TIDMCAP
RNS Number : 6630Y
Clean Air Power Limited
08 September 2009
Clean Air Power Limited
("Clean Air Power" or "Company")
Interim Results for the year to 30 June 2009
For immediate release 8 September 2009
Clean Air Power Ltd (AIM:CAP), the developer of Dual-Fuel(TM) combustion
technology for heavy-duty diesel engines, today announces its results for the
six month period ended 30 June 2009.
Financial Highlights
* 14% increase in revenue to GBP3.3m (GBP2.9m for 6 months to June 2008)
* 29% increase in gross profit to GBP1.8m (GBP1.4m for 6 months to June 2008)
* Losses after tax reduced to GBP1.0m (GBP1.2m for 6 months to June 2008)
Operational Highlights
* Letter of Intent with Volvo Powertrain (Volvo) to incorporate Clean Air Power's
Dual-Fuel(TM) technology with Volvo truck engines
* Five 'Genesis' Dual-Fuel(TM) conversions delivered to Sainsbury's Supermarkets
* GBP0.50m orders received for Dual-Fuel(TM) conversions in Australia
* GBP0.60m order received by Emissions division, due for delivery in 2009
* Euro 5 Volvo Genesis product launched April 2009
* In February 2009 the fifth tranche, of GBP0.50m, was received under the
fundraising agreement with Endeavor Capital
* In May 2009, a further GBP2.38m was raised from Institutional Investors
John Pettitt, Chief Executive of Clean Air Power said:
"Clean Air Power continues to deliver improved sales and bottom line results in
spite of the global economic climate. However difficult trading conditions in
our sector have impacted these results and we expect that these conditions will
continue in the second half of the year. We have taken action to improve and
manage our cash position, through the recent fundraisings and implementation of
cost control measures. Our engineering team have concentrated on the interfaced
Dual-Fuel(TM) product we are developing with Volvo and the completion of our new
Euro 5 Genesis product. In July, an extension to the Letter of Intent with Volvo
was signed and a formal contract is expected to be signed by early autumn of
this year."
For further information, please contact:
Clean Air Power Ltd 01494 527110
John Pettitt
Peter Rowse
Buchanan Communications 020 7466 5000
Charles Ryland
Ben Willey
Ben Romney
Charles Stanley Securities 020 7149 6000
(Nominated Adviser and Broker)
Freddy Crossley
Jen Boorer
Chief Executive's Statement
Clean Air Power made good progress during the period towards its key objective
of reaching an agreement with a manufacturer to adopt the Company's patented
Dual-Fuel(TM) technology. The signature of a Letter of Intent with Volvo
Powertrain (Volvo) to commercialise the Company's technology on Volvo trucks as
an integrated option (OEM equipment) is expected to lead to a formal contract
being signed in the early autumn of this year.
Clean Air Power has 3 commercial divisions; Vehicle Conversions, Components and
Emissions Reduction systems.
1) Vehicle Conversions
The core technology of the Group gives rise to Clean Air Power's patented
Dual-Fuel(TM) system which allows a diesel engine to run on a combination of
both diesel and natural gas, thereby generating significant reductions in NOx,
particulate matter and CO2 emissions as well as generating fuel cost savings for
the operator.
The technology is currently available in two main variants; the interfaced
product currently marketed in Australia and the Genesis product marketed in
Europe.
The first half of the year has seen sales for this division reduce by 53%
compared to the period to 30 June 2008. This shortfall is partly due to the end
of the lifecycle of two products: the Euro 3 Genesis in Europe and the C-15
ADR80/01 in Australia. In addition, the current economic climate has led to our
customers reducing investment in new equipment and Caterpillar's decision to end
production of the C-15 engine has adversely affected Australian sales to date
and short term opportunities in Australia. Replacement products are now in place
or under development to ensure improved market coverage in the future.
Interfaced vehicle system
In this solution our Dual-Fuel(TM) technology is interfaced with the
manufacturer's electronic engine management system and therefore requires their
cooperation and maximises the reduction of emissions and fuel cost savings. We
expect around 80% of the diesel normally used by the vehicle to be substituted
for gas on an interfaced product. The current product offering is certified to
EPA 02 on a Caterpillar engine and can be fitted as an after-market solution to
vehicles in the Australian and South American markets. It is reaching the end of
its product life cycle as it can no longer be sold in the key US and European
markets.
In order to address the future US market the Company is aiming to develop and
certify an engine with a truck manufacturer to meet the US emissions target
levels. The current strategy is to deliver a US product under a cooperation
agreement with a major manufacturer although it would be possible for the
Company to develop and market its own engine to address this opportunity.
Clean Air Power is developing such an interfaced solution with Volvo. The
product is planned to be interfaced on one of the latest Euro 5 compliant Volvo
trucks. Euro 5 vehicles can be sold throughout the European Union and Australia
and certain other markets across the world.
Sales of the current interfaced solution have decreased in the first half of the
year as the global economic downturn preventing a repeat of last years
significant order levels. However in June 2009 the Company launched an updated
version of its C-15 product in Australia and has taken orders and deposits for
12 units to be completed in the second half of 2009 with a total value around
GBP0.5m.
Genesis vehicle system
The 'Genesis' system was developed specifically to be a retro-fitted product
which can be installed without the need for formal co-operation of the engine
manufacturers. The solution does not interface directly with the vehicles own
engine management system and around 50% of the diesel normally used by the
vehicle is substituted for gas. The emissions and fuel savings are therefore
lower than would be expected on a fully interfaced system, but still
economically attractive.
In February 2009, Clean Air Power completed the sale of 5 Genesis conversions to
Sainsbury's Supermarkets Limited. These vehicles were Euro 3 Mercedes Axor
trucks and they operate using biogas produced from landfill sites which is a
100% renewable fuel providing even greater emissions savings than natural gas.
Sainsbury's called this initiative 'Running on Rubbish'.
Initially, Clean Air Power has developed the Genesis solution for both DAF and
Mercedes Euro 3 compliant vehicles although these product variants are almost at
the end of their life cycle. In April 2009 the Company launched a Genesis
solution for a Volvo Euro 5 FM13 truck which addresses the more recent emission
targets in the UK and European markets and therefore has a longer life cycle.
Sales to 30 June 2009 were 7 units compared with 19 in the same period in 2008.
This performance was affected by the global economic downturn, which has
undoubtedly affected early sales opportunities for its new products, and the
need for a solution compliant with latest Euro 5 emissions standards.
Manufacturer Developments
The Company's main strategic goal remains to work with vehicle or engine
manufacturers to reach an agreement whereby our Dual-Fuel(TM) technology is
incorporated on their vehicle as a standard option and to develop it further
with their full cooperation. In this way the benefits of our technology and
routes to market can be maximised. The Group has been actively pursuing
agreements with a number of top tier organisations and the signing of the Letter
of Intent with Volvo represents a significant step forwards for the Company.
The Letter of Intent covers the development and commercialisation of products
which will include Clean Air Power's technology and sets out the intention that
they will be marketed and supported by Volvo Trucks.The products will have the
Clean Air Power technology fully interfaced with the Volvo engine management
system and applied to Volvo's D13 engine. This will provide the opportunity for
greater levels of gas substitution than Clean Air Power's existing Genesis
system, with corresponding improved emissions and fuel cost reductions.
The Letter of Intent provides for certain milestones relating to gas
substitution levels, emissions compliance, performance and durability testing.
Clean Air Power is confident that these milestones will be achieved based on its
prior experience of developing its technology on Volvo and other manufacturers'
engines.
Clean Air Power and Volvo engineers are currently working together to develop
the products and the agreement provides for Clean Air Power to receive revenue
from Volvo during the project. The first commercial products are anticipated to
be available in early 2010.
While we are delighted to have made such good progress with Volvo we hope to
shortly conclude the Volvo contract and, in the future, expand the product range
and distribution of Clean Air Power's technology across a number of engine
manufacturers worldwide.
2) Components Division
Clean Air Power manufactures a number of the components that are used in the
Group's Dual-Fuel(TM) technology. The Group sells these components for spark
ignited gas engines and certain other applications. Global demand for these
engines is increasing as customers are increasingly aware of the social and
economic drivers towards alternative fuels. With global sales, strong margins
and a customer base including international automotive manufacturers, this is an
important contributor to the overall Clean Air Power business.
The Components business is a mature and relatively predictable business based
largely on recurring revenues.
Revenue for the Components division increased considerably during the period,
which has largely contributed to the 14% increase in total sales for the
Company. Sales of GBP1.7m to 30 June 2009 are significantly higher than the
GBP0.4m achieved during the same period in 2008. The relocation of our San Diego
based factory affected early 2008 sales as supplier recertification activity
introduced production delays. This factor, along with improved demand from a
number of customers in 2009 were the main causes of the significant variance as
well as the appreciation of the US Dollar during the first half of 2009. This
business tends to operate with long initial order lead times but thereafter
receives regular recurring revenues from maintenance and servicing requirements
in addition to the initial demand for production.
3) Emissions Reduction Division
This area of our business provides solutions to very large stationary diesel
engines such as those used in pumping stations. Our current market is mainly in
the USA and we provide a solution whereby the emissions from large stationary
diesel engines are reduced, using Selective Catalytic Reduction technology and
diesel particulate filtering, usually in response to the requirements of local
legislation.
The business is mainly project based with a few large scale contracts generating
the majority of the revenue. A strategy is in place to develop revenue from
smaller, more regular contracts. Order lead times for this division are
typically much longer than for the other divisions of the Company.
The year to date sales of GBP0.6m show a considerable improvement on the GBP0.3m
achieved to June 2008. This improvement was boosted by GBP0.1m benefit in
exchange differences due to the appreciation of the US Dollar during the first
half of 2009. The order pipeline for 2009 is strong with further orders for
2009/2010 currently being negotiated.
Financial Review
The six month period to 30 June 2009 has seen revenue increase 14% to GBP3.3m
from GBP2.9m in the same period in 2008. This was partly due to a GBP0.3m
benefit in exchange differences due to the appreciation of the US Dollar during
the first half of 2009.
The gross profit of GBP1.8m earned compares favourably with GBP1.4m up to June
2008, a 29% increase. The 2009 gross margin to date of 53% is higher than the
46% achieved up until June 2008. The main cause has been the increased weighting
of the component business in the sales mix with the inclusion of additional
revenue derived from product development. This combination has contributed to a
reduction in the operating loss of 11% to GBP0.9m representing a
GBP0.2m improvement on the GBP1.1m loss for the same period in 2008.
During this period we have undertaken a fundamental review of our operations in
order to reduce costs and simplify our operations which will save the Company
around GBP0.6m on an annual basis. This has resulted in one off reorganisation
costs of GBP0.1m being incurred during the period.
The net result after tax for the period was a loss of GBP1.0m resulting in a
GBP0.2m improvement on the GBP1.2m loss for the same period in 2008. The basic
loss per share was 2.0p (2008: 4.0p).
Gross receipts from fundraising in the first half of the year were GBP2.9m
compared with GBP1.0m for the same period in 2008. The cash position at the end
of the year was GBP3.3m, compared to GBP1.4m at 30 June 2008
Investments in fixed assets have remained constant at GBP0.4m for the period
compared with GBP0.4m in the first half of 2008. The majority of these amounts
relate to capitalisation of labour and expenses incurred in developing new
products.
Outlook
Along with the availability of credit and the general economic climate, the
price of fuel and the availability of natural (or bio-) gas are significant
factors affecting demand for Dual-Fuel(TM) products. The recent steady increase
in diesel prices encourages operators to consider alternative options to reduce
costs and should this trend continue it is expected to have a positive effect on
customer demand.
The Board believes the discussions with Volvo will lead to a formal contract in
the autumn of this year. The rate of acceleration in demand for the
Dual-Fuel(TM) product is difficult to project under current market conditions
however it is expected to significantly impact Dual-Fuel(TM) division sales from
2010 onwards.
Furthermore, it is our intention to access the US market, as soon as possible,
with a Dual-Fuel(TM) product and therefore another key area continues to be our
ongoing activity with US operators and manufacturers focused towards a
cooperation agreement for North America
We continue to be encouraged by the sales performance of our Components and
Emissions divisions although we have yet to see the impact of the economic
slowdown on these divisions. Components are largely dependant on sales of gas
powered vehicles and Emissions on long lead time projects.
We remain confident in the medium to long term prospects for the Company and the
recent equity raises coupled with recent overhead reductions have improved the
current cash position.
+-----------+
| |
+-----------+
| John |
| Pettitt |
| Chief |
| Executive |
| 8 |
| September |
| 2009 |
+-----------+
+-------------------+
| INTERIM |
| CONSOLIDATED |
| INCOME STATEMENT |
+-------------------+
+--------+
| For |
| the |
| six |
| months |
| ended |
| 30 |
| June |
| 2009 |
+--------+
+----------------+--------+-----------+-----------+---------------+
| | | Unaudited | Unaudited | Audited |
+----------------+--------+-----------+-----------+---------------+
| | Note | 6 | 6 | Year |
| | | months | months | to |
| | | to | to | 31 |
| | | 30 | 30 | December 2008 |
| | | June | June 2008 | |
| | | 2009 | | |
+----------------+--------+-----------+-----------+---------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Revenue | 6 | 3,331 | 2,926 | 6,468 |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Cost | | (1,558) | (1,566) | (3,500) |
| of | | | | |
| Sales | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Gross | | 1,773 | 1,360 | 2,968 |
| profit | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Administrative | | (2,630) | (2,487) | (5,212) |
| expenses | | | | |
+----------------+--------+-----------+-----------+---------------+
| Share-based | 8 | (18) | (10) | (32) |
| payments | | | | |
| charge | | | | |
+----------------+--------+-----------+-----------+---------------+
| Impairment | | - | - | (114) |
| charge | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Operating | | (875) | (1,137) | (2,390) |
| loss | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Reorganisation | 12 | (143) | - | - |
| costs | | | | |
+----------------+--------+-----------+-----------+---------------+
| Finance | | 10 | 30 | 52 |
| revenue | | | | |
+----------------+--------+-----------+-----------+---------------+
| Finance | | - | (1) | (1) |
| costs | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Loss | 6 | (1,008) | (1,108) | (2,339) |
| on | | | | |
| ordinary | | | | |
| activities | | | | |
| before | | | | |
| taxation | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Tax | 5 | (2) | (56) | - |
| expense | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Loss | | (1,010) | (1, 164) | (2,339) |
| for | | | | |
| the | | | | |
| period | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| Basic | | (2.0p) | (4.0p) | (7.05p) |
| and | | | | |
| diluted | | | | |
| loss | | | | |
| per | | | | |
| share | | | | |
+----------------+--------+-----------+-----------+---------------+
| | | | | |
+----------------+--------+-----------+-----------+---------------+
| All items dealt with in arriving at |
| operating loss above relate to continuing |
| operations. |
+----------------+--------+-----------+-----------+---------------+
+---------------+
| INTERIM |
| CONSOLIDATED |
| STATEMENT OF |
|COMPREHENSIVE |
| INCOME |
+---------------+
+--------+
| For |
| the |
| six |
| months |
| ended |
| 30 |
| June |
| 2009 |
+--------+
+---------------+--------+-----------+-----------+----------+
| | | Unaudited | Unaudited | |
| | | | | Audited |
+---------------+--------+-----------+-----------+----------+
| | Note | 6 | 6 | Year |
| | | months | months | to |
| | | to | to | 31 |
| | | 30 | 30 | December |
| | | June | June | 2008 |
| | | 2009 | 2008 | |
+---------------+--------+-----------+-----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| Loss | | (1,010) | (1,164) | (2.339) |
| for | | | | |
| the | | | | |
| period | | | | |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| Exchange | | (347) | 23 | 757 |
| differences | | | | |
| on | | | | |
| translation | | | | |
| of foreign | | | | |
| operations | | | | |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| Total | | (1,357) | (1,141) | (1,582) |
| Comprehensive | | | | |
| loss for the | | | | |
| period | | | | |
+---------------+--------+-----------+-----------+----------+
| | | | | |
+---------------+--------+-----------+-----------+----------+
| Attributable | | | | |
| to: | | | | |
+---------------+--------+-----------+-----------+----------+
| Equity | | (1,357) | (1,141) | (1,582) |
| holders | | | | |
| of the | | | | |
| parent | | | | |
+---------------+--------+-----------+-----------+----------+
+--------------+
| INTERIM |
| CONSOLIDATED |
| STATEMENT OF |
|
FINANCIAL |
| POSITION |
+--------------+
+--------+
| As at |
| 30 |
| June |
| 2009 |
+--------+
+--------------+--------+--------+-----------+-----------+----------+
|
| | | Unaudited | Unaudited | Audited
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | Note | 6 | 6 | |
|
| | | months | months | Year |
| |
| | to | to | to |
| | |
| 30 | 30 | 31 |
| | | |
June | June | December |
| | | | 2009 |
2008 | 2008
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | GBP000 | GBP000 | |
|
| | | | | GBP000
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Assets | | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Non-current | | | | | |
| assets
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Plant | | 7 | 393 | 410 | 494 |
| and
| | | | | |
| equipment |
| | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Intangible | | 7 | 1,162 | 684 | 1,161 |
| assets
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | 1,555 | 1,094 | 1,655
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Current | | | | | |
| assets
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Inventories | | | 1,275 | 1,630 | 1,590
|
+--------------+--------+--------+-----------+-----------+----------+
|
Trade | | | 1,897 | 841 | 1,937 |
| and
| | | | | |
| other |
| | | | |
| receivables | |
| | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Cash | | 4 | 3,336 | 1,428 | 1,626 |
| and
| | | | | |
| cash |
| | | | |
| equivalents | |
| | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | 6,508 | 3,899 | 5,153
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
TOTAL | | | 8,063 | 4,993 | 6,808 |
| ASSETS
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Equity | | | | | |
| and
| | | | | |
| liabilities |
| | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Equity | | | | | |
|
attributable | | | | | |
| to
equity | | | | | |
| holders of
| | | | | |
| the parent |
| | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Ordinary | | 9 | 33 | 18 | 24 |
| share
| | | | | |
| capital |
| | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Share | | 9 | 14,043 | 9,796 | 11,231 |
| premium
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Translation | | | 801 | 414 | 1,148 |
| reserve
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Other | | | 33,504 | 33,504 | 33,504 |
| reserves
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Accumulated | | | (42,450) | (40,305) | (41,458) |
| loss
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Total | | | 5,931 | 3,427 | 4,449 |
| equity
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Non-current | | | | | |
|
liabilities | | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Other | | | 3 | 7 | 3 |
| payables
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | 3 | 7 | 3
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Current | | | | | |
|
liabilities | | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Trade | | | 1,600 | 1,104 | 1,710 |
| and
| | | | | |
| other |
| | | | |
| payables | |
| | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Provisions | | | 529 | 455 | 646
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | 2,129 | 1,559 | 2,356
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
Total | | | 2,132 | 1,566 | 2,359 |
|
liabilities | | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
TOTAL | | | 8,063 | 4,993 | 6,808 |
| EQUITY
| | | | | |
| AND |
| | | | |
| LIABILITIES | |
| | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
|
| | | | |
|
+--------------+--------+--------+-----------+-----------+----------+
INTERIM CONSOLIDATED CASH FLOW STATEMENT
+--------+
| For |
| the |
| six |
| months |
| ended |
| 30 |
| June |
| 2009 |
+--------+
+---------------------+-----------+-----------+----------+
|
| Unaudited | Unaudited | Audited
|
+---------------------+-----------+-----------+----------+
|
| 6 | 6 | Year |
| | months |
months | to |
| | to 30 | to 30 |
31 |
| | June | June | December |
|
| 2009 | 2008 | 2008
|
+---------------------+-----------+-----------+----------+
|
| GBP000 | GBP000 | GBP000
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Cash
| | | |
| flows | |
| |
| from | | |
|
| operating | | | |
| activities
| | |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Loss
| (1,008) | (1,108) | (2,339) |
| before | |
| |
| taxation | | |
|
+---------------------+-----------+-----------+----------+
| Adjustments
| | | |
| for: |
| |
|
+---------------------+-----------+-----------+----------+
| Net
| (10) | (29) | (51) |
| finance | |
| |
| income | | |
|
+---------------------+-----------+-----------+----------+
| Depreciation
| 75 | 51 | 115 |
| of plant and |
| | |
| equipment | | |
|
+---------------------+-----------+-----------+----------+
|
Amortisation | 275 | 275 | 397 |
| of
| | | |
| intangibles | |
|
|
+---------------------+-----------+-----------+----------+
| Impairment
| - | - | 114 |
| of | |
| |
| intangibles | | |
|
+---------------------+-----------+-----------+----------+
| Share-based
| 162 | 10 | 32 |
| payments |
| |
|
+---------------------+-----------+-----------+----------+
| Decrease
| 40 | 794 | 75 |
| in trade | |
| |
| and | | |
|
| other | | | |
| receivables
| | |
|
+---------------------+-----------+-----------+----------+
| (Decrease)
| (108) | (702) | (532) |
| in trade | |
| |
| and other | | |
|
| payables | | |
|
+---------------------+-----------+-----------+----------+
|
Decrease/(increase) | 315 | (142) | 164 |
| in inventories
| | |
|
+---------------------+-----------+-----------+----------+
|
(Decrease)/increase | (117) | 17 | 208 |
| in provisions
| | |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Net
| (376) | (834) | (1,817) |
| cash | |
| |
| outflow | | |
|
| from | | | |
| operating
| | | |
| activities |
| |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Investing
| | | |
| activities | |
|
|
+---------------------+-----------+-----------+----------+
| Interest
| 10 | 30 | 52 |
| received | |
|
|
+---------------------+-----------+-----------+----------+
| Sale of
| - | 35 | - |
| plant | |
| |
| and | | |
|
| equipment | | |
|
+---------------------+-----------+-----------+----------+
| Payments
| (25) | (212) | (320) |
| to | |
| |
| acquire | | |
|
| plant | | | |
| and
| | | |
| equipment |
| |
|
+---------------------+-----------+-----------+----------+
| Payments
| (393) | (244) | (824) |
| to | |
| |
| acquire | | |
|
| intangible | | | |
| assets
| | |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Net
| (408) | (391) | (1,092) |
| cash | |
| |
| outflow | | |
|
| from | | | |
| investing
| | | |
| activities |
| |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Financing
| | | |
| activities | |
|
|
+---------------------+-----------+-----------+----------+
| Interest
| - | (1) | (1) |
| paid | |
|
|
+---------------------+-----------+-----------+----------+
| Proceeds
| 2,878 | 1,000 | 2,500 |
| from the | |
| |
| issue of | | |
|
| ordinary | | | |
| share
| | | |
| capital |
| |
|
+---------------------+-----------+-----------+----------+
| Share
| (201) | (183) | (242) |
| issue | |
| |
| costs | | |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
| Net
| 2,677 | 816 | 2,257 |
| cash | |
| |
| inflow | | |
|
| from | | | |
| financing
| | | |
| activities |
| |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
|
Increase/(decrease) | 1,893 | (409) | (652) |
| in cash and cash
| | | |
| equivalents | |
|
|
+---------------------+-----------+-----------+----------+
| Effect
| (183) | 23 | 464 |
| of | |
| |
| exchange | | |
|
| rates on | | | |
| cash and
| | | |
| cash |
| | |
| equivalents | | |
|
+---------------------+-----------+-----------+----------+
| Cash
| 1,626 | 1,814 | 1,814 |
| and |
| | |
| cash | | |
|
| equivalents | | | |
| at the
| | | |
| beginning |
| | |
| of the year | | |
|
+---------------------+-----------+-----------+----------+
| Cash
| 3,336 | 1,428 | 1,626 |
| and |
| | |
| cash | | |
|
| equivalents | | | |
| at end
of | | | |
| period |
| |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
|
| | |
|
+---------------------+-----------+-----------+----------+
+--------------------------------------------------------------------------------------+
| INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
+--------------------------------------------------------------------------------------+
+--------------------------------------------------------------------------------------+
| For the six months ended 30 June 2009 |
+--------------------------------------------------------------------------------------+
+---------------+---------+---------+-------------+----------+-------------+---------+
| | Issued | Share | Translation | Other | Accumulated | Total |
| | Capital | Premium | Reserve | Reserves | loss | Equity |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Balance | 15 | 8,982 | 391 | 33,504 | (39,151) | 3,741 |
| at | | | | | | |
| 1 January | | | | | | |
| 2008 | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Other | - | - | 23 | - | - | 23 |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Loss | - | - | - | - | (1,164) | (1,164) |
| for | | | | | | |
| the | | | | | | |
| period | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Total | - | - | 23 | - | (1,164) | (1,141) |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Issue | 3 | 997 | - | - | - | 1,000 |
| of | | | | | | |
| share | | | | | | |
| capital | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Transaction | - | (183) | - | - | - | (183) |
| costs | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Share-based | - | - | - | - | 10 | 10 |
| payments | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Balance | 18 | 9,796 | 414 | 33,504 | (40,305) | 3,427 |
| at 31 | | | | | | |
| June | | | | | | |
| 2008 | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Other | - | - | 734 | - | - | 734 |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Loss | - | - | - | - | (1,175) | (1,175) |
| for | | | | | | |
| the | | | | | | |
| period | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Total | - | - | 734 | - | (1,175) | (441) |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Issue | 6 | 1,494 | - | - | - | 1,500 |
| of | | | | | | |
| share | | | | | | |
| capital | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Transaction | - | (59) | - | - | - | (59) |
| costs | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Share-based | - | - | - | - | 22 | 22 |
| payments | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Balance | 24 | 11,231 | 1,148 | 33,504 | (41,458) | 4,449 |
| at 31 | | | | | | |
| December | | | | | | |
| 2008 | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Other | - | - | (347) | - | - | (347) |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Loss | - | - | - | - | (1,010) | (1,010) |
| for | | | | | | |
| the | | | | | | |
| period | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Total | - | - | (347) | - | (1,010) | (1,357) |
| comprehensive | | | | | | |
| income | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Issue | 9 | 2,869 | - | - | - | 2,878 |
| of | | | | | | |
| share | | | | | | |
| capital | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Transaction | - | (201) | - | - | - | (201) |
| costs | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Share-based | - | 144 | - | - | 18 | 162 |
| payments | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
| Balance | 33 | 14,043 | 801 | 33,504 | (42,450) | 5,931 |
| at 30 | | | | | | |
| June | | | | | | |
| 2009 | | | | | | |
+---------------+---------+---------+-------------+----------+-------------+---------+
+------------+
| NOTES |
| TO THE |
| INTERIM |
| FINANCIAL |
|STATEMENTS |
+------------+
1. CORPORATE INFORMATION
The interim condensed consolidated financial statements of Clean Air Power
Limited for the six months ended 30 June 2009 were authorised for issue in
accordance with a resolution of the directors on 8 September 2009. Clean Air
Power Limited is a public limited Company incorporated in Bermuda whose shares
are publicly traded.
All of the revenues and operating assets relate to the Group's principal
business activities, being vehicle conversion sales, sales of components and an
emissions reduction business. Revenue is stated net of value added tax.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated financial statements for the six months ended
30 June 2009 have been prepared in accordance with IAS 34 Interim Financial
Reporting.
The interim condensed consolidated financial statements are presented in
sterling and all values are rounded to the nearest thousand (GBP'000) except
when otherwise indicated.
The interim condensed consolidated financial statements do not constitute the
report of the statements as defined under section 87A of the Companies Act 1981
and therefore do not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with the Group's
annual financial statements as at 31 December 2008, upon which the auditors
issued an unqualified opinion.
Accounting Policies
The accounting policies adopted in preparation of the interim condensed
financial statements are consistent with those followed in preparation of the
Group's annual financial statements for the year ended 31 December 2008, except
for the adoption of new Standards and Interpretations as of 1 January 2009,
noted below:
IFRS 2 - Share-based Payment - Vesting Conditions and Cancellations
The Standard has been amended to clarify the definition of vesting conditions
and to prescribe the accounting treatment of an award that is effectively
cancelled because of non-vesting condition is not satisfied. The adoption of
this amendment did not have any impact on the position or performance of the
Group.
IFRS 7 - Financial Instruments: Disclosures
The amended standard requires additional disclosure about fair value measurement
and liquidity risk. Fair value measurements are to be disclosed by source of
inputs using a three level hierarchy for each class of financial instrument. In
addition, reconciliation between the beginning and ending balance for Level 3
fair value measurements is now required, as well significant transfers between
Level 1 and Level 2 fair value measurements. The amendments also clarify the
requirement for liquidity risk disclosures.
IFRS 8 - Operating Segments
This standard requires disclosure of information about the Group's operating
segments and replaces the requirement to determine primary and secondary
reporting segments of the Group. Adoption of this standard did not have any
effect on the financial position or performance of the Group. The Group
determined that the operating segments were the same as the business segments
previously identified under IAS 14 Segment Reporting. Additional disclosure are
shown in Note 6.
IAS 1 - Revised Presentation of Financial Statements
The revised Standard separates owner and non-owner changes in equity. The
statement of changes in equity includes only details of transactions with
owners, with non-owner changes in equity presented as a single line. In
addition, the Standard introduces the statement of comprehensive income: it
presents all items of recognised income and expense, either in one single
statement, or in two linked statements.
+--------------------------------------------------------------------------------------+
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
+--------------------------------------------------------------------------------------+
IAS 23 - Borrowing Costs (Revised)
The standard has been revised to require capitalisation of borrowing costs on
qualifying assets and the Group has amended its accounting policy accordingly.
No borrowing costs have been incurred during the period.
IAS 32 Financial Instruments: Presentations and IAS 1 Puttable Financial
Instruments and Obligations Arising on Liquidation
The standards have been amended to allow a limited scope exception for puttable
financial instruments to be classified as equity if they fulfil a number of
specified criteria. The adoption of these amendments did not have any impact on
the financial position or performance of the Group.
3. RISKS AND UNCERTAINTIES
Management identify and assess risks to the business using a common model. The
Group has a number of exposures which can be summarised as follows: manufacturer
co-operation; in house product development; adaptation of core technology; gas
supply; regulatory framework; competition/intellectual property; additional
capital requirements; employees and trading risks. These risks and uncertainties
facing our business were reported in detail in the 2008 Annual Report and
Accounts and all of them are monitored closely by the Group. There have been no
significant changes in the Group's risk and uncertainty factors during the
review period, nor are any expected for the remainder of the year.
+------------------------------------------------------------------------------------+
| 4.Cash and cash equivalents |
+------------------------------------------------------------------------------------+
+----------------------------------------------------------+---------+---------+----------+
| | Unaudited 6 | Audited |
| | months to | year |
| | 30 June |ended 31 |
| | |December |
+----------------------------------------------------------+-------------------+----------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------------------+---------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+----------+
| Cash at bank and in hand | 3,336 | 1,428 | 1,626 |
+----------------------------------------------------------+---------+---------+----------+
| | 3,336 | 1,428 | 1,626 |
+----------------------------------------------------------+---------+---------+----------+
+------------------------------------------------------------------------------------+
| 5.Income tax |
+------------------------------------------------------------------------------------+
| The major components of income tax expense in the interim consolidated income |
| statement are: |
+------------------------------------------------------------------------------------+
+----------------------------------------------------------+---------+---------+----------+
| | Unaudited 6 | Audited |
| | months to | year |
| | 30 June |ended 31 |
| | |December |
+----------------------------------------------------------+-------------------+----------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------------------+---------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+---------+---------+----------+
| Current taxation | | | |
+----------------------------------------------------------+---------+---------+----------+
| | | | |
+----------------------------------------------------------+---------+---------+----------+
| Overseas tax | 2 | 56 | - |
+----------------------------------------------------------+---------+---------+----------+
| Income tax expense | 2 | 56 | - |
+----------------------------------------------------------+---------+---------+----------+
+----------------------------------------+
| 6.Segmental |
| analysis |
+----------------------------------------+
+----------+
| Revenue |
| by |
| business |
| segment: |
+----------+
+------------+
| For |
| management |
| purposes |
| the Group |
| is |
| organised |
| into |
| business |
| units |
| based on |
| their |
| products |
| and |
| services, |
| and has |
| three |
| reportable |
+------------+
| operating |
| segments |
| as |
| follows: |
+------------+
+------------------------------------------------------------------------------------+
| The vehicle conversions segment allows a standard diesel engine to operate on |
| natural gas without any major changes to the engine. |
+------------------------------------------------------------------------------------+
+------------------------------------------------------------------------------------+
| The components segment designs and delivers innovative hydraulic valves and |
| natural gas injector components for natural gas engines that enable automotive and |
| truck manufacturers to build low-emission gasoline, natural gas and diesel |
| vehicles that meet worldwide emissions regulations. |
+------------------------------------------------------------------------------------+
+------------------------------------------------------------------------------------+
| The emissions reduction segment offers emissions reduction solutions that reduce |
| regulated engine emissions by post combustion after-treatment of an engine's |
| exhaust gasses. |
+------------------------------------------------------------------------------------+
+--------------------------------------------------------------------------------------+
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
+--------------------------------------------------------------------------------------+
+----------------------------------------+
| 6.Segmental |
| analysis - |
| continued |
+----------------------------------------+
+---------------+-------------+------------+-----------+--------------+---------+
| | Unaudited 6 months to 30 June 2009 |
+---------------+---------------------------------------------------------------+
| | Vehicle |Components |Emissions | Adjustments | Total |
| |Conversions | |Reduction | and | |
| | | | |Eliminations | |
+---------------+-------------+------------+-----------+--------------+---------+
| Revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Third | 1,035 | 1,654 | 642 | - | 3,331 |
| party | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Inter-segment | 37 | - | - | (37) | - |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Total | 1,072 | 1,654 | 642 | (37) | 3,331 |
| revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Results | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Depreciation | (285) | (63) | (3) | 1 | (350) |
| and | | | | | |
| amortisation | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Segment | (1,028) | 226 | 33 | (249) | (1,018) |
| (loss)/profit | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | 10 |
| finance | | | | | |
| costs | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Tax | | | | | (2) |
| expense | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | (1,010) |
| loss | | | | | |
| for | | | | | |
| the | | | | | |
| year | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Capital | 412 | 6 | - | - | 418 |
| expenditure | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Non-current | 1,316 | 242 | 11 | (14) | 1,555 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Current | 2,451 | 2,997 | 1,103 | (43) | 6,508 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Provisions | 397 | 47 | 100 | (15) | 529 |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Operating | 1,465 | 438 | 243 | (17) | 2,129 |
| liabilities | | | | | |
| including | | | | | |
| provisions | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
+------------------------------------------------------------------------------------+
| 1. Inter-segment revenues are eliminated on consolidation. |
+------------------------------------------------------------------------------------+
| 2. Adjustments and eliminations relate to consolidation eliminations and Holding |
| Company items. |
+------------------------------------------------------------------------------------+
+---------------+-------------+------------+-----------+--------------+---------+
| | Unaudited 6 months to 30 June 2008 |
+---------------+---------------------------------------------------------------+
| | Vehicle |Components |Emissions | Adjustments | Total |
| |Conversions | |Reduction | and | |
| | | | |Eliminations | |
+---------------+-------------+------------+-----------+--------------+---------+
| Revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Third | 2,197 | 403 | 326 | - | 2,926 |
| party | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Inter-segment | 1,065 | - | - | (1,065) | - |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Total | 3,262 | 403 | 326 | (1,065) | 2,926 |
| revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Results | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Depreciation | (312) | (12) | (4) | 2 | (326) |
| and | | | | | |
| amortisation | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Segment | (1,063) | 15 | (76) | (13) | (1,137) |
| (loss)/profit | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | 29 |
| finance | | | | | |
| costs | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Tax | - | - | - | - | (56) |
| expense | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | (1,164) |
| loss | | | | | |
| for | | | | | |
| the | | | | | |
| year | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Capital | 380 | 76 | - | - | 456 |
| expenditure | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Non-current | 947 | 129 | 23 | (5) | 1,094 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Current | 2,970 | 818 | 246 | (135) | 3,899 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Provisions | 430 | 16 | 46 | (37) | 455 |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Operating | 1,236 | 140 | 205 | (22) | 1,559 |
| liabilities | | | | | |
| including | | | | | |
| provisions | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
+------------------------------------------------------------------------------------+
| 1. Inter-segment revenues are eliminated on consolidation. |
+------------------------------------------------------------------------------------+
| 2. Adjustments and eliminations relate to consolidation eliminations and Holding |
| Company items. |
+------------------------------------------------------------------------------------+
+--------------------------------------------------------------------------------------+
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
+--------------------------------------------------------------------------------------+
+----------------------------------------+
| 6.Segmental |
| analysis - |
| continued |
+----------------------------------------+
+---------------+-------------+------------+-----------+--------------+---------+
| | Audited year ended 31 December 2008 |
+---------------+---------------------------------------------------------------+
| | Vehicle |Components |Emissions | Adjustments | Total |
| |Conversions | |Reduction | and | |
| | | | |Eliminations | |
+---------------+-------------+------------+-----------+--------------+---------+
| Revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Third | 3,350 | 2,070 | 1,048 | - | 6,468 |
| party | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Inter-segment | 1,528 | - | - | (1,528) | - |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Total | 4,878 | 2,070 | 1,048 | (1.528) | 6,468 |
| revenue | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Results | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Depreciation | (384) | (121) | (7) | | (512) |
| and | | | | | |
| amortisation | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Segment | (2,397) | 207 | (45) | (155) | (2,390) |
| (loss)/profit | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | 51 |
| finance | | | | | |
| costs | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Tax | - | - | - | - | - |
| expense | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Net | - | - | - | - | (2,339) |
| loss | | | | | |
| for | | | | | |
| the | | | | | |
| year | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Capital | 934 | 210 | - | - | 1,144 |
| expenditure | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Non-current | 1,399 | 260 | 11 | (15) | 1,655 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Current | 2,886 | 1,654 | 675 | (62) | 5,513 |
| assets | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Provisions | 537 | 35 | 94 | (20) | 646 |
+---------------+-------------+------------+-----------+--------------+---------+
| | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
| Operating | 1,486 | 524 | 366 | (20) | 2,356 |
| liabilities | | | | | |
| including | | | | | |
| provisions | | | | | |
+---------------+-------------+------------+-----------+--------------+---------+
+------------------------------------------------------------------------------------+
| 1. Inter-segment revenues are eliminated on consolidation. |
+------------------------------------------------------------------------------------+
| 2. Adjustments and eliminations relate to consolidation eliminations and Holding |
| Company items. |
+------------------------------------------------------------------------------------+
+------------------------------------------------------------------------------------+
| 7.Plant, equipment & intangible assets |
+------------------------------------------------------------------------------------+
During the six months ended 30 June 2009, the Group acquired plant and equipment
with a cost of GBP25,000 (30 June2008: GBP212,000) (31 December 2008:
GBP320,000). Expenditure on product development for the six months ended 30 June
2009 was GBP393,000 ( 30 June 2008: GBP244,000) (31 December 2008: GBP824,000) .
+--------------------------------------------------------------------------------------+
| 8.Share-based payment |
+--------------------------------------------------------------------------------------+
On 19 June 2009, 566,066 shares were awarded with a market value of GBP144,347
to the Senior Management in lieu of cash bonuses that had been earned under the
Company's Senior Management 2008 bonus scheme. The Directors, along with other
senior managers in the scheme have agreed to hold the shares for a minimum of
twelve months.
During the period the Group recognised GBP17,836 (30 June 2007: GBP9,859)
related to equity-settled share-based payments transactions.
+--------------------------------------------------------------------------------------+
| 9.Financing |
+--------------------------------------------------------------------------------------+
On 7 April 2008 the Company's shareholders at a Special General Meeting approved
a private financing package with Endeavor Capital Management LLC and certain
other investors to provide additional funds for the Company.
Financing details
The financing package was designed to provide proceeds of up to GBP5.0m for the
Company between April 2008 and June 2009. Endeavor, a longstanding and major
shareholder in the Company, currently holding 18.5% of the Company's shares,
agreed to provide up to GBP4.65m of the new funds. The remainder of the GBP5m
was provided by another institutional investor which invested GBP0.25m and the
Company's management which invested a further GBP0.10m.
The funds have been received as follows:
On 22 April 2008, the first tranche of GBP1.0m was received; this increased the
ordinary share capital to GBP18,135 by the creation of an additional 5,714,343
Ordinary Shares with a nominal value of $US0.001 each and a market price of 17.5
pence per share. The difference between the consideration received of GBP1
million less costs of GBP0.183 million, and the nominal value of the shares
GBP2,900 has been transferred to the share premium account.
On 8 July 2008, the second tranche of GBP0.5m was received; this increased the
ordinary share capital to GBP19,505 by the creation of an additional 2,699,055
Ordinary Shares with a nominal value of $US0.001 each and a market price of
18.525 pence per share. The difference between the consideration received of
GBP0.5 million less costs of GBP0.025 million, and the nominal value of the
shares GBP1,370 has been transferred to the share premium account.
+--------------------------------------------------------------------------------------+
| NOTES TO THE INTERIM FINANCIAL STATEMENTS |
+--------------------------------------------------------------------------------------+
+--------------------------------------------------------------------------------------+
| 9.Financing - continued |
+--------------------------------------------------------------------------------------+
On 9 October 2008, the third tranche of GBP0.5m was received; this increased
the ordinary share capital to GBP21,296 by the creation of an additional
3,125,000 Ordinary Shares with a nominal value of $US0.001 each and a market
price of 16 pence per share. The difference between the consideration received
of GBP0.5 million less costs of GBP0.025 million, and the nominal value of the
shares GBP1,791 has been transferred to the share premium account.
On 12 December 2008, the fourth tranche of GBP0.5m was received; this increased
the ordinary share capital to GBP23,808 by the creation of an additional
3,746,761 Ordinary Shares with a nominal value of $US0.001 each and a market
price of 13.3 pence per share. The difference between the consideration received
of GBP0.5 million less costs of GBP0.025 million, and the nominal value of the
shares GBP2,512 has been transferred to the share premium account.
On 6 February 2009, the fifth tranche of GBP0.5m was received; this increased
the ordinary share capital to GBP25,951 by the creation of an additional
2,143,272 Ordinary Shares with a nominal value of $US0.001 each and a market
price of 23.3 pence per share. The difference between the consideration received
of GBP0.5 million less costs of GBP0.025 million, and the nominal value of the
shares GBP2,143 has been transferred to the share premium account.
In May 2009, the Company successfully raised a further GBP2.38m was received;
this increased the ordinary share capital to GBP32,799 by the creation of an
additional 10,883,706 Ordinary Shares with a nominal value of $US0.001 each and
a market price of 21.8 pence per share. The difference between the consideration
received of GBP2.38million less costs of GBP0.133 million, and the nominal value
of the shares GBP7,146 has been transferred to the share premium account.
For every two common shares subscribed for pursuant to the financing package,
the Company issued a warrant for the purchase of one additional common share,
exercisable within three years, with an exercise price at a 40% premium to the
issue price.
Endeavor was required to participate in each of the six tranches of the
financing package, with the other institutional investor and management only
investing in the first tranche. Depending on the movement in the share price
prior to the closing of each tranche, and the exercise of the latter three
tranches, Endeavor may acquire a majority interest in the Company.
The Company Bye-laws incorporate by reference various provisions of the City
Code, including Rule 9 of the City Code. However, this requirement may be waived
by an independent vote at a meeting of the Company shareholders and,
consequently, a resolution, with regards to acquisition of Ordinary Shares by
Endeavor or its Affiliates, was passed at a Special General Meeting.
The terms of the above finance package have now been complete.
+------------------------------------------------------------------------------------+
| 10.Going concern |
+------------------------------------------------------------------------------------+
The Group's business activities, together with the factors likely to affect its
future development, performance and position are set out in the Chief
Executive's Statement and the financial position of the Group is described
within the cash flow statement.
In May 2009, the Company successfully raised a further GBP2.38m, from
institutional investors, including Endeavor Capital, thereby completing the
terms of the finance package.
The Group has adequate financial resources together with long term relationships
with a number of customers and suppliers in different countries and industries.
As a result, the directors believe the Group is well placed to manage its
business risks successfully despite the current economic outlook.
After making enquiries, the directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the interim report and financial statements.
+------------------------------------------------------------------------------------+
| 11.Related party disclosures |
+------------------------------------------------------------------------------------+
The Group receives consultancy services from Hans Gunnar Folkesson, a
Non-Executive Director of Clean Air Power (Bermuda) Limited and Gary Ireson, the
Director of Clean Air Power Pty Ltd.
+------------------------------------------------------------------------------------+
| The following table provides the total amount of transactions, which have been |
| entered into with related parties for the relevant financial year. |
+------------------------------------------------------------------------------------+
+----------------------------------------------------+-----------+-----------+----------+
| Hans Gunnar Folkesson | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | year |
| | to | to | ended 31 |
| | 30 June | 30 June | December |
+----------------------------------------------------+-----------+-----------+----------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------+-----------+-----------+----------+
| Services received from related parties | 14 | 14 | 25 |
+----------------------------------------------------+-----------+-----------+----------+
| Amounts owed to related parties | - | - | - |
+----------------------------------------------------+-----------+-----------+----------+
+----------------------------------------------------+-----------+-----------+----------+
| Gary Ireson | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | year |
| | to | to | ended 31 |
| | 30 June | 30 June | December |
+----------------------------------------------------+-----------+-----------+----------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------+-----------+-----------+----------+
| Services received from related parties | 6 | 22 | 22 |
+----------------------------------------------------+-----------+-----------+----------+
| Amounts owed to related parties | 2 | - | 1 |
+----------------------------------------------------+-----------+-----------+----------+
+------------------------------------------------------------------------------------+
| 12.Reorganisation costs |
+------------------------------------------------------------------------------------+
During this period we have undertaken a fundamental review of our operations in
order to reduce costs and simplify our operations. This has resulted in one off
reorganisation charge of GBP143,000 being incurred during the period.
+------------------------------------------------------------------------------------+
| Report and Financial Information |
+------------------------------------------------------------------------------------+
Copies of the interim report for the Company for the period ended 30 June 2009
are to be made available on the Company's website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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