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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Baylon Hldgs | LSE:MOLE | London | Ordinary Share | GB00B0T2CP59 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.125 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMMOLE
RNS Number : 7332U
Molectra Group Ltd
30 June 2009
+-------------------------------------+-------------------------------------+
| For Immediate Release | 30 June 2009 |
+-------------------------------------+-------------------------------------+
Molectra Group Limited (the "Company")
Final results for the year ended 31 December 2008
Molectra Group Limited (AIM:MOLE) today reports its final results for the year
ended 31 December 2008.
Highlights for the year
* Acquired 100% ownership of Molectra Australia
* Change from fund to operating company
* Strengthened management team
* Name change to Molectra Group Limited
* Board changes
* Cash position at year end of GBP2.99m
Paul Gazzard, Chief Executive Officer commented: "2008 saw significant changes
within the Board, structure and management of Molectra. The integration of these
changes has been a demanding process, a process which is now complete and gives
the Company a good base for the future. The Company has sufficient working
capital for the next twelve months operations.
We are undertaking commercial negotiations both with potential licensees of the
proprietary Molectra 'zero waste' tyre recycling process and potential buyers
for a variety of value added end products. The Company's green credentials
continue to present many opportunities in new and potentially exciting areas,
and I look forward to capitalising upon them in the future."
For further information please contact:
+-------------------------------------+-------------------------------------+
| Molectra Group Ltd | |
+-------------------------------------+-------------------------------------+
| Paul Gazzard | 01725 510 383 |
+-------------------------------------+-------------------------------------+
| Rodger Sargent | 020 7355 7660 |
+-------------------------------------+-------------------------------------+
| Arbuthnot Securities Limited | |
+-------------------------------------+-------------------------------------+
| Antonio Bossi | 020 7012 2000 |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| Threadneedle Communications Ltd | |
+-------------------------------------+-------------------------------------+
| Graham Herring | 020 7653 9500 |
+-------------------------------------+-------------------------------------+
A copy of the company's annual report for the year ended 31 December 2008,
together with a notice of Annual General Meeting to be held on 16 July 2009 at
Union House, Union Street, St. Helier, Jersey, Channel Islands, JE2 3RF at
10.00am, will be posted to shareholders today and is available from the
Company's website at www.molectragroup.co.uk.
CHAIRMAN'S STATEMENT
These results for Molectra Group Limited ("Molectra") cover the year to 31
December 2008. Molectra is a Jersey incorporated company.
Molectra consolidated its investment in Molectra Australia Pty Ltd ("Molectra
Australia"), the Australian based business that re-cycles and recovers materials
including crumb rubber, oil and carbon from used vehicle tyres, by acquiring the
remaining 42% of the company.
Financial performance
As at 31 December 2008, the Company had net assets of GBP4.57m (2007:
GBP14.47m). The loss for the period was GBP11.98m (2007: GBP0.7m). The loss
before exceptional items was GBP0.80m (2007: GBP0.25m). Exceptional items relate
to the impairment of goodwill and intangible assets amounting to GBP5.29m, write
off of the five Bauxsol technology sub-licences amounting to GBP4.98m and to
aborted deal costs in relation to a corporate transaction amounting to GBP0.92m
(see note 4). The increased loss was due to the change in structure from a fund
to an operating company, which resulted in large due diligence, legal and
accounting costs and poorly performing contracts within Molectra Australia. At
31 December 2008, the company had net cash of GBP2.99m.
Corporate activity & operations
On 15 April 2008, the AUD$1,700,000 outstanding loan from Molectra to Molectra
Australia Pty Ltd ('MA') was converted into further shares in MA, taking the
Company's stake in MA to 64.3%. At an EGM on 12 August 2008, shareholders
ratified the acquisition of the remaining 35.7% of MA's share capital for
32,000,000 new Molectra ordinary shares. The Company also acquired the
intellectual property which MA relies upon for its business, for a consideration
of 16,000,000 new ordinary shares.
The Company changed from an externally managed investment company to an
internally managed company whose principal business is conducted through its
wholly owned subsidiary, MA. To reflect the change in the nature of business,
the Company's name was changed to Molectra Group Limited. Paul Gazzard, Rodger
Sargent, David Hassum and John Dobozy joined the Board of the Company. John
Dobozy subsequently left the Board post year end.
These significant changes have allowed the Company to concentrate on the
continued commercialisation of the Molectra proprietary 'zero waste' tyre
recycling process and the production of value added products (VAP's) made from
re-bonded, recycled rubber.
As announced post year end on 19 May 2009, the two VAP contracts were won; the
equine anti-cast products and automotive accessory products are now
non-performing. Minimal revenue was generated from the contracts, and the
Company incurred significant operating and capital costs. Despite ongoing
attempts to make these contracts commercial, a combination of contract-specific
problems and the global recession has meant this has not been achieved to date.
This has prompted Molectra to actively pursue new commercial opportunities for
other VAP's in a variety of sectors within Australia, in particular where
currently there is either no sustainable or domestic option available. A number
of sectors have been targeted, including food and beverage, aviation, ports,
sporting, healthcare and government, and the reaction has been very encouraging.
The Company continues to focus on the development of these new VAP markets and
the conversion of interest into long term orders from high profile customers.
Driven by the number of enquiries received, the Company is also focusing upon
delivering a turnkey solution for a Molectra tyre recycling plant to third party
licensees. We have recently advanced our knowledge about the deliverability of
such plants, including how to tailor them to meet the specific needs of clients,
and this work has resulted in an increasing number of enquiries in 2009. The
number of enquiries, and their diverse geographical nature, reflects the
worldwide nature of the used tyre problem and the unmet demand for a
deliverable, commercial solution. Our advanced knowledge has also led to further
patents being filed surrounding the Company's proprietary process technology.
Other investments
The five Bauxsol technology sub-licences are non performing and non-core to the
Company's future strategy and have been written off, resulting in a non-cash
cost for the year of GBP4.98m.
Board changes
Given the change of the Company from a fund to an operating company, I, and my
fellow Non-executive Director Roger King, are stepping down from the Board of
Molectra after the AGM. I am delighted that Alan Kerr is joining the Board as
Chairman, following the AGM. Alan has a vast experience in the renewable sector
and capital markets, and is a valuable addition to the Board.
The resignation of Roger King, Roger Maddock and the appointment of Alan Kerr
will, when taken together, mean the Company is likely to become tax resident in
the United Kingdom. The Company may therefore fall within the charge to UK
corporation tax in due course. The Company will remain a Jersey registered
Company.
Cash
Retained cash and equivalents was GBP2.99m at 31 December 2008.
The future
Despite the global recession, the new management team in Australia has made
great progress and the many commercial opportunities identified will continue to
be pursued vigorously. The ever growing move to a green global environment is of
great benefit to the Company and will bring us increasing opportunities in the
future.
Roger Maddock
Non-Executive Director
Molectra Group Limited
PRINCIPAL ACCOUNTING POLICIES
Basis of Preparation
This financial information have been prepared in accordance with International
Financial Reporting Standards (IFRSs) issued by the International Accounting
Standards Board (IASB) and adopted by the European Union, and interpretations
issued by the International Financial Reporting Interpretations Committee of the
IASB (IFRIC) and the Companies (Jersey) Law 1991 applicable to companies
reporting under IFRS.
The financial information set out in this announcement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985 and the
Companies (Jersey) Law 1991. The consolidated and company balance sheets at 31
December 2008 and the consolidated income statement, consolidated and company
cash flow statements and associated notes for the year ended 31 December 2008
have been extracted from the audited statutory accounts which have received an
unqualified audit report.
The financial information has been prepared under the historical cost
convention.
The principal accounting policies of the company have remained unchanged from
the previous year.
Adoption of new and revised standards
In the current year the group has adopted all of the new and revised Standards
and Interpretations issued by the IASB (as adopted by the European Union) and
the IFRIC of the IASB that are relevant to its operations and effective for
annual reporting beginning on 1 January 2008. The adoption of these new and
revised Standards and Interpretations has had no material impact on the
accounting policies of the Group and methods of computation in the Group's and
Company's financial statements.
IFRS Standards and interpretations not yet adopted
At the date of authorisation of these financial statements, the following new
Standards and Interpretations which are yet to become mandatory have not been
applied in the Group's 2008 financial statements:
+-----------------------------------------------------+-----------------------+
| Standard or Interpretation | Effective for |
| | reporting |
| | periods starting on |
| | or after |
+-----------------------------------------------------+-----------------------+
| | |
+-----------------------------------------------------+-----------------------+
| IAS 1 Presentation of Financial Statements (revised | 1 January 2009 |
| 2007) | |
+-----------------------------------------------------+-----------------------+
| IAS 23 Borrowing Costs (revised 2007) | 1 January 2009 |
+-----------------------------------------------------+-----------------------+
| Amendment to IAS 32 Financial Instruments: | 1 January 2009 |
| Presentation and IAS 1 Presentation of Financial | |
| Statements - Puttable Financial Instruments and | |
| Obligations Arising on Liquidation | |
+-----------------------------------------------------+-----------------------+
| IAS 27 Consolidated and Separate Financial | 1 July 2009 |
| Statements (Revised 2008) | |
+-----------------------------------------------------+-----------------------+
| Amendment to IFRS 2 Share-based Payment - Vesting | 1 January 2009 |
| Conditions and Cancellations | |
+-----------------------------------------------------+-----------------------+
| IFRS 2 Share-based Payments | 1 January 2009 |
+-----------------------------------------------------+-----------------------+
| IFRS 3 Business Combinations (Revised 2008) | 1 July 2009 |
+-----------------------------------------------------+-----------------------+
| IFRS 8 Operating Segments | 1 January 2009 |
+-----------------------------------------------------+-----------------------+
The impact of the above standards and interpretations is either not known or not
yet reasonably estimable.
The directors are aware of other IFRSs and IFRICs issued by the IASB which are
not applicable to the entity and therefore will have no impact on the financial
performance and position of the Group. Accordingly no disclosure of these
standards has been made.
Going concern
The Board of Directors produce and monitor cash flow forecasts in the ordinary
course of business. Having reviewed the cash needs of the business, the Board
are of the view that there are sufficient funds to meet the group's obligations
for a year from the date of approval of these financial statements.
Basis of consolidation
The financial statements incorporate the financial statements of the company and
entities controlled by the company (its subsidiaries) made up to 31 December
2008. Control exists when the company has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences up to the date that control ceases. The purchase method of accounting
is used to account for the acquisition of subsidiaries by the group. The cost of
an acquisition is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange,
plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date,
irrespective of any minority interest. The excess of the cost of acquisition
over the fair value of the group's share of the net assets acquired is recorded
as goodwill.
Intercompany transactions, balances and unrealised gains on transactions between
group companies are eliminated. Unrealised losses are also eliminated but
considered as impairment indicator of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the group.
Business combinations are dealt with by the purchase method. The purchase method
involves the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at the
acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. On initial
recognition, the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are also used as the
basis for subsequent measurement in accordance with the Group accounting
policies. Goodwill is stated after separating out identifiable intangible
assets. Goodwill represents the excess of acquisition cost over the fair value
of the Group's share of the identifiable net asset of the acquired subsidiary at
the date of acquisition.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for
the sale of goods and services in the ordinary course of the group's activities.
Revenue is shown net of goods and services tax, returns, rebates and discounts.
Revenue from the sale of goods is recognised upon the delivery of goods to
customers, which corresponds to the date of transfer of significant risks and
rewards. Revenue from the rendering of a service is recognised upon delivery of
the service to the customers.
Interest income is recognised on a time-apportionment basis using the effective
interest rate method.
Exceptional items
The Group presents as exceptional items on the face of the income statement
those significant items of income and expense which, because of their size,
nature and infrequency of the events giving rise to them, merit separate
presentation to allow shareholders to understand better the elements of
financial performance in the year, so as to facilitate comparison with prior
periods to assess trends in financial performance more readily.
Purchase of minority interest
Where the company has purchased a minority interest, it is accounted for by way
of the parent-company model. Under this approach, the excess consideration over
and above the minority purchased is classified as goodwill in the balance sheet.
Intangible assets
An intangible asset, which is an identifiable non-monetary asset without
physical substance, is recognised to the extent that it is probable that the
expected future economic benefits attributable to the asset will flow to the
Group and that its cost can be reliably measured. The asset is deemed to be
identifiable when it is separable or when it arises from contractual or other
legal rights.
Intellectual property
Intellectual property is stated at cost less any provisions for amortisation and
impairments. Intellectual property acquired as part of a business combination is
capitalised separately from goodwill and is carried at fair value less
accumulated amortisation and accumulated impairment losses. It is amortised over
its useful life, estimated to be 20 years, using the straight line method.
Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value
of the Group's share of the identifiable net assets acquired is capitalised and
reviewed annually for impairment. Goodwill is carried at cost less accumulated
impairment losses.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at the cash-generating unit level. Goodwill is allocated to those
cash-generating units that have arisen from business combinations and represent
the lowest level within the Group at which management monitors the related cash
flows.
Goodwill with an indefinite life, is tested for impairment at least annually.
All other individual assets or cash-generating units are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
Property, plant and equipment
Each class of plant and equipment is carried at cost or fair value less, where
applicable, any accumulated depreciation and impairment losses.
Plant and equipment is measured on the cost basis less depreciation and
impairment losses.
Property, plant and equipment are tested for impairment whenever it is deemed
necessary and in cases where the carrying amount may not be recoverable. The
recoverable amount is assessed on the basis of expected net cash flows, which
will be received from the assets employment and subsequent disposal. The
expected net cash flows are discounted to present values in determining
recoverable amounts.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the company and the cost of the
item can be measured reliably. All other repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.
Investments
Investments in subsidiaries are held at cost less any impairment.
Depreciation
The depreciable amount of all property, plant and equipment are calculated to
write down the cost less estimated residual value of all plant and equipment by
annual instalments over their expected useful lives to the Group commencing from
the time the asset is held ready for use. Leasehold improvements are depreciated
over the shorter of either the unexpired period of the lease or the estimated
useful lives less residual value of the improvements. The residual values are
reassessed annually for these assets.
The depreciation rates used for each class of depreciable assets are:
+-------------------------------+-------------------+
| Plant and equipment | 20% - 10% |
+-------------------------------+-------------------+
| Leasehold improvements | 7% |
+-------------------------------+-------------------+
| Office equipment and | 25% - 20% |
| furniture | |
+-------------------------------+-------------------+
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These gains and losses are included in the income statement.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short term highly liquid investments with original maturities of
three months or less.
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method. These are
classed as financial liabilities.
Other receivables
Other receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. A provision for impairment of other receivables is established
when there is objective evidence that the group will not be able to collect all
amounts due. Other receivables excluding prepayments are classified as financial
assets.
Expenses
All expenses are recognised in the income statement on an accruals basis.
Employee benefits
Provision is made for the company's liability for employee benefits arising from
services rendered by employees to the balance sheet date. Employee benefits that
are expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled.
Current and deferred income tax
The current income tax charge is calculated on the basis of the tax laws enacted
or substantively enacted at the balance sheet date in the countries where the
company's subsidiary operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation and establishes
provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Current and deferred income tax (continued)
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred income tax assets are recognised in the income statement to the extent
that it is probable that future taxable profit will be available against which
the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments
in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable future.
The company is an Exempt Company for Jersey taxation purposes. The company pays
an exempt company fee, for each company in the group, which is currently GBP600
per annum. With effect from the 2009 year of assessment Jersey has abolished the
exempt company regime for existing companies. Profits arising in the Company for
the 2009 year of assessment and future periods will be subject to tax at the
rate of 0%.
Foreign currency
Items included in the financial statements of the subsidiaries are measured
using the currency of the primary economic environment in which the subsidiaries
operate ('the functional currency'). The consolidated financial statements are
presented in 'Sterling' (GBP), which is the company's functional and
presentational currency.
The results and financial position of the company are expressed in pounds
sterling, which is the functional currency of the company.
Transactions in currencies other than sterling are recorded at the rates of
exchange prevailing on the dates of the transactions. At each balance sheet
date, monetary items and non monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
the balance sheet date. Gains and losses arising on retranslation are included
in net profit or loss for the period.
The results and financial position of the subsidiary that has a functional
currency different from the presentation currency is translated into the
presentation currency as follows:
(a) assets and liabilities for each balance sheet presented are translated at
the closing rate of the date of that balance sheet;
(b) income and expenses for each income statement are translated at average
exchange rate
(c) all resulting exchange differences are recognised as a separate component of
equity.
When a foreign operation is partially disposed of or sold, exchange differences
that were recorded in equity are recognised in the income statement as part of
the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction from
the proceeds.
Key estimates
The preparation of these financial statements under IFRS as adopted by the
European Union requires the group to make estimates and assumptions that affect
the application of policies and reported amounts. Estimates and judgements 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 estimates
and assumptions which have a significant risk of causing a material adjustment
to the carrying amount of assets and liabilities are discussed below.
Intangible assets
The group recognises intangible assets acquired as part of business combinations
at fair value at the date of acquisition. The determination of these fair values
is based upon management's judgement and includes assumptions on the timing and
amount of future incremental cash flows generated by the assets and selection of
an appropriate cost of capital. Furthermore, management must estimate the
expected useful lives of intangible assets and charge amortisation on these
assets accordingly. The amortisation period is the Directors' best estimate of
the useful life of the licences, but this is difficult to predict with any
certainty for new technologies.
Purchase of minority interest
The group apply the parent-company model in accounting for the purchase of
minority interests.
Impairment
The group is required to test, at least annually, whether goodwill has suffered
any impairment. The recoverable amount is determined based on the net realisable
value of the cash generating unit. Intangible assets with a useful economic life
of less than 20 years are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The
market value of the group has been used as an approximation of the net
realisable value of the business as a whole.
Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes
in circumstances indicate that the carrying amount may not be recoverable. When
a review for impairment is conducted, recoverable amounts are determined based
on the net realisable value of the assets as part of the business as a whole.
Depreciation of property, plant and equipment
Depreciation is provided so as to write down assets to their residual values
over their estimated useful lives as set out above. The selection of these
estimated lives requires the exercise of management judgement.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2008
+-------------------------------------------------+------+--------------+-------------+
| | Note | 2008 | 2007 |
+-------------------------------------------------+------+--------------+-------------+
| | | GBP | GBP |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Revenue | | 15,844 | 12,704 |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Operating expenses | | | |
+-------------------------------------------------+------+--------------+-------------+
| Management fees | | (147,134) | (196,000) |
+-------------------------------------------------+------+--------------+-------------+
| Other operating expenses | | (1,641,718) | (662,602) |
+-------------------------------------------------+------+--------------+-------------+
| Amortisation of intangible assets | 8 | (233,923) | (388,982) |
+-------------------------------------------------+------+--------------+-------------+
| Depreciation of property, plant and equipment | 11 | (61,383) | (57,990) |
+-------------------------------------------------+------+--------------+-------------+
| Exceptional items | 4 | (11,180,480) | (470,000) |
+-------------------------------------------------+------+--------------+-------------+
| Total operating expenses | | (13,264,638) | (1,775,574) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Operating loss | | (13,248,794) | (1,762,870) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Finance income | | | |
+-------------------------------------------------+------+--------------+-------------+
| Bank and deposit interest income | | 227,053 | 380,481 |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Gains on re-measurement of investment loans | | - | 658,436 |
| carried at fair value through profit and loss | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Loss before taxation | | (13,021,741) | (723,953) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Taxation | 5 | 1,045,246 | - |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Net loss for the year | | (11,976,495) | (723,953) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Attributable to: | | | |
+-------------------------------------------------+------+--------------+-------------+
| Equity holders of the company | | (11,784,721) | (474,840) |
+-------------------------------------------------+------+--------------+-------------+
| Minority interest | | (191,774) | (249,113) |
+-------------------------------------------------+------+--------------+-------------+
| | | (11,976,495) | (723,953) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Basic and diluted loss per share (pence) | | (6.78 ) | (0.31) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
All transactions arise from continuing operations.
CONSOLIDATED AND COMPANY BALANCE SHEETS
For the year ended 31 December 2008
+------------------------------+------+--------------+-------------+--------------+------------+
| | | Group | Company |
+------------------------------+------+----------------------------+---------------------------+
| | Note | 2008 | 2007 | 2008 | 2007 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | GBP | GBP | GBP | GBP |
+------------------------------+------+--------------+-------------+--------------+------------+
| Non-current assets | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Intangible assets | | 1,450,361 | 9,419,800 | - | - |
+------------------------------+------+--------------+-------------+--------------+------------+
| Investments in subsidiaries | | - | - | 2,858,865 | 7,927,683 |
+------------------------------+------+--------------+-------------+--------------+------------+
| Property, plant and | 11 | 756,078 | 588,400 | - | - |
| equipment | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Investments held at fair | | - | - | - | - |
| value through profit and | | | | | |
| loss | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | 2,206,439 | 10,008,200 | 2,858,865 | 7,927,683 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Current assets | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Other receivables | 13 | 59,494 | 222,975 | 15,860 | 541,287 |
+------------------------------+------+--------------+-------------+--------------+------------+
| Cash and cash equivalents | 12 | 2,988,486 | 6,031,970 | 2,002,393 | 5,968,051 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | 3,047,980 | 6,254,945 | 2,018,253 | 6,509,338 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Total assets | | 5,254,419 | 16,263,145 | 4,877,118 | 14,437,021 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Current liabilities | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Trade and other payables | 14 | (558,123) | (623,015) | (304,555) | (353,618) |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | (558,123) | (623,015) | (304,555) | (353,618) |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Non-current liabilities | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Deferred income tax | 15 | (123,733) | (1,168,979) | - | - |
| liabilities | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Net assets | | 4,572,563 | 14,471,151 | 4,572,563 | 14,083,403 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Capital and reserves | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Share capital | 16 | 17,296,977 | 14,116,977 | 17,296,977 | 14,116,977 |
+------------------------------+------+--------------+-------------+--------------+------------+
| Translation reserve | | (33,702) | 15,219 | - | - |
+------------------------------+------+--------------+-------------+--------------+------------+
| Retained earnings | | (12,690,712) | (779,655) | (12,724,414) | (33,574) |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | 4,572,563 | 13,352,541 | 4,572,563 | 14,083,403 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Minority interests | | - | 1,118,610 | - | - |
+------------------------------+------+--------------+-------------+--------------+------------+
| Shareholders' funds | | 4,572,563 | 14,471,151 | 4,572,563 | 14,083,403 |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| Net asset value per Ordinary | 17 | 2.25 | 9.32 | 2.25 | 8.65 |
| share (pence) | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+------------+
The financial statements were approved by the Board of Directors on 29 June
2009.
Roger Maddock
Non-Executive Director
Molectra Group Limited
CONSOLIDATED AND COMPANY CASH FLOW STATEMENT
For the year ended 31 December 2008
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | Group | Company |
+------------------------------+------+----------------------------+----------------------------+
| | Note | 2008 | 2007 | 2008 | 2007 |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | GBP | GBP |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Cash inflow from operating | | | | | |
| activities | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Net (loss)/profit for the | | (11,976,495) | (723,953) | (12,690,841) | 144,503 |
| year | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Non-cash movements: | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Amortisation | | 233,923 | 388,982 | - | - |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Depreciation | | 61,383 | 57,990 | - | - |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Interest receivable | | (227,053) | - | (206,526) | - |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Provision for legal claim | | 120,000 | | 120,000 | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Gains on re-measurement | | - | (658,436) | - | (658,436) |
| of investment loans carried | | | | | |
| at fair value through profit | | | | | |
| and loss | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Write off of licences | | 4,977,246 | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Impairment of goodwill | | 5,285,766 | | | |
| and intangible assets | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Loss on subsidiary loan | | - | - | 5,379,314 | - |
| write off | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Loss on impairment of | | | - | 5,385,316 | - |
| investment | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Deferred taxation | | (1,045,246) | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Translation movements | | (468,164) | - | - | - |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Changes in working capital | | | | | |
| (excluding the effects of | | | | | |
| acquisition and exchange | | | | | |
| differences on | | | | | |
| consolidation): | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Other receivables | | 142,036 | 9,897 | (12,206) | 8,153 |
+------------------------------+------+--------------+-------------+--------------+-------------+
| - Other payables | | (196,859) | 511,570 | (169,062) | 274,476 |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Net cash outflow from | | (3,093,463) | (413,950) | (2,194,005) | (231,304) |
| operating activities | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Cash flow from investing | | | | | |
| activities | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Interest received | | 248,497 | - | 232,898 | - |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Purchase of property, plant | | (180,118) | (261,270) | - | - |
| and equipment | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Purchase of unlisted | | - | - | - | (1,189,458) |
| investments | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Purchase of intangibles | | (18,400) | (269,028) | - | (269,028) |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Purchase of shares in | 18 | - | (1,105,192) | - | - |
| subsidiary | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Loans to subsidiary | | - | (87,691) | (2,004,551) | (511,260) |
| undertakings | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Net cash outflow from | | 49,979 | (1,723,181) | (1,771,653) | (1,969,746) |
| investing activities | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Net (decrease)/increase in | | (3,043,484) | (2,137,131) | (3,965,658) | (2,201,050) |
| cash and cash equivalents | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Cash and cash equivalents at | | 6,031,970 | 8,169,101 | 5,968,051 | 8,169,101 |
| 1 January 2008 | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| Cash and cash equivalent at | | 2,988,486 | 6,031,970 | 2,002,393 | 5,968,051 |
| 31 December 2008 | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
| | | | | | |
+------------------------------+------+--------------+-------------+--------------+-------------+
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2008
Consolidated
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | Share | Translation | Retained | Total | Minority | Total |
| | capital | reserve | earnings | equity | Interests | equity |
| | | | | attributable | | |
| | | | | to equity | | |
| | | | | holders | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Balance at 1 January | 14,116,977 | - | (304,815) | 13,812,162 | - | 13,812,162 |
| 2007 | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Net income recognised | - | 15,219 | - | 15,219 | - | 15,219 |
| directly to equity | | | | | | |
| (exchange difference | | | | | | |
| on translation of | | | | | | |
| foreign subsidiary) | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Loss for the year | - | - | (474,840) | (474,840) | (249,113) | (723,953) |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Total recognised | - | 15,219 | (474,840) | (459,621) | (249,113) | (708,734) |
| income and expense | | | | | | |
| for the year | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Share of minority | - | - | - | - | 1,367,723 | 1,367,723 |
| interests on | | | | | | |
| acquisition | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| At 31 December 2007 | 14,116,977 | 15,219 | (779,655) | 13,352,541 | 1,118,610 | 14,471,151 |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Net income recognised | - | (48,921) | (126,336) | (175,257) | - | (175,257) |
| directly to equity | | | | | | |
| (exchange difference | | | | | | |
| on translation of | | | | | | |
| foreign subsidiary) | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Loss for the year | - | - | (11,784,721) | (11,784,721) | (191,774) | (11,976,495) |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Total recognised | - | (48,921) | (11,911,057) | (11,959,978) | (191,774) | (12,151,752) |
| income and expense | | | | | | |
| for the year | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Issue of shares | 3,180,000 | - | - | 3,180,000 | - | 3,180,000 |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Share of minority | - | - | - | - | (926,836) | (926,836) |
| interests on | | | | | | |
| acquisition | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Balance at 31 | 17,296,977 | (33,702) | (12,690,712) | 4,572,563 | - | 4,572,563 |
| December 2008 | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
Company
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | Share | Translation | Retained | Total | Minority | Total |
| | Capital | reserve | earnings | equity | interests | equity |
| | | | | attributable | | |
| | | | | to equity | | |
| | | | | holders | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Balance at 1 January | 14,116,977 | - | (178,077) | 13,938,900 | - | 13,938,900 |
| 2007 | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Profit for the year | - | - | 144,503 | 144,503 | - | 144,503 |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| At 31 December 2007 | 14,116,977 | - | (33,574) | 14,083,403 | - | 14,083,403 |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Loss for the year | - | - | (12,690,840) | (12,690,840) | - | (12,690,840) |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Total recognised | - | - | (12,690,840) | (12,690,840) | - | (12,690,840) |
| income and expense | | | | | | |
| for the year | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Issue of shares | 3,180,000 | - | - | 3,180,000 | - | 3,180,000 |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Share of minority | - | - | - | - | - | - |
| interests on | | | | | | |
| acquisition | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
| Balance at 31 | 17,296,977 | - | (12,724,414) | 4,572,563 | - | 4,572,563 |
| December 2008 | | | | | | |
+-----------------------+------------+-------------+--------------+---------------+------------+--------------+
1 Segmental reporting
The Group only has one primary segment being investment in sustainable
environmental technologies.
Geographical segments
The Group's business segments operate in both the United Kingdom and Australia.
Segment assets are based on the geographical location of the assets:
+-------------------------------------------------------+-----------+------------+
| | Segmental assets |
+-------------------------------------------------------+------------------------+
| | 2008 | 2007 |
+-------------------------------------------------------+-----------+------------+
| | GBP | GBP |
+-------------------------------------------------------+-----------+------------+
| | | |
+-------------------------------------------------------+-----------+------------+
| United Kingdom | 3,468,615 | 11,708,256 |
+-------------------------------------------------------+-----------+------------+
| Australia | 1,785,804 | 4,554,889 |
+-------------------------------------------------------+-----------+------------+
| | 5,254,419 | 16,263,145 |
+-------------------------------------------------------+-----------+------------+
2 Management fee
+-------------------------------------------------------+----------+----------+
| | 2008 | 2007 |
+-------------------------------------------------------+----------+----------+
| | GBP | GBP |
+-------------------------------------------------------+----------+----------+
| | | |
+-------------------------------------------------------+----------+----------+
| Management fee | 147,134 | 196,000 |
+-------------------------------------------------------+----------+----------+
The management fee paid to Development Capital Management (Jersey) Limited was
2% per annum of the amount subscribed plus any gains retained by the Company for
reinvestment.
The management agreement between the Company and the Manager was terminated
during the year.
3 Other operating expenses
The loss before taxation is stated after:
+-------------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+-------------------------------------------------------+-----------+-----------+
| | GBP | GBP |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| Legal and professional fees | 618,117 | 119,733 |
+-------------------------------------------------------+-----------+-----------+
| Other administrative costs | 612,152 | 313,625 |
+-------------------------------------------------------+-----------+-----------+
| Directors' remuneration | 148,139 | 47,955 |
+-------------------------------------------------------+-----------+-----------+
| Marketing and public relations | 23,139 | 28,750 |
+-------------------------------------------------------+-----------+-----------+
| Custodian fees and bank charges | 21,532 | 27,019 |
+-------------------------------------------------------+-----------+-----------+
| Auditors' remuneration: | | |
+-------------------------------------------------------+-----------+-----------+
| - For audit services to parent company | 27,500 | 32,500 |
+-------------------------------------------------------+-----------+-----------+
| - For audit services to subsidiary | 7,310 | 7,500 |
+-------------------------------------------------------+-----------+-----------+
| - For assurances services | 11,000 | 20,000 |
+-------------------------------------------------------+-----------+-----------+
| - For tax services | 20,000 | - |
+-------------------------------------------------------+-----------+-----------+
| Wages and salaries | 620,993 | 178,615 |
+-------------------------------------------------------+-----------+-----------+
| Foreign exchange gains | (468,164) | - |
+-------------------------------------------------------+-----------+-----------+
| Loan interest waived by minority interest shareholder | - | (113,095) |
+-------------------------------------------------------+-----------+-----------+
| | 1,641,718 | 662,602 |
+-------------------------------------------------------+-----------+-----------+
4 Exceptional items
+-------------------------------------------------------+------------+----------+
| | 2008 | 2007 |
+-------------------------------------------------------+------------+----------+
| | GBP | GBP |
+-------------------------------------------------------+------------+----------+
| | | |
+-------------------------------------------------------+------------+----------+
| Write off of Bauxsol licences (see note 8) | 4,977,246 | - |
+-------------------------------------------------------+------------+----------+
| Impairment of intangible assets (see note 8) | 5,285,766 | - |
+-------------------------------------------------------+------------+----------+
| Aborted deal costs | 450,000 | 470,000 |
+-------------------------------------------------------+------------+----------+
| Legal and professional fees in connection with the | 467,468 | - |
| reverse take-over | | |
+-------------------------------------------------------+------------+----------+
| | | |
+-------------------------------------------------------+------------+----------+
| | 11,180,480 | 470,000 |
+-------------------------------------------------------+------------+----------+
Aborted deal costs include corporate finance fees to Grant Thornton UK LLP
amounting to GBP82,000.
5 Taxation
The components of tax expense comprise:
+-------------------------------------------------------+-----------+----------+
| | 2008 | 2007 |
+-------------------------------------------------------+-----------+----------+
| | GBP | GBP |
+-------------------------------------------------------+-----------+----------+
| | | |
+-------------------------------------------------------+-----------+----------+
| - Current tax | - | - |
+-------------------------------------------------------+-----------+----------+
| - Deferred tax | 1,045,246 | - |
+-------------------------------------------------------+-----------+----------+
| | 1,045,246 | - |
+-------------------------------------------------------+-----------+----------+
The tax payable on profit from ordinary activities before income tax is
reconciled to the income tax expense as follows:
+-------------------------------------------------------+--------------+-----------+
| | 2008 | 2007 |
+-------------------------------------------------------+--------------+-----------+
| | GBP | GBP |
+-------------------------------------------------------+--------------+-----------+
| | | |
+-------------------------------------------------------+--------------+-----------+
| Loss for the year before taxation | (13,021,741) | (723,953) |
+-------------------------------------------------------+--------------+-----------+
| Less: amounts not subject to taxation | 12,103,533 | 163,618 |
+-------------------------------------------------------+--------------+-----------+
| Representing losses from Molectra Australia Pty | (918,208) | (560,335) |
| Limited | | |
+-------------------------------------------------------+--------------+-----------+
| | | |
+-------------------------------------------------------+--------------+-----------+
| Tax recoverable on loss from ordinary activities | (275,462) | (168,101) |
| before income tax at 30% (2007: 30%) | | |
+-------------------------------------------------------+--------------+-----------+
| Less tax effect of: | | |
+-------------------------------------------------------+--------------+-----------+
| - Tax losses not recognised as deferred tax assets | 275,462 | 168,101 |
+-------------------------------------------------------+--------------+-----------+
| Income tax expense | - | - |
+-------------------------------------------------------+--------------+-----------+
6 Loss attributable to the parent company
The loss attributable to the parent company, Molectra Group Ltd, was
GBP12,690,840 (2007: profit GBP144,503). As permitted by Companies (Jersey) Law
1991, no separate income statement is presented in respect of the parent
company.
7 Earnings per share
The earnings per Ordinary share is based on the net loss for the year
attributable to equity holders of GBP11,784,721 (2007: GBP474,840) and on
173,848,000 (2007: 155,225,000) weighted average Ordinary shares in issue during
the year.
The diluted return per Ordinary share is based on the net loss for the year
attributable to equity holders and 173,848,000 (2007: 155,225,000) shares.
The number of potential ordinary shares issued increased post year end following
the introduction of a share option scheme.
8 Intangible assets
Group
+---------------------------------------------+-------------+--------------+-------------+
| | Goodwill | Intellectual | Total |
| | | property | |
+---------------------------------------------+-------------+--------------+-------------+
| | GBP | GBP | GBP |
+---------------------------------------------+-------------+--------------+-------------+
| Cost | | | |
+---------------------------------------------+-------------+--------------+-------------+
| At 1 January 2007 | - | 5,069,539 | 5,069,539 |
+---------------------------------------------+-------------+--------------+-------------+
| Additions | - | 291,376 | 291,376 |
+---------------------------------------------+-------------+--------------+-------------+
| Acquisition of subsidiary | 678,007 | 3,896,598 | 4,574,605 |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2007 | 678,007 | 9,257,513 | 9,935,520 |
+---------------------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------------------+-------------+--------------+-------------+
| Addition | - | 1,078,400 | 1,078,400 |
+---------------------------------------------+-------------+--------------+-------------+
| Acquisition of minority interest | 1,118,810 | - | 1,118,810 |
+---------------------------------------------+-------------+--------------+-------------+
| Write off | - | (5,379,316) | (5,379,316) |
+---------------------------------------------+-------------+--------------+-------------+
| Exchange differences | - | 340,209 | 340,209 |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2008 | 1,796,817 | 5,296,806 | 7,093,623 |
+---------------------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------------------+-------------+--------------+-------------+
| Amortisation | | | |
+---------------------------------------------+-------------+--------------+-------------+
| At 1 January 2007 | - | (126,738) | (126,738) |
+---------------------------------------------+-------------+--------------+-------------+
| Amortisation charge | - | (388,982) | (388,982) |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2007 | - | (515,720) | (515,720) |
+---------------------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------------------+-------------+--------------+-------------+
| Amortisation charge | - | (233,923) | (233,923) |
+---------------------------------------------+-------------+--------------+-------------+
| Write off | - | 402,070 | 402,070 |
+---------------------------------------------+-------------+--------------+-------------+
| Impairment loss | (1,796,817) | (3,488,949) | (5,285,766) |
+---------------------------------------------+-------------+--------------+-------------+
| Exchange differences | - | (9,923) | (9,923) |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2008 | (1,796,817) | (3,846,445) | (5,643,262) |
+---------------------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------------------+-------------+--------------+-------------+
| Net book value | | | |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2008 | - | 1,450,361 | 1,450,361 |
+---------------------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------------------+-------------+--------------+-------------+
| At 31 December 2007 | 678,007 | 8,741,793 | 9,419,800 |
+---------------------------------------------+-------------+--------------+-------------+
The useful economic life of the intellectual property is 20 years. Intellectual
property consists of the licences acquired from Molectra IP (Mauritius) Limited,
amounting to GBP1,037,917 and the remaining intellectual property of the
Molectra recycling process not fully impaired of GBP412,444.
During the year, intellectual property relating to the five Bauxsol technology
sub-licences, with a net book value of GBP4,977,246, were written off, as they
are non-core to the Company's future strategy.
During the year, goodwill amounting to GBP1,118,810 was recognised in relation
to the purchase of minority interest in Molectra Australia Pty Limited. Details
of this transaction are included in note 18.
Impairment of goodwill and intellectual property
The directors have determined recoverable amount by reference to net realisable
value using the group's market capitalisation at the 31 December 2008. At the
year end, the market capitalisation of the group was GBP4,572,562. As a result,
an impairment loss of GBP1,796,817 and GBP3,488,949 has been recognised against
the carrying value of goodwill and intellectual property respectively.
9 Investments held at fair value through profit and loss
Company
+-------------------------------------------------------+----------+-------------+
| | Unlisted |
| | investments |
+-------------------------------------------------------+------------------------+
| | 2008 | 2007 |
+-------------------------------------------------------+----------+-------------+
| | GBP | GBP |
+-------------------------------------------------------+----------+-------------+
| | | |
+-------------------------------------------------------+----------+-------------+
| At 1 January | - | 718,873 |
+-------------------------------------------------------+----------+-------------+
| Additions | - | 1,189,458 |
+-------------------------------------------------------+----------+-------------+
| Fair value measurement through profit and loss | - | 658,436 |
+-------------------------------------------------------+----------+-------------+
| Reclassified to investment in subsidiary undertaking | - | (2,566,767) |
| on exercise of convertible loan note (see note 16) | | |
+-------------------------------------------------------+----------+-------------+
| At 31 December | - | - |
+-------------------------------------------------------+----------+-------------+
During the prior year the group exercised its right to convert the convertible
loan notes into ordinary shares in Molectra Australia Pty Limited. This resulted
in a 58% shareholding in Molectra Australia Pty Limited. The investment was
therefore reclassified as an investment in a subsidiary undertaking.
10 Investment in subsidiary undertakings
Company
+---------------------------------------------+-------------+-------------+-------------+
| | Shares | Loans | Total |
+---------------------------------------------+-------------+-------------+-------------+
| | GBP | GBP | GBP |
+---------------------------------------------+-------------+-------------+-------------+
| | | | |
+---------------------------------------------+-------------+-------------+-------------+
| At 1 January 2007 | 2 | 5,069,539 | 5,069,541 |
+---------------------------------------------+-------------+-------------+-------------+
| Additions | - | 291,375 | 291,375 |
+---------------------------------------------+-------------+-------------+-------------+
| Exercise of convertible loan notes (see | 2,566,767 | - | 2,566,767 |
| note 9 and 18) | | | |
+---------------------------------------------+-------------+-------------+-------------+
| At 31 December 2007 | 2,566,769 | 5,360,914 | 7,927,683 |
+---------------------------------------------+-------------+-------------+-------------+
| | | | |
+---------------------------------------------+-------------+-------------+-------------+
| Loans waived | - | (5,379,314) | (5,379,314) |
+---------------------------------------------+-------------+-------------+-------------+
| Additions | 2,918,546 | 2,777,266 | 5,695,812 |
+---------------------------------------------+-------------+-------------+-------------+
| Impairment loss | (5,385,316) | - | (5,385,316) |
+---------------------------------------------+-------------+-------------+-------------+
| At 31 December 2008 | 99,999 | 2,758,866 | 2,858,865 |
+---------------------------------------------+-------------+-------------+-------------+
+---------------------------------------------+----------+----------+----------+
| | Shares | Loans | Total |
+---------------------------------------------+----------+----------+----------+
| | GBP | GBP | GBP |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Greenhouse Organic Solutions Ltd | 1 | - | 1 |
+---------------------------------------------+----------+----------+----------+
| Molectra IP Development Ltd (formerly | 1 | - | 1 |
| Greenhouse IP Development Ltd) | | | |
+---------------------------------------------+----------+----------+----------+
| Molectra Australia Pty Ltd | 99,997 | - | 99,997 |
+---------------------------------------------+----------+----------+----------+
| | 99,999 | - | 99,999 |
+---------------------------------------------+----------+----------+----------+
The Company holds 1 Ordinary share of GBP1 in Greenhouse Organic Solutions Ltd,
which is incorporated in Jersey. This represents the entire issue share capital
of this company. The principal activity of this company is to develop a regional
treatment centre for high strength organic waste.
The Company holds 1 Ordinary share of GBP1 in Molectra IP Development Ltd which
is incorporated in Jersey. This represents the entire issue share capital of
this company. The principal activity of this company is intellectual property
ownership. The authorised share capital of each is 10,000 shares of a nominal
value of GBP1.
The company also holds 17,493 (2007: 8,633) ordinary AUD$1 shares in Molectra
Australia Pty Ltd, a company incorporated in Australia. This represents 100%
(2007: 58%) of the entire share capital of this company. The principal activity
of this company is to effectively use state of the art technology to recycle
tyres.
Investment in subsidiary undertakings (continued)
At the 31 December 2008, the investment was impaired to reflect the net asset
position of the subsidiary.
During the year, loans due from Molectra IP Developments Limited amounting to
GBP5,360,914 were waived.
11 Property, plant and equipment
+----------------------------------+--------------+------------+-----------+-----------+
| | Leasehold | Office | Machinery | Total |
| | improvement | equipment | | |
+----------------------------------+--------------+------------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+----------------------------------+--------------+------------+-----------+-----------+
| Cost | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| At 1 January 2007 | - | - | - | - |
+----------------------------------+--------------+------------+-----------+-----------+
| Acquisition | 19,002 | 1,796 | 364,322 | 385,120 |
+----------------------------------+--------------+------------+-----------+-----------+
| Additions | 459 | 3,628 | 257,183 | 261,270 |
+----------------------------------+--------------+------------+-----------+-----------+
| At 1 January 2008 | 19,461 | 5,424 | 621,505 | 646,390 |
+----------------------------------+--------------+------------+-----------+-----------+
| Additions | - | 11,571 | 168,547 | 180,118 |
+----------------------------------+--------------+------------+-----------+-----------+
| Exchange differences | 1,812 | 543 | 61,378 | 63,733 |
+----------------------------------+--------------+------------+-----------+-----------+
| At 31 December 2008 | 21,273 | 17,538 | 851,430 | 890,241 |
+----------------------------------+--------------+------------+-----------+-----------+
| | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| Depreciation | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| At 1 January 2007 | - | - | - | - |
+----------------------------------+--------------+------------+-----------+-----------+
| Charge for the year | (651) | (78) | (57,261) | (57,990) |
+----------------------------------+--------------+------------+-----------+-----------+
| At 1 January 2008 | (651) | (78) | (57,261) | (57,990) |
+----------------------------------+--------------+------------+-----------+-----------+
| Charge for the year | (2,245) | (1,783) | (57,355) | (61,383) |
+----------------------------------+--------------+------------+-----------+-----------+
| Foreign exchange differences | (268) | (154) | (14,368) | (14,790) |
+----------------------------------+--------------+------------+-----------+-----------+
| At 31 December 2008 | (3,164) | (2,015) | (128,984) | (134,163) |
+----------------------------------+--------------+------------+-----------+-----------+
| | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| Net book value at 31 December | 18,109 | 15,523 | 722,446 | 756,078 |
| 2008 | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
| Net book value at 31 December | 18,810 | 5,346 | 564,244 | 588,400 |
| 2007 | | | | |
+----------------------------------+--------------+------------+-----------+-----------+
12 Cash and cash equivalents
+-----------------------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+-----------------------------------+-----------------------+-----------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------+-----------+-----------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+-----------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+-----------------------------------+-----------+-----------+-----------+-----------+
| Cash at bank and in hand | 19,392 | 1,063,633 | 5,000 | 999,714 |
+-----------------------------------+-----------+-----------+-----------+-----------+
| Short-term bank deposits | 2,969,094 | 4,968,337 | 1,997,393 | 4,968,337 |
+-----------------------------------+-----------+-----------+-----------+-----------+
| | 2,988,486 | 6,031,970 | 2,002,393 | 5,968,051 |
+-----------------------------------+-----------+-----------+-----------+-----------+
Cash at bank and in hand earns interest of floating rates based on daily bank
deposit rates and is subject to interest rate risk as disclosed in note 20.
The fair value of the cash and cash equivalents approximate their book value.
For the purposes of the consolidated cashflow statement, cash and cash
equivalents comprise cash at bank, cash in hand and short term deposits with an
original maturity of three months or less held for the purpose of meeting short
term cash commitments.
Cash at bank and in hand includes GBP14,000 (2007: GBP64,000) denominated in
Australian Dollars. Disclosure on foreign exchange and interest rate risk
management is disclosed in note 20.
13 Other receivables
+-----------------------------------+----------+----------+----------+----------+
| | Group | Company |
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------+----------+----------+----------+----------+
| | GBP | GBP | GBP | GBP |
+-----------------------------------+----------+----------+----------+----------+
| | | | | |
+-----------------------------------+----------+----------+----------+----------+
| Bank and deposit interest | 4,928 | 26,373 | - | 26,373 |
| receivable | | | | |
+-----------------------------------+----------+----------+----------+----------+
| Prepayments | 28,329 | 3,654 | 15,860 | 3,654 |
+-----------------------------------+----------+----------+----------+----------+
| Other receivables | 26,237 | 192,948 | - | - |
+-----------------------------------+----------+----------+----------+----------+
| Loans to subsidiary undertakings | - | - | - | 511,260 |
+-----------------------------------+----------+----------+----------+----------+
| | 59,494 | 222,975 | 15,860 | 541,287 |
+-----------------------------------+----------+----------+----------+----------+
The fair values of other receivables are not materially different from the
carrying value.
Other receivables include GBP44,000 (2007: GBP166,000) denominated in Australian
Dollars. Management of foreign exchange risk is disclosed in note 20.
14 Trade and other payables
+-----------------------------------+----------+----------+----------+----------+
| | Group | Company |
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------+----------+----------+----------+----------+
| | GBP | GBP | GBP | GBP |
+-----------------------------------+----------+----------+----------+----------+
| | | | | |
+-----------------------------------+----------+----------+----------+----------+
| Trade payables | 192,035 | 248,075 | - | - |
+-----------------------------------+----------+----------+----------+----------+
| Accruals | 266,443 | 362,080 | 261,866 | - |
+-----------------------------------+----------+----------+----------+----------+
| Other payables | 99,645 | 12,860 | 42,689 | 353,618 |
+-----------------------------------+----------+----------+----------+----------+
| | 558,123 | 623,015 | 304,555 | 353,618 |
+-----------------------------------+----------+----------+----------+----------+
The fair value of trade and other payables are not materially different from
their book value.
Trade and other payables include GBP254,000 (2007: GBP263,000) denominated in
Australian Dollars. Management of foreign exchange risk is disclosed in note 20.
Company accruals include a provision for a legal claim. Further disclosure is
considered seriously prejudicial.
15 Deferred income tax
The deferred income tax liability relates to the fair value adjustment on
acquisition.
+-----------------------------------+-------------+-----------+----------+----------+
| | Group | Company |
+-----------------------------------+-------------------------+---------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------+-------------+-----------+----------+----------+
| | GBP | GBP | GBP | GBP |
+-----------------------------------+-------------+-----------+----------+----------+
| | | | | |
+-----------------------------------+-------------+-----------+----------+----------+
| At 1 January 2008 | 1,168,979 | - | - | - |
+-----------------------------------+-------------+-----------+----------+----------+
| Effect of amortisation of | 1,439 | - | - | - |
| intangible asset | | | | |
+-----------------------------------+-------------+-----------+----------+----------+
| Effect of impairment loss | (1,046,685) | - | - | - |
+-----------------------------------+-------------+-----------+----------+----------+
| Fair value adjustments | - | 1,168,979 | - | - |
+-----------------------------------+-------------+-----------+----------+----------+
| At 31 December 2008 | 123,733 | 1,168,979 | - | - |
+-----------------------------------+-------------+-----------+----------+----------+
A deferred tax asset of GBP275,000 (2007: GBP136,000) relating to losses of
Molectra Australia (Pty) Ltd has not been recognised, such tax would only become
recoverable in the event that Molectra Australia (Pty) Ltd becomes profitable in
future years. As at 31 December 2008, the future profitability could not be
foreseen with any certainty.
16 Share capital
+-------------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+-------------------------------------------------------+------------+------------+
| | GBP | GBP |
+-------------------------------------------------------+------------+------------+
| Authorised | | |
+-------------------------------------------------------+------------+------------+
| Founder shares of no par value | 10 | 10 |
+-------------------------------------------------------+------------+------------+
| Ordinary shares of no par value | Unlimited | Unlimited |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| Issued and fully paid: | | |
+-------------------------------------------------------+------------+------------+
| 2 founder shares of no par value | - | - |
+-------------------------------------------------------+------------+------------+
| 27,225,000 ordinary shares issued on 14 December | 272,250 | 272,250 |
| 2005 at 1p | | |
+-------------------------------------------------------+------------+------------+
| 98,000,000 ordinary shares issued on 22 December | 9,800,000 | 9,800,000 |
| 2005 at 10p | | |
+-------------------------------------------------------+------------+------------+
| 30,000,000 ordinary shares issued on 29 June 2006 | 4,500,000 | 4,500,000 |
| at 15p | | |
+-------------------------------------------------------+------------+------------+
| 48,000,000 ordinary shares issued on 12 August 2008 | 3,180,000 | - |
| at 6.625p | | |
+-------------------------------------------------------+------------+------------+
| 203,225,002 ordinary shares in issue (2007: | 17,752,250 | 14,572,250 |
| 155,225,002) | | |
+-------------------------------------------------------+------------+------------+
| Less admission costs off-set against share capital | (455,273) | (455,273) |
+-------------------------------------------------------+------------+------------+
| | 17,296,977 | 14,116,977 |
+-------------------------------------------------------+------------+------------+
Founder shares carry no right to vote at the general meeting of the company as
there are Participating Ordinary Shares in issue. Participating Ordinary shares
have priority on winding up the company.
The 48,000,000 ordinary shares were issued to acquire the remaining minority
interest in Molectra Australia Pty Limited and associated intellectual property
(see notes 18 and 25).
17 Net asset value per share
The asset value per ordinary share is based on the net assets attributable to
equity shareholders of GBP4,572,563 (2007: GBP14,471,151) and on 203,225,000
(2007: 155,255,000) ordinary shares in issue at the year end.
18 Purchase of minority interest
The company's total shareholding in Molectra Australia Pty Limited at 1 January
2008 was 58%.
On 28 March 2008, the company converted an intercompany loan note with a cost of
GBP798,545 (AUD$ 1,735,000) in exchange for a 6.3% stake in Molectra Australia
Pty Limited. This equated to an increase in the company's shareholding of 6.3%.
On 12 August 2008, the company issued 32 million shares in exchange for the
remaining shares in Molectra Australia Pty Limited, bringing its total
shareholding to 100%.
19 Financial assets and liabilities balance sheet classification
Group 2008
+--------------------------------+--------------+-----------+-----------+-----------+
| | Loans and | At fair | Non | Total |
| | receivables | value | financial | |
| | | through | assets | |
| | | profit | | |
| | | or | | |
| | | loss | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+-----------+-----------+-----------+
| Balance sheet headings - | | | | |
| assets | | | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| Intangible assets | - | - | 1,450,361 | 1,450,361 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Property, plant and equipment | - | - | 756,078 | 756,078 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Investments held at fair value | - | - | - | - |
| through profit and loss | | | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| Other receivables | 31,165 | - | - | 31,165 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Prepayments | - | - | 28,329 | 28,329 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Cash and cash equivalent | 2,988,486 | - | - | 2,988,486 |
+--------------------------------+--------------+-----------+-----------+-----------+
| | 3,019,651 | - | 2,234,768 | 5,254,419 |
+--------------------------------+--------------+-----------+-----------+-----------+
Group 2007
+--------------------------------+--------------+-----------+------------+------------+
| | Loans and | At fair | Non | Total |
| | receivables | value | financial | |
| | | through | assets | |
| | | profit | | |
| | | or | | |
| | | loss | | |
+--------------------------------+--------------+-----------+------------+------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+-----------+------------+------------+
| Balance sheet headings - | | | | |
| assets | | | | |
+--------------------------------+--------------+-----------+------------+------------+
| Intangible assets | - | - | 9,419,800 | 9,419,800 |
+--------------------------------+--------------+-----------+------------+------------+
| Property, plant and equipment | - | - | 588,400 | 588,400 |
+--------------------------------+--------------+-----------+------------+------------+
| Investments held at fair value | - | - | - | - |
| through profit and loss | | | | |
+--------------------------------+--------------+-----------+------------+------------+
| Other receivables | 219,321 | - | - | 219,321 |
+--------------------------------+--------------+-----------+------------+------------+
| Prepayments | - | - | 3,654 | 3,654 |
+--------------------------------+--------------+-----------+------------+------------+
| Cash and cash equivalent | 6,031,970 | - | - | 6,031,970 |
+--------------------------------+--------------+-----------+------------+------------+
| | 6,251,291 | - | 10,011,854 | 16,263,145 |
+--------------------------------+--------------+-----------+------------+------------+
Company 2008
+--------------------------------+--------------+-----------+-----------+-----------+
| | Loans and | At fair | Non | Total |
| | receivables | value | financial | |
| | | through | assets | |
| | | profit | | |
| | | or | | |
| | | loss | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+-----------+-----------+-----------+
| Balance sheet headings - | | | | |
| assets | | | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| Intangible assets | - | - | - | - |
+--------------------------------+--------------+-----------+-----------+-----------+
| Investment in subsidiaries | - | - | 99,999 | 99,999 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Property, plant and equipment | - | - | - | - |
+--------------------------------+--------------+-----------+-----------+-----------+
| Investments held at fair value | - | - | - | - |
| through profit and loss | | | | |
+--------------------------------+--------------+-----------+-----------+-----------+
| Loans | 2,758,866 | - | - | 2,578,866 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Prepayments | - | - | 15,860 | 15,860 |
+--------------------------------+--------------+-----------+-----------+-----------+
| Cash and cash equivalent | 2,002,393 | - | - | 2,002,393 |
+--------------------------------+--------------+-----------+-----------+-----------+
| | 4,761,259 | - | 115,859 | 4,877,118 |
+--------------------------------+--------------+-----------+-----------+-----------+
Company 2007
+--------------------------------+--------------+-----------+-----------+------------+
| | Loans and | At fair | Non | Total |
| | receivables | value | financial | |
| | | through | assets | |
| | | profit | | |
| | | or | | |
| | | loss | | |
+--------------------------------+--------------+-----------+-----------+------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+-----------+-----------+------------+
| Balance sheet headings - | | | | |
| assets | | | | |
+--------------------------------+--------------+-----------+-----------+------------+
| Intangible assets | - | - | - | - |
+--------------------------------+--------------+-----------+-----------+------------+
| Investment in subsidiaries | - | - | 7,927,683 | 7,927,683 |
+--------------------------------+--------------+-----------+-----------+------------+
| Property, plant and equipment | - | - | - | - |
+--------------------------------+--------------+-----------+-----------+------------+
| Investments held at fair value | - | - | - | - |
| through profit and loss | | | | |
+--------------------------------+--------------+-----------+-----------+------------+
| Other receivable | 537,633 | - | - | 537,633 |
+--------------------------------+--------------+-----------+-----------+------------+
| Prepayments | - | - | 3,654 | 3,654 |
+--------------------------------+--------------+-----------+-----------+------------+
| Cash and cash equivalent | 5,968,051 | - | - | 5,968,051 |
+--------------------------------+--------------+-----------+-----------+------------+
| | 6,505,684 | - | 7,931,337 | 14,437,021 |
+--------------------------------+--------------+-----------+-----------+------------+
Financial assets and liabilities balance sheet classification (continued)
Group 2008
+------------------------------------------+--------------+--------------+-----------+
| | Other | Non | Total |
| | financial | financial | |
| | liabilities | liabilities | |
+------------------------------------------+--------------+--------------+-----------+
| | GBP | GBP | GBP |
+------------------------------------------+--------------+--------------+-----------+
| Balance sheet headings - liabilities | | | |
+------------------------------------------+--------------+--------------+-----------+
| Trade and other payables | 192,035 | - | 192,035 |
+------------------------------------------+--------------+--------------+-----------+
| Accruals | - | 266,443 | 266,443 |
+------------------------------------------+--------------+--------------+-----------+
| Other payables | 99,645 | - | 99,645 |
+------------------------------------------+--------------+--------------+-----------+
| Deferred tax liabilities | - | 123,733 | 123,733 |
+------------------------------------------+--------------+--------------+-----------+
| | 291,680 | 390,176 | 681,856 |
+------------------------------------------+--------------+--------------+-----------+
Group 2007
+------------------------------------------+--------------+--------------+-----------+
| | Other | Non | Total |
| | financial | financial | |
| | liabilities | liabilities | |
+------------------------------------------+--------------+--------------+-----------+
| | GBP | GBP | GBP |
+------------------------------------------+--------------+--------------+-----------+
| Balance sheet headings - liabilities | | | |
+------------------------------------------+--------------+--------------+-----------+
| Trade and other payables | 248,074 | - | 248,074 |
+------------------------------------------+--------------+--------------+-----------+
| Accruals | - | 362,080 | 362,080 |
+------------------------------------------+--------------+--------------+-----------+
| Other payables | 12,860 | - | 12,860 |
+------------------------------------------+--------------+--------------+-----------+
| Deferred tax liabilities | - | 1,168,979 | 1,168,979 |
+------------------------------------------+--------------+--------------+-----------+
| | 260,934 | 1,531,059 | 1,791,993 |
+------------------------------------------+--------------+--------------+-----------+
Company 2008
+------------------------------------------+--------------+--------------+-----------+
| | Other | Non | Total |
| | financial | financial | |
| | liabilities | liabilities | |
+------------------------------------------+--------------+--------------+-----------+
| | GBP | GBP | GBP |
+------------------------------------------+--------------+--------------+-----------+
| Balance sheet headings - liabilities | | | |
+------------------------------------------+--------------+--------------+-----------+
| Trade and other payables | - | - | - |
+------------------------------------------+--------------+--------------+-----------+
| Accruals | - | 261,866 | 261,866 |
+------------------------------------------+--------------+--------------+-----------+
| Other payables | 42,689 | - | 42,689 |
+------------------------------------------+--------------+--------------+-----------+
| Deferred tax liabilities | - | - | - |
+------------------------------------------+--------------+--------------+-----------+
| | 42,689 | 261,866 | 304,555 |
+------------------------------------------+--------------+--------------+-----------+
Company 2007
+------------------------------------------+--------------+--------------+-----------+
| | Other | Non | Total |
| | financial | financial | |
| | liabilities | liabilities | |
+------------------------------------------+--------------+--------------+-----------+
| | GBP | GBP | GBP |
+------------------------------------------+--------------+--------------+-----------+
| Balance sheet headings - liabilities | | | |
+------------------------------------------+--------------+--------------+-----------+
| Trade and other payables | - | - | - |
+------------------------------------------+--------------+--------------+-----------+
| Accruals | - | - | - |
+------------------------------------------+--------------+--------------+-----------+
| Other payables | - | 353,618 | 353,618 |
+------------------------------------------+--------------+--------------+-----------+
| Deferred tax liabilities | - | - | - |
+------------------------------------------+--------------+--------------+-----------+
| | - | 353,618 | 353,618 |
+------------------------------------------+--------------+--------------+-----------+
20 Risk management objectives and policies
The Group and Company's financial instruments comprise cash balances and
receivables and payables that arise directly from its operations, for example,
accrued income with respect to deposit bank interest and purchases awaiting
settlement.
The main risks the Group and Company faces from its financial instruments are
(i) credit risk, (ii) interest rate risk and (iii) foreign exchange risk and
(iv) liquidity risk.
The Boards regularly reviews and agrees policies for managing each of these
risks. The company's policies for managing these risks are summarised below and
have been applied throughout the period. The numerical disclosures exclude
short-term debtors and creditors as their carrying amount is considered to be a
reasonable approximation of their fair value.
(i) Credit risk
Group and Company
Credit risk arises from cash and cash equivalents, deposits with banks and
financial institutions and accounts receivable.
Group
The Group and Company's cash and cash equivalents are mainly deposited with one
third party financial institution. The company is therefore at risk from the
failure of this third party institution. The maximum exposure to this credit
risk is GBP2,989,000 (2007: GBP6,032,000).
The group's and company's credit risk with respect to other receivables is
minimal.
The Group's credit exposure with respect to other receivables of GBP59,000
(2007: GBP223,000) has been reviewed for indicators of impairment. No provision
was deemed necessary. The age of the other receivables past due (over 60 days)
but not impaired is not more than 6 months.
(ii) Interest rate risk
The interest rate risk profile of financial assets of the Group and Company at
the balance sheet date was as follows:
+-------------------------------------------------------+-----------+-----------+
| | Fixed | Floating |
| | interest | interest |
+-------------------------------------------------------+-----------+-----------+
| | GBP | GBP |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| Sterling cash deposit | 1,997,393 | 5,000 |
+-------------------------------------------------------+-----------+-----------+
| Australian dollar cash deposit | 971,701 | 14,392 |
+-------------------------------------------------------+-----------+-----------+
| | 2,969,094 | 19,392 |
+-------------------------------------------------------+-----------+-----------+
The group and company have minimal exposure to interest rate risks with no
external third party borrowing and majority of cash and cash equivalents being
denominated in fixed interest accounts.
As at 31 December 2008, if interest rates had increased by 0.5%, pre-tax losses
would have decreased by GBP1,000. If interest rates had decreased by 0.5%
pre-tax losses would have accordingly increased by GBP1,000. In the opinion of
the directors, a 0.5% change is a reasonably probable estimate and reflects
current market conditions.
Risk management objectives and policies (continued)
(iii) Foreign exchange risk
The group has an overseas operation in Australia which gives rise to limited
exposure to foreign exchange risk arising primarily with respect to the
Australian Dollar currency. Foreign exchange risk mainly arises from future
commercial transactions with investments in the foreign operation.
Group
As at 31 December 2008, if the Sterling had strengthened by 10% against the
Australian Dollar, with all other variables being constant the net assets of the
group on translation of the foreign subsidiary would have decreased by
GBP14,000, being recognised within equity.
If the Sterling had weakened by 10% against the Australian Dollar, with all
other variables being constant the net assets of the group on translation of the
foreign subsidiary would have increased by GBP17,000 being recognised within
equity.
As at 31 December 2008, the effect of any foreign exchange movement to the group
income statement is not deemed to be material.
Company
The company's foreign exchange risk is minimal.
Currency exposure
Group
An analysis of the group's currency exposure is detailed below:
+----------------------------------+----------+--------------+----------+--------------+
| | 2008 | 2008 | 2007 | 2007 |
+----------------------------------+----------+--------------+----------+--------------+
| | Net | Unlisted | Net | Unlisted |
| | monetary | investments | monetary | investments |
| | assets | | assets | |
+----------------------------------+----------+--------------+----------+--------------+
| | GBP | GBP | GBP | GBP |
+----------------------------------+----------+--------------+----------+--------------+
| | | | | |
+----------------------------------+----------+--------------+----------+--------------+
| Australian Dollar | 776,000 | - | (9,000) | - |
+----------------------------------+----------+--------------+----------+--------------+
The net monetary assets in foreign subsidiary includes cash and cash equivalents
of GBP986,000 (2007: GBP64,000) trade and other receivables of GBP44,000 (2007:
GBP190,000) and trade and other payables of GBP254,000 (2007: GBP263,000).
Company
The currency exposure in the company is not material.
(iv) Liquidity risk
Group and Company
The liquidity risk is not deemed to be material to the Group or company as at 31
December 2008. The Group and company had sufficient cash reserves of GBP3m and
GBP2m respectively (2007: GBP6m and GBP6m respectively).
As at 31 December 2008, the company has other payables of GBP43,000 (2007:
GBP354,000) payable within 3 months from the year-end.
The group has trade and other payables of GBP292,000 (2007: GBP261,000) payable
within 3 months from the year end.
21 Capital management policies and procedures
The group's objectives when managing capital are to safeguard the group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust
the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt.
We constantly review our capital structure. Due to the current liquidity
position there is no requirement for any loans or capital or shares buyback.
There are no externally imposed capital requirements.
The group monitors capital on the basis of the working capital, cash balances,
monthly and yearly forecasts. Total capital is calculated as 'equity' which
comprises share capital and reserves as shown in consolidated statement of
changes in equity.
22 Capital commitments
Group and Company
There were no capital commitments at 31 December 2008 or 31 December 2007.
23 Contingent assets/liabilities
There were no contingent liabilities in the group or company at 31 December 2008
or 31 December 2007.
24 Directors interests and remuneration
The total compensation paid to directors over the year was GBP148,139 (2007:
GBP47,955), split between salaries amounting to GBP107,925 (2007: GBPnil), and
fees amounting to GBP40,214 (2007: GBP47,955).
Nigel William Wray, who resigned on 11 June 2008, controls or is beneficially
interested in 40.31% of the partnership capital of PIHL Equity LLP, which owns
17,500,000 shares in the company.
Roger Maddock owns 250,000 ordinary shares, Rodger Sargent owns 3,000,000
ordinary shares and
Paul Gazzard owns 3,500,000 ordinary shares.
25 Transactions with directors /and other related parties
Virotec Investments Pty Limited hold 30,000,000 shares and Brian Sheeran was
both deputy Chairman of the Company (until his resignation on 13 June 2008) and
Executive Chairman of Virotec International plc.
Company
During the year, the company waived loans amounting to GBP5.38m with Molectra IP
Developments Limited, a subsidiary undertaking.
During the year, the company issued 16m shares to Molectra Holdings (Mauritius)
Limited in exchange for the residual intellectual property rights it had
retained in the Molectra recycling process. At the time of the transaction, John
Dobozy was a director of both the company and Molectra Holdings (Mauritius)
Limited.
Transactions with directors /and other related parties (continued)
During the year, the company converted an intercompany loan note with a cost of
GBP798,545 (AUD$ 1,735,000) in exchange for a 6.3% stake in Molectra Australia
Pty Limited.
At the year end, the company had a loan receivable outstanding from Molectra
Australia Pty Limited of GBP1.7m (2007: GBP511,000).
26 Subsequent events
On 18 March 2009, the company repurchased 30m shares from Andrew Dickson and
Peter Dickson at a cost of GBP300,000, representing a price of 1p per share.
On 24 March 2009, the company adopted a new share option scheme, under which the
company has authority to grant options to employees or directors of, and
consultants to, the company and any of its subsidiaries. The number of shares
under issue cannot exceed 10% of the company's issued share capital as at the
date of grant.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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