TIDMAXS
RNS Number : 9644U
Accsys Technologies PLC
02 July 2009
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2nd July 2009AIM: AXS
NYSE Euronext Amsterdam: AXS
Accsys Technologies PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR
THE 12 MONTHS ENDED 31 MARCH 2009
Accsys Technologies PLC (www.accsysplc.com) is an environmental science and
technology company whose primary focus is on the production of Accoya
acetylated wood and technology licensing via its wholly owned subsidiary, Titan
Wood Limited.
Financial Highlights
* Revenue of EUR31.2 million (2008: EUR27.3 million)
* Significant further investment in the business to prepare for growth and future
opportunities reflected in pre-tax profit of EUR1.8 million (2008: EUR5.4 million)
* Net profit of EUR5.4 million (2008: EUR4.1 million)
* Earnings per share of EUR0.035 (2008: EUR0.027)
Operational Highlights
* Development of Arnhem facility increasing capacity by 33%
* Tricoya wood elements brand launched
* Joint Development Agreement with Medite Limited for Medium Density Fibreboard
* Current License Agreements for 650,000m3 and License Option Agreements for
420,000m3
* Expectations of additional license options and agreements in 2009/2010
* Expansion of trading agreements including into North America
* Paul Clegg appointed as non-executive director
* Appointed Matrix Corporate Capital, Nominated Adviser and Broker
Executive Chairman, Willy Paterson-Brown, said, "In challenging economic
circumstances we have made good progress in many areas this year. Our Accoya
wood product continues to gain strong brand recognition on a growing
international stage and we have successfully launched Tricoya , our second
brand. We continue to work on developing new territories and partnerships and
have invested in the business to prepare for this growth. We have established
ourselves as a leading 'sustainable' business and are positioning ourselves to
take advantage of the significant changes facing the wood industry as
environmental legislation starts to impact historic practices. This is an
exciting time for us."
The audited financial statements for the year ended 31 March 2009 follow.
-ENDS-
For further information, please contact:
+--------------------------+-------------------------------------+----------------------+
| Accsys Technologies PLC | William Paterson-Brown, | +44 20 8150 8835 |
| | Executive Chairman | |
| | | |
+--------------------------+-------------------------------------+----------------------+
| Matrix Corporate Capital | Stephen Mischler | +44 20 3206 7000 |
| LLP | Anu Tayal | +44 20 7653 9850 |
| Threadneedle | Graham Herring | |
| Communications | Josh Royston | |
| | graham.herring@threadneedlepr.co.uk | |
| | josh.royston@threadneedlepr.co.uk | |
| | | |
+--------------------------+-------------------------------------+----------------------+
| Citigate First Financial | Wouter van de Putte | + 31 20 575 4080 |
| B.V. | Laurens Goverse | |
+--------------------------+-------------------------------------+----------------------+
Chairmans statement
Introduction
I am pleased to report another successful year for the Group. We have continued
to make good progress despite the impact of the global economic recession and
the particularly challenging market conditions.
We have continued to develop our Accoya wood technology and have made
significant capacity improvements to our Arnhem plant. The breadth of
distribution for our Accoya wood has increased significantly, with sales being
made to our first licensee, Diamond Wood China Limited ("Diamond Wood") in
China, and distribution agreements put in place for the key North American
market.
I am particularly pleased with the progress we have made in developing our
technology for the wood based composites market. The technology, which we have
branded Tricoya , is based on the acetylation of wood elements to make high
performance panels. In June 2009 we signed a Joint Development Agreement with
Medite (Europe) Limited to develop and build the first medium density fibreboard
(MDF) plant, incorporating Tricoya wood elements, to supply markets in the UK
and Ireland.
Whilst progress with licensing has been slower than anticipated due to the
economic climate, progress continues to be made by Diamond Wood for the
construction of a plant in China and by Al Rajhi for a plant in the Middle East.
We also signed additional licence options for 370,000m3 during the year. Diamond
Wood extended their commitment to China with an additional option for 250,000m3.
In addition, an option agreement for 120,000m3 for Safwood SpA in Italy, Austria
and Switzerland was signed, although revenue will be recognised in the future.
Summary of financial results
We report revenue of EUR31.2m (2008: EUR27.3m), up 14% from last year. Net profit
increased to EUR5.4m (2008: EUR4.1m), up 32%, which includes the recognition of
deferred tax assets that had previously not been recognised, with Group profit
before tax of EUR1.8m (2008: EUR5.4m). Other income of EUR8.3m (2008: EURnil) was
generated from the early settlement of a licensing agency agreement during the
year. Administrative costs increased by 60% compared to 2008 as we increased our
engineering and technical resources to develop our technology and to work with
existing and potential licensees. We also expanded our sales and marketing team
on a global basis to develop the Accoya wood and Tricoya wood elements brands.
As a consequence of this investment in the development of the business and
increase in the cost base, profit from operations fell to EUR1.0m (2008: EUR4.1m).
Our cash balance at 31 March 2009 was EUR17.5m (2008: EUR46.2m) which has decreased
due to capital expenditure on our Arnhem plant and a significant increase in
working capital to support the development of the business (see Financial
Review). The Group has no debt and an available equity line of credit for up to
EUR20m over three years. In addition, the Company has also signed an agreement
with an institutional investor to issue shares to a value of EUR4m in two equal
tranches during July 2009 and September 2009.
Share price and market listings
The movement in our share price over the last year has been very disappointing,
although this movement has been broadly in line with stock markets generally.
During the year we were selected by the Cleantech Group to join its prestigious
Cleantech index - www.cleantech.com. This index, which comprises 75 publicly
traded companies, offers investors an effective way to track and invest in the
leading companies from sectors including advanced materials, agriculture,
manufacturing, renewables and water.
In July 2008, we were also included in the Sustainable Business 20 (SB20) -
www.sustainablebusiness.com, list of the world's top sustainable stocks, where
we were listed as the world's sixth most sustainable business.
We welcome Matrix Corporate Capital LLP as our new Nomad and Brokers for our AIM
listing and look forward to working closely with them. We continue to work with
Fortis for our Euronext listing.
Board and management
I am pleased to announce the appointment of Paul Clegg to the Board as a
non-executive director, with effect from 29 April 2009. Paul was previously
Managing Director and Chief Executive of Cowen International Limited and has
over twenty years of senior investment banking experience.
We now have a team of 126 staff in the Group. Their commitment and dedication to
the growth of the Company continues to be a key factor in our success, and I
would like to thank them for their contribution and support.
Dividend
In 2008, shareholders received a dividend of EUR0.01 per share. Payment of a
dividend is not proposed for 2009. The Board deems it prudent for the Company to
protect as strong a balance sheet as possible during the economic downturn. The
Board will consider dividend payments again in the future as appropriate.
Prospects
We have made excellent progress during the past year in developing our
technology and building a team with the skills needed to license our Accoya
wood and Tricoya wood elements technology on a global basis.
One of the keys to our short term success is the completion of the fundraising
needed by Diamond Wood to allow them to complete the construction of their
Accoya wood plant in China and we will continue to support these efforts.
In this current global economic environment the Board deems it prudent to
continually review and focus on controlling costs, evaluating business
development strategy and recognising strategic opportunities so as to strengthen
the future prospects of the business. With that in mind we intend to reduce
costs and will continue to work on improving efficiencies in all departments.
We continue to develop strong relationships with potential licensees and, whilst
the current business environment has delayed the realisation of these prospects,
I remain confident that we will achieve our targets and deliver the expected
results.
It is a pleasure to serve as your Chairman and I would like to thank you for
your continuing support.
Willy Paterson-Brown
Executive Chairman
1 July 2009
Chief Executives report
Technology development
We have made excellent progress during the year in improving and optimising the
performance of our Arnhem facility. The commercial scale Accoya wood production
facility was designed and built with a maximum capacity of 30,000m3 on an annual
basis. Through the efforts of our engineering, research and development, and
operations teams we have implemented fundamental process changes, for relatively
low capital cost, which have resulted in the production capacity increasing to
over 40,000m3 on an annual basis. This increased production ability will further
increase the potential financial returns for licensees of our technology. We
will continue to identify and develop ways to improve our process and plant
capacity.
Our panel products team has had a very successful year. In March, we announced
the development of this technology, which we have branded Tricoya , and which is
based on the acetylation of wood elements to produce high performance panels. We
have subsequently signed a Joint Development Agreement with Medite(Europe)
Limited to build the first medium density fibreboard (MDF) plant incorporating
Tricoya wood elements, to supply the UK and Ireland.
Considerable time and resource has been devoted to carrying out an extensive
testing programme on alternative wood species for acetylation. Several species
have been identified where acetylation results have been positive, and we
consider this work to be very important for those prospective licensees that
want to use indigenous wood species. The staff at our Arnhem facility have not
only worked hard on the production of Accoya wood, implemented improvements to
the production processes and tested alternative wood species, but have also
welcomed existing and various potential licensees to demonstrate the
capabilities of our technology. Consequently, the Arnhem facility does not
operate at optimal performance levels, something we continue to emphasise, as it
is primarily a demonstration facility.
Increasing distribution of Accoya wood
The volume of sales of Accoya wood produced at our Arnhem facility increased by
122% year on year. Whilst this increase was lower than we had planned, given the
economic climate and downturn in the construction industry, we consider it to be
a creditable result.
In order to build a strong brand in the form of Accoya wood and license on a
global basis, it is necessary to establish sales and distribution channels on a
global basis. The first step of this process is to obtain the appropriate
certifications and testing protocols for each country. Our key focus this year
has been on establishing the Accoya wood brand in the USA. One of the
significant tests in the USA is against attack from termites, which is a severe
problem throughout the world, and which in the USA alone results in an annual
cost of approximately $5 billion, due to crippled structures, infested homes and
the need for costly repairs. We were pleased to announce that Accoya wood
produced very favourable results against standard termite testing in the USA,
having more than 20 times the resilience of untreated wood.
During the year we established several distribution agreements for North
America, which include UCS Forest Products, Bella Vista and East Teak.
A number of high profile projects have been carried out during the year using
Accoya wood. In particular, the construction of the first heavy traffic bridge
in Sneek in the Netherlands. The Dutch government specifies that all bridges
must last for at least 80 years, and Accoya wood was selected after a thorough
testing and verification process. Accoya wood represents a new era in building
technology due to its superior durability and dimensional stability.
Progress with licensing activity
The first licence we signed was for the China market with Diamond Wood in
respect of an annual production capacity of 500,000m3. During the year Diamond
Wood acquired an option for an additional 250,000m3 of production capacity and
extended its exclusivity for the Chinese market to 2015 and potentially beyond.
Planning and engineering design for the first phase of construction of the
Diamond Wood plant, which will have an annual capacity of 300,000m3 has been
completed, and government approval has been obtained for the first stage of
120,000m3. The securing of the necessary funding to build this first phase of
the plant was delayed due to the world financial crisis and economic recession.
After making enquiries, the Directors expect that this funding will be secured
before the end of 2009. We began shipping Accoya wood to China during the year
as Diamond Wood builds and establish the market for Accoya wood in advance of
the construction of its own facility, which, subject to the successful raising
of funding, is currently expected to come on stream in early 2011.
Our second licence agreement is with a large Saudi financial group, Al Rajhi
Holdings WLL. Al Rajhi has a licence for 150,000m3 annual capacity and exclusive
rights for the territories of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the
United Arab Emirates. The project is currently at the detailed planning and
engineering design phase and we are working with Al Rajhi to confirm their site
selection and establish appropriate partners for operating and distribution
activities.
In March we signed an option with Safwood SpA for an annual capacity of
120,000m3 and rights for Italy, Austria and Switzerland.
Discussions with additional potential licensees are continuing, albeit the
appetite for large capital projects has reduced over the last six months.
However, we are now starting to see renewed interest and enthusiasm as there are
signs that we are emerging from the recent economic turbulence and uncertainty.
We remain confident about the long term prospects for our Accoya wood
technology.
Management and people
Our success is totally reliant on the people who work in our business. During
the year we have continued to build the team to meet the challenges ahead, with
headcount increasing from 83 at the start of the year to 126 at the end of the
year. The increases have predominantly been in the technical and engineering
departments and in sales and marketing on a global basis. This increase in
manpower is reflected in rising administration overheads.
Outlook
During the coming year we look forward to further developing our technology,
increasing sales of our Accoya wood and delivering additional licensing
agreements. We will also be focusing on ensuring our cost base is appropriate
for the challenges ahead.
Finlay Morrison
Chief Executive Officer
1 July 2009
Financial Review
Income statement
Revenue
The Group had revenue of EUR31.2m (2008: EUR27.3m). Revenue from licencing was
broadly the same as last year, with the increase in revenue being generated from
increased sales of Accoya wood produced at our Arnhem facility.
Cost of sales
Cost of sales has increased to EUR20.2m (2008: EUR11.8m). On the licensing side,
costs have increased due to engineering and design costs for licensee projects.
The costs in Arnhem have increased partly due to additional Accoya wood
volumes, but also due to significant technology development, the testing of
alternative wood species and other testing for potential licensees.
Administrative expenses
Administrative costs increased significantly during the year to EUR18.3m (2008:
EUR11.5m) as we increased our staff numbers to an average of 112 in the year to 31
March 2009 (2008: 58), to drive sales and licensing activities on a global
basis, and to further develop our technology to meet the needs of existing and
potential licensees.
Other income
Other income of EUR8.3m (2008: EURNil) represents the profit generated from the
early settlement of a licensing agency agreement during the year.
Profit from operations
Profit from operations fell to EUR1.0m (2008: EUR4.1m) as a result of the increase
in administrative costs, which was not matched by an equivalent increase in
turnover due to the general economic environment.
Finance income
Finance income of EUR0.9m (2008: EUR1.3m) represents interest receivable on bank
deposits. The reduction compared to 2008 is due to lower bank deposits and the
reduction in interest rates.
Finance expense
The finance expense is the costs attributed to the issue of 3,120,000 warrants
under the equity line of credit agreement with GEM Global Yield Fund Limited.
The cost of issue of the warrants has been calculated using a Black-Scholes
model.
Taxation
There is no UK corporation tax liability for the year (2008: EUR1.4m) due to the
availability of losses within the Group.
There is a tax credit for the year as a result of the recognition of a deferred
tax asset of EUR2.6m and the release of an overprovision for corporation tax of
EUR1.0m relating to previous years.
Dividends
In 2008, shareholders received a dividend of EUR0.01 per share. Payment of a
dividend is not proposed for 2009.
The Board deems it prudent for the Company to protect as strong a balance sheet
as possible during the economic downturn.
Earnings per share
Basic earnings per share were EUR0.03 (2008: EUR0.03). Diluted earnings per share
were EUR0.03 (2008: EUR0.03).
Balance sheet
Fixed assets
Fixed assets additions of EUR2.6m predominantly relate to technology improvement
at our Arnhem production facility. The cost and accumulated depreciation were
both reduced by EUR7m as the prototype anhydride cracker which was fully impaired
in the year ended 31 March 2007, was dismantled and disposed of.
Available for sale investments
The Company holds 13,333,400 Ordinary shares in Diamond Wood China Limited, at a
cost of EUR6m (EUR0.45 per share).
Cash and bank
At 31 March 2009, the Group had cash and bank deposits of EUR17.5m (2008: EUR46.2m).
The reduction of EUR28.7m in the year includes payments for capital expenditure of
EUR7.7m, which included EUR5.3m in respect of additional land in Arnhem, which was
purchased in March 2008 but paid for in the current year, and a dividend payment
of EUR1.6m in respect of the year ended 31 March 2008. Cash generated from
operations, before changes in working capital, was EUR3.4m but associated working
capital increased by EUR23.9m. The increase in working capital is a function of
revenue recognition under licence agreements being made in line with the
proportion of work done, in accordance with IAS 18, but cash receipts from
licensees linked to project approvals and contractual payment terms. Interest
received was EUR0.9m with proceeds from the issue of share capital of EUR0.1m.
New equity
On 31 March 2009, the Company secured a EUR20m equity line of credit with GEM
Global Yield Fund Limited. This will provide the Company with the ability to
draw up to EUR20m over the next three years, although the timing of the drawing of
this facility is controlled by the Company and the Company is not obliged to
draw the funds. On drawdown, the Company will issue shares to GEM Global Yield
Fund Limited at a price per share which represents a 10% discount to the average
closing price over a 15 trading day period prior to drawdown. The Company has
also issued 3,120,000 warrants. The warrants will be exercisable for a period of
three years from the issue date at a price of EUR1.00 each. The first drawdown on
this facility was completed on 30 June 2009.
In addition, the Company has also signed an agreement with an institutional
investor to issue shares to a value of EUR4,000,000 in two equal tranches during
July 2009 and September 2009.
Trade and other receivables
Trade and other receivables have increased to EUR48.6m (2008: EUR5.1m) as the terms
of the licensing agreements results in the full amount of the income under the
contract becoming receivable, whilst the timing of cash receipts is over the
term of the contract. Where licensing income is receivable, but has not been
earned due to the stage of completion of the contract, then the income is not
recognised in the income statement, but is recorded as deferred income in the
balance sheet.
Trade and other payables
Trade and other payables have increased to EUR23.0m (2008: EUR8.7m). The increase of
EUR14.3m is due to an increase in trade payables of EUR1.1m due to the increase in
the level of production at our Arnhem plant, whilst accruals and deferred income
increased by EUR13.4m due to licensing income received and receivable that has not
been reflected in the profit and loss account due to the degree of completion of
the projects.
Capital structure/deferred shares
A total of 254,640 Ordinary shares were issued during the year as a consequence
of option holders exercising share options. At 31 March 2009, the Company had
155,590,302 Ordinary shares in issue.
The Company also had 1,000,000 Deferred shares that were bought back by the
Company for 0.1p per share during the year.
Risks and uncertainties
The balance sheet at 31 March 2009 contains significant balances in relation to
the Group's first licensee, Diamond Wood. Diamond Wood requires significant
funds so as to enable the construction of the planned 300,000m3 Accoya wood
manufacturing plant in Nanjing in China. The Group's net assets at 31 March 2009
were EUR92,339,000, of which EUR35,016,000 represents the total of the investment in
Diamond Wood, receivables for licence fees and other services and products, and
prepayments of costs incurred in respect of this project. Clearly the Group has
considerable amounts of working capital tied up in the Diamond Wood project.
After making enquiries, the Directors expect that Diamond Wood will raise the
necessary funds to complete this project, and therefore have concluded that no
impairment of this investment and working capital balances is required. However,
if sufficient funds are not obtained to construct the manufacturing plant, then
the carrying value of the related net assets of EUR35,016,000 would be in doubt
and may be impaired.
Going concern
The financial statements are prepared on a going concern basis, which assumes
that the Group will continue in operational existence for the foreseeable future
At the year end, the Group had amounts owing to it from trade debtors of
EUR21,683,000 and this amount has further increased since the balance sheet date.
As part of the Group's going concern review, the Directors have reviewed the
Group's trading and working capital requirements for the foreseeable future from
the date of signing these accounts. These forecasts indicate that, in order to
continue as a going concern, the Group is dependent on the timely repayment of a
significant proportion of these debts, together with further receipts related to
revenue generated and equity investments arranged since the balance sheet date.
The directors have considered the financial status of the most significant
debtors and the new institutional investor and their access to funds and while
the directors believe the amounts owing from those debtors are recoverable and
that the investment will be forthcoming, there is a material uncertainty around
the timing of the payments. If funds are not received in line with the Group's
timing requirements, the Directors will need to raise alternate funding in order
to continue as a going concern. Although the Directors believe the going concern
basis is the most appropriate on which to prepare the financial statements, this
matter constitutes a material uncertainty that may cast significant doubt over
going concern, and, therefore, that it may be unable to realise its assets and
liabilities in the normal course of business.
Kevin Wood
Chief Financial Officer
1 July 2009
Directors Report for the year ended 31 March 2009
The Directors present their report together with the audited financial
statements for the year ended 31 March 2009.
Results and dividends
The consolidated income statement for the year is set out on page 21.
A dividend of EUR0.01 per share was paid during the year in respect of the year
ended 31 March 2008.
The Directors do not recommend the proposal of a dividend in respect of the
current year.
Principal activities and review of the business
The principal activity of the Group is the development and commercialisation of
its proprietary technology for the manufacture of Accoya branded acetylated
wood. The Group is also engaged in the development of other related process
technologies with potential applications in the wood and chemicals industries. A
review of the business is set out in the Chairman's statement and the Chief
Executive's report on pages 1 to 4.
Financial instruments
Details of the use of financial instruments by the Company and its subsidiary
undertakings are set out in Note 23 of the financial statements.
Share issues and buy backs
An aggregate of 254,640 additional new ordinary shares were issued during the
year at a price of EUR0.46 each as a consequence of option-holders exercising
share options.
The Company also had 1,000,000 deferred shares that were bought back by the
Company for 0.1p per share during the year. This resulted in a total cost of
EUR1,480 to buy back the shares, which had a nominal value of EUR148,000, which were
then cancelled.
Principal risks and uncertainties
The business, financial condition or results of operations of the Group could be
adversely affected by any of the risks set out below. The Group's systems of
control and protection are designed to help manage and control risks to an
appropriate level rather than to eliminate them.
The Directors consider that the principal risks to achieving the Group's
objectives are those set out below.
(a) Economic and market conditions
The Group's operations comprise the manufacture of Accoya wood and licensing
the technology to do so to third parties. The cost and availability of key
inputs affects the profitability of the Group's own manufacturing whilst also
impacting the potential profitability of third parties interested in licensing
the Group's technology. The price of key inputs and security of supply are
managed by the Group, partly through the development of long term contractual
supply agreements.
In the current economic climate, the potential to enter into additional licence
agreements may be lower than originally anticipated.
The Group has an investment of EUR6m in its first licensee, Diamond Wood China
Limited, together with substantial receivables due in respect of technology fees
and sales of Accoya wood. The carrying value of this investment and the
recoverability of these receivables are dependant on the raising of funds by
Diamond Wood to build their production plant and execute their business plan.
See the Financial Review for more details.
(b) Regulatory, legislative and reputational risks
The Group's operations are subject to extensive regulatory requirements,
particularly in relation to its manufacturing operations and employment
policies. Changes in laws and regulations and their enforcement may adversely
impact the Group's operations in terms of costs, changes to business practices
and restrictions on activities which could damage the Group's reputation and
brand.
(c) Employees
The Group's success depends on its ability to continue to attract, motivate and
retain highly qualified employees. The highly qualified employees required by
the Group in various capacities are sometimes in short supply in the labour
market.
(d) Intellectual property
The Group's strategy of licensing technology depends upon maintaining effective
protection of its intellectual properties. Protection is afforded by a
combination of trademarks, patents, secrecy, confidentiality agreements and the
structuring of legal contracts relating to key engineering and supply
arrangements. Unauthorised use of the Group's intellectual property may
adversely impact its ability to license the technology and lead to additional
expenditures to enforce legal rights.
Key performance indicators
The Directors consider the following to be key performance indicators by which
progress in the development of the business may be assessed:
* Sales values of Accoya wood and the geographic spread of these sales - see
segmental analysis in note 2 for more information.
* Annual nameplate capacity of the Accoya wood production facility in Arnhem -
see the Chief Executive's report for more information.
* Process improvements to reduce progressively the direct cost per m3 to produce
Accoya wood, optimising the utilisation of direct materials, utilities and
capacity utilised in the wood modification process.
* The volume in m3 of licence options granted and exercised - currently the Group
has 1,070,000m3 of licence options granted and 650,000m3 exercised.
Future developments
The Directors' priorities for the Group's future development include:
* Certification and testing of Accoyawood in major markets to drive sales and
licensing efforts.
* Continual testing of alternative indigenous wood species for acetylation.
* Exploiting global demand for licensing Accoya wood technology.
* Developing the market for Tricoya wood elements and developing the first
commercial scale manufacturing plant for the production of acetylated wood fibre
products in MDF with Medite Europe Limited.
* Constant review and focus on costs to ensure the cost base is appropriate to
meet the objectives of the Group.
* Evaluation of business development strategy.
Directors
The Directors of the Company during the year were:
Willy Paterson-Brown
Finlay Morrison
Glyn Thomas
resigned 18 June 2008
Kevin Wood
appointed 18 June 2008
Stefan Allesch-Taylor resigned
9 May 2008
Gordon Campbell
Tim Paterson-Brown
The Rt. Hon. Lord Sanderson of Bowden, Kb, D.L.
Thomas Priday appointed 18
June 2008
Paul Clegg was appointed as a director on 29 April 2009.
Directors' interests in the Ordinary shares of the Company
The Directors' interests in the Ordinary shares at the year end were as follows:
Direct holdings Beneficial interests
31 March 2009 31 March 2008
31 March 2009 31 March 2008
Willy Paterson-Brown 2,000,000
2,000,000 3,000,000 *20,000,000
Gordon Campbell 100,000
100,000 - -
Finlay Morrison -
- - -
Tim Paterson-Brown -
- 2,500,000*20,000,000
Lord Sanderson 11,095
11,095 - -
Kevin Wood -
- - -
Thomas Priday -
- - -
Note * At 31 March 2008, 20,000,000 Ordinary shares were registered in the
name of MacNiven and Cameron Equity Holdings Limited. Messrs W Paterson-Brown
and T Paterson-Brown had beneficial interests in those shares as they were two
of the discretionary beneficiaries of a trust which owned the majority of the
issued share capital of MacNiven and Cameron Equity Holdings Limited. Neither of
these persons could exercise, nor influence the exercise of, the voting rights
of the Ordinary and Deferred shares held by MacNiven and Cameron Equity Holdings
Limited. On 8 May 2008, the Company was advised that the trust had been
dissolved and the directors' previously disclosed beneficial interest fell away.
On the same date, T Paterson-Brown disclosed he held a beneficial interest in
2,500,000 Ordinary shares and W Paterson-Brown disclosed he held a beneficial
interest in 3,000,000 Ordinary shares.
Directors' share options
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| | At 1 April 2008 | Granted during | Vested during | Exercised during | At 31 March 2009 |
| | | year | year | year | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Willy Paterson-Brown | | | | | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Vested at EUR0.46 | 1,440,000 | - | - | - | 1,440,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Vested at EUR2.59 | 333,333 | - | - | - | 333,333 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Unvested at EUR2.59 | 666,667 | - | - | - | 666,667 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Vested at EUR3.84 | 333,333 | - | - | - | 333,333 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Unvested at EUR3.84 | 666,667 | - | - | - | 666,667 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Total | 3,440,000 | - | - | - | 3,440,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| | | | | | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Finlay Morrison | | | | | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Vested at EUR3.80 | 333,333 | - | - | - | 333,333 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Unvested at EUR3.80 | 666,667 | - | - | - | 666,667 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Unvested at EUR1.38 | - | 250,000 | - | - | 250,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Total | 1,000,000 | 250,000 | - | - | 1,250,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| | | | | | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Kevin Wood | | | | | |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Unvested at EUR1.38 | - | 150,000 | - | - | 150,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
| Total | - | 150,000 | - | - | 150,000 |
+-----------------------+-----------------+----------------+-------------------+--------------------+------------------+
Details of the share option awards are set out in Note 12.
Directors' indemnities
The Company maintains directors' and officers' liability insurance which gives
appropriate cover for any legal action brought against its Directors.
Charitable donations
Charitable donations of EUR1,480 (2008: EURNil) were made during the year.
Employment policies
The Group operates an equal opportunities policy from recruitment and selection,
through training and development, appraisal and promotion to retirement. It is
our policy to promote an environment free from discrimination, harassment and
victimisation, where everyone will receive equal treatment regardless of gender,
colour, ethnic or national origin, disability, age, marital status or sexual
orientation. All decisions relating to employment practises will be objective,
free from bias and based solely upon work criteria and individual merit.
Health and safety
Group companies have a responsibility to ensure that all reasonable precautions
are taken to provide and maintain working conditions for employees and visitors
alike, which are safe, healthy and in compliance with statutory requirements and
appropriate codes of practice.
The avoidance of occupational accidents and illnesses is given a high priority.
Detailed policies and procedures are in place to minimise risks and ensure
appropriate action is understood in the event of an incident. A dedicated health
and safety officer is retained at the Group's manufacturing facility.
Creditor payment policy
The Group's policy, in relation to all of its suppliers, is to negotiate terms
of payment when agreeing the terms of transactions, to ensure that those
suppliers are made aware of the terms of payment and to abide by those terms
provided that it is satisfied that the supplier has provided the goods or
services in accordance with the agreed terms and conditions. The Group does not
follow any universal code or standard on payment practice but subsidiary
companies are expected to establish and adhere to payment terms consistent with
local procedures, custom and practice. For the year ended 31 March 2009, the
average payment period for trade creditors for the Group was 42 days (2008: 61
days) and for the Company was 18 days (2008: 23 days).
Going concern
The Directors have formed a judgement, at the time of approving the financial
statements, that there is a reasonable expectation that the Group has access to
adequate resources to continue in operational existence for the foreseeable
future. Further details are set out in note 1 to these financial statements.
Disclosure of information to auditors
All of the current Directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the Company's
auditors for the purposes of their audit and to establish that the auditors are
aware of that information. The Directors are not aware of any relevant audit
information of which the auditors are unaware.
Auditors
BDO Stoy Hayward LLP have expressed their willingness to continue in office and
a resolution to re?appoint them will be proposed at the annual general meeting.
By order of the Board
A Wyn-Griffiths
Company Secretary
1 July 2009
Corporate and Social Responsibility
Introduction
"Advancing technologies for a better world"
We are an environmental science and technology company, focused on the licensing
and production of environmentally friendly and sustainable acetylated wood
products. Corporate and social responsibility lies at the very core of our
business.
Our technologies not only enable us to manufacture wood products that offer
'best in class' durability, dimensional stability and a wide spectrum of
environmental advantages over alternative products, but also provide attractive
opportunities for licensees and our other stakeholders.
We want to ensure that our business is not only a commercial success, but that
we continue to advance technologies for a better world.
Our Product and the Environment
The main environmental benefit of our Accoya and Tricoyaacetylated wood
products, is their use as a substitute for other environmentally damaging
products including chemically treated wood that uses toxic preservatives,
unsustainably sourced tropical timber and materials produced from non renewable
resources such as metals (for example steel and aluminium) and plastics (such as
PVC).
Carbon footprint
During their growth, trees convert carbon dioxide (CO2) through photosynthesis
into cellulose and lignin, and emit oxygen in the process. As a result, during
their lifespan trees act as carbon sinks, since CO2 is captured from the
atmosphere and makes up approximately half of the dry weight stored in the wood
of the tree. The carbon is stored in the living tree, but will also remain
stored once the tree is felled and the wood of the tree is used for products
such as Accoya and Tricoya . As a consequence CO2 is locked out of the natural
carbon cycle during the lifespan of the wood or wood product.
Through decay or incineration, the carbon will eventually be released again into
the atmosphere in the form of CO2. This means that the use of renewable
materials such as wood can be perceived as CO2 neutral (if CO2 emitted during
production and transport is not taken into account).
In producing Accoya wood, we exploit this carbon capture mechanism in two ways.
Firstly, by using fast growing softwood species such as Radiata Pine as input
for our acetylation process. Per hectare, more cubic metres of Radiata Pine can
be grown (20-28m3/ha/yr) compared to slower growing wood species such as Teak
(6m3/ha/yr). Consequently, a larger amount of carbon is sequestered compared to
slow growing wood species.
Secondly, through the acetylation process, the dimensional stability and
durability (durability class 1 according to EN 350-1) of a wood species are
improved considerably. Accoya wood may be applied both in applications above
ground (user classes 1, 2 and 3 according to EN 335-1) and in direct ground
contact (user class 4 according to EN 335-1). As a result, Accoya wood is
guaranteed for 50 years above ground and 25 years below ground and so rather
than being a short term carbon store, it acts as a long term carbon sink.
We have recently commissioned Camco, a leading environmental consultancy group,
to report on the carbon footprint of Accoyawood so that we can better understand
our product, its impact on the environment and identify where further
efficiencies are possible. Camco's report resoundingly supports Accoyawood's
carbon sequestration credentials and contrasts Accoyawood with other man made
construction materials that Accoyacan replace, such as aluminium, PVC and steel.
These materials do not sequester carbon and during production emit a
considerably higher amount of carbon dioxide. Camco report that, for example, in
the production of aluminium over 140 times more CO2 is released into the
atmosphere per cubic metre than in the production of Accoya wood. Copies of
Camco's report our available on request from our offices.
It can be concluded that Accoyawood is one of the very few man-made construction
materials on the planet verified by an independent environmental consultancy
group to sequester carbon.
By understanding this, one can begin to appreciate the impact that Accoya wood
and Tricoya wood elements can have in slowing the accumulation of CO2 in the
atmosphere that contributes to climate change.
Life cycle assessment
Besides having a low carbon footprint, Accoya wood provides additional
environmental advantages in the use phase, such as lower maintenance
requirements due to the higher dimensional stability, a longer lifespan and a
high value for thermal insulation. This was also shown in a Life Cycle Analysis
(LCA) carried out by the Swiss research institute EMPA in 2007. EMPA confirmed
that the application of Accoya wood in window frames over a life span of 60
years has an environmental performance which is 19 to 26% better compared to
window frame material alternatives such as wood, PVC and aluminium. A new LCA
calculation based on our latest production figures is currently being undertaken
by Imperial College, London.
Non toxic
In contrast to many of our competitors, who produce wood products that derive
durability from using chemical treatment processes (such as chromate copper
arsenate (CCA) or alkaline copper quat (ACQ) treatments), our product is 100%
non-toxic and does not leach harmful substances. Due to Accoya wood's
outstanding durability, there is no need to apply chemicals such as CCA or ACQ
as is necessary with unmodified or envelope treated woods. We offer a real
alternative to these types of products.
Sustainable forestry
Wood sourced from sustainably managed forests and plantations is an
environmentally responsible resource, which in theory is inexhaustible.
Nevertheless, the demand for wood from certified forests is higher than the
supply, as Greenpeace International (2007) confirms: "Support for the FSC label
is high among major purchasers and retailers of forest products, but the tens of
billions of dollars in market demand for FSC products still far exceeds supply".
Our products therefore offer an "in demand" sustainable alternative to tropical
hardwoods. The fast growing renewable softwoods used in producing Accoya wood
can be grown and harvested in twenty five years, unlike tropical hardwoods that
take over a hundred years to mature. This means that in Accoyawood we have
developed a solution to the global problem of deforestation and destruction of
our ancient rainforests, often carried out illegally to the detriment of the
local communities, wildlife, flora and fauna.
The wood we use is harvested from FSC, PEFC and other certified sources giving
ourselves, our customers and our investors comfort that our supply forests are
managed in a sustainable way and sensitive to the needs of the local
environment. We oblige all our licensees to adhere to our requirements in this
regard.
We are proud to support Rainforest Concern, a UK registered charity established
to protect threatened natural habitats, the biodiversity they contain, together
with the people who depend on the rainforests for survival.
Engaging with local communities
We actively engage with local community projects as far as possible on a
pro-bono basis. By so doing we hope to:
1. showcase the high performance of our products;
2. draw attention to the viability of "green" products; and
3. assist local communities in reaching their goals.
Examples of these efforts include construction of Sneek Bridge (described
above), and the Green Life Smart Life Project, a green home building project in
the US.
Continuing research
Through our research and development group we are continually looking for ways
to develop our technologies and products to make them more energy efficient and
to reduce as far as possible any adverse impact on the environment. To that end,
we are currently engaged in comprehensive species testing with the end goal of
being able to commercially acetylate the softwood species that are most local to
any of our current and potential licensees, wherever they may be in the world.
That means reducing the need for transporting raw wood and therefore reducing
our carbon footprint still further.
Our Employees and Office
Our employees are vital to achieving our corporate vision. We strive to build
real collaborative team spirit, where each employee feels valued and their
individual needs are listened to.
We are committed to upholding the basic principles of human rights by treating
all of our employees with respect and doing our best to ensure that all of our
business partners adhere to the same code. We do not tolerate the harassment or
intimidation of any of our employees, and all employees are encouraged to bring
any such issues to the attention of senior management.
We will seek out and employ the best qualified personnel regardless of race,
religion, ethnic background, age, sex or disability. We believe that diversity
should be encouraged and inclusion should be the norm.
Each of our group's offices in the United Kingdom, the Netherlands and the
United States promote an environmentally friendly policy. We believe even small
actions contribute to our overall goals. For example, we use either 100%
recycled paper or paper produced from wood pulp harvested from sustainable
forests and encourage a policy of recycling by providing recycling bins in the
office. Our employees are expected to switch off computers, lights and other
electrical goods when not in use to conserve energy. Our offices are also being
fitted with energy efficient light bulbs.
Our Health and Safety
Accsys Technologies is committed to maintaining a healthy and safe environment
for all its group employees, licensees, business partners, customers and the
communities where we operate.
Our demonstration plant in Arnhem, the Netherlands uses acetic anhydride in the
production of Accoya wood and generates acetic acid as a bi-product of
acetylation.
We mitigate any marginal health and safety risk associated with these low impact
chemicals and the production process as a whole by ensuring our plant is at all
times fully compliant with legal and regulatory health and safety requirements.
Our wholly owned subsidiary company, Titan Wood BV employs a manager responsible
for ensuring that the facility operates to the highest health and safety
standards and in accordance with our bespoke Titan Wood Health and Safety
Policy. The Health and Safety Policy provides for:
* regular monthly staff meetings to discuss health and safety matters;
* the promotion of knowledge of our employees and their input in the field of
health and safety;
* the promotion of a safety conscious attitude amongst employees;
* reducing as far as possible the use and exposure of employees to harmful
substances;
* encouraging the development of better, safer and healthier working methods and
equipment to prevent distress and/or material damage arising from work and work
related accidents;
* addressing the root causes of potential dangers;
* preventing situations that may otherwise lead to accidents;
* the proper design of our production facility;
* regular maintenance and inspection of our facility; and
* selecting suppliers according to our requirements for health and safety in
addition to quality and environmental concerns.
The health and safety measures taken by Titan Wood BV have helped ensure there
have been no material health and safety issues in any part of the business.
Our Business Partners
We want our own activities and also those of our licensees, suppliers and other
business partners to be socially and environmentally responsible. We are
committed to a policy of minimising any negative social and environmental impact
that may flow from our activities and expect the same high standards from our
business partners.
In particular, we expect our business partners:
* not to engage in or support the use of child labour;
* not to use forced labour (for example prison, indentured, bonded) and subject to
local legislation, allow all employees the right to free assembly and collective
bargaining;
* to provide a healthy and safe environment for their staff, customers and
visitors, and to comply with all applicable local environmental, safety and
health regulations;
* to provide an equality of opportunity and not discriminate against any worker on
any grounds of age, sex, marital status, disability, colour, race, religion,
nationality or ethnic origin;
* not to engage in harassment or intimidation of employees or support the use of
corporal punishment, mental, physical, sexual or verbal abuse; and
* to comply with all applicable wage and hour laws and regulations in their
relevant jurisdiction, including minimum wage, overtime and maximum hours.
Our Awards and Achievements
Many of the above factors have resulted in Accsys Technologies PLC being listed
in the Cleantech Index - the leading global stock exchange index of clean
technology companies - and the Sustainable Business Index, SB20. The SB20
showcases the most innovative, model companies that have the potential to most
positively impact the goal of reaching a sustainable society.
Titan Wood is also delighted to have received the overall Dutch National Award
for Sustainability Innovation, "The Columbus Egg", and the Award for Sustainable
Production Technology for Accoya wood in 2008. These awards are granted by the
Dutch Government and are designed to reward sustainability innovation within
businesses operating in the Netherlands.
Corporate Governance
Details of the Company's corporate governance arrangements are set out below.
The Board of Directors acknowledges the importance of the Principles set out in
The Combined Code issued by the Committee on Corporate Governance. The Combined
Code is not compulsory for AIM listed companies. The Board has applied the
principles as far as practicable and appropriate for a relatively small public
company.
The Board of Directors
Throughout the period, the Board comprised a Chairman, two executive Directors
and a minimum of three non-executive directors.
The Board meets regularly and is responsible for strategy, performance, approval
of major capital projects and the framework of internal controls. The Board has
a formal schedule of matters specifically reserved to it for decision. To enable
the Board to discharge its duties, all Directors receive appropriate and timely
information. Briefing papers are distributed to all Directors in advance of
Board meetings. All Directors have access to the advice and services of the
Company Secretary. The appointment and removal of the Company Secretary is a
matter for the Board as a whole. In addition, procedures are in place to enable
the Directors to obtain independent professional advice in the furtherance of
their duties, if necessary, at the Company's expense.
During the year, all serving Directors attended the quarterly Board meetings
that were held. In addition to the scheduled meetings there is frequent contact
between all the Directors in connection with the Company's business including
audit and nomination & remuneration committee meetings which are held as
required, but as a minimum twice per annum.
Directors are subject to re-election by the shareholders at Annual General
Meetings. The Articles of Association provide that Directors will be subject to
re-election at the first opportunity after their appointment and the Board
submit to re-election at intervals of three years.
Audit Committee
The Audit Committee consists of Gordon Campbell (Chairman), Tim Paterson-Brown
and Lord Sanderson. The Audit Committee meets at least twice a year and is
responsible for monitoring compliance with accounting and legal requirements and
for reviewing the annual and interim financial statements prior to their
submission for approval by the Board. The Committee also discusses the scope of
the audit and its findings and considers the appointment and fees of the
external auditors. The Audit Committee believes that it is not currently
appropriate for the company to maintain an internal audit function due to its
size.
The Audit Committee considers the independence and objectivity of the external
auditors on an annual basis, with particular regard to non-audit services. The
non-audit fees are considered by the Board not to affect the independence or
objectivity of the auditors. The Audit Committee monitors such costs in the
context of the audit fee for the period, ensuring that the value of non-audit
service does not increase to a level where it could affect the auditors'
objectivity and independence. The Board also receives an annual confirmation of
independence from the auditors.
Nomination & Remuneration Committee
The Nomination & Remuneration Committee consists of Lord Sanderson (Chairman),
Tim Paterson-Brown and G Campbell. The Committee's role is to consider and
approve the nomination of directors and the remuneration and benefits of the
executive Directors, including the award of share options. In framing the
Company's remuneration policy, the Nomination & Remuneration Committee has given
full consideration to Section B of The Combined Code.
Internal Financial Control
The Board is responsible for establishing and maintaining the Company's system
of internal financial control and places importance on maintaining a strong
control environment. The key procedures which the Directors have established
with a view to providing effective internal financial control are as follows:
* The Company's organisational structure has clear lines of responsibility.
* The Company prepares a comprehensive annual budget that is approved by the
Board. Monthly results are reported against the budget and variances are closely
monitored by the Directors.
* The Board is responsible for identifying the major business risks faced by the
Company and for determining the appropriate courses of action to manage those
risks.
The Directors recognise, however, that such a system of internal financial
control can only provide reasonable, not absolute, assurance against material
misstatement or loss. The Directors have initiated an internal process to
undertake annual reviews of the effectiveness of the system of internal
financial control operating across the Group.
Relations with shareholders
Communications with shareholders are given high priority.
There is regular dialogue with shareholders including presentations after the
Company's preliminary announcement of the year end results. The board uses the
Annual General Meeting to communicate with investors and welcomes their
participation. The Chairman aims to ensure that the Directors are available at
Annual General Meetings to answer questions.
Directors' attendance record
The attendance of individual directors at meetings of the Board and its
committees in the year under review was as follows:
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| | Board | | Audit Committee | | Nominations & |
| | | | | | Remuneration |
| | | | | | Committee |
+--------------------+--------------------+---+--------------------+---+--------------------+
| Number of meetings |Attended |Serving | |Attended |Serving | |Attended |Serving |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| | | | | | | | | |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Willy | 5 | 5 | | 3 | - | | 2 | - |
| Paterson-Brown | | | | | | | | |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Finlay Morrison | 5 | 5 | | 3 | - | | 1 | - |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Glyn Thomas (1) | 1 | 1 | | 1 | - | | 2 | - |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Kevin Wood (2) | 4 | 4 | | 2 | - | | 1 | - |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Gordon Campbell | 5 | 5 | | 3 | 3 | | 2 | 2 |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Tim Paterson-Brown | 5 | 5 | | 3 | 3 | | 2 | 2 |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Lord Sanderson | 5 | 5 | | 3 | 3 | | 2 | 2 |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Thomas Priday (3) | 4 | 4 | | 2 | - | | 1 | - |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
| Stefan | - | - | | - | - | | - | - |
| Allesch-Taylor (4) | | | | | | | | |
+--------------------+----------+---------+---+----------+---------+---+----------+---------+
Whilst all Directors are not members of the Board Committees they attend by
invitation.
Figures in the left hand column denote the number of meetings attended and
figures in the right hand column denote the number of meetings held whilst the
individual held office.
Notes
1. resigned from the Board on 18 June 2008
2. appointed to the Board on 18 June 2008
3. appointed to the Board on 18 June 2008
4. resigned from the Board on 9 May 2008
Statement of Directors Responsibilities
Directors' responsibilities
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group, for safeguarding the assets of the Company, for taking reasonable steps
for the prevention and detection of fraud and other irregularities and for the
preparation of a Directors' Report which complies with the requirements of the
Companies Act 1985.
The Directors are responsible for preparing the annual report and the financial
statements in accordance with the Companies Act 1985. The Directors are also
required to prepare financial statements for the group in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRSs) and the rules of the London Stock Exchange for companies trading
securities on the Alternative Investment Market. The Directors have chosen to
prepare financial statements for the Company in accordance with UK Generally
Accepted Accounting Practice.
Group financial statements
International Accounting Standard 1 requires that financial statements present
fairly for each financial year the Group's financial position, financial
performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and
expenses set out in the International Accounting Standards Board's 'Framework
for the preparation and presentation of financial statements'. In virtually all
circumstances, a fair presentation will be achieved by compliance with all
applicable IFRSs. A fair presentation also requires the Directors to:
* consistently select and apply appropriate accounting policies;
* present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information; and
* provide additional disclosures when compliance with the specific requirements in
IFRSs is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the entity's financial position and
financial performance.
Parent company financial statements
Company law requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period. In preparing
these financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
* make judgements and estimates that are reasonable and prudent; and
* state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements.
Financial statements are published on the Group's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of
financial statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the group's website is the responsibility of
the Directors. The Directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Auditors report
Independent auditor's report to the shareholders of Accsys Technologies PLC
We have audited the Group and parent company financial statements (the
"financial statements") of Accsys Technologies PLC for the year ended 31 March
2009 which comprise the consolidated income statement, the consolidated and
company balance sheets, the consolidated cash flow statement, the consolidated
statement of changes in equity and the related notes. These financial statements
have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The Directors' responsibilities for preparing the annual report and group
financial statements in accordance with applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union and for
preparing the parent company financial statements in accordance with applicable
law and United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice) are set out in the statement of Directors'
responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and have been properly prepared in accordance with the Companies
Act 1985 and whether the information given in the Directors' report is
consistent with those financial statements. We also report to you if, in our
opinion, the Company has not kept proper accounting records, if we have not
received all the information and explanations we require for our audit, or if
information specified by law regarding Directors' remuneration and other
transactions is not disclosed.
We read other information contained in the annual report, and consider whether
it is consistent with the audited financial statements. This other information
comprises only the Chairman's statement, the Chief Executive's report, the
Financial Review, the Directors' Report, Corporate and Social Responsibility
report, Corporate Governance and the Statement of Directors' Responsibilities.
We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our
responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the Companies Act
1985 and for no other purpose. No person is entitled to rely on this report
unless such a person is a person entitled to rely upon this report by virtue of
and for the purpose of the Companies Act 1985 or has been expressly authorised
to do so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose and
we hereby expressly disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgments made by the Directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the Group's and Company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
- the Group financial statements give a true and fair view, in accordance
with IFRSs as adopted by the European Union, of the state of the Group's affairs
as at 31 March 2009 and of its profit for the year then ended;
- the parent company financial statements give a true and fair view, in
accordance with United Kingdom Generally Accepted Accounting Practice, of the
state of the parent company's affairs as at 31 March 2009;
- the financial statements have been properly prepared in accordance with the
Companies Act 1985; and
- the information given in the Directors' report is consistent with the
financial statements.
Emphasis of Matter - Going Concern
In forming our opinion on the financial statements, which is not qualified, we
have considered the adequacy of disclosures made in note 1 to the financial
statements concerning the Group's ability to continue as a going concern. The
Group has significant amounts owing to it from trade debtors. The Group is
dependent on the recovery of these amounts in a timely manner, and the new
equity investments arranged since the balance sheet date, in order to continue
as a going concern. While the Directors are confident that the amounts are
recoverable, and that the investment will be forthcoming, there is a material
uncertainty over the debtors' ability to pay their debts in line with the
Group's funding requirements. A significant delay would result in the need for
the Directors to raise additional funding. These conditions, along with the
matters disclosed in note 1 to the financial statements, indicate the existence
of a material uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. The financial statements do not include
the adjustments that would result if the Group was unable to continue as a going
concern.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
London
1 July 2009
Consolidated income statement for the year ended 31 March 2009
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | Note | 2009 | | 2008 |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | EUR'000 | | EUR'000 |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Revenue | | | 31,191 | | 27,328 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| Cost of sales | | | (20,209) | | (11,761) |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Gross profit | | | 10,982 | | 15,567 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Administrative expenses | | | (18,292) | | (11,450) |
+-----------------------------------------+--------+--------+-----------+--+------------+
| Other income | | 5 | 8,290 | | - |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Profit from operations | | 6 | 980 | | 4,117 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Finance income | | 7 | 923 | | 1,328 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| Finance expense | | 8 | (82) | | - |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Profit before taxation | | | 1,821 | | 5,445 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Tax credit/(expense) | | 9 | 3,608 | | (1,364) |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Profit attributable to equity holders of the | | 5,429 | | 4,081 |
| parent | | | | |
+--------------------------------------------------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Basic earnings per ordinary share | | 10 | EUR0.03 | | EUR0.03 |
+-----------------------------------------+--------+--------+-----------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+--------+-----------+--+------------+
| Diluted earnings per ordinary share | | 10 | EUR0.03 | | EUR0.03 |
+---+-------------------------------------+--------+--------+-----------+--+------------+
The notes on pages 25 to 44 form part of these financial statements.
Consolidated balance sheet at 31 March 2009
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | EUR'000 | | EUR'000 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Non-current assets | | | | | |
+-----------------------------------------+--------+-------+------------+--+------------+
| | Intangible assets | | 13 | 7,852 | | 8,116 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Property, plant and equipment | | 14 | 28,013 | | 27,169 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Available for sale investments | | 15 | 6,000 | | 6,000 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Deferred tax | | 16 | 2,630 | | - |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Trade receivables | | 19 | 6,400 | | - |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | 50,895 | | 41,285 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Current assets | | | | | |
+-----------------------------------------+--------+-------+------------+--+------------+
| | Inventories | | 18 | 4,888 | | 4,932 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Trade and other receivables | | 19 | 42,185 | | 5,100 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Cash and cash equivalents | | | 17,503 | | 46,239 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | 64,576 | | 56,271 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Current liabilities | | | | | |
+-----------------------------------------+--------+-------+------------+--+------------+
| | Trade and other payables | | 20 | 23,004 | | 8,731 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Corporation tax | | | 128 | | 1,364 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | 23,132 | | 10,095 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Net current assets | | | 41,444 | | 46,176 |
+-----------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Total net assets | | | 92,339 | | 87,461 |
+-----------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Equity and reserves | | | | | |
+-----------------------------------------+--------+-------+------------+--+------------+
| | Share capital - Ordinary shares | | 21 | 1,556 | | 1,553 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Share capital - Deferred shares | | 21 | - | | 148 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Share premium account | | | 78,191 | | 78,076 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Capital redemption reserve | | | 148 | | - |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Warrants reserve | | | 82 | | - |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Merger relief reserve | | | 106,707 | | 106,707 |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | Retained earnings | | | (94,345) | | (99,023) |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| Equity attributable to equity holders of the | | 92,339 | | |
| parent | | | | 87,461 |
+--------------------------------------------------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
| | | | | | | |
+---+-------------------------------------+--------+-------+------------+--+------------+
The financial statements were approved by the Board and authorised for issue on
1 July 2009
Willy Paterson-Brown )
) Directors
Kevin Wood)
The notes on pages 25 to 44 form part of these financial statements.
Consolidated statement of changes in equity for the year ended 31 March 2009
+--------------------------+-------------+--+----+--+----+--+-----+--+----+--+----+--+----+----+
| | Share | | Share | | Share | | Capital |
| | capital | | capital | | premium | |redemption |
| | Ordinary | | Deferred | | | | reserve |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | EUR000 | | EUR000 | | EUR000 | | EUR000 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 1 April 2007 | 1,406 | | 148 | | 35,689 | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Profit and total | | | | | | | |
| recognised income | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| and expense for the | - | | - | | - | | - |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share based payments | - | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Shares issued in the | 131 | | - | | - | | - |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share options exercised | 16 | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Premium on shares issued | - | | - | | 43,152 | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share issue costs | - | | - | | (765) | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 31 March 2008 | 1,553 | | 148 | | 78,076 | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Profit and total | | | | | | | |
| recognised income | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| and expense for the | - | | - | | - | | - |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share based payments | - | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share Warrants issued | - | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share options exercised | 3 | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Premium on shares issued | - | | - | | 115 | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Buyback of deferred | - | | (148) | | - | | 148 |
| shares | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Dividends Paid | - | | - | | - | | - |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 31 March 2009 | 1,556 | | - | | 78,191 | | 148 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | Warrant | | Merger | | Retained | | Total |
| | reserve | | relief | | earnings | | |
| | | | reserve | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | EUR000 | | EUR000 | | EUR000 | | EUR000 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 1 April 2007 | - | | 106,707 | | (104,241) | | 39,709 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Profit and total | | | | | | | |
| recognised income | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| and expense for the | - | | - | | 4,081 | | 4,081 |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share based payments | - | | - | | 1,137 | | 1,137 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Shares issued in the | - | | - | | - | | 131 |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share options exercised | - | | - | | - | | 16 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Premium on shares issued | - | | - | | - | | 43,152 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share issue costs | - | | - | | - | | (765) |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 31 March 2008 | - | | 106,707 | | (99,023) | | 87,461 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Profit and total | | | | | | | |
| recognised income | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| and expense for the | - | | - | | 5,429 | | 5,429 |
| period | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share based payments | - | | - | | 804 | | 804 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share Warrants issued | 82 | | - | | - | | 82 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Share options exercised | - | | - | | - | | 3 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Premium on shares issued | - | | - | | - | | 115 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Buyback of deferred | - | | - | | (2) | | (2) |
| shares | | | | | | | |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Dividends Paid | - | | - | | (1,553) | | (1,553) |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| Balance at 31 March 2009 | 82 | | 106,707 | | (94,345) | | 92,339 |
+--------------------------+-------------+--+------------+--+-------------+--+------------+
| | | | | | | | |
+--------------------------+-------------+--+----+--+----+--+-----+--+----+--+----+--+----+----+
Share capital, both ordinary and deferred, is the amount subscribed for shares
at nominal value (note 21).
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of these shares, net of share issue expenses. Share issue
expenses comprise the costs in respect of the issue by the company of new
shares.
Capital redemption reserve represents the amounts transferred from share capital
on redemption of deferred shares.
Warrant reserve represents the costs associated with the issue of warrants,
calculated using a Black-Scholes model.
Merger relief reserve arose prior to transition to IFRS when merger accounting
was adopted, and it represents the difference between the nominal value of the
shares issued by the acquirer and the nominal value of the shares and share
premium of the company acquired.
Retained earnings represent the cumulative loss of the group attributable to the
equity shareholders of the parent.
Consolidated cash flow statement for the year ended 31 March 2009
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | 2009 | | 2008 |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | EUR'000 | | EUR'000 |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Profit before taxation | | | 1,821 | | 5,445 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Adjustments for: | | | | | |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Amortisation of intangible assets | | | 264 | | 264 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Depreciation of property, plant and equipment | | | 1,572 | | 1,447 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Finance income | | | (923) | | (1,328) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Equity-settled share-based payment expenses | | | 804 | | 1,137 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Equity-settled warrant expenses | | | 82 | | - |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Cash flows from operating activities before changes in working | 3,620 | | 6,965 |
| capital | | | |
+-------------------------------------------------------------------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Increase in trade and other receivables | | | (43,485) | | (4,015) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Decrease/(Increase) in inventories | | | 44 | | (4,022) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Increase in trade and other payables | | | 19,533 | | 369 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Cash generated by operating activities | | | (20,288) | | (703) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Tax Paid | | | (258) | | - |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Net cashflows from operating activities | | | 20,546) | | (703) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Cash flows from investing activities | | | | | |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Interest received | | | 923 | | 1,328 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Purchase of available for sale investments | | | - | | (6,000) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Purchase of property, plant and equipment (see note | | (7,676) | | (1,745) |
| below) | | | | |
+---------------------------------------------------------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Net cashflows from investing activities | | | (6,753) | | (6,417) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Cashflows from financing activities | | | | | |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Dividends Paid | | | (1,553) | | - |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Proceeds from issue of share capital | | | 118 | | 43,299 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Share issue costs | | | - | | (765) |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| Buyback cost for deferred shares | | | (2) | | - |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Net cashflows from financing activities | | | (1,437) | | 42,534 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Net (decrease)/increase in cash and cash equivalents | | 28,736) | | 35,414 |
+---------------------------------------------------------+---------+-----------+--+-----------+
| Opening cash and cash equivalents | | | 46,239 | | 10,825 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| Closing cash and cash equivalents | | | 17,503 | | 46,239 |
+------------------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
| | | | | | | |
+---------+--------------------------------------+--------+---------+-----------+--+-----------+
Note: Purchase of property, plant and equipment includes land in Arnhem that was
purchased in March 2008, but paid for in April 2008. The amount payable of
EUR5,260,000 was included in other creditors at 31 March 2008.
The notes on pages 25 to 44 form part of these financial statements.
Notes to the financial statements for the year ending 31 March 2009
1. Accounting Policies
Basis of preparation
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board as endorsed by the European Union and with those
parts of the Companies Act 1985 applicable to companies preparing their accounts
under adopted IFRS. The Company has elected to prepare its parent company
financial statements in accordance with UK Generally Accepted Accounting
Practice (UK GAAP). These are presented on page 45.
Going Concern
The financial statements are prepared on a going concern basis, which assumes
that the Group will continue in operational existence for the foreseeable future
At the year end, the Group had amounts owing to it from trade debtors of
EUR21,683,000 and this amount has further increased since the balance sheet date.
As part of the Group's going concern review, the directors have reviewed the
Group's trading and working capital requirements for the foreseeable future from
the date of signing these accounts. These forecasts indicate that, in order to
continue as a going concern, the Group is dependent on the timely repayment of a
significant proportion of these debts, together with further receipts related to
revenue generated and equity investments arranged since the balance sheet date.
The Directors have considered the financial status of the most significant
debtors and the new investor and their access to funds and while the Directors
believe the amounts owing from those debtors are recoverable and that the
investment will be forthcoming, there is a material uncertainty around the
timing of the payments. If funds are not received in line with the Group's
timing requirements, the Directors will need to raise alternate funding in order
to continue as a going concern. Although the directors believe the going concern
basis is the most appropriate on which to prepare the financial statements, this
matter constitutes a material uncertainty that may cast significant doubt over
going concern, and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
Risks and uncertainties
The balance sheet at 31 March 2009 contains significant balances in relation to
the group's first licensee, Diamond Wood. Diamond Wood requires significant
funds so as to enable the construction of the planned 300,000m3 Accoya wood
manufacturing plant in Nanjing in China. The Group's net assets at 31 March 2009
were EUR92,339,000, of which EUR35,016,000 represents the total of the investment in
Diamond Wood, receivables for licence fees and other services and products, and
prepayments of costs incurred in respect of this project. Clearly the Group has
considerable amounts of working capital tied up with the Diamond Wood project.
After making enquiries, the Directors expect Diamond Wood to raise the necessary
funds to complete this project, and therefore have concluded that no impairment
of this investment and working capital balances are required. However, if
sufficient funds are not obtained to construct the manufacturing plant, then the
carrying value of the related net assets of EUR35,016,000 would be in doubt and
may be impaired.
The accounting policies set out below have, unless otherwise stated, been
applied consistently in these financial statements.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The consolidated
financial statements present the results of the Group as if they formed a single
entity. Inter-company transactions and balances between Group companies are
therefore eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the consolidated balance sheet, the
acquirer's identifiable assets, liabilities, and contingent liabilities are
initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated income statement from
the date on which control is obtained.
As allowed under IFRS 1, some business combinations effected prior to transition
to IFRS, were accounted for using the merger method of accounting. Under this
method, assets and liabilities are included in the consolidation at their book
values, not fair values, and any differences between the cost of investment and
net assets acquired were taken to the merger reserve.
Revenue recognition
Revenue is measured at the fair value of the consideration receivable. Revenue
is recognised to the extent that it is probable that the economic benefit will
flow to the Group and that the revenue can be reliably measured. The following
specific recognition criteria must also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer.
Licence fee income
Licence fee income is recognised over the period of the relevant agreements
according to the specific terms of each agreement or the quantities and/or
values of the licensed product sold. Initial "up front" income received, which
is non-refundable, is recognised on a straight line basis over the period of the
agreement or pro-rata to the volume or value of sales according to the specific
terms of the agreement. The amount of income not recognised is included in the
financial statements as deferred income and shown as a liability.
The accounting policy for the recognition of technology licence fees is based
upon an assessment of the work required before the licence is signed and
subsequently during the design, construction and commissioning of the licensees'
plant, with an appropriate proportion of the fee recognised upon signing and the
balance recognised as the project progresses to completion.
Similarly, when an "up front" non refundable agency premium is received from an
agent, this is recognised upon signing of a technology licence negotiated by the
agent, pro rata to the capacity signed and the capacity under the agency
agreement. Where a negotiated licensee signs a licence option agreement in
advance of the technology licence, an assessment of the work completed is
undertaken to determine the proportion of the agency premium that may be
recognised in respect of such licence options. Currently, the proportion of the
agency premium assessed as recognisable upon signing a licence option is up to
20 per cent.
Interest income
Interest accrues using the effective interest method, i.e. the rate that
discounts estimated future cash receipts through the expected life of the
financial instrument to the net carrying amount of the financial asset.
Finance expense
Finance expense represents the costs associated with the issue of warrants,
calculated using a Black-Scholes model. Costs are charged to the profit and loss
account in the period that the obligation to issue the warrants becomes binding.
Share based payments
The Company awards share options to certain directors and employees to acquire
shares of the Company. The fair value of options granted is recognised as an
employee expense with a corresponding increase in equity. The fair value is
measured at grant date and is charged to the income statement over the vesting
period during which the employees become unconditionally entitled to the
options.
The fair value of the options granted is measured using a modified Black Scholes
model, taking into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share options that vest only where vesting is dependent upon the
satisfaction of service and non-market vesting conditions.
Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting period is based on
the number of options which eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative expense is
not adjusted for failure to achieve a market vesting condition.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity
dividends are recognised when paid. Final equity dividends are recognised when
approved by the shareholders at an annual general meeting.
Pensions
The Group contributes to certain defined contribution pension and employee
benefit schemes on behalf of its employees. These costs are charged to the
income statement on an accruals basis.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date
together with any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided
for:-
* the initial recognition of goodwill,
* the initial recognition of assets or liabilities that affect neither accounting
nor taxable profit other than in a business combination, and
* differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the balance sheet date.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
Foreign currency translation
The consolidated financial statements are presented in Euro, which is also the
functional currency of all group companies. Transactions in foreign currencies
are initially recorded in the functional currency rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the functional currency rate of exchange ruling at the
balance sheet date. All differences are taken to the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When
the grant relates to an expense item, it is recognised as income over the period
necessary to match the grant on a systematic basis to the costs that it is
intended to compensate. Where the grant relates to an asset, the fair value is
credited to a deferred income account and is released to the income statement
over the expected useful life of the relevant asset by equal annual instalments.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is the
difference between the fair value of the consideration paid and the fair value
of the identifiable assets and liabilities acquired. It is capitalised, and is
subject to annual impairment reviews by the directors. Any impairment arising is
charged to the income statement.
Intangible assets
Intellectual property rights, including patents, which cover a portfolio of
novel chemical processes and products, are shown in the financial statements at
cost less any amounts by which the carrying value is assessed during an annual
review to have been impaired. At present, the useful economic life of the
intellectual property is considered to be 20 years.
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation and any
impairment charged. Depreciation is provided at rates calculated to write off
the cost less estimated residual value of each asset, except freehold land, over
its expected useful life on a straight line basis, as follows:
Property, plant and equipment - These assets comprise pilot plants and
production facilities. These facilities are depreciated from the
date they become available for use
at rates applicable to the asset lives expected for each class of
asset, with rates between 5% and
20%.
Office equipment - Between 20% and 50%.
Impairment
The carrying amount of the non-current assets of the Group is compared to the
recoverable amount of the assets whenever events or changes in circumstances
indicate that the net book value may not be recoverable. The recoverable amount
is the higher of value in use and the fair value less cost to sell. In assessing
the value in use, the expected future cash flows from the assets are determined
by applying a discount rate to the anticipated pre-tax future cash flows. An
impairment is recognised in the income statement to the extent that the carrying
amount exceeds the assets' recoverable amount. The revised carrying amounts are
amortised in line with Group accounting policies. A previously recognised
impairment loss, other than on goodwill, is reversed if the recoverable amount
increases as a result of a reversal of the conditions that originally resulted
in the impairment. This reversal is recognised in the income statement and is
limited to the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised in prior years. Assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units) for purposes of assessing impairment. The
estimates of future discounted cash flows are subject to risks and
uncertainties. It is therefore reasonably possible that changes could occur
which may affect the recoverability of assets.
Leases
Operating lease payments are recognised as an expense in the income statement on
a straight-line basis over the lease term.
Inventories
Raw materials, which consist of unprocessed timber, chemicals and various
materials used in manufacturing operations are valued at the lower of cost and
net realisable value. The basis on which cost is derived is a first-in,
first-out basis.
Finished goods, comprising processed timber, are stated at the lower of weighted
average cost of production or net realisable value. Costs include direct
materials, direct labour costs and production overheads (including the
depreciation/depletion of relevant property and plant and equipment) absorbed at
an appropriate level of capacity utilisation. Net realisable value represents
the estimated selling price less all expected costs to completion and costs to
be incurred in selling and distribution.
Financial assets
Financial assets are classified as available for sale investments and loans and
receivables, depending on the purpose for which the asset was acquired. When
financial assets are recognised initially, they are measured at fair value plus,
in the case of investments not at fair value through profit or loss, directly
attributable transaction costs.
Unlisted shares held by the group are classified as available for sale
investments and are stated at fair value. Gains and losses arising from changes
in fair value are recognised directly in equity in the investment revaluation
reserve, with the exception of impairment losses which are recognised directly
in profit or loss. Where investment is disposed of or is determined to be
impaired, the cumulative gain or loss previously recognised in the investment
revaluation reserve is included in profit or loss in the year.
Loans and receivables, which comprise non-derivative financial assets with fixed
and determinable payments that are not quoted on an active market are initially
recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment.
Trade and other receivables
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. They arise principally from
the provision of goods and services to customers.
Trade receivables are initially recognised at fair value less an allowance for
any uncollectible amounts. A provision for impairment is made when there is
objective evidence that the group will not be able to collect debts. Bad debts
are written off when identified.
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand
and short-term deposits with an original maturity of three months or less. For
the purpose of the consolidated cash flow statement, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
Financial liabilities
Other financial liabilities
Trade payables are initially recognised at fair value and subsequently carried
at amortised cost using the effective interest method.
Share capital
Financial instruments issued by the group are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
group's shares are classified as equity instruments.
Accounting estimates and judgments
In preparing the Consolidated Financial Statements, management has to make
judgments on how to apply the Group's accounting policies and make estimates
about the future. The critical judgments that have been made in arriving at the
amounts recognised in the Consolidated Financial Statements and the key sources
of estimation and uncertainty that have a significant risk of causing a material
adjustment to the carrying value of assets and liabilities in the next financial
year are discussed below:
Revenue recognition
The Group has considered the criteria for the recognition of licence fee income
over the period of the agreement and is satisfied that the recognition of such
revenue in the current year is appropriate. The recognition of technology
licence fees is based upon an assessment of the work required before the licence
is signed and subsequently during the construction and commissioning of the
licensees' plant, with an appropriate proportion of the fee recognised upon
signing and the balance recognised as the project progresses to completion. The
Group also considers the recoverability of amounts before recognising them as
income.
Goodwill
The Group tests annually whether goodwill has suffered any impairment in
accordance with the accounting policy stated above. The recoverable amounts of
cash-generating units have been determined based on value in use calculations.
These calculations require the use of judgments in relation to discount rates
and future forecasts. There is such significant headroom in the value in use
calculations that only a significant change in estimates would result in the
value of goodwill being impaired. This is not considered likely.
Intellectual property rights and property, plant and equipment
The Group tests the carrying amount of the intellectual property rights and
property, plant and equipment whenever events or changes in circumstances
indicate that the net book value may not be recoverable. These calculations
require the use of estimates in respect of future cashflows from the assets by
applying a discount rate to the anticipated pre-tax future cashflows. The Group
also reviews the estimated useful lives at the end of each annual reporting
period. There is such significant headroom in the value in use calculations that
only a significant change in estimates would result in the value of other
intangibles and property, plant and equipment being impaired. This is not
considered likely.
Inventories
The Group reviews the net realisable value of, and demand for, its inventory on
a monthly basis to provide assurance that recorded inventory is stated at the
lower of cost and net realisable value.
New standards and interpretations in issue but not yet effective at the date
of authorisation of these financial statements:
* IAS 1 - Amendments to presentation of financial statements (effective for
periods beginning on or after 1 January 2009).
* IAS 23 - Amendments to borrowing costs (effective for periods beginning on or
after 1 January 2009).
* IAS 27 - Amendments to consolidated and separate financial statements (effective
for periods beginning on or after 1 July 2009).
* IAS 32 - Amendments to financial instruments: Presentation (effective for
periods beginning on or after 1 January 2009).
* IAS 32 and IAS 1 - Amendments to puttable financial instruments and obligations
arising on liquidation (effective for periods beginning on or after 1 January
2009).
* IFRS 1 and IAS 27 - Amendments to cost of an investment in a subsidiary, jointly
controlled entity or associate (effective for periods beginning on or after 1
January 2009).
* IFRS 1 revised - First time application of International Financial Reporting
Standards (effective for periods beginning on or after 1 January 2009).
* IFRS 2 - Amendments to share based payments: vesting conditions and
cancellations (effective for periods beginning on or after 1 January 2009).
* IFRS 3 - Business combinations: Revised (effective for periods beginning on or
after 1 July 2009).
* IFRS 7 - Improving disclosures about financial instruments (effective for
periods beginning on or after 1 January 2009).
* IFRIC 9 and IAS 1 - Amendments to embedded derivatives (effective for periods
ending on or after 30 June 2009).
* IFRIC 13 - Customer loyalty programmes (effective for periods beginning on or
after 1 July 2008).
* IFRIC 15 - Agreements for the construction of real estate (effective for periods
beginning on or after 1 January 2009).
* IFRIC 16 - Hedges of a net investment in a foreign operation (effective for
periods beginning on or after 1 October 2008).
* IFRIC 17 - Distributions of non-cash assets to owners (effective for periods
beginning on or after 1 July 2009).
* IFRIC 18 - Transfer of assets from customers (effective for transfers of assets
from customers received on or after 1 July 2009).
* Improvements to IFRS's (2009) (effective for periods beginning on or after 1
January 2009).
* Improvements to IFRS's (2010) (effective for accounting periods beginning on or
after 1 January 2010 generally).
* Group cash-settled share based payment transactions (Amendments to IFRS 2)
(effective for periods beginning on or after 1 January 2010)
Entities in EU Member States can only apply IFRSs or IFRICs that have been
endorsed by the European Union. Of the standards and interpretations listed
above parts of IAS 39, IFRS 2, IFRIC 9, IFRIC 12, IFRIC 14, IFRIC 15, IFRIC 7,
IFRIC 18, Improvements to IFRS's (2010), and Improved Disclosures About
Financial Instruments had not yet been endorsed by the European Union at the
date these financial statements were authorised for issue. They are expected to
be endorsed during 2009.
The Directors anticipate that the adoption of these standards and
interpretations in future periods will have no material impact on the financial
statements of the group.
2. Segmental reporting
The Group's business is the development, commercialisation and licensing of
proprietary technology for the manufacture of Accoya wood and related
acetylation technologies. Segmental reporting is divided between licensing
activities and the manufacturing and research and development
activities. Revenue is allocated between licence fees and the product
manufactured at the Group's Arnhem facility. All costs of sales are allocated
against the manufacturing activities in Arnhem unless they can be directly
attributable to a licensee. Administrative expenses incurred in the Netherlands
are attributed to the manufacturing segment, with all other administrative costs
allocated to licensing. Assets and liabilities cannot be readily allocated to
the 2 segments and therefore no additional segmental information has been
disclosed. Other income relates to licence fees. The Group has chosen to adopt
IFRS 8 'Operating Segments' early.
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | Licence fees | | Manufacturing | | Total |
+---------+-------------+--------------------------+--+-------------------------+--+--------------------------+
| | | 2009 | | 2008 | | 2009 | | 2008 | | 2009 | | 2008 |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | EUR'000 | | EUR'000 | | EUR'000 | | EUR'000 | | EUR'000 | | EUR'000 |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Revenue | | 22,705 | | 23,118 | | 8,486 | | 4,210 | | 31,191 | | 27,328 |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Cost of sales | (6,092) | | (2,500) | | (14,117) | | (9,261) | | (20,209) | | (11,761) |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Gross profit | 16,613 | | 20,618 | | (5,631) | | (5,051) | | 10,982 | | 15,567 |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Administrative | (11,515) | | (7,793) | | (6,777) | | (3,657) | | (18,292) | | (11,450) |
| expenses | | | | | | | | | | | |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Other income | 8,290 | | - | | - | | - | | 8,290 | | - |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Profit from | 13,388 | | 12,825 | | (12,408) | | (8,708) | | 980 | | 4,117 |
| operations | | | | | | | | | | | |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Finance income | | | | | | | | | 923 | | 1,328 |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Finance expense | | | | | | | | | (82) | | - |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| Profit before | | | | | | | | | 1,821 | | 5,445 |
| taxation | | | | | | | | | | | |
+-----------------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
| | | | | | | | | | | | | |
+---------+-------------+-----------+--+-----------+--+-----------+--+----------+--+-----------+--+-----------+
The segmental assets in the current year and the previous year were
predominantly held in Europe. Additions to property, plant, equipment and
intangible assets in the current year and the previous year were predominantly
incurred in Europe.
3. Employees
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Staff costs (including | | | | | | | | |
| directors) consist of: | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Wages and salaries | | | | | | | 6,793 | | 4,195 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Social security | | | | | | | 627 | | 916 |
| costs | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Other pension costs | | | | | | | 354 | | 206 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Share based payments | | | | | | | 804 | | 1,137 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 8,578 | | 6,454 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| The average number of employees, including executive | | | | |
| directors, during | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| the year was as | | | | | | | Number | | Number |
| follows: | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Administration | | | | | | | 75 | | 29 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Operating | | | | | | | 37 | | 29 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 112 | | 58 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
4. Directors' remuneration
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Directors' remuneration | | | | | | | | |
| consists of: | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Directors' | | | | | | | 587 | | 1,113 |
| emoluments | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Gains on exercise of share | | | | | | - | | 1,736 |
| options | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Company contributions to money purchase | | | 35 | | 62 |
| pension schemes | | | | | |
+----------------------------------------------+--------+--+----------+--+----------+
| Amounts paid to third parties in respect of | | | 341 | | 712 |
| directors' services | | | | | |
+----------------------------------------------+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 963 | | 3,623 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Emoluments disclosed above include the following amounts paid to the | |
| highest paid director: | |
+------------------------------------------------------------------------+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Emoluments for qualifying | | | | | | 345 | | 65 |
| services | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Gains on exercise of share | | | | | | - | | 1,736 |
| options | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Company contributions to money purchase | | | - | | 5 |
| pension schemes | | | | | |
+----------------------------------------------+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| The group makes contributions to 3 (2008: 3) directors' personal | | |
| pension plans. | | |
+---------------------------------------------------------------------+--+----------+
| Out of the share based payments charge (note 11) EUR476,000 (2008: EUR570,000) |
| relates to the directors. |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
5. Other income
Other income of EUR8,290,000 (2008: EURNil) represents the profit generated from
the early settlement of a licensing agency agreement during the year.
6. Profit from operations
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| This has been arrived at | | | | | | | | |
| after charging: | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Staff costs | | | | | | | 8,578 | | 6,454 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Depreciation of property, plant and | | | | 1,572 | | 1,447 |
| equipment | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+----------+
| Amortisation of intangible | | | | | | 264 | | 264 |
| assets | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Operating lease | | | | | | | 382 | | 327 |
| rentals | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Fees payable to the company's auditors for the audit | | | | |
| of the company's | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| annual accounts | | | | | | | 54 | | 53 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Fees payable to the company's auditors and its | | | | |
| associates for other | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| services: | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| - audit of the company's | | | | | | 84 | | 65 |
| subsidiaries | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| - other services pursuant to | | | | | | 148 | | - |
| legislation | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| - tax services | | | | | | | 105 | | 1 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Euronext Amsterdam listing | | | | | | - | | 1,252 |
| expenses | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Foreign exchange | | | | | | | 99 | | 72 |
| costs | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Research & | | | | | | | 584 | | 693 |
| Development | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
7. Finance income
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Interest receivable on bank and other | | | | 923 | | 1,328 |
| deposits | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
8. Finance Expense
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Warrants issue costs | | | | | | | 82 | | - |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
9. Tax expense
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| (a) Tax recognised in the income | | | | | | |
| statement comprises: | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Current tax expense | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| UK Corporation tax on profits | | | | | | - | | 1,364 |
| for the year | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+-----------+
| Over provision in respect of | | | | | | (1,045) | | - |
| prior years | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | (1,045) | | 1,364 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Overseas tax at rate | | | | | | | 67 | | - |
| of 34% | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Deferred Tax Credit | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Recognition of deferred tax asset on trading losses - | | (2,630) | | - |
| prior year | | | | |
+-------------------------------------------------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Total tax (credit)/expense reported in the income | | (3,608) | | 1,364 |
| statement | | | | |
+-------------------------------------------------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| (b) The tax charge for the period is lower than the | | | | |
| standard rate of | | | | |
+-------------------------------------------------------+--+----------+--+-----------+
| corporation tax in the UK (2009: 28%, 2008: | | | | | |
| 30%) due to: | | | | | |
+----------------------------------------------+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Profit before tax | | | | | | | 1,821 | | 5,445 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Expected tax charge at 28% (2008 - 30%) | | | | 510 | | 1,634 |
+-------------------------------------------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Expenses not deductible for | | | | | | 336 | | 820 |
| tax purposes | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+-----------+
| Relief for gain on employee | | | | | | - | | (1,358) |
| share options | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+-----------+
| Overseas Taxation | | | | | | | 67 | | - |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Over provision in respect of | | | | | | (1,045) | | - |
| prior years | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+-----------+
| Increase in tax losses in | | | | | - | | 2,226 |
| overseas subsidiaries | | | | | | | |
+----------------------------------+--------+--+--------+--+----------+--+-----------+
| Recognition of deferred tax asset on | | | | (2,630) | | - |
| trading losses | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+-----------+
| Utilisation of previously unrecognised | | | (846) | | (1,965) |
| losses at local tax rate | | | | | |
+----------------------------------------------+--------+--+----------+--+-----------+
| Other differences | | | | | | | - | | 7 |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
| Total tax (credit)/expense reported in the income | | (3,608) | | 1,364 |
| statement | | | | |
+-------------------------------------------------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+-----------+
10. Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax
and the weighted average number of ordinary shares in issue during the year.
To calculate the diluted earnings per share, the weighted average number of
ordinary shares is adjusted to assume conversion of all potentially dilutive
ordinary shares. Potential dilutive ordinary shares comprise share options
granted to employees and warrants.
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Basic earnings per share | | | | | | 2009 | | 2008 |
+--------------------------------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Weighted average number of Ordinary shares in | | | 155,463 | | 151,112 |
| issue ('000) | | | | | |
+------------------------------------------------+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Earnings for the | | | | | | | 5,429 | | 4,081 |
| year (EUR'000) | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Basic earnings per | | | | | | | EUR 0.03 | | EUR0.03 |
| share | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Diluted earnings per share | | | | | | 2009 | | 2008 |
+--------------------------------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Weighted average number of Ordinary shares in | | | 157,505 | | 155,070 |
| issue ('000) | | | | | |
+------------------------------------------------+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Earnings for the | | | | | | | 5,429 | | 4,081 |
| year (EUR'000) | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| Diluted earnings per | | | | | | | EUR 0.03 | | EUR0.03 |
| share | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
| | | | | | | | | | |
+----------------------+---------+--+---------+--+--------+--+------------+--+------------+
The earnings used in the calculation of diluted earnings per share are the same
as those for the equivalent basic earnings per share calculation.
The weighted average number of ordinary shares for the purposes of diluted
earnings per share reconciles to the weighted average number of ordinary shares
used in the calculation of basic earnings per share are as follows:
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| | | | | | | | 2009 | | 2008 |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| Weighted average number of ordinary shares used in the | | 155,463 | | 51,112 |
| calculation of | | | | |
+------------------------------------------------------------+----------------------+------------+--+------------+
| basic earnings per | | | | | | | | | |
| share | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| Share options and | | | | | | | 2,042 | | 3,958 |
| warrants | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
| Weighted average number of ordinary shares used in the | | | | |
| calculation of | | | | |
+ +----------------------+------------+--+------------+
| | | | | |
+------------------------------------------------------------+----------------------+------------+--+------------+
| diluted earnings per share | | | | | | 157,505 | | 155,070 |
+---------------------------------+--+----------+--+---------+----------------------+------------+--+------------+
| | | | | | | | | | |
+----------------------+----------+--+----------+--+---------+----------------------+------------+--+------------+
11. Dividends Paid
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Final Dividend of EUR0.01 (2008: EURNIL) per ordinary | | | | |
| share proposed | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| and paid during year relating to the | | | | 1,553 | | - |
| previous year's results | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
12. Share based payments
Options granted on 1 March 2005 at an exercise price of EUR0.46 per Ordinary share
fully vested during the year. These options may be exercised until 30 March
2015. At 31 March 2009, 2,184,000 of these options were outstanding.
Options granted on 14 June 2006 at an exercise price of EUR1.20 per Ordinary share
vested immediately but are not exercisable before 14 June 2009. These options
may be exercised until 14 June 2016. At 31 March 2009, 431,000 of these options
were outstanding.
Options granted on 28 March 2007 at an exercise price of EUR2.59 per Ordinary
share vest to one third of the options granted upon achievement of each of the
following:
* Cumulative EUR5 million licence income recognised under group accounting policies
* Cumulative EUR20 million revenue from sales of Accoya
* Announcement of annual group distributable earnings exceeding EUR5 million
Once vested, these options may be exercised until 31 March 2017. At 31 March
2009, 5,057,000 of these options were outstanding.
Options granted on 15 May 2007 at an exercise price of EUR3.84 per ordinary share
vest to one third of the options granted upon achievement of each of the
following:
* Cumulative EUR5 million licence income recognised under group accounting policies
* Cumulative EUR20 million revenue from sales of Accoya
* Announcement of annual group distributable earnings exceeding EUR5 million
Once vested, these options may be exercised until 15 May 2017. At 31 March
2009, 1,000,000 of these options were outstanding.
Options granted on 11 October 2007 at an exercise price of EUR3.80 per ordinary
share vest to one third of the options granted upon achievement of each of the
following:
* Cumulative EUR15 million revenue from sales of Accoya
* Announcement of annual group distributable earnings exceeding EUR15 million
* Cumulative EUR75 million gross licence revenue recognised under group accounting
policies
Once vested these options may be exercised until 11 October 2017. At 31 March
2009, 1,000,000 of these options were outstanding.
Options granted on 20 November 2007 at an exercise price of EUR3.65 per ordinary
share vest to one third of the options granted upon achievement of each of the
following:
* Annual Accoya production exceeds 23,000m3 in a financial year
* Annual Accoya sales revenue exceeds EUR26 million in financial year
* The second pair of reactor in the wood modification plant are processing more
than 25 batches per month
Once vested these options may be exercised until 20 November 2017. At 31 March
2009, 376,000 of these options were outstanding.
Options granted on 18 June 2008 at an exercise price of EUR2.80 per ordinary share
vest to one third of the options granted upon achievement of each of the
following:
* Announcement of audited Annual Accoya sales revenue exceeds EUR20 million in
financial year
* Announcement of audited annual group distributable earnings exceeding EUR15
million
* Announcement of audited Cumulative EUR75 million gross licence revenue recognised
under group accounting policies
Once vested these options may be exercised until 18 June 2018. At 31 March 2009,
305,000 of these options were outstanding.
Options granted on 8 December 2008 at an exercise price of EUR1.38 per ordinary
share vest to one third of the options granted upon achievement of each of the
following:
* Announcement of audited Annual Accoya sales revenue exceeds EUR20 million in
financial year
* Announcement of audited annual group distributable earnings exceeding EUR15
million
* Announcement of audited Cumulative EUR75 million gross licence revenue recognised
under group accounting policies
Once vested these options may be exercised until 8 December 2018. At 31 March
2009, 1,383,000 of these options were outstanding.
Unless discretion is exercised by the Nomination & Remuneration Committee, all
options are forfeit following an optionholder's termination of contract.
Outstanding options granted under the share option scheme are as follows:
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| | Number of outstanding | | Weighted average remaining | | |
+------------------+----------------------------------------+--+-----------------------------------+--+-----------+
| | options at 31 March | | contractual life, in years | | Option |
+------------------+----------------------------------------+--+-----------------------------------+--+-----------+
| Date of grant | 2009 | | 2008 | | 2009 | | 2008 | | price |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| | | | | | | | | | |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 1 March 2005 | 2,184,000 | | 2,438,640 | | 5.9 | | 6.9 | | EUR 0.46 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 14 June 2006 | 431,000 | | 438,500 | | 7.2 | | 8.2 | | EUR 1.20 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 28 March 2007 | 5,057,000 | | 5,072,000 | | 8.0 | | 9.0 | | EUR 2.59 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 15 May 2007 | 1,000,000 | | 1,250,000 | | 8.1 | | 9.1 | | EUR 3.84 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 11 October 2007 | 1,000,000 | | 1,000,000 | | 8.5 | | 9.5 | | EUR 3.80 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 20 November 2007 | 376,000 | | 376,000 | | 8.6 | | 9.6 | | EUR 3.65 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 18 June 2008 | 305,000 | | - | | 9.3 | | - | | EUR 2.80 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
| 8 December 2008 | 1,383,000 | | - | | 9.7 | | - | | EUR 1.38 |
+------------------+--------------+----------+--------------+--+--------+----------+---------------+--+-----------+
Movements in the weighted average values are as follows:
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | 2009 | | 2009 | | 2008 | | 2008 |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | |Weighted | | | | Weighted | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | average | | | | average | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | |exercise | | | | exercise | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | price | | Number | | price | | Number |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| Outstanding at 1 | | | EUR 2.34 | | 10,575,140 | | EUR 1.62 | | 9,660,500 |
| April | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| Granted during | | | EUR 1.64 | | 1,688,000 | | EUR 3.79 | | 2,626,000 |
| the year | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| Exercised during the year | | EUR 0.46 | | (254,640) | | EUR 0.46 | | (1,574,160) |
+------------------------------+--+----------+--+---------------+--+-----------+--+---------------+
| Expired during | | | EUR 2.55 | | (272,500) | | EUR 0.78 | | (137,200) |
| the year | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
| Outstanding at 31 March | | EUR 2.27 | | 11,736,000 | | EUR 2.34 | | 10,575,140 |
| | | | | | | | | |
+------------------------------+--+----------+--+---------------+--+-----------+--+---------------+
| | | | | | | | | | |
+------------------+-----------+--+----------+--+---------------+--+-----------+--+---------------+
The exercise price of options outstanding at the end of the year ranged between
EUR0.46 and EUR3.84 (2008: EUR0.46 and EUR3.84) and their weighted average contractual
life was 7.9 years (2008: 8.6 years).
Of the total number of options outstanding at the year end, 4,203,000 (2008:
4,545,973) had vested and were exercisable at the end of the year.
The weighted average share price (at the date of exercise) of options exercised
during the year was EUR2.20 (2008: EUR3.84).
The weighted average fair value of each option granted during the year was EUR0.42
(2008: EUR0.45).
The fair value of executive share options granted during the year is calculated
based on a modified Black-Scholes model assuming inputs shown below:
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Grant date | 08-Dec-08 | | 18-Jun-08 | | 20 Nov 07 | | 10 Oct 07 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Share price at | EUR 1.38 | | EUR 2.80 | | EUR 3.65 | | EUR 3.80 |
| grant date | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Exercise price | EUR 1.38 | | EUR 2.80 | | EUR 3.65 | | EUR 3.80 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected life | 3 | | 3 | | 3 | | 3 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Contractual life | 10 | | 10 | | 10 | | 10 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Risk free rate | 2.50% | | 5.00% | | 4.68% | | 5.11% |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected | 38% | | 30% | | 28% | | 15% |
| volatility | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected | 1.3% | | 1.3% | | 1.3% | | 1.3% |
| dividend yield | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Fair value of | EUR 0.361 | | EUR 0.679 | | EUR 0.427 | | EUR 0.467 |
| option | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Grant date | 15 May 07 | | 28 Mar | | 14 Jun 06 | | 1 Mar 05 |
| | | | 07 | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Share price at | EUR 3.84 | | EUR 2.59 | | EUR 1.20 | | EUR 0.46 |
| grant date | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Exercise price | EUR 3.84 | | EUR 2.59 | | EUR 1.20 | | EUR 0.46 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected life | 3 | | 3 | | 3 | | 3 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Contractual life | 10 | | 10 | | 10 | | 10 |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Risk free rate | 5.40% | | 4.92% | | 4.63% | | 4.37% |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected | 15% | | 15% | | 15% | | 15% |
| volatility | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Expected | 1.3% | | 0.0% | | 0.0% | | 0.0% |
| dividend yield | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
| Fair value of | EUR 0.454 | | EUR 0.290 | | EUR 0.098 | | EUR 0.036 |
| option | | | | | | | |
+------------------+-----------+--+-----------+--+-----------+--+-----------+
Volatility has been estimated by reference to the historic volatility since
October 2005 when the Company's shares were listed on AIM. The resulting fair
value is expensed over the vesting period of the options on the assumption that
a proportion of options will lapse over the service period as employees leave
the Group.
13. Intangible assets
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | |Intellectual | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | property | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | rights | |Goodwill | | Total |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | EUR'000 | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Cost | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2007 | | | | | 73,200 | | 4,231 | | 77,431 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Additions | | | | | - | | - | | - |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2008 | | | | | 73,200 | | 4,231 | | 77,431 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Movements | | | | | - | | - | | - |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2009 | | | | | 73,200 | | 4,231 | | 77,431 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Amortisation | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2007 | | | | | 69,051 | | - | | 69,051 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Amortisation | | | | | 264 | | - | | 264 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2008 | | | | | 69,315 | | - | | 69,315 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Amortisation | | | | | 264 | | - | | 264 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2009 | | | | | 69,579 | | - | | 69,579 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| Net book value | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2009 | | | | | 3,621 | | 4,231 | | 7,852 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| At 31 March 2008 | | | | | 3,885 | | 4,231 | | 8,116 |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------------+--+----------+--+-----------+
The carrying value of intellectual property rights and goodwill on consolidation
have been allocated for impairment testing purposes to one cash generating unit
being the Group's licensing operations. The recoverable amount of intellectual
property rights and goodwill relating to this operation is determined based on a
value in use calculation which uses cashflow projections based on financial
budgets approved by management covering a three year period and a post tax
discount rate of 10% per annum. The key assumption used in the value in use
calculations are the level of future licence fees estimated by management over
the budget period. These have been based on past experience and expected future
revenues based on contracted amounts.
14. Property, plant and equipment
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | |Freehold | | Plant | | Office | | |
| | | | | | and | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | land | | machinery | |equipment | | Total |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | EUR'000 | | EUR'000 | | EUR'000 | | EUR'000 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Cost or valuation | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2007 | | | 1,279 | | 28,130 | | 153 | | 29,562 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Additions | | | 5,486 | | 1,411 | | 108 | | 7,005 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2008 | | | 6,765 | | 29,541 | | 261 | | 36,567 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Additions | | | 50 | | 2,441 | | 115 | | 2,606 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Disposals | | | - | | (7,274) | | (3) | | (7,277) |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2009 | | | 6,815 | | 24,708 | | 373 | | 31,896 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Depreciation | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2007 | | | - | | 7,886 | | 65 | | 7,951 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Charge for the year | | | - | | 1,359 | | 88 | | 1,447 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2008 | | | - | | 9,245 | | 153 | | 9,398 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Charge for the year | | | - | | 1,455 | | 117 | | 1,572 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Disposals | | | - | | (7,086) | | (1) | | (7,087) |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2009 | | | - | | 3,614 | | 269 | | 3,883 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| Net book value | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2009 | | | 6,815 | | 21,093 | | 104 | | 28,013 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| At 31 March 2008 | | | 6,765 | | 20,296 | | 108 | | 27,169 |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
| | | | | | | | | | |
+----------------------+--------+--+----------+--+------------+--+-----------+--+------------+
15. Other financial assets
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Available for sale investments carried at | | | | 6,000 | | 6,000 |
| fair value | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
On 11 December 2007, Accsys Technologies PLC purchased 133,334 unlisted ordinary
shares in Diamond Wood China Limited for EUR45 each.
During the year a share split took place resulting in the Company's holding
changing to 13,333,400 Ordinary shares at EUR0.45 each.
There is no active market in respect of the unlisted shares, therefore the fair
value of unlisted shares is based on recent arm's length market transactions
between knowledgeable and willing parties.
16. Deferred Taxation
The Group has a deferred tax asset of EUR2,630,000 (2008: EURNil) relating to
trading losses brought forward.
The Group also has an unrecognised deferred tax asset of EUR3,199,000 (2008:
EUR8,460,000) which is largely in respect of trading losses in overseas
subsidiaries.
17. Subsidiaries
A list of subsidiary investments, including the name, country of
incorporation and proportion of ownership interest is given in note 4 to the
company's separate financial statements.
18. Inventories
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Materials and work in | | | | | | 1,341 | | 2,399 |
| progress | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Finished goods | | | | | | | 3,547 | | 2,533 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 4,888 | | 4,932 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
The amount of inventories recognised as an expense during the year was
EUR6,242,000 (2008: EUR3,413,000). The cost of inventories recognised as an expense
includes EUR976,000 (2008: EUR207,000) in respect of write down of inventories to
net realisable value.
19. Trade and other receivables
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Trade receivables - | | | | | | | 15,283 | | 4,448 |
| short term | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Trade receivables - | | | | | | | 6,400 | | - |
| long term | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Other receivables | | | | | | | 344 | | 147 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Prepayments | | | | | | | 16,108 | | 505 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Accrued income | | | | | | | 10,450 | | - |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | 48,585 | | 5,100 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
All trade and other receivables are short-term debt with the exception of EUR6.4m
of trade receivables. These relate to the licence for the plant being developed
in China for Diamond Wood for which some payments are not scheduled to be paid
in the next 12 months.
The difference between the carrying value and fair value of all receivables is
not considered to be material. All trade and other receivables have been
reviewed for indicators of impairment but no provision is considered necessary.
The age of receivables past due but not impaired is as follows:
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Up to 30 days | | | | | | | 1,419 | | 240 |
| overdue | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Over 30 days and up to 60 | | | | | | 1,131 | | 177 |
| days overdue | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Over 60 days and up to 90 | | | | | | 369 | | 72 |
| days overdue | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| Over 90 days overdue | | | | | | | 766 | | 2 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 3,685 | | 491 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
20. Trade and other payables
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Trade payables | | | | | | | 3,060 | | 1,980 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Other taxes and social | | | | | | 206 | | 163 |
| security payable | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+-----------+--+----------+
| Other Creditors | | | | | | | 5,000 | | 5,260 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| Accruals and | | | | | | | 14,738 | | 1,328 |
| deferred income | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | 23,004 | | 8,731 |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+-----------+--+----------+
21. Share capital
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Authorised | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Equity share capital | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| 250,000,000 (2008: 200,000,000) ordinary shares of | | 2,500 | | 2,000 |
| EUR0.01 each | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| 1,000,000 deferred shares of | | | | | | 148 | | 148 |
| 10p each | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2,648 | | 2,148 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Allotted | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Equity share capital | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| 155,590,302 (2008: 155,335,662) ordinary shares of | | 1,556 | | 1,553 |
| EUR0.01 each | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| 1,000,000 deferred shares of | | | | | | - | | 148 |
| 10p each | | | | | | | | |
+-------------------------------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 1,556 | | 1,701 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
The deferred shares were bought back by the company on 30 September 2009 for
0.1p per share.
Options over 254,640 ordinary shares were exercised during the year at a price
of EUR0.46 each. Details of outstanding options granted over ordinary shares in
the Company are set out in Note 12.
As a condition of the equity line of credit agreement with GEM Global Equity
Yield Fund Limited, the company has issued 3,120,000 warrants. The warrants are
exercisable for a period of three years from the issue date at an exercise price
of EUR1.00 each.
22. Commitments under operating leases
The Group leases land and buildings under non-cancellable operating lease
agreements. The total future value of the minimum lease payments that are due
is as follows:
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Operating lease | | | | | | | | | |
| payments | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Within one year | | | | | | | 358 | | 315 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Greater than one | | | | | | | - | | 315 |
| year | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 358 | | 630 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
23. Financial instruments
Equity line of credit and warrants
The company secured an equity line of credit for up to EUR20m, with GEM Global
Equity Yield Fund Limited, on 31 March 2009. This is a three year agreement,
which allows the Company to issue shares at a price per share which represents a
10% discount to the average closing price over a 15 day period prior to the draw
down. Each draw down is based on the share price over a 15 day period, with GEM
having the option to subscribe for between 50% and 200% of the number of shares
requested by the company. The Company controls the timing of any draw down under
this credit line and is not obliged to draw on the equity line.
The company also issued 3,120,000 warrants, and the warrants will be exercisable
for a period of three years from the issue date at an exercise price of EUR1.00
each.
On 30 June 2009, the Company completed the first drawdown under the equity line
of credit, with the issue of 700,000 Ordinary shares at EUR0.753 per share,
raising EUR527,100.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able
to continue as a going concern while maximising the return to shareholders.
The capital structure of the Group consists of cash and cash equivalents and
equity attributable to equity holders of the parent, comprising share capital,
reserves and retained earnings.
The Board reviews the capital structure on a regular basis. As part of that
review, the Board considers the cost of capital and the risks associated with
each class of capital. Based on the review, the Group will balance its overall
capital structure through new share issues and the raising of debt if required.
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Categories of financial instruments | | | | | | 2009 | | 2008 |
+-----------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | EUR'000 | | EUR'000 |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Available for Sale | | | | | | | 6,000 | | 6,000 |
| investments | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Loans and receivables | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Trade receivables | | | | | | | 21,683 | | 4,448 |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Money market deposits in Euro | | | | | | 9,887 | | 39,417 |
+-----------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| Money market deposits in Sterling | | | | | | 3,240 | | - |
+-----------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| Money at call in Euro | | | | | | | 3,484 | | 6,684 |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Money at call in US | | | | | | | 450 | | 69 |
| dollars | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Money at call in Sterling | | | | | | | 442 | | 69 |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Financial liabilities | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| Trade payables | | | | | | | (3,060) | | (1,980) |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | 42,126 | | 54,707 |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+------------------------------+----------+--+--------+--+--------+--+-----------+--+-----------+
Money market deposits have interest rates fixed for less than nine months at a
weighted average rate of 0.90% (2008: 4.28%).
At the balance sheet date, the Group has financial liabilities of EUR3,060,000
(2008: EUR1,980,000) comprising trade payables.
Market risk
The Group's activities expose it primarily to the financial risks of changes in
foreign currency exchange rates and interest rates. There is also a risk
associated with the available for sale investment.
Financial risk management objectives
The Group's treasury policy is structured to ensure that adequate financial
resources are available for the development of its business whilst managing its
currency, interest rate and counterparty credit risks. The Group's treasury
strategy and policy are developed centrally and approved by the Board.
Foreign currency risk management
Currency exposures are limited as the Group's functional currency is the Euro.
A minor proportion of expenditure is incurred in US dollars and pounds
sterling.
Interest rate risk management
The Group has no borrowings therefore it is not exposed to interest rate risk in
relation to financial liabilities. Surplus funds are invested in short term
interest rate deposits to reduce exposure to changes in interest rates. The
Group does not enter into any hedging arrangements.
Credit risk management
The Group is exposed to credit risk due to its trade receivables due from
customers and cash deposits with financial institutions. The Group's exposure to
credit risk is limited to their carrying amount recognised at the balance sheet
date.
The Group ensures that sales are made to customers with an appropriate credit
history to reduce the risk where this is considered necessary. The directors
consider the trade receivables to be of good credit quality including those that
are past due (note 19). The Group is not exposed to any significant credit risk
exposure to any single counterparty or any group of counterparties with similar
characteristics.
The Group has no significant concentrations of credit risk from financial
institutions. Cash deposits are placed with a group of financial institutions
with suitable credit ratings in order to manage credit risk with any one
financial institution. The Group also has access to an equity line of credit for
up to EUR20m, provided by GEM Global Equity Yield Fund Limited.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board,
which has built an appropriate liquidity risk management framework for the
management of the Group's short, medium and long term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities by continuously monitoring forecast and
actual cash flows and matching the maturity profile of financial assets and
liabilities.
Also see note 1 which discusses the uncertainty around the timing of receipts
from Diamond Wood.
Fair value of financial instruments
In the opinion of the directors, there is no material difference between the
book value and the fair value of other financial assets and financial
liabilities.
24. Related party transactions
Mr William Paterson-Brown is a director of Khalidiya Investments SA. During the
year the Group recorded expenses from Khalidiya Investments SA consisting of
EUR340,800 (2008: EUR712,118) in respect of directors services, EUR941,516
(2008: EUR223,722) in respect of travel expenses for a number of employees, and
EUR170,220 (2008: EURNil) in respect of office and related costs in Geneva. In
addition, Mr William Paterson-Brown is a director of Zica SA. During the year
the Group recorded expenses from Zica SA of EUR377,072 (2008:EUR 247,737) in respect
of office and related costs in Geneva and Dallas.
As at 31 March 2009 the group had outstanding payables due to Khalidiya
Investments SA of EUR155,094 (2008: EUR13,724) and Zica SA of EURNil (2008: EUR29,946)
25. Post balance sheet events
On 9 April 2009, the Company subscribed for a further 8,333,334 ordinary shares
in Diamond Wood China Limited for EUR0.48 each. This takes the company's total
holding to 21,666,734 ordinary shares, which represents a holding of 15.4%.
On 30 June 2009, the Company completed the first drawdown under the equity line
of credit with Gem Global Yield Fund Limited, with the issue of 700,000 Ordinary
shares at EUR0.753 per share, raising EUR527,100.
The Company also signed an agreement with an institutional investor to issue
shares to a value of EUR4,000,000 in two equal tranches, during July 2009 and
September 2009.
Company balance sheet at 31 March 2009
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | Note | 2009 | | 2008 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | EUR'000 | | EUR'000 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Fixed asset investments | | | | | |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | Investments in subsidiaries | | 4 | 8,941 | | 8,137 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Other investments | | 5 | 6,000 | | 6,000 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | 14,941 | | 14,137 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Current assets | | | | | |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | Debtors | | 6 | 68,875 | | 39,160 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Cash at bank and in hand | | | 13,635 | | 44,766 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | 82,510 | | 83,926 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Creditors: amounts falling due | | | | | |
+-------------------------------------+--------+--------+-----------+--+-----------+
| within one year | | 7 | 3,676 | | 3,527 |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Net current assets | | | 78,834 | | 80,399 |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Net assets | | | 93,775 | | 94,536 |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Capital and reserves | | | | | |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | Share capital - Ordinary shares | | 8 | 1,556 | | 1,553 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Share capital - Deferred shares | | 8 | - | | 148 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Share premium account | | 9 | 78,191 | | 78,076 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Capital Redemption Reserve | | 9 | 148 | | - |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Warrant reserve | | 9 | 82 | | - |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | Retained earnings | | 9 | 13,798 | | 14,759 |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
| Shareholders' funds | | | 93,775 | | 94,536 |
+-------------------------------------+--------+--------+-----------+--+-----------+
| | | | | | | |
+---+---------------------------------+--------+--------+-----------+--+-----------+
The financial statements were approved by the Board and authorised for issue on
1 July 2009
Willy Paterson-Brown )
) Directors
Kevin Wood )
The notes on pages 46 to 50 form part of these financial statements.
Notes to the company financial statements for the year ended 31 March 2009
1. Accounting policies
The financial statements have been prepared under the historical cost convention
and in accordance with United Kingdom applicable accounting standards. The
following principal accounting policies have been applied:
Investments
Fixed asset investments are stated at cost less provision for permanent
diminution in value.
Share based payments
The company adopted UITF 44 in 2008. When the parent entity grants options over
equity instruments directly to the employees of a subsidiary undertaking, then
in the parent company financial statements the effect of the share based
payment, as calculated in accordance with FRS 20, is capitalised as part of the
investment in the subsidiary as a capital contribution, with a corresponding
increase in equity.
The fair value of the options granted is measured using a modified Black Scholes
model, taking into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share options that vest only where vesting is dependent upon the
satisfaction of service and non-market vesting conditions.
Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting period is based on
the number of options which eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative expense is
not adjusted for failure to achieve a market vesting condition.
Deferred taxation
Deferred taxation is provided in full in respect of taxation deferred by timing
differences between the treatment of certain items for taxation and accounting
purposes except for deferred tax assets which are only recognised to the extent
that the company anticipates making sufficient taxable profits in the future to
absorb the reversal of the underlying timing differences. Deferred tax balances
are not discounted.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity
dividends are recognised when paid. Final equity dividends are recognised when
approved by the shareholders at an annual general meeting.
Related party transactions
The company has taken advantage of the exemption available under FRS 8, "Related
Party Disclosure", not to disclose transactions between group companies on the
grounds that at least 90% of the voting rights are controlled within that group
and that company is included in the consolidated financial statements
Cashflow statement
The company has taken advantage of the exemption in FRS 1, "Cashflow Statement",
and has not produced a cashflow statement as it is a member of a group which
prepares a consolidated cashflow statement.
2. Profit and loss account
A loss of EUR210,000 (2008: loss of EUR677,000) is dealt with in the company
accounts of Accsys Technologies PLC. The Directors have taken advantage of the
exemption available under section 230 of the Companies Act 1985 and not
presented a profit and loss account for the Company above. Audit fees payable to
the Group's auditors were EUR54,000 (2008: EUR53,000) and non audit fees payable
were EUR128,000 (2008: NIL)
3. Employees
The company had no employees other than directors during the current or prior
year. Non-executive directors received emoluments in respect of their services
to the company of EUR110,000 (2008: EUR110,000). The company did not operate any
pension schemes during the current or preceding year.
4. Investment in subsidiaries
+----------------------+-------+-----------+-----+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | EUR'000 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| Cost | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| At 31 March 2008 | | | | | | | | | 12,317 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| Share based payments | | | | | | | | | 804 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| At 31 March 2009 | | | | | | | | | 13,121 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| Impairment | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| At 1 April 2008 and at 31 | | | | | | | | 4,180 |
| March 2009 | | | | | | | | |
+------------------------------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| Net book value | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| At 31 March 2009 | | | | | | | | | 8,941 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| At 31 March 2008 | | | | | | | | | 8,137 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| The following were the principal subsidiary undertakings at the end of the year and have |
| all been included |
+-------------------------------------------------------------------------------------------------+
| in the financial | | | | | | | | | |
| statements: | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | % | | % |
| | | | | | | |shares | | shares |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | Country of | | | | | & | | & |
| | | | | | | |voting | | voting |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | registration | | | | |rights | | rights |
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| Subsidiary undertakings | or | | | Class | | held | | held |
| | incorporation | | | | | | | |
+------------------------------+-----------------+-------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| International Cellulose | Gibraltar | |Ordinary | | 100 | | 100 |
| Company Limited | | | | | | | |
+------------------------------+-------------------------+--+----------+--+--------+--+-----------+
| Titan Wood | | Netherlands | |Ordinary | | 100 | | 100 |
| Technology BV | | | | | | | | |
+----------------------+-------+-------------------------+--+----------+--+--------+--+-----------+
| Titan Wood BV | | Netherlands | |Ordinary | | 100 | | 100 |
+----------------------+-------+-------------------------+--+----------+--+--------+--+-----------+
| Titan Wood Limited | | England | |Ordinary | | 100 | | 100 |
+----------------------+-------+-------------------------+--+----------+--+--------+--+-----------+
| Titan Wood Inc | | United States | |Ordinary | | 100 | | N/A |
+----------------------+-------+-------------------------+--+----------+--+--------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| The shares in Titan Wood BV and Titan Wood Inc are held indirectly by the | | |
| company. | | |
+----------------------------------------------------------------------------------+--+-----------+
| No shares were held in Titan Wood Inc in 2008 as it was only incorporated in | | |
| November 2008. | | |
+----------------------------------------------------------------------------------+--+-----------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| The principal activities of these companies were as follows: |
+-------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+----------------------+-------+-----------------+-------+--+----------+--+--------+--+-----------+
| International Cellulose | | The ownership and exploitation of patents and |
| Company Limited | | |
+------------------------------+-----------+------------------------------------------------------+
| | | | technical know how (collectively intellectual |
| | | | property |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | rights), relating to the acetylation of |
| | | | cellulose and |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | production of acetic anhydride. |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | |
+----------------------+-------+-----------+------------------------------------------------------+
| Titan Wood | | | The provision of technical and engineering |
| Technology BV | | | services to |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | licensees, and the technical development of |
| | | | fibre |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | board opportunities. |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | |
+----------------------+-------+-----------+------------------------------------------------------+
| Titan Wood BV | | | The manufacture of Accoya , acetylated wood. |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | |
+----------------------+-------+-----------+------------------------------------------------------+
| Titan Wood Inc | | | Provision of Sales, Marketing and Technical |
| | | | services. |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | |
+----------------------+-------+-----------+------------------------------------------------------+
| Titan Wood Limited | | | Establishing global market penetration of |
| | | | Accoya as |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | the premium wood for external applications |
| | | | requiring |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | durabily, stability and reliability through |
| | | | the licensing of |
+----------------------+-------+-----------+------------------------------------------------------+
| | | | the Group's proprietary process for wood |
| | | | acetylation. |
+----------------------+-------+-----------+-----+-------+--+----------+--+--------+--+-----------+
5. Other investments
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Unlisted securities | | | | | | | 6,000 | | 6,000 |
| available for resale | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
On 11 December 2007, the Company purchased 133,334 Ordinary shares in Diamond
Wood China Limited for EUR45 each. During the year a share split took place
resulting in the Company's holding changing to 13,333,400 Ordinary shares at
EUR0.45 each.
There is no active market in respect of the unlisted shares, therefore the fair
value of unlisted shares is based on recent arm's length market transactions
between knowledgeable and willing parties.
6. Debtors
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | 2009 | | 2008 |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Amounts owed by subsidiary | | | | | | 68,839 | | 38,870 |
| undertakings | | | | | | | | |
+------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| Prepayments and accrued | | | | | | | 36 | | 290 |
| income | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | 68,875 | | 39,160 |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
7. Creditors: amounts falling due within one year
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Trade creditors | | | | | | | 159 | | 19 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Amounts owed to subsidiary | | | | | | 3,448 | | 3,228 |
| undertakings | | | | | | | | |
+------------------------------------+--+--------+--+--------+--+----------+--+----------+
| Corporation tax | | | | | | | - | | 258 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Accruals and deferred | | | | | | | 69 | | 22 |
| income | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 3,676 | | 3,527 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
8. Share capital
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Authorised | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Equity share capital | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| 250,000,000 (2008: 200,000,000) ordinary | | | | 2,500 | | 2,000 |
| shares of EUR0.01 each | | | | | | |
+------------------------------------------------+--+--------+--+----------+--+----------+
| 1,000,000 deferred shares of 10p | | | | | | 148 | | 148 |
| each | | | | | | | | |
+------------------------------------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2,648 | | 2,148 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Allotted | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Equity share capital | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| 155,590,302 (2008: 155,335,662) ordinary | | | | 1,556 | | 1,553 |
| shares of EUR0.01 each | | | | | | |
+------------------------------------------------+--+--------+--+----------+--+----------+
| 1,000,000 deferred shares of 10p | | | | | | - | | 148 |
| each | | | | | | | | |
+------------------------------------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 1,556 | | 1,701 |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+----------+--+----------+
The deferred Shares were bought back by the company on 30 September 2009 for
0.1p per share.
Options over 254,640 ordinary shares were exercised during the year at a price
of EUR0.46 each. Details of outstanding options granted over ordinary shares in
the Company are set out in Note 11 of the group statements.
As a condition of the equity line of credit agreement with GEM Global Equity
Fund Limited, the company agreed to issue 3,120,000 warrants and the warrants
will be exercisable for a period of three years from the issue date at an
exercise price of EUR1.00 each.
9. Reserves
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | Capital | | | | | | Profit |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | |redemption | |Warrant | | Share | | and |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | reserve | |reserve | | premium | | loss |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | account | |account | | account | | account |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | EUR'000 | | EUR'000 | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Balance at 1 April 2008 | | | - | | - | | 78,076 | | 14,759 |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Share based payments charged to | | - | | - | | - | | 804 |
| subsidiaries | | | | | | | | |
+------------------------------------+--+------------+--+---------+--+-----------+--+-----------+
| Premium on shares issued | | | - | | - | | 115 | | - |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Buyback of deferred | | | 148 | | - | | - | | (2) |
| shares | | | | | | | | | |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Loss for the period | | | - | | - | | - | | (210) |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Dividend Paid | | | - | | - | | - | | (1,553) |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Warrants Issued | | | - | | 82 | | - | | - |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| Balance at 31 March 2009 | | | 148 | | 82 | | 78,191 | | 13,798 |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+------------+--+---------+--+-----------+--+-----------+
The profit and loss account includes EUR8,010,000 of non-distributable reserves
arising from the liquidation of Accsys Chemicals PLC in the year ended 31 March
2007. The profit and loss account also includes EUR1,941,000 of non-distributable
reserves relating to share based payments.
10. Reconciliation of movement in shareholders' funds
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | 2009 | | 2008 |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | EUR'000 | | EUR'000 |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Loss for the financial | | | | | | | (210) | | (677) |
| year | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Share based payments charged to | | | | | | 804 | | 1,137 |
| subsidiaries | | | | | | | | |
+------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| Proceeds from issue of | | | | | | | 118 | | 42,534 |
| shares | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Buyback of deferred | | | | | | | (2) | | - |
| shares | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Dividends Paid | | | | | | | (1,553) | | - |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Warrant reserve movement | | | | | | | 82 | | - |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Net increase in shareholders funds | | | | | | (761) | | 42,994 |
+------------------------------------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Opening shareholders | | | | | | | 94,536 | | 51,542 |
| funds | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| Closing shareholders | | | | | | | 93,775 | | 94,536 |
| funds | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
| | | | | | | | | | |
+---------------------------+--------+--+--------+--+--------+--+-----------+--+-----------+
11. Dividends Paid
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | 2009 | | 2008 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| | | | | | | | EUR'000 | | EUR'000 |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
| Final Dividend of EUR0.01 (2008: EURNIL) per ordinary | | | | |
| share proposed | | | | |
+-------------------------------------------------------+--+----------+--+----------+
| and paid during year relating to the | | | | 1,553 | | - |
| previous year's results | | | | | | |
+-------------------------------------------+--+--------+--+----------+--+----------+
| | | | | | | | | | |
+----------------------+--------+--+--------+--+--------+--+----------+--+----------+
12. Related party transactions
The Company had no related party transactions that require disclosure.
13. Post balance sheet events
On 9 April 2009, the Company subscribed for a further 8,333,334 Ordinary shares
in Diamond Wood China Limited for EUR0.48 each. This takes the company's total
holding to 21,666,734 ordinary shares, which represents a holding of 15.4%.
On 30 June 2009, the Company completed the first drawdown under the equity line
of credit with Gem Global Yield Fund Limited, with the issue of 700,000 Ordinary
shares at EUR0.753 per share, raising EUR527,100.
The Company also signed an agreement with an institutional investor to issue
shares to a value of EUR4,000,000 in two equal tranches, during July 2009 and
September 2009.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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