Biome Tech Regulatory News (BIOM)

14 Jul 2006 07:56

Stanelco PLC14 July 2006 The following replaces the Interim Results announcement released at 07:00 underRNS number 1963G. In "Highlights" the second bullet point should read "Loss before taxation of£2,337,000 (2005: £1,000,000)" and not "Loss before taxation of £2,100,000(2005: £960,000)". The full amended text appears below. 14 July 2006 Stanelco PLC Interim Results for the six months ending 30 April 2006 Highlights • Turnover of £2,600,000 (2005: £629,000) • Loss before taxation of £2,337,000 (2005: £1,000,000) • Starpol 2000 selling successfully into US marketplace and Starpol 3000 awaiting food contact approvals • Selection by Wal Mart into their Sustainable Value Network • Continued progress towards commercialisation of GREENSEAL technology with successful trials completed with 3 major food packers • Board strengthened with appointment of Clive Warner as Finance Director • Successful Placing of Ordinary Shares raising a total of £3.7 million (net of expenses) successfully completed with UK institutions Phillip Lovegrove, Chairman of Stanelco, commented: "Over the last six months we have continued to make good progress towards thecommercialisation of Stanelco's vast array of products and applications. We havecontinued to make considerable strides across all our product lines. "Our business operates in a fast moving and exciting space. The worldwidepackaging industry is fast waking up to the need for new solutions and productsthat are environmentally friendly whist being cost effective and practical. Weremain at the forefront of this revolution." For further information contact: Stanelco Martin Wagner, Chief ExecutiveTel: 44 (0) 2380 867 100 Press: Financial Dynamics Jonathon Brill/Billy CleggTel: 44 (0) 20 7831 3113 Investors: IR focus Neville HarrisTel: 44 (0)20 7378 7033 UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CHIEF EXECUTIVE'S STATEMENT The six months to 30 April 2006 have seen further progress and significantchange at Stanelco as the business develops its portfolio of products and therange of applications for its IP. This has taken the business from itsdevelopment and acquisition phases, where we have invested heavily in Research &Development, as well as the acquisition of Biotec, to the commercialisationphase of the considerable portfolio in our possession. Financial Review The Group has increased revenue from £0.6m to £2.6m for the period ended 30April 2006 compared to the corresponding period last year. The increase is dueto inclusion of six months sales by Biotec who had not been acquired by theGroup until the second half of last year. This compares favourably with fullyear sales of £1.4m for the year to 31 October 2005. The Group has made a lossof £2.3m for the six month period compared with £1m for the corresponding periodlast year. Increased costs have been incurred on the various initiatives thathave been vigorously pursued. The Group started the period with a cash balance of £4.4m and has madeinvestments in research and development of £0.6m and increased its levels ofstock from £2.6m at the year end to £3.1m. We have also invested £1.2m incapital expenditure in the period. Closing cash was £0.3m at 30 April 2006. Since the half year end, the Group has raised £3.7m (net of expenses) by way ofan equity placing in June 2006 of which £1.6m has been used to meet a stagepayment for the acquisition of Biotec and £2.1m is being utilised as workingcapital The Group is currently considering its funding requirements and funding optionsfor the next phase of its development. Shareholders funds have reduced by £0.9m to £15.8m in the period. International Financial Reporting Standards (IFRS) These statements have been prepared under IFRS for the first time. Comparativefigures have been restated to reflect the changes in accounting treatmentrequired by IFRS. Full details of the adjustments and the effect on thefinancial statements of the Group are disclosed in Appendix 1. The majordifferences between our prior accounting practice and IFRS have been in respectof Share Based Payments (IFRS 2) and the fact that goodwill is no longeramortised (IAS 38). The charge for share based payments is £254k for the period(2005: £113k restated). Goodwill amortisation was £72k for the period to April2005 and has now been re-instated. Board Changes The Board has been further restructured and strengthened. Clive Warner has beenappointed as our Finance Director, bringing considerable commercial experienceto the management team. Significant Developments Stanelco is working with some of the largest companies in the world. Theircontinued interest in our products is encouraging and we are working together toprogress the opportunities. A close partnership has been established withPerseco U.S. to advance the commercialisation of Stanelco's sustainabletechnologies. Stanelco were one of the few companies selected by Wal Mart to be involved intheir Sustainable Value Network (SVN). This provides an excellent platform fromwhich to explore the future packaging requirements for retailers. We also achieved a number of other milestones over the period. These included: • Starpol 2000 (biodegradable material) has been accredited full food contact approval from European and US regulatory bodies and is selling in the US market. • Development of Starpol 3000 (100% sustainable and biodegradable) is complete. Similar food contact approvals are being sought. • Technical trials have been successfully completed on Multivac and Proseal packaging machines at three major food packers for the Greenseal project. Products & Businesses Biotec and Biodegradable materials We have made major strides in developing our full range of biodegradablematerials, taking full use of our skills and expertise with Biotec. Thefollowing summarises the progress made through the year and the current statuson these products. Starpol 2000 has achieved European and US regulatory approval for food contactand is being used for food trays and other products. This can be processed onmost conventional machines and will not require major capital investment byconvertors. Wrap 100, a biodegradable replacement for wax coated paper, will help to improvepackaging quality in the food industry and provides benefits to the environment.This material's properties do not allow oil or moisture to pass through it,whilst permitting moisture vapour to permeate out. It can be used for fast foodslike burgers as it stops condensation occurring which can adversely affect foodquality. It competes on a cost neutral basis with the currently used productsand is also significantly lighter. This presents potential cost savings on theproduct with reduced transport costs and landfill taxes. Starpol 3000, is a cost competitive,100% sustainable and biodegradable materialwhich also provides a gas barrier for MAP ( Modified Atmosphere Packaging toextend shelf life) matching industry standards. To meet the potential demands for these products we are in discussion withoperators in the food industries to establish resin manufacturing partnerships. Adept Polymers Adept continues to provide the expertise to promote the groups products andassist in the development of the Starpol ranges along with the marketing of itsDepart PVOH and Starpol blends of pellet, films and materials . We have invested in equipment to enable us to develop the cigarette filtertrials and, with our advisers, we are continuing to evaluate the marketopportunities. We are currently in the process of manufacturing samples offilters. Adept and Aquasol, combining with Biotec, continue to work with Carclo Plc indeveloping and commercialising ingestible injection mouldable grades of materialfor hard shell capsules for vetinary and then pharmaceutical applications. Aquasol Aquasol has developed a range of patent protected packaging technologies anddesigns. Aquasol receive royalty streams from Reckitt Benckiser's Finish Quantum andElectrasol Gelcaps products. The FrogPack Products are now being manufactured and distributed under agreementwith Merlin Packaging in the UK (who recently acquired Mondi Packaging). We have entered into an agreement with Berkshire Security Labels, the largestsuppliers of security labelling products in Europe, to develop, manufacture andsell Pulsline. Outlook The Board is concentrating its efforts on converting opportunities intocommercial contracts. It is confident that the strengthened management teamwill bring expertise, energy and commitment to meet these challenges. We have developed strong partnerships and key relationships with leadingorganisations. We are confident that our intellectual property portfolio will in time bringenvironmental benefits to both the packaging industry and the consumer and as aresult enhance shareholder value Martin WagnerChief Executive 13 July 2006 STANELCO TRADEMARKS Starpol is a registered trademark in the European Community, PulseLine is aregistered trademark in the UK. Starpol 2000, Starpol 3000, GreenSeal, FrogPack, FrogMat and FrogWrap are alltrademarks of the Stanelco Group. UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 Independent auditors' review report To the shareholders of Stanelco plc Introduction We have been instructed by the company to review the financial information setout on pages 7 to 19 and we have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The Listing Rulesof the Financial Services Authority require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and based thereon, assessingwhether the accounting policies and presentation have been consistently appliedunless otherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with AuditingStandards and therefore provides a lower level of assurance than an audit.Accordingly we do not 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 April 2006. Jeffreys Henry LLP Chartered AccountantsRegistered Auditors Finsgate 5-7 Cranwood StreetLondon EC1V 9EE 13 July 2006 UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CONDENSED CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 APRIL 2006 Unaudited Unaudited Six Six Audited months months Year ended ended ended 30 April 30 April 31 October 2006 2005 2005 £'000 £'000 £'000 REVENUE 2,620 629 1,454 Cost of sales (1,539) (407) (889) ------------------------------------------Gross profit 1,081 222 565 Distribution costs (87) (24) (67)Administrative expenses (3,331) (1,231) (3,200)Exceptional item - - (690) ------------------------------------------LOSS FROMOPERATIONS (2,337) (1,033) (3,392) Investment revenue netof finance costs 5 33 133 ------------------------------------------LOSS BEFORE TAX (2,332) (1,000) (3,259)Tax - 23 37 ------------------------------------------LOSS FOR THEPERIOD (2,332) (977) (3,222) ------------------------------------------Attributable to:Equity holders of theparent (2,341) (973) (3,150)Minority interest 9 (4) (72) ------------------------------------------RETAINED FOR THEPERIOD (2,332) (977) (3,222) ------------------------------------------ EARNINGS PERSHARE Basic and diluted lossper share - pence (0.249) (0.114) (0.363) ------------------------------------------ UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 APRIL 2006 Share Share Shares Share Hedging Retained ATTRIBUTABLE Minority TOTAL capital premium to be options and losses TO EQUITY interest EQUITY account issued reserve translation HOLDERS OF reserves THE PARENT £'000's £'000's £'000's £'000's £'000's £'000's £'000's £'000's £'000'sBalance at 1November2004 832 5,209 2,500 71 - (2,451) 6,161 22 6,183 ----------------------------------------------------------------------------------------------------- New sharecapitalsubscribed 50 5,162 5,212 5,212 Shareoptioncharges inperiod 113 113 113 Exchangedifferencesrising ontranslationof overseasoperation 9 9 17 26 ----------------------------------------------------------------------------------------------------- Net incomerecogniseddirectly inequity 50 5,162 - 113 - 9 5,336 17 5,351 -----------------------------------------------------------------------------------------------------Loss for theperiod (973) (973) (4) (977) -----------------------------------------------------------------------------------------------------Balance at30 April2005 882 10,371 2,500 184 - (3,415) 10,524 35 10,557 ----------------------------------------------------------------------------------------------------- Balance at 1November2005 929 19,899 1,050 393 19 (5,600) 16,690 2,498 19,188 ----------------------------------------------------------------------------------------------------- New sharecapitalsubscribed 15 1,407 1,422 1,422 Shareoptioncharges inperiod 254 254 254 Shareoptionsexercised inperiod (41) 41 - - Exchangedifferencesarising ontranslationof overseasoperation (196) (196) (196) ----------------------------------------------------------------------------------------------------- Net incomerecogniseddirectly inequity 15 1,407 - 213 (196) 41 1,480 - 1,480 -----------------------------------------------------------------------------------------------------Loss for theperiod (2,341) (2,341) 8 (2,333) -----------------------------------------------------------------------------------------------------Balance at30 April2006 944 21,306 1,050 606 (177) (7,900) 15,829 2,506 18,335 ----------------------------------------------------------------------------------------------------- UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CONDENSED CONSOLIDATED BALANCE SHEETAT 30 APRIL 2006 Note Unaudited Unaudited Audited Audited At 30 April At 30 April At 31 October At 31 October 2006 2006 2005 2005 £'000 £'000 £'000 £'000NON-CURRENT ASSETSGoodwill 13,930 13,930Other intangibleassets 6,116 5,755Property, plant andequipment 4,238 3,235 ------------ ------------ 24,284 22,920 CURRENT ASSETSInventories 3,144 2,604Trade and otherreceivables 1,276 1,155Amounts due onpart disposal ofsubsidiary 5 3,438 3,531Corporation tax 3 60Cash and cashequivalents 292 4,396 ------------ ------------ 8,153 11,746 ------------ ------------TOTAL ASSETS 32,437 34,666 ------------ ------------ CURRENTLIABILITIES Trade and otherpayables 1,474 1,581 Amounts due tothird party inrespect of purchaseof subsidiary 3,438 3,531Promissory notes 5,317 5,168Tax liabilities - 8Obligations underfinance lease 43 38Bank overdrafts andloans 19 21Short termprovisions 209 1,453 ------------ ------------ 10,500 11,800 ------------ ------------NON-CURRENTLIABILITIESAmounts due tothird party inrespect of purchaseof subsidiary 3,438 3,531Obligations underfinance lease 65 36Bank loans 99 111 ------------ ------------ 3,602 3,678 ------------ ------------ TOTALLIABILITIES 14,102 15,478 ------------ ------------ ------------ ------------NET ASSETS 18,335 19,188 ------------ ------------ UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CONDENSED CONSOLIDATED BALANCE SHEET CONTINUEDAT 30 APRIL 2006 Unaudited Audited At 30 At 31 April 2006 October 2005 £'000 £'000 EQUITYShare capital 944 929Share premiumaccount 21,306 19,899Shares to be issued 1,050 1,050Share options reserve 606 393Hedging andtranslation reserves (177) 19Retained losses (7,900) (5,600) ------------ ------------ EQUITYATTRIBUTABLE TOEQUITY HOLDERSOF THE PARENT 15,829 16,690Minority interest 2,506 2,498 ------------ ------------TOTAL EQUITY 18,335 19,188 ------------ ------------ The Interim Accounts were approved by the Board of Directors and authorised forissue on 13 July 2006 They were signed on behalf of the Board of Directors by: Martin J Wagner (Chief Executive Officer) Clive H Warner (Finance Director) UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC CONDENSED CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30 APRIL 2006 Unaudited Unaudited Six Six Audited months months Year ended ended ended 30 April 30 April 31 October 2006 2005 2005 Note £'000 £'000 £'000NET CASH OUTFLOW FROMOPERATINGACTIVITIES 4 (3,551) (2,245) (4,138) ------------------------------------------ INVESTING ACTIVITIESInterest received 39 18 168Proceeds on disposal ofproperty, plant and equipment 7 10 25Investment in intangible assets (582) (717) (3,436)Purchase of property, plant andequipment (1,262) (140) (807)Purchase of subsidiary - - (7,082)Part disposal of subsidiary - - 3,372Cash at bank acquired with subsidiary - - 65 ------------------------------------------ NET CASH USED ININVESTING ACTIVITIES (1,798) (829) (7,695) ------------------------------------------FINANCING ACTIVITIES Dividend paid - (1) (1)Repayment of loan capital (14) (14) (15)Repayment of obligations underfinance lease (42) (9) (19)Proceeds of issue of ordinaryshare capital 1,422 5,212 14,287Proceeds of issue of shares insubsidiary to minority interest - - 1,015New finance lease 76 - 42 ------------------------------------------NET CASH FROM FINANCINGACTIVITIES 1,442 5,188 15,309 ------------------------------------------NET (DECREASE)/ INCREASEIN CASH AND CASHEQUIVALENTS (3,907) 2,114 3,476 CASH AND CASHEQUIVALENTS AT BEGINNINGOF PERIOD 4,396 920 920Effect of foreign exchange ratechanges (197) - - ------------------------------------------CASH AND CASHEQUIVALENTS AT END OFPERIOD 292 3,034 4,396 ------------------------------------------ UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC NOTES TO THE CONDENSED CONSOLIDATED INTERIM ACCOUNTSFOR THE SIX MONTHS ENDED 30 APRIL 2006 Notes 1. Earnings per share from continuing operations The basic loss per share is based on a loss after tax of £2,332,000 (2005£977,000) and on the basic weighted average ordinary shares in issue during theperiod of 937,779,292 (2005:857,040,675). 2. Research and development expenditure Research and development expenditure of £582,000 (2005: £717,000) has beenincurred in the period. Of this expenditure £582,000 (2005: £717,000) has beencapitalised as an intangible asset to be amortised against future revenues.Expenditure of this type is only capitalised where the Board is of the opinionthat future revenues will exceed the costs incurred over the expected productlife in accordance with International Accounting Standard 38. 3. Post balance sheet Placing On 8th June Stanelco announced that it had placed 46,939,939 ordinary shares ata price of 8.1p per share to raise approximately £3.8m (approximately £3.7mafter expenses). The proceeds of this placing were used to meet the next stagepayment in respect of the acquisition of Biotec £1.6m and to provide workingcapital. 4. Notes to condensed consolidated cash flow statement Unaudited Unaudited Six Six Audited months months Year ended ended ended 30 April 30 April 31 October 2006 2005 2005 £'000 £'000 £'000 Loss from operations (2,337) (1,033) (3,393)Adjustment for:-Amortisation and impairment ofintangible fixed assets 221 187 422Depreciation of property, plantand equipment 246 71 216Share based payments 254 113 325Loss on disposal of property,plant and equipment 6 - 10(Decrease)/increase inprovisions (1,244) (397) 262 ------------------------------------------Operating cash flows beforemovement in working capital (2,854) (1,059) (2,158) (Increase) in inventories (540) (825) (1,504)(Increase) in receivables (28) (37) (172)(Decrease) in payables (144) (310) (261) ------------------------------------------Cash utilised by operations (3,566) (2,231) (4,095) Corporation tax received/(paid) 49 (11) (10)Interest paid (34) (3) (33) ------------------------------------------Net cash (outflow) fromoperating activities (3,551) (2,245) (4,138) ------------------------------------------ Additions to property, plant and equipment during the period amounting to £76kwere financed by new finance leases. 5. Current assets Unaudited Audited At 30 April At 31 October 2006 2005 £'000 £'000Amounts due on partdisposal of subsidiary 3,438 3,531 ----------- ------------ Amounts included abovereceivable after more thanone year 1,719 1,766 ----------- ------------ 6. Changes in accounting policies The principal accounting policies of the Group have remained unchanged as in theGroup's 2005 Annual Report and Financial Statements with the exception of thoseset out in the Appendix to reflect changes required as a result of adoptingIFRS. 7. Condensed Consolidated Interim Accounts The financial information contained in this interim statement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The results are unaudited but have been reviewed by the auditors. Thefinancial information for the year to 31 October 2005 and the six months ended30 April 2005 has been extracted from the group's IFRS transitional document(see appendix), which were based on the group's 2005 Annual Review and the 2005interim report. The 2005 Annual Review has been filed with the Registrar ofCompanies. The audit report on the Annual Review 2005 was unqualified and didnot contain a statement under Section 237 (2) or (3), of the Companies Act 1985. This interim statement is being sent to all shareholders and is also availableupon request from the Company Secretary, Stanelco plc, Starpol TechnologyCentre, North Road, Marchwood, Southampton SO40 4BL or viewed at http://www.stanelcoplc.com/investor_reports.html. The IFRS transitional document is anappendix to this report. UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC APPENDIX - Transition Statement Reconciliation from UK GAAP to IFRS As part of the European Commission's plan to develop a single European capitalmarket, all publicly quoted European companies in the EU are required to prepareconsolidated financial statement in accordance with International FinancialReporting Standards (IFRS) as adopted by the European Commission in respect ofaccounting periods commencing on or after 1 January 2005. Up to and including the accounting period to 31 October 2005, Stanelco plc (theGroup) prepared its consolidated financial statement in accordance with UK GAAP(Generally Accepted Accounting Principles). The balance sheets and income statements that follow reconcile IFRS to previousUK GAAP for the primary financial statements. Key Differences The key reconciling items between IFRS to previous UK GAAP for the primaryfinancial statements arise from the adoption and first time application of thefollowing IFRS standards: • International Financial Reporting Standard 2: Share Based Payments (IFRS 2). • International Accounting Standards 38: Intangible Assets (IAS38). The 2005 opening balance sheet and financial statements have now been adjustedto reflect adoption of IFRS. Full details of the adjustments and the effect ofthe adjustments on the financial statement of the Group are disclosed later inthis Appendix. The major differences between our prior accounting practice andIFRS have been in respect of Share Based Payments (IFRS 2) and the fact thatgoodwill is no longer amortised (IAS 38) and previous amortisation charges havebeen reversed. REVISED PROVISIONAL GROUP ACCOUNTING POLICIES UNDER IFRS Goodwill All business combinations are accounted for by applying the purchase method.Goodwill represents amounts arising on acquisition of subsidiaries, jointventures and associates. In respect of business acquisitions goodwill representsthe difference between the cost of acquisition and the fair value of the netidentifiable assets acquired. Goodwill is allocated to cash generating units andis now no longer amortised but is tested annually for impairment at a consistenttime each year. Goodwill is now stated at cost or deemed cost less anyaccumulated impairment losses. Employee benefits Share-based payment transactions The share option programmes allows Group employees to acquire shares of theCompany. The fair value of options granted under the programme is recognised asan expense with a corresponding increase in equity. The fair value is measuredat grant date and spread over the period during which the employees becomeunconditionally entitled to the options. The fair value of the options grantedis measured using the Black-Scholes formula, taking into account the terms andconditions upon which the options were granted. In accordance with the exemption allowed on transition to IFRS, the fair valuecalculations in respect of share based payments under International FinancialReporting Standard 2: Share Based Payments (FRS 2), have only been applied inrespect of share options granted after 7 November 2002 that have not vested by 1January 2005. UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006STANELCO PLC Appendix 1 Consolidated balance sheet at 31 October 2005RECONCILIATION FROM UK GAAP TO IFRS Previous Share UK GAAP based IFRS at at 31 Goodwill payments 31 October Amortisation IFRS 2 October 2005 IAS 38 Note1 Note 2 2005 £'000's £'000's £'000's £'000's -----------------------------------------------------------------NON CURRENT ASSETSGoodwill 13,625 305 - 13,930Other intangiblesassets 5,755 5,755Property, plant andEquipment 3,235 3,235 ----------------------------------------------------------------- 22,615 305 - 22,920 -----------------------------------------------------------------CURRENT ASSETSInventories 2,604 2,604Trade and otherreceivables 1,155 1,155Amounts due on partdisposal of subsidiary 3,531 3,531Corporation tax 60 60Cash and cashequivalents 4,396 4,396 ----------------------------------------------------------------- 11,746 - - 11,746 ----------------------------------------------------------------- TOTAL ASSETS 34,361 305 - 34,666 ----------------------------------------------------------------- CURRENTLIABILITIESTrade and otherpayables 1,581 1,581Amounts due to thirdparty in respect ofpurchase of subsidiary 3,531 3,531Promissory notes 5,168 5,168Tax liabilities 8 8Obligations underfinance lease 38 38Bank overdrafts andloans 21 21Short term provisions 1,453 1,453 ----------------------------------------------------------------- 11,800 - - 11,800 ----------------------------------------------------------------- NON-CURRENTLIABILITIESAmounts due to thirdparty in respect ofpurchase of subsidiary 3,531 3,531Obligations underfinance lease 36 36Bank loans 111 111 ----------------------------------------------------------------- 3,678 - - 3,678 ----------------------------------------------------------------- TOTAL LIABILITIES 15,478 - - 15,478 ----------------------------------------------------------------- NET ASSETS 18,883 305 - 19,188 ----------------------------------------------------------------- UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC Consolidated balance sheet at 31 October 2005RECONCILIATION FROM UK GAAP TO IFRS continued Previous Share based UK GAAP Goodwill Payments IFRS at at 31 Amortisation IFRS 2 31 October IAS 38 Note1 Note 2 October 2005 2005 UK GAAP at 31 October 2005 £'000's £'000's £'000's £'000's ---------------------------------------------------------------------- EQUITYShare capital 929 929Share premium 19,899account 19,899Shares to be issued 1,050 1,050Share options reserve - - 393 393Hedging andtranslation reserves 19 19Retained losses (5,512) 305 (393) (5,600) ----------------------------------------------------------------------EQUITYATTRIBUTABLE TOEQUITY HOLDERSOF THE PARENT 16,385 305 - 16,690Minority interest 2,498 2,498 ----------------------------------------------------------------------TOTAL EQUITY 18,883 305 - 19,188 ---------------------------------------------------------------------- UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC Consolidated income statement for the year ended 31 October 2005RECONCILIATION FROM UK GAAP TO IFRS Previous Goodwill UK GAAP Amortisation Share Year IAS 38 Note1 based IFRS year ended 31 payments ended 31 October IFRS 2 October 2005 Note 2 2005 £'000's £'000's £'000's £'000's Revenue 1,454 1,454Cost of sales (889) (889) --------------------------------------------------------------Gross profit 565 - - 565Distribution costs (67) (67)Administrative expenses (3,810) 244 (325) (3,890) --------------------------------------------------------------Loss from operations (3,312) 244 (325) (3,392)Investment revenue 168 168Finance costs (35) (35) --------------------------------------------------------------Loss before tax (3,179) 244 (325) (3,259)Taxation 37 37 --------------------------------------------------------------Loss for the period (3,142) 244 (325) (3,222) -------------------------------------------------------------- Attributable to:Equity Holders of the (3,070) 244 (325) (3,150)parentMinority interest (72) (72) --------------------------------------------------------------Retained for the period (3,142) 244 (325) (3,222) -------------------------------------------------------------- Weighted averageordinary shares 888,097,434 888,097,434Basic and diluted lossper share (0.354)p (0.363)p -------------------------------------------------------------- UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC Consolidated balance sheet at 30 April 2005RECONCILIATION FROM UK GAAP TO IFRS Previous Share UK GAAP based at 30 Goodwill payments IFRS at April Amortisation IFRS 2 30 April 2005 IAS 38 Note1 Note 2 2005 £'000's £'000's £'000's £'000's ------------------------------------------------------------NON CURRENT ASSETSGoodwill 2,758 132 - 2,890Other intangiblesassets 3,273 3,273Property, plant andequipment 992 992 ------------------------------------------------------------ 7,023 132 - 7,155 ------------------------------------------------------------CURRENT ASSETSInventories 1,435 1,435Trade and otherreceivables 640 640Corporation tax 36 36Cash and cashequivalents 3,034 3,034 ------------------------------------------------------------ 5,145 - - 5,145 ------------------------------------------------------------TOTAL ASSETS 12,168 132 - 12,300 ------------------------------------------------------------CURRENTLIABILITIESTrade and otherpayables 872 872Obligations under 14 14finance leaseBank overdrafts and 22 22loansShort term provisions 696 696 ------------------------------------------------------------ 1,604 - - 1,604 ------------------------------------------------------------NON-CURRENTLIABILITIESObligations under 28 28finance leaseBank loans 111 111 ------------------------------------------------------------ 139 - - 139 ------------------------------------------------------------ ------------------------------------------------------------TOTAL LIABILITIES 1,743 - - 1,743 ------------------------------------------------------------ ------------------------------------------------------------NET ASSETS 10,425 132 - 10,577 ------------------------------------------------------------EQUITYShare capital 882 882Share premium 10,371 10,371accountShares to be issued 2,500 2,500Share options reserve - - 184 184Retained losses (3,363) 132 (184) (3,415) ------------------------------------------------------------EQUITY 10,390 132 - 10,522 ATTRIBUTABLE TOEQUITY HOLDERSOF THE PARENTMinority interest 35 35 ------------------------------------------------------------TOTAL EQUITY 10,425 132 - 10,557 ------------------------------------------------------------ UNAUDITED INTERIM CONSOLIDATED ACCOUNTS 2006 STANELCO PLC Consolidated income statement for the period to 30 April 2005RECONCILIATION FROM UK GAAP TO IFRS Previous Goodwill Share IFRS UK GAAP Amortisation based period period IAS 38 Note1 payments ended 30 ended 30 IFRS 2 April 2005 April 2005 Note 2 £'000's £'000's £'000's £'000's Revenue 629 629Cost of sales (407) (407) ------------------------------------------------------------Gross profit 222 - - 222Distribution costsAdministrative expenses (1,214) 72 (113) (1,255) ------------------------------------------------------------Loss from operations (992) 72 (113) (1,033)Investment revenue 36 36Finance costs (3) (3) ------------------------------------------------------------Loss before tax (959) 72 (113) (1,000) Taxation 23 23 ------------------------------------------------------------Loss for the period (936) 72 (113) (977) ------------------------------------------------------------Attributable to:Equity Holders of the parent (932) 72 (113) (973)Minority interest (4) (4) ------------------------------------------------------------ Retained for the period (936) 72 (113) (977) ------------------------------------------------------------ Weighted average 857,040,675 857,040,675ordinary sharesBasic and diluted loss per share (0.109)p (0.114)p ------------------------------------------------------------ Notes to accompany the Consolidated Income Statement and Consolidated BalanceSheet six months ended 30 April and year ended 31 October. Reconciliation from UK GAAP to IFRS 1 Under International Accounting Standard 38: Intangible assets (IAS 38) goodwill is no longer amortised on a straight line basis, but instead is subject to annual impairment testing under International Accounting Standard 36 (IAS 36). Goodwill totalling £305,000 which had previously been amortised to the profit and loss account has been reinstated in the balance sheet. This has resulted in a reduction in administration expenses of £244,000 for year ended 31 October 2005 and £72,000 for the interim period to 30 April 2005. 2 Under International Financial Reporting Standard No. 2: Share Based Payments (IFRS 2) the fair value of share based payments are expensed in the income statement throughout their vesting period. In accordance with IFRS 2, the fair value calculations have only been applied in respect of share based payment transactions granted after 7 November 2002 that had not vested by 1 January 2005. Had IFRS 2 been in place during the financial year ended 31 October 2005 the pre-tax loss would have been increased by £113,000 for the six months ended 30 April 2005 and £325,000 for the year ended 31 October 2005. END This information is provided by RNS The company news service from the London Stock Exchange