Final Results

RNS Number : 0716U

CAP-XX Limited

08 October 2010

 



8 October 2010

 

CAP-XX Limited

Audited Results for the year ended 30 June 2010

CAP-XX Limited, a world leader in the design and manufacture of revolutionary thin-form supercapacitors, which considerably extend the performance of current battery technology in small portable devices, announces its results for the year ended 30 June 2010.

Key highlights

·      Revenue of AUD$5.9 million (2009: AUD$7.8 million) reflecting timing of the Murata license payments

·      Average Selling price increasing from US$2.95 to US$3.47 on a year to year basis

·      Operating loss reduced to AUD$2.5 million ( 2009:AUD$3.1 million) as a result of cost efficiencies

·      Successfully completed a £1.9m capital raising in March, 5.9 million shares issued at 33p per share

·      H2 recovery in order activity and sales revenue as customer confidence returned

·      Sale, transfer and recommissioning of the Lane Cove line to manufacturing partner Nationgate successfully completed with further capacity doubling planned

·      Proceeds for the sale of equipment to Nationgate received after year end

·      Polar Twin Advance in the early stages of planning a similar manufacturing upgrade, with the additional capacity to be available in Q2 2011

·      Murata promoting the CAP-XX supercapacitor strongly for mobile phones and other applications and is planning for strong growth in volumes in 2011

Anthony Kongats, CEO of CAP-XX said:

"The past twelve months has seen us progress towards our previously announced objective of reaching cash break even as quickly as possible, whilst expanding available capacity and maintaining the pace of new product development. CAP-XX is well placed to build on this foundation additionally assisted by the upturn in the electronics market which has become apparent since the beginning of 2010. With the new design wins achieved over the past twelve months scheduled for volume production in the current financial year, increasing capacity from our contract manufacturing partners including Murata and an improving market, the Board is looking forward to the next twelve months with confidence."

For further information contact:

CAP-XX Anthony Kongats, Chief Executive Officer	[phone]
Kreab Gavin Anderson & Company (Financial PR) Robert Speed / Deborah Walter   / Anthony Hughes	[phone]
Seymour Pierce Ltd (Nominated Adviser and Broker) Nandita Sahgal	[phone]

More information is available at www.cap-xx.com

Notes to Editors:

CAP-XX supercapacitors have a compact, thin form design and can store higher volumes of energy and output higher power levels than competing supercapacitor products. These attributes are critical for current and future generation electronic devices, such as mobile phone cameras with a quality flash photography capability and high quality audio capabilities. Other applications include mobile phone and solid state disk (SSD) power management, mobile phone accessories, digital still cameras, energy harvesting systems, e-books, portable drug delivery systems, wireless sensors, uninterrupted power supplies, plant condition monitors, toll tags and location tracking devices. Longer term, as the market for fuel cell systems develops, supercapacitors can be used to support modulated output for fuel cell systems.

Chairman's statement

The past twelve months has seen the Company consolidate and execute previously announced strategies directed towards reaching cash break even as quickly as possible. The main focus points were cash reserves, production capacity, sales and new product development. Each of these has been progressed in the last financial year and the Company is well placed to build on this foundation.  We are additionally being assisted by the upturn in the electronics market which has become apparent since the beginning of 2010.

For the fiscal year ended 30 June 2010, the Company reported total sales revenue of AUD $5.9 million (2009: AUD $7.8 million) with the year to year decline primarily due to the quantum and timing of the Murata licence payments. The Technology Transfer fees and the Research & Development Feasibility Study fee that were received in 2008/09 were only partly replaced in the 2009/10 year by the Research & Development Agreement noted previously. Product sales for 2010 of 569,000 units were down 12% compared to the previous year. However a disciplined approach to pricing led to the Average Selling Price increasing from US$2.95 to US$3.47 on a year to year basis. The operating loss for the twelve months to 30 June 2010 from trading operations was AUD $2.5 million (2009: loss of AUD $3.1 million) with the improvement being assisted by a reduction in headcount and discretionary expenditure.

During March 2010, the company undertook a capital raising with 5.906m shares being issued at a £ 0.33 pence per share. The capital raising strengthened the cash reserves during a period of world-wide economic uncertainty and ensured that sufficient cash was available to complete the necessary product development which will enable additional applications to be completed and new markets serviced. The majority of the shares issued were acquired by existing institutional investors which now account for just over 80% of the Group's issued  share capital.

We were informed by senior Murata executives that they expect to commence customer shipments of supercapacitors in the current half year Murata is promoting the CAP-XX supercapacitor strongly for mobile phones and other applications and is planning for strong growth in volumes in 2011. In parallel, CAP-XX is also taking advantage of the re-sale agreement with Murata and has begun to receive orders for the Murata manufactured product from its own customers.

In March 2010, Murata and CAP-XX formally announced that they had entered into a collaborative Research & Development Agreement to investigate the production of a second generation supercapacitor which will have the capability to be "surface mounted" using reflow solder techniques.  Although the agreement was signed in March 2010, the statement of works associated with the Agreement was commenced in September 2009. CAP-XX will receive consideration of A$1.43 million over four equal instalments with the first two instalments received during the 2009/10 financial year. The remaining instalments are due to be received in the 2010/11 financial year.

In August 2009, CAP-XX announced the signing of a contract manufacturing agreement with Nationgate Technology which is located in Penang, Malaysia. Since this time, a myriad of activities have been undertaken to enable Nationgate to commence production. Plant and machinery previously installed at CAP-XX headquarters at Lane Cove has been sold to Nationgate for US$2 million, a premium to book value, with the final payment having been received in the 2010/11 financial year. This plant and machinery was successfully transferred and recommissioned during the year, and Nationgate commenced shipment of saleable product from March 2010. The transfer took place with minimum interruption to sales. Nationgate has subsequently announced a purchase order for additional equipment which will double its supercapacitor production capacity from January 2011. Polar Twin Advance, our initial contract manufacturer, is in the early stages of planning a similar manufacturing upgrade, with the additional capacity anticipated to be available in the fourth quarter of the 2010/11 financial year.

We saw an improving trend in sales volumes through the year. Sales volumes were particularly soft in the first half of the financial year as customers and distributors held off placing new orders or re-stocking product until global market sentiment improved. The first signs of change surfaced in our third quarter, when customer orders and enquiries began to increase significantly. Product sales for the second half of the year were 22% greater than in the first half.

Pleasingly, CAP-XX's traditional markets of hand held and portable devices have continued to recover with order activity at historical high levels in recent months. We are also seeing the early signs that new design wins achieved over the past twelve months with several customers will shortly move into production.

I must commend the CAP-XX team led by Anthony Kongats and Mike Taylor for consolidating their market and financial position in the face of very difficult economic conditions during the last financial year. With an improving market, coupled with initiatives directed at cost reduction, production capacity and new business opportunities now in place, the Board is looking forward to the next twelve months

Michael Quinn

Chairman

25th September 2009

Business Review

About CAP-XX Limited

CAP-XX Limited is a world leader in the design and manufacture of revolutionary thin-form supercapacitors predominately for use in small portable electronic devices. Supercapacitors can considerably extend battery run-times and provide power-hungry functions that are not possible with current battery technology.

CAP-XX supercapacitors have a compact, thin-form design and can store higher volumes of energy and output higher power levels than competing supercapacitor products. These attributes are critical for current and future generation electronic devices, such as mobile phone cameras with a quality flash photography capability and high quality audio capabilities. Other applications include mobile phone and solid state disk (SSD) power management, mobile phone accessories, digital still cameras, energy harvesting systems, e-books, portable drug delivery systems, wireless sensors, uninterrupted power supplies, plant condition monitors, toll tags and location tracking devices. Longer term, as the market for fuel cell systems develops, supercapacitors can be used to support modulated output for fuel cell systems.

In 2009-2010, CAP-XX continued to supply supercapacitors to a number of blue chip consumer electronics companies for use in current generation wireless devices such as ruggedised PDAs (personal digital assistants), SSD (solid state drives) devices and location tracking products. CAP-XX is increasingly focussed on the larger opportunities represented by SSD and energy harvesting markets whilst still strongly supporting Murata in its market expansion activities.

CAP-XX is incorporated in Australia and has its headquarters and research and development and electrode manufacturing facilities in Sydney, Australia where 23 staff are employed. These facilities have ISO 9000 status.  Larger manufacturing facilities are operated in Malaysia by Polar Twin Advance Sdn Bhd and Nationgate Technologies Sdn Bhd under manufacturing agreements with CAP-XX.

Historical Milestones

In 1994, a company associated with Anthony Kongats, now Chief Executive Officer of CAP-XX Limited, entered into an agreement with CSIRO (the Australian Commonwealth Scientific and Industrial Research Organisation) to research and commercialise supercapacitor technology that had resulted from CSIRO research.

CAP-XX Limited (formerly known as Energy Storage Systems Pty Limited) was established in 1997 by Anthony Kongats as the vehicle to hold the intellectual property resulting from the partnership with CSIRO. CAP-XX received research and development grants from the Australian Government and was backed by some of the world's leading technology investors, including Intel, Acer, ABN Amro and Walden and well supported by Australian based venture capitalists Innovation Capital and Technology Venture Partners.

In 1999, the Company built a pilot production plant in Lane Cove, Sydney, Australia, and progressively improved production capacity. It began shipping supercapacitor products to customers in 2003. Customers supplied to date include Sony, Sony Ericsson, IP Wireless, Option, Sierra Wireless and Flextronics. Product shipped to Motorola, Intermec and Hand Held Products has been incorporated in field-critical devices such as those used by leading parcel delivery companies like FedEx and UPS.

In late 2004, the Company entered into a manufacturing agreement with Polar Twin Advance Sdn Bhd ("PTA") of Malaysia to provide high volume manufacturing services. The production flow process developed in Sydney was replicated successfully in Malaysia.

CAP-XX was named a 2005 Technology Pioneer by the World Economic Forum for developing and applying innovative and transformational technology.

In February 2006, the CAP-XX technology was recognised by Frost & Sullivan's 2005 Technology Innovation of the Year Award as a 'breakthrough nanotechnology process for producing supercapacitors to meet the pulse-power requirements of portable devices'. This Award recognises research expected to make significant contributions to the electronics industry.

CAP-XX has received numerous other international awards for its products and electronic circuit designs including EDN's Top Overall Power Product for 2009 and being voted 3rd overall in Electronic Design's Top 101 Components for 2009.

On 20 April 2006, CAP-XX Limited was listed on the AIM market of the London Stock Exchange in conjunction with a placement of 18,433,333 shares at 93 pence per share, which raised gross proceeds of AUD$41million (£17.1 million) and increased the total issued share capital to 48,565,893 shares and market capitalisation (at 93 pence per share) to about AUD$108 million (£45.2 million). The issued share capital rose to 49,112,791 by 30 June 2008 as various Employee Shareholder Option Plan participants exercised their options. On 25 June 2009, a secondary capital raising was completed with 12,940,000 shares being placed at 12.5 pence per share and the total issued share capital as at June 2009 stands at 62,052,791 issued share capital. On 25 March 2010, a capital raising was completed with 5,906,493 shares being placed at 33 pence per share. Total issued share capital as at June 2010 is 67,959,284 shares.

In May 2008, CAP-XX entered into a formal agreement with Murata Manufacturing Corporation (Murata) of Japan to jointly develop and supply high performance supercapacitors for mobile handsets and other peak power hungry, space constrained portable applications. Murata is recognised as one of the world's leading manufacturing companies for electric components and is an existing supplier to all of the top mobile handset market companies. CAP-XX and Murata will initially work together to scale supercapacitor production to meet the anticipated demand of the global handset market. Both organisations are anticipating that volume mass production and sales from this partnership will commence in the second half of 2010. In October 2008, the companies signed a Re-Sale Agreement which provides CAP-XX with a proportion of the Murata manufactured product. This product will be sold to CAP-XX's existing and new customers under the CAP-XX name. In November 2008, both companies signed a Feasibility Study Agreement for the first stage of a proposed Collaborative R&D program which concluded with the successful demonstration of a working surface mountable supercapacitor in H1 2009. On the 5 March 2010, CAP-XX and Murata signed the R&D Agreement which is an extension of the collaboration for developing supercapacitors with Murata. The new contract will now cover surface mounted devices (SMD's) which will enable manufacturers to mount supercapacitors directly onto pre-circuit boards using reflow solder techniques. These supercapacitors are particularly suitable for high volume applications.

On 30 July 2009, CAP-XX signed a contract manufacturing agreement with Nationgate Technologies of Penang, Malaysia. Under the terms of the agreement, Nationgate acquired and transferred to Penang, the supercapacitor assembly manufacturing plant, from CAP-XX's Lane Cove facility. Following the re-commissioning of the plant at its Penang facility, Nationgate began producing saleable supercapacitors in the Q1 calendar year 2010. Polar Twin Advance, also in Penang, continues as a contract manufacturer, for CAP-XX.

Review of Operations and Activities

Since CAP-XX launched its first supercapacitor in 2003, more than 7 million units have been sold.  In the past 18 months, CAP-XX has established a new revenue stream with the commencement of license fees and other related payments from Murata. These will become more prevalent as the anticipated royalty stream from Murata commences in the 2010/11 financial year.  Revenue for the 12 months to 30 June 2010 decreased by AUD$1.9 million to AUD$5.9 million compared to AUD$7.8 million in 2009. Unit sales of 0.6 million were on par with units sold from the previous year due to the lingering instability in worldwide markets. The second half of the year did see a pickup in order activity and sales revenue as customer confidence began to return. As highlighted earlier, total revenue for 2009/10 includes a contribution from Murata for the Technology Transfer payments and the collaborative R&D Agreement. The operating result for the twelve months to 30 June 2010 was a loss of AUD$2.5 million (2009: loss of AUD$3.1 million) the major reasons for the positive variances being an overall reduction in the headcount and discretionary expenditure.

Business Environment

Portable electronic devices, one of the fastest growing segments of the electronics market, provide the greatest opportunities for CAP-XX's products.  Driven by customer requests, manufacturers are constantly adding to the functions and applications available on these devices. This means that power management continues to be an increasingly important consideration. The other important factor is size. The devices are becoming smaller as their capabilities are increasing.

CAP-XX technology provides a competitive advantage over other supercapacitor manufacturers, such as AVX, Maxwell Technologies and NEC/Tokin Corporation. Other manufacturers are unable to match the CAP-XX technology for thinness, energy density and power density. Many competitors manufacture higher-capacity, large package devices and focus on applications where the combination of thinness, energy density and power density is not an issue.

Opportunities

The Solid State Disks (SSD) market remains a large and attractive opportunity for CAP-XX.  As a result of lower prices, higher capacities, improved reliability and faster performance, SSDs are rapidly replacing hard disks. The SSD market to date has been limited to the enterprise market segment, due largely to higher cost. Penetration is growing from a virtual zero base in many consumer segments to substantial quantities by 2010/11.  We estimate this will drive SSD growth rates many times more than those of the underlying markets. To ensure system performance is not compromised, SSD's will require an uninterrupted power supply (UPS) to assist with the write speed required by large volumes of meta data that are produced. The attractions of the CAP-XX supercapacitor to the SSD manufacturers are the energy storage capability, delivered power and physical dimensions (small size and weight). CAP-XX has already achieved a number of design wins and shipments have already commenced with several customers.  Though 2009/10 volumes have been impacted by the economic conditions, it is expected that there will be large scale production within the 2010/11 financial year.

Other potential applications include digital still cameras, e-books, portable drug delivery systems, wireless sensors, uninterrupted power supplies, energy harvesting, hybrid automobiles, toll tags and location tracking devices.

Additional benefits of the Murata manufacturing agreement is that it has enabled rapid validation of the CAP-XX supercapacitor as a mainstream consumer electronics technology and it will increase exposure to markets and customers that were previously not targeted due to the Company's limited resources.  Association with Murata is helping gain recognition for and acceptance of the capabilities of the CAP-XX supercapacitor products to support high-power functions, and reduces misconceptions about their price and performance. 

While Murata is targeting key market segments, Murata is not intending to address the product type or size requirements of all markets. Murata will refer non-core customers to CAP-XX and CAP-XX will supply these markets directly using products made by its contract manufacturers.

Strategies for Growth

The Company continues to have discussions aimed at securing business with a number of global original equipment manufacturers active in portable consumer electronics. We are strengthening our relationships with these organisations and we have regular engineering meetings together with their integrated board providers. We are unable to comment on specific progress with individual companies but can state that we are pleased with overall progress and are confident that the available market for supercapacitors is increasing as manufacturers become familiar with the technology.

Most sales to date have been achieved by direct sales. The Company plans to maintain direct sales contacts with key customers. To gain broader market coverage, the Company has entered into distribution agreements with a number of well-qualified distributors covering Asia (inclusive of Japan, Korea and China) US and Europe. Sales growth from this distributor network is encouraging and distributors experience in selling our product is steadily improving. Additional distributors are currently being interviewed to take advantage of significant emerging markets such as China and India. It is expected that CAP-XX will have broader coverage in these two strategic markets within the next twelve months.

The Company will explore additional opportunities to increase the product offering both through the current distributors and direct to customers. These offerings may take the form of complimentary energy storage devices and modules. Separately, the Company will explore to enter new markets by leveraging its strong intellectual property and engineering expertise. The Company believes the automotive market may offer several opportunities for growth.

Research and Development

CAP-XX has a research facility at its headquarters in Lane Cove, Australia where a research and development team comprised of 9 engineers and scientists, ably assisted by 3 other engineers and scientists, is continuing development work to maintain CAP-XX's lead position in the engineering of electrode, separator and electrolyte material in supercapacitor devices. We have a close association with leading personnel across various research institutions. Our Scientific Advisory Board provides clear direction on the commercially relevant technologies our R&D programme should address.

The market in which the Company operates is competitive and is characterised by rapid technological change. The Company believes it currently has a strong competitive position in all its target markets with its capability to produce supercapacitors with a high energy density and power density in a small conveniently sized flat package. CAP-XX devices are also lightweight, work over a broad temperature range and have an operating lifetime measured in years.

The Company's success depends on its ability to protect and prevent any infringements of its intellectual property. To protect its intellectual property CAP-XX has considerable intellectual property embodied in patents covering the design, manufacture and use of its high performance supercapacitors. The CAP-XX patent portfolio currently consists of 19 patent families, 12 granted US patents, 4 US patent applications and corresponding international patents and applications. A further 4 patent applications have yet to enter national phase.  The patents cover supercapacitive devices, components for supercapacitors, techniques for manufacturing devices and applications of the devices in electronic circuits.

Outlook

The Company had recognised that several successful and reliable large scale contract manufacturers needed to be identified in order to pursue the mobile phone market and other opportunities. With the recent addition of Murata and Nationgate, CAP-XX's long term supply strategy is now in place. Access to capacity for the longer term is also in place to meet the expected increase in demand for the CAP-XX supercapacitor. Murata is well recognised as a worldwide components manufacturer and already supplies to large mobile handset manufacturers. Murata's worldwide distribution expertise will also assist with the sales and marketing of the CAP-XX supercapacitor. Murata has commissioned its production plant and has commenced sales. It is forecasting strong sales in the next calendar year. Polar Twin Advance and Nationgate are also well known in South East Asia as contract manufacturers of choice and have been operating successfully for more than 10 years. Both have impressive lists of customers.

As previously reported, Murata via its already well established supply chain interaction with the mobile handset manufacturers, has assumed the business development role in acquiring a mobile design win which would incorporate the CAP-XX supercapacitor. Although progress has been impacted by the global slowdown in the electronics market, expectations remain high. Murata has advised that it commenced shipping supercapacitors as at the second half of 2010 (calendar year) and are promoting the product strongly to mobile phone manufacturers and other applications. It is planning for strong growth in volumes in 2011. In parallel, Murata is working closely with CAP-XX in developing next generation supercapacitor solutions.

CAP-XX continues to pursue other business opportunities in addition to mobile handset manufacturers and good progress has been made especially in the SSD, energy harvesting and location tracking markets. Sales volumes in the second half of the 2009/10 financial year were steadily increasing but are modest. Early indicators such as an increase in customer orders and new customer queries would suggest that the electronics manufacturing market is in a state of recovery and the Company remains confident of rapid growth in the newly identified CAP-XX markets. The major short term focus for CAP-XX will be ensuring sufficient capacity is in place at the Malaysian contract manufacturers and Murata to satisfy sales demand; distributors are in place to capture the demand from the emerging markets; assisting where necessary with discussions with mobile phone manufacturers; and ensuring the new business opportunities identified above are aggressively pursued.

CAP-XX Limited

Income statement

For the year ended 30 June 2010

		Consolidated
		2010	2009
Currency: Australian Dollars	Notes	$	$
Revenue from continuing operations	1	5,889,531	7,826,198
Cost of sale of goods & services	2	(3,567,381)	(3,605,889)
Gross margin on sale of goods & services		2,322,150	4,220,309
Other revenue	1	54,610	69,292
Other income	3	148,617	439,609
General and administrative expenses		(2,107,262)	(3,091,449)
Process and engineering expenses		(592,194)	(986,653)
Selling and marketing expenses		(385,664)	(1,148,693)
Research and development expenses		(1,577,420)	(1,833,732)
Other expenses	4	(375,170)	(782,715)
(Loss) before income tax		(2,512,333)	(3,114,032)
Income tax benefit / (expense)		-	-
Net (loss) for the year		(2,512,333)	(3,114,032)
(Loss) attributable to members of CAP-XX Limited		(2,512,333)	(3,114,032)

CAP-XX Limited

Balance sheet

As at 30 June 2010

		Consolidated
		2010	2009
Currency: Australian Dollars		$	$
ASSETS
Current assets
Cash and cash equivalents		4,113,970	4,060,241
Receivables		368,906	293,218
Inventories		1,031,873	1,455,715
Other		58,448	36,195
Total current assets		5,573,197	5,845,369
Non-current assets
Property, plant and equipment		981,230	1,695,338
Other		208,233	208,233
Total non-current assets		1,189,463	1,903,571
Total assets		6,762,660	7,748,940
LIABILITIES
Current liabilities
Payables		1,157,646	1,189,679
Provisions		531,949	409,644
Other		1,149,653	2,894,214
Total current liabilities		2,839,248	4,493,537
Non-current liabilities
Provisions		119,441	158,520
Total non-current liabilities		119,441	158,520
Total liabilities		2,958,689	4,652,057
Net assets		3,803,971	3,096,883
EQUITY
Contributed equity		81,878,750	78,906,340
Reserves		2,491,744	2,244,733
Accumulated losses		(80,566,523)	(78,054,190)
TOTAL EQUITY		3,803,971	3,096,883

CAP-XX Limited

Statement of changes in equity

For the year ended 30 June 2010

		Consolidated
		Contributed Equity $	Reserves $	Accumulated Losses $	Total $
Balance at 1 July 2008		75,786,603	1,733,786	(74,940,158)	2,580,231
Total comprehensive income for the year as reported in the 2009 financial statements		-	(69,280)	(3,114,032)	(3,183,312)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs		3,119,737	-	-	3,119,737
Employee share options ‑ value of employee services		-	580,227	-	580,227
		3,119,737	580,227	-	3,699,964
Balance at 30 June 2009		78,906,340	2,244,733	(78,054,190)	3,096,883
Total comprehensive income for the year		-	26,146	(2,512,333)	(2,486,187)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax		2,972,410	-	-	2,972,410
Employee share options ‑ value of employee services		-	220,865	-	220,865
		2,972,410	220,865	-	3,193,275
Balance at 30 June 2010		81,878,750	2,491,744	(80,566,523)	3,803,971

CAP-XX Limited

Cash flow statement

For the year ended 30 June 2010

		Consolidated
		2010	2009
Currency: Australian Dollars		$	$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		6,456,817	7,762,358
Payments to suppliers and employees (inclusive of goods and services tax)		(9,554,890)	(9,519,118)
		(3,098,073)	(1,756,760)
Grants received		148,617	35,000
Interest received		54,610	69,292
Net cash (outflow) from operating activities		(2,894,846)	(1,652,468)
Cash flows from investing activities
Payments for property, plant and equipment		(23,835)	(890,862)
Proceeds from sale of property, plant and equipment		-	2,774
Net cash (outflow) from investing activities		(23,835)	(888,088)
Cash flows from financing activities
Proceeds from issue of shares (net of costs)		2,972,410	3,119,737
Net cash inflow from financing activities		2,972,410	3,119,737
Net increase in cash and cash equivalents		53,729	579,181
Cash and cash equivalents at the beginning of the financial year		4,060,241	3,481,060
Cash and cash equivalents at the end of the financial year		4,113,970	4,060,241

Notes to the financial statements

Basis of preparation

The financial information included in this announcement does not constitute statutory accounts within the meaning of the Australian Corporations Act 2001.  Whilst the financial information has been computed in accordance with Australian equivalents to International Financial Reporting standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001, this announcement does not itself contain sufficient information to comply with those requirements.

			Consolidated
			2010	2009
			$	$
Note 1 Revenue
Sales revenue
Sale of goods			2,242,879	2,519,828
Sale of services			3,646,652	5,306,370
			5,889,531	7,826,198
Other revenue
Interest			54,610	69,292
			54,610	69,292
Total revenue			5,944,141	7,895,490

				Consolidated
				2010		2009
				$		$
Note 2           Cost of Sale of Goods
Direct materials and labour				2,190,954		2,346,647
Indirect manufacturing expenses				1,376,427		1,259,242
				3,567,381		3,605,889

		Consolidated
		2010	2009
		$	$
Note 3           Other income
Foreign exchange gains		-	404,609
Government grants		148,617	35,000
		148,617	439,609

		Consolidated
		2010	2009
		$	$
Note 4           Other Expenses
Foreign Exchange losses		324,470	-
Net loss on disposal of plant and equipment		882	704
Consultants		-	237,850
Provision for credit notes / doubtful debts		(6,183)	24,617
Provision for make good on premises		40,000	40,000
Provision for returns and rework		16,001	51,589
Provision for diminution in recoverable value - withholding taxes		-	427,955
		375,170	782,715

		Consolidated
		2010	2009
		$	$

Note 5           Loss per share

Operating loss	(2,512,333)	(3,114,032)
Loss per share  - undiluted	($0.040)	($0.063)
Weighted Average Share on Issue during the year	63,638,644	49,325,503

 

END

 

 

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