1st Oct 2007 07:02
Environmental Recycling Tech. PLC01 October 2007 For Immediate Release: 7am 1st October 2007 Environmental Recycling Technologies plc (formerly 3DM Worldwide plc) Interim Results for the six months ended 30 June 2007 Environmental Recycling Technologies plc ("ERT" or "the Company") (AIM: ENRT),which has developed and is exploiting the patented rights to the PowderImpression Moulding ("PIM") process capable of converting mixed waste plasticsinto commercially viable products, announces its interim results for the sixmonths ended 30 June 2007. Highlights In period: • ERT takes lead role in government funded £1.2million project with Tesco and Bovis Lend Lease; • 2 licences granted in Europe; • Projects initiated in the USA for military vehicle parts and river barge covers; • Eco Sheet wins Chartered Institute of Building Innovation Award; • Consolidation post sale of Bedwas House facility significantly reduces overhead; • Collaboration agreement signed with Arup to provide technical support across the globe; • Turnover £25,000 (1H 2006: £ 140,000, full year 2006 £319,000); and • Operating loss £1.35 million (1H 2006: £1.42 million, full year 2006 £2.62 million). Post period: • The Company changes name to one which better reflects the business of the Company; • £2.8 million raised to repay debt; • Mediwall project initiated; and • Previously announced projects continue to progress satisfactorily. From 1 January 2007 the Group has been required to prepare its consolidatedfinancial statements in accordance with International Financial ReportingStandards (IFRS). Comparative information has been restated in accordance withthe transitional rules governing the change from UK Generally AcceptedAccounting Practice (UK GAAP) to IFRS and a full reconciliation of the changesimpacting the comparative figures has been included in note 4 to thisannouncement. Operational Review Following the sale of the Bedwas House facility the Company has consolidatedoperations and returned to the original business model of licensing the PIMtechnology. This has allowed the business to significantly reduce ongoingoverheads while still offering clients demonstrations, product development,sample manufacture, mould development and supply of manufacturing equipmentthrough our technical partners. The ongoing relationship with Environmental Polymer Technologies Ltd ("EPT") andthe signing of a collaboration agreement with Arup provides ERT with the abilityto deliver projects on behalf of clients without carrying expensive overheads. Future Strategy The re-focusing of the business culminated with the EGM held in August of thisyear authorising the change of the Company's name to Environmental RecyclingTechnologies plc. This change was primarily to better reflect the commercialactivity of the Company. ERT will complete the re-branding of the business in the coming weeks and willfocus solely on the commercial exploitation of the PIM process. The Companywill target the European plastics recycling market and will continue to seekMaster Licence holders for territories outside of Europe. The Master Licenseeswill have the right to sub-licence the PIM process within a defined territoryand, through their local knowledge and resources, accelerate the commercialdeployment of the technology. The Company intends to dispose of all assets which are unrelated to the PIMprocess and the recycling of polymers. The Company intends to build on its existing pipeline such as the DTI fundedproject signed earlier this year led by ERT in conjunction with Tesco and BovisLend Lease. ERT is actively seeking similar "closed loop" recyclingopportunities, i.e. where waste plastics generated by large companies arerecycled into products for sale back to the same companies providing a trulysustainable range of recyclable products. Current Trading In addition to the licences signed with RJ Plastics Ltd and 2K Manufaturing Ltdin the first half of this year, a further licence has been signed with Eko-TekProducts Ltd as well as a £265,000 product development project undertaken withMediwall Ltd. This is a fixed price contract subject to successfully hittingpredetermined milestones which is due to be finished by January 2008. The negotiations with Express Plastics and Recycling over the UK rights to theaward winning Eco Sheet continue to move forward albeit slower than anticipated. ERT is currently in detailed technical discussions with a company over thedevelopment of specialist materials and parts for the energy industry as well asthe UK division of a major multi national supplier to the building trade. The recent fund raising activity, generating £2.8 million, has allowed theCompany to restructure the debt within the business and has put ERT on a strongfooting to commercially exploit the PIM process. Projects currently underway are progressing satisfactorily. The Board remainsconfident of further commercial announcements in the months ahead. Niall Mackay Chief Executive Office Financial Review Results Turnover for the six months to 30 June 2007 was £25,000 (H1, 2006: £140,000).The consolidated net operating loss was £1.35 million compared to losses of£1.42 million in 2006. Consolidated losses before tax were £1.91 million (H1,2006 £2.65 million). Dividends and loss per share No dividend payment is proposed. The loss per share was 1.51 pence compared to3.84 pence in 2006. Trading Turnover included revenue for pre-production work and the release of licenceincome from deferred income. Administration expenses for continuing operations for the period were £1.36million compared to £1.63 million in the same period in 2006 and include inaddition to normal running expenses, corporate finance costs, legal costsassociated with the on-going intellectual property rights and increasedprovision for depreciation for the US plant and machinery. The reduction in general overheads compared to the previous period is expectedto continue into the second half through the tight cost control that is beingexercised. Exceptional finance costs During the IFRS conversion project, a number of warrants attaching to loans wereidentified which had not been previously accounted for. This has resulted inadditional exceptional finance costs of £0.44 million (31 December 2006 £0.57million) being charged to the income statement. The detailed adjustments to theaccounts are set out in note 4. Financing During the period, Yorkville Advisors L.L.C. ("Yorkville"), formerly CornellCapital Partners L.P. converted a further £1.78 million into equity reducing theloans outstanding to £2.68 million. Since 30 June 2007, Yorkville have converteda further £1.07 million. In total Yorkville has converted £4.64 million at anaverage price of 5.66p per share. The placing that was authorised at the EGM on23 August 2007 has raised £2.8 million and provided the company with the abilityto repay the Yorkville loan and leave a small balance to fund the ongoingbusiness. The Standby Equity Distribution Agreement (SEDA) with Yorkville to the value of£5 million is due to expire in September 2008. No draw down has been madeagainst this facility. David Shepley-Cuthbert Finance Director INDEPENDENT REVIEW REPORT TO Environmental Recycling Technologies plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the Group Income Statement,the Group Balance Sheet, the Group Statement of Changes in Equity, GroupCashflow Statement and related notes. We have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. Our report has been prepared in accordance with the terms of our engagement toassist the company in meeting the requirements of rules of the London StockExchange for companies trading securities on the Alternative Investment Marketand for no other purpose. No person is entitled to rely on this report unlesssuch a person is a person entitled to rely upon this report by virtue of and forthe purpose of our terms of engagement or has been expressly authorised to do soby our prior written consent. Save as above, we do not accept responsibilityfor this report to any other person or for any other purpose and we herebyexpressly disclaim any and all such liability. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the rules ofthe London Stock Exchange for companies trading securities on the AlternativeInvestment Market which require that the half-yearly report be presented andprepared in a form consistent with that which will be adopted in the company'sannual accounts having regard to the accounting standards applicable to suchannual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. BDO STOY HAYWARD LLP Chartered Accountants Birmingham 28 September 2007 Interim Accounts for the Six Months ended 30 June 2007 (unaudited) The financial information contained within these accounts has been prepared bythe Directors who accept responsibility for the financial information presentedbelow and confirm that it has been properly presented in accordance withapplicable law. The interim accounts have been prepared on the basis of theaccounting policies set out below. The financial information covers the sixmonths ended 30 June 2007. Group Income Statement (unaudited) 6 months ended Year ended 30-Jun-07 30-Jun-06 31-Dec-06 £'000 £'000 £'000Continuing operationsRevenue 25 140 319Cost of sales -11 - -Gross profit 14 140 319 Administrative expenses Exceptional (note 2) - - -1,012 Other -1,362 -1,628 -2,070Total administrative expenses -1,362 -1,628 -3,082Other operating income - 72 144Loss on ordinary activities before interest and finance -1,348 -1,416 -2,619 Finance income - 1 4Finance cost -123 -252 -477Exceptional finance costs (note 4) -437 -166 -571Total finance costs -560 -418 -1,048Loss for the period from continuing -1,908 -1,833 -3,663operations and before taxTax on loss on ordinary activities - - -Loss for the period -1,908 -1,833 -3,663Discontinued operationsLoss from discontinued operations - -813 -4,829 -813 -4,829Loss attributable to equity shareholders -1,908 -2,646 -8,492Loss per shareBasic and diluted loss per share (1.51p) (3.84p) (10.91p)Basic and diluted loss per share on (1.51p) (2.65p) (4.70p)continuing operationsBasic and diluted loss per on - (1.18p) (6.20p)discontinued operations Group Balance Sheet (unaudited) 30-Jun-07 30-Jun-06 31-Dec-06 £'000 £'000 £'000Non-current assets Intangible assets 12,062 12,178 12,474 Property,plant & equipment 415 4,864 544 Available for sale investments 97 335 97 12,574 17,377 13,115Current assets Inventories - 15 - Trade and other receivables Under one year 222 2,177 374 Over one year 585 - 599 Cash and cash equivalents - 1,401 55 807 3,593 1,028 Total assets 13,381 20,970 14,143 Current liabilities Trade and other payables -1,217 -1,111 -1,316 Income tax liabilities -35 - -11 Short-term provisions Current portion of long-term borrowings -3,565 -3,163 -2,333 Bank overdrafts and short-term borrowings -31 -868 -887Total current liabilities -4,848 -5,142 -4,547 Non-current liabilities Long-term borrowings - -4,202 -1,708 Other creditors - - -Total non-current liabilities - -4,202 -1,708 Total liabilities -4,848 -9,344 -6,255 Net assets 8,533 11,626 7,888 EquityShare capital 3,924 1,865 2,656Share premium 33,520 31,248 32,213Warrant reserve 1,270 2,042 1,321Equity reserve 67 11 38Retained earnings -30,248 -23,540 -28,340Total equity 8,533 11,626 7,888 Group Statement of Changes in Shareholders' Equity (unaudited) Share Share Warrant Equity Retained Total Capital Premium Reserve Reserve earnings £000's £000's £000's £000's £000's £000's6 months ended 30 June 2007Balance at 1 January 2007 2,656 32,213 1,321 38 -28,340 7,888Loss for period - - - - -1,908 -1,908Total recognised income and - - - - -1,908 -1,908expense for the period Issue of share capital 1,268 1,307 - - - 2,575Movement on warrant reserve - - -51 29 - -22Balance at 30 June 2007 3,924 33,520 1,270 67 -30,248 8,533 6 months ended 30 June 2006Balance at 1 January 2006 1,670 29,992 265 - -19,850 12,077Loss for period - - - - -2,646 -2,646Total recognised income and - - - - -2,646 -2,646expense for the periodIssue of share capital 195 1,256 - - - 1,451Movement on warrant reserve - - 1,777 11 -1,044 744Balance at 30 June 2006 1,865 31,248 2,042 11 -23,540 11,626 12 months ended 31 December 2006Balance at 1 January 2006 1,670 29,992 265 - -19,850 12,077Loss for period - - - - -8,492 -8,492Total recognised income and - - - - -8,492 -8,492expense for the periodIssue of share capital 986 2,221 - - - 3,207Issue of share options - - - - 2 2Movement on warrant reserve - - 1,056 38 - 1,094Balance at 31 December 2006 2,656 32,213 1,321 38 -28,340 7,888 Group Cash Flow Statement (unaudited) 6 months ended Year ended 30-Jun-07 30-Jun-06 31-Dec-06 £'000 £'000 £'000 Loss before tax -1,908 -1,833 -3,663Discontinued operations - -813 -4,829 -1,908 -2,646 -8,492Adjusted for:Depreciation on property plant and equipment 550 894 1,726Profit on disposal of fixed assets - 2 -Loss on disposal of subsidiaries - - 1,658Interest income - -1 -4Interest expense 560 418 1,048Equity share based payment charge 72 - 205Fees settled in shares - - 175Investment write down - - 226Gain on disposal of investments - - -59Adjusted loss from operations -726 -1,333 -3,517Increase in inventories - -15 -Decrease/(increase) in trade and other receivables 166 -111 -200(Decrease)/increase in trade and other payables -40 -350 96Cash used by operations -600 -1,809 -3,621Interest paid - -252 -369Net cash outflow from operating activities -600 -2,061 -3,990 Investing activitiesInterest received - 1 4Disposal proceeds - - 100Purchase of plant and machinery - -197 -220Net cash used in investing activities - -196 -116 Financing activitiesIssue of equity share capital 514 1,451 579Changes in debt - -Loans disposed of with subsidiary - -Inception of loans - - 2,275Repayment of finance leases - - -164Repayment of loans - -2,070 -2,806Net cash generated (used) in financing activities 514 -619 -116 Net increase/(decrease) in cash and cash equivalents -86 -2,876 -4,222Cash and cash equivalents at beginning of period 55 4,277 4,277Cash and cash equivalents at end of period -31 1,401 55 1. Basis of accounting The interim accounts, which are unaudited, have been prepared on the basis ofthe accounting policies expected to apply for the financial year to 31 December2007. As from 1 January 2007, the Group is required by the AIM rules to prepareits annual financial statements in accordance with International FinancialReporting Standards (IFRS) as endorsed by the European Union and implemented inthe UK. Accordingly, this is the first year when the financial statements willbe prepared under IFRS and the comparatives for 2006 will be restated from UKGenerally Accepted Accounting Practice (UK GAAP) to comply with IFRS. The interim financial statements do not include all of the information requiredfor full annual financial statements and do not comply with all the disclosuresin IAS 34 'Interim Finanacial Reporting'. Accordingly, whilst the interimstatements have been prepared in accordance with the transitional rulesgoverning the move from UK GAAP to IFRS, they cannot be construed as being infull compliance with IFRS. Reconciliations between previously reported financial statements prepared underUK GAAP and on the basis as stated above are presented in note 3 to this InterimStatement in respect of the Group Income Statement for the year ended 31December 2006 and the six months ended 30 June 2006 and for the Group BalanceSheet as at 1 January 2006 and 30 June 2006. Except for the adjustments towarrants referred to in note 4, no adjustments have been made for any changes inestimates made at the time of approval of UK GAAP financial statements for theyear ended 31 December 2006 or the interim statements for the period ended 30June 2006 on which the IFRS information is based, as required by IFRS 1. Inaddition, restated figures in note 4 are based on current interpretations ofIFRS and these may be subject to change as industry practice develops. The financial statements for the six months to 30 June 2007 and 30 June 2006 andfor the twelve months ended 31 December 2006 do not constitute statutoryaccounts for the purposes of Section 240 of the Companies Act 1985. A copy ofthe statutory accounts for that year has been delivered to the Registrar ofCompanies. The auditors report on those accounts was unqualified, did notinclude references to any matters to which the auditors drew attention by way ofemphasis without qualifying their report and did not contain a statement undersection 237(2)-(3) of the Companies Act 1985. The 30 June 2007 interim statements were duly approved by the Board of Directorson 28 September 2007 and are unaudited. Basis of consolidation Subsidiaries are entities controlled by the Company. Control exists where theCompany has the power, directly or indirectly to govern the financial andoperating policies of an entity so as to obtain benefits from its activities.The results of subsidiaries are included in the consolidated financialstatements form the date that control commences until the date that controlsceases. Acquisitions are accounted for by the purchase method. The cost of anacquisition is measured as the fair value at the date of exchange of theconsideration provided plus any costs directly attributable to the acquisition. Transactions between and balances with Group companies are eliminated togetherwith unrealised gains on inter-company transactions. Accounting policies ofacquired companies are changed where necessary to be consistent with those ofthe Group. Revenue Revenue represents the invoiced amount of goods sold and services providedduring the year, excluding value added and other sales taxes. Under IAS 18revenue is recognised when performance has occurred and a right to considerationhas been obtained. This is normally when goods have been delivered or servicesprovided to the customer, title and risk of loss have been transferred andcollection of related receivables is probable. Research and development Expenditure on applied research and development costs are charged to the incomeand expenditure account in the year in which it is incurred unless such costsshould be capitalised under the requirements of the applicable standard, IAS38. Operating loss Operating loss is stated after normal operational income and expenditure butbefore other non recurring costs and income, finance costs and exceptionalfinance costs. Exceptional items Exceptional items are transactions which, by virtue of incidence, size or acombination of both are disclosed separately in notes to the financialstatements and on the income statement. Intangible assets Separable intangible assets, such as intellectual property and licences areamortised over their useful economic lives. Property, plant and equipment Under IAS 16 'Property, plant and equipment' are held at cost less accumulateddepreciation, (cost comprising the acquisition cost of the asset along with andany other attributable costs at the date of acquisition). Depreciation is provided to write off the cost of property, plant and equipmentless any estimated current residual values, by equal installments over theirestimated useful lives. The estimated useful lives of assets are as follows: Plant and equipment - 15 - 33% reducing balance Impairment tests on the carrying value of property, plant and equipment areundertaken at the end of each year if events or changes in circumstancesindicate that the carrying value may not be recoverable. Investments held for sale Investments available for sale are initially recorded at cost and are thenre-measured at fair value at each balance sheet date. Unrealised gains andlosses arising on the re-measurement are recorded in equity. On disposal orimpairment of the investments, cumulative gains and losses previously recognisedin equity are transferred to the Income Statement. Where investments in equityinstruments do not have a quoted market price and their fair value cannot bereliably measured, such instruments are stated at cost. Lease assets and obligations Where a Group Company enters into a lease which entails taking substantially allthe risks and rewards of ownership of an asset, the lease is treated as a"finance lease". The asset is recorded in the balance sheet as a property plantand equipment, and is depreciated over its estimated useful life or the term ofthe lease, whichever is shorter. Future instalments under such leases, net offinance charges, are included within creditors. Rentals payable are apportionedbetween the finance element, which is charged to the profit and loss account,and the capital element which reduces the outstanding obligation for futureinstalments. All other leases are accounted for as "operating leases" and the rental chargesare charged to the profit and loss account on a straight line basis over thelife of the lease. Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax assets are generally recognised to the extent that it is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. The carrying amount of deferred tax assets is reviewed at eachbalance sheet date and reduced to the extent that it is no longer probable thatsufficient taxable profits will be available to allow all or part of the assetto be recovered. Deferred tax is calculated at the tax rates that are expectedto apply in the period when the liability is settled or the asset is realised.Deferred tax is charged or credited in the income statement, except when itrelates to items charged or credited directly to equity, in which case thedeferred tax is also dealt with in equity. Foreign currencies Transactions in foreign currencies are translated to sterling at the rate rulingon the date of the transaction. Exchange differences arising from the movementin rates between the date of transaction and the date of settlement are taken tothe Income Statement as they arise. Trade receivables Trade receivables are stated initially at fair value then measured at amortisedcost less provisions for impairment. Provisions for impairment are recognisedwhen there is objective evidence that the Group will not be able to collect allamounts due according to the original terms of the receivable. Any impairmentrecorded is the difference between the carrying value of the receivables and theestimated future cash flows discounted where appropriate. Any impairmentrequired is recorded in the Income Statement. Borrowings Borrowings are recognised initially at fair value and subsequently at theiramortised cost, net of the associated finance costs, which are amortised to theIncome Statement over the life of the borrowings. Borrowings are classified ascurrent liabilities unless the Group has an unconditional right to defersettlement of the liability for at least twelve months after the balance sheetdate. Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits at call with banks,and other short term highly liquid investments that are readily convertible to aknown amount of cash and are considered to be subject to insignificant risk ofchanges in value. Bank overdrafts are shown within borrowings as currentliabilities. Share-based payment Where share options are awarded to employees, the fair value of the options atthe date is charged to the income statement over the vesting period. Non-marketvesting conditions are taken into account by adjusting the number of equityinstruments expected to vest at each balance sheet date so that, ultimately, thecumulative amount recognised over the vesting period is based on the number ofoptions that eventually vest. Market vesting conditions are factored into thefair value of the options granted. As long as all other vesting conditions aresatisfied, a charge is made irrespective of whether the market vestingconditions are satisfied. The cumulative expense is not adjusted for failure toachieve a market vesting condition. Where the terms and conditions of optionsare modified before they vest, the increase in the fair value of the options,measured immediately before and after the modification is also charged to theincome statement over the remaining vesting period. Simultaneous issue of shares and warrants Where shares and warrants are issued simultaneously and the warrants can betransferred, cancelled or redeemed independently of the shares, then the relatedproceeds are apportioned to the shares and warrants. This apportionment is basedupon the fair value of the warrants at the date of issue. The proceeds allocatedto the warrants are credited to a warrant reserve. On the exercise of thewarrants a transfer is made from the warrant reserve to the share premiumaccount. Financial instruments Financial instruments are recorded at the fair value on inception. Thedifference between the net proceeds of the issue and the total amount ofpayments that the issuer may be required to make is recorded as a finance costof the instrument. Finance costs are written off to the Income Statement overthe period of the relevant instrument in proportion to the remaining debtoutstanding. Where financial instruments have been issued for services provided,these services have been valued at fair value, and a charge made to the IncomeStatement and an increase in the specific reserve relating to that financialinstrument. 2. Exceptional item The exceptional item related to provisions for loans and trade debts which wereowed by Silkwood Financial Corporation Inc. and Value Plastics Technologies LLC. 3. Loss per share The basic loss per share is calculated on the loss attributable to theshareholders of £1,908,000 (2006 - loss of £2,407,375) divided by the weightedaverage number of ordinary shares in issue during the period of 126,710,866(2006 - 68,953,041). 4. Reconciliation of UK GAAP to IFRS The Group's financial statements for the year ended 31 December 2007 will be thefirst annual financial statements to be prepared under the new IFRS with thedate of transition to IFRS being 1 January 2006. Annual financial statementsprior to this date have been prepared under UK GAAP. Presented on the following pages, in accordance with IFRS 1, are thereconciliations of the Group Income Statement for the six months ended 30 June2006 and the twelve months ended 31 December 2006 as well as the reconciliationof the Group Balance Sheet at 1 January 2006 (date of transition to IFRS), 30June 2006 and 31 December 2006 (date of last UK GAAP financial statements). Explanations of material adjustments of the Group Income Statement for the sixmonths ended 30 June 2006 and the twelve months ended 31 December 2006 and tothe Group Balance Sheet at 1 January 2006, 30 June 2006 and 31 December 2006 arealso shown on the following pages. The columns headed prior year adjustmentsreflect the accounting adjustments to prior year figures arising from thewarrants attaching to loans which had not previously been accounted for. Group Income Statement (unaudited) Reconciliations UK GAAP IFRS UK GAAP IFRS 31-Dec Prior Year IFRS 31-Dec 30-Jun Prior Year IFRS 30-Jun(* - Adjustments) 2006 * * 2006 2006 * * 2006 £000's £000's £000's £000's £000's £000's £000's £000'sContinuing operations Revenue 319 - - 319 140 - - 140Cost of sales - - - - - - -Gross profit 319 - - 319 140 - - 140 Administrative expenses Exceptional -1,012 - - -1,012 - - - - Other -2,070 - - -2,070 -1,628 - - -1,628 -3,082 - - -3,082 -1,628 - - -1,628Other operating income 144 - - 144 72 - - 72Operating loss -2,619 - - -2,619 -1,416 - - -1,416Loss on disposal of -1,121 - 535 -1,656 - - - -subsidiariesLoss on ordinary -3,740 - 535 -4,275 -1,416 - - -1,416activities beforeinterest and finance Finance income 4 - - 4 1 - - 1Finance cost -477 - - -477 -252 - - -252Exceptional finance costs - -571 - -571 - -166 - -166Loss for the period on -4,213 -571 535 -5,319 -1,667 -166 - -1,833continuing operations Discontinued operations Loss for the period on -3,113 - 60 -3,173 -780 - 33 -813discontinued operationsTax on loss on ordinary - - - - - - - -activitiesLoss attributable to -7,326 -571 595 -8,492 -2,447 -166 33 -2,646equity shareholders See notes on page 17 Group Balance Sheet (unaudited) Reconciliations UK GAAP IFRS UK GAAP IFRS 39,447.00 Prior IFRS 39,447.00 39,263.00 Prior IFRS 39,263.00 Year Year (* - Adjustments) 2,006.00 * * 2,006.00 2,006.00 * * 2,006.00 £000's £000's £000's £000's £000's £000's £000's £000's Non-current assets Intangible assets 12,474.00 - - 12,474.00 11,615.00 - 563.00 12,178.00Property,plant & 544.00 - - 544.00 4,864.00 - - 4,864.00equipment Available for 97.00 - - 97.00 335.00 - - 335.00sale investments 13,115.00 - - 13,115.00 16,814.00 - 563.00 17,377.00 Current assets Inventories - - - - 15.00 - - 15.00Trade and other receivables Under one year 374.00 - - 374.00 2,177.00 - - 2,177.00Over one year 599.00 - - 599.00 - - -Cash and cash 55.00 - - 55.00 1,401.00 - - 1,401.00equivalents 1,028.00 - - 1,028.00 3,593.00 - - 3,593.00 Total assets 14,143.00 - - 14,143.00 20,407.00 - 563.00 20,970.00 Current liabilities Trade and other -1,316.00 - - -1,316.00 -1,111.00 - - -1,111.00payables Income tax -11.00 - - -11.00 - - -liabilities Short-term - - - - - -provisions Current portion -3,540.00 320.00 -887.00 -2,333.00 -4,606.00 577.00 -866.00 -3,163.00of long-term borrowings Bank overdrafts & - - 887.00 -887.00 -2.00 - 866.00 -868.00short-term borrowings Total current -4,867.00 320.00 - -4,547.00 -5,719.00 577.00 - -5,142.00liabilities Non-current liabilities Long-term -1,708.00 - - -1,708.00 -4,202.00 - - -4,202.00borrowings Other creditors - - - - - - -Total non-current -1,708.00 - - -1,708.00 -4,202.00 - - -4,202.00liabilities Total liabilities -6,575.00 320.00 - -6,255.00 -9,921.00 577.00 - -9,344.00 Net assets 7,568.00 320.00 - 7,888.00 10,486.00 577.00 563.00 11,626.00 Reconciliations UK GAAP IFRS 38,718.00 38,718.00 (* - Adjustments) 2,006.00 * 2,006.00 £000's £000's £000's Non-current assets Intangible assets 11,996.00 -595.00 12,591.00Property,plant & 5,158.00 - 5,158.00equipment Available for 64.00 - 64.00sale investments 17,218.00 -595.00 17,813.00 Current assets Inventories - - -Trade and other receivables Under one year 2,330.00 - 2,330.00Over one year - -Cash and cash 4,507.00 - 4,507.00equivalents 6,837.00 - 6,837.00 Total assets 24,055.00 -595.00 24,650.00 Current liabilities Trade and other -1,444.00 - -1,444.00payables Income tax -20.00 - -20.00liabilities Short-term - -provisions Current portion -5,551.00 - -5,551.00of long-term borrowings Bank overdrafts & -229.00 - -229.00short-term borrowings Total current -7,244.00 - -7,244.00liabilities Non-current liabilities Long-term -5,329.00 - -5,329.00borrowings Other creditors - -Total non-current -5,329.00 - -5,329.00liabilities Total liabilities -12,573.00 - -12,573.00 Net assets 11,482.00 -595.00 12,077.00 UK GAAP IFRS UK GAAP IFRS 39,447.00 Prior IFRS 39,447.00 39,263.00 Prior IFRS 39,263.00 Year Year (* - 2,006.00 * * 2,006.00 2,006.00 * * 2,006.00Adjustments) £000's £000's £000's £000's £000's £000's £000's £000's Equity Share 2,656.00 - - 2,656.00 1,865.00 - - 1,865.00capital Share 32,213.00 - - 32,213.00 31,248.00 - - 31,248.00premium reserve Warrant 468.00 853.00 - 1,321.00 1,310.00 732.00 - 2,042.00reserve Equity - 38.00 - 38.00 - 11.00 - 11.00reserve Retained -27,769.00 -571.00 - -28,340.00 -23,937.00 -166.00 563.00 -23,540.00earnings Total equity 7,568.00 320.00 - 7,888.00 10,486.00 577.00 563.00 11,626.00 UK GAAP IFRS 38,718.00 38,718.00 (* - 2,006.00 * 2,006.00 Adjustments) £000's £000's £000's Equity Share 1,670.00 - 1,670.00capital Share 29,992.00 - 29,992.00premium reserve Warrant 264.00 - 264.00reserve Equity - - -reserve Retained -20,444.00 -595.00 -19,849.00earnings Total equity 11,482.00 -595.00 12,077.00 See notes on page 17 Explanation of Adjustments Prior Year - Warrants and Options During the IFRS conversion project, the directors reviewed a number ofcontracts. They identified a number of warrants attaching to loans which had notbeen previously accounted for. As such, as part of the restatement, thedirectors have also adjusted the prior year figures to account for theseadditional warrants. The effect of these adjustments is summarised below: 30 June 31 Dec 1 Jan 2006 2006 2006 £'000 £'000 £'000 Adjustment Adjustment Adjustment Income statement Exceptional finance 166 571 costs Balance sheet Loans 577 320 Warrant reserve -732 -853 Equity reserve -11 -38 IFRS - IAS 38 -Development expenditure Income statement Administration expenses 33 60 -596- discontinued operations Loss on disposal 535 Balance sheet Intangible assets -535 662Provision for -33 -60 -66amortisation Expenditure on development costs is capitalised in accordance with IAS 38. ---ENDS--- For further information: Environmental Recycling Technologies Plc Niall Mackay (CEO) David Shepley-Cuthbert (Finance Director) 01993 779 468 Evolution Fergus Marcroft 0207 071 4300 GTH Media Relations Jade Mamarbachi & Toby Hall 0207 153 8035 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ENRT.L