Consolidatedstatement of changes in equity
For the year ended 31 December 2012
|
|
|
|
|
|
|
Employee |
Foreign |
Share |
Profit |
|
|
|
Share |
Share |
Equity |
Merger |
Treasury |
benefit |
exchange |
option |
and loss |
|
|
|
capital |
premium |
reserve |
reserve |
reserve |
trust |
reserve |
reserve |
account |
Total |
|
|
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
|
At 1 January 2011 |
3,178 |
59,202 |
13,668 |
45,827 |
(41,376) |
(1,246) |
5,875 |
5,519 |
(52,179) |
38,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences |
(4) |
(77) |
(18) |
(59) |
54 |
2 |
102 |
– |
– |
0 |
|
Share-based payment |
– |
– |
– |
– |
– |
– |
– |
291 |
– |
291 |
|
Issue of shares |
424 |
8,053 |
– |
– |
– |
– |
– |
– |
– |
8,477 |
|
Issue costs |
– |
(209) |
– |
– |
– |
– |
– |
– |
– |
(209) |
|
Transactions with owners |
420 |
7,767 |
(18) |
(59) |
54 |
2 |
102 |
291 |
0 |
8,559 |
|
Exchange differences |
– |
– |
– |
– |
– |
– |
(162) |
(7) |
527 |
358 |
|
Loss for the year |
– |
– |
– |
– |
– |
– |
– |
– |
(11,479) |
(11,479) |
|
Total Comprehensive Income |
0 |
0 |
0 |
0 |
0 |
0 |
(162) |
(7) |
(10,952) |
(11,121) |
|
At 31 December 2011 |
3,598 |
66,969 |
13,650 |
45,768 |
(41,322) |
(1,244) |
5,815 |
5,803 |
(63,131) |
35,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences |
173 |
3,219 |
656 |
2,199 |
(1,986) |
(24) |
(4,258) |
21 |
– |
– |
|
Share-based payment |
– |
– |
– |
– |
– |
– |
– |
838 |
– |
838 |
|
Issue of shares |
99 |
2,258 |
– |
– |
– |
(18) |
– |
– |
– |
2,339 |
|
Transfer |
– |
– |
(7,377) |
– |
– |
– |
– |
(301) |
7,678 |
– |
|
Transactions with owners |
272 |
5,477 |
(6,721) |
2,199 |
(1,986) |
(42) |
(4,258) |
558 |
7,678 |
3,177 |
|
Exchange differences |
– |
– |
– |
– |
– |
– |
3,349 |
279 |
(3,034) |
594 |
|
Loss for the year |
– |
– |
– |
– |
– |
– |
– |
– |
(14,196) |
(14,196) |
|
Total Comprehensive Income |
– |
– |
– |
– |
– |
– |
3,349 |
279 |
(17,230) |
(13,602) |
|
At 31 December 2012 |
3,870 |
72,446 |
6,929 |
47,967 |
(43,308) |
(1,286) |
4,906 |
6,640 |
(72,683) |
25,481 |
Notes to financial statements
For the year ended 31 December 2012
1. Accounting policies
Basis of preparation
These financial statements have been prepared in accordance with the principal accounting policies adopted by the Group, International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations (IFRIC) as adopted by the EU and those parts of the Companies Act 2006 applicable to companies reporting under it and were approved by the Board on 18 March 2013. They are presented in US Dollars, which is the presentational currency of the Group. The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates.
These results are audited, however the financial information set out in this announcement does not constitute the Group’s statutory accounts, as defined in Section 435 of the Companies Act 2006, for the years ended December 31 2012, or December 31 2011, but is derived from the 2012 Annual Report. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered in due course. The auditors have reported on those accounts; their reports were unqualified, however they included a reference to an emphasis of matter in 2011 (but not 2012) with regard to going concern, and the reports did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.
The accounting policies used in completing this financial information have been consistently applied in all periods shown. These accounting policies are detailed in the Group’s financial statements for the year ended 31 December 2011 which can be found on the Group’s website.
Going concern
The financial statements have been prepared on the going concern basis, which assumes that the Group will have sufficient funds to continue in operational existence for the foreseeable future. The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current available working capital and working capital facilities for the next 12 months. There are also a number of well advanced initiatives within the business that would have a positive impact on the expected cash-flows of the Group in that period. Additionally the Group has been provided with alternative offers of finance that in the view of the Board could reasonably be expected to be made available were the need to arise. Therefore the Directors consider the going concern basis appropriate.
2. Revenue and operating loss
2.1 Geographic Analysis
|
|
USA |
Australia |
Unallocated |
Total |
|
Year Ended 31 December 2012 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
|
|
|
|
|
|
|
Revenue |
18,372 |
7,740 |
– |
26,112 |
|
Non-current assets |
13,994 |
16,954 |
13,744 |
44,692 |
|
|
|
|
|
|
|
|
USA |
Australia |
Unallocated |
Total |
|
Year Ended 31 December 2011 |
USD’000 |
USD’000 |
USD’000 |
USD’000 |
|
|
|
|
|
|
|
Revenue |
15,262 |
7,152 |
– |
22,414 |
|
Non-current assets |
14,623 |
16,532 |
14,955 |
46,110 |
Revenue substantially comprises amounts earned on receivables from trade customers. During the year three customers in the USA each accounted for more than 10% of the Group’s total revenue. Revenue recognised during the year and the amounts outstanding at the year-end in respect of those customers were as follows:
|
|
2012 |
2012 |
2011 |
2011 |
|
|
Turnover |
Outstanding at year end |
Turnover |
Outstanding at year end |
|
|
USD’000 |
USD’000 |
USD’000 |
USD’000 |
|
Customer 1 |
9,201 |
344 |
7,440 |
406 |
|
Customer 2 |
3,113 |
173 |
1,884 |
380 |
|
Customer 3 |
2,651 |
1 |
2,374 |
187 |
2.2 Loss on ordinary activities
The loss on ordinary activities before taxation is stated after charging/(crediting) the following amounts:
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
Grant income |
(1,986) |
(2,102) |
|
Cost of goods sold |
|
|
|
– inventory expensed |
11,443 |
9,716 |
|
– other direct costs |
5,406 |
4,365 |
|
– employee benefit expense |
2,602 |
2,165 |
|
– depreciation |
1,294 |
1,187 |
|
Amortisation |
2,091 |
2,168 |
|
Share based payments |
537 |
303 |
|
Treatment of Young contaminated material |
(167) |
1,232 |
|
|
|
|
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
Capital expenditure |
|
|
|
– property, plant and equipment |
1,151 |
416 |
2.3 Underlying operating EBITDA
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
|
|
|
|
Operating loss |
(9,177) |
(8,025) |
|
Growth costs |
2,206 |
819 |
|
Depreciation |
1,476 |
1,364 |
|
Amortisation |
2,091 |
2,168 |
|
Share based payment costs |
537 |
303 |
|
Treatment of Young contaminated material |
(167) |
1,168 |
|
Underlying Operating EBITDA |
(3,034) |
(2,203) |
2.4 Growth costs
The business continues to invest in long term strategic growth initiates focused on geographic expansion and research and development. These costs are analysed as follows:
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
|
|
|
|
Market expansion development costs |
1,750 |
819 |
|
New product development |
456 |
– |
|
|
2,206 |
819 |
|
|
|
|
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
|
|
|
|
Employee benefit expense |
1,153 |
547 |
|
Other costs |
1,053 |
272 |
|
|
2,206 |
819 |
3. Finance Costs
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
|
|
|
|
Bank overdrafts and leases |
43 |
68 |
|
Unsecured loan stock |
4,582 |
3,694 |
|
Fixed rate loan notes |
710 |
162 |
|
Revolving credit line |
8 |
– |
|
|
5,343 |
3,924 |
4. Loss per share
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.
The weighted average number of shares used in the calculations are set out below:
|
|
2012 |
2011 |
|
|
Number of shares |
Number of shares |
|
|
|
|
|
|
407,944,242 |
358,307,910 |
In 2011 and 2012, the share options and warrants were anti-dilutive and diluted earnings per share is the same as basic. The calculation of the weighted average number of shares excludes shares which are now held by a member of the Group and in respect of which votes may not be cast at a general meeting (which are treated as treasury shares) and also shares held by the Employee Benefit Trust.
5. Non-current liabilities – borrowings
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
Unsecured loan stock |
13,732 |
10,229 |
|
Fixed rate loan notes – 2014 |
– |
3,083 |
|
Fixed rate loan notes – 2015 |
3,231 |
– |
|
Finance lease liabilities due in 1-5 years |
16 |
192 |
|
|
16,979 |
13,504 |
Unsecured loan stock
In November 2007, the Company issued £13,800,000 of convertible unsecured loan stock by private placement, convertible at the loan stock holder’s option into ordinary share capital of the Company at a fixed price of 19p, subject to anti-dilutive conditions for subsequent share issues at below market price.
On 1 November 2012, these conversion rights lapsed with no conversions to share capital being made during the year (2011: USDnil). The loan stock is now an unsecured loan repayable, at the Company’s determination, between 1 November 2012 and 31 October 2014. Redemption value of the loan stock is £12,790,000, payable in full no later than 31 October 2014.
Interest is charged at a fixed rate of 8 per cent per annum on the redemption value of the loan stock. Management recognise that the 8 per cent interest rate is below market rate for this type of financial instrument and the fair value of the liability is calculated using estimated interest rates for an equivalent non-convertible instrument, which has been assessed using comparable internal rates of return by the Group for other income streams.
The residual amount representing the original equity conversion option, is included in the equity reserve in shareholder’s funds, and is being recognised over the remaining period of the loan to redemption as a transfer within reserves.
Fixed rate loan notes
On 14 June 2011, the Company issued £2,000,000 of fixed rate loan notes – 2014. The notes were secured by mortgage deed over Group assets. Interest was payable at 10 per cent per annum. The notes were repaid in December 2012. £1,400,000 of the principal (together with accrued interest and early prepayment fee) was repaid by way of the issue of 12,282,496 new ordinary shares in the Company at the prevailing market price of 11.88p per share to the holder (Andrew Black, a Director), and the balance of £600,000 of the principal (together with accrued interest and early prepayment fee) was repaid in cash.
On 19 December 2012, the Company created, and received a commitment from Andrew Black to subscribe for, £5,000,000 of fixed rate loan notes – 2015. At the year end the Company had received cash subscriptions for £2,000,000 of these notes. The notes are secured over Group assets. Interest is payable at 5 per cent per annum due in March and September of each year. The Notes have a three year term and are repayable at the Company’s option at any time after six months from their date of issue, subject to a final repayment date of 19 December 2015.
Warrants to subscribe for ordinary shares were granted in connection with both series of fixed rate loan notes (see note 6).
6. Share Capital
|
|
2012 |
2011 |
|
|
£’000 |
£’000 |
|
Authorised |
|
|
|
800,000,000 ordinary shares of 0.5p each |
4,000 |
4,000 |
|
|
|
|
|
Issued and fully paid |
|
|
|
ordinary shares of 0.5 pence each |
|
|
|
|
Number of shares |
Number of shares |
|
|
|
|
|
At the beginning of the year |
466,854,531 |
411,854,531 |
|
Issued for cash |
– |
55,000,000 |
|
Issued in settlement of loan |
12,282,496 |
– |
|
|
479,137,027 |
466,854,531 |
|
|
|
|
|
|
2012 |
2011 |
|
|
USD’000 |
USD’000 |
|
|
|
|
|
At the beginning of the year |
3,598 |
3,178 |
|
Exchange translation |
173 |
(4) |
|
Issued for cash |
– |
424 |
|
Issued in settlement of loan |
99 |
– |
|
|
3,870 |
3,598 |
During the period the Company issued 12,282,496 new ordinary shares at a price of 11.88p per share in consideration for the repayment of £1,400,000 of the principal (together with accrued interest and early prepayment fee) of £2,000,000 of fixed rate loan notes – 2014 (see note 5). These shares were issued on 21 December 2012 but only admitted to trading on AIM on 2 January 2013.
VIN Australia Pty Ltd, a member of the Group, holds 54,500,000 ordinary shares in Hydrodec Group plc pursuant to the acquisition of Virotec International plc in 2008. Votes in respect of these shares, and a further 2,173,333 shares issued pursuant to that acquisition, may not be cast in a general meeting of Hydrodec Group plc and as such they are treated as if they were treasury shares on consolidation.
Warrants
On 25 May 2011, the Company issued 10,750,000 warrants in connection with the issue of £2,000,000 of fixed rate loan notes – 2014. The warrants have an exercise price of 8p per share with an exercise window from 14 June 2013 to 14 June 2016.
On 24 December 2012, the Company issued an additional 10,000,000 warrants in connection with the subscription for £2,000,000 of the £5,000,000 fixed rate loan notes – 2015. A further 15,000,000 warrants will be issued in connection with the balance of £3,000,000 of the loan notes. The warrants have an exercise price of 16p per share with an exercise window from 19 June 2013 to 19 December 2017.
7. Post balance sheet events
In respect of the fixed rate loan notes – 2015 (described in note 5), the following cash subscriptions for notes have been received (bringing the total to £4.5 million of the £5 million commitment), and associated warrants to subscribe for ordinary shares (described in note 6) granted, since the year-end:
|
Date |
Loan notes subscription |
Warrants granted |
Subscriber |
|
1 Feb 2013 |
£500,000 |
2,500,000 |
Andrew Black (Director) |
|
22 Feb 2013 |
£2,000,000 |
10,000,000 |
Third party |
|
|
|
|
|
Source Article from http://www.4-traders.com/HYDRODEC-GROUP-PLC-4004834/news/Hydrodec-Group-plc-Final-Results-16557948/
