RNS Number : 7625K
Infinity Bio-Energy Ltd
24 December 2008
Infinity Bio-Energy Ltd.
("Infinity" or the "Company")
Publication of Interim Results for the period of six months to September 30, 2008
Infinity Bio-Energy Ltd. (AIM: IBI.L) is pleased to announce its Interim Results for the period of six months to September 30, 2008. The
Interim Report is also available on the Company's website at www.infinitybio.com.br.
* From April 2008 to September 2008, the Company recorded total net revenue of
US$ 90.41 million compared to US$ 56.85 million during the period of April
2007 to September 2007.
COMMENTS ON RESULTS
Infinity recorded revenue of US$90.41 million in the period of six months to September 30, 2008, compared to US$56.85million for the
same period of the previous year.
Despite this increase in revenue, Infinity was significantly impacted in its results by delays in delivery of equipment, a problem that
plagued many companies in the sector this year but which particularly affected the Company due to the significant growth in production it
had budgeted to implement. These delays have resulted in significantly lower crushing than expected this year, with a reduction from the
intended 7.4 million tons to approximately 5 million tons, as well as much lower productivity as a result of the mills operating for most of
the period with less than optimum industrial conditions. This in turn very negatively impacted the Company's operating results.
Infinity continues to work together with its financial advisor, Morgan Stanley, to continue discussions with several providers of
financing and continues to work with its creditors to obtain new financing or refinancing for the Company appropriate to the current
economic environment. Although there can be no assurance such new financing or refinancing will be obtained or on what terms it will be
obtained, the Company continues to actively consider all alternatives.
For further information, please contact:
Infinity Bio-Energy
Sergio Thompson-Flores, CEO +55 11 3525-9921
Rodrigo Aguiar, Investor Relations Officer +55 11 3525-9922
Collins Stewart Europe Limited
Adrian Hadden / Adam Cowen +44 (0) 20 7523 8350
Business Review
In spite of the commencement of Disa and Para? mills operations, acquired over the last fiscal year, the aggregate crushing until
September 2008 for the 2008/09 harvest only reached 2,697 sugarcane tons. Compared with the previous year this represents a reduction of 3%
in the volume of sugarcane crushed. As announced on 25 September 2008, this reduction was caused principally by delays in the delivery of
equipment vital to the Company's operations. In the current harvest, in addition to the generally late start to the harvest experienced by
the sector the sugarcane industry suffered delays in equipment supply for expansion and intercrop maintenance projects which have
contributed to lower overall crushing by the industry than originally forecast. Infinity has been one of the many companies in the sector
which have faced equipment problems this year and was particularly affected by these delays due to the significant growth in production the
Company intended to implement.
These delays have resulted in significantly lower crushing than expected this year, with a reduction from the intended 7.4 million tons
to approximately 5 million tons. This in turn negatively impacted the Company's operating results, as the reduction in production led to
sales volume and revenue reductions that could not be immediately reflected in proportional reductions in costs and expenses since these had
already been scaled to a significantly larger production volume. The delay in the delivery of equipment also caused the mills to operate at
lower productivity then had been anticipated as they had to operate for a significant part of the harvest with imperfect industrial
set-ups.
Macro-economic conditions did not assist the Company, in a number of respects: the Brazilian Real (BRL) weakened in September 2008 with
the onset of the international financial crisis, depreciating sharply in recent months; and the slowdown in the international economy had a
very marked impact on the availability of financing and imposed a further strain on the Company's cash flow.
The Company has taken swift action to adjust all the operational variables over which it exercises control, with an emphasis on cost
reductions. Infinity is actively implementing a cost reduction plan, which is expected to reduce the run rate of operating expenses by more
than 5 % of projected 2008/09 net revenues. Meanwhile, as announced on 6 November 2008 and 19 November 2008, the Company has been working
with its financial advisor, Morgan Stanley, to continue discussions with several new financing alternatives and has been working with its
creditors to obtain refinancing for the Company appropriate to the current economic environment. Although there can be no assurance such new
financing or refinancing will be obtained or on what terms it will be obtained, the Company continues to actively consider all
alternatives.
The Company has invested in expanding production capacity and modernizing plants, reaching a total crushing installed capacity of 8.3
million tons of sugarcane per year. Infinity postponed the start up of the Ibiralcool mill until the next harvest, which will add 1 million
tons of yearly operational installed capacity.
On 17 June 2008, Infinity increased its stake in Cristal Destilaria Aut?a de �lcool S.A. ("Cridasa") through its subsidiary Infinity
Bio-Energy Brasil Participa?s S.A., purchasing 204,978,831 shares in Cridasa from Cooperativa Mista dos Produtores Rurais de Cristal do
Norte ("Cristalcoop"), which represent 42.31% of Cridasa's existing issued share capital. As a result of this acquisition, Infinity
increased its stake in Cridasa from 57.25% to 99.56%. The total consideration for the acquisition is approximately US$17 million, payable
over a three year period, representing a cost of approximately US$53 per ton.
As an integral part of the transaction, the sellers committed to invest more than 50% of the consideration above in planting cane that
will be used as feedstock to support Cridasa's growth in production, which reduces the need for agricultural Capex.
The acquisition reinforces Infinity's position in Esp?to Santo State, is consistent with the stated strategy of acquiring and building
mills in operating clusters that are located in regions that have structurally lower costs, better logistics and margin advantages relative
to many other mills in Brazil.
Operational Overview
Usinavi
By the end of September 2008, Usinavi had crushed 837.1 thousand tons of sugarcane, producing 82.5 thousand tons of sugar and 32.6
million liters of hydrous ethanol. As a direct result of delays in delivery of equipment, this represented a reduction over the 2007/08
harvest crushing of 700 thousand tons of sugarcane. Industrial efficiency in the first half-year period of 2007/08 harvest was approximately
79.4%.
For the end of the 2007/08 Harvest Usinavi is expected to crush approximately 1.87 million tons of sugarcane, as compared to 2.2 million
tons the previous year. Total installed effective capacity is now 3.2 million tons per year.
Alcana
By the end of September 2008, Alcana had crushed 514.7 thousand tons of sugarcane, producing 27.9 million liters of hydrous ethanol, 1.2
million liters of anhydrous ethanol and 12.7 thousand tons of sugar. This also represented also mainly due to equipment delays a significant
reduction over the first half-year of the 2007/08 harvest in which the mill crushed approximately 663.3 thousand tons of sugarcane.
Industrial efficiency was approximately 71.7% in the first half-year period of 2007/08 harvest.
In 2008/09 Harvest, Alcana is expected to crush approximately 942 thousand tons of sugarcane. Total installed effective capacity is 1.5
million tons per year.
Cridasa
By the end of September 2008, Cridasa crushed just over 347 thousand tons of sugarcane compared to 589.5 thousand tons in the first
half-year period of 2007/08 harvest. Cridasa produced approximately 22.1 million liters of hydrous ethanol and 5.6 million liters of
anhydrous ethanol. The industrial efficiency in this period was approximately 79%.
In 2008/09 Cridasa is expected to crush approximately 660 thousand tons of sugarcane. Total installed effective capacity is 1.5 million
tons per year.
Disa
By the end of September 2008, Disa crushed 749.1 thousand tons of sugarcane, producing 18.2 million liters of hydrous ethanol, 25.7
million liters of anhydrous ethanol and 19.9 thousand tons of sugar. The industrial efficiency in this period was approximately 78%.
Disa is expected to crush approximately 1.1 million tons of sugarcane in 2008/09 harvest, out of a total current capacity of 1.3 million
tons.
Para?
By the end of September 2008, Paraiso crushed 248.3 thousand tons of sugarcane, producing 20.7 million liters of hydrous ethanol.
Industrial efficiency in the first half-year period of 2007/08 harvest was approximately 85%.
Paraiso is expected to crush approximately 454 thousand tons of sugarcane in 2008/09 harvest, out of a total capacity of 1.0 million
tons.
Greenfield Projects
As already commented in the Business Review section of this report, the Company is restructuring all its projects investment schedule to
conform to the new market environment and low liquidity scenario, by postponing implementation of its Greenfield projects and focusing on
developing them only when integrated with co-generation.
International Expansion
The Company intends to reinforce its emphasis on global expansion. Infinity is actively exploring alternatives in the Caribbean and the
Central American region which would allow it to take advantage of the US Export Preference Agreements through the Caribbean Basin Initiative
(CBI).
The main project is located in Jamaica, where as announced on 30 June 2008, the Company signed a Heads of Agreement with the Government
of Jamaica. The Heads of Agreement will provide the Company with both privileged access to the domestic market for ethanol in Jamaica and a
platform for exporting anhydrous ethanol to the United States, utilizing the Caribbean Basin initiative program.
The structure of the transaction consists in Infinity and the Government of Jamaica forming a new company ("NewCo"), which will own the
currently Government-owned assets of the Jamaican Sugarcane Industry and also an existing dehydration facility that currently belongs to the
Petroleum Corporation of Jamaica ("PCJ") with a capacity of approximately 40 million gallons per year. The 5 sugar plants to be transferred
to NewCo crushed 1.4 million tons of sugarcane last year dedicated to sugar production which benefits from preferential export conditions to
Europe. Infinity intends to increase the plants' crushing to 2.5 to 3 million tons of sugarcane with all the additional crushing used in
ethanol production.
As part of the Heads of Agreement and as a means to stimulate ethanol production in Jamaica, the Government of Jamaica established a
domestic program for blending ethanol into gasoline, initiating at 10% blending, which will become mandated April 2009, increasing to 25% in
due course of its current consumption of approximately 180 million gallons a year. The Heads of Agreement provides for an off-take agreement
with PCJ through which Infinity will supply the domestic demand of ethanol in the country.
In addition to the production of sugar, ethanol and dehydration of Brazilian ethanol, NewCo will produce electricity for its own
consumption and up to 40 MW for sale to the national energy grid of Jamaica under a 20 year Power Purchase Agreement.
Although the Company is advancing with this transaction and expects to close it in near term there can be no assurance that it will be
executed.
Ethanol Exports
During the 2009/10 reporting year, the Company intends to increase its focus on exports of ethanol in particular to Europe and to the US
markets, in the latter case through dehydration of Brazilian ethanol in Jamaica before shipping it to the US, thus taking advantage of the
Caribbean Basin Initiative.
At the end of 2008 the Company initiated its anhydrous ethanol program to export ethanol to Jamaica in order to supply the Jamaican
blending program.
Logistics
Infinity has continued to develop solutions to reduce its logistical cost to supply both the Brazilian and the international markets.
The most notable progress in this area is the beginning of operations of the port terminal in Vitoria which has produced a very
significant reduction in our cost to FOB for both export and coastal shipping to supply other regions of Brazil.
The Company is also working on several projects that will improve efficiency and reduce cost through faster loading, reduction in losses
through evaporation downstream integration by selling more of its product at the point of destination as opposed to ex-mill.
New Issue of Shares
* As released on April 11th 2008, the Company issued 487,325 ordinary shares
at the price of US$ 5.20 per Share as consideration for an outstanding
amount owed as part of the acquisition of Alcana Destilaria de Alcool de
Nanuque S.A. and Cristal Destilaria Autonoma de Alcool S.A. announced on
October 9th 2006.
* The Company issued 3,390,222 shares at a price of US$5.00 per share as
mentioned in the press release of July 4th 2008. In the same release
Infinity announced, if the Company does not consummate an Offering of Common
Equity or Brazilian Depositary Receipts on one of the specified stock
exchanges within six months, which is not going to occur, the Company shall
issue an additional 551,897 shares to the purchasers, thus reducing the
purchase price to US$ 4.30 per share.
Convertible Notes Emission
* The Company issued Notes in a total amount of US$21 million. This issue
represent the remaining amount available under the Convertible Notes
originally authorized to be raised in November 2007 and are substantially
similar to the Convertible Notes issued on that date, with the exception of
the undertaking by the Company with the purchaser of the Notes to forbear
from exercising its mandatory conversion rights on the newly-issued Notes
until 15 months following an Offering of Common Equity or Brazilian
Depositary Receipts on one of the specified stock exchanges.
Main Activities
Infinity Bio-Energy Limited (the "Company") is a renewable energy company which aims to become one of the global leaders in the
production and distribution of fuel ethanol. The Company was founded in March 2006 to acquire, build and operate sugar and ethanol
production facilities with a primary focus on Brazil.
Infinity's main points of differentiation in the sector are its deliberate cluster strategy, the strategic locations of these clusters
and its international expansion strategy. The Company vision includes a commitment to sustainable production and striving to invest in
creating a vertically integrated company, including developing better logistical solutions to reduce delivery cost to its destination
markets both in Brazil and internationally.
By structuring its operations in clusters, the Company takes advantage of operational and administrative synergies and economies of
scale promoting reduction in costs and a competitive advantage. Additionally, the Company's efforts in developing logistics and distribution
channels allow it to improve profitability by capturing the value added along the supply chain and by developing new markets and direct
relationships with final buyers. Since its foundation, the Company has assembled a management team with global experience in sugar and
ethanol production and in other industries, who are committed to a strategy of maximizing growth and value creation for the shareholders.
Comments on Results
From April 2008 to September 2008, the Company recorded total net revenue of US$ 90.41 million compared to US$ 56.85 million during the
period of April 2007 to September 2007. This substantial growth on revenue is a direct result of Disa's Acquisition and the beginning of
Para?'s operation.
During this period, ethanol sales represented 76.7% of Infinity's total revenue. Ethanol can be classified into two categories:
* Hydrous ethanol, which is used mainly as a fuel for flex fuel vehicles or
ethanol dedicated vehicles.
* Anhydrous ethanol, which is added to gasoline in Brazil and in other
countries (with different blend levels) in order to reduce greenhouse gas
emissions and/or reduce dependence on fossil fuels.
Sugar sales comprised 23.1% of total sales. Infinity produces both bulk sugar and sugar packed in 50 kg bags or in bags of one ton with
a variety of technical specifications.
Other sugarcane derivates, such as bagasse, represented 0.2% of total sales.
On the first half-year period of 2008/09 harvest, Infinity performed under expectations due to the delays on equipments deliveries and
the conditions of the Financial Market as mentioned in the Business Review. For this period the company has a Net Loss of US$ 86.01 million,
significantly higher than the US$6.54 million in the same period in the previous year, while the loss per share is 0.8141 cents compared to
0.0833 cents on the first half-year period of 2007/08 harvest.
The total assets of the Group amounted to approximately US$ 880.35 million as at the period end and were higher than the US$ 574.82
million amounted on the same period of the last year. These amounts include intangible assets that are approximately US$307.3 million for
this harvest and were US$ 184.65 million for the same period in the previous year.
Market Overview
During the 2008/2009 crop sugarcane quality and volume crushed throughout the center-south of Brazil, until end of September, was
negatively impacted by a rainy season. Both the sugar content and the total volume milled were lower than forecast.
This lower increase in production than forecast has led to ethanol inventories being consistently lower in days of consumption than last
year, helping to support ethanol prices in the internal market. In effect the Brazilian market prices for ethanol have been higher for both
hydrous and in particular anhydrous ethanol than last year.
Prices of ethanol in the US were volatile throughout the year. They increased from January to July from $2.40 per gallon to $3.10 as a
result of the approval of the US blend mandate, the driving season and of flooding in the US which damaged logistics for the ethanol supply
chain and created uncertainty as to corn production. These higher prices in turn led to record Brazilian exports to North American
destinations. After July, the crisis in the international market, its effect on commodity prices in general and the specific drivers of the
US ethanol market led to a reduction of US ethanol prices to $1.60.
Stronger prices in ethanol absorbed a higher percentage of the sugar cane used by the Brazilian industry and reduced the relative
percentage of sugar helping to reduce the output during the year.
International sugar prices were in fact benefited by a rally that started in mid 2007 and peaked at $15 cents per pound in March, 2008.
Sugar prices then fell to $9.50 in June of this year and fluctuated between $14 and $10 cents per pound, now in the range of $12 cents per
pound.
At the end of the day the variation in exchange rate with a valuation of almost 50% of the US$ against the real more than compensated
for the lowering of international sugar prices.
This increase in valuation led to a rally in internal market prices rallied from R$ 24 per 50 kgs bag to R$ 32 at the end of the year.
The outlook on prices for sugar are positive. Market fundamentals point to the product being shorter and the stronger US dollar
translates into higher real denominated revenues for exports and higher internal prices as well. In ethanol the clearly slower pace of
growth of production due to reductions in both equity and credit for new investments points to a more favourable demand to supply ratio
which should serve as price support for ethanol in the Brazilian market.
Financial Review
Details of milestones reached during the first half-year period for the 2008/09 harvest are given in the Performance Indicators on the
following document:
www.infinitybio.com.br/interim_report/Infinity_InterimReport_2008-2009.pd f
Future Outlook and Going Concern
As described in this Interim Report, the current economic environment is challenging and the Infinity group has reported an operating
loss for the period. The directors consider that the outlook presents significant challenges in terms of market liquidity and cash
availability, affecting expansion projects and reducing working capital finance. Whilst the directors have instituted measures to preserve
cash and secure additional financing, these circumstances create material uncertainties over future results and cash flows. Infinity
continues to actively consider all funding alternatives, including different structures of debt and equity financing. Based on negotiations
conducted to date the Directors have a reasonable expectation that these will proceed successfully, but if not the Infinity group will need
to secure alternative finance facilities.
The discussions with its bankers and creditors about a debt refinancing are not likely to be completed for some time. The Company is
also pursuing alternative sources of funding, and has received proposed term sheets but has not yet secured a commitment.
The Directors have concluded that the combination of these circumstances represent a material uncertainty that casts significant doubt
upon the company's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described
above, the Directors have a reasonable expectation that the Infinity group and the Company have adequate resources to continue in
operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the
financial report and accounts.
Consolidated Income Statement
for the six months ended 30 September 2008
Notes (Unaudited) (Unaudited) (Audited)
1 April 2008 - 30 September 2008 1 April 2007 - 30 September 2007 1 April 2007 - 31 March 2008
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 2 90,418 56,850 141,736
Cost of sales (110,193) (55,525) (140,833)
Gross loss (19,775) 1,325 903
Movement in fair value of 5 8,533 4,349 11,914
biological assets
Administration expenses
Stock option benefits expenses (3,857) - (13,258)
Other administration costs (27,429) (12,907) (28,931)
Total administration costs (31,286) (12,907) (42,189)
Other expenses (1,062) (657) -
Operating loss (43,590) (7,890) (29,372)
Financial income 6 34,377 12,731 51,631
Financial expense 6 (92,378) (11,725) (66,172)
Loss before tax (101,591) (6,884) (43,913)
Taxation income (expense) 15,585 344 (7,210)
Net loss (86,006) (6,540) (51,123)
Attributable to:
Equity holders of the parent (83,866) (6,359) (51,059)
Minority interest
(2,140) (181) (64)
Net loss for the period
(86,006) (6,540) (51,123)
Loss per share - US$:
Basic - cents (81.41) (8.33) (58.07)
Diluted - cents (81.41) (8.33) (58.07)
Consolidated Statement of Recognized Income and Expense
for the six months ended 30 September 2008
(Unaudited) (Unaudited) (Audited)
1 April 2008 - 30 September 2008 1 April 2007 - 30 September 2007 1 April 2007 - 31
March 2008
US$'000 US$'000 US$'000
Loss for the period (86,006) (6,540) (51,123)
Exchange differences (25,441) 29,086 48,362
Total recognized income and
expense relating to the period (111,447) 22,546 (2,761)
Attributable to:
Equity holders of the parent (109,307) 22,727 (2,697)
Minority interest
(2,140) (181) (64)
Total (111,447) 22,546 (2,761)
Consolidated Balance Sheet
at September 30, 2008
(Unaudited) (Unaudited) (Audited)
Notes 30 September 2008 30 September 2007 31 March 2008
ASSETS US$' 000 US$' 000 US$' 000
Non Current assets
Property, plant and equipment 355,302 175,890 324,607
Goodwill 4 304,033 181,028 322,316
Other intangible assets 3,311 3,629 3,733
Deferred tax assets 21,703 23,478 14,689
Biological assets 5 47,854 34,443 49,210
Trade and other receivables 1,336 20,149 8,595
Other financial assets 12,315 8,536 11,607
Total non-current assets 745,854 447,153 734,757
Current assets
Inventories 39,644 52,283 21,098
Biological Assets 2,559 3,177 7,383
Other financial assets 5 17,978 12,657
Trade and other receivables 75,886 41,269 72,218
Cash and cash equivalents 16,400 12,959 34,598
Total current assets 134,494 127,666 147,954
TOTAL ASSETS 880,348 574,819 882,711
EQUITY AND LIABILITIES
Equity attributable to equity holders of parent
company
Issued capital 9 161 121 156
Share Premium 9 339,290 231,302 320,662
Capital redemption reserve 9 64 64 64
Warrant Reserve 9 36,017 45,973 36,130
Foreign currency translation reserve 9 35,143 41,307 60,584
Share option reserve 9 10,236 - 10,236
Equity reserve 9 45,729 - 42,020
Retained deficit 9 (130,442) (8,042) (50,312)
Total equity attributable to equity holders of the 336,198 310,725 419,540
parent company
Minority interest 4,142 10,486 18,023
Total equity 340,340 321,211 437,563
Non-Current Liabilities
Trade and other payables 46,860 32,981 39,004
Interest-bearing loans and borrowings 210,706 7,419 179,409
Provisions 15,049 5,528 15,907
Deferred tax liabilities 22,076 14,722 30,405
Total non-current liabilities 294,691 60,650 264,725
Current Liabilities
Trade and other payables 132,997 73,195 87,418
Other financial Liabilities - 2,185 2,733
Interest-bearing loans and borrowings 112,320 114,228 90,272
Provisions - 3,350 -
Total current liabilities 245,317 192,958 180,423
Total liabilities 540,008 253,608 445,148
TOTAL EQUITY AND LIABILITIES 880,348 574,819 882,711
Consolidated Cash Flow Statement
for the six months ended 30 September 2008
Notes (Unaudited) (Unaudited) (Audited)
1 April 2008 - 30 September 2008 1 April 2007 - 30 September 2007 1 April 2007 - 31 March 2008
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cash flows from operating
activities
Loss before taxation (101,591) (6,884) (43,913)
Adjustments for:
Depreciation 23,431 6,702 18,596
Amortisation of biological 5,100 4,913 7,390
assets
Amortisation of intangible 422 292 367
assets
Movement in fair value of (8,533) (4,349) (11,914)
biological assets
Share based payment 3,858 13,258
Financial income (34,377) (12,731) (51,631)
Financial expense 92,378 11,725 66,172
Non cash movements on 29,476 5,214 28,878
financial income
Non cash movements on (65,087) (3,494) (33,766)
financial expenses
Operating loss before changes (54,923) 1,388 (6,563)
in working capital and
provisions
(Decrease) Increase in trade 3,591 (25,885) (42,075)
and other receivables
Decrease (Increase) in (18,546) (41,311) 471
inventories
Increase (Decrease) in trade 112,101 138,826 120,871
and other payables
(Decrease) Increase in value 13,273 (4,349) (11,914)
of biological assets
Decrease (Increase) in other 12,366 (18,673)
assets
Movement in deferred taxation (283)
provision
Increase in provisions (858) 973 21,875
121,927 49,298 89,228
Cash generated from operations 67,004 50,686 82,665
Investing activities
Acquisition of subsidiaries (3,734) (42,141) (157,761)
net of cash acquired
Purchases of plant property (90,128) (22,428) (85,983)
and equipment
Disposal of biological assets 34 4,157 -
Purchase of biological assets (8,380) (6,554) (16,787)
Interest received 4,901 7,517 22,753
Total cash outflow from (97,307) (59,449) (237,778)
investing activities
Financing activities
Issue of ordinary shares 19,485 10,000 99,395
Offering expenses (852) - -
Issue of share options - - 10,236
Repurchase of warrants (238) - (20,668)
Issue of convertible loan 21,000 - 129,000
notes
Advances on financial assets - - (15,799)
Interest paid (27,290) (8,231) (32,406)
Total cash (outflow)/inflow 12,105 1,769 169,758
from financing activities
Decrease in cash and cash (18,198) (6,994) 14,645
equivalents
Notes to the Interim Financial Statements
for the six months ended 30 September 2008
1. PRINCIPAL ACCOUNTING POLICIES
1.1 Basis of preparation
The interim results, which have been neither audited nor reviewed pursuant to guidance issued by the Auditing Practices Board, have been
prepared in accordance with recognition and measurement requirements of International Financial Reporting Standards (IFRS) adopted by
European Union. This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly,
this report is to be read in conjunction with the Annual Report for the year ended 31 March 2008 and any public announcement made by the
Company during the interim report period.
The unaudited interim financial statements for the six months ended September 30, 2008 do not constitute statutory accounts and have
been drawn up using accounting policies and presentation consistent with those applied in the audited accounts for the year ended March 31,
2008. The main accounting policies are disclosed below.
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that
affect the application of policies and reported amounts. The estimates and associated assumptions are continually evaluated and are based on
historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
The financial information for the year ended March 31, 2008 has been extracted from the statutory accounts for that period. The auditors
report for the year ended March 31, 2008 was unqualified, and did not include references to any matters to which the auditors drew attention
by way of emphasis without qualifying their report.
1.2 Accounting estimates and judgments
Included in this note are accounting policies which cover areas that the directors consider require estimates and assumptions which have
a significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has
been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each
cash-generating unit and suitable discount rates in order to calculate the present value of each cash-generating unit.
Current biological assets
Current biological assets represent the growing sugarcane owned by the Company. The value of this sugarcane is estimated based on (i)
the sucrose content of the sugarcane at the year end, (ii) the estimated market price per unit of sucrose, (iii) the inventory volume of
sugarcane, and (iv) subtracting projected processing costs associated with the sugarcane, including cutting, harvesting and transport. The
determination of sucrose included in the planted sugar cane is estimated based on a technical analysis provided on a monthly basis by
appropriately qualified staff within Infinity Bio-Energy Ltd.
Share-based payments
The group has issued stock options to certain employees allowing them to purchase the Group�s ordinary shares at an exercise price of
US$ 5.00 per share. Fair value of the options is measured by use of the Black Scholes model based on certain assumptions. These assumptions
include the expected volatility, the expected life of the options and number of options expected to vest and the risk free interest rate of
the shares.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised if the revision only affects that period or in the period of revision and future periods if the
revision affects both current and future periods.
The accounting policies set out below have been applied consistently in these financial statements by all Group entities.
1. ACCOUNTING POLICIES (continued)
1.3 Foreign currency
The functional and presentational currency of the Company is the US dollar. The functional currency of the subsidiary companies are
Brazilian Reais. The financial statements of the subsidiaries were prepared in Reais and translated to US Dollars in accordance with IAS 21.
The income statement was translated at the average monthly exchange rates which
do not vary significantly from the actual rates during the period, the assets and liabilities were translated at the exchange rate
ruling as of September 30, 2008: US$ 1.00: R$ 1.9139.
Transactions entered into by group entities in a currency other than their functional currency are recorded at the rates ruling when the
transactions occurred. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date.
Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are similarly recognised immediately in the
income statement. On consolidation, the results are translated into US$ at the average monthly exchange rate.
All assets and liabilities including goodwill arising on the acquisition of operations, are translated at the rate ruling at the balance
sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of operations at actual rate
are recognised directly in equity (the "foreign currency translation reserve").
On disposal of an operation, the cumulative exchange differences recognised in the foreign currency translation reserve relating to that
operation up to the date of disposal are transferred to the income statement as part of the profit or loss on disposal.
1.4 Basis of consolidation
Subsidiaries
Subsidiaries are those entities over whose financial and operating policies the Group has the power to exercise control. The Group
financial statements incorporate the assets, liabilities and results of operations of the Company and its subsidiaries. The results of
subsidiaries acquired and disposed of during a financial year are included from the effective dates of acquisition to the effective dates of
disposal. Where necessary, the accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized gains arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements.
1.5 Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
balance sheet, the acquiree'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. Where subsidiaries are acquired in stages the fair value of the identifiable assets, liabilities and contingent liabilities is
considered at the date of each acquisition of shares.
1.6 Impairment of assets
Assets other than biological assets, inventories, deferred tax assets and certain financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that their carrying amount may not be recoverable. Whenever the carrying amount of an asset
exceeds its recoverable amount (being the higher of its fair value less selling costs and its value in use), an impairment loss is
recognized in income.
The fair value less selling costs is the amount obtainable from the sale of an asset in an arm's length transaction while the value in
use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the
end of its useful life.
Recoverable amounts are estimated for individual assets or, if not possible, for the cash generating unit to which the assets belong.
Reversal of impairment losses recognized in previous years is recorded in income when there is an indication that the impairment losses
recognized for the assets no longer exist or have decreased.
An impairment loss recognized for goodwill is not reversed in a subsequent period.
1.7 Property, plant and equipment
Property, plant and equipment (other than freehold land) are stated at purchase price or production cost less accumulated depreciation
and impairment losses. Freehold land is carried at purchase cost.
Expenses for the repair of property, plant and equipment are usually charged against income when incurred. They are, however,
capitalized when they increase the future economic benefits expected to arise from the item of property, plant and equipment.
The costs of preparing land that is acquired by the Group for plantation of biological assets, either through purchase or lease, are
stated at cost and amortized over five years from the year when the first cane crop is planted.
Assets under construction are stated at cost. This includes cost of construction, plant and equipment and other direct costs. Assets
under construction are not depreciated until such time as the relevant assets are available for their intended use. Interest incurred on
borrowings is capitalized to the extent that borrowings do not exceed construction in progress. The credit is a reduction of interest
expense.
The estimated useful lives of the various identified asset categories are as follows:
Land and Buildings 25 years
Plant, machinery and Vehicles 5 to 10 years
Furniture and fittings 10 years
Computer equipment 5 years
Industrial facilities 10 years
Depreciation is calculated on a straight line basis starting from the month of purchase. Where the carrying amount of an asset is
greater than its estimated recoverable amount, it is written down immediately to its recoverable value.
1.8 Leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the
present value of the minimum lease payments. Each lease payment is allocated between the liability and the finance charges so as to achieve
a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other
long-term payables. The interest element of the finance cost is charged to the income statement over the lease period.
The leased assets are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and
equipment. If there is no reasonable certainty that ownership will be acquired by the end of the lease term, the asset is depreciated over
the shorter of the lease term and its useful life.
1.9 Intangible assets
License
Cost of acquiring licenses for the future purchase of sugar cane amortized over their contractual life of 20 years and allocated to the
cash generating units.
Goodwill
Goodwill represents the excess of the cost of a business combination over the interest in the fair value of identifiable assets,
liabilities and contingent liabilities acquired. Cost comprises the fair values of assets given, liabilities assumed and equity instruments
issued plus any direct costs of acquisition.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortised
but is tested annually for impairment.
1.10 Biological assets
The costs of preparing land that is acquired by the Group for plantation of biological assets, either through purchase or agricultural
partnership, are treated as non-current assets and amortized over five years as of such year when the first cane crop is planted. Sugar cane
reaches maturity within eighteen months of the plantation. Subsequent crops are harvested annually.
Sugar cane that has been planted but not harvested is carried at fair value as a current asset. The fair value of the sugar cane is
based on the market price of the estimated sugar cane volumes, net of harvesting, transportation and other point of sale costs. The fair
value of sugar cane younger than eighteen months (eighteen months being the age at which it becomes marketable) is also discounted at an
appropriate factor to account for any marketable volume. The unrealized gain or loss arising on the recognition of sugar cane at fair value
is recorded in the results for the period in which it arises.
1.11 Inventories
Finished goods - Sugar cane and ethanol
Inventories are stated at the lower of cost and net realizable value. Finished goods are valued at direct production cost. The cost of
production comprises the direct cost of raw materials purchased from third parties, the fair value of the Group's own grown sugar cane plus
the costs of harvesting, transportation and other point of purchase costs, the direct manufacturing expenses, an appropriate allocation of
material and manufacturing overhead and an appropriate share of the depreciation and write-downs of assets used for production.
If the purchase or production cost is higher than the net realizable value, inventories are written down to net realizable value. Net
realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
Industrial and Agricultural warehouse materials
Spare parts and consumables are valued at the lower of cost and net realizable value. Net realizable value is the estimated selling
price of spare parts that are no longer required for the business.
1.12 Deferred taxation
Deferred income tax is provided in full using the balance sheet liability method, on the tax losses carried forward and on temporary
differences between the carrying amount of assets and liabilities for financial reporting purposes and tax basis.
Deferred taxes are not calculated on the following temporary differences:
Initial recognition of goodwill is not deductible for tax purposes; and
Initial recognition of assets or liabilities that are not a business combination and affect neither accounting nor taxable profit.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and
liabilities, using tax rates in force at the balance sheet date. A deferred tax asset is recognized only to the extent that it is probable
that future taxable profits will be available against which the unused tax losses and credits can be offset. Deferred tax assets are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.
1.13 Government loans
The Brazilian Federal Government has granted long term loans to a number of subsidiaries. These loans are offset by government bonds
with the same maturity as the loans. The Group therefore pays only the interest on these loans; at maturity the value of the bonds will be
equal to the loan.
The asset and liability have been disclosed separately in these accounts; in other financial assets and other financial liabilities
respectively. Both balances are non-current and are recognized in accordance with the accounting policy for financial instruments.
1.14 Provisions
Provisions are recognized when the business has a present legal or constructive obligation as a result of past events and an outflow of
resources will likely be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are discounted
where the effect will be material.
1.15 Onerous contracts
The Group recognizes a provision for onerous contracts when the expected benefits to be derived from a contract are lower than the
unavoidable costs of meeting the obligations under the contract.
1.16 Revenue recognition
Revenue comprises only net invoiced sales of goods. Revenue is recognized when it is probable that the economic benefits associated with
a transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Sales are recognized net of sales tax and
discounts. Revenue from sales of goods is recognized when delivery has taken place and the transfer of risks and rewards has been
completed.
1.17 Employee costs
Employee's salaries and social security costs are charged to the income statement in the year to which they relate. There is no pension
scheme for either employees or directors.
1.18 Warrants
The group has issued warrants giving the holders the right to purchase one common share at a fixed price at a future date. These
warrants have been classified as equity instruments and have accordingly been recognized at the value of the consideration received in
accordance with IAS 32: "Financial instruments: Presentation".
1.19 Financial assets
Financial assets are classified into the following specified categories: financial assets at "fair value through profit or loss"
(FVTPL), and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the
time of initial recognition. The Group does not hold any "held-to-maturity" investments or "available for sale" (AFS) financial assets.
Financial Assets at Fair Value through profit or loss
This category comprises only in-the-money derivatives (see Financial liabilities section for out-of-money derivatives). They are carried in
the balance sheet at Fair Value with changes in Fair Value recognised in the consolidated income statement in the finance income or expense
line. The group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at Fair Value
through profit or loss.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are
classified as loans and receivables. Loans and receivables are stated at amortised cost.
Trade receivables are stated at amortised cost. Bad debts are written off to the income statement when they are identified. Where the
value of trade receivables is dependent on a future market price which will not be available until after the fiscal period of the financial
statement, the value will be based on information available relating to the agreed future date when the price will be determined.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank deposits with maturity within three months or less of the balance sheet date,
other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk
of changes in value and bank overdrafts. In the balance sheet, bank overdrafts where there is no right of set off are included in borrowings
within current liabilities.
1.20 Financial liabilities and equity instruments
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was
acquired. The Group's accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises only out of-the-money derivatives. They are carried in the balance sheet at fair value with changes in fair
value recognised in the income statement in the finance income or expense line.
The Group uses derivative financial instruments such as interest rate swaps to hedge its risks associated with foreign exchange rate or
interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value with subsequent movements in fair
value taken to the income statement.
Other than these derivative financial instruments, the Group does not have any liabilities held for trading nor has it designated
financial liabilities as being at fair value through profit or loss. The fair value for the Group's interest rate swaps derivatives is based
on broker quotes for similar instruments. The Group does not hold or issue derivatives for speculative purposes.
Other financial liabilities
Trade payables under non fixed price contracts are valued on the basis of the information available relating to the future date when the
price will be determined. Advances received under fixed price contracts are stated at amortized cost. Trade payables are not
interest-bearing and are stated at their nominal value.
Bank borrowings and preference shares are initially recognised at the amount advanced net of any transaction costs directly attributable
to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest
rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the balance sheet. "Interest expense" in this context includes initial transaction costs or premiums payable on redemption, as
well as any interest or coupons payable while the liability is outstanding.
When borrowings are repurchased or settled before maturity, any difference between the amount repaid and the carrying amount is
recognized immediately in the income statement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Compound instruments
The compound parts of compound instruments issued by the Group are classified separately as financial liabilities and equity in
accordance with the substance of the contractual arrangement. At the date of issue the fair value of the liability component is estimated
using the prevailing market interest rate for a similar non convertible instrument. This amount is recorded as a liability on an amortised
cost basis using the effective interest rate method until extinguished upon conversion or at the instrument's maturity date. The equity
component is determined by deducting the amount of the liability component from the fair value of the instrument as a whole. This is
recognised and included in equity, net of income tax and is not subsequently re-measured.
Issue costs are apportioned between the liability and equity components of the convertible loan notes based on their relative carrying
amounts at the date of issue. The portion relating to the equity component is charged directly against equity.
1.21 Share-based payments
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the
consolidated income statement over the vesting period. 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 that eventually vest. Market vesting conditions are factored into the fair value of the options granted.
As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition. Where the terms and conditions of options are
modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also
charged to the consolidated income statement over the remaining vesting period.
The Directors are of the opinion that the Black Scholes model is the most appropriate due to its simplicity and is deemed the most
accurate when taking into account the expected timing of the exercise of options. The options model requires highly subjective assumptions
to be made and the Directors draw upon a variety of external sources to aid them in the determination of appropriate data to use in such
calculations.
2. SEGMENTAL INFORMATION
Infinity Bio-Energy Group is divided into two segments: production of Ethanol and Sugar. The plant and the process of production utilize
the same raw material, and up to the production of sugar cane juice, the production process and industrial equipments are the same.
Revenues can be directly attributable to each segment. Unallocated items comprises other financial information which cannot be allocated
to a specific segment because the production process is common up to the production of cane juice and any assignment to segments would be
arbitrary. Capital expenditure is the total cost incurred during the period to acquire assets that are expected to be used for more than one
period. Eliminations consist of those inter-group transactions associated with acquisitions of business combinations.
The Group's primary reporting format for reporting segment information is business segments.
6 Months ended September 30, 2008
Period ended
September 30, 2008 - US$ 000
Business segments Ethanol Sugar Eliminations Total
Revenues - External sales 69,244 20,287 887 90,418
Revenues - Internal sales 742 - (742) -
Total revenues 69,986 20,287 145 90,418
Gross loss by segment (15,306) (4,437) (32) (19,775)
Movement in fair value of 8,533
biological assets
Administration expenses (31,286)
Other operating income (1,062)
(expenses)
Financial income 34,377
Financial expenses (92,378)
Loss before tax (101,591)
Taxation income (expense) 15,585
Net Loss for the period (86,006)
Period ended
September 30, 2007 - US$ 000
Business segments Ethanol Sugar Eliminations Total
Revenues - External sales 40,895 15,874 81 56,850
Revenues - Internal sales 8,171 2,246 (10,417) -
Total revenues 49,066 18,120 (10,336) 56,850
Gross profit/(loss) by segment 1,144 422 (241) 1,325
Movement in fair value of 4,349
biological assets
Administration expenses (12,907)
Other operating income (657)
(expenses)
Financial income 12,731
Financial expenses (11,725)
Loss before tax (6,884)
Taxation income (expense) 344
Net Loss for the period (6,540)
3. ACQUISITION OF SUBSIDIARIES
Cridasa's new acquisition of shares
On June 17th, 2008 the Group acquired an additional 42,31% of Cridasa for cash consideration of US$ 16,983,499. A discount of US$ 1,655,003
was given on this price, regarding to the first share acquisitions
made by the group.
The goodwill on this subsequent acquisition was US$ 12,833,954. Infinity's holding in Cridasa was 99,56% after this acquisition.
Fair value of assets acquired:
Cridasa: net assets at June 30, 2008
Book Value Fair value
Fair value
Adjustment
US$ 000 US$ 000
US$ 000
Property, plant and equipment 21,756 -
21,756
Inventories 3,601 -
3,601
Advance to supliers 2,738 -
2,738
Trade and other receivables 6,877 -
6,877
Total assets acquired 34,972 -
34,972
Total liabilities 32,477 -
32,477
Net assets 2,495 -
2,495
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:
US$ 000
Cash consideration paid 14,461
Fair value of assets acquired 2,495
Goodwill 11,966
4. GOODWILL
US$'000
At April 1, 2008 322,316
Business combinations 11,966
Discount obtained on Cridasa first acquisition as of 2006 (1,655)
Adjustment for increase in controlling interest (a) (7,199)
Write-off of investment projects (3,097)
Foreign currency adjustments (18,298)
At September 30, 2008 304,033
US$'000
At April 1, 2007 126,314
Business combinations 36,594
Foreign currency adjustments 18,120
At September 30, 2007 181,028
(a) Relates to increase in controlling interest in Central Energ?ca Para? and Boniek.
5. BIOLOGICAL ASSETS
Non Current - Sugar Cane roots and planting costs
US$ 000
Cost
At 1 April 2008 58,479
Addition 8,380
Disposals (34)
Translation Adjustment (6,086)
Total at 30 September 2008 60,739
Amortisation
At 1 April 2008 (9,269)
Charge for the period (5,100)
Translation adjustment 1,484
Total at 30 September 2008 (12,885)
Net book value at 30 September 2008 47,854
Net book value at March 31, 2008 49,210
Cost
At 1 April 2007 33,890
Addition 6,554
Disposals (3,608)
Translation Adjustment 4,029
Total at 30 September 2007 40,865
Amortisation
At 1 April 2007 (1,083)
Charge for the period (4,913)
Translation adjustment (426)
Total at 30 September 2007 (6,422)
Net book value at 30 September 2007 34,443
Current - Fair value of growing sugar cane
US$ 000
At 1 April 2008 7,383
Movement in fair value of biological assets 8,533
Cane harvested (13,273)
Translation Adjustment (84)
Balance at 30 September 2008 2,559
At 1 April 2007 6,091
Movement in fair value of biological assets 4,349
Cane harvested (7,780)
Translation Adjustment 517
Balance at 30 September 2007
3,177
Balance at 31 March 2008 7,383
6. NET FINANCING COSTS
1 April 2008 - 30 1 April 2007 - 30 1 April 2007 - 31
September 2008 September 2007 March 2008
US$'000 US$'000 US$'000
Financial income
Bank interest received 1,425 7,517 4,025
Exchange rate variation income 29,476 5,214 28,878
Other 3,476 - 18,728
Total 34,377 12,731 51,631
Financial expense
Bank interest paid 20,967 6,396 29,515
Unwinding of discount on
convertible loan notes 4,618 - -
Provisional Contribution on
Financial Activities - CPMF - 904 2,891
(See below)
Financial Interest on Taxes
and Social Contributions (See 1,222 931
below)
Exchange rate variation 60,469 3,494 27,599
expense
Other 5,102 - 6,167
Total 92,378 11,725 66,172
Provisional Contribution on Financial Activities - CPMF refers to a 0.38 % tax levied on all payments and transfers. This is collected
directly by the banks and paid to the Federal Government. This contribution was extinguished on December, 2007.
Financial Interest on Taxes and Social Contributions refers to overdue interest payable on taxes and social contributions in subsidiary
companies acquired during the period. These amounts have been discussed with the relevant tax authorities and a repayment schedule has been
agreed.
7. EARNINGS PER SHARE
30 September 2008 30 September 2007 31 March 2008
Loss for the period/year - US$ (86,006) (6,540) (51,123)
000
Basic weighted average number 105,648,812 78,551,421 88,030,404
of ordinary shares
Cents Cents Cents
Basic loss per share - cents (81.41) (8.33) (58.07)
Diluted loss per share - cents (81.41) (8.33) (58.07)
Shares Shares Shares
Basic weighted average number
of ordinary shares 105,648,812 78,551,421 88,030,404
The following instruments which in issue when could have a potentially dilutive effect on the loss per share if they are exercised in
the future.
30 September 2008 30 September 2007 31 March 2008
Warrants 72,034,536 91,945,011 72,261,861
Units (each unit comprising 6,020,000 6,020,000 6,020,000
are share and two cents)
Share options 13,647,306 9,831,160
8. ISSUED CAPITAL
Description Number of common Number of preference Par value of share - US$ - Total
shares shares US$
Authorised
As at March 15, 2006 12,000 1.0000 12,000
Sub - division on March 24, 8,000,000 0.0015 12,000
2006
Increase on March 24, 2006 209,640,000 0.0015 314,460
Increase on March 24, 2006 2,500,000 0.0001 250
Increase on May 15, 2006 279,920,000 0.0015 419,880
At December 31, 2006 and 2007 497,560,000 2,500,000 746,590
Issued
Common shares issued on March 12,000 1.0000 12,000
15, 2006
Shares sub divided on March 8,000,000 0.0015 12,000
24, 2006
Common shares issued and fully 500,000 0.0015 750
paid on March 24, 2006
Common shares issued and fully 13,000,000 0.0015 19,500
paid on May 15, 2006
Common shares issued and fully 86,000,000 0.0015 129,000
paid on May 23, 2006
Common shares redeemed on (42,703,312) 0.0015 (64,055)
September 28, 2006
Common shares issued and fully 13,839,248 0.0015 20,759
paid on March 31, 2007
At March 31, 2007 78,635,936 117,954
78,635,936 117,965
Common shares issued and fully 1,739,130 0.0015 2,609
paid on September 28, 2007
Common shares issued and fully 14,423,077 0.0015 21,635
paid on October 25, 2007
Common shares issued on 3,500,000 0.0015 5,250
October 25, 2007
Common shares issued and fully 5,233,073 0.0015 7,850
paid on February 8 , 2008
Common shares issued on March 487,325 0.0015 731
5, 2008
At March 31, 2008 104,018,541 156,039
Common shares issued and fully 3,390,222 0.0015 5,085
paid on July 4 , 2008
At September 30, 2008 107,408,763 161,124
9. CHANGE IN EQUITY
Share capital Share premium Capital redemption Warrant reserve Share option reserve Equity reserve
Foreign currency Retained earnings Total
reserve
translation reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
US$'000 US$'000 US$'000
Six Months period ending
September 30, 2007
At April 1, 2007 118 221,305 64 45,972
12,222 (1,683) 277,998
Common shares issued on 2 9,998
10,000
September 28, 2007
Foreign currency translation
29,086 29,086
adjustment
Net loss for the period
(6,359) (6,359)
At September 30, 2007 120 231,303 64 45,972 - -
41,308 (8,042) 310,725
Six Months period ending March
31, 2008
Common shares issued on 22 64,742
64,764
October 25, 2007
Share options issued on 10,236
10,236
October 25,2007
Common shares issued on 13 26,832
26,845
February 8, 2008
Common shares issued on March 1
1
5, 2008
Expenses of issuing shares (2,215)
(2,215)
Warrants redeemed during the (9,842)
(10,826) (20,668)
year
Foreign currency translation
19,726 19,276
adjustment
Recognition of equity 42,020
42,020
component of convertible loan
notes
Employee share based payment
13,258 13,258
scheme
Net loss for the period
(43,017) (43,017)
At March 31, 2008 156 320,662 64 36,130 10,236 42,020
60,584 (50,312) 419,540
Six Month period ending
September 30, 2008
Common shares issued on July 5 19,480
19,485
4, 2008
Expenses of issuing shares (852)
(852)
Warrants redeemed (113)
(125) (238)
Foreign currency translation
(25,441) (25,441)
adjustment
Equity reserve 3,709
3,709
Employee share based payment
3,858 3,858
scheme
Net loss for the period
(83,866) (83,866)
At September 30, 2008 161 339,290 64 36,017 10,236 45,729
35,143 (130,442) 336,198
Legal and Administrative Details
Registered Office
Canon's Court
22 Victoria Street
Hamilton HM 12
Bermuda
Company Number
Registration Number: 38119
Company Secretary
Appleby Corporate Services (Bermuda) Ltd.
Registrars
Capita Registrars (Jersey) Ltd
Victoria Chambers
Liberation Square
1/3 The Esplanade
St Helier - Jersey
AIM Nominated Adviser and Broker
Collins Stewart Europe Limited
9th Floor
88 Wood Street
London EC2V 7QR
Auditors
BDO Stoy Hayward LLP
Emerald House, East Street, Epsom, Surrey, KT17
1HS
UK
This information is provided by RNS
The company news service from the London Stock Exchange
END
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