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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Sorbic Int | LSE:SORB | London | Ordinary Share | GB00B3CX3F30 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMSORB
RNS Number : 4197C
Sorbic International PLC
19 January 2015
Press Release 19 January 2015
Sorbic International Plc
("Sorbic International" or the "Group" or the "Company")
Preliminary Unaudited Results
Sorbic International plc, (AIM:SORB), the third largest sorbates producer in China, today announces its preliminary unaudited results for the year ended 30 September 2014.
Summary
-- Revenue for the year was GBP14.1 million (2013: GBP14.6 million) -- Gross profit margin for the year of 9.8% (2013: 12.9%) -- EBITDA for the year of GBP0.6 million (2013: GBP1.2 million) -- Profit from operations before impairment of GBP0.1 million (2013: GBP0.6 million) -- Loss before tax of GBP0.2 million (2013: Loss GBP6.1 million) after impairment provision (2014: Nil, 2013: Loss GBP6.7 million) -- Cash generative and cash balances at 30 September 2014 of GBP6.9 million (2013: GBP5.3 million) -- Net assets per share of GBP0.18 (2013: GBP0.21)
John McLean, Non-Executive Chairman of Sorbic International, commented: "The Board is pleased that the Group continues to be cash generative. Demand for the Group's products remains strong and the Board remains focused in bringing the Group's operations back to a normal state of activity in 2015.
"Additionally the Board is also pleased to announce the appointment of Jay Newman as a non-executive director, alongside the appointment of an additional director which will take place in due course. The strengthened Board will contribute further to the significant progress that has been made during the year to facilitate the repayment of outstanding loan note and cash transfers from China."
- Ends-
For further information:
Sorbic International Plc John McLean, Non-Executive Chairman Tel: +44 (0) 7768 031 454 www.sorbicinternational.com FinnCap Geoff Nash / Kate Bannatyne Tel: +44 (0) 207220 0500 (Corporate Finance) Hybridan LLP (Broker) Tel: +44 (0) 20 3713 4581 Claire Louise Noyce
Media enquiries:
Abchurch Communications Henry Harrison-Topham / Canace Tel: +44 (0) 20 7398 7702 Wang henry.ht@abchurch-group.com www.abchurch-group.com
Notes to Editors:
Sorbic International's principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its base in Linyi City, Shandong Province, People's Republic of China. Approximately half of Sorbic International's production is sold to overseas markets, across 46 countries and half into the Chinese domestic market.
Sorbic Acid is a naturally occurring organic compound that is used in all kinds of foods for its anti-decomposition and anti-fungus function and also in grains, medicines, cosmetics, toothpaste, tobacco, animal feed, latex, paper-manufacturing and pesticides. Potassium Sorbate is used to inhibit moulds and yeasts in many foods, such as cheese, wine, yogurt, dried meat, baked goods, cosmetics and pharmaceuticals.
CHAIRMAN'S STATEMENT
Introduction
The Board reports that the Group's operating subsidiary, Linyi Van Science and Technique Co., Ltd ("LVST") revenues for the year ended 30 September 2014 were GBP14.1 million, which was slightly down on the prior year (2013: GBP14.6 million), which is mainly due to foreign exchange. During the second half of the year, LVST has witnessed increased fluctuations on the selling price of potassium sorbate. This has impacted on the LVST's overall operating margin for the full year, which was 9.8% (2013: 12.9%), as well as, a reduction in the Group's EBITDA to GBP0.6 million compared to GBP1.2 million for 2013.
Revenues continue to be dominated by exports to the US (via the APAC Chemical Corporation) and Chinese domestic business, which together, account for approximately 91% (2013: 92%) of overall activity. Overall sales mix has remained practically constant at 50% each for the respective products.
Margins for Sorbic Acid have softened to 4% for 2014 from 5% in 2013, whilst for Potassium Sorbate the margins have reduced to 15% from 20% in 2013. For both products, selling prices were stronger at the beginning of the year and started to soften for the remainder of the year. Cost of sales increases have now started to decline which the Board expects to help in the recovery of gross margins.
The improvement in the cash balance at the year-end reflects the positive cash flow from the operating subsidiary in China, combined with a lower inventory level. The increase in the accruals and other payables results from the re-classification of the amount due to Inner Mongolia for the purchase of land, which was previously included as part of Mr Wang's loan balance.
UK and Singapore overheads have shown a slight year-on-year decline and are running at GBP220,000 per annum.
Overall, the Group has generated an operating profit of GBP100,000 compared to GBP600,000 for the previous year. In addition, loan stock interest, which was previously capitalised as part of the Inner Mongolian development, has now been expensed.
Inner Mongolia
As previously reported, a framework to determine the amount of compensation has been agreed and within that framework, preliminary indicative figures would indicate that the compensation could be sufficient to cover the current carrying costs (GBP2.5 million). Currently, the negotiations are on hold whilst the land audit takes place, and once this is concluded, it is expected that negotiations will restart.
In my interim results statement on 23 June 2014, I indicated that the balance sheet had previously stated that that the funding for the land purchases had been provided by the Company's CEO, Mr Wang Yan Ting ("Mr Wang"). This has proven not to be the case as the funding was provided by either loans or grants from the local industrial zone. As the documentation for the loans/grants from the local authorities is minimal, the Board have adopted a prudent approach in assuming the entire purchase was loan funded. Accordingly, the accounts have been reclassified to reflect the change in liability which has no effect on the reported net assets. Thus, a key task for the coming year is to bring the controls into line with current best practice among Chinese companies as part of our work to improve corporate governance.
Linyi
In respect of the proposed move to a new site within Linyi, an agreement has largely been reached with the new land identified and the relocation package outline agreed, with the Linyi authorities covering the cost of a new building and infrastructure as well as reimbursing expenses for moving. It is not expected that there will be any direct cash compensation, merely a substitution of an old plant for a new one. In respect of the equipment, it is expected that this will be a combination of new plant, the existing plant and the equipment purchased for Inner Mongolia. Timing for the conclusion of the negotiations and the start of building is expected to be in the first half of 2015.
Loan notes
As announced in August 2014, the outstanding loan stock of GBP3.6 million (including accrued interest and redemption premium) was rolled over until 31 December 2014 to allow sufficient time for the loan to be repaid. Currently, the loan notes remain outstanding and are therefore in default. The Company is in discussions with a number of the loan-note holders and has recently visited China to expedite the redemption of the outstanding loan stock. Discussions have taken place with Mr Wang and the Company's advisors and a plan has been agreed to take the necessary action to redeem the outstanding loan stock. LVST, the Group's Chinese subsidiary had approximately GBP6.9 million in the bank at the year-end (GBP7.2 million as of 30 November 2014). The timing of the process is uncertain, however, the Board anticipates that the necessary actions will be put in place within the next few months.
As I reported in the trading update last month, Mr Wang agreed in the October Board meeting for LVST's funds to be transferred and again at the Board meeting on 7 December 2014, he confirmed this statement. To ensure that the repayment happens on a timely basis, the Board have appointed eCFO, which is a business consultancy, based in China with over 20 years' experience of dealing with such issues, both to advise and to implement the Board's funds repatriation policy.
Board changes
As I mentioned in the interim statement, the Board was going to take steps to appoint two China experienced bilingual directors and as part of this process, I am pleased to report that Jay Newman has today been appointed as a non-executive director. Jay has over 20 years experience of working in China and specifically, he has been working with me over the last 18 months as the Loan Notes observer. I welcome his appointment. In respect of the appointment of the second director, the Board has agreed to appoint a particular candidate subject to certain due diligence. It is expected that in addition to these two appointments, the Board will be further strengthened.
Cash
As shareholders have been aware and in order to fund the Singapore office and the UK listing costs, cash has been raised during the year to fund the non-China costs: obviously with a net cash position of approximately of GBP4 million, the raising of additional cash is unsatisfactory and therefore as part of eCFO's involvement they will be reviewing the necessary processes required to fund overseas expenditure.
Going concern
Whether the Group will have sufficient resources to continue in operational existence for the foreseeable future will ultimately be dependent on the repayment of the outstanding loan notes and the successful initiation of the funds transfer out of China. On an ongoing basis, the Company will remain reliant on a regular transfer of funds out of China to meet the costs of running an AIM listed public company and to repay the outstanding convertible loan notes.
Outlook
Demand for the Group's products remains strong, but the hurdles of cash transfers, Inner Mongolian negotiations, the Linyi move and Mr Wang's reluctance to engage with the Board have all contributed to a challenging year. Significant progress has been made on all fronts, but there are challenges in the coming year which, if not resolved quickly, could prove as difficult as last year's. However, once the convertible loans have been repaid, the Board expects the Group to return to a more normal state of activity and seek opportunities to return to growth.
John McLean
Chairman
19 January 2015
Unaudited Consolidated Statement of Comprehensive Income
Year ended Year ended 30 September 30 September Notes 2014 2013 GBP GBP Revenue 3 14,074,421 14,619,913 Cost of sales (12,698,901) (12,726,137) -------------- ------------------ Gross profit 1,375,520 1,893,776 Distribution and selling expenses (187,905) (184,121) Administrative expenses (1,108,425) (1,105,984) -------------- ------------------ Profit from operations 79,190 603,671 Impairment loss 4 - (6,684,701) -------------- ------------------ Profit/(loss) from operations 79,190 (6,081,030) Finance income 33,424 30,867 Unrealised foreign exchange loss (28,386) (5,016) Finance costs (303,376) (74,471) -------------- ------------------ Loss before tax (219,148) (6,129,650) Income tax expense 5 (132,322) (221,240) -------------- ------------------ Loss for the year (351,470) (6,350,890) Other comprehensive income/(loss) -Exchange differences on translating foreign operation (88,562) 288,423 -------------- ------------------ Total comprehensive loss, net of tax (440,032) (6,062,467) -------------- ------------------ Loss attributable to equity holders of the parent (351,470) (6,350,890) -------------- ------------------ Total comprehensive loss for the year attributable to equity holders of the parent (440,032) (6,062,467) -------------- ------------------ Loss per share - Basic (pence) 6 (0.65) (13.00) - Fully diluted (pence) 6 (0.65) (13.00) Unaudited Consolidated Statement of Changes in Equity Share Share Capital Surplus Retained Share Foreign Reverse Convertible Hedging Total equity capital premium reserve reserve earnings based currency acquisition loan notes reserve attributable payment translation reserve - equity to owners reserve reserve of the GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP parent GBP At 1 October 2012 2,703,273 22,085,073 2,725,219 485,805 7,202,912 30,000 2,034,520 (20,911,925) 76,019 (451,353) 15,979,543 Issue of ordinary shares 499,886 83,314 - - - - - - - - 583,200 Expiry of share options - - - - 30,000 (30,000) - - - - - Share issue cost - (48,122) - - - - - - - - (48,122) ----------- ----------- ---------- -------- ------------ --------- ------------ ------------- ------------ ---------- ------------- Loss for the period - - - - (6,350,890) - - - - - (6,350,890) Other comprehensive income - - - - - - - - - - Exchange differences on translation of foreign operations - - 63,699 11,356 - - 211,545 - 1,823 - 288,423 ----------- ----------- ---------- -------- ------------ --------- ------------ ------------- ------------ ---------- ------------- Total comprehensive income for the period 63,699 11,356 (6,350,890) - 211,545 - 1,823 - (6,062,467) At 30 September 2013 3,203,159 22,120,265 2,788,918 497,161 882,022 - 2,246,065 (20,911,925) 77,842 (451,353) 10,452,154 =========== =========== ========== ======== ============ ========= ============ ============= ============ ========== ============= Issue of ordinary shares 2,500 122,500 - - - - - - - 125,000 Share issue cost - (13,125) (13,125) ----------- ----------- ---------- -------- ------------ --------- ------------ ------------- ------------ ---------- ------------- Loss for the period - - - - (351,470) - - - - - (351,470) Other comprehensive income Exchange differences on translation of foreign operations - - (19,387) (3,456) - - (65,944) - 225 - (88,562) ----------- ----------- ---------- -------- ------------ --------- ------------ ------------- ------------ ---------- ------------- Total comprehensive loss for the period - - (19,387) (3,456) (351,470) - (65,944) - 225 - (440,032) At 30 September 2014 3,205,659 22,229,640 2,769,531 493,705 530,552 - 2,180,121 (20,911,925) 78,067 (451,353) 10,123,997 =========== =========== ========== ======== ============ ========= ============ ============= ============ ========== ============= Unaudited Consolidated Statement of Financial Position As at As at 30 September 30 September 2014 2013 Notes GBP GBP Assets Non-current assets Property, plant and equipment 5,388,472 6,001,071 Land use rights 2,163,567 2,243,331 7,552,039 8,244,402 -------------- -------------- Current assets Inventories 436,577 1,083,429 Trade receivables 1,138,403 1,271,036 Prepayments, deposits and other receivables 251,521 259,040 Cash and cash equivalents 6,947,185 5,311,311 Amount due from director 6,115,280 6,142,668 14,888,966 14,067,484 Total assets 22,441,005 22,311,886 ============== ============== Liabilities Current liabilities Trade payables 167,462 96,226 Advanced payments 180,476 161,143 Accruals and other payables 1,912,426 225,336 Amount due to directors 6,929,129 8,588,833 Current tax liabilities 30,735 102,780 Convertible loan notes 7 3,096,777 2,685,414 -------------- -------------- 12,317,008 11,859,732 Total liabilities 12,317,008 11,859,732 ============== ============== Equity Capital and reserves attributable to equity holders of the company Share capital 8 3,205,659 3,203,159 Share premium 8 22,229,640 22,120,265 Capital reserves 2,769,531 2,788,918 Surplus reserves 493,705 497,161 Retained earnings 530,552 882,022 Share based payment reserve - - Reverse acquisition reserve (20,911,925) (20,911,925) Convertible loan notes - equity 78,067 77,842 Foreign currency translation reserve 2,180,121 2,246,065 Hedging reserve (451,353) (451,353) -------------- -------------- Total equity 10,123,997 10,452,154 -------------- -------------- Total equity and liabilities 22,441,005 22,311,886 ============== ==============
Unaudited Consolidated Cash flow statement
For year ended 30 September 2014
Year ended Year ended 30 September 30 September 2014 2013 GBP GBP CASH FLOWS FROM OPERATINGACTIVITIES Loss for the period before tax (219,148) (6,129,650) Adjustments for: Amortisation of prepaid land lease payments 51,801 54,109 Depreciation 532,320 564,294 Impairment loss - 6,684,702 Interest income (33,425) (30,867) Interest expense 303,376 74,471 Operating cash flows 634,924 1,217,059 Changes in working capital: Decrease/(Increase) in inventories 639,321 (646,583) Decrease in trade and other receivables 138,207 174,505 Increase/(decrease) in trade and other payables 109,118 (19,525) Cash generated from operations 1,521,570 725,456 Income tax paid (132,322) (150,542) Interest paid (3,662) (74,471) Net cash generated from operating activities 1,385,586 500,443 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Interest received 33,436 30,879 Net cash generated from investing activities 33,436 30,879 -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Loan from financial institution raised - 1,208,400 Repayment of loan from financial institution - (1,208,400) Proceeds from issuance of new shares, net of issue costs 111,875 535,078 Proceeds from issuance of convertible loan notes, net of costs 111,875 88,260 Net cash generated from financing activities 223,750 623,338 -------------- -------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 1,642,772 1,154,660 Exchange (losses)/gains on cash and cash equivalents (6,898) 68,058 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,311,311 4,088,593 -------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 6,947,185 5,311,311 ==============
Notes to the financial information
1. General information and principal activities
The Group's principal activities include the production and sale of food preservatives, Sorbic Acid and Potassium Sorbate. The Group's main operations are in the People's Republic of China ("PRC").
The Company, Sorbic International Plc, a public limited company, is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The Company's registered office is 17 Hanover Square, London W12 1HU and its shares are listed on the AIM Market of the London Stock Exchange
2. Basis of preparation
The Group's financial statements for the year ended 30 September 2014 will be prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").
The accounting policies adopted by the Group are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of IFRS that are effective for annual periods beginning on or after 1 October 2013 and as outlined below. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.
Going concern
The preparation of financial information requires an assessment on the validity of the going concern assumption. The validity of the going concern assumption is dependent on finance being available for the continuing working capital requirements of the Group and finance for the development of the Group's projects becoming available.
As discussed in the Chairman's Statement, the following key areas impact on the going concern basis:
-- The Company's requirement for either further equity fund raising or the transfer of funds from the Chinese operations in order to meet its ongoing costs.
-- The Company has convertible loan notes which matured on 31 December 2014, having been extended twice. The repayment, conversion or renegotiation of the loan notes is dependent on matters such as the performance of the Group and the point highlighted above.
In approving this financial information, the Board has recognised that the combination of these circumstances creates a level of uncertainty. However, having made enquiries and considered the uncertainties outlined above, the directors have a reasonable expectation that the Company and the Group have sufficient resources to continue operational existence for the foreseeable future.
Accordingly, the Board believes it is appropriate to adopt the going concern basis in the preparation of the financial information.
Whilst the financial information included in this preliminary announcement has been computed in accordance with IFRS this announcement does not itself contain sufficient information to comply with IFRS. The Company will publish full-consolidated financial statements that comply with IFRS by the end of March 2015.
3. Segmental information
Segment information is presented in respect of the Group's geographical and operating segments. The Group's operating segments are as follows:
(i) Sorbic acid (ii) Potassium sorbate
(iii) Head office and other adjustments, which incorporates a measure of assets and liabilities not included in the other segments
Geographical Information - Revenue Year ended Year ended 30 September 2014 30 September 2013 GBP GBP PRC 6,577,712 6,862,773 United States 6,248,004 6,604,170 Russia 49,445 107,018 Netherlands 249,302 375,194 Other 949,958 670,758 Consolidated 14,074,421 14,619,913 ------------------------- ------------------------- Operating Segments Sorbic acid Potassium sorbate Head office Consolidated and other adjustments GBP GBP GBP GBP ------------------- ------------ ------------------ ------------- -------------
Year ended 30 September 2014
Revenue 6,941,135 7,133,286 - 14,074,421 Gross profit 290,701 1,084,819 - 1,375,520 Loss before taxation - - (219,148) (219,148) Taxation - - (132,322) (132,322) Net loss after tax - - (351,470) (351,470) Segment assets 219,020 180,640 22,041,345 22,441,005 Segment liabilities - - 12,317,008 12,317,008 Finance income - - 33,424 33,424 Finance costs - - (303,376) (303,376) Depreciation and amortisation - - 584121 584,121 Capital expenditure - - - -
Year ended 30 September 2013
Revenue 7,283,223 7,336,690 - 14,619,913 Gross profit 412,064 1,481,712 - 1,893,776 Profit before taxation - - (6,129,650) (6,129,650) Taxation - - (221,240) (221,240) Net profit after tax - - (6,350,890) (6,350,890) Segment assets 299,957 232,652 21,779,277 22,311,886 Segment liabilities - - 11,859,732 11,859,732 Finance income - - 30,867 30,867 Finance costs - - (74,471) (74,471) Depreciation and amortisation - - 618,403 618,403 Capital expenditure - - - 4. Impairment loss
In the prior year, the Directors decided not to continue to pursue the commencement of rebuilding the existing facility in Inner Mongolia. The Group continues to seek compensation and negotiations are currently taking place on the understanding that the compensation agreement will be 'fair and reasonable' to both parties.
The net book value of the non-current assets in respect of Inner Mongolia prior to any impairment amounted to GBP9,138,000, of which GBP1.65 million included within intangible assets, and the remaining GBP7.59 million included within plant, property and equipment. The Directors made an impairment provision against all of the intangible assets (GBP1.65 million) as well as GBP5.03 million against property, plant and equipment. The total provision in this respect amounts to GBP6.68 million. The unprovided non-current assets relate to equipment purchased which the Directors expect to use in a new facility.
The provision will be reassessed when the quantum of the compensation agreement has been agreed.
5. Income tax expense Year ended Year ended 30 September 30 September 2013 2014 GBP GBP Current tax 132,322 221,240 ============== =================== Loss before tax (219,148) (6,129,650) Tax on loss at standard rate (23%; 2013: 25%)* (50,404) (1,532,413) Tax effect of non-deductible expenditure 182,726 1,753,653 Tax losses carried forward against - - future period Current tax expense recognised in income statement 132,322 221,240 ============== =================== Effective tax rate (60.4)% (3.6)%
* The Company is subject to a United Kingdom Tax rate of 23% (2013: 25%). No tax provision is provided at the Company level, as all current profits are foreign derived income.
The Company's subsidiary Honour Field International Limited is a BVI registered company and has tax-exempt status.
The Company's subsidiary Linyi Van Science and Technique Co., Limited ("LVST"), is subject to a PRC Enterprise Income Tax rate of 25% (2013: 25%).
The tax charge on profits assessable has been calculated at the rates of tax prevailing in China, in which the Group through its China subsidiaries operate based on existing legislation, interpretation and practices in respect thereof.
Deferred income tax assets are recognised for tax loss carried forward to the extent that the realisation of the related tax benefit through the future taxable profits is probable. The Group did not recognise deferred income tax assets of GBP678,616 (2013: GBP639,724) at the year-end in respect of losses amounting to GBP2,950,504 (2013: GBP2,284,727) that can be carried forward against future taxable income since future profits were not considered probable.
6. Earnings per share
Basic
2014 2013 Loss attributable to equity holders of GBP(351,470) GBP(6,350,890) the Company (GBP) Weighted average number of Ordinary shares in issue (number) 53,906,528 48,843,733 Basic loss per share (pence) (0.65) (13.00) ============= ===============
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two categories of dilutive potential ordinary shares: share options and convertible loan notes. For the convertible loan notes, a calculation is done to determine the number of shares that could have been acquired based on the monetary value of the subscription rights attached to outstanding share options and convertible loan notes. The number of shares calculated as above is adjusted for the number of shares that would have been issued assuming the exercise of the convertible loan notes. The contingently issuable shares included within the share options and convertible loan notes are anti-dilutive and are not included in the calculation.
2014 2013 Loss attributable to equity holders of GBP(351,470) GBP(6,350,890) the Company (GBP) Weighted average number of Ordinary shares in issue (number) 53,906,528 48,843,733 53,906,528 48,843,733 Diluted loss per share (pence) (0.65) (13.00) ============= =============== 7. Convertible loan notes
The convertible loan notes were issued on 27 August 2010,25 February 2011 and 26 April 2013. The notes are convertible into ordinary shares of the Company at any time between the date of issue of the notes and their maturity date of 31 August 2014. The loan notes are convertible at GBP0.09 per share at the option of the loan note holder. The effective interest rate used to calculate the interest charged to the income statement was 12%.
On 29 August 2014, the loan notes were rolled over for a further period of 4 months to 31 December 2014 with a redemption premium equal to 20% of the principal amount outstanding if the principal is repaid between 1 November 2014 and 31 December 2014. As at the date of these statements, the loan notes remain outstanding and are in default.
If the notes have not been converted, they will be redeemed on their maturity date at par. Interest of 10 % per annum will be paid biannually up until that date.
The net proceeds received from the issue of the convertible loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Group as follows:
30 September A Loan Notes B Loan Notes Total 2014 Gross Transaction Net Gross Transaction Net Net amount costs amount amount costs amount amount GBP GBP GBP GBP GBP GBP GBP Convertible loan notes issued 1,812,000 163,859 1,648,141 876,000 72,199 803,801 2,451,942 Equity component 59,221 4,904 54,317 25,887 2,137 23,750 78,067 Liability component at date of issue 1,752,779 158,955 1,593,824 850,113 70,062 780,051 2,373,875 Transfer of A to B notes (395,292) 395,292 - Interest charged 596,249 528,620 1,124,869 Interest paid (228,032) (173,935) (401,967) ---------- ---------- ------------ Liability component at 30 September 2014 1,566,749 1,530,028 3,096,777 ========== ========== ============ 30 September A Loan Notes B Loan Notes Total 2013 Gross Transaction Net Gross Transaction Net Net amount costs amount amount costs amount amount GBP GBP GBP GBP GBP GBP GBP Convertible loan notes issued 1,687,000 150,732 1,536,268 876,000 72,199 803,801 2,340,069 Equity component 58,969 4,876 54,093 25,887 2,137 23,750 77,843 Liability component at date of issue 1,628,031 145,856 1,482,175 850,113 70,062 780,051 2,262,226 Transfer of A to B notes (395,292) 395,292 - Interest charged 444,641 380,514 825,155 Interest paid (228,032) (173,935) (401,967) ---------- ---------- ------------ Liability component at 30 September 2013 1,303,492 1,381,922 2,685,414 ========== ========== ============
The directors estimate the fair value of the liability component of the convertible loan notes at 30 September 2014 to be approximately GBP3,096,777 (2013: GBP2,685,414).
8. Share capital As at As at 30 September 30 September 2014 2013 Authorised GBP GBP 100,000,000 Ordinary share of GBP0.001 each (2013: 100,000,000 Ordinary share of GBP0.06 each) 100,000 6,000,000 100,000,000 Deferred shares of GBP0.059 5,900,000 - each (2013: nil) ============== ==============
The movement on the share capital account was as follows:
Ordinary shares Deferred shares Issued, called up and fully paid GBP GBP At 1 October 2012 45,054,551 Ordinary shares of 2,703,273 - GBP0.06 each Issue of shares on 28 March 2013 3,274,286 Ordinary shares of GBP0.06 196,457 - each Issue of shares on 26 April 2013 303,429 - 5,057,143 Ordinary shares of GBP0.06 each ---------------- ------------ At 30 September 2013 3,203,159 - Split and redenomination of shares on 15 July 2014 (3,149,773) 3,149,773 Issue of shares on 16 July 2014 2,500,000 Ordinary shares of GBP0.001 2,500 - each ---------------- ------------ 55,886 3,149,773 ================ ============ At 30 September 2014
The principal amount of the convertible loan notes issued on 27 August 2010, 25 February 2011 and 26 April 2013 can be converted into such number of new fully paid ordinary shares of the Company at a conversion price of 9 pence per share at any time up to the final redemption date of 31 December 2014. As at 30 September 2013, 29,866,667 ordinary shares are reserved for issue. No conversion took place during the year.
On 15 July 2014, the Ordinary Shares of GBP0.06 were redenominated and split into New Ordinary Shares of GBP0.001 each and Deferred Shares of GBP0.059 each. The Deferred Shares are not entitled to receive dividends or other distributions, does not entitle the holder to vote or speak at General Meetings of the company, and provide a return of assets on a winding up after the repayment of the capital paid-up on the Ordinary Shares.
On 16 July 2014, the Company issues 2,500,000 Ordinary Shares of GBP0.001 at a premium of GBP0.05 per share.
On 15(th) December, 6,000,000 ordinary shares of 0.01p were issued at 4p per share, raising GBP240,000.
The movement on the share premium account was as follows:
Share premium GBP As at 1 October 2012 22,085,073 Issue of shares on 28 March 2013 and 26 April 2013 for a consideration of GBP0.06 per share 83,314 Share issue costs (48,122) ----------- As at 30 September 2013 22,120,265 Issue of shares on 16 July 2014 for a consideration of GBP0.05 per share 122,500 Share issue costs (13,125) ----------- At 30 September 2014 22,229,640 =========== 9. Non-statutory financial information
The financial information set out in this preliminary announcement does not constitute the Group's statutory financial statements as defined in Section 435 of the Companies Act 2006 for the years ended 30 September 2014 and 2013.
The financial information for the year ended 30 September 2013 is derived from the statutory financial statements for that year prepared in accordance with IFRS, which have been delivered to the Registrar of Companies. The auditors reported on those financial statements; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under Sections 498(2) or (3) Companies Act 2006.
The audit of the statutory financial statements for the year ended 30 September 2014 is not yet complete. These financial statements will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. The auditors have indicated that in view of the Company's need to seek to renegotiate the terms of the loan notes and the requirement for additional capital or the transfer of funds from China, the auditors report may draw attention to these matters by way of emphasis in connection with the assessment of going concern, without qualifying their report. It is anticipated that the report and accounts for the year ended 30 September 2014 will be posted to shareholders in March 2015.
The directors do not propose a dividend in respect of the year ended 30 September 2014 (2013: nil).
The Board of Directors approved this announcement on 16 January 2015.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASFKFENSEFF
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