RED.L Regulatory News (RED)

14 Sep 2006 07:02

Camco International Ltd14 September 2006 Camco International Limited 14th September 2006 Interim report for the period from the date of incorporation to 30 June 2006 Camco International Limited ('Camco') is a leading company in the origination,co-development, placement and management of carbon credits under the KyotoProtocol. The Company is pleased to present its interim financial statements since 8thFebruary 2006, when the company was incorporated, to 30 June 2006. Camco wasadmitted to trading on AIM on 25 April 2006, when the Company raisedapproximately €36.0 million. The company made a full operational trading statement on 7th August 2006,covering the period since IPO and will continue to update the market on aregular basis. Financial Highlights •Loss before tax of €1.89m •Amount raised at the IPO €36.0m •Cash position €28.59m Tristan Fischer, CEO, stated: "We are very pleased with the strong progress that the Company has made sinceits formation in February 2006. As of our trading update on 7th August 2006,Camco had achieved a carbon portfolio of 103,600,000 tonnes, of which 78,800,000tonnes were under exclusive contract to Camco which represents a materialimprovement since IPO. Camco's projects show broad geographic and technologicaldiversification, with projects in 7 countries, including China, Russia, EasternEurope and Africa and using 11 proven technologies. Camco has made solidoperational progress since the IPO, growing in line with our expectations. The loss before tax for the period ending 30 June 2006 is consistent withmanagement forecasts at IPO. It reflects the significant business expansionactivities since IPO and the fact that the majority of our revenues will derivefrom contracted projects that deliver carbon credits from 2008 onwards." We expect to make further progress and announcements over coming months with anumber of exciting new initiatives underway." Chairman's Statement I have pleasure in writing my first report as Chairman of Camco InternationalLtd. The Company has undergone significant changes since the beginning of thisinterim period. Camco AG and ClearWorld Energy, two companies with a long trackrecord of developing carbon projects around the world, came together to formCamco International Ltd on the 8th February 2006. Shortly after, on the 25thApril 2006, Camco International Ltd was successfully admitted to trading on AIM. During this period Camco has assembled a strong Board and management team. As aglobal business, operating in numerous jurisdictions, the Board attach greatimportance to strong central control over finance, management information andcontrol processes. In the very short time since IPO, management has successfullydelivered on its three main areas of focus: to expand our portfolio of carbonprojects; to execute on our existing carbon portfolio, and to broaden ourinternational footprint. Expansion Since February 2006, Camco has signed a number of new projects with largeindustrial groups in both China and Russia. The Company has increased the numberof projects contracted under carbon share arrangements. The prices achieved todate in these and other sales negotiations, as well as in the term-sheets andERPAs under negotiation, are consistent with the expectations of Camcomanagement at IPO. As of the 7th August 2006, Camco had 103,600,000 gross tonnesin its portfolio, making it one of the largest sell side portfolios in theworld. Since this date, Camco has continued to add gross tonnes to its portfolioas anticipated and future trading updates will detail the specific progressbeing made. Execution Management has focused on the execution of the Company's existing projectportfolio and has advanced projects through the Kyoto approval process. Overall,there has been excellent progress in the implementation of existing projectsresulting in increased certainty of successful carbon credit commercialisation.Of the 78,800,000 tonnes of carbon credits under exclusive contract in Camco'sportfolio as of 7th August, 25% now have Host Country Letters of Approval, anincrease in line with our plan. Diversification The Company has also made progress in building up our existing teams in Chinaand in Russia and in expanding our presence in other markets, in particularSouth Africa. Carbon Market The widely reported market price correction in the 2006 EU-ETS vintage earlierthis year has not significantly affected Camco's operations or prospects. Theshort term uncertainty in EU-ETS Phase 1 pricing has, in fact, strengthened oursell-side partner relationships as even more value is placed on our ability andstrategies to commercialise carbon credits effectively. The majority of Camco's revenues will be derived from sales of credits in the2008 to 2012 period, during the First Commitment Period of the Kyoto Protocol.The EU-ETS market price for EUAs in this period has been both higher and morestable than the 2006 vintage. I would like to thank all our staff in Beijing, Johannesburg, London, Moscow andVienna for their hard work during an exceptionally busy time. Financial Review The loss before tax for the period ending 30 June 2006 of €1.89m is consistentwith management forecasts at IPO. It reflects the significant business expansionactivities since IPO, and the fact that the majority of revenues derive fromcontracted projects that deliver carbon credits from 2008 onwards. The balance sheet demonstrates the strong financial position of the group, withworking capital sufficient to cover the period when costs are expected to behigher than revenues. David Potter, Chairman For further information please contact: Camco International Limited +44 (0) 20 7256 7979Tristan Fischer, Chief Executive OfficerScott McGregor, Chief Financial Officer Press Gavin AndersonKen Cronin/Janine Brewis +44 (0) 20 7554 1400 Consolidated Income StatementFor the period from the date of incorporation (8 February 2006) to 30 June 2006 -------------------------------------------------------------------------------- Period ended 30 June 2006 Note •' 000-------------------------------------------------------------------------------- Revenue -Cost of sales - ---------------Gross profit -Administration expenses (1,818)Share option expenses 5 (313) ---------------Loss from operations (2,131) Net financing income 238 ---------------Loss before tax (1,893)Taxation - ---------------Loss after tax attributable to equity holders (1,893) --------------- Basic and fully diluted earnings per share 8 (1.76)c The results for the period relate entirely to the Group's continuing operations.CAMCO International Limited was created to acquire and integrate the carbonbusinesses of CAMCO AG and CWE, as such the operating loss for the period iswholly attributable to the businesses of these foundation acquisitions madeduring the period. Consolidated Balance Sheet ------------------------------------------------------------------------------------------ As at 30 June 2006 Note •' 000------------------------------------------------------------------------------------------ AssetsCurrent assets Other receivables 360 Cash and cash equivalents 28,593 --------------- Total current assets 28,953 Non-current assets Intangible assets 3 8,823 Property, plant and equipment 4 119 --------------- Total non-current assets 8,942 ----------------TOTAL ASSETS 37,895 ---------------- Equity Share capital 5 1,299 Share premium 5 36,909 Profit & Loss reserve (1,761) --------------- Total equity attributable to equity holders of the company 36,447 Current liabilities Trade and other payables 1,448 ---------------- Total current liabilities 1,448 ----------------TOTAL EQUITY AND LIABLITIES 37,895 ---------------- Consolidated Statement of Changes in Equity------------------------------------------------------------------------------------------------------------------------ Attributable to the equity holders of the Company ---------------------------------------------------------------- Profit and Loss reserve Share Share ------------------------------ Total capital premium Share based Retained shareholders' payment earnings/ equity reserve (deficit) Note •' 000 •' 000 •' 000 •' 000 •' 000 Total equity at thebeginning of the period - - - - - Issue of share capital 5 1,299 36,909 - - 38,208 Loss for the period - - - (1,893) (1,893) Shares issued to theemployee benefit trust 5 - - (181) - (181) Employee share option scheme 5 - - 313 - 313 ---------------------------------------------------------------Total equity at the end ofthe period 1,299 36,909 132 (1,893) 36,447 ----------------------------------------------------------------- Consolidated Cash Flow StatementFor the period from the date of incorporation (8 February 2006) to 30 June 2006 --------------------------------------------------------------------------------- Period ended 30 June 2006 Note •'000 -------------------------------------------------------- Cash flows from operating activitiesCash used in operating activities (1,652)Interest received 1 ---------------Net cash flows from operating activities (1,651) Cash flows from investing activitiesPayment for acquisition of Camco AG 7 (3,150)Cash acquired with Camco AG 7 247Payment for acquisition of Services contract (896)Payment for acquisition of property, plant and equipment (23) --------------Net cash flows from investing activities (3,822) Cash flows from financing activitiesProceeds from the issue of loan notes 5,000Repayment of loan notes (5,000)Proceeds from the issue of shares 37,074Costs of raising capital (2,931) --------------Net cash flows from financing activities 34,143 Net increase in cash and cash equivalents 28,670 Cash and cash equivalents at the beginning of the period -Effect of foreign exchange (77) --------------Cash and cash equivalents at the end of the period 28,593 -------------- The following items represent non-cash transactions and therefore are notreflected in the Consolidated Cash Flow Statement: - Part of the consideration paid for the acquisition of Camco AG was in the formof shares issued (€1,845,900); and - Part of the consideration paid for the acquisition of Service contracts fromClearWorld Energy Limited was in the form of shares issued (€2,177,100). Notes (forming part of the interim financial report) 1. General information The principal activity of Camco International Limited (the "Company") and itssubsidiaries (together referred to as the "Group") is to provide services toproject developers who are seeking to develop and register emission reductionprojects under the Kyoto Protocol, by assisting with the determination of carbonreductions and with the realisation of their value. The Company is a limited liability company incorporated and domiciled in Jersey.The address of its registered office is Channel House, Green Street, St Helier,Jersey JE2 4UH. The Company was admitted to the Alternative Investment Market ("AIM") of theLondon Stock Exchange on 25 April 2006. These condensed consolidated interim financial statements were authorised forissuance on 13 September 2006. 2. Summary of Significant Accounting Policies This interim financial report of the Company for the interim reporting periodcommencing on 8 February 2006, the date of incorporation, and ended 30 June 2006has been prepared in accordance with International Financial Reporting Standards(IFRSs) as adopted by the EU ("adopted IFRSs"). This report is unaudited. (a) Basis of Preparation of the Interim Financial Report This interim financial report has been prepared on the basis of the recognitionand measurement requirements of IFRSs in issue that either are endorsed by theEU and effective (or available for early adoption) at 30 June 2006 or areexpected to be endorsed and effective (or available for early adoption) at 31December 2006, the Group's first annual reporting date at which it has decidedto use adopted IFRSs. Based on these adopted and unadopted IFRSs, assumptions have been made about theaccounting policies expected to be applied, which are as set out below, when thefirst annual IFRS financial statements are prepared for the period ending 31December 2006. In addition, the adopted IFRSs that will be effective (or available for earlyadoption) in the financial statements for the period ending 31 December 2006 arestill subject to change and to additional interpretations and therefore cannotbe determined with certainty. Accordingly, the accounting policies for thatperiod will be determined finally only when the annual financial statements areprepared for the period ending 31 December 2006. (b) Principles of Consolidation The consolidated financial statements incorporate the assets and liabilities ofall entities controlled by the Company as at 30 June 2006 and the results of allcontrolled entities for the period then ended. The Company uses the purchasemethod of accounting for the acquisition of controlled entities. The results of the subsidiaries acquired or disposed of during the periodincluded in the consolidated income statement from the effective date ofacquisition or up to the effective date of disposal, as appropriate. Wherenecessary, adjustments are made to the financial statements of subsidiaries tobring the accounting policies used into line with those used by other members ofthe Group. All intra-Group transactions, balances and unrealised gains on transactionsbetween Group companies are eliminated on consolidation. Unrealised losses areall eliminated unless the transaction provides evidence of an impairment of theasset transferred. (c) Foreign currencies The Group's financial information is presented in Euros, the functional currencyof the Group. Transactions in currencies other than the Euro are recorded at therates of exchange prevailing on the dates of the transactions. At each balancesheet date, monetary assets and liabilities that are denominated in foreigncurrencies are retranslated at the rates prevailing on the balance sheet date.Non-monetary assets and liabilities carried at fair value that are denominatedin foreign currencies are translated at the rates prevailing at the date whenthe fair value was determined. Gains and losses arising on retranslation areincluded in the income statement for the period. On consolidation, the assets and liabilities of the Company's overseasoperations are translated at exchange rates prevailing on the balance sheetdate. Income and expense items are translated at the average exchange rates foreach month in the period. Exchange differences arising, if any, are classifiedas equity and transferred to the Group's translation reserve. (d) Intangible assets Identifiable intangible assets are those which can be sold separately or whicharise from legal rights regardless of whether those rights are separable.Intangible assets that are acquired by the Company and internally generatedadditions are stated at cost less accumulated amortisation and impairmentlosses. Intangible assets brought into the Group as part of an acquisition arerecorded at fair value on the date of acquisition and are then subject toamortisation and impairment testing. Intangible assets (see below) represent: Service contracts: Carbon emission reduction contracts ("Service contracts") that are acquired bythe group are stated at cost less accumulated amortisation and impairment losses(see below). The group capitalises all further costs directly attributable to the Servicecontracts. These costs are only carried forward to the extent that they areexpected to be recouped through the successful completion of the contracts, andwhen they increase the future economic benefit of the contract to which theyrelate. The costs comprise consultancy fees, license costs, technical work anddirectly attributable administrative costs. All other costs are expensed asincurred. The service contracts have not yet reached the stage at which income can berecognised (see revenue below). Once the income recognition criteria on thesecontracts are met, the Service contract costs will be amortised over theremaining life of each of the contracts which are expected to be terminated in2012. Amortisation will be calculated in line with the recognition of revenue onthe related contract on a projected usage basis. (e) Impairment The carrying amounts of the Group's intangible assets are reviewed at leastannually to determine whether there is any indication of impairment. If any suchindication exists, the asset's recoverable amount is estimated. For assets thathave an indefinite useful life and intangible assets that are not yet availablefor use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. Impairment losses arerecognised in the income statement. The recoverable amount is calculated as thepresent value of estimated future cash flows discounted using a pre-tax discountrate that reflects current market assessments of the time value of money and therisks specific to the asset. An impairment loss is reversed when there is an indication that the impairmentloss may no longer exist and there has been a change in the estimates used todetermine the recoverable amount, only to the extent that the asset's carryingamount does not exceed the carrying amount that would have been determined, netof amortisation, if no impairment loss had been recognised. (f) Property, plant and equipment Property, plant and equipment are stated at historical cost. Depreciation isprovided at rates calculated to write each asset down to its estimated residualvalue evenly over its expected useful life as follows: Fixtures and equipment - straight line over 3 years. (g) Segment Reporting A segment is a distinguishable component of the Group that is engaged inproviding products or services (by business segment) or in providing products orservices within a particular economic environment (geographical segment) whichis subject to risks and rewards that are different from those of other segments. (h) Trade and other receivables Trade and other receivables are stated at their nominal amount (discounted ifmaterial) less impairment losses. (i) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bankoverdrafts that are repayable on demand and form an integral part of theCompany's cash management are included as a component of cash and cashequivalents for the purpose only of the statement of cash flows. (j) Trade and other payables Trade payables are classified as current liabilities unless the Company has anunconditional right to defer settlement of the liability for at least twelvemonths after the balance sheet date in which case they are classified as otherpayables. (k) Revenue Revenue from service contracts will generally be recognised at the point thatthe Emission Reduction has been verified by a Designated Operational Entity("DOE") or equivalent and the risk of delivery into the final Clean DevelopmentMechanism ("CDM") registry or equivalent is minimal. The Company expects thatthe verification, certification and registration processes would take placewithin six months following the Emission Reduction production taking place. No revenue has been recognised on service contracts for the period ended 30 June2006. (l) Net financing income Net financing income comprises interest payable, finance charges on sharesclassified as liabilities and finance leases, interest receivable on fundsinvested and dividend income. Interest income and interest payable is recognised in the income statement as itaccrues, using the effective interest method. Dividend income is recognised inthe income statement on the date the entity's right to receive payments isestablished. (m) Taxation Tax on the profit or loss for the year comprises current and deferred tax. Taxis recognised in the income statement except to the extent that it relates toitems recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year,using tax rates enacted or substantively enacted at the balance sheet date, andany adjustment to the tax payable in respect of previous years. Deferred tax is provided on temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the amounts usedfor taxation purposes. The following temporary differences are not provided for:the initial recognition of goodwill; the initial recognition of assets orliabilities that affect neither accounting nor taxable profit other than in abusiness combination, and differences relating to investments in subsidiaries tothe extent that they will probably not reverse in the foreseeable future. Theamount of deferred tax provided is based on the expected manner of realisationor settlement of the carrying amount of assets and liabilities, using tax ratesenacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. The Company has applied for and been granted 'exempt' company status within themeaning of Article 123A of the Income Tax (Jersey) Law 1961, as amended, for thecalendar year ending 31 December 2006 and intends to apply at the appropriatetime for such status for subsequent calendar years. (n) Share Based Payments The Group has applied the requirements of IFRS 2 to share option schemesallowing certain employees within the Group to acquire shares in the company.For all grants of share options, the fair value as at the date of the grant iscalculated using an appropriate option pricing model and the correspondingexpense is recognised over the life of the option. (o) Earnings per share Basic earnings per share is determined by dividing the net profit/(loss)attributable to security holders by the weighted average number of shares onissue during the period. Diluted earnings per share adjusts the amounts used in the determination ofbasic earnings per share to take into account the after income tax effect ofinterest and other financing costs associated with diluted potential ordinaryshares and the weighted average number of shares to have been issued for noconsideration in relation to dilutive potential ordinary shares. 3. Intangible assets The table below sets out the movement in intangible assets during the periodended 30 June 2006. -------------------------------------------------------------------------------- Service contracts Note •' 000--------------------------------------------------------------------------------CostBalance as at 8 February 2006 -Acquisition through business combinations 7 5,172Other acquisitions - external purchases 3,153Additions - service contract costs capitalised 498 ---------------Balance as at 30 June 2006 8,823 Amortisation and impairmentBalance as at 8 February 2006 -Amortisation for the period -Impairment charge - ---------------Balance as at 30 June 2006 - ---------------Net book value as at 30 June 2006 8,823 --------------- 4. Property, Plant and Equipment -------------------------------------------------------------------------------- Office Computer equipment equipment Total •' 000 •' 000 •' 000--------------------------------------------------------------------------------Plant and equipment, at costAs at 8 February 2006 - - -Additions 3 116 119 ----------------------------------As at 30 June 2006 3 116 119 Less: accumulated depreciationAs at 8 February 2006 - - -Charge for the period - - - ----------------------------------As at 30 June 2006 - - - ----------------------------------Net book value as at 30 June 2006 3 116 119 ---------------------------------- 5. Capital and reserves The Group recorded the following amounts within shareholder's equity as a resultof the issuance of ordinary shares. ------------------------------------------------------------------------------------------------- Number of Share Share ordinary shares capital premium Total 000 •'000 •'000 •'000-------------------------------------------------------------------------------------------------On issue at the beginning of the period - - - - Issuance of shares 129,899 1,299 39,978 41,277Costs incurred in the raising of capital - - (3,069) (3,069) -------------------------------------------------- On issue at the end of the period 129,899 1,299 36,909 38,208 -------------------------------------------------- On 19 April 2006, the Company established and sponsored an employee benefittrust, the Camco International Limited Employee Benefit Trust (the "EBT"). Thetrustee of EBT is Consortia Trustees Limited a professional trust corporationbased in Jersey. On 30 March 2006, Consortia Trustees Limited subscribed for3,600,000 ordinary shares represented by an increase in the Company's sharecapital and reserves of €180,000. Subsequently, Consortia Trustees Limitedacquired an additional 135,000 ordinary shares from existing shareholders of theCompany for an aggregate consideration of €1,350. As at 30 June 2006, the EBTholds 3,735,000 ordinary shares of the Company for a total consideration of€181,350. Transactions of the EBT are treated as being those of the Company, andshares held by the EBT are therefore reflected in the financial statements as areduction in reserves of €181,350. Share based payment The Company has established a share plan, the Camco International Limited 2006Executive Share Plan ("the Plan"), under which either the Company or the Trusteeof the EBT can make awards of share options or conditional rights to receiveshares ("Awards") to selected directors or employees of the Company or itssubsidiaries. The number of Awards made to directors and employees of the Company and amountspayable per share, are as set out in the table below. Number of Shares over which Awards Vesting after Vesting after Price payable are outstanding 12 months 24 months (per share) -----------------------------------------------------------------------------------Directors 642,858 257,144 385,714 • 0.05Key managementpersonnel 3,015,000 955,000 2,060,000 • 0.01 ------------------------------------------- Total 3,657,858 1,212,144 2,445,714 ------------------------------------------- Options were granted to individual directors and key management at various datesbetween 10 February and 14 March 2006. The fair value of the share option at grant date is determined based on theBlack-Scholes formula. The model inputs were the share price which at the datesof grant fell of €0.3472, the exercise price of €0.01-€0.05, expected volatilityof 46%, expected dividends of nil percent, a term of 2 years and a risk-freeinterest rate of 4.54%. The fair value of the liability is remeasured at eachbalance sheet date and at settlement date. During the period ended 30 June 2006,the Group recognised expense of €313,132 related to the fair value of the shareoption. 6. Segment Reporting Business SegmentsThe Group currently operates in one business segment: emission reduction projectdevelopment. Geographical SegmentsThe following table presents information for geographic business segments (byorigin) for the period ended 30 June 2006: -------------------------------------------------------------------------------- Additions to Additions to Additions Intangible Assets Plant & Equipment Other Assets Net Assets •'000 •'000 •'000--------------------------------------------------------------------------------Segment AssetsEMEA 3,169 119 28,953 32,241Asia 5,654 5,654 --------------Total assets 37,895 -------------- 7. Business Combination On 10 February 2006, the Company acquired 100% of the share capital of Camco AG,a company that is engaged in developing carbon reduction projects for a totalconsideration of €4,995,900. The consideration was in the form of shares issuedof €1,845,900 and a loan note of €3,150,000. The loan note was subsequentlyrepaid by the Company during the period ended 30 June 2006. Fair value of identifiable net assets of Camco AG at date of acquisition: •'000Cash and cash equivalents 247Receivables 5Prepayments 8Other current assets 33Intangible assets 5,172Payables (349)Provisions (121) -----------------Net identifiable assets acquired 4,995 ----------------- Net cash outflow to acquire Camco AG: •'000Cash consideration paid 3,150Cash assets acquired (247) -----------------Net outflow of cash 2,903 ----------------- •'000Cash consideration paid 3,150Shares issued to Camco AG 1,845 ----------------Total purchase consideration 4,995Fair value of assets acquired (4,995) ----------------Goodwill recognised on acquisition - ---------------- On 27 March 2006, the Company established a newly incorporated subsidiaryCompany called Camco Services UK Limited, whose principal activity is to providesupport services for the Group. As at 30 June 2006, the following entities are the subsidiaries of the Company: Name of controlled Count Ownership as at 30 Ownership as at 8entities incorporation June 2006 February 2006------------------------------------------------------------------------------- Camco AG Austria 100% -Camco Services UK Limited UK 100% - 8. Earnings per share Earnings per share attributable to equity holders of the Company arise fromoperations as follows: 30 June 2006 Cents per shareBasic and diluted earnings per share (1.76) •'000Earnings used in calculation of basic and dilutedearnings per share (1,893) •'000Weighted average number of shares used incalculation of basic and diluted earnings per share (107,603) As the shares that will be used to satisfy share options have already beenissued to the Employee Benefit Trust, there is no difference between the basicand diluted earnings per share. 9. Related Parties Disclosure On 19 April 2006, the Company entered into a separate agreement with (i) Energyfor Sustainable Development Limited ("ESD") and (ii) ClearWorld Energy Limited("CWE") and Beijing Cheng Yu Shi Dai Investment Management Consulting Co. Ltd("CYSD") relating in each case to the provision to the Company for up to sixmonths from 10 February 2006 of support services. ESD and CWE are foundingshareholders of CAMCO. Jeff Kenna, a Non-Executive Director of CAMCO, is aDirector of ESD. Alex Westlake, an Executive Director and COO of CAMCO, is aDirector of CWE. Under the agreement with ESD, the Company must pay the following fees witheffect from 10 February 2006: - £1,100 per month for the provision of office accommodation; - £12,500 per month for the two months commencing 10 February 2006 for the provision of personnel; - A one off fee of £75,000 for services provided prior to the commencement of the agreement. Under the agreement with CWE and CYSD, the Company must pay the following feeswith effect from 10 February 2006: - A lump sum fixed fee of US$20,000 per month for the provision of personnel; - £12,500 per month for the two months commencing 10 February 2006 for the provision of personnel, thereafter a fee of €9,000 per month for 6 months; - A one off fee of £75,000 for services provided prior to the commencement of the agreement. In addition, the Company reimbursed all third party costs and expenses incurredby ESD, CWE and CYSD in providing their services under these agreements. ESD provide consulting support to the company for drafting of projectdocumentation. An amount of €78,391 was invoiced for the period. On 10 February 2006, the Company issued loan notes to some of its shareholdersto the value of €4,000,000 in partial consideration for the acquisition ofshares in its subsidiary and of service contracts. A further loan was receivedfrom shareholders of €2,403,905, of which €1,403,905 was utilised to repay theinitial balance, leaving a balance due at 10 February 2006 of €5,000,000. Ofthis amount, €761,773 was payable to ESD and €2,500,000 to CWE. These balanceswere fully repaid during the period. 10. Commitments and contingent liabilities There are no commitments or contingent liabilities as at 30 June 2006. This information is provided by RNS The company news service from the London Stock Exchange