RNS Number:5022M
Flintstone Technologies PLC
19 June 2003
Financial Statements
Flintstone Technologies Plc
For the year ended 31 March 2003
Registered Number: 4134409
INDEX PAGE
Chairman's statement 1
Chief Executive's Report 2-3
Report of the directors 4-5
Statement of directors' responsibilities 6
Report of the auditors 7
Group profit and loss account 8
Group balance sheet 9
Company balance sheet 10
Group cash flow statement 11
Notes to the financial statements 12 - 26
DIRECTORS
G V Hirsch* (Chairman)
D M A Chestnutt (Chief Executive)
C I Cooke* (Non-executive)
M J Hough* (Non-executive)
P Shashkov (Non-executive)
Y N Zhuk (Non executive)
*Member of audit committee, nominations committee and remuneration committee.
SECRETARY
R L Smith
REGISTERED OFFICE
Knights Quarter
14 St Johns Lane
EC1M 4AJ
REGISTERED NUMBER
4134409
AUDITORS
PKF
52 Mount Pleasant
Liverpool
L3 5UN
BANKERS
Royal Bank of Scotland
1 Dale Street
Liverpool
L2 2PP
NOMINATED ADVISOR AND BROKER
Collins Stewart Limited
9th Floor
88 Wood Street
London EC2V 7QR
RETAIL BROKER
Seymour Pierce Ellis Limited
Talisman House
Jubilee Walk
Three Bridges
Crawley
West Sussex RH10 1LQ
CHAIRMAN'S STATEMENT
The year ended 31st March 2003 was a satisfactory one for the Group. In nearly all cases the businesses we are
invested in have made substantial progress. Careful use of the flotation proceeds and the restructuring of our
business has left us well placed, and our investee companies well funded.
Our business plan is for the successful development of technology based businesses. Shareholders should benefit from
the increasing value of these businesses and through realisations by way of flotation or sale. We are aware of the
difficult financial environment that currently exists and whilst this may make exits more problematic, we are still
making progress and raising new third party equity for our businesses.
The Chief Executive's Report and the Portfolio Update, accompanying the Annual Report, provide a summary of the
businesses in which we have invested. With the exception of Intellikraft these remain robust and in many cases
underlying technologies are being improved by the inventor team. Each business has a strong board and, as a result of
recent third party fundraising, adequate financial resources to progress its business plan.
We have realigned the Group's central costs and although the impact of this is not apparent from the full year
figures I can report that our gross cost base is now running at less than #700,000 per annum.
Patenting remains a strong focus for all our companies and programmes are in place to protect them in an increasingly
wide range of territories.
Our relationships in Russia are strong and we are presented with many new ideas on a regular basis. Finding the rare
opportunities with commercial potential involves a great deal of effort, however, we continue to identify new
projects.
After a comprehensive selection process the Board has committed funds to developing and marketing a new highly
efficient electric motor. A new company was formed and Ultra Motor Company Limited can already make some exceptional
claims based on early third party test results. We hope this will progress rapidly in the current year.
The Company seeks to comply with the Combined Code on Corporate Governance in all aspects of its business and is where
appropriate taking into consideration the Higgs Review and the Smith Report.
As was our intention at the time of the flotation, I have been joined on the board by two further non-executive
directors.
Michael Hough, Managing Director of Altium Capital Limited, a leading Corporate Finance and Securities Group who have
an office in Moscow, joined the Board on 22 January 2003.
Colin Cooke, Chairman of Fenner plc and a vastly experienced industrialist who has held a number of high profile
directorships, joined the Board on 27 March 2003. He has also accepted a further role as Chairman of Hardide Limited.
In March, as part of the company's restructuring, Jim Murray-Smith stood down from the Board to concentrate on his
role as Chief Executive of Hardide and Justin Martin, one of the founders of Flintstone, took up a full time role as
Commercial Director of Ultra Motor Company Limited.
As our investee companies continue to prosper, we will monitor market conditions and when the time is right we will
seek to exit from one or more of our investments.
I would like to take this opportunity to thank the employees, advisers and shareholders for their support during the
year.
Glyn Hirsch
Chairman
18 June 2003
CHIEF EXECUTIVE'S REPORT
Business Review
The twelve months since our listing on the Alternative Investment Market in June 2002 has been a period of
consolidation and steady progress in the technology companies in which we hold an investment.
On listing we set ourselves two specific tasks: to increase our holdings where possible in certain of the
technologies and to restructure our organisation and reduce costs.
Whereas ordinarily, third party investments would have diluted our shareholdings, we have managed to maintain and
increase our holdings in the technology companies while taking in third party money, as the table below shows:
31 March 2002 31 March 2003
Biocote Limited 25% 36%*
Firestop Chemicals Limited 30% 63%
Hardide Limited 24% 45%
Keronite Limited 12% 19%
*since the year end this has been diluted, by a further third party investment, to 32%.
Our business strategy has remained the same, as we have continued to invest and support our existing technology
companies while at the same time looking for new technologies in which to invest. In the difficult market conditions
that have prevailed over the last year, our emphasis has been placed on the further investment and development in the
existing companies although we have reviewed a number of new technology offerings.
The results for the year show a loss of #1,273,000 compared with a previous year loss of #535,000. The loss for the
current year includes the company's share of the losses in the investee subsidiaries, which have been consolidated in
these accounts. Following the acquisition of a larger shareholding in Firestop Chemicals, we now hold 63% of the
equity; we also hold 80% of the equity in Ultra Motor Company Limited, a new technology taken on board during the
year. Our share of the losses of these subsidiaries amounts to #244,000.
As a result of our successful AIM listing, we were provided with sufficient funds to invest in our existing
technologies and to maintain - and in most cases improve - our investment shareholding percentages, while at the same
time being sufficiently well funded to ensure that the company did not need to sell stakes in the technologies to
supplement working capital. In the year to 31 March 2002, there was a sale of stock in Intellikraft Limited which
realised #500,000. There has been no comparative sale of stock this year. As a consequence, the trading loss for the
year - after taking out the company's share of the losses of our investee subsidiaries - is consistent with the
previous year's loss when adjusted for the profit on the sale of part of our Intellikraft holding.
The listing costs incurred in June 2002 have been written off against share premium.
Following a detailed review of the cost structure in the company there has been a considerable restructuring and, as
the Chairman has reported, we have dramatically reduced our cost base. This had led to a number of staff redundancies
and the closure of the offices in the Isle of Man and Oxford. Where directors and staff members were working
specifically for one of the investee companies, they have now moved on to those payrolls with the result that I now
head up a smaller head office team based in the Liverpool office. Our gross annual running costs have been reduced to
less than #700,000 per annum and after taking credit for Management Fees and Interest Charges should reduce further
to approximately #500,000 per annum. The full benefit of this restructuring will be apparent in next year's figures.
Our balance sheet remains strong and the investments are carried at cost as stated. The net flotation proceeds of
#3.8m after flotation expenses, repaying creditors and loans have been used, in part, to fund the business for the
year and to invest over #1.5m in our investee companies which alongside third party fundraising has secured their
immediate business plans. Flintstone's cash position of #1.376m at the year end provides sufficient flexibility to
cover adequate working capital requirements over the next two years
and a minimum of #350,000 of the trade debtor of #925,000, which is a loan to Hardide, is repayable within that
period. The balance will be converted to equity in the current Hardide fundraising.
We believe that the current technology companies are now adequately funded and should be in a position to achieve
their business aims but we remain prepared to support further fundraising if required and believe that the company
has sufficient cash resources to achieve this.
Technology Companies
There has been considerable progress in the investee companies during the last twelve months. The financial climate
has however been uncertain and it has not proved possible to take any of the investee companies to a public market
during that period. With the exception of Intellikraft all the investee companies have prospered and have moved
forward in their development and while investment market conditions may not have been conducive to achieving an exit,
we have nevertheless managed to raise a total of over #6 million for Biocote, Firestop Chemicals, Hardide and
Keronite by a mixture of equity investment, preference shares and loan notes. Of the new investments, Flintstone has
invested over #1.5m in these companies by the conversion of debt or by subscription for cash.
The next twelve to eighteen months will be an important stage in the development of these companies and if they
adhere to their budgets and forecasts, all should move into a trading profit on a monthly basis within that period.
New Technologies
While we have continued to support those technologies in which we have previously invested, we have also reviewed a
number of new technologies that have been presented to us by virtue of our reputation in Russia and elsewhere. After
a rigorous selection process the Board decided to take forward an innovative electric motor technology that has been
developed in Russia over the last fifteen years. The appropriate PCT applications have been filed and the Russian
based developer team has provided prototypes which are undergoing a series of tests at Southampton University; the
initial results are very encouraging. There are a number of applications for this novel technology and the team we
have built around the technology is concentrating its efforts on the applications which will be quickest to market.
Our initial investment in the company was to take a 80% stake at a cost of #40,000 and we have made a commitment to
provide a loan facility of #160,000.
Prospects
The success of Flintstone will be best measured by the value created in our investee companies and I am confident
that the substantial progress that has been achieved over the last twelve months will be reflected in the trading
results of the investee companies in the coming year and while our aim will be to achieve an exit by a public market
listing or a trade sale, the trading performance of the various companies should ensure that we are in a position to
choose the right time to exit from our investments.
David Chestnutt
Chief Executive
18 June 2003
REPORT OF THE DIRECTORS
The directors present their annual report and the audited financial statements of the group for the year ended 31
March 2003.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS
The principal activity of the company is that of a holding company. The principal activity of the group is the
sourcing and development of new technologies for commercial purposes.
During the year the company obtained a listing on the Alternative Investment Market raising #4.5 million (net of
expenses). The fundraising has given the company a platform from which to consolidate and develop the current
technologies in the portfolio.
RESULTS AND DIVIDENDS
The group loss for the year, after taxation amounted to #1,273,000 (2002: loss #535,000). The directors do not
recommend the payment of a dividend.
DIRECTORS
The directors of the company during the year and their interest in the ordinary shares of the company were:-
Appointed Resigned Interest in the share capital Interest in the share capital
31 March 2003 31 March 2002
D M A Chestnutt 1,000,000 1,000,000
C I Cooke 27 March 2003 - -
G V Hirsch 500,000 -
M J Hough 22 January 2003 - -
J G Martin 27 March 2003 1,510,000 1,510,000
J S Murray-Smith 27 March 2003 809,860 709,860
P Shashkov 1 October 2002 1,000,000 200,000
I W Woodcock 20 June 2002 5,665,847 5,665,847
Y N Zhuk 23 May 2002 1,000,000 200,000
DIRECTORS' INTEREST IN SHARE OPTIONS
The company has a share option scheme under the terms of which directors are able to subscribe for ordinary shares in
the company.
The directors who held office at 31 March 2003 had the following beneficial interest in the option to subscribe for
shares:
Ordinary Date of Expiry Date Exercise price per ordinary share
shares under Options grant date of cancelled
options
D M Chestnutt 240,000 27.03.2002 - 19.06.2002 25p
240,000 19.06.2002 26.03.2012 - 33p
G V Hirsch 400,000 27.03.2002 - 19.06.2002 25p
400,000 19.06.2002 26.03.2012 - 33p
CREDITOR PAYMENT POLICY AND PRACTICE
It is the company's policy that payments to suppliers are made in accordance with those terms and conditions agreed
between the company and its suppliers, provided that all trading terms and conditions have been complied with. At 31
March 2003 the company had an average of nil days (2002: 27 days) outstanding in trade creditors. At 31 March 2003
the group had an average of 14 days (2002: 26 days) outstanding in trade creditors.
AUDITORS
PKF were appointed as auditors during the year and offer themselves for reappointment in accordance with Section 385
of the Companies Act 1985.
Approved by the Board
D M A Chestnutt
Director
18 June 2003
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
Company law requires the directors to prepare financial statements for each financial year which give a true and fair
view of the state of affairs of the group and of the company and of the profit or loss of the group for that period.
In preparing those financial statements, the directors are required to:-
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business; and
* state whether applicable accounting standards have been followed subject to any material departures disclosed and
explained in the financial statements.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of the group and to enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF FLINTSTONE TECHNOLOGIES PLC
We have audited the group financial statements for the year ended 31 March 2003 which comprise the Group Profit and
Loss Account, Group Balance Sheet, Company Balance Sheet, Group Cash Flow Statement and the related notes 1 to 24.
These financial statements have been prepared on the basis of the accounting policies set out therein.
This report is made solely to the company's members, as a body, in accordance with section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the company members those matters we are required
to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit
report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the Statement of Directors' Responsibilities the company's directors are responsible for the
preparation of financial statements in accordance with applicable United Kingdom law and accounting standards. Our
responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly
prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors' Report
is not consistent with the financial statements, if the company has not kept proper accounting records, if we have
not received all the information and explanations we require for our audit, or if information specified by law
regarding directors' remuneration and transactions with the group is not disclosed.
We read the other information contained in the annual report and consider the implications for our report if we
become aware of any apparent misstatements within it. The other information comprises only the directors' report, the
chairman's statement and the chief executive's report
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the United Kingdom Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the group and of the
company as at 31 March 2003 and of the loss of the group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
18 June 2003 PKF
Liverpool, UK Registered Auditors
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003
2003 2003 2002
#'000 #'000 #'000
Turnover Notes
Continuing operations 2 125 324
Acquisitions 2 -
127 324
Administration expenses
Continuing operations (1,294) (1,353)
Acquisitions (313) (1,607) -
Operating loss 3
Continuing operations (1,169) (1,029)
Acquisitions (311) -
(1,480) (1,029)
(Loss) / profit on sale of fixed asset investments (9) 500
Discontinued operations:
Loss on disposal of operations - (37)
Loss on ordinary activities before interest and taxation (1,489) (566)
Other interest receivable 90 50
Interest payable and similar charges 6 - (19)
Loss on ordinary activities before taxation 7 (1,399) (535)
Taxation on loss on ordinary activities - -
Loss on ordinary activities after taxation (1,399) (535)
Minority interest: equity 126 -
Loss for the financial year attributable to members of
the parent company 17 (1,273) (535)
Loss per share: basic and diluted (pence per share) 8 (3.1) (2.3)
There are no recognised gains or losses other than the loss for the 12 months to 31 March 2003 of #1,273,000.
GROUP BALANCE SHEET
AS AT 31 MARCH 2003
31 March 31 March
2003 2002
Notes #'000 #'000
Fixed assets
Intangible assets 9 1,252 -
Tangible assets 10 16 29
Investments 12 2,441 585
3,709 614
Current assets
Debtors 13 1,410 1,068
Cash at bank and in hand 1,688 79
3,098 1,147
Creditors: amounts falling due within one year 14 (87) (690)
Net current assets 3,011 457
6,720 1,071
Capital and reserves
Called up share capital 16 2,378 1,273
Share premium reserve 17 6,518 1,280
Merger reserve 17 147 147
Profit and loss account 17 (2,902) (1,629)
Total shareholders' funds 19 6,141 1,071
Equity minority interest (521) -
Non equity minority interests 1,100 -
6,720 1,071
The financial statements were approved by the board on 18 June 2003 and signed on behalf of the board of directors.
D M A Chestnutt
Director
COMPANY BALANCE SHEET
AT 31 MARCH 2003
31 March 31 March
2003 2002
Notes #'000 #'000
Fixed assets
Investment in subsidiaries 11 1,130 1,130
Current assets
Debtors 13 6,399 1,311
Cash at bank and in hand 1,376 68
7,775 1,379
Creditors: amounts falling due within one year 14 - (8)
Net current assets 7,775 1,371
8,905 2,501
Capital and reserves
Called up share capital 16 2,378 1,273
Share premium reserve 17 6,518 1,280
Profit and loss account 17 9 (52)
Equity shareholders' funds 19 8,905 2,501
The financial statements were approved by the board on 18 June 2003 and signed on behalf of the board of directors.
D M A Chestnutt
Director
GROUP CASH FLOW STATEMENT
AT 31 MARCH 2003
Notes 31 March 31 March
2003 2002
#'000 #'000
Cash outflow from operating activities 20 (3,051) (1,883)
Returns on investment and servicing of finance
Interest element of finance lease rental payments - (4)
Interest received 143 27
143 23
Taxation
Taxation paid - -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (10) (15)
Payments to acquire investments (719) -
Receipts from sale of fixed asset investments - 500
(729) 485
Acquisitions and disposals
Net cash acquired with subsidiary undertakings 21 511 -
Payments to acquire subsidiary (25) -
486 -
Net cash outflow before financing (3,151) (1,375)
Financing
Issue of shares 5,186 1,222
New loans 20 - 249
Capital element of finance lease rental payments 20 (5) (22)
Repayment of loans (421) (75)
4,760 1,374
Increase / (decrease) in cash 1,609 (1)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003
1. ACCOUNTING POLICIES
(i) Basis of preparation
The consolidated financial statements have been prepared under the historical cost convention and in accordance
with applicable United Kingdom Accounting Standards.
(ii) Basis of consolidation
The group financial statements consolidate the financial information of the company and of its subsidiaries to
31 March 2003. No profit and loss account is presented for Flintstone Technologies Plc as permitted by Section
230 of the Companies Acts 1985. The profit of Flintstone Technologies plc for the year ended 31 March 2003 is
#61,000 (31 March 2002: loss #52,000).
(iii) Goodwill
Goodwill arising on acquisitions is capitalised, classified as an asset on the balance sheet and amortised on a
straight line basis over its useful economic life of 20 years. It is reviewed for impairment at the end of the
first full financial year following the acquisition and in other periods if events or changes in circumstances
indicate that the carrying value may not be recoverable.
(iv) Intangible assets
Intangible assets acquired separately from a business are capitalised at cost. Intangible assets acquired as
part of the acquisition of a business are capitalised separately from goodwill if the fair value can be measured
reliably on initial recognition. Intangible assets are amortised on a straight line basis over their estimated
useful lives up to a maximum of 20 years. The carrying value of intangible assets is reviewed for impairment at
the end of each accounting period.
(v) Tangible fixed assets
Fixed assets are depreciated at rates calculated to write off the cost less estimated residual value of each
asset over its expected useful life in instalments as follows:-
Fixtures, fittings and equipment - 25% per annum
Plant and Machinery - 25% per annum
Computer equipment - 25% per annum
The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
(vi) Leased assets
Assets held under finance leases, which are leases where substantially all the risks and rewards of the asset
have been passed to the group, are included in tangible fixed assets at their capital value and depreciated over
their useful economic lives. Lease payments consist of capital and interest elements and the interest is charged
to the profit and loss account.
Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over
the lease term.
(vii) Investments
Investments are held as part of an investment portfolio and are stated at cost less provision for permanent
diminution in value.
Certain investments within the group's investment fund fall within the definition of associated undertakings
contained in the Companies Act 1985. In accordance with FRS9, "Associates and Joint Ventures", such investments
are treated consistently with other investments in the fund, and consequently are not equity accounted for.
It is not practicable to determine the effect of this departure from the Companies Act 1985 on the financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
1. ACCOUNTING POLICIES (Continued)
(viii) Government grants
Government grants of a revenue nature are credited to income so as to match them with the expenditure to which
they relate.
(ix) Deferred taxation
.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the
balance sheet date where transactions or events that result in an obligation to pay more, or a right to pay less
tax in the future have occurred at the balance sheet date with the exceptions that deferred tax assets are
recognised only to the extent that the directors consider that it is more likely than not that there will be
suitable taxable profit from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in
which timing differences reverse, based on tax rates and laws enacted or substantially enacted at the balance
sheet date.
(x) Financial instruments
The group does not enter into hedging or speculative derivative contracts.
Financial assets included within fixed assets are recognised in the balance sheet at cost less permanent
diminution in value. Financial assets included within current assets are stated at the lower of cost and net
realisable value.
2. TURNOVER AND SEGMENTAL ANALYSIS
Turnover, which arises from continuing activities, is stated net of value added tax and comprises management and
consultancy fees for services rendered and is recognised on an accruals basis.
The group operates in one principal area of activity, technology commercialisation. It operates within one
geographical market, the British Isles. Turnover and profit arise in this area of activity and this region.
3. OPERATING LOSS
The operating loss is stated after charging:-
31 March 31 March
2003 2002
#'000 #'000
Auditors' remuneration: audit (parent company #16,000) 21 20
Auditors' remuneration: other 3 3
Depreciation on owned assets 16 14
Depreciation on assets held under finance leases - 6
Amortisation of goodwill 32 -
Operating lease rentals 35 36
Fees paid to Ernst & Young LLP for non-audit services in 2002/03 not included above were #146,000 in connection
with the AIM listing.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
4. STAFF COSTS
31 March 31 March
2003 2002
#'000 #'000
Wages and salaries 641 605
Social security costs 72 63
713 668
The average number of employees including directors for the group during the year was made up as follows:-
31 March 31 March
2003 2002
Sourcing and development of technology 7 8
Management and administration 7 6
14 14
The average numbers of staff for the year ended 31 March 2003 includes the employees of the subsidiary
undertakings acquired during the year.
5. DIRECTORS' REMUNERATION
31 March 31 March
2003 2002
#'000 #'000
Executive directors 272 238
Payments to directors consists of basic salaries only. No fees, benefits, bonuses, compensation for loss of office or
pension contributions have been paid.
The amounts in respect of the highest paid director are as follows:
31 March 31 March
2003 2002
#'000 #'000
Emoluments 121 84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
6. INTEREST PAYABLE AND SIMILAR CHARGES
31 March 31 March
2003 2002
#'000 #'000
Other loans - 15
Finance charges payable under finance leases - 4
- 19
7. TAXATION ON PROFIT ON ORDINARY ACTIVITIES
There is no taxation charge due to the availability of taxation losses.
Factors affecting the tax charge/(credit) for the period
31 March 31 March
2003 2002
#'000 #'000
Group loss on ordinary activities before taxation (1,399) (535)
--------------- ---------------
Corporation tax at 19% (2001 - 30%) (266) (160)
Lower tax rates on overseas losses 16 89
Current tax losses not utilised 229 68
Utilisation of losses brought forward 10 -
Tax depreciation in excess of accounting depreciation 2 3
Expenses not allowed for tax 9 -
--------------- ---------------
Total current tax charge/(credit) - -
--------------- ---------------
8. LOSS PER SHARE
The calculation of basic and diluted loss per share is based on loss of #1,273,000 for the year ended 31 March
2003 (31 March 2002: loss of #535,000), and on the weighted average number of ordinary shares in the year of
40,681,671 (31 March 2002: 23,713,199).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
9. INTANGIBLE FIXED ASSETS
The group Purchased
Patents Goodwill Total
#'000 #'000 #'000
Cost
Additions (see note 21) 10 1,274 1,284
At 31 March 2003 10 1,274 1,284
Amortisation
Provided in the year - 32 32
At 31 March 2003 - 32 32
Net book amount at 31 March 2003 10 1,242 1,252
Goodwill included above relate to the following:
Date of Period of Goodwill at original cost
Acquisition Amortisation The Group The company
Firestop Chemicals Limited 1 October 2002 20 years 1,274 -
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
10. TANGIBLE FIXED ASSETS
Group Fixtures, fittings Plant & machinery Motor Vehicles Computer Equipment Total
and equipment
#'000 #'000 #'000 #'000 #'000
At 31 March 2002 24 - 7 48 79
Additions 1 3 - 6 10
Disposals (19) - (7) (18) (44)
On acquisition of 5 - - 3 8
subsidiaries
11 3 - 39 53
Depreciation
At 31 March 2003 13 - 7 30 50
Charge for the year 6 - - 10 16
Disposals (14) - (7) (9) (30)
On acquisition of subsidiaries 1 - - - 1
At 31 March 2003 6 - - 31 44
Net book value 5 3 - 8 16
At 31 March 2003
At 31 March 2002 11 - - 18 29
11. INVESTMENT IN SUBSIDIARIES - COMPANY
31 March
2003
#'000
Cost and net book value:
At 1 April 2002 and at 31 March 2003 1,130
Directly held No. of
ordinary % Cost Nature of business
shares Held #
CFB (Isle of Man) Limited* 1,130,500 100 1,130,500 Sourcing and development of new
technologies for commercial
purposes
Flintstone Management Services 1 100 1 Sourcing and development of new
Limited technologies for commercial
purposes
* incorporated in the Isle of Man.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
12. INVESTMENTS - GROUP
(a) Subsidiary Undertakings
The following subsidiary undertakings, held by Flintstone Management Services Limited, have been consolidated
into the group financial statements using the acquisition method.
No. of Type of Share Nominal
Shares Shares Capital Value Nature of Business
Firestop Chemicals 3,401,456 Ordinary 63% 34,015 Fire retardant chemicals and
Limited
500,000 Preference 31% 500,000 processes
Ultra Motor Company 40,000 Ordinary 80% 40,000 Electric motor wheel technology
Limited
Ceraheat Limited 1 Ordinary 100% 1 Dormant
(b) Other Investments
31 March 31 March
2003 2002
#'000 #'000
Cost - Shares
At 1 April 2002 585 336
Additions 1,443 250
Impairment (9) (1)
At 31 March 2003 2,019 585
Cost - Loan notes
Additions 422 -
At 31 March 2003 422 -
Total cost of investments 2,441 585
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
12. INVESTMENTS - GROUP (continued)
Other investments comprise the following:
No. of Type of Share Nominal
Shares Shares Capital Value Nature of Business
Biocote Limited 696,693 Ordinary 36% 697 Powder Coating
Hardide Limited 450,000 Ordinary 45% 4,500 Surface engineering (heavy
50,000 Preference 100% 50,000 metal)
IntelliKraft Limited 12,061,124 Ordinary 10% 12,601 Piezo-ceramics based electronic systems
Keronite Limited 38,731 Ordinary 19% 3,873 Surface engineering (light
- Loan notes - 422,462 alloys)
Analysis of the aggregate share of the results of all investments falling within the definition of associates is
as follows:
12 Months to
31 March
2003
#'000
Share of associate profit and loss accounts
Turnover 50
Operating loss (356)
Retained loss (356)
Share of associated balance sheets
Fixed assets 154
Current assets 108
Current liabilities (457)
Net liabilities (195)
As explained in note 1, as these investments are held as part of an investment portfolio, they are not equity
accounted for.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
13. DEBTORS
2003 2003 2002 2002
Group Company Group Company
#'000 #'000 #'000 #'000
Trade debtors 925 - 966 -
Amounts due from group undertakings - 6,042 - 1,300
Directors loan - - 24 -
Other debtors 132 4 78 11
Called up share capital not paid 353 353 - -
1,410 6,399 1,068 1,311
14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2003 2003 2002 2002
Group Company Group Company
#'000 #'000 #'000 #'000
Trade creditors and accruals 62 - 99 8
Amounts owed to related parties - - 421 -
Other tax and social security 25 - 165 -
Obligations under finance leases - - 5 -
87 - 690 8
15. DEFERRED TAXATION
Group
The Group has applied FRS 19, Deferred Tax, in the current year.
Deferred taxation (assets)/liabilities arising on accelerated capital allowances and tax losses provided and
amounts not provided in the amounts are as follows:-
2003 2002
#'000 #'000
Provided: accelerated capital allowances - 3
tax losses - (3)
________ ________
- -
Not provided: tax losses (370) (182)
There is no prior year adjustment in the application of FRS 19 as in the current and prior year the Group has
deferred taxation assets for which the recoverability is uncertain.
No provision has been made as the recoverability of the asset is uncertain. As the group is still in the early
stages of its development and it is difficult to determine when the losses to date are expected to be recovered.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
16. SHARE CAPITAL
Authorised and issued 2003 2002
#'000 #'000
Authorised:
80,000,000 (2002: 40,000,000) ordinary equity shares of #0.05 each 4,000 2,000
Allotted, called up and fully paid
47,554,000 (2002: 25,454,000) ordinary equity shares of #0.05 each 2,378 1,273
The company was incorporated with an authorised share capital of #2,000,000 divided into 40,000,000 ordinary shares
of 5 pence each of which two shares were issued nil paid to the subscribers to the Memorandum of Association of the
company. At an Extraordinary General Meeting on the 5 June 2002 the authorised share capital was increased to
80,000,000 ordinary shares of #0.05 per share.
On 5 June 2002 a special resolution of the company passed on that date:
* The directors were generally and unconditionally authorised in accordance with Section 80 of the Act to the
exercise all the powers of the company to allot relevant securities (within the meaning of Section 80 (2) of the Act)
up to a nominal value of #2,727,300.
* The directors were authorised pursuant to Section 95 of the Act to allot equity securities (as defined in Section
94 (2) of the Act) for cash pursuant to the authority referred to above as if Section 89 (1) of the Act did not apply
to such allotment provided that such power was limited to:
i) the allotment up to 15,000,000 ordinary shares in connection with the placing;
ii) the grant of an option in favour of Collins Stewart Limited pursuant to the CS Option Agreement in respect of
up to 809,080 ordinary shares;
iii) the grant options over ordinary shares representing up to 10 per cent of the issued share capital of the
company pursuant to the Share Option Scheme;
iv) the allotment (other than pursuant to sub paragraphs i) and iii) above) of equity securities up to a maximum
aggregate nominal amount of #70,000 (being approximately 5 per cent of the issued ordinary share capital of the
company immediately following the placing).
On the 27 March 2002 the Flintstone Technologies Enterprise Management Incentive Scheme was introduced. Under this
scheme options to subscribe for the company's shares have been granted to certain directors and employees. On 27
March 2002 1,160,000 options were granted to directors and 300,000 options were granted to employees at 25p each. On
the 19 June 2002 these options were cancelled and on this date 1,000,000 options were granted to directors and
300,000 options were granted to employees at 33p each. The shares are exercisable after a successful listing on a
recognised stock market however the option holder cannot sell the shares for at least one year after this date of
listing. The options expire on 26 March 2012.
On 28 June 2002, the directors allotted 16,400,000 ordinary shares of #0.05 per share at 33p each on the admission of
the company to the Alternative Investment Market.
On 1 October 2002 the directors allotted 4,053,364 ordinary shares of #0.05 per share at 33p in exchange for 310,000
ordinary shares of #0.01 in Hardide Limited.
On 1 October 2002 the directors allotted 1,646,636 ordinary shares of #0.05 per share at 33p in exchange for
1,795,600 ordinary shares of #0.01 in Firestop Chemicals Limited.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
17. RESERVES
Share Profit and Merger
Group premium Loss account Reserve
#'000 #'000 #'000
As at 1 April 2002 1,280 (1,629) 147
Loss for the period - (1,273) -
On issue of shares 5,238 - -
As at 31 March 2003 6,518 (2,902) 147
Company
As at 1 April 2002 1,280 (52)
Profit for the period - 61
On issue of shares 5,238 -
As at 31 March 2003 6,518 9
18. DERIVATIVES AND OTHER FINANCIAL INFORMATION
Derivatives
The group's treasury activities are designed to provide suitable, flexible funding arrangements to satisfy the
group's requirements. The group uses financial instruments comprising borrowings, cash, liquid resources, investments
and items such as trade debtors and creditors that arise directly from its operations. The main risks arising from
the group financial instruments are interest rate and liquidity risks. The board reviews policies for managing each
of these risks which are summarised below. These policies remained unchanged from prior periods.
The groups approach to investments is to hold the investments until commercial viability is determined for the
technologies under development by the investees at which point the group seeks to realise their investment.
The group does not have any facilities with bankers and as a result their approach to cash resources is to obtain
funding from investors into the group through the issue of shares. Cash management is based on the management of
requirements for funds from investee companies as well as collection of funds due from these companies. Any surplus
cash is invested where the group can obtain the best return for the associated circumstances for the group. The group
seeks borrowings from existing shareholders or related parties should there be a need for short term funding at rates
which are determined with reference to the market rates for similar finance.
The group finances its operations through a combination of retained profits, cash resources, borrowings and finance
leases.
Interest rate profile of financial assets
2003 2002
#'000 #'000
Financial assets on which no interest is earned 2,441 585
Floating rate financial assets 1,688 79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
18. DERIVATIVES AND OTHER FINANCIAL INFORMATION (continued)
The floating rate financial assets comprise cash deposits and current bank accounts bearing interest at rates
limited to LIBOR.
No forward foreign currency contracts were entered into during any of the periods.
Borrowing facilities
The group has no borrowing facilities with its bankers.
Fair value of financial assets and financial liabilities
Except for group investments, there is no material difference between the fair value and book value of the
group's financial instruments. Group Investments have a book value of #2,441,000 (31 March 2002: #585,000 and 31
March 2001: #336,000). It is not practicable to estimate with sufficient reliability the fair values of these
investments as they consist of private companies whose valuations are dependent on the development and bringing to
market of innovative technology. The directors have considered the carrying value of these investments and are
confident that they will recover more than the book value at 31 March 2003.
Short term debtors and creditors
Short term debtors and creditors have been excluded from the above disclosures.
19. RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
31 March 31 March
Group 2003 2002
#'000 #'000
Loss for the year (1,273) (535)
On issue of shares 4,815 1,423
On share for share exchange 1,528 -
5,070 888
Opening shareholders' funds 1,071 183
Closing shareholders' funds 6,141 1,071
31 March 31 March
2003 2002
#'000 #'000
Company
Profit/(loss) for the year 61 (52)
On issue of shares 6,343 1,423
6,404 1,371
Opening shareholders' funds 2,501 1,130
Closing shareholders' funds 8,905 2,501
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
20. NOTES TO THE STATEMENT OF CASH FLOWS
(a) RECONCILIATION OF OPERATING (LOSS) TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
31 March 31 March
2003 2003
#'000 #'000
Operating loss (1,480) (1,029)
Depreciation of tangible fixed assets 16 20
Increase in operating debtors and prepayments (1,099) (490)
Decrease in operating creditors and accruals (520) (384)
Amortisation of goodwill 32
Cash outflow from operating activities (3,051) (1,883)
(b) ANALYSIS OF NET DEBT
At Other At
31 March non-cash 31 March
2002 Cash flow movements 2003
#'000 #'000 #'000 #'000
Cash 79 1,609 - 1,688
Liquid resources
Finance lease (5) 5 - -
obligations
Short term loans (421) 421 - -
Total (347) 2,035 - 1,688
(c) RECONCILIATION OF MOVEMENT IN NET DEBT
31 March 31 March
2003 2002
#'000 #'000
Increase/ (Decrease) in cash in the period 1,609 (1)
Repayment of loans 421 75
Cash inflow from increase in loans (249)
Repayment of capital element of finance lease 5 22
Change in net debt resulting from cash flows 2,035 (153)
Loan payable converted into ordinary shares 200
Movement in net debt 2,035 47
Net debt at beginning of period (347) (394)
Net debt at the end of the period 1,688 (347)
During the period ended 31 March 2003, #616,000 of short term debt receivable was converted into ordinary shares
in the debtor companies.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
21. ACQUISITIONS
On 1 October 2002 the group acquired 1,795,600 ordinary shares of #0.01 in Firestop Chemicals Limited, increasing
the holding to 63% of its nominal share capital. Consideration was #568,000, satisfied by the issue of 1,646,636
Ordinary shares of Flintstone Technologies plc at #0.33. Goodwill arising on acquisition of Firestop Chemicals
Limited has been capitalised. The purchase of Firestop Chemicals Limited has been accounted for by the acquisition
method of accounting.
The loss after taxation and minority interests of Firestop Chemicals Limited for the year ended 30
September 2002 was #560,672.
The assets and liabilities of Firestop Chemicals Limited acquired were as follows:
Book Value and Fair Value
#'000
Fixed assets:
Tangible assets 7
Investments 2
Current assets:
Debtors 18
Bank and cash 511
Total assets 538
__________
Creditors:
Trade creditors 87
Other creditors 261
Accruals 3
Preference shares 1,300
Total liabilities 1,651
_________
Amounts attributable to equity shareholders (1,113)
_________
Group shareholding (63%) (706)
Goodwill (see note 9) 1,274
Consideration 568
Satisfied by:
Issue of shares 543
Cash consideration 25
568
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2003 (Continued)
22. OTHER RELATED PARTY TRANSACTIONS
As detailed in Note 12(b), the group has investments in certain companies. Certain directors from the company
are on the board of directors of these companies. The group provided funds to Hardide Limited and Biocote Limited
and charges them interest and management fees as follows:-
31 March 31 March
2003 2002
#'000 #'000
Management fees receivable 85 324
Interest receivable 27 35
Trade debtors 916 966
23. COMMITMENTS
The group is committed to provide additional finance up to an amount of #131,083 (31 March 2002: #55,969) to
another company to assist that company with its development.
24. CONTINGENT LIABILITIES
In the event of certain condition, grants of #57,000 received in respect of marketing expenditure by CFB (Isle
of Man) Limited, may be repayable to the Isle of Man Government.
FLINTSTONE TECHNOLOGIES PLC
(Registered in England and Wales with company number 4134409)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the third Annual General Meeting of Flintstone Technologies plc will be held at 10am on
16 July 2003 at 9th Floor, 88 Wood Street, London EC2V 7QR for the following purposes:
ORDINARY BUSINESS
1. To receive and adopt the Directors' Report and the Audited Statement of Accounts for the year ended 31 March
2003.
2. To re-appoint as a Director of the Company Mr M J Hough, who retires by rotation.
3. To re-appoint as a Director of the Company Mr C I Cooke, who retires by rotation.
4. To re-appoint as a Director of the Company Mr G V Hirsch, who retires by rotation.
5. To re-appoint as a Director of the Company Dr Y N Zhuk, who retires by rotation.
6. To re-appoint PKF of 52 Mount Pleasant, Liverpool as the Auditors of the Company and to authorise the
Directors to fix the remuneration of the Auditors for 2003.
SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolutions of which resolution 7 will be proposed as an ordinary
resolution and resolution 8 will be proposed as a special resolution.
ORDINARY RESOLUTION
7. That in substitution for all existing authorities under that Section, the Directors be and are hereby
generally and unconditionally authorised for the purposes of Section 80 of the Companies Act 1985 ("the Act") to
allot, grant options over, offer or otherwise deal with or dispose of any relevant securities (as defined in Section
80(2) of the Act) up to an aggregate nominal amount of #1,622,300 to such persons, at such times and generally on
such terms and conditions as the Directors (subject to the Articles of Association of Company) in their absolute
discretion may determine during the period commencing on the date of the passing of this Resolution and expiring
(unless previously renewed, varied or revoked by the Company in general meeting) fifteen months from the date of the
passing of this Resolution or, if earlier, on the conclusion of the next Annual General Meeting of the Company, save
that the Company may prior to the expiry of such authority make an offer or agreement under which relevant securities
would or might fall to be allotted after such expiry; and the Directors may allot relevant securities in pursuance of
such offer or agreement as if the authority conferred by this Resolution had not expired.
SPECIAL RESOLUTION
8. That in substitution for all existing authorities and subject to the passing of Resolution 7, the Directors be
and are hereby empowered pursuant to Section 95 of the Act to allot or make offers or agreements to allot equity
securities (as defined in Section 94(2) of the Act) as if Section 89(1) of the Act did not apply to any such
allotment PROVIDED THAT this power shall be limited to:
(a) The grant of options over ordinary shares of 5 pence each representing up to 10 per cent of the issued
share capital of the Company pursuant to the Share Option Schemes adopted by the Company; and
(b) The allotment otherwise than pursuant to paragraph (a) above of equity securities up to an aggregate
nominal amount of #81,115
provided such authority shall expire at the conclusion of the next Annual General Meeting of the Company (unless
previously renewed, varied or revoked by the Company in general meeting) save that the Company may prior to such
expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and
the Directors may allot equity securities pursuant to any such offer or agreement as if the authority conferred
hereby had not expired.
By order of the Board
REBECCA L SMITH
Secretary
18 June 2003
Registered Office:
Knights Quarter
St John's Lane
London
EC1M 4AJ
Notes:-
1. A member entitled to attend and vote at the above mentioned Annual General Meeting may appoint one or more
proxies to attend and on a poll, to vote instead of him. A proxy need not be a member of the Company. Completion and
return of a proxy form will not prevent a member from attending and voting at the meeting in person.
2. A form of proxy is enclosed with this Notice. To be valid, the form of proxy (together with my power of
attorney or other authority (if any) under which it is signed or a notarially certified copy of such power of
attorney) must be deposited with the Company Secretary at PO Box 903, 52 Mount Pleasant, Liverpool L69 3FT no later
than 48 hours before the time fixed for the Annual General Meeting.
3. Pursuant to Regulation 41 of the Uncertified Securities Regulations 2001, only those shareholders registered
in the register of members of the Company as at 10 am on 14 July 2003 shall be entitled to attend and vote at the
Annual General Meeting in respect of that number of Ordinary Shares registered in their name at that time. Subsequent
changes to the register of member of the Company will be disregarded in determining the rights of any person to
attend or vote at the Annual General Meeting.
4. The following documents will be available for inspection at the office of the Company at 52 Mount Pleasant,
Liverpool L3 5UN during usual business hours on Monday to Friday (except public holidays) from the date of this
Notice until the date of the meeting and will be available for inspection at the place of the meeting for fifteen
minutes prior to the meeting and at the meeting:
(a) The register of Directors' interests in the shares of the Company kept in accordance with Section 325 of
the Act; and
(b) Copies of the service contracts between the Company and its Directors.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXKPFFEDEFE