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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Bgenuinetec | LSE:BGTI | London | Ordinary Share | JP3420970000 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMBGTI RNS Number : 5424T BgenuineTec Inc. 30 September 2010 30 September 2010 BGENUINETEC INC. ("BgenuineTec", "BGT" or "the Company") Interim Results for six months ended 30 June 2010 BgenuineTec (AIM:BGTI), the biometrics business specialising in fingerprint authentication, announces its interim results for the six months ended 30 June 2010. BgenuineTec is based in Tokyo, and is the only Japanese company listed on AIM. +-------------------------+-----------+-----------+-----------+-------------+ | | 20010 | 2009 | 2010 | 2009 | +-------------------------+-----------+-----------+-----------+-------------+ | | JPY'000 | JPY'000 | GBP | GBP | +-------------------------+-----------+-----------+-----------+-------------+ | Continuing operations | | | | | +-------------------------+-----------+-----------+-----------+-------------+ | Revenue | 29,674 | 37,053 | 222,997 | 278,446 | +-------------------------+-----------+-----------+-----------+-------------+ | Gross profit | 15,975 | (10,602) | 120,053 | (79,674) | +-------------------------+-----------+-----------+-----------+-------------+ | Loss from operations | (109,460) | (130,739) | (822,576) | (982,482) | +-------------------------+-----------+-----------+-----------+-------------+ | Loss before tax | (111,552) | (200,385) | (838,297) | (1,505,860) | +-------------------------+-----------+-----------+-----------+-------------+ | | | | | | +-------------------------+-----------+-----------+-----------+-------------+ | Basic loss per share | (1.38) | (3.14) | (0.010) | (0.024) | +-------------------------+-----------+-----------+-----------+-------------+ | Diluted loss per share | - | - | - | - | +-------------------------+-----------+-----------+-----------+-------------+ Highlights · Revenue GBP0.22m (2009: GBP0.28m) · Gross profit of GBP0.12m (2009: gross loss of GBP0.08m) · Loss before tax decreased by 44.3% to GBP0.84m (2009: GBP1.51m) · Continued investment into research and development · Strengthened sales team through a number of key appointments NOTE: The exchange rate used throughout this announcement: GBP1:JPY133.07 For further information, please contact: +-------------------------------+---------------------------------------+ | BGENUINETEC INC. | | +-------------------------------+---------------------------------------+ | Taketoshi Kashiwabara, | Tel: +81-3-5652-0321 | | Chairman | | +-------------------------------+---------------------------------------+ | Toshiya Kurita, Chief | Tel: +81-3-5652-0321 | | Financial Controller | | +-------------------------------+---------------------------------------+ | | | +-------------------------------+---------------------------------------+ | | | +-------------------------------+---------------------------------------+ | Charles Stanley Securities | | +-------------------------------+---------------------------------------+ | Nominated Adviser | Tel: +44 (0) 20 7149 6000 | +-------------------------------+---------------------------------------+ | Russell Cook/Dugald Carlean | | +-------------------------------+---------------------------------------+ | | | +-------------------------------+---------------------------------------+ | Walbrook PR Ltd | | +-------------------------------+---------------------------------------+ | Paul McManus | Tel: +44 (0) 20 7933 8787 | +-------------------------------+---------------------------------------+ | | Mob: +44 (0) 7980 541 893 | +-------------------------------+---------------------------------------+ | | Email: paul.mcmanus@walbrookpr.com | +-------------------------------+---------------------------------------+ Background on BgenuineTec On 14 July 2006, BgenuineTec (under its original name of Secure Design) became the first Japanese company to be admitted to trading on AIM. It offers fingerprint authentication products to companies and individuals that wish to establish high levels of security using biometrics. Biometrics uses a physical attribute of the body, such as a fingerprint to identify and verify the individual with the aim of making individual authentication efficient and secure. The Company offers a range of fingerprint authentication products and systems, from an integrated system to a mobile device. The Company designs and outsources the production of these products and can tailor them to individual client specific needs and applications. Biometric applications provide convenient and reliable security which reduces the cost associated with the failure of conventional authentication methods. The principal factor which distinguishes biometrics from conventional password based authentication is the enhanced security level it provides while maintaining the privacy of individual users. The worldwide demand for biometrics is estimated to increase from just over $3 billion in 2007 to over $5.6 billion by 2010 (Biometrics Market and Industry Report 2007-2012). Chairman's Statement BGT has continued to explore opportunities in both domestic and international security markets during the period. We have maintained our investment in developing innovative products and services and have progressed our mobile phone business by bringing a feasible and industry proven solution to vendors, in partnership with sensor companies. However, the current recession in Japan, combined with a need to expand our sales resources, has negatively impacted our financial performance during the period. Our 'door lock and chip' offering generated a steady stream of sales throughout the six months but failed to generate sufficient revenues to enable us to successfully penetrate our other target markets. As a result the Company has reported turnover in the period of JPY 29.67 million (GBP222,997) and a loss before tax of JPY 111.6 million (GBP838,297). These interim results have been prepared by management on a "going concern" basis, as set out in Note 2 below. This is based upon an expectation that the Company can successfully raise sufficient funds later this year to execute the Company's business plan. Further details of such a fundraising are expected to be announced shortly. On a more positive note we enjoyed considerable success in reducing our cost base, without impacting our ability to do business, such that we were able to report a 46% decrease in pre-tax losses when compared to the same period last year. We are currently implementing a business plan focussing on the use of lower cost core components and modules for our technology platform. This will enable us to reduce our operating costs while simultaneously allowing us to lower the pricing of our solutions, ultimately leading to improvements in sales. In addition, we plan to incorporate a wholly owned subsidiary, for our planned operations based in China, with a view to developing this market in co-operation with local Chinese companies. We are still looking at opportunities to exploit our leading edge technology in this prospective market and believe that the strategic progress we are making in reducing the pricing of our solutions, while maintaining quality, will provide us with a significant competitive advantage in China. Finally, we are delighted to announce the appointments of Mr. Yoshiro Kido and, Mr. Takashi Kusube as operating advisors to the Companyand Mr. Nishitani as a financial advisor. Mr. Kido is a former president of Sony Ericsson Mobile Communication Japan Inc. where he introduced the first smart phone "XPERIA" through NTT-docomo; Mr. Kusube is a former president of Artist House Inc., publishers of several successful magazines and films; and Mr. Nishitani has considerable experience in the financial sector , having worked at Kasumigaseki Audit Corporation, Japan. Mr. Kido and Mr. Kusube will focus on selling our fingerprint products through their established business channels. Their efforts have already resulted in us commencing negotiations with both existing and potential customers across the globe. These appointments will add considerable strength to our sales resources allowing us to more rapidly penetrate the growing global demand for fingerprint based security solutions. Results Turnover in the period was JPY 29.67 million (GBP222,997), which was 19.91% lower compared to the results achieved in first half of 2009 when the Company reported sales of JPY37.05 (GBP 278,446). The loss before tax decreased by 44.3% to JPY 111.6 million (GBP838,297) compared to JPY 200.4 million (GBP1,505,860). The loss per share improved by 56.1% to JPY 1.38 (0.01p) compared to JPY 3.14 (0.024p) in first half of 2009. Operating review In the first six months of the year, we have focused on improving our algorithms for our mobile phone fingerprint product and a flexible design of a new LSI at a competitive cost. Although we were not able to achieve our revenue targets for the period, our R&D results have delivered powerful algorithms for future products and improved design of new fingerprint LSI. We are actively looking to increase the sales of our products based on the new business model while at the same time developing a range of innovative products for international markets. Operating expenses Operating expenses in the period were JPY 125 million (GBP 942,628), which were slightly lower compared to those for the first half of 2009 mainly due to a decrease in personnel expenses. Cash Balance The cash balance at the end of the period was JPY 0.4 million (GBP2,970), reflecting poor sales activity. The Company will be seeking to raise further funds during the second half of the year for working capital and the continued development of the Company. The details of which will be announced in due course. Dividend At this stage in the Company's development, the directors do not intend to declare a dividend. Employees I would like to take this opportunity to thank all our employees for their hard work, dedication and commitment during this period. Commercial Initiatives We are currently focusing our efforts on developing physical and logical locks to control access to houses and servers. In cooperation with Hori Lock, we are developing fingerprint locks that combine higher quality and lower cost than has been achieved before by any of our competitors. These new locks will be branded as "high quality and low cost"and we expect to start volume production within the current year. The successful deployment of our fingerprint technology on Sharp mobile phones has led us to commence a "mobile cloudwith fingerprint mobile phones" initiative in cooperation with various system integrators, to attempt to address the mobile and wireless environment security issues. Our mobile phone technology offers a simplistic and secure solution to accessing cloud services such as SaaS, PaaS and IaaS. The initiatives we are taking are discussed in greater detail below: Mobile Phones Our core business for mobile phones is to provide software or hardware solutions, which consist of an algorithm (or chip), sensors and middleware, to embedded systems such as mobile phones. BGT works as a solution provider to those embedded fingerprint systems in cooperation with a variety of sensor suppliers. The success we have experienced to date with Sharp's mobile phone provides us with a platform from which to offer these industry proven solutions to other mobile phone companies using swipe sensors. We currently provide the software element of these solutions to mobile phone companies in Japan and China for basic user authentication and data protection only. However, we expect to implement our full solution together with sensors or chipswith these customers in the spring of 2011. It is our intention to identify the final end customer who will accept our solution in conjunction with a major sensor company. Upon approval from a major sensor company, BGT intends to create a project team consisting of engineers dedicated to the development of our solutions for both embedded and application software on the mobile platform. The team will work in conjunction with device engineers from the major sensor company in question, as well as application engineers from mobile application software companies in Japan. Our target market for this year includes mobile handset providers including Sharp, Panasonic and Fujitsu. Note PCs It is our belief that Note PCs are expected to require fingerprint user authentication not only for PC access security, but also network / web security. . Currently available on Note PCs for enterprise usage, fingerprint authentication security functions are expected to be pre-installed as standard on all new Note PCs in the future according to many Note PC vendors. Currently, our software solution for the Note PC platform is well recognised and well used. We work with Validity and other sensor companies so to bring our various software solutions to Note PC / Net PC companies. The main application field of Validity sensors is Note PCs, especially for enterprise use. BGT intends to partner with sensor suppliers on the sale of solutions to the global Note PC market, where we are requested to customise our solutions according to the demands of the PC vendors. We expect this business will deliver a profit within the next twelve months following an extensive sales promotion. Network Business The demands of marketing high security fingerprint authentication solutions for IC cards are increasing in the Japanese market. Many information security applications require fingerprint modules with different kinds of area sensors. As a growing sector worldwide, we aim to focus on this growing market, particularly in China. The sensors of our partner company, Fingerprint cards AB (FPC), located in Sweden, are highly rated for their durability against ESD (Electrostatic discharge) and physical damage. We are working closely with FPC and our innovative technology will enable us to market the new modules outside Japan. There are currently two projects being planned. One is to develop and sell a wireless handheld fingerprint authenticator for the iPhone, to be used by internal staff at local banks. The other is to develop a model of a total security system, consisting of fingerprint security boxes and hotel room locks, for golf resort complexes. In cooperation with TM link and Silex, we will provide solutions for wireless modules for portable authenticators and control modules for fingerprint authentication. If these two projects are successfully launched, we will develop PC security software with the Validity capture box and bring these solutions to the Japanese market. Two factor authentication, including both fingerprint and smart card authentication, is currently in demand from financial sectors and many big enterprises. Even through the use of low cost chips, we are able to provide device solutions, which are far more secure than those currently found on PCs. Door Lock Door Locks are a traditional application for our fingerprint module business. However, there have been very few successful fingerprint door lock businesses that have managed to balance the demand for quality with the need for reasonable pricing. We have been planning a new project to provide a solution to this problem in conjunction with the Japanese Lock Association and a major Chinese fingerprint door lock company, Changchun Hongda Opto-electron Co., Ltd. We will work together with these partners, not only in developing a high quality door lock at a competitive price, but also on sales and marketing and exploiting their sales channels to house builders. Furthermore, we aim to identify high quality distributors capable of introducing the fingerprint door locks into various new markets, from OA door locks to hotel door locks and high security entrance door locks. Sensor Distribution Sensors are the device interface and are a key component in any fingerprint authentication business. BGT's technology has been adapted to work with a wide variety of sensors such that we are able to provide low cost, high performance solutions to numerous problems. As a distributor of Fingerprint Cards (FPC sensors in Japan), we have developed a new fingerprint module, with FPC area sensors, which has initially been well received by Chinese market. Validity Sensors Inc., which is currently the second largest fingerprint sensor company focusing on Note PC business, is evaluating BGT's algorithm for use in its new embedded systems business. Negotiation for business cooperation and alliance is currently being undertaken between BGT and Validity Sensors with regard to Validity Sensors, mobile phone and other embedded business. Sensor distribution is not BGT's core business, but through running a sensor distribution business alongside our module business we expect to be able to reduce costs for the sensors used in our modules. Module Business Our core business is to provide a software or a hardware solution which integrates various embedded fingerprint authentication systems with various kinds of sensors. These authentication systems will typically be for use on Note PCs or mobile phones, and consist of an algorithm (or chip), sensors and middleware. BGT is able to design and provide more sophisticated LSI (Large Scale Integrated circuit) at a lower price. New LSI Fchip3 will integrate more chips such as flashROM and SRAM etc, so as to reduce both cost and size of modules, which will enable more applications to use the modules and expand the market place. Many sensor makers intend to develop sensor modules which will combine both a sensor and an authentication engine together. We intend to provide Engine IP with our fingerprint algorithm for various sensors , so that they can develop their one-chip sensor with a fingerprint authentication function. BGT can expect to receive both an initial payment for provision of the engine IP along with a percentage of revenues from volume sales of the chips to those sensor makers. By partnering with Kunieda LSI laboratory at Tokyo's Institute of Technology, we expect to be able to design and provide the aforementioned chips at low cost. We will partner with Shenyang BeyondLSI Inc. to sell these modules to the Chinese market, opening our own sales and marketing office in Shanghai, China. Outlook Our various attempts did not achieve the fruitful results until today, because of 1) lack of sales efforts, 2) lack of new products, 3) lack of the cost controls. The board is expecting sales of door locks and chips products along with modules .. The Board is anticipating the China market to contribute to the sales effort..(1) The Company will continue its R&D efforts so as to penetrate the fingerprint technology market both reliably and cost effectively. There are several opportunities to be exploited in semiconductor technology. (2) We will continue to manage our costs. We are implementing a business model using our existing engineering and technology platform, focusing particularly on both core components and low cost modules. (3) Taketoshi Kashiwabara Chairman 30 September 2010 Note: Exchange rate per Pound (GBP) for the above conversions is JPY 133.07, which has been derived from the TTM rate on June/End, 2010. +--------------------------------+-----------+-----------+-----------+-------------+ | Income Statement | | | | +--------------------------------------------+-----------+-----------+-------------+ | for the period from 01 January | | | | | | to 30 June | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | | 2010 | 2009 | 2010 | 2009 | +--------------------------------+-----------+-----------+-----------+-------------+ | | JPY'000 | JPY'000 | GBP | GBP | | | | | (Note | (Note | | | | | 5) | 5) | +--------------------------------+-----------+-----------+-----------+-------------+ | Revenue | 29,674 | 37,053 | 222,997 | 278,446 | +--------------------------------+-----------+-----------+-----------+-------------+ | Cost of sales | (13,699) | (47,655) | (102,944) | (358,120) | +--------------------------------+-----------+-----------+-----------+-------------+ | Gross profit (loss) | 15,975 | (10,602) | 120,053 | (79,674) | +--------------------------------+-----------+-----------+-----------+-------------+ | Other operating income | 3,214 | 3,794 | 24,155 | 28,515 | +--------------------------------+-----------+-----------+-----------+-------------+ | Sales and marketing expenses | (8,030) | (9,651) | (60,346) | (72,527) | +--------------------------------+-----------+-----------+-----------+-------------+ | General and administrative | (91,361) | (95,161) | (686,567) | (715,119) | | expenses | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Research and development | (22,829) | (19,119) | (171,560) | (143,677) | | expenses | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Loss from operations | (109,460) | (130,739) | (822,576) | (982,482) | +--------------------------------+-----------+-----------+-----------+-------------+ | Finance income | 457 | 255 | 3,438 | 1,916 | +--------------------------------+-----------+-----------+-----------+-------------+ | Finance costs | (5,178) | (215) | (38,908) | (1,612) | +--------------------------------+-----------+-----------+-----------+-------------+ | Net finance income (costs) | (4,721) | 40 | (35,470) | 304 | +--------------------------------+-----------+-----------+-----------+-------------+ | Gain recognised on disposal of | 2,628 | - | 19,749 | - | | interest in former associate | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Impairment loss on equity | - | (64,869) | - | (487,480) | | accounted investee | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Share of loss of equity | - | (4,817) | - | (36,202) | | accounted investee | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Loss before tax | (111,552) | (200,385) | (838,297) | (1,505,860) | +--------------------------------+-----------+-----------+-----------+-------------+ | Income tax expenses | - | - | - | - | +--------------------------------+-----------+-----------+-----------+-------------+ | Loss for the period | (111,552) | (200,385) | (838,297) | (1,505,860) | +--------------------------------+-----------+-----------+-----------+-------------+ | | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Attributable to: | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Owners of the Company | (111,552) | (200,385) | (838,297) | (1,505,860) | +--------------------------------+-----------+-----------+-----------+-------------+ | Non-controlling interests | - | - | - | - | +--------------------------------+-----------+-----------+-----------+-------------+ | | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ | Basic loss per share (Note 3) | (1.38) | (3.14) | (0.010) | (0.024) | +--------------------------------+-----------+-----------+-----------+-------------+ | Diluted loss per share (Note | (1.38) | (3.14) | (0.010) | (0.024) | | 3) | | | | | +--------------------------------+-----------+-----------+-----------+-------------+ +--------------------------------+-----------+------------+-----------+-------------+ | Statement of comprehensive income | +-----------------------------------------------------------------------------------+ | for the period from 01 January | | | | | | to 30 June | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | | 2010 | 2009 | 2010 | 2009 | +--------------------------------+-----------+------------+-----------+-------------+ | | JPY'000 | JPY'000 | GBP | GBP | | | | | (Note | (Note | | | | | 5) | 5) | +--------------------------------+-----------+------------+-----------+-------------+ | Loss for the period | (111,552) | (200,385) | (838,297) | (1,505,860) | +--------------------------------+-----------+------------+-----------+-------------+ | Other comprehensive income | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | Financial assets available for | | | | | | sale: | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | -Change in fair value | - | 13,462 | - | 101,161 | +--------------------------------+-----------+------------+-----------+-------------+ | -Income tax expense | - | (5,451) | - | (40,960) | +--------------------------------+-----------+------------+-----------+-------------+ | Other comprehensive income for | - | 8,011 | - | 60,201 | | the period | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | Total comprehensive loss for | (111,552) | (192,374) | (838,297) | (1,445,659) | | the period | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | Attributable to: | | | | | +--------------------------------+-----------+------------+-----------+-------------+ | Owners of the Company | (111,552) | (192,374) | (838,297) | (1,445,659) | +--------------------------------+-----------+------------+-----------+-------------+ | Non-controlling interests | - | - | - | - | +--------------------------------+-----------+------------+-----------+-------------+ +--------------------------+-------------+-------------+--------------+--------------+ | Statement of Financial Position | +------------------------------------------------------------------------------------+ | | As at | As at | As at | As at 31 | | | 30 | 31 | 30 June | December | | | June | December | | | +--------------------------+-------------+-------------+--------------+--------------+ | | 2010 | 2009 | 2010 | 2009 | +--------------------------+-------------+-------------+--------------+--------------+ | | JPY'000 | JPY'000 | GBP | GBP | | | | | (Note | (Note 5) | | | | | 5) | | +--------------------------+-------------+-------------+--------------+--------------+ | Assets | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Non-current assets | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Property, plant and | 2,714 | 3,133 | 20,398 | 23,542 | | equipment | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Investment securities | 3,076 | 6,446 | 23,116 | 48,440 | +--------------------------+-------------+-------------+--------------+--------------+ | Intangible assets | 4,572 | 19,856 | 34,357 | 149,217 | +--------------------------+-------------+-------------+--------------+--------------+ | Other non-current assets | 2,902 | 4,574 | 21,809 | 34,378 | +--------------------------+-------------+-------------+--------------+--------------+ | | 13,264 | 34,009 | 99,677 | 255,577 | +--------------------------+-------------+-------------+--------------+--------------+ | | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Current assets | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Inventories | 4,459 | 17,680 | 33,514 | 132,865 | +--------------------------+-------------+-------------+--------------+--------------+ | Trade and other | 11,168 | 14,649 | 83,931 | 110,082 | | receivables | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Cash and cash | 395 | 804 | 2,970 | 6,040 | | equivalents | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | | 16,022 | 33,133 | 120,415 | 248,987 | +--------------------------+-------------+-------------+--------------+--------------+ | Total assets | 29,288 | 67,142 | 220,099 | 504,564 | +--------------------------+-------------+-------------+--------------+--------------+ | | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Liabilities | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Current liabilities | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Loans and borrowings | 16,661 | 166 | 125,207 | 1,250 | +--------------------------+-------------+-------------+--------------+--------------+ | Trade and other payables | 171,435 | 143,604 | 1,288,305 | 1,079,158 | +--------------------------+-------------+-------------+--------------+--------------+ | Provision for asset | - | 1,600 | - | 12,024 | | retirement obligation | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | | 188,096 | 145,370 | 1,413,512 | 1,092,432 | +--------------------------+-------------+-------------+--------------+--------------+ | Net current assets | (172,074) | (112,237) | (1,293,109) | (843,445) | +--------------------------+-------------+-------------+--------------+--------------+ | Total liabilities | 188,096 | 145,370 | 1,413,512 | 1,092,432 | +--------------------------+-------------+-------------+--------------+--------------+ | Net assets | (158,808) | (78,228) | (1,193,413) | (587,868) | +--------------------------+-------------+-------------+--------------+--------------+ | | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Equity | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Share capital | 962,339 | 946,834 | 7,231,826 | 7,115,308 | +--------------------------+-------------+-------------+--------------+--------------+ | Share premium | 719,218 | 703,750 | 5,404,804 | 5,288,569 | +--------------------------+-------------+-------------+--------------+--------------+ | Share option reserve | 16,050 | 16,050 | 120,618 | 120,618 | +--------------------------+-------------+-------------+--------------+--------------+ | Deficit | (1,856,415) | (1,744,862) | (13,950,661) | (13,112,363) | +--------------------------+-------------+-------------+--------------+--------------+ | Total equity | (158,808) | (78,228) | (1,193,413) | (587,868) | | attributable to owners | | | | | | of the Company | | | | | +--------------------------+-------------+-------------+--------------+--------------+ | Total equity | (158,808) | (78,228) | (1,193,413) | (587,868) | +--------------------------+-------------+-------------+--------------+--------------+ +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Statement of Changes in Equity | | | +------------------------------------------------------------------------+-----------+-------------+ | for the period from | | | | | | | 01 January to 30 June | | | | | | +--------------------------------------+---------+---------+-------------+-----------+-------------+ | | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | | | | | | | JPY'000 | GBP | | | | | | | | | (Note | | | | | | | | | 5) | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | | Attributable to owners of the Company | +----------------+---------------------------------------------------------------------------------+ | | Share | Share | Fair | Share | Deficit | Total | Total | | | capital | premium | value | option | | equity | equity | | | | | reserve | reserve | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Balance at 1 | 867,614 | 625,164 | - | 25,967 | (1,364,195) | 154,550 | 1,161,419 | | January 2009 | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Net loss for | - | - | - | - | (200,385) | (200,385) | (1,505,860) | | the period | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Fair value | - | - | 8,011 | - | - | 8,011 | 60,201 | | adjustments of | | | | | | | | | available-for | | | | | | | | | sales | | | | | | | | | investments, | | | | | | | | | net of tax | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Total | - | - | 8,011 | - | (200,385) | (192,374) | (1,445,659) | | comprehensive | | | | | | | | | loss | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Share issued | 51,000 | 51,000 | - | - | - | 102,000 | 766,514 | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Share issuance | - | (310) | - | - | - | (310) | (2,329) | | costs | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Share option | - | - | - | 2,134 | - | 2,134 | 16,032 | | costs charged | | | | | | | | | to income for | | | | | | | | | the period | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Balance as at | 918,614 | 675,854 | 8,011 | 28,101 | (1,564,580) | 66,000 | 495,977 | | 30 June 2009 | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Balance at 1 | 946,834 | 703,750 | - | 16,050 | (1,744,862) | (78,228) | (587,868) | | January 2010 | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Net loss for | - | - | - | - | (111,552) | (111,552) | (838,297) | | the period | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Total | - | - | - | - | (111,552) | (111,552) | (838,297) | | comprehensive | | | | | | | | | loss | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Share issued | 15,505 | 15,505 | - | - | - | 31,010 | 233,035 | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Share issuance | - | (37) | - | - | - | (37) | (283) | | costs | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ | Balance as at | 962,339 | 719,218 | - | 16,050 | (1,856,414) | (158,807) | (1,193,413) | | 30 June 2010 | | | | | | | | +----------------+----------+----------+---------+---------+-------------+-----------+-------------+ +--------------------------+----------+-----------+-----------+-----------+ | Statement of Cash Flows | | | +-------------------------------------------------+-----------+-----------+ | for the period from 01 January to | | | | | 30 June | | | | +-------------------------------------+-----------+-----------+-----------+ | | 2010 | 2009 | 2010 | 2009 | +--------------------------+----------+-----------+-----------+-----------+ | | JPY'000 | JPY'000 | GBP | GBP | | | | | (Note | (Note 5) | | | | | 5) | | +--------------------------+----------+-----------+-----------+-----------+ | Operating Activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Cash used in operations | (48,704) | (89,855) | (366,005) | (675,245) | +--------------------------+----------+-----------+-----------+-----------+ | Interest received | (506) | 254 | (3,806) | 1,916 | | (paid), net | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Net cash used in | (49,211) | (89,601) | (369,811) | (673,339) | | operating activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Investing activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Acquisition of associate | 1,349 | (3,000) | 10,140 | (22,545) | | company | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Acquisition of other | - | (25,000) | - | (187,871) | | investments | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Increase of short-term | - | (22,888) | - | (171,996) | | lending | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Net cash used in | 1,349 | (50,888) | 10,140 | (382,412) | | investing activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Financing activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Proceeds from loans and | 16,661 | 18,000 | 125,207 | 135,267 | | borrowings | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Repayments of short-term | (166) | - | (1,250) | - | | loans and borrowings | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Proceeds on issue of new | 30,972 | 101,690 | 232,753 | 764,185 | | shares, net of issuance | | | | | | cost | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Net cash from financing | 47,467 | 119,690 | 356,710 | 899,452 | | activities | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Net decrease in cash and | (394) | (20,799) | (2,961) | (156,299) | | cash equivalents | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Effect of exchange rate | (15) | 9 | (109) | 71 | | fluctuations on cash | | | | | | held | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Cash and cash | 804 | 45,237 | 6,040 | 339,948 | | equivalents at beginning | | | | | | of year | | | | | +--------------------------+----------+-----------+-----------+-----------+ | Cash and cash | 395 | 24,447 | 2,970 | 183,720 | | equivalents at end of | | | | | | period | | | | | +--------------------------+----------+-----------+-----------+-----------+ 1. General Information This interim report was approved by the Directors on 21September 2010. The results for the both of current and comparative half year have not been audited, but were the subject of an independent review carried out by independent auditors, Chiyoda International CPA Office. Their review confirmed that the figures were prepared using accounting policies and practices consistent with those adopted in the 2009 annual report. The audited results for the year ended 31 December 2009 are an abridged version of the company's financial statements which the predecessor auditor, Kainan Audit Corporation gave an unqualified report. 2. Going concern These consolidated financial statements have been prepared by management on the basis of generally accepted accounting principles applicable to a "going concern", which assumes the Company will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities in the normal course of operations. The Company posted a continuing net loss of JPY 111,552 thousand (GBP838,297) in the first half ended 30 June 2010, JPY 380,667 thousand in December 2008, and JPY 537,923 thousand in December 2008. Net loss for this period was mainly due to poor sales results of JPY 29,674 thousand (GBP222,997) and losses on impairment loss on intangible asset and equity accounted investee of JPY 20.6 million (GBP154,843). These consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate because management believes that for the year ended 31 December 2010 the Company will still declare a loss can successfully raise sufficient funds later this year to execute the business plan. If the going concern assumption were not appropriate for the consolidated financial statements, then an adjustment would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses and the balance sheet classification used. 3. Loss per share Basic loss per share is calculated on loss for the period of JPY111,552 thousand (GBP838,297) divided by 80,772,163 weighted average ordinary shares in the period ended 30 June 2010 and loss for the period of JPY200,385 thousand (GBP1,505,860) divided by 63,744,261 weighted average ordinary shares in the period ended 30 June 2009. There were no factors resulting in a dilution of loss per share. 4. Dividend paid No dividends were paid and approved for the period. 5. British pound sterling equivalent The British pound sterling equivalents of the figures shown in these interim consolidated financial statements are supplementary information and have been translated at JPY133.07 to STG?1. Such translation should not be construed as representation that the Japanese yen amounts represent, or have been or could be converted into British pound at that or any other rate. 6. Change in scope of equity accounted investee The Company held 24.93% of ownership of Beyond LSI, Inc. and 30.00% of ownership of ASD Inc, as of 31 December 2009, which was accounted using equity method under IAS 28 through fiscal year ended 31 December 2009. However, the ownership of both companies were decreased to less than 20% and the Company do not have significant influence over the investments for the period ended 30 June, 2010. Investments in Beyond LSI, Inc and ASD Inc, were re-evaluated at fair value in accordance with IAS 28. This transaction has resulted in the recognition of a gain of JPY2,628,000 (?19,749) in profit or loss for the period ended 30 June, 2010. 7. Related Party Transactions +--------------+-------------+------------+------------+------------+---------+--------+ | (Unit: | Mr. | Mr. | Mr. | Mr.Evans | Fuji | Techno | | JPY'000) | Kashiwabara | Kunieda | Li | (Director) | Digital | | | | (Director) | (Director) | (Director) | | Imaging | Global | +--------------+-------------+------------+------------+------------+---------+--------+ | Sales of | - | - | - | - | - | 567 | | goods in | | | | | | | | the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Interest | - | - | - | - | - | - | | income | | | | | | | | in the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Purchase | - | - | - | - | - | - | | of goods | | | | | | | | in the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Interest | - | - | - | - | - | - | | expense | | | | | | | | in the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Short-term | - | - | - | - | - | - | | lending | | | | | | | | made in | | | | | | | | the period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Short-term | - | - | - | - | 16,661 | - | | borrowing | | | | | | | | in the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Stock | 10,500 | - | - | - | - | - | | subscription | | | | | | | | of the | | | | | | | | Company in | | | | | | | | the period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Director's | 3,000 | 3,600 | 3,000 | 3,461 | - | - | | remuneration | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Amounts | - | - | - | - | - | 595 | | owed by | | | | | | | | related | | | | | | | | parties | | | | | | | | at end | | | | | | | | of the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ | Amounts | - | 3,600 | 3,000 | 3,461 | 16,661 | - | | owed to | | | | | | | | related | | | | | | | | parties | | | | | | | | at end | | | | | | | | of the | | | | | | | | period | | | | | | | +--------------+-------------+------------+------------+------------+---------+--------+ Transactions between the Company and its related parties for the period from 01 January to 30 June 2010 are described as follows: Copies of the statement are being sent to shareholders. Further copies are available on request from: +---------------------------------+------------------------------+ | Toshiya Kurita | Tel: +81.3.5652.0321 | | Chief Financial Controller | Email:kurita@bgenuinetec.com | | BGENUINETEC INC. | | | Headquarters and R&D Centre | | | Takanashi Building 3F | | | 2-15-7 Nihonbashiningyoucho, | | | Chuo-ku | | | Tokyo 103-0013 Japan | | | | | +---------------------------------+------------------------------+ | Paul McManus | Tel: +44 (0) 20 7933 8787 | | Walbrook PR Ltd | Email: | | 4 Lombard Street | paul.mcmanus@walbrookpr.com | | London EC3V 9HD | | +---------------------------------+------------------------------+ This information is provided by RNS The company news service from the London Stock Exchange END IR LLFVEALIAFII
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