Information  X 
Enter a valid email address

Oxeco PLC (OXE)

  Print      Mail a friend

Friday 26 March, 2010

Oxeco PLC

Final Results

RNS Number : 2034J
Oxeco PLC
26 March 2010
 



Oxeco plc (the "Company")

Audited Final Results for the year ended 31 January 2010

CHAIRMAN'S STATEMENT

 

Oxeco Plc ("the Company") is a holding and management company which was established with a stated strategy of seeking investments in or acquiring assets, businesses or companies in the technology and science sectors.  The Company currently has one subsidiary, Oxray Ltd ("Oxray"), which was acquired in June 2007 as a start up business which aimed to become a leading provider of molecular structure determination services to both industry and academic institutions. 

By early 2009, Oxray had substantially completed the development of its novel X-ray crystallography structure determination software but the results of marketing efforts to establish a solid customer base had been disappointing. Also, Oxray had not been able to strengthen and develop its product service offering through bolt-on acquisitions in this field as originally envisaged in June 2007.  The Directors therefore undertook a review of the Oxray business and concluded that this was not a market to which the Company intended to commit further significant resource.  

 

Subsequent efforts to secure a commercial exit from this business were not successful and a decision was taken to stop any further investment in Oxray with an emphasis on preserving the Group's cash. Oxray has now become a dormant subsidiary whilst retaining control of the underlying intellectual property and its results have been classified as discontinued operations.

 

The consolidated trading loss for the year from continuing operations was £0.12 million, increasing to a loss of £0.23 million after incorporating the discontinued activities of the Oxray business, compared to a loss in the previous year of £0.03 million before impairment of goodwill which increased to a loss of £2.15 million after the impairment, and £2.35 million after incorporating discontinued activities.  

 

Consolidated net assets at 31 January 2010 amounted to £2.30 million, including cash balances of £2.32 million compared with net assets of £2.52 million and cash balances of £2.53 million a year earlier at 31 January 2009. The cash outflow for the Group during the year to 31 January 2010 amounted to £0.22 million and cash balances continue to be managed prudently, with tight cost control.

 

Oxeco benefits from a solid balance sheet position whilst running a low cost base.  Your Directors are continuing to evaluate a range of new commercial and acquisition opportunities within the general science and technology sector and I am confident that we will be successful in exploiting an investment opportunity during the next six months.

 

Michael Bretherton

Executive Chairman

25 March 2010

 

 

The audited results for the year ended 31 January 2010 will be sent to the Company's shareholders shortly and are available on the Company's website - www.oxecoplc.com

 

Contact 

Michael Bretherton  

Oxeco plc

www.oxecoplc.com

 

+44 (0) 20 7099 7266

Ray Zimmerman/ John Depasquale/ Sarang Shah

ZAI Corporate Finance Ltd

 

+44 (0) 20 7060 2220

 

OXECO PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 January 2010

 

 

 

 

Notes

Year to
31 January
 2010

Restated
Year to
31 January
 2009

 

 

£000

£000

Continuing operations

 

 

 

Revenue

 

-

-

Administrative expenses

 

(131)

(162)

Impairment of goodwill

 

-

(2,120)

Operating loss

2

(131)

(2,282)

Finance income

3

9

127

Loss before taxation

 

(122)

(2,155)

Taxation

5

2

3

Loss for the year from continuing operations

 

(120)

(2,152)

Discontinued operations

 

 

 

Loss after tax from discontinued operations

16

(107)

(196)

Total comprehensive income for the year

 

(227)

(2,348)

Attributable to:

 

 

 

Owners of the parent

 

(227)

(2,348)

 

 

 

 

Loss per share:

 

 

 

Basic & diluted on continuing operations:

 

 

 

 - post impairment of goodwill

6

(0.02)p

(0.36)p

 - pre impairment of goodwill

6

(0.02)p

(0.01)p

Basic & diluted on total loss for the year

 

 

 

 - post impairment of goodwill

6

(0.04)p

(0.39)p

 - pre impairment of goodwill

6

(0.04)p

(0.04)p

 

OXECO PLC

STATEMENTS OF CHANGES IN EQUITY

For the year ended 31 January 2010

 

 

Attributable to the owners of the parent

 

Share Capital

Share Premium

Retained Deficit

Total Equity

The Group

£000

£000

£000

£000

At 31 January 2008

600

4,333

(63)

4,870

Total comprehensive income for the year

-

-

(2,348)

(2,348)

At 31 January 2009

600

4,333

(2,411)

2,522

Total comprehensive income for the year

-

-

(227)

(227)

At 31 January 2010

600

4,333

(2,638)

2,295

 

 

Attributable to the owners of the parent

 

Share Capital

Share Premium

Retained Earnings/

(Deficit)

Total Equity

The Company

£000

£000

£000

£000

At 31 January 2008

600

4,333

21

4,954

Total comprehensive income for the year

-

-

(2,432)

(2,432)

At 31 January 2009

600

4,333

(2,411)

2,522

Total comprehensive income for the year

-

-

(227)

(227)

At 31 January 2010

600

4,333

(2,638)

2,295

                                                           

 

OXECO PLC

STATEMENT OF FINANCIAL POSITION

As at 31 January 2010

 

 

Group

Group

Company

Company

 

 

2010

2009

2010

2009

 

Notes

£000

£000

£000

£000

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

7

-

2

-

-

Intangible assets - goodwill

8

-

-

-

-

Investment in subsidiary undertaking

9

-

-

-

-

 

 

-

2

-

-

Current assets

 

 

 

 

 

Trade and other receivables

10

11

28

11

21

Cash and cash equivalents

11

2,316

2,534

2,316

2,524

 

 

2,327

2,562

2,327

2,545

TOTAL ASSETS

 

2,327

2,564

2,327

2,545

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

12

(32)

(42)

(32)

(23)

Current taxation

5

-

-

-

-

TOTAL LIABILITIES

 

(32)

(42)

(32)

(23)

 

 

 

 

 

 

NET ASSETS

 

2,295

2,522

2,295

2,522

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Attributable to owners of the parent

 

 

 

 

 

Share capital

13

600

600

600

600

Share premium

14

4,333

4,333

4,333

4,333

Retained deficit

 

(2,638)

(2,411)

(2,638)

(2,411)

TOTAL EQUITY

 

2,295

2,522

2,295

2,522

 

Approved by the board of Directors and authorised for issue on 25 March 2010 and signed on its behalf by:

 

 

 

Michael Bretherton

Executive Chairman

 

Company number:          5969271

 

OXECO PLC

STATEMENT OF CASH FLOWS

For the year ended 31 January 2010

 

 

 

Group

Restated

Group

Company

Company

 

 

2010

2009

2010

2009

 

Notes

£000

£000

£000

£000

OPERATING ACTIVITIES

 

 

 

 

 

Operating loss from continuing operations

 

(131)

(2,282)

(238)

(2,562)

Loss before tax from discontinued operations

16

(107)

(196)

-

-

Depreciation of property, plant and equipment

 

2

1

-

-

Impairment of goodwill

8

-

2,120

-

-

Impairment of investment

9

-

-

-

2,100

Impairment of loan to subsidiary undertaking

 

-

-

107

300

Decrease/(increase) in trade and other receivables

 

17

1

(97)

(98)

(Decrease)/increase in trade and other payables

 

(10)

5

9

14

Tax received/(paid)

 

2

(2)

2

(2)

Net cash outflow from operations

 

(227)

(354)

(217)

(248)

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Interest received

 

9

127

9

126

Net cash inflow from investing activities

 

9

127

9

126

 

 

 

 

 

 

DECREASE IN CASH AND CASH EQUIVALENTS

 

(218)

(227)

(208)

(122)

Cash and cash equivalents at start of year

 

2,534

2,761

2,524

2,646

CASH AND CASH EQUIVALENTS AT 31 JANUARY 2010

11

2,316

2,534

2,316

2,524

 

OXECO PLC

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 January 2010

 

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards ("IFRS") and International Accounting Standards as issued by the International Accounting Standards Board ("IASB"), as well as interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") as adopted by the European Union.

New and Amended Standards Adopted By The Group

The Company has for the first time presented income and expenses in one statement, a statement of comprehensive income, which is separate from owner changes in equity, as required by IAS 1 (revised) 'Presentation of Financial Statements'.  Components of other comprehensive income, being items of income and expense not recognised in profit or loss as permitted by other IFRS, are also displayed in the statement of comprehensive income.

The directors have also adopted IFRS 8 'Operating Segments'.

On 1 February 2009, the Company early adopted the amendments to IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations (amendments)' which is effective for accounting periods commencing on or after 1 July 2009. 

 

The Directors do not believe that the adoption of these amendments has had a material impact on the financial information of the Company.

 

CONSOLIDATION

The consolidated financial statements incorporate those of Oxeco Plc and its subsidiary undertaking, Oxray Ltd.

Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than half of the voting rights. The existence and effects of potential voting rights are considered when assessing whether the Group controls the entity. Subsidiaries are fully consolidated from the date control passes.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.  The costs of an acquisition are measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.  Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at acquisition date irrespective of the extent of any non-controlling interest. The difference between the cost of acquisition of shares in subsidiaries and the fair value of the identifiable net assets acquired is capitalised as goodwill and reviewed annually for impairment.Any amount by which the cost of acquisition is below the fair value of identifiable net assets acquired (i.e. discount on acquisition) is recognised directly in the income statement.

All intra-group transactions, balances, and unrealised gains on transactions between Group companies are eliminated on consolidation. Subsidiaries' accounting policies are amended where necessary to ensure consistency with the policies adopted by the Group. The financial statements of all Group companies are made up to 31 January 2010.

As provided by section 408 of the Companies Act 2006, no statement of comprehensive income is presented for Oxeco Plc. The loss after tax for the year ended 31 January 2010 was £120,000 (2009: £32,000) before impairment of amounts due from the subsidiary and £227,000 (2009: £2,432,000) after impairment.

SEGMENTAL REPORTING

 

The reportable disclosures are identified by the chief operating decision maker by the way management has organised the firm. The firm operates out of one location and in one business.

 

The chief operating decision maker reviews the performance of the Company and Group based on total revenues and costs and not by any segmental reporting.

 

REVENUE

 

Revenue is measured at the fair value of the consideration received or receivable in the normal course of business, net of discounts, VAT and other sales related taxes and is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow in to the Group.

 

SOFTWARE DEVELOPMENT

 

All costs associated with the development of software are expensed to the income statement as incurred until such time that the following criteria are met:

 

·      it is technically feasible to complete the product;

·      management intends to complete the product and use or sell it;

·      there is an ability to use or sell the product;

·      it can be demonstrated how the product will generate probable future economic benefits;

·      adequate technical, financial and other resources are available to complete the development, use and sale of the product; and

·      expenditure attributable to the product can be reliably measured.

 

Once the criteria are met, development costs directly attributable to the product are recognised as intangible assets and amortised, once available for use or sale, over their useful economic life.

 

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at historical cost.

Depreciation is provided on all property, plant and equipment at rates calculated to write each asset down to its estimated residual value evenly over its expected useful life, as follows:

Fixtures and equipment:                                             over 3 years

INVESTMENTS

Investments in subsidiaries are stated in the statement of financial position of the parent company at cost less provision for any impairment. 

INTANGIBLE ASSETS - GOODWILL

 

Goodwill arising on consolidation of subsidiaries represents the excess of fair value of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities at the date of acquisition. 

 

Goodwill on acquisition of subsidiaries is included in intangible assets and allocated from acquisition date to each of the Group's cash-generating units ("CGU") that are expected to benefit from the business combination in which the goodwill arose. 

 

Goodwill is tested for impairment annually and whenever there is an indication that the asset may be impaired.

IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset, being the higher of its fair value less costs to sell and its value in use, is estimated in order to determine the extent of any impairment loss.

Discounted cash flow valuation techniques are generally applied for assessing value in use using 3-5 year forward-looking cash flow projections and terminal value estimates, together with discount rates appropriate to the risk of the related asset or cash generating unit to which the asset belongs.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

FINANCIAL ASSETS AND LIABILITIES

Trade and other receivables

Trade and other receivables do not carry any interest and are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest rate method, less any provision for impairment.

Impairment provisions are recognised when there is objective evidence that the Group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

 Trade and other payables

Trade and other payables are not interest bearing and are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than 3 months.

Share capital

Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from share premium.

PENSION COSTS

Contributions by the Group to personal pension schemes are charged to the income statement on a straight-line basis as they become due.

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax payable is based on taxable profit for the year. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.  Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax is measured on a non-discounted basis.

CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.  Actual results may differ from these estimates. 

The estimates and assumptions in relation to impairment reviews are considered to have the most significant effect on the carrying amount of the assets in the financial statements. The recoverable amount is determined using value in use calculations.  The use of this method requires the estimation of future cash flows and the selection of a suitable discount rate in order to calculate the present value of these cash flows.

ACCOUNTING STANDARDS AND INTERPRETATIONS NOT APPLIED

At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the operations of the Group, which have not yet been applied in these financial statements, were in issue but not yet effective:

 

 

Effective for periods commencing on or after

IFRS 3

Business Combinations (revision)

1 July 2009

IFRS 8

Operating Segments (amendments)

1 January 2010

IAS 7

Statement of Cash Flows (amendments)

1 January 2010

IAS 24

Related Parties Disclosures (revision)

1 January 2011

IAS 27

Consolidated and Separate Financial Statements (revision)

1 July 2009

IAS 32

Financial Instruments: Presentation (amendments)

1 February 2010

IAS 36

Impairment of Assets (amendments)

1 January 2010

IAS 38

Intangible Assets (amendments)

1 July 2009

IAS 39

Financial Instruments: Recognition and Measurement (amendments)

1 July 2009

 

The Directors do not anticipate that the adoption of these Standards and Interpretations will have a material impact on the financial statements of the Group.

RESTATEMENT OF COMPARATIVE INFORMATION                                                     

Comparative information has been re-stated to present the results of the discontinued operations as discontinued in the prior year - see note 16 for further details of the discontinued operations.

 2)  OPERATING LOSS                                                                                                                                              

                Continuing operations

Year to
31 January
 2010

Restated
Year to
31 January
 2009

 

£000

£000

Operating loss is stated after charging:

 

Regulatory costs

41

53

Staff costs (see note 4)

37

51

Auditor's remuneration:

 

Fees payable to the Company's auditor for the audit of the parent company and consolidated financial statements

18

16

Fees payable to the Company's auditor for the audit of the financial statements of the subsidiary

5

12

Total auditor's remuneration

23

28

 

3) FINANCE INCOME                                                                                                                                               

 

Year to
31 January
 2010

Year to
31 January
2009

 

£000

£000

Bank interest receivable

9

127

 

4)  STAFF COSTS

 

Year to
31 January
 2010

Year to
31 January
 2009

 

Number

Number

The average monthly number of persons (including Directors) employed by the Group during the year was:

 

Administration and management

6

7

 

 

 

 

Year ended
31 January
 2010

Restated
Year to
31 January
 2009

 

£000

£000

The aggregate remuneration comprised:

 

Continuing operations:

Wages and salaries

35

49

Social security costs

2

2

 

51

Discontinued operations:

Wages and salaries

64

81

Contributions to personal pension schemes

6

6

Social security costs

7

12

 

77

99

 

114

150

 

 

Director's remuneration included in the aggregate remuneration above comprised:

 

 

Emoluments for qualifying services

35

49

 

No pension contributions were made on behalf of the directors (2009: Nil).

 

5)  TAXATION                                                                                                                                                              

               

Year to
31 January
 2010

Restated
Year to
31 January
 2009

The Group

£000

£000

Current tax:

 

UK corporation tax on losses for the year

-

-

Prior period adjustment

(2)

(3)

 

(3)

Deferred tax:

 

 

Origination and reversal of timing differences

-

-

Tax on loss on ordinary activities

(2)

(3)

 

 

Factors affecting tax charge for the year

 

 

The tax assessed for the year varies from the standard rate of corporation tax as explained below:

 

 

Loss on ordinary activities before tax

(122)

(2,155)

Loss on ordinary activities multiplied by the standard rate of corporation tax 28% (2009: 28%)

(34)

(603)

Effects of:

 

 

Expenses not deductable for tax purposes

-

600

Prior period adjustment

(2)

(3)

Unutilised tax losses

34

3

Tax credit for the year

(2)

(3)

 

The Group has estimated losses of £150,000 available for carry forward against future trading profit (2009: £398,000).   The Group has not recognised deferred tax assets of £42,000 relating to these losses as their recoverability is uncertain (2009: £111,000).

6) LOSS PER SHARE

Basic

Year to
31 January
2010

Restated
Year to
31 January
2009

 

£'000

£'000

Loss for the year represented by:

 

 

Continuing operations pre impairment

(120)

(32)

Impairment

-

(2,120)

Discontinued operations

(107)

(196)

Total loss for the year

(227)

(2,348)

Weighted average number of ordinary shares

'000

'000

Weighted average number of ordinary shares used in calculating earnings per share

600,000

600,000

Earnings per share

 

 

Basic & diluted on continuing operations:

 

 

 - post impairment of goodwill

(0.02)p

(0.36)p

 - pre impairment of goodwill

(0.02)p

(0.01)p

Basic & diluted on the total loss for the year

 

 

 - post impairment of goodwill

(0.04)p

(0.39)p

 - pre impairment of goodwill

(0.04)p

(0.04)p

 

7) PROPERTY, PLANT AND EQUIPMENT

 

Fixtures and equipment

The Group

 

£000

Cost

 

 

At 31 January 2008

 

3

Additions

 

1

At 31 January 2009

 

4

Disposals

 

(4)

At  31 January 2010

 

-

 

 

 

Depreciation

 

 

At 31 January 2008

 

1

Charge for the year

 

1

At 31 January 2009

 

2

Charge for the year

 

2

Disposals

 

(4)

At 31 January 2010

 

-

 

 

 

Net book value

 

 

At 31 January 2010

 

-

At 31 January 2009

 

2

At 31 January 2008

 

2

 

8) INTANGIBLE ASSETS - GOODWILL

The Group

 

£000

Cost and net book value

 

 

At 31 January 2008

 

2,120

Impairment for the year to 31 January 2009

 

(2,120)

At 31 January 2009 and 31 January 2010

 

-

 

9)  INVESTMENT IN SUBSIDIARY

The Company

 

£000

Cost

 

 

At 31 January 2008 and 31 January 2009

 

2,100

Transfer of a 15 per cent. interest

 

(315)

At 31 January 2010

 

1,785

 

 

 

Impairment

 

 

At 31 January 2008

 

-

Impairment

 

(2,100)

At 31 January 2009

 

(2,100)

Reversal of element of impairment relating to disposal

 

315

At 31 January 2010

 

(1,785)

 

 

 

Carrying value

 

 

31 January 2010

 

-

31 January 2009

 

-

31 January 2008

 

2,100

The Company's investment in Oxray Limited was written down to nil in the year ended 31 January 2009 and subsequent efforts to secure a commercial exit from the Oxray business were not successful. The Directors therefore concluded that the most prudent course of action was to stop any further investment in Oxray with an emphasis on preserving cash.  The subsidiary has now become a dormant subsidiary whilst retaining control of the underlying intellectual property ("IP"). In addition, the Company has transferred an equity stake of 15 per cent. in this subsidiary at nil consideration to Oxray's former Commercial Manager as an incentive to help potentially realise some future value from the IP.

At 31 January 2010 the Company had an investment in the following dormant subsidiary where it holds 50 per cent. or more of the issued share capital.  Oxray Limited is incorporated in England and Wales.

 

 

 

Share of issued ordinary
share capital and voting rights

Undertaking

Sector

 

31 January 2010

31 January 2009

 

 

 

%

%

Oxray Ltd

Technology

 

85

100

 

All subsidiaries have been included in the consolidated financial statements.

10) TRADE AND OTHER RECEIVABLES

 

Group

Group

Company

Company

 

2010

2009

2010

2009

 

£000

£000

£000

£000

Trade and other receivables

2

6

2

4

Prepayments and accrued income

9

22

9

17

 

11

28

11

21

 

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

A maturity analysis has not been included as all of the receivables are current and none are past due or impaired.

11)   RISK MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES

 The Group's activities expose it to a variety of financial risks: market risk (primarily interest risk), credit risk and liquidity risk.  The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. 

The management of these risks is vested in the Board of Directors.  The policies for managing each of these risks are summarised below:

Management of market risk

The most significant area of market risk to which the Group and Company are exposed is interest risk.  However, as the Group has no borrowings, its risk is limited to the reduction of interest received on cash surpluses held. This risk is managed in accordance with the liquidity requirement of the Group, ensuring that surplus funds are held within fixed rate accounts to mitigate the risk. 

Interest rate risk sensitivity

The Group holds interest-bearing cash and cash equivalent balances held as set out below:

 

31 January 2010

31 January 2009

 

Fixed rate

Floating rate

Total

Fixed rate

Floating rate

Total

 

£000

£000

£000

£000

£000

£000

Cash and cash equivalents

532

1,784

2,316

1,524

1,010

2,534

 

The impact of a 10 per cent. increase/decrease in the average annual interest rates on the total cash and cash equivalents balances equates to £2,000 (31 January 2009: £1,000).

Management of credit risk

The Group's principal financial asset is cash and cash equivalents.  Credit risk associated with trade and other receivables is considered to be minimal as the majority are due from related parties with no history of defaulting and they are immaterial in size.   

The Group seeks to limit the level of credit risk on the cash balances by only depositing surplus liquid funds with counterparty banks, as shown below:

Credit risk sensitivity

 

2010

2009

The Group

£000

£000

Cash and cash equivalents

 

 

A

1,784

2,534

BBB*

532

-

 

2,316

2,534

*the relevant bank was downgraded from A to BBB in the year.

The maximum exposure to credit risk on the Group's financial assets is represented by their carrying amounts as outlined in the categorisation of financial instruments table below.

The Group does not consider that any changes in fair value of financial assets or liabilities in the year are attributable to credit risk.

No aged analysis of financial assets is presented as no significant financial assets are past due at the reporting date.

Management of liquidity risk 

The Group seeks to manage liquidity risk by regularly reviewing cash flow budgets and forecasts to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group deems there is sufficient liquidity for the foreseeable future.

The Group and the Company had cash and cash equivalents at 31 January 2010 of £2,316,000 (2009: £2,534,000) and £2,316,000 (2009: £2,524,000) respectively.  The disclosures above in respect of market risk, credit risk and liquidity risk apply to both the Group and the Company.

As at 31 January 2010 all financial assets and liabilities mature for payment within one year.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders. 

The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in notes 13 and 14 and in the Group Statement of Changes in Equity.

The Group manages its capital structure in light of changes in economic conditions.  To maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, buy back shares or issue new shares. 

The Group monitors capital by using the net asset per share ratio.  At 31 January 2010 the net asset per share was 0.38p compared to 0.42p at 31 January 2009.

No changes were made in the objectives, policies or processes during the years ended 31 January 2010 and 31 January 2009.

Categorisation of financial instruments

The Group

 

 

 

 

Loans and receivables

Financial liabilities at amortised cost

Total

Financial assets/(liabilities)

£000

£000

£000

At 31 January 2010

 

 

 

Trade and other receivables

2

-

2

Cash and cash equivalents

2,316

-

2,316

Trade and other payables

-

(31)

(31)

TOTAL

2,318

(31)

2,287

At 31 January 2009

 

 

 

Trade and other receivables

6

-

6

Cash and cash equivalents

2,534

-

2,534

Trade and other payables

-

(38)

(38)

TOTAL

2,540

(38)

2,502

 

The Company

 

 

 

 

Loans and receivables

Financial liabilities at amortised cost

Total

Financial assets/(liabilities)

£000

£000

£000

At 31 January 2010

 

 

 

Trade and other receivables

2

-

2

Cash and cash equivalents

2,316

-

2,316

Trade and other payables

-

(31)

(31)

TOTAL

2,318

(31)

2,287

At 31 January 2009

 

 

 

Trade and other receivables

4

-

4

Cash and cash equivalents

2,524

-

2,524

Trade and other payables

-

(22)

(22)

TOTAL

2,528

(22)

2,506

 

12) TRADE AND OTHER PAYABLES

 

Group

Group

Company

Company

 

2010

2009

2010

2009

 

£000

£000

£000

£000

Trade payables

4

12

4

8

Other taxes and social security

1

4

1

1

Accruals

27

26

27

14

 

32

42

32

23

 

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

13) SHARE CAPITAL

The Group and the Company                                                                                                                              

 

Number

£000

Authorised ordinary shares of 0.1p

 

 

At 31 January 2008, 31 January 2009 and 31 January 2010

1,000,000,000

1,000

Allotted, issued and fully paid ordinary shares of 0.1p

 

 

At 31 January 2008, 31 January 2009 and 31 January 2010

600,000,000

600

 

14) SHARE PREMIUM ACCOUNT

The Group and the Company

 

 

£000

At 31 January 2008, 31 January 2009 and 31 January 2010

 

4,333

 

15) COMMITMENTS UNDER OPERATING LEASES

At 31 January 2010, the Group and Company had no commitments under non-cancellable leases.

16) DISCONTINUED OPERATIONS

In June 2007 the Company acquired 100 per cent. of the issued share capital in Oxray Limited, a start up business that aimed to became a leading provider of molecular structure determination services.  By early 2009, Oxray had substantially completed the development of its novel X-ray crystallography structure determination software but the results of marketing efforts to establish a solid customer base had been disappointing. Also, Oxray had not been able to strengthen and develop its product service offering through bolt-on acquisitions in this field as originally envisaged in June 2007.  

The Company's investment in Oxray was written down to nil in the financial statements for the year ended 31 January 2009 as announced on 20 April 2009.  Subsequent efforts to secure a commercial exit from the Oxray business were not successful and the Directors therefore concluded in July 2009 that the most prudent course of action in the current economic climate was to stop any further investment in Oxray with an emphasis on preserving the Group's cash. Oxray has now become a dormant subsidiary whilst retaining control of the underlying intellectual property ("IP"). In addition, the Company has transferred an equity stake of 15 per cent. in this subsidiary at nil consideration to Oxray's former Commercial Manager as an incentive to help potentially realise some future value from the IP.

The results of Oxray for the period from 1 February 2009 which have been classified within discontinued operations in the consolidated financial statements are as follows:

 

Year to

31 January

2010

Year to

31 January

2009

 

£000

£000

Revenue

12

18

Operating costs

(119)

(214)

Operating loss

(107)

(196)

Finance income

-

-

Loss before and after tax

(107)

(196)

Attributable to:

 

 

Equity holders of parent

(107)

(196)

 

Operating loss is stated after charging:

 

Year to

31 January

2010

Year to

31 January

2009

 

£000

£000

Depreciation of property, plant and equipment

2

1

Operating lease rentals

6

5

Software development and research costs

34

74

Foreign exchange losses

-

1

Staff costs (see note 4)

77

99

 

Auditor's remuneration for the discontinued operations was borne by the parent company.

Cashflows from discontinued operations

 

Year to

31 January

2010

Year to

31 January

2009

 

£000

£000

Operating cashflows

(117)

(206)

Investing cashflows

-

1

Financing cashflows

107

100

Total cashflows

(10)

(105)

 

17)  RELATED PARTY TRANSACTIONS

Trading transactions

During the year the Company entered into the following transactions with Ora Capital Limited, which is a fellow subsidiary of Ora (Guernsey) Limited which as at 31 January 2010 holds 45.25 per cent. of the Company's issued share capital:

 

Group

Group

Company

Company

 

2010

2009

2010

2009

 

£000

£000

£000

£000

Consultancy fees charged by Ora Capital Limited in the year

12

12

12

12

 

The outstanding balance owed to Ora Capital Limited at the balance sheet date was £1,000 (2009: £1,000).

During the year, Oxray Limited borrowed £107,000 from the Company for working capital purposes (2009: £100,000).  The loan is unsecured and non-interest bearing and it is repayable on demand.  The outstanding balance at 31 January 2010 was £407,000 (2009: £300,000), which was fully provided against, resulting in a charge to the Company's income statement of £107,000 (2009: £300,000)

Transactions with Key Management Personnel

The Group's key management personnel comprised only the Directors of the Company.

During the year Group companies entered into the following transactions in which the Directors had an interest:

i.     Directors' remuneration.

The remuneration of the individual Directors are shown below

 

2010

2009

Short-term employment benefits

Salaries & fees

Employer's national insurance

Total

Total

 

£000

£000

£000

£000

Michael Bretherton  

10

1

11

11

Professor William Graham Richards CBE

10

1

11

11

Gordon Hall (appointed 2 June 2009)

7

1

8

-

Jussi Westergren (resigned 18 March 2009)*

1

-

1

10

Professor Stephen Davies (resigned 23 July 2009)

8

1

9

11

David Norwood (resigned 31 December 2008)

-

-

-

10

*fees of were paid to Pembroke House Technologies Ltd in the year on behalf of Jussi Westergren

ii.    Directors had interests in Ora Capital Partners Limited, which holds 45.25 per cent. of the Company's share capital (directly held by Ora (Guernsey) limited which is a 100 per cent. owned subsidiary of Ora Capital Partners Limited), as follows as at 31 January 2010:

 

Director

% of issued share capital of Ora held

Michael Bretherton  

0.06 %

 

Michael Bretherton is a Director of Ora Capital Partners Limited.

17) ULTIMATE CONTROLLING PARTY

The Directors do not believe that there is an ultimate controlling party.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR KKPDQQBKDNNB

a d v e r t i s e m e n t