3rd Oct 2005 07:00
Tristel PLC03 October 2005 TRISTEL plc Supplier of liquid chemical sterilising solutions to UK hospitals 2005 Maiden Preliminary Results for the year ended 30 June 2005 Results Highlights: • Turnover up 38% to £3m (2004: £2.18m)• Operating profits up 115% to £0.44m (2004: £0.204m)• To pay a maiden dividend of 0.5p• Basic EPS 0.24p: (2004: 0.77p)• Balance sheet: Total Net assets of £1.565m, £1.2m cash at bank and in hand Operations Highlights: • Floated on AIM 1st June 2005. Successfully raised £1.5m at 37p, valuing Tristel at £8.82m• Product range expanded to include Tristel Generator, an automated chlorine dioxide dosing system to tackle water borne infection. Products include: Instrument Solutions (primarily for flexible endoscopes), Instrument Wipes, Surface, Water and Skin Disinfectants• Core product range of instrument disinfectants being used in 375 hospitals, representing 60% of all UK NHS and Acute and Private Hospitals• Granted a patent for the Tristel Sterilising Wipes, the world's first rapid action sporicidal wipe Commenting, Francisco Soler said: "This has been a notable year for Tristel. I am extremely pleased for ourCompany to have achieved such strong growth in turnover and operating profit,and am happy that we have entered the current financial year with net cashreserves in excess of £1.1m. We believe the optimism with which we view thecurrent and future years is well founded and this is illustrated in the paymentof a maiden dividend". For further information please contact: Tristel plc Binns & Co PR LtdPaul Swinney, Chief Executive Ben KnowlesTel: 01638 721 500Mob: 07798 805 692 Tel: 020 7786 9606Paul Barnes, Finance Director Mob: 07900 346 978Tel: 01638 721500Mob: 07974 016 940 Chairman's statement The year ended 30th June 2005 has been a most notable one for our Company.During the year the Company continued to grow strongly, increasing turnover by38%to £3,009,115 (2004: £2,183,423) and operating profit before exceptionalitems and net interest expense by 115% to £439,852 (2004: £204,670). Wecontinued to expand our product range by completing the development of theTristel Generator, which is an automated chlorine dioxide dosing system. TheGenerator enables Tristel to tackle water-borne infection in hospitals. We also extended the sterilising wipe, which is used for delicate instruments,into a complete decontamination system incorporating a pre-clean and rinse wipe.The system has proven very popular with Ear, Nose and Throat (ENT) departments.Whilst developing new products, and extending the applications for existingones, we have also consolidated our market leadership position in the supply ofsterilizing solutions for endoscopes. The Company has supplied one or more ofits products to approximately 60%of all acute NHS and private sector hospitalsin England, Scotland and Wales and a growing number of primary care trusts(PCTs), community hospitals, GP practices, veterinary practices andmiscellaneous healthcare establishments. We have started to supply NHS Logistics(the health service buying agency) as well as individual hospitals directly. At the end of 2004 the Board considered the strategic and financial options,which would allow and enable the Company to continue its expansion. Werecognised that this must involve our development into an international company,there by exploiting our patented, proprietary technology in overseas markets aswell as our domestic marketplace. The decision was taken to seek admission tothe London Stock Exchange AIM market. I am pleased to report that our flotation on AIM was concluded on June 1st2005,raising £1.5 million before listing expenses. At the fiscal year-end,shareholders 'funds stood at £1,564,840,an increase of £1,718,891 over theprevious period, resulting from the issue of new shares and additions toreserves. Outlook and future prospects we have entered the current financialyear in a strong position with net cash reserves in excess of £1.1 million and awell-established market leadership position in our core domestic market ofendoscope decontamination. We have a team of individuals experienced and skilledin their work. The Company has developed a cohesive portfolio of products which address theprincipal routes of transmission of Hospital Acquired Infection and, tosupplement the existing products, we plan to bring new applications of ourchemistry to market this year. Of particular interest is the Tristel BurstableSachet, which will be a very useful product for hospitals in many overseasmarkets where the standards of decontamination are not currently as advanced asthey are in the United Kingdom. A chlorine dioxide hand rub is also indevelopment. There are new market segments to enter such as the pharmaceuticaland laboratory markets, and, most importantly, new geographical markets. Insummary, we believe that the optimism with which we view the current and futureyears is well founded. On this note, I am pleased to declare our maiden dividend. The Board isproposing the payment of a dividend of 0.5 pence per ordinary share,representing a total payment of £119,184. Francisco A. SolerChairman3 October 2005 Consolidated Profit and Loss Accountfor the period 1 May 2004 to 30 June 2005 2005 2004 Notes £ £ TURNOVER 2 3,009,115 2,183,423 Cost of sales 1,448,048 964,916 ---------- ----------GROSS PROFIT 1,561,067 1,218,507 Administrative expenses 1,121,215 1,013,837 ---------- ----------OPERATING PROFIT 3 439,852 204,670 EXCEPTIONAL ITEMSLoss on sale of subsidiary 6 (22,275) -Employee share option costs (UITF 17 charge) 6 (279,956) - ---------- ---------- 137,621 204,670 Interest receivable and similar income 5,775 3,589 ---------- ---------- 143,396 208,259 Interest payable and similar charges 7 39,200 41,764 ---------- ----------PROFIT ON ORDINARY ACTIVITIESBEFORE TAXATION 104,196 166,495 Tax on profit on ordinary activities 8 65,440 52,815 ---------- ----------PROFIT FOR THE FINANCIAL PERIODAFTER TAXATION 38,756 113,680 Dividends 10 119,184 - ---------- ----------(DEFICIT)/RETAINED PROFIT FOR THE PERIOD FORTHE GROUP (80,428) 113,680 ========== ==========EARNINGS PER SHARE 1Basic 1 0.24p 0.77p ========== ==========Diluted 0.22p 0.77p ========== ========== CONTINUING OPERATIONS The operating profit for the period all arises from continuing operations. TOTAL RECOGNISED GAINS AND LOSSES The group has no recognised gains or losses other than the profits for thecurrent or previous periods. Tristel plc Consolidated Balance Sheet30 June 2005 2005 2004 Notes £ £FIXED ASSETSIntangible assets 12 828,832 377,282Tangible assets 13 83,168 68,160Investments 14 - - ---------- ---------- 912,000 445,442 CURRENT ASSETSStocks 15 224,710 10,600Debtors 16 546,489 414,941Cash at bank and in hand 1,212,112 1 ---------- ---------- 1,983,311 425,542 CREDITORSAmounts falling due within one year 17 1,234,015 668,493 NET CURRENT ASSETS/(LIABILITIES) 749,296 (242,951) ---------- ----------TOTAL ASSETS LESS CURRENT LIABILITIES 1,661,296 202,491 CREDITORSAmounts falling due after more than one year 18 - (315,000) PROVISIONS FOR LIABILITIES AND CHARGES 21 (96,456) (41,542) ---------- ---------- 1,564,840 (154,051) ========== ==========CAPITAL AND RESERVESCalled up share capital 22 238,368 17,518Share premium 23 1,455,980 563,637Merger reserve 23 478,526 -Profit and loss account 23 (608,034) (735,206) ---------- ----------SHAREHOLDERS' FUNDS 27 1,564,840 (154,051) ========== ========== ON BEHALF OF THE BOARD: ...............................................................................P F H Stephens - Director ...............................................................................P M Barnes FCCA - Director Approved by the Board on 30 September 2005 Tristel plc Company Balance Sheet30 June 2005 2005 2004 Notes £ £FIXED ASSETSIntangible assets 12 443,835 -Tangible assets 13 - -Investments 14 465,000 - ---------- ---------- 908,835 -CURRENT ASSETSDebtors 16 63,205 -Cash at bank and in hand 1,212,089 1 ---------- ---------- 1,275,294 1CREDITORSAmounts falling due within one year 17 466,098 - ---------- NET CURRENT ASSETS 809,196 1 ---------- ----------TOTAL ASSETS LESS CURRENT LIABILITIES 1,718,031 1 PROVISIONS FOR LIABILITIES AND CHARGES 21 14,724 - ---------- ---------- 1,703,307 1 ========== ==========CAPITAL AND RESERVESCalled up share capital 22 238,368 1Share premium 23 1,455,980 -Profit and loss account 23 8,959 - ---------- ----------SHAREHOLDERS' FUNDS 27 1,703,307 1 ========== ========== ON BEHALF OF THE BOARD: ...............................................................................P F H Stephens - Director ...............................................................................P M Barnes FCCA - Director Approved by the Board on 30 September 2005 Tristel plc Cash Flow Statementfor the period 1 May 2004 to 30 June 2005 2005 2004 Notes £ £ Net cash inflow from operating activities 1 312,543 232,155 Returns on investments and servicing of finance 2 (39,018) 2,218Capital expenditure 2 (244,006) (275,489)Acquisitions and disposals 2 (1,816) - ---------- ---------- 27,703 (41,116)Financing 2 1,170,268 23,069 ---------- ----------Increase/(Decrease) in cash in the period 1,197,971 (18,047) ========== ========== Reconciliation of net cash flow to movement in net debt 3Increase/(Decrease) in cash in the period 1,197,971 (18,047)Cash outflow from decrease in debt and lease financing 423,714 13,028 ---------- ----------Change in net debt resulting from cash flows 1,621,685 (5,019)New bank loan (20,000) -Bank loan repaid 20,000 - ---------- ----------Movement in net debt in the period 1,621,685 (5,019)Net debt at 1 May (468,411) (433,493) ---------- ----------Net funds/(debt) at 30 June 1,153,274 (438,512) ========== ========== Tristel plc Notes to the Cash Flow Statementfor the period 1 May 2004 to 30 June 2005 1. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2005 2004 £ £ Operating profit 439,852 204,670 Depreciation charges 64,902 52,865 Loss on disposal of fixed assets 1,082 - Increase in stocks (214,110) (1,850) Increase in debtors (190,723) (72,911) Increase in creditors 211,540 49,381 ---------- ---------- Net cash inflow from operating activities 312,543 232,155 ========== ========== 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 2005 2004 £ £ Returns on investments and servicing of finance Interest received 5,775 3,589 Interest paid (44,478) (264) Interest element of hire purchase payments (315) (1,107) ---------- ---------- Net cash (outflow)/inflow for returns on investments and servicing of finance (39,018) 2,218 ========== ========== Capital expenditure Purchase of intangible fixed assets (197,838) (243,809) Purchase of tangible fixed assets (54,195) (31,680) Sale of tangible fixed assets 8,027 - ---------- ---------- Net cash outflow for capital expenditure (244,006) (275,489) ========== ========== Acquisitions and disposals Disposal of subsidiary (1,816) - ---------- ---------- Net cash outflow for acquisitions and disposals (1,816) - ========== ========== Financing New loans in year 20,000 - Loan repayments in year (440,000) - Hire purchase capital repayments in year (3,714) (13,028) Loans written off - 30,506 Directors' loans (7,952) 11,968 Share issues 1,596,575 - Share buyback (75,000) (25,000) Government grant received 80,359 18,623 ---------- ---------- Net cash inflow from financing 1,170,268 23,069 ========== ========== 3. ANALYSIS OF CHANGES IN NET DEBT At 1.5.04 Cash flow At 30.6.05 £ £ £ Net cash: Cash at bank and in hand 1 1,212,111 1,212,112 Bank overdrafts (44,698) (14,140) (58,838) -------- ---------- ---------- (44,697) 1,197,971 1,153,274 -------- ---------- ---------- Debt: Hire purchase (3,714) 3,714 - Debts falling due within one year (105,000) 105,000 - Debts falling due after one year (315,000) 315,000 - -------- ---------- ---------- (423,714) 423,714 - -------- ---------- ---------- Total (468,411) 1,621,685 1,153,274 ======== ========== ========== Tristel plc Notes to the Financial Statementsfor the period 1 May 2004 to 30 June 2005 1. ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the historical cost conventionand are in accordance with applicable accounting standards. Basis of consolidation The group financial statements consolidate the accounts of Tristel plc for the14 months ended 30 June 2005 and of its subsidiary undertakings for the 12months ended 30 June 2005, or until date of disposal as applicable. This isbecause the 2004 accounts for Tristel plc were prepared to 30 April, whilst theaccounts of the subsidiary companies were prepared to 30 June. The accountingyear end of Tristel plc was extended to 30 June in 2005, thus preventing theanomaly from recurring. During the period, the group carried out a corporate restructuring consisting ofthe introduction of a new holding company. Prior to that date the holdingcompany was Emergent Technology Group Inc, a company incorporated in the BritishVirgin Isles. On 16 June 2004 Tristel (Holdings) Limited acquired the entireissued ordinary share capital of Emergent Technology Group Inc in exchange forthe issue of shares to shareholders on a one hundred-for-one basis. On 24 May2005 Tristel (Holdings) Limited was re-registered as a public limited companyand changed its name to Tristel plc. Emergent Technology Group Inc was sold on 28 February 2005. The restructuring represented a change in the identity of the holding companyrather than an acquisition of the business. Consequently, the restructuring hasbeen accounted for using merger accounting principles in accordance withFinancial Reporting Standard 6. Accordingly although Tristel plc did not becomethe parent company of the Group until 16 June 2004, the Group financialinformation is presented as if the companies had always been part of the sameGroup. Balance sheet comparatives are presented on the combined basis. In accordance with sections 131 and 133 of the Companies Act 1985, Tristel plchas taken no account of any premium on the shares issued to acquire EmergentTechnology Group Inc and has recorded the cost of the investment at the nominalvalue of the shares issued. The resulting difference arising on consolidationhas been credited to a merger reserve. Turnover Turnover is the total amount receivable by the group in the ordinary course ofbusiness with outside customers for goods supplied as a principal and forservices provided, excluding value added tax and trade discounts. Productrevenue is recognised upon shipment of product and service income is recognisedupon the relating services having been completed or over the term of thecontract where relevant. Intangible fixed assets - patents and licences Patents and licences are included at cost and depreciated in equal annualinstalments over a period of ten years which is their estimated useful economiclife. Provision is made for any impairment. Intangible fixed assets - research and development Research expenditure is written off as incurred. Development expenditure isalso written off, except where the directors are satisfied as to the technical,commercial and financial feasibility of individual projects. In such cases, theidentifiable expenditure is deferred and amortised over the period during whichthe group is expected to benefit. Provision is made for any impairment. 1. ACCOUNTING POLICIES - continued Tangible fixed assets Depreciation is provided at the following annual rates in order to write offeach asset over its estimated useful life or, if held under a finance lease,over the lease term, whichever is the shorter. Improvements to property - Straight line over the lease term Plant and machinery - 33% on cost Fixtures and fittings - 25% on cost and 20% on cost Motor vehicles - 25% on cost Stocks Stocks are stated at the lower of cost and net realisable value. Cost includesmaterials and direct labour. Net realisable value is based on estimated sellingprice, less further costs expected to be incurred to completion and disposal.Provision is made for obsolete, slow-moving or defective items whereappropriate. Deferred tax Deferred tax is provided in full on timing differences, which result in anobligation at the balance sheet date to pay more tax, or a right to pay lesstax, at a future date, at rates expected to apply when they crystallise based oncurrent tax rates and law. Timing differences arise from the inclusion of itemsof income and expenditure in taxation computations in periods different fromthose in which they are included in financial statements. Deferred tax assetsare recognised to the extent that it is regarded as more likely than not thatthey will be recovered. Deferred tax assets and liabilities are not discounted. Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange at thedate of the transaction. Monetary assets and liabilities denominated in foreigncurrencies at the balance sheet date are reported at the rates of exchangeprevailing at that date. Hire purchase and leasing commitments Assets obtained under hire purchase contracts or finance leases are capitalisedin the balance sheet. Those held under hire purchase contracts are depreciatedover their estimated useful lives. Those held under finance leases aredepreciated over their estimated useful lives or the lease term, whichever isthe shorter. The interest element of these obligations is charged to the profit and lossaccount over the relevant period. The capital element of the future payments istreated as a liability. Rentals paid under operating leases are charged to the profit and loss accounton a straight line basis. Pensions The group operates a defined contribution pension scheme. Contributions payablefor the year are charged in the profit and loss account. Differences betweencontributions payable in the period and contributions actually paid are shown aseither accruals or prepayments in the balance sheet. Government grants Government grants relating to fixed assets are treated as deferred income andreleased to the profit and loss account over the expected useful lives of theassets concerned. Other grants are credited to the profit and loss account asthe related expenditure is incurred. Share option related charges In accordance with UITF 17, the group recognises a charge on employee shareoptions issued at below fair value, equal to the differential between the fairvalue and exercise price of the option. 2. TURNOVER The turnover and profit before taxation are attributable to the one principalactivity of the group. An analysis of turnover by geographical market is given below: 2005 2004 £ £ United Kingdom 2,970,682 2,147,813 Rest of World 38,433 35,610 ---------- ---------- 3,009,115 2,183,423 ========== ========== 3. OPERATING PROFIT The operating profit is stated after charging: 2005 2004 £ £ Depreciation - owned assets 28,024 10,837 - assets on hire purchase contracts 2,054 7,208 Loss on disposal of fixed assets 1,082 - Patents and licences amortisation 34,824 34,820 Auditors remuneration - audit 7,500 7,760 - other services 3,090 2,500 Operating lease rentals - land and buildings 18,026 18,715 - vehicles and equipment 19,964 21,719 Research and development costs expensed 109,970 93,356 ========== ========== In addition to the auditors remuneration disclosed above, share issue costs of£49,700 (2004:£nil) have been debited to the share premium account in respect ofwork completed by the auditors relating to the Company's admission to AIM. 4. STAFF COSTS 2005 2004 £ £ Wages and salaries 405,636 308,584 Social security costs 43,623 37,371 Other pension costs 18,354 17,327 ---------- ---------- 467,613 363,282 ========== ========== The average monthly number of employees (including executive directors)during the period was as follows: 2005 2004 Directors 1 1 Sales and marketing 6 6 Administration 3 2 ---- ----- 10 9 ==== ===== In addition to the staff costs disclosed above, there are costs of £279,956included as exceptional items comprising a UITF 17 charge of £207,600 andrelated employer's National Insurance contributions of £72,356 associated withemployee share options granted during the period. 5. DIRECTORS 2005 2004 £ £ Directors' emoluments 150,788 107,884 Aggregate gains made by directors on the exercise of share options 759,687 - Directors' pension contributions to money purchase schemes 7,000 8,750 ========== ========== The number of directors to whom retirement benefits were accruing was asfollows: Money purchase schemes 1 1 ========== ========== Three directors exercised share options during the period (2004 - none). 6. EXCEPTIONAL ITEMS In accordance with UITF 17, an amount £207,600 has been charged to the profitand loss account in respect of employee share options granted and exercisedduring the period, which has then been credited to reserves as shown at note 23. In addition, the group incurred employer's National Insurance costs of £72,356in respect of the share options. These costs have been treated as exceptional asthe options would not have vested had the company not been admitted to AIM. The group disposed of a subsidiary company in February 2005, resulting in a losson consolidation of £22,275. 7. INTEREST PAYABLE AND SIMILAR CHARGES 2005 2004 £ £ Other interest - 264 Loan interest 38,849 40,393 Interest on late paid tax 36 - Hire purchase 315 1,107 ---------- ---------- 39,200 41,764 ========== ========== 8. TAXATION Analysis of the tax charge The tax charge on the profit on ordinary activities for the period was asfollows: 2005 2004 £ £ Current tax: UK corporation tax 10,526 - ---------- ---------- Deferred tax: Advance capital allowances 83,420 46,428 Relief for trading losses - 9,925 Deferred grant income (28,506) (3,538) ---------- ---------- Total deferred tax 54,914 52,815 Tax on profit on ordinary activities 65,440 52,815 ========== ========== Factors affecting the tax charge The tax assessed for the period is lower than the standard rate of corporationtax in the UK. The difference is explained below: 2005 2004 £ £ Profit on ordinary activities before tax 104,196 166,495 ========== ========== Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% (2004 - 19%) 31,259 31,634 Effects of: Expenses not deductible for tax purposes 18,961 25,167 Utilisation of tax losses brought forward - (9,925) Capital allowances in excess of depreciation (54,970) (46,429) Grant income taxed on receipt 24,107 3,538 Effect of marginal and starting rate tax bands (6,141) (411) Enhanced relief on qualifying scientific research expenditure (2,690) (3,574) ---------- ---------- Current tax charge 10,526 - ========== ========== 9. PROFIT OF PARENT COMPANY As permitted by Section 230 of the Companies Act 1985, the profit and lossaccount of the parent company is not presented as part of these financialstatements. The parent company's profit for the financial year was £128,143(2004 - £nil). 10. DIVIDENDS 2005 2004 £ £ Equity shares: Final dividend at 0.5p per share 119,184 - ========== ========== 11. EARNINGS PER ORDINARY SHARE The calculations of earnings per share are based on the following profits andnumbers of shares: 2005 2004 £ £ Profit for the financial period after taxation 38,756 113,680 ========== ========== Weighted average number of ordinary shares for basicearnings per share 16,050,830 14,718,555 ========== ========== Weighted average number of ordinary shares for diluted earnings per share 18,002,893 14,722,593 ========== ========== The calculation of the weighted average number of shares is based on the 12month period ended 30 June. The weighed average number of shares for both periods disclosed above takesaccount of the four for one bonus issue of shares which took place on 23 May2005. 12. INTANGIBLE FIXED ASSETS Group Patents and Development licences costs Totals £ £ £ COST At 1 May 2004 353,819 243,809 597,628 Additions (net of intra-group transfers) 345,186 141,188 486,374 -------- -------- ---------- At 30 June 2005 699,005 384,997 1,084,002 -------- -------- ---------- AMORTISATION At 1 May 2004 220,346 - 220,346 Amortisation for period 34,824 - 34,824 -------- -------- ---------- At 30 June 2005 255,170 - 255,170 -------- -------- ---------- NET BOOK VALUE At 30 June 2005 443,835 384,997 828,832 ======== ======== ========== At 30 April 2004 133,473 243,809 377,282 ======== ======== ========== Company Patents and licences £ COST Additions 455,446 ---------- At 30 June 2005 455,446 ---------- AMORTISATION Amortisation for period 11,611 ---------- At 30 June 2005 11,611 ---------- NET BOOK VALUE At 30 June 2005 443,835 ========== 13. TANGIBLE FIXED ASSETS Group Leasehold Plant and Fixtures & Motor improvements machinery Fittings vehicles Totals £ £ £ £ £ COST At 1 May 2004 13,869 23,460 52,292 28,834 118,455 Additions 2,336 - 16,651 35,208 54,195 Disposals - - (5,244) (16,750) (21,994) ------- ------- ------- ------- -------- At 30 June 2005 16,205 23,460 63,699 47,292 150,656 ------- ------- ------- ------- -------- DEPRECIATION At 1 May 2004 - 14,506 22,825 12,964 50,295 Charge for period 3,301 3,070 12,312 11,395 30,078 Eliminated on disposal - - (4,161) (8,724) (12,885) ------- ------- ------- ------- -------- At 30 June 2005 3,301 17,576 30,976 15,635 67,488 ------- ------- ------- ------- -------- NET BOOK VALUE At 30 June 2005 12,904 5,884 32,723 31,657 83,168 ======= ======= ======= ======= ======== At 30 April 2004 13,869 8,954 29,467 15,870 68,160 ======= ======= ======= ======= ======== Fixed assets, included in the above, which are held under hire purchasecontracts are as follows: Motor vehicles £ COST At 1 May 2004 28,834 Disposals (16,750) Transfer to ownership (12,084) -------- At 30 June 2005 - -------- DEPRECIATION At 1 May 2004 12,964 Charge for period 2,054 Eliminated on disposal (8,724) Transfer to ownership (6,294) -------- At 30 June 2005 - -------- NET BOOK VALUE At 30 June 2005 - ======== At 30 April 2004 15,870 ======== 13. TANGIBLE FIXED ASSETS - continued Company There are no tangible fixed assets held by the Company. 14. FIXED ASSET INVESTMENTS Company Shares in group undertakings £ COST AND NET BOOK VALUE Additions and at 30 June 2005 465,000 ======== The company's investments at the balance sheet date in the share capital ofcompanies include the following: Subsidiary - Tristel Solutions LimitedCountry of incorporation: England and WalesNature of business: Supply of infection control products % Class of shares: holding Ordinary 100.00 30.6.05 30.6.04 £ £ Aggregate capital and reserves 326,532 165,210 (Loss)/Profit for the year (46,278) 227,288 ======== ======== Sale of subsidiary undertaking - Emergent Technology Group Inc. On 28 February 2005 the group sold its 100% interest in the ordinary sharecapital of Emergent Technology Group Inc, a company incorporated in the BritishVirgin Islands. The loss of Emergent Technology Group Inc up to the date ofdisposal was £20,835, and the loss for its last financial year was £113,606. Net assets disposed of and the related sale proceeds were as follows: £ Current assets 62,216Loan debtor - due from Tristel plc 367,500Creditors (12,313)Loan creditor - due from Windsor International Corporation (367,500) -------- 49,903Loss on sale (22,275) --------Sale proceeds (to be satisfied in full by cash) 27,628 ======== Net cash inflows in respect of the sale comprised:Cash consideration (included within other debtors at 30 June 2005) -Cash at bank and in hand sold (1,816) -------- (1,816) 15. STOCKS Group Company 2005 2004 2005 2004 £ £ £ £ Raw materials 24,969 - - - Work-in-progress 67,233 - - - Finished goods 132,508 10,600 - - -------- ------- ------ ------ 224,710 10,600 - - ======== ======= ====== ====== 16. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Company 2005 2004 2005 2004 £ £ £ £ Trade debtors 459,411 310,669 - - Other debtors 29,133 40,818 27,628 - Directors' current accounts - 45,985 - - VAT - - 32,509 - Prepayments and accrued income 57,945 17,469 3,068 - -------- ------- ------ ------ 546,489 414,941 63,205 - ======== ======= ====== ====== 17. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Company 2005 2004 2005 2004 £ £ £ £ Bank loans and overdrafts (see note 19) 58,838 44,698 - - Other loans (see note 18) - 105,000 - - Hire purchase contracts (see note 20) - 3,714 - - Trade creditors 358,867 253,247 - - Amounts owed to group undertakings - - 98,570 - Corporation tax 10,526 - 10,526 - Social security and other taxes 100,557 60,248 1,838 - Proposed dividends 119,184 - 119,184 - Other creditors 238,630 564 235,980 - Directors' current accounts 6,063 - - - Accruals & deferred income 341,350 201,022 - - --------- ------- ------ ------ 1,234,015 668,493 466,098 - ========= ======= ====== ====== 18. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Group Company 2005 2004 2005 2004 £ £ £ £ Other loans (see note 19) - 315,000 - - ========= ======= ====== ====== 19. LOANS An analysis of the maturity of loans is given below: Group Company 2005 2004 2005 2004 £ £ £ £ Amounts falling due within one year or on demand: Bank overdrafts 58,838 44,698 - - Other loans - 105,000 - - --------- ------- ------ ------ 58,838 149,698 - - ========= ======= ====== ====== Amounts falling due between one and two years: Other loans - 105,000 - - ========= ======= ====== ====== Amounts falling due between two and five years: Other loans - 210,000 - - ========= ======= ====== ====== 20. OBLIGATIONS UNDER HIRE PURCHASE CONTRACTS Group Company 2005 2004 2005 2004 £ £ £ £ Within one year - 3,714 - - ========= ======= ====== ====== 21. PROVISION FOR LIABILITIES AND CHARGES Group Company 2005 2004 2005 2004 £ £ £ £ Deferred tax 96,456 41,542 14,724 - ========= ======= ====== ====== Deferred tax Group Company 2005 2004 2005 2004 £ £ £ £ Balance at 1 May 2004 41,542 11,273 14,274 - Accelerated capital allowances 54,970 46,429 - - Deferred grant income (24,107) (3,539) - - Relief for brought forward trading losses - 9,925 - - Increase in tax rate 24,051 - - - --------- ------- ------ ------ 96,456 41,542 14,724 - ========= ======= ====== ====== 22. CALLED UP SHARE CAPITAL Group Authorised: Number: Class: Nominal 2005 2004 value: £ $ 60,000,000 Ordinary 1p (2004: 50,000) (2004: $1) 600,000 50,000 ======== ======= Allotted, issued and fully paid: Number: Class: Nominal 2005 2004 value: £ £ 23,836,820 Ordinary 1p (2004: 27,628) (2004: $1) 238,368 17,518 ======== ======= Company Authorised: Number: Class: Nominal 2005 2004 value: £ £ 60,000,000 Ordinary 1p 600,000 1,000 ======== ======= Allotted, issued and fully paid: Number: Class: Nominal 2005 2004 value: £ £ 23,836,820 Ordinary 1p 238,368 1 ======== ======= The group share information above relates to Emergent Technology Group Inc as at30 April 2004 and the Company as at 30 June 2005. On incorporation in April 2003, the authorised share capital of the Company was£1,000 divided into 1,000 ordinary shares of £1 each. By an ordinary resolution passed on 15 June 2004: (i) each of the 1,000 ordinary shares of £1 were subdividing into 100 ordinaryshares of 1p each; (ii) the capital of the Company was increased to £40,280 divided into 4,028,000ordinary shares of 1p each; (iii) the 100 ordinary shares then in issue and 3,677,900 of the unissuedordinary shares were all redesignated as A ordinary shares and 350,000 of theunissued ordinary shares were redesignated as B ordinary shares. On 16 June 2004 Tristel plc acquired the entire issued ordinary share capital ofEmergent Technology Group Inc in exchange for the issue of shares toshareholders on a one hundred-for-one basis. This resulted in the issued sharecapital being 2,762,816. Immediately prior to the share for share exchange the issued share capital ofEmergent Technology Group Inc comprised 27,628.16 ordinary bearer shares of $1each. 22. CALLED UP SHARE CAPITAL - continued Following the Group reorganisation, the Company issued a further 276,282 Aordinary shares of 1p each at £0.6153 per share at a total premium of £167,240in order to provide increased working capital for the Group. On 3 September 2004 the Company issued a further 27,628 A ordinary shares for£0.6153 per share resulting in a total premium of £16,724. On 29 April 2005, 30,000 A ordinary shares were issued and on 23 May 2005 74,200A ordinary shares were issued following the exercise of share options by two ofthe directors. On 23 May 2005 there was a bonus issue whereby four A ordinary shares for everyshare held was issued. The result was an issue of 12,683,704 A ordinary shares. By ordinary and special resolutions passed on 24 May 2005, the authorised sharecapital of the Company was increased to £600,000 divided into 60,000,000 Aordinary shares and the A ordinary and B ordinary shares were redesignated atordinary shares with effect from admission of the ordinary shares to AIM. On 27 May 2005, 760,876 A ordinary shares were issued in consideration of theassignment of certain patents and other intellectual property. On 31 May 2005, 3,167,260 A ordinary shares were issued following the exerciseof share options by certain employees and two of the directors. On 1 June 2005, 4,054,054 ordinary shares were issued when the Company wasadmitted to AIM. 23. RESERVES Group Profit and loss Share Merger account premium reserve Totals £ £ £ £ At 1 May 2004 (735,206) 563,637 - (171,569) Deficit for the period (80,428) - - (80,428) Bonus share issue - (126,837) - (126,837) Purchase of own shares - (74,227) - (74,227) Cash share issue - 2,036,407 - 2,036,407 Share exchange - (489,410) 478,526 (10,884) Share issue costs - (453,590) - (453,590) Employee share option costs (UITF 17 charge) 207,600 - - 207,600 --------- ---------- -------- ---------- At 30 June 2005 (608,034) 1,455,980 478,526 1,326,472 ========= ========== ======== ========== 23. RESERVES - continued Company Profit and loss Share account premium Totals £ £ £ Retained profit for the period 8,959 - 8,959 Bonus share issue - (126,837) (126,837) Cash share issue - 2,036,407 2,036,407 Share issue costs - (453,590) (453,590) --------- --------- --------- At 30 June 2005 8,959 1,455,980 1,464,939 ========= ========= ========= 24. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS The group's financial instruments include cash, debtors and creditors, whicharise in the normal course of business. The group's financial liabilities inthe period have comprised a bank overdraft, a bank loan, obligations under hirepurchase contracts, a shareholder loan and a loan with Emergent Technology GroupInc (which at 30 June 2005 is no longer part of the group). It is, and has beenthroughout the period under review, the group's policy that no speculativetrading in financial instruments shall be undertaken. The main risks arising from the group's financial instruments are interest raterisk and liquidity risk. This note deals with financial assets and financial liabilities as defined inFinancial Reporting Standard 13 "Derivatives and other financial instruments:Disclosures" ("FRS 13"). Fixed assets such as investments in subsidiarycompanies are excluded from the scope of these disclosures. As permitted by FRS 13, short term debtors and creditors have also been excludedfrom the disclosures, other than the currency disclosures. Interest rate risk and liquidity risk The group has no financial assets other than cash deposits at bank of £1,212,112(2004: £1) which are part of the financing arrangements of the group. The cashdeposits comprise amounts placed on investment accounts to which the group hasinstant access. The group seeks to maximise interest receipts within theseparameters. Interest receipts are cash on deposits at the prevailing rate. The group's policy throughout the periods presented has been to minimise therisk by placing funds in low risk cash but to also maximise the return on fundsplaced on deposit. 24. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS - continued Interest rate profile All the group's cash deposits are subject to a floating interest rate which islinked to the UK bank base rate. The interest rate profile of the group's financial liabilities are as follows: Fixed Floating rate rate Total £ £ £2005Overdrafts - 58,838 58,838 ======= ======= ======== 2004Overdrafts 44,697 44,697Shareholder loan 420,000 - 420,000Hire purchase contracts 3,714 - 3,714 ------- ------- -------- 423,714 44,697 468,411 ======= ======= ======== The interest rate on floating rate financial liabilities is linked to LIBOR.Further analysis of the fixed interest rate profile is as follows: 2005 2004 Weighted Weighted Weighted Weighted average average average average interest fixed rate interest fixed rate rate period rate period Borrowings 8 % 4 years 10 % 6 years Borrowing facilities The group had no undrawn committed borrowing facilities at 30 June 2005 or 30April 2004. Fair values In the opinion of the directors there was no significant difference between thebook values and the fair values of the group's financial assets and liabilitiesat 30 April 2004 and 30 June 2005. Market price risk The principal market price risk comprises interest rate exposure. The groupfunds are invested in cash deposits with the objective of maintaining a balancebetween accessibility of funds and competitive rates of return. Liquidity risk The group's policy throughout the period regarding liquidity has been tomaximise the return on funds placed on deposit but to minimise the associatedrisk by placing funds in low risk cash deposits. 25. TRANSACTIONS WITH DIRECTORS The following loans to/(from) directors subsisted during the period ended 30June 2005: £P C SwinneyBalance outstanding at start of period 45,985Balance outstanding at end of period (6,062)Maximum balance outstanding during period 46,025 ======= P C ClarkeBalance outstanding at start of period (412)Balance outstanding at end of period -Maximum balance outstanding during period - ======= The group has charged interest on overdrawn loans at a commercial rate. The balance at start of period for P C Swinney of £45,985 as shown abovecomprises £60,000 owed to Emergent Technology Group Inc., and £14,015 owed byTristel Solutions Limited. In June 2004, £30,506 of a loan advanced to P C Swinney was written off. In October 2004 P C Swinney purchased a car from the group for consideration of£8,027, which was the fair value of the car at that time. 26. RELATED PARTY DISCLOSURES Sale of Emergent Technology Group Inc On 28 February 2005, the entire share capital of Emergent Technology Group Incwas sold to Windsor International Corporation, a shareholder and a companycontrolled by F A Soler, a director of the Company, for a consideration of£27,628. Transactions between the group and Bruce Green Under the terms of a technology licence agreement between the group and BruceGreen, a shareholder in the Company, royalties of £120,535 (2004: £89,413) werepaid to Mr Green during the period ended 30 June 2005. Included in creditors at 30 June 2005 is accrued royalties payable to Mr Greenof £20,941 (2004: £16,331). On 3 September 2004, 27,628 A ordinary shares in the Company were issued toBruce Green in consideration for fees waived in respect of the technologylicence agreement. The shares were issued at a price of £0.6153. On 27 May 2005, the Company issued 4% of the A ordinary shares in issue to BruceGreen in exchange for assignment of certain patents. Transactions between the group and Windsor International Corporation A loan was advanced (initially in December 1997) from Windsor InternationalCorporation, a company controlled by Francisco Soler, a director of Tristel plc,to Emergent Technology Group Inc. On 8 March 2004, by way of a formal loanagreement, it was agreed that £29,898 of additional interest be charged to thegroup for the period 31 May 2003 to 29 February 2004. From 8 March 2004, theinterest rate was 8% per annum. The loan balance was repayable from 8 March2004 in sixteen quarterly instalments of £26,250 which commenced on 28 September2004. However, the loan has been repaid in full in June 2005. 27. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Group 2005 2004 £ £ Profit for the financial period 38,756 113,680 Dividends (119,184) - --------- --------- (80,428) 113,680 New share capital subscribed 1,666,719 - Share related charges (UITF 17) 207,600 - Purchase of own shares (75,000) (25,000) --------- --------- Net addition to shareholders' funds 1,718,891 88,680 Opening shareholders' funds (154,051) (242,731) --------- --------- Closing shareholders' funds 1,564,840 (154,051) ========= ========= Equity interests 1,564,840 (154,051) ========= ========= Company 2005 2004 £ £ Profit for the financial period 128,143 - Dividends (119,184) - --------- --------- 8,959 - New share capital subscribed 1,694,347 - --------- --------- Net addition to shareholders' funds 1,703,306 - Opening shareholders' funds 1 1 --------- --------- Closing shareholders' funds 1,703,307 1 ========= ========= Equity interests 1,703,307 1 ========= ========= Tristel plc Notice of Annual General Meeting Notice is hereby given that the first Annual General Meeting of Tristel plc willbe held at Triton Securities, 1st Floor, The Chambers, Chelsea Harbour, LondonSW10 0XG on 30 September 2005 for the following purposes: ORDINARY BUSINESS 1. To receive and adopt the Directors' Report and Audited FinancialStatements for the period ended 30 June 2005. 2. To re-appoint Hedges Candler as auditors of the company and to authorisethe Directors to fix their remuneration. SPECIAL BUSINESS(if applicable) By Order of the Board Registered Office Lynx Business Park Fordham Road SnailwellP M Barnes FCCA CambridgeshireSecretary CB8 7NY Tristel plc Explanations to Notice of Annual General Meeting The notice of the Annual General Meeting to be held on 30 September 2005 is setout on page 30. The following notes provide an explanation as to why theresolutions set out in the notice are to be put to shareholders. RESOLUTION 1 - ADOPTION OF ACCOUNTS English company law requires the Directors to present the accounts to ageneral meeting of the shareholders. RESOLUTION 2 - AUDITORS By this resolution, the company's auditors, Hedges Chandler, seek re-appointmentand the Directors are seeking shareholder approval to determine the amount oftheir fees. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Tristel