Final Results

RNS Number : 0816R

Kleenair Systems International PLC

16 August 2010

 



KLEENAIR SYSTEMS INTERNATIONAL PLC

(AIM: KSI)

Preliminary announcement of results for the year ended 30 June 2010

CHAIRMAN'S STATEMENT

Introduction

The last Chairman's Statement, issued on 31 December 2009, covered key business and corporate events throughout the six month period ended 30th June 2009.  These accounts relate to the period ending 30^th June 2010.

Financial Results

The accounts for the period to 30th June 2010 show an operating loss of £63,042.

Loan Notes and Company Finance

On 28 July 2009, the Company executed a secured convertible loan note instrument creating 220,000 £1 secured convertible loan notes (the "Loan Notes"), of which the full amount was subscribed.  The principal terms of the instrument creating Loan Notes intended that they were convertible into Ordinary Shares at the request of the holder of the Loan Notes at a conversion price of £0.10 (the "Conversion Price").  At the same time, the Company entered into an option agreement with GIS (the "GIS Option Agreement") whereby GIS were entitled to purchase a further 220,000 £1 secured convertible loan notes on the same terms at anytime during the period of eighteen months from the date of the GIS Option Agreement.

On 10 November 2009, the Company received notice (the "First Conversion Notice") from certain holders of the Loan Notes requiring that £30,000 principal of the Loan Notes be converted into 300,000 Ordinary Shares (the "First Conversion Shares").  The First Conversion Shares were admitted to trading on AIM on 19 November 2009. 

On 20 November 2009, the Company received a second conversion notice from certain holders of the Loan Notes requiring that an additional £30,000 principal of the Loan Notes be converted into a further 300,000 ordinary shares, again at a conversion price of £0.10 per share (the "Second Conversion Shares").  The Second Conversion Shares were admitted to trading on AIM on 26 November 2009.

On 27 November 2009 the Company announced that in accordance with the terms of the GIS Option Agreement, GIS had exercised its option to subscribe for a further 32,248 Loan Notes.

On 13 January 2010, the Company received a third conversion notice from certain holders of Loan Notes requiring the Company to convert an additional £20,573 principal of the Loan Notes into a further 205,734 Ordinary Shares (the "Third Conversion Shares").  The Third Conversion Shares were admitted to trading on AIM on 20 January 2010. 

On 19 January 2010, the Company received a fourth conversion notice from the holder of the Loan Notes requiring the Company to convert a further £7,500 principal of the Loan Notes to be converted into a further 75,000 ordinary shares (the "Fourth Conversion Shares").  The Fourth Conversion Shares were placed with unconnected third parties and were admitted to trading on 25 January 2010. 

On 1 March 2010 the Company received a notice from GIS that it wished to exercise its option to subscribe for a further 86,254 Loan Notes.  The Consideration payable for the issue of Loan Notes had already been satisfied by the payment by GIS of debts owed by the Company.

On 6 April 2010, on behalf of the Company, the board announced that it had received a fifth conversion notice from certain of the Loan Notes holders requiring the Company to convert an additional £25,000 principal of the Loan Notes to be converted into a further 250,000 Ordinary Shares (the "Fifth Conversion Shares").  The Fifth Conversion Shares were admitted to trading on AIM on 7 April 2010.

On 7 June 2010, the Company announced that it had received a sixth conversion notice from certain holders of Loan Notes requiring the Company to convert an additional £161,000 of the outstanding principal of the Loan Notes into a further 1,610,000 Ordinary Shares (the "Sixth Conversion Shares").  The Sixth Conversion Shares were admitted to trading on 11 June 2010.

On 21 June 2010 the Company announced that in accordance with the terms of the GIS Option Agreement, GIS had exercised its option to subscribe for a further 95,588 Loan Notes.  Following this subscription, the remaining principal amount of Loan Notes over which GIS holds an option to purchase is £5,910 plus accrued interest at a rate of 5% per annum.

On 22 June 2010, the Company executed another secured convertible loan note instrument creating 1,000,000 £1 secured convertible loan notes (the "Second Loan Notes"), of which £300,000 have been subscribed.  The principal terms of the instrument creating the Second Loan Notes include that they were convertible at the request of the holder of the Loan Notes at a conversion price of £0.27 per share or at a discount of 10% to the average market price based on the previous five day's trading whichever is the lower (the "2010 Conversion Price"). 

Business and Corporate Review

The Company  held its annual general meeting on 3 August 2010 at which resolutions  to consider inter alia the following were proposed and duly passed.: adoption of new articles of association to take account of recent changes in English company law; the adoption of a new investing policy, the strategy of the Company going forward would be to seek suitable acquisition opportunities in the environmental and energy sectors in the United Kingdom and  to receive and adopt the Company's audited financial statements for the period ending 30 June 2009.

On 2 November 2009, the Company confirmed it had entered into a Call Option Agreement ("Call Option") with GlobalTech Marketing Limited ("GTM") on payment of a refundable deposit of £25,000 for the purchase from GTM of 74per cent. of the issued share capital of Argosec Pty Limited ("Argo"). The Company also confirmed that it did not intend to exercise the Call Option unless and until GTM finalised sufficient long-term financing to enable Argo to establish sustainable commercial production of the coal briquetting business and has recently determined not to exercise the option, as mentioned in the circular dated 9 July 2010. 

Change of Registered Office

The Company announces that it has changed its registered office to Kleenair Systems International Plc, 2nd Floor, 31 Davies Street, London W1K 4LP with immediate effect.

G. Saxton

Contacts:
Kleenair Systems International plc	www.kleenair-systems.com
Sarah Pozner, Company Secretary	[phone]
Biddicks	www.biddicks.co.uk
Zoë Biddick	[phone]
WH Ireland Limited	www.wh-ireland.co.uk
JN Wakefield / Marc Davies	[phone]

Statement of Comprehensive Income

For the year ended 30 June 2010

		Year to 30 June 2010		Nine months to 30 June 2009
	Notes	£	£	£	£
Revenue	4		-		-
Cost of sales			-		-
			───────		──────
Gross profit			-		-
Administrative expenses		464,197		252,267
Exceptional items:
Reduction in liabilities arising from company voluntary  arrangements
	7	(401,155)		-
		───────	(63,042)	─────────	(252,267)
			───────		──────
Operating loss	7
			(63,042)		(252,267)
Finance income	7		-		2
Loss before tax for the period
Tax	8		-		-
			───────		──────
Loss after tax for the period			(63,042)		(252,265)
			══════		═════
Other comprehensive income			-		-
			───────		──────
Total comprehensive income			(63,042)		(252,265)
			══════		═════
Total comprehensive income Attributable to:-
Owners of the company			(63,042)		(252,265)
			══════		═════
Loss per share - basic and diluted	9
Prior to exceptional items			(48.42p)		(62.94p)
After exceptional items			(6.58p)		(62.94p)
			══════		═════

There is no difference between basic and diluted loss per share.

Statement of Financial Position

For the year ended 30 June 2010

	Notes	2010 £	2009 £
Assets
CURRENT ASSETS
Trade and other receivables	10	4,495	-
Cash and cash equivalents	11	300,000	355
		304,495	355
CURRENT LIABILITIES
Trade and other payables	12	(77,011)	(448,920)
TOTAL ASSETS LESS CURRENT LIABILITIES		227,484	(448,565)
Non-current liabilities
CREDITORS: Amounts falling due after more than one year	13	(460,017)	-
		(232,533)	(448,565)
SHAREHOLDERS' EQUITY
Called up share capital	14	428,390	400,932
Share premium account	15	3,030,353	2,778,737
Other reserve	15	86,891	86,891
Retained loss	15	(3,778,167)	(3,715,125)
TOTAL EQUITY		(232,533)	(448,565)

Statement of Changes in Equity

For the year ended 30 June 2010

	Share	Share	Other		Retained
	Capital £	Premium £	Reserve £		Loss £
At 1 July 2009	400,932	2,778,737	86,891		(3,715,125)
Movement on loans converted to share	27,458	251,616	-		-
Loss after tax for the year	-	-	-		(63,042)
At 30 June 2010	428,390	3,030,353	86,891		(3,778,167)
At 1 July 2008	277,994	2,761,555	86,891		(3,462,860)
Movement in shares issued	818	17,182	-		-
Loss after tax for the period	-	-	-		(252,265)
Conversion of ordinary to 'B' shares	122,120	-	-		-
At 30 June 2009	400,932	2,778,737	86,891		(3,715,125)

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.

Statement of Cash Flow

For the year ended 30 June 2010

	Notes	Year to 30 June 2010 £	Nine months to 30 June 2009 £
Cash Flows from Operating Activities
Cash consumed by operation		(434,445)	(19,511)
Net cash from operating activities		(434,445)	(19,511)
Cash flows from investing activities
Interest received		-	2
Net cash from activities		(434,445)	2
Cash Flows from Financing
Net proceeds from issue of shares		-	18,000
Issue of convertible loan notes		734,090	-
Net cash from financing		734,090	18,000
Net cash inflow/(outflow)		299,645	(1,509)
Cash and cash equivalent at beginning of period		355	1,864
Cash and cash equivalent at end of period		300,000	355
Notes to Cash Flow Statement
Loss in period		(63,042)	(252,267)
(Increase)/decrease in receivables		(4,494)	11,798
Increase/(decrease) in payables		(366,909)	220,958
		(434,445)	(19,511)

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

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 company went into a CVA which was approved by the members on 24 June 2009. 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.   Revenue

      There was no income earned during the period.  No segmental analysis is required.

3.	Employees	Year to 30 June 2010 £	Period to 30 June 2009 £
	The average number of staff employed by the company   during the financial period amounted to:
	Executive directors	2	2
	Non-executive directors	2	4
	Other employees	-	-
		4	6
	The aggregate payroll cost of the other employees were:
		Year to 30 June 2010 £	Period to 30 June 2009 £
	Wages and salaries	-	-

4.   Directors

      Remuneration in respect of directors was as follows:-

		Year to 30 June 2010 £	Period to 30 June 2009 £
	Fees	10,000	-
	Termination of service agreement	10,000	-

      No options were granted to any director of KleenAir Systems International Plc during the period (2009: nil).

      L.Simons was paid £10,000 in respect of the termination of his service agreement.

5.	Operating Loss	Year to 30 June 2010 £	Period to 30 June 2009 £
	Loss on ordinary activities before taxation is stated after charging:
	Auditors' remuneration in respect of audit services	7,050	10,400
	Exceptional Income
	Reduction in liabilities of the company on settlement under the
	Company Voluntary Arrangements	401,155	-

6.	Taxation Due to the losses in the period, 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 21% (2009-21%).

		Year to 30 June 2010 £	Period to  30 June 2009 £
	Loss on ordinary activities before taxation	(63,042)	(252,265)
	Loss on ordinary activities by rate of tax	(13,239)	(52,976)
	Other tax adjustments	13,239	52,976
	Total current tax	-	-

      The Company has excess management excess of £1,101,000 (2009:£716,000) to carry forward, capital loss of £150,000 (2009-£150,000) and excess capital allowances of £78,000 (2009-£78,000) to carry forward. No deferred tax asset has been provided on any of them due to uncertainty of recovery.

7.   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 basis and diluted earnings per share for the year are based upon a loss after tax before exceptional income of £464,197 and after exceptional income £63,042 (2009: loss of £252,265).

      The weighted number of equity shares used in the basic and diluted calculation is 958,698 (2009: 400,806). 

      As the potential ordinary shares to be issued are deemed anti-dilutive, for the purpose of the dilution they have been excluded from the calculation of the weighted number of shares.

8.  Trade and Other Receivables
				30 June 2010 £	30 June 2009 £
Other receivables				-	-
Prepayments and accrued income				4,495	-
				4,495	-
9.  Cash and Cash Equivalent
				30 June 2010 £	30 June 2009 £
Cash held in escrow for the benefit of the company
Prepayments and accrued income				300,000	-

10. Trade and Other Payables			30 June 2010 £	30 June 2009 £
Trade payables			11,966	-
Accruals and deferred income			35,578	448,920
Other payables			29,467	-
			77,011	448,920
				-

11. Financial Liabilities Borrowings			30 June 2010 £	30 June 2009 £
At 1 July 2009			-	-
Issued in the year			734,090	-
Converted to ordinary shares of £0.01			(274,073)	-
At 30 June 2010			460,017	-
Wholly repayable within five years			460,017	-
Maturity Analysis
Within one year			160,017	-
In more than two years but not more than five years			300,000	-

      On 16 March 2010, under the secured loan note agreement dated 29 July 2009 pursuant to a loan  note instrument dated 29 July 2009,  Global Investment Strategy (UK) Ltd ("GIS") exercised an option to subscribe for a further 86,254 GBP1 convertible loan notes ("CLNs") of the Company.  

      The subscription for the further CLNs was made in satisfaction of debts owed by the Company totalling £78,413 and is inclusive of 10 per cent commission payable to GIS.

      On 21 June 2010, under the secured loan note agreement dated 29 July 2009, GIS exercised an option to subscribe for a further £95,588 CLNs of the Company. 

      The subscription for the further convertible loan notes was made in satisfaction of debts owed by the company totalling £86,898.44 and is inclusive of 10 per cent commission payable to GIS.

      On 30 June 2010, further to the creation of a convertible secured loan note instrument dated 22 June 2010 under which Kleenair may issue up to £1 million secured convertible loan notes ("CLN") to Global Investment Strategy (UK) Limited ("GIS"), GIS  purchased £300,000 worth of CLNs.

12. SHARE CAPITAL
	Year to 30 June 2010 £	Period to  30 June 2009 £
Authorised
150,185,574 (2009 - 87,788,000) ordinary shares of £0.01	1,501,856	877,880
122,120 (2009 - 12,212,000) 'B' ordinary shares of £0.01	1,221	122,120
400,932 deferred shares of £0.99	396,923	-
	1,900,000	1,000,000
Issued and fully paid
3,024,546 (2009 - 27,881,242) ordinary shares of £0.01	30,246	278,812
122,120 (2009 - 12,212,000) "B" ordinary shares of £0.01	1,221	122,120
400,932 deferred shares of £0.99	396,923	-
	428,390	400,932

      'B' ordinary shares

      At a general meeting held on 24 June 2010, the company created new B ordinary shares by re-designating 12,212,000 ordinary shares into 12,212,000 new B ordinary shares; the rights attaching to them are set out in a new Article 3 of the company's existing articles of association.

      The B ordinary shares are credited as fully paid and 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 meeting of the company (save in respect of resolutions to vary the rights attaching to the B ordinary shares) and 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.

      Re-organisation of authorised and issued share capital

At a general meeting of the company held on 21 August 2010, the following changes were approved to the company's share capital:

a)   Increase in the authorised share capital

      The authorised share capital was increased from £1,000,000 to £1,900,000.

b)   Capital re-organisation

            The effect of the capital re-organisation was to consolidate every 100 existing ordinary shares into 1 new ordinary share and 1 deferred Share.  The capital re-organisation consisted of the following steps:

i)    The company's new authorised share capital was consolidated into ordinary shares of nominal value £1 each as a result of the issued ordinary shares of 1p each and B ordinary shares of 1p each being consolidated into ordinary shares of £1 B ordinary shares of £1, respectively, on the basis of 1 ordinary share of £1 for each ordinary shares of 1p;

c)  Capital re-organisation

ii)    Each of the issued ordinary shares of nominal value of £1 arising by reason of (i) above was then sub-divided into one new ordinary share of 1 penny and one deferred share of 99p; and

iii)   Each of the issued B ordinary shares of nominal value £1 arising by reason of (i) above was sub-divided into one new ordinary Share of 99p each.

            The new ordinary shares replaced the existing ordinary shares under the newly approved company's articles of association.

            The provisions in relation to the deferred shares are also contained in the company's articles of association.

            The deferred shares have very limited rights and are effectively valueless.  The deferred Shares have no voting rights, and have no rights as to dividends and only very limited rights on a return of capital.  They are not freely transferable.

            The new ordinary shares and new B ordinary shares have the same rights as those currently accruing to the existing respective ordinary shares under the company's articles of association, including those in respect of voting and entitlement to ordinary shares will not be affected.

      (i)   on 19^th August 2009, 5,000 new ordinary shares of 1p each were issued to the supervisor of CVA.

      (ii)   Conversion of loan notes during the year:

			Number
13 November 2009			300,000
20 November 2009			300,000
14 January 2010			205,734
19 January 2010			75,000
12 January 2010			250,000
7 June 2010			1,610,000
At 30 June 2010			2,740,734

13.  Equity Reserves

	Share premium account	Other reserves	Profit and loss account
	£	£	£
At 1 July 2009	2,778,737	86,891	(3,715,125)
On conversion of loan notes	251,616	-	-
Loss for the year	-	-	(63,042)
At 30 June 2010	3,030,353	86,891	(3,778,167)

      Reconciliation of movements in shareholders

Funds and Reserves	Equity Instruments	Profit or Loss income	Total
	£	£	£
At 1 July 2009	3,266,560	(3,715,125)	(448,565)
Increase in share capital	279,074	-	279,074
Loss for the year	-	(63,042)	(63,042)
At 30 June 2010	3,545,634	(3,778,167)	(232,533)

14.   Financial Commitment

        Capital commitment

  There was no capital expenditure that had been contracted for at the balance sheet date but not yet incurred.

15.   Contingent Liabilities

The company has no contingent liabilities.

16.  Ultimate Controlling Party

      In the opinion of the directors, there is no controlling party at the balance sheet date.

17.  Financial Instruments

      The company has no significant derivatives or financial instruments other than bank accounts held with variable rates of interest.  Where in the future the directors perceive exposure to financial risk regarding financial instruments, they will seek to obtain appropriate hedging instruments to limit the group's exposure to such risks.

18.  Currency Exposure

      The company has minimal business transactions in foreign currencies and therefore incurs minimal transactions risk.  If commercially viable such risk will be hedged in the future.

      The company does not hold monetary assets in foreign currency.

      The company had no open foreign exchange contracts at the balance sheet date.

19.  Related Party Transactions

   At the year end, the outstanding loan amount due to Bramley Limited was £nil (2009 - £Nil).

      During the year, the company wrote off an amount of £nil - (2009 - £27,296) from a loan to its subsidiary, KleenAir Systems Limited which went into liquidation on 17 March 2009.

      No other transactions with related parties such as those which are required to be disclosed under International Financial Reporting Standard 24 'Related Party Disclosures' occurred.

20.  Post Balance Sheet Events

      There have been no events after the balance sheet date which require disclosures in the financial statements.

21.  Copies of audited accounts for the year ended 30 June 2010 are available from the Company at its registered office at Kleenair Systems International Plc, 2nd Floor, 31 Davies Street London W1K 4LP and will also be available on the Company's website www.kleenair-systems.com.

 

END

 

 

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