TIDMKSI
RNS Number : 8971S
Kleenair Systems International PLC
06 December 2012
KLEENAIR SYSTEMS INTERNATIONAL PLC
(AIM: KSI)
Annual Report and Accounts and AGM Notice
Kleenair Systems International Plc ("KSI" or "the Company")
announces that the Annual Report and Accounts for the year ended 30
June 2012, Notice of AGM and Proxy Form have been posted to
shareholders and are available from the Company's website
(www.kleenair-systems.com).
The Annual General Meeting of the Company will be held at the
offices of Westhouse Securities Limited, One Angel Court, London
EC2R 7HJ on 31 December 2012 at 11 a.m.
Contacts:
Kleenair Systems International www.kleenair-systems.com
plc
Jubeenh Nazhat Director and
Company Secretary +44 (0) 207 048 9400
Square1 Consulting
David Bick / Mark Longson +44 (0) 207 929 5599
Westhouse Securities Limited
Antonio Bossi / Petre Norton +44 (0) 20 7601 6100
Chairman's Statement
Introduction
Since KleenAir's interim results, the Board has been primarily
focused on ensuring the business reduced its overheads and
continued to implement its investing policy in order to generate
returns to shareholders.
Continued Research into Investment Opportunities
KleenAir continues to hold a 17.05% stake in Inspirit Energy
Limited, a company in the final stages of development of a micro
combined heat and power appliance. Inspirit Energy Limited
continues to make good progress.
Financial Results
The Financial Statements for the year to 30 June 2012 are set
out in the following pages. The Financial Statements show revenue
of GBP26,446 and administrative expenses have been reduced by
4%.
Changes to the Board of Directors
On 10 January 2012 Sarah Pozner resigned from her position as
Non-Executive Director and Company Secretary. The Board would like
to thank Sarah Pozner for her contribution and efforts.
On 12 January 2012 Jubeenh Nazhat was appointed as Non-Executive
Director and Company Secretary. Ms Nazhat is a corporate solicitor
with over 10 years experience of working in top city law firms and
in-house for the public sector. Ms Nazhat's background is mainly
corporate law but extends to the fields of projects, construction
and finance. Given Ms Nazhat's past experience she is well placed
to take on the role of Company Secretary and Non-Executive
Director.
Loan Notes and Company Finance
Global Investment Strategy UK Limited ("GIS") has two loan note
instruments dated 22 June 2010 and 22 November 2009 under which
some of the debt owing to GIS has been converted into shares in
Kleenair during the year ended 30 June 2012. The undiscounted debt
outstanding on each of the loan note instruments is GBP75,141 and
GBP147,871 respectively. The total undiscounted debt outstanding to
GIS is GBP223,012, excluding interest.
GIS has confirmed their financial support to KleenAir for at
least the next twelve months, allowing KleenAir to continue as a
going concern.
J Gunn
Executive Chairman
5 December 2012
Statement of Comprehensive Income
For the year ended 30 June 2012
Year ended Year ended
30 June 2012 30 June 2011
Note GBP GBP
Continuing Operations
Revenue 4 26,446 35,047
Cost of sales - -
-------------- ------------
Gross Profit 26,446 35,047
Administrative expenses (131,085) (136,811)
-------------- ------------
Operating Loss 7 (104,639) (101,764)
Finance income 8 1,762 219
Finance costs 8 (32,072) (61,808)
_______ _______
Loss before Tax (134,949) (163,353)
Tax 9 - -
-------------- ------------
Loss for the Year (134,949) (163,353)
Other comprehensive income - -
-------------- ------------
Total Comprehensive Income
for the Year (134,949) (163,353)
Total Comprehensive Income
attributable to:-
Owners of the Company (134,949) (163,353)
Loss per share attributable
to the owners of the Company
- basic and diluted (pence
per share) 10 (0.221) (0.357)
______ ______
Statement of Financial Position
For the year ended 30 June 2012
Note 2012 2011
GBP GBP
Assets
Non-Current Assets
Investments 11 740,000 740,000
_______ _______
740,000 740,000
_______ _______
Current Assets
Trade and other receivables 12 52,528 61,365
Cash and cash equivalents 13 34 32,021
_______ _______
52,562 93,386
Current Liabilities
Borrowings 15 227,482 -
Trade and other payables 14 188,511 74,016
_______ _______
Net Current (Liabilities) (363,431) 19,370
Assets _______ _______
376,569 759,370
Total Assets less Current
Liabilities
Non-Current Liabilities
Borrowings 15 - 449,516
_______ _______
376,569 309,854
_______ _______
Equity
Called up share capital 16 460,747 452,419
Share premium 16 3,887,762 3,671,231
Other reserves 104,529 127,724
Retained loss (4,076,469) (3,941,520)
________ ________
Total Equity 376,569 309,854
________ ________
Statement of Changes in Equity
For the year ended 30 June 2012
Shares
Share Share to Other Retained
Capital Premium be Reserves Loss Total
GBP GBP issued GBP GBP GBP
GBP
At 1 July 2010 428,390 3,030,353 - 124,492 (3,778,167) (194,932)
Transactions with owners
Conversion of convertible
loan 1,806 16,250 - - - 18,056
Shares issued 18,212 710,287 - - - 728,499
Share issue costs - (85,659) - - - (85,659)
Share based payments - - 3,232 - - 3,232
Creditors voluntary
arrangement 4,011 - - - - 4,011
_______ ________ _____ ______ ________ _______
Total contributions by and distributions to owners of the Company 24,029 640,878 3,232 - - 668,139
_______ ________ _____ ______ ________ _______
Total comprehensive
income for the year - - - - (163,353) (163,353)
_______ ________ _____ ______ ________ _______
At 30 June 2011 452,419 3,671,231 3,232 124,492 (3,941,520) 309,854
_______ ________ _____ ______ ________ _______
At 1 July 2011 452,419 3,671,231 3,232 124,492 (3,941,520) 309,854
Transactions with owners
Conversion of convertible
loan 8,328 216,531 - (23,195) - 201,664
_______ ________ _____ ______ ________ _______
Total contributions by and distribution to owners of the Company 8,328 216,531 - (23,195) - 201,664
_______ ________ _____ ______ ________ _______
Total comprehensive
income for the year - - - - (134,949) (134,949)
_______ ________ _____ ______ ________ _______
At 30 June 2012 460,747 3,887,762 3,232 101,297 (4,076,469) 376,569
_______ ________ _____ _______ ________ _______
Share capital is the amount subscribed for shares at nominal
value.
Share premium represents the excess of the amount subscribed for
share capital over the nominal value of the respective shares.
Retained loss represents the cumulative loss of the Company
attributable to equity shareholders.
Other reserves represent the equity component of convertible
loans and the share option reserve.
Statement of Cash Flows
For the year ended 30 June 2012
Year ended Year ended
30 June 30 June
2012 2011
Note GBP GBP
Cash Flows from Operating Activities
Loss before tax (134,949) (163,353)
Finance income (1,762) (219)
Finance costs 32,072 61,808
Employee share options charge - 3,232
Decrease/(increase) in receivables 10,120 (56,870)
Increase/(decrease) in payables 62,053 (15,243)
_______ _______
Net Cash used in Operating Activities (32,466) (170,645)
_______ _______
Cash Flows from Investing Activities
Interest received 479 219
Interest paid - (394)
Payment to acquire investments - (740,000)
_______ _______
Net Cash used in Investing Activities 479 (740,175)
_______ _______
Cash Flows from Financing Activities
Proceeds from issue of shares - 728,500
Share issue costs - (85,659)
_______ _______
Net cash from Financing Activities - 642,841
_______ _______
Net cash outflow (31,987) (267,979)
Cash and cash equivalents at beginning
of year 32,021 300,000
_______ _______
Cash and cash equivalents at end
of year 13 34 32,021
_______ _______
Major non cash transactions:
Convertible loans of GBP224,859 were converted into shares
during the year ended 30 June 2012 (2011 - GBP18,506). In total
8,328,125 new shares were issued with a total value including share
premium of GBP224,859.
Notes to the Financial Statements
For the year ended 30 June 2012
1. GENERAL INFORMATION
KleenAir Systems International Plc is a Company incorporated in
England & Wales. The Company's shares are traded on AIM, a
market operated by the London Stock Exchange. The address of the
registered office is disclosed on page 1 of the Financial
Statements. The principal activities of the Company are described
in the Directors' Report.
2. ACCOUNTING POLICIES
2.1 Basis of Preparation
These Financial Statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations issued by the International Accounting Standards
Board (IASB), as adopted by the European Union, and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The Financial Statements have been prepared under the
historical cost convention. The Financial Statements are presented
in pounds sterling, rounded to the nearest pound. Sterling is the
functional currency of the Company.
The preparation of Financial Statements in conformity with IFRSs
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial
Statements, are disclosed in Note 2.16 to these Financial
Statements.
Going Concern
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement. In addition, Note 3 to the
Financial Statements include the Company's financial risk
management objectives and policies for managing its capital.
The convertible loan note instrument dated 22 June 2010 was
redeemable on 22 December 2012. Under this loan note instrument the
Company may issue up to GBP1 million of secured convertible loan
notes ("CLNS") to Global Investment Strategy UK Limited ("GIS"). As
at 30 June 2012, GIS had subscribed to CLNs totalling GBP300,000,
of which GBP224,859 was converted in the year, leaving a year end
undiscounted debt of GBP75,141. A further GBP15,900 has been
converted since the year end. An amount of GBP700,000 is still
available to be drawn down.
The convertible loan note instrument dated 22 November 2009 was
also redeemable on 22 December 2012. As at 30 June 2012 the
outstanding undiscounted debt under this loan note instrument was
GBP147,871.
On 10 October 2012, the Company entered into a Discretionary
Drawdown Facility ("DDF") with GIS which provides the Company with
an equity facility up to a maximum aggregate limit of GBP500,000.
The facility is available for drawdown at any time, and for any
specified amount at the Company's discretion, up to 30 June 2014.
GIS is entitled to commission at 7.5% of the amount called down by
the Company in accordance with the terms of the facility.
The Company has received a letter of financial support from GIS
for a period of at least twelve months from the date of approval of
the Financial Statements. The support includes supplying sufficient
funds to enable the Company to meet its operating requirements and
not requiring repayment in cash of the outstanding CLNs due for
redemption on 22 December 2012, following an extension to the
redemption date to 22 December 2013.
The Company's Directors have a reasonable expectation that GIS
will be in a position to continue to support the Company, and
therefore the Company will be able to continue in operational
existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the Financial
Statements.
2.2 Changes in Accounting Policy and Disclosures
(i) New and amended standards, and interpretations mandatory for
the first time for the financial year beginning 1 July 2011
The following standards and amendments to existing standards
have been published and are mandatory for the Company's accounting
periods beginning on or after 1 July 2011 or later periods, but not
currently relevant to the Company:
A revised version of IAS 24 "Related Party Disclosures"
simplifies the disclosure requirements for government-related
entities and clarifies the definition of a related party. These
revisions apply to annual periods beginning on or after 1 January
2011.
Amendments to IFRS 1 "First-time Adoption of International
Financial Reporting Standards" replace references to a fixed date
of 1 January 2004 with "the date of transition to IFRSs", thus
eliminating the need for companies adopting IFRSs for the first
time to restate derecognition transactions that occurred before the
date of transition to IFRSs, and provide guidance on how an entity
should resume presenting financial statements in accordance with
IFRSs after a period when the entity was unable to comply with
IFRSs because its functional currency was subject to severe
hyperinflation.
Amendments to IFRS 7 "Financial Instruments: Disclosures" are
designed to help users of financial statements evaluate the risk
exposures relating to transfers of financial assets and the effect
of those risks on an entity's financial position. These amendments
apply to annual periods beginning on or after 1 July 2011.
(ii) New standards, amendments and interpretations issued but
not effective for the financial year beginning 1 July 2011 and not
early adopted
The Directors are assessing the possible impact of the following
standards on the Company's Financial Statements:
IFRS 9 "Financial Instruments" specifies how an entity should
classify and measure financial assets, including some hybrid
contracts, with the aim of improving and simplifying the approach
to classification and measurement compared with IAS 39. This
standard is effective for periods beginning on or after 1 January
2015, subject to EU endorsement.
IFRS 10 "Consolidated Financial Statements" builds on existing
principles by identifying the concept of control as the determining
factor in whether an entity should be included within the
consolidated financial statements of the parent company. The
standard provides additional guidance to assist in the
determination of control where this is difficult to assess. This
standard is effective for periods beginning on or after 1 January
2013, subject to EU endorsement.
IFRS 11 "Joint Arrangements" provides for a more realistic
reflection of joint arrangements by focusing on the rights and
obligations of the arrangement, rather than its legal form (as is
currently the case). The standard addresses inconsistencies in the
reporting of joint arrangements by requiring a single method to
account for interests in jointly controlled entities. This standard
is effective for periods beginning on or after 1 January 2013,
subject to EU endorsement.
IFRS 12 "Disclosure of Interests in Other Entities" is a new and
comprehensive standard on disclosure requirements for all forms of
interests in other entities, including joint arrangements,
associates, special purpose vehicles and other off balance sheet
vehicles. This standard is effective for periods beginning on or
after 1 January 2013, subject to EU endorsement.
IFRS 13 "Fair Value Measurement" improves consistency and
reduces complexity by providing, for the first time, a precise
definition of fair value and a single source of fair value
measurement and disclosure requirements for use across IFRSs. It
does not extend the use of fair value accounting, but provides
guidance on how it should be applied where its use is already
required or permitted by other standards. This standard is
effective for periods beginning on or after 1 January 2013, subject
to EU endorsement.
Amendments to IAS 12 "Income Taxes" introduce a presumption that
recovery of the carrying amount of an asset measured using the fair
value model in IAS 40 "Investment Property" will normally be
through sale. The amendments are effective for periods beginning on
or after 1 January 2012, subject to EU endorsement.
IAS 27 "Separate Financial Statements" replaces the current
version of IAS 27 "Consolidated and Separate Financial Statements"
as a result of the issue of IFRS 10 (see above). This standard
applies to annual periods beginning on or after 1 January 2013,
subject to EU endorsement.
IAS 28 "Investments in Associates and Joint Ventures" replaces
the current version of IAS 28 "Investments in Associates" as a
result of the issue of IFRS 11 (see above). This standard applies
to annual periods beginning on or after 1 January 2013, subject to
EU endorsement.
Amendments to IFRS 1 "First-time Adoption of International
Financial Reporting Standards" require that first-time adopters
apply the requirements in IFRS 9 "Financial Instruments" and IAS 20
"Accounting for Government Grants and Disclosure of Government
Assistance" prospectively to government loans existing at the date
of transition to IFRSs. The amendments are effective for periods
beginning on or after 1 January 2013, subject to EU
endorsement.
Amendments to IFRS 7 "Financial Instruments: Disclosures"
require disclosure of information that will enable users of
financial statements to evaluate the effect or potential effect of
netting arrangements, including rights of set-off associated with
the entity's recognised financial assets and recognised financial
liabilities, on the entity's financial position. The amendments are
effective for annual periods beginning on or after 1 January 2013
and interim periods within those annual periods, subject to EU
endorsement.
Amendments to IFRS 9 "Financial Instruments" and IFRS 7
"Financial Instruments: Disclosures" require entities to apply IFRS
9 for annual periods beginning on or after 1 January 2015 instead
of on or after 1 January 2013, subject to EU endorsement. The
amendments also require additional disclosures on transition from
IAS 39 "Financial Instruments: Recognition and Measurement" to IFRS
9.
Amendments to IFRS 10 "Consolidated Financial Statements", IFRS
11 "Joint Arrangements" and IFRS 12 "Disclosure of Interests in
Other Entities" clarify the IASB's intention when first issuing the
transition guidance in IFRS 10, provide similar relief in IFRS 11
and IFRS 12 from the presentation or adjustment of comparative
information for periods prior to the immediately preceding period,
and provide additional transition relief by eliminating the
requirement to present comparatives for the disclosures relating to
unconsolidated structured entities for any period before the first
annual period for which IFRS 12 is applied. The amendments are
effective for periods beginning on or after 1 January 2013, subject
to EU endorsement.
Amendments to IAS 1 "Presentation of Financial Statements"
require items that may be reclassified to the profit or loss
section of the income statement to be grouped together within other
comprehensive income (OCI). These amendments apply to annual
periods beginning on or after 1 July 2012.
"Annual Improvements 2009 - 2011 Cycle" sets out amendments to
various IFRSs and provides a vehicle for making non-urgent but
necessary amendments to IFRSs:
o An amendment to IFRS 1 "First-time Adoption of International
Financial Reporting Standards" clarifies whether an entity may
apply IFRS 1:
(a) if the entity meets the criteria for applying IFRS 1 and has
applied IFRS 1 in a previous reporting period; or
(b) if the entity meets the criteria for applying IFRS 1 and has
applied IFRSs in a previous reporting period when IFRS 1 did not
exist.
The amendment also addresses the transitional provisions for
borrowing costs relating to qualifying assets for which the
commencement date for capitalisation was before the date of
transition to IFRSs.
o An amendment to IAS 1 "Presentation of Financial Statements"
clarifies the requirements for providing comparative
information:
o
(a) for the opening statement of financial position when an
entity changes accounting policies, or makes retrospective
restatements or reclassifications; and
(b) when an entity provides financial statements beyond the
minimum comparative information requirements.
o An amendment to IAS 16 "Property, Plant and Equipment"
addresses a perceived inconsistency in the classification
requirements for servicing equipment.
o An amendment to IAS 32 "Financial Instruments: Presentation"
addresses perceived inconsistencies between IAS 12 "Income Taxes"
and IAS 32 with regard to recognising the consequences of income
tax relating to distributions to holders of an equity instrument
and to transaction costs of an equity transaction.
o An amendment to IAS 34 "Interim Financial Reporting" clarifies
the requirements on segment information for total assets and
liabilities for each reportable segment.
The amendments are effective for periods beginning on or after 1
January 2013, subject to EU endorsement.
2.3 Investments
Equity investments not held for trading are stated at cost as
they are unlisted and their fair values cannot be reliably
determined.
2.4 Revenue Recognition
Revenue comprises the fair value of the consideration received
or receivable for the provision of corporate services in the
ordinary course of the Company's activities. Revenue is shown net
of Value Added Tax.
2.5 Current and Deferred Tax
The Company's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of
the reporting period based on the profit or loss for the
period.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the Financial
Statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax
liability is settled. Deferred income tax assets are recognised to
the extent that it is probable that future taxable profit will be
available against which the temporary differences can be
utilised.
2.6 Operating Leases
Payments made under operating leases are charged to the
Statement of Comprehensive Income on a straight line basis over the
period of the lease.
2.7 Segment Reporting
The Company currently has one segment, being an investment
holding company. All activities are within the United Kingdom.
2.8 Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and at bank.
2.9 Trade and Other Receivables
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. A
provision for impairment is established when there is objective
evidence that the Company will not be able to collect all amounts
due according to the original terms of the receivables.
2.10 Trade and Other Payables
Trade and other payables are recognised initially at fair value
and subsequently measured at amortised cost using the effective
interest method.
2.11 Financial Instruments
Financial assets comprise investments in equity securities
(available for sale), trade and other receivables (loans and
receivables) and cash and cash equivalents. Financial liabilities
comprise trade and other payables (at amortised cost).
A financial instrument is recognised when the Company becomes a
party to the contractual provisions of the instrument. Financial
assets are derecognised if the Company's contractual rights to the
cash flows from the financial assets expire or if the Company
transfers the financial assets to another party without retaining
control or substantially all risks and rewards of the asset.
Financial liabilities are derecognised if the Company's obligations
specified in the contract expire or are discharged or
cancelled.
2.12 Compound Financial Instruments
Compound financial instruments issued by the Company comprise
convertible loan notes that can be converted to share capital at
the option of the holder, and the number of shares to be issued
does not vary with changes in their fair value.
Where material, the liability component of a compound financial
instrument is measured initially at the fair value of a similar
liability that does not have an equity conversion option. The
equity component is recognised initially at the difference between
the fair value of the compound financial instrument as a whole and
the fair value of the liability component. Any directly
attributable transaction costs are allocated to the liability and
equity components in proportion to their initial carrying
amounts.
Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound
financial instrument is not re-measured subsequent to initial
recognition except on conversion or expiry.
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability in cash for at least 12 months after the end of the
reporting period.
2.13 Fair Values
The carrying amounts of the financial assets and liabilities
such as cash and cash equivalents, receivables and payables of the
Company at the reporting date approximate to their fair values, due
to the relatively short term nature of these financial
instruments.
2.14 Share-based Compensation
The fair value of the employees', Directors' and suppliers'
services received in exchange for the grant of the options are
recognised as an expense. The total amount to be expensed over the
vesting period is determined by reference to the fair value of the
options granted, excluding the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the
number of options that are expected to vest. At the end of each
reporting period, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.
2.15 Share Capital
Equity instruments issued by the Company are recorded at the
proceeds received, net of any direct issue costs.
Ordinary shares are classified as equity.
The B ordinary shares rank pari passu in all respects with the
ordinary shares, save that the holder or holders of B ordinary
shares shall not have the right to attend and vote at general
meetings of the company (save in respect of resolutions to vary the
rights attaching to the B ordinary shares). Holders of B ordinary
shares have the option to convert their interests in B ordinary
shares at any time, and from time to time, into ordinary shares on
a 1 for 1 basis.
Deferred shares have no righting votes and have no rights to
dividends. Deferred shares only have very limited rights on a
return of capital and are not freely transferable.
2.16 Critical Accounting Judgements
The preparation of Financial Statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates. The estimates and
assumptions which have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities are
discussed below:
(a) Impairment of investments
Investments are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be
recoverable. When a review for impairment is conducted, the
recoverable amount is determined based on value in use calculations
prepared on the basis of management's assumptions and estimates.
There have been none in the year.
(b) Interest rate applicable to financial instruments of comparable credit status
In order to calculate the split for convertible loans between
the financial liability and equity components, management is
required to discount the contractual stream of future cash flows
under the convertible loan note instrument at an estimated rate of
interest applicable to instruments which do not have any associated
conversion option.
(c) Share-based Compensation
The fair value of options are determined by reference to the
fair value of the options granted, excluding the impact of any
non-market vesting conditions. In accordance with IFRS 2 'Share
Based Payments' the Company has recognised the fair value of
options, calculated using the Black-Scholes option pricing model.
The Directors have made assumptions particularly regarding the
volatility of the share price at the grant date in order to reach a
fair value. Further information is disclosed in Note 17.
3. FINANCIAL RISK MANAGEMENT
General Objectives, Policies and Processes
The Board has overall responsibility for the determination of
the Company's risk management objectives and policies. The Company
operates informal treasury policies which include ongoing
assessments of interest rate management and borrowing policy.
The Company is exposed through its operations to the following
financial risks:
Liquidity risk; and
Credit risk.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Company's flexibility. There have been no substantive changes in
the Company's exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the
methods used to measure them from previous periods unless otherwise
stated in this note. Further details regarding these policies are
set out below:
Principal Financial Instruments
The principal financial instruments used by the Company, from
which financial instrument risk arises, are as follows:
Trade and other receivables;
Cash and cash equivalents;
Trade and other payables;
Convertible loan notes.
Liquidity Risk
The Company's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it seeks to maintain readily
available cash balances to meet expected requirements for a period
of at least 60 days. The Company's current borrowings are all in
the form of fixed interest convertible loan notes.
Rolling cash forecasts identifying the liquidity requirements of
the Company are produced frequently. These are reviewed regularly
by management and the Board to ensure that sufficient financial
headroom exists for at least a twelve month period.
Credit Risk
Credit risk arises from cash and cash equivalents as well as
outstanding receivables. Management does not expect any losses from
non-performance of these receivables.
The amount of exposure to any individual counter party is
subject to a limit, which is assessed by the Board.
The Company considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk.
Capital Risk Management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern, to make
future investments and provide a return for shareholders. The
Company monitors its level of cash resources available against
future expenses and may issue new shares or create new convertible
loan note instruments in order to raise further funds from time to
time. No quantitative analysis is currently applicable based upon
the Company's current operations.
4. REVENUE
Revenues during the year comprise the provision of corporate
services to Inspirit Energy Limited and GIS. All income is
generated in the United Kingdom.
5. EMPLOYEES
Year ended Year ended
30 June 30 June
2012 2011
GBP GBP
The average number of staff employed by the Company during the year
amounted to:
Executive Directors 2 2
Non-executive Directors 1 1
___ ___
3 3
___ ___
Wages and salaries 34,000 1,250
Share options granted to Directors - 3,232
_____ _____
34,000 4,482
_____ _____
6. DIRECTORS' REMUNERATION
Salary and Fees
Year ended Year ended
30 June 30 June
2012 2011
GBP GBP
S Pozner 13,591 38,000
A McClue - -
G Saxton - -
D Pinckney 5,000 1,250
J Nazhat 11,715 -
J Gunn - -
______ ______
30,306 39,250
______ ______
The Company does not operate a pension scheme and no
contributions were paid during the year.
7. OPERATING LOSS
Year ended Year ended
30 June 30 June
2012 2011
GBP GBP
Operating loss is stated after charging:
Auditors' remuneration in respect of audit services 12,100 10,000
Tax and other services 1,050 -
_____ _____
8. FINANCE INCOME AND COSTS
Interest Expense
Convertible loans (see below) 7,394 22,170
Convertible loans (Note 15) 24,678 39,246
Other interest - 392
______ ______
Finance costs 32,072 61,808
______ ______
Finance Income
Loan to related party 1,762 219
______ ___
Interest on convertible loans, not split between liabilities and
equity based on materiality, is included within accruals.
9. TAXATION
Due to the losses in the accounting periods presented, no
corporation tax liability has arisen.
Factors affecting current tax charge:
The tax assessed on the loss on ordinary activities for the
period is different from the standard rate of corporation tax in
the UK of 20% (2011 - 20%).
Year ended Year ended
30 June 30 June
2012 2011
GBP GBP
Loss on ordinary activities before
taxation (134,949) (163,353)
_______ ______
Loss on ordinary activities multiplied
by rate of tax (26,990) (32,671)
Unutilised losses 26,990 32,671
______ ______
Total current tax - -
______ ______
The Company has excess management expenses of approximately
GBP1,216,000 (2011 - GBP1,112,000), capital losses of GBP150,000
(2011 - GBP150,000) and non-trade financial losses of approximately
GBP92,000 (2011 - GBP62,000) to carry forward against future
suitable taxable profits. No deferred tax asset has been provided
on any of these losses due to uncertainty over the timing of their
recovery.
10. LOSS PER SHARE
Loss per ordinary share has been calculated using the weighted
average number of shares in issue during the relevant financial
periods. The calculations of both basic and diluted loss per share
for the year are based upon the loss for the year of GBP134,949
(2011 - GBP163,353). The weighted number of equity shares in issue
during the year was 61,200,460 (2011 - 45,690,636).
In accordance with IAS 33, basic and diluted earnings per share
are identical as the effect of the exercise of share options and
convertible debt would be to decrease the loss per share and are
therefore deemed anti-dilutive. Details of convertible loans and
share options that could potentially dilute earnings per share in
future periods are set out in Notes 15 and 17.
11. INVESTMENTS
30 June 30 June
2012 2011
GBP GBP
As at 1 July 740,000 -
Additions - 740,000
_______ _______
As at 30 June 740,000 740,000
_______ _______
During the year ended 30 June 2011, the Company purchased equity
shares at a cost of GBP740,000 in Inspirit Energy Limited, an
unlisted company registered in the United Kingdom operating in the
Clean Tech and Renewables sector. The Company owns a total of
2,596,666 shares in Inspirit Energy Limited representing
approximately 17% of the total shares in issue.
12. TRADE AND OTHER RECEIVABLES
30 June 30 June
2012 2011
GBP GBP
Amount due from related parties 40,435 35,969
Other receivables 50 5,977
Prepayments and accrued income 12,043 19,419
______ ______
52,528 61,365
______ _____
All trade and other receivables are denominated in Sterling. The
maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. The
Company does not hold any collateral as security.
13. CASH AND CASH EQUIVALENTS
30 June 30 June
2012 2011
GBP GBP
Cash at bank 34 32,021
______ _______
All of the Company's cash at bank is held with institutions with
an AA credit rating.
14. TRADE AND OTHER PAYABLES
30 June 30 June
2012 2011
GBP GBP
Trade payables 18,034 23,091
Amount due to related parties 132,784 16,039
Accruals and deferred income 35,654 33,636
Other payables 2,039 1,250
______ ______
188,511 74,016
______ ______
15. BORROWINGS
Non-current
Convertible loan - 449,516
_______ _______
Current
Convertible loan 227,482 -
_______ _______
Convertible Loans
During the year ended 30 June 2010, the Company issued 434,090
5% convertible loans at a par value of GBP434,090 under loan note
instruments dated 29 July 2009 and 22 November 2009. Loan notes
totalling GBP274,073 and GBP18,056 were converted into shares
during the years ended 30 June 2010 and 30 June 2011 respectively.
There were no conversions during the year ended 30 June 2012. All
loans under the loan note instrument dated 29 July 2009 have been
fully converted. The loans dated 22 November 2009 mature on 22
December 2012. Both series of loan notes have a conversion price of
GBP0.01 per share.
During the year ended 30 June 2010, the Company issued 300,000
5% convertible loans at a par value of GBP300,000 under a loan note
instrument dated 22 June 2010. The loans mature on 22 December 2012
and have a conversion price of GBP0.027 per share or at a 10%
discount to the average market price based on the previous five
days trading, whichever is the lower. Loan notes totalling
GBP224,859 were converted into shares on 24 October 2011.
On 28 November 2012 the redemption date for both loan note
instruments was extended to 22 December 2013.
The values of the liability and equity conversion component were
determined at the date the loan notes were issued. All convertible
loans were issued to Global Investment Strategy UK Limited.
The fair value of the liability component was calculated using a
market interest rate for an equivalent non-convertible loan. The
residual amount, representing the value of the equity conversion
option, is included in shareholders' equity in other reserves.
The convertible loan recognised in the Statement of Financial
Position is calculated as follows:
30 June 30 June
2012 2011
GBP GBP
At 1 July 449,516 422,416
Face value of convertible loans - 5,910
_______ _______
Liability component on initial recognition 449,516 428,326
Converted to ordinary shares (246,712) (18,056)
Interest expense (Note 8) 24,678 39,246
_______ _______
Liability component at 30 June 227,482 449,516
_______ _______
The fair value of current and non-current borrowings equals
their carrying amount.
16. SHARE CAPITAL
Number GBP
Authorised
2011 and 2012
Ordinary shares of GBP0.001 1,501,855,740 1,501,856
'B' Ordinary shares of GBP0.001 1,221,200 1,221
Deferred shares of GBP0.99 400,932 396,923
____________ _________
1,503,477,872 1,900,000
____________ _________
The 'B' Ordinary shares and Deferred shares have no voting
rights.
There has been no movement in the authorised share capital
during the year.
On 13 December 2010 the Company subdivided its Ordinary and 'B'
Ordinary share capital on the basis of 10 new shares for every 1
existing share. The new nominal value of one Ordinary and 'B'
Ordinary share is GBP0.001.
Number 'B'
Number of Number of of Ordinary ordinary Deferred Share
ordinary 'B' ordinary deferred shares shares shares premium Total
shares shares shares GBP GBP GBP GBP GBP
Issued and
Fully Paid
At 1 July
2010 3,024,546 122,120 400,932 30,245 1,221 396,923 3,030,353 3,458,742
Issue of new
shares 5,117,500 - - 18,212 - - 710,288 728,500
Share issue
costs - - - - - - (85,660) (85,660)
Creditors
voluntary
arrangement 401,155 - - 4,012 - - - 4,012
Subdivision
of
share
capital 43,926,309 1,099,080 - - - - - -
Conversion
of
convertible
loan 1,805,555 - - 1,806 - - 16,250 18,056
__________ __________ _______ ______ _____ _______ _________ ________
At 30 June
2011 54,275,065 1,221,200 400,932 54,275 1,221 396,923 3,671,231 4,123,650
__________ __________ _______ ______ _____ _______ _________ ________
Conversion
of
convertible
loans 8,328,125 - - 8,328 - - 216,531 224,859
__________ __________ _______ ______ _____ _______ _________ ________
At 30 June
2012 62,603,190 1,221,200 400,932 62,603 1,221 396,923 3,887,762 4,348,509
On 24 October 2011, the Company issued 8,328,125 ordinary shares
of 0.1 pence each at a price of 2.7 pence per share, following
receipt of a conversion notice of certain convertible loan
notes.
17. SHARE OPTIONS
Share options are granted to selected Directors and
employees.
Share options outstanding at the end of the year have the
following expiry dates and exercise prices:
Number of Options
Exercise
price
in GBP
Expiry date per share 2012 2011
26 April 2021 0.04875 1,500,000 1,500,000
________ ________
1,500,000 1,500,000
________ ________
The options may only be exercised on or after 26 April 2012. The
weighted average contractual life of the outstanding options at 30
June 2012 was 8.83 years (2011 - 9.83 years).
The fair value of the share options was determined using the
Black Scholes valuation model. The parameters used are detailed
below:
2011 Options
Shares under option 1,500,000
Option granted on: 26 April 2011
Option life (years) 10
Share price (pence per share)
at grant date 4.50
Risk free rate 3.71%
Expected volatility 10%
Expected dividend yield Nil
Marketability discount 5%
Fair value per option granted
(pence per share) 1.254
Exercise price (pence per share) 4.875
The expected volatility is based on historical volatility for
the 6 months prior to the date of granting. The risk free rate of
return is based on zero yield government bonds for a term
consistent with the option life.
18. CAPITAL COMMITMENT
There was no capital expenditure that had been contracted for at
the end of the reporting period but not yet incurred.
19. CONTINGENT LIABILITIES
The Company has no contingent liabilities.
20. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, there is no controlling party
at the year-end date.
21. RELATED PARTY TRANSACTIONS
During the year ended 30 June 2011, the Company entered into a
loan agreement dated 23 May 2011 with Inspirit Energy Limited.
Inspirit Energy Limited is beneficially owned and controlled by J
Gunn, a substantial shareholder and Director of the Company. The
Company advanced GBP30,000 to Inspirit Energy Limited under this
unsecured sterling loan facility for working capital purposes.
Interest on the loan at 7% per annum is payable to the Company and
the loan is repayable not less than three months, but not more than
three years, from the date of the agreement. As at 30 June 2012,
the amount due to the Company from Inspirit Energy Limited was
GBP14,465 (2011 - GBP30,000) together with accrued interest
receivable of GBP1,502 (2011 - GBP219).
In addition, the Company charged Inspirit Energy Limited fees of
GBP16,946 (2011 - GBP35,047) for the provision of corporate
services during the year. An amount of GBP14,570 was receivable
from Inspirit Energy Limited as at 30 June 2012 (2011 -
GBP5,969).
Global Investment Strategy UK Limited ("GIS") is a company which
is beneficially owned and controlled by J Gunn. At the year end the
Company owed GIS GBP111,438 (2011 - GBP19,766) for the provision of
rent, rates, office facilities, loan interest and funds advanced
for working capital purposes. GIS owed the Company GBP11,400 (2011
- GBPnil) for the provision of corporate services. On 24 October
2011, GIS agreed to convert GBP224,859 of its outstanding
convertible loan into 8,328,125 ordinary shares of 0.1 pence
each.
J Gunn provided an unsecured loan of GBP45,000 to the Company
during the year. The full amount is due to J Gunn as at 30 June
2012.
22. EVENTS AFTER THE END OF THE REPORTING PERIOD
On 3 July 2012, GIS agreed to convert GBP15,900 of its
outstanding convertible loan into 1,590,000 ordinary shares of 0.1
pence each. These shares were placed with unconnected third parties
to GIS.
Also on 3 July 2012, the Company allotted 412,982 ordinary
shares of 0.1 pence each to a financial advisor in settlement of
fees.
On 19 September 2012, the Company allotted 200,000 ordinary
shares of 0.1 pence each to a financial advisor in settlement of
fees.
On 4 October 2012, the Company raised GBP50,000 through the
placement of 3,333,333 ordinary shares of 0.1 pence each at a price
of 1.5 pence per share.
On 10 October 2012, the Company entered into a Discretionary
Drawdown Facility ("DDF") with GIS which provides the Company with
an equity facility up to a maximum of aggregate limit of
GBP500,000. The facility shall be available for drawdown at any
time and for any specified amount at the Company's discretion up to
30 June 2014. GIS are entitled to commission at 7.5% of the amount
called down by the Company in accordance with the terms of the
facility.
On 28 November 2012 the redemption date for both convertible
loan note instruments was extended from 22 December 2012 to 22
December 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FSASUMFESELE
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