TIDMAXS
RNS Number : 7523H
Accsys Technologies PLC
25 June 2013
AIM: AXS
NYSE Euronext Amsterdam: AXS
25 June 2013
ACCSYS TECHNOLOGIES PLC
("Accsys" or the "Company")
Preliminary results for the year ended 31 March 2013
Accsys, the environmental science and technology company whose
primary focus is on the production and technology licensing of
Accoya(R) wood and Tricoya(R) wood elements, today announces its
preliminary results for the year ended 31 March 2013.
2013 2012
Total Group Revenue EUR18.8m EUR15.0m +25%
Accoya(R) wood sales (excluding
Medite) EUR16.4m EUR11.3m +45%
Improved
Loss after tax EUR11.0m EUR14.4m 24%
Year-end cash balance EUR20.5m EUR24.6m -17%
Operational Highlights
-- Total of 42 (2012: 35) Accoya(R) distribution or agency
agreements covering most of Europe, Australia, Canada, Chile,
China, India, North America, New Zealand and parts of SE Asia;
-- Significant progress on licence agreement with Solvay for the
production and sale of Accoya(R) ; continue to expect agreement to
become unconditional this year:
- Process Specification Package and Basic Process Design Package
delivered to Solvay; work on-going in respect of full Process
Design Package which is to be delivered on agreement becoming
unconditional; and
- Accsys and Solvay sales teams developing market; retail
decking product trial launched in France and Germany.
-- 50:50 joint venture with INEOS, Tricoya Technology Limited
('TTL'), to exploit Accsys' Tricoya(R) technology in a worldwide
panels market worth more than EUR60bn, making encouraging
progress:
- working towards agreeing a full licence agreement with Medite
for the manufacture of Tricoya(R) following the signing of a Heads
of Terms in December 2012
-- Further Intellectual Property development; Accoya(R) process
patent will be granted in the USA (subject to payment of issuance
fees). Accoya(R) has six patent families with 31 granted patents
(including product patents in the UK, New Zealand and Singapore)
and 20 further applications filed across 24 countries; and TTL
benefits from a further five published Tricoya(R) patent families
and 48 published applications filed;
-- Substantial industry recognition and additional confirmation of sustainable benefits.
Financial Highlights
-- Total revenue increased by 25% to EUR18.8m (2012: EUR15.0m);
-- Total Accoya(R) wood sales increased by 22% to EUR16.6m
(2012: EUR13.6m). Accoya(R) sales, excluding to Medite, increased
by 45% to EUR16.4m (2012: EUR11.3m).
-- Revenue in second half of financial year increased by 15%
when compared to the first half of the financial year,
demonstrating progressive momentum and increasing demand for
Accoya(R) ;
-- Significant improvement in gross margin at group level; margin of 18% (2012: -0.3%);
-- EBITDA loss at Arnhem manufacturing plant reduced by 75% to
EUR0.9m (2012: EUR3.6m loss); continue to expect the Arnhem plant
to achieve an EBITDA positive level at 50% production capacity in
the current financial year;
-- Loss after tax improved by 24% to EUR11.0m (2012: EUR14.4m);
-- Maintained robust balance sheet with year-end cash balance of
EUR20.5m (2012: EUR24.6m); and
-- Strong progress in first quarter of current financial year -
sales to Accoya(R) customers expected to have increased by in
excess of 50% compared to the same period in the prior year.
Commenting, Paul Clegg, CEO of Accsys, said:
"It has been a year of encouraging strategic and operational
progress for the Company. Group revenue has notably increased, a
trend we expect to continue as Accoya(R) achieves further market
penetration. We have moved closer to finalising licensing
agreements on two fronts, with talks with a number of other parties
advancing well.
"Our relationship with Solvay is strong and we remain confident
that the Accoya licence agreement will become unconditional before
the end of this calendar year.
"Sales in the first three months of this financial year show
significant improvement on the corresponding period last year
which, combined with licensing progress, bodes well for our future
financial performance. I believe our truly outstanding, innovative
products are beginning to gain serious traction in the global
construction markets, which enables me to look to the future with
confidence and optimism."
There will be a presentation for analysts and investors relating
to these results at 10:00 BST today (25 June 2013). The
presentation will take the form of a web based conference call,
details of which are below:
Webcast link: Click here or copy and paste ALL of the following
text into your browser:
http://www.media-server.com/m/p/wt35soac
Conference call details for participants:
Participant Telephone Number: +44 (0)20 3427 1914 (UK Toll)
Confirmation Code: 7791877
Participants will have to quote the above code when dialling
into the conference.
For further information, please contact:
Accsys Technologies Paul Clegg, CEO via Blythe Weigh
PLC Hans Pauli, COO Communications
Will Rudge, FD
Nominated Adviser: Oliver
Cardigan
Corporate Broking: Christopher
Wilkinson +44 (0)20 7260
Numis Securities Ben Stoop 1000
+44 (0)20 7138
3204
Paul Weigh +44 (0) 7989 129658
Tim Blythe +44 (0) 7816 924626
Blythe Weigh Communications Rob Kellner +44 (0) 7800 554377
SPJ Financial & Corporate
Communication Frank Neervoort +31 681734236
Chairman's Statement
Introduction
I am very pleased to report that Accsys has enjoyed a productive
financial year, delivering notable revenue increases and making
strong progress in licensing the Company's proprietary
technologies. These achievements, combined with the positive start
the Company has made to the new financial year, further support my
confidence that the group is on the right path towards achieving
its long term objective of delivering sustainable
profitability.
Demand for Accoya(R) has continued to grow with a 45% increase
in sales to Accoya(R) customers recorded in the year to March 2013
to EUR16.4m (2012: EUR11.3m). Encouragingly, this growth was
widespread, with 12 out of 14 of our top geographies recording an
increase. Total Group revenue increased by 25% to EUR18.8m for the
year (2012: EUR15.0m). This trend has continued in the start of the
new financial year and we are very pleased by our sales growth for
the first quarter of the year.
The increased sales volume has helped generate a significant
improvement in our profitability with our gross profit margin
increasing from almost break-even to 18%. We expect this trend to
continue due to a combination of increasing sales volumes, price
increases implemented since the start of the current financial year
and the economies of scale, given certain production costs are
fixed or partially fixed, which we expect to achieve from our
manufacturing plant in Arnhem. As a result, we continue to expect
the Arnhem plant to reach 50% of its capacity within the current
financial year, which in turn will generate an EBITDA positive
level for the plant, helping to indicate the potential returns
prospective licensees may be able to generate, in addition to
seeding target markets.
Our balance sheet remains strong with a cash balance of EUR20.5m
at the end of March 2013. This has been helped by the completion of
the sale and leaseback of the second part of our land in Arnhem and
the issue of shares to INEOS in October 2012 at the same time as we
entered a joint venture with them, raising EUR1.7m and EUR4m
respectively.
Our cash out-flow from operating activities (before changes to
working capital) decreased by 24% to EUR7.6m (2012: EUR10.0m). We
expect this cash-out flow to decrease in the next year, reflecting
improved profitability and a continued focus on minimising our
costs.
Our longer term objective of licensing our technologies has also
progressed. We continue to work with Solvay (previously called
Solvay-Rhodia) towards completing the full Process Design Package
and continue to expect the licence agreement to become
unconditional following the approval of Solvay's board of Directors
later by the end of the year. The collaboration with Solvay has
also continued in many other respects including developing the
market with the launch of a retail decking trial being carried out
in five retail chains in France and Germany.
Tricoya Technologies Limited ('TTL'), our joint venture with
INEOS formed in October 2012 for the exploitation and development
of Accsys' intellectual property surrounding Tricoya(R) wood
elements, has made a positive start and is working towards agreeing
a full unconditional licence agreement with Medite for the
manufacture of Tricoya(R) following the signing of a Heads of Terms
in December 2012.
Accsys and TTL continue to develop a number of new and existing
potential Accoya(R) and Tricoya(R) licence opportunities
respectively, with counterparties whose combined existing total
wood product manufacturing or processing capacity is in excess of
10 million m(3) per annum. While these discussions remain on-going,
the complex nature and investment required by a licensee, means
that the timing and certainty of their completion remains difficult
to predict.
Accoya(R) and Tricoya(R) continue to receive industry
recognition and have won a number of high profile awards. For
example Medite Tricoya won Product of the Year at the Sustain
Magazine Awards for Sustainability; both Accoya(R) and Tricoya(R)
were named the Best Wood Innovation in Holland's Houtwereld 2012,
Top Suppliers Awards as well as jointly winning the Supreme Award
for Innovation at the UK's Timber Expo in 2012.
Given the global construction industry's focus on delivering
projects in an increasingly sustainable manner, hence reducing the
environmental impact of construction projects throughout their
lifetime, we have continued to promote the positive environmental
and sustainable attributes of our products as we believe this has
an important role to play in driving further sales growth and
market penetration. Having recently been admitted as a founding
member of the Social Stock Exchange, we have also confirmed that
windows made from Accoya(R) have been found to be carbon negative
over their lifetime and that Accoya(R) 's carbon footprint
significantly outperforms most other building materials.
In March we announced the retirement and resignation from the
Board of Directors of Lord Sanderson of Bowden. Lord Sanderson, who
is 80, had served on the Board since 2007 and has been a tremendous
asset for the Company. His support and commitment have been of
great value and he will be much missed. We wish him the very best
in his well-earned retirement from Accsys.
The start to the new financial year has added further support to
my confidence in our future. Our on-going Accoya(R) sales growth,
which is helping further seed markets, together with the continuing
progress being made by all parts of the Accsys Group means that we
are now in a strong position to achieve our objective of making the
Group profitable and successfully licensing our technologies
globally.
Gordon Campbell
Non-executive Chairman
24 June 2012
Chief Executive's Report
Accoya(R) wood and Tricoya(R) wood elements
Manufactured through Accsys' proprietary acetylation processes,
Accoya(R) and Tricoya(R) wood elements exhibit superior dimensional
stability, durability and other important benefits when compared
with alternative natural, treated and modified woods as well as
more resource intensive man-made materials.
The attributes of Accoya(R) make it a highly effective solution
for a wide range of external applications including doors, windows,
cladding, decking, shutters, louvers, civil works, landscaping,
outdoor furniture and more.
The possibilities for the use of Tricoya(R) are ever expanding
but include facade cladding, fascia and soffit panels and other
secondary exterior applications, window components; wet interiors,
including wall linings in swimming pools, bathrooms, wet rooms,
changing rooms; speciality furniture including lockers, cubicles,
chairs and tables, play frames, tree houses and exterior composite
furniture; signage; automotive parts and sports equipment.
Accoya(R) sales
We have continued to make strong progress in achieving the dual
aim of seeding the market and improving the profitability of the
Group by increasing sales of Accoya(R) manufactured from our plant
in Arnhem. Sales to Accoya(R) customers increased by 45% in the
year to March 2013 compared to the previous financial year. This
increase, to EUR16.4m (2012: EUR11.3m), excluded EUR0.2m of sales
to Medite for the manufacture of Tricoya, noting a substantial
volume was sold to Medite in the second half of the previous
financial year to enable them to build up initial stocks of Medite
Tricoya. Sales to Medite have recently resumed as their initial
stocks have become depleted. Total Accoya sales, including sales to
Medite, increased by 22% to EUR16.6m (2012: EUR13.6m).
12 out of 14 of our top geographies recorded an increase in
Accoya(R) revenue, demonstrating that we are increasing our sales
through existing distributors as well as by the introduction of new
distributors. We now have a total of 42 distribution and agency
agreements in place, an increase of seven during the year, covering
most of Europe, Australia, Canada, Chile, China, India, North
America, New Zealand and parts of South-East Asia.
Sales in the first quarter of the new financial year have
continued to show very positive growth compared to the same period
last year. While we remain optimistic concerning future growth
prospects, it remains likely that such sales growth may be lumpy,
reflecting that some new opportunities may be more significant than
others.
Arnhem plant
The increased activity levels have resulted in our Arnhem plant
operating at higher consistent production levels than before. Total
manufacturing revenue increased by 23% to EUR18.3m (2012: EUR14.9m)
with the resulting gross manufacturing margin increasing from a 1%
loss to a 15% profit (with total Group gross profit increasing from
almost break even to 18%). This improvement is attributable to
improved economies of scale, noting some of the production costs
are fixed or partially fixed in nature, together with other process
improvements which are made on an on-going basis. The manufacturing
facility, which includes 65% of the Group's headcount, recorded an
EBITDA loss of EUR0.9m for the year, a 75% improvement on the
previous year, despite still operating at less than 50% capacity.
(The difference between EUR16.4m of sales to Accoya customers and
EUR18.3m manufacturing revenue is attributable to sales to Medite
and other revenue, primarily the sale of acetic acid, a bi-product
from our manufacturing process.)
We continue to expect the Arnhem manufacturing facility to
achieve an EBITDA positive level at 50% of its current capacity
(i.e. approximately 17,500m(3) ) in the current year; a level which
also indicates the potential returns a prospective licensee may be
able to generate.
Research and development has resulted in a number of
improvements to the plant including improving reliability and
reducing maintenance costs. On-going projects include targeting
further reductions to production cycle time, improvements in
quality and the development of preventative maintenance
processes.
Licensing
In June 2012, Accsys entered into a licence agreement with
Solvay for the production and sale of Accoya(R) wood. The licence
provides for the grant of exclusive rights to Solvay for a 15 year
period to produce and sell Accoya(R) within the Council of Europe,
excluding Accsys' existing 'home' markets of Belgium, Ireland,
Luxembourg, the Netherlands and the United Kingdom, in return for
Solvay paying Accsys licence and royalty fees and meeting other
performance obligations. The agreement allows for the construction
of multiple Accoya(R) production plants, with the first having an
initial capacity of approximately 63,000 m(3) of annual Accoya(R)
output, although remains conditional on certain limited provisions
being satisfied, including the formal approval of Solvay's board of
directors, which is expected by the end of 2013.
Since signing the agreement, significant progress has been made
with Accsys having delivered a Process Specification Package and a
Basic Process Design Package to Solvay. Work has been on-going in
respect of a full Process Design Package which will be delivered
upon approval by the Solvay board later this year. These design
packages enable Solvay to carry out the planning and engineering
design required for them to be able to construct their plant.
The significant amount of work being undertaken by Accsys and
Solvay also includes co-ordination between engineering teams, the
completion of safety reviews required by local regulation and other
operational planning matters such as wood handling, instrumentation
and chemical recycling.
In addition, our respective sales teams have been working
closely together to analyse and develop the market territories
covered by their licence. This collaboration has included a
recently launched Accoya(R) decking trial within retail stores in
France and Germany in which a choice of a coated, ready to install
product for consumers or a base coated version for contractors has
been produced.
The situation with our other existing licensees in Asia and the
Middle East, Diamond Wood and Al Rajhi, has not improved with
Diamond Wood still not having yet secured funding. We continue to
work with Diamond Wood to develop the market in their territory and
remain confident that in the longer term this region offers
substantial opportunities for generating revenue. We have recently
granted an exclusive right to market, sell and distribute Accoya(R)
in Japan to a third party from the second half of 2014, upon which
Diamond Wood's licence rights in respect of Japan will cease.
Tricoya Technologies Limited
On 5 October 2012, Accsys entered into a 50:50 joint venture
with INEOS Industries Holdings Limited ('INEOS') to exploit Accsys'
intellectual property surrounding its proprietary Tricoya(R) wood
elements acetylation technology and processes, which is expected to
lead to the accelerated global deployment of Tricoya. The new
company, Tricoya Technologies Limited ('TTL'), is now developing
and exploiting Accsys' Tricoya technology for use within MDF,
particle board and wood plastic composites in a worldwide panel
products market estimated to be worth more than EUR60 billion
annually.
As part of the transaction, TTL was granted rights to exploit
Accsys' Tricoya(R) technology but will also benefit from the
licencing of any intellectual property held by INEOS that may
assist the joint venture in maximising the value of the Tricoya(R)
proposition.
Profits generated by TTL are to be shared between Accsys and
INEOS in a way that reflects each party's interest. The
contribution of Accsys' Tricoya(R) intellectual property to the
Joint Venture will be reflected through a disproportionate future
profit share which will create significant value for Accsys. This
future profit share reflects that Accsys had made a significant
investment in Tricoya(R) over a number of years prior to the
formation of the joint venture. This included research and
development expenditure concerning the Tricoya process and product
design, the joint development agreement with Medite and the
resulting product launch of Medite Tricoya Extreme Durable MDF in
2011 together with significant investment in building the Tricoya
brand and market.
TTL has already made progress and is working towards agreeing a
full unconditional licence agreement with Medite for the
manufacture of Tricoya(R) following the signing of a Heads of Terms
in December 2012.
During the period, Medite has been continuing to sell Medite
Tricoya manufactured using Accoya(R) purchased from Accsys' plant
in Arnhem. Unlike the new, continuous production acetylation
process which is the subject of the expected licence between TTL
and Medite, the method currently employed by Medite is not
commercially viable in the longer term. However, this method is
enabling Medite to seed the market ahead of the construction of
their own plant, with Medite now successfully selling to
distributors including in the UK, Ireland, Benelux and Germany,
enabling the seeding of the market place for Medite and other
potential licensees.
TTL continues to work closely with the licence option holder in
Latin America, with on-going activities concerning market
evaluation and preliminary production planning in accordance with
the agreement.
Financial Summary
Total revenue for the year ended 31 March 2013 increased by 25%
to EUR18.8m (2012: EUR15.0). In the same period, Accoya(R) revenue,
excluding sales to Medite for the manufacture of Tricoya, increased
by 45% to EUR16.4m (2012: EUR11.3m). Total revenue also included
EUR0.6m of licence income which had been recorded in the first half
of the year.
Gross operating margin for the Group improved from almost
break-even to 18% profit, resulting from increased Accoya(R) sales,
the recording of licence income and improved operating
efficiencies.
Other operating costs increased by 8% to EUR13.5m due in part to
an increase in staff costs and to the relative weakening of the
Euro, in particular in the first half of the financial year. The
increase is also attributable to non-recurring items legal and
intellectual property costs incurred in relation to the agreements
made in the year. In addition, the group continued to invest in
sales and marketing, which increased by 28% to EUR2.9m.
However, other operating costs decreased by 13% to EUR6.3m in
the second half of the financial year compared to the first half
year costs of EUR7.2m. This reduction was partly attributable to
the lack of the non-recurring items described above, an improvement
in the exchange rate in the second half of the year and to certain
costs being recharged to TTL.
The loss from operations decreased by 31% from EUR14.8m to
EUR10.2m due to the improvement in gross margin described above and
the impact of a charge recorded in the previous year for the
impairment of licence related assets. Excluding the impairment
charge, the loss from operations decreased by 19% from EUR12.5m to
EUR10.2m.
The decrease in cash balance to EUR20.5m as at 31 March 2013 is
the result of EUR7.6m of cash out-flows from operating activities
before changes in working capital, which represented a 24% decrease
compared to the previous year. Further cash out-flows were
attributable to a EUR1.4m increase in working capital, largely due
to the increase in inventory balances as explained above and
EUR0.9m expenditure in respect of capitalised development costs.
The cash out-flow was offset by EUR4.1m received in respect of the
issue of new shares and EUR1.7m arising from the completion of the
second part of the sale and leaseback of the land in Arnhem.
Intellectual Property
During the period we received confirmation from the Patent
Office in New Zealand and Singapore of the grant of Accoya(R)
product and process patent claims which successfully secure
monopoly rights for Accoya(R) in those territories for 20 years
from the patent application filing date. These granted patents are
in addition to those recently obtained in the United Kingdom and
South Africa, and further strengthens Accsys' patent portfolio,
securing protection for Accsys, its licensees and distributors
across the globe. In addition, Accsys has recently received
confirmation from various other Patent Offices, importantly
including the United States of America, that various acetylated
solid wood process patent claims will be granted, subject to
payment of issuance fees. These additional grants will act to
further strengthen Accsys' patent portfolio in key global
markets.
Accsys has continued to file new patent applications in the
recent period and now currently owns six different Accoya(R) patent
families, with 31 patents granted or accepted for grant and 20
further applications filed across 24 countries world-wide.
In respect of Tricoya(R) , TTL now benefits from a further five
published patent families with a total of 48 published product and
process patent applications filed in key territories across the
world.
Our principal brands, Accoya, Accsys, Tricoya and the Trimarque
Device, including Arabic, Chinese and Japanese transliterations,
are protected by trademark registration in 55 countries throughout
the world with pending applications in a further two countries.
These registrations and applications cover our corporate identity
and the products we sell as well as those to be sold by our
licensees and distributors.
Other developments
Accsys has invested a significant amount in developing and
marketing our product brands. This has included working closely
with our distributors and, where appropriate, their customers by
producing, for example, co-branded websites and marketing
collateral. We are expanding our successful Joinery Certification
Programme; a free of charge education process involving a
presentation with a Q&A session aimed at key production staff
at the joiners' premises. This has already proved very effective in
driving end customer demand in the UK.
Research and development focuses on improvements to the plant
and processes as described above. In addition, we have continued
researching and developing a number of new species of wood to be
acetylated. Following on from the introduction of Accoya(R) Alder
last year, we have made progress in developing a number of other
species. The ability to commercially acetylate species other than
Radiata pine will enable Accsys to increase its product offering,
with other species offering different characteristics allowing new
applications as well as introducing alternative raw material
sourcing options for Accsys and licensees, which has the potential
to reduce input costs, particularly transportation costs.
Environmental credentials
Accoya(R) and Tricoya(R) boast superior green credentials. By
significantly enhancing the durability and dimensional stability of
abundantly available certified wood, our products provide
compelling environmental advantages over slow-growing hardwoods
(which are often unsustainably sourced), woods treated with toxic
chemicals, and non-renewable carbon-intensive materials such as
plastics, metals and concrete.
Recently, an updated analysis by leading climate change
consultancy Verco, has shown that Accoya's carbon footprint
significantly outperforms most other building materials, including
a wide range of sustainably sourced hardwoods. Further analysis by
the Delft University of Technology following independent protocols
revealed that Accoya(R) window frames are now classified as carbon
negative over their lifetime cycle. Medite Tricoya(R) won Product
of the Year at the Sustain Magazine Awards for Sustainability,
Business and the Built Environment based on its combined innovation
and sustainability.
As a result of these matters and our prior track record, we were
pleased to recently be admitted as a founding member to the Social
Stock Exchange,
(http://www.socialstockexchange.com/members/accsys-technologies).
Outlook
We are now beginning to see the benefits of our significant
investment in sales and marketing over the last two years. This
activity, together with the increase in the number of our
distributors, leaves us well positioned to deliver continued
Accoya(R) sales growth. We have recorded a strong start to the new
financial year and, while our sales growth remains difficult to
predict and is likely to remain lumpy, I am confident that our
growth will enable us to achieve profitability; with the Arnhem
plant achieving an EBITDA positive level in the current year and
with the Group as a whole thereafter.
The progress we have made with developing the Solvay licence,
together with the advances TTL has made in a short period in
respect of Tricoya(R) , allow me to remain confident that we will
be able to extract significant value from our technologies in the
longer term. In this respect we continue to develop a number of new
and existing potential Accoya(R) and Tricoya(R) licence
opportunities, with counterparties whose combined existing total
wood product manufacturing or processing capacity is in excess of
10 million m(3) per annum. While these discussions remain on-going,
the complex nature and investment required by a licensee means that
the timing and certainty of their completion remains difficult to
predict.
Paul Clegg
Chief Executive Officer
24 June 2013
Financial Review
Income statement
Revenue
Total revenue for the year ended 31 March 2013 increased by 25%
to EUR18.8m (2012: EUR15.0). In the same period, Accoya(R) revenue
increased by 45%, excluding sales to Medite for the manufacture of
Tricoya, to EUR16.4m (2012: EUR11.3m), noting a substantial volume
was sold to Medite in the second half of the previous financial
year to enable them to build up initial stocks of Medite Tricoya
Extreme Durable MDF. Total revenue also included EUR0.6m of licence
income which had been recorded in the first half of the year. Other
revenue, which includes the sale of acetic acid, increased by 21%
to EUR1.7m (2012: EUR1.4m).
Cost of sales
Cost of sales increased by 3% to EUR15.5m (2012: EUR15.1m).
Gross operating margin improved from a 0.3% loss to 18% profit,
resulting from increased Accoya(R) sales, the recording of licence
income and improved operating efficiencies. The gross manufacturing
margin increased from a 1% loss to a 15% profit.
Impairment of licence related assets
In the previous year, a EUR2.3m net impairment of licensee
receivables was recorded. This consisted of EUR2.9m attributable to
Al Rajhi, representing a non-cash impairment of licensee net
receivables recorded in previous years. The impairment was recorded
as uncertainty remained as to whether the licence will proceed.
This was off-set by EUR0.6m reversal of a previously recorded
impairment booked in respect of Diamond Wood. The impairment was
reversed as a result of Diamond Wood paying contractually due
technology fees subsequent to the previous year-end.
Other operating costs
Other operating costs increased by 8% to EUR13.5m (2012:
EUR12.5m). This increase was attributable to an increase in staff
costs and to the relative weakening of the Euro, in particular in
the first half of the financial year, which impacted the costs
incurred by the Windsor and Dallas offices. The increase was also
attributable to non-recurring items including legal and
intellectual property costs incurred in relation to the agreements
made in the year. In addition, the Group continued to invest in
sales and marketing, which increased by 28% to EUR2.9m.
Headcount remained consistent with an average of 96 employees
during the year (2012: 96). However, staff costs increased by 20%
to EUR8.3m (2012: EUR6.9m). This was attributable to the prior year
including the reversal of a provision for pension costs recorded in
an earlier period for EUR324,000. In addition, the share based
payments charge increased by 166% to EUR927,000 (2012: EUR348,000)
which is attributable to the timing of share bonus awards and share
options together with the inclusion in the prior year of the effect
of earlier staff terminations and the resulting lapse in their
share options.
Other operating costs decreased by 13% to EUR6.3m in the second
half of the financial year compared to the first half year costs of
EUR7.2m. This reduction was partly attributable to the lack of the
non-recurring items described above, the improvement in the
exchange rate and partly due to certain costs being recharged to
Tricoya Technologies Limited.
Loss from operations
The loss from operations decreased by 31% to EUR10.2m (2012:
loss of EUR14.8m) due to the improvement in gross margin described
above and the impact of a charge recorded in the previous year for
the impairment of licence related assets. Excluding the impairment
charge, the loss from operations decreased by 18% from EUR12.5m to
EUR10.2m.
Finance income
Finance income of EUR206,000 (2012: EUR154,000) represents
interest receivable on bank deposits.
Finance expense
The finance expense of EUR244,000 (2012: EUR240,000) is due to
interest element arising on the payments attributable to the sale
and leaseback of part of the Group's Arnhem land and buildings in
Arnhem which was completed part way through the previous financial
year. The prior year also included EUR66,000 of costs attributable
to an equity line of credit which expired on 31 March 2012.
Share of joint venture loss
On 5 October 2012, Accsys entered into a new 50:50 joint venture
with INEOS to exploit Accsys' intellectual property surrounding its
proprietary Tricoya(R) wood elements acetylation technology and
processes, which is now expected to lead to the accelerated global
deployment of Tricoya. The new company, Tricoya Technologies
Limited ('TTL'), will develop and exploit Accsys' Tricoya
technology for use within MDF, particle board and wood plastic
composites in a worldwide panel products market estimated to be
worth more than EUR60 billion annually.
As part of the transaction, TTL has been granted rights to
exploit Accsys' Tricoya(R) technology and will also benefit from a
licence of any intellectual property held by INEOS that may assist
the joint venture in maximising the value of the Tricoya(R)
proposition. Profits generated by TTL are to be shared between
Accsys and INEOS in a way that reflects each party's interest. The
contribution of Accsys' Tricoya(R) intellectual property to the
Joint Venture will be reflected through a disproportionate future
profit share which will create significant value for Accsys.
This future profit share reflects that Accsys had made a
significant investment in Tricoya over a number of years prior to
the formation of the joint venture. This included research and
development expenditure concerning the Tricoya process and product
design, the joint development agreement with Medite and the
resulting product launch of Medite Tricoya Extreme Durable MDF in
2011 together with significant investment in building the Tricoya
brand and market.
TTL has been accounted in the Accsys Group accounts using the
equity method. During the period, TTL recorded nil revenue and
total costs of EUR860,000 resulting in Accsys' share of EUR430,000.
(See note 8 for further details.)
Taxation
The net tax charge of EUR355,000 (2012: EUR536,000 credit)
primarily represents a tax charge arising from the utilisation of
tax losses of EUR656,000 offset by research and development tax
credits of EUR312,000 attributable to activities carried out in the
current year.
Dividends
No final dividend is proposed in 2013 (2012 final dividend:
EURNil). The Board deems it prudent for the Company to maintain as
strong a balance sheet as possible during the current phase of the
Company's growth strategy.
Earnings per share
Basic and diluted loss per share was EUR0.03 (2012 basic and
diluted loss per share was EUR0.04).
Balance sheet
Intangible assets
Intangible asset additions of EUR953,000 (2012: EUR283,000)
predominantly relate to capitalised internal development costs
including EUR456,000 in respect of the Accoya(R) licence Process
Design Package.
Property, plant and equipment
Property, plant and equipment additions of EUR0.3m (2012:
EUR1.1m) predominantly relate to technology improvements and items
of maintenance equipment at our Arnhem production facility. During
the period the Group entered into a sale and leaseback agreement
for part of the Arnhem land which has been accounted for as a
operating lease and has resulted in the disposal of EUR1.7m of land
in the period. See note 25.
Available for sale investments
Accsys Technologies PLC has previously purchased a total of
21,666,734 unlisted ordinary shares in Diamond Wood China Limited.
The historical cost of the unlisted shares held at 31 March 2013 is
EUR10m (2012: EUR10m). However, a provision for the impairment of
the entire balance of EUR10m continues to be recorded, as at 31
March 2013 the conclusion of Diamond Wood finalising its funding
arrangements was still pending. In the event Diamond Wood completes
the fund-raising, the balance may be re-valued.
Inventory
The Group had total inventory balances of EUR4.9m (2012:
EUR3.1m). Finished goods consisting of Accoya(R) represented
EUR3.0m (2012: EUR2.1m) and raw materials consisting of unprocessed
lumber represented EUR1.5m (2012: EUR0.8m) with the remainder of
the balance being work in progress. The increase is attributable to
increased sales in the period and the expected increase in sales in
the start of the next financial year.
Cash and cash equivalents
The Group had cash and bank deposits of EUR20.5m at the end of
the period (2012: EUR24.6m). The decrease in the year is mainly the
result of EUR7.6m of cash out-flows from operating activities
before changes in working capital, which represented a 24% decrease
compared to the previous year (2012: 10.0m). Further cash out-flows
were attributable to EUR1.4m increase in working capital, largely
due to the increase in inventory balances as explained above and
EUR0.9m expenditure in respect of capitalised development
costs.
The cash out-flow was offset by EUR4.1m received in respect of
the issue of new shares and EUR1.7m arising from the completion of
the second part of the sale and leaseback of the land in Arnhem,
which has been accounted for as an operating lease.
New equity
1,698,869 shares were issued under the terms of the Employee
Share Participation Plan resulting in proceeds of EUR114,019 being
received in the period. (See note 14 for further details.)
On 5 July 2012, a total of 3,926,666 shares were issued to an
Employment Benefit Trust, the beneficiaries of which are the
Executive Directors and Senior Managers (see note 14).
23,529,412 shares were issued to INEOS following the receipt of
subscription monies totalling EUR4,000,000 in October 2012,
following the formation of Tricoya Technologies Limited, the joint
venture between Accsys and INEOS (see note 8).
Trade and other receivables
Trade and other receivables have increased to EUR3.7m (2012:
EUR3.6m). Within this, trade receivables increased from EUR2.1m to
EUR2.3m, reflecting increased activity levels. This was offset by a
lower other receivables balance which was attributable to VAT.
Trade and other payables
Trade and other payables have decreased marginally to EUR3.4m
(2012: EUR3.4m).
Finance lease creditor
During the previous period the Group entered into a sale and
leaseback agreement for part of the Arnhem land and buildings. The
first phase was completed in the previous year resulting in
proceeds of EUR2.2m which has been accounted for as a finance
lease. At 31 March 2013 there are EUR3.7m of payments committed to
over the remaining life of the lease (2012: EUR4.0m) (see note 25).
The second part of the sale and leaseback of the land in Arnhem was
completed in February 2013, however this has been accounted for as
an operating lease (see note 24).
Capital structure
Details of the issued share capital, together with the details
of the movements in the Company's issued share capital in the year
are included in note 23. The Company has one class of ordinary
shares which carry no right to fixed income. Each share carries the
right to one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding nor
on the transfer of shares, which are both governed by the general
provisions of the Articles of Association and prevailing
legislation. The Directors are not aware of any agreements between
holders of the Company's shares that may result in restrictions on
the transfer of securities or on voting rights.
Details of employee share schemes are set out in Note 14. No
person has any special rights of control over the Company's share
capital and all issued shares are fully paid.
Risks and uncertainties
The net assets as at 31 March 2013 of EUR56m contain balances in
relation to the Group's goodwill and intellectual property rights
of EUR8.2m. The recoverability of these balances is dependent upon
the Group's existing licensees progressing with the completion of
their manufacturing facilities or the signing of other new licence
agreements. While the scope and timing of the production facilities
to be built by the Group's existing licensees remains uncertain,
the Directors continue to remain confident that revenue from either
existing licensees or new licensees will be generated,
demonstrating the recoverability of these balances.
In addition, the carrying value of the EUR22.3m of property,
plant and equipment, which primarily relate to the Arnhem plant,
are largely dependent upon the future profitable sales of Accoya(R)
wood made there. The price of the Accoya(R) wood and the raw
materials and other inputs vary according to market conditions
outside of our control. Should the price of the raw materials
increase by more than the sales price or in a way which no longer
makes Accoya(R) woodas competitive, then the carrying value of the
property, plant and equipment may be in doubt and become impaired.
The Directors are comfortable that the current market, best
estimates of future prices and increasing supply alternatives means
that this risk is limited.
Going concern
The financial statements are prepared on a going concern basis,
which assumes that the Group will continue in operational existence
for the foreseeable future, which is deemed to be at least 12
months from the date these financial statements are approved.
As part of the Group's going concern review, the Directors have
reviewed the Group's trading forecasts and working capital
requirements for the foreseeable future. These forecasts indicate
that, in order to continue as a going concern, the Group is
dependent on the achievement of certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem and the collection of on-going working
capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and
performance measures and believe that appropriate controls and
procedures are in place or will be in place to make sure that these
are met. The Directors believe, while some uncertainty inherently
remains in achieving the budget, in particular in relation to
market conditions outside of the Group's control, that there are a
sufficient number of alternative actions and measures that can be
taken in order to achieve the Group's medium and long term
objectives.
Therefore, the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
William Rudge
Finance Director
24 June 2013
Directors Report for the year ended 31 March 2013
The Directors present their report together with the audited
consolidated financial statements for the year ended 31 March
2013.
Results and dividends
The consolidated statement of comprehensive income for the year
is set out on page 18, and shows the loss for the year.
The Directors do not recommend the proposal of a final dividend
in respect of the current year, consistent with the prior year.
Principal activities and review of the business
The principal activity of the Group is the production and sale
of Accoya(R) solid wood and licensing of technology for the
production and sale of Accoya(R) wood and Tricoya(R) wood elements
via the Company's 100% owned subsidiaries, Titan Wood Limited,
Titan Wood B.V., Titan Wood Technology B.V. and Titan Wood Inc
(collectively the 'Group') and its newly formed joint-venture with
INEOS, Tricoya Technologies Limited. Manufactured through the
Group's proprietary acetylation processes, these products exhibit
superior dimensional stability and durability compared with
alternative natural, treated and modified woods as well as more
resource intensive man-made materials. A review of the business is
set out in the Chairman's statement and the Chief Executive's
report on pages 5 to 7.
Financial instruments
Details of the use of financial instruments by the Company and
its subsidiary undertakings are set out in Note 26 of the financial
statements.
Share issues
On 5 July 2012, a total of 3,926,666 shares were issued to an
Employment Benefit Trust (the 'Trust'), the beneficiaries of which
are the Executive Directors and Senior Managers (see note 14).
On 8 August 2012, a total of 783,283 of Ordinary shares were
issued and released to employees together with the 783,283 of
Ordinary shares issued to trust on 2 August 2011. (See note
14).
On 7 September 2012, a total of 415,332 of Ordinary shares were
issued to the trust under the terms of the Employee Share
Participation Plan. (See note 14).
On 19 October 2012, a total of 23,529,412 of Ordinary shares
were issued to INEOS following the receipt of subscription monies
totalling EUR4,000,000.
On 18 January 2013, a total of 369,423 of Ordinary shares were
issued to the trust under the terms of the Employee Share
Participation Plan. (See note 14).
On 23 January 2013, a total of 130,831 of Ordinary shares were
issued and released to employees together with the 130,831 of
Ordinary shares issued to the trust on 23 January 2012. (See note
14).
Principal risks and uncertainties
The business, financial condition or results of operations of
the Group could be adversely affected by any of the risks set out
below. The Group's systems of control and protection are designed
to help manage and control risks to an appropriate level rather
than to eliminate them.
The Directors consider that the principal risks to achieving the
Group's objectives are those set out below.
(a) Economic and market conditions
The Group's operations comprise the manufacture of Accoya(R)
wood and licensing the technology to manufacture Accoya(R) and
Tricoya(R) wood elements to third parties. The cost and
availability of key inputs affects the profitability of the Group's
own manufacturing whilst also impacting the potential profitability
of third parties interested in licensing the Group's technology.
The price of key inputs and security of supply are managed by the
Group, partly through the development of long term contractual
supply agreements.
In the current economic climate, the potential to enter into
additional licence agreements may be lower than originally
anticipated.
An element of the Group's strategy for growth envisages the
Group selling new or existing products and services into other
countries or into new markets. However, there can be no assurance
that the Group will successfully execute this strategy for growth.
The development of a mass market for a new product or process is
affected by many factors, many of which are beyond the control of
the Group, including the emergence of newer and more competitive
products or processes and the future price of raw materials. If a
mass market fails to develop or develops more slowly than
anticipated, the Group may fail to achieve profitability.
The Group has intangible assets amounting to EUR8.2m. The
carrying values of these assets are dependent on new or existing
licensees building their production plants and executing their
business plans. See the Financial Review for more details.
(b) Regulatory, legislative and reputational risks
The Group's operations are subject to extensive regulatory
requirements, particularly in relation to its manufacturing
operations and employment policies. Changes in laws and regulations
and their enforcement may adversely impact the Group's operations
in terms of costs, changes to business practices and restrictions
on activities which could damage the Group's reputation and
brand.
(c) Employees
The Group's success depends on its ability to continue to
attract, motivate and retain highly qualified employees. The highly
qualified employees required by the Group in various capacities are
sometimes in short supply in the labour market.
(d) Intellectual property
The Group's strategy of licensing technology depends upon
maintaining effective protection of its intellectual properties
worldwide. Protection is afforded by a combination of trademarks,
patents, secrecy, confidentiality agreements and the structuring of
legal contracts relating to key licensing, engineering and supply
arrangements. Unauthorised use of the Group's intellectual property
may adversely impact its ability to license the technology and lead
to additional expenditure to enforce legal rights. The wide
geographical spread of our products increases this risk due to the
increasingly varied and complex laws and regulations in which we
seek to protect the Group's intellectual property.
Key performance indicators
The Directors consider the following to be key performance
indicators by which progress in the development of the business may
be assessed:
-- Sales values of Accoya(R) wood and the geographic spread of these sales;
-- Break-even of the Arnhem plant;
-- Annual nameplate capacity of the Accoya(R) wood production
facility in Arnhem - see the Chief Executive's report for more
information;
-- The volume of Accoya(R) (in m(3) ) and Tricoya(R) (in metric
tonnes) of licensee production facilities either committed to by
third parties, or in use. There are currently no licensee
production facilities in use;
-- Process improvements to reduce progressively the direct cost
per m(3) to produce Accoya(R) wood, optimising the utilisation of
direct materials, utilities and capacity utilised in the wood
modification process.
Future developments
The Directors' priorities for the Group's future development
include:
-- Creating a worldwide user community - licensing our products
and building a global network to sell, support and provide
feedback;
-- Product excellence - perfecting our engineering process to
increase efficiencies, maximise product quality and demonstrate the
operating platform to future potential licensees;
-- Protecting our knowledge - developing and promoting the Accoya(R) Technology Centre;
-- Building the Accoya(R) and Tricoya(R) brands - marketing the
many superior benefits of Accoya(R) and Tricoya(R) internationally;
and
-- Being first and maintaining leadership - continual
development of new species testing and creation of new
products.
Directors
The Directors of the Company during the year and up to the date
of signing the financial statements were:
Paul Clegg
Hans Pauli
Gordon Campbell
The Rt. Hon. Lord Sanderson of Bowden, Kb, D.L. Retired
effective from 31 March 2013
Patrick Shanley
Montague John 'Nick' Meyer
William Rudge Appointed 1 October 2012
Directors' interests in the Ordinary shares of the Company
The Directors' interests in the Ordinary shares at the year-end
were as follows:
Legal holdings Beneficial interests
31 March 2013 31 March 2012 31 March 2013 31 March 2012
Gordon Campbell 173,333 173,333 - -
Paul Clegg(1) 407,810 690,910 1,833,500 436,563
Hans Pauli 446,043 400,590 684,523 22,727
Lord Sanderson(2) 50,761 15,761 35,000 -
Patrick Shanley 166,666 166,666 - -
Montague John 'Nick' Meyer 75,000 75,000 - -
William Rudge 169,686 132,197 200,000 36,363
1 Beneficial interests at 31 March 2013 and 31 March 2012
include 333,500 shares held directly or indirectly by other members
of Paul Clegg's immediate family.
2 Beneficial interests at 31 March 2013 include 35,000 shares
held directly by Lord Sanderson's wife.
Directors' indemnities
The Company maintains directors' and officers' liability
insurance which gives appropriate cover for legal action brought
against its Directors.
Charitable donations
Charitable donations of EURnil (2012: EURnil) were made during
the year.
Employment policies
The Group operates an equal opportunities policy from
recruitment and selection, through training and development,
appraisal and promotion to retirement. It is our policy to promote
an environment free from discrimination, harassment and
victimisation, where everyone will receive equal treatment
regardless of gender, colour, ethnic or national origin,
disability, age, marital status or sexual orientation. All
decisions relating to employment practises will be objective, free
from bias and based solely upon work criteria and individual
merit.
Health and safety
Group companies have a responsibility to ensure that all
reasonable precautions are taken to provide and maintain working
conditions for employees and visitors alike, which are safe,
healthy and in compliance with statutory requirements and
appropriate codes of practice.
The avoidance of occupational accidents and illnesses is given a
high priority. Detailed policies and procedures are in place to
minimise risks and ensure appropriate action is understood in the
event of an incident. A dedicated health and safety officer is
retained at the Group's manufacturing facility.
Creditor payment policy
The Group's policy, in relation to all of its suppliers, is to
negotiate terms of payment when agreeing the terms of transactions,
to ensure that those suppliers are made aware of the terms of
payment and to abide by those terms provided that it is satisfied
that the supplier has provided the goods or services in accordance
with the agreed terms and conditions. The Group does not follow any
universal code or standard on payment practice but subsidiary
companies are expected to establish and adhere to payment terms
consistent with local procedures, custom and practice. For the year
ended 31 March 2012, the average payment period for trade creditors
for the Group was 26 days (2012: 26 days) and for the Company was
90 days (2012: 90 days).
Significant shareholdings
So far as the Company is aware (further to formal notification),
the following shareholders held legal or beneficial interests in
ordinary shares of the Company exceeding 3% as at 31 March
2013:
-- Royal Bank of Canada 5.73%
-- OP-Pohjola Group Central Cooperative 5.55%
-- INEOS 5.43%
-- The London & Amsterdam Trust Company Limited 5.13%
-- FIL Limited (formerly known as Fidelity International Limited) 4.93%
-- Invesco Limited 4.87%
-- Saad Investments Company Limited 3.92%
-- Legal & General Group Plc (L&G) 3.88%
-- Zurab Lysov 3.71%
-- Ignis Investment Services Limited 3.15%
There are no restrictions in respect of voting rights.
Going concern
The Directors have formed a judgement, at the time of approving
the financial statements, that there is a reasonable expectation
that the Group has access to adequate resources to continue in
operational existence for the foreseeable future. Further details
are set out in Note 1 to these financial statements.
Disclosure of information to auditors
Each of the persons who is a Director at the date of the
approval of the Annual Report confirms that:
-- So far as the Director is aware, there is no relevant audit
information of which the Company's Auditors are unaware; and
-- The Director has taken all the steps that he ought to have
taken as a Director in order to make himself aware of any relevant
audit information and to establish that the Company's Auditors are
aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies Act
2006.
Independent Auditors
PricewaterhouseCoopers LLP have expressed their willingness to
continue in office as auditors and a resolution to re--appoint them
will be proposed at the annual general meeting.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
-- The Group financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRSs') as adopted by the European Union and Article 4 of the IAS
Regulation and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Group.
-- The annual report includes a fair review of the development
and performance of the business and the financial position of the
Group and the parent Company, together with a description of the
principal risks and uncertainties that they face.
By order of the Board
William Rudge
Director
24 June 2013
Corporate Governance
Details of the Company's corporate governance arrangements are
set out below. The Board of Directors acknowledges the importance
of the Principles set out in The UK Corporate Governance Code
issued by the Financial Reporting Council. Neither the 2010 or 2012
UK Corporate Governance Code are compulsory for AIM listed or
Euronext listed companies. The Board has applied the principles as
far as practicable and appropriate for a relatively small public
company.
The Board of Directors
During the period, the Board comprised a Non-executive Chairman,
three Non-executive Directors (with one retiring on 31 March 2013)
and two Executive Directors, with a third joining on 1 October
2012.
The Board meets regularly and is responsible for strategy,
performance, approval of major capital projects and the framework
of internal controls. To enable the Board to discharge its duties,
all Directors receive appropriate and timely information. Briefing
papers are distributed to all Directors in advance of Board
meetings. All Directors have access to the advice and services of
the Company Secretary. The appointment and removal of the Company
Secretary is a matter for the Board as a whole. In addition,
procedures are in place to enable the Directors to obtain
independent professional advice in the furtherance of their duties,
if necessary, at the Company's expense.
During the year, all serving Directors attended the quarterly
Board meetings that were held. In addition to the scheduled
meetings there is frequent contact between all the Directors in
connection with the Company's business including Audit and
Nomination and Remuneration committee meetings which are held as
required, but as a minimum twice per annum. Additional board
meetings were held during the year in connection with certain
specific matters such as the formation of Tricoya Technologies
Limited, the joint venture with INEOS.
Directors are subject to re-election by the shareholders at
Annual General Meetings. The Articles of Association provide that
Directors will be subject to re-election at the first opportunity
after their appointment and the Board submit to re-election at
intervals of three years.
Day to day operating decisions are made by the Senior Management
Team of which the Chief Executive Officer, the Chief Operating
Officer and Finance Director are members.
Audit Committee
The Audit Committee consists of Patrick Shanley (Chairman),
Gordon Campbell, Nick Meyer and, until 31 March 2013, Lord
Sanderson. The Audit Committee meets at least twice a year and is
responsible for monitoring compliance with accounting and legal
requirements and for reviewing the annual and interim financial
statements prior to their submission for approval by the Board. The
Committee also discusses the scope of the audit and its findings
and considers the appointment and fees of the external auditors.
The Audit Committee continues to believe that it is not currently
appropriate for the Company to maintain a dedicated internal audit
function due to its size.
The Audit Committee considers the independence and objectivity
of the external auditors on an annual basis, with particular regard
to non-audit services. The non-audit fees are considered by the
Board not to affect the independence or objectivity of the
auditors. The Audit Committee monitors such costs in the context of
the audit fee for the period, ensuring that the value of non-audit
service does not increase to a level where it could affect the
auditors' objectivity and independence. The Board also receives an
annual confirmation of independence from the auditors.
Nominations & Remuneration Committee
The Nominations and Remuneration Committee consists of Nick
Meyer (Chairman), Gordon Campbell, Patrick Shanley and, until 31
March 2013, Lord Sanderson. The Committee's role is to consider and
approve the nomination of Directors and the remuneration and
benefits of the Executive Directors, including the award of share
options and bonus share awards. In framing the Company's
remuneration policy, the Nominations & Remuneration Committee
has given full consideration to Section D of The UK Corporate
Governance Code.
Internal Financial Control
The Board is responsible for establishing and maintaining the
Company's system of internal financial control and places
importance on maintaining a strong control environment. The key
procedures which the Directors have established with a view to
providing effective internal financial control are as follows:
-- The Company's organisational structure has clear lines of responsibility;
-- The Company prepares a comprehensive annual budget that is
approved by the Board. Monthly results are reported against the
budget and variances are closely monitored by the Directors;
and
-- The Board is responsible for identifying the major business
risks faced by the Company and for determining the appropriate
courses of action to manage those risks.
The Directors recognise, however, that such a system of internal
financial control can only provide reasonable, not absolute,
assurance against material misstatement or loss.
Relations with shareholders
Communications with shareholders are given high priority.
There is regular dialogue with shareholders including
presentations after the Company's preliminary announcement of the
year-end results and six monthly results. The Board uses the Annual
General Meeting to communicate with investors and welcomes their
participation. The Chairman aims to ensure that the Directors are
available at Annual General Meetings to answer questions.
Directors' attendance record
The attendance of individual Directors at meetings of the Board
and its committees in the year under review was as follows:
Nominations
& Remuneration
Board Audit Committee Committee
Number of meetings Attended(3) Serving Attended Serving Attended Serving
Gordon Campbell 6 11 3 3 4 4
Paul Clegg 11 11 3 - 4 -
Hans Pauli 11 11 3 - 3 -
Lord Sanderson
(1) 3 11 3 3 3 4
Patrick Shanley 6 11 3 3 4 4
Montague John
'Nick' Meyer 7 11 3 3 4 4
William Rudge
(2) 5 5 1 - 1 -
Whilst all Directors are not members of the Board Committees
they attend by invitation.
Figures in the left hand column denote the number of meetings
attended and figures in the right hand column denote the number of
meetings held whilst the individual held office.
Notes
1 Lord Sanderson resigned as a Director with effect from 31 March 2013.
2 William Rudge was appointed as a Director on 1 October 2012.
3 A number of board committee meetings were held in the year in
addition to the scheduled board meetings in order to address
certain routine matters such as the issue of shares in respect of
the Employee Share Scheme.
Statement of Directors' responsibilities
Directors' responsibilities
The Directors are responsible for preparing the Annual Report,
the Remuneration Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union, and the parent company financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law).
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the company and of
the profit or loss of the Group for that period. In preparing these
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether IFRSs as adopted by the European Union and
applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the Group and
parent company financial statements respectively;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and the Group and enable them to
ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets
of the Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Consolidated statement of comprehensive income for the year
ended 31 March 2013
2013 2012
EUR'000 EUR'000
Note Total Total
Accoya(R) wood revenue 16,555 13,574
Licence revenue 553 75
Other revenue 1,714 1,353
-------------------------- ----- ----------------------- ----------
Total revenue 2 18,822 15,002
Total cost of sales (15,474) (15,050)
Gross profit/(loss) 3,348 (48)
Other operating costs 3 (13,548) (12,497)
Impairment of licensee
receivables 6 - (2,281)
Operating loss 7 (10,200) (14,826)
Share of joint venture
loss 8 (430) -
Finance income 9 206 154
Finance expense 10 (244) (240)
-
Loss before taxation (10,668) (14,912)
Tax (charge)/credit 11 (355) 536
Loss for the period (11,023) (14,376)
======================= ==========
Gain arising on translation
of foreign operations 14 35
Total comprehensive loss
for the year (11,009) (14,341)
======================= ==========
Basic and diluted loss
per ordinary share 13 EUR(0.03) EUR(0.04)
All results are derived from continuing operations.
The notes on pages 22 to 44 form part of these financial
statements.
Consolidated statement of financial position at 31 March
2013
Registered Company 05534340
Note 2013 2012
EUR'000 EUR'000
Non-current assets
Intangible assets 15 8,226 7,579
Investment in joint venture 62 -
Property, plant and equipment 16 22,271 25,614
Available for sale investments 17 - -
Deferred tax 18 866 1,522
31,425 34,715
---------- ----------
Current assets
Inventories 20 4,860 3,120
Trade and other receivables 21 3,688 3,576
Cash and cash equivalents 20,467 24,574
Corporation tax 623 1,117
29,638 32,387
---------- ----------
Current liabilities
Trade and other payables 22 (3,357) (3,385)
Obligation under finance lease 25 (264) (264)
(3,621) (3,649)
---------- ----------
Net current assets 26,017 28,738
Non-current liabilities
Obligation under finance lease 25 (1,924) (1,960)
(1,924) (1,960)
---------- ----------
Net assets 55,518 61,493
========== ==========
Equity and reserves
Share capital - Ordinary shares 23 4,332 4,040
Share premium account 128,588 124,887
Capital redemption reserve 148 148
Warrants reserve 235 82
Merger reserve 106,707 106,707
Accumulated loss (184,511) (174,415)
Own shares (39) -
Foreign currency translation reserve 58 44
Total equity 55,518 61,493
========== ==========
The financial statements were approved by the Board and
authorised for issue on 24 June 2013
Paul Clegg )
William Rudge ) Directors
The notes on pages 22 to 44 form part of these financial
statements.
Consolidated statement of changes in equity for the year ended
31 March 2013
Foreign
Capital currency
Share Share redemp- trans-
capital capital Share tion Warrant Merger Own lation Retained
Ordinary Deferred premium reserve reserve reserve Shares reserve earnings Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Balance at
31 March 2011 4,031 - 124,809 148 82 106,707 (25) 9 (160,387) 75,374
Total
comprehensive
income/(expense)
for the period - - - - - - 35 (14,376) (14,341)
Share based
payments - - - - - - - 348 348
Shares issued 9 - - - - 25 - - 34
Premium on shares
issued - 78 - - - - - - 78
Balance at
31 March 2012 4,040 - 124,887 148 82 106,707 - 44 (174,415) 61,493
========= ========= ======== ======== ======== ======== ======= ========= ========== =========
Total
comprehensive
income/(expense)
for the period - - - - - - 14 (11,023) (11,009)
Expiry of
warrants - 82 - (82) - - - - -
Share based
payments - - - - - - - 927 927
Shares issued 292 - - - - (39) - - 253
Premium on shares
issued - 3,619 - - - - - - 3,619
Share Warrants
issued - - - 235 - - - - 235
Balance at
31 March 2013 4,332 - 128,588 148 235 106,707 (39) 58 (184,511) 55,518
========= ========= ======== ======== ======== ======== ======= ========= ========== =========
Share capital is the amount subscribed for shares at nominal
value (note 23).
Share premium account represents the excess of the amount
subscribed for share capital over the nominal value of these
shares, net of share issue expenses. Share issue expenses comprise
the costs in respect of the issue by the Company of new shares.
Capital redemption reserve represents the amounts transferred
from share capital on redemption of deferred shares.
Merger reserve arose prior to transition to IFRS when merger
accounting was adopted.
Own shares represents 3,926,666 shares issued to an Employee
Benefit Trust at nominal value on 5 July 2012. These shares shall
vest if the employees, including the Executive Directors, remain in
employment with the Company to the vesting date, being 1 July 2013
(subject to certain other provisions including good-leaver,
take-over and committee discretion provisions). See note 14.
Shares issued in the year together with premium arose from the
subscription for 23,529,412 new ordinary shares in Accsys, at a
price of EUR0.17 per share by INEOS Industries Holdings Limited and
1,698,869 shares issued under the Employee Share Participation
Plan. See note 14. At the same time the Company executed a warrant
instrument in favour of INEOS, allowing INEOS the opportunity to
purchase up to a further 16,468,236 shares at a price of EUR0.21
per share at certain times during the course of the next four
years. The warrant reserve represents the value attributable to
these warrants. During the period, EUR82,000 attributable to
previously issued warrants was transferred to retained earnings as
the warrants expired.
Foreign currency translation reserve arises on the
re-translation of the Group's USA subsidiary's net assets which are
denominated in a different functional currency, being US
dollars.
Accumulated losses represent the cumulative loss of the Group
attributable to the owners of the parent.
The notes on pages 22 to 44 form part of these financial
statements.
Consolidated statement of cash flow for the year ended 31 March
2013
2013 2012
EUR'000 EUR'000
Loss before taxation (10,668) (14,912)
Adjustments for:
Amortisation of intangible assets 306 280
Depreciation of land, property, plant and equipment 1,950 1,877
Net gain on disposal of property, plant and equipment (113) -
Net finance expense 39 86
Impairment of receivables - 2,281
Equity-settled share-based payment expenses 927 348
Cash flows from operating activities before changes in working capital (7,559) (10,040)
Decrease in trade and other receivables (12) 3,734
Decrease in deferred income - (2,550)
(Increase)/decrease in inventories (1,739) 5,300
Increase/(decrease) in trade and other payables 372 (161)
Net cash used by operating activities before tax (8,938) (3,717)
Tax received 795 -
Net cash flows from operating activities (8,143) (3,717)
========= =========
Cash flows from investing activities
Interest received 206 154
Expenditure on capitalised internal development (861) (283)
Disposal of property, plant and equipment 1,699 -
Purchase of property, plant and equipment (293) (1,065)
Purchase of intangible assets (44) -
Investments in joint ventures (500) -
Net cash used by investing activities 207 (1,194)
========= =========
Cash flows from financing activities
Proceeds from sale and leaseback - 2,236
Interest paid (244) (173)
Finance expenses (36) (12)
Proceeds from issue of share capital 4,112 89
Share issue costs (15) (267)
Net cash from financing activities 3,817 1,873
========= =========
Net decrease in cash and cash equivalents (4,119) (3,038)
Effect of exchange rate changes on cash and cash equivalents 12 36
Opening cash and cash equivalents 24,574 27,576
Closing cash and cash equivalents 20,467 24,574
========= =========
The notes on pages 22 to 44 form part of these financial
statements.
Notes to the financial statements for the year ended 31 March
2013
1. Accounting Policies
General information
The financial information set out in these preliminary results
does not constitute the company's statutory accounts for the
periods ended 31 March 2013 or 31 March 2012. Statutory accounts
for the period ended 31 March 2012 have been filed with the
Registrar of Companies and those for the period ended 31March 2013
will be delivered to the Registrar in due course; both have been
reported on by the auditors. The auditors' report on the Annual
Report and Financial Statements for the period ended 31 March 2012
was unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
The auditors' report on the Annual Report and Financial
Statements for the period ended 31 March 2013 is unqualified, did
not draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
Basis of accounting
The Group's financial statements have been prepared under the
historical cost convention (except for certain financial
instruments and equity investments which are measured at fair
value), in accordance with International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards
Board as endorsed by the European Union and with those parts of the
Companies Act 2006 applicable to companies preparing their
financial statements under adopted IFRS. The Company has elected to
prepare its parent company financial statements in accordance with
UK Generally Accepted Accounting Practice (UK GAAP).
Going Concern
The financial statements are prepared on a going concern basis,
which assumes that the Group will continue in operational existence
for the foreseeable future, which is deemed to be at least 12
months from the date these financial statements are approved.
As part of the Group's going concern review, the Directors have
reviewed the Group's trading forecasts and working capital
requirements for the foreseeable future. These forecasts indicate
that, in order to continue as a going concern, the Group is
dependent on the achievement of certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem and the collection of on-going working
capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and
performance measures and believe that appropriate controls and
procedures are in place or will be in place to make sure that these
are met. The Directors believe that while some uncertainty
inherently remains in achieving the budget, in particular in
relation to market conditions outside of the Group's control, that
there are a sufficient number of alternative actions and measures
that can be taken in order to achieve the Group's medium and long
term objectives.
Therefore the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
Risks and uncertainties
The net assets as at 31 March 2013 of EUR56m contain balances in
relation to the Group's goodwill, capitalised internal development
costs and intellectual property rights of EUR8.2m. The
recoverability of these balances is dependent upon the Group's
existing licensees progressing with the completion of their
manufacturing facilities or the signing of other new licence
agreements. While the scope and timing of the production facilities
to be built by the Group's existing licensees remains uncertain,
the Directors remain confident that revenue from either existing
licensees or new licensees will be generated, demonstrating the
recoverability of these balances.
In addition, the carrying value of the EUR22.3m of property,
plant and equipment, which primarily relate to the Arnhem plant,
are dependent upon the future profitable sales of Accoya(R) wood
made there. The price of the Accoya(R) wood and the raw materials
and other inputs vary according to market conditions outside of our
control. Should the price of the raw materials increase greater
than the sales price or in a way which no longer makes as Accoya(R)
competitive, then the carrying value of the tangible fixed assets
may be in doubt and become impaired. The Directors are comfortable
that the current market and best estimates of future prices means
that this risk is limited.
Changes in accounting policies
The following new accounting standards, amendments and
interpretations issued by the IASB and the IFRIC are effective for
the year ended 31 March 2013 but have had no material effect on the
results or financial position of the Company disclosed within these
financial statements:
-- Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12)
Business combinations
Where the Company has the power, either directly or indirectly,
to govern the financial and operating policies of another entity or
business so as to obtain benefits from its activities, it is
classified as a subsidiary. The consolidated financial statements
present the results of the Group as if they formed a single entity.
Inter-company transactions and balances between Group companies are
therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the purchase method. In the
consolidated statement of financial position, the acquirer's
identifiable assets, liabilities, and contingent liabilities are
initially recognised at their fair values at the acquisition date.
The results of acquired operations are included in the consolidated
income statement from the date on which control is obtained.
As allowed under IFRS 1, some business combinations effected
prior to transition to IFRS, were accounted for using the merger
method of accounting. Under this method, assets and liabilities are
included in the consolidation at their book values, not fair
values, and any differences between the cost of investment and net
assets acquired were taken to the merger reserve. The majority of
the merger reserve arose from a corporate restructuring in the year
ended 31 March 2006 which introduced Accsys Technologies PLC as the
new holding company.
Joint ventures
A jointly controlled entity is an entity in which the Group
holds a long term interest and shares joint control over strategic,
financial and operating decisions with one or more other venturers
under a contractual arrangement. The Group's share of the assets,
liabilities, income, expenditure and cash flows of such jointly
controlled entities are accounted for using the equity method. The
equity method records the Group's share of the results of the joint
venture entity on a separate line in the Group's financial
statements.
The total carrying values of investments in joint ventures
represent the cost of each investment including the carrying value
of any goodwill, the share of post acquisition retained earnings,
any other movements in reserves and any long term debt interests
which in substance form part of the Group's net investment. The
carrying values of joint ventures are reviewed on a regular basis
and if an impairment in value has occurred, the carrying value is
impaired in the period in which the relevant circumstances are
identified. The Group's share of a joint venture's losses in excess
of its interest in that associate is not recognised unless the
Group has an obligation to fund such losses.
Unrealised gains arising from transactions with associates are
eliminated against the investment to the extent of the Group's
interest in the investee. Unrealised losses are eliminated in the
same way, but only to the extent that there is no evidence of
impairment.
Revenue recognition
Revenue is measured at the fair value of the consideration
receivable. Revenue is recognised to the extent that it is probable
that the economic benefit will flow to the Group and that the
revenue can be reliably measured. The following specific
recognition criteria must also be met before revenue is
recognised.
Manufacturing revenue
Revenue is recognised in respect of the sale of goods when the
significant risks and rewards of ownership of the goods have been
passed to the buyer, the timing of which is dependent on the
particular shipment terms. When a customer provides untreated wood
to be processed by the Group in order to produce Accoya(R) ,
revenue is recognised when the Group's obligations under the
relevant customer contract have been substantially completed, which
is before the finished Accoya(R) has been collected by the
customer. Manufacturing revenue includes the sale of Accoya(R) wood
and other revenue, principally relating to the sale of acetic
acid.
Licence fee income
Licence fee income is recognised over the period of the relevant
agreements according to the specific terms of each agreement or the
quantities and/or values of the licensed product sold. The
accounting policy for the recognition of licence fees is based upon
an assessment of the work required before the licence is signed and
subsequently during the design, construction and commissioning of
the licensees' plant, with an appropriate proportion of the fee
recognised upon signing and the balance recognised as the project
progresses to completion. The amount of any cash or billings
received but not recognised as income is included in the financial
statements as deferred income and shown as a liability.
Exceptional items
Exceptional items are events or transactions that fall outside
the ordinary activities of the Group and which by virtue of their
size or incidence, have been separately disclosed in order to
improve a reader's understanding of the financial statements. These
include items relating to the restructuring of a significant part
of the Group, impairment losses (or the reversal of previously
recorded exceptional impairments), expenditure relating to the
integration and implementation of significant acquisitions and
other one-off events or transactions.
Finance income
Interest accrues using the effective interest method, i.e. the
rate that discounts estimated future cash receipts through the
expected life of the financial instrument to the net carrying
amount of the financial asset.
Finance expense
Finance expenses include the fees associated with the Group's
credit facilities which are expensed over the period which the
Group has access to the facilities.
Finance expenses also include an allocation of finance charges
in respect of the sale and leaseback of the Arnhem land and
buildings accounted for as a finance lease. The total finance
charge (calculated as the difference between the total minimum
lease payments and the liability at the inception of the lease) is
allocated over the life of the lease using the sum-of-digits
method.
Share based payments
The Company awards share options to acquire shares of the
Company to certain Directors and employees. The Company also awards
bonuses to certain Directors and employees in the form of the award
of deferred shares of the Company.
In addition the Company has established an Employee Share
Participation Plan under which employees subscribe for new shares
which are held by a trust for the benefit of the subscribing
employees. The Shares are released to employees after one year,
together with an additional, matching share on a 1 for 1 basis.
The fair value of options, deferred shares and matching shares
granted are recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and is
charged to the statement of comprehensive income over the vesting
period during which the employees become unconditionally entitled
to the options or shares.
The fair value of share options granted is measured using a
modified Black Scholes model, taking into account the terms and
conditions upon which the options were granted. The amount
recognised as an expense is adjusted to reflect the actual number
of share options that vest only where vesting is dependent upon the
satisfaction of service and non-market vesting conditions.
Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
balance sheet date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options which eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Dividends
Equity dividends are recognised when they become legally
payable. Interim equity dividends are recognised when paid. Final
equity dividends are recognised when approved by the shareholders
at an annual general meeting.
Pensions
The Group contributes to certain defined contribution pension
and employee benefit schemes on behalf of its employees. These
costs are charged to the statement of comprehensive income on an
accruals basis.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the statement of comprehensive
income except to the extent that it relates to items 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 together with any adjustment to tax payable
in respect of previous years. Current tax includes the expected
impact of claims submitted by the Group to tax authorities in
respect of enhanced tax relief for expenditure on research and
development.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for:
-- the initial recognition of goodwill,
-- the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business
combination, and
-- differences relating to investments in subsidiaries to the
extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively
enacted at the balance sheet date. Recognition of deferred tax
assets is restricted to the extent that it is probable that future
taxable profit will be available against which the temporary
differences can be utilised.
Foreign currencies
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (the functional currency). For the purposes of
the consolidated financial statements, the results and financial
position of each Group company are expressed in Euro, which is the
functional currency of the parent Company, and the presentation
currency of the consolidated financial statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currencies are recognised at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet
date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise.
For the purposes of presenting consolidated financial
statements, the assets and liabilities of the Group's foreign
operations are translated at exchange rates prevailing on the
balance sheet date. Income and expense items are translated at the
average monthly exchange rates prevailing in the month in which the
transaction took place. Exchange differences arising, if any, are
recognised in other comprehensive income and the foreign currency
translation reserve.
Government grants
Government grants are recognised at their fair value where there
is reasonable assurance that the grant will be received and the
Group will comply with the attached conditions. When the grant
relates to an expense item, it is recognised as income over the
period necessary to match the grant on a systematic basis to the
costs that it is intended to compensate. Where the grant relates to
an asset they are credited to a deferred income account and
released to the statement of comprehensive income over the expected
useful life of the relevant asset on a straight line basis.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking
is the difference between the fair value of the consideration paid
and the fair value of the identifiable assets and liabilities
acquired. It is capitalised, and is subject to annual impairment
reviews by the Directors. Any impairment arising is charged to the
statement of comprehensive income.
Other intangible assets
Intellectual property rights, including patents, which cover a
portfolio of novel processes and products, are shown in the
financial statements at cost less accumulated amortisation and any
amounts by which the carrying value is assessed during an annual
review to have been impaired. At present, the useful economic life
of the intellectual property is considered to be 20 years.
Internal development costs are incurred as part of the Group's
activities including new processes, process improvements,
identifying new species and improving the Group's existing
products. Research costs are expensed as incurred. Development
costs are capitalised when all of the criteria set out in IAS 38
'Intangible Assets' (including criteria concerning technical
feasibility, ability and intention to use or sell, ability to
generate future economic benefits, ability to complete the
development and ability to reliably measure the expenditure) have
been met. These internal development costs are amortised on a
straight line basis over their useful economic life, between 10 and
20 years.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any impairment charged. Depreciation
is provided at rates calculated to write off the cost less
estimated residual value of each asset, except freehold land, over
its expected useful life on a straight line basis, as follows:
Plant and machinery These assets comprise pilot plants and
production facilities. These facilities are depreciated from the
date they become available for use at rates applicable to the asset
lives expected for each class of asset, with rates between 5% and
20%.
Office equipment Between 20% and 50%.
Leased land Land held under a finance lease is depreciated over
the life of the lease.
Freehold land Freehold land is not depreciated.
Impairment of non-financial assets
The carrying amount of the non-current non-financial assets of
the Group is compared to the recoverable amount of the assets
whenever events or changes in circumstances indicate that the net
book value may not be recoverable, or in the case of goodwill,
annually. The recoverable amount is the higher of value in use and
the fair value less cost to sell. In assessing the value in use,
the expected future cash flows from the assets are determined by
applying a discount rate to the anticipated pre-tax future cash
flows. An impairment charge is recognised in the statement of
comprehensive income to the extent that the carrying amount exceeds
the assets' recoverable amount. The revised carrying amounts are
amortised or depreciated in line with Group accounting policies. A
previously recognised impairment loss, other than on goodwill, is
reversed if the recoverable amount increases as a result of a
reversal of the conditions that originally resulted in the
impairment. This reversal is recognised in the statement of
comprehensive income and is limited to the carrying amount that
would have been determined, net of depreciation, had no impairment
loss been recognised in prior years. Assets are grouped at the
lowest levels for which there are separately identifiable cash
flows (cash generating units) for purposes of assessing
impairment.
Leases
Operating lease payments are recognised as an expense in the
statement of comprehensive income on a straight-line basis over the
lease term.
Assets held under finance leases are recognised as assets of the
Group at their fair value or, if lower, at the present value of the
minimum lease payments, each determined at the inception of the
lease. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation. Lease payments are
apportioned between finance expenses and reduction of lease
obligation so as to achieve a constant rate of interest on the
remaining balance of the liability.
Inventories
Raw materials, which consist of unprocessed timber and chemicals
used in manufacturing operations are valued at the lower of cost
and net realisable value. The basis on which cost is derived is a
first-in, first-out basis.
Finished goods, comprising processed timber, are stated at the
lower of weighted average cost of production or net realisable
value. Costs include direct materials, direct labour costs and
production overheads (including the depreciation/depletion of
relevant property and plant and equipment) absorbed at an
appropriate level of capacity utilisation. Net realisable value
represents the estimated selling price less all expected costs to
completion and costs to be incurred in selling and
distribution.
Financial assets
Financial assets are classified as cash and cash equivalents,
available for sale investments and loans and receivables, depending
on the purpose for which the asset was acquired. When financial
assets are recognised initially, they are measured at fair value
plus, in the case of investments not at fair value through profit
or loss, directly attributable transaction costs.
Except where a reliable fair value cannot be obtained, unlisted
shares held by the Group are classified as available for sale
investments and are stated at fair value. Gains and losses arising
from changes in fair value are recognised directly in equity, with
the exception of impairment losses which are recognised directly in
profit or loss. Where an investment is disposed of or is determined
to be impaired, the cumulative gain or loss previously recognised
in the profit or loss in the year. Where it is not possible to
obtain a reliable fair value, these investments are held at cost
less provision for impairment.
Loans and receivables, which comprise non-derivative financial
assets with fixed and determinable payments that are not quoted on
an active market are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment.
Trade and other receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. They
arise principally from the provision of goods and services to
customers. Trade receivables are initially recognised at fair value
less an allowance for any uncollectible amounts. A provision for
impairment is made when there is objective evidence that the Group
will not be able to collect debts. Bad debts are written off when
identified.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprise cash at bank and in hand and short-term deposits,
including liquidity funds, with an original maturity of three
months or less. For the purpose of the statement of consolidated
cash flow, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank
overdrafts.
Financial liabilities
Other financial liabilities
Trade payables are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method.
Share capital
Financial instruments issued by the Group are treated as equity
only to the extent that they do not meet the definition of a
financial liability. The Group's shares are classified as equity
instruments.
Accounting estimates and judgements
In preparing the Consolidated Financial Statements, management
has to make judgments on how to apply the Group's accounting
policies and make estimates about the future. The critical
judgments that have been made in arriving at the amounts recognised
in the Consolidated Financial Statements and the key sources of
estimation and uncertainty that have a significant risk of causing
a material adjustment to the carrying value of assets and
liabilities in the next financial year are discussed below:
Revenue recognition
The Group has considered the criteria for the recognition of
licence fee income over the period of the agreement and is
satisfied that the recognition of such revenue is appropriate. The
recognition of licence fees is based upon an assessment of the work
required before the licence is signed and subsequently during the
construction and commissioning of the licensees' plant, with an
appropriate proportion of the fee recognised upon signing and the
balance recognised as the project progresses to completion. The
Group also considers the recoverability of amounts before
recognising them as income.
Goodwill
The Group tests annually whether goodwill has suffered any
impairment in accordance with the accounting policy stated above.
The recoverable amounts of cash-generating units have been
determined based on value in use calculations. These calculations
require the use of judgments in relation to discount rates and
future forecasts.
Intellectual property rights and property, plant and
equipment
The Group tests the carrying amount of the intellectual property
rights and property, plant and equipment whenever events or changes
in circumstances indicate that the net book value may not be
recoverable. These calculations require the use of estimates in
respect of future cash-flows from the assets by applying a discount
rate to the anticipated pre-tax future cash-flows. The Group also
reviews the estimated useful lives at the end of each annual
reporting period.
Inventories
The Group reviews the net realisable value of, and demand for,
its inventory on a monthly basis to provide assurance that recorded
inventory is stated at the lower of cost and net realisable
value.
Available for sale investments
The Group has an investment in unlisted equity shares carried at
nil value. The investment is valued at cost less any impairment as
a reliable fair value cannot be obtained since there is no active
market for the shares and there is currently uncertainty around the
future funding of the business. The Group makes appropriate
enquiries and considers all of the information available to it in
order to assess whether any impairment has occurred.
New standards and interpretations in issue but not yet effective
at the date of authorisation of these financial statements:
-- IFRS 9 - 'Financial Instruments: Classification and Measurement'
-- IFRS 10 - 'Consolidated Financial Statements'
-- IFRS 11 - 'Joint Arrangements'
-- IFRS 12 - 'Disclosure of Interests in Other Entities'
-- IFRS 13 - 'Fair Value Measurement'
-- IAS 27 (May 2011) - 'Separate Financial Statements'
-- IAS 28 (May 2011) - 'Investments in Associates and Joint Ventures'
-- Amendments to IFRS 1 (various dates) - First Time Adoption
-- Amendments to IFRS 7 (December 2011) - Offsetting of assets and liabilities
-- Amendments to IFRS 10, 11 and 12 (June 2012) - Transition guidance
-- Amendments to IAS 1 (June 2011) - Presentation of items of Other Comprehensive Income
-- Amendments to IAS 12 (December 2010) - Deferred tax: recovery of underlying assets
-- Amendments to IAS 19 (June 2011) - Employee Benefits
-- Amendments to IAS 32 (May 2012) - Financial Instruments: Presentation
-- Amendments to IFRS 10, 12 and IAS 27 (October 2012) - Amendments for Investment entities
Entities in EU Member States can only apply IFRS or IFRIC that
have been endorsed by the European Union. Of the standards and
interpretations listed above IFRS 9 and the Amendments to IAS 27
and IFRS 10, 11 and 12 had not yet been endorsed by the European
Union at the date these financial statements were authorised for
issue. The Directors anticipate that the adoption of these
standards and interpretations in future periods will have no
material impact on the financial statements of the Group. Other
standards and interpretations that have been issued but which are
not yet effective are not expected to have any impact on the
Group.
2. Segmental reporting
The Group's business is the development, commercialisation and
licensing of proprietary technology for the manufacture of
Accoya(R) wood, Tricoya(R) wood elements and related acetylation
technologies. Segmental reporting is divided between licensing
activities, the manufacturing and sale of Accoya(R) and research
and development activities.
Licensing, Management
Result by Segment: & Business Development
2013 2012
EUR'000 EUR'000
Revenue 553 75
Cost of sales - -
Gross profit/(loss) 553 75
Other operating
costs (6,780) (5,834)
Impairment of licensee
receivables - (2,281)
Loss from operations (6,227) (8,040)
Loss from Operations (6,227) (8,040)
Depreciation and
amortsation 347 330
EBITDA (5,880) (7,710)
------------------------ -------------- ----------
Manufacturing
Revenue 18,269 14,927
Cost of sales (15,474) (15,050)
Gross profit/(loss) 2,795 (123)
Other operating
costs (5,528) (5,247)
Loss from operations (2,733) (5,370)
Loss from Operations (2,733) (5,370)
Depreciation and
amortsation 1,833 1,754
EBITDA (900) (3,616)
------------------------ -------------- ----------
Research and
Development
Revenue - -
Cost of sales - -
Gross profit/(loss) - -
Other operating
costs (1,240) (1,416)
Loss from operations (1,240) (1,416)
Loss from Operations (1,240) (1,416)
Depreciation and
amortsation 76 74
EBITDA (1,164) (1,342)
------------------------ -------------- ----------
Total
Revenue 18,822 15,002
Cost of sales (15,474) (15,050)
Gross profit/(loss) 3,348 (48)
Other operating
costs (13,548) (12,497)
Impairment of licensee
receivables - (2,281)
Loss from operations (10,200) (14,826)
Share of joint venture
loss (430) -
Finance income 206 154
Finance expense (244) (240)
Loss before taxation (10,668) (14,912)
Loss from Operations (10,200) (14,826)
Depreciation and
amortsation 2,256 2,158
EBITDA (7,944) (12,668)
------------------------ -------------- ----------
Licensing, Management & Business Development
Revenue is attributable to fees in relation to the licensing of
the Group's technology to third parties.
Other operating costs include all remaining costs unless they
are directly attributable to Manufacturing or Research and
Development. This includes marketing, business development,
management and the majority of the Group's administration costs
including the head office in Windsor as well as Dallas.
Headcount = 21 (2012: 20)
Manufacturing
Revenue includes the sale of Accoya(R) and other revenue,
principally relating to the sale of acetic acid.
All costs of sales are allocated against manufacturing
activities in Arnhem unless they can be directly attributable to a
licensee.
Other operating costs include depreciation of the Arnhem
property, plant and equipment together will all other costs
associated with the operation of the Arnhem manufacturing site,
including directly attributable administration costs.
Headcount = 62 (2012: 62)
Research and Development
Costs are associated with various R&D activities associated
with Accoya(R) and Tricoya(R) products and processes. The costs are
reported excluding EUR861,000 of costs which have been capitalised
in accordance with international financial reporting standards.
(2012: EUR283,000).
Headcount = 13 (2012: 14)
Assets and liabilities cannot be readily allocated to the three
segments and therefore no additional segmental information has been
disclosed.
Analysis of Revenue by geographical area of customers: 2013 2012
EUR'000 EUR'000
Netherlands 6,182 5,264
United Kingdom 3,532 2,123
Switzerland 1,597 735
Germany 1,507 1,011
North America 1,458 1,006
Norway 764 307
Belgium 660 367
China 543 784
India 459 231
Ireland 451 2,442
Australia 419 129
New Zealand 333 49
Italy 228 147
France 201 121
Other 488 286
18,822 15,002
======== ========
Analysis of non-current assets (Other than financial assets and deferred tax): 2013 2012
EUR'000 EUR'000
UK 4,133 3,455
Other countries 22,195 25,506
Un-allocated - Goodwill 4,231 4,231
30,559 33,192
======== ========
Revenue generated from no single customer exceeded 10% of Group
revenue in 2013. Revenue generated from one customer exceeded 10%
of Group revenue in 2012, represented by 92% of the revenue from
Ireland and relates to manufacturing revenue.
The segmental assets in the current year and the previous year
were predominantly held in Europe. Additions to property, plant,
equipment and intangible assets in the current year and the
previous year were predominantly incurred in Europe.
3. Other operating costs
Other operating costs consist of the operating costs, other than
the cost of sales, associated with the operation of the plant in
Arnhem and the offices in Dallas and Windsor:
2013 2012
EUR'000 EUR'000
Sales and marketing 2,908 2,264
Research and development 1,240 1,416
Depreciation and amortisation 2,256 2,159
Other operating costs 2,104 2,307
Administration costs 5,040 4,351
13,548 12,497
======== ========
During the period, EUR953,000 (2012: EUR283,000) of development
costs were capitalised and included in intangible fixed assets.
This includes EUR456,000 in respect of the Accoya(R) licence
Process Design Package.
Administration costs include the costs associated with the
Group's head office in Windsor the office in Dallas together with
business development and management costs.
4. Employees
2013 2012
EUR'000 EUR'000
Staff costs (including Directors) consist of:
Wages and salaries 6,160 5,792
Social security costs 756 744
Other pension costs 422 (22)
Share based payments 927 348
8,265 6,862
======== ========
The average monthly number of employees, including Executive Directors, during
the year was as follows: Number Number
Administration, research and engineering 66 66
Operating 30 30
96 96
======== ========
Other Pension costs in 2012 included a reversal of provision for
prior period pension costs of EUR324,000. This provision related to
potential changes to the pension scheme which were finalised during
the prior period.
5. Directors' remuneration
2013 2012
EUR'000 EUR'000
Directors' remuneration consists of:
Directors' emoluments 829 800
Company contributions to money purchase pension schemes 44 40
873 840
================== ========
Compensation of key management personnel included the following
amounts:
2013 2012
Pension
Total Total
Salary, bonus and short term benefits Share based payments charge
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Paul Clegg 360 29 372 761 659
Hans Pauli 219 12 134 365 354
William Rudge(1) 67 3 23 93 -
646 44 529 1,219 1,013
====================================== ======== ============================ ======== ========
1 - William Rudge was appointed as Finance Director on the 1
October 2012.
The Group made contributions to 3 (2012: 2) Directors' personal
pension plans.
6. Exceptional items - Impairment of Assets
The 2012 net impairment included EUR2.9m attributable to Al
Rajhi, representing a non-cash impairment of licensee net
receivables (consisting of EUR5.4m prepaid commission costs net of
EUR2.55m deferred income) recorded in previous years. The
impairment continues to be recorded due to uncertainty as to
whether the licence will proceed.
Summary of impairment/(release of impairment) charges relating
to licensee related balances:
2013 2012
EUR'000 EUR'000
Trade Receivables and accrued income - (571)
Release of deferred income - (2,550)
Prepayments - Licensing commission - 5,402
- 2,281
-------- --------
7. Operating loss
2013 2012
EUR'000 EUR'000
This has been arrived at after charging:
Staff costs 8,265 6,862
Depreciation of property, plant and equipment 1,950 1,877
Amortisation of intangible assets 306 280
Operating lease rentals 165 165
Fees payable to the Company's auditors for the audit of the Company's annual
accounts 62 61
Fees payable to the Company's auditors for other services:
- audit of the Company's subsidiaries pursuant to legislation 79 81
- audit related assurance services 25 24
- tax advisory services 57 46
- all other services 5 -
Foreign exchange (gains)/losses 65 105
Research & Development (excluding staff costs) 636 552
Loss on sale of property, plant and equipment 13 -
8. Share of joint venture losses
On 5 October 2012, Accsys entered into a new 50:50 joint venture
with INEOS to exploit Accsys' intellectual property surrounding its
proprietary Tricoya(R) wood elements acetylation technology and
processes, which is now expected to lead to the accelerated global
deployment of Tricoya. The new company, Tricoya Technologies
Limited ('TTL'), will develop and exploit Accsys' Tricoya
technology for use within MDF, particle board and wood plastic
composites in a worldwide panel products market estimated to be
worth more than EUR60 billion annually.
As part of the transaction, TTL has been granted rights to
exploit Accsys' Tricoya(R) technology and will also benefit from a
licence of any intellectual property held by INEOS that may assist
the joint venture in maximising the value of the Tricoya(R)
proposition. Profits generated by TTL are to be shared between
Accsys and INEOS in a way that reflects each party's interest. The
contribution of Accsys' Tricoya(R) intellectual property to the
Joint Venture will be reflected through a disproportionate future
profit share which will create significant value for Accsys.
This future profit share reflects that Accsys had made a
significant investment in Tricoya over a number of years prior to
the formation of the joint venture. This included research and
development expenditure concerning the Tricoya process and product
design, the joint development agreement with Medite and the
resulting product launch of Medite Tricoya Extreme Durable MDF in
2011 together with significant investment in building the Tricoya
brand and market.
TTL has been accounted in the Accsys Group accounts using the
equity method. The TTL results for the period from 5 October 2012
to 31 March 2013, together with the balance sheet as at 31 March
2013 are set out below:
Costs associated with TTL joint venture:
2013 2012
EUR'000 EUR'000
Revenue - -
Costs:
Staff costs 590 -
Research & development (excluding staff costs) 163 -
Intellectual Property 76 -
Sales & marketing 31 -
Joint venture loss 860 -
======== ========
Group share of joint venture loss 430 -
======== ========
Tricoya Technologies Limited statement of financial position at
31 March 2013:
2013 2012
EUR'000 EUR'000
Non-current assets
Intangible assets 93 -
Current assets
Receivables due within one year 89 -
Cash and cash equivalents 324 -
413 -
-------- --------
Current liabilities
Trade and other payables (366) -
Net current assets 47 -
Net assets 140 -
======== ========
50% attributable to Accsys Technologies 70 -
Less elimination of mark-up on recharged costs (8) -
======== ========
9. Finance income
2013 2012
EUR'000 EUR'000
Interest receivable on bank and other deposits 206 154
10. Finance expense
2013 2012
EUR'000 EUR'000
Arnhem land sale and leaseback finance charge 244 173
Equity line of credit costs - 67
244 240
======== ========
11. Tax expense
2013 2012
EUR'000 EUR'000
(a) Tax recognised in the statement of comprehensive income comprises:
Current tax expense
UK Corporation tax on profits for the year - -
Research and development tax credit in respect of prior years (26) (791)
Research and development tax credit in respect of current year (286) (321)
(312) (1,112)
Overseas tax at rate of 15% 11 3
Overseas tax at rate of 25% - -
Deferred Tax
Under/(over) provision in respect of prior years - (22)
Utilisation of deferred tax asset 656 595
Total tax charge/(credit) reported in the statement of comprehensive income 355 (536)
================== =========
2013 2012
EUR'000 EUR'000
(b) The tax credit for the period is lower than the standard rate of
corporation tax in the UK (2012: 26%, 2011: 28%) due to:
Loss profit before tax (10,668) (14,912)
Expected tax credit at 24% (2012 - 26%) (2,560) (3,877)
Expenses not deductible in determining taxable profit 295 168
Over provision in respect of prior years (7) -
Losses transferred to deferred tax asset but not recognised 2,293 2,200
Effects of overseas taxation 21 (25)
Other temporary differences 1 (114)
Research and development tax credit in respect of prior years 26 791
Research and development tax credit in respect of current year 286 321
Total tax charge/(credit) reported in the statement of comprehensive income 355 (536)
================== =========
12. Dividends Paid
2013 2012
EUR'000 EUR'000
Final Dividend EURNil (2012: EURNil) per Ordinary share proposed
and paid during year relating to the previous year's results - -
13. Loss per share
The calculation of loss per ordinary share is based on loss
after tax and the weighted average number of ordinary shares in
issue during the year.
Basic and diluted earnings per share 2013 2012
Weighted average number of Ordinary shares in issue ('000) 419,650 403,657
Loss for the year (EUR'000) (11,023) (14,376)
Basic and diluted loss per share EUR(0.03) EUR(0.04)
========== ==========
Basic and diluted losses per share are based upon the same
figures. There are no dilutive share options as these would
increase the loss per share.
14. Share based payments
Share Options
The following share options impacted the current or preceding
financial year;
Options granted on 1 March 2005 fully vested during 2011. These
options may be exercised until 30 March 2015. At 31 March 2013,
269,265 of these options were outstanding with an exercise price of
EUR0.32.
Options granted on 28 March 2007 at an exercise price of EUR2.59
per Ordinary share vest to one third of the options granted upon
achievement of each of the following:
-- Cumulative EUR5 million licence income recognised under Group accounting policies
-- Cumulative EUR20 million revenue from sales of Accoya(R) wood
-- Announcement of annual Group distributable earnings exceeding EUR5 million
Once vested, these options may be exercised until 31 March 2017.
At 31 March 2013, 2,343,034 of these options were outstanding at an
exercise price of EUR1.83.
Options granted on 11 October 2007 vest to one third of the
options granted upon achievement of each of the following:
-- Cumulative EUR15 million revenue from sales of Accoya(R) wood
-- Announcement of annual Group distributable earnings exceeding EUR15 million
-- Cumulative EUR75 million gross licence revenue recognised
under Group accounting policies
Once vested these options may be exercised until 11 October
2017. At 31 March 2013, none of these options were outstanding.
Options granted on 20 November 2007 vest to one third of the
options granted upon achievement of each of the following:
-- Annual Accoya(R) wood production exceeds 23,000m(3) in a financial year
-- Annual Accoya(R) wood sales revenue exceeds EUR26 million in financial year
-- The second pair of reactors in the wood modification plant
are processing more than 25 batches per month
Once vested these options may be exercised until 20 November
2017. At 31 March 2013, 298,900 of these options were outstanding
at an exercise price of EUR2.58.
Options granted on 18 June 2008 vest to one third of the options
granted upon achievement of each of the following:
-- Announcement of audited Annual Accoya(R) wood sales revenue
exceeds EUR20 million in financial year
-- Announcement of audited annual Group distributable earnings exceeding EUR15 million
-- Announcement of audited cumulative EUR75 million gross
licence revenue recognised under Group accounting policies
Once vested these options may be exercised until 18 June 2018.
At 31 March 2013, 99,161 of these options were outstanding at an
exercise price of EUR1.98.
Options granted on 8 December 2008 vest to one third of the
options granted upon achievement of each of the following:
-- Announcement of audited Annual Accoya(R) wood sales revenue
exceeds EUR20 million in financial year
-- Announcement of audited annual Group distributable earnings exceeding EUR15 million
-- Announcement of audited Cumulative EUR75 million gross
licence revenue recognised under Group accounting policies
Once vested these options may be exercised until 8 December
2018. At 31 March 2013, 213,905 of these options were outstanding
at an exercise price of EUR0.97.
Options granted on 19 November 2009 vest to 30% of the options
granted upon achievement of median Total Shareholder Return
('TSR'). Full vesting of the options granted occurs upon
achievement of upper quartile TSR measured over the three year
period. Once vested, these options may be exercised until 19
November 2019. At 31 March 2013, 2,557,424 of these options were
outstanding at an exercise price of EUR0.35.
Options granted on 1 April 2010 vest to 30% of the options
granted upon achievement of median TSR. Full vesting of the options
granted occurs upon achievement of upper quartile TSR measured over
the three year period. Once vested, these options may be exercised
until 1 April 2020. At 31 March 2013, 1,017,354 of these options
were outstanding at an exercise price of EUR0.32.
Options granted on 27 July 2010 vest to 30% of the options
granted on achievement of median TSR. Full vesting of the options
granted occurs upon achievement of upper quartile TSR measured over
the three year period. Once vested, these options may be exercised
until 27 July 2020. At 31 March 2013, 6,075,005 of these options
were outstanding at an exercise price of EUR0.24.
Options granted on 1 April 2011 vest to 30% of the options
granted upon achievement of median TSR. Full vesting of the options
granted occurs upon achievement of upper quartile TSR measured over
the three year period. Once vested, these options may be exercised
until 1 April 2021. At 31 March 2013, 718,173 of these options were
outstanding at an exercise price of EUR0.17.
Options granted on 1 August 2011 at an exercise price of EUR0.10
per Ordinary share vest to 30% of the options granted on
achievement of median TSR. Full vesting of the options granted
occurs upon achievement of upper quartile TSR measured over the
three year period. Once vested, these options may be exercised
until 1 August 2021. At 31 March 2013, 7,437,982 of these options
were outstanding at an exercise price of EUR0.10.
Options granted on 2 August 2012 vest to 30% of the options
granted on achievement of median TSR. Full vesting of the options
granted occurs upon achievement of upper quartile TSR measured over
the three year period. Once vested, these options may be exercised
until 2 August 2022. At 31 March 2013, 4,418,173 of these options
were outstanding at an exercise price of EUR0.15.
TSR is measured on a relative basis compared to the FTSE Small
Cap index over a three year period from grant date. Unless
discretion is exercised by the Nomination & Remuneration
Committee, all options are forfeit following an option holder's
termination of contract.
Outstanding options granted under the share option scheme are as
follows:
Number of outstanding Weighted average remaining
options at 31 March contractual life, in years
Date of grant 2013 2012 2013 2012
1 March 2005 269,265 269,265 1.9 2.9
28 March 2007 2,343,034 2,343,034 4 5
20 November 2007 298,900 298,900 4.6 5.6
18 June 2008 99,161 99,161 5.3 6.3
8 December 2008 213,905 228,070 5.7 6.7
19 November 2009 2,557,424 2,557,424 6.6 7.6
1 April 2010 1,017,354 1,017,354 7 8
27 July 2010 6,075,005 6,188,332 7.3 8.3
1 April 2011 718,173 718,173 8 9
1 August 2011 7,437,982 7,537,982 8.3 9.3
2 August 2012 4,418,173 - 9.3 -
Movements in the weighted average values are as follows:
Weighted
average
exercise
price Number
Outstanding at 31 March 2011 EUR0.96 20,374,097
========= ============
Granted during the year EUR0.11 8,331,155
Forfeited during the year EUR1.52 (7,447,558)
Outstanding at 31 March 2012 EUR0.43 21,257,694
========= ============
Granted during the year EUR0.15 4,418,173
Forfeited during the year EUR0.22 (227,493)
Outstanding at 31 March 2013 EUR0.38 25,448,374
========= ============
The exercise price of options outstanding at the end of the year
ranged between EUR0.10 and EUR2.58 (2012: EUR0.10 and EUR2.58) and
their weighted average contractual life was 7.5 years (2012: 8.1
years).
Of the total number of options outstanding at the year-end,
1,831,287 (2012: 1,831,287) had vested and were exercisable at the
end of the year. No options were exercised in the current or
previous year.
The weighted average fair value of each option granted during
the year was EUR0.06 (2012: EUR0.05).
The fair value of Executive share options granted during the
current and previous years is calculated based on a modified
Black-Scholes model assuming inputs shown below:
Grant date August 2012 August 2011 April 2011 July 2010 April 2010
Share price at
grant date (EUR) 0.15 0.10 0.17 0.34 0.46
Exercise price
(EUR) 0.15 0.10 0.17 0.34 0.46
Expected life
(years) 3 3 3 3 3
Contractual life
(years) 10 10 10 10 10
Risk free rate 1.83% 1.54% 2.25% 2.30% 2.00%
Expected volatility 85% 85% 85% 60% 60%
Expected dividend
yield 0% 0% 0% 0.0% 0.0%
Fair value of
option EUR0.060 EUR0.040 EUR0.070 EUR0.106 EUR0.143
Volatility has been estimated by reference to the historic
volatility since October 2005 when the Company's shares were listed
on AIM. The resulting fair value is expensed over the vesting
period of the options on the assumption that a proportion of
options will lapse over the service period as employees leave the
Group. The anti-dilutive adjustment in the previous year, described
above, did not result in any change in the total fair value of the
share based payments, with the reduction in the fair value in the
individual being offset by the increase in the number of
outstanding options.
Employee Benefit Trust - Share bonus award
On 5 July 2012, in connection with employee remuneration and
incentivisation arrangements for the period from 1 July 2012 to 30
June 2013, 3,926,666 new Ordinary shares were issued to an Employee
Benefit Trust, the beneficiaries of which are primarily the
Executive Directors and Senior Managers. Such new Ordinary Shares
vest if the employees remain in employment with the Company at the
vesting date, being 1 July 2013 (subject to certain other
provisions including good-leaver, take-over and nomination and
remuneration committee discretion provisions).
As at 31 March 2013, the Employment Benefit Trust was
consolidated by the Company and the 3,926,666 shares are recorded
as Own Shares within equity.
Employee Share Participation Plan
During the year, the Company continued to operate the Employee
Share Participation Plan (the 'Plan') that was initiated in the
prior year. The Plan is intended to promote the long term growth
and profitability of Accsys by providing employees with an
opportunity to acquire an ownership interest in new ordinary shares
('Shares') in the Company as an additional benefit of
employment.
Under the terms of the Plan, the Company issues these Shares to
a trust for the benefit of the subscribing employees. The Shares
are released to employees after one year, together with an
additional Share on a 1 for 1 matched basis provided the employee
has remained in the employment of Accsys at that point in time
(subject to good leaver provisions). The Plan is in line with
industry approved employee share plans and is open for subscription
by employees twice a year following release of annual and half
yearly financial results. The maximum amount available for
subscription by any employee is EUR5,000 per annum.
During the year ended 31 March 2013 the plan was open for
subscription twice. In July 2012 various employees subscribed for a
total of 415,332 Shares at an acquisition price of EUR0.15 per
Share. In December 2012 various employees subscribed for a total of
369,423 Shares at an acquisition price of EUR0.14 per Share.
During the year ended 31 March 2013, 1 for 1 matching shares
which were issued to the trust during the July 2011 and December
2011 subscription periods were issued to a number of employees, all
of which remained in employment with Accsys. A total of 783,283 1
for 1 matching Shares were issued in August 2012 and a total of
130,831 1 for 1 matching Shares were issued in January 2013.
15. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 1 April 2011 252 73,200 4,231 77,683
Additions 283 - - 283
At 31 March 2012 535 73,200 4,231 77,966
============ ============= ========= ========
Additions 861 92 - 953
At 31 March 2013 1,396 73,292 4,231 78,919
============ ============= ========= ========
Amortisation
At 1 April 2011 - 70,107 - 70,107
Amortisation 16 264 - 280
At 31 March 2012 16 70,371 - 70,387
============ ============= ========= ========
Amortisation 39 267 - 306
At 31 March 2013 55 70,638 - 70,693
============ ============= ========= ========
Net book value
At 31 March 2013 1,341 2,654 4,231 8,226
At 31 March 2012 519 2,829 4,231 7,579
At 1 April 2011 252 3,093 4,231 7,576
The carrying value of internal development costs, intellectual
property rights and goodwill on consolidation have been allocated
for impairment testing purposes to one cash generating unit being
the Group's licensing operations. The recoverable amount of
internal development costs, intellectual property rights and
goodwill relating to this operation is determined based on a value
in use calculation which uses cash flow projections based on
financial budgets. Cash flows have been projected for a period of
10 years plus assumptions concerning a terminal value,
corresponding with the expected minimum life of the intellectual
property rights and based on a pre tax discount rate of 20% per
annum (2012: 20%). The key assumption used in the value in use
calculations is the level of future licence fees estimated by
management over the budget period. These have been based on past
experience and expected future revenues. A 5% increase in the
discount rate or a 15% reduction in expected revenues would not
give rise to an impairment.
16. Property, plant and equipment
Land and Plant and Office
buildings machinery equipment Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost or valuation
At 1 April 2011 6,815 26,108 462 33,385
Additions 65 850 154 1,069
Disposals - - - -
Foreign currency translation gain/(loss) - - (4) (4)
At 31 March 2012 6,880 26,958 612 34,450
========== ========== ========== ========
Additions - 252 41 293
Disposals (1,672) (20) - (1,692)
Foreign currency translation gain/(loss) - - 3 3
At 31 March 2013 5,208 27,190 656 33,054
========== ========== ========== ========
Depreciation
At 1 April 2011 - 6,560 398 6,958
Charge for the year 75 1,733 74 1,882
Disposals - - - -
Foreign currency translation gain/(loss) - - (4) (4)
At 31 March 2012 75 8,293 468 8,836
========== ========== ========== ========
Charge for the year 117 1,771 62 1,950
Disposals - (7) - (7)
Foreign currency translation gain/(loss) - - 4 4
At 31 March 2013 192 10,057 534 10,783
========== ========== ========== ========
Net book value
At 31 March 2013 5,016 17,133 122 22,271
At 1 April 2012 6,805 18,665 144 25,614
Included within property, plant and equipment are assets with an
initial cost of EUR6,252,000 and a net book value at 31 March 2013
of EUR4,590,000 which has been accounted for as a finance lease
under the terms of the sale and leaseback agreement entered into in
the year. See note 25.
17. Other financial assets
2013 2012
EUR'000 EUR'000
Available for sale investments - -
Accsys Technologies PLC has previously purchased a total of
21,666,734 unlisted ordinary shares in Diamond Wood China. The
Group does not currently have an intention to dispose of its
investment in Diamond Wood in the foreseeable future.
The carrying value of the investment is carried at cost less any
provision for impairment, rather than at its fair value, as there
is no active market for these shares, and there is significant
uncertainty over the potential fundraising efforts of Diamond Wood,
and as such a reliable fair value cannot be calculated.
The historical cost of the unlisted shares held at 31 March 2013
is EUR10m (2012: EUR10m). However, a provision for the impairment
of the entire balance of EUR10m continues to be recorded, as at 31
March 2013 the conclusion of Diamond Wood finalising its funding
arrangements was still pending. In the event Diamond Wood completes
the fund-raising, the balance may be re-valued.
18. Deferred Taxation
The Group has a deferred tax asset of EUR866,000 (2012:
EUR1,522,000) relating to trading losses brought forward. The
deferred tax asset has been recognised on the basis that trading
profits are expected to be recorded in the related legal entities
in the foreseeable future. These expected trading profits are
attributable to the production of Accoya(R) wood and the recharge
of research and development activities to other Group
companies.
The Group also has an unrecognised deferred tax asset of
EUR21,543,000 (2012: EUR18,983,000) which is largely in respect of
trading losses of the UK subsidiary. The deferred tax asset has not
been recognised due to the uncertainty of the timing of future
expected profits of the related legal entity attributable to
licensing activities.
Movements in recognised deferred tax asset:
2013 2012
EUR'000 EUR'000
Opening balance 1,522 2,095
Recognition of deferred tax asset - 22
Derecognition of deferred tax asset - -
Utilisation of deferred tax asset (656) (595)
Closing balance 866 1,522
======== ========
19. Subsidiaries
A list of subsidiary investments, including the name, country of
incorporation and proportion of ownership interest is given in note
4 to the Company's separate financial statements.
20. Inventories
2013 2012
EUR'000 EUR'000
Materials and work in progress 1,816 1,008
Finished goods 3,044 2,112
4,860 3,120
======== ========
The amount of inventories recognised as an expense during the
year was EUR13,172,827 (2012: EUR12,585,942). The cost of
inventories recognised as an expense includes a net credit of
EUR512,813 in respect of the inventories sold in the period which
had previously been written down to net realisable value. The cost
of inventories recognised as an expense in 2012 included EUR843,000
in respect of write down of inventories to net realisable
value.
21. Trade and other receivables
2013 2012
EUR'000 EUR'000
Trade receivables 2,294 2,129
Other receivables 249 576
Prepayments 1,145 871
3,688 3,576
======== ========
The Directors consider that the carrying amount of trade and
other receivables is approximately equal to their fair value.
The age of receivables past due but not impaired is as
follows:
2013 2012
EUR'000 EUR'000
Up to 30 days overdue 755 263
Over 30 days and up to 60 days overdue 49 79
Over 60 days and up to 90 days overdue 11 -
Over 90 days overdue 9 1
824 343
======== ========
In determining the recoverability of a trade receivable the
Group considers any change in the credit quality of the trade
receivables from the date credit was initially granted up to the
reporting date. Included in the provision for doubtful debts are
individually impaired trade receivables and accrued income with a
balance of EUR25,001,000 (2012: EUR25,001,000) due from Diamond
Wood.
Movement in provision for doubtful debts:
2013 2012
EUR'000 EUR'000
Balance at the beginning of the period 25,110 25,770
Release of impairment (59) (660)
Balance at the end of the period 25,051 25,110
======== ========
Summary of Receivable Impairments:
2013 2012
EUR'000 EUR'000
Trade receivables - Accoya(R) wood * 50 (89)
Trade receivables - Diamond Wood Licensing ** - (571)
Prepayments - Al Rajhi *** - 5,402
50 4,742
======== ========
* The impairment of Accoya(R) wood receivables relates to a
number of Accoya(R) customers.
** The previous impairment of Diamond Wood trade receivables in
2010 was partially reversed in 2011 and in 2012.
*** The impairment of prepaid commission costs relates to the Al
Rajhi licence agreement - this was partially offset by the release
of deferred income - see note 6.
22. Trade and other payables
2013 2012
EUR'000 EUR'000
Trade payables 2,333 2,231
Other taxes and social security payable 86 216
Accruals and deferred income 938 938
3,357 3,385
======== ========
23. Share capital
2013 2012
EUR'000 EUR'000
Allotted - Equity share capital
433,171,589 (2012: 404,016,642) Ordinary shares of EUR0.01 each 4,332 4,040
4,332 4,040
======== ========
On 2 August 2011, a total of 783,283 of Ordinary shares were
issued to a trust under the terms the Employee Share Participation
Plan. (See note 13).
On 23 January 2012, a total of 130,831 of Ordinary shares were
issued to a trust under the terms of the Employee Share
Participation Plan. (See note 14).
On 5 July 2012, a total of 3,926,666 shares were issued to an
Employment Benefit Trust, the beneficiaries of which were to be the
Executive Directors and Senior Managers (see note 14).
On 8 August 2012, a total of 783,283 of Ordinary shares were
issued and released to employees together with the 783,283 of
Ordinary shares issued to trust on 2 August 2011. (See note
14).
On 7 September 2012, a total of 415,332 of Ordinary shares were
issued to a trust under the terms of the Employee Share
Participation Plan. (See note 14).
On 19 October 2012, a total of 23,529,412 of Ordinary shares
were issued to INEOS following the receipt of subscription monies
totalling EUR4,000,000.
On 18 January 2013, a total of 369,423 of Ordinary shares were
issued to a trust under the terms of the Employee Share
Participation Plan. (See note 14).
On 23 January 2013, a total of 130,831 of Ordinary shares were
issued and released to employees together with the 130,831 of
Ordinary shares issued to trust on 23 August 2012. (See note
14).
24. Commitments under operating leases
The Group leases land, buildings and machinery under
non-cancellable operating lease agreements. The total future value
of the minimum lease payments that are due is as follows:
2013 2012
EUR'000 EUR'000
Operating lease payments due
Within one year 978 633
In the second to fifth years inclusive 1,345 1,251
In greater than five years 1,475 -
3,798 1,884
======== ========
The majority of commitments under operating leases relate to the
Group's offices in the UK, the Netherlands and U.S.A.
The increase compared to prior year is predominantly related to
the 2(nd) phase of the Arnhem land sale and leaseback which was
completed in February 2013.
Under the terms of the agreement, Accsys sold the land next to
the plant generating proceeds of EUR1,699,000. At the same time it
was agreed to lease the land and that the landlord would construct
new warehousing facilities which will assist with the Company's
ability to grow by allowing for improved logistics and wood
handling.
25. Commitments under finance leases
Agreements were reached in August 2011 for the sale and
leaseback of the land and buildings in Arnhem for a total of EUR4m.
EUR2.2m was received in the previous financial year with the
remaining amount received in the current year, but accounted for as
an operating lease. The transaction has resulted in a finance lease
creditor of EUR2.2m as at 31 March 2013:
Minimum lease payments
2013 2012
EUR'000 EUR'000
Amounts payable under finance leases:
Within one year 280 280
In the second to fifth years inclusive 1,120 1,120
After five years 2,332 2,613
Less: future finance charges (1,544) (1,789)
Present value of lease obligations 2,188 2,224
==================== ====================
Present value of minimum lease payments
2013 2012
EUR'000 EUR'000
Amounts payable under finance leases:
Within one year 264 264
In the second to fifth years inclusive 768 842
After five years 1,156 1,118
Present value of lease obligations 2,188 2,224
==================== ====================
26. Financial instruments
Financial instruments
Finance lease
Agreements were reached in August 2011 for the sale and
leaseback of the land and buildings in Arnhem under which a total
of EUR4m will be received. EUR2.2m was received in the previous
period with the remaining amount received in the current financial
year. Subject to the terms of the agreement, the buyer has
committed to build new storage facilities which will also allow for
an improvement in wood handling logistics. The transaction has
resulted in a finance lease creditor of EUR2,188,000 as at 31 March
2013 (2012: EUR2,224,000). The total lease term is 15 years. (See
note 24 and 25).
Equity line of credit and warrants
The Company's equity line of credit with GEM Global Yield Fund
Limited for up to EUR20m expired on 30 March 2012. The three year
agreement, which allowed the Company to issue shares at a price per
share which represents a 10% discount to the average closing price
over a 15 day period prior to the draw down. Each draw down was
based on the share price over a 15 day period, with GEM having had
the option to subscribe for between 50% and 200% of the number of
shares requested by the Company.
The Company also issued 3,000,000 warrants to GEM and 120,000
warrants to Montrose Partners LLP on 30 June 2009, and the warrants
were exercisable for a period of three years from the issue date at
an exercise price of EUR1.00 each as adjusted following the Firm
Placing and Placing and Open Offer in the previous financial year.
The warrants expired on 30 June 2012.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to shareholders.
The capital structure of the Group consists of cash and cash
equivalents and equity attributable owners of the parent Company,
comprising share capital, reserves and accumulated losses.
The Board reviews the capital structure on a regular basis. As
part of that review, the Board considers the cost of capital and
the risks associated with each class of capital. Based on the
review, the Group will balance its overall capital structure
through new share issues and the raising of debt if required.
No final dividend is proposed in 2013 (2012: EURNil). The Board
deems it prudent for the Company to protect as strong a statement
of financial position as possible during the current phase of the
Company's growth strategy.
Categories of financial instruments 2013 2012
EUR'000 EUR'000
Available for Sale investments - -
Loans and receivables
Trade receivables 2,294 2,129
Other receivables 249 576
Money market deposits in Euro 15,768 17,065
Money at call in Euro 2,180 2,560
Money at call in US dollars 459 396
Money at call in Sterling 671 543
Money at call in New Zealand dollars 375 -
Liquidity fund in Euro 1,013 4,010
Financial liabilities at amortised cost
Trade payables (2,333) (2,231)
Accruals (938) (938)
Finance lease creditor (2,188) (2,224)
17,550 21,886
======== ========
Money market deposits have interest rates fixed for less than
nine months at a weighted average rate of 1.17% (2012: 1.09%).
Money market deposits are held at financial institutions with high
credit ratings (Standard & Poor's rating of AA).
Trade payables are payable on various terms, typically not
longer than 30 days.
Market risk
The Group's activities expose it primarily to the financial
risks of changes in foreign currency exchange rates and interest
rates. There is also a risk associated with the available for sale
investment.
Financial risk management objectives
The Group's treasury policy is structured to ensure that
adequate financial resources are available for the development of
its business whilst managing its currency, interest rate,
counterparty credit and liquidity risks. The Group's treasury
strategy and policy are developed centrally and approved by the
Board.
Foreign currency risk management
Currency exposures are limited as the Group's functional
currency is the Euro with the majority of operating costs and
balances denominated in Euros. A smaller proportion of expenditure
is incurred in US dollars and pounds sterling. In addition some raw
materials, while priced in Euros, are sourced from countries which
are not within the Eurozone. The Group monitors any potential
underlying exposure to other exchange rates.
Interest rate risk management
The Group's borrowings are limited to the sale and leaseback of
the Arnhem land and buildings and therefore it is not exposed to
interest rate risk in relation to financial liabilities. Surplus
funds are invested in short term interest rate deposits to reduce
exposure to changes in interest rates. The Group does not enter
into any hedging arrangements.
Credit risk management
The Group is exposed to credit risk due to its trade receivables
due from customers and cash deposits with financial institutions.
The Group's maximum exposure to credit risk is limited to their
carrying amount recognised at the balance sheet date.
The Group ensures that sales are made to customers with an
appropriate credit history to reduce the risk where this is
considered necessary. The Directors consider the trade receivables
at year end to be of good credit quality including those that are
past due (note 21). The Group is not exposed to any significant
credit risk exposure in respect of any single counterparty or any
group of counterparties with similar characteristics other than the
balances which are provided for as described in notes 6 and 21.
The Group has credit risk from financial institutions. Cash
deposits are placed with a group of financial institutions with
suitable credit ratings in order to manage credit risk with any one
financial institution.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with
the Board, which has built an appropriate liquidity risk management
framework for the management of the Group's short, medium and long
term funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves and banking
facilities by continuously monitoring forecast and actual cash
flows and matching the maturity profile of financial assets and
liabilities.
In addition to the sale and leaseback of the Arnhem land and
buildings described above, the Group entered new finance facilities
secured on trade receivables and inventories:
Trade receivables facility
On 28 February 2011 the Group entered a trade receivable
financing and credit management agreement with Fortis Commercial
Banking for a period of at least two years from the closing date
and with a facility limit of EUR1.5m. After two years the agreement
was tacitly renewed for a rolling one year period. The facility is
secured upon the Group's trade receivable. At 31 March 2013, EURnil
had been drawn down under the agreement.
Inventories facility
On 17 January 2013 the Group entered a credit facility agreement
with ABN AMRO Bank N.V. with a facility limit of EUR3.0m for the
financing of the Group's operating activities. The facility is
secured against the inventories of the Group.
Both facilities are subject to interest at 1.5% above the ABN
AMRO base rate (4.2% as at 31 March 2013). At 31 March 2013, the
Group had EURnil (2012: EURnil) borrowed under either of the
facilities.
Fair value of financial instruments
In the opinion of the Directors, there is no material difference
between the book value and the fair value of all financial assets
and financial liabilities.
27. Related party transactions
In the year ended 31 March 2013, there were a number of related
party transaction with the Tricoya Technologies Limited joint
venture, all of which arose in the normal course of business,
totalling EUR618,000 (2012: Nil). At the end of the period
EUR237,000 of the total amount was payable from TTL to Accsys group
companies (2012: Nil). There were no related party transactions in
the year ended 31 March 2012.
28. Capital Commitments
2013 2012
EUR'000 EUR'000
Contracted but not provided for 72 17
Ends
Notes to editors:
Accsys Technologies PLC (www.accsysplc.com) is an environmental
science and technology company whose primary focus is on the
production of Accoya(R) wood and technology licensing via its
subsidiary, Titan Wood Limited, which has manufacturing operations
in Arnhem, the Netherlands (through its subsidiary Titan Wood
B.V.), a European office in Windsor, United Kingdom, and an
American office in Dallas, Texas (via its subsidiary Titan Wood,
Inc). All group subsidiaries are ultimately 100% owned by Accsys
and trade as Accsys Technologies. Any references in this
announcement to agreements with Accsys shall mean agreements with
either Accsys or its subsidiary entities unless otherwise
specified. Accsys Technologies PLC is listed on the London Stock
Exchange AIM market and on Euronext Amsterdam by NYSE Euronext,
under the symbols 'AXS'. Accsys' operations comprise three
principal business units: (i) Accoya(R) wood production; (ii)
technology development, focused on a programme of continuous
development of and improvements to the process engineering and
operating protocols for the acetylation of solid wood and the
development of technology for the acetylation of wood elements; and
(iii) the licensing of technology for the production of Accoya(R)
wood and Tricoya(R) wood elements across the globe.
Accoya(R) wood (www.accoya.com) is produced using Accsys'
proprietary patented acetylation technology, that effectively
converts sustainably grown softwoods and non-durable hardwoods into
what is best described as a "high technology wood". Distinguished
by its durability, dimensional stability and, perhaps most
importantly of all, its reliability (in terms of consistency of
both supply and quality), Accoya(R) wood is particularly suited to
exterior applications where performance and appearance are valued.
Unlike most tropical and European hardwoods, its colour does not
degrade when exposed to ultraviolet light. Moreover, the Accoya(R)
wood production process does not compromise the wood's strength or
machinability. The combination of UV resistance, dimensional
stability, durability and retained strength means that Accoya(R)
wood offers a wealth of new opportunities to architects, designers
and specifiers. For marine uses where weight is also important,
Accoya(R) wood for the first time provides boat builders with a
wood that is strong, lightweight, durable and retains its natural
beauty for far longer. For a full archive of Accoya(R) news, visit
www.accoya.com/news.asp.
Tricoya(R) Wood Elements (www.tricoya.com) are produced using
Accsys' proprietary technology for the acetylation of wood chips,
and particles for use in the fabrication of wood based composites,
including panel products. These composites demonstrate enhanced
durability and dimensional stability which allow them to be used in
a variety of applications that were once limited to solid wood or
man-made products. Exploitation of Accsys' proprietary technology
relating to Tricoya(R) Wood Elements is carried out through Tricoya
Technologies Limited, a joint venture between Accsys and INEOS
Industries Holdings Limited. Tricoya(R) Wood Elements are lauded as
the first major innovation in the wood composites industry in more
than 30 years.
Wood Acetylationis a process which increases the amount of
'acetyl' molecules in wood, thereby changing its physical
properties. When carried out to a sufficient level throughout the
wood, this process protects wood from rot by making it "inedible"
to most micro-organisms and fungi, without - unlike conventional
treatments - making it toxic. It also greatly reduces the wood's
tendency to swell and shrink, making it less prone to cracking and
ensuring that, when painted, it requires dramatically reduced
maintenance.
Accsys Technologies is the trading name of Titan Wood Limited.
ACCOYA(R), TRICOYA(R) and the Trimarque Device are registered
trademarks owned by Titan Wood Limited ("TWL"), a wholly owned
subsidiary of Accsys Technologies PLC, and may not be used or
reproduced without written permission from TWL, or in the case of
the Tricoya(R) registered trademark, from Tricoya Technologies
Limited, a joint venture between TWL and INEOS Industries Holdings
Limited with exclusive rights to exploit the Tricoya(R) brand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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