Biome Tech Regulatory News (BIOM)

28 Feb 2006 07:02

Stanelco PLC28 February 2006 28th February 2006 Stanelco PLC ("Stanelco", "the Company" or "the Group") Preliminary Results for the Year ended 31st October 2005 Highlights • Turnover of £1.5 million (2004: £1.3 million) • Loss on ordinary activities before taxation of £3.2 million (2004: loss £2.8 million) • Strategy focussed on the transformation from a manufacturer and supplier of capital goods to an IP business • Two successful placings of Ordinary Shares with UK institutions, raising a total of £14.3 million (before expenses) • Acquisition of Biotec GmbH in September for US$25 million • Continued work towards commercialisation of GREENSEAL lidding project; ASDA supplier machines are currently being commercialised Philip Lovegrove, Chairman of Stanelco PLC, commented: "This has been a significant year for the Company as it continued to transforminto a leading Intellectual Property business, making good progress in relationto the developments of GREENSEAL, Starpol and Biotec products. "With a strong management team and growing opportunities for our products, welook forward to the next year with optimism as we work towards thecommercialisation of our technologies." For further information please contact: Martin Wagner, Chief Executive Officer Tel: 02380 867100Stanelco PLC Jonathon Brill/Caroline Stewart Tel: 020 7831 3113Financial Dynamics CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005 STANELCO PLCCHAIRMAN'S STATEMENT The Board's strategy over the last year has been to continue the transformationof the Group from a manufacturer and supplier of capital goods into anintellectual property business. This allows the Company to exploit the Group'score technologies in Radio Frequency Technology, RF Applications andBiodegradable starch film material directed at the international packagingindustry. Stanelco's involvement with Walmart Sustainable Value Network in the UnitedStates announced recently is an illustration of this strategy. Your Company isnow initiating a series of investigations as to how best to meet the potentialrequirements of retailers and fast food outlets by establishing joint venturemanufacturing units to supply converters with Starpol starch based material. The intention is to offer a number of manufacturing licences in the US toproduce its range of materials through a micro manufacturing program for supplyto the supermarket and quick service restaurant industry. These licences willenable converters to ensure a guaranteed supply of biodegradeable material inorder to satisfy the demands of these industries. Each licence will be for aminimum of 20,000 tonnes and will be operated as joint ventures. This programwill ensure the availability of product in order that the market will be able tohave a rapid uptake of biodegradable materials. Recent negotiations withmanufacturers that are particularly concerned with the future of petroleum basedplastics have shown great interest in vertically integrating resin production inor beside their plants. The Managing Director's Statement and the Chief Executive's Review provide adetailed and extensive analysis of the various strategies and innovationsundertaken by the Company in the financial year. The Group has made steadyprogress which is continuing in the current year. The accounts for the year show a loss for the group of £3.2 million on aturnover of £1.5 million. Turnover is primarily related to sales of traditionalRF equipment, the receipt of royalties from Aquasol products and two months ofsales of materials from our subsidiary Biotec which we acquired in September2005. The operating loss of £3.2 million was principally due to substantialfurther investment in research and development and considerable managementinvolvement in procuring joint venture partners and building our capabilities togrow the business in the pursuit of our main objectives. These continue toensure that the commercialisation of the GREENSEAL lidding project is achievedas is the exploitation of the markets for our range of environmentallyresponsible packaging materials. An additional £690,000 charge in the yearrelates to the recent settlement of our legal dispute in regard to defence ofpatents. The Group's balance sheet was strengthened as funds were raised on two occasionsduring the year. £14.3 million of equity funding (net of expenses) wassuccessfully raised in order to continue the Group's investment in technology,and £7.1 million of this was utilised in relation to the first instalment of thepurchase of our 50% owned subsidiary Biotec in Germany in partnership withSPhere (formerly SP Metal) of France. A further investment of EU1.5 million wasmade by each shareholder of Biotec in order to fund expansion of Biotec'sresearch and production facilities. The Board is not recommending a dividend for the financial year under review,but will consider distributions as soon as the Company's profitability warrantssuch a decision. During the last two years the Group has been moving rapidly from a research anddevelopment base to a commercialisation phase. In order to keep pace with themanagement requirements of the Group, the Board has recently revised thestructure of the management organisation. The Group Board now consists ofmyself as Chairman, Elizabeth Filkin as Senior Independent non-ExecutiveDirector, together with Martin Wagner as Chief Executive, Ian Balchin asExecutive Vice-Chairman, Robert Boardman as Finance Director and Howard White asManaging Director and President of Stanelco's U.S. Operations. An ExecutiveManagement Board has been established to manage and supervise the day-to-dayactivities of the Group and as a result Terry Robins, Robert Duggan and GrahamWhitchurch have been appointed to this body. They have resigned from the GroupBoard which will now focus on strategy and finance in accordance with CorporateGovernance Guidelines. The Board continues to be greatly encouraged at the recent substantialdevelopments made by the Group and it looks forward to further progress in thisfinancial year. Philip LovegroveChairman27 February 2006 MANAGING DIRECTORS STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005 STANELCO PLCMANAGING DIRECTORS STATEMENT The Group has been in a transitional phase which is now coming to an end. Therehave been significant strides forward in this time with regard to GREENSEAL andour biodegradable product offerings which are new, groundbreaking, innovativeand exciting. The opportunities for commercialisation are substantial and as aresult we have attracted the attention of some of the largest companies in theworld. The message coming back from these companies is that we have the productranges, at the right price, which is engaging their attention at the highestlevel. It is clear that our products can help meet the increasing demand forenvironmental responsibility. Whilst the specific requirements in Europe arebiodegradability, compostability and sustainability, in the U.S. it is primarilyabout sustainability, always with cost competitiveness in mind. We areencouraged that our product ranges comfortably satisfy most requirements inthese areas. In 2005 we began to develop these technologies into a targeted marketplace. Theacquisition of Biotec GMBH allows us to have a complete solution to theenvironmentally, cost competitive challenges that face the packaging worldtoday. We believe 2006 will be the year that we commence full commercialisationof these technologies. In order to satisfy likely market demand for ourbiodegradable materials it will be necessary to build a number of manufacturingplants referred to as micro manufacturing facilities in the Chairman'sstatement. This will enable us to build up our capacity much more rapidly as wewill be in partnership with existing end users, who have the manpower and skillsto achieve production goals in a short time frame. This will also help toprovide global availability for our products. With regard to GREENSEAL, our ongoing co-operation with a number of OriginalEquipment Manufacturers ("OEMs") will ensure that as soon as we havecommercially demonstrated the process in its totality, the OEMs will be readyto offer GREENSEAL technology as an option on their new machines. Research andDevelopment is by its very nature frustrating, often seeming like two stepsforward and one step back. The development of GREENSEAL technology has been noexception and mirrors similar experiences in the process engineering industry onproduction machinery. However, we have now reached the point where we aretesting the equipment in a commercial environment on an extended shift workbasis. Harald Schmidt, MD of Biotec in Germany has in Starpol 2000 developed anincredibly versatile material that can be blown into film, cast into sheet andinjection moulded, all on standard equipment. I would like to give someindication of our potential market, especially in the US. We are evaluating onetray, for one customer that has a current usage of 1.5 billion units per annum.Each tray weighs approx 50 grams and therefore consumes around 75,000 tonnes of(non-environmentally friendly) plastic a year. It would require between 500 and600 tray lidders to seal just these trays. We are able to offer a completesolution through the supply chain. Stanelco therefore finds itself at the forefront of addressing a lot of theenvironmental issues that exist today. Our experience to date has shown us thatwhilst the environment is a cause celebre at this time, the message is loud andclear, solve it but at no extra cost. We believe that our solutions are atworst, cost neutral but in most cases, cost beneficial to the end user. What isrevolutionary about our offering is that Starpol 3000 is less expensive thancurrent APET prices but its performance is comparable. There are still somesignificant developments going on but we believe that we lead the world in thesefunctional products and that we are significantly ahead of any competition withcomprehensive patent cover on all of our technologies. From a management perspective we have, over the last year, built up a strongermanagement team, and I particularly welcome the addition of Martin Wagner tospearhead the commercialisation phase of Stanelco's growth. We have madeenormous strides in the US under Stephanie Morgan-Fisher, CEO, where recentdevelopments have alluded to much greater things to come, and the assistance ofGraham Whitchurch, MD of Adept Polymers has accelerated this situation and Iacknowledge the many hours he has spent travelling to potential customers overthe last months. I continue to work closely with Ian Balchin and the rest of theboard and executive team; we continue to look to strengthen ourselves to meetthe demanding and exciting challenges ahead. Howard WhiteManaging Director27 February 2006 CHIEF EXECUTIVE'S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005 STANELCO PLCCHIEF EXECUTIVE'S STATEMENT GREENSEAL During the year Stanelco has continued to develop its RF sealing platformtechnology for the welding of recyclable plastic 'mono materials' fortray-lidding and thermoforming, specifically for the food packaging market. Thisprocess offers substantial financial benefits to food packing houses,supermarkets and an improved end product for consumers. The process replacesheat-sealing as the method for sealing plastic film lids on to plastic trays forfood packaging. By using Stanelco's GREENSEAL technology it is possible to offer considerablesavings to both the retailers and their food packers by: • eliminating the need for a PE layer and creating a secure seal, even through contamination. This should considerably reduce wastage rates from the factory and through the supply chain to the retailer. • using a mono material means the tray is fully recyclable and all factory waste can be reused. • replacing heat sealing methods with GREENSEAL can provide a further energy saving of up to 70 per cent. • reducing the waste and financial penalties associated with leaking packs Stanelco licences GREENSEAL technology to the end users and will retainownership of the patented RF system. End users pay a yearly license fee thatincludes maintenance of the system and ongoing user training and operationaltechnology updates. Patents in regard to key aspects of this technology havealso been applied for. We announced on 29 July 2005 that we had signed a contract with ASDA Stores foran exclusive arrangement for a minimum of one year for the UK and Ireland tointroduce GREENSEAL technology to a minimum of 200 machines into ASDA's supplierbase. The first two of these machines are in the process of beingcommercialized at two of ASDA's suppliers. We are currently working with ASDA and five of its key suppliers including thosereferred to above to fulfil the initial stage of the ASDA contract. In addition, we are working with a key player in the produce market to adaptGREENSEAL technology for use with vertical form fill seal machines - in a marketwhich is even larger than tray lidding The Company is also making significant progress with a number of OriginalEquipment Manufacturers (OEMs) to adopt GREENSEAL as an option. This is likelyto lead to further opportunities of deliveries in parallel to the retro fitprogramme with ASDA and increase the rate of roll out. The Group continues towork closely with a number of equipment manufacturers, including Reiser (USA)and Mondini (Italy). Interest in GREENSEAL remains high outside the UK. The Company remains inactive negotiation with other major supermarket chains in both the US andContinental Europe. Discussions continue with Walmart in regard to GREENSEAL andother Stanelco technologies. The first US specification machine is now in theUnited States with our partner Advanced Technologies for further developmentprior to being shown to potential US customers. BIOTEC AND STARPOL MATERIALS In September 2005 we completed the purchase of Biotec from EKI and thesubsequent part disposal to Sphere. Biotec is one of the world's leading exponents of starch technology. Biotec alsohas a considerable intellectual property portfolio, including many patents,extending to uses in pharmaceutical and edible applications, as well as withinthe food and beverage industries. The starch products from Biotec are currently used by Stanelco in the followingprojects: Starpol starch blend films used in packaging; sheet for making foodtrays; starch film for air pillows; starch pellets for food trays; and starchfilm for edible packaging. Biotec will also be a supplier of film to the InGelcapsule project. Sales of Biotec materials (Biodegradable, compostible and edible polymers basedupon starch) are continuing to both SPhere (formerly SP Metal) and othercustomers enabling Biotec to concentrate further resource on R&D. Therelationship with SPhere is working well. We are on schedule to substantiallyincrease in 2006 the production capacity of these materials - including Starpol- and expect have a capacity of 20,000 tonnes in Germany by early 2007. In December 2005 we entered into a landmark cooperation with Perseco(www.perseco.com) for the two companies to participate in a joint effort toexplore Stanelco's technologies, with a view toward developing materials andproducts that are focused on fulfilling Perseco's growing requirements forenvironmentally friendly, cost effective, innovative packaging solutions. Perseco, a subsidiary of HAVI Global Solutions (www.havigroup.com), is aninternational leader in Packaging and Supply Chain Services to the food serviceand beverage industries. Amongst their clients are some of the world's leadingfast food brands in the US. WELSH GRANT FUNDING We are pleased to announce that we have received a substantial offer of RegionalSelective Assistance funding in relation to a proposed production and R&Dfacility in Blaenau Gwent. The offer of funding would allow Stanelco to investin creating a 40,000 tonne facility for production and materials developmentbased upon Biotec's technologies for the primary purpose of substitutingconventional plastic for packaging and other applications with biodegradablealternatives from replenishable sources such as starch. CIGARETTE FILTERS We announced our intention to dispose of our biodegradable starch-basedcigarette filter technology acquired through the Biotec joint venture.Rothschild have been appointed to seek out interested parties. QUANTUM FINISH The launch in Europe of Reckitt Benckiser's new automatic dishwashing productFinish Quantum (R) in addition to their sales of Electrasol Gelpacs (R) in thesame segment in the North American market is expected to contribute towards agrowing royalty stream through our Aquasol subsidiary which contributedtechnology towards these products. ELECTRASOL, GELPACS, FINISH and QUANTUM, are trade marks of Reckitt Benckiserplc. FROGPACK FrogPack is a patent applied for box designed to replace traditional packagingused for transporting delicate and or valuable items that are vulnerable todamage in transit due to crushing or shock, such as electronic components, carparts, glass items, compact discs, flowers, foodstuffs, medicines and medicaldevices. Its unique design incorporates the unique SAAP (shock absorbing arcuatepanels) technology developed by Aquasol. The distribution and manufacturing deals for FrogPack, have been reviewed andrestructured and we are now pleased to announce that we have agreed a deal withMondi Packaging. PULSLINE Pulsline is a unique security label patented by our subsidiary, Aquasol, whichwill ensure authenticity of product. Negotiations have commenced with majorglobal companies about the take up of this technology. FROGMAT The latest development from Aquasol is a fully biodegradable cushioning materialthat offers significantly increased protection, is non static and is fullypatented. Again we are in discussion with major suppliers in this arena withregards to commercialisation. Other products available from Aquasol include FrogWrap and Airbags. HARD SHELL CAPSULES Stanelco jointly owns a patent with Carclo plc for injection moulded watersoluble capsules for drug delivery and dietary supplements. We have madeencouraging progress in the last few months with this technology. We are workingclosely with a customer who intends to use the technology in veterinaryapplications. High level discussions are underway with major drug deliverycompanies on the human application of the technology. TRADITIONAL RF BUSINESS We have now outsourced all manufacture of these items but retain control of theintellectual property. We have, however, seen a useful recovery in the demandfor consumable items for RF furnaces. We continue to make sales of mobile RFwelding units for sealing industrial plastic bags and have seen increase indemand for these items. SOFT CAPSULES InGel Technologies Limited (InGel) was established to commercialise Stanelco'swater soluble soft capsule making technology. The outstanding patent disputewith BioProgress Technology Limited as reported last year, has been settled.Stanelco is now free to exploit the technology for all applications includingedible capsules for pharmaceutical and dietry, dishwasher and laundry capsulesas well as other water soluble products. FINANCIAL REVIEW The Group has invested considerable financial resources in the development andprotection of its technologies in line with its strategy. £3.4 million has beeninvested in research and development during the year. The Group's balance sheet has strengthened via fundraisings and the acquisitionof Biotec with an increase in net assets of £12.8 million and a cash inflow of£3.5 million for the year. Due to the strength of its technology platform and importance of the Group'sproducts the Group has been able to raise £14.3 million (net of expenses) viathe issue of equity in the financial year. The Group has also been able toobtain further funding for projects such as the government grant funding for itsproposed facility in Wales. OUTLOOK In light of the progress on all fronts but in particular in relation to thecommercialisation of GREENSEAL, Starpol and Biotec products we continue to viewthe forthcoming year with optimism. We now have several major technologies andproducts which are starting to reach their target markets. THANK YOU Thank you to the team of hard working people at Stanelco and Biotec who inpartnership with our customers, suppliers and partners continue to improve ourbusiness. Martin WagnerChief Executive27 February 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31 OCTOBER 2005 Note 2005 2004 £'000 £'000TurnoverContinuing operations 1,192 1,211Acquisitions 262 121 ----- ----- 1 1,454 1,332Cost of sales (889) (797) ----- -----Gross profit 565 535Distribution costs (67) (41)Administrative expenses 1 (3,120) (1,682)Exceptional items: provision in respect of conclusionof patent defence. 1 (690) (1,669) ----- -----OPERATING LOSSContinuing operations (3,182) (2,787)Acquisitions (130) (70) ----- ----- (3,312) (2,857) Interest receivable and similar income 168 14Interest payable and similar charges (35) (3) ----- -----LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (3,179) (2,846)Taxation 37 59 ----- -----LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (3,142) (2,787)Minority interest 72 4Dividends - (7) ----- -----RETAINED LOSS FOR THE YEAR (3,070) (2,790) ----- -----Basic and diluted loss per share - pence 2 (0.354) (0.370) ----- ----- All transactions arise from continuing operations. All recognised gains and losses are included in the profit and loss account. CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 2005 At 31 October 2005 At 31 October 2004 Notes £'000 £'000 £'000 £'000FIXED ASSETSIntangible assets 19,380 5,567Tangible assets 3,235 918 ----- ----- 22,615 6,485CURRENT ASSETSStock 2,604 610Debtors 4,746 651Cash at bank and in hand 4,396 920 ----- ----- 11,746 2,181CREDITORS: AMOUNTS FALLING DUEWITHIN ONE YEAR (10,347) (1,292) ----- -----NET CURRENT ASSETS 1,399 889 ----- -----TOTAL ASSETS LESS CURRENTLIABILITIES 24,014 7,374 CREDITORS: AMOUNTS FALLING DUEAFTER MORE THAN ONE YEAR (3,678) (159) PROVISIONS FOR LIABILITIES ANDCHARGES 4 (1,453) (1,093) ----- ----- 18,883 6,122 ----- ----- CAPITAL AND RESERVESCalled up share capital 929 832Share premium account 19,899 5,209Shares to be issued 1,050 2,500Profit and loss unrealised exchange 19 -reserveProfit and loss account (5,512) (2,442) ----- -----SHAREHOLDERS' FUNDS 16,385 6,099Minority interest - equity interest 2,498 23 ----- ----- 18,883 6,122 ----- ----- CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005 2005 2004 Note £'000 £'000 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 5 (4,095) (731) RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 168 14Interest paid (33) (3) ----- -----NET CASH INFLOW FROM RETURNS ON INVESTMENTS ANDSERVICING OF FINANCE 135 11 ----- -----TAXATIONCorporation tax paid (10) - ----- ----- CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTInvestment in intangible fixed assets (3,436) (1,466)Sale of tangible fixed assets 25 79Purchase of tangible fixed assets (807) (280) ----- -----NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (4,218) (1,667) ----- -----ACQUISITIONS AND DISPOSALSPurchase of subsidiary (7,082) -Cash at bank acquired with subsidiary 65 59Part disposal of subsidiary 3,372 - ----- ----- (3,645) 59EQUITY DIVIDENDS PAIDDividends paid (1) (79) ----- -----FINANCINGIssue of ordinary share capital 14,287 2,919Issue of shares in subsidiary to minority interest 1,015 -shareholderCapital element of finance lease payments (19) (3)New bank loan - 150New finance leases 42 -Repayment of loan capital (15) (3) ----- -----NET CASH INFLOW FROM FINANCING 15,310 3,063 ----- -----INCREASE IN CASH 6 3,476 656 ----- ----- NOTES 1. TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2005 2004 £'000 £'000TurnoverSales are made from the United Kingdom into the followinggeographical markets:United Kingdom 492 647Europe 383 98Asia 142 472North America 430 40Rest of world 7 75 ----- ----- 1,454 1,332 ----- ----- The world-wide activities of Stanelco plc are highly integrated and, accordingly, it isnot possible to present geographical segment information for Profit Before Tax withoutmaking internal allocations, some of which are necessarily subjective. 2005 2004 £'000 £'000The profit on ordinary activities before taxation is stated after charging/(crediting):Depreciation, amortisation and impairment: Intangible fixed assets, owned 422 348 Tangible fixed assets, owned 202 157 Tangible fixed assets, leased 14 14 Goodwill on investments 244 60Loss on disposal of tangible fixed assets 10 68Auditors' remuneration: audit work 75 46 non-audit work 37 29Hire of plant and machinery 20 5Operating lease rentals: Land and buildings 140 123Loss on foreign exchange transactions 317 2Exceptional items Best estimate of liabilities in relation to conclusion of 690 1669patent defence. Bad debt provision 2 - ----- ----- 2. EARNINGS PER SHARE The calculation of earnings per share is based on the loss after tax for theyear of £(3,142,000) (2004: £(2,787,000) and a weighted average of 888,097,434(2004: 753,303,455) ordinary shares in issue. 3. DIVIDEND The directors do not recommend the payment of a dividend. 4. PROVISIONS FOR LIABILITIES AND CHARGES Deferred tax Warranty Other Total provision provision provisions £'000 £'000 £'000 £'000At 1 November 2004 - 12 1,081 1,093Utilised in the year - (12) (444) (456)On acquisition - - 99 99Provided in year - 2 715 717 ----- ----- ----- -----At 31 October 2005 - 2 1,451 1,453 ----- ----- ----- ----- At 1 November 2003 64 18 - 82Utilised in the year (64) (18) - (82)Provided in year 12 1081 1093 ----- ----- ----- -----At 31 October 2004 - 12 1081 1093 ----- ----- ----- ----- The warranty provision is for expected warranty claims on products sold duringthe financial year by Stanelco RF Technologies Limited (formerly Stanelco FibreOptics Limited). It is expected that this expenditure will be incurred in thenext financial year. Other provisions relate primarily to best estimates of the liabilities incurredin respect of action in defence of patents. On 9th February 2005 Stanelco Plcannounced that it had reached a settlement of the legal dispute between two oftheir subsidiaries with BioProgress plc. Stanelco plc agreed to issue toBioProgress new ordinary 0.1p shares and or cash up to a maximum market value of£1,000,000. Stanelco Plc subsequently announced that these shares had beenissued and sold by BioProgress Plc and that this represents full and finalsettlement of the dispute. The Board have made provision against the estimatedliabilities associated with the conclusion of this litigation following the endof the financial year. 5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2005 2004 £'000 £'000Operating loss (3,312) (2,857)Amortisation and impairment of intangible fixed assets 422 348Depreciation of tangible fixed assets 216 171Amortisation of goodwill 244 60Loss / (profit) on sale of tangible fixed assets 10 68(Increase)/ decrease in stocks (1,504) (61)(Increase)/ decrease in debtors (172) (98)Increase/ (decrease) in creditors (261) 563Increase in provision for liabilities and charges 262 1,075 ----- -----Net cash outflow from operating activities (4,095) (731) ----- ----- 6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2005 2004 £'000 £'000Increase/ (decrease) in cash in the year 3,476 656Cash inflow/(outflow)from increase in debt lease financing 34 (144)New finance leases (42) (54) ----- -----Change in net debt resulting from cash flows 3,468 458Net funds at 1 November 2004 722 264 ----- -----Net funds at 31 October 2005 4,190 722 ----- ----- 7. ANALYSIS OF CHANGES IN NET FUNDS/DEBT 1 November Acquisition Other non- 31 October 2004 Cashflow (excl. cash cash changes 2005 and overdrafts) £'000 £'000 £'000 £'000 £'000 Cash in hand and at bank 920 3,476 - - 4,396 ----- 3,476Bank loan (147) 15 - - (132)Finance leases (51) 19 - (42) (74) ----- ----- ----- ----- ----- 722 3,510 - (42) 4,190 ----- ----- ----- ----- ----- 8. CONTINGENT LIABILITIES Certain patents relating to Stanelco's edible capsule making technology had beenthe subject of litigation between our subsidiary Stanelco RF Technologies Ltdand BioProgress Technology Limited, more details of which are set out in theChief Executives Statement. On 9th February 2005 Stanelco Plc announced that it had reached a settlement ofthe legal dispute between two of their subsidiaries with BioProgress plc.Stanelco plc agreed to issue to BioProgress new ordinary 0.1p shares and or cashup to a maximum market value of £1,000,000. Stanelco Plc subsequently announcedthat these shares had been issued and sold by BioProgress Plc and that thisrepresents full and final settlement of the dispute. The Board have madeprovision against the estimated liabilities associated with the conclusion ofthis litigation following the end of the financial year. 9. REPORT AND FINANCIAL STATEMENTS The information relating to the year ended 31 October 2005 is extracted from theaudited accounts that have not yet been filed at Companies House and on whichthe auditors issued an unqualified opinion. The information relating to the year ended 31 October 2004 is extracted from theaudited accounts that have been filed at Companies House and on which theauditors issued an unqualified opinion. The above financial information does not constitute statutory accounts withinthe meaning of Section 240 of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange