Preliminary Final Results

30th Apr 2010 11:31

Biofutures International plc

("Biofutures" or the "Company")

Final audited results for the year ended 31 December 2009

 

 The accompanying accounting policies and notes form an integral part of this financial information.

 1 General information

The Company was incorporated on 17 February 2006.

Biofutures International plc ("the Company") and its subsidiaries (together "the Group") are involved in the refining of palm oil.

The Company is a public limited company incorporated and domiciled in England.

The financial information contained in this announcement is extracted from the audited consolidated financial statements which were approved for issue by the Board of Directors on 30 April 2010.

2 Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial information in this announcement is for the year ended 31 December 2009 and has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The parent company financial statements have been prepared using United Kingdom accounting standards.

The Company is entitled to the merger relief offered by Section 612 of the Companies Act 2006 in respect of the consideration received in excess of the nominal value of the equity shares issued in connection with the acquisition of Zurex.

The policies set out below have been consistently applied.

2.2 Going concern

The Group has committed to building a 200,000 metric tonne refinery plant and has banking facilities of RM47m (£9.4 million at £1=RM5) consisting of two tranches, of which RM28.8 million is for capital expenditure and RM18.2 million for working capital. Additional finance may be required to fund the working capital needed for production of refined palm oil at full capacity. The board expects to be able to raise the necessary finance, if it is required, once the plant is built. If such funding was not obtained, the board expects to be able to commission the plant and continuous production at full capacity would be deferred until such time as the necessary working capital is obtained.

2.3 Adoption of new and revised standards

During the year the Group has applied IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating Segments. IAS 1 Presentation of Financial Statements (Revised 2007) requires presentation of a comparative balance sheet as at the beginning of the first comparative period, in some circumstances. Management considers that this is not necessary this year because the 2008 balance sheet is the same as that previously published.

The adoption of IAS 1 Presentation of Financial Statements (Revised 2007) has introduced a number of terminology changes (including titles for the primary statements) and has resulted in a number of changes in presentation and disclosure. The revised standard has had no impact on the reported results or financial position of the Group.

The adoption of IFRS 8 has not changed the segments that are disclosed in the financial statements. The previous annual and interim financial statements identified segments by reference to the dominant source and nature of the Group's risks and returns. These segments are consistent with those used within internal management reporting information that is regularly reviewed by the chief operating decision maker, as required by IFRS 8.

2.4 Standards and Interpretations in issue not yet adopted

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group. The Directors anticipate that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement.

New standards and interpretations currently in issue but not effective for accounting periods commencing on 1 January 2009 are:

·; IFRS 9 Financial Instruments (effective 1 January 2013) 

·; IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)

·; IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective 1 July 2009) 

·; Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items (effective 1 July 2009)

·; Group Cash-settled Share-based Payment Transactions - Amendment to IFRS 2 (effective 1 January 2010) 

·; Improvements to IFRSs 2009 (various effective dates, earliest of which is 1 July 2009, but mostly 2010)

·; IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009)

·; IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1 July 2009)

·; IFRIC 18 Transfers of Assets from Customers (effective prospectively for transfers on or after 1 July 2009)

·; IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective 1 July 2010) 

·; Prepayments of a Minimum Funding Requirement - Amendments to IFRIC 14 (effective 1 January 2011) 

·; Amendment to IAS 32 Classification of Rights Issues (effective 1 February 2010)

2.5 Consolidation

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

2.6 Segment reporting

Following the adoption of IFRS 8, Operating Segments, the Group's segmental analysis follows internal reporting, and results in one 'operational' segment being identified.

2.7 Foreign currency translation

(a) Functional and presentational currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in sterling, which is the Company's functional and presentational currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rate of exchange prevailing at that date. All exchange gains arising on retranslation of assets and liabilities are dealt with in the income statement.

 (c) Consolidation of overseas subsidiary

Income and expenditure for overseas subsidiaries are included based upon monthly average exchange rates to give a fair approximation to the transaction rate. Balance sheet items are included at the year-end exchange rate. All other differences are included within the translation reserve, including related goodwill and intangible assets, which are translated at the rate ruling at the balance sheet date.

2.8 Property, plant and equipment

All property, plant and equipment (PPE) is shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation on assets is calculated using the straight-line method at 10% to 20% so as to allocate the cost of each asset less its residual value over its estimated useful life. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Land is not depreciated. Assets in the course of construction are not depreciated until they are brought into use, at which point they are re-categorised to their relevant description. Under IAS23 finance costs which are attributable are capitalised.

The principal annual depreciation rates used are as follows:-

·; Computer equipment 20%

·; Motor vehicles 20%

·; Leasehold additions 10%

2.9 Intangible assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing.

Identifiable intangible assets are recognised separately from goodwill on all acquisitions. Such assets are carried at fair value at the date of acquisition (i.e as deemed cost). Such intangible assets are reviewed for impairment on an annual basis.

The intangible assets acquired were an option to acquire land, a licence to manufacture palm oil biodiesel, and the linked refinery licence subsequently obtained. The group of assets are all intrinsically linked and have been valued as a "group" (see note 10). The Directors are of the opinion that these intangibles have an indefinite useful economic life, so no annual amortisation is charged. The group of assets will be subject to annual impairment review.

2.10 Impairment testing of goodwill, other intangible assets and property, plant and equipment

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors the related cash flows.

Goodwill, other individual assets or cash-generating units that include goodwill, other intangible assets with an indefinite useful life, and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

2.11 Trade and other receivables

Trade and other receivables are initially recognised at fair value, which is usually the original invoiced amount plus transaction costs, and subsequently carried at amortised cost using the effective interest method less provisions made for impairment of receivables.

2.12 Trade and other payables

Trade and other payables are initially recognised at fair value, which is usually the original invoiced amount, and subsequently carried at amortised cost using the effective interest method.

2.13 Cash and cash equivalents

Cash and cash equivalents (readily convertible into a known amount of cash) include cash in hand and deposits held at call with banks with an original maturity of three months or less. For the purpose of the cash flow statement, cash and cash equivalents are as defined above, net of outstanding bank overdrafts.

2.14 Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

2.15 Employee Benefits

(a) Pension obligations

Group companies do not operate defined contribution schemes but contribute to individual personal pension plans for certain employees by way of paying 10% of their gross salary costs in lieu of a scheme contribution accounted for as salary when payable.

(b) Share based payments

The share option programmes allow Group employees to acquire shares of the Company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is usually measured using a binomial model, taking account of the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest where forfeiture is due to performance criteria not being met during the life of the option.

2.16 Judgments and estimates

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Directors have used their expert knowledge of the Malaysian bio fuels and oil refining markets to estimate the carrying values of goodwill and to estimate the carrying value of certain assets. Although the biodiesel project will not now be carried out, the holding of the biodiesel licence which includes the rights to produced refined palm oil, has enabled the Company to obtain an additional licence to produce and sell refined palm oil. Accordingly the biodiesel licence has not been impaired.

(a) Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated above (note 10).

(b) Intangibles

The Group has had to make judgments on which intangible assets are intrinsically linked (note 10). Although the biodiesel project will not now be carried out, the holding of the biodiesel licence which includes the rights to produced refined palm oil, has enabled the Company to obtain an additional licence to produce and sell refined palm oil. Accordingly the biodiesel licence has not been impaired (note 10).

(c) Estimated impairment of intangibles

The Group uses net present value calculations based on expected future cash flows to measure the value in use of the intangibles. These calculations require the use of estimates (note 10).

(d) Estimate of useful life of intangibles

The Directors have to estimate the useful life of intangibles. They have taken into account the nature of the assets and their expected life (note 10).

(e) Carrying value of property, plant and equipment

The Group has reviewed property, plant and equipment and exercised judgment on which assets will have a continuing benefit to the business. In addition judgments have had to be made, based on discussions with third parties, on the likely carrying value of assets that may not be required following the review of the Zurex Project (see note 9).

(f) Impairment of other assets

In view of the decision to re-engineer the biodiesel project into a refinery project, the Group has had to review all assets and make judgments that no impairment is required currently, other than that made in respect of property, plant and equipment assets. This mainly relates to land which is included at 1.184 million (2008: £1.462 million) (see note 9).

 

3 Subsidiaries

The Group has one principal subsidiary:

Zurex Corporation Sdn. Bhd. ("Zurex") is incorporated in Malaysia and is 100% owned. It is building a palm oil refinery.

4 Segment information

At 31 December 2009, the Group has one operating segment, which is the planning and construction of palm oil refining plant and related activities (termed 'operational' below). Reconciling items between 'operational' and the Group's reported results relate to head office and related administrative costs: 

 

 The segment assets and liabilities at 31 December 2009 and capital expenditure for the year then ended are as follows:

 

Segment assets consist primarily of land, plant and equipment, intangible assets (net of related deferred tax), receivables and operating cash. They exclude inter-company assets.

Segment liabilities comprise operating liabilities and borrowings of operational subsidiaries. They exclude items such as taxation and inter-company liabilities.

Capital expenditure comprises additions to property, plant and equipment (note 9), including additions resulting from acquisitions through business combinations.

Geographical analysis

The home country of the Company is England.

 5 Expenses by nature

All of the above are classified as administrative expenses.

6 Directors and employees

The employee benefit expense during the year was as follows:

 

The average number of employees during the year was as follows:

 

Remuneration in respect of Directors was as follows:

 

The Board considers key management to currently comprise the three Executive Directors and Henry Yong. Compensation for key management was:

 

7 Income tax expense

There is no tax charge due to the losses arising in the year and the impact of losses brought forward (2008: £nil).

Deferred tax relating to the acquisition during 2006 is detailed in note 11.

The tax on the Group's profit before tax differs from the loss before taxation multiplied by the standard rate of corporation tax in the UK due to the following:

 

Factors Affecting Future Tax Charges

The standard rate of UK corporation tax charge reduced from 30% to 28% from 1 April 2008, The effective rate for 2009 was 28.0% (2008: 28.5%).

8 Loss per share

Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Diluted

Diluted loss per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all contracted dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares.

The options and warrants in issue are currently anti-dilutive and accordingly the diluted loss per share is the same as the basic loss per share.

9 Property, plant and equipment

 

 

 

The outcome of the arbitration proceedings in respect of the contract with JJ Lurgi could potentially impact on the carrying value of assets in the course of construction (see note 19).

 

10 Intangible assets

 

 

The carrying amount of goodwill is all allocated to the operational cash generating unit and is consistent with the treatment in previous years.

The intangible assets are included at their fair value and have been grouped together. They relate to the option to acquire the land, the licence to manufacture palm oil biodiesel and the linked refinery licence subsequently obtained. The group of assets could not be separated as they were considered to be all intrinsically linked. An indefinite life has been assumed as the licences have no termination date and the Group will have full rights to the land. The production of palm oil is also such an important commodity in Malaysia that its production and demand is expected to continue indefinitely.

Zurex was established to build a 200,000 metric tonnes per annum palm oil biodiesel plant on the land at Lahad Datu, Sabah, Malaysia. The Directors announced in November 2008 that they are proposing to re-engineer the works done to date to allow a palm oil refinery plant to be built instead. 14 acres of land have now been acquired and permission obtained for an additional licence to permit palm oil refining. The intangible assets have been reviewed based on the assumption that the refinery plant will be built and that construction will be completed by 30 September 2010.

The projected cash flows over the next 10 years, discounted at a pre-tax rate of 12%, will be higher than the carrying values detailed above. The projections to support the carrying value are based on the following assumptions:-

 ·; Margin of refined palm oil over crude palm oil - RM180 per metric tonne.

·; The plant is expected to produce 200,000 metric tonnes per annum.

·; Income and costs rise at 5% per annum.

·; 10 years has been used to more fairly reflect the long term nature of the plant.

·; Terminal values have been used in calculating the discounted value of the cash flows.

·; Pre-tax discount rate of 12% has been applied.

·; Long term growth rate of 3% is assumed.

·; Exchange rate of £1 = RM5 is used.

Based on the above assumptions no provision for impairment is required.

Goodwill represents the fair value attributed to the knowledge of the Malaysian nationals required to hold the operational licence for the biodiesel plant in Malaysia, acquired with Zurex. Although the biodiesel plant will not be built an additional licence has been obtained to also allow palm oil refining, which will utilize the same knowledge. Accordingly, no impairment is currently considered necessary.

11 Deferred income tax

The movement on the deferred income tax account reflects the restatement of the liability at the Malaysian tax rate of 25% and the translation gains arising on conversion from Malaysian Ringgit to Sterling and these movements are included in the translation reserve:

The deferred tax liability arose on the acquisition of Zurex in 2006 (see Note 10).

The Group has unutilised tax losses of £160,000 (2008: £213,000) for which no tax asset has been provided.

The movement in un-provided deferred tax assets is as follows: 

The deferred income tax asset is recoverable as follows:

The deferred tax asset is not provided in view of the uncertainty as to the timing of its recoverability.

 12 Trade and other receivables

The amounts of other receivables are carried on an amortised cost basis.

Credit risk

As the Company is currently not trading it has limited exposure to credit risk in respect of receivables.

Other receivables mainly relate to prepayments and deposits and no provisions or impairment have been made against such items.

13 Cash and cash equivalents

\* The security deposit is in respect of the loan facility with Bank Kerjasama Rakyat Malaysia Bhd. and the monies are therefore not immediately available to the Group (see Note 17).

Short term deposits are monies held on money market or fixed term deposits made with recognised banks. The security deposit is to support the bank lending.

Credit risk

The Group recognises the impact of credit risk and has diversified its cash holdings over 4 banks.

Interest rate and liquidity risk

The effective interest rate on short-term bank deposits was 1.6% (2008:5.3%). These deposits have an average maturity of 49 days (2008: 34 days).

14 Share capital

 All issued shares are fully paid.

15 Description and purpose of reserves

The reserves included in the Consolidated Statement of Changes in Equity are as follows:

 Management of capital

The Group considers capital to be its equity reserves. At the current stage of the Group's life cycle, the Group's objective in managing its capital is to ensure that funds raised meet the refinery plant build and operational expenditure requirements. The Group reviews the refinery plant build to ensure that it is progressing in line with expectations, that costs are in line with budgets and places unused funds on deposit to conserve resources and increase returns on surplus cash held.

16 Current liabilities

The carrying amounts of trade and other payables are at fair value.

The trade creditor days of the Group for the year ended 31 December 2009 were 42 days (2008: 52 days)

17 Bank borrowing 

The bank borrowings arise under a facility with Bank Kerjasama Rakyat Malaysia Bhd., a licensed bank in Malaysia, for the aggregate sum of up to RM47 million (approximately £9.4 million £1=RM5) consisting of two tranches, of which RM28.8 million is for capital expenditure and RM18.2 million for working capital. The borrowings have been made under Islamic banking principles and include an asset sale agreement and an asset purchase agreement. Zurex has placed RM20m on deposit with Bank Kerjasama Rakyat Malaysia Bhd as security for the lending of monies. A legal charge and debenture have been given to the Bank together with a corporate guarantee from the Company. The effective rate of interest is set at 1.5% over the Bank's funding rate subject to a cap at 9.95%. The first drawing under the facility was made in late December 2009 and no interest has been provided in these accounts.

18 Cash generated from operations

19 Contingencies

In June 2009, the Company issued a Notice of Arbitration to JJ-Lurgi Engineering Sdn. Bhd. ("JJ Lurgi"). This relates to the dispute between the Company and JJ-Lurgi in connection with the contract between them dated 26 January 2007 for the supply of components for the construction of a 200,000 tonnes per annum palm oil biodiesel plant. The original contract was for RM38.4 million (£7.7 million at £1=RM5) of which RM11.5 million (£2.3 million at £1=RM5) had been paid. The Company supported by legal advice, has taken the view that the contract had been terminated. Zurex is claiming RM9.89 million (£1.98 million £1=RM5) against JJ-Lurgi and JJ-Lurgi has a counter claim of RM2.87 million (£0.57 million £1=RM5) against Zurex under the arbitration proceedings.

The ultimate outcome of the arbitration between the Company and JJ Lurgi cannot be determined presently for inclusion within these accounts, but the Directors are of the opinion that the Company will be able to support its case successfully and, accordingly, no contingent liability nor any contingent asset has been recognised (2008 - nil).

20 Share based payments

The Group has three contracted share option schemes and warrants in issue. The contracted and proposed options have been valued in accordance with the provisions of IFRS 2. There was a credit of £17,000 (2008 charge £27,000) to the income statement in respect of share based payments.

 The fair value of services received in return for share options granted to employees is measured by reference to the fair value of share options granted. The estimate of fair value of the services received is measured based on a binomial lattice model for both long term incentive plans (LTIP). The vesting period is used as an input to those models. The following additional assumptions were used:

The calculation of the fair value of the options granted in 2008 is based on a volatility of 55% and a risk free interest rate of 4.53%.

 On 5 February 2010 the following option were granted to Directors and key management.

 *With performance conditions

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

21 Financial Instruments

The Group's activities expose it to a variety of financial risks: credit risk, liquidity risk, cash flow risk, fair value interest-rate risk and foreign currency risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group's treasury policy is set by the Board and is reviewed regularly. The policy involves the use of certain financial instruments in, the management of risks. Surplus cash is placed on short term deposit to maximise interest earned.

The carrying amounts of the Group's financial assets and liabilities as at 31 December 2009 may also be categorised as follows:

Risk management is carried out centrally under policies approved by the Board.

(a) Credit risk

The Group's current main credit risks relates to monies held on deposit with various banking institutions. Monies held on deposit are spread over 4 main financial institutions to reduce the credit risk.

(b) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash balances and ensuring availability of funding.

(c) Cash flow and fair value interest rate risk

The Group's cash flow interest rate risk arises from money market deposits. Deposits made at variable rates expose the Group to cash flow interest rate risk. The Group's deposits are at a fixed rate for the duration of the deposit which range from 1 week to 3 months. No long term interest rate hedging contracts have been entered into. The Group does not consider the risk to be significant in view of the nature of the Group's current activities. If interest rates had changed by 0.5% during the year, the impact on the Group's profit and loss would have been £24,000 (2008: £41,000).

(d) Foreign currency risk

The Company has investments in operations outside the United Kingdom denominated in currencies other than sterling. As a result the value of the Company's non-sterling financial assets and cash flows can be affected by movements in exchange rates, in particular the Malaysian Ringgit/Sterling exchange rate. The Group does not currently have an active policy to hedge its foreign currency risks as it is looking to finance the overseas operations in local currency hence reducing exchange risks (2008: nil).

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

For the year ended 31 December 2009, if the Malaysian Ringgit had weakened by 0.5 Malaysian Ringgit against Sterling with all other variables held constant, the post tax loss for the year would have been £33,000 (2008: £14,000) lower mainly as a result of foreign exchange gains/losses on translation of Malaysian Ringgit-denominated transactions.

Equity would have been £2,498,000 (2008: £2,356,000 (restated)) lower, arising mainly from foreign exchange losses/gains on translation of Malaysian Ringgit-denominated assets and liabilities.

22 Capital Commitments

\* Translated at £1 = RM5

23 Related party transactions

Henry Yong is a director of both WS Bio and Zurex (although he is not a director of the Company), and accordingly the contracts entered into with WS Bio in February 2009 and December 2009 represent related party transactions. The following transactions were carried out with related parties. 

*Translated at year end rate

ENDFR LLFIISAIIVII

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