Final Results

Rame Energy / Index: AIM / Epic: RAME / ISIN: JE00BBD8GG53 / Sector: Energy

30 June 2015

Rame Energy plc ("Rame", the "Company" or the "Group")

Audited Results for the Year Ended 31 December 2014

Rame, the independent power producer, announces its audited results for the year ended 31 December 2014.

2014 highlights:

· Completed its initial public offering on AIM in April;

· Commenced construction of the 15MW Raki and Huajache projects in conjunction with Santander;

· Significant progress made in delivering on strategy to transition into an Independent Power Producer;

· Signed a framework agreement with Santander for an additional four projects with a total generating capacity of 118MW;

· Established solar PV capabilities through the acquisition of Beco Solar Ltd; and

· Signed a power purchase agreement with a subsidiary of Mandalay Resources Inc to provide 1.8MW of power to its Cerro Bayo mine in Chile.

Post Period highlights:

· Achieved mechanical completion at Raki and Huajache in March demonstrating the Group's ability to develop, finance and build two substantial on-grid wind projects;

· Expanded the Santander agreement to projects with a total generating capacity of 133MW;

· Successfully disposed of the 9MW Punta Chome wind project to EREN Development; and

· Achieved financial close on the Cerro Coihue off-grid wind project via an innovative arrangement with financial partner Anden Re, construction is now underway.

Tim Adams, Chief Executive Officer, commented: "2014 was a year of both significant challenges and important achievements for Rame. We have taken important steps on our journey to becoming an independent power producer. The Group has secured blue chip partners in Santander and Anden Re to help fund the roll out of our on-grid and off-grid projects; increased our solar capabilities through the acquisition of Beco Solar; and through the construction of our first two 15MW on-grid wind power projects demonstrated our ability to deliver challenging projects. These milestones are the building blocks on which our efforts in 2015 will be based, as we look to realise the inherent value of our extensive portfolio of development projects."

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Notes

Rame is an established revenue generative global supplier of cost effective, technically optimised and reliable power generation solutions including wind, solar and diesel to blue chip clients such as Akzo Nobel, Anglo American, Barrick Gold and Codelco. Rame aims to become a niche Independent Power Producer ("IPP") targeting an operational portfolio of 300MW in Latin America within three years. The Company plans to build on its proven track record of delivering power in South America where it has been involved for more than a decade.

Forward-looking statements

This release may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this release and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, liquidity, prospects, growth, strategies and expectations of the industry. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates may differ materially from those described in, or suggested by, any forward-looking statements contained in this release. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this release, those developments may not be indicative of developments in subsequent periods. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in law or regulation, currency fluctuations (including the US dollar), the Group's ability to develop new or existing projects, changes in its business strategy, political and economic uncertainty. Save as required by law or the AIM Rules for Companies, the Company is under no obligation to update the information contained in this release.

Past performance cannot be relied on as a guide to future performance.

CHAIRMAN'S STATEMENT

On behalf of the board I am pleased to present the Company's results for the year ended 31 December 2014 in what was an incredibly active and progressive time for the business.

The year under review saw the Group admitted to trading on AIM, raise several tranches of funding for project development, transition towards becoming an IPP (both on and off-grid in Chile), acquire and integrate our solar expertise and continue to develop our equity partnership with Santander. We have suffered delays along the way, many of which were beyond our control, and the fruits of our labour have not yet manifested themselves in our financial results for the year. However, our current mix of projects both in size and stage of development and the diverse revenue mix they represent is cause for great optimism and a great testament to the management team.

The first three months of 2014 were devoted to two main things: the completion of a private round of fundraising to meet our financial obligations under the first two Santander on-grid wind projects and the final preparation for and completion of the IPO itself. Whilst the rest of the year was about re-focussing management resources on the delivery of projects and the development of the business as a whole, the reality of the first quarter was that the fundraising and IPO processes were all consuming and the state of flux within the group continued on from the previous year.

With the IPO completed in early April, the Group set three clear short term objectives: to formalise our cooperation with Santander to include a larger number of projects, to ensure we were suitably positioned to respond to the rapidly emerging and convergent opportunities in solar photo voltaic (PV) energy, and to re-start and enlarge our contracting / service related operations which had reduced substantially in the run up to IPO. Since the IPO the business has evolved into two distinct divisions - Power Generation and Engineering Services.

Power generation is focused on our move towards becoming an IPP and has two focus areas. The first is the larger scale, on-grid, power generation projects as embodied by the construction of the combined 15MW wind projects at Raki and Huajache in Chile. These projects typically have much higher capital requirements and any further developments in our portfolio are underpinned by our $69 million framework agreement with Santander for the next 133MW. During the year under review, we undertook various wind studies on the next proposed Santander project with the results indicating a potential annual energy production in excess of 25% higher than originally forecast. Aside from the 133MW of projects covered by the Santander framework agreement, we have a further pipeline of on-grid projects with a potential capacity of up to 200MW. Whilst it is our intention to develop these projects further, as we recently demonstrated through the sale of Punta Chome, there is a market for development ready projects in Chile.

The second area of focus is the smaller scale, off grid power projects as exemplified by the Cerro Coihue project to provide power via a PPA to the Cerro Bayo mine in Chile for a minimum of five years from our own 1.8MW wind farm. We secured the funding for the Cerro Coihue project through a joint venture with Anden Re, a German institutional investment fund.

Whilst most of our power projects to date have been in Chile, the acquisition of Beco brings the potential of producing power in the UK much closer to home and we continue to make significant steps in our assessment of proprietary UK solar projects in addition to providing solar services to third parties.

This leads us to our second division; Engineering Services.

As mentioned in our Interim results, the effort required to progress our transition towards becoming an IPP had a negative impact on the engineering services in the period under review. The acquisition of Beco in June 2014 significantly bolstered our engineering capabilities in solar and we have migrated those solar skills to our operations in Chile. Our order book for engineering services continues to develop well and revenue from this division in the current year is likely to show a substantial increase on 2014.

Further details of all our operations follow in our Chief Executive's operational review. Whilst it is evident from our current work in progress and the potential of our pipeline of business that the Group has made great strides in the last financial year, the time and capital spent in developing projects were not realised in terms of the revenues for 2014 but have already begun bearing fruit in 2015.

As we progress through 2015, there are a few, key highlights I would ask investors to focus upon. The Group has a substantial portfolio of energy projects with the financial characteristics of annuities. They produce stable, significant returns over periods of five to 25 years. We have an experienced team who have been identifying, designing, executing and operating these projects in Chile and the UK for more than a decade. Our in-house engineering skills are a source of revenue but also allow us to de-risk the execution of our own power projects and improve margin. Lastly, we operate in Chile and the UK which are both outstanding markets for developing and operating renewable energy projects.

Our challenge now is to fully unlock the value within the group and to realise the potential that is increasingly visible across our divisions. Key to this is managing and accessing our capital requirements for the development of power projects. When appropriate, we will use innovative funding solutions which do not dilute shareholders unnecessarily and leave the Group with an interest that provides suitable rewards whilst mitigating some of the funding risk.

On behalf of the board, I would like to thank all the team for their efforts over the period and remain very optimistic for the year ahead.

William (Bill) FisherNon-Executive Chairman30 June 2015

CHIEF EXECUTIVE OFFICER'S REVIEW

2014 was a year of significant challenge and change for Rame both on a corporate and operational level. It was also one we can look back on as demonstrating the key attributes, competences and potential of the business. The Group has shown that it can attract investment in both a private and public setting, that it can deploy that capital as part of its transition towards becoming an Independent Power Producer and that its engineering and project management experience and capabilities continue to serve it well in the delivery of its investments.

We believe the Group has been both strategically bold yet financially measured in the augmentation of both its technical skill base and its general engineering turnover through the acquisition of Beco and has utilised this as a basis to expand its business as a service provider and an IPP into new markets. Focussed development activity on the Chilean project pipeline has yielded improved potential returns within the near term portfolio and new opportunities have been created which demonstrate the ability to respond positively to changing market dynamics and macro-economic influences. Existing strategic partnerships such as with Santander have shown great promise and new partners have engaged to expand the range of project types and sizes from which Rame can now explore IPP opportunities from a broader, robust footing. Again, Rame has led the way in offering technically innovative and cost effective energy supply solutions to the off-grid consumer which can cater for projects with time constrained power needs, and we believe this a unique product in an increasingly competitive market.

In Santander we found an equal desire to produce a wider and more formally defined basis for our future cooperation and the agreements that lead to the closing of Raki and Huajache were refined and streamlined and a number of projects embedded into the framework. Within 12 weeks of IPO we were able to announce that this important relationship had been reinforced and that both parties were now committed to a project delivery process that would involve up to $69 million of cash participation from our partner. This provided the basis for our project development planning and investment throughout the year and continues to underpin the larger on-grid IPP opportunity for Rame in Chile.

In relation to developing our solar PV capabilities to ensure that Rame can genuinely design and deliver power solutions from both prevailing renewable sources, our options were to acquire personnel with the expertise required or to look at a corporate acquisition. In Beco, there was a highly complementary, local business that Rame had worked with before that had both the desired technical capabilities as well as a strong range of products and services in the PV and off-grid markets which would provide a good platform to grow both revenues and IPP opportunities from. Having recently demerged from a major UK engineering group, Beco was perfectly positioned as a logical and affordable acquisition.

Operational Review

Beco Solar

Beco has continued through 2014 to deliver its core revenues from the installation of rooftop and ground-mounted solar PV as well as its specialist off-grid power and storage solutions. Notable projects included St. Helena Airport in the South Atlantic where 12 independent off-grid power systems to power aircraft warning beacons were installed and Riverford Organic Dairy Farm where a 232 kWp system was installed on a piece of unusable agricultural land and the system now powers the dairy for cooling butter and cheese making. In August the first Beco technical resource went to Chile to begin work on Rame's emerging solar project pipeline and there has been significant interaction since then as our solar expertise has been projected into this new market. With additional sales resource now in place, we see growth in revenue and the clear emergence of solar IPP opportunities both in Chile and the UK. Whilst changes to the feed in tariff for solar PV in the UK are ongoing, Beco's primary focus remains commercial and industrial rooftop installations in the 20kW to 150kW range where tariff support remains strong and our interests are most closely aligned with Government policy.

On-grid Power Generation

One of the biggest parts of the Group's operational activity within 2014 was the construction of the Raki / Huajache wind projects in the eighth region of Chile in partnership with Santander. Whilst Rame was only engaged in a supervisory role with the actual construction being undertaken by turbine supplier Vestas under an EPC contract and the inter-connection being built by the local distribution company, the normal requirements to safely control and coordinate contractors engaged on the project as well as administer the commercial elements of the contracts themselves was a substantial task. Dealing with the engineering implications of soil conditions, the logistics of very large loads arriving in Chile by sea and then being transported over 100km by road to the final site, and then the very complex tasks of assembly and erection of the turbines were all elements typical of this type of project and which Rame was experienced in handling. However, it was in sensitively managing the critical liaison with the local communities during the works and dealing with delays to component delivery following a landslide on the access route that really demonstrated the strength of the Group's project management team. At all times, the project has required the close involvement of all the stakeholders and whilst delays have been encountered they have been managed sensibly and mitigated proactively and the project has provided a strong foundation for the successful implementation of further developments downstream in this key region for wind power in Chile.

Off-grid Power Generation

In May of 2014, Rame agreed terms with Mandalay Resources for the supply of energy to their Cerro Bayo gold mine in Patagonia. Although Rame had been speculatively measuring wind speeds at the site for quite some time, such was the attractiveness of a renewable based power supply contract in this very windy site to offset the cost of off-grid diesel generation that the customer expedited the signing of an agreement. This potential PPA represented a compelling offer for the mining industry where uncertainty in future commodity pricing and reducing expectations of life of mine means that entering into long term contractual commitments for power supplies is becoming untenable. The challenge faced by Rame was to engineer a solution that would utilise equipment that could be deployed with the reliability, generating potential and at a cost that was commensurate with a basic PPA term of five years. By producing a turbine solution based on the complete refurbishment and substantial upgrading of older but well proven second generation units, Rame was able to achieve an alignment of performance and cost that worked within the parameters of the project economics thus unlocking the short term off-grid PPA market.

This pioneering project has since moved on to a full execution of the PPA and construction is now underway. The project demonstrates Rame's ability to utilise its technical expertise to produce new and high yielding niche PPA markets where returns are accelerated over a short term and which are therefore complementary to the traditional longer term yields derived from larger on-grid investments. Equally, this project is of a size and nature where Rame can uniquely fulfil the role of EPC contractor, it being almost impossible to source this service for this sort of work from the open market which serves as a strong barrier to entry for other competitors as well as an additional source of revenue for Rame. In view of the above, we believe that this type of off-grid PPA opportunity represents a strong development within the Rame business model since IPO. Whilst lower oil prices have impacted perceived demand for off-grid renewables in the eyes of investors, the reality is that the economics for diesel displacement especially for remote sites remain extremely compelling.

Chilean Energy Market

In 2014 the Chilean combined wind and PV energy market enjoyed a significant growth and capacity almost quadrupled to approximately 1.2GW. Whilst the international profile of the marketplace and therefore the competitors within it continue to grow rapidly, this has stimulated increased interest in the acquisition of quality energy assets. This increased activity underpins the value of the Rame pipeline and improved awareness in the wider investor community of the opportunity that Chilean renewables presents. Additionally, the availability of commercial debt to support good projects from local banking sources continues to increase and the strong interest shown particularly by development banks in participating in Rame's initial solar PV projects in Chile is an encouraging start to our developing solar portfolio. In December, we announced an indicative term sheet to provide non-recourse debt for our first multi megawatt scale, ground mounted solar project to be developed as an IPP and it is clear that this technology will play an important part in the Rame IPP proposition.

Pipeline Development

Investment in the development of our pipeline also continued throughout 2014 with connection studies and agreements being finalised for several projects. Additionally, sites that were discounted for wind development are now emerging as valuable in the PV market. In order to remove the uncertainty inherent in the prediction of wind speeds at heights above those at which measurements have physically been taken, investment was made in new monitoring masts in the last quarter of 2014 which have subsequently supported a substantial upgrading of the financial projections for key, near term projects. Rame remains committed to a programme of targeted project development that is consistent with adding realisable value to its asset base whilst supporting the realistic roll out of its own power producing projects. The inherent market interest in the pipeline provides opportunity to monetise projects at an early stage which would not be progressed as part of the IPP development thereby providing useful income for the business. Electrical studies, general permitting and, specifically, community liaison as discussed previously, remain key ongoing activities within the engineering group.

Engineering Services

As already outlined, third party engagements for the group and the associated revenues have been a clear target for new business development since IPO. Beco provided an immediate injection of operating resource and revenue and the Group continued to supply operations and maintenance services with existing clients in Chile in 2014. During the year further work was secured for Barrick Gold for additional monitoring equipment at their Punta Colorada site and other small scale engineering studies were also awarded. It has however taken time to re-engage with the market especially as some of our traditional customers in Chile would now consider us as competitors in the generating space. Whilst essentially small cash contributors, our general engineering capabilities remain a key part of our ability to deliver fully integrated services both internally and externally and remain important to the future of the business.

Post Year End

Following the end of 2014 there have been a number of very significant accomplishments from a business perspective. Firstly, following the delays due to the landslide, mechanical completion at Raki / Huajache was finally achieved on 9 March. Since then, the process of certifying and connecting these projects to the Chilean grid system has been ongoing and at the same time, commercial close out of the primary construction contracts including the Vestas EPC package has been achieved. Commencement of power sales is now imminent and whilst the delays to the projects have been frustrating, the fact remains that Rame has demonstrated its ability to develop, finance and build two substantial on-grid wind projects in a challenging part of the country, one of only three companies to do so. This is a strong platform to build upon and both Rame and Santander are now focused on the rapid implementation of the next two projects in the region which combined are three times the size of the first two and represent another major step forward.

Achieving financial close on the Cerro Coihue off-grid wind project was a critical objective for the Group following the execution of the PPA in October 2014. Coinciding as it did with dramatic reductions in the oil price, Rame faced headwinds with regard to finding suitable sources of finance and as a result, and because of technical delays associated with the client's infrastructure, this project did not close until April this year. Ultimately however, the financial solution provided for an innovative arrangement that becomes the initial project for cooperation with partner Anden Re which we anticipate will extend to other similar projects in the future. The construction of the project is now advancing well with foundation rock blasting and anchor works progressing on the site and refurbished blades and tower sections for the turbines already shipped from Europe. Acceptance testing on the first of the re-worked nacelles is also now commencing at ABB's facilities in Spain. The logistics of onward transportation from the port in Chile to the site are complex but Rame's strong and proven partnerships with competent contractors in the country provide confidence in an effective delivery of the project. The announcement of the Cerro Coihue project has stimulated wide interest in the market both from mining and other industrial customers and the Group aims to capitalise on this with further opportunities crystallizing in the course of this year.

Following developments in legislation in Chile permitting the export of energy from small residential and industrial generating systems, Rame once again seized the first mover advantage and secured a PPA for a rooftop solar project for a private school in Santiago, the first of its kind in Metropolitan Region of Santiago. The solar PV project was delivered entirely in house with Beco engineering, procuring and installing the system thereby completing the transfer of these capabilities into Chile and establishing Rame as a rooftop PV IPP. Significant work has been undertaken with other educational establishments as well as commercial and industrial users in Santiago to establish a pipeline of rooftop solar PV opportunities which will be advanced when funding permits but which potentially provides another highly scalable and robust component to the Rame generation footprint. After an unusual lull in work through the first quarter partly driven by the general election and its potential implication to tariffs, Beco has seen a very substantial increase in its order book in the UK in recent months and has expanded its workforce to meet this demand. Two larger ground mounted solar projects have also started to advance more quickly with the potential to provide substantial orders downstream whilst the off-grid small systems business has continued to progress in line with expectations.

Another post year end development of major significance has been the sale of the Punta Chome project to Eren renewables. Following the introduction of a new project into the Santander agreement, the Punta Chome wind project was no longer deemed strategically suitable for development within the partnership. It remained however an attractive and sound investment opportunity and the agreement signed for its purchase combined with a package of project and construction management services with Eren demonstrated the quality and value of the Rame project assets as well as the ongoing ability to drive earnings from our commercial and technical services.

Outlook

There is little doubt that Rame experienced some significant challenges during 2014 and that drops in the oil and copper price have affected investor appetite in certain sectors. However, despite genuine capital constraints in what is fundamentally a cash intensive business, the Group has delivered on its primary operational objectives as well as reacted quickly and proactively to changes and emerging opportunities in all its markets. Financial performance has not been as initially expected but this is has been attributable in the main to project slippage and not the fundamental loss of opportunity and it is clear that revenues in all key business areas are now improving. The ability of the Group to progress its IPP ambitions will remain subject to the ongoing access to appropriate sources of capital. However, since IPO the business has made substantial steps towards proving the model that underpins its value proposition and growing the value of its asset base.

Looking forward, we have a broader set of financial relationships in place and our key partners have demonstrated their commitment to, and belief in, working with us which we will continue to capitalise on. The next Santander projects will provide a substantial leap in our IPP position and potentially present very high quality investment opportunities. There is no doubt that the potential for short term off-grid PPAs is an important niche for Rame and we envisage solid activity in that segment. Our service revenue, including our EPC workload for both internal and external projects, has now been re-established. With significant interest from other parties in acquiring projects and engaging our services to support their delivery, we believe our service revenue is set to continue to grow.

Rame moved quickly to establish capabilities in solar PV, recognising its increasing importance and remains alive to the other key technological developments in areas that are germane to its future business. In particular, energy storage, computational wind resource predictions and solar concentration are all rapidly developing technologies where we are working closely with specialists in these fields to ensure that we are able to optimise our offer to the market as advances in related technologies become commercially viable.

Finally, the demand for alternative sources of energy continues to grow in Chile and Government support for renewables is increasing as demonstrated by the adoption of more sophisticated mechanisms for stimulating and procuring it. Within this dynamic market and beyond basic PPA arrangements, Rame must evolve its own position and is actively developing new ways in which it can commercialise the production of energy from its current and future assets, working closely with industry specialists and its customers.

Rame has, through hard work and despite some significant challenges, now realised its ambition of becoming an IPP and I would thank the entire team both in the UK and in Chile for their dedication and determination in achieving this. Our new colleagues at Beco have quickly become a key part of Rame and the blend of their skills with those already in the business provides a strong platform from which to push forward with the delivery of our strategic and financial goals. We have yet to achieve the momentum we need both in the business and the market to really deliver the Group's underlying potential but we have made significant progress and strongly believe that the outlook remains positive if the capital can be sourced to support Rame's ambitious objectives.

Tim AdamsChief Executive Officer30 June 2015

FINANCIAL REVIEW

Introduction

For Rame, 2014 was another year of progress and transition. Since its formation and up to 2013, the Group's main focus had been the provision of project development and engineering services to third parties. The focus over the past 24 months has been the transition to becoming an independent power producer (an "IPP"). This has necessarily meant that management time and internal resources were redirected towards the Group's pipeline of energy generation projects. All of the significant financial developments for the Group can be traced directly to its transition into an IPP.

A large amount of time, energy and resources have been spent in preparation for the Group's IPO. This was driven by the need to raise capital to progress our pipeline of energy projects up to, and sometimes through, the point of construction. The Group completed the preparations for its IPO which took place on 4 April 2014.

The Company raised $2.4 million at IPO through the issue of new shares and $1.2 million through the issue of a convertible loan note. On 28 August 2014, the Company raised an additional $1.1 million through the issue of new shares. On 5 September 2014, the Company raised an additional $0.4 million through the issue of a loan note. The funds raised at IPO, and the prior and subsequent fundraisings, were used to fund the Group's equity participation in the Raki/Huajache projects in conjunction with Santander, to progress the Group's other projects in Chile and for general working capital purposes.

Balance Sheet

The focus of our efforts in Chile was the ongoing development of our pipeline of projects. During the year, the Group invested $0.7 million on its projects still in development. The Directors expect that the benefit of this investment will be realised in 2015, 2016 and beyond. In May 2014, construction started on the Raki/Huajache projects. The Group's investment in these two projects during the year totalled $2.1 million.

In July 2014, the Group acquired Beco which led to goodwill of $0.5 million being recognised on the balance sheet.

During the year, the Company raised $4.2 million (net of costs) through the issue of new shares. Retained losses increased to $4.5 million as a result of losses during the year.

Long term liabilities at the 31 December 2014 had increased to $1.8 million (2013: $0.2 million) primarily due to an increase in long term borrowings.

Income Statement

Revenue decreased to $2.2 million (2013: $3.6 million). This was the direct result of the decision to focus internal resources on the advancement of the Group's own pipeline of energy projects. The Directors believe that externally generated revenue in 2015 will be significantly greater than in 2014.

Administrative remained flat at $5.0 million (2013: $5.0 million), and cost of sales increased to $1.3 million from $0.1 million. This reflects the increased cost of sales following the acquisition of Beco Solar.

In 2014, the Group recognised $0.3 million (2013: $0) of non-recurring costs related to the preparations for the IPO. It also recognised $0.6 million (2013: $0) of losses on disposal of intangible assets. The Directors believe that these two items were very unusual in nature and have, therefore, been separated out on the income statement.

The Group has also recognised a loss on associates of $0.4 million (2013: $0) in the income statement. This relates to the losses recognised by the SPVs for Raki and Huajache. Although both projects were in construction at the end of the period and not operational, they have recognised a combined loss of $2.0 million (2013: $0) in relation to an interest rate swap agreement that is part of the project finance facilities for the projects. It is worth noting that the application of IFRS 39 means that the SPVs have recognised a potential future loss on the swaps based on interest rates as at 31 December 2014. These are, therefore, unrealised losses.

The Group recorded a net loss after tax of $5.0 million (2013: loss of $1.3 million). Again, the Directors are confident that the Group's financial performance in 2015 will improve significantly.

Foreign exchange losses incurred in 2014 were $0.1 million (2013: $0.2 million) which represent the impact of unrealised foreign exchange movements in long-term intra-group funding arrangements and intangible assets. 

Cashflow

Group cash balances at 31 December 2014 were $0.2 million (2013: $0.3 million).

During the year, the Group experienced net cash outflows of $3.6 million (2013: $2.7 million) as a result of operating activities and movements in working capital.

The Group's investing activities during the year generated cash outflows of $2.9 million (2013: $0.9 million).

Financing activities during 2014 generated cash inflows of $5.4 million (2013: $2.8 million).

Funding

The Group employs a range of financing options to continue development and construction of its pipeline of projects. Key sources of funding to date have included: equity; long term, non-recourse project finance provided by banks; loan notes, joint ventures with other equity and debt based investors, and the sale non-core projects which allows the Group to realise value and recycle capital to reinvest in new projects for our shareholders.

The Group continuously evaluates alternative sources of capital to fund existing and future projects. We believe that one of our strengths going forward will be our ability to access a wide variety of sources of capital to match the specific requirements of individual projects and the Group's ability to fund projects from its existing cash resources.

Going Concern

The Directors have reviewed the Group's budgets and forecast cash flows through to June 2016. Taking into consideration the risks outlined in this financial review, the Directors are satisfied that the Group has adequate resources to continue in business for the foreseeable future. It is; therefore, appropriate to adopt the going concern basis in the preparation of its financial statements.

Kevin McNair

Chief Financial Officer

30 June 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED STATEMENT OF CASHFLOW

FOR THE YEAR ENDED 31 DECEMBER 2014

ABRIDGED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Basis of preparation

The consolidated financial statements of the Company have been prepared in accordance with the International Financial Reported Standards adopted by the European Union (IFRSs as adopted by the EU), issued by the International Financial Reporting Interpretations Committee ("IFRIC"). The consolidated financial statements have been prepared until the historical cost convention, as modified for any financial assets which are stated at fair value through profit or loss.

The individual financial information of each group entity is measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The aggregated financial statements of the Company are presented in US Dollars, which is the presentational currency for the aggregated financial statements. The functional currency of each of the group entities is the local currency of each individual entity, however key contracts for the procurement and construction of renewable generation assets and the underlying sale of electricity are denominated in US Dollars and as such the Company feels it is appropriate to us this as its presentational currency.

 The Company was incorporated on 26 February 2013 and, on 31 January 2014, entered into an agreement to acquire the entire issued and to be issued share capital of Rame Singapore PTE., Seawind International Limited and Seawind Holdings S.A. including all associated subsidiaries. The acquisition was effected mainly by way of issue of shares.

In determining the appropriate accounting treatment for this transaction, the Directors considered IFRS 3 "Business Combinations" (Revised 2008). However, they concluded that this transaction fell outside the scope of IFRS 3 (Revised 2008) since the transaction described above represents a combination of entities under common control.

In accordance with IAS 8 "Accounting Policies, changes in accounting estimates and errors", in developing an appropriate accounting policy, the Directors have considered the pronouncements of other standard setting bodies and specifically looked to accounting principles generally accepted in the United Kingdom ("UK GAAP") for guidance (FRS 6 - Acquisitions and mergers) which does not conflict with IFRS and reflects the economic substance of the transaction.

Under UK GAAP, the assets and liabilities of all entities are recorded at book value, not fair value (although adjustments are made to achieve uniform accounting policies), intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer in accordance within applicable IFRS, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented.

Although the Group reconstruction did not become unconditional until 31 January 2014, the consolidated financial statements are presented as if the Group structure has always been in place for the year ended 31 December 2013, including the underlying activities of the Rame UK Group and Seawind Chile Group. All entities had the same management as well as majority shareholders during that period.

As permitted by section 105 of the Jersey Companies Act, separate financial statements of the Company are not presented

Basis of ConsolidationThe group financial statements consolidate those of Rame Energy plc (the Company) and its subsidiaries (together referred to as the Group). The parent company financial statements present information about the Company as a separate entity and not about its group.

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Further to this subsidiaries are entities over which the group has power to govern the financial and operating policies of the subsidiary and consistent accounting policies have been adopted across the Group. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

(d) Adoption of new and revised International Financial Reporting Standards

None of the new and revised Standards and Interpretations that were adopted in the current year were considered to have had a material effect to the presentation or disclosures reported in these Financial Statements.

(i) Standards, amendments and interpretations to published standards not yet effective

The Directors have considered those Standards and Interpretations, which have not been applied in the Financial Statements but are relevant to the Group's operations, that are in issue but not yet effective, and do not consider that any will have a material impact on the future results of the Group. The Directors are yet to conclude on the impact of IFRS 15 - Revenue from contracts with customers however they consider the likely impact to not be material.

(e) Going Concern

The Group's business activities, together with the factors likely to affect its future development and position, are set out in the Chief Executive Officer's Strategic Review. The Directors have considered the current liabilities of the Group as at 31 December 2014 as well as the forecast cash flows for an 18 month period from the date of these consolidated financial statements. The Directors also continue to monitor the cash flows from time to time including the short term and long term liquidity position. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors therefore consider it appropriate to prepare the financial statements on a going concern basis.

Summary of significant accounting policies

The consolidated financial information has been prepared on the historical cost basis as varied by the use of fair values when required by accounting standards, as explained in the accounting policies set out below, which has been prepared in accordance with IFRS. The principal accounting policies are set out below.

a) Basis of consolidation

The pro-forma consolidated financial information includes the financial information of Rame Energy Plc and the Company for each of the financial year ended 31 December 2014, and 2013.

b) Functional and foreign currencies

The pro forma consolidated financial information is presented in US Dollars, which is the Group's presentation currency for the purposes of this consolidation.

(i) Transactions and balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(ii) Foreign operations

Assets and liabilities of foreign operations are translated to USD at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.

(c) Financial instruments

Financial instruments are recognised in the statements of financial position when the Company have become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Company have a legally enforceable right to offset and intend to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

Financial assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

- Financial assets at fair value through profit or loss

 As at the end of the reporting period, there were no financial assets classified under this category.

- Held-to-maturity investments

 As at the end of the reporting period, there were no financial assets classified under this category.

- Loans and receivables financial assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

- Available-for-sale financial assets

As at the end of the reporting period, there were no financial assets classified under this category.

Financial liabilities

All financial liabilities are initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Finance leases

Leases of assets where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in liabilities. The finance charges are charged to the Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Investment properties acquired under finance leases are subsequently carried at their fair value.

Convertible Bonds

Convertible bonds are accounted for as the aggregate of (i) a liability component and (ii) an equity component.

At initial recognition, the fair value of the liability component of the convertible bond is determined using a market interest rate for an equivalent non-convertible bond. The remainder of the proceeds is allocated to the conversion option as an equity component.

Transaction costs associated with the issuance of the convertible bonds are allocated to the liability and equity components in proportion to the allocation of proceeds, The liability component is subsequently carried at amortised cost, calculated using the effective interest method, until extinguished on conversion or maturity.

(iii) Equity instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds. Ordinary shares that have been subscribed for, allotted, but not issued are considered to be equity in the period that the proceeds from the share subscription are received by the Company. On the issuance of the Ordinary Shares the Company will be shown as issued and any incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

 (d) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Plant and machinery 25 - 50% straight line

Computer equipment 33% straight line

Furniture and fittings 10% straight line

Motor vehicles 25% straight line

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Company are obligated to incur when the asset is acquired, if applicable.

Asset in the course of construction are stated at cost and are recognised only when it is probable that the asset under development will be constructed, based on a management judgement of when the project meets key criteria required for its successful development, including grid access or the completion of commercial heads of terms.

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of the asset is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset.

Development costs

Costs capitalised as Intangible Assets represent the costs incurred in bringing individual wind farm or solar projects to where there has been a confirmed economic resource, a clear pathway to site control, and documented regulatory process has begun. Cost associated with reaching the consent stage include options over land rights, planning application costs and environment impact studies and related internal staff costs. These may be costs incurred directly or through acquisition of a controlling interest in a project.

The point of capitalisation occurs following an initial site review by the Board, ensuring the key planning, construction and financing risks have been mitigated to a level where the Board considers it probable that the site will deliver future economic benefits. This includes demonstration of technical feasibility, intention to complete, availability of resources, how the asset will generate future economic benefits and the ability to reliably measure expenditure.

Development wind or solar assets are not amortised until the asset is substantially complete and ready for its intended use. The asset is subjected to impairment testing on an annual basis until this time.

At the point at which it is probable that the project under development will be constructed by the Company based on management judgment when the project meets key criteria required for its successful development, including planning permission and grid access, the project is transferred to Assets in the course of construction.

Amortisation occurs over the expected useful life of the related operating asset, which is assessed when the project is completed, at the year end the Group did not have any intangible assets that were substantially complete and therefore no amortisation has been recognised. The asset is derecognised on disposal, or when no future economic benefits are expected from their use. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or more frequently when an indication of impairment arises during the reporting year. Further information and the carrying value of these assets is disclosed in note 4.

Investment in Associates

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.

The Group's investments in its associate are accounted for using the equity method.

Under the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.

The statement of profit or loss reflects the Group's share of the results of operations of the associate. Any change in OCI of those investees is presented as part of the Group's OCI. In addition, when there has been a change recognised directly in the equity of the associate or joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

The aggregate of the Group's share of profit or loss of an associate and a joint venture is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognises the loss as 'Share of profit of an associate and a joint venture' in the statement of profit or loss.

Impairment

Impairment of financial assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.

An impairment loss in respect of loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

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 was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that 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.

(ii) Impairment of non-financial assets

The carrying values of assets, other than those to which IAS 36 ‑ Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value‑in‑use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss immediately.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

Goodwill

Goodwill represents the amount by which the fair value of the cost of a business combination exceeds the fair value of the net assets acquired. Goodwill is not amortised and is stated at cost less any accumulated impairment losses.

The recoverable amount of goodwill is tested for impartment annually or when events or changes in circumstance indicate that it might be impaired. Impairment changes are deducted from the carrying value and recognised immediately in the income statement. 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. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, 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.

Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

Finance leases which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the income statement.

A leased asset is deprecated over the useful life of the asset. However, if there is no reasonably certainty that the Company will obtain ownership by the end of the lease term, the asset is deprecated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised an operating expense in the income statement on a straight-line basis over the lease term.

Taxes

Current income tax

Income tax comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

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 the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs.

Sales Tax

Revenues, expenses and assets are recognised net of the amount of sales tax, except:

Receivables and payables are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of the receivables or payables in the statement of financial position.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, deposits with financial institutions and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Employee benefits

Short-term benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Company.

(ii) Defined contribution plans

The Company's contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Company has no further liability in respect of the defined contribution plans.

Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted to reflect the current best estimate. Where effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation.

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Company. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Company. The Company does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

Borrowing costs

Borrowing costs, directly attributable to the acquisition and construction of plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.

Revenue and other income

Sale of goods

Revenue is recognised upon delivery of goods and customers' acceptance and where applicable, net of returns and trade discounts.

Sale of Development Intangible Assets

Revenue for the sale of SPAs that hold Development Intangible Assets are recognised when a share purchase agreement is signed and there are no tangible assets held by the special purpose vehicle.

ii) Engineering consulting services

A significant part of the Company's turnover represents revenue recognised on long term service contracts. When the outcome of such a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

Services completed for Group Companies or special purpose vehicles controlled by the Company are not considered revenue and thus will not be included. Services completed for special purpose vehicles that the Company has a non-controlling interest are considered a transaction with a third party and thus will be treated as revenue for the group.

When the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

When contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contract where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before related work is performed are included in the consolidated statement of financial position, as a liability, as advances received. Amount billed for work performed but not yet paid by the customer are included in the consolidated statement of financial position under trade and other receivables.

(iii) Interest income

Interest income is recognised as other income on an accrual basis based on the effective yield on the investment.

(n) Inventory

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and conditions are accounted for as follows:

-Raw materials: purchase cost on a first in, first out basis

- Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs

Net realisable value is the estimated selling price in the ordinary course of business

(o) Operating segments

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

(p) Critical accounting estimates and judgments

In the application of the Company's accounting policies, management made judgements, estimates and assumptions about the carrying amounts of assets and liabilities that were not readily apparent from other sources. The estimates and associated assumptions were based on historical experience and other factors that were considered to be reasonable under the circumstances. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on an on-going 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. The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Impairment of capitalised development costs

The Company assesses at each reporting date whether there is an indication that a development asset held as an Intangible Asset may be impaired. The Company determines impairments by evaluating on-going resources assessments to determine if they meet minimum resource levels, determine if there remains either clear land control or a pathway to the land control, and if no new permitting or environmental issues have made a site unviable. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. These assumptions are based on past experience and are reviewed as part of management's budgeting and strategic planning. The valuations indicated by the impairment review are in excess of the carrying value of the development expenditure as at 31 December 2014.

Evaluation of levels of control or influence

The determination of the level of influence the group has over business is often a mix of contractually defined and subjective factors that can be critical to the appropriate accounting treatment of entities in the consolidated financial statements. Where the group owns between 20% and 50% of an entity and is in a position to exercise significant influence over the entity's operating and financial policies, the group treats the entity as an associate. Accordingly, the group, reviewed its equity interests that fall within this range and, given the fact that they can appoint a Director to the board of the entity they have concluded that they do have significant influence in the entity and therefore have accounted for as an associate accordingly.

Note 1: earnings per share

The calculation for basic earnings per share for the relevant period is based on the profit after income tax attributable to equity holder for each of the years ended 31 December 2014 and 2013 are as follows:

The earnings per share is calculated by dividing the profit attributable to equity holders of the Company by number of shares issued following the Company reorganisation.

The financial information has been prepared on a pro forma consolidated basis for the comparative year to 31 December 2013 due to merger accounting rules as applied under FRS6. Accordingly, pro forma earnings per share have been included based on the number of shares in the Company following the Company reorganisation but prior to the issues of shares to raise new funds. In 2013, this represents the number of shares issued by the company to affect the group restructuring. A total of 63,831,176 shares have been issued to the historical shareholder and other historical funding prior to any new fund raising.