28th Mar 2006 07:03
D1 Oils Plc28 March 2006 28 March 2006 D1 Oils plc Full Year Results for year ended 31 December 2005 D1 Oils plc, the UK-based global producer of biodiesel, announces its full yearresults for the year ended 31 December 2005. Highlights •Solid performance on key targets for agronomy and refining businesses: •Rights obtained to 37,000 hectares planted to 18 March 2006 •Forecast of 42,000 hectares by 31 March 2006 •First D1 20 refinery deployed in Middlesbrough on time and within budget •On track to deliver 9 D1 20 refinery units by December 2006 •Net cash at 31 December 2005 of £23.4m •Organisational clarity enhanced: agronomy, refining, trading •Our combination of activities gives us particular strength within a fragmented industry •Positive market environment for biodiesel driven by high energy prices and government support •Well positioned to capitalise on growth opportunities in biodiesel market Key Financials 2005 2004Turnover £0.4m nil previouslyAdministrative expenses £8.1m £3.0mLoss before tax £7.5m £3.1mLoss per share 28.3p 47.5pNet cash at 31 December £23.4m £9.6m Karl Watkin, Chairman: "We have made excellent progress in developing D1's agronomy and refiningstrengths against the backdrop of growing worldwide awareness of the potentialof renewable fuels to meet future energy needs. D1's strategy has been built onan "earth to engine" approach: our agronomy experience and refining expertise,the latter now proven across a range of crops, have both strengthenedsignificantly in the year. We are augmenting this with a third key businessdriver - the trading of seeds and seedlings, seedcake, crude vegetable oils andbiodiesel. Our efforts are now focused on building upon this solid foundation todevelop the global business footprint and achieve profitability in 2007." Enquiries:D1 Oils plc Graham Prince 07973 323840 Communications Director c/o Brunswick on 28/03/06 Elliott Mannis 020 7404 5959 Chief Executive Officer c/o Brunswick on 28/03/06 Richard Gudgeon 020 7404 5959 Acting Finance DirectorBrunswick Gill Ackers 020 7404 5959 Helen Barnes 020 7404 5959 An interview with Elliott Mannis, CEO, in video, audio and transcript isavailable on www.d1plc.com and www.cantos.com. Notes to editors D1 Oils plc is a UK-based global producer of biodiesel. We are building a globalsupply chain and network that is sustainable and delivers value from"earth-to-engine". Our operations cover agronomy, refining and trading. We arepioneering the science, planting and production of inedible vegetable oils; wedesign, build, own, operate and market biodiesel refineries; and we source,transport and trade seeds and seedlings, seedcake, crude vegetable oils andbiodiesel. Our vision is to be the world's leading biodiesel business. Report of the Chairman, Karl Watkin, and the Chief Executive Officer, Elliott Mannis During 2005, the first full year of D1's operation as a public company, we madegood progress in establishing the foundations on which to build our globalbiodiesel business. We achieved our key planting and refining targets and learntmuch about where and how to prioritise our activities. Subsequent to the yearend, our management, led by a new Chief Executive, reaffirmed our intention tobe a global leader in biodiesel. We now strive to take advantage of the growinginternational push for renewable fuels. Our strategy is firmly set on deliveringvalue from earth to engine through our three core activities of agronomy,refining and trading. In agronomy, we are pioneering the science, planting and production of inediblevegetable oils. Our refining business designs, builds, operates and markets ourrefinery technology. We are exploring options to put in place a trading businessthat will source, transport and trade the commodities necessary to support ouragronomy and refining operations. Our activities in each of these business areashave clear investment and return hurdles, which require business units toaddress both short term profitability and longer term strategic positioning andreturns. The fundamental strength of the three business units will enable us to delivervalue at each stage from earth to engine. We will report and review our businessresults according to this structure henceforth. We begin 2006 with our directionreaffirmed, and our worldwide operations on a solid footing to build aprofitable and sustainable business over the long term. Operations We achieved our key overall goals in agronomy and refining. As of 18 March 2006,we have planted or obtained the rights to offtake from a total of 37,000hectares of jatropha planting worldwide, and are forecasting to have 42,000hectares by 31 March. Our D1 20 refinery successfully completed its initialtrials to produce biodiesel from rapeseed oil in April 2005, and by December hadsuccessfully completed refining tests for soy and palm. On 21 March we announcedthat we had successfully processed jatropha oil to EN14214 standard. We beganconstruction of our first four commercial D1 20 refineries at the end of 2005.During February 2006 the first unit was deployed to our site in Middlesbrough,and is currently being commissioned and tested. Our UK refinery deployments areon time and on budget. Our business overseas is presently focused on three regional markets: India,Southern Africa and South East Asia. In India our principal relationships are incapital efficient joint ventures with local commercial partners. In SouthernAfrica we have three target markets, being South Africa, Zambia and Swaziland,and our work is supported by national government and tribal councils. Thebusiness in South East Asia is at an early stage and we are developingrelationships with substantial partners in a number of key markets. Finances During the year we raised additional funding of £24.4m net of expenses. Net cashat 31 December was £23.4m. The loss for the year was £7.5m and reflectscontinuing investment for future growth. Management There were a number of management changes during the year, including theappointment of Elliott Mannis as Chief Financial Officer and Stephen Douty asRegional Director in July 2005 and the resignation of Mark Quinn as a Directorin September 2005. Subsequent to the year end we announced the resignation of Philip Wood and theappointment of Elliott Mannis as Chief Executive Officer. We have todayannounced that Alex Worrall, a founder Director of the company, is leaving theBoard to pursue other business interests. We thank Mark, Philip and Alex fortheir efforts and support in laying the foundations for D1. Outlook During 2005 energy prices and government initiatives worldwide moved thebiofuels market further in our favour. We are well positioned to seize theopportunities for market growth that exist worldwide, and are focused on ourstrategy to develop agronomy, refining and trading operations. Our combinationof these three activities within one global business gives us unique strength inan industry that continues to be fragmented between agricultural businesses,process contractors, refiners and commodity traders. We have made a solid start to 2006. The Board is confident about the prospectsfor the coming year. A key objective for the management team is to deliver a profit in 2007. On behalf of the Board we would like to take this opportunity to thank ourexecutive management, our business teams, our partners and advisors for theirhard work and support over the year. Karl Watkin Elliott MannisChairman Chief Executive Officer Agronomy During 2005 we initiated a major agronomy programme. This was focused on ourProduct Development Centre in Coimbatore, India, and our work with leadinginternational plant breeders and tissue culture specialists in Holland. The objective of this programme is to identify and produce our own high yieldingproprietary varieties of jatropha. Yields from planting wild seed are expectedto be modest. However, we are making good progress in our agronomy programme tobreed high yielding commercial varieties. Up to 18 March 2006 we have planted or obtained the rights to offtake fromplantings of a total of 37,000 hectares of jatropha worldwide, and areforecasting to have 42,000 hectares by 31 March. The position at 18 March issummarised in the table below: Managed Plantations Contract Farming Seed Purchase and Oil Supply Agreements TotalIndia - 10,000 15,000 25,000Africa 4,000 - - 4,000South East Asia - 6,000 2,000 8,000Total (hectares) 4,000 16,000 17,000 37,000 Managed plantations are those farms where the land and labour is directlycontrolled by D1. In contract farming individual farmers purchase seed andseedlings from and enter into offtake agreements with D1. Trees are planted onthe farmers' own land. Typically planting is supported by bank finance withoutrecourse to D1 but facilitated by D1's offtake arrangements. Seed purchase andoil supply agreements represent offtake contracts over existing jatropha planting. The business anticipates further planting under existing arrangements each year.In some instances pre-existing planting agreements have not been progressed. However, we continue to enter into new agreements for further planting that willdeliver greater value. We have recently concluded agronomy agreements including Williamson Magor in India, the Kachumu Tribal Council in Zambia and Petrotek in Indonesia. We are also exploring new markets including China, where we haverecently signed a Memorandum of Understanding (MOU) for a model farm. Refining Central to our refinery strategy is our modular biodiesel refinery, the D1 20.The D1 20 is a stand-alone skid-mounted unit, capable of producing 8,000 tonnesof biodiesel per year from a range of vegetable oil feedstocks using acontinuous process. The D1 20's technology and processes are proprietary and arethe result of several years' research and development in the UK. During 2005 we commenced manufacturing of the first four D1 20 production units.We delivered the first of these for commissioning to our new refinery centre inMiddlesbrough in February 2006 on time and within budget. We expect to deliver afurther three units to Middlesbrough by the end of June 2006. These units are now substantially complete. We are confident that we will produce a further fiveunits to meet our target of nine by December 2006. The D1 20 has a capacity of 8,000 tonnes per annum, and the deployment of thefirst cluster of four units will give our Middlesbrough site a total annualproduction capacity of 32,000 tonnes. We purchased the site in Middlesbrough inlate 2005. The nine acre site is 800m from wharfs on the Tees and is locatedclose to existing rail sidings. The site has significant potential for expandingrefinery operations and clustering enables significant cost efficiencies. Itwill be a showcase for our refinery technology, housing research anddevelopment, final assembly and testing facilities for refinery units forexport, and training facilities for refinery crews from D1's internationaloperations and overseas partners and customers. The D1 20 refinery previouslysituated in the North West of England will also be located at the site. Having successfully completed 24x7 trials of our D1 20 test refinery in April2005 to produce biodiesel from rapeseed oil meeting the European Union's EN14214standard, we announced our intention in May to accelerate our refinerydevelopment programme to enable the refinery to process a broader range of crudevegetable oils. By the end of the year we successfully completed refining testsfor soy and palm, and on 21 March we announced the successful processing of jatropha to EN14214 standard biodiesel. These trials have demonstrated that ourproprietary refining and pre-processing technology is capable of dealing with arange of potential food and non-food grade feedstocks. Having conducted detailed refinery modeling, we believe that our D1 20s are bestdeployed in clusters, thereby offering considerable economies of scale oversingle unit operation. We have also embarked on a programme to deliverproduction efficiencies by combining four or five D1 20s in order to deliverhigher production volumes. We believe that multiple deployment of the combinedunits offers greater potential than the development of a D1 200. Going forward we will both own and operate our refineries in our own right, and we will seek to project finance any such assets. We will also seek to market, licence and sell our refinery technology to others. Trading A world-class trading capability will be an important factor in our futuregrowth. Building capabilities in the transport and trade of seeds, seedlings,and seedcake will underpin our expanding agronomy business. Similarly ourrefinery business will not reach its full potential unless we have themechanisms and skills in place to obtain crude vegetable oil at the mostcompetitive prices and to secure offtake agreements for the sale of biodiesel onthe most advantageous terms. We are exploring a number of options to put atrading capability in place. During 2005 we began to build our experience in logistics and quality controlthrough a pilot toll processing programme with Dow Haltermann in Belgium,whereby EN 14214 biodiesel was produced from rapeseed and sold to Germancustomers. The principal objective for the trading business in 2006 is to createthe global supply chain for nurseries, crude vegetable oil feedstocks andbiodiesel. One additional area of focus for the trading business is that of carbon credits.We are working with leading technical advisors to ensure that when D1 refineriesoperate in developing countries these credits are secured. D1 should qualify forcredits by enabling fuel switching from fossil fuel to biodiesel. In additionour jatropha agroforestry and planting programmes have the potential to producecarbon credits through the CO2 absorbed by the jatropha trees. Financial Review The significant progress and development in the business is reflected in thefinancial results for the year ended 31 December 2005. The financial results have been prepared on a basis consistent with previousperiods according to United Kingdom Generally Accepted Accounting Principles (UK- GAAP). The Group has adopted a new accounting policy related to its managedplantations. The direct costs of site preparation and planting are beingcapitalised into tangible fixed assets and then amortised over the useful lifeof the trees, which is estimated at 30 years. Total Group turnover of £0.4m (2004 - £nil) in the year to 31 December 2005arose from the sale of biodiesel produced by the toll processing trial with DowHaltermann and by the D1 20 refinery during trials. Sales of biodiesel generateda gross loss of £0.1m reflecting the high costs of trading in very smallquantities. Administrative expenses of £8.1m (2004 - £3.0m) reflect the growth in theoperational team and efforts expended on business development. The cost offeedstock and chemicals purchased for refinery testing, from which the biodieselproduced was not subsequently sold, has been reflected as a development costwithin operating expenses. Interest earned of £0.7m relates to the monies ondeposit and arising from the share placing completed in June. The loss on ordinary activities before and after taxation was £7.5m (2004 -£3.1m) and the loss per ordinary share was 28.3p (2004 - 47.5p). As losses wereincurred, no corporation tax was payable. Net cash "(Defined as Gross cash less mortgage)" on hand at 31 December was£23.4m (2004 - £9.6m). Gross cash was £24.2m and there was a mortgage loanpayable of £0.8m. The net inflow in the year to 31 December was £14.7m (2004 -£9.6m). The most significant element in the cash flow was the proceeds from theshare placing which was completed in June. £25.8m was raised before expenses of£1.4m. In addition to operating expenses, significant investment is being devoted tothe D1 20 refinery manufacturing programme. We are intending to project financeour refinery investments and a debt marketing process is in hand. Total fundsinvested into the construction of D1 20's as at 31 December 2005 amounted to£1.4m. CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 December 2005 Note Year ended Year ended 31December 2005 31December 2004 £000 £000Turnover:group and share of joint venture 461.7 -Less: Share of joint venture (6.2) ------------------------------- ------- --------- ---------Group turnover 415.5 -Cost of sales (501.1) ------------------------------- ------- --------- ---------Gross loss (85.6) -Administrative expenses (8,083.8) (3,024.8)------------------------------ ------- --------- ---------Operating loss 3 (8,169.4) (3,024.8)Joint venture and associate:Share of operating losses and goodwillamortisation 11 (51.6) -Bank interest receivable 764.1 77.2Bank interest payable - (116.7)------------------------------ ------- --------- ---------Loss on ordinary activitiesbefore taxation (7,456.9) (3,064.3)Tax on loss on ordinaryactivities 6 - ------------------------------- ------- --------- ---------Retained loss for thefinancial year withdrawn fromreserves 7, 17 (7,456.9) (3,064.3)------------------------------ ------- --------- ---------Loss per ordinary shareBasic and diluted lossper ordinary share 8 28.35p 47.53p------------------------------ ------- --------- --------- All results derive from continuing operations. During the previous period the holding company, D1 Oils plc, acquired a newsubsidiary D1 Oils Trading Limited. The profit and loss account has beenprepared using merger accounting and is presented on a pro forma basis as if thegroup had been in existence throughout both the current and prior periods.Further information is given in note 1. A consolidated profit and loss account from the date of incorporation of theholding company is given in note 23. CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 December 2005 Year ended Year ended 31December 2005 31December 2004 £000 £000Loss for thefinancial year -Group (7,405.3) (3,064.3) - Associates and joint ventures (51.6) -Currency translationdifference on foreign currency netinvestments (29.9) ------------------------------- --------- ---------Total recognisedlosses relating to the year (7,486.8) (3,064.3)------------------------------ --------- --------- CONSOLIDATED BALANCE SHEET As at 31 December 2005 Note 31December 2005 31December 2004 £000 £000Fixed assetsIntangible assets 9 64.1 67.6Tangible assets 10 4,170.0 831.1Other investments 11 14.0 ------------------------------- ------- --------- --------- 4,248.1 898.7------------------------------ ------- --------- ---------Current assetsDebtors 12 725.3 79.3Raw material stock 126.3 -Cash at bank and in hand 24,281.4 9,562.4------------------------------ ------- --------- --------- 25,133.0 9,641.7Creditors: amounts falling duewithin one year 13 (1,823.2) (816.3)------------------------------ ------- --------- ---------Net current assets 23,309.8 8,825.4------------------------------ ------- --------- ---------Total assets less currentliabilities 27,557.9 9,724.1Creditors: amounts falling dueafter more than one year 14 (840.0) (31.8)Provisions for liabilities andcharges:Share of gross assets in jointventure 11 75.0 -Share of gross liabilities in jointventure 11 (96.0) -Share of net liabilities inassociate 11 (5.6) ------------------------------- ------- --------- --------- (26.6) ------------------------------ ------- --------- ---------Net assets 26,691.3 9,692.3------------------------------ ------- --------- --------- Capital and reservesShare capital 16 312.3 214.9Share premium 17 37,104.7 12,808.4Shares to be issued 17 110.0 -Merger reserve 17 437.7 437.7Own shares held 17 (484.0) -Profit and loss account 17,18 (10,789.4) (3,768.7)------------------------------ ------- --------- ---------Total equity shareholders' funds 26,691.3 9,692.3------------------------------ ------- --------- --------- These financial statements were approved by the Board of Directors on 27 March2006. K E Watkin E M Mannis Chairman Chief Executive Officer COMPANY BALANCE SHEET As at 31 December 2005 Note 31December 2005 31December 2004 £000 £000Fixed assetsInvestments 11 139.0 125.0------------------------------ ------- --------- ---------Current assetsDebtors 12 11,716.6 3,421.5Cash at bank and in hand 23,685.8 9,381.6------------------------------ ------- --------- --------- 35,402.4 12,803.1Creditors: amounts falling duewithin one year 13 (388.4) (360.6)------------------------------ ------- --------- ---------Net current assets 35,014.0 12,442.5------------------------------ ------- --------- ---------Total assets less currentliabilities 35,153.0 12,567.5------------------------------ ------- --------- ---------Net assets 35,153.0 12,567.5------------------------------ ------- --------- --------- Capital and reservesCalled up share capital 16 312.3 214.9Share premium 17 37,104.7 12,808.4Shares to be issued 17 110.0 -Own shares held 17 (484.0) -Profit and loss account 17, 18 (1,890.0) (455.8)------------------------------ ------- --------- ---------Total equity shareholders' funds 35,153.0 12,567.5------------------------------ ------- --------- --------- These financial statements were approved by the Board of Directors on 27 March2006. K E Watkin E M Mannis Chairman Chief Executive Officer CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2005 Note Year ended Year ended 31December 2005 31December 2004 £000 £000Net cashoutflow fromoperatingactivities I (7,747.2) (3,064.9)Return oninvestmentsand servicingof finance ii 764.1 (39.5)Capitalexpenditureand financialinvestment ii (3,445.0) (38.3)Acquisitions ii (25.0) ------------------------------- ------- --------- ---------Cash outflowbeforefinancing (10,453.1) (3,142.7)Financing ii 25,172.1 12,702.1------------------------------ ------- --------- ---------Increase incash in theperiod iii, iv 14,719.0 9,559.4------------------------------ ------- --------- --------- The consolidated cash flow statement should be read in conjunction with thenotes to the consolidated cash flow statement on page 10. NOTES TO THE CASH FLOW STATEMENTS For the year ended 31 December 2005 i) RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATINGACTIVITIES Year ended Year ended 31December 2005 31December 2004 £000 £000Operating loss (8,169.4) (3,024.8)Depreciation ontangible fixedassets 92.1 12.0Amortisation ofgoodwill 3.5 2.6(Increase)/Decreasein debtors (646.0) 64.5Increase/(Decrease)in creditors 988.9 (119.2)(Increase)/Decreasein Stock (126.3) -UITF 17 Expenses 110.0 ------------------------------- --------- ---------Net cash outflowfrom operatingactivities (7,747.2) (3,064.9)------------------------------ --------- --------- ii) GROSS CASH FLOWS Year ended Year ended 31December 2005 31December 2004 £000 £000Returns on investment and servicing of financeInterest received 764.1 77.2Interest element offinance leases - (116.7)------------------------------ --------- --------- 764.1 (39.5)------------------------------ --------- ---------Capital expenditurePayments to acquiretangible fixedassets (3,461.2) (38.3)Proceeds on disposalof leased assets 30.2 -Purchase of tradeinvestments (14.0) ------------------------------- --------- --------- (3,445.0) (38.3)------------------------------ --------- ---------AcquisitionsPayment to acquireshare of associatedcompany (25.0) ------------------------------- --------- ---------FinancingIssue of ordinaryshare capital 25,791.2 14,951.3Costs of raisingfinance (1,397.5) (1,490.2)Purchase of ownshares (3,479.9) -Proceeds on disposalof own shares 3,462.0 -Capital element offinance lease (43.7) (759.0)Mortgage 840.0 ------------------------------- --------- --------- 25,172.1 12,702.1 ------------------------------ --------- --------- iii) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Year ended Year ended 31December 2005 31December 2004 £000 £000Increase in cash inthe year 14,719.0 9,559.4Cashflow frommovement in debt andlease financing (796.3) 759.0------------------------------ --------- ---------Change in net fundsresulting from cashflows 13,922.7 10,318.4New finance leases - (750.0)New finance leasesobtained on acquisition ofsubsidiary - (52.7)------------------------------ --------- ---------Increase in netfunds in year 13,922.7 9,515.7Net funds at 1January 9,518.7 3.0------------------------------ --------- ---------Net funds at 31December 2005 23,441.4 9,518.7------------------------------ --------- --------- iv) ANALYSIS OF CHANGES IN NET FUNDS At 1 January Cash flows Other non-cash Year ended 2005 changes 31December 2005 £000 £000 £000 £000Cash at bankand in hand 9,562.4 14,719.0 - 24,281.4Long term loans - (840.0) - (840.0)Finance leases (43.7) 43.7 - ----------------------- -------- -------- -------- ---------- 9,518.7 13,922.7 - 23,441.4---------------------- -------- -------- -------- ---------- NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2005 1. ACCOUNTING POLICIES The principal accounting policies adopted are described below. Basis of preparation The Group financial statements consolidate the financial statements of thecompany and its subsidiary undertakings as at 31 December 2005. Accounting convention The financial statements are prepared under the historical cost convention. Thefinancial statements are prepared in accordance with United Kingdom applicableaccounting standards. During the previous period the holding company, D1 Oils plc, acquired a newsubsidiary D1 Oils Trading Limited. The pro forma consolidated profit and lossare presented as if the merger of D1Oils plc with D1 Oils Trading Limited tookplace on the first day of each financial period presented and as though theGroup, as presently constituted, had been in existence throughout those periods.The pro forma cash flow and balance sheet has been prepared on the same basis.All other acquisitions are accounted for under the acquisition method. New Accounting Policies The following policies have been adopted during the year in response to newtransactions and are not changes to existing policies. Turnover: Turnover represents amounts receivable for goods and services provided in thenormal course of business, net of trade discounts, VAT and other sales related taxes. Plantation Accounting: A major activity of the Group is to prepare previously untreated ground and toplant jatropha seeds and seedlings. Once mature the jatropha trees bear seedsthat contain crude jatropha oil. This crude oil can be refined to produce biodiesel. The direct costs of site preparation and planting seedlings, to thepoint at which the trees are mature and producing seeds, are capitalised andamortised over the useful life of the trees, which is on average 30 years. Stock: Stocks are stated at the lower of cost or net realisable value. Stock, includingseeds and seedlings, also contains direct labour and appropriate overheads whereapplicable. Net realisable value is based on estimated selling price, less othercosts expected to be incurred to completion and disposal. Provision is made forobsolete, slow-moving or defective items as appropriate. Joint Ventures: Entities in which the Group holds an interest on a long term basis, and whichare jointly controlled by the Group with one or more other parties under acontractual agreement, are treated as joint ventures and are accounted for usingthe gross equity method. The consolidated profit and loss account includes thegroup's share of joint venture profits less losses while the group's share ofboth the gross assets and the gross liabilities of the joint venture are shownin the consolidated balance sheet. Goodwill arising on the acquisition ofassociates, representing any excess of the fair value of the share ofidentifiable assets and liabilities acquired, is capitalised and written off ona straight line basis over its useful economic life of 20 years. Any unamortisedbalance of goodwill is included in the carrying value of the investment in jointventures. Employee Benefit Trust: In accordance with UITF38 "Accounting for ESOP Trusts" own shares held by theEmployee Benefit Trust are treated as a reduction to shareholders funds. Theseare held at cost until disposed of. Any profit or loss on disposal is treated asa movement in reserves. Associates: In the group financial statements investments in associates are accounted forusing the equity method. The consolidated profit and loss account includes thegroup's share of associates' profits less losses while the group's share of thenet assets of the associates is shown in the consolidated balance sheet.Goodwill arising on the acquisition of associates, representing any excess ofthe fair value of the share of identifiable assets and liabilities acquired, iscapitalised and written off on a straight line basis over its useful economiclife of 20 years. Any unamortised balance of goodwill is included in thecarrying value of the investment in associates. Existing Accounting Policies The following policies have been applied consistently throughout the year andthe preceding year. Investments: Investments held as fixed assets are stated at cost less provision for anyimpairment. Tangible fixed assets and depreciation: Depreciation on fixed assets is calculated to write off their cost, lessestimated residual value, over their expected useful lives at the followingannual rates using the straight line method. Freehold property:Land not depreciatedBuildings 20 yearsPlantations 30 yearsPlant and machinery 3 - 10 yearsMotor vehicles 3 - 5 yearsFixtures, fittings and equipment 3 - 5 years Foreign currencies: Monetary assets and liabilities denominated in overseas currencies aretranslated into sterling at the rate of exchange ruling at the balance sheetdate. Individual transactions are translated at the rate of exchange ruling onthe date of transaction. All exchange differences are included in the profit andloss account. The results of overseas operations are translated at the closing rates ofexchange during the period and their balance sheets at the rates ruling at thebalance sheet date. Exchange differences arising on translation of the openingnet assets and on foreign currency borrowings, to the extent that they hedge thegroup's investment in such operations, are reported in the statement of totalrecognised gains and losses. All other exchange differences are included in theprofit and loss account. Current tax: Current tax, including UK corporation tax and foreign tax, is provided atamounts expected to be paid (or recovered) using the tax rates and laws thathave been enacted or substantively enacted by the balance sheet date. Deferred taxation: Deferred taxation is provided in full on timing differences that result in anobligation at the balance sheet date to pay more tax, or a right to pay lesstax, at rates expected to apply when they crystallise based on current tax ratesand law. Timing differences arise from the inclusion of items of income andexpenditure in taxation computations in periods different from those in whichthey are included in financial statements. Deferred tax assets are recognised tothe extent that it is regarded as more likely than not that they will berecovered. Deferred tax assets and liabilities are not discounted. Finance leases and hire purchase contracts: Assets held under finance leases and hire purchase contracts are capitalised attheir fair value on the inception of the leases and depreciated over the shorterof the period of the lease and the estimated useful economic lives of theassets. The finance charges are allocated over the period of the lease inproportion to the capital amount outstanding and are charged to the profit andloss account. Operating lease rentals are charged to profit and loss in equalannual amounts over the lease term. Research and development: Research and development expenditure is charged to the profit and loss accountas incurred. Share options: In accordance with the provisions of UITF17, the difference between the exerciseprice and nominal value of share options granted is credited to the shares to beissued reserve. Charges are made to the profit and loss account in the period inwhich the options are granted. 2. SEGMENTAL INFORMATION The Group operates in only one class of business in those areas of the worldwhere the Group is represented. A geographical split of the business is asfollows: United Kingdom Africa Asia Pacific India Group £000 £000 £000 £000 £000 Turnover:Group andshare of jointventure 372.9 - 7.0 81.8 461.7 Less: Share ofjoint venture - - - (46.2) (46.2) --------- -------- -------- -------- --------Group turnover 372.9 - 7.0 35.6 415.5 --------- -------- -------- -------- -------- Loss on ordinaryactivities before --------- -------- -------- -------- --------taxationYear ended 31December 2005 (6,117.8) (682.5) (298.3) (358.3) (7,456.9) --------- -------- -------- -------- -------- --------- -------- -------- -------- --------Year ended 31December 2004 (2,888.6) (131.0) (44.7) - (3,064.3) --------- -------- -------- -------- -------- Net assets/(liabilities) --------- -------- -------- -------- --------At 31 December2005 28,258.1 (940.7) (278.2) (347.9) 26,691.3 --------- -------- -------- -------- -------- --------- -------- -------- -------- --------At 31 December2004 9,886.4 (151.7) (42.4) - 9,692.3 --------- -------- -------- -------- -------- The group generated no turnover in the period ended 31 December 2004. Net finance income of £764,100 (2004: expense of £39,500) on central Groupborrowings has been included within the United Kingdom segment. The geographic regions of the Group have been renamed to reflect the groupoperating divisions.. This has not amended the prior year figures. Additionally,comparatives in the table above in respect of operating loss have been amendedto correct a typographical error in the previous year's financial statements. Year ended Year ended 31 December 31 December 2005 2004 £000 £000Operating loss is stated after charging (crediting):Directors' remuneration (seenote 5) 1,023.2 254.8Bad debts - 149.8Depreciation:- owned assets 92.1 1.5- leased assets - 10.4 ----------- ---------- 92.1 11.9 ----------- ----------Amortisation of goodwill 3.5 2.6Research and development 580.3 484.7Auditors' remunerationAudit servicesGroup 45.0 28.0Company 30.0 15.0Non audit services:Taxation advisory 67.5 76.4Other advisory services 190.9 124.1Charged to share premium (190.9) (200.5) ----------- ---------- 67.5 - ----------- ---------- 4. INFORMATION REGARDING EMPLOYEES Year ended Year ended 31 December 31 December 2005 2004 £000 £000Total average number employed by the group includingexecutive directors was:Executive directors 5 7Technical 5 -Administration 45 - ----------- ---------- Total 55 7 ----------- ---------- The costs incurred in respect ofthese employees (including directors)were: £000 £000 Wages and salaries 1,701.0 377.9Social security costs 951.1 41.5 ----------- ---------- 2,652.1 419.4 ----------- ---------- Total average by the company includingexecutive directors was: Executive directors 5 7Technical - -Administration - - ----------- ---------- Total 5 7 ----------- ---------- The costs incurred in respect ofthese employees (including directors)were: £000 £000Wages and salaries 750.9 377.9Social security costs 382.0 41.5 ----------- ---------- 1,132.9 419.4 ----------- ---------- 5. DIRECTORS' REMUNERATION Year ended Year ended Basic Benefits 31 December 31 December in kind salaries Fees & other 2005 2004 £000 £000 £000 £000 £000Executive directorsKarl Eric Watkin (i) 112.5 - - 112.5 50.0Mark Lockhart Muir Quinn(ii) 125.0 - 158.2 283.2 54.0Alec David Worrall (i) 75.0 - - 75.0 33.3Philip Kenneth Wood (iv) 150.0 - 0.6 150.6 50.0Elliott Michael Mannis 67.7 - 5.6 73.3 -(iii)Stephen Peter Douty 67.7 - 0.6 68.3 -(iii)William Peter Campbell 120.0 - 6.6 126.6 40.0 Non-executive directorsJohn Barclay Forrest 12.0 15.5 - 27.5 9.2Clive Neil Morton 12.0 16.3 - 28.3 9.2Peter John Davidson 12.0 15.3 - 27.3 9.2Karl Eric Watkin (i) 31.2 - - 31.2 -Alec David Worrall (i) 17.7 1.2 0.5 19.4 - ------- -------- -------- -------- -------- 802.8 48.3 172.1 1,023.2 254.8 ------- -------- -------- -------- -------- i. On 28th September 2005 Karl Eric Watkin and Alec David Worrallchanged status from executive to non executive directors ii. Mark Lockhart Muir Quinn resigned from the company on the 26thSeptember 2005. His contract entitled him to a payment of £75,000 on leavingoffice with provision for a further £75,000 subject to the satisfaction ofcertain criteria which were subsequently met. This amount is included abovewithin benefits in kind and other. iii. Elliott Michael Mannis and Stephen Peter Douty were appointed asexecutive directors on 19th July 2005. iv. Philip Kenneth Wood resigned as a director of the company on 16thJanuary 2006. His contract entitled him to a payment of £150,000 on leavingoffice. This charge will be recognised in the year to 31 December 2006 and isexcluded from the table above accordingly. Further, on 2 February 2006 heexercised 78,125 ordinary shares at £1.28 per share and 150,000 ordinary sharesat £1.60 per share. At this time options over 294,187 ordinary shares lapsed.Philip Kenneth Wood still retains options over 444,186 ordinary shares at £1.60per share until 31 July 2007. During the year ended 31 December 2005 the group incurred consultancy costs of£55,800 to The Morton Partnership, (2004: £nil) a company in which Clive NeilMorton is a director and shareholder, £129,000 of consultancy costs to DavidsonTechnology Limited, (2004: £nil) a company in which Peter John Davidson hasindirect control, £1,900 of consultancy costs to Walworth Gardens Limited,(2004: £nil) a company in which Alec David Worrall is a director andshareholder. There were no outstanding balances with the above companies at 31December 2005. Additionally, the Group incurred consultancy costs of £nil to RedComm Limited,(2004: £100,000) a company in which Karl Eric Watkin was a director andshareholder, £nil consultancy costs to Global Trading Group Limited, (2004:£100,000) a company in which Mark Lockhart Muir Quinn was a director andshareholder and £nil consultancy costs to Almegar Solutions, (2004: £66,667) acompany in which Alec David Worrall was a director and shareholder. Alltransactions were at arms length. At the year end RedComm Limited owed theGroup, £nil (2004: £5,512), Almegar Solutions Limited owed the Group £nil (2004:£5,502) and Global Trading Group Limited owed the Group £nil (2004: £22,055).All interests in the aforementioned companies were disposed of during 2005. Directors'shareoptions:Directors Options Granted Options Exercise Date Expiry date 1 Jan 2005 31 Dec Price ExercisableKarl EricWatkin 39,062 - 39,062 £1.280 October 2005 October 2014Mark LockhartMuir Quinn 39,062 - 39,062 £1.280 October 2005 October 2014Alec DavidWorrall 39,062 - 39,062 £1.280 October 2005 October 2014Philip KennethWood 234,374 - 234,374 £1.280 October 2005 October 2014William PeterCampbell 39,062 - 39,062 £1.280 October 2005 October 2014John BarclayForrest 78,125 - 78,125 £1.280 October 2005 October 2014Peter JohnDavidson 156,250 - 156,250 £1.280 October 2005 October 2014Clive NeilMorton 156,250 - 156,250 £1.280 October 2005 October 2014Philip KennethWood - 888,373 888,373 £1.600 January 2006 January 2015William PeterCampbell - 106,897 106,897 £2.900 a) October 2015ElliottMichael Mannis - 33,613 33,613 £2.975 a) May 2015ElliottMichael Mannis - 132,075 132,075 £2.650 a) May 2015Stephen PeterDouty - 56,497 56,497 £1.770 a) January 2015Stephen PeterDouty - 132,075 132,075 £2.650 a) May 2015 ------- ------- -------- 781,247 1,349,530 2,130,777 ------- ------- -------- a) These options have been granted as one third exercisable on the firstanniversary of the date of grant. Thereafter a further 1/36accrues monthly over the next 24 months so that the full amount granted iscapable of exercise after 3 years. 6. TAX ON LOSS ON ORDINARY ACTIVITIES The tax credit during the year was £nil (2004: £nil). (i) Factors affecting tax credit for the current year The tax credit assessed for the year is lower than that resulting from applyingthe standard rate of corporation tax in the UK of 30%. The differencesare explained below. Year ended Year ended 31 December 31 December 2005 2004 £000 £000Loss on ordinary activities before tax (7,456.9) (3,064.3) ------------- ------------Tax at 30% thereon (2,237.1) (919.3) ------------- ------------Expenses not deductible for tax purposes 84.4 213.7Capital allowances greater than depreciation 16.1 -Losses for which no tax relief available 1,709.9 653.8Losses of overseas subsidiaries for which no taxrelief available 426.7 51.8 ------------- ------------Current tax credit for the period - - ------------- ------------ At 31 December 2005 the Group has estimated management expenses of £2,097,000(2004: £330,000) to carry forward to set off against future income and gains ofthe parent company and has estimated expenditure of £6,534,000 (2004:£2,264,000) which will be available to set against future trading profits of UKsubsidiary companies. In addition overseas subsidiary companies have estimatedexpenditure of £1,620,000 (2004: £198,000) to set against future tradingprofits. A UK deferred tax asset of £2,605,000 (2003: £778,000) has not beenrecognised in respect of accelerated capital allowances, management expenses andexpenditure carried forward as there is insufficient evidence that the assetwill be recovered. 7. LOSS OF PARENT COMPANY As permitted by Section 230 of the Companies Act, the profit and loss accountfor the parent company is not presented as part of these financial statements.The parent company's loss for the year ended 31st December 2005 amounted to£1,900,300 (18 weeks ended 31 December 2004: £455,874). 8. LOSS PER ORDINARY SHARE Loss per share has been calculated using the weighted average number of sharesin issue during the relevant financial periods in accordance with FRS 14 formerged results. For the purposes of calculating the loss per ordinary share theweighted average number of shares excludes 193,645 shares held by the D1OilsEmployee Benefit Trust as disclosed in note 16. The weighted average number of shares in issue is as detailed below and theearnings, being loss on ordinary activities after taxation, are £7,456,900(2004: £3,064,277). No separate diluted loss per share has been disclosed as the share options areanti-dilutive. Year ended Year ended 31 December 31 December 2005 2004 No. No.Weighted averagenumber of shares 26,297,460 6,447,640 2005 2004 Pence PenceLoss per ordinaryshare - basic anddiluted 28.35p 47.53p 9. INTANGIBLE ASSETS Goodwill £000CostAt 1 January 2005 70.2Additions during the year - -----------At 31 December 2005 70.2 ----------- Accumulated depreciationAt 1 January 2005 2.6Charge for the year 3.5 --------------At 31 December 2005 6.1 -------------- Net book valueAt 31 December 2005 64.1At 31 December 2004 67.6 10. TANGIBLE FIXED ASSETS Freehold Motor Plant and Fixtures Property Plantations vehicles machinery and fittings Total £000 £000 £000 £000 £000 £000CostAt 1 January2005 - - 57.0 769.9 16.2 843.1Additions 1,283.2 650.7 20.8 1,449.0 57.5 3,461.2Disposals - - (53.4) - - (53.4) --------- -------- -------- -------- -------- -------At 31December 1,283.2 650.7 24.4 2,218.9 73.7 4,250.92005 --------- -------- -------- -------- -------- ------- AccumulateddepreciationAt 1 January2005 - - 10.5 - 1.5 12.0Charge forthe - - 17.6 60.8 13.7 92.1yearDisposals - - (23.2) - - (23.2) --------- -------- -------- -------- -------- -------At 31December - - 4.9 60.8 15.2 80.92005 --------- -------- -------- -------- -------- ------- Net bookvalue --------- -------- -------- -------- -------- -------At 31December 1,283.2 650.7 19.5 2,158.1 58.5 4,170.02005 --------- -------- -------- -------- -------- ------- --------- -------- -------- -------- -------- -------At December2004 - - 46.5 769.9 14.7 831.1 --------- -------- -------- -------- -------- ------- Included within plant and machinery are leased assets with a net book value of£nil (2004: £43,700). 11. INVESTMENTS IN GROUP UNDERTAKINGS Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000Subsidiary undertakings - - 125.0 125.0Other investments 14.0 - 14.0 - --------- ---------- --------- ---------Included in investments 14.0 - 139.0 125.0 --------- ---------- --------- ---------Associates (5.6) - - -Joint ventures (21.0) - - - --------- ---------- --------- ---------Included in provisions (26.6) - - - --------- ---------- --------- --------- Company subsidiary undertakings: £000 CostAt 1 January and 31 December 2005 125.0 ------- Provisions for impairmentAt 1 January and 31 December 2005 - ------ Net book valueAt 1 January and 31 December 2005 125.0 ------- Other investments: Group £000CostAt 1 January 2005 -Additions 14.0 ------At 31 December 2005 14.0 ------ Provisions for impairmentAt 1 January 2005 -Provided in the year - ------At 31 December 2005 - ------ Net book valueAt 31 December 2005 14.0 ------ Group associates and joint ventures: 2005 £000Share of net assets/costAt 1 January 2005 -Additions -Share of retained loss in the year (32.9) --------At 31 December 2005 (32.9) --------Provisions for impairment --------At 1 January and 31 December 2005 - --------Goodwill At 1 January 2005 -Additions 25.0Written off (18.7) -------At 31 December 2005 6.3 -------Net book value At 31 December 2005 (26.6) -------- The company owns more than 10% of the share capital of the following subsidiarycompanies: Nature of Country of ShareholderName business registration class PercentageD1 Oils Trading Limited Biodiesel trading UK Ordinary 100%D1 Oil Subsidiary Biodiesel trading UK Ordinary 100%LimitedD1 (UK) Limited Biodiesel trading UK Ordinary 100%D1 Oils Asia Pacific Inc Biodiesel trading Philippines Ordinary 100%D1 Oils South Africa(PTY) Biodiesel trading South Africa Ordinary 75%LimitedD1 Oils Mohan Pvt Biodiesel trading India Ordinary 50%LimitedD1 Oils Ghana (PTY) Biodiesel trading Ghana Ordinary 100%LimitedD1 Oils Malaysia SBN BHD Biodiesel trading Malaysia Ordinary 99.8%D1 Oils India Pvt Biodiesel trading India Ordinary 100%LimitedGroupBio Limited Engine UK Ordinary 25% developmentD1 Oils Africa (PTY)Limited Dormant South Africa Ordinary 100%D1 Oils Madagascar Biodiesel trading Madagascar Ordinary 100%LimitedD1 Oils Zambia Limited Biodiesel trading Zambia Ordinary 100%D1 Oils Tanzania Limited Dormant Tanzania Ordinary 90% 12. DEBTORS Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000Debtors 170.8 78.1 - 11.7Taxation and social security 267.1 - 267.1 -Amounts owed by subsidiary - - 11,392.6 3,409.8undertakingsPrepayments 287.4 1.2 56.9 - -------- -------- -------- -------- 725.3 79.3 11,716.6 3,421.5 -------- -------- -------- -------- 13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000Obligations under finance leases(note 15) - 11.9 - -Trade creditors 882.8 555.4 47.5 -Directors loans - 55.2 - 27.1Other loans 3.2 65.8 - -Taxation and social security 72.4 84.1 - 333.5Accruals and deferred income 864.8 43.9 340.9 - -------- -------- -------- -------- 1,823.2 816.3 388.4 360.6 -------- -------- -------- -------- 14. CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000Mortgagepayable (note15) 840.0 - - -Obligationsunder financeleases - 31.8 - - -------- -------- -------- -------- 840.0 31.8 - - -------- -------- -------- -------- 15. BORROWINGS Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000 Amounts due within one year or on demand - - - -Between oneand two years 60.0 11.9 - -Between twoand five years 180.0 11.9 - -Over five years 600.0 19.9 - - -------- -------- -------- -------- 840.0 43.7 - - -------- -------- -------- -------- The Group borrowings in 2005 relate to the mortgage at the Forty Foot Road sitein Middlesbrough, TS2 1HG. The mortgage is secured by a fixed charge over theproperty. The interest rate payable on the loan is fixed at 1.75% over LIBOR forthe period of the mortgage which is repayable in 56 quarterly instalmentscommencing March 2007. The borrowings in 2004 related to obligations under finance leases which weredischarged during 2005. Obligations under the finance leases were secured on theassets to which they related. 16. CALLED UP SHARE CAPITAL 2005 2004 £000 £000Authorised --------- ---------52,000,000 (2004:52,000,000) ordinaryshares of 1p each 520.0 520.0 --------- --------- Called up, allotted and fully paid --------- ---------31,225,481 (2004: 21,492,864) ordinaryshares of 1p each 312.3 214.9 --------- --------- On 14th June 2005, the company completed the placing of 9,732,617 new ordinaryshares. The company received cash consideration of £25,791,200 for this placingprior to expenses of £1,397,500. Also during the period, the company purchased 1,385,000 of its own ordinaryshares of 1p, representing 4.4% of the issued share capital of the company at 30June 2005. This was also the maximum number of such shares held during the year.These shares, which are held in an Employee Benefit Trust established for thepurpose, were purchased on the open market with financing provided by thecompany and in accordance with UITF 38 are shown in reserves as own shares held. On 19th July 2005, D1 Oils plc disposed of 1,191,355 ordinary shares each at£2.95. At 31 December 2005 the remaining shareholding in the company held by theEmployee Benefit Trust was 193,645 (2004: nil) ordinary shares and the marketvalue of these shares was £339,847 (2004: £ nil). 17. MOVEMENT ON RESERVES Share Share Premium Shares Merger Own Shares Held Profit & Loss Issued Reserve Capital To be Issued Issued £000 £000 £000 £000 £000 £000GroupAt 1 January2005 214.9 12,808.4 - 437.7 - (3,768.7)Loss for theyear - - - - (7,456.9)Share issue 97.4 25,693.8 - - -Share issuecosts - (1,397.5) - - - -Shares to beissued - - 110.0 - - -Currencytranslationdifference onforeigncurrency netinvestments - - - - - (29.9)Gain on ownshares held - - - (466.1) 466.1Purchase ofown shares - - - (3,479.9) -Proceeds onsale of ownshares - - - - 3,462.0 - ------------------- ------- -------- ------- -------- ------- -------At 31 December2005 312.3 37,104.7 110.0 437.7 (484.0) (10,789.4)------------------- ------- -------- ------- -------- ------- ------- Share Share Premium Shares Merger Own Shares Held Profit & Loss Issued Reserve Capital To be Issued Issued £000 £000 £000 £000 £000 £000CompanyAt 1 January2005 214.9 12,808.4 - - - (455.8)Loss for theyear - - - - - (1,900.3)Share issue 97.4 25,693.8 - - - -Share issuecosts - (1,397.5) - - - -Shares to beissued - - 110.0 - - -Currency translation - - - - - -difference on foreigncurrency netinvestmentsGain on ownshares held - - - - (466.1) 466.1Purchase ofown shares - - - - (3,479.9) -Proceeds onsale of ownshares - - - - 3,462.0 - -------------------- -------- ------- -------- ------- ------- -------At 31 December2005 312.3 37,104.7 110.0 - (484.0) (1,890.0)-------------------- -------- ------- -------- ------- ------- ------- 18. RECONCILIATION OF MOVEMENT IN CONSOLIDATED EQUITY SHAREHOLDERS' FUNDS Year ended Year ended 31 December 31 December 2005 2004 £000 £000Loss for the year (7,456.9) (3,064.3)Shares issued in the year(net of issue costs) 24,393.7 13,023.3Merger reserve adjustment - 437.7Purchase of own shares (3,479.9) -Proceeds on sale of ownshares 3,462.0 -Shares to be issued 110.0 -Foreign exchange reserve (29.9) -Net addition toshareholders' funds 16,999.0 10,396.7Opening equity shareholders'funds /(deficit) 9,692.3 (704.4)---------------------------------- ----------- ------------Closing equity shareholders'funds 26,691.3 9,692.3---------------------------------- ----------- ------------ 19. NON CASH TRANSACTIONS During the year ended 31 December 2005 the Group entered into finance leasearrangements in respect of assets with a total capital value of £nil (2004:£52,700). 20. FINANCIAL INSTRUMENTS The main risks arising from the Group's operations are interest rate risk,liquidity risk, foreign currency translation risk and certain commodity pricerisks. The group does not trade in financial instruments. In the opinion of thedirectors the fair value of the group's financial instruments are not materiallydifferent to the book value. The Group's financial assets predominantly comprise cash which earns interest ata floating rate based on LIBOR. At 31 December 2005 the average interest earnedon the cash balance was 4.48% (2004: - 3.5%). Liquidity Risk The Group seeks to manage financial risk, to ensure sufficient liquidity isavailable to meet foreseeable needs while investing cash assets safely andprofitably. Interest Rate Risk The Group has one mortgage obligation the terms of which include a floatinginterest rate of 1.75% above LIBOR. The capital outstanding at 31 December 2005was £840,000. (2004 : £43,787 at 8%.) Foreign Currency Translation Risk The main functional currency of the Group is sterling. From time to time thecompany enters into supply commitments for the supply of jatropha oil and seeds.All of these contracts are denominated in US Dollars. The approximate value ofthese contracts is $412m (2004: $473m) over 20 years and are to supply jatrophaoil for processing through the group's own refineries. No significant currency risks arise through the consolidation of overseassubsidiaries at 31 December 2005. The directors are actively developing anappropriate means of mitigating the risk of these entities as they become a moresignificant element of the business. The Group cash balances split by currency and shown as a sterling equivalent,converted at Bank of England exchange rates at 31 December are: 2005 2004 £000 £000British Pounds 23,691.3 9,545.1US Dollars 287.8 -Indian Rupees 138.8 -South AfricanRand 35.4 11.1SwazilandLilangeni 30.3 -Euros 64.8 -MalaysianRinggits 30.1 -Ghanaian Cedi 1.9 -Filipino Peso 1.0 6.2---------------- -------------- --------Total 24,281.4 9,562.3 ---------------- -------------- -------- Commodity Price Risks During 2005 the group did not engage in commodity related financial instruments,including hedging. 21. FINANCIAL COMMITMENTS Capital commitments As at 31 December 2005 expenditure contracted for but not provided in thesefinancial statements was £nil. (2004: nil) Purchase commitments From time to time the company enters into supply commitments for the supply ofjatropha oil and seeds as described in the foreign currency translation risksection of note 20. All of these contracts are denominated in US Dollars. 22. RELATED PARTY TRANSACTIONS The Group has a 50:50 joint venture agreement with a joint venture partner,Mohan Breweries and Distilleries Limited relating to D1 Oils Mohan Pvt Limited.The agreement requires Mohan Breweries and Distilleries Limited to lead onplanting and for D1Oils Trading Limited to lead on design and technology. D1Oils Trading Limited did not introduce any working capital into the jointventure during the year. There were no amounts outstanding at 31 December 2005. The Group also has an associate agreement with GroupBio Limited to providesponsorship funding to develop and race a biofuel racing car. During the yearended 31 December 2005 D1 Oils Trading Limited introduced £25,000 (2004: nil) ofshare capital and £65,000 (2004: nil) of sponsorship funding. There were noamounts outstanding at 31 December 2005. Any related party transactions which apply to company directors are shown innote 5 above. During the previous year the group reached an agreement to acquire intellectualproperty rights relating to refineries from Steve Davis, a shareholder in thecompany, for nil value and the group agreed to forego a debt of £149,770 owed toSafety Issues (Fabrication) Limited, a company in which Steve Davis is adirector and shareholder. There were no similar transactions during the currentperiod. 23. STATUTORY CONSOLIDATED PROFIT AND LOSS 18 week period ended 31 December 2004Operating expenses (987.9)------------------------- -----------Operating loss (987.9)------------------------- -----------Bank interest receivable 76.9Bank interest payable (116.6)------------------------- -----------Loss on ordinary activities before (1,027.6)taxation ------------------------- -----------Tax on loss on ordinary activities -------------------------- -----------Retained loss for the financial year (1,027.6)withdrawn from reserves ------------------------- ----------- The profit and loss account above is required by the Companies Act 1985 andcovers the first statutory accounting reference period of D1 Oils plc from itsdate of incorporation on 24 August 2004 to 31 December 2004. Disclosure notes for this period are not presented as the directors do notbelieve they would provide meaningful information to users of the financialstatements. Directors' remuneration for this period is included within the amounts disclosedin Note 5 which presents remuneration for the 52 weeks to 31 December 2004.Amounts for the period 24 August 2004 to 31 December 2004 in respect of salariesand other time related costs can be derived by apportioning the annual amounts. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
NEOS.L