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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Astek | LSE:AKG | London | Ordinary Share | GB00B1B9C846 | ORD 0.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.65 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMAKG RNS Number : 3514X Astek Group PLC 12 August 2009 Astek Group plc / Epic: AKG / Index: AIM / Sector: Medical Supplies 12 August 2009 Astek Group plc ('The Company' or 'Astek') Astek Group Plc, the AIM listed dental equipment designer, manufacturer and distributor announces its results for the year ended 31 March 2009. Overview * Turnover up 25% to GBP1,371,297 (2008: GBP1,096,213) * Pre tax loss decreased to GBP155,287 (2008: loss GBP552,651) * No exceptional costs * Cash balance of GBP95,678 at 31 March 2009 (2008: GBP215,466) * Sales of Pro-Tip have recovered strongly * more than 50% up on year ended 31 March 2008 although still not back to the level of year ended 31 March 2007 * New product InSafe(TM) launched in UK, Eire and Germany and other distributorships under negotiation. * The auditors' report contains an emphasis of matter in relation to going concern but gives an unqualified audit opinion CHAIRMAN'S STATEMENT The Group's results for the year ended 31 March 2009 show turnover up 25% to GBP1,371,297 (2008:GBP1,096,213) and gross margin remaining steady at 43%. The pre-tax loss has reduced to GBP155,287 (2008: GBP552,651). However the year has also been a difficult one for Astek with various factors negatively impacting these results including the general downturn in the economy which has also affected the dental sector of the market. Much of Astek's production is sourced from the Far East several months ahead of its eventual sale and priced and paid for in US dollars. The Company's major market for sales after the UK is the USA. The Group has hedged the dollar and euro to the best of its limited financial ability, but the strength of the US dollar and in particular its volatility has materially affected the results. The management team has responded by revising the price list and selling in dollars and euros wherever possible and appropriate. inSafe(TM) has been launched only in UK, Eire and Germany to date in order to ensure that processes are acceptable. Other distributors will be signed up on a country by country basis but only when management is sure they are suitable partners and able to service their respective territories satisfactorily. The performance of existing distributors for other products is kept under constant review. I referred last year to a fall in sales of Pro-Tip , our proprietary product. I am pleased to say that sales have recovered strongly and in FY2009 were more than 50% up on FY2008 although still not back to the level of FY2007. We are working hard to try and drive sales back to where they were and then beyond. Work also continues on strengthening our new product pipeline and further new product launches are planned in the coming months. During the year the Company was awarded a grant for Research and Development equivalent to 60% of eligible costs from the North West Development Agency (NWDA). During the year GBP52,981 was received in respect of revenue expenditure and GBP19,050 in respect of capital expenditure. Further grant funding is available in principle from the NWDA. The Company is assessing the projects under way at present and will apply for further grants if the Board considers they are eligible. We are fortunate in having a small but dedicated team and I would like to thank every member of staff for their continued efforts on Astek's behalf. Details of all our products and further information on the Group can be found on our website at www.astekgroup.co.uk. Jeffrey Rubins Chairman 12 August 2009 CONSOLIDATED INCOME STATEMENT +-------------+--------+--------+-------------+--------+-----------+ | | | | Year | | Year | +-------------+--------+--------+-------------+--------+-----------+ | | | | ended | | ended | +-------------+--------+--------+-------------+--------+-----------+ | | | | 31 | | 31 | | | | | March | | March | | | | | 2009 | | 2008 | +-------------+--------+--------+-------------+--------+-----------+ | | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | | | | GBP | | GBP | +-------------+--------+--------+-------------+--------+-----------+ | Revenue | | | 1,371,297 | | 1,096,213 | | | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Cost | | | (777,714) | | (623,771) | | of | | | | | | | sales | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Gross | | | 593,583 | | 472,442 | | Profit | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Trading | | | (742,177) | | (900,965) | | costs | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Non | | | 2,580 | | 2,580 | | trading | | | | | | | income | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Operating | | | (146,014) | | (425,943) | | loss | | | | | | | before | | | | | | | exceptional | | | | | | | items | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Exceptional | | | - | | (137,212) | | expenses | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Operating | | | (146,014) | | (563,155) | | loss | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Investment | | | 3,489 | | 24,680 | | revenue - | | | | | | | interest | | | | | | | receivable | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Finance | | | (12,762) | | (14,176) | | costs | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Loss | | | (155,287) | | (552,651) | | before | | | | | | | taxation | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Tax on | | | 88,783 | | - | | loss | | | | | | | on | | | | | | | ordinary | | | | | | | activities | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Retained | | | (66,504) | | (552,651) | | loss for | | | | | | | the year | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | | | | | | | +-------------+--------+--------+-------------+--------+-----------+ | Loss | | | 0.1p | | 0.8p | | per | | | | | | | share-basic | | | | | | | and diluted | | | | | | | (in pence) | | | | | | +-------------+--------+--------+-------------+--------+-----------+ STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY CONSOLIDATED +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | | | | Share | Share | Reverse | Profit | Total | | | | | capital | premium | | | equity | | | | | | account | acquisition | and | | | | | | | | reserve | loss | | | | | | | | | account | | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | | | | GBP | GBP | GBP | GBP | GBP | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | | | | | | | | | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | At 1 April 2007 | 350,000 | 823,319 | 966,889 | (1,019,220) | 1,120,988 | | | | | | | | +--------------------------+---------+---------+-------------+-------------+-----------+ | Adjustment for share | | | | | | | based payments | - | - | - | 44,724 | 44,724 | +--------------------------+---------+---------+-------------+-------------+-----------+ | Loss | | | - | - | - | (552,651) | (552,651) | | for | | | | | | | | | year | | | | | | | | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | | | | | | | | | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ | At 31 March 2008 | 350,000 | 823,319 | 966,889 | (1,527,147) | 613,061 | | | | | | | | +--------------------------+---------+---------+-------------+-------------+-----------+ | Adjustment for share | - | - | - | 19,731 | 19,731 | | based payments | | | | | | +--------------------------+---------+---------+-------------+-------------+-----------+ | Loss for year | - | - | - | (66,504) | (66,504) | +--------------------------+---------+---------+-------------+-------------+-----------+ | At 31March 2009 | 350,000 | 823,319 | 966,889 | (1,573,920) | 566,288 | +--------+--------+--------+---------+---------+-------------+-------------+-----------+ CONSOLIDATED BALANCE SHEET +-------------+--------+--------+-------------+-------------+ | | | | At 31 | At 31 | | | | | March | March | | | | | 2009 | 2008 | +-------------+--------+--------+-------------+-------------+ | Assets | | | GBP | GBP | +-------------+--------+--------+-------------+-------------+ | Non-current | | | | | | assets | | | | | +-------------+--------+--------+-------------+-------------+ | Goodwill | | | 105,837 | 105,837 | +-------------+--------+--------+-------------+-------------+ | Other | | | 107,504 | 102,658 | | intangible | | | | | | assets | | | | | +-------------+--------+--------+-------------+-------------+ | Property, | | | 209,516 | 203,673 | | plant and | | | | | | equipment | | | | | +-------------+--------+--------+-------------+-------------+ | | | | 422,857 | 412,168 | +-------------+--------+--------+-------------+-------------+ | Current | | | | | | assets | | | | | +-------------+--------+--------+-------------+-------------+ | Inventories | | | 142,317 | 137,654 | +-------------+--------+--------+-------------+-------------+ | Trade | | | 302,179 | 258,024 | | and | | | | | | other | | | | | | receivables | | | | | +-------------+--------+--------+-------------+-------------+ | Cash | | | 95,678 | 215,466 | | and | | | | | | cash | | | | | | equivalents | | | | | +-------------+--------+--------+-------------+-------------+ | | | | 540,174 | 611,144 | +-------------+--------+--------+-------------+-------------+ | Total | | | 963,031 | 1,023,312 | | assets | | | | | +-------------+--------+--------+-------------+-------------+ | | | | | | +-------------+--------+--------+-------------+-------------+ | | | | | | +-------------+--------+--------+-------------+-------------+ | | | | | | +-------------+--------+--------+-------------+-------------+ | Current | | | | | | liabilities | | | | | +-------------+--------+--------+-------------+-------------+ | Trade | | | (159,954) | (231,101) | | and | | | | | | other | | | | | | payables | | | | | +-------------+--------+--------+-------------+-------------+ | Borrowings | | | (107,652) | (25,006) | | | | | | | +-------------+--------+--------+-------------+-------------+ | | | | (267,606) | (256,107) | +-------------+--------+--------+-------------+-------------+ | Non-current | | | | | | liabilities | | | | | +-------------+--------+--------+-------------+-------------+ | Borrowings | | | (129,137) | (154,144) | +-------------+--------+--------+-------------+-------------+ | Total | | | (396,743) | (410,251) | | liabilities | | | | | +-------------+--------+--------+-------------+-------------+ | Net | | | 566,288 | 613,061 | | assets | | | | | +-------------+--------+--------+-------------+-------------+ | | | | | | | Equity | | | | | +-------------+--------+--------+-------------+-------------+ | Share | | | 350,000 | 350,000 | | capital | | | | | +-------------+--------+--------+-------------+-------------+ | Share | | | 823,319 | 823,319 | | premium | | | | | | account | | | | | +-------------+--------+--------+-------------+-------------+ | Reverse | | | 966,889 | 966,889 | | acquisition | | | | | | reserve | | | | | +-------------+--------+--------+-------------+-------------+ | Retained | | | (1,573,920) | (1,527,147) | | earnings | | | | | +-------------+--------+--------+-------------+-------------+ | Total | | | 566,288 | 613,061 | | equity | | | | | +-------------+--------+--------+-------------+-------------+ CONSOLIDATED CASH FLOW STATEMENT +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | Year | | Year | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | ended | | ended | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | 31 | | 31 | | | | | | March | | March | | | | | | 2009 | | 2008 | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | GBP | | GBP | +-------------+--------+--------+--------+-----------+--------+-----------+ | Cash | | | | (173,939) | | (333,178) | | absorbed | | | | | | | | by | | | | | | | | operations | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Interest | | | | (12,762) | | (14,176) | | paid | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Corporation | | | | 88,783 | | - | | tax refund | | | | | | | | received | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Net | | | | (97,918) | | (347,354) | | cash | | | | | | | | absorbed | | | | | | | | from | | | | | | | | operating | | | | | | | | activities | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | | | | | Investing | | | | | | | | activities | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Interest | | | | 3,489 | | 24,680 | | received | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Purchases | | | | (57,182) | | (63,161) | | of | | | | | | | | intangible | | | | | | | | fixed | | | | | | | | assets | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Grants | | | | 19,050 | | - | | received | | | | | | | | in | | | | | | | | respect | | | | | | | | of | | | | | | | | intangible | | | | | | | | assets | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Purchases | | | | (44,866) | | (123,702) | | of | | | | | | | | property, | | | | | | | | plant and | | | | | | | | equipment | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Net | | | | (79,509) | | (162,183) | | cash | | | | | | | | used | | | | | | | | in | | | | | | | | investing | | | | | | | | activities | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Financing | | | | | | | | activities | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Invoice | | | | 82,646 | | | | discounting | | | | | | | | finance | | | | | | | | advances | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Bank | | | | (25,007) | | (25,006) | | loans | | | | | | | | repaid | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Net | | | | 57,639 | | (25,006) | | cash | | | | | | | | generated | | | | | | | | from/(used | | | | | | | | in) | | | | | | | | financing | | | | | | | | activities | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | | | | | (119,788) | | (534,543) | | Net | | | | | | | | decrease | | | | | | | | in cash | | | | | | | | and cash | | | | | | | | equivalents | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Cash | | | | 215,466 | | 750,009 | | and | | | | | | | | cash | | | | | | | | equivalents | | | | | | | | at | | | | | | | | beginning | | | | | | | | of year | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ | Cash | | | | 95,678 | | 215,466 | | and | | | | | | | | cash | | | | | | | | equivalents | | | | | | | | at end of | | | | | | | | year | | | | | | | +-------------+--------+--------+--------+-----------+--------+-----------+ 1Status of this announcement The financial information is unaudited and does not constitute statutory accounts within the meaning of Section 240(5) of the Companies Act 1985 ('the Act'), but have been extracted there from. The financial statements for the year ended 31 March 2008 have been filed with the Registrar of Companies and contain no statement under Sections 237(2) or (3) of the Act. The auditors have reported their opinion on the financial statements for the year ended 31 March 2009 today. The auditors gave an unqualified opinion, and contain no statement under Sections 237(2) or (3) of the Act. The auditors report included the following paragraph by way of emphasis of matter - Emphasis of matter-going concern In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures in note 1 to the financial statements concerning the Group's ability to continue as a going concern. The Company incurred a net loss of GBP66,504. This result depleted the Group's available cash resources and this, together with the other matters explained in note 1 to the financial statements, indicates the existence of a material uncertainty which may affect the Group's ability to continue as a going concern. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern. The relevant section of note 1 referred to is reproduced below - Going concern The financial statements have been prepared on the going concern basis which assumes that the Group and the Company will have sufficient financial resources to enable it to continue trading for the foreseeable future. Since the initial placing of the Company's shares on AIM in October 2006 the Group's cash resources were unexpectedly depleted by a combination of factors, including: * delays in the process of bringing one of the Group's key products to market (the inSafe(TM) syringe); * a temporary downturn in the sales of another key product (Pro-Tip ) following a change in ownership of the distributor of this product; and * the professional costs of an aborted acquisition. The Group is close to achieving a cash break even position but until that time the available cash resources remaining are required to enable it to continue trading. The directors took a number of positive steps to secure the position of the Group and on the basis of these measures, and others to be implemented this year, consider it appropriate that the financial statements should be prepared on the going concern basis. These measures include: * The directors' ongoing agreement to a reduction in the level of their remuneration by 50% for last Financial Year which will continue until cash breakeven is achieved; * Further reductions in professional fees A number of new products are being introduced to the market, distributorships have been agreed for the inSafe(TM) in UK, Eire and Germany while more in other countries are under negotiation. The provider of the Invoice Discounting Facility granted last year has agreed an increase in the cap to GBP300,000 in order to cope with the volumes of inSafe(TM) sales expected later this year. Based on their forecasts, the directors believe that the combination of these factors will provide sufficient working capital to enable the Company to continue trading. However, these forecasts are necessarily based on the achievement of timing and targets some of which, although believed to be reasonable by the directors, are nevertheless outside the Group's direct control. If significant delays or underperformance by distributors were to take place, these may render the Group's cash resources insufficient. If, as a result, the Group were to be unable to continue as a going concern then adjustments would be necessary to write assets down to their recoverable amounts, non-current assets and liabilities would be re-classified as current assets and liabilities and provisions would be required for any costs associated with closure. The financial statements have not yet been filed with the Registrar of Companies. Copies of the Report and Financial Statements for the year ended 31 March 2009 will be sent to shareholders by 21 August 2009, and will be available for collection from 24 August 2009. 2. Summary of significant accounting policies 2.1Basis of consolidation The consolidated financial information incorporates the financial information of Astek Group plc ("the Company"), and all entities controlled by the Company (its subsidiaries). On 25 October 2006 the Company became the legal parent company of Astek Innovations Limited in a share for share transaction. Astek Group plc was a non-trading cash shell at that date. Due to the relative size of the companies, Astek Innovations Limited shareholders became the majority holders of the enlarged share capital. The Board of Astek Innovations Limited also replaced the Board of Astek Group plc. Accordingly, the substance of the combination was that Astek Innovations Limited acquired Astek Group plc in a reverse acquisition. The directors have adopted reverse acquisition accounting as required by IFRS 3 in accounting for this transaction. 2.2 Revenue recognition Sales of goods represent the amounts invoiced during the year exclusive of Value Added Tax ("VAT").venue is measured at the fair value of the consideration received or receivable (excluding VAT and discounts) derived from the provision of goods and services to customers during the period. The Group derives revenue from the supply of dental equipment and products. The Group recognises the revenue from the sale of goods upon delivery. Where appropriate the Group makes a provision for estimated liabilities for returns under the standard acceptance terms at the time the revenue is recognised. Payment terms are agreed separately with each customer. 2.3 Research and development Research expenditure is written off in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the Group is expected to benefit from the project which is estimated to be five years unless separately stated. 2.4 Other intangible assets When an acquisition is made, a review is undertaken to identify separately identifiable non-monetary assets that meet the definition under IAS 38 "Intangible assets". No acquisitions have been made in the period since transition to IFRS. The costs of the initial registration of patents and trademarks are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over the estimated useful life of 4 years. 2.5 Goodwill Goodwill arising on consolidation represents the excess of the cost of the acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the profit or loss. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash generating units expected to benefit from the synergies of the combination. Cash generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. Goodwill arising on acquisition before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date. The directors have taken advantage of the transitional provisions set out in IFRS1 and have not restated business combinations arising before 1 April 2006 in accordance with IFRS. 2.6 Plant and equipment and depreciation Plant and equipment is stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost less estimated residual value over their expected useful lives at the following rates: Plant and equipment 15% reducing balance for all additions after 1 October 2004 and 25% straight line for additions prior to that date, except for computer equipment which is 25% straight line. Fixtures and fittings 15% reducing balance. 2.7 Impairment of non current assets (excluding goodwill) At each balance sheet date, the Group reviews the carrying amounts of its non current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indications exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. 2.8Investment in subsidiary company The exemption given in IFRS 1 has been applied with regards to the carrying value of the investment in subsidiary in the Company's separate financial statements. This investment is included at its deemed cost, being the previous UK GAAP carrying amount. This carrying amount is equal to the nominal value of shares issued by Astek Group plc in exchange for shares in Astek Innovations Limited together with the deemed fair value of employee services incurred through share options issued to employees of the subsidiary. 2.9Inventories Inventories are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. 2.10 Operating lease agreements Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. 2.11 Foreign currencies Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. All revaluation differences and realised foreign exchange differences are taken to the profit and loss account. 2.12 Exceptional items Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full understanding of the Group's financial performance. 2.13 Cash and cash equivalents Cash and cash equivalents in the balance sheet are included at cost and comprise cash at bank, cash in hand and short term deposits with an original maturity of three months or less. 2.14 Trade receivables Trade receivables do not carry any interest and are stated at their fair value as reduced by appropriate allowances for estimated irrecoverable amounts. 2.15 Trade payables Trade payables are not interest bearing and are stated at their fair value and subsequently measured at amortised cost using the effective interest rate method. 2.16 Equity instruments Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. 2.17 Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. 2.18 Share based payments The Group has issued share options and warrants to directors and certain employees. The Group has applied the requirement of IFRS 2 "Share Based Payments" to determine the fair value of employee services received in exchange for the grant of options which is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. This estimate is revised at each balance sheet date and the difference is charged or credited to the profit and loss account, with a corresponding adjustment to equity. Where share options are granted by the parent company in consideration for services rendered by employers of the subsidiary company the fair value of the options granted is added to the carrying value of the investment in the subsidiary company and to equity (share option reserve). 2.19Financial Instruments Qualitative and quantitative information about exposure to risks arising from financial instruments are set out in the disclosure notes in accordance with IFRS 7, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. 3. Critical accounting judgements and key sources of estimation uncertainty Critical judgements in applying the Group's accounting policies In the process of applying the Group's accounting policies, which are described in note 2, management has made the following judgements that have the most significant effect on the amounts recognised in the financial information. Impairment of goodwill The Group tests annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the goodwill is determined from value in use calculations. The key assumptions and estimates for the value in use calculations are those regarding the discount rates, growth rates and expected changes to sales during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the cash-generating units. A pre tax discount rate of 17% was assumed for the purpose of the calculation. The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next three years and extrapolates cash flows for the following three years assuming no growth from that date. A substantial increase in the pre-tax discount rate would not impact the results of the review. A decrease in forecast earnings of 83% in years two and three onwards would result in a provision for impairment in value of goodwill being necessary. Share Based Payments The Group has made awards of options on its un-issued share capital to certain directors and employees as part of their remuneration package. The valuation of these options involved making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and interest rates. 4. Revenue The revenue and loss are attributable to the one principal activity of the Group and relates solely to sales originated in the United Kingdom. An analysis of revenue by geographical market by destination is given below: +---------+--------+--------+-----------+--------+-----------+ | | | | 2009 | | 2008 | +---------+--------+--------+-----------+--------+-----------+ | | | | GBP | | GBP | +---------+--------+--------+-----------+--------+-----------+ | United | | | 622,212 | | 540,661 | | Kingdom | | | | | | +---------+--------+--------+-----------+--------+-----------+ | Europe | | | 256,433 | | 175,825 | +---------+--------+--------+-----------+--------+-----------+ | United | | | 340,317 | | 197,609 | | States | | | | | | | of | | | | | | | America | | | | | | +---------+--------+--------+-----------+--------+-----------+ | Rest | | | 152,335 | | 182,118 | | of | | | | | | | World | | | | | | +---------+--------+--------+-----------+--------+-----------+ | | | | 1,371,297 | | 1,096,213 | +---------+--------+--------+-----------+--------+-----------+ The directors consider the Group to be a single operating segment with all revenue originated in the United Kingdom from a single activity. It does not separately report internally the results, assets or revenues derived from sales to different geographical markets. 5. Exceptional expenses There were no exceptional expenses incurred in the year ended 31 March 2009. Exceptional expenses in the year ended 31 March 2008 relate to professional costs in connection with a proposed takeover of an independent third party which was ultimately aborted. 6. Loss per share The calculation of loss per share is based on the loss on ordinary activities after taxation and the weighted average number of shares as set out below: +--------------+--------+--------+------------+--------+------------+ | | | | Year | | Year | +--------------+--------+--------+------------+--------+------------+ | | | | ended | | ended | +--------------+--------+--------+------------+--------+------------+ | | | | 31 | | 31 | | | | | March | | March | | | | | 2009 | | 2008 | +--------------+--------+--------+------------+--------+------------+ | | | | GBP | | GBP | +--------------+--------+--------+------------+--------+------------+ | Loss | | | (66,504) | | (552,651) | | for | | | | | | | year | | | | | | | attributable | | | | | | | to equity | | | | | | | holders of | | | | | | | the parent | | | | | | | company | | | | | | +--------------+--------+--------+------------+--------+------------+ | Weighted | | | 70,000,000 | | 70,000,000 | | average | | | | | | | number | | | | | | | of | | | | | | | shares | | | | | | +--------------+--------+--------+------------+--------+------------+ The exercise of outstanding options and warrants would reduce the loss per share and hence have an anti-dilutiveeffect.
There are potentially 44,300,000 shares that could be issued under the terms of options and warrants agreements. 7. Notes to the cash flow statement Reconciliation of operating loss to net cash outflow from operating activities +--------------------------------------------+-----------------+---+----------------+---+----------------+ | | | | Year ended | | Year ended | | | | | 31 March | | 31 March | | | | | 2009 | | 2008 | | | | | | | | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | | | | GBP | | GBP | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Operating loss | | | (146,014) | | (563,155) | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Adjustments for: | | | | | | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Amortisation and impairment provisions | | | 33,286 | | 28,050 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Depreciation | | | 39,023 | | 23,236 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Share based payment expense | | | 19,731 | | 44,724 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Operating cash flows before movements in | | | (53,974) | | (467,145) | | working capital | | | | | | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | (Increase)/decrease in inventories | | | (4,663) | | 1,472 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | (Increase)/decrease in receivables | | | (44,155) | | 114,597 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | (Decrease)/increase in payables | | | (71,147) | | 17,898 | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | | | | | | | +--------------------------------------------+-----------------+---+----------------+---+----------------+ | Cash absorbed by operations | | | (173,939) | | (333,178) | +--------------------------------------------+-----------------+---+----------------+---+----------------+ 8. Analysis of net funds +--------------------------------------------+----------------+---+----------------+---+----------------+ | | At 1 April | | Cash Flow | | At 31 March | | | 2008 | | | | 2009 | +--------------------------------------------+----------------+---+----------------+---+----------------+ | | GBP | | GBP | | GBP | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Cash | | | | | | | Cash and cash equivalents | 215,466 | | (119,788) | | 95,678 | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Debt | | | | | | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Invoice discounting advances | - | | (82,646) | | (82,646) | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Bank debt due within one year | (25,006) | | - | | (25,006) | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Bank debt due after one year | (154,144) | | 25,007 | | (129,137) | +--------------------------------------------+----------------+---+----------------+---+----------------+ | | (179,150) | | (57,639) | | (236,789) | +--------------------------------------------+----------------+---+----------------+---+----------------+ | Net funds/(debt) | 36,316 | | (177,427) | | (141,111) | +--------------------------------------------+----------------+---+----------------+---+----------------+ For further information please visit www.astekgroup.co.uk or contact: Alan Segal Astek Group Plc 0161 942 3900 Alex Clarkson/Tom Rowley Zeus Capital 0161 831 1512 This information is provided by RNS The company news service from the London Stock Exchange END FR GUUPPRUPBGAP
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