Final Results

RNS Number : 2739V

Clean Energy Brazil PLC

29 October 2010

 

29 October 2010

Clean Energy Brazil PLC

("CEB" or the "Company")

Consolidated financial statements for the period ended 30 April 2010

Clean Energy Brazil PLC, an investment company focused on Brazil's sugar cane/ethanol industry, is pleased to announce its results for the period ended 30 April 2010.

Further enquiries:

Singer Capital Markets (Nominated Adviser) Jeff Keating	Tel: [phone]
IOMA Fund & Investment Management Limited (Administrator) Philip scales	Tel: [phone]

 

Chairman's Statement

Developments and strategy

The Company's NAV decreased to US$41.6 million (28 US cents per share) at 30 April 2010 from US$57.3 million (39 US cents per share) at 30 April 2009. This figure primarily reflects our decision to write down the Unialco investment from US$27.9 million to US$25.9 million, to provide US$6.88 relating to a potential claim by Unialco as described in note 22, the sale of our investment in Pantanal at a premium to book value, and a favourable foreign currency movement of US$ 3.5 million in reserves. As of 13 October 2010, our assets primarily comprise of our investment in Unialco MS as well as US$20.4 million of cash.

·      Realisation of assets: In May 2010, we sold CEB's wholly-owned subsidiary Pantanal Agro Industrial ("CEB Pantanal") for R$5 million (equivalent to approximately US$2.8 million). Under the terms of the agreement, CEB received R$4 million on closing and will receive an additional payment of R$1 million in May 2011. The sale price represents a 22% premium over 31 October 2009 book value.

Regarding our last remaining asset, a 33% stake in Unialco MS, we are currently in ongoing negotiations with Unialco S.A. to sell this stake back to them. There is no certainty that these negotiations will conclude successfully.

·      Rationalisation of costs: The Board has continually focused on streamlining CEB's cost structure.  As part of this effort, CEB has closed its Brazil offices, contracted with a local firm to be CEB's local representative, and commenced the process of closing CEB's subsidiaries in both Brazil and Luxemburg. In addition, we have renegotiated CEB's fee structure with various service providers. Our former CEO has left the Company, and we have decided to manage the Company at the Board level with the assistance of advisors as required.

I am hopeful that the negotiations for the sale of our stake in Unialco MS will conclude favourably and that we will be able to efficiently return capital to shareholders thereafter.

Jossef Barath

Chairman

29 October 2010

Corporate Governance Statement

Although the Company is not obliged by the listing rules to do so, the Board intends, where appropriate for a Company of its size, to comply with the main provisions of the principles of good governance and code of best practice set out in the Combined Code ('the Code').

Responsibilities of the Board

The Board of Directors is responsible for the determination of the investment policy of the Company and for its overall supervision via the investment policy and objectives that it has set out.  The Board is also responsible for the Company's day-to-day operations; however, since the Board members are all non-executive, in order to fulfil these obligations, the Board has delegated a number of the operations through arrangements with the Administrator.

At each of the regular Board meetings held, the financial performance of the Company and its portfolio assets are reviewed. 

Audit Committee

The Audit Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision.  The Audit Committee has primary responsibility for reviewing the financial statements and the accounting policies, principles and practice underlying them, liaising with the external auditors and reviewing the effectiveness of internal controls.  The Audit Committee maintains a risk register to help it identify, evaluate, monitor and control risks.

The terms of reference of the Audit Committee covers the following:

•     The composition of the Committee, quorum and who else attends meetings. 

•     Appointment and duties of the Chairman.

•           Duties in relation to external reporting, including reviews of financial statements, shareholder communications and other announcements.

•           Duties in relation to the external auditors, including appointment/ dismissal, approval of fee, and discussion of the audit.

•           Duties in relation to internal systems, procedures and controls.

Consolidated Statement of Comprehensive Income

For the year ended 30 April 2010

		2010		2009
	Note	$'000		$'000
Interest income on bank balances		292		1,595
Sundry income		16		-
Loss on sale of agricultural assets		(170)		(20)
Fair value movement on revaluation of investments	10	(2,015)		(89,174)
Fair value movement on agricultural assets	12	(1,164)		(3,624)
Investment expense	21	(1,689)		-
Cancellation of operating leases of land		(1,492)		(910)
Net investment loss		( 6,222)		(92,133)
Provision for potential claim	22	(6,880)		-
Other administration fees and expenses	5	(5,858)		(5,366)
Total administrative expenses		(12,738)		(5,366)
Foreign exchange gain/(loss)		127		(4,861)
Finance costs	6	(35)		(32)
Loss for the year before taxation		(18,868)		(102,392)
Taxation	8	(239)		(641)
Loss for the year		(19,107)		(103,033)
Other comprehensive income/(loss)
Foreign exchange gain/(loss) on translation of subsidiaries		3,464		(4,000)
Total comprehensive loss for the year		(15,643)		(107,033)
Basic and diluted loss per share	9	$(0.13)		$(0.70)

Consolidated Statement of Financial Position

As at 30 April 2010

	Note	2010		2009
		$'000		$'000
Non-current assets
Investments at fair value through profit or loss	10	25,911		36,663
Property, plant and equipment	11	133		206
Total non-current assets		26,044		36,869
Current assets
Trade and other receivables		468		566
Agricultural assets	12	2,616		2,283
Cash and cash equivalents		20,079		26,593
Total current assets		23,163		29,442
Total assets		49,207		66,311
Current liabilities
Trade and other payables	7	(701)		(9,042)
Provision for potential claim	22	(6,880)		-
Total liabilities		(7,581)		(9,042)
Net assets		41,626		57,269
Represented by:
Share capital	13	2,920		2,920
Share premium	14	-		82,584
Distributable reserves		36,422		(27,055)
Other reserves		2,284		(1,180)
Total equity		41,626		57,269
Net Asset Value per share ($ )	19	0.28		0.39

Company Statement of Financial Position

As at 30 April 2010

	Note	2010		2009
		$'000		$'000
Non-current assets
Interests in subsidiaries	15	29,682		44,766
Total non-current assets		29,682		44,766
Current assets
Trade and other receivables		87		28
Cash and cash equivalents		11,763		20,735
Total current assets		11,850		20,763
Total assets		41,532		65,529
Current liabilities
Trade and other payables	7	(124)		(8,147)
Total liabilities		(124)		(8,147)
Net assets		41,408		57,382
Represented by:
Share capital	13	2,920		2,920
Share premium	14	-		82,584
Distributable reserves		38,488		(28,122)
Total equity		41,408		57,382

The Company made a loss of $ 15,974,000 (2009: loss of $106,782,000) for the year.

Consolidated Statement of Changes in Equity

For the year ended 30 April 2010

	Share Capital	Share Premium	Distributable Reserves	Other Reserves	Total Shareholders' Funds	Non-controlling interests	Total Equity
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 May 2008	2,920	82,584	75,978	2,820	164,302	16	164,318
Loss for the year	-	-	(103,033)	-	(103,033)	-	(103,033)
Other comprehensive loss
Foreign exchange loss  on translation of subsidiaries	-	-	-	(4,000)	(4,000)	-	(4000)
Transactions with owners recorded directly in equity
Reclassification of non-controlling interests	-	-	-	-	-	(16)	(16)
Balance at 30 April 2009	2,920	82,584	(27,055)	(1,180)	57,269	-	57,269
Balance at 1 May 2009	2,920	82,584	(27,055)	(1,180)	57,269	-	57,269
Loss for the year	-	-	(19,107)	-	(19,107))	-	(19,107)
Other comprehensive income
Foreign exchange gain on translation of subsidiaries	-	-	-	3,464	3,464	-	3,464
Transactions with owners recorded directly in equity
Cancellation of share premium	-	(82,584)	82,584	-	-	-	-
Balance at 30 April 2010	2,920	-	36,422	2,284	41,626	-	41,626

Company Statement of Changes in Equity

For the year ended 30 April 2010

	Share capital	Share premium	Distributable reserves	Total equity
	$'000	$'000	$'000	$'000
Balance as at 1 May 2008	2,920	82,584	78,660	164,164
Loss for the year	-	-	(106,782)	(106,782)
Balance at 30 April 2009	2,920	82,584	(28,122)	57,382
Balance as at 1 May 2009	2,920	82,584	(28,122)	57,382
Loss for the year	-	-	(15,974)	(15,974)
Transactions with owners recorded directly in equity
Cancellation of share premium	-	(82,584)	82,584	-
Balance at 30 April 2010	2,920	-	38,488	41,408

Consolidated Statement of Cash Flows

For the year ended 30 April 2010

	Note	2010		2009
		$'000		$'000
Cash flows from operating activities
Loss for the year		(19,107)		(103,033)
Adjustments for:
Fair value adjustments		3,179		92,798
Finance income and expense		(384)		3,296
Tax paid		239		641
Depreciation of fixed assets		20		9
Changes in working capital
Change in trade and other receivables		241		606
Change in agricultural assets		244		(2,437)
Change in provision for potential claim		6,880		-
Change in trade and other payables		(67)		7,071
Net cash flows used in operating activities		(8,755)		(1,049)
Cash flows from investing activities
Purchase of investments		-		(9,010)
Interest received		292		1,595
Disposal of fixed assets	12	67		-
Purchase of fixed assets	12	(14)		(52)
Net cash flows generated from/(used in) investing activities		345		(7,467)
Cash flows from financing activities
Interest expense and other finance paid		(35)		(32)
Net cash flows used in financing activities		(35)		(32)
Net decrease in cash and cash equivalents		(8,445)		(8,548)
Cash and cash equivalents at start of year		26,593		42,823
Effect of exchange rate fluctuations on cash balances		1,931		(7,682)
Cash and cash equivalents at end of year		20,079		26,593

Notes to the Financial Statements

For the year ended 30 April 2010

1.   General information

The Company is a closed-end investment company incorporated on 19 September 2006 in the Isle of Man as a public limited company. The address of its registered office is IOMA House, Hope Street, Douglas, Isle of Man.

The Company is listed on the Alternative Investment Market of the London Stock Exchange. 

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the entities included in the consolidated financial statements.

2.   Basis of preparation

(a)  Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The consolidated financial statements were authorised for issue by the Board of Directors on 29 October 2010.

(b)  Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments at fair value through profit or loss and agricultural assets which are measured at fair value in the statement of financial position.

(c) Functional and presentation currency

These consolidated financial statements are presented in US Dollars, which is the Company's functional currency. All financial information presented in US Dollars has been rounded to the nearest thousand.

(d)  Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

(e)  Changes in accounting policy

Presentation of financial statements

The Group applied revised IAS 1 Presentation of Financial Statements (2007), which became effective as of 1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. 

Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

(f)   Other accounting developments

Disclosures pertaining to fair values and liquidity of financial instruments

The Company has applied Improving Disclosures about Financial Instruments (Amendments to IFRS 7), issued in March 2009, that require enhanced disclosures about fair value measurements and liquidity risk in respect of financial instruments.

The amendments require that fair value measurement disclosures use a three-level fair value hierarchy that reflects the significance of the inputs used in measuring fair values of financial instruments. Specific disclosures are required when fair value measurements are categorised as Level 3 (significant unobservable inputs) in the fair value hierarchy. The amendments require that any significant transfers between Level 1 and Level 2 of the fair value hierarchy be disclosed separately, distinguishing between transfers into and out of each level. Furthermore, changes in valuation techniques from one period to another, including the reasons therefore, are required to be disclosed for each class of financial instruments.

Disclosures in respect of fair values of financial instruments are included in note 10.

Furthermore the definition of liquidity risk has been amended and it is now defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The amendments require disclosure of a maturity analysis for non-derivative and derivative financial liabilities, but contractual maturities are required to be disclosed for derivative financial liabilities only when contractual maturities are essential for an understanding of the timing of cash flows. For issued financial guarantee contracts, the amendments require maximum amount of the guarantee to be disclosed in the earliest period in which the guarantee could be called.

Disclosures in respect of liquidity risk are included in note 4.

3.   Summary of significant accounting policies

3.1  Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries and subsidiary undertakings). Control is achieved where the Company has the power to govern the financial and operating policies of a portfolio company so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

3.2  Income

Dividend income from investments is recognised when the Company's right to receive payment has been established, normally the ex-dividend date.

Interest income is recognised using the effective interest method.

 

3.3  Expenses

All expenses are accrued for on an accruals basis and are presented as revenue items except for expenses that are incidental to the disposal of an investment which are deducted from the disposal proceeds.

 

3.4  Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

(a)  Current Income tax 

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

 (b)       Deferred income tax

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

 

3.5  Foreign currency transactions

Foreign currency transactions

Transactions in other currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in other currencies at the reporting are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into US Dollars at foreign exchange rates ruling at the dates the fair value was determined.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to US Dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to US Dollars at average exchange rates during the year.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the operation is a   non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount 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 in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and presented in the translation reserve in equity.

3.6.       Segment reporting

The Group operates in one business and geographic segment, being investment in Brazil's sugar and ethanol industries. No additional disclosure is included in relation to segment reporting, as the Group's activities are limited to one business and geographic segment.

3.7  Financial instruments

Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of a financial instrument.  Financial assets and financial liabilities are offset if there is a legally enforceable right to set off the recognised amounts and interests and it is intended to settle on a net basis.

 

3.8  Investments

Investments of the Group where the Group does not have control are categorised as at fair value through profit or loss.  They are measured at fair value.  Unrealised gains and losses arising from revaluation are taken to the profit or loss.

Investments in entities over which the Group has control are consolidated in accordance with IAS 27.

The Group has taken advantage of an exemption in IAS 28, Investments in Associates, which permits investments in associates held by venture capital organisations, investment funds and similar entities to account for such investments at fair value through profit or loss.

The fair value of unquoted securities is estimated by the Directors using the most appropriate valuation techniques for each investment.

Securities quoted or traded on a recognised stock exchange or other regulated market are valued by reference to the last available bid price.

 

3.9  Agricultural assets

The agricultural assets are valued at fair value as determined by the Directors.

3.10      Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

 

3.11      Provisions

A provision is recognised in the statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation, and the obligation can be reliably measured. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

 

3.12      Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

 

3.13      Interest expense

Interest expenses for borrowings are recognised within "finance costs" in the statement of comprehensive income using the effective interest rate method.

3.14     Future changes in accounting policies

IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements:

New/Revised International Financial Reporting Standards (IAS/IFRS)	Effective date (accounting periods Commencing on or  after)
IAS 1 Presentation of Financial Statements (Revised April 2009)*	1 January 2010
IAS 7 Statement of Cash Flows (Revised April 2009)*	1 January 2010
IAS 17 Leases (Revised April 2009)*	1 January 2010
IAS 24 Related Party Disclosures -  Revised definition of related parties	1 January 2011
IAS 28 Investments in Associates - Consequential amendments resulting from amendments to IFRS 3 (2008)	1 July 2009
IAS 31 Interests in Joint Ventures - Consequential amendments resulting from amendments to IFRS 3 (2008)	1 July 2009
IAS 32 Financial Instruments: Presentation -  Amendments relating to classification of rights issues	1 February 2010
IAS 36 Impairment of Assets (Revised April 2009)*	1 January 2010
IAS 38 Intangible Assets (Revised April 2009)*	1 July 2009
IAS 39 Financial Instruments: Recognition and Measurement - Amendments for embedded derivatives when reclassifying financial instruments	30 June 2009
IAS 39 Financial Instruments: Recognition and Measurement - Amendments for eligible hedged items	1 July 2009
IAS 39 Financial Instruments: Recognition and Measurement (Revised April 2009)*	1 January 2010
IFRS 2 Share-based Payment - Amendments relating to group cash-settled share-based payment transactions	1 January 2010
IFRS 3 Business Combinations - Comprehensive revision on applying the acquisition method	1 July 2009
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Revised April 2009)*	1 January 2010
IFRS 8 Operating Segments (Revised April 2009)*	1 January 2010
IFRS 9 Financial Instruments - Classification and Measurement	1 January 2013
IFRIC Interpretation
IFRIC 17 Distributions of Non-Cash Assets to Owners	1 July 2009
IFRIC 18 Transfers of Assets from Customers	1 July 2009
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments	1 July 2010

*Amendments resulting from April 2009 Annual Improvements to IFRSs

The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application.

4.   Financial risk management

The Group's activities expose it to a variety of financial risks: market risk (including currency risk,  price risk and interest rate risk), credit risk and liquidity risk.  The Board of Directors identify and evaluate financial risks.

(a) Market risk

(i)      Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Brazilian Real. Foreign exchange risk arises from future commercial transactions, recognised monetary assets and liabilities and net investments in foreign operations.  The value of assets exposed to the Brazilian Real at the year end amounted to $29,030,591 (2009: $35,888,000).

At 30 April 2010, had the exchange rate between the Brazilian Real and US dollar increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets would amount to approximately $1,456,400 (2009: $1,794,000).

(ii)     Price risk

The Group is exposed to movements in market price relating to its unquoted investments, which are stated at fair value.  The fair value of these investments is sensitive to movements in sugar and bioethanol prices.  The Group seeks to manage this risk at the operational investee level.

At 30 April 2010, had the fair value of the investments increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets would amount to approximately $1,295,550 (2009: $1,833,000).

(iii)     Cash flow interest rate risk

The Group's cash and cash equivalents are invested at short term market interest rates. 

The table below summarises the Group's exposure to interest rate risks.  It includes the Group's financial assets and liabilities at the earlier of contractual re-pricing or maturity date, measured by the carrying values of assets and liabilities.

30 April 2010	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non- interest bearing	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Financial assets
Investments at fair value through profit or loss	-	-	-	-	-	25,911	25,911
Trade and other receivables	-	-	-	-	-	468	468
Cash and cash equivalents	19,542	537	-	-	-	-	20,079
Total financial assets	19,542	537	-	-	-	26,379	46,458
Financial liabilities
Trade and other payables	-	-	-	-	-	701	701
Provision for potential claim	-	-	-	-	-	6,880	6,880
Total financial liabilities	-	-	-	-	-	7,581	7,581
Total interest rate sensitivity gap	19,542	537	-	-	-

30 April 2009	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non- interest bearing	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Financial assets
Investments at fair value through profit or loss	-	-	-	-	-	36,663	36,663
Trade and other receivables	-	-	-	-	-	566	566
Cash and cash equivalents	17,960	-	8,633	-	-	-	26,593
Total financial assets	17,960	-	8,633	-	-	37,229	63,822
Financial liabilities
Trade and other payables	-	-	-	-	-	9,042	9,042
Total financial liabilities	-	-	-	-	-	9,042	9,042
Total interest rate sensitivity gap	17,960	-	8,633	-	-

The Group is not subject to significant fair value interest rate risk, therefore no sensitivity analysis has been provided.

(b) Credit risk

Credit risk arises on investments, cash balances and debtor balances.  The amount of credit risk is equal to the amounts stated in the statement of financial position for each of these assets.  Cash balances and transactions are limited to high-credit-quality financial institutions. 

The Group has no significant concentrations of credit risk.

There are no impairment provisions as at 30 April 2010 (2009: nil).

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group has adopted a policy of maintaining surplus funds with approved financial institutions.

Residual undiscounted contractual maturities of financial liabilities:

30 April 2010	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	$'000	$'000	$'000	$'000	$'000	$'000
Financial liabilities
Trade and other payables	701	-	-	-	-	-
Provision for potential claim	-	-	-	-	-	6,880

30 April 2009	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	$'000	$'000	$'000	$'000	$'000	$'000
Financial liabilities
Trade and other payables	9,042	-	-	-	-	-

5.   Other administration fees and expenses

Other administration fees and expenses consist of the following:

	2010	2009
	$'000	$'000
Audit fees	209	61
Insurance	46	86
Pre-operational project costs	-	62
Professional fees	2,819	1,447
Administration costs	304	339
Staff costs	1,279	1,566
Directors' fees (note 20)	418	584
Sundry expenses	783	1,221
Total	5,858	5,366

6.   Finance costs

	2010	2009
	$'000	$'000
Bank charges	35	32
Total	35	32

7.    Trade and other payables

	2010	2009	2010	2009
	Group	Group	Company	Company
	£'000	£'000	£'000	£'000
Consideration for Usaciga investment	-	7,110	-	7,110
Accruals	153	647	49	351
Trade payables	548	1,285	75	686
	701	9,042	124	8,147

The consideration for the Usaciga investment was the amount held in the escrow account under the terms of the original purchase agreement but was subsequently released as part of the sale proceeds from the Usasiga disposal.

8.   Taxation

The Company is resident for tax purposes in the Isle of Man and is subject to Isle of Man income tax at the current rate of 0%. The tax charge of $239,000 (2009 $641,000) arose on the profits of some of the Brazilian subsidiaries (primarily from interest income).

9.   Loss per share

Basic loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of ordinary shares outstanding during the year.

	2010	2009
Loss attributable to shareholders   ($'000)	(19,107)	(103,033)
Weighted average number of ordinary shares in issue (thousands)	147,564	147,564
Basic loss per share	($0.13)	($0.70)

The Company has no dilutive potential ordinary shares, as the market price of the shares has been greater than the exercise price of the warrants throughout the year.  Therefore the diluted loss per share is the same as the basic loss per share.

10.   Investments at fair value through profit or loss

Investments comprise one holding as follows:

Name	Country of Incorporation	Proportion of ownership interest
Unialco MS Participaçoes SA	Brazil	33%

This investment is a joint venture. However, it is not equity accounted, but designated as held at fair value through profit or loss in accordance with a permitted exemption under IAS31.

The investment is sated at fair value, as estimated by the Directors.

	Usaciga	Unialco	Total
	$'000	$'000	$'000
Balance at 1 May 2009	8,737	27,926	36,663
Disposals	(8,737)	-	(8,737)
Fair value adjustment	-	(2,015)	(2,015)
Balance at 30 April 2010	-	25,911	25,911

11.    Property, plant and equipment

Group	Land and buildings	Fixtures and equipment	Total
	$'000	$'000	$'000
Balance at 1 May 2009	53	176	229
Additions	14	-	14
Disposals	-	(67)	(67)
Balance at 30 April 2010	67	109	176
Accumulated depreciation
Balance at 1 May 2009	-	23	23
Charge for the year	2	18	20
Balance at 30 April 2010	2	41	43
Carrying value at 30 April 2010	65	68	133
Carrying value at 30 April 2009	53	153	206

12.    Agricultural assets

	2010 $'000	2009 $'000
Balance brought forward	2,283	4,464
Increases due to new plantations	1,019	2,710
Cost of cane sold	(1,155)	(273)
Foreign exchange gain/(loss)	1,633	(994)
Fair value adjustment	(1,164)	(3,624)
Balance carried forward	2,616	2,283

At 30 April 2010 this comprised of approximately 2590 hectares of sugar cane. The Directors have revalued the agricultural assets to reflect the fair value at the year end.

13.   Share capital

Ordinary shares of 1pence each As at 30 April 2010 and 30 April 2009	Number of shares	Value £'000
Issued	147,563,929	1,475
Authorised	600,000,000	6,000

All shares are fully paid and each ordinary share carries one vote.

In addition to the ordinary shares, 25,000,000 equity warrants are admitted to trading on the AIM market. Each warrant entitles the holder to subscribe for one new ordinary share at £1.00 per share, subject to adjustment as detailed in the Company's Admission Document published in December 2006.

Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.   The Board manages the Group's affairs to maximize shareholder value.

The Company has authority to purchase up to 10% of its own shares on the market, so as to help manage the discount to net asset value at which the shares may trade.  No shares were purchased in the year ended 30 April 2010.

Group capital comprises share capital and reserves.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

14.   Share premium

The share premium account represents the difference between the issue price of each new share and the par value of £0.01 per share, less share issue costs. On 15 June 2007, the High Court in the Isle of Man approved a reduction in the share capital of the Company which had arisen upon the placing of shares in December 2006, by way of cancellation of the share premium account.  The amount cancelled was credited to distributable reserves. 

Further issues of shares in the year ended 30 April 2008 created new amounts of share premium.  A further application was made to the High Court for reclassification of the share premium account which was approved on the 22 of December 2009. This resulted in the reclassification of $82,584,000 share premium to distributable reserves.

15.   Subsidiaries 

The cost of investment in subsidiaries in the Company's financial statements are recorded at cost less impairment allowance in the financial statements of the Company and the results of the subsidiaries are included in the consolidated financial statements.

Name	Country of Incorporation	Proportion of ownership interest
Clean Energy Brazil Ltd.	Cayman Islands	100%

In addition to the direct subsidiary noted above, the Company has an indirect interest in the following entities through its subsidiary.

Name	Country of Incorporation	Proportion of ownership interest
CEB Unicorn S.a.r.l.	Luxembourg	100%
CEB Unialco S.a.r.l.	Luxembourg	100%
CEB Pantanal S.a.r.l.	Luxembourg	100%
CEB Agua Limpa S.a.r.l.	Luxembourg	100%
CEB Cesar S.a.r.l.	Luxembourg	100%
CEB Beta Participaçoes Ltda.	Brazil	100%
CEB Gamma Participaçoes Ltda.	Brazil	100%
CEB Sigma Participaçoes Ltda.	Brazil	100%
CEB Zeta Participaçoes Ltda.	Brazil	100%
CEB Omega Participaçoes Ltda.	Brazil	100%
Pantanal Agro Industrial Ltda.	Brazil	100%
CEB Brasil Planejamento Empresarial Ltda. (formerly:Temple Capital Partners Planejamento Empresarial Ltda.)	Brazil	88%

Pantanal Agro Industrial Ltda and Destilaria Agua Limpa Ltda. are operational companies engaged in the production of sugar and ethanol. 

16.   Leasing commitments

The Group had the following commitments for operating leases of land:

	2010	2009
	$'000	$'000
Payable not later than one year	-	1,188
Payable later than one year and not later than five years	-	4,356
Payable later than five years	-	-
	-	5,544

17.   Related party transactions

Philip Scales was a Director of the Company for part of the year and of the Administrator.  The Administrator received fees of £84,000 (2009: £105,000) in the year. 

18.   Directors' interests

The following Directors had interests in the shares of the Company as at 30 April 2010:

	Number of shares	Number of warrants
Timothy Walker	25,751	6,250
Marcelo Junqueira	2,105,003	25,000

19.  Net asset value (NAV)

The NAV per share is calculated by dividing the net assets attributable to the equity holders of the Company at the end of the year by the number of shares in issue. 

	2010	2009
Net assets	$41,626,000	$57,269,000
Number of shares in issue (note 13)	147,563,929	147,563,929
NAV per share	$0.28	$0.39

20.   Directors' remuneration

		2010	2009
		£'000	£'000
Josef (Yossi) Barath (Chairman)	From date of appointment	6
Timothy Walker (Audit Committee Chairman)	From date of appointment	48	50
Marcelo Schunn Diniz Junqueira	From date of appointment	55	40
Josef (Yossi) Raucher	From date of appointment	-	-
Eitan Milgram	From date of appointment	-	-
Philip Scales	To date of resignation	10	10
Antonio Monteiro de Castro	To date of resignation	35	70
Richard Jewson	To date of resignation	24	40
Earl Michael St Aldwyn	To date of resignation	14	40
Nigel Wood	To date of resignation	47	40
Peter Thompson	To date of resignation	-	35
		239	325

All the Directors were non-executive, except for Marcelo Junqueira who acted as CEO from 8 April 2008 until August 2009.  For this he received a salary and performance bonus of $299,000 (2009: $387,000) during the year.

21. Investment expense

The investment expense relates to services provided in association with the disposal of Usaciga.

22. Provision

A provision has been included for a potential claim against Clean Energy Brazil Limited ("CEBL"), pursuant to an investment agreement dated 10 December 2007 made between Unialco MS Participações S/A, CEBL, Unialco S/A -Álcool e Açúcar, and others relating to Unialco MS Participações S/A. The Company intends to vigorously defend against any claim in this matter

23.   Subsequent events

In May 2010, the Company sold CEB's wholly-owned subsidiary Pantanal Agro Industrial ("CEB Pantanal") for R$5 million (equivalent to approximately US$2.8 million). Under the terms of the agreement, CEB received R$4 million on closing and will receive an additional payment of R$1 million in May 2011.

 

END

 

 

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