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IPSA GROUP PLC - Audited Results For The Year Ended 31 March 2015

Release Date: 15/03/2016 17:10
Code(s): IPS     PDF:  
Wrap Text
Audited Results For The Year Ended 31 March 2015

IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA ISIN GB00BOCJ3F01
JSE Share Code IPS ISIN GB00BOCJ3F01
("IPSA" or "the Company")

15 March 2016

                       Audited Results for the year ended 31 March 2015

IPSA, the AIM and AltX listed independent power plant developer with operations in southern Africa,
today announces its audited results for the year ended 31 March 2015.

Highlights:

    -   Revenue of £3.6 million (year to 31 March 2014 - £3.7 million)
    -   Group loss after tax of £6.9 million (year to 31 March 2014 - £0.4 Profit)
    -   Plant gross loss of £4.6 million (year to 31 March 2014 - £1.0 million loss)
    -   Plant operating loss £4.8 million (year to 31 March 2014 - £1.6 million loss)
    -   Post balance sheet disposal of all subsidiaries for total consideration of £1.9m

The accounts have been prepared on a “going concern” basis resulting in an adverse opinion from the
auditors due to a differing view than that of the directors. The Company is reliant on the forbearance
of its creditors whilst it seeks to realise its assets being principally the balance of plant held for sale
and its receivable from Rurelec PLC. Whilst there is no formal agreement with the Group’s principal
creditor Ethos Energy or any other creditor for a moratorium on the amounts now due the board
believes it will be able to realise sufficient proceeds from the sale of its assets and realisation of its
debtors due to repay all of its creditors. However there can be no certainty that this will be the case
and the risk remains that should this not be achievable in the time required that the Company may
need to apply for administration.

It is the directors’ intention to focus on the realisation of its assets and repayment of its creditors.
Following the disposal of the groups operating subsidiary in February 2016 the Company is now an
Aim Rule 15 cash shell and the Company is seeking an acquisition constituting a reverse takeover.

The Company's shares have been suspended from trading since 23 September 2015. Trading in the
shares will continue to be suspended as the Company has not published its interim results for the six
months ended 30 September 2015 in accordance with Aim Rule 18 which were due by 31 December
2015.

The Company is looking to publish the interim results as soon as possible.

 The Group’s financial statements will be posted to shareholders today and are now available on the
Company’s website at www.ipsagroup.co.uk together with the notice for the Company’s AGM, which
will be held at 10.30 am on 7 April 2016 at 17th Floor, Millbank Tower, 21-24 Millbank, London SW1P
4QP.

For further information contact:

Mark Otto, Acting CEO, IPSA Group PLC +27 (84) 219 2000
Peter Earl, Director, IPSA Group PLC +44 207 793 5600

James Joyce and James Bavister, WH Ireland Ltd (Nominated Adviser and Broker)  +44 (0)20 7220
1666

Riaan van Heerden, PSG Capital (Pty.) Limited, (South African Sponsors)        +27 11 797 8400

Or visit IPSA's website: www.ipsagroup.co.uk
STRATEGIC REPORT

Dear Shareholder,

I present to the shareholders of IPSA Group PLC (the “Company”) and its subsidiaries (together the
“Group”) the much delayed Report and Accounts for the year ended 31 March 2015. Since the year
end, the Company has sold its principal operating business in South Africa by disposing of its
shareholding in Blazeway Engineering Pty Ltd (“Blazeway”) and this has affected the reporting of the
Group accounts. Under IFRS accounting standards, the directors consider this disposal an adjusting
event relating to IAS 10 after the Reporting Period, as the Group no longer expects to receive the
future cash flows of the disposed entities. It is therefore appropriate that entity and consolidation
adjustments are made to the carrying value of Blazeway to reflect the sale proceeds. Details of the
disposal are contained in the Director’s Report

The Company has for many years owned and operated Newcastle Cogeneration (Pty) Ltd,
(“NewCogen”) a wholly owned subsidiary of Blazeway which is a combined heat and power plant
located in Newcastle, South Africa. The overall performance in 2015 saw higher operational
efficiencies and higher output than previous years due in the main to the addition of a 1 MW Deutz
engine. Announced after the year end, NewCogen was awarded a one year extension to its Medium
Term Power Purchase Programme (“MTPPP”) contract (with Eskom). NewCogen was also successful
in drawing down a loan from the Industrial Development Corporation (“IDC”) for the installation of
the two Jenbacher gas engines. The Jenbacher Installation commenced and the engines were
expected to be in commercial operation by the summer of 2016 resulting in an additional 3.8 MW
being made available to the existing operation. However a chronic shortage of funds in late 2015
delayed that installation and placed further pressure on the Group’s already tight cash position.

Consistent with prior years, we are required under the accounting rules to recognise an impairment
of the generating assets at the year-end of £5.1m. In addition, we had recognised an impairment in
the investment/loans to our subsidiary of £22.9m in view of the delays in it achieving profitability and
the development status of further planned expansion. The proceeds to be received for the disposal
are significantly less than the historical investment value resulting in an impairment of £23 million.
The table in note 14 provides further information regarding the impact of various discount rates on
the value of the assets.

The Group has always maintained its commitment to complete payment of outstanding sums to Ethos
Energy Italia SpA (“Ethos”) and to other creditors. This commitment is now totally dependent upon
receiving the funds due from Rurelec PLC (“Rurelec”) and the sale of the balance of plant pertaining
to the 701 turbines (the “BOP”) as the Company has no other sources of funding available to it at
this time.

Strategy
The Company’s strategy following the disposal of NewCogen is to sell the BOP for a target price of
£4.0 million. The sale of the BOP at this figure or more will clear all remaining Company creditors,
of which Ethos is by far the largest and leave IPSA as a quoted cash shell suitable as a partner for a
potential reverse takeover candidate.

Group Results
Group turnover for the year was £3.6m (2014: £3.7m), the Group recorded a gross loss for 2015 of
£5.3m (2014: loss of £957k). The operating loss increased from £2.3m last year to a loss of £6.78m
in the current year.

The Directors have conducted an impairment review of the carrying value of the remaining ancillary
equipment and consider that no impairment has occurred. The carrying value continues to be
sufficient to cover a significant portion of the creditor position.

Following the sale of the remaining two turbines in June 2013 to Rurelec, the balance outstanding to
the Group has only been paid in part through the settlement by Rurelec of €1.4m, after the year end,
of the total outstanding amounts due to Ethos. The balance outstanding from Rurelec re the turbines
is currently £1.8m. The balance due to Ethos has been fully provided in the accounts at £4.1m.

NewCogen
The plant recorded an overall loss for the year of £4.6m (2014: £2.5m) after reporting a £3.9m
impairment and lower foreign currency losses as a result of the reorganisation of NewCogen’s finances
and the conversion of approximately £11.1m of its debt into South African Rand (“ZAR”). This debt
is awaiting capitalisation approval from the South African Reserve Bank and is treated as equity in
the Group Accounts.

The plant recorded an excess of revenues over gas costs of £0.5m (2014: £0.6m) and an operating
loss of £4.6m (2014: £1.5m). In local currency, turnover was ZAR 65.0m (2014: ZAR 59.6m), and
the operating loss, excluding depreciation and the impairment charge, was ZAR 3.7m (2014 ZAR
3.2m).

Board of Directors
The death of Phil Metcalf, IPSA’s CEO, in November 2014 was a significant interruption to the Group’s
strategic drive. In July 2015 we announced the resignations of Peter Earl and Elizabeth Shaw and
thank them both for their significant contributions since the Group was formed. Mark Otto who has
acted as Chief Operating Officer since 2013 was appointed as Acting Chief Executive Officer to provide
continuity of the operation in Newcastle and to resolve all the issues on hand pending the disposal of
Blazeway and NewCogen. As announced on 1st March 2016 Peter Earl has re-joined the Board.

Neil Bryson, who has served as senior non-executive director for nine years and I have both decided
this is a convenient juncture to step down from the board and therefore will not be standing for re-
election. I would like to express the board’s heartfelt thanks to Neil for his contribution through
challenging times and wish him well. I have enjoyed the opportunity to bring competition into the
electricity sector in South Africa through my involvement with IPSA and look forward to hearing that
the new capacity at Newcastle has been successfully commissioned and that new BEE industry players
have been brought into the business

Outlook
We have continued to work towards payment of our principal creditor Ethos and expect to meet all
but the last € 2.65m in the coming weeks, this will be dependent on receipts from Rurelec. Progress
is been made in terms of receiving funds from Rurelec but the disposal of the BOP will take more time
as a result of tough global economic conditions.

P Earl
Director
14 March 2016
STRATEGIC REPORT - REVIEW OF OPERATIONS


NEWCOGEN

In the past year we have continued to see reliable operations at the NewCogen power plant, with
availability remaining above 95 per cent. and thermal efficiencies improving with reliable operations.
Our operating team has gained valuable experience in operating our Deutz gas engine and is fully
engaged in preparations for operating the two Jenbacher engines.

For the year of operation ended March 2015, NewCogen generated 54,232 MWh of electricity (2014:
46,377 MWh), Steam sales were recorded as 21,511 tonnes of steam (2014: 57,800 tonnes), a
reduction following entry into commercial operation of the new coal fired boilers installed on the
Karbochem site. Electricity was delivered to Eskom under the MTPPP contract, which was renewed
for a further year until March 2016. An addendum to the existing contract allows for two additional
extensions of two years each, totalling four years pending conditions to be met by Eskom, which is
currently subject to further discussions between the parties.

During the year we consumed 762,515 GJ (2014: 740,186 GJ) of methane rich gas once again
meeting our minimum Take or Pay obligation of 700,000 GJ.

In April 2014 the base energy rate for electricity was decreased as per the contracted framework of
the MTPPP. However, the new addendum signed in March 2015 allowed for an upward adjustment in
the base energy rate to compensate for the previous decrease in 2014. For the financial year under
review, the gas price increased by 5.9 per cent. in April 2014 and 4.4 per cent. in October 2014. At
present the gas price is adjusted bi-annually based on a combination of South African PPI (producer
price index) and the price of Brent Crude. The national energy regulator in South Africa (“NERSA”)
has approved a new pricing mechanism for gas pricing together with a maximum pricing limit that is
now under review and discussion with the gas supplier to NewCogen for implementation in 2016. The
extent of the gas pricing changes are not yet finalised between the parties.

I am very pleased to report that there have been zero incidences or Lost Time Accidents in the past
year with over 2,000 days worked without lost time. NewCogen has a SETA (“Sector Educational and
Training Authority”) approved and accredited training programme to train qualified electrical
technicians from the Durban University of Technology for a period of one year. The last year saw two
students complete their training, one of whom was subsequently employed full time on the site.
Another two students were also recruited for training for the 2015 calendar year bringing the number
of apprenticeships completed on site to a total of six.

I would like to thank our team at NewCogen for their dedication in maintaining stable operations at
the plant and also, particularly to express our appreciation to our accountant, Basil Tollner who has
recently retired after some ten years of loyal service to the Company.

BUSINESS REVIEW

The business of NewCogen was established to supply steam to the host facility, Karbochem and power
to Eskom through the Karbochem substation. In November 2005 the Company acquired the 18 MW
cogeneration plant located at Bury, East Lancashire and commenced the necessary work to dismantle
and ship the equipment to South Africa. Construction completed in 2007. Various delays and short
term contracts to supply power and steam existed up to August 2010 when NewCogen and Eskom
were finally in a position to execute the MTPPP contract. A new gas contract was negotiated in early
2011 and steady state operations began in late March 2011. During its operating history, the plant
has sold steam to Karbochem, Lanxess and African Amines under ad hoc arrangements and power to
Eskom under the MTPPP. Whilst the MTPPP offers NewCogen short term supply opportunities on a two
shift basis, the key driver is to secure a long term power purchase agreement (“PPA”) as a base load
operation.

ETHOS SETTLEMENT

We expect in the next quarter to progress with the settlement of the Ethos Energy claim as Rurelec
has committed to pay a further £1.2m in terms of the Turbine sale to Rurelec. At the date of this
report, €1.54m has been paid. Separately, the final amount owing of €2.65m due from the Company
at the end of September 2015 is still outstanding but acknowledged, and efforts are being made to
meet the Company’s obligations. Following the sale of the last remaining turbines to Rurelec we have
the balance of plant with a carrying value of £4.0m remaining on our books.     Efforts are being made
to sell the BOP as soon as possible.

IRIS CLAIM

Further to the original claim by Iris at a court hearing in Malaysia in March 2014, the court accepted
an application by the Group that the Malaysian courts should not have jurisdiction over the claim and
awarded costs in favour of the Group. Iris subsequently filed and was granted leave to appeal the
matter in the Malaysian Court of Appeal on 2 November 2015. However, at a hearing in the Federal
Court of Malaysia on 3 February 2016, Iris’s final leave to appeal was dismissed and costs awarded
to the Company. The Directors believe that this brings the Iris litigation to a successful close.

WORKING CAPITAL

Working capital has continued to be very tight for the Group with NewCogen able to service all
creditors until October this year when a failure of gas turbine two has almost halved NewCogen’s
output rendering it unable to cover overhead costs in South Africa.

NewCogen entered into a loan agreement with the IDC in South Africa to complete the installation of
the two Jenbacher engines. The loan is currently being drawn down in tranches (total ZAR 15.3m)
and repayment commences on 1 April 2016 for a period of 48 months.

With mechanical failure to one of the original gas turbines in October, the Group was challenged to
continue to deliver power in the region without new investment. The key focus for the board had been
the preparation of the plant “blueprint” for the expansion of the facility and the securing of a longer
term PPA. The planned capacity increase was to be up to 30 MW and the board was seeking the
strategic partnership needed with black industrialists to provide a closer working relationship with key
service providers and the various stakeholders at governmental level. These efforts will be continued
by the new owner with the completion of the sale of NewCogen announced in January 2016 and
approved by shareholders on 16 February 2016. The IDC have approved the transaction on the basis
that a minimum of 30 per cent. equity is sold to a B-BBEE entity in South Africa.

PRINCIPAL RISKS AND UNCERTAINTIES

The board of directors (the “Board”) with appropriate processes formally reviews risks and controls
put in place to monitor and mitigate them. Key business risks include:

    1) Changes in demand and pricing of electricity in the markets in which we operate;

    2) Forecasting of gas pricing and securing additional gas, our principal fuel;

    3) Availability of debt financing at rates that allow new projects to be developed and provide a
       satisfactory return to our shareholders.

    These risks are mitigated by:
    1) Securing long term contracts to provide a stable market for our output;
    2) Maintaining a good relationship with our suppliers and ensuring availability of gas under a
       long term contract; and
    3) Focussing our development activities in markets where long term contracts with creditworthy
       counterparties are available and where a reasonably well-developed capital market exists.


KEY PEFORMANCE INDICATORS

The Directors use a range of performance indicators to monitor progress in the delivery of the Group’s
strategic objectives, to assess actual performance against targets and to aid management of the
businesses.

The Group’s key performance indicators (“KPIs”) include financial and non-financial targets, which are
set annually.

Financial KPIs
Financial KPIs address operating profitability, net asset value and earnings per share.

i) Operating profitability

Operating profit excludes all non-operating costs, such as financing and tax expenses, as well as one-
off items and non-trading items such as negative goodwill. The exclusion of these non-operating
items provides an indication of the performance of the underlying businesses. The Group made an
operating loss in the year ended 31 March 2015.

ii) Net asset value

Net asset value is calculated by dividing funds attributable to the Group’s shareholders by the number
of shares in issue. The net assets of the Group reduced in the year to 1.16 pence per share. (2014:
7.72 pence per share).

iii) Earnings per share

Earnings per share provide a measure of the overall profitability of the Group. It is defined as the
profit or loss attributable to each Ordinary Share based on the consolidated profit or loss for the year
after deducting tax and non-controlling interest. Growth in earnings per share is indicative of the
Group’s ability to identify and add value. The Group made a loss in the year of 6.45 pence per share
(2014: profit 0.34 pence per share).

Non-Financial KPIs

Non-financial KPIs address other important technical aspects of the business, such as gross capacity,
operating efficiency and availability.

i) Gross capacity

Gross capacity is the total generation capacity owned by Group companies and is affected by
acquisitions, expansion programmes and disposals. The Group increased operating capacity through
improved operational discipline and a higher on line factor.

ii) Operating efficiency

Operating efficiency is the average operating efficiency of the generating plants. It can be improved
through the installation of more thermally efficient generating units, refurbishment activities or
through conversion to combined cycle operation. Improved efficiencies were recorded during the year
and the upward trend is expected to continue.

iii) Technical availability

Technical availability measures when a plant is available for dispatch. The measurement method
excludes time allowed for planned maintenance activities, which occur at regular intervals during the
life of the unit plus an allowance for unplanned outages. Unplanned and forced outages in excess of
the annual allowance will cause a reduction in the technical availability factor. Average availability
through the year for our plant in Newcastle was above 95 per cent. (2014: 95 per cent).

The Strategic Report was approved by the Board of Directors on 14 March, 2016 and was signed on
its behalf by:


P Earl
Director
14 March 2016
DIRECTORS’ REPORT

The directors submit their report and audited financial statements for the year ended 31 March 2015.

Principal activities and review of the business

The principal activities of the Group comprise the operation and development of power generation
assets, initially in South Africa. The Group’s strategy was to create a portfolio of power generation
assets in southern Africa, in conjunction with project partners where the directors believed this to be
advantageous. The parent Company is now engaged in the sale of the balance of plant following the
announcement of the sale of NewCogen on 16th February 2016.

The Company was incorporated on 1 July 2005 and was admitted to AIM in September 2005. In
October 2006, the Company obtained a secondary listing, on the Alternative Exchange of the
Johannesburg Stock Exchange Limited (“AltX”).

A review of the Group’s activities is set out in the Chairman’s Statement and the Acting Chief
Executive’s Review.

Results and dividends

The Group results for the year ended 31 March 2015 are set out in the Consolidated Statement of
Comprehensive Income. No dividend has been paid or is proposed.

Going Concern

The directors have continued to adopt the ‘going concern’ basis for the preparation of the financial
statements since the directors consider that the Company and the Group have sufficient financial
resources available to continue trading for the foreseeable future (see also note 3.2).

Share capital

Details of the authorised and issued share capital are set out in note 20. During the year, there were
no changes in the issued share capital of the Company.

Directors

The directors who served during the year are as follows:
R Linnell
N Bryson
P Earl – resigned on 31 July 2015, re-appointed on 1 March 2016
P Metcalf- deceased on 11 November 2014
E Shaw – resigned on 31 July 2015
M. C. Otto

Directors’ interests

The beneficial interests of the current directors and also those who served during the year in the
share capital of the Company at 11 March 2016, being the last practicable date for reporting this
information, were as stated below:

                                        11.03.2016      31.03.2015      31.03.2014

 N Bryson                                    50,000         50,000           50,000
 E R Shaw                                  1,268,750      1,268,750        1,268,750
 P R S Earl                                  250,000        250,000          250,000

In May 2012 the Company issued 2.1m share options. The options vested immediately at an exercise
price of 5p per share and their fair value was £nil as the price of the shares when the options were
granted was less than 5p. The options held by current directors are as follows:

 R Linnell                                                  192,067
 N Bryson                                                   213,407
 P Earl                                                     393,203

No options were granted during the year under review.

Significant shareholdings in the Company

In addition to the shareholdings shown above, the Company is aware of the following notifiable
interests of 3 per cent. or more in the issued share capital of the Company 11 March 2016, being the
last practicable date for reporting this information.

                                                        Number of shares          Percentage
                                                                                     holding

 Sterling Trust Ltd                                              31,794,105             29.57
 Metc Metlife Main Account - RSA                                 11,949,277             11.12
 YF Finance Limited                                               6,430,000              5.98
 Lynchwood Nominees Ltd                                           5,672,900              5.28
 Pershing Nominees Limited                                        3,670,370              3.41


Risk management policies and objectives

The financial risk management policies and objectives are set out in note 23.

Directors’ responsibilities

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

Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have elected to prepare financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union (“IFRSs”). The financial statements
are required by law to give a true and fair view of the state of affairs of the Group and Parent Company
and of the profit or loss of the Group for that period. In preparing these financial statements, the
directors are required to:


   -    Select suitable accounting policies and then apply them consistently;
   -    Make judgements and estimates that are reasonable and prudent;
   -    State whether applicable IFRSs have been followed, subject to any material departures
        disclosed and explained in the financial statements; and
   -    Prepare the financial statements on the going concern basis unless it is inappropriate to
        presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:
   -    So far as each of the directors is aware, there is no relevant audit information of which the
        Company's auditors are unaware; and
   -    The directors have taken all steps that they ought to have taken to make themselves aware
        of any relevant audit information and to establish that the auditors are aware of that
        information.

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

The auditors, Grant Thornton UK LLP, have indicated their willingness to continue in office and a
resolution concerning their re-appointment will be proposed at the Annual General Meeting.

By order of the Board

Susan Laker
Company Secretary
14 March 2016
CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2015

POLICY STATEMENT

The Board is committed to applying high standards of corporate governance and integrity to all our
activities. We do not comply with the UK Corporate Governance Code. However, we have reported
on our Corporate Governance arrangements by drawing upon best practice available, including those
aspects of the UK Corporate Governance Code we consider to be relevant to the company and best
practice.

INTERNAL CONTROLS

The Directors are responsible for the Group’s systems of internal control. Whilst no risk management
process or systems of internal control can completely eliminate the risk of material misstatement or
loss, the Group’s systems are designed to provide the directors with reasonable assurance that
problems are identified in a timely manner and dealt with appropriately. The Board considers that
there have been no substantial weaknesses in financial controls resulting in material loss,
contingencies or uncertainties and thus disclosable in these Accounts. The Board has considered the
need for an internal audit function and has concluded that there is no current need for such a function.

THE ROLE OF THE BOARD

The Board is responsible for the overall management of the Group, its strategy and long term
objectives, having regard to the interests of shareholders and the protection of shareholder value.
The Board is tasked with ensuring that the Company has adequate resources to meet its objectives.

Once the Board has set the strategic and financial objectives, it is the role of the Chief Executive and
the management team to work to achieve those objectives on a day to day basis.

All directors are subject to election by shareholders at the next general meeting following appointment
to the Board and to annual re-election by rotation.

External advice is available to the directors if they consider it necessary.

ACCOUNTING POLICIES

The Board considers the appropriateness of its accounting policies on a regular basis.

DIRECTORS’ ROLES

For the year ended 31 March 2015, the Board comprised a Non-Executive Chairman, two Executive
Directors following the death of Phil Metcalf in November 2014 and two Non-Executive Directors. The
Chairman of the Board is Richard Linnell. The other Non-Executive Directors are Neil Bryson and Peter
Earl. The Executive Directors were Phil Metcalf, who was Chief Executive, Mark Otto, Chief Operating
Officer and Elizabeth Shaw, Finance Director. Peter Earl and Elizabeth Shaw subsequently resigned
on 31 July 2015. Peter Earl was re-appointed to the Board as Executive Director on 1 March 2016. All
Directors are involved in significant decisions and the Directors have access to external advice if they
deem it necessary.

The Chairman’s main role is to:
    -   Ensure good corporate governance
    -   Lead the Board, ensuring the effectiveness of the Board in all aspects of its role;
    -   Ensure effective communications with shareholders; and
    -   Set the agenda for Board meetings in conjunction with the Chief Executive Officer and the
        Company Secretary and ensure that all Directors are encouraged to engage fully in the
        decision making process of the Board.


The Chief Executive Officer’s main role is to:
    -   Lead the Company and provide the key recommendations to the Board on corporate strategy;
    -   Run the Company from day to day
    -   Provide strategic direction to the Company’s management team;
    -   Set objectives for the review and performance of the Company’s management team;
    -   Play a key role in external shareholder, client and partner relationships;
    -   Be responsible with the other directors for implementing the decisions of the Board and its
        committees; and
    -   Act as the principal spokesperson of the Company in communications with shareholders,
        external auditors, the media and investors.


    Directors’ Roles

    The Non-executive Directors’ main role is to:
    -   Challenge the opinions of the Executive Directors, providing fresh insight to the strategy and
        bring diversity of experience and expertise for the benefit of the Group;
    -   Play a part in ensuring good corporate governance;
    -   Assess the performance of the Chairman;
    -   Scrutinise the performance of the Executive Directors in terms of meeting agreed strategy
        and business objectives;
    -   Be available to shareholders if they have concerns not satisfied through contact with the
        Chairman or Chief Executive Officer;
    -   Play a part in ensuring that financial information, controls and systems of risk management
        within the Group are fit for purpose and are being adhered to;
    -   Monitor the reporting of performance of the Company; and
    -   Assist management, where possible, with high level contacts


The Chairman and Non-Executive Directors met three times during the financial year without the
Executive Directors being present.

SHAREHOLDER RELATIONS AND ANNUAL GENERAL MEETING (“AGM”)

The Group values the views of its shareholders and recognises their interest in the Group’s strategy
and performance, Board membership and quality of management. The AGM is an opportunity to
communicate with institutional and other shareholders through the circulation of the interim and
annual reports. The outcome of the voting on AGM resolutions is disclosed by means of an RNS
announcement. IPSA Group PLC maintains up-to date information on the investor section of its
website www.ipsagroup.co.uk.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The Audit Committee comprised Neil Bryson and Richard Linnell who are both Non-Executive Directors
and is chaired by Neil Bryson. The Committee’s remit is to review financial reporting practices, internal
financial controls and internal and external audit policy including the appointment of the Company’s
auditor. During the year, the Audit Committee met twice to review the draft half year and annual
financial statements.

REMUNERATION COMMITTEE

The Remuneration Committee comprises Richard Linnell and Neil Bryson and is chaired by Richard
Linnell. The Remuneration Committee reviews the remuneration policy for the Executive Directors
and for senior management. The Executive Directors determine the remuneration arrangements for
the Non-Executive Directors. No director may participate in decisions regarding his own remuneration.
Details of the Directors’ remuneration can be found in note 27.
APPOINTMENT OF DIRECTORS

The Nomination Committee comprises Richard Linnell as Chairman and Neil Bryson. The Committee
is responsible for monitoring the composition of the Board and meets to make recommendations to
the Board on all new Board appointments and succession planning. The Board has not used external
consultants in the appointment of directors.

HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION POLICY

The Group is committed to compliance with all relevant laws and regulations and continues to assess
its operations to ensure protection of the environment, the community and the health and safety of
its employees. The Group maintains appropriate procedures to ensure that all activities are carried
out in compliance with safety regulations, in a culture where the safety of personnel is paramount
and which recognises environmental sustainability and respect for cultural and heritage issues.

SHARE DEALING CODE

The Company has a Share Dealing Code, which covers dealings by Persons Discharging Managerial
Responsibilities. The Company’s code complies with the provisions of the Code and restricts dealings
in shares during designated close periods and at any time when they are in possession of unpublished
price sensitive information.


Susan Laker
Company Secretary
14 March 2016
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IPSA GROUP PLC

We have audited the financial statements of IPSA Group PLC for the year ended 31 March 2015 which
comprise the group and parent company statement of financial position, the group statement of
comprehensive income, the group and parent company statements of cash flow, the group and parent
company statements of changes in equity and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR

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

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS

A description of the scope of an audit of financial statements is provided on the Financial Reporting
Council's website at www.frc.org.uk/auditscopeukprivate.

BASIS FOR ADVERSE OPINION ON FINANCIAL STATEMENTS

In forming our opinion on the financial statements we considered the implications as disclosed in the
financial statements of the following matters:
    ?   The Group has Non-Current Assets classified as Held for Sale carried at a value of £4m at the
        year end date. These assets comprise spares and ancillary equipment and the figure of £4m
        represents the Directors' current valuation of the assets as disclosed in note 3.2 to the
        financial statements. In our opinion, based on the audit evidence obtained, provision should
        be made against the carrying value of the assets and we do not consider that the carrying
        value of £4m represents the fair value less costs to sell of the assets. It is not practicable to
        quantify the financial effects of this misstatement.
    -   There is a significant uncertainty over the timing of the payment of the remaining balance of
        £1.8m of £2.9m due from Rurelec PLC as disclosed in note 3.2 to the financial statements.
        Furthermore, the recoverability of this balance is reliant on the successful completion of
        events in relation to the activities of Rurelec PLC, as disclosed in note 3.2 to the financial
        statements. In our opinion, a provision of £1.8m should be made against the debtor balance
        due from Rurelec PLC as the outcome of these events cannot be determined at the current
        time and therefore we do not consider that the balance is fully recoverable.
As explained in note 3.2 to the financial statements the Directors believe that the company is a going
concern due to assets being in excess of liabilities. As a result of the two matters above there is a
material uncertainty over whether the assets are in excess of liabilities which may cast significant
doubt on the company's and group's ability to continue as a going concern. Therefore, it may be
unable to realise its assets and discharge its liabilities in the normal course of business. The financial
statements (and notes thereto) do not disclose this fact and have been prepared on the going concern
basis.

The financial statements of the group for the year ended 31 March 2014 included a provision for
impairment of property, plant and equipment that was understated by £1.02m and our audit opinion
on the financial statements for that year was modified accordingly. The effects of this matter on the
current year’s opening balances are material and continue to require a modification to our opinion on
the current year in this regard.
ADVERSE OPINION ON FINANCIAL STATEMENTS

In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion
paragraph:
    -   the financial statements do not give a true and fair view of the state of the group or company’s
        affairs as at 31 March 2015 and of the group's loss for the year then ended;
    -   the group financial statements have not been properly prepared in accordance with IFRSs as
        adopted by the European Union; and
    -   the parent company financial statements have not been properly prepared in accordance with
        IFRSs as adopted by the European Union and as applied in accordance with the provisions of
        the Companies Act 2006.
In all other respects, in our opinion the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.

OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006

Notwithstanding our adverse opinion on the financial statements, in our opinion the information given
in the Strategic Report and Directors’ Report for the financial year for which the financial statements
are prepared is consistent with the financial statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters where the Companies Act 2006 requires
us to report to you if, in our opinion:
    -   adequate accounting records have not been kept by the parent company, or returns adequate
        for our audit have not been received from branches not visited by us; or
    -   the parent company financial statements are not in agreement with the accounting records
        and returns; or
    -   certain disclosures of directors’ remuneration specified by law are not made; or
    -   we have not received all the information and explanations we require for our audit.


Christopher Smith
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
14 March 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2015

                                             Notes       12 Months         12 Months
                                                       31/03/2015        31/03/2014
                                                             £’000             £’000

 Revenue                                          4            3,649             3,707

 Impairment of Property, Plant & Equipment        6           (5,144)            (753)
 Other Cost of Sales                              6           (3,804)          (3,911)
 Total Cost of Sales                              6           (8,948)          (4,664)

 Gross Loss                                                  (5,299)            (957)

 Administrative Expenses                          7           (1,482)          (1,388)

 Operating Loss                                               (6,781)          (2,345)

 Profit on Sale of Non-Current Asset              8                 -            3,166

 Other Expense                                    9              (78)            (282)

 Net Finance Expense                             10              (74)            (171)

 (Loss)/Profit Before Tax                                    (6,933)              368

 Tax Expense                                     11                 -               -

 (Loss)/Profit After Tax                                     (6,933)              368

 Other Comprehensive Income

 Items that will subsequently be
 Reclassified to Profit or Loss:
 Exchange Differences on
 Translation of Foreign Operation                               (118)          (1,714)

 Total Comprehensive Loss                                    (7,051)          (1,346)

 (Loss)/Earnings per Ordinary Share              13          (6.45p)            0.34p
 (basic, diluted and headline)

The accompanying accounting policies and notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 March 2015

                                           Notes       12 months           12 months
                                                     31/03/2015          31/03/2014
                                                           £’000               £’000

 Non-Current Assets

 Property, Plant and Equipment                  14          1,916                   7,738
                                                            1,916                   7,738

 Current Assets
 Trade and Other Receivables                    16           3,422                  3,575

 Cash and Cash Equivalents                      18              3                      61
                                                            3,425                   3,636

 Non-Current Assets Classified as               19           4,000                  4,000
 Assets Held for Sale

 Total Assets                                                9,341                 15,374

 Equity and Liabilities

 Equity Attributable to Equity Holders of the
 Parent:

 Share Capital                                  20           2,150               2,150

 Share Premium Account                                      26,767              26,767

 Foreign Currency Reserve                                   (5,843)             (5,725)
    
 Profit and Loss Reserve                                  (21,831)             (14,898)

 Total Equity                                               1,243                8,294

 Current Liabilities

 Trade and Other Payables                       21           7,152               6,842

 Borrowings                                     22            946                  238
                                                            8,098                7,080

 Total Equity and Liabilities                               9,341              15,374

The financial statements were approved by the Board on 14 March 2016.


Neil Bryson - Director                                       Peter Earl -Director

Company registration number:        05496202

The accompanying accounting policies and notes form an integral part of these financial
statements.
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
at 31 March 2015

                                                             Notes      31/03/15        31/03/14
                                                                            £’000           £’000

 Assets

 Non-Current Assets

 Investments                                                    15         1,916           23,369
                                                                           1,916           23,369

 Current Assets

 Trade and other receivables                                    16          3,068           3,249

 Stock                                                          17             -            1,320

 Cash and Cash Equivalents                                      18             -              17
                                                                           3,068           4,585

 Non-Current Assets Classified as Assets held for Sale          19         4,000           4,000

 Total Assets                                                              8,984          31,955

 Equity and Liabilities

 Share Capital                                                  20          2,150           2,150

 Share Premium Account                                                     26,767          26,767

 Profit and Loss Reserve                                                 (27,514)         (3,555)

 Total Equity                                                              1,403          25,362

 Current Liabilities

 Trade and Other Payables                                       21          6,635           6,355

 Borrowings                                                     22           946             238
                                                                           7,581           6,593

 Total Equity and Liabilities                                              8,984          31,955

The financial statements were approved by the Board on 14 March 2016.



Neil Bryson - Director                                       Peter Earl -Director

Company registration number:      05496202

The accompanying accounting policies and notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2015

                                                               12 Months         12 Months
                                                             31/03/2015        31/03/2014
                                                                   £’000             £’000

 (Loss) / Profit for the Year                                      (6,933)                 368

 Add back Net Finance Expense                                            73                171

 Deduct Profit on Sale of Asset Held for Sale                             -             (3,166)

 Adjustments for:
 Depreciation and Impairment                                         4,472                1,328
 Group IAS 10 Write Down re Post-date Sale of Blazeway               1,311                    -
 Unrealised Exchange (Gains)/Losses                                   (30)                  133
 Change in Trade and Other Receivables                                 153                  181

 Change in Trade and Other Payables                                    311                (530)


 Cash Used in Operations                                             (642)               (1,515)

 Interest Paid                                                         (13)               (133)

 Interest Received                                                       -                    -

 Net Cash Used in Operations                                         (655)               (1,648)

 Cash Flows from Investing Activities

 Purchase of plant and Equipment                                       (99)             (2,537)

 Proceeds from Sale of Asset Held for Sale                                -             12,935

 Costs Associated with Sale of Assets Held for Sale                      -              (1,230)
                                                                      (99)               9,168

 Cash Flow from Financing Activities

 Loans Received                                                        729                 200

 Loans Repaid                                                          (33)              (7,759)
                                                                       696               (7,559)

 Decrease in Cash and Cash Equivalents                                (58)                  (39)

 Cash and Cash Equivalents at Start of Year                              61                 100

 Cash and Cash Equivalents at End of Year                                 3                  61

The accompanying accounting policies and notes form an integral part of these financial
statements.
PARENT COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March 2015

                                                              12 Months         12 Months
                                                            31/03/2015        31/03/2014
                                                                  £’000             £’000

 (Loss)/Profit for the Year                                     (23,958)                289

 Add back Net Finance Expense                                          73               157

 Add back Impairment on Investments                                22,747             1,700

 Deduct Profit on Sale of Asset Held for Sale                           -            (3,166)

 Adjustments for:
 Change in Trade and Other Receivables                                181             (175)

 Sale/(Purchase) of Inventory                                       1,320           (1,320)

 Change in Trade and Other Payables                                   279             (382)

 Cash Used in Operations                                             642            (2,897)

 Interest Paid                                                       (13)             (122)

 Net Cash from/(Used in) Operations                                  629            (3,019)

 Cash Flows from Investing Activities

 Loan to Subsidiary                                               (1,342)           (2,337)

 Proceeds from Sale of Asset Held for Sale                              -            12,935

 Costs Associated with Sale of Asset Held for Sale                      -            (1,230)
                                                                 (1,342)              9,368

 Cash Flow from Financing Activities

 Loans Received                                                       729                 200

 Loans Repaid                                                        (33)           (6,534)
                                                                     696           (6,334)

 (Decrease)/Increase in Cash and Cash Equivalents                   (17)                  15

 Cash and Cash Equivalents at Start of Year                            17                   2

 Cash and Cash Equivalents at End of Year                               -                  17

The accompanying accounting policies and notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2015

                                           Share        Share     Foreign       Profit      Total
                                          Capital    Premium     Currency    and Loss      Equity
                                                      Account     Reserve     Reserve

                                            £’000       £’000       £’000       £’000      £’000

 At 31.3.13                                 2,150     26,767      (4,011)    (15,266)      9,640

 Profit for the Year                             -           -           -        368        368

 Other Comprehensive Loss                        -           -    (1,714)            -    (1,714)

 Total Comprehensive Loss for the                -           -    (1,714)         368     (1,346)
 Year

 At 31.3.14                                 2,150     26,767      (5,725)    (14,898)      8,294

 Loss for the Year                               -           -           -     (6,933)    (6,933)

 Other Comprehensive Loss                        -           -      (118)            -      (118)

 Total Comprehensive Loss for the                -           -      (118)      (6,933)     (7,051)
 Year

 At 31.3.15                                 2,150     26,767      (5,843)    (21,831)      1,243


The accompanying accounting policies and notes form an integral part of these financial
statements.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2015

                                       Share       Share     Foreign      Profit and         Total
                                      Capital   Premium     Currency            Loss        Equity
                                                 Account     Reserve        Reserve

                                       £’000       £’000      £’000           £’000         £’000

 At 31.3.13                            2,150     26,767            -        (3,845)        25,072

 Profit for the Year                        -           -          -             290          290

 Total Comprehensive Loss for               -           -          -            290           290
 the Year

 At 31.3.14                            2,150     26,767            -        (3,555)        25,362

 Loss for the Year                          -           -          -        (23,958)      (23,958)

 Total Comprehensive Income                 -           -          -        (23,958)       (23,958)
 for the Year

 At 31.3.15                            2,150     26,767            -       (27,513)         1,404

The accompanying accounting policies and notes form an integral part of these financial
statements.
Notes to the Financial Statements
for the year ended 31 March 2015

1 Principal activities and nature of operations

The principal activity of IPSA Group PLC (the “Company”) and its subsidiaries (together the “Group”)
is the construction, development and operation of electricity generation assets and the supply of
electricity to the wholesale market and major end-users. The parent Company is also involved in the
purchase and sale of power related equipment and products.

During the year under review, the Group’s operating activities included the generation and sale of
electricity and steam by the Group’s gas fired plant in Newcastle, Republic of South Africa.

Further details are provided in the Chairman’s statement and the Acting Chief Executive’s review of
operations.

2 General information

IPSA Group PLC is the Group’s ultimate Parent Company. It is incorporated and domiciled in England
and Wales. The address of IPSA Group PLC’s registered office is given on the information page. IPSA
Group PLC’s shares are traded on the AIM market of the London Stock Exchange PLC in London and,
since October 2006, the shares have had a dual listing on Altx (the Alternative Exchange, a division
of JSE Limited, of the Johannesburg market).

3 Summary of accounting policies

3.1 Basis of preparation

The financial statements have been prepared under the historical cost convention and in accordance
with applicable International Financial Reporting Standards (“IFRS”) as adopted by the European
Union. The measurement bases and principal accounting policies of the Group are set out below.

Statutory accounts for 2014 have been delivered to the registrar of companies, and those for 2015
will be delivered in due course. The auditors have reported on those accounts; the audit report for
2015 contains an adverse opinion, 2014 was qualified in relation to the discount rate utilised in the
impairment review of the property, plant and equipment and subsequent impairment.

3.2 Going concern

Following completion of the sale of the remaining two turbines for a total consideration of US$25
million (£16.1 million) of which £12.9 million was received during the previous year, the Company
had expected to receive from Rurelec PLC the outstanding amounts still owed of euros 1.505 million
which it has undertaken to pay on the Company’s behalf to Ethos Energy Italia S.p.A and a further
amount of £185,000.

The Company has been provided with a letter of comfort from Rurelec which gives the Board
confidence that Rurelec is likely to be able to meet its payment obligations to the Company in the
coming months.

The Company is engaged in discussions with three parties who have shown interest in purchasing the
balance of plant in conjunction with the turbines.

Rurelec continues to pursue the project known as Central Illapa S.A in Chile and is awaiting the final
consent to connect the Illapa project to the Northern Chilean transmission grid. However, all of the
environmental and project approvals granted have been specifically based on the installation of
TG50D5/701DS turbines. Due to the long lead time for delivery of essential parts the balance of plant
is useful for ensuring that the turbines can be installed within the project timeframe. Rurelec has
therefore expressed interest in acquiring the balance of plant and the Directors of IPSA may therefore
reasonably expect to receive an offer at no less than the carrying value £4.0m.

The other pair of IPSA turbines was acquired by Bright Day of Singapore and are now held in a
Singaporean company known as Blue Capital (Pty) Limited. This company has made offers of barge
power to two African countries and is awaiting tender valuations. If either opportunity is contracted,
Blue Capital has expressed interest in acquiring the balance of plant.
Finally, meetings have recently been held in London with a large Egyptian energy company interested
in acquiring the BOP as a good fit with a large steam turbine which this company has already acquired.

Discussions continue with industry players to identify other opportunities to sell the BOP and Ethos
Energy is aware of all ongoing discussions with potential to achieve a sale. A dialogue is maintained
with certain senior individuals at Ethos Energy based in Italy, the U.K and in Florida who are provided
with telephone and e-mail updates on the progress of all prospects for a sale of the balance of plant.
Ethos provides information and facilitates inspection visits for interested parties.

The overhead costs for the Company will be reduced following disposal of Blazeway Engineering
Limited, the intermediate holding company for the Company’s South African subsidiary Newcastle Co-
generation (Pty) Limited. The directors have confirmed that they do not intend to continue to accrue
fees following the disposal and have waived fees that were outstanding up to the end of March 2015.

Following the disposal which completed on 29 February 2016, the Company is now a cash shell under
the AIM Rules and its primary focus is to identify and conclude a transaction with a candidate for a
reverse takeover or merger. The Company has commenced reviews of potential candidates.

The disposal of Blazeway Engineering Limited has removed a number of the Company’s creditors
including £1.8 million of director salary creditors and liability for the Radix loan of £566,000. Whilst
these liabilities have been removed from the Company’s balance sheet, its principal assets remain:
a) the balance of the ancillary plant equipment which was purchased when the original four turbines
were acquired, for which an independent valuation of £4.1 million has been obtained; and b) the sums
still outstanding from Rurelec in respect of the sale of the two turbines.

Since these sums owed to the Company represent a surplus over the Company’s liabilities, although
the timing of receipt remains uncertain, the directors believe it is appropriate to adopt the going
concern basis in preparing the annual report and accounts. The Company acknowledges until it is able
to realise or raise sufficient funds to repay the sums due to its creditors, principally being Ethos
Energy, its solvency and ability to continue as a going concern is reliant on the continued forbearance
of these creditors.

3.3 Basis of consolidation

The Group financial statements consolidate those of the Company and its subsidiary undertakings
drawn up to 31 March 2015.

Subsidiaries are entities over which the Group has the power to control the financial and operating
policies so as to obtain benefits from its activities. The Group obtains and exercises control through
voting rights.

Unrealised gains on transactions between the Group and subsidiaries are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Amounts reported in the financial statements of subsidiary entities have been adjusted
where necessary to ensure consistency with the accounting policies adopted by the Group.

Acquisitions of subsidiaries are dealt with by the acquisition method. The acquisition method involves
the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of
the acquired company, at the acquisition date, regardless of whether or not they were recorded in
the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and
liabilities of the acquired entity are included in the consolidated statement of financial position at their
fair values, which are also used as the basis for subsequent measurement in accordance with the
Group accounting policies.

Since the balance sheet date, the disposal of Blazeway was announced on 28 January 2016 for a total
consideration of £1.9m. The sale includes 100% of the share capital of NewCogen, loss making owner
of the Group’s only operational asset. Under IFRS accounting standards the directors consider this an
adjusting event relating to IAS 10 - Events After the Reporting Period, as the Group no longer expects
to receive the future cash flows of the disposed entities. It is therefore appropriate that consolidation
adjustments are made to the carrying value of Blazeway to reflect the sale proceeds. The carrying
values of assets in NewCogen’s financial statements are unaffected. The directors recognise that
following this fundamental disposal, IPSA will become a cash shell and under AIM rule 15 will be
deemed to be an investing company.

3.4 Intangible assets acquired as part of a business combination
In accordance with IFRS 3: Business Combinations, an intangible asset acquired in a business
combination is deemed to have a cost to the Group of its fair value at the acquisition date. The fair
value of an intangible asset reflects market expectations about the probability that the future
economic benefits embodied in the asset will flow to the Group. Where an intangible asset might be
separable, but only together with a related tangible or intangible asset, the group of assets is
recognised as a single asset separately from the goodwill where the individual fair values of the assets
in the group are not reliably measured. Where the individual fair value of the complementary assets
is reliably measurable, the Group recognises them as a single asset, provided the individual assets
have similar lives. Subsequent to initial recognition, intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses. Amortisation is provided to write-off
the cost of the intangible asset over its useful economic life.

3.5 Impairment of property, plant, equipment and intangible assets

At each reporting date, the Group reviews the carrying amount of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which
the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.

3.6 Foreign currency translation

The financial information is presented in pounds sterling, which is also the functional currency of the
Parent Company.

In the separate financial statements of the consolidated entities, foreign currency transactions are
translated into the functional currency of the individual entity using the exchange rates prevailing at
the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of remaining balances at year end
exchange rates are recognised in the income statement under “other income” or “other expenses”,
respectively.

In the consolidated financial statements, all separate financial statements of subsidiary entities,
originally presented in a currency different from the Group’s presentation currency, have been
converted into sterling. Monetary assets and liabilities have been translated into sterling at the closing
rate at the reporting date. Income and expenses have been converted into sterling at the average
rates over the reporting period. Any differences arising from this procedure have been recognised in
other comprehensive income and accumulated in the Foreign Currency Reserve.

3.7 Income and expense recognition

Revenue from the sale of goods and services is recognised when i) the Group has transferred to the
buyer the significant risks and rewards of ownership of the goods and services which is when supply
has been made, ii) the amount of revenue can be reliably measured and iii) the costs incurred or to
be incurred in respect of the transaction can be measured reliably.

In the year ended 31 March 2015 the Group’s revenue comprised the sale of electricity and steam
from the plant in South Africa.

Operating expenses are recognised in the consolidated statement of comprehensive income upon
utilisation of the service or at the date of their origin. All other income and expenses are reported on
an accrual basis.

3.8 Property, plant and equipment

Property, plant and equipment is stated at cost, net of depreciation and any provision for impairment.
No depreciation is charged during the period of construction.

All operational plant and equipment in the course of construction is recorded as plant under
construction until such time as it is brought into use by the Group. Plant under construction includes
all direct expenditure. On completion, such assets are transferred to the appropriate asset category.

Depreciation is calculated to write down the cost or valuation less estimated residual value of all
property, plant and equipment other than freehold land by equal annual instalments over their
estimated useful economic lives. The periods generally applicable are:

  Plant and equipment:           3 to 25 years

Material residual values are updated as required, but at least annually, whether or not the asset is
revalued. Where the carrying amount of an asset is greater than its estimated recoverable amount,
it is written down immediately to its recoverable amount.

3.9 Stock

Stock, which represents equipment bought for future projects, is valued at the lower of cost and net
realisable value.

3.10 Non-current assets classified as held for sale

Assets are categorised as non-current assets classified as held for sale when the directors intend that
the asset be sold rather than employed as an operating asset. Non-current assets classified as held
for sale are valued at the lower of cost and fair value less costs to sell.

3.11 Borrowing costs

All borrowing costs, and directly attributable borrowing costs, are expensed as incurred except where
the costs are directly attributable to specific construction projects, in which case the costs are
capitalised as part of those assets.

3.12 Taxation

Current income tax assets and liabilities comprise those obligations to, or claims from, fiscal
authorities relating to the current or prior reporting period, that are unpaid at the balance sheet date.
They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which
they relate, based on the taxable profit for the period. All changes to current tax assets or liabilities
are recognised as a component of tax expense.

Deferred income 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.

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

Deferred income tax is provided on temporary differences arising in investments in subsidiaries except
where the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the
income statement, except where they relate to items that are charged or credited directly to equity
in which case the related deferred tax is also charged or credited directly to equity.

3.13 Financial assets

The Group’s financial assets include cash and cash equivalents, trade and other receivables.

Cash and cash equivalents include cash at bank and in hand as well as short term highly liquid
investments such as bank deposits.

Receivables are non-derivative financial assets with fixed or determinable payment dates that are not
quoted in an active market. They arise when the Group provides money, goods or services directly to
a debtor with no intention of trading the receivable. Receivables are measured initially at fair value
and subsequently re-measured at amortised cost using the effective interest method, less provision
for impairment. Any impairment is recognised in Profit or Loss.

Trade receivables are provided against when objective evidence is received that the Group will not be
able to collect all amounts due to it in accordance with the original terms of the receivables. The
amount of the write-down is determined as the difference between the asset’s carrying amount and
the present value of estimated cash flows.

3.14 Financial liabilities

Financial liabilities are obligations to pay cash or other financial instruments and are recognised when
the Group becomes a party to the contractual provisions of the instrument. All interest related charges
are recognised as an expense in "finance expense" in the Statement of Comprehensive Income except
to the extent that the costs are directly attributable to specific construction projects. Bank and other
loans are raised for support of long term funding of the Group's operations. They are recognised
initially at fair value, net of transaction costs. In subsequent periods, they are stated at amortised
cost using the effective interest method. Finance charges, including premiums payable on settlement
or redemption, and direct issue costs are charged to Profit or Loss on an accruals basis using the
effective interest method and are added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.

3.15 Hedging instruments

The Group has not entered into any derivative financial instruments for hedging or for any other
purpose.

3.16 Equity

Equity comprises the following:
   ?   "Share capital" represents the nominal value of equity shares;
   ?   "Share premium" represents the excess over nominal value of the fair value of consideration
       received for equity shares, net of expenses of the share issue;
   ?   "Foreign currency reserve" represents the differences arising from translation of investments
       in overseas subsidiaries; and
   ?   "Profit and loss reserve" represents retained earnings.



3.17 Investment in subsidiary undertakings

The Company’s investments in subsidiary undertakings are stated at cost less any provision for
impairment.

3.18 Amounts due from subsidiaries

Amounts due from subsidiaries are measured initially at fair value plus transaction costs and
thereafter at amortised costs.


3.19 Key assumptions and estimates
The Group makes estimates and assumptions concerning the future. The resulting estimates will, by
definition, seldom equal the related actual results. The Board has considered the critical accounting
estimates and assumptions used in the financial statements and concluded that the main areas of
significant risk which may cause material adjustment to the carrying value of assets and liabilities
within the next financial year are in respect of:


   i) the value of the power plant in NewCogen, has been assessed on a value based on the sales
      proceeds of Blazeway the owner of 100% of NewCogen. As announced on 28 January 2016
      these are £1,916k;
   ii) the carrying value of the Balance of Plant, the Board recently commissioned a review by an
       independent expert who has confirmed that the carrying value of £4.0m represents a discount
       of approximately 70 to 80% of its replacement cost;
   iii) the receivable from Rurelec re the deferred consideration of the 2013 turbine sale. At the
        balance sheet date this was £3.0m, at the date of this report this has been reduced to £1.8m.
        The Board has received a comfort letter from Rurelec and is satisfied that Rurelec will be in a
        position to settle all amounts in the coming weeks;
   iv) on the basis as shown in note 15, management have classified the parent’s receivables from
       its subsidiaries as equity in nature and hence all amounts receivable have been added to the
       net investment in that subsidiary. Management have performed an impairment review using
       discounted cash flow forecasts based on future plans and expectations. The impairment review
       indicated that an impairment had arisen, this has been evaluated and the impairment recorded
       in the parent’s statements; and
   v) the going concern basis for the preparation of these financial statements, further details of
      which are set out in note 3.2.


3.20    Standards, amendments and interpretations to existing standards that are not yet
effective and have not been early adopted by the Group in the 31 March 2015 financial
statements

At the date of authorisation of these financial statements certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective. The Group has
not early adopted any of these pronouncements. The new Standards, amendments and
Interpretations that are expected to be relevant to the Group’s financial statements are as follows:


                                                                                         Applicable for financial
 Standard/Interpretation         Content                                                 Years beginning on/after
 IFRS 9 (2014)                   Financial instruments:                                  01/01/2018


 Standards and amendments to existing standards effective 1 January 2014
 The following standards, amendments and interpretations became effective in 2014:

                                                                                         Applicable for financial
 Standard/Interpretation         Content                                                 Years beginning on/after
 Amendments to IAS 36*           Recoverable Amount Disclosures for                      01/01/2014
                                 Non-Financial Assets
 IFRS 10*                        Consolidated Financial Statements                       01/01/2014
 IFRS 12*                        Disclosure of Interests in Other Entities               01/01/2014
 IAS 27* (Revised)               Separate Financial Statements                           01/01/2014
 IAS 28* (Revised)               Investments in Associates and Join Ventures             01/01/2014
 Amendment to IFRS 10,           Transition Guidance                                     01/01/2014
 IFRS 11 and IFRS 12*
 Amendment to IFRS 10*           Investment Entities                                     01/01/2014
 Amendment to IAS 32*            Offsetting Financial Assets and Financial Liabilities   01/01/2014
 IFRIC Interpretation 21*        Levies                                                  01/01/2014

 *The adoption of these Standards and Interpretation has had no material impact on the financial statement of the
 Group other than for the disclosure of joint venture.
IFRS 9, ‘Financial instruments: Classification and measurement’
The Directors do not anticipate that the adoption of these standards and interpretations in future
periods will have any material impact on the financial statements of the Group.

4 Segment analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly
reviewed by the chief operating decision maker (considered to be the Executive Board).
Management currently identifies two operating segments, being operations in RSA (comprising the
business of generating electricity and, as a by-product, the generation of steam) and the head office
in the UK. Each operating segment is monitored separately and strategic decisions are made on the
basis of segment operating results. The electricity is sold to a single customer and the steam is sold
to two industrial customers who operate from premises adjacent to the plant.
The following table provides a segmental analysis.
 
Year Ended 31.3.15                                RSA             UK     Intergroup          Year to
                                                 £’000          £’000          £’000           £’000

 Revenue
 Electricity                                     3,474                -             -           3,474
 Steam                                             175                -             -             175
 Cost of Sales                                 (7,712)             (75)       (1,161)         (8,948)
 Gross Loss                                    (4,063)             (75)       (1,161)         (5,299)

 Administrative Expenses                         (494)           (988)               -        (1,482)

 Operating Loss                                (4,557)         (1,063)        (1,161)         (6,781)

 Other (Expense)/Income                                -      (22,823)         22,745            (78)

 Finance Expense                                     (2)          (72)               -           (74)

 (Loss)/Profit for Year                        (4,559)       (23,958)          21,584         (6,933)

 Total Assets                                    6,425           8,984        (6,068)           9,341

 Total Liabilities                               8,095           7,581        (7,578)           8,098

 
Year Ended 31.3.14                                RSA             UK     Intergroup          Year to
                                                 £’000          £’000          £’000           £’000

 Revenue
 Electricity                                     3,023                -              -          3,023
 Steam                                             684                -              -            684
 Cost of Sales                                  (4,664)               -              -        (4,664)
 Gross Loss                                     (957)                 -              -         (957)

 Administrative Expenses                         (509)           (879)               -        (1,388)

 Operating Loss                               (1,466)           (879)                -        (2,345)

 Profit on Sale of Non-Current Asset                -           3,166                -          3,166

 Other Expense                                   (142)           (140)               -          (282)

 Finance Expense                                   (14)          (157)               -          (171)

 (Loss)/Profit for Year                       (1,622)           1,990                -           368

 Total Assets                                    6,786         31,957        (23,369)          15,374
 Total Liabilities                               23,855            6,594     (23,369)           7,080


5 Sensitivity analysis
The value of shareholder equity and the results for the Group are affected by changes in exchange
rates, prices for electricity, steam and gas, and interest rates. The following illustrates the effects of
changes in these variables.
i) Sensitivity to exchange rates.
The Group’s electricity generating assets, which also provide steam to industrial customers, are
located in South Africa and therefore the sterling value of the revenues and costs from this activity
are affected by movements in the value of sterling versus the ZAR.
In addition to the effects arising from changes in the value of sterling relative to the ZAR, the
Company’s results are exposed to changes in the value of sterling versus the € in respect of the
liability arising on the Turbines purchased from an Italian manufacturer since the liability is
denominated in €.
The exchange rates applicable to the results for the current year and prior year were as follows:
 Currency Risk:                                                                Year to         Year to
                                                                              31.03.15        31.03.14
 Closing rate
 € to £                                                                          1.38            1.21
 Average rate
 € to £                                                                          1.28            1.18

If exchange rates had been 10% higher or lower, the effect on the Group’s results and net equity
would have been:

 A 10% change in the value of
 Sterling on result for the year
 €                                                                             £0.4m              £0.4m

 A 10% change in the value of
 Sterling on net equity
 €                                                                             £0.4m              £0.4m

 Translation Risk:                                                               Year to          Year to
                                                                                31.03.15         31.03.14
 Closing rate
 ZAR to £                                                                           17.92            17.58
 Average rate
 ZAR to £                                                                           17.80            16.08

If exchange rates had been 10% higher or lower, the effect on the Group’s results and net equity
would have been:

 A 10% change in the value of
 Sterling on result for the year
 ZAR                                                                           £0.5m              £0.1m

 A 10% change in the value of
 Sterling on net equity
 ZAR                                                                           £0.2m              £0.8m



ii) Sensitivity to interest rates

During the year, the Group had a number of short term interest bearing loans. A 10 per cent. change
in the interest rate applied to these loans would have changed the interest expense for the year by
£7,000 (31.3.14: £17,000).
    6 Cost of sales                                                   Year ended         Year ended
                                                                        31.03.15           31.03.14
                                                                           £’000              £’000

    Gas                                                                      3,167              3,081
    Depreciation                                                               564                576
    Impairment charge                                                        5,144                753
    Other                                                                       73                254
                                                                             8,948              4,664


    7 Administrative expenses                                         Year ended         Year ended
                                                                        31.03.15           31.03.14
                                                                           £’000              £’000

    Payroll and social security                                                952                759
    Other administrative expenses                                              493                598
    Audit fees                                                                  37                 31
                                                                             1,482              1,388

Audit fees comprise £37,000 (year to 31.3.14: £31,000) paid to the Company’s auditor.

    8 Profit on sale of non-current asset                             Year ended         Year ended
                                                                        31.03.15           31.03.14
                                                                           £’000              £’000

    Sale proceeds                                                                 -            16,129
    Costs                                                                         -           (12,963)
    Profit on sale                                                                -             3,166


In 2007, the Company acquired four gas turbines. Following refurbishment of the turbines, the
Company intended to sell the turbines to its subsidiary in South Africa which was tendering for a
major power project. Due to weakening economic conditions, the project was delayed and it was
decided that it was in the best interests of shareholders to sell the turbines to a third party. During
2012, two of the turbines were sold. The remaining two turbines were sold during the prior year.

    9 Other expense                                                   Year ended         Year ended
                                                                        31.03.15           31.03.14
                                                                           £’000              £’000

    Storage and insurance charges1                                          (366)               (358)
    Profit on sale of shares2                                                   -                  44
    Foreign currency exchange gains                                           288                  32
                                                                              (78)              (282)


1   These costs relate to storage and insurance of the remaining balance of plant prior to their sale.

2A part of the sale consideration for the turbines was received in Rurelec PLC shares. These shares
were sold during the prior year at a profit of £44,000.

3NewCogen  PPE formed part of post balance sheet sale of Blazeway, therefore the carrying value of
PPE was written down to sale proceeds.




    10 Net finance expense                                            Year ended         Year ended
                                                                        31.03.15           31.03.14
                                                                           £’000              £’000

    Interest received on bank deposits                                           -                 -
    Interest expense:
 Bank interest                                                                   -                 -
 Loan note interest1                                                             -                 5
 Other loans interest2                                                          49               131
 Other interest3                                                                25                35
                                                                                74               171

 Net finance expense                                                            74               171

1Loan   note interest comprises interest on the £650,000 loan note (see also note 22).

2Other   loans interest comprises interest on other loans (see also note 22).

3Other   interest represents an accrual for interest payable on the overdue sum due to Ethos.

11 Tax expense / (credit)

No UK corporation tax or foreign tax is payable on the results of the Group. The relationship between
the expected tax credit and the tax credit actually recognised is as follows:

                                                                     Year ended          Year ended
                                                                       31.03.15            31.03.14
                                                                          £’000               £’000

 (Loss)/Profit for the year before tax                                    (6,933)                368
 Expected tax (credit)/charge based on standard rate of                   (1,456)                 85
 UK corporation tax (21%) (2014 – 23%)
 Tax losses utilised                                                           -                  85
 Addition to tax losses carried forward                                    1,456                   -

No deferred tax asset has been recognised owing to uncertainty as to the timing and utilisation of the
tax losses. In the event that a deferred tax asset was recognised at the reporting date, it is estimated
that the value of the deferred tax asset would be £4.6m (year to 31.3.14: £3.4m) in respect of the
Group and £5.8m (year to 31.3.14: £0.8m) in respect of the Company.

12 (Loss)/profit attributable to the parent company

The loss attributable to the Parent Company, IPSA Group PLC, was £24.0m (year to 31.3.14: £0.3m
profit). As permitted by Section 408 of the Companies Act 2006, no separate profit and loss account
is presented in respect of the Parent Company.

13 (Loss)/profit per share

The loss per share (year ended 31.3. 14 – profit) is calculated by dividing the result for the year
attributable to shareholders by the weighted average number of shares in issue during the year.

                                                                     Year ended          Year ended
                                                                       31.03.15            31.03.14

 (Loss)/profit attributable to equity holders of the Company             (£6.9m)              £0.4m
 Average number of shares in issue                                        107.5m             107.5m
 Basic, diluted and headline (loss)/profit per share                      (6.45p)              0.34p

There is no difference between the basic and diluted earnings per share as the 6.8m warrants
outstanding during the year were exercisable at a price either at or above the share price of the
Company and therefore had no dilution effect.
 14 Plant and equipment                                     31.03.15                      31.03.14
                                                               £’000                         £’000
 Cost
 At beginning of year                                          12,595                        12,890
 Addition in year                                                  99                         2,536
 Exchange adjustment                                            (252)                       (2,831)
 At end of year                                                12,442                        12,595

 Depreciation
 At beginning of year                                          4,857                          4,514
 Charge for the year                                              564                            575
 Impairment charge                                             5,144                             753
 Write off of spares                                               75                              -
 Exchange adjustment                                            (114)                          (985)
 At end of year                                               10,526                          4,857

 Net book value at start of year                                7,738                         8,376
 Net book value at end of year                                  1,916                         7,738

Property, plant and equipment has been valued at cost. It represents the 18 MW Gas Turbines and
5.8 MW of Engine (3.8 MW currently not commissioned) plant in NewCogen.

The commissioned plant has been subject to an impairment review and the directors consider that
during the year an impairment of £5.1m has arisen (2014: £0.8m). £3.9m of this impairment has
occurred in RSA, the remaining £1.2m is a consolidation adjustment in the UK relating to the
recoverable amount from the sale of Blazeway. The recoverable amount of this asset is established
by assessing the value in use of the plant and discounting the estimated future cash flows using a
pre-tax discount rate that reflects current market assessments of time value of money and the risks
specific to the asset.

The main assumptions used in estimating the future cash flows include i) an asset life of 25 years, ii)
continuing demand during that period for the electricity and steam generated by the plant, iii)
escalation in the prices that electricity and steam will command based management’s estimates and
experience and iv) management’s estimates of the price and availability of gas to supply the plant.
The estimated future cash flows have been discounted at a rate of 10.8% (2014: 10.4%) (based on
the ZAR long term borrowing rate).

As announced on 28th January 2016 the disposal of Blazeway had proceeds of £1,916K. Under IFRS
accounting standards (IAS 10) the Group carrying value should reflect the value of proceeds as
opposed to the future cash flows of the assets disposed of.

Impairment – NewCogen

The Directors recognise that the determination of an appropriate discount rate is judgemental and is
the key assumption in the value in use calculation and therefore sensitivities were performed which
address how increases in the discount rate might affect the value in use.
    ?   Cash flows for 25 years were extrapolated using electricity escalator rates at an average of
        7% based on management’s view on likely electric power escalator rates.
    ?   Cash flows were discounted using the CGU’s pre-tax discount rate of 10.4%


 15 Investments in subsidiary undertakings                                   31.03.15           31.03.14
                                                                                £’000              £’000

 Investment in Blazeway Engineering Ltd1                                           500               500

 Loans to Blazeway Engineering Ltd2                                              1,160            14,924

 Loans to Newcastle Cogeneration (Pty.) Ltd2                                     5,953              7,945

 Write down to Blazeway sale proceeds3                                          (5,697)                 -
                                                                                   1,916             23,369

    Investments in subsidiary undertakings - movement in year
                                                                                                      £’000

    Investment in subsidiary undertakings at 31.03.14                                                23,369

    Increase in investment                                                                              135
    Increase in loans                                                                                 1,359
    Impairment to write down to Blazeway sale proceeds3                                            (22,947)

    Investment in subsidiary undertakings at 31.03.15                                                 1,916

1 Investment in Blazeway Engineering Ltd
The Company owns 100 per cent. of the issued share capital of Blazeway Engineering Ltd (a company
incorporated in England and Wales, company number 5356014). The investment has been valued at
cost. Blazeway Engineering Ltd owns 100 per cent. of Newcastle Cogeneration (Pty.) Ltd (a company
incorporated in the RSA).

2 Loans to Blazeway Engineering Ltd and to Newcastle Cogeneration (Pty.) Ltd
The Company has funded the construction of the plant in South Africa and the initial start-up losses
with a combination of share capital (£2.8m) and loans (£22.2m). The loans were previously repayable
on demand but in view of the start-up losses incurred, the Company regards the loan as quasi-equity
and is no longer charging interest on the loans. As a result, the loans are classified as part of the
Company’s net investment in South Africa. During the prior year, ZAR 200m / £14.3m of loans from
the Company to NewCogen were assigned to Blazeway Engineering Ltd. The investments in and loans
to subsidiary undertakings have been subjected to an impairment review. Under IFRS accounting
standards (IAS 36) it is estimated that during the year an impairment of £22.8m (2014: £1.7m) has
occurred and has accordingly been deducted from the loans to Blazeway Engineering Ltd.

3Write down to Blazeway sales proceeds, on 28th January 2016 IPSA announced the sale of Blazeway.
Under IFRS accounting standards (IAS 10) the carrying value of Blazeway investment has been
adjusted to sale proceeds rather than the future earnings of its subsidiary NewCogen.

    16 Trade and other receivables due in                                  31.03.15             31.03.14
    less than one year                                                         £’000               £’000

    a) Group
    Trade receivables                                                             368                 309
    Deferred consideration1                                                     2,963               3,194
    Vat receivable                                                                  2                   29
    Other receivables and prepayments                                              89                   43
                                                                                3,422               3,575
    b) Company
    Trade receivable                                                               24                    3
    Deferred   consideration1                                                   2,963               3,194
    Vat receivable                                                                  2                  19
    Other receivables and prepayments                                              79                  33
                                                                                3,068               3,249

1 The deferred consideration relates to the sale of the two turbines. This receivable was due by
30.09.2015. The directors are of the view that this will be settled in the next few months and that no
impairment has occurred.

All other trade and other receivables are unsecured and are not past their due dates. In the opinion
of the directors, the fair values of receivables are not materially different to the carrying values shown
above.

    17 Stock                                                             31.03.15            31.03.14
                                                                        £’000              £’000

    a) Company                                                                -            1,320


    18 Cash and cash equivalents                                     31.03.15          31.03.14
                                                                        £’000             £’000
    a) Group
    Cash at bank and in hand                                                 3                 61
    b) Company
    Cash at bank and in hand                                                  -                17


    19 Assets held for sale                                          31.03.15          31.03.14
                                                                        £’000             £’000

    Spares and ancillary equipment                                      4,000              4,000


These assets comprise spares and ancillary equipment were originally acquired in 2007 as part of a
package including four turbines. The turbines have been sold and the remaining equipment is
expected to be sold within the next 12 months. The figure of £4m represents the current valuation of
the assets.

    20 Share capital                                                 31.03.15          31.03.14
                                                                        £’000             £’000

    Issued and fully paid
    107,504,018 ordinary shares of 2p each                               2,150             2,150


There were no changes in the share capital of the Company during the year (2014 – none).

    21 Trade and other payables                                      31.03.15          31.03.14
                                                                        £’000             £’000
    a) Group
    Trade payables1                                                     5,375              5,540
    Other payables2                                                     1,777              1,302
                                                                        7,152              6,842

    b) Company
    Trade payables1                                                     4,953              5,154
    Other payables2                                                     1,682              1,201
                                                                        6,635              6,355

Trade payables include:
1 An amount of €5.6m/£4.1m (31.3.14: €5.3m/£4.4m) claimed by Ethos (formerly Turbocare) in

respect of the refurbishment work (which was completed in 2008 on the turbines) plus storage
charges and interest (calculated at 1 month EURIBOR plus 1 per cent. per annum on the amount
outstanding). At the balance sheet date €2.9m (£2.1m) was overdue, with €2.7m (£2.0m) due within
six months. The remainder (Group £1.275m, Company £0.853m) were due in less than one month.
€1.4m/£1.1m has been paid since the year end.

2 Other payables includes an accrual for directors’ remuneration and salaries of £1.65m (31.3.14:
£1.15m) accrued but unpaid in respect of remuneration due to the directors and one employee – see
also note 27. At the balance sheet date this amount was overdue. The remainder (Group £122k,
Company £32k) were due in less than one month. Since the year end the directors and one employee
have waived all amounts due up to 31.03.15, this will be reflected in the next set of accounts.




    22 Borrowings                                                    31.03.15          31.03.14
                                                                        £’000             £’000
    a) Group
    Other loans including accrued interest1                                    946                 238
                                                                               946                 238

    b) Company
    Other loans including accrued interest1                                    946                 238
                                                                               946                 238


1In 2015 two new loans totalling £0.2m, to support expansion of the plant in NewCogen, were drawn
down during the year. Interest on these new loans is at 5.7% per annum. The loan is repayable within
12 months. This loan has been repaid after the year end.

Additionally, a new loan of £0.5m, has been drawn down to support the parent’s working capital
requirements and provide £0.1m of working capital support for NewCogen. Interest on this new loan
is at 1% per month. This loan is repayable 180 days after drawdown and at the balance sheet date
was in default. This loan formed part of the non-cash consideration transfer of IPSA liabilities to Sloane
Corporation Ltd as part of the sale of Blazeway which completed on 29 th February 2016.

In 2014 a new loan of £0.2m, to support expansion of the plant in NewCogen, was drawn down during
the year. Interest on this new loan is at 5.7% per annum. The loan is repayable within 12 months.
This loan has been repaid after the year end.

£0.1m is denominated in ZAR, all other borrowings are denominated in sterling.

23 Financial instruments and risk management

The Group is exposed to a variety of financial risks which result from both its operating and investing
risks. The Group’s risk management is coordinated to secure the Group's short to medium term cash
flows by minimising the exposure to financial markets. The Group does not actively engage in the
trading of financial assets for speculative purposes nor does it write options. The most significant risks
to which the Group is exposed are described below. As the Group has only one operating subsidiary,
the impact on the parent Company is deemed to be materially similar to the impact on the Group.

     a)   Foreign currency risk
          The Group’s principal trading operations are based in South Africa and as a result the Group
          has exposure to currency exchange rate fluctuations in the ZAR relative to sterling.

     b)   Interest rate risk
          Group funds are invested in short term deposit accounts, with a maturity of less than three
          months, with the objective of maintaining a balance between accessibility of funds and
          competitive rates of return.

     c)   Capital management policies and liquidity risk
          The Company considers its capital to comprise its ordinary share capital, share premium,
          accumulated retained earnings and other reserves.

          The Company’s objective when maintaining capital is to safeguard the Group’s ability to
          continue as a going concern so that it can provide returns for shareholders and other
          stakeholders.

          The Company meets its capital needs by a combination of equity and debt funding and
          attempts to anticipate the future cash requirements for each project and put in place
          appropriate equity and debt facilities to match the funding requirements of these projects. As
          a result of the time taken to secure a purchaser for the Company’s turbines, the Company
          was required during the year to obtain extensions to the repayment dates of loans and bank
          borrowings. Since the year-end, these loans and borrowings have been repaid.

          The Group does not have any derivative or hedging instruments.

     d)   Credit risk
          Generally, the maximum credit risk exposure of financial assets is the carrying amount of the
          financial assets as shown on the face of the statement of financial position (or in the detailed
          analysis provided in the notes to the financial statements). Credit risk, therefore, is only
          disclosed in circumstances where the maximum potential loss differs significantly from the
        financial asset’s carrying amount. The Group’s trade and other receivables are actively
        monitored to avoid significant concentrations of credit risk. At the balance sheet date the
        Group and Company receivable re deferred consideration of £3.0m was due in less than six
        months. This receivable is now overdue, the directors expect it to be settled shortly and after
        review are of the opinion that no impairment has occurred. The Company’s primary credit risk
        relates to the investment in its subsidiaries. As noted in note 3.18, this is reviewed on an
        annual basis.

   e)   Fair values
        In the opinion of the directors, there is no significant difference between the fair values of the
        Group’s and the Company’s assets and liabilities and their carrying values and none of the
        Group’s or the Company’s trade and other receivables are considered to be impaired.

The financial assets and liabilities of the Group and the Company are classified as follows:

                                                  Group           Group         Company         Company
                                              Loans and        Amortised       Loans and       Amortised
                                             Receivables            Cost      Receivables           Cost

 31.03.2015                                         £’000           £’000            £’000          £’000

 Trade and Other Receivables < 1 year                3,422                -          3,068               -

 Cash and Cash Equivalents                               3                -                -             -

 Trade and Other Payables                               -         (6,583)                  -      (6,066)

 Borrowings                                             -            (946)                 -        (946)
                                                    3,425         (7,529)            3,068        (7,012)

 31.03.2014                                         £’000           £’000            £’000          £’000

 Trade and Other Receivables < 1 year                3,546                -          3,230               -

 Cash and cash equivalents                              61                -              17              -

 Trade and other payables                                 -        (6,841)                 -      (6,356)

 Borrowings                                             -            (238)               -          (238)
                                                    3,607         (7,079)            3,247        (6,594)

In the opinion of the directors, there is no significant difference between the fair values of the Group’s
and the Company’s financial assets and liabilities and their carrying values.

24 Capital commitments

There were no outstanding capital commitments at the year end.

25 Contingent liabilities

During the 2013 year, the Company entered into a contract for the sale of two turbines. The
prospective purchaser paid a non-refundable deposit of US $3.1m (£1.9m). Under the terms of the
contract, the deposit was forfeited as the purchaser failed to complete the contract. The Company
has been advised that the purchaser has initiated proceedings to recover the deposit. As announced
on 4th February 2016 the final appeal was rejected.
26 Related party transactions

Material transactions with related parties during the year and up the date of these accounts were as
follows:
   i) Charge to the Company of £60,000 by Independent Power Corporation PLC (“IPC”) under a
      “Shared Services Agreement” for the provision of offices and other administrative services. P
      Earl, E Shaw and P Metcalf (deceased) were directors of IPC. P Earl is currently a director and
      owner of IPC. A sum of £113,000 was owing to IPC at the year-end (31.3.14: £36,000).
   ii) Group salaries (short term employee benefits) payable to key management totalling £564,000
      has been charged to the profit and loss account during the year (12 months to 31.3.14:
      £264,000).
   iii) Receipt from Rurelec PLC of £0.2m in the year for payment of deferred consideration. At the
      year end the balance was £3.0m. Since the year end £1.2m has been received or paid to
      creditors on IPSA’s behalf. The longstop date for settlement was 30.09.2015. The current
      balance of £1.8m is overdue, at the date of this report. No interest is payable of the balance
      outstanding. P Earl and E Shaw were directors and are shareholders in Rurelec PLC.
   iv) Sale of Blazeway Engineering Ltd to Sloane Corporation Ltd, a company controlled by P Earl,
       for total consideration of £1.9m. The sale was announced on 28 January 2016 and completed
       on 29 February 2016.

Transactions between the Company, NewCogen and Blazeway Engineering Ltd:

   i) New loans to NewCogen amounting to £1.3m.
      No interest is currently being charged on the loans to NewCogen or Blazeway.

 27 Directors’ and employee costs                                       Year ended            Year ended
                                                                          31.03.15              31.03.14
                                                                              £’000                £’000
 Aggregate remuneration of all employees and
 directors, including national insurance                                        952                 759

The charge in respect of directors ‘remuneration is as follows:

                                                  Salary             Fees         Reversal         Total
                                                 incl. NI                          of 2013
                                                   2015            2015          standstill       2015
                                                   £’000           £’000             £’000        £’000

 R Linnell                                             -               45               23           68
 N Bryson                                              -               25               24           49
 M Otto                                              107                -                -          107
 P Earl                                               22                -               38           60
 P Metcalf (deceased 11.14)                           41                -               20           61
 E Shaw                                               60                -               44          104
                                                     230               70              149          449


Of the charge in the year the following amounts have been paid: R Linnell £23k, N Bryson £13k, M
Otto £107k, P Earl nil, P Metcalf £33k, and E Shaw £30k.

In 2013 the directors agreed a 20% standstill of amounts owed at 31.3.13 subject to payment being
made in an agreed timeframe. The company was unable to make these payments, so this standstill
has been reversed in 2014/5.

The total accrual for unpaid salary and fees stands at £1.8m (2014: £1.1m). As part of the after date
Blazeway transaction the directors and one officer agreed a waiver of salaries and fees this will result
in credit in 2015/6 accounts of £0.6m.

                                                            Salary            Fees              Total
                                                            incl. NI
                                                              2014            2014              2014
                                                              £’000           £’000             £’000
 R Linnell                                                         -             45                45
 N Bryson                                                          -             25                25
 M Cox                                                             8              -                 8
 P Earl                                                                           4                 4
 M Eyre                                                           14              -                14
 P Metcalf                                                        65              -                65
 R Sampson                                                         -              6                 6
 E Shaw                                                           59              -                59

                                                                146               80              226

The Group considers the directors to be the key management personnel.

The average number of employees in the Group, including directors, was 26 (2014: 26).

28 Post Balance Sheet Events

Since the balance sheet date, the disposal of Blazeway was announced on 28th January 2016 for a
total consideration of £1.9m. The sale includes 100% of the share capital of NewCogen, loss making
owner of the Group’s only operational asset. Under IFRS accounting standards the directors consider
this an adjusting event relating to IAS 10 - Events After the Reporting Period, as the Group no longer
expects to receive the future cash flows of the disposed entities. It is therefore appropriate that entity
and consolidation adjustments are made to the carrying value of Blazeway to reflect the sale proceeds.
The directors recognise that following this fundamental disposal, IPSA will become a cash shell and
under AIM rule 15 will be deemed to be an investing company.

Date: 15/03/2016 05:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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