Final Results - Part 1

RNS Number : 3146H

Sagentia Group PLC

18 February 2010

 



SAGENTIA GROUP PLC

('Sagentia' or the 'Group')

Annual Report and Financial Statements 2009

PART 1

Highlights

·              Significant recovery in technology consulting profit during second half of year following actions taken in first half

o    Consulting fees for services' revenue of £20.2m (2008: £22.9m) and gross profit £0.4m (2008: £2.1m) from the full year following H109 gross loss of £0.4m

o    Net debt decreased by £1.5m to £2.7m (2008: £4.2m)

·              Appointment of new CEO, Brent Hudson in October 2009 following the unexpected death of Alistair Brown in April.

·              Group structure further simplified:

o    Sagentia Catella AB acquired by energy specialist Intertek Semko AB

o    Minority shareholding of Sagentia SGAI acquired

o    Sagentia Public Sector sold to management

o    Sagentia GmbH office closed

o    Sagentia Group Employee Trust closed

o    Atranova shareholding diluted below subsidiary

·              Non-cash write down in fair value of financial assets and other non-current asset movements of £3.1m (2008: £2.0m) resulted in a pre-tax loss of £3.5m (2008: £2.2m).

o     Transfer of Investments to non-current assets classified as held for sale

o     Deferred income tax asset of £0.6m recognised

o     Loss per share of 13.5 pence (2008: 9.7 pence)

o     Shareholders' funds per share of 58.7p (2008: 71.9p)

·              Awards and Licences:

o     Best LED Lighting Application award at Elektra 09 European Electronics Industry Awards

o     Innovative high colour quality lighting technology licensed to Nualight in the global food retail sector

o     Non-exclusive licensing deal concluded with Novotechnik in respect of its non-contact sensor technology

Sagentia is well placed to respond to changing market conditions in 2010

Enquiries:

Sagentia Group PLC:

[phone]

Brent Hudson

Guy McCarthy 

www.sagentiagroup.com

Arbuthnot Securities:

[phone]

John Prior

Antonio Bossi

www.arbuthnot.co.uk

Chairman's statement

The last year has certainly been one of challenges for Sagentia.

In April 2009 it was with great sadness that I had to announce the totally unexpected death of our Group CEO, Alistair Brown. During his year in the post, Alistair had made great strides in improving the business and realigning the Group's strategic direction. Alistair left a wife and two children. Dan Flicos, the Group's Commercial Director, subsequently assumed full operational control of the business, while the Board began the process of identifying a successor. That process was completed in October 2009 with the appointment of Brent Hudson. Brent brings with him a wealth of relevant board-level and international business experience, particularly in growing technology-focused companies, a fresh perspective to the business, and the Board looks forward to working with him as we continue to move the business forward. 

Dan Flicos decided to leave the business from the end of October 2009. At that time I thanked him for his immense contribution to the Group over the years, especially during his last seven months when he played a pivotal role in guiding the Company through a difficult and challenging time. I continue to wish him all the very best in his future career.

During the first half of 2009 Sagentia had not been immune to the global recession, with 'Fees for services' revenue down 6% compared with the same period in the previous year. Despite moving swiftly to implement a number of cost saving activities across the business while at the same time increasing the selling activities, the consulting operations returned a small loss in the first six months of the year.

As expected, with the end of the Vodafone contract, the second half of the year saw Fees for services' revenues decrease however, due to the decisions taken in the first half, it also saw consulting operations return to gross profitability. Our fees for services business in the second half more than compensated for the losses sustained in the first half, and resulted in an overall consulting gross profit for the year of £0.4m. We have ended the year a smaller but more profitable and focussed consultancy and intellectual property ("IP") exploitation business.   

Our strategy for the business remains to focus on our consulting and IP exploitation activities. During the year we have continued to simplify the group structure and dispose or close non-core activities. These have included the disposal of the Sagentia Catella AB, our Swedish Battery Testing company, the sale of Sagentia Public Sector to its management, and the closure of the Sagentia Employee Trust. While none of these disposals have generated significant cash for the group, they have removed non-core low margin activities and allowed management to concentrate on growing and developing our core activities

On the investment front we continue to seek to reduce our exposure to third party companies and during the course of the year we have reduced our exposure to Atranova, such that it is no longer a subsidiary, and realised cash of £0.4m from the disposal of CMR Fuel Cells earlier in the year. We have moved our remaining investments to 'non-current assets classified as held for sale', reflecting our intention to dispose of them, while at the same time making a significant provision against the value we believe they will realise.   

Although it is extremely disappointing to yet again see the overall business returning a loss due to further write-down of these historic and non-core investments, it is very encouraging to see the consulting fees for service reversing the loss of the first half to return an overall consulting profit for the year. This is a great tribute to all our people and, having entered the new year with a strong order book, with the business firmly focused and on a stable footing, we look to the future with renewed optimism.

Chris Masters

Chairman

17 February 2010

Chief Executive's review

The Chief Executive's Review usually comprises an operational review of the past 12 months together with an outlook for the current year. As my knowledge of Sagentia from the 'inside' comprises only a little over 3 months, I think it is more appropriate to start with my vision for the company which I see as building on the focus on consulting and IP exploitation that the Board and management have been driving through over the last 18 months, and accelerating its implementation. 

I am totally committed to making Sagentia a consistently successful business. We have defined success as being "a company which is globally recognised in its niche markets, and which is growing, profitable and a great place to work". In terms of the major stakeholders in our business, namely our clients, our shareholders and our employees:

·      our clients will benefit from the focus on fewer sectors, which will allow us to improve our depth of knowledge of their business issues in our chosen markets which, in turn, will allow us to add increasing value to our clients' businesses

·      a growing and consistently profitable business will lead to an increase in shareholder value 

·      employees undertaking interesting and challenging work for our clients in a growing and profitable business with good remuneration, career paths and working environment will allow us to retain and develop talented staff while attracting new staff to the business

Our core niche markets are Medical (Drug Delivery, Diagnostics, Critical Care and Surgical), Industrial and Consumer. We undertake numerous projects in these areas which make a difference including FreeHand, a Prosurgics' laparoscopic robotic camera; Aktilite, Photocure's photodynamic treatment lamp; and the Vodafone micro-payments system. We have good Quality Management Systems being ISO 9001 and ISO 13485 (regulatory requirements in the medical device industry) certified, which overlay and prescribe our project management systems, which in turn help us deliver projects successfully in an increasingly regulated marketplace, and which tell us that our clients are very satisfied with the work delivered. 

Sagentia will continue to pursue a strategy of generating non-consulting income through IP licensing and through product royalties. Additional licences were signed during the year with Nualight (LED Lighting) and Novotechnik (sensor technology), and as noted last year income will be generated during the course of this year from Master Meter (sensor technology). Similarly, we have undertaken a number of projects during the year exploiting thin-film heating technology, which is finding applications in areas as diverse as kitchen appliances and hair care. 

In relation to the operations for the year, our consulting services are focused on the creation, development and delivery of new business opportunities, products and services for our clients. Sagentia, like most companies however, had to take action to combat the effect of the global recession. It was also affected by the transfer of the support services for the micro-payments system which constituted a major part of the Vodafone contract. The company completed a cost saving exercise during the first half of the year in response to both of these issues. This included reducing central non-operating costs as well as poorly utilised operating costs; completing the disposal of two non-core operations, Sagentia Catella AB and Sagentia Public Sector Ltd; and closing our operations base in Germany. These decisions helped the return to consulting profitability during the second half of 2009, and has put the Company in a good position for 2010.

Sagentia supported Vodafone in the development of its groundbreaking Vodafone Money Transfer service which has been widely recognised as a breakthrough in payment solutions. Given its success, and the wish by Vodafone to roll it into more markets, the service support was moved to a global IT service delivery organisation. The Vodafone Money Transfer team within Sagentia, comprising approximately 20 staff and a team of IT subcontractors, was transferred during September. We would like to thank all of these people for their hard and award winning work.

Our investment portfolio, while not active, has again shown a loss on the period. The write-down of the £1.2m deferred consideration receivable from the disposal of Sensopad, was noted in the Interim statements. We will continue to look for opportunities to dispose of our remaining holdings however, given the uncertainly surrounding their realisable value, the Board has decided to take a further provision of £1.9m against these investments.   

Information on the Group and various projects we have completed for clients is also available from 'The Gen', our company magazine, recent editions of which may be downloaded from our web site (www.sagentia.com).

Finally, I believe that the majority of the building blocks needed for Sagentia to be a success are in place, and look forward to reporting on the results for 2010.

Brent Hudson

Chief Executive

17 February 2010

Financial review

Analysis of segmental results

The following table includes an analysis of the sources of revenue and operating profits and losses on ordinary activities across Sagentia, and is extracted from the Consolidated Income Statement and the segmental information set out in note 4 to this report.

	Note	2009	2008	2009	2008
£000		Revenue	Revenue	Profit / (Loss)	Profit / (Loss)
Consulting operations
·      Fees for services		20,215	22,945	381	1,869
·      Recharged project expenses		2,221	4,434	-	-
·      Licence / royalty income		136	254	52	215
		22,572	27,633	433	2,084
Other operations		1,242	1,438	(320)	(744)
Revenues : Gross profit (loss)	4,5	23,814	29,071	113	1,340
Change in fair value on financial assets and other non-current asset movements	14			(3,122)	(1,982)
Redomiciliation costs				-	(589)
Share based payment charge	17			(170)	(170)
Operating loss				(3,179)	(1,401)
Finance Charges (net)	6			(278)	(809)
Loss on continuing operations before income tax				(3,457)	(2,210)
Income tax credit	9			556	123
Loss on continuing operations for the period				(2,901)	(2,087)

Revenue: Note 4

Revenue decreased by 18% to £23.8m (2008: £29.1m) due primarily to a decrease of £2.7m of Consulting Operations - fees for services, and £2.2m in recharged project expenses.

Consulting Operations - fees for services include £1.5m (2008: £2.0m) from subsidiaries now disposed, and £4.7m (2008: £7.9m) from micro payments project now complete.   

Other operations include £1.14m (2008: £1.18m) fees received for rental services (including rent, service and utilities charges) at Harston Mill. Asset management fees of £0.2m were included in 2008 results.

License and royalty fee income includes fees from Astra Zeneca (magnetic tagging), AB Electronics (Sensopad sensor) and Nualight (LED lighting).

Gross profit (loss): Note 5

Gross profit before fair value and other non-current asset adjustments fell to £0.1m (2008: £1.3m). This includes a profit for the Consulting Operations of £0.4m (2008: £2.1m) offset by Other Operations loss of £0.3m (2008: £0.7m). Other operations losses resulted from Spin out losses of £0.5m (2008: £1.0m) primarily Atranova Ltd (no longer a subsidiary) of £0.5m (2008: £0.6m).

Change in fair value on financial assets and other non-current asset movements: Note 14

The reduction of £3.1m comprises a £1.2m write-down of accrued income (deferred consideration receivable), and £2.2m write down in our unquoted investments, partially offset by a release of provision against Atranova on deconsolidation. 
The deferred consideration receivable was originally recognised following our disposal of Sensopad Technologies Ltd in 2004, and is dependent upon the quantity of sensors to be sold within a four year period following initial production. The write-down reflects the reduced levels of Sensopad sensors being sold into the automotive sector compared with those originally estimated, and hence the uncertainty over our ability to recover the remaining deferred consideration receivable balance.

The provision against the investments recognises the current uncertainty in the valuation of unquoted pre-revenue investments that are expected to seek further funding from shareholders. The investments have been moved to non-current assets classified as held for sale following the Board decision to seek an exit.

The Group's full interest in CMR Fuel Cells plc was disposed of in March 2009 for cash consideration of £0.4m.

Cost of options: Note 19

The cost of those options issued and outstanding at the year-end for 2009 is calculated as £0.2m (2008: £0.2m). A net additional 0.5m options were issued during 2009 adding a cost of approximately 3p per option per year to the income statement.

Finance Charges: Note 6

Finance charges for the year decreased to £0.3m (2008: £0.8m) due to an reduction in the value of the interest rate swap liability (identified in Note 18) of £0.4m, and a reduction in interest payable of £0.1m.

Loss per share: Note 11

The loss per share was 13.5p (2008 - 9.7p)

Income tax credit: Note 9

The income tax expense includes the recognition of £0.6m (2008: £Nil) deferred income tax asset.

Analysis of balance sheet

At 31 December 2009 Sagentia had shareholders' funds of £12.7m (2008: £15.4m) which is equivalent to approximately 58.7p per share (2008 - 71.9p).

This includes freehold land and buildings with a net book value of £14.0m (2008: £14.0m) against which Sagentia has an outstanding loan of £6.5m (2008: £9.0m). The property comprises Sagentia's 77,000 square feet freehold headquarters in Harston, England. The principal tenant of the property remains Sagentia Limited, which occupies 35,000 square feet on arms length terms. The majority of the remaining space is let on short to medium term leases - see Note 13.

The fair value of equity investments in investee companies at the year-end was £1.4m (2008: £5.3m) and have been moved to 'non-current assets classified as held for sale' in 2009.

Sagentia had cash balances of £4.2m (2008: £5.3m).

At the year-end Sagentia had a loan facility of up to £9.0m of which £6.5m was drawn down. At the date of these accounts the loan drawn down was £5.5m. This loan has certain undertakings of the borrower including that the amount drawn cannot exceed 70% of consolidated net worth (ie shareholders funds does not fall below £12.9m) which would restrict the amount available to be drawn to £8.9m. The Board does not currently envisage needing to draw down the loan to this level in the foreseeable future.

Cash and cash flow

The cash and cash equivalents during 2009 decreased by £1.1m (2008: increased by £4.4m). This resulted from cash inflows from operating activities of £1.1m (2008: inflows of £2.6m) plus cash inflows from investing activities of £0.5m (2008 - outflows of £0.5m) offset by cash outflows of £2.6m (2008 - inflow of £2.3m) from financing activities including the repayment on the loan facility.

Operating cash inflows during the year resulted from a Gross Profit which converted into a positive cashflow of £0.1m (2008: £0.7m) with an improvement in working capital management during the year of £0.9m (2008: £1.9m).

Cash inflow from investing activities of £0.5m (2008: outflow £0.5m) resulted from discretional spending on fixed assets of £0.2m, offset by the sale of Sagentia Catella assets of £0.2m, sale of Sagentia Group plc own shares and sale of CMR Fuel Cell shares of £0.4m.

Cash outflow from financing activities of £2.6m (2008: inflow 2.2m) resulted from the part repayment of loans drawn down during 2008. Bank loan details are disclosed in Note 18.

Sagentia continues to carefully manage its cash resources so that its current liabilities can be met as they fall due, and that business and investment activities can progress in line with the business plan.

Guy McCarthy

Financial Director

17 February 2010

Report of the Directors

The Directors present their annual report on the affairs of Sagentia Group plc, together with consolidated financial statements and independent auditors' report for the year ended 31 December 2009.

Business Review and principal activities

The principal activities of Sagentia are the provision of skill‑based technology consulting services, and the development and exploitation of intellectual property.

A review of Sagentia's activities is contained in the Chairman's Statement and the Chief Executive's Review. The entities principally affecting the profit and assets of Sagentia in the current and preceding year are listed in Note 14 to the financial statements.

Key performance indicators

Management seek to manage cash and profitability of the Group. Cash and working capital are reviewed via the Net Debt balance. Profitability of the Consulting sector, with its relatively fixed cost base, is managed via the review of revenue. Secondary KPIs of utilisation and fee rates achieved by division are also reviewed.

·      Group turnover was £23.8m (2008: £29.1m) of which Consulting fees for services was £22.6m (2008: £27.6m) 

·      Gross profit was £0.1m (2008: £1.3m)

·      Loss on continuing operations before income tax was £3.5m (2008: £2.2m)

·      Loss attributable to equity holders of the parent was £2.9m (2008: £2.2m)

·      Net debt £2.7m (2008: £4.2m)

Individual results at a segmental level are also discussed in the Financial Review earlier.

Substantial shareholdings

As at the date of this report, Sagentia had been notified of the following significant interests in its ordinary share capital:

Shareholder	Ordinary shares held	% held
Catella Holding AB	10,512,080	48.4
Herald Investment Management Limited	1,387,491	6.4
Prof. Gordon Edge CBE	1,129,807	5.1
Mark Bradshaw	1,034,209	4.8

Principal risks and uncertainties facing Sagentia

The operational risks are discussed in Note 25, with the financial and trading risks discussed in Note 3 to the financial statements.

Planned future developments

A review of Sagentia's current and future activities is contained in the Chairman's Statement and Chief Executive's Review.

Election of Directors

Brent Hudson was appointed by the Board during the year, and as such will offer himself for re-election at the next Annual General Meeting. Guy McCarthy will retire by rotation and offer himself for re-election at the next Annual General Meeting.

Dividends

No interim dividend was declared during the year and the directors do not recommend that a dividend be paid in respect of the year ended 31 December 2009 (2008: £Nil). It is the Board's policy to invest retained earnings to fund the further development and growth of the consulting business. The Board will review its policy periodically in the context of Sagentia's distributable reserves and financial position.

Directors

The directors of the Company who served during the year were:

Director	Role at 31 December 2009	Date of (re-) appointment	Retired	Board Committee*
Chris Masters	Chairman	09/05/09		A	I	N	R
Lars Kylberg	Senior Non-Executive	09/05/09		A	I	N	R
Staffan Ahlberg	Non-Executive	09/05/09		A		N	R
Brent Hudson	Chief Executive	05/10/09
Guy McCarthy	Finance Director	17/03/09
Alistair Brown	Chief Executive	17/03/09	10/04/09
Dan Flicos	Commercial Director	09/05/09	30/10/09

*Board Committee abbreviations are as follows: A = Audit Committee; I = Independent Director; R = Remuneration Committee; N = Nomination Committee

Dr Chris Masters- Chairman

Chris took his doctorate in Chemistry at Leeds University and then worked for Shell Research BV in the Netherlands, and with Shell Chemicals in the UK. He joined Christian Salvesen as Business Development Manager in 1979, becoming a director of its US operation and subsequently its Chief Executive from 1989 to 1997. After this, he was appointed Executive Chairman of Aggreko plc, a post he held until January 2002. Other directorships include British Assets Investment Trust plc (retired 2009), Alliance Trust plc, John Wood Group plc, the Crown Agents, and Creative Scotland 2009 Ltd.

Lars Kylberg- Snr Independent Non-Executive Director

Lars has been a Non-Executive director of Sagentia Group AG since 2000. He worked at ASEA as Managing Director of its subsidiaries in Colombia and South Africa from 1967 to 1976. He was president of ASEA Skandia from 1976 to 1982 and Executive Vice president of Saab Scania from 1982 to 1984. He was President and Chief Executive Officer of Incentive AB and Alfa Laval AB from 1984 to 1989, two large Swedish industrial groups. From 1991 until 1995 he was president and CEO of Saab Scania and was Chairman of Morgan Crucible Company plc from 1996 to 2006.

Staffan Ahlberg- Non-Executive Director

Staffan received his Master of Science in Electronics from the Royal Institute of Technology in 1966 and his Bachelor of Business Administration from the Stockholm School of Economics in 1969. He worked as a management consultant at PA International from 1968 until 1978, when he founded International Business Systems AB. He was the first managing director of International Business Systems AB, took the company public in 1986 and kept serving International Business Systems AB during 24 years until retiring in 2002, when International Business Systems AB was a global company with more than 2,000 employees in 22 different countries. He has recently resigned as director of Catella AB, a Stockholm based investment asset management, corporate finance and private equity business.

He was the Chairman of two public information technology companies in Stockholm, ENEA AB and ProAct AB (retiring from both in 2009).

Brent Hudson*- Chief Executive Officer

Brent joined Sagentia in October 2009. He qualified as a management accountant in 1985 and began his career working in financial management for FTSE-listed companies before moving to KPMG management consulting where he worked as a management consultant specialising in marketing and strategic consulting. He gained an MBA from Cranfield University whilst working at KPMG. Since then, he has held either senior or board-level roles at technology-led companies in both the UK and USA, including Cambridge-based electronic product developers Symbionics Ltd. and Tality (UK) Ltd, QinetiQ Group PLC, and more recently as CEO of Beach Solutions Ltd.

Guy McCarthy*- Finance Director

Guy took his B.Sc. in Pure Mathematics at Bath University in 1984 and completed an MBA through the Open University in 2002. He joined Price Waterhouse in 1984, and qualified as a Chartered Accountant in 1987. He remained with Price Waterhouse, as an audit manager until 1990 when he joined Sagentia Limited. He has undertaken a number of senior management positions and company secretarial roles within the Sagentia over the years, most recently as Finance Director.

* Retire by rotation at the next AGM.

Directors' interests in shares and contracts

Directors' interests in the shares of Sagentia, at 31 December 2009 and 31 December 2008, and any changes subsequent to 31 December 2009, are disclosed in Note 8. None of the directors had an interest in any contract of significance to which Sagentia was a party during the financial year, other than that disclosed in Note 8.

Environment

Sagentia's policy with regard to the environment is to ensure that we understand and effectively manage the actual and potential environmental impact of our activities. Our operations are conducted such that we comply with all legal requirements relating to the environment in all areas where we carry out our business. During the period covered by this report Sagentia has not incurred any fines or penalties or been investigated for any breach of environmental regulations.

Employees

Sagentia is dependent upon the qualities and skills of our employees. The commitment of our people has played a major role in our business success. This has been demonstrated in many ways, including improvements in customer satisfaction (as measured under our ISO9001 system) of our UK consultancy business, the development of our service offerings and the flexibility they have shown in adapting to changing business requirements and new ways of working. Employees' performance is aligned to goals through an annual performance review process that is carried out with all employees, and via Sagentia's profit share and Sagentia's option schemes.

Non-current assets

Details of movements in property, plant and equipment during the year are set out in Note 13 to the financial statements.

The property was last valued during August 2008. The directors do not believe that the carrying value of the property is significantly different to its fair value.

Research and development

Sagentia has a continuing commitment to a high level of research and development, both on its own behalf, and on behalf of its clients. Directors estimate that research and development costs incurred during the year amounted to £5.2m (2008: £6.2m), all of which has been written off to the income statement. This level of spend reflects the need to be at the forefront of technological advance to ensure future growth.

Employment policies

Sagentia's employment policies are non-discriminatory on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-disability or marital status. Sagentia gives every consideration to applications from all people and provides training and the opportunity for career development wherever possible.

Sagentia operates a share option scheme, which is at the discretion of the Remuneration Committee. Executives and managers in Sagentia are invited to participate on the basis of recommendations made by the CEO to the Remuneration Committee. Sagentia provides employees with information about its activities through regular briefings and Sagentia intranet. Employee involvement is encouraged across a wide range of business issues and Sagentia operates an Employee Consultative Committee to consult on collective matters that affect employees.

Supplier payment policy

The supplier payment policy is to pay suppliers generally at the end of the month following that in which the supplier's invoice is received. This policy is made known to staff that make payments to suppliers, and to all suppliers on request. Sagentia payables balance for 2009 represents a creditor payment period of 23 days (2008: 32 days).

Charitable and political donations

No charitable or political donations were made in the year (2008: £Nil).

Post balance sheet events

There were no post balance sheet events to disclose.

Auditors

The directors appointed Grant Thornton UK LLP as auditors during the year. The auditors are willing to continue in office, and a resolution to reappoint them will be proposed at the forthcoming annual general meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

·              select suitable accounting policies and then apply them consistently

·              make judgments and estimates that are reasonable and prudent

·              state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements

·              prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the directors is aware:

·              there is no relevant audit information of which the company's auditors are unaware; and

·              the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Corporate Governance Report

Statement about applying the Principles of Good Governance

The Company is registered in England and Wales, and listed on the Alternative Investment Market of the London Stock Exchange ('AIM'). As such it has sought to apply the overlying principles of good governance set out by both parties. In particular Sagentia has applied the Principles of Good Governance set out in Section One of the Combined Code (2008) throughout the year by complying with the Code of Best Practice as reported below. Further explanation of how the Principles have been applied is set out below.

Corporate Governance Statements

Sagentia is committed to the principles of corporate governance contained in the Combined Code and for which the Board is accountable to shareholders. This report explains how the Directors seek to apply the requirements of the Combined Code to procedures within Sagentia.

Statement of compliance with the Code of Best Practice

Sagentia has complied throughout the year with the Provisions of the Code of Best Practice set out in Section One of the Combined Code except for the following matters:

Not all of the Non-Executive Directors on the Remuneration Committee or Audit Committee are independent

The Board does not formally evaluate the performance of each of its Directors, but evaluates the effectiveness of the Board as a whole as part of the Strategy Review annually in quarter 3 each year by open forum discussion both with and without the executive Directors in attendance.

The Chairman and senior Non-Executive Director on the Board at the year-end are independent.  Staffan Ahlberg is not considered independent under the Code as he was a director of Catella AB until mid 2009.

Although the structure of the Board and a number of its subcommittees does not comply with the Combined Code, the Board believes that its composition is representative of the shareholders' register and, in particular, of the significant shareholding position of Catella Holding AB. The Board believes that it is well advised by Lars Kylberg and Staffan Ahlberg, very experienced non-executive Directors. It is the Board's intention to continue to seek the view of institutional shareholders regarding its composition and to adapt the composition of the Board in line with its strategic direction.

Board of Directors

Biographical details of the directors are included at the start of the Directors' Report.

At 31 December 2009, the Board comprised a Chairman, two Executive Directors and two Non-Executive Directors. One of the two Non-Executive Directors is independent. All directors bring a wide range of skills and international experience to the Board. Lars Kylberg is the senior independent Non-Executive Director. The Chairman holds meetings with the Non-Executive Directors without Executive Directors present.

The roles of Chairman and Chief Executive are separated and clearly defined. The Chairman is primarily responsible for the working of the Board of Sagentia Group plc, and the Chief Executive for the running of the business and implementation of the Board strategy and policy. The Chief Executive is assisted in the managing of the business on a day-to-day basis by the Finance Director and the Executive team of Sagentia.

High-level strategic decisions are discussed and taken by the full Board, with recommendations as appropriate from the Chief Executive. Investment decisions (above a de minimus level) are taken by the Board, following the recommendation from the Executive Directors. Operational decisions are taken by the Chief Executive within the framework approved in the annual budgets for their part of Sagentia. Sagentia's principal operating subsidiary, Sagentia Ltd, is run by an executive team, chaired by the Chief Executive.

The Board met six times during 2009. The Board regulations define a framework of high-level authorities that maps the structure of delegation below Board level, as well as specifying issues which remain within the Board's preserve. The Board will meet at least six times a year to consider a formal schedule of matters including the operating performance of the advisory, exploitation and investment businesses and to review Sagentia's budget strategy and business model.

Non-Executive Directors are appointed for a three-year term after which their appointment may be extended by mutual agreement after rigorous review by the Board. In accordance with the company's Articles of Association, one-third of the Board are required to retire by rotation each year so that over a three-year period all Directors will have retired from the Board and faced re-election.

All directors have access to the advice and services of the Company Secretary and other independent professional advisers as required. Sagentia has put in place processes by which Non-Executive Directors can familiarise themselves with all aspects of Sagentia and have access to key members of staff.

It is the responsibility of the Chairman and the Company Secretary to ensure that Board members receive sufficient and timely information regarding corporate and business issues to enable them to discharge their duties. Sagentia's strategy is communicated to all employees in regular briefings.

Risk management is crucial to the success of Sagentia, and the Board and Audit Committee consider the risks associated with Sagentia's technology and intellectual property pipeline, technical resources, as well as regulatory and other operational risks. Risks are reviewed by the Board as part of the strategy review and the Audit Committee has since reviewed progress in all risk areas.

Relations with shareholders

The directors seek to build on a mutual understanding of objectives between Sagentia and its institutional shareholders by meeting to discuss long-term issues and receive feedback, communicating regularly throughout the year and issuing semi-annual trading updates. The Board also seeks to use the Annual General Meeting to communicate with its investors.

Balanced and understandable assessment of position and prospects

The Board has shown its commitment to presenting balanced and understandable assessments of Sagentia's position and prospects by providing additional information to that required to comply with statutory obligations. This principally includes additional disclosures within the financial report in relation to segmental breakdown of activities.

As well as complying with the provisions of the Code as described in Sagentia's corporate governance statements, the Board has applied the Principles of Good Governance relating to directors' remuneration as described below. The Board has determined that there are no specific issues which need to be brought to the attention of shareholders. Approval of this report will not be sought at the Annual General Meeting.

Remuneration strategy

Sagentia operates in a competitive market. If Sagentia is to compete successfully, it is essential that it attracts, develops and retains high quality staff. Remuneration policy has an important part to play in achieving this objective. Sagentia aims to offer to its staff a remuneration package which is both competitive in the relevant employment market and which is set in relation to individual performance. For 2009 and 2010 the remuneration package would comprise salary, pension contributions, healthcare and life assurance benefits, a company profit share scheme and share options.

Board Committees

The Board maintains three standing committees, being the Audit, Remuneration and Nomination committees, all of which operate within written terms of reference. Until April 2009, while the Sagentia Group AG offer remained in place, there was also an Offer Committee which dealt with the acceptances of Sagentia Group AG shareholders, and the issue of Sagentia Group plc shares in exchange. The minutes of all sub-committees are circulated for review and consideration by the full complement of Directors, supplemented by oral reports from the Committee Chairmen at Board meetings.

·      Audit Committee

The Audit Committee is chaired by Lars Kylberg and comprises himself, Chris Masters and Staffan Ahlberg. The Audit Committee met four times during 2009. The Committee Chairman also took additional meetings with the auditors and Finance Director during the year.

The Audit Committee is responsible for reviewing a wide range of matters including the interim and annual financial statements before their submission to the board, as well as monitoring the controls, which are in force to ensure the integrity of the information reported to the shareholders. The Audit Committee contribute to the Board's review of the effectiveness of internal controls and risk management systems. They also advise the board on the appointment of external auditors, their remuneration both for audit and non-audit work, and discuss the nature, scope and results of the audit with external auditors. The Audit Committee review the cost effectiveness and the independence and objectivity of the auditors.

·      Remuneration Committee

The Remuneration Committee is chaired by Staffan Ahlberg and comprises Chris Masters and Lars Kylberg. The Remuneration Committee met twice during 2009. It may take advice from time to time from external advisors, but did not do so in 2009.

Its function is to monitor the Human Resources policies of Sagentia to ensure that they are consistent with Sagentia's business and culture. It is charged with executing the Board's policy on Executive Director and executive management remuneration and for reporting decisions made to the Board. The Committee both determines the individual remuneration package of Executive Directors and reviews remuneration levels for other senior employees of Sagentia. The Report of the Board on Remuneration on how Directors are remunerated can be found following this report. Details of individual Directors' remuneration packages are in Note 8 to the financial statements.

·      Nomination Committee

The Nomination Committee is chaired by Chris Masters and comprises Staffan Ahlberg and Lars Kylberg. The Nomination Committee met twice during 2009. It may take advice from time to time from external advisors, but did not do so in 2009.

The Committee meets when necessary. The Committee's primary function is to make recommendations to the Board on all new appointments and also to advise generally on issues relating to Board composition and balance. The Board seeks input from all Directors regarding nominations for Board positions. Nominations for executive Directors are submitted by the Chief Executive to the Nomination Committee. All board appointments have to be ratified at a General Meeting of the Company.

Meetings of the Board and Subcommittees during 2009 were as follows:

Board Meetings

16 Feb

17 Feb

6 Apr

28 Apr

28 Apr

23 Jun

25 Aug

17 Nov

14 Dec

15 Dec

21 Dec

23 Dec

Full Board

•

•

•

•

•

•

Sub-committee

- Audit

•

•

•

•

- Remuneration

•

•

- Offer / Allotment

•

•

•

- Nomination

•

•

Directors in attendance

- Chris Masters

•

•

•

•

•

•

•

•

•

- Lars Kylberg

•

•

•

•

•

•

•

•

•

- Staffan Ahlberg

x

•

•

•

•

•

x

•

•

By invitation:

- Brent Hudson

•

•

•

•

•

- Alistair Brown

•

•

- Daniel Flicos

•

•

•

•

•

- Guy McCarthy

•

•

•

•

•

•

•

•

•

•

•

•

• Attended the meeting.             X Did not attend the meeting.

Report of the Board on Remuneration

Remuneration Committee

The Remuneration Committee exists to provide a mechanism through which the Board can satisfy itself that Sagentia is adopting Human Resources policies that are consistent with Sagentia's business objectives and philosophy. Its written terms of reference require the Committee to recommend policy on Executive Directors' and other senior managers' remuneration to the Board and, in accordance with the provisions of the Combined Code, to determine the remuneration of each Executive Director, including pension rights and any compensation payments.

The Committee, which is chaired by Staffan Ahlberg, also comprises Lars Kylberg and Chris Masters. Both Chris Masters and Lars Kylberg are considered independent Non-Executive Directors. The Committee consults, as appropriate, with the Chief Executive of Sagentia and asks for assistance from the Human Resources Manager. It also takes advice from time to time from external advisers, but did not do so in 2009.

The Remuneration Committee recognise that incentivisation of staff is a key issue for Sagentia, which depends on the skill of its people for its success. The Remuneration Committee seek to incentivise performance that links individual to Sagentia results. During the year the Remuneration Committee has approved a grant of share options and confirmed the profit related bonus scheme for the Company.

Service contracts

All Directors are appointed for a period of three years. Executive directors' contracts contain a notice period of 6 months. Non-executive Directors' service contracts may be terminated on three months' notice. There are no additional financial provisions for termination

Option plans

The Company adopted an approved and unapproved Share Option Scheme in 2008. Options granted under these schemes are issued at market price. The Remuneration Committee approves any options granted thereunder. Executive Directors are entitled to participate in Sagentia's share option schemes. Non-Executive Directors do not participate in Sagentia's share option schemes. It is the policy of Sagentia to grant share options to Executive Directors and key employees as a means of encouraging ownership and providing incentives for performance.

The market price of the shares at 31 December 2009 was 18 pence (2008 - 17.0 pence). The highest and lowest price during the year was 19.5 pence and 14.5 pence respectively.

Remuneration policy:

- Executive Directors

The aim of the Board and the Remuneration Committee is to maintain a policy that:

establishes a remuneration structure that will attract, retain and motivate Executive Directors and senior managers of appropriate calibre

rewards Executive Directors according to both individual and Group performance

establishes an appropriate balance between fixed and variable elements of total remuneration, with the performance-related element forming a potentially significant proportion of the total remuneration package

aligns the interests of Executive Directors and senior managers with those of shareholders through the use of performance-related rewards and share options in Sagentia

ensures that Directors' and senior managers' remuneration packages are in line with Sagentia's remuneration policy

From time to time the Committee obtains market data and information as appropriate when making its comparisons and decisions and is sensitive to the wider perspective, including pay and employment conditions elsewhere in Sagentia, especially when determining salary increases.

The remuneration package comprises the following elements:

Basic salary - Basic salaries are normally reviewed annually and are set to reflect market conditions, personal performance and those paid for similar jobs in comparable companies.

Annual performance-related bonus - Executive Directors receive annual performance-related bonuses related to company performance.

Benefits - Executive Directors' benefits include medical and dental expenses, life assurance and pension contributions.

Full details of each Director's remuneration package and his interests in shares and share options can be found in Note 8 to the financial statements. There are no elements of remuneration, other than basic earnings, which are treated as being pensionable.

- Chairman and Non-Executive Directors

The remuneration arrangements of the Chairman and Non-Executive Directors are determined by the Board. Fees are paid to Non-Executive Directors. The basic fee for Non-Executive Directors is £15,000 per annum. The Chairman is paid a fee of £50,000 per annum. Benefits for Non-Executive Directors include reimbursement of travel and other incidental expenses for attendance at Board meetings and other Board committee meetings.

Report of the Audit Committee

Audit Committee

The Committee, which is chaired by Lars Kylberg, also comprises Chris Masters and Staffan Ahlberg. The Committee consults, as appropriate, with the Chief Executive and Finance Director. It may also take advice from time to time from external advisers, but did not do so in 2009. Provision is made by the Audit committee to meet the auditors at least twice a year.

The Audit Committee has written terms of reference and exists to provide a mechanism through which the Board can maintain the integrity of the financial statements of Sagentia and any formal announcements relating to Sagentia's financial performance; to review Sagentia's internal financial controls and Sagentia's internal control and risk management systems; and to make recommendations to the board in relation to the appointment of the external auditor for them to put to the shareholders for their approval in general meetings.

Internal controls

In applying the principle that the Board should maintain a sound system of internal control to safeguard shareholders' investment and Sagentia's assets, the Directors recognise that they have overall responsibility for ensuring that Sagentia maintains a system of internal control to provide them with reasonable assurance regarding effective and efficient operations, internal control and compliance with laws and regulations, and for reviewing the effectiveness of that system. However, there are inherent limitations in any system of internal control and accordingly even the most effective system can provide only reasonable and not absolute assurance against material mis-statement or loss, and that the system is designed to manage rather than eliminate the risk of failure to achieve the business objectives.

Sagentia has established procedures necessary to implement the guidance on internal control issued by the FRC Guidance on Audit Committees 2008. This includes identification, categorisation and prioritisation of critical risks within the business and allocation of responsibility to its Executive Directors and senior managers.

In previous years the Board has established a process for identifying, evaluating and managing the significant risks Sagentia faces.

The key features of the internal control system are described below:

Control environment. Sagentia is committed to high standards of business conduct and seeks to maintain these standards across all of its operations. There are also policies in place for the reporting and resolution of suspected fraudulent activities. There is a whistle-blowing policy incorporated within the Sagentia Handbook. Sagentia has an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve its objectives.

Risk identification. Management is responsible for the identification and evaluation of key risks applicable to their areas of business. These risks are assessed on a continual basis and may be associated with a variety of internal and external sources, including infringement of IP, sales channels, investment risk, staff retention, disruption in information systems, natural catastrophe and regulatory requirements.

Information systems. Group businesses participate in periodic strategic reviews, which include consideration of long-term financial projections and the evaluation of business alternatives. Annual budgets and rolling three-year plans are prepared. The Board actively monitors performance against plan. Forecasts and results are consolidated and presented to the Board on a regular basis. Through these mechanisms, performance is continually monitored, risks identified in a timely manner, their financial implications assessed, control procedures re-evaluated and corrective actions agreed and implemented.

Main control procedures. Sagentia has implemented control procedures designed to ensure complete and accurate accounting for financial transactions and to limit the exposure to loss of assets and fraud. Measures taken include segregation of duties and reviews by management.

Monitoring and corrective action. There are clear and consistent procedures in place for monitoring the system of internal financial controls.

This process, which operates in accordance with the FRC guidance, was maintained throughout the 2009 financial year, and has remained in place up to the date of the approval of these financial statements. The Board, via the Audit Committee, has formally reviewed the systems and processes in place in meetings with the Chief Executive, Finance Director, and Sagentia's Auditors during 2009. No internal audit function is operated outside of the systems and processes in place, as Sagentia is considered too small for a separate function. The Board considers the internal control system to be adequate for Sagentia. 

The auditors have only provided services in relation to the annual audit of the Group during 2009.

Approval

The report of the directors was approved by the Board on 17 February 2010 and signed on its behalf by:

By order of the Board	Harston Mill
Guy McCarthy	Harston
Company Secretary	Cambridge
	CB22 7GG

Independent Auditor's Report to the Members of Sagentia Group plc

We have audited the financial statements of Sagentia Group plc for the year ended 31 December 2009 which comprise the consolidated income statement, the consolidated and company statements of changes in equity, the consolidated and company statements of financial position, the consolidated and company statements of cash flow, and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page 8, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/UKNP.

Opinion on financial statements

In our opinion:

·      the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2009 and of the group's loss for the year then ended;

·      the group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;

·      the parent company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

·      the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the parent company financial statements are not in agreement with the accounting records and returns; or

·      certain disclosures of directors' remuneration specified by law are not made; or

·      we have not received all the information and explanations we require for our audit.

Alison Seekings

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Cambridge

17 February 2010

Consolidated Income Statement

For the year ended 31 December 2009

					Group
	Note				2009 £000	2008 £000
Continuing operations
Revenue	4				23,814	29,071
Operating expenses	4,5				(23,701)	(27,731)
Gross profit	4				113	1,340
Change in fair value on financial assets and other non-current asset movements	14				(3,122)	(1,982)
Redomiciliation					-	(589)
Share based payment charge*					(170)	(170)
Operating loss					(3,179)	(1,401)
Finance costs	6				(436)	(536)
Finance income	6				20	16
Other financial result	6				138	(289)
Loss on continuing operations before income tax					(3,457)	(2,210)
Income tax credit	9				556	123
Loss on continuing operations for the year					(2,901)	(2,087)
Other comprehensive income
Exchange differences on translating foreign operations					(22)	(421)
Total comprehensive income for the period					(2,923)	(2,508)
Loss on continuing operations for the year attributable to:
Equity holders of the parent					(2,945)	(1,746)
Minority interests					44	(341)
Loss on continuing operations for the year					(2,901)	(2,087)
Total comprehensive income for the period attributable to:
Equity holders of the parent					(2,934)	(2,196)
Minority interests					11	(312)
Total comprehensive income for the period					(2,923)	(2,508)
Earnings per share from total and continuing operations
Loss per share (basic and diluted)	11				(13.5)p	(9.7)p

* See Consolidated Statement of Changes in Equity.

Consolidated and Company Statement of Changes in Shareholders' Equity

For the year ended 31 December 2009

Group	Issued capital £000	Share premium £000	Merger reserve £000	Investment in own shares £000	Translation reserve £000	Share based payment reserve £000	Retained earnings £000	Total - Shareholders funds £000	Minority Interest £000	Total equity £000
Balance at 1 January 2008	216	-	22,202	(61)	(232)	429	(5,150)	17,404	133	17,537
Total comprehensive income for the year	-	-	-	-	(445)	-	(1,751)	(2,196)	(312)	(2,508)
New shares issued	50	-	-	(50)	-	-	-	-	-	-
Dividends paid to minorities	-	-	-	-	-	-	-	-	(34)	(34)
Shares in subsidiaries issued to minorities	-	-	-	-	-	-	-	-	276	276
Share options adjustment	-	-	-	-	-	170	-	170	-	170
Balance at 31 December 2008	266	-	22,202	(111)	(677)	599	(6,901)	15,378	63	15,441
Balance at 1 January 2009	266	-	22,202	(111)	(677)	599	(6,901)	15,378	63	15,441
Total comprehensive income for the year	-	-	-	-	11	-	(2,945)	(2,934)	11	(2,923)
Conversion of preference shares	(49)	49	-	-	-	-	-	-	-	-
Dividends paid to minorities	-	-	-	-	-	-	-	-	(20)	(20)
Shares purchased in minorities	-	-	-	-	-	-	-	-	(30)	(30)
Own shares sold	-	-	-	111	-	-	-	111	-	111
Share options adjustment	-	-	-	-	-	170	-	170	-	170
Balance at 31 December 2009	217	49	22,202	-	(666)	769	(9,846)	12,725	24	12,749

Company	Issued capital £000	Share premium £000	Merger reserve £000	Investment in own shares £000	Translation reserve £000	Share based payment reserve £000	Retained earnings £000	Total - Shareholders funds £000	Minority Interest £000	Total equity £000
Balance at 1 January 2008	-	-	-	-	-	-	-	-	-	-
Total comprehensive income for the year	-	-	-	-	-	-	(634)	(634)	-	(634)
New shares issued	266	-	10,343	-	-	-	-	10,609	-	10,609
Share options adjustment	-	-	-	-	-	3	-	3	-	3
Balance at 31 December 2008	266	-	10,343	-	-	3	(634)	9,978	-	9,978
Balance at 1 January 2009	266	-	10,343	-	-	3	(634)	9,978	-	9,978
Total comprehensive income for the year	-	-	-	-	-	-	416	416	-	416
Conversion of preference shares	(49)	49	-	-	-	-	-	-	-	-
Share options adjustment	-	-	-	-	-	21	-	21	-	21
Balance at 31 December 2009	217	49	10,343	-	-	24	(218)	10415	-	10,415

Sagentia Group plc was incorporated on 17 March 2008, and hence the company results show new shares issued in 2008.

The Group and company results have been restated to reflect the group reorganisation. See Note 2.

The accompanying Notes are an integral part of the consolidated and company statement of changes in shareholder equity.

The Merger reserve arose as a consequence of a group reconstruction that resulted in Sagentia Group plc acquiring Sagentia Group AG by way of a share for share exchange.

Consolidated and Company Statement of Financial Position

At 31 December 2009

		Company		Group
	Note	2009 £000	2008 £000	2009 £000	2008 £000
Assets
Non-current assets
Intangible assets	12	-	-	-	1
Property, plant and equipment	13	-	-	14,334	15,008
Investments	14	10,559	10,559	-	5,291
Deferred income tax assets	10	-	-	3,128	2,633
		10,559	10,559	17,462	22,933
Current assets
Trade and other receivables	15	2	6	4,000	6,768
Current tax asset		-	-	14	80
Cash and cash equivalents	16	1	-	4,234	5,341
		3	6	8,248	12,189
Non-current assets classified as held for sale	14	-	-	1,441	-
Total assets		10,562	10,565	27,151	35,122
Liabilities
Current liabilities
Trade and other payables	17	147	586	4,326	6,926
Current income tax liabilities	17	-	-	57	-
Borrowings	17	-	1	-	113
		147	587	4,383	7,039
Non-current liabilities
Borrowings	18	-	-	6,927	9,430
Other creditors	18	-	-	173	90
Financial instruments	18	-	-	351	489
Deferred income tax liabilities	10	-	-	2,568	2,633
		-	-	10,019	12,642
Total liabilities		147	587	14,402	19,681
Net assets / liabilities		10,415	9,978	12,749	15,441
Shareholders' equity
Share capital*	19	217	266	217	266
Share premium		49	-	49	-
Merger reserve*		10,343	10,343	22,202	22,202
Investment in own shares*		-	-	-	(111)
Translation reserves*		-	-	(666)	(677)
Share based payment reserve*		24	3	769	599
Retained earnings*		(218)	(634)	(9,846)	(6,901)
		10,415	9,978	12,725	15,378
Minority interest		-	-	24	63
Total equity		10,415	9,978	12,749	15,441

* See Consolidated Statement of Changes in Equity.

The financial statements were approved by the Board of Directors and signed on its behalf by

Chris Masters                                                  Chairman

Brent Hudson                                                   Chief Executive Officer

On 17 February 2010

The accompanying Notes are an integral part of the consolidated and company statement of financial position.

The company's registered number is 06536543

Consolidated and Company Statement of Cash Flows

At 31 December 2009

	Note	Company		Group
		2009 £000	2008 £000	2009 £000	2008 £000
Profit (loss) before income tax		622	(634)	(3,457)	(2,210)
Depreciation and amortisation charges		-	-	367	375
Change in fair value		-	-	3,122	2,047
Change in fair value of interest rate swap		-	-	(138)	289
Share based payment charge		21	3	170	170
(Increase) decrease in receivables		4	(6)	2,661	965
Increase (decrease) in payables		(645)	586	(1,736)	918
Cash generated from operations		2	(51)	989	2,554
UK corporation tax (paid) received (net)		-	-	87	76
Foreign corporation tax (paid) received (net)		-	-	42	-
Cash flows from operating activities		2	(51)	1,118	2,630
Purchase of property, plant and equipment		-	-	(245)	(764)
Purchase of subsidiary undertaking		-	-	(30)	-
Proceeds from sale of property, plant and equipment		-	-	254	-
Loan repayments received from third parties		-	-	-	19
Sale of current assets investments		-	-	34	-
Sale of subsidiary undertaking		-	-	-	10
Net cash disposed with subsidiary undertaking		-	-	(5)	-
Sale of financial assets at fair value through the profit and loss		-	-	447	206
Cash flows from investing activities		-	-	455	(529)
Issue of ordinary share capital		-	50	-	-
Issue of shares by subsidiary undertakings to minority interests		-	-	-	276
Dividends paid to minorities		-	-	(20)	(34)
Issue of loans by minority interests to subsidiary undertakings		-	-	-	502
Loans (repaid) drawn down		-	-	(2,613)	1,477
Cash flows from financing activities		-	50	(2,633)	2,221
Increase (decrease) in cash and cash equivalents in the year		2	(1)	(1,060)	4,322
Cash and cash equivalents at the beginning of the year		(1)	-	5,341	859
Exchange profit (loss) on cash		-	-	(47)	160
Cash and cash equivalents at the end of the year	17	1	(1)	4,234	5,341

Sagentia Group plc was incorporated on 17 March 2008, and hence the company results for 2008 comparatives are for the period 17 March 2008 to 31 December 2008.

 

END

 

 

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