Preliminary Results for the year ended 31 Dec 2014

30 June 2015

Environmental Recycling Technologies plc

Preliminary Results for the year ended 31 December 2014

Environmental Recycling Technologies plc which owns and is developing applications for the patented rights to the Powder Impression Moulding ("PIM") process, which converts mixed waste plastics into commercially viable products, announces its preliminary results for the year ended 31 December 2014.

Financial highlights

· Revenue for the year ended 31 December 2014 £0.04 million (2013: £0.12 million) arising from licence and royalty agreements

· Loss on operations £1.10 million (2013: £2.79 million)

Operational highlights

· Installation and commissioning of powder preparation equipment at ERT's specially designed processing facility

· AXION Polymers received its first two orders from global licencees for PIM powdered AXPLAS™

· Cooperation agreement signed with Ceramic Drying Systems Limited for the supply and installation of turn-key PIM processing equipment globally

· Granted a non-exclusive licence in the state of Colorado for the production of flat sheet 

· Signed heads of terms for a £1m UK exclusive licence with a newly established Joint Venture in the UK

Post Year End

· The Company is in advanced discussions for the acquisition of all of the issued share capital of a profitable company which, if completed successfully, will provide the enlarged group with a more balanced business and additional sales opportunities and synergies.

Ken Brooks, Chairman, commented: "I am pleased to say that our management team continues to make steady progress in a consolidated approach to the commercialisation of PIM whilst also looking out for wider and synergistic activities in the field of environmental recycling in the light of new legislative drivers and greater environmental consciousness."

For further information:

The Company confirms that the Company's Annual Report and Accounts for the year ended 31 December 2014 will be sent to shareholders and will be available on the Company's website by 30 June 2015: www.ertplc.com.

Notes to editors:

Environmental Recycling Technologies plc (ERT) is a leading developer of innovative technologies specifically focussing on plastic waste recycling. The company holds the worldwide intellectual property rights to the Powder Impression Moulding (PIM) Process.

For more information about Environmental Recycling Technologies plc please visit www.ertplc.com

Chairman's Report

Principal activities

The principal activity of the company is the licencing of the intellectual property of the Powder Impression Moulding (PIM) system to third parties for specific products and geographical areas of the world in order to generate licence fees and on-going royalties. The company works with collaborative partners who assist with the commercialisation of the process.

Highlights

· Installation and commissioning of powder preparation equipment at our specially designed processing facility, in cooperation with AXION Polymers

· Our collaborative partner AXION Polymers received its first two orders from our global licensees for PIM powdered AXPLAS™ utilising the powder preparation equipment

· Cooperation agreement signed with Ceramic Drying Systems Limited for the supply and installation of turn-key PIM processing equipment globally

· Granted non-exclusive licence in the state of Colorado for the production of flat sheet

· Signed heads of terms for a £1m UK exclusive licence with a newly established Joint Venture in the UK for the production of flat sheet

· Significant strengthening of the executive and non-executive board

Results

· Revenue from licence fees and royalties was £0.04 million (2013: £0.12 million) arising predominantly from licence and royalty income agreements

· Administrative expenses reduced to £1.14 million (2013: £2.91 million)

· The loss on operations was £1.10 million (2013: £2.79 million)

· The loss after tax for the year reduced to £3.22 million (2013: £3.54 million)

· The loss per share was 0.37 pence (2013: 0.42 pence)

Although the Company has reported another loss for the year, yet again much progress has been made. Our current global licencees did not achieve their expected milestones in bringing their products to production. These delays impacted on the ability of the Company to earn royalty revenues. Much progress was made with Axion to develop a stream of PIM powdered material supplies for use by our global licencees but this did not result in revenues in the financial year. The year was spent putting the building blocks in place for the future so that new licencees could be supported to enable them to reduce the time to get products in to production.

Revenues include an increased contribution from Contour Showers.

Normal overheads incurred in running the company, excluding the impairment for available-for-sale financial assets and amortisation, were £0.91 million (2013: £0.98 million). Normal running costs include an additional expenditure of £0.15 million on research and development (2013: £0.05 million) demonstrating the increased effort that has been made to support the commercialisation of PIM. In the circumstances the Board considers it more appropriate to expense such additional costs rather than increasing the recorded value of intangible assets.

Financing costs were £2.16 million (2013: £0.75 million) made up of interest paid on the increased borrowings and the high costs of finance for the short term loans that have been raised over the course of the year.

Post Year End

The Company is in advanced discussions for the acquisition of all of the issued share capital of a profitable, cash generative company which, if completed successfully, will provide the enlarged group with a more balanced business and additional sales opportunities and synergies.

Our licencee operations

United Kingdom

· Contour Showers - Contour continues to drive the production forward for which ERT receives royalties. Contour is one of the recent licencees that have capitalised on the availability of the raw material AXPLAS™

· Mettalis - In 2015 ERT signed heads of terms for an exclusive licence for the production of flat sheet into to the UK. This is by way of a joint venture between ERT and Mettalis. This represents the opportunity to re-establish the UK market for PIM sheets

United States

· Brown Water Plastics (BWP) - Since receiving the first million plus pound sterling order, BWP have engaged Arup, our preferred construction partner, to work and develop mould improvements. This is expected to reduce raw materials and structural costs in the production of the barge covers. BWP anticipates this will provide it with a commercial advantage over its competitors

· North Brook Plastics (NBP) - Whilst it has taken some time for NBP to refine the PIM process, it is the 2nd licencee to place an order for AXPLAS™. This has provided NBP the opportunity to commission the line and get into production faster. ERT's polymer lab technician has since visited NBP to support them through this stage. We anticipate production formally to start in Q4 2015

· Earth Enterprises LLC (EE) - ERT granted EE a non-exclusive licence for the production of flat sheet. EE was awarded a Colorado state grant for the capital to supply and install the equipment. It is anticipated that the facility will be commissioned in Q4 2015

Collaborative partners

· Arup - The ERT relationship with Arup continues to expand. As mentioned previously, Arup are working on a project with our licensee on various programmes. ERT also has the benefit of Mathew Cooper on our board as a non-executive, to facilitate closer project management development

· AXION Polymers - Since the relocation of ERT's test facility to the AXION polymers facility in Manchester, ERT has commissioned and installed a powder processing facility to facilitate our licencees' needs for suitable raw materials. As part of our cooperation AXION has taken over the management of the equipment. They have subsequently received orders from two licensees with a further three seeking quotations. This is a milestone in the organic growth of ERT, therefore enabling our licencee to get product to market faster. As part of our relationship with AXION, we are continuing to develop PIM recipes to meet the technical requirements of the industry

· Ceramic Drying Systems (CDS) - In May 2015 ERT signed cooperation with CDS to supply turn-key PIM facilities globally. This also represents a major turning point in ERT's growth. CDS has a global reach, which will enable ERT to continue to expand its licencee portfolio around the world

Our Board

In January 2014, the appointment of Jeremy Allen and Divyash Patel as Non-Executive Directors was announced.

· Mr Allen, the former Global Head of Dresdner Kleinwort's Equity Research Department, is a highly regarded equity market professional with 21 years' experience in the City

· Mr Patel is a commercial consultant who advises on and negotiates contracts for companies with innovative environmental technologies for use in Asia

Subsequently, in 2014, John Mayfield, Mathew Cooper and John Viviani were appointed to the board of ERT.

· Mr. Mayfield joined ERT as an executive director from Avincis Group where he led a Finance & Operations re-structuring project for London & the Americas. He brings significant experience in technology and international businesses, is ACCA & CIMA qualified, and holds an MBA from Cranfield School of Management

· Mr. Cooper is an Associate at Arup Group Limited (Arup) and has been instrumental in the collaborative relationship between ERT and Arup, where he focuses on business strategy, new venture development and operational performance improvement

· Mr. Viviani, as Regional Operations Director at Viridor, was responsible for (amongst other contracts and businesses) Europe's largest municipal integrated waste, recycling and energy-from-waste management contract, namely the Greater Manchester Private Finance Initiative (PFI) contract, comprising £631 million capital investment and operational management contracts worth £3.8 billion over 25 years to Viridor

Outlook

In 2015 ERT has agreed heads of terms for an exclusive licence in the UK and signed a non-exclusive licence in the USA. The recent announcement of the agreement with CDS will facilitate the continuing traction ERT is experiencing for its exciting technology.

The recent co-operations with AXION, Arup and CDS have provided ERT with a strong competitive advantage in the marketing and delivery of the process, therefore providing the opportunity to offer turn-key support to existing and new licencees.

ERT has positioned itself as the solutions provider to the plastics industry. We are already starting to see the impact of this with the quality of enquiries we are receiving.

ERT is receiving substantial interest from the USA and mainland Europe. We recently hosted a meeting with a potential client from Australasia.

We have seen recent legislation that is calling for the following targets to be met:

· July 2nd 2014 - The European Commission formally adopted proposals for the future of waste and recycling targets within Europe, as part of measures towards achieving a circular economy

· 2015 - EU Circular Economy Strategy; The European Commission is aiming to present a new, more ambitious circular economy strategy late in 2015, to transform Europe into a more competitive resource-efficient economy

· June 2015 - Plastics Industry Recycling Action Plan (PIRAP); Plastics Europe Federation (PE), the British Plastics Federation (BPF) and the Packaging and Films Association (PAFA)

· 70% Recycling Target of municipal waste by 2030 - Key amongst the proposals is an increased target for the member states to recycle or reuse 70% of municipal waste by 2030, an increase on the current 50% by 2020

· 2025 Ban on land-filling Plastics - The Commission is also proposing a ban on sending recyclable materials such as plastics to landfill by 2025, as well as phasing out landfilling of waste by 2030

· 2025 60% Plastics Recycling Target - The European Commission legislative proposals set minimum recycling rates for packaging in Europe increasing to 45% by 2020 and 60% by 2025

· Resources Action Program (WRAP) launches PIRAP which provides a road map for the plastic packaging supply chain to take action and contribute towards achieving the UK government's target for obligated users

With the increased pressure from governments around the globe to rapidly increase collection and recycling targets, ERT is perfectly positioned to offer a commercial, sound solution to the exponential increased tonnages coming through the collection infrastructure. The recent Heads of Terms with Mettalis is just one such example of industry looking to add value to recyclable waste. This is achieved by capitalising on the PIM process to convert waste plastic arising into a sought after established product.

The management is confident with the recent cooperation agreements and the strengthened board, we can look to the future to continue to commercialise the PIM technology.

The recent co-operations have already borne fruit for ERT, e.g:

· 2 separate orders for the AXPLAS™ powder to ERT licencees

· 1 licencee has engaged the services of ARUP to assist with product design and development

· First turn-key proposal for the supply and implementation of a fully automated PIM manufacturing facility

Principal risks and uncertainties

The company is exposed to a variety of risks in the conduct of its normal operations. Whilst it is not possible to either completely record or to quantify every material risk that the company faces, below is a summary of those risks that the directors believe are most significant to the company's business and could have a material impact on future performance, causing it to differ materially from expected or historic achieved results.

Commercialisation of the PIM process

The company's prime risk is the on-going commercialisation of the PIM process which is still being developed. All costs of product development are for each customer with the company facilitating introductions to third parties. As noted above, ERT has engaged with collaborative partners to provide services to assist licencees in entering commercial production.

Licence fee and royalty revenues

The company hopes to achieve significant licence fee and royalty revenues in the future which are subject to the successful development of each customer's products being produced under licence from ERT. Future royalty revenues have an inherent uncertainty as they are principally derived from the number of units produced by customers and are subject to variations in patterns of demand.

Treasury function

The company monitors cash flow as part of its day-to-day control procedures. The board considers cash flow projections and liquidity risk at its meetings and ensures that appropriate facilities are available to be drawn down upon as necessary.

Credit risk

The company's credit risk is primarily attributable to its trade debtors. Credit risk is managed by running credit checks on customers and by monitoring payments against contractual agreements.

Customer concentration, programme dependencies and relationships

The loss of, or deterioration in any single customer relationship, could have a material impact on the company's results. The board continues to look for opportunities to expand the business' licencee base and in 2015 ERT has agreed terms for an exclusive and non-exclusive licence in the UK and USA.

FINANCIAL REVIEW

Results

Revenue together with other income for the year ended 31 December 2014 was £0.04 million (2013: £0.12 million). The loss on operations was £1.10 million (2013: £2.79 million). Total comprehensive losses attributable to equity shareholders were £3.22 million (2013: £3.54 million).

Dividends and loss per share

At 31 December 2014 as reported in the statement of financial position, the company does not have distributable reserves and is unable to declare a dividend. The basic and diluted loss per share was 0.37 pence (2013: 0.42 pence).

Financing

Short term funding

Management's key area of financial focus is in securing funding to meet the company's day to day liabilities as they fall due. The company meets its day to day cost base by managing its cash resources and securing appropriate levels of finance to settle liabilities as they fall due. Additional net cash funds of £1.16 million (2013 £0.5 million) were raised from loans made to the company by its lender Oxford Capital.

Total borrowings amounted to £6.08 million (2013: £3.14 million).

The Directors have received written assurance from Oxford Capital, the lender of £6.08 million (2013: £3.14 million) that there is no intention to request immediate repayment of the liabilities and that subject to agreement, the lender would accept repayment by way of a debt for equity swap. The Directors do not expect there to be a requirement to repay the loans in cash during the next 12 months.

Short term funding facilities have been organised to cover the company's normal overheads. Written confirmation has been received from Magna Group ("Magna)" confirming their willingness to make available to the Company, if required, a Convertible Promissory Note amounting to the value of $0.5 million on acceptable terms.

Going concern

The company requires the continuation of loan funding from its current lender and needs to obtain significant additional funding in 2015 (either from the lender, new lenders or the raising of funds from share issues) in order to continue trading and meet its liabilities as they fall due for payment. In respect of the assessment of going concern, the directors have prepared detailed profit and cash flow forecasts for the period ending 31 December 2016. The cash flow forecast shows that the company is only able to continue trading as a going concern if:

1) Oxford Capital (the current principal lender to the company maintains its current level of funding (being loans of £6.08m) to the company or withdraws such funding only in a manner that does not create the need for cash payments to be made by the company (such as a debt for equity swap). Oxford Capital has confirmed to the directors in writing that it will not withdraw the £6.08m funding being provided to the company (in a way that makes the company unable to pay its debts as they fall due) during the period of 12 months from the date of approval of the financial statements.

2) Significant additional funding is made available to the company during July / August 2015 either from the current principal investor (Oxford Capital), new external lenders or the raising of funds from share issues.

The directors acknowledge that the requirement for continuation and enhancement of the funds being made available to the company provides a significant degree of uncertainty in terms of going concern. Based on discussions with Oxford Capital and the Nominated Advisor the directors consider that there is a reasonable expectation the additional funding required by the company in order to continue trading and meet its liabilities as they fall due for at least the period of 12 months from the date of approval of the financial statements will be made available as and when required. Further detail concerning going concern is set out in note 1 of the financial statements.

Ken Brooks

Chairman

Statement of Comprehensive Income

Year ended 31 December 2014

Statement of Financial Position

At 31 December 2014

Statement of Changes in Equity

Year ended 31 December 2014

Year ended 31 December 2013

Statement of Cash Flow

Notes to the financial statements 

1. Accounting policies

Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRS's"). The financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies preparing financial statements in accordance with IFRS.

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2014 or 2013, but is derived from those accounts.

Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered prior to 30 June 2015. The auditors have reported on those accounts; their reports were unqualified however, the 2014 accounts did include an Emphasis of matter in relation to going concern which is detailed below:

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in Note 1 to the financial statements concerning the ability of the Company to continue as a going concern. The disclosures indicate that the Company will require additional funding over the next twelve months to enable it to continue trading and meet its liabilities as they fall due. The directors believe that this additional funding can be raised either from a further share issue or from an existing or new lender. The directors are confident that such additional funding will be able to be obtained and have therefore prepared the financial statements on the going concern basis. These conditions indicate the existence of material uncertainties which may cast significant doubt over the Company's ability to continue as a going concern and therefore also its ability to realise recorded value for its assets.

In 2013, the report was unqualified, however it did include an emphasis of matters in relation to going concern. For both 2014 and 2013 the audit report did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

Going concern

The company has reported another operating loss for the year and has net liabilities of £4.72 million as at the balance sheet date.

The directors have prepared detailed cash flow forecasts for the period ended 31 December 2016. Based on their current expectations of the progress of negotiation and current and new licence fees the directors have a reasonable expectation that revenue will be generated in line with the forecasts and will be available to provide some level of underpinning to the cash flows of the Company for the period to December 2016. The forecasts also assume that Oxford Capital (the lender) will not seek cash repayment of any of the £6.08 million of loan funding it has made available to the company during at least the 12 months from the date of approval of these financial statements. However, the forecasts indicate that the company needs to obtain significant additional funding (around £1.8 million) during July 2015 in order to continue trading and meet its liabilities as they fall due for payment.

Written assurance has been received from the lender that there is no intention to request repayment of the loan of £6.08 million for at least the period within 12 months from the date of signing these financial statements. In addition, the directors are in discussions with the lender that will enable the company to settle the outstanding loans of £6.08 million by the issue of shares in the company rather than settling in cash.

The directors have also obtained written confirmation from Magna Group confirming their willingness to make available to the company, if required, a Convertible Promissory Note amounting to the value of $0.5 million on acceptable terms to help cover the company's normal overheads in the foreseeable future.

The directors consider that the recent and expected trading performance, the requirement for the continuation of loan funding from the principal lender and the need to obtain significant additional funding in 2015 (either from the lender, new lenders or the raising of funds from share issues) indicate the existence of material uncertainties which may cast significant doubt over the group's ability to continue as a going concern. However, the directors are confident that the required funds will be made available to the company at the time required. Accordingly the directors continue to adopt the going concern basis in preparing the annual report and accounts.

The financial statements do not include the adjustments to the carrying value of assets that would result if the company was unable to continue as a going concern.

2. Critical accounting estimates and judgements

The company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. 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.

Judgements

Impairment of intangible assets

The company monitors market conditions to assess indications of impairment. When an impairment review is performed the recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. The estimated discount rate is to reflect current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. The estimate of future cash flows included in the current forecasts reflects the steps the business has taken to recruit a Managing Director with sector expertise and the development of a strategy to work more closely with licencees to assist them in entering commercial production. Following this important appointment and key change in the way the business operates, the forecasts assume a significant increase in future revenues compared to current levels, based on the expectation that certain licensees will start to generate royalty income from January 2016 onwards and that new licences and royalties can be generated. Actual outcomes are inherently uncertain and may vary, and if the actual future cash flows received were less than assumed in the forecasts, then this will lower the value in use and may result in an impairment. Intangible assets are shown in note 6. An impairment charge of £nil has been made during the year (2013 - £nil). The directors will continue to monitor the carrying value of the intangible assets as the company progresses.

3. Revenue and segment information

The revenue and loss before tax are attributable to the principal activities of the company being the licencing of the intellectual property of the plastic Powder Impression Moulding system to generate licence fees and on-going royalties.

In the opinion of the directors, the only operating segment is the exploitation of the company's intellectual property. Whilst customers may be operating in different economic environments the company operates from the United Kingdom and all business is subject to English law.

All assets are held in the UK.

Reporting of external revenue by location of customer is as follows:

Revenue arises from:

Revenues of £29,000 (2013: £66,000) related to customer A, £nil (2013: £50,000) to customer B and £8,000 (2012: £3,000) to customer C

4. Loss on operations before interest and finance

Loss on operations is stated after charging:

5. Impairments

The amounts which became due for payment from 2K Manufacturing at the beginning of July 2013 were not paid. Due to non-payment a full provision of £1.61 million was made against the trade receivable loan at 30 June 2013. A further provision of £0.07 million has been made against current receivables. 2K Manufacturing subsequently was placed into administration in November 2013.

6. Finance costs

7. Earnings per share

At 31 December 2014, there were 5,550,000 (2013: 5,750,000) of potentially issuable shares which are anti-dilutive; such shares may become dilutive in future periods.

8. Intangible assets

Licence fees are initially recognised at cost and are amortised over their useful economic life of 20 years. At 31 December 2014, the remaining amortisation period is 12 years.

Intellectual property is initially recognised at cost and is amortised over its estimated useful economic life of 20 years aligned to the underlying patents that have been granted. At 31 December 2014, the remaining amortisation period is 6 years.

The directors have performed a detailed impairment review to assess the recorded carrying value of the above assets against the net present value (discounted at an appropriate rate) expected to be generated from licences and royalties in the future. The methodology is adopted is explained in note 2.

The directors recognise that historic trading performance does not support the recorded carrying values of intangible assets but are confident the recent changes in the Board and the change in business and operational focus will result in a significant increase in future licence income and royalties. On this basis the directors consider that no impairment to the recorded carrying value of the above assets is required.

9. Plant and Machinery

10. Investments

Unlisted shares are carried at cost.

Associated company

The following entity meets the definition of an associate:

Proportion of voting rights

Name Country of incorporation Held at 31 December 2014

Delta Waste Management Limited United Kingdom 40%

Delta Waste Management Limited has not been accounted for as an associated undertaking. The cumulative profit and loss is not material to the company.

11. Trade and other receivables

The ageing analysis of receivables past due but not impaired is as follows:

All receivable balances are in sterling.

The company's main income is from licence and royalty fees. Accrued income and receivables relating to the UK licence holder are regularly reviewed by the board of directors to assess the recoverability of amounts due.

During 2012, accrued income of £1,708,000 was converted to a non-interest bearing trade loan repayable over five years. This debt arose from the renegotiation of the licence with 2K Manufacturing. At 30 June 2013, a provision was made of £1,608,000 against this trade receivable due to non-payment of the current outstanding balance due. A further provision of £75,000 has been made against current receivables. 2K Manufacturing was placed into administration in November 2013.

12. Trade and other payables - current

Book value is a fair approximation for fair value and debts are due for repayment under normal trading terms.

All trade and other payables fall due for payment within one year.

13. Borrowings

The carrying value (which is a reasonable approximation to fair value) of borrowings analysed by lender is as follows:

Cash loans advanced during the year totalled £1,159,000 (2013: £500,000). A further £1,911,906 (2013: £578,722) costs were incurred for finance charges for short term loans and arrangement fees. Loans totalling £nil (2013: £nil) were repaid and £nil (2013: £350,000) was converted during the year into Ordinary Shares.

The company has no other borrowing facilities.

On 12 October 2012, the balance of the Company's debt at that date (including all interest and fees) amounting to £1,841,369 was converted to a secured five year loan note carrying an interest rate of 2% above the Bank of England base rate. The balance of loans outstanding carries interest at 7.5%.

14. Related party transactions

Invoices totalling £63,188 (2013: £47,099) were received from the A H Brooks Partnership for services rendered and recoverable expenses. The partners are K W Brooks and Mrs N Brooks, wife of K W Brooks. The amount outstanding at the year-end was £5,430 (2013: £6,869), which was due to the A H Brooks Partnership.

Aston Hall Limited invoiced £49,524 (2013: £55,542) to the Company in respect of Director's fees and expenses for D C Shepley-Cuthbert who is also a director and controlling party of Aston Hall Limited. The amount outstanding at the year-end was £2,949 (2013: £7,123).

Delta Waste Management Limited invoiced £24,416 (2013: £45,574) to the Company in respect of consultancy fees and expenses for L A Clayton. Expenses outstanding at the year-end were £1,313 (2013: £600). Some of the amounts invoiced were offset against short term-loans made to Delta Waste Management Limited during the year of £4,243 (2013: £19,374) of which £13,794 (2013: £18,037) was outstanding at the year-end and is included in other debtors.

Jeremy Allen Consultancy Services invoiced £15,236 (2013: £nil) in respect of directors fees and expenses for J N Allen. The amount outstanding at the year-end was £3,941 (2013: £nil).

Oakridge Business Services Limited invoiced £4,500 (2013: £15,000) to the Company in respect of Director's fees for R J Baynham. The amount outstanding at the year-end was £nil (2013: £3,750).

15. Share based payments

Environmental Recycling Technologies plc operates an unapproved option scheme for Executive Directors, senior management and certain employees.

All share options outstanding at 31 December 2014 had vested and were exercisable. The outstanding options were all due to lapse at 2 October 2015.

The exercise price of options outstanding at the end of the year ranged between 2.5 pence and 48 pence (2013: 2.5 pence and 72 pence) and their weighted average contractual life was 0.16 years (2013: 1.4 years)

Environmental Recycling Technologies plc issues warrants to third parties for the provision of services rendered and the provision of finance.

All warrants outstanding at 31 December 2014 had vested and were exercisable. The warrants are due to lapse on 11 September 2015.

The exercise price of warrants outstanding at the end of the year was 2.5 pence (2013: 2.5 pence) and their weighted average contractual life was 1.7 years (2013: 1.7 years)