TIDMENF
RNS Number : 2390Q
Enfis Group PLC
07 April 2009
Enfis Group plc
("Enfis" or the "Company")
Final results
The Board of Enfis Group plc is pleased to announce final results for the year
ended 31 December 2008.
Contacts
Enfis Group plc+44(0) 1729 485 660
Giles Davies
Noble & Company Limited +44(0) 20 7763 2200
John Llewellyn-Lloyd
James Nelson
Chief Executive Officer's Statement
2008 has seen Enfis emerge as a significant participant in the solid state
lighting markets. Having built a strong distribution network in 2007, with 20
distributors covering the major markets of the EU and North America, Enfis
switched its focus onto direct sales into the lighting manufacturers and
integrators that service lighting manufacturers. As a result, we have
successfully engaged with 207 customers in 2008 and experienced a significant
increase in revenue. It was particularly pleasing to note the performance of
our manufacturing capabilities in the face of this increased demand,
particularly for both the UNO and UNO Plus products. Our manufacturing yields
achieved our target of 95% and our return rate was well ahead of target at only
0.03%. This is further evidence of the scalability of our business, with the
ability to increase output whilst maintaining the excellent quality standards of
our product in the market.
Enfis secured relationships with many major lighting companies in all
territories in which we operate, and we expect to see many of the developed
product lines with those customers become volume sales in 2009.
We have largely completed our portfolio of products with the addition of the
Quattro Mini light engine and also a range of optics and drivers for the UNO and
UNO Plus range of light engines. We also have developed a number of unique
products at the tail end of 2008 that will allow Enfis to further exploit our IP
in 2009 and 2010. The products will be announced in 2009 and will include lower
cost versions of our platform, and versions with both higher output and higher
light quality.
Enfis expects to continue the healthy increase in sales in 2009 based upon
relationships and products developed during 2008 and with revenue contributions
coming from our North American operation headed by Dan Polito.
Outlook
The Board is pleased with the progress made by the Company and recognises the
significant advances that we have made in terms of revenue growth in 2008 and
the increased sales pipeline for 2009 and beyond. We have also bolstered the
management team with the addition of a Vice President of Sales and Marketing for
North America and look forward to the potential growth from that market.
Legislation continues to push for the phasing out of incandescent lighting
technology in favour of more efficient lighting. The legislative drives are now
beginning to directly affect the markets in North America as well as the EU. The
end consumers of lighting products are now becoming much more aware of the
opportunities that solid state lighting can bring, and understand the well
documented quality and environmental disadvantages that CFL lamps cause.
The Company has also announced its intention to raise approximately GBP2 million
before expenses by means of a placing of 5,600,000 shares at 36p per share. A
circular has been posted to shareholders, which includes a Notice of General
Meeting to be held on 6 April 2009. These funds will be used to provide
additional working capital to allow the Company to address any upside in current
revenue forecasts that may occur, and to invest in additional funding in the
North American operation, to provide technical assistance to the sales office,
which is intended to help accelerate revenue growth.
Even given the current economic climate the long term prospects for Enfis are
extremely positive and the Board remains confident of long term growth.
Shaun Oxenham
Chief Executive Officer
Chief Financial Officers Review
The year to 31 December 2008 has been another successful one for Enfis with key
metrics achieved in line with market expectations. As expected, the Company is
currently expending cash and will continue to do so until a revenue stream is
secured which is sufficient to put the business on a stable financial footing.
The Board closely manages the Company's cash expenditure and will continue to do
so up to and beyond the point that Enfis reaches profitability.
The Company has low levels of both financial and operational gearing, and
therefore margin increases achieved will be strongly reflected in the cash
balance.
Revenue and margin
Both revenue and margin in 2008 have grown strongly with revenue increasing by
430% on the previous year. Gross margin has strengthened with two product lines
now passing through volume production. Management believe that higher production
volumes will result in further production efficiencies and a gross margin of
circa 50%.
Administrative Expenses
In light of the wider economic downturn, management actively reduced the cost
base during Q4 2008 to ensure the business is well placed going into 2009.
Cost reductions were made partly in response to the general economic climate and
also in recognition that development of the initial product base is now largely
complete, thereby requiring less of a cost base to support the Company going
forward.
Balance sheet
Intangible assets relate to patents and development costs which have been
capitalised where the specific conditions of IAS 38 have been met. No additional
borrowings have been entered into during the period.
There is minimal debt on the balance sheet. This includes a historic bank loan
of GBP88,375 and a finance lease which will be paid off before the end of 2009.
Cash flow
The cash balance at the year end was GBP640,944, slightly ahead of expectations.
The cash profile is expected to change in the coming year with less cash being
spent on development and more being tied up in working capital required to
service the expected increase in revenues.
Sources of cash during the year were an injection of equity in February 2008,
interest from treasury investment, grant income and the securing of a
significant research and development tax credit.
Giles Davies
Chief Financial Officer
Directors' Report
for the year ended 31 December 2008
The directors present the annual report and audited financial statements for the
year ended 31 December 2008.
Business review
The principal activity of the Group is the design, development and manufacture
of intelligent high power Light Emitting Diode ("LED") arrays and light engines.
The Consolidated Income Statement is set out on page 10.
A review of the group's trading during the year, its position at year-end and
its prospects for the future, is set out in the Chief Executive Officer's
Statement.
Key performance indicators (KPI's)
Given the straightforward nature and relative size of the business, the
Company's directors are of the opinion that analysis using KPI's is not
necessary for an understanding of the development, performance or position of
the business. The key metrics monitored by the directors include revenue and
cash.
Dividends
No dividend is proposed in respect of the year (2007: GBPnil).
Research and development
Enfis Group plc continues to invest heavily in research and development
associated with the design, development and manufacture of intelligent high
power light emitting diode arrays and smart light engines. Costs attributed to
this process have been charged to the income statement to the extent that they
do not meet all the criteria for capitalisation as set out in IAS 38 'Intangible
Assets'.
Directors
The directors of the Group, who served during the year are listed below:
+----------------------+-----------------------------------------------------------+
| Directors | Function |
+----------------------+-----------------------------------------------------------+
| | |
+----------------------+-----------------------------------------------------------+
| Simon Gibson | Non executive Chairman |
+----------------------+-----------------------------------------------------------+
| Shaun Oxenham | Chief Executive Officer |
+----------------------+-----------------------------------------------------------+
| Giles Davies | Chief Financial Officer |
+----------------------+-----------------------------------------------------------+
| Gareth Jones | Chief Technical Officer |
+----------------------+-----------------------------------------------------------+
| Drew Nelson | Non Executive Director |
+----------------------+-----------------------------------------------------------+
| Ron Jones | Non Executive Director, Chair of remuneration committee |
+----------------------+-----------------------------------------------------------+
| John Thynne | Non Executive Director, Chair of audit committee |
+----------------------+-----------------------------------------------------------+
Details of directors interests in share options over the Group's share capital
are set out in note 22.
Directors' Report
for the year ended 31 December 2008 (continued)
Employees
The Group's employment policies are designed to attract, retain and motivate the
very best staff for each role in the Group, recognising that this can only be
achieved through equal opportunities regardless of gender, race, religion or
disability.
Regular meetings are held with employees to discuss the performance of the Group
as a whole and the area in which they work. Financial and economic factors are
dealt with in this context.
Information concerning employees and their remuneration is given in note 19 to
the accounts.
Substantial interests
As at 31 December 2008, the Group had been notified, in accordance with Sections
198 to 209 of the Companies Act 1985, of the following substantial interests of
3% or more in the ordinary share capital of the company:
+---------------------------+---------------------------+
| | % of ordinary |
+---------------------------+---------------------------+
| | shares held |
+---------------------------+---------------------------+
| Wesley Clover | 18.66 |
+---------------------------+---------------------------+
| Framlington | 13.44 |
+---------------------------+---------------------------+
| Ken Board | 10.15 |
+---------------------------+---------------------------+
| Drew Nelson | 8.63 |
+---------------------------+---------------------------+
| UWS Ventures | 6.39 |
+---------------------------+---------------------------+
| Rathbones | 4.37 |
+---------------------------+---------------------------+
| Robur | 6.23 |
+---------------------------+---------------------------+
| Invesco | 3.72 |
+---------------------------+---------------------------+
Financial risk management
The directors' assessment of key financial risks and policies in place to
mitigate those risks are set out in note 3 to the financial statements.
Donations
No donations were made during the year (2007: GBPnil).
Events after the balance sheet date
An Extraordinary General Meeting held on 6 April 2009, approved the issue of
5,600,000 GBP0.10 Ordinary shares, for a consideration of GBP0.36 per share,
generating gross proceeds GBP2,016,000. The shares will formally be issued on 7
April 2009.
Policy and Practice on Payment of Creditors
The Group and Company aims to settle supplier accounts in accordance with
individual suppliers' terms of business. The Group and Company's average number
of days' purchases outstanding in respect of trade creditors at 31 December 2008
was 64 days (2007: 33 days).
Directors' Report
for the year ended 31 December 2008 (continued)
Going concern
The directors have concluded, having regard to the most recent projections
available that the
group and company will have in place sufficient funding to enable it to continue
trading and meet
its liabilities to third parties as they fall due for the foreseeable future.
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 prepared the group and parent
company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The financial
statements are required by law to give a true and fair view of the state of
affairs of the company and the group and of the profit or loss of the group for
that period.
In preparing those financial statements the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state that the financial statements comply with IFRSs as adopted by the European
Union;
* prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the company will continue in business, in which
case there should be supporting assumptions and qualifications as necessary.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and group and to enable them to ensure that the financial statements
comply with the Companies Act 1985. They are also responsible for safeguarding
the assets of the company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the group web
site, www.enfis.com. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
Each of the directors, whose names and functions are listed in the Directors
Report confirm that, to the best of their knowledge:
* The group financial statements, which have been prepared in accordance with
IFRSs as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and loss of the group; and
* The Directors' Report, Chief Executive Officer's Statement and Chief Financial
Officer's Statement contained in the Annual Report includes a fair review of the
development and performance of the business and the position of the group,
together with a description of the principal risks and uncertainties that it
faces.
Directors' Report
for the year ended 31 December 2008 (continued)
Disclosure of Information to Auditors
The directors who held office at the date of approval of this Directors' report
confirm that, so far as they are aware, there is no relevant audit information
of which the Company's auditor is unaware; and each Director has taken all steps
that he ought to have taken as a Director to make himself aware of any relevant
audit information and to establish that the Company's auditor is aware of that
information.
Auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to
continue in office and a resolution concerning their reappointment will be
proposed at the Annual General Meeting.
Approved by the Board of Directors
and signed on behalf of the Board
Giles Davies
Company Secretary
Independent auditors' report to the members of Enfis Group plc
We have audited the group and parent company financial statements (the
"financial statements") of Enfis Group plc for the year ended 31 December 2008
which comprise the Consolidated Income Statement, the Consolidated and Parent
Company Balance Sheets, the Consolidated and Parent Company Cash Flow
Statements, the Consolidated and Parent Company Statement of Changes in Equity
and the related notes. These financial statements have been prepared under the
accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the
financial statements in accordance with applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union are set
out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland). This report, including the opinion, has been prepared
for and only for the company's members as a body in accordance with Section 235
of the Companies Act 1985 and for no other purpose. We do not, in giving this
opinion, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true
and fair view and have been properly prepared in accordance with the Companies
Act 1985. We also report to you whether in our opinion the information given in
the Directors' Report is consistent with the financial statements. The
information given in the Directors' Report includes that specific information
presented in the Chief Executive Officer's Statement that is cross referred from
the Business Review section of the Directors' Report.
In addition we report to you if, in our opinion, the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. The other information
comprises only the Directors' Report, the Chief Executive's Statement and the
Chief Financial Officer's Statement. We consider the implications for our report
if we become aware of any apparent misstatements or material inconsistencies
with the financial statements. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the group's and company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Independent auditors' report to the members of Enfis Group plc
Opinion
In our opinion:
* the group financial statements give a true and fair view, in accordance with
IFRSs as adopted by the European Union, of the state of the group's affairs as
at 31 December 2008 and of the group's loss and cash flows for the year then
ended;
* the parent company financial statements give a true and fair view, in accordance
with IFRSs as adopted by the European Union as applied in accordance with the
provisions of the Companies Act 1985, of the state of the parent company's
affairs as at 31 December 2008 and cash flows for the year then ended;
* the financial statements have been properly prepared in accordance with the
Companies Act 1985; and
* the information given in the Directors' Report is consistent with the financial
statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Cardiff
Consolidated income statement - by function of expense
for the year ended 31 December 2008
+----------------------------------+----------+----------------+----------------+
| | Notes | 2008 | 2007 |
| | | GBP | GBP |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Revenue | 5 | 1,628,002 | 307,013 |
+----------------------------------+----------+----------------+----------------+
| Cost of sales | | (1,023,458) | (268,906) |
+----------------------------------+----------+----------------+----------------+
| Gross profit | | 604,544 | 38,107 |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Administrative expenses | | (2,608,107) | (2,308,737) |
+----------------------------------+----------+----------------+----------------+
| Other income | | 72,717 | 140,235 |
+----------------------------------+----------+----------------+----------------+
| Operating loss | | (1,930,846) | (2,130,395) |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Finance income | 20 | 54,434 | 124,215 |
+----------------------------------+----------+----------------+----------------+
| Finance costs | 21 | (21,332) | (40,685) |
+----------------------------------+----------+----------------+----------------+
| | | 33,102 | 83,530 |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Loss before income tax | | (1,897,744) | (2,046,865) |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Income tax credit | 23 | 555,789 | 181,812 |
+----------------------------------+----------+----------------+----------------+
| Loss for the year | | (1,341,955) | (1,865,053) |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Attributable to: | | | |
+----------------------------------+----------+----------------+----------------+
| Equity holders of the company | | (1,341,955) | (1,865,053) |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
| Loss per share for loss | | | |
| attributable to the equity | | | |
| holders of the company during | | | |
| the year | | | |
+----------------------------------+----------+----------------+----------------+
| - basic and diluted | | (14.4p) | (22.7p) |
+----------------------------------+----------+----------------+----------------+
| | | | |
+----------------------------------+----------+----------------+----------------+
The results relate to continuing operations.
The company has elected to take the exemption under section 230 of the Companies
Act 1985 to not present the parent company income statement.
The loss for the parent company for the year was GBP82,332 (2007: GBP61,749).
The notes on pages 16 to 44 are an integral part of these consolidated financial
statements.
Consolidated balance sheet
As at 31 December 2008
+-----------------------------------------+----------+-------------+-------------+
| | Notes | 2008 | 2007 |
| | | GBP | GBP |
+-----------------------------------------+----------+-------------+-------------+
| Assets | | | |
+-----------------------------------------+----------+-------------+-------------+
| Non current assets | | | |
+-----------------------------------------+----------+-------------+-------------+
| Property, plant and equipment | 7 | 217,575 | 235,351 |
+-----------------------------------------+----------+-------------+-------------+
| Intangible assets | 8 | 540,447 | 399,934 |
+-----------------------------------------+----------+-------------+-------------+
| | | 758,022 | 635,285 |
+-----------------------------------------+----------+-------------+-------------+
| Current assets | | | |
+-----------------------------------------+----------+-------------+-------------+
| Inventories | 9 | 351,108 | 277,876 |
+-----------------------------------------+----------+-------------+-------------+
| Trade and other receivables | 10 | 218,373 | 211,862 |
+-----------------------------------------+----------+-------------+-------------+
| Corporation tax receivable | | 271,392 | - |
+-----------------------------------------+----------+-------------+-------------+
| Cash and cash equivalents | 11 | 640,944 | 1,999,424 |
+-----------------------------------------+----------+-------------+-------------+
| | | 1,481,810 | 2,489,162 |
+-----------------------------------------+----------+-------------+-------------+
| Total assets | | 2,239,839 | 3,124,447 |
+-----------------------------------------+----------+-------------+-------------+
| | | | |
+-----------------------------------------+----------+-------------+-------------+
| Equity | | | |
+-----------------------------------------+----------+-------------+-------------+
| Capital and reserves attributable to | | | |
| equity holders of the Company | | | |
+-----------------------------------------+----------+-------------+-------------+
| Ordinary shares | 12 | 938,286 | 893,606 |
+-----------------------------------------+----------+-------------+-------------+
| Share premium | 12 | 4,067,413 | 3,585,446 |
+-----------------------------------------+----------+-------------+-------------+
| Share option reserve | | 144,081 | 61,749 |
+-----------------------------------------+----------+-------------+-------------+
| Reverse acquisition reserve | | 2,283,667 | 2,283,667 |
+-----------------------------------------+----------+-------------+-------------+
| Retained losses | | (5,767,313) | (4,425,358) |
+-----------------------------------------+----------+-------------+-------------+
| Total equity | | 1,666,126 | 2,399,110 |
+-----------------------------------------+----------+-------------+-------------+
| | | | |
+-----------------------------------------+----------+-------------+-------------+
| Liabilities | | | |
+-----------------------------------------+----------+-------------+-------------+
| Non-current liabilities | | | |
+-----------------------------------------+----------+-------------+-------------+
| Deferred income | 14 | 35,000 | 65,748 |
+-----------------------------------------+----------+-------------+-------------+
| Borrowings | 15 | 58,075 | 106,105 |
+-----------------------------------------+----------+-------------+-------------+
| | | 93,075 | 171,853 |
+-----------------------------------------+----------+-------------+-------------+
| Current liabilities | | | |
+-----------------------------------------+----------+-------------+-------------+
| Trade and other payables | 13 | 432,600 | 495,046 |
+-----------------------------------------+----------+-------------+-------------+
| Borrowings | 15 | 48,030 | 58,438 |
+-----------------------------------------+----------+-------------+-------------+
| | | 480,630 | 553,484 |
+-----------------------------------------+----------+-------------+-------------+
| Total liabilities | | 573,705 | 725,337 |
+-----------------------------------------+----------+-------------+-------------+
| | | | |
+-----------------------------------------+----------+-------------+-------------+
| Total equity and liabilities | | 2,239,839 | 3,124,447 |
+-----------------------------------------+----------+-------------+-------------+
The notes on pages 16 to 44 are an integral part of these consolidated financial
statements.
The financial statements were approved and authorised for issue by the board and
were signed on its behalf on 6 April 2009.
Director
Parent company balance sheet
As at 31 December 2008
+-----------------------------------------+----------+------------+------------+
| | Notes | 2008 | 2007 |
| | | GBP | GBP |
+-----------------------------------------+----------+------------+------------+
| Assets | | | |
+-----------------------------------------+----------+------------+------------+
| Non current assets | | | |
+-----------------------------------------+----------+------------+------------+
| Investments | 6 | 572,175 | 572,175 |
+-----------------------------------------+----------+------------+------------+
| Trade and other receivables | 10 | 4,433,522 | 3,906,875 |
+-----------------------------------------+----------+------------+------------+
| | | 5,005,697 | 4,479,050 |
+-----------------------------------------+----------+------------+------------+
| Current assets | | | |
+-----------------------------------------+----------+------------+------------+
| Cash and cash equivalents | 11 | 2 | 2 |
+-----------------------------------------+----------+------------+------------+
| | | 2 | 2 |
+-----------------------------------------+----------+------------+------------+
| Total assets | | 5,005,699 | 4,479,052 |
+-----------------------------------------+----------+------------+------------+
| | | | |
+-----------------------------------------+----------+------------+------------+
| Equity | | | |
+-----------------------------------------+----------+------------+------------+
| Capital and reserves attributable to | | | |
| equity holders of the Company | | | |
+-----------------------------------------+----------+------------+------------+
| Ordinary shares | 12 | 938,286 | 893,606 |
+-----------------------------------------+----------+------------+------------+
| Share premium | | 4,067,413 | 3,585,446 |
+-----------------------------------------+----------+------------+------------+
| Share option reserve | | 144,081 | 61,749 |
+-----------------------------------------+----------+------------+------------+
| Retained losses | | (144,081) | (61,749) |
+-----------------------------------------+----------+------------+------------+
| Total equity | | 5,005,699 | 4,479,052 |
+-----------------------------------------+----------+------------+------------+
| | | | |
+-----------------------------------------+----------+------------+------------+
| Liabilities | | | |
+-----------------------------------------+----------+------------+------------+
| Non-current liabilities | | | |
+-----------------------------------------+----------+------------+------------+
| Deferred income | 14 | - | - |
+-----------------------------------------+----------+------------+------------+
| Borrowings | 15 | - | - |
+-----------------------------------------+----------+------------+------------+
| | | - | - |
+-----------------------------------------+----------+------------+------------+
| Current liabilities | | | |
+-----------------------------------------+----------+------------+------------+
| Trade and other payables | 13 | - | - |
+-----------------------------------------+----------+------------+------------+
| Borrowings | 15 | - | - |
+-----------------------------------------+----------+------------+------------+
| | | - | - |
+-----------------------------------------+----------+------------+------------+
| Total liabilities | | - | - |
+-----------------------------------------+----------+------------+------------+
| | | | |
+-----------------------------------------+----------+------------+------------+
| Total equity and liabilities | | 5,005,699 | 4,479,052 |
+-----------------------------------------+----------+------------+------------+
The notes on pages 16 to 44 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the board and
were signed on its behalf on 6 April 2009.
Director
Consolidated and parent company cash flow statements
for the year ended 31 December 2008
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| |Notes | Group | Group | Company | Company |
| | | 2008 | 2007 | 2008 | 2007 |
| | | GBP | GBP | GBP | GBP |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash used in operations | 26 | (1,811,691) | (2,236,731) | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Interest paid | | (21,332) | (40,685) | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Tax received | | 284,419 | 182,787 | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Net cash used in operating | | (1,548,604) | (2,094,629) | - | - |
| activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Purchase of property, plant | | (58,702) | (103,567) | - | - |
| and equipment | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Purchase of intangible assets | | (315,787) | (380,657) | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Receipt of government grants | | 41,969 | 154,604 | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Loans granted to subsidiary | | - | - | (526,647) | (3,906,875) |
| undertakings | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Interest received | | 54,434 | 124,215 | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Net cash used in investing | | (278,086) | (205,405) | (526,647) | (3,906,875) |
| activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Proceeds from the issuance of | | 526,648 | 4,143,890 | 526,647 | 3,906,877 |
| ordinary shares | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Repayments of borrowings | | (30,300) | (30,300) | - | - |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Finance lease principal | | (28,138) | (32,914) | - | - |
| repayments | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Net cash generated from | | 468,210 | 4,080,676 | 526,647 | 3,906,877 |
| financial activities | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Net (decrease) / increase in | | (1,358,480) | 1,780,642 | - | 2 |
| cash and cash equivalents | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash and cash equivalents at | | 1,999,424 | 218,782 | 2 | - |
| the beginning of the year | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
| Cash and cash equivalents at | | 640,944 | 1,999,424 | 2 | 2 |
| the end of the year | | | | | |
+-------------------------------+-------+-------------+-------------+-----------+-------------+
The notes on pages 16 to 44 are an integral part of these financial statements.
Consolidated statement of changes in equity
for the year ended 31 December 2008
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Group |Ordinary | Deferred | Capital |Preference | Share | Share | Share | Reverse | Retained | Total |
| | share | share |redemption | shares | premium | option |warrants |acquisition | losses | |
| | capital | capital | reserve | (equity | | reserve | | reserve | | |
| | | | | element) | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Balance | 1,820 | - | - | 77,792 | 2,553,992 | 221,254 | 30 | - | (2,913,068) | (58,180) |
| at | | | | | | | | | | |
| 1 | | | | | | | | | | |
| January | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Conversion | 87 | 299,913 | - | (77,792) | - | - | - | - | 131,509 | 353,717 |
| of | | | | | | | | | | |
| preference | | | | | | | | | | |
| shares | | | | | | | | | | |
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Share | - | (299,913) | 299,913 | - | - | - | - | - | - | - |
| issue | | | | | | | | | | |
| and | | | | | | | | | | |
| redemption | | | | | | | | | | |
| of | | | | | | | | | | |
| deferred | | | | | | | | | | |
| shares | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Allotment | 2 | - | - | - | - | - | - | - | - | 2 |
| of shares | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Share | 572,175 | - | - | - | - | - | - | (572,175) | - | - |
| for | | | | | | | | | | |
| share | | | | | | | | | | |
| exchange | | | | | | | | | | |
| (Enfis | | | | | | | | | | |
| Group | | | | | | | | | | |
| plc with | | | | | | | | | | |
| Enfis | | | | | | | | | | |
| Limited) | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Reverse | (1,907) | - | (299,913) | - | (2,553,992) | - | (30) | 2,855,842 | - | - |
| Acquisition | | | | | | | | | | |
| adjustments | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| AIM | 321,429 | - | - | - | 4,178,571 | - | - | - | - | 4,500,000 |
| listing | | | | | | | | | | |
| (Issue | | | | | | | | | | |
| of new | | | | | | | | | | |
| shares) | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Expenses | - | - | - | - | (593,125) | - | - | - | - | (593,125) |
| incurred | | | | | | | | | | |
| on issue | | | | | | | | | | |
| of new | | | | | | | | | | |
| shares | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Share | - | - | - | - | - | (221,254) | - | - | 221,254 | - |
| option | | | | | | | | | | |
| reversal | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Loss for | - | - | - | - | - | 61,749 | - | - | (1,865,053) | (1,803,304) |
| the | | | | | | | | | | |
| period | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Balance | 893,606 | - | - | - | 3,585,446 | 61,749 | - | 2,283,667 | (4,425,358) | 2,399,110 |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Issue of | 44,680 | - | - | - | 481,967 | - | - | - | - | 526,647 |
| new | | | | | | | | | | |
| shares | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Share | - | - | - | - | - | 82,332 | - | - | - | 82,332 |
| option | | | | | | | | | | |
| reversal | | | | | | | | | | |
| loss for | | | | | | | | | | |
| the year | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Loss for | - | - | - | - | - | - | - | - | (1,341,955) | (1,341,955) |
| period | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
| Balance | 938,286 | - | - | - | 4,067,413 | 144,081 | - | 2,283,667 | (5,767,313) | 1,666,134 |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+-------------+----------+-----------+------------+------------+-------------+-----------+----------+-------------+-------------+-------------+
The capital redemption reserve has arisen on conversion of the convertible
preference shares under the capital maintenance provisions of IAS21.
The reverse acquisition reserve arose on the acquisition by Enfis Group plc of
the entire issued share capital of Enfis Limited on 16 March 2007. The
consideration payable in respect of the transaction was settled via a share for
share exchange, whereby three ordinary shares in Enfis Group plc were exchanged
for each allotted share in Enfis Limited. This group reconstruction has been
accounted for as a reverse acquisition in accordance with IFRS 3, 'Business
Combinations'.
The notes on pages 16 to 44 are an integral part of these financial statements.
Parent company statement of changes in equity for the year ended 31 December
2008
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Company |Ordinary |Deferred | Capital |Preference | Share | Share | Share | Reverse | Retained | Total |
| | share | share |redemption | shares | premium | option |warrants |acquisition | losses | |
| | capital | capital | reserve | (equity | |reserve | | reserve | | |
| | | | | element) | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Balance | - | - | - | - | - | - | - | - | - | - |
| at 17 | | | | | | | | | | |
| March | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Allotment | 2 | - | - | - | - | - | - | - | - | 2 |
| of shares | | | | | | | | | | |
| (On | | | | | | | | | | |
| incorporation) | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Share | 572,175 | - | - | - | - | - | - | - | - | 572,175 |
| for | | | | | | | | | | |
| share | | | | | | | | | | |
| exchange | | | | | | | | | | |
| (Enfis | | | | | | | | | | |
| Group | | | | | | | | | | |
| plc with | | | | | | | | | | |
| Enfis | | | | | | | | | | |
| Limited) | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| AIM | 321,429 | - | - | - | 4,178,571 | - | - | - | - | 4,500,000 |
| listing | | | | | | | | | | |
| (Issue | | | | | | | | | | |
| of new | | | | | | | | | | |
| shares) | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Expenses | - | - | - | - | (593,125) | - | - | - | - | (593,125) |
| incurred | | | | | | | | | | |
| on issue | | | | | | | | | | |
| of new | | | | | | | | | | |
| shares | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Loss for | - | - | - | - | - | 61,749 | - | - | (61,749) | - |
| the | | | | | | | | | | |
| period | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Balance | 893,606 | - | - | - | 3,585,446 | 61,749 | - | - | (61,749) | 4,479,052 |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Issue of | 44,680 | - | - | - | 481,967 | - | - | - | - | 526,647 |
| new | | | | | | | | | | |
| shares | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Loss for | - | - | - | - | - | 82,332 | - | - | (82,332) | - |
| the year | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
| Balance | 938,286 | - | - | - | 4,067,413 | 144,081 | - | - | (144,081) | 5,005,699 |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+----------------+----------+----------+------------+------------+-----------+---------+----------+-------------+-----------+-----------+
The capital redemption reserve has arisen on conversion of the convertible
preference shares under the capital maintenance provisions of IAS21.
The reverse acquisition reserve arose on the acquisition by Enfis Group plc of
the entire issued share capital of Enfis Limited on 16 March 2007. The
consideration payable in respect of the transaction was settled via a share for
share exchange, whereby three ordinary shares in Enfis Group plc were exchanged
for each allotted share in Enfis Limited. This group reconstruction has been
accounted for as a reverse acquisition in accordance with IFRS 3, 'Business
Combinations'.
The notes on pages 16 to 44 are an integral part of these financial statements.
Notes to the financial statements
for the year ended 31 December 2008
1 General information
The principal activity of the group is the design, development, manufacture and
sale of light emitting diode based arrays and light engines.
The company is a public limited liability company incorporated and domiciled in
England and Wales and listed on the Alternative Investment Market ('AIM').
The directors consider there to be no ultimate controlling shareholder of the
company.
The address of the registered office is Technium 2, Kings Road, Swansea
Waterfront, Swansea, SA1 8PJ and the registered number of the company is
06133765.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of Enfis Group plc have been prepared in
accordance with the requirements of the AIM rules and in accordance with
International Financial Reporting Standards as adopted by the European Union,
IFRIC interpretations, the historical cost convention and the Companies Act
1985.
The preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 4.
(a)Going concern
The directors have concluded, having regard to the most recent projections
available that the
group and company will have in place sufficient funding to enable it to continue
trading and meet
its liabilities to third parties as they fall due for the foreseeable future.
(b) Interpretations effective in 2008
IFRIC 11, 'IFRS 2 - Group and treasury share transactions', provides guidance on
whether share based transactions involving treasury shares or involving group
entities (for example, options over a parent's shares) should be accounted for
as equity settled or cash settled share based payment transactions in the stand
alone accounts of the parent and group companies. This interpretation does not
have an impact on the group's financial statements. The company's accounting
policy for share based compensation arrangements is already in compliance with
the interpretation.
(c)Standards, amendments and interpretations effective in 2008 but not relevant
The following standards, amendments and interpretations to published standards
are mandatory for accounting periods beginning on or after 1 January 2008 but
they are not relevant to the group or company's operations.
* IFRIC 12 'service concession arrangements'
* IFRIC 13, 'customer loyalty programmes; and
* IFRIC 14, 'IAS 19 - the limit on a deferred benefit asset, minimum funding
requirements and their interaction'.
2 Summary of significant accounting policies (continued)
(d) Interpretations to existing standards that are not yet effective and have
not been early adopted by the company
The following standards and amendments to existing standards have been published
and are mandatory for the group's accounting periods beginning on or after 1
January 2009 or later periods, but the group has not early adopted them.
* IAS 23 (amendment), 'Borrowing costs' (effective from 1 January 2009). The
amendment to the standard is still subject to endorsement by the EU. It requires
an entity to capitalise borrowing costs directly attributable to the
acquisition, construction or production of a qualifying asset (one that takes a
substantial period of time to get ready for use or sale) as part of the cost of
that asset. The option of immediately expensing those borrowing costs will be
removed. The group and company will apply IAS 23 (amendment) retrospectively
from 1 January 2009, subject to endorsement by the EU, but the amendment is
currently not applicable to the group or company as there are no qualifying
assets.
* IAS 1 (revised). 'Presentation of financial statements' (effective from 1
January 2009). The standard is still subject to endorsement by the EU. The
revised standard will prohibit the presentation of items of income and expenses
(that is, 'non-owner changes in equity') in the statement of changes in equity,
requiring non owner changes in equity to be presented separately from owner
changes in equity. All non owner changes in equity will be required to be shown
in a performance statement, but entities can choose whether to present one
performance statement (the statement of comprehensive income) or two statements
(the income statement and statement of comprehensive income). Where entities
restate or reclassify comparative information, they will be required to present
a restated balance sheet as at the beginning comparative period in addition to
the current requirement to present balance sheets at the end of the current
period and comparative period. The group and company will apply IAS 1 (revised)
from 1 January 2009, subject to endorsement by the EU. It is likely that both
the income statement and statement of comprehensive income will be presented as
performance statements.
* IFRS 2 (amendment), 'Share based payment' (effective from 1 January 2009). The
amendment to the standard is still subject to endorsement by the EU. It deals
with vesting conditions and cancellations. It clarifies that vesting conditions
are service conditions and performance conditions only. Other features of a
share based payment are not vesting conditions. These features would need to be
included in the grant date fair value for transactions with employees and others
providing similar services; they would not impact the number of awards expected
to vest or valuation there of subsequent to grant date. All cancellations,
whether by the entity or by other parties, should receive the same accounting
treatment. The group and company will apply IFRS 2 (amendment) from 1 January
2009, subject to endorsement by the EU. It is not expected to have a material
impact on the group or company's financial statements.
* IAS 32 (amendment), 'Financial instruments: Presentation', and IAS 1
(amendment), 'Presentation of financial statements' - 'Putable financial
instruments and obligations arising on liquidation' (effective from 1 January
2009). The amendment to the standard is still subject to endorsement by the EU.
It requires entities to classify putable financial instruments and instruments,
or components of instruments that impose on the entity an obligation to deliver
another party a pro rata share of the net assets of the entity only on
liquidation as equity, provided the financial instruments have particular
features and meet specific conditions. The group will apply the IAS 32 and IAS
1(amendment) from 1 January 2009, subject to endorsement by the EU. It is not
expected to have any impact on the group or company's financial statements.
2 Summary of significant accounting policies (continued)
* IFRS 1 (amendment), 'First time adoption of IFRS', and IAS 27, 'Consolidated and
separate financial statements', (effective from 1 January 2009). The revised
standard is still subject to endorsement by the EU. The amended standard allows
first time adopters to use a deemed cost of either fair value or the carrying
amount under previous accounting practice to measure the initial cost of
investments in subsidiaries, jointly controlled entities and associates in the
separate financial statements. The amendment also removes the definition of the
cost method from IAS 27 and replaces it with a requirement to present dividends
as income in the separate financial statements of the investor. The group will
apply IFRS 1 (amendment) from 1 January 2009, subject to endorsement by the EU.
The amendment will not have any impact on the group or company's financial
statements which are already prepared under IFRS.
* IAS 27 (revised), 'Consolidated and separate financial statements', (effective
from 1 July 2009). The amendment to the standard is still subject to endorsement
by the EU. The revised standard requires the effects of all transactions with
non controlling interests to be recorded in equity if there is no change in
control and these transactions will no longer result in goodwill or gains and
losses. The standard also specifies the accounting when control is lost. Any
remaining interest in the entity is re-measured to fair value, and a gain or
loss is recognised in profit or loss. The group will apply IAS 27 (revised)
prospectively to transactions with non controlling interests from 1 January
2010, subject to endorsement by the EU.
* IFRS 3 (revised), 'Business combinations' (effective from 1 July 2009). The
revised standard is still subject to endorsement by the EU. The revised standard
continues to apply the acquisition method to business combinations, with some
significant changes. For example, all payments to purchase a business are to be
recorded at fair value at the acquisition date, with contingent payments
classified as debt subsequently re-measured through the income statement. There
is a choice on an acquisition by acquisition basis to measure the non
controlling interest in the acquiree either at fair value or at the non
controlling interest's proportionate share of the acquiree's net assets. All
acquisition related costs should be expensed. The group will apply IFRS 3
(revised) prospectively to all business combinations from 1 January 2010,
subject to endorsement by the EU.
* IFRS 5 (amendment), 'Non-current assets held-for-sale and discontinued
operations', (and consequential amendment to IFRS 1, 'First time adoption')
(effective from 1 July 2009). The amendment is part of the IASB's annual
improvements project published in May 2008. The amendment to the standard is
still subject to endorsement by the EU. The amendment clarifies that all of a
subsidiary's assets and liabilities are classified as held for sale if a partial
disposal sale plan results in loss of control. Relevant disclosure should be
made for this subsidiary if the definition of a discontinued operation is met. A
consequential amendment to IFRS 1 states that these amendments are applied
prospectively from the date of transition to IFRS's. The group will apply the
IFRS 5 (amendment) prospectively to all partial disposals of subsidiaries from 1
January 2010, subject to endorsement by the EU.
* IAS 23 (amendment), 'Borrowing costs' (effective from 1 January 2009). The
amendment is part of the IASB's annual improvements project published in May
2008. The amendment to the standard is still subject to endorsement by the EU.
The definition of borrowing costs has been amended so that interest expense is
calculated using the effective interest method defined in IAS 39 'Financial
instruments: Recognition and measurement'. This eliminates the inconsistency of
terms between IAS 39 and IAS 23. The group and company will apply the IAS 23
(amendment) prospectively to the capitalisation of borrowing costs on qualifying
assets from 1 January 2009, subject to endorsement by the EU, but is currently
not applicable to the group or company as there are no qualifying assets.
2 Summary of significant accounting policies (continued)
* IAS 28 (amendment), 'Investments in associates' (and consequential amendments to
IAS 32, 'Financial Instruments: Presentation', and IFRS 7, 'Financial
instruments: Disclosures') (effective from 1 January 2009). The amendment is
part of the IASB's annual improvements project published in May 2008. The
amendment to the standard is still subject to endorsement by the EU. An
investment in associate is treated as a single asset for the purposes of
impairment testing. Any impairment loss is not allocated to specific assets
included within the investment, for example, goodwill. Reversals of impairment
are recorded as an adjustment to the investment balance to the extent that the
recoverable amount of the associate increases. The group will apply the IAS 28
(amendment) to impairment tests related to investments in associates and any
related impairment losses from 1 January 2009, subject to endorsement by the EU,
but are currently not applicable to the group or company as there are no
investments in associates.
* IAS 36 (amendment), 'Impairment of assets', (effective from 1 January 2009). The
amendment is part of the IASB's annual improvements project published in May
2008. The amendment to the standard is still subject to endorsement by the EU.
Where fair value less costs to sell is calculated on the basis of discounted
cash flows, disclosures equivalent to those for value in use calculation should
be made. The group and company will apply the IAS 36 (amendment) and provide the
required disclosure where applicable for impairment tests from 1 January 2009,
subject to endorsement by the EU.
* IAS 38 (amendment), 'Intangible assets', (effective from 1 January 2009). The
amendment is part of the IASB's annual improvements project published in May
2008. The amendment to the standard is still subject to endorsement by the EU. A
prepayment may only be recognised in the event that payment has been made in
advance of obtaining right of access to goods or receipt of services. The group
will apply the IAS38 (amendment) from 1 January 2009, subject to endorsement by
the EU.
* IAS 19 (amendment), 'Employee benefits', (effective from 1 January 2009). The
amendment is part of the IASB's annual improvements project published in May
2008. The amendment to the standard is still subject to endorsement by the EU.
- The amendment clarifies that a plan amendment that results in a charge in the
extent to which benefit promises are affected by future salary increases is a
curtailment, while an amendment that changes benefits attributable to past
service gives rise to a negative past service cost if it results in a reduction
in the present value of the defined benefit obligation.
- The definition of return on plan assets has been amended to state that plan
administration costs are deducted in the calculations of return on plan assets
only to the extent that such costs have been excluded from measurement of the
defined benefit obligation.
- The distinction between short term and long term employee benefits will be
based on whether benefits are due to be settled within or after 12 months of
employee services being rendered.
- IAS 37, `Provisions, contingent liabilities and contingent assets', require
contingent liabilities to be disclosed, not recognised. IAS 19 has been amended
to be consistent.
The group will apply the IAS 19 (amendment) from 1 January 2009, subject to
endorsement by the EU. The amendment will not have an impact on the group or
company's financial statements as it does not operate a defined benefit
obligation.
2 Summary of significant accounting policies (continued)
* IAS 39 (amendment), 'Financial instruments: Recognition and measurement\'
(effective from 1 January 2009). The amendment is part of the IASB's annual
improvements project published in May 2008. The amendment to the standard is
still subject to endorsement by the EU.
- This amendment clarifies that it is possible for there to be movements into
and out of the fair value through profit or loss category where a derivative
commences or ceases to qualify as a hedging instrument in cash flow or net
investment hedge.
- The definition of financial asset or financial liability at fair value through
profit or loss as it relates to items that are held for trading is also amended.
This clarifies that a financial asset or liability that is part of a portfolio
of financial instruments managed together with evidence of an actual recent
pattern of short term profit taking is included in such a portfolio on initial
recognition.
- The current guidance on designating and documenting hedges states that a
hedging instrument needs to involve a party external to the reporting entity and
cites a segment as an example of a reporting entity. This means that in order
for hedge accounting to be applied at segment level, the requirements for hedge
accounting are currently required to be met by the applicable segment. The
amendment removes the example of a segment so that the guidance is consistent
with IFRS 8, 'Operating segments', which requires disclosure for segments to be
based on information reported to the chief operating decision maker.
- When remeasuring the carrying amount of a debt instrument on cessation of fair
value hedge accounting, the amendment clarifies that a revised effective
interest rate (calculated at the date fair value hedge accounting ceases) are
used.
The group any company will apply the IAS 39 (amendment) from 1 January 2009,
subject to endorsement by the EU. It is not expected to have an impact on the
group or company's income statement.
* IAS 1 (amendment), 'Presentation of financial statements', (effective from 1
January 2009). The amendment is part of the IASB's annual improvements project
published in May 2008. The amendment to the standard is still subject to
endorsement by the EU. The amendment clarifies that some rather than all
financial assets and liabilities classified as held for trading in accordance
with IAS 39, 'Financial instruments: Recognition and measurement' are examples
of current assets and liabilities respectively. The group and company will apply
the IAS 39 (amendment) from 1 January 2009, subject to endorsement by the EU. It
is not expected to have an impact on the group or company's financial
statements.
* IAS 20 (amendment), 'Accounting for government grants and disclosure of
government assistance' (effective from 1 January 2009). The benefit of a below
market rate government loan is measured at the difference between the carrying
amount in accordance with IAS 29, 'Financial instruments: Recognition and
measurement', and the proceeds received with the benefit accounted for in
accordance with IAS 20. The amendment is not expected to have a material impact
on the group and companies financial statements.
* There are a number of minor amendments to IFRS 7, 'Financial instruments:
Disclosures', IAS 8, 'Accounting policies, changes in accounting estimates and
errors', IAS 10, 'Events after the reporting period', IAS 18, 'Revenue', and IAS
34, 'Interim financial reporting', which are part of the IASB's annual
improvements project published in May 2008 (not addressed above). The amendments
to the standards are still subject to endorsement by the EU. These amendments,
subject to endorsement by the EU, are unlikely to have an impact on the group or
company's accounts and have, therefore, not been analysed in detail.
2 Summary of significant accounting policies (continued)
* IFRIC 16, 'Hedges of a net investment in a foreign operation' (effective from
1 October 2008). The amendment to the interpretation is still subject to
endorsement by the EU. IFRIC 16 clarifies the accounting treatment in respect of
net investment hedging. This includes the fact that net investment hedging
relates to differences in functional currency not presentation currency, and
hedging instruments may be held anywhere in the group. The requirements of IAS
21, 'The effects of changes in foreign exchange rates', do apply to the hedged
item. The group will apply IFRIC 16 from 1 January 2009. It is not expected to
have an impact on the group or company's financial statements.
* IFRS 8, 'Operating segments' (effective from 1 January 2009). IFRS 8 replaces
IAS 14, 'Segment reporting'. The new standard requires a 'management approach',
under which segment information is presented on the same basis as that used for
internal reporting purposes. The new standard is not expected to have a material
impact on the group and companies financial statements.
2.2 Consolidation
Subsidiaries
Subsidiaries are all entities over which the company has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than one half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the group. They
are de-consolidated from the date that control ceases.
2.3 Segmental reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and returns which are different from those of segments
operating in other economic environments.
2.4 Foreign currency translation
The functional currency of the company is sterling. Foreign currency
transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
2.5 Intangible fixed assets - patents and development costs
Acquired patents associated with internally developed intellectual property are
shown at historical cost. Patents have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost over their estimated useful lives (5
years).
The costs associated with acquiring patents relating to technology which are no
longer integral to the product range planned for market are expensed to the
income statement.
Development costs capitalised under IAS38 are carried at historical cost.
Development costs have a finite useful life and are carried at cost less
accumulated amortisation. Amortisation is calculated using the straight-line
method to allocate the cost over their estimated useful lives (5 years).
Intangible amortisation is recognised within administrative expenses in the
income statement.
2 Summary of significant accounting policies (continued)
2.6 Property, plant and equipment
All property, plant and equipment is stated at historical cost less accumulated
depreciation. The cost of property, plant and equipment includes expenditure
that is directly attributable to the acquisition of the assets.
Depreciation on all property, plant and equipment is calculated using the
straight-line method to allocate their cost to their residual values over their
estimated useful lives, as follows:
Plant and machinery 20%
Fixture and fittings 20%
The assets' residual values and useful lives are reviewed and adjusted, if
appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognised within 'Other net (losses)/gains in the
income statement.
Repairs and maintenance expenditure is written off to the income statement
account as incurred.
2.7 Research and development
Expenditure on research is charged to the income statement as incurred.
Expenditure on product development is capitalised as an intangible asset in the
balance sheet from the date that the expenditure incurred on the development
meets all the capitalisation criteria as set out in IAS 38 `Intangible assets'
and detailed below:
* Technical feasibility of completing the asset so that it will be available for
use or sale can be demonstrated;
* The intention to complete the asset and use or sell it can be demonstrated;
* The ability to use or sell the asset can be demonstrated;
* The ability to demonstrate how the asset will generate probable future economic
benefits;
* The ability to demonstrate the availability of adequate technical, financial and
other resources to complete the development and to use or sell the asset; and
* The ability to measure reliably the expenditure attributable to the asset during
its development.
Expenditure on product development is expensed to the income statement as
incurred where the capitalisation criteria in IAS 38 are not met. Development
costs recognised as an expense are not recognised as an asset in a subsequent
period.
2 Summary of significant accounting policies (continued)
2.8 Financial assets
The company has a single class of financial asset which is classified as trade
and other receivables. The classification depends on the purpose for which the
financial assets were acquired and management determines the classification of
its financial assets at initial recognition.
Trade and other receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
classified as 'trade and other receivables' in the balance sheet and are
included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non-current assets.
2.9 Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest rate method, less
provision for impairment. A provision for impairment of trade receivables is
established when there is objective evidence that the company will not be able
to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation, and default or delinquency in
payment are considered indicators that the trade receivable is impaired. The
carrying amount of the asset is reduced through the use of a provision account,
and the amount of the loss is recognised within administrative expenses in the
income statement.
2.10 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
determined using the first in, first out method. The cost of finished goods
comprises the purchase price including transport and handling costs.
Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
2.11 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks and other short-term highly liquid investments, with original maturities
of three months or less. Bank overdrafts are shown within borrowings in current
liabilities on the balance sheet.
2.12 Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
2.13 Trade payables
Trade payables are non derivative financial liabilities with fixed or
determinable payments. Trade payables are included in current liabilities,
except for maturities greater than 12 months after the balance sheet date. These
are classified as non current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at amortised cost using the
effective interest rate method.
2Summary of significant accounting policies (continued)
2.14 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost with any
difference between the proceeds (net of transaction costs) and the redemption
value recognised in the income statement over the period of the borrowings using
the effective interest rate method.
Borrowings are classified as current liabilities unless the company has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
2.15Current and deferred income tax
The current income tax charge is calculated on the basis of the tax laws enacted
or substantively enacted at the balance sheet date in the countries where the
company's subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and
establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. However, deferred income
tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit nor loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when
the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary differences
can be utilised.
2.16 Revenue
Revenue comprises the fair value of the consideration received or receivable for
the sale of goods and services or consideration receivable from cooperative
partners for product development in the ordinary course of the company's
activities. Revenue is shown net of value added taxes, returns and rebates.
Revenue is recognised when the amount can be reliably measured and it is
probable that future economic benefit will flow to the company under the terms
of any sale agreements. Revenue is not considered to be reliably measurable
until all contingent clauses in sale agreements are met. Revenue is recognised
when goods are invoiced, this normally corresponds to the date that goods are
despatched to customers.
2.17 Government grants
Grants from the government are recognised at their fair value where there is
reasonable assurance that the grant will be received and that the company will
comply with all attached conditions.
Government grants relating to costs are deferred and recognised in other income
in the income statement over the period necessary to match them with the costs
that they are intended to compensate.
Capital grants that relate to specific capital expenditure are included in
current and non-current liabilities as deferred income which is credited to
the income statement over the related asset's useful life.
2 Summary of significant accounting policies (continued)
2.18 Leasing and hire purchase commitments
Assets held under finance leases, which are leases where substantially all the
risks and rewards of ownership of the asset have passed to the company, and hire
purchase contracts are capitalised in the balance sheet and are depreciated over
the shorter of their useful lives and the lease term.
The interest elements of the rental obligations are charged in the income
statement over the periods of the leases and hire purchase contracts and
represent a constant proportion of the balance of capital repayments
outstanding.
Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Rentals payable under
operating leases are charged in the income statement on a straight line basis
over the lease term.
2.19 Share based payments
The Company operates an equity-settled, share-based compensation plan. The fair
value of the employee services received in exchange for the grant of the options
is recognised as an expense. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest.
At each balance sheet date, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the revision to
original estimates, if any, in the income statement with a corresponding
adjustment to equity.
The proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options are
exercised.
3 Financial risk
3.1 Financial risk factors
The company's operations expose it to a variety of financial risks that include
the effects of credit risk, liquidity risk and interest rate risk. The company
has in place a risk management programme that seeks to limit the adverse effects
on the financial performance of the company by monitoring levels of debt finance
and the related finance costs. The company does not use derivative financial
instruments to manage interest rate costs and as such, no hedge accounting is
applied.
Given the size of the company, the directors have not delegated the
responsibility of monitoring financial risk management to a sub-committee of the
board. The policies set by the board of directors are implemented by the
company's finance department.
(a) Market Risk
(i) Foreign exchange risk
The group distributes and sells internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily with respect to
the US dollar and UK pound. Foreign exchange risk arises from future commercial
transactions and translation of foreign currency denominated monetary assets and
liabilities. Foreign currency risk is managed via the purchase of raw materials
and the sale of products in equivalent currencies.
3 Financial risk (continued)
3.1 Financial risk factors (continued)
(ii) Price risk
The company has periodic price reviews within distributor sales contracts that
enable the company to reassess and adjust for price risk as part of contractual
negotiations. Commodity price risk is assessed as low as a result of the various
supply alternatives available for key components.
(b) Credit risk
The company has implemented policies that require appropriate credit checks on
potential customers before sales are made. The company's credit risk is
primarily attributable to its trade receivables balance. The amounts presented
in the balance sheet are net of allowances for impairment.
(c) Liquidity risk
The company utilises medium-term debt finance, principally a floating rate
bank loan guaranteed under the Small Firm Loan Guarantee Scheme.
(d)Interest rate cash flow risk
The company has both interest bearing assets and interest bearing liabilities.
Interest bearing assets comprise only cash balances, which earn interest at
fixed and floating rates. Interest bearing liabilities comprise debt at fixed
and floating rates.
4 Critical accounting estimates and judgements
In the preparation of the financial information the directors must make
estimates and assumptions that effect the asset and liability items and revenue
and expense amounts recorded in the financial information. These estimates are
based on historical experience and various other assumptions that the Board
believe are reasonable under the circumstances. The results of this form the
basis for making judgements about the carrying value of assets and liabilities
that are not readily available from other sources.
Development expenditure
The principal area where judgement has been exercised in relation to the
financial statements is in respect of development costs. The company has
incurred GBP1,235,281 of product development costs in the year ended 31 December
2007 and GBP1,076,016 of product development costs in the year ended 31 December
2008. Of the total development costs incurred in the year ended 31 December
2008, an amount of GBP269,658 has been capitalised (2007: GBP359,613).
Development costs are expensed to the income statement where the Board believes
that all the criteria for capitalisation as set out in IAS 38 `Intangible
assets' have not been met.
5 Segmental information
The directors consider that the company operates in one business segment.
The group's principal activity consists of the design, development, manufacture
and sale of light emitting diode based arrays and light engines with turnover
and loss on ordinary activities arising entirely from this activity.
The group's revenue is generated mainly from the UK, Europe and the US.
+-----------------------------------+---------------------+---------------------+
| Revenue | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| UK | 1,178,014 | 101,333 |
+-----------------------------------+---------------------+---------------------+
| Europe | 120,463 | 28,869 |
+-----------------------------------+---------------------+---------------------+
| US | 289,987 | 163,723 |
+-----------------------------------+---------------------+---------------------+
| Other countries | 39,538 | 13,088 |
+-----------------------------------+---------------------+---------------------+
| | 1,628,002 | 307,013 |
+-----------------------------------+---------------------+---------------------+
Revenue is allocated based on the country in which the customer is located.
6 Investments
+-----------------------------------+---------------------+----------------------+
| Company | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+----------------------+
| Investment in subsidiary | 572,175 | 572,175 |
| undertaking | | |
+-----------------------------------+---------------------+----------------------+
+----------------+---------------+------------+--------------+
| Name | Country |Proportion | Principal |
| | of | of | activities |
| |incorporation | ownership | |
| | | interest | |
+----------------+---------------+------------+--------------+
| Enfis | England | 100% | Design, |
| Limited | and | interest | development, |
| | Wales | in | manufacture |
| | | Ordinary | and sale of |
| | | Share | light |
| | | Capital | emitting |
| | | | diode based |
| | | | arrays and |
| | | | light |
| | | | engines. |
+----------------+---------------+------------+--------------+
On 16 March 2007, the entire issued share capital of Enfis Limited was acquired
by Enfis Group plc.
The consideration payable in respect of this transaction was settled via a share
for share exchange, whereby three ordinary shares in Enfis Group plc were
exchanged for each allotted share in Enfis Limited.
Pursuant to this agreement, 5,271,754 Ordinary shares of GBP0.10 were issued to
the shareholders of Enfis Limited.
7 Property, Plant and Equipment
+------------------------------------+--------------+--------------+--------------+
| Group | Plant & | Fixtures | Total |
| | Machinery | Fittings | GBP |
| | GBP | Tools & | |
| | | Equipment | |
| | | GBP | |
+------------------------------------+--------------+--------------+--------------+
| Cost | | | |
+------------------------------------+--------------+--------------+--------------+
| At 1 January 2007 | 235,502 | 41,006 | 276,508 |
+------------------------------------+--------------+--------------+--------------+
| Additions | 102,677 | 890 | 103,567 |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2007 | 338,179 | 41,896 | 380,075 |
+------------------------------------+--------------+--------------+--------------+
| Additions | 45,337 | 13,364 | 58,701 |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2008 | 383,516 | 55,260 | 438,776 |
+------------------------------------+--------------+--------------+--------------+
| | | | |
+------------------------------------+--------------+--------------+--------------+
| Accumulated depreciation | | | |
+------------------------------------+--------------+--------------+--------------+
| At 1 January 2007 | 67,846 | 17,895 | 85,741 |
+------------------------------------+--------------+--------------+--------------+
| Charge for the year | 52,343 | 6,640 | 58,983 |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2007 | 120,189 | 24,535 | 144,724 |
+------------------------------------+--------------+--------------+--------------+
| Charge for the year | 67,889 | 8,588 | 76,477 |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2008 | 188,078 | 33,123 | 221,201 |
+------------------------------------+--------------+--------------+--------------+
| | | | |
+------------------------------------+--------------+--------------+--------------+
| Net book value | | | |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2008 | 195,438 | 22,137 | 217,575 |
+------------------------------------+--------------+--------------+--------------+
| At 31 December 2007 | 217,990 | 17,361 | 235,351 |
+------------------------------------+--------------+--------------+--------------+
The net book value of plant and machinery includes an amount of GBP27,606 (2007:
GBP65,812) in respect of assets held under finance leases and hire purchase
contracts.
The company has no fixed assets.
8 Intangible fixed assets
+--------------+----------+-------------+----------+
| Group | Patents | Development | Total |
| | & | Costs | GBP |
| | Licenses | GBP | |
| | GBP | | |
+--------------+----------+-------------+----------+
| Cost | | | |
+--------------+----------+-------------+----------+
| At 1 | 189,270 | - | 189,270 |
| January | | | |
| 2007 | | | |
+--------------+----------+-------------+----------+
| Additions | 21,044 | 359,613 | 380,657 |
+--------------+----------+-------------+----------+
| Disposals | (93,617) | - | (93,617) |
+--------------+----------+-------------+----------+
| At 31 | 116,697 | 359,613 | 476,310 |
| December | | | |
| 2007 | | | |
+--------------+----------+-------------+----------+
| Additions | 46,129 | 269,658 | 315,787 |
+--------------+----------+-------------+----------+
| At 31 | 162,826 | 629,271 | 792,097 |
| December | | | |
| 2008 | | | |
+--------------+----------+-------------+----------+
| | | | |
+--------------+----------+-------------+----------+
| Amortisation | | | |
+--------------+----------+-------------+----------+
| At 1 | 68,137 | - | 68,137 |
| January | | | |
| 2007 | | | |
+--------------+----------+-------------+----------+
| Charge | 21,389 | 31,105 | 52,494 |
| for | | | |
| the | | | |
| year | | | |
+--------------+----------+-------------+----------+
| Released | (44,255) | - | (44,255) |
| on | | | |
| disposal | | | |
+--------------+----------+-------------+----------+
| At 31 | 45,271 | 31,105 | 76,376 |
| December | | | |
| 2007 | | | |
+--------------+----------+-------------+----------+
| Charge | 26,225 | 107,132 | 133,357 |
| for | | | |
| year | | | |
+--------------+----------+-------------+----------+
| Impairment | 41,917 | - | 41,917 |
+--------------+----------+-------------+----------+
| At 31 | 113,413 | 138,237 | 251,650 |
| December | | | |
| 2008 | | | |
+--------------+----------+-------------+----------+
| | | | |
+--------------+----------+-------------+----------+
| Net | | | |
| book | | | |
| value | | | |
+--------------+----------+-------------+----------+
| At 31 | 49,413 | 491,034 | 540,447 |
| December | | | |
| 2008 | | | |
+--------------+----------+-------------+----------+
| At 31 | 71,426 | 328,508 | 399,934 |
| December | | | |
| 2007 | | | |
+--------------+----------+-------------+----------+
Patents include the external third party cost associated with the acquisition of
patents for internally developed intellectual property and know how. Intangible
amortisation is recognised within administrative expenses in the income
statement.
The costs associated with acquiring patents relating to technology which are not
integral to the product range planned for market have been expensed to the
income statement during the period. The impairment relates to the write off of
patent costs associated with products that are no longer integral to the product
range and are not being actively marketed for commercial sale.
The company has no intangible fixed assets.
9 Inventories
+-----------------------------------+---------------------+----------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+----------------------+
| Raw materials and consumables | 351,108 | 277,876 |
+-----------------------------------+---------------------+----------------------+
Inventory totalling GBP45,423 relating to obsolete stock has been written-off
and expensed to the income statement in the year.
The company has no inventories.
10 Trade and other receivables
+--------------------------------+-----------+-------------+-----------+-------------+
| | Group | Company | Group | Company |
| | 2008 | 2008 | 2007 | 2007 |
| | GBP | GBP | GBP | GBP |
+--------------------------------+-----------+-------------+-----------+-------------+
| Trade receivables | 169,700 | - | 123,092 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
| Less: provision for impairment | (4,601) | - | (10,892) | - |
| of trade receivables | | | | |
+--------------------------------+-----------+-------------+-----------+-------------+
| Trade receivables (net) | 165,099 | - | 112,200 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
| Amounts due from subsidiary | - | 4,433,522 | - | 3,906,875 |
| undertaking | | | | |
+--------------------------------+-----------+-------------+-----------+-------------+
| Prepayments | 41,810 | - | 40,596 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
| Unpaid share capital | 441 | - | 441 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
| Other receivables | 11,023 | - | 58,625 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
| | 218,373 | 4,433,522 | 211,862 | 3,906,875 |
+--------------------------------+-----------+-------------+-----------+-------------+
| Less non current portion: | - | (4,433,522) | - | (3,906,875) |
| amounts due from subsidiary | | | | |
| undertakings | | | | |
+--------------------------------+-----------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-----------+-------------+-----------+-------------+
| Current portion | 218,373 | - | 211,862 | - |
+--------------------------------+-----------+-------------+-----------+-------------+
Amounts due from subsidiary undertakings represent net amounts provided to the
company's wholly owned subsidiary Enfis Limited. The net amount is unsecured and
is repayable on the basis that one year's notice is required.
The fair value of trade and other receivables at 31 December 2007 and 31
December 2008 approximate to the book value stated above.
As of 31 December 2008, trade receivables of GBP10,514 (2007: GBP10,832) were
past due but not impaired. These relate to a number of independent customers for
whom there is no recent history of default. The ageing analysis of these trade
receivables is as follows:-
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| 3 to 6 months | 2,494 | 2,815 |
+-----------------------------------+---------------------+---------------------+
| Over 6 months | 8,020 | 8,017 |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| | 10,514 | 10,832 |
+-----------------------------------+---------------------+---------------------+
10 Trade and other receivables (continued)
As of 31 December 2008, trade receivables of GBP4,601 (2007: GBP10,892) were
impaired. The individually impaired receivables mainly relate to old balances
where it has been assessed that the receivable is not expected to be recovered.
The ageing of these receivables is as follows:
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| Over 6 months | 4,601 | 10,892 |
+-----------------------------------+---------------------+---------------------+
The carrying amounts of the group's trade and other receivables are denominated
in the following currencies:
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| UK pound | 201,061 | 162,083 |
+-----------------------------------+---------------------+---------------------+
| Euros | 6,908 | 15,363 |
+-----------------------------------+---------------------+---------------------+
| US dollar | 10,404 | 34,416 |
+-----------------------------------+---------------------+---------------------+
| | 218,373 | 211,862 |
+-----------------------------------+---------------------+---------------------+
Movements on the provision for impairment of trade receivables are as follows:
+-----------------------------------+---------------------+---------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| At 1 January | 10,892 | 33,962 |
+-----------------------------------+---------------------+---------------------+
| Specific write off | (10,376) | (33,962) |
+-----------------------------------+---------------------+---------------------+
| Provision for receivables | 4,085 | 10,892 |
| impairment | | |
+-----------------------------------+---------------------+---------------------+
| At 31 December | 4,601 | 10,892 |
+-----------------------------------+---------------------+---------------------+
11 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and balances with banks, and
investments in money market instruments. Cash and cash equivalents included in
the cash flow statement comprise the following balance sheet amounts.
+----------------------------+-------------+-------------+-------------+-------------+
| | Group | Company | Group | Company |
| | 2008 | 2008 | 2007 | 2007 |
| | GBP | GBP | GBP | GBP |
+----------------------------+-------------+-------------+-------------+-------------+
| Cash on hand and balances | 315,464 | 2 | 18,414 | 2 |
| with banks | | | | |
+----------------------------+-------------+-------------+-------------+-------------+
| Short-term investments | 325,480 | - | 1,981,010 | - |
| (Treasury Deposits) | | | | |
+----------------------------+-------------+-------------+-------------+-------------+
| | 640,944 | 2 | 1,999,424 | 2 |
+----------------------------+-------------+-------------+-------------+-------------+
Significant non-cash transactions
As disclosed in note 12, on 16 March 2007, the entire issued share capital of
Enfis Limited was acquired by Enfis Group plc. The consideration payable in
respect of this transaction was settled via a share for share exchange, whereby
three ordinary shares in Enfis Group plc were exchanged for each allotted share
in Enfis Limited. Pursuant to this agreement, 5,721,754 Ordinary shares were
issued to the shareholders of Enfis Limited.
12 Share capital
The authorised and issued share capital of Enfis Group plc is summarised below:
+----------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------------+---------------+---------------+
| Authorised: | | |
+----------------------------------------------+---------------+---------------+
| 15,000,000 ordinary shares of GBP0.10 each | 1,500,000 | 1,500,000 |
| (On incorporation 50,000 ordinary shares of | | |
| GBP1 each) | | |
+----------------------------------------------+---------------+---------------+
| | | |
+----------------------------------------------+---------------+---------------+
| Issued, allotted and fully paid: | | |
+----------------------------------------------+---------------+---------------+
| 9,382,863 Ordinary shares of GBP0.10 each | 938,286 | 893,606 |
+----------------------------------------------+---------------+---------------+
| | | |
+----------------------------------------------+---------------+---------------+
The Company was incorporated on 1 March 2007 with an authorised share capital of
GBP50,000 comprising 50,000 ordinary shares of GBP1 each.
On 1 March 2007, the Company allotted 2 GBP1 Ordinary shares for cash fully
paid.
On 16 March 2007 the Company by written resolution:
* subdivided the two existing ordinary shares of GBP1 and re-designated them into
20 ordinary shares of 10 pence each;
* subdivided the existing 49,998 authorised but unissued ordinary shares of GBP1
each and re-designated them into 499,980 ordinary shares of 10 pence each;
* Increased its authorised share capital to GBP1,500,000 divided into 15,000,000
ordinary shares of 10 pence each, by the creation of 14,500,000 new Ordinary
Shares of 10 pence each;
* Authorised the Directors to allot relevant securities pursuant to Section 80 of
the Act up to an aggregate nominal value of GBP1,500,000 for the period until
the annual general meeting of the Company in 2008, unless previously revoked or
varied by the Company in general meeting.
On 21 February 2008, the Company issued 446,804 GBP1 Ordinary shares at a price
of 120.5 pence per share raising GBP538,398 before expenses of GBP11,751.
The table below reconciles movements in issued share capital during the year.
+----------+-----------+----------+-----------+-----------+
| | Number | Ordinary | Share | Total |
| | | share | premium | GBP |
| | of | capital | | |
| | shares | GBP | GBP | |
+----------+-----------+----------+-----------+-----------+
| At 1 | 8,936,060 | 893,606 | 3,585,446 | 4,479,052 |
| January | | | | |
| 2008 | | | | |
+----------+-----------+----------+-----------+-----------+
| Share | 446,804 | 44,680 | 481,967 | 526,647 |
| issue | | | | |
+----------+-----------+----------+-----------+-----------+
| | | | | |
+----------+-----------+----------+-----------+-----------+
| At 31 | 9,382,864 | 938,286 | 4,067,413 | 5,005,699 |
| December | | | | |
| 2008 | | | | |
+----------+-----------+----------+-----------+-----------+
12 Share capital (continued)
Share Options
Enfis Group plc has an Enterprise Management Incentive Share Option Scheme (EMI
Scheme) and an Executive Share Option Scheme.
During the year, 71,500 share options (2007: 1,096,350) to subscribe for
Ordinary Shares have been granted to directors and to selected employees under
the EMI Scheme.
The exercise price of granted options is set out below:
+--------------------+--------------+--------------+--------------+--------------+
| | Granted 2008 | Granted 2007 | Granted 2007 | Granted 2007 |
| | Options at | Options at | Options at | Options at |
| | Exercise | exercise | exercise | exercise |
| | price | price | price | price |
| | of GBP1.055 | of 0.1 pence | of GBP1.15 | of 72 pence |
+--------------------+--------------+--------------+--------------+--------------+
| | | | | |
+--------------------+--------------+--------------+--------------+--------------+
| Number of options | 71,500 | 666,000 | 120,000 | 310,350 |
+--------------------+--------------+--------------+--------------+--------------+
Enfis Limited previously operated an un-approved share option scheme for its
directors and employees. On 16 March 2007, holders of options in the Enfis
Limited scheme exchanged their options for options in the EMI Scheme operated by
Enfis Group plc.
Options are conditional on the employee remaining within the employment of the
group on the exercise date (the vesting period). Options issued under the EMI
scheme are exercisable as follows:
In respect of the Options over Ordinary shares granted at 0.1 pence, the Options
shall be exercisable from 23 March 2007 at the subscription price of 0.1 pence.
In respect of Options over Ordinary shares granted at GBP1.15, the option shall
be exercisable at the subscription price of GBP1.15 as follows:-
* As to 25% of the relevant Ordinary shares with effect from 23 March 2007
* As to a further 25% with effect from 2 January 2008: and
* As to a further 25% with effect from 2 January 2009: and
* As to the final 25%, with effect from 2 January 2010.
In respect of Options over Ordinary shares granted at 72 pence, the option shall
be exercisable at the subscription price of 72 pence as follows:-
* As to 25% of the relevant Ordinary shares with effect from 11 January 2008
* As to a further 25% with effect from 11 January 2009: and
* As to a further 25% with effect from 11 January 2010: and
* As to the final 25%, with effect from 11 January 2011.
In respect of options over ordinary shares granted at GBP1.055, the option shall
be exercisable at the subscription price of GBP1.055 as follows:-
* As to 25% of the relevant Ordinary shares with effect from 13 May 2009
* As to a further 25% with effect from 13 May 2010: and
* As to a further 25% with effect from 13 May 2011: and
* As to the final 25%, with effect from 13 May 2012
12 Share capital (continued)
Movements in the number of share options outstanding and their related weighted
average exercise prices are as follows:
+-----------------------------------+---------------------+---------------------+
| | Average exercise | Options |
| | per share | Number |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| At 1 January 2007 in Enfis | | 265,000 |
| Limited | | |
+-----------------------------------+---------------------+---------------------+
| Converted in consideration for | | (265,000) |
| new options | | |
+-----------------------------------+---------------------+---------------------+
| At 16 March 2007 | | - |
+-----------------------------------+---------------------+---------------------+
| Enfis Plc | | |
+-----------------------------------+---------------------+---------------------+
| At 15 March 2007 | | - |
+-----------------------------------+---------------------+---------------------+
| Granted - 16 March 2007 | 0.1 pence | 666,000 |
+-----------------------------------+---------------------+---------------------+
| Granted - 16 March 2007 | 115 pence | 120,000 |
+-----------------------------------+---------------------+---------------------+
| Granted - 16 March 2007 | 72 pence | 310,350 |
+-----------------------------------+---------------------+---------------------+
| At 31 December 2007 | | 1,096,350 |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| Granted - 13 May 2008 | 105.5 pence | 71,500 |
+-----------------------------------+---------------------+---------------------+
| Forfeited | 0.1 pence | (15,000) |
+-----------------------------------+---------------------+---------------------+
| Forfeited | 115 pence | (28,500) |
+-----------------------------------+---------------------+---------------------+
| Forfeited | 72 pence | (36,300) |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| At 31 December 2008 | | 1,088,050 |
+-----------------------------------+---------------------+---------------------+
Share options outstanding at the end of the year have the following expiry date
and exercise prices:
+------------------------------+----------------+---------------+---------------+
| Expiry date | Exercise price | Shares | Shares |
| | per share | 2008 | 2007 |
+------------------------------+----------------+---------------+---------------+
| | | | |
+------------------------------+----------------+---------------+---------------+
| 2013 - expiry date 23 July | 0.1pence | 651,000 | 666,000 |
+------------------------------+----------------+---------------+---------------+
| 2016 - expiry date 2 January | 115 pence | 91,500 | 120,000 |
+------------------------------+----------------+---------------+---------------+
| 2017 - expiry date 2 January | 72 pence | 274,050 | 310,350 |
+------------------------------+----------------+---------------+---------------+
| 2018 - expiry date 13 May | 105.5 pence | 71,500 | - |
+------------------------------+----------------+---------------+---------------+
| | | 1,088,050 | 1,096,350 |
+------------------------------+----------------+---------------+---------------+
The weighted average fair value of the options with an exercise price of 0.1
pence granted on 16 March 2007, determined using the Black-Scholes valuation
model, was 140p per option. The significant inputs into the model were weighted
average share price of 140p at the grant date, exercise price of 0.1 pence,
volatility of 50%, risk free rate of 5.14% and a dividend stream of nil.
The weighted average fair value of the options with an exercise price of 115
pence granted on 16 March 2007, determined using the Black-Scholes valuation
model, was 47p per option. The significant inputs into the model were weighted
average share price of 140p at the grant date, exercise price of 115 pence,
volatility of 50%, risk free rate of 5.14% and a dividend stream of nil.
The weighted average fair value of the options with an exercise price of 72
pence granted on 16 March 2007, determined using the Black-Scholes valuation
model, was 82p per option. The significant inputs into the model were weighted
average share price of 140p at the grant date, exercise price of 72 pence,
volatility of 50%, risk free rate of 5.14% and a dividend stream of nil.
The weighted average fair value of the options with an exercise price of 105.5
pence granted on 13 May 2008, determined using the Black-Scholes valuation
model, was 70.6p per option. The significant inputs into the model were weighted
average share price of 105.5p at the grant date, exercise price of 105.5p,
volatility of 50%, risk free rate of 4.80% and a dividend stream of nil.
13 Trade and other payables
+-----------------------------------+----------------------+----------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+----------------------+----------------------+
| | | |
+-----------------------------------+----------------------+----------------------+
| Trade payables | 220,868 | 328,618 |
+-----------------------------------+----------------------+----------------------+
| Social security and other taxes | 78,766 | 67,646 |
+-----------------------------------+----------------------+----------------------+
| Other payables | 489 | 497 |
+-----------------------------------+----------------------+----------------------+
| Accruals | 102,477 | 68,285 |
+-----------------------------------+----------------------+----------------------+
| Deferred income - government | 30,000 | 30,000 |
| grants | | |
+-----------------------------------+----------------------+----------------------+
| | 432,600 | 495,046 |
+-----------------------------------+----------------------+----------------------+
The Company has no trade or other payables.
14 Non current liabilities - deferred income
+-----------------------------------+---------------------+---------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| | | |
+-----------------------------------+---------------------+---------------------+
| Deferred income - government | 35,000 | 65,748 |
| grants | | |
+-----------------------------------+---------------------+---------------------+
The Company has no deferred income.
15 Borrowings
+-----------------------------------+---------------------+---------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| Current borrowings | | |
+-----------------------------------+---------------------+---------------------+
| Bank loan | 30,300 | 30,300 |
+-----------------------------------+---------------------+---------------------+
| Obligations under finance leases | 17,730 | 28,138 |
| and hire purchase contracts | | |
+-----------------------------------+---------------------+---------------------+
| | 48,030 | 58,438 |
+-----------------------------------+---------------------+---------------------+
| Non-current borrowings | | |
+-----------------------------------+---------------------+---------------------+
| Bank loan | 58,075 | 88,375 |
+-----------------------------------+---------------------+---------------------+
| Obligations under finance leases | - | 17,730 |
| and hire purchase contracts | | |
+-----------------------------------+---------------------+---------------------+
| | 58,075 | 106,105 |
+-----------------------------------+---------------------+---------------------+
The Company has no borrowings.
15 Borrowings (continued)
Bank borrowings
+-----------------------------------+---------------------+---------------------+
| Bank loan | 2008 | 2007 |
| | GBP | GBP |
+-----------------------------------+---------------------+---------------------+
| Amounts falling due: | | |
+-----------------------------------+---------------------+---------------------+
| Between one and two years | 30,300 | 30,300 |
+-----------------------------------+---------------------+---------------------+
| Between three and five years | 27,775 | 58,075 |
+-----------------------------------+---------------------+---------------------+
| Total due after more than one | 58,075 | 88,375 |
| year | | |
+-----------------------------------+---------------------+---------------------+
| Due within one year | 30,300 | 30,300 |
+-----------------------------------+---------------------+---------------------+
Bank borrowings mature on December 2011 and bear interest of 2.5% over Base Rate
(2007: 2.5% over Base Rate). Undrawn facilities at 31 December 2008 include a
floating rate bank overdraft of GBP358,000 (2007: GBP358,000).
Total borrowings include secured bank loans and finance lease liabilities of
GBP106,105 (2007: GBP164,543).
The bank loan is repayable in 60 monthly instalments commencing December 2006.
Interest on the loan is payable quarterly at 2.5% above base rate. A guarantee
premium of 2% per annum is also payable quarterly in advance. The loan is
guaranteed by the Department of Trade and Industry under the Small Firm Loan
Guarantee Scheme (SFLG).
The loan is secured by way of a fixed and floating charge over the assets of
Enfis Limited.
Finance leases
+--------------------------------------------+----------------+----------------+
| | 2008 | 2007 |
| | GBP | GBP |
+--------------------------------------------+----------------+----------------+
| Finance lease liabilities - minimum lease | | |
| payments: | | |
+--------------------------------------------+----------------+----------------+
| No later than one year | 18,478 | 30,763 |
+--------------------------------------------+----------------+----------------+
| Later than one year no later than 5 years | - | 18,478 |
+--------------------------------------------+----------------+----------------+
| | 18,478 | 49,241 |
+--------------------------------------------+----------------+----------------+
| Future finance charges on finance leases | (748) | (3,373) |
+--------------------------------------------+----------------+----------------+
| Present value of finance lease liabilities | 17,730 | 45,868 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| The present value of finance lease | | |
| liabilities is as follows: | | |
+--------------------------------------------+----------------+----------------+
| No later than one year | 17,730 | 28,138 |
+--------------------------------------------+----------------+----------------+
| Later than one year and no later than five | - | 17,730 |
| years | | |
+--------------------------------------------+----------------+----------------+
| | 17,730 | 45,868 |
+--------------------------------------------+----------------+----------------+
Lease liabilities are effectively secured as the rights to the leased asset
revert to the lessor in the event of default.
The company has the option to purchase the assets held under finance leases at
the end of the lease agreements for a nominal value.
15 Borrowings (continued)
The exposure of the company's bank borrowings and finance lease debt to interest
rate changes and the contractual re-pricing dates at the balance sheet dates are
as follows:
+--------------------------------------------+----------------+----------------+
| | 2008 | 2007 |
| | GBP | GBP |
+--------------------------------------------+----------------+----------------+
| 12 months or less | 30,300 | 30,300 |
+--------------------------------------------+----------------+----------------+
| 1-5 years | 58,075 | 88,375 |
+--------------------------------------------+----------------+----------------+
| | 88,375 | 118,675 |
+--------------------------------------------+----------------+----------------+
The carrying amounts and fair value of non-current borrowings are as follows:
+-----------------------------+-------------+------------+------------+-----------+
| | Carrying amount | Fair value |
+-----------------------------+--------------------------+------------------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP | GBP | GBP | GBP |
+-----------------------------+-------------+------------+------------+-----------+
| Bank loan | 58,075 | 88,375 | 58,075 | 88,375 |
+-----------------------------+-------------+------------+------------+-----------+
| Obligations under finance | - | 17,730 | - | 17,730 |
| leases | | | | |
+-----------------------------+-------------+------------+------------+-----------+
| | 58,075 | 106,105 | 58,075 | 106,105 |
+-----------------------------+-------------+------------+------------+-----------+
The fair value of bank and finance lease borrowings approximates to their
carrying amounts.
16 Deferred income tax
There is an un-provided deferred tax asset of GBP562,918 (2007: GBP825,304). The
deferred tax asset has not been recognised in the 31 December 2008 or 31
December 2007 financial statements on the grounds of uncertainty surrounding its
current recoverability. The composition of the deferred tax asset which has not
been recognised in the financial statements is:
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| Un-provided deferred taxation | | |
| comprises: | | |
+----------------------------------------+------------------+------------------+
| Accelerated capital allowances | 25,937 | 26,108 |
+----------------------------------------+------------------+------------------+
| Tax losses | (626,300) | (628,761) |
+----------------------------------------+------------------+------------------+
| Other timing differences | 37,445 | (222,651) |
+----------------------------------------+------------------+------------------+
| Un-provided deferred taxation | (562,918) | (825,304) |
+----------------------------------------+------------------+------------------+
Deferred tax is calculated on the temporary differences under the liability
method using a tax rate of 21% (2007: 22%).
17 Expenses by nature
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Raw materials and consumables used | 1,126,063 | 268,906 |
| (sales) | | |
+----------------------------------------+------------------+------------------+
| Raw materials and consumables used | 216,084 | 331,103 |
| (development) | | |
+----------------------------------------+------------------+------------------+
| Employee benefit expense (note 19) | 1,225,477 | 1,140,516 |
+----------------------------------------+------------------+------------------+
| Depreciation and amortisation | 210,017 | 111,477 |
+----------------------------------------+------------------+------------------+
| Patents written off (note 8) | 41,917 | 49,362 |
+----------------------------------------+------------------+------------------+
| Operating lease payments | 55,818 | 47,281 |
+----------------------------------------+------------------+------------------+
| Other expenses | 756,189 | 628,998 |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Total cost of sales and administrative | 3,631,565 | 2,577,643 |
| expenses | | |
+----------------------------------------+------------------+------------------+
Raw materials and consumables used includes GBP216,084 (2007: GBP331,103) and
employee benefit expense includes GBP590,274 (2007: GBP544,565) of development
costs associated with the development of products. The development costs have
been written off in the period on the basis that the directors do not believe
that the company has satisfied the adequacy of financial resource test set out
in IAS 38 `Intangible assets'.
Other expenses include GBP2,732 (2007: GBP3,528) of foreign exchange losses.
18Auditors Remuneration
During the year the company obtained the following services from the company's
auditors at costs as detailed below:
+----------------------------------------+------------------+------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Fees payable to company's auditor for | 7,000 | 7,000 |
| the audit of parent company and | | |
| consolidated financial statements | | |
+----------------------------------------+------------------+------------------+
| Fees payable to the company's auditor | | |
| and its associates for other services: | | |
+----------------------------------------+------------------+------------------+
| - The audit of the company's | 6,000 | 6,000 |
| subsidiary pursuant to | | |
| legislation | | |
+----------------------------------------+------------------+------------------+
| - Tax services | 2,500 | 2,500 |
+----------------------------------------+------------------+------------------+
| - Other services pursuant to | - | 19,000 |
| legislation | | |
+----------------------------------------+------------------+------------------+
| - Other services in connection with | - | 80,000 |
| AIM listing | | |
+----------------------------------------+------------------+------------------+
| Total | 15,500 | 114,500 |
+----------------------------------------+------------------+------------------+
19Employee benefit expense
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Wages and salaries | 1,039,668 | 972,168 |
+----------------------------------------+------------------+------------------+
| Social security costs | 103,477 | 106,599 |
+----------------------------------------+------------------+------------------+
| Share based payments | 82,332 | 61,749 |
+----------------------------------------+------------------+------------------+
| | 1,225,477 | 1,140,516 |
+----------------------------------------+------------------+------------------+
The average monthly number of persons (including executive directors) employed
by the group during the year was:
+----------------------------------------+------------------+------------------+
| By activity | 2008 | 2007 |
| | Number | Number |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Research and development | 14 | 14 |
+----------------------------------------+------------------+------------------+
| Sales | 6 | 7 |
+----------------------------------------+------------------+------------------+
| Administration and finance | 5 | 5 |
+----------------------------------------+------------------+------------------+
| | 25 | 26 |
+----------------------------------------+------------------+------------------+
The Company incurred expenses of GBP82,332 (2007: GBP61,749) in respect of share
based payments.
20Finance income
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Bank interest receivable | 54,434 | 124,215 |
+----------------------------------------+------------------+------------------+
21Finance costs
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
+----------------------------------------+------------------+------------------+
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Bank loans and overdrafts | 18,707 | 20,372 |
+----------------------------------------+------------------+------------------+
| Finance charges payable under finance | 2,625 | 5,827 |
| leases and hire purchase contracts | | |
+----------------------------------------+------------------+------------------+
| Other | - | 14,486 |
+----------------------------------------+------------------+------------------+
| | 21,332 | 40,685 |
+----------------------------------------+------------------+------------------+
22Directors' emoluments
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| Aggregate emoluments | 292,000 | 279,696 |
+----------------------------------------+------------------+------------------+
The services of Mr S Gibson are of a non executive nature. The emoluments of Mr
S Gibson (GBP10,000) are invoiced to the Company by Fishstone Limited, the
company paying his emoluments.
Key management is defined as directors. The analysis of key management
compensation is therefore set out above.
The emoluments of the highest paid director were as follows:
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| Aggregate emoluments | 94,500 | 93,900 |
+----------------------------------------+------------------+------------------+
No share options were exercised by the highest paid director in the year (2007:
nil). The highest paid director received no share options or other share based
awards during the year.
22 Directors' emoluments (continued)
Share options
Share options granted to the Directors under the Company's approved share option
scheme are shown below:
+----------------+---------------+---------------+---------------+---------------+
| |
+----------------+
| | 31 December | Issued | Forfeited | 31 December |
| | 2007 | Number | Number | 2008 |
| | Number | | | Number |
+----------------+---------------+---------------+---------------+---------------+
| | | | | |
+----------------+---------------+---------------+---------------+---------------+
| S J Gibson | 42,000 | - | - | 42,000 |
+----------------+---------------+---------------+---------------+---------------+
| J C J Thynne | 42,000 | - | - | 42,000 |
+----------------+---------------+---------------+---------------+---------------+
| Dr G Jones | 249,000 | - | - | 249,000 |
+----------------+---------------+---------------+---------------+---------------+
| S P Oxenham | 249,000 | - | - | 249,000 |
+----------------+---------------+---------------+---------------+---------------+
| G A Davies | 75,000 | - | - | 75,000 |
+----------------+---------------+---------------+---------------+---------------+
| O G R Jones | 12,000 | - | - | 12,000 |
+----------------+---------------+---------------+---------------+---------------+
| Dr. A W Nelson | 12,000 | - | - | 12,000 |
+----------------+---------------+---------------+---------------+---------------+
| | 681,000 | - | - | 681,000 |
+----------------+---------------+---------------+---------------+---------------+
| | 31 December | Issued | Forfeited | 31 December |
| | 2007 | Number | Number | 2008 |
| | Number | | | Number |
+----------------+---------------+---------------+---------------+---------------+
| | | | | |
+----------------+---------------+---------------+---------------+---------------+
| S J Gibson | 42,000 | - | - | 42,000 |
+----------------+---------------+---------------+---------------+---------------+
| J C J Thynne | 42,000 | - | - | 42,000 |
+----------------+---------------+---------------+---------------+---------------+
| Dr G Jones | 249,000 | - | - | 249,000 |
+----------------+---------------+---------------+---------------+---------------+
| S P Oxenham | 249,000 | - | - | 249,000 |
+----------------+---------------+---------------+---------------+---------------+
| G A Davies | 75,000 | - | - | 75,000 |
+----------------+---------------+---------------+---------------+---------------+
| O G R Jones | 12,000 | - | - | 12,000 |
+----------------+---------------+---------------+---------------+---------------+
| Dr. A W Nelson | 12,000 | - | - | 12,000 |
+----------------+---------------+---------------+---------------+---------------+
| | 681,000 | - | - | 681,000 |
+----------------+---------------+---------------+---------------+---------------+
The period over which the above options are exercisable is summarised below:
+-------------------+-------------------+-------------------+-------------------+
| |
+-------------------+
| Period of grant | Number of options | Price | Period of |
| | issued | GBP | exercise |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 420,000 | 0.001 | 2004 - 2013 |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 57,000 | 1.15 | 2007 - 2016 |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 204,000 | 0.72 | 2008 - 2017 |
+-------------------+-------------------+-------------------+-------------------+
| Period of grant | Number of options | Price | Period of |
| | issued | GBP | exercise |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 420,000 | 0.001 | 2004 - 2013 |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 57,000 | 1.15 | 2007 - 2016 |
+-------------------+-------------------+-------------------+-------------------+
| 2007 | 204,000 | 0.72 | 2008 - 2017 |
+-------------------+-------------------+-------------------+-------------------+
23Income tax credit
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
+----------------------------------------+------------------+------------------+
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Current tax credit | (555,789) | (181,812) |
+----------------------------------------+------------------+------------------+
| Deferred tax | - | - |
+----------------------------------------+------------------+------------------+
| | (555,789) | (181,812) |
+----------------------------------------+------------------+------------------+
The tax on the group's loss before tax differs from the theoretical amount that
would arise using the tax rate applicable to the losses of the group as follows:
+----------------------------------------+------------------+------------------+
| | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Loss before tax | (1,897,744) | (2,046,865) |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Tax calculated at domestic tax rates | (398,526) | (388,904) |
| applicable | | |
| 21% (2007: 19%) | | |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Expenses not deductible for tax | (8,486) | 33,423 |
| purposes | | |
+----------------------------------------+------------------+------------------+
| Additional deduction for R&D tax | (118,734) | - |
| relief | | |
+----------------------------------------+------------------+------------------+
| Losses surrendered for R&D tax credit | 356,201 | - |
+----------------------------------------+------------------+------------------+
| R&D tax credit | (271,392) | - |
+----------------------------------------+------------------+------------------+
| Tax losses for which no deferred | 169,545 | 355,481 |
| income tax asset was recognised | | |
+----------------------------------------+------------------+------------------+
| Adjustments in respect of prior | (284,397) | (181,812) |
| periods | | |
+----------------------------------------+------------------+------------------+
| Total tax credit | (555,789) | (181,812) |
+----------------------------------------+------------------+------------------+
24Net foreign exchange losses
The exchange differences (charged) to the income statement are included as
follows:
+----------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
+----------------------------------------+------------------+------------------+
| | GBP | GBP |
+----------------------------------------+------------------+------------------+
| | | |
+----------------------------------------+------------------+------------------+
| Other (losses) - net | (2,732) | (3,528) |
+----------------------------------------+------------------+------------------+
| | (2,732) | (3,528) |
+----------------------------------------+------------------+------------------+
25Earnings per share
(a)Basic and diluted
Basic loss per share is calculated by dividing the profits attributable to
equity holders of the company by the weighted average number of ordinary shares.
+----------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
+----------------------------------------------+---------------+---------------+
| | GBP | GBP |
+----------------------------------------------+---------------+---------------+
| Loss attributable to equity holders of the | (1,341,955) | (1,865,053) |
| company | | |
+----------------------------------------------+---------------+---------------+
| Weighted average number of ordinary shares | 9,319,383 | 8,211,919 |
+----------------------------------------------+---------------+---------------+
| Basic and diluted loss per share | (14.4p) | (22.7p) |
+----------------------------------------------+---------------+---------------+
For the years ended 31 December 2008 and 2007, there was no difference in the
weighted-average number of Ordinary Shares used for basic and diluted net loss
per Ordinary Share as the effect of all potentially dilutive Ordinary Shares
outstanding was anti-dilutive. As at 31 December 2008, there were share options
outstanding of 1,088,050 shares (2007: 1,096,350 shares), which could
potentially have a dilutive impact in the future, but which were anti-dilutive
in 2008 and 2007.
26Cash generated from operations
+--------------------------+-------------+-------------+-------------+-------------+
| | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP | GBP | GBP | GBP |
+--------------------------+-------------+-------------+-------------+-------------+
| | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| Loss before income tax | (1,897,744) | (2,046,865) | (82,332) | (61,749) |
+--------------------------+-------------+-------------+-------------+-------------+
| | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| Adjustments for: | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Depreciation | 76,477 | 58,983 | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
| - Amortisation - | 133,357 | 52,494 | - | - |
| intangibles | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Write-off of patents | 41,917 | 49,362 | - | - |
| (note 8) | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Amortisation - grants | (30,748) | (31,629) | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
| - Share based payments | 82,332 | 61,749 | 82,332 | 61,749 |
+--------------------------+-------------+-------------+-------------+-------------+
| - Government grant | (41,969) | (104,604) | - | - |
| income | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Finance income | (54,434) | (124,215) | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
| - Finance costs | 21,332 | 40,685 | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
| Changes in working | | | | |
| capital | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Inventories | (73,232) | (216,447) | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
| - Trade and other | (6,511) | (131,419) | - | - |
| receivables | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| - Trade and other | (62,468) | 155,175 | - | - |
| payables | | | | |
+--------------------------+-------------+-------------+-------------+-------------+
| Cash used in operations | (1,811,691) | (2,236,731) | - | - |
+--------------------------+-------------+-------------+-------------+-------------+
27Contingencies
The group received grant funding of GBP42,802 (2007: GBP140,235) during the year
which could become repayable if certain conditions relating to the grant offer
letter are not complied with during the post grant monitoring period. It is the
director's opinion that they have complied fully with all of the grant
conditions and that no amounts are repayable.
28Commitments
(a)Capital commitments
There are no capital commitments at either year end.
(b)Operating lease commitments
The group leases a building under a non-cancellable landlords repairing lease
from the Welsh Assembly Government.
The future aggregate minimum lease payments under this non-cancellable operating
lease are as follows:
+----------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP | GBP |
+----------------------------------------------+---------------+---------------+
| Expiring within 1 year | 9,303 | - |
+----------------------------------------------+---------------+---------------+
| Expiring within 2 to 5 years | - | 6,867 |
+----------------------------------------------+---------------+---------------+
| | 9,303 | 6,867 |
+----------------------------------------------+---------------+---------------+
29Related party transactions
The net proceeds derived from the share issue undertaken in Enfis Group plc in
February 2008, amounting to GBP526,647 (note 12) were advanced to Enfis Limited
to help fund the company's day to day operating cash flow requirements.
The cash advance has been treated as a loan. The loan is unsecured and is
repayable on the basis that one years notice is required.
The net proceeds derived from the share issue undertaken in Enfis Group plc on
admission to AIM on 16 March 2007, amounting to GBP3,906,875 (note 10) were
advanced to Enfis Limited to help fund the company's day to day operating cash
flow requirements.
The cash advance has been treated as a loan. The loan is unsecured and is
repayable on the basis that one years notice is required.
During 2007 Enfis Limited sold lighting equipment totalling GBP35,250 to the
Celtic Manor Resort Limited, a company which John C Thynne, a director of Enfis
Group plc, is also a director. At 31 December 2007 an amount of GBP35,250 was
due from the Celtic Manor Resort Limited in respect of the transaction.
30Events after the balance sheet date
An Extraordinary General Meeting held on 6 April 2009, approved the issue of
5,600,000 GBP0.10 Ordinary shares, for a consideration of GBP0.36 per share,
generating gross proceeds GBP2,016,000. The shares will formally be issued on 7
April 2009.
31Controlling party
The directors consider there to be no ultimate controlling party.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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