TIDMOCG
RNS Number : 3058A
Oxford Catalysts Group PLC
29 March 2012
29(th) March 2012
OXFORD CATALYSTS GROUP PLC
("Oxford Catalysts" or "the Group" or "the Company")
Final Results for the Year Ended 31 December 2011
Oxford Catalysts Group PLC, the leading technology innovator for synthetic fuels production, is pleased to announce its final audited results for the year ended 31 December 2011.
Highlights
-- Orders received for full scale FT units: one for SGCE; two for a Fortune 500 company; and, post period end, one for a diversified energy company
-- Progressed to Phase 2 of GTL engineering study for 15,000 bpd facility in North America
-- Several $millions committed for commercialization by offshore GTL partners post period end
-- One year successful continuous operation of Group's FT catalyst achieved
-- Market outlook is good - arbitrage between gas and oil prices in US is at exceptional level
-- Revenue of GBP4.7 million (2010: GBP7.7 million) reflecting continuing transition to commercial activities
-- Raised GBP21m before expenses through an oversubscribed equity placing
-- Cash* at period end of GBP17.1 million (2010: GBP5.7 million)
Pierre Jungels, CBE, Chairman of Oxford Catalysts, said:
"I am delighted with the progress that the Group has made throughout 2011 in moving ahead towards commercialisation. The Company has taken significant steps in all areas necessary to deliver commercial sales of its products, and has started to receive orders for its FT reactors."
"The level of interest in our technology is at an all-time high and there appear to be exceptional opportunities, particularly in North America arising from near record low gas prices as a result of the shale gas production boom. Our GTL offering looks ideally placed to exploit the highly attractive arbitrage between low gas and high oil prices. With the Company well capitalised following the fund raising in 2011, we look forward to building on this progress to achieve further success in 2012."
* Defined as cash, cash equivalents, short term investments and other financial assets.
There will be a meeting for analysts at 9:30 am today; details can be obtained from FTI Consulting (see below).
For further information, please contact:
Oxford Catalysts +44 (0)20 7831
Roy Lipski, CEO 3113
Susan Robertson, CFO +1 614 733 3300
+44 (0)20 7397
8900
Cenkos Securities (Nomad and Broker) +44 (0)131 220
Ken Fleming / Beth McKiernan 9772
FTI Consulting +44 (0)20 7831
Billy Clegg / Alex Beagley 3113
Notes to Editors
Oxford Catalysts designs and develops technology for the production of clean synthetic fuels from both conventional fossil fuels and renewable sources such as bio-waste. The Group is primarily focused on the emerging market for distributed scale production of synthetic fuels via Fischer-Tropsch ("FT") synthesis - a market that has the potential of producing as much as 25 million barrels of fuel a day.
The FT reaction is used when converting natural gas, coal or bio-mass into clean high-performance liquid synthetic fuels, processes known as GTL, CTL and BTL respectively. The Group is the recognised world leader in the design and development of high-activity catalysts and associated novel chemical reactors for the small scale production of synthetic fuels. (The Group's reactor technology - known as microchannel process technology - is marketed under the brand name of Velocys).
Oxford Catalysts Group PLC is listed on the AIM market of the London Stock Exchange (LSE: OCG). The Group has some 85 employees with facilities near Oxford, UK and Columbus, Ohio, USA.
www.oxfordcatalysts.com
www.velocys.com CHAIRMAN'S STATEMENT
Pierre Jungels, CBE
2011 has seen strong progress for the Group as we continue our transformation from a development organisation to a commercial product provider.
The energy world is changing, with oil majors having to look to different sources of fuel. Hydrocarbons that have long been considered too expensive and difficult to extract, such as shale gas, have now been re-evaluated and we are seeing significant expansion in these programmes and the large-scale entry of major energy companies. As the increasing demand for oil and sustained production constraints have continued to drive crude prices over $100 per barrel, and more recently above $120, gas prices have remained low and are forecast to continue to do so, particularly in the US. Consequently, the environment for synthetic fuels production is increasingly attractive, especially in North America.
The Group continues to actively evaluate partnership and sales opportunities with major corporations, and has been engaged in and is successfully progressing through extensive engineering cost studies with a number of significant prospective customers. These have demonstrated consistently attractive economics for its technology under a range of market scenarios and across several applications. The positive industry feedback being received further validates the Group's confidence in the strong competitiveness of its products.
In 2011, the Group received orders for three full size Fischer-Tropsch ("FT") units, with a further order received post period end. In June, the Group was selected to participate in an engineering study on behalf of a $multi-billion Exploration & Production company, for a 15,000 bpd facility in North America. Post period end, the Group announced the successful completion of Phase 1 and selection to participate in Phase 2 of the study.
The Group's integrated Gas-to-Liquids ("GTL") demonstration arrived on site at the Petroleo Brasileiro S.A. ("Petrobras") facility in Fortaleza, Brazil, where operations began in late 2011. The Group continues to receive strong support from Petrobras and from its partners Toyo Engineering Corporation ("Toyo") and MODEC, Inc. ("MODEC").
The Group's cash position was bolstered after completion of an oversubscribed placing that raised GBP21 million before expenses in March 2011. This strong support provides further validation of the Group's business model, its technical and commercial progress, and the significant market opportunity.
Group revenues for the year were GBP4.7 million (2010: GBP7.7 million) reflecting the shift away from development funding to commercial activities. Cash* at period end stood at GBP17.1 million (2010: GBP5.7 million), while cash* outflow was GBP8.7 million, excluding the impact of the fund raising (2010: GBP6.3 million).
The Group continues to receive accolades and recognition from industry, winning three prestigious awards during the period. These are a testament to the significant progress the Group continues to make. I would like to thank the team for their hard work and determination this year.
Finally, it was with great sadness that we announced in September the passing away of Jeremy Scudamore, Non-executive Director and Chairman of the Audit Committee. Since joining the Board in March 2007, Jeremy had added significant value to the Group, performing his role with great endeavor and integrity, and with the benefit of huge experience. Jeremy is very much missed by the Oxford Catalysts team.
Outlook
This is an exciting time for the Group as we advance to commercial success, building on progress made in 2011. In 2012, the Group's main focus will be on continuing to strengthen its commercial capabilities, completing its integrated GTL product demonstration, and developing prospects into firm orders. Being well capitalised, and with the numerous opportunities already in the pipeline, the Company is positioned for success. 2012 looks set to be a milestone year for the Group.
* Defined as cash, cash equivalents, short term investments and other financial assets.
Chief Executive's RePORT
Roy Lipski
Introduction
The Group continued to make considerable progress during 2011 on its key priority of readiness for commercial roll out.
Market Conditions
Market conditions for distributed scale synthetic fuels production are better than at any other time in our experience, and the Group is enjoying record levels of interest and enquiries in its technology. The shale gas boom occurring across the world and especially in the US is changing the energy landscape. Oxford Catalysts is particularly well placed to benefit from the arbitrage between low and falling gas prices and high and rising oil prices. As such, we have seen unprecedented interest in our technologies and expect this to continue.
Commercialisation
Demonstration
During the year SGCE successfully completed the demonstration of an FT reactor and catalyst of ours in Gussing, Austria. Activities there are now complete and the equipment has been returned to the Group's US site where it will form part of an integrated GTL pilot plant alongside the Group's Steam Methane Reforming ("SMR") and hydro-processing technologies.
The Group's integrated GTL demonstration, which includes both its FT and SMR reactors, began operations in Fortaleza, Brazil in late 2011. This project has been entirely funded and managed by Toyo and MODEC in collaboration with Petrobras. As with most field demonstrations, the precise timing of this programme is subject to change, however the Group remains confident of a successful outcome and is encouraged by the level of support and commitment being provided by Petrobras, Toyo and MODEC. Post period end, Toyo and MODEC committed several $millions of additional funding to the Group to accelerate commercial readiness in anticipation of sales to the offshore GTL market.
In 2012, the Group announced the sale of a commercial scale FT unit to a diversified energy company for the purpose of operating to provide detailed engineering parameters for medium scale modular synthetic fuels facilities that the company intends to aggressively pursue. The unit has now been delivered, with start-up expected around mid-year.
Additionally post period end, the Group announced the attainment of a significant milestone of over one year of successful continuous operation of its FT catalyst. This long duration test provides further validation of the robust performance of the Group's technology and the impressive stability of its FT catalyst.
Manufacturing
The Group made significant progress during the year with manufacturing of its FT reactors and catalyst, and activities to advance supply chain capabilities to support higher volume sales have been a success. The Group is working closely with manufacturing partners and suppliers and is comfortable of its ability to supply both catalyst and reactors for orders in 2012 and beyond. In addition, the Group is developing key partnerships that will provide engineering and other capabilities to execute and support new projects and customer installations. Sales and Prospects
The Group received an order from SGCE for its second full scale FT unit in May. SCGE plans to ultimately deploy the two FT units in a Biomass-to-Liquids facility.
In July, the Group received an order for two full size FT units from a Fortune 500 company committed to distributed production of synthetic fuels. This order is expected to be followed by an order for additional reactors that together will comprise the FT section of their first commercial synthetic fuels plant. This customer intends to roll out additional plants following successful completion and operation of this first commercial facility.
In June, the Group announced that it is being paid to participate in a first stage engineering study (known as an FEL1), conducted on behalf of a $multi-billion Exploration & Production company by a major engineering firm, for a GTL facility of 15,000 bpd in North America designed to convert shale gas into synthetic fuels. In January 2012, the Group successfully progressed to the next phase (known as FEL2) of the engineering study having had the first stage confirm the economic advantage of the Group's technology, due to its higher performance and modular nature. This next phase of the evaluation is due to begin shortly with a budget of several $million. This is an exciting opportunity for the Group to potentially participate in what could be one of the first major GTL plants to be built in North America.
Industry Recognition
In 2011, the Group won three prestigious industry awards. Most notably, the 2011 Kirkpatrick Chemical Engineering Achievement Award, sponsored by Chemical Engineering magazine. Running continuously since 1933, this Award is presented every other year to the most noteworthy chemical engineering technology commercialised anywhere in the world during the previous two years.
Earlier in the year, the Group won both the Rushlight Fossil Fuels Award and the overall Rushlight award in the Energy Environmental Category. The Rushlight awards are presented to the leading energy, resource and environmental technologies and innovations from organisations throughout the UK and Ireland. The Fossil Fuels award is bestowed on the technological advancement or innovation that has made the most significant contribution to the reduction in the environmental impact of fossil fuel usage.
Intellectual Property
The Group's current intellectual property portfolio includes over 770 active patent cases and an even larger number of invention records. During the period, the Group filed 7 new patent applications, while 50 existing applications were granted in jurisdictions including the US, Brazil, Canada, China, India, Japan, Norway, South Korea, and various European countries.
Resources
The Group made a number of key appointments during the year, including substantially enlarging both its process engineering and business development teams. Paul Schubert was appointed in the role of Group Chief Operating Officer. Paul has 28 years of experience in the petrochemical, natural gas and synthetic fuels industries.
Successful Equity Placing
In March 2011, the Group successfully raised GBP21 million before expenses, at the same time enhancing its already solid shareholder base with the addition of seven new blue chip institutional investors. These proceeds are now being used to accelerate the Group's transition to a commercial product company, including the hiring of additional staff for commercial operations, extending manufacturing and supply chain capacity and readiness, and upgrading its technology infrastructure to better support commercial interactions. The new funds also bolster the Group's balance sheet giving it added credibility and strengthening its negotiating position with prospective partners.
Financial Review
Revenues during the year were GBP4.7 million (2010: GBP7.7 million), reflecting the continuation of a shift away from development funding to commercial activities. Revenues were also impacted by a decision to continue the slowdown of activities on a government funded programme in order to concentrate on fulfilment of orders for FT units and ramping up manufacturing capacity. The funding for this programme (c. GBP3.2 million) remains available and is expected to be received in full by the end of 2012.
Adjusted losses for the year were GBP7.7 million (2010: GBP5.5 million) excluding the impact of foreign exchange gains (GBP0.2 million gain; 2010 GBP0.1 million gain) and noncash items (depreciation, amortization and share-based payments: GBP2.1 million; 2010: GBP1.7 million). Cash* outflow in the year, excluding the impact of the fund raising, was GBP8.7 million (2010: GBP6.3 million).
At the year end, the Group had GBP17.1 million of cash* (2010: GBP5.7 million). Management is closely overseeing the Group's drive for early sales and speed to market, to ensure continued responsible stewardship of the Group's financial resources.
* Defined as cash, cash equivalents, short term investments and other financial assets.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 2010
Note GBP'000 GBP'000
---------- ----------
Revenue 2 4,722 7,652
Cost of sales (3,253) (4,649)
---------- ----------
Gross profit 1,469 3,003
Unfunded research and development
costs (6,890) (4,568)
Share-based payments (841) (410)
Other administrative expenses (4,561) (6,235)
---------- ----------
Total administrative expenses (12,292) (11,213)
---------- ----------
Operating loss (10,823) (8,210)
Finance income 441 195
Finance costs (55) (55)
---------- ----------
Finance income, net 386 140
Income tax credit 793 858
---------- ----------
Loss for the financial year attributable
to the owners of the Company (9,644) (7,212)
========== ==========
Loss per share attributable to the
owners of the Company
Basic and diluted (pence) 3 (11.39) (11.45)
========== ==========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 2010
GBP'000 GBP'000
----------- ----------
Loss for the year (9,644) (7,212)
Other comprehensive income
Foreign currency translation differences 263 1,035
---------- ----------
Total comprehensive expense for the
year (9,381) (6,177)
========== ==========
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2011
2011 2010
Note GBP'000 GBP'000
Non-current assets
Intangible assets 26,066 25,535
Property, plant and equipment 2,330 2,590
28,396 28,125
---------- ----------
Current assets
Trade and other receivables 1,501 1,106
Current income tax asset 550 347
Inventory 308 -
Financial assets - restricted access
escrow account 4 531 320
Short term investments - funds held
on long-term deposit 4 5,941 1,000
Cash and cash equivalents 4 10,579 4,406
---------- ----------
19,410 7,179
---------- ----------
Total assets 47,806 35,304
---------- ----------
Current liabilities
Trade and other payables (3,571) (2,740)
Borrowings (93) (91)
(3,664) (2,831)
---------- ----------
Non-current liabilities
Trade and other payables (190) (371)
Borrowings (1,284) (959)
---------- ----------
(1,474) (1,330)
---------- ----------
Total liabilities (5,138) (4,161)
---------- ----------
Net assets 42,668 31,143
========== ==========
Capital and reserves attributable
to owners of the Company
Called up share capital 902 638
Share premium account 65,270 45,469
Merger reserve 369 369
Share-based payment reserve 5,690 4,849
Accumulated losses (29,563) (20,182)
Total equity 42,668 31,143
========== ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
Called
up share Share Share-based Merger Accumulated
capital premium payments reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ------------- ---------- ------------- ----------
Balance at 1 January
2010 613 45,074 4,439 369 (14,005) 36,490
----------- ---------- ------------- ---------- ------------- ----------
Comprehensive income
Loss for the year - - - - (7,212) (7,212)
Other comprehensive income
Foreign currency translation
differences - - - - 1,035 1,035
----------- ---------- ------------- ---------- ------------- ----------
Total comprehensive expense - - - - (6,177) (6,177)
----------- ---------- ------------- ---------- ------------- ----------
Transactions with owners
Share-based payments
- value of employee services - - 410 - - 410
Proceeds from share issues 25 395 - - - 420
----------- ---------- ------------- ---------- ------------- ----------
Total transactions with
owners 25 395 410 - - 830
----------- ---------- ------------- ---------- ------------- ----------
Balance at 31 December
2010 638 45,469 4,849 369 (20,182) 31,143
----------- ---------- ------------- ---------- ------------- ----------
Comprehensive income
Loss for the year - - - - (9,644) (9,644)
Other comprehensive income
Foreign currency translation
differences - - - - 263 263
----------- ---------- ------------- ---------- ------------- ----------
Total comprehensive expense - - - - (9,381) (9,381)
----------- ---------- ------------- ---------- ------------- ----------
Transactions with owners
Share-based payments
- value of employee services - - 841 - - 841
Proceeds from share issues 264 19,801 - - - 20,065
----------- ---------- ------------- ---------- ------------- ----------
Total transactions with
owners 264 19,801 841 - - 20,906
----------- ---------- ------------- ---------- ------------- ----------
Balance at 31 December
2011 902 65,270 5,690 369 (29,563) 42,668
=========== ========== ============= ========== ============= ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 2010
Note GBP'000 GBP'000
---------- ----------
Cash flows from operating activities
Cash consumed by operations 5 (8,685) (7,170)
Tax credit received 590 858
---------- ----------
Net cash used in operating activities (8,095) (6,312)
---------- ----------
Cash flows from investing activities
Purchases of property, plant and equipment (866) (618)
Purchase of intangible fixed assets (437) (772)
Interest received 132 195
Interest paid (55) (55)
(Decrease) / increase in cash placed on deposit and restricted access escrow account (5,141) 3,000
---------- ----------
Net cash (used in) from investing activities (6,367) 1,750
---------- ----------
Cash flows from financing activities
Proceeds of issuance of ordinary shares 20,065 420
Increase in borrowing 304 746
---------- ----------
Net cash from financing activities 20,369 1,166
Net increase (decrease) in cash and cash equivalents 5,907 (3,396)
Cash and cash equivalents at beginning of year 4,406 7,686
Exchange gains on cash and cash equivalents 266 116
Cash and cash equivalents at end of year 10,579 4,406
========== ==========
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1. PRINCIPAL ACCOUNTING Policies
Basis of Preparation
The financial information presented by the Directors in this statement is derived from the Group financial statements for the year ended 31 December 2011 that have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention.
The accounting policies adopted are consistent with those disclosed in the Group's statutory accounts for the year ended 31 December 2011.
These accounts have been audited and the audit report is unqualified and does not contain a statement under section 237 of the Companies Act. The accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting on 8(th) June 2012.
Functional Currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in UK sterling (GBP), which is the Company's functional and the Group's presentation currency.
2. SEGMENTAL REPORTING
The chief operating decision-maker has been identified as the Senior Management Team ("SMT"). This team reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.
The SMT considers that the business comprises a single activity which is the design and development of technology for synthetic fuels production. The SMT reviews the Group's profit or loss and its cash flows, assets and liabilities on a whole-company basis. In carrying out these reviews, the SMT considers all material items of income and expenditure that are directly attributable to individual programmes. The internal management reports do not allocate assets and liabilities or shared overheads to individual products or projects.
Based on the above considerations, there is considered to be one reportable segment, synthetic fuels. The business is segmented on the basis that the key end use market is that of synthetic fuels production. At this stage, the synthetic fuels segment represents over 90% of the business and is therefore the only material segment.
Internal and external reporting is on a consolidated basis, with purchases and sales between subsidiaries eliminated on consolidation. Therefore the segment and financial information is the same as that set out in the consolidated income statement, consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of cash flows and the consolidated statement of changes in equity.
The SMT assesses the performance of the operating segment based on a measure of operating loss.
The Group's business operates in three main geographical areas. Revenue is allocated based on the country in which the customer is located.
2011 2010
Europe USA Asia Europe USA Asia
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total revenue 1,389 1,463 1,870 2,193 923 4,536
========== ========== ========== ========== ========== ==========
Non-current assets, consisting primarily of goodwill, other intangible assets and property, plant and equipment, totalling GBP27,388,000 (2010: GBP26,702,000) were located in the United States of America. All other non-current assets are held in the United Kingdom.
3. LOSS PER SHARE
The basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.
2011 2010
GBP'000 GBP'000
------------ ------------
Loss attributable to equity owners of the Company (GBP'000s) (9,644) (7,212)
Weighted average number of ordinary shares in issue 84,681,033 63,008,632
------------ ------------
Basic and diluted loss per share (pence) (11.39) (11.45)
============ ============
4. SHORT TERM INVESTMENTS, CASH EQUIVALENTS AND RESTRICTED ASSETS
2011 2010
GBP'000 GBP'000
---------- ----------
Financial assets - restricted access escrow account 531 320
Short term investments - funds held on long-term deposit 5,941 1,000
Cash and cash equivalents 10,579 4,406
---------- ----------
Total 17,051 5,726
========== ==========
Under IFRS 7, cash held on long-term deposit greater than three months has been classified as a short term investment.
The financial assets - restricted access escrow account is the balance held in an escrow account which relates to the State of Ohio loan. Generally, assets acquired under the State of Ohio's R&D Loan program must remain in the State of Ohio. The Company's wholly owned subsidiary, Velocys, Inc., and the State of Ohio agreed as part of the loan terms and conditions that Velocys could use a portion of the proceeds to fund the purchase of certain assets to be located outside of the United States for approximately one year if Velocys agreed to place a sum in an escrow account. At 31 December 2010, the escrow account represented the amount borrowed against assets located overseas. In 2011, Velocys agreed amendments to its agreement with the State of Ohio and as a consequence, at 31 December 2011, the Company had drawn the remainder of the loan funding. Amounts which were not secured against specific assets of GBP531,000 remained in this escrow account but may be drawn down against future assets acquired.
All short term investments are in UK sterling denominated accounts. The restricted access escrow account is denominated in US dollars. Cash is held in both US dollars and UK sterling denominated accounts as follows.
2011 2010
GBP'000 GBP'000
-------------- --------------
UK Sterling denominated:
Short term investments - funds held on long-term deposit 4,000 1,000
Cash and cash equivalents 6,837 3,531
-------------- --------------
Total 10,837 4,531
============== ==============
US Dollar denominated:
Financial assets - restricted access escrow account 531 320
Short term investments - funds held on long-term deposit 1,941 -
Cash and cash equivalents 3,742 875
-------------- --------------
Total 6,214 1,195
============== ==============
5. CASH OUTFLOWS FROM OPERATING ACTIVITIES
2011 2010
GBP'000 GBP'000
-------------- --------------
Operating loss (10,823) (8,210)
Depreciation and amortisation 1,306 1,315
Share-based payments 841 410
Changes in working capital (excluding the effects of exchange differences on
consolidation)
- Trade and other receivables (319) 666
- Trade and other payables 614 (1,353)
- Inventory (308) -
- Other 4 2
-------------- --------------
Net cash consumed by operations (8,685) (7,170)
============== ==============
6. CONTINGENT LIABILITIES
It has been previously reported that the Group's US subsidiary, Velocys, received notification in 2010 of the results of an audit of contract billings from the US Defense Contract Audit Agency which detailed potential non-compliant claims and subsequently, in August 2011, Velocys received notification of a potential civil claim relating to this matter from the United States. After the matter was fully investigated, in December 2011, Velocys was notified by the United States Attorney's Office that it had closed its file on this matter without further action. Based on this, the Directors believe that no potential liabilities exist relating to this audit report.
In April 2010, Velocys filed a lawsuit in the US against Catacel Corp. ("Catacel"), a supplier of catalysts to CompactGTL plc ("CompactGTL"), claiming infringement of several of the Group's microchannel related patents. In response, CompactGTL has challenged the validity of a small number of the Group's patents, including certain patents covering the UK. One of the challenged patents is included within the lawsuit against Catacel.
Whilst the outcome of these cases is not certain, the Directors are confident of the Group's infringement case against Catacel, as well as the validity of those of its patents which are being challenged. As part of the infringement case, in October 2011, the judge granted Velocys' motion for sanctions against the other side. A ruling on the damages to be awarded to Velocys in relation to this is still awaited at the date of these financial statements.
As at the date of these financial statements, of the patents challenged by CompactGTL, four have already successfully passed re-examination (which includes the one also included within the Catacel lawsuit) and none have been revoked.
Costs incurred to date responding to this challenge have been expensed. Given the nature of defending UK patent challenges, should its defence be unsuccessful, the Group may be liable for some of CompactGTL's UK legal costs. The Directors consider this situation to be unlikely and moreover, the Group has been copied on correspondence from CompactGTL's solicitors to the UK IPO stating that the case is "informally on hold". On this basis, no provision has been recognised in respect of this action.
The Group's policy is to always explore licensing opportunities for its IP where possible. Management will continue to seek business solutions that forward the Group's interests, in preference to resolution through legal means.
7. STATUTORY INFORMATION
Copies of the 2011 Annual Report will be posted to shareholders at least 21 days before the Company's annual general meeting and may be obtained from the date of posting for one month free of charge from the registered office of the Company, 115e Milton Park, Oxford, OX14 4RZ, as well as from the Company's web site www.oxfordcatalysts.com
8. ANNUAL GENERAL MEETING
The annual general meeting ("AGM") is to be held on 8(th) June 2012. Notice of the AGM will be dispatched to shareholders with the Group's report and accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEIFMAFESEID
