Final Results

RNS Number : 9392T

Byotrol PLC

16 June 2009

 

BYOTROL PLC

('Byotrol' or the 'Company')

UNAUDITED PRELIMINARY RESULTS 

FOR THE YEAR ENDED 31 MARCH 2009

Chief Executive's Report

The past year has been characterised by global financial and business turbulence, coupled with unprecedented levels of pessimism and uncertainty throughout a large proportion of business sectors. Notwithstanding these unfavourable conditions, the Company has had some important successes in a year when all of our key target markets and customers suffered regularly changing development and investment plans.

Highlights of the year include:

• Revenues of £929,847

• First Joint Development Agreement ('JDA') in consumer products signed in February 2009 

• Synergy Health took up their first European option in September 2008

• Successful fundraising in November 2008, raising £4m (gross)

• The balance sheet reflects a net worth of £4,229,357 at the year end and the cash at bank was £2,863,909. 

Financial Results

During the year, the company achieved revenues of £929,847 (2008:£947,873). The loss of £2,929,706 compares with a loss of £2,773,186 in the previous year. The balance sheet reflects a net worth of £4,229,357 at the year end and the cash at bank was £2,863,909.   

Margins achieved during the year have met targets and expenses have closely followed the budgeted expectations.

Fund raising 

In November 2008 the Company raised £4m, £3.75m net of expenses, through a placing with existing shareholders. We are delighted with the support shown by them and have resolved to use the money wisely to set the business on a sound footing. As part of the fund raising we outlined a more focussed strategy concentrating on Healthcare, Food, Agriculture and Consumer Products.

Strategy

Our central strategy is to exploit the unique advantages of our superior technology by partnering with existing significant businesses in chosen key markets. Byotrol will be used as the ingredient brand, offering reassurance and confidence to users of game-changing performance, thus creating a Byotrol Hygiene Revolution.

We are focussed on the following core areas, intending to develop revenue streams from them to fund the expansion of the business into other significant areas of interest.

• European Healthcare through our relationship with Synergy Health

• US Healthcare through a small network of key distributors

• Food factories using our own salesforce and our distributors Arco, Sorsky and Boxlogix

• Agriculture via a network of distributors

• Consumer products through our joint venture with ?What If! Ventures

Resources will not be utilised on areas outside these core markets. We will continue to service existing customers, but will not actively seek new sales or distribution in other sectors, unless they provide low cost opportunities to generate substantial revenues.

Healthcare

Continued public concern about infection risks in healthcare settings provides a clear need and opportunity for our technology. We have enjoyed outstanding success in demonstrations and trials of Byotrol products. Synergy Health's Byotrol based 'Azo' range has continued to perform excellently in the recently completed large scale trial in Manchester Royal Infirmary.  Monroe Hospital in the USA - a pioneer user of our products - has completed 30 months without a single hospital acquired infection in over 35,000 patients treated.

Although commercial progress has been very slow, we were pleased that certain Byotrol materials were included on the NHS supply catalogue in late 2008. This has led to some uptake by several NHS trusts. During this year we will continue to actively support and grow this key sector.

Food

Byotrol's safe, powerful and long lasting features make it an ideal product for this important market. However the necessary conservatism around change in an already clean industry has meant that sales progress has been slow. Following several important reports, tests and accreditations - notably inclusion on Marks and Spencer's 'approved' disinfection list - we have established distribution agreements with several Food industry suppliers including Arco and Sorsky.  As a result, more encouraging progress is now being made with Hand Hygiene and Mould Control products.

Agriculture    

Success in supplying our products to farmers will be most effectively achieved in partnership with existing multi-discipline distributor/suppliers. There has been useful progress made in this area but the economic slowdown, coupled with our Company's desire to associate with reputable and established companies, has meant that growth has been sporadic.

Consumer Products

Byotrol's hygiene revolution has the potential to benefit people globally.  Realising this will require partnership with some of the most successful global brands and companies.   Through our joint venture with ?What If! Ventures, we have been working hard to produce the high standards of evidence, claims, prototype products and brand imagery that are a pre-requisite for success in this field. Notwithstanding delays due to the global economic downturn, the first Joint Development Agreement was signed in February and two more have been signed since the financial year-end.  These include development of Byotrol products for Scholl, Durex and PZ Cussons in Africa. 

Intellectual property

During the year, major patents were granted throughout the world as the process of national approvals continues. In addition further patent applications were filed to enhance the protection of our technology, especially in the area of personal and household products.

Quality Management

To ensure that we have minimised capacity constraints to meet future growth, Byotrol has a number of manufacturing and packaging contracts in place that are rapidly scaleable to meet increased demand.  We ensure that our quality management systems are fully integrated into those of both our suppliers and our significant partners. Our policy is to operate to the highest possible standards of ISO 9001. 

Byotrol Team

During the year, steps have been taken to strengthen our science and marketing teams. We have been joined by some highly experienced professionals with significant relevant market backgrounds.

In addition, following the fundraising, the Board has been refreshed and strengthened. I am delighted to welcome Ralph Kugler, our new Chairman, and Dr Till Medinger, a Non-executive Director, onto the Board of Byotrol plc. 

I wish to record my thanks to Wesley Devoto OBE, who stood down as Chairman and left the Board in May 2009. Wesley became Chairman during our research-only phase, and has been a valued part of the senior management and Board of Byotrol prior to our admission to AIM.   He has overseen the Byotrol idea blossom from a concept to a fully fledged business. In November 2008, Ian Mainman, another of our original directors, stood down after completing his term of office. Both of them have supported the executives during the vital start up years of Byotrol and have earned our sincere thanks.

Current Trading and Outlook

Since the year end we have

• signed two more consumer products JDAs

• sold over £200,000 of product in the first two months of the financial year 

The current outlook is promising though, in the current economic climate, it is difficult to predict anything with certainty. Byotrol products are now on sale in niche markets in over 30 countries. Results in major trials have confirmed the superiority of products incorporating Byotrol. A growing awareness of Byotrol's Hygiene Revolution, coupled with a tight and highly focussed sales drive in our key markets, should provide the basis for our future success. 

David McRobbie

Chief Executive

16 June 2009

Byotrol plc	Tel [phone]
David McRobbie - Chief Executive Richard Bell,	Tel [phone] Tel [phone]
Charles Stanley Securities (Nominated Adviser)
Philip Davies / Carl Holmes	Tel [phone]

UNAUDITED CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2009

	2009	2008
	£	£
REVENUE	929,847	947,873
Cost of sales	(220,851)	(310,246)
	----------------------	----------------------
GROSS PROFIT	708,996	637,627
Administrative expenses excluding depreciation and amortisation	(3,217,979)	(3,056,204)
Share based payments	(291,780)	(326,361)
Share of joint venture loss before tax	(175,475)	(145,266)
	----------------------	----------------------
LOSS BEFORE INTEREST, DEPRECIATION, AMORTISATION AND TAX	(2,976,238)	(2,890,204)
Amortisation	(21,872)	(16,651)
Depreciation	(20,537)	(21,621)
Finance income	36,662	156,090
Finance costs	(804)	(800)
	----------------------	----------------------
LOSS BEFORE TAX CREDIT	(2,982,789)	(2,773,186)
Tax credit	53,083	-
	----------------------	----------------------
LOSS FOR THE FINANCIAL YEAR	(2,929,706)	(2,773,186)
	----------------------	----------------------
LOSS ATTRIBUTABLE TO :
Equity holders of Parent company	(2,929,706)	(2,774,333)
Minority Interests	-	1,147
	----------------------	---------------------
	(2,929,706)	(2,773,186)
	=============	=============
Basic and fully diluted loss per share - pence	(4.92)	(6.24)

The loss before tax credit arises from the Group's continuing operations.

UNAUDITED CONSOLIDATED BALANCE SHEET

As at 31 March 2009

			2009	2008
			£	£

ASSETS

Non-current assets

Property, plant and equipment			63,184	41,699
Intangible assets			108,733	54,299
			----------------	----------------
			171,917	95,998
			----------------	----------------
Current assets
Inventory			190,926	122,172
Trade and other receivables			1,002,605	1,081,164
Cash and cash equivalents			2,863,909	1,312,960
			----------------	----------------
			4,057,440	2,516,296
			----------------	----------------
TOTAL ASSETS			4,229,357	2,612,294
			===========	===========
LIABILITIES
Current liabilities
Trade and other payables			400,684	590,825
Joint venture			100,907	77,348
Equity
Share capital			209,290	111,655
Share premium account			12,163,897	7,875,772
Merger reserve			1,064,712	1,064,712
Retained deficit			(9,710,133)	(7,108,018)
			----------------	----------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY			3,727,766	1,944,121
			----------------	----------------
TOTAL EQUITY AND LIABILITIES			4,229,357	2,612,294
			===========	===========

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2009

Group

	Share  Capital	Share Premium Account	Merger Reserve	Retained Earnings	Total
	£	£	£	£	£
At 1 April 2007	109,073	7,640,752	1,064,712	(4,657,964)	4,156,573
Conversion of warrants	2,582	235,020	-	-	237,602
Loss for the year	-	-	-	(2,773,186)	(2,773,186)
Exchange difference	-	-	-	(3,229)	(3,229)
Share based payments	-	-	-	326,361	326,361
	---------------	---------------	---------------	---------------	---------------
At 31 March 2008	111,655	7,875,772	1,064,712	(7,108,018)	1,944,121
Conversion of warrants Placing of shares Placing costs	6,726 90,909 -	612,075 3,909,091 (233,041)	- - -	- - -	618,801 4,000,000 (233,041)
Loss for the year	-	-	-	(2,929,706)	(2,929,706)
Exchange difference	-	-	-	35,811	35,811
Share based payments	-	-	-	291,780	291,780
	---------------	---------------	---------------	---------------	---------------
At 31 March 2009	209,290	12,163,897	1,064,712	(9,710,133)	3,727,766
	==========	==========	==========	=========	==========

Parent Company

	Share  Capital	Share Premium Account	Merger Reserve	Retained Earnings	Total
	£	£	£	£	£
At 1 April 2007	109,073	7,640,752	1,064,712	(3,357,412)	5,457,125
Conversion of warrants	2,582	235,020	-	-	237,602
Loss for the year				(4,736,540)	(4,736,540)
Share based payments				326,361	326,361
	---------------	---------------	---------------	-----------------	---------------
At 31 March 2008	111,655	7,875,772	1,064,712	(7,767,591)	1,284,548
Conversion of warrants Placing of shares Placing costs	6,726 90,909 -	612,075 3,909,091 (233,041)	- - -	- - -	618,801 4,000,000 (233,041)
Loss for the year	-	-	-	(2,724,628)	(2,724,628)
Share based payments	-	-	-	291,780	291,780
	---------------	---------------	---------------	-----------------	---------------
At 31 March 2009	209,290	12,163,897	1,064,712	(10,200,439)	3,237,460
	==========	==========	==========	===========	==========

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2009

	2009	2008
	£	£

CASH FLOW FROM OPERATING ACTIVITIES

Loss for the year before tax

(2,982,789)

(2,774,333)

Adjustments for:

Share based payments		291,780	326,361
Depreciation		20,537	21,621
Amortisation		21,872	16,651
Finance income		(36,662)	(156,090)
Exchange gain or loss		35,811	(3,229)
Changes in working capital
Increase in inventories		(68,754)	(75,999)
Increase in trade and other receivables		(73,357)	(398,203)
(Decrease)/increase in trade and other payables		(14,666)	458,543
		----------------	----------------
NET CASH USED IN OPERATING ACTIVITIES		(2,806,228)	(2,584,678)
		----------------	----------------

CASH FLOWS FROM INVESTING ACTIVITIES

Payments to acquire property, plant and equipment		(42,022)	(16,528)
Payments to acquire intangible assets		(76,306)	(8,750)
Payment to acquire interest in joint venture		-	(23,814)
Interest received		36,662	156,090
		--------------	--------------
NET CASH (USED IN)/INFLOW FROM INVESTING ACTIVITIES		(81,666)	106,998
		--------------	-------------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds on issue of ordinary shares		4,618,801	237,602
Share issue costs		(233,041)	-
Tax credit received		53,083	-
		-------------	--------------
NET CASH INFLOW FROM FINANCING		4,438,843	237,602
		--------------	-------------

Net increase/(decrease) in cash and cash equivalents

1,550,949

(2,240,078)

Cash & cash equivalents at the beginning of the financial year

1,312,960

3,553,038

		--------------	-------------
Cash & cash equivalents at the end of the financial year		2,863,909	1,312,960
		=========	==========

ACCOUNTING POLICIES

BASIS OF PREPARATION

The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs'), and International Finance Reporting Interpretation Committee ('IFRIC') interpretations, as adopted by the European Union (EU). 

The financial statements have been prepared in accordance with IFRS standards and IFRIC interpretations issued and effective as at the time of preparing these statements. 

Byotrol plc is incorporated and domiciled in the United Kingdom.

The financial statements have been prepared on the historical cost basis, except for the costs of share based payments, which are stated at fair value at the grant date. The principal accounting policies adopted are set out below.

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group's share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

The Company Income Statement has not been disclosed in accordance with section 230 of the Companies Act 1985. The loss for the year of the parent company amounted to £2,724,628 (2008: £4,736,540)

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the financial information in conformity with IFRS requires management to make judgement, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are both readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.  

The estimates and judgements that have a significant effect on the amounts recognised in the financial statements are detailed below.

Going concern

The directors have prepared cash flow forecasts for the Group that reflect the Group's forecast revenues and costs. It is envisaged by the directors that existing cash resources together with these forecast revenue streams will provide adequate funds for Byotrol plc and all its subsidiary companies for the foreseeable future.

In the event that the Group is unable to achieve its forecast revenues, the directors have a plan in place under which they will make adjustments to costs so that the business can continue to exist within its current funding arrangements. As a result, the directors have formed a view that adequate funds will be available for Byotrol plc and all its subsidiary companies for at least the next year following approval of these financial statements.

The financial statements have therefore been prepared on a going concern basis. The financial statements do not contain any adjustments which would result if the Group does not generate sufficient revenue and free cash flows from its trading activities or if any future fund raising exercise was not successful.

Impairment of assets

In line with the policy stated on impairment, the directors have considered the carrying value of assets. They have determined that there is reasonable evidence to suggest certain trade receivables will not be recovered in full and have therefore reflected an impairment in the value of trade receivables in the group accounts. They have also determined that, due to the trading losses incurred by the subsidiaries of the parent company, it is reasonable to reflect an impairment in the value of loans made to its subsidiaries by the parent company. This impairment has been reflected in the accounts of the parent company. All other assets are considered to be unimpaired.

INTERPRETATIONS OF STANDARDS

The following accounting standards and interpretations became effective during the period:

IFRC 11 IFRS 2 - Group and Treasury share transactions

INTERPRETATIONS AND STANDARDS WHICH HAVE BEEN ISSUED AND ARE NOT YET EFFECTIVE

At the date of the authorisation of the financial information, the following standards and interpretations, which have not been applied in the financial information, were in issue but not yet effective:

IFRS 1  Revised IFRS 1 First time adoption of IFRS (endorsed)

IFRS 2    Share based Payment - Amendments relating to vesting conditions and cancellations (endorsed)

IFRS 3  Business Combinations - Amendments

IFRS 7    Financial Instruments: Disclosures - Consequential amendments arising from amendments to IAS 32

IFRS 8  Operating Segments (endorsed)

IAS 1    Presentation of Financial Statements - Revised (endorsed)

IAS 1    Presentation of Financial Statements - Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed)

IAS 23  Borrowing Costs - Amendment (endorsed)

IAS 27  Consolidated and separate Financial Statements - Consequential amendments arising from     Amendments from IFRS 3

IAS 27    Consolidated and Separate Financial Statements - Amendments cost of an investment in a subsidiary, jointly controlled entity or associate (endorsed)

IAS 28    Investments in Associates - Consequential amendments arising from IFRS 3

IAS 31    Investments in Joint Ventures - Consequential amendments arising from IFRS 3

IAS 32    Financial Instruments Presentation - Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed)

IAS 39    Financial Instruments: Recognition and Measurement - Consequential amendments arising from amendments to IAS 32

IAS 39  Financial Instruments: Recognition and measurement - Amendment; Eligible hedged items

IAS 39    Financial Instruments: Recognition and measurement - Amendment; Reassessment of embedded derivatives.

IFRIC 12 Service Concession Arrangements (endorsed)

IFRIC 13 Customer Loyalty Programmes (endorsed)

IFRIC 14 IAS19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their 

Interaction (endorsed)

IFRIC 15 Agreements for the Construction of Real Estate Assets

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 18 Transfers of Assets from Customers

IFRIC 9     Reassessment of Embedded Derivatives - Amendment; Embedded Derivatives

The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial information when the relevant standards and interpretations come into effect.

REVENUE

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for products provided and license fees and royalties earned in the normal course of business, net of discounts and other sales related taxes.

Sales of goods are recognised when goods are delivered and the significant risks and rewards have passed, subject to any reservation of title in the event of non-payment.

Revenue from licensing agreements is recognised on an accruals basis based upon the period under contract.

Non refundable licence fees are recognised in the period when they are due.

SEGMENTAL REPORTING

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. 

A geographic segment is a group of assets and operations that provide a product or service within a particular economic environment and that is subject to risks and returns that are different from segments operating in different economic environments.

INTANGIBLE ASSETS

Research and development

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from the Group's business development is recognised only if all of the following conditions are met:

• an asset is created that can be identified (such as software and new processes);

• it is probable that the asset created will generate future economic benefits; 

• the development cost of the asset can be measured reliably;

• the product or process is technically and commercially feasible; and 

• sufficient resources are available to complete the development and to either sell or use the asset.

Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. The Group has not capitalised any development expenditure during the year.

Patents and trademarks

Purchased licenses and patents are measured at cost, net of any amortisation and any provision for impairment. Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Intellectual property - patents            over 10 years on a straight line basis

Licenses                                         over 10 years on a straight line basis

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Cost comprises purchase price and other directly attributable costs. Depreciation is charged so as to write off the cost or valuation of assets to their residual values over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold property                                      over 3 years on a straight line basis

Office equipment, plant and equipment          over 5 years on a straight line basis

Computer equipment                                    over 3 years on a straight line basis

Motor vehicles                                            over 4 years on a straight line basis    

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

IMPAIRMENT

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss if any. Where the asset does not generate cash flows that are independent from other assets, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. 

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

INVESTMENTS

Investments consist of the Group's subsidiary undertakings and its investment in the joint venture. Investments are initially recorded at cost, being the fair value of the consideration given and including directly attributable charges associated with the investment. Subsequently they are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

INVENTORY

Inventory is stated at the lower of cost and net realisable value. Cost comprises direct material cost, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs to completion and selling costs to be incurred.

Provision is made where necessary for obsolete, slow moving inventory where it is deemed that the costs incurred may not be recoverable.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised on the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Trade and other receivables

Trade receivables, classified as loans and receivables, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and are classified accordingly in the financial statements.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above.

Trade and other payables

Trade payables, classified as 'other liabilities' are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

LEASING

The Group as lessee

All leases are classified as operating leases as, under the terms of the leases, substantially all of the risks and rewards of ownership are retained by the lessor.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

TAXATION

Current tax is the expected corporation tax payable or receivable in respect of the taxable profit/loss for the financial year using tax rates enacted or substantively enacted at the balance sheet date, less any adjustments to tax payable or receivable in respect of previous periods.

Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and liabilities included in the financial statements and the amounts used for tax purposes that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:

No provision is made relating to the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than those acquired as part of a business combination.

Provision is made for deferred tax that would arise on all taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the Group can control the reversal of the temporary differences.

Deferred tax assets are recognised only to the extent that the directors consider that it is probable that there will be suitable taxable profits from which the future reversal of the underlying temporary differences and unused tax losses and credits can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

FOREIGN CURRENCIES 

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the date the fair value was determined.

On consolidation, the assets and liabilities of the Group's overseas operations are translated at exchange rates prevailing on the balance sheet date into sterling. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

Exchange differences arising on monetary items that form part of the company's net investment in its foreign operations are recognised in the profit or loss in the reporting entity.  However in the consolidated financial statements which include the foreign operations such exchange differences are recognised in equity.

The presentational and functional currency adopted by the group is Sterling.

DEFINED CONTRIBUTION PLANS

Obligations for contributions to defined contribution retirement benefit plans are charged as an expense as they fall due. 

SHARE-BASED PAYMENTS

The Group has applied the requirements of IFRS 2 Share-based payments and IFRIC 11 Group and treasury shares.

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments, which incorporates the market condition, is expensed on a straight line basis over the vesting period, based on the Group's estimate of share options that will eventually vest, or warrants that will be exercised, and a corresponding amount credited to retained earnings.

Share based payments associated with share options granted to employees of subsidiaries of the parent company are treated as an expense of the subsidiary company to be settled by equity of the parent company. The share based payment expense increases the value of the parent company's investment in the subsidiaries and is credited to retained earnings.

Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations.

The proceeds received on exercise of share options and warrants are credited to share capital (for the nominal value) and share premium account (for the excess over nominal value).

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2009

• SEGMENTAL INFORMATION

For management purposes, the Group's primary segments are analysed by business segment. The Group's risks and rates of return are affected predominantly by the products and services it provides. As a result the Group's primary reporting format is business segments. The Group's revenue, profit before taxation and net assets were all derived from its principal activities.

The joint venture is included in the product sales segment. Segmental information is presented using Group policies.

Primary reporting format: Business segments	Product    sales	Licence fees	Royalties	Total
Year ended 31 March 2009	£	£	£	£
External revenue	484,801	440,000	5,046	929,847
Cost of sales	(220,851)	-	-	(220,851)
Other expenses - net	(3,691,785)	-	-	(3,691,785)
	--------------	--------------	--------------	--------------
Loss before tax expense	(3,427,835)	440,000	5,046	(2,982,789)
	=========	=========	=========	=========
Segment assets	3,953,357	276,000	-	4,229,357
Segment liabilities	465,591	36,000	-	501,591
Segment capital expenditure	118,328	-	-	118,328
Segment depreciation	20,537	-	-	20,537
Segment amortisation	21,872	-	-	21,872
	=========	=========	=========	=========

	Product    sales	Licence fees	Royalties	Total
Year ended 31 March 2008	£	£	£	£
External revenue	873,000	60,000	14,873	947,873
Cost of sales	(310,246)	-	-	(310,246)
Other expenses - net	(3,345,819)	(64,994)	-	(3,410,813)
	--------------	--------------	--------------	--------------
Loss before tax expense	(2,783,065)	(4,994)	14,873	(2,773,186)
	=========	=========	=========	=========
Segment assets	2,607,620	-	4,674	2,612,294
Segment liabilities	653,173	15,000	-	668,173
Segment capital expenditure	16,528	-	-	16,528
	=========	=========	=========	=========

Secondary reporting format: Geographical segments	United    Kingdom	North America	Rest of the World	Total
Year ended 31 March 2009	£	£	£	£
External revenue	523,666	159,265	246,916	929,847
Segment assets	3,959,992	188,032	81,333	4,229,357
Segment liabilities	448,760	52,831	-	501,591
Capital expenditure	118,328	-	-	118,328
	==========	==========	==========	=========

	United Kingdom	North America	Rest of the World	Total
Year ended 31 March 2008	£	£	£	£
External revenue	654,670	73,245	219,958	947,873
Segment assets	2,350,093	128,565	133,636	2,612,294
Segment liabilities	592,376	75,797	-	668,173
Capital expenditure	13,185	3,343	-	16,528
	==========	==========	==========	=========

2    PARTICULARS OF EMPLOYEES

    The average number of staff employed by the Group, including executive directors, during the financial period amounted to:

	2009	2008
	No	No
Executive directors	3	3
Research and development	4	2
Administration	18	21
	---------------	---------------
	25	26
	==========	===========

    The aggregate payroll costs, including directors' emoluments, of the above were:

	2009	2008
	£	£
Wages and salaries	1,133,333	1,235,327
Social security costs	91,920	105,285
Other pension costs	57,220	55,278
	---------------	---------------
	1,282,473	1,395,890
	==========	==========

3  TAXATION ON ORDINARY ACTIVITIES

	2009  £	2008 £
Current tax:
Corporation tax at 28% (2008: 30%)	-	-
Share of joint venture corporation tax	-	-
Research and development tax credits received	53,083
Adjustment in respect of prior periods	-	-
	---------------	---------------
Total current tax	53,083	-
Deferred tax:
Tax losses	-	-
Origination and reversal of temporary differences	-	-
	---------------	---------------
	-	-
	---------------	---------------
Income tax credit	53,083	-
	==========	==========

There is no tax charge as the Group has made losses in both the current and the previous year. At 31 March 2009 the Group had an unrecognised deferred tax asset relating to unutilised trading losses and other timing differences of £2,397,932 (2008: £1,580,149).

    The charge for the year can be reconciled to the loss per the Income Statement as follows:

	2009 £	2008 £
Loss for the year	(2,929,706)	(2,773,186)
Total income tax credit	53,083	-
	-----------------	-----------------
Loss on ordinary activities before tax	(2,982,789)	(2,773,186)
	============	===========
Tax at the UK corporation tax rate of 28% (2008: 30%)	(835,181)	(831,956)
Expenses not deductible for tax purposes	136,754	100,445
Depreciation in excess of capital allowances	1,920	1,424
Research and development tax credit	53,083	-
Unrelieved tax losses	696,507	730,087
	------------------	-----------------
Total tax credit	53,083	-
	============	============

4  LOSS PER SHARE

	2009	2008
	£	£
Loss on ordinary activities after taxation	(2,929,706)	(2,773,186)
	===========	===========

Weighted average number of shares (No)
For basic and fully diluted loss per ordinary share	59,593,157	44,407,857
	===========	===========
Loss per ordinary share - basic and fully diluted	(4.92)p	(6.24)p
	===========	===========

The weighted average number of shares and the loss for the year for the purposes of calculating the fully diluted earnings per share are the same as for the basic loss per share calculation. This is because the outstanding share options and warrants would have the effect of reducing the loss per ordinary share and would, therefore, not be dilutive under the terms of IAS 33.

5  FINANCIAL ASSET INVESTMENTS

GROUP

JOINT VENTURE

		2009	2008
		£	£
Investment in joint venture		23,814	23,814
Share of joint venture losses		(320,741)	(145,266)
Share of long term funding		196,020	44,104
		-----------------	-----------------
		(100,907)	(77,348)
		===========	============

The Company owns 50% of the issued share capital of the joint venture, Byotrol Consumer Products Limited which was formed on 30 July 2007. The company's investment in Byotrol Consumer Products Limited comprises the legal costs incurred in the setting up of the joint venture. This company's principal place of business is The Glassworks 3-4 Ashland Place London W1U 4AH. Its principal activity is to market and sell consumer products. This company is jointly managed by its 6 directors, 3 from Byotrol plc and 3 from its other investor, What If Innovation Capital Nominees Limited. During the period the group recharged salary and other administrative costs amounting to £135,526 (2008: £88,208). 

   The following amounts are included in the Group's financial statements:

		2009	2008
		£	£
Share of current assets		67,642	-
Share of current liabilities		(290,323)	(145,266)
Share of long term liabilities		(98,010)	-
		-----------------	-----------------
		(320,691)	(145,266)
		============	============

COMPANY		Shares in subsidiary undertakings	Investment in joint venture
		£	£
At 1 April 2008		203,825	(77,348)
Additions		83,599	-
Movement in share of joint venture losses		-	(175,475)
Movement in share of long term funding		-	151,916
		-----------------	-----------------
At 31 March 2009		287,424	(100,907)
		============	============

Details of subsidiaries included in the consolidated financial statements are as follows:

Country of incorporation

Holding

Proportion of voting rights and shares held

Nature of business

Capital and reserves at 31 March 2009 £

Profit / (loss) for the year ended 31 March 2009 £

Byotrol Technology Limited	England	Ordinary share capital	100%	Anti-microbial products	(3,047,305)	(1,608,397)
Byotrol Inc	United States	Ordinary share capital	100%	Anti-microbial products	(2,082,158)	(524,981)

6    SHARE BASED PAYMENTS

The Company has granted equity settled share options to selected employees. The exercise price is the market value of the shares at the date of grant. The vesting period is two years. If the options remain unexercised after a period of ten years from the date of grant the options expire. 

The Company granted warrants to shareholders on 5 July 2005, exercisable at 23p converting each warrant into one ordinary share. At 31 March 2009 there were 250,000 warrants outstanding.

Details of the share options and warrants outstanding during the year are as follows:

	2009		2008
	Number of share options and warrants	Weighted average exercise price  (in p)	Number of share options and warrants	Weighted average exercise price  (in p)
Outstanding at beginning of year	5,908,575	34.5	6,210,633	31.6
Share options granted during the year	-	0.0	910,000	45.3
Share options lapsed during the year	(120,000)	42.5	(179,000)	56.7
Warrants exercised in the year	(2,690,440)	23.0	(1,033,058)	23.0
Warrants lapsed in the year	(1,039,135)	23.0	-	23.0
	---------------	------------	---------------	------------
Outstanding at the end of the year	2,059,000	54.5	5,908,575	34.5
	============	======	============	======

The Group recognised the following expenses related to share-based payments:

			2009	2008
			£	£
Charged to Consolidated Income Statement			291,780	326,361
			==========	========

The fair value of options granted under the employee option schemes is measured using the Black-Scholes model. The inputs to the model are as follows:

Grant date	11.09.06		21.02.07		31.07.07		5.09.07		24.09.07
Share price at grant date	58.0p		79.5p		50.0p		41.0p		42.5p
Exercise price	59.0p		79.5p		50.0p		41.0p		42.5p
Number of employees	13		3		5		1		12
Share options granted	698,000		500,000		350,000		50,000		510,000
Vesting period (years)	2		2		2		2		2
Expected volatility	58.1%		53.4%		54.5%		54.3%		55.8%
Option life (years)	10		10		10		10		10
Expected life (years)	10		10		10		10		10
Risk free rate	5.24%		5.80%		6.36%		6.22%		6.22%
Expected dividends expressed as a dividend yield	0.00		0.00		0.00		0.00		0.00
Fair value per option	42.0p		56.0p		36.0p		30.0p		31.0p

The options outstanding at 31 March 2009 had a weighted average exercise price of 59p and a weighted average remaining contractual life of 8.0 years.

At 31 March 2009 there were options outstanding over 1,809,000 (2008: 1,929,000) ordinary shares of 0.25p each which are exercisable at prices in the range from 41p to 79.5p under the company's various share option scheme exercisable at various times until 23 April 2017.

Expected volatility was based upon the historical volatility over the expected life of the schemes. The expected life is based upon historical data and has been adjusted based on management's best estimates for the effects of non-transferability, exercise restrictions and behavioural considerations.

7  BASIS OF THE ANNOUNCEMENT 

The unaudited preliminary financial statements for the year ended 31 March 2009 were approved by the Board of Directors on 16 June 2009. The financial information set out above does not constitute the Company's statutory accounts for the financial year ended 31 March 2009 or the financial year ended 31 March 2008 but is derived from those accounts. Statutory accounts for the financial year ended 31 March 2008 have been filed with the Registrar of Companies. The auditors have reported on those accounts; their report contained an emphasis of matter in relation to uncertainty surrounding going concern and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the financial year ended 31 March 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

8   REPORT AND FINANCIAL INFORMATION

Copies of the financial statements for the Group for the year ended 31 March 2009 will be available from the Company's registered office and will be posted to shareholders and on the Company's website in due course.

 

END

 

 

FR ILFLDREIELIA