––––––––––
(1) Not required to be audited as the subsidiaries are dormant.
generation project United Kingdom 100 –
––––––––––––––––––––––––– –––––––––––––– ––––––– ––––––
generation project United Kingdom 100 –
(2) Not required to be audited as the subsidiary is newly incorporated.
(3) Audited by KPMG LLP, Singapore.
(4) Not required to be audited by law in its country of incorporation.
(5) Audited by KPMG LLP, United Kingdom.
(6) As at 31 December 2015, shares in MeyGen Limited are pledged as security to secure bank loans (see Note 20).
(a) Share-based payments
During the financial year, share-based payments granted by the Company have resulted in an increase in the deemed
investment in Current Resources (Cayman) Limited and Atlantis Resources (Scotland) Limited ("ARSL") amounting
to S$465,000 (£221,000) (2014: S$234,000 (£113,000)) and S$50,000 (£24,000) (2014: S$35,000 (£17,000))
respectively, and correspondingly increased the investment in Current Resources (Cayman) Limited and ARSL to
S$18,493,000 (2014: S$18,000,000) and S$80,000 (2014: S$30,000) respectively.
(b) Dilution of interest in subsidiary
On 12 February 2014, the existing 10% of MeyGen Limited (“MeyGen”) held directly by the Company was
transferred to Atlantis Projects Pte Ltd (“APPL”), making MeyGen a wholly owned subsidiary of APPL. Subsequently,
in July 2014, as part of the MeyGen project financing requirements, MeyGen Holdings Limited (“MGHL”) (previously
known as Tidal Power Scotland Holdings Limited) was incorporated as an intermediate holding company, wholly
owned by APPL. On 12 August 2014, 100% of the shares in MeyGen were acquired by MGHL from APPL for £50
million. MGHL’s shares in MeyGen are pledged to the MeyGen project finance lenders. On 20 November 2015, TPSL
was incorporated, and APPL's shareholdings in MGHL were transferred to TPSL at the subscription price of the shares.
Under the terms of a Subscription Agreement, by 31 December 2015, Scottish Enterprise, as administrator of the
Renewable Energy Investment Fund, had made an equity investment of £10.8 million (S$22.4 million) in MGHL,
while the Company, via APPL, had subscribed for a total of £9.7 million (S$20.1 million) in new shares of MGHL. As
a result, at 31 December 2015, Scottish Enterprise had a 15% (2014: 14.13%) shareholding in MGHL, with APPL
retaining the remaining shareholding of 85% (2014: 85.87%) via TPSL. The Group recognised S$469,000
(2014: S$11,448,000) in equity, which represents the difference between the consideration received from the Scottish
Enterprise and net assets attributable to Scottish Enterprise.
The following table summarises the information relating to Group’s material non-controlling interest in MeyGen,
based on its financial statements prepared in accordance with IFRS, modified for fair value adjustments on acquisition
and differences in the Group’s accounting policies.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
43
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
13. INVESTMENTS IN SUBSIDIARIES continued
2015 2014
S$’000 S$’000
NCI percentage 15% 14.13%
Non-current assets 93,547 69,733
Current assets 23,191 26,181
Non-current liabilities (39,873) (24,353)
Current liabilities (11,812) (10,503)
Net assets 65,053 61,058
Net assets attributable to NCI 9,758 8,628
Cash flows from investing activities (31,704) (24,201)
Cash flows from financing activities 26,227 41,248
–––––––– ––––––––
Net (decrease)/increase in cash and cash equivalents (5,477) 17,047
–––––––– ––––––––
2015 2014
S$’000 S$’000
Loss for the year 1,027 –
Other comprehensive income 867 –
–––––––– ––––––––
Total comprehensive income 1,894 –
–––––––– ––––––––
Attributable to NCI:
Loss for the year 154 –
Other comprehensive income 130 –
–––––––– ––––––––
Total comprehensive income 284 –
–––––––– ––––––––
There is no profit/loss attributable to non-controlling interest in 2014.
(c) Acquisition of subsidiary in 2015
On 1 July 2015, Atlantis Turbines Pte Ltd, a wholly owned subsidiary of the Company, with the Company as guarantor,
pursuant to a sale and purchase agreement dated 28 April 2015, successfully completed the acquisition of the whole
of the issued share capital of MCT, a company incorporated in United Kingdom, from Siemens AG (“Siemens”).
MCT and its group of companies are engaged in the design, assembly and sale of tidal turbines, and the development
of tidal power generation projects. The acquisition of MCT allows Atlantis to broaden its turbines offering to include
lighter weight turbines suitable for lower intensity sites and floating applications, as well as providing a pipeline of
six tidal power generation development projects with a combined potential capacity of almost 200 MW.
Consideration for the purchase was the issuance by the Company of new shares to Siemens, such that immediately
following the issuance of such shares, Siemens became a 9.99% shareholder of the Company. On the basis of the
Company’s share price at market close on the date of completion of the acquisition, the fair value of the shares
issued was S$8,895,000 (£4,212,420).
The acquisition-related costs amounting to S$572,000 were excluded from the consideration transferred and have
been recognised as an expense in profit and loss in 2015 within the “other operating expenses”.
The acquired business contributed losses and revenue amounting to S$1,362,000 and S$Nil respectively to the
Group’s results for the period from 1 July 2015 to 31 December 2015. Had MCT been consolidated from 1 January
2015, the Group’s consolidated revenue and consolidated loss for the year ended 31 December 2015 would have
been S$Nil and S$6,497,595 respectively.
A purchase price allocation exercise was conducted to determine the valuation of the acquisition. The following
summarises the identifiable assets acquired and liabilities at the acquisition date.
44
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
13. INVESTMENTS IN SUBSIDIARIES continued
Identifiable assets acquired and liabilities assumed at 1 July 2015
Acquiree’s carrying
amount before
business Fair value
combination adjustments Fair value
S$’000 S$’000 S$’000
Non-current assets
Intangible assets – 26,157 26,157
–––––––– –––––––– ––––––––
Total non-current assets – 26,157 26,157
–––––––– –––––––– ––––––––
Current assets
Cash and cash equivalents 117 – 117
Other receivables 5,702 – 5,702
–––––––– –––––––– ––––––––
Total current assets 5,819 – 5,819
–––––––– –––––––– ––––––––
Current liabilities
Trade and other payables (633) – (633)
Provision for decommissioning (3,178) – (3,178)
–––––––– –––––––– ––––––––
Total current liabilities (3,811) – (3,811)
–––––––– –––––––– ––––––––
Total identifiable net assets 2,008 26,157 28,165
–––––––– –––––––– ––––––––
Intangible assets
Intangible assets refer to the MCT technology and seabed options.
MCT technology
The fair value was determined after taking into account the potential sales revenue arising from the sale of turbines
and the associated costs of the turbines discounted at a rate of 20%, and applying a probability factor of 33% to
reflect the probability of the technology reaching commercialisation phase.
Seabed options
Seabed options allow MCT the right to enter into a 25-year lease for different projects. The fair value of the options,
amounting to S$20,734,000 (£9,788,000), takes into account the future cash flows based on the following
assumptions:
•
•
•
•
•
•
operating revenues are a function of the number of turbines installed, the energy generated and price received
for each MWh of electricity exported to the grid;
debt financing is projected based on funding a proportion of the capital requirements of the project with an
interest expense of LIBOR forward rates plus a margin;
capital expenditure relates to the purchase of the turbines, grid connection, seabed lease, construction, cabling
power conditioning, installation and onshore works;
discount rate of 25%;
probability factors of 20% to 33% are applied to reflect the probability of the project reaching commercialisation
phase;
the fair value of the seabed option is estimated based on the discounted cash flows of a notional start-up
(greenfield) business with no assets but the seabed option.
Deferred tax assets and deferred tax liability
Tax losses amounting to S$55,278,000 (£26,096,000) were available for utilisation against future taxable income at
the acquisition date. Deferred tax assets recognised were capped at the amount of deferred tax liability recognised.
Deferred tax liability is calculated based on the fair value adjustments to the seabed options and MCT technology at
the local statutory tax rate.
As the deferred tax assets and deferred tax liability relate to the same jurisdiction, deferred tax assets can be offset
against the deferred tax liability.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
45
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
13. INVESTMENTS IN SUBSIDIARIES continued
Bargain purchase arising on business combination on 1 July 2015
The bargain purchase was recognised as a result of the business combination as follows:
S$’000
Total consideration transferred 8,895
Fair value of identifiable net assets (28,165)
––––––––
Bargain purchase (19,270)
––––––––
The bargain purchase arising from the acquisition of MCT is attributable mainly to Siemen’s plan to reduce its direct
exposure to the tidal energy industry as a project developer. It has been assumed that none of the bargain purchase
recognised will be assessable for tax purposes.
Net cashflow on acquisition of subsidiary
Net cashflow on acquisition of subsidiary is arrived at as follows:
S$’000
Cash and cash equivalents acquired 117
Total consideration transferred in cash –
––––––––
Net cash inflow 117
––––––––
If new information obtained within one year from the date of acquisition about facts and circumstances that existed
at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at
the date of acquisition, then the accounting for the acquisition will be revised.
(d) Divestment of interest in subsidiary and formation of joint venture in 2015
In 2015, the Company sold a 50% stake in AOC to a subsidiary of DP Group Limited for S$545,000 (£250,000),
and AOC became a joint venture of the Group.
Divestment of interest in subsidiary
S$’000
Total consideration received in cash 545
50% interest in AOC’s net liabilities 402
––––––––
Gain on divestment of 50% interest in AOC 947
––––––––
Net cashflow on divestment of subsidiary
Net cashflow on divestment of subsidiary is arrived at as follows:
S$’000
Cash and cash equivalents disposed –(1)
Total consideration received 545
––––––––
545
––––––––
(1) denotes amount less than S$1,000.
Formation of joint venture
S$’000
Group’s 50% interest in AOC’s net liabilities before remeasurement to fair value (402)
Re-measurement gain on investment retained in AOC 947
––––––––
Group’s 50% interest in AOC on date of formation of joint venture, at fair value 545
––––––––
The Group’s 50% interest in AOC on date of formation of joint venture was based on the selling price of the 50%
stake in AOC, which represents the fair value of AOC on that date.
46
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
14. LOANS TO SUBSIDIARIES
Company
2015 2014
S$’000 S$’000
Loans to subsidiaries:
– Interest bearing (a) 1,922 1,789
– Non-interest bearing (b) 23,151 21,002
–––––––– ––––––––
25,073 22,791
–––––––– ––––––––
(a)
(b)
The Company has provided a loan to MeyGen Limited which is interest-bearing with an interest rate of 12-month
LIBOR plus 5% per annum, unsecured and repayable in February 2030.
In 2014, the Company extended a loan to Atlantis Projects Pte Ltd, which is interest-free, unsecured and with no
fixed terms of repayment.
As these balances are, in substance, part of the Company’s net investments in the subsidiaries, they are stated at cost less
impairment losses if any.
15. LOAN TO JOINT VENTURE
The loan to joint venture bears interest at a rate of 12% per annum, unsecured and settlement is neither planned nor
likely to occur in the foreseeable future. This loan is, in substance, part of the Group’s and the Company’s net investment
in the joint venture, and is stated at cost less impairment loss, if any.
16. TRADE AND OTHER RECEIVABLES
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Trade receivables 26 – – –
Deposits 3,303 176 15 16
Grant receivable 5,050 – – –
Value added tax recoverable 2,509 2,275 11 56
Other receivables 614 28 – –
–––––––– –––––––– –––––––– ––––––––
Loans and receivables 11,502 2,479 26 72
Non-trade receivables due from subsidiaries – – 24,054 28,051
Less:
Allowance for impairment – – (885) (3,449)
Prepayments 1,470 1,240 136 167
–––––––– –––––––– –––––––– ––––––––
12,972 3,719 23,331 24,841
–––––––– –––––––– –––––––– ––––––––
Non-current – – 23,168 19,826
Current 12,972 3,719 163 5,015
–––––––– –––––––– –––––––– ––––––––
12,972 3,719 23,331 24,841
–––––––– –––––––– –––––––– ––––––––
The non-current receivables due from subsidiaries are unsecured, interest-free, and settlement is neither planned nor likely
to occur in the foreseeable future. As these balances are, in substance, part of the Company’s net investments in the
subsidiaries, they are stated at cost less impairment losses, if any.
At the end of the reporting period, the Company made provision for impairment of S$885,000 (2014: S$3,449,000) in
relation to balances receivable from inactive subsidiaries as recovery of the amounts due is not considered probable. No
provision for impairment has been made for the remaining receivable balance as the directors are of the view that these
receivables are recoverable.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
47
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
16. TRADE AND OTHER RECEIVABLES continued
The movements in the allowance for impairment in respect of trade and other receivables during the year were as follows:
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
At the beginning of the year – – 3,449 –
Impairment loss recognised – – 885 3,449
Amounts written off – – (3,449) –
–––––––– –––––––– –––––––– ––––––––
At the end of the year – – 885 3,449
–––––––– –––––––– –––––––– ––––––––
The Group’s and the Company’s exposure to credit and currency risks are as set out in Note 27.
17. CASH AND CASH EQUIVALENTS
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Cash at bank 21,160 23,039 321 382
Fixed deposits 4,360 6,158 – –
Cash on hand 125 50 1 10
–––––––– –––––––– –––––––– ––––––––
Cash and cash equivalents in the statements of financial position 25,645 29,247 322 392
Less: Encumbered deposits (4,360) (6,158) – –
–––––––– –––––––– –––––––– ––––––––
Cash and cash equivalents in the statement of cash flows 21,285 23,089 322 392
–––––––– –––––––– –––––––– ––––––––
The encumbered deposits served as collateral on behalf of MeyGen Limited, in support of the provision of bank guarantees
and standby letters of credit as required under the terms of MeyGen’s seabed lease and to secure the MeyGen project’s
electricity transmission capacity (Note 31). The Group’s exposure to interest rate risks is described in Note 27.
18. TRADE AND OTHER PAYABLES
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Trade payables 7,921 9,894 377 1,245
Other payables 549 127 57 56
Accruals 8,517 4,065 776 726
Non-trade payables due to subsidiaries – – 2,323 2,158
–––––––– –––––––– –––––––– ––––––––
Other financial liabilities 16,987 14,086 3,533 4,185
Advanced receipts 734 4,476 – –
–––––––– –––––––– –––––––– ––––––––
17,721 18,562 3,533 4,185
–––––––– –––––––– –––––––– ––––––––
The non-trade balances due to subsidiaries are unsecured, interest-free and repayable on demand.
Atlantis Operations (UK) Limited (“AOU”), a wholly owned subsidiary of the Company, entered into a grant agreement
with the European Commission for the award of up to €7,294,905 (S$12,686,000) in grant funding towards the design,
build, installation and operation of three AR1500 turbines at the MeyGen site (Note 12(f)). Advanced receipts include
drawdowns of €347,586 (S$535,000) (2014: €2,320,895 (S$3,721,000) of this grant.
The Group’s and the Company’s exposure to currency and liquidity risks related to trade and other payables are described
in Note 27.
48
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
19. PROVISIONS
Group
Provision for
Warranty decommissioning
provision costs Other provision Total
S$‘000 S$‘000 S$‘000 S$‘000
At 1 January 2014 73 1,031 – 1,104
Provision written back during the year – (309) – (309)
–––––––– –––––––– –––––––– ––––––––
At 31 December 2014 73 722 – 795
Assumed in business combination – 3,178 – 3,178
Provision made during the year – 303 13 316
Exchange difference – (32) – (32)
–––––––– –––––––– –––––––– ––––––––
At 31 December 2015 73 4,171 13 4,257
–––––––– –––––––– –––––––– ––––––––
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Non-current 303 – – –
Current 3,954 795 – –
–––––––– –––––––– –––––––– ––––––––
4,257 795 – –
–––––––– –––––––– –––––––– ––––––––
Group
Company
(a) Warranty provision
The provision for warranty claims represents the present value of the directors’ best estimate of the future outflow
of economic benefits that will be required in relation to equipment sales made during the year. The estimate has
been made on the basis of quotes obtained from external contractors.
(b) Provision for decommissioning costs
The provision for decommissioning costs represents the present value of the directors’ best estimate of direct costs
that may be incurred to remove the turbine foundation from the seabed. Provisions arising from acquisition of
subsidiaries relates to the removal of the turbine for Sea Generation Limited's project at Strangford Lough, Northern
Ireland and associated site rectification costs. Provision of S$303,000 (£150,000) was made during the year for the
removal of AR1500 for MeyGen Project located in the Inner Sound of the Pentland Firth.
Provision made in 2014 relates to the removal of the AR1000 turbine foundation from the Group’s testing berth at
the European Marine Energy Centre in Scotland and making good the site. The anticipated expenditure for the
decommissioning of the foundation, net of its scrap value, is S$734,000 (£350,000) (2014: S$722,000 (£350,000)).
20. LOANS AND BORROWINGS
The Group’s and the Company’s total loans and borrowings are as follows:
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Current loans and borrowings
Secured bridging loan from non-controlling interest (a) 4,448 – – –
Financial guarantees – – 437 494
–––––––– –––––––– –––––––– ––––––––
4,448 – 437 494
–––––––– –––––––– –––––––– ––––––––
Non-current loans and borrowings
Loan from a subsidiary (b) – – 690 650
Loans from a related party (c) 7,953 7,376 – –
Long term loan (d) 7,866 7,293 – –
Secured long term loans (e) 20,660 6,706 – –
–––––––– –––––––– –––––––– ––––––––
36,479 21,375 690 650
–––––––– –––––––– –––––––– ––––––––
Total loans and borrowings 40,927 21,375 1,127 1,144
–––––––– –––––––– –––––––– ––––––––
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
49
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
20. LOANS AND BORROWINGS continued
(a) Secured bridging loan from non-controlling interests
Scottish Enterprise, as the administrator of the Renewable Energy Investment Fund, extended a £2 million bridging
loan to one of the Company’s wholly owned subsidiaries. The drawdown of the loan is conditional upon the
completion of the acquisition of MCT, and with the Company as a guarantor.
The loan is denominated in British pounds, with a fixed interest rate of 10% per annum, is secured on the assets of
MCT, AOU and ARSL and is repayable in 2016, together with a repayment premium computed at the rate of 15%
per annum on the principal amount of the outstanding loan. At the end of the reporting period, the carrying value
of the loan approximates its fair value.
(b) Loan from a subsidiary
The loan from a subsidiary was denominated in British pounds, was interest-bearing with an interest rate of 5.0%
per annum, unsecured and is repayable in February 2021. The fair value of the loan at the end of the reporting
period was approximately S$700,000 (2014: S$427,000).
(c)
Loans from a related party
Loans from Morgan Stanley Capital Group Inc. (“MSCGI”) are treated as a related party loan, given MSCGI is a
related party of Morgan Stanley Renewables, a shareholder of the Company.
The loans from MSCGI are denominated in British pounds, with floating interest rates in the range 5.0% to 6.06%
per annum, are unsecured and are repayable in February 2021. At the end of the reporting period, the carrying value
of the loan approximates its fair value.
(d) Long term loan
The loan is denominated in British pounds, with a floating rate interest in the range 5.90% to 5.92% per annum, is
unsecured and is repayable in February 2021. At the end of the reporting period, the carrying value of the loan
approximates its fair value.
(e) Secured long term loans
Atlantis Resources (Scotland) Limited
In February 2014, ARSL, a wholly owned subsidiary of the Company, entered into a loan agreement of £2 million
(S$4.1 million) with Scottish Enterprise (as administrator of the Renewable Energy Investment Fund) as the lender
and the Company as a guarantor. The loan of £2 million (S$4.1 million) is being used to support the development
of ARSL’s engineering hub in Scotland, and was used to support the development of the initial phase of the MeyGen
project. The loan is due for repayment in 2019, five years from drawdown, in a single bullet repayment. The interest
rate for the loan is 12.0% per annum, with interest capitalising on 30 June and 31 December of each year and
repayable upon maturity of the loan.
Subsequently, on 28 April 2015, ARSL, with the Company as guarantor, entered into a loan agreement with GEG
(Holdings) Ltd to borrow a £0.5 million (S$1,046,000) loan. The loan has a three-year term and is repayable as a
single bullet repayment at the end of the term, an with interest rate of 4.5% per annum capitalising and not payable
until maturity of the loan. These loans are secured on the assets of MCT, AOU and ARSL.
MeyGen Limited
In August 2014, as part of the Phase 1A MeyGen project financing, Scottish Enterprise (as administrator of the
Renewable Energy Investment Fund) extended a loan of £7.5 million (S$15.5 million) to MeyGen to finance the
construction of the project. The Crown Estate Commissioners committed an investment of £9.8 million (S$20.2
million) to MeyGen, also to finance the construction of the Phase 1A project, and which will be serviced through the
payment of “enhanced rent”, with an exit payment at or before the date 10 years from commissioning of Phase 1A
of the project.
The Scottish Enterprise loan and the Crown Estate investment to MeyGen are denominated in British pounds, and
are repayable in the period from 2017 to 2027. The effective interest rates on these loans are in the range of 7% to
7.8% per annum. As at 31 December 2015, the total loans drawn down were S$14,571,000 (£6,971,000) (2014:
S$2,300,000 (£1,465,000)).
50
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
20. LOANS AND BORROWINGS continued
The Group’s secured long term loans are secured by way of fixed and floating charges over the assets of subsidiaries.
There was no breach of any loan covenants during the year.
At the reporting date, the Company does not consider it probable that a claim will be made against the Company
under the guarantees as described above.
The Group’s and the Company’s exposures to interest rate, foreign currency and liquidity risks are described in
Note 27.
21. DEFERRED TAX LIABILITIES
Movements in deferred tax of the Group are as follows:
2015 2014
S$’000 S$’000
At 1 January 7,905 7,602
Exchange differences 101 303
–––––––– ––––––––
At 31 December 8,006 7,905
–––––––– ––––––––
The deferred tax liability was recognised due to the fair valuation of the seabed option and tidal data upon acquisition of
MeyGen in 2013.
Group
22. SHARE CAPITAL
Group and Company
Number of Number of
Number of Number of non-voting non-voting
ordinary shares ordinary preference preference
with no par value “A” shares “B” shares “C” shares Total
‘000 ‘000 ‘000 ‘000 S$’000
2015
Issued and paid up during the year:
At beginning of the year 89,204 – – – 185,500
Issued in business combination 9,912 – – – 8,895
Public offerings issued for cash 5,952 – – – 5,541
Transaction costs incurred in relation to share issuance – – – – (277)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At end of the year 105,068 – – – 199,659
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
2014
Issued and paid up during the year:
At beginning of the year – 1,258,217 27,250 59,524 114,906
Conversion into ordinary “A” shares – 86,774 (27,250) (59,524) –
Consolidation of shares of 1 ordinary share for every
30 ordinary “A” shares 44,833 (1,344,991) – – –
Public offerings issued for cash 25,266 – – – 35,558
Convertible loan notes converted into shares 19,105 – – – 37,836
Transaction costs incurred in relation to share issuance – – – – (2,800)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At end of year 89,204 – – – 185,500
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Prior to its initial public offering and admission of the Company’s shares to trading on AIM in 2014, the Company had
one class of ordinary “A” shares, which had no par value and carried no right to fixed income, and two classes of
preference shares. Holders of class “B” and “C” non-voting preference shares were not entitled to any voting rights and
were entitled to liquidation distributions not exceeding S$2 billion and dividend payments not exceeding S$100 million.
The terms of the class “B” and “C” non-voting preference shares provided that they would convert to class “A” ordinary
shares upon an initial public offering of ordinary shares of the Company, a trade sale or change in control of the Company.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
51
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
22. SHARE CAPITAL continued
On 20 February 2014, the Company’s entire share capital was admitted to trading on AIM, a market of the London Stock
Exchange. At the date of admission, the Company’s class “B” and “C” non-voting preference shares in the capital of the
Company were converted into class “A” ordinary shares. Furthermore, the Company’s class “A” ordinary shares were
consolidated on the basis of one new ordinary share for 30 class “A” ordinary shares held by such person on admission.
After conversion of the convertible loans to shares and the public offering of shares for cash, the Company had a total of
76,704,000 shares issued. All issued shares are fully paid, with no par value.
On 31 October 2014, the Company made an additional placing of 12.5 million shares at 40 pence raising an amount of
S$10,300,000 (£5 million).
On 1 July 2015, the Company successfully completed the acquisition of MCT from Siemens. Consideration transferred for
the acquisition was the issuance of 9,911,577 shares to Siemens. Based on the Company’s share price at the market close
on the date of completion of the acquisition, fair value of the shares issued was S$8,895,000 (£4,212,420).
On 25 August 2015, the Company completed the placing of 5,952,380 ordinary shares at 42 pence per share, raising a gross
amount of S$5.3 million (£2.5 million), such that following this placement, the Company had a total of 105,068,157 issued
shares.
During the year, S$277,000 of expenses (2014: S$2,800,000) were incurred incidental to the issuance of shares.
23. CAPITAL RESERVE
The capital reserve consists of the difference between the carrying value of net assets transferred to and the consideration
received from the non-controlling interest.
24. TRANSLATION RESERVE
Translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
25. SHARE OPTIONS
Option fees represents call option fees paid up-front by the call option holders on the options over ordinary “A” shares
which have since lapsed.
The share option reserve represents the equity-settled share options granted to employees. The reserve is made up of the
cumulative value of services received from employees recorded on grant date. The expense for services received will be
recognised over the vesting period.
On 20 February 2014, upon admission of the Company’s shares to AIM, the remaining 39,266,000 options over “B” shares,
exercisable at prices between S$0.1553 and S$0.20 per share, converted to options for class “A” ordinary shares and
were then consolidated, in a ratio of 30 to 1, and became options over a total of 1,308,866 ordinary shares at prices
between S$4.659 and S$6.000 per share. The CSOP was terminated upon admission, without prejudice to the
rights conferred by the outstanding options. The outstanding options are fully vested and exercisable. 1,208,866 and
100,000 share options lapsed in June 2014 and June 2015 respectively.
Under the terms of the Company’s LTIP approved on 11 December 2013, a total of 4,255,321 options at the initial public
offering price were granted to seven of its directors and other members of the Group’s senior management team, of
which 106,383 have lapsed during the year.
The options outstanding at 31 December 2015 have a weighted average contractual life of 3.14 years (2014: 4.06 years).
No options were exercised in 2014 and 2015.
52
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
25. SHARE OPTIONS continued
Details of the share options outstanding during the year are as follows:
Weighted
Number of average
share options exercise price
Group and Company ‘000 S$
2015
Outstanding at the beginning of the year 4,355 1.940
Lapsed during the year (206) 1.940
–––––––– ––––––––
Outstanding at the end of the year 4,149 1.940
–––––––– ––––––––
Exercisable at the end of the year 4,149 1.940
–––––––– ––––––––
As at 31 December 2015, the number of share options and their expiration date are as follows:
Number of options Expiry on
4,149,000 20 February 2019
Ordinary share options
Preference “B” share options
Weighted Weighted
Number of average Number of average
share options exercise price share options exercise price
Group and Company ‘000 S$ ‘000 S$
2014
Outstanding at the beginning of the year – – 39,266 0.195
Conversion into ordinary shares options 1,309 5.553 (39,266) 0.195
Lapsed during the year (1,209) 5.748 – –
Issued during the year 4,255 1.940 – –
–––––––– ––––––––
Outstanding at the end of the year 4,355 –
–––––––– ––––––––
Exercisable at the end of the year 4,355 1.940 –
–––––––– ––––––––
As at 31 December 2014, the number of share options and their expiration dates are as follows:
Number of options Expiry on
66,667 4 June 2015
33,333 9 June 2015
4,255,000 20 February 2019
The fair value for the above share options were calculated using the Black-Scholes pricing model. The inputs into the
model for share options granted during the period are as follows:
Share options
granted
20 February
2014
Fair value of options on date of grant S$0.206
Date of grant 20 February 2014
Share price 0.51
Exercise price 0.51
Expected volatility 56.94%
Expected life 3 years
Risk free rate 2.6%
Expected dividend yield 0%
–––––––––––––––
Expected volatility was determined by calculating the historical volatility of comparable companies in the same industry.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non
transferability, exercise restrictions and behavioural considerations.
The Group and the Company recognised total expenses of S$1,831,000 and S$1,319,000 respectively (2014: S$938,000
and S$710,000, respectively), related to equity-settled share-based payment transactions during the year and this is
included as part of employee benefits expense.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
53
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
26. EARNINGS/(LOSS) PER SHARE
The calculation of earnings/(loss) per share is based on the profit/(loss) after tax and on the weighted average number of
ordinary shares in issue during each year.
Profit/(loss)
after tax
Weighted average
number of shares
Earnings/(loss)
per share
2015 2014 2015 2014 2015 2014
S$‘000 S$‘000 ‘000 ‘000 S$ S$
Basic and diluted 4,259 (16,195) 95,827 74,455 0.04 (0.22)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Group
2015 2014
’000 S$’000
Issued ordinary shares at 1 January 89,204 –
Effect of consolidation of shares – 44,833
Effect of conversion of convertible notes – 16,481
Effect of shares issued related to business combination 4,454 –
Public offerings and issued for cash 2,169 13,141
–––––––– ––––––––
Weighted average number of shares at end of the year 95,827 74,455
–––––––– ––––––––
Share options were excluded from the diluted weighted-average number of ordinary shares calculation as their effect
would have been anti-dilutive.
The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was
based on quoted market prices for the period during which the options were outstanding.
27. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT
The Group is exposed to various financial risks arising in the normal course of business. It has adopted financial risk
management policies and utilised a variety of techniques to manage its exposure to these risks.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss
to the Group.
There are no significant concentrations of credit risk.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset as at the end of
the reporting period.
Trade and other receivables
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Trade receivables 26 – – –
Other receivables due from subsidiaries – – – 5,015
Deposits 3,303 176 15 16
Grant receivable 5,050 – – –
Value added tax recoverable 2,509 2,275 11 56
Other receivable 614 28 – –
–––––––– –––––––– –––––––– ––––––––
11,502 2,479 26 5,087
–––––––– –––––––– –––––––– ––––––––
All the balances are not past due.
Cash and cash equivalents
Cash at bank is held with creditworthy financial institutions which are licensed banks in the countries in which the
Group operates.
Guarantees
At 31 December 2015, the Company issued guarantees to a lender in respect of credit facilities granted to two
subsidiaries (See Note 31).
54
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
27. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT continued
(b) Liquidity risk
The Group actively manages its operating cash flows and the availability of funding through maintaining sufficient
cash and cash equivalents to finance its activities.
Current financial liabilities in 2014 and 2015 are repayable on demand or due within one year from the end of the
reporting period. Other than certain loans, the remaining financial liabilities are non-interest bearing.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the end of
the reporting period based on the contractual undiscounted repayment obligations.
Contractual cash flows
Group
2015
Financial liabilities
Trade and other payables
Bridging loan from
non-controlling interests
Loans from a related party
Long term loan
Secured long term loans
2014
Financial liabilities
Trade and other payables
Loans from a related party
Long term loan
Secured long term loans
Company
2015
Financial liabilities
Trade and other payables
Financial guarantees
Loan from a subsidiary
2014
Financial liabilities
Trade and other payables
Financial guarantees
Loan from a subsidiary
Note
Carrying amount Total One year or less Two to five years Over five years
S$’000 S$’000 S$’000 S$’000 S$’000
18
20
20
20
20
18
20
20
20
18
20
20
18
20
20
16,987 16,987 16,987 – –
4,448 5,238 5,238 – –
7,953 11,752 – – 11,752
7,866 11,638 – 11,638 –
20,660 38,872 – 8,691 30,181
–––––––– –––––––– –––––––– –––––––– ––––––––
57,914 84,487 22,225 20,329 41,933
–––––––– –––––––– –––––––– –––––––– ––––––––
14,086 14,086 14,086 – –
7,376 11,544 – – 11,544
7,293 11,432 – – 11,432
6,706 10,630 – 7,540 3,090
–––––––– –––––––– –––––––– –––––––– ––––––––
35,461 47,692 14,086 7,540 26,066
–––––––– –––––––– –––––––– –––––––– ––––––––
3,533 3,533 3,533 – –
437 12,542 12,542 – –
690 690 – – 690
–––––––– –––––––– –––––––– –––––––– ––––––––
4,660 16,765 16,075 – 690
–––––––– –––––––– –––––––– –––––––– ––––––––
4,185 4,185 4,185 – –
494 8,256 8,256 – –
650 844 – – 844
–––––––– –––––––– –––––––– –––––––– ––––––––
5,329 13,285 12,441 – 844
–––––––– –––––––– –––––––– –––––––– ––––––––
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
55
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
27. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT continued
(c) Market risk
Currency risk
The Group transacts business in various foreign currencies, including the Australian dollar, United States dollar, British
pounds and Euros, and is hence exposed to foreign exchange risk.
At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated
in currencies other than the respective Group entities’ functional currencies are as follows:
Liabilities
Assets
Liabilities
Assets
Group
Company
2015 2014 2015 2014 2015 2014 2015 2014
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Australian dollars 27 179 72 11 30 179 18 5,047
British pounds 1,118 1,062 197 61 534 980 25,246 37,994
Euros – 142 124 41 – – 2 206
United States dollars 1,114 823 4 5 4 823 6 2,429
Canadian dollars – – 1,902 – – – 1,902 –
–––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
Foreign currency sensitivity
The sensitivity rate used when reporting foreign currency risk to key management personnel is 10%, which is the
sensitivity rate which represents management’s assessment of the likely potential change in foreign exchange rates.
If the relevant foreign currencies were to strengthen by 10% against the functional currency of each Group entity,
profit and loss (before tax) and equity will increase (decrease) by:
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Australian dollars
British pounds
Euros
United States dollars
Canadian dollars
Group
Equity – – – – – – – – 190 –
Profit or (loss) 5 (17) (92) (100) 12 (10) (111) (82) – –
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
Company
Profit or (loss) (1) 487 2,471 3,701 – 21 – 161 190 –
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
If the relevant foreign currency weakens by 10% against the functional currency of each Group entity, the effects
on profit and loss and equity will be vice versa.
Interest rate risk
Interest rate risk arises from the potential change in interest rates that may have an adverse effect on the Group in
the current reporting year or in future years.
The Group’s exposure to interest rate risk is limited to the effects of fluctuation in bank interest rate on cash and
cash equivalents as well as LIBOR rates on certain loans and borrowings.
For variable rate financial instruments, a change of 100 basis points (bps) (2014: 100bps) in interest rate with all
other variables held constant would increase/decrease profit/loss before tax by S$7,000 (2014: S$54,000).
Equity price risk
The Group is not exposed to equity price risks as it does not hold any quoted equity investments.
Capital management policies and objectives
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balances.
The capital structure of the Group and the Company consists of equity attributable to owners of the parent and
loans and borrowings amounting to S$151,885,000 (2014: S$110,778,000) and S$80,347,000 (2014:
S$68,402,000), respectively.
There are no changes in the Group’s approach to capital management during the financial year. The Company is not
subject to externally imposed capital requirements. Except for one subsidiary which is subject to loan restrictions and
dividend distributions, none of the other subsidiaries are subject to externally imposed capital requirements.
56
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
27. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT continued
(d) Accounting classifications and fair values
Except as detailed in the following table, the directors consider that the carrying amounts of the financial assets and
financial liabilities recognised in the consolidated financial statements approximate their fair values.
Carrying Value Fair Value Carrying Value Fair Value
Group Note S$’000 S$’000 S$’000 S$’000
Financial liabilities
Secured long term loans 20 20,660 27,126 6,706 8,188
–––––––– –––––––– –––––––– ––––––––
2015
2014
Company
Financial liabilities
Loan from a subsidiary 20 690 700 650 427
–––––––– –––––––– –––––––– ––––––––
Fair value hierarchy
The table below analyses financial instruments not carried at fair value but for which fair values are disclosed, by
valuation method. The different levels have been defined as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
Group S$’000 S$’000 S$’000 S$’000
2015
Financial liabilities
Secured bridging loan from non-controlling interest – – 4,448 4,448
Loans from a related party – – 7,953 7,953
Long term loan – – 7,866 7,866
Secured long term loans – – 27,126 27,126
–––––––– –––––––– –––––––– ––––––––
– – 47,393 47,393
–––––––– –––––––– –––––––– ––––––––
2014
Financial liabilities
Loans from a related party – – 7,376 7,376
Long term loan – – 7,293 7,293
Secured long term loans – – 8,188 8,188
–––––––– –––––––– –––––––– ––––––––
– – 22,857 22,857
–––––––– –––––––– –––––––– ––––––––
Level 1 Level 2 Level 3 Total
Company S$’000 S$’000 S$’000 S$’000
2015
Financial liabilities
Financial guarantees – – 437 437
Loan from a subsidiary – – 700 700
–––––––– –––––––– –––––––– ––––––––
– – 1,137 1,137
–––––––– –––––––– –––––––– ––––––––
2014
Financial assets
Loans to subsidiaries – – 1,789 1,789
–––––––– –––––––– –––––––– ––––––––
Financial liabilities
Financial guarantees – – 494 494
Loan from a subsidiary – – 427 427
–––––––– –––––––– –––––––– ––––––––
– – 921 921
–––––––– –––––––– –––––––– ––––––––
There were no transfers between levels in 2014 and 2015.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
57
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
27. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT continued
(d) Accounting classifications and fair values continued
Estimating the fair value
The following summarises the significant methods and assumptions used in estimating the fair values of financial
instruments of the Group and the Company.
Financial assets and liabilities
The notional amounts of financial assets and liabilities with a maturity of less than one year (including trade and
other receivables, cash and cash equivalents, bridging loan from non-controlling interests and trade and other
payables) are assumed to approximate their fair values. All other financial assets and liabilities are discounted to
determine their fair values.
Valuation technique for financial instruments not carried at fair value but for which fair values are disclosed:
Type Valuation technique
Group
Secured bridging loan from non-controlling interest Discounted cash flow method
Loans from a related party Discounted cash flow method
Long term loan Discounted cash flow method
Secured long term loans Discounted cash flow method
––––––––––––––––––––––––––
Company
Loans to/from subsidiaries Discounted cash flow method
Financial guarantees Discounted cash flow method
––––––––––––––––––––––––––
28. RELATED COMPANY AND RELATED PARTY TRANSACTIONS
During the year, Group entities were engaged into the following significant transactions with related parties/companies:
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Interest income from a joint venture
– Atlantis Operations (Canada) Limited 54 – 54 –
Interest income from a subsidiary
– MeyGen Limited – – 110 112
Service fee income from a joint venture
– Atlantis Operations (Canada) Limited 37 – – –
Service fee income from a subsidiary
– Atlantis Operations (UK) Limited – – 1,686 1,829
Service fee expense charged by a subsidiary
– ARC Operations Pty Limited – – 13 244
Interest expense arising from related party
– Morgan Stanley Capital Group Inc. – 804 – –
Interest expense arising from a subsidiary
– Atlantis Resources (Scotland) Limited – – 32 12
–––––––– –––––––– –––––––– ––––––––
58
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
28. RELATED COMPANY AND RELATED PARTY TRANSACTIONS continued
Group and Company
2015 2014
S$’000 S$’000
Interest expense arising from shareholders’ loans
– James Mcknoulty Family Trust – 84
– EDB Investments Pte Ltd – 137
– Austower Pty Ltd – 41
–––––––– ––––––––
Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year were as follows:
Group
2015 2014
S$’000 S$’000
Short-term benefits 1,262 1,523
Defined contribution benefits 187 83
Share based payments 1,303 938
–––––––– ––––––––
29. OPERATING LEASE
At the end of the reporting period, the Group and the Company had outstanding commitments under non-cancellable
operating leases, which fall due as follows:
Group
Company
2015 2014 2015 2014
S$’000 S$’000 S$’000 S$’000
Within one year 796 905 47 94
Between two to five years 2,809 1,781 – 5
More than five years 9,728 8,516 – –
–––––––– –––––––– –––––––– ––––––––
13,333 11,202 47 99
–––––––– –––––––– –––––––– ––––––––
The Group has various lease agreements for rental of land, seabed, offices and office equipment. The seabed lease typically
run for a period of 10 to 25 years and the land lease for 99 years. Office leases are negotiated for a term of between two
to five years.
30. COMMITMENTS
In 2015, the Group had entered into contracts to construct a tidal power plant for S$86.7 million of which S$58.3 million
(2014: S$17.8 million) had been incurred as at the reporting date. At 31 December 2015, the Group had outstanding
commitments under contracts for design and subcontractors works for S$4.7 million (2014: S$2.1 million).
31. CONTINGENT LIABILITIES
The Company has guaranteed credit facilities of S$13,585,000 (£6.5 million) (2014: S$8,256,000 (£4 million)) granted to
subsidiaries. At 31 December 2015, the amount has been fully utilised. In 2014, S$4,128,000 (£2.0 million) was utilised.
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
59
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
32. EVENTS AFTER THE REPORTING PERIOD
Subsequent to 31 December 2015, the significant events of the Group are as follows:
(a) On 17 December 2015, Atlantis, via its Scottish project development vehicle, TPSL, entered into conditional asset
purchase agreements with SPR, under which Atlantis will acquire SPR’s portfolio of tidal projects in exchange for a
6% shareholding in TPSL for SPR. The SPR tidal power portfolio consists of two sites, a 10 MW project at the Sound
of Islay in Western Scotland and a 100 MW development at the Ness of Duncansby at Scotland’s north eastern tip.
The project assets include agreements for lease with The Crown Estate for both sites, and the Sound of Islay site also
has a grid connection offer and construction consents from the Scottish Ministers. The Sound of Islay project has
been awarded €20.7 million of grant funding from the European Commission’s NER300 fund by way of capital and
revenue support for its Scottish tidal development company. The transaction was completed on 6 May 2016.
The consideration payable for the projects, which the Company values at £6.6 million, is 3,859,703 shares in TPSL,
which equates to 6% of the issued share capital. Atlantis retains the remaining 94% of TPSL.
(b) On 1 April 2016, Atlantis entered into an agreement with Equitix, a market leading developer, investor and fund
manager of infrastructure assets, to advance Atlantis’s portfolio of tidal power projects in Scotland. Under the
agreement, Equitix, through its managed funds, intends to acquire at least 25% of each Atlantis Scottish project
vehicle at financial close of that project.
(c) On 11 April 2016, DEME, an investor in marine energy projects, agreed to pay Atlantis £2 million in cash consideration
for a 2% stake in TPSL and a right to contribute equity funding to the Sound of Islay project, subject to satisfaction
of certain conditions precedent (including procurement of third party consents and agreement with DEME of
commercial arrangements in relation to offshore construction works). Atlantis is currently working to satisfy these
conditions.
(d) On 20 April 2016, the Company raised approximately £6.5 million before expenses through the conditional placing
of 11,888,460 new ordinary shares at a placing price of 55 pence per share.
(e) On 21 April 2016, the Company entered into a memorandum of understanding with SBS Intl Ltd (“SBS”), a privately
owned international marine, subsea and renewable energy developer which has been studying the potential of ocean
energy resources for tidal-stream devices around the Indonesian archipelago since 2013. Under this agreement,
Atlantis and SBS will work together to establish a joint venture to develop a 150MW tidal stream site in Indonesia.
The total cost of this commercial array has been estimated at US$750 million and will be constructed over a number
of stages. SBS has completed a feasibility study and the project will be supported by a 25-year power purchase
agreement with the state-owned electricity company, Perusahaan Listrik Negara.
(f) With effect from 20 June 2016, the registered office will be at 80 Raffles Place, Level 36, Singapore 048624.
60
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
33. SEGMENT INFORMATION
(a) Operating segments
The Group is principally engaged in the development of power generation projects, as well as turbine and engineering
services, which are its reportable segments in 2015. The power generation division currently focuses on the
development of the MeyGen tidal energy project, whereas the turbine and engineering services division focuses on
the development and delivery of turbines and technology solutions for projects worldwide. These two divisions are
managed separately because they require different expertise and marketing strategies. In 2014, the assets, liabilities
and capital expenditure of the Group were mainly employed in activities supporting the development of the tidal
current power projects, being the main reportable segment within the Group.
The Board of directors, who are the chief operating decision makers, review internal management reports for each
division regularly, in relation to the capital expenditure, resources allocation and funding availability of the two
divisions.
Other operations include the provision of corporate services which does not meet any of the quantitative thresholds
for determining reportable segments in 2015 and 2014.
There are varying levels of integration between the power generation and turbine and engineering services divisions,
including the delivery of a turbine from the turbine and engineering services to the power generation division.
Information regarding the results of each reportable segment is included below.
Turbine and
Power engineering
generation services Total
S$’000 S$’000 S$’000
External revenues – 2,889 2,889
–––––––– –––––––– ––––––––
Inter-segment revenue – 4,526 4,526
Interest revenue – 183 183
Interest expense – (1,283) (1,283)
Depreciation and amortisation – (1,451) (1,451)
Reportable segment profit/(loss) before tax 565 (8,004) (7,439)
–––––––– –––––––– ––––––––
Other material non-cash items:
-Impairment losses on property, plant and equipment – (3,951) (3,951)
Reportable segment assets 111,443 39,260 150,703
Capital expenditure 41,706 2,518 44,224
Reportable segment liabilities 52,345 47,151 99,496
–––––––– –––––––– ––––––––
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
61
NOTES TO FINANCIAL STATEMENTS continued
31 DECEMBER 2015
33. SEGMENT INFORMATION continued
(a) Operating segments continued
2015
S$’000
Revenues
Revenue for reportable segments 7,415
Elimination of inter-segment revenue (4,526)
––––––––
Consolidated revenue 2,889
Profit or loss
Total loss for reportable segments (7,439)
Elimination of inter-segment profits (27)
Unallocated amounts
- newly acquired(1) 17,743
- others (5,915)
Share of loss of equity-accounted investees (103)
––––––––
Consolidated profit before tax 4,259
Assets
Total assets for reportable segments 150,703
Elimination of inter-segment assets (260)
Investments in equity-accounted investees 2,345
Other unallocated amounts
- newly acquired(1) 34,404
- others 4,435
––––––––
Consolidated total assets 191,627
Liabilities
Total liabilities for reportable segments 99,496
Elimination of inter-segment liabilities (4,385)
Other unallocated amounts
- newly acquired(1) 3,757
- others (27,957)
––––––––
Consolidated total liabilities 70,911
(1)Newly acquired denotes results, assets and liabilities of MCT
Other material items
Reportable Consolidated
segment Adjustments totals
S$’000 S$’000 S$’000
Interest revenue 183 (129) 54
Interest expense (1,283) (7) (1,290)
Capital expenditure 44,224 273 44,497
Other gains 6,099 21,814 27,913
Depreciation and amortisation 1,451 1,850 3,301
Impairment losses on intangible assets 3,951 – 3,951
–––––––– –––––––– ––––––––
(b) Geographical segments
Total segment revenue for Group is S$2,889,000 (2014: S$5,279,000). The Group operations are mostly focused in
the United Kingdom, where the activities are focused on development of tidal current power projects. Most of the
Group’s assets are located in the United Kingdom. The capital expenditure during the year is also primarily related
to the development of the projects and the delivery of an Atlantis tidal turbine to one of the projects.
62
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
COMPANY INFORMATION
Non-Executive Directors
John Mitchell Neill
Michael Robert Lloyd
Ian Anthony Macdonald
Ian George Cobban
John Anthony Clifford Woodley
Duncan Stuart Black
Executive Directors
Timothy James Cornelius
Registered Office and Company Number
65 Niven Road
Singapore 228414
Company Number: 200517551R
(With effect from 20 June 2016)
80 Raffles Place, Level 36
Singapore 048624
Company Secretary
Gwendolin Lee Soo Fern/Cho Form Po
c/o 50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Nominated Adviser and Broker
Peel Hunt LLP
120 London Wall
London EC2Y 5ET
Auditor
KPMG LLP
16 Raffles Quay #25-00
Hong Leong Building
Singapore 048581
Registrar
Boardroom Corporate & Advisory Services Pte Ltd
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Depositary
Capita IRG Trustees Limited
The Registry
34 Beckenham Road
Beckenham BR3 4TU
Guernsey Branch Register
Capita Registrars (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey GY2 4LH
Website
www.atlantisresourcesltd.com
ATLANTIS RESOURCES LIMITED
AND ITS SUBSIDIARIES
63
www.atlantisresourcesltd.com
Registered Office and Company Number
65 Niven Road, Singapore 228414, Company Number: 200517551R